MIRA INFORM REPORT

Report Date :

08.08.2012

IDENTIFICATION DETAILS

Name :	TITAN INDUSTRIES LIMITED
Registered Office :	3, SIPCOT Industrial Complex, Hosur – 635126, Tamil Nadu
Country :	India
Financials (as on) :	31.03.2012
Date of Incorporation :	26.07.1984
Com. Reg. No.:	18-001456
Capital Investment / Paid-up Capital :	Rs.887.786 Millions
CIN No.: [Company Identification No.]	L74999TZ1984PLC001456
TAN No.: [Tax Deduction & Collection Account No.]	CHET08980G
PAN No.: [Permanent Account No.]	AAACT5131A
Legal Form :	Public Limited Liability Company Company’s Shares Are Listed On The Stock Exchange
Line of Business :	Manufacturers and Sellers of Watches, Jewellery Pieces, Table Clocks, etc.
No. of Employees :	4353 (out of which 2630 were in the factories, 800 in retail, about 578 in sales and marketing while the rest 345 were in support functions.) (Approximately)

RATING & COMMENTS

MIRA’s Rating :

A (69)

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 58000000
Status :	Very Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and reputed company having fine track. Financial position of the company appears to be good. Fundamentals are strong and healthy. Payments are reported to be regular and as per commitments. The company can be considered good for business dealings at usual trade terms and conditions.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – June 30, 2012

Country Name	Previous Rating (31.03.2012)	Current Rating (30.06.2012)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

EXTERNAL AGENCY RATING

Rating Agency Name	CRISIL
Rating	LONG TERM : CRISIL AA+
Rating Explanation	Having high degree of safety regarding timely servicing of financial obligation. it carry very low credit risk
Date	April, 2011

Rating Agency Name	CRISIL
Rating	SHORT TERM : CRISIL A1+
Rating Explanation	Considered to have very strong degree of safety regarding timely payment of financial obligation. it carry lowest credit risk.
Date	April, 2011

RBI DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2012.

LOCATIONS

Registered Office :	3, SIPCOT Industrial Complex, Hosur – 635 126, Tamilnadu, India
Tel. No.:	91-4344-664199
Fax No.:	91-4344-276037
E-Mail :	corpcomm@titan.co.in arrajaram@titan.co.in
Website :	http://www.titan.co.in
Corporate Office :	Golden Enclave, Tower A, HAL Airport Road, Bangalore – 560 017, Karnataka, India
Tel. No.:	91-80-66609000/ 66609027
Fax No.:	91-80-25269923/ 25263001
E-Mail :	webmaster@titan.co.in
Watch Plant 1 :	Plot Nos.3, 4 and 5, SIPCOT Industrial Complex, Hosur – 635 126, Tamilnadu, India
Watch Plant 2 :	Mohabewala Industrial Area, Dehradun - 248002, Uttaranchal, India (i) Unit 1 - Khasra No. 148D, 173B, 176A and 176B (ii) Unit 2 - Khasra No. 148B, 149B
Watch Plant 3 :	Plot No.59, EPIP, Jharmajary Phase I, Solen District, Baddi-173205 Himachal Pradesh, India
Watch Plant 4 :	Plot No. C1, C2, C3, Khasra No. 37, Village Bantakheri, Tehsil - Roorkee, District - Haridwar, Uttaranchal, India
Watch Plant 5 :	Plot No. 10B, Khasra Nos. 150, 151, 152, 153 Sector 2, Integrated Industrial Estate, SIDCUL, Pant Nagar 263 153, Udham Singh Nagar District, Uttarkhand, India
Precision Engineering Plants 1 :	No.15 B, Bommasandra Industrial Area, Hosur Road, Anekal Taluk, Bangalore - 562158, Karnataka, India
Precision Engineering Plants 2 :	Plot Nos. 27 and 28, SIPCOT Industrial Area, Hosur - 635 126, Tamilnadu, India
Jewellery and Clock Plants 1 :	29, SIPCOT Industrial Complex, Hosur - 635126, Tamilnadu, India
Jewellery and Clock Plants 2 :	Khasra No. 238, Kuanwala Dehradun - 248 001, Uttaranchal, India
Prescription Eyewear Lens Laboratory :	Plot No. 27, Survey No.125, KIADB Industrial Area, Chikaballapur - 562 101 Karnataka, India
Overseas Branch Office :	Unit No. 11 and 12, 20/F, Metro Loft No. 38, Kwai Hei Street, Kwai Chung N T, Hong Kong
Tel No.:	00852 64716536

DIRECTORS

AS ON 31.03.2012

Name :	Mr. N. Sundaradevan
Designation :	Chairman
Name :	Mr. Susan Mathew
Designation :	Chairperson (up to 24.10.2011)
Name :	Mr. K Dhanavel
Designation :	Director (from 30.04.2012)
Name :	Mr. Bhaskar Bhat
Designation :	Managing Director
Name :	Mr. V. Parthasarathy
Designation :	Director
Name :	Mr. Ishaat Hussain
Designation :	Director
Name :	Mr. N.N. Tata
Designation :	Director
Name :	Mr. T.K. Balaji
Designation :	Director
Name :	Mr. C.G. Krishnadas Nair
Designation :	Director
Name :	Ms. Vinita Bali
Designation :	Director
Name :	Ms. Hema Ravichandar
Designation :	Director
Name :	Mr. R. Poornalingam
Designation :	Director
Name :	Mr. Das Narayandas
Designation :	Director

