🧠 At a glance
On 15th February 2025, a fire at Sati Poly Plast’s premises destroyed inventory, fixed assets, and accounting records. But instead of a recovery plan, shareholders got… a “Disclaimer of Opinion” from the auditor. That’s audit-speak for: “Humse na ho payega.” FY25 results were approved by the board. But verified? Not really.
Welcome to India’s first “blindfolded balance sheet.”
🏢 About the Company
Sati Poly Plast Ltd (formerly a Pvt Ltd) is engaged in manufacturing and supply of plastic-based products — used in packaging, industrial applications, and consumer use. The company operates out of Bhagalpur, Bihar, with a corporate office in Noida.
Their website says “Poly for Every Purpose.” We think they meant “Poly Problems for Every Auditor.”
👔 Key Managerial Personnel (KMP)
| Name | Role |
|---|---|
| Akanksha Jain | Company Secretary |
| Auditor | Keyur Shah & Associates, Ahmedabad |
| CFO | Not disclosed in filings |
No Managing Director or CFO commentary on the fire was released. Apparently, the flames spoke louder than words.
🔥 The Fire That Lit Up FY25 (And The Balance Sheet)
According to the audit report:
- 🔥 Fire broke out on 15 February 2025
- 📄 Destroyed accounting records, supporting documents, inventory, and fixed assets
- 💰 Management claimed insurance — but the survey is still “in process”
- 😶🌫️ Auditors say: “We couldn’t verify anything, because nothing is left to verify.”
This is not a figure of speech — the actual report says:
“We were unable to obtain sufficient and appropriate audit evidence regarding the accounting treatment of the loss due to fire.”
📉 FY25 Results Summary (Or What’s Left of It)
Note: Due to the auditor disclaimer and missing data, actual numbers were not disclosed in full detail. Only high-level summaries were released.
But here’s what we know from the filings:
| Metric | FY25 (₹ lakh) | Comment |
|---|---|---|
| Financial Results | Approved | But not verifiable |
| Auditor Opinion | Disclaimer of Opinion | Auditor said “Nope” |
| Fire Loss | Not quantified | Pending insurance |
| Insurance Claim | Filed | Amount TBD |
| Documents Destroyed | Most | Including inventory & fixed assets |
It’s like trying to read a balance sheet printed in invisible ink.
🔎 What Did the Auditor Say?
Keyur Shah & Associates issued a Qualified – Disclaimer of Opinion, citing:
- No proper records to verify
- Inventory & asset destruction
- No reliable alternative evidence provided by management
- Inability to validate insurance claims or write-offs
The exact quote:
“We do not express an opinion on the financial results… because of the substantive nature of the matters stated.”
Basically, Sati Poly Plast’s results are so incomplete that the auditor refused to even pretend.
🧮 Forward Value (FV) Estimate
📛 NOT POSSIBLE.
We usually compute FV using EPS × Industry PE. But with:
- No EPS
- No PAT
- No revenue
- No confidence from the auditor
…we have nothing to base a forward valuation on.
If you see someone hyping this stock on Twitter, just reply “🔥” and move on.
🏭 Fire Damage Impact: What We Know
| Area Damaged | Status |
|---|---|
| Fixed Assets | Burned |
| Inventory | Gone |
| Accounting Records | Destroyed |
| Backup Systems | Not Mentioned |
| Insurance | Claimed (no confirmation of payout) |
There is no mention of cloud storage, off-site backup, or contingency systems. Apparently, even their disaster recovery plan was on paper.
🧠 EduInvesting Take
“Most companies cook the books. Sati literally cooked them.”
This is a worst-case scenario for investors. Not because a fire broke out (which is unfortunate and beyond control), but because:
- There was no alternate record-keeping
- No contingency backup
- And the auditor had to say: “We can’t audit what doesn’t exist.”
Add to that the absence of CFO commentary or transparency on the insurance process, and you have a company that deserves less of your capital and more of your fire extinguisher.
🚩 Risks & Red Flags
| Risk / Issue | Comment |
|---|---|
| Auditor Disclaimer of Opinion | No assurance on any number |
| No quantification of fire damage | Big red flag |
| No visibility on insurance payout | Could swing results massively |
| Poor disaster recovery | No backups disclosed |
| Data loss | “Substantial” records lost |
🧯 Could This Have Been Prevented?
Yes. And here’s how:
- 🔐 Cloud-based record keeping (Tally Cloud, Zoho, etc.)
- 📦 Insurance-linked asset tracking
- 🧾 Off-site backup for documentation
- 🚒 Fire-proof storage for sensitive records
For a listed company, not having digital backups in 2025 is like riding a bike on the expressway — no helmet, no brakes, and no clue.
📈 Should Investors Wait for Insurance?
Maybe. But even then, here’s the kicker:
- Until the insurance amount is known and received, net worth remains ambiguous
- FY26 results will carry baggage from FY25 (write-offs, provision disputes, etc.)
- Equity dilution is possible if recovery falls short
Also, SEBI regulations now require greater transparency in such events — so if Sati isn’t issuing updates frequently, that’s another red flag.
🎯 What Should Investors Do?
We don’t offer buy/sell advice. But as your friendly neighbourhood EduInvesting guy, here’s what we suggest:
- Stay informed
- Avoid FOMO on social media
- Ask one question before touching this stock: “Can I even trust the numbers?”
Because if your only source of truth is “Trust me bro, insurance aayega” — you’re already investing in hope, not facts.
🏁 Final Thoughts
Sati Poly Plast’s FY25 journey can be summarised as:
“From poly-packaging to poly-burning to poly-problems.”
The company needs to rebuild not just its infrastructure, but investor trust. Until then, the only thing “transparent” about this stock is the smoke left behind.
📅 Article Metadata
- 🖋️ Written by: Prashant Marathe
- 📆 Date: 31 May 2025
- 🏷️ Tags: Sati Poly Plast, SME audit disclaimer, fire incident, FY25 results, investor risk, poly packaging stocks
