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Notes to Accounts of Ador Fontech Ltd.

Mar 31, 2015

1. General information

Ador Fontech Limited was incorporated on August 22, 1974 and is a front runner organisation that operates on the philosophy of 'partnering' with its clients in recommending and implementing value-added fusion, surfacing, spraying & environmental solutions. The Company is dedicated to the supply of products, services and solutions that meet and exceed the needs of its end-users under the broad gamut of 'Life enhancement of industrial components'.

2 Related party transactions

a. Names of related parties and description of relationship with the Company

(i) Associate companies: J B Advani and Company Pvt. Ltd., Ador Welding Ltd., Ador Welding Academy Pvt. Ltd., and Ador Powertron Ltd.

(ii) Related personnel (by virtue of shareholding in associate companies): Mrs. Vimla A Lalvani and Mr. Deep A Lalvani

(iii) Joint venture entity: Dualrank Fontech (M) Sdn. Bhd.

(iv) Wholly owned subsidiary: 3 D Future Technologies Private Limited

(v) Whole time Directors(WTD): Mr. H P Ledwani and Mr. A T Malkani

(vi) Relative of WTD/MD: Mrs. Sunila H Ledwani.

3. Defined contribution scheme

Superannuation: The amounts are determined and defrayed to a trust fund, year on year and hence no further liability accrues to the Company on this account as on the date of the Balance Sheet.

4. Defined benefit obligation

Leave encashment: Cumulative defined benefit obligation of compensated absences (unfunded) amounts to Rs. 536/- lakhs (Rupees five hundred and thirty six lakhs) as per actuarial valuation. The same has been provided for in the books of account.

5. Segment reporting

a. Segment policies: Revenues and identifiable operating expenses in relation to the segments are categorised based on items that are individually identifiable to that segment. In cases, where the management believes it is not practical to provide disclosure relating to some expenses, then these expenses are separately disclosed as 'unallocated' & adjusted against the total income of the Company. The accounting policies adopted for segment reporting are in line with accounting policies adopted by the Company for the purpose of financial statements.

6. Contractual liabilities

All other contractual liabilities connected with business operations of the Company have been appropriately provided for.

7. Realisations

In the opinion of the Board and to the best of its knowledge and belief, the value on realisation of current assets, loans and advances, will in the ordinary course of business be not less than the amounts at which they are stated in the Balance Sheet.

8. Transfer pricing

Transfer pricing report duly audited were filed for the Assessment Year 2014-15. Similar compliance shall be made by the Company for the Assessment Year 2015-16. Further, the Management is of the opinion that its transactions are on arm's length basis so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for tax.


Mar 31, 2014

2. Disclosure under Micro, Small and Medium Enterprises Development Act, 2006

The Company has not received any information from its vendors regarding their status under Micro, Small and Medium Enterprises Development Act, 2006. Nonetheless, there are no amounts outstanding for a period beyond the stipulated period as specified under the said Act.

1.2 Related party transactions

a. Names of related parties and description of relationship with the Company

(i) Associate companies:J B Advani and Company Private Limited, Ador Welding Limited, Ador Welding Academy Private Limited and Ador Powertron Limited (ii) Related personnel (by virtue of shareholding in associate companies): Mrs. Vimla A Lalvani and Mr. Deep A Lalvani (iii) Joint venture: Dualrank Fontech (M) Sdn. Bhd. (iv) Key management/managerial personnel (KMP): Mrs. N Malkani Nagpal, Mr. H P Ledwani and Mr. A T Malkani (v) Relatives of KMP: Mrs. Sunila H Ledwani.

1.3 Defined contribution scheme

Superannuation: The amounts are determined and defrayed to a trust fund, year on year and hence no further liability accrues to the Company on this account as on the date of the Balance Sheet.

1.4 Defined benefit obligation

Leave encashment: Cumulative defined benefit obligation of compensated absences (unfunded) amounts to Rs. 535/- lakhs (Rupees five hundred and thirty five lakhs) as per actuarial valuation. The same has been provided for in the books of account.

