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Notes to Accounts of Hariyana Ship-Breakers Ltd.

Mar 31, 2018

Note 1: Corporate information

Hariyana Ship Breakers Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The company has its primary listing on BSE Limited.

During the year, the Company was engaged in Ship Recycling (ship breaking), Manufacturing of Sponge Iron & Steels, Trading in Ferrous & Non-Ferrous Metals and Coal and Investment. As and when any surplus fund are available, the same is given on interest to other parties and also invested in the shares and securities to earn short term and long term capital gains.

The standalone financial statements were authorised for issue in accordance with a resolution of the directors on May 30, 2018.

Note 2 : Basis of preparation

The standalone financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015.

For all periods up to and including the year ended March 31, 2016, the Company prepared its financial statements in accordance with the accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP). These financial statements are the Company''s first standalone financial statements prepared in accordance with Ind AS based on the permissible options and exemptions available to the Company in terms of Ind AS 101 ''First time adoption of Indian Accounting standards''. Reconciliations and descriptions of the effect of the transition have been summarized in Note 5.

The standalone financial statements have been prepared on a historical cost basis, on the accrual basis of accounting except for certain financial assets and liabilities measured at fair value (refer accounting policy regarding financial instruments).

The standalone financial statements are presented in Indian Rupees and all values are rounded to the nearest lacs (Rupees 00,000), except where otherwise indicated. Any discrepancies in any table between totals and sums of the amounts listed are due to rounding off.

(A) Key accounting estimates

1. Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value are measured using valuation techniques. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions relating to these factors could affect the reported fair value of financial instruments. See Note 35 for further disclosures.

2. Defined benefit plan

The cost of the defined benefit plans and other post-employment benefits and the present value of the obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter that is subject to change the most is the discount rate. In determining the appropriate discount rate, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation and extrapolated as needed along the yield curve to correspond with the expected term of the defined benefit obligation.

The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at intervals in response to demographic changes. Future salary increases are after considering the expected future inflation rates for the country.

Refer to Note 36 for further details.

3. Property, Plant and Equipment

Refer to Note 6 for the estimation of useful life of Property, Plant and Equipment. The carrying values of Property, plant and equipment have been disclosed in Note 6.

4. Allowance for doubtful trade receivables

Trade receivables do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts.

Estimated irrecoverable amounts are derived based on a provision matrix which takes into account various factors such as customer specific risks, geographical region, product type, currency fluctuation risk, repatriation policy of the country, country specific economic risks, customer rating, and type of customer, etc.

Individual trade receivables are written off when the management deems them not to be collectable.

Note 3 : Recent accounting pronouncements

Standards issued but not yet effective

The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Company''s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective. The Ministry of Corporate Affairs("MCA") has issued certain amendments to Ind AS through (Indian Accounting Standards) Amendment Rules, 2018. These amendments maintain convergence with IFRS by incorporating amendments issued by International Accounting Standards Board (IASB) into Ind AS and has amended the following standards:

1. Ind AS 115-Revenue from Contract with Customers

2. Ind AS 21-The effect of changes in foreign exchanges rates

3. Ind AS 40-Investment Property

4. Ind AS 12-Income Taxes

5. Ind AS 28-Investment in Associates and Joint Ventures

6. Ind AS 112-Disclosure of Interest in Other Entities

The amendment will come into force from April 1, 2018. The Company has evaluated the effect of this on the financial statements and the impact is not material.

Ind AS 115, Revenue from Contract with Customers: On March 28, 2018, the MCA notified the Ind AS 115. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further, the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity''s contracts with customers.

Note 4 : Transition to IND AS

These financial statements are the Company''s first standalone financial statements prepared in accordance with Ind AS based on the permissible options and exemptions available to the Company in terms of Ind AS 101 ''First time adoption of Indian Accounting standards''. For periods up to and including the year ended on March 31, 2017, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (previous GAAP).

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on March 31, 2018, together with the comparative period data as at and for the year ended March 31, 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Company''s opening balance sheet was prepared as at April 1, 2016, the Company''s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its previous GAAP financial statements, including the balance sheet as at April 1, 2016 and the financial statements as at and for the year ended March 31, 2017.

