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Deccan Cements Ltd.

BSE: 502137 Sector: Industrials
NSE: DECCANCE ISIN Code: INE583C01021
BSE 00:00 | 20 Feb 279.85 5.10
(1.86%)
OPEN

279.60

HIGH

284.00

LOW

279.20

NSE 00:00 | 20 Feb 280.70 3.65
(1.32%)
OPEN

280.00

HIGH

285.00

LOW

276.20

OPEN 279.60
PREVIOUS CLOSE 274.75
VOLUME 168
52-Week high 486.60
52-Week low 258.85
P/E 5.39
Mkt Cap.(Rs cr) 392
Buy Price 279.85
Buy Qty 100.00
Sell Price 281.00
Sell Qty 7.00
OPEN 279.60
CLOSE 274.75
VOLUME 168
52-Week high 486.60
52-Week low 258.85
P/E 5.39
Mkt Cap.(Rs cr) 392
Buy Price 279.85
Buy Qty 100.00
Sell Price 281.00
Sell Qty 7.00

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 Bal -ance Sheet as at 31st March 2019 theStatement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and Cash Flow Statement for the year then ended and notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory information.

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 Indian Accounting Standards ("Ind AS")prescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended and other accounting principles generally accepted inIndia of the state of affairs of the Company as at March

31 2019 and its profit total comprehensive income changes in equity and its cashflows for the year ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards onAuditing (SAs) specified under section 143(10) of the Act. Our responsibilities underthose Standards are further described in the Auditor's Responsibilities for the Audit ofthe Financial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia ("ICAI") together with the ethical requirements that are relevant to ouraudit of the financial statements under the provisions of the Act and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the ICAI's Code of Ethics. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our opinion on thefinancial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgement were of mostsignificant the financial statements of the current period. These matters were addressedin the context of our audit of the financial statements and in forming our opinionthereon and we do not provide a separate opinion on these matters. We have determined thematters described below to be the key audit matters to be communicated in our report.

Key Audit Matter Auditor's Response
1. Inventories as disclosed in Note 6 to the financial statements includes: Principal Audit Procedures
Raw materials comprising iron-ore gypsum limestone laterite and flyash; The Company performs annual inventory counts at the year end and issues prior notification procedures to be performed for such inventory counts. Our audit procedures to assess the existence of inventory included the following:
Work-in-progress mainly comprising clinker Coal
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. Attended physical inventory counts performed by the Company
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.
2. The Company has material litigations which the involve significant possible outcome of these litigations. Refer Note 29 of the financial statements. Principal Audit Procedures Obtained details of litigations for the year ended March 31 2019 from management. We have relied upon our internal experts to challenge the man- agement'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.

Other Information

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Board's Report ManagementDiscussion & Analysis and Report on Corporate

Governance but does not include the financial statements and our auditor's reportthereon.

Our opinion on the financial statements does not cover the other information and wewill not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.

Management's Responsibility for the Financial Statements

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 givea true and fair view of the financial position financial performance total comprehensiveincome changes in equity and cash flows the accounting principles generally accepted inIndia including the accounting standards specified under section

133 of the Act. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate implementation and maintenance of accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

The Board of Directors are also responsible for overseeing the Company's financialreporting 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 a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud 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 thebasisof these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment 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 theCompanies Act 2013 we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls system in place and the operatingeffectiveness of such 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 to continue as a going concern. If we concludethat amaycast significant material uncertainty exists we are required to draw attentionin our auditor's report to the related disclosures in the financial statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation structure and content of the financial statementsincluding the disclo -sures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.

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

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings significantdeficiencies in internal control that we includingany 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 or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits 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) Wehave sought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit. b) In our opinionproper books of account as required by law have been kept by the Company so far as itappears from our examination of those books. c) The Balance Sheet the Statement of Profitand Loss including Other Comprehensive Income State -ment of Changes in Equity and theCash Flow Statement dealt with by this Report 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 read with Rule 7 of Companies (Accounts) Rules 2014. e) On the basis ofthe written representations received from the directors as on 31st March 2019taken on record by the Board of Directors none of the directors is disqualified as on 31 stMarch 2019 from being appointed as a director in terms of Section 164 (2) of the Act. f)With respect to the adequacy of the internal financial controls over financial reportingof the Company and the operating effectiveness of such controls refer to our separateReport in "Annexure A". g) With respect to the other matters to be included inthe Auditor's Report in accordance with the requirements of section 197(16) of the Act asamended: In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provision of section 197 of the Act. h) With respect to theother matters to be included in the Auditor's Report in accordance with Rule 11 of theCompanies (Audit and Auditors) Rules 2014 in our opinion and to the best of ourinformation 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 29 of the financial statements);

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

iii. There has been no delay in transferring the amounts which were required to betransferred to the Investor Education and Protection Fund by the Company.

2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of Section 143 (11) of the Act we givein "Annexure B" a statement on the matters specified in paragraphs 3 and 4 ofthe Order.

For M. Anandam& Co.
Chartered Accountants
(Firm Regn. No. 000125S)
Sd/-
M.V.Ranganath
Place : Hyderabad Partner
Date : 28.05.2019 Membership No.028031

Annexure "A" to the Independent Auditor's Report

(Referred to in paragraph 1(f) under ‘Report on Other Legal RegulatoryRequirements' section of our report to the Members of the Company 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 2019 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 on the internal control over financial reporting criteria established by theCompany considering components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls over Financial Reporting issued by the Institute of CharteredAccountants of India ("ICAI"). These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of its business includingadherence to company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under the

Companies Act 2013.

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 issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

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 financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement 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 controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.

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 controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may 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 2019 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 Regn. No. 000125S)
Sd/-
M.V.Ranganath
Place : Hyderabad Partner
Date : 28.05.2019 Membership No.028031

Annexure "B" to the Independent Auditor's Report

With reference to Paragraph 2 under ‘Report on Other Legal 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 including quantitativedetails and situation of property plant and equipment.

(b) As explained to us the property plant and equipment have been physically verifiedby the management in a periodical manner which in our opinion is reasonable havingregard to the size of the Company and the nature of its business. No materialdiscrepancies were noticed on such verification.

(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

Partnerships or other parties covered in the register maintained under section 189 ofthe Act. Accordingly paragraph 3 (iii) (a) to (c) of the Order is not applicable.

(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 asprescribed under sub-section (1) of section 148 of the Act and are of the opinion thatprima facie the prescribed accounts and records have been made and maintained. We havehowever not made a detailed examination of the cost records with a view to determinewhether they are accurate 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 services taxcess and any other statutory dues as applicable with the appropriate authorities and therewere no arrears of outstanding statutory dues as at the last day of the financial yearconcerned 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 as at 31st March 2019 which have not been deposited onaccount of any dispute pending are as under:

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

(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 give 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 such transactions have been disclosed in thefinancial statements as required by the applicable accounting 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 under(xiv) of the order is not applicable to the Company. (xv) According to the information andexplanations given to us and based on our examination of the records of the Company theCompany has not entered into any non-cash transactions with directors or persons connectedwith him. Accordingly paragraph 3 (xv) of the Order is not applicable (xvi) The Companyis not required to be registered under section 45-IA of the Reserve Bank of India Act1934.

For M. Anandam& Co.
Chartered Accountants
(Firm Regn. No. 000125S)
Sd/-
M.V.Ranganath
Place : Hyderabad Partner
Date : 28.05.2019 Membership No.028031