We have audited the standalone financial statements of
Hlmadrl Speciality Chemical Ltd (the “Company”)
which comprise the standalone balance sheet as at 31
March 2025, and the standalone statement of profit and
loss (including other comprehensive income), standalone
statement of changes in equity and standalone
statement of cash flows for the year then ended, and
notes to the standalone financial statements, and
notes to the standalone financial statements including
material accounting informations and other explanatory
information (hereinafter referred to as the “standalone
financial statements”).
In our opinion and to the best of our information and
according to the explanations given to us, the aforesaid
standalone financial statements give the information
required by the Companies Act, 2013 (“Act”) in the
manner so required and give a true and fair view in
conformity with the accounting principles generally
accepted in India, of the state of affairs of the Company as
at 31 March 2025, and its profit and total comprehensive
income, changes in equity and its cash flows for the year
ended then ended.
Basis for Opinion
We conducted our audit in accordance with the Standards
on Auditing (SAs) specified under Section 143(10) of the
Act. Our responsibilities under those SAs are further
described in the ‘Auditor’s Responsibilities for the Audit of
the Standalone Financial Statements' section of our report.
We are independent of the Company in accordance with
the Code of Ethics issued by the Institute of Chartered
Accountants of India together with the ethical requirements
that are relevant to our audit of the standalone financial
statements under the provisions of the Act and the
Rules thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and
the ICAI’s Code of Ethics. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a
basis for our opinion on the standalone financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the
standalone financial statements for the financial year
ended 31 March 2025. These matters were addressed in the
context of our audit of the standalone financial statements
as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. For each
matter below, our description of how our audit addressed
the matter is provided in that context:
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Descriptions of Key Audit Matter
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How we addressed the matter in our audit
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A. Valuation of Inventories
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We obtained assurance over the appropriateness of the
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Refer to note 15 to the standalone financial
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management’s assumptions applied in calculating the value
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statements. The Company is having Inventory of
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of the inventories and related provisions by:
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H 58,592.17 lakhs as on 31 March 2025. Inventories
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• Completed a walkthrough of the inventory valuation
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are to be valued as per Ind AS 2. As described in
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process and assessed the design and implementation of
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the accounting policies in note 15 to the financial
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the key controls addressing the risk.
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statements, inventories are carried at the lower
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• Verifying the effectiveness of key inventory controls
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of cost and net realisable value. The management
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operating over inventories; including sample based
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applies judgment in determining the appropriate
provisions against inventory of Stores, Raw Material,
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physical verification.
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Finished goods and Work in progress based upon
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• Verify that the adequate cut off procedure has been
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a detailed analysis of old inventory, net realisable
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applied to ensure that purchased inventory and sold
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value below cost based upon future plans for sale
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inventory are correctly accounted.
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of inventory. To ensure that all inventories owned
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• Reviewing the document and other record related
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by the entity are recorded and recorded inventories
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to physical verification of inventories done by the
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exist as at the year-end and valuation has been done
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management during the year.
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correctly, inventory valuation has been considered
as Key audit matters.
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• Verify that inventories are valued in accordance with Ind AS 2
• Verifying for a sample of individual products that costs
have been correctly recorded.
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Descriptions of Key Audit Matter
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How we addressed the matter in our audit
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•
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Comparing the net realisable value to the cost price
of inventories to check for completeness of the
associated provision.
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•
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Reviewing the historical accuracy of inventory provisioning
and the level of inventory write-offs during the year.
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Based on the audit procedures performed, we did not identify
any material exceptions in the inventory valuation.
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B. Revenue Recognition
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As part of our audit, we understood the Company's policies
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Refer to note 26 to the standalone financial statements.
Revenue is one of the key profit drivers and is
therefore susceptible to misstatement. Cut-off is
the key assertion in so far as revenue recognition
is concerned, since an inappropriate cut-off can
result in material misstatement of results for the
year. Revenue is recognized when the control of
the underlying products has been transferred
to customer along with the satisfaction of the
Company's performance obligation under a contract
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and processes, control mechanisms and methods in relation
to the revenue recognition, estimation of discounts rebates
and price adjustments and evaluated the design and
operative effectiveness of the financial controls for the above
through our test of control procedures.
• Our audit procedures with regard to revenue recognition
included testing controls, automated and manual, around
dispatches/deliveries, inventory reconciliations and
circularization of receivable balances, substantive testing
for cut-offs and analytical review procedures.
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with customer. Terms of sales arrangements,
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•
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Performing procedures to ensure that the revenue
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including the timing of transfer of control, delivery
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recognition criteria adopted by Company for all major
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specifications including Incoterms in case of exports,
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revenue streams is appropriate and in line with the
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timing of recognition of sales require significant
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Company's accounting policies.
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judgment in determining revenues. The risk is,
therefore, that revenue may not get recognised in
the correct period.
