To the members of DMCC Speciality Chemicals Limited
Report on the Audit of the Standalone Ind AS Financial
OPINION
We have audited the accompanying Standalone Ind AS financial statements of DMCC Speciality Chemicals Limited ("the Company”), which comprise the Balance sheet as at 31 March 2026, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the statement of Changes in Equity for the year then ended, and notes to the Ind AS financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Ind AS financial statements give the information required by the Companies Act, 2013, as amended ("the 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 2026, its profit including other comprehensive
income its cash flows and the changes in equity for the year ended on that date.
BASIS FOR OPINION
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing (SAs), as specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the ‘Auditor’s Responsibilities for the Audit of the Standalone Ind AS 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 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 Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Ind AS 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 Ind AS financial statements for the financial year ended 31 March 2026. These matters were addressed in the context of our audit of the Standalone Ind AS 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.
We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the Standalone Ind AS financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the Standalone Ind AS financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying Standalone Ind AS financial statements.
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Sr. No. Key audit matters
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How our audit addressed the key audit matter
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1. Litigations and claims
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Principal Audit Procedures:
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(Refer to note 32 to the standalone Ind AS
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• Evaluation of management’s judgement of tax
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financial statements)
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risks, estimates of tax exposures, each claims and contingencies. Third party opinions, past and
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These cases are pending with multiple tax
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current experience with the tax authority and
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authorities like Income Tax, Excise, Goods
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management’s response including on the labour
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and Service tax, Custom etc. and labour law
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law cases were used to assess the appropriateness
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cases which have not been acknowledge as
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of management’s best estimate of most likely
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debt by the company along with litigation
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outcome of each uncertain contingent liability.
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filed by Shipping Corporation of India Limited against the Company before the City Civil Court, Mumbai, with a claim amounting to ' 2.48 crore plus applicable interest.
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• Discussing selected matters with the entity’s management.
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Sr. No. Key audit matters
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How our audit addressed the key audit matter
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In normal course of business, financial
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• Critically assessing the entity’s assumptions and
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exposures may arise from pending
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estimates in respect of claims, included in the
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proceedings not acknowledged as debt
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contingent liabilities disclosed in the standalone
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by the company. Whether a claim needs
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Ind AS financial statements. Assessment of the
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to be recognized as liability or disclosed
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probability of negative result of litigation and the
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as contingent liability in the standalone
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reliability of estimates of related obligation.
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Ind AS financial statements is depended on a number of significant assumptions and judgements. The amount involved are potentially significant and determining the amount, if any, to be recognized or disclosed in the standalone Ind AS financial statements, is inherently subjective.
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• Based on the procedures described above, we did not identify any material exceptions to the management’s assertions and treatment, presentation & disclosure on the subject matter in the standalone Ind AS financial statements.
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We have Considered Litigation and claims as Key Audit Matter as it requires significant management judgement, including accounting estimation uncertainty.
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2. Revenue Recognition
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Principal Audit Procedures:
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(as described in note 2.11 of the standalone
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Our audit procedures included the following:
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Ind AS financial statements)
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• Assessed the Company’s revenue recognition
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For the year ended March 31, 2026 the
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policy prepared as per Ind AS 115 ‘Revenue from
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Company has recognized revenue from
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contracts with customer’s.
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contracts with customers amounting to ' 57,209.75 Lacs. Revenue from contracts with customers is recognised when control of the goods are transferred to the customer
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• Assessed the design and tested the operating effectiveness of internal controls related to revenue recognition, discounts and rebates.
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at an amount that reflects the consideration
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• Performed sample tests of individual sales
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to which the Company expects to be entitled
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transaction and traced to sales invoices, sales orders
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in exchange for those goods. The Company
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and other related documents. Further, in respect of
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has generally concluded that as principal,
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the samples checked that the revenue has been
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it typically controls the goods before
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recognized as per the shipping terms.
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transferring them to the customer.
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• To test cut off selected sample of sales transactions
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The variety of terms that define when control
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made pre- and post-year end, agreeing the period
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are transferred to the customer, as well as
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of revenue recognition to third party support, such
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the high value of the transactions, give rise
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as transporter invoice and customer confirmation
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to the risk that revenue is not recognized in
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of receipt of goods.
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the correct period.
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• Tested the provision calculations related to
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Revenue is measured net of returns and
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management incentives, discounts and rebates
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allowances, cash discounts, trade discounts
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by agreeing a sample of amounts recognized to
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and volume rebates (collectively ‘discount
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underlying arrangements with customers and
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and rebates’). There is a risk that these
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other supporting documents.
