1. We have audited the accompanying Standalone Ind AS Financial Statements of Bharat Petroleum Corporation Limited ("theCorporation"), which comprise the Balance Sheet as at March 31, 2026, the Statement of Profit and Loss (including OtherComprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year ended on thatdate, and notes to the Standalone Ind AS Financial statements, including a summary of material accounting policies and otherexplanatory information (hereinafter referred to as "the Standalone Ind AS Financial Statements").
2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone IndAS Financial Statements give the information required by the Companies Act, 2013, as amended ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 ofthe Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended ("Ind AS"), and other accountingprinciples generally accepted in India, of the state of affairs of the Corporation as at March 31, 2026, its profit including othercomprehensive income, its cash flows and changes in equity for the year ended on that date.
Basis for Opinion
3. 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'sResponsibilities for the Audit of the Standalone Ind AS Financial Statements section of our report. We are independent of theCorporation in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India ("ICAI") togetherwith the ethical requirements that are relevant to our audit of the Standalone Ind AS Financial Statements under the provisionsof the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with theserequirements and the ICAI's Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our audit opinion on the Standalone Ind AS Financial Statements.
Key Audit Matters
4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the StandaloneInd AS Financial Statements for the financial year ended March 31, 2026. These matters were addressed in the context of ouraudit of the Standalone Ind AS 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 is provided inthat context. We have determined the matters described below to be the key audit matters to be communicated in our report.
Sr.
No.
Key Audit Matter
How the Key Audit Matter was addressed in our audit
1.
Valuation of Investment and Financial guarantee contractsin Subsidiary engaged in exploration & evaluation,development, and production activities (E&P). (Refer Note7 and Note 56):
The Corporation has an investment of I 15,426.37 croresand corporate guarantee USD 3,700.26 million equivalentto I 35,024.51 crores as at March 31, 2026 to the extentof loan availed/drawdown in wholly owned subsidiary BharatPetroResources Ltd (BPRL) and its stepdown subsidiaries,associates & Joint ventures (JVs). This subsidiary alongwith its stepdown subsidiaries, Associates & JVs holdsparticipating interest in various oil/gas blocks.
The Corporation's realisation from these E&P investmentsis dependent on the continued successful operations/development of reserves resulting in expected earningsand revenue growth of the respective companies. BPRLhas relinquished or impaired certain oil and gas blocks onaccount of changes in circumstances and prospects of theblocks.
The above factors have impacted the value in use ofBPRL's assets and accordingly the Corporation has carriedimpairment analysis in respect of its Investment in BPRL.Accordingly, we considered this as a Key Audit Matter.
The following procedures were carried out in this regard:
• We evaluated the design, implementation and operating effectivenessof key controls in relation to the annual impairment testing activitycarried out by the Corporation for its investment in Subsidiary.
• We reviewed the audited Consolidated Ind AS Financial Statements ofBPRL for FY 2025-26 and the independent auditor's report thereon.
• We have verified the board resolutions/Board Minutes confirmingthe limits allowed for giving the guarantee, periodic reassessment ofguarantee obligation given and inspection of guarantee agreementand infusion of equity.
• We assessed the Management's explanation regarding key factorswhich have led to significant diminution in value of BPRL's assets vis¬a-vis the previous year and consequent trigger for impairment of theCorporation's investment in the same.
• We evaluated the impairment analysis carried out during the yearby the Corporation, which included an independent comparisonof assessed value in use of BPRL's Net Assets with carrying costof investment in BPRL in the Corporation's Books of Account. Thisimpairment analysis has been carried out by independent valuer & wehave relied upon their report.
2.
Computation of Expected Credit Loss (ECL): (Refer Note9, 15 and Note 18)
Trade receivables and loans granted under the PradhanMantri Ujjwala Yojana (PMUY) scheme constitute asignificant component of the total current assets of theCorporation.
At each reporting date, the Corporation recognizes LifetimeECL on Trade Receivables using a 'simplified approach' and6 months ECL on loans granted under the PMUY schemewherein we relied on Management's estimates regardingprobability of default rates linked to age-wise bucketingof the corresponding asset and full provision is applied tocases involving zero subsidy or consumers inactive for thepast two years. Since, this is a technical matter based onprobable outcome of default, we considered this as a KeyAudit Matter.
Our audit approach consisted testing of the design implementation andoperating effectiveness of the internal controls and substantive testing asfollows:
• In respect of loans granted under PMUY, the Corporation has adopteda methodology for calculating ECL in terms of Ind AS 109 (FinancialInstruments), based on the broad category of active and inactiveconsumers and last refill date with expected loan recovery period. Wechecked the working of the same and it is in line with the commonmethodology document shared with us.
