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Deccan Cements Ltd.

BSE: 502137 Sector: Industrials
NSE: DECCANCE ISIN Code: INE583C01021
BSE 00:00 | 10 Aug 509.55 -1.85
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NSE 00:00 | 10 Aug 509.65 -1.15
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OPEN 514.55
PREVIOUS CLOSE 511.40
VOLUME 1138
52-Week high 813.95
52-Week low 415.50
P/E 8.01
Mkt Cap.(Rs cr) 713
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 514.55
CLOSE 511.40
VOLUME 1138
52-Week high 813.95
52-Week low 415.50
P/E 8.01
Mkt Cap.(Rs cr) 713
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Deccan Cements Ltd. (DECCANCE) - Auditors Report

Company auditors report

To

The Members of Deccan Cements Limited Report on the Audit of the Financial StatementsOpinion

We have audited the financial statements of Deccan Cements Limited ("theCompany") which comprise the Balance Sheet as at 31st March 2021 and theStatement of Profit and Loss (including Other Comprehensive

Income) the Statement of Changes in Equity and Cash Flow Statement for the year thenended and notes to the accounting policies and financialstatementsincluding other explanatorysummaryofsignificant information (hereinafter referred to as "the financialstatements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2021 and its profit (including othercomprehensive income) changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor’s Responsibilities for the Audit of the FinancialStatements section of our report. We are independent of the Company in accordance withthe Code of Ethics issued by the Institute of Chartered Accountants of India together withthe ethical requirements that are relevant to our audit of the financial statements underthe provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethicsissued by the Institute of Chartered Accountants of India. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgement were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.

Key Audit Matter Auditor’s Response
1. Revenue Recognition Price Discounts Principal Audit Procedures
Revenue is measured net of discounts earned by customers on the Company’s sales. Assessed the appropriateness of the Company’s accounting policies relating to price discounts by comparing with applicable accounting standards.
Due to the Company’s presence across different marketing regions within the country and the competitive business environment price discounts vary based on the customer and market it caters to and recognised based on sales made during the year. These discounts are calculated based on the market study reports which reports are collated periodically by the management and are prone to manual interventions. Assessed the design and tested the implementation and operating effectiveness of Company’s internal controls over the approvals calculation accounting and issuance of credit notes.
Therefore there is a risk of revenue being misstated as a result of incorrect computation of price discounts. Obtained and inspected on a sample basis supporting documentation for price discounts recorded and credit notes issued during the year as well as credit notes issued after the year end date to determine whether these were recorded appropriately.
Given the complexity involved in the assessment of price discounts and their periodic recognition against sales the same is considered as key audit matter. Compared the historical trend of price discounts to sales made to determine the appropriateness of current year’s discount charge.
Refer Note 2(d)(i) of Significant Accounting Policies
2. The Company has material litigations which involve significant judgement to determine the possible outcome of these litigations. Refer Note 30 of the financial statements. Principal Audit Procedures
Obtained details of litigations for the year ended March 31 2021 from management. We have relied upon our internal experts to challenge the management’s underlying assumptions in estimating the possible outcome of the disputes.
Our internal team also considered the status of the disputes legal precedence and other rulings in evaluating management’s position on these matters. We have also relied on assurances and opinions provided by the various agencies representing the company.
3. Inventories as disclosed in Note 6 to the financial statements includes: Principal Audit Procedures
Raw materials comprising iron-ore gypsum limestone laterite and fly ash; The Company performs annual inventory counts at the year end and issues prior notification of procedures to be performed for such inventory counts. Our audit procedures to assess the existence of such items of inventory included the following:
Work-in-progress mainly comprising clinker Assessed the management’s process of measurement of stockpiles and the determination of values using conversion of volumes and density to total weight and the related yield.
Coal Obtained and reviewed the inventory count report of the management’s team and assessed its accuracy on a sample basis.
The above items of inventory are stored in sheds stockpiles and silos. As the weighing of these inventories is not practicable management assesses the reasonableness of the quantities on hand by obtaining measurements of stockpiles and converting these measurements to unit of volumes by using angle of repose and bulk density. The Company involves its team in the inventory count process.
Due to the significance of inventory balances and related estimations involved this is considered as a key audit matter.
4. Appropriateness of capitalisation of costs as per Ind AS 16 Property Plant and Equipment Principal Audit Procedures
During the year the Company has capitalised Waste Heat Recovery Plant (WHR Project) of Rs.6915.72 Lakhs. We have performed procedures including the following in relation to testing of capitalization of costs:
Refer Note 2(h) of Significant Accounting Policies and Note 3.1 - Property Plant and Equipment of the financial statements. Understood evaluated and tested the design and operating effectiveness of key controls relating to capitalization of various costs incurred in relation to Property Plant and Equipment.
Given the significance of the capital expenditure during the year there is a risk that elements of costs that are ineligible for capitalization in accordance with the recognition criteria provided in Indian Accounting Standard 16 Property Plant and Equipment are capitalized. Performed test of details with focus on those items that we considered significant due to their amount or nature and tested several items capitalized during the year against underlying supporting documents to ascertain nature of costs and whether they meet the recognition criteria provided in the Ind AS 16 Property Plant and Equipment in this regard.

