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Ador Fontech Ltd.

BSE: 530431 Sector: Engineering
NSE: N.A. ISIN Code: INE853A01022
BSE 00:00 | 18 Jun 53.20 -1.75






NSE 05:30 | 01 Jan Ador Fontech Ltd
OPEN 54.95
VOLUME 55715
52-Week high 58.80
52-Week low 29.10
P/E 14.66
Mkt Cap.(Rs cr) 186
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 54.95
CLOSE 54.95
VOLUME 55715
52-Week high 58.80
52-Week low 29.10
P/E 14.66
Mkt Cap.(Rs cr) 186
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Ador Fontech Ltd. (ADORFONTECH) - Director Report

Company director report

To the Members

Greetings and we trust that this Report finds you and your family inthe best of health and well-being. We are delighted to present the 45th Annual Report onthe business operations of the Company and the financial statements for the year endedMarch 31 2020.


Rupees In Lakhs

Details Standalone Consolidated
2019-20 2018-19 2019-20 2018-19
Revenue 17766 18723 17999 18934
Earnings before interest tax and depreciation 1969 2283 1726 1972
Finance/Interest cost - - (45) (15)
Depreciation (264) (276) (320) (328)
Profit before tax 1705 2007 1361 1629
Tax (572) (625) (478) (530)
Profit after tax 1133 1382 883 1099
Opening balance of Profit 3601 3049 2838 2571
Transfer to General reserve (200) (200) (200) (200)
Dividend including distribution tax (1498) (630) (1498) (632)
Capitalisation towards bonus issue (178) - (178) -
Closing balance of Profit 2858 3601 1845 2838
Total comprehensive income 1162 1440 910 1158


The Board of Directors had declared an interim dividend at the rate of90% being Rs.1.80 (Rupee one and paise eighty) per equity share of the face value Rs.2/-(Rupees two each) for the year ended March 31 2020 and an amount of rupees seven hundredand fifty nine lakhs inclusive of dividend distribution tax of rupees one hundred andtwenty nine lakhs has been defrayed.

Further the Board has recommended transferring rupees two crores ofprofit to the General Reserve being same as the previous year.



The Company registered revenue of Rs.178 crores against Rs.187 croresof the previous year. The reduction is attributed to the fact that Offices and factorieshad to be closed in the month of March 2020 due to the announced lockdown owing toCovid-19 pandemic. Going forward it is opined that the financial year 2020-21 may be atough year for all business units including our Company. Focus will be on sustenanceagainst the general congruence of growth which would be enunciated during normal times.


The Company's wholly owned subsidiary registered a turnover ofrupees two crores and thirty three lakhs against rupees two crores and eleven lakhs of theprevious year an increase of ten percent. However the Company being under gestationprofit remained under constraint. Noteworthy achievement was enhancement in the networkbase to include registration of 472 orthodontists who will remain as brand ambassadors of3D Future Technologies. The Company also spread its geographical base amongst major citiesto include Bengaluru Chennai Pune Ahmedabad Mumbai besides NCR region. While thegrowth was on an inclination path the Covid-19 pandemic has impacted the business duringthe month of March 2020 and it is expected to remain weakened during the financial year2020-21.


As mandated by the Ministry of Corporate Affairs the financialstatements for the year ended March 31 2020 has been prepared in accordance with theIndian 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 asamended from time to time. The estimates and judgements relating to the financialstatements are made on a prudent basis so as to reflect in a true and fair manner theform and substance of transactions to reasonably present the Company's state ofaffairs profits and cash flows for the year ended March 31 2020.


The paid up Equity Share Capital as on March 31 2020 was Rs. 700 lakhsdivided in to 350 lakhs equity shares of Rs. 2/- each. Hitherto the capital was Rs. 350lakhs divided in to 175 lakhs equity shares. Further during the year under review theCompany effected bonus issue in the ratio of 1:1 to eligible Shareholders of the Companyvide Board meeting dated August 01 2019 which was allotted with due permissions fromRegulatory Authorities on September 23 2019.

