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Notes to Accounts of Action Construction Equipment Ltd.

Mar 31, 2023

d) During the financial year 2019-20 pursuant to the provisions of Sections 68, 69, 70 and all other applicable provisions of the Companies Act, 2013, the provisions of the SEBI (Buy Back of Securities) Regulations, 2018, Article 62 of the Articles of Association of the Company and pursuant to the resolutions passed by the Board of Directors of the Company at their meeting held on May 16, 2019, the Company had bought back 3,839,804 equity shares of R 2 each in electronic form.

e) During the financial year 2021-22, the Qualified Institutions Placement Committee ("QIP Committee") in its meeting held on September 24, 2021 had approved the allotment of 56,00,000 Equity Shares of face value of R 2 each to eligible qualified institutional buyers at the issue price of R 242 per Equity Shares (including a premium of R 240 per Equity Share) against the Floor Price of R 254.55 per Equity Shares , aggregating to R 13,552.00 lakhs pursuant to the issue in accordance with the SEBI ICDR Regulations.

f) Rights, preferences and restrictions attached to equity shares

The Company has only one class of shares referred to as equity shares having a par value of R 2/-. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Nature and purpose of reserves and surplus

a) General reserve

General reserve are free reserves of the Company which are kept aside out of the Company''s profit to meet the future requirements as and when they arise.

b) Capital redemption reserve

In accordance with Section 69 of the Companies Act, 2013, the Company creates a capital redemption reserve equal to the nominal value of the shares bought back as an appropriation from the general reserve.

c) Securities premium

Securities premium is used to record the premium received on issue of shares. It is utilised in accordance with the provisions of the Companies Act, 2013

d) Retained earnings

Retained earnings comprises of accumulated balance of profits/(losses) of current and prior years including transfers made to / from other reserves from time to time. The reserve can be utilised or distributed by the Company in accordance with the provisions of the Companies Act, 2013.

i. During the year ended March 31, 2023 and March 31, 2022, the Company has issued and repaid 1,200 numbers and 2,100 numbers of commercial papers (unsecured), respectively amounting to R 6,000 lakhs and R 10,500 lakhs with rate of interest range of 6.05% to 6.6% p.a. and 4.0 % to 4.8 % p.a. (approx) respectively. The commercial papers are issued by the Company for meeting its working capital requirements.

ii. Information about the Company''s exposure to interest rate and liquidity risks is included in Note 31.

*Provision for warranty

The Company gives warranties on certain products and undertake to repair or replace them, if they fail to perform satisfactorily during the free warranty period. Such provisions represents the amount of the expected cost of meeting the obligations of such rectification/ replacement. The timing of the outflow is expected to be within next year. The provision is based on estimates made from historical warranty data associated with similar products and services. The Company expect to incur the related expenditure within next year.

30. Employee benefit expenses A. Defined Benefit Plans

In accordance with the Payment of Gratuity Act, 1972, the Company provides for gratuity, as defined benefit plan. The gratuity plan provides for a lump sum payment to the employees at the time of separation from the service on completion of vested year of employment i.e. five years. The liability of gratuity plan is provided based on actuarial valuation as at the end of each financial year based on which the Company contributes the ascertained liability to Life Insurance Corporation of India by whom the plan assets are maintained.

These plans typically expose the Company to actuarial risks such as: investment risk, inherent interest rate risk , longevity risk and salary risk.

Investment Risk

The present value of the defined benefit plan liability (denominated in Indian Rupee) is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds.

Interest Rate Risk

The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

Longevity Risk

The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.

Salary Risk

Higher than expected increases in salary will increase the defined benefit obligation.

The present value of the defined benefit obligation, and the related current service cost, were measured using the projected unit credit method.

C. Defined contribution plans

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards provident fund and employee state insurance scheme which are defined contribution plans. The Company has no obligations other than to make the specified contributions. The contributions are charged to the standalone statement of profit and loss as they accrue. The amount recognised as an expense towards contribution to provident and other funds for the year aggregated to K 263.88 lakhs (March 31, 2022: K 256.98 lakhs).

B) Fair value hierarchy

The fair value of financial instruments as referred to in note (A) above has been classified into three category depending on the inputs used in valuation technique. The hierarchy gives the highest priority to quoted price in active markets for identical assets or liabilities [Level 1 measurements] and lowest priority to unobservable inputs [Level 3 measurements].

The categories used are as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Valuation process and technique used to determine fair value

The fair value of investments in mutual fund units is based on the net asset value (NAV) as stated by the issuers of these mutual fund units in the published statement as at the Balance Sheet date. The fair value of investment in quoted debentures and bonds is determined on the basis of quoted price as at Balance sheet date.

The valuation of portfolio management service and alternative investment fund is based on the underlying assets wherein investments have been made. The investments are made either in listed securities or fixed deposits, therefore the fair value is based on the quoted price of underlying investment in case of listed security and carrying amount in case of fixed deposit.

Transfers between Levels 1, Level 2 and Level 3

There has been no transfer between level 1, level 2 and level 3 for the years ended March 31, 2023 and March 31, 2022.

C) Financial Risk Management

The Company''s activities expose it to market risk, liquidity risk and credit risk. This note explains the source of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements.

The Company''s Board of Directors has overall responsibility for the establishment and oversight of the company''s risk management framework.

The Company has exposure to the following risks arising from financial instruments:- credit risk

- liquidity risk

- market risk".

The Company''s risk management is carried out by a treasury department under the supervision of Chief Financial Officer of the Company. The treasury department identifies and evaluates financial risks. The board of directors provides written principles for overall risk management, as well as policies covering specific areas, such as interest rate risk, liquidity risk etc. The Audit Committee of the Company oversees how management monitors compliance with the Company''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company.

Expected credit losses for financial assets other than trade receivables and finance lease receivables

The Company maintains its cash and cash equivalents and bank deposits with reputed banks. The credit risk on these instruments is limited because the counterparties are bank with high credit ratings assigned by domestic credit rating agencies. Hence, the credit risk associated with cash and cash equivalent and bank deposits is relatively low.

Loan comprises loans given to employees, which would be adjusted against salary of the employees and hence credit risk associated with such amount is also relatively low.

The Company maintains its investment in bonds and debentures with reputed financial institutions and corporates. The credit risk on these instruments is limited because the counterparties are financial institutions and corporates with high credit ratings assigned by domestic credit rating agencies. Hence, the credit risk associated with these investments is relatively low. Investments in Mutual funds, Alternative Investment Fund, Shares, Portfolio Management Service and Partnership firm are measured at mark to market hence, the credit risk associated with these investments already considered in valuation as on reporting date.

Security deposits are given for operational activities of the Company and will be returned to the Company as per the contracts with respective vendors. The Company monitors the credit ratings of the counterparties on regular basis. These security deposits carry very minimal credit risk based on the financial position of parties and Company''s historical experience of dealing with the parties.

Expected credit losses for trade receivables and finance lease receivable

Credit risks related to receivables is managed by each business unit subject to the Company''s policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored. An impairment analysis is performed at each reporting date on trade receivables and finance lease receivable by using lifetime expected credit losses as per simplified approach wherein the weighted average loss rates are analysed from the historical trend of defaults relating to each business segment. Such provision matrix has been considered to recognize lifetime expected credit losses on trade receivables and finance lease receivable (other than those where defaults criteria are met). The Company evaluates the concentration of risk with respect to trade receivables and finance lease receivable as low, since its customers are from various industries, jurisdictions and operate in independent markets. These receivables are written off when there is no reasonable expectation of recovery.

There are no receivables which are in default as at year end and the management believes that these are collectible in full based on historical payment behavior. For weighted average loss rate disclosures, Refer Note 9.

Liquidity risk is the risk that the Company will encounter difficulty in meeting its obligations associated with financial liabilities. The investment philosophy of the Company is capital preservation and liquidity in preference to returns. The Company consistently generates sufficient cash flows from operations and has access to multiple sources of funding to meet the financial obligations and maintain adequate liquidity for use. The Company manages liquidity risk by maintaining adequate reserve, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

C.3) Market risk

Market risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk namely : currency risk and interest rate risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

Price risk

The Company invests in mutual funds, alternative investment fund, Shares, portfolio management service and partnership firm, which are susceptible to market price risk arising from uncertainties about future values of the investment securities. In order to manage its price risk arising from investments, the Company diversifies its portfolio in accordance with the limits set by the risk management policies.

Currency risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. Exposure arises primarily due to exchange rate fluctuations between the functional currency and other currencies from the Company''s operating, investing and financing activities. The Company undertakes transactions denominated in foreign currency (mainly US Dollar and Euro) which are subject to the risk of exchange rate fluctuations. Considering the low volume of foreign currency transactions, the Company''s exposure to foreign currency risk is limited hence the Company does not use any derivative instruments to manage its exposure.

Sensitivity

A reasonably possible strengthening (weakening) of the US dollar against R at March 31 would have affected the measurement of financial instruments denominated in a foreign currency and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant.

C.4) interest Rate Risk

The Company''s interest rate risk arises from debt borrowings. Borrowings issued at variable rates expose the Company to cash flow interest rate risk, whilst borrowings issued at fixed rates expose the Company to fair value interest rate risk. The risks are managed by monitoring an appropriate mix between fixed and floating rate borrowings.

Fair value sensitivity analysis of interest rate

The Company does not account for any fixed-rate financial assets or financial liabilities at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss.

A reasonably possible change of 50 basis points (bps) in interest rates at the reporting date would have increased/ (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant.

Capital Management

The primary objective of the Company''s capital management is to safeguard the Company''s ability to continue as a going concern, maintain a strong credit rating and a healthy capital ratio to support the business and to enhance shareholder value. The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and business strategies to maintain or adjust the capital structure, issue new shares or raise and repay debts. The Company''s capital management objectives, policies or processes were unchanged during the year.

34 Contingent liabilities, commitments and other claims

(a) Claims against the company not acknowledged as debts

(i) Claims made by Tax Authorities

Name of the statute

Nature of the dues

As at March 31, 2023

As at March 31, 2022

period to which amount relates

Forum where dispute is pending

Income Tax Act, 1961

Disallowance of deduction claimed u/s 35(2AB), disallowance of Interest expenses u/s 36(1)(iii), disallowance u/s 14A and disallowance of expenses on adhoc basis.

730.44

683.10

Financial year 201415 to Financial year 2016-17 and 201920 to 2020-21

Commissioner of Income Tax (Appeals)

Income Tax Act, 1961

Error in demand on portal

119.34

119.34

Financial year 201213

Deputy Commissioner of Income Tax

Central Excise Act, 1994

Classification Dispute on parts

607.44

607.44

Financial year 200607 to Financial year 2009-10

Customs Excise and Service Tax Appellate Tribunal (CESTAT)

Central Excise Act, 1994

Demand of Excise duty on account of section 11D for exempt goods

829.60

829.60

Financial year 200809 to Financial year 2013-14

Customs Excise and Service Tax Appellate Tribunal (CESTAT)

Central Excise Act, 1994

Demand raised for utilization of Cenvat credit.

