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Directors Report of Action Construction Equipment Ltd.

Mar 31, 2016

The Directors are pleased to present the 22nd Annual report and Audited Statement of Accounts for the financial year ended 31st March, 2016.

(Rs. in lacs)

FINANCIAL RESULTS

2015-16

2014-15

Gross Turnover

65,005

61,681

Excise Duty

3,616

2,885

Net Turnover

61,389

58,796

Operating and Other Income

3,288

2,089

Total Income

64,677

60,885

Profit before Depreciation, Interest and Tax

4043

3,215

Less:

Depreciation

1135

957

Interest

1401

1,301

Provision for Taxation

626

282

Net Profit after Tax

881

675

Profit brought forward

4,894

4657

Balance of Amalgamating Company

918

-

Profit available for Appropriation

6,693

5,332

Appropriations:

Dividend

209

198

Corporate Tax on Dividend

43

40

Amount transferred to General Reserve

200

200

Profit carried to Balance Sheet

6,241

4,894

FINANCIAL PERFORMANCE

During the financial year under review, on a standalone basis, Your Company''s achieved gross turnover of Rs. 65,005 lacs as compared to Rs. 61,681 lacs in the previous year, thereby registering a growth of 5.39 %. The profit before depreciation, interest and tax stood at Rs 4043 lacs in the year 2015-16, as against Rs. 3,215 lacs in the year 2014-15, representing a growth of 25.75%.

The profit after tax is Rs. 881 lacs in the year 2015-16 as against Rs, 675 lacs in the previous year i.e. an increase of 30.51 %.

The Company could achieve such a growth and performance due to tighter operating controls, prudent raw material sourcing, new customer addition and controlled overheads.

Your company has taken several steps to reduce cost and increase its market share in all products.

STATE OF COMPANY’S AFFAIRS

The financial year 2015-16 embarked upon visible improvement in operating margins due to focused cost efficiency measures, price discipline and low commodity prices.

During the year, we launched new products like skid loaders, wheel based harvesters and introduced smart features in our existing product range that not only helped us to increase our market share but also adhere to our core philosophy of providing customized solutions to our customers. ACE realigned its focus on domestic markets and growth. ACE sustained its investment in brand and manpower to prepare for next growth phase. The Company continues to invest in future technology, products and people. The Company is ready for next phase of growth.

We were awarded best seller in mobile cranes category by Equipment India at 3rd Equipment Award, 2016.

RESERVES

Your Company proposes to carry Rs 200 lacs to the general reserve and retain Rs. 880.89 lacs in the profit and loss account.

DIVIDEND

At the meeting of Board of Directors held on 15th March, 2016, the Directors approved the payment of Interim Dividend of 10 % on the equity share capital for FY 2015-16, resulting in an outflow of Rs 237.44 lacs (Including Corporate Dividend Tax of Rs. 39.56 lacs). Since the Company has paid interim dividend to the equity shareholders for the financial year 2015-16 and in order to conserve the resources of the Company and to build up reserves, the Directors has not recommended any final dividend on Equity Shares Capital of the Company.

Directors have recommended dividend of 8% on Preference Share Capital of the Company on the pro data basis from the allotment date till March 31, 2016, which will result in an outflow of Rs. 14.24 lacs (including Corporate Dividend Tax of Rs. 3.01 Lacs).

The payment of dividend is subject to the approval of the shareholders at the ensuing annual general meeting of the Company.

MATERIAL CHANGES AND COMMITMENTS, IF ANY

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statement relate and the date of this report.

ISSUE OF SECURTIES

In pursuance of the Scheme of amalgamation ("the Scheme") sanctioned by the Hon''ble High Court of Punjab and Haryana vide its order dated 17th Nov, 2015,1,83,83,000 equity shares and 3,02,19,380 preference shares of the Company were issued on 15th March, 2016 to the shareholders of ACE TC Rentals Private Limited in ratio of 1168 fully paid up equity shares of Rs. 2/- each of the ACE for every 100 fully paid up equity shares of Rs.10/- each of ACE TC Rentals Private Limited (the Transferor Company) held by the Members whose names appear in the Register of Members of the transferor company such that the equity shareholding of the Members in the ACE is increased only up to five percent of the post issue paid-up equity share capital of the ACE. As a result of this, the issued, subscribed and paid up share capital of the Company has increased from Rs. 1978.80 lacs in FY 2014-15 to Rs. 5368.40 lacs in FY 2015-16. The Authorized share capital of the Company has also increased from Rs. 2450.00 lacs in FY2014-15 to Rs. 5525.00 lacs in FY 2015-16.

The entire business, assets, liabilities, duties and obligations of ACE TC Rentals Pvt. Limited were transferred to and vested in the Company with effect from the appointed date i.e. April 1, 2014.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

Your Company has a Wholly Owned Subsidiary and a Fellow Subsidiary, at the end of the current financial year ended on 31 st March, 2016, namely:

1. Forested Limited, Cyprus- Wholly Owned Subsidiary

2. SC Forma SA, Romania - Fellow Subsidiary

There has been no material change in the nature of the business of the subsidiaries.

In accordance with section 129(3) of the Companies Act, 2013 and Accounting Standard (AS)-21 on Consolidated Financial Statements, the Company has prepared consolidated financial statements of the Company and all its subsidiaries, which form part of this Annual Report.

A report on the performance and financial performance of the Subsidiary and associate Companies as per Companies Act, 2013 is provided in the prescribed form AOC -1 as Annexure-I to this report.

The Policy for determining material subsidiaries may be accessed on the Company''s website viz www.ace-cranes.com.

BOARD OF DIRECTORS

Pursuant to the provisions of section 149 of the Companies Act, 2013, Mr. Girish Narain Mehra (DIN: 00059311), Mr. Subhash Chander Verma (Din: 00098019), Mr. Keshav Chander Agrawal (Din: 00098143) and Dr. Amar Singal (Din: 00035903) were appointed as independent directors at annual general meeting of the Company held on September 25,2015.

The Independent Directors of the Company have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act and there has been no change in the circumstances which may affect their status as independent director during the year.

In accordance with Article 88(1) of the Articles of Association of the Company, Mrs. Surbhi Garg retires by rotation in ensuing Annual General Meeting and being eligible offer herself for re-appointment at the forthcoming AGM.

During the year, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees for the purpose of attending meetings of the Company.

None of the Directors of your Company is disqualified as per provisions of the Companies Act, 2013.

ATTRIBUTES, QUALIFICATIONS, INDEPENDENCE AND REMUNERATION OF DIRECTORS AND THEIR APPOINTMENT

The criteria for determining qualifications, positive attributes and independence in terms of Act and the Rules there under, both in respect of independent and the other Directors as applicable has been approved by the Nomination and Remuneration Committee. The Board is well diversified and have balance of skills, experience and diversity of perspectives appropriates to the Company.

Directors are appointed / re-appointed with the approval of the Members for a period of three to five years or a shorter duration. All directors, other than independent directors and Managing Director, are liable to retire by rotation, unless approved by the members. One-third of the Directors who are liable to retire by rotation, retire every year and are eligible for re-election.

The Company''s policy relating to remuneration of Directors, key managerial personnel and other employee is displayed on the website of the Company at www.ace-cranes.com and is provided as Annexure -II to this Report.

KEY MANAGERIAL PERSONNELS

Pursuant to the Provisions of Section 203 of the Companies Act, 2013, Mr. Vijay Agarwal, Chairman & Managing Director, Mrs. Mona Agrawal , Mr. Sorab Agarwal & Mrs. Surbhi Garg, WholeTime Director, Mr. Rajan Luthra, CFO and Mrs. Yashika Kansal, Company Secretary are designated as Key Managerial Personnel of the Company.

Further, Mr. R.S. Jhanwer, Head - Corporate Affairs & Company Secretary resigned w.e.f. 11th January, 2016 and Mrs. Yashika has been appointed as Company Secretary 8< Compliance Officer w.e.f. 06th February, 2016.

COMMITTEES OF THE BOARD

Detailed information on the Board and its Committees is provided in the Report on Corporate Governance forming part of this Annual Report.

NUMBER OF MEETINGS

Five meetings of the Board were held during the year. For details of the meetings of the board, please refer to the Corporate Governance report which forms part of this report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134 of the Companies Act, 2013, your Directors hereby confirm that they:

i) Have followed in the preparation of Annual Accounts for the financial year 2015-16, the applicable Accounting Standards and no material departures have been made for the same;

ii) Had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 st March, 2016 and of the profit of the Company for the year ended on that date;

iii) Had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) Had prepared the annual accounts on a going concern basis;

v) The directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

vi) The directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis for the year as stipulated under Schedule V of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is separately given and forms part of this Annual Report and provides a more detailed analysis on the performance of individual businesses and their outlook.

REPORT ON CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the corporate governance requirements set out by SEBI. The report on Corporate Governance as stipulated under Part C of Schedule V of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 from a Practicing Company Secretary confirming compliance of the conditions of corporate governance is attached to the Report on Corporate Governance.

RELATED PARTY TRANSACTIONS

All contracts or arrangements or transactions that were entered into by the Company during the financial year with related parties were on arm''s length basis and in the ordinary course of business. During the year, the Company had not entered into any contracts or arrangements or transactions with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transaction. All Related Party Transactions have been approved by the Audit Committee.

The policy on Related Party Transactions as adopted by the Board is available on website of the Company viz www.ace-cranes.com.

Further, the prescribed details of related party transactions of the Company in Form No. AOC-2, in terms of section 134 of the Act read with Rule 8 of the Company (Accounts) Rules, 2014 is given as Annexure -III to this report.

