SCHOOL OF BUSINESS

BBA SECTION-B
ASSESSMENT TASK-2
MODULE:-INTRODUCTORY ACCOUNTING
MODULE LEADER:-CA. DHAARNA SINGH RATHOR
SUBMITTED BY:-PARTH PATEL

INTRODUCTION
Titan Company Limited is a joint venture between the Tata Group and the
Tamil Nadu Industrial Development Corporation (TIDCO under the name
Titan Watches Limited. As on 31 December 2017 Titan's retail chain
comprised of 1439 stores with total retail area crossing 1.87 million [Link].
nationally for all its brands. Titan Industries Ltd was incorporated in the
year 1984 and commenced their business in the year [Link] is the 5th
largest integrated own brand watch manufacturer in the [Link]
export watches to about 32 countries around the
[Link] the last 3 decades, Titan has expanded into underpenetrated
markets and created lifestyle brands across different product categories.
Titan is widely known for transforming the watch & jewellery industry in
India and for shaping India's retail market by pioneering experiential
retail.

Titan Company Limited is an Indian consumer goods company that mainly

manufactures fashion accessories such as watches, jewellery
and eyewear. Part of the Tata Group, the company is headquartered
in Electronic City, Bangalore.

Brands Under Titan Company Ltd:-

1)Watches and Accessories Division
2)Jewellery Division
3)Eyeware Division

4)Perfume Division
ACCOUNTING PRINCIPLES
Accounting Principles are rules of action which have to be followed
by the accountant while recording the accounting transactions.

These Principles Are Classified Into 2 Categories:-

1)ACCOUNTING CONCE PTS

[Link] Entity Concept-It states that Business and its owner are different
entity during the accounting.

[Link] concern concept-This concept states that the business will run
forever and the business will not stop due to any factors other than any
legal laws has been violated.

[Link] Measurement concept-It states that every business transactions

will be measured in terms of money.

[Link] Concept-Recording the value of Assets of the business at the cost of

its purchase price.

[Link] Aspect concept-In simple words its double entry book keeping, it
states that each and every transaction Has its dual effect that is Dr. And Cr.

[Link] period concept-This is a specific time period in a fiscal year in

Which all the financial statements have to be reported.

[Link] Concept- It is the accounting principle that requires that the

expenses incurred during a period should be recorded in the same
period in which the related revenues are earned.

[Link] concept-It states that revenue will be recorded in the

books of accounts only when the money will enter into the business.
2)ACCOUNTING CONVENTIONS

[Link] of conservatism
It is a policy in which future probably losses are to be disclosed rather than
future probably profits of business.

[Link] of full disclosure

It states that each an every information of the business should be disclosed
which is necessary in the financial statements of business.

[Link] of Consistency
It is a policy in which accountant have to follow the same accounting methods
throughout the every accounting periods.

[Link] of Materiality
It states that each an every material information which the investors or public
needs to know should be disclosed.
ACCOUNTING STANDARDS
It states that how transaction & events are to be recognised, measured,
presented & disclosed in the financial statements.

AS 1 : Disclosure of Accounting Policies

This Standard deals with the disclosure of significant accounting policies
which are followed in preparing and presenting financial statements.

AS 2 : Valuation of Inventory
This Standard deals with the determination of value at which
inventories are carried in the financial statements, including the
ascertainment of cost of inventories and any write-down there of to net
realisable value.

AS 3 : Cash Flow Statement

The Standard deals with the provision of information about the
Historical changes in cash and cash equivalents of an enterprise by
means of a Cash Flow Statement which classifies cash flows during the
period from operating, investing and financing activities.

AS 4 : Contingencies and Events occurring after Balance Sheet Date

This Standard deals with the treatment of contingencies and events
Occurring after the balance sheet date.

A contingency is a condition or situation, the ultimate outcome of

which, gain or loss, will be known or determined only on the
occurrence or non occurrence, of one or more uncertain future events

AS 5 : Net Profit or Loss for the period, prior period and changes in
accounting estimates
This Standard should be applied by an enterprise in presenting profit or loss
from ordinary activities, extraordinary items and prior period items in the
Statement of Profit and Loss, in accounting for changes in accounting
estimates,and in disclosure of changes in accounting policies.

AS 7 : Accounting for Construction Contracts

This Standard prescribes the accounting for construction contracts in the
financial statements of contractors.

AS 9 : Revenue Recognition
This Standard deals with the bases for recognition of revenue in the
Statement of Profit and Loss of an enterprise. The Standard is concerned
with the recognition of revenue arising in the course of the ordinary
activities of the enterprise from:
a) Sale of goods
b) Rendering of services
c) Interest, royalties and dividends

AS10: Property, Plant and Equipment

The objective of this Standard is to prescribe the accounting treatment for
property, plant and equipment (PPE).
Recognition
The cost of an item of PPE should be recognised as an asset if, and only if:
(a) it is probable that future economic benefits associated with the item will
flow to the enterprise; and
(b) the cost of the item can be measured reliably.

