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CHAPTER I
1.1 INTRODUCTION
The wristwatch is the most common style of watch worn today. With specialty watches becoming a standard, some manufacturers have committed their efforts to developing watches with several functions. When it comes to watches, there are three main types of movement: mechanical, automatic, and quartz.
A CHRONICLE OF WATCHES
Watches progressed in the 17th century from spring-powered clocks, which appeared as early as the 14th century. During most of its history the watch was a mechanical device, driven by clockwork, powered by winding a mainspring, and keeping time with an oscillating balance wheel. These are called mechanical watches. In the 1960s the electronic quartz watch was invented, which was powered by a battery and kept time with a vibrating quartz crystal. By the 1980s the quartz watch had taken over most of the market from the mechanical watch. Historically, this is called the quartz revolution. Developments in the 2010s include smart watches , which are elaborate computer-like electronic devices designed to be worn on a wrist. They generally incorporate timekeeping functions, but these are only a small subset of the smart watch’s facilities. In general, modern watches often display the day, date, month and year. For mechanical watches, various extra features called "complications", such as moon-phase displays and the different types of tourbillion, are sometimes included. Most electronic quartz watches, on the other hand, include time-related features such as timers, chronographs and alarm functions. Furthermore, some modern smart watches even incorporate calculators GPS and Bluetooth technology or have heart-rate monitoring capabilities, and some of them use radio clock technology to regularly correct the time.
Today, most watches in the market that are inexpensive and medium-priced, used mainly for timekeeping, have quartz movements. However, expensive collectible watches, valued more for their elaborate craftsmanship, aesthetic appeal and glamorous design than for simple timekeeping, often have traditional mechanical movements, even though they are less accurate and more expensive than electronic ones.
WATCH MARKET IN INDIA
When India got independence in 1947, its manufacturing base was quite weak due to economic exploitation by the British rulers for about two centuries. As a result, Indian citizens had to depend heavily on imported goods for a variety of manufactured products, including watches. Switzerland was the acknowledged leader in mechanical watches and the wealthy families from India used to buy watches manufactured in Switzerland. Even though the wristwatch was a utility item, its prohibitively high cost kept the common men out of its ambit. So, in the early 1960s, the then government under the influence of socialistic thinking undertook watch production within India to make the product available to the masses.
1.2 STATEMENT OF PROBLEM
Profitability is a test of efficiency and measure of control. Whereas ‘Brand profitability’ also sustains a product as the earnings it attracts by sales are used to ensure its survival and growth. Brand value and brand profitability are inter related, in real times it can be simply calculated as the difference of cost between the branded and non-branded. The affordable groups of any premium brand are limited to the income earners above the middle class of the Indian population, which is quite large. From this range, the market share of the brand becomes the key determinant of its profitability, as the market it serves is more profitable than its small-share rivals. But no brand can ever lose its brand value or image for profits. Though it has a huge targetable market, there should be pricing control. And so, there arises a setback for profitability maximization and sustenance.
SCOPE OF STUDY
The scope of the study is limited to collecting financial data published in the annual reports of the company every year and information available over Internet. The analysis is done to suggest the possible suggestions. The study is carried out for 4 years (2014 – 2018).
1.5 RESEARCH METHODOLOGY
Methodology is usually a guideline system for solving a problem, with specific components such as phases, tasks, methods, techniques and tools. In other words, “The study or description of methods” A methodology can be considered to include multiple methods, each as applied to various facets of the whole scope of the methodology. The research can be divided between two parts; they are qualitative research and quantitative research.
TYPE OF DATA USED
SECONDARY DATA
Data collected from a source that has already been published in any form is called as secondary data. The review of literature in any research is based on secondary data. Mostly from books, journals and periodicals.
METHOD OF DATA COLLECTION
The information needed for this study was collected from the organization in the form of secondary data.
1.6 TECHNIQUES USED IN THE STUDY
ACCOUNTING TOOL
RATIO ANALYSIS
Ratio analysis is one of the techniques of financial analysis where ratios are used as a yardstick for evaluating the financial condition and performance of a firm. Ratio analysis was pioneered by Alexander wall that presented a system of ratio analysis in the year
VARIOUS RATIOS CALCULATED
Current ratio Liquid ratio Absolute liquid ratio Debt-equity ratio Gross profit ratio Net profit ratio Operating profit ratio Operating cost ratio
PERIOD OF STUDY
The study covers the period of financial data from 2014 - 2018
1.7 LIMITATIONS
The study is limited on only one of the subsidiaries of the holding brand. The study is worked to only four years financial data. The ratios are calculated from the past financial statements and these are not indicators of future.
