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Public Announcement

To the Shareholders of Gini Silk Mills Limited

(Reg. Off: Chamber Bhavan, 3^rd Floor, 232/34 Kalbadevi Road, Mumbai 400002)

This Public Announcement (PA) is being issued by Anand Rathi Securities Private Limited, (hereinafter referred to as the "Manager to the Offer") on behalf of Mr. Vishwanath Harlalka and Mr. Deepak Harlalka, pursuant to Regulation 11(1) and in compliance with the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and subsequent amendments thereto (hereinafter referred to as "SEBI (SAST) Regulations").

The Offer

The Offer is being made by Mr. Vishwanath Harlalka, and Mr. Deepak Harlalka (hereinafter referred to collectively as "the Acquirers") along with Persons Acting in Concert (PACs) named below, to the equity share holders of Gini Silk Mills Limited (hereinafter referred to as "the Target Company") to acquire upto 16,10,100 equity shares of Rs. 10/- each, representing 28.21% of the equity share capital at a price of Rs. 12/- (Rupees Twelve only) per share (the "Offer price"), payable in cash, subject to terms and conditions mentioned hereinafter ("The Offer"). Out of the total issued equity share capital of the Target Company, an amount of Rs.3,51,993 is due to the company as calls in arrears on 1,20,100 shares. The paid up value of these shares is Rs.8,49,007/-. The Offer price with regard to shares having calls in arrears, will be reduced by the amount in arrears plus interest thereon.

The details of the Acquirers and Persons Acting in Concert (PACs) is as below:

Name	Relation with Acquirer	No of Shares	% of Total	Address
Mr. Deepak Harlalka	Acquirer	2,72,100	4.77	4-B, 6th floor, Padam 2, Pedder road, Mumbai 400026
Mr. Vishwanath Harlalka	Acquirer	11,69,900	20.49	4-B, 6th floor, Padam 2, Pedder road, Mumbai 400026
PACs
Deepak Harlalka HUF	HUF	8,63,350	15.13	4-B, 6th floor, Padam 2, Pedder road, Mumbai 400026
Vishwanath Harlalka HUF	HUF	40,000	0.70	4-B, 6th floor, Padam 2, Pedder road, Mumbai 400026
Gini Tex Limited	Director	4,32,800	7.57	Chamber Bhavan, 3^rd Floor, 232/34 Kalbadevi Road, Mumbai 400 002
Harlalka Silk Mills Limited	Director	36,250	0.64	Chamber Bhavan, 3^rd Floor, 232/34 Kalbadevi Road, Mumbai 400 002
Sewaram Harlalka Investment Pvt. Ltd.	Director	52,100	0.92	Chamber Bhavan, 3^rd Floor, 232/34 Kalbadevi Road, Mumbai 400 002
Gini Syntex Pvt. Ltd.	Director	50,000	0.88	Chamber Bhavan, 3^rd Floor, 232/34 Kalbadevi Road, Mumbai 400 002
Shree Gini Texturising Pvt. Ltd.	Director	50,000	0.88	9 Rasik Niwas, 75 �F� Road, Marine Drive, Mumbai 400020
Mr. Anil R. Chokhani	Relative	43,800	0.76	Nemani wadi 3^rd floor, Thakurdwar, Mumbai 400004
Ms. Manju Sonthalia	Relative	10,000	0.18	Golf Links no1, Flat no4, Union Park Road, no 5, Khar, Mumbai 400052
Mr. Pranav Deepak Harlalka (Minor)	Relative	2,02,400	3.54	4-B, 6th floor, Padam 2, Pedder road, Mumbai 400026
Ms. Vandana Sonthalia	Relative	8,000	0.14	Golf Links no1, Flat no4, Union Park Road, no 5, Khar, Mumbai 400052
Ms. Vrinda Sonthalia	Relative	8,000	0.14	Golf Links no1, Flat no4, Union Park Road, no 5, Khar, Mumbai 400052
Ms. Anjali D. Harlalka	Relative	3,10,900	5.46	4-B, 6th floor, Padam 2, Pedder road, Mumbai 400026
Ms. Vimla Harlalka	Relative	5,08,500	8.91	4-B, 6th floor, Padam 2, Pedder road, Mumbai 400026
Mr. Rajendra Kumar Rajgarhia	Relative	39,500	0.69	W-13, Greater kailash, Part II, New Delhi 110048
Total		40,97,600	71.79

