To the Members,
Greetings and we trust that this Report nds you and your family in the
best of health and well-being.
We are delighted to present the 48th Annual Report on the business
operations of the Company and the financial statements for the year ended March 31, 2023.
FINANCIAL HIGHLIGHTS
|
Standalone |
Consolidated |
Particulars |
2022-23 |
2021-22 |
2022-23 |
2021-22 |
Revenue |
21,202 |
21,043 |
21,716 |
21,409 |
Earnings before interest, tax and depreciation |
3,569 |
3,776 |
3,050 |
3,281 |
Finance/Interest cost |
- |
- |
(3) |
(5) |
Depreciation |
(312) |
(271) |
(358) |
(316) |
Pro t before tax |
3,257 |
3,505 |
2,689 |
2,960 |
Tax |
(954) |
(960) |
(933) |
(827) |
Pro t after tax |
2,303 |
2,545 |
1,756 |
2,133 |
Opening balance in Retained Earnings |
5,380 |
3,986 |
3,689 |
2,707 |
Net profit / loss for the year |
2,303 |
2,545 |
1,756 |
2,133 |
Other comprehensive income for the year |
19 |
19 |
23 |
19 |
Equity dividend |
(1,400) |
(770) |
(1,400) |
(770) |
Transfer to general reserve |
(411) |
(400) |
(411) |
(400) |
Closing balance in Retained Earnings |
5,891 |
5,380 |
3,657 |
3,689 |
DIVIDEND AND TRANSFER TO RESERVES
The Board of Directors have recommended dividend of Rs.5 (Rupees ve
only) being two hundred and fty percent on the face value of Rs. 2 (Rupees two) per equity
share. The entailed out flow will be Rupees seventeen crores and fty lakhs. The payment
will be subject to the approval of Members at the ensuing Annual General Meeting. Members
who hold shares on the record date ie., August 4, 2023, will be eligible for dividend. The
payout will be made after deducting applicable income tax.
Further, the Board has recommended for transfer of rupees four crores
and eleven lakhs from pro t/surplus to the General Reserve against rupees four crores
transferred during the previous year and with this the general reserve will be rupees
eighty three crores.
REVIEW OF BUSINESS OPERATIONS
Standalone
The Company has registered sales turnover of rupees two hundred plus
crores for the second year in consecutive with profits at second best since inception. As
regards the proposed merger (as on the date of this report), while the Stock Exchanges
have granted in-principle-approval, the matter is before the National Company Law Tribunal
(NCLT). It is pertinent to note that the amalgamation of Ador Fontech with Ador Welding
would inter-alia have the following major benefits: (i) To achieve the Vision of
Creating the Best Welding Company' and 'Consolidation of market position'. (ii)
Optimal use of distribution network, sales force, human resources, manufacturing units,
supply chain, research and training facilities, which will add greater value and synergy
to all Stakeholders. In the intermittent, there have been joint meetings and common forums
between the employees of both organisatons at regular intervals, to facilitate sharing of
best practices, work processes and co-ordinated efforts.
Further, while it is normal for the organisation to undertake
improvement activities regularly, the highlights for the year include: (i) Opening up of
'Hypertherm Experience Centre' at Pune to show case the best of cutting equipment.
(ii) Sponsorship of Senior Employees to undergo learning programmes at
the Indian Institute of Management (IIM) and Indian School of Business (ISB).
(iii) Establishment of foothold at Dubai through the aegis of 'Ador
One' for products and services, particularly in the area of Repairs & Maintenance.
This project is still at the primary nascent stage and the modus operandi to scale up will
be made slowly and securely.
Consolidated
The subsidiary 3D Future Technologies Private Limited's revenue
increased to Rs.665 lakhs from Rs.484 lakhs of the previous year, registering a growth of
37%. It may take few more years for the Company to break-even and thereafter register pro
t. The Company continues to remain focused on (i) Cost control (ii) Employee development
(iii) Increase of eciencies and (iii) Enhancement of market space for its products and
services.
