We have audited the accompanying financial statements of Punjab Communications Limited
(CIN:L32202PB1981SGC004616), which comprise the Balance Sheet as at 31st March, 2025, the Statement of Profit
and Loss for the year ended on that date, Statement of Cash Flows for the year ended on that date, Statement of
Changes in Equity and Notes to financial statements, including a summary of the material accounting policies and
other explanatory information (hereinafter referred to as “the Financial Statements").
In our opinion and to the best of our information and according to the explanations given to us, because of the
significance of the matters discussed in the Basis for Adverse Opinion section of our report, the accompanying
Financial Statements do not give a true and fair view in conformity with the accounting principles generally
accepted in India, of the state of affairs of the company as at 31st March, 2025 and its loss, total comprehensive
income, changes in equity and its cash flows for the year ended on that date.
Basis for Adverse Opinion
I. As per the company's stated accounting policy, as per Note 2(vii)(a) to the Financial Statements, inventory is
to be valued using the FIFO Method. However, the inventory of raw materials is valued on the basis of “last
purchase rate" and is carried in the Balance Sheet at ^1156.59 lacs (gross) as at 31.03.2025 (Note No. 8). The
Management has not provided us the valuation of the inventory as per the FIFO Method. The calculation of raw
material of inventory as per the last purchase cost is also not in compliance with the provisions of Ind AS 2 on
Inventories. Further, the gross value of inventories of raw material as at 31.03.2025 is being carried out in the
Balance Sheet at ^1156.59 lacs. Whereas, as per the ERP data gross value of inventories of raw material as at
31.03.2025 comes to ^1663.58 lacs. The resulting difference of ^506.99 lacs is pending to be reconciled as at
31.03.2025.
II. As per the Company's accounting policy disclosed at Note No. 2(vii)(b), cost of work in process includes cost of
material plus direct labour. However, the inventory of work in process carried in the Balance Sheet at ^73.26
lacs (Note No. 8 of the Financial Statements) has been valued only at material cost. Further, the material cost
is calculated on the basis of last purchase rate method.
III. As per the Company's accounting policy disclosed at Note No. 2(vii)(c), cost of finished sub- assemblies includes
cost of material plus overheads apportioned on the same. However, the inventory of finished sub-assemblies
carried in the Balance Sheet at ^482.75 lacs (Note No. 8 of the Financial Statements) have been valued only at
material cost. Further, the material cost is calculated on the basis of last purchase rate method.
IV. As regards net trade receivables amounting to ^974.76 lacs as at 31.03.2025, management is of the view
that the same are good and recoverable in due course and hence, no further provision is required. Out of the
above trade receivables balances to the extent of ^306.67 lacs are outstanding for more than three years. In the
absence of appropriate audit evidences including balance confirmations, correspondence from parties and
data in respect of future progressive payments, we are unable to comment on the receivability of balance
outstanding trade receivables outstanding for more than three years amounting to Rs. ^306.67 lacs and the
possible impact on the loss for the year ended on that date and on the balance of trade receivables as at
31.03.2025.
V. As regards net trade payables amounting to ^1449.10 lacs as at 31.03.2025, management is of the view that
the same are undisputed and payable in due course. Out of the above trade payables balances to the extent
of ^1253.76 lacs are outstanding for more than three years. In the absence of appropriate audit evidences
including balance confirmations and correspondence from parties, we are unable to comment on the
correctness of balance outstanding of trade payables as at 31.03.2025.
VI. As required by Ind AS 109 Financial Instruments, the company should have an accounting policy to estimate
Expected Credit Loss (ECL) for measuring impairment of its trade receivables and other financial assets.
However, we observed that the company is not following any accounting policy to estimate ECL. In the absence
of estimation of ECL as at 31.03.2025, we are unable to comment on the possible impact on the loss for the
year ended on that date.
