We have audited the accompanying standalone financialstatements of Hindustan Petroleum Corporation Limited(“the Company”), which comprise the Standalone BalanceSheet as at March 31, 2026, the Standalone Statement ofProfit and Loss (including Other Comprehensive Income), theStandalone Statement of Changes in Equity and the StandaloneStatement of Cash Flows for the year then ended and notes to thestandalone financial statements, including material accountingpolicy information and other explanatory information, whichincludes the standalone financial statements of the VisakhRefinery for the year ended on that date, audited by the branchauditor, located at Visakhapatnam (hereinafter referred to asthe "standalone financial statements”).
In our opinion and to the best of our information and accordingto the explanations given to us, the aforesaid standalonefinancial statements give the information required by theCompanies Act, 2013 ("the Act”) in the manner so requiredand give a true and fair view in conformity with the IndianAccounting Standards prescribed under section 133 of the Actread with the Companies (Indian Accounting Standards) Rules,2015 as amended ("Ind AS”) and accounting principles generallyaccepted in India, of the state of affairs of the Company asat March 31, 2026 and its profit, total comprehensive income,changes in equity and its cash flows for the year ended onthat date.
Basis for Opinion
We conducted our audit of the standalone financial statementsin accordance with the Standards on Auditing ("SAs”) specifiedunder section 143(10) of the Act. Our responsibilities underthose Standards are further described in the "Auditors’Responsibilities for the Audit of the Standalone FinancialStatements” section of our report. We are independent ofthe Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (the "ICAI”)together with the ethical requirements that are relevant toour audit of the standalone financial statements under theprovisions of the Act and the Rules made thereunder, and wehave fulfilled our other ethical responsibilities in accordancewith these requirements and the ICAI’s Code of Ethics. Webelieve that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our opinion on thestandalone financial statements.
Key Audit Matters
Key Audit Matters are those matters that, in our professionaljudgment, were of most significance in our audit of thestandalone financial statements for the financial year endedMarch 31, 2026. These matters were addressed in the contextof our audit of the standalone financial statements as a whole,and in forming our opinion thereon, and we do not provide aseparate opinion on these matters. For each matter below,our description of how our audit addressed the matter isprovided in that context. We have determined, taking intoconsideration audit report issued by the branch auditors, thematters described below to be the key audit matters to becommunicated in our report:
Sr.
No.
Auditors’ Response
1
Property, Plant and Equipment and Capital Work in Progress
How the Key Audit matter was addressed
• The Company has, during the year, executed various projects
• We performed an understanding and evaluation of the system of
including expansion of refinery, and is also in the process of
internal control processes over the projects and those included
executing various projects like installation of bio-refinery
in capital work in progress, with reference to identification and
and other new plants, depots, LPG bottling plants, terminals,
testing of key controls;
pipelines, etc. Since these projects take a substantial period
• We assessed whether the Company's accounting policy in
of time to get ready for intended use and considering the
relation to the capitalisation of expenditures are in sync and in
materiality of the amounts capitalized and included in CapitalWork in Progress, in the context of the Balance Sheet of theCompany, this is considered to be a key area having significanteffect on the overall audit strategy and allocation of resources
compliance with Ind AS and found them to be consistent;
• We have reviewed Board minutes relating to approvals of theprojects and changes in estimates thereof;
in planning and completion of our audit;
• We assessed the progress of the project and the intention andability of the management to bring the asset to its state of
• With regard to above capital projects, management hasidentified specific expenditure including employee costs and
intended use;
other overheads relating to each of the assets in the above
• We understood, evaluated and tested the design and operating
capital projects and has applied judgement to assess if the
effectiveness of key controls relating to capitalisation of various
costs incurred in relation to these assets meet the recognition
costs incurred;
criteria of Property, Plant and Equipment in accordance with
• We tested, on sample basis, the direct and indirect costs
Ind AS 16.
capitalised, with the underlying supporting documents to
• There are areas where management judgements impact the
ascertain nature of costs and basis for allocation, where
carrying value of the property, plant and equipment, intangible
applicable, and evaluated whether they meet the recognition
assets and their respective depreciation/amortization rates.
criteria provided in the Indian Accounting Standard (Ind AS) 16,
These include the decision to capitalise or expense costs, the
Property, Plant and Equipment;
annual asset life review, the timeliness of the capitalisation
• We ensured adequacy of disclosures in the standalone
of assets and the use of management assumptions and
financial statements.
