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Solex Energy Ltd.

BSE: 532566 Sector: Infrastructure
NSE: SOLEX ISIN Code: INE880Y01017
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Solex Energy Ltd. (SOLEX) - Auditors Report

Company auditors report

To the Members of

Solex Energy Limited

Report on the audit of the Standalone Financial Statements

Opinion

We have audited the accompanying financial statements of Solex Energy Limited("the Company") which comprises the Balance Sheet as at March 312021 theStatement of Profit and Loss and the Cash Flow Statement for the year then ended and notesto the financial statements including a summary of significant accounting policies andother explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statement give the information required by theCompanies Act 2013 as amended ("the act") in the manner so required and give atrue and fair view in conformity with the accounting principles generally accepted inIndia of the state of affairs of the Company as at March 312021 its profit and its cashflows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013 as amended ("the Act"). Ourresponsibilities under those Standards are further described in the "Auditor'sResponsibilities for the Audit of the Standalone Financial Statements" section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the financial statements under the provisions of the Actand the Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence obtained by us is sufficient and appropriate to provide a basis for our opinion.

Information other than the Financial Statements and Auditor's Report thereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises Board's Report including Annexures to Board's Report but does notinclude the financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

Management's Responsibilities for the Standalone Financial Statements

The Board of Directors of the Company are responsible for the preparation andpresentation of the financial statements that gives a true and fair view of the net profitof the financial position financial performance and cash flows of the Company inaccordance with the applicable accounting standards prescribed under Section 133 of theAct read with relevant rules issued thereunder and other accounting principles generallyaccepted in India. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Statement that give a true and fair view and are free from material misstatementwhether due to fraud or error.

In preparing the financial statements the Board of Directors are responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessthe Board of Directors either intends to liquidate the Company or to cease operations orhas no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole is free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of theses financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresent at ions or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under Section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by the Board of Directors.

• Conclude on the appropriateness of the Board of Directors' use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represents theunderlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the "Annexure 1" a statement on the matters specified inparagraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act we report that:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account;

d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014 as amended;

e) On the basis of the written representations received from the directors as on March31 2021 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2021 from being appointed as a director in terms of Section 164 (2) of theAct;

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these financial statements and the operatingeffectiveness of such controls refer to our separate Report in "Annexure 2" tothis report;

g) In our opinion the managerial remuneration for the year ended March 312021 hasbeen paid/provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to the Act;

h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

1) The Company does not have major pending litigations which would impact its financialposition.

2) The Company does not have long-term contracts including derivative contracts forwhich there are material foreseeable losses.

3) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

Annexure 1 referred to in clause 1 of paragraph on the report on other legal andregulatory requirements of our report of even date

Re: Solex Energy Limited

i. a) Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

b) All fixed assets have not been physically verified by the management during the yearbut there is a regular program of verification which in our opinion is reasonable havingregard to the size of the Company and the nature of its assets. No material discrepancieswere noticed on such verification.

c) According to the information and explanations given to us by the management thetitle deeds of the immovable properties included in property plans and equipment are heldin the name of the Company.

ii. The management has conducted physical verification of inventory at reasonableintervals during the year and no material discrepancies were noticed on such physicalverification.

iii. According to the information and explanation given to us by the management theCompany has not granted loans to companies firms or other parties covered in the registermaintained under section 189 of the Companies Act 2013.

iv. In our opinion and according to the information and explanations given to usprovisions of section 185 and 186 of the Companies Act 2013 in respect of loans todirectors including entities in which they are interested and in respect of loans andadvances given investments made and guarantees and securities given have been compliedwith by the Company.

v. We have broadly reviewed the books of account maintained by the Company pursuant tothe rules made by the Central Government for the maintenance of cost records under section148(1) of the Companies Act 2013 related to the manufacture and are of the opinion thatprima facie the specified accounts and records have been made and maintained. We havenot however made a detailed examination of the same.

vi. a) The Company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund employees' state insuranceincome-tax duty of custom value added tax goods and services tax cess and otherstatutory dues applicable to it.

b) According to the information and explanations given to us by the management noundisputed amounts payable in respect of provident fund employees' state insuranceincome tax duty of custom value added tax cess and other material statutory dues wereoutstanding at the year end for a period of more than six months from the date theybecame payable.

