KYC #04

Shivam Cements: You know the ticker. Which profit are you buying?

SHIVM’s standalone profit was Rs 79.82 crore. The audited group accounts show Rs 142.95 crore. Most of the gap is Shivam Holdings’ 30% share of a larger plant (the other Rs 2.5 crore is other consolidation items); looking through, SHIVM’s interest is 25.5%. The cash from it has been smaller and later than the profit.

The short version

Two profits, one ticker. The audited standalone profit for the year to mid-July 2025 was Rs 79.82 crore and the group’s Rs 142.95 crore. Rs 60.62 crore of the group figure (42.4%) is Shivam Holdings’ share of an associate’s profit; SHIVM’s 85.026% of that is about Rs 51.5 crore. Portals publish the standalone EPS.
A 25.51% look-through stake. SHIVM owns 85.026% of the unlisted Shivam Holdings, which owns 30% of Hongshi Shivam Cement, Nepal’s largest integrated plant. China’s Hongshi Group holds the other 70%.
The cash is smaller and later. Shivam Holdings paid SHIVM Rs 9.86 crore in cash in each of the last two years. In four years SHIVM received Rs 34.7 crore of cash dividends from its subsidiaries and put Rs 88.3 crore of cash into them, Rs 23.8 crore of it into Shivam Holdings itself.
Who owns SHIVM is not in the documents. The lock-in ended in March 2022. Directors hold 0.99%. Portals show 0% and 88% promoter shares; neither is a filing.
Related-party purchases equal a third of cost of sales. Rs 218.6 crore in the year to July 2025 (36.2%), Rs 108.5 crore from the associate, on undisclosed terms. A Rs 127.6 crore electricity liability has not moved in six years.

The question: SHIVM’s standalone net profit was Rs 79.82 crore in the year to mid-July 2025; the audited group accounts show Rs 142.95 crore. Which profit are you buying, who owns and controls the structure that produces the difference, and how much of it ever reaches the listed company in cash?

The numbers

Standalone profit: Rs 79.8 crore. Standalone net profit, audited, year to mid-July 2025. It includes the company’s operating results and Rs 13.7 crore of other income, Rs 9.86 crore of it a dividend from Shivam Holdings. The earnings per share on the portals is built from this basis.
Group profit: Rs 143.0 crore. Audited, same year. Rs 139.9 crore is the owners’ share. Rs 60.6 crore of it (42.4%) is Shivam Holdings’ 30% share of an associate’s profit, booked by the equity method; SHIVM’s 85.026% of that is about Rs 51.5 crore.
Look-through share of Hongshi Shivam: 25.51%. 85.026% of Shivam Holdings, which holds 30% of Hongshi Shivam Cement. Hongshi Group holds the other 70%. A share of profit is not a share of cash.
Dividend from the structure: Rs 9.86 crore. Received in cash by SHIVM in the year to mid-July 2025, and again in 2026. In four years its cash dividends from subsidiaries were Rs 34.7 crore and the cash it put into them Rs 88.3 crore.
Related-party purchases, as % of cost of sales: 36.2%. Rs 218.6 crore of purchases in the year to mid-July 2025 (the note does not say what is bought), of which Rs 108.5 crore from Hongshi Shivam. Prices and tonnes are not disclosed.
Electricity liability, unchanged since 2020: Rs 127.6 crore. 12.4% of standalone equity, “other than interest and penalty”. NEA’s figures run from Rs 66.9 crore to Rs 234 crore and the filings do not reconcile them; power was cut in October 2025.

01. Two profits, one ticker

In the audited year to mid-July 2025, Shivam Cements’ standalone net profit was Rs 79.82 crore. That figure includes its operating results and Rs 13.7 crore of other income, Rs 9.86 crore of it a dividend from Shivam Holdings. Its group accounts show Rs 142.95 crore. Per share, the audited accounts print Rs 15.22 against Rs 27.26. Both divide by the same 52,436,706 weighted shares, but the group figure uses the whole Rs 142.95 crore, including Rs 3.05 crore that belongs to minority holders; on the Rs 139.9 crore attributable to SHIVM’s owners it would be Rs 26.68. On today’s 55,932,287 shares it is Rs 14.27 against Rs 25.01.²

The portals that publish SHIVM’s earnings per share, price-to-earnings ratio and book value use the first kind of number. Merolagani shows Rs 14.03 and a ratio of 48.9 for the year to mid-July 2026, unaudited, at Rs 686, the last trade on 9 October 2026.¹⁶ The second kind is not yet available for that year: the company published it standalone only, because the accounts of its principal associate “were not available”.³

The Rs 63.1 crore gap between the two audited profits is mostly one line (the other Rs 2.5 crore is other consolidation differences): Rs 60.62 crore, the share of the profit of Hongshi Shivam Cement, a plant in Nawalparasi larger than SHIVM’s own, that belongs to Shivam Holdings. SHIVM does not own the plant directly. It owns 85.026% of the unlisted Shivam Holdings, which owns 30% of Hongshi Shivam. Looking through, that is 25.51% of the plant, about Rs 51.5 crore of that profit.^2,1,11

In the same year Shivam Holdings paid SHIVM a cash dividend of Rs 9.86 crore, and SHIVM put another Rs 17.0 crore into its subsidiaries.² Over the three years to July 2025 Rs 72.6 crore of profit share was booked; in our arithmetic the associates declared about Rs 54.3 crore of dividends, and ICRA says much of what Hongshi declared was unpaid. SHIVM received Rs 24.8 crore of cash dividends from its subsidiaries (34% of the profit share) and put Rs 49.3 crore of cash into them. Whether the gap is timing or lasting the filings do not say.

We allege no wrongdoing, and there are items in the accounts that we could not reconcile; we list them. It is a story about what a ticker covers: a cement plant at Hetauda, a 25.5% look-through stake in a larger plant, 28 subsidiaries that mostly hold land, related-party purchases equal to a third of cost of sales, a Rs 127.6 crore electricity liability, and a shareholder register the annual report does not print.

That makes this a different kind of company investigation. It is not about whether the shares are cheap; we have not written a valuation of SHIVM. It is about what you are looking at when you look at SHIVM.

SHIVM’s standalone net profit was Rs 79.82 crore in the year to mid-July 2025; the audited group accounts show Rs 142.95 crore. Which profit are you buying, who owns and controls the structure that produces the difference, and how much of it ever reaches the listed company in cash?

02. A joint venture, a plant, and a bet on a second plant

Shivam Cements was incorporated in May 2003 and began commercial production in 2011. Its founders are, in a promoter’s words, “Lucky Group, Goyal Group, Sharda Group and Maru group”; ICRA adds the Bhimsaria and Mundara groups.^10,14,21 It became a public company in 2015 and is, the company says, the first cement producer listed in Nepal.^10,30

In 2015 the promoters did something else. They formed Shivam Holdings as a vehicle to hold 30% of a joint venture with China’s Hongshi Group, and Hongshi Shivam Cement was incorporated the same year. Its plant began producing in May 2018. By mid-July 2023 Shivam Holdings had Rs 421.2 crore invested in it.^13,11

2003: Incorporated in May. Shivam Cements is incorporated as a private limited company. The company’s site says founded in 2003 and in commercial production from 2011.
2009: The founders. A 2018 interview describes a joint venture “established in 2009 by Lucky Group, Goyal Group, Sharda Group and Maru group”, later joined by the Bhimsaria and Devanera groups. ICRA lists Lucky, Goel, Sharda, Bhimsaria, Maru and Mundara.
2015: Shivam Holdings, public company, Hongshi. Shivam Holdings is formed in February as a vehicle to hold 30% of a joint venture with China’s Hongshi Group; Shivam Cements becomes a public company in July; Hongshi Shivam Cement is incorporated in September.
2018: Hongshi’s plant starts. Hongshi Shivam begins production in May at Nawalparasi: about 2.0 million tonnes of clinker and 2.3 million tonnes of grinding capacity a year.
2019: The IPO: 12% to the public. Shares are allotted on 6 March. The issue is 5,280,000 ordinary units against 38,720,000 promoter units: 2% for project-affected locals of Makawanpur, 10% for the public.
2022: The lock-in ends. On 6 March the three-year lock-in on promoters’ and locals’ shares ends. The annual report says all 4 crore 40 lakh shares moved into the general group. The register since then is not in the documents we could read.
2023: Depreciation re-estimated. Useful lives adopted from 1 Shrawan 2079 cut depreciation from Rs 47.8 crore to Rs 13.5 crore. The first unaudited profit for the year to mid-July 2023 (Rs 30.2 crore) becomes Rs 59.5 crore at audit. The auditor makes it a key audit matter.
2023: Shivam Holdings plans a public issue. In December, press reports a plan to float 20% of its capital (1.16 crore units of a Rs 580 crore post-issue capital). SHIVM’s stake is unchanged at 85.026% in July 2026; the status of the issue is not disclosed.
2024: Ratings: Watch, then relief. In April 2024 ICRA downgrades Hongshi Shivam to LA and puts it on Watch with Negative Implications. SHIVM’s own ratings were also on Watch until 5 June 2025, when ICRA reaffirmed LA+ and A1 and removed it.
2025: Power cut and a deposit. NEA’s late-September notice gives 21 days. Power to the plant is cut on 21 October; the company files a writ on 7 November and on 10 November deposits Rs 2.39 crore, one instalment’s worth, “without prejudice” and, it says, without acknowledging the liability. Lines are reconnected.
2025: Audited accounts show the gap. On 16 November the auditor signs unmodified opinions: standalone profit Rs 79.82 crore, group profit Rs 142.95 crore. The board proposes 12.5% (2.5% bonus, 10% cash); books close on 27 November and the AGM of 11 December has the dividend on its agenda. The bonus shares are listed on 17 February 2026, and the cash flow for the year to July 2026 shows Rs 54.57 crore of cash dividend paid.
2026: A year reported without the group. On 12 August the board approves the year to mid-July 2026: profit Rs 78.45 crore, standalone only, because the associate’s accounts were not ready. The company says that departs from NFRS 10 and NAS 28.
2026: The price today. Rs 686.00 on 9 October, a market value of about Rs 3,837 crore against standalone equity of Rs 1,055.8 crore at 16 July 2026. We make no claim about value; see the valuation episodes to come.

