We have audited the accompanying standalone financialstatements of Hindustan Petroleum Corporation Limited(“the Company”), which comprise the Standalone BalanceSheet as at March 31, 2025, 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, 2025 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 issuedby the Institute of Chartered Accountants of India ("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 professionaljudgement, were of most significance in our audit of thestandalone financial statements of the current period. Thesematters were addressed in the context of our audit of thestandalone financial statements as a whole, and in formingour opinion thereon, and we do not provide a separateopinion on these matters. 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. Key Audit Matters
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
• We performed an understanding and evaluation of the
projects and is also in the process of executing various
system of internal control processes over the projects and
projects like expansion of refinery, installation of bio-
those included in capital work in progress, with reference
refinery and other new plants, depots, LPG bottling
to identification and testing of key controls;
plants, terminals, pipelines, etc. Since these projectstake a substantial period of time to get ready forintended use and considering the materiality of theamounts capitalized and included in Capital Work inProgress, in the context of the Balance Sheet of the
• We assessed whether the Company’s accounting policyin relation to the capitalisation of expenditures are insync and in compliance with Ind AS and found them tobe consistent;
Company, this is considered to be a key area having
• We have reviewed Board minutes relating to approvals of
significant effect on the overall audit strategy and
the projects and changes in estimates thereof;
allocation of resources in planning and completion ofour audit;
• We assessed the progress of the project and the intentionand ability of the management to bring the asset to its
• With regard to above capital projects, management
state of intended use;
has identified specific expenditure including employeecosts and other overheads relating to each of theassets in the above capital projects and has appliedjudgement to assess if the costs incurred in relation to
• We understood, evaluated and tested the design and
operating effectiveness of key controls relating tocapitalisation of various costs incurred;
these assets meet the recognition criteria of Property,
• We tested, on sample basis, the direct and indirect costs
Plant and Equipment in accordance with Ind AS 16.
capitalised, with the underlying supporting documents
• There are areas where management judgements impactthe carrying value of the property, plant and equipment,intangible assets and their respective depreciation/amortization rates. These include the decision to
to ascertain nature of costs and basis for allocation,where applicable, and evaluated whether they meet therecognition criteria provided in the Indian AccountingStandard (Ind AS) 16, Property, Plant and Equipment;
capitalise or expense costs, the annual asset life review,
• We ensured adequacy of disclosures in the standalone
the timeliness of the capitalisation of assets and the
financial statements;
use of management assumptions and estimates forthe determination or the measurement and recognitioncriteria for assets retired from active use.
• We reviewed the judgements made by the management
including the nature of underlying costs capitalized,determination of realizable value of the assets retired
This has been determined as a key audit matter due tothe significance of the capital expenditure during the yearas compared to the existing block of Property, Plant andEquipment, the risk that the elements of costs that areeligible for capitalisation are not appropriately capitalisedin accordance with the recognition criteria provided in IndAS 16, and the complex nature of the project. (Refer NoteNo. 3, 4,5 & 5A).
from active use, the appropriateness of useful livesapplied in the calculation of depreciation/amortization,the useful lives of assets prescribed in Schedule II tothe Act and the useful lives of certain assets as per thetechnical assessment of the management. We have foundthat the management has regularly reviewed aforesaidjudgements and there are no material changes.
No.
2
Evaluation of uncertain indirect tax positions
The Company has material uncertain indirect tax positionsincluding matters under dispute which involves significantjudgments and estimates to determine the possibleoutcome of these disputes. The Company has disputespending at various levels of tax authorities over thepast several years. (Refer Note No.- 53 and para (vii) (b) -Annexure I of this report).
Because of the judgement required, the area determinedto be a key audit matter.
• We have evaluated and tested the appropriatenessof the design and the operating effectiveness of themanagement’s controls over the tax litigation matters;
• We reviewed the management’s underlying assumptionsin estimating the tax provision based on the possibleoutcome of the disputes, legal precedence and otherrulings in evaluating management’s position on theseuncertain tax positions;
• We relied upon the management judgements, industrylevel deliberations and estimates for possible outflow andopinion of internal experts of the Company in relation tosuch disputed tax positions;
• We assessed the appropriateness of disclosures madeas per Ind AS 37 "Provisions, Contingent Liabilities andContingent Assets”.
