Union Quality Plastics Limited (UQPL), listed on the BSE under Scrip Code: 526799, has released its audited financial results for the quarter and year ended 31 March 2025, showing a net loss of ₹3.86 crore for the financial year. The company, whose registered office is in Mumbai and corporate operations in Hyderabad, convened its Board Meeting on 30 May 2025, during which several key items were discussed and approved.

According to the company’s official communication to BSE, the board meeting, which commenced at 4:30 P.M. and concluded at 7:30 P.M., approved:

1. Audited standalone financial results for the quarter/year ended 31 March 2025.

2. Auditor’s Report with a Qualified Opinion issued by Sagar & Associates.

3. Declaration under Regulation 33(3)(d) regarding the audit opinion.

4. Statement of impact of audit qualifications.

5. Appointment of M/s Atluri Ramesh & Associates as Secretarial Auditors for FY 2024–25.

6. Appointment of Mr. Sayed Shahnawaz Nazir as the Internal Auditor.

Financial Highlights – FY25:

• Total Income: ₹6.03 crore

• Total Expenses: ₹7.63 crore

• Net Loss: ₹3.86 crore

• Earnings Per Share (EPS): ₹(0.17)

• Share Capital: ₹6.93 crore

• Reserves & Surplus: ₹(8.56 crore)

The balance sheet shows the company’s net worth remains negative at ₹(1.63 crore) with current liabilities exceeding current assets, raising serious doubts over its ability to continue as a going concern, as explicitly stated by the auditors.

Auditor's Qualified Opinion:

The statutory auditors Sagar & Associates issued a Qualified Opinion, citing multiple concerns:

• ₹1.36 crore in long-outstanding receivables, some pending for over three years with no further provisions made.

• ₹1.58 crore in non-moving inventory for over two years, with no NRV assessment conducted.

• ₹3.97 crore in creditors pending for more than three years, with no confirmation or reconciliations.

• ₹4.55 crore in Other Current Assets, of which ₹4.19 crore is a related party advance with unclear terms, and ₹35.33 lakh receivable from another party without confirmed terms.

• Incomplete bank statement confirmations for ₹1.37 lakh.

• ₹14.30 lakh in fixed deposits with City Bank without confirmations.

• ₹87.78 lakh in other financial assets, mainly tender deposits, still unprovided for.

These matters collectively raise material uncertainty about the company’s financial sustainability, according to the auditor's remarks. Despite management's representation, the auditors were unable to obtain adequate audit evidence for various balances.

Cash Flow Statement Insights:

The cash flow from operations stood at ₹1.60 lakh, reflecting tight liquidity. The company did not engage in any significant financing or investing activities during the year.

Regulatory Compliance and Governance:

As part of SEBI-mandated disclosures:

• The company submitted a Declaration under Regulation 33(3)(d), acknowledging the qualified audit opinion.

• New appointments were made to bolster internal controls, including an Internal Auditor and a Secretarial Auditor.

The Board has acknowledged these challenges and is expected to take corrective actions. However, with accumulated losses, declining revenue, stagnant inventories, and receivables under scrutiny, Union Quality Plastics faces critical financial headwinds.

Going Forward:

The management, while preparing financial statements, has assumed going concern status, but the auditors have emphasized that unless corrective actions are undertaken urgently, the company's operational future remains uncertain. They’ve recommended a reassessment of asset realizability and debt recovery mechanisms, especially with respect to related-party transactions and inventory obsolescence.

Despite the setbacks, the company continues to remain compliant with SEBI LODR disclosure regulations and aims to revamp internal procedures. Stakeholders, including shareholders and creditors, will be closely monitoring developments, especially the outcome of recovery efforts on receivables and clarity on its large outstanding liabilities.

The Upcoming IPOs in this week and coming weeks are Monika Alcobev, NSDL, Anthem Biosciences, Spunweb Nonwoven.

The Current active IPO are Smartworks Coworking, Asston Pharmaceuticals, CFF Fluid Control.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst.