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Action Construction Equipment Ltd.

BSE: 532762 Sector: Engineering
NSE: ACE ISIN Code: INE731H01025
BSE 00:00 | 07 May 141.65 0.65
(0.46%)
OPEN

141.00

HIGH

144.00

LOW

141.00

NSE 00:00 | 07 May 141.75 0.85
(0.60%)
OPEN

142.50

HIGH

143.95

LOW

141.00

OPEN 141.00
PREVIOUS CLOSE 141.00
VOLUME 23048
52-Week high 175.95
52-Week low 41.25
P/E 29.21
Mkt Cap.(Rs cr) 1,608
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 141.00
CLOSE 141.00
VOLUME 23048
52-Week high 175.95
52-Week low 41.25
P/E 29.21
Mkt Cap.(Rs cr) 1,608
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

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 Standalone Financial Statements of Action Construction EquipmentLimited which comprise the Balance Sheet as at 31st March 2019 and thestatement of Profit and Loss (including other comprehensive income) statement of changesin equity and statement of Cash Flows for the year then ended and notes to the financialstatements including a summary of significant accounting policies and other explanatoryinformation.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2019 and its profit (including other comprehensiveincome) changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the Standalone Financial Statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Companies Act 2013.Our responsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India together with the ethical requirements that are relevantto our audit of the financial statements under the provisions of the Companies Act 2013and the Rules there under and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our opinionon the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we 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 IND AS financial statements section of ourreport 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 Ind As financial statements. The results of our auditprocedures including the procedures performed to address the matters below provide thebasis for our audit opinion on the accompanying Ind As financial statements.

Key Audit Matters How our audit addressed the key audit matters
Adoption of IND AS 115-Revnue from Contracts with Customers as described in note 1.3(a) of the financial statements .
As a part of our audit procedures our procedures included the following:-
The company has adopted the IND AS 115-Revenue from contracts with customers mandatory for reporting periods beginning on or after 1st April 2018. We have read the accounting policy for revenue recognition and assessed the compliance of the policy in terms of the principal enunciated under IND AS 115.
Application of IND AS 115 including selection of transition method involves significant judgement in determining when control of goods or services underlying the performance obligation is transferred to the customer and transition method to be applied.
We obtained and understood the revenue recognition process including determining the point of transfer of control and completion of performance obligation.
As the revenue recognition due to the significance of the balance to the financial statements as a whole we regard this as a key audit matter.
We performed the test of details on a sample basis and examined the underlying customer contracts.
We examined the disclosure made by management in compliance with the requirements with IND AS 115.
Conclusion
Our procedures did not find any material exceptions.

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 Financial Statements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other information asmateriality inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.

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

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 Companies Act 2013 ("theAct") with respect to the preparation of these Standalone Financial Statements thatgive a true and fair view of the financial position financial performance changes inequity and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the accounting Standards specified under section133 of the Act. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the financial statements the Board of Directors is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessthe Board of Directors either intends to liquidate the Company or to cease operations orhas no realistic alternative but to do so.

Those Board of Directors are 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 inaccordance with SAs we exercise professional judgment and maintain professionalskepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement 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 error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act 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 disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the Standalone IndAS financial statements including the disclosures and whether the Standalone Ind ASfinancial statements represent 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 control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with 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 2019 and are therefore the key auditmatters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter 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.

Other Matter

• During the year the preference shareholders have forgone their right to receivethe dividend on 8% Cumulative Non- Participating Redeemable Preference Shares of Rs10/-each amounting to Rs 12048415/- refer to note 37.

• The unaudited financial statements and other unaudited financial information ofthe merged company (M/s Frested Limited) included in the aforesaid standalone Ind ASfinancial statements has been provided by the management and relied upon by us for thepurpose of the company standalone Ind As financial statements (refer to note 36).

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 Companies Act 2013 we give in the Annexure-A a statement on the matters specifiedin 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 the Statement of Changes inEquity and the Cash Flow Statement dealt with by this Report are in agreement with thebooks of account;

(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act;

(e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in termsof Section 164

(2) of the Act;

(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". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the company's internal financial controls overfinancial reporting;

(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.

i. The Company has disclosed the impact of pending litigations on its financialposition in its 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
Firm's Registration No.014544N
CA Ravi Gulati
Place : New Delhi Partner
Date : 16th May 2019 Membership No.090672

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 2019we 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.

(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) The Company has not granted any loans secured or unsecured to the companiesfirms limited liability partnerships or other parties covered under register maintainedunder section 189 of the Companies Act2013.

(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.

(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 ofour examination of the records of the

Company amounts deducted/ accrued in the books of account in respect of undisputedstatutory dues including provident fund income tax goods & service tax sales taxwealth tax service tax duty of customs value added tax cess and other materialstatutory dues have been regularly deposited during the year by the Company with theappropriate authorities. As explained to us the Company did not have any dues on accountof employees' state insurance 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 2019 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
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 1.44 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
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 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 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting 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 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 them and hence provisions of section192 of the Companies Act2013 are not applicable.

(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
Firm's Registration No. 014544N
CA Ravi Gulati
Partner
Membership No. 090672
Place : New Delhi
Date : 16th May 2019

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 2019 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 based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable 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 reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists 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 reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that

(1) Pertain to the maintenance 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 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 were operating effectively as at March 31 2019 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For BRAN & ASSOCIATES
Chartered Accountants
Firm's Registration No. 014544N
CA Ravi Gulati
Partner
Membership No. 090672
Place : New Delhi
Date : 16th May 2019

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