Notes to Accounts of Gini Silk Mills Ltd.

Mar 31, 2018

1. CORPORATE INFORMATION

Gini Silk Mills Limited is a Public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange Limited, Mumbai. The Company is engaged in the manufacturing and selling of Shirting and Suiting with reputed brand name "GINI" and processing fabric on jobwork basis.

Estimation of fair value :

The fair valuation is based on current price in active market for similar properties. The main inputs used are quantum, area, location, demand, restrictive entry to the complex, age of building and trend of fair market in respective area.

Ind AS 101 Exemption : The Company has availed the exemption available under Ind AS 101, whereas the carrying value of property plant and equipment has been carried forward at the amount as determined under the previous GAAP netting off Ind AS adjustments such as government grants. Considering the FAQ issued by the ICAI, regarding application of deemed cost, the company has disclosed the cost as at 1st April, 2016 net off accumalated depreciation.

Aggregated amount of unquoted investments as at March 31, 2018 Rs. 9.11 Lakh (P.Y. Rs.9.11 Lakh)

Aggregated amount of quoted investments as at March 31, 2018 Rs. 495.24 Lakh, Market value Rs. 495.24 Lakh (P.Y. Rs. 42.57 Lakh Market value Rs. 42.57 Lakh)

# Held as lien by bank against Bank Gurantee amounting to Rs. 35,00,000/- to the Maharashtra Pollution Control Board for compliance for consent conditions/ direction for providing adequate and satisfactory pollution control device.

# In respect of Demand raised by Central Excise department under Rule 8 of Central Excise Valuation Rule, 2000 for Deemed Credit (15% Profit),Order has been passed in our favour by the Tribunal under section 35(1) of the central Excise Act, 1944, Section 129(B) of the Customs Act, 1962 and Finance Act, 1994.Order no.A/86296/17/EB Dated 10.03.2017 and Order No. A/89829-89831/17/SMB

iv) Rights, Preference and Restrictions attached to Equity Shares

The Company has only one class of equity shares referred to as equity shares of Rs. 10/- each. Each holder of equity shares is entitiled to the same rights in all respects.

Nature of Security, Terms of Repayment and Interest rate

The Term loan from Kotak Mahindra Bank (in P.Y. Outstanding term loan of State Bank of India taken over by Kotak Mahindra Bank Ltd as on 15.03.2017) are primary secured by entire Plant and Machinery at Tarapur plant acquired out of this loan and entire stock of trading goods. The Company has provided collateral security of equitable mortgage of leasehold Factory land & Building at Tarapur. The Director Mr. Vishwanath S. Haralalka and Mr. Deepak V. Harlalka has provided personal guarantee for the said loan. The rates of interest for these loans vary between 9% to 10%, with a repayment period of 4-5 yea'' Rate of interest vary based on the credit risk assessment of the company. (Rate of Interest is without considering interest subsidy available under State and Central Government Scheme.)

(There are no dues to Micro & Small Enterprises as on 31st March 2018. This information as required to be disclosed under the Micro, Small & Medium Enterprise Development Act,2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.)

NOTE 2 - RELATED PARTY DISCLOSURES :

As per Ind AS 24, the disclosures of transactions with the related parties as defined in the Accounting Standard are given below. List of related parties where control exists and related parties with whom transactions have taken place and relationships :

(a) Key Management Personnel (KMP)

Vishwanath Harlalka

Deepak Harlalka Anjali Harlalka

(b) Partnership Firm Shree Enterprises Gini Construction Co.

Gini Citicorp Reality LLP

(c ) Other Related Parties ( Enterprises in which KMP having significant influence)

Gini Tex Private Limited Gini Constructions Pvt Ltd Shreem Reality Private Limited

Notes:

i) Parties identified by the Management and relied upon by the Auditors.

ii) No amount in respect of the related parties have been written off/back or are provided for during the year

NOTE 3 - The Company is engaged only in Textile business and there are no separate reportable segments as per Ind AS 108.

NOTE 4 - Operating Lease

a) Premises Taken on Operating Lease:

The company has significant operating lease for premises. These lease arrangements range for a period of 5 years.