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•
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Obtaining and inspecting, on a sample basis, supporting
documentation for discounts, rebates and price
adjustments recorded and disbursed / allowed during the
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The estimation of discounts, rebates and price
adjustments to be recognised based on sales made
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year as well as credit notes issued after the year end to
determine whether these were recorded appropriately.
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during the year is material and considered to be
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•
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Our audit procedures included, among other things, the
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complex and judgmental.
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evaluation of the process to calculate the provision for
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Due to the significant risk associated with revenue
recognition in accordance with terms of Ind AS
115 'Revenue from contracts with customers 'and
the judgments and estimates involved in making
the estimation of discounts, rebates and price
adjustments, we determined the recognition of
revenue, estimation of discounts, rebated & price
adjustments as a key audit matter.
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•
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price adjustments and the evaluation of the relevant
assumptions and their derivation for the measurement of
the provisions.
We also compared costs incurred to the previously
recognized provisions to assess the quality of the
management estimates. Based on the evidence obtained,
we concluded that management's process for identifying
and quantifying the provision for rebates and price
adjustments was appropriate and that the resulting
provision was reasonable.
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Performed procedures to identify any unusual trends of
revenue recognition.
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Traced disclosure information to accounting records and
other supporting documentation.
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Based on the audit procedures performed, we did
not identify any material exceptions in the revenue
recognition and in estimation of discounts, rebates &
price adjustments.
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Information Other than the Financial Statements
and Auditor’s Report Thereon
The Company's Management and Board of Directors
are responsible for the other information. The other
information comprises the information included in the
Management Discussion and Analysis, Board's Report
including Annexures to Board's Report, Business
Responsibility and Sustainability Report, Corporate
Governance and Shareholder's Information but does
not include the standalone financial statements and our
auditor's report thereon.
Our opinion on the standalone financial statements does
not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the standalone financial
statements, our responsibility is to read the other
information and, in doing so, consider whether the other
information is materially inconsistent with the standalone
financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude
that there is a material misstatement of this other
information, we are required to report that fact. We have
nothing to report in this regard.
Responsibilities of Management and Those
Charged with Governance for the Standalone
Financial Statements
The Company's Board of Directors is responsible for the
matters stated in section 134(5) of the Act with respect to
the preparation of these standalone financial statements
that give a true and fair view of the financial position,
financial performance including other comprehensive
income, changes in equity and cash flow of the Company
in accordance with the accounting principles generally
accepted in India, including the Indian Accounting
Standards (Ind AS) specified under section 133 of
the Act read with the Companies (Indian Accounting
Standards) Rules, 2015, as amended. This responsibility
also includes maintenance of adequate accounting
records in accordance with the provisions of the Act
for safeguarding the assets of the Company and for
preventing and detecting frauds and other irregularities;
selection and application of appropriate accounting
policies; making judgments and estimates that are
reasonable and prudent; and the design, implementation
and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy
and completeness of the accounting records, relevant
to the preparation and presentation of the financial
statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, management
is responsible for assessing the Company's ability to
continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going
concern basis of accounting unless management either
intends 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 overseeing
the Company's financial reporting process.
Auditor’s Responsibilities for the Audit of the
Standalone Financial Statements
Our objectives are to obtain reasonable assurance about
whether the standalone financial statements as a whole
are free from material misstatement, whether due to fraud
or error, and to issue an auditor's report that includes
our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted
in accordance with SAs will always detect a material
misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the
basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise
professional judgment and maintain professional
scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement
of the financial statements, whether due to fraud
or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher
than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions,
misrepresentations or the override of internal control.
• Obtain an understanding of internal control relevant
to the audit in order to design audit procedures
that are appropriate in the circumstances. Under
section 143(3)(i) of the Act, we are also responsible
for expressing our opinion on whether the Company
has adequate internal financial controls system in
place with reference to financial statements and the
operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates
and related disclosures made by management.
• Conclude on the appropriateness of management's
use of the going concern basis of accounting and,
based on the audit evidence obtained, whether
a material uncertainty exists related to events or
conditions that may cast significant doubt on the
Company's ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are
required to draw attention in our auditor's report to the
related disclosures in the financial statements or, if such
disclosures are inadequate, to modify our opinion. Our
conclusions are 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 going concern.
• Evaluate the overall presentation, structure and
content of the financial statements, including the
disclosures, and whether the financial statements
represent the underlying transactions and events in
a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial
statements that, individually or in aggregate, makes it probable
that the economic decisions of a reasonably knowledgeable
user of the financial statements may be influenced. We
consider quantitative materiality and qualitative factors in
(i) planning the scope of our audit work and in evaluating
the results of our work; and (ii) to evaluate the effect of any
identified misstatements in the financial statements.
We communicate with those charged with governance
regarding, among other matters, the planned scope
and timing of the audit and significant audit findings,
including any significant deficiencies in internal control
that we identify during our audit.
