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Bheema Cements Ltd.

BSE: 518017 Sector: Industrials
NSE: N.A. ISIN Code: INE333H01012
BSE 00:00 | 02 Mar Bheema Cements Ltd
NSE 05:30 | 01 Jan Bheema Cements Ltd
OPEN 8.60
52-Week high 8.60
52-Week low 0.00
Mkt Cap.(Rs cr) 24
Buy Price 8.60
Buy Qty 150.00
Sell Price 0.00
Sell Qty 0.00
OPEN 8.60
CLOSE 8.60
52-Week high 8.60
52-Week low 0.00
Mkt Cap.(Rs cr) 24
Buy Price 8.60
Buy Qty 150.00
Sell Price 0.00
Sell Qty 0.00

Bheema Cements Ltd. (BHEEMACEMENTS) - Director Report

Company director report

Dear Shareholders

Your Directors are presenting the 37th Annual Report together with theAudited Statement of Accounts of your Company for the year ended 31st March2016


The Financial highlights for the year under review are given below:

(Rs. in lakhs)

Particulars FY 2015-16 FY 2014-15
Sales and Other Income - -
EBIDTA (149.05) (1883.50)
Interest 148.30 127.11
Depreciation - -
Profit Before Tax (149.05) (1883.51)
Provision for Tax* - -
Profit After Tax (149.05) (1883.52)
Net Worth Rs 8595 Rs 8744


There were no plant operations and hence no production and sales were recorded. Therewere only expenditure incurred during this period for the up keeping of the plant &company as a whole.


As per the requirements Section 134(3) (I) of the Companies Act 2013 we declare thatthere are below significant material changes and commitments affecting financial positionof the Company between 31st March 2016 and the date of Board’s Report.

Debt Restructuring & Working Capital

The company is in receipt of communications from an Asset Reconstruction Company (ARC)JM Financial ARC Pvt. Ltd informing that the outstanding amounts of the company withvarious banks had been assigned to them and that the company should pay the amounts tothem. The Sanction letter for re-structuring of the loans was issued on March 11th2016 by JMFARC. As there was significant change in the Board of Directors of BCL therearrives a need for the revision of the Sanction letter with revised terms and conditions.Since then the company has been negotiating with the ARC for the restructuring &rescheduling of the term loans assigned by the banks (Axis Bank Karnataka Bank ICICIBank SBH United Bank OBC) and also for additional working capital loan company is innegotiations with various investors who can facilitate the working capital at a lowerinterest rate. The earlier issued Sanction letter would need to be revised with the latestchanges in Board of Directors other terms & conditions. The management is confidentthat a positive outcome will result from these efforts and the company will restart itsoperations shortly.

Company has requested the state government to consider 2 years Deferment & 36months instalments for payment of statutory dues (Power VAT and Mines Royalty) & thecompany is actively pursuing with the state government & the relief is expectedshortly.


As per the requirements Rule 8(5)(ii) of the Companies (Accounts) Rules 2014 we wantto declare that there is no significant change in the nature of business of the Companyduring the last financial year.


The authorized capital of the Company as on 31st March 2016 was Rs. 780000000/-divided into 42000000 equity shares of Rs.10/- each and 3600000 preferential sharesof Rs. 100 each.

The Subscribed Issued and Paid-up capital of the Company as on 31st March 2016 wasRs.557035600/- divided into 55703560 equity shares of Rs. 10/- each.


Our directors express their inability to recommend any dividend for the financialyear2015-2016 due to no operation in the business.


Your Company has not accepted/invited any deposits from the public for the year underreview as per Section 73 of the Companies Act 2013 and the rules made there under.


Pursuant to provisions of the Companies Act 2013 Sri S Kishore Chandra (DIN:00974625) Director will retire at the ensuing Annual General Meeting and being eligibleoffers himself for reappointment. The Board recommends his re-appointment.


• Sri S.Karthik Sarath Chandra* as the Whole time director designated as JointManaging Director and Chief Executive Officer of the Company

• Sri S.Kishore Chandra* as the Managing Director of the Company

• Smt. Ameeta Trehan* as Additional director categorised as Independent Directorcum Woman Director of the Company

• Sri Majeti Hari Sekhara Purna Prasad* as Additional director categorised asIndependent Director of the Company.

• Sri S.Kishore Chandra** as the Chief Financial Officer

*appointed by the Board of Director in its Meeting held on 26th May 2016.


• Sri S.R.B. Ramesh Chandra* as the Director and Managing Director of the Company

• Sri S. V. Reddy* as the Independent Director of the Company

• Sri K. R. Chari* as the Independent Director of the Company

• Sri Ghanta Azad Babu** as the additional director of the Company

*was not re-appointed in the 36th Annual General Meeting held on 24thMay 2016

**Ceased to be a director w.e.f 30th September 2015


The Independent Director were inducted into the Board and attended an orientationprogram. Further at the time of appointment they were issued a formal letter ofappointment outlining their duty responsibilities role and functions.