Five turning points, with the evidence

Each card below shows what happened, why it mattered, what changed and what followed.

2015 to 2018: The bet on a second plant. What happened: The promoters form Shivam Holdings in February 2015 to hold 30% of a joint venture with the Hongshi Group. Hongshi Shivam Cement starts producing in May 2018. Why it mattered: A cement company with one 0.99 Mt plant became part-owner of Nepal’s largest integrated plant, through a subsidiary and a minority stake, with no operating control. What changed: By mid-July 2023 Shivam Holdings had Rs 421.2 crore invested; in the group’s books the stake is carried at Rs 525.9 crore. The long-term consequence: In the two high years, 30% and 42% of group profit came from a plant SHIVM does not run and whose dividends it cannot set.
2019 to 2022: Going public, then going free. What happened: The IPO puts 12% of the shares in public hands in March 2019. The lock-in ends on 6 March 2022. Why it mattered: The promoter lock-in expiry is the point after which any holder could sell. The annual report stopped explaining who holds what. What changed: The annual report prints directors’ holdings (0.99% together at July 2025) and no register. The long-term consequence: Today’s register, and so the free float, are unknown to a reader of the filings.
Year to mid-July 2023: Depreciation is re-estimated. What happened: Useful lives adopted from 1 Shrawan 2079 cut the annual charge from Rs 47.8 crore to Rs 13.5 crore. The audited profit is Rs 59.5 crore against Rs 30.2 crore unaudited. Why it mattered: It is an accounting estimate and a key audit matter. It lifted that year’s profit before tax by about Rs 36 crore (unaudited charge Rs 49.3 crore, audited Rs 13.5 crore); the effect in later years is not disclosed. What changed: Margins before depreciation (EBITDA) are the clean comparison across the break. The long-term consequence: Anyone comparing earnings before and after mid-2023 on net profit is comparing different accounting.
2022 to 2026: Cash conserved, then paid. What happened: Dividends were mostly bonus shares in the years to July 2023 and 2024 (14.25% and 8.55% bonus against 0.75% and 0.45% cash). In the year to July 2025 the board paid 10% in cash. Why it mattered: While margins were thin the company kept cash and put Rs 88.3 crore of cash into subsidiaries over four years. What changed: Net cash of Rs 74.5 crore and almost no debt by July 2026; 44,000,000 shares became 55,932,287. The long-term consequence: Bonus shares conserve cash and dilute per-share profit; cash dividends depend on a recovery that, in 2026, is flat.
October 2025: The power is cut. What happened: NEA cuts power to the plant on 21 October for unpaid premium tariff on dedicated lines in the load-shedding years. The company writes it filed a writ and deposited an amount equal to one instalment “without prejudice”. Why it mattered: The cut disrupted operations, the company says. It also shows that a Rs 127.6 crore liability on the books is not the same as a settled one. What changed: Lines are reconnected after the deposit; the company says it did not take up the 28-month instalment plan. The long-term consequence: The case is before the Supreme Court; interest and penalty are unquantified.

You know the cement bag. The next question is what the listed company is, and what it is not.

A plant, a joint venture and a promoter group. What exactly does a shareholder of SHIVM own?

03. A cement plant in Hetauda

The listed company makes one thing: ordinary Portland cement in 43 and 53 grades under the Shivam brand, at a plant in Hetauda, Makwanpur. It says it can make 3,000 tonnes of cement and 1,900 tonnes of clinker a day; ICRA writes that as 0.99 and 0.63 million tonnes a year.^14,10

It sold 652,153 tonnes in the year to mid-July 2025: 66% of cement capacity, against 76% a year earlier. Clinker, the intermediate baked from limestone, ran at 72% of capacity (83% the year before).^1,8,10

Years to mid-July	2022	2023	2024	2025
Clinker produced, tonnes	479,419	487,899	521,353	455,914
Cement produced, tonnes	753,970	676,110	751,700	650,022
Cement sold, tonnes	753,739	675,455	750,732	652,153
Cement utilisation (of 0.99 Mt)	76.2%	68.3%	75.9%	65.7%
Clinker utilisation (of 0.63 Mt)	76.1%	77.4%	82.8%	72.4%
Revenue per tonne sold, Rs	12,286	11,478	10,265	11,909
Cost of sales per tonne, Rs	10,006	9,575	8,877	9,261
Gross profit per tonne, Rs	2,280	1,903	1,388	2,648

Sources: ^8,1,10,2,4. Installed capacity from ICRA (0.99 and 0.63 million tonnes a year; the company says 3,000 and 1,900 tonnes a day). Production, capacity and sales are three different numbers; utilisation uses production. The report for the year to July 2026 gives no tonnes.

Sales are all in Nepal, through dealers, mainly in Bagmati, Koshi, Madhesh and Gandaki provinces; no customer is 10% of revenue.^1,3 Limestone comes mostly from the company’s own mines, coal and gypsum are imported, and electricity is from the Nepal Electricity Authority, with diesel generators when it fails.¹

The plant does not make all the clinker it grinds. The directors’ report says the shortfall is bought from Hongshi Shivam Cement.¹ On an assumed 0.90 to 0.95 tonnes of clinker per tonne of ordinary Portland cement, 650,022 tonnes of cement needs about 585,000 to 618,000 tonnes of clinker against 455,914 made: a shortfall of roughly 129,000 to 162,000 tonnes, about a quarter of requirement. The assumption is ours; the report gives no tonnes.

In the year to mid-July 2025, tonnes sold fell 13.1% and revenue rose 0.8%. Revenue per tonne rose 16%, from Rs 10,265 to Rs 11,909, while cost of sales per tonne rose 4.3%: gross profit per tonne almost doubled, from Rs 1,388 to Rs 2,648. Power and fuel (Rs 3,105 a tonne) and raw materials (Rs 4,003) were flat. The recovery came from price.^2,1

Price is the right variable to watch. Nepal has 13 integrated and 16 grinding plants with 12.3 million tonnes of capacity against about 8 million tonnes of consumption in 2024.^27,28 ICRA calls SHIVM’s plant “fairly dated”, on a single site, and says pricing flexibility has “gradually lowered” because capacity “is much higher than the current demand”.¹⁰ SHIVM’s capacity is about 8% of the national total.

Brand and quality marks. The company holds Nepal Standards marks for 33, 43 and 53 grade OPC and says it is a leading OPC brand; ICRA calls it “one of the largest selling ordinary Portland cement (OPC) brands in Nepal”. Weak spot: The company gives no market share. A brand is a claim about price, and the year to July 2025 shows price can be recovered; the year to July 2026 shows revenue fell 10.9%.
Own limestone. Five mines near the plant supply most limestone; the company also holds a new exploration permit in Dhading and buys from a subsidiary’s mine in Dhankuta. Weak spot: ICRA notes the freight-intensive business and a single location. The Dhading permit is early-stage.
The plant. 0.99 Mt of cement and 0.63 Mt of clinker; capex of Rs 40.6 crore in the year to July 2025 and Rs 20.9 crore the year after. Weak spot: ICRA: “fairly dated” against newer rivals with better cost control. Clinker output fell 12.5% in the year to July 2025 and the plant bought the rest from its associate.
The balance sheet. Standalone borrowings of Rs 0.6 crore at 16 July 2026; cash of Rs 75.0 crore; ICRA gearing 0.01×; receivables down from Rs 177.8 crore to Rs 66.4 crore in five years. Weak spot: Cash flow was weaker in the year to July 2026 (Rs 75.5 crore) after an inventory build and the Rs 39 crore put into S.C.L. Investment.
A stake in the largest plant. Hongshi Shivam has 2.3 Mt of grinding capacity, about 19% of national capacity, a 29.1% operating margin in the year to mid-July 2025 and 31% in the nine months to mid-April 2026 (press report of ICRA). Weak spot: Its profit has swung from Rs 3 crore to Rs 202 crore (our arithmetic) and its dividends are bound by approvals and liquidity. SHIVM controls neither.

