Deccan Cements Ltd Directors Report.

Dear Shareholders,

The Directors of your company are glad to present the 40th Annual Report together with the Audited Financial Statements of the Company for the Financial Year ended 31st March, 2020.

Financial Results

The Financial Results for the year ended 31st March, 2020 are summarized below:

(Rs. in Lakhs)
Particulars 2019-20 2018-19
Revenue from operations 55,584.82 65,141.52
Other Income (net) 955.66 987.02
Total Income 56,540.48 66,128.54
Operating expenses
Depreciation and 47,755.17 55,619.22
amortization expenses 2,091.25 2,231.21
Total expenses 49,846.42 57,850.43
Profit before Finance cost and Tax and Exceptional
Item 6,694.06 8,278.11
Less: Finance cost 677.62 773.04
Exceptional Item 962.41 -
Current tax 1,235.89 2,649.41
Deferred tax (1,846.24) 249.66
Net Profit after Tax 5,664.38 4,606.00
O t h e r c o m p r e h e n s i v e income (5.06) 3.76
Total comprehensive income for the year 5,659.32 4,609.76
Profit brought forward from previous year 34,049.42 29,946.28
Less: Dividend (including
Corporate Dividend Tax) (1,308.74) (506.61)
Closing Balance of Profit 38,400.00 34,049.42
Earnings Per Share (in Rs.) 40.44 32.88

Results of Operations:

The profit after tax of the Company for the current year was at Rs. 5,664.38 Lakh as compared to the previous year profit of Rs. 4,606.00 Lakh. During the year there is no change of business.

The Financial statements are required to be presented in accordance with the Ind-AS requirements from the financial year 2018-19. It shows there is a decrease in revenues by 14.67%. As per Ind-AS requirements GST, rebates and discounts are reduced from the Gross revenue. For the sake of better understanding, the changes in the Gross and the Net Revenue disclosed in the financial statements are given below:

(Rs. in Lakhs)
Particulars 2019-20 2018-19
Sale of products
(a) Cement - Gross
Revenue 80,515.42 91,072.57
GST 17,601.51 19,919.02
Rebates 8,023.92 6,739.84
Cement - Net Revenue 54,889.99 64,413.71
(b) Power
(Net of charges for wheeling, banking)
Wind 47.68 77.81
Hydel 519.30 347.71
Thermal - 135.87
Power Net Revenue 566.98 561.39
Other operating revenues
Scrap sales 127.85 166.42
Revenue (Net of Taxes and Rebates) 55,584.82 65,141.52

Operational Results are further elaborated in the Management Discussion and Analysis Report.

Dividend:

In consonance with the Companys policy of rewarding its shareholders on a consistent basis, your directors declared interim dividend of Rs. 4/- per equity share i.e. @80% dividend on the Equity Share Capital of the Company for FY 2019-20. The said dividend was paid during March 2020.

The cash outflow for interim dividend FY 2019-20 was Rs. 560.30 Lakh and Rs. 115.19 Lakh towards tax on dividend totaling to Rs. 575.49 Lakhs. The cash outflow for dividend declared for FY 2018-19 was Rs. 525.28 Lakh and Rs. 107.97 Lakh towards tax on dividend totaling to Rs. 633.25 Lakhs.

Your directors have not recommended any final dividend for the financial year 2019-20.

Your directors have not proposed to transfer any sum to Reserves for the financial year 2019-20.

Capital Structure:

There is no change in the capital structure during the year.

Deposits:

During the year under review, the Company has not invited / accepted any amount falling within the purview of provisions of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

Management Discussion and Analysis Report:

A report on the Management Discussion and Analysis is appended to this Report.

Business Responsibility Report:

Business Responsibility Report as per regulation 34 of the listing regulations forms part of this Annual Report.

Corporate Governance:

The Companys Report on Corporate Governance is attached, and forms part of this Report.

Certificate

M/s. M Anandam & Co., Chartered Accountants confirming the compliance with the conditions of Corporate Governance as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is appended to this Report.