4.1 Optional exemptions availed

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:

1 Deemed Cost

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment, Investment Properties and Intangible Assets as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Asset.

Accordingly, the company has elected to measure all of its property, plant and equipment, Investment Properties and intangible assets at their previous GAAP carrying value.

2 Investment in subsidiaries and associate

The Company has elected the option provided under Ind AS 101 to measure all its investments in subsidiaries and associate at previous GAAP carrying value on the date of transition in its separate financial statement and used that carrying value as the deemed cost of such investments.

3 Fair value measurement of financial assets or financial liabilities

Company has elected to apply requirement in paragraph B5.1.2Aof Ind AS 109 prospectively to transactions entered into on or after the date of transition to Ind ASs.

5.1 Applicable mandatory exceptions

1 Estimates

The estimates at April 1, 2016 are consistent with those made for the same dates in accordance with previous GAAP (after adjustments to reflect any differences in accounting policies, if any) apart from the following items where application of previous GAAP did not require estimation:

# FVTPL investments

- FVTOCI - debt securities

- Impairment of financial assets based on expected credit loss model

2 Classification and measurement of financial assets

As required under Ind AS 101, the classification of financial assets to be measured at amortised cost or fair value through other comprehensive income is made on the basis of the facts and circumstances that existed on the date of transition to Ind AS.

5.2 Reconciliation between previous GAAP and Ind AS

i Fair valuation of investments (other than investment in subsidiaries and associate)

Under previous GAAP, the current investments were measured at lower of the cost or market value . Ind AS requires all investments to be measured at fair value at the reporting date and all changes in the fair value subsequent to the transition date to be recognised either in the statement of profit and loss or other comprehensive income (based on the category in which they are classified).

ii Provision for ECL on Trade receivables

On the date of transition to Ind AS, the provision for expected credit loss on trade receivables has resulted in a decrease in the carrying amount of these receivables by Rs. 4.38 lakhs which has been recognised directly in retained earnings (Equity).

As at 31st March, 2017, the provision for expected credit loss on trade receivables has resulted in a decrease in the carrying amount of these receivables by Rs. 3.17 lakhs. On such provision, net gain amounting to 1.20 lakhs has been recognised in other expenses in the Statement of Profit and Loss.

iii Provision for Gratuity

Company have created provision for gratuity liability based on Actuarial valuation report as per Ind AS -19. Actuarial gain / loss disclosed in the Actuarial valuation statement is transferred to other comprehensive income.

iv Cost Model of PPE

Under Previous GAAP, Property, Plant & Equipment were revalued and depreciation on the revaluation amount was charged to Revaluation Reserve. Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment, as recognised in the financial statements as at the date of transition to Ind AS. Hence, Depreciation is charged to profit &. loss post transition.

v Deferred Tax

Under Previous GAAP, deferred taxes were recognised for the tax effect of timing differences between accounting profit and taxable profit for the year using the income statement approach. Under Ind AS, deferred taxes are recognised using the balance sheet for future tax consequences of temporary differences between the carrying value of assets and liabilities and their respective tax bases. The above difference, together with the consequential tax impact of the other Ind AS transitional adjustments lead to temporary differences. Deferred tax adjustments are recognised in correlation to the underlying transaction either in retained earnings or through other comprehensive income.

vi Excise Duty

Under the IGAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. The excise duty paid is presented on the face of the Statement of Profit and Loss as part of expenses. This change has resulted in an increase in total revenue and total expenses for the year ended March 31, 2017 by Rs. 1046.52 lakhs. There is no impact on the total equity and profit.

3. Cashflow reconciliation for the year ended March 31, 2017

There were no material differences between the Statement of Cash Flows presented under Ind AS and the Previous GAAP.

Notes:

Inventories of Raw Materials - Ships are stated at Cost values. Cost comprises all cost of purchase, cost of conversion and other cost incurred in bringing the inventories to their present location and condition. Cost formulas used are First -in -First -out. Inventories of Finished Goods/ Traded Goods are stated at lower of cost or net realizable value.

