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Hariyana Ship Breakers Ltd.

BSE: 526931 Sector: Others
NSE: N.A. ISIN Code: INE400G01011
BSE 00:00 | 19 Jul 69.25 -4.75
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NSE 05:30 | 01 Jan Hariyana Ship Breakers Ltd
OPEN 72.50
PREVIOUS CLOSE 74.00
VOLUME 6373
52-Week high 123.35
52-Week low 64.00
P/E 4.36
Mkt Cap.(Rs cr) 43
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Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 72.50
CLOSE 74.00
VOLUME 6373
52-Week high 123.35
52-Week low 64.00
P/E 4.36
Mkt Cap.(Rs cr) 43
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Hariyana Ship Breakers Ltd. (HARIYANASHIP) - Director Report

Company director report

[Disclosure under Section 134(3) of the Companies Act 2013) read with Companies(Accounts) Rules 2014]

Dear Members

Your Company's Directors hereby present the 36th Annual Report of yourCompany and the Audited Financial Statements for the financial year ended March 31 2017("year under review/ FY 2016-17").

FINANCIAL RESULTS:

(Amount in Lacs)
Particulars For the year ended
March 31 2017 March 31 2016
Revenue from operations/Net Sales 27544.80 36569.74
Other Income 3333.27 2451.93
Total Revenue 30878.07 39021.67
Cost of materials consumed 9311.82 901.70
Purchase of stock-in- trade 19355.35 34264.56
Changes in inventories of finished goods (662.50) (252.84)
Employee benefits expenses 126.06 32.41
Finance costs 786.69 718.58
Depreciation and amortization expenses 195.66 209.18
Other expenses 519.03 2362.65
Total Expenses 29632.11 38236.23
Profit / (Loss) before tax and Extra-Ordinary 1245.96 785.44
Items
Extra-Ordinary Items 361.80 -
Profit / (Loss) before tax 884.16 785.44
Less: Current Tax 107.71 -
Less: Deferred Tax (169.26) 42.68
Profit / (Loss) after tax 945.72 742.76
Earnings Per Share -Basic & Diluted 15.34 12.04

HIGHLIGHTS OF THE COMPANY'S PERFORMANCE:

During the year under consideration total revenue amounted to Rs. 30878.07 Lacs asagainst Rs. 39021.67 Lacs in the preceding financial year and Profit after tax stood atRs. 945.72 Lacs as against Rs. 742.76 Lacs in the preceding financial year.

The Company has been able to increase its profit margin during the year under review by27.33%. However the Company has failed to increase its revenue from operations during theyear due to various factors like fluctuations in the exchange rate of US Dollar vis--visIndian Rupee and steep decrease in prices of iron and steel products and volatile marketconditions. Moreover the decrease in revenue is mainly due to per unit (MTs) pricesremaining low during the year as compared to the preceding year. However despite of suchadverse factors the Company had sustained sales performance and achieved positive profitsduring the year. The Management is of the view that in the coming years the ship breakingindustry as well as iron and steel sector will be stable and with expected boost in theeconomy the requirement of iron and steel will increase which will help the Company tomove towards its sustained path of growth.

DIVIDEND:

To consolidate the future position of the Company and support the fund requirementsyour Board of Directors regret their inability to recommend any dividend for the year.

RESERVES:

The whole profit after tax has been transferred to Profit & Loss surplus. There isno amount that has been proposed to be carried to any other reserves.

LOANS GUARANTEE & INVESTMENTS:

The particulars of loans guarantees and investments have been disclosed in thefinancial statements.

DEPOSITS:

The Company has not accepted any deposit from the public falling within the ambit ofSection 73 of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules2014 or under Chapter V of the Act.

RELATED PARTY TRANSACTIONS:

All contract(s)/ arrangement(s)/ transaction(s) entered into by the Company with itsrelated parties during the year under review were

• in "ordinary course of business" of the Company

• on "an arm's length basis" and

• not "material"

as per the provisions of Section 188(1) of the Act read with Companies (Meetings ofBoard and its Powers) Rules 2014 and Regulation 23 of the Listing Regulations.