CORPORATE SOCIAL RESPONSIBILITY

ACE has been an early adopter of Corporate Social Responsibility (CSR) initiatives. The Company works primarily through its trust namely ACE Emergency Response Services.

The CSR Committee of the Board of Directors has been formed comprising of three directors with Chairman being independent Director. CSR Committee has framed and formulated a CSR Policy indicating the activities to be undertaken by the Company, in accordance with schedule VII of the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014 issued under the Act. The same has also been approved by the Board. The CSR policy is available at the website of the Company viz www.ace-cranes.com. The Companies are required to spend at least 2 % of the average net profits of their three immediately preceding financial years on CSR related activities. Accordingly, the Company was required to spend Rs. 21.78 lacs on CSR activities whereas the Company has spent Rs. 156.72 Lacs on CSR activities which is more than the mandatory requirement. The Annual Report on CSR Activities, as stipulated under the Act forms an integral part of this Report and is appended as Annexure-IV

RISK MANAGEMENT

The Company has implemented a comprehensive and fully integrated ''Enterprise Risk Management'' framework in order to anticipate, identify, measure, manage, mitigate, monitor and report the principal risks and uncertainties that can impact its ability to achieve its strategic business objectives.

This integration is enabled by alignment of Risk Management, Internal Audit, Legal and compliance methodologies and processes in order to maximize enterprise value of the

Company and ensure high value creation for our stakeholder over a period of time.

The details of the Enterprise Risk Management framework with details of the principal risks and the plans to mitigate the same are given in the ''Risk Management Report’ section of the ''Management Discussion and Analysis Report'' which forms part of this Annual Report.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to financial statements. Such controls were tested during the financial year and no material weaknesses in the design or operation were observed. Review of the financial controls is done on an ongoing basis.

WHISTLE BLOWER POLICY/VIGIL MECHANISM

The Company has a Whistle Blower Policy (the "WB Policy") with a view to provide vigil mechanism to Directors, employees and other stakeholders to disclose instances of wrongdoing in the workplace and report instances of unethical behavior, actual or suspected fraud or violation of the Company''s code of conduct or ethics policy. The Policy provides that the Company investigates such incidents, when reported, in an impartial manner and takes appropriate action. The WB Policy also provides mechanism for adequate safeguards against victimization of Director(s)/ Employees who avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases. The Whistle Blower Policy has been posted on the website of the Company and the details of the same are explained in the Report on Corporate Governance forming part of this Annual Report. The Whistle Blower Policy is available at the website of the Company viz, www.ace-cranes.com.

RESEARCH AND DEVELOPMENT

Your Company continues to invest in a comprehensive Research & Development (R&D) programmed to develop a unique source of sustainable competitive advantage and build future readiness by leveraging contemporary advances in several relevant areas of science and technology and blending the same with classical concepts of product development.

The Company has dedicated R&D centres at Jajru Road, Faridabad and at Dudhola Link Road, Dudhola Village, Palwal. Both these centres have accreditations from the Ministry of Science and Technology, Govt, of India. Both the centres continuously carries out Research and developments for developing new products and also focus on the quality of products, making them more economical, cost effective and user friendly.

STATUTORY AUDITORS AND AUDITOR''S REPORT

At the Annual General Meeting held on 31st July, 2014, M/s. Rajan Chhabra & Co., Chartered Accountants, were appointed as the Statutory Auditors of the Company to hold the office till the conclusion of the Annual General Meeting to be held in the Calendar year, 2017.

In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s Rajan Chhabra & Co., Chartered Accountants, as statutory auditors of the Company is placed for ratification by the shareholders. Your Company has received confirmation from the above mentioned firm regarding consent and eligibility under Sections(s) 139 & 141 of the Companies Act, 2013 read with Company (Accounts) Rules, 2014. As required under Regulation 33 (1) (d) of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Auditor has also confirmed that they hold a valid certificate issued by ICAI.

The Auditors'' Report does not contain any qualification, reservation or adverse remarks. The Notes on Financial Statements referred to in the Auditors report are self-explanatory and do not require any further comments.

COST AUDITORS

The Board has appointed M/s Vandana Bansal and Associates, Cost accountant (Firm registration No. 100203) as cost auditors of your Company for financial year 2015-16 to conduct audit of the cost records of the Company. Cost audit report for financial year 2015-16 will be filed with the Ministry of Corpo rate Aff a i rs.

As per section 148 of the Companies Act, 2013 and Rules made there under, the board of director of your Company on the recommendation of the Audit Committee has appointed M/s Vandana Bansal and Associates, Cost Accountant as the Cost Auditor of the Company for the financial year 2016-17.

Your Company has received consent from M/s Vandana Bansal and Associates, Cost Accountant to act as Cost Auditor of your Company for financial year 2016-17 along with the certificate confirming their independence.

SECRETARIAL AUDITOR

Savita Trehan & Associates, Practicing Company Secretary was appointed to conduct the Secretarial Audit of the Company for the financial year 2015-16, as required under Section 204 of the Companies Act, 2013 and Rules made there under. The Secretarial Audit Report is annexed to this Report as Annexure V. There is no qualification, reservation or adverse remark(s) in the Secretarial Audit Report.

DISCLOSURES

PARTICULARS OF THE EMPLOYEES AND RELATED DISCLOSURES:

The total number of permanent employees as on 31 st March, 2016 stood at 1062 employees as compared to 975 as on March 31,2015.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 form part of this Report and are annexed as Annexure VI.

There are no employees who are drawing remuneration in excess of the limits as set out in provisions of Section 197(12) of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

PUBLIC DEPOSITS

During the year, your Company has not accepted any deposits under Section 73 of the Companies Act, 2013 and as such, no amount on account of principal or interest on public deposits was outstanding as on March 31 st, 2016.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are provided in the notes to standalone financial statements.

EMPLOYEES STOCK OPTION SCHEME

During the year under review, the Company has not allotted any shares under Employees Stock Option Scheme (ESOS) and hence no disclosure is required to be made in compliance with Clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Regulations, 1999.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORBTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information pursuant to conservation of energy, technology absorption and foreign exchange earnings and outgo, as required to be disclosed under the Companies Act, 2013 is annexed herewith as Annexure - VII and forms an integral parts of this report.

EXTRACT AS ANNEXURE OF ANNUAL RETURN

Extract of the Annual Return in Form MGT- 9 is annexed herewith as Annexure - VIII and forms an integral part of this report.

FORMAL ANNUAL PERFORMANCE EVALUATION OF THE BOARD AND THAT OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS

Pursuant to the provisions of Companies Act, 2013 and Regulation 25 (3) of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations, 2015 Independent Directors at their separate meeting, without participation of the Non-Independent Directors and Management have considered and evaluated the Board''s performance and performance of the Chairman and Non-independent Directors. The Independent Directors in the said meeting have also assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board.

The Board of Directors has evaluated the performance of each of Independent Directors (without participation of the relevant Director). The Board has carried out the annual evaluation of its own performance and that of its Directors individually. The evaluation criteria as approved by the Nomination and Remuneration Committee included various aspects of the functioning of Board such as composition, process and procedures including adequate and timely information, attendance, decision making, roles and responsibilities etc.

The performance of individual directors including the Chairman was evaluated on various parameters such as industry knowledge & experience, vision, commitment, time devoted etc. The evaluation of Independent Directors was based on aspects like participation & contribution to the Board decisions, knowledge, experience, integrity etc.

OTHER INFORMATION

Your Directors state that no disclosure or reporting is required in respect of the following matters as there were no transactions on these matters in the financial year 2015-16:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. The Managing Director and the Whole-time Directors does not receive any remuneration or commission from any of its subsidiaries.

3. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and the Company''s operations in future.

ACKNOWLEDGEMENTS

The Board places on record its appreciation for the support and continued co-operation extended by all the customers, vendors, dealers, bankers, regulators and business associates. The Board places on record its appreciation to all the employees for their dedicated and committed services. Your Directors deeply acknowledge the continued trust and confidence that the Shareholder place in the management and is confident that with their continued support, the Company will achieve its objectives and emerge stronger in the coming years.

For and on behalf of the Board of Action Construction Equipment Ltd

Vijay Agarwal Chairman & Managing Director

Place: New Delhi Dated: 19th May, 2016


Mar 31, 2015

Dear Members,

The Directors are pleased to present the 21st Annual Report and Audited Statement of Accounts for the financial year ended 31st March, 2015.

(Rs. in lacs)

FINANCIAL RESULTS 2014-15 2013-14

Gross Turnover 61,681 64,252

Excise Duty 2,885 3,364

Net Turnover 58,796 60,888

Operating and Other Income 2,089 1,271

Total Income 60,885 62,159

Profit before Depreciation Interest and Tax 3,215 3,080

Less:

Depreciation 957 1,527

Interest 1,301 1,041

Provision for Taxation 282 109

Net Profit after Tax 675 403

Profit brought forward 4657 4,470

Profit available for Appropriation 5,332 4,873

Appropriations:

Dividend 198 99

Corporate Tax on Dividend 40 17

Amount transferred to General Reserve 200 100

Profit carried to Balance Sheet 4894 4657

FINANCIAL PERFORMANCE

Indian economy witnessed another challenging year with nil/ negative economic growth in the Industries where we operate in the financial year 2014-15. The sluggishness in economy, policy inertia and lacklustre infrastructure projects have all impacted the Indian economy as well as your Company.

Despite these tough conditions. Your Company delivered another year of steady performance.