2.39

2.39

Financial year 2009-10

Commissioner

(Appeals)

Income Tax Act, 1961

PF expenditure for delayed payment to the PF authorities

18.90

-

Financial year 2020-21

Commissioner of Income Tax (Appeals)

Finance Act, 1994 (Service Tax)

Demand is related to the violation of the Export of Services rules 2005

8.11

8.11

Financial year 2010-11

Additional

Commissioner

West Bengal Value Added Tax Act, 2003

Rate dispute classification of products

1,262.31

1,262.31

Financial year 200607 to Financial year 2013-14

Additional Commissioner Review Board (West Bengal )

3,578.53

3,512.29

Particulars

As at

March 31, 2023

As at

March 31, 2022

(ii) Other matters including claims related to employees/ ex-employees, and customers etc.

825.62

941.71

Notes

(i) Pending resolution of the respective proceedings, it is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above as it is determinable only on receipt of judgements/decisions pending with various forums/authorities.

(ii) The amount indicated as contingent liability or claim against the company, reflects only the basic value. Any interest, penalty or legal cost is not considered.

(iii) The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial position. The Company does not expect any reimbursements in respect of the above contingent liabilities.

(b) Commitments

Particulars

As at

As at

March 31, 2023

March 31, 2022

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances)

2,586.72

637.77

Lease commitments (Refer Note 37)

85.30

120.82

Qualified institutional Placement (QiP)

During the year ended March 31, 2022, the Company had completed the Qualified Institutional Placement ("QIP") under Chapter VI of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, pursuant to which 5,600,000 equity shares having a face value of R 2 each were issued and allotted, at an issue price of R 242 per equity share (including a securities premium of R 240 per equity share), aggregating to R 13,552 lakhs.

The proceeds of such Qualified Institutional Placement amounts to R 13,173.87 lakhs (net of issue related expenses amounting R 378.13 lakhs which had been adjusted against securities premium). As per the placement document, QIP proceeds were to be utilised for funding the long term growth of its existing businesses; organic or inorganic growth, making strategic acquisitions; financing other long term capital, working capital, and general corporate requirements; pre-payment and / or repayment of loans. As on March 31, 2023 utilisation out of such net amount is given below and there is no deviation in use of proceeds from the objects stated in the placement document for the QIP.

The Company does not face a significant liquidity risk with regard to its lease liabilities as the current /non current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.

Rental expenses recorded for short-term leases during the year ended March 31, 2023 is R 64.65 Lakhs (March 31, 2022: R 56.79 lakhs).

Leases as Lessor Finance lease

During the year ended March 31, 2023, the Company entered into agreements with customers ("the lessee") for lease of products. The lease term has been considered as the entire tenure of the agreement. The lessee has an option to purchase the assets at expiry of the agreement.

A finance lease receivable at an amount equal to the net investment in the lease represented by discounted value of recovery fee and is recorded in the balance sheet with a corresponding credit to statement of profit and loss as revenue from sale of products. The undiscounted value of such lease receivable, though, credited as revenue, but will be billed and collected from customer over the period of lease term. Interest income on such finance lease receivable is recognized over the life of the lease.

Operating lease

The Company leases out its products and investment property. The Company has classified these leases as operating leases, because they do not transfer substantially all of the risks and rewards incidental to the ownership of the assets. Rental income recognised by the Company during the year ended 31 March 2023 was R 1,145.76 lakhs (March 31, 2022: R 1,415.52 lakhs). These lease terms are on work order basis and are in short term in nature.

Segment information

The Company has presented segment information in the consolidated financial statements. Accordingly, in terms of paragraph 4 of Ind AS 108 ''Operating Segments'', no disclosures related to segments are presented in these standalone financial statements.

Revenue from operations

a) Disaggregation of revenue from contracts with customers

In the following table, revenue from contracts with customers is disaggregated by major products and timing of revenue recognition. The Company has performed a disaggregated analysis of revenues considering the nature, amount, timing and uncertainty. The table also includes a reconciliation of the disaggregated revenue with the Company''s reportable segments. Invoices raised for credit sales are usually payable within 30 days.

Additional regulatory information pursuant to the requirement in Division ii of Schedule iii to the Companies Act 2013

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(ii) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

iii) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(iv) The Company has complied with the number of layers prescribed under the Companies Act, 2013.

(v) The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year..

(vi) The Company has not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

(vii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

(viii) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.

(ix) The Company does not have any charges or satisfaction of charges which is yet to be registered with Registrar of Companies beyond the statutory period.

(x) The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(xi) The Company has not granted any loans to the promoters, directors, Key Managerial Person''s and the related parties (as

defined under Companies Act, 2013), either severally or jointly with any other person which are repayable on demand or without specifying any terms or period of repayments as at March 31, 2023 (as at March 31, 2022: Nil).

(xii) The Group (as per the provisions of the Core Investment Companies (Reserve Bank) Directions, 2016) does not have Core Investment Company (CIC).

For the year ended March 31, 2023 the quarterly returns or statements of current assets filed by the Company with banks are not in agreement with the books of accounts.

In the current year, management has identified certain prior period errors in classification of property, plant and equipment, right-of-use assets, investments, other current financial assets, other tax assets (Current and non-current), loans, other current assets, borrowings, trade payables, other current financial liabilities, other expenses and impairment losses on financial assets in the audited financial statements for the year ended March 31, 2022. These errors have been corrected by restating each of the affected financial statements line items as at March 31, 2022 and as at April 1, 2021 in accordance with Ind AS 8 "Accounting Policies, Changes in Accounting Estimates and Errors". The following table summarises the impacts of the correction of error on the standalone financial statements:


Mar 31, 2022

d) During the financial year 2021-22, the Qualified Institutions Placement Committee ("QIP Committee") has in its meeting held on September 24, 2021 has approved the allotment of 56,00,000 Equity Shares of face value of '' 2 each to eligible qualified institutional buyers at the issue price of '' 242 per Equity Shares (including a premium of '' 240 per Equity Share) against the Floor Price of '' 254.55 per Equity Shares , aggregating to '' 1,35,52,00,000 pursuant to the issue in accordance with the SEBI ICDR Regulations. Pursuant to the allotment of such Equity Shares , the paid-up equity share capital of the Company stands increased from '' 22.70 crore, comprising of 11,34,83,196 Equity Shares to '' 23.82 crore, comprising of 11,90,83,196 Equity Shares.

e) During the financial year 2019-20 pursuant to the provisions of Sections 68, 69, 70 and all other applicable provisions of the Companies Act, 2013, the provisions of the SEBI (Buy Back of Securities) Regulations, 2018, Article 62 of the Articles of Association of the Company and pursuant to the resolutions passed by the Board of Directors of the Company at their meeting held on May 16, 2019, the Company has bought back 38,39,804 No. of Equity shares of '' 2 each in electronic form.

f) Rights, preferences and restrictions attached to equity shares

The equity shares of the company, having par value of '' 2/- per share rank pari passu in all respects including voting rights and entitlement to dividend.

Nature and purpose of other reserves

a) General reserve

It is the portion of the net profit transferred to general reserve before declaring dividend pursuant to the earlier provisions of Companies Act, 1956. Mandatory transfer to general reserve is not required under the Companies Act, 2013. The amount previously transfered to General Reserve can be utilised in accordance with the specific requirements of the Companies Act 2013.

b) Capital redemption reserve

It is created on redemption of preference shares and buyback of equity shares.

c) Securities premium

Amount received on issue of shares in excess of the par value has been classified as Securities premium.

d) Retained Earnings

Retained earnings are profits of the Company net of adjustments on account of transfer to General Reserve, dividend or other distribution or transactions with shareholders.

a) There have been no breach of covenants mentioned in the loan agreements during the reporting period.

b) The Company has repaid its borrowings of '' 3,446.80 lakhs out of the proceeds of Qualified Institutional Placement (QIP).

c) Cash credit and buyers credit facilities are secured by way of hypothecation of the Company''s entire inventory and such other movables including book-debts, bills whether documentary or clean, outstanding monies, receivables, both present & future and Plant & Machinery on pari passu basis carrying interest ranging from 6.5% - 7.5%. The loan is repayable on demand.

d) The Company has borrowings from banks and financial institutions on the basis of security of current assets. The Company has complied with the requirement of filing of monthly/quarterly returns/statements of current assets with the banks or financial institutions, as applicable, and these returns were in agreement with the books of accounts for the year ended March 31, 2022 and March 31, 2021.

e) As on the Balance sheet date there is no default in repayment of loans and interest.

f) The borrowings obtained by the company from banks have been applied for the purposes for which such loans were taken. In respect of the term loans which were taken in the previous year, those were applied in the respective year for the purpose for which the loans were obtained.

Pursuant to the Taxation Law (Amendment) Ordinance, 2019 ("Ordinance") issued by Ministry of Law and Justice (Legislative Department) on 20th September 2019 effective from 01st April 2019, domestic companies have a non-reversible option to pay Corporate income tax rate at 22% plus applicable surcharge and cess ("New tax rate") subject to certain conditions. Based on the assessment, the Company has decided to opt for the New tax rate i.e. 25.168%

The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied which was applied while calculating the defined benefit obligation liability recognised in the balance sheet.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to prior period.

C) Defined contribution plans

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Provident Fund and Employee State Insurance Scheme which are defined contribution plans. The Company has no obligations other than to make the specified contributions. The contributions are charged to the statement of profit and loss as they accrue.

Valuation process and technique used to determine fair value

The fair value of investments in mutual fund units is based on the net asset value (NAV) as stated by the issuers of these mutual fund units in the published statement as at the Balance Sheet date.

C) Financial Risk Management

The company''s activities expose it to credit risk, market risk and liquidity risk. The company''s board of directors has overall responsibility for the establishment and oversight of the company''s risk management framework. This note explains the source of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements.

C.1) Credit risk

Credit risk arises from the possibility that counter party may not be able to settle their obligations as agreed. To manage this, the company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of account receivables. Individual risk limits are set accordingly. The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an on-going basis throughout each reporting period. To assess whether there is a significant increase in credit risk the company compares the risk of default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. The company considers reasonable and supportive forward-looking information.

Expected credit losses for financial assets other than trade receivables

Financial assets for which loss allowance is measure using 12 months expected credit loss.

Credit risks related to balances of banks and financial institutions, cash & cash equivalents and deposits with banks are managed by the Company in accordance with the Company''s policy. Investments of surplus funds are made in bank deposits, debt mutual funds and other risk free securities having good credit ratings. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments. The Compnay''s maximum exposure to credit risk for the components of the balance sheet at March 31, 2022 is the carrying amounts.

Expected credit losses for trade receivables under simplified approach

Financial assets for which loss allowance is measured using lifetime expected credit loss as per simplified approach.