• We have evaluated the methodology for age-wise bucketing of tradereceivables and key assumptions underlying the probability of defaultestimates on the same, to ascertain that the same were broadly in-linewith the Corporation's historical default rates and have consideredavailable information regarding the current economic scenario.
• We selected a few samples of outstanding receivable cases havingdifferent overdue periods and checked that the computation of ECLhas been appropriately carried out in line with the Corporation's policy.
3.
Evaluation of Contingent Liabilities: (Refer Note 64)
Contingent liabilities disclosed are in respect of items whichin each case are above the threshold limit. The Corporationhas material uncertain positions including matters underdispute which involves significant judgement to determinethe possible outcome of these disputes. Contingentliabilities are not recognized in the Standalone Ind ASFinancial Statements but are disclosed unless the possibilityof an outflow of economic resources is considered remote.In view of significant management estimate and judgementinvolved, we considered this as a Key Audit Matter.
The following audit procedures were carried out in this regard:
• We examined sample items above the threshold limit for determinationof contingent liabilities and obtained details of complete Excise, VAT/Sales Tax/Goods and Service Tax (GST), Entry Tax assessments,demands as well as other disputed claims against the Corporationas on March 31, 2026. The Corporation has obtained opinion fromexternal experts/consultants in various disputed matters. We haverelied upon such opinions and litigation history where the Corporationhas concluded that possibility of cash outflow is remote whilepreparing its Standalone Ind AS Financial Statements.
• We have assessed the Management's underlying assumptions inestimating the possible outcome of such disputed claims/casesagainst the Corporation, based on records and judicial precedentsmade available.
4.
Inventories: (Refer Note 13)
Verification and valuation of Inventories and related writedown, if any, is a significant area requiring Management'sjudgement of estimates and application of accountingpolicies that have significant effect on the amountsrecognized in the Standalone Ind AS Financial Statements.Accordingly, we considered this as a Key Audit Matter.
Our audit approach involved the following combination of test of controldesign, implementations, operating effectiveness and substantive testingin respect of verification and valuation of inventories:
• We evaluated the system of inventory monitoring and control. Itwas observed that inventory has been physically verified by theManagement during the year at reasonable intervals.
• Our audit teams have also physically verified on sample basis,the Inventories at various locations and compliance with cut offprocedures. However, since physical verification at certain locationswas not possible for us, in such cases we have relied on the physicalverification of inventory carried out by the Management.
• 1 n respect of inventory lying with third parties, we have ascertainedthat these have substantially been confirmed by them. We alsoexamined the system of records maintenance for stocks lying at thirdparty locations.
• We have also tested the values considered in respect of Net realisablevalue, cost of inventories including raw materials, intermediary goodsand verified these on sample basis with the inventory valuation andaccounting entries posted in this regard.
5.
Property, Plant and Equipment ('PPE'): (Refer Note 2)
Management Judgement impacts the carrying value of PPE.These includes, estimates of useful lives and residual valueof PPE, decision to capitalise or expense costs, the timingof the capitalisation of assets is a significant area requiringManagement judgement of estimates and application ofaccounting policies that have significant effect on theamounts recognized in the Standalone Ind AS FinancialStatements. Accordingly, we considered this as a Key AuditMatter.
Our audit approach involved the following combination of test of controldesign, implementations and operating effectiveness and substantivetesting in respect of verification and recording of PPE:
• We examined whether the Corporation has maintained proper recordsshowing full particulars, including quantitative details and situation ofPPE.
• The physical verification of PPE (except LPG Cylinders and pressureregulators with customers) has been carried out by the Managementin accordance with the phased program of verification of all assetsand necessary accounting entries based on such physical verificationhave been appropriately posted which were verified by us on samplebasis.
• Changes in the useful life and residual value of class of assets, if any,were adopted based on internal evaluation of management and wasalso compared with other entities in the same industry.
• We have tested the computation of depreciation on sample basis.We assessed the controls in place over the PPE cycle, evaluated theappropriateness of capitalisation process, performed tests of detailson costs capitalised, the timing of the capitalisation of the assets.
6.
Information Technology
Our procedures included:
A significant part of the Corporation's financial reportingprocess is heavily reliant on IT systems with automatedprocesses and controls over the capture, storage andextraction of information. A fundamental component ofthese processes and controls is ensuring appropriate useraccess and change management protocols exist and beingadhered to.
We focused our audit on those IT systems and controls that arerelevant to preparation of financial statements for financial year endedMarch 31, 2026.