In ship recycling units, the weight of the ship purchased is accounted in terms of LDT/MT of the ship at the time of its construction. Ascertaining of weight of ship at the time of purchase is not possible due to its nature and size. There is loss of weight on account of corrosion and other factors during the usage of the ship and its voyage for long period of the years. Inventory at the close of the year is ascertained by reducing the weight of the scrap sold together with the estimated wastage of the material.

Consumable stores and spares are written off at the time of purchase itself.

c) Terms/rights attached to equity shares :

- The company has only one class of equity shares having a par value of Rs.10/-. Each holder of equity share is entitled to one vote per share. The company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to approval of shareholders in the ensuing Annual General Meeting.

- During the period ended 31st March 2018, the amount of per share dividend recognized as distributions to equity shareholder was NIL per share (PY Nil)

- Preference shareholder do not have any voting right. They are entitled to dividend @ 4% before equity shareholders.

- In the event of liquidation of the company, the holders of the Equity shares will be entitled to receive remaining assets of the company, after distribution of preferential amounts. The distribution will be in proportion to the number of equity shares held by the share holders.

Note 6 : Other equity

Refer to the statement of changes in equity for movement in Other equity.

Nature and purpose of reserves

Capital Redemption Reserve

The Company has recognised Capital Redemption Reserve, on buyback or redemption of its own equity/ preference shares, from its retained earnings. The amount in Capital Redemption Reserve is equal to nominal amount of the shares bought back.

Security premium

The amount received in excess of face value of the equity shares, in relation to issuance of equity, is recognised in Securities Premium Reserve.

Capital Reserve

The Company has recognised Capital Reserve, on amalgamation of Hariyana Fashions Private Limited and Hariyana Machinery Export Private Limited with the Company during the F.Y. 2005-06.

General reserve

General reserve is created from time to time by way of transfer profits from retained earnings for appropriation purposes. General reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income.

Retained earnings

Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to the shareholders.

2. Details of Security:

a. Cash Credit facility from Punjab National Bank is secured by way of hypothecation of Stocks & book debts of the company as primary security and equitable mortgage of immovable property of the company & associated concern as collateral security.

b. Bank overdraft facility from Punjab National Bank is secured by way of equitable mortgage of immovable property of the company & associated concern as collateral security & personal guarantee of the associated concern & relatives of the key management personnel’s.

Notes:

1. Trade payables are recognized at their original invoiced amounts which represent their fair value on initial recognition. The trade payables are considered to be of short duration and are not discounted and the carrying values are assumed to approximate their fair values.

2. The company has no information as to whether any of its suppliers constitute micro, small and medium enterprises as per Micro, Small & Medium Enterprises Development Act, 2006 and therefore, the amount due to such suppliers has not been identified.

Note 7 : Employee benefits

A. Defined Contribution plans:

The Company deposits amount of contribution to government under PF and other schemes operated by government.

Amount of Rs. 178.79 lakhs (P.Y.: Rs. 128.29 lakhs) is recognised as expenses and included in Note 27 "Employee benefit expense”

B. Defined benefit plans:

The Company has following post employment benefits which are in the nature of defined benefit plans:

(a) Gratuity

The Company operates gratuity plan wherein every employee is entitled to the benefit as per scheme of the Company, for each completed year of service. The benefit vests only after five years of continuous service, except in case of death/disability of employee during service. The vested benefit is payable on separation from the Company, on retirement, death or termination.

C. Other Long term employee benefit plans Leave encashment

Salaries, Wages and Bonus include Rs.194.31 Lacs (P.Y.: Rs.71.63 Lacs) towards provision made as per actuarial valuation in respect of accumulated leave encashment/compensated absences.

The Company''s principal financial liabilities comprise of loans and borrowings, trade payables and other financial liabilities. The loans and borrowings are primarily taken to finance and support the Company''s operations. The Company''s principal financial assets include investments, loans, cash and cash equivalents, trade receivables and other financial assets.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Company''s senior management ensures that financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. It is the Company''s policy that no trading in fianancial instruments for speculative purposes may be undertaken.

1. Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk or Net asset value ("NAV") risk in case of investment in mutual funds. Financial instruments affected by market risk include investments, trade receivables, trade payables, loans and borrowings and deposits.

The sensitivity analysis in the following sections relate to the position as at March 31, 2018 and March 31, 2017.

The sensitivity of the relevant profit and loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31, 2018 and March 31, 2017.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s long-term debt obligations with floating interest rates.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities, i.e. when revenue or expense is denominated in a foreign currency.

The following tables demonstrate the sensitivity to a reasonably possible change in EUR and USD exchange rates, with all other variables held constant. The impact on the Company''s profit before tax is due to changes in the fair value of monetary assets and liabilities.

Other market risks

The Company''s investments in various mutual funds, debentures and bonds are susceptible to market price risk arising from the uncertainly about future values / future NAV values of such mutual funds, debentures, bonds and preference shares. The Company manages such risk through diversification of such investments. Reports on the the investment portfolio are submitted to the Company''s senior management on a regular basis that helps the senior management to take investment decisions.

2 Credit Risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions and foreign exchange transactions.

Trade receivables

Customer credit risk is managed by the Company''s internal policies, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on market feedback and credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored.

The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and operate in independent markets.

Trade receivables are non-interest bearing and are generally on 14 days to 90 days credit term. Credit limits are established for all customers based on internal rating criteria. The Company has no concentration of credit risk as the customer base is widely distributed both economically and geographically.

3 Liquidity Risk

The Company monitors its risk of shortage of funds through using a liquidity planning process that encompasses an analysis of projected cash inflow and outflow.

The Company''s objective is to maintain a balance between continuity of funding and flexibility largely through cashflow generation from its operating activities and the use of bank loans. The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. The Company has access to a sufficient variety of sources of funding.

Note 8: Capital Management

For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder''s value.

The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes, within net debt, interest bearing loans and borrowings, trade and other payables, less cash and short-term deposits.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2018, March 31, 2017 and April 1,2016.

Note 9 : Segment information

The Company has presented segment information in the consolidated financial statements which are presented in this same annual report. Accordingly, in terms of Ind AS 108 ''Operating segments'', no disclosures relating to segments are presented in these standalone financial statements.

Notes:

1. The company do not anticipate any liability on account of counter guarantees given to bank for various loan facility availed by associated concerns.

2. The company does not anticipate any liability except above on account of pending income tax and sales tax assessments

Note 10: Expenditure for corporate social responsibility activities

During the year ended March 31, 2018, the company has spent Rs. 19 Lakhs towards Corporate Social Responsibility (CSR) under Section 135 of the Companies Act, 2013 and Rules thereon by way of contribution to various Trusts / NGOs / Societies / Agencies.

Notes:

1. Above includes a contribution of Rs.10.00 Lakhs (2016-17: Rs. Nil) to Sau Mathurabai BhausahebThorat Sevabhavi is registered trust under section 80G(5)(vi) of the Income Tax Act, 1961 for running charitable hospital in the Taluka of Igatpuri in Nashik District and Rs.9.00 Lakhs to Priyadarshani Foundation is registered trust under section 80G(5)(vi) of the Income Tax Act, 1961 for quality education to tribal children in the taluka of Igatpuri in Nashik District.

2. The Company does not carry any provisions for Corporate Social Responsibility expenses for current year and previous year.

Note 11 : Disclosures required under section 22 of the Micro, Small and Medium Enterprises Development Act, 2006:

The company has no information as to whether any of its suppliers constitute micro, small and medium enterprises as per Micro, Small & Medium Enterprises Development Act, 2006 and therefore, the amount due to such suppliers has not been identified.

i) The presentation requirements under previous GAAP differs from Ind AS, and hence, previous GAAP information has been regrouped for ease of reconciliation with Ind AS. The regrouped previous GAAP information is derived from the standalone financial statements of the Company prepared in accordance with previous GAAP.