A standalone profit of Rs 79.82 crore, most of it from one plant. Who owns SHIVM, and who controls what sits around it?

04. Who owns SHIVM? The filings do not say

At the IPO in 2019 the company had 44,000,000 shares. Of these, 38,720,000 were promoter units and 5,280,000 ordinary units, so the public began with 12%: 2% reserved for project-affected locals of Makawanpur and 10% for general investors.¹⁸ The allotment was on 6 March 2019, and the lock-in on promoters’ and locals’ shares ended on 6 March 2022.^19,5

Since then every share is tradable, and the annual report prints no shareholder table. It prints directors’ holdings: six directors hold 539,166 shares between them, 0.99% of the 54,568,085 shares then in issue.¹ Portals fill the gap with different numbers: ShareHub shows 0% promoter shares and NepseTrading 88%. Neither is a filing, and both cannot be true.^31,32

The board is drawn from the business houses that promoted the company. The chairman, Gaurav Goel, is a director of the HR Goel Group; the managing director, Anjani Nandan Maru, runs the JB Maru Group; Gaurav Sharda is a director of the Sharda Group; Sushil Gupta sits on the board of Shivam Holdings as well.^14,15 The company says it is “100% Nepali Investment, investors and promoters”, and recent AGM agendas include “approval on transactions with basic shareholders”.^14,17

The shareholder agenda item suggests that dealings with promoter-linked companies go to a vote. The annual report does not say how large the votes are, or who casts them. We cannot say who controls SHIVM from the documents we could read; we can say who sits on its board and what the directors themselves hold.

The promoter groups (Not disclosed). ICRA names six business houses. At listing in 2019, 38,720,000 of 44,000,000 shares (88%) were promoter units. The lock-in ended in March 2022. The annual report prints directors’ holdings and no register, so who holds the controlling shares today is not in the documents we read.^18,10,5
The public (12% at listing). 5,280,000 of 44,000,000 shares were ordinary units at the IPO (2% for project-affected locals, 10% for the public). What the public holds now is not stated. Portals show 0% and 88% promoter shares; neither is a filing.^18,19
The board of six (0.99%). 539,166 shares together (directors’ report for the year to mid-July 2025): Sushil Gupta 442,018; Gaurav Goel 59,031; Anjani Nandan Maru 36,505; Gaurav Sharda 1,364; Shailaja Rai 248; the independent director none. Who holds the rest is not disclosed.¹
The Hetauda plant. Everything the standalone accounts report: Rs 776.7 crore of revenue and Rs 79.8 crore of profit in the year to mid-July 2025. One site, five limestone mines, a plant ICRA calls “fairly dated”.^2,10
Shivam Holdings. A vehicle formed in 2015 to hold 30% of Hongshi Shivam; Infomerics says it now intends to diversify. SHIVM carries 39,452,088 shares at Rs 394.5 crore, which includes Rs 30.6 crore of bonus shares recorded at face value. Two individuals held 6.00% each in January 2024; the rest of the other 14.974% is not named. In the last two years it paid SHIVM 2.5% of its shares’ face value in cash.^1,13
Hongshi Shivam Cement. Nepal’s largest integrated plant, at Nawalparasi. Hongkong Red Lion Cement No. 3 Ltd., part of China’s Hongshi Group, holds 70%. The group’s books carry the 30% at Rs 525.9 crore. SHIVM’s look-through share is 25.51%.^1,11
S.C.L. Investment. Holds 22 companies (21 at 100%, one at 75%) and a 25% associate. Their paid-up capital in the annual report totals Rs 71.5 crore. SHIVM put in Rs 17.0 crore in the year to mid-July 2025 and Rs 39.0 crore the year after.^1,3
Prabhu Bank shares. Carried at Rs 13.1 crore at fair value (cost Rs 22.0 crore). The only listed holding.¹
Suppliers and related parties. Related-party purchases were Rs 218.6 crore in the year to mid-July 2025 and Rs 182.3 crore the year after, equal to about a third of cost of sales; Rs 85.1 crore of the latter went to Hongshi Shivam. Management calls the terms arm’s length; no prices or tonnes are published.^2,3
Shareholders. The dividend for the year to July 2025 was 12.5% of paid-up capital: Rs 54.6 crore of cash and Rs 13.6 crore of bonus shares. The board proposed it in November 2025, and the unaudited cash flow for the year to July 2026 shows the cash paid. Before that, cash dividends were 0.75% and 0.45%. Nothing is proposed for the year to mid-July 2026 until the audit.^3,17
The subsidiaries. In four years SHIVM put Rs 88.3 crore of cash into subsidiaries, Rs 23.8 crore of it into Shivam Holdings itself, and received Rs 34.7 crore of cash dividends. The last two instalments, Rs 17.0 crore and Rs 39.0 crore, went into S.C.L. Investment.^2,3
Nepal Electricity Authority. A Rs 127.6 crore liability for premium tariff on dedicated lines in the load-shedding years is on the books; NEA’s notice of October 2024 asked for Rs 66.9 crore, payable in 28 instalments, and Kantipur put NEA’s dues at Rs 77.9 crore in October 2025. Interest and penalty are not quantified.¹

The map has a second row. What does SHIVM own, and what does it earn from it?

05. A subsidiary, an associate and 28 other companies

SHIVM holds two subsidiaries directly. Shivam Holdings is 85.026% SHIVM’s (39,452,088 shares, cost Rs 394.5 crore, Rs 30.6 crore of it bonus shares at face value) and was formed in 2015 to hold the 30% of Hongshi Shivam. Its issuer rating from Infomerics (IRN BBB-, January 2024) calls it a special purpose vehicle with one illiquid investment; two individuals held 6.00% each, and in December 2023 it announced plans to float 20% of its capital. SHIVM’s stake is unchanged at 85.026% in July 2026, so the issue has not diluted it. SHIVM held 35,200,000 shares (88.00%) in July 2021 and 34,010,420 in July 2022 of an unchanged 40,000,000, so its own count fell by 1,189,580 shares; the reports do not say to whom they went or on what terms.^1,3,13,20

S.C.L. Investment is 100% SHIVM’s, at a cost of Rs 120 crore after a Rs 39 crore subscription in the year to mid-July 2026. Through it SHIVM holds 22 companies and a 25% associate, with paid-up capital of Rs 71.5 crore among them. The directors’ report says they were bought to hold land in mining areas. SHIVM won a limestone exploration permit at Dhuseni, Dhading, by tender in the year to mid-July 2025, and a subsidiary owns the Salbote mine at Dhankuta from which SHIVM buys limestone.^1,3

Link	Holding	Accounted for as	Where it is stated
SHIVM → Shivam Holdings	85.026% (39,452,088 shares, cost Rs 394.5 crore including Rs 30.6 crore of bonus shares)	Subsidiary, consolidated	Note 8; fourth-quarter report to July 2026, note dd (unchanged at 16 July 2026)
Others → Shivam Holdings	14.974%; two individuals 6.00% each (Jan 2024)	Non-controlling interest, Rs 74.3 crore	Infomerics; group balance sheet
Shivam Holdings → Hongshi Shivam Cement	30%	Associate, equity method, Rs 525.9 crore	Note 9; ICRA
Hongkong Red Lion Cement No. 3 → Hongshi Shivam	70%	Not SHIVM’s	ICRA
SHIVM → S.C.L. Investment	100% (8,100,000 shares; Rs 81 crore at July 2025, Rs 120 crore at July 2026)	Subsidiary, consolidated	Note 8; fourth-quarter report to July 2026, note dd
S.C.L. Investment → 23 companies	21 at 100%; Star Lime 75%; Dhading Cement Udyog 25%	Subsidiaries; Dhading by equity method (Rs 3.7 crore)	Directors’ report p.13; note 9
SHIVM → Prabhu Bank	1,120,000 promoter shares	Fair value through other comprehensive income, Rs 13.1 crore	Note 7

Sources: ^1,3,10,11,13. Only links we could verify are shown. The note-38 list names 28 subsidiaries; the report gives holders and capital for 22 of them plus the associate. Who holds the other four is not stated.

The note to the audited accounts lists 28 subsidiaries.² That sounds like an empire. The accounts show otherwise: against SHIVM alone, the group has Rs 1.9 crore more revenue and Rs 74.5 crore more plant, property and equipment. They are mostly land.^2,1

Year to mid-July 2025, Rs crore	SHIVM alone	Group
Revenue	776.7	778.6
Property, plant and equipment	388.7	463.1
Cash and equivalents	65.2	106.3
Investment in subsidiaries, at cost	475.5	eliminated
Investment in associates, equity method	0	529.6
Total assets	1,259.1	1,465.1

Source: ². What the 28 subsidiaries add to the group is Rs 1.9 crore of revenue and Rs 74.5 crore of plant, property and equipment, consistent with the directors’ report: they hold land and mining areas. The associates add the rest.