Your Company's gross turnover stood at Rs. 61,681 lacs in the year 2014-15, as compared to Rs. 64,252 lacs in the year 2013-14. The profit before depreciation, interest and tax stood at Rs. 3,215 lacs in in the year 2014-15, as against Rs. 3,080 lacs in theyear2013-14.

The profit after tax is Rs. 675 lacs in the year 2014-15 as against Rs, 403 lacs in the previous year i.e. an increase of 67.50 %. Your company has taken several steps to reduce cost and increase its market share in all products.

DIVIDEND

Your Directors are pleased to recommend 10% Dividend per Equity share on the Paid up Equity Share Capital of the Company for the year 2014-15. Total dividend (including dividend tax) will absorb Rs. 238 lacs out of the profits available for the year 2014-15. The payment of dividend is subject to the approval of the shareholders at the ensuing Annual General Meeting of the Company.

INCREASE IN SHARE CAPITAL

Your Company has increased the Authorized Share Capital of the Company from Rs. 24,50,00,000/- (Rupees Twenty Four Crore Fifty Lacs) divided into 12,25,00,000 (Twelve Crore Twenty Five Lacs) Equity Shares of Rs. 2/- (Rupees Two) each to Rs. 50,25,00,000/- (Rupees Fifty Crore Twenty Five Lacs Only) on 8th May, 2015 . The increased authorised share capital was restructured to 10,00,00,000 (Ten Crore) Equity Shares of Rs. 2/- (Rupees Two) each and 3,02,50,000 (Three Crore Two Lacs Fifty Thousand) 8% Redeemable Cumulative Preference Shares of Rs. 10/- (Rupees Ten) each to enable the Company to allot shares, once the scheme becomes effective after all approvals, as proposed in the Scheme of Amalgamation between ACE TC Rentals Private Limited and your Company filed with the Hon'ble High Court of Punjab and Haryana.

CORPORATE DEVELOPMENT - MERGER

ACE TC Rentals Private Limited is proposed to be merged with the Company with effect from April 1, 2014 pursuant to a scheme of amalgamation ("the scheme"). The scheme has been filed in the High Court for the States of Punjab and Haryana. Once the Scheme is approved and becomes effective, which is expected to be effective in this financial year, the Company will issue 1,84,90,500 equity shares of Rs 2 each fully paid up and 3,02,19,380 Cumulative Non- Particiapating Redeemable Preference shares of Rs 10 each to the members of ACETC Rentals Private Limited.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

Your Company has a wholly Owned Subsidiary and a Fellow Subsidiary, at the end of the current financial year ended on 31st March, 2015, namely:

1. Frested Limited, Cyprus-wholly Owned Subsidiary

2. SC Forma SA, Romania - FellowSubsidiary

During the year under report, the only wholly Owned Indian Subsidiary Company, "Action Developers Limited" [CIN U45200DL2008PLC177936] has opted for voluntary dissolution under Section 560 (5) of the Companies Act, 1956 under Fast track scheme vide SRN C32950198 dated 15/11/2014 and accordingly the name of "Action Developers Limited" is struck off in the records of Registrar of Companies and the said wholly Owned Indian Subsidiary Company stands dissolved.

The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies. In accordance with section 129(3) of the Companies Act, 2013 and Accounting Standard (AS) - 21 on Consolidated Financial Statements, the Company has prepared consolidated financial statements of the Company and all its subsidiaries, which form part of this Annual Report.

A report on the performance and financial performance of the Subsidary and Associate Companies as per Companies Act, 2013 is provided in the prescribed form AOC -1 alongwith the Consolidated Financial Statements and therefore not repeated here for the sake of brevity. The Policy for determining material subsidiaries may be accessed on the Company's website viz, www.ace-cranes.com

BOARD OF DIRECTORS

The Board consists of eight directors, out of which four are independent directors, namely:

Name of Directors Position in the Company

Mr. Vijay Agarwal Chairman & Managing Director

Mrs. Mona Agarwal Whole-Time Director

Mr.Sorab Agarwal Executive Director

Mrs. Surbhi Garg Executive Director

Mr. Girish Narain Mehra Independent Director

Mr. Subhash ChanderVerma Independent Director

Dr. Amar Singal Independent Director

Maj.Gen. (Retd.)Dr. KeshavChandra Agrawal IndependentDirector

The existing term of appointment of all the Independent Directors as mentioned in above table is upto the date of forthcoming Annual General Meeting (AGM) and are eligible and offer themselves for re-appointment as Independent Directors on the Board.

The Company has received notices alongwith the requisite deposit from the members pursuant to Section 160(1) of the Companies Act, 2013 signifying their intention to propose their candidature for appointment as Director of the Company at the forthcoming AGM.

The Independent Directors of the Company have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

In accordance with Article 88 (1) of the Articles of Association of the Company Mrs. Mona Agarwal is liable to retire by rotation in ensuing Annual General Meeting and being eligible offer herself for re-appointment at the forthcoming AGM.

Your Directors recommend for their re-appointment. None of the Directors of your Company is disqualified as per provisions of the Companies Act, 2013.

KEY MANAGERIAL PERSONNEL:

Pursuant to the Provisions of Section 203 of the Companies Act, 2013, Mr. Vijay Agarwal, Chairman & Managing Director, Mrs. Mona Agarwal, Mr. Sorab Agarwal & Mrs. Surbhi Garg, Whole Time Director Mr. Rajan Luthra, CFO and Mr. Neeraj Jain, Company Secretary were designated as Key Managerial Personnel of the Company.

Subsequently, Mr. Neeraj Jain resigned w.e.f. 4th February 2015 . Mr. Radhey Shyam Jhanwer has been appointed as Head-Corporate Affairs & Company Secretary w.e.f. 5th February, 2015.

COMMITTEES OFTHE BOARD

Detailed information on the Board and its Committees is provided in the Report on Corporate Governance forming part of this Annual Report.

Board and Audit Committee Meetings Audit Committee

As at March 31, 2015, the Audit Committee comprised of three Independent Directors namely, Mr Subhash Chander Verma, Dr. Amar Singal & Mr Girish Narain Mehra and one Non-Independent Director namely, Mr Vijay Agarwal. All the recommendations made by the Audit Committee were accepted by the Board.

Nomination and Remuneration Committee

As at March 31, 2015, the Nomination and Remuneration Committee comprised of three Independent Directors namely. Dr Amar Singal, Mr. Girish Narain Mehra and Mr Subhash Chander Verma.

Corporate Socal Responsibility Committee (CSR Committee)

As at March 31, 2015, CSR Committee comprised of two Independent Directors namely. Dr Amar Singal & Maj. Gen. (Retd.) Dr KeshavChandra Agrawal and one Non-Independent Director namely, Mrs. Mona Agarwal.

Stakeholders Relationship Committee

As at March 31, 2015, Stakeholders Relationship Committee comprised of two Independent Directors namely. Dr Amar Singal & Mr. Subhash Chander Verma and one Non- Independent Director namely, Mr. Sorab Agarwal.

NUMBEROFMEETINGS

During the year ended 31st March, 2015, five meetings of the Board were held.

During the year ended 31st March, 2015, five meetings of the Audit Committee were held.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134 of the Companies Act, 2013, your Directors hereby confirm that they:

I) have followed in the preparation of Annual Accounts for the financial year 2014-15, the applicable Accounting Standards and no material departures have been made forthe same;.

II) had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2015 and of the profit of the Company for the year ended on that date;

III) had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

IV) had prepared the annual accounts on a going concern basis.

V) The directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and.

VI) The directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis for the year as stipulated under Clause 49 of the Listing Agreement is separately given and forms part of this Annual Report provides a more detailed analysis on the performance of individual businesses and their outlook.

REPORT ON CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the corporate governance requirements set out by SEBI. The report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement is separately given and forms part of this Annual Report. The requisite certificate from a Practicing Company Secretary confirming compliance of the conditions of Corporate Governance is attached to the Report on Corporate Governance.

RELATED PARTY TRANSACTIONS

All the contracts/ arrangements/ transactions that were entered into by the Company during the financial year with related parties were on an arm's length basis and in the ordinary course of business. During the year, the Company had not entered into any contract/ arrangement/ transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transaction. All Related Party Transactions are placed before the Audit Committee for approval.

The policy on Related Party Transactions as approved by the Board is available on website of the Company viz, www.ace-cranes.com

Details of Related Party Transactions are given at Note No. 27((B)(8)(e)to the Standalone Financial Statements. None of the Directors of the Company has any pecuniary relationships or transactions vis-a-vis the Company.

CORPORATE SOCIAL RESPONSIBILITY

The CSR Committee has framed and formulated a CSR Policy indicating the activities to be undertaken by the Company, in accordance with schedule VII of the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014 issued under the Act. The same has also been approved by the Board. The CSR policy is available at the website of the Company viz, www.ace-cranes.com. The Annual Report on CSR Activities, as stipulated under the Act and the Listing Agreement forms an integral part of this Report and is appended as Annexure-I

RISK MANAGEMENT

The Company has implemented a comprehensive and fully integrated 'Enterprise Risk Management' framework in order to anticipate, identify, measure, manage, mitigate, monitor and report the principal risks and uncertainties that can impact its ability to achieve its strategic business objectives.

The Company has introduced several improvements to Enterprise Risk Management and processes to drive a common integrated view of risks and optimal risk mitigation responses.

This integration is enabled by alignment of Risk Management, Internal Audit, Legal and compliance methodologies and processes in order to maximise enterprise value of the Company and ensure high value creation for our stakeholders overa period of time.