1.5 Segment reporting

a. Segment policies: Revenues and identifiable operating expenses in relation to the segments are categorised based on items that are individually identifiable to that segment. In cases, where the management believes it is not practical to provide disclosure relating to some expenses, then these expenses are separately disclosed as ''unallocated'' & adjusted against the total income of the Company. The accounting policies adopted for segment reporting are in line with accounting policies adopted by the Company for the purpose of financial statements.

b. Business segments: For Management reporting purpose, the Company is organised in to two major operating segments: (i) Products (ii) Services

1.6 Contractual liabilities

All other contractual liabilities connected with business operations of the Company have been appropriately provided for.

1.7 Realisations

In the opinion of the Board and to the best of its knowledge and belief, the value on realisation of current assets, loans and advances, will in the ordinary course of business be not less than the amounts at which they are stated in the Balance Sheet.

1.8 Transfer pricing

Transfer pricing report duly audited were filed for the Assessment Year 2013–14. Similar compliance will be made by the Company, for the Assessment Year 2014–15. Further, the Management is of the opinion that its transactions are at arm''s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for tax.

In compliance with the provisions of Section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management and Administration) Rules, 2014, the Company is pleased to provide its Members facility to exercise their right to vote at the 39th Annual General Meeting (AGM) by electronic means and the business to be transacted through e-voting services provided by National Securities Depository Limited (NSDL).

The instructions for e-voting are as under:

1. In case a Member receives an email from NSDL [for Members whose email ids are registered with the Company/Depository Participant(s)]:

a. Open email and open PDF file ''Ador Fontech – e-voting.pdf'' with your Client ID or Folio No. as password. The said PDF file contains your user ID and password/PIN. Please note that the password is an initial password.

b. Launch the internet browser and type the URL https://www.evoting.nsdl.com.

c. Click on Shareholder-Login.

d. Input User ID, Password and Click Login.

e. Password change menu appears. Change the password/PIN with a new password of your choice with minimum 8 digits/characters or combination thereof. Please note down the new password. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential.

f. Home page of e-voting opens. Click on e-voting – Active voting cycles.

g. Select "EVEN" of Ador Fontech Limited.

h. Now you are ready for e-voting as ''Cast Vote'' page opens.

i. Cast your vote by selecting the appropriate option and click on ''Submit'' and also ''Confirm'' when prompted.

j. Upon confirmation, the message ''Vote cast successfully'' will be displayed.

k. Once you have voted on the resolutions, you will not be allowed to modify your vote.

l. Institutional shareholders (Corporate/FIs/FIIs/Trust/Mutual Funds/Banks, etc.) are required to send scanned (PDF/JPEG format) of the relevant Board resolution/Authority letter, etc. together with attested specimen signature of duly authorised signatory(ies) who are authorised to vote, to the Scrutiniser through e-mail ''mahesh@legalcliff.in'' with a copy marked to ''evoting@nsdl.co.in''.

2. In case a Member receives physical copy of the Notice to the AGM [for Member(s) whose email ids are not registered with the Company/Depository Participant(s) or who have requested for physical copy]:

a. Kindly refer User ID and Password provided in the enclosed ''Attendance Slip''

EVEN (E Voting Event Number) USER ID PASSWORD/PIN

b. Please follow all steps from Sl No. (b) to Sl No. (i) of point no. 1 above, to cast vote.

c. If you are already registered with NSDL for e-voting then you can use your existing user ID and password/PIN for casting your vote.

d. You can also update your mobile number and e-mail id in the user profile details of the folio which may be used for sending future communication(s).

e. The e-voting period commences from 14.08.2014 (9:30 hours) and ends on 16.08.2014 (16.30 hours). During this period, the Shareholders'' of the Company, holding shares either in physical form or in dematerialised form, as on the cut-off date - July 18, 2014, may cast their vote electronically. Once the vote on a resolution is cast by the Shareholder(s), it shall not be allowed to change subsequently.