FINANCE AND ACCOUNTS
Disclosure on accounting treatment: As mandated by the Ministry of
Corporate Affairs, the financial statements for the year ended March 31, 2023 has been
prepared in accordance with the Indian Accounting Standards (Ind-AS) notified under
Section 133 of Companies Act, 2013 (hereinafter referred to as the Act) read with the
Companies (Accounts) Rules, 2014 as amended from time to time. The estimates and
judgements relating to the financial statements are made on a prudent basis, so as to
reflect in a true and fair manner, the form and substance of transactions to reasonably
present the Company's state of affairs, profits and cash flows for the year ended
March 31, 2023.
Accounting Software: The Company runs its accounting package which
forms an integral part of Enterprise Resource Planning (ERP). As such, the system
facilitates online/real time integration and compilation of data without much manual
interface and provides for transaction wise audit trail.
SHARE CAPITAL
The paid-up Equity Share Capital as on March 31, 2023 was Rs. 700 lakhs
divided in to 350 lakhs equity shares of Rs. 2/- each. There was no change in the capital
structure of the Company during the year under review.
BOARD OF DIRECTORS
The Company has an appropriate mix of Executive, Non-Executive and
Independent Directors with distinctiveness in functions of governance and management. At
the end of the financial year 2022-23, the composition of Board was as under:
Name |
Designation |
Mr. A T Malkani |
Non-Executive; Promoter Director and
Chairman |
Mr. H P Ledwani |
Managing Director and Chief Executive Of cer |
Mrs. N Malkani Nagpal |
Non-Executive; Promoter Director |
Mr. N S Marshall |
Independent Director |
Mr. Santosh Janakiram |
Independent Director |
Mr. Ra que Malik |
Independent Director |
The Board met ve times during the year, details of which are given in
the Corporate Governance Report, which forms part of this Annual Report. The intervening
gap between the meetings were within the period prescribed under the Companies Act, 2013
and SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015. As required
under the provisions of sub-section (3) of Section 178 of the Companies Act, 2013, the
Company has adopted optimum policies for Director's appointment and remuneration. The
policy has been hosted on the website of the Company at www.adorfon.com.
DIRECTORS
Director seeking re-appointment
In accordance with the provisions of Section 152(6) of the Companies
Act, 2013 read with relevant provisions of the Articles of Association of the Company,
Mrs. N Malkani Nagpal, Non-Executive Director is liable to retire by rotation and being
eligible has offered her candidature for appointment/re-appointment.
Details of changes in Directors and/or Key Managerial Personnel
Mr. H P Ledwani holds nearly ve decades of experience in the welding
industry and has been associated with Ador Fontech since its inception. He has been
largely instrumental in the growth and development of the organisation. His term of
employment was to end on April 30, 2023. Prior to the same, the Board had sought approval
for extension of his service up to March 31, 2024 which was duly approved by the majority
of Shareholders.
Mr. R Krishna Kumar who was Chief Operating Officer (COO) resigned from
the services of the Company on September 8, 2022. Thereafter, Mr. Melville Ferns who was
Executive Vice President and has been serving the organisation for the last over four
decades, took charge as the Chief Operating Ocer. Mr. Melville Ferns graduated from the
Nagpur University and holds diploma in Marketing Management from the Xavier Institute of
Management. He has successfully completed Advanced Management Programme from the Indian
Institute of Management (IIM-Bengaluru) and Innovation & Corporate Entrepreneurship
from the Indian School of Business (ISB-Hyderabad).
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under Sections 134(3) (c) and 134(5) of the
Act, with respect to the Directors' Responsibility Statement, it is hereby con rmed:
In the preparation of the annual accounts for the year ended March 31,
2023; the applicable accounting standards read with requirements set out under Schedule
III to the Act, have been followed and there are no material departures from the same.
The Directors have selected such accounting policies and applied them
consistently & made judgements and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company as at March 31, 2023 and
of the profits of the Company for the year ended on that date.