(Eligible Shareholders means - Equity Shareholders whose names appearedin the Register of Members and to the Beneficial Owners whose particulars were furnishedby the Depositories as on the record date).


The Company has an appropriate mix of Executive Non-Executive andIndependent Directors with distinctiveness in functions of governance and management. Atthe end of the financial year 2019-20 the composition of Board was as under:

Name Designation
Mr. A T Malkani Executive Chairman
Mr. H P Ledwani CEO and Managing Director
Mrs. N Malkani Nagpal Non Executive; Promoter Director
Mr. N S Marshall Independent Director
Mr. Santosh Janakiram Independent Director
Mr. Rafique Malik Independent Director

The Board met six times during the year details of which are given inthe Corporate Governance Report which forms part of this Annual Report. The interveninggap between the meetings was within the period prescribed under the Companies Act 2013and SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015.

As required under the provisions of sub-section (3) of Section 178 ofthe Companies Act 2013 the Company has adopted optimum policies for Director'sappointment and remuneration. The policy is also hosted on the website of the Company


Director seeking re-appointment as liable to retire by rotation

In accordance with the provisions of Section 152(6) of the CompaniesAct 2013 read with relevant provisions of the

Articles of Association of the Company Mrs. N Malkani NagpalNon-Executive/ Woman Director is liable to retire by rotation and being eligible hasoffered her candidature for re-appointment.

Directors seeking re-appointment at the AGM

The term of the Chairman and Managing Director was up to March 312020. Before cessation and based on the recommendation of the Management DevelopmentNomination and Remuneration Committee; the Board at its meeting held on February 05 2020approved their re-appointment for a period of three years and one year respectivelysubject to the consent of Members at the ensuing Annual General Meeting.

Further Mr. Rafique Malik's appointment as Independent Directorwould cease before the AGM and the Board has subject to the approval of Shareholdersextended his term for another period of five years.


Pursuant to the requirements under Sections 134(3)(c) and 134(5) of theAct with respect to the Directors' Responsibility Statement it is hereby confirmed:

In the preparation of the annual accounts for the year ended March 312020; the applicable accounting standards read with the requirements set out underSchedule III to the Act have been followed and there are no material departures from thesame.

The Directors have selected such accounting policies and applied themconsistently and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at March 31 2020 andof the profit of the Company for the year ended on that date.

The Directors have taken proper and sufficient care for maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing detecting fraud and other irregularities.

The Directors have prepared the annual accounts on a ‘goingconcern' basis.

The Directors have laid down internal financial controls to be followedby the Company and that such internal financial controls are adequate and are operatingeffectively and

The Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.


During the year under report Mr. Deep A Lalvani exited from theservices of the Company on November 30 2019 and Ms. Tanya H Advani joined theorganisation on November 19 2019 to focus on the strategic perspective of the whollyowned subsidiary 3D Future Technologies Private Limited.

Further Mr. P Viswanathan retired from the services of the Company andMr. R Krishnakumar was elevated as the Chief Operating Officer.

Mr. Melville Ferns and Mr. Rajesh V Joshi were promoted as ExecutiveVice Presidents to head strategic business verticals.

Mr. P Gopa Kumar was appointed as Chief Financial Officer vide Boardmeeting dated May 17 2019 which was duly notified vide Annual Report of 2018-19.

There were no other changes in the Board or Key Managerial Personnelduring the financial year 2019-20.


The Board has accepted all the recommendations of the Audit Committeeand hence no further explanations have been provided for in this Report.


The Board

The Company has during the year conducted an evaluation of the Boardas a whole its committees and individual Directors including Independent Directors asstipulated in the Nomination and Remuneration Policy adopted by the Company and as per theprovisions 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 strategies

Corporate budget

Capital expenditure

Performance of products

Committee wise reviews

Other parameters for such evaluation comprised - level ofparticipation integrity independence knowledge impact and influence on the Board. TheIndependent Directors of the Company also convened a separate meeting on February 5 2020and 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 beendrawn.