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discount and rebates are incorrectly recorded as it also requires a certain degree of estimation, resulting in understatement
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• Performed monthly analytical procedures of revenue by streams to identify any unusual trends.
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of the associated expenses and accrual.
Revenue is also an important element of how the Company measures its performance. The Company focuses on revenue as a key performance measure, which could create an incentive for revenue to be recognized
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• Obtained confirmations from customers on sample basis to support existence assertion of trade receivables and assessed the relevant disclosures made in the financial statements; to ensure revenue from contracts with customers are in accordance with the requirements of relevant accounting
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before the risk and rewards have been transferred.
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standards.
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Accordingly, due to the significant risk associated with revenue recognition in accordance with terms of Ind AS 115 ‘Revenue from contracts with customer’s, it was determined to be a key audit matter in our audit of the standalone Ind AS financial
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statements.
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Sr. No. Key audit matters
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How our audit addressed the key audit matter
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3. Assessment of net realizable value (NRV)
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Principal Audit Procedures:
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of inventories
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Our audit procedures included the following:
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(Refer Note 7 and 2.9 to the standalone financials statements).
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• Read and evaluated the accounting policies with respect to inventories.
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The Company’s inventory comprises Raw Materials, Packing Materials, Work-inProcess, Finished Goods and Stores and Spares.
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• Understood and evaluated the design and implementation and tested the operating effectiveness of the Company’s internal financial control over valuation of inventories.
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Inventories of Roha Unit in the state of Maharashtra and Dahej Unit in the state of Gujarat amounting to ' 9,189.32 Lakhs (Previous Year - ' 4,259.06 Lakhs) (Refer Note7) are offered as security by of hypothecation of Raw Materials, Finished Goods, Working in process, Packing
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• Tested on a sample basis that inventories are held at lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
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Materials, Stores, Book Debts and Receivable
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• Cost of Finished goods and work in progress include
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for working capital facility provided by Banks.
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materials cost, cost of conversion, depreciation, other overheads to the extent applicable but excluding borrowing costs.
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• Based on the above procedures performed, we considered the management’s assessment of valuation of inventories at lower of cost and NRV to be reasonable.
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We have determined that there are no other key audit matters to communicate in our report.
INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITOR’S REPORT THEREON
The Company’s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report 202526, but does not include the Standalone Ind AS financial statements and our auditor’s report thereon.
Our opinion on the Standalone Ind AS 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 Ind AS financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the standalone Ind AS 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 FOR THE STANDALONE IND AS 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 Ind AS financial statements that give a true and fair
view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity 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 of 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 Standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the Standalone Ind AS 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 are also responsible for overseeing the Company’s financial reporting process.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE IND AS FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the Standalone Ind AS 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 Ind AS financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the Standalone Ind AS 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 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.
• Concludeon 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 Ind AS 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 Standalone Ind AS financial statements, including the disclosures, and whether the Standalone Ind AS financial statements
represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatement in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone 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 result of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone 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 Ind AS financial statements for the financial year ended 31 March 2026 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, 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 purpose 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 Balance Sheet, Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid Standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of written representations received from the directors as on 31 March 2026, and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2026, 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 reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B” to this report;
(g) 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, 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 Ind AS financial statements - Refer Note 32 to the standalone Ind AS financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. (i) The Management has represented
that, to the best of its knowledge and belief, as disclosed in Note to the accounts, no funds 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(s) or entity(ies), including foreign entities (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;
(ii) The Management has represented that, to the best of its knowledge and belief, as disclosed in Note to the accounts, no funds have been received by the company from in any other person(s) or entity(ies), including foreign entities ("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; and
(iii) Based on such audit procedures performed 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) contain any material misstatement.
v. As stated in Note 2.25 to the Standalone Financial Statements
(a) The final dividend proposed in the previous year, declared and paid by the Company during the year is in accordance with Section 123 of the Act, as applicable.
(b) The Board of Directors of the Company have proposed final 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 systems for maintaining its books of account for the financial year ended March 31, 2026 which have the feature of recording audit trail (edit log) facility and the same
has operated throughout the year for all relevant transactions recorded in the software systems. 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.
(h) The Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provision of Section 197 read with Schedule V to the Act.
For Rahul Gautam Divan & Associates
Chartered Accountants Firm’s Registration No.: 120294W
Nilesh Thakker
Partner
Membership No.: 138754 UDIN:
Place: Mumbai Date: 15th May 2026
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