estimates for the determination or the measurement and
• We reviewed the judgements made by the management including
recognition criteria for assets retired from active use.
the nature of underlying costs capitalized, determination of
This has been determined as a key audit matter due to the
realizable value of the assets retired from active use, the
significance of the capital expenditure during the year as compared
appropriateness of useful lives applied in the calculation of
to the existing block of Property, Plant and Equipment, the risk
depreciation/amortization, the useful lives of assets prescribed
that the elements of costs that are eligible for capitalisation are
in Schedule II to the Act and the useful lives of certain assets
not appropriately capitalised in accordance with the recognition
as per the technical assessment of the management. We have
criteria provided in Ind AS 16, and the complex nature of the
found that the management has regularly reviewed aforesaid
project. (Refer Note No. 3, 4,5 & 5A)
judgments and there are no material changes.
2
Evaluation of uncertain indirect tax positions
The Company has material uncertain indirect tax positions
• We have evaluated and tested the appropriateness of the design
including matters under dispute which involves significant
and the operating effectiveness of the management's controls
judgments and estimates to determine the possible outcome of
over the tax litigation matters;
these disputes. The Company has disputes pending at various
• We reviewed the management's underlying assumptions in
levels of tax authorities over the past several years. (Refer Note
estimating the tax provision based on the possible outcome of
No.- 53 and para (vii) (b) - Annexure I of this report).
the disputes, legal precedence and other rulings in evaluating
Because of the judgement required, the area determined to be a
management's position on these uncertain tax positions;
key audit matter.
• We relied upon the management judgements, industry leveldeliberations and estimates for possible outflow and opinionof internal experts of the Company in relation to such disputedtax positions.
• We assessed the appropriateness of disclosures made as per IndAS 37 "Provisions, Contingent Liabilities and Contingent Assets”.
3
Computation of Expected Credit Loss (ECL)
Trade receivables constitute a significant component of the
•
We evaluated the methodology used for age-wise classification
total current assets of the Company. At each reporting date, the
of trade receivables and assessed the key assumptions
Company recognizes lifetime expected credit losses on these
underlying the estimated probability of default. This evaluation
Trade receivables wherein we relied on Management's estimates
includes verifying consistency with the Company's historical
regarding probability of default rates linked to age-wise bucketing
default trends.
of the underlying assets. Given, the technical complexity inestimating the probability of default; this area is considered as akey audit matter. (Refer Note No. 13)
We also assessed the appropriateness whether themanagement's estimates are in line with Ind AS 109.
4
Inventories
The verification and valuation of inventories, is a significant
We evaluated the inventory monitoring and control system and
area that involves considerable management judgment in the
noted that the physical verification of inventories is done by the
application of accounting policies and estimation techniques.
Management at reasonable intervals.
Since, these judgments have a significant impact on the amountsrecognized in the Standalone Financial Statements, we haveidentified this area as a key audit matter. (Refer Note No. 11)
Our audit teams conducted physical verification of inventorieson a sample basis at various locations. However, since physicalverification at every location is not possible, in such cases weplaced reliance on the physical verification procedures carriedout by the Management.
For inventories held at third-party locations, we relied on theCompany's system of record-keeping related to such inventories.
We also tested, on a sample basis, the values used fordetermining net realisable value and cost of inventories, andverified their consistency with the inventory valuation recordsand related accounting entries.
We assessed that the valuation of inventories is in complianceInd AS 2.
5
Leases (Ind AS 116)
The Company has adopted Ind AS 116 - Leases, which requires
Evaluating the Company's process for identification of
recognition of right-of-use assets and corresponding lease
lease contracts.
liabilities for all applicable lease arrangements. The applicationof this standard involves significant judgments, includingdetermination of the lease term (considering renewal and
Testing a sample of lease agreements to assess whether theymeet the definition of a lease under Ind AS 116.
termination options), identification of lease and non-lease
Assessing the reasonableness of key assumptions such as lease
components, and discounting of lease liabilities.
term and discount rate.
Given the materiality of lease balances and the significant
Verifying the mathematical accuracy of lease liability and
management judgment involved in measurement and recognition,
right-of-use asset calculations.
this area was considered as a key audit matter. (Refer Note No. 3 & 42)
Evaluating the adequacy of disclosures in the standalonefinancial statements.
