Notes to Accounts of Timex Group India Ltd.

Mar 31, 2025

(xi) Provisions and Contingent Assets and Liabilities
Provisions

The Company recognises a provision when there
is a present obligation (legal or constructive) as
a result of past event and it is probable that the
Company will be required to settle the obligation
and a reliable estimate can be made of the amount
of the obligation.

The amount recognised as a provision is the best
estimate of the consideration required to settle the
present obligation at the end of the reporting period,
taking into account the risks and uncertainties
surrounding the obligation. When a provision is
measured using the cash flows estimated to settle
the present obligation, its carrying amount is the
present value of those cash flows (when the effect
of the time value of money is material).

When some or all of the economic benefits required
to settle a provision are expected to be recovered
from a third party, a receivable is recognised as an
asset if it is virtually certain that reimbursements
will be received and the amount of receivable can
be measured reliably.

Provision for Warranties:

A provision is estimated for expected warranty
claims in respect of products sold during the year
on the basis of past experience regarding failure
trends of products and costs of rectification or
replacement. It is expected that most of this cost will
be incurred over the next one year as per warranty
terms. Management estimates the provision based
on historical warranty claim information and any
recent trends that may suggest future claims could
differ from historical amounts.

Contingent liability

A disclosure for a contingent liability is made when
there is a possible obligation or a present obligation
that may, but probably will not, require an outflow
of resources. Where there is a possible obligation or
a present obligation that the likelihood of outflow
of resources is remote, no provision or disclosure is
made.

Contingent Assets

Contingent assets are not recognised. However,
when realisation of income is virtually certain, then
the related asset is no longer a contingent asset, and
is recognised as an asset.

(xii) Revenue recognition

The Company recognises revenue when the control
of goods being sold is transferred to the customer and
when there are no longer any unfulfilled obligations.
The performance obligations in the contracts are
fulfilled based on various customer terms including
at the time of delivery of goods, dispatch or upon
customer acceptance based on various distribution
channels. The Company has generally concluded
that it is the principal in its revenue arrangements,
because it typically controls the goods or services
before transferring them to the customer.

Revenue recognised from major business
activities:

a) Sale of products

Revenue from the sale of products is recognised
at the point in time when control of the goods is
transferred to the customer and in case of export
sales of goods, it takes place on dispatch of goods
from the customs port.

Revenue is measured based on the transaction
price, which is the consideration, net of customer
incentives, discounts, variable considerations,
payments made to customers, other similar charges,
as specified in the contract with the customer.
Additionally, revenue excludes taxes collected
from customers, which are subsequently remitted to
governmental authorities.

The Contract assets and contract liabilities are
recognised basis its estimate of return on historical
results, taking into consideration the type of
customer, the type of transaction and the specifics
of each arrangement.

b) Rendering of services

Income from job work is accrued when right of
revenue is established, which relates to effort
completed. Support and Customer Services income
is recognised as per the terms of the agreement based
upon the services completed.

c) Interest income

Interest income from a financial asset is
recognised when it is probable that the
economic benefits will flow to the Company
and the amount of income can be measured
reliably. Interest income is accrued on a
time basis, by reference to the principal
outstanding and at the effective interest rate
applicable.

(xiii) Taxation

Income tax expense represents the sum of the tax
currently payable and deferred tax.

a) Current tax

The tax currently payable is based on taxable profit
for the year. Taxable profit differs from ‘profit
before tax’ as reported in the statement of profit and
loss because of items of income or expense that are
taxable or deductible in other years and items that
are never taxable or deductible. The Company’s
current tax is calculated accordance with the
Income-tax Act, 1961, using tax rates that have been
enacted or substantively enacted by the end of the
reporting period.

Current income tax assets and liabilities are
measured at the amount expected to be recovered
from or paid to the taxation authorities.

Current tax is recognised in the statement of profit
and loss, except when it relates to items that are
recognised in other comprehensive income or
directly in equity, in which case, the current tax is
also recognised in other comprehensive income or
directly in equity respectively.

b) Deferred tax

Deferred tax is recognised on temporary differences
between the carrying amounts of assets and
liabilities in the financial statements and the
corresponding tax bases used in the computation of
taxable profit. Deferred tax liabilities are generally
recognised for all taxable temporary differences.
Deferred tax assets are recognised only to the extent
that it is probable that the temporary differences
will reverse in the foreseeable future and taxable
profit will be available against which the temporary
differences can be utilised. Such deferred tax assets
and liabilities are not recognised if the temporary
difference arises from the initial recognition (other
than in a business combination) of assets and

liabilities in a transaction that affects neither the
taxable profit nor the accounting profit.

The carrying amount of deferred tax assets is
reviewed at the end of each reporting period and
reduced to the extent that it is no longer probable that
sufficient taxable profits will be available to allow
all or part of the asset to be recovered. Unrecognised
deferred tax assets are re-assessed at each reporting
date and are recognised to the extent that it has
become probable that future taxable profits will
allow the deferred tax asset to be recovered.

Deferred tax liabilities and assets are measured at
the tax rates that are expected to apply in the period
in which the liability is settled or the asset realised,
based on tax rates (and tax laws) that have been
enacted or substantively enacted by the end of the
reporting period.

Deferred tax is recognised in the statement of
profit and loss, except when it relates to items that
are recognised in other comprehensive income or
directly in equity, in which case, the deferred tax is
also recognised in other comprehensive income or
directly in equity respectively.

c) Current and deferred tax for the year

Current and deferred tax are recognised in the
statement of profit and loss, except when they relate
to items that are recognised in other comprehensive
income or directly in equity, in which case, the
current and deferred tax are also recognised in
other comprehensive income or directly in equity
respectively.

(xiv) Employee benefits

Short-term employee benefits

All short-term employee benefits such as salaries,
wages, bonus, medical benefits, etc. which fall
within 12 months of the period in which the
employee renders related services which entitles
them to avail such benefits and non-accumulating
compensated absences are recognised on an
undiscounted basis and charged to the statement of
profit and loss.

Defined contribution plan

Provident fund, superannuation fund and employee’s
state insurance are the defined contribution schemes

offered by the Company. The contributions to these
schemes are charged to statement of profit and loss
of the year in which contribution to such schemes
becomes due on the basis of services rendered by
the employees.

Defined benefit plan

Charge for the year in respect of unfunded defined
benefit plan in the form of gratuity has been
ascertained based on actuarial valuation carried out
by an independent actuary as at the year end using
the Projected Unit Credit Method, which recognises
each period of service as giving rise to additional
unit of employee benefit entitlement and measures
each unit separately to build up the final obligation.
The obligation is measured at the present value
of the estimated future cash flows. The discount
rate used for determining the present value of the
obligation under defined benefit plans is based
on the market yields on Government securities
as at the valuation date having maturity periods
approximating to the terms of related obligations.
Actuarial gains and losses are recognised
immediately in Other Comprehensive Income.
Remeasurement recognised in other comprehensive
income is reflected in retained earnings and is not
reclassified to the statement of profit and loss.

Compensated absences

Compensated absences which are not expected to
occur within twelve months after the end of the
period in which the employee renders the related
services are recognised as an actuarially determined
liability at the present value of the defined benefit
obligation at the balance sheet date.

(xv) Earnings per share

Basic earnings per share is calculated by dividing the
net profit or loss for the year attributable to equity
shareholders by the weighted average number of
equity shares outstanding during the period.

For the purpose of calculating diluted earnings
per share, the net profit or loss for the period
attributable to equity shareholders and the weighted
average number of shares outstanding during the
period are adjusted for the effects of all dilutive
potential equity shares. The number of shares used
in computing diluted earnings per share comprise of
the weighted average shares considered for deriving

basic earnings per equity share and weighted
average number of equity shares, if any, which
would have been issued on the conversion of all
dilutive potential equity shares unless the impact
is anti-dilutive. Dilutive potential equity shares are
deemed converted as of the beginning of the period
unless issued at a later date.

(xvi) Cash and cash equivalents

Cash and cash equivalents in the balance sheet
comprise cash at banks and on hand and short-term
deposits with an original maturity of three months
or less, which are subject to an insignificant risk of
changes in value.

(xvii) Financial instruments

Financial assets and financial liabilities are
recognised when the Company becomes a party
to the contractual provisions of the instrument.
Financial assets and liabilities are initially
recognised at fair value. Transaction costs that are
directly attributable to financial assets and liabilities
[other than financial assets and liabilities measured
at fair value through profit and loss (FVTPL)] are
added to or deducted from the fair value of the
financial assets or liabilities, as appropriate on initial
recognition. Transaction costs directly attributable
to acquisition of financial assets or liabilities
measured at FVTPL are recognised immediately in
the statement of profit and loss.

Financial assets

All regular way purchases or sales of financial
assets are recognised and derecognised on a trade
date basis. Regular way purchases or sales are
purchases or sales of financial assets that require
delivery of assets within the time frame established
by regulation or convention in market place.

All recognised financial assets are subsequently
measured in their entirety at either amortised cost
or fair value, depending on the classification of
financial assets.

(a) Classification of financial assets

i. Financial assets at amortised cost

A financial asset is measured at amortised
cost if both of the following conditions are
met:

a. the financial asset is held within a
business model whose objective is
to hold financial assets in order to
collect contractual cash flows and;

b. the contractual terms of the financial
asset give rise on specified dates to
cash flows that are solely payments
of principal and interest (SPPI) on the
principal amount outstanding.

Effective interest method:

The effective interest method is a method
of calculating the amortised cost of a debt
instrument and of allocating interest income
over the relevant period. The effective
interest rate that exactly discounts estimated
future cash receipts through the expected life
of the debt instrument, or, where appropriate,
a shorter period, to the net carrying amount
on initial recognition.

Income is recognised on an effective
interest basis for debt instruments other than
those financial assets. Interest income is
recognised in the statement of profit and loss
and is included in the ‘Other income’ line
item.

ii. Investments in equity instruments at Fair
Value Through Other Comprehensive
Income (FVTOCI)

Currently, the Company does not have any
investments in equity instruments which are
held for trading and therefore none of the
instruments are designated FVTOCI.

iii. Investments in equity instruments
at Fair Value Through Profit or loss
(FVTPL)

Financial assets at FVTPL are measured
at fair value at the end of each reporting
period, with any gains or losses arising on
remeasurement recognised in statement
of profit and loss. The net gain or loss
recognised in the statement of profit and
loss incorporates any dividend or interest
earned on the financial asset and is included
in the ‘Other income’ line item. Dividend

on financial assets at FVTPL is recognised
when the Company’s right to receive the
dividends is established, it is probable that
the economic benefits associated with the
dividend will flow to the entity, the dividend
does not represent a recovery of part of
cost of the investment and the amount of
dividend can be measured reliably.

(b) Impairment of financial assets

The Company recognizes loss allowances using the
expected credit loss (ECL) model for the financial
assets which are not fair valued through statement
of profit or loss.

The Company has used a practical expedient by
computing the expected credit loss allowance for
trade receivables based on a provision matrix. The
provision matrix takes into account historical credit
loss experience and adjusted for forward-looking
information. The expected credit loss allowance
is based on the ageing of the days the receivables
are due and the rates as given in provision matrix
and Company’s historical experience for customers.
Loss allowance for trade receivables with no
significant financing component is measured at an
amount equal to life time ECL.

For all other financial assets, expected credit losses
are measured at an amount equal to the 12-month
ECL, unless there has been a significant increase
in credit risk from initial recognition in which case
those are measured at lifetime ECL. The amount of
expected credit losses (or reversal) that is required
to adjust the loss allowance at the reporting date
to the amount that is required to be recognised is
recognized as an impairment gain or loss in the
statement of profit and loss.

(c) Derecognition of financial assets

A financial asset is derecognised only when:

- The Company has transferred the rights to
receive cash flows from the financial asset or

- retains the contractual rights to receive the
cash flows of the financial asset, but assumes
a contractual obligation to pay the cash flows
to one or more recipients.

When the entity has transferred an asset, the
Company evaluates whether it has transferred
substantially all risks and rewards of ownership
of the financial asset. In such cases, the financial
asset is derecognised. Where the entity has not
transferred substantially all risks and rewards of
ownership of the financial asset, the financial asset
is not derecognised.

Where the entity has neither transferred a financial
asset nor retains substantially all risks and rewards
of ownership of the financial asset, the financial
asset is derecognised if the Company has not
retained control of the financial asset. When the
Company retains control of the financial asset, the
asset is continued to be recognised to the extent of
continuing involvement in the financial asset.

(d) Foreign exchange gains and losses

The fair value of financial assets denominated in
a foreign currency is determined in that foreign
currency and translated at the spot rate at the end
of each reporting period. For foreign currency
denominated financial assets measured at amortised
cost and FVTPL, the exchange differences are
recognised in statement of profit and loss except for
those which are designated as hedging instruments
in a hedging relationship. For the purposes of
recognising foreign exchange gains and losses,
FVTOCI debt instruments are treated as financial
assets measured at amortised cost. Thus, the
exchange differences on the amortised cost are
recognised in the statement of profit and loss and
other changes in the fair value of FVTOCI financial
assets are recognised in other comprehensive
income.

Financial Liabilities including equity instruments

Debt and equity instruments issued by the Company
are classified as either financial liabilities or as
equity in accordance with the substance of the
contractual arrangements and the definitions of a
financial liability and an equity instrument.

(a) Equity Instruments

An equity instrument is any contract that

evidences a residual interest in the assets of

an entity after deducting all of its liabilities.

Equity instruments issued by the Company

are recognised at the proceeds received, net
of direct issue costs.

(b) Financial liabilities

All financial liabilities are subsequently
measured at amortised cost using the
effective interest method or at FVTPL.

i. Financial liabilities at FVTPL

Financial liabilities at FVTPL are
stated at fair value, with any gains
or losses arising on remeasurement
recognised in statement of profit and
loss. The net gain or loss recognised
in statement of profit and loss
incorporates any interest paid on
the financial liability and is included
in the ‘Other income ’ or ‘Other
expenses’ line item.

ii. Financial liabilities subsequently
measured at amortised cost

Financial liabilities that are not held-
for-trading and are not designated as
at FVTPL are measured at amortised
cost at the end of subsequent
accounting periods. The carrying
amounts of financial liabilities
that are subsequently measured at
amortised cost are determined based
on the effective interest method.

The effective interest method is a
method of calculating the amortised
cost of a financial liability and of
allocating interest expense over
the relevant period. The effective
interest rate is the rate that exactly
discounts estimated future cash
payments through the expected life
of the financial liability, or (where
appropriate) a shorter period, to
the net carrying amount on initial
recognition.

(c) Compound financial instruments

The component parts of compound financial
instruments (preference shares) issued by
the Company are classified separately as

financial liabilities and equity in accordance
with the substance of the contractual
arrangements and the definitions of a
financial liability and an equity instrument.

At the date of issue, the fair value of the
liability component is estimated using the
prevailing market interest rate for similar
instruments. This amount is recognised as a
liability on an amortised cost basis using the
effective interest method until extinguished
upon repayment.

The dividend portion classified as equity is
determined by deducting the amount of the
liability component from the fair value of the
compound financial instrument as a whole.
This is recognised and included in equity, net
of income tax effects, and is not subsequently
remeasured. In addition, the dividend portion
classified as equity will remain in equity
until repaid, in which case, the balance
recognised in equity will be transferred
to other component of equity. Refer note
1.C.(i).(b).

(d) Foreign exchange gains and losses

For financial liabilities that are denominated
in a foreign currency and are measured at
amortised cost at the end of each reporting
period, the foreign exchange gains and losses
are determined based on the amortised cost
of the instruments and are recognised in the
statement of profit and loss.

The fair value of financial liabilities
denominated in a foreign currency is
determined in that foreign currency and
translated at the spot rate at the end of the
reporting period. For financial liabilities
that are measured as at FVTPL, the foreign
exchange component forms part of the fair
value gains or losses and is recognised in the
statement of profit and loss.

(e) Derecognition of financial liabilities

The Company derecognises financial
liabilities when, and only when, the
Company’s obligations are discharged,
cancelled or have expired. An exchange

between with a lender of debt instruments
with substantially different terms is
accounted for as an extinguishment of the
original financial liability and the recognition
of a new financial liability.

Offsetting of financial instruments

Financial assets and financial liabilities
are offset and the net amount is reported
in the balance sheet if there is a currently
enforceable legal right to offset the
recognised amounts and there is an intention
to settle on a net basis, to realise the assets
and settle the liabilities simultaneously.
The legally enforceable right must not be
contingent on future events and must be
enforceable in the normal course of business
and in the event of default, insolvency
or bankruptcy of the Company or the
counterparty.

(xviii) Fair value measurement

The Company measures financial instruments at fair
value at each balance sheet date.

Fair value is the price that would be received to sell
an asset or paid to transfer a liability in an orderly
transaction between market participants at the
measurement date. The fair value measurement is
based on the presumption that the transaction to sell
the asset or transfer the liability takes place either:

a) In the principal market for the asset or
liability, or

b) In the absence of a principal market, in the
most advantageous market for the asset or
liability

The principal or the most advantageous market
must be accessible by the Company. The fair
value of an asset or a liability is measured using
the assumptions that market participants would
use when pricing the asset or liability, assuming
that market participants act in their economic best
interest. A fair value measurement of a non-financial
asset takes into account a market participant’s
ability to generate economic benefits by using
the asset in its highest and best use or by selling
it to another market participant that would use the
asset in its highest and best use. The Company

uses valuation techniques that are appropriate in
the circumstances and for which sufficient data are
available to measure fair value, maximising the use
of relevant observable inputs and minimising the
use of unobservable inputs. All assets and liabilities
for which fair value is measured or disclosed in the
financial statements are categorised within the fair
value hierarchy, described as follows, based on the
lowest level input that is significant to the fair value
measurement as a whole:

a) Level 1 — Quoted (unadjusted) market
prices in active markets for identical assets
or liabilities

b) Level 2 — Valuation techniques for which
the lowest level input that is significant to
the fair value measurement is directly or
indirectly observable

c) Level 3 — Valuation techniques for

which the lowest level input that is
significant to the fair value measurement is
unobservable

For assets and liabilities that are recognised in
the financial statements on a recurring basis, the
Company determines whether transfers have
occurred between levels in the hierarchy by re¬
assessing categorisation (based on the lowest
level input that is significant to the fair value
measurement as a whole) at the end of each
reporting period.

(xix) Segment Reporting

Segment reporting Operating segments are reported
in the manner consistent with the internal reporting
to the chief operating decision maker (CODM). The
Company’s primary segments consist of Watches
and wearables. Secondary information is reported
geographically. Segment assets and liabilities
include all operating assets and liabilities. Segment
results include all related income and expenditure.

(xx) Statement of Cash Flows

Cash flows are reported using indirect method,
whereby net profits before tax is adjusted for the
effects of transactions of a non-cash nature and any
deferrals or accruals of past or future cash receipts
or payments and items of income or expenses
associated with investing or financing cash flows.

The cash flows from regular revenue generating
(operating activities), investing and financing
activities of the company are segregated.

C Significant accounting judgements, estimates and
assumptions

The preparation of the Company’s financial statements
requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities, and the accompanying
disclosures. Actual results may differ from the estimates.

Uncertainty about these assumptions and estimates could
result in outcomes that require a material adjustment
to the carrying amount of assets or liabilities affected in
future periods. The Company continually evaluates these
estimates and assumptions based on the most recently
available information. Revisions to accounting estimates
are recognized prospectively in the Statement of Profit and
Loss in the period in which the estimates are revised and in
any future periods affected.

(i) Significant accounting judgements

In the process of applying the Company’s
accounting policies, management has made the
following judgements, which have the significant
effect on the amounts recognised in the financial
statements:

(a) Contingent Liabilities

In ordinary course of business, the Company
faces claims by various parties. The
Company assesses such claims and monitors
the legal environment on an ongoing basis,
with the assistance of external legal counsel,
wherever necessary. The Company records
a liability for any claims where a potential
loss probable and capable of being estimated
and discloses such matters in its financial
statements, if material. For potential
losses that are considered possible, but not
probable, the Company provides disclosures
in the financial statements but does not
record a liability in its financial statements
unless the loss becomes probable.

(b) Classification of Preference Shares

To consider classification of preference

shares as equity or liability depends on
the substance of the arrangement with
the preference shareholders (the holding
company) including discretion available
with the issuer, the assessment of timing,
circumstances, financial conditions,
and other related factors at the time of
issue of the preference shares including
but not limited to whether there is a
valid expectation of redemption of such
preference share capital on date of maturity.
It also requires evaluation of the Company’s
historical trend, operations, performance
and expected cash flows at the time of issue
of preference shares to consider its ability
to repay (including timing thereof) the said
preference shares. Further on the date of
issuance the present value of differential,
if any, between the market interest rate and
actual interest rate is classified as deemed
equity contribution.

At the date of transition to Ind AS on April
01,2016, the Company had outstanding
preference share capital issued to its
Holding Company aggregating Rs. 7,610
lakhs which under the previous GAAP
was forming part of share capital under
the shareholder’s fund. After assessing
various factors relating to classification
of preference shares, inter alia, substance
of the arrangement with the preference
shareholders, at the time of issue of these
preference shares, there was no valid
expectations of this amount being repaid,
as such the entire preference share capital
were classified as “Equity component of
compound financial instrument - preference
shares” under the head Other Equity in the
Ind AS Financial Statements on transition
date (i.e. April 01,2016).

In respect of the preference shares issued
thereafter in November 23, 2022 and in
October 25, 2024, referred to in Note
15, based on the assessment of factors
mentioned above, the Company has
classified these preference shares as
financial liabilities at Fair Value Through
Profit or Loss (FVTPL).

(ii) Significant estimates and assumptions

The key assumptions concerning the future and
other key sources of estimation uncertainty at the
reporting date, that have a significant risk of causing
a material adjustment to the carrying amounts
of assets and liabilities within the next financial
year, are described below. Existing circumstances
and assumptions about future developments,
however, may change due to market changes or
circumstances arising that are beyond the control
of the Company. Such changes are reflected in the
assumptions when they occur.

(a) Defined benefit plans/ Other Long term
employee benefits

The cost of the defined benefit plans and
other long term employee benefit plans are
determined using actuarial valuations. An
actuarial valuation involves making various
assumptions that may differ from actual
developments in the future. These include
the determination of the discount rate, future
salary increases and mortality rates. Due to
the complexities involved in the valuation
and its long-term nature, a defined benefit
obligation is highly sensitive to changes
in these assumptions. All assumptions are
reviewed at each reporting date.

The parameter most subject to change is the
discount rate. The management considers
the interest rates of government securities
based on expected settlement period of
various plans. Further details about various
employee benefit obligations are given in
Note 28.

(b) Taxes

Accounting for income taxes requires
the Company to estimate the timing
and impact of amounts recorded in the
financial statements that may be recognized
differently for tax purposes. To the extent
that the timing of amounts recognized for
financial reporting purposes differs from
the timing of recognition for tax reporting
purposes, deferred tax assets or liabilities
are required to be recorded. The Company
measure deferred tax assets and liabilities

using enacted tax rates expected to apply to
taxable income in the years in which those
temporary differences and carryforwards
are expected to be recovered or settled. The
effect on deferred tax assets and liabilities as
a result of a change in tax rates is recognized
in income in the period that includes the
enactment date.

(c) Leases

Ind AS 116 requires the Company to
recognize a right-of-use lease asset and
lease liability for operating and finance
leases. The right-of-use asset is measured
as the sum of the lease liability, prepaid or
accrued lease payments, any initial direct
costs incurred and any other applicable
amounts.

The calculation of the lease liability requires
the Company to make certain assumptions
for each lease, including lease term and
discount rate implicit in each lease, which
could significantly impact the gross lease
liability, the duration and the present value
of the lease liability. When calculating the
lease term, the Company considers the
renewal, cancellation and termination rights
available to the Company and the lessor.
The Company determines the discount rate
by calculating the incremental borrowing
rate.

