HILTON RUBBERS LTD. OBJECTS & ACTIVITIES: Manufacture of rubber goods, conveyor, transmission and V-Belts, motor and bicycle tyres and tubes, rubber mattings and fittings, gloves and matresses, mackintosh, resin and hose pipes. BRIEF HISTORY: The Company was orignally formed as a partnership firm in 1971 and commenced production on 22nd January, 1971. It was promoted by Shri D.B. Khanna. It was incorporated as a private limited company on 11th July, 1973 under the name and style of Hilton Rubers Pvt. Ltd. Subsequnetly on 15th January 1982, it was converted into a public limited Company. OPERATIONS: In 1982-83, the turnover rose by 38.16% and stood at Rs. 8.40 crores. In 1983-84. turnover further increased to Rs.15.25 crores mainly due to the additional conveyor belt production from Unit No. II at Badhkhalsa and more than100% capacity utilisation at Unit No. 1 at Rai for the production of Vee and fan belts. The melling prices of conveyor beltin remained depressed preventing better recovery of cost. Profits were also sustantially higher than the previous year to Rs. 18.24 crores. Bothe the conveyor belt plant and the V-belt plant worked to full capacity during the year. With the introduction of better product-mix and with the installation of some balancing equipment, turnover during 1985-86, further went up to Rs. 20.47 crores. During 1986-87, turnover increased marginally to Rs. 21.39 crores. Despite this, the margins suffered a setback due to reasons like strike by workment at Unit No. 1 for about 2 months and withdrawal ;of concessional duty on nylon fabric, from November 1986 onwards. Production of raw edge cogged V-belts increased to 4.69 lakh pieces. During 1987-88, turnover increased to Rs. 28.84 crores. Margins were affected because of the increase in the price of inputs. During 1988-89 (9 months), turnover amounted to Rs. 26.87 crores registering an increase of 20% on an annualised basis over the previous year. Exports for the period amounted to Rs. 1.43 crores. During 1989-90, turnover amounted to Rs. 37.44 crores. During 1990-91, production increased by 18% and turnover at Rs. 41.71 crores was also substantially higher compared to the previous year. The overall working improved despite political instability, cancellation of some major orders from Middle East and hike in the price of petrochemical based raw materials. During 1991-92., turnover increased marginally to Rs. 45.30 crores. Margins also represented only a marginal increase over the previouse year due to increased tax liability. EXPANSION & DIVERSIFICATION: During 1981-82, the Company increased the production capacity of conveyor/transmission belts form 1,250 tonnes to 2,125 tonnes per annum. The Company set up this expansion project at Badhkhalsa, Haryana. Commercial production of special types of belts was started by the end of December 1982. In 1983-84, the Company undertook to set up a new unit a cost of Rs. 215 lakhs to manufacture 1.65 unit at a cost of Rs. 215 lakhs to manufacture 1.65 million pieces of raw edge 'V' belts in technical collaboration with Arntz- optibelt-KG of West Germany. This was financed by loans from ICICI and hongkong and Shanghai Banking Corporation, internal accruals, equity issue and unsecured loans from directors. Commercial production commenced from 1st March, 1986 after a successful trial run. During 1985-86, the Company received a Letter of Intent to enhance the capacity for the manufacture of V-Belts from 18 lakh pieces to 21 lakh pieces per annum. In 1986-87, unit No. 4 was set up at Badhkahalsa, Sonepat, for the manufacture of KEVLAR reinforced conveyor belts upto 2,400 mm width in collaboration with Trelleborg Aktiebolog, Sweden. In 1987-88, approval from Government was received to increase the capacity of conveyor beltings from 2,500 tonnes to 3,250 tonnes. During 1988-89, trial orders for new products vis-a-vis kevlar reinforced conveyor belts, screens, wear resistant rubber elements and mill liners were taken. However, commercial production of wear resistant liners commenced only from March 1990 onwards. JOINT VENTURE: During 