As per provisions of the Companies Act 2013 and Regulation 17(10) of the SEBI (LODR)Regulations 2015 The Company has devised a policy for performance evaluation ofIndependent Directors Board Committees and other individual directors which includescriteria for performance evaluation of executive and non-executive director.

The Directors were overall satisfied with the evaluation results which reflected theoverall engagement of the Board and its Committees with the Company.


Management’s Discussion and Analysis Report for the year under review in terms ofthe provisions of Regulation 34 of the SEBI (LODR) Regulations 2015 presented in aseparate section forming part of the Annual Report. Annexure I


The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The Remuneration Policy is attached to this report as Annexure II.


In accordance with Section 149(7) of the Companies Act 2013 each Independent Directorhas confirmed to the Company that he or she meets the criteria of independence as laiddown in Section 149(6) of the Companies Act 2013 and Regulation 16(1)(b)of the SEBI(LODR) Regulations 2015..


To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:

(a) THAT in the preparation of the annual accounts the applicable accountingstandards had been followed along with proper explanation relating to material departures;

(b) THAT the directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit and loss of the company for that period;

(c) THAT the directors had taken proper and sufficient care for the maintenanceof adequate accounting records in accordance with the provisions of this Act forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;

(d) THAT the directors had prepared the annual accounts on a going concernbasis;

(e) THAT the directors had laid down internal financial controls to be followedby the company and that such internal financial controls are adequate and were operatingeffectively; and

(f) THAT the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.


The Board of Directors of the Company have adopted Whistle Blower Policy. This policyis formulated to provide an opportunity to employees to raise concerns and to access theAudit Committee in good faith in case they observe unethical and improper practices orany other wrongful conduct in the Company to provide necessary safeguards for protectionof employees from reprisals or victimization and to prohibit managerial personnel fromtaking any adverse personnel action against those employees.

There were no complaints received during the year 2015-16.



The shareholders at their 35th AGM held on 24th May2016 approved there-appointment of M/s. A.Ramachandra Rao & Co. Chartered Accountants Hyderabad (FirmRegistration No : 002857S) as statutory auditors of the Company to hold office from theconclusion of the 35th AGM up to the conclusion of the 38thAGM.

In terms of first proviso of Section 139 of the Companies Act 2013 the appointment ofthe auditors is subject to ratification by the shareholders at every subsequent AGM.Accordingly the statutory auditors M/s. A. Ramachandra Rao & Co. CharteredAccountants have confirmed their eligibility under Section 141 of the Companies Act2013 Rule 4 of the Companies (Audit and Auditors) Rules 2014.

The Audit Committee and the Board of Directors recommend the appointment of M/s. A.Ramachandra Rao & Co. Chartered Accountants as statutory auditors of the Companyfrom the conclusion of the 35thAGM till the conclusion of the 38thAGMsubject to ratification by the shareholders.

The Statutory Auditors’ Report contain qualification:

The Statutory Audit report for the financial year 2015-16 is annexed herewith as AnnexureIII to this Report.

a) Note No. 25.II which explain the circumstances that lead to accumulatedlosses and the circumstances that are mitigating the same and the reasons based on whichthe accounts have been prepared on Going Concern Basis. In our opinion the withdrawal ofthe sanction letter issued by the ARC will have an effect on the Going Concern Status ofthe Company. Notwithstanding the fact that the company has incurred cash losses during thecurrent year as well as during the previous year and the withdrawal of the sanction letterissued by the ARC the financial statements of the Company have been prepared on GoingConcern Basis

Management Reply

As the pre-conditions mentioned in the sanction letter of JMFARC issued on 11th Marchhave not been fulfilled and also as there has been significant change in Board ofDirectors & lapse of time the sanction letter needs a revision. Hence the company isnegotiating with JMFARC for the revised proposal regarding the restructuring of the debtand raising working capital from other investors at a lower interest rate or ROI. Theworking capital if availed from JMFARC then the interest rate shall be on higher side upto 25% annually payable monthly which can have significant effect on the cash flows &the financials of the company. The company is very much confident that the revival of thecompany shall take place with required working capital at a low financial cost which canpermit the cash flows for repayment of the loans.

b) Note No. 25.III which explains the circumstances leading to non-provision ofthe interest on term loans.

We are of the opinion that the interest on term loans should have been provided tillthe time a formal communication is received from the lender bank fixing the finalliability agreed for settlement. However in the absence of adequate information we areunable to quantify the amount of interest not so provided and its impact on current yearloss and liabilities. We are also of the opinion that the Company should have provided forthe interest on the loans assigned to the ARC from the cut-off date as per the lettersanction till 31st March 2016 as per the terms and conditions provided in thesanction letter issued by ARC. The impact of non-provision of interest on the loansassigned to the ARC (based on the sanction letter issued by ARC) is that the loss for theyear is understated by Rs. 1803 Lacs and the Liabilities are lower to that extent.