The Offer is not subject to any minimum level of acceptance.
The shares of the Target Company are listed on The Stock Exchange, Mumbai and The Stock Exchange, Ahmedabad. The equity shares are infrequently traded on both the stock exchanges within the meaning of Regulation 20 of the SEBI (SAST) Regulations. The Offer Price of Rs.12/- per fully paid up equity share of the Target Company is determined in terms of Regulation 20(3) of SEBI (SAST) Regulations considering the following factors: There has been only one transaction for purchase of shares by the Acquirers/PACs in the last 12 months at a price of Rs. 10/-. The other parameters as per the audited financial results for the year ended 31^st March, 2002 (considering total shares, including those with calls in arrears) are as follows: the Return on Networth is 16.94%, Book Value per equity share is Rs.15.94, Earning Per Share is Rs. 2.70, Price Earning Multiple (based on the Offer price) is 4.45 vis-a-vis the industry P/E multiple of 2.9 (source: Capital Markets Vol XVII/13 - September 15, 2002, Industry: Textiles- Processing). Considering the aforesaid parameters, the Offer price of Rs.12/- per fully paid up equity share is justified in terms of Regulation 20 of the SEBI (SAST) Regulations.

Information about the Acquirers and Person acting in concert with him

Mr. Vishwanath Harlalka, son of Mr. Sewaram B. Harlalka, aged 61 years, has an experience of around four decades in the textile industry. He is the promoter of Gini Silk Mills Ltd. and is also on the board of GiniTex Limited, Harlalka Silk Mills Limited, Gini Syntex Pvt. Limited and Shree Gini Texturising Pvt. Limited
Mr. Deepak Harlalka, son of Mr. Vishwanath S. Harlalka, aged 38 years, has an experience of around fifteen years in the textile industry. He is the Managing Director of Gini Silk Mills Ltd. and is also on the board of GiniTex Limited, Harlalka Silk Mills Limited, Sewaram Harlalka Investment Pvt. Limited, Gini Syntex Pvt. Limited and Shree Gini Texturising Pvt. Limited
The net worth as on 31^st March, 2002 of Mr. Vishwanath Harlalka and Mr. Deepak Harlalka is Rs. 255.58 lacs and Rs. 190.83 lacs respectively as certified by Mr. A. R. Salgia, (Membership No. 40565) proprietor of M/s Salgia & Co., Chartered Accountants, having office at 3, Suresh Sadan, Daulat Nagar, Road No. 4, Borivali (East) Mumbai 400066, Tel: 8918689, vide certificates dated September 4, 2002
The address and relationship of the Acquirers and PACs are given in the table above under the head, �The Offer�, point No. 2.

Information about the Target Company

Gini Silk Mills Limited, having its Registered Office at Chamber Bhavan, 3^rd Floor, 232/34 Kalbadevi road, Mumbai 400 002, was incorporated on 3^rd April, 1981. The company is in the textile industry with the main business of dyeing, bleaching and printing of synthetic fabrics, polyester cotton fabrics, synthetic woven fabric and texturise yarn. The name of the company has not been changed since listing.
The issued, subscribed and called up equity share capital of the Target Company as on the date of this Public Announcement is Rs.5,70,77,000/- divided into 57,07,700 equity shares of Rs.10/- each. Out of the above, an amount of Rs. 3,51,993/- is due to the company as calls in arrears on 1,20,100 shares. The paid up value of these shares is Rs. 8,49,007/-. The company has already issued the first notice for forfeiture of the said shares on 3^rd August, 2002 and a second notice on 3^rd September, 2002. The Offer price with regard to shares having calls in arrears will be reduced by the amount in arrears plus interest thereon.
The equity shares of the Target Company are listed on The Stock Exchange, Mumbai, and the Stock Exchange, Ahmedabad.
Based on the latest available audited accounts, total income for the year ended 31^st March 2002 was Rs. 2858.52 lacs, and profit after tax was Rs. 154.08 lacs. As on 31^st March 2002, the equity share capital was Rs. 567.25 lacs and reserves and surplus was Rs. 342.50.

Reasons for the Offer and Future Plans

The Acquirers are making an Offer to the shareholders of Gini Silk Mills Limited for consolidation of their holdings and is made in accordance with Regulation 11(1) of the SEBI (SAST) Regulations.
The Acquirers do not intend to make any major change to the existing line of business of the company, nor do they intend to dispose off or otherwise encumber any significant assets of the Target Company in two years from the date of closure of the Offer, except in the ordinary course of business. However, re-organisation and/or streamlining of business, including diversification, may be considered in the larger interest of the Target Company by its board of directors in accordance with the applicable laws, rules and regulations.

