We have audited the accompanying standalone financial statements of Indian Oil Corporation Limited (the "Company”), whichcomprise the Balance Sheet as at March 31, 2025, the Statement of Profit and Loss (including Other Comprehensive Income), theStatement of Changes in Equity and the Statement of Cash Flows for the year ended on that date and notes to the financial statements,including a summary of material accounting policies and other explanatory information (hereinafter referred to as the "StandaloneFinancial Statements”).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financialstatements give the information required by the Companies Act, 2013 (the "Act”) in the manner so required and give a true and fair viewin conformity with Indian Accounting Standards specified under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015, as amended and other accounting principles generally accepted in India, of the state of affairs of the Company asat March 31,2025, and profit including other comprehensive income, changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs) specified undersection 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditors' Responsibilities for theAudit of the standalone financial statements section of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India ("ICAI”), together with the ethical requirements that are relevant to ouraudit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financialstatements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as awhole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the mattersdescribed below to be the key audit matters to be communicated in our report:
Key Audit Matters
Auditors' response to Key Audit Matters
Property, Plant & Equipment and Intangible Asset
There are areas where management judgement impacts thecarrying value of property, plant and equipment, intangible assets,and their respective depreciation/amortisation rates. These includethe decision to capitalise or expense costs; the annual asset lifereview; the timeliness of the capitalisation of assets and the use ofmanagement assumptions and estimates for the determination or themeasurement and recognition criteria for assets retired from activeuse. Due to the materiality in the context of the Balance Sheet of theCompany and the level of judgement and estimates required, weconsider this to be as area of significance.
(Refer Note No. 2 & 3 to the Standalone Financial Statements)
We assessed the controls in place over the fixed asset cycle, evaluatedthe appropriateness of capitalisation process, performed tests ofdetails on costs capitalised, the timeliness of the capitalisation ofthe assets and the de-recognition criteria for assets retired fromactive use.
In performing these procedures, we reviewed the judgements madeby management including the nature of underlying costs capitalised;determination of realizable value of the assets retired from activeuse; the appropriateness of assets lives applied in the calculation ofdepreciation/amortisation; the useful lives of assets prescribed inSchedule II to the Act and the useful lives of certain assets as perthe technical assessment of the management. We observed that themanagement has regularly reviewed the aforesaid judgements andthere are no material changes.
Provision for Direct Taxes
The Company has uncertain direct tax positions including mattersunder dispute which involves significant judgment relating to thepossible outcome of these disputes in estimation of the provision forincome tax. Because of the judgement required, this area is consideredas a key audit matter.
(Refer Note No. 7 to the Standalone Financial Statements)
Our audit procedures involved assessment of the management's underlyingassumptions in estimating the tax provision and the possible outcome ofthe disputes taking into account the legal precedence, jurisprudence andother rulings in evaluating management's position on these uncertaindirect tax positions. We have also assessed the disclosures made by thecompany in this regard in standalone financial statements
Provisions, Contingencies and Litigations
The Company is involved in various taxes and other disputes for whichfinal outcome cannot be easily predicted and which could potentiallyresult in significant liabilities. The assessment of the risks associatedwith the litigations is based on complex assumptions, which requirethe use of judgement, and such judgement relates, primarily, to theassessment of the uncertainties connected to the prediction of theoutcome of the proceedings and to the adequacy of the disclosuresin the standalone financial statements. Because of the judgementrequired, the materiality of such litigations and the complexity of theassessment process, this area is considered as a key audit matter.
(Refer Note No. 18, 36B & 49.5 to the Standalone Financial Statements)
Our audit procedures in response to this Key Audit Matter included,
among others,
• Assessment of the process and relevant controlsimplemented to identify legal and tax litigations and pendingadministrative proceedings.
• Assessment of assumptions used in the evaluation of potentiallegal and tax risks performed by the legal and tax department ofthe Company considering the legal precedence and other rulingsin similar cases.
• Inquiry with the legal and tax departments regarding the statusof the most significant disputes and inspection of the keyrelevant documentation.
• Analysis of opinion received from the experts wherever available.
• Review of the adequacy of the disclosures in the notes to thestandalone financial statements.
Investments in Subsidiaries, Joint Ventures and Associates
Investments in subsidiaries, joint ventures and associates whichare valued at cost have been adjusted for impairment losses in linewith "Ind AS 36 Impairment of assets". In case there is an indicationof possible impairment, the Company carries out an impairment testby comparing the recoverable amount of the investments determinedaccording to the value in use method and their carrying amount. Thevaluation process adopted by management is complex and is basedon a series of assumptions, such as the forecast cash flows, theappropriate discounting rate and the growth rate. These assumptionsare, by nature, influenced by future expectations regarding theevolution of external market.