Credit risks related to receivables is managed by each business unit subject to the Company''s policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored.

An impairment analysis is performed at each reporting date on trade receivables by using lifetime expected credit losses as per simplified approach wherein the weighted average loss rates are analysed from the historical trend of defaults relating to each business segment. Such provision matrix has been considered to recognize lifetime expected credit losses on trade receivables (other than those where defaults criteria are met).

The Company evaluates the concentration of risk with respect to trade receivables as low, since its customers are from various industries, jurisdictions and operate in independent markets. Trade receivables and other financial assets are written off when there is no reasonable expectation of recovery.

C.2) Liquidity Risk

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate liquidity risk management framework for the management of the Company''s short-term, medium-term and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserve, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

C.3) Market Risk

The Company is not an active investor in equity market. Further the treasury activities, focused on managing investments in debt instruments, are centralized and administered under a set of approved policies and procedures guided by the tenets of liquidity, safety and returns. This ensures that investments are only made within acceptable risk parameters after due evaluation.

The Company''s investments are predominantly held in fixed deposits and debt mutual funds. Mark to market movements in respect of the Company''s investments that are held at amortised cost are temporary and get recouped through fixed coupon accruals. Fixed deposits are held with highly rated banks and have a short tenure and are not subject to interest rate volatility.

The Company also invests in mutual fund schemes of leading fund. Such investments are susceptible to market price risk that arise mainly from changes in interest rate which may impact the return and value of such investments. However, given the relatively short tenure of underlying portfolio of the mutual fund scheme in which the Company has invested, such price risk is not significant.

Foreign currency risk

The Company undertakes transactions denominated in foreign currency (mainly US Dollar and Euro) which are subject to the risk of exchange rate fluctuations. Considering the low volume of foreign currency transactions, the Company''s exposure to foreign currency risk is limited hence the Company does not use any derivative instruments to manage its exposure.

C.4) Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of change in market interest is not material relating to the financial liabilities. The Company''s borrowing outstanding as at March 31, 2022 comprise of short term working capital facilities from various banks.

C.5) Risk due to outbreak of COVID 19 pandemic

The outbreak of COVID 19 pandemic globally and in India has severely impacted businesses and economies. There has been disruption to regular business operations due to the measures taken to curb the impact of the pandemic. The Company''s plants, warehouses and offices were shut post announcement of nationwide lockdown. Most of the operations have resumed post lifting of lockdown. The compay has considered external and internal information in assessing the impact of COVID 19 on various elements of its financial statements, including recoverability of its assets as at the Balance Sheet date and observed that there is no significant impact on its financial statements.

32. Capital Management

The Company''s capital management objectives are:

• To ensure the company''s ability to continue as going concern

• To provide an adequate return to shareholders

The Company monitors capital on the basis of carrying amount of equity less cash and cash equivalents as presented on the face of balance sheet.

Management assesses the Company''s capital requirements in order to maintain an efficient overall financing structure while avoiding excessive leverage. This takes into account the subordination levels of the Company''s various classes of debt. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, buy, back of shares, issue of new shares.

(b) Proposed Dividends on equity shares:

Final Dividend recommended by the board of directors for the year ended March 31, 2022''0.60 per fully paid equity share of '' 2 each (March 31, 2021: '' 0.50 per fully paid equity share of '' 2 each) subject to approval of shareholders in the ensuing annual general meeting and are not recognised as liability as at reporting date.

36. Qualified institutional placement (QIP)

During the year ended March 31, 2022, the Company had issued 56,00,000 nos. equity shares of '' 2/- each fully paid up at '' 242/- per share (including securities premium of '' 240/- per share) to qualified institutional buyers on Sep 24, 2021 pursuant to provisions of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended (the "SEBI ICDR Regulations"), including Regulation 180 (1)(b), and subject to the memorandum of association and the articles of association of the Company and pursuant to the resolutions of the Board of Directors of the Company dated July 31, 2021 authorizing Qualified Institutions Placement Committee ("QIP Committee"), the special resolution dated September 3, 2021, passed by the shareholders of the Company and Section 42 and Section 62 of the Companies Act, 2013, as amended and in-principle approvals granted by BSE Limited and the National Stock Exchange of India Limited ("Stock Exchanges")

Expenses incurred in relation to QIP paid/provided for amounting to '' 378.13 Lakhs has been adjusted from Securities Premium Account and the utilisation out of such net amount of '' 13,173.87 Lakhs till March 31, 2022 is given below. The balance amount of QIP proceeds remains invested in Bonds, Debentures, Mutual Funds and Term Deposits with banks.

37. Leases

Effective April 1, 2019, the Company adopted Ind AS 116 "Leases" and applied the standard to all lease contracts existing on April 1, 2019 using the modified retrospective method. Consequently, the Company recorded the lease liability at the present value of the remaining lease payments discounted at the incremental borrowing rate as on the date of transition and has measured right-of-use (ROU) asset at an amount equal to lease liability adjusted for any related prepaid and accrued lease payments previously recognised.

The Company applied the available practical expedients, wherein it :

(a) Applied a single discount rate to a portfolio of leases of similar assets in similar economic environment with a similar end date.

(b) Applied the exemption not to recognize Right-of-Use assets and liabilities for leases with less than 12 months of lease term on the date of initial application.

(c) Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application.

(d) Applied the practical expedient by not reassessing whether a contract is, or contains, a lease at the date of initial application. Instead applied the standards only to contracts that were previously identified as leases under Ind AS 17.

(e) Used hindsight in determining the lease term where the contract contained options to extend or terminate the lease The carrying value of Right of Use assets and the movements thereof during the year ended March 31, 2022 :

Additional regulatory information required by Schedule III of Companies Act, 2013

(i) Details of Benami property : No proceedings have been initiated or are pending against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.

(ii) Utilisation of borrowed funds and share premium : The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall.

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries

(iii) Compliance with number of layers of companies: The Company has complied with the number of layers prescribed under the Companies Act, 2013.

(iv) Compliance with approved scheme(s) of arrangements: The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

(v) Undisclosed income: There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

(vi) Details of crypto currency or virtual currency: The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

(vii) Valuation of PP&E, intangible asset and investment property : The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.

(viii) Satisfaction of charges : The Company does not have any charges or satisfaction of charges which is yet to be registered with Registrar of Companies beyond the statutory period.

(ix) Wilful defaulter : The Company has not been declared wilful defaulter by any bank or financial institution or other lender or government or any government authority.

(x) The Company has not granted any loans to the promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013), either severally or jointly with any other person which are repayable on demand or without specifying any terms or period of repayments as at March 31, 2022 (as at March 31, 2021: Nil).

45. Previous year figures have been re-grouped/reclassified wherever necessary, to conform to current year''s classification.


Mar 31, 2018

(i) Leasing arrangements

Certain investment properties are leased to tenants under long-term operating leases with rentals payable monthly. All the lease are cancellable at the option of lessee, hence there is no lease disclosure as required by Ind AS 17 "Leases".

Estimation of fair value

The company obtains valuation for its investment property. The best evidence of fair value is current prices in an active market for similar proprties, which is considered as fair value of investment properties.

In case of valuation of land & building current prices in an active market for similar properties of the same area and localities have been taken. The rates of which are based on verbal enquiries from the property dealers of the area and localities.

a) Rights, preferences and restrictions attached to equity shares

The equity shares of the company, having par value of Rs. 2/- per share rank pari passu in all respects including voting rights and entitlement to dividend.

Nature and purpose of other reserves

b) General reserve

The Company has transferred a porti on of the net profit before declaring dividend to general reserve pursuant to the earlier provisions of Companies Act, 1956. Mandatory transfer to general reserve is not required under the Companies Act, 2013.

c) Capital redemption reserve

This reserve is created on redemption of preference shares, out of current year profits.

d) Capital reserve

This is created out of the profit on amalgamation of entities and it is not available for the distribution to the shareholders.

e) Security premium reserve

Amount received on issue of shares in excess of the par value has been classified as Security premium reserve.

Provision for warranty

The company gives warranties on certain products and undertake to repair or replace them, if they fails to perform satisfactorily during the free warranty period. Such provisions represents the amount of the expected cost of meeting the obligations of such rectification/ replacement. The timing of the outflow is expected to be within the period of one to two years. The provision is based on estimates made from historical warranty data associated with similar products and services. The company expect to incur the related expenditures over the next year.

1. Employee Benefits

A) Gratuity

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees'' last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service.

The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied which was applied while calculating the defined benefit obligation liability recognised in the balance sheet.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to prior period.

B) Compensated absences (unfunded)

The leave obligations cover the Company''s liability for sick and earned leaves. The Company does not have an unconditional right to defer settlement for the obligation shown as current provision balance above. However based on past experience, the Company does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months, therefore based on the independent actuarial report, only a certain amount of provisions has been recognised in the statement of profit and loss.

C) Defined contribution plans

The Company makes contributi ons, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Provident Fund and Employee State Insurance Scheme which are defined contribution plans. The Company has no obligations other than to make the specified contributions. The contributions are charged to the statement of profit and loss as they accrue.

D) Other employee benefits

The Company has taken an Insurance Policy for medical benefits in respect of its working employees. The Insurance Policy for on-roll employees is partially funded by the Company.

2. Financial Instruments

A) Fair Value Hierarchy

The fair value of financial Instruments as referred to in note (A) above has been classified into three category depending on the inputs used in valuation technique. The hierarchy gives the highest priority to quoted price in active markets for identical assets or liabilities [Level 1 measurements] and lowest priority to unobservable inputs [Level 3 measurements].

The categories used are as follows:

Level 1: Quoted prices for identical instruments in an active market.

Level 2: Directly (i.e. as prices) or indirectly (i.e. derived from prices) observable market inputs, other than Level 1 inputs and Level 3: Inputs which are not based on observable market data (unobservable inputs).

Valuation process and technique used to determine fair value

The fair value of investments in mutual fund units is based on the net asset value (NAV) as stated by the issuers of these mutual fund units in the published statement as at the Balance Sheet date.

B) Financial Risk Management

The company''s activities expose it to market risk, liquidity risk and credit risk. The company''s board of directors has overall responsibility for the establishment and oversight of the company''s risk management framework. This note explains the source of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements.

B.1) Credit risk

Credit risk arises from the possibility that counter party may not be able to settle their obligations as agreed. To manage this, the company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of account receivables. Individual risk limits are set accordingly.

The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an on-going basis throughout each reporting period. To assess whether there is a significant increase in credit risk the company compares the risk of default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. The company considers reasonable and supportive forward-looking information.

Expected credit losses for financial assets other than trade receivables

Since the company deals with only high rated banks and financial institutions, credit risk in respect of cash & cash equivalents, bank balances and bank deposits is evaluated as very low. In respect of advances and security deposits also credit risk is considered low because the company is in possession of underlying asset.

