2957 09

Annual Report 2009 1
Message from the Chairman
Dear Shareholders,
I am happy to present before you the financial highlights of our company for the year 2009 and
my views on our industry.
The year started under shadow of financial meltdown and consequent economic slowdown of
the previous year that not only impacted the whole world but also India in many ways. However,
backed by fiscal stimulus initiatives from the Government, Indian economy saw a silver lining
and is back on the growth trajectory. The encouraging sign in gloom period was the resilience
shown by the Indian economy. At present, out look for India is more optimistic and confident and
it does appear that the worst is behind us.
On our part, Micro Inks has managed to come out with very good performance in a fairly challenging
environment and made highest ever consolidated profit during the year apart from managing
decent growth in domestic market. Overall it was a good year for the Company.
Consolidated revenues for the year were Rs. 16,180 million as against Rs. 16,195 million in the
previous year, in spite of 9% decline in sales of HST USA and nearly 6% decline in sales of rest
of the world (other than USA) markets. However, consolidated PAT was Rs. 968 million up 187%
as against Rs. 337 million in the previous year.
I am also happy to say that several measures initiated last year to re-engineer the business
model of our US subsidiary, have started yielding results. HST USA ended the year with a loss of
USD 3.3 million against USD 8.7 million in the previous year. Though sales were down to
USD 74.8 million against USD 89.4 million in the previous year, the bottom line improvement is
a healthy indicator.
In yet another significant development, MHM Holding GmbH, Germany, one of the Promoters
and major shareholder, under the SEBI (Delisting of Equity Shares) Regulations, 2009, offered
to acquire 25% of public shares and desired to voluntarily de-list the Company from all stock
exchanges. The said offer was successful and thereby the shares of the Company will cease to
be traded from April 6, 2010.
In conclusion, I would heartily thank the Board, the Management and especially our vibrant team
of employees for their consistent support and commitment to Micro Inks. India is an important
market in the global strategy of the hubergroup and Micro Inks remains committed as ever to
leverage its strengths and continue its efforts to achieve profitable growth.
Sincerely,
Anjum Bilakhia
2 Micro Inks Limited
Index Page No.
1. Board and other Particulars 3
2. Directors' Report 4
3. Report on Corporate Governance 10
4. Auditors' Report 21
5. Financial Statements 24
6. Balance Sheet Abstract 49
7. Management Discussion and Analysis Report 50
8. Financial Highlights 56
9. Statement Pursuant to Section 212 of the Companies Act, 1956 57
10. Auditors' Report on Consolidated Financial Statements 59
11. Consolidated Financial Statements 60

BOARD AND OTHER PARTICULARS

BOARD OF DIRECTORS Mr. Anjum Bilakhia Chairman
Mr. Ashwani Bhardwaj Managing Director
Mr. M. L. Bhakta Director *
Prof. Pradip Khandwalla Director *
Mr. Hasmukh Shah Director *
Ms. Ursula Borgmann Director
Mr. Heinrich Ringer Alternate Director to Ms. Ursula Borgmann
Mr. K. K. Unni Alternate Director to Mr. Anjum Bilakhia
* Independent, Non-Executive Directors
EXECUTIVE COMMITTEE Mr. Ashwani Bhardwaj Managing Director

Mr. Ramkrishna Kamat Director - Domestic Sales
Mr. Zainul Lakdawala Director - Research
Dr. L. N. Chaturvedi Director - Technology
Mr. Anil Jain Director - Manufacturing
Mr. Umesh Sharma Sr. Vice President - Human Resources & IT
Mr. Sundaresh Bhat Vice President & Chief Financial Officer
Mr. Aniruddha Joshi Vice President - Commercial
VICE PRESIDENT & Mr. Hitesh Parikh

COMPANY SECRETARY
AUDITORS M/s. Deloitte Haskins & Sells, Chartered Accountants
BANKERS Standard Chartered Bank Axis Bank Limited ICICI Bank Limited
Bank of India State Bank of India DBS Bank Limited
The Hongkong and Shanghai Banking Corporation Limited
REGISTERED OFFICE Bilakhia House, Muktanand Marg, Chala, Vapi - 396191. Gujarat. India.
WORKS Plot No. 2803/2, Survey No. 137/1, Survey No. 11 & 13,
III Phase, GIDC, Jani Vankad, Village Morkhal,
Vapi - 396 195. Gujarat. Daman - 396 210. Silvassa - 396 230.
India. (U.T. of Daman & Diu). (U.T. of Dadra &
India. Nagar Haveli).
India.
Plot No. 808/E, 305/6, 305/7 Survey No. 8/1/2/P, 9/P,
(100% Export Oriented Unit) 10/3, 10/4, 10/5, 8/2
II Phase, GIDC, Village Morkhal, Unit II,
Vapi - 396 195. Gujarat. Silvassa - 396 230.
India. (U.T. of Dadra &
Nagar Haveli).
India.
REGISTRAR AND Link Intime India Private Limited

SHARE TRANSFER AGENT C-13, Pannalal Silk Mills Compound,
L.B.S. Marg, Bhandup (W),
Mumbai - 400 078.
Tel. No.: +91 22 2594 6970 Fax No.: +91 22 2594 6969
DIRECTORS’ REPORT
The Directors have pleasure in presenting the 19th Annual Report of the Company and Audited Accounts for the accounting
year ended on December 31, 2009.
Financial Highlights: (Rs. in Million)

31/12/2009 31/12/2008
Sales/Income From Operations
Domestic (Net)-Including Other Operating Income 6,857.34 6,199.47
Export 6,907.47 7,183.31
PBDIT 2,145.82 2,191.92
Provision for Taxation (Including FBT) 382.81 221.65
Deferred Tax Credit (8.82) (13.80)
PAT 1,125.49 902.85
Balance Brought Forward 1,564.27 1,086.01
Profits Available for Appropriation 2,689.76 1,988.86
Appropriations
Proposed Equity Dividend 149.23 149.23
Tax on Proposed Equity Dividend 25.36 25.36
Transfer to General Reserve 500.00 250.00
Surplus Carried to Balance Sheet 2,015.17 1,564.27
Dividend:
The Board of Directors has recommended dividend of Rs. 6/- per share (@60%), [Previous year Rs. 6/- per share
(@60%)], on 24871941 Equity Shares of Rs. 10/- each fully paid-up, aggregating to Rs. 174.59 million including Dividend
Distribution Tax of Rs. 25.36 million. The dividend for the accounting year ended December 31, 2009 will not be taxable
in the hands of the Members.
Performance Review:
Consolidated Net Sales grew only by 0.1%, due to global recession and stood at Rs. 16,138 million led by 11% growth in
domestic market but 16% (in dollar terms) decline in US market, 3% decline in Rest of the World market (excluding
USA and India) and 6% decline in revenue from hubergroup worldwide.
Domestic Sales:
The Domestic Net Sales and Other Operating Income grew by 11% at Rs. 6,857 million. Your Company continues to
maintain its leadership position in the Indian Printing Inks market due to superior products and advantage of hubergroup
superior technology.
Exports:
Consolidated International Sales stood at Rs. 9,280 million contributing 58% of total Net Sales and Other Operating Income.
The sales of US subsidiary stood at US$ 75 million for the year compared to sales of US$ 89 million of the previous year.
Company's sales to other related parties stood at Rs. 4,772 million for the year compared to Rs. 5,052 million in the
previous year and Rest of the World parties stood at Rs. 981 million for the year compared to Rs. 1,014 million in the
previous year.
Profitability:
During the year, the Company's consolidated EBIDTA stood at Rs. 2,110 million compared to Rs. 1,913 million for the
previous year. The EBIDTA was higher due to higher volumes backed by improvements in manufacturing process and
better price realisations. The Net Profit at consolidated level was Rs. 968 million compared to Net Profit of
Rs. 337 million for the previous year.
Finance:
During the year, the consolidated interest was lower by Rs. 590 million and stood at Rs. 185 million compared to
Rs. 775 million for the previous year, which includes loss of Rs. 484 million on foreign currency loans.
Overall consolidated debt decreased by Rs. 2,129 million and stood at Rs. 2,237 million as on December 31, 2009.
Sales to capital employed at 2.0 times as compared to 1.7 times in previous year and Sales to Net Working Capital
stood at 4.0 times from 3.2 times.
Strategic Investments:
The Company invested Rs. 477.71 million in Non-cumulative Redeemable Series 'A' Preferred Stock (US$ 10 million) of
Hostmann-Steinberg Inc., USA, (HST) and acquired common stocks (including Additional Paid-in Capital) (US$ 2,280/-)
of HST, from Micro Inks GmbH, Austria, a wholly owned subsidiary of the Company, during the year and thereby HST
became direct wholly owned subsidiary of the Company.
During the year, the Company divested Micro Inks GmbH, Austria, in favour of Michael Huber Austria GesmbH by transferring
entire share capital at a total consideration of EURO 17,292/- as valued by an independent firm of Chartered Accountants,
after transfer of entire common stocks (including Additional Paid-in Capital) of Hostmann-Steinberg Inc., USA, (HST) to
Micro Inks Limited.
The statement pursuant to Section 212 of the Companies Act, 1956, is annexed to this Annual Report.
Outlook:
Though there are visible signs of revival in global and Indian economy, Printing Ink related markets are not expected to
see speedy recovery. Pressure on margin because of increase in input cost and adverse forex fluctuations, which is
expected to continue during the coming period. The coming year will be a year of stabilisation and a steady recovery of
the growth momentum in several part of the world.
Consolidation of Accounts:
The audited Consolidated Accounts and Cash Flow Statements, comprising of the Company and its all Subsidiary
Companies appear in this Annual Report together with the Auditors' Report on the Consolidated Accounts. The Consolidated
Accounts have been prepared in accordance with Accounting Standard 21 prescribed by the Institute of Chartered
Accountants of India.
The Government of India, Ministry of Company Affairs, New Delhi, vide its letter No.47/608/2009-CL-III dated
November 13, 2009, has granted an exemption under Section 212 of the Companies Act, 1956, to the Company from
annexing to this Report, the Annual Reports of all the Subsidiaries of the Company for the year ended on
December 31, 2009. However, if any Member of the Company so desires, the Company will make available copies of full
accounts of the Subsidiaries of the Company.
Delisting of Equity Shares of the Company:
MHM Holding GmbH (Acquirer), One of the promoters and holding company of the Company, under the Securities and
Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 (the Regulations), made an offer to acquire
entire share capital of the Company held by the public shareholders and desired to voluntary de-list the Company from all
the stock exchanges. The said offer was successful and closed on March 5, 2010. According to the said offer and in
terms of the Regulations, a price of Rs. 640/- per equity share was arrived, which the Acquirer accepted. Since the
Promoters holding in the Company post acquisition increased to 92.5% of the paid up capital of the Company, the
Company filed an application to Bombay Stock Exchange Limited and the National Stock Exchange of India Limited to
de-list its shares for which a final approval is awaited.
Once the de-listing takes place, the Acquirer, for a period of one year from the date of the de-listing, will be required to
purchase, all the shares that may be tendered by the Public Shareholders to it, at the aforesaid exit price in accordance
with the provision of the Regulations.
Corporate Governance and Management Discussion and Analysis Reports:
As required by Clause 49 of the Listing Agreements entered into with the Stock Exchanges, a detailed report on the
Corporate Governance, along with the Certificate of the Company Secretary in Practice on its compliance is attached in
this Annual Report elsewhere. The Company is in full compliance with the requirements and disclosures that have to be
made in this regard.
The Management Discussion and Analysis Report is also appearing in this Annual Report elsewhere, and both the
aforesaid Reports are incorporated as reference herein.
Corporate Social Responsibility:
Your Company continued to contribute to society through donations and community development initiatives.
Insurance:
The Company has taken adequate insurance to cover risk to its assets, profits and standing charges as well as employees.
It has also taken cover against liability to public under Public Liability Insurance Act, 1991. The above covers have been
taken based on internal risk study.
Directors' Responsibility:
Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors confirm that to the best of their knowledge and
belief:
1. in the preparation of the annual accounts, the applicable accounting standards have been followed;
2. appropriate accounting policies have been selected and applied consistently and have made judgements and
estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company
as at December 31, 2009 and for the profit and loss account for the year ended on that date;
3. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with
the provisions of the Companies Act, 1956, for safe guarding the assets of the Company and for preventing and
detecting fraud and other irregularities; and
4. the annual accounts have been prepared on a going concern basis.
Energy, Technology & Foreign Exchange:
As required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in
the Report of the Board of Directors) Rules, 1988, the information relating to conservation of energy, technology absorption
and foreign exchange earnings and outgo is annexed.
Employees:
The Company acknowledges the commitment and contribution of all its employees to the Company's growth. Our industrial
relations continued to be excellent.
Information as per amended Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of
Employees) Rules, 1975, forms part of this Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies
Act, 1956, the Report and the Accounts are being sent to all the shareholders, excluding the statement of particulars
under Section 217(2A). Any shareholder, interested in obtaining a copy of this statement, may write to the Vice President
& Company Secretary at the Registered Office of the Company.
Directors:
In accordance with the Companies Act, 1956, and the Articles of Association of the Company, Mr. Anjum Bilakhia and
Prof. Pradip Khandwalla are due to retire by rotation and are eligible for re-appointment. These appointments form part of
the Notice of the 19th Annual General Meeting and the Resolutions are recommended for your approval.
Profile of these Directors, as required by the Clause 49 of the Listing Agreements entered into with the Stock Exchanges,
is given in the Notice of the Annual General Meeting.
Auditors:
Messrs Deloitte Haskins & Sells, Chartered Accountants, the Auditors of the Company will retire at the conclusion of the
19th Annual General Meeting and offer themselves for re-appointment. A letter from them confirming that if they are re-
appointed as the Auditors of the Company, such appointment will be in accordance with the provisions of
Section 224 (1B) of the Companies Act, 1956 and they are not disqualified in terms of Section 226 of the Companies Act,
1956, from being appointed as the Statutory Auditors of the Company, has been received.
Acknowledgement:
The Board of Directors takes this opportunity to express its sincere appreciation for the continued support and confidence
received from Company's customers, distributors, suppliers, bankers, shareholders and other business associates.
The Directors places on record their deep appreciation of the dedicated efforts and contribution of the employees at all
levels and look forward to their continued support in the future as well.
For and on Behalf of the Board
Anjum Bilakhia
Chairman
Place : Vapi
Date : March 20, 2010
ANNEXURE TO THE DIRECTORS’ REPORT

Statement pursuant to Section 217(1)(e) of the Companies Act, 1956, read with Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988, forming part of the Directors' Report
Conservation of Energy
The Company's operations do not involve substantial consumption of energy in comparison to the cost of production.
Wherever possible, energy conservation measures have been implemented. Total energy consumption is as per Form-
A and forms part of the report.
FORM - A
CONSERVATION OF ENERGY FOR THE ACCOUNTING PERIOD ENDED DECEMBER 31, 2009
(A) Power and Fuel Consumption
Particulars Units 2009 2008
1. Electricity
(a) Purchased from Electricity Boards
KWH Units (Million) 26.34 25.78
Total Amounts Rs. (Million) 143.90 127.03
Average Rate Rs./Unit 5.64 4.93
(b) Purchased from Others
KWH Units (Million) — 3.47
Total Amount Rs. (Million) — 23.24
Average rate Rs./Unit — 6.69
2. Natural Gas SCM. (Million) 19.84 15.29
Total Amount Rs. (Million) 315.77 200.05
Average rate Rs./Unit 15.92 13.08
3. High Speed Diesel Ltrs. (Million) 0.63 0.81
Average rate Rs./Unit 30.49 32.33
4. Furnace Oil Kgs. (Million) 4.86 6.13
Average Rate Rs./Unit 15.36 21.48
5. Solid Biomass Briquettes Kgs. (Million) 0.87 —
Total Amount Rs. (Million) 3.59 —
Average Rate Rs./Unit 4.11 —
(B) Consumption per Unit of Production
Electricity
Natural Gas
HSD
Furnace Oil
} Since the Company manufactures different types of products, it is not practicable to give
consumption per unit of production.
FORM - B
A. RESEARCH & DEVELOPMENT
1. SPECIFIC AREAS IN WHICH R&D EFFORTS HAVE BEEN PUT IN BY THE COMPANY
For development of:
● Specialized PU resins for Liquid inks
● Toluene & Ketone free solvent inks
● Flush technology for UV inks for Paper, Plastic and Hybrid applications.
● Specialized Rosin modified phenolic resin for offset ink applications.
● Ink concentrates for Zero VOC Sheetfed inks.
● News inks for applications on latest high speed machines.
● Specialized wire enamels for high-speed machines.
● Screen inks for Automobiles for dials & decals.
● Acrylic top coat for general purpose cans
2. BENEFITS DERIVED AS A RESULT OF R&D