Eljelly (2004)^3 the efficient liquidity management involves planning and controlling of current assets and current liabilities in such a manner that eliminates the risk of inability to meet due short-term obligations and avoids excessive investment in these assets. The study found that the cash conversion cycle was of more important as a measure of liquidity than the current ratio that effects profitability. Dr. Sugan C. Jain (2002)^4 in his study, he examined the performance of automobile industry. He used composite index approach to analyze the operational efficiency and profitability and suggested to strengthening the soundness, profitability improvisation, working capital and in the performance of fixed assets. Maryam Mohammadi (2012)^5 she states that, accounting principles are useful tools in executing and improving a successful practice management plan. In today’s competitive environment, evaluating the financial performance is crucial for companies in manufacturing sector. The analysis of financial performance reflects the financial position of the company, the level of the competitiveness in the same sector, and a thorough knowledge about the cost and profit centre within the firm. Managers, investors and creditors can apply this accounting information provided by the financial analyst in their strategic planning and investment decisions. This study principally emphasizes, how accounting information aids budgetary decision-making to evaluate the company’s financial performance, and to determine its future obligations to make better investment decisions. Dr. S.K. Khartik Titto Varghese (2011)^6 He found that, the profitability is more or less depends upon the better utilization of resources and manpower. It is worth-while to increase production capacity and use advanced technology to act down cost of production and wage cost in order to increase profitability, not only against the investment, but also from the investor’s return point of view. James Clausen (2009)^7 in this article, he briefly explains about the liquidity ratio. He pronounces that, this analysis of the financial statement is used to measure the company’s
performance. It also shows the analysis of income statement and balance sheet. Investors and lending institutions will often use ratio analyses of the financial statements to determine a company’s profitability and liquidity. If the ratios indicate poor performance, investors may be reluctant to invest. Therefore, the current ratio or working capital ratio, measures current assets against current liabilities. The current ratio measures the company’s ability to pay back its short-term debt obligations with its current assets. He thinks a higher ratio indicates the company is better equipped to pay off short-term debt with current assets. Wherefore, the acid test ratio or quick ratio, measures quick assets against current liabilities. Quick assets that can be quickly converted into cash. Generally they are current assets less inventory. Gopinathan Thachappilly (2009)^8 he states that liquidity ratio helps in financial performance. He knows that a business has a high profitability, it can face short-term financial problems and its funds are locked up in inventories and receivables not realized for months. Any failures will damage its reputation and creditworthiness and in extreme cases even lead to bankruptcy. In addition to, liquidity ratios are work with cash and near-cash assets of a business on one side, and the immediate payment obligations (current liabilities) on the other side. The near-cash asset mainly includes receivables from customers and inventories of finished goods and raw materials. Coupled with, current ratio works with all the items that go into a business’ working capital, and give a quick look at its short-term financial position. Current assets include Cash, Cash equivalents, Marketable securities, Receivable and Inventories. Current liabilities include payables, Notes payable, accrued expenses and taxes, and Accrued installments of term debt. Srinivasa Roa.G And Indrasena Reddy.P (1995) 9 in their study, they stated that the financial position of the paper industry has been improving from year to year. The company’s performance in relation to generating internal funds in the form of reserves and surplus was excellent and also the company was doing well in mobilizing outsiders funds. The liquidity position of the company was sound as revealed by current ratio and
Dr S.K. Khartik Titto Varghese (2011)., www.indianresearchjournals.com. James Clausen (2009)., hv.diva-portal.org>get>FULLTEXT01. GopinathanThachappilly (2009), www.iiste.orgjournalsEJBMarticle. Srinivasa Rao G and Indrasena Reddy .P (1995)., Financial performance in Paper Industry-A case study, The management accountant vol. 30(5), pp.327-336. Sudipta Ghosh (2008)., Liquidity Management: A case study of TISCO Ltd.., The Management Accountant, vol. 43(2), pp.77-85.
CHAPTER III
OVERVIEW OF THE COMPANY
TITAN COMPANY LIMITED
Titan Company Limited (earlier known as Titan Industries Limited) is an Indian consumer goods company. It is a joint venture between the Tata Group and the Tamil Nadu Industrial Development Corporation. It commenced operations in 1984 under the name Titan Watches Limited. In 1994, Titan diversified into jewellery with Tanishq and subsequently into eyewear with Titan Eyeplus. In 2013, Titan entered the fragrances segment with the brand Skinn and, later that year, it ventured into the helmets category under its brand Fastrack Also, Titan announced recently (during the last quarter of 2016) about launching a series of affordable Smart watches under its brands like Sonata and Fastrack soon.
its jewellery brand, Gold Plus targeted at customers in South India with Tanishq to establish the brand's presence in South.