Expected credit losses for trade receivables under simplified approach

The company recognize lifetime expected credit losses on trade receivables using a simplified approach, wherein Company has defined percentage of provision by analysing historical trend of default relevant to each business segment based on the criteria defined above and such provision percentage determined have been considered to recognize life time expected credit losses on trade receivables (other than those where default criteria are met).

B.2) Liquidity Risk

Ulti mate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate liquidity risk management framework for the management of the Company''s short-term, medium-term and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserve, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

B.3) Market Risk

The Company is not an active investor in equity market. Further the treasury activities, focused on managing investments in debt instruments, are centralized and administered under a set of approved policies and procedures guided by the tenets of liquidity, safety and returns. This ensures that investments are only made within acceptable risk parameters after due evaluation.

The Company''s investments are predominantly held in fixed deposits and debt mutual funds. Mark to market movements in respect of the Company''s investments that are held at amortised cost are temporary and get recouped through fixed coupon accruals. Fixed deposits are held with highly rated banks and have a short tenure and are not subject to interest rate volatility.

The Company also invests in mutual fund schemes of leading fund. Such investments are susceptible to market price risk that arise mainly from changes in interest rate which may impact the return and value of such investments. However, given the relatively short tenure of underlying portfolio of the mutual fund scheme in which the Company has invested, such price risk is not significant.

Foreign currency risk

The Company undertakes transactions denominated in foreign currency (mainly US Dollar and Euro) which are subject to the risk of exchange rate fluctuations. Considering the low volume of foreign currency transactions, the Company''s exposure to foreign currency risk is limited and the Company hence does not use any derivative instruments to manage its exposure.

B.4) Interest Rate Risk

There is no material interest risk relating to the Company''s financial liabilities.

3. Capital Management

The Company''s capital management objectives are:

- To ensure the companies ability to continue as going concern

- To provide an adequate return to shareholders

The Company monitors capital on the basis of carrying amount of equity less cash and cash equivalents as presented on the face of balance sheet.

Management assesses the Company''s capital requirements in order to maintain an efficient overall financing structure while avoiding excessive leverage. This takes into account the subordination levels of the Company''s various classes of debt. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

(i) Dividends not recognised at the end of the reporting period

In addition to the above dividends, since year end the directors have recommended the payment ofa final dividend of? 0.50/- per fully paid equity share (March 31, 2017 - '' 0.30/- per share). This proposed dividend is subject to the approval of shareholders in the ensuing Annual General Meeting.

4. Contingent liabilities and Commitments

Notes:

i) The amount indicated as contingent liability or claim against the company, reflects only the basic value. Any interest, penalty or legal cost is not considered.

ii) It is not practicable for the company to estimate the timings and amount of cash flows, if any, in respect of the above pending resolution of the respective proceedings.

(a) Non-cancellable operating leases

The company leases Immovable property under non-cancellable operati ng leases expiring in next five years. The leases have varying terms, escalation clauses and renewal rights. On renewal, the terms of the leases are renegotiated.

5. Segment information

The company''s operating segments are established on the basis of those componets of the company which are evaluted regularly by the executive committee in deciding how to allocate resources and in assessing performances. The company has four (4) operating and reporting segments as given below:

i) Cranes

ii) Construction Equipment

iii) Material Handling

iv) Agri Equipment

Segment revenue, segment results, segment assets and segment liabiliti es includes the respective amount identifiable for each operating segment.

The company is mainly engaged in the business in India and exports are not material. Hence in the context of Ind AS 108 it is considered the only reportable segment.

6. First time adoption of Ind AS and transition to Ind AS

These are the Company''s first financial statements prepared in accordance with Ind AS.

The accounting policies set out in note 1 have been applied in preparing the financial statements for the year ended March 31, 2018, the comparative information presented in these financial statements for the year ended March 31, 2017 and in the preparation of an opening Ind AS balance sheet at April 1, 2016 (the company''s date of transition). In preparing its opening Ind AS balance sheet, the company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP).

An explanation of how the transition from previous GAAP to Ind AS has affected the company''s financial position, financial performance and cash flows is set out in the following tables and notes.

Exemptions and exceptions availed

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

A. Ind AS optional exemptions

(i) Deemed cost

Ind AS 101 permits a first-time adopter may elect to measure an item of property, plant and equipment at the date of transition to Ind AS at its fair value and use that fair value as its deemed cost at that date. Accordingly, the Company has elected to measure certain items of freehold land, building and plant & machinery at their fair value and considered as deemed cost at the date of transition and to measure remaining of its Land, Building and Plant & Machinery at their previous GAAP carrying value. The impact on fair valuation of such assets on the date of transition from previous GAAP is Rs. 4,052.82 Lakhs. The impact due to retrospective application of Ind AS 16 ''Property, plant and equipment'' on the remaining assets on the date of transition from previous GAAP is Rs. 347.99 Lakhs.

(ii) Designation of previously recognised financial instruments

Ind AS 101 allows an entity to designate investments in equity instruments at FVOCI on the basis of the facts and circumstances at the date of transition to Ind AS. The company has elected to apply this exemption for its investment in equity investments.

(iii) Leases

Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected to be not material. The company has elected to apply this exemption for such contracts/arrangements.

(iv) Long-term foreign currency monetary items

Ind AS 101 includes an optional exemption that allows a first-time adopter to continue the above accounting treatment in respect of the long-term foreign currency monetary items recognised in the financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period. The company has elected to apply this exemption.

B. Ind AS mandatory exceptions

(i) Estimates

An entity''s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. Ind AS estimates as at April 1, 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

- Investment in equity instruments carried at FVOCI;

- Impairment of financial assets based on expected credit loss model.

(ii) Classification and measurement of financial assets and liabilities

The classification and measurement of financial assets will be made considering whether the conditions as per Ind AS 109 are met based on facts and circumstances existing at the date of transition.

Financial assets can be measured using effective interest method by assessing its contractual cash flow characteristics only on the basis of facts and circumstances existing at the date of transition and if it is impracticable to assess the use of effective interest method, fair value of financial asset at the date of transition shall be the new carrying amount of that asset. The measurement exemption applies for financial liabilities as well.

(iii) Impairment of financial assets

At the date of transition to Ind AS, determine whether there has been a significant increase in credit risk since the initial recognition of a financial instrument would require undue cost or effort, the Company has recognised a loss allowance at an amount equal to lifetime expected credit losses at each reporting date until that financial instrument is derecognised.

Notes to first-time adoption:

Note - 7 - Revaluation of property, Plant and equipment

The Company has elected to measure certain items of freehold land, building and plant & machinery at their fair value and considered as deemed cost at the date of transition. The impact on fair valuation of such assets on the date of transition from previous GAAP is Rs. 4,052.82 Lakhs.

Note - 8 -Foreign Exchange Fluctuation

Under previous GAAP, exchange difference arising on reporting of "Long Term Foreign Currency Monetary Item (LTFCMI)" in so far as they relate to acquisition of capital assets are added to or deducted from the cost of the asset and shall be depreciated over the useful life of that asset. However as per Ind AS no such relaxation is provided and therefore exchange differences are to be taken to opening retained earning.

Note - 9 - Preference share capital classified as debt

Under previous GAAP, preference share capital was considered as equity, however because of specific nature of preference share capital, these are considered as borrowing under Ind AS.

Note - 10 - Derecognition of Proposed Dividend & Tax thereon

Under the previous GAAP dividend proposed by the directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend were recognised as liability. Under Ind AS such dividends are recognised when the same are approved by the shareholders in general meeting. Accordingly, the liability for proposed dividend included under provision has been reversed with corresponding adjustment to retained earnings.

Note - 11 - Provision for Expected credit loss

Under previous GAAP, provision for doubtful debts was recognised based on the estimate of the outcome and of the financial effect of contingencies determined by the management of the company. This judgement was based on the consideration of information available upto the date on which the financial statements were approved and included a review of events occurring after the balance sheet date.

Under Ind AS, a loss allowance for expected credit losses is recognised on financial assets carried at amortised cost. Expected loss on individually significant receivables is assessed when they are past due and based on company''s historical counterparty default rate and forecast of macro-economic factors. Other receivables have been segmented by reference to the industry of the counterparty and other shared credit risk characteristics to evaluate the expected credit loss. The expected credit loss estimate is then based on recent historical counterparty default rates for each identified segment.

As a result, the allowance for doubtful debts increased by Rs. 55.48 Lakhs as at March 31, 2017 (Rs. 33.69 Lakhs as at April 1, 2016) Consequently, the total equity decreased by the same amount.

Note - 12 - Deferral of Revenue

Under previous GAAP, the amount of revenue was usually determined at consideration received or receivable for the product or service explicitly specified in the contract between the parties.

Under Ind AS where the sale transaction of the company include separately identifiable components, such as after sales service and extended warranties, it is necessary to apply the recognition criteria to those separately identifiable components in order to reflect the substance of the transaction. Revenue from each component so identified is only recognised when such goods are sold or services are rendered. Accordingly, revenue attributable to specifically identifiable components where services are pending to be rendered has been deferred.

Note - 13 - Deferred tax impact on Ind AS adjustments

Some of the transition adjustments are temporary in nature and therefore becomes the reason for deferment of tax liability. These items/ transition adjustments led to recognition of deferred taxes on temporary difference.

Note - 14 - Remeasurment of defined benefit obligation

Under the previous GAAP, these measurements were forming part of the profit or loss for the year. Under Ind AS, measurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit or loss.

Note 15 - Investment property

Under the previous GAAP, investment properties were presented as part of non-current investments. Under Ind AS, investment properties are required to be separately presented on the face of the balance sheet. There is no impact on the total equity or profit as a result of this adjustment.

Note 16 - Loan to subsidiary recognised at amortised cost using notional rate of Interest

Under previous GAAP, interest free loan was recognised at cost. However under Ind AS the interest free loan is amortised, using notional rate of interest.


Mar 31, 2017

A) Rights, preferences and restrictions attached to the Equity Shares

The Equity Shares of the Company, having par value of Rs. 2/- per share, rank pari passu in all respects including voting rights and entitlements dividend.

B) (i) 1,83,83,000 Equity Shares of Rs. 2/- each were alloted pursuant to the scheme of amalgamation without payment being received in cash.

(ii) 3,02,19,380 Preference Shares(NCPS) of Rs. 10/- each were alloted pursuant to the scheme of amalgamation without payment being received in cash, having Dividend rate of 8% and having no right to participate and vote.

C) The Company shall have an option to redeem the NCPS either wholly or partly by giving not less than one month notice to the NCPS holders any time after one year, but before twenty years from the date of issue.

Terms of Repayment

(i) Rupee Loan from ICICI Bank Ltd.- Repayable in 118 equated monthly instalments,(including interest @9.55%) starting from 10.04.2012.

(ii) Rupee Loan from Axis Bank Ltd. - Repayable in 12 quarterly instalments of Rs. 2.08 crores each, last being Rs. 2.12 crores starting after one year from the date of first disbursement and carry an interest of 10.25% p.a.

