Punjab Communications Ltd Auditor Reports

To,

The Members,

Punjab Communications Limited

Report on the Audit of the Financial Statements Adverse Opinion

We have audited the accompanying financial statements of Punjab Communications Limited (CIN:L32202PB1981SGC004616), which comprise the Balance Sheet as at 31 st 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 sec tion 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 31 st 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

?‚? As per the companys 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.

?‚? As per the Companys 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.

?‚? As per the Companys 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.

?‚? 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.

?‚? 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.

?‚? 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 Auditors Report Thereon

The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Boards Report including Annexures to Boards Report, Corporate Governance and Shareholders Information, but does not include the Financial Statements and our Auditors 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, Boards Report including Annexures to Boards 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 companys 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 companys 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 companys financial reporting process.

Auditors 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 auditors 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:

?‚? 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.

?‚? 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.

?‚? Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

?‚? Conclude on the appropriateness of managements 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 auditors 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 auditors 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 auditors 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

?‚? As required by the Companies (Auditors 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.

?‚? As required by Section 143(3) of the Act, based on our audit, we report that:

?‚? 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.

?‚? 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.

?‚? The Balance Sheet and the Statement of Profit and Loss dealt with by this Report are in agreement with the books of account.

?‚? 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.

?‚? The company being a Government Company, provisions of Section 164(2) of the Act, in respect of disqualification of Directors are not applicable.

?‚? 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 companys internal financial controls over financial reporting.

?‚? With respect to the other matters to be included in the Auditors 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.

?‚? With respect to the other matters to be included in the Auditors 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:

?‚? 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.

?‚? The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

?‚? There has been no delay in transferring amounts, required to be transferred, if any, to the Investor Education and Protection Fund by the Company.

?‚? (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;

?‚? 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;

?‚? 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.

?‚? The company has not declared or paid any dividend during the year under section 123 of the Act.

?‚? 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.

?‚? 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

(Referred to in paragraph 1 under Report on Other Legal and Regulatory Requirements section of our report to the Members of Punjab Communications Limited of even date)

To the best of our information and according to the information and explanations given to us by the company and the books of account and records examined by us during the course of our audit, we state that:

?‚? In respect of Companys Property, Plant and Equipment and Intangible Assets:

?‚? (A) The company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment and relevant details of Investment Property.

(B) The company has maintained proper records showing full particulars of intengible assets.

?‚? As explained to us and based on our examination of records, the company has a program of verification of Property, Plant and Equipment, which, in our opinion, is reasonable, having regard to the company and nature of its assets. In the year under review, the company has undertaken physical verification of property, plant and equipment through RFID tagging.

According to the information and explanations given to us, no material discrepancies were noticed on such verification.

?‚? As per the information and explanation given to us and based on our examination of records, title deed of immovable properties of land and buildings, Investment Property which are freehold, are held in the name of the company.

?‚? As explained to us and based on our examination of records, the company has not revalued its Property, Plant and Equipment, Investment Property or intangible assets or both during the year.

?‚? According to the information and explanations given to us, no proceedings have been initiated or are pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

?‚? (a) The physical verification of raw material items was carried out by the internal auditor of the company on 31st March 2025. As per the physical verification report dated 15th May 2025, no discrepancy of 10% or more in the aggregate for each class of inventory was noticed.

According to the information and explanations given to us, the companys management has not carried out physical verification of work-in process and sub-assemblies during the year.

(b) The Company does not have working capital facilities in excess of ?‚?5 crores in aggregate from banks, secured against current assets. Hence, reporting under Clause 3(ii)(b) of the Order is not applicable.

?‚? According to the information and explanations given to us, the company has not made investments in, provided any guarantee or security or granted any loans or advances in the nature of loans,

secured or unsecured, to companies, firms, Limited Liability Partnerships or any other parties during the year. Hence reporting under clause 3(iii) of the order is not applicable.