Transfer to Investor Education and Protection

Fund (IEPF):

During the year, the Company has transferred a sum of Rs. 3,68,844/-, the unclaimed and unpaid dividend pertaining to the Financial Year 2011-12, to the Investor Education and Protection Fund (IEPF) in compliance with applicable provisions of the Companies Act, 2013. Further, the unclaimed and unpaid dividend amount pertaining to the Financial Year 2012-13 is due for transfer to IEPF on 18th September, 2020. The year wise details of unpaid and unclaimed amounts lying with the Company as on 31st March, 2020 are uploaded to IEPF portal of the Ministry of Corporate Affairs

(MCA) "www.iepf.gov.in" and also available in the Companys website "www.deccancements.com". Shareholders are advised to check their unpaid and unclaimed dividend status and contact the Company for encashment of the same, if depicting unpaid. Section 124(6) of the Companies Act, 2013 read with the Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016 mandates companies to transfer shares against which dividends remain unpaid / unclaimed for a continuous period of seven years to the IEPF. As per the Ministry of Corporate Affairs General Circular No.12/2017 dated

16th October, 2017, the Company has transferred 11,300 equity shares belonging to 32 shareholders through corporate action on 15th October, 2019 to the demat account of IEPF Authority held with NSDL. Similarly, the shares in respect of which dividend are unpaid / unclaimed for a continues period of seven years, since the dividend declared for the Financial Year 2012-13, are due for transfer to IEPF on 18th September, 2020.

Directors and Key Managerial Personnel:

During the year Mr. K. P. Singh, Independent Director was re-appointed by the shareholders of the Company by passing a special resolution for the Second Term of 5 (Five) Consecutive Years with effect from 29th September, 2019 to 28th September, 2024. The terms and conditions of appointment of independent directors are as per Schedule IV of the Act. They have submitted declarations that each of them meets the criteria of independence as provided and in Section 149(6) of the Act and there has been no change in their status as independent director during the year.

Pursuant to Section 152 of the Companies Act, 2013 Mr. M. B. Raju (DIN: 00016652) is liable to retire by rotation at the forthcoming Annual General Meeting and being eligible has offered himself for reappointment.

The Board recommends his reappointment.

As per the recommendation of the Nomination and Remuneration Committee, your Directors appointed Mr. Shonti Venkateswarlu (DIN: 08602254) as an

Additional Director of the Company, with effect from 11th November, 2019, who will holds office of Director up to the date of ensuing Annual General Meeting of the company. Further, subject to the approval of the members he was appointed as Whole-time Director of the Company with designation Director (Works), for a period of 5 (five) years with effect th November 2019. As per the recommendation of the Nomination and Remuneration Committee, the Board recommends his appointment as Director liable to retire by rotation at the ensuing Annual General Meeting of the company. Further, the Board recommends to accord approval in connection with his appointment as a Whole-time Director of the Company with designation Director (Works).

Further, as per the recommendation of the Nomination and Remuneration Committee, your Directors appointed Mrs. Mahpara Ali (DIN: 06645262 and Independent Director Registration No. IDDB-DI-202002-008803) as an Additional Director of the Company, in the category of Independent Director, with effect from1 st April, 2020, who will holds office of Director up to the date of ensuing Annual General Meeting of the company. As per the recommendation of the Nomination and Remuneration Committee, the Board recommends her appointment as an Independent Director for a term of

5 years with effect from 1st April 2020.

The company has received requisite declaration from Mrs. Mahpara Ali pursuant to the provisions of Section 149(7) of the Act that she meets the criteria of independence as provided in Section 149(6) of the Act.