(iii) Rupee Loan from Kotak Mahindra Bank Ltd. - Repayable in 60 equated monthly instalments,(including interest @ 9%) starting from 01.04.2017.

(iv) Commercial Equipment Loan from ICICI Bank Ltd. & HDFC Bank Ltd.- Repayable in equated monthly instalments.

(v) Vehicle loan from HDFC Bank Ltd. / Daimler Financial Services India Pvt. Ltd. / Kotak Mahindra Prime Ltd. - Repayable in equated monthly instalments.

Security Offered

(i) Exclusive charge on the assets financed out of this loan.

(ii) (a) Exclusive charge on the assets financed out of this loan.

(b) Exclusive charge by way of equitable mortgage over factory land situated at Kashipur, Uttarakhand.

(iii) (a) Exclusive charge by way of equitable mortage over property at Plant IV, Dudhola Link Road, Palwal; and (b) Subservient charge on all existing and future current assets of the Company.

(iv) Exclusive hypothecation on the Commercial Equipment financed out of these loans.

(v) Exclusive Hypothecation on the Vehicle financed out of this loan.

All Credit Facilities from Banks are secured by way of hypothecation of the Company’s entire inventory and such other movables including book-debts, bills whether documentary or clean, outstanding monies, receivables, both present & future and Plant & Machinery (except plant and machinery financed out of rupee term loan of Axis Bank) on pari passu basis and First charge by the way of equitable mortgage of two of the properties situated at Mumbai on pari passu basis/exclusive basis.

1(A) Other Notes

1 The Board of Director’s have recommended final dividend of Rs 0.30/- (15%) per Equity Share and 8% dividend on Preference Shares, subject to approval of the Shareholders in the forthcoming Annual General Meeting.

2 The Ministry of Science & Technology (Department of Scientific and Industrial Research) vide its letter no. TU/IV-RD/3115/2016 dated 27.04.2016 has renewed the recognition upto 31.03.2019 to our In-House R&D centres. The expenditure incurred towards; In-House Research & Development activity is as under:

3 Miscellaneous Expenditure to the extent not written off, includes Life Time Club Membership, to be amortized over a period of ten years, commencing from 2007-08, in accordance with Accounting Standard 26 issued by The Institute of Chartered Accountants of India.

4 The information as required to be disclosed under “The Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006)”, has been determined to the extent such parties have been identified on the basis of information available with the Company during the year 2016-17. During the year no interest is paid to any such enterprises.

8. As per Accounting Standard 18, “Related Party Disclosure” issued by The Institute of Chartered Accountants of India, the disclosures of transactions with the Related Parties a s defined in the Accounting Standard are given below:

(a) Associate Companies/ Entities

Namo Metals

VMS Equipment Pvt Ltd.

(b) Subsidiary Companies

FRESTED Limited, Cyprus - Wholly Owned Subsidiary SC FORMASA, Romania - FellowSubsidiary

(c) Key Management Personnel

Sh. Vijay Agarwal Smt. Mona Agarwal Sh. Sorab Agarwal Smt. Surbhi Garg

(d) Relatives of Key Management Personnel and Enterprises, over which Relatives of Key Management Personnel exercise significant influence - NIL

2. The Company has entered into agreements in the nature of Lease/Leave and Licence agreement with different Lessors/Licensors for the purpose of establishment of office premises/ residential accommodations. These are generally in nature of operating Lease/leave and Licence and disclosure required as per Accounting Standard-19 issued by The Institute of Chartered Accountants of India with regard to the above is as under:

Liability in respect of unavailed privileged leave was hitherto valued at the salary rates prevailing on the balance sheet date. During the year, the company has valued the compensated absences, specified in AS 15 (Revised) on actuarial basis. Further para 132 of AS 15 (Revised 2005) does not require any specific disclosure except where the expense resulting from compensated absences is of such size, nature of incidence that its disclosure is relevant under other accounting standards. In the opinion of the management, the expense resulting from compensated absences is not significant and hence no disclosures are prepared under various paragraphs of AS 15 (Revised 2005).

3 Expenditure related to Corporate Social Responsibility as per Section 135 of the Companies Act,2013 read with Schedule VII thereof Rs. 100.00 Lakh (previous year Rs. 156.72 Lakh).

4 Balance of some of Sundry Debtors, Sundry Creditors and Loans & Advances are subject to confirmation and reconciliation by the parties and adjustment, if any, required on reconciliation, will be done in the year in which the same is reconciled. Further, Management does not expect any material difference in the financial Statements for the year.

5 The Cash Flow Statement has been prepared under the “Indirect Method” set out in Accounting Standard (AS-3) issued by The Institute of Chartered Accountants of India.

6 Previous years figures have been regrouped to make them comparable with current year figures wherever necessary.

7 Note 1 to 27 form integral part of the accounts and are duly authenticated.


Mar 31, 2016

1. Additional Notes to the Financial Statements

27(A) Significant Accounting Policies

1. System of Accounting:

The Financial Statement has been prepared to comply with the mandatory Accounting Standards issued by The Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 2013.The financial statements are prepared on going concern assumptions and under the historical cost convention on accrual basis except in case of assets for which revaluation is carried out. The accounting policies have been consistently applied by the company unless otherwise stated.

2. Fixed Assets:

All Fixed Assets are valued at historical costs less accumulated depreciation. Cost of assets comprise of purchase price and any attributable cost of bringing the asset to its working condition except in case of assets for which revaluation is carried out.

3. Depreciation:

Depreciation is systematically allocated over the useful life of an asset as specified in part C of schedule II of Companies Act, 2013.

4. Investments:

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost or fair value determined on an individual investment basis.

Long-term investments are carried at cost. However, provision made for diminution in the value of the investments is made to recognize a decline other than temporary.

5. Inventories:

(a) Raw Material- Lower of cost or net realizable value. However, materials and other items held for use in the production of finished goods are not written down below cost, if finished product in which they will be incorporated are expected to be sold at or above cost. Cost is determined on weighted average basis.

(b) Work in Progress and Finished Goods - Lower of cost or net realizable value. Cost includes direct materials, labour and proportion of manufacturing overheads based on normal operating capacity. Cost is determined on a weighted average basis. Net Realizable value is the estimated selling price in ordinary course of business, less estimated costs necessary to make the sale.

6. Revenue Recognition:

Revenue is recognized to the extent it is probable that the economic benefits will flow to the company and revenue can be reliably measured.

(a) Sale of Goods: Revenue in respect of sale of products is recognized at the time of dispatch of the goods, when significant risks and rewards of ownership of the goods is passed to the buyers.

(b) Rendering of Services: Revenue from service is recognized when the service is performed, as per the terms of contract, and the performance of service is regarding as achieved when no significant uncertainty exists regarding the amount of consideration that will be derived from rendering the services.

(c) Interest: Revenue is recognized on a time proportion basis taking into account the amount outstanding and rate applicable.

(d) Insurance Claims: Receivable on account of insurance are accounted for to the extent the company is reasonably certain of their ultimate collection.

(e) Export Benefits: Export benefits under Duty Drawback Scheme are accounted for in the year of Export of Goods.

7. Foreign Currency Transactions:

a) Initial recognition: Foreign currency transactions are recorded in the reporting currency, by applying the foreign currency amount the exchange rate prevailing at the date of transaction.

b) Conversion: Foreign currency monetary items are reported using the closing rate, Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in foreign currency are reported using the exchange rates that existed when the value is determined.

c) Exchange Differences: Exchange differences arising on reporting monetary items of company at the rate different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arises. However, exchange difference arising on reporting of “Long Term Foreign Currency Monetary Item (LTFCMI)" in so far as they relate to acquisition of capital assets are added to or deducted from the cost of the asset and shall be depreciated over the useful life of that asset and in other cases, such difference are accumulated in "Foreign Currency Monetary Item Translation Difference Account (FCMITDA)" and amortized over the balance period of such long term asset/liability.

8. Benefits to Employees:

a) Short-term Employee Benefit:

All employees benefits payable with in twelve month of rendering of the service are classified as short-term benefits. Such benefits include salaries, wages, bonus, short-term compensated absences, awards, exgratia etc. and are recognized in the period in which the employee renders the related service.

b) Post Employment benefits:

(i) Defined Contribution Plans:

The Company''s State government Provident Fund Scheme and Employee State Insurance Scheme are defined contribution plans. The contribution paid/ payable under the scheme is recognized during the period in which the employee renders the related service.

(ii) Defined Benefits Plans:

The employee''s gratuity fund scheme, long term compensated absences are company''s defined benefit plans. The present value of the obligation under such defined benefit plans are determined based on the actuarial valuation on the date of the balance sheet. Gratuity Liability is funded through a Group Gratuity Scheme with Life Insurance Corporation of India wherein contributions are made and charged to revenue on annual basis.

9. Accounting for Taxes on Income:

Tax expense comprises of current and deferred tax. Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act,1961. Deferred income tax reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years and has been accounted as per provisions of the Accounting Standard-22 issued by The Institute of Chartered Accountants of India. In accordance with the guidance note issued by ICAI, the company will review the outstanding MAT credit entitlements at each balance sheet date and write down the carrying amount of MAT Credit entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified period.

10. Impairment of Assets:

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized, wherever carrying amount of an asset exceeds its recoverable value. The recoverable value is greater of the asset''s net selling price or value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at weighted average cost of capital.

After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.

11. Borrowing Costs:

Borrowing costs that are attributable to the acquisition and construction of an assets that necessarily takes substantial period of time to get ready for its intended use are capitalized as part of cost of respective assets. All other borrowing costs are recognized as expenses in the year in which they are incurred. Borrowing Cost consists of interest and other costs that an entity incurs in connection with the borrowing of funds.

12. Expenditure during Construction Period:

In case of new projects/substantial expansions of existing factories, expenditure incurred, including trial production expenses net of revenue earned and attributable interest and financing costs prior to commencement of commercial production are capitalized.

13. Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognized for liabilities that can be measured only by using a substantial degree of estimation, if

a) the Company has a present obligation as a result of a past event;

b) a probable outflow of resources is expected to settle the obligation and;

c) the amount of obligation can be reliably estimated;

Reimbursements expected in respect of expenditure required to settle a provision is recognized only when it is virtually certain that the reimbursement will be received.

Contingent Liability is disclosed in case of

a) a present obligation arising from the past event, when it is not probable that an outflow of resources will be required to settle the obligation;

b) a possible obligation, of which the probability of outflow of resources is remote.

Contingent Assets are neither recognized nor disclosed.

Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.

27(B) Other Notes

11 The Board of Directors have declared an interim dividend of Rs. 0.20/- (10%) per Equity Share, subject to approval of the Share holders in the forthcoming Annual General Meeting.

