MIRA
INFORM REPORT
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Report Date : |
09.09.2008 |
IDENTIFICATION
DETAILS
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Name : |
TIMEX GROUP INDIA LIMITED |
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Registered Office : |
117, Ground Floor, World Trade Centre, Babar Road, New Delhi – 110 001 |
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Country : |
India |
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Financials (as on) : |
31.03.2008 |
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Date of Incorporation : |
04.10.1988 |
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Com. Reg. No.: |
033434 |
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CIN No.: [Company
Identification No.] |
L33301DL1988PLC033434 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
DELT04785E |
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PAN No.: [Permanent
Account No.] |
AAACT0773C |
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Legal Form : |
A Public Limited Liability
Company. The Company’s Shares are Listed on the Stock Exchanges. |
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Line of Business : |
Engaged in the manufacture and trading of watches, and also
manufacturer tools, moulds and plastic components. |
RATING & COMMENTS
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MIRA’s Rating : |
B |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average. |
Small |
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Maximum Credit Limit : |
USD 2570500 |
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Status : |
Moderate |
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Payment Behaviour : |
Usually correct |
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Litigation : |
Clear |
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Comments : |
Subject is a subsidiary of Timex Watches B.V., The Nederland. Profit margin is low. Financial position is moderate. Payments are usually correct and as per commitments. The company can be considered for small to mediocre business dealings
at usual trade terms and conditions. |
LOCATIONS
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Registered Office : |
117, Ground Floor, World Trade Centre, Babar Road, New Delhi – 110
001, India. |
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E-Mail : |
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Website : |
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Factory : |
Logix Techno Park, Tower – B, 5th Floor, Plot No. 5, Sector
– 127, Taj Expressway, Noida – 201 301, Uttar Pradesh, India. |
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Tel. No.: |
91-120-3041300 |
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Fax No.: |
91-120-3041440 |
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Division : |
Precision Engineering Division, C-35, Sector – 59, Noida – 201 307,
Uttar Pradesh, India. |
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Tel. No.: |
91-120-2584067/ 68/ 69/ 70 |
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Fax No.: |
91-120-2581905 |
DIRECTORS
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Name : |
Mr. Frank Sherer |
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Designation : |
Chairman |
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Name : |
Mr. Kapil Kapoor |
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Designation : |
Managing Director |
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Name : |
Mr. Daya Dhaon |
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Designation : |
Director |
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Name : |
Mr. Chittaranjan Dua |
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Designation : |
Director |
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Name : |
Mr. Raghu Pillai |
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Designation : |
Director |
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Name : |
Mr. Mauro Antonio Calcano |
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Designation : |
Director |
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Name : |
Mr. Gagan Singh |
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Designation : |
Director |
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Name : |
Mr. R D Werner |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr. V D Wadhwa |
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Designation : |
Company Secretary |
BUSINESS DETAILS
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Line of Business : |
Engaged in the manufacture and trading of watches, and also
manufacturer tools, moulds and plastic components. |
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GENERAL
INFORMATION
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No. of Employees : |
About 500 |
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Bankers : |
NA |
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Banking
Relations : |
--- |
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Holding Company : |
Timex Watches B.V. |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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170000000 |
Equity Shares |
Rs.10/- Each |
Rs.1700.000 Millions |
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Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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51195000 |
Equity Shares |
Rs.10/- |
Rs.511.950
Millions |
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FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
|
31.03.2008 |
31.03.2007 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
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512.000 |
512.000 |
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2] Share Application Money |
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0.000 |
0.000 |
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3] Reserves & Surplus |
|
2.100 |
(52.400) |
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4] (Accumulated Losses) |
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0.000 |
0.000 |
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NETWORTH |
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514.100 |
459.600 |
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LOAN FUNDS |
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1] Secured Loans |
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0.000 |
0.000 |
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2] Unsecured Loans |
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4.400 |
90.600 |
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TOTAL BORROWING |
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4.400 |
90.600 |
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DEFERRED TAX LIABILITIES |
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0.000 |
0.000 |
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TOTAL |
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518.500 |
550.200 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
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198.500 |
136.200 |
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Capital work-in-progress |
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0.000 |
48.900 |
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INVESTMENT |
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0.000 |
0.000 |
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DEFERREX TAX ASSETS |
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0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
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199.900 |
205.100 |
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Sundry Debtors |
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495.800 |
460.800 |
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Cash & Bank Balances |
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92.200 |
55.900 |
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Other Current Assets |
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0.000 |
0.000 |
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Loans & Advances |
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99.300 |
87.700 |
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Total
Current Assets |