KEY EXECUTIVES

Name :	A.R. Rajaram
Designation :	Head - Legal and Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 30.06.2012

Category of Shareholder	No. of Shares	% of No. of Shares
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Central Government / State Government(s)	247476720	27.88
Bodies Corporate	223531200	25.18
Sub Total	471007920	53.05
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	471007920	53.05
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	22,396,054	2.52
Financial Institutions / Banks	160,414	0.02
Insurance Companies	11,409,535	1.29
Foreign Institutional Investors	143,388,420	16.15
Sub Total	177,354,423	19.98
(2) Non-Institutions
Bodies Corporate	22,641,165	2.55
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 million	107,995,217	12.16
Individual shareholders holding nominal share capital in excess of Rs. 0.100 million	108,565,339	12.23
Any Others (Specify)	222,096	0.03
Trusts	213,096	0.02
Overseas Corporate Bodies	9,000	-
Sub Total	239,423,817	26.97
Total Public shareholding (B)	416,778,240	46.95
Total (A)+(B)	887,786,160	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	--	--
(1) Promoter and Promoter Group	--	--
(2) Public	--	--
Sub Total	--	--
Total (A)+(B)+(C)	887,786,160	--

BUSINESS DETAILS

Line of Business :

Manufacturers and Sellers of Watches, Jewellery Pieces, Table Clocks, etc.

Products :

Item Code No. (ITC Code)	Product Description
91.02	Watches
91.03	Clocks
71.13	Jewellery

GENERAL INFORMATION

No. of Employees :

4353 (out of which 2630 were in the factories, 800 in retail, about 578 in sales and marketing while the rest 345 were in support functions.) (Approximately)

Bankers :

· Canara Bank

· Bank of Baroda

· The Hongkong and Shanghai Banking Corporation Limited

· Standard Chartered Bank

· Oriental Bank of Commerce

· Union Bank of India

· Indian Bank

Facilities :

Secured Loan	Rs. In Millions 31.03.2012	Rs. In Millions 31.03.2011
Term loans
From banks – Secured
Foreign Currency loan	58.889
Total	58.889	676.993

Banking Relations :	--
Auditors :
Name :	Deloitte Haskins and Sells Chartered Accountants
Promoters :	· Tamil Nadu Industrial Development Corporation Limited · Tata Sons Limited
Subsidiaries :	· Titan Time Products Limited · Tanishq (India) Limited · Titan Properties Limited · Favre Leuba AG (From 13 January, 2012)
Associates :	· TVS Wind Power Limited

CAPITAL STRUCTURE

AS ON 31.03.2012

Authorised Capital :

No. of Shares	Type	Value	Amount
1200000000	Equity Shares	Rs. 10/- each	Rs.1200.000 Millions
4000000	Redeemable Cumulative Preference Shares	Rs. 100/- each	Rs. 400.000 Millions
	Total		Rs. 1600.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
887786000	Equity Shares	Rs. 10/- each	Rs.887.786 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2012	31.03.2011	31.03.2010
SHAREHOLDERS FUNDS
1] Share Capital		887.786	443.893	443.893
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		13611.182	9809.903	6799.940
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		14498.968	10253.796	7243.833
LOAN FUNDS
1] Secured Loans		58.889	676.993	727.904
2] Unsecured Loans		0.000	0.000	0.000
TOTAL BORROWING		58.889	676.993	727.904
DEFERRED TAX LIABILITIES		0.000	15.182	47.549
TOTAL		14557.857	10945.971	8019.286
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		3687.251	2830.685	2626.308
Advances on capital account and Capital work-in-progress, at cost		248.521	193.563	122.867
INVESTMENT		160.490	91.276	76.289
DEFERREX TAX ASSETS		37.749	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	28786.690	19938.287	13403.315
	Sundry Debtors	1631.094	1136.789	936.076
	Cash & Bank Balances	9605.300	10948.878	1867.184
	Other Current Assets	326.330	0.000	0.000
	Loans & Advances	2511.916	2200.023	1830.554
Total Current Assets		42861.33	34223.977	18037.129
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	17501.529	17461.288	7221.721
	Other Current Liabilities	11993.496	6731.444	4274.176
	Provisions	2942.459	2200.798	1347.410
Total Current Liabilities		32437.484	26393.530	12843.307
Net Current Assets		10423.846	7830.447	5193.822
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		14557.857	10945.971	8019.286

