Topic – Titan

Industry

Submitted To: Submitted By:

Mrs. Shelly Sahil
Aggarwal
MBA
Roll No. –
R317A10
 Section – 317
Group - I

Introduction:

Titan Industries is a manufacturing company that produces India's

largest and best-known range of personal accessories – watches,
jewellery, sunglasses and prescription eye wear. Titan Industries was
established in 1984 as a joint venture between the Tata group and
the Tamil Nadu Industrial Development Corporation.

The company brought about a paradigm shift in the Indian watch

market, offering quartz technology with international styling,
manufactured in a state-of-the-art factory at Hosur, Tamil Nadu. In
1995, the company diversified into jewellery under the brand
Tanishq to capitalize on a fragmented market operating with no
brands in urban cities. In 2005, the company launched its second
jewellery brand, Gold Plus, to capitalize on opportunities in small
towns and rural India. The company has now entered into eye wear,
launching Fastrack eye-gear sunglasses and prescription eye wear.
 Balance Sheet
TITAN INDUSTRY
200803 200703 200603 200503
SOURCES OF FUNDS :
Share Capital 44.39 44.39 82.28 82.28
Reserves Total 391.78 283.05 150.3 94.96
Total Shareholders Funds 436.17 327.44 232.58 177.24
Secured Loans 188.11 172.67 148.84 193.52
Unsecured Loans 69.78 74.34 119.09 124.67
Total Debt 257.89 247.01 267.93 318.19

Total Liabilities 694.06 574.45 500.51 495.43

APPLICATION OF FUNDS :
Gross Block 558.06 515.49 420.43 400.08
Less : Accumulated
Depreciation 285.61 264.34 243.97 234.95
Less:Impairment of Assets 0 0 0 0
Net Block 272.45 251.15 176.46 165.13
Lease Adjustment 0 0 0 0
Capital Work in Progress 10 15.97 19.56 9.78
Investments 47.39 27.02 27.02 27.02
Current Assets, Loans & Advances
Inventories 1021.08 677.48 374.39 271.62
Sundry Debtors 96.45 92.06 90.12 77.09
Cash and Bank 51.92 50.73 38.29 44.18
Loans and Advances 99.17 63.42 143.96 171.63
Total Current Assets 1268.62 883.69 646.76 564.52
Less : Current Liabilities and Provisions
Current Liabilities 805.8 536.87 333.13 245.17
Provisions 73.89 53.27 26.72 20.93
Total Current Liabilities 879.69 590.14 359.85 266.1
Net Current Assets 388.93 293.55 286.91 298.42
Misc. Expenses not written off 0 4.21 14.31 24.4
Deferred Tax Assets 12.17 16.95 7 5.91
Deferred Tax Liability 36.88 34.4 30.75 35.23
Net Deferred Tax -24.71 -17.45 -23.75 -29.32

Total Assets 694.06 574.45 500.51 495.43

Contingent Liabilities 40.95 56.99 58.47 30.7 57.65

Trading and P & L A/c
 200803 200703 200603 200503 200403
(12) (12) (12) (12) (12)
INCOME :
Sales Turnover 3098.19 2181.69 1509.91 1150.89 961.12
Excise Duty 85.55 84.5 68.19 37.94 63.64
Net Sales 3012.64 2097.19 1441.72 1112.95 897.48
Other Income 84.69 9.3 7.16 10.66 9.53
Stock Adjustments 297.89 246.22 72.58 87.91 34.67

Total Income 3395.22 2352.71 1521.46 1211.52 941.68

EXPENDITURE :
Raw Materials 2389.92 1586.68 955.33 729.15 579.09
Power & Fuel Cost 13.9 11.55 10.02 9.97 8.9
Employee Cost 185.9 154.49 108.13 94.47 84.44
Other Manufacturing Expenses 49.36 42.37 31.1 25.83 17.21
Selling and Administration Expenses 324.89 273.13 197.59 173.57 107.76
Miscellaneous Expenses 175.38 102.82 84.07 89.71 64.52
Less: Pre-operative Expenses
Capitalised 0.02 0.52 0.89 0.49 0.81

Total Expenditure 3139.33 2170.52 1385.35 1122.21 861.11

Operating Profit 255.89 182.19 136.11 89.31 80.57

Interest 23.85 24.95 29.57 37.33 45.07
Gross Profit 232.04 157.24 106.54 51.98 35.5
Depreciation 29.73 25.59 19.66 19.61 21.47
Profit Before Tax 202.31 131.65 86.88 32.37 14.03
Tax 41.06 37.15 15.82 13.24 9.29
Fringe Benefit tax 3.71 3.24 3.01 0 0
Deferred Tax 7.27 -2.86 -5.57 -5.82 -6.44
Reported Net Profit 150.27 94.12 73.62 24.95 11.18
Extraordinary Items -19.54 -18.2 -21.92 -28.78 -25.9
Adjusted Net Profit 169.81 112.32 95.54 53.73 37.08

Adjst. below Net Profit 0 0 0 0 0

P & L Balance brought forward 130.93 77.5 29.62 19.56 17.18
Statutory Appropriations 0 0 0 0 0
Appropriations 62.65 40.69 25.74 14.89 8.8
P & L Balance carried down 218.55 130.93 77.5 29.62 19.56

Dividend 35.51 22.19 13.32 8.46 4.23

Preference Dividend 0 0.39 2.72 2.81 3.32
Equity Dividend % 80 50 30 20 10

Earnings Per Share-Unit Curr 32.49 20.25 16.24 4.87 1.63

Earnings Per Share(Adj)-Unit Curr 32.49 20.25 16.24 4.74 1.59
Book Value-Unit Curr 98.26 73.76 45.55 32.46 29.6

Comparative Analysis:
 The comparative financial statements are the statements of the
financial position at different periods of time. The elements of
financial position are shown in a comparative form so as to give an
idea of financial position at two or more periods. This gives us a brief
detail of:
1. Absolute figures in rupees;

2. Changes in absolute figures i.e. increase/decrease in figures

3. Absolute data in terms of percentages;

4. Increase or decrease in terms of percentages.

It is to be noted that the comparative analysis of balance sheets of

any firm is done only when the same accounting principles are used
in preparing these statements.

Comparative Balance Sheet:

The comparative balance sheet analysis is the study of the

trend of the same items, group of items in two or more balance
sheets of the same business enterprise on different dates. The
changes in the balance sheets items reflect the conduct of a
business. We compare two or more balance sheets of a company
and see the changes and interpret the changes.
 Comparative Income Statement
671.7
Sales Turnover 1509.91 2181.69 8 45
Excise Duty 68.19 84.5 15.31 22.45
655.4
Net Sales 1441.72 2097.19 7 45.5
Other Income 7.16 9.3 2.14 29.9
173.6 239.2
Stock Adjustments 72.58 246.22 4 3
604.7
COGS 1335.18 1939.95 7 45.29
Gross Profit 106.54 157.24 50.7 47.6

Operating
Expenses
631.3
Raw Materials 955.33 1586.68 8 66.1
Power & Fuel Cost 10.02 11.55 1.53 15.14
Employee Cost 108.13 154.49 46.36 42.9
Other Manufacturing Expenses 31.1 42.37 11.27 36.23
Selling and Administration
Expenses 197.59 273.13 75.54 38.23
Miscellaneous
Expenses 84.07 102.82 18.75 22.3
Less: Pre-operative Expenses
Capitalised 0.89 0.52 -0.37 -0.41

785.1
Total Expenditure 1385.35 2170.52 7 56.7

Operating Profit 136.11 182.19 45.84 33.7

Interest 29.57 24.95 -4.62 -15.62

Depreciation 19.66 25.59 5.93 30.16

Profit Before Tax 86.88 131.65 44.77 51.53
Tax 15.82 37.15 21.33 134
Fringe Benefit tax 3.01 3.24 0.23 7.6
Deferred Tax -5.57 -2.86
Reported Net Profit 73.62 94.12 20.5 27.9
 Comparative Balance Sheet
Year
2006 2007
Increase/Decr
Amount Amount ease Percentage inc/dec
Assets
Inventories 374.39 677.48 303.9 17
Sundry
Debtors 90.12 92.06 1.94 2.1
Cash and Bank 38.29 50.73 12.44 32.48
Loans and
Advances 143.96 63.42 -80.54 -56

Investment 27.02 27.02 ----------- -----------

Total Assets 673.98 910.71 236.93 36.63

Liabilities &
Capital
Current
Liabilities 333.13 536.87 203.74 61.15
Provisions 26.72 53.27 26.55 99.4
Share Holders'
Fund 232.58 327.44 94.86 40.79
Secured Loans 148.84 172.67 23.83 16.01
Unsecured
Loans 119.09 74.34 -44.75 -37.57

Total 673.98 910.71 236.93 36.63

 Profitability Ratios
The Primary objective of a business undertaking is to earn
profit. Profit earning is considered essential for the survival of the
business. A business needs profits not only for its existence but also
for expansion & diversification. In the words of Lord Keynes, ‘‘Profit
is the engine that drives the business enterprise”. Profits are useful
measure of overall efficiency of a business. Profits to management
are the test of efficiency & a measurement of control ; to owners, a
measure of growth of their investment ; to employees, a source of
fringe benefits, to government ; a measure of tax-paying capacity,
profitability ratios are calculated to measure the overall efficiency of
the business. Generally, profitability ratios are calculated either in
relation to sales or in relation to investment. The various profitability
ratios are discussed below:

Gross Profit Ratio:

 The GP ratio indicates the relationship between GP &
Net sale. It reflects the efficiency with which a firm produces its
products. Here we are given the balance sheet of the company and
the Gross Profits of Titan Industries from the last three years 2006,
07 and 08 are 232.04,157.24 and 106.54
The formula to calculate gross profit ratio is
: Gross Profit/Net Sales x 100
Here the gross profit and sales of till the start of 2008 are
: 232.04, 3012.64;
So the GP ratio will be:
:- 232.04/3012.64x100
: 7.7% (of the year 2008)
With the use of same formula we can calculate the GP ratios for the
rest 2007, 2006 years. Hence the ratios are 7.5% and 7.3%
respectively.
GP ratio of Titan Industries from last three have increased which
show that the company increased selling price of product, in march
2006 GPR is 7.3% but in 2007 it goes 7.5% and finally in 2008 it is
7.7% it describes that company have earned its trading and
manufacturing activities. There are good use of their resources like
labour, material, etc. Increase in GPR it indicates the following result
in organization:-
The selling price of the goods has gone up without corresponding
increase in the cost of goods sold.
The cost of goods sold has gone down without corresponding
decrease in the selling price of the goods.
Purchases might have been omitted or sales figure might have been
inflated.
Net Profit Ratio
NP ratio establishes a relationship
between net profit (after taxes) & sales. The net profits are obtained
after deducting income-tax, non-operating incomes & expenses.
To obtain Net Profit ratio we use this formula:
: NP/Net Sales x 100
The net profit of company during 2007 and 2006 and 2005 are:
: 169.81,112.32 and 95.54

And the net profit ratios for these years w.r.t. sales (3012.64 ,
2097.19 and1441.72)
:5.6%,5.3% and 6.6%

Explanation:
The NP ratio of Titan Industries in 2006 is 6.6% but in 2007
5.3% & in 2008 it is 5.6%. It shows the decline in the NP of the
company from 2006 to 2007 and slight increase in 2008 due to
decrease in their expenses & taxes.

Expenses Ratio
Expenses ratios indicate the relationship
of various expenses to net sales. The operating ratio reveals the
average total variations in expenses. But some of the expenses may
be increasing while some may be falling. The lower the ratio, the
greater is the profitability & higher the ratio, lower is the
profitability. The selling and distribution expenses of Titan Industries
for last three years are:
: 324.89, 273.13 and 197.59
The formula for calculating expense ratios is: expense/sales x 100
Hence the ratios are: 324.89/3012.64 x 100 =10.8%, 13.02%, and
13.7% for 2008,2007 and 2006 respectively.

Operating Profit Ratio:

Operating Profit ratio is calculated by dividing operating
profit by sales. Operating Profit of any firm can be calculated as the
subtaraction operating cost from the net sales. Operating Profits of
the industries for the last years are 255.89, 182.19 and 136.11. We
can obtain the operating profit ratio as following formula
: Operating Profit/net sales x 100
Hence the OPRs of 2008,2007 and 2006 w.r.t. sales (3012.64 ,
2097.19 and1441.72) are
:255.89/3012.64 x 100
: 8.5%, 8.7% and 9.4%. .
The ratios show the decline in OPR in 2008 as compared to 2007 due
to increase in expenses and other costs.

ASSETS POSITION

Inventory turnover Ratio

Inventory turnover ratio measures the velocity of

conversion of stock into sales. A high turnover indicates efficient
management of inventory because more frequently the stocks are
sold, the lesser amount of money is required to finance the
inventory. The inventory ratios for the last three years are 3.65,
4.15 and 4.67.
The ratios show that there is slightly decrease in the
inventories w.r.t. previous years.
CURRENT RATIO:

A high current ratio is an indication that the firm is

liquid and has the ability to pay its current obligations in time as and
when they become due. 2:1 ratio is considered to be as a good one
and satisfactory for a company.

In the financial year 2007 the company current ratio

was 1.17 it means that the current assets are 1.17 of current
liabilities. The ideal current ratio is 2:1.

In the financial year 2008 the company obtains a

upward motion from 1.17 to 1.19 in terms of current ratio. Company
is not able to obtain satisfactory ratio. It means that company
current assets were not double from current liabilities.

QUICK RATIO:
Liquid ratio tests the more liquidity of the
company as compared to the current ratio because it not includes
stock and prepaid expenses. Liquid assets can be obtained by
following method .

Liquid Asset =Sundry debtors +Cash at bank +Cash

in hand+ loans

=96.45 + 51.92

= 148.37

Now the quick ratio can be calculated by dividing quick or

liquid assets by current liabilities.

Hence the liquid ratios for last three years are:

: 0.2, 0.3 and 0.4

 In 2007 company liquid ratio was 0.3, company was not a
good position to pay their obligation. The company could not meet
the ideal liquid 1:1 because the company’s liquid assets are less
than from the current liabilities. They are not able to pay their short
term obligation.

In 2008 company liquid ratio was 0.2 it means that the

company liquid ratio reduces as compared to the previous year. This
ratio shows the bad liquidity position of the company.

Fixed Assets
The industries have gained more fixed
assets during 2008 and 2007 as compared to 2006 which raised the
fixed assets to net worth ratio to a extent implying that company
has more spent on the purchase of its fixed assets and total debt is
increased in 2008. the industry has large amount funds in form of
fixed assets. It shows the company has sound financial position and
they can run their business efficiently to earn more profit.

Current Assets
The industries has gained its current assets more since
2006. The debtors of the industries have been increased and its
inventories also are increased. Industries current ratios which we
have already explained in current ratio section show that the
industries is not able to get the satisfactory position.

Liabilities Position
Debt-Equity Ratio:
The debt-equity ratio is calculated to measure the
extent to which debt financing has been used in a business. The
ratio indicates to proportionate claims of owners and the outsiders
against the firm’s assets. The purpose is to get an idea of the
cushion available to outsiders on the liquidation of the firm. A ratio
of 1:1 may be usually considered to be a satisfactory ratio.
In the case of Titan industries, the debt equity ratio
is:
0.66, 0.92 and 1.43 for the
years 2008-07-06.

Working Capital Turnover Ratio

Working capital of a concern is

directly related to sales. The current assets like debtors, bills
receivables, cash, sock etc. change in sales. Working capital
turnover ratio indicates the velocity of the utilization of net working
capital. This ratio indicates the number of times the working capital
is turned over in the course of a year. This ratio measure the
efficiency with which the working capital is being used by firm. A
higher ratio indicates utilization of working capital & a low ratio
indicates otherwise.

Auditor’s Report

1. We have audited the attached balance sheet of TITAN

INDUSTRIES
LIMITED as at 31st March, 2008 and also the profit and loss account
and
 the cash flow statement for the year ended on that date, annexed
thereto. These financial statements are the responsibility of the
Companys management. Our responsibility is to express an opinion
on
these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards

generally accepted in India. Those standards require that we plan
and
perform the audit to obtain reasonable assurance about whether
the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made
by management, as well as evaluating the overall financial
statement
presentation. We believe that our audit provides a reasonable basis
for
our opinion.

3. As required by the Companies (Auditors Report) Order, 2003,

issued
by the Central Government in terms of sub-section (4A) of Section
227
of the Companies Act, 1956, we give in the Annexure a statement
on the
matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in

paragraph 3
above, we report that:

a) we have obtained all the information and explanations, which to

the
best of our knowledge and belief were necessary for the purposes of
our
audit;

b) in our opinion, proper books of account as required by law have

been
 kept by the Company, so far as appears from our examination of
those
books;

c) the balance sheet, profit and loss account and cash flow
statement
dealt with by this report are in agreement with the books of
account;

d) in our opinion, the balance sheet, profit and loss account and
cash
flow statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956;

e) on the basis of written representations received from the

directors,
as on 31 st March, 2008, and taken on record by the Board of
Directors,
we report that none of the directors is disqualified as on 31 st
March,
2008 from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Companies Act, 1956;

f) in our opinion and to the best of our information and according to

the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required
and give
a true and fair view in conformity with the accounting principles
generally accepted in India:

(i) in the case of the balance sheet, of the state of affairs of the
Company as at 31st March, 2008;

(ii) in the case of the profit and loss account, of the profit for the
year ended on that date; and

(iii) in the case of the cash flow statement, of the cash flows for the
year ended on that date.

Annexure referred to in paragraph (3) of the Auditors Report to the

Members of TITAN INDUSTRIES LIMITED on the Accounts for the year
ended
31st March, 2008
i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.

(b) Most of the fixed assets have been physically verified by the
management. As explained to us, no material discrepancies were
noticed
on such verification. In our opinion, the frequency of physical
verification of assets is reasonable having regard to the size of the
Company and the nature of its assets.

(c) During the year, in our opinion, the Company has not disposed of
a
substantial part of the fixed assets.

ii) (a) In our opinion, inventories have been physically verified

during the year by the management at reasonable intervals. In the
case
of stocks lying with third parties, certificates confirming stocks have
been received in respect of substantial portion of the stocks held.

(b) In our opinion and according to the information and explanations

given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in
relation to
the size of the Company and the nature of its business.

(c) In our opinion and on the basis of our examination of the records
of inventory, the Company has maintained proper records of
inventory.
Discrepencies noticed on physical verification of inventories as
compared to the book records were not material in relation to the
operations of the Company and have been properly dealt with in the
books of account.

iii) According to the information and explanations given to us with

regard to loans, secured or unsecured, granted or taken by the
Company
to or from companies, firms or other parties covered in the register
maintained under Section 301 of the Companies Act, 1956, we
report as
follows:
 (a) During the year, the Company has not granted loans to any such
parties. The maximum amount involved at any time during the year
and
the year end balance of the loans granted in earlier years was Rs.
7,795.67 lakhs and Rs. 3,591.06 lakhs respectively.

(b) In our opinion, the rate of interest and other terms and
conditions
on which loans have been granted are not prima facie prejudicial to
the
interest of the Company.

(c) The parties have generally repaid the principal amounts and
interest as stipulated or as rescheduled.

(d) As at the end of the financial year, there is no overdue amount

in
excess of Rs.1 lakh in respect of loans granted.

(e) The Company has not taken loans except for intercorporate
deposits
from five companies. The maximum amount involved in such
transactions
at any time during the year and the year end balance of
intercorporate
deposits taken from such parties was Rs. 4,805 lakhs and Rs. 4,805
lakhs respectively.