Other Information

The Company’s Board of Directors is responsible for the other information. Theother information comprises the information included in the Board’s ReportManagement Discussion & Analysis and Report on Corporate

Governance but does not include the financial statements and our auditor’s reportthereon. the other Our opinion information the financial and we do not express anyform of assurance conclusion thereon. our responsibility is to read the In connection withour audit of other financial information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information we are required to report that fact. We have nothing to report in thisregard.

Responsibilities of Management and Those Charged with Governance for the FinancialStatements

The Company’s Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these financial statements that give financialposition financial true and fair view of the performance changes in equity and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the accounting standards specified under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the financial statements the Board of Directors is responsible forassessing the Company’s ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless the Board of Directors either intends to liquidate the Company or tocease operations or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company’sfinancial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor’s report that includes our opinion. Reasonable assurance is ahigh level of assurance but is not a guarantee that an audit conducted in accordance withSAs will always detect a material misstatement when it exists. Misstatements can arisefrom fraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgement andmaintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that ability to continue as a going concern. If weconclude that a may cast significant material uncertainty exists we are required to drawattention in our auditor’s report to the related disclosures in the financialstatements or if such disclosures are inadequate to modify our opinion. Our conclusionsare based on the audit evidence obtained up to the date of our auditor’s report.However future events or conditions may cause the Company to cease to continue as a goingconcern.

Evaluate the overall presentation structure and content of the financial statementsincluding the and whether the financial statements represent the underlying transactionsand events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial results thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial results.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit. We alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards. From the matters communicated withthose charged with governance we determine those matters that were of most significancein the audit of the financial statements of the current period and are therefore the keyaudit matters. We describe these matters in our auditor’s report unless law orregulation precludes public disclosure about the matter or when in extremely rarecircumstances we determine that a matter should not be communicated in our report becausethe adverse consequences of doing so would reasonably be expected to outweigh the publicinterest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act based on our audit we report that:

a) We have sought and obtained all the information and explanations which to the bestof 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 theCompany so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss (including Other ComprehensiveIncome) Statement of Changes in Equity and the Cash Flow Statement dealt with by thisReport are in agreement with the books of account.

d) In our opinion the aforesaid financial statements comply with the Ind AS prescribedunder Section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31stMarch 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 from being appointed as a director in termsof Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A".

g) With respect to the other matters to be included in the Auditor’s Report inaccordance with the requirements of section 197(16) of the Act as amended in our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provision of section 197 of the Act.

h) With respect to the other matters to be included in the Auditor’s Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements (Refer Note 30 of the financial statements);

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. There has been a delay of eight days in transferring the amounts which wererequired to be transferred to the Investor Education and Protection Fund by the Company.

2. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of Section 143 (11) of theAct we give in "Annexure B" a statement on the matters specified in paragraphs3 and 4 of the Order.

