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Ador Fontech Ltd.

BSE: 530431 Sector: Engineering
NSE: N.A. ISIN Code: INE853A01022
BSE 00:00 | 19 Apr 36.70 0.40
(1.10%)
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36.55

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NSE 05:30 | 01 Jan Ador Fontech Ltd
OPEN 36.55
PREVIOUS CLOSE 36.30
VOLUME 36824
52-Week high 44.70
52-Week low 26.50
P/E 16.99
Mkt Cap.(Rs cr) 128
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 36.55
CLOSE 36.30
VOLUME 36824
52-Week high 44.70
52-Week low 26.50
P/E 16.99
Mkt Cap.(Rs cr) 128
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Ador Fontech Ltd. (ADORFONTECH) - Auditors Report

Company auditors report

To

The Members Ador Fontech Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying Standalone Financial Statements of Ador FontechLimited (‘the Company') which comprise the Balance Sheet as at March 31 2019; theStatement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year ended on that date and asummary of significant accounting policies and other explanatory information (hereinafterreferred to as ‘the Standalone Financial Statements').

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Financial Statements give the information requiredby the Companies Act 2013 (‘the Act') in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under Section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended(‘Ind-AS') and other accounting principles generally accepted in India of the stateof affairs of the Company as at March 31 2019; the profit (Standalone financialperformance including other comprehensive income) changes in equity and its cash flowsfor the year ended on that date.

Basis for Opinion

We conducted our audit of the Standalone Financial Statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport.

We are independent of the Company in accordance with the Code of Ethics issued by theInstitute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the Standalone Financial Statements underthe provisions of the Act and the Rules made thereunder. We have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the Standalone Financial Statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgement were of mostsignificance in our audit of the Standalone Financial Statements of the current period.These matters were addressed in the context of our audit of the Standalone FinancialStatements as a whole in forming our opinion thereon and we do not provide a separateopinion on these matters. We have determined the matters described below to be the keyaudit matters to be communicated in our report.

KEY AUDIT MATTERS AUDITORS' RESPONSE
Accuracy of recognition measurement presentation and disclosures of revenues and other related balances in view of adoption of Ind-AS 115 'Revenue from Contracts with Customers' (new revenue accounting standard). Principal Audit Procedures
We assessed the Company's process to identify the impact of adoption of the new revenue accounting standard.
Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows:
• Evaluated the design of internal controls relating to implementation of the new revenue accounting standard.
• Selected a sample of continuing as also new contracts and tested the operating effectiveness of the internal control relating to identification of the distinct performance obligations and determination of transaction price. We carried out a combination of procedures involving enquiry observation re-performance and inspection of evidence in respect of operation of these controls.
• Tested the relevant information technology systems' access and change management controls relating to contracts and related information used in recording and disclosing revenue in accordance with the new revenue accounting standard.
• Selected a sample of continuing as well as new contracts and performed the following procedures:
(i) Read analysed and identified the distinct performance obligations in these contracts.
(ii) Compared these performance obligations with that identified and recorded by the Company.
(iii) Considered the terms of the contracts to determine the transaction price including any variable consideration to verify the transaction price used to compute revenue and to test the basis of estimation of the variable consideration.
(iv) Samples in respect of revenue recorded for time and material contracts were tested using a combination of approved time sheets including customer acceptances subsequent invoicing and historical trend of collections and disputes.
(v) In respect of samples relating to fixed price contracts progress towards satisfaction of performance obligation used to compute recorded revenue was verified with actuals and estimated efforts from the time of recording and budgeting systems. We also tested the access and change management controls relating to these systems.
(vi) Sample of revenues disaggregated by type and service offerings was tested with the performance obligations specified in the underlying contracts.
(vii) Performed analytical procedures for reasonableness of revenues disclosed by type and service offerings.
(viii) We reviewed the collation of information and the logic of the report generated from the budgeting system used to prepare the disclosure relating to the periods over which the remaining performance obligations will be satisfied subsequent to the Balance Sheet date.
Evaluation of uncertain tax positions Principal Audit Procedures
The Company has material uncertain tax positions including matters under dispute which involves significant judgement to determine the possible outcome of these disputes. Obtained details of completed tax assessments and demands for the year ended March 31 2019 from the Management. We involved our internal experts to challenge the Management's underlying assumptions in estimating the tax provisions and the possible outcome of the disputes. Our internal experts also considered legal precedence and other rulings in evaluating the Management's position on these uncertain tax positions.

Information Other than the Standalone Financial Statements and Auditors' Report Thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to the Board's ReportCorporate Governance and Shareholder's information but does not include the StandaloneFinancial Statements and our Auditor's report thereon.

