We have audited the standalone financial statements ofHlmadrl Speciality Chemical Ltd (the “Company”)which comprise the standalone balance sheet as at 31March 2025, and the standalone statement of profit andloss (including other comprehensive income), standalonestatement of changes in equity and standalonestatement of cash flows for the year then ended, andnotes to the standalone financial statements, andnotes to the standalone financial statements includingmaterial accounting informations and other explanatoryinformation (hereinafter referred to as the “standalonefinancial statements”).
In our opinion and to the best of our information andaccording to the explanations given to us, the aforesaidstandalone financial statements give the informationrequired by the Companies Act, 2013 (“Act”) in themanner so required and give a true and fair view inconformity with the accounting principles generallyaccepted in India, of the state of affairs of the Company asat 31 March 2025, and its profit and total comprehensiveincome, changes in equity and its cash flows for the yearended then ended.
We conducted our audit in accordance with the Standardson Auditing (SAs) specified under Section 143(10) of theAct. Our responsibilities under those SAs are furtherdescribed in the ‘Auditor’s Responsibilities for the Audit ofthe Standalone Financial Statements' section of our report.We are independent of the Company in accordance withthe Code of Ethics issued by the Institute of CharteredAccountants of India together with the ethical requirementsthat are relevant to our audit of the standalone financialstatements under the provisions of the Act and theRules thereunder, and we have fulfilled our other ethicalresponsibilities in accordance with these requirements andthe ICAI’s Code of Ethics. We believe that the audit evidencewe have obtained is sufficient and appropriate to provide abasis for our opinion on the standalone financial statements.
Key audit matters are those matters that, in our professionaljudgment, were of most significance in our audit of thestandalone financial statements for the financial yearended 31 March 2025. These matters were addressed in thecontext of our audit of the standalone financial statementsas a whole, and in forming our opinion thereon, and we donot provide a separate opinion on these matters. For eachmatter below, our description of how our audit addressedthe matter is provided in that context:
Descriptions of Key Audit Matter
How we addressed the matter in our audit
A. Valuation of Inventories
We obtained assurance over the appropriateness of the
Refer to note 15 to the standalone financial
management’s assumptions applied in calculating the value
statements. The Company is having Inventory of
of the inventories and related provisions by:
H 58,592.17 lakhs as on 31 March 2025. Inventories
• Completed a walkthrough of the inventory valuation
are to be valued as per Ind AS 2. As described in
process and assessed the design and implementation of
the accounting policies in note 15 to the financial
the key controls addressing the risk.
statements, inventories are carried at the lower
• Verifying the effectiveness of key inventory controls
of cost and net realisable value. The management
operating over inventories; including sample based
applies judgment in determining the appropriateprovisions against inventory of Stores, Raw Material,
physical verification.
Finished goods and Work in progress based upon
• Verify that the adequate cut off procedure has been
a detailed analysis of old inventory, net realisable
applied to ensure that purchased inventory and sold
value below cost based upon future plans for sale
inventory are correctly accounted.
of inventory. To ensure that all inventories owned
• Reviewing the document and other record related
by the entity are recorded and recorded inventories
to physical verification of inventories done by the
exist as at the year-end and valuation has been done
management during the year.
correctly, inventory valuation has been consideredas Key audit matters.
• Verify that inventories are valued in accordance with Ind AS 2
• Verifying for a sample of individual products that costshave been correctly recorded.
•
Comparing the net realisable value to the cost priceof inventories to check for completeness of theassociated provision.
Reviewing the historical accuracy of inventory provisioningand the level of inventory write-offs during the year.
Based on the audit procedures performed, we did not identifyany material exceptions in the inventory valuation.
B. Revenue Recognition
As part of our audit, we understood the Company's policies
Refer to note 26 to the standalone financial statements.
Revenue is one of the key profit drivers and istherefore susceptible to misstatement. Cut-off isthe key assertion in so far as revenue recognitionis concerned, since an inappropriate cut-off canresult in material misstatement of results for theyear. Revenue is recognized when the control ofthe underlying products has been transferredto customer along with the satisfaction of theCompany's performance obligation under a contract
and processes, control mechanisms and methods in relationto the revenue recognition, estimation of discounts rebatesand price adjustments and evaluated the design andoperative effectiveness of the financial controls for the abovethrough our test of control procedures.