f. The voting rights of the Shareholder(s) shall be in proportion to their shares reckoned on the paid-up equity share capital of the Company as on the cut off date – July 18, 2014.

g. Mr. Mahesh Shenoy, Company Secretary (FCS Membership#5647 and CP#4262) having office at No. 152, 2/3, 1st floor, 9th Cross, 80 Feet Main Road, J P Nagar 1st Phase, Bangalore 560 078 and failing him, Ms. Manjula Narayan (ACS Membership#28374 and CP#10150), having office at No. 22/A, 4th Cross, Venkateshwara Theatre Road, Devasandra, Krishnarajapuram, Bangalore 560 036; Company Secretary(ies) in practice have been appointed as the Scrutiniser(s) to scrutinise the e-voting process in a fair and transparent manner.

h. The Scrutiniser(s) shall from the conclusion of the e-voting period unblock the votes in the presence of at least two (2) witnesses not in the employment of the Company, make a Scrutiniser''s Report of the votes cast in favour or against and submit it to the Chairman of the Company.

In case of any queries, you may refer to the Frequently Asked Questions (FAQs) for Members and e-voting User Manual available at the download section of https://www.evoting.nsdl.com or contact NSDL – Tel: (022) 24994600.

POLL AT THE MEETING

At the end of the AGM, the Chairman will order for a poll in respect of the items provided in the Notice. Poll will be conducted and supervised by the Scrutiniser(s) to be appointed for this purpose. After conclusion of the poll, the results (including consolidated result of e-voting and poll) will be announced and thereafter the meeting will be declared as closed.


Mar 31, 2013

Note 1

Basis of preparation of financial statements

These financial statements are prepared under the historical cost basis of accounting and evaluated on a going concern basis, with revenues recognised and expenses accounted for on their accrual to comply in all material aspects with the applicable Accounting Principles and applicable Accounting Standards notified u/s. 211 (3C) of the Companies Act, 1956, other relevant provisions of the Companies Act, 1956 and the guidelines issued by the Securities and Exchange Board of India (SEBI).

Use of estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported balances of assets and liabilities as on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. All the assets and liabilities have been classified as current or non current as per the Company''s normal operating cycle and other criteria set out in Schedule VI to the Companies Act, 1956. Accounting estimates could change from period to period. Actual results could differ from these estimates. Appropriate changes in estimates are made as and when the Management becomes aware of the changes in the circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which the changes are made and if material, their effects are disclosed in the notes to the financial statements. The following significant accounting policies have been adopted in the preparation and presentation of the financial statements:

2.1 Disclosure under Micro, Small and Medium Enterprises Development Act, 2006

The Company has not received any information from its vendors regarding their status under Micro, Small and Medium Enterprises Development Act, 2006. Nonetheless, there are no amounts outstanding for a period beyond the stipulated period as specified under Micro, Small and Medium Enterprises Development Act, 2006.

2.2 Related party transactions

(a) Names of related parties and description of relationship with the Company

(i) Associate companies:J B Advani and Company Private Limited, Ador Welding Limited, Ador Welding Academy Private Limited, Ador Multiproducts Limited and Ador Powertron Limited

(ii) Related personnel (by virtue of shareholding in associate companies):

Mrs. Vimla A Lalvani and Mr. Deep A Lalvani

(iii) Joint venture : Dualrank Fontech (M) Sdn. Bhd.

(iv) Key managerial personnel: Mrs. N Malkani Nagpal

Mr. H P Ledwani

Mr. A T Malkani (v) Relatives of key management personnel: Mrs. Sunila H Ledwani

2.3 Defined contribution scheme

Superannuation:

The amounts are determined and defrayed to a trust fund, year on year and hence no further liability accrues to the Company on this account as on the date of the Balance Sheet.

2.4 Defined benefit obligation

Leave encashment:

Cumulative defined benefit obligation of compensated absences (unfunded) amounts to Rs.536/- lakhs (Rupees five hundred and thirty six lakhs) as per actuarial valuation. The same has been provided for in the books of account.