Staff members

Performance management systems are in place and half yearly reviews arefacilitated to provide feedback to the employees on their performance.


Internal Control system and checks are in place. Every transaction hasa maker and checker concept and further approval and authorisation matrix are in place toensure that the accounting records are perfected to the best extent possible. Furtherthere are Internal and Branch audits which are conducted both on quarterly and on anannual basis respectively by external Chartered Accountant Firms.

During the year under review neither the Statutory Auditors nor theSecretarial Auditor have reported to the Audit Committee under Section 143(12) of theCompanies Act 2013 any instance of fraud committed against the Company by its Officers oremployees the details of which need to be mentioned in the Board's report.


Statutory Audit

In respect of the financial year 2019-20 there are no qualification(s)or reservation(s) or adverse remark(s) or disclaimer(s) specified in the audit reports.Hence explanations or comments on the same do not become applicable.

Secretarial Audit

The Company has complied with all applicable provisions of theSecretarial Standards and Secretarial Audit Report for the financial year 2019-20 detailsof which forms part of the Annual Report.

Cost Audit

The Company maintains cost accounting records and has cost controlmeasures in place. As per best practices the Company suo motto ensures conduct of costaudit.


Statutory Audit

M/s. Praveen & Madan (earlier name - Srinivas & Subbalakshmi)Chartered Accountants (Firm Registration No. 011350S) having office at No. 237 2ndcross Cambridge

Layout Halasuru Bengaluru 560 008 have been appointed for a term offive years which will conclude at the end of the 47th Annual General Meeting. The Companyhas received communication from the Auditors to the effect that their appointment remainsin accordance with the provisions of Section 141 of the Companies Act 2013.

Secretarial Audit

The Board has appointed Ms. Manjula Narayan Company Secretary inPractice (ACS Membership No. 28374 & COP No. 10150) having office at No. 22/A 4thCross Venkateshwara Theatre Road Devasandra Krishnarajapuram Bengaluru 560 036 as theSecretarial Auditor of the Company for the financial year 2020-21.

Cost Audit

M/s. Rao Murthy and Associates Cost Accountants (Firm Registration No.000065) having office at 23/33 Surveyor's Street Basavanagudi Bengaluru 560 004have been appointed as the Cost Auditor and resolution for ratification of remunerationhave been placed before the Members.


An extract of the Annual Return for the year 2019-20 in form MGT-9 andMGT-7 in respect of the previous year have been uploaded on the website at and a brief summary of the same forms part of thisreport.


Pursuant to the provisions of the Companies Act 2013 read with theIEPF Authority (Accounting Audit Transfer and Refund) Rules 2016 ('theRules') notified by the Ministry of Corporate Affairs all unpaid or unclaimeddividend 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 beenclaimed by the Shareholder(s) for seven consecutive years or more will have to betransferred to the demat account of the IEPF Authority. Accordingly the Company hastransferred Rs.1258786 (Rupees twelve lakhs fifty eight thousand seven hundred andeighty six only) and 13500 equity shares of Rs.2/- each to the IEPF Authority. Details ofunclaimed dividend and equity shares transferred have been hosted on the website of theCompany.


The joint venture M/s. Dualrank Fontech which had ceased functioninghas been duly closed as per Malaysian Laws vide the process of striking off by theCompanies Commission of Malaysia (Suruhanjaya Syarikat Malaysia) under Section 550 of theMalaysian Companies Act 2016 dated January 17 2020.


The Company's wholly owned subsidiary - 3D Future TechnologiesPrivate Limited (3DFT) - has been growing well in terms of market reach. To support thefunctioning of the Company both direct and indirect financial support were enunciated.Direct in ux of rupees one crore as inter-corporate-deposit was targeted during the yearof which rupees eighty lakhs was defrayed and as regards indirect support lien oninvestments was enhanced to facilitate additional overdraft facility from the HDFC bank tothe tune of rupees one crores in all adding up to a working capital facility from theHDFC Bank to 3DFT to the extent of rupees six crores. Further the capital structure ofthe subsidiary remained as is at rupees eight crores and fifty lakhs with no additionalcontribution during the year.