Mar 31, 2015

1. a) Deferred tax has been accounted in accordance with the requirement of accounting standard on " Taxes on Income" (AS-22) taking into account the present earning of the company, the anticipated earning etc are subject to adjustment on year to year.

b) There are no micro, small and Medium enterprises, to which the company owes dues, which are outstanding for more than 45 days as at March 31, 2015. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

c) The company has taken lease right of the ship Breaking plot No. 14 Alang ship breaking yard. The consideration paid to GMB and party for which such plot has been taken over as treated as deferred revenue expenses and written off over the balance lease period.

d) In the opinion of the Board of Directors, Current Assets, Loans & Advances have a value on realization at least equal to the amount at which they are stated in the Balance Sheet. Adequate provision have been made in the accounts for all the known.

e) The Balance of Sundry Creditors, Sundry Debtors, Loans & Advances are unsecured, considered goods and subject to confirmation.

f) Previous year's figures have been regrouped/rearranged wherever necessary so as to make them comparable with current year's figures.

2. Terms/rights attached to equity shares

i) The Company has one class of equity shares having par value of Rs. 10/- each. Each shareholder of the equity shares is entitled to one vote per share entitled to receive dividends as declared from time to time. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the share holders in the ensuing Annual General Meeting.

ii) During the year ended 31 March 2015, the amount of per share dividend recognized as distributions to equity share holders was Rs. Nil (31 March, 2014: Nil).

iii) Preference shareholder do not have any voting right. They are entitled to dividend @ 4% before equity shareholders.

As per records of the Company, including its register of shareholders/members and other declaration received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.

The major components of deferred tax assets/ liabilities, based on the tax effect of the timing difference as at the year end. Deferred tax is accounted using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date.

3. Details of Security:

a. Cash Credit facility is secured by way of hypothecation of Stock and Book Debts of the company as primary security and equitable mortgage of immovable property of the company and associated concern as collateral security and also by personal guarantee of directors.

Segment Revenue, Segment Expenses and Segment Result include inter segment revenues / expenses between business segments. Those transfer are eliminated in total revenue/ expense/results.

4. Related Party Transactions:

a) Key Management Personnel (KMP)

i) Shantisarup Reniwal Managing Director

ii) Rakesh Reniwal Executive Director

iii) Unnati Reniwal Executive Director

iv) Disha Shah Company Secretary

v) Rajeev Reniwal CFO

b) Other related parties where there have been transactions:

Enterprises commonly controlled or influnced by major shareholder/directors/ relative of directors of the Company:

i) Orchid Lakeview Developers Partnership

ii) Swastik Developers Partnership

iii) White Mountain Partnership

iv) Whitefield Project Partnership

v) Hariyana Internation Private Limited Common Directors

vi) Goyal Hariyana Realty Partnership

vii) Inducto Steel Limited Enterprises over which KMP or their relatives

have significant control or influence

viii) Shree Balaji Associates Partnership

ix) Goyal Hariyana Constructions Partnership

5. The company do not anticipate any liability on account of counter guarantees given to bank for various loan facility availed by associated concerns.

6. The company does not anticipate any liability except above on account of pending income tax and sales tax assessments.

7. Significant accounting policies and practices adopted by the Company are disclosed in the statement annexed to these financial statements.


Mar 31, 2014

1 CORPORATE INFORMATION

Hariyana Ship Breakers Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act,1956. Its shares is listed on One stock exchanges in India. The company is engaged in various business activities.

During the year, the Company was engaged in Ship Recycling (ship breaking), Manufacturing of Sponge Iron & Steels, Trading in Ferrous & Non-Ferrous Metals and Coal and Investment. As and when any surplus fund are available, the same is given on interest to other parties and also invested in the shares and securities to earn short term and long term capital gains.

