Oil and Natural Gas Corporation Limited
Report on the Audit of the Standalone Financial Statements
1. Opinion
We have audited the accompanying Standalone Financial Statements of Oil and Natural Gas Corporation 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 ended on that date, 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 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 (hereinafter referred to as “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, (hereinafter referred to as “Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2026, and its profit, other comprehensive income, changes in equity and its cash flows for the year ended on that date.
2. Basis for Opinion
We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing (hereinafter referred to as “SAs") specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor's 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 (hereinafter referred to as “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 audit opinion on the Standalone Financial Statements.
3. Emphasis of Matter
i. Note No. 49.1.1(d), in respect of pending finality of Arbitration Tribunal Award on various issues related to Production Sharing Contract with respect to Panna-Mukta and Mid and South Tapti contract areas (PMT JV), demand of USD 1,624.05 Million equivalent to ' 152,254.46 million as on March 31,2026 (' 139,148.60 million up to March 31, 2025) on the Company, to the extent of the Company's participating interest in the PMT JV, by Directorate General of Hydrocarbons is considered as contingent liability for the reason stated in the said note.
ii. Note no. 49.1.1(b), in respect of Service Tax / GST levied on royalty on crude oil and natural gas, though demands raised by the Tax Authorities on such Service Tax / GST have been disputed, the Company has recognized for the same as provision in the books. Further, disputed demand due to penalty and other differences on such taxes of ' 21,871.31 million (' 19,597.96 million up to March 31, 2025) and with respect to Joint Venture blocks, share of such taxes together with interest thereon of ' 66,834.88 million (' 32,898.57 million up to March 31, 2025) for other joint venture partners not paid by them till March 31, 2026 have been considered as contingent liabilities for the reasons stated in the said note.
iii. Note no. 16.2, in respect of refund of ' 20,875.11 million (' 20,875.11 million up to March 31, 2025) of Terminal Excise Duty receivable from Director General of Foreign Trade, Government of India considered good and recoverable for the reasons stated in the said note.
Our opinion on the Standalone Financial Statements is not modified in respect of the above matters.
4. Key Audit Matter
Key audit matters are those matters that, in our professional judgment, 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.
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Key Audit Matter
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How our audit addressed the matter
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1
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Evaluation of adequacy of provision for impairment for tangible and intangible assets
(Refer Note 48 to the Standalone Financial Statements)
Management has assessed whether any provision needs to be recognized on account of impairment of tangible and intangible assets.
The Company reviews the carrying amount of its tangible and intangible assets (Oil and Gas Assets including Capital Work-in-Progress (CWIP) & Development Wells in Progress (DWIP), Other Property, Plant & Equipment (including Capital Works-inProgress, Right of Use Assets) for the “Cash Generating Unit" (CGU) determined at the end of each reporting period to assess whether there is any indication that those assets have suffered any impairment loss.
Oil and Gas price assumptions have a significant impact on CGU impairment assessments and are inherently uncertain. Furthermore, oil and gas prices are subject to increased uncertainty, given regulatory guidelines including notified gas prices, impact of climate change and the global energy transition.
The management's assumptions for prices of oil and gas in future are highly judgmental and may not be reflective of above factors, leading to a risk of material misstatement of the financial performance and position.
Given the long timeframes involved, certain recoverable amounts of assets are sensitive to the discount rate applied. Since the determination of appropriate discount rate is judgmental, there is a risk that discount rates may not reflect the return required by the market and the risks inherent in the cash flows being discounted, which may lead to a material misstatement.
A key input to impairment assessments and valuations is the production forecast, in turn closely related to the Company's reserves estimates, production profile, availability of customers for monetization and field development assumptions with reference to Oil and Gas.
The determination of recoverable amount, being the higher of fair value less costs to sell and value- in use is based on the factors as discussed above, necessitating judgement on the part of management.