(f) In our opinion, the rate of interest and other terms and conditions
of such intercorporate deposits are not prima facie prejudicial to the
interest of the Company.

(g) The Company is regular in repaying the principal amounts as

stipulated and has been regular in the repayment of interest.

iv) In our opinion and according to the information and explanations

given to us, having regard to the explanations that some of the
items
purchased are of a special nature for which comparable alternative
quotations are not available, there is an adequate internal control
system commensurate with the size of the Company and the nature
of its
business for purchase of inventory, fixed assets and for the sale of
goods and services. During the course of our audit, we have not
 observed any continuing failure to correct major weaknesses, if any,
in
internal control system.

v) In respect of the contracts or arrangements entered in the

register
maintained in pursuance of Section 301 of the Companies Act,
1956, to
the best of our knowledge and belief and according to the
information
and explanations given to us:

(a) The particulars of contracts or arrangements referred to in

Section
301 that needed to be entered in the register maintained under the
said
section have been so entered.

(b) Where each of such transactions (excluding loans reported

under
paragraph (iii) above) is in excess of Rs. 5 lakhs in respect of any
party and having regard to our comments in paragraph (iv) above,
the
transactions have been made at prices which are prima facie
reasonable
having regard to the prevailing market prices at the relevant time.

vi) In our opinion and according to the information and explanations

given to us, the Company has complied with the provisions of
Section
58A, 58AA or any other relevant provisions of the Companies Act,
1956
and the Companies (Acceptance of Deposits) Rules, 1975 with
regard to
the deposits accepted from the public. We are informed that no
order
has been passed by the Company Law Board or National Company
Law
Tribunal or Reserve Bank of India or any court or any other Tribunal.
Titan Industries Limited

vii) In our opinion, the Company has an internal audit system which
is
commensurate with the size and nature of its business.

viii) We have broadly reviewed the books of account and records

maintained by the Company pursuant to the Rules made by the
Central
Government for maintenance of cost records under Section 209(1 )
(d) of
the Companies Act, 1956 relating to the manufacture of watches
and
clocks and are of the opinion that prima facie the prescribed
accounts
and records have been made and maintained. We have, however,
not made a
detailed examination of the records with a view to determining
whether
they are accurate or complete. We are informed that maintenance
of cost
records has not been prescribed by the Central Government under
Section
209(1)(d) of the Companies Act, 1956 in respect of the Companys
other
products.

ix) (a) In our opinion and according to the information and

explanations given to us, the Company is generally regular in
depositing undisputed statutory dues including Provident Fund,
Investor
Education and Protection Fund, Employees State Insurance, Income
tax.
Sales tax, Value added tax, Wealth tax, Service tax, Customs duty,
Excise duty, cess and other material statutory dues, if any,
applicable
to it with the appropriate authorities. As at the last day of the
financial year, there are no arrears of such undisputed statutory
dues
outstanding for a period of more than six months from the date they
became payable.
(b) According to the records of the Company and the information
and
explanations given to us, there are disputed dues of Customs duty,
Excise duty, Income tax and Sales tax which have not been
deposited/
deposited partially, the details of which are set out below:

Name of the Nature of the Amount

statute dues (Rs. In lakhs)

The Customs Custom duty 316.94

Act, 1962

The Central Excise Excise duty 2,266.98

Act, 1944 46.62
15.72
76.77

Sales Tax Laws Sales tax 395.67

649.59
3.41

Income-tax Act, Income tax 90.77

1961

Period to which the amount Forum where dispute is pending

relates

1989-94 Supreme Court

May 2005 to March 2008 Supreme Court

March 1987- February 1990,1993-94, Customs, Excise and Service

Tax
April 1995 to
Oct 1998 and July 2001 Appellate Tribunal
-December 2002

1996-99 Commissioner (Appeals)

1996-98, July 1999 - November Assistant Commissioner

1999,2000-01 and 2002-03
2000-01 and 2002-04 Commercial Taxes Appellate &
Revisional Board

1995-99 and 2000-05 Deputy Commissioner (Appeals)

1997-98 Assistant Commissioner

1999-00 Commissioner of Income Tax

(Appeals)

x) The Company has neither accumulated losses at the end of the

financial year nor has it incurred cash losses during the current
financial year and in the immediately preceding financial year.

xi) In our opinion and according to the information and explanations

given to us, the Company has not defaulted in repayment of dues to
banks and debenture holders. There are no borrowings from
financial
institutions and therefore, reporting on the same does not arise.

xii) The Company has not granted loans or advances on the basis of
security by way of pledge of shares, debentures, and other
securities.

xiii) The provisions of special statute applicable to chit fund and

nidhi/mutual benefit fund/society are not applicable to the
Company.

xiv) The Company is not dealing in or trading in shares, securities,

debentures and other investments.

xv) The Company has not given any guarantees during the year for
loans
taken by others from banks or financial institutions.

xvi) The Company has not availed any term loans during the year.

xvii) According to the information and explanations given to us and

on
an overall examination of the balance sheet of the Company, funds
raised on short-term basis have prima facie, not been used during
the
year for long-term investment.
 xviii) The Company has not made any preferential allotment of
shares
during the year.

xix) As per the information and explanations given to us, the

Company
has created security in respect of debentures issued.

xx) We have verified that the end use of the money raised by public
issue is as disclosed in the notes to the financial statements.

xxi) To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the
Company
was noticed or reported during the year.

For A. F. Ferguson & Co.

Chartered Accountants

B. Ramaratnam
Place: Bangalore Partner
Date : 25th April, 2008 (Membership No. 2120p)

Director’s Report:
Directors Report Year End : Mar '07

The Directors are pleased to present the Twenty-third Annual Report

and
the Audited Statement of Accounts for the year ended 31st March,
2007:

Financial Results

Rs. in Crores
 2006-2007 2005-
2006

Net Income 2093.46

1442.61
Expenditure 1891.80
1286.23
Gross profit 201.66
156.38
Interest 20.42
24.84
Cash operating profit 181.24
131.54
Depreciation/Amortisation 25.59
19.66
Operating profit before exceptional items 155.65
111.88
Exceptional items:
Provision for doubtful loans and advances 24.00
25.00
Profit before taxes 131.65
86.88
Income taxes - Current 36.95
14.89
- Deferred (2.86)
(5.57)
- Fringe Benefit Tax 3.23
3.01
Profit after taxes for the year 94.33
74.55
Less : Income tax of earlier years 0.20
0.93
Net Profit 94.13
73.62
Profit brought forward 77.50
29.62
Amount available for appropriation 171.63
103.24
Appropriations :
Debenture redemption reserve 4.85
-
Dividend paid on preference shares 0.39
2.72
Proposed dividend on equity shares 22.20
13.32
Tax on dividends 3.83
2.25
Transfer to general reserve 9.43
7.45
40.70
25.74
Balance carried forward 130.93
77.50

The Company achieved a significant growth during the financial

year
2006-07 with sales income at Rs. 2136.46 crores growing by 44%
from the
previous year and Profit before taxes going up to Rs. 131.65 crores,
up by 52% from previous year.

Net profit for the year stood at Rs. 94.13 crores as compared to
Rs. 73.62 crores in the previous year.

The Watch segment grew by 20% to a sales income of Rs. 782.76

crores,
while Jewellery sales went up by 63% to Rs. 1290.89 crores. Sales of
other products, including Accessories and Precision Engineering
components, rose by 69% to Rs. 62.81 crores.

All brands of the Company have performed well and new

introductions in
both watches and jewellery, viz., the Aviator series in gents
watches,
Raga Collection for ladies and Zoya line in Tanishq jewellery have
had
very good responses, which augur well for the future.

The Company continued to expand its retail network and now has
perhaps
the largest reach in its category, with 211 World of Titan Show
rooms
and 88 Tanishq boutiques. Plain gold jewellery also made significant
inroads into smaller towns through 10 GoldPlus show rooms and the
Company's prescription eyewear began with the first Titan Eye +
store
at Bangalore, located at the same place where the first Titan watch
show room opened in 1987. As on date the Company has three Eye
+ stores
in Bangalore and one at Nagpur.

Exports/International Operations

The Company achieved an export turnover of Rs.116 crores during

the
year. Exports include sale of watches, Jewellery and precision
engineered components.

The International Business Division of the Company is spearheading

the
Company's globalization efforts for its watches and jewellery
businesses. The key challenge for this division is an ongoing
exercise
of identification of profitable business opportunities across the
globe, given the immense competition and clutter of brands in
overseas
markets. The international business division achieved a sales
growth of
32% in 2006-07 over the previous year, while the Watch sales grew
by
36%, Jewellery sales went up by 31% as compared to 2005-06.
 While the Company had in the past provided for its accumulated
losses
in Europe, further provisioning to the extent of Rs.24 crores has
been
considered in respect of certain loans and advances to its overseas
subsidiaries/associates towards slow moving inventories held by
these
associates and operating losses for the year. This provisioning has
been shown as an exceptional item in the Company's accounts. The
Company has initiated various steps in restructuring its overseas
companies and this exercise is expected to be completed during the
current financial year.

Dividend

The Company had issued cumulative preference shares of a total

value of
Rs. 40 crores at various rates of dividend from 6% to 8% which have
subsequently been redeemed out of the proceeds of the Rights
Issue in
May 2006. Final Dividend on these preference shares amounting to
Rs.
0.39 crore was paid till date of redemption.

The Directors are pleased to recommend payment of dividend on

equity
shares at an enhanced rate of 50% ( Rs.5.00 per equity share), if
approved by the shareholders at the Annual General Meeting.
Rights Issue

During May 2006, the Company allotted 2, H 3,038 Partly

Convertible
Debentures (PCD's) of Rs. 600 each (Equity share of Rs. 10 each at
a
premium of Rs. 34Q and Non-convertible Debentures of Rs. 250
each)
aggregating to Rs. 126.79 crores, in the ratio of one PCD for twenty
equity shares held on the Record Date, i.e., 6th March 2006.