Many of the above developments will enhance the competitiveness of the Company and will improve the
quality of existing products. New range of products will enhance the quality of UV & other inks, which will
further help in increasing the present market share.
3. FUTURE PLAN OF ACTION

The Company's R&D is working continuously for the development of new products, processes and improved
formulations to give high quality performance inks for different applications to customers worldwide.
With the technology support from hubergroup, the Company is continuously developing new products and
process to offer superior quality inks.
4. EXPENDITURE ON R & D
The Company has set up a most modern R&D Center. It has also imported various sophisticated equipment
for R&D and Quality Control System. During the year, the Company has incurred, on R&D Facilities:
(a) Capital expenditure of Rs. 0.05 Million,
(b) Recurring expenditure of Rs. 44.15 Million,
(c) Total Expenditure Rs. 44.20 Million and
(d) Total R&D expenditure as a percentage to total turnover was 0.32%.
B. TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION

1. THE EFFORTS MADE TOWARDS TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION
The Company has successfully developed the technology and products listed in A1 above and the technology
have been successfully implemented.
2. BENEFITS DERIVED AS A RESULT OF ABOVE EFFORTS

As a result of the aforesaid efforts the Company has been able to expand its business reach apart from
becoming more competitive and will be in a position to offer significantly superior products to its customers.
Some of the inks will provide import substitute, which will be an added advantage to the country also.
3. IN CASE OF IMPORTED TECHNOLOGY (IMPORTED DURING THE LAST FIVE YEARS. RECKONED
FROM THE BEGINNING OF THE FINANCIAL YEAR) THE FOLLOWING INFORMATION MAY BE
FURNISHED
Technology Imported 'HIT' Technology
Year of Import 2007
Has technology been fully absorbed? Yes
If not fully absorbed, areas where this has not taken place,
reasons thereof and future plan of actions N.A.
C. FOREIGN EXCHANGE EARNINGS AND OUTGO

1. ACTIVITIES RELATING TO EXPORTS, INITIATIVES TAKEN TO INCREASE EXPORTS, DEVELOPMENT
OF NEW EXPORT MARKETS FOR PRODUCTS AND SERVICES AND EXPORT PLANS
As mentioned in the Directors' Report.
2. (1) Total Foreign Exchange Earned Rs. 6,761.66 Million (FOB)

(2) Total Foreign Exchange Used Rs. 4,391.74 Million
REPORT ON CORPORATE GOVERNANCE

(Pursuant to Clause 49 of the Listing Agreement)
1. The Company's Philosophy on Code of Governance and Code of Conduct and Ethics.
Micro Inks Limited (MIL) firmly believes and accords highest importance to transparency, accountability and equity in
all facets of its operations. MIL constantly endeavours and is committed to achieving the highest level of standards
of corporate governance in order to enhance long-term shareholders value. MIL has adopted a philosophy on Code
of Governance as follows:
Philosophy on Code of Governance:
"Micro Inks Limited is committed to enhance shareholders value through high level of efficiency, integrity,
innovation and excellence in everything it does. The Company is committed to a high level of accountability,
transparency and long-term sustainability. The Company will enhance long term shareholders value by
harmonizing the needs and interests of all its stakeholders, viz., customers, employees, lenders, governments
and community at large."
Code of Business Conduct and Ethics:
Our strategic planning and day-to-day business practices are based on high ethical and legal standards. "Integrity
guides our conduct towards our business partners, colleagues, shareholders and the general public." This basic
statement of our corporate principles constitutes the foundation of our Code of Business Conduct and Ethics.
The Company has adopted Micro Inks Code of Business Conduct and Ethics (CBCE). The CBCE requires every
employee to abide by laws, to show mutual respect and to act honestly and with integrity. All managerial employees
have signed a pledge affirming their commitment to uphold the CBCE. The Management is committed to ensure an
open, honest and transparent working environment in the Company and is committed to eliminate fraudulent activities
in the operations of the Company. As a consequence, the Management is fully committed to vigorously investigate
and take appropriate actions whenever any cases involving fraud are reported to it. For this purpose, the Management
encourages its employees to report any cases that come to their knowledge in the course of their day-to-day working,
where there is a reasonable suspicion of some-one connected with the Company committing a fraud. The Management
is also committed to the protection of those who report such cases as long as such reporting is based on "reasonable
suspicion" and not malicious or baseless grounds or because of personal differences with those against who the
case is reported. CBCE also provides for whistle blower policy and no person has been denied assess to the Audit
Committee.
All the Board Members and Senior Management Personnel have affirmed the compliance with the CBCE.
2. Board of Directors
Composition of the Board:
The Board is well structured with an adequate blend of Executive and Non-executive Directors. The Board comprises
of 6 experts (excluding Alternate Directors) drawn from diverse fields/professions. The Board consist of 1 (one)
Executive Director and 5 (Five) Non-executive Directors. The Chairman of the Board is a Non-executive Director.
The numbers of Independent Directors are one-half of the total number of Directors. All Directors are liable to retire
by rotation. The necessary disclosures regarding Committee positions have been made by all the Directors. None of
the Directors on the Board is a Member of more than 10 Committees and Chairman of more than 5 Specified
Committees across all companies in which they are Directors.
There is no relationship between the Directors inter-se.
Independent Directors are directors, who apart from receiving director's remuneration do not have any other material
pecuniary relationship or transactions with the Company, its promoters, its management or its subsidiaries, which in
the judgement of the Board may affect independence of judgement of the Director. In the judgement of the Board of
Directors of the Company, following Directors are Independent Non-executive Directors:
— Mr. M L Bhakta
— Mr. Hasmukh Shah
— Prof. Pradip Khandwalla

Details, as on date, of the composition of the Board and changes therein since the last Annual Report, category of
the Directors and their attendance at the Board Meetings and the last Annual General Meeting, number of their
Directorship in other companies incorporated in India (excluding alternate directorship & directorship in Pvt. Ltd.
Companies) are given below:
Name of Director Category of No. of Atten- Directorship in No. of specified No. of

Directorship # Board dance other companies Committees Equity
Mtgs. at the incorporated in (other than MIL) Shares
Atten- last India (excluding in which Held
ded AGM alternate Direc- Chairman/
torship and Direc- Member $
torship in Pvt.
Ltd. Companies)
Chairman Member
Mr. Anjum Bilakhia Chairman-N.E.D. 5 Yes — — — Nil
Mr. Ashwani Bhardwaj M. D. 5 Yes — — — Nil
Mr. M. L. Bhakta * (I) & N.E.D. 3 No 5 2 4 Nil
Mr. Hasmukh Shah (I) & N.E.D. 5 Yes 8 1 2 Nil
Prof. Pradip Khandwalla (I) & N.E.D. 5 Yes 6 — 3 Nil
Ms. Ursula Borgmann N.E.D. 5 Yes — — — Nil
# (I) - Independent Director, N.E.D. - Non-Executive Director, M.D. - Managing Director.

$ As required by the existing Clause 49 of the Listing Agreements entered into with the Stock Exchanges, only
Membership/Chairmanship of the Audit Committee and Shareholders Investors Grievance Committee of public
companies have been considered.
* Mr. M. L. Bhakta is a senior partner of Kanga & Co., Solicitors & Advocates, who has a professional relationship
with the Company.
Mr. Heinrich Ringer continued to be an Alternate Director to Ms. Ursula Borgmann and Mr. K. K. Unni continued to be
an Alternate Director to Mr. Anjum Bilakhia.
Number of Board Meetings held during the year along with the dates of Meetings:
During the year ended December 31, 2009, five Board Meetings were held on February 14, 2009, April 25, 2009,
July 25, 2009, October 31, 2009 and December 9, 2009.
The gap between any two Meetings did not exceed four months.
To enable the Board to discharge its responsibilities effectively and take informed decisions, necessary information
is made available to the Board as per the Agenda Papers in advance of Board Meetings and only in exceptional
cases, the same is tabled at Board Meetings and/ or the presentations are made to the Board.
In addition to matters statutorily required to be placed before the Board of Directors for its approval, all major decisions
regarding resource mobilisation, investments, capital expenditure, etc. are considered by the Board. Following
information is regularly put up before the Board for its consideration and approval:
Strategic plan and direction of the Company;

Annual Business Plan, Sales Budget;
Quarterly Financial Results of the Company;
Minutes of the meetings of the Audit Committee, Shareholders and Investors' Grievance Committee,
Remuneration Committee and Special Committee/s of the Board;
Minutes of subsidiary companies of the Company;
Matters related to significant environmental issues, accidents, if any, etc.;
Material information from Government Bodies, which may have implications on the business of the Company, if any;
Information on material transactions, which are not in the ordinary course of business;
Disclosure of material transactions with potential conflict of interest, if any; and
Compliance with various listing and statutory requirements.
3. Audit Committee
The Audit Committee comprises of experts specialising in accounting/financial management. The Chairman of the
Audit Committee is a Non-executive and Independent Director. The Present composition of the Audit Committee is
as follows:
Name Designation Category
Mr. Hasmukh Shah Chairman Non-Executive and Independent Director

Mr. M L Bhakta Member Non-Executive and Independent Director
Prof. Pradip Khandwalla Member Non-Executive and Independent Director
Ms. Ursula Borgmann Member Non-Executive Director
Mr. Hitesh Parikh, Vice President & Company Secretary of the Company continued to be the Secretary of the
Audit Committee.
Managing Director, Vice President & Chief Financial Officer and Internal Auditors are permanent invitees to Audit
Committee Meetings. The Statutory Auditors is also invited to attend Audit Committee Meetings as and when required.
The powers and role of the Audit Committee are as per Guidelines set out in Clause 49 of the Listing Agreements
with the Stock Exchanges and the Section 292 A of the Companies Act, 1956. The salient features of power and role
of the Audit Committee are:
Power of Audit Committee
The Audit Committee is vested with the necessary powers, as defined in the Charter such as:
G To investigate any activity of the Company;
G To seek and obtain any information and explanation;
G To obtain outside legal or professional advice and if necessary, secure their attendance at the meetings.
G To achieve its objectives.
Role of Audit Committee
The terms of reference of Audit Committee are briefly described as follows:
(a) To oversee and ensure that the financial reporting process and disclosures made are correct, sufficient
and credible;
(b) Recommend the appointment and removal of statutory auditor, fixation of audit and other fees;
(c) Review with management financial statements focusing primarily on -
G Management discussion and analysis of financial condition and results of operations;

G Management letters/ letters of internal control weakness issued by the Statutory Auditors;
G Changes in accounting policies and practices;
G Qualifications in draft audit report;
G Adjustments of significant nature arising in course of audit;
G Accounting Standard compliances;
G Stock Exchange and legal requirements relating to financial statements;
G Related party transaction; and
G The financial statements, in particular, the investments made by unlisted subsidiary companies.
before submission to the Board.
(d) Review with management the adequacy of internal control system, structure and frequency of audit;
(e) Review the findings of any internal investigation into matter of suspected fraud or irregularity or failure of
internal control system;
(f) Discussion with Statutory Auditors regarding nature and scope of audit, before and after audit and to ascertain
areas of concern;
(g) Review financial and risk management policies of the Company;
(h) To look into reasons of substantial defaults in payment to Depositors, Debentureholders, Shareholders and
Creditors;
(i) Review the functioning of the Whistle Blower mechanism;
(j) Such other functions as may be covered in clause 49 of the Listing Agreements with Stock Exchanges or as
may be required pursuant to Section 292 A of the Companies Act, 1956 or any amendment thereof, from time
to time over and above any specific functions that may be requested by the Board of Directors of the Company,
from time to time.
Meetings and the attendance during the year:
Four meetings of the Audit Committee were held during the year ended December 31, 2009. The attendance of each
Member of the Committee is given below:
Name of Director No. of Meetings Attended Remarks
Mr. Hasmukh Shah 4 —
Mr. M. L. Bhakta 3 —
Prof. Pradip Khandwalla 4 —
Ms. Ursula Borgmann 4 —
The Company secretary was present at all the meetings of the Audit Committee.
The Minutes of Audit Committee Meetings were noted by the Board of Directors at Board Meetings.
4. Shareholders/Investors' Grievance Committee:
The Board of Directors, constituted a Shareholders/Investors' Grievance Committee, in October 2000, to attend to
and redress the Shareholders' and Investors' grievances. The present composition of the Shareholders/Investors'
Grievance Committee is as follows:
Mr. M. L. Bhakta Member Non-Executive and Independent Director
Ms. Ursula Borgmann Member Non-Executive Director
Mr. Hitesh Parikh Secretary Vice President, Company Secretary & Compliance Officer
Role of Shareholders/Investors' Grievance Committee:

(a) Review the existing "Investor Redressal System" and suggest measures for improvement.
(b) Receive the report about Investors' grievance and follow-up for necessary action taken for rederessal thereof.
(c) Suggest improvement in investor relations.
(d) To supervise the performance of the Registrar and Share Transfer Agent
(e) It is also empowered to approve transfer, deletion, duplicate, etc. of the Securities of the Company issued or
to be issued, from time to time.
During the year ended December 31, 2009, 29 complaints/letters were received by the Company including one
complaint through Stock Exchange and nil complaint through SEBI. No complaint is pending to be resolved at the
end of the financial year.
Average 8 days time is taken for disposal of shareholders complaints/letters.
One meeting of the Shareholders/Investors' Grievances Committee was held on July 25, 2009 during the year
ended December 31, 2009.
All shares received for transfer were registered and dispatched within 15 days of receipt, wherever documents were
correct and valid in all respects.
5. Remuneration Committee:
The Board of Directors constituted the Remuneration Committee at its meeting held on January 31, 2007 as per the
Clause 49 of the Listing Agreements entered into with the Stock Exchanges. The present composition of the
Remuneration Committee is as follows:

Mr. M. L. Bhakta Member Non-Executive and Independent Director
Prof. Pradip Khandwalla Member Non-Executive and Independent Director
Mr. Hitesh Parikh Secretary Vice President & Company Secretary
Terms of reference:
(a) Determine the Company's policy on specific remuneration packages for Executive Director/s including pension
rights and any compensation payment.
(b) Decide the actual Salary, Salary Grades, Overseas Allowance, Perquisites, Retrials and increment of Executive
Director/s.
(c) Define and to examine implementation of the Performance Linked Incentive scheme including ESOP of the
Company and evaluate the performance and determine the amount of incentive of the Executive Director/s for
that purpose.
(d) Decide the amount of Commission payable to the Executive Director/s.
(e) Periodically review and suggest revision of the total remuneration package of the Whole-time Director/s keeping
in view the performance of the Company, standards prevailing in the industry, statutory guidelines, etc.
Meetings and the Attendance during the year:
One meeting of the Remuneration Committee was held on February 14, 2009 during the year ended
December 31, 2009. The attendance of each Member of the Committee is given below:
Name of Director No. of Meetings Attended
Mr. Hasmukh Shah 1

Mr. M. L. Bhakta 1
Prof. Pradip Khandwalla 1
The Company Secretary was present at the Meeting of the Remuneration Committee.
The Minutes of Remuneration Committee Meeting was noted by the Board of Directors at the Board Meeting.
Remuneration Policy:
A. For Executive Directors

The remuneration policy of the Company is performance driven and is structured to motivate employees, recognise
their merits and achievements and promote excellence in their performance. The Board of Directors/the
Remuneration Committee of the Board is authorised to decide the remuneration of the Executive Directors
subject to the approval of the Shareholders and the Central Government, if required. The remuneration structure
comprises of Salary, Perquisites, Performance Incentive and/or Commission. Salary is paid to Executive Directors
within the Salary grade approved by the Members. Performance Incentive and/or Commission constitute the
variable component of remuneration. However, as on date no commission is paid to Executive Directors.
The details of remuneration paid/payable to Executive Directors during the year ended December 31, 2009 are
as under:
(Amount in Rupees)
Directors Salary* Perquisites# Total Period of Contract
Mr. Ashwani Bhardwaj 7,776,104 739,687 8,515,791 From January 31, 2007
to January 30, 2012
* Salary includes Performance Bonus of Rs. 2,000,000/- and Leave Travel Assistance of Rs. 17,652/-.
# includes Company's contribution to Provident Fund & other perquisites.
B. For Non-executive Directors
The Non-executive Directors are paid remuneration by way of Commission and Sitting Fees. In terms of the
Members approval given at the Annual General Meeting held on April 25, 2009, Commission is payable at a rate
not exceeding 1% per annum of the Net Profits of the Company computed in the manner referred to in Section
309 of the Companies Act, 1956. The actual amount of commission payable to each Non-executive Director is
decided by the Board.
The decision is broadly based on the following:
1. Number of Board Meetings and various Committee Meetings attended.