The leases are renewable for a further period on mutually agreeable terms

NOTE 5 - PROVISION FOR EMPLOYEE BENEFIT OBLIGATION

The Company contributes to the following post-employment plans in India.

Defined Contribution Plans:

The Company pays Provident Fund Contributions to publicly administered Provident Funds as per local regulations and are recognised as expense in the Statement of Profit and Loss during the period in which the employee renders the related service. There are no further obligations other than the contributions payable to the appropriate authorities.

The Company recognised 23.48 Lakhs for the year ended March 31, 2018 (March 31, 2017 Rs. 16.67 lakhs) towards Provident Fund Contribution.

Defined Benefit Plan:

The employees'' gratuity fund scheme managed by a Trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity.

The rate of escalation in salary considered in actuarial calculation is estimated taking into account inflation, seniority, promotion and other relevant factors.

iii. Sensitivity Analysis

The sensitivity analyses above have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sensitivity to the assumption, the method (Projected Unit Credit Method) used to calculate the liability recognised in the balance sheet has been applied. The methods and types of assumptions used in preparing the sensitivity analysis did not change as compared with the previous period

6) FAIR VALUE MEASUREMENT

The fair values of financial Assets and Liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The following methods and assumptions were used to estimate the fair values:

1) Fair value of Cash and Short Term Deposits, Trade and other Short Term Receivables, Trade Payables, Other Current Liabilities, Short Term Loans from Banks and other Financial Institutions approximate their carrying amounts largely due to short term maturities of these instruments.

2) Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counter party. Based on this evaluation, allowances are taken to account for expected losses of these receivables. Accordingly, fair value of such instruments is not materially different from their carrying amounts.

The Company uses the following hierarchy for determining and disclosing the fair value of financial instrument by valuation technique:

Level 1: Quoted (unadjusted) price in active markets for identical Assets or Liabilities

Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

ii) Financial instrument measured at amortised cost

The carrying amount of financial assets and liabilities measured at amortised cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be recieved or settled.

Note 7 Financial instruments - Fair values

A Financial Risk Management objectives and policies

In the course of business, the Company is exposed to certain financial risk that could have considerable influence on the Company''s business and its performance. These include market risk ( including currency risk, interest risk and other price risk), credit risk and liquidity risk. The Board of Directors review and approves risk management structure and policies for managing risks and monitors suitable mitigating actions taken by the management to minimise potential adverse effects and achieve greater predictability to earnings.

In line with the overall risk management framework and policies, the treasury function provides service to the business, monitors and manages through an analysis of the exposures by degree and magnitude of risks. It is the Company''s policy that no trading in derivatives for speculative purposes may be undertaken. The Company uses derivative financial instruments to hedge risk exposures in accordance with the Company''s policies as approved by the board of directors.

B Market Risk

Market risk is the risk that the fair value of future Cash Flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risks: interest rate risk, currency risk and other price risk. Financial instruments affected by market risk includes borrowings, investments, trade payables, trade receivables and loans.

1) Interest Rate Risk

Interest rate risk is the risk that the fair value or future Cash Flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s total debt obligations with floating interest rates.

Interest rate sensitiviy

The following table demonstrates the sensitiviy to a reasonably possible change in interest rates on that portion of loans and borrowings affected. With all other variables held constant, the Company''s profit before tax is affected through the impact on floating rate borrowings, as follows :

2) Foreign Currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to changes in foreign exchange rates. At the reporting date, company does not have any foreign currency exposure.

3) Equity Price Risk

Equity price risk is related to the change in market reference price of the investments in quoted equity securities. The fair value of some of the Company''s investments exposes the company to equity price risks. At the reporting date, the companies equity shares are carried at fair value.

C Credit Risk

Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on customer profiling, credit worthiness and market intelligence. Trade receivables consist of a large number of customers, spread across geographical areas. Outstanding customer receivables are regularly monitored.

The average credit period is 30 days. The Company''s Trade receivables consist of a large number of customers, across geographies hence the Company is not exposed to concentration risk.