It may be pertinent to note that during the financial year 2020-21 dueto the Covid-19 pandemic and with probable fall in the value of securities which have beenlien marked as a prudent measure the Company has decided to redeem some of its lienmarked investments and take over the funding from the HDFC bank as Inter-Corporate Deposit(ICD) and the targeted foreclosure is rupees four crores. This would also entailsignificant savings in interest cost to the Group.


The Company's Research and Development Team (R & D) team hadlargely developed variants of special purpose electrodes to cater to the indigenousrequirement. During the course of the year the Company obtained trademarks registrationfor its branded inverter based equipment - Thunder-Thy & Trendy-i.


The Company's products are manufactured to international standardswith adherence to quality systems and marketed under registered Trademarks. Further theprimary logo of the Company ‘Ador Fontech' is a registered mark under Class 67 37 and 40 of the Trade Marks Act 1999.


During the financial year 2019-20 Inter-corporate-deposit (ICD) to 3DFuture Technologies Private Limited (3DFT) and Ador Powertron Limited were facilitated ofwhich principal along with interest were duly repaid by the latter. Being wholly ownedsubsidiary and the company being nascent ICD provided to 3DFT remained outstanding at theend of the year. The reckoning of interest for ICD was placed significantly higher thanthe bank rate.

The requirement for ICD emanated from the need to bridge financeworking capital requirements as per request letters received from the respectivecompanies.

Note: Aggregate of investments and loans provided are within the powersand limits specified under Sections 179 185 and 186 of the Companies Act 2013.


The Company during the year completed acquisition of a piece of land atKIADB (Karnataka Industrial Area Development Board) Avverahalli Dabaspet IndustrialArea Nelamangala Taluk Bengaluru with due process of registration completed. WithCovid-19 pandemic looming large the enunciated project to build a factory has been put onhold till restoration of normalcy in business.


The Company has not accepted any deposits from the public and as suchno amount on account of principal or interest on deposits from the public was outstandingas on the date of the Balance Sheet.


During the financial year 2019-20 the Company paid rupees five lakhsas contribution to the Prime Minister's Relief Fund towards Covid-19 contribution besidesit also undertook generic activities details of which have been provided as part of theReport on Corporate Social Responsibility.

Further while it has been the practice of the Company to contribute toAdor Fontech Charitable Fund with the onset of Covid-19 the same was retained with theCompany to be defrayed over the coming financial year(s) as part of relief measures.

To that extent there remains a shortfall in the total spend forfinancial year 2019-20.


There has been no significant material changes & commitmentsaffecting the financial position of the Company which have occurred between the end ofthe financial year and the date of this report. There were no significant orders passedagainst the Company by the Regulators or Courts or Tribunals impacting the going concernstatus and the Company's operations in the future.


The Company has over years maintained a nimble organisation withemployee focus on lower attrition rates particularly at the middle and apex of theorganisation structure. Employees are treated with respect and their feedbacks in terms ofpolicy decisions are modulated in the best positive interest. Further the Company has astrong vigil mechanism (whistleblower) policy and all employees have access to theChairman of the Audit Committee in case they may wish to report any concern.


The Company believes in providing a safe work environment to itsemployees. To ensure such environment the Company has adopted Anti-Sexual-Harassmentpolicy which is in line with the requirements of the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 and Rules framed thereunder.

An internal complaints committee has been specially constituted toredress complaints under sexual harassment. During the fiscal year 2019-20 there were nocomplaints received under this category.