2. Role and Responsibility as Chairman/ Member of the Board / Committee
3. Period of Directorship in the Company.
4. Overall contribution and role outside the meetings.
With effect from January 17, 2004, as permitted by Article 138 of the Company's Articles of Association read
with Notification No.GSR 580(E) dated July 24, 2003 issued by the Department of Companies Affairs, the
Non-executive Directors are paid Sitting Fees of Rs. 20,000/- per Board/ Committee Meeting attended.
The details of the remuneration paid to the Non-executive Directors during the year ended December 31, 2009
are as under:
(Amount in Rupees)
Directors Fixed Commission Sitting Fees Total
Mr. Anjum Bilakhia 500,000 100,000 600,000

Mr. M. L. Bhakta 500,000 160,000 660,000
Mr. Hasmukh Shah 500,000 220,000 720,000
Prof. Pradip Khandwalla 500,000 200,000 700,000
Ms. Ursula Borgmann 500,000 200,000 700,000
Mr. M. L. Bhakta is a Senior Partner of M/s.Kanga & Co., Solicitors & Advisors who have professional relationship
with the Company. The Professional Fees of Rs. 99,270/- paid to M/s. Kanga & Co. during the year ended
December 31, 2009 is not considered material enough to impinge on the Independence of Mr. Bhakta. None of
the other Non-executive Directors have any other pecuniary interest in the Company.
6. General Body Meetings:

Details of the location of the last three Annual General Meetings (AGM) and an Extraordinary General Meeting
(EOGM) together with details of resolutions passed or to be passed by Postal Ballot:
AGM/EOGM for the Date and Time of Location

Financial Year Ended AGM/EOGM
& Postal Ballot
announcement
December 2008 (AGM) April 25, 2009 at 11.30 A.M. At the Registered Office at Bilakhia House,
Muktanand Marg, Chala, Vapi 396 191.
December 2008 (EOGM)* August 30, 2008 at 11.30 A.M. At the Registered Office at Bilakhia House,
*Extra Ordinary General Meeting was held during the financial year 2008.
The Company, pursuant to Section 192A (2) of the Companies Act, 1956 vide its Postal Ballot Notice dated
December 9, 2009, has passed the special resolution in respect of voluntary delisting of equity shares of the Company
from the Bombay Stock Exchange Limited and National Stock Exchange of India Limited in terms of the Delisting
Regulations and other applicable provisions of law. The Results of Postal Ballot Notice was announced on
January 16, 2010 at 9.00 A.M. at the Registered Office of the Company.
The Shareholders passed all the resolutions including the special resolutions set out in the respective Notices. At the
forthcoming AGM, there is no item on the agenda that needs approval by postal ballot.
7. Disclosure
There were no transactions of material nature between the Company and its Directors or Senior Management and
their relatives or Promoters that may have potential conflict of interest with the Company. The Register of Contracts
containing transactions, in which Directors are interested, have been placed before the Board regularly.
Transactions with the related parties, as per requirements of Accounting Standard 18, are disclosed elsewhere in
this Annual Report.
During the last three years there has been no instance of non-compliance by the Company on any matter related to
capital market. Hence, there was no stricture or penalty imposed either by SEBI or by the Stock Exchanges or any
statutory authority for non-compliance of any matter related to the capital market.
8. Certification of the Managing Director (MD) and Vice President and Chief Financial Officer (VP & CFO)
As required by Clause 49 V of the Listing Agreement, the MD and VP & CFO certification of the Financial Statements,
the Cash Flow Statement and the Internal Control Systems for financial reporting has been obtained from Mr. Ashwani
Bhardwaj, MD and Mr. Sundaresh Bhat, VP & CFO.
9. Implementation of Code of Conduct for Insider Trading

MIL has adopted Code of Conduct for Insider Trading and is based on SEBI framework but is stringent than the
statutory code being enforced by SEBI. MIL follows strict guidelines in respect of insiders' stock trading and related
disclosures. The Company Secretary is designated as the Compliance Officer to over see its implementation. Periodic
disclosures have been obtained from all the Directors and 'designated employees'. Under the aforesaid code all
Directors and Designated Employees are required to conduct all their dealing in securities of the Company only in
valid trading window after obtaining pre-clearance from the Company as per the pre dealing procedure described in
the Code.
10. Secretarial Audit for reconciliation of Capital

As stipulated by SEBI, a qualified practicing Company Secretary carries out Secretarial Audit to reconcile the total
admitted capital with National Securities Depository Limited and Central Depository Services (India) Limited and the
total issued and listed capital. This Audit is carried out every quarter and the report thereon is submitted to the Stock
Exchanges as well as placed before the Board of Directors. The Audit confirms that the total Listed and paid-up
capital is in agreement with the aggregate of the total number of Shares in dematerialised form (held by NSDL and
CDSL) and total number of Shares in physical form.
11. Means of Communication with Shareholders

Quarterly Results : Published regularly normally in following newspapers within forty-eight hours
of adoption of the same by the Board of Directors apart from placing the
same on Company's Website on the same day.
G Business Standard : Ahmedabad and Mumbai
G Jaihind : Ahmedabad
Website Address : http://www.microinks.com
Official News Releases : Through Press Releases in leading newspapers in English and Regional
Languages.
The Presentations made to
Institutional Investors or the analyst : Yes
Whether MD&A Report is part of

Annual Report : Yes
Half Yearly Report : At present company is not sending half yearly report to each household of
the Shareholders.
GENERAL SHAREHOLDERS’ INFORMATION

Registered Office : Micro Inks Limited
Bilakhia House
Muktanand Marg,
Chala,
Vapi - 396 191.
Share Transfers in physical form and : Link Intime India Private Limited
other communication in that regard Registrar & Share Transfer Agent
including share certificates, dividends C/13, Pannalal Silk Mills Compound,
and change of address etc. may be L. B. S. Marg, Bhandup (W),
addressed to Mumbai - 400 078.
Tel No.: +91 22 2594 6970 Fax No.: +91 22 2594 6969
Email: helpdesk@linkintime.co.in
Annual General Meeting of the Company : Date : July 29, 2010
to be held on
Day : Thursday
Time : 11.30 a.m.
Venue : Bilakhia House, Muktanand Marg,
Chala, Vapi - 396 191. Gujarat. India.
Financial Calendar (tentative) : First quarter — 4th week of April 2010
Second quarter/Half year — 4th week of July 2010
Third quarter — 4th week of October 2010
Audited Annual Results — 2nd week of February 2011
Book Closure dates : April 14, 2010 to April 17, 2010 (both days inclusive)
Dividend Payment : Final dividend @ 60% will be paid on or after July 29, 2010, if
approved by the Members at the ensuing Annual General Meeting.
Listing on Stock Exchanges : Equity shares of the Company are listed at following two
Stock Exchanges :
1) Bombay Stock Exchange Limited
Floor 25, P. J. Towers
Dalal Street
Mumbai - 400 001.
2) National Stock Exchange of India Ltd.
Exchange Plaza
5th Floor, Plot No. C/1, 'G' Block
Bandra-Kurla Complex
Bandra (E)
Mumbai - 400 051.
Listing Fees : Listing fees for all the aforesaid Stock Exchanges for the financial
years 2009-2010 have been paid.
Pursuant to the Securities and Exchange Board of India (SEBI)
Circular No. MRD/DoP/SE/DEP/CIR - 4/2005 dated January 28,
2005, Issuer Companies are required to pay custodial fees to the
depositories with effect from April 1, 2005. Accordingly the Company
has paid custodial fees for the year 2009-10 to National Securities
Depository Limited and Central Depository Services (India) Limited.
Stock Code
— Bombay Stock Exchanges (BSE) : 523886
— National Stock Exchange of India
Ltd. (NSE) : MICRO
ISIN NO. : INE056A01014
MONTHWISE STOCK MARKET DATA (BSE & NSE) RELATING TO EQUITY SHARES OF
THE COMPANY FOR THE PERIOD 01-01-2009 TO 31-12-2009
Period Shares Traded (Nos.) Price Per Share (Rs.)
January 09 to
December 09 BSE NSE Total High Low Average
January 09 521324 453061 974385 135.00 (B) 94.15 (B) 114.58 (B)
146.60 (N) 94.00 (N) 120.30 (N)
February 09 234714 162289 397003 116.00 (B) 92.00 (B) 104.00 (B)
117.90 (N) 83.30 (N) 100.60 (N)
March 09 179332 193311 372643 137.80 (B) 100.50 (B) 119.15 (B)
137.90 (N) 100.05 (N) 120.03 (N)
April 09 169271 181438 350709 192.45 (B) 136.00 (B) 164.23 (B)
191.80 (N) 135.00 (N) 163.40 (N)
May 09 238315 353081 591396 250.00 (B) 154.10 (B) 202.00 (B)
248.85 (N) 155.00 (N) 201.93 (N)
June 09 155872 195876 351748 257.00 (B) 192.50 (B) 224.75 (B)
278.80 (N) 192.50 (N) 235.65 (N)
July 09 149390 270833 420223 249.50 (B) 173.20 (B) 211.35 (B)
250.40 (N) 171.00 (N) 209.40 (N)
August 09 171045 251394 422439 294.35 (B) 207.00 (B) 250.68 (B)
289.35 (N) 211.00 (N) 250.18 (N)
September 09 467665 527964 995629 412.00 (B) 265.00 (B) 338.50 (B)
413.95 (N) 266.15 (N) 340.05 (N)
October 09 203214 191062 394276 446.20 (B) 353.00 (B) 399.60 (B)
447.00 (N) 350.00 (N) 398.50 (N)
November 09 195578 301320 496898 502.65 (B) 375.25 (B) 438.95 (B)
502.80 (N) 373.05 (N) 437.93 (N)
December 09 833758 746589 1580347 754.00 (B) 451.00 (B) 602.50 (B)
754.80 (N) 458.10 (N) 606.45 (N)
Average Price Per Share up to December 2009 264.19 (B)
265.37 (N)
(B) Bombay Stock Exchange (BSE)
(N) National Stock Exchange (NSE)
DISTRIBUTION OF SHAREHOLDING AS ON DECEMBER 31, 2009

No. of Shares Held No. of % of Total No. of Shares % of Total
Shareholders Shareholders Shares
1 500 8451 91.12 978555 3.93
501 1000 403 4.35 307264 1.24
1001 2000 208 2.24 313968 1.26
2001 3000 66 0.71 163675 0.66
3001 4000 39 0.42 135553 0.55
4001 5000 29 0.31 135350 0.54
5001 10000 43 0.46 304028 1.22
10001 and above 36 0.39 22533548 90.60
TOTAL 9275 100.00 24871941 100.00
Physical mode 777 8.38 195634 0.79
Electronic mode 8498 91.62 24676307 99.21
TOTAL 9275 100.00 24871941 100.00
CATEGORIES OF SHAREHOLDERS AS ON DECEMBER 31, 2009

S. No. Category No. of Total Shares % to the
Folios Held Share Capital
1. Other Bodies Corporate 430 814522 3.27
2. Clearing Member 128 64542 0.26
3. Foreign Institutional Investors 7 82346 0.33
4. Mutual Funds 12 2963956 11.92
5. Nationalised Banks 1 1500 0.01
6. Non-Resident Indians 73 28193 0.11
7. Public 8567 1677514 6.75
8. Promoters 2 18653955 75.00
9. Directors & their Relatives (excluding promoter directors) 2 2200 0.01
10. Trusts 3 3956 0.01
11. Top 50 individual Shareholders (excluded in the above) 50 579257 2.33
Total 9275 24871941 100.00
Performance of equity shares of the Company on BSE in comparison to

BSE Sensex and the Volumes of shares traded at BSE+NSE
600 500
450
500
400
Normalized Share Price & Sensex
350
Volume (BSE + NSE)
400
300
300 250
200
200
150
100
100
50
0 0
Apr-09
Aug-09
Jan-09
Mar-09
Feb-09
May-09
Jun-09
Jul-09
Sep-09
Oct-09
Nov-09
Dec-09
Micro Inks Traded Volume ('000s) (RHS) BSE Sensex (LHS) Micro Inks Price (LHS)
Details of Equity Shares Under Lock-in period : NIL
Dematerialisation of shares : As per SEBI's directive effective June 26, 2000, trading in
equity shares of the Company has been made compulsory in
dematerialised form for all the categories of investors. The
Company has already established connectivity with National
Securities Depository Ltd. and Central Depository Services
(India) Ltd. through Link Intime India Private Limited, Registrar
& Share Transfer Agent, so as to facilitate the dematerialisation
of its shares.
As on December 31, 2009 a total of 24676307 equity shares

constituting 99.21 % of the equity share capital of the Company
stand dematerialised and balance 195634 shares are in
physical mode.
Share Transfer System : Transfers of Shares in physical form are scrutinized and
processed by Link Intime India Private Limited. The transfers
were affected by authorised officials of the Company, from
time to time and Share Certificates were dispatched within 15
days from the date of receipt of request, provided the relevant
documents were complete in all respects.
Plant Location : Appeared in the Annual Report elsewhere.
Investors' correspondence to be addressed to : Vice President & Company Secretary

Micro Inks Limited
Registered Office:
Bilakhia House, Muktanand Marg,
Chala, Vapi - 396 191. Gujarat. India.
Telephone No. : + 91 260 305 2100
Fax No. : + 91 260 305 2125
E-mail : investorrelations@microinks.com
CERTIFICATE
To the Members of
Micro Inks Limited
We have examined the compliance of the conditions of Corporate Governance by Micro Inks Limited for the year ended
December 31, 2009, as stipulated in clause 49 of the Listing Agreement of the said Company with Stock Exchanges.
The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was
limited to procedures and implementations thereof, adopted by the Company for ensuring the compliance with the conditions
of the certificate of Corporate Governance as stipulated in the said Clause. It is neither an audit nor an expression of the
opinion on the financial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us and the representations
made by the Directors and the Management, we certify that the Company has complied with the conditions of Corporate
Governance as stipulated in Clause 49 of the above-mentioned Listing Agreement.
We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency
or effectiveness with which the Management has conducted the affairs of the Company.
For Jagdish Patel & Co.,

Company Secretaries
Jagdish P. Patel
Proprietor
Place : Vapi CP No.: 1782
Date : March 20, 2010 FCS No.: 2613
AUDITORS’ REPORT
To,
The Members of Micro Inks Limited on the Accounts for the year ended December 31, 2009
1. We have audited the attached Balance Sheet of MICRO INKS LIMITED, as at December 31, 2009, and also the
Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These
financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion
on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards generally accepted in India. These Standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by the management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
3. As required by the Companies (Auditor’s Report) Order, 2003, issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the said Order.
4. Without qualifying our opinion, we draw attention to Note No. 29 on Schedule-17. In view of the circumstances
stated in the said Note, the Company had, in the previous year, inter-alia written-off its investments in its wholly
owned subsidiary Hostmann-Steinberg Inc., USA, of a carrying value of Rs. 1,587.86 million, by utilising the credit
balances in Securities Premium Account / Capital Redemption Reserve in accordance with the requisite approvals.
Subsequent thereto, the Company has made further investments in that subsidiary, balance as at the year end,
Rs. 965.81 million (As at 31st December, 2008, Rs. 488.10 million). The Company has also net outstanding of
Rs. 564.07 million (As at 31st December, 2008, Rs. 796.23 million) due from the subsidiary on account of debtors
and has given corporate guarantees of Rs. 595.84 million (As at 31st December, 2008, Rs. 487.30 million) for
loans given by banks to the subsidiary. As represented by the Management, notwithstanding the subsidiary being
dependent on the Company for financial support and for the reasons stated in the said note, no losses on these
accounts are presently expected to occur and, accordingly, no provision has been made.
5. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:
(i) we have obtained all the information and explanations, which to the best of our knowledge and belief, were
necessary for the purpose of our audit;
(ii) in our opinion, proper books of account as required by law have been kept by the Company so far as appears
from our examination of those books;
(iii) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in
agreement with the books of account;
(iv) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this
Report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies
Act, 1956;
(v) in our opinion and to the best of our information and according to the explanations given to us, the said accounts
give the information required by the Companies Act, 1956, in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the Company as at December 31, 2009;
(b) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.
6. On the basis of written representations received from the Directors, and taken on record by the Board of Directors,
none of the Directors is disqualified as on December 31, 2009, from being appointed as a Director, in terms of
Clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.
For Deloitte Haskins & Sells

