The Members
 
 The Directors are pleased to present the 17th Annual report and Audited
 Statement of Accounts for the financial year ended 31st March, 2011
 
 FINANCIAL RESULTS
 
                                                        (Rs. in lacs) 
                                                             2009-10
                                                 2010-11
 
 Gross Turnover                                   70,759      43,783
 
 Excise Duty                                       2,111       1,071
 
 Net Turnover                                     68,648      42,712
 
 Other Income                                      1,390         687
 
 Total Income                                     70,038      43,399
 
 Profit before Depreciation 
 Interest and Tax                                  6,473       4,060
 
 Less:
 
 Depreciation                                        689         525
 
 Interest                                            352         258
 
 Provision for Taxation                            1,373         833
 
 Net Profit after Tax                              4,059       2,444
 
 Profit brought forward                            1,604       1,208
 
 Profit available for Appropriations               5,663       3,652
 
 Appropriations:
 
 Dividend (Interim & Final)                        1,858         899
 
 Tax on Dividend                                     308         149
 
 Transferred to General Reserve                    1,000       1,000
 
 Profit carried to Balance Sheet                   2,497       1,604
 
 FINANCIAL PERFORMANCE
 
 During the year the gross turnover of the Company has increased to Rs.
 70759 lacs from Rs. 43783 lacs for the year ending 31.3.2010,
 indicating a growth of 62% on year over year basis. The profit before
 tax has increased from Rs. 3277 Lacs for financial year ending
 31.3.2010 to Rs. 5432 Lacs for current financial year ending 31.3.2011,
 a growth of 66%.
 
 The growth momentum created in the company in financial year 2011 led
 to increase in the numbers for all product categories and the same
 shall be carried forward going ahead.  The company is focused on
 reducing its costs and increasing its market share in all the products.
 
 DIVIDEND
 
 During the current financial year, Directors had declared and
 distributed interim Dividend of 50 % i.e. Rs. 1 on equity shares of Rs.
 2 each, absorbing an aggregate amount of Rs. 929 lacs (excluding
 Dividend Tax of Rs.154 lacs). The Board has recommended a final
 Dividend of 50 % i.e. Rs. 1 on equity share of Rs. 2 each which will be
 paid after your approval at the ensuing Annual General Meeting. The
 final Dividend will absorb an aggregate amount of Rs. 929 lacs
 (excluding Dividend Tax of Rs. 154 lacs).
 
 Thus, the total dividend distributed for the year is 100%.
 
 CHANGE IN SHARE CAPITAL
 
 During the year the Authorised Share Capital of the Company was
 increased from Rs. 2000 lacs to Rs. 2400 lacs.
 
 PREFRENTIAL ALLOTMENT
 
 During the year the Company has issued 30 lacs equity shares on
 Preferential Allotment to Reliance Capital Limited.
 
 SHARE WARRANTS
 
 The Company has also issued 50 lacs convertible warrants to the
 promoters of the Company. The Company has received an aggregate sum of
 Rs. 518 lacs equivalent to 25% of the total subscription amount on the
 aforesaid warrants.
 
 MANAGEMENT DISCUSSION AND ANALYSIS
 
 The Management Discussion and Analysis of the financial condition and
 result of operations separately form part of this report
 
 SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS
 
 Your Company has a wholly owned overseas subsidiary (WOS) Company at
 Cyprus viz M/s FRESTED LIMITED, and through it, your Company acquired
 89.50% equity stake in a Romanian Company viz. SC FORMA SA, Romania.
 Your Company also has a Wholly-owned Subsidiary Company viz.  Action
 Developers Ltd. Therefore, in compliance of the Listing Agreement with
 the Stock Exchanges and Accounting Standard issued by The Institute of
 Chartered Accountants of India, your Company has consolidated the
 Accounts incorporating the Accounts of all these three Subsidiary
 Companies. The audited Consolidated Financial Statements together with
 Auditors'' Report thereon, form part of the Annual Report.
 