AS 11: Accounting for Effect of Changes in Foreign Exchange Rates

It lays down principles of accounting for foreign currency transactions
And foreign operations, i.e., which exchange rate to use and how to
recognise in the financial statements the financial effect of changes in
exchange rates.

AS 12: Accounting for Government Grants

This Standard deals with accounting for government grants. Government
Grants are sometimes called by other names such as subsidies, cash
incentives, duty drawbacks, etc.

AS 13: Accounting for Investments

This Standard deals with accounting for investments in the financial
statements of enterprises and related disclosure requirements.

AS 14: Accounting for Amalgamations

This Standard deals with accounting for amalgamations and the treatment
of any resultant goodwill or reserves.

AS 15: Employee Benefits

The objective of this Standard is to prescribe the accounting treatment and
disclosure for employee benefits in the books of employer except employee
share-based payments.

AS 16: Accounting for Borrowing Costs

This Standard should be applied in accounting for borrowing costs. This
Standard does not deal with the actual or imputed cost of owners’ equity,
including preference share capital not classified as a liability.
Borrowing costs are interest and other costs incurred by an enterprise in
connection with the borrowing of funds.

AS 17: Segmental Reporting

The objective of this Standard is to establish principles for reporting
Financial information, about the different types of products and services an
Enterprise produces and the different geographical areas in which it
operates.

AS 18: Related Party Disclosures

This Standard should be applied in reporting related party relationships and
transactions between a reporting enterprise and its related parties.

AS 19: Leases
The objective of this Standard is to prescribe, for lessees and lessors, the
appropriate accounting policies and disclosures in relation to finance leases
and operating leases.

AS 20: Earnings Per Share

It prescribes principles for the determination and presentation of earnings
per share which will improve comparison of performance among different
enterprises for the same period and among different accounting periods for
the same enterprise.

AS 21: Consolidated Financial Statements

These statements are intended to present financial information about a
parent and its subsidiary(ies) as a single economic entity to show the
economic resources controlled by the group, obligations of the group and
results the group achieves with its resources.

AS 22: Accounting for Taxes on Income

The objective of this Standard is to prescribe accounting treatment of taxes
On income.

AS 23: Accounting for Investment in Associates in Consolidated Financial

Statements
This Standard should be applied in accounting for investments in associates
In the preparation and presentation of consolidated Financial Statements
(CFS) by an investor.

AS 24: Discontinuing Operations

The objective of AS 24 is to establish principles for reporting information
About discontinuing operations, thereby enhancing the ability of users of
Financial statements to make projections of an enterprise's cash flows,
Earnings generating capacity, and financial position by segregating
information about discontinuing operations from information about
continuing operations.

AS 25: Interim Financial Statements

The objective of AS 25 is to prescribe the minimum content of an interim
financial report and to prescribe the principles for recognition and
measurement in complete or condensed financial statements for an interim
period.

AS 26: Intangible Assets

It prescribes the accounting treatment for intangible assets.

AS 27: Financial Reporting of Joint Ventures

The objective of AS 27 is to set out principles and procedures for accounting
For interests in joint ventures and reporting of joint venture assets,
liabilities, income and expenses in the financial statements of venturers and
investors.

AS 28: Impairment of Assets

The objective of AS 28 is to prescribe the procedures that an enterprise
Applies to ensure that its assets are carried at no more than their
recoverable amount.
AS 29: Provisions, Contingent Liabilities and Contingent Assets
The objective of AS 29 is to ensure that appropriate recognition criteria and
measurement bases are applied to provisions and contingent liabilities and
that sufficient information is disclosed in the notes to the financial
statements to enable users to understand their nature, timing and amount.
ACCOUNTING SOFTWARE
Accounting software completes the tasks of the book keeping and
accounting and it also stores financial data of the business.

Accounting Software used by Titan Company Ltd are as follows:

1)SAP(Systems Applications and Products in Data Processing)

SAP is a German multinational software corporation that makes enterprise

software to manage business operations and customer relations. The
company is especially known for its ERP software. In terms of revenue, SAP
is the largest European (and non-American) and the world's third largest
listed software company.

Advantages Of SAP
1. Customized solutions. Since the needs of every company are different,
each gets a customized system.
2. Increased Productivity and Efficiency.
3. Cost Efficient Use.
4. Data Analysis and Reporting.
5. Maintain consistent operations.

2)Oracle

Oracle Corporation is an American multinational computer technology

corporation headquartered in Redwood Shores, California. The company
sells database software and technology, cloud engineered systems,
and enterprise software products—particularly its own brands of database
management systems. In 2019, Oracle was the second-largest software
company by revenue and market capitalization. The company also
develops and builds tools for database development and systems of middle
tier software, enterprise resource planning (ERP) software, Human Capital
Management (HCM) software, customer relationship management (CRM)
software, and supply chain management(SCM) software.

