We have audited the accompanying standalone financial
statements of Bharat Heavy Electricals Limited ("the
Company”), which comprise the Balance Sheet as at March
31, 2026, the Statement of Profit and Loss (including Other

Comprehensive Income), the Statement of Changes in Equity
and the Statement of Cash Flows for the year then ended,
and notes to the standalone financial statements, including
a summary of the material accounting policies and other
explanatory information (hereinafter referred to as “the
Standalone financial statements") in which are incorporated
the returns for the year ended on that date for 11 branches
audited by us and 14 branches audited by the branch auditors
of the company.

In our opinion and to the best of our information and
according to the explanations given to us, the aforesaid
financial statements give the information required by the
Companies Act, 2013 (“the Act") in the manner so required
and give a true and fair view in conformity with the Indian
Accounting Standards prescribed under section 133 of the
Act read with the Companies (Indian Accounting Standards)
Rules 2015, as amended, (“Ind AS") and other accounting
principles generally accepted in India, of the state of affairs of
the Company as at March 31, 2026, its profit including other
comprehensive income, its changes in equity and 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 under section 143 (10) of the Companies Act,
2013. Our responsibilities under those Standards are further
described in the Auditor's Responsibilities for the Audit
of the Financial Statements section of our report. We are
independent of the Company in accordance with the Code
of Ethics issued by the Institute of Chartered Accountants
of India together with the ethical requirements that are
relevant to our audit of the standalone financial statements
under the provisions of the Companies Act, 2013 and the
Rules thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and
the Code of Ethics. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis
for our opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional
judgement were of most significance in our audit of the
standalone financial statements of the current period. These
matters were addressed in the context of our audit of the
standalone financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion
on these matters. We have determined the matters described
below to be the key audit matters to be communicated in
our report.

Other Matters

We did not audit the financial statements/information of 14
(Fourteen) branches included in the standalone financial
statements of the Company whose financial statements/
financial information reflect total assets of ?49806 Crore as at
31^st March, 2026 and total revenue from operations of ?25523
Crore for the year ended on that date, as considered in the
standalone financial statements. The financial statements/
information of these branches have been audited by the
Branch auditors whose reports have been furnished to us,
and our opinion in so far as it relates to the amounts and
disclosures included in respect of these branches, is based
solely on the report of such branch auditors.

Our opinion is not modified in respect of these matters.

Information Other than the Standalone
Financial Statements and Auditor's Report
Thereon

The Company's Board of Directors is responsible for the
preparation of the other information. The other information
comprises the information included in Management
Discussion and Analysis, Board's Report including Annexures
to Board's Report, Business Responsibility & Sustainability
Report, Corporate Governance and Shareholder's
information, but does not include the standalone financial
statements and our auditor's report thereon. These reports
are expected to be made available to us after the date of this
Auditor's Report.

Our opinion on the financial statements does not cover
the other information and we do not express any form of
assurance conclusion thereon.

In connection with our audit of the standalone financial
statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be
materially misstated.

When we read such other information when made available
to us and if we conclude that there is a material misstatement
there-in we are required to communicate the matter to those
charged with governance.

Responsibilities of Management and those
charged with governance for the Standalone

Financial Statements

The Company's Board of Directors is responsible for the
matters stated in Section 134(5) of the Companies Act, 2013
(“the Act") with respect to the preparation of these standalone
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 Ind AS and other accounting principles
generally accepted in India. This responsibility also includes
maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding the assets of
the company and for preventing and detecting frauds and
other irregularities; selection and application of appropriate
accounting policies; making judgments and estimates that
are reasonable and prudent; and design, implementation
and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy
and completeness of the accounting records, relevant to
the preparation and presentation of the standalone 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,
Management of Company is responsible for assessing the
Company's ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and using the
going concern basis of accounting unless the Management
of Company either intends to liquidate the Company or to
cease operations, or has no realistic alternative but to do so.

The Board of Directors are responsible for overseeing the
Company's financial reporting process.

Auditor's Responsibilities for the Audit of
the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an auditor's report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with SAs will always
detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken
on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise
professional judgment and maintain professional skepticism
throughout the audit. We also:

• Identify and assess the risks of material misstatement
of the standalone financial statements, whether due
to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or
the override of internal control.

• Obtain an understanding of internal financial controls
relevant to the audit in order to design audit procedures
that are appropriate in the circumstances. Under section
143(3)(i) of the Companies Act, 2013, we are also
responsible for expressing our opinion on whether the
company has adequate internal financial controls with
reference to the standalone financial statements in
place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates
and related disclosures made by management.

• Conclude on the appropriateness of management's use
of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions
that may cast significant doubt on the Company's
ability to continue as a going concern. If we conclude
that a material uncertainty exists, we are required to
draw attention in our auditor's report to the related
disclosures in the financial statements or, if such
disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained
up to the date of our auditor's report. However, future
events or conditions may cause the Company to cease
to continue as a going concern.

• Evaluate the overall presentation, structure and content
of the standalone financial statements, including the
disclosures, and whether the standalone financial
statements represent the underlying transactions and
events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the
standalone financial statements that, individually or in
aggregate, makes it probable that the economic decisions of
a reasonably knowledgeable user of the financial statements
may be influenced. We consider quantitative materiality and
qualitative factors in (i) planning the scope of our audit work
and in evaluating the results of our work; and (ii) to evaluate
the effect of any identified misstatements in the financial
statements.