In the opinion of the Board, Mrs. Mahpara Ali fulfills the conditions specified in the Act and the Rules made thereunder to be appointed as an Independent Director. Brief resume of the Director(s) retiring by rotation, seeking appointment, including nature of their experience in specific functional areas, names of companies in which they hold directorship and membership of committees of the Board is appended to the Notice calling the 40th Annual General Meeting. Pursuant to Section 2(51) and Section 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, during the financial year 2019-20 under review the following changes were made in the position of Keyfrom 11 Managerial Personnel of the Company:

1. Mr. S. K. Mishra resigned from the position of Company Secretary and relieved from his duties on 10th June, 2019, and in his place Mr. Bikram Keshari Prusty joined as Company Secretary of the Company with effect from 8 th July, 2019.

2. Mr. RVA Narasimha Rao, Chief Financial Officer of the Company was superannuated on 29th June, 2019, and in his place Mr. D. Raghava Chary is designated as Chief Financial Officer Company with effect from 1st July, 2019.

3. Mr. S. Venkateswarlu, Senior Vice President (Works) is appointed as Whole Time Director with designation Director (Works) with effect from 11th November, 2019.

Ms. P Parvathi, Managing Director, continued as the "Key Managerial Personnel" of the Company.

Familiarization program for Independent Directors:

The Company has adopted a familiarization programme prepared in the line of Regulation 25(7) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 for Independent Directors to familiarize them with the Companys philosophy, vision, mission, strategies, operations and functions. The details of the familiarization programme are available on the Companys website at "www.deccancements. com". Declaration by Independent Directors:

Your Company has received necessary declaration from each independent director under Section 149 of the Companies Act, 2013, confirming that he/she meets the criteria of independence laid down in Section 149 of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

Statutory Auditor:

M/s. M Anandam & Co., Chartered Accountants, Secunderabad, were appointed as Statutory Auditors of the Company in the 37th annual general meeting of the Company held on 11th August, 2017 for a period of five years i.e. till the conclusion of the 42 nd annual general meeting to be held in the year 2022 for FY 2021-22.

The Notes on the financial statements referred to in the Auditors Report are self explanatory and do not call for any further comments. The Auditors Report does not contain any qualification, reservation or adverse remark.

Cost Auditor:

M/s. Aruna Prasad & Co., Cost Accountants, Chennai, has been reappointed by the Board of Directors as Cost Auditor of the Company for the Financial Year 2020-21. The remuneration of the cost auditor is required to be ratified by the members in accordance with the provisions of Section 148 of the Companies Act, 2013 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014. Accordingly, the matter is being placed before the Members for ratification at the ensuing Annual General Meeting.

Secretarial Auditor:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company engaged the services of M/s. Tumuluru & Company, Company Secretaries, Hyderabad to conduct the

Secretarial Audit of the Company for the financialyear ended 31st March, 2020. The Secretarial Audit Report in Form MR-3 is annexed to this Report (Annexure I).

There has been no qualification, reservation, adverse remarks or disclaimer in the Secretarial Audit Report.

Extract of Annual Return:

An extract of Annual Return in Form MGT-9 as on 31st March 2020 is annexed to this Report (Annexure II).

Board Meetings:

During the year, Five (5) meetings of the Board of Directors were convened and held. The details of the meetings of the Board are furnished in the Corporate Governance Report which forms part of this Report.

Directors Responsibility Statement:

Pursuant to the provisions of Section 134(3)(c) and 134(5) of the Companies Act, 2013, relating to Directors Responsibility Statement, your Directors, confirm that:

a) in the preparation of the annual accounts for the year ended 31st March, 2020, the applicable accounting standards had been followed and there are no material departure;

b) 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 31st March, 2020 and of the profit of the company for the year ended on that date;

c) the directors had taken proper and for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) the directors had prepared the annual accounts for the year ended 31st March, 2020 on a going concern basis;

e) the directors had laid down internal financial controls to be followed by the company and that such internal financialcontrols are adequate and were operating effectively;

f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

CEO/CFO Certification:

The CEO and CFO certification on the Financial Statements for Year 2019-20 is provided elsewhere in this Annual Report.

Policy on Directors appointment and remuneration and other details:

The Companys policy on directors appointment and remuneration and other matters has been disclosed in the Corporate Governance Report, which forms part of this Report.