Accordingly Form AOC-2 prescribed under the provisions of Section 134(3)(h) of the Actand Rule 8 of the Companies (Accounts) Rules 2014 for disclosure of details of RelatedParty Transactions which are "not at arm's length basis" and also which are"material and at arm's length basis" is not provided as an annexure to theBoard's Report.

However all Related Party Transactions entered into during the year under review andas on March 31 2017 were reviewed and approved by the Audit Committee of the Board andthe Board from time to time and the same are disclosed in Note 2.32 of the FinancialStatements of the Company for the year under review as per the applicable provisions ofthe Act and the Listing Regulations.

Further pursuant to the provisions of the Act and the SEBI Listing Regulations Boardhas on recommendation of its Audit Committee adopted a Policy on Related PartyTransactions and the said policy is available on the website of the Company i.e. www.hariyanagroup.com.

INTERNAL FINANCIAL CONTROLS AND ITS ADEQUACY:

Internal financial control systems of the Company are commensurate with its size andnature of its operations. These have been designed to provide reasonable assurance withregard to the orderly and efficient conduct of its business including adherence to theCompany's policies safeguarding of its assets prevention and detection of frauds anderrors accuracy and completeness of the accounting records and the timely preparation ofreliable financial information and disclosures.

The Audit Committee deliberated with the Members of the Management considered thesystems as laid down and met the internal auditors and statutory auditors to ascertaininter-alia their views on the internal financial control systems. The Audit Committeesatisfied itself as to the adequacy and effectiveness of the internal financial controlsystems as laid down and kept the Board of Directors informed.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP):

Pursuant to Section 152 of the Act and the Company's Articles of Association Mrs.Unnati Rakesh Reniwal Director retires by rotation and being eligible has offeredherself for reappointment at the forthcoming Annual General Meeting.

During the year under review none of the Directors of the Company resigned from theirrespective Directorships in the Company. Further there was no appointment of any Directoron Board of the Company.

Pursuant to the provisions of the Listing Regulations and Section 149 of the Act allIndependent Directors have submitted a declaration that each of them meets the criteria ofindependence as provided in Section 149(6) of the Act and there has been no change in thecircumstances which may affect their status as an independent director during the year.During the year the non-executive directors of the Company had no pecuniary relationshipor transactions with the Company other than sitting fees commission and reimbursement ofexpenses incurred by them for the purpose of attending meetings of the Company.

Further the list of the present Directors and KMP forms part of this Annual Reportunder the section Corporate Information.

PERFORMANCE EVALUATION OF THE BOARD:

Pursuant to the provisions of the Act and Listing Regulations the Board has carriedout an annual evaluation of its own performance performance of the Directors individuallyas well as the evaluation of the working of its Committees.

The Nomination and Remuneration Committee (NARC) has defined the evaluation criteriaprocedure and time schedule for the Performance Evaluation process for the Board itsCommittees and individual Directors including the Chairman of the Company. To enable suchevaluation an evaluation framework as recommended by the NARC has been adopted by theCompany which is devised with a view to provide a more structured approach for theevaluation and which lays down overall guidelines and processes to be adopted for theevaluation of performance.

The performance of the Board was evaluated by the Board after seeking inputs from allthe Directors on the basis of criteria such as the Board composition and structureeffectiveness of Board processes information and functioning etc. as provided by theGuidance Note on Board Evaluation issued by the Securities and Exchange Board of India onJanuary 5 2017.

For evaluating the Board as a whole views were sought from the Directors on variousaspects of the Board's functioning such as degree of fulfillment of key responsibilitiesBoard Structure and composition establishment delineation of responsibilities to variouscommittees effectiveness of Board processes information and functioning Board cultureand dynamics quality of relationship between the Board and the management.

Similarly views from the Directors were also sought on performance of individualDirectors covering various aspects such as attendance and contribution at theBoard/Committee Meetings and guidance/support to the management outside Board/CommitteeMeetings. In addition the Chairman was also evaluated on key aspects of his roleincluding setting the strategic agenda of the Board encouraging active engagement by allBoard members and promoting effective relationships and open communication communicatingeffectively with all stakeholders and motivating and providing guidance to the ExecutiveDirector and CEO/CFO.

