We have audited the accompanying standalone financial
statements of Hindustan Petroleum Corporation Limited
(“the Company”), which comprise the Standalone Balance
Sheet as at March 31, 2025, the Standalone Statement of
Profit and Loss (including Other Comprehensive Income), the
Standalone Statement of Changes in Equity and the Standalone
Statement of Cash Flows for the year then ended and notes to the
standalone financial statements, including material accounting
policy information and other explanatory information, which
includes the standalone financial statements of the Visakh
Refinery for the year ended on that date, audited by the branch
auditor, located at Visakhapatnam (hereinafter referred to as
the "standalone financial statements”).
In our opinion and to the best of our information and according
to the explanations given to us, the aforesaid standalone
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 accounting principles generally
accepted in India, of the state of affairs of the Company as
at March 31, 2025 and its profit, total 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
under section 143(10) of the Act. Our responsibilities under
those Standards are further described in the "Auditors’
Responsibilities for the Audit of the Standalone 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 ("ICAI”)
together with the ethical requirements that are relevant to
our audit of the standalone financial statements under the
provisions of the Act and the Rules made thereunder, and we
have fulfilled our other ethical responsibilities in accordance
with these requirements and the ICAI’s 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, taking into
consideration audit report issued by the branch auditors, the
matters described below to be the key audit matters to be
communicated in our report:
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Sr.
No. Key Audit Matters
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Auditors’ Response
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1 Property, plant and equipment and capital work-in-progress
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How the Key Audit matter was addressed
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• The Company has, during the year, executed various
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• We performed an understanding and evaluation of the
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projects and is also in the process of executing various
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system of internal control processes over the projects and
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projects like expansion of refinery, installation of bio-
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those included in capital work in progress, with reference
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refinery and other new plants, depots, LPG bottling
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to identification and testing of key controls;
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plants, terminals, pipelines, etc. Since these projects
take a substantial period of time to get ready for
intended use and considering the materiality of the
amounts capitalized and included in Capital Work in
Progress, in the context of the Balance Sheet of the
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• We assessed whether the Company’s accounting policy
in relation to the capitalisation of expenditures are in
sync and in compliance with Ind AS and found them to
be consistent;
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Company, this is considered to be a key area having
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• We have reviewed Board minutes relating to approvals of
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significant effect on the overall audit strategy and
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the projects and changes in estimates thereof;
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allocation of resources in planning and completion of
our audit;
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• We assessed the progress of the project and the intention
and ability of the management to bring the asset to its
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• With regard to above capital projects, management
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state of intended use;
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has identified specific expenditure including employee
costs and other overheads relating to each of the
assets in the above capital projects and has applied
judgement to assess if the costs incurred in relation to
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• We understood, evaluated and tested the design and
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operating effectiveness of key controls relating to
capitalisation of various costs incurred;
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these assets meet the recognition criteria of Property,
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• We tested, on sample basis, the direct and indirect costs
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Plant and Equipment in accordance with Ind AS 16.
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capitalised, with the underlying supporting documents
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• There are areas where management judgements impact
the carrying value of the property, plant and equipment,
intangible assets and their respective depreciation/
amortization rates. These include the decision to
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to ascertain nature of costs and basis for allocation,
where applicable, and evaluated whether they meet the
recognition criteria provided in the Indian Accounting
Standard (Ind AS) 16, Property, Plant and Equipment;
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capitalise or expense costs, the annual asset life review,
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• We ensured adequacy of disclosures in the standalone
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the timeliness of the capitalisation of assets and the
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financial statements;
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use of management assumptions and estimates for
the determination or the measurement and recognition
criteria for assets retired from active use.
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• We reviewed the judgements made by the management
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including the nature of underlying costs capitalized,
determination of realizable value of the assets retired
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This has been determined as a key audit matter due to
the significance of the capital expenditure during the year
as compared to the existing block of Property, Plant and
Equipment, the risk that the elements of costs that are
eligible for capitalisation are not appropriately capitalised
in accordance with the recognition criteria provided in Ind
AS 16, and the complex nature of the project. (Refer Note
No. 3, 4,5 & 5A).
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from active use, the appropriateness of useful lives
applied in the calculation of depreciation/amortization,
the useful lives of assets prescribed in Schedule II to
the Act and the useful lives of certain assets as per the
technical assessment of the management. We have found
that the management has regularly reviewed aforesaid
judgements and there are no material changes.
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Sr.
No.