12 The Ministry of Science & Technology (Department of Scientific and Industrial Research) vide its letter no. TU/IV-RD/3115/2016 dated 27.04.2016 has renewed the recognition up to 31.03.2019 to our In-House R&D centre’s. The expenditure incurred towards In-House Research & Development activity is as under:

13 Miscellaneous Expenditure to the extent not written off, includes Life Time Club Membership, to be amortized over a period of ten years, commencing from 2007-08, in accordance with Accounting Standard 26 issued by The Institute of Chartered Accountants of India.

14 In absence of any information received from the vendors with regards to their registration (filing of Memorandum) under ''The Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006)", liability at the close of the year cannot be ascertained and during the year no interest is paid to any such enterprises.

*The Company has been advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision is considered necessary.

Capital Commitment: Estimated amount of contracts pending to be executed on capital account and not provided for Rs. 133.75 lacs (Previous Year Rs. 177.27 lacs).

15. Remuneration paid to Whole-time Directors:

* The above mentioned remuneration is in excess of maximum permissible remuneration as determined under Section 197 of the Companies Act, 2013 read with Schedule of the Companies Act, 2013. The Company has since received approval of the Central Government for payment of above remuneration to Mr. Vijay Agarwal, Chairman & Managing Director and Mrs. Mona Agarwal, Whole-time Director up to 30"'' Sept, 2015 and for remaining period. The company has applied to the Central Government on 21" March, 2016 & 22"d March, 2016 respectively for necessary Central Government approval. Management has taken confirmation from both the directors that they shall refund the excess remuneration in the event of refusal of such approval.

16. Disclosure of amalgamation in terms of accounting standard 14 issued by Institute of Chartered Accountants of India

Pursuant to scheme of amalgamation (''the scheme'') of ACETC Rentals Private Limited (''the amalgamating company'') with the Action Construction Equipment Limited (''the company'') under Section 391 and 394 of the Companies Act, 1956 as sanctioned by Hon''ble High Court of Punjab & Haryana vide its order CP No. 128 of 2015 dated 17th November, 2015, entire business and all assets and liabilities of the amalgamating company were transferred and got vested in the Company effective from 01st April, 2014, accordingly the scheme has been given effect to in these financial results.

As per Accounting Standard 14, "Accounting for Amalgamations" issued by the Institute of Chartered Accountants of India, the additional disclosures required to be made in the first financial statements following the amalgamation are as follows:

(a) Company has issued and allotted to the members of the amalgamating company 1168 fully paid up equity shares of Rs. 2 each for every 100 fully paid up equity shares of Rs 10/- each held by the Members whose names appear in the Register of Members as on the record date. Thus a total of 1,83,83,000 new equity shares of Rs. 2 each and 3,02,19,380 - 8% cumulative nonparticipating redeemable preference shares of Rs. 10 each have been issued to the shareholders of the amalgamating company to effect the amalgamation.

(c) The figures for the current year includes figures of the amalgamating company and therefore up to that extent current year figures are not comparable with the previous year.

17. As per Accounting Standard 18, "Related Party Disclosure" issued by The Institute of Chartered Accountants of India, the disclosures of transactions with the Related Parties as defined in the Accounting Standard are given below:

a. Associate Companies / Entities

Namo Metals

VMS Equipment Pvt. Ltd.

b. Subsidiary Companies

FRESTED Limited, Cyprus - Wholly Owned Subsidiary SC FORMA SA, Romania - Fellow Subsidiary

c. Key Management Personnel

Sh. Vijay Agarwal Smt. Mona Agarwal Sh. Sorab Agarwal Smt. Surbhi Garg

d. Relatives of Key Management Personnel and Enterprises, over which Relatives of Key Management Personnel exercise significant influence

N.A.

18. The Company has entered into agreements in the nature of Lease/ Leave and License agreement with different Lesser/ Licensors for the purpose of establishment of office premises/ residential accommodations. These are generally in nature of operating Lease/leave and License and disclosure required as per Accounting Standard-19 issued by The Institute of Chartered Accountants of India with regard to the above is as under-

b) There are no transactions in the nature of Sub Lease.

c) Payments recognized in the Statement of Profit & Loss for the year ended 31st March, 2016 is Rs. 160.90 Lacs (P.Y. Rs. 149.05 Lacs).

19. Disclosure pursuant to Accounting Standard -15 (Revised), issued by The Institute of Chartered Accountants of India EMPLOYEE BENEFITS

e) Actuarial Assumption

a) Discounted Rate 7.85% p.a.

b) Mortality Rate IAL (2006-08) Ultimate

c) Withdrawal Rate 1% to 3% depending on Age.

d) Salary Escalation 11.00%

e) Retirement Age 58

Liability in respect of unveiled privileged leave was hitherto valued at the salary rates prevailing on the balance sheet date. During the year, the company has valued the compensated absences, specified in AS 15 (Revised) on actuarial basis. Further para 132 of AS 15 (Revised 2005) does not require any specific disclosure except where the expense resulting from compensated absences is of such size, nature of incidence that its disclosure is relevant under other accounting standards. In the opinion of the management, the expense resulting from compensated absences is not significant and hence no disclosures are prepared under various paragraphs of AS 15 (Revised 2005).

20 Expenditure related to Corporate Social Responsibility as per Section 135 of the Companies Act,2013 read with Schedule VII thereof Rs. 156.72 Lacs (previous year Rs. 125.50 Lacs).

21 Balance of some of Sundry Debtors, Sundry Creditors and Loans & Advances are subject to confirmation and reconciliation by the parties and adjustment, if any, required on reconciliation, will be done in the year in which the same is reconciled. Further, Management does not expect any material difference in the financial Statements for the year.

22 The Cash Flow Statement has been prepared under the "Indirect Method" set out in Accounting Standard (AS-3) issued by The Institute of Chartered Accountants of India.

23 The figures for the current year includes figures of ACE TC Rentals Pvt. Ltd. which is amalgamated with the company w.e.f. from 1st April, 2014 as per the scheme of amalgamation (''the scheme'') sanctioned by the Hon''ble High Court of Punjab Haryana and are therefore up to that extent current year figures are not comparable with those of previous year.

24 Note 1 to27form integral part of the accounts and are duly authenticated.


Mar 31, 2015

Terms of Repayment

a) Foreign Currency Loan - Repayable in 16 equal instalments of USD 156250 & USD 125000 each, starting after 15 months from the date of disbursement i.e. 30th June 2011 & 1st Sep 2011 respectively with interest rate of USD LIBOR 2.65%

b) i. Rupee Loan from ICICI Bank Ltd. - Repayable in 118 equated monthly instalments, (including interest @ 10.20%) starting from 10.04.2012

i. Rupee Loan from Axis Bank Ltd. - Repayable in 12 quarterly instalments of Rs. 2.08 crores each, last being Rs. 2.12 crores starting after one year from the date of first disbursement and carry an interest of 10.90% p .a.

ii. Commercial Equipment Loan from ICICI & FIDFC Bank - Repayable in 47 equated monthly instalments (including interest @ 10.05%)

Security Offered

a) i) Exclusive charge on assets financed out of this Loan.

ii) Exclusive charge on Immovable assets at industrial unit at Plant IV, Prithla Dhatir Road, Village Dudholla, Palwal.

b) i) Exclusive charge on theassetsfinanced out of this loan.

ii) a) Exclusive charge on theassetsfinanced out of this loan.

b) Exclusive charge by way of e quitable mortgage over factory land situated at Kashipur, Uttarakhand.

ii) Exclusive hypothecation on the Commercial Equipment financed out of these loan.

All Credit Facilities from Banks are secured by way of hypothecation of the Company's entire inventory and such other movable including book-debts, bills whether documentary or clean, outstanding monies, receivables, both present & future and Plant & Machinery (Except Plant & Machinery financed out of foreign currency loan and rupee term loan) on pari passu basis and First charge by the way of equitable mortgage of property situated at Mumbai on pari passu basis.

2 Merger

ACET C Rentals Pvt. Limited is proposed to b e m erged with the Company with effect from April 1 s t, 2014 pursuant to a sc heme of amalgamation ("these heme"). These heme has been filed in the Hi gh Court for the S tates of Punjab and H aryana and H on'able High Court has directed to c onvenethe m eeting of the m embers of the Company and unsecured c reditors having n et b alance of more than Rs. 1 lacs on July 4th, 2015. Accordingly, these financial s tatements do n ot include the assets and liabilities of ACET C Rentals Pvt. Limited as at M arch 31st, 2015 and the results of operations for they ear ended M arch 31st, 2015.

3(A) Other Notes 1 The Board of Director's has recommended a final dividend of Rs. 0.20/- (10%) per Equity Share, subject to approval of the Share Holders in the forthcoming Annual General Meeting.

4 Miscellaneous Expenditure to the extent not written off, includes Life Time Club Membership, to be amortized over a period of ten years, commencing from 2007-08, in accordance with Accounting Standard 26 issued by The Institute of Chartered Accountants of India.

5 In absence of any information received from the vendors with regards to their registration (filing of Memorandum) under "The Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006)", liability at the close of the year cannot be ascertained and during they ear no in terest is paid to any such enterprises.

6. Contingent Liabilities, not provided for:

Rs. in Lacs

Particulars Year Ended Year Ended 31st March, 2015 31st March, 2014

Bank Guarantees 1,557.75 1,220.95

Letter of Credits 783.32 1,900.71

Claim against the Company, not acknowledge as Debts* 442.24 558.98

Sales Tax, Excise & Income Tax Matters, pending before 2,922.28 5,363.61

Assessing / Appellate Authorities*

Total 5,705.59 9,044.25

*The Company has been advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision is considered necessary.

Capital Commitment: Estimated amount of contracts pending to be executed on capital account and not provided for Rs. 177.27 lacs (PreviousYear Rs.703.71 lacs).

b) The above mentioned remuneration of Rs. 455.80 Lacs is in excess of Maximum permissible remuneration as determined under Schedule V of the Companies Act, 2013. However the company has filed an application with the Central Government on dated 3rd February 2015 for grant of approval for payment of same remuneration as paid in the past to Mr. VijayAgarwal, Chairman & Managing Director and Mrs. Mona Agarwal, Whole time Director of the Company. Pending approval from the government, management has taken confirmation from both the directors that they shall refund the excess remuneration in the event of refusal of such approval.

7. As per Accounting Standard 18, "Related Party Disclosure" issued by The Institute of Chartered Accountants of India, the disclosures of transactions with the Related Parties as defined in the Accounting Standard are given below:

a. Associate Companies / Entities

ACE TC Rentals Pvt. Ltd.

Namo Matels

VMS Holdings Pvt. Ltd.

VMS Equipment

b. Subsidiary Companies

FRESTED Limited, Cyprus - Wholly Owned Subsidiary SC FORMA SA, Romania - Fellow Subsidiary

Action Developers Ltd., India - Wholly Owned Subsidiary (Ceased to exist on 23-02-2015)

c. Key Management Personnel

Sh. Vijay Agarwal Smt. Mona Agarwal Sh. Sorab Agarwal Smt. Surbhi Garg

d. Relatives of Key Management Personnel and Enterprises, over which Relatives of Key Management Personnel exercise significant influence

N.A.