Areas on which the Committees of the Board were assessed included degree of fulfillmentof key responsibilities adequacy of Committee composition effectiveness of meetingsCommittee dynamics and quality of relationship of the Committee with the Board and theManagement.

The performance evaluation of the Independent Directors was carried out by the entireBoard excluding the independent director being evaluated. The performance evaluation ofthe Chairman and the Non Independent Directors was carried out by the IndependentDirectors who also reviewed the performance of the Board as a whole.

The Chairman of the Board provided feedback to the Directors as appropriate.Significant highlights learning with respect to the evaluation were discussed at theBoard meeting.

BOARD MEETINGS:

During the year 14 (Fourteen) Board meetings were held. The details of the compositionof the Board and its Committees and of the meetings held and attendance of the Directorsat such meetings are provided in the Corporate Governance Report.

EXTRACT OF ANNUAL RETURN:

In accordance with Section 134(3)(a) and as provided under sub-section(3) of Section 92of the Companies Act 2013; an extract of the annual return in prescribed form MGT –9 is appended as Annexure- 1 to the Board's Report.

CORPORATE GOVERNANCE:

A separate section on Corporate Governance forming part of the Board's Report and aCertificate from the Company's Auditors is included in the Annual Report as Annexure– 2 to the Board's Report.

AUDITORS:

STATUTORY AUDITORS:

The term of the existing Statutory Auditors viz. M/s. P. D. Goplani & Associatesshall expire at conclusion of the ensuing Annual General Meeting of the Company andaccordingly based on the recommendation of the Audit Committee members are requested tore-appoint the auditors for a term of five consecutive years i.e. from the conclusion ofthis Annual General Meeting of the Company till the conclusion of the Annual GeneralMeeting to be held in the year 2022 and to fix their remuneration.

M/s. P. D. Goplani & Associates Chartered Accountants Bhavnagar having ICAI FirmRegistration No. 118023W being eligible offer themselves for re-appointment. Ifre-appointed it will be within the prescribed limits specified in Section 139 of theCompanies Act 2013.

The Statutory Auditors in their report dated May 30 2017 have commented that provisionfor gratuity and long term employee benefits as per AS-15 has not been made. In thisregard the Company would like to clarify that since none of the employees of the Companywere in continuous service of more than five years thus making provision for Gratuitydoes not arise. However if payment on account of gratuity arises due to happening of anyincidents as provided under the applicable provisions of the law the same will beaccounted as and when incurred and the payment under the Pension Act 1871 is notapplicable to the Company

SECRETARIAL AUDITORS:

Pursuant to provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014; the Board of the Company at its meetingheld on May 30 2017 has re-appointed M/s. Dilip Bharadiya & Associates PracticingCompany Secretaries to undertake the Secretarial Audit of the Company for the financialyear 2017-18.

Further the Secretarial Audit report for the year 2016-17 forms part of the Board'sReport as the Annexure- 3.

BRANCH AUDITORS:

The term of the existing Branch Auditors viz. M/s. Lahoti Navneet & Co. CharteredAccountants Mumbai (ICAI Firm Registration No. 116870W) shall expire at conclusion of theensuing Annual General Meeting of the Company and accordingly based on the recommendationof the Audit Committee members are requested to appoint M/s. LLB & Co. CharteredAccountants Mumbai (ICAI Firm Registration No. 117758W) in place of the retiringauditors to audit the accounts of the Mumbai division of the Company for a term of fiveconsecutive years i.e. from the conclusion of this Annual General Meeting of the Companytill the conclusion of the Annual General Meeting to be held in the year 2022 and to fixtheir remuneration.

The Auditors' Report and the Secretarial Audit Report for the financial year endedMarch 31 2017 do not contain any qualification reservation adverse remark or disclaimerother than mentioned above.