3
Computation of Expected Credit Loss (ECL)
Trade receivables constitute a significant component of
• We evaluated the methodology used for age-wise
the total current assets of the Company. At each reporting
classification of trade receivables and assessed the key
date, the Company recognizes lifetime expected credit
assumptions underlying the estimated probability of
losses on these Trade receivables wherein we relied on
default. This evaluation includes verifying consistency
Management’s estimates regarding probability of default
with the Company’s historical default trends.
rates linked to age-wise bucketing of the underlyingassets. Given, the technical complexity in estimating theprobability of default; this area is considered as a key auditmatter. (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
area that involves considerable management judgment
and noted that the physical verification of inventories is
in the application of accounting policies and estimation
done by the Management at reasonable intervals.
techniques. Since, these judgments have a significantimpact on the amounts recognized in the StandaloneFinancial Statements, we have identified this area as a key
• Our audit teams conducted physical verification ofinventories on a sample basis at various locations.
audit matter. (Refer Note No. 11)
However, since physical verification at every location is notpossible, in such cases we placed reliance on the physicalverification procedures carried out by the Management.
• For inventories held at third-party locations, we reliedon the Company’s system of record-keeping related tosuch inventories.
• We also tested, on a sample basis, the values used fordetermining net realisable value and cost of inventories,and verified their consistency with the inventory valuationrecords and related accounting entries.
• We assessed that the valuation of inventories is incompliance Ind AS 2.
The Company’s management and the Board of Directors isresponsible 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 will not express any formof assurance conclusion thereon.
In connection with our audit of the standalone financialstatements, our responsibility is to read the other informationidentified above when it becomes available and, in doingso, consider whether the other information is materiallyinconsistent with the standalone financial statements, or ourknowledge obtained during the course of our audit or otherwiseappears to be materially misstated.
When we read the other information, if we conclude thatthere is a material misstatement therein, we are required tocommunicate the matter to those charged with governance.
The Company’s management and the Board of Directors isresponsible 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, changes in equity and cashflows of the Company in accordance with the accountingprinciples generally accepted in India including the IndianAccounting Standards specified under section 133 of the Act.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 accountingrecords, relevant to the preparation and presentation of thestandalone financial statements that give a true and fair view
and 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 eitherintends to liquidate the Company or to cease operations, or hasno realistic alternative but to do so.
The Board of Directors are also responsible for overseeing theCompany’s financial reporting process.
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. The riskof not detecting a material misstatement resulting fromfraud is higher than for one resulting from error, as fraudmay involve collusion, forgery, intentional omissions,misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant tothe audit in order to design audit procedures that areappropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing ouropinion 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 continueas a going concern. If we conclude that a materialuncertainty exists, we are required to draw attentionin our auditors’ report to the related disclosures in thestandalone financial statements or, if such disclosuresare inadequate, to modify our opinion. Our conclusionsare based on the audit evidence obtained up to thedate of our auditors’ report. However, future events orconditions may cause the Company to cease to continueas 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 theStandalone Financial Statements that, individually or inaggregate, makes it probable that the economic decisions ofa reasonably knowledgeable user of the standalone financialstatements may be influenced. We consider quantitativemateriality and qualitative factors in (i) planning the scope ofour audit work and in evaluating the results of our work; and(ii) to evaluate the effect of any identified misstatements inthe Standalone Financial 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 statementsof 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.
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 ? 47,607.28 Crore as at March 31, 2025,total revenues of ? 1,05,008.74 Crore, net profit after taxof ? 302.85 Crore and total comprehensive income of? 285.32 Crore for year ended March 31, 2025. The financialstatements of the Visakh Refinery of the Company havebeen audited by the Branch Auditor of the Company. TheBranch Auditors’ report dated April 17, 2025, has beenfurnished to us and our opinion in so far as it relates tothe amounts and disclosures included in respect of thisbranch, is based solely on the report of such 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 ? 3.09 Croreand ? 1.64 Crore respectively, as on March 31, 2025, andIncome and Expenditure amounting to ? 2.73 Crore and? 2.04 Crore for the year ended March 31, 2025, 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 categorisationof 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, 2024, were audited by the
previous joint auditors, one of which is predecessor auditfirm and have expressed an unmodified opinion on suchstandalone financial statements.
Our opinion is not modified in respect of these matters.