D Liquidity Risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company has obtained term loan from banks and working capital loans from directors.

8 Section 135 of Companies Act,2017 on Corporate Social Responsibility is not applicable to the company for F.Y 2017-18.

9 Balances of Trade Receivables, Loans and advances and Trade Payables, Advances from Customers and to Suppliers have been taken as per books awaiting respective confirmation.

10 Income Tax assessment is completed up to the Assessment Year 2015- 2016

11 The Company is in process of appointing the Company Secretary and Chief Financial Officer, however during the year under audit the company unable to appoint the same.

12 Previous year''s figures have been regrouped/ reclassified wherever necessary to correspond with the current year''s classification/ disclosure.

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Mar 31, 2016

1. Balances of Trade Receivables, Loans and advances and Trade Payables, Advances from Customers and to Suppliers have been taken as per books awaiting respective confirmation.

2. Income Tax assessment is completed up to the Assessment Year 2013-2014

3. The Company is in process of appointing the Company Secretary and Chief Financial Officer, however during the year under audit the Company unable to appoint the same.

4. The Company’s operation fall under single segment namely “Textile" therefore, separate business segment is not disclosed

5. Previous year''s figures have been regrouped/ reclassified wherever necessary to correspond with the current year''s classification/ disclosure

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Mar 31, 2015

CORPORATE INFORMATION

Gini Silk Mills Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange Limited, Mumbai. The company is engaged in the manufacturing and selling of shirting and suiting with reputed brand name "GINI".

b) Rights, Preference and restrictions attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10 per shares. Each holder of equity shares is entitled to one vote per shares. The Company declares and pay dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaning assets of the Company, after distribution of all preferential amounts, in proportion of their shareholding.

During the year ended 31 March 2015, the amount of per share dividend recognized as distribution of equity shareholders was Rs. 27,96,300/- (31st March 2014 : Rs. 27,96,300/- ).

Nature of Security

The Term Loan from State Bank of India are primary secured by entire Plant and Machinery at Tarapur plant acquired out of this loan and entire stock of trading goods. The Company has provided collateral security of equitable mortgage of leasehold factory land & building at Tarapur. The Director Mr. Vishwanath S. Harlalka and Mr. Deepak V. Harlalka has provided personal guarantee for the said loan.

Terms of Repayment and Interest Rate

Repayable in 70 monthly installment staring from June 2015 having moratorium period of 12 months from June 2014 to May 2015. Rate of interest 3.90% margin above base rate which is presently 10.00%. Effective rate is 13.90% p.a. as at year end. (P.Y. Nil). Rate of margin vary based on the credit risk assessment of the company.

During the year, Company has taken term loan of Rs.6.67 Corers under the Technology Up-gradation Fund Scheme (TUFS). Under this Scheme Company will receive the 10% capital subsidy in some items and reimbursement of 5% of interest cost. Scheme's Benefits would available on the approval of the Department of Textile, Central Government. The Capital Subsidy benefit and interest benefits under the scheme would be accounted on the receipt of the approval.

Nature of Security

The Cash Credit from State Bank of India are primary secured by entire Plant and Machinery at Tarapur plant acquired out of this loan and entire stock of trading goods. The Company has provided collateral security of equitable mortgage of leasehold factory Land & Building at Tarapur. The Director Mr. Vishwanath S. Harlalka and Mr. Deepak V. Harlalka has provided personal guarantee for the said loan.

Terms of Repayment and Interest rate

Repayable on demand rate of interest 2.75% margin above base rate which is presently 10.00%. Effective rate is 12.75% p.a. as at year end.( P.Y. Nil). Rate of margin vary based on the credit risk assessment of the company.