In case of exploration and evaluation assets including other Oil and Gas Assets, based on management's judgement, assessment for impairment is carried out when further exploration activities are not planned in near future or when sufficient data indicate that although a development is likely to proceed, the carrying amount of the exploration asset is unlikely to be recovered in full from successful development or by sale.
Based on the above factors, we have considered the measurement of Impairment as Key Audit Matter.
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Our audit procedures included the following:
Evaluated the appropriateness of management's identification of the CGUs, exploration and evaluation assets and tested the operating effectiveness of controls over the impairment assessment process, including indicators of impairment, as required by relevant financial reporting standards.
Reviewed the reasonableness of the judgments and decisions made by the management regarding assumptions (including the relevant regulatory guidelines) for Oil and Gas prices in future to identify whether there are indicators of possible management bias and accordingly relied upon the management's assumptions for Oil and Gas price future.
Reviewed the appropriateness of discount rates used in the estimation.
Relied on the technical assessment of the Management with regard to the Reserves and the Production profile of Oil and Gas, as shown to us by the management.
Performed testing of the mathematical accuracy of the cash flow models and checked the appropriateness of the related disclosures. We evaluated management's assessment and related calculations of impairment including comparison of the recoverable amount with the carrying amounts of respective CGUs in the books of accounts.
Perused the future plans related to exploration activities. Further, we have relied upon management's assessment that the Mining Lease (ML)/ Petroleum Mining Lease (PML) shall be re-granted, wherever expired/ is expiring in near future.
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Key Audit Matter
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How our audit addressed the matter
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2
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Estimation of Decommissioning liability
(Refer Note 24 to the Standalone Financial Statements)
The Company has an obligation to restore and rehabilitate the Asset/fields operated upon by the Company at the end of their use. This decommissioning liability is recorded based on estimates of the costs required to fulfil this obligation.
The provision is based upon current cost estimates and has been determined on a discounted basis with reference to current legal requirements and technology changes. At each reporting date the decommissioning liability is reviewed and re-measured in line with changes in observable assumptions, timing and the latest estimates of the costs to be incurred at reporting date.
We have considered the measurement of decommissioning costs as Key Audit Matter as it requires significant management judgment, including accounting calculations and estimates that involves high estimation uncertainty.
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Our audit procedures included the following:
Evaluated the approach adopted by the management in determining the expected costs of decommissioning.
Relied upon management's assessment with respect to the cost assumptions used that have the most significant impact on the provisions.
Reviewed the appropriateness of discount and inflation rates used in the estimation.
Verified the unwinding of interest as well as understanding if any restoration was undertaken during the year.
Relied upon the technical assessment with respect to the Production Profile as estimated by the management based on which the Terminal year of the Asset /fields for decommissioning has been estimated.
Relied upon management's assessment that the Mining Lease (ML) / Petroleum Mining Lease (PML) would be regranted, till the terminal year of the field as estimated by the management.
Relied on the judgments of the internal/ external experts for the purpose of technical /commercial evaluation.
Performed testing of mathematical accuracy and assessed the appropriateness of the disclosures made in the financial statements.
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3
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Litigations and Claims
(Refer Note 49 to the Standalone Financial Statements)
Litigation and claims are pending with multiple tax and regulatory authorities and there are claims from vendors/suppliers and employees which have not been acknowledged as debt by the Company (including Joint Operations).
In the normal course of business, financial interests or exposures may arise from pending legal/regulatory proceedings and from above referred claims not acknowledged as debt by the company. Whether demands from tax and regulatory authorities and claims from vendors / suppliers are to be recognized as liability or disclosed as a contingent liability in the Standalone Financial Statements or considered as remote, is dependent on a number of significant assumptions and judgments made by the management. The amounts involved are potentially significant and determining the amount, if any, to be recognized or disclosed in the financial statements, is inherently subjective.
We have considered Litigations and claims as Key Audit Matter because the estimates on which these amounts are based involve a significant degree of management judgment, including accounting estimates that involves high estimation uncertainty.
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Our audit procedures included the following:
Understood Management's internal instructions, process and control for determining and estimating the tax litigations, other litigations and claims and its appropriate accounting and/or disclosure.
