In a distribution system with a larger number of renewable energy sources, improved power control measures are required to maintain the voltage and current quality within the grid-code specified limits. The unified power quality conditioner (UPQC) is a promising option in this scenario that can control the AC load voltages and source currents. This paper proposes a UPQC based meshed hybrid microgrid configuration where the DC bus of the UPQC is extended to form an LVDC line. Different loads and sources are integrated into the DC line. Various power flow conditions are analyzed, which show the power management features of the proposed system. In addition, the grid voltage sag condition is also analyzed, and improved performance is observed.