Our opinion on the Standalone Financial Statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone Financial Statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the Standalone Financial Statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these Standalone Financial Statementsthat give a true and fair view of the financial position financial performance totalcomprehensive income changes in equity and cash flows of the Company in accordance withthe Ind-AS and other accounting principles generally accepted in India. Thisresponsibility also includes:

(i) maintenance of adequate accounting records in accordance with the provisions of theAct for safeguarding the assets of the Company and for preventing/detecting frauds andother irregularities.

(ii) selection and application of appropriate accounting policies.

(iii) making judgements and estimates that are reasonable & prudent and

(iv) design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the StandaloneFinancial Statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the Standalone Financial Statements the Management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

The Board of Directors is responsible for overseeing the Company's financial reportingprocess.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the StandaloneFinancial Statements as a whole are free from material misstatement whether due to fraudor error and to issue an Auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of theusers taken on the basis of these Standalone Financial Statements.

As part of an audit in accordance with SAs we exercise professional judgement andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the StandaloneFinancial Statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of theinternal controls.

• Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under SectionI43(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by the Management.

• Conclude on the appropriateness of the Management's use of the going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our Auditor's report to therelated disclosures in the Standalone Financial Statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our Auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of the StandaloneFinancial Statements including the disclosures and whether the Standalone FinancialStatements represent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the Standalone Financial Statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our works and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on our independenceand where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the Standalone Financial Statementsof the current period and are therefore the key audit matters. We describe these mattersin our Auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Other matters

We did not audit the financial statements of one branch located at Nagpur included inthe Standalone Financial Statements of the Company whose financial statements reflecttotal assets of ?. 1119 lakhs as at March 31 2019 and total revenue of ?. 3736 lakhsfor the year ended on that date as considered in the Standalone FinancialStatements/information of the branch audited by the Branch Auditors whose reports havebeen furnished to us and our opinion in so far as it relates to the amounts anddisclosures included in respect of the branch is based solely on the report of suchBranch Auditors.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

(1) As required by Section 143(3) of the Act based on our audit we report that:

(i) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit

(ii) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

(iii) The reports on the accounts of branch office of the Company audited under Section143(8) of the Companies Act by the Branch Auditors have been sent to us and have beenproperly dealt with by us in preparing this report.

(iv) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of accounts.

(v) In our opinion the aforesaid Standalone Financial Statements comply with theInd-AS specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.

(vi) On the basis of the written representations received from the Directors as onMarch 31 2019 taken on record by the Board of Directors none of the Directors isdisqualified as on March 31 2019 from being appointed as a Director in terms of Section164 (2) of the Act.

(vii) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in ‘Annexure A'. Our report expresses an unmodified opinion on theadequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

(viii) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

(a) The Company has disclosed the impact of pending litigations on its financialposition in its Standalone Financial Statements.

(b) The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on longterm contracts includingderivative contracts.

(c) There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.

(2) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of Section 197(16) of the Act as amended:

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its Directors during the year is inaccordance with the provisions of Section 197 of the Act.

(3) As required by the Companies (Auditor's Report) Order 2016 (‘the Order')issued by the Central Government in terms of Section 143(11) of the Act we give in‘Annexure B' a statement on the matters specified in paragraphs 3 and 4 of the Order.

For SRINIVAS & SUBBALAKSHMI
Bengaluru J H MADAN SRINIVAS Chartered Accountants
May 18 2019 Partner (Membership No. 021643) Firm Registration No. 011350S

ANNEXURE ‘A' TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph (vii) under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Ador Fontech Limited of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ('the Act')

We have audited the internal financial controls over financial reporting of AdorFontech Limited (‘the Company') as of March 31 2019 in conjunction with our audit ofthe Standalone Financial Statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies the safeguardingof its assets prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the ‘Guidance Note') issued by the Institute of Chartered Accountants ofIndia and the Standards on Auditing prescribed under Section 143(10) of the Companies Act2013 to the extent applicable to an audit of internal financial controls. Those Standardsand the Guidance note require that we comply with ethical requirements plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists testing and evaluating the design andoperating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the Auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the internal financial controls system overfinancial reporting of the Company.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofManagement and Directors of the company and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2019 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For SRINIVAS & SUBBALAKSHMI
Bengaluru J H MADAN SRINIVAS Chartered Accountants
May 18 2019 Partner (Membership No. 021643) Firm Registration No. 011350S

ANNEXURE (B' TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 3 under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Ador Fontech Limited of even date)

We report that

• In respect of the Company's fixed assets:

(i) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(ii) The Company has a program of verification to cover all the items of fixed assetsin a phased manner which in our opinion is reasonable having regard to the size of theCompany and the nature of its assets. Pursuant to the program certain fixed assets werephysically verified by the Management during the year. According to the information andexplanations given to us no material discrepancies were noticed on such verification.