PROFILE
NAME TITAN COMPANY LIMITED CIN L74999TZ1984PLC COMPANY STATUS ACTIVE REGISTRATION NUMBER 1456 YEAR OF INCORPORATION 26 JULY 1984 LAST REPORTED AGM DATE 3 AUGUST, 2018 AUTHORISED CAPITAL INR 1,600,000, PAIDUP CAPITAL INR 887,786, COMPANY CATEGORY COMPANY LIMITED BY SHARES COMPANY SUB CATEGORY NON-GOVT COMPANY CLASS OF COMPANY PUBLIC LOCATION HOSUR
MANAGING DIRECTOR BHASKAR BHAT DIRECTORS HARISH RAMANANDA BHAT SANTHANAM ARUN ROY VIJAYAKRISHNAN IREENA VITTAL GNANADESIKAN NOEL NAVAL TATA HEMA RAVICHANDAR BHASKAR BHAT COMPANY SECRETARY DINESH SHETTY PRODUCTS WATCHES EYE WEAR JEWELLERY PERFUME
Corporate citizenship : We ensure that a part of our resources is invested in
environment and community betterment.
PRIVACY POLICY
Titan Company Limited (“Titan”, “We”, “Us”) is committed to the compliance of applicable Privacy Laws in the country where Titan’s product is distributed. Protecting the privacy and security of your personal data is of prime importance to Titan, therefore, we conduct our business by abiding by the laws applicable on data privacy and data security in the country where Titan’s product is distributed to you. This Privacy Policy is intended to inform you about the personal data that is collected from you, how your personal data may be used and disclosed, how you can control the use of your personal data, and how your personal data is protected when you use the Titan Application or the application developed by a third party for Titan (“Application”). We do not sell trade your personally identifiable information; however, we may share the same with third parties who assist us in conducting our business, operating our website/Application, or servicing you, so long as those parties agree to keep this information confidential.
RETURN POLICY
Titan is committed to ensuring full customer satisfaction with respect to the products available on our website, security & customer assistance. However, if you are not happy with the product, you can choose to return the order. NOTE: In case of international orders, we do not currently accept any returns or exchange of our products, except for those cases where a defective product has been delivered. You shall return the defective product unused and in the same condition as you received it, in its original packaging, along with the invoice for a refund. You are
required to report the defect within 7 days of receipt of the product either by calling us on 1800-266-0123 or writing to us on customercare@titan.co.in. For the refund on the returned defective product please check the section on Refund below.
CSR POLICY
Titan Company has a defined policy for Corporate Social Responsibility(CSR). As part of its CSR initiative, the manufacturing units of Watch, Jewellery and PED, at Hosur, have acquired the 'ISO 9001: 2000 Quality Management System Standards' and 'ISO 14001:2000 Environment System Standard' certifications, in its journey to be an ecologically responsible organisation. The company's diverse CSR initiatives include:
- Education - Titan Kanya - educating the Girl Child
- Titan Scholarships - Based on need and merit
- Titan School and Titan foundation for education
- Employing the differently-abled
- Karigar parks/centres
- Women's empowerment
- Skill development - basic training centre and Unnati programme
- Environment management programmes
PRODUCTS
Watches The watches division comprises brands Fastrack, Sonata, Raga, Octane and Xylys. In 2011, the company secured, licence for marketing & distribution of Tommy Hilfiger and Hugo Boss watches. Favre Leube was incorporated in 2012. In 2018, the division accounted for 2,126 Cr in revenue which was 10% of the total of the company. Eyewear In 2007, Titan Industries forayed into the fashion accessories industry with the launch of sunglasses, an Rs 330-crore market. It introduced Titan Eye+ that has a wide range of frames, contact lenses, prescription eyewear, & sunglasses. The division accounted for 415 crore in FY 2016-17 maintaining a stable growth of 8%. Jewellery Xerxes Desai started the brand Tanishq in 1995. Zoya was launched in the luxury segment, while Mia, a sub-brand was under Tanishq for work-wear jewellery. Titan's total revenue grew 20.44% in 2017-18 to 15,656 crore, of which jewellery sales fetched 13,036 crore. In 2016, Titan invested in CaratLane who reported a turnover of 290 crore in FY 2017-18. Perfume In 2013, Titan launched six variants of perfume in the Indian perfume market under the brand name ‘Skinn’. They collaborated with world-renowned perfumers including Alberto Morillas and Olivier Pescheux
AWARDS
Titan Company is awarded in many national and international forums for various activities and categories. Corporate Selected as Best Employer for National Award for the Empowerment of Persons with Disabilities 2014 by the government of India Titan ranked among the 100 most sustainable corporations in Asia in the Channel News Asia Sustainability Ranking 2014 Top Indian Company award under the Gems and Jewellery Sector at the Dun & Bradstreet Corporate awards, 2014 "Hall of Fame" award at 12th Franchisee Awards 2014 by Franchisee India Watches Award at the CII 24th Kaizen national awards for assembly casing team Good Design Award 2014 by design Council of Japan for Skeletal Edge "Best Product design of the year-Watches & Jewellery" award by Red Dot for Skeletal Edge for 2014 Bronze medal at the Indian Effies Award for Fastrack Jewellery "Most Admired retailer of the year" award in Jewellery Category by Images Retail Awards. Tanishq wins Global Awards for Excellence in Quality Management & Leadership by World Quality Congress \