# The Company had entered in to partnership with Gini Construction Co for development and construction of residential building. The share of profit / loss of each partner are Gini Silk Mills Limited is 9%, Gini Tex Private Limited is 9%, Shree Gini Textunsing Private Limited 2%, Shri Vishwanath S. Harlalka 15%, Shri Deepak V. Harlalka 15%, Shri Gautam Vinod Harlalka 20%, Shri Manish Vinod Harlalka 20% and Shri Vinod S. Harlalka 10%. The fixed capital of the partnership firm is Rs. NIL

#Commissioner of Central Excise, Thane II has demanded of Rs. 3, 38,418/- on Deemed Credit. The Company has deposited Rs. 1,00,000/- ( Previous year Rs. 1,00,000/-)to Asst. Registrar the Customs Excise Service Tax Applellate Tribunal W.Z.B. (Previous year Rs. 3,38,418/-)

The employees' gratuity fund scheme managed by a Trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity.

2 CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for) a CONTINGENT LIABILITIES

Central Excise duty Demand of Rs. 215,820 /-for Interest and Penalty on differential amount of Excise duty [The Company has gone in appeal to the Commissioner (Appeal)] ( Previous year Rs. 215,820/-).

Liability if any, arising on account of an undertaking given by the company to Excise authorities on account of purchase of land & building from GINI TEX PVT LTD. Of which amount cannot be ascertained.

Commissioner of Central Excise, Thane 11 has demanded of Rs.. 3, 38,418/- on Deemed Credit. The Company has deposited Rs. 1,00,000/- ( Previous year Rs. 1,00,000/-) to Asst. Registrar the Customs Excise Service Tax Appellate Tribunal W.Z.B. ( Previous year Rs. 3,38,418/-).

Textile Committee has demanded Rs. 2,99,150/- on collection of Cess under the Textile Committee Act & Cess Rules Reg. ( Previous year Rs. 2,99,150/-).

Central Excise duty demand for Rs. 1,85,09,688/- for excise duty and interest on differential amount on excise duty. (The Central Excise Department has made Special Leave Petition in Supreme Court).( Previous Year Rs. 1,85,09,688/-).

Bank Guarantees of Rs. 1,75,000/- given to the commissioner of custom on account of bond for availing duty exemption under EPCG scheme.

Bank Guarantee of Rs. 200,000/- given to the Maharashtra Pollution Control Board for compliance of directions issued by Board.

Disputed Demand in respect of Income -Tax for FY 2011-12 of Rs. 14,51,720/-.

b COMMITMENTS

Commitment for Capital Expenditure is Rs.11,93,625/- (P.Y Rs. 39,000,000/-), advance paid Rs. 11,93,625/- (P.Y. Rs. 58,42,500 ).

Other Commitment of Rs. 25,60,000/- (P.Y. Nil) towards capital contribution to Tarapur Enviornment Protection Society, advance paid Rs. 8,57,600/- (P.Y. Nil)

3 Balances of Trade Receivables, Loans and Advances and Trade Payables, Advances from Customers and to Suppliers have been taken as per books awaiting respective confirmation and Reconciliation if any.

4 Income Tax assessment is completed up to the Assessment Year 2012- 2013.

5 The Company is in process of appointing the Company Secretary, however during the year under audit the company unable to appoint the same.

6 The Company's operation fall under single segment namely "Textile" therefore, separate business segment is not disclosed.

7 Previous year's figures have been regrouped/ reclassified wherever necessary to correspond with the current year's classification/ disclosure.

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Mar 31, 2014

CORPORATE INFORMATION

Gini Silk Mills Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange Limited, Mumbai. The company is engaged in the manufacturing and selling of shirting and suiting with reputed brand name "GINI".

1 SEGMENT REPORTING

The Company''s operation fall under single segment namely "Textile" therefore, separate business segment is not disclosed

b) Terms/rights attached to equity shares

The Compnay has only one class of equity shares having a par value of Rs. 10 per shares. Each holder of equity shares is entitiled to one vote per shares. The Company declares and pay dividends in Indian rupees. The dividend prpoposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. During the year ended 31 March 2014, the amount of per share dividend recognized as distribution of equity shareholders was Rs. 27,96,300/- (31 st March 2013 : Rs. 27,96,300/-).