Advantages of Using Oracle Accounting Software

 Handles More Transactions. Simply put, Oracle software can handle more
transactions that any other options currently available.
 Ease of Backup. One of the most attractive features of Oracle software is
the ease of backing up your files.
 Updates.
CAPITAL STRUCTURE
The capital structure is the particular combination of debt and equity used
by a company to finance its overall operations and growth.

Debt comes in the form of bond issues or loans, while equity may come in

the form of common stock, preferred stock, or retained earnings.

CAPITAL STRUCTURE OF TITAN COMPANY LTD(In Cr.)

 Bar Graph Of Titan Company Ltd(In Cr)

14000

12000

10000

8000
DEBT
6000 EQUITY

4000

2000

0
2015 2016 2017 2018 2019

SUMMARY OF CAPITAL STRUCTURE:-

As we can see from the bar graph that Debt and Equity both are inclining
from the year 2015 to the year 2019 but Debt at a lower rate in
comparison of Equity. Also, company’s borrowed funds and Reserves are
increasing each an every year.
RATIOS
To examines a company's ability to meet its long-term obligations
certain ratios have been done which are as follows:-

1)Debt-Equity Ratio

 It is a financial ratio indicating the relative proportion of shareholders'

equity and debt used to finance a company's assets.

 The generally accepted standard norm of debt-equity ratio is 2:1.

 This ratio measures how much debt your business is carrying as

compared to the amount invested by its owners. It indicates the amount
of liabilities the business has for every dollar of shareholders' equity.

Debt-Equity ratio table of titan company ltd

The debt-equity ratio is calculated by dividing the long term debt with net
worth. It is evident that long term debt of the company had increased
remarkably from Rs. 99.79 crores in 2015 to Rs. 2,287.63 crores in
 2019. Net worth had gradually moved from Rs. 3092.01crores to Rs.
6181.72 crores over the study period. Debt equity ratio had varied from
the lowest of 0.03 times in 2015 to the highest of 0.37times in 2019.

The ratio is well below than the standard ratio of 2:1.

It means that the debt employed by the company was low from the point
of view as the standard ratio. However, the interest of the debt holders
of the company was well protected.

2)INTEREST COVERAGE RATIO

It is used to determine how easily a company can pay interest on its
outstanding debt or in simple words how many times does the
company can pay its interest.

The lender will be interested in finding out whether the business would
earn sufficient profits to pay the interest charges and interest being
paid periodically.

Higher the ratio higher the benefit of the company

Interest coverage ratio is calculated by using the following formula:

Interest Coverage Ratio = EBIT / Interest.

Interest coverage ratio table of titan company ltd

The highest interest coverage ratio was recorded at 44.36 times in 2019
and the lowest being 14.09times in 2015.

It shows that the company can pay its interest 44 times in the current
fiscal year.

3)DEBT TO TOTAL FUND RATIO

The debt-to-capital ratio is calculated by taking the company's interest-

bearing debt, both short- and long-term liabilities and dividing it by the
total capital

The higher the debt-to-capital ratio, the riskier the company. This is
because a higher ratio, the more the company is funded by debt than
equity, which means a higher liability to repay the debt and a greater
risk of forfeiture on the loan if the debt cannot be paid timely.

Debt to total fund ratio table of titan company ltd

Total fund had jumped from Rs. 5440.02 crores in 2015 to Rs. 11292.63
crores in 2019. The total fund had exceeded over the total debt during
the entire period of the study.

It may be concluded that the financial risk of the company is low.
COMPANY’S CREDIBILITY

It means how others look at you as a reliable resource and decision maker. It
allows those who rely on you to know they can count on you, trust you, do
business with you, and align with you.

Titan company ltd ‘s credit rating is as follows:-

 Titan Company ltd has been rated by the top credit ratings agency of India.

 AAA Instruments with this rating are considered to have the highest

degree of safety regarding timely servicing of financial obligations. 

 As, we can see from the table that titan company ltd is having an excellent
credit score which suggest that its among the most reliable company in
terms of financial stability in India.
MARKET POSITION

It refers to position of the company in the market in comparison to the same

market competitors.

Market Position of Titan Company Ltd(In Rs Cr):-

120000

100000

80000

Market Capital
60000 Sales Turnover
Net Profit
40000

20000

0
Titan Rajesh Exports Vaibhav Global PC Jeweller
 After analyzing the bar graph ,we can say that the Titan Company Ltd is the
market leader of the market.

 Though Rajesh Exports have a higher sales turnover in the market but still
Titan Company Ltd is Having the Highest Net Profit in the market.

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