Particulars of loans, guarantees or investments under Section 186:

The Company has not granted any loans, secured or unsecured, which falls under the provisions of Section 186 of the Companies Act, 2013.

Particulars of Contracts or arrangement with related parties referred under Section 188(1):

The Company had not entered into any arrangement/ transaction with related parties which is material in nature and accordingly, the disclosure of Related Party Transactions in Form AOC-2 is not applicable. Transactions entered by the Company with its related parties were on an arms length basis and suitable disclosures as required under Ind AS-24 have been made in Note No. 32 to the Financial Statements. In compliance of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company has formulated a Related Party Transactions Policy and the same is available on the Companys website "www. deccancements.com".

Energy Conservation, Technology Absorption and

Foreign Exchange:

Information required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 forming part of the Directors Report for the year ended 31st March 2019 are given in Annexure III.

Internal Control Systems and its Adequacy:

The details in respect of internal control and its adequacy are included in the Management Discussion & Analysis, which forms part of this report.

Risk Management:

The Company has framed a Risk Management Policy and details of policy are disclosed in the companys website "www.deccancements.com". The Risk

Management Policy envisages identification of risk and procedures for assessment and mitigation thereof.

Corporate Social Responsibility (CSR):

Pursuant to Section 135 of Companies Act, 2013, your Company has constituted a Corporate Social Responsibility Committee. The composition of the Committee is provided in the Corporate Governance Report. Your Company has formulated a Corporate Social Responsibility Policy, which has been approved by the Board indicating the projects or programs to be undertaken by the Company, in line with Schedule VII of the Act. The same is available on the website of the Company "www.deccancements.com".

A brief outline of the CSR policy of the Company and the Annual Report on CSR activities undertaken during the year 2019-20 in the format prescribed in the

Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed to this Report (Annexure IV).

Board Evaluation:

In compliance of the provisions of the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the annual performance evaluation of individual directors was carried out by the Board. The detailed criteria in which the performance of the individual directors was carried out has been disclosed in the Corporate Governance Report.

The Performance evaluation of independent directors was done by the entire Board of Directors excluding the director being evaluated.

Particulars of Employees:

The information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in

Annexure V. contribution made by the During the financial year under review, none of the

Companys employees are in receipt of remuneration more than the limit prescribed under Section 197(12) read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Prevention of Sexual Harassment Policy:

The Company has formulated a policy on Prevention of Sexual Harassment at workplace for women in the line with the requirements of the ‘The Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013 and the Rules made thereunder.

During the financial year ended 31st March, 2020, the Company has not received any Complaint pertaining to Sexual Harassment.

Impact assessment of the global health pandemic COVID - 19 and related estimation uncertainty:

Your Company had suspended operations w.e.f. 23.03.2020 as per the directives of both the Central and State Governments in the wake of COVID -19 pandemic. The Companys operations were impacted in the month of March 2020. The Company has made an assessment on measurement of assets and liabilities including recoverability of carrying values of its assets, it liquidity position and ability to repay its debts for the next year, and concluded that no material adjustments are considered necessary. From 20th April 2020, operations have commenced in a phased manner taking into account directives from the Government.

The Company has not availed moratorium allowed by RBI for payment of its debt obligations and the Company continues to service all its payment obligations in time. The Company has adequate liquidity in the form of cash and credit facilities/lines for meeting its funds requirements.

Acknowledgement:

Your Directors place on record their sincere appreciation for significant employees through their dedication, hard work and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain amongst the well performing units of the industry. Your Directors take this opportunity to express their gratitude to Central and State Governments and their departments and the local authorities, the Banks, Dealers, Stockists and Customers for their continued guidance and support to the Company during the year under review.

Your Directors are also grateful to the shareholders for their confidenceand faith reposed in the Company.

For and on behalf of the Board

Sd/-

M.B.Raju

Executive Chairman DIN: 00016652

Place: Hyderabad Date: 25th June 2020