We have audited the attached Balance Sheet of Action Construction
Equipment Limited as at 31st March, 2011, the Profit and Loss Account
and Cash Flow Statement of the Company for the year ended on that date
annexed thereto. These financial statements are the responsibility of
the Company management. Our responsibility is to express an opinion on
these Financial Statements based on our audit.
We have conducted our audit in accordance with Auditing Standards
generally accepted in India. These Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
As required by the statement on the Companies (Auditors Report) order,
2003 issued by the Central Government of India in terms of sub-section
(4A) of Section 227 of the Companies Act, 1956, we enclose in the
Annexure, a statement on the matters specified in paragraphs 4 and 5 of
the said Order.
Further to our comments in the Annexure referred to above, we report
that:
a. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
b. In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
c. The Balance Sheet and Profit & Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
d. In our opinion, the Balance Sheet, Profit and Loss Account and the
Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956;
e. On the basis of written declaration received from the Directors, as
on 31st March, 2011, and taken on record by the Board of Directors we
report that none of the Directors is disqualified as on 31st March,
2011, from being appointed as a director in terms of clause (g) of
sub-section(l) of section 274 of the Companies Act, 1956;
f. In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements read
together with the significant accounting policies and notes thereon
give the information required by the Companies Act, 1956, in the manner
so required and give a true and fair view in conformity with the
accounting principles generally accepted in India;
i. In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2011,
ii. In the case of the Profit & Loss Account, of the profit for the
year ended on that date and,
iii. In the case of the Cash Flow Statement, of the cash flow of the
company for the year ended on that date.
Annexure to the Auditors'' Report
As required by the Companies (Auditor''s report) Order, 2004 issued by
the central Government of India in terms of section 227(4-A) of the
Companies Act, 1956, we report that:
(I) In respect of fixed assets:
(A) The company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets on the
basis of available information.
(B) As explained to us, all the fixed assets have been physically
verified by the management during the year at reasonable intervals,
which in our opinion, is reasonable having regard to the size of the
company and the nature of assets. No material discrepancies were
noticed on such physical verification.
(C) There was sale of Plant & Machineries worth Rs.46.13 lac, Building
worth Rs.111.48 lac & Vehicles Worth Rs.59.61 lac during the year.
Though, it is not substantial compare with total value of the fixed
assets
(II) In respect of its inventories:
(A) As explained to us, the inventory has been physically verified by
the management at regular intervals during the year.
(B) In our opinion and according to the information and explanations
given to us, the procedures followed by the management for physical
verification of inventory are reasonable and adequate in relation to
size of the company and nature of its business,
(C) In our opinion and according to the information and explanations
given to us and on the basis of our examination of the records of
inventory, the Company has maintained proper records of inventory. And
there were no material discrepancies noticed on physical verification
of inventory as compared to the book records.
(III) The Company has neither granted nor taken any loans secured or
unsecured , to or from companies, firms or other parties covered in the
register maintained under section 301 of the companies act,1956
(IV) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedure commensurate
with the size of the company and nature of its business with regard to
purchase of inventory and fixed assets and with regard for the sale of
goods and services. During the course of audit, no major weakness has
been noticed in the internal control.
(V) On the basis of our examination of the books of accounts, the
transaction in respect of any party during the financial year that
needs to be entered in the register pursuant to the section 301 of the
companies act, 1956 have so been entered.
In Our opinion and according to the information and explanations given
to us, the transaction made in pursuance of contracts or arrangements
entered in the register maintained under section 301, in respect of any
party ,during the year have been made at the prices which are
reasonable having regard to prevailing market price at the relevant
time
(VI) In our opinion and according to the information and explanations
given to us, the Company has not accepted deposits from the public and
therefore, the provisions of Section 58A and 58AA of the Companies Act,
1956 and Rules made there under are not applicable to the Company.
(VII) In our opinion, the company has an internal audit system
commensurate with its size and nature of its business.
(VIII) In respect of statutory dues:
(A) According to the information and explanations
given to us, the company was generally regular in depositing dues in
respect of Employees Provident Fund, Employees State Insurance
Annexure to the Auditors'' Report (Contd.)
Fund, Income Tax, and other statutory dues with the appropriate
authority during the year.
(B) According to the records examined by us and the information and
explanations given to us, there are no disputed amounts due in respect
of income tax, wealth tax, sales tax, excise duty, Employees provident
fund, Employee state insurance fund and other statutory dues at the end
of the year.
(IX) The Company does not have accumulated losses as at the end of the
year and the Company has not incurred cash losses during current and
the immediately preceding financial year.
(X) Based on our audit procedures and on the basis of information and
explanations given by the management, Company has not defaulted in the
repayment of dues to banks, financial institutions and Debentures
holders during the year.
(XI) In our opinion and according to information and explanation given
to us, no loans and advances have been granted by the company on the
basis of security by way of pledge of shares, debentures and other
security.
(XII) In our opinion the company is not a Chit Fund, Nidhi or Mutual
Benefit Fund/Society. Therefore, the provisions of clause 4(XIII) of
the CARO,2004 are not applicable to the company.
(XIII) The company is not dealing in or trading in shares, securities,
debentures and other investments. Accordingly, the provisions of
clause 4(xiv) of the order are not applicable.
(XIV) The company has not given guarantees for loans taken by other
from banks and financial institutions which are prima facie prejudicial
to the interest of the company.
(XV) According to the information & explanation given to us the Term
loan have been applied for the purpose for which obtained.
(XVI) The company has issued fifty lacs share warrants to Mrs. Mona
Agarwal (Promoter Director) against which amount to the extent of
Rupees Five crores eighteen lacs twelve thousand and five hundred only
has been received as share application money.
(XVII) The Clause 13 of the order is not applicable, as the company has
not issued any debentures during the year.
(XVIII) The Cost Records, as applicable , are being maintained by the
company.
(XIX) According to the information and explanations given to us , no
fraud on or by the company has been noticed or reported during the
year.
For Rajan Chhabra & Co.
Firm Registration No. 009520N
Chartered Accountants
(Rajan Chhabra)
Partner
Membership No.088276
Place: Faridabad
Dated: 30th May, 2011
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