Since judgement of the management is required to determinewhether there is indication of possible impairment and consideringthe subjectivity of the estimates relating to the determination of thecash flows and the key assumptions of the impairment test, the areais considered as a key audit matter.
(Refer Note No. 4 to the Standalone Financial Statements)
With reference to this key audit matter, we considered the following:
• Comparing the carrying amount of investments with financialstatements of investee companies to identify whether their netassets value, being an approximation of their minimum recoverableamount, were in excess of their carrying amount.
• Market capitalization in case of listed entities in which investmentshave been made.
• Certain entities where carrying value of Investments is less thanthe Net Assets Value due to being in the construction stage andhave not begun commercial operations.
Based on the information and explanations obtained as above, weconcluded that the Management's judgement regarding indicationof impairment in certain investments during the year is appropriate.Where there is indication of impairment, we examined the approachtaken by management to determine the value of the investments,analysed the methods and assumptions applied by managementto carry out the impairment test and the reports obtained from theexperts in valuation.
The following audit procedures were adopted:
• identification and understanding of the significant controlsimplemented by the Company over the impairment testing process;analysis of the reasonableness of the principal assumptions madeto estimate their cash flows, and obtaining other information frommanagement that we deemed to be significant;
• analysis of actual data of the year and previous years in comparisonwith the original plan, in order to assess the nature of variancesand the reliability of the planning process;
• assessment of the reasonableness of the discount rateand growth rate;
• Verification of the mathematical accuracy of the model used todetermine the value in use of the investments.
We also examined the adequacy of the information provided by theCompany about the impairment test and its consistency with therequirements of Ind AS 36.
The Company's Board of Directors is responsible for the preparation of the other information. The other information comprises theinformation included in the Management Discussion and Analysis, Board's Report including Annexures to Board's Report, BusinessResponsibility and Sustainability Report, Corporate Governance, but does not include the Standalone Financial Statements and ourauditors' reports thereon.
The above referred information is expected to be made available to us after the date of this audit report.
Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assuranceconclusion thereon.
In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information identified abovewhen it becomes available and, in doing so, consider whether the other information is materially inconsistent with the StandaloneFinancial Statements, or our knowledge obtained in the audit or otherwise appears to be materially misstated.
When we read other information, if we conclude that there is a material misstatement therein, we are required to communicate the matterto those charged with governance and take appropriate actions necessitated by the circumstance and the applicable laws and regulations.
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 thesestandalone financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income,changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including theIndian Accounting Standards (Ind AS) specified under section 133 of the Act. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing anddetecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimatesthat are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operatingeffectively for ensuring the accuracy and completeness of the accounting records, 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 fraud or error.
In preparing the standalone financial statements, the Board of Directors is responsible for assessing the Company's ability to continueas a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unlessthe management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company's financial reporting process.
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from materialmisstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatementwhen it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they couldreasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout theaudit. We also:
• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, designand perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting fromerror, 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 thecircumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to standalone Financial Statements in place and the operating effectivenessof such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosuresmade by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidenceobtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of theCompany to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in ourauditors' report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modifyour opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future eventsor conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures,and whether the standalone financial statements represent the underlying transactions and events in a manner that achievesfair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit andsignificant 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 regardingindependence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on ourindependence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in theaudit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters inour auditors' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, wedetermine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
(a) The standalone financial statements include the Company's proportionate share (relating to Jointly controlled operations of E&Pactivities, wherein the company is not an operator) in assets ?1,023.46 Crore and liabilities J298.28 Crore as at March 31,2025 andtotal revenue of ?262.94 Crore, expenditure of ?234.90 crore and profit before tax of ?28.04 Crore for the year ended on that dateand in items of the statement of cash flow and related disclosures contained in the enclosed standalone financial statements. Ourobservations thereon are based on unaudited statements from the operators to the extent available with the Company in respectof 24 Blocks (out of which 7 Blocks are relinquished) in India and overseas and have been certified by the management. Ouropinion in respect thereof is solely based on the management certified information. According to the information and explanationsgiven to us by the Company's management, these are not material to the Company.
We have also placed reliance on technical/ commercial evaluations by the management in respect of categorisation of wells asexploratory, development and dry well, allocation of cost incurred on them, liability under New Exploration Licensing Policy (NELP)and nominated blocks for under-performance against agreed Minimum Work Programme.