The details of the Enterprise Risk Management framework with details of the principal risks and the plans to mitigate the same are given in the 'Risk Management Report' section of the 'Management Discussion and Analysis Report' which forms part ofthisAnnual Report.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to financial statements. Such controls were tested during the financial year and no material weaknesses in the design or operation were observed. Review of the financial controls is done on an ongoing basis.

POLICIES

WHISTLE BLOWER POLICY/VIGIL MECHANISM

The Company has a Whistle Blower Policy (the "WB Policy") with a view to provide vigil mechanism to Directors, employees and other stakeholders to disclose instances of wrongdoing in the workplace and report instances of unethical behavior, actual or suspected fraud or violation of the Company's code of conduct or ethics policy. The Policy provides that the Company investigates such incidents, when reported, in an impartial manner and takes appropriate action. The WB Policy also provides mechanism for adequate safeguards against victimization of Director(s)/ Employees who avail of the mechanism and also provide for direct access

to the Chairman of the Audit Committee in exceptional cases. The Whistle Blower Policy has been posted on the website of the Company and the details of the same are explained in the Report on Corporate Governance forming part of this Annual Report. The Whistle Blower Policy is available at the website of the Company viz, www.ace-cranes.com

PREVENTION OF SEXUAL HARRASSMENT POLICY

The Company has a Prevention of Sexual Harassment Policy in force in terms of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The objective of this Policy is to ensure a safe, secure and congenial work environment where employees will deliver their best without any inhibition, threat or fear. The Company has Zero tolerance to any form of harassment especially if it is sexual in nature.

No Complaints were received during the year.

REMUNERATION POLICY

The Board, on the recommendation of the Nomination & Remuneration Committee framed a Remuneration Policy for Non-Executive Directors (including Independent Directors) and a Remuneration Policy for Key Managerial Personnel and Other Employees of the Company. The Remuneration Policy for Non-Executive Directors, Key Managerial Personnel and Other employees of the Company is provided as Annexure-ll to this Report.

RESEARCH AND DEVELOPMENT

Your Company continues to invest in a comprehensive Research & Development (R&D) programme to develop a unique source of sustainable competitive advantage and build future readiness by leveraging contemporary advances in several relevant areas of science and technology and blending the same with classical concepts of product development.

The Company has dedicated R&D centres at Jajru Road, Faridabad and at Dudhola Link Road, Dudhola Village, Palwal. Both these centres have accreditations from the Ministry of Science and Technology, Govt, of India. Both the centres continuously carries out Research and Developments for developing new products and also focus on the quality of products, making them more economical, cost effective and userfriendly.

AUDITORS AND AUDITORS' REPORT

M/s. Rajan Chhabra & Co., Chartered Accountants, were appointed as the Statutory Auditors of the Company at 20th Annual General Meeting of the Company to hold the office for the three consecutive years subject to ratification at every Annual General Meeting. Your Company has received confirmation from the above mentioned firm regarding consent and eligibility under section(s) 139 & 141 of the Company Act, 2013, read with Company (Accounts) Rules, 2014 for ratification of appointment as the Statuary Auditors of the Company. As required under clause 41 of the listing agreement, the auditor has also confirmed that they hold a valid certificate issued by the Institute of Chartered Accountants of India.

The Audit Committee and the Board of Directors recommended the ratifications of the appointment of the M/s. Rajan Chhabra & Co., Chartered Accountants, as the Auditor of your Company for financial year2015-16 till the conclusion of next AGM, at a remuneration to be decided by the Audit Committee of the Board of Directors.

The Notes on Financial Statements referred to in the Auditors' Report are self-explanatory and do not require any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark.

COST AUDITORS

The Central Government has made it mandatory for the Company to conduct a cost audit and accordingly, your Directors have appointed M/s Vandana Bansal & Associates, Cost Accountants as the Cost Auditors to conduct the Cost Auditfortheyear2015-16.

SECRETARIAL AUDITOR

The Board has appointed M/s. MZ & Associates, Company Secretaries to conduct the Secretarial Audit of the Company for the financial year 2014-15. The Secretarial Audit Report is annexed to this Report as Annexure III. There is no qualification, reservation or adverse remark(s) in the Secretarial Audit Report.

DISCLOSURES:

EMPLOYEES

The total number of permanent employees as on 31st March, 2015 stood at 975 as compared to 906 as on March 31,2014.

PARTICULARS OF THE EMPLOYEES AND RELATED DISCLOSURES:

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 form part of this Report and are annexed as Annexure IV.

There are no employees who are drawing remuneration in excess of the limits as set out in provisions of Section 197(12) of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

PUBLIC DEPOSITS

During the year, your Company has not accepted any deposits under Section 73 of the Companies Act, 2013 (herein after referred to as the "Act") and as such, no amount on account of principal or interest on public deposits was outstanding as of March 31,2015.

PARTICULARS OF LOANS, INVESTMENTS, GUARANTEES AND SECURITIES

Details of loans, investments, guarantees and securities provided as covered under the provisions of Section 186 of the Companies Act, 2013 are provided in the notes to the standalone financial statements.

EMPLOYEES STOCK OPTION SCHEME

During the year under review, the Company has not allotted any shares under Employee Stock Option Scheme (ESOS) and hence no disclosure is required to be made in compliance with Clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Regulations, 1999.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORBTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information pursuant to conservation of energy, technology absorption and foreign exchange earnings and outgo, as required to be disclosed under the Companies Act, 2013 is annexed as Annexure-V and forms part of this report.

EXTRACT OF ANNUAL RETURN

Extract of the Annual Return in Form MGT- 9 is annexed herewith as Annexure-VI and forms part of this report.

THE FAMILIARISATION PROGRAMMES FOR INDEPENDENT DIRECTORS

The Company has put in place a system to familiarise its Independent Directors with the Company, their roles, rights & responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc. The details of such familiarisation programmes are put up on the website of the Company viz, www.ace-cranes.com

FORMAL ANNUAL PERFORMANCE EVALUATION OF THE BOARD AND THAT OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS

Pursuant to the provisions of Companies Act, 2013 and Clause 49 of the Listing Agreement, Independent Directors at their separate meeting, without participation of the Non- independent Directors and Management have considered and evaluated the Board's performance and performance of the Chairman and Non-independent Directors. The Independent Directors in the said meeting have also assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board.

The Board of Directors has evaluated the performance of each of Independent Directors (without participation of the relevant Director). The Board has carried out the annual evaluation of its own performance and that of its Directors individually. The evaluation criteria as approved by the Nomination and Remuneration Committee included various aspects of the functioning of Board such as composition, process and procedures including adequate and timely information, attendance, decision making, roles and responsibilities etc.

The performance of individual directors including the Chairman was evaluated on various parameters such as industry knowledge & experience, vision, commitment, time devoted etc. The evaluation of Independent Directors was based on aspects like participation & contribution to the Board decisions, knowledge, experience, integrity etc.

General

Your Directors state that no disclosure or reporting in respect of the following matters are made in the Directors' Report as there were no transactions on thesemattersinthefinancial year 2014-15.

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. The Managing Director and the Whole-time Directors does not receive any remuneration or commission from any of its subsidiaries.

3. No significant or material orders were passed by the regulators or courts or tribunals which impact the going concern status and the company's operations in future.

ACKNOWLEDGEMENTS

The Directors wish to place on record their sincere appreciation for the support and co-operation extended by all the customers, vendors. Dealers and business associates. The Company also expresses its gratitude to the Government authorities and the Company's Bankers for all the help and encouragement, they extend to the Company. The Board places on record its appreciation to all the employees for their dedicated and committed services. Your Directors deeply acknowledge the continued trust and confidence that the Shareholder place in the management and is confident that with their continued support, the Company will achieve its objectives and emerge stronger in the coming years.

For and on behalf of the Board of Action Construction Equipment Limited

Vijay Agarwal Chairman & Managing Director

Place: New Delhi Dated: 30th May, 2015


Mar 31, 2013

The Directors are pleased to present the 19th Annual report and Audited Statement of Accounts for the financial year ended 31 st March, 2013.

(Rs. in lacs)

FINANCIAL RESULTS 2012-13 2011-12

Gross Turnover 69,280 87,868

Excise Duty 3,172 3,110

Net Turnover 66,108 84,758

Other Income 1,215 1,248

Total Income 67,323 86,006

Profit before Depreciation Interest and Tax 3,510 5,703

Less:

Depreciation 1,361 1133

Interest 1,045 735

Provision for Taxation 382 988

Net Profit after Tax 722 2,847

Profit brought forward 4,180 2,563

Profit available for Appropriations 4,902 5,410

Appropriations:

Dividend 198 198

Corporate Tax on Dividend 34 32

Transferred to General Reserve 200 1,000

Profit carried to Balance Sheet 4,470 4,180

FINANCIAL HIGHLIGHTS

FY 2012-13 proved to be a challenging year amidst global economic uncertainties and disturbances in many parts of the world. As far as Indian Economy is concerned. Weakness in industry (comprising the mining and quarrying, manufacturing, electricity, gas and water supply, and construction sectors registered a growth rate of only 3.5 per cent and 3.1 per cent in 2011-12 and 2012-13 respectively. The rate of growth of the manufacturing sector was even lower at 2.7 per cent and 1.9 per cent for these two years respectively. The growth of equipment manufacturing industry is interlinked with the growth of Infrastructure and indirectly with the growth of Indian Economy. According to the ministry''s estimate, Rs. 7 lakh crores of projects are stalled at various stages due to reasons such as environment clearances and land acquisition issues. Despite these constraints and challenging environment, the Company performed reasonably well.