?‚? The company has not provided any loans or advances in the nature of loans or stood guarantee, or provided security to any party covered under section 185 and 186 of the company Act 2013 during the year. Therefore, provision of Clause 3(iv) of the Order is not applicable to the company.

?‚? The Company has not accepted any deposits or amounts which are deemed to be deposits from the public. Hence, reporting under Clause 3(v) of the order is not applicable.

?‚? The Company was not required to maintain cost records as per the provision of section of 148(1) of Company Act 2013, so accordingly this clause is not applicable.

?‚? (a) According to the information and explanations given to us and on the basis of our examination of the records of the company, the company is generally regular in depositing undisputed statutory dues including Goods and Services Tax, Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess, and other applicable statutory dues with the appropriate authorities. There were no undisputed amounts payable in respect of the above statutory dues which were outstanding as at the last day of the financial year for a period of more than six months from the date they became payable.

(b) There are no outstanding statutory dues referred to in sub-clause (a) above which have not been deposited as on March 31 st 2025, on account of disputes, except the following:

Nature of the Statute	Nature of Dues	Forum where dispute is pending	Period to which the amount relates	Total amount demanded (Amt. in rupees)	Amount deposited (Amt. in rupees)
Goods & Service Tax 2017	GST	Commissioner Appeals GST	FY 2019- 20	1,42,67,134.00	11,55,978.00

?‚? According to the information and explanations given to us by the management, there were no transactions relating to previously unrecorded income that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of l96l).

?‚? In our opinion and according to the information and explanations given to us:

?‚? The Company has not taken any loans or borrowings from any lender during the year. Hence, reporting under Clause 3(ix)(a) of the Order is not applicable to the company.

?‚? According to the information and explanations given to us, the company is not declared as Wilful defaulter by any bank or financial institution or other lender.

?‚? According to the information and explanations given to us, company has not obtained any term loan during the year. Hence, reporting under Clause 3(ix)(c) of the Order is not applicable to the company.

?‚? During the year, the company has not raised any funds on short term which have been utilized for long term purposes. Hence, reporting under Clause 3(ix)(d) of the Order is not applicable to the company.

?‚? During the year, the company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures. Hence, reporting under Clause 3(ix)(e) of the Order is not applicable to the company.

?‚? The company has not raised loans during the year on pledge of securities held in its subsidiaries, joint ventures or associate companies Hence, reporting under clause 3(ix)(f) of the Order is not applicable to the company.

?‚? (a) The company has not raised money by way of initial public offer or further public offer (including debt instruments) during the year. Hence reporting under clause 3(x)(a) of the Order not applicable.

(b) During the year, the company has not made any preferential allotment or private placement of shares or convertible debentures (fully or partly or optionally) and hence reporting under clause 3(x)(b) of the Order is not applicable.

?‚? (a) No fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

?‚? No report under sub-section (12) of section 143 of the Companies Act has been filed in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government, during the year and up to the date of this report.

?‚? No whistle-blower complaints were received during the year by the Company.

?‚? The Company is not a Nidhi Company. Therefore, the provisions of clause 3(xii) of the Order are not applicable to the Company.

?‚? In our opinion and according to the information and explanations given to us the company is in compliance with provisions of section 177 and 188 of the Act wherever applicable all transactions with related parties and the details of related party have been disclosed in the financial statements as required by applicable accounting standards.

?‚? (a) In our opinion, the company has an adequate internal audit system which commensurate with the size and nature of its business.

(b) We have considered, the internal audit reports for the year under audit, issued to the Company during the year and till date, in determining the nature, timing and extent of our audit procedures.

?‚? In our opinion, during the year the company has not entered into any non-cash transaction with its directors or persons connected with its directors and hence the reporting under Clause 3(xv) of the Order

is not applicable to the company.

?‚? (a) In our opinion, the company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Hence, reporting under Clause 3(xvi)(a), (b) and (c) of the Order is not applicable.

