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.
 1,10,41,039/-).
 
 b) Guarantees provided by Bank Rs. 75,65,430/- (Previous year Rs.
 48,87,635/-).
 
 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
 Reserve Account.
 
 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
 on 31.12.2000.
 
 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.