MURABLACK INDIA LIMITED
ANNUAL REPORT 2005-2006
Your Directors hereby present their Seventeenth Annual Report together with
the Audited Accounts of your Company for the period ended June 30, 2006.
FINANCIAL RESULTS: (Rupees in lacs)
For the Period For the Period
30th June'2006 30th June'2005
Sales - -
Gross Profit/(Loss) (14.62) (16.63)
Before Depreciation, Interest & (14.62) (16.63)
Taxation - -
Interest 1398.95 1214.82
Depreciation 349.11 300.83
Net Profit/(Loss) before Taxation (1762.69) (1532.29)
Net Profit/(Loss) after Taxation (1762.69) (1532.29)
Prior year Expenses 5672.83 -
Loss carried forward to Balance (7435.53) (1532.29)
During the period under review, the operations of the Plant continue to be
under suspension for reasons beyond the control of the Management.
As you are aware, your Company has already won the award in the London
Court of International Arbitration, (LCIA) in Arbitration proceedings
initiated by the Company against the collaborators for supplying defective
Plant & Machinery and the process for manufacturing Super and Electro
Conductive Grades of Carbon Black. In addition to extinction of the balance
purchase price payable to the collaborators amounting to SFR 5,871,500 has
also awarded SFR 3,158,700 as damages and interest thereon. The award was
delivered by LCIA on October' 2000 however, the collaborators have still
not paid the amount as mentioned in the Award. Appropriate steps are being
taken to enforce the award. For further details, members are requested to
refer the management discussion and analysis forming part of Corporate
Governance and appended to this Directors' Report.
Your Company has not accepted any deposits within the meaning of section
58A of the Companies Act, 1956 and the rules made thereunder:
PARTICULARS OF EMPLOYEES:
A statement under section 217(2A) of the Companies Act, 1956, read with
Companies (Particulars of Employees) Rules, 1975 is not applicable as there
are no employees.
Mr.S.T.Shah, Director retires by rotation at the ensuing Annual General
Meeting and offers himself for reappointment.
DIRECTORS RESPONSIBILITY STATEMENT U/S 217(2AA) OF COMPANIES ACT, 1956:
We the Directors of Murablack India Limited, confirm the following:
i) that in the preparation of the annual accounts, the applicable
accounting standards have been followed along-with proper explanations
relating to material departures.
ii) that the Directors selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of the
Company at the end of the financial period and of the profit or loss of the
Company for that period
iii) that the Directors took proper and sufficient care to maintain
adequate accounting records in accordance with the provisions of this Act
to safeguard the assets of the Company and to prevent and detect fraud and
iv) that the Directors prepared the annual accounts on a going concern
ENERGY CONSERVATION, TECHNOLOGY ABSORBTION AND FOREIGN EXCHANGE EARNINGS
Since the Plant remained closed, there are no particulars regarding
Conservation of Energy, Technology Absorption and Foreign 'Exchange
earnings and outgo required under Section 217(1)(e) of the Companies Act,
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
The operations of the Company are reviewed in detail in the Management
Discussion & Analysis report in the Annexure-I, which forms a part of this
A separate statement on corporate governance is produced as a part of the
Annual report along with the Auditors' Certificate in Annexure-II.
The retiring auditors M/s.P.Subramaniam & Associates, Chartered
Accountants, Statutory Auditors of your Company, due to their pre
occupation, have expressed their unwillingness to continue to hold office
further and offered their resignation. In view thereof it is necessary to
appoint a Statutory Auditor in place of M/s.P.Subramaniam & Associates,
Chartered Accountants in the ensuing Annual General Meeting. Your Director
proposes to appoint M/s S.V.Navalkar & Associates, Chartered Accountants as
auditor of your company until the conclusion of the forthcoming Annual
General Meeting. They have signified their willingness to accept
reappointment and have further confirmed their eligibility under Section
224(1-B) of the Companies Act, 1956.
All the observations made in the Auditor' Report are suitably explained in
the Notes to the Accounts and do not call for any further explanation.
Your Directors wish to place on record their appreciation for the co-
operation and assistance rendered by Financial Institutions, Commercial
Banks, Shareholders, Consultants and Employees of the Company.
