HBC Flextech Ltd.

Under the Memorandumn of Agreement dated 15th September, 1992 (MOA)
 entered into between M/s VIDYUT CABLES PVT LTD. Hyderabad (VCPL) and
 HTC ENGINEERING CORPORATION, U.S.A., a new joiont venture company was
 to be incorporated, to undertake the manufacture of Flexble Printed
 Circuit Boards (Flex Circuits). Accordingly. HBC  Flextech Ltd was
 incorporated on 4th December 1992 in the state of Andhra Pradesh as a
 Public Limited Company with an authorised capital of Rs.9,00,00,000
 divided into 90,00,000 Equity Shares of Rs.10/- each and obtained the
 Certificate of Commencement of Business on 21st December, 1992. The
 Memorandum of Agreement referred to above has since been assigned to
 the Company.
 
 VCPL was incorporated on 28th December, 1973, under the Companies
 Act, 1956, to interalia, manufacture super-enamelled copper and other
 wires of all gauges required in the electrical and electronic
 industries VCPL owned 6294 square yards, or 5262.41 square metres of
 land at Plot No.40. IDA, Balanagar, Hyderabad and a semi-constructed
 factory building and other facilities like water, power and
 telecommunications which are readily available at the said factory
 site. However, the original promoters of VCPL, Shri N Vishnuwardhan
 Reddy, Shri V. Vajrender and associates, did not carry on any
 worthwhile business or activity and the entire share capital of VCPL
 was sold to and acquired by Mr. J.S. Krishnamurthy and this
 associates in June 1990 at the face value of the shares (i.e.
 Rs.100/-) As of 31st December, 1992. VCPL had the following
 facilities:-
 
                                         Value (Rs. lacs)
 Land (5262.41 sq. metres)                    -- 42.09 *
 Building (under construction)                -- 5.57
 Machinery                                    -- 0.74
 
 * -- The land was valued at Rs.1.246 lacs as on 31st March, 1992, but
 a revaluation carried out, on 4.12.92, by Government approved valuers,
 enhanced its value to Rs.42.09 lacs. The revaluation of land was done
 taking into consideration the prevailing market value of the land. As
 a result of the revaluation, the net worth of VCPL was enhanced by
 Rs.40.84 lacs.
 
 The financial highlights of VCPL for two years prior to amalgamation
 are available and are as given below:-
 
                            1990-91    1991-92
                                      (Rs. '000)
 
 Income                       550.92     0.00
 Expenditure                  574.75    39.49
 Profit/(Loss)                (23.82)  (39.49)
 
 As VCPL and HBC Flextech Limited had common shareholders and were
 companies under the same management within the meaning of Section 370
 (IB) of the Act, it was found financially prudent to merge VCPL with
 this company to avoid overheads and administrative expenditure and
 for better availability of infrastructural facilities like water and
 power. The Andhra Pradesh High Court, by its order dated 30th April,
 1993 approved the amalgamation of VCPL with the company with effect
 from 1st January, 1993 and, by virtue of the said amalgamation, the
 excess of assets over liabilities amounting to Rs.44.06 lacs,
 including land admeasuring 5.262.41 sq mtrs. at Plot No.40, IDA
 Balangar, Hyderabad, is vested with this company. The authorised,
 issued and paid-up capital of VCPL was Rs.9.00,000 divided into 9,000
 Equity Shares of Rs.100/- each and the shareholders of both the
 companies, were allotted 50 equity shares of Rs.10/-  each of HBC
 Flextech Ltd for every one equity share of Rs.100/- each of VCPL.
 
 The company as a successor of VCPL, is implementing the terms of MOA
 up a 100% EOU at Balanagar, Hyderabad to manufacture 37,000 sq. mtrs.
 Flexble Printed Circuit Boards in technical, financial and marketing
 arrangement HTC ENGINEERING CORPORATION, U.S.A. under the Electronics
 Hard Technology Park Scheme.
 
 The Company has been enrolled as a member of the Institute for
 Interconnecting and Packaging Electronic Circuits (IPC), a U.S. based
 trade association with international membership representing
 manufactures and users of printed boards, flat cables, discrete
 wiring, hybrid circuits and companies who assemble printed boards.
 The institute is dedicated to furthering excellence in the electronic
 interconnection industry.
 
 
 MAIN OBJECTS OF THE COMPANY
 
 The main objects of the Company are as set out in the Memorandum of
 Association of the Company and include, inter alia the following:
 
 1. To carry on the business as manufacturers, assembles, researchers
 and designers, buters and sellers in India and abroad, to act as
 exporters, importers and agents for all kinds of electronic,
 electrical, optical, mechanical, analytical and scientific and
 industrial equipmenets including air and water pollution equipment
 and professional electronic compoomnents, namely, Flexble Printed
 Circuit Boards (Flex Circuits), calculabors, communication and
 transport equipment, consumer electronics, entertainment equipment
 including integrated circuits, professional components and parts
 required for or capable of being used in research, industry,
 educational institutions, hospitals and telecommunications.
 
 2. To carry on the business of research, design, manufacture,
 assemble, repairs and also act as dealers and agents for all kinds of
 chemical, electronic, electrical and mechanical equipments and active
 and passive components for professionals and entertainment including
 integrated circuits and things required for and capable of being used
 in connection with the manufacture of chemical, electronic,
 electrical, mechanical equipment, components and parts thereof.
 
 3. To carry on the business of rendering technical, commercial, or
 any other consultancy services for planning and development,
 designing and installation of including commissioning on turnkey or
 piecemeal basis plants/projects for othe manufacture of electronic /
 electrical/ mechanical equipments and parts and components thereof,
 including integrated circuits and also rendering after sales
 services.
 
 4. To carry on the business of rendering technical, commercial or any
 other consultancy services for planning and development, designing and
 installation of PCBCs and Flex circuits includindg commissioning on
 turnkey or piecemeal basis and also rendering after sales service.
 
 5. To carry on the business of, research of, manufactures of and
 dealers in electronic and electric componenets, including active and
 passive components for professional and entertainment and any such
 parts that can possibly be carried on with any of the above
 business.
 
 6. To carry on the business of research of design of manufactures of
 and dealers in parts, instruments and equipments in electrical,
 mechanical, electronics, television, telephones and
 telecommunications.