MATERIAL CHANGES AND COMMITMENTS:

No material changes have took place affecting the financial position of the Companyfrom the date of closure of financial year till the date of signing of this report.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:

No significant and material orders were passed by the regulators or courts or tribunalsimpacting the going concern status and Company's operations in future.

HUMAN RESOURCES:

Your Company treats its "human resources" as one of its most importantassets.

Your Company continuously invest in attraction retention and development of talent onan ongoing basis. Your Company thrust is on the promotion of talent internally through jobrotation and job enlargement. Your Company believes in harnessing its leadership andpeople capabilities through sharp focus and initiatives on talent development. We reviewour talent based on their performance and potential to assess their readiness for futureroles of higher scale and complexity. We believe in developing our employees throughmultiple experiences requiring them to handle scale and complexity.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability confirm that:

(i) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures if any;

(ii) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;

(iii) the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the Directors have prepared the annual accounts on a going concern basis;

(v) the Directors further state that they have laid down internal financial controls tobe followed by the Company and that such internal financial controls are adequate and wereoperating effectively;

(vi) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information as required under Section 134(3)(m) of the Companies Act 2013 readwith Rule 8(3) of the Companies (Accounts) Rules 2014 with respect to conservation ofenergy technology absorption and foreign exchange earnings and outgo is as follows:

A. Conservation of energy:

(i) the steps taken or impact on conservation of energy;

The Company recognized the importance of energy conservation in decreasing thedeleterious effects of global warming and climate change. The Company has implementedvarious initiatives for the conservation of energy and all efforts are made to minimizeenergy costs. Company is engaged in Ship Breaking trading in metal scrap coals graphiteelectrodes & other industrial inouts. No significant power consumption is required inship breaking industry as major portion in production process consist of non mechanicalprocesses. However industrial gases are used in ship dismantling activities and theCompany has taken various measures to control the consumption of fuel and energy.

(ii) the steps taken by the Company for utilising alternate sources of energy;

Company is engaged in Ship Breaking and trading in metal scrap coals graphiteelectrodes & other industrial inouts. No significant power consumption is required inship breaking industry as major portion in production process consist of non-mechanicalprocesses. However industrial gases are used in ship dismantling activities. The Companyhas taken various measures to control the consumption of fuel and energy.

(iii) the capital investment on energy conservation equipments;

The Company is taking adequate steps to conserve energy though no such capitalinvestment has been made.

B. Technology absorption:

The Company continues to adopt and use the latest technologies to improve theproductivity and quality of its services and products. The Company's operations do notrequire significant absorption of technology. There has been no import of technology in FY2016-17.

C. Foreign exchange earnings and Outgo:

Particulars Current Year Previous Year
In Rs. In USD In Rs. In USD
Foreign Exchange Earnings NIL NIL NIL NIL
Foreign Exchange Outgo 2878423289 42496247.35 3037389089 45805682.78

CORPORATE SOCIAL RESPONSIBILITY (CSR):

In terms of section 135 and Schedule VII of the Act the Board of Directors hasconstituted a CSR Committee under the Chairmanship of Mr. Rakesh Reniwal. Mr. PradeepBhatia and Mr. Tejas Thakkar are the other members of the Committee.

The CSR Committee of the Board has framed a CSR Policy and uploaded it on the websiteof the Company i.e. www.hariyanagroup.com. During the year based on theserules the amount to be spent for CSR activities was Rs. 25.17 Lacs for financial year2016-17 whereas the Company has not spent any amount towards Corporate SocialResponsibility because the Management is in the process of finding better avenues of CSRExpenditure to be incurred in near future.

AUDIT COMMITTEE:

The details pertaining to Audit Committee and its composition are included in theCorporate Governance Report which forms part of this report.

NOMINATION AND REMUNERATION COMMITTEE:

The Company has constituted a Nomination and Remuneration Committee pursuant to Section178(1) of the Companies Act 2013 and has defined the policy on Director's appointment andpayment of remuneration including criteria for determining qualifications positiveattributes and independence of a Director. The Committee shall function in accordance withthe terms and reference of the policy. Policy of the Company is enclosed herewith as Annexure-4.