(b) The Standalone Financial Statements of the Company for the year ended March 31,2024 were jointly audited by M/s. KhandelwalJain & Co., M/s. K G Somani & Co LLP, M/s. Komandoor & Co LLP and M/s. S R B & Associates, and they had expressed anunmodified opinion on Standalone Financial Statements vide their report dated April 30, 2024.
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 of India in terms ofsub- section (11) of Section 143 of the Act, we give in the "Annexure A” a statement on the matters specified in the paragraphs 3and 4 of the said Order, to the extent applicable.
2. We are enclosing our report in terms of Section 143 (5) of the Act, on the basis of such checks of the books and records of theCompany as we considered appropriate and according to the information and explanations given to us, in the "Annexure B” on thedirections issued by the Comptroller and Auditor General of India.
3. 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 werenecessary for the purposes of our audit.
b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from ourexamination of those books.
c. The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, Statement of Changes in Equityand the Statement of Cash Flows dealt with by this Report are in agreement with the books of account.
d. In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified underSection 133 of the Act.
e. As the company is a Government Company, in terms of notification no. G.S.R. 463(E) dated 5th June 2015, issued by theMinistry of Corporate Affairs, the sub-section (2) of section 164 of the Act is not applicable to the company.
f. With respect to the adequacy of the internal financial controls with reference to standalone financial statements of theCompany and the operating effectiveness of such controls, refer to our separate report in "Annexure C”.
g. As the company is a Government Company, in terms of notification no. G.S.R. 463(E) dated 5th June 2015, issued by the
Ministry of Corporate Affairs, the sub-section (16) of section 197 of the Act is not applicable to the company
h. 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, 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 financialstatements-Refer Note 36B and 49.5 to the standalone financial statements.
ii. The Company has made provision, as required under the applicable law or Indian accounting standards, for materialforeseeable losses, if any, on long term contracts including derivative contracts - Refer Note 18 to the standalonefinancial statements.
iii. There has been no delay in transferring the amount, required to be transferred to the Investor Education and ProtectionFund by the Company.
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 funds or share premiumor any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity("Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether,directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of theCompany ("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 material eitherindividually or in the aggregate) have been received by the Company from any person or entity, including foreignentity ("Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Companyshall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoeverby or on behalf of the Funding Party ("Ultimate Beneficiaries”) or provide any guarantee, security or the like onbehalf of the Ultimate Beneficiaries; and
c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances,nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii)of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.
v. As stated in Note 31 to the standalone financial statements:
a) The final dividend paid by the Company during the year in respect of the same declared for the previous year is incompliance with section 123 of the Act to the extent it applies to payment of dividends.
b) The Board of Directors of the Company has proposed final dividend for the year which is subject to the approvalof the members at the ensuing Annual General Meeting. The dividend declared is in accordance with section 123of the Act to the extent it applies to declaration of dividend.
vi. Based on our examination, which included test checks, the Company has used accounting software for maintainingits books of account for the financial year ended March 31,2025 which has a feature of recording audit trail (edit log)facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further,during our audit we did not come across any instance of the audit trail feature being tampered with. Additionally, theaudit trail has been preserved by the company as per the statutory requirements for record retention
For KHANDELWAL JAIN & CO For K G SOMANI & CO LLP For M K P S & ASSOCIATES LLP For KOMANDOOR & CO LLP
Chartered Accountants Chartered Accountants Chartered Accountants Chartered Accountants
Firm Regn. No. Firm Regn. No. Firm Regn. No. Firm Regn. No.
105049W 006591N/N500377 302014E/W101061 001420S/S200034
Sd/- Sd/- Sd/- Sd/-
Naveen Jain Amber Jaiswal Narendra Khandal Nagendranadh Tadikonda
Partner Partner Partner Partner
M. No. 511596 M. No. 550715 M. No. 065025 M. No. 226246
UDIN: 25511596BMIVZN7875 UDIN: 25550715BMJBVR7606 UDIN: 25065025BMNQPV4428 UDIN: 25226246BMIGKB6533
Place: New Delhi
Date: 30th April 2025
KHANDELWAL JAIN & CO K G SOMANI & CO LLP M K P S & ASSOCIATES LLP KOMANDOOR & CO LLP
6-B, PIL Court, 6th Floor, 3/15, Asaf Ali Road, 4th Floor 12, Radha Nath Malick Lane, Fortuna Tower, Room No 40,
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Mumbai - 400 020 New Delhi - 110 002 Kolkata - 700 012