The Company''s gross turnover stood at Rs.69,280 lacs, as compared to Rs.87,868 lacs previous year. The profit before depreciation, interest and tax stood at Rs.3,510 lacs in 2012- 13, as against Rs.5,703 lacs in 2011-12. The profit after tax was Rs.722 lacs in 2012-13, as against Rs.2,847 lacs in 2011 - 12. The weakening of Indian Rupee throughout the year led to a loss of Rs.742 lacs. Company has taken several steps to reduce cost and increase its market share in all products.

DIVIDEND

Your Directors are pleased to recommend Dividend of 10% (0.20/- paisa) per share on the Paid up Equity Share Capital of the Company for the year 2012-13. Total dividend (including dividend tax) will absorb Rs.232/- lacs out of the profits available for the year 2012-13. The payment of dividend is subject to the approval of the shareholders at the ensuing annual general meeting of the Company.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis, forms an integral part of this Annual Report; provides a more detailed analysis on the performance of individual businesses and their outlook.

DIRECTORS

In accordance with Article 135 of the Articles of Association of the Company Shri Keshav Chandra Agrawal and Shri Subhash Chander Verma, Directors are liable to retire by rotation in ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 217 (2AA) of the Companies Act, 1956, your Directors hereby confirm that they:

I) have followed in the preparation of Annual Accounts, the applicable Accounting Standards with proper explanation relating to material departures if any;

II) had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

III) had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

IV) had prepared the annual accounts on a going concern basis.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

Your Company has two wholly Owned Subsidiary and a Fellow Subsidiary, namely:

1. Frested Limited, Cyprus-Wholly Owned Subsidiary

2. SC Forma SA, Romania - Fellow Subsidiary

3. Action Developers Limited, India-Wholly Owned Subsidiary

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. However, the financial information of the subsidiary companies is disclosed in the Annual Report in compliance with the said circular.

The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection at the Registered Office of the Company and that of the respective subsidiary companies. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies.

AUDITORS

The Statutory Auditors of the Company, M/s. Rajan Chhabra & Co., Chartered Accountants, will retire at the ensuing Annual General Meeting of the Company. They are eligible for re- appointment and have furnished a certificate to this effect that the proposed appointment, if made, will be in accordance with Section 224 (1B) of the Companies Act, 1956.

COST AUDITORS

In pursuance of Section 233-B of the Companies Act, 1956, your Directors have appointed M/s Vandana Bansal & Associates, Faridabad, as the Cost Auditors to conduct the Cost Audit forthe year 2013-14.

DEPOSITS

Your Company has not accepted any public deposit during the year under review.

QUALITY CERTIFICATION

Your Company has got CE Certification for most of its manufactured products. After getting this Certification, products of your Company are being well accepted in the International Market. Your Company is already ISO 9001 certified Company by CVI (Conformity Verification International), which is internationally recognized for the production, quality control and other qualities. This ensures that its standards of design, development, procurement,

manufacturing, testing, installation and product support meet the most stringent norms. The ISO Certification gives international recognition and will help the Company, to boost its export turnover.

HUMAN RESOURCES

The dedicated efforts of its competent and committed employees have contributed to the Company''s achievements in these challenging economic conditions. Your Board believes that Employees are vital to the Company. Your Company has created a favorable work environment which encourages innovation and meritocracy. Cordial industrial relations environment prevailed at all the manufacturing units of the Company during the year.

PARTICULARS OF EMPLOYEES

Information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, forms part of this Report. However, as per the provisions of Section 219(1) (b) (iv) of the Companies Act, 1956, the Report and the Accounts are being sent to all shareholders, excluding the Statement of Particulars under Section 217(2A). Any shareholder, interested in obtaining a copy of this statement, may write to the Company Secretary.

CORPORATE SOCIAL RESPONSIBILITY

Your Company is committed to the belief that it exists not just to run business and generate profits, but also to fulfill its duties as a responsible corporate citizen. As a responsible corporate citizen, ACE recognized its need to deliver value to the society, which is the reason for its existence.

Keeping in view of the above and being a responsible corporate citizen, your Company has set up a trust, i.e ''ACE Emergency Response Service Trust'' inauguration of which was done by Shri Bhupinder Singh Hooda, Hon''ble Chief Minister of Haryana on 17.03.2013. The essential objective of the trust is to rescue by providing ambulances to be stationed at various locations in Ballabgarh and Palwal. These ambulances are well equipped with all major life saving devices & trained medical staff. These ambulances will carry any person who needs immediate medical attention & will take them to the nearest hospital. We believe that through this service, we will be able to save thousands of lives who are not able to get medical aid in the first few hours of emergency.

CORPORATE GOVERNANCE

As required by the existing clause 49 of the Listing Agreements with the Stock Exchanges, a detailed report on Corporate Governance is included in the Annual Report. The Practicing Company Secretary has certified the Company''s compliance of the requirements of Corporate Governance in terms of clause 49 of the Listing Agreement and the same is annexed to the Report on Corporate Governance.

RESEARCH AND DEVELOPMENT

Your Company continues to invest in a comprehensive Research & Development (R&D) programme to develop a unique source of sustainable competitive advantage and build future readiness by leveraging contemporary advances in several relevant areas of science and technology and blending the same with classical concepts of product development.

The Company has set up a dedicated R&D centre at Jajru Road, in addition to existing R&D Centre at Dudhola Link Road. Both these centres have accreditations from the Ministry of Science and Technology, Govt of India. Both the centres continuously carries out Research and developments for developing new products and also focus on the quality of products, making them more economical, cost effective and userfriendly.

PARTICULARS ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORBTION AND FOREIGN EXCHANGE EARNING AND OUTGO

Information pursuant to Section 217 (1)(e) of the Companies Act, 1956 read with companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is annexed and forms a part of this report.

ACKNOWLEDGEMENT

The Directors wish to place on record their sincere appreciation for the committed and dedicated services of the employees of the Company. The Board also wishes to thank Government of India, various State Governments and the Company''s Bankers for all the help and encouragement they extend to the Company. Your Directors deeply acknowledge the continued trust and confidence that the Shareholders, Customers, the Dealers and the Suppliers have placed in your Company.

For and on behalf of the Board of

Action Construction Equipment Ltd. Vijay Agarwal

Chairman & Managing Director

Place: Faridabad

Date: 25th May, 2013


Mar 31, 2012

The Directors are pleased to present the 18th Annual report and Audited Statement of Accounts for the financial year ended 31st March, 2012.

(Rs. in lacs)

FINANCIAL RESULTS 2011-12 2010-11

Gross Turnover 87,868 70,759

Excise Duty 3,110 2,111

Net Turnover 84,758 68,648

Other Income 1,248 1,390

Total Income 86,006 70,038

Profit before Depreciation Interest and Tax 5,703 6,473

Less:

Depreciation 1133 689

Interest 735 352

Provision for Taxation 988 1352

Net Profit after Tax 2,847 4,059

Profit brought forward 2,563 1,604

Profit available for Appropriations 5,410 5,663

Appropriations:

Dividend 198 1858

Corporate Tax on Dividend 32 308

Transferred to General Reserve 1,000 1,000

Profit carried to Balance Sheet 4,180 2,497

FINANCIAL PERFORMANCE

In spite of the challenging year in which the global business sentiments were marred by poor economic growth, slowdown in investments, high inflation, interest rate hike etc, the gross turnover of the Company has increased to Rs.87868 lacs from Rs.70759 Lacs for the year ending 31.3.2012, indicating a growth of 24% on year over year basis. However the profit before tax has decreased from Rs.5432 Lacs for financial year ending 31.3.2011 to Rs.3835 Lacs for current financial year ending 31.3.2012. The weakening of Indian Rupee in the second half of the year led to a loss of Rs. 985 Lacs.

The company is focusing on reducing its cost and increasing its market share in all the products.

AMALGMATION OF ACE STEEL FAB PVT LIMITED

During the year under review, ACE Steel Fab Pvt Ltd has merged with the Company w.e.f. 1st Oct, 2011. Accordingly the financial results of the Company include the financial results of the ACE Steel Fab Pvt Limited from 1st Oct, 2011. Company has issued 60,55,000 Equity shares to the Shareholders of ACE Steelfab Private Ltd consequent to the order received from Hon'ble High Court of Delhi sanctioning the scheme of Amalgamation of ACE Steelfab Private Ltd with the Company.

SHARE WARRANTS

Company had issued 50,00,000 (Fifty Lac) Convertible Share Warrants to Mrs. Mona Agarwal, Promoter Director of the Company in accordance with Chapter VII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009("ICDR Regulations") on 30th April 2010 which had to be converted in the Equity Share on 26th November 2011 after payment of 75% remaining amount as per the terms of the issue.

No application for allotment of shares was received therefore the Company forfeited the Application money after due date i.e. 26th November 2011.

There are no outstanding GDRs /ADRs, Warrants or any Convertible instrument.

DIVIDEND

In order to conserve the cash resources your Directors have recommended 10% Equity Dividend per share on the Paid up Equity Share Capital of the Company for the year 2011-12. Total dividend (including dividend tax) will absorb Rs. 230 Lacs.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis of the financial condition and result of operations separately form part of this report.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements have been prepared by your Company in accordance with the applicable Accounting Standards (AS-21, AS-23 and AS-27) issued by the Institute of Chartered Accountants of India and the provisions of the listing agreement with the Stock Exchanges. Together with the Auditors' Report, these form part of the Annual Report.