 Ministry of Company Affairs, Government of India, vide its Circular No.
 2/2011 dated 08th February, 2011 has exempted the Companies from
 attaching the Annual Report and other particulars of its Subsidiary
 Companies along with the Annual Report of the Company u/s 212 of the
 Companies Act, 1956, if certain conditions mentioned are fulfilled.
 Therefore, the said Reports of the above Subsidiary Companies are not
 attached here with. However, a statement giving certain information as
 required under the circular is placed along with the Consolidated
 Accounts.
 
 The Annual Accounts of the subsidiary companies and the related
 detailed information will be made available to the members of the
 holding and subsidiary Companies seeking such information at any point
 of time. The Annual Accounts of the Subsidiary Companies is also kept
 for inspection by any member at its Registered Office
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 Pursuant to the provisions of Section 217 (2AA) of the Companies Act,
 1956, your Directors hereby confirm that :
 
 I) That Directors have followed in the preparation of Annual Accounts,
 the applicable Accounting Standards with proper explanation relating to
 material departures if any;
 
 II) That the Directors had selected such accounting policies and
 applied them consistently and made judgments and estimates that are
 reasonable and prudent so as to give a true and fair view of the state
 of affairs of the Company at the end of the financial year and of the
 profit of the Company for the year under review;
 
 III) That the Directors had taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1956 for safeguarding the assets of
 the Company and for preventing and detecting fraud and other
 irregularities;
 
 IV) That the Directors had prepared the annual accounts on a going
 concern basis.
 
 DIRECTORS
 
 Shri Subhash Chandra Verma and Dr. Amar Singhal, Directors are liable
 to retire by rotation in ensuing Annual General Meeting and being
 eligible offer themselves for re- appointment. Your Directors recommend
 for their re- appointment. None of the Directors of your Company is
 disqualified as per provisions of Section 274(1) (g) of the Companies
 Act, 1956.
 
 INTER-SE RELATIONSHIP BETWEEN DIRECTORS
 
 As per latest amendment made in Clause 49 of the Listing Agreement,
 your Company has to report Inter-se relationship between the Directors
 in the Annual Report of the Company.  The following are the details of
 Inter-se relationship between the Directors:-
 
 Shri Vijay Agarwal, Chairman and Managing Director is husband of Smt.
 Mona Agarwal, Whole-time Director and Father of Shri. Sorab Agarwal,
 Executive Director of the Company.
 
 All other Directors of the Company, act in there Independent capacities
 and do not have any inter-se relationship among themselves.
 
 ADEQUACY OF INTERNAL CONTROL SYSTEMS
 
 The Company has well defined internal control system which aims at the
 protection of the Company''s resources, efficiency of operations,
 compliances with the legal obligations and company''s policies and
 procedures. In a phased manner, the internal audit function covers and
 reviews the internal controls and the procedures in all the plants and
 warehouses of the Company.
 
 AUDITORS
 
 The Auditors of the Company, M/s. Rajan Chhabra & Co., Chartered
 Accountants, will retire at the ensuing Annual General Meeting of the
 Company. They are eligible for re- appointment and have furnished a
 certificate to this effect that the proposed appointment, if made, will
 be in accordance with Section 224 (1B) of the Companies Act, 1956.
 
 AUDITORS'' OBSERVATION
 
 Observations of the Auditors, if any when read together with the
 relevant notes on accounts and accounting policies are self-explanatory
 and do not require any further comments.
 
 DEPOSITS
 
 Your Company has not accepted any public deposit during the year under
 review.
 
 QUALITY CERTIFICATION
 
 Your Company has got CE Certification for most of its manufactured
 products. After getting this Certification, products of your Company
 are being well accepted in the International Market. Your Company is
 already ISO 9001 certified Company by CVI (Conformity Verification
 International), which is internationally recognized for the production,
 quality control and other qualities. This ensures that its standards of
 design, development, procurement, manufacturing, testing, installation
 and product support meet the most stringent norms. The ISO
 Certification gives international recognition and will help the
 Company, to boost its export turnover.
 