Hongshi Shivam Cement is Nepal’s largest integrated plant, at Nawalparasi, with about 2.0 million tonnes of clinker and 2.3 million tonnes of grinding capacity. Hongkong Red Lion Cement No. 3, part of China’s Hongshi Group, holds 70%; Shivam Holdings 30%.¹¹ Its revenue was Rs 1,746 crore in the year to mid-July 2021 and Rs 1,193 crore in the year to July 2024 (ICRA); press reports put it at Rs 1,324 crore in 2025 and Rs 1,032 crore in the first nine months to mid-April 2026, citing ICRA, whose 2026 report we could not open.^11,26 The two sources disagree on the year to July 2024: Rs 1,193 crore against Rs 1,096 crore.

Hongkong Red Lion Cement No. 3 (Hongshi Group): 70% (direct holder)
SHIVM, through Shivam Holdings: 25.51% (85.026% × 30%)
Other holders of Shivam Holdings: 4.49% (14.974% × 30%)

SHIVM’s look-through share of Hongshi Shivam’s profit is 85.026% × 30% = 25.51%; ICRA writes “~26%”. Hongshi Group holds 70%; Shivam Holdings’ other holders 4.49%. A look-through share is an ownership fraction. It says what part of the profit is attributable to SHIVM’s shareholders, not what part is paid.

Who owns what is now clear, except at the top. How does this structure turn into profit, and what does the group’s profit actually count?

06. What the group’s profit counts that the plant’s does not

The group’s accounts treat Hongshi Shivam as an associate: a company in which the group has significant influence but not control. The rule (equity method) is to add the group’s share of the associate’s profit to its own, whether or not any cash arrives. That is the Rs 60.62 crore. The auditor’s own report says the associates’ accounts, Hongshi Shivam’s and the small Dhading Cement’s, were audited by another auditor and relied on.²

Jul 21: Rs 141.3 crore SHIVM’s own profit; Rs 60.2 crore group profit above it
Jul 22: Rs 69.1 crore SHIVM’s own profit; Rs 10.4 crore group profit above it
Jul 23: Rs 59.5 crore SHIVM’s own profit; Rs 0.8 crore group profit above it
Jul 24: Rs 26.0 crore SHIVM’s own profit; Rs 11.9 crore group profit above it
Jul 25: Rs 79.8 crore SHIVM’s own profit; Rs 63.1 crore group profit above it

Audited. The blue segment plus the yellow one is group profit after tax. The associates’ share alone was Rs 60.5, 11.5, 0.9, 11.1 and 60.6 crore; the top column also includes small consolidation differences.

Year to mid-July	Standalone profit	Group profit	Associates’ share	Share of group profit	EPS standalone / group (Rs)
2021	Rs 141.3 crore	Rs 201.5 crore	Rs 60.5 crore	30.0%	32.11 / 45.79
2022	Rs 69.1 crore	Rs 79.5 crore	Rs 11.5 crore	14.5%	15.70 / 16.75
2023	Rs 59.5 crore	Rs 60.2 crore	Rs 0.9 crore	1.5%	13.52 / 13.01
2024	Rs 26.0 crore	Rs 37.9 crore	Rs 11.1 crore	29.2%	5.50 / 8.03
2025	Rs 79.8 crore	Rs 143.0 crore	Rs 60.6 crore	42.4%	15.22 / 27.26
2026 (unaudited)	Rs 78.4 crore	not published	not published		14.03 / not published

Sources: ^6,5,4,2,3. EPS as printed in each year. For the last two years the printed group EPS divides total group profit, including non-controlling interests, by the weighted shares (note 41), although the company’s policy says EPS uses the owners’ profit; on the owners’ profit the year to July 2025 would be Rs 26.68 basic and Rs 25.01 diluted. Later bonus issues restate every figure lower: on today’s 55,932,287 shares the year to July 2025 is Rs 14.27 standalone and Rs 25.01 on the owners’ group profit. The printed diluted EPS for that year is Rs 14.27 and Rs 25.56.

The associate’s share swings. It was Rs 60.5 crore in the year to July 2021, Rs 11.5 crore, Rs 0.9 crore, Rs 11.1 crore, then Rs 60.6 crore. Divided by 30%, Hongshi Shivam’s profit is about Rs 202 crore in the two high years and Rs 3 crore in the low one. ICRA’s operating margins for the plant, 27%, 15%, 9% and 17% in the years to July 2021 to 2024 and 23% in the nine months to April 2025, fit that path.^2,11

One caution on the year to July 2023: about Rs 31.3 crore of its Rs 65.1 crore standalone profit before tax (48%) was bonus shares received and recorded as dividend income, Rs 30.6 crore of it from Shivam Holdings, with no cash attached (note 37 of the annual report for the year to July 2025).^1,4

Whether bonus shares received should be recognised as income at all is a technical accounting question we have not resolved. In IFRS practice a pro-rata bonus issue generally gives the receiver no income, because its proportionate interest does not change; the company’s note presents them as dividend income that can be redistributed to shareholders. This is a question for the company and its auditor, not an allegation.¹

Group EPS as printed needs checking. Note 41 divides total group profit (Rs 142.95 crore, including Rs 3.05 crore for non-controlling interests) by 52,436,706 weighted shares for basic EPS (Rs 27.26) and by 55,932,287 for diluted (Rs 25.56); the year before gives Rs 8.03 against Rs 7.37 on the owners’ profit. The company’s own policy says EPS uses the profit attributable to owners. We could not reconcile this; the audit opinion is unmodified and we allege no error.²

Two items in the audited group accounts we could not reconcile; the audit opinion is unmodified and we allege no error. First, group dividend income for the year to July 2024 was Rs 14.83 crore, the same to the rupee as SHIVM’s own dividend from Shivam Holdings, and Rs 11.96 crore in the year to July 2025 against SHIVM’s Rs 9.86 crore; an intra-group dividend is normally eliminated on consolidation. Second, profit attributed to non-controlling interests, mostly Shivam Holdings’ other holders, was Rs 3.13 crore and Rs 3.05 crore, where 14.974% of the associate’s share would be Rs 1.7 crore and Rs 9.1 crore.²

On today’s 55,932,287 shares, the audited year to July 2025 is Rs 14.27 a share on the standalone profit and Rs 25.01 on the group profit attributable to SHIVM’s owners. Price over the first is the number the portals publish; price over the second is 27.4. They are different bases for different years, and not a valuation. The point is that the portal figure is not the whole structure.^2,16

The year to mid-July 2026 is published standalone only. The note says the principal associate’s accounts were not available, that investments are therefore carried at cost and the equity method not applied, and that “this constitutes a departure from NFRS 10, NAS 28 and paragraph 14 of NAS 34”. The company adds that the annual statements will be consolidated and that the financial effect of the departure has not been quantified.³

Two profits, and one of them is partly booked, not received. How much comes back to SHIVM in cash?

07. Does it come back?

The group’s cash-flow statement has a line, “investment in associates”. In each of the three years to July 2025 it equals, to the rupee, the change in the associates’ carrying amount. So it is not a cash investment. It is what is left of the profit booked after the dividends the associates declared. Profit share minus that change gives those dividends, in our arithmetic: Rs 18.8 crore, Rs 17.3 crore and Rs 18.2 crore, almost the same each year while the profit share went from Rs 0.9 crore to Rs 60.6 crore. They are declared, not received: ICRA says about Rs 110 crore of Hongshi’s declared dividends were still unpaid in April 2025.^4,2,11

Share of associates’ profit booked, year to mid-July 2025: 100% (Rs 60.62 crore)
Dividends the associates declared (implied, not necessarily paid): 30% (Rs 18.2 crore: profit share minus the rise in carrying amount)
Cash dividend received by SHIVM from Shivam Holdings: 16.3% (Rs 9.86 crore)

What SHIVM itself received in cash is smaller. Its cash dividends from subsidiaries were Rs 0.1 crore in the year to July 2023, then Rs 14.8 crore, Rs 9.9 crore and Rs 9.9 crore. The last two equal 2.5% of its Shivam Holdings shares to the rupee: Rs 9.86 crore. In the year to July 2023 its Rs 31.5 crore of dividend income was almost all bonus shares, 3,133,738 shares worth Rs 31.3 crore at face value, Rs 30.6 crore of them Shivam Holdings’ own; no cash came with them. Dividends reach SHIVM through Shivam Holdings; we have not traced which Hongshi dividend paid which Shivam Holdings dividend.^1,3,4

Rs crore	Year to Jul 2023	Jul 2024	Jul 2025	Jul 2026
Associates’ profit share booked in group accounts	0.9	11.1	60.6	not published
Dividends the associates declared (implied, not necessarily paid)	18.8	17.3	18.2	n/a
Cash dividends SHIVM received from subsidiaries	0.1	14.8	9.9	9.9
Bonus shares SHIVM received (not cash)	31.3	–	–	–
Cash SHIVM put into subsidiaries	–	32.3	17.0	39.0
Net cash to SHIVM	+0.1	−17.5	−7.1	−29.1

Sources: ^4,2,3. “Dividends declared” = profit share minus the change in the carrying amount; our arithmetic, tested against the group cash-flow line. In the year to July 2023 the Rs 31.5 crore of dividend income was bonus shares (3,133,738 shares, Rs 31.3 crore at face value) and Rs 0.1 crore of cash, and the Rs 30.6 crore shown as invested in subsidiaries was SHIVM’s own Shivam Holdings bonus shares: neither is cash (note 37 of the annual report for the year to July 2025). Four-year totals: Rs 34.7 crore of cash dividends received, Rs 88.3 crore of cash put in; Rs 23.8 crore of the year to July 2024 went into new Shivam Holdings shares.