The Issue was oversubscribed by about 1.2 times and the Directors
wish
to place on record their appreciation of the shareholders' continued
support to the company's growth plans of its various businesses.

The infusion of equity will help the Company to support its

ambitious
growth plan and profitability improvement strategy, besides
keeping the
debt financing at optimum levels.

Finance
During the year under review, the Company redeemed preference
shares
aggregating Rs.40 crores, out of the proceeds of the Rights Issue in
May 2006.
The Company raised a total of Rs. 378.30 crores from borrowings, of
which Rs. 259.12 crores were from Commercial banks and the
balance of
Rs. 119.18 crores from other sources. Borrowings of Rs. 400.02
crores
were repaid during the year.The Company incurred Rs. 37.98 crores
as
capital expenditure in respect of refurbishment and expansion
programmes, Capital investment in Precision Engineering Division
and in
IT Hardware systems.

During the year, the Company acquired the overseas trademark

rights to
the Titan brand and certain other brands for a consideration of Rs.
63.27 crores which is being amortised over a period of 120 months.

During the year 2006-07, interest rates started climbing due to

inflationary pressues and tight money market conditions. The
increase
in CRR and SLR announced by RBI had its impact, with the
commercial
banks raising their lending rates. Given the current inflation rate
and
the tight liquidity position of banks, it expected that this high
interest rate regime will continue for some more time.

As a result the average cost of borrowings for the year was 8.71%
as
against 8.21% in the previous year.

As on 31st March, 2007, the Company held fixed deposits of Rs.

8.29
crores from the public, shareholders and employees. There were no
overdue deposits other than unclaimed deposits amounting to Rs.
0.11
crore.

An amount of Rs. 4.85 crores has been transferred to the debenture

redemption reserve in accordance with statutory requirements and
the
terms of Rights Issue.

During the year under review, the Company made payments

aggregating to
Rs. 308.97 crores by way of central, state and local taxes and duties
as against Rs. 221.45 crores in the previous year.

Subsidiaries

The Company has four subsidiaries, viz. two direct wholly-owned

subsidiaries, Titan Time Products Ltd., Goa (TTPL) and Titan
International Holdings BV, Amsterdam (TIHBV) and two other
subsidiaries, viz. Titan Brand Holdings NV, Curacao (TBHNV) and
Titan
Watch Company Ltd., Hongkong (TWC).
 TTPL sold 7.10 million Electronic Circuit Boards in 2006-07 and
made a
net profit of Rs. 66.23 lakhs. TWC is only a name saver corporation
and
has no income or expenses. TBHNV made a loss of EUR 196,099 and
TIHBV
made a loss of EUR 14.44 million primarily on account of the
provisions
for its investments in, and loans to, the erstwhile European
marketing
arm, Titan International Marketing Ltd. Corresponding provisions
had
already been made earlier by your Company. TIHBV also wrote off
the
balance value of Design Rights capitalized in its books, and your
Company has accordingly provided about Rs. 7 crores during the
year,
against its loans to TIHBV on this account.

As per Section 212(1) of the Companies Act, 1956, the Company is

required to attach to its Accounts the Directors' Report, Balance
Sheet
and Profit and Loss Account of each of these subsidiaries. As the
consolidated accounts present a complete picture of the financial
results of the Company and its subsidiaries, the Company had
applied to
the Central Government seeking exemption from attaching the
documents
 referred to in Section 212 (1). Approval for the same has been
granted.
Accordingly, the Annual Report of the Company does not contain
the
individual financial statements of these subsidiaries, but contains
the
audited consolidated financial statements of the Company and its
subsidiaries. The Annual Accounts of these subsidiary companies,
along
with the related information, is available for inspection at the
Company's registered office and copies shall be provided on
request.
The statement pursuant to the approval under Section 212(8) of the
Companies Act, 1956, is annexed together with the Annual Accounts
of
the Company.

Associates

The Company has approved a scheme of amalgamation/merger of

three of
its domestic Associate Companies viz Samrat Holdings Ltd, Titan
Holdings Ltd and Questar Investments Ltd as transferor companies.
The
said companies shall stand merged with Titan Industries Ltd as
Transferee Company, subject to required approvals and consents
and
subject to conditions if any imposed by High Courts of relevant
 jurisdiction. The appointed date of the scheme of
amalgamation/merger
is 1st April 2007. The swap ratio of the shares of the Transferee
company to be issued to the minority shareholders of the Transferor
companies shall be based on valuation of the transferor companies
as on
31st March, 2007.

Samrat Holdings Ltd. made a net profit of Rs. 728.88 lakhs in 2006-
07
and had paid two interim equity dividends of 200% each during the
year.
Questar Investments Ltd. and Titan Holdings Ltd. made a net profit
of
Rs. 140.23 lakhs and Rs. 28.63 lakhs respectively, but have not
declared any dividend on equity shares.

Tanishq (India) Ltd. and Titan Mechatronics Ltd. also made a net
profit
of Rs. 1.58 lakhs and Rs. 0.38 lakh respectively. Titan Properties Ltd
made a small loss of Rs. 0.33 lakh. None of these companies have
declared a dividend.

Titan International (Middle East) FZE (TIME), Dubai, made a loss of

US
$ 0.23 million, whileTitan Watches & Jewellery International (Asia
Pacific) Pte. Ltd., (TAPL), Singapore made a loss of SGD 0.83 lakh.
 Titan International Marketing Ltd. (TIML) London posted an
operating
loss of GBP 1.48 million for the year 2006. Consolidated Financial
Statements

The Consolidated Financial Statements of the Company prepared as

per
Accounting Standards AS 21 and AS 23, consolidating the
Company's
accounts with its subsidiaries and associates, has also been
included
as part of this Annual Report.

Outlook for 2007-08

The Company can look back with satisfaction at the last year's
(2006-07) performance as being one of the best ever. The Company
is
working towards sustaining this momentum in the current year also.
The
domestic watch division is pursuing aggressive growth through the
ever
increasing strength of all its major brands. Constant exploration of
new consumer segments, introduction of innovative new products
which
would fuel consumer demand, and the rapid growth of our retail net
work
would certainly drive this growth.
The Jewellery division continues to set for itself a very ambitious
growth targets, through various key initiatives including launching
of
new collections, setting up new Tanishq and GoldPlus stores,
improving
the walk-ins, and improving the merchandising at the stores.

The International Business Division will be pursuing a balanced

growth
between watches and jewellery to ensure that the overall business
margins are protected. The division will also be exploring entry into
new markets besides growing in the existing markets. Plans are also
being developed to launch Tanishq Jewellery in the USA as a pilot
project,based on a research and brand positioning exercise, which is
currently underway.

The Precision Engineering Division of the Company will be targeting

a
significant top line growth and most importantly to achieve a break
even in terms of profitability.

The Company's new stream of consumer business viz. Prescription

Eyewear
which has been launched as a pilot project under the brand name
Titan
Eye + had opened its first Prescription Eyewear stores in Bangalore.
Based on the results of the Pilot project which will be across 5
stores, the Company will decide on a national rollout of this new
venture.

The Company's continued efforts in driving the business and

economic
performance through various initiatives will accelerate both growth
and
profitability in the current year.

Social Responsibility

Titan Industries has a clearly defined policy on Social Responsibility

and believes that `inclusive development' being the route to
sustainable growth.

The approach of its CSR policy continues to be at three levels, the

first one being at the Group level where it works closely with the
Tata
Council for Community Initiatives, the nodal apex body for
facilitating
Tata Group initiatives.

The emphasis this year at the Group level, apart from supporting
specific programmes has been towards adopting a common Tata
Protocol
for measuring the outcomes of Community initiatives.

At the Company level, key initiatives have been expanded e.g.:

 * The Meadow Women's Empowerment Programme has now five
units,
including Movement Assembly.

* The Titan School with a student strength of 580 children, is

nearing
the completion of the Phase two project, to accommodate the new
classes
VII to X.

* Support to the new Sankara Eye Hospital in Bangalore as a part of

the
Company's Vision Improvement programme.

* The Titan Scholarship programme continues with increased

support,
covering 52 students during the year. Cumulative coverage exceeds
550
students. A further 1580 students benefitted from the Career
Guidance
Programme.

* The Tanishq Karigar Park Social Entrepreneurship project now

covers
six parks.

* The Titan Township has completed Phase I & II and is awaiting

final
Government approval to expand to Phase III, covering 11 acres.

At the individual level, your Company has a 250 strong volunteering

force comprising the Community Development Forum, who mobilize
men and
resources to make some of these CSR initiatives happen. Their
activities also encompass Orphanage support, Aids Awareness
Camps and
Village adoption, where health and developmental activities are
carried
out.

The Company is proactive in its approach towards the Environment

and is
compliant with statutory and regulatory requirements. The Watch,
Jewellery as well as the Precision Engineering Divisions are certified
under ISO 14000:2004 Environment Management System Standards
and under
ISO 9001:2000, Quality Management Systems Standards.

Titan Industries is a signatory to the 10 principles of the Global

Compact with its 'Communications on Progress' (CoP) duly posted
on the
UN Global Compact website.

Awards and Recognition

Awards capture the external perception of the Company's brands

and
 performance and validate the robustness of the Company's
processes:

1. In its journey towards excellence, the Company's Watch Division

was
awarded the coveted JRD QV Award, having exceeded 600 marks in
the Tata
Business Excellence programme (TBEM). The Jewellery Division also
moved
its scoring band to a higher category.

2. Images Fashion Awards again voted both Titan & Tanishq as

India's
most admired brands in their categories, for the fifth consecutive
time.