Chartered Accountants
(Registration No. 117366W)
R. K. Hiranandani
Place : Mumbai Partner
Date : March 20, 2010 Membership No. 36920
ANNEXURE TO THE AUDITORS’ REPORT ON THE ACCOUNTS

FOR THE YEAR ENDED DECEMBER 31, 2009
(Referred to in paragraph 3 of our report of even date)
(i) In respect of its Fixed Assets:
(a) The Company has maintained proper records showing full particulars, including quantitative details and situation
of fixed assets.
(b) According to the information and explanations given to us,the fixed assets are physically verified by the
management according to a regular programme of verification which is once in three years. Such verification
due as per this programme had been carried out during the year ended December 31, 2007.
In our opinion, the frequency of verification is reasonable having regard to the size of the Company and
the nature of its assets.
(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the
fixed assets of the Company and such disposal has, in our opinion, not affected the going concern
status of the Company.
(ii) In respect of its Inventories:
(a) As explained to us, inventories (other than stocks lying with third parties, in respect of which confirmations
have been obtained) have been physically verified during the year by the management at reasonable intervals.
In our opinion, the frequency of verification is reasonable.
(b) In our opinion and according to the information and explanations given to us, the procedures of physical
verification of inventories followed by the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) In our opinion and according to the information and explanations given to us, the Company has maintained
proper records of the inventories and no material discrepancies were noticed on physical verification.
(iii) The Company has not granted or taken loans, secured or unsecured, to or from any companies, firms or
other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Therefore,
paragraphs (a) to (g) of Clause 4 (iii) are not applicable to the Company.
(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control
system commensurate with the size of the Company and the nature of its business for the purchases of inventory
and fixed assets and for the sale of goods. There is no sale of services. During the course of our audit, we have not
observed any continuing failure to correct major weakness in such internal control system.
(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts
and arrangements referred to in Section 301 of the Companies Act, 1956, have been entered in the register
required to be maintained under the said Section.
(b) In our opinion and according to the information and explanations given to us, the transactions made in
pursuance of contracts or arrangements entered in the register maintained under Section 301 of the
Companies Act, 1956, and exceeding the value of rupees five lakhs in respect of any party during the year,
except for transactions where the items involved were of a specialised nature and in the absence of any
comparable prices available, have been made at prices which are reasonable having regard to prevailing
market prices at the relevant time.
(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted
deposits from public within the meaning of Sections 58A and 58AA or any other relevant provisions of the
Companies Act, 1956, and the Companies (Acceptance of Deposits) Rules, 1975. We are informed that no
order has been passed by the Company Law Board, National Company Law Tribunal, Reserve Bank of India or
any Court or any other Tribunal.
(vii) In our opinion, the internal audit functions carried out during the year by a firm of Chartered Accountants
appointed by the management have been commensurate with the size of the Company and the nature of
its business.
(viii) We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained
by the Company relating to the manufacture of resins, pursuant to the order made by the Central Government for
the maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956, and we are of the opinion
that prima-facie the prescribed accounts and records have been made and maintained. We have, however,
not made a detailed examination of such records with a view to determining whether they are accurate and
complete. To the best of our knowledge and according to the information and explanations given to us, the
Central Government has not prescribed the maintenance of cost records for any other products of the Company.
(ix) According to the information and explanations given to us in respect of statutory and other dues:
(a) The Company is regular in depositing undisputed statutory dues, including Provident Fund, Investor Education
and Protection Fund, Employees’ State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax,
Customs Duty, Excise Duty, Cess and any other material statutory dues applicable to it with the appropriate
authorities. There are no undisputed amounts payable in respect of Provident Fund, Investor Education
and Protection Fund, Employees’ State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax,
Customs Duty, Excise Duty, Cess and any other material statutory dues which were in arrears, as at
December 31, 2009, for a period of more than six months from the date they became payable.
(b) There are no disputed Wealth Tax, Customs Duty, Service Tax and Cess which have not been deposited as
on December 31, 2009.
Disputed Income Tax of Rs. 0.12 million for the Financial Year 1993-1994 pending with the Assessing Officer
and of Rs. 0.64 million for the Financial Year 1998-1999 pending with the Assessing Officer, have not been
deposited as on December 31, 2009.
Disputed Sales Tax liability of Rs. 0.24 million for the Financial Year 2003-2004, pending with Appellate and
Revisional Board and of Rs. 0.34 million for the Financial Year 2004-2005, pending with Appellate and Revisional
Board, have not been deposited as on December 31, 2009.
Disputed Central Excise liability of Rs. 2.11 million for the Financial Year 1999-2000, pending with the Appellate
Tribunal and of Rs. 10.48 million for the Financial Year 2006-2007, pending with the Appellate Tribunal,
have not been deposited as on December 31, 2009.
(x) The Company does not have accumulated losses as at the end of the financial year. The Company has not incurred
cash losses during the financial year covered by our audit and in the immediately preceding financial year.
(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the
repayment of dues to banks. The Company has not issued any debentures.
(xii) In our opinion and according to the information and explanations given to us, the Company has not granted loans
and advances on the basis of security by way of pledge of shares, debentures and other securities.
(xiii) The Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of
the said Order are not applicable to the Company.
(xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments. Therefore,
the provisions of clause 4(xiv) of the said Order are not applicable to the Company.
(xv) In our opinion and according to the information and explanations given to us, the Company has given guarantees
for loans taken by its subsidiary from banks. Having regard to the explanation that the subsidiary is wholly owned, in
our opinion, the terms and conditions of the guarantees are not prima-facie prejudicial to the interests of the Company.
(xvi) To the best of our knowledge and belief and according to the information and explanations given to us, in our
opinion, term loans availed by the Company have been applied for the purposes for which the loans were obtained.
(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of
the Company, we report that funds raised on short-term basis have, prima-facie, not been used during the year for
long-term investment.
(xviii) According to the information and explanations given to us, during the year the Company has not made preferential
allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies
Act, 1956.
(xix) According to the information and explanations given to us and the records examined by us, no debentures were
outstanding during the year.
(xx) According to the information and explanations given to us, there has been no money raised by public issues
during the year.
(xxi) According to the information and explanations given to us, no fraud on or by the Company was noticed or reported
during the year.

R. K. Hiranandani
BALANCE SHEET
AS AT DECEMBER 31, 2009
(Rs. in million)
As at As at
Schedule 31/12/2009 31/12/2008
SOURCES OF FUNDS
SHAREHOLDERS’ FUNDS
Share Capital 1 248.72 248.72
Reserves and Surplus 2 5,327.75 4,376.85
5,576.47 4,625.57
LOAN FUNDS
Secured Loans 3 1,194.89 2,638.06
Unsecured Loans 4 400.00 789.84
1,594.89 3,427.90
Deferred Tax Liability (Net) (Refer Note No. 18 of Schedule-17) 364.58 373.40
TOTAL 7,535.94 8,426.87
APPLICATION OF FUNDS
FIXED ASSETS 5
Gross Block 5,426.91 5,238.95
Less: Depreciation / Amortisation 2,323.74 1,856.01
Net Block 3,103.17 3,382.94
Capital Work-in-Progress (Including Capital Advances) 244.19 158.86
3,347.36 3,541.80
INVESTMENTS 6 971.19 493.50

CURRENT ASSETS, LOANS AND ADVANCES
Interest Accrued on Investments — 0.02
Inventories 7 1,983.48 2,106.67
Sundry Debtors 8 3,317.63 3,761.05
Cash and Bank Balances 9 104.68 71.19
Loans and Advances 10 510.28 587.38
5,916.07 6,526.31
LESS: CURRENT LIABILITIES AND PROVISIONS 11
Current Liabilities 2,502.02 1,919.50
Provisions 196.66 215.24
2,698.68 2,134.74
NET CURRENT ASSETS 3,217.39 4,391.57
TOTAL 7,535.94 8,426.87
SIGNIFICANT ACCOUNTING POLICIES 16
NOTES TO THE ACCOUNTS 17
As per our report of even date For and on behalf of the Board
R. K. Hiranandani Anjum Bilakhia Ashwani Bhardwaj
Partner Chairman Managing Director
Hitesh Parikh Sundaresh Bhat
Vice President & Vice President &
Company Secretary Chief Financial Officer
Place : Mumbai Place : Vapi
Date : March 20, 2010 Date : March 20, 2010
PROFIT AND LOSS ACCOUNT

(Rs. in million)
Year ended Year ended
Schedule 31/12/2009 31/12/2008
INCOME
Sales and Other Operating Income (Gross) 12 14,311.55 14,227.51
Less: Excise Duty 546.74 844.73
Sales and Other Operating Income (Net) 13,764.81 13,382.78
Other Income 13 40.03 45.23
TOTAL 13,804.84 13,428.01
EXPENDITURE
Materials Consumed (Refer Note Nos. 9(b) and 25 of Schedule-17) 9,076.68 8,674.88
Manufacturing and Other Expenses 14 2,675.00 2,423.98
(Increase) / Decrease in Semi-Finished Goods and
Finished Goods Stock 15 (92.66) 137.23
Interest and Other Finance Charges (Net) 160.67 761.68
(Refer Note No. 10 of Schedule-17)
Depreciation / Amortisation (Refer Note No. 31 of Schedule-17) 5 485.67 319.54
TOTAL 12,305.36 12,317.31
PROFIT BEFORE TAX 1,499.48 1,110.70

Provision for Taxation
– for Current Tax (Refer Note No. 16 of Schedule-17) 381.60 217.00
– for Deferred Tax (8.82) (13.80)
– for Fringe Benefit Tax 1.21 4.65
373.99 207.85
PROFIT AFTER TAX 1,125.49 902.85

Balance Brought Forward 1,564.27 1,086.01
Profit Available for Appropriation 2,689.76 1,988.86
APPROPRIATIONS
Proposed Dividend 149.23 149.23
Provision for Dividend Distribution Tax on Proposed Dividend 25.36 25.36
674.59 424.59
Balance Carried to Reserves and Surplus (Schedule-2) 2,015.17 1,564.27
Basic and Diluted Earnings Per Share of Rs. 10/- each (in Rs.) 45.25 36.30
CASH FLOW STATEMENT

(Rs. in million)
31/12/2009 31/12/2008
(A) CASH FLOW FROM OPERATING ACTIVITIES
Profit Before Tax 1,499.48 1,110.70
Adjustment for:
Depreciation / Amortisation 485.67 319.54
Loss on Sale / Retirement of Fixed Assets (Net) 4.49 4.46
Loss on Sale of Trade Investment in Subsidiary 1.29 —
Write-off for Obsolescences of Inventory 17.21 10.97
Unrealised Exchange (Gain) / Loss (Net) (153.72) 159.83
Exchange Gain on Reduction of Share Capital in Subsidiary — (11.93)
Bad Debts including Provision / (Reversal of Provision) for Doubtful Debts (Net) 11.30 (1.75)
Operating Profit before Working Capital Changes 2,026.39 2,353.50

Adjustment for:
Inventories 105.98 (67.04)
Trade and Other Receivables 370.91 (362.98)
Trade and Other Payables 734.16 (405.28)
1,211.05 (835.30)
Cash Generated from Operations 3,237.44 1,518.20
Direct Taxes Paid (Net) (333.36) (268.68)
Net Cash from Operating Activities (A) 2,904.08 1,249.52

(B) CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Fixed Assets (196.62) (312.66)
Sale of Fixed Assets 4.49 13.37
Investment in Subsidiary (480.20) (489.94)
Proceeds from Capital Reduction in Subsidiary — 76.28
Sale of Trade Investment in Subsidiary 1.20 —
Sale of Non-Trade Investment 0.02 —
Net Cash used in Investing Activities (B) (671.11) (712.95)

(C) CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from Long-term Borrowings 477.60 488.10
Repayment of Long-term Borrowings (86.24) (568.71)
(Repayment of) / Proceeds from Short-term Borrowings (Net) (2,052.34) 231.44
Payment of Interest (364.19) (585.96)
Payment of Dividend (including Dividend Distribution Tax) (174.31) (174.47)
Net Cash used in Financing Activities (C) (2,199.48) (609.60)
Net Increase / (Decrease) in Cash and Cash Equivalents (A+B+C) 33.49 (73.03)
Opening Cash and Cash Equivalents 71.19 144.22
Closing Cash and Cash Equivalents 104.68 71.19
(See Schedule-9)
Note: The figures of the previous year have been regrouped / rearranged wherever necessary.

SCHEDULES TO THE BALANCE SHEET

(Rs. in million)
As at As at
31/12/2009 31/12/2008
SHARE CAPITAL (SCHEDULE – 1)
Authorised
30,000,000 (As at 31/12/2008, 30,000,000) Equity Shares of Rs.10/- each 300.00 300.00
5,500,000 (As at 31/12/2008, 5,500,000) Preference Shares of Rs. 100/- each 550.00 550.00
850.00 850.00
Issued, Subscribed and Paid-up
24,871,941 (As at 31/12/2008, 24,871,941) Equity Shares of Rs.10/- each, fully paid-up 248.72 248.72
(Of the above shares, 6,831,000 shares are allotted as fully paid-up
Bonus Shares by way of capitalisation of securities premium)
(Of the above shares, 17,534,718 (As at 31/12/2008, 17,534,718)
Shares are held by MHM Holding GmbH, Germany, the Holding Company)
248.72 248.72
RESERVES AND SURPLUS (SCHEDULE – 2)

Capital Reserve
State Cash Subsidy 1.62 1.62
Capital Redemption Reserve 31/12/2009 31/12/2008 — —
As per last Balance Sheet — 450.00

Less: Utilised for write-off of investments
pursuant to Sections 78, 80 and 100 of
the Companies Act, 1956.
(Refer Note No. 29 of Schedule-17) — 450.00
— —
Securities Premium Account 31/12/2009 31/12/2008 806.00 806.00
As per last Balance Sheet 806.00 4,177.43

Less: Utilised for write-off of investments
pursuant to Sections 78, 80 and 100 of
(Refer Note No. 29 of Schedule-17) — 3,371.43
806.00 806.00
General Reserve 31/12/2009 31/12/2008 2,504.96 2,004.96
As per last Balance Sheet 2,004.96 1,754.96

Add: Transferred from Profit and Loss Account 500.00 250.00
2,504.96 2,004.96
Surplus Balance in Profit and Loss Account 2,015.17 1,564.27
5,327.75 4,376.85
(Rs. in million)
As at As at
31/12/2009 31/12/2008
SECURED LOANS (SCHEDULE – 3)

From Banks
Working Capital Loans 65.16 1,887.50
[Including Foreign Currency Loan of Rs. Nil (As at 31/12/2008, Rs. 1,371.41 million)]
Foreign Currency Term Loans 1,129.73 750.56

[Term Loan due within one year Rs. 250.51 million
(As at 31/12/2008, Rs. 86.32 million)]
1,194.89 2,638.06
UNSECURED LOANS (SCHEDULE – 4)

Short-Term Loans and Advances from Banks
Foreign Currency Loans — 389.84
Rupee Loans — 400.00
Commercial Paper [Maximum amount outstanding at any time during the year
Rs. 550.00 million (Previous year, Rs. 450.00 million)] 400.00 —
400.00 789.84
FIXED ASSETS (SCHEDULE – 5)

(Refer Note No. 5 of Schedule-17) (Rs. in million)
PARTICULARS GROSS BLOCK DEPRECIATION / AMORTISATION NET BLOCK

As at Additions Deductions As at Upto For the Deductions Upto As at As at
01/01/2009 31/12/2009 31/12/2008 Year* 31/12/2009 31/12/2009 31/12/2008
Freehold Land 128.30 — — 128.30 — — — — 128.30 128.30