1.1 BASIS OF PRESENTATION :

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

1.2 NOTES FORMING PART OF THE ACCOUNTS

a) During the year, the Company was engaged in Ship Recycling (ship breaking), Manufacturing of Sponge Iron & Steels and Trading in Ferrous & Non-Ferrous Metals activities. However, as and when any surplus fund are available, the same is given on interest to other parties and also invested in the shares and securities to earn short term and long term capital gains.

b) In the opinion of the Management, the realisable value of the fixed assets of the company are much higher than the carrying cost and therefore, no provision for impairment is required to be made.

c) There are no micro, small and Medium enterprises, to which the company owes dues, which are outstanding for more than 45 days as at March 31, 2014. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

d) The major components of the Deferred Tax Assets/Liabilities, based on the tax effect of the timing differences, as at 31st March 2014, are as under.

e) The company has taken lease right of the ship Breaking plot No. 14 Alang ship breaking yard. The consideration paid to GMB and party for which such plot has been taken over as treated as deferred revenue expenses and written off over the balance lease period.

f) Income Tax assessment has been completed upto the year assessment year 2011- 12. The Management has an opinion that no additional liability will arise in the case of pending assessment.

g) Sales tax assessment has been completed upto the year 2008-09. The Company does not anticipate any liability on account of the pending sales tax assessment.

h) As per provisions of Payment of Gratuity Act. Provision for Gratuity has not been made in the Accounts as per AS - 15 and the same will be accounted for as and when payment is made.

i) In the opinion of the Board of Directors, Current Assets, Loans & Advances have a value of realisation at least equal to the amount at which they are stated in the Balance Sheet. Adequate provision have been made in the accounts for all the known liabilites.

j) The Balance of Sundry Creditors, Sundry Debtors, Loans & Advances are unsecured, considered goods and subject to confirmation.

k) Previous years figures have been regrouped/rearranged wherever necessary so as to make them comparable with current years figures.

CONTINGENT LIABILITIES & COMMITMENTS (TO EXTENT NOT PROVIDED FOR)

(A) Contingent Liabilities

- FY : 2006-07, Pending appeal before Hon. ACIT, 396,780 396,780 Central circle 41, Mumbai

- FY : 2008-09, Pending appeal before Hon. ITAT, 188,120 188,120 Mumbai

- FY : 2009-10, Pending appeal before Hon. ACIT, 200,550 200,550 Central circle 38, Mumbai

- FY : 2010-11, Pending appeal before Hon. ACIT, 358,140 - Central circle 7, Mumbai

1,143,590 785,450

1. The company do not anticipate any liability on account of counter guarantees given to bank for various loan facility availed by associated concerns.

2. The company does not anticipate any liability except above on account of pending income tax and sales tax assessments.


Mar 31, 2013

1 CORPORATE INFORMATION

Hariyana Ship Breakers Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act,1956. Its shares is listed on One stock exchanges in India. The company is engaged in various business activities.

During the year, the Company was engaged in Ship Recycling (ship breaking), Manufacturing of Sponge Iron & Steels, Trading in Ferrous & Non-Ferrous Metals and Coal and Investment and Finance. As and when any surplus fund are available, the same is given on interest to other parties and also invested in the shares and securities to earn short term and long term capital gains

1.1 BASIS OF PRESENTATION :

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

a) During the year, the Company was engaged in Ship Recycling (ship breaking), Manufacturing of Sponge Iron & Steels and Trading in Ferrous & Non-Ferrous Metals activities. However, as and when any surplus f und are available, the same is given on interest to other parties and also invested in the shares and securities to earn short term and long term capital gains.

b) In the opinion of the Management, the realisable value of the fixed assets of the company are much higher than the carrying cost and therefore, no provision for impairment is required to be made.

c) There are no micro, small and Medium enterprises, to which the company owes dues, which are outstanding for more than 45 days as at March 31, 2013. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

d) The major components of the Deferred Ta x Assets/Liabilities, based on the tax effect of the timing differences, as at 31st March 2013, are as under.

Due to virtual uncertinity in realisation of carry forward Long Term Capital Loss of merged entities considered the same for the purpose of deriving the deferred tax assets.

e) The company has taken lease right of the ship Breaking plot No. 14 Alang ship breaking yard. The consideration paid to GMB and party for which such plot has been taken over as treated as deferred revenue expenses and written off over the balance lease period.

f) Income Ta x assessment has been completed upto the year assessment year 2010-11. The Management has an opinion that no additional liability will arise in the case of pending assessment.

g) Sales tax assessment has been completed upto the year 2008-09. The Company does not anticipate any liability on account of the pending sales tax assessment

h) As per provisions of Payment of Gratuity Act. Provision for Gratuity has not been made in the Accounts as per AS - 15 and the same will be accounted for as and when payment is made.