3. Images Retail Forum acknowledged both Titan & Tanishq as the

'Fashion Retailer' of the year. Also Retail Asia Publishing, Singapore
awarded your Company as the No.2 Retailer of the country

4. The Platinum Award for India's most trusted brand from Reader's
Digest as well as the most preferred worth brand by `CNBC Awaaz'
went
to Titan.

5. The Sona Kaizen Champion's Trophy Award was awarded to Titan

6. The Watch Division won the Golden Peacock Award for

Environment
Management as well the Amity Corporate Excellence Award.

Government Policy

Substantial share of the watch market demand in India continues to

be
met by the unorganized segment and counterfeit watches. The high
indirect taxes imposed on the category i.e. Excise and VAT
encourages
the growth of the unorganized market at the cost of the organized
players.

The Company's representation for an upward revision in abatement

rates
for the purpose of levy of Excise duty has not been considered by
the
Government. However it is hoped that the plea of the watch
industry
will be considered favourably based on factual-data provided for the
last five years and having regard to the fact that there is
unquestionably an increase in the cost of sales/post manufacturing
expenses.

The RBI regulation for allowing re-import of Jewellery within 180

days
continues without any change despite our request for extension of
the
time period. In view of your Company's export plans in jewellery and
having regard to the unrealistic timeline for re-import, we have
reiterated our request for considering extension of the time-limit to
a
period of one year.

The Company's endeavours to export to Pakistan, our neighbour,

where
the business potential seems to be high, have not resuked in any
progress worthy of mention as watches continue to be in the
restricted
list of trade with Pakistan. This matter continues to be taken up for
review by our Business Associates in Pakistan.

The recent levy of Service tax on commercial lease rentals has

affected
adversely the economics of the retailing industry in general as also
speciality retailiers like your Company. The same is being
challenged
for constitutional/legal validity through Retailers Association of
India.

Corporate Governance

A separate report on Corporate Governance forms part of the

Annual
Report along with the Auditor's certificate on compliance.

Directors
 Dr.Jamshed J.Bhabha, a former Director of the Company, passed
away in
May 2007, at the age of 92. Dr. Bhabha was well known for his keen
interest in the arts, which formed expression in the setting up of the
National Centre for the performing Arts in Mumbai. He played a role
in
the formation of the Company and took keen interest in its progress
even after his formal tenure as a Director of the Company.

Mr. Ishaat Hussain, Mr. F. K. Kavarana and Mr. S. Susai retire by

rotation and are eligible for re-appointment.

Mr. Nihal Kaviratne, CBE, an Independent Director was appointed as

an
Additional Director of the Company with effect from 28th
September,
2006.

Ms. Vinita Bali, an Independent Director was appointed as an

Additional
Director of the Company with effect from 18th October, 2006.

Mr. Sunil Paliwal, IAS, Executive Director of Tamilnadu Industrial

Development Corporation, and nominee of TIDCO, was appointed as
an
Additional Director, with effect from 26th February, 2007.

Mr. A. C. Mukherji, an Independent Director resigned from the Board

of
the Company on 19th October, 2006 after serving as a Director for
more
than 20 years. The Directors wish to place on record their gratitude
and appreciation for the wise counsel and contribution by Mr. A C
Mukherji during his tenure as a Director and in his capacity as
Chairman of the Audit Committee of the Board.

Mr. T. S. Surendranath, nominee Director of Tamilnadu Industrial

Corporation Ltd. who was appointed on 26th June, 2006 resigned on
26th
February, 2007. The Directors wish to record their appreciation for
the
counsel and contribution by Mr. T. S. Surendranath during his
tenure
as a Director of the Company.

The five-year term of the Managing Director, Mr. Bhaskar Bhat

ended on
31st March, 2007 and the Board has, subject to the shareholders'
consent for re-appointment and the terms thereof, re-appointed him
as
Managing Director for a further term of 5 years from 1st April, 2007
to
31st March, 2012. Members' attention is drawn to Item No 10 of the
notice in this regard.

Directors' Responsibility Statement

 Pursuant to section 217(2AA) of the Companies Act, 1956, the
Directors'
based on the representations received from the operating
management
confirm that:

1. in the preparation of the annual accounts, the applicable

accounting standards have been followed and that there are no
material
departures;

2. they have in the selection of the accounting policies, consulted

the
statutory auditors and have applied them consistently and made
judgements 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;

3. they have taken proper and sufficient care, to the best of their
knowledge and ability, 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;

4. they have prepared the annual accounts on a going concern

basis.
Acknowledgements

The Directors wish to place on record their appreciation of the

support
which the Company has received from its promoters, bankers, the
business associates including distributors, suppliers and customers,
the press and, most importantly, our employees.

Particulars of Employees

Information required to be provided under Section 217(2A) of the

Companies Act, 1956, read with the Companies (Particulars of
Employees)
Rules, 1975, forms part of this report.

Annexure

Required information as per Section 217(1)(e) and 217(2A) of the

Companies Act,1956, are annexed.

Auditors

Members will be requested at the Annual General Meeting to

appoint
auditors for the current year and to pass resolutions per Item 11 of
the notice.
On behalf of the Board of Directors
Shaktikanta Das
Chairman

Bangalore, 1st June, 2007

Annexure to the Directors' Report

(Additional information given in terms of Notification 1029 of

31-12-1988 issued by the Department of Company Affairs)

CONSERVATION OF ENERGY

The Company has successfully implemented various energy

conservation
projects with state of art equipment and technology in the areas of
Air
Conditioning system, Compressed air system and Process cooling
system
at its watch manufacturing facility. This has resulted in energy
savings of Rs. 0.45 crore during 2006-07.

Green Power

The Company is planning to consume 50% of its energy

consumption at
watch manufacturing facility through the renewable energy
resources.
Around 65 Lakh units of energy will be sourced from the private
wind
farms and this project will be operational from June 2007. This will
lead to the energy cost reduction to an extent of Rs. 0.20 crore.

Technology absorption, adaptation and innovation

The company has established injection-moulding facility on a pilot

scale to build the capability for the manufacturing of specific micro
precision module components.

As a measure to comply with the latest technology and

manufacturing
cost reduction, your Company has adopted SMD (Surface Mount
Device)
type quartz crystal based Electronic Circuit Boards for the EDGE
movements. Your Company has also developed the technology for
in-house
manufacturing of Step Motors for its EDGE movements. The above
initiatives will lead to a substantial savings in manufacturing cost to
the tune of Rs. 1.75 crores.
The Company has designed the TINY watch movement and
established
capability for manufacturing the same, which will aid in introduction
of new range of watches. The year 2007-08 will witness the
Productionisation of these movements from its Hosur Manufacturing
facility. This will lead to an estimated cost reduction to the tune of
Rs.1.00 crore.
 Special Quartz movement is developed for Braille watch and first
batch
launch is planned during IInd quarter of 2007-08.

The Precision Engineering Division of the Company has set up Non

Destructive Testing facilities as per aerospace standards. These
facilities have been approved by overseas Aerospace sector
customers
and our Engineers have absorbed these standards and have
qualified for
carrying out these tests in-house.

The machine building segment of the Precision Engineering Division

has
developed turnkey end to end solutions for automatic assembling of
motors used in automotive applications.

Apart from assembling the motor, the line carries out all functional
tests on the motor including vibration measurement using non-
contact
type laser sensors. The division has also developed vision based
high
speed inspection equipments.

Foreign Exchange earnings and outgo

During the year under review, the Company earned Rs. 120.45
crores in
 foreign exchange and spent Rs. 449.85 crores (consisting of Rs.
7.04
crores on capital imports and Rs. 442.81 crores on the revenue
account).

On behalf of the Board of Directors,

Shaktikanta Das
Chairman
Bangalore, 1st June, 2007

Director’s Report:
The Directors are pleased to present the Twenty-third Annual Report
and
the Audited Statement of Accounts for the year ended 31st March,
2007:
The Company achieved a significant growth during the financial
year
2006-07 with sales income at Rs. 2136.46 crores growing by 44%
from the
previous year and Profit before taxes going up to Rs. 131.65 crores,
up by 52% from previous year.

Net profit for the year stood at Rs. 94.13 crores as compared to
Rs. 73.62 crores in the previous year.

The Watch segment grew by 20% to a sales income of Rs. 782.76

crores,
while Jewellery sales went up by 63% to Rs. 1290.89 crores. Sales of
other products, including Accessories and Precision Engineering
components, rose by 69% to Rs. 62.81 crores.

All brands of the Company have performed well and new

introductions in
both watches and jewellery, viz., the Aviator series in gents
watches,
Raga Collection for ladies and Zoya line in Tanishq jewellery have
had
very good responses, which augur well for the future.

The Company continued to expand its retail network and now has
perhaps
the largest reach in its category, with 211 World of Titan Show
rooms
and 88 Tanishq boutiques. Plain gold jewellery also made significant
inroads into smaller towns through 10 GoldPlus show rooms and the
Company's prescription eyewear began with the first Titan Eye +
store
at Bangalore, located at the same place where the first Titan watch
show room opened in 1987. As on date the Company has three Eye
+ stores
in Bangalore and one at Nagpur.

Exports/International Operations

The Company achieved an export turnover of Rs.116 crores during

the
year. Exports include sale of watches, Jewellery and precision
engineered components.
The International Business Division of the Company is spearheading
the
Company's globalization efforts for its watches and jewellery
businesses. The key challenge for this division is an ongoing
exercise
of identification of profitable business opportunities across the
globe, given the immense competition and clutter of brands in
overseas
markets. The international business division achieved a sales
growth of
32% in 2006-07 over the previous year, while the Watch sales grew
by
36%, Jewellery sales went up by 31% as compared to 2005-06.

While the Company had in the past provided for its accumulated
losses
in Europe, further provisioning to the extent of Rs.24 crores has
been
considered in respect of certain loans and advances to its overseas
subsidiaries/associates towards slow moving inventories held by
these
associates and operating losses for the year. This provisioning has
been shown as an exceptional item in the Company's accounts. The
Company has initiated various steps in restructuring its overseas
companies and this exercise is expected to be completed during the
current financial year.