Discussed pending matters with the Company's personnel with respect to status of cases of litigation and claims. Inquiry with the legal and tax departments regarding the status of most significant disputes and inspection of key relevant documentation.
Review of opinion received from the experts where available.
Assessed management's conclusions through understanding precedents set in similar cases, reviewed the recommendations of the internal committee specially formed by the management, placed reliance upon the expert opinions, wherever obtained by the management. We have assessed the adequacy and appropriateness of recognition, measurement, presentation and disclosure of the Contingent liabilities in the Standalone Financial Statements.
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Key Audit Matter
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How our audit addressed the matter
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4
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Information Technology and General Controls
The Company is dependent on its Information Technology (“IT") systems for processing and recording its transactions, including financial reporting processes.
Appropriate IT general controls and application controls are required to ensure that such IT systems can process the data, as required, completely, accurately and consistently for reliable financial reporting.
IT application controls are critical to ensure that changes to applications / files / information and underlying data are made in an appropriate manner and under controlled environment. Appropriate controls contribute to mitigating the risk of potential fraud or errors as a result of changes to applications and data.
On account of the pervasive use of IT systems and related control environment on the Company's financial reporting process, the testing of the general computer controls of the IT systems used in financial reporting has been considered to be a Key Audit Matter.
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In assessing the integrity of the IT systems relevant for financial reporting, we obtained an understanding of the IT infrastructure and IT systems relevant to the Company's financial reporting process for evaluation and testing of relevant IT general controls and IT application controls ('SAP'), through inquiries with the management and review of the reports of the Information system control audits done by a third party.
Access rights were tested over applications, operating system, on a sample basis, which are relied upon for financial reporting. We further tested segregation of duties, including preventive controls to ensure that access to change applications, the operating system or databases in the production environment were granted only to authorized personnel.
Our audit included making necessary inquiries with the management, scrutiny of the report on 'IT audit and security' by a third-party expert, access security (including controls over privileged access), segregation of duties and delegation of authority.
In response to the above IT requirements, enhancement of functionalities in IT System made during the year, we performed the following:
- reviewed controls and performed additional substantive procedures of key general ledger account reconciliations.
- observed that training sessions are also provided to users, to enable full utilization of SAP functionalities.
Reviewed key automated and manual business cycle controls and logic for the reports generated through the IT infrastructure that were relevant for financial reporting or were used in the exercise of internal financial controls with reference to financial statement, including testing of the compensating controls or alternate procedures to assess whether there were any unaddressed IT risks that would materiality impact the Standalone Financial Statements.
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5. Other Matters
i. We have placed reliance on technical / commercial evaluation by the management in respect of categorization of wells as exploratory, development, producing and dry well, allocation of cost incurred on them, production profile, proved (developed and undeveloped) / probable hydrocarbon reserves, and depletion thereof on Oil and Gas Assets, impairment, liability for decommissioning costs, evaluation and timelines for completion of projects under progress, liability for NELP / Hydrocarbon Exploration and Licensing Policy (“HELP") and nominated blocks for under performance against agreed Minimum Work Programme.
ii. As mentioned in Note No. 47.1.3, the Standalone Financial Statements include the Company's share in the total value of assets, liabilities, expenditure and income of 216 blocks under New Exploration Licensing Policy (NELP) / Hydrocarbon Exploration and Licensing Policy (HELP) / Discovered Small Fields (DSFs) / Open Acreage Licensing Policy (OALPs) and Joint Operations (JO) accounts for exploration and production out of which:
a. Financial information / Financial Statements of 8 blocks have been audited by other Chartered Accountants. In respect of these blocks, Standalone Financial Statements include proportionate share in assets and liabilities as on March 31, 2026 amounting to ' 65,943.68 million and ' 33,493.84 million respectively and revenue and profit/(loss) including other comprehensive Income for the year ended March 31, 2026 amounting to ' 47,916.86 million and ' 12,091.18 million respectively. Our opinion is based on audit reports of the other Chartered Accountants.