The Company has several lease contracts
that include extension and termination
options. These options are negotiated
by management to provide flexibility in
managing the leased-assets and align with

the Company’s business needs. Management
exercises significant judgement in
determining whether these extension and
termination options are reasonably certain
to be exercised and accordingly records
the right of use assets and lease liability for
those assets.

(d) Allowance for Trade Receivables

The Company uses expected credit loss
model to assess the impairment loss or
gain. The Company has used a practical
expedient by computing the expected
credit loss allowance for trade receivables
based on a provision matrix. The provision
matrix takes into account historical credit
loss experience and adjusted for forward¬
looking information. The expected credit
loss allowance is based on the ageing of the
days the receivables are due and the rates
as given in provision matrix and Company’s
historical experience for customers.

(e) Warranty

The estimated liability for product warranties
is recorded when products are sold. These
estimates are established with respect to
products sold during the year on the basis
of past experience regarding failure trends
of products and costs of rectification or
replacement. It is expected that most of
this cost will be incurred over the next one
year as per the company warranty policy.
Management estimates the expense based on
historical warranty claims information and any
recent trends that may suggest future claims
could differ from historical amounts.

Footnotes:

(i) Rights, preferences and restrictions attaching to each class of shares including restrictions on the distribution of
dividends and the repayment of capital:

Preference shares of all classes carry a preferential right as to dividend over equity shares. Where dividend on cumulative
preference shares is not declared for a financial year, the entitlement thereto is carried forward whereas in the case of
non-cumulative preference shares, the entitlement for that year lapses. The preference shares are entitled to one vote per
share at meetings of the Company on any resolutions of the Company directly affecting their rights, if there is any default
in payment of their dividend for a period of 2 years or more in terms of proviso 2 to the section 47 of the Companies Act,
2013. In the event of liquidation, preference shareholders have a preferential right over equity shareholders to be repaid to
the extent of capital paid-up and dividend in arrears on such shares. Also refer Note 26.C for arrears of fixed cumulative
dividends on redeemable non-convertible preference shares. The preference shareholders, vide their letters dated March
31, 2020, Mach 29, 2024 and November 08, 2024, have relinquished their voting rights accrued/accruing on the preference
shares in terms of second proviso to section 47(2) of the Companies Act, 2013 due to non-payment of dividend till date
or during the remaining tenure of preference shares. During the year 2017-2018, the holders of preference share capital
had waived off the dividend for the financial years 2016-17 and 2017-2018. The Company had obtained relevant approval
from the holders of preference shares and regulatory authority for the waiver of dividend up to FY 2017-18 and extension
of maturity of preference shares. Further, in respect of the preference shares (issued prior to March 31, 2017) which
complete the maximum permissible tenure for redemption of preference shares as per the applicable relevant laws, and
as and when requested by the Company, the preference shareholders have consented to continue supporting the Company
towards redemption of the said preference shares either by way of subscription to fresh preference shares or issuance of
fresh preference shares through necessary statutory/regulatory approvals.

(ii) Other relavent terms and conditions relating to above preference shares

(a) 25,00,000 0.09% Non-cumulative redeemable non-convertible preference shares (0.09% NCR-NCPS) issued and
allotted on November 22, 2022 on private placement basis for the purpose of redemption of 25,00,000 0.1% Non¬
Cumulative Redeemable Non-Convertible Preference Shares of Rs.10/- each (0.1% NCR-NCPS), which were due
for redemption on March 24, 2023.

The original maturity date for redemption of 0.1% NCR-NCPS was ten years from the date of allotment i.e. March
25, 2003, with an option to the Company of an earlier redemption after March 24, 2005. These shares were due for
redemption on March 24, 2013 which pursuant to the provisions of section 106 of the erstwhile Companies Act,
1956 was extended by the Company with the consent of preference shareholders by five years, i.e. till March 24,
2018 and further extended by another five years, i.e. till March 24, 2023. These 0.1% NCR-NCPS were redeemed
on November 23, 2022.

The maturity date for redemption of 0.09% NCR-NCPS is five years from the date of allotment i.e. November 22,
2027, with an option with either party for an early redemption at any time.

(b) The original maturity date for redemption of 1,57,00,000 13.88% cumulative redeemable non-convertible
preference shares amounting Rs. 1,570 lakhs was ten years from the date of allotment i.e. March 27, 2004, with
an option to the Company of an earlier redemption after March 27, 2006. These shares were due for redemption
on March 26, 2014 which pursuant to the provisions of Section 106 of the erstwhile Companies Act, 1956 was
extended by the Company with the consent of preference shareholders by five years i.e. till March 26, 2019 and
were further extended by another five years, i.e. till March 26, 2024 (the date of maturity).

As the Company was not in a position to redeem 1,57,00,000, 13.88% cumulative redeemable non-convertible
preference shares of Rs. 10 each (“13.88% CRNCPS”) and payment of accumulated/unpaid dividend thereon
in view of the accumulated losses and absence of distributable profits, for the purpose of redemption of these
preference shares aggregating Rs. 1,570 lakhs along with accumulated/ unpaid dividend of Rs. 1,304 lakhs thereon
till the date of maturity (subject to deduction of withholding tax of Rs. 142 lakhs), the Board of Directors had, in

its meeting held on July 14, 2023, approved the issuance of up to 2,73,15,264, 10.75% Cumulative Redeemable
Non-Convertible Preference shares of Rs.10/- each at par aggregating Rs. 2,732 lakhs (“10.75% CRNCPS”), on
private placement basis to M/s Timex Group Luxury Watches B.V., the Holding Company of the Company, in
terms of Section 55(3) of the Companies Act, 2013 subject to approval of equity shareholders, the Hon’ble National
Company Law Tribunal (“NCLT”), Reserve Bank of India (“RBI”) and other authorities, as may be required. The
Members of the Company approved the issuance of 10.75% CRNCPS in their Annual General Meeting held on
August 23, 2023. Further, NCLT, Delhi Bench had, vide its Order dated June 07, 2024 read with Corrigendum dated
July 16, 2024, approved the said issuance. In respect of the Company’s application to RBI for seeking approval
for issuance of 10.75% CRNCPS, the Company had received a communication on September 20, 2024 from its
Authorised Dealer confirming that RBI had advised that the AD Bank might examine the proposal under delegated
powers by considering the date of fresh issuance as date of drawdown and is further advised to adhere to ECB
guidelines as per Master Direction on External Commercial Borrowings, Trade Credits and Structured Obligations
dated March 26, 2019 and updated from time to time. On October 25, 2024,after obtaining the Loan Registration
Number from RBI for the issuance of fresh 10.75% CRNCPS as External Commercial Borrowing and receipt of
share application form from M/s Timex Group Luxury Watches B.V., the Company allotted 10.75% CRNCPS and
the existing 13.88% CRNCPS were deemed to be redeemed with immediate effect in terms of Section 55 (3) of the
Companies Act, 2013. The above accumulated/ unpaid dividend payable of Rs. 1,304 lakhs has been accounted for
in retained earnings under Other Equity.

The maturity of the 10.75% CRNCPS would be 20 years from the date of allotment i.e. October 25, 2024, with an
option with either party for an early redemption anytime.

(c) The original maturity date for redemption of 2,29,00,000 13.88% cumulative redeemable non-convertible
preference shares amounting Rs. 2,290 lakhs was ten years from the date of allotment i.e. March 21, 2006, with
an option to the Company of an earlier redemption after March 21, 2008. These shares were due for redemption
on March 20, 2016 which pursuant to the provisions of Section 106 of the erstwhile Companies Act, 1956 was
extended by the Company with the consent of preference shareholders by five years i.e. till March 20, 2021 and
were further extended by another five years, i.e. till March 20, 2026.

(d) The Company has issued 3,50,00,000 5% cumulative redeemable non-convertible preference shares amounting Rs.
3,500 lakhs with maturity period of 10 years from the date of allotment i.e. February 16, 2017, with an option to the
Company of an earlier redemption after February 15, 2022.

(iv) The Board of Directors has, in its meeting held on May 6, 2025, recommended to the members dividend on two tranches
of preference shares i.e. (i) 0.09% non-cumulative redeemable non- convertible preference shares amounting to Rs.
0.23 lakhs for the FY 2024-25 and (ii) dividend on 13.88% cumulative redeemable non- convertible preference shares
amounting to Rs. 954 lakhs comprising of Rs. 318 lakhs each for the FY 2024-25, FY 2018-19 and FY 2019-20 to pay
off part of unpaid accumulated dividend out of available distributable profits for the FY 2024-25. These dividends will be
subject to the approval by the Members of the Company at its ensuing Annual General Meeting (“AGM”).

Also refer note 15 and 26 C

(i) For terms of repayments, interest rate and other disclosures - refer footnote (iii) (a) and (b) of note 11 B.

(ii) During the year, the Company has been availed multiline credit facilities aggregating Rs 2,200 Lakhs (Rs. 600 Lakhs against
stand by letter of credit and Rs. 1,600 Lakhs against security) from DBS Bank India Limited. Out of these facilities, the Company
has utilised cash credit facility aggregating Rs 378 Lakhs (March 31, 2024 Rs Nil) which is payable on demand. The interest rate
is in range of 9.10% - 9.35% p.a., payable on monthly basis. The Security terms for above are as given below:

1) First and exclusive hypothecation charge over current assets both present and future of the Company excluding those
exclusively financed by other Banks/lenders and 2) First and exclusive hypothecation charge over movable fixed assets
both present and future of the Company excluding those exclusively financed by other Banks/lenders and 3) Mortgage on
immovable property being land comprising of Plot No-10, area measuring 10,000 sq mtrs situated at apparel park cum
industrial area, khata Bhatoli , Baddi, District Solan, Himachal Pradesh together with all buildings and structures thereon
and fixtures, fittings and all plant and machinery attached to the earth or permanently fastened to anything attached to the
earth, both present and future, of the Company.

(iii) Overdraft facilities from JP Morgan Chase Bank N.A. bank carry interest ranging between 9.05% to 9.95% p.a (PY: 9.11% to
10.54% p.a)., computed on a monthly basis on actual amount utilised, and are repayable on demand. The overdraft facilities are
backed through Standby Letter of Credit (SBLC) of Rs. 1,100 lakhs by Timex Group USA, Inc. , a fellow subsidiary company.

(i) The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax
assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied
by the same tax authority.

(ii) On 29th November 2019 the Company has signed Unilateral Advance Pricing Agreement (APA) with the Central
Board of Direct Taxes, Department of Revenue, Ministry of Finance, Government of India wherein the Company
has agreed on the methodology to be followed for determining the Arm’s Length Price of the transactions covered
by the agreement. The Company has complied with the details mentioned in the agreement and has filed compliance
report with the authorities on 26th February 2020. The above disclosure has been considered after effect of APA,
however the compliance report filed by the Company are yet to be audited / verified by the authorities.

The amounts shown above represents the best possible estimates arrived at on the basis of available information. The
uncertainties and possible reimbursements are dependent on the outcome of the different legal processes which have
been invoked by the Company or the claimants as the case may be and therefore cannot be predicted accurately or relate
to a present obligations that arise from past events where it is either not probable that an outflow of resources will be
required to settle or a reliable estimate cannot be made. The Company engages reputed professional advisors to protect
its interests and has been advised that it has strong legal positions against such disputes.

(ii) Other Money for which the company is contingently liable

The Hon’ble Supreme Court of India vide its judgement dated February 28, 2019 and subsequent review petition has
ruled in respect of compensation for the purpose of Provident Fund contribution under the Employee’s Provident Fund
Act, 1952.

There is significant uncertainty as to how the liability, if any, should be calculated for the period up to February 28, 2019
as it is impacted by multiple variables, including the period of assessment, the application with respect to certain current
and former employees and whether the interest and penalties may be assessed. The Management have determined that
on account of the practicality of application of the judgement, the Company would not be in a position to determine the
liability as of now, The Company is of the opinion that the amount cannot be reasonably estimated.

As a matter of caution, the Company has started comply the above provision on prospective basis from the date of such
ruling i.e. March 1, 2019.

B Commitments

(i) The estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. 73

Lakhs (2024: Rs. 3 Lakh).

(ii) The Company has other commitments, for purchases / sales orders which are issued after considering requirements
as per operating cycle for purchase / sale of goods and services, employee benefits. The Company does not have
any long term contracts including derivative contracts for which there will be any material foreseeable losses.

C Arrears of fixed cumulative dividends on preference shares (from financial year 2018-19) as at March 31, 2025 - Rs. 3,451 lacs
(as at March 31, 2024 - Rs. 4,266 lacs). Out of these arrears of dividends, the Board of Directors has, in its meeting held on May
6, 2025, recommended to the members dividend on 22,900,000 13.88% cumulative redeemable non- convertible preference
shares amounting to Rs. 954 lakhs comprising of Rs. 318 lakhs each for the FY 2024-25, FY 2018-19 and FY 2019-20 to pay off
part of unpaid accumulated dividend out of available distributable profits for the FY 2024-25. These dividends will be subject to
the approval by the Members of the Company at its ensuing Annual General Meeting (“AGM”).

Footnote

The dividend liability on 15,700,000 2.9% cumulative redeemable non-convertible preference shares of Rs. 10 each {redeemed
during the year, refer footnote (ii) (b) of 11.B (iii)} and 22,900,000 5.4% cumulative redeemable non-convertible preference
shares of Rs. 10 each, payable until 31 March 2009, was waived off as per the consent of the holders of these preference shares
vide their letter dated 15 March 2009. The coupon rate applicable to these series of preference shares was revised to 7.1%
effective 1 April 2009 till the date of maturity. The holders of these preference shares have further waived the dividend for the
years 2012-13, 2013-14, 2014-15 and 2015-16, subject to the condition that the coupon rate for these series shall be revised from
7.1% to 13.88%. During the financial year 2016-17, the Company obtained relevant approvals from the regulatory authorities
and the coupon rate applicable to these series of preference shares was revised to 13.88% effective 1 April 2016 till the date of
maturity. Further, the holders of these preference shares have waived the dividend for the financial years 2016-17 and 2017-18.
The dividend liability on 35,000,000 5% cumulative redeemable non-convertible preference shares of Rs. 10 each payable until

(i) Superannuation fund

The Company’s contribution paid/ payable under the scheme to the Superannuation Fund Trust, as administered by the
Company is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders
the related service. The trustees of the scheme have entrusted the administration of the trust scheme to Life Corporation of
India Limited (LIC).

(ii) Provident fund

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees
towards Provident Fund to Timex Watches Provident Fund and Recognised Provident Fund. The contributions are charged to
the statement of Profit and Loss as they accrue. Further, the Company is liable to pay to the provident fund to the extent of the
amount contributed and any shortfall in the fund assets based on Government specified minimum rates of return relating to
current services. The Company recognises such contribution and shortfall if any as an expense in the year incurred.

(iii) Employee State Insurance fund

The Company’s contribution paid/ payable under the scheme to the Employee State Insurance is recognised as an expense
in the Statement of Profit and Loss during the period in which the employee renders the related service.

28.2 Defined benefit plans

Gratuity- The Company provides for gratuity for employees as per the Payment of Gratuity Act 1972. The Company operates a
post-employment defined benefit plan that provides for gratuity. The gratuity plan entitles an employee, who has rendered at least
five years of continuous service, to receive one-half month’s salary for each year of completed service at the time of retirement/
exit. The Scheme is not funded by plan assets.

(i) These plans typically expose the company to actuarial risks such as investment risk, interest rate risk, longevity risk
and salary risk.

Investment Risk

The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

Salary Risk

The present value of defined benefit plan is calculated with the assumption of salary increase rate of plan participants
in future. Deviation in rate of increase in salary in future for plan participants from the rate of increase in salary used to
determine the present value of obligation will have a bearing on the plan’s liability.

Interest Risk

The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the
ultimate cost of providing the above benefit and will thus result in an increase in value of the liability.

Longevity Risk

The present value of defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan
participants both during and after employment. An increase in the life expectancy of the plan participants will increase the
plans liability.

to contain, where deemed appropriate, exposures on net basis to the various types of financial risks mentioned above in order to
limit any negative impact on the Company’s results and financial position.

31.3.1 Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in
market prices. The company is exposed to foreign exchange risk arising through its sales and purchases denominated in
various foreign currencies.

Foreign Currency Risk Management

Foreign currency risk also known as Exchange Currency Risk is the risk that the fair value or future cash flows of an
exposure will fluctuate because of changes in foreign exchange rates. Foreign currency risk in the Company is attributable
to Company’s operating activities and financing activities.

In the operating activities, the Company’s exchange rate risk primarily arises when revenue / costs are generated in
a currency that is different from the reporting currency (transaction risk). The information is monitored by the Audit
committee and the Board of Directors on a quarterly basis. This foreign currency risk exposure of the Company are mainly
in U.S. Dollar (USD). The Company’s exposure to foreign currency cha

---

Mar 31, 2024

The Company uses expected credit loss model to assess the impairment loss or gain. The Company has used a practical expedient by computing the allowance for bad and doubtful debts for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information. The allowance for bad and doubtful debts is based on the ageing of the days the receivables are due and the rates as given in provision matrix and Company’s historical experience for customers.

Notes

(i) The credit period allowed generally varies on sales, on case to case basis, channel to channel and on market conditions.

Terms/ rights attached to equity shares :

‘The Company has only one class of equity shares having a par value of Re. 1 (absolute amount) per share. Each holder of equity shares is entitled to one vote per share. All equity shareholders rank equally with regard to dividends and share in the Company’s residual assets. The equity shareholders are entitled to receive dividend as declared by the Company subject to payment of dividend to preference shareholders.

‘In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Rights, preferences and restrictions attaching to each class of shares including restrictions on the distribution of dividends and the repayment of capital:

Preference shares of all classes carry a preferential right as to dividend over equity shares. Where dividend on cumulative preference shares is not declared for a financial year, the entitlement thereto is carried forward whereas in the case of noncumulative preference shares, the entitlement for that year lapses. The preference shares are entitled to one vote per share at meetings of the Company on any resolutions of the Company directly affecting their rights. In the event of liquidation, preference shareholders have a preferential right over equity shareholders to be repaid to the extent of capital paid-up and dividend in arrears on such shares.

Also refer Note 26.A.b for arrears of fixed cumulative dividends on redeemable non-convertible preference shares.

The preference shareholders, vide their letter dated March 31, 2020, have relinquished their voting rights accrued/accruing on the preference shares in terms of second proviso to section 47(2) of the Companies Act, 2013 due to non-payment of dividend till date or during the remaining tenure of preference shares.

During the year 2017-2018, the holders of preference share capital had waived off the dividend for the financial years 201617 and 2017-2018. The Company had obtained relevant approval from the holders of preference shares and regulatory authority for the waiver of dividend up to FY 2017-18 and extension of maturity of above preference shares.

(a) The original maturity date for redemption of 1,57,00,000 13.88% cumulative redeemable non-convertible preference shares amounting Rs. 1,570 lakhs was ten years from the date of allotment i.e. March 27, 2004, with an option to the Company of an earlier redemption after March 27, 2006. These shares were due for redemption on March 26, 2014 which pursuant to the provisions of Section 106 of the erstwhile Companies Act, 1956 was extended by the Company with the consent of preference shareholders by five years i.e. till March 26, 2019 and were further extended by another five years, i.e. till March 26, 2024 (the date of maturity).

The Company has accumulated losses and does not have sufficient distributable profits for redemption of the 13.88% cumulative redeemable non-convertible preference shares (“13.88% CRNCPS”) and accumulated/unpaid dividend thereon. Accordingly, for the purpose of redemption of these preference shares aggregating Rs. 1,570 lakhs along with accumulated/ unpaid dividend of Rs. 1,304 lakhs thereon till the date of maturity (subject to deduction of withholding tax of Rs. 142 lakhs), the Board of Directors has, in its meeting held on July 14, 2023, approved the issuance of up to 2,73,15,264, 10.75% Cumulative Redeemable Non-Convertible Preference shares of Rs.10/-each at par aggregating Rs. 2,732 lakhs (“10.75% CRNCPS”), on private placement basis to M/s Timex Group Luxury Watches B.V., the holding company of the Company, in terms of Section 55(3) of the Companies Act, 2013 subject to approval of equity shareholders, Hon’ble National Company Law Tribunal, Reserve Bank of India and other authorities, as may be required. The tenure of the 10.75% CRNCPS would be 20 years, with an option with either party for an early redemption anytime. The Members of the Company have approved this matter in their Annual General Meeting held on August 23, 2023 and the Company has filed an application dated October 19, 2023 with Hon’ble National Company Law Tribunal, Delhi Bench for their approval on the above matter. Hon’ble National Company Law Tribunal has completed the hearing on this matter on February 2, 2024 and reserved the Order on this matter. The Order is still awaited. Further, the Company has filed an application with Reserve Bank of India for approval of issuance of 10.75% CRNCPS as External Commercial Borrowings and is awaiting further communication on the same.

(b) The original maturity date for redemption of 2,29,00,000 13.88% cumulative redeemable non-convertible preference shares amounting Rs. 2,290 lakhs was ten years from the date of allotment i.e. March 21, 2006, with an option to the Company of an earlier redemption after March 21, 2008. These shares were due for redemption on March 21, 2016 which pursuant to the provisions of Section 106 of the erstwhile Companies Act, 1956 was extended by the Company with the consent of preference shareholders by five years i.e. till March 21, 2021 and were further extended by another five years, i.e. till March 20, 2026.

(c) The Company has issued 3,50,00,000 5% cumulative redeemable non-convertible preference shares amounting Rs. 3,500 lakhs with maturity period of 10 years from the date of allotment i.e. February 16, 2017, with an option to the Company of an earlier redemption after February 15, 2022.

(i) 25,00,000 0.09% Non-cumulative redeemable non-convertible preference shares (0.09% NCR-NCPS) issued and allotted on November 22, 2022 on private placement basis for the purpose of redemption of 25,00,000 0.1% Non-Cumulative Redeemable Non-Convertible Preference Shares of Rs.10/- each (0.1% NCR-NCPS), which were due for redemption on March 24, 2023.

The original maturity date for redemption of 0.1% NCR-NCPS was ten years from the date of allotment i.e. March 25, 2003, with an option to the Company of an earlier redemption after March 24, 2005. These shares were due for redemption on March 24, 2013 which pursuant to the provisions of section 106 of the erstwhile Companies Act, 1956 was extended by the Company with the consent of preference shareholders by five years, i.e. till March 24, 2018 and further extended by another five years, i.e. till March 24, 2023. These 0.1% NCR-NCPS were redeemed on November 23, 2022.

The maturity date for redemption of 0.09% NCR-NCPS is five years from the date of allotment i.e. November 22, 2027, with an option with either party for an early redemption at any time. The Company has designated these preference shares as financial liabilities at FVTPL as permitted by Ind AS 109. As on date of issuance, the present value of differential between the market interest rate and actual interest rate amounting Rs. 89 lakhs are classified as deemed equity contribution.

During the year, no dividends was paid on these redeemable non-cumulative preference shares.

(ii) Cash credit facilities from banks carry interest ranging between 9.11% to 10.54% p.a (PY: 6.14% to 10.54% p.a)., computed on a monthly basis on actual amount utilised, and are repayable on demand. The cash credit facilities are backed through Standby Letter of Credit (SBLC) by Tanager Group B.V. (formerly known as Timex Group B.V.), an intermediate holding company.

Dues To micro enterprises and small enterprises

Trade payables include the following dues to micro and small enterprises covered under “The Micro, Small and Medium Enterprises Development Act, 2006” (MSMED) to the extent such parties have been identified on the basis of intimation received from the “suppliers” regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006.

(i) The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.