Dividend
 The Company had issued cumulative preference shares of a total
value of
Rs. 40 crores at various rates of dividend from 6% to 8% which have
subsequently been redeemed out of the proceeds of the Rights
Issue in
May 2006. Final Dividend on these preference shares amounting to
Rs.
0.39 crore was paid till date of redemption.

The Directors are pleased to recommend payment of dividend on

equity
shares at an enhanced rate of 50% ( Rs.5.00 per equity share), if
approved by the shareholders at the Annual General Meeting.

Rights Issue

During May 2006, the Company allotted 2, H 3,038 Partly

Convertible
Debentures (PCD's) of Rs. 600 each (Equity share of Rs. 10 each at
a
premium of Rs. 34Q and Non-convertible Debentures of Rs. 250
each)
aggregating to Rs. 126.79 crores, in the ratio of one PCD for twenty
equity shares held on the Record Date, i.e., 6th March 2006.

The Issue was oversubscribed by about 1.2 times and the Directors
wish
to place on record their appreciation of the shareholders' continued
support to the company's growth plans of its various businesses.

The infusion of equity will help the Company to support its

ambitious
growth plan and profitability improvement strategy, besides
keeping the
debt financing at optimum levels.

Finance

During the year under review, the Company redeemed preference

shares
aggregating Rs.40 crores, out of the proceeds of the Rights Issue in
May 2006.

The Company raised a total of Rs. 378.30 crores from borrowings, of

which Rs. 259.12 crores were from Commercial banks and the
balance of
Rs. 119.18 crores from other sources. Borrowings of Rs. 400.02
crores
were repaid during the year.The Company incurred Rs. 37.98 crores
as
capital expenditure in respect of refurbishment and expansion
programmes, Capital investment in Precision Engineering Division
and in
IT Hardware systems.

During the year, the Company acquired the overseas trademark

rights to
the Titan brand and certain other brands for a consideration of Rs.
63.27 crores which is being amortised over a period of 120 months.

During the year 2006-07, interest rates started climbing due to

inflationary pressues and tight money market conditions. The
increase
in CRR and SLR announced by RBI had its impact, with the
commercial
banks raising their lending rates. Given the current inflation rate
and
the tight liquidity position of banks, it expected that this high
interest rate regime will continue for some more time.

As a result the average cost of borrowings for the year was 8.71%
as
against 8.21% in the previous year.

As on 31st March, 2007, the Company held fixed deposits of Rs.

8.29
crores from the public, shareholders and employees. There were no
overdue deposits other than unclaimed deposits amounting to Rs.
0.11
crore.

An amount of Rs. 4.85 crores has been transferred to the debenture

redemption reserve in accordance with statutory requirements and
the
terms of Rights Issue.
 During the year under review, the Company made payments
aggregating to
Rs. 308.97 crores by way of central, state and local taxes and duties
as against Rs. 221.45 crores in the previous year.

Subsidiaries

The Company has four subsidiaries, viz. two direct wholly-owned

subsidiaries, Titan Time Products Ltd., Goa (TTPL) and Titan
International Holdings BV, Amsterdam (TIHBV) and two other
subsidiaries, viz. Titan Brand Holdings NV, Curacao (TBHNV) and
Titan
Watch Company Ltd., Hongkong (TWC).

TTPL sold 7.10 million Electronic Circuit Boards in 2006-07 and

made a
net profit of Rs. 66.23 lakhs. TWC is only a name saver corporation
and
has no income or expenses. TBHNV made a loss of EUR 196,099 and
TIHBV
made a loss of EUR 14.44 million primarily on account of the
provisions
for its investments in, and loans to, the erstwhile European
marketing
arm, Titan International Marketing Ltd. Corresponding provisions
had
already been made earlier by your Company. TIHBV also wrote off
the
balance value of Design Rights capitalized in its books, and your
 Company has accordingly provided about Rs. 7 crores during the
year,
against its loans to TIHBV on this account.

As per Section 212(1) of the Companies Act, 1956, the Company is

required to attach to its Accounts the Directors' Report, Balance
Sheet
and Profit and Loss Account of each of these subsidiaries. As the
consolidated accounts present a complete picture of the financial
results of the Company and its subsidiaries, the Company had
applied to
the Central Government seeking exemption from attaching the
documents
referred to in Section 212 (1). Approval for the same has been
granted.
Accordingly, the Annual Report of the Company does not contain
the
individual financial statements of these subsidiaries, but contains
the
audited consolidated financial statements of the Company and its
subsidiaries. The Annual Accounts of these subsidiary companies,
along
with the related information, is available for inspection at the
Company's registered office and copies shall be provided on
request.
The statement pursuant to the approval under Section 212(8) of the
Companies Act, 1956, is annexed together with the Annual Accounts
of
the Company.
Associates

The Company has approved a scheme of amalgamation/merger of

three of
its domestic Associate Companies viz Samrat Holdings Ltd, Titan
Holdings Ltd and Questar Investments Ltd as transferor companies.
The
said companies shall stand merged with Titan Industries Ltd as
Transferee Company, subject to required approvals and consents
and
subject to conditions if any imposed by High Courts of relevant
jurisdiction. The appointed date of the scheme of
amalgamation/merger
is 1st April 2007. The swap ratio of the shares of the Transferee
company to be issued to the minority shareholders of the Transferor
companies shall be based on valuation of the transferor companies
as on
31st March, 2007.

Samrat Holdings Ltd. made a net profit of Rs. 728.88 lakhs in 2006-
07
and had paid two interim equity dividends of 200% each during the
year.
Questar Investments Ltd. and Titan Holdings Ltd. made a net profit
of
Rs. 140.23 lakhs and Rs. 28.63 lakhs respectively, but have not
declared any dividend on equity shares.
 Tanishq (India) Ltd. and Titan Mechatronics Ltd. also made a net
profit
of Rs. 1.58 lakhs and Rs. 0.38 lakh respectively. Titan Properties Ltd
made a small loss of Rs. 0.33 lakh. None of these companies have
declared a dividend.

Titan International (Middle East) FZE (TIME), Dubai, made a loss of

US
$ 0.23 million, whileTitan Watches & Jewellery International (Asia
Pacific) Pte. Ltd., (TAPL), Singapore made a loss of SGD 0.83 lakh.

Titan International Marketing Ltd. (TIML) London posted an

operating
loss of GBP 1.48 million for the year 2006. Consolidated Financial
Statements

The Consolidated Financial Statements of the Company prepared as

per
Accounting Standards AS 21 and AS 23, consolidating the
Company's
accounts with its subsidiaries and associates, has also been
included
as part of this Annual Report.

Outlook for 2007-08

The Company can look back with satisfaction at the last year's
(2006-07) performance as being one of the best ever. The Company
is
working towards sustaining this momentum in the current year also.
The
domestic watch division is pursuing aggressive growth through the
ever
increasing strength of all its major brands. Constant exploration of
new consumer segments, introduction of innovative new products
which
would fuel consumer demand, and the rapid growth of our retail net
work
would certainly drive this growth.

The Jewellery division continues to set for itself a very ambitious

growth targets, through various key initiatives including launching
of
new collections, setting up new Tanishq and GoldPlus stores,
improving
the walk-ins, and improving the merchandising at the stores.

The International Business Division will be pursuing a balanced

growth
between watches and jewellery to ensure that the overall business
margins are protected. The division will also be exploring entry into
new markets besides growing in the existing markets. Plans are also
being developed to launch Tanishq Jewellery in the USA as a pilot
project,based on a research and brand positioning exercise, which is
currently underway.

The Precision Engineering Division of the Company will be targeting

a
significant top line growth and most importantly to achieve a break
even in terms of profitability.

The Company's new stream of consumer business viz. Prescription

Eyewear
which has been launched as a pilot project under the brand name
Titan
Eye + had opened its first Prescription Eyewear stores in Bangalore.
Based on the results of the Pilot project which will be across 5
stores, the Company will decide on a national rollout of this new
venture.

The Company's continued efforts in driving the business and

economic
performance through various initiatives will accelerate both growth
and
profitability in the current year.

Social Responsibility

Titan Industries has a clearly defined policy on Social Responsibility

and believes that `inclusive development' being the route to
sustainable growth.

The approach of its CSR policy continues to be at three levels, the

first one being at the Group level where it works closely with the
Tata
Council for Community Initiatives, the nodal apex body for
facilitating
Tata Group initiatives.

The emphasis this year at the Group level, apart from supporting
specific programmes has been towards adopting a common Tata
Protocol
for measuring the outcomes of Community initiatives.

At the Company level, key initiatives have been expanded e.g.:

* The Meadow Women's Empowerment Programme has now five

units,
including Movement Assembly.

* The Titan School with a student strength of 580 children, is

nearing
the completion of the Phase two project, to accommodate the new
classes
VII to X.

* Support to the new Sankara Eye Hospital in Bangalore as a part of

the
Company's Vision Improvement programme.

* The Titan Scholarship programme continues with increased

support,
covering 52 students during the year. Cumulative coverage exceeds
550
students. A further 1580 students benefitted from the Career
Guidance
Programme.

* The Tanishq Karigar Park Social Entrepreneurship project now

covers
six parks.

* The Titan Township has completed Phase I & II and is awaiting

final
Government approval to expand to Phase III, covering 11 acres.

At the individual level, your Company has a 250 strong volunteering

force comprising the Community Development Forum, who mobilize
men and
resources to make some of these CSR initiatives happen. Their
activities also encompass Orphanage support, Aids Awareness
Camps and
Village adoption, where health and developmental activities are
carried
out.

The Company is proactive in its approach towards the Environment

and is
compliant with statutory and regulatory requirements. The Watch,
Jewellery as well as the Precision Engineering Divisions are certified
under ISO 14000:2004 Environment Management System Standards
and under
ISO 9001:2000, Quality Management Systems Standards.