c) According to the records of the Company the dues outstanding of income-taxsales-tax service tax duty of custom duty of excise value added tax goods andservices tax and cess on account of any dispute are as follows:

Name of the statue Nature of dues Amount of Demand (Rs.) Period for which amounts relates to Forum where dispute is pending Amount paid (Rs.) Amount unpaid (Rs.)
Income Tax Act 1961 Income Tax 202380 FY 2017-18 NA 202380
Income Tax Act 1961 Income Tax (DDT) 563570 FY 2018-19 NA 563570
Gujarat Value Added Tax Act 2003 Gujarat CST 5865258 FY 2016-17 Deputy Commissioner of State Tax Appeal-6 Vadodara 317000 5548258
Gujarat Value Added Tax Act 2003 Gujarat VAT 2840591 FY 2016-17 Deputy Commissioner of State Tax Appeal-6 Vadodara 300000 2540591
Central Goods and Services Tax Act 2017 CGST 8733438 Jul 2017- Mar 2018 NA 8733438
Jharkhand Goods and Services Tax Act 2017 SGST 8733438 Jul 2017- Mar 2018 NA 8733438

vii. In our opinion and according to the information and explanations gives to us bythe management the Company has not defaulted in repayment of loans or borrowing to afinancial institution bank or government or dues to debenture holders.

viii. According to the information and explanations given to us by the management theCompany has not raised any money by way of initial public offer/ further public offer/debtinstruments. However The Company has raised money of Rs. 22200000/- by term loansunder the Covid Emergency Credit Line Scheme to meet the liquidity crunch and cash flowmismatch on account of outbreak of COVID-19. The fund has been utilized for that purposeduring the year.

ix. Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven to us by the management we report that no material fraud by the Company or nomaterial fraud on the Company by the officers and employees of the Company has beennoticed or reported during the year.

x. According to the information and explanations given by the management themanagerial remuneration has been paid/provided by the company to its directors inaccordance with provisions of section 197 read with Schedule V of the Act.

xi. In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 3(xii) of the Order are not applicable to the Company and hence not commented upon.

xii. According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 188 and section 177of Companies Act 2013 where applicable and the details have been disclosed in the notesto the financial statements as required by the applicable accounting standards.

xiii. According to the information and explanations given to us and on an overallexamination of the balance sheet the company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) are not applicable tothe company and not commented upon.

xiv. According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withhim as referred to in section 192 of Companies Act 2013.

xv. According to the information and explanations given to us the provisions ofsection 45-1A of the Reserve Bank of India Act 1934 are not applicable to the Company.

Annexure 2 to the Independent auditor's report of even date on the financial statementsof Solex Energy Limited

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ('the Act)

We have audited the internal financial controls over financial reporting of SolexEnergy Limited (the Company') as of March 312021 in conjunction with our audit of thefinancial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's Management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the‘Guidance Note') issued by the Institute of Chartered Accountants of India (ICAI).These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to the Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting with reference to these financial statements based onour audit. We conducted our audit in accordance with the Guidance Note and the Standardson Auditing as specified under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls and both issued by the ICAI. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting with reference to these financial statementswas established and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting with reference to thesefinancial statements and their operating effectiveness. Our audit of internal financialcontrols over financial reporting included obtaining an understanding of internalfinancial controls over financial reporting with reference to these financial statementsassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting with reference in these financial statements.

Meaning of Internal Financial Controls Over Financial Reporting With Reference to theseFinancial Statements

A company's internal financial control over financial reporting with reference to thesefinancial statements is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of the financial statements forexternal purposes in accordance with generally accepted accounting principles. A company'sinternal financial control over financial reporting with reference to these financialstatements includes those policies and procedures that:

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of the financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the AS financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting withreference to these Financial Statements

Because of the inherent limitations of internal financial controls over financialreporting with reference to these financial statements including the possibility ofcollusion or improper management override of controls material misstatements due to erroror fraud may occur and not be detected. Also projections of any evaluation of theinternal financial controls over financial reporting with reference to these financialstatements to future periods are subject to the risk that the internal financial controlover financial reporting with reference to these financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting with reference to these financialstatements and such internal financial controls over financial reporting with reference tothese financial statements were operating effectively as at March 312021 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note issued by theICAI.

For KSA & Co.

Firm reg. no.: 0003822C

Chartered Accountants

Arun Kanodiya

Membership no.: 077131

Place: Surat

Date: 30.06.2021

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