Action Construction Equipment : Annual Report 2022-23 ACE

CONTENTS

Chairman's Speech	03
Management Discussion and Analysis Report	05
Board's Report with Annexures	15
Corporate Governance Report	71
Certificate regarding compliance of conditions of	92
Corporate Governance
Auditor's Report on Standalone Financial Statements	93
Standalone Balance Sheet	105
Standalone Statement of Profit and Loss	107
Standalone Cash Flow Statement	108
Notes to the Standalone Financial Statements	113
Auditor's Report on Consolidated Financial Statements	181
Consolidated Balance Sheet	189
Consolidated Statement of Profit and Loss	191
Consolidated Cash Flow Statement	193
Notes to the Consolidated Financial Statements	198
Notice to the Shareholders (29th AGM)	271

Annual Report 2022-23	1

Chairman's Speech

It brings me great pleasure to report that all of our business sectors had another successful year. The Financial year 2022-2023 turned out to be one of the best years for the Company, where we had record breaking profits.

The Company outperformed across all financial parameters by achieving its highest ever revenue and profit. At a consolidated level compared to FY22, the total Income grew by 34% to INR 2,201 Crores, EBITDA grew by 62% to INR 262 Crores and Profit after Tax grew by 65% to INR 173 Crores. Our EPS continues to increase year after year. The Company was also able to showcase volume and value growth and improve its balance sheet position further.

Building infrastructure and attracting investments will be the key focus areas for India over the next 25 years to emerge as a developed nation. The Union Government has made unprecedented investments in modern infrastructure in the last few years taking the country to new heights. Under Budget 2023-24, capital investment outlay for infrastructure is being increased by 33% to ` 10 lakh crore (US$ 122 billion), which would be 3.3% of GDP and almost three times the outlay in 2019-20. The quality of a country's infrastructure is a key determinant in shaping its economic trajectory.

The infrastructure, construction and the real estate markets saw significant growth in the past financial year. The outlook for all these industries seems strong due to the government's focus on these sectors and various schemes like the smart city project, PM Awas Yojana, PLI Scheme etc. which will act as growth drivers for these industries. The biggest push will come from the manufacturing growth driven by Make in India initiative supported by the China +1 strategy.

India aims to soon be one of the manufacturing hubs for the world. Building on the competitive advantage of a skilled workforce and lower cost of labor, the manufacturing sector is also witnessing an

increased inflow of capex and heightened M&A activity, leading to a surge in manufacturing output and resultant increased contribution to exports.

The agricultural sector forms the backbone of the country's economy and for India to grow to great heights it is imminent to continue supporting the Agri-sector. To further boost this sector the government has allocated INR 1.24 lakh crore to the Department of Agriculture, Cooperation and Farmers' Welfare in FY 24 Budget.

Since ACE has led the way in developing cutting-edge,top-tier equipment, the Company has been rewarded with a strong brand reputation and repeat business, which has led to a history of steady growth. Our major strength is our flexibility and agility to suit a wide range of industries for broad applications. Through our R&D, we are committed to offer our customers the newest technology and new products. All of our goods are designed to satisfy consumers through effective sales and product support.

Looking at the tremendous global opportunities, we have also strengthened our export arm and forayed into new territories with our tractors, cranes and construction equipment. We intend to enhance the quantum of our exports substantially as there is an increasing demand for our products, which are being accepted by the global customers. Increased Export Revenue coupled with opportunities in Defence Sector, and increasing utilisation levels of Construction Equipment and Agri business are taking the Company forward.

We continue to be very confident about the Company's medium to long-term prospects and believe that the foundation is firmly in place. With the expected economic growth of India in coming years, I strongly believe that your Company is on the cusp of a multi-year growth cycle. The Company has made significant strides in recent years to strengthen the operations, product mix, procedures, and controls that make up the foundation of its business.

In conclusion, I would like to sincerely thank all our stakeholders for their continued trust and support and we will continue to grow our business by offering innovative products and solutions and exploring new avenues for future growth.

With best wishes,

Sincerely,

Vijay Agarwal

Chairman and Managing Director

Annual Report 2022-23	3