Information Other than the Standalone FinancialStatements and Auditors’ Report thereon
The Company’s Management and the Board of Directors areresponsible for the preparation of the other information. Theother information comprises the information included in theDirectors’ Report including Annexures to the Directors’ Report,Corporate Governance Report, Management Discussion andAnalysis Report and Business Responsibility and SustainabilityReport, but does not include the standalone financialstatements and our auditors’ report thereon. The otherinformation as above is expected to be made available to usafter the date of this auditors’ report.
Our opinion on the standalone financial statements does notcover the other information and we do not express any formof assurance conclusion thereon.
In connection with our audit of the standalone financialstatements, our responsibility is to read the other informationand, in doing so, consider whether the other informationis materially inconsistent with the standalone financialstatements, or our knowledge obtained during the course ofour audit or otherwise appears to be materially misstated.
If based on our work we have performed, if we conclude thatthere is a material misstatement therein, we are required toreport that fact to those charged with governance.
Responsibilities of Management andThose Charged with Governance for theStandalone Financial Statements
The Company’s Management and the Board of Directors areresponsible for the matters stated in section 134(5) of the Actwith respect to the preparation of these standalone financialstatements that give a true and fair view of the financialposition, financial performance including other comprehensiveincome, changes in equity and cash flows of the Company inaccordance with the Ind AS and other accounting principlesgenerally accepted in India, including the Indian AccountingStandards specified under section 133 of the Act read withthe companies (Indian Accounting Standards) rules, 2015,as amended.
This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent;and design, implementation and maintenance of adequateinternal financial controls, that were operating effectively forensuring the accuracy and completeness of the accounting
records, relevant to the preparation and presentation of thestandalone financial statements that give a true and fair viewand are free from material misstatement, whether due to fraudor error.
In preparing the standalone financial statements, Managementand the Board of Directors are responsible for assessing theCompany’s ability to continue as a going concern, disclosing,as applicable, matters related to going concern and using thegoing concern basis of accounting unless Management andBoard of Directors either intends to liquidate the Company orto cease operations, or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing theCompany’s financial reporting process.
Auditors’ Responsibilities for the Audit ofthe Standalone 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 auditors’ report that includes ouropinion. Reasonable assurance is a high level of assurance,but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement whenit exists. Misstatements can arise from fraud or error andare considered material if, individually or in the aggregate,they could reasonably be expected to influence the economicdecisions of users taken on the basis of these standalonefinancial statements.
As part of an audit in accordance with SAs, we exerciseprofessional judgment and maintain professional skepticismthroughout the audit. We also:
• Identify and assess the risks of material misstatement ofthe standalone financial statements, whether due to fraudor error, design and perform audit procedures responsiveto those risks, and obtain audit evidence that is sufficientand appropriate to provide a basis for our opinion. Therisk of not detecting a material misstatement resultingfrom fraud is higher than for one resulting from error, asfraud may involve collusion, forgery, intentional omissions,misrepresentations, or the override of internal control.
• Obtain an understanding of internal financial controlrelevant to the audit in order to design audit proceduresthat are appropriate in the circumstances. Under section143(3)(i) of the Act, we are also responsible for expressingour opinion on whether the Company has adequate internalfinancial controls system in place and the operatingeffectiveness of such controls.
• Evaluate the appropriateness of accounting policies usedand the reasonableness of accounting estimates andrelated disclosures made by the management.
• Conclude on the appropriateness of management’s use ofthe going concern basis of accounting and, based on theaudit evidence obtained, whether a material uncertaintyexists related to events or conditions that may castsignificant doubt on the Company’s ability to continue asa going concern. If we conclude that a material uncertaintyexists, we are required to draw attention in our auditors’report to the related disclosures in the standalonefinancial statements or, if such disclosures are inadequate,to modify our opinion. Our conclusions are based on theaudit evidence obtained up to the date of our auditors’report. However, future events or conditions may cause theCompany to cease to continue as a going concern.
• Evaluate the overall presentation, structure and contentof the standalone financial statements, including thedisclosures, and whether the standalone financialstatements represent the underlying transactions andevents in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the standalonefinancial statements that, individually or in aggregate, makesit probable that the economic decisions of a reasonablyknowledgeable user of the standalone financial statementsmay be influenced. We consider quantitative materiality andqualitative factors in (i) planning the scope of our audit workand in evaluating the results of our work; and (ii) to evaluatethe effect of any identified misstatements in the standalonefinancial statements.