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887.200 |
809.500 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
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503.300 |
404.600 |
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Provisions |
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63.900 |
39.800 |
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Total
Current Liabilities |
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567.200 |
444.400 |
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Net Current Assets |
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320.000 |
365.100 |
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MISCELLANEOUS EXPENSES |
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0.000 |
0.000 |
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TOTAL |
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518.500 |
550.200 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
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31.03.2008 |
31.03.2007 |
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Sales Turnover |
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1332.900 |
1152.200 |
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Other Income |
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14.300 |
22.900 |
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Total Income |
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1347.200 |
1175.100 |
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Profit/(Loss) Before Tax |
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69.300 |
32.100 |
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Provision for Taxation |
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14.800 |
6.900 |
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Profit/(Loss) After Tax |
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54.500 |
25.200 |
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Expenditures : |
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Manufacturing Expenses |
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28.200 |
20.600 |
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Administrative Expenses |
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338.100 |
277.600 |
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Raw Material Consumed |
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653.400 |
617.400 |
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Increase/(Decrease) in Finished Goods |
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7.500 |
(10.900) |
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Interest |
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8.800 |
12.200 |
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Power & Fuel |
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15.100 |
12.200 |
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Depreciation & Amortization |
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25.900 |
23.100 |
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Other Expenditure |
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200.900 |
190.800 |
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Total Expenditure |
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1277.900 |
1143.000 |
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QUARTERLY /
SUMMARISED RESULTS
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PARTICULARS |
|
30.06.2008 |
31.03.2008 |
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Sales Turnover |
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328.800 |
296.500 |
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Other Income |
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8.600 |
0.000 |
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Total Income |
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337.400 |
296.500 |
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Total Expenditure |
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292.800 |
281.200 |
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Operating Profit |
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44.600 |
15.300 |
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Interest |
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0.500 |
1.000 |
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Gross Profit |
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44.100 |
14.300 |
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Depreciation |
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6.200 |
6.400 |
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Tax |
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5.700 |
1.800 |
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Reported PAT |
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32.200 |
3.200 |
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KEY RATIOS
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Year |
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31.03.2008 |
31.03.2007 |
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Debt-Equity Ratio |
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0.10 |
0.45 |
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Long Term Debt-Equity Ratio |
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0.00 |
0.01 |
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Current Ratio |
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1.53 |
1.47 |
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TURNOVER RATIOS |
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Fixed Assets |
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2.20 |
1.78 |
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Inventory |
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6.58 |
5.71 |
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Debtors |
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2.79 |
2.72 |
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Interest Cover Ratio |
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8.88 |
3.63 |
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Operating Profit Margin(%) |
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7.80 |
5.85 |
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Profit Before Interest And Tax Margin(%) |
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5.86 |
3.84 |
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Cash Profit Margin(%) |
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6.03 |
4.19 |
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Adjusted Net Profit Margin(%) |
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4.09 |
2.19 |
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Return On Capital Employed(%) |
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13.13 |
5.93 |
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Return On Net Worth(%) |
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40.04 |
18.52 |
LOCAL AGENCY
FURTHER INFORMATION
Other Information:
Business:
Subject in the manufacture
and trading of watches in India. It offers watches for men and women under
fashion, sports, outdoor, empera, formals, and youth lines. The company also
manufactures tools, moulds, and plastic components for other parties. In
addition, it offers after sales service to its customers. As of July 29, 2008,
Subject has 60 Time Factory stores. The company was incorporated in 1988 as
Timex Jayna Limited and changed its name to Timex Watches Limited in 1991.
Further, it changed its name to subject in 2007. The company is based in New
Delhi, India. Subject is a subsidiary of Timex Watches B.V.
Director’s Report
OPERATIONS:
The Company achieved significant growth during the financial
year 2007-08 with sales income at Rs 1320.000 Millions growing by 16% over the
previous year and Profit Before Tax at Ps. 69.300 Millions up by 117 over the
previous year. Net Profit for the year is at Rs 54.500 Millions the watch
business registered a growth of 16% and Precision Engineering Division
registered a growth of 31%.
The Company continues to pursue its retail strategy of opening state of the art
'The Time Factory Stores' across the country. The total number of The Time
Factory Stores (TTF) has gone up to 61 across the country and shall further
increase to 100 in the next twelve months.
