Please find enclosed herewith unaudited quarterly financial results for quarter ended 30.06.2025
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Punjab Communications submitted its unaudited quarterly results for Q1 FY26 (ended 30 June 2025), approved by the Board on 26 August 2025. The statutory auditor, Ashwani & Associates, issued an Adverse Conclusion (the strongest form of negative auditor comment) on these results, citing multiple accounting policy violations. Key issues include: (1) raw material inventory valued at last purchase rate instead of the stated FIFO method, with an unexplained ₹630.18 lakh gap between the balance sheet figure (₹1,214.27 lakhs) and ERP data (₹1,844.45 lakhs); (2) work-in-process and finished sub-assemblies inventory valued only at material cost, ignoring labour and overheads as required by policy; (3) absence of an Expected Credit Loss (ECL) estimation policy for trade receivables as required by Ind AS 109. The auditor deemed these misstatements 'pervasive' and stated the results do not fairly present the company's operations. This is also the first quarter under the new auditor — the previous auditor was Jain & Associates, who had given an unmodified conclusion.
This is a serious red flag for shareholders. An adverse auditor opinion means the reported numbers cannot be relied upon, and the ₹630+ lakh unreconciled inventory gap raises governance and internal control concerns. The auditor change combined with adverse findings could pressure the stock and may prompt regulatory or investor scrutiny.