We believe that the audit evidence obtained by us is sufficientand appropriate to provide a basis for our audit opinion on thestandalone financial statements.
We communicate with those charged with governanceregarding, among other matters, the planned scope andtiming of the audit and significant audit findings, includingany significant deficiencies in internal control that we identifyduring our audit.
We also provide those charged with governance with astatement that we have complied with relevant ethicalrequirements regarding independence, and to communicatewith them all relationships and other matters that mayreasonably be thought to bear on our independence, and whereapplicable, related safeguards.
From the matters communicated with those charged withgovernance, we determine those matters that were of mostsignificance 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 auditors’ report unless lawor regulation precludes public disclosure about the matter orwhen, in extremely rare circumstances, we determine that amatter should not be communicated in our report becausethe adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits ofsuch communication.
Other Matters
1. We did not audit the financial statements and otherfinancial information of Visakh Refinery which isconsidered as a branch, and included in the standalonefinancial statements, whose financial statements reflecttotal assets of ? 47,633.79 Crore as at March 31, 2026,total revenues of ? 1,07,955.40 Crore, net profit aftertax of ? 3,378.13 Crore and total comprehensive incomeof ? 3,346.32 Crore for year ended March 31, 2026. Thefinancial statements of the Visakh Refinery of theCompany have been audited by the Branch Auditor ofthe Company. The Branch Auditors’ report dated May 1,2026, has been furnished to us and our opinion in so faras it relates to the amounts and disclosures included inrespect of this branch, is based solely on the report ofsuch branch auditor.
2. We refer to Note No. 50 in respect of 17 unincorporatedJoint Operations involved in exploration activities, ofwhich majority are under relinquishment. The standalonefinancial statements include Company's proportionateshare in Assets and Liabilities amounting to ? 3.39 Croreand ? 3.19 Crore respectively, as on March 31, 2026, andIncome and Expenditure amounting to ? 1.22 Crore and? 2.95 Crore for the year ended March 31, 2026, which havebeen included based on unaudited financial information.Our opinion in respect thereof is solely based on themanagement certified information.
We have placed reliance on technical/commercialevaluation by the management in respect of categorizationof wells, allocation of cost incurred on them, liability fordecommissioning costs, liability for NELP and nominatedblocks for under performance against agreed MinimumWork Programme.
3. The standalone financial statements of the Companyfor the year ended March 31, 2025, were audited by theprevious joint auditors, one of which is predecessor auditfirm and have expressed an unmodified opinion on suchstandalone financial statements vide their report datedMay 6, 2025.
Our opinion is not modified in respect of above matters.
Report on Other Legal and RegulatoryRequirements
1. As required by the Companies (Auditor’s Report) Order,2020 ("the Order”) issued by the Central Government ofIndia in terms of Section 143(11) of the Act and on thebasis of verification of the books and records of thecompany, as we considered appropriate and according tothe information and explanations given to us, we give in"Annexure I” a statement on the matters specified inparagraphs 3 and 4 of the Order, to the extent applicable.
2. As required under section 143(5) of the Act, based on ouraudit as aforesaid, we give in the Annexure II, a reporton the directions including additional directions issued bythe Comptroller and Auditor General of India, action takenthereon and its impact on the accounts and standalonefinancial statements of the company.
3. The Company does not have the required number ofindependent directors on its Board, as stipulated underSEBI Listing Regulations 2015, for the period from April 1,2025 to March 31, 2026, and up-to the date of this report.