Titan Industries is a signatory to the 10 principles of the Global

 Compact with its 'Communications on Progress' (CoP) duly posted
on the
UN Global Compact website.

Awards and Recognition

Awards capture the external perception of the Company's brands

and
performance and validate the robustness of the Company's
processes:

1. In its journey towards excellence, the Company's Watch Division

was
awarded the coveted JRD QV Award, having exceeded 600 marks in
the Tata
Business Excellence programme (TBEM). The Jewellery Division also
moved
its scoring band to a higher category.

2. Images Fashion Awards again voted both Titan & Tanishq as

India's
most admired brands in their categories, for the fifth consecutive
time.

3. Images Retail Forum acknowledged both Titan & Tanishq as the

'Fashion Retailer' of the year. Also Retail Asia Publishing, Singapore
awarded your Company as the No.2 Retailer of the country

4. The Platinum Award for India's most trusted brand from Reader's
Digest as well as the most preferred worth brand by `CNBC Awaaz'
went
to Titan.

5. The Sona Kaizen Champion's Trophy Award was awarded to Titan

6. The Watch Division won the Golden Peacock Award for

Environment
Management as well the Amity Corporate Excellence Award.

Government Policy

Substantial share of the watch market demand in India continues to

be
met by the unorganized segment and counterfeit watches. The high
indirect taxes imposed on the category i.e. Excise and VAT
encourages
the growth of the unorganized market at the cost of the organized
players.

The Company's representation for an upward revision in abatement

rates
for the purpose of levy of Excise duty has not been considered by
the
Government. However it is hoped that the plea of the watch
industry
will be considered favourably based on factual-data provided for the
last five years and having regard to the fact that there is
unquestionably an increase in the cost of sales/post manufacturing
expenses.

The RBI regulation for allowing re-import of Jewellery within 180

days
continues without any change despite our request for extension of
the
time period. In view of your Company's export plans in jewellery and
having regard to the unrealistic timeline for re-import, we have
reiterated our request for considering extension of the time-limit to
a
period of one year.

The Company's endeavours to export to Pakistan, our neighbour,

where
the business potential seems to be high, have not resuked in any
progress worthy of mention as watches continue to be in the
restricted
list of trade with Pakistan. This matter continues to be taken up for
review by our Business Associates in Pakistan.

The recent levy of Service tax on commercial lease rentals has

affected
adversely the economics of the retailing industry in general as also
speciality retailiers like your Company. The same is being
challenged
for constitutional/legal validity through Retailers Association of
India.

Corporate Governance
 A separate report on Corporate Governance forms part of the
Annual
Report along with the Auditor's certificate on compliance.

Directors

Dr.Jamshed J.Bhabha, a former Director of the Company, passed

away in
May 2007, at the age of 92. Dr. Bhabha was well known for his keen
interest in the arts, which formed expression in the setting up of the
National Centre for the performing Arts in Mumbai. He played a role
in
the formation of the Company and took keen interest in its progress
even after his formal tenure as a Director of the Company.

Mr. Ishaat Hussain, Mr. F. K. Kavarana and Mr. S. Susai retire by

rotation and are eligible for re-appointment.

Mr. Nihal Kaviratne, CBE, an Independent Director was appointed as

an
Additional Director of the Company with effect from 28th
September,
2006.

Ms. Vinita Bali, an Independent Director was appointed as an

Additional
Director of the Company with effect from 18th October, 2006.
Mr. Sunil Paliwal, IAS, Executive Director of Tamilnadu Industrial
Development Corporation, and nominee of TIDCO, was appointed as
an
Additional Director, with effect from 26th February, 2007.

Mr. A. C. Mukherji, an Independent Director resigned from the Board

of
the Company on 19th October, 2006 after serving as a Director for
more
than 20 years. The Directors wish to place on record their gratitude
and appreciation for the wise counsel and contribution by Mr. A C
Mukherji during his tenure as a Director and in his capacity as
Chairman of the Audit Committee of the Board.

Mr. T. S. Surendranath, nominee Director of Tamilnadu Industrial

Corporation Ltd. who was appointed on 26th June, 2006 resigned on
26th
February, 2007. The Directors wish to record their appreciation for
the
counsel and contribution by Mr. T. S. Surendranath during his
tenure
as a Director of the Company.

The five-year term of the Managing Director, Mr. Bhaskar Bhat

ended on
31st March, 2007 and the Board has, subject to the shareholders'
consent for re-appointment and the terms thereof, re-appointed him
as
Managing Director for a further term of 5 years from 1st April, 2007
to
31st March, 2012. Members' attention is drawn to Item No 10 of the
notice in this regard.

Directors' Responsibility Statement

Pursuant to section 217(2AA) of the Companies Act, 1956, the

Directors'
based on the representations received from the operating
management
confirm that:

1. in the preparation of the annual accounts, the applicable

accounting standards have been followed and that there are no
material
departures;

2. they have in the selection of the accounting policies, consulted

the
statutory auditors and have applied them consistently and made
judgements 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;

3. they have taken proper and sufficient care, to the best of their
knowledge and ability, 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;

4. they have prepared the annual accounts on a going concern

basis.

Acknowledgements

The Directors wish to place on record their appreciation of the

support
which the Company has received from its promoters, bankers, the
business associates including distributors, suppliers and customers,
the press and, most importantly, our employees.

Particulars of Employees

Information required to be provided under Section 217(2A) of the

Companies Act, 1956, read with the Companies (Particulars of
Employees)
Rules, 1975, forms part of this report.

Annexure
Required information as per Section 217(1)(e) and 217(2A) of the
Companies Act,1956, are annexed.

Auditors

Members will be requested at the Annual General Meeting to

appoint
auditors for the current year and to pass resolutions per Item 11 of
the notice.

On behalf of the Board of Directors

Shaktikanta Das
Chairman

Bangalore, 1st June, 2007

Annexure to the Directors' Report

(Additional information given in terms of Notification 1029 of

31-12-1988 issued by the Department of Company Affairs)

CONSERVATION OF ENERGY

The Company has successfully implemented various energy

conservation
projects with state of art equipment and technology in the areas of
Air
Conditioning system, Compressed air system and Process cooling
system
at its watch manufacturing facility. This has resulted in energy
savings of Rs. 0.45 crore during 2006-07.

Green Power

The Company is planning to consume 50% of its energy

consumption at
watch manufacturing facility through the renewable energy
resources.
Around 65 Lakh units of energy will be sourced from the private
wind
farms and this project will be operational from June 2007. This will
lead to the energy cost reduction to an extent of Rs. 0.20 crore.

Technology absorption, adaptation and innovation

The company has established injection-moulding facility on a pilot

scale to build the capability for the manufacturing of specific micro
precision module components.

As a measure to comply with the latest technology and

manufacturing
cost reduction, your Company has adopted SMD (Surface Mount
Device)
type quartz crystal based Electronic Circuit Boards for the EDGE
movements. Your Company has also developed the technology for
in-house
manufacturing of Step Motors for its EDGE movements. The above
initiatives will lead to a substantial savings in manufacturing cost to
the tune of Rs. 1.75 crores.

The Company has designed the TINY watch movement and

established
capability for manufacturing the same, which will aid in introduction
of new range of watches. The year 2007-08 will witness the
Productionisation of these movements from its Hosur Manufacturing
facility. This will lead to an estimated cost reduction to the tune of
Rs.1.00 crore.

Special Quartz movement is developed for Braille watch and first

batch
launch is planned during IInd quarter of 2007-08.

The Precision Engineering Division of the Company has set up Non

Destructive Testing facilities as per aerospace standards. These
facilities have been approved by overseas Aerospace sector
customers
and our Engineers have absorbed these standards and have
qualified for
carrying out these tests in-house.

The machine building segment of the Precision Engineering Division

has
developed turnkey end to end solutions for automatic assembling of
motors used in automotive applications.
Apart from assembling the motor, the line carries out all functional
tests on the motor including vibration measurement using non-
contact
type laser sensors. The division has also developed vision based
high
speed inspection equipments.

Foreign Exchange earnings and outgo

During the year under review, the Company earned Rs. 120.45
crores in
foreign exchange and spent Rs. 449.85 crores (consisting of Rs.
7.04
crores on capital imports and Rs. 442.81 crores on the revenue
account).

On behalf of the Board of Directors

Shaktikanta Das
Chairman

Bangalore, 1st June, 2007

Notes to Account:
Notes to Accounts Year End : Mar '08

1. Estimated amount of contracts remaining to be executed on

capital
 account and not provided for is Rs. 1745.76 lakhs (2007: Rs.
1901.70
lakhs).

2. (a) Provision for warranty - Rs. 230.31 lakhs (2007: Rs. 149.27
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. Additional provision made and
utilised/reversed during the year is Rs. 191.24 lakhs (2007: Rs.
121.71
lakhs) and Rs. 110.20 lakhs (2007: Rs. 115.34 lakhs) respectively.

(b) Contingent liabilities not provided for - Rs. 4094.83 lakhs (2007:
Rs. 5699.27 lakhs) comprising of the following:

Sales Tax-Rs. 1176.90 lakhs (2007: Rs. 812.31 lakhs)

(relating to the applicability of rate of tax, computation of tax

liability, submission of certain statutory forms)

Customs Duty - Rs. 316.94 lakhs (2007: Rs. 1420.11 lakhs)

(relating to compliance with the terms of notification, end use of

materials cleared at the lower rate of duty)

Excise duty - Rs. 2426.58 lakhs (2007: Rs. 2414.91 lakhs)

(relating to denial of exemption by amending the earlier notification,

computation of the assessable value)

Income Tax - Rs. 113.66 lakhs (2007: Rs. 986.19 lakhs)

(relating to disallowance of deductions claimed)

Others - Rs. 60.75 lakhs (2007: Rs. 65.75 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.