2.5 Segment reporting

(a) Segment policies

Revenues and identifiable operating expenses in relation to the segments are categorised based on items that are individually identifiable to that segment. In cases, where the management believes it is not practical to provide disclosure relating to some expenses, then these expenses are separately disclosed as ‘unallocated'' and adjusted against the total income of the Company. The accounting policies adopted for segment reporting are in line with accounting policies adopted by the Company for the purpose of financial statements.

(b) Business segments

For Management reporting purpose, the Company is organised in to two major operating segments: (i) Products

(ii) Services

2.6 Contractual liabilities

All other contractual liabilities connected with business operations of the Company have been appropriately provided for.

2.7 Realisations

In the opinion of the Board and to the best of its knowledge and belief, the value on realisation of current assets, loans and advances, will in the ordinary course of business be not less than the amounts at which they are stated in the Balance Sheet.

2.8 Transfer pricing

A comprehensive system of maintenance of information and documents is required by the transfer pricing legislation under sections 92-92F of the Income-tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company is in the process of documentation of international transactions entered in to with associate enterprises during the financial year and expects such records to be in existence at the time of filing of the income-tax return. Management is of the opinion that its international transactions are at arm''s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for tax.


Mar 31, 2012

The financial statements for the year ended March 31, 201 1 was prepared as per the then-applicable pre-revised Schedule of the Companies Act, 1956. Consequent to the notification of the revised schedule VI under the Companies Act, 1956, the financial statements for the year ended March 31, 2012 are prepared as per the revised schedule VI. Accordingly, the previous year's figures have also been re-classified to conform to this year's classification. The adoption of revised schedule VI for the previous year's figures does not impact recognition and measurement principles followed for the preparation of these financial statements.

NOTE 1: Notes on accounts as per revised schedule Shareholders' Fund

The Company has only one class of shares, referred to as equity shares having a par value of Rs 2/- per share. Each holder of equity shares is entitled to one vote per share and dividend as may be declared at the Annual General Meeting. The right of the shareholders is governed by the Articles of Association and the Companies Act.

(c) (i) As on the Balance sheet date (a) The Company did not issue any equity shares as fully paid pursuant to contracts, without payment being received in cash (b) The Company did not issue any fully paid bonus shares.

(ii) The Company also did not buy back any equity shares as on the date of the Balance sheet.

(d) Issue/conversion of equity shares:

As on the date of the Balance sheet, the Company has not issued any securities like convertible preference shares, convertible debentures etc., which are convertible in to equity/preference shares.

1.2 Deferred tax

Deferred tax is recognized subject to consideration of prudence on timing difference, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred tax assets and deferred tax liabilities are offset when there is a legal enforceable right to set off assets against liabilities representing current tax and where the deferred tax assets and deferred tax liabilities relate to taxes on income levied by the same governing taxation laws.

1.3Operating lease

The Company has entered in to cancellable operating lease with an option to renew in respect of certain god owns, offices and residential premises. The expenditure incurred thereon amounting to Rs 62,21,948 (Previous year Rs 72,96,013) has been charged to the Statement of profit and loss.

1.4 Disclosure under Micro, Small and Medium Enterprises Development Act, 2006

The Company has not received any information from its vendors regarding their status under Micro, Small and Medium Enterprises Development Act, 2006. Nonetheless, there are no amounts outstanding for a period beyond the stipulated period as specified under Micro, Small and Medium Enterprises Development Act, 2006.

1.5Defined contribution scheme

Superannuation: The amounts are determined and defrayed to a trust fund year on year and hence no further liability accrues to the Company on this account as on the date of the Balance sheet.

1.6Defined benefit obligation

Leave Encashment: Defined benefit obligation of compensated absence (unfunded) amounts to Rs.477 lakh (Rupees four hundred and seventy seven lakh) as per actuarial valuation. The same has been provided for in the books of account.

(a) *Inter-corporate-deposit provided by Ador Fontech Limited to Ador Powertron Limited has been repaid in full during the year.