STAKEHOLDER'S RELATIONSHIP COMMITTEE:

The details pertaining to composition of the Committee is included in the CorporateGovernance Report which forms part of this report. The role of the Committee is explainedin detail in the Corporate Governance Report enclosed herewith.

VIGIL MECHANISM:

The Company has adopted a Whistle Blower Policy establishing vigil mechanism to providea formal mechanism to the Directors and employees to report their concerns about unethicalbehaviour actual or suspected fraud or violation of the Company's Code of Conduct orethics policy. The Policy provides for adequate safeguards against victimization ofemployees who avail of the mechanism and also provides for direct access to the Chairmanof the Audit Committee. It is affirmed that no personnel of the Company has been deniedaccess to the Audit Committee. The policy of vigil mechanism is available on the Company'swebsite i.e. www.hariyanagroup.com.

PERFORMANCE OF EMPLOYEES:

A) The information required under Section 197 of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow:

a. Details of the ratio of the remuneration of each director to the median employee'sremuneration and other details as required pursuant to Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014

The Company has not paid any remuneration to the Directors of the Company and hence theinformation cannot be furnished.

b. The percentage increase in remuneration of each Director Chief Executive OfficerChief Financial Officer Company Secretary if any in the financial year:

Save and except the payment of remuneration to Company Secretary with no percentageincrease in remuneration in the financial year no remuneration is being paid to anyDirector or KMP of the Company. Hence the information pertaining to percentage increasein remuneration cannot be provided.

c. The percentage increase in the median remuneration of employees in the financialyear:

There is no increase in the remuneration of employees in the financial year and hencethe information cannot be furnished.

d. The number of permanent employees on the rolls of Company: 23

e. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:

There is no increase in salaries of employees other than the managerial personnel andthe managerial remuneration in the last financial year. Thus comparison cannot be made.

f. Affirmation that the remuneration is as per the remuneration policy of the Company:

Remuneration paid to Key Managerial Personnel is as per the remuneration policy of theCompany.

B) Details of the top ten employees in terms of remuneration drawn and the name ofevery employee of the Company as required pursuant to Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014

The Company has no such employees drawing remuneration exceeding the limits prescribedunder Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014.

DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES:

The Company has no subsidiary associate companies or joint venture companies withinthe meaning of Section 2(6) and 2(87) of the Act and thus pursuant to the provisions ofSection 129(3) of the Act the statement containing the salient features of financialstatements of the Company's subsidiaries in Form AOC-1 is not required to be attached tothe financial statements of the Company.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Pursuant to Regulation 34 of the Listing Regulations the Management Discussion andAnalysis Report for the financial year under review is set out in a separate sectionforming part of this Report.

RISK MANAGEMENT POLICY:

The Company has adopted a policy on risk management in accordance with the applicableprovisions of the Act and the Listing Regulations. The objectives of the policy are tooptimize business performance minimize adverse impact on the business protect it fromdamages frauds and enhance stakeholder value. Risk management aims to identify and thenmanage threats that could severely impact the organization. Generally this involvesreviewing operations of the organization identifying potential threats to theorganization and the likelihood of their occurrence and then taking appropriate actions toaddress the most likely threats. The Board of the Company is responsible for riskmanagement of the Company and for ensuring that robust internal controls are instituted torespond to changes in the business environment. The Audit Committee has additionaloversight in the area of financial risks and controls.

The said policy is also placed on the website of the Company viz.www.hariyanagroup.com.

FAMILIARIZATION PROGRAMME:

Pursuant to Regulation 25 of the SEBI (Listing Obligation and Disclosure Requirement)Regulations 2015 the Company has formulated a programme for familiarizing the IndependentDirectors with the Company their roles rights responsibilities in the Company natureof the industry in which the Company operates business model of the Company etc. throughvarious initiatives. Details of the Familiarization Programme of the Independent Directorsare available on the website of the Company i.e. www.hariyanagroup.com.

SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:

The Company has adopted a policy on prevention prohibition and redressal of sexualharassment at the workplace in line with the provisions of the Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013 and the Rules thereunderwhich is available on the website of the Company i.e. www.hariyanagroup.com. ThePolicy aims to provide protection to employees at the work place and prevent and redresscomplaints of sexual harassment and for matters connected or incidental thereto with theobjective of providing a safe working environment where employees feel secure.

The Company has not received any complaint of sexual harassment during the financialyear 2016-17.

DETAILS OF VARIOUS PLANTS/ SEGMENTS:

Ship Breaking Unit (Bhavnagar)

During the financial year 2016-17 ship breaking unit at Alang Ship Breaking Yard hasperformed very well. During the year under review the sales turnover of Ship BreakingUnit has been increased by almost 7 times. However due to various factors likefluctuations in the exchange rate of US Dollar vis--vis Indian Rupee and steep decreasein prices of Iron and steel products and volatile market conditions the unit was unableto increase its profit margin. The Management is of the view that in the coming years theship breaking industry will become stable and with expected boost in the economy therequirement of iron and steel will increase which will help the Company to move towardsits sustained path of growth.

Trading Unit (Bhavnagar)

During the financial year 2016-17 the trading unit (Bhavnagar) has not been able toperform well in terms of sales turnover due to adverse market conditions like decrease inprices of Iron and steel products and fluctuations in the exchange rate of US Dollarvis--vis Indian Rupee. However in such an uncertain market environment in Iron andSteel industry the management took cautious approach to the prevalent affairs and avoidedany venturous business decision in the interest of the Company which resulted in increasedprofit margin of the unit. Moreover the management hopes that the trading unit will showan increase in terms of sales as well as profits in the coming years.

Trading & Investment Unit Mumbai (HO)

During the year under review the Mumbai Trading Unit has outperformed in terms ofsales turnover and profit margins. The sales turnover for the FY: 2016-17 of Trading(Mumbai) was Rs. 163.61 Crores and profit was Rs. 19.46 Crores. The management is hopefulthat in the coming financial years the Trading Unit Mumbai will achieve new heights interms of sales turnover and profits.

Steel & Power Unit (Bangalore)

Steel and Power unit has been shut down during the preceding financial year due toissues of uninterrupted availability of raw materials local mining issues rupeevolatility and other similar factors at Hassan Karnataka.

Overall since the prices of iron and steel having been reasonably stabilized and theinventory levels of the Company and its market position both the segments of the Companyviz. Ship Breaking and Trading are expected to see major increase in terms of GrossRevenues and Net profit Margins in the coming year. The Company is hopeful that withstabilizing the price for the old ship in the international market and also sale prices ofcompanies products in the domestic market; the Company will be able to improve theturnover and also the profitability in the coming year.

The trading in Ferrous and Non Ferrous Metals Scrap Coal etc. activities of theCompany are contributing considerably to the profitability of the Company. Moreover theinvestment division of the Company is also doing well. Your Directors see a very positiveand bright future prospects ahead for the Company looking to the prevailing upward trendin the Iron and Steel sector in India and internationally.

Industrial Gases:

The Company is a partner in M/s. Hariyana Air Products (with 95% share the partnershipdeed of M/s. Hariyana Air Products has been re-constituted w.e.f. 08.07.2016. With thereconstitution share in profit/ (loss) of the Company has been increased to 95% from 60%)for the manufacture and supply of Industrial Oxygen Gas. During the year the oxygen plantat Bhavnagar Gujarat has performed well in terms of revenue as revenue from operationsfor the year were Rs. 102.40 Lacs against Rs. 45.54 Lacs for the preceding financial year.However due to volatile market conditions and competitive market with liquid oxygensuppliers the firm was unable to much increase its profit margin. However with proximityto Alang Ship Breaking Yard and huge captive consumption requirements of group companiesthe Company expects good long term benefits from the said partnership venture.

Real Estate & Construction:

The Company is also taking interest into real estate business at Bangalore (Karnataka).