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2012	31.03.2011	31.03.2010
	SALES
		Income	88383.784	65208.951	46744.217
		Other Income	941.140	560.763	118.585
		TOTAL (A)	89324.924	65769.714	46862.802
Less	EXPENSES
		Cost of materials and components consumed	61450.816	43448.782	42794.643
		Purchase of traded goods	11508.828	8495.823
		(Increase)/ decrease in finished goods, work-in-progress and traded goods	(7518.513)	(5002.814)
		Employee benefits expense	3923.434	3651.300
		Other expenses	10689.855	8496.616
		TOTAL (B)	80054.420	59089.707	42794.643
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		9270.504	6680.007	4068.159
Less	FINANCIAL EXPENSES (D)		437.153	345.173	254.188
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		8833.351	6334.834	3813.971
Less/ Add	DEPRECIATION/ AMORTISATION (F)		448.962	344.825	600.801
	PROFIT BEFORE TAX (E-F) (G)		8384.389	5990.009	3213.170
Less	TAX (H)		2382.830	1685.859	709.934
	PROFIT AFTER TAX (G-H) (I)		6001.559	4304.150	2503.236
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		4326.152	2729.161	2110.253
Less	APPROPRIATIONS
		Transfer to debenture redemption reserve	NA	52.800	52.800
		Proposed dividend on equity shares		1109.733	665.840
		Tax on dividends		180.026	110.588
		Transfer to general reserve		1364.600	1055.100
	BALANCE CARRIED TO THE B/S		NA	4326.152	2729.161
	EARNINGS IN FOREIGN CURRENCY
		Export of goods on FOB basis	1604.757	1268.990	1006.130
		Others	3.537	2.504	9.376
	TOTAL EARNINGS		1608.294	1271.494	1015.506
	IMPORTS
		Raw Materials	39496.642	29258.844	19816.351
		Stores & Spares	78.156	58.171	88.794
		Capital Goods	226.441	41.257	115.685
	TOTAL IMPORTS		39801.239	29358.272	20020.830
	Earnings Per Share (Rs.)		6.76	4.85	56.39

QUARTERLY RESULTS

PARTICULARS	30.06.2012
	1^st Quarter
Net Sales	22058.100
Total Expenditure	19936.900
PBIDT (Excl OI)	2121.200
Other Income	250.200
Operating Profit	2371.400
Interest	126.000
Exceptional Items	0.000
PBDT	2245.400
Depreciation	123.200
Profit Before Tax	2122.200
Tax	561.300
Provisions and contingencies	0.000
Profit After Tax	1560.900
Extraordinary Items	0.000
Prior Period Expenses	0.000
Other Adjustments	0.000
Net Profit	1560.900

KEY RATIOS

PARTICULARS		31.03.2012	31.03.2011	31.03.2010
PAT / Total Income	(%)	6.72	6.54	5.40
Net Profit Margin (PBT/Sales)	(%)	9.49	9.19	6.87
Return on Total Assets (PBT/Total Assets}	(%)	18.01	16.17	15.55
Return on Investment (ROI) (PBT/Networth)		0.58	0.58	0.44
Debt Equity Ratio (Total Liability/Networth)		2.24	2.64	1.87
Current Ratio (Current Asset/Current Liability)		1.32	1.30	1.40

LOCAL AGENCY FURTHER INFORMATION

Sr. No.	Check List by Info Agents	Available in Report (Yes / No)
1]	Year of Establishment	Yes
2]	Locality of the firm	Yes
3]	Constitutions of the firm	Yes
4]	Premises details	No
5]	Type of Business	Yes
6]	Line of Business	Yes
7]	Promoter's background	No
8]	No. of employees	Yes
9]	Name of person contacted	No
10]	Designation of contact person	No
11]	Turnover of firm for last three years	Yes
12]	Profitability for last three years	Yes
13]	Reasons for variation <> 20%	--
14]	Estimation for coming financial year	No
15]	Capital in the business	Yes
16]	Details of sister concerns	Yes
17]	Major suppliers	No
18]	Major customers	No
19]	Payments terms	No
20]	Export / Import details (if applicable)	No
21]	Market information	--
22]	Litigations that the firm / promoter involved in	--
23]	Banking Details	Yes
24]	Banking facility details	Yes
25]	Conduct of the banking account	--
26]	Buyer visit details	--
27]	Financials, if provided	Yes
28]	Incorporation details, if applicable	Yes
29]	Last accounts filed at ROC	Yes
30]	Major Shareholders, if available	--
31]	Date of Birth of Director, if available	No
32]	PAN of Director, if available	No
33]	Voter ID No of Director, if available	No
34]	External Agency Rating, if available	Yes

Financial Results

Even as the Indian economy encountered a challenging 2011-12, the Company recorded its best-ever performance.

In 2011-12, the Company’s sales income grew by 36.5% to Rs. 89708.600 Millions compared with Rs. 65708.600 Millions in the previous year. Creditably, the percentage growth of their bottom lines was higher: profit before tax grew by 40% to Rs. 8384.400 Millions, while net profit grew by 39.4% to Rs. 6001.600 Millions.

Even though the Indian economy grew slower in 2011-12, Subject reported a stronger growth on account of a deep understanding of consumer preferences, product differentiation, new product launches and professional brand management.

Sales of the Watches Division (net of excise duty) grew by 20.3% to Rs.15297.600 Millions, the business achieving breakthroughs in a number of new segments – the sub-Rs 500 economy segment where the Sonata Super-Fibre model reported handsome offtake; the children’s segment, where Titan Zoop blazed to a sale of half-amillion watches in its very first year of full operations; the expansion of the exclusive Fastrack store network reinforced the brand’s excitement across the preferred youth segment; the successful Fastrack products extended into accessories (bags, belts, wallets, wrist-bands). Besides, Helios, the 25-store chain that retails more than 35 international premium and luxury watch brands in addition to the Company’s Titan and Xylys brands, performed creditably. The Company’s Jewellery Division sales (net of excise duty) grew by 39.8% to Rs.70641.600 Millions owing to increased sales of diamondstudded jewellery and the grammage growth of gold jewellery despite higher gold prices. The Division launched the Mia and Fq jewellery lines with an eye on working women and the younger generation respectively.

