Procal Electronics India Limited has clarified to BSE Limited that the delay in disclosing the resignation of its statutory auditor was due to an inadvertent administrative lapse caused by the absence of a dedicated compliance function. The company, which has been under suspension for a considerable period and is incurring losses, stated it lacked the internal resources to appoint a full-time Company Secretary or engage professional compliance support. The disclosure regarding the resignation of M/s. PAMS & Associates was submitted on July 3, 2026, bearing Acknowledgement No. 13470393, following a query from the exchange.

The company emphasized that the delay was unintentional and there was no motive to withhold material information from investors. Managing Director Mahendra Kumar Bothra expressed regret over the lapse and confirmed the company is taking steps to strengthen its internal compliance and monitoring mechanisms to ensure timely adherence to regulatory requirements in the future.

Auditor Resignation Details

The resignation of M/s. PAMS & Associates was accepted by the Board effective June 12, 2026. The firm cited geographical constraints and increasing compliance requirements for a listed entity as reasons for stepping down. The closure of the auditor's Mumbai branch in 2024 was a contributing factor, as it hindered the firm's ability to devote adequate time and resources to conduct the audit from Bhubaneswar.

M/s. PAMS & Associates confirmed there are no material reasons for the resignation other than those stated and no unresolved issues or qualifications requiring the attention of members or creditors. The Board recorded its appreciation for the services rendered by the firm. Procal Electronics is currently in the process of appointing a new statutory auditor in accordance with the Companies Act, 2013. The outgoing auditor will file Form ADT-3 with the Registrar of Companies within the prescribed time.

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.