As audit procedures over IT Systems and controls require specific expertise,we involved our IT specialist.
Our review of the IT Controls covers the following areas:
These protocols are important because they ensure thataccess and changes to IT systems and related data aremade and authorized in an appropriate manner. As ouraudit sought to place a high level of reliance on IT systemsand application controls related to financial reporting, highproportion of the overall audit effort was in InformationTechnology (IT) Systems and Controls.
We focused our audit on those IT systems and controlsthat are significant to the Corporation's financial reportingprocess.
Accordingly, we considered this as a Key Audit Matter.
• Physical and Logical Security;
• Change Management;
• Backup, Business Continuity and
• IT Operations.
Our assessment of the IT Controls is performed according to the followingapproach:
• Understanding the IT environment.
• Information gathering about the control framework surrounding the ITenvironment.
• Evidence gathering with respect to Control testing.
• Review of Implementation of controls testing.
Review of limited cases to identify whether there had been unauthorizedor inappropriate access or changes made to critical IT systems and relateddata.
Information Other than the Standalone Ind AS Financial Statements and Auditors' Report Thereon
5. The Corporation's Management and Board of Directors are responsible for the preparation of the other information. The otherinformation comprises the information included in the Corporation's annual report but does not include the Standalone IndAS Financial Statements and our auditor's report thereon. The Corporation's annual report is expected to be made available tous after the date of this Auditors' report.
Our opinion on the Standalone Ind AS Financial Statements does not cover the other information and we do not express anyform of assurance conclusion thereon.
6. In connection with our audit of the Standalone Ind AS Financial Statements, our responsibility is to read the other informationand, in doing so, consider whether such other information is materially inconsistent with the Standalone Ind AS FinancialStatements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
7 If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we arerequired to communicate the matter to those charged with governance and take necessary actions, as applicable under therelevant laws and regulations.
Responsibilities of Management and Those Charged with Governance for the Standalone Ind ASFinancial Statements
8. The Corporation's Management and Board of Directors are responsible for the matters stated in section 134(5) of theAct with respect to the preparation of these Standalone Ind AS Financial Statements that give a true and fair view of thefinancial position, financial performance including the other comprehensive income, cash flows and changes in equity of theCorporation in accordance with the Ind AS and other accounting principles generally accepted in India, including the Ind ASspecified 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 Actfor safeguarding the assets of the Corporation and for preventing and detecting frauds and other irregularities; selectionand application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; anddesign, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuringthe accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone IndAS Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
9. In preparing the Standalone Ind AS Financial Statements, the management and Board of Directors are responsible for assessingthe Corporation's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and usingthe going concern basis of accounting unless the Board of directors either intends to liquidate the Corporation or to ceaseoperations, or has no realistic alternative but to do so.
10. The Corporation's Board of Directors are also responsible for overseeing the Corporation's financial reporting process.
Auditor's Responsibilities for the Audit of the Standalone Ind AS Financial Statements
11. Our objectives are to obtain reasonable assurance about whether the Standalone Ind AS Financial Statements as a wholeare 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 willalways detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered materialif, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken onthe basis of these Standalone Ind AS Financial Statements.
12. As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional skepticism throughoutthe audit. We also:
• Identify and assess the risks of material misstatement of the Standalone Ind AS Financial Statements, whether due tofraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficientand appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud ishigher 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 appropriatein the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whetherthe Corporation 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 relateddisclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the auditevidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt onthe Corporation's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are requiredto draw attention in our auditor's report to the related disclosures in the Standalone Ind AS Financial Statements or, if suchdisclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditors' report. However, future events or conditions may cause the Corporation to cease to continue as agoing concern.
• Evaluate the overall presentation, structure and content of the Standalone Ind AS Financial Statements, including thedisclosures, and whether the Standalone Ind AS Financial Statements represent the underlying transactions and events ina manner that achieves fair presentation.
13. Materiality is the magnitude of misstatements in the Standalone Ind AS Financial Statements that, individually or in aggregate,makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and inevaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Standalone Ind ASFinancial Statements.
14. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of theaudit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
15. We also provide those charged with governance with a statement that we have complied with relevant ethical requirementsregarding independence, and to communicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence, and where applicable, related safeguards.
16. From the matters communicated with those charged with governance, we determine those matters that were of mostsignificance in the audit of the Standalone Ind AS Financial Statements of the current period and are therefore the key auditmatters. We describe these matters in our auditors' report unless law or regulation precludes public disclosure about thematter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our reportbecause the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits ofsuch communication.