The Directors have taken proper and sufficient care for maintenance of
adequate accounting records in accordance with the provisions of the Act, for safeguarding
the assets of the Company and for preventing & detecting fraud and other
irregularities.
The Directors have prepared the annual accounts on a going
concern' basis.
The Directors have laid down internal financial controls to be followed
and that such internal financial controls are adequate and are operating effectively and
The Directors have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems are adequate and operating
effectively.
AUDIT COMMITTEE RECOMMENDATIONS
The Board has accepted all the recommendations of the Audit Committee
and hence no further explanations have been provided for in this Report.
PERFORMANCE EVALUATION
Board members
The Company has, during the year conducted an evaluation of the Board
as a whole, its committees and individual Directors including Independent Directors as
stipulated in the Nomination and Remuneration Policy adopted by the Company & as per
the provisions of the Companies Act, 2013 and Regulation 17(10) of the SEBI (LODR)
Regulations, 2015. The evaluation was carried out on the basis of the below set targets:
BUSINESS |
CORPORATE |
CAPITAL |
PERFORMANCE OF |
COMMITTEE |
STRATEGIES |
BUDGET |
EXPENDITURE |
PRODUCTS |
WISE REVIEWS |
Other parameters for such evaluation comprised - level of
participation, integrity, independence, knowledge, impact and influence on the Board. The
Independent Directors of the Company also convened a separate meeting on February 02, 2023
and evaluated the performance of the Board, Non-Independent Directors and the Chairman.
The Board is con dent that collectively and individually best possible efforts have been
drawn.
Staff members
Performance management systems are in place and timely reviews were
facilitated to provide feedback to the employees on their performance.
INTERNAL CONTROL SYSTEMS
As part of internal controls, the ERP environment has been plugged with
standard operating procedures (SOPs) including checks & balances besides approval
matrix to ensure accuracy of financial and non- financial transactions. Further, there are
Internal and Branch audits conducted both on quarterly and on an annual basis
respectively, by external Chartered Accountant Firms to ensure correctness of data.
During the year under review, neither the Statutory Auditors nor the
Secretarial Auditor have reported to the Audit Committee under Section 143(12) of the
Companies Act, 2013 any instance of fraud committed against the Company by its ocers or
employees, the details of which need to be mentioned in the Board's report.
AUDITS
Statutory Audit
In respect of the financial year 2022-23, there are no quali cation(s)
or reservation(s) or adverse remark(s) or disclaimer(s) specified in the audit reports of
the Standalone Financial Statements. Hence explanations or comments on the same do not
become applicable.
Secretarial Audit
The Company has complied with all applicable provisions of the
Secretarial Standards and Secretarial Audit Report for the financial year 2022-23, details
of which forms part of the Annual Report.
Cost Audit
The Company maintains cost accounting records and has cost control
measures in place.
AUDITORS
Statutory Audit
M/s. Praveen & Madan, Chartered Accountants (Firm Registration No.
011350S) having oce at No. 237, 2nd Cross, Cambridge Layout, Halasuru, Bengaluru 560 008
were appointed at the previous Annual General Meeting. They will continue as Statutory
Auditors for the financial year 2023-24.
Secretarial Audit
The Board has accorded permission to the Managing Director for
appointment/re-appointment of Secretarial Auditor for the financial year 2023-24, based on
applicable Statutory/legal requirements. The appointment, terms & conditions and
remuneration shall be subject to mutual consent of the Organisation and the Auditor.
Cost Audit
M/s. Rao Murthy and Associates, Cost Accountants (Firm Registration No.
000065) having oce at Sampurna Chambers 13, First Floor, Vasavi Temple Road, VV Puram,
Bengaluru-560 004 have been appointed as the Cost Auditor and resolution for approval/rati
cation of remuneration have been placed before the Members. Members may note that
irrespective of the fact, that the Cost Auditor has opined that it is not mandatory for
the Company to undertake cost audit, yet as good corporate governance and given the fact
that ERP (Enterprise Resource Planning) is new, the Company had preferred for the same.