In terms of the General Circular of the Ministry of Corporate Affairs (MCA), Government of India, the copy of Balance Sheet, Statement of Profit and Loss, Directors' Report, Auditors' Report, etc., of the subsidiary companies is not attached with the Annual Report of the Company. The related information on the Annual Accounts of the subsidiary companies shall be made available to the shareholders of the Company and of the subsidiary companies, who shall seek such information at any point of time. The Annual Accounts of the subsidiary companies will also be kept for inspection by any shareholder at the Registered Office of the Company and that of the subsidiary companies concerned. The Statement pursuant to Section 212 of the Companies Act, 1956, containing the details of the Company's subsidiaries and the gist of the financial performance of the subsidiary companies forms part of the Consolidated Financial Statements of this Annual Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 217 (2AA) of the Companies Act, 1956, your Directors hereby confirm that they:

I) have followed in the preparation of Annual Accounts, the applicable Accounting Standards with proper explanation relating to material departures if any;

II) had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

III) had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

IV) had prepared the annual accounts on a going concern basis.

DIRECTORS

Shri Sorab Agarwal and Shri Girish Narain Mehra (IAS Retd), Directors are liable to retire by rotation in ensuing Annual General Meeting and being eligible offer themselves for re-appointment. Mrs. Surbhi Garg was appointed as additional director on 12.11.2011. She has been appointed as Executive Director w.e.f. 1st April, 2012

Your Directors recommend for their appointment / re-appointment. None of the Directors of your Company is disqualified as per provisions of Section 274(1) (g) of the Companies Act, 1956.

AUDIT AND SYSTEMS

Your Company believes that internal control is a necessary concomitant of the principle of governance that freedom of management should be exercised within a framework of appropriate checks and balances. Your Company remains committed to ensuring an effective internal control environment that provides assurance on the efficiency of operations and security of assets.

ADEQUACY OF INTERNAL CONTROL SYSTEMS

The Company has well defined internal control system which aims at the protection of the Company's resources, efficiency of operations, compliances with the legal obligations and company's policies and procedures. In a phased manner, the internal audit function covers and reviews the internal controls and the procedures in all the plants and warehouses of the Company.

AUDITORS

The Auditors of the Company, M/s. Rajan Chhabra & Co., Chartered Accountants, will retire at the ensuing Annual General Meeting of the Company. They are eligible for re- appointment and have furnished a certificate to this effect that the proposed appointment, if made, will be in accordance with Section 224 (1B) of the Companies Act, 1956.

AUDITORS' OBSERVATION

Observations of the Auditors, if any when read together with the relevant notes on accounts and accounting policies are self-explanatory and do not require any further comments.

COST AUDITORS

In pursuance of Section 233-B of the Companies Act, 1956, your Directors have appointed M/s Vandana Bansal& Associates, Faridabad, as the Cost Auditors to conduct the Cost Audit for the year 2012-13.

The due date for filing the Compliance Reports for the financial year 2011-2012 is 30th September, 2012 and the same will be filed on or before the due date.

DEPOSITS

Your Company has not accepted any public deposit during the year under review.

QUALITY CERTIFICATION

Your Company has got CE Certification for most of its manufactured products. After getting this Certification, products of your Company are being well accepted in the International Market. Your Company is already ISO 9001 certified Company by CVI (Conformity Verification International), which is internationally recognized for the production, quality control and other qualities. This ensures that its standards of design, development, procurement, manufacturing, testing, installation and product support meet the most stringent norms. The ISO Certification gives international recognition and will help the Company, to boost its export turnover.

HUMAN RESOURCES

In spite of a challenging year, cordial industrial relations environment prevailed at all the manufacturing units of the Company during the year.

PARTICULARS OF EMPLOYEES

Information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, forms part of this Report. However, as per the provisions of Section 219(l) (b) (iv) of the Companies Act, 1956, the Report and the Accounts are being sent to all shareholders, excluding the Statement of Particulars under Section 217(2A). Any shareholder, interested in obtaining a copy of this statement, may write to the Company Secretary.

HEALTH, SAFETY AND ENVIRONMENT PROTECTION

The Company sustained its initiatives to maintain a pollution free environment, by elimination of waste, optimum utilization of power and preventive maintenance of equipment and machineries to keep them in good condition. Safety and health of the people working in and around manufacturing facilities is top priority of the Company and we are committed to improving this performance year after year

CORPORATE SOCIAL RESPONSIBILITY

Your Company is committed to the belief that it exists not just to run business and generate profits, but also to fulfill its duties as a responsible corporate citizen. At ACE, we define Corporate Social Responsibility as "continuing commitment for operating the core business in a socially responsible way, complemented by investment in communities to produce an overall positive impact on the society". The focus areas of your Company's CSR activities are Environment Protection, Planting trees and Health/Medical facilities to the employees and public at large. In addition to the continuing CSR activities, Company has set up a trust to provide medical aid to the needy.

As a responsible corporate citizen, ACE recognized its need to deliver value to the society, which is the reason for its existence

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Corporate Governance and Certificate regarding compliance of conditions of Corporate Governance from practicing Company Secretary forms part of the Annual Report.

RESEARCH AND DEVELOPMENT

Your Company continues to invest in a comprehensive Research & Development (R&D) programme to develop a unique source of sustainable competitive advantage and build future readiness by leveraging contemporary advances in several relevant areas of science and technology and blending the same with classical concepts of product development.

The Company has set up a dedicated R&D centre at Jajru Road, in addition to existing R&D Centre at Dudhola Link Road. Both these centres have accreditations from the Ministry of Science and Technology, Govt of India. Both the centres continuously carries out Research and developments for developing new products and also focus on the quality of products, making them more economical, cost effective and user friendly.

PARTICULARS ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORBTION AND FOREIGN EXCHANGE EARNING AND OUTGO

Information pursuant to Section 217 (1)(e) of the Companies Act, 1956 read with companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is annexed and forms a part of this report.

ACKNOWLEDGEMENT

The Directors wish to place on record their sincere appreciation for the committed and dedicated services of the employees of the Company, who have ensured that the company continues to grow at a faster pace. The Board also wishes to thank Government of India, various State Governments and the Company's Bankers for all the help and encouragement they extend to the Company. Your Directors deeply acknowledge the continued trust and confidence that the Shareholders, Customers, the Dealers and the Suppliers have placed in your Company.

For and on behalf of the Board of Action Construction Equipment Ltd.

Vijay Agarwal

Chairman & Managing Director

Place: Faridabad

Date: 04th August, 2012


Mar 31, 2011

The Members

The Directors are pleased to present the 17th Annual report and Audited Statement of Accounts for the financial year ended 31st March, 2011

FINANCIAL RESULTS

(Rs. in lacs) 2009-10 2010-11

Gross Turnover 70,759 43,783

Excise Duty 2,111 1,071

Net Turnover 68,648 42,712

Other Income 1,390 687

Total Income 70,038 43,399

Profit before Depreciation Interest and Tax 6,473 4,060

Less:

Depreciation 689 525

Interest 352 258

Provision for Taxation 1,373 833

Net Profit after Tax 4,059 2,444

Profit brought forward 1,604 1,208

Profit available for Appropriations 5,663 3,652

Appropriations:

Dividend (Interim & Final) 1,858 899

Tax on Dividend 308 149

Transferred to General Reserve 1,000 1,000

Profit carried to Balance Sheet 2,497 1,604

FINANCIAL PERFORMANCE

During the year the gross turnover of the Company has increased to Rs. 70759 lacs from Rs. 43783 lacs for the year ending 31.3.2010, indicating a growth of 62% on year over year basis. The profit before tax has increased from Rs. 3277 Lacs for financial year ending 31.3.2010 to Rs. 5432 Lacs for current financial year ending 31.3.2011, a growth of 66%.

The growth momentum created in the company in financial year 2011 led to increase in the numbers for all product categories and the same shall be carried forward going ahead. The company is focused on reducing its costs and increasing its market share in all the products.

DIVIDEND

During the current financial year, Directors had declared and distributed interim Dividend of 50 % i.e. Rs. 1 on equity shares of Rs. 2 each, absorbing an aggregate amount of Rs. 929 lacs (excluding Dividend Tax of Rs.154 lacs). The Board has recommended a final Dividend of 50 % i.e. Rs. 1 on equity share of Rs. 2 each which will be paid after your approval at the ensuing Annual General Meeting. The final Dividend will absorb an aggregate amount of Rs. 929 lacs (excluding Dividend Tax of Rs. 154 lacs).

Thus, the total dividend distributed for the year is 100%.

CHANGE IN SHARE CAPITAL

During the year the Authorised Share Capital of the Company was increased from Rs. 2000 lacs to Rs. 2400 lacs.

PREFRENTIAL ALLOTMENT

During the year the Company has issued 30 lacs equity shares on Preferential Allotment to Reliance Capital Limited.

SHARE WARRANTS

The Company has also issued 50 lacs convertible warrants to the promoters of the Company. The Company has received an aggregate sum of Rs. 518 lacs equivalent to 25% of the total subscription amount on the aforesaid warrants.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis of the financial condition and result of operations separately form part of this report

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

Your Company has a wholly owned overseas subsidiary (WOS) Company at Cyprus viz M/s FRESTED LIMITED, and through it, your Company acquired 89.50% equity stake in a Romanian Company viz. SC FORMA SA, Romania. Your Company also has a Wholly-owned Subsidiary Company viz. Action Developers Ltd. Therefore, in compliance of the Listing Agreement with the Stock Exchanges and Accounting Standard issued by The Institute of Chartered Accountants of India, your Company has consolidated the Accounts incorporating the Accounts of all these three Subsidiary Companies. The audited Consolidated Financial Statements together with Auditors' Report thereon, form part of the Annual Report.