2 RELATED PARTY DISCLOSURES

As per Accounting Standard 18, the disclosures of transections with the related parties are given below:

List of related parties where control exists and related parties with whom transactions have taken place and relationship

Name of the Related Party Relationship

Vishwanath Harlalka Key Managerial Personal

Deepak Harlalka Key Managerial Personal

Gini Tex Private Limited Associates

Shree Enterprises Partner

Gini Construction Co. Partner

Gini Constructions Pvt Ltd Associates

Gini Citicorp Reality LLP Partner

3 CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS Contingent Liability Not Provided For In Respect Of Central Excise duty Demand of Rs. 215,820 /-for Interest and Penalty on differential amount of Excise duty [The Company has gone in appeal to the Commissioner (Appeal)] ( Previous year Rs. 215,820/-)

Liability if any, arising on account of an undertaking given by the company to Excise authorities on account of purchase of land & building from GINI TEX PVT LTD. Of which amount cannot be ascertained.

Commissioner of Central Excise, Thane II has demanded of Rs. 3, 38,418/-on Deemed Credit. The Company has deposited Rs. 1,00,000/- ( Previous year Rs. 1,00,000/-)to Asst. Registrar the Customs Excise Service Tax Applellate Tribunal W.Z.B. ( Previous year Rs. 3,38,418/-)

Textile Committee has demanded Rs. 2,99,150/- on collection of Cess under the Textile Committee Act & Cess Rules Reg. ( Previous year Rs. 2,99,150/-)

Central Excise duty demand for Rs. 1,85,09,688/- for excise duty and interest on differential amount on excise duty ( The Central Excise Department has made Special Leave Petition in Supreme Court).( Previous YearRs. 1,85,09,688/-)

Bank Gurantees of Rs. 1,75,000/- given to the commissioner of custom on account of bond for availing duty exemption under EPCG scheme Bank Guarantee of Rs. 200,000/- given to the Maharashtra Pollution Control Board

4 Previous year''s fgures have been regrouped/ reclassifed wherever necessary to correspond with the current year''s classifcation/ disclosure.

5 Balances of Trade Receivables, Loans and advances and Trade Payables, Advances from Customers and to Suppliers have been taken as per books awaiting respective confrmation and Reconciliation.

6 There are no dues to Micro & Small Enterprises as on 31st March'' 2014. This information as required to be disclosed under the Micro, Small & Medium Enterprise Development Act,2006 has been determined to the extent such parties have been identifed on the basis of information available with the Company.

7 The company is in process of appointing the Company Secretary, however during the year under audit the company unable to appoint the same.

8 Income Tax assessment is completed up to the Assessment year 2011- 2012.

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Mar 31, 2013

CORPORATE INFORMATION

Gini Silk Mills Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1 Its shares are listed on Bombay Stock Exchange Limited, Mumbai. The company is engaged in the manufacturing and sellii shirting and suiting with reputed brand name "GINI",

1 CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS Contingent Liability Not Provided For In Respect Of

Central Excise duty Demand of Rs.. 215,820 /-for Interest and Penalty on differential amount of Excise duty [The Company has gone in appeal to the Commissioner (Appeal)] ( Previous year Rs.. 215,820/-)

Liability if any, arising on account of an undertaking given by the Company to Excise authorities on account of purchase of land & building from GINI TEX PRIVATE LIMITED of which amount cannot be ascertained.

Commissioner of .Central Excise, Thane II has demanded of Rs.. 3,38,418/-on Deemed Credit. The Company has deposited Rs.. 1,00,000/- ( Previous year Rs.. 1,00,000/-) to Asst. Registrar the Customs Excise Service Tax Applellate Tribunal W.Z.B. (Previous yearRs.. 3,38,418/-)

Textile Committee has demanded Rs.. 2,99,150/- on collection of Cess under the Textile Committee Act & Cess Rules Reg. (Previous year Rs.. 2,99,150/-)

Central Excise duty demand for Rs.. 1,85,09,688/- for excise duty and interest on differential amount on excise duty ( The Central Excise Department has made Special Leave Petition in Supreme Court).( Previous YearRs. 1,85,09,688/-) Bank Gurantees of Rs. 1,75,000/- given to the commissioner of custom on account of bond for availing duty exemption under EPCG scheme

Bank Guarantee of Rs. 200,000/- given to the Maharashtra Pollution Control Board

2 Estimated amount of contracts remaining to be executed on capital account and not provided for Tangible assets

3 Previous year''s figures have been regrouped/ reclassified wherever necessary to correspond with the current year''s classification/ disclosure.