b. Financial information / Financial Statements of 19 blocks have been certified by the management. In respect of these blocks, Standalone Financial Statements include proportionate share in assets and liabilities as on March 31, 2026 amounting to ' 11,928.26 million and ' 11,353.95 million respectively and revenue and profit/(loss) including other comprehensive Income for the year ended March 31, 2026 amounting to ' 2,289.02 million and ' (1,923.66) million respectively. Our opinion is based on management certified accounts in respect of these blocks.
iii The Standalone Financial Statements of the Company for the year ended March 31,2025 were audited by five joint auditors of the Company, four of them are existing joint auditors who had expressed an unmodified opinion vide their report dated May 21,2025 on such Standalone Financial Statements.
Our opinion on the Standalone Financial Statements is not
modified in respect of the above matters.
6. Information Other than the Standalone Financial Statements and Auditors’ 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 the Management Discussion and Analysis, Board's Report including Annexures to Board's Report, Business Responsibility and Sustainability Report, Corporate Governance, but does not include the Standalone Financial Statements, Consolidated Financial Statements and our auditors' 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 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 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 matter to those charged with governance and take appropriate actions necessitated by the circumstance and the applicable laws and regulations.
7. Responsibility of the 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 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 Ind AS specified under section 133 of the Act 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 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 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 responsible for overseeing the Company's financial reporting process.
8. 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 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 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 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.
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.
9. Report on Other Legal and Regulatory Requirements
i. 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 -1”, a statement on the matters specified in the paragraph 3 and 4 of the order, to the extent possible.
ii. The Company did not have the minimum number of Independent Directors required in terms of the provisions contained in the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time, throughout the reporting financial year in respect of the composition of its Board of Directors. For the period from March 28, 2026 to March 31, 2026 the company did not comply with the requirement of having at-least one women director on the board.
Pursuant to the completion of tenure of Independent Directors on the Board of the Company on March 27, 2026, the Board does not have Independent Directors as per the provisions of SEBI (LODR) Regulations, 2015, the Companies Act, 2013 and DPE guidelines. Accordingly, the standalone financial statements of the Company for the year ended March 31,2026 have been
reviewed and approved by the Board of Directors at the meeting held on May 26, 2026.
Based on verification of books of accounts of the Company and according to information and explanations given to us, we give below a report on the Directions issued by the Comptroller and Auditor General of India in terms of Section 143(5) of the Act:
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Directions u/s 143(5) of the Act for the year 2025-26
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Auditor's reply on the action taken on the directions
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1
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Assess the fair valuation of all the investments, both quoted and unquoted, made directly by the Company or through Trusts, for Post retirement benefits of the employees. This includes verifying valuation methodologies, ensuring consistency with Ind AS and reviewing supporting documentation. The auditor shall provide a brief note on the valuation approach, its reasonability, and compliance with applicable regulations, reporting any material deviations or misstatements.
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The Company does not make direct investments for the post-retirement benefits of the employees.
All long-term investments made through Trusts for post-retirement benefits of employees have been accounted for at cost in the financial statements of the respective Trusts. However, when there is a decline, other than temporary, in the value of longterm investments, the carrying amount is reduced to recognize the decline. Since the Trusts prepare their financial statements in accordance with the applicable Accounting Standards (not as per Indian Accounting Standards), such valuation of investments at cost is considered appropriate and in compliance with the applicable financial reporting framework and relevant regulations.
Further, the Trusts have separately carried out valuation of their investments for fair value assessment purposes. The valuation approach and methodologies adopted by the trusts for such fair valuation assessment are considered appropriate and there has been no material deviations or misstatement.
