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Action Construction Equipment Ltd.

BSE: 532762 Sector: Engineering
NSE: ACE ISIN Code: INE731H01025
BSE 13:57 | 20 May 187.05 2.60
(1.41%)
OPEN

191.90

HIGH

191.90

LOW

186.50

NSE 13:44 | 20 May 187.45 3.35
(1.82%)
OPEN

189.70

HIGH

189.70

LOW

187.00

OPEN 191.90
PREVIOUS CLOSE 184.45
VOLUME 15443
52-Week high 291.55
52-Week low 154.30
P/E 20.49
Mkt Cap.(Rs cr) 2,228
Buy Price 187.10
Buy Qty 51.00
Sell Price 187.45
Sell Qty 230.00
OPEN 191.90
CLOSE 184.45
VOLUME 15443
52-Week high 291.55
52-Week low 154.30
P/E 20.49
Mkt Cap.(Rs cr) 2,228
Buy Price 187.10
Buy Qty 51.00
Sell Price 187.45
Sell Qty 230.00

Action Construction Equipment Ltd. (ACE) - Auditors Report

Company auditors report

To the Members of Action Construction Equipment Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying Standalone Financial Statements of Action ConstructionEquipment Limited (the Company) which comprise the Balance Sheet as at March 31 2021 andthe Statement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and Statement of Cash Flows for the year then ended and notes to thestandalone Ind AS Financial Statements including a summary of significant accountingpolicies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Companies Act 2013 as amended ("the Act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2021and its profit including other comprehensive income its changes in equity and its cashflows for the year ended on that date.

Basis for Opinion

We conducted our audit of the Standalone Ind AS Financial Statements in accordance withthe Standards on Auditing (SAs) specified under Section 143(10) of the Act. 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' issuedby the Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the Standalone Financial Statements under the provisionsof the Act and the Rules there under and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained are sufficient and appropriate to provide a basisfor our opinion on the Standalone Ind AS Financial Statements.

Emphasis of Matter

We draw your attention to the Note no 27 to the financial statements which describesthat the company has spent Rs.152.84 lacs on CSR activities however out of Rs.152.84lacs the Company has not spent Rs.83.24 lacs on CSR activities before March 31 2021 inaccordance with the Companies (Corporate Social Responsibility Policy) Amendment Rules2021 vide Notification dated January 22 2021. As explained to us the cheque for Rs.83.24lacs issued to the Implementing Agency was encashed on May 15 2021 and the ImplementingAgency informed the Company that the said amount could not be spent due to the Lockdownand COVID situation in Haryana and assured that this amount would be spent for the CSRActivities latest by July 2021. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Standalone Ind AS Financial Statements for the financialyear ended March 31 2021. These matters were addressed in the context of our audit of theStandalone Ind AS Financial Statements as a whole and in forming our opinion thereon andwe do not provide a separate opinion on these matters.

We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor's responsibilities for the Audit of Standalone Ind AS Financial Statements Sectionof our report including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of thematerial misstatement of the Standalone Ind AS Financial Statements. The results of theaudit procedures including the procedures performed to address the matters below providethe basis for our audit opinion on the accompanying Standalone Ind AS FinancialStatements.