Besides, a review of costing system was also undertaken by the Cost Auditor to ensure
validation of variances as Standard Costing System is being followed in the aggregation of
cost of goods sold.
EXTRACT OF ANNUAL RETURN
An extract of the Annual Return for the year 2022-23 in form MGT-7 in
respect of the previous year have been uploaded on the website at
https://www.adorfon.com/investors-info/mgt9/.
INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of the Companies Act, 2013 read with the
IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ('the
Rules') notified by the Ministry of Corporate Affairs, all unpaid or unclaimed
dividend are required to be transferred by the Company to the Investor Education &
Protection Fund, after completion of seven years.
Further, according to the rules, shares on which dividend has not been
claimed by the Shareholder(s) for seven consecutive years or more will have to be
transferred to the demat account of the IEPF Authority. Accordingly, the Company has
transferred Rs.16,65,744.50 (Rupees sixteen lakhs, sixty ve thousand, seven hundred forty
four and paise fty only) and 25,502 equity shares of Rs.2/- each to the IEPF Authority.
Details of unclaimed dividend and equity shares transferred have been hosted on the
website of the Company.
SUBSIDIARY
During the financial year 2022-23 the Company had contributed to equity
share capital of its subsidiary amounting to rupees seven crores and fty lakhs. The wholly
owned subsidiary became operational in January 2015 with inroads in to 3D printing to
address orthodontic problems. While this may be deemed as a pioneering effort, the
requirement and scale of operations require heavy capital base. The Company has
endeavoured to infuse a mix of equity and debt to kick start and keep the project ongoing,
within the overall budgetary norms of the parent company.
The positivity of the venture is the consistent upward registration of
revenue growth and the number of Orthodontic Professional Doctors enrolled and the ip-side
is the deferment or lagging of break-even-point. This point has also been brought about by
the Auditor of the Subsidiary in terms of CARO reporting, as regards registration of cash
losses by the venture during 2022-23 and in the corresponding previous year. With due
deliberations and discussions with professionals from varied elds including Technical,
Market Research, Financial, Human Resources etc. and based on Valuation Reports, it was
decided by the Management of the Subsidiary, to maintain status quo as a Going Concern,
particularly as the base of the organisation has been well-set and it is at the point of
in ection.
PRODUCTS AND SERVICES
The Company during the financial year 2022-23 laid thrust on online
systems and solutions to create a niche digital platform. Greater presence was made in
social media like Facebook, LinkedIn and Youtube. This is expected to have far reaching
transitional effect on the method of managing business.
REGISTRATIONS
The Company's products are manufactured to international standards
with adherence to quality systems and marketed under registered Trademarks. Further, the
primary logo of the Company, Ador Fontech' is a registered mark and during the
year 2022-23, the Trade Marks Authority had granted permission for registration of
'Ador-peace of mind' in few classes and in respect of few others, the process is ongoing.
PARTICULARS OF LOANS, GUARANTEE AND INVESTMENTS
During the financial year 2022-23, Inter-corporate-deposit (ICD) to
Ador Powertron Limited and 3D Future Technologies Private Limited was facilitated of which
principal along with interest were duly repaid by the former and interest by the latter
with partial repayment.
The reckoning of interest for ICD was placed significantly higher than
the bank rate. The requirement for ICD emanated from the need to bridge nance working
capital requirements, as per request letters received from the respective organisations.
Note: Aggregate of investments and loans provided are within the powers
and limits specified under Sections 179, 185 and 186 of the Companies Act, 2013.
CAPITAL EXPENDITURE
Employees have to travel deep in to industrial belts and some times in
rugged terrains for marketing, sales and services. It is not only the mobility factor, but
there is also the need to use time productively and judiciously in the best interest of
the organisation. Hence, backlog on 'Capex' particularly on account of vehicles, which was
put on hold during 'Covid' was duly cleared.