Ministry of Company Affairs, Government of India, vide its Circular No. 2/2011 dated 08th February, 2011 has exempted the Companies from attaching the Annual Report and other particulars of its Subsidiary Companies along with the Annual Report of the Company u/s 212 of the Companies Act, 1956, if certain conditions mentioned are fulfilled. Therefore, the said Reports of the above Subsidiary Companies are not attached here with. However, a statement giving certain information as required under the circular is placed along with the Consolidated Accounts.

The Annual Accounts of the subsidiary companies and the related detailed information will be made available to the members of the holding and subsidiary Companies seeking such information at any point of time. The Annual Accounts of the Subsidiary Companies is also kept for inspection by any member at its Registered Office

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 217 (2AA) of the Companies Act, 1956, your Directors hereby confirm that :

I) That Directors have followed in the preparation of Annual Accounts, the applicable Accounting Standards with proper explanation relating to material departures if any;

II) That the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

III) That the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

IV) That the Directors had prepared the annual accounts on a going concern basis.

DIRECTORS

Shri Subhash Chandra Verma and Dr. Amar Singhal, Directors are liable to retire by rotation in ensuing Annual General Meeting and being eligible offer themselves for re- appointment. Your Directors recommend for their re- appointment. None of the Directors of your Company is disqualified as per provisions of Section 274(1) (g) of the Companies Act, 1956.

INTER-SE RELATIONSHIP BETWEEN DIRECTORS

As per latest amendment made in Clause 49 of the Listing Agreement, your Company has to report Inter-se relationship between the Directors in the Annual Report of the Company. The following are the details of Inter-se relationship between the Directors:-

Shri Vijay Agarwal, Chairman and Managing Director is husband of Smt. Mona Agarwal, Whole-time Director and Father of Shri. Sorab Agarwal, Executive Director of the Company.

All other Directors of the Company, act in there Independent capacities and do not have any inter-se relationship among themselves.

ADEQUACY OF INTERNAL CONTROL SYSTEMS

The Company has well defined internal control system which aims at the protection of the Company's resources, efficiency of operations, compliances with the legal obligations and company's policies and procedures. In a phased manner, the internal audit function covers and reviews the internal controls and the procedures in all the plants and warehouses of the Company.

AUDITORS

The Auditors of the Company, M/s. Rajan Chhabra & Co., Chartered Accountants, will retire at the ensuing Annual General Meeting of the Company. They are eligible for re- appointment and have furnished a certificate to this effect that the proposed appointment, if made, will be in accordance with Section 224 (1B) of the Companies Act, 1956.

AUDITORS' OBSERVATION

Observations of the Auditors, if any when read together with the relevant notes on accounts and accounting policies are self-explanatory and do not require any further comments.

DEPOSITS

Your Company has not accepted any public deposit during the year under review.

QUALITY CERTIFICATION

Your Company has got CE Certification for most of its manufactured products. After getting this Certification, products of your Company are being well accepted in the International Market. Your Company is already ISO 9001 certified Company by CVI (Conformity Verification International), which is internationally recognized for the production, quality control and other qualities. This ensures that its standards of design, development, procurement, manufacturing, testing, installation and product support meet the most stringent norms. The ISO Certification gives international recognition and will help the Company, to boost its export turnover.

HUMAN RESOURCES

In spite of a challenging year when demands of the products is increasing by more than 60 %, cordial industrial relations environment prevailed at all the manufacturing units of the Company during the year.

PARTICULARS OF EMPLOYEES

Any shareholder interested in obtaining a copy of statement of particulars of employees referred to in section 217(2A) of the Companies Act, 1956, may write to the Company Secretary at the Registered Office of the Company.

HEALTH, SAFETY AND ENVIRONMENT PROTECTION

The Company sustained its initiatives to maintain a pollution year environment, by elimination of waste, optimum utilization of power and preventive maintenance of equipments and machineries to keep them in good condition. Safety and health of the people working in and around manufacturing facilities is top priority of the Company and we are committed to improving this performance year after year.

CORPORATE SOCIAL RESPONSIBILITY

Your Company is committed to the belief that it exists not just to run business and generate profits, but also to fulfill its duties as a responsible corporate citizen. At ACE, we define Corporate Social Responsibility as "continuing commitment for operating the core business in a socially responsible way, complemented by investment in communities to produce an overall positive impact on the society". The focus areas of your Company's CSR activities are: Environment Protection, Infrastructure, Planting trees and Health /Medical facilities.

Your Company regularly conducts Yoga training program for its employees. Your Company is particularly cautious of the health of its employees and aims at providing good basic facilities and hygienic conditions to work for its employees.

Your company believes that a cleaner environment maintained today by the Company would be a precious gift to the upcoming generation. Your Company believes in growing trees in the premises of the Company as well as in nearby localities, thus maintaining a balance between environment and corporate growth.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Corporate Governance Certificate from practicing company secretary regarding compliance of conditions of Corporate Governance forms part of the Annual Report.

RESEARCH AND DEVELOPMENT

The Company is in continuous process of improving quality of its product. For that purpose, the Company has established an In-house Research and Development Centre, which continuously carries out Research and developments which can ultimately improve the quality of products, making them more economical, cost effective and user friendly.

Your Company has received recognition for its In-house Research and Development Centre from Govt. of India. With this recognition, the Company will be entitled to avail various incentives and benefits (including income tax benefits) being provided by the Govt.

PARTICULARS ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORBTION AND FOREIGN EXCHANGE EARNING AND OUTGO

Information pursuant to Section 217 (1)(e) of the Companies Act, 1956 read with companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is annexed and forms a part of this report.

ACKNOWLEDGEMENT

The Directors wish to place on record their sincere appreciation for the committed and dedicated services of the employees of the Company, who have ensured that the company continues to grow at a faster pace. The Board also wishes to thank Government of India, various State Governments and the Company's Bankers for all the help and encouragement they extend to the Company. Your Directors deeply acknowledge the continued trust and confidence that the Shareholders, Customers, the Dealers and the Suppliers have placed in your Company.

For and on behalf of the Board of

Action Construction Equipment Ltd.

Vijay Agarwal Chairman & Managing Director

Place: Ballabgarh Date: 30th May, 2011


Mar 31, 2010

The Directors are pleased to present the sixteenth Annual Report, together with the audited accounts of your Company for the year ended 31st March, 2010.

FINANCIAL RESULTS

Financial Results of the Company for the year under review, along with the figures for previous year

are as follows:

(Rs.in lac)

2009-10 2008-09

Gross Sales 43,783 44,783

Excise Duty 1,071 1,933

Net Sales 42,712 42,850

Other Income 687 1,871

Total Income 43,399 44,721

Profit before Depreciation and Tax 3,802 3,590 Less:

Depreciation 525 574

Provision for Taxation 833 743

Net Profit after Tax 2,444 2,273

Profit brought forward 1,207 1,355

Profit available for Appropriation 3,651 3,628

Appropriations:

Interim Dividend 899 -

Dividend on Equity Shares - 359

Corporate Tax on Dividend 149 61

Amount transferred to General Reserve 1,000 2,000

Profit carried to Balance Sheet 1,603 1.208

Note: Previous years figures have been regrouped wherever necessary.

FINANCIAL PERFORMANCE

The Companys performance is satisfactory, as overall figures represent a good growth potential, going ahead. Although the figures of the Financial year 2009-10 are more or less similar to the figures of the financial year 2008-09, what is inspiring is the results for the last quarter of the financial year 2009-10. The Companys profit before tax for the last quarter is Rs. 13 crores, compared to an aggregate of Rs. 20 crores for the rest three quarters. These surely are good signs, as the Indian economy is positioned for take-off following sluggish growth. The Companys sales have also increased in all its equipment categories. It intends to continue its journey towards sustainable growth, which commenced in 1995.

The Companys gross sales stood at Rs. 43,783 lacs, marginally lower from Rs. 44,783 lacs previous year. The net sales for the year ended March 31, 2010 was Rs. 42,71 2 lacs, demonstrating a marginal drop from Rs. 42,850 lacs for the year ended 31, 2009, on account of the impact of the slowdown during the first half of the fiscal. The profit before depreciation and tax stood at Rs. 3,802 lacs in 2009-10, as against Rs. 3,590 lacs in 2008-09. The profit after tax was Rs. 2,444 lacs in 2009-10, as against Rs. 2,273 lacs in 2008-09.

DIVIDEND

The Directors in its Board Meeting held on 6th April, 2010 has already recommended an interim dividend of Rs. 1 (Rupees One) per equity share for the financial year 2009-10.

The Board has refrained from recommending any final dividend in view of future funding requirements for growth.

CHANGE IN SHARE CAPITAL

During the year, there was no change in the Companys share

capital.

LISTING

The shares of your Company are listed on the National Stock

Exchange of India Limited and the Bombay Stock Exchange.

CONSOLIDATED FINANCIAL STATEMENTS Your Company has a wholly-owned overseas subsidiary (WOS) Company at Cyprus viz M/s FRESTED LIMITED, and through it, your Company has acquired 89.50% equity stake in a Romanian Company viz. SC FORMA SA, Romania. Your Company has also formed a wholly-owned subsidiary company viz. Action Developers Ltd. As per Section 4 of the Companies Act, 1956 all these three companies are subsidiary companies of the Company. Therefore, in compliance of the Listing Agreement with the Stock Exchanges and Accounting Standard issued by The Institute of Chartered Accountants of India, your Company has consolidated the accounts incorporating the accounts of all these three subsidiary companies. The audited consolidated financial statements together with Auditors Report thereon form a part of the Annual Report.