Statutory Approvals required for the Offer

The Offer is subject to the approval(s), if any of the Reserve Bank of India(RBI), under the Foreign Exchange Management Act, 1999, for acquiring shares tendered by non-resident shareholders including NRIs/FIIs, and OCBs.
As on the date of this Public Announcement, to the best of knowledge of the Acquirers, there are no other statutory approvals and/or consents required. However, the Offer would be subject to all such statutory approvals as may be required and/or may subsequently become necessary to acquire at any later date.
The Acquirers shall complete all procedures relating to the Offer within a period of 30 days from the closure of the Offer. In terms of Regulation 22(12) of the SEBI (SAST) Regulations, in the case of delay in receipt of statutory approvals, SEBI has the power to grant extension of time for the purpose of making payment subject to the Acquirers agreeing to pay interest for the delayed period to the shareholders as directed by SEBI. Further, if the delay occurs on account of willful default by the Acquirers in obtaining the requisite approvals, Regulation 22(13) of SEBI (SAST) Regulations will also become applicable.
No approval is required to be obtained from banks/ financial institutions for the Offer.

Delisting Option

If pursuant to this Offer and/or acquisition of shares from the open market or through negotiation or otherwise, the public shareholding falls to 10% or below of the outstanding paid up equity share capital of the Target Company, then in accordance with SEBI (SAST) Regulations, the Acquirers will make a subsequent Offer to buy out the remaining outstanding equity shares held by the public shareholders within three months from the closure of the Offer at the Offer Price, in terms of Regulation 21(3) of SEBI (SAST) Regulations and the subsequent Offer would remain open for six months. The payment to such shareholders will be made immediately upon acceptance of their shares by the Acquirers.
Consequent to the public shareholding falling below 10%, the Acquirers will request the Target Company to approach the Stock Exchanges, where the shares are listed, for delisting the shares.

Financial Arrangements

The total requirement of funds (assuming full acceptance) for the acquisition of 16,10,100 equity shares of the Target Company at a price of Rs. 12/- per share would amount to Rs. 1,93,21,200 /-(Rupees One Crore, Ninty Three lacs, Twenty one Thousand, Two hundred only).
The Acquirers have made firm arrangements for financing the acquisition of equity shares under the Public Offer in full. For this purpose, the Acquirers intend to utilize their internal financial resources. As certified by Mr. A. R. Salgia, (Membership No. 40565) proprietor of M/s Salgia & Co., Chartered Accountants, having office at 3, Suresh Sadan, Daulat Nagar, Road No. 4, Borivali (East) Mumbai 400066, Tel: 8918689, vide certificates dated September 6, 2002, the Acquirers have adequate resources to meet the financial requirements of the Offer. The Manager to the Offer is satisfied about the ability of the Acquirers to implement the Offer in accordance with the SEBI (SAST) Regulations.
In accordance with Regulation 28 of the SEBI (SAST) Regulations, the Acquirers have created an escrow account with UTI Bank, Fort branch, in the form of a cash deposit of Rs. 48,50,000/- (Rupees Forty eight Lacs fifty thousand only) being more than 25% of the total consideration payable under the Public Offer, with a lien marked in favour of the Manager to the Offer.
The Manager to the Offer has been duly authorised by the Acquirers to realise the value of the escrow arrangement in terms of the SEBI (SAST) Regulations.

Other Terms of the Offer

The Offer is not subject to any minimum level of acceptance.

The Letter of Offer together with Form of Acceptance cum Acknowledgement will be mailed to all the shareholders of the Target Company (except the Acquirers and the PACs), whose names appear in the Register of Members of the Target Company and the beneficial owners of the shares of the Target Company whose names appear on the beneficial records of the respective Depositories, at the close of business on September 16, 2002 ("the specified date").

All share holders (except the Acquirers and the Persons Acting in Concert with the Acquirers), who own the shares of the Target company anytime before the closure of the Offer are eligible to participate in the Offer.

The shareholders, who wish to tender their shares, will be required to send the Form of Acceptance cum Acknowledgement, original share certificate(s) and transfer deed(s)/Advice(s) duly signed to the Registrar to the Offer at the address mentioned below either by hand delivery or by Registered Post on or before the close of the Offer i.e. November 27, 2002, in accordance with the instructions contained in the Letter of Offer and in the Form of Acceptance cum Acknowledgement.