 HUMAN RESOURCES
 
 In spite of a challenging year when demands of the products is
 increasing by more than 60 %, cordial industrial relations environment
 prevailed at all the manufacturing units of the Company during the
 year.
 
 PARTICULARS OF EMPLOYEES
 
 Any shareholder interested in obtaining a copy of statement of
 particulars of employees referred to in section 217(2A) of the
 Companies Act, 1956, may write to the Company Secretary at the
 Registered Office of the Company.
 
 HEALTH, SAFETY AND ENVIRONMENT PROTECTION
 
 The Company sustained its initiatives to maintain a pollution year
 environment, by elimination of waste, optimum utilization of power and
 preventive maintenance of equipments and machineries to keep them in
 good condition.  Safety and health of the people working in and around
 manufacturing facilities is top priority of the Company and we are
 committed to improving this performance year after year.
 
 CORPORATE SOCIAL RESPONSIBILITY
 
 Your Company is committed to the belief that it exists not just to run
 business and generate profits, but also to fulfill its duties as a
 responsible corporate citizen. At ACE, we define Corporate Social
 Responsibility as continuing commitment for operating the core
 business in a socially responsible way, complemented by investment in
 communities to produce an overall positive impact on the society. The
 focus areas of your Company''s CSR activities are: Environment
 Protection, Infrastructure, Planting trees and Health /Medical
 facilities.
 
 Your Company regularly conducts Yoga training program for its
 employees. Your Company is particularly cautious of the health of its
 employees and aims at providing good basic facilities and hygienic
 conditions to work for its employees.
 
 Your company believes that a cleaner environment maintained today by
 the Company would be a precious gift to the upcoming generation. Your
 Company believes in growing trees in the premises of the Company as
 well as in nearby localities, thus maintaining a balance between
 environment and corporate growth.
 
 CORPORATE GOVERNANCE
 
 Pursuant to Clause 49 of the Listing Agreement with the Stock
 Exchanges, Corporate Governance Certificate from practicing company
 secretary regarding compliance of conditions of Corporate Governance
 forms part of the Annual Report.
 
 RESEARCH AND DEVELOPMENT
 
 The Company is in continuous process of improving quality of its
 product. For that purpose, the Company has established an In-house
 Research and Development Centre, which continuously carries out
 Research and developments which can ultimately improve the quality of
 products, making them more economical, cost effective and user
 friendly.
 
 Your Company has received recognition for its In-house Research and
 Development Centre from Govt. of India. With this recognition, the
 Company will be entitled to avail various incentives and benefits
 (including income tax benefits) being provided by the Govt.
 
 PARTICULARS ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORBTION AND
 FOREIGN EXCHANGE EARNING AND OUTGO
 
 Information pursuant to Section 217 (1)(e) of the Companies Act, 1956
 read with companies (Disclosure of Particulars in the Report of the
 Board of Directors) Rules, 1988 is annexed and forms a part of this
 report.
 
 ACKNOWLEDGEMENT
 
 The Directors wish to place on record their sincere appreciation for
 the committed and dedicated services of the employees of the Company,
 who have ensured that the company continues to grow at a faster pace.
 The Board also wishes to thank Government of India, various State
 Governments and the Company''s Bankers for all the help and
 encouragement they extend to the Company. Your Directors deeply
 acknowledge the continued trust and confidence that the Shareholders,
 Customers, the Dealers and the Suppliers have placed in your Company.
 
                                   For and on behalf of the Board of
 
                                   Action Construction Equipment Ltd.
 
                                                       Vijay Agarwal
                                        Chairman & Managing Director
 
 Place: Ballabgarh
 Date: 30th May, 2011