(ii) On March 31, 2023, considering the fact that the Company was making taxable profits in the recent years owing to improvements in business conditions and financial performance, the Company recognised deferred tax assets amounting Rs. 1,684 lakhs (including Rs. 1,010 lakhs in respect of unabsorbed depreciation) in the financial statements for the year ended March 31, 2023 as it is considered probable that future taxable profits will be available

(iii) On 29^th November 2019 the Company has signed Unilateral Advance Pricing Agreement (APA) with the Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, Government of India wherein the Company has agreed on the methodology to be followed for determining the Arm’s Length Price of the transactions covered by the agreement. The Company has complied with the details mentioned in the agreement and has filed compliance report with the authorities on 26 ^th February 2020. The above disclosure has been considered after effect of APA, however the compliance report filed by the Company are yet to be audited / verified by the authorities.

26 CONTINGENT LIABILITIES AND COMMITMENTS
	As at March 31, 2024	As at March 31, 2023
A Contingent Liabilities a. Claims against the Company not acknowledged as debts:
Sales tax	452	144
Income tax	465	465
Customs Duty	124	124
Others- Pricing Claims / Vendor Claims	268	550
b. Dividend on cumulative preference shares*
2012-13 to 2017-18	-	-
2018-19	711	711
2019-20	711	711
2020-21	711	711
2021-22	711	711
2022-23	711	711
2023-24	711	-
Corporate dividend tax on cumulative preference shares*
2012-13 to 2017-18	-	-
2018-19	-	-
2019-20	-	-
2020-21	-	-
2021-22	-	-
2022-23	-	-
2023-24	-	-

The dividend liability on 15,700,000 2.9% cumulative redeemable non-convertible preference shares of Rs. 10 each and 22,900,000 5.4% cumulative redeemable non-convertible preference shares of Rs. 10 each, payable until 31 March 2009, was waived off as per the consent of the holders of these preference shares vide their letter dated 15 March 2009. The coupon rate applicable to these series of preference shares was revised to 7.1% effective 1 April 2009 till the date of maturity. The holders of these preference shares have further waived the dividend for the years 2012-13, 2013-14, 2014-15 and 2015-16, subject to the condition that the coupon rate for these series shall be revised from 7.1% to 13.88%. During the financial year 2016-17, the Company obtained relevant approvals from the regulatory authorities and the coupon rate applicable to these series of preference shares was revised to 13.88% effective 1 April 2016 till the date of maturity. Further, the holders of these preference shares have waived the dividend for the financial years 2016-17 and 2017-18. The dividend liability on 35,000,000 5% cumulative redeemable non-convertible preference shares of Rs. 10 each payable until 31 March 2018, was waived off as per the consent of the holders of these preference shares vide their letter dated 22 February 2018.

Thus there is no outstanding dividend on cumulative preference shares as at March 31, 2018. Also refer Note 11.B. c. The amounts shown above represents the best possible estimates arrived at on the basis of available information. The uncertainties and possible reimbursements are dependent on the outcome of the different legal processes which have been invoked by the Company or the claimants as the case may be and therefore cannot be predicted accurately or relate to a present obligations that arise from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate cannot be made. The Company engages reputed professional advisors to protect its interests and has been advised that it has strong legal positions against such disputes.

B Commitments

a. The estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. 3 Lakhs (2023: Rs. 30 Lakh).

C The Company has other commitments, for purchases / sales orders which are issued after considering requirements as per operating cycle for purchase / sale of goods and services, employee benefits. The Company does not have any long term contracts including derivative contracts for which there will be any material foreseeable losses.

D There are no amount due for payment to the Investor Education and Protection Fund under Section 125(1) of the Companies Act, 2013

E The Hon’ble Supreme Court of India vide its judgement dated February 28, 2019 and subsequent review petition has ruled in respect of compensation for the purpose of Provident Fund contribution under the Employee’s Provident Fund Act, 1952.

There is significant uncertainty as to how the liability, if any, should be calculated for the period up to February 28, 2019 as it is impacted by multiple variables, including the period of assessment, the application with respect to certain current and former employees and whether the interest and penalties may be assessed. The Management have determined that on account of the practicality of application of the judgement, the Company would not be in a position to determine the liability as of now, The Company is of the opinion that the amount cannot be reasonably estimated.

As a matter of caution, the Company has made a provision on prospective basis from the date of such ruling i.e. March 1, 2019.

1. Sale and purchase of goods and services to and from related parties and other transactions with related parties were made at arms length price.

2. All outstanding balances are unsecured and are repayable in cash. No expense has been recognised in the current or prior years for bad and doubtful debts in respect of amounts owed by related parties.

3. Tanager Group B.V. (formerly known as Timex Group B.V.), an intermediate holding company, has provided Standby Letter of Credit (SbLc) amounting to Rs. 3,780 lakhs as on March 31, 2024 (2023: Rs. 4,780 lakhs) (including unfunded limit) to the bankers of the Company for use of cash credit and overdraft facilities (including working capital loans).

The expenses incurred on account of the above defined contribution plans have been included in Note 21 “Employee Benefits Expenses” under the head “Contribution to provident and other funds

(i) Superannuation fund

The Company’s contribution paid/ payable under the scheme to the Superannuation Fund Trust, as administered by the Company is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service. The trustees of the scheme have entrusted the administration of the trust scheme to Life Corporation of India Limited (LIC).

(ii) Provident fund

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Provident Fund to Timex Watches Providend Fund and Recognised Providend Fund. The contributions are charged to the statement of Profit and Loss as they accrue.

(iii) Employee State Insurance fund

The Company’s contribution paid/ payable under the scheme to the Employee State Insurance is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.

28.2 Defined benefit plans

Gratuity- The Company provides for gratuity for employees as per the Payment of Gratuity Act 1972. The Company operates a post-employment defined benefit plan that provides for gratuity. The gratuity plan entitles an employee, who has rendered at least five years of continuous service, to receive one-half month’s salary for each year of completed service at the time of retirement/ exit. The Scheme is not funded by plan assets.

(i) These plans typically expose the company to actuarial risks such as investment risk, interest rate risk, longevity risk and salary risk.

Investment

The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

Salary Risk

The present value of defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in rate of increase in salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan’s liability.

Interest Risk

The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in value of the liability.

Longevity Risk

The present value of defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after employment. An increase in the life expectancy of the plan participants will increase the plans liability.

The cost of the defined benefit plans and other long term benefits are determined using actuarial valuations. An actuarial valuations involves making various assumptions that may differ from actual developments in the future. These includes the determination of the discount rate, future salary increases and mortality rate. Due to these complexity involved in the valuation it is highly sensitive to the changes in these assumptions. All assumptions are reviewed at each reporting date. The present value of the defined benefit obligation and the related current service cost and planned service cost were measured using the projected unit cost method.

(viii) The average duration of the defined benefit obligation is 8 years. The expected cash out flow during the next financial year is Rs. 111 Lakhs.

(ix) Sensitivity Analysis

Significant actuarial assumptions for the determination of the defined obligation are discount rate and expected salary increase. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of reporting period, while holding all other assumptions constant.

28.4 Long Term incentive

On July 04, 2022, pursuant to the approval by the Board of Directors, the Company has approved Long Term Incentive Plan (LTIP) to eligible employees of the Company dependent on the Company performance over next 3 years. The Company has considered the same as Other long term employee benefits and accordingly has recorded the liability through actuarial valuation. The Discount rate used is 7.11%.

29 SEGMENT REPORTING

The Company is primarily in the business of manufacturing and trading of watches and rendering of related after sales service (“Watches”). The other activities of the Company comprises of providing information & technology support services to the group companies. The income from these other activities is not material in financial terms. The Managing Director of the Company, who has been identified as being the chief operating decision maker (CODM), evaluates the Company’s performance, allocate resources based on the analysis of the various performance indicators of the Company as a single unit. Therefore there is no reportable segment of the Company.

31 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT 31.1 Capital Management

The Company manages its capital to ensure that it will be able to continue as a going concern and provide reasonable return to the shareholders through maintaining reasonable balance between debt and equity. The capital structure of the Company consists of net debt (borrowings net of cash and cash equivalents) and total equity of the Company. Holding Company has infused capital by way of preference shares as and when needed. The Company’s management reviews the capital structure of the Company on a periodic basis. As part of review, the management considers the cost of capital and risk associated with each class of capital {refer note l.B.(xviii)}.

31.3 Financial Risk Management

The Board of directors has approved risk management policy which provides framework to identify, evaluate business risk and challenges across the company. The company has constituted risk management committee of senior management team. These policies and guidelines cover foreign currency risk, credit risk and liquidity risk. The objective of financial risk management is to contain, where deemed appropriate, exposures on net basis to the various types of financial risks mentioned above in order to limit any negative impact on the Company’s results and financial position.

31.3.1 Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. The company is exposed to foreign exchange risk arising through its sales and purchases denominated in various foreign currencies.

Foreign Currency Risk Management

Foreign currency risk also known as Exchange Currency Risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. Foreign currency risk in the Company is attributable to Company’s operating activities and financing activities.

In the operating activities, the Company’s exchange rate risk primarily arises when revenue / costs are generated in a currency that is different from the reporting currency (transaction risk). The information is monitored by the Audit committee and the Board of Directors on a quarterly basis. This foreign currency risk exposure of the Company are mainly in U.S. Dollar (USD). The Company’s exposure to foreign currency changes for all other currencies is not material.

Foreign currency risk exposure

The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting periods expressed in Rs., are as follows:

The Company does not enter into or trade financial instrument including derivative financial instruments for speculative purpose. Foreign currency sensitivity analysis The Company is mainly exposed to USD.

The following table details the Company’s sensitivity to a 1% increase and decrease in the Rs. against the relevant foreign currency. The sensitivity analysis includes only outstanding foreign currency denominated monetary items as tabulated above and adjusts their translation at the period end for 1% change in foreign currency rates. A positive number below indicates an increase in profit before tax or vice-versa.

31.3.2 Credit Risk Management

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks, foreign exchange transactions and other financial instruments.

Credit risk has always been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in normal course of business. On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss. Refer note 8 for the disclosures for trade receivables.

31.3.3 Liquidity Risk Management

The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and by matching the maturity profiles and realisation of financial assets with the liabilities. The company expects to meet its other obligations from operating cash flows and proceeds of maturing financial assets.

32 LEASES

DISCLOSURES AS REQUIRED UNDER IND AS 116:

The Company has entered into various lease agreements for acquiring space to do its day to day operations. Such lease contracts include monthly fixed payments for rentals. The lease contracts are generally cancellable at the option of lessee during the lease tenure. The Company also have a renewal option after the expiry of contract terms. There are no significant restrictions imposed under the lease contracts.

The Company has entered into a lease agreement of 95 years for its factory land located in Baddi which is operational. The lease contract amount is fully paid and there are no significant restrictions imposed under the lease contracts. Earlier these contracts were recorded as operating lease and now these have been accounted as Right of Use assets under Ind AS 116.

Lease commitments

Where the Company is a lessee/licensee

The Company has entered into various lease/license agreements for leased/licensed premises, which expire at various dates over the next nine years. There are no contingent lease/license fees payments. The details of the contractual maturities of lease liabilities as at March 31, 2024 on an undiscounted basis are as follows :

Expense relating to short term leases with lease term of less than 1 year during the financial year is Rs. 24 Lakhs (year ended March 31, 2023: 24 lakhs).

Expense relating to low value assets with long term lease period during the financial year is Rs. NIL.

There are no sale and lease back transactions. There are no sub leases of right of use assets

(1) Debt represents only short-term borrowings

(2) Earnings available for debt service = Net Profit after taxes Non-cash operating expenses Interest other adjustments like loss on sale of Fixed assets etc.

(3) Debt Service = Short-term debts and Interest on borrowings

(4) Working Capital = Current Assets - Current Liabilities

(5) Capital Employed = Tangible net worth Debts

34 No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries).

35 The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.”

36 Transfer Pricing

The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing regulation under sections 92-92F of the Income-tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company continuously updates its documentation for the international transactions entered into with the associated enterprises during the financial year and expects such records to be in existence latest by such date as required under law. The management is of the opinion that its international transactions are at arm’s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

37 The Code on Social Security 2020 has been notified in the Official Gazette on September 29, 2020. The effective date from which the changes are applicable is yet to be notified and the rules are yet to be framed. Impact if any of the change will be assessed and accounted in the period in which said Code becomes effective and the rules framed thereunder are published.

38 The Company does not have any immovable properties [other than properties (including buildings constructed there on included in Property, plant and Equipment disclosed in the financial statement) where the Company is the lessee, and the lease agreements are duly executed in favour of the lessee].

39 No proceedings have been initiated during the year or are pending against the Company as at 31 March 2024 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

40 The Company is not a declared wilful defaulter by any bank or financial institution or other lender.

41 The Company has no borrowings from banks or financial institutions on the basis of security of current assets.

42 There are no charges or satisfaction yet to be registered by the Company with ROC beyond the statutory period..

43 The Company has not entered into transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 2013.

44. Ministry of Corporate Affairs (MCA) vide its notification number G.S.R. 206(E) dated March 24, 2021 (amended from time to time) in

reference to the proviso to Rule 3 (1) of the Companies (Accounts) Amendment Rules, 2021, introduced the requirement of only using such accounting software w.e.f. April 01, 2023 which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in the books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled. The Institute of Chartered Accounts of India (“ICAI”) issued an “Implementation guide on reporting on audit trail under rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (Revised 2024 edition)” in February 2024 relating to feature of recording audit trail.

The Company uses Oracle R12 EBS as its primary accounting software for recording all the accounting transactions and maintaining its books of account for the year ended March 31, 2024. Oracle R12 EBS has a feature of recording audit trail (edit log) facility which has not been enabled throughout the year.

In respect of maintaining payroll records, the Company uses an accounting software operated by a third party software service provider. Based on the independent service auditor’s report which includes the requirements of audit trail, the said software has a feature of recording audit trail (edit log) facility and the same has operated throughout the year. Further, no instance of audit trail feature being tampered with has been reported in such auditor’s report.

The Management has adequate internal controls over financial reporting which were operating effectively for the year ended March 31, 2024. The Management is in the process of evaluating the options to ensure compliance with the requirements of proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 referred above in respect of audit trail.

45. “As per the MCA notification dated August 05, 2022, the Central Government has notified the Companies (Accounts) Fourth Amendment Rules, 2022. As per the amended rules, the Companies are required to maintain back-up on daily basis of such books of account and other relevant books and papers maintained in electronic mode that should be accessible in India at all the time. Also, the Companies are required to create backup of accounts on servers physically located in India on a daily basis.

The books of account along with other relevant records and papers of the Company are maintained in electronic mode. These are readily accessible in India at all times however backup is not maintained in India and is presently maintained in servers in Singapore.”

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Mar 31, 2023

(xii) Provisions and Contingent Liabilities Provisions

The Company recognises a provision when there is a present obligation (legal or constructive) as a result of past event and it is probable that the Company will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursements will be received and the amount of receivable can be measured reliably.

Provision for Warranties:

A provision is estimated for expected warranty claims in respect of products sold during the year on the basis of past experience regarding failure

trends of products and costs of rectification or replacement. It is expected that most of this cost will be incurred over the next one year as per warranty terms. Management estimates the provision based on historical warranty claim information and any recent trends that may suggest future claims could differ from historical amounts.

Contingent liability

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.

(xiii) Revenue recognition

The Company recognises revenue when the control of goods being sold is transferred to the customer and when there are no longer any unfulfilled obligations. The performance obligations in the contracts are fulfilled based on various customer terms including at the time of delivery of goods, dispatch or upon customer acceptance based on various distribution channels. The Company has generally concluded that it is the principal in its revenue arrangements, because it typically controls the goods or services before transferring them to the customer.

Revenue recognised from major business activities:

a) Sale of products

Revenue from the sale of products is recognised at the point in time when control of the goods is transferred to the customer and in case of export sales of goods, it takes place on dispatch of goods from the customs port.

Revenue is measured based on the transaction price, which is the consideration, net of customer incentives, discounts, variable considerations, payments made to customers, other similar charges, as specified in the contract with the customer. Additionally, revenue excludes taxes collected from customers, which are subsequently remitted to governmental authorities.

The Contract assets and contract liabilities are recognised basis its estimate of return on historical results, taking into consideration

the type of customer, the type of transaction and the specifics of each arrangement.

b) Rendering of services

Revenue from a contract to provide services is recognised over the period of rendering of services.

c) Interest income

Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable.

(xiv) Taxation

Income tax expense represents the sum of the tax

currently payable and deferred tax.

a) Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from ‘profit before tax’ as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company’s current tax is calculated accordance with the Income-tax Act, 1961, using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities.

Current tax is recognised in the statement of profit and loss, except when it relates to items that are recognised in other comprehensive income or directly in equity, in which case, the current tax is also recognised in other comprehensive income or directly in equity respectively.

b) Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax

bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax is recognised in the statement of profit and loss, except when it relates to items that are recognised in other comprehensive income or directly in equity, in which case, the deferred tax is also recognised in other comprehensive income or directly in equity respectively.

c) Current and deferred tax for the year

Current and deferred tax are recognised in the statement of profit and loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively.

(xv) Employee benefits

Short-term employee benefits

All short-term employee benefits such as salaries, wages, bonus, medical benefits, etc. which fall within 12 months of the period in which the employee renders related services which entitles them to avail such benefits and non-accumulating compensated absences are recognised on an undiscounted basis and charged to the statement of profit and loss.

Defined contribution plan

Provident fund, superannuation fund and employee’s state insurance are the defined contribution schemes offered by the Company. The contributions to these schemes are charged to statement of profit and loss of the year in which contribution to such schemes becomes due on the basis of services rendered by the employees.

Defined benefit plan

Charge for the year in respect of unfunded defined benefit plan in the form of gratuity has been ascertained based on actuarial valuation carried out by an independent actuary as at the year end using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation is measured at the present value of the estimated future cash flows. The discount rate used for determining the present value of the obligation under defined benefit plans is based on the market yields on Government securities as at the valuation date having maturity periods approximating to the terms of related obligations. Actuarial gains and losses are recognised immediately in Other Comprehensive Income. Remeasurement recognised in other comprehensive income is reflected in retained earnings and is not reclassified to the statement of profit and loss.

Compensated absences

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are recognised as an actuarially determined liability at the present value of the defined benefit obligation at the balance sheet date.

(xvi) Earnings per share

Basic earnings per share is calculated by dividing

the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. The number of shares used in computing diluted earnings per share comprise of the weighted average shares considered for deriving basic earnings per equity share and weighted average number of equity shares, if any, which would have been issued on the conversion of all dilutive potential equity shares unless the impact is anti-dilutive. Dilutive potential equity shares are deemed converted as of the beginning of the period unless issued at a later date.

(xvii) Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

(xviii) Financial instruments

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial assets and liabilities are initially recognised at fair value. Transaction costs that are directly attributable to financial assets and liabilities [other than financial assets and liabilities measured at fair value through profit and loss (FVTPL)] are added to or deducted from the fair value of the financial assets or liabilities, as appropriate on initial recognition. Transaction costs directly attributable to acquisition of financial assets or liabilities measured at FVTPL are recognised immediately in the statement of profit and loss.

Financial assets

All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in market place.

All recognised financial assets are subsequently

measured in their entirety at either amortised cost or fair value, depending on the classification of financial assets.

(a) Classification of financial assets

i. Financial assets at amortised cost

A financial asset is measured at amortised cost if both of the following conditions are met:

a. the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and;

b. the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

Effective interest method:

The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

Income is recognised on an effective interest basis for debt instruments other than those financial assets. Interest income is recognised in the statement of profit and loss and is included in the ‘Other income’ line item.

ii. Investments in equity instruments at Fair Value Through Other Comprehensive Income (FVTOCI)

On initial recognition, the Company can make an irrevocable election (on an instrument-by instrument basis) to present the subsequent changes in fair value in other comprehensive income pertaining to investments in equity instruments. This election is not permitted if the equity investment is held for trading. These elected investments are initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value

recognised in other comprehensive income and accumulated in the ‘Reserve for equity instruments through other comprehensive income’. The cumulative gain or loss is not reclassified to the statement of profit and loss on disposal of the investment.

A financial asset is held for trading if:

- it has been acquired principally for the purpose of selling it in the near term; or

- on initial recognition it is part of a portfolio of identified financial instruments that the Company manages together and has a recent actual pattern of short-term profittaking; or

- it is a derivative that is not designated and effective as a hedging instrument or a financial guarantee.

Currently, the Company does not have any investments in equity instruments which are held for trading and therefore none of the instruments are designated FVTOCI.

iii. Investments in equity instruments at Fair Value Through Profit or loss (FVTPL)

Investments in equity instruments are classified at FVTPL, unless the Company irrevocably elects on initial recognition to present subsequent changes in fair value in other comprehensive income for investments in equity instruments which are not held for trading.

A financial asset that meets the amortised cost criteria may be designated at FVTPL upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities or recognising the gains and losses on them on different bases.

Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising on remeasurement recognised in statement of profit and loss. The net gain or loss recognised in the statement of profit and loss incorporates any dividend or interest earned on the financial asset and is included

in the ‘Other income’ line item. Dividend on financial assets at FVTPL is recognised when the Company’s right to receive the dividends is established, it is probable that the economic benefits associated with the dividend will flow to the entity, the dividend does not represent a recovery of part of cost of the investment and the amount of dividend can be measured reliably

(b) Impairment of financial assets

The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through statement of profit or loss.

The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as given in provision matrix and Company’s historical experience for customers. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to life time ECL.

For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognised is recognized as an impairment gain or loss in the statement of profit and loss.

(c) Derecognition of financial assets

A financial asset is derecognised only when:

- The Company has transferred the rights to receive cash flows from the financial asset or

- retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.

When the entity has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognised. Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognised.

Where the entity has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the financial asset, the financial asset is derecognised if the Company has not retained control of the financial asset. When the Company retains control of the financial asset, the asset is continued to be recognised to the extent of continuing involvement in the financial asset.

(d) Foreign exchange gains and losses

The fair value of financial assets denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of each reporting period. For foreign currency denominated financial assets measured at amortised cost and FVTPL, the exchange differences are recognised in statement of profit and loss except for those which are designated as hedging instruments in a hedging relationship. For the purposes of recognising foreign exchange gains and losses, FVTOCI debt instruments are treated as financial assets measured at amortised cost. Thus, the exchange differences on the amortised cost are recognised in the statement of profit and loss and other changes in the fair value of FVTOCI financial assets are recognised in other comprehensive income.

Financial Liabilities including equity instruments

Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

(a) Equity Instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments

issued by the Company are recognised at the proceeds received, net of direct issue costs.

(b) Financial liabilities

All financial liabilities are subsequently measured at amortised cost using the effective interest method or at FVTPL.

i. Financial liabilities at FVTPL

Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in statement of profit and loss. The net gain or loss recognised in statement of profit and loss incorporates any interest paid on the financial liability and is included in the ‘Other income’ or ‘Other expenses’ line item.

ii. Financial liabilities subsequently measured at amortised cost

Financial liabilities that are not held-for-trading and are not designated as at FVTPL are measured at amortised cost at the end of subsequent accounting periods. The carrying amounts of financial liabilities that are subsequently measured at amortised cost are determined based on the effective interest method.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

(c) Compound financial instruments

The component parts of compound financial instruments (preference shares) issued by the Company are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument. The repayment of the preference shares will be settled by the exchange of a fixed amount of cash is liability component.

At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for similar instruments. This

amount is recognised as a liability on an amortised cost basis using the effective interest method until extinguished upon repayment.

The dividend portion classified as equity is determined by deducting the amount of the liability component from the fair value of the compound financial instrument as a whole. This is recognised and included in equity, net of income tax effects, and is not subsequently remeasured. In addition, the dividend portion classified as equity will remain in equity until repaid, in which case, the balance recognised in equity will be transferred to other component of equity. Refer note 1.C.(i).(b)

(d) Foreign exchange gains and losses

For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments and are recognised in the statement of profit and loss.

The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. For financial liabilities that are measured as at FVTPL, the foreign exchange component forms part of the fair value gains or losses and is recognised in the statement of profit and loss.

(e) Derecognition of financial liabilities

The Company derecognises financial liabilities when, and only when, the Company’s obligations are discharged, cancelled or have expired. An exchange between with a lender of debt instruments with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.