We communicate with those charged with governance
regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including
any significant deficiencies in internal control that we identify
during our audit.

We also provide those charged with governance with a
statement that we have complied with relevant ethical
requirements regarding independence, and to communicate
with them all relationships and other matters that may
reasonably be thought to bear on our independence, and
where applicable, related safeguards.

From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the standalone financial statements
of the current period and are therefore the key audit matters.
We describe these matters in our auditor's report unless law
or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because
the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such
communication.

Report on Other Legal and Regulatory
Requirements

(1) As required by the Companies (Auditor's Report) Order,
2020 (“the Order") issued by the Central Government of
India in terms of sub-section (11) of section 143 of the
Act, we give in the ''Annexure A” a statement on the
matters specified in paragraphs 3 and 4 of the Order, to
the extent applicable.

(2) 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
belief were necessary 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 our examination of those books and
proper returns adequate for the purpose of our audit
have been received from the branches not visited
by us;

c. The reports on the accounts of the branch offices
of the Company audited under Section 143(8) of
the Act by branch auditors have been sent to us and
have been properly dealt with by us in preparing this
report;

d. The Balance Sheet, the Statement of Profit and Loss
(including other comprehensive income), Statement
of Changes in Equity and the Statement of Cash Flow
dealt with by this Report are in agreement with the
books of account;

e. In our opinion, the aforesaid financial statements
comply with the Indian Accounting Standards
prescribed under Section 133 of the Act, read with
Companies (Indian Accounting Standards) Rules 2015
as amended;

f. In terms of Notification no. G.S.R. 463 (E) dt.
05.06.2015 issued by Ministry of Corporate Affairs,
the Provision of Section 164(2) of the Companies Act,
2013 in respect of disqualification of directors are
not applicable to the Company, being a Government
Company.

g. With respect to the adequacy of the internal financial
controls with reference to standalone financial
statements of the Company and the operating
effectiveness of such controls, refer to our separate
Report in “Annexure B”;

h. As per notification number G.S.R. 463 (E) dated
5^th June, 2015 issued by Ministry of Corporate Affairs,
section 197 of the Act, regarding remuneration to
director is not applicable to the Company, since it is a
Government Company; and

i. With respect to the other matters to be included in
the Auditor's Report in accordance with Rule 11 of
the Companies (Audit and Auditors) Rules, 2014, in
our opinion and to the best of our information and
according to the explanations given to us:

i. The company has disclosed the impact of
pending litigations on its financial position in its
standalone financial statements. Refer Note 32
to the financial statements;

ii. The company has made provision, as required
under the applicable law or accounting
standards, for material foreseeable losses, if any,
on long-term contracts including derivative
contracts. Refer Note 38 to the financial
statements;

iii. There has been no delay in transferring
the amount, required to be transferred in
accordance with the relevant provisions of
the Companies Act, 2013 and the rules made
thereunder, to the Investor Education and
Protection Fund by the Company.

iv) a) The management has represented that,
to the best of its knowledge and belief,
of the Standalone Financial Statements,
no funds have been advanced or loaned
or invested (either from borrowed funds
or share premium or any other sources
or kind of funds) by the Company to or in
any other person(s) or entity(ies), including
foreign entities (“Intermediaries"), with the
understanding, whether recorded in writing
or otherwise, that the Intermediary shall,
whether, directly or indirectly lend or invest
in other persons or entities identified in
any manner whatsoever by or on behalf of
the Company (“Ultimate Beneficiaries") or
provide any guarantee, security or the like
on behalf of the Ultimate Beneficiaries.

b) The management has represented, that,
to the best of its knowledge and belief, as
disclosed, no funds have been received
by the Company from any person(s)
or entity(ies), including foreign entities
("Funding Parties"), with the understanding,

b) During the year Company has not declared
or paid any Interim Dividend.

c) The Final dividend proposed for the
previous year, declared and paid by the
Company during the year is in accordance
with Section 123 of the Act, as applicable

vi. Based on our examination carried out in
accordance with the Implementation Guidance
on Reporting on Audit Trail under Rule 11(g) of
the Companies (Audit and Auditors) Rules,2014
(Revised 2024 Edition) issued by the Institute of
Chartered Accountants of India, which included
test checks, and the reports of Branch Auditor's
we report that the company has used multiple
accounting software for maintaining its books
of account 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.

(3) On the basis of verification of the books and records
of the Company, as we considered appropriate and
according to the information and explanations given
to us, we are enclosing our report in terms of Section
143(5) of the Act, on the directions and sub directions
issued by the Comptroller and Auditor General of India
in “Annexure C”

For K Venkatachalam Aiyer & Co. For K. S. Dua & Co.

Chartered Accountants Chartered Accountants

FRN - 004610S FRN - 017478N

CA. V. Ramachandran CA. Swarn Singh Dhillon

Partner Partner

M. No. 020504 M No. 527610

UDIN: 26020504IUTLNW3890 UDIN: 26527610PAIMQZ1233