You've got it. In this case, the pinky is used because the D on second string is fretted with the ring finger (which should remain there
while the G notes are played).
Generally in guitar notation left hand fingering and use of strings is indicated with numbers; numbers in circles mean strings.
Frets (for barré and positions) are usually indicated by Roman numerals.
Maybe you should use another guitar method book which explains the theory somewhat more detailed than Sagreras.
I'd recommend Pascual Roch's books, available here:
http://www.guitareclassiquedelcamp.com/ ... itare.html