Leasehold Land 36.03 0.35 — 36.38 3.77 0.41 — 4.18 32.20 32.26
Buildings 1,296.74 12.85 0.56 1,309.03 265.74 39.37 0.17 304.94 1,004.09 1,031.00
Plant and Machinery 3,225.64 164.30 14.24 3,375.70 1,315.17 321.95 10.44 1,626.68 1,749.02 1,910.47
Laboratory Equipment 120.85 5.00 1.44 124.41 34.75 34.19 0.52 68.42 55.99 86.10
Wind Mills 19.02 — — 19.02 19.02 — — 19.02 — —
Computers 117.25 5.88 2.34 120.79 99.41 15.90 2.17 113.14 7.65 17.84
Furniture and Fittings 88.19 1.62 0.41 89.40 44.46 19.10 0.20 63.36 26.04 43.73
Vehicles 90.00 22.91 7.93 104.98 27.92 29.27 4.44 52.75 52.23 62.08
Intangible Assets:
— Software 24.40 1.97 — 26.37 13.32 6.98 — 20.30 6.07 11.08
— Technical Know-how 92.53 — — 92.53 32.45 18.50 — 50.95 41.58 60.08
Total (A) 5,238.95 214.88 26.92 5,426.91 1,856.01 485.67 17.94 2,323.74 3,103.17 3,382.94
Previous Year 4,941.61 340.31 42.97 5,238.95 1,561.61 319.54 25.14 1,856.01 3,382.94
Capital Work-in-Progress 104.04 126.73

Advances for Capital Expenditure 140.15 32.13
Total (B) 244.19 158.86
Total (A + B) 3,347.36 3,541.80
* Refer Note No. 31 of Schedule-17

(Rs. in million)
As at As at
31/12/2009 31/12/2008
INVESTMENTS (SCHEDULE – 6)
LONG-TERM INVESTMENTS
(At Cost, net of amount written-off, less provision for diminution in value)
Trade Investments
Investment in Subsidiary Companies (Unquoted)
Micro Inks GmbH, a wholly owned subsidiary company incorporated in Austria,
sold during the year (Refer Note No. 28 of Schedule-17) — 2,233.57
Less: Written-off by way of utilisation of Reserves (Refer Note No. 29 of Schedule-17) — 2,233.57
— —
Hostmann-Steinberg Inc., a wholly owned subsidiary company incorporated in USA
A. Non-cumulative Redeemable Series 'A' Preferred Stock with a par value of
USD 0.001 per share, fully paid-up,
— 500 shares issued in denomination of USD 32,900 — 804.25
Less: Written-off by way of utilisation of Reserves
— —
— 339 shares issued in denomination of USD 50,000 — 783.61
Less: Written-off by way of utilisation of Reserves
— —
— 400 (As at 31/12/2008, 200) shares issued in denomination of USD 50,000 965.70 488.10
B. Common Stock with a par value of USD 0.01 per share, fully paid-up,
— 2,280 (As at 31/12/2008, Nil) shares 0.11 —
Micro Inks (Singapore) Pte. Ltd., a wholly owned subsidiary company
incorporated in Singapore
— 1,188,397 Ordinary Shares with a par value of SGD 1.00 per share, fully paid
(Refer Note No. 30 of Schedule-17) 32.74 32.74
Non-Trade Investments (Unquoted)

Government Securities – 6 Year National Saving Certificates
(Deposited as security with third party) — 0.02
Other Investments – Rs. 2,600 (100 fully paid-up Equity Shares of
Rs. 25/- each of The Shamrao Vithal Co-operative Bank Ltd.) 0.00 0.00
998.55 520.86
Less: Provision for Diminution in Value 27.36 27.36
971.19 493.50
INVENTORIES (SCHEDULE – 7)
At lower of Cost (Less: Write-off for Obsolescence) and Net Relisable Value
Consumable Stores 54.27 53.73
Stock-in-Trade
Raw Materials and Packing Materials 1,023.12 1,239.51
Semi-Finished Goods 419.56 478.19
Finished Goods:
— Manufactured 486.50 333.87
— Traded 0.03 1.37
486.53 335.24
1,983.48 2,106.67
(Rs. in million)
As at As at
31/12/2009 31/12/2008
SUNDRY DEBTORS (SCHEDULE – 8)
Debts Outstanding
Over Six Months 62.66 426.95
Others 3,304.29 3,483.66
Total Debts * 3,366.95 3,910.61
Less: Provision for Doubtful Debts 49.32 149.56
3,317.63 3,761.05
* of the above Debts
(a) Fully Secured, Considered Good 107.59 83.27
(b) Unsecured, Considered Good 3,210.04 3,677.78
(c) Unsecured, Considered Doubtful 49.32 149.56
Total Debts 3,366.95 3,910.61
Includes:
1. Dues from Subsidaries (Refer Note No. 6(a) of Schedule-17) 611.43 830.33
2. Dues from other companies under the same management within the meaning of 1,107.31 1,318.53
Section 370(1B) of the Companies Act, 1956 (Refer Note No. 6(b) of Schedule-17)
CASH AND BANK BALANCES (SCHEDULE – 9)

Cash and Stamps on Hand 0.98 0.52
Balances with Scheduled Banks
– In Current Accounts 100.42 67.73
– In Dividend Accounts 3.01 2.72
– In Fixed Deposit Accounts / Margin Accounts (including interest accrued thereon) 0.27 0.22
103.70 70.67
104.68 71.19
LOANS AND ADVANCES (SCHEDULE – 10)

(Unsecured – Considered Good)
Advance Payment of Taxes (Net of Provisions) 43.79 93.25
Advances Recoverable in Cash or in Kind or for value to be received 325.25 399.26
Bills of Exchange 28.23 25.93
Balances with Excise and Customs 70.10 25.44
Deposits 42.91 43.50
510.28 587.38
CURRENT LIABILITIES AND PROVISIONS (SCHEDULE – 11)
CURRENT LIABILITIES
Acceptances 164.74 153.78
Sundry Creditors (Refer Note No. 8 of Schedule-17)
– Total outstanding dues of micro enterprises and small enterprises; and 15.52 8.35
– Total outstanding dues of creditors other than micro enterprises and small enterprises 2,113.59 1,578.94
2,129.11 1,587.29
Advances from Customers 147.16 107.15
Investor Education and Protection Fund shall be credited by Unpaid Dividend # 3.01 2.72
Other Liabilities 46.77 22.32
Interest Accrued but not Due on Loans 11.23 46.24
2,502.02 1,919.50
PROVISIONS
Provision for Dividend Distribution Tax 25.36 25.36
Provision for Compensated Absences 22.07 21.41
Provision for Gratuity (Refer Note No. 14(a) of Schedule-17) — 19.24
196.66 215.24
# This figure reflects the position of unclaimed dividend as at December 31, 2009. The actual amount to be transferred
to the Investor Education and Protection Fund in this respect shall be determined on the due dates.
SCHEDULES TO THE PROFIT AND LOSS ACCOUNT

(Rs. in million)
31/12/2009 31/12/2008
SALES AND OTHER OPERATING INCOME (SCHEDULE – 12)
Sales (Domestic) 7,327.18 6,975.12
Sales (Export) (Refer Note No. 9(a) of Schedule-17) 6,907.47 7,183.31
Other Operating Income 76.90 69.08
14,311.55 14,227.51
OTHER INCOME (SCHEDULE – 13)

Sale of Scrap Material 36.93 32.71
Miscellaneous Income (Refer Note No. 11 of Schedule-17) 3.10 12.52
40.03 45.23
MANUFACTURING AND OTHER EXPENSES (SCHEDULE – 14)

Salaries, Wages and Bonus 504.93 462.97
Staff Welfare Expenses 21.44 21.06
Contribution to Provident Fund and Other Funds (Refer Note No. 14 of Schedule-17) 12.15 25.73
538.52 509.76
Power and Fuel 557.24 508.37

Insurance 22.29 20.48
Telephone 7.47 7.53
Travelling and Conveyance 27.07 28.20
Office and Godown Rent 13.01 12.33
Rates and Taxes 18.29 6.32
Sales Commission 18.89 21.51
Freight Outward 483.51 522.21
Discount and Deductions 189.77 158.03
Repairs and Maintenance — Buildings 28.85 20.32

— Machinery 78.80 75.89
— Electricals 14.53 14.47
122.18 110.68
Loss on Sale / Retirement of Fixed Assets (Net) 4.49 4.46
Loss on Sale of Trade Investment in Subsidiary 1.29 —
Royalty 201.01 150.24
Miscellaneous Expenses (Refer Note No. 12 of Schedule-17) 395.99 281.77
2,675.00 2,423.98
(INCREASE) / DECREASE IN SEMI-FINISHED GOODS AND

FINISHED GOODS STOCK (SCHEDULE – 15)
Opening Stock — Semi-Finished Goods 478.19 543.13
— Finished Goods (including Goods Traded) 335.24 407.53
TOTAL (A) 813.43 950.66
Closing Stock — Semi-Finished Goods 419.56 478.19
— Finished Goods (including Goods Traded) 486.53 335.24
TOTAL (B) 906.09 813.43
(A) – (B) (92.66) 137.23
SCHEDULES FORMING PART OF THE ACCOUNTS

SIGNIFICANT ACCOUNTING POLICIES (SCHEDULE – 16)
1. Accounting Assumption
The financial statements have been prepared under historical cost convention on an accrual basis and in accordance
with the generally accepted accounting principles in India and the applicable accounting standards specified in the
Companies (Accounting Standards) Rules, 2006, notified by the Central Government in terms of Section 211(3C) of
2. Use of Estimates
The preparation of financial statements requires the management of the Company to make estimates and assumptions
that affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities as at the
date of the financial statements and reported amounts of income and expenses during the year. Examples of such
estimates include provisions for doubtful debts, employee retirement benefit plans, provision for income taxes and
the useful lives of fixed assets. The Management believes that the estimates used in preparation of the financial
statements are prudent and reasonable. Future results could differ from these estimates.
3. Fixed Assets
Fixed assets are stated at historical cost of acquisition or construction less accumulated depreciation / amortisation.
All costs relating to the acquisition and installation of fixed assets are capitalised. The cost excludes the duty benefits
admissible against installation of the specific assets.
Interest on borrowed money allocated to and utilised for fixed assets, pertaining to the period up to date of capitalisation
is capitalised in accordance with the Accounting Standard-16 “Borrowing Costs”.
Advances paid towards acquisition or construction of fixed assets and the cost of assets not put to use as at reporting
date are disclosed under capital work-in-progress.
4. Intangible Assets
Intangible assets comprising of cost incurred to acquire computer software licences and technical know-how are
stated at cost less accumulated amortisation.
Interest on borrowed money allocated to and utilised for intangible assets, pertaining to the period up to date of
capitalisation is capitalised in accordance with the Accounting Standard-16 “Borrowing Costs”.
Advances paid towards acquisition of intangible assets, which is not put to use as at reporting date is disclosed
under capital work-in-progress.
5. Depreciation / Amortisation
Depreciation on fixed assets is provided on the Straight-Line Method, at rates derived on the basis of the estimated
useful lives of the assets determined by the management as given below, except that depreciation on Buildings and
Plant and Machinery, other than those described below, is provided at the rates prescribed in Schedule XIV of the
Companies Act, 1956.
S. Type of Assets Useful Life
No. (in Years)
(a) Plant and Machinery:
(i) Contribution to Common Effluent Treatment Plant, Factory Equipment,
Material Handling Equipment and Storage Tank with third party 15
(ii) Air Conditioner, Fire and Safety Equipment, Forklift Truck, Stacker
and Weighing Balance 10
(iii) Fire Tender and Tractor and Trailer 8
(iv) Communication Equipment (Other than Mobile Phone), Office Equipment,
Photocopier and Refrigerator 5
(v) Mobile Phone and Tote Bin 3
(b) Laboratory Equipment 10
(c) Computers 3
(d) Furniture and Fittings 10
(e) Vehicles 5
(f) Intangible Assets:
(i) Software 4
(ii) Technical Know-how 5
Leasehold Land is amortised over the unexpired period of lease.
Depreciation on assets not owned by the Company included in Gross Block is provided over the estimated period of
the economic life of the assets.
Depreciation is charged on pro-rata basis for the assets purchased / sold during the year.
6. Impairment of Assets
The carrying value of assets / cash generating units at each balance sheet date is reviewed for impairment.
If any indication of such impairment exists, the recoverable amount of those assets is estimated and impairment loss
is recognised, if the carrying amount of those assets/cash generating units exceeds their recoverable amount.
The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by
discounting future cash flows to their present value based on appropriate discount factor. When there is indication as
at each balance sheet date, that an impairment loss recognised for asset in prior accounting year no longer exists or
may have decreased such reversal of impairment loss is recognised.
7. Investments
Long-term investments are stated at the cost, net of amount written-off, less provision for diminution in value other than
temporary. Investments that are readily realisable and intended to be held for not more than a year from the date of
investment are classified as current investments. Current investments are stated at lower of cost and fair value.
8. Inventories
The finished and semi-finished inventories are valued at lower of cost on absorption basis and net realisable value.
The raw materials and packing materials are valued at lower of cost and net realisable value. However, materials
and other items held for use in production of finished goods are not written down below cost if the products, in which
they will be incorporated, are expected to be sold at or above cost. Cost is determined on a transactional weighted
average basis, net of CENVAT benefits availed by the Company. The items imported under Duty Entitlement Pass
Book (DEPB) / Duty Free Replenishment Certificate (DFRC) / Advance Licence (AL) / Special Import Licence (SIL)
are valued inclusive of the notional duty benefits availed.
Damaged, unserviceable and inert stocks are suitably depreciated.
Excise Duty and Customs Duty payable on goods held in the bonded warehouse are provided in the valuation of
inventory.
Consumables and other spares, tools, etc., are valued at lower of cost (transactional weighted average cost, net of
CENVAT benefits availed by the Company) and net realisable value.
9. Employee Benefits
The Company has both defined contribution and defined benefit plans, of which some have assets in special funds
or similar securities. The plans are financed by the Company and in the case of some defined contribution plans by
the Company along with its employees.
(a) Defined Contribution Plan
These are plans in which Company pays pre-defined amounts to separate funds and does not have any legal or
informal obligation to pay additional sums. These comprise of contributions to the Employee’s Provident Fund and
Family Pension Fund, which are reported as expenses during the year in which the employees perform the services.
(b) Defined Benefit Plan
At the reporting date, the Company’s liabilities towards Gratuity / Compensated absences is determined by
independent actuarial valuation using the projected unit credit method which considers each year of service as
giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final
obligation. Past services are recognised on a straight-line basis over the average period until the amended
benefits become vested. Actuarial gain and losses are recognised immediately in the Profit and Loss Account
as income or expense. Obligation is measured at the present value of estimated future cash flows using a
discounted rate that is determined by reference to market yields at the Balance Sheet date on Government
bonds where the currency and terms of the Government bonds are consistent with the currency and estimated
terms of the defined benefit obligation.
Gratuity to employees is covered under Group Gratuity Life Assurance Scheme of the Life Insurance Corporation
of India.
Company recognises the undiscounted amount of short-term employee benefits like Medical Reimbursement,
Leave Travel Assistance, etc., during the accounting year based on service rendered by the employees.
10. Provisions and Contingencies

A provision is recognised when the Company has a present legal or constructive obligation as a result of past event
and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable
estimate can be made. Provisions (excluding retirement benefits) are not discounted to its present value and are
determined based on best estimate required to settle the obligation at the Balance Sheet date. These are reviewed
at each Balance Sheet date and adjusted to reflect the current best estimate. Contingent liabilities are not recognised
in the Profit and Loss Account but are disclosed in Notes to the Accounts.
11. Revenue Recognition

Domestic Sales are recognised at the time of despatch to the customer, invoicing being the conclusive event.
Export Sales are recognised on the basis of dates of bills of lading.
Gross Sales include the excise duty recovered but exclude customs duty, education cess, sales tax and are net of
trade discounts. Other recoveries charged separately in invoice are set off against the respective expenditure heads.
12. Export Benefits

Export entitlements under Duty Entitlement Pass Book (DEPB) and Duty Free Replenishment Certificate (DFRC)
scheme are recognised in the Profit and Loss Account when the right to receive credit as per the terms of the
scheme is established in respect of the exports.
Obligation / Entitlement on account of Advance Licence (AL) and Special Import Licence (SIL) scheme for import of
raw material are accounted for on purchase of raw material and / or export sale.
Export benefits from DEPB / DFRC are considered as ‘Other Operating Income’. Benefits from AL and SIL are
netted from ‘Materials Consumed’.
13. Research and Development