The Company’s Eyewear Division, Accessories and Precision Engineering revenues (net of excise duty) cumulatively strengthened by 34.8% to Rs.3288.100 Millions. The Company’s Eyewear business capitalized on retail expansion while the Company’s B2B business of Precision Engineering turned around, the challenging environment notwithstanding.

This growth was partly catalyzed by a widening of the retail network through the net addition of 162 stores (2,26,491 sq.ft.) across the Watches, Jewellery and Eyewear Business Divisions. The Company controls a network of 827 stores (including franchisee stores) with over 10,36,000 sq. ft of retail space as on 31st March 2012, which delivered a retail turnover of over Rs. 85000.000 Millions in 2011-12.

Simultaneously, the Company strengthened its business through fresh investments. It has invested in the commercial production of an integrated state-of-the-art Jewellery unit in the excise-free zone of Pantnagar, Uttarakand. The Rs 150.000 Millions unit was commissioned in March 2012 to manufacture studded jewellery, with a peak employment opportunity of 250 and a projected turnover of Rs. 2500.000 Millions in 2012-13.

International operations

Even though the Company was largely focused on the Indian market, it continued to strengthen its international exposure as well. The Company achieved exports of Rs.1600.000 Millions during the year comprising watches and precision engineered components; this was a 26.5% improvement over the previous year. The International Watches division, which moved into Vietnam in 2009 and South Africa in 2010-11, reported encouraging results in 2011-12.

While Far East Asian markets continued to do well, some Middle East markets reported sluggishness. The export of precision engineered components reported an improvement in 2011-12 due to a high quality standard, which translated into Precision Engineering Component and Sub-Assemblies (PECSA) orders from the aerospace, oil and gas and electrical sectors while traction for the Machine Building and Automation (MBA) business translated into attractive export orders.

MANAGEMENT DISCUSSION AND ANALYSIS

THE ECONOMY

The Indian economy is estimated to have grown 6.5% in 2011-12 as against 8.4% in 2010-11. The lower GDP growth was primarily on account of a combination of global economic headwinds, a challenged Indian industrial sector, inflation, periodic interest rate hikes, infrastructural slowdown and a sharp depreciation of the Indian Rupee against the US Dollar starting from the third quarter of 2011-12.

The silver lining in India was the performance of the services sector: The segment grew 9.4% and its share in India’s GDP climbed from 58% in 2010-11 to 59% in 2011-12. The country’s agriculture and allied sectors grew 2.5% in 2011-12. National consumption grew 6% and private consumption grew 6.5% compared with 8.1% in the previous year.

The slowdown was largely a result of the global economic upheaval following the Euro-zone turmoil from September 2011, which raised questions about the economic stability of a number of countries. Consequently, there were sharp rating downgrades of sovereign debt across a number of advanced countries. This adverse reality notwithstanding, India retained its position as one of the world’s fastest growing economies.

BUSINESS OVERVIEW

Despite cost-push pressures and rising interest rates that prompted a number of consumers to postpone their purchases, the Company performed credibly: Income increased 37% from Rs. 65710.000 Millions in 2010- 11 to Rs. 89710.000 Millions in 2011-12 while profit after tax strengthened 39% from Rs. 4300.000 Millions in 2010-11 to Rs. 6000.000 Millions in 2011-12.

WATCHES AND ACCESSORIES DIVISION

Global Watches Market

In 2011, the global wrist watches market was estimated at around the same level as in the previous year (1,050 million units). This absence of volume growth was on account of the economic stress in developed markets like Japan and Europe. In contrast, Asia reported good double-digit growth and the US indicated reasonable recovery.

Swiss watches, which represent the luxury and premium segment, reported handsome sales growth of 19.2% in 2011. This was driven by a significant 30% increase in Asian consumption, which absorbed a remarkable 55% of all Swiss watch exports. The margins of the Swiss industry were however adversely impacted by volatile exchange rates, including a strong Swiss Franc.

The Swatch group continued to be the global market leader in watches with total sales in 2011 exceeding seven billion Swiss Francs. Revenues of this Group grew 21% at constant exchange rates and operating profits grew 12%.

Key global trends include the rapid growth of mechanical watches, which outstripped the growth of both quartz analog and quartz digital watches. Despite the global market being flat over the previous year, mechanical watches grew 9% in volume terms. This trend appears to be gaining momentum.

Yet another significant trend is the increasing preference for steel watches, compared to watches which sport gold or other looks.

Indian watches market

Only 27% of all Indians own a watch. This statistic demonstrates the significant potential for growth, particularly as Indians become more affluent and style-conscious.

The Indian watches market is estimated at around 53 million units in 2011, valued at approximately Rs. 4,500 cr. The market grew by about 14% in 2011. The catalysts for category growth includes overall economic progress, expanding upper-middle class and middle-class population, growth in India’s young earning population, rising consumerism and the spread of modern retail formats.

A large proportion of the Indian watches market is occupied by the unorganized sector, which sells about 30 million watches each year, primarily at the low-end of the market. These include inexpensive watches assembled legally by small players but a large part also comprises smuggled watches and fakes. There is need for concerted and statutory action to curb some of these unscrupulous practices.

The organized Indian watches market is dominated by Titan, with a market share exceeding 65%. Over the past few years, the market has witnessed the entry of several global players who are investing significantly in their respective brands. These include Timex, Seiko, Swatch Group, Casio, Citizen, Guess and Fossil, among others.

