Procal Electronics India Ltd has submitted a revised Statement on Impact of Audit Qualifications for the financial year ended March 31, 2026, to the Bombay Stock Exchange. The correction addresses a discrepancy observed by the exchange, where the company inadvertently reported figures based on quarterly financial results instead of the audited yearly financial results. The revised filing confirms that the statutory auditors issued an audit report with an adverse opinion, highlighting significant material uncertainties regarding the company's ability to continue as a going concern.

The company's net worth has been fully eroded due to continuous losses, and there are no current business operations. The manufacturing unit at Silvassa, along with movable and immovable assets, was under the possession of Canara Bank due to credit facilities classified as Non-Performing Assets (NPA). These assets were sold through E-auction for an aggregate consideration of approximately Rs. 49.07 lakh, adjusted against outstanding dues. However, the auditors noted that complete supporting documents relating to the sale proceedings, appropriation of proceeds, and valuation basis were not made available for verification, preventing independent confirmation of the accounting treatment.

The table below presents the audited financial figures as reported before and after adjusting for the audit qualifications. There is no financial impact quantified by the adjustments in the revised statement.

Audit Qualifications

The adverse opinion stems from several key areas. The company allocated 76% of the total sale consideration towards inventories and 24% towards fixed assets, as no separate valuation was provided by Canara Bank. Consequently, the inventory balance was reduced to Nil. The auditors were unable to verify the existence, valuation, and accounting treatment of these inventories and fixed assets due to the lack of independent evidence and valuation reports.

Additionally, the company wrote off or wrote back various debit and credit balances based on management assessment and Board approval dated March 31, 2026. The auditors stated that adequate supporting documents and external confirmations were not provided to verify the appropriateness of these adjustments. Furthermore, the company did not obtain balance confirmations from trade receivables, trade payables, or lenders, making it impossible to verify the correctness and recoverability of these balances.

Banking and Operational Status

The company's bank accounts were inoperative during the year due to pending KYC compliance formalities. Certain expenses were incurred by directors through their personal accounts. The auditors expressed an inability to independently verify the completeness and authenticity of these transactions routed through personal accounts. The filing was signed by Mahendra Kumar Bothra, Managing Director, and PAMS & Associates, Statutory Auditor.

Procal Electronics India Limited reported a net loss of ₹4.12 lakh for the financial year ended March 31, 2026, as its statutory auditors raised serious doubts about the company's ability to continue as a going concern. The Board of Directors approved the audited standalone financial results for the quarter and year ended March 31, 2026, at a meeting held on May 30, 2026. The filing was submitted to the Bombay Stock Exchange pursuant to Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The company’s net worth has been fully eroded due to continuous losses, and it has not carried out any manufacturing or trading activities for several years. Current liabilities substantially exceed current assets, indicating significant financial stress. The manufacturing unit at Silvassa, along with movable and immovable assets, was under the possession of Canara Bank due to credit facilities classified as Non-Performing Assets. These assets were sold via e-auction for approximately ₹49.07 lakh, adjusted against outstanding dues, though auditors noted a lack of complete supporting documents to verify the accounting treatment.

Statutory auditors issued an adverse opinion on the financial statements, citing several material uncertainties. Key issues included the inability to verify the existence and valuation of inventories and fixed assets sold by the bank, the appropriateness of write-offs and write-backs of various balances, and the correctness of trade receivables and payables due to missing balance confirmations. Additionally, the company’s bank accounts were inoperative during the year due to pending KYC compliance, with certain expenses incurred by directors through personal accounts, preventing independent verification of those transactions.

Financial Performance for FY26

The company recorded total income of ₹114.48 lakh for the year, entirely comprising other income, as revenue from operations remained nil. Total expenses for the year stood at ₹118.60 lakh. The company reported a basic and diluted loss per share of ₹0.12 for the year. The paid-up equity share capital remained constant at ₹350 lakh.

The board also took on record the statement of assets and liabilities as of March 31, 2026, and the cash flow statement for the financial year. The audit report with an unmodified opinion on the audited financial results was adopted, although the broader financial statements received an adverse opinion. The company stated that it had no business operations during the year and incurred no employee benefit expenses, resulting in no impact from the new labour codes effective from November 21, 2025.