Atharva Poly-Plast's FY26 financials carry a clean audit opinion, but the numbers underneath it moved in the wrong direction: profit is no longer backed by cash, receivables have ballooned, and debt-like obligations sit outside reported borrowings. The record also shows three statutory auditors in under a year and a set of related-party loans that the company's own disclosures do not fully reconcile.
Key findings
- FY26 profit is not backed by cash
Major- Operating cash flow fell to 0.27x profit in FY26 from 1.38x in FY25, while receivable days rose 138% year-on-year from 33 to 79. The statutory auditor still issued an unqualified opinion for the year ended March 31, 2026, with no qualification, reservation, or adverse remark. Other non-current assets jumped from ₹2.28 crore to ₹14.59 crore during the year. - Promoter and group entities have lent the company ₹7.76 crore interest-free on demand
Major- Related-party demand loans stood at ₹7.76 crore as of FY2025-26, up from ₹4.13 crore the prior year, all unsecured and non-interest bearing. The Board's Report states no related-party contracts were entered into on a non-arm's-length basis, and the company says no loans were granted to promoters or related parties. Trade receivables include dues from firms in which directors have significant control. - Debt-like obligations sit outside reported borrowings
Major- The company has 43,83,936 zero-coupon redeemable debentures of ₹1 each outstanding to Atharva Polymers Private Limited, redeemable at a premium of ₹2.72 crore, with repayment tied to receipt of DIC Subsidy tranches. A ₹2.5 crore term loan from The Shamrao Vithal Co-operative Bank Ltd, secured by factory land and building, was not registered within the statutory period due to administrative reasons. - Auditor churn at Atharva Poly-Plast
Minor- D.R. Muniyal & Associates was appointed statutory auditor on August 30, 2024, then resigned on May 1, 2025 citing pre-occupation with other assignments. P R A S S & Associates LLP was appointed on May 26, 2025 for FY 2024-25, with its term running from the 12th AGM to the 17th AGM. - Contingent liabilities are minimal and declining
Minor- Contingent liabilities were nil as at March 31, 2025, down from 1.67 crore in the prior two years. The only outstanding criminal litigation is a case the company itself filed against a customer, S Ten Lighting, in 2021. No pending litigations impact the financial position, and no funds are required to be transferred to IEPF.
What to watch
- DIC Subsidy tranches. Receipt of the sixth to tenth tranches triggers repayment of the zero-coupon debentures to Atharva Polymers Private Limited.
- Term loan charge registration. Filing of e-Form CHG-4 with additional fees for the Shamrao Vithal Co-operative Bank Ltd charge is pending.
- Criminal case outcome. The company's case against S Ten Lighting remains pending before the Ghodnadi court, as disclosed in the DRHP dated 7 July 2026.
Bottom line: This is an audited record with a clean opinion, but the cash conversion has deteriorated sharply and the related-party picture is incomplete. The risk sits in the gap between what the company discloses and what the notes show, interest-free promoter loans, unregistered charges, and debentures tied to subsidy receipts. Watch whether the DIC tranches arrive and whether the charge filing gets completed.