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.

Hariyana Ship Breakers Limited, a prominent player in the ship-breaking industry, has reported a significant increase in its quarterly profit for the period ended June 30. The company's financial results, coupled with key management decisions, paint a picture of resilience and strategic growth.

Financial Performance Highlights

Hariyana Ship-Breakers witnessed a remarkable 194% year-on-year increase in its standalone net profit for the quarter ended June 30. The company reported a net profit of Rs 68.32 lakh, compared to Rs 23.24 lakh in the same period last year. This substantial growth in profitability comes despite challenges in the operational environment.

The company's total income for the quarter stood at Rs 217.10 lakh, slightly lower than the Rs 230.87 lakh reported in the corresponding quarter of the previous year. Notably, Hariyana Ship-Breakers did not generate any revenue from operations during this period, with income primarily derived from other sources.

Key Financial Metrics

Operational Challenges and Strategic Focus

It's worth noting that Hariyana Ship-Breakers has not carried out any business operations for the last three quarters. This operational pause is reflected in the absence of revenue from operations in the current quarter. Despite these challenges, the company has maintained its profitability, primarily through effective management of other income sources and cost control measures.

Management Changes and Future Outlook

In a significant move, the Board of Directors has re-appointed Mr. Rakesh Reniwal as the Managing Director of the company for a five-year term, effective from April 1, 2025, to March 31, 2030. Mr. Reniwal, aged 51, brings over two decades of experience in the ship-breaking industry and has been instrumental in the company's growth.

Auditor's Observations

The company's auditors have highlighted a few key points in their review:

1. The company has an advance of Rs 131.90 crore for establishing a joint venture, constituting 8.17% of total assets. This investment has been carried forward for an extended period without commencing joint venture activities.
2. An overdraft facility of Rs 11.87 crore from Punjab National Bank has been utilized, with the auditors unable to comment on its specific purpose due to the absence of clear utilization details.
3. The company has significant investments in partnership firms focused on real estate development, totaling Rs 139.54 crore as of June 30, which represents 83.26% of the company's total assets.

Conclusion

While Hariyana Ship-Breakers faces operational challenges, its financial performance in the quarter ended June 30 demonstrates resilience and effective financial management. The reappointment of Mr. Rakesh Reniwal as Managing Director signals continuity in leadership. However, investors and stakeholders should closely monitor the company's strategies to resume operational activities and diversify its revenue streams in the coming quarters.