(xix) Fair value measurement

The Company measures financial instruments at fair value at each balance sheet date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

a) In the principal market for the asset or liability, or

b) In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

a) Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities

b) Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

c) Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

For assets and liabilities that are recognised in the financial statements on a recurring basis, the

Company determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

(xx) Recent accounting pronouncements

Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 31, 2023, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2023, as below:

Ind AS 1 - Presentation of Financial Statements -This amendment requires the entities to disclose their material accounting policies rather than their significant accounting policies and include corresponding amendments to IND AS 107 and IND AS 34. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and the impact of the amendment is insignificant in the financial statements.

Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors - This amendment has introduced a definition of ‘accounting estimates’ and included amendments to Ind AS 8 to help entities distinguish changes in accounting policies from changes in accounting estimates. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and there is no impact on its financial statements.

Ind AS 12 - Income Taxes - This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences. Also there is corresponding amendment to IND AS 101. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the

amendment and there is no impact on its financial statement.

The amendment is effective from 1 April, 2023. The Company has evaluated the effect of this amendment on the financial statements and concluded that there is no impact.

C Significant accounting judgements, estimates and assumptions

The preparation of the Company’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures. Actual results may differ from the estimates.

Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. The Company continually evaluates these estimates and assumptions based on the most recently available information. Revisions to accounting estimates are recognized prospectively in the Statement of Profit and Loss in the period in which the estimates are revised and in any future periods affected.

(i) Significant accounting judgements

In the process of applying the Company’s accounting policies, management has made the following judgements, which have the significant effect on the amounts recognised in the financial statements:

(a) Contingent Liabilities

In ordinary course of business, the Company faces claims by various parties. The Company assesses such claims and monitors the legal environment on an ongoing basis, with the assistance of external legal counsel, wherever necessary. The Company records a liability for any claims where a potential loss probable and capable of being estimated and discloses such matters in its financial statements, if material. For potential losses that are considered possible, but not probable, the Company provides disclosures in the financial statements but does not record a liability in its financial statements unless the loss becomes probable.

(b) Preference shares:

To consider accounting of preference shares as equity or liability depends on the conditions if the Company has a valid expectation of redemption (including timing there of) of such preference share capital at the time of issue of these preference shares. The Company evaluates its current operations, performance and expected cash flows at the time of infusion of each of such issue of preference shares to consider its ability to repay

(including timing thereof) the said preference shares. In respect of preference shares issued until March 31, 2022 based on evaluation done by the management, the Company cumulatively never had significant cash flows/ profits to enable it to redeem the preference shares and considering this, at the time of issue of those preference shares, there was no valid expectations of this amount being repaid and accordingly were classified as equity in these Ind AS Financial Statements.

25,00,000, 0.09% Non-Cumulative Redeemable Non-Convertible Preference Shares of Rs.10 (absolute amount) each were issued on November 23, 2022. The shares are redeemable in maximum period of 5 years with an early redemption option with an issuer. In addition, the preference shares have fixed non-discretionary dividend payments and mature on November 22, 2027. The Company has designated these preference shares as financial liabilities at FVTPL as permitted by Ind AS 109. As on date of issuance, the present value of differential between the market interest rate and actual interest rate amounting Rs. 89 lakhs are classified as deemed equity contribution.

(ii) Significant estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

(a) Defined benefit plans/ Other Long term employee benefits

The cost of the defined benefit plans and other long term employee benefit plans are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. The management considers the interest rates of government securities based on expected settlement period of various plans. Further details about various employee benefit obligations are given in Note 28.

(b) Taxes

Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws and the amount and timing of future taxable income. The Company establishes provision, based on reasonable estimates. The amount of such provisions is based on various factors such as experience of previous tax audits and differing interpretations of tax regulation by the taxable entity and the responsible tax authority. Such differences in interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective domicile of the Companies.

The Company has reassessed unrecognised deferred tax assets as at March 31, 2023. Considering the fact that the Company has been making taxable profits in the recent years owing to improvements in business conditions and financial performance, the Company has recognised deferred tax assets as at March 31, 2023 amounting Rs. 1,684 lakhs (including Rs. 1,010 lakhs in respect of unabsorbed depreciation) in the financial statements for the year ended March 31, 2023 as it is considered probable that future taxable profits will be available.

(c) Leases

Effective April 01, 2019, the Company adopted the new lease standard (Ind AS 116) using the modified retrospective method applied to lease arrangements that were in place on the transition date. Ind AS 116 requires the Company to recognize a right-of-use lease asset and lease liability for operating and finance leases. The right-of-use asset is measured as the sum of the lease liability, prepaid or accrued lease payments, any initial direct costs incurred and any other applicable amounts.

The calculation of the lease liability requires the Company to make certain assumptions

for each lease, including lease term and discount rate implicit in each lease, which could significantly impact the gross lease liability, the duration and the present value of the lease liability. When calculating the lease term, the Company considers the renewal, cancellation and termination rights available to the Company and the lessor. The Company determines the discount rate by calculating the incremental borrowing rate.

The Company has several lease contracts that include extension and termination options. These options are negotiated by management to provide flexibility in managing the leased-assets and align with the Company’s business needs. Management exercises significant judgement in determining whether these extension and termination options are reasonably certain to be exercised and accordingly records the right of use assets and lease liability for those assets.

(d) Allowance for Trade Receivables

The Company uses expected credit loss model to assess the impairment loss or gain. The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forwardlooking information. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as given in provision matrix and Company’s historical experience for customers.

(e) Warranty

The estimated liability for product warranties is recorded when products are sold. These estimates are established with respect to products sold during the year on the basis of past experience regarding failure trends of products and costs of rectification or replacement. It is expected that most of this cost will be incurred over the next one year as per the company warranty policy. Management estimates the expense based on historical warranty claims information and any recent trends that may suggest future claims could differ from historical amounts.

Terms/ rights attached to issued preference shares:

*25,00,000 (2022:Nil) 0.09% (2022:Nil) Non-cumulative redeemable non-convertible preference shares shall be entitled to dividend at the rate of 0.09% per annum issued on November 22, 2022. In case of insufficiency of profits /no profits, the dividend on preference shares shall not be declared and distributed and the dividend liability on the preference shares for the respective year shall lapse.

25.00. 000 (2022:25,00,000) 0.10%(2022:0.10%) Non-cumulative redeemable non-convertible preference shares shall be entitled to dividend at the rate of 0.1% per annum. In case of insufficiency of profits /no profits, the dividend on preference shares shall not be declared and distributed and the dividend liability on the preference shares for the respective year shall lapse. These preference shares were redeemed on November 23, 2022.

1.57.00. 000 (2022:1,57,00,000) 13.88% (2022:13.88%) cumulative redeemable non-convertible preference shares shall be entitled to dividend at the rate of 13.88% per annum. In case of insufficiency of profits /no profits, the dividend on preference shares shall not be declared and distributed in the respective year but the dividend liability on the preference shares for that respective year shall be cumulated and paid to the holders of the preference shares.

2.29.00. 000 (2022:2,29,00,000) 13.88% (2022:13.88%) cumulative redeemable non-convertible preference shares shall be entitled to dividend at the rate of 13.88% per annum. In case of insufficiency of profits /no profits, the dividend on preference shares shall not be declared and distributed in the respective year but the dividend liability on the preference shares for that respective year shall be cumulated and paid to the holders of the preference shares.

3.50.00. 000 (2022: 3,50,00,000) 5% (2022: 5%) cumulative redeemable non-convertible preference shares shall be entitled to dividend at the rate of 5% per annum. In case of insufficiency of profits /no profits, the dividend on preference shares shall not be declared and distributed in the respective year but the dividend liability on the preference shares for that respective year shall be cumulated and paid to the holders of the preference shares.

Preference shares of all classes carry a preferential right as to dividend over equity shares. Where dividend on cumulative preference shares is not declared for a financial year, the entitlement thereto is carried forward whereas in the case of noncumulative preference shares, the entitlement for that year lapses. The preference shares are entitled to one vote per share at meetings of the Company on any resolutions of the Company directly affecting their rights. In the event of liquidation, preference shareholders have a preferential right over equity shareholders to be repaid to the extent of capital paid-up and dividend in arrears on such shares.

Terms of redemption of preference shares

*Maturity period for redemption of 0.09% preference shares amounting to Rs. 250 lakhs is issued on November 22, 2022. Maturity of these shares are five years from the date of allotment i.e. November 22, 2022, with an option with either party for an early redemption at any time.

Maturity period for redemption of 0.1% preference shares amounting to Rs. 250 lakhs is till March 24, 2023. Original maturity was ten years from the date of allotment i.e. March 25, 2003, with an option to the Company of an earlier redemption after March 24, 2005. The shares were due for redemption on March 24, 2013 which pursuant to the provisions of section 106 of the Companies Act, 1956 was extended by the Company with the consent of preference shareholders by five years, i.e. till March 24, 2018 and were further extended by another five years, i.e till March 24, 2023. These preference shared were redeemed on November 23, 2022.

Maturity period for redemption of 13.88% (2022:13.88%) preference shares amounting to Rs. 1,570 lakhs is till March 26, 2024. Original maturity was ten years from the date of allotment i.e. March 27, 2004, with an option to the Company of an earlier redemption after March 27, 2006. The shares were due for redemption on March 26, 2014 which pursuant to the provisions of Section 106 of the Companies Act, 1956 was extended by the Company with the consent of preference shareholders by five years i.e. till March 26, 2019 and were further extended by another five years, i.e till March 26, 2024.

Maturity period for redemption of13.88% (2022:13.88%) preference shares amounting to Rs. 2,290 lakhs is till March 20, 2026. Original maturity was ten years from the date of allotment i.e. March 21, 2006, with an option to the Company of an earlier redemption after March 21, 2008. The shares were due for redemption on March 20, 2016 which pursuant to the provisions of Section 106 of the Companies Act, 1956 was extended by the Company with the consent of preference shareholders by five years i.e. till March 20, 2021 and were further extended by another five years, i.e till March 20, 2026.

37 The Code on Social Security 2020 has been notified in the Official Gazette on September 29, 2020. The effective date from which the changes are applicable is yet to be notified and the rules are yet to be framed. Impact if any of the change will be assessed and accounted in the period in which said Code becomes effective and the rules framed thereunder are published.

38 The Company does not have any immovable properties [other than properties (including buildings constructed there on included in Property, plant and Equipment disclosed in the financial statement) where the Company is the lessee, and the lease agreements are duly executed in favour of the lesse].

39 No proceedings have been initiated during the year or are pending against the Company as at 31 March 2022 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

40 The Company is not a declared wilful defaulter by any bank or financial institution or other lender.

41 The Company has no borrowings from banks or financial institutions on the basis of security of current assets.

42 There are no charges or satisfaction yet to be registered by the Company with ROC beyond the statutory period.

43 As per the MCA notification dated August 05, 2022, the Central Government has notified the Companies (Accounts) Fourth Amendment Rules, 2022. As per the amended rules, the Companies are required to maintain back-up on daily basis of such books of account and other relevant books and papers maintained in electronic mode that should be accessible in India at all the time. Also, the Companies are required to create backup of accounts on servers physically located in India on a daily basis.

The books of account along with other relevant records and papers of the Company are maintained in electronic mode. These are readily accessible in India at all times however backup is not maintained in India and is presently maintained in servers in Singapore.

In terms of our report attached For and on behalf of the Board of Directors of Timex Group India Limited

For Deloitte Haskins & Sells LLP

Chartered Accountants

Pramod B. Shukla David Thomas Payne Deepak Chhabra

Partner Chairman Managing Director

(DIN - 07504820) (DIN - 01879706)

Place : Connecticut, USA Place : Noida

Date : May 23, 2023 Date : May 23, 2023

Dhiraj Kumar Maggo Amit Jain

Vice President - Legal, HR & Company Secretary Chief Financial Officer

(Membership No.:F7609) (PAN - AAMPJ9232F)

Place : Noida Place : Noida Place : Noida

Date : May 23, 2023 Date : May 23, 2023 Date : May 23, 2023

---

Mar 31, 2022

Terms/ rights attached to issued preference shares:

25.00. 000 (2021:25,00,000) 0.10%(2021:0.10%) Non-cumulative redeemable non-convertible preference shares shall be entitled to dividend at the rate of 0.1% per annum. In case of insufficiency of profits /no profits, the dividend on preference shares shall not be declared and distributed and the dividend liability on the preference shares for the respective year shall lapse.

1.57.00. 000 (2021:1,57,00,000) 13.88% (2021:13.88%) cumulative redeemable non-convertible preference shares shall be entitled to dividend at the rate of 13.88% per annum. In case of insufficiency of profits /no profits, the dividend on preference shares shall not be declared and distributed in the respective year but the dividend liability on the preference shares for that respective year shall be cumulated and paid to the holders of the preference shares.

2.29.00. 000 (2021:2,29,00,000) 13.88% (2021:13.88%) cumulative redeemable non-convertible preference shares shall be entitled to dividend at the rate of 13.88% per annum. In case of insufficiency of profits /no profits, the dividend on preference shares shall not be declared and distributed in the respective year but the dividend liability on the preference shares for that respective year shall be cumulated and paid to the holders of the preference shares.

3.50.00. 000 (2021: 3,50,00,000) 5% (2021: 5%) cumulative redeemable non-convertible preference shares shall be entitled to dividend at the rate of 5% per annum. In case of insufficiency of profits /no profits, the dividend on preference shares shall not be declared and distributed in the respective year but the dividend liability on the preference shares for that respective year shall be cumulated and paid to the holders of the preference shares.

Preference shares of all classes carry a preferential right as to dividend over equity shares. Where dividend on cumulative preference shares is not declared for a financial year, the entitlement thereto is carried forward whereas in the case of noncumulative preference shares, the entitlement for that year lapses. The preference shares are entitled to one vote per share at meetings of the Company on any resolutions of the Company directly affecting their rights. In the event of liquidation, preference shareholders have a preferential right over equity shareholders to be repaid to the extent of capital paid-up and dividend in arrears on such shares.

Terms of redemption of preference shares

Maturity period for redemption of 0.1% preference shares amounting to Rs. 250 lakhs is till March 24, 2023. Original maturity was ten years from the date of allotment i.e. March 25, 2003, with an option to the Company of an earlier redemption after March 24, 2005. The shares were due for redemption on March 24, 2013 which pursuant to the provisions of section

106 of the Companies Act, 1956 was extended by the Company with the consent of preference shareholders by five years, i.e. till March 24, 2018 and were further extended by another five years, i.e till March 24, 2023.

Maturity period for redemption of 13.88% (2021:13.88%) preference shares amounting to Rs. 1,570 lakhs is till March 26, 2024. Original maturity was ten years from the date of allotment i.e. March 27, 2004, with an option to the Company of an earlier redemption after March 27, 2006. The shares were due for redemption on March 26, 2014 which pursuant to the provisions of Section 106 of the Companies Act, 1956 was extended by the Company with the consent of preference shareholders by five years i.e. till March 26, 2019 and were further extended by another five years, i.e till March 26, 2024. Maturity period for redemption of 13.88% (2021:13.88%) preference shares amounting to Rs. 2,290 lakhs is till March 20, 2026. Original maturity was ten years from the date of allotment i.e. March 21, 2006, with an option to the Company of an earlier redemption after March 21, 2008. The shares were due for redemption on March 20, 2016 which pursuant to the provisions of Section 106 of the Companies Act, 1956 was extended by the Company with the consent of preference shareholders by five years i.e. till March 20, 2021 and were further extended by another five years, i.e till March 20, 2026.

Maturity period for redemption of 5% (2021: 5%) preference shares amounting to Rs. 3,500 lakhs is till February 15, 2027, with an option to the Company of an earlier redemption after February 15, 2022.

The preference shareholders, vide their letter dated March 31, 2020, have relinquished their voting rights accrued/accruing on the preference shares in terms of second proviso to section 47(2) of the Companies Act, 2013 due to non-payment of dividend till date or during the remaining tenure of preference shares.

During the previous year 2017-2018, the holders of preference share capital had waived off the dividend for the financial years 2016-17 and 2017-2018. The Company had obtained relevant approval from the holders of preference shares and regulatory authority for the waiver of dividend upto FY 2017-18 and extension of maturity of above preference shares.

Also refer note 26(b)

The Company had received RBI approval for outstanding invoices against import of services delayed beyond three years through letter dated November 20, 2020 via reference number FED. NDRO. PCD. No. 911/02.02.003/Nov20/2020-21, accordingly during the current year the Company has remitted all outstanding amount above 3 years amounting to Rs. 1,881 lakhs. The payables for the year ended March 31, 2021 includes outstanding foreign currency payable to its group entities for more than 3 years amounting Rs. 1,881 lakhs.

The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.

Deferred tax assets have not been recognised in the financials, as per the management there is absence of reasonable certainty that sufficient taxable income in near future will be available against which such deferred tax assets can be realised.

Business losses upto financial year March 31, 2017 would expire upto financial year ending March 31, 2025. The unrecognised tax credits pertaining to MAT Credit as at March 31, 2019 has expired as the company has opted for New Tax Regime effective from April 1, 2019.

On 20th September 2019 the government of India vide the Taxation Laws (Amendment) Ordinance 2019, inserted Section 115BAA in the Income Tax Act, 1961, which provides domestic companies an option to pay income tax at reduced rate effective April 1, 2019, subject to certain conditions. The expenses for the year ended March 31, 2020 have been provided for at reduced tax rate.

On 29th November 2019 the Company has signed Unilateral Advance Pricing Agreement (APA) with the Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, Government of India wherein the Company has agreed on the methodology to be followed for determining the Arm’s Length Price of the transactions covered by the agreement. The Company has complied with the details mentioned in the agreement and has filed compliance report with the authorities on 26th February 2020. The above disclosure has been considered after effect of APA, however the compliance report filed by the Company are yet to be audited / verified by the authorities.

26 CONTINGENT LIABILITIES AND COMMITMENTS
	As at March 31, 2022	As at March 31, 2021
a. Claims against the Company not acknowledged as debts:
Sales tax	131	1,444
Income tax	465	-
Others	155	159
b. Dividend on cumulative preference shares*
2012-13 to 2017-18	-	-
2018-19	711	711
2019-20	711	711
2020-21	711	711
2021-22	711	-
Corporate dividend tax on cumulative preference shares*
2012-13 to 2017-18	-	-
2018-19	-	146
2019-20	-	146
2020-21	-	146
2021-22	-	-

* The dividend liability on 15,700,000 2.9% cumulative redeemable non-convertible preference shares of Rs. 10 each and 22,900,000 5.4% cumulative redeemable non-convertible preference shares of Rs. 10 each, payable until 31 March 2009, was waived off as per the consent of the holders of these preference shares vide their letter dated 15 March 2009. The coupon rate applicable to these series of preference shares was revised to 7.1% effective 1 April 2009 till the date of maturity. The holders of these preference shares have further waived the dividend for the years 2012-13, 2013-14, 2014-15 and 2015-16, subject to the condition that the coupon rate for these series shall be revised from 7.1% to 13.88%. During the financial year 2016-17, the Company obtained relevant approvals from the regulatory authorities and the coupon rate applicable to these series of preference shares was revised to 13.88% effective 1 April 2016 till the date of maturity. Further, the holders of these preference shares have waived the dividend for the financial years 2016-17 and 2017-18. The dividend liability on 35,700,000 5% cumulative redeemable non-convertible preference shares of Rs. 10 each payable until 31 March 2018, was waived off as per the consent of the holders of these preference shares vide their letter dated 22 February 2018. Thus there is no outstanding dividend on cumulative preference shares as at March 31, 2018. Also refer Note 11.B

c. The amounts shown above represents the best possible estimates arrived at on the basis of available information. The uncertainties and possible reimbursements are dependent on the outcome of the different legal processes which have been invoked by the Company or the claimants as the case may be and therefore cannot be predicted accurately or relate to a present obligations that arise from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate cannot be made. The Company engages reputed professional advisors to protect its interests and has been advised that it has strong legal positions against such disputes.

d. The estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. Nil (2021: Rs. Nil).

e. The Company has other commitments, for purchases / sales orders which are issued after considering requirements as per operating cycle for purchase / sale of goods and services, employee benefits. The Company does not have any long term contracts including derivative contracts for which there will be any material foreseeable losses.

f. There are no amount due for payment to the Investor Education and Protection Fund under Section 125(1) of the Companies Act, 2013

g. The Hon’ble Supreme Court has passed a judgement on the definition and scope of “Basic Wages” under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. As a matter of caution, the Company has made a provision on prospective basis from the date of such ruling, i.e. March 1, 2019. The Company will update its provision on receiving further clarity on this matter.

Foot notes :

1. Sale and purchase of goods and services to and from related parties and other transactions with related parties were made at arms length price.

2. All outstanding balances are unsecured and are repayable in cash. No expense has been recognised in the current or prior years for bad and doubtful debts in respect of amounts owed by related parties.

3. Tanager Group B.V. (formerly known as Timex Group B.V), an intermediate holding company, has provided bank guarantee amounting to Rs. 4,780 lakhs (2021: Rs. 3,580 lakhs) (including unfunded limit) to the bankers of the Company for use of cash credit and overdraft facilities (including working capital loans).

The expenses incurred on account of the above defined contribution plans have been included in Note 21 “Employee Benefits Expenses” under the head “Contribution to provident and other funds”

(i) Superannuation fund

The Company’s contribution paid/ payable under the scheme to the Superannuation Fund Trust, as administered by the Company is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service. The trustees of the scheme have entrusted the administration of the trust scheme to Life Corporation of India Limited (LIC).

(ii) Provident fund

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Provident Fund. The contributions are charged to the statement of Profit and Loss as they accrue.

(iii) Employee State Insurance fund

The Company’s contribution paid/ payable under the scheme to the Employee State Insurance is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.

28.2 Defined benefit plans

Gratuity- The Company provides for gratuity for employees as per the Payment of Gratuity Act 1972. The Company operates a post-employment defined benefit plan that provides for gratuity. The gratuity plan entitles an employee, who has rendered at least five years of continuous service, to receive one-half month’s salary for each year of completed service at the time of retirement/exit. The Scheme is not funded by plan assets.

(i) These plans typically expose the company to actuarial risks such as investment risk, interest rate risk, longevity risk and salary risk.

Investment Risk

The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

Salary Risk

The present value of defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in rate of increase in salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan’s liability.

Interest Risk

The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in value of the liability.

Longevity Risk

The present value of defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after employment. An increase in the life expectancy of the plan participants will increase the plans liability.

The cost of the defined benefit plans and other long term benefits are determined using actuarial valuations. An actuarial valuations involves making various assumptions that may differ from actual developments in the future. These includes the determination of the discount rate, future salary increases and mortality rate. Due to these complexity involved in the valuation it is highly sensitive to the changes in these assumptions. All assumptions are reviewed at each reporting date. The present value of the defined benefit obligation and the related current service cost and planned service cost were measured using the projected unit cost method.

29 SEGMENT REPORTING

The Company is primarily in the business of manufacturing and trading of watches and rendering of related after sales service (“Watches”). The other activities of the Company comprises of providing information & technology support services to the group companies. The income from these other activities is not material in financial terms. The Managing Director of the Company, who has been identified as being the chief operating decision maker (CODM), evaluates the Company’s performance, allocate resources based on the analysis of the various performance indicators of the Company as a single unit. Therefore there is no reportable segment of the Company.

Overseas information includes sales and services rendered to customers located outside India.

Non-current segment assets includes property, plant and equipments, right of use assets, capital work in progress, intangible assets and other non current assets.