By Order of the Board
Place : Mumbai S.T.SHAH
Date : 04.12.06 Director
Dubash House Director
15, J.N. Heredia Marg
Mumbai 400 001
MANAGEMENT DISCUSSIONS AND ANALYSIS
As you are aware, your Company was declared as a sick unit under the
provisions of Sick Industrial Companies (Special Provisions) Act, 1985 by
the Board for Industrial Finance and Reconstruction (BIFR) on 31st March
2000. BIFR had appointed Industrial Development Bank of India (IDBI) as the
operating agency to look into the revival of the Company. BIFR has
recommended winding up of the Company vide its letter no 383/99/BI dated
19th June 2003. The said BIFR recommendation to Bombay High Court to wind
up your company has been assigned number as Company Petition No. 758 of
2004 (in BIFR case 382 of 1999).The matter will now come up for hearing in
the usual course for appointment of official liquidator.
The Directors of your Company, once again take this opportunity to explain
the various steps taken for revival of your company:
* Your Company was successful in securing an international arbitration
award in its favour at the London Court of International Arbitration
(LCIA). The LCI Aaward has completely extinguished the balance payment of
SFr 5.871 Million payable under the second (ranch and also directed the
collaborators to pay damages of SFR 3,158,200 and interest thereon till the
date they make such payment. Additionally legal fees of sterling pound
225,000 were also awarded. However, till date the damages etc., as awarded,
could not be recovered from the collaborators as they have reported
bankruptcy under the Swiss Laws.
* During the year under review CEGATE has dismissed our appeal filed
against the Commissioner's order no. 04A/PS-34/2002/M-III dated 27th March,
2002 adjudicating duty amount payable of Rs.197,096,699 (amount of interest
not ascertainable) the amount of differential duty, interest and penalties
payable amounting to Rs.464,054,965 (amount of interest not ascertainable).
We are exploring various options to make representation to the higher
Government authorities in the matter.
* The entire dues of ICICI were settled amicably through a One-Time
* Canara Bank had accepted the Company's OTS proposal and according to the
terms and conditions of the said consent terms Rs.52,00,000 Lakhs has
already been paid to Canara Bank till date. However, for non-payment of
further amounts under the OTS proposal, the same has been withdrawn by the
* Subsequent to the closure of the plant operations at Tarapur in the month
of April 2000, all the workers and the employees have been paid their final
dues as per law.
* Your Company has made several unsuccessful efforts to settle IDBI dues.
The likelihood of reviving your company has hinged upon IDBI accepting a
settlement proposal. We are quoting extracts from the proceedings of BIFR
hearing held on 18th of September 2002, which endorses the efforts
committed by the Directors of your Company to ensure revival:
'The bench noted that the Company had failed because of the technical
reasons. The Plant and Machinery which was imported was defective. The
Promoters did their best to obtain relief and went for arbitration.
However, before they could execute the award issued in their favor, the
other party (the collaborator) went into liquidation. It was required that
the Banks and FIs take a hard look at the options available and take a
pragmatic view. The Paint supplied is technically defective. The recovery
prospects would be negligible if the Company went into liquidation. OTS at
87% of the distress sale value of the assets on which Government agencies
such as Income Tax and others also have a claim cannot be considered as
totally unreasonable, especially when the borrower was not a willful
* Subsequent to the declaration of the Company as a Sick unit, the
promoters continue to infuse funds from their personal resources, for
holding on operations, securing your Company's assets and for making
In view of the foregoing paragraphs, the management feels that on the grant
of the expected relief and concessions from financial institutions and the
government, the activities may be revived.
Statement in the Management's Discussion and Analysis Report detailing the
company's objectives, projections, estimates, expectations or predictions
may be forward looking statements within the meaning of applicable
securities laws and regulations. These statements being based on certain
assumptions and expectation of future' events, actual results can differ
materially from those expressed or implied. Important factors that could
make a difference to the company's operations include economic conditions
affecting global and domestic demand-supply conditions, finished goods
prices, changes in Government regulations and tax regime etc. The Company
assumes no responsibility in respect of forward-looking statements, which
may be revised or modified in future on the basis of subsequent
developments, information or events.
