Punjab Communications Limited (Puncom) has come under intense scrutiny following the release of its unaudited financial results for the quarter ended June 30. The company's statutory auditors, Ashwani & Associates, have issued an adverse opinion, citing significant accounting irregularities that cast doubt on the fairness of the financial statements.

Key Accounting Issues Identified

The auditors highlighted several material misstatements in their review report:

Inventory Valuation Discrepancies

• Raw materials, valued at ₹1,214.27 crore, were incorrectly priced using the 'last purchase rate' method instead of the company's stated FIFO (First-In-First-Out) policy.
• A substantial discrepancy of ₹630.18 crore was noted between the balance sheet and ERP system values for raw material inventory.

Work-in-Process Valuation

• The work-in-process inventory, carried at ₹129.45 crore, excluded direct labor costs, contrary to the company's accounting policy.

Finished Sub-assemblies Valuation

• Finished sub-assemblies, valued at ₹445.01 crore, did not include overhead costs as required by the company's policy.

Lack of Expected Credit Loss (ECL) Policy

• The company failed to implement an ECL estimation policy for trade receivables and other financial assets, as mandated by Ind AS 109.

Implications of the Adverse Opinion

The auditors concluded that these accounting irregularities are pervasive, making it impossible to accurately assess Puncom's true financial performance for the quarter. As a result, they stated that the interim financial results "do not present fairly, in all material respects, its results of operations for the quarter ended 30th June."

Company's Response

Punjab Communications Limited's Board of Directors approved these unaudited financial results in their 232nd Board Meeting held on August 26. The company has not yet issued a public statement addressing the auditors' concerns or outlining any corrective measures.

Market Implications

This adverse opinion raises serious questions about Puncom's financial reporting practices and internal controls. Investors and regulatory bodies are likely to scrutinize the company's future financial statements closely, potentially impacting market confidence in the short term.

Looking Ahead

As the situation unfolds, stakeholders will be watching closely for any remedial actions proposed by Punjab Communications Limited to address these accounting issues and restore confidence in its financial reporting. The company may face regulatory scrutiny and potential penalties if these irregularities are not promptly and adequately addressed.

Investors are advised to exercise caution and seek professional advice when considering their positions in Punjab Communications Limited stock, given the uncertainty surrounding its financial statements.

Punjab Communications Limited (Puncom) has announced a delay in submitting its quarterly financial results for the period ending June 30, 2025. The company, which operates in the telecommunications sector, cited a recent change in its Chief Financial Officer (CFO) as the primary reason for the postponement.

New CFO Appointment

According to a regulatory filing, CA Saurav Gupta from the Department of Health and Family Welfare, Government of Punjab, has taken charge as the new CFO of Punjab Communications Limited. This transition occurred on June 12, 2025, following government orders dated June 10, 2025.

Rescheduled Board Meeting

The company's 232nd Board Meeting, originally scheduled to be held by August 14, 2025, as per SEBI regulations, has been rescheduled to August 26, 2025. This meeting will consider and approve the unaudited quarterly financial results for the quarter ended June 30, 2025.

Reasons for Delay

Puncom attributed the delay to the following factors:

1. Recent change in the CFO position
2. Non-availability and finalization of unaudited quarterly financial results by the due date

In its communication to the Bombay Stock Exchange, the company stated, "Due to consequent change in CFO of the Company, there is a possibility in delay of finalization of results by the due date i.e. 14.08.2025."

Regulatory Compliance

Punjab Communications Limited acknowledged that the rescheduled date falls beyond the regulatory deadline set by the Securities and Exchange Board of India (SEBI). As per SEBI's Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015, listed companies are required to convene a board meeting within 45 days from the end of each quarter to review and record their financial results.

The company has assured stakeholders of its commitment to regulatory compliance, stating, "We further assure to be more compliant with the provisions of SEBI (LODR), Regulations, 2015 in the future."

Investors and stakeholders of Punjab Communications Limited are advised to take note of this delay in financial reporting. The company has promised to submit the notice of the rescheduled Board Meeting to the stock exchange shortly, in compliance with Regulation 29 of SEBI (LODR) Regulations, 2015.