4 Balances of Trade Receivables, Loans and advances and Trade Payables, Advances from Customers and to Suppliers have been taken as per books awaiting respective confirmation and Reconciliation.

5 There are no dues to Micro & Smail Enterprises as on 31st March'' 2013. This information as required to be disclosed under the Micro, Small & Medium Enterprise Development Act,2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

6 The company is in process of appointing the Company Secretary, however during the year under audit the company unable to appoint the same

7 Income Tax assessment is completed up to the Assessment year 2011 - 2012

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Mar 31, 2012

CORPORATE INFORMATION

Gini Silk Mills Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange Limited, Mumbai. The company is engaged in the manufacturing and selling of shirting and suiting fabrics with reputed brand name "GINI".

a) Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs 10 per shares. Each holder of equity shares is entitled to one vote per shares. The Company declares and pay dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31 March 2012, the amount of per share dividend recognized as distribution of equity shareholders wasRs27,96,300/-(31 st March 2011 41,94,450/-).

# The Company had entered in to partnership with Gini Construction Co for development and construction of residential building. The share of profit / loss of each partner are Gini Silk Mills Limited is 9%, Gini Tex Private Limited is 9%, Shree Gini Texturising Private Limited 2%, Shri Vrhwanath S. Harlalka 15%, Shrj Deepak V. Harlalka 15%, Shri Gautam Vinod Harlalka 20%, Shri Manish Vinod Harlalka 20% and Shri Vinod S. Harlalka 10%. The fixed capital of the partnership firm is Rs NIL

# Commissioner of Central Excise, Thane Ii has demanded of Rs 3, 38,418/- on Deemed Credit. The Company has deposited Rs 1,00,000/- ( Previous year Rs 1,00,000/-)to Asst. Registrar the Customs Excise Service Tax Appellate Tribunal W.Z.B. (Previous yearRs 3,38,418/-)

Defined Benefit Plan

The employees' gratuity fund scheme managed by a Trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity.

2 CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS

Contingent Liability Not Provided For In Respect Of

Central Excise duty Demand of Rs 215,820 /-for Interest and Penalty on differential amount of Excise duty [The Company has gone in appeal to the Commissioner (Appeal)] ( Previous year Rs 215,820/-)

Liability if any, arising on account of an undertaking given by the company to Excise authorities on account of purchase of land & building from GINI TEX PVT LTD. Of which amount cannot be ascertained.

Commissioner of Central Excise, Thane II has demanded of Rs 3, 38,418/- on Deemed Credit. The Company has deposited Rs 1,00,000/- ( Previous year Rs 1,00,000/-)to Asst. Registrar the Customs Excise Service Tax Applellate Tribunal W.Z.B. (Previous year Rs 3,38,418/-) .

Textile Committee has demanded Rs 2,99,150/- on collection of Cess under the Textile Committee Act & Cess Rules Reg. ( Previous yearRs 2,99,150/-)

3 The Revised Schedule VI has become effective from 1 April, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped/ reclassified wherever necessary to correspond with the current year's classification/ disclosure.

4 Balances of Sundry Debtors, Loans and advances and Sundry creditors have been taken as per books awaiting respective confirmation and Reconciliation.