Expenditure incurred during research phase is recognised as expense when incurred.
Expenditure incurred during development phase is capitalised if it can be demonstrated that such expenditure would
result in future economic benefit.
Other development expenditure is recognised as expense when incurred.
14. Foreign Currency Translations

Transactions in foreign currency are recorded at the rates of exchange in force at the time of occurrence of the
transactions.
Monetary items denominated in foreign currency as at the reporting date are stated at the rates of exchange prevailing
at the reporting date and resultant gain / loss are adjusted to Profit and Loss Account.
Forward contracts to which Accounting Standard-11 ‘The Effect of Change in Foreign Exchange Rates’ has been
applied, the premium or discount arising at the inception of such forward exchange contracts are amortised as
expense or income over the life of the relevant contracts. Exchange differences on such contracts are recognised as
expense or income in Profit and Loss Account in the reporting period in which the exchange rates change.
Derivative contracts open as at reporting date, other than the forward contracts to which Accounting Standard-11
‘The Effect of Change in Foreign Exchange Rates’ has been applied, are marked to market keeping in view the
principle of prudence.
15. Assets Taken on Lease

Operating lease payments are recognised as expenditure in Profit and Loss Account on a straight-line basis,
representative of the time pattern of benefits received from the use of the assets taken on lease.
16. Taxation
The Provision for Current Income Tax is the aggregate of the balance provision for tax for three months ended
March 31, 2009 and the estimated provision based on the taxable profit of remaining months upto
December 31, 2009, the actual tax liability, for which, will be determined on the basis of the results for the period
April 1, 2009 to March 31, 2010 in accordance with the Income-tax Act, 1961.
Provision for Fringe Benefit Tax (FBT) is made in accordance with the provisions of the Income-tax Act, 1961.
Deferred Tax is recognised, on timing differences (other than those which are expected to be reversed during the tax
holiday period), being the difference between taxable income and accounting income that originate in one period and
are capable of reversal in one or more subsequent periods. Deferred Tax Assets are recognised if there is reasonable
certainty that there will be sufficient future taxable income to realise such assets. In situations where the Company
has unabsorbed depreciation or carry forward losses under tax laws, Deferred Tax Assets are recognised only to the
extent that there is virtual certainty supported by convincing evidence that there will be sufficient future taxable
income to realise such assets. The carrying amount of Deferred Tax Assets is reviewed at each Balance Sheet date
and is written down to the extent that it is no longer reasonably / virtually certain that sufficient future taxable income
will be available against which Deferred Tax Asset can be realised.
17. Earnings Per Share

Basic Earnings Per Share is calculated by dividing the net profit for the year attributable to equity shareholders by the
weighted average number of equity shares outstanding during the year. The weighted average number of equity
shares outstanding during the year is adjusted for events of bonus issues and share split.
For the purpose of calculating Diluted Earnings Per Share, the net profit for the year attributable to equity shareholders
and the weighted average number of equity shares outstanding during the year are adjusted for the effect of all
dilutive potential equity shares.
SCHEDULES FORMING PART OF THE ACCOUNTS

NOTES TO THE ACCOUNTS (SCHEDULE–17)
(Rs. in million)
1. Contingent Liabilities not provided for, in respect of: As at As at
31/12/2009 31/12/2008
(a) Counter Guarantees given to banks 84.76 64.23

(b) Corporate Guarantees given to banks on behalf of the Subsidiary
Company [USD 12.80 million, (As at 31/12/2008, USD 10.00 million)]
[Amount outstanding USD 10.30 million, Rs. 479.36 million,
(As at 31/12/2008, USD 10.00 million, Rs. 487.20 million)] 595.84 487.30
(c) Income Tax, Fringe Benefit Tax, Sales Tax, Central Excise and
Service Tax demands:
(i) in respect of matters which are contested by the Company 80.23 54.11
(ii) in respect of matters decided in Company’s favour where
the department is in further appeal 347.75 345.83
(d) Bills Discounted 220.44 234.90
(Rs. in million)
2. Capital Commitments: As at As at
31/12/2009 31/12/2008
Estimated amount of contracts remaining to be executed on Capital Account
and not provided for [net of advances of Rs. 140.15 million (As at 31/12/2008,
Rs. 32.13 million)] 74.07 14.22
3. Security for Loans:

(a) ECB Loan of Rs. 172.63 million (USD 4 million) [As at 31/12/2008, Rs. 258.96 million (USD 6 million)] from
ICICI Bank Limited, Singapore, is secured by way of pari-passu first charge on movable properties (save and
except stocks and book debts), both present and future, of the Company.
(b) ECB Loan of Rs. 245.80 million (USD 5 million) [As at 31/12/2008, Rs. 245.80 million (USD 5 million)] from
The Hongkong and Shanghai Banking Corporation Limited, Hong Kong, ECB Loan of Rs. 432.00 million
(USD 9 million) [As at 31/12/2008, Rs. 245.80 million (USD 5 million)] from Standard Chartered Bank,
United Kingdom, and ECB Loan of Rs. 279.30 million (USD 6 million) (As at 31/12/2008, Nil) from DBS Bank
Limited, Singapore, are secured or to be secured by way of first pari-passu charge on immovable and movable
properties (save and except stocks and book debts), both present and future, of the Company.
(c) Working capital loans [including Foreign Currency Loan of Rs. Nil (As at 31/12/2008, Rs. 1,371.41 million)] are
secured by way of first pari-passu charge on all the stocks and book debts, both present and future, and are
further secured by way of second charge on the immovable properties, both present and future, of the Company.
4. (a) The following are the outstanding derivative instruments:
Type of Contract Purpose of No. of Currency Value in FC Value in INR

Contract Contracts (in million) (in million)
(i) Forward Contracts – Sell Hedging — — —
(14) USD (48.50) (2,362.44)
(ii) Forward Contracts – Buy Hedging — — —
(1) USD (5.00) (243.65)
(iii) Interest Rate Swap Contract Hedging 3 USD 14.00 651.70
(Notional Principal) (2) USD (10.00) (487.30)
(iv) Currency Coupon Swap Contract Hedging 2 USD 10.00 465.50
(2) USD (10.00) (487.30)
(v) Principal Only Swap Contract Hedging 1 USD 4.00 186.20
(1) USD (6.00) (292.38)

Figures within brackets relate to as at 31/12/2008.
(b) The net foreign currency exposure that have not been hedged by derivative instruments or otherwise:
Currency As at 31/12/2009 As at 31/12/2008
Value in FC Value in INR Value in FC Value in INR

(in million) (in million) (in million) (in million)
(i) Receivable AUD 4.78 200.04 4.94 169.67
EUR 0.45 30.23 0.22 14.78
USD 2.19 101.19 — —
HKD — — 4.00 22.75
SGD — — 0.02 0.58
(ii) Payables USD — — 8.45 415.81
GBP 0.03 2.17 — —
5. Fixed Assets where ownership is not with the Company:

(a) Plant and Machinery includes HT line installation having net block of Rs. 17.15 million (As at 31/12/2008,
Rs. 8.64 million), the ownership of which rests with the Electricity Company / Board.
(b) Plant and Machinery includes contribution for Common Effluent Treatment Plant having net block of
Rs. 2.12 million (As at 31/12/2008, Rs. 3.01 million), the ownership of which rests with a third party.
6. (a) Dues from Subsidiaries:

(Rs. in million)
As at As at
31/12/2009 31/12/2008
(i) Hostmann-Steinberg Inc., USA 611.43 796.23
(ii) Micro Inks (Hong Kong) Limited, Hong Kong — 34.10
Total 611.43 830.33
(b) Dues from other companies under the same management within the meaning of Section 370(1B) of the
Companies Act, 1956:
(Rs. in million)
As at As at
31/12/2009 31/12/2008
(i) Michael Huber München GmbH, Germany 360.29 446.99
(ii) Hostmann-Steinberg GmbH, Germany 268.47 414.94
(iii) Stehlin + Hostag AG, Switzerland 189.74 182.31
(iv) Hostmann-Steinberg Australia Pty. Ltd., Australia 200.04 169.67
(v) Hostmann-Steinberg Limited, Canada 33.75 68.05
(vi) Huber Chile S.A., Chile 1.96 8.34
(vii) Huber Italia S.p.A., Italy 6.97 3.32
(viii) Huber Inks (Shenzhen) Ltd., China 20.78 24.91
(ix) Hostmann-Steinberg South Africa (Pty.) Ltd., South Africa 1.90 —
(x) PT Huber Inks Indonesia, Indonesia 23.41 —
Total 1,107.31 1,318.53
7. Loans to Directors:
(Rs. in million)
Loan to Employees includes: As at As at
31/12/2009 31/12/2008
Loan to Managing Director — —
Maximum amount outstanding during the year — 0.38
8. (a) Sundry Creditors include principal amount of Rs. 15.52 million (As at 31/12/2008, Rs. 8.35 million) due to the
suppliers covered under Micro, Small and Medium Enterprises Development Act, 2006.
(b) There is no interest paid / payable during the current year as well as in the previous year by the Company to
such suppliers.
(c) The above information takes into account only those suppliers in respect of whom such information is available
with the Company.
9. (a) Sales (Export) is net of exchange rate fluctuation loss of Rs. 117.88 million (Previous year, Rs. 182.10 million).
(b) Materials Consumed includes exchange rate fluctuation loss on imported materials of Rs. 17.16 million (Previous
year, Rs. 88.31 million).
10. Interest and Other Finance Charges of Rs. 160.67 million (Previous year, Rs. 761.68 million) is arrived at as
under:
(Rs. in million)

31/12/2009 31/12/2008
(a) Interest on Fixed Period Loans 54.59 114.33

(b) Other Interest 85.57 154.84
(c) Loss on Swapping Interest Coupon 35.11 13.02
(d) Exchange Rate Fluctuation (Gain) / Loss on Foreign Currency Loans (6.75) 484.07
168.52 766.26
Less:
(e) Interest Capitalised — 0.79
(f) Interest Received from Customers and Others (Gross) 2.62 3.79
[Tax Deducted at Source Rs. 0.79 million (Previous year, Rs. 0.58 million)]
(g) Interest Received on Income-tax Refund of earlier years 5.23 —
Total 160.67 761.68
11. Miscellaneous income under Other Income (Schedule-13) of previous year includes exchange rate fluctuation gain
of Rs. 11.93 million on reduction in Capital by Subsidiary.
12. Miscellaneous expenses under Manufacturing and Other Expenses (Schedule-14) includes:
(Rs. in million)

31/12/2009 31/12/2008
(a) Auditors’ Remuneration

(i) Audit Fees 2.10 1.90
(ii) Other Matters 2.53 1.98
(iii) Out of Pocket Expenses — 0.03
(iv) Taxation Matters 0.68 0.97
5.31 4.88
(b) Bad Debts Including Provision / (Reversal of Provision) for
Doubtful Debts (Net) 11.30 (1.75)
(c) Directors’ Sitting Fees 0.88 0.75
(d) Excise Duty# 9.35 4.76
#
Relates to the difference between closing and opening stock. Excise Duty recovered from customers is shown as
a deduction from Sales and Other Operating Income (Gross) in Profit and Loss Account.
13. In compliance with the Announcement dated March 29, 2008, by the Institute of Chartered Accountants of India,
the Company has provided for, as at 31/12/2009, loss of Rs. 3.50 million (As at 31/12/2008, Rs. 227.48 million)
on all outstanding derivative contracts by marking them to market keeping in view the principle of prudence,
other than for forward contracts to which Accounting Standard-11 ‘The Effect of Change in Foreign Exchange
Rates’ has been applied.
14. Employee Benefits:
(a) Defined Benefit Plans – The Company makes annual contributions to the Micro Inks Limited Employees’
Gratuity Trust, who in turn, has taken Group Gratuity Scheme of the Life Insurance Corporation of India, which
is a funded defined benefit plan for qualifying employees. The scheme provides for lump-sum payment to
vested employees at retirement, death while in employment or on termination of employment as per the Company’s
Gratuity Scheme. Vesting occurs upon completion of five years of service.
(Rs. in million)
Expense recognised during the year [included in Manufacturing

and Other Expenses (Schedule-14) of Profit and Loss Account]: 31/12/2009 31/12/2008
(i) Current Service Cost 3.17 2.78
(ii) Interest Cost 2.63 2.20
(iii) Expected Return on Plan Assets (5.03) (1.86)
(iv) Actuarial (Gains) / Losses (2.47) 9.98
Total (1.70) 13.10
Change in the Obligation during the year:
(i) Present Value of Defined Benefit Obligation at the beginning of the year 39.27 27.39
(ii) Current Service Cost 3.17 2.78
(iii) Interest Cost 2.63 2.20
(iv) Benefit Paid (1.31) (2.97)
(v) Actuarial (Gains) / Losses (5.54) 9.87
Present Value of Defined Benefit Obligation at the end of the year 38.22 39.27
Change in Assets during the year:
(i) Plan Assets at the beginning of the year 20.03 17.89
(ii) Contributions by Employer 24.01 3.36
(iii) Expected Return on Plan Assets 5.03 1.86
(v) Actuarial Losses (3.07) (0.11)
Plan Assets at the end of the year 44.69 20.03
The major categories of plan assets as a percentage of total plan:
Qualifying Insurance Policy 100% 100%
Reconciliation of Net Asset / (Liability) recognised in the
Balance Sheet during the year:
(i) Net Asset / (Liability) at the beginning of the year (19.24) (9.50)
(ii) Employer Income / (Expense) 1.70 (13.10)
(iii) Employer Contributions 24.01 3.36
(iv) Net Asset / (Liability) at the end of the year 6.47 (19.24)
(v) Actual Return on Plan Assets 1.96 1.75
Actuarial Assumptions:
(i) Discount Rate 8.25% 6.50%
(ii) Expected Rate of Return on Plan Assets 8.00% 8.00%
(iii) Expected Rate of Salary Increase 5.00% 5.00%
(iv) Attrition Rate 2.00% 2.00%
(v) Mortality Post-Retirement LIC (1994-96) Ultimate
Amounts for the current and previous years / period are as follows:
Year ended Year ended Year ended Nine-month
31/12/2009 31/12/2008 31/12/2007 period ended
31/12/2006
(i) Defined Benefit Obligation 38.22 39.27 27.39 23.06

(ii) Plan Assets 44.69 20.03 17.89 16.16
(iii) Surplus / (Deficit) 6.47 (19.24) (9.50) (6.90)
(iv) Experience Adjustments on
Plan Assets (3.07) (0.11) (0.13) 0.97
(v) Experience Adjustments on
Plan Liabilities 3.08 2.47 3.32 3.01
(b) Defined Contribution Plans:
Amount recognised as an expense and included in the Manufacturing and Other Expenses (Schedule-14)
of the Profit and Loss Account Rs. 13.85 million (Previous year, Rs. 12.63 million).
(c) Expected rate of return on assets is taken on the basis of the benchmark rate on Government Securities for the
tenure of payment.
(d) The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority,
promotion and other relevant factors, such as supply and demand in the employment market.
15. Managerial Remuneration:
(Excluding provision for compensated absences and gratuity on retirement since the same is provided on an actuarial
basis for the Company as a whole.)
(a) Manufacturing and Other Expenses under Schedule-14 include Managerial Remuneration as under:
(Rs. in million)

31/12/2009 31/12/2008
(i) Salary 7.76 6.53
(ii) Perquisites 0.07 0.15
(iii) Contribution to Provident Fund 0.69 0.58
(iv) Commission to Non-Executive Directors 2.50 1.84
Total 11.02 9.10
(b) Computation of Net Profit in accordance with Sections 198 and 309(5) of the Companies Act, 1956,
and calculation of commission payable to Directors.
(Rs. in million)

31/12/2009 31/12/2008
Profit Before Tax 1,499.48 1,110.70
Add: Managerial Remuneration 11.02 9.10
Directors’ Sitting Fees 0.88 0.75
Provision for Doubtful Debts 21.03 20.99
1,532.41 1,141.54
Less: Reversal of Provision for Doubtful Debts 10.40 26.08
Bad Debts Written-off against Provision for Doubtful Debts 110.86 4.98
Capital Surplus on Sale / Retirement of Fixed Assets 0.16 —
Wealth Tax 0.52 0.50
Profit U/s 349 of the Companies Act, 1956 1,410.47 1,109.98
Commission Payable to Non-Executive Directors:
Maximum allowed U/s. 309 of the Companies Act, 1956 14.10 11.10
Amount provided 2.50 1.84
Remuneration Payable to Managing Director