The Registrar to the Offer, has opened a special depository account with Navratan Capital and Securities Private Limited, styled "Bigshare-Escrow Account �Gini Open Offer" with DP ID IN301803 and Beneficiary ID number 10012516.

The Shareholders (registered and unregistered), who do not receive the Letter of Offer, can send their application in writing so as to reach the Registrar to the Offer on or before the close of the Offer i.e. November 27, 2002 on a plain paper stating the name, address, number of shares held, distinctive numbers, folio number, number of shares offered along with the original share certificate(s), duly signed transfer deed(s) and in case of unregistered shareholders also the original contract note issued by the broker through whom the shares were acquired.

Beneficial owners (holders of shares in dematerialised form) who wish to tender their shares will be required to send their Form of Acceptance cum Acknowledgement along with a photocopy of the delivery instructions in "off market" mode or counterfoil of the delivery instruction in "off market" mode, duly acknowledged by the Depository Participant (DP), in favour of the special depository account, to the Registrar to the Offer either by hand delivery or by Registered Post, and ensure the credit of their shares in favour of the depository account on or before the close of the Offer, i.e. November 27, 2002, in accordance with the instructions to be specified in the Letter of Offer and in the Form of Acceptance cum Acknowledgement.

No indemnity is required from the unregistered owners.
The letter of Offer along with form of Acceptance cum Acknowledgement will be available on SEBI's website http://www.sebi.gov.in/ and can be downloaded and used as an application.
The Registrar to the Offer will hold in trust the share certificates/shares lying in credit of the special depository account, Form of Acceptance cum Acknowledgement, if any, and transfer form(s) on behalf of the shareholders of the Target Company who have accepted the Offer, till the cheques/drafts for the consideration and/or the unaccepted shares/share certificates are dispatched/returned.
The consideration for shares accepted by the Acquirers will be paid by crossed account payee cheques/demand drafts. In case of unaccepted shares, such documents will be returned by registered post at the shareholders/unregistered owners sole risk to the sole/first holder. The shares held in demat form to the extent not accepted will be credited back to the beneficial owners� depository account with the respective depository participant as per the details furnished by the beneficial owner in the Form of Acceptance cum Acknowledgement.
A schedule of some of the major activities for the Offer is given below:

Activity

Day & Date

Specified Date

16^th September 2002, Monday

Letter of Offer to be posted to shareholders

23^rd October 2002, Wednesday

Date of Opening of the Offer

28^th October 2002, Monday

Date of Closing of the Offer

27^th November 2002, Wednesday

Last date of Competitive bid

3^rd October, 2002, Thursday

Last date of revising the Offer price/ number of shares

15^th November, 2002, Friday

Date of communicating rejection/ acceptance and payment of consideration for applications accepted.

26^th December, 2002, Thursday

General

Shareholders who have accepted the Offer by tendering the requisite documents in terms of the Public Announcement/ Letter of Offer, cannot withdraw the same.
The Acquirers retain the option of revising the Offer Price upwards up to seven working days prior to the closure of the Offer. Any revision in the Offer Price would appear in the same newspapers in which this Public Announcement appears and the revised price shall be payable to all the shareholders of the Target Company, who tender their shares under the Offer, including those who tendered their shares under this Public Announcement to the Acquirers or to the Registrar to the Offer pursuant to the Offer, prior to the revision in the Offer Price.
If there is a competitive bid

The Public Offers under all the subsisting bids shall close on the same date.

As the Offer Price cannot be revised during 7 working days prior to the closing date of the offers/bids, it would , therefore be in the interest of the shareholders to wait till the commencement of that period to know the final price of each bid and tender their acceptance accordingly.

Mr. Anil R.Chokhani (PAC) has acquired 500 shares @ Rs.10/- per share of the Target Company in the last twelve months.The Acquirers and no other PAC, other than mentioned above ,have acquired any equity shares of the Target Company in the last twelve months.

Neither the Acquirers nor the Target Company have been prohibited by SEBI from dealing in securities in terms of directions issued u/s 11B of SEBI Act.
This Public Announcement would also be available at SEBI�s website http://www.sebi.gov.in/.
Pursuant to Regulation 13 of SEBI (SAST) Regulations, the Acquirers have appointed Anand Rathi Securities Private Limited as the Manager to the Offer.
The Acquirers and the PACs accept the responsibility for the information contained in this Public Announcement and also for the obligations of the Acquirers laid down in SEBI (SAST) Regulations and subsequent amendments made thereof.