Management Reply

In view of assignment of Several Bank dues to the Asset Reconstruction Company andfinalization of terms with the ARC resulting in restructuring of dues substantially lowerthan the dues company considered appropriate not to provide interest. However anyshortfall or excess will be accounted after the final settlement with the ARC.

c) Further in view of the fact that the sanction letter issued by the ARCin March 2016 stands withdrawn subsequent to the date of balance sheet in our opinionthe total liabilities dues to various banks should have been restored to and accounted atthe amounts originally due to such banks including interest not provided and interest andother liabilities reversed in earlier years. Based on information provided andexplanations offered to us such liabilities should have been accounted at Rs. 35179 Lacsinstead of Rs. 20758 Lacs. As a result the loss of the company is understated by anamount of Rs. 14421 Lacs and liabilities of the company have been understated by Rs.14421 Lacs.

Management Reply

The present management is very much confident that the revival of the company shalltake place with required working capital at a lower financial cost which doesn’tnecessitate re-instating the entire Rs 351.79 Crores as their balances to be payable toJMFARC at this point.

d) Note No. 25.IV which explains the circumstances in which Deferred TaxLiability was not provided for the current year i.e. 2015-16 and reversed for theprevious year i.e. 2014-15. The financial impact of the same is non provision of deferredtax liability of Rs. 198.19 Lacs for the year 2015-16 and reversal of deferred taxliability provision for the year 2014-15 amounting to Rs. 196.90 Lacs. As a result theloss for the year is understated to the extent of RS.395.09 Lacs and the liabilities areunderstated by an equal amount.

Management Reply

As there have been no operations of the company during the past couple of years themanagement is of the opinion that the deferred tax liability should not be provided forthe years FY14-15 and FY15-16. Hence the deferred tax liability provided in the FY 14-15has been reversed in the FY15-16.

e) Note No. 25.V which explains the circumstances in which the liabilitiestowards power bills amounting to Rs. 381.55 Lacs for the period April 2014 to September2014 have been reversed based on a representation made to the South Power DistributionCompany of Telangana Limited (DISCOM). We are of the opinion that the reversal ofprovision should have been done based only on a communication from the DISCOM about thewithdrawal of such charges. The impact of the reversal of power charges of the previousyear is that the loss for the current year is lower by Rs. 381.55 Lacs and the liabilitiesare understated by an equal amount.

Management Reply

The DISCOM has billed Bheema Cements Ltd for an excess amount of Rs 381.55 lacs in theform of MD CMD charges & Penalties even after the plant shutdown from March 4th2014 till September 2014. BCL management has submitted the proposal to Industries DeptGovernment of Telangana for wavier of these charges as the plant has been shutdown.

f) Note No. 25.VI which explains the circumstances in which the salaries for thecurrent year are provided at less than contracted values. We are of the opinion that theprovision of salaries at less than contracted values is based on management’sperception only and not on any agreement with the concerned parties and hence the salariesshould have been provided at full as per the contracted values. The non-provision ofsalaries at contracted values results in the loss for the current year being lower at Rs.253.30 Lacs and the liabilities are understated by an equal amount.

Management Reply

As there were no plant operations during the past 2+ years the management is of theopinion for the year FY15-16 only the basic salaries & other statutory provisions tobe accounted as part of salaries & wages. After the complete revival of the companythe management shall consider for making provision for balance salary & wages.

g) Note No. 25.VIII which explains the reasons for non-provision of depreciationduring the year. We are of the opinion that though the Company did not carry operationsduring the year depreciation should have been provided due to efflux of time.Non-provision of depreciation has resulted in understatement of expenditure by Rs.1442.90 lacs and overstatement of fixed assets by an equivalent amount.

Management Reply

As it is new machinery and as there was no physical deterioration of the Plant &Machinery due to efflux of time and as there were no operations hence depreciation wasnot provided.

h) Note No.25 XVI regarding non-provision of gratuity and provision for leaveencashment the impact of which is not ascertainable in the absence of adequateinformation.

Management Reply

After the plant operations are revived provision for gratuity and leave encashmentshall be made. At present it is not ascertainable for want of details.


The Company has appointed P. Surya Prakash as Secretarial Auditor. The SecretarialAudit Report (SAR) for the financial year 2015-16 is annexed herewith as Annexure IVto this Report.

The board took note of the qualifications in the SAR. The board is reforming theexisting internal control systems and compliance team of the company in order to ensureforemost compliance of the applicable rules law and regulations applicable to thecompany. Management will take necessary steps to regularize the violations includingfiling of application with BSE Ltd for revocation of suspension of trading.