In the same four years SHIVM put Rs 88.3 crore of cash into subsidiaries against Rs 34.7 crore of cash dividends received. Rs 23.8 crore of the year to July 2024 went into new Shivam Holdings shares, the year Shivam Holdings paid SHIVM Rs 14.8 crore; the last two instalments, Rs 17.0 crore and Rs 39.0 crore, went into S.C.L. Investment. The Rs 30.6 crore that the cash-flow statement shows as invested in the year to July 2023 is the same bonus issue and is not cash.^4,2,3

We tested the opposite case. Over the three years to July 2025 the associates declared dividends of about 75% of the profit share booked, but SHIVM received Rs 24.8 crore of cash dividends, 34% of the Rs 72.6 crore, and put in Rs 49.3 crore of cash. In one year (to July 2024) cash received exceeded the profit share, Rs 14.8 crore against Rs 11.1 crore; in the other two it fell short. Whether the gap is timing or lasting the filings do not say. Hongshi’s own cash is part of the answer: ICRA says it declared dividends of about 307% of its profits for the years to July 2022 and 2023, with about Rs 110 crore still unpaid in April 2025 “pending regulatory approval and liquidity pressure”.^11,12

This is not a sign of stress: SHIVM has net cash and almost no debt, and chose to invest. The pattern for a reader is profit booked in one year, cash in another, and a separate decision about how much to inject next. The year to mid-July 2026 adds Rs 39.0 crore to S.C.L. Investment and Rs 9.9 crore back. We allege no wrongdoing.

The structure sits beside the plant. Does SHIVM’s own profit turn into cash for the business and its shareholders?

08. The plant: revenue down 28%, margin rebuilt on price

Standalone revenue was Rs 961.5 crore in the year to mid-July 2021 and Rs 776.7 crore four years later; the unaudited year to July 2026 is Rs 692.3 crore. Operating profit before depreciation (EBITDA, excluding other income) fell from Rs 216.3 crore to Rs 27.3 crore in the year to July 2024, then rebuilt to Rs 94.2 crore and Rs 96.0 crore.^6,2,3

Standalone revenue, years to mid-July, Rs crore

Jul 21: Rs 961.5 crore
Jul 22: Rs 926.0 crore
Jul 23: Rs 775.3 crore
Jul 24: Rs 770.6 crore
Jul 25: Rs 776.7 crore
Jul 26: Rs 692.3 crore (Latest, unaudited)

SHIVM alone, audited except the last (unaudited). Axis starts at zero. Revenue is down 28% in five years; tonnes sold fell from 753,739 to 652,153 between the years to July 2022 and July 2025.

Operating profit before depreciation (EBITDA), excluding other income, Rs crore

Jul 21: Rs 216.3 crore
Jul 22: Rs 115.5 crore
Jul 23: Rs 51.9 crore
Jul 24: Rs 27.3 crore
Jul 25: Rs 94.2 crore
Jul 26: Rs 96.0 crore (Latest, unaudited)

Our formula: profit before tax + finance cost + depreciation and amortisation − other income. Depreciation policy does not move it. It reproduces ICRA’s operating margins of 12.5%, 6.7% and 3.5% for the years to July 2022, 2023 and 2024. Margins: 22.5%, 12.5%, 6.7%, 3.5%, 12.1%, 13.9%.

Year to mid-July 2025

Revenue: Rs 776.7 crore (+0.8%). Almost all (99.8%) from cement: Rs 775.2 crore. Tonnes sold fell 13.1% to 652,153; revenue per tonne rose 16% to Rs 11,909.
Cost of sales: Rs 604.0 crore (77.8% of revenue). Power and fuel Rs 202.5 crore (26.1% of revenue), raw materials Rs 261.0 crore, stores and spares Rs 32.0 crore (up 79%). Per tonne, power and raw materials were flat on the year before.
Gross profit: Rs 172.7 crore (22.2% margin). Up from Rs 104.2 crore (13.5%). Gross profit per tonne rose from Rs 1,388 to Rs 2,648. Power, fuel and raw materials per tonne were flat and total cost of sales per tonne rose 4.3%; the higher price per tonne did the work.
Selling, administration, finance: Rs 93.2 crore (12.0% of revenue). Selling and distribution Rs 65.5 crore, administration Rs 26.7 crore, finance cost Rs 0.9 crore. Other income of Rs 13.7 crore (of which Rs 9.9 crore is the dividend from Shivam Holdings) offsets part of it.
Net profit: Rs 79.8 crore (10.3% of revenue). Profit before tax Rs 93.3 crore; tax Rs 13.4 crore. Group profit adds Rs 60.6 crore of associates’ share and comes to Rs 143.0 crore.

Year to mid-July 2026

Revenue: Rs 692.3 crore (−10.9%). Down from Rs 776.7 crore. The report gives no tonnes, so we cannot split price from volume. The fourth quarter was Rs 196.8 crore against Rs 236.9 crore a year earlier.
Cost of sales: Rs 532.5 crore (76.9% of revenue). Down 11.8%. Inventory rose Rs 47.4 crore to Rs 221.0 crore, “principally on clinker held in stock”.
Gross profit: Rs 159.8 crore (23.1% margin). Down 7.5% in rupees; the margin for the year was 23.1% against 22.2%. In the fourth quarter alone it was 23.1% against 30.5% a year earlier.
Selling, administration, finance: Rs 80.8 crore (11.7% of revenue). Selling and distribution fell 19% to Rs 53.1 crore for the year (though 6% higher in the fourth quarter alone); administration was flat at Rs 26.6 crore. That is where the year’s profit was defended.
Net profit: Rs 78.4 crore (11.3% of revenue). Down 1.7%. EPS Rs 14.03 on 55,932,287 shares. No group figure: the associate’s statements were not available.

Standalone, years to mid-July	Jul 21	Jul 22	Jul 23	Jul 24	Jul 25	Jul 26 (u)
Revenue, Rs crore	961.5	926.0	775.3	770.6	776.7	692.3
Gross margin	n/c	18.6%	16.6%	13.5%	22.2%	23.1%
EBITDA excl. other income, Rs crore	216.3	115.5	51.9	27.3	94.2	96.0
Net profit, Rs crore	141.3	69.1	59.5	26.0	79.8	78.4
Operating cash flow, Rs crore	150.2	108.7	118.7	68.1	116.7	75.5
Cash flow ÷ net profit	1.06	1.57	2.00	2.62	1.46	0.96
Capital expenditure, Rs crore	12.1	15.3	9.0	16.0	40.6	20.9
Trade receivables, Rs crore	177.8	164.6	142.3	112.7	80.5	66.4
Inventories, Rs crore	262.0	254.0	168.8	187.5	173.6	221.0
Borrowings, Rs crore	67.9	62.2	37.3	7.3	1.0	0.6
Equity, Rs crore	980.5	919.2	929.7	949.3	1,028.8	1,055.8

Sources: ^6,5,4,2,3. n/c: not comparable (the year to July 2021 is reported by nature of expense). (u) unaudited. Figures for the year to mid-July 2022 are the restated ones in the following year’s accounts.

Why did gross profit per tonne almost double in the year to July 2025? We tested five explanations.

A higher price per tonne: Best supported. For: Revenue per tonne rose 16%, from Rs 10,265 to Rs 11,909, while tonnes sold fell 13.1%. ICRA refers to a “sharp” rise in realisation in the third quarter and an operating margin back to 8.4% for nine months. Against: Nothing in the filings says which products or dealers; the filings give one price per tonne. The main cause. Hongshi’s margin rose in the same period, so it was at least partly the market.
Lower cost per tonne: Not supported. For: None: power and fuel were Rs 3,105 a tonne against Rs 3,106; raw materials Rs 4,003 against Rs 4,015. Stores and spares rose 79%. Against: Cost of sales per tonne rose 4.3%. Costs did not fall. ICRA mentions “moderation in power and fuel costs” against earlier years, not against the year before.
Cheaper bought clinker: Unknown. For: On our assumed clinker factor, the plant buys about a quarter of its clinker from its associate; the purchase value fell from Rs 141.5 crore to Rs 108.5 crore. Against: No tonnes, no price per tonne, no contract. We cannot test it. A fall in value of 23% is consistent with less clinker bought or a lower price, or both.
The depreciation change: Not supported. For: The re-estimate took effect in the year to July 2023. Against: Depreciation in the year to July 2025 (Rs 13.1 crore) was about the same as the year before (Rs 13.1 crore). Not a cause of the 2025 gain. Our EBITDA excludes depreciation anyway.
A one-off: Not supported. For: Other income was lower in 2025 (Rs 13.7 crore against Rs 19.9 crore) and gross profit is above it. Against: The gain is in gross profit, not in other income or tax. No one-off found in the lines we could read.