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Key Audit Matters
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Auditors’ Response
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2
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Evaluation of uncertain indirect tax positions
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How the Key Audit matter was addressed
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The Company has material uncertain indirect tax positions
including matters under dispute which involves significant
judgments and estimates to determine the possible
outcome of these disputes. The Company has disputes
pending at various levels of tax authorities over the
past several years. (Refer Note No.- 53 and para (vii) (b) -
Annexure I of this report).
Because of the judgement required, the area determined
to be a key audit matter.
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• We have evaluated and tested the appropriateness
of the design and the operating effectiveness of the
management’s controls over the tax litigation matters;
• We reviewed the management’s underlying assumptions
in estimating the tax provision based on the possible
outcome of the disputes, legal precedence and other
rulings in evaluating management’s position on these
uncertain tax positions;
• We relied upon the management judgements, industry
level deliberations and estimates for possible outflow and
opinion of internal experts of the Company in relation to
such disputed tax positions;
• We assessed the appropriateness of disclosures made
as per Ind AS 37 "Provisions, Contingent Liabilities and
Contingent Assets”.
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3
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Computation of Expected Credit Loss (ECL)
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How the Key Audit matter was addressed
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Trade receivables constitute a significant component of
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• We evaluated the methodology used for age-wise
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the total current assets of the Company. At each reporting
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classification of trade receivables and assessed the key
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date, the Company recognizes lifetime expected credit
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assumptions underlying the estimated probability of
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losses on these Trade receivables wherein we relied on
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default. This evaluation includes verifying consistency
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Management’s estimates regarding probability of default
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with the Company’s historical default trends.
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rates linked to age-wise bucketing of the underlying
assets. Given, the technical complexity in estimating the
probability of default; this area is considered as a key audit
matter. (Refer Note No. 13)
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• We also assessed the appropriateness whether the
management’s estimates are in line with Ind AS 109.
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4
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Inventories
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How the Key Audit matter was addressed
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The verification and valuation of inventories, is a significant
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• We evaluated the inventory monitoring and control system
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area that involves considerable management judgment
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and noted that the physical verification of inventories is
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in the application of accounting policies and estimation
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done by the Management at reasonable intervals.
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techniques. Since, these judgments have a significant
impact on the amounts recognized in the Standalone
Financial Statements, we have identified this area as a key
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• Our audit teams conducted physical verification of
inventories on a sample basis at various locations.
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audit matter. (Refer Note No. 11)
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However, since physical verification at every location is not
possible, in such cases we placed reliance on the physical
verification procedures carried out by the Management.
• For inventories held at third-party locations, we relied
on the Company’s system of record-keeping related to
such inventories.
• We also tested, on a sample basis, the values used for
determining net realisable value and cost of inventories,
and verified their consistency with the inventory valuation
records and related accounting entries.
• We assessed that the valuation of inventories is in
compliance Ind AS 2.
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Information Other than the Financial
Statements and Auditors’ Report thereon
The Company’s management and the Board of Directors is
responsible for the preparation of the other information. The
other information comprises the information included in the
Directors’ Report including Annexures to the Directors’ Report,
Corporate Governance Report, Management Discussion and
Analysis Report and Business Responsibility and Sustainability
Report, but does not include the standalone financial
statements and our auditors’ report thereon. The other
information as above is expected to be made available to us
after the date of this auditors’ report.
Our opinion on the standalone financial statements does not
cover the other information and we will 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
identified above when it becomes available and, in doing
so, consider whether the other information is materially
inconsistent with the standalone financial statements, or our
knowledge obtained during the course of our audit or otherwise
appears to be materially misstated.
When we read the other information, if we conclude that
there is a material misstatement therein, 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 management and the Board of Directors is
responsible for the matters stated in section 134(5) of 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, changes in equity and cash
flows of the Company in accordance with the accounting
principles generally accepted in India including the Indian
Accounting Standards specified under section 133 of the Act.
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
and the Board of Directors are 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 management either
intends to liquidate the Company or to cease operations, or has
no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the
Company’s financial reporting process.
Auditors’ Responsibilities for the Audit of
the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about
whether the standalone financial statements as a whole
are free from material misstatement, whether due to fraud
or error, and to issue an auditors’ 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 control relevant to
the audit in order to design audit procedures that are
appropriate in the circumstances. Under section 143(3)
(i) of the Act, we are also responsible for expressing our
opinion on whether the Company 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
related disclosures made by the 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 auditors’ report to the related disclosures in the
standalone 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 auditors’ 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 standalone 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 Standalone Financial Statements.