A brief note on the valuation methodology adopted for investments is given below:
• Investments in mutual fund units are valued at Net Assets Value (NAV)
• Investments in Central Government Securities, State Government Securities, and PSU Bonds are valued at market rates based on the prices quoted/reflected on the FBIL/ BSE/NSE
• Investments in funds managed by LIC are valued based on valuation provided by LIC
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2
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Whether the Company has system in place to process all the accounting transactions through IT system? If yes, whether review of this system and controls that are significant to the Company's financial reporting process as well as cyber security has been done by Information Security Auditing Organizations empanelled by Cert-In at a minimum frequency of once in a year and material discrepancies found, if any, have been suitably reported? The implications of processing of accounting transactions outside IT system on the integrity of the accounts along with financial implications may also be reported.
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Yes, the Company has system in place to process all the accounting transactions through IT system, namely SAP.
The Company has system in place to process all the accounting transactions through IT system except few accounting processes such as inventory valuation, impairment and expected credit loss workings and preparation of consolidated financial statements.
Processing of above accounting transactions outside the IT system does not have any impact on the integrity of the accounts, nor does it result in any financial implications which may result in material misstatement of the financial statements for the Company.
During the year, the review of this system and controls that are significant to the Company's financial reporting process as well as cyber security has been done by Information Security Auditing Organization which is empanelled by Cert-in. No material discrepancies were found and reported.
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3
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Whether funds (grants/subsidy etc.) received/receivable for specific schemes from Central/State Government of its agencies were properly accounted for as per the applicable accounting standards or norms and whether the received funds were utilised as per its terms and conditions? Whether accounting of interest earned on grants received has been done as per terms and conditions of the Grant. List the cases of deviation.
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Based on the audit procedures carried out and as per the information and explanations given to us, during the year the company has not received any funds in respect of Grant / subsidy for specific schemes from Central / State Government.
As no grant was received / receivable during the year, accounting of interest earned on grant does not arise.
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Directions u/s 143(5) of the Act for the year 2025-26
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Auditor's reply on the action taken on the directions
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4
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Whether the Company has identified the key Risk areas? If yes, whether the Company has formulated any Risk Management Policy to mitigate these risks? If yes, (a) whether the Risk Management Policy has been formulated considering global best practices? (b) whether the Company has identified its data assets and whether it has been valued appropriately?
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The Company has identified the key risk areas and has formulated risk management policy to mitigate these risks. The said policy has been duly approved by the Board of Directors and as represented by management, the same is stated to be based on global best practices, namely ISO 31000:2018 - Risk Management Guidelines.
Since no data asset has been recognized by the Company in the financial statements, reporting on whether such data assets have been appropriately valued is not applicable.
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5
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Whether the Company is complying with the Securities and Exchange Board of India (SEBI) (Listing Obligation and Disclosure Requirements) Regulations, 2015, and other applicable rules and regulations of SEBI, Department of Investment and Public Asset Management, Ministry of Corporate Affairs, Department of Public Enterprises, Reserve Bank of India, Telecom Regulatory Authority of India, CERT-IN, Ministry of Electronics and Information Technology and National Payments Corporation of India wherever applicable? If not, the cases of deviation may be highlighted.
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Based on the information and explanations given to us and audit procedures carried out by us, we report as under:
a. Compliance of Rules / Regulations / Guidelines
The Company is complying with the following Rules / Regulations / Guidelines:
• Department of Investment and Public Asset Management
• Reserve Bank of India
• CERT-IN
• Ministry of Electronics and Information Technology
b. non-compliance with certain requirements of Rules / Regulations (Refer note 53.5 to the Standalone Financial Statements)
1. The Company is complying with Securities and Exchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements) Regulations, 2015 and other applicable SEBI rules and regulations except in case of following requirements:
-Regulations 17 (1) - non-compliance with composition of Board
For the period from April 01, 2025 to March 27, 2026 - The Board comprised of 7 functional directors (including Chairman), 1 Government Nominee Director and 3 Independent directors. Considering the compliance requirements of at least 50% of Independent Directors of the Board, there was a shortfall of five independent directors.
For the period from March 28, 2026 to March 31, 2026 - The Board comprised of 6 functional directors (including Chairman), 2 Government Nominee Directors and no independent directors. Considering the compliance requirements of at least 50% of Independent Directors of the Board, there was a shortfall of eight independent directors.