• Our audit procedures with regard to revenue recognitionincluded testing controls, automated and manual, arounddispatches/deliveries, inventory reconciliations andcircularization of receivable balances, substantive testingfor cut-offs and analytical review procedures.
with customer. Terms of sales arrangements,
Performing procedures to ensure that the revenue
including the timing of transfer of control, delivery
recognition criteria adopted by Company for all major
specifications including Incoterms in case of exports,
revenue streams is appropriate and in line with the
timing of recognition of sales require significant
Company's accounting policies.
judgment in determining revenues. The risk is,therefore, that revenue may not get recognised inthe correct period.
Obtaining and inspecting, on a sample basis, supportingdocumentation for discounts, rebates and priceadjustments recorded and disbursed / allowed during the
The estimation of discounts, rebates and priceadjustments to be recognised based on sales made
year as well as credit notes issued after the year end todetermine whether these were recorded appropriately.
during the year is material and considered to be
Our audit procedures included, among other things, the
complex and judgmental.
evaluation of the process to calculate the provision for
Due to the significant risk associated with revenuerecognition in accordance with terms of Ind AS115 'Revenue from contracts with customers 'andthe judgments and estimates involved in makingthe estimation of discounts, rebates and priceadjustments, we determined the recognition ofrevenue, estimation of discounts, rebated & priceadjustments as a key audit matter.
price adjustments and the evaluation of the relevantassumptions and their derivation for the measurement ofthe provisions.
We also compared costs incurred to the previouslyrecognized provisions to assess the quality of themanagement estimates. Based on the evidence obtained,we concluded that management's process for identifyingand quantifying the provision for rebates and priceadjustments was appropriate and that the resultingprovision was reasonable.
Performed procedures to identify any unusual trends ofrevenue recognition.
Traced disclosure information to accounting records andother supporting documentation.
Based on the audit procedures performed, we didnot identify any material exceptions in the revenuerecognition and in estimation of discounts, rebates &price adjustments.
The Company's Management and Board of Directorsare responsible for the other information. The otherinformation comprises the information included in theManagement Discussion and Analysis, Board's Reportincluding Annexures to Board's Report, BusinessResponsibility and Sustainability Report, CorporateGovernance and Shareholder's Information but doesnot include the standalone financial statements and ourauditor's report thereon.
Our opinion on the standalone financial statements doesnot cover the other information and we do not expressany form of assurance conclusion thereon.
In connection with our audit of the standalone financialstatements, our responsibility is to read the otherinformation and, in doing so, consider whether the otherinformation is materially inconsistent with the standalonefinancial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.
If, based on the work we have performed, we concludethat there is a material misstatement of this otherinformation, we are required to report that fact. We havenothing to report in this regard.
The Company's Board of Directors is responsible for thematters stated in section 134(5) of the Act with respect tothe preparation of these standalone financial statementsthat give a true and fair view of the financial position,financial performance including other comprehensiveincome, changes in equity and cash flow of the Companyin accordance with the accounting principles generallyaccepted in India, including the Indian AccountingStandards (Ind AS) specified under section 133 ofthe Act read with the Companies (Indian AccountingStandards) Rules, 2015, as amended. This responsibilityalso includes maintenance of adequate accountingrecords in accordance with the provisions of the Actfor safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities;selection and application of appropriate accountingpolicies; making judgments and estimates that arereasonable and prudent; and the design, implementationand maintenance of adequate internal financial controls,that were operating effectively for ensuring the accuracyand completeness of the accounting records, relevantto the preparation and presentation of the financialstatements that give a true and fair view and are free frommaterial misstatement, whether due to fraud or error.
In preparing the financial statements, managementis responsible for assessing the Company's ability tocontinue as a going concern, disclosing, as applicable,matters related to going concern and using the goingconcern basis of accounting unless management eitherintends to liquidate the Company or to cease operations,or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeingthe Company's financial reporting process.