(b) As regards related parties there are no balances due or outstanding as at March 31, 2012.

(c) Previous year's data have been reflected in brackets.

1.7Segment reporting

(a) Segment policies: Revenues and identifiable operating expenses in relation to the segments are categorized based on items that are individually identifiable to that segment. In cases where the management believes it is not practical to provide disclosure relating to some expenses, then these expenses are separately disclosed as' unallocated' and adjusted against the total income of the Company.

(b) Business segments: For Management reporting purposes, the Company is organized in to two major operating segments:

(i) Products

(ii) Services

The above segments have been identified taking in to account the organization structure as well as the differing risks and returns of these segments.

(c) The accounting policies adopted for segment reporting are in line with the accounting policies adopted by the Company for the purpose of these financial statements.

1.8 Realizations

In the opinion of the Board and to the best of its knowledge and belief, the value on realization of current assets, loans and advances, will in the ordinary course of business be not less than the amounts at which they are stated in the Balance sheet.

1.9Contractual liabilities

All other contractual liabilities connected with business operations of the Company have been appropriately provided for.

1.10Amounts in the financial statements Amounts in the financial statements are rounded off to rupees in lakhs.


Mar 31, 2011

1. Quantitative information as required under paragraphs 3 and 4 of Part II of Schedule VI of the Companies Act, 1956.

The installed capacity is the annual capacity and is computed based on the maximum utilisation of plant and machinery. Installed capacity is as certified by the management and relied upon by the Auditors.

2. Details of goods traded:

The Company deals with innumerable items of welding consumables, equipment spares and refurbishment products of various sizes and grades which are sold under various measures. Hence, it is impractical to submit relevant quantitative particulars of each such items traded by the Company.

3. Segment reporting under Accounting Standard 17:

a. Primary business segments - Revenue from products (manufacturing and trading activities)

- Revenue from job works and other income

4. Related party disclosure under Accounting Standard 18:

a. Holding Companies : Nil

b. Subsidiary Companies : Nil

c. Associate Companies : J B Advani and Company Private Limited (JBA)

Ador Welding Limited (AWL)

Ador Powertron Limited (APL)

d. Key management personnel : Mr. H P Ledwani

e. Relatives of key management personnel : Mrs. Sunila H Ledwani (where transactions have taken place)

5. Disclosure for leases under Accounting Standard 19:

a. Financial Lease:

The net carrying amount of assets acquired under financial lease: Nil

b. Operating Lease:

The Company has entered in to cancellable operating lease with an option to renew in respect of certain godowns, offices and residential premises. The expenditure incurred thereon amounting to Rs. 72,96,014/- (Previous year Rs. 52,48,900/-) has been charged to the Profit and loss account.

6. Employee benefits:

The Company has determined liability for Employee benefits as at March 31, 2011 in accordance with the Accounting Standard 15

b. Defined benefit obligation of compensated absence (unfunded) amounts to Rs. 4,05,71,391/- (Rupees four crore five lakh seventy one thousand three hundred and ninety one only) as at March 31, 2011.

7. Amount transferred to the Investor education and protection fund during the year was Rs. 2,62,452/- (Rupees two lakh sixty two thousand four hundred and fifty two only).

8. a. Working capital facilities from banks are secured by a charge on fixed assets, book debts and hypothecation of the Companys stock, both present and future.

b. The charge on movable and immovable properties (both present and future) in favour of the Companys bankers also covers guarantees and letters of credit, if any, issued by them in the normal course of business.

9. Micro, Small and Medium Enterprises Development Act, 2006:

The Company has not received any intimation from its vendors regarding their status under Micro, Small and Medium Enterprises Development Act, 2006. Nonetheless, there are no amounts outstanding for a period beyond the stipulated period as specified under Micro, Small and Medium Enterprises Development Act, 2006.

10. Figures in brackets indicate negative values.

11. Figures of the previous year have been regrouped/recast wherever necessary, to conform to the current periods classification.

 
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