To the Members of Action Construction Equipment Limited
Report on the Ind AS Standalone Financial Statements
We have audited the accompanying standalone Ind AS financial statements of ActionConstruction Equipment Limited (Rs. the Company') which comprise the balance sheet as atMarch 31 2018 the statement of profit and loss(including other comprehensive income)the cash flow statement and the statement of changes in Equity for the year then endedand a summary of significant accounting policies and other explanatory information.
Management's Responsibility for the Ind AS Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of these standalone Ind AS financial statements that give a true and fairview of the financial position financial performance including other comprehensiveincome cash flows and changes in equity of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards (Ind AS)prescribed under Section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended. This responsibility also includes maintenance ofadequate account! ng records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and esti mates that are reasonable and prudent; and design implementati on 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.
Our responsibility is to express an opinion on these Ind AS standalone financialstatements based on our audit. We have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluati ng the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the Ind AS Standalonefinancial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone Ind AS financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matter described in Other Mattersparagraph the aforesaid Ind AS Standalone financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at March 31 2018 and its profit total comprehensive income its cash flowsand the changes in equity for the year ended on that date.
The financial information of the company for the year ended March 31 2017 and thetransition date opening balance sheet as at April 1 2016 included in these Ind ASFinancial Statements are based on the previously statutory financial statements for theyear ended March 31 2017 and March 2016 prepared in accordance with the audited by thepredecessor auditors on which they had expressed an unmodified opinion dated May 19 2017and May 19 2016 respectively. The adjustments to those financial statements for thedifferences in account! ng principles adopted by the company on transition to the Ind AShave been audited by us.
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 matters specified in the
paragraph 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 explanati ons 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 other comprehensiveincome the cash flow statement and statement of changes in equity dealt with by thisReport are in agreement with the books of accounts;
d. In our opinion the aforesaid standalone financial Ind AS statements comply with theIndian Accounting Standards specified under Section 133 of the Act;
e. On the basis of the written representations received from the directors as on March31 2018 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2018 from being appointed as a director in terms of Section 164 (2) of theAct; and
f. 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 B": and
g. 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 in our opinionand to the best of our information and according to the explanations given to us;
(a) The company has disclosed the impact of pending litigations on its financialposition in its Ind AS financial statements - Refer Additional Notes to the financialstatements point no 34;
(b) 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;
(c) There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.
For BRAN & Associates Chartered Accountants FRN:014544N
CA Ravi Gulati Partner M.NO 090672
Place: Faridabad Date: May 21 2018
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 2018we report that:
(i) (a) The Company has maintained proper records showing full
particulars including quantitative 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 informati on and explanati ons 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.
(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 noti ced on physicalverification by the Management have been properly adjusted in books of accounts.
(iii) The Company has granted loan to subsidiary company FRESTED LIMITED worth '1651.42 Lakhs.
(a) The earlier loan granted to the subsidiary is reschedule as per the terms ofsupplementary loan agreement dated September 23 2014 in which interest has been waivedoff on such loan by the company.
(b) The terms of repayment of the loan has been reschedule to be repaid by March 312019.
(c) There is no overdue amount outstanding at the yearend as per the supplementary loanagreement date September 23 2014.
(iv) In our opinion and according to the information and explanations given to us theCompany has not provided any loans investments guarantees and security with respect to
provisions of Section 185 and 186 of the Act.
(v) The Company has not accepted any deposits from the public.
(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 of the CompaniesAct 2013 and in our the opinion the prescribed accounts and records have been properlymaintained.
(vii) (a) According to the information and explanations given to
us and on the basis of our examination of the records of the Company amounts deducted/accrued in the books of account in respect of undisputed statutory dues includingprovident fund income tax goods & service tax sales tax wealth tax service taxduty of customs value added tax cess and other material statutory dues have beenregularly deposited during the year by the Company with the appropriate authorities. Asexplained to us the Company did not have any dues on account of employees' stateinsurance and duty of excise.
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 2018 for a period of more than six monthsfrom the date they became payable.
According to the informal! on and explanati ons given to us there are no material duesof duty of customs which have not been deposited with the appropriate authorities onaccount of any dispute. However according to informal! on and explanati ons 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 ||230.37 ||2015-16 ||CIT (Appeal) - Gurgaon. |
|Income-Tax Act 1961 ||Income Tax ||6.58 ||2009-10 & 2010-11 ||ITAT Delhi |
|The Central Excise Act 1944 ||Excise duty ||5.37 ||2009-2010 ||CESTAT |
|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/ Service tax under Finance Act 1994 ||Excise duty ||2.11 ||2012-13 ||Assistant Commissioner |
|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 |
|Custom Act 1962 ||SAD Refund ||3.81 ||2010-2011 ||CESTAT |
|The Haryana Vat Act 2003 ||Sale Tax ||17.30 ||2004-05 to 2005-06 ||Jt. Commissioner Faridabad |
|The West Bengal Act 2003 ||Sale tax ||13.00 ||2011-12 ||High Court |
|The West Bengal Act 2003 ||Sale tax ||1260.70 ||2006-07 to 2012-13 ||Add-Commissioner Review Board (West Bengal) |
(viii) The Company has not defaulted in repayment of loans or borrowings from anyfinancial institutions banks government or debenture holders during the year.
(ix) 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 Act .
(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company.
(xiii) According to the informati on and explanati ons given to us and based on ourexamination of the records of the company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable
and details of such transactions have been disclosed in the financial statements asrequired 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.
(xv) According to the informati on and explanati ons 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.
(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India act 1934.
For BRAN & Associates Chartered Accountants FRN:014544N
CA Ravi Gulati Partner M.NO:090672
Date: May 21 2018
Report on the Internal Financial Controls under Clause (i) of Subsection 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 2018 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 Company's management is responsible for establishing and maintaining internalfinancial controls 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. These responsibility es includethe design implementati on and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporti ng based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls issued by the Institute ofChartered Accountants of India. Those Standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporti ng and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reporti ngassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment 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 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 is a process designedto provide reasonable assurance regarding the reliability of financial reporti ng 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 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 financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detecti on ofunauthorized acquisiti on 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 evaluati on 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.
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 were operating effectively as at March 31 2018 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 BRAN & Associates Chartered Accountants
FRN:014544N (CA Ravi Gulati)
(Partner) M. No. : - 090672
Date: May 21 2018