In reply to your e-mail dated 01/08/2025, please find enclosed signed statement on impact of audit qualifications with Financials.
Awaiting price reaction for this filing.
Union Quality Plastics has reported zero revenue from operations for FY25, with total income of Rs. 604 lakhs coming entirely from other income. The auditor (Sagar & Associates) issued a Qualified Opinion with 8 separate qualifications covering: long-pending sundry debtors of Rs. 355.35 lakhs, dead stock of Rs. 158.06 lakhs without NRV assessment, unconfirmed sundry creditors of Rs. 396.93 lakhs, a Rs. 419.25 lakh advance to related party Ikon Associates with no documentation, unverified bank balances, a Rs. 14.30 lakh stuck fixed deposit with City Co-operative Bank, and unprovided old deposits of Rs. 87.78 lakhs. Net worth is fully eroded at negative Rs. 163.65 lakhs, accumulated losses continue, and current liabilities exceed current assets. The auditor flagged a material uncertainty on the company's ability to continue as a going concern. Management cited post-Covid demand collapse for HDPE tarpaulins and geo-membranes and shifting government priorities as reasons for the downturn, and stated they expect recovery through upcoming government tenders.
This is a deeply distressed small-cap with no operating business, fully eroded net worth, and a going-concern warning. The multiple unconfirmed balances, related-party advance without documentation, and stuck fixed deposit raise serious governance concerns. Stock carries very high risk; investors should treat this as a speculative recovery bet with significant chance of further value erosion or eventual delisting.