There is only one customer representing more than 10% of the total company’s revenue for the financial year 2021-22. There is only one customer representing more than 10% of the total company’s revenue for the financial year 2020-21

31.1 Capital Management

The Company manages its capital to ensure that it will be able to continue as a going concern and provide reasonable return to the shareholders through maintaining reasonable balance between debt and equity. The capital structure of the Company consists of net debt (borrowings net of cash and cash equivalents) and total equity of the Company. Holding Company has infused capital by way of preference shares as and when needed. The Company’s management reviews the capital structure of the Company on a periodic basis. As part of review, the management considers the cost of capital and risk associated with each class of capital.(refer note 1.B.(xviii))

The Board of directors has approved risk management policy which provides framework to identify, evaluate business risk and challenges across the company. The company has constituted risk management committee of senior management team. These policies and guidelines cover foreign currency risk, credit risk and liquidity risk. The objective of financial risk management is to contain, where deemed appropriate, exposures on net basis to the various types of financial risks mentioned above in order to limit any negative impact on the Company’s results and financial position.

31.3.1 Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. The company is exposed to foreign exchange risk arising through its sales and purchases denominated in various foreign currencies.

Foreign Currency Risk Management

Foreign currency risk also known as Exchange Currency Risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. Foreign currency risk in the Company is attributable to Company’s operating activities and financing activities.

In the operating activities, the Company’s exchange rate risk primarily arises when revenue / costs are generated in a currency that is different from the reporting currency (transaction risk). The information is monitored by the Audit committee and the Board of Directors on a quarterly basis. This foreign currency risk exposure of the Company are mainly in U.S. Dollar (USD). The Company’s exposure to foreign currency changes for all other currencies is not material.

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks, foreign exchange transactions and other financial instruments.

Credit risk has always been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in normal course of business. On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss. Refer note 8 for the disclosures for trade receivables.

31.3.3 Liquidity Risk Management

The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and by matching the maturity profiles and realisation of financial assets with the liabilities. The company expects to meet its other obligations from operating cash flows and proceeds of maturing financial assets.

32 LEASES

The Company has adopted Ind AS 116- leases beginning from April 1, 2019 using the modified retrospective approach method along with the transition option to recognise Right-of-Use asset (ROU) at an amount equal to the lease liability. Accordingly, comparatives for the year ended March 31, 2019 have not been retrospectively adjusted.

Disclosures as required under Ind AS 116:

The Company has entered into various lease agreements for acquiring space to do its day to day operations. Such lease contracts include monthly fixed payments for rentals. The lease contracts are generally cancellable at the option of lessee during the lease tenure. The Company also have a renewal option after the expiry of contract terms. There are no significant restrictions imposed under the lease contracts.

The Company has entered into a lease agreement of 95 years for its factory land located in Baddi which is operational. The lease contract amount is fully paid and there are no significant restrictions imposed under the lease contracts. Earlier these contracts were recorded as operating lease and now these have been accounted as Right of Use assets under Ind AS 116.

Right of use assets

Following are the changes in the carrying value of right of use assets for the year ended March 31, 2022:

34 No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries).

The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.”

35 TRANSFER PRICING

The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing regulation under sections 92-92F of the Income-Tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company continuously updates its documentation for the international transactions entered into with the associated enterprises during the financial year and expects such records to be in existence latest by such date as required under law. The management is of the opinion that its international transactions are at arm’s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

36 The Code on Social Security 2020 has been notified in the Official Gazette on September 29, 2020. The effective date from which the changes are applicable is yet to be notified and the rules are yet to be framed. Impact if any of the change will be assessed and accounted in the period in which said Code becomes effective and the rules framed thereunder are published.

37 The Company does not have any immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) whose title deeds are not held in the name of the company.

38 No proceedings have been initiated during the year or are pending against the Company as at 31 March 2022 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

39 The Company is not a declared wilful defaulter by any bank or financial institution or other lender.

40 The Company has no borrowings from banks or financial institutions on the basis of security of current assets.

41 There are no charges or satisfaction yet to be registered by the Company with ROC beyond the statutory period.

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Mar 31, 2018

1 CORPORATE INFORMATION, SIGNIFICANT ACCOUNTING POLICIES AND SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

A CORPORATE INFORMATION

Timex Group India Limited (“the Company”) is a public limited company domiciled in India and was incorporated on October 4, 1988. The Company’s equity shares are listed at BSE Limited. The registered office of the Company is situated at 106-107, Ambadeep, 14, K G Marg, New Delhi, India-110001. The Company’s Parent Company is Timex Group Luxury Watches B.V., Netherlands and Ultimate Holding Company is Eagleville Group B.V., Netherlands.

The principal activities of the Company are manufacturing and trading of watches and rendering of related after sales service. The Company’s manufacturing facility is located at Baddi, Himachal Pradesh. The Company also provides information and technology support services to the Group Companies.

The financial statements were approved for issue in accordance with a resolution of the directors on May 24, 2018.

Notes

(i) The cost of inventories recognised as an expense during the year is Rs.12,358 lakhs (2017: Rs. 12,345 lakhs)

(ii) The cost of inventories recognised as an expense includes Rs. 195 lakhs ( 2017: Rs. 238 lakhs) in respect of write-downs of inventory or to bring the valuation of inventory to net realisable value.

(iii) The method of valuation of inventories has been stated in note 1.B.11.

The Company uses expected credit loss model to assess the impairement loss or gain. The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as given in provision matrix and Company''s historical experience for customers.

Notes

(i) The credit period allowed generally varies on sales, on case to case basis, channel to channel and on market conditions.

Terms/ rights attached to equity shares :

The Company has only one class of equity shares having a par value of Re. 1 per share. Each holder of equity shares is entitled to one vote per share. All equity shareholders rank equally with regard to dividends and share in the Company''s residual assets. The equity shareholders are entitled to receive dividend as declared by the Company subject to payment of dividend to preference shareholders.

In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Terms/ rights attached to issued preference shares:

25.00.000 (2017:25,00,000; 2016:25,00,000) 0.1%(2017:0.10%; 2016:0.10%) Non-cumulative redeemable non-convertible preference shares shall be entitled to dividend at the rate of 0.1% per annum. In case of insufficiency of profits /no profits, the dividend on preference shares shall not be declared and distributed and the dividend liability on the preference shares for the respective year shall lapse.

3.86.00.000 (2017:3,86,00,000; 2016:3,86,00,000) 13.88% (2017:13.88%; 2016:7.1%) cumulative redeemable non-convertible preference shares shall be entitled to dividend at the rate of 13.88% per annum. In case of insufficiency of profits /no profits, the dividend on preference shares shall not be declared and distributed in the respective year but the dividend liability on the preference shares for that respective year shall be cumulated and paid to the holders of the preference shares.

3.50.00.000 (2017: 3,50,00,000) 5% (2017: 5%) cumulative redeemable non-convertible preference shares shall be entitled to dividend at the rate of 5% per annum. In case of insufficiency of profits /no profits, the dividend on preference shares shall not be declared and distributed in the respective year but the dividend liability on the preference shares for that respective year shall be cumulated and paid to the holders of the preference shares.

Preference shares of all classes carry a preferential right as to dividend over equity shares. Where dividend on cumulative preference shares is not declared for a financial year, the entitlement thereto is carried forward whereas in the case of non-cumulative preference shares, the entitlement for that year lapses. The preference shares are entitled to one vote per share at meetings of the Company on any resolutions of the Company directly affecting their rights. In the event of liquidation, preference shareholders have a preferential right over equity shareholders to be repaid to the extent of capital paid-up and dividend in arrears on such shares.

Terms of redemption of preference shares

Maturity period for redemption of 0.1% preference shares amounting to Rs. 250 lakhs is till March 24, 2023. Original maturity was ten years from the date of allotment i.e. March 25, 2003, with an option to the Company of an earlier redemption after March 24, 2005. The shares were due for redemption on March 24, 2013 which pursuant to the provisions of section 106 of the Companies Act, 1956 was extended by the Company with the consent of preference shareholders by five years, i.e. till March 24, 2018 and were further extended by another five years, i.e till March 24, 2023.

Maturity period for redemption of 13.88% (2017:13.88% ; 2016:7.10%) preference shares amounting to Rs. 1,570 lakhs is till March 26, 2024. Original maturity was ten years from the date of allotment i.e. March 27, 2004, with an option to the Company of an earlier redemption after March 27, 2006. The shares were due for redemption on March 26, 2014 which pursuant to the provisions of Section 106 of the Companies Act, 1956 was extended by the Company with the consent of preference shareholders by the five years i.e. till March 26, 2019 and were further extended by another five years, i.e till March 24, 2024. Maturity period for redemption of 13.88% (2017:13.88% ; 2016:7.10%) preference shares amounting to Rs. 2,290 lakhs is till March 20, 2026. Original maturity was ten years from the date of allotment i.e. March 21, 2006, with an option to the Company of an earlier redemption after March 21, 2008. The shares were due for redemption on March 20, 2016 which pursuant to the provisions of Section 106 of the Companies Act, 1956 was extended by the Company with the consent of preference shareholders by five years i.e. till March 20, 2021 and were further extended by another five years, i.e till March 24, 2026.

Maturity period for redemption of 5% preference shares amounting to Rs. 3,500 lakhs (previous year Rs 3,500 lakhs) is till February 15, 2027, with an option to the Company of an earlier redemption after February 15, 2022.

During the year, the holders of preference share capital have waived off the dividend for the financial years 2016-2017 and 2017-2018. The Company has obtained relevant approval from the holders of preference shares and regulatory authority for the waiver of dividend and extension of maturity of above preference shares.

Also refer note 27(b) and foot note 4 to note 28

* Cash credit facilities from banks carry interest ranging between 9.30% to 11.40% p.a., computed on a monthly basis on actual amount utilised, and are repayable on demand. The cash credit facilities are guaranteed by Timex Group B.V., an intermediate holding company.

Working capital loan carry interest ranging between 9.05% to 9.60% p.a. The working capital loan are guaranteed by Timex Group B.V., an intermediate holding company and are repayable within 30 days.

** The Company had taken loans from Timex Group Precision Engineering Limited during the previous year, which carries interest ranging between 8.00% to 8.50% p.a. and has been repaid on January 5, 2018.

* The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated August 26, 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises as on March 31, 2018, March 31, 2017 and April 1, 2016 has been made in the financial statements based on information received and available with the Company. Based on the information currently available with the Company, there are no dues payable to Micro and Small Suppliers as defined in the Micro, Small and Medium Enterprises Development Act, 2006.

*Consequent to introduction of Goods and Services Tax (GST) with effect from July 1, 2017, Central Excise, Value Added Tax (VAT) etc. have been subsumed into GST. In accordance with Indian Accounting Standard 18 on Revenue and Schedule III of the Companies Act, 2013, unlike Excise duties, levies like GST, VAT etc. are not part of Revenue. Accordingly, the following additional information is being provided to facilitate such understanding:

The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.

Deferred tax assets have not been recognised in the financials, as per the management there is absence of reasonable certainty that sufficient taxable income in near future will be available against which such deferred tax assets can be realised.

Business losses would expire upto financial year ending March 31, 2025. Further, the unrecognised tax credits pertaining to unabsorbed depreciation has no expiry.

* The dividend liability on 15,700,000 2.9% cumulative redeemable non-convertible preference shares of Rs. 10 each and 22,900,000 5.4% cumulative redeemable non-convertible preference shares of Rs. 10 each, payable until 31 March 2009, was waived off as per the consent of the holders of these preference shares vide their letter dated 15 March 2009. The coupon rate applicable to these series of preference shares was revised to 7.1% effective 1 April 2009 till the date of maturity. The holders of these preference shares have further waived the dividend for the years 2012-13, 2013-14, 2014-15 and 2015-16, subject to the condition that the coupon rate for these series shall be revised from 7.1% to 13.88%. During the previous year, the Company obtained relevant approvals from the regulatory authorities and the coupon rate applicable to these series of preference shares was revised to 13.88% effective 1 April 2016 till the date of maturity. Further, the holders of the preference shares have waived the dividend for the financial years 2016-17 and 2017-18, thus there is no outstanding dividend on cumulative preference shares as at March 31, 2018. Also refer Note 12.B.

c. The amounts shown above represents the best possible estimates arrived at on the basis of available information. The uncertainties and possible reimbursements are dependent on the outcome of the different legal processes which have been invoked by the Company or the claimants as the case may be and therefore cannot be predicted accurately or relate to a present obligations that arise from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate cannot be made. The Company engages reputed professional advisors to protect its interests and has been advised that it has strong legal positions against such disputes.

d. The estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. 15 lakhs (2017: Nil; 2016: Nil).

e. The Company has other commitments, for purchases / sales orders which are issued after considering requirements as per operating cycle for purchase / sale of goods and services, employee benefits. The Company does not have any long term contracts including derivative contracts for which there will be any material foreseeable losses.

f. There are no amount due for payment to the Investor Education and Protection Fund under Section 125(1) of the Companies Act, 2013.

Foot Notes :

1. Sale and purchase of goods and services to and from related parties and other transactions with related parties were made at arms length price.

2. All outstanding balances are unsecured and are repayable in cash. No expense has been recognised in the current or prior years for bad and doubtful debts in respect of amounts owed by related parties.

3. Timex Group B.V., an intermediate holding company, has provided bank guarantee amounting to Rs. 3,880 lakhs (2017: Rs. 3,880 lakhs, 2016: Rs. 3,880 lakhs) to the bankers of the Company for use of cash credit and overdraft facilities (including working capital loans).

4. During the year, the Company has got extension of the maturity date for three series of preference shares with redemptions falling in the years 2023 to 2026 and dividends for the financial years 2016-2017 and 2017-2018 were waived off. (Refer Note 12.B and Note 27.b for details)

The expenses incurred on account of the above defined contribution plans have been included in Note 22 “Employee Benefits Expenses” under the head “Contribution to provident and other funds”

(i) Superannuation fund

The Company’s contribution paid/ payable under the scheme to the Superannuation Fund Trust, as administered by the Company is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service. The trustees of the scheme have entrusted the adminstration of the trust scheme to Life Corporation of India Limited (LIC).

(ii) Provident fund

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Provident Fund. The contributions are charged to the statement of Profit and Loss as they accrue.

(iii) Employee State Insurance fund

The Company’s contribution paid/ payable under the scheme to the Employee State Insurance is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.

2. Defined benefit plans

Gratuity- The Company provides for gratuity for employees as per the Payment of Gratuity Act 1972. The Company operates a post-employment defined benefit plan that provides for gratuity. The gratuity plan entitles an employee, who has rendered at least five years of continuous service, to receive one-half month’s salary for each year of completed service at the time of retirement/exit. The Scheme is not funded by plan assets.

(i) These plans typically expose the company to actuarial risks such as investment risk, interest rate risk, longevity risk and salary risk.

Investment Risk

The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

Salary Risk

The present value of defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in rate of increase in salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan''s liability.

Interest Risk

The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in value of the liability.

Longevity Risk

The present value of defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after employment. An increase in the life expectancy of the plan participants will increase the plans liability.

The cost of the defined benefit plans and other long term benefits are determined using actuarial valuations. An actuarial valuations involves making various assumptions that may differ from actual developments in the future. These includes the determination of the discount rate, future salary increases and mortality rate. Due to these complexity involved in the valuation it is highly sensitive to the changes in these assumptions. All assumptions are reviewed at each reporting date. The present value of the defined benefit obligation and the related current service cost and planned service cost were measured using the projected unit cost method.

(viii)The average duration of the defined benefit obligation is 7 years. The Company expects to make a contribution of Rs. 45 lakhs to the defined benefit plans during the next financial year.

(ix) Sensitivity Analysis

Significant actuarial assumptions for the determination of the defined obligation are discount rate and expected salary increase. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of reporting period, while holding all other assumptions constant.

3. SEGMENT REPORTING

The Company is primarily in the business of manufacturing and trading of watches and rendering of related after sales service (“Watches”). The other activities of the Company comprises of providing information & technology support services to the group companies. The income from these other activities is not material in financial terms. The Managing Director of the Company, who has been identified as being the chief operating decision maker (CODM), evaluates the Company’s performance, allocate resources based on the analysis of the various performance indicators of the Company as a single unit. Therefore there is no reportable segment of the Company.

Domestic information includes sales and services to customers located in India.

Overseas information includes sales and services rendered to customers located outside India.

Non-current segment assets includes property, plant and equipments, capital work in progress, intangible assets and other non current assets.

No single customer contributed 10% or more to the company''s revenue for both the financial years 2017-18 and 2016-17.

4. OPERATING LEASE

The Company has taken land and building, office premises, other business premises, vehicles and residential accommodation for some of its employees under operating lease arrangements, with an option of renewal at the end of the lease term and escalation clause in some of the cases. These arrangements are both cancellable and non-cancellable in nature and range between two to ninety five years. The future minimum lease payments under non-cancellable operating leases are as under:-

5. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

5.1 Capital Management

The Company manages its capital to ensure that it will be able to continue as a going concern and provide reasonable return to the shareholders through maintaining reasonable balance between debt and equity. The capital structure of the Company consists of net debt (borrowings net of cash and cash equivalents) and total equity of the Company. Holding Company has infused capital by way of preference shares as and when needed. The Company''s management reviews the capital structure of the Company on a periodic basis. As part of review, the management considers the cost of capital and risk associated with each class of capital.

5.2 Financial Risk Management

The Board of directors has approved risk management policy which provides framework to identify, evaluate business risk and challenges across the company. The company has constituted risk management committee of senior management team. These policies and guidelines cover foreign currency risk, credit risk and liquidity risk. The objective of financial risk management is to contain, where deemed appropriate, exposures on net basis to the various types of financial risks mentioned above in order to limit any negative impact on the Company’s results and financial position.

5.3 Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. The company is exposed to foreign exchange risk arising through its sales and purchases denominated in various foreign currencies.

Foreign Currency Risk Management

Foreign currency risk also known as Exchange Currency Risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. Foreign currency risk in the Company is attributable to Company’s operating activities and financing activities.

In the operating activities, the Company’s exchange rate risk primarily arises when revenue / costs are generated in a currency that is different from the reporting currency (transaction risk). The information is monitored by the Audit committee and the Board of Directors on a quarterly basis. This foreign currency risk exposure of the Company are mainly in U.S. Dollar (USD). The Company’s exposure to foreign currency changes for all other currencies is not material.

The Company does not enter into or trade financial instrument including derivative financial instruments for speculative purpose

# Amount is below rounding off threshold adopted by the Company Foreign currency sensitivity analysis

The Company is mainly exposed to USD.

The following table details the Company''s sensitivity to a 1% increase and decrease in the Rs. against the relevant foreign currency. The sensitivity analysis includes only outstanding foreign currency denominated monetary items as tabulated above and adjusts their translation at the period end for 1% change in foreign currency rates. A positive number below indicates an increase in profit before tax or vice-versa.

5.4 Credit Risk Management

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks, foreign exchange transactions and other financial instruments.

Credit risk has always been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in normal course of business. On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss. Refer note 8 for the disclosures for trade receivables.

Financial assets for which loss allowance is measured:

5.5 Liquidity Risk Management

The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and by matching the maturity profiles of financial assets and liabilities. The company expects to meet its other obligations from operating cash flows and proceeds of maturing financial assets.

6. FIRST TIME ADOPTION OF IND AS

These are the Company''s first financial statements prepared in accordance with Ind AS. The Company has prepared the opening balance sheet as per Ind AS as on April 1, 2016 (the transition date) by recognising all assets and liabilities whose recognition is required by Ind AS, not recognising items of assets or liabilities which are not permitted by Ind AS, by reclassifying items from previous GAAP to Ind AS as required under Ind AS, and applying Ind AS in measurement of recognised assets and liabilities. However, this principle is subject to certain mandatory exceptions and certain optional exemptions availed by the Company. The Company has applied the following transition exemptions apart from mandatory exceptions in Ind AS 101:

1 Deemed cost for property, plant and equipment and intangible assets

The Company has elected to continue with the carrying value of all of its property, plant and equipment and intangibles assets recognised as on April 1, 2016 measured as per the previous GAAP and use that carrying value as its deemed cost as on transition date.

2 Arrangements containing a lease

Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. However, the Company has used Ind AS 101 exemption and assessed all arrangements based on conditions in place as at the date of transition.

Notes to first time adoption

a. Operating lease:

Under previous GAAP in respect of operating lease, lease rental has to be recognised as expense in the statement of profit and loss on straight-line basis over the term of lease for which lease equalisation reserve was created. Under Ind AS, such straight-line basis of accounting for the operating lease is not required if such increase in rent is in line with the expected general inflation. Accordingly, lease equalisation reserve of Rs. 16 lakhs and Rs. 22 lakhs as on March 31, 2016 and March 31, 2017 respectively has been reversed and charged in the statement of profit and loss of Rs. 6 lakhs for the year end March 31, 2017 has been reversed.

b. Actuarial gain/ (loss) on defined benefit plans:

Under previous GAAP in respect of defined benefit plan, actuarial gains and losses were recognised in the statement of profit and loss. Under Ind AS, the actuarial gains and losses forming part of re-measurement of the net defined benefit liability / asset is recognised in other comprehensive income. There is no impact on the total equity.

c. Under previous GAAP, there was no concept of other comprehensive income. Under Ind AS, specified items of income, expense, gains, or losses are required to be presented in other comprehensive income.

d. The Company has issued preference share capital aggregating to Rs. 7,610 lakhs to its Holding Company which under the previous GAAP was forming part of share capital under the shareholder’s fund. The Company cumulatively never had significant cash flows/ profits to enable it to redeem the preference shares and considering this, at the time of issue of these preference shares, there was no valid expectations of this amount being repaid, as such the entire preference share capital needs to be classified as Equity under Ind AS. Accordingly, this amount has been classified as “Equity component of compound financial instrument - preference share” under the head Other Equity in these Ind AS Financial Statements on transition date.

7. The Ministry of Micro, Small and Medium Enterprises has issued an office Memorandum dated August 26, 2008 which recommends that the Micro and small enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum, Accordingly, the disclosure in respect of the amounts payable to such enterprises as on March 31, 2018, March 31, 2017 and April 1, 2016 has been made in the financial statements based on information received and available with the Company. Based on the information currently available with the Company, there are no dues payable to Micro and Small Suppliers as defined in the Micro, Small and Medium Enterprises Development Act, 2006.

8. Transfer Pricing

The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing regulation under sections 92-92F of the Income-Tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company continuously updates its documentation for the international transactions entered into with the associated enterprises during the financial year and expects such records to be in existence latest by such date as required under law. The management is of the opinion that its international transactions are at arm’s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

9. Managerial remuneration of Rs 7.46 lakhs paid by the Company during the year ended March 31, 2012 was in excess of the amount approved by the Central Government. The Company’s application for approval of such excess remuneration was rejected by Central Government vide its letter dated July 26, 2012. The Company had requested the Central Government to reconsider the same and an application was made in this regard by the Company vide its letter dated August 30, 2012.

In response, the Company received direction from Central Government to recover the excess remuneration of Rs. 7.09 lakhs paid during the year ended March 31, 2012. Subsequently, the Company filed an application with the Central Government for waiver of such excess remuneration paid, since the concerned managerial personel has resigned w.e.f. January 31, 2013. In response, the government vide its letter dated November 18, 2014, rejected the application filed by the Company for waiver of remuneration paid in excess of the limits specified in the Companies Act, 1956. During the year, the Company has recovered the excess managerial remuneration along with interest thereon aggregating to Rs. 8.47 lakhs from the erstwhile managing director.

10. The prescribed corporate social responsibility expenditure required to be spent in financial year 2017-18 as per the requirements of section 135 of the Companies Act, 2013 is Rs. Nil, as the Company had reported losses in past three years.

11. Financial statements for the year ended and as at March 31, 2017 were audited by previous auditors - B S R & Co LLP.

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Mar 31, 2017

1. Rights, preferences and restrictions attached to equity shares

The Company has only one class of equity shares having a par value of Re. 1 per share. Each holder of equity shares is entitled to one vote per share. All equity shareholders rank equally with regard to dividends and share the Company’s residual assets. The equity shareholders are entitled to receive dividend was declared by the Company subject to payment of dividend to preference shareholders.

In the event of liquidation the Company, the holders of the equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to t number of equity shares held by the shareholders.

Rights, preferences and restrictions attached to preference shares

0.1% Non-cumulative redeemable non-convertible preference shares shall be entitled to dividend at the rate of Q% per annum. In case of insufficiency of profits /no profits, the dividend on preference shares shall not be declared and distributed and the dividend liability on the preference shares for the respective year shall lapse.

13.88% (previous year 7.%) Cumulative Redeemable non-convertible preference shares shall be entitled to dividend at the rate of 13.88% per annum. In case of insufficiency of profits /no profits, the dividend on preference shares shall not be declared and distributed in the respective year but the dividend liability on the preference shares for tl respective year shall be cumulated and paid to the holders of the preference shares.

5% Cumulative redeemable non-convertible preference shares shall be entitled to dividend at the rate of 5% per annum. In case of insufficiency of profits /no profits, the dividend on preference shares shall not be declared and distributed in the respective year but the dividend liability on the preference shares for that respective year shall cumulated and paid to the holders of the preference shares.

Preference shares of all classes carry a preferential right as to dividend over equity shareholders. Where dividend on cumulative preference shares is not declared for a financial year, the entitlement thereto is carried forward whereas in the case of non-cumulative preference shares, the entitlement for that year lapses. The preference s-hares are titled to one vote per share at meetings of the Company on any resolutions of the Company directly affecting their rights. In the event of liquidation, preference shareholders have a preferential right over equity shareholders to repaid to the extent of capital paid-up and dividend in arrears on such shares.

Terms of redemption of preference shares

Maturity Period for redemption of 0.1% preference shares amounting to Rs. 250 lakhs (previous year Rs. 250 lakhs) is till 24 March 2018 . Original maturity was ten years from the date of allotment i.e. 25 March 200., with an option to the Company of an earlier redemption after 24 March 2005. The shares were due for redemption on 24 March 2013 which pursuant to the provisions of section E6 of the Companies Act, 1956 was extended by the Company with the consent of preference shareholders by five years, i.e. till 24 March 2018.

Maturity period for readmit of 13.88% (previous year 7.%) preference shares amounting to Rs. 1,570 lakhs (previous year Rs. 1570 lakhs) is till 26 March 2019. Original maturity was ten years from the date of allotment i.e. 25 March 2003, with an option to the Company of an earlier redemption after 24 March 2005. The shares were due for redemption on 24March 2004 which pursuant to the provisions of Section 106 of the Companies Act,1 956 was extended by the Company with the consent of preference shareholders by the five years i.e. till 26 March 2019.

(Refer note 32 and note 41)

Maturity period for redemption of 13.88% (previous year 7.%) preference shares amounting to Rs. 2290 lakhs (previous year Rs. 2290 lakhs) is till 20 March 2021 Original maturity was ten years from the date of allotment i.e. 21 March 2006, with an option to the Company of an earlier redemption after 21 March 2008. The shares were due for redemption on 20 March 2016 which pursuant to the provisions of Section E6 of the Companies Act, 1956 was extended by the Company with the consent of preference shareholders by five years i.e. till 20 March 2021. (Refer note 32 and note 41)

Maturity period for redemption of 5% preference shares amounting to Rs. 3,500 lakhs (previous year nil) is till 5 February 2027, with an option to the Company of an earlier redemption after 5 February 2022. (Refer note B2 and note 41)

Provision for sales returns

Provision for sales returns has been created for estimated loss of margin on expected sales returns in future per against products sold during the year. The provision has been setup based on management’s estimates and past trends.

Provision for unearned margin

Provision for unearned margin relates to certain sales where property in the goods has passed but a significant risk of ownership has not passed to the counter party by the date of the balance sheet.

Provision for litigations

This represents provisions made for probable liabilities/ claims arising out of pending disputes/litigations with various regulatory authorities (in respect of excise duty, sales tax and similar matters). Above provisions are affected by numerous uncertainties and management has taken all efforts to make a best estimate. Timing of outflow of resources will depend upon timing of decision of cases.

2. Managerial remuneration of Rs 7.46 lakhs paid by the Company during the year ended 31 March 202 was in excess of the amount approved by the Central Government. The Company’s application for approval of such excess remuneration was rejected by Central Government vide its letter dated 26 July 202. The Company had requested the Central Government to reconsider the same and an application was made in this regard by the Company vide it letter dated 30 August 20)2.

In response, the Company received direction from Central Government to recover the excess remuneration of Rs. 7.09 lakhs paid during the year ended 31 March 2012. Subsequently, the Company filed an application with the Central Government for waiver of such excess remuneration paid, since the concerned managerial person has resigned w.e.f. 31 January 2013.

In response, the Central government vide its letter dated 18 November 2014, rejected the application filed by the Company for waiver of remuneration paid in excess of the limits specified in the Companies Act, 1956. Subsequent to 31 March 2017, the Company has recovered the excess managerial remuneration along with interest thereon from the erstwhile director.

3. Earnings/ (loss) per equity share (EPS)

Basic earnings/ (loss) per equity share

The calculation of basic earnings/ (loss) per equity share for the year ended 31 March 2017 is based on the profit/ (loss) attributable to equity shareholders of Rs. (1051) lakhs (previous year loss: Rs. (1237) lakhs), and weighted average number of equity shares outstanding of 100 lakhs (previous year: 100 lakhs).

Diluted earnings / (loss) per equity share

The calculation of diluted earnings/(loss) per share for the year ended 31 March 2017 is based on profit/ (loss) attributable to equity shareholders of Rs. (1051) lakhs (previous year loss: Rs (1257) lakhs and weighted average number of equity shares outstanding after adjustment for the effects of all dilutive potential equity shares of 100 lakhs (previous year: 100 lakhs).

4. Employee benefits: Post-employment benefit plans Provident fund

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Provident Fund. The Company has no obligation other than to make the specified contributions. The contributions are charged to the Statement of Profit and Loss as they accrue. The amount recognized as an expense towards contribution to Provident Fund for the period aggregated to Rs. 97 lakhs (previous year: Rs . 87 lakhs).

The Company also has an approved provident fund for its own employees, which is exempt from the Income tax Act 961 In order to comply with the provisions of the Act, the Company matches the interest declared by Regional Provident Fund (RPFC) to its own subscribers. To the extent that the actual interest earned by the Company’s previous fund falls short of the rate declared by RPFC, the shortfall is met by the Company. The benefit valued is the interest shortfall, if any, for future years on the provident fund balances of the employees.

The Defined Benefit Obligation of interest rate guarantee on exempt provident fund in respect of the employees of the Company as at 31 March 2017 amounts to Rs. Nil (previous year Rs. Nil) based on an actuarial valuation carried out by an independent actuary as at 31 March 2017.

Superannuation fund

The Company’s contribution paid/ payable under the scheme to the Superannuation Fund Trust, as administered by the Company is recognized as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service. The amount recognized as an expense towards contribution to Superannuation fund for the period aggregated to Rs. 7 lakhs (previous year: Rs. 9 lakhs).

Employee State Insurance fund

The Company’s contribution paid/ payable under the scheme to the Employee State Insurance is recognized as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service. The amount recognized as an expense towards contribution to Employee State Insurance Fund for the period aggregated to Rs. 8 lakhs (previous year: Rs. 7 lakhs).

Gratuity

The Company operates a post-employment defined benefit plan that provides for gratuity. The gratuity plan entitles an employee, who has rendered at least five years of continuous service, to receive one-half month’s salary for each year of completed service at the time of retirement/exit. The Scheme is not funded by plan assets. The followed table summarizes the position of assets and obligations in relation to the plan:

5. Operating leases as lessee:

The Company has taken land and building, office premises, showrooms, other business premises, vehicles and residential accommodation for some of its employees under operating lease arrangements, with an option of renewal at the end of the lease term and escalation clause in some of the cases. Lease payments charged during the year the Statement of Profit and Loss aggregate Rs. 238 lakhs (previous year Rs. 316 lakhs). The future minimum lease payments under non-cancellable operating leases are as follows:

6. Segment information

The Company’s business segment comprises:

- Watches: Manufacturing and trading of watches;

- Others: Providing IT and finance related back office support to other group companies.

Segment revenue in the geographical segments considered for disclosure are as follows:

- Revenues within India (Domestic) includes sale of watches and spares to consumers located within India; and

- Revenues outside India (Overseas) includes of watches manufactured in India and service income earned from customers located outside India.

Segments have been identified in line with the Accounting Standard 17 on “Segment Reporting” notified by the Companies (Accounting Standards) Rules, 2006, taking into account the nature of products and services, the risks and returns, the organization structure and the internal financial reporting system.

Secondary segment reporting is performed on the basis of the geographical segments.

7. Segment assets and liabilities

Segment assets include all operating assets used by a segment and consist principally of fixed assets, capital work in progress, current assets and loans and advances. Segment liabilities include all operating liabilities in respect of segment and consist principally of creditors and accrued liabilities. Segment liabilities do not include share capital, reserves, current tax and deferred tax liability. Primary segment assets do not include advance tax, deferred tax asset cash and bank balance and fixed deposits.

8. Segment revenue and expenses

Segment revenue and expenses are directly attributable to the segment and have been allocated to various segments on the basis of specific identification. However, segment revenue and expenses do not include interest and other income/expense in respect of non-segmental activities.

9. The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customer the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises as on 31 March 2017 and 31 March 2016 has been made in the financial statements based on information received and available with the Company. Based on the information currently available with the Company, there are no dues payable to Micro and Small Suppliers as defined in the Micro, Small and Medium Enterprises Development Act, 2006.

10. The dividend liability on 15,700,000 2.9% cumulative redeemable non-convertible preference shares of Rs. 0 each and 22,900,000 5.4% cumulative redeemable non-convertible preference shares of Rs. 0 each, payable until 31 March 2009, was waived off as per the consent of the holders of these preference shares vide their letter dated 15 March 2009. The coupon rate applicable to these series of preference shares was revised to 7.1% effective 1 April 2009 till the date of maturity he holders of these preference shares have further waived the dividend for the years 2012-13, 2013-14, 2014-15 and 2015-16, subject to the condition that the coupon rate for these series shall be revised from 7.%o to 13.88%. During the current year, the Company has obtained relevant approvals from the regulatory authorities and the coupon rate applicable to these series of preference shares has been revised to 13.88% effective 1 April 2016 till the date of maturity.

11. As at 31 March 2017, the Company has foreign currency receivables amounting to Rs. 14 lakhs (previous year Rs.39 lakhs) outstanding for a period exceeding nine months. As per Reserve Bank of India’s (RBI) Master Circular on Export of Goods and Services, foreign currency receivables should be realized, except with prior approval of RBI, within a period of nine months. The Company is in the process to write-off these amounts to comply with RBI guidelines.

12. Transfer Pricing

The Company has established a comprehensives tem of maintenance of information and documents as required by the transfer pricing regulation under sections 92-92F of the Income-Tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company continuously updates its documentation for the international transactions entered into with the associated enterprises during the financial year and expects such records to be in existence latest by such date as required under law. The management is of the opinion that its international transactions are at arm’s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

---

Mar 31, 2016

* Cash credit facilities from banks carry interest ranging between 10%-13% p.a., computed on a monthly basis on actual amount utilized, and are repayable on demand. Timex Group B.V., a fellow subsidiary, has provided a standby letter of credit amounting to Rs. 3,880 lakhs (previous year Rs. 3,880 lakhs) to the bankers of the Company as a guarantee for use of cash credit and overdraft facilities.

** Working capital loans carry interest ranging between 10% to 11% p.a. The working capital loans are guaranteed by Timex Group B.V, a fellow subsidiary and are repayable within 30 days.

1. Managerial remuneration of Rs 7.46 lakhs paid by the Company during the year ended 31 March 202 was in excess of the amount approved by the Central Government. The Company’s application for approval of such excess remuneration was rejected by Central Government vide its letter dated 26 July 2012. The Company had requested the Central Government to reconsider the same and an application was made in this regard by the Company vide its letter dated 3 August 202.

In response, the Company received direction from Central Government to recover the excess remuneration of Rs. 7. lakhs paid during the year ended 31 March 2012. Subsequently, the Company filed an application with the Central Government for waiver of such excess remuneration paid, since the concerned managerial person has resigned w.e.f. 3 January 203.

In response, the Central government vide its letter dated 18 November 2014, rejected the application filed by the Company for waiver of remuneration paid in excess of the limits specified in the Companies Act, 1956. The Company is taking necessary steps for recovery of this amount from the erstwhile Managing Director.

2. Earnings/ (loss) per equity share (EPS)

Basic earnings/ (loss) per equity share

The calculation of basic earnings/ (loss) per equity share for the year ended 31 March 2016 is based on the profit/ (loss) attributable to equity shareholders of Rs. (1,257) lakhs (previous year loss: Rs. (1,428) lakhs), and weighted average number of equity shares outstanding of 1,010 lakhs (previous year: 1,010 lakhs).

Diluted earnings / (loss) per equity share

The calculation of diluted earnings/(loss) per share for the year ended 31 March 2016 is based on profit/ (loss) attributable to equity shareholders of Rs. (1,257) lakhs (previous year loss: Rs (1,428) lakhs and weighted average number of equity shares outstanding after adjustment for the effects of all dilutive potential equity shares of 1,010 lakhs (previous year: 100 lakhs).

3. Employee benefits: Post-employment benefit plans Provident fund

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Provident Fund. The Company has no obligation other than to make the specified contributions.

The contributions are charged to the Statement of Profit and Loss as they accrue. The amount recognized as an expense towards contribution to Provident Fund for the period aggregated to Rs. 87 lakhs (previous year: Rs. 84 lakhs).

The Company also has an approved provident fund for its own employees, which is exempt from the Income tax Act B61 In order to comply with the provisions of the Act, the Company matches the interest declared by Regional Provident Fund (RPFC) to its own subscribers. To the extent that the actual interest earned by the Company’s pride fund falls short of the rate declared by RPFC, the shortfall is met by the Company. The benefit valued is the interest shortfall, if any, for future years on the provident fund balances of the employees.

The Defined Benefit Obligation of interest rate guarantee on exempt provident fund in respect of the employees of the Company as at 31 March 206 amounts to Rs. Nil (previous year Rs. Nil) based on an actuarial valuation carried out b an independent actuary as at 31 March 206.

Superannuation fund

The Company’s contribution paid/ payable under the scheme to the Superannuation Fund Trust, as administered b the Company is recognized as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service. The amount recognized as an expense towards contribution to Superannuation fund for period aggregated to Rs. 9 lakhs (previous year: Rs. 13 lakhs).

Employee State Insurance fund

The Company’s contribution paid/ payable under the scheme to the Employee State Insurance is recognized as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service. The amount recognized as an expense towards contribution to Employee State Insurance Fund for the period aggregated Rs. 7 lakhs (previous year: Rs. 5 lakhs).

Gratuity

The Company operates a post-employment defined benefit plan that provides for gratuity. The gratuity plan entitles an employee, who has rendered at least five years of continuous service, to receive one-half month’s salary for each year of completed service at the time of retirement/exit. The Scheme is not funded by plan assets. The following ta summarizes the position of assets and obligations in relation to the plan:

4. Operating leases as lessee:

The Company has taken land and building, office premises, showrooms, other business premises, vehicles and residential accommodation for some of its employees under operating lease arrangements, with an option of renewal at the end o the lease term and escalation clause in some of the cases. Lease payments charged during the year to the Statement Profit and Loss aggregate Rs. 316 lakhs (previous year Rs. 362 lakhs). The future minimum lease payments under non-cancellable operating leases are as follows:

5. Related party disclosures

A. Names of related parties:

Related parties and nature of related party relationship where control exists:

Description of Relationship Name of the Party

Ultimate Holding Company Eagleville Group B.V *

Holding Company Timex Group Luxury Watches B.V.

Other related parties:

Description of Relationship Name of the Party

Fellow Subsidiaries Timex Group B.V

Timex Nederland B.V

Timex Group B.V T/A Mersey Manufacturers Fralsen S.A.S*

__TMX Limited N.V_

Timex Group USA, Inc. (German Branch)*

Timex do Brasil Comedo E Indstria Ltda*

Timex Group USA, Inc.

Timex Group Precision Engineering Limited Timex Hong Kong Limited*

Timex Portugal Relojoaria LDA*

Timex Group Magyarorszag kft.*

Vertime B.V.

Key Management Personnel M.K Bandopadhyay, Managing Director -Operations and Supply Chain Management

(till 9 November 204)*

Sharmila Sahai, Managing Director

* No transactions during the current year

*Included in miscellaneous expenses

**Included in intangible assets as GSI implementation cost @ Included in sales promotion expense

Timex Group B.V., a fellow subsidiary, has provided a standby letter of credit amounting to Rs. 3,880 lakhs (previous year

Rs. 3,880 lakhs) to the bankers of the Company as a guarantee for use of cash credit and overdraft facilities (include working capital loans).

Period for redemption of 7.1% preference shares amounting to Rs. 1,570 lakhs (previous year Rs. 1,570 lakhs) is ten years from the date of allotment i.e. 27 March 2004, with an option to the Company of an earlier redemption after 27 March 2C05. The shares were due for redemption on 26 March 204. The redemption of such shares, pursuant to the provisions of Section 106 of the Companies Act, 1956 has been extended by the preference shareholders by five years i.e. till 26 March 20P and the Company has completed all formalities related to the same.

Period for redemption of 7.1% preference shares amounting to Rs. 2,290 lakhs (previous year Rs. 2,290 lakhs) is ten years from the date of allotment i.e. 21 March 2006, with an option to the Company of an earlier redemption after 21 March 2008. The shares were due for redemption on 20 March 206. The Company sought extension for redemption of such shares, pursuant to the provisions of Section 106 of the Companies Act, 1956 by five years i.e. till 20 March 2021. The preference shareholders and RBI have agreed to this extension. The Company has received an approval from the equity shareholders by postal ballot resolution dated 5 April 206 for extension of redemption date to 20 March 2021 progress, current assets and loans and advances. Segment liabilities include all operating liabilities in respect of segment and consist principally of creditors and accrued liabilities. Segment liabilities do not include share capital reserves, current tax and deferred tax liability. Primary segment assets do not include advance tax, deferred tax ass cash and bank balance and fixed deposits.

b) Segment revenue and expenses

Segment revenue and expenses are directly attributable to the segment and have been allocated to various segments o the basis of specific identification. However, segment revenue and expenses do not include interest and other income/ expense in respect of non-segmental activities.

# Amount is below rounding off threshold adopted by the Company.

6. As at 31 March 206, the Company has foreign currency receivables amounting to Rs. 39 lakhs (previous year Rs. 39 lakhs outstanding for a period exceeding nine months. As per Reserve Bank of Indias (RBI) Master Circular on Export of Goods Services, foreign currency receivables should be realized, except with prior approval of RBI, within a period of nine month The Company is in the process of complying with RBI guidelines in order to write-off these amounts.

7. Transfer Pricing

The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing regulation under sections 92-92F of the Income-Tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company continuously updates its documentation for the international transactions entered into with the associated enterprises during the financial year and expects such records to be in existence latest by such date as required under law. The management is of the opinion that its international transactions are at arm’s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

8. During the year ended 31 March 205, the Company renegotiated the terms of sales with one of its customers. This has resulted in reversal of provision for unearned margin recognized in the books of accounts in earlier years in respect this customer amounting to Rs.91 lakhs.

9. Pursuant to Companies Act, 203 (the Act)’ being effective from April , 204, the Company has revised depreciation rates on tangible assets as per useful life specified in Para ‘C’ of Schedule II of the Act. As a result of this change, the depreciation charge for the previous year ended 31 March 205 is higher by Rs. 9 lakhs. Further, based on transitional provision provided in note no. 7 (b) of Schedule II, an amount of Rs. 67 lakhs has been adjusted against opening balance of reserves and surplus for the year ended 31 March 205.

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Mar 31, 2015

Company overview

Timex Group India Limited (''TGIL'' or the ''Company''), a subsidiary of Timex Group Luxury Watches B.V., is a limited liability company incorporated on 4 October 1988 under the provisions of the Companies Act, 1956. The Company is listed on Bombay Stock Exchange in India.

The Company is engaged in the business of manufacturing and trading of watches and rendering of related after sales service. The Company''s manufacturing facilities are located at Baddi, Himachal Pradesh. The Company also provides accounting and information and technology support services to group companies.

1 Rights, preferences and restrictions attached to equity shares

The Company has only one class of equity shares having a par value of Re. 1 per share. Each holder of equity shares is entitled to one vote per share. All equity shareholders rank equally with regard to dividends and share in the Company''s residual assets. The equity shareholders are entitled to receive dividend as declared by the Company subject to payment of dividend to preference shareholders.

In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Rights, preferences and restrictions attached to preference shares

0.1% Non-cumulative redeemable non-convertible preference shares shall be entitled to dividend at the rate of 0.1% per annum. In case of insufficiency of profits /no profits, the dividend on preference shares shall not be declared and distributed and the dividend liability on the preference shares for the respective year shall lapse.

7.1% Cumulative redeemable non-convertible preference shares shall be entitled to dividend at the rate of 7.1% per annum. In case of insufficiency of profits /no profits, the dividend on preference shares shall not be declared and distributed in the respective year but the dividend liability on the preference shares for that respective year shall be cumulated and paid to the holders of the preference shares.

Preference shares of all classes carry a preferential right as to dividend over equity shareholders. Where dividend on cumulative preference shares is not declared for a financial year, the entitlement thereto is carried forward whereas in the case of non-cumulative preference shares, the entitlement for that year lapses. The preference shares are entitled to one vote per share at meetings of the Company on any resolutions of the Company directly affecting their rights. In the event of liquidation, preference shareholders have a preferential right over equity shareholders to be repaid to the extent of capital paid-up and dividend in arrears on such shares.

2 Terms of redemption of preference shares

Maturity period for redemption of 0.1% preference shares amounting to Rs. 250 lakhs (previous year Rs. 250 lakhs) is till 24 March 2018 . Original maturity was ten years from the date of allotment i.e. 25 March 2003, with an option to the Company of an earlier redemption after 24 March 2005. The shares were due for redemption on 24 March 2013 which pursuant to the provisions of section 106 of the Companies Act, 1956 was extended by the Company with the consent of preference shareholders by five years, i.e. till 24 March 2018.

Maturity period for redemption of 7.1% preference shares amounting to Rs. 1,570 lakhs (previous year Rs. 1,570 lakhs) is till 26 March 2019. Original maturity was ten years from the date of allotment i.e. 27 March 2004, with an option to the Company of an earlier redemption after 27 March 2006. The shares were due for redemption on 26 March 2014 which pursuant to the provisions of Section 106 of the Companies Act, 1956 was extended by the Company with the consent of preference shareholders by the five years i.e. till 26 March 2019.

Maturity period for redemption of 7.1% preference shares amounting to Rs. 2,290 lakhs (previous year Rs. 2,290 lakhs) is ten years from the date of allotment i.e. 21 March 2006, with an option to the Company of an earlier redemption after 21 March 2008.

3 Provision for warranties

A provision is estimated for expected warranty claims in respect of products sold during the year on the basis of a technical evaluation and past experience regarding failure trends of products and costs of rectification or replacement. It is expected that most of this cost will be incurred over the next one year as per warranty terms.

4 Provision for sales returns

Provision for sales returns has been created for estimated loss of margin on expected sales returns in future period against products sold during the year. The provision has been setup based on management''s estimates and past trends.

5 Provision for unearned margin

Provision for unearned margin relates to certain sales where property in the goods has passed but a significant risk of ownership has not passed to the counterparty by the date of the balance sheet.

6 Provision for litigations

This represents provisions made for probable liabilities/ claims arising out of pending disputes/litigations with various regulatory authorities (in respect of excise duty, sales tax and similar matters). Above provisions are affected by numerous uncertainties and management has taken all efforts to make a best estimate. Timing of outflow of resources will depend upon timing of decision of cases.

* Cash credit facilities from bank carry interest ranging between 10%-13% p.a., computed on a monthly basis on actual amount utilised, and are repayable on demand.