(b) In our opinion, there is no core investment company within the Group (as defined in the Core Investment Companies (Reserve Bank) Directions, 2016) and accordingly reporting under Clause 3(xvi)(d) of the Order is not applicable.

?‚? According to the information and explanations given to us, company has incurred cash losses during the current financial year 2024-25 amounting to ?‚? 17.42 lacs (including interest income during the year under OTS with U.P. CO-OPERATIVE SPINNING MILLS FEDERATION LIMITED amounting to ?‚? 65.77 lacs) and earned cash profit amounting to ?‚? 1022.98 lacs in the preceding financial year 2023-24.

?‚? There has been no resignation of the statutory auditors of the company during the year.

?‚? On the basis of the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the Financial Statements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report that Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all the liabilities falling due within a period of one year from balance sheet date, will get discharged by the Company as and when they fall due.

?‚? As per our opinion & according to the information & explanations given to us, the company does not meet the criteria for the applicability of Section 135 of the Companies Act 2013, Accordingly, reporting under this clause in not applicable.

?‚? In our opinion and according to the information and explanation given to us, the company has a fully owned subsidiary company Punjab Digital Industrial Systems Ltd. (PDISL) Which is under liquidation, by the order of Honble Punjab & Haryana High Court vide order dated 20/02/2009, due to which financial statements of PDISL are not being prepared, so we are unable to give our opinion on the same.

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

(Referred to in paragraph 2(f) under Report on Other Legal and Regulatory Requirements section of our report to the Members of Punjab Communications Limited of even date)

Report on the Internal Financial Controls with reference to the Financial Statements under Clause (i) of sub- section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls with reference to financial statements of Punjab Communications Limited ("the Company") as of March 31, 2025 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys Management is responsible for establishing and maintaining internal financial controls with reference to financial statements based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (the "ICAI"). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the ICAI and the Standards on Auditing prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference to financial statements. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of internal financial controls with reference to financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained, is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls system with reference to financial statements.

Meaning of Internal Financial Controls with reference to financial statements

A companys internal financial controls with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial controls with reference to financial statements includes those policies and procedures that

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference to financial statements

Because of the inherent limitations of internal financial controls, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to financial statements to future periods are subject to the risk that the internal financial controls with reference to financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Adverse Opinion

According to the information and explanations given to us, and based on our audit, the following material

weaknesses have been identified in the operating effectiveness of the companys internal financial control over financial reporting as at March 31 st 2025:

?‚? The company did not have an appropriate internal control system for correct valuation of inventory. Further, the internal control system for identification & allocation of overheads to inventory is also not followed. These could potentially result in material misstatements in the companys inventory, and Consumption. (Refer to para "Basis for adverse opinion" in the independent Auditors report)

?‚? The company did not have an appropriate internal control system for customer balance confirmation, customer balance reconciliation and ageing analysis of outstanding trade receivables, which could potentially result in material misstatements in the companys trade receivables. (Refer to para "Basis for adverse opinion" in the independent Auditors report)

?‚? The company did not have an appropriate internal control system for supplier balance confirmation, supplier balance reconciliation and ageing analysis of outstanding trade payables, which could potentially result in material misstatements in the companys trade payables. (Refer to para "Basis for adverse opinion" in the independent Auditors report).

A material weakness is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the companys annual financial statements will not be prevented or detected on a timely basis.

In our opinion, because of the effects/possible effects of the material weakness/es described above on the achievement of the objectives of the control criteria, the Company has not maintained adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were not operating effectively as of March 31 st 2025, based on "the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India".

We have considered the material weakness/es identified and reported above in determining the nature, timing and extent of audit tests applied in our audit of the financial statements of the company as at and for the year ended March 31 st 2025, and this material weakness have not affected our opinion on the financial statements as we have issued an adverse opinion on the financial statements.