(iii) According to the information and explanations given to us the records examinedby us and based on the examination of the conveyance deeds/registered sale deed providedto us we report that the title deeds comprising all the immovable properties of landand buildings which are freehold are held in the name of the Company as at the BalanceSheet date. In respect of immovable properties of land and building that have been takenon lease and disclosed as fixed assets in the Standalone Financial Statements the leaseagreements are in the name of the Company.

• (i) We are informed that inventories have been physically verified by theManagement during the year and also at the end of the year. In our opinion the frequencyof verification is reasonable.

(ii) In our opinion and according to the explanations given to us the procedures ofphysical verification of inventories followed by the Management are reasonable andadequate in relation to the size of the Company and the nature of its business.

(iii) In our opinion and according to the information and explanations given to us theCompany is maintaining proper records of inventories. The discrepancies noticed onverification between physical stocks and book records were not material and have beenproperly dealt with in the books of accounts.

• According to the information and explanations given to us the Company hasgranted loans/guarantee to bodies corporate covered in the register maintained underSection 189 of the Companies Act 2013.

Other than the Joint venture

(i) The terms & conditions of the grant of such loans are in our opinion primafacie not prejudicial to the Company's interest.

(ii) The schedule of repayment of principal and payment of interest has been stipulatedand repayments or receipts of principal amounts and interest have been regular as perstipulations.

(iii) There is no overdue amount remaining outstanding as at the year end.

Joint venture: With the Company deciding to exit from the joint venture loan plusoutstanding interest thereon has been provided for in full in the books of accounts.

• In our opinion and according to the information and explanations given to usthe Company has complied with the provisions of Sections 185 and 186 of the Act in respectof grant of loans making investments and providing guarantees and securities asapplicable.

• The Company has not accepted deposits during the year and does not have anyunclaimed deposits as at March 31 2019 and therefore the provisions of the clause 3 (v)of the Order are not applicable to the Company.

• We have broadly reviewed the records maintained by the Company pursuant to theRules prescribed by the Central Government for maintenance of cost records under Section148(1) of the Act and are of the opinion that prima facie the prescribed accounts andrecords have been made and maintained. However we have not made a detailed examination ofthe records.

• According to the information and explanations given to us in respect ofstatutory dues:

• The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income Tax Goods & Service TaxCustoms Duty Cess and other material statutory dues applicable to it with the appropriateauthorities.

• There were no undisputed amounts payable in respect of Provident FundEmployees' State Insurance Income Tax Goods & Service Tax Customs Duty Cess andother material statutory dues in arrears as at March 31 2019 for a period of more thansix months from the date they became payable.

•Details of dues of Income Tax Sales Tax Service Tax Excise Duty and ValueAdded Tax which have not been deposited as at March 31 2019 on account of disputes aregiven below:

Nature of the statute Nature of dues Forum where dispute is pending Period to which the amount relates Amount
Central Excise Act 1944 Excise duty CESTAT Mumbai 2002-2006 71
Finance Act 1994 Service tax Joint Commissioner of Service Tax Nagpur 2008-2009 32
Karnataka Value Added Tax 2003 Value Added Tax Joint Commissioner of Commercial Taxes (Appeals) Bengaluru 2006-2012 21
Karnataka Value Added Tax 2003 Value Added Tax High Court of Karnataka Bengaluru 2013 to 2015 334
Income Tax Act 1961 Income tax liability as per order passed U/s. 143(3) of the Income Tax Act 1961 Commissioner of Income Tax (Appeals-I) Bengaluru AY 2014-15 37
AY 2013-14 283

Note: Amounts reflected as part of disputed liability pertains to the principal claimmade by the respective Departments.

• The Company has not taken any loans or borrowings from financial institutionsbanks and government or has not issued any debentures. Hence reporting under clause 3(viii) of the Order is not applicable to the Company.

• The Company has not raised moneys by way of initial public offer or furtherpublic offer (including debt instruments) or term loans and hence reporting under clause 3(ix) of the Order is not applicable to the Company.

• To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company or no material fraud on the Company by its officersor employees has been noticed or reported during the year.

• In our opinion and according to the information and explanations given to usthe Company has paid/provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the Act.

• The Company is not a Nidhi Company and hence reporting under clause 3 (xii) ofthe Order is not applicable to the Company.

• In our opinion and according to the information and explanations given to usthe Company is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with related parties and the details of related partytransactions have been disclosed in the Standalone Financial Statements as required by theapplicable accounting standards.

• During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly paid convertible debentures and hence reportingunder clause 3 (xiv) of the Order is not applicable to the Company.

• In our opinion and according to the information and explanations given to usduring the year the Company has not entered in to any non-cash-transactions with itsDirectors or persons connected to its Directors and hence provisions of Section 192 of theCompanies Act 2013 are not applicable to the Company.

• The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

For SRINIVAS & SUBBALAKSHMI
Bengaluru J H MADAN SRINIVAS Chartered Accountants
May 18 2019 Partner (Membership No. 021643) Firm Registration No. 011350S

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