Solvex Edibles Limited disclosed its audited standalone and consolidated financial results for the year ended March 31, 2026, revealing a qualified opinion from its statutory auditors regarding the utilisation of IPO proceeds, employee benefits, and MSME liabilities. The Board of Directors approved these results in a meeting held on May 30, 2026. The company reported a standalone net loss of ₹12.57 lakh for the fiscal year, while consolidated operations yielded a net profit of ₹7.10 lakh.

The auditors, Arora Gupta & Co., identified three primary areas of concern. First, the company raised IPO funds aggregating ₹830.99 lakh for the acquisition of plant and machinery. However, the auditors expressed an inability to obtain adequate audit evidence regarding certain advances and the utilisation of these proceeds, specifically involving an advance to a subsidiary LLP and usage for the repayment or prepayment of borrowings. Management stated that the proceeds were utilised for the objects stated in the prospectus and that the qualification relates to the availability of evidence rather than a specific liability. The company is strengthening its documentation and monitoring mechanisms.

Second, the company did not recognise or disclose employee benefit obligations related to gratuity and leave encashment in accordance with AS-15 (Employee Benefits). Management noted that without an actuarial valuation, the impact could not be determined. The company is currently collating the necessary data to facilitate this valuation and will account for the liability once the assessment is complete.

Third, interest payable to Micro and Small Enterprises under the MSMED Act, 2006 was not recognised or provided for. Consequently, the impact on profit and liabilities remains unquantified. Management attributed this to the absence of complete records and vendor confirmations required to identify delayed payments and compute the resultant liability. A detailed review of vendor records is underway to evaluate the necessary recognition and disclosure requirements.

The financial statements for the standalone entity show total income of ₹6,692.07 lakh and total expenditure of ₹6,624.68 lakh. On a consolidated basis, total income was higher at ₹15,479.26 lakh against total expenditure of ₹15,358.12 lakh. The auditors confirmed that the financial impact of the qualifications has not been quantified for the reasons stated in the Independent Auditors' Report.

Standalone Financials

Consolidated Financials

Solvex Edibles Limited reported a standalone net loss of ₹12.57 lakh for the financial year ended March 31, 2026, a significant decline from the net profit of ₹283.86 lakh recorded in the previous year. The company's board approved the audited standalone and consolidated financial results for FY26 on May 30, 2026. Revenue from operations for the year decreased to ₹6,667.48 lakh from ₹7,470.61 lakh in FY25, while total expenses stood at ₹6,624.68 lakh.

Auditor's Qualified Opinion

Arora Gupta & Co., the statutory auditor, issued a qualified opinion on the financial results. The report highlighted that the company raised IPO funds aggregating ₹830.99 lakh for plant and machinery, of which ₹306.00 lakh was released as an advance. The auditors observed that ₹140.00 lakh of this advance was paid to a supplier in March 2026, which was simultaneously received back from the same party by a subsidiary, Golden Pearl Oil Products LLP, and reflected as a liability. The related plant and machinery had not been received by the audit date. Additionally, ₹590 lakh of IPO proceeds used to repay borrowings was subsequently redrawn for general business purposes, raising concerns about compliance with issue objects and regulatory requirements.

The auditors also noted that the company did not recognize employee benefit obligations for gratuity and leave encashment as required by Accounting Standard (AS) 15. Due to the absence of actuarial valuation, the liability could not be determined, leading to an understatement of profit and liabilities. Furthermore, the company did not recognize interest payable to Micro and Small Enterprises, a non-compliance with the Micro, Small and Medium Enterprises Development Act, 2006, and Accounting Standard (AS) 29.

Financial Performance

The standalone financial statements show a basic and diluted loss per share of ₹0.16 for FY26, compared to earnings per share of ₹4.36 in the previous year. The company's cash and bank balances increased significantly to ₹586.62 lakh as of March 31, 2026, from ₹9.29 lakh in the prior year, primarily driven by IPO proceeds. Shareholders' funds rose to ₹3,632.33 lakh, supported by an increase in share capital to ₹895.20 lakh and reserves and surplus to ₹2,737.13 lakh.

On a consolidated basis, the group reported a net profit of ₹7.10 lakh for FY26, down from ₹408.97 lakh in the previous year. Consolidated revenue from operations stood at ₹15,425.62 lakh. The auditors flagged non-payment of income tax liabilities across the group aggregating ₹333.37 lakh, comprising dues from the holding company and its subsidiaries, Shree Oils and Fats (I) Private Limited and Golden Pearl Oil Products LLP.

Fund Utilization

The company stated that total IPO proceeds of ₹1,886.98 lakh were raised between September 22, 2025, and September 26, 2025. As of March 31, 2026, the company reported utilizing ₹1,303.61 lakh, with ₹583.37 lakh remaining unutilized. The utilization included ₹306.00 lakh for capital expenditure, ₹590.00 lakh for repayment of borrowings, and ₹278.99 lakh for general corporate purposes. The company submitted a statement confirming no deviation or variation in the utilization of funds, although the auditor's report contradicted this assessment regarding the end-use of specific amounts.