For M.Anandam & Co.
Chartered accountants
(Firm Registration No.000125S)
Sd/-
M.V.Ranganath
Partner
Place: Hyderabad Membership No.028031
Date: 11th June 2021 UDIN: 21028031AAAAEW6261

Annexure "A" to the Independent Auditor’s Report

(Referred to in paragraph 1(f) under ‘Report on Other Legal and RegulatoryRequirements’ section of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of DeccanCements Limited ("the Company") as of 31 March 2021 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI’). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company’s policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Act.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls bothapplicable to an audit of Internal Financial Controls. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over assessing the risk that amaterial weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor’s judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company’s internal financial controlssystem over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a processdesigned to assurance regarding the reliability of financial reporting and the preparationof financial purposes in accordance with generally accepted accounting principles. Acompany’s internal financial control over financial reporting includes those policiesand procedures that

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company’s assets that could havea material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial reporting to future periodsare subject to the risk that the internal financial control over become inadequate becauseof changes in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31 March 2021 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For M.Anandam & Co.
Chartered accountants
(Firm Registration No.000125S)
Sd/-
M.V.Ranganath
Partner
Place: Hyderabad Membership No.028031
Date: 11th June 2021 UDIN: 21028031AAAAEW6261

Annexure "B" to the Independent Auditor’s Report

With reference to Paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements’ section of our report to the Members of the Company we report that

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment.

(b) The property plant and equipment have been physically verified by the managementin a periodical manner which in our opinion is reasonable having regard to the size ofthe Company and the nature of its business. No material discrepancies were noticed on suchverification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company all the title deeds of immovable properties areheld in the name of the Company.

(ii) The inventories have been physically verified during the year by the management.The discrepancies noticed on verification between the physical stocks and book recordswere not material.

(iii) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained undersection 189 of the Act. Accordingly paragraph 3 (iii) (a) to (c) of the Order is notapplicable.

(iv) In our opinion and according to the information and explanations given to us theCompany has made investments which are in compliance with Section 186 of the Act. TheCompany has not granted loans not provided guarantees and securities.

(v) According to the information and explanations given to us the Company has notaccepted deposits within the meaning of Sections 73 to 76 of the Act and the rules framedthereunder.

(vi) We have broadly reviewed the cost records maintained by the Company as prescribedunder subsection (1) of section 148 of the Act and are of the opinion that prima faciethe prescribed accounts and records have been made and maintained. We have however notmade a detailed examination of the cost records with a view to determine whether they areaccurate or complete.

(vii) (a) According to the information and explanations given to us and the records ofthe Company examined by us the Company is regular in depositing undisputed statutory duesincluding provident fund employees’ state insurance income-tax goods and servicestax cess and any other statutory dues as applicable with the appropriate authorities andthere were no arrears of outstanding statutory dues as at the last day of the financialyear concerned for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and records of theCompany examined by us the particulars of income tax sales tax value added tax goodsand services tax and any other statutory dues as at 31st March 2021 which havenot been deposited on account of any dispute pending are as under:

Name of the statute Nature of the dues Amount (` in lakhs) Period to which the amount relates Forum where the dispute is pending
Andhra Pradesh General Sales Tax Act 1957 / AP VAT Act 2005 Sales tax / VAT 11.52 1993-94 Hon’ble High Court of Telangana
85.68 1999-00 & 2000-01
51.61 2002-03 to 2004-05
137.24 2006-07 Deputy Commissioner (Appeals) Hyderabad
Telangana VAT Act 2005 VAT 1.62 2014-15 VAT Appellate Tribunal Hyderabad
AP Electricity Duty Amendment Act 2003 Electricity Duty 316.23 2003-04 to 2008-09

Hon’ble High Court of Telangana

Telangana Tax on Entry of Goods into Local Areas Act 2001 Entry Tax 18.38 2012-13 To 2016-17

Appellate Tribunal Hyderabad

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of loans or borrowings to financialinstitutions banks and government. The Company has not issued any debentures.

(ix) The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) during the year. In our opinion and according to theinformation and explanations given to us the term loans have been applied for the purposefor which the loans were obtained.

(x) To the best of our knowledge and belief and according to the information andexplanations given to us no fraud on or by the Company was noticed or reported during theyear.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3 (xii) of the Order is notapplicable.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with section 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

(xiv) During the year the Company has not made preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underparagraph 3 (xiv) of the Order is not applicable to the Company.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3 (xv)of the Order is not applicable (xvi) The Company is not required to be registered undersection 45-IA of the Reserve Bank of India Act 1934.

For M.Anandam & Co.
Chartered accountants
(Firm Registration No.000125S)
Sd/-
M.V.Ranganath
Partner
Place: Hyderabad Membership No.028031
Date: 11th June 2021 UDIN: 21028031AAAAEW6261

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