Auditor’s Responsibilities for the Audit of theStandalone Financial Statements
Our objectives are to obtain reasonable assurance aboutwhether the standalone financial statements as a wholeare free from material misstatement, whether due to fraudor error, and to issue an auditor's report that includesour opinion. Reasonable assurance is a high level ofassurance, but is not a guarantee that an audit conductedin accordance with SAs will always detect a materialmisstatement when it exists. Misstatements can arise fromfraud or error and are considered material if, individuallyor in the aggregate, they could reasonably be expectedto influence the economic decisions of users taken on thebasis of these standalone financial statements.
As part of an audit in accordance with SAs, we exerciseprofessional judgment and maintain professionalscepticism throughout the audit. We also:
• Identify and assess the risks of material misstatementof the financial statements, whether due to fraudor error, design and perform audit proceduresresponsive to those risks, and obtain audit evidencethat is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting amaterial misstatement resulting from fraud is higherthan for one resulting from error, as fraud mayinvolve collusion, forgery, intentional omissions,misrepresentations or the override of internal control.
• Obtain an understanding of internal control relevantto the audit in order to design audit proceduresthat are appropriate in the circumstances. Undersection 143(3)(i) of the Act, we are also responsiblefor expressing our opinion on whether the Companyhas adequate internal financial controls system inplace with reference to financial statements and theoperating effectiveness of such controls.
• Evaluate the appropriateness of accounting policiesused and the reasonableness of accounting estimatesand related disclosures made by management.
• Conclude on the appropriateness of management'suse of the going concern basis of accounting and,based on the audit evidence obtained, whether
a material uncertainty exists related to events orconditions that may cast significant doubt on theCompany's ability to continue as a going concern. Ifwe conclude that a material uncertainty exists, we arerequired to draw attention in our auditor's report to therelated disclosures in the financial statements or, if suchdisclosures are inadequate, to modify our opinion. Ourconclusions are based on the audit evidence obtainedup to the date of our auditor's report. However, futureevents or conditions may cause the Company to ceaseto continue as a going concern.
• Evaluate the overall presentation, structure andcontent of the financial statements, including thedisclosures, and whether the financial statementsrepresent the underlying transactions and events ina manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financialstatements that, individually or in aggregate, makes it probablethat the economic decisions of a reasonably knowledgeableuser of the financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in(i) planning the scope of our audit work and in evaluatingthe results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.
We communicate with those charged with governanceregarding, among other matters, the planned scopeand timing of the audit and significant audit findings,including any significant deficiencies in internal controlthat we identify during our audit.
We also provide those charged with governance witha statement that we have complied with relevantethical requirements regarding independence, and tocommunicate with them all relationships and othermatters that may reasonably be thought to bear on ourindependence, and where applicable, related safeguards.
From the matters communicated with those charged withgovernance, we determine those matters that were ofmost significance in the audit of the standalone financialstatements of the current period and are therefore the keyaudit matters. We describe these matters in our auditor'sreport unless law or regulation precludes public disclosureabout the matter or when, in extremely rare circumstances,we determine that a matter should not be communicatedin our report because the adverse consequences of doingso would reasonably be expected to outweigh the publicinterest benefits of such communication.
1. As required by the Companies (Auditor's report) Order,2020 (“the Order”) issued by the Central Government
of India in terms of sub-section (11) of section 143 of the
Act, we give in the “Annexure A” a statement on the
matters specified in paragraphs 3 and 4 of the Order.