Despite such intense competition, Titan successfully grew sales (including exports) to 15.6 million watches during 2011-12, compared with 13.5 million watches during the previous year. The Company’s market share in multi-brand outlets also grew to about 47% during 2011-12, a handsome gain of 2% over the previous year. The reasons include a strong portfolio of brands (Titan, Sonata, Fastrack and Xylys), which has grown even stronger; innovative marketing and advertising efforts; expansion of retail and sales network and an innovative series of new watch designs which have captivated consumers.

JEWELLERY DIVISION

During 2011-12, the Indian jewellery industry was affected by the following realities:

· The price of gold rose 35% through the year

· Gold fluctuated by a wide margin during the year, leading to uncertainty in outlook and consumer response

· The piece of polished diamonds increased more than 100%

· The government introduced the need to show a PAN card for all transactions in excess of Rs 5 lakhs in an effort to curb the use of black money

These realities dampened industry growth and gold imports by India’s jewellery industry declined from 1,030 tonnes in FY11 to an estimated 830 tonnes in FY12, a drop of 20%.

It is in this context that the Company’s sales of 19.3 tonnes in FY12 against 18.3 tonnes in FY11, an increase of 6%, needs to be appraised.

Their Company’s brands continued to attract an increasing number of middle/upper-middle-class quality conscious customers through a variety of initiatives:

· Large format Tanishq stores of 10,000 sq. ft each in Kolkata and Pune and 20,000 sq. ft in Mumbai performed exceedingly well, providing the impetus to establish more such stores; the overall network area grew by more than 100,000 sq. ft, the highest ever in any one year

· Launched the Mia (jewellery for working women), Taj (inspired by the Taj Mahal), fq (jewellery for teenagers) and Glam Gold (fashionable traditional jewellery) collections, which were well received

· Launched the Amitabh-Jaya Bachchan advertising campaign for diamond jewellery, which strengthened the brand recall around trust and purity

· Marketed the Golden Harvest Jewellery Purchase Scheme through TV

· Consolidated the Gold Plus brand in Andhra Pradesh through new stores and improvements in merchandise and marketing

· Commissioned a new assembly unit in Pant Nagar (Uttarakhand) for diamond jewellery

As a result, the Division reported good growth in sales, EBIT margin and cash flow. It also won a number of awards in terms of store launches, marketing campaigns and supply chain innovation.

Meanwhile, the competitive landscape became increasingly challenging, marked by regional jewellers expanding their geographic presence, commissioning larger stores, professionalizing their services and considering prospective IPOs. This reality will widen the market, educate consumers, enhance an appreciation of brand differentiation and strengthen their respect.

The first six months of CY12 were marked by the following events of significance:

· Increase in the customs duty on gold from 1% to 2% to 4%, which according to industry observers is encouraging smuggling

· Introduction of excise duty and subsequent withdrawal created a level-playing field for the organized sector

· Introduction of tax collection at source for all cash transactions exceeding Rs 5 lakh. This is likely to have a small impact on the Company’s prospects, since it is already facing the effects of the PAN card in this value category since July 2011

· Cabinet ratification of compulsory hallmarking. Even as its implementation is hazy, this will prove advantageous in the long-term through a narrow pricing differential between the Company and its peers

Even as a hesitant consumer mood, regulatory constraints and increasing competition represent business challenges, their low share of the overall market and increasing branding provide attractive headroom. The Company will respond to this growing opportunity by focusing on the following areas in the next two years:

· Network expansion: The Division is targeting an addition of 200,000-250,000 sq. ft of retail space in 2012-13, double of 2011- 12 comprising a growing number of large stores

· Value: Leveraging increasing affordability of diamonds

· Design/ Collections: Four prominent launches and targeting diverse customer segments

· Middle India: Development of markets in small towns

· New segments: Investments in the Working Women and Solitaire categories

Through these initiatives, the Company expects to continue to lead the industry and report superior numbers in 2012-13 as well

EYEWEAR

Global eyewear market

Over the years, eyeglasses have shed their utilitarian image of being just a vision correction contraption to becoming a key fashion accessory. Innovative materials for lenses and frames and other technological advances have resulted in several new designs with superior aesthetic appeal, style and quality. Eyeglasses are increasingly used as a facial accessory matching apparel and for highlighting the user’s personality. The global eyewear market primarily comprises sales of prescription frames and sunglasses and can be divided in different segments and average retail prices

Global eyewear outlook

The future of the global eyeglasses market remains upbeat on account of emerging demographic trends. While the sheer increase in the world population opens up several possibilities and opportunities for eyeglass manufacturers and retailers, the already aging population in excess of 45 years with poor eye vision and symptoms of presbyopia, is expected to drive demand. The rise of the Internet as a potent vehicle for selling eyeglasses is additionally expected to expand the retailing reach of eyeglasses. The growing demand of popular-priced sunglasses and robust growth outlook for plastic frames and lenses are expected to catalyse growth of the total eyeglasses market.

Although developed markets such as the US and Europe have been the traditionally large revenue contributors to the global eyeglasses market, growth in the short to medium term period is expected from the emerging markets of Asia-Pacific and Latin America, the former being the fastest growing.

A Global Industry Analysts, Inc. report indicates that the lenses market remains the largest product group in the total eyeglasses market in terms of dollar sales, while the frames market is expected to be the fastest growing in 2007-2015.

Indian eyewear market

The eyewear market is estimated at 25-35 million units per annum. Changing lifestyles will continue to increase the number of people needing vision correction. The industry is largely unorganized and therefore presents a large growth opportunity when consumer preferences move to the organized.

