PAE Ltd (517230) Quarterly Report Analysis & Insights

PAE Ltd

| Profit & Loss Statement for Year Ended March 31, 2026

⬤23rd Apr 26

Summary : PAE Limited faces significant audit concerns including unverified financials and bank balances, despite a strategic shift to agro-commodities and renewable energy.

Quarterly Report Analysis & Insights

Financial Disclosures

Cost of materials consumed: Rs. 126.56 Lakhs (FY26) vs Rs. 0.00 Lakhs (FY25).
Employee benefits expense: Rs. 17.14 Lakhs (FY26) vs Rs. 0.00 Lakhs (FY25).
Other expenses: Rs. 76.80 Lakhs (FY26) vs Rs. 60,072.89 Lakhs (FY25).
Revenue from Operation: Rs. 253.13 Lakhs (FY26) vs Rs. 0.00 Lakhs (FY25).
Other income: Rs. 0.51 Lakhs (FY26) vs Rs. 61,421.91 Lakhs (FY25).
Net cash inflow from operating activities: Rs. -1,579.32 Lakhs (FY26) vs Rs. -208.10 Lakhs (FY25).
Net cash used in financing activities: Rs. 1,578.04 Lakhs (FY26) vs Rs. 209.53 Lakhs (FY25).
Cash and cash equivalents at end of year: Rs. 0.61 Lakhs (FY26) vs Rs. 1.89 Lakhs (FY25).
Total Assets: Rs. 273.85 Lakhs (FY26) vs Rs. 17.55 Lakhs (FY25).
Total Equity: Rs. 133.14 Lakhs (FY26) vs Rs. -1,478.03 Lakhs (FY25).
Equity Share Capital: Rs. 100.00 Lakhs (FY26) vs Rs. 1,041.96 Lakhs (FY25).
Other Equity: Rs. 33.14 Lakhs (FY26) vs Rs. -2,519.99 Lakhs (FY25).
Non-Current Liabilities (Borrowings): Rs. 0.00 Lakhs (FY26) vs Rs. 910.00 Lakhs (FY25).
Current Liabilities (Trade Payables): Rs. 126.56 Lakhs (FY26) vs Rs. 0.00 Lakhs (FY25).
Write-off of quasi-equity from Mr. Jatinbhai R. Patel.
Standalone Financial Results.

Corporate Overview

Operations in India or elsewhere for renewable energy business.
Auditor's disclaimer of opinion due to significant unverified financial matters.
Inability to verify genuineness, occurrence, completeness, and accuracy of rice trading transactions.
Lack of supporting documentary evidence (GST returns, E-way bills, transport receipts) for revenue.
Inability to verify existence, accuracy, and completeness of reported cash and bank balances.
Appropriateness of dividend declaration questioned due to unverified profits and lack of liquid cash flows.
Lack of verified trade history in the newly adopted agriculture commodity segment.
Historically automobile-based business, now shifting to processing and trading of Agriculture Commodities.
New object clauses added for manufacturing, processing, and trading of ethanol and its derivatives.
New object clauses added for generating, developing, and dealing in renewable energy (solar, wind, hydro, etc.).
New object clauses include EV charging infrastructure and green mobility solutions.
Formal and compliant with regulatory requirements, announcing board decisions.
Processing and trading of Agriculture Commodities (specifically rice trading) as a new segment.
Potential future revenue from ethanol production and trading.
Potential future revenue from renewable energy generation and related services.
Strategic shift to agro-commodity sector, ethanol, and renewable energy implies future investment.
New object clauses allow for establishing, acquiring, and expanding distilleries and renewable energy plants.

Risk Factors

Auditors issued a disclaimer of opinion.
Unverified book profit and revenue.
Bank balances lack external confirmation.
Transactions lack supporting documentation.

Key Drivers

Shift to agro-commodity business.
New ethanol and renewable energy segments.
Bonus equity shares issued (6:1 ratio).
Final dividend of Rs. 0.20 recommended.

Auditor’s Report

Disclaimer of Opinion
Write-off of Quasi-Equity cum deposit of Rs. 5,38,84,446/- against accumulated losses.
Unverified Book Profit and Revenue (Rice Trading) with no banking transactions or supporting documents.
Appropriateness of Dividend Provision based on unverified book profits.
Unverified Bank Balances due to lack of details, statements, or external confirmations.
Shift in Business Focus to Agriculture Commodities with lack of verified trade history.

Board Commentary

Recommended final dividend of Rs. 0.20 per equity share for FY 2025-26.
Dividend is subject to approval by members at the AGM.
Compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
NCLT resolution order for write-off of quasi-equity against accumulated losses.
Alteration of Object Clause to include ethanol and renewable energy businesses, subject to shareholder approval.

Corporate Governance

Audit Committee reviewed standalone financial results.
Auditor's disclaimer of opinion on financial results.
Management's failure to provide sufficient audit evidence for transactions and balances.

Management Discussion & Analysis

Future Strategy

Shift business focus from automobile to agro-commodity sector.
Alteration of Memorandum of Association to include ethanol and renewable energy businesses.
Issue bonus equity shares to meet minimum public shareholding requirements.

Industry Overview

Management believes agro-commodity sector offers stronger growth potential.
Management believes ethanol and renewable energy sectors offer sustainable opportunities.

Operational Focus Areas

Conducting 76th AGM through Video Conferencing/Other Audio-Visual Means.
Appointing a Scrutinizer for the e-voting process.

Risk Control Measures

Management obtained written confirmation for quasi-equity write-off, believing accounting treatment is appropriate.
Bonus issue to public shareholders (excluding promoters) to achieve minimum public shareholding.

Critical Risks

Significant doubt on underlying operations and risk profile due to unverified trade history in new segment.
Inability to obtain sufficient appropriate audit evidence for financial results.
Risk of non-compliance with minimum public shareholding requirements without bonus issue.