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

(Referred to in paragraph 3 under Report on Other Legal and Regulatory Requirements section of our report to the Members of Punjab Communications Limited of even date)

Directions under section 143(5) of the Companies Act, 2013 issued by the Comptroller & Auditor General of India

As per the directions issued under Section 143(5) of the Act, we report that:

?‚? Yes, the company has system in place to process all the accounting transactions on a day-to-day basis through the IT system.

?‚? As informed to us, there is no case of the waiver/write-off of debts/loans/interest during the year under review.

?‚? No grants have been received by the company during the year under audit.

?‚? As informed to us, there is no dispute in any contract for the supply of hardware or software.

?‚? As informed to us, the company does not provide manpower services to any agency. Therefore, it is not applicable.

?‚? As per information and explanations provided to us, no franchise agreement had been entered into by the company during the year under audit.

?‚? As per information and explanations provided to us, no cases have come to our notice wherein software, hardware and IT-enabled systems are redundant/outdated.

?‚? No grants/subsidies have been received by the company during the year under audit.

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

We have conducted the audit of accounts of PUNJAB COMMUNICATIONS LIMITED for the year ended March 31 st 2025 in accordance with the directions/sub-directions issued by the Comptroller and Auditor General of India under Section 143(5) of the Companies Act, 2013 and certify that we have complied with all the Direction/Sub-directions issued to us.

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

COMMENTS OF TIIE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143 (6) (b) OF THE COMPANIES ACT 2013 ON THE FINANCIAL STATEMENTS OF PUNJAB COMMUNICATIONS LIMITED FOR THE YEAR ENDED 31 MARCH 2025

The preparation of financial statements of Punjab Communications Limited for the year ended 31 March 2025 in accordance with the financial reporting framework prescribed under the Companies Act, 2013 (Act) is the responsibility of the management of the Company. The statutory auditors appointed by the Comptroller and Auditor General of India under Section 139(5) of the Act are responsible for expressing opinion on the financial statements under Section 143 of the Act based on independent audit in accordance with the standards on auditing prescribed under Section 143(10) of the Act. This is stated to have been done by them vide their Audit Report dated 03.06.2025.

I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit of the financial statements of Punjab Communications Limited for the year ended 31 March 2025 under Section 143(6)(a) of the Act. This supplementary audit has been conducted independently without access to the working papers of the statutory auditors and is limited primarily to inquiries of the statutory auditors and Company personnel and a selective examination of some of the accounting records.

Based on my supplementary audit, I would like to highlight the following significant matters under Section 143(6)(b) of the Act which have come to my attention and which in my view are necessary, for enabling a better understanding of the financial statements and the related audit report:

?‚? Comment on Profitability Statements of Profit and Loss

Revenue from Operations (Note 25): ?‚? 1721.43 lakh

?‚? The above includes ?‚?77.20 lakh towards unbilled revenue recognized for pending installation and commissioning obligations of various contracts. As per significant accounting policy of the Company on revenue recognition read with para-31 of Ind AS-115, "An entity shall recognize revenue when it satisfies a performance obligation by transferring a promised goods or service to a customer." Since the company has not fulfilled the performance obligation, recognition of revenue resulted in non-compliance with provisions of Ind AS-115 and overstatement of Revenue from Operations and overstatement of Trade Receivables by ?‚? 77.20 lakh with consequent understatement of loss for the year to that extent.

?‚? Comment on Disclosure

2. As per para-41 of Ind AS-1 (Presentation of financial statements), "When an entity reclassifies comparative amounts, it shall disclose; the nature of the reclassification, the amount of each item or class of items that is reclassified; and the reason for the reclassification." The company has reclassified comparative figures of Other Financial Assets (Note 5), Other Non-Current Assets (Note 7), Trade Receivables (Note 9), Other Financial Assets (Note 13) and Other Current Assets (Note 14). however, disclosure in line with Ind AS 1 was not complied.

For and on behalf of the Comptroller & Auditor General of India

Place : Chandigarh Sd/-

Date : 11.11.2025 (Nazli J. Shayin)

Principal Accountant General (Audit)

Punjab, Chandigarh