During the last 3 years, this industry has seen considerable activity in the form of network expansion, new product offerings as well as emergence of new players - a clear indication of the potential in the country.

Titan’s offerings at Titan Eye+ comprise frames, lenses, sunglasses, contact lenses and accessories. The Company launched several collections of frames and lenses (like hydrophobic lenses that repel water) across its 205 multi-brand retail outlets. The centralised and state-of-the-art lens manufacturing and distribution facility at Chikkaballapur, near Bangalore enabled the division to swiftly cater to the needs of over 75 towns, catering to specific requirements of consumers.

The Company continued its tie-up with Sankara Nethralaya to offer mandated training for all its store staff and qualified Optometrists. This helps educate customers on the need for proper eyewear, aiding informed purchase.

As per consumer feedback, Titan Eye+ gained a reputation in providing quality eye testing through highly trained professional staff. The Company’s retail outlets are seen as destination stores for stylish and contemporary products.

The Company’s endeavor to introduce innovative and stylish products was reinforced through the launch of three new collections (Rio, Neo and Menz), which accounted for 19% of revenues from frames. A new brand of Sunglasses ‘Cabana’ targeted at the fashion conscious customer was launched nationally during the third quarter of 2011-12.

The Company continued to focus on a superior consumer experience, which reinforced through the Vista loyalty program that was launched nationally.

Going ahead, the Division will focus on talent development and retention in view of declining availability of quality optometrists. It expects to standardize consumer experience across its pan-India outlets and educate users on the need for proper eyewear.

It is the Division’s desire not only to be largest player in India but more importantly, the most desirable eyewear solutions provider of the country.

PRECISION ENGINEERING DIVISION

The year 2011-12 was a landmark for the precision engineering division. The business became profitable for the first time, riding record revenues. The business positioned itself as a dependable partner, providing customers with quality products while saving costs.

The precision engineering business comprised the following sub-divisions:

Precision engineering component and sub-assemblies (PECSA):

PECSA caters to the specialised requirements of the aerospace, oil and gas and electrical sectors. It supplies parts to leading Tier One aerospace companies through long-term contracts. PECSA received awards from SCIATI and HAL, among others. Today, most of the near- 1000 parts manufactured by the division enjoy customer prequalification, strengthening prospects.

Machine building and automation (MBA): MBA caters to the assembly line automation needs of automotive and electrical industries. Around 20 customers were acquired during the year under report (total 60) and several export orders were completed. The division entered the manufacture of assembly lines for medical devices with a potential for repeat orders. A rising demand for automation will strengthen revenues.

Outlook for 2012-13

The robustness of the Indian economy is reflected in the fact that despite challenging headwinds, the Euro-zone crisis and a substantially weaker Rupee, India’s GDP is expected to grow by about 6.5% in 2012-13.

The Company’s Watches Division is optimistic of growth through continued network expansion in India, sustained investment in brands, introduction of new product collections and deeper inroads into Vietnam, Singapore, Malaysia, South Africa and Saudi Arabia. The Company expects to increase market share for Fastrack and Titan accessories.

The Company’s Jewellery Division expects to introduce innovative collections and widen its network.

The Company’s Eyewear Division will launch new models, progressively manufactured within to reduce costs, enhance quality, strengthen the supply chain and respond to customer needs faster. It will also focus on standardizing customer experience across stores.

With a view to integrate operations and leverage opportunities, the Company appointed regional business heads effective 1st April 2012 to catalyse the growth of various divisions.

The new introduction of the Unified Loyalty Programme and the Ecommerce for internet sales will be launched in 2012-13 promising much greater satisfaction and convenience to customers.

CONTINGENT LIABILITY NOT PROVIDED FOR:

(Rs. In Millions)

Particulars	31.03.2012	31.03.2011
Sales Tax – (relating to the applicability of rate of tax, computation of tax liability, submission of certain statutory forms)	54.325	41.272
Customs Duty – (relating to compliance with the terms of notification, export obligations)	31.694	31.694
Excise Duty – (relating to denial of exemption by amending the earlier notification, computation of the assessable value, denial of input credit on service tax and excise duty on jewellery)	1048.286	31.694
Income Tax (relating to disallowance of deductions claimed)	402.721	128.978
Others (relating to miscellaneous claims)	47.490	45.449

FIXED ASSETS:

• Land – Freehold
• Land – Leasehold
• Plant, Machinery and Equipment
• Furniture, Fixtures and Equipment
• Vehicles
• Intangible Assets – Trade Marks

AUDITED FINANCIAL RESULTS FOR THE PERIOD ENDED 30^TH JUNE 2012

(Rs. in millions)