The year to July 2026 held up better than its last quarter. For the year, profit was Rs 78.4 crore, down 1.7%, with selling and distribution costs 19% lower. The fourth quarter alone was weaker: revenue Rs 196.8 crore against Rs 236.9 crore a year earlier, gross margin 23.1% against 30.5%, profit Rs 16.5 crore against Rs 39.8 crore, and selling and distribution costs 6% higher. The report gives no tonnes, so price and volume cannot be separated.³

Margins were rebuilt on price. Does reported profit turn into cash, and what do the balance sheet and the dividend say?

09. Cash, depreciation, debt and what was paid out

Cash conversion is strong: operating cash flow was 1.1, 1.6, 2.0, 2.6 and 1.5 times net profit in the five audited years, then 0.96 in the year to July 2026. Depreciation and a fall in receivables (from Rs 177.8 crore to Rs 66.4 crore) did most of it; in the latest year inventory rose Rs 47.4 crore, “principally on clinker held in stock”.^2,3

Debt has all but gone: standalone borrowings fell from Rs 67.9 crore to Rs 0.6 crore, and finance cost from Rs 9.7 crore at the peak to Rs 1.1 crore. ICRA’s gearing is 0.01×.^2,3,10

Depreciation is not comparable across mid-2023. Useful lives adopted from 1 Shrawan 2079 cut the annual charge from Rs 47.8 crore to Rs 13.5 crore, which the auditor made a key audit matter (the change from the written-down-value to the straight-line method). The unaudited profit for that year, Rs 30.2 crore, was Rs 59.5 crore at audit. The two later years were revised by +3.8% and +0.5%.^4,9

The change cut the charge for the year to July 2023 by about Rs 36 crore against the unaudited figure (Rs 49.3 crore to Rs 13.5 crore). The effect in later years is not in the filings we read, and a written-down-value charge falls over time, so we do not extend the figure. Any comparison across mid-2023 compares different accounting.⁴

Dividends moved from cash to bonus and back. Cash was 29% and 10.53% of paid-up capital for the years to July 2021 and 2022, then 0.75% and 0.45% with 14.25% and 8.55% in bonus shares, then 10% cash with 2.5% bonus for the year to July 2025: Rs 54.6 crore of cash, 68% of that year’s profit. The board proposed it on 16 November 2025, books closed on 27 November and the AGM of 11 December had it on its agenda; the unaudited cash flow for the year to July 2026 shows Rs 54.57 crore of cash dividend paid, and the bonus shares were listed on 17 February 2026. We did not read the AGM minutes. For the year to July 2026 the board will recommend a dividend only after the audit.^17,3

Dividend for the year to mid-July	2021	2022	2023	2024	2025
Cash, % of paid-up capital	29	10.53	0.75	0.45	10
Bonus shares, %	0	0	14.25	8.55	2.5
Bonus shares, nominal value, Rs crore (not cash)	0	0	62.7	43.0	13.6
Total declared, cash plus bonus at nominal value, Rs crore	127.6	46.3	66.0	45.2	68.2
of which cash, Rs crore	127.6	46.3	3.3	2.3	54.6
Total as % of that year’s profit	90%	67%	111%	174%	85%
Cash as % of that year’s profit	90%	67%	6%	9%	68%

Sources: ^17,6,5,4,2. Rates from ShareSansar’s dividend table, amounts from the paid-up capital at declaration. The nominal value of bonus shares is not cash: a bonus issue capitalises reserves and raises the share count. Bonus shares conserve cash but dilute per-share profit: 44,000,000 shares became 55,932,287 through three bonus issues. For the year to July 2026 “any dividend will be recommended only after the audited statements” are available.

Shivam Holdings paid SHIVM exactly Rs 98,630,220 (Rs 9.86 crore) in each of the last two years: 2.5% of face value. Why it matters: In the same two years the associate’s profit share went from Rs 11.1 crore to Rs 60.6 crore. The payout did not move with it.
Merolagani’s EPS of Rs 14.03 and P/E of 48.9 are standalone and unaudited. Why it matters: The printed group EPS for the year to July 2025 was Rs 27.26, which divides profit including the minority holders’ share; on the owners’ profit and today’s shares it is Rs 25.01. Price over that figure is 27.4. Different years and bases: it is not a valuation.
When SHIVM changed how it depreciates, a profit of Rs 30.2 crore became Rs 59.5 crore at audit. Why it matters: Depreciation fell from Rs 49.3 crore (unaudited) to Rs 13.5 crore (audited) for the year to July 2023.
Volume fell 13.1% and revenue rose 0.8%. Why it matters: Revenue per tonne rose from Rs 10,265 to Rs 11,909. Power, fuel and raw-material costs per tonne were flat and total cost of sales per tonne rose 4.3%. Price, not efficiency, rebuilt the margin.
Six directors hold 0.99% of the shares between them. Why it matters: The man with the largest holding, Sushil Gupta, has 442,018 of 54,568,085. The control question sits in the register, which the annual report does not print.
The 28 subsidiaries add Rs 1.9 crore of revenue to the group. Why it matters: They add Rs 74.5 crore of property, plant and equipment: land and mining areas.
Two unrelated numbers agree to four digits: Rs 127.6 crore. Why it matters: The cash dividend declared for the year to mid-July 2021 (29% of Rs 440 crore) and the electricity liability (Rs 127.61 crore) have nothing to do with each other. We keep them apart.

The numbers are sound on cash and debt. What relationships, commitments or disclosures could change how you read them?

10. Related parties, the power bill and the audit

Related parties. In the year to mid-July 2025 SHIVM made Rs 218.6 crore of purchases from related parties, equal to 36.2% of cost of sales, and sold them under Rs 1 crore. The largest counterparty is the associate, Hongshi Shivam, at Rs 108.5 crore (from the unaudited quarterly schedule). Next are Modern Infrastructure and Arvind Emporium, a related entity the company lists; in 2018 ShareSansar described the then chairman, S. K. Goel, as its managing director.^14,18 The note does not say what any of them sells. Management says the terms are “equivalent to those that prevail in arm’s length transactions”.^2,3,9

Purchases, Rs crore	2023	2024	2025	2026 (u)
Hongshi Shivam Cement (associate)	103.5	141.5	108.5	85.1
Modern Infrastructure	34.1	40.1	51.0	48.4
Arvind Emporium	38.6	64.8	43.8	35.3
Pashupati Synpack Industries	3.4	5.7	3.1	7.9
Century Cements; Dantakali Quarries (subsidiary)	–	–	10.8	3.5
All related parties	182.1	254.5	218.6	182.3
…as % of cost of sales	28.2%	38.2%	36.2%	34.2%
Hongshi Shivam as % of cost of sales	16.0%	21.2%	18.0%	16.0%

Sources: ^9,2,3. 2023 is the sum of the quarterly schedule’s purchase rows (no audited total was read); 2024 and 2025 are the audited note 38 totals (Rs 254.5 crore and Rs 218.6 crore); 2026 is note (l) of the unaudited report. The counterparty rows come from the unaudited quarterly schedules. What each counterparty sells is not stated. Sales to related parties were under Rs 1 crore in each of the last three years (about Rs 3.5 crore in the year to July 2023).

The share bought from the associate fell from 21% to 16% of cost of sales in two years. A purchase from a company in which SHIVM has a 25.5% look-through share of the profit is both an economic link and a related-party one; Shivam Holdings had no board seat at Hongshi in January 2024, with a right to nominate two. We cannot judge price or fairness without tonnes and a price per tonne.^9,3,13

The power bill. SHIVM has recognised a liability of Rs 127.61 crore for premium tariff on dedicated lines during the load-shedding years, a balance unchanged since July 2020 and “other than interest and penalty”. NEA’s notice of October 2024 (2081-06-22) asked for Rs 66.89 crore. In late September 2025 NEA gave a 21-day notice and offered a 28-month instalment plan (28 × Rs 2.39 crore = Rs 66.89 crore, our arithmetic). The company says it did not take up the plan; NEA cut power on 21 October, and on 10 November the company deposited an amount equal to one instalment, “without prejudice” and without acknowledging the liability, to restore supply. The matter is before the Supreme Court.^2,7,22,23,24

Amount	Who	What it is	Source
Rs 127.61 crore	SHIVM, in its accounts	Recognised liability “other than interest and penalty”: Rs 16.7 crore (2017), 50.5, 95.6, 127.6 crore (July 2020). Unchanged to July 2025: 12.4% of equity, 160% of that year’s profit	Annual reports for the years to July 2020 and 2025
Rs 95.50 crore	NEA’s ledger	“Contingent liabilities as per NEA ledger of Rs 955,002,230 has been quantified” (note in the year-to-July-2023 accounts)	Audited statements, year to July 2023
Rs 66.89 crore	NEA, notice of October 2024 (2081-06-22)	Rs 66.89 crore, which is 28 instalments of Rs 2.39 crore	Audited statements, year to July 2025
Rs 77.88 crore	NEA, per Kantipur, 21 Oct 2025	Dues for the extra tariff from Magh 2072 to Baisakh 2075	Kantipur
Rs 234 crore	NEA, per OSNepal, 13 Jul 2021	Rs 121 crore of tariff, the rest penalty; the Hetauda bench of the Patan High Court ruled for NEA	OSNepal

Sources: ^7,1,4,22,25. These numbers may differ in date, period covered and whether interest and penalty are included, and the filings do not reconcile them (see the note below the table); we do not add them or call them contradictory. The company says it “has not yet determined or quantified” interest and penalty; the matter is before the Supreme Court. The 127.6 coincides to four digits with an unrelated figure: the cash dividend declared for the year to July 2021 (29% of Rs 440 crore = Rs 127.6 crore).