i) Preliminary expenditure amounting to Rs. 30,18,523 /- has not been written off during the year as the company is yet to generate revenue from its Power Project. The same will be amortized over a period of 5 years from the year in which revenues are derived from business operations.

j) In the opinion of the Board of Directors, Current Assets, Loans & Advances have a value of realisation at least equal to the amount at which they are stated in the Balance Sheet. Adequate provision have been made in the accounts for all the known liabilites.

k) The Balance of Sundry Creditors, Sundry Debtors, Loans & Advances are unsecured, considered goods and subject to confirmation.

l) Previous years figures have been regrouped/rearranged wherever necessary so as to make them comparable with current years figures.


Mar 31, 2012

A. Terms/rights attached to equity shares

The Company has one class of equity shares having par value of Rs. 10/- each. Each shareholder of the equity shares is entitled to one vote per share entitled to receive dividends as declared from time to time. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of of Directors is subject to the approval of the share holders in the ensuing Annual General Meeting.

During the year ended 31 March 2012, the amount of per share dividend recognized as distributions to equity share holders was Rs. 3 (31 March 2011: Rs. 2.50).

In the event of liquidation of the company, the holders of the Equity shares will be entitled to receive remaining assets of the company, after distribution of preferential amounts. The distribution will be in proporation to the number of equity shares held by the share holders.

As per records of the company, including its register of shareholders/members and other declarations received from share holders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.

The major components of deferred tax assets/ liabilities, based on the tax effect of the timing difference as at the year end. Deferred tax is accounted using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date.

1. Details of Security:

a. Cash Credit facility from Punjab National Bank is secured by way of hypothecation of Stock of Raw- Material, Finished goods, Work in progress, Books debts & personal guarantee of the Directors.

b Bank overdraft facility from Punjab National Bank OD-376097 is secured by way of equitable mortgage of immovable property of the company & associated concern as collateral security & personal guarantee of the associated concern & relatives of the key management personnels.

c Cash Credit facility from Punjab National Bank CC-2793 is secured by way of hypothecation of Stocks

& book debts of the company as primary security and equitable mortgage of immovable property of the company & associated concern as collateral security.

d Cash Credit facility from Punjab National Bank CC-600 is secured by way of hypothecation of Stocks & book debts of the company as primary security .

2.1 SEGMENT INFORMATION

The business of the company is divided into Four segment: Invevestment & Finance, Ship Recycling, Manufacturing of Sponge Iron & Steels and Trading activities and separate set of books of accounts are maintained. The principal activities of these segments are as under.

1.2 Related Party Transactions :

a) Key Management personnel

i) Sweety Reniwal

ii) Tanmay Agarwal

iii) Sandeep Rampurshottam Agarwal

iv) Shivshankar G.Agarwal

v) Tanmay Trilokchand Agarwal

b) Other related parties where there have been transactions:

Enterprises commonly controlled or influnced by major shareholder/directors/ relative of directors of the Company:

i) Orchid Wood Projcts

ii) Orchid Lakeview Developers

iii) Swastik Developers

iv) Roxina Real Estate Pvt Ltd

v) White Mountain

vi) Whitefield Project

vii) Hariyana Internation Private Limited

viii) Hariyana Ship Demolition Private Limited

ix) Hariyana Air Product

1.3 CONTINGENT LIABILITIES

CONTINGENT LIABILITIES & COMMITMENTS (TO EXTENT NOT PROVIDED FOR)

(A) Contingent Liabilities

- In respect of pending appeal before Hon. ACIT, Central Rs. 188,120 - circle 38, Mumbai.

1. The company do not anticipate any liability on account of counter guarantees given to bank for various loan facility availed by associated concerns.

2. The company does not anticipate any liability except above on account of pending income tax and sales tax assessments.

2. 34 The financial statements for the year ended 31st March, 2011 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act,1956. Consequent to the notification under the Companies Act,1956, the financial statements for the year ended 31st March, 2012 are prepared under revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year's classification.