Sr. No.	Particular	Quarter Ended
		30.06.2012
		(Unaudited)
1.	Income from Operation
	Net Sales/Income from Operations	22056.500
	Other operating income	1.600
	Total Income from Operation	22058.100
2.	Expenditure
	Consumption of raw materials	14731.900
	Purchase of traded goods	3831.500
	Changes in inventories of finished goods, work in progress and stock-in-trade	(2313.200)
	Employee cost	1039.200
	Advertising	1034.400
	Depreciation / Amortisation	123.200
	Other expenditure	1613.100
	Total expenditure	20060.100
3.	Profit From Operations before Other Income, Interest	1998.000
4.	Other Income	250.200
5.	Profit Before Interest	2248.200
6.	Interest	126.000
7.	Profit from Ordinary Activities before Tax (7+8)	2122.200
8.	Tax Expense
	a) Current tax	573.000
	b) Deferred tax	(11.700)
9.	Net Profit after Tax	1560.900
10.	Paid-up Equity Share Capital (Face Value of Rs.10/- Each)	887.800
11.	Reserves Excluding Revaluation Reserve
12.	Basic and Diluted Earning Per Share (EPS) (Rs.)-Not Annualised	1.76
13.	Public Shareholding
	-Number of Shares	416,778,240
	- Percentage of Shareholding	46.9%
14.	Promoters and Promoter Group Shareholding
	a) Pledged/Encumbered
	- Number of Shares	--
	- Percentage of Shares (as a % of the Total Shareholding of promoter and promoter group)	--
	- Percentage of Shares (as a % of the Total Share Capital of the Company)	--
	b) Non Encumbered
	- Number of Shares	471,007,920
	- Percentage of Shares (as a % of the Total Shareholding of Promoter and Promoter Group)	100.0%
	- Percentage of Shares (as a % of the Total Share Capital of the Company)	53.1%

Particulars	Quarter Ended
	30.06.2012
INVESTOR COMPLAINTS
Pending at the beginning of the quarter	2
Received during the quarter	8
Disposed of during the quarter	8
Remaining unresolved at the end of the quarter	2

SEGMENT RESULTS

(Rs. in millions)

Particular	Quarter Ended
	30.06.2012
	(Unaudited)
Net sales / Income from segments
Watches	3606.900
Jewellery	17755.300
Others	896.200
Corporate(Unallocated)	49.900
Total	22308.300
Profit / (Loss) from segments before interest and taxes
Watches	504.100
Jewellery	1805.500
Others	(16.400)
Total	2293.200
Less : Interest	126.000
Unallocable expenditure net of unallocable income	45.000
Profit before taxes	2122.200
Capital Employed
Watches	5510.700
Jewellery	7036.900
Others	1778.700
Corporate(Unallocated)	1800.100
Total	16126.400

Notes:

1 The Company's primary segments consist of Watches, Jewellery and Others, where the 'Others' include Eye wear, Precision Engineering, Machine Building, Clocks and Accessories. Capital employed in segments include all operating assets and liabilities. Segment results include all related income and expenditure.

2 The figures of the previous period have been regrouped/recast, where necessary.

3 Pursuant to the Scheme of Amalgamation of Tanishq (India) Limited (wholly owned subsidiary of the Company) with the Company as sanctioned by the High Court of Karnataka, and which came into effect on 6 January 2012, all assets and liabilities have been transferred to and vested in the Company from the appointed date 1 April 2010. Accordingly, the figures reported for quarter ended 30 June 2011 have been appropriately recast to give effect to the Scheme of Amalgamation and to incorporate therein the profitability of the merged entity for the period

4 The figures for the quarter ended 31 March 2012 are the balancing figures between audited figures in respect of full financial year and the year to date figures upto the third quarter of the previous financial year.

5 The financial results were reviewed by the Board Audit Committee and were approved by the Board of Directors at their meeting on 31 July 2012.

6 The Auditors have carried out a limited review of the financial results for the period ended on 30 June 2012, as required by the Listing Agreement.

WEB SITE DETAILS

COMPANY PROFILE

Subject is the organization that brought about a paradigm shift in the Indian watch market when it introduced its futuristic quartz technology, complemented by international styling. With India's two most recognized and loved brands Titan and Tanishq to its credit, Titan Industries is the fifth largest integrated watch manufacturer in the world.

The success story began in 1984 with a joint venture between the Tata Group and the Tamil Nadu Industrial Development Corporation. Presenting Titan quartz watches that sported an international look, Titan Industries transformed the Indian watch market. After Sonata, a value brand of functionally styled watches at affordable prices, Titan Industries reached out to the youth segment with Fastrack, its third brand, trendy and chic. The company has sold 135million watches world over and manufactures 13 million watches every year.

With a license for premium fashion watches of global brands, Subject repeated its pioneering act and brought international brands into Indian market. Tommy Hilfiger and FCUK as well as the Swiss made watch – Xylys owe their presence in Indian market to Titan Industries.

Entering the largely fragmented Indian jewellery market with no known brands in 1995, Titan Industries launched Tanishq, India’s most trusted and fastest growing jewellery brand. Gold Plus, the later addition, focuses on the preferences of semi-urban and rural India. Completing the jewellery portfolio is Zoya, the latest retail chain in the luxury segment.

Subject has also made its foray into eyewear, launching Fastrack eyewear and sunglasses, as well as prescription eyewear. The organization has leveraged its manufacturing competencies and branched into precision engineering products and machine building.

With over 826 retail stores across a carpet area of over 10,08,083 sq. ft. Titan Industries has India’s largest retail network. The company has over 331exclusive ‘World of Titan' showrooms and over 83 Fastrack stores. It also has a large network of over 700 after-sales-service centers. Titan Industries is also the largest jewellery retailer in India with over 130 Tanishq boutiques and Zoya stores, over 31 Gold Plus stores. It also sports over 204 Titan Eye+ stores. The company has two exclusive design studios for watches and jewellery.

Backed by over 6,000 employees, two exclusive design studios for watches and jewellery, 9 manufacturing units, and innumerable admirers world over, Titan Industries continues to grow and sets new standards for innovation and quality. The organization is all geared to repeat the Titan and Tanishq success story with each new offering.