8. The Company has entered into agreements in the nature of Lease/ Leave and Licence agreement with different Lessors/ Licensors for the purpose of establishment of office premises/ residential accommodations. These are generally in nature of operating Lease/leave and Licence and disclosure required as per Accounting Standard-19 issued by The Institute of Chartered Accountants of India with reaard to the above is as under-

b) There are no transactions in the nature of Sub Lease.

c) Payments recognised in the Statement of Profit & Loss for the year ended 31st March, 2015 is Rs. 149.05 Lacs (P.Y Rs. 165.15 Lacs).

9. Disclosure pursuant to Accounting Standard -15 (Revised), issued by The Institute of Chartered Accountants of India

10 Expenditure related to Corporate Social Responsibility as per Section 135 of the Companies Act, 2013 read with ScheduleVII thereof: Rs 125.50 Lacs.

11 Balance of some of Sundry Debtors, Sundry Creditors and Loans & Advances are subject to confirmation and reconciliation by the parties and adjustment, if any, required on reconciliation, will be done in the year in which the same is reconciled. Further, M anagement does not expect any material difference in the financial S tatements for they ear.

12 The Cash Flow Statement has been prepared under the "Indirect Method" set out in Accounting Standard (AS-3) issued by The Institute of Chartered Accountants of India.

13 The Trade Receivables includes an amount of Rs. 649.43 lacs (Previous year Rs. 444.28 lacs) due from Companies in which Directors are interested.

14 Previous years figures have been regrouped to make them comparable with currentyear figures wherever necessary.

15 Note 1 to 27 form integral part of the accounts and are duly authenticated.


Mar 31, 2014

1 The Board of Director''s has recommended a final dividend of Rs. 0.10/- (5%) per Equity Share, subject to approval of the Share Holders in the forthcoming Annual General Meeting.

2. Miscellaneous Expense to the extent not written off, includes Life Time Club Membership, to be amortized over a period often years, commencing from 2007-08, in accordance with Accounting Standard 26 issued by The Institute of Chartered Accountants of India.

3. In absence of any information received from the vendors with regards to their registration (filing of Memorandum) under "The Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006)", liability at the close of the year cannot be ascertained and during the year no interest is paid to any such enterprises.

4. Contingent Liabilities, not provided for:

Rs. in Lacs

Particulars Year Ended Year Ended 31st March, 2014 31st March, 2013

Bank Guarantees 1,220.95 898.31

Letter of Credits 1,900.71 1,897.24

Claim against the Company, not acknowledge as Debts 558.98 697.07

Sales Tax, Excise & Income Tax Matters, pending before 5,363.61 3,980.85 Assessing / Appellate Authorities

Total 9,044.25 7,473.47

Capital Commitment: Estimated amount of contracts pending to be executed on capital account and not provided for Rs.703.71 lacs (Previous Year Rs.619 lacs).

b) The above mentioned expenses for Rs.455.80 lac (Previous Year Rs. 455.82 lacs) is towards director remuneration . This amount is in excess of permissible remuneration determined under section XIII of the Companies Act, 1956. Management had filed an application with the Central Government on 14th March 2013 for approval of payment of the salary for paying same remuneration as paid in the past to Mr. Vjay Agarwal, Chairman & Managing Director and Mrs. Mona Agarwal, Whole time Director of the Company. Company has received approval for Mr Vijay Agarwal vide SRN No. B70175369/2013-CL-VII dated 21.11.2013 under section 310 for payment of increased remuneration of Rs 235.06 lacs for financial year 2012-13 and Rs 267.40 lacs for financial year 2013-14 & approval the payment to Mrs. Mona Agarwal vide SRN No. B70093851/2013-CL-VII dated 06-11 -2013 for payment of increased remuneration of Rs 135.96 lacs per annum for a period of 2 (two) years w.e.f. 01.04.2012 to 31.03.2014. Company has recovered Rs. 32.34 lacs in FY 2013-14 (against total Director remuneration of Rs. 455.80 lacs of current year) which was excess paid in F.Y 2012-13 from permissible limit of Rs. 235.06 lacs from Mr. Vijay Agarwal.

5. As per Accounting Standard 18, "Related Party Disclosure "issued by The Institute of Chartered Accountants of India, the disclosures of transactions with the Related Parties as defined in the Accounting Standard are given below.

a. Associate Companies / Entities

ACE TC Rentals Pvt. Ltd.

Namo Metals

VMS Holdings Pvt. Ltd.

VMS Equipment

b. Subsidiary Companies

FRESTED Limited, Cyprus - Wholly Owned Subsidiary

SC FORMA SA, Romania - Fellow Subsidiary

Action Developers Ltd., India - Wholly Owned Subsidiary

c. Key Management Personnel

Sh. Vijay Agarwal

Smt. Mona Agarwal

Sh. Sorab Agarwal

Smt. Surbhi Garg

d. Relatives of Key Management Personnel and Enterprises, over which Relatives of Key Management Personnel exercise significant influence

N.A.

6. Balance of some of Sundry Debtors, Sundry Creditors and Loans & Advances are subject to confirmation and reconciliation by the parties and adjustment, if any, required on reconciliation, will be done in the year in which the same is reconciled. Further, Management does not expect any material difference in the financial Statements for theyear.

7. The Cash Flow Statement has been prepared under the "Indirect Method" set out in Accounting Standard (AS-3) issued by The Institute of Chartered Accountants of India.

8. Previous year’s figures have been regrouped to make them comparable with current year figures wherever necessary.

9. Note 1 to 27 form integral part of the accounts and are duly authenticated.


Mar 31, 2013

1. The Board of Director''s has recommended a dividend of Rs.0.20/- (10%) per Equity Share, subject to approval of the Share Holdersinthe forthcoming Annual General Meeting.

2. Outof Rs. 5,980 Lacs raised through IPO, all IPO proceeds have been utilisedby company as at 31st Mar 2013.

3. The Ministry of Science & Technology (Department of Scientific and Industrial Research) vide its letter no. TU/IVRD/3115/2010 dated 09.03.2011 and TU/IV-RD/3115/2012 dated 25.04.2012 has accorded the recognition as In- House R&D centres in the previous years. The expenditure incurred towards In-House Research & Development activity is as under:

4. Consequent upon the sanctioning of Scheme of Amalgamation of Ace Steel Fab (P) Ltd w.e.f 1st Oct 2011 with the Company, figures of the company after the date of amalgamation also includes the figures of Ace Steel Fab Pvt Limited and therefore the figures for the financial year 2012-13 are not comparable with the corresponding year.

5. Miscellaneous Expense to the extent not written off, includes Life Time Club Membership, to be amortized over a period of ten years, commencing from 2007-08, in accordance with Accounting Standard 26 issued by The institute of Chartered Accountantsof India.

6. In absence of any information received from the vendors with regards to their registration (filing of Memorandum) under "The Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006)", liability at the close of the year cannot be ascertained and during the year nointerestis paidtoany such enterprises.

7. Contingent Liabilities, not provided for: Rs. in Lacs

Particulars Year Ended Year Ended 31st March, 2013 31st March, 2012

Bank Guarantees 898.31 799.98

Letter of Credits 1,897.24 2,614.34

Claim against the Company, not acknowledge as Debts 697.07 478.19

Sales Tax, Excise & Income Tax Matters, pending before 3,980.85 3,201.49

Assessing / Appellate Authorities

Total 7,473.47 7,094.00

Capital Commitment: Estimated amount of contracts pending to be executed on capital account and not provided for is Rs. 619 lacsinthe current year.

8. As per Accounting Standard 18, "Related Party Disclosure "issued by The Institute of Chartered Accountants of India, the disclosuresof transactions with the Related Partiesasdefinedinthe Accounting Standard are given below.

a. Associate Companies / Entities

ACE Steelfab Pvt. Ltd. (Upto 30.09.2011)

ACE TC Rentals Pvt. Ltd.

Namo Metals

VMS Holdings Pvt. Ltd.

VMS Equipment

b. Subsidiary Companies

FRESTED Limited, Cyprus - Wholly Owned Subsidiary

SC FORMA SA, Romania - Fellow Subsidiary

Action Developers Ltd., India - Wholly Owned Subsidiary

c. Key Management Personnel

Sh. Vijay Agarwal Smt. Mona Agarwal Sh. Sorab Agarwal Smt. Surbhi Garg

d. Relatives of Key Management Personnel and Enterprises, over which Relatives of Key Management Personnel exercise significant influence N.A.

9. Balance of some of Sundry Debtors, Sundry Creditors and Loans & Advances are subject to confirmation and reconciliation by the parties and adjustment, if any, required on reconciliation, will be done in the year in which the same is reconciled. Further, Management does not expect any material difference in the Financial Statements for the year.

10. The Cash Flow Statement has been prepared under the "Indirect Method" set out in Accounting Standard (AS-3) issued by The Institute ofChartered AccountantsofIndia.

11. Previous years figures have been regrouped tomake them comparable with current year figures wherever necessary.

12. Notes1 to27 form integral part ofthe accounts and are duly authenticated.


Mar 31, 2012

Terms of Repayment

a) Foreign Currency Loan - Repayable in 16 equal Instalments starting after 15 months from the date of disbursement.

b) Rupee Loan - Repayable in 120 equated monthly instalments, including interest.

Security Offered

a) (i) Exclusive Charge on assets financed out of this Loan.

(ii) Exclusive Charge on Immovable assets at industrial unit at Plant IV, Prithla Dhatir Road, Village Dudholla, Palwal.

b) Exclusive Charge on the assets financed out of this Loan.

All Credit Facilities from Banks are secured by way of hypothecation of the Company's entire inventory and such other movable including book-debts, bills whether documentary or clean, outstanding monies, receivables, both present & future and Plant & Machinery (Except Plant & Machinery financed out of Foreign Currency Loan) on pari passu basis and First charge by the way of equitable mortgage of property situated at Bazpur on pari passu basis.

Notes:

1) Addition to gross block during the current financial year, of Rs. 9,161.74 Lacs, includes assets of Rs. 1,425.42 Lacs purchased in the Scheme of amalgamation.

2) During the financial year ended 31st March 2011, Land & Building was revalued by Rs. 5,697.05 Lacs on the basis of valuation carried out by an approved valuer.

1. The revised Schedule VI has become effective from 1stApril, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.

2. The Board of Director's has recommended a dividend of Rs.0.20 (10%) per equity share, subject to approval of share holders.

3. Pursuant to the order No.9885 dated 21st July 2012 passed by Hon'ble High Court of Delhi, M/s ACE SteelFab Pvt Ltd has merged with M/s Action Construction Equipment Limited w.e.f. 1st Oct, 2011.

