Hariyana Ship Breakers Limited, a company primarily engaged in ship-breaking activities, has released its financial results for the quarter ended September 30, 2025, revealing significant challenges in its operations and investments.

Financial Performance

The company reported a stark contrast in its financial performance compared to the previous year:

All figures in lacs

The complete absence of revenue from operations in Q2 FY26 marks a significant downturn from the Rs 2.45 lacs reported in the same quarter of the previous year. Despite the lack of operational revenue, the company managed to post a profit before tax of Rs 37.74 lacs, though the context for this profit remains unclear without comparative data from the previous year.

Investment Risks

Hariyana Ship-Breakers faces substantial investment risks, with Rs 1,319 lacs, representing 7.81% of its total assets, currently tied up in a real estate project. The company reports that it has neither received possession of the property nor recovered the invested amount. In response to this situation, the company has filed a complaint with the economic offence wing, indicating potential legal action to address the investment concerns.

Corporate Governance

The company's Board of Directors convened on November 13, 2025, to review and approve the unaudited standalone and consolidated financial results for the quarter and half-year ended September 30, 2025. The meeting, which commenced at 3:00 p.m. and concluded at 3:45 p.m., also included a review by the Audit Committee.

Segment Information

Hariyana Ship-Breakers operates primarily in two business segments: Mumbai and Bhavnagar. The company prepares its financial statements in accordance with Indian Accounting Standards (Ind-AS) and follows the "Management Approach" as defined in Ind AS 108 for evaluating performance and allocating resources across geographic segments.

Consolidated Financial Statements

The company's consolidated financial statements include results from its subsidiary, Hariyana Air Products, and associates including Goyal Hariyana Realty, Orchid Lakeview Developers, Whitefield Projects, and Swastik Developers. These statements are prepared in line with Indian Accounting Standard 110.

The financial results and investment challenges reported by Hariyana Ship-Breakers Limited underscore a period of significant operational difficulties and financial risks. The company's ability to address these challenges and potentially recover its substantial real estate investment may be crucial factors in its future performance and financial stability.

Hariyana Ship Breakers Limited, a prominent player in the ship-breaking industry, has announced a significant change in its auditing structure. LLB & Co., Chartered Accountants, has stepped down from its role as Joint Statutory Auditor, effective August 13, 2025, citing the absence of business activity at the company's Head Office.

Resignation Details

LLB & Co., which held the Firm Registration Number 117758W, was initially appointed for a five-year term spanning from April 1, 2024, to March 31, 2029. Their primary responsibility was to audit the accounts of Hariyana Ship-Breakers' Head Office. However, the firm's decision to resign came after observing a lack of operational activity at the Head Office during their review period.

Reasons for Resignation

In their resignation letter, LLB & Co. stated:

"We have observed that the Head Office has not carried out any business activity during the period under review. In view of the absence of operations and considering that the audit responsibilities can be sufficiently discharged by the other appointed auditor(s), we are of the opinion that the continuation of our services as Joint Auditor is not warranted."

Compliance and Reporting

Prior to their resignation, LLB & Co. had submitted the Limited Review Report for the quarter ended June 30, 2025. The company has confirmed that no material concerns were raised by the auditor before or during the resignation process.

Regulatory Compliance

In accordance with Regulation 30 of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, and SEBI Circular No. CIR/CFD/CMD1/114/2019 dated October 18, 2019, Hariyana Ship-Breakers Limited has duly informed the BSE Limited of this change in their auditing structure.

Company Response

Pooja Yadav, Company Secretary & Compliance Officer of Hariyana Ship-Breakers Limited, has acknowledged the auditor's resignation and assured compliance with all applicable statutory provisions. The company has not announced any immediate plans to appoint a replacement for LLB & Co.

This development highlights the importance of operational activity across all segments of a company and its impact on corporate governance structures. Investors and stakeholders of Hariyana Ship-Breakers Limited will likely be keen to understand the implications of this change on the company's financial reporting processes.