As a consequence, the above-mentioned material misstatements are deemed to be pervasive to the financial
statements. The effect of the misstatements on the financial statements have not been determined because it
was not practical to do so.
Accordingly, due to the significance of the matters described above, the financial statements do not present fairly,
in all material respects, the financial position of the Company as at March 31, 2025, and its financial performance
and cash flows for the year then ended, in accordance with the Indian Accounting Standards specified under
Section 133 of the Companies Act, 2013, read with the relevant rules issued thereunder.
Key Audit Matters
Except for the matters described in the Basis for Adverse Opinion section, we have determined that there is no other
key audit matter to communicate in our report.
Information Other than Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for 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, Corporate Governance and Shareholder's Information, but does not include the Financial Statements and
our Auditor's Report thereon. 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 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 during the course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard as we have not received
any other information namely Management Discussion and Analysis, Board's Report including Annexures to Board's
Report, Business Responsibility Report and Corporate Governance from the company.
When we read the other information as stated in above para, 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 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 financial statements that give a true and fair view of the financial position, financial
performance, including other 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 financial statements that give a true and fair view and are free from material misstatement, whether due
to fraud or error.
In preparing the 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 also responsible for overseeing the company's financial reporting process.
Auditor's Responsibilities for the Audit of the 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 financial statements.
As part of our audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism
throughout the audit. We also:
I. Identify and assess the risks of material misstatement of the 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.
II. 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 Companies Act, 2013, 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.
III. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by management.
IV. 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 ability of the company 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.
v. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures,
and whether the financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
Materiality is the magnitude of misstatements in the 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 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
in terms of Section 143(11) of the Act, we give in "Annexure A" a statement on the matters specified in
paragraphs 3 and 4 of the Order.
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, except for the matter described in the
Basis for Adverse Opinion section of our report, which to the best of our knowledge and belief were
necessary for the purposes of our audit.
b) Except for the matter described in the Basis for Adverse Opinion section of our report, 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.
c) The Balance Sheet and the Statement of Profit and Loss dealt with by this Report are in agreement with the
books of account.
d) Except for the matter described in the Basis for Adverse Opinion section of our report, in our opinion, the
aforesaid financial statements comply with the Ind AS specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014.
e) The company being a Government Company, provisions of Section 164(2) of the Act, in respect of
disqualification of Directors are not applicable.
f) With respect to the adequacy of the internal financial controls over financial reporting of the company
and the operating effectiveness of such controls, refer to our separate Report in "Annexure B". Our report
expresses a adverse opinion on the adequacy and operating effectiveness of the company's internal
financial controls over financial reporting.
g) With respect to the other matters to be included in the Auditor's Report in accordance with the
requirements of section 197(16) of the Act, as amended:
In our opinion and to the best of information, the company being a Government company the provisions
in relation to the remuneration in accordance with the provisions of section 197 of the Act is not
applicable.
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
Financial Statements - Refer Note No. 35 to the financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, if any, 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 (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"), 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 (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,
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;
(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.
iv. The company has not declared or paid any dividend during the year under section 123 of the
Act.
v. According to the information and explanations given to us and based on our examination of
the books of account and relevant records of the Company, the Company has used accounting
software for maintaining its books of account during the financial year ended March 31, 2025.
However, such software does not have the feature of recording an audit trail (edit log), and
accordingly, the said feature was not operated throughout the year for all transactions recorded
in the software. Further, as the audit trail feature was not available or maintained, we are unable
to comment on whether the audit trail has been preserved by the Company as per the statutory
requirements.
3. As required by section 143(5) of the Act, we have considered the directions issued by the Comptroller &
Auditor General of India, the action taken thereon and its impact on the financial statements of the company
in "Annexure-C".
For and on behalf of
Ashwani & Associates
Chartered Accountants
FRN: 000497N
by the hand of
Arvind Jain
Place: Ludhiana Partner
Dated: 03.06.2025 Membership No.:097549
UDIN:25097549BMGQJB6264
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