As per Accounting Standard 14, "Accounting for Amalgamations" issued by The Institute of Chartered Accountants of India, the additional disclosures required to be made in the first financial statements following the amalgamation are as follows:

a) Company has issued and allotted to the members of ACE Steelfab Private Ltd 24.22 equity shares of Rs.2/-each at par for every 1 fully paid equity share of Rs.10 each held by the members whose names appear in the register of members as on the record date, or to such of their respective heirs, executors, administrators or other legal representatives or other successors in title as may be recognised by the board. Thus a total of 60,55,000 Equity shares has been issued to share holders of M/s ACE Steelfab Pvt Ltd to effect the amalgamation.

4. Out of Rs.5,980 Lacs raised through IPO, Rs.5,976 Lacs have been utilized till 31st March, 2012 and balance amount is lying unutilised & will be utilised as per amendments made to "Proposed Deployment of Funds" by the share holders of the Company in its Annual General Meeting held on 1st August, 2008. The Share holders of the Company has authorised the Board of Directors to utilise remaining IPO proceeds in the best interest of the Company.

5. During the current financial year Company has setup a dedicated R&D centre at Jajru Road and this is in addition to in- house R&D Centre already setup at Dhudhola Factory Premises. Both the R&D centres are recognised by the Ministry of Science & Technology (Department of Scientific and Industrial Research) vide its letter no.TU/IV-RD/3115/2010 dated 09.03.2011 and TU/IV-RD/3115/2012 dated 25.04.2012 respectively. The expenditure incurred towards In-House Research & Development activity is as under:

6. Miscellaneous Expense to the extent not written off, includes Life Time Club Membership, to be amortized over a period of ten years, commencing from 2007-08, in accordance with Accounting Standard 26 issued by The institute of Chartered Accountants of India.

7. In absence of any information received from the vendors with regards to their registration (filing of Memorandum) under "The Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006)", liability at the close of the year cannot be ascertained and during the year no interest is paid to any such enterprises.

8. Contingent Liabilities, not provided for:

Rs. in Lacs

Particulars Year Ended Year Ended 31st March 2012 31st March 2011

Bank Guarantees 799.98 385.02

Letter of Credits 2,614.34 3,073.97

Claim against the Company, not acknowledge as Debts 478.19 327.90

Sales Tax, Excise & Income Tax Matters, pending before 3,201.49 1,095.93 Assessing / Appellate Authorities

Total 7,094.00 4,882.82

9. As per Accounting Standard 18, "Related Party Disclosure "issued by The Institute of Chartered Accountants of India, the disclosures of transactions with the Related Parties as defined in the Accounting Standard are given below.

a. Associate Companies / Entities

ACE Steelfab Pvt. Ltd. (Upto 30.09.2011)

ACE TC Rentals Pvt. Ltd.

Namo Metals

VMS Holdings Pvt. Ltd.

b. Subsidiary Companies

FRESTED Limited, Cyprus - Wholly Owned Subsidiary

SC FORMA SA, Romania - Fellow Subsidiary

Action Developers Ltd., India - Wholly Owned Subsidiary

c. Key Management Personnel

Sh. Vijay Agarwal

Smt. Mona Agarwal

Sh. Sorab Agarwal

Smt. Surbhi Garg

d. Relatives of Key Management Personnel and Enterprises, over which Relatives of Key Management Personnel exercise significant influence

N.A.

10. Balance of some of Sundry Debtors, Sundry Creditors and Loans & Advances are subject to confirmation and reconciliation by the parties and adjustment, if any, required on reconciliation, will be done in the year in which the same is reconciled. Further, Management does not expect any material difference in the Financial Statements for the year.

11. The Cash Flow Statement has been prepared under the "Indirect Method" set out in Accounting Standard (AS-3) issued by The Institute of Chartered Accountants of India.

12. Notes 1 to 27 form integral part of the accounts and are duly authenticated.


Mar 31, 2011

1. Out of the Funds raised through IPO Rs. 5980 lac, Rs. 5976 lac (see annexure) have been utilized till 31st March, 2011 and balance amount is lying unutilised & will be utilised as per amendments made to "Proposed Deployment of Funds" by the shareholders of the Company in its Annual General Meeting held on 1st August, 2008. The Shareholders of the Company has authorised the Board of Directors to utilise remaining IPO proceeds in the best interest of the Company.

2. The Board of Director's has recommended a final dividend of Rs.1/- (50%) per Equity Share, subject to approval of the Share Holders. The Board has already declared an interim dividend of Rs.1/- (50%) per Equity Share thus, the total Dividend for the year 2010-11 would be Rs.2/- (100%) per Equity Share.

3. Miscellaneous Expense to the extent not written off, includes Life Time Club Membership, to be amortized over a period of ten years, commencing from 2007-08, in accordance with Accounting Standard 26 issued by The Institute of Chartered Accountants of India.

4. In absence of any information requested from the vendors with regards to their registration (filing of Memorandum) under "The Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006)", liability can not be ascertained at the close of the year and hence no disclosures have been made in this regards.

5. Contingent Liabilities, not provided for:

(Rs. in lacs)

Particulars 2010-11 2009-10

Bank Guarantees including Corporate Guarantees 385.02 571.53

Letter of Credits 3,073.97 1,382.49

Claim against the Company, not acknowledge as Debts 327.90 185.38

Sales Tax, Excise & Income Tax Matters, pending before 1,095.93 107.52 Assessing / Appellate Authorities

Total 4,882.82 2,246.92

6. All Credit Facilities from Banks are secured by way of hypothecation of the Company's entire stocks of raw materials, semi-finished and finished goods, consumable stores and spares and such other movable including book-debts, bills whether documentary or clean, outstanding monies, receivables, both present & future and Plant & Machinery on pari passu basis and First charge by way of equitable mortgage of property situated at Jajru Road. 25th Mile Stone, Delhi Mathura Road, Ballabhgarh, Haryana on pari passu basis.

7. Balance of some of Sundry Debtors, Sundry Creditors and Loans & Advances are subject to confirmation and reconciliation by the parties and adjustment, if any, required on reconciliation, will be done in the year in which the same is reconciled. Further, Management does not expect any material difference in the Financial Statements for the year.

8. The Cash Flow Statement has been prepared under the "Indirect Method" set out in Accounting Standard (AS-3) issued by The Institute of Chartered Accountants of India.

9. Previous years figures have been regrouped to make them comparable with current year figures wherever necessary.

10. Schedules 1 to 16 form integral part of the accounts and are duly authenticated.


Mar 31, 2010

1. Out of the Funds raised through IPO Rs. 5980 lac, Rs. 5976 lac (see annexure) have been utilized till 31st March, 2010 and balance amount is lying unutilised & will be utilised as per amendements made to "Proposed Deployment of Funds" by the shareholders of the Company in its Annual General Meeting held on 1st August, 2008. The Shareholders of the Company has authorised the Board of Directors to utilise remaining IPO proceeds in the best interest of the Company.

2. The Board of Directors, in its meeting held on 6th Apr10, has recommended interim dividend for FY. 2009-10 @Rs. 1/- per Equity Share of Rs. 2 each (50%).

3, Miscellaneous Expense to the extent not written off, includes Life Time Club Membership, being amortized over a period of ten years, commencing from 2007-08, in accordance with Accounting Standard 26 issued by The institute of Chartered Accountants of India.

4, In absence of any information requested from the vendors with regards to their registration (filing of Memorandum) under "The Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006)", liability can not be ascertained at the close of the year and hence no disclosures have been made in this regards.

5. Contingent Liabilities, not provided for: (Rs. in lac)

Particulars 2009-10 2008-09

Bank Guarantees including Corporate Guarantees 571.53 293.80

Letter of Credits 1,382.49 195.33

Claim against the Company, not acknowledge as Debts 185.38 148.43

Sales Tax, Excise & Income Tax Matters, pending before 107.52 28.33 Assessing / Appellate Authorities

2,246.92 665.89

6, As per Accounting Standard 18, "Related Party Disclosure "issued by The Institute of Chartered Accountants of India, the disclosures of transactions with the Related Parties as defined in the Accounting Standard are given below-

a. Associate Companies / Entities- ACE Steelfab Pvt. Ltd.

ACE TC Rentals Pvt. Ltd. Namo Metals

b. Subsidiary Companies. FRESTED Limited, Cyprus Wholly Owned Subsidiary SC FORMA SA, Romania

Fellow Subsidiary

Action Developers Ltd., India

Wholly Owned Subsidiary

c. Key Management Personnel- Sh. Vijay Agarwal

Smt. Mona Agarwal Sh. Sorab Agarwal Sh. VK Singh

d. Relatives of Key Management Personnel and Enterprises, over which Relatives of Key Management Personnel exercise significant influence- Smt. Surbhi Garg

7. The Company has entered into agreements in the nature of Lease/ Leave and Licence agreement with different Lessors/ Licensors for the purpose of establishment of office premises/ residential accomodations. These are generally in nature of operating Lease/leave and Licence and disclosure required as per Accounting Standard-19 issued by The, institute of Chartered Accountants of India with regard to the above is as under-

(a) Payment under Lease/Leave and License for period:

1. Not later than 1 year Rs. 6.51 lac

2. Later than 1 year, but not later than 5 years Rs.4.65 lac.

(b) There are no transactions in the nature of Sub Lease.

(c) Payments recognised in the profit and Loss Account for the year ended 31st March, 2010isRs.51.46lac.

Liability in respect of unavailed pnviledge leave was hitherto valued at the salary rates prevailing on the balance sheet date. During the year, the company has valued the compensated absences, specified in AS 15 (Revised) on acturial basis. Further para 132 of AS 15 (Revised 2005) does not require any specific disclosure except where the expense resulting from compensated absences is of such size, nature of incidence that its disclosure is relevant under other accounting standards. In the opinion of the management, the expense resulting from compensated absences is not significant and hence no disclosures are prepared under various paragraphs of AS 15 (Revised 2005).

8. All Credit Facilities from Banks are secured by way of hypothecation of the Companys entire stocks of raw materials, semi-finished and finished goods, consumable stores and spares and such other movable including book-debts, bills whether documentary or clean, outstanding monies, receivables, both present & future and Plant & Machinery on pari passu basis and First charge by way of equitable mortgage of property situated at Jajru Road. 25th Mile Stone, Delhi Mathura Road, Ballabhgarh, Haryana on pari passu basis.

9. Balance of some of Sundry Debtors, Sundry Creditors and Loans & Advances are subject to confirmation and reconciliation by the parties and adjustment, if any, required on reconciliation, will be done in the year in which the same is reconciled. Further, Management does not expect any material difference in the financial Statements for the year.

10. The Cash Flow Statement has been prepared under the "Indirect Method" set out in Accounting Standard (AS-3) issued by The Institute of Chartered Accountants of India.

11. Previous years figures have been regrouped to make them comparable with current year figures wherever necessary.

12. Schedules 1 to 16 form integral part of the accounts and are duly authenticated.

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