The Board of Directors on the recommendation of the Audit Committee appointed M/sAsutosh & Associates as the Cost Auditors of the Company for the Financial Year2016-17 under section 148 of the Companies Act 2013. M/s Asutosh and Associates haveconfirmed that their appointment is within the limits of section 141(3)(g) of theCompanies Act 2013 and have also certified that they are free from any disqualificationsspecified under section 141(3) and proviso to section 148(3) read with section 141(4) ofthe Companies Act 2013.


The Company is not required to transfer any amount to the General Reserve.


The Company has suspended the operations with effect from March 2014 and in view of thelong period of suspension of operations there has been higher attrition of humanresources.


A separate report on Corporate Governance is enclosed as a part of this Annual Report.A certificate from the Auditors of the Company regarding compliance with CorporateGovernance is annexed to the Report on Corporate Governance.

The Company has complied with the requirements about code of conduct for Board membersand Senior Management Personnel.

Pursuant to Schedule V of SEBI (LODR) Regulations 2015 the declaration signed by theManaging Director affirming compliance of the Code of Conduct by the Directors and SeniorManagement personnel of the Company for the financial year2015-2016 is annexed and formspart of the Corporate Governance Report Annexure V.


The Company was not required to constitute a CSR Committee as the Company has not metany of the thresholds mentioned in Section 135 of the Companies Act 2013 during thefinancial year under review. Hence reporting about policy on Corporate SocialResponsibility and the initiatives taken are not applicable to the Company. Company isrunning a School at the factory premises for 250 students.


The information required pursuant to Section 197(12) of Companies Act 2013 read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 in respect of the employees of the Company is enclosed herewith in separate section Annexure- VI.

No employee was in receipt of remuneration exceeding Rs. 10200000/- or more perannum or Rs. 850000/- or more per month as the limits prescribed under Rule 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel)Rules 2014 and hence thedisclosure as required under Rules 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is not required.


No related party transactions were made by the Directors & only Remuneration isPayable which is Due to the Executive Chairman Managing Director and Whole Time Directorfor the year FY 2015-16.

Further the Company has provided for remuneration during the year of Rs.9.6 Lacs andRs. 2.4 Lacs to two relatives of Key Management Personnel. In this year as the turn aroundof the company has not yet taken place only the basic salaries & other statutorycomponents have been considered for this year. Your Directors draw attention of themembers to Notes 25 to the financial statement which sets out related party disclosures.


The Company has not made any loan given guarantee provided security or madeinvestments pursuant to the provisions of Section 186 of Companies Act 2013 other thanthe normal course of business.



Extract of Annual Return of the Company is annexed herewith as Annexure VIII tothis Report.


The Audit Committee comprises Sri K. R. Chari (Chairman) Sri S.V. Reddy and Sri S.Chandra Mohan as members.

All the recommendations made by the Audit Committee were accepted by the Board.


The Board of Directors of the Company met 7 (seven) times during the year. For furtherdetails please refer report on Corporate Governance.


The equity share of the Company is listed with Bombay Stock Exchange (BSE). Listingfees is pending for financial year 2015-16. Share Trading is suspended.

On September 2 2015 Securities & Exchange Board of India issued SEBI(LODR)Regulations 2015 streamlining the provisions of the Listing Agreement for differentsegments of Capital markets to ensure better enforcement hence enforcing the Companies toenter into fresh Listing Agreement with the stock exchanges where the shares are listed.


The Board of your company has formulated a risk management policy in connection withthe risk that the organization faces in its day to day business such as strategicfinancial credit market liquidity security property IT legal regulatory etc.

The board reviews the policy in regular interval.


Pursuant to Companies Amendment Bill 2014 there was no case of fraud that has beenreported to the Audit Committee or Board during the year.



The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo is not applicable since there is no such activity at presentbeing pursued by the Company.

Annexure X


Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:

a. The Company has no subsidiaries joint ventures or associate companies.

b. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company’s operations in future.

c. The Company has in place adequate internal financial controls with reference tofinancial statements. These controls ensure the accuracy and completeness of theaccounting records and preparation of reliable financial statements.


There were no complaints/cases pursuant to the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.


Your Directors wish to take this opportunity to express their grateful appreciation anddeep sense of gratitude to the Corporation Bank JM Financial ARC Pvt Ltd & variousDepartments of Central and State Governments and consultants for their valuable guidanceand co-operation extended during the year and look forward to their continued support infuture. Your Directors would like to thank all the Share Holders Vendors Dealers andConsumers for the confidence reposed in the Company and its management.

Your Directors wish to place on record the deep sense of appreciation of the devotedservices rendered by the Executives Staff and Workers of the Company at all levels.

For and on behalf of the Board
Place: Hyderabad S. Chandra Mohan
Date: 29th August 2016 Executive Chairman