Timex Group Luxury Watches BV, the holding company, has provided a standby letter of credit amounting to Rs. 3,880 lakhs (previous year Rs. 3,380 lakhs) to the bankers of the Company as a guarantee for use of cash credit and overdraft facilities.

** Working capital loans carry interest ranging between 10% to 11% p.a. The working capital loans are guaranteed by Timex Group B.V, the holding company and are repayable within 30 days.

7 Managerial remuneration of Rs 7.46 lakhs paid by the Company during the year ended 31 March 2012 was in excess of the amount approved by the Central Government. The Company''s application for approval of such excess remuneration was rejected by Central Government vide its letter dated 26 July 2012. The Company had requested the Central Government to reconsider the same and an application was made in this regard by the Company vide its letter dated 30 August 2012.

In response, the Company received direction from Central Government to recover the excess remuneration of Rs. 7.09 lakhs paid during the year ended 31 March 2012. Subsequently, the Company filed an application with the Central Government for waiver of such excess remuneration paid, since the concerned managerial person has resigned w.e.f. 31 January 2013.

In the current year, the Central government vide its letter dated 18 November 2014, has rejected the application filed by the Company for waiver of remuneration paid in excess of the limits specified in the Companies Act, 1956. The Company is in the process of taking necessary steps for recovery of this amount from the erstwhile Managing Director.

8 Earnings/ (loss) per equity share (EPS)

Basic earnings/ (loss) per equity share

The calculation of basic earnings/ (loss) per equity share for the year ended 31 March 2015 is based on the profit/ (loss) attributable to equity shareholders of Rs. (1,428) lakhs (previous year loss: Rs. (3,619) lakhs), and weighted average number of equity shares outstanding of 1,010 lakhs (previous year: 1,010 lakhs).

Diluted earnings / (loss) per equity share

The calculation of diluted earnings/(loss) per share for the year ended 31 March 2015 is based on profit/(loss) attributable to equity shareholders of Rs. (1,428) lakhs (previous year loss: Rs(3,619)lakhs and weighted average number of equity shares outstanding after adjustment for the effects of all dilutive potential equity shares of 1,010 lakhs (previous year: 1,010 lakhs).

9 Employee benefits: Post-employment benefit plans Provident fund

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Provident Fund. The Company has no obligations other than to make the specified contributions. The contributions are charged to the Statement of Profit and Loss as they accrue. The amount recognised as an expense towards contribution to Provident Fund for the period aggregated to Rs. 84 lakhs (previous year: Rs. 76 lakhs).

The Company also has an approved provident fund for its own employees, which is exempt from the Income tax Act 1961. In order to comply with the provisions of the Act, the Company matches the interest declared by Regional Provident Fund (RPFC) to its own subscribers. To the extent that the actual interest earned by the Company''s private fund falls short of the rate declared by RPFC, the shortfall is met by the Company. The benefit valued is the interest shortfall, if any, for future years on the provident fund balances of the employees.

The Defined Benefit Obligation of interest rate guarantee on exempt provident fund in respect of the employees of the Company as at 31 March 2015 works out to Rs. Nil (previous year Rs. Nil). The balance in the surplus account of the provident fund is Rs. 114 lakhs (previous year Rs. 92 lakhs) and hence the net liability which needs to be provided for in the books of accounts of the Company is Rs. Nil (previous year Nil).

Superannuation fund

The Company''s contribution paid/ payable under the scheme to the Superannuation Fund Trust, as administered by the Company is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.The amount recognised as an expense towards contribution to Superannuation fund for the period aggregated to Rs. 13 lakhs (previous year: Rs. 20 lakhs).

Employee State Insurance fund

The Company''s contribution paid/ payable under the scheme to the Employee State Insurance is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.The amount recognised as an expense towards contribution to Employee State Insurance Fund for the period aggregated to Rs. 5 lakhs (previous year: Rs. 7 lakhs).

10 Segment information

The Company''s business segment comprises:

* Watches: Manufacturing and trading of watches;

* Others: Providing IT and finance related back office support to other group companies.

Segment revenue in the geographical segments considered for disclosure are as follows:

* Revenues within India (Domestic) includes sale of watches and spares to consumers located within India; and

* Revenues outside India (Overseas) includes sale of watches manufactured in India and service income earned from customers located outside India.

Segments have been identified in line with the Accounting Standard 17 on "Segment Reporting" notified by the Companies (Accounting Standards) Rules, 2006, taking into account the nature of products and services, the risks and returns, the organisation structure and the internal financial reporting system.

Segment accounting policies

Besides the normal accounting policies followed as described in note 2, segment revenues, results, assets and liabilities include the respective amounts directly identified to each of the segments and amounts allocated on a reasonable basis. The description of segment assets and liabilities and the accounting policies in relation to segment accounting are as under:

a) Segment assets and liabilities

Segment assets include all operating assets used by a segment and consist principally of fixed assets, capital work in progress, current assets and loans and advances. Segment liabilities include all operating liabilities in respect of a segment and consist principally of creditors and accrued liabilities. Segment liabilities do not include share capital, reserves, current tax and deferred tax liability.Primary segment assets do not include advance tax, deferred tax asset, cash and bank balance and fixed deposits.

b) Segment revenue and expenses

Segment revenue and expenses are directly attributable to the segment and have been allocated to various segments on the basis of specific identification. However, segment revenue and expenses do not include interest and other income/expense in respect of non segmental activities.

11 Contingent liabilities and commitments (to the extent not provided for)

Commitments (Rs. in lakhs)

Particulars 31 March 2015 31 March 2014

Estimated amount of contracts 15 - remaining to be executed on capital account and not provided for (net of advances)

Contingent liabilities (Rs. in lakhs)

Particulars 31 March 2015 31 March 2014

Claims against the Company not acknowledged as debts

a) Sales tax 283 119

b) Excise duty 92 92

c) Customs duty 8 8

d) Income tax* - -

e) Others 141 167"

Dividend on cumulative preference shares

2012-2013 274 274

2013-2014 274 274

2014-2015 274 L

Corporate dividend tax on cumulative preference shares

2012-2013 56 47

2013-2014 56 47

2014-2015 56

* Represents additions made to the total taxable income of the Company by the tax authorities which have been disputed by the Company. No demand has been raised by the tax authorities as any additions to the income will be adjusted against the brought forward losses / unabsorbed depreciation.

12 The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises as on 31 March 2015 and 31 March 2014 has been made in the financial statements based on information received and available with the Company. Based on the information currently available with the Company, there are no dues payable to Micro and Small Suppliers as defined in the Micro, Small and Medium Enterprises Development Act, 2006.

13 The dividend liability on 15,700,000 2.9% cumulative redeemable non-convertible preference shares of Rs.10 each and 22,900,000 5.4% cumulative redeemable non-convertible preference shares of Rs. 10 each, payable until 31 March 2009, was waived off as per the consent of the holders of these preference shares vide their letter dated 15 March 2009. The coupon rate applicable to these series of preference shares was revised to 7.1% effective 1 April 2010 till the date of maturity.

14 As at 31 March 2015, the Company has foreign currency receivables amounting to Rs. 39 lakhs (previous year Rs. 40 lakhs) outstanding for a period exceeding nine months. As per Reserve Bank of India''s (RBI) Master Circular on Export of Goods and Services, foreign currency receivables should be realized, except with prior approval of RBI, within a period of nine months. The Company is in the process of filing an application with RBI to seek approval for writing off these amounts.

15 Transfer Pricing

The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing regulation under sections 92-92F of the Income-Tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company continuously updates its documentation for the international transactions entered into with the associated enterprises during the financial year and expects such records to be in existence latest by such date as required under law. The management is of the opinion that its international transactions are at arm''s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

16 During the year, the Company has renegotiated the terms of sales with one of its customers. This has resulted in reversal of provision for unearned margin recognised in the books of accounts in earlier years in respect of this customer amounting to Rs. 171 lakhs.

17 Pursuant to Companies Act, 2013 ("the Act") being effective from April 1, 2014, the Company has revised depreciation rates on tangible assets as per useful life specified in Para ''C'' of Schedule II of the Act. As a result of this change, the depreciation charge for the year ended 31 March 2015 is higher by Rs. 19 lakhs.Further, based on transitional provision provided in note no. 7 (b) of Schedule II, an amount of Rs. 67 lakhs has been adjusted against opening balance of reserves and surplus.

---

Mar 31, 2014

1. Company overview

Timex Group India Limited (''TGIL'' or the ''Company''), a subsidiary of Timex Group Luxury Watches B.V., is a limited liability company incorporated on 4 October 1988 under the provisions of the Companies Act, 1956. The Company is listed on Bombay Stock Exchange in India.

The Company is engaged in the business of manufacturing and trading of watches and rendering of related after sales service. The Company''s manufacturing facilities are located at Baddi, Himachal Pradesh. The Company also provides accounting and information and technology support services to group companies.

2. Managerial remuneration of Rs 7.46 lakhs paid by the Company during the year ended 31 March 2012 was in excess of amount approved by the Central Government. The Company''s application for approval of such excess remuneration was rejected by Central Government vide its letter dated 26 July 2012. The Company had requested the Central Government to re-consider the same and an application had been made in this regard by the Company vide its letter dated 30 August 2012.

The Company has received a direction to recover the excess remuneration paid till date and is in the process of fling an application with the Central Government for waiver of such excess remuneration paid, since the concerned managerial person has resigned w.e.f 31 January 2013.

3. Earnings/ (loss) per equity share (EPS)

Basic earnings/ (loss) per equity share

The calculation of basic earnings/ (loss) per equity share for the year ended 31 March 2014 is based on the loss attribut- able to equity shareholders of Rs. (3,617) lakhs (previous year loss: Rs. (4,515) lakhs), and weighted average number of equity shares outstanding of 1,010 lakhs (previous year: 1,010 lakhs).

Diluted earnings / (loss) per equity share

The calculation of diluted earnings/(loss) per share for the year ended 31 March 2013 is based on loss attributable to equity shareholders of Rs. (3,617) lakhs (previous year loss: Rs (4,515) lakhs and weighted average number of equity shares out- standing after adjustment for the effects of all dilutive potential equity shares of 1,010 lakhs (previous year: 1,010 lakhs).

4. Employee benefits: Post-employment benefit plans Provident fund

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Provident Fund. The Company has no obligations other than to make the specified contributions. The contributions are charged to the Statement of profit and Loss as they accrue. The amount recognised as an expense towards contribution to Provident Fund for the period aggregated to Rs. 76 lakhs (previous year: Rs. 80 lakhs).

The Company also has an approved provident fund for its own employees, which is exempt from the Income tax Act 1961. In order to comply with the provisions of the Act, the Company matches the interest declared by Regional Provident Fund (RPFC) to its own subscribers. To the extent that the actual interest earned by the Company''s private fund falls short of the rate declared by RPFC, the shortfall is met by the Company. The benefit valued is the interest shortfall, if any, for future years on the provident fund balances of the employees.

The Defined benefit Obligation of interest rate guarantee on exempt provident fund in respect of the employees of the Company as at 31 March 2014 works out to Rs. Nil. The balance in the surplus account of the provident fund is Rs. 116 lakhs (previous year Rs. 1,026 lakhs) and hence the net liability which needs to be provided for in the books of accounts of the Company is Rs. Nil (previous year Nil).

Superannuation fund

The Company''s contribution paid/ payable under the scheme to the Superannuation Fund Trust, as administered by the Company is recognised as an expense in the Statement of profit and Loss during the period in which the employee renders the related service. The amount recognised as an expense towards contribution to Superannuation fund for the period aggregated to Rs. 20 lakhs (previous year: Rs. 44 lakhs).

Employee State Insurance fund

The Company''s contribution paid/ payable under the scheme to the Employee State Insurance is recognised as an expense in the Statement of profit and Loss during the period in which the employee renders the related service. The amount recognised as an expense towards contribution to Employee State Insurance Fund for the period aggregated to Rs. 7 lakhs (previous year: Rs. 6 lakhs).

Gratuity

The Company operates a post-employment Defined benefit plan that provides for gratuity. The gratuity plan entitles an employee, who has rendered atleast five years of continuous service, to receive one-half month''s salary for each year of completed service at the time of retirement/exit. The Scheme is not funded by plan assets. The following table summarises the position of assets and obligations in relation to the plan:

The estimates of future salary increases considered in actuarial valuation take account of infation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

Assumptions regarding future mortality are based on published statistics and mortality tables. The calculation of the Defined benefit obligation is sensitive to the mortality assumptions.

5. Related party disclosures A. Names of related parties:

Related parties and nature of related party relationship where control exists:

Description of Relationship Name of the Party

Ultimate Holding Company Timex Group B.V.

Holding Company Timex Group Luxury Watches B.V (formerly Timex Watches B.V)

Other related parties with whom transactions have taken place:

Description of Relationship

Fellow Subsidiaries

Name of the Party

Timex Group B.V. T/A Mersey Manufacturers

Fralsen Horlogerie S.A.*

TMX Limited NV

Timex Corporation (Germany)*

Timex Limited NV

Timex Nederland B.V.

Timex Group USA Inc.

Timex Group Luxury Watches B.V. (Ferragamo) **

Timex Group Precision Engineering Limited (TGPEL)

Timex Hong Kong Limited*

Timex Portugal*

Timex Hungary Limited*

Description of Relationship

Key Management Personnel

Name of the Party

Vertime S.A.**

Vertime B.V.**

M.K Bandopadhyay

- Acting Managing Director (1 February 2013 to 17 November 2013)

- Managing Director – Operations and Supply Chain Management (18 November 2013 onwards)

Sharmila Sahai, Managing Director (18 November 2013 onwards)

a. Transactions and outstanding balances with related parties (Rs. in lakhs)

Besides the above, the Company has paid Nil (previous year Rs. 274 lakhs) to Timex Group Luxury Watches B.V. as dividend during the year.

Timex Group Luxury Watches B V, the holding company, has provided a standby letter of credit amounting to Rs. 3,380 lakhs (previous year Rs. 3,380 lakhs) to the bankers of the Company as a guarantee for use of cash credit and overdraft facilities. The working capital loans are also guaranteed by Timex Group B.V, the holding company.

Maturity period for redemption of 0.1% preference shares amounting to Rs. 250 lakhs (previous year Rs.250 lakhs) is ten years from the date of allotment i.e. 25 March 2003, with an option to the Company of an earlier redemption after 24 March 2005. The shares were due for redemption on 24 March 2013. The redemption of such shares, pursuant to the provisions of Section 106 of the Companies Act, 1956 has been extended by the preference shareholders by five years i.e. till 24 March 2018 and the Company has completed all formalities related to the same.

Maturity period for redemption of 7.1% preference shares amounting to Rs. 1,570 lakhs (previous year Rs. 1,570 lakhs) is ten years from the date of allotment i.e. 27 March 2004, with an option to the Company of an earlier redemption after 27 March 2006. The shares were due for redemption on 26 March 2014. The Company sought extension for redemption of such shares, pursuant to the provisions of Section 106 of the Companies Act, 1956 by five years i.e. till 26 March 2019. The preference shareholders have agreed to this extension. The Company is in the process of complying with the provisions of the Companies Act, 1956 in relation to the same and has received approval from the Reserve Bank of India vide its letter dated 09 April 2014 for extension of redemption date to 26 March 2019.

6. Segment information

The Company''s business segment comprises:

- Watches: Manufacturing and trading of watches;

- Others: Providing IT and finance related back office support to other group companies. Segment revenue in the geographical segments considered for disclosure are as follows:

- Revenues within India (Domestic) includes sale of watches and spares to consumers located within India; and

- Revenues outside India (Overseas) includes sale of watches manufactured in India and service income earned from customers located outside India.

Segments have been identified in line with the Accounting Standard 17 on "Segment Reporting" notifed by the Companies (Accounting Standards) Rules, 2006, taking into account the nature of products and services, the risks and returns, the organisation structure and the internal financial reporting system.

Secondary segment reporting is performed on the basis of the geographical segments.

Segment accounting policies

Besides the normal accounting policies followed as described in note 2, segment revenues, results, assets and liabilities include the respective amounts directly identified to each of the segments and amounts allocated on a reasonable basis. The description of segment assets and liabilities and the accounting policies in relation to segment accounting are as under:

a) Segment assets and liabilities

Segment assets include all operating assets used by a segment and consist principally of fixed assets, capital work in progress, current assets and loans and advances. Segment liabilities include all operating liabilities in respect of a segment and consist principally of creditors and accrued liabilities. Segment liabilities do not include share capital, reserves, current tax and deferred tax liability. Primary segment assets do not include advance tax, deferred tax asset and fixed deposits.

b) Segment revenue and expenses

Segment revenue and expenses are directly attributable to the segment and have been allocated to various segments on the basis of Specific identifcation. However, segment revenue and expenses do not include interest and other income/expense in respect of non segmental activities.

7. Contingent liabilities and commitments (to the extent not provided for)

Commitments (Rs. in lakhs)

Particulars 31 March 2014 31 March 2013

Estimated amount of contracts remaining to be executed on capital - 0 # account and not provided for (net of advances)

# Amount is below rounding of threshold adopted by the Company.

Contingent liabilities (Rs. in lakhs

Particulars 31 March 2014 31 March 2013

Claims against the Company not acknowledged as debts

a) Sales tax 119 107

b) Excise duty 92 92

c) Customs duty 8 8

d) Income tax* - -

e) Others 167 167

Dividend on cumulative preference shares

2012-2013 274 274

2013-2014 274 -

Corporate dividend tax on cumulative preference shares

2012-2013 47 45

2013-2014 47 -

Bills discounted - 2

* Represents additions made to the total taxable income of the Company by the tax authorities which have been disputed by the Company. No demand has been raised by the tax authorities as any additions to the income will be adjusted against the brought forward losses / unabsorbed depreciation.

8. The Ministry of Micro, Small and Medium Enterprises has issued an office Memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after fling of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises 31 March 2014 and 31 March 2013 has been made in the financial statements based on information received and available with the Company. Based on the information currently available with the Company, there are no dues payable to Micro and Small Suppliers as Defined in the Micro, Small and Medium

Enterprises Development Act, 2006. 40. The dividend liability on 15,700,000 2.9% cumulative redeemable non-convertible preference shares of Rs.10 each and 22,900,000 5.4% cumulative redeemable non-convertible preference shares of Rs. 10 each, payable until 31 March 2009, was waived off as per the consent of the holders of these preference shares vide their letter dated 15 March 2009. The coupon rate applicable to these series of preference shares was revised to 7.1% effective 1 April 2010 till the date of maturity.

9. Amount remitted during the year ended 31 March 2014 in foreign currency on account of dividend was Rs. Nil (previous year Rs. 274 lakhs).

10. As at 31 March 2014, the Company has foreign currency receivables amounting to Rs. 40 lakhs (previous year Rs. 49 lakhs) outstanding for a period exceeding one year. As per Reserve Bank of India''s (RBI) Master Circular on Export of Goods and Services, foreign currency receivables should be realized, except with prior approval of RBI, within a period of one year. The Company is in the process of fling an application with RBI to seek approval for writing off these amounts.

11. Transfer Pricing

The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing regulation under sections 92-92F of the Income-Tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company continuously updates its documentation for the international transactions entered into with the associated enterprises during the financial year and expects such records to be in existence latest by such date as required under law. The management is of the opinion that its international transactions are at arms length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

---

Mar 31, 2013

1. Company overview

Timex Group India Limited (''TGIL'' or the ''Company''), a subsidiary of Timex Group Luxury Watches B.V., is a limited liability company incorporated on 4 October 1988 under the provisions of the Companies Act, 1956. The Company is listed on Bombay Stock Exchange in India.

The Company is engaged in the business of manufacturing and trading of watches and rendering of related after sales service. The Company''s manufacturing facilities are located at Baddi, Himachal Pradesh. The Company also provides information and technology support services to group companies.

2. Earnings per share (EPS)

Basic earnings per share

The calculation of basic earnings per share for the year ended 31 March 2013 is based on the proft/ (loss) attributable to equity shareholders of Rs. (4,514) lakhs (previous year proft: Rs 134 lakhs), and weighted average number of equity shares outstanding of 1,010 lakhs (previous year: 1,010 lakhs).

Diluted earnings per share

The calculation of diluted earnings per share for the year ended 31 March 2013 is based on proft/ (loss) attributable to equity shareholders of Rs. (4,514) lakhs (previous year proft: Rs 134 lakhs) and weighted average number of equity shares outstanding after adjustment for the effects of all dilutive potential equity shares of 1,010 lakhs (previous year: 1,010 lakhs).

3. Employee benefts: Post-employment beneft plans

Provident fund

The Company makes contributions, determined as a specifed percentage of employee salaries, in respect of qualifying employees towards Provident Fund. The Company has no obligations other than to make the specifed contributions. The contributions are charged to the Statement of Proft and Loss as they accrue. The amount recognised as an expense towards contribution to Provident Fund for the period aggregated to Rs. 80 lakhs (previous year: Rs. 70 lakhs).

The Company also has an approved provident fund for its own employees, which is exempt from the Income tax Act 1961. In order to comply with the provisions of the Act, the Company matches the interest declared by Regional Provi- dent Fund (RPFC) to its own subscribers. To the extent that the actual interest earned by the Company''s private fund falls short of the rate declared by RPFC, the shortfall is met by the Company. The beneft valued is the interest shortfall, if any, for future years on the provident fund balances of the employees.

The Defned Beneft Obligation of interest rate guarantee on exempt provident fund in respect of the employees of the Company as at 31 March 2013 works out to Rs. Nil. The balance in the surplus account of the provident fund is Rs. 1,026 lakhs and hence the net liability which needs to be provided for in the books of accounts of the Company is Rs. Nil. Contri

Superannuation fund

The Company''s contribution paid/ payable under the scheme to the Superannuation Fund Trust, as administered by the Company is recognised as an expense in the Statement of Proft and Loss during the period in which the employee renders the related service. The amount recognised as an expense towards contribution to Superannuation fund for the period aggregated to Rs. 44 lakhs (previous year: Rs. 40 lakhs).

Employee State Insurance fund

The Company''s contribution paid/ payable under the scheme to the Employee State Insurance is recognised as an expense in the Statement of Proft and Loss during the period in which the employee renders the related service. The amount recognised as an expense towards contribution to Employee State Insurance Fund for the period aggregated to Rs. 6 lakhs (previous year: Rs. 8 lakhs).

Gratuity

The Company operates a post-employment defned beneft plan that provides for gratuity. The gratuity plan entitles an employee, who has rendered atleast fve years of continuous service, to receive one-half month''s salary for each year of completed service at the time of retirement/exit. The Scheme is not funded by plan assets. The following table sum- marises the position of assets and obligations in relation to the plan:

4. Taxation

The Company has signifcant unabsorbed depreciation and carry forward losses. In view of the absence of virtual certainty of realisation of carried forward tax losses and unabsorbed depreciation, deferred tax assets are recognised only to the extent of deferred tax liabilities.

5. Segment information

The Company''s business segment comprises:

- Watches: Manufacturing and trading of watches;

- Others: Providing IT and fnance related back offce support to other group companies.

Segment revenue in the geographical segments considered for disclosure are as follows:

- Revenues within India (Domestic) includes sale of watches and spares to consumers located within India; and

- Revenues outside India (Overseas) includes sale of watches manufactured in India and service income earned from customers located outside India.

Segments have been identifed in line with the Accounting Standard 17 on "Segment Reporting" notifed by the Companies (Accounting Standards) Rules, 2006, taking into account the nature of products and services, the risks and returns, the organisation structure and the internal fnancial reporting system.

Secondary segment reporting is performed on the basis of the geographical segments.