Sr. No. Key Audit Matters How Our audit addressed the key audit matters
1. Revenue Recognition under Ind AS 115 - Revenue from Contracts with Customers
The Company has Four operating segments namely Cranes Segment Construction Equipment Segment Material Handling Segment and Agri Equipment Segment. The type of customers varies across these segments ranging from Dealers Corporates Government and Individuals. The multiplicity of products sales transactions distribution network and the contracts / arrangements with various customers across these segments are different involving significant risk and judgement. Revenue recognition in accordance with Ind AS 115 requires management to make certain judgements of distinct performance obligations like after sales services warranties discounts & rebates in the transaction price and allocating the transaction price to the performance obligations. Sale of goods depends upon the transfer of control of the goods to the customer usually on delivery of goods. There is a risk that revenue could be recognised in the incorrect period for sales transactions occurring on and around the year end therefore revenue recognition has been identified as a key audit matter. Principal Audit Procedures
In view of the significance of the matter we applied the following audit procedures in this area among others to obtain sufficient appropriate audit evidence:
- Evaluating the integrity of the information and technology general control environment and testing the operating effectiveness of key IT application controls.
- Evaluating the design and implementation of Company's controls in respect of revenue recognition.
- Testing the effectiveness of such controls over revenue cut off at year-end.
- Testing by selecting samples of revenue transactions recorded during the year.
- Assessed the appropriateness of Company's identification of performance obligations in its contracts with customers its determination of transaction price including allocation thereof to performance obligations and accounting policies for revenue recognition in accordance with the accounting principles laid down in Ind AS 115.
- On a sample basis making selections from sales entries and tracing to their contracts invoices delivery challan and goods outward register.
- Performed cut-off testing for samples of revenue transactions recorded before and after the financial year end date by comparing with relevant underlying documentation to assess whether the revenue was recognized in the correct period.

Information other than the Standalone Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the other information. The otherInformation comprises the Report of the Directors and the following Annexures thereonnamely Management Discussion and Analysis Report on the Corporate Governance Annualreport on Corporate Social responsibility Activities Form AOC-1 Form AOC-2 Conservationof energy Technology Absorption and exchange earnings and outgo but does not include theStandalone Ind AS Financial Statements and our auditor's report thereon

Our opinion on the Standalone Ind AS Financial Statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone Ind AS Financial Statements ourresponsibility is to read the other information and in doing so consider whether theother information is materiality inconsistent with the Standalone Ind AS FinancialStatements or our knowledge obtained during the course of our audit or otherwise appearsto be materially misstated If based on the work we have performed we conclude that thereis a material misstatement of this other information we are required to report that fact.We have nothing to report in this regard.

Responsibilities of Management and those charged with Governance for the StandaloneFinancial Statements

The Company's Board of Directors is responsible for the Implementation Guide onReporting Standards matters stated in Section 134(5) of the Act with respect to thepreparation of these Standalone Financial Statements that give a true and fair view of thefinancial position financial performance including other comprehensive income changes inequity and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards (Ind AS) specified underSection 133 of the Act read with companies (Indian Accounting Standards) Rules 2015 asamended. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities selection andapplication of appropriate accounting policies making judgments

and estimates that are reasonable and prudent and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Standalone Ind AS Financial Statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.

In preparing the Standalone Financial Statements the Board of Directors is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless the Board of Directors either intends to liquidate the Company or tocease operations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financialreporting process.

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

Our objectives are to obtain reasonable assurance about whether the Standalone Ind ASFinancial 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 userstaken on the basis of these Standalone Ind AS Financial Statements.

As part of an audit in accordance with Standard on Auditing we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatements of the Standalone Ind ASFinancial 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 an error as fraud may involvecollusion forgery intentional omission misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to audit in order to designaudit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the company hasadequate Internal Financial Controls system in place and the operating effectiveness ofsuch controls.

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

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosure in theStandalone Ind AS Financial Statements or if such disclosures are inadequate to modifyour opinion. Our conclusions are based on the audit evidence obtained up to the date ofour auditor's report. However future events or conditions may cause the Company to ceaseto continue as a going concern.

• Evaluate the overall presentation structure and contents of the Standalone IndAS Financial Statements including the disclosures and whether the Standalone Ind ASFinancial Statements represents the underlying transactions and events in a manner thatachieves fair presentation.

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 controls 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 themall relationships and other matters that may reasonably be thought to bear on ourindependence and 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 Ind AS FinancialStatements for the financial year ended March 31 2021 and are therefore key auditmatters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matters or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-Section (11) of Section 143 ofthe Act we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

2. As required by Section 143(3) of the Act we report that:

(a) 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.