The recognised liability is Rs 60.7 crore more than NEA’s October 2024 notice and close to the Rs 121 crore that an NEA official gave as principal in 2021. Two readings fit: the recognised amount is the principal, and penalty and interest would come on top (an NEA official put the penalty at about Rs 113 crore in 2021, and the 2023 accounts quantified Rs 95.5 crore on NEA’s ledger); or NEA’s later notices supersede the earlier numbers. The company says interest and penalty are not yet determined. The filings do not say which reading is right, so we do not add the figures and do not treat any difference as a cushion.^2,22,25

The audit. The auditor gave unmodified opinions on the standalone and consolidated statements. Its two key audit matters are the useful-life estimate and contingent liabilities. Its “other matter” is that the associates’ statements were audited by another auditor and are consolidated by the equity method.² The directors’ report says the company has not been made aware of proceedings against any director in connection with alleged financial crimes.¹

Other contingencies. Tax, VAT and excise claims of Rs 6.1 crore are unprovided. Dealers and distributors are being sued in district courts for overdue amounts, and an impairment allowance of Rs 4.7 crore sits against receivables in legal proceedings. Two writs challenge an environmental fee of 25% of mining royalty and a 0.25% provincial levy on cement sales.^1,3

Gaurav Goel (Chairman). Chairman since at least the December 2023 accounts, a director of the HR Goel Group. In 2018 the then chairman, S. K. Goel, was described as managing director of the HR Goel Group and of Arvind Emporium.^14,18 He holds 59,031 of SHIVM’s shares.¹ We state his role, tenure and holding; related-party purchases are covered in the chapter on related parties.
Anjani Nandan Maru (Managing director). A founding promoter and head of the JB Maru Group. Nominated to the board in October 2025 (2082-06-26) after Raghu Nandan Maru, managing director in 2023, resigned; the accounts of 16 November 2025 name him managing director.^1,14 JB Maru Group companies in the related-party list are small: Laxmi Technoplast and Laxmi Lime Products bought or sold under Rs 1 crore.^3,14 The report gives the dates of the resignation and the nomination and no reason; we draw no inference.
Shiv Ratan Sharda (Executive chairman of Shivam Holdings). Heads the Sharda Group and chairs Shivam Holdings, the vehicle that holds the Hongshi stake. Shivam Holdings’ board also includes Sushil Gupta, who sits on SHIVM’s board, and its company secretary, Lekhnath Aryal, is SHIVM’s company secretary and legal head.^15,1 The two boards overlap in people, not only in ownership. Overlap is normal in a promoter group. Who holds the rest of the 14.974% of Shivam Holdings is not disclosed.

Which risks, and which unknowns, could change an investor’s understanding of SHIVM?

11. The risks ranked, and a checklist

Price and demand in an oversupplied market: HIGH. Margin moves with realisation: EBITDA margin was 22.5%, 12.5%, 6.7%, 3.5%, 12.1% and 13.9% in six years. Revenue fell 10.9% in the year to July 2026. Nepal has about 12.3 Mt of capacity against about 8 Mt of consumption. What would change our view: Quarterly revenue, gross margin per tonne and volumes (the quarterly reports give no tonnes; only the annual report does).
Cash that stays inside the structure: HIGH. Profit booked from the associate is not cash to SHIVM; in four years Rs 88.3 crore of cash went into subsidiaries against Rs 34.7 crore of cash dividends received. Hongshi’s own dividends are bound: about Rs 110 crore declared and unpaid in April 2025. What would change our view: The dividend Shivam Holdings pays (Rs 9.86 crore twice), SHIVM’s next injections, and Hongshi’s dividend approvals.
The electricity dispute: HIGH. A Rs 127.6 crore liability that excludes interest and penalty, a power cut already, and five numbers for one matter. An adverse ruling could add interest and penalty: an NEA official put the penalty at about Rs 113 crore in 2021, and the 2023 accounts quantified Rs 95.5 crore on NEA’s ledger. The filings do not say whether these overlap with the Rs 127.6 crore. What would change our view: The Supreme Court ruling, any further instalments or deposits, and any change in the recognised liability.
Related-party dependence: MEDIUM. Purchases from related parties equal to a third of cost of sales (Rs 218.6 crore), Rs 108.5 crore from the associate. The company says terms are arm’s length; no prices or tonnes are published. What would change our view: A price or tonnage disclosure, shareholders’ approval papers, and whether the share from the associate keeps falling (21%, 18%, 16%).
One old plant in one place: MEDIUM. ICRA: “fairly dated”, a single location, freight-intensive. A power cut disrupted operations in October 2025, the company says. What would change our view: Capex, outage disclosures and utilisation.
Disclosure and control: MEDIUM. No register, a standalone-only, unaudited year-end quarterly report that the company says departs from NFRS 10, NAS 28 and paragraph 14 of NAS 34, and 28 subsidiaries, several of whose holders are not named. What would change our view: The consolidated accounts for the year to July 2026, a register, and subsidiary accounts.
Mining and local levies: LOW. A writ against a 25% environmental fee on mining royalty and another against a 0.25% provincial levy on cement sales, both pending. What would change our view: Court orders; the company says a stay order was issued on the royalty fee.
Market liquidity: LOW. 55,932,287 shares; free float and the holders of control are not disclosed. The 30-day average volume on Merolagani is 232,118 shares. What would change our view: Floorsheet depth and any promoter sales.

A short checklist for the next disclosures:

• The audited year to mid-July 2026, with consolidated statements: the associate’s profit share, the carrying amount, whether profit share and dividends line up.

• Shivam Holdings’ dividend: Rs 9.86 crore twice; any change, and any new share issue (the 20% plan).

• Cash into S.C.L. Investment: Rs 39.0 crore this year; what the 22 companies hold.

• Volumes and price: the quarterly reports give no tonnes; ask for them.

• Related-party purchases: Rs 182.3 crore in the latest (unaudited) year; a price or tonnage disclosure; the AGM approval papers.

• NEA: the Supreme Court ruling, any instalments or deposits, any change in the Rs 127.6 crore, and any quantification of interest and penalty.

• The accounts that do not reconcile: group dividend income, non-controlling interests and printed group EPS (chapter 6), and what became of the 1,189,580 Shivam Holdings shares SHIVM held in July 2021.

• The register: any promoter sale or a new shareholder table in the annual report.

Ask which earnings per share you are looking at. The audited year to mid-July 2025 gave a printed Rs 15.22 standalone and Rs 27.26 group (Rs 26.68 on the owners’ profit). Portals publish the standalone figure; an investor in SHIVM also holds a share of a second plant’s profit, about Rs 51.5 crore of it in that year, but not necessarily its cash.^2,16
A share of profit is not a share of cash. In the last audited year SHIVM’s group booked Rs 60.62 crore from its associate and SHIVM received a cash dividend of Rs 9.86 crore. Over three years SHIVM received Rs 24.8 crore of cash dividends against Rs 72.6 crore of profit share booked (34%) and put in Rs 49.3 crore of cash; over four years Rs 88.3 crore went in against Rs 34.7 crore received. ICRA says much of the associate’s own declared dividends were unpaid. Whether the gap is timing or lasting the filings do not say.^2,3,4,11
A holding company hides what its subsidiaries are. Twenty-eight subsidiaries add Rs 1.9 crore of revenue and Rs 74.5 crore of land. Counting them tells you little; reading what they hold tells you what the money bought.^2,1
One matter can be five numbers. Rs 66.9, 77.9, 95.5, 127.6 and 234 crore all describe the electricity dispute. The recognised liability has not moved in six years; the other numbers differ by source.^2,22,4,7,25
An unaudited profit is a draft. The first profit for the year to July 2023 was Rs 30.2 crore; the audited one Rs 59.5 crore, because the depreciation estimate changed. Always say which profit you mean.^9,4

What has this research established, what has it not, and what comes next?

