Punjab Communications Limited (PCL) has announced a significant change in its board composition, with the appointment of Sandeep Hans, IAS, as Director and Sr. Vice Chairman, effective August 26, 2025. This development comes as part of a reshuffle initiated by the company's holding entity, Punjab Information and Communication Technology Corporation Ltd.

Board Reshuffle

The company's 232nd board meeting, held on August 26, 2025, approved Hans's appointment while simultaneously accepting the withdrawal of Rahul Chaba, IAS, from the board. This change in directorship was communicated to the Bombay Stock Exchange in compliance with Regulation 30 of SEBI (LODR) Regulations, 2015.

Profile of Sandeep Hans

Sandeep Hans, a 2010 batch IAS officer, brings a wealth of experience to his new role at Punjab Communications Limited. His current position as Managing Director of Punjab Information & Communication Technology Corporation Limited (Punjab Infotech) aligns well with PCL's operations in the communications sector.

Hans's diverse background in public administration includes:

• Director-cum-Additional Secretary, Social Justice, Empowerment & Minorities
• Special Secretary in various departments including Personnel, General Administration & Coordination, and Printing & Stationery
• Additional CEO, Punjab Bureau of Investment Promotion
• Deputy Commissioner, Patiala

Implications for Corporate Governance

As a nominee of the holding company, Hans is considered related to other directors appointed by Punjab Infotech. This relationship structure is common in government-affiliated enterprises and ensures alignment between the holding company and its subsidiaries.

Compliance and Transparency

In its communication to the Bombay Stock Exchange, Punjab Communications Limited affirmed that Sandeep Hans is not debarred from holding the office of director by virtue of any SEBI order or any other authority. This declaration aligns with SEBI's circular No. LIST/COMP/14/2018-19 dated June 20, 2018, emphasizing the company's commitment to regulatory compliance and transparency.

The appointment of Sandeep Hans, with his extensive experience in public administration and technology-related roles, is expected to bring fresh perspectives to Punjab Communications Limited's board. As the company navigates the evolving telecommunications landscape, Hans's leadership could play a crucial role in shaping its strategic direction and operational efficiency.

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.