1.  The Company was incorporated under the Companies Act, 1956 under
 the name of ANS Textiles (Bangalore) Limited on March 27, 2006.  The
 name was changed to Gokak Textiles Limited, with effect from 23rd
 January 2007. As per the scheme of arrangement under the Companies Act,
 1956 the Textile Division of erstwhile Forbes Gokak Limited (now known
 as Forbes & Company Limited) was transferred to Gokak Textiles Limited
 with effect from April 1, 2007. The company is in the business of
 textile, manufacturing cotton yarn, blended yarn, industrial fabrics,
 terry towels, t-shirts, polos, undergarments, sweaters, etc
 
 2.  Contingent Liabilities not provided for:
 
 Sr. 
 No.  Particulars                    Current Year       Previous Year
                                     Rs.                Rs.
 
 (A) Bills discounted                39,154,395         124,123,870
 
 (B) Guarantees issued by bank          405,100             905,100
 Corporate Guarantee to
 Export Import Bank of India
 (on behalf of P.T.Gokak 
 Indonesia) $ 31,00,000                       –         141,329,000
 
 Corporate Guarantee to Other           129,472             129,472
 
 (C) Taxes in dispute :- 
 
 Entry Tax/Special Entry tax         14,458,194          14,458,194 
 
 Income tax matters                     300,912             300,912 
 
 Excise Demands                     116,916,657         105,879,080
 
 (D) Labour Matters in Dispute        1,388,148           1,254,070
 
 (E) Bonds given by Company in 
 favour of Customs Authorities      438,121,857         478,320,561
 
 (F) Other Demands Contested 
 by the Company
 
 Creditors Claim                         71,471              71,471
 
 Electricity Duty                       955,893           1,037,149
 
 3.  Estimated amount of contracts remaining to be executed on capital
 account and not provided Rs.4,302,584 (net of Advances Rs.2,631,654);
 [Previous Year Rs. 13,347,453 (net of advances Rs. 91,951,921)]
 
 4.  Due to Micro, Small and Medium enterprise:
 
 Under the Micro, Small and Medium Enterprises Development Act, 2006,
 which came into force on October 2, 2006, the company is required to
 make certain disclosures relating to Micro, Small and Medium
 Enterprises. The Company is in the process of compiling and
 assimilating the relevant information from its suppliers about their
 coverage under the Act. Since the relevant information is not readily
 available, no disclosures have been made in the Accounts.
 
 5.  The Company incurred the following expenditure on research and
 development, which has been certified by the Management.
 
 a.  On Fixed Assets Rs. Nil (Previous Year Rs Nil)
 
 b.  On items which have been expensed out during the year Rs. 8,176,006
 (Previous Year Rs. 6,966,804)
 
 6.  The amount of exchange differences included in the Profit and Loss
 Account is a Net Expenses of Rs. 2,778,264/- (Previous year Net Income
 of Rs.4,785,230/-).
 
 7.  During the year no amounts has been remitted in foreign currencies
 on account of dividends during the year.
 
 8. There are no outstanding Forward Exchange Contracts entered into by
 the Company as on March 31, 2011. The Company has not entered into
 Interest Rate Swaps and Currency Swaps as at the year end March 31,
 2011.
 
 9.  Segment:
 
 The Company operates one segment only, namely Textiles. Sales in
 different geographical segments are subject to same risk and reward
 relationship. Accordingly, in the opinion of the management the
 information relating to the segment reporting as set out under
 Accounting Standard 17 is not applicable.
 
 10.  Related Party Disclosures:
 
 a.  Name of Related Party and description of related party
 
 i.  Holding Company / Ultimate Holding Company
 
 Shapoorji Pallonji & Company Limited (Ultimate Holding Company)
 
 Sterling Investment Corporation Private Limited (Holding Company)
 
 ii.  Fellow Subsidiaries
 
 Forbes & Company Limited
 
 Forbes Doris & Naess Maritime Limited
 
 Forbes Technosys Limited
 
 Volkart Fleming Shipping & Services Limited
 
 Eureka Forbes Ltd.
 
 Forval International Services Ltd
 
 iii.  Key Management Personal
 
 Mr. H. S. Bhaskar – Whole Time Director.
 
 c The Company sold its investment in equity shares of P.T. Gokak
 Indonesia, where it held 22% stake, to Shapoorji Pallonji & Company
 Limited (the Ultimate Holding Company) for an amount of US$ 1,801,250/-
 which is agreed to be equivalent to INR 84,658,750/-.
 
 11.  Employee Benefits:
 
 Defined Contribution Plan:
 
 The company offers its employees defined contribution plan in the form
 of provident fund and superannuation fund. Provident fund covers
 substantially all regular employees whereas the superannuation fund
 covers only certain Managers, Supervisors and Clericals. The Company
 has contributed a total amount of Rs.45,028,287 /- (Previous Year Rs.
 32,188,455/-) towards said funds during the current year.
 
 12.  In accordance with the Accounting Standard (AS-28 on impairment of
 assets, the Company has assessed as on the balance sheet date, whether
 there are any indications (listed in paragraphs 8 to 10 of the
 standard) with regards to the impairment of any assets. Based on such
 assessment it has been ascertained that no potential loss is present
 and therefore, formal estimate of recoverable amount has not been made.
 Accordingly, no impairment loss has been provided in the books of
 accounts.
 
 13.  In accordance with Accounting Standard 16 - Borrowing Costs; the
 Company has capitalised a total amount of Rs. 4,250,489/- during the
 year (Previous Year Rs.12,593,810/-) under Fixed Assets; towards
 borrowing costs of the Monsoon Spillway Project.
 
 14.  Interest on Fixed Loans amounting to Rs. 87,884,647/- (Previous
 Year Rs. 81,385,625/-) are net off Interest Subsidy amounting to Rs.
 38,305,057/- (Previous Year Rs.47,282,853/-).
 
 15.  Previous years'' figures have been regrouped and rearranged
 wherever necessary.