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, 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. As required by Section 143 (3) of the Act, 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 required bylaw have been kept by the Company so far as it appearsfrom our examination of those books and proper returnsadequate for the purposes of our audit have been receivedfrom branch not visited by us;
c) The report dated April 17, 2025, on the accounts of theVisakh Refinery of the Company, issued under section143(8) of the Act by the Branch Auditors upon their auditof the books of account of Visakh Refinery has beenforwarded to us and have been properly dealt with by us inpreparing our report in the manner considered necessaryby us;
d) The Balance Sheet, the Statement of Profit and Lossincluding Other Comprehensive Income, Statement ofChanges in Equity and the Statement of Cash Flows dealtwith by this Report are in agreement with the booksof account;
e) In our opinion and to the best of our information andaccording to the explanations given to us, the aforesaidstandalone financial statements comply with the Indian
Accounting Standards specified under section 133 of theAct read with Companies (Indian Accounting Standard)Rules, 2015 as amended;
f) As per notification no. G.S.R 463(E) dated June 5, 2015,the Government Companies are exempted from theprovisions of section 164(2) of the Act, accordingly, we arenot required to report whether any of the directors of theCompany is disqualified in terms of provisions containedin the said section;
g) With respect to the adequacy of the internal financialcontrols with reference to standalone financial statementsof the Company and the operating effectiveness of suchcontrols, refer to our separate Report in "Annexure III”;
h) With respect to the other matters to be included in theAuditors’ Report in accordance with the requirements ofsection 197(16) of the Act, as amended we report that:
As per Notification number G.S.R. 463 (E) dated June 5,2015 issued by Ministry of Corporate Affairs, section 197of the Act regarding remuneration to directors is notapplicable to the Government Company; and hence weare not required to report as to whether the remunerationpaid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act;
i) With respect to the other matters to be included inthe Auditors’ Report in accordance with Rule 11 of theCompanies (Audit and Auditors) Rules, 2014, as amended,in our opinion and to the best of our information andaccording to the explanations given to us:
i. The Company has disclosed the impact of pendinglitigations on its financial position in its standalonefinancial statements (Refer Note No.53 of thestandalone financial statements);
ii. The Company has made provision, as required underthe applicable law or accounting standards, formaterial foreseeable losses, if any, on long-termcontracts including derivative contracts (Refer NoteNo. 54 to the standalone financial statements);
iii. There has been no delay in transferring amounts,required to be transferred, to the Investor Educationand 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 loaned or invested(either from borrowed funds or share premiumor any other sources or kind of funds) by theCompany to or in any other person or entity,including foreign entity (“Intermediaries”),with the understanding, whether recorded inwriting or otherwise, that the Intermediaryshall, whether, directly or indirectly lend orinvest in other persons or entities identified inany manner whatsoever by or on behalf of theCompany (“Ultimate Beneficiaries”) or provideany guarantee, security or the like on behalf ofthe Ultimate Beneficiaries;
(b) The Management has represented, that, tothe best of its knowledge and belief, no fundshave been received by the Company fromany person or entity, including foreign entity(“Funding Parties”), with the understanding,whether recorded in writing or otherwise,that the Company shall, whether, directly orindirectly, lend or invest in other persons orentities identified in any manner whatsoeverby or on behalf of the Funding Party (“UltimateBeneficiaries”) or provide any guarantee,security or the like on behalf of the UltimateBeneficiaries; and
(c) Based on such audit procedures that havebeen considered reasonable and appropriate
in the circumstances, nothing has come to ournotice that has caused us to believe that therepresentations under sub-clause (i) and (ii) ofRule 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 previous year, is inaccordance with section 123 of the Act to theextent it applies to payment of dividend;
(b) As stated in note no. 48 to the standalonefinancial statements, the Board of Directorsof the Company have proposed final dividendfor the year which is subject to the approvalof the members at the ensuing Annual GeneralMeeting. The dividend declared is in accordancewith section 123 of the Act to the extent itapplies to declaration of dividend.
vi. Based on our examination which included testchecks, the Company has used accounting softwarefor maintaining its books of account which hasa feature of recording audit trail (edit log) facilityand the same has operated throughout the year forall relevant transactions recorded in the software.Further, during the course of our audit we did notcome across any instance of audit trail feature beingtampered with and the same has been preserved asper statutory requirements of record retention.
For J Singh & Associates For S K Patodia & Associates LLP
Chartered Accountants Chartered Accountants
Firm’s Registration No: 110266W Firm’s Registration No: 112723W/W100962
sd/- sd/-
J Singh Dhiraj Lalpuria
Partner Partner
Membership No.: 042023 Membership No.: 146268
UDIN: 25042023BMLIQV3740 UDIN: 25146268BMIXID5795
Place: Mumbai Place: Mumbai
Date: May 6, 2025 Date: May 6, 2025