We believe that the audit evidence obtained by us is sufficient
and appropriate to provide a basis for our audit opinion on the
Standalone 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 auditors’ 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.
Other Matters
1. We did not audit the financial statements and other
financial information of Visakh Refinery which is
considered as a branch, and included in the standalone
financial statements, whose financial statements reflect
total assets of ? 47,607.28 Crore as at March 31, 2025,
total revenues of ? 1,05,008.74 Crore, net profit after tax
of ? 302.85 Crore and total comprehensive income of
? 285.32 Crore for year ended March 31, 2025. The financial
statements of the Visakh Refinery of the Company have
been audited by the Branch Auditor of the Company. The
Branch Auditors’ report dated April 17, 2025, has been
furnished to us and our opinion in so far as it relates to
the amounts and disclosures included in respect of this
branch, is based solely on the report of such branch auditor.
2. We refer to Note No. 50 in respect of 17 unincorporated
Joint Operations involved in exploration activities, of
which majority are under relinquishment. The standalone
financial statements include Company’s proportionate
share in Assets and Liabilities amounting to ? 3.09 Crore
and ? 1.64 Crore respectively, as on March 31, 2025, and
Income and Expenditure amounting to ? 2.73 Crore and
? 2.04 Crore for the year ended March 31, 2025, which have
been included based on unaudited financial information.
Our opinion in respect thereof is solely based on the
management certified information.
We have placed reliance on technical/commercial
evaluation by the management in respect of categorisation
of wells, allocation of cost incurred on them, liability for
decommissioning costs, liability for NELP and nominated
blocks for under performance against agreed Minimum
Work Programme.
3. The standalone financial statements of the Company
for the year ended March 31, 2024, were audited by the
previous joint auditors, one of which is predecessor audit
firm and have expressed an unmodified opinion on such
standalone financial statements.
Our opinion is not modified in respect of these matters.
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 Section 143(11) of the Act, we give in
"Annexure I” a statement on the matters specified in
paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required under section 143(5) of the Act, based on our
audit as aforesaid, we give in the Annexure II, a report
on the directions including additional directions issued by
the Comptroller and Auditor General of India, action taken
thereon and its impact on the accounts and standalone
financial 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 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 purposes of our audit have been received
from branch not visited by us;
c) The report dated April 17, 2025, on the accounts of the
Visakh Refinery of the Company, issued under section
143(8) of the Act by the Branch Auditors upon their audit
of the books of account of Visakh Refinery has been
forwarded to us and have been properly dealt with by us in
preparing our report in the manner considered necessary
by us;
d) The Balance Sheet, the Statement of Profit and Loss
including Other Comprehensive Income, Statement of
Changes in Equity and the Statement of Cash Flows dealt
with by this Report are in agreement with the books
of account;
e) In our opinion and to the best of our information and
according to the explanations given to us, the aforesaid
standalone financial statements comply with the Indian
Accounting Standards specified under section 133 of the
Act 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 the
provisions of section 164(2) of the Act, accordingly, we are
not required to report whether any of the directors of the
Company is disqualified in terms of provisions contained
in the said section;
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 III”;
h) With respect to the other matters to be included in the
Auditors’ Report in accordance with the requirements of
section 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 197
of the Act regarding remuneration to directors is not
applicable to the Government Company; and hence we
are not required to report as to whether the remuneration
paid by the Company to its directors during the year is in
accordance with the provisions of section 197 of the Act;
i) 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 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 No.53 of the
standalone 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
No. 54 to the standalone financial statements);
iii. There has been no delay in transferring amounts,
required to be transferred, 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, 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 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 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, no funds
have been received by the Company from
any person or entity, including foreign entity
(“Funding Parties”), with the understanding,
whether recorded in writing or otherwise,
that the Company shall, whether, directly or
indirectly, lend or invest in other persons or
entities identified in any 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; and
(c) Based on such 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. (a) The final dividend paid by the Company during
the year, in respect of the previous year, is in
accordance with section 123 of the Act to the
extent it applies to payment of dividend;
(b) As stated in note no. 48 to the standalone
financial statements, the Board of Directors
of the Company have proposed final dividend
for the year which is subject to the approval
of the members at the ensuing Annual General
Meeting. The dividend declared is in accordance
with section 123 of 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 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.
Further, during the course of our audit we did not
come across any instance of audit trail feature being
tampered with and the same has been preserved as
per 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
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