12. The fact-check register

Every figure above comes from the sources listed at the foot of the page. Where a figure is ours, it is labelled Analysis. Where sources disagree, we show both. The register below lists the main claims and how far each is verified; the research file, the quoted evidence and the underlying dataset are kept with the project and available to reviewers on request.

Claim	Figure	Period	Sources	Status	Note
Group and standalone profit	Rs 142.95 crore and Rs 79.82 crore	Year to mid-July 2025	^2,1	Verified	Audited; both appear in the statements and, as text, in the annual report.
Share of associates’ profit	Rs 60.62 crore, 42.4% of group profit	Year to mid-July 2025	²	Verified	Figure printed; the percentage is our arithmetic. It is Shivam Holdings’ 30% share; SHIVM’s 85.026% of it is about Rs 51.5 crore.
SHIVM’s stake in Shivam Holdings	85.026%	Unchanged at 16 July 2026	^3,1,13	Verified	The company’s note; ICRA and Infomerics say about 85% and 85.03%. A 2018 article says 88%: the annual reports show 35,200,000 shares (88.00%) in July 2021 and 34,010,420 in July 2022 of an unchanged 40,000,000, so SHIVM’s own count fell by 1,189,580 shares. They do not say to whom or on what terms.
Shivam Holdings’ stake in Hongshi Shivam	30%; Hongkong Red Lion Cement No. 3 holds 70%	Current	^11,13,1	Verified	Two ICRA reports, Infomerics and the company’s note agree.
Look-through share	25.51% (ICRA: ~26%)	Current	^1,3,11	Verified	85.026% × 30%; an ownership fraction, not a cash right.
S.C.L. Investment	100%; cost Rs 81 crore, then Rs 120 crore	July 2025, July 2026	^1,3	Verified	Note 8 and the quarterly note; the second figure adds the Rs 39 crore subscription.
Number of subsidiaries	28 listed; holders and capital given for 22 plus one associate	Year to mid-July 2025	^2,1	Partially verified	Who holds the other four is not stated.
Who holds SHIVM’s shares	Not disclosed	Today	^1,31,32	Not available	Directors hold 0.99%. Portals show 0% and 88% promoter shares; neither is a filing.
End of the lock-in	6 March 2022; all 44,000,000 shares moved to the general group	2022	^5,19	Verified	The company’s own report and a 2019 article agree.
Cash dividends received from subsidiaries, and cash put into them	Rs 34.7 crore received; Rs 88.3 crore put in	Four years to July 2026	^4,2,3	Partially verified	Standalone cash-flow lines, adjusted for the year to July 2023, when the Rs 31.5 crore dividend income and the Rs 30.6 crore “investment” were bonus shares (note 37); the totals are our arithmetic.
Dividends the associates declared (implied)	Rs 18.8, 17.3, 18.2 crore	Years to July 2023-25	^4,2,11	Partially verified	Profit share minus the change in carrying amount; the cash-flow line equals that change to the rupee. Declared, not necessarily paid: ICRA says about Rs 110 crore was unpaid in April 2025.
Group EPS as printed	Rs 27.26 basic and Rs 25.56 diluted (year to July 2025); Rs 8.03 and Rs 6.94 the year before	Years to July 2024 and 2025	²	Unverified	Note 41 divides total group profit, including non-controlling interests, by the weighted shares; the company’s policy says EPS uses the owners’ profit. On the owners’ profit: Rs 26.68 and Rs 25.01 (year to July 2025). Not reconciled; no error alleged.
Bonus shares recognised as dividend income	Rs 31.3 crore, year to July 2023 (48% of standalone profit before tax)	Year to mid-July 2023	^1,4	Partially verified	Amounts and the company’s description are in note 37; whether the recognition meets the applicable standard is not tested here.
Two items in the group accounts	Group dividend income Rs 14.83 crore (year to July 2024), the same to the rupee as SHIVM’s own dividend from Shivam Holdings; non-controlling interests’ profit Rs 3.1 crore and Rs 3.0 crore	Years to July 2024 and 2025	²	Unverified	An intra-group dividend is normally eliminated on consolidation, and 14.974% of the associate’s share would be Rs 1.7 crore and Rs 9.1 crore. We could not reconcile either; the audit opinion is unmodified and we allege no error.
Related-party purchases	Rs 218.6 crore, equal to 36.2% of cost of sales	Year to mid-July 2025	²	Verified	Note 38 and the profit and loss account. Purchases, not cost of sales; what is bought is not stated.
Terms of those purchases	“Arm’s length” (management)	Current	³	Unverified	No prices or tonnes are published.
Electricity liability	Rs 127.61 crore, unchanged since July 2020	July 2020 to July 2025	^2,7,4	Verified	The 2020 report describes it as the balance excluding interest and penalty.
Amounts claimed by NEA	Rs 66.9, 77.9, 95.5, 234 crore	2021 to 2025	^2,22,4,25	Partially verified	Each figure is verified as printed in its source; whether they measure the same thing is not. They may differ in date, period and in whether interest and penalty are included. The court has the matter.
Power cut and deposit	From 21 Oct 2025; Rs 2.39 crore deposited 10 Nov	Oct-Nov 2025	^1,22,23	Verified	Company note and press: the company says it deposited one instalment’s worth “without prejudice” and without acknowledging the liability.
Depreciation re-estimate	Rs 47.8 crore to Rs 13.5 crore	Years to July 2022 and 2023	^5,4	Verified	Key audit matter in the year to July 2023; the unaudited-to-audited profit gap is our inference that this is the main cause.
Production and utilisation	650,022 t of cement; 66% of 0.99 Mt	Year to mid-July 2025	^1,10	Partially verified	Tonnes printed (Preeti digits, read on the page image); utilisation divides by ICRA’s capacity.
Revenue per tonne	Rs 11,909, +16%	Year to mid-July 2025	^2,1	Partially verified	Our arithmetic on printed revenue and tonnes sold.
Hongshi Shivam revenue, year to July 2024	Rs 1,192.6 crore (ICRA) or Rs 1,096.0 crore (ICT Frame)	2024	^11,26	Disputed	Not reconciled; ICRA’s 2026 report could not be opened.
Hongshi’s unpaid dividends	About Rs 110 crore, “pending regulatory approval”	April 2025	¹¹	Verified	ICRA’s statement, converted to crore.
Group cash from operations	Rs 171.9 crore group; Rs 116.7 crore standalone	Year to mid-July 2025	²	Partially verified	The group statement starts from profit including associates’ share and does not remove it in the operating section. We use the standalone figure.
Status of the Shivam Holdings share issue	Not disclosed	Dec 2023 to now	^20,3	Not available	Announced as a 20% issue; SHIVM’s stake did not change.

What we could not read: the company’s other filings on NEPSE and SEBON, the Company Registrar’s records, Hongshi Shivam’s and Shivam Holdings’ accounts, ICRA’s 2026 reports, and the Supreme Court file. Whatever depends on them is marked “not disclosed in the sources we read”.

13. What this establishes, and what it does not

SHIVM’s standalone net profit was Rs 79.82 crore in the audited year to mid-July 2025 (its own books, including Rs 13.7 crore of other income); the group booked Rs 142.95 crore, Rs 60.62 crore of it Shivam Holdings’ share of an associate’s profit.
The associate is 30% of Hongshi Shivam Cement, held through an unlisted subsidiary (85.026% SHIVM). Looking through, SHIVM owns 25.51% of that plant.
The cash that came back is smaller and later than the profit: Rs 9.86 crore in a year of Rs 60.62 crore; over four years Rs 34.7 crore of cash dividends against Rs 88.3 crore of cash put in.
Related-party purchases equal a third of cost of sales (36%), about half of them from the associate, on terms the company calls arm’s length and does not publish.
A Rs 127.6 crore electricity liability has stood unchanged for six years; NEA’s figures in four sources run from Rs 66.9 crore to Rs 234 crore and the filings do not reconcile them. The register of SHIVM’s own shareholders is not in the documents we could read.

One plant. One stake. Two profits.

When the earnings per share most investors see is based on standalone profit, what does it leave out, and can the published group EPS be relied on until its calculation is reconciled?

Which Nepali company with a holding structure behind it deserves a KYC next?

This research establishes the structure, the two profits, the cash that has moved in each direction, the size of related-party purchases and the electricity liability. It does not establish who controls SHIVM, what became of the 1,189,580 Shivam Holdings shares SHIVM held in July 2021 and not a year later, how the group’s dividend income, non-controlling interests and printed EPS reconcile, what the associate will pay, what the clinker costs or what the 28 subsidiaries are worth. It does not say whether SHIVM is cheap or dear.

The question that deserves the next episode is the cash one. How much of a 25.51% stake in Hongshi Shivam is cash to SHIVM’s shareholders? It needs the audited group accounts for the year to mid-July 2026 and Shivam Holdings’ dividend and any accounts. When those appear, we follow the money (episode 2), then the stake itself (episode 3), and only then ask what SHIVM is worth (episode 4).

Sources & further reading

Checked 12 October 2026. Educational research, not investment advice.