1991-92, the Company proposed to restructure the Power Transmission division in technical and financial collabroation with A/s Routunds Fabriker of Denmark to form a new joint venture company. For this purpose, the Company proposed to sell the Power Transmission division to the Joint Venture in which the Company will hold 50% equity and balance 50% will be held by A/s Roulunds Fabricker and IFU. Some of the salient features of the agreement are 1) Hilton Rubbers will receive a royalty for the use of its Brand name; 2) The joint venture will pay a net Royalty of 1.8% to Roulnds; 3) Roulunds have also committed to buy back V markets. Operations were expected to commence on 1st April, 1993. NON-CONVERTIBLE DEBENTURES: Simultaneously with the rights issue of equity shares in March 1985, the Company offered 1,00,000 - 15% secured non- convertible debentures of Rs. 100 each on rights basis to the existing shareholders of the Company in the proportion of 1 debenture for every 8 equity shares held. These are redeemable in one lot on expirty of 7 years from 21-6-1985. During 1991-92, the Company undertook to buy-back the debentures at par value plus accrued interest, if any, subject to certain limitations and conditions. The Company may keep alive any such debentures bought back and reissue them at its discertain. REVALUATION OF FIXED ASSETS: The Company revalued its land, buildings and plant and machinery as on 30th June, 1985 and the net surplus of Rs. 310.62 lakhs arising out of this was transferred to capital reserves. EQUITY LINKED DEBENTURE ISSUE: During April 1986, the Company issued 5,05,000 equity shares of Rs. 10 each at par linked to 1,00,000 - 15% secured redeemable non-convertible debentures of Rs. 100 each. Out of this issue, 4,75,000 equity shares linked with 95,000 debentures, were offered to the existing equity shareholders of the Company, in the ratio of 15 equity shares and 3 debentures for the existing equity shareholding between 25 to 34 and thereafter for every 10 existing equity shares or part thereof 5 new equity shares and 1 debentures. (all were taken up). The balance of 30,000 equity shares linked with 5,000 debentures were to be offered to the employees/workers of the Company on an equitable basis in the proportion of 1 debenture and 6 equity shares provided that proportion of 1 debenture and 6 equity shares provided that not more than 10 debentures and 60 equity shares would be given per employee/worker. (all were taken up). The non-convertible debentures of Rs. 100 each are redeemble in one lot on expirty of seven years form 21-6-1986. CONVERTIBLE DEBENTURES: During July-August 1989, the Company offered 1,20,000 - 12.5% secured fully convertible debentures of Rs. 150 each on Right basis in proportion 1 debentures : 20 equith shares held. (all were taken up) Additional 18,000 debentures were allotted to retain oversubcription. Simultaneously another 6,000 - 12.5% fully convertible debentures were issued to the employes (including Indian working directors/workers of the Company on an equitable basis (only 1,441 debs taken up). Unsubcribed portion of 4,559 debentures was allowed to lapse. Rs. 60 (part A) of the face value of each debenture was converted into & equity shares of Rs. 10 each at a premium of Rs. 5 per share on the expirty of 6 months from the date of allotment of debentures. Accordingly 5,57,764 equity shares were allotted on 28.3.1990. Rs. 45 (part B0 of the face vlaue of each debenture was to be converted into 2 equity shares at a premium of Rs. 12.50 per share at the end of 18 months from the date of allotment of debentures. Accordingly 2,78,882 equity shares were allotted on 28.3.1991. The remaining Rs. 45 (part C0 of the face value of each debenture was converted into 2 equity shares at a premium of Rs. 12.50 per share at the end of 24 months from the date of allotment of debentures. Accordingly 2,78,882 equity shares were allotted on 28-9-1991. CHANGE OF NAME: Subject to the approval of the Central Government, the Company proposed to change its name from Hilton Rubbers Ltd. to Hilton Trellex Ltd.