The second hand on this watch is not like other watches. It stays at the 12 o'clock position (0 seconds) until you start the chronograph.
The real second hand is in the small circle between the 5 and 7, as others have pointed out. We have posted the manual here before. If you don't read the manual, you simply cannot read the time on this watch properly.
The time is more like 3:41:53