We also provide those charged with governance with
a statement that we have complied with relevant
ethical requirements regarding independence, and to
communicate with them all relationships and other
matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with
governance, we determine those matters that were of
most significance in the audit of the standalone financial
statements of the current period and are therefore the key
audit matters. We describe these matters in our auditor's
report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated
in our report because the adverse consequences of doing
so would reasonably be expected to outweigh the public
interest benefits of such communication.
Report on Other Legal and Regulatory
Requirements
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 information
and explanations which to the best of 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 the Company so far as it
appears from our examination of those books;
c) The standalone balance sheet, the standalone
statement of profit and loss including the
statement of other comprehensive income,
standalone statement of changes in equity
and the standalone cash flow statement dealt
with by this Report are in agreement with the
books of account;
d) In our opinion, the aforesaid standalone financial
statements comply with the Accounting Standards
specified under Section 133 of the Act, read with
Companies (Indian Accounting Standards) Rules,
2015, as amended from time to time;
e) On the basis of the written representations
received from the directors, taken on record by
the Board of Directors, none of the directors are
disqualified as on 31 March, 2025 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 with reference to financial
statement of the Company and the operating
effectiveness of such controls, refer to our
separate Report in “Annexure B”.
g) With respect to the other matters to be included
in the Auditor's Report in accordance with the
requirement of section 197(16) of the Act,
In our opinion and to the best of our information
and according to the explanations given to us,
the remuneration paid/provided by the Company
to its directors during the year is in accordance
with the provisions of section 197 of the Act. The
Ministry of Corporate Affairs has not prescribed
other details under Section 197(16) of the Act
which are required to be commented upon by us.
h) With respect to the other matters to be included
in the Auditor's Report in accordance with Rule
11 of the Companies (Audit and Auditors) Rules,
2014, as amended, in our opinion and 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 financial position
in its standalone financial statements -
Refer Note 8(d), 16(b), 24(c) and 35(a) to
the standalone financial statements;
ii. The Company has made provision, as required
under the applicable law or accounting
standards, for material foreseeable losses,
if any, on long-term contracts including
derivative contracts - Refer Note 21 to the
standalone financial statements.
iii. There has been no delay in transferring
amounts, required to be transferred, to the
Investor Education and Protection Fund
by the Company.
iv. (a) The management has represented to
us that, to the best of its knowledge
and belief no funds (which are material
either individually or in the aggregate)
have been advanced or loaned or
invested (either from borrowed funds
or share premium or any other sources
or kind of funds) by the Company to or
in any other person or entity, including
foreign entity (“Intermediaries”),
with the understanding, whether
recorded in writing or otherwise,
that the Intermediary shall, whether,
directly or indirectly lend or invest in
other persons or entities identified
in any manner whatsoever by or on
behalf of the Company (“Ultimate
Beneficiaries”) or provide any
guarantee, security or the like on
behalf of the Ultimate Beneficiaries;
(b) The management has represented to
us that, to the best of its knowledge
and belief, no funds (which are
material either individually or in the
aggregate) have been received by the
Company from any person or entity,
including foreign entity (“Funding
Parties”), with the understanding,
whether recorded in writing or
otherwise, that the Company shall,
whether, directly or indirectly, lend
or invest in other persons or entities
identified in any manner whatsoever
by or on behalf of the Funding Party
(“Ultimate Beneficiaries”) or provide
any guarantee, security or the like on
behalf of the Ultimate Beneficiaries;
(c) Based on the audit procedures that
have been considered reasonable
and appropriate in the circumstances,
nothing has come to our notice that
has caused us to believe that the
representations under sub-clause
(i) and (ii) of Rule 11(e), as provided
under (a) and (b) above, contain any
material misstatement.
v. (a) The final dividend paid by the
Company during the year in respect
of the same declared for the previous
year is in accordance with section 123
of the Act to the extent it applies to
payment of dividend.
(b) The Board of Directors of the Company
has proposed dividend for the year,
which is subject to the approval of the
Members at the ensuing Annual General
Meeting. The amount of dividend
proposed is in accordance with Section
123 of the Act, as applicable.
vi. Based on our examination, which included
test checks, the Company has used
accounting software for maintaining its
books of account for the financial year
ended 31 March 2025 which has a feature
of recording audit trail (edit log) facility
and the same has operated throughout the
year for all relevant transactions recorded
in the software's. Further, during the
course of our audit we did not come across
any instance of the audit trail feature being
tampered with and the audit trail has been
preserved by the Company as per the
statutory requirements for record retention.
For Singhi & Co.
Chartered Accountants
Firm Registration No. - 302049E
Navindra Kumar Surana
Partner
Place: Kolkata Membership No. - 053816
Date: April 21, 2025 UDIN - 25053816BMLLYG4397
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