4. As required by Section 143 (3) of the Act, based on theaudit we report that:
a) We have sought and obtained all the information andexplanations which to the best of our knowledge andbelief were necessary for the purposes 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 andproper returns adequate for the purposes of our audithave been received from branch not visited by us;
c) The report dated May 1,2026, on the accounts of theVisakh Refinery of the Company, issued under section143(8) of the Act by the Branch Auditors upon theiraudit of the books of accounts of Visakh Refineryhas been forwarded to us and have been properlydealt with by us in preparing our report in the mannerconsidered necessary by us;
d) The Balance Sheet, the Statement of Profit and Lossincluding Other Comprehensive Income, Statement ofChanges in Equity and the Statement of Cash Flowsdealt with by this Report are in agreement with thebooks of accounts;
e) In our opinion and to the best of our informationand according to the explanations given to us, the
aforesaid standalone financial statements complywith the Indian Accounting Standards specified undersection 133 of the Act read with Companies (IndianAccounting Standard) Rules, 2015 as amended;
f) The company being a Government Company, theprovision of section 164(2) of the Act relating todisqualification of directors is not applicable in viewof the Notification No. G.S.R. 463(E) dated June 5,2015, issued by the Ministry of Corporate Affairs;
g) With respect to the adequacy of the internal financialcontrols over financial reporting of the company andthe operating effectiveness of such controls, refer toour separate Report in "Annexure III” to this report;
h) With respect to the other matters to be includedin the Auditors’ Report in accordance with therequirements of section 197(16) of the Act, asamended we report that:
As per Notification number G.S.R. 463 (E) dated June 5,2015 issued by Ministry of Corporate Affairs, section197 of the Act regarding remuneration to directorsis not applicable to the Government Company; andhence we are not required to report as to whether theremuneration paid by the Company to its directorsduring the year is in accordance with the provisionsof section 197 of the Act;
i) With respect to the other matters to be includedin the Auditors’ Report in accordance with Rule 11of the Companies (Audit and Auditors) Rules, 2014,as amended, in our opinion and to the best of ourinformation and according to the explanations givento us:
i. The Company has disclosed the impact ofpending litigations on its financial position inits standalone financial statements (Refer NoteNo.53 of the standalone financial statements);
ii. The Company has made provision, as requiredunder the applicable law or accountingstandards, for material foreseeable losses, ifany, on long-term contracts including derivativecontracts (Refer Note No. 54 to the standalonefinancial statements);
iii. There has been no delay in transferring amounts,required to be transferred, to the InvestorEducation and Protection Fund by the Company;
iv. (a) The Management has represented that,to the best of its knowledge and belief,no funds have been advanced or loanedor invested (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 theunderstanding, whether recorded in writingor otherwise, that the Intermediary shall,whether, directly or indirectly lend or investin other persons or entities identified inany manner whatsoever by or on behalf ofthe Company (“Ultimate Beneficiaries”) orprovide any guarantee, security or the likeon behalf of the Ultimate Beneficiaries;
(b) The Management has represented, that,to the best of its knowledge and belief, nofunds have been received by the Companyfrom any person or entity, includingforeign entity (“Funding Parties”), withthe understanding, whether recorded inwriting or otherwise, that the Companyshall, whether, directly or indirectly, lendor invest in other persons or entitiesidentified in any manner whatsoever by oron behalf of the Funding Party (“UltimateBeneficiaries”) or provide any guarantee,security or the like on behalf of theUltimate Beneficiaries; and
(c) Based on such audit procedures thathave been considered reasonable andappropriate in the circumstances, nothinghas come to our notice that has causedus to believe that the representations
under sub-clause (i) and (ii) of Rule 11(e),as provided under (a) and (b) above, containany material misstatement.
v. (a) The final dividend paid by the Company
during the year, in respect of the previousyear, is in accordance with section 123 ofthe Act to the extent it applies to paymentof dividend;
(b) The interim dividend declared and paid bythe Company during the year and until thedate of this report is in compliance withSection 123 of the Act to the extent itapplies to payment of dividend;
(c) As stated in note no. 48 to the standalonefinancial statements, the Board ofDirectors of the Company have proposedfinal dividend for the year which is subjectto the approval of the members at theensuing Annual General Meeting. Thedividend declared is in accordance withsection 123 of the Act to the extent itapplies to declaration of dividend.
vi. Based on our examination which included testchecks, the Company has used accountingsoftware for maintaining its books of accountwhich has a feature of recording audit trail(edit log) facility and the same has operatedthroughout the year for all relevant transactionsrecorded in the software. Further, during thecourse of our audit we did not come across anyinstance of audit trail feature being tamperedwith and the same has been preserved by theCompany as per statutory requirements ofrecord retention.
For S K Patodia & Associates LLP For Batliboi & Purohit
Chartered Accountants Chartered Accountants
Firm’s Registration No: 112723W/W100962 Firm’s Registration No: 101048W
sd/- sd/-
Dhiraj Lalpuria Parag Hangekar
Partner Partner
Membership No.: 146268 Membership No.: 110096
UDIN: 26146268BBQZNA6616 UDIN: 26110096IFRCNB1761
Place: Mumbai Place: Mumbai
Date: May 13, 2026 Date: May 13, 2026