RETURN ON NET WORTH

On the overall valuations of your Company, the Companys Net Worth is Rs. 17083.52 lac as on 31st March, 2010, generating a Return on Net worth (RONW) 14.31% and Return on Capital Employed (ROCE) of 12.25%, both of which indicate good business returns.

MARKETING AND EXPORT AND SCALING UP OVERSEAS

BUSINESS

The Indian economy is in a take-off phase and has developed a necessary strength to achieve the target of being a developed nation by 2020.

The Company plans to expand its overseas markets. It is looking at the Middle East, Asia, Africa and Eastern Europe for its products.

With a view to enhance shareholder value, your Company continues to focus on expanding its customer base through cost reduction, increased efficiency and technology upgradation.

Your Companys confidence in building a positive future stems from the continued and dedicated focus of its management team to maximise customer satisfaction, growth in revenue, increased market penetration and addition to the product portfolio. With a large and well-spread network of 5 regional offices, 15 area offices and 85 sales and services centers and dedicated spare parts division, along with a range of products in its basket, your Company is well equipped to provide the best products and parts, support and services to its increasing number of customers. In 2009-10, your Company has introduced road- making equipment like vibratory soil compactors and vibratory tandem rollers

Your Company is looking for expansion in international markets as well. The Companys representatives are regularly making foreign visits to explore acquisition possibilities. In addition to Cyprus and Romania, where the Company has already formed its subsidiaries, your Company is also looking at other viable and conducive locations.

On the domestic front, your Company is one of the major equipment suppliers. It supplies equipment to very large groups (Reliance, L&T, Simplex, Essar, NCC, IVRCL, Punj Lyod, BHEL and Gammon, among others, who have faith in the Companys products).

Your Company intends to become "a one stop shop" for all possible infrastructure construction, related to equipment in the forthcoming years.

SUBSIDIARY COMPANIES

As mentioned earlier, your Company has incorporated a wholly- owned overseas subsidiary (WOS) Company at Cyprus viz M/s FRESTED LIMITED, and through it, your Company has acquired 89.5% equity stake in a Romanian Company viz. SC FORMA SA, Romania, which has become fellow subsidiary of your Company. Also, the Company has formed one more subsidiary Company viz. Action Developers Ltd.

The Ministry of Company Affairs, Government of India, vide its letter No. 47/387/2010 CL-III dated May 18, 2010 has exempted the Company from attaching the Annual Report and other particulars of its subsidiary companies along with the Annual Report of the Company u/s 212 of the Companies Act, 1956, therefore, the said Reports of the subsidiary companies viz. (1) FRESTED Limited, Cyprus, (2) SC FORMA SA, Romania (3) Action Developers Limited are not attached herewith. However, a statement giving certain information as required vide exemption letter No. No. 47/387/2010 CL-III dated May 18, 2010 is placed along with the Consolidated Accounts.

The annual accounts of the subsidiary companies and the related detailed information will be made available to the members of the holding and subsidiary Company seeking such information at any point of time. The Annual Accounts of the subsidiary companies will also be kept for inspection by any investor at its registered office.

QUALITY CERTIFICATION

Your Company has got CE Certification for most of its manufactured products. After getting this certification, products of your Company are being well accepted in the international market. Your Company is already an ISO 9001 certified Company by CVI (Conformity Verification International), which is internationally recognised for the production, quality control and other qualities. This ensures that its standards of design, development, procurement, manufacturing, testing, installation and product support comply with the most stringent norms. The ISO Certification gives international recognition, and will help the Company boost its export turnover.

HUMAN RESOURCES & INDUSTRIAL RELATIONS FRONT

The industrial scenario, during the year 2009-10, remained harmonious and cordial. There was no strike or lock-out during the year and as such no person-days were lost. As on March 31, 2010, there were 631 employees on the Companys rolls.

Any shareholder interested in obtaining a copy of statement of particulars of employees referred to in Section 217(2A) of the Companies Act, 1956, may write to the Company Secretary at the Registered Office of the Company.

The Companythisyearalso organised a cricket tournament, which was named as ACE Premier League ("APL"). The tournament was a grand success with majority of employees turning up to play and watch the tournament. Eight teams were formed for the tournament from various plants and offices of the Company.

ENVIORNMENT, HEALTH AND SAFETY FOR CORPORATE SUSTAINABILITY

Your Companys commitment and responsibility towards the environment stems from its vision, which enjoins upon your Company to sustain business growth with deep commitment to the environment. The safety and health of its employees are embedded in the Companys core organisational values. The policy, inter-alia, aims to ensure safety of public, employees, plant and equipment, ensure compliance with all statutory rules and regulations, impart training to its employees, carry out safety audits of its facilities, conduct regular medical check-up of its employees and promote eco-friendly activities.

CORPORATE SOCIAL RESPONSIBILITY

Your Company is committed to the belief that it exists not just to run business and generate profits, but also to fulfill its duties as a responsible corporate citizen. At ACE, we define the Corporate Social Responsibility as "continuing commitment for operating the core business in a socially responsible way, complemented by investment in communities to produce an overall positive impact on the society". As a caring corporate citizen, we paint various vibrant hues on the canvas of life, each color in the palette coming alive with the bold brush strokes of hope, harmony and happiness. The focus areas of your Companys CSR activities

comprise: Environment Protection, Infrastructure, Drinking water/Sanitation and Health/Medical facilities.

Your Company regularly conducts yoga training program for its permanent, as well as contract employees. It is particularly cautious of the health of its employees and aims at providing good basic facilities and hygienic conditions to work for its employees.

ACE believes that a cleaner environment is a precious gift to the upcoming generation. Your Company believes in planting trees in the premises, as well as in nearby localities, reconciling environmental priorities with corporate growth.

ACE expects to be involved in multiple social initiatives (child education, environment protection, among others). The Company regularly donates to educational institutions. It is well aware of its responsibilities as a corporate citizen and strives for ways to drive social initiatives.

DIRECTORS

Mr. Sorab Agarwal and Mr. Girish Narain Mehra, Directors are liable to retire by rotation in ensuing Annual General Meeting and being eligible offer themselves for re-appointment. Your Directors recommend for their re-appointment. None of the Directors of your Company is disqualified as per provisions of Section 274(1 )(g) of the Companies Act, 1956.

MANAGEMENT DISCUSSION AND ANALYSIS The Management Discussion and Analysis of the financial condition and result of operations separately form part of this report

AUDITORS OBSERVATIONS

Observations of the Auditors when read together with the relevant notes on accounts and accounting policies are self-explanatory and do not require any further comments.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Corporate Governance and Auditors Certificate regarding compliance of conditions of Corporate Governance forms part of the Annual Report.

AUDITORS

The Auditors of the Company, M/s. Rajan Chhabra & Co., Chartered Accountants, will retire at the ensuing Annual General Meeting of the Company. They are eligible for re-appointment and have furnished a certificate to this effect that the proposed appointment, if made, will be in accordance with Section 224 (1B) of the Companies Act, 1956.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the, provisions of Section 217 (2AA), your Directors hereby confirm:

I) That in the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures.

II) That thedirectors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period.

III) That the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

IV) That the directors had prepared the annual accounts on a going concern basis.

INSURANCE

The assets of your Company are adequately insured against the losses by fire and other risks as considered necessary by the management.

DEPOSITS

Your Company has not accepted any public deposit within the meaning of the provisions of section 58A of the Companies Act, 1956.

RESEARCH AND DEVELOPMENT

Your Company is focussed on quality excellence. It has established an in-house Research and Development Centre, which continuously carries out research and developments, which can ultimately improve the quality of products, making them more economical and user-friendly.

Your Company is also planning to submit an application with Govt, of India for recognition of its In House Research and Development Centre shortly. The detail of Initiatives taken by this In-house Research and Development Centre are given in detail in Annexure-A

PARTICULARS ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORBTION AND FOREIGN EXCHANGE EARNING AND OUTGO

The information relating to the conservation of Energy, Technology Absorption and Foreign Exchange Earning & Outgo required under Section 217 (1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 are given in Annexure A and forms part of this report.

INTER-SE RELATIONSHIP BETWEEN DIRECTORS

As per Clause 49 of the Listing Agreement, your Company has to report Inter-se relationship between the Directors in the Annual Report of the Company. The following are the details of Inter-se relationship between the Directors:-

- Mr. Vijay Agarwal, Chairman and Managing Director is husband of Mrs. Mona Agarwal, Whole-time Director. and Father of Mr. Sorab Agarwal, Executive Director of the Company.

All other Directors of the Company, act in their Independent capacities and do .. not have any inter-se relationship among themselves.

ACKNOWLEDGEMENT

The Board of Directors wish to place on record their sincere appreciation for the valuable services and dedicated efforts of the employees of the. Company, who have ensured the accomplishment of good results and achievements of the Company. The Board also wishes to thank Government of India, various State Governments and the Companys Banker for all the help and encouragement they extended to the Company. Your Directors deeply acknowledge the continued trust and confidence that the Shareholders, Customers, Dealers and Suppliers have placed in your Company.

For and on behalf of the Board of Action Construction Equipment Ltd.

Vijay Agarwal Chairman & Managing Director

Place: Ballabgarh Date: 27th May, 2010