2. 35 Significant accounting policies and practices adopted by the Company are disclosed in the statement annexed to these financial statements.

1 CORPORATE INFORMATION :

Hariyana Ship Breakers Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act,1956. Its shares is listed on One stock exchanges in India. The company is engaged in various business activities.

During the year, the Company was engaged in Ship Recycling (ship breaking), Manufacturing of Sponge Iron & Steels, Trading in Ferrous & Non-Ferrous Metals and Coal and Investment and Finance. As and when any surplus fund are available, the same is given on interest to other parties and also invested in the shares and securities to earn short term and long term capital gains.

1.1 BASIS OF PRESENTATION :

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

a) During the year, the Company was engaged in Ship Recycling (ship breaking), Manufacturing of Sponge Iron & Steels and Trading in Ferrous & Non-Ferrous Metals activities. However, as and when any surplus fund are available, the same is given on interest to other parties and also invested in the shares and securities to earn short term and long term capital gains.

b) In the opinion of the Management, the realisable value of the fixed assets of the company are much higher than the carrying cost and therefore, no provision for impairment is required to be made.

c) There are no micro, small and Medium enterprises, to which the company owes dues, which are outstanding for more than 45 days as at March 31, 2012. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

Due to virtual uncertinity in realisation of carry forward Long Term Capital Loss of merged entities considered the same for the purpose of deriving the deferred tax assets.

d) The company has taken lease right of the ship Breaking plot No. 14 Alang ship breaking yard. The consideration paid to GMB and party for which such plot has been taken over as treated as deferred revenue expenses and written off over the balance lease period.

e) Income Tax assessment has been completed upto the year assessment year 2009-10. The Management has an opinion that no additional liability will arise in the case of pending assessment.

f) Sales tax assessment has been completed upto the year 2007-08. The Company does not anticipate any liability on account of the pending sales tax assessment.

g) As per provisions of Payment of Gratuity Act. Provision for Gratuity has not been made in the Accounts as per AS - 15 and the same will be accounted for as and when payment is made.

h) Preliminary expenditure amounting to Rs. 30,18,523 /- has not been written off during the year as the company is yet to generate revenue from its Power Project. The same will be amortized over a period of 5 years from the year in which revenues are derived from business operations.

i) In the opinion of the Board of Directors, Current Assets, Loans & Advances have a value of realisation at least equal to the amount at which they are stated in the Balance Sheet. Adequate provision have been made in the accounts for all the known liabilites.

j) The Balance of Sundry Creditors, Sundry Debtors, Loans & Advances are unsecured, considered goods and subject to confirmation.

k) Previous years figures have been regrouped/rearranged wherever necessary so as to make them comparable with current years figures.


Mar 31, 2010

A) The Company is engaged in the ship breaking , Sponge Iron and steel, trading in Ferrous and Non ferrous metals and investment and Finance activities.

b) In the opinion of the management, the realisable value of the fixed assets of the company are much higher than the carrying cost and therefore no provision for impairment is required to be made.

c) i) Deferred tax has been accounted in accordance with the requirement of accounting standard on "Taxes on Income" (AS-22) taking into account the present earning of the company, the anticipated earning etc. and are subject to adjustment on year to year. ii) The major components of the Deferred Tax Assets/Liabilities, based on the tax effect of the timing differences, as at 31st March 2010, are as under.

iii) Due to virtual uncertinity in realisation of carry forward Long Term Capital Loss of merged entities considered the same for the purpose of deriving the deferred tax assets. d) There are no Micro,small and Medium Enterprised , to whom the Company owes dues, which are outstanding for more than 45 days as at March 31, 2010. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

2 Contigent Liabilities note provided for

a) Income Tax assessment has been completed upto the year assessment year2007-08. The management has been advised that no additional liability will arise in the case of pending asessment.

b) The company does not anticipate any significant liabilities on account of pending Income Tax and VAT assessments.

c) The company has given corporate guarantee for Bank Term Loan Finance amounting Rs. 2.51 Crores to M/s. Hariyana Air Product, in which company is also one of the partner.

3 Previous years figures have been regrouped/rearranged wherever necessary so as to make them parable with current years figures.

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