2. As required by section 143 (3) of the Act, based on
our audit we report that:
a) We have sought and obtained all the informationand explanations which to the best of ourknowledge and belief were necessary for thepurposes of our audit;
b) In our opinion, proper books of account as requiredby law have been kept by the Company so far as itappears from our examination of those books;
c) The standalone balance sheet, the standalonestatement of profit and loss including thestatement of other comprehensive income,standalone statement of changes in equityand the standalone cash flow statement dealtwith by this Report are in agreement with thebooks of account;
d) In our opinion, the aforesaid standalone financialstatements comply with the Accounting Standardsspecified under Section 133 of the Act, read withCompanies (Indian Accounting Standards) Rules,2015, as amended from time to time;
e) On the basis of the written representationsreceived from the directors, taken on record bythe Board of Directors, none of the directors aredisqualified as on 31 March, 2025 from beingappointed as a director in terms of Section164(2) of the Act;
f) With respect to the adequacy of the internalfinancial controls with reference to financialstatement of the Company and the operatingeffectiveness of such controls, refer to ourseparate Report in “Annexure B”.
g) With respect to the other matters to be includedin the Auditor's Report in accordance with therequirement of section 197(16) of the Act,
In our opinion and to the best of our informationand according to the explanations given to us,the remuneration paid/provided by the Companyto its directors during the year is in accordancewith the provisions of section 197 of the Act. TheMinistry of Corporate Affairs has not prescribedother details under Section 197(16) of the Actwhich are required to be commented upon by us.
h) With respect to the other matters to be includedin the Auditor's Report in accordance with Rule
11 of the Companies (Audit and Auditors) Rules,2014, as amended, in our opinion and to thebest of our information and according to theexplanations given to us:
i. The Company has disclosed the impact ofpending litigations on its financial positionin its standalone financial statements -Refer Note 8(d), 16(b), 24(c) and 35(a) tothe standalone financial statements;
ii. The Company has made provision, as requiredunder the applicable law or accountingstandards, for material foreseeable losses,if any, on long-term contracts includingderivative contracts - Refer Note 21 to thestandalone financial statements.
iii. There has been no delay in transferringamounts, required to be transferred, to theInvestor Education and Protection Fundby the Company.
iv. (a) The management has represented to
us that, to the best of its knowledgeand belief no funds (which are materialeither individually or in the aggregate)have been advanced or loaned orinvested (either from borrowed fundsor share premium or any other sourcesor kind of funds) by the Company to orin any other person or entity, includingforeign entity (“Intermediaries”),with the understanding, whetherrecorded in writing or otherwise,that the Intermediary shall, whether,directly or indirectly lend or invest inother persons or entities identifiedin any manner whatsoever by or onbehalf of the Company (“UltimateBeneficiaries”) or provide anyguarantee, security or the like onbehalf of the Ultimate Beneficiaries;
(b) The management has represented tous that, to the best of its knowledgeand belief, no funds (which arematerial either individually or in theaggregate) have been received by theCompany from any person or entity,including foreign entity (“FundingParties”), with the understanding,whether recorded in writing orotherwise, that the Company shall,whether, directly or indirectly, lendor invest in other persons or entitiesidentified in any manner whatsoever
by or on behalf of the Funding Party(“Ultimate Beneficiaries”) or provideany guarantee, security or the like onbehalf of the Ultimate Beneficiaries;
(c) Based on the audit procedures thathave been considered reasonableand appropriate in the circumstances,nothing has come to our notice thathas caused us to believe that therepresentations under sub-clause(i) and (ii) of Rule 11(e), as providedunder (a) and (b) above, contain anymaterial misstatement.
v. (a) The final dividend paid by the
Company during the year in respectof the same declared for the previousyear is in accordance with section 123of the Act to the extent it applies topayment of dividend.
(b) The Board of Directors of the Companyhas proposed dividend for the year,which is subject to the approval of theMembers at the ensuing Annual GeneralMeeting. The amount of dividendproposed is in accordance with Section123 of the Act, as applicable.
vi. Based on our examination, which includedtest checks, the Company has usedaccounting software for maintaining itsbooks of account for the financial yearended 31 March 2025 which has a featureof recording audit trail (edit log) facilityand the same has operated throughout theyear for all relevant transactions recordedin the software's. Further, during thecourse of our audit we did not come acrossany instance of the audit trail feature beingtampered with and the audit trail has beenpreserved by the Company as per thestatutory requirements for record retention.
For Singhi & Co.
Chartered AccountantsFirm Registration No. - 302049E
Navindra Kumar Surana
Partner
Place: Kolkata Membership No. - 053816
Date: April 21, 2025 UDIN - 25053816BMLLYG4397