NEWS

PRESS REALEASE

Titan Industries announces outstanding results for the year ended March 2012

Subject had an extremely good 2011-12 and came up with an outstanding performance in a challenging economic environment.  Sales income for the year 2011-12 was Rs. 88383.800 Millions registering a growth of 35.5% over last year.  Titan Industries pursued aggressive growth during 2011-12 in all its business. The Company invested in many strategic initiatives taking into account long term and sustainable growth.  All these backed by the talent and commitment of employees and business associates have helped Titan Industries register this encouraging growth.

Profit before tax for the Company grew by 40% to Rs. 8384.400 Millions and net profit too grew by 39.4% over last year to Rs. 6001.500 Millions

The strength of its brands and consumer sentiment reflected in consistent sales growth across all retail formats of watches, jewellery and eyewear.

The Watches business of the Company recorded an income of Rs.15297.600 Millions, a healthy growth of 20.3%.  This was achieved through excellent planning and execution of key initiatives.  The income from Jewellery segment grew by 39.8%, crossing the Rs.70000.000 Millions mark to Rs.70641.600 Millions.  The profit, before interest and taxes, from the jewellery segment was Rs.6975.500 Millions for the year. The income from other segments comprising of Precision Engineering, a B2B Business, the Eyewear business and accessories grew by 34.8% from Rs.2438.100 Millions to Rs.3288.100 Millions. The Eyewear business expanded rapidly during the year and touched the mark of 200 stores, of Titan Eye Plus, across 70 towns.  The Precision Engineering also performed very well as the Aerospace and Automotive industries showed signs of recovery from the impact of global economic crisis.   

The year witnessed aggressive expansion of its retail network with an addition of over 200 stores by Watches, Jewellery and Eyewear businesses.  As on 31st March 2012, the Company had 827 stores, with over 1 million sq.ft of retail space delivering a retail turnover in excess of Rs.8500 Millions.  

Mr. Bhaskar Bhat, Managing Director of the Company stated that “It has been a challenging yet fruitful year for Titan Industries Limited.  In fact, the Company has moved on to a new platform of performance as well as future expectations.  Given the high expectations of all our stakeholders and aspirations of our employees, we move confidently into the new financial year.”

After considering the excellent performance of the Company, the directors have recommended a dividend of 175%. 

Titan Industries LIMITED: Revenues up 37% over last year Q2

Titan Industries Limited: Revenues up 37% over last year Q2

After a record performance in the first quarter of 2011-12, Titan Industries Limited continued to record growth in top line and profits in Q2.   The overall income in the second quarter, July to September 2011, was Rs.21245.800 Millions, a growth of 37% over last year’s income of Rs.15512.200 Millions during the same period.  The income for April to September 2011, the first half of this financial year, stands at Rs.41725.100 Millions, registering a growth of 48.4% over last year.

The news on profits is also encouraging.  The net profit for Q2 is Rs.1482.000 Millions, up from Rs.1277.700 Millions last year – a growth of 16%.  The net profit for the six months ended September 2011 is Rs.2915.600 Millions, up 39.5% over last year.  The profit before tax is Rs.2095.800 Millions for Q2 and Rs.4061.300 Millions for the first half.  The Company and, in particular, the Watch business was affected by input cost increases and adverse currency fluctuations leading to pressure on margins.

All businesses of the Company have recorded good performance compared to last year due to good retail sales growth.  The income for watches was Rs.4174.100 Millions in Q2 as compared to Rs.3594.300 Millions last year, a growth of 16.1%.  On the other hand jewellery business recorded an income growth of 44.7% in Q2 over last year.  It had an income of Rs.16312.300 Millions this year in Q2 as compared to Rs.11273.600 Millions last year.  Other businesses of the Company comprising Precision Engineering, a B2B business, the Eyewear business and accessories grew by 16.3% in Q2.  The combined income of these businesses was Rs.651.700 Millions in Q2.  Their last year income for Q2 was Rs.560.300 Millions.  

The Titan Industries retail chain is 737 stores strong, as on 30th September 2011 with a retail area crossing 9.2 lac sq. ft. nationally for all its brands.

Mr. Bhaskar Bhat, Managing Director of the Company stated that “The second quarter has been a healthy quarter for us recording an income growth of 37% despite a slowdown being witnessed by the economy.  This performance was driven by good retail growth for most of our brands and various initiatives undertaken by all businesses to introduce exciting products and enhance customer satisfaction.  During the second quarter considered as an ‘off-season’   quarter, demand had to be stimulated through investment in advertising and in consumer offers.  This strategy has helped keep retail sales growing – such investment are likely to continue through Q3.”

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 records 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.55.50
UK Pound	1	Rs.86.40
Euro	1	Rs.68.70

INFORMATION DETAILS

Report Prepared by :

BSN

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	8
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	8
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	8
--RESERVES	1~10	8
--CREDIT LINES	1~10	8
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	Yes
--LITIGATION	YES/NO	Yes
--OTHER ADVERSE INFORMATION	YES/NO	No
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	No
--EXPORT ACTIVITIES	YES/NO	Yes
--AFFILIATION	YES/NO	Yes
--LISTED	YES/NO	Yes
--OTHER MERIT FACTORS	YES/NO	Yes
TOTAL		69

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
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	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
-	NB	New Business	-

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.