(a) CORPORATE GOVERNANCE:
(b) Board of Directors:
Name of Attendance At Category
Directors last AGM of Director
J.K.Malhoutra NO NED
S.T.Shah NO NED
P.P.Sequeira NO NED/IND
R.W.Dharwadker NO NED/IND
NED - Non Executive Director IND - Independent Director
(c) Committee of the Board:
i) Audit Committee:
In view of the closure of business operations, it was not possible for the
company to comply with the requirements of Audit Committee as per the
clause 49 of listing agreement. Further no independent Director is willing
to join the company due to the reasons explained above.
ii) Investors Grievance:
Though the company is closed, in the interest of members of the company,
your management continue to engage services of Share Transfer Agents for
processing share transfers and other requests from the share holders of the
company. According to the certificate produced by M/s Sharex Dynamic
(India) Pvt, Limited there are no investor complaints pending as on 30th
There is no subsidiary company.
* During the year there has been no transactions with any related party
* The Accounting treatment has been followed as per the normally accepted
* There has been no issue of shares or debentures during the year review.
* There is no pecuniary relationship of a non-executive Director with the
* As on 30th June 2006, there are no investors complaints pending with the
Share Transfer Agent of the company.
Since the company is closed, there is no necessity for appointment of
CEO/CFO hence there is no certification available:
The last three Annual General Meetings of the company were held as under:
Financial Year Date Time Location
Registered Office at
2003 31.12.2003 11.30 a.m. Plot No.F-13, M.I.D.C.
2004 31.12.2004 11.30 a.m. Tarapur 401 506
2005 31.12.2005 10.30 a.m. Maharashtra
Means of Communication:
In view of financial constraints and suspension of operations of the
Company and also non availability of adequate man power, the Company has
not been complying with the rules and regulations stipulated by stock
exchanges in respect of unaudited financial results.
General shareholders' information:
17 Annual General Meeting - 30/12/2005 at 11.00A.M.
Venue: Registered Office at:
Plot No: F 13, M.I.D.C.
Tarapur 401 506
The Register of Members and share transfer books of the company shall
remain closed from 28.12.2006 to 30.12.2006 (inclusive of both days).
Market Price Data:
In the absence of any source of income for the Company due to closure of
the plant operations, the listing fees could not be paid and therefore
shares of the Company are not quoted on any of the stock exchanges where
they are listed.
Distribution of Shareholding:
The distribution of shareholding as on June 30th, 2006 was as follows:
% of % of
No. of ordinary No. of total No. of total
Shares held share share shares held
holder's holders shares
Upto 5000 101345 96.341 14056320 48.658
5001 to 10000 2836 02.690 2378550 08.234
10001 to 20000 660 00.626 1017900 03.524
20001 to 30000 127 00.120 321700 01.114
30001 to 40000 36 00.034 128300 00.414
40001 to 50000 71 00.067 342700 01.186
50001 to 100000 85 00.081 726500 02.515
Above 100000 42 00.040 9916030 34.326
Total 105202 100.00 28888000 100.000
(i) Dematerialization of shares and Liquidity and Share transfer system:
The shares of the company have not, so far, been demateriaiized.
(ii) Location of the Plants (Manufacturing Units):
Plot No.F 13, M.I.D.C.
Tarapur 401 506
(iii) Address for correspondence:
15, J.N. Heredia Marg
Mumbai 400 038
CERTIFICATE ON COMPLIANCE OF CONDITIONS OF CORPORATE GOVERNANCE:
The Members of
Murablack India Limited
We have examined the compliance of conditions of Corporate Governance by
the Company for the year ended 30th June, 2006 as stipulated in Clause 49
of the Listing Agreement of the said Company with stock exchanges in India.
The compliance of the conditions of Corporate Governance is the
responsibility of the management. Our examination has been limited to a
review of the procedures and implementation thereof, adopted by the Company
for ensuring the compliance of the conditions of Corporate Governance. It
is neither an audit nor an expression of opinion on the financial
statements of the Company.
In our opinion and to the best of our information and according to the
explanations given to us and the representations made by the Directors and
the Management, we state that in view of continuing closure of the business
operation and no employees during the year under review, the company could
not comply with certain conditions as stipulated by Clause 49 of the
The Registrars and the Share Transfer Agents of the Company have certified
that as on 30th June, 2006 there was no investor grievance pending to be
resolved for more than 30 days.
We further state that such compliance is neither an assurance as to the
further viability of the Company nor the efficiency or effectiveness with
which the management has conducted the affairs of the Company.
For P.SUBRAMANIAM & ASSOCIATES
Place : Mumbai
Date : 04.12.06