DEPOSITS
The Company has not accepted any deposits from the public and as such,
no amount on account of principal or interest on deposits from the public was outstanding
as on the date of the Balance Sheet.
LIQUIDITY
To have an optimum level of liquidity, the Company has ensured:
Maintenance of healthy current ratio at all times during the year
Best of efforts were channelised towards cost control/reduction of
overhead expenses, to the extent possible
Ensured credit cycle and investments are correctly managed to reduce
default risk Further, the Company continued to enjoy debt free status resulting in nil
nance cost.
CORPORATE SOCIAL RESPONSIBILITY
During the financial year 2022-23, the Company engaged in 17 activities
involving a total payout of rupees forty eight lakhs and fty thousand. Details of which
have been provided as part of the Report on Corporate Social Responsibility. Incidentally,
the Company has surpassed amount statutorily required to be spent on CSR activities.
MATERIAL CHANGES, COMMITMENTS AND ORDERS
There has been no significant material changes and commitments
affecting the financial position of the Company, which has occurred between the end of the
financial year and the date of this report. There were no significant orders passed
against the Company, by the Regulators or Courts or Tribunals, impacting the going concern
status and the Company's operations in the future.
EMPLOYEES AND WORKPLACE CULTURE
The Company works on a cluster of professional staff members, both from
sales and non-sales domain. The employees of the Company are skilled to perform activities
as per the requirements of Key Result Area (KRAs) and Key Performance Indicators (KPIs).
The Company is to a great extent policy driven with de nitive good working culture. There
is also a strong vigil mechanism (whistle-blower) policy in place and all employees have
access to the Chairman of the Audit Committee, in case they may wish to report any
concern.
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
The Company believes in providing a safe work environment to its
employees. To ensure such an environment, the Company has adopted
Anti-Sexual-Harassment' policy which is in line with the requirements of Sexual
Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and
Rules framed thereunder.
An internal complaints committee has been specially constituted to
redress complaints under sexual harassment. During the scal year 2022-23, there were no
complaints received under this category.
HEALTH AND SAFETY MEASURES
Health of employees and their families is paramount. The Company has
subscribed to 'Doc Online' where in online consultations with Doctors are made possible
round the clock. Besides, there are also regular programmes pertaining to wellness being
conducted through the year like webinars, yoga and pranayama classes etc.
As regards maintenance of hygiene, the Company has outsourced
housekeeping activities and extra cleanliness adopted during Covid, still continues.
Further, during the course of work, employees are provided with
necessary safety gadgets and inspections are conducted at regular intervals.
QUALITY SYSTEMS
The Company holds the following ISO certi cations (i) ISO 9001:2015
(ii) ISO 14001-2015 and (iii) ISO 45001:2018 through the aegis of DNV GL Business
Assurance. While the first two are Quality Certifications, the third pertains to
Occupational Health and Safety Management System.
RISK MANAGEMENT
The Company has adopted Risk Management Policy' to identify,
assess, monitor and mitigate various risks which may impact the Company's business.
The Company has an adequate framework to curtail any adverse impact on its core
operations. The Board of Directors and Management are committed towards identifying major
risks exposed to the business and means to mitigate the same.
INSURANCE
The Company has sucient insurance coverage encompassing Assets,
Inventories, Transit, vehicles etc.
The Company has also covered employee related risks like Personnel
accident, Workmen compensation, Employee's deposit linked insurance scheme etc. in
order to safeguard the interest of personnel.
NOMINATION AND REMUNERATION POLICY
As required under the provisions of Section 178(3) of the Companies
Act, 2013 and Regulation 19 of SEBI (LODR) Regulations, 2015, the Company had adopted
policy for Directors' appointment and remuneration including criteria for determining
quali cations, positive attributes, independence of Directors etc. Details on remuneration
policy are explained in the Corporate Governance Report.