5 There are no dues to Micro & Small Enterprises as on 31st March' 2012. This information as required to be disclosed under the Micro, Small & Medium Enterprise Development Act,2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

6 The company is in process of appointing the Company Secretary, however during the year under audit the company ' unable to appoint the same

7 Income Tax assessment is completed up to the Assessment year 2009 - 2010

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Mar 31, 2011

1) CONTINGENT LIABILITY NOT PROVIDED FOR IN RESPECT OF

i) Central Excise duty Demand of Rs. 215,820 /-for Interest and Penalty on differential amount of Excise duty. [The Company has gone in appeal to the Commissioner (Appeal)] (Previous year Rs. 215,820/-)

ii) Liability if any, arising on account of an undertaking given by the company to Excise authorities on account of purchase of land & building from GINI TEX PVT LTD. Of which amount cannot be ascertained.

iii)Commissioner of Central Excise, Thane II has demanded of Rs. 3, 38,418/- on Deemed Credit. The Company has deposited Rs. 1,00,000/- (Previous year Rs. 1,00,000/-)to Asst. Registrar the Customs Excise Service Tax Applellate Tribunal W.Z.B. (Previous year Rs. 3,38,418/-)

iv) Textile Committee has demanded Rs. 2,99,150/- on collection of Cess under the Textile Committee Act & Cess Rules Reg. (Previous year Rs. 2,99,150/-)

v) Central Excise duty demand for Rs. 1,85,09,688/- for excise duty and interest on differential amount on excise duty (The Central Excise Department has made Special Leave Petition in Supreme Court). (Previous YearRs. 1,85,09,688/-)

2) SUNDRY DEBTORS AND LOANS & ADVANCES INCLUDES DEBTS DUE FROM

i) FIRMS IN WHICH DIRECTORS ARE INTERESTED

Shree Enterprises (Nil) (Previous Year Rs. 54,549/-)(Maximum balance outstanding on any day during the year Rs? 16,69,133/- (Previous Year Rs. 20,51,320/-)

ii) COMPANIES UNDER THE SAME MANAGEMENT

Gini Tex Private Limited. (Rs. Nil) ( Previous Year Rs. Nil )(Maximum balance outstanding on any day during the year ? 3,538,395/-) (Previous YearRs. 1,33,38,802/-)

Gini Constructions Co Private Limited. On Account of Share Application Money (? Nil) (Previous Year ? Nil) (Maximum balance outstanding on any day during the year Rs. 87,00,000/-) (Previous Year Rs. 2,25,50,128/-)

4) As per Accounting Standard 15 "Employee Benefits", the disclosures of Employee benefits as defined in the Accounting Standard are given below: Defined Contribution Plan Contribution to Defined Contribution Plan, recognized as expense for the year are as under:

Defined Benefit Plan

The Eployees' gratuity fund scheme managed by a Trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity.

Principal actuarial assumptions at the Balance Sheet date are as follows:

Mortality Table (LIC) 1994-96

Discount rate per annum 8.00%

Withdrawal rate 1% to 3% depending on age

Retirement age 58 years

The rate of escalation in salary considered in actuarial calculation is estimated taking into account inflation, seniority, promotion and other relevant factors.

* Previous year figure. Note : Related party relationship is as identified by the Company & relied upon by the Auditors

6) The Company had entered in to partnership with Gini Construction Co for development and construction of residential building. The share of profit / loss of each partner are Gini Silk Mills Limited is 9%, Gini Tex Private Limited is 9%, Shree Gini Texturising Private Limited 2%, Shri Vishwanath S. Harlalka 15%, Shri Deepak V. Harlalka 15%, Shri Gautam Vinod Harlalka 20%, Shri Manish Vinod Harlalka 20% and Shri Vinod S. Harlalka 10%. The fixed capital of the partnership firm is Rs. NIL

The Company's share in the profit / loss of the partnership firm, Gini Construction Co. Of Rs. 75 lacs is accounted as per the unaudited accounts of the Partnership firm.

7) The Company had entered in to partnership with Gini Citicorp Realty LLP for development and construction of residential building. The share of profit / loss of each partner are Gini Silk Mills Limited is 1%, Gini Tex Private Limited is 1%, Shri Vishwanath S. Harlalka 16%, Shri Deepak V. Harlalka 16%, Shri Pranav Deepak Harlalalka 16%, Shri Gautam Vinod Harlalka 20%, Shri Manish Vinod Harlalka 20% and Shri Vinod S. Harlalka 10%. The fixed capital of the partnership firm is Rs. NIL

8) In compliance with Accounting Standard 20 '"EARNING PER SHARE" issued by the Institute of Chartered Accountants of India, basic earning per share has been calculated by dividing net profit after tax and prior period Adjustments with the weighted average number of Equity Shares outstanding during the year as per details given below:

10) The Company has taken Group/Master insurance Policy with Life Insurance Corporation of India for the future payments of retiring employee's gratuities. The premium thereon has been so adjusted as to cover the liability under scheme in respect of eligible employees at the end of their future anticipated service with the company.