(b) 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.

(c) The Balance Sheet the Statement of Profit and Loss including the Statement ofOther Comprehensive Income the Statement of Changes in Equity and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

(d) In our opinion the aforesaid Standalone Ind AS Financial Statements comply withthe Accounting Standards specified under Section 133 of the Act read with Companies(Accounting Standards) Rules 2015 as amended.

(e) On the basis of the written representations received from the directors as on March31 2021 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2021 from being appointed as a director in terms of Section 164(2) of theAct.

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these Standalone Ind AS Financial Statementsand the operating effectiveness of such controls refer to our separate Report in "AnnexureB" to this report. Our report expresses an unmodified opinion on the adequacy andoperating effectiveness of the Company's internal financial controls over financialreporting;

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirement of Section 197(16) of the Act as amended in our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of the Section 197 read with Schedule V of the Act.

(h) 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:

i. The Company has disclosed the impact of pending litigations on its financialposition in its Standalone Ind AS Financial Statements;

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

for BRAN & ASSOCIATES
Chartered Accountants
ICAI Firm Registration No.014544N
CA Ravi Gulati
Partner
Membership No. 090672
UDIN: 21090672AAAABS6659
Place : Faridabad
Date : 28th May 2021

Annexure A to the Independent Auditors' Report

The Annexure referred to in our Independent Auditors' Report to the members of theCompany on the Ind AS Standalone Financial Statements for the year ended March 31 2021we report that:

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

(b) The Company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified on regular basis. In accordance with this programmecertain fixed assets were verified during the year and no material discrepancies werenoticed on such verification. In our opinion this periodicity of physical verification isreasonable having regard to the size of the Company and the nature of its assets.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company except the Office Buildings located at Faridabad (Haryana)& Kolkata (West Bengal) amounting to Rs 6.81 Crores purchased during the financialyear have not been registered in the name of the Company due to COVID 19 restrictions. Asexplained to us the registration of the title deeds is in progress in respect of the aboveproperties acquired during the previous year.

(ii) Physical verification of inventory was conducted by the management at reasonableinterval during the year.

In our opinion and according to the information and explanations given to us theprocedure of physical verification of stocks followed by the management is reasonable andadequate in relation to the size of the company and nature of its business.

In our opinion and according to the information and explanations given to us theCompany is maintaining proper records of inventory and discrepancies noticed on physicalverification by the Management have been properly adjusted in books of accounts.

(iii) According to the information and explanation given to us the Company has notgranted any loans secured or unsecured to the companies firms limited liabilitypartnerships or other parties covered under register maintained under Section 189 of theCompanies Act 2013.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Companies Act 2013in respect of granting of loans making investments and providing guarantees andsecurities as applicable.

(v) The Company has not accepted any deposits from the public within the meaning ofSection 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of Clause 3(v) of the order are not applicable.

(vi) The Company has maintained books of accounts pursuant to the rules made by thecentral government for the maintenance of cost records under Section 148(1) of thecompanies Act 2013 and in our opinion the prescribed accounts and records have beenproperly made and maintained. We have not however made a detail examination of the same.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including provident fund income taxgoods & service tax sales tax wealth tax service tax duty of customs value addedtax cess and other material statutory dues have been regularly deposited during the yearby the Company with the appropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund income tax goods & service tax sales taxwealth tax service tax duty of customs value added tax cess and other materialstatutory dues were in arrears as at March 31 2021 for a period of more than six monthsfrom the date they became payable.