DISCLOSURES
Related party transactions
All transactions entered in to with Related Parties as defined under
the Companies Act, 2013 and Regulation 23 of the SEBI (LODR) Regulations, 2015 during the
financial year, were in the ordinary course of business and on an arm's length
pricing basis and do not attract the provisions of Section 188 of the Companies Act, 2013.
There were no material significant transactions with related parties, during the financial
year which were in conflict with the interest of the Company. Hence statement in form
AOC-2 is not required to be annexed to this report.
Suitable disclosures as required by the Accounting Standards have been
provided in the notes to the Standalone and Consolidated Financial Statements. The
approved policy on Related Party Transactions' has been made available on the
website of the Company.
Insider trading
The Company has adopted Code of Conduct' for prevention of
Insider Trading with a view to regulate trading in securities by Directors and designated
persons of the Company.
Further, the Stock Exchange and Designated Employees were duly informed
on the closure and opening of the trading windows.
Details of fees paid to the Statutory Auditors
The total fees for all services paid by Ador Fontech Limited to M/s Praveen &
Madan, Statutory Auditors, for the year endedMarch 31, 2023:
Name |
Amount (In Rs.) |
Audit fees |
7,50,000 |
Certi cations |
73,160 |
TOTAL |
8,23,160 |
Details of utilisation of funds raised through preferential allotment
or qualified institutional placement as specified under Regulation 32 of the SEBI (LODR)
Regulations, 2015
There were no funds raised by the Company through preferential
allotment or qualified institutional placement during the financial year 2022-23.
Certi cate on non-disquali cation of Directors
A certificate from Practicing Company Secretary has been received by
the Company stating that none of the Directors on the Board of the Company have been
debarred or disqualified from being appointed or to continue as Directors.
Details of application made or any proceeding pending under the
Insolvency and Bankruptcy Code, 2016 during the year alongwith their status as at the end
of the financial year: Not applicable
Details of difference between the amount of valuation done at the time
of one time settlement and the valuation done while taking loan from the Banks or
Financial Institutions along with the reasons thereof : Not applicable
Disclosures with respect to demat suspense account/unclaimed suspense
account
In accordance with the requirements of SEBI Circular No.
SEBI/HO/MIRSD/MIRSD_RTAMB/P/CIR/2022/8 dated 25th January, 2022, the Company has opened a
Suspense Escrow Demat Account with the Depository Participant for transfer of shares lying
unclaimed for more than 120 days from the date of issue of Letter of Con rmation to the
Shareholders in lieu of physical share certificate(s), to enable them to make a request to
Depository Participant for dematerialising the shares. During the year under review, none
of the shares has been transferred to Suspense Escrow Demat Account.
Other disclosures
The following reports have been annexed/appended and forms part of the
Directors' Report:
Management discussion and analysis report
Corporate governance report
Report on CSR activities (including details of activities undertaken
and amount spent)
Conservation of energy, technology absorption, foreign exchange
earnings and outgo
Particulars of arrangements/transactions made with related parties
Particulars of employees
Details of Subsidiary and Associates
WEB LINK
All requisite documents have been uploaded on the website of the
Company www.adorfon.com'.
INITIATIVES
The Company continues to sustain its commitment to highest levels of
quality, superior service management, robust information security practices and mature
business continuity management. These fundamental ethos and integrity will continue to
transcend in the years to come.
ACKNOWLEDGEMENTS
Employees are always recognised as an invaluable asset of the Company.
The Directors wish to place on record their deep sense of appreciation in acknowledgement
of their yeomen service. On the same parlance, also extend thankfulness and gratitude to
all Government and Regulatory Authorities, Municipal Corporations, Financial Institutions,
Shareholders, Customers, Authorised Dealers, Channel Partners, Suppliers, besides all
Organisations associated with the Company for their continued patronage and splendid
co-operation.
|
On behalf of the Board |
|
For ADOR FONTECH LIMITED |
|
A T MALKANI |
Bengaluru |
Chairman |
May 29, 2023 |
DIN: 01585637 |
|