Report on Other Legal and Regulatory Requirements
17. As required by the Companies (Auditor's Report) Order, 2020 ("the Order") issued by the Central Government in terms ofSection 143(11) of the Act, and on the basis of verification of the books and records of the Corporation, as we consideredappropriate and according to the information and explanations given to us, we give in the "Annexure A" a statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.
18. As required under section 143(5) of the Act, based on our audit as aforesaid, we give in the Annexure B, a report on thedirections issued by the Comptroller and Auditor General of India, action taken thereon and its impact on the accounts andstandalone financial statements of the Corporation.
19. The Corporation did not comply with the requirements relating to optimum combination of Independent Directors on its Boardas prescribed under Regulation 17(1)(a)/(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015throughout the year. Further, owing to non-availability of the requisite number of Independent Directors from March 28, 2026,the Corporation was not in compliance with the requirements relating to Board composition and constitution of mandatorycommittees as prescribed under Sections 149(4), 177 and 178 of the Companies Act, 2013 and Regulations 18, 19, 20 and21 of the SEBI Listing Regulations. Further, the Corporation did not have a woman director on its Board from March 10, 2026,as required under Section 149(1) of the Companies Act, 2013 and consequently not in compliance with Regulation 17(1)(a) ofthe SEBI Listing Regulations, which also includes optimum combination of board that requires minimum of one women director.
20. A. 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 beliefwere necessary for the purposes of our audit.
b) In our opinion, proper books of account as required by law have been kept by the Corporation so far as it appearsfrom our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement ofCash Flows and Statement of Changes in Equity dealt with by this Report are in agreement with the relevant booksof account.
d) In our opinion, the aforesaid Standalone Ind AS Financial Statements comply with the Indian Accounting Standardsspecified under Section 133 of the Act, read with Companies (Indian Accounting Standard) Rules, 2015 as amended.
e) The Corporation being a Government Company, the provisions of Section 164(2) of the Act relating to disqualificationof directors is not applicable in view of the Notification No: G.S.R, 463(E) dated 5th June, 2015, issued by the Ministryof Corporate Affairs;
f) With respect to the adequacy of the internal financial controls over financial reporting of the Corporation and theoperating effectiveness of such controls, refer to our separate Report in "Annexure C" to this report.
B. With respect to the other matters to be included in the Auditors' 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 theexplanations given to us:
i. The Corporation has disclosed the impact, if any, of pending litigations on its financial position in its Standalone IndAS Financial Statements. (Refer Note 64 of the Standalone Ind AS Financial Statements)
ii. The Corporation has made provision, as required under the applicable law or accounting standards, for materialforeseeable losses, if any, on long-term contracts including derivative contracts.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and ProtectionFund by the Corporation.
iv. a) The Management has represented 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 fundsor share premium or any other sources or kind of funds) by the Corporation 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 inany manner whatsoever by or on behalf of the Corporation ("Ultimate Beneficiaries") or provide any guarantee,security or the like on behalf of the Ultimate Beneficiaries;
b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are materialeither individually or in the aggregate) have been received by the Corporation from any person or entity,including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise,that the Corporation shall, whether, directly or indirectly, lend or invest in other persons or entities identified inany 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) of the Companies (Auditor and Auditors) Rules, 2014, as provided under (a) and (b) above,contain any material misstatement.
v. The Corporation has complied with section 123 of the Act with respect to (a) the final dividend proposed in previousyear and paid in current year; and (b) the interim dividends declared and paid during the current year.
vi. Based on our examination which included test checks, the Corporation has used accounting software for maintainingits books of account which have a feature of recording audit trail (edit log) facility and the same has operatedthroughout the year for all relevant transactions recorded in the software. Further, during the course of our auditwe did not come across any instance of audit trail feature being tampered with. Additionally, the audit trail has beenpreserved by the Corporation as per the statutory requirements for record retention.
C. The Corporation being a Government Company, the provisions of Section 197 of the Act relating to managerialremuneration is not applicable in view of the Notification No: G.S.R, 463(E) dated 5th June, 2015, issued by the Ministryof Corporate Affairs. Accordingly, reporting in accordance with requirement of provisions of Section 197(16) of the Actis not applicable to the Corporation.
For M M NISSIM & CO LLP For Manohar Chowdhry & Associates
Chartered Accountants Chartered Accountants
Firm Registration No: 107122W/W100672 Firm Registration No: 001997S
Sd/- Sd/-
N Kashinath M S N M Santosh
Partner Partner
Membership No: 036490 Membership No: 221916
UDIN:26036490ZZSZYO5672 UDIN: 26221916BKPEQP5614
Place: Mumbai Place: Mumbai
Date: May 19, 2026 Date: May 19, 2026