(b) According to the information and explanations given to us there are no materialdues of duty of customs which have not been deposited with the appropriate authorities onaccount of any dispute. However according to information and explanations given to usthe following dues of income tax sales tax duty of excise service tax and value addedtax have not been deposited by the company on account of disputes:

Name of statute Name of the disputed dues Amount (Rs. in Lacs) Period to which the amount relates Forum where dispute are pending
Income-Tax Act 1961 Income Tax 471.60 2015-16 & 2016-17 CIT (Appeal)
Income-Tax Act 1961 Income Tax 6.58 2009-10 & 2010-11 ITAT Delhi
Income-Tax Act 1961 Income Tax 211.50 2017-18 CIT (Appeal)
The Central Excise Act 1944 Excise duty 607.44 2006-2007 to 2010-2011 CESTAT
The Central Excise Act 1944 Excise duty 829.60 2008-2009 to 2013-14 CESTAT
The Central Excise Act 1944 Excise duty 2.38 2009-2010 Commissioner (Appeal)
The Service Tax under finance Act 1994 Service Tax 8.11 2010-11 Add. Commissioner
The Haryana Vat Act 2003 Sale Tax 17.30 2004-05 to 2005-06 Jt. Commissioner Faridabad
The west Bengal Act 2003 Sale Tax 1260.70 2006-07 to 2012-13 Add-Commissioner Review Board (West Bengal)

(viii) In our opinion and according to the information and explanation given to us bythe management the Company has not defaulted in repayment of loans or borrowings from anyfinancial institutions banks government or debenture holders during the year.

(ix) In our opinion and according to the information and explanation given to us by themanagement the Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans were applied for the purposes forwhich they were raised.

(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the company the company has paid / provided for managerialremuneration and has got requisite approvals mandated by the provisions of Section 197read with Schedule V to the Companies Act 2013.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company. Therefore the provisions of Clause 3(xii) are notapplicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the company transactions with the related parties are incompliance with Sections 177and 188 of the Companies Act 2013 wherever applicable anddetails of such transactions have been disclosed in the Standalone Ind AS FinancialStatements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year under review and hence reporting requirement under clause 3(xiv) are notapplicable to the company and not commented upon.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him and hence provisions of Section192 of the Companies Act 2013 are not applicable.

(xvi) According to the information and explanation given to us the provisions of theSection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.

for BRAN & ASSOCIATES
Chartered Accountants
ICAI Firm Registration No.014544N
CA Ravi Gulati
Partner
Membership No. 090672
UDIN: 21090672AAAABS6659
Place : Faridabad
Date : 28th May 2021

Annexure B To The Independent Auditor's Report

Report on the Internal Financial Controls under Clause (i) of Sub-Section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of ActionConstruction Equipment Limited ("the Company") as of March 31 2021 inconjunction with our audit of the Standalone Ind AS Financial Statements of the Companyfor 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 company's policies the safeguarding ofits assets the 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.

Auditors' responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting with reference to these Standalone Ind AS FinancialStatements based on our audit. We conducted our audit in accordance with the Guidance Noteon Audit of Internal Financial Controls Over Financial Reporting (the "GuidanceNote") and the Standards on Auditing specified under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controlsissued by the Institute of Chartered Accountants of India. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting with reference to theseStandalone Financial Statements and their operating effectiveness. Our audit of internalfinancial controls over financial reporting included obtaining an understanding ofinternal financial controls over financial reporting assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial 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 Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Company's internal financial control over financial reporting with reference to theseStandalone Financial Statements is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financialstatements for external purposes in accordance with generally accepted accountingprinciples. A company's internal financial control over financial reporting includes thosepolicies and procedures that;

(1) Pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of Standalone Ind AS Financial Statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the Company arebeing made only in accordance with authorizations of management and directors of thecompany; and

(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the Company's assets that could have amaterial effect on the financial statements.

Inherent 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 knowledge and according to the explanations given tous the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting with respect to these Standalone Financial Statements were operating effectivelyas at March 31 2021 based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India.

for BRAN & ASSOCIATES
Chartered Accountants
ICAI Firm Registration No.014544N
CA Ravi Gulati
partner
Membership No. 090672
Place : Faridabad UDIN: 21090672AAAABS6659
Date : 28th May 2021

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