The Company has set ‘Standard operating procedure (SOP)'derived from MHA guidelines and best practices of other organisations to set in the mosthygienic environment for safety and security of its employees coming to the work place.Placards at vantage points have been duly posted and messages were disseminated throughintranet platform emails mobiles etc. requiring adherence to the new safety standardrequirements particularly of wearing masks social distancing hand wash etc. and thesame are being constantly monitored.


The Company has robust quality systems to ensure testing of incomingin-process and nal products and the same is manned by a separate team of trained andexperienced quality control professionals. Besides the Research and Development (R&D)team also provides insights to nuances of checks and bounds to be maintained at regularintervals.


The Company has adopted a ‘Risk Management Policy' toidentify assess monitor and mitigate various risks which may impact the Company'sbusiness. The Company has an adequate framework to curtail any adverse impact on its coreoperations.

The Board of Directors and Management are committed towards identifyingmajor risks exposed to the business and means to mitigate the same.


The Company has sufficient insurance coverage encompassing AssetsInventories Transit covering movement of materials Vehicles etc.

The Company has also covered employee related risks for Personnelaccident Workmen compensation and Employees deposit linked insurance scheme etc. in orderto safeguard their personal interests.

A specific mediclaim policy including for cover Covid-19 is in placecovering all employees across the Company as per mandate from the Government.


As required under the provisions of Section 178(3) of the CompaniesAct 2013 and SEBI (LODR) Regulations 2015 the Company had adopted policy forDirectors' appointment and remuneration including criteria for determiningqualifications positive attributes independence of Directors etc. Details onremuneration policy are explained in the Corporate Governance Report.


Related party transactions

All transactions entered in to with Related Parties as defined underthe Companies Act 2013 and Regulation 23 of the SEBI (LODR) Regulations 2015 during thefinancial year were in the ordinary course of business and on an arm's lengthpricing 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 financialyear which were in conflict with the interest of the Company. Suitable disclosures asrequired by the Accounting Standards have been provided in the notes to the Standalone andConsolidated Financial Statements. The approved policy on ‘Related PartyTransactions' has been made available on the website of the Company.

Insider trading

The Company has adopted ‘Code of Conduct' for prevention ofInsider Trading with a view to regulate trading in securities by Directors and designatedpersons of the Company.

Further the Stock Exchange and Designated Employees are duly informedon 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/sPraveen & Madan Statutory Auditors for the year ended March 31 2020:

Particulars Amount
Audit fees 5
Certifications 2
Total 7

Details of utilisation of funds raised through preferential allotmentor qualified institutional placement as specified under Regulation 32 of the SEBI (LODR)Regulations 2015

There were no funds raised by the Company through preferentialallotment or qualified institutional placement during the financial year 2019-20.

Certificate on non- disqualification of Directors

A certificate from the Practicing Company Secretary has been receivedby the Company stating that none of the Directors on the Board of the Company have beendebarred or disqualified from being appointed or to continue as Directors.

Other disclosures

The following reports have been annexed/appended and forms part of theDirectors' Report:

Management discussion and analysis report

Corporate governance report

Report on CSR activities (including details of activities undertakenand amount spent)

Conservation of energy technology absorption foreign exchangeearnings & outgo

Particulars of arrangements/transactions made with related parties

Particulars of employees

Details of Subsidiary & Associates

Web link

All requisite documents have been uploaded on the website of theCompany ‘'.


The Company continues to sustain its commitment to highest levels ofquality superior service management robust information security practices and maturebusiness continuity management. These fundamental ethos and integrity will continue totranscend in the years to come.


The Directors of the Company wish to place on record their sinceregratitude to all Government and Regulatory Authorities Financial InstitutionsShareholders Customers Authorised Dealers Partners Suppliers besides allOrganisations associated with the Company for their continued patronage and co-operation.

Your Directors express their deep sense of appreciation to all StaffMembers for their contribution in the Company's quest for sustained growth andProfitability. Further look forward to their continued support in scaling greaterheights.

A T Malkani
Bengaluru Chairman
June 26 2020 DIN: 01585637