The Company has been into Partnership and formed a Partnership Firm "M/s GoyalHariyana Construction" formally known as "M/s Orchid Woods Projects" (with50% share) for construction & selling of residential apartments. Presently the firmhas three projects at Bangalore- First known as Hennur in which the firm has acquired landat Kothanur Village Krishnarajapura Hobli Bangalore - East Taluk and the said project isalmost sold out as on March 2017; Second known as Footprints situated at ChokkanahalliVillage Yelahanka Hobli Bangalore - North Taluk and the said project has alreadycompleted in December 2016 and Third known as Whitefield situated at Survey No.161162/5162/6 162/7 162/ 8 162/9 Hagadar Village KR Puram Hobli Bangalore with anobject of constructing 1 2 & 3 BHK Apartments till March 31 2017. Construction workhas already been completed of the project at Kothanur Village Krishnarajapura HobliBangalore East Taluk and at Chokkanahalli Village Yelahanka Hobli Banglore NorthTaluk. The firm has started construction in April 2016. Further the Company has startedconstruction at S. Nos.161 162/5162/6 162/7 162/8 162/9 Hagadar Village KR PuramHobli Bangalore in April 2016 and expected to complete this project by June 2020. TheCompany's share of profit from the firm is Rs. 466.76 Lacs for the year ended on March 312017.

The Company has also been into partnership (with 33.33% share) M/s. "SwastikDevelopers" for construction of building. The firm has acquired 66 Acres of land inGoa. The project is expected to commence soon.

The Company has also been into partnership with "M/s White Mountain" (with25% share). Presently the firm has acquired plot at Thindlu Indrasanahalli &Singrahalli Village Kundana Hobli Devanahalli Taluk. The firm has acquired 44 acres and20 Guntas of land with the object of developing 386 plots of various sizes. Firm hascompleted plot development work in December 2016. We have already booked 294 plots till31.03.2017. The Company's share of profit from the firm is Rs. 163.10 Lacs for the yearended on March 31 2017.

The Company has also been into partnership with "M/s Orchid LakeviewDevelopers" (with 33.33% share). The firm is having the project at Bellandur VillageVarthur Hobli Bangalore East Taluk with an object of construction of 2 & 3 BHKapartments consisting of 336 flats. The Company's share of profit from the firm is Rs.454.52 Lacs for the year ended on March 31 2017.

The Company has also entered into partnership and formed a partnership firm "M/sGoyal Hariyana Realty" (with 50% share). The firm is having two projects atBangalore Karnataka viz. Alanoville and Orchid Greens with the object of construction ofVillas and residential apartments. Project Alanoville for development of ResidentialVilla on the land of "M/S Value and assets holdings Private limited Bangalore"by a Joint Venture agreement further the firm has started the construction in October2015 and expected to complete the project by December 2018. Project Orchid Greens fordevelopment of Residential Apartment on the land of "M/S Value and assets holdingsPrivate limited Bangalore" by a Joint Venture agreement the firm has startedconstruction in February 2016 and expected to complete the projects by March 2018. TheCompany's share of profit from the firm is Rs. 10.08 Lacs for the year ended on March 312017.

The Company has also entered into partnership and formed a partnership firm "M/sShree Balaji Associates" (with 5% share). The firm is engaged in the business oftrading in iron & steel coal and real estate. The Company's share of profit from thefirm is Rs. 1.49 Lacs for the year ended on March 31 2017.

ACKNOWLEDGEMENT:

The Directors thank the Company's employees customers vendors investors BankersFinancial Institutions various State/ Central Government authorities concernedgovernment departments agencies stakeholders and academic partners for their continuoussupport.

We place on record our appreciation of the contribution made by our employees at alllevels. Our consistent growth was made possible by their hard work solidarityco-operation and support.

The Directors appreciate and value the contribution made by every member of the HSBLfamily.

For and on behalf of the Board of Directors
Hariyana Ship- Breakers Limited
Sd/- Sd/-
Rakesh Reniwal Shantisarup Reniwal
Managing Director Chairman & Executive Director
(DIN 00029332) (DIN 00040355)

Date: May 30 2017

Place: Mumbai