(Previous year also includes remuneration
payable to Executive Vice Chairman)
Maximum allowed U/s. 309 of the Companies Act, 1956 70.52 111.00
Amount Paid / Payable 8.52 7.26

16. Provision for current tax of Rs. 381.60 million (Previous year, Rs. 217.00 million) includes provision for wealth tax of
Rs. 0.52 million (Previous year, Rs. 0.50 million).
17. Revenue expenditure on Research and Development amounting to Rs. 44.15 million (Previous year, Rs. 32.77 million)
has been charged to Profit and Loss Account and capital expenditure relating to Research and Development amounting
to Rs. 0.05 million (Previous year, Rs. 5.42 million) has been included in ‘Fixed Assets (Schedule-5)’.
18. Components of Deferred Tax Assets and Liabilities:

(Rs. in million)
As at As at
Particulars 31/12/2009 31/12/2008
Deferred Tax Liability
Depreciation 393.91 455.01
Total (A) 393.91 455.01
Deferred Tax Assets
Provision for Compensated Absences / Gratuity 6.49 12.81
Provision for Mark to Market Losses on Derivative Contracts —# 24.04
Provision for items covered U/s. 43B of the Income-tax Act, 1961 7.73 —
Total (B) 29.33 81.61
Net Deferred Tax Liability (A-B) 364.58 373.40
#
Based on the Supreme Court ruling in the month of March 2009, revenue loss arising on Mark to Market (MTM) is
an allowable expenditure as per the Income-tax Act, 1961.
19. Earnings Per Share (Basic and Diluted): Year ended Year ended
31/12/2009 31/12/2008
Profit After Tax (Rs. in million) 1,125.49 902.85

Weighted Average No. of Equity Shares outstanding during the
financial year (in million) 24.87 24.87
Basic and Diluted Earnings Per Share of Rs. 10 each (in Rs.) 45.25 36.30
(Rs. in million)
20. Expenditure in Foreign Currency (Gross): Year ended Year ended
31/12/2009 31/12/2008
(a) Professional and Consultation Fees 0.91 1.27
(b) Interest 71.34 131.67
(c) Travelling 4.59 5.22
(d) Royalty 201.01 150.24
(e) Others 142.13 63.87
Total 419.98 352.27
21. Remittances in Foreign Currency for Dividend: Year ended Year ended
31/12/2009 31/12/2008
Number of Non-Resident Equity Shareholder(s) 1 1

Number of Equity Shares held by them 17,534,718 17,534,718
Gross Amount of Dividend (Rs. in million) 105.21 105.21
Financial Year to which it pertains 2008 2007
(Rs. in million)
22. Earnings in Foreign Exchange: Year ended Year ended

31/12/2009 31/12/2008
Exports at F.O.B. Value 6,761.66 7,044.84

(Rs. in million)
23. C.I.F. Value of Imports: Year ended Year ended
31/12/2009 31/12/2008
(a) Raw Materials 3,948.02 3,999.74

(b) Stores and Spares (including Capital Goods) 17.46 38.24
(c) Goods Traded 6.28 8.62
24. The Company’s significant leasing arrangements in respect of Operating Lease are:
(a) The Company has entered into a Lease Agreement for Power Generating Equipment and Waste Heat Recovery
Equipment. The lease agreement is cancellable by giving notice for the specified period. The Agreement is
renewable on mutually agreed terms after completion of the initial lease period. During the year, the Company
has paid Rs. 46.83 million (Previous year, Rs. 31.86 million) as Standby Charges (Minimum Charges) and
Rs. 7.93 million (Previous year, Rs. 4.68 million) as Variable Charges (Contingent Charges) for the electricity
generated and these amounts are included in ‘Miscellaneous Expenses’ under Manufacturing and Other Expenses
(Schedule-14).
(b) Lease arrangements for Premises in respect of Marketing Offices, Matching Centers and Depots are usually
renewable on mutually agreed terms but are not non-cancellable. Lease payments in respect of these premises
are disclosed as ‘Office and Godown Rent’ under Manufacturing and Other Expenses (Schedule-14).
(c) Lease arrangements for Premises for residential use of employees are usually renewable on mutually agreed
terms but are not non-cancellable. Lease payments in respect of these premises aggregating Rs. 0.75 million
(Previous year, Rs. 1.10 million) are included in ‘Salaries, Wages and Bonus’ under Manufacturing and Other
Expenses (Schedule-14).
(Rs. in million)
25. Materials Consumed * Year ended 31/12/2009 Year ended 31/12/2008
Class of Goods Qty. (MT) Value Qty. (MT) Value
Pigments 8,018 608.37 7,041 468.09

Resins 4,707 439.82 4,470 352.90
Solvents 24,626 1,213.28 21,186 1,299.40
Additives 3,282 535.26 3,159 509.01
Minerals and Vegetable Oils 34,654 1,525.14 29,972 1,448.05
Chemicals and Dyes 79,984 4,125.79 67,220 3,982.83
Packing Materials 629.02 614.60
Total 9,076.68 8,674.88
*Excludes materials manufactured and consumed internally as shown in Note 27(b).
26. Consumption of imported and indigenous Materials and Stores and Spares and the percentage of each to
the total consumption:
(Rs. in million)
Year ended 31/12/2009 Year ended 31/12/2008
Value % of Total Value % of Total

Consumption Consumption
(a) Materials Consumed

(i) Imported 4,413.46 48.62 3,999.85 46.11
(ii) Indigenous 4,663.22 51.38 4,675.03 53.89
Total 9,076.68 100.00 8,674.88 100.00
(b) Stores and Spares*

(i) Imported 14.61 12.08 28.93 25.07
(ii) Indigenous 106.29 87.92 86.49 74.93
Total 120.90 100.00 115.42 100.00
* Includes amount debited to repairs and maintenance.

27. Capacities, Production, Stock and Sales:

(a) Capacities and Production:
Class of Goods Unit Installed Capacity Actual Production
Per Annum as at* during the Year ended
31/12/2009 31/12/2008 31/12/2009 31/12/2008
Printing Inks MT 203,000 203,000 122,713 109,377
Resins and Varnishes # MT 55,600 55,600 30,779 25,992
Pigments / Flush Colours @ MT 46,500 46,500 3,899 3,940
Wire Enamels MT 3,450 3,450 2,585 2,009
Press Chemicals MT 5,000 5,000 1,352 1,131
By Products MT — — 29 13
* As certified by the Management.
# Based on available Capacity for production of Resins. Actual production includes Resins and Varnishes.
@ Based on available Capacity for production of Flush Colours. Actual production includes Pigments / Flush Colours.
Notes:
1. Under the Industrial Policy Statement dated July 24th, 1991, and the Notifications issued thereunder, there is no
licensing requirement for the Company’s products.
2. Capacity of Resins and Pigments / Flush Colours is total capacity available for captive and outside sale.
(b) Particulars of Stock and Sales:

(Rs. in million)
Class of Goods Opening Stock Closing Stock Captive Sales
Manufactured / Consumption
Traded Qty. (MT) Value Qty. (MT) Value Qty. (MT) Value Qty. (MT) Value
Printing Inks 2,111 263.60 3,951 413.01 25,158 2,822.72 95,716 11,998.74
(2,871) (303.48) (2,111) (263.60) (22,780) (2,641.06) (87,357) (11,894.16)
Resins and Varnishes 405 34.07 514 37.39 13,393 1,012.68 17,277 1,373.37
(870) (55.50) (405) (34.07) (12,400) (1,012.36) (14,057) (1,322.66)
Pigments / Flush 123 26.71 156 27.55 1,781 384.83 2,086 472.24
Colours
(207) (39.68) (123) (26.71) (1,739) (370.23) (2,285) (567.12)
Wire Enamels 67 6.55 60 4.96 24 2.58 2,568 254.83
(38) (3.47) (67) (6.55) (18) (1.92) (1,962) (228.67)
Press Chemicals 50 2.94 70 3.59 Nil Nil 1,331 114.35
(55) (3.12) (50) (2.94) (Nil) (Nil) (1,136) (98.16)
By Products Nil Nil Nil Nil Nil Nil 29 0.33
(Nil) (Nil) (Nil) (Nil) (Nil) (Nil) (13) (0.05)
Goods Traded* Nil Nil 4.10 20.62
(Machinery and Others)
(Nil) (Nil) (6.67) (47.28)
Goods Traded# 6 1.37 0 0.03 2 0.53 4 0.17
(7) (2.28) (6) (1.37) (Nil) (Nil) (1) (0.33)
Total 2,762 335.24 4,751 486.53 40,358 4,227.44 119,011 14,234.65
(4,048) (407.53) (2,762) (335.24) (36,937) (4,032.24) (106,811) (14,158.43)
Figures within brackets relate to the previous year.

* Diverse quantity units. Purchases / Cost of Sales value Rs. 25.23 million (Previous year, Rs. 38.51 million).
#
There is no purchase made during the current year as well as previous year. Closing Stock Qty. (MT) ‘0’
denotes 94 Kgs.
28. Investment in Micro Inks GmbH, Austria, a wholly owned subsidiary, disclosed under Schedule-6, until the
previous year, represented advance subscription. This investment has been sold during the year to
MHM Holding GmbH, and accordingly that company is no longer a subsidiary company.
29. (a) In the previous year, in view of the significant accumulated losses incurred by the Company’s wholly owned
subsidiaries (names/relationship as elaborated below) having eroded the value of the Company’s investments
and in the absence of certainty of recovery of such losses in visible time, the credit balances in Securities
Premium Account to the extent of Rs. 3,371.43 million and Capital Redemption Reserve Account of
Rs. 450.00 million had been utilised for the purpose of writing-off of such Investments in one of the Company’s
wholly owned subsidiaries namely Micro Inks GmbH, Austria; carrying value thereof Rs. 2,233.57 million
and its step-down wholly owned subsidiary Hostmann-Steinberg Inc., USA; carrying value thereof
Rs. 1,587.86 million, pursuant to the approval of the members of the Company at the Extraordinary
General Meeting held on August 30, 2008 and in accordance with Sections 78, 80 and 100 of the
Companies Act, 1956, read with Article 9 of the Articles of Association of the Company and as confirmed by
the Honourable High Court of Gujarat at Ahmedabad vide its Order dated October 15, 2008.
(b) In the previous year, Micro Inks GmbH, Austria, has also written-off the carrying value of its investment in
Hostmann-Steinberg Inc., USA, at Rs. 3,203.93 million as a charge to revenue.
(c) Subsequent to the foregoing investments being written-off, the Company has made further investment
of Rs. 965.81 million (As at December 31, 2008, Rs. 488.10 million) in Hostmann-Steinberg Inc., USA.
The accumulated losses as at December 31, 2009, of Hostmann-Steinberg Inc., USA, are Rs. 3,659.38 million
(including Rs. 155.30 million incurred during the year). As a result, the net worth in Hostmann-Steinberg Inc., USA,
as at December 31, 2009, is Rs. 853.82 million (As at December 31, 2008, Rs. 565.47 million).
(d) The Company also has an outstanding of Rs. 564.07 million (net) [As at December 31, 2008, Rs. 796.23 million
(net)] on account of debtors from Hostmann-Steinberg Inc., USA and has given corporate guarantee of
Rs. 595.84 million (As at December 31, 2008, Rs. 487.30 million), on their behalf, for loans given by banks.
(e) The Management, including that of Hostmann-Steinberg Inc., USA, has implemented series of initiatives
to improve the operating performance. The new pricing initiative is assisting in generation of higher cash
flows. There has also been implementation of cost containment strategy, by reducing the head count
significantly and other costs in order to align towards the future profitable business model. The Management
has also been restructured with more focus from the hubergroup, Germany, the ultimate parent Company.
The loss making long-term contracts have also exited fully and the customer base diversified and de-risked.
Micro Inks Limited continues to provide financial support to Hostmann-Steinberg Inc., USA, and is committed
to assist the latter in making the operations profitable. As a result of the foregoing improvement measures
and restructuring, losses of the Hostmann-Steinberg Inc., USA, for the year 2009 have decreased substantially
to Rs. 155.30 million from Rs. 385.45 million in 2008.
On the basis of the foregoing and the Balance Sheet of the Company having been trimmed in view of the
earlier investments being written-off as explained in paragraph 29(a) above, in the opinion of the Management,
no further losses are presently expected to occur on the additional investment of Rs. 965.81 million, outstanding
of Rs. 564.07 million (net) on account of debtors and on corporate guarantee of Rs. 595.84 million given to
banks. Accordingly, no provision is required to be made in the accounts, particularly since the investment is
strategic in nature and held for long-term.
30. In the previous year, pursuant to reduction in Share Capital of Micro Inks (Singapore) Pte. Ltd., a wholly owned
subsidiary Company, an amount of SGD 2.36 million (equivalent to Rs.76.28 million) has been received towards
extinguishment of 2,359,477 shares of SGD 1 each.
31. The Company has reviewed the useful lives of certain categories of fixed assets during the year. Consequently,
depreciation rates on these categories of assets have been revised, resulting in an additional charge for depreciation
by Rs. 151.51 million and a corresponding reduction in profit before tax for the year by a like amount.
32. Related Party Disclosures
Related party disclosures, as required by Accounting Standard-18 ‘Related Party Disclosures’, are given below.
(a) Where Control Exists:
S. No. Relationship Related Party
(i) Subsidiaries Micro Inks GmbH, Austria (upto November 1, 2009, sold during the year)
Hostmann-Steinberg Inc., USA (w.e.f. July 20, 2009, step-down subsidiary

upto July 19, 2009)
Micro Inks (Singapore) Pte. Ltd., Singapore
(ii) Step-down Subsidiary Micro Inks (Hong Kong) Ltd., Hong Kong (placed under Members' voluntary
liquidation on April 28, 2009)
(iii) Holding Company MHM Holding GmbH, Germany
(b) Name of related parties and description of relationship, where transactions have taken place during
the year:
(i) Fellow Subsidiaries: — Michael Huber München GmbH, Germany
— Hostmann-Steinberg GmbH, Germany
— Stehlin + Hostag AG, Switzerland
— Hostmann-Steinberg Australia Pty. Ltd., Australia
— Hostmann-Steinberg Limited, Canada
— Huber Chile S.A., Chile
— Huber Italia S.p.A., Italy
— Huber Inks (Shenzhen) Ltd., China
— Info-Lab Limited, Ireland.
— Hostmann-Steinberg South Africa (Pty.) Ltd., South Africa
— PT Huber Inks Indonesia, Indonesia
(ii) Subsidiary / Step-down Subsidiary: — Micro Inks GmbH, Austria (upto November 1, 2009)
— Hostmann-Steinberg Inc., USA
(iii) Holding Company: — MHM Holding GmbH, Germany
(iv) Key Management Personnel: — Mr. Ashwani Bhardwaj (Managing Director)

(c) Transactions with Related Parties:

(Rs. in million)
S. Name of Related Party Fellow Subsidiary / Holding Key Grand
No. Subsidiaries Step-down Company Management Total
Subsidiary Personnel
(i) Sales of Goods and Services 4,853.66 1,173.88 — — 6,027.54A
(5,180.32) (1,145.70) — — (6,326.02)
(ii) Purchase of Goods and Services 52.53 11.97 — — 64.50B
(52.70) (36.57) — — (89.27)
(iii) Purchase of Fixed Assets — — — — —
(4.92) — — — (4.92)
(iv) Other Expenditure 24.83 3.96 95.35 — 124.14C
(27.03) (3.05) — — (30.08)
(v) Reimbursement of Expenditure 2.88 0.44 7.92 — 11.24D

(Obtained)
(12.29) (1.79) (5.87) — (19.95)
(vi) Investments Made — 477.71 — — 477.71E
— (489.94) — — (489.94)
(vii) Sale of Investments — — 1.20 — 1.20F
— — — — —
(viii) Write-off of Investments — — — — —
— (3,821.43) — — (3,821.43)
(ix) Guarantees Given — 130.34 — — 130.34G
— — — — —
(x) Debts Written-off from Provision — 34.10 — — 34.10H
— — — — —
(xi) Remuneration and Perquisites — — — 8.52 8.52I
— — — (7.26) (7.26)
(xii) Gain / Loss on Exchange Rate Fluctuation -30.50 41.77 3.10 — 14.37J
(Net) [-ve sign denotes loss]
(184.82) (192.39) (-0.04) — (377.17)
(xiii) Royalty 201.01 — — — 201.01K
(150.24) — — — (150.24)
(xiv) Proposed Dividend (Equity) — — 105.21 — 105.21L
— — (105.21) — (105.21)
Note : Figures within brackets relate to previous year.