The Company is contemplating and developing the strategic plan to bring in more
of fashion watch brands in the Country, which are currently available in the
portfolio of its parent organization. 'Nautica' was launched successfully
during 2007, besides; Ferragamo and Valentino are the other two brands, which
are planned to be launched during the current fiscal year. With the
introduction of these brands the Company would cater to all the price points at
consumer level.
The new facility in the state of Himachal Pradesh is working on full stream.
'Indigenization Strategy' is being persued to produce all fast moving styles in
house which are currently being imported from parent organization. This will
enable the company to offer these products to the consumers at lower prices and
further improve its margins.
The Company is also working towards venturing in the Jewelry
Business and work is underway to finalize the entry strategy in this regard. In
order to give thrust to different business segments, the Company has divided
its business in to three divisions namely Timex and Fashion Watch Division',
Luxury Watch Division' and Jewelry Division', which will be looked after by
Independent business heads for each division.
The Directors are confident that the initiatives taken by the Company in
creating separate business divisions together with thrust on developing the
retail channel and indigenization of international styles are likely to further
improve its business and operating margins in the coming years.
CHANGE IN NAME OF THE COMPANY:
With effect from 13th October 2007 the name of the Company
has been changed to ‘TIMEX GROUP INDIA LIMITED' in line with global strategy of
its parent organisation. The new name would enable the Company to realign with
the worldwide organization, reflect the global image of the Company and
facilitate the implementation of global portfolio strategy of multiple watch
brands under one umbrella.
INDUSTRY
STUCTURE AND DEVELOPMENT:
The size of the Indian Watch Market is currently estimated at 40
million watches, representing a growth of approx 12% over the previous year.
The growth of premium sector is estimated to be 20% reflected in the overall
growth of the Industry. The industry growth is expected to be in double digit
in the near future, which augurs well for the business of the Company.
The growth is predominantly driven by increase in the overall retail activity
and higher marketing spends by all the major players, including the Company.
The Company believe that the overall category spend for the watch industry will
continue to increase significantly in the coming years due to entry of many
more brands and retail expansion which shall be beneficial for growth of the
Industry, particularly the premium end of the market.
The industry growth continues to be hampered by the presence of the large
un-organized sector, which accounts for nearly 60% of the total market, with no
accountability to either the government or the consumer.
FINANCE:
The Company has been able to manage its cash flow through
improved trade collections and also used a part of the preference capital issue
proceeds to retire a. substantial part of its term loan liability, which has
resulted in significant reduction in the interest costs despite increasing rate
of interest. They do not anticipate further increase in the interest rates from
its existing level and shall mitigate such risks through corresponding
reduction in the term loans.
The Company does not hold any fixed deposits from the public, shareholders and
employees. There were no overdue / unclaimed deposits as on 31 March
2008.
During the year under review, the Company made payment aggregating to
Rs.280.900 Millions by way of Central, State and local sales taxes and duties
as against Rs. 297.200 Millions in the previous year.
CMT REPORT (Corruption, Money Laundering
& Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
1] INFORMATION ON
DESIGNATED PARTY
No exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or anti-terrorism
sanction laws or whose assets were seized, blocked, frozen or ordered forfeited
for violation of money laundering or international anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE
GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other financial
stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE
RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.44.26 |
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UK Pound |
1 |
Rs.79.00 |
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Euro |
1 |
Rs.63.53 |
SCORE & RATING
EXPLANATIONS
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SCORE FACTORS |
RANGE |
POINTS |
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HISTORY |
1~10 |
5 |
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PAID-UP CAPITAL |
1~10 |
5 |
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OPERATING SCALE |
1~10 |
4 |
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FINANCIAL CONDITION |
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--BUSINESS SCALE |
1~10 |
4 |
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--PROFITABILIRY |
1~10 |
2 |
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--LIQUIDITY |
1~10 |
4 |
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--LEVERAGE |
1~10 |
4 |
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--RESERVES |
1~10 |
4 |
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--CREDIT LINES |
1~10 |
5 |
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--MARGINS |
-5~5 |
-- |
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DEMERIT POINTS |
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--BANK CHARGES |
YES/NO |
YES |
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--LITIGATION |
YES/NO |
NO |
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--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
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MERIT POINTS |
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--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
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--EXPORT ACTIVITIES |
YES/NO |
YES |
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--AFFILIATION |
YES/NO |
YES |
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--LISTED |
YES/NO |
YES |
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--OTHER MERIT FACTORS |
YES/NO |
YES |
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TOTAL |
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37 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING
EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
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