Segment accounting policies

Besides the normal accounting policies followed as described in note 2, segment revenues, results, assets and liabilities include the respective amounts directly identifed to each of the segments and amounts allocated on a reasonable basis. The description of segment assets and liabilities and the accounting policies in relation to segment accounting are as under:

a) Segment assets and liabilities

Segment assets include all operating assets used by a segment and consist principally of fxed assets, capital work in progress, current assets and loans and advances. Segment liabilities include all operating liabilities in respect of a segment and consist principally of creditors and accrued liabilities. Segment liabilities do not include share capital, reserves, current tax and deferred tax liability. Primary segment assets do not include advance tax, deferred tax asset and fxed deposits.

b) Segment revenue and expenses

Segment revenue and expenses are directly attributable to the segment and have been allocated to various segments on the basis of specifc identifcation. However, segment revenue and expenses do not include interest and other income/expense in respect of non segmental activities.

6. Contingent liabilities and commitments

(to the extent not provided for)

Commitments (Rs. in lakhs)

Particulars 31 March 2013 31 March 2012

Estimated amount of contracts remaining to be executed on capital account 0# 1

and not provided for (net of advances)

# Amount is below rounding of threshold adopted by the Company.

Contingent liabilities (Rs. in lakhs)

Particulars 31 March 2013 31 March 2012

Claims against the Company not acknowledged as debts

a) Sales tax 107 79

b) Excise duty 92 92

c) Customs duty 8 8

d) Income tax* - -

e) Others 167 144

Dividend on cumulative preference shares

- 2012-2013 274 - Corporate dividend tax on cumulative preference shares

- 2012-2013 45 - Bills discounted 2 462

* Represents additions made to the total taxable income of the Company by the tax authorities which have been disputed by the Company. No demand has been raised by the tax authorities as any additions to the income will be adjusted against the brought forward losses / unabsorbed depreciation.

7. The Ministry of Micro, Small and Medium Enterprises has issued an Offce Memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after fling of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises 31 March 2013 and 31 March 2012 has been made in the fnancial statements based on information received and available with the Company. Based on the information currently available with the Company, there are no dues payable to Micro and Small Suppliers as defned in the Micro, Small and Medium Enterprises Development Act, 2006.

8. The dividend liability on 15,700,000 2.9% cumulative redeemable non-convertible preference shares of Rs.10 each and 22,900,000 5.4% cumulative redeemable non-convertible preference shares of Rs. 10 each, payable until 31 March 2009, was waived off as per the consent of the holders of these preference shares vide their letter dated 15 March 2009. The coupon rate applicable to these series of preference shares was revised to 7.1% effective 1 April 2010 till the date of maturity.

9. As at 31 March 2013, the Company has foreign currency receivables amounting to Rs. 49 lakhs (previous year Rs. 34 lakhs) outstanding for a period exceeding one year. As per Reserve Bank of India''s (RBI) Master Circular on Export of Goods and Services, foreign currency receivables should be realized, except with prior approval of RBI, within a period of one year. The Company has fled an application with Authorized dealer (AD) / RBI for condonation and extension of period of collection.

10. Transfer Pricing

The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing regulation under sections 92-92F of the Income-Tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company continuously updates its documentation for the international transactions entered into with the associated enterprises during the fnancial year and expects such records to be in existence latest by such date as required under law. The management is of the opinion that its international transactions are at arms length so that the aforesaid legislation will not have any impact on the fnancial statements, particularly on the amount of tax expense and that of provision for taxation.

11. Managerial remuneration of Rs. 7 lakhs provided by the Company in the previous year is in excess of the limits specifed in the relevant provisions of the Companies Act, 1956 and the amount approved by the Central Government. Further, as required by the relevant provisions of the Act, the Company is taking necessary steps to seek approval from the Central Government for excess remuneration paid.

Further, the Company had applied to the Central Government seeking approval of managerial remuneration for the period 29 April 2012 till 28 April 2013 vide its application dated 7 September 2012. The remuneration paid is in excess of the limits specifed in the Companies Act, 1956. The managerial person of the Company in respect whom the approval was sought has since resigned with effect from 31 January 2013. As required by the relevant provisions of the Act, the Company is taking necessary steps to seek approval from the Central Government for excess remuneration paid.

---

Mar 31, 2012

1. General information

Timex Group India Limited ("TGIL" or the "Company"), a subsidiary of Timex Group Luxury Watches B.V, is a limited liability company incorporated on 4 October 1988 under the provisions of the Companies Act, 1956. The Company is listed on Bombay Stock Exchange in India.

The Company is engaged in the business of manufacturing and trading of watches and rendering of related after sales service. The Company's manufacturing facilities are located at Baddi, Himachal Pradesh. The Company also provides accounting and information and technology support services to group companies.

2. Basis of preparation of financial statements

The financial statements are prepared and presented under the historical cost convention, on accrual basis of accounting in accordance with the Generally Accepted Accounting Principles ("GAAP") in India and comply with the accounting standards prescribed by the Companies (Accounting Standards) Rules, 2006 and the presentational requirements of the Companies Act, 1956, to the extent applicable All the assets and liabilities have been classified as current and non-current as per the Company's normal operating cycle and other criteria set out in the revised schedule VI to the Companies Act, 1956.Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle being a period within 12 months for the purpose of classification of assets and liabilities as current and non-current.

a. Terms / rights attached to equity shares

The Company has only one class of equity shares having a par value of Re. 1 per share. Each holder of equity shares is entitled to one vote per share.

In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

b. Terms / rights attached to preference shares

- 0.1% Non-cumulative redeemable non-convertible preference shares shall be entitled to dividend at the rate of 0.1%

per annum. In case of insufficiency of profits /no profits, the dividend on preference shares shall not be declared and distributed and the dividend liability on the preference shares for the respective year's shall lapse.

- 7.1% Cumulative redeemable non-convertible preference shares shall be entitled to dividend at the rate of 7.1% per annum. In case of insufficiency of profits /no profits, the dividend on preference shares shall not be declared and distributed in the respective year but the dividend liability on the preference shares for that respective year's shall be cumulated and paid to the holders of the preference shares.

- 7.1% Cumulative redeemable non-convertible preference shares shall be entitled to dividend at the rate of 7.1% per annum. In case of insufficiency of profits /no profits, the dividend on preference shares shall not be declared and distributed in the respective year but the dividend liability on the preference shares for that respective year's shall be cumulated and paid to the holders of the preference shares.

c Terms of redemption of preference shares

- Maturity period for redemption of 0.1% preference shares amounting to Rs. 250 (Previous year Rs. 250) is ten years from the date of allotment i.e. 25 March 2003, with an option to the Company of an earlier redemption after 24 March 2005.

- Maturity period for redemption of 7.1% preference shares amounting to Rs. 1,570 (previous year Rs. 1,570) is ten years from the date of allotment i.e. 27 March 2004, with an option to the Company of an earlier redemption after 27 March 2006. (Refer note 27)

- Maturity period for redemption of 7.1% preference shares amounting to Rs. 2,290 (previous year Rs. 2,290) is ten years from the date of allotment i.e. 27 March 2004, with an option to the Company of an earlier redemption after 27 March 2006. (Refer note 27)

1. (a) Capital and other commitments (Rs. in lakhs)

As at As at

Particulars 31 March 2012 31 March 2011

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) 1 5

(b) Contingent liabilities (Rs. in lakhs)

As at As at

Particulars 31 March 2012 31 March 2011

Claims against the Company not acknowledged as debts a) Sales tax 79 79

b) Excise duty 92 92

c) Customs duty 8 8

d) Income tax - 67

e) Others 144 128* Bills discounted 462 457

*During the previous years, the Company had received a notice from the relevant Government authorities for non payment of stamp duty on a lease entered into by the Company. The demand order of the same has not been received by the Company in the previous year and the liability on this account could not be ascertained. During the current year, the aforesaid demand order has been received and the amount has been settled.

2. The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2012 and as at 31 March 2011 has been made in the financial statements based on information received and available with the Company. Based on the information currently available with the Company, there are no dues payable to Micro and Small Suppliers as defined in the Micro, Small and Medium Enterprises Development Act, 2006.

3. The dividend liability on 15,700,000 2.9% cumulative redeemable non-convertible preference shares of Rs.10 each and 22,900,000 5.4% cumulative redeemable non-convertible preference shares of Rs. 10 each, payable until 31 March 2009, was waived off as per the consent of the holders of these preference shares vide their letter dated 15 March 2009. The coupon rate applicable to these series of preference shares was revised to 7.1% effective 1 April 2010 till the date of maturity.

Besides the above, the Company has paid Rs. 274 lakhs (previous year Rs. 274 lakhs) to Timex Group Luxury Watches

B.V. as dividend during the year.

Timex Group Luxury Watches BV, the holding company, has provided a standby letter of credit amounting to Rs. 1,780 lakhs (previous year Rs. 1,780 lakhs) to the bankers of the Company as a guarantee for use of cash credit and overdraft facilities.

4. Loans and advances include dues from Managing Director of the Company Rs. Nil (previous year Rs. 2 lakhs).

5. Taxation

The Company has significant unabsorbed depreciation. In view of the absence of virtual certainty of realization of carried forward tax losses and unabsorbed depreciation allowance, deferred tax assets are recognized only to the extent of deferred tax liabilities.

6. Segment information

The Company's business segment comprises:

- Watches: Manufacturing and trading of watches;

- Others: Providing IT and finance related back office support to other group companies.

Segment revenue in the geographical segments considered for disclosure are as follows:

- Revenues within India (Domestic) includes sale of watches and spares to consumers located within India; and

- Revenues outside India (Overseas) includes sale of watches manufactured in India and service income earned from customers located outside India.

Segments have been identified in line with the Accounting Standard 17 on "Segment Reporting" notified by the Companies (Accounting Standards) Rules, 2006, taking into account the nature of products and services, the risks and returns, the organization structure and the internal financial reporting system.

Secondary segment reporting is performed on the basis of the geographical segments.

Segment accounting policies

Besides the normal accounting policies followed as described in note 2, segment revenues, results, assets and liabilities include the respective amounts directly identified to each of the segments and amounts allocated on a reasonable basis. The description of segment assets and liabilities and the accounting policies in relation to segment accounting are as under:

a) Segment assets and liabilities

Segment assets include all operating assets used by a segment and consist principally of fixed assets, capital work in progress, current assets and loans and advances. Segment liabilities include all operating liabilities in respect of a segment and consist principally of creditors and accrued liabilities. Segment liabilities do not include share capital, reserves, current tax and deferred tax liability. Segment assets do not include advance tax, deferred tax asset and fixed deposits.

b) Segment revenue and expenses

Segment revenue and expenses are directly attributable to the segment and have been allocated to various segments on the basis of specific identification. However, segment revenue and expenses do not include interest and other income/ expense in respect of non segmental activities.

7. Employee benefits

The Company primarily provide the following benefits to its employees:

(a) Gratuity

(b) Provident fund

(i) The amount recognized as an expense under defined contribution plans for employer contribution Rs. 118 lakhs (previous year Rs. 100 lakhs).

(ii) The details of employee benefits with regard to provision/charge for the year on account of gratuity, which is in the nature of an unfunded defined benefit are as under:

The Company has an approved provident fund for its own employees, which is exempt from the Income tax Act 1961. In order to comply with the provisions of the Act, the Company matches the interest declared by Regional Provident Fund (RPFC) to its own subscribers. To the extent that the actual interest earned by the Company's private fund falls short of the rate declared by RPFC is met by the Company. The benefit valued is the interest shortfall, if any, for future years on the provident fund balances of the employees.

The Defined Benefit Obligation of interest rate guarantee on exempt provident fund in respect of the employees of the Company as at 31 March 2012 works out to Rs. Nil. The balance in the surplus account of the provident fund is Rs. 85 lakhs and hence the net liability which needs to be provided for in the books of accounts of the Company is Rs. Nil.

Other long term benefits:

The amount recognized in the Statement of Profit and Loss in respect of compensated absences is Rs. 23 lakhs (previous year Rs. 40 lakhs).

8. The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing regulation under sections 92-92F of the Income-Tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company continuously updates its documentation for the international transactions entered into with the associated enterprises during the financial year and expects such records to be in existence latest by such date as required under law. The management is of the opinion that its international transactions are at arms length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

9. Managerial remuneration of Rs. 7 lakhs provided by the Company in the current year is in excess of the limits specified in the relevant provisions of the Companies Act, 1956 and the amount approved by the Central Government. Further, we are informed that as required by the relevant provisions of the Act, the Company is taking necessary steps to seek approval from the Central Government for excess remuneration paid.

10. Till the financial year ended 31 March 2011, the Company was using pre-revised Schedule VI to the Companies Act, 1956, for preparation and presentation of its financial statements. During the year ended 31 March 2012, the revised Schedule VI notified under the Companies Act, 1956, has become applicable to the company. The company has reclassified previous year figures to conform to this year's classification. The adoption of Revised Schedule VI for previous year figures does not impact recognition and measurement principles followed for preparation of financial statements.

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Mar 31, 2011

(A) Contingent liabilities

(Rs. in thousands)

Particulars As at As at

31 March 2011 31 March 2010

Claims against the Company not acknowledged as debts

a) Sales tax 7,854 7,854

b) Excise duty 9,188 9,188

c) Customs duty 779 779

d) Income tax 6,676 6,676

e) Others* 12,788 12,081

Bills discounted 45,663 38,719

*During the previous years, the Company had received a notice from the relevant Government authorities for non payment of stamp duty on a lease entered into by the Company. However, the demand order has not been received by the Company and the liability on this account cannot be ascertained.

2. Based on the information presently available with the management, there are no dues outstanding to micro and small enterprises covered under the Micro, Small and Medium Enterprises Development Act, 2006 as at 31 March 2011 (previous year Rs. Nil).

3. The dividend liability on 15,700,000 2.9% cumulative redeemable non-convertible preference shares of Rs.10 each and 22,900,000 5.4% cumulative redeemable non-convertible preference shares of Rs. 10 each, payable until 31 March 2009 was waived off as per the consent of the holders of these preference shares vide their letter dated 15 March 2009. The coupon rate applicable to these series of preference shares was revised to 7.1% effective 1 April 2010 till the date of maturity.

4. Related parties

a Related parties and nature of related party relationship where control exists:

Description of Relationship Name of the Party

Ultimate Holding Company Timex Group B.V.

Holding Company Timex Group Luxury Watches B. V (formerly Timex Watches B.V)

b. Other related parties with whom transactions have taken place:

Description of Relationship Name of the Party

Fellow Subsidiaries

Timex Group B.V. T/AMersey Manufacturers

Fralsen Horlogerie S.A

TMX Limited NV

TMX Limited NV (International Sales Division)

Timex Corporation (Germany)

Timex Corporation (Middlebury)

Opex S.A.

Timex Limited NV

Timex Group UK

Timex Nederland B .V.

Timex Group USA Inc.

Timex Group Luxury Watches B.V.(Ferragamo)

Tiempo, S.A. de. C.V

Timex Group Precision Engineering Limited (TGPEL)

Timex Hong Kong Limited

Timex Do Brasil Comercio E Industria Ltd.

Timex Portugal Timex Hungary Limited

Verstime S.A.

Key Management Personnel

Gopalratnam Kannan (upto 28 April 2010)V.D. Wadhwa

(w.e.f 29 April 2010)

5. Loans and advances include dues from Managing Director of the Company Rs. 153 thousand (previous year Rs. Nil). The maximum amount outstanding during the year was Rs. 153 thousand (previous year Rs. 178 thousand).

6. Taxation

The Company has significant carried forward tax losses and unabsorbed depreciation. In view of the absence of virtual certainty of realisation of carried forward tax losses and unabsorbed depreciation allowance, deferred tax assets are recognised only to the extent of deferred tax liabilities.

7. Segment information

The Company's business segment comprises:

- Watches : Manufacturing and trading of watches;

- Timex Global Services : Providing IT and finance related back office support to other group companies. Segment revenue in the geographical segments considered for disclosure are as follows:

- Revenues within India (Domestic) include sale of watches and spares to consumers located within India; and

- Revenues outside India (Overseas) include sale of watches manufactured in India and service income earned from customers located outside India.

Segments have been identified in line with the Accounting Standard 17 on "Segment Reporting" notified by the Companies (Accounting Standards) Rules, 2006, taking into account the nature of products and services, the risks and returns, the organisation structure and the internal financial reporting system.

Secondary segment reporting is performed on the basis of the geographical segments.

Segment accounting policies

Besides the normal accounting policies followed as described in Schedule 14, segment revenues, results, assets and liabilities include the respective amounts directly identified to each of the segments and amounts allocated on a reasonable basis. The description of segment assets and liabilities and the accounting policies in relation to segment accounting are as under:

a) Segment assets and liabilities

Segment assets include all operating assets used by a segment and consist principally of fixed assets, capital work in progress, current assets and loans and advances. Segment liabilities include all operating liabilities in respect of a segment and consist principally of creditors and accrued liabilities. Segment liabilities do not include share capital, reserves, current tax and deferred tax liability. Segment assets do not include advance tax, deferred tax asset and fixed deposits.

b) Segment revenue and expenses

Segment revenue and expenses are directly attributable to the segment and have been allocated to various segments on the basis of specific identification. However, segment revenue and expenses do not include interest and other income/expense in respect of non segmental activities.

8. Employee benefits

(i) The amount recognised as an expense for defined contribution plans is Rs. 4,150 thousand (previous year Rs. 3,220 thousand).

9. The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing regulation under sections 92-92F of the Income-Tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company continuously updates its documentation for the international transactions entered into with the associated enterprises during the financial year and expects such records to be in existence latest by such date as required under law. The management is of the opinion that its international transactions are at arms length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

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Mar 31, 2010

1. Background

Timex Group India Limited (TGIL or the Company), a subsidiary of Timex Group Luxury Watches B.V, is a limited liability Company incorporated on 4 October 1988 under the provisions of the Companies Act, 1956. The Company is listed on Bombay Stock Exchange in India.

The Companys business consists of manufacture and trade of watches and rendering of related after sales service. The Company provides Technology and International Taxation support services to certain group companies.

(Rs. in thousands) As at31 March 2010 As at 31 March 2009"

2.(a)Capital commitments

(i)Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) 781 144

(b) Contingent liabilities

(Rs. in thousands)

As at31 March 2010 As at 31 March 2009

(i)Claims against the Company not acknowledged as debts

a) Sales tax 7,854 7,903

b) Excise duty 10,333 10.333

c) Customs duty 779 779

d) Income tax 6,676 -

e) Others 12,081 2,742

(ii) Bills discounted 38,719 4,074

3. The Timex Global Services Division of the Company renders information technology and finance support services to its overseas group companies. The expenditure incurred by the Division is recovered from the group companies at a mark up of 10% on costs, with reimbursement of specified expenses, and forms part of the service income.

4. Based on the information presently available with the management, there are no dues outstanding to micro and small enterprises covered under the Micro, Small and Medium Enteiprises Development Act, 2006 as at 31 March 2010 (previous year Rs. Nil).

5. The dividend liability on 15.700,000 2.9% cumulative redeemable non-convertible preference shares of Rs.10 each and 22,900,000 5.4% cumulative redeemable non-convertible preference shares of Rs. 10 each, payable until 31 March 2009 was waived off as per the consent of the holders of these preference shares vide their letter dated 15 March 2009. The coupon rate applicable to these series of preference shares have been revised to 7.1% effective 1 April 2009 till the date of maturity.

6. Pursuant to shareholders approval via Postal Ballot, the Precision Engineering Division of the Company was divested on a slump sale basis to Timex Group Precision Engineering Limited, a fellow subsidiary Company w.e.f. 1 November 2008 for a consideration of Rs. 130,438 thousand, including Rs. 9,238 thousand for working capital adjustment as on date of transfer of risk and reward i.e. 1 November 2008 (effective transfer date) of the business. Profit on sale of above (shown as an exceptional item in Profit and Loss Account of the previous year) amounted to Rs 63,533 thousand. The balance consideration receivable amounting to Rs. 9,238 thousand as at the end of March, 31 2009 were included in Other Current Asset in Schedule 8. The related operations of the Division upto October 31. 2008 were included in the financial statements as "discontinued business".

* Does not include expenses towards gratuity and leave encashment since the same are based on actuarial valuation carried out for the Company as a whole. Includes Rs. 1,019 thousand as managerial remuneration in the current year which is subject to approval by the Central Government.

Note:

Tiraex Group Luxury Watches BV, the holding company, has provided a standby letter of credit amounting to Rs. 178,000 thousand (previous year Rs. 178,000 thousand) to the bankers of the Company as a guarantee for use of cash credit and overdraft facilities.

* include production at Parwanoo and Baddi in Himachal Pradesh.

** excludes plastic components, tools and moulds produced for captive consumption. (Refer to note 5 also) *** Installed capacities are as certified by management and have not been verified by the auditors, being a technical matter.

# in view of the items of varying size and nature that can be manufactured by the Companys facilities, the installed capacity is not ascertainable.

@ includes 163 thousand watches valued at Rs 117,605 thousand on account of watches received at Baddi for repackaging which are liable for excise duty.

* Values are inclusive of excise duty

** Does not include 3,035 thousands (Nos) of plastic components transferred on sale of Precision Engineering Division.

7. Loans and advances include dues from Managing Director of the Company Rs. Nil thousand (previous year Rs. 178 thousand). The maximum amount outstanding during the year was Rs. 178 thousand (previous year Rs. 311 thousand)

8. Taxation

The Company has significant carried forward tax losses. In view of the absence of virtual certainty of realisation of carried forward tax losses and unabsorbed depreciation allowance, deferred tax assets are recognised only to the extent of deferred tax liabilities.

9. The Company has taken land and building, office premises, showrooms, other business premises and residential accommodation for some of its employees under operating lease arrangements, with an option of renewal at the end of the lease term and escalation clause in some of the cases. Lease payments charged during the year to the profit and loss account aggregate Rs. 30,450 thousand (previous year Rs. 33,088 thousand). The future minimum lease payments under non-cancellable operating leases are as follows:

10. The Company has given certain items of plant and machinery on operating lease, with an option of renewal at the end of the lease term. However, the lease agreements entered into with the lessees do not provide for any escalation. Lease rentals recognised during the year in the profit and loss account amount to Rs. 1,540 thousands (previous year Rs. 1,878 thousand). The future lease payments receivable under non-cancellable operating leases are as follows:

11. i) Segment information

Following divestment of Precision Engineering Division in 2008-09 (Refer to note 5), the Companys business segment comprises of:

- Watches : Manufacturing and trading of watches;

- Timex Global Services : Providing IT and finance related back office support to other group companies.

Segment revenue in the geographical segments considered for disclosure are as follows:

Revenues within India (Domestic) include sale of watches and spares to consumers located within India; and

Revenues outside India (Overseas) include sale of watches manufactured in India and service income earned from customers located outside India.

Segments have been identified in line with the Accounting Standard 17 on "Segment Reporting" notified by the Companies (Accounting Standards) Rules, 2006, taking into account the nature of products and services, the risks and returns, the organisation structure and the internal financial reporting system.

Besides the normal accounting policies followed as described in Schedule 16, segment revenues, results, assets and liabilities include the respective amounts directly identified to each of the segments and amounts allocated on a reasonable basis.

12 Employee benefits

The details of employee benefits with regard to provision/ charge for the year on account of gratuity, which is in the nature of an unfunded defined benefit are as under:

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotions and other relevant factors. Discount rate is based on market yields prevailing on government securities for the estimated term of the obligations. ,

The guidance on implementing AS-15 issued by Accounting Standards Board (ASB) of the Institute of Chartered Accountants of India states that benefit involving employer established provident funds, which require interest shortfalls to be recompensed are to be considered as defined benefits plans. Pending the issuance of the guidance note from Actuarial Society of India, the Companys actuary has expressed its inability to reliably measure provident fund liabilities. Accordingly, the related information has not been disclosed.

13. In relation to a sales transaction for the year ended 31 March 2009, the Company has during the year noticed misappropriation of Rs. 625 thousand by an ex-employee. The Company has taken appropriate action and has recovered the amount from the ex-employee.

14. Previous years figures have been re-grouped / reclassified, wherever necessary, to conform to current years classification. The previous year figures are not comparable as those include tool room business operation till 31 October 2008.

15. Schedules 1 to 17 form an integral part of the financial statements.