-Regulation 18 (1), 19, 20 and 21 - non-compliance of reconstitution of Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Risk Management Committee respectively for the period April 01, 2025 to April 07, 2025 and March 28, 2026 to March 31, 2026.
2. The Company is complying with requirements of Ministry of Corporate Affairs except in case of following requirements:
-Section 149 of the Act, - non-compliance with composition of Board
During the year, the Company did not comply with the requirement of having requisite number of directors on the Board as Independent Directors.
For the period from March 28, 2026 to March 31, 2026, the Company did not comply with requirement of having at least one-woman director on the Board.
-Section 135, 177 and 178 - non-compliance of reconstitution of Corporate Social Responsibility Committee, Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee respectively for the period April 01, 2025 to April 07, 2025 and March 28, 2026 to March 31, 2026.
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Directions u/s 143(5) of the Act for the year 2025-26
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Auditor's reply on the action taken on the directions
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3. The Company is yet to submit MoU evaluation report for the year 2025-26 on compliance of DPE guidelines to the Ministry of finance of Government of India.
As stated above, we report that the Company is not complying with DPE guidelines in respect of composition of Board of Directors and Board Committees.
c. Rules / Regulations / Guidelines not applicable to the Company
We are informed that the following Rules / Regulations / Guidelines are not applicable to the Company:
• Telecom Regulatory Authority of India and
• National Payments Corporation of India
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iv. 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 accounts as required by law have been kept by the Company so far as it appears from our examination of those books.
c. 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 accounts.
d. In our opinion, the aforesaid Standalone Financial Statements comply with the Ind AS specified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 as amended.
e. 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 (2) of section 164 of the Act is not applicable to the Company.
f. With respect to the adequacy of 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 2'. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company's internal financial control over financial reporting.
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 Auditor's 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 49 to the Standalone Financial Statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses - Refer Note 53.4 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, other than as disclosed in Note No. 53.3 to the Standalone Financial Statements, no funds (which are material either individually or in the aggregate) 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"), which 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 in Note No. 53.3 to the Standalone Financial Statements, no funds (which are material either individually or in the aggregate) 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, tend 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 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. (a) The final dividend proposed in the previous year, declared and paid by the Company during the year is in accordance with Section 123 of the Act, as applicable.
(b) The interim dividend declared and paid by the Company during the year is in accordance with Section 123 of the Act.
(c) As stated in Note No. 21.5 to the Standalone Financial Statements, the Board of Directors of the Company has proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The amount of dividend proposed is in accordance with section 123 of the Act, as applicable.
vi. Based on our examination which included test checks, the Company has used an accounting software for maintaining its books of accounts 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. The audit trail has been preserved by the Company as per the statutory requirements for record retention.
Laxmi Tripti & Associates
Chartered Accountants Firm Reg. No. 009189C
Sd/-
(CA Laxmi Narayan Agrawal)
Partner M. No. 078427 UDIN: 26078427SEMORG3439
Talati & Talati LLP
Chartered Accountants
Firm Reg. No. 110758W/W100377
Sd/-
(CA Amit Shah)
Partner M. No. 122131 UDIN: 26122131WIGFVL3042
Place: New Delhi Date : May 26, 2026
Manubhai & Shah LLP
Chartered Accountants
Firm Reg. No. 106041W/W100136
Sd/-
(CA K. B. Solanki)
Partner M. No. 110299 UDIN: 261 10299KAWIOO3077
Rama K Gupta & Co.
Chartered Accountants Firm Reg. No. 005005C
Sd/-
(CA Abhay Gupta)
Partner M. No. 087679 UDIN: 26087679OCJKUM1056
V Sankar Aiyar & Co.
Chartered Accountants Firm Reg. No. 109208W
Sd/-
(CA Lalithapriya B)
Partner M. No. 263713 UDIN: 26263713EDDEFN7307
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