A. Secured by way of equitable mortgage of all the present and future
immovable properties of the Company and a first charge by way of
hypothecation of all the Company's movable machinery, spares, tools and
accessories both present and future subject to prior charges created/to
be created in favour of the Company's Bankers on specified movable
properties for securing borrowings for working capital requirements.
The mortgages and charges referred to above rank pari-passu with the
charge created in favour of Bank. The loans from financial institutions
are further secured by personal irrevocable and unconditional guarantee
of the Managing Director of the Company.
B. Secured by way of first charge on the whole of the Company's stock
of raw materials, present and future, book debts, outstanding monies,
receivables, claims, bills, contracts, engagements, securities,
investment rights and assets, stock in process, finished goods,
consumable and packing stores and other stores and spares whether raw
or in process of manufacture and all articles manufactured therefrom
and secured by personal irrevocable and unconditional guarantee of the
Managing Director and other promoters alongwith second charge on
immovable properties situated at Village Dhaula, Tehsil Barnala, Distt.
Sangrur and third charge on immovable properties situated at Village
Sanghera, Tehsil Barnala, Distt. Sangrur.
C. Secured by second charge on all immovable properties of Sulphuric
Acid Division and all assets present and future including book debts,
stock, stores, building and machinery whether present or to be
purchased out of this loan.
D. Secured by hypothecation of Vehicles and personal guarantee of the
Managing Director of the Company.
E. Amount due for repayment of Term Loans within one year is
Rs.8,80,20,000/- (Previous year Rs.12,41,51,000/-).
2. Contingent Liabilities not provided for in respect of :
a) Unexpired Letter of Credit Rs. 2,71,95,121/- (Previous year Rs.
b) Guarantees provided by Bank Rs. 75,65,430/- (Previous year Rs.
c) Corporate guarantee given on behalf of Abhishek Spinfab Corporation
Limited (now merged in Abhishek Industries Limited) a Group Company of
Rs. 3,986 lacs (Previous year 9,775 lacs)
3. During the year ended 31st December, 1997 the Company has revalued
the Land, Building and Plant & Machinery purchased/erected in earlier
years at market value prevalent at that time. Consequent to the
revaluation, the gross block of fixed assets increased by
Rs.15,16,56,362/- and the same amount was transferred to Revaluation
4. The Company has contested before ITAT the additional demand in
respect of Income Tax amounting to Rs.81.87 lacs for the assessment
year 1989-90 and 1991-92. The Company has been advised that there are
fair chances of success in the appeal. Accordingly no provision has
been made in the books of accounts.
5. In compliance with the revised Accounting standard (AS-2)
'Valuation of Inventories' issued by the Institute of Chartered
Accountants of India, (a) Company has changed the measurement of
inventories of raw materials, stores and spare parts and packing
materials from the cost to lower of cost and net realizable value, (b)
in respect of Valuation of work in progress and finished goods, the
Company has decided to follow absorption costing method strictly as
enumerated in revised AS-2. The change has resulted in the valuation of
inventories being lower by Rs 3,89,270/- and consequently the profit
before tax for the year stands reduced to the extent.
6. Sale/purchase include interdivisional transfer of steam between
Fertilizer & Paper Division. However, within Paper Division the sales
are net of transfers between different sections.
7. The Company is in the process of identifying the suppliers who are
covered under the interest on delayed payments to Small Scale and
Ancillary Industrial undertakings Act, 1993. Consequently the liability
under the said Act on account of interest has not been ascertained as
8. Figures have been rounded off to the nearest of rupees.
9. Previous year figures have been regrouped/recast wherever necessary.
10. Information required by para 3 & 4 of part II of Schedule VI of the
Companies Act, 1956.