11) Balances of Sundry Debtors, Loans and advances and Sundry creditors have been taken as per books awaiting respective confirmation and Reconciliation,

12) There are no dues to Micro & Small Enterprises as on 31st March' 2011. This information as required to be disclosed under the Micro, Small & Medium Enterprise Development Act,2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

13) The company is in process of appointing the Company Secretary, however during the year under audit the company unable to appoint the same

14) Income Tax assessment is completed up to the Assessment year 2008 - 2009.

15) ADDITIONAL INFORMATION REQUIRED TO BE FURNISHED PURSUANT TO PARA 3 & 4 (c) & (d) OF THE PART II OF SCHEDULE VI OF THE COMPANIES ACT, 1956.

16) Other additional information required to be furnished under Part II of Schedule VI are either NIL or NOT APPLICABLE

17) Previous year figures have been reworked, reclassified, regrouped / re-arranged, wherever necessary.

18) Figures have been rounded off to the nearest rupee.

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Mar 31, 2010

1) CONTINGENT LIABILITY NOT PROVIDED FOR IN RESPECT OF

i) Central Excise duty Demand of Rs. 215,820 /-for Interest and Penalty on differential amount of Excise duty [The Company has gone in appeal to the Commissioner (Appeal)] (Previous year Rs. 215,820/-)

ii) Liability if any, arising on account of an undertaking given by the company to Excise authorities on account of purchase of land & building from GINI TEX PVT LTD. Of which amount cannot be ascertained.

iii) Commissioner of Central Excise, Thane II has demand of Rs. 3,38,418/- on Deemed Credit. The Company has deposited Rs. 1,00,000/- (Previous year Rs. 1,00,000/-)to Asst. Registrar the Customs Excise Service Tax Applellate Tribunal W.Z.B. (Previous year Rs. 3,38,418/-)

iv) Textile Committee has demanded Rs. 2,99,150/- on collection of Cess under the Textile Committee Act & Cess Rules Reg. (Previous year Rs. 2,99,150/-)

v) Central Excise duty demand forRs.1,85,09,688/- for excise duty and interest on differential amount on excise duty (The Central Excise Department has made Special Leave Petition in Supreme Court). (Previous yearRs Nil/-)

2) The Company had entered in to partnership with Gini Construction Co for development and construction of residential building. The share of profit / loss of each partner are Gini Silk Mills Limited is 9%, Gini Tex Private Limited is 9%, Shree Gini Texturising Private Limited 2%, Shri Vishwanath S. Harlalka 15%, Shri Deepak V. Harlalka 15%, Shri Gautam Vinod Harlalka 20%, Shri Manish Vinod Harlalka 20% and Shri Vinod S. Harlalka 10%. The fixed capital of the partnership firm is Rs. NIL

3) The Company has taken Group/Master insurance Policy with Life Insurance Corporation of India for the future payments of retiring employees gratuities. The premium thereon has been so adjusted as to cover the liability under scheme in respect of eligible employees at the end of their future anticipated service with the company.

4) Balances of Sundry Debtors, Loans and advances and Sundry creditors have been taken as per books awaiting respective confirmation and Reconciliation.

5) There are no dues to Micro & Small Enterprises as on 31 st March 2010. This information as required to be disclosed under the Micro, Small & Medium Enterprise Development Act,2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

6) Other additional information required to be furnished under Part II of Schedule VI are either NIL or NOT APPLICABLE

7) Previous year figures have been reworked, reclassified, regrouped / re-arranged, wherever necessary.

8) Figures have been rounded off to the nearest rupee.