3. In terms of the Letter of Offer, out of the Rights Issue proceeds

of Rs. 12678.23 lakhs, Rs. 4362.22 lakhs (2007:8316.01 lakhs) have
been
spent towards the objects of the issue during the year, setting up of
 new showrooms and upgradations and expansions of existing
showrooms Rs.
1803.12 lakhs (2007 : Rs. 1711.14 lakhs), replacement, refurbishing
and
expansion of the watch manufacturing facilities Rs. 1041.13 lakhs
(2007
: Rs. 1381.03 lakhs), expansion of jewellery making facilities Rs.
492.34 lakhs (2007: Rs. 466.83 lakhs), expansion of precision
engineering manufacturing facilities Rs.1025.63 lakhs (2007: Rs.
539.46
lakhs) and redemption of preference shares and general corporate
purposes Rs.Nil (2007: Rs. 4217.55 lakhs).

4. The 6.75% debentures are redeemable at par at the end of five

years
from the dates of allotment on 12th May 2006 and 9th June 2006
and are
secured by way of legal mortgage on the immovable properties and
plant
and machinery situated at Hosur.

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

a) Loan of Rs.500.00 lakhs (2007: Rs. 3460.55 lakhs) secured by a

first
charge by way of hypothecation of movable assets (save and except
current assets and assets taken on lease) and by way of an
equitable
 mortgage of immovable properties of the Company, both present
and
future.

b) Loan of Rs. 5000.00 lakhs (2007: Rs. Nil) secured by a first

charge
by way of hypothecation of movable assets (save and except
current
assets) and to be secured by way of an equitable mortgage of
immovable
properties of the Company, both present and future.

6. Non-fund based facilities availed of Rs. 24419 lakhs (2007: Rs.

20837 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.

7. The security covered under notes 5 and 6 above rank pari passu.
The
security covered under note 7 rank pari passu with the security for
the
cash credit facility.

8. Exchange gain (net), included in the profit and loss account is

Rs. 2557.77 lakhs (2007: gain Rs. 835.26 lakhs).

9. Auditors remuneration comprises of fees for audit of statutory

 accounts Rs.65.00 lakhs (2007: Rs.40.00 lakhs), taxation matters
Rs.
15.25 lakhs (2007: Rs. 18.50 lakhs), audit of consolidated accounts
Rs.
7.00 lakhs (2007: Rs. 7.00 lakhs), services provided in relation to
rights issue Rs. Nil (2007: Rs. 9.25 lakhs), other services Rs. 27.75
lakhs (2007: Rs. 12.40 lakhs) and reimbursement of levies and
expenses
Rs. 6.29 lakhs (2007: Rs. 2.50 lakhs).

10. Excise duty of Rs. 4734.87 lakhs (2007: Rs. 4621.66 lakhs)
reduced
from gross sales in the profit and loss account represents excise
duty
on sale of products.

11. Rates and taxes include the following:

i) Rs. 173.22 lakhs (2007: Rs. 313.53 lakhs) being the difference in
excise duty included in opening stock and closing stock of finished
goods.

ii) Rs. 3647.94 lakhs (2007: Rs. 3514.21 lakhs) being the excise
duty
paid on watch components transferred from Hosur factory to
Dehradun,
Baddi and Rourkee factories.

12. (a) Interest expense disclosed in the profit and loss account is
net of Rs.370.82 lakhs
(2007: Rs. 453.05 lakhs) being interest income on loans and
advances.
(b) Interest on fixed loans amounts to Rs. 1346.11 lakhs (2007: Rs.
1562.93 lakhs).

13. Exceptional items represent provision for doubtful loans and

advances relating to European operations.

14. The Directors remuneration of Rs. 201.14 lakhs (2007: Rs.

156.55
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. 7.29 lakhs (2007: Rs. 6.16 lakhs), perquisites
Rs.
36.85 lakhs (2007: Rs. 31.69 lakhs), commission of Rs. 80.00 lakhs
(2007: Rs. 60.00 lakhs) and commission to non whole-time directors
of
Rs.50.00 lakhs (2007: Rs. 35.90 lakhs).

15. The provisions of Industries (Development and Regulation) Act,

1951, relating to licensed capacity are not applicable to the
Company.
The installed capacity is 12 million watches (2007:12 million
watches),
0.45 million jewellery pieces (2007:0.29 million jewellery pieces)
and
0.30 million clocks (2007:0.30 million clocks). The installed
capacities are as certified by the management and relied upon by
the
auditors without verification, being a technical matter.

16. The Company produced 93,79,573 watches (2007 : 90,59,059

watches)
sold 94,22,228 watches - Rs. 76694.00 Lakhs (2007:86,47,138
watches -
Rs. 68847.65 lakhs) and had a Closing Stock of 10,40,138 watches -
Rs.
6959.22 lakhs (2007:10,82,793 watches - Rs. 8142.39 lakhs;
2006:6,70,872 watches - Rs. 3582.37 lakhs).

17. The Company produced 1,22,728 clocks (2007:1,49,012) sold

1,24,728
clocks - Rs. 1313.31 lakhs (2007:1,48,583 clocks - Rs. 666.05 lakhs)
and had a closing stock of 30,687 clocks - Rs. Nil (2007:32,687
clocks
- Rs. 11.54 lakhs; 2006:32,258 clocks - Rs. 65.05 lakhs).

18. The Jewellery Division of the Company produced 12,17,174

jewellery
pieces (2007:7,44,826 jewellery pieces), purchased 82,405 jewellery
pieces - Rs. 18137.14 lakhs (2007 : 58,800 jewellery pieces - Rs.
10415.39 lakhs), sold 11,38,910 jewellery pieces - Rs. 171204.16
lakhs
(2007:7,20,241 jewellery pieces - Rs. 103176.03 lakhs) and had a
closing stock of 4,07,778 jewellery pieces - Rs. 62966.35 lakhs
 (2007:2,47,109 jewellery pieces - Rs. 34110.83 lakhs,
2006:1,63,724
jewellery pieces - Rs. 17656.87 lakhs).

19. The Jewellery Division of the Company produced 10,22,244

coins
(2007 :19,37,452 coins), sold 10,16,674 coins - Rs. 31311.27 lakhs
(2007:19,24,852 coins - Rs. 25853.85 lakhs) and had a closing stock
of
46,604 coins - Rs. 2090.10 lakhs (2007:41,034 coins - Rs. 1994.94
lakhs, 2006:28,434 coins - Rs. 1000.49 lakhs).

20. The Company produced 37 machines (2007 : 34 machines),

capitalised
2 machines (2007 : 7 machines), sold 36 machines - Rs. 2025.6)1
lakhs
(2007:26 machines - Rs. 1316.26 lakhs), and had a closing stock of
Nil
machine - Rs. Nil lakhs (2007:1 machine - Rs. 114.87 lakhs, 2006:
Nil -
Rs. Nil).

21. The Company purchased 10,93,343 watches - Rs. 5630.59 lakhs

(2007
: 3,93,162 watches - Rs. 1914.46 lakhs), sold 8,64,223 watches - Rs.
10270.14 lakhs (2007 : 3,17,216 watches - Rs. 4566.07 lakhs) and
had a
closing stock of 3,44,048 watches - Rs. 2553.05 lakhs
(2007:1,14,928
 watches - Rs. 853.34 lakhs; 2006:38,982 watches - Rs. 343.69
lakhs).

22. The Company purchased Nil clocks (2007 : Nil), sold 418 clocks
-
Rs. 0.01 lakhs (2007 :109 clocks - Rs. 0.33 lakhs) and had a closing
stock of 3,590 clocks - Rs. Nil (2007:4,008 clocks - Rs. Nil;
2006:4,117 clocks - Rs. 15.29 lakhs).

23. The Company purchased 5,65,459 eyewear products - Rs.

1436.51
lakhs (2007:4,65,683 eyewear products - Rs. 1253.35 lakhs), sold
5,72,138 eyewear products - Rs. 4052.66 lakhs (2007 : 3,80,145
eyewear
products - Rs. 2527.04 lakhs) and had a closing stock of 1,68,362
eyewear products - Rs. 619.70 lakhs (2007:1,75,041 eyewear
products -
Rs. 675.91 lakhs; 2006; 89,503 eyewear products-Rs. 185.41 lakhs).

Eyewear products include sunglasses, frames, ready readers and

lenses.

24. Sales includes sale of scrap Rs. 593.31 lakhs (2007 : Rs. 599.37
lakhs), sale of accessories Rs. 5824.44 lakhs (2007 : Rs. 5259.18
lakhs), sale of tools and components Rs. 63.01 lakhs (2007: Rs.
117.56
lakhs), sale of precious stones Rs. 1457.09 lakhs (2007 : Rs.
1283.89
lakhs), income from services provided Rs. 181.09 lakhs (2007 : Rs.
 138.97 lakhs) and is net of turnover based commission of Rs.
5195.49
lakhs (2007 : Rs. 4105.79 lakhs) and all discounts, including cash
discount of Rs. 515.18 lakhs (2007 :Rs. 417.46 lakhs).

25. (a) Sundry creditors include (i) Rs. 33.91 lakhs (2007: Rs 82.19
lakhs) towards liability for lease of vehicles which falls due later
than one year; and (ii) Rs. Nil (2007: Rs. 42.74 lakhs) of
acceptances.

(b) Current liabilities do not include any amount to be credited to

Investor Education and Protection Fund except where there are
legal
cases amounting to Rs.0.10 lakhs (2007: Rs. 0.32 lakhs) and
therefore,
amounts related to the same could not be transferred.

26. Employee Benefits

(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 recognized 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.

27. a) The sell / buy forward contracts (net) outstanding as at 31

March, 2008 in respect of hedging of price of gold, for the jewellery
business, is 1760 kgs, Rs. 20143.48 lakhs (2007:950 kgs, Rs.
8546.05
lakhs). b) There are no outstanding forward exchange contracts
entered
into by the company as on 31 March, 2008.