(A) Includes Sales of Goods and Services to Michael Huber München GmbH, Germany, amounting Rs. 1,788.07 million
(Previous year, Rs. 2,150.04 million), Hostmann-Steinberg GmbH, Germany, amounting Rs. 1,284.54 million
(Previous year, Rs. 1,114.25 million), Stehlin + Hostag AG, Switzerland, amounting Rs. 1,016.31 million
(Previous year, Rs. 967.36 million) and Hostmann-Steinberg Inc., USA, amounting Rs. 1,173.88 million
(Previous year, Rs. 1,145.70 million).
(B) Includes Purchases of Goods and Services from Stehlin + Hostag AG, Switzerland, amounting Rs. 9.38 million
(Previous year, Rs. 3.80 million), Info-Lab Ltd., Ireland, amounting Rs. 9.92 million (Previous year, Rs. 17.54 million),
Hostmann-Steinberg Inc., USA, amounting Rs. 11.97 million (Previous year, Rs. 36.57 million), Huber Inks (Shenzhen) Ltd.,
China, amounting Rs. 21.18 million (Previous year, Nil) and Hostmann-Steinberg GmbH, Germany, amounting
Rs. 11.17 million (Previous year, Rs. 7.06 million).
(C) Includes Other Expenditure paid to Hostmann-Steinberg GmbH, Germany, amounting Rs. 21.22 million
(Previous year, Rs. 19.78 million) and MHM Holding GmbH, Germany, amounting Rs. 95.35 million (Previous year, Nil).
(D) Includes Reimbursement of Expenditure (obtained) from Hostmann-Steinberg Australia Pty. Ltd., Australia, amounting
Rs. 1.35 million (Previous year, Rs. 5.52 million) and MHM Holding GmbH, Germany, amounting Rs. 7.92 million
(Previous year, Rs. 5.87 million).
(E) Includes Investment made in Non-cumulative Redeemable Series A Preferred Stocks in Hostmann-Steinberg Inc.,
USA, amounting Rs. 477.60 million (Previous year, Rs. 488.10 million).
(F) Comprises Sale of Investment made in Micro Inks GmbH, Austria, amounting Rs. 1.20 million (Previous year, Nil).
(G) Comprises Guarantees given on behalf of Hostmann-Steinberg Inc., USA, amounting Rs. 130.34 million
(Previous year, Nil).
(H) Comprises debts written-off from provision of Micro Inks (Hong Kong) Ltd., Hong Kong, amounting Rs. 34.10 million
(Previous year, Nil).
(I) Comprises Remuneration and Perquisites to Mr. Ashwani Bhardwaj amounting Rs. 8.52 million (Previous year,
Rs. 6.57 million).
(J) Includes Gain / (Loss) on exchange rate fluctuation on transactions with:
(Rs. in million)
Name of the Related Party Year ended Year ended

31/12/2009 31/12/2008
Hostmann-Steinberg Australia Pty. Ltd., Australia 28.75 (17.95)

Hostmann-Steinberg Inc., USA 41.77 180.31
MHM Holding GmbH, Germany 3.10 (0.04)
(K) Comprises Royalty paid/payable to Michael Huber München GmbH, Germany, amounting Rs. 201.01 million
(L) Comprises proposed dividend payable to MHM Holding GmbH, Germany, amounting Rs. 105.21 million
(d) Balances Outstanding: (Rs. in million)
S. Description Fellow Subsidiary / Holding Grand Total
No. Subsidiaries Step-down Company
Subsidiary
(i) Receivables 1,107.31 611.43 — 1,718.74
(1,318.53) (796.23) — (2,114.76)
(ii) Payables 61.64 47.36 80.38 189.38
(61.46) — — (61.46)
(iii) Investments# — 998.55 — 998.55
— (520.84) — (520.84)
(iv) Corporate Guarantees given — 595.84 — 595.84
— (487.30) — (487.30)
(v) Proposed Dividend Payable — — 105.21 105.21
— — (105.21) (105.21)
# Figures are net of write-off made in previous year aggregating Rs. 3,821.43 million.
33. Segment Information
In addition to the significant accounting policies applicable to the business segment as set out in Schedule-16,
the accounting policies in relation to the segment accounting are as under:
The Company has considered Business Segment as primary format for segment reporting, namely:
(a) Inks and Intermediates
(b) Other Products and Services (Lamination Adhesives, Wire Enamels, Ketonic Resins and Polyamide Resins)
These Business Segments have been identified and reported taking into account the product, nature of manufacturing
process, industry profile, differences in the risks and returns, the organisational structure and the internal management
reporting system.
Inks and Intermediates and Other Products and Services have different manufacturing process, risks and returns
and internal reporting system.
The Geographical Segment is considered as secondary format for reporting and identified by taking into account the
location of customers, size and risks prevailing in the market, internal organisational structure and the internal
management reporting system.
(a) Primary Segment: Business Segment
(Rs. in million)
Particulars Inks and Other Products Total
Intermediates and Services
Segment Revenue
External Revenue 12,820.48 944.33 13,764.81
(12,564.87) (817.91) (13,382.78)
Inter-segment Revenue 108.64 108.64
(79.86) (79.86)
Total 12,820.48 1,052.97 13,873.45
(12,564.87) (897.77) (13,462.64)
Less: Inter-segment Revenue 108.64 108.64
(79.86) (79.86)
Total Revenue 12,820.48 944.33 13,764.81
(12,564.87) (817.91) (13,382.78)
Segment Results
Segment Result 1,489.28 171.32 1,660.60
(1,774.78) (87.69) (1,862.47)
Less:
Interest and Other Finance Charges (Net) 160.67
(761.68)
Other 0.45
(Unallocated Expense-Unallocated Income) (-9.91)
Profit Before Tax 1,499.48

(1,110.70)
Segment Assets and Liabilities
Segment Assets 8,682.39 332.42 9,014.81
(9,456.60) (297.33) (9,753.93)
Unallocated Assets 1,219.81
(807.68)
Total Assets 10,234.62
(10,561.61)
Segment Liabilities 2,354.16 146.73 2,500.89

(1,781.73) (121.49) (1,903.22)
Unallocated Liabilities 197.79
(Exclude Loan Funds and Deferred Tax Liability) (231.52)
Total Liabilities 2,698.68

(2,134.74)
Fixed Assets’ Addition (within India) 187.94 8.64 196.58

(Excluding Capital Work-in-Progress) (325.12) (2.42) (327.54)
Unallocated Capital Expenditure 18.30
(12.77)
Total Addition to Fixed Assets 214.88
(340.31)
(Rs. in million)
Depreciation / Amortisation 438.65 9.35 448.00
(301.20) (4.76) (305.96)
Unallocated Depreciation / Amortisation 37.67
(13.58)
Total Depreciation / Amortisation 485.67
(319.54)
Non-Cash Expenses other than 6.19 1.48 7.67
Depreciation / Amortisation (28.88) (-1.07) (27.81)
Unallocated 1.57
(-1.00)
Total Non-Cash Expenses other than 9.24
Depreciation / Amortisation (26.81)
(b) Secondary Segment: Geographical Segment
(Rs. in million)
Segment Revenue
India 5,969.83 810.62 6,780.45
(5,459.39) (671.57) (6,130.96)
Outside India (including Export Benefit) 6,850.65 133.71 6,984.36
(7,105.48) (146.34) (7,251.82)
Total Revenue 12,820.48 944.33 13,764.81
(12,564.87) (817.91) (13,382.78)
Assets
Segment Assets
India 6,842.85 329.03 7,171.88
(7,216.35) (288.96) (7,505.31)
Outside India 1,839.54 3.39 1,842.93
(2,240.25) (8.37) (2,248.62)
Total 8,682.39 332.42 9,014.81
(9,456.60) (297.33) (9,753.93)
Unallocated Assets
India 248.62
(314.20)
Outside India 971.19
(493.48)

(10,561.61)
34. The figures of the previous year have been regrouped / rearranged wherever necessary.
For and on behalf of the Board
Anjum Bilakhia Ashwani Bhardwaj

Chairman Managing Director

Place : Vapi Vice President & Vice President &
Date : March 20, 2010 Company Secretary Chief Financial Officer
BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE

I. Registration Details
Registration No. : 1 6 5 9 8 State Code : 0 4
Balance Sheet Date : 3 1 / 1 2 / 2 0 0 9
II. Capital raised during the year (Amount in Rs. Thousand)
Public Issue : N I L Preferential Allotment : N I L

to Promoters
Bonus Issue : N I L GDR Issue : N I L
III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousand)
Total Liabilities : 7 5 3 5 9 3 8 Total Assets : 7 5 3 5 9 3 8
Sources of Funds
Paid-up Capital : 2 4 8 7 1 9 Reserves & Surplus : 5 3 2 7 7 5 1
Secured Loans : 1 1 9 4 8 8 8 Unsecured Loans : 4 0 0 0 0 0
Deferred Tax Liability : 3 6 4 5 7 9
Application of Funds
Net Fixed Assets : 3 3 4 7 3 6 0 Investments : 9 7 1 1 8 8
Net Current Assets : 3 2 1 7 3 9 0 Misc. Expenditure : N I L
IV. Performance of the Company (Amount in Rs. Thousand)
Turnover : 1 4 3 5 1 5 7 8 Total Expenditure : 1 2 8 5 2 0 9 3
Profit Before Tax : 1 4 9 9 4 8 5 Profit After Tax : 1 1 2 5 4 9 9
Earnings Per Share in Rs. : 4 5 . 2 5 Dividend Rate % : 6 0
V. Generic Names of Three Principal Products / Services of the Company (As per Monetary Terms)
Item Code No. (ITC Code) 3 2 1 5
Product Description P R I N T I N G I N K
Item Code No. (ITC Code) 3 9 0 9
Product Description R E S I N S A N D V A R N I S H E S
Item Code No. (ITC Code) 3 2 0 4 . 1 7
Product Description P I G M E N T S / F L U S H C O L O U R S


MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Overview
Micro Inks limited (MIL) is a Subsidiary of the hubergroup which has a history of more than 240 years in Ink business
with a network of companies worldwide and over 200 international sales and delivery centres through its subsidiaries,
branches and presence of local representatives with an annual sales excluding Micro Inks Limited of about
USD 680 million in the year 2009.
The hubergroup is an international group of autonomous companies that is focused on the manufacture and sale of
printing inks, printing varnishes, damping solution additives and printing auxiliaries. Micro Inks Limited headquartered at
Vapi (in the state of Gujarat) with manufacturing units at Vapi, Daman (in the Union Territory of Daman and Diu), Silvassa
(in the Union Territory of Dadra and Nagar Haveli) and a wholly owned subsidiary, at Kankakee near Chicago, Illinois,
USA. The Company has a fully backward integrated, seamless ink manufacturing unit and is present across the value
chain of the printing inks industry, viz., Pigments, Flush Pigments, Resins and Varnishes, Additives and Printing Inks.
The Company has a wide product portfolio and is the market leader in India.
The combined know-how of a global enterprise and its intensive research and development ensure that our innovative
product line remains technologically ahead, with consistent quality. Together with its subsidiaries and affiliates in the
hubergroup, the Company is one of the world's leading printing ink manufacturers. Leadership and pioneering position
have been achieved by implementing state-of-the-art research and production facilities and by offering an innovative
product range for the Printing industry.
Total sales of the hubergroup including Micro Inks are about USD 1 billion for 2009.
2009 – Sailing Smoothly in High Volatility
Economy and the Printing Industry
The Global economy has slowly and steadily come out of the recession phase prevalent throughout the year 2008.
Major economies including US, Japan, China and India are moving to green zone as reflected by the rising indices and
various growth numbers though backed by continuing stimulus packages. EURO Zone is still showing the mixed sentiments.
Fear of stimulus withdrawal is still a point of concern for the growing economies.
The Global printing ink market of USD 18.5 billion, split evenly between North America, Europe and Asia-Pacific.
While the North American and European sales have flattened out, the Asia-Pacific region continues to grow at a fast pace
of about 8%, and should soon become the largest region in terms of ink consumption, driven by economic growth in
China, India and other countries.
Printing Ink market domestically continued to grow at about 12%, a market of about Rs. 20 billion saw augmenting its
turnover on the back of stable growth and the overall Indian economic stability in its user industries such as FMCG,
media, flexible packaging and publishing and with commencement of the utilisation of higher capacities built during the
last year by printers on back of newer players entering the Indian market and consumers expecting global quality standards.
However, due to the global economic melt-down, the growth trends at the beginning of the year could not be sustained in
the second half of the year.
Micro Inks position as a market leader has improved, backed by absorption of global technology upon integration with the
hubergroup, introducing newer products in the market, giving it an edge over competition. Being a fully backward integrated
ink company, it has created for itself a strong platform to perform as mother plant to the rest of the hubergroup worldwide
apart from servicing its wholly owned subsidiary.
Micro Inks consolidated net revenues stood at Rs. 16,180 million, with 11% growth in Domestic Market and 7% decrease
in export markets. Net consolidated Profit for the year was Rs. 968 million up 187% compared to previous year on
account of increased profits of MIL by 25% and decreased losses of Hostmann-Steinberg Inc. (HST), USA, by 63%.
Hostmann-Steinberg Inc., USA, a wholly owned subsidiary of the company, witnessed a decrease in sales by 16% in
dollar terms to USD 75 million due to restructuring of business. The HST, USA, standalone net loss for the year stood at
USD 3.3 million as against USD 8.8 million in the previous year.
Revenues and Operations

Consolidated Revenues:
The US sales in the Web Ink segment stood at
Consolidated net revenues grew by 7% in volume
USD 58 million and in Sheetfed segment at USD 10
compared to previous year, stood at Rs. 16,180 million
million as compared to USD 61 million and USD 19
with a growth of 11% in domestic market, however
million, respectively, in previous year.
showed a decline of 7% in the international markets.
Five key customers (other than associates) in HST
Revenues from Liquid Inks grew by 11% whereas from
contributed to 18.5% and single largest external
Offset Inks lower by 4% as compared to previous year.
customer contributed to 4.4% of total sales.
Printing Inks volumes grew by 5% compared to
previous year. Sales to the hubergroup worldwide stood at
Rs. 4,772 million down by 6% as compared to
Domestic Revenues: previous year, mainly due to recessionary trend in

Europe. Captive sourcing is expected to increase in
Domestic net sales up by 11% at Rs. 6,857 million the coming years.
compared to previous year. Revenues from Liquid Inks
International Sales to Non-Associates evidenced a
grew by 12% and Offset Inks by 1% compared to previous
fall of 3% and stood at Rs. 981 million. Products have
year. Printing Inks volumes grew by 8% compared to
been accepted widely in the international market
previous year.
backed by stable technology from the hubergroup.
The growth was driven by buoyancy in printing ink

industry coupled with sectorial growth in publication and Operations
FMCG sectors backed by overall growth in economy. • Key raw materials such as copper, crude
This was further augmented by superior product derivatives, mineral and vegetable oils, saw a very
technology received from the hubergroup translating to volatile run during 2009 and put considerable
better printing quality and customer acceptability. pressure on margins in the last quarter of the year.
Top 50 customers contributed 49% while single largest • Consolidated raw material cost stood at 64% of
customer contributed only 5% of the domestic sales. sales, down 1% compared to previous year.
• MIL imports stood at 44% of total consumption on

International Sales was lower by 7% as compared to
continued sourcing of raw materials at internationally
2008, stood at Rs. 9,280 million.
competitive prices.
US Subsidiary Sales to end customers were at • Manufacturing and SGA costs were at 23% in line
USD 75 million as against USD 89 million for previous year. with previous year.
• MIL capacity utilisation for the year stood at 51% as

During the year HST, USA, focused on small customers
compared to 45% in previous year. R&D expenditure
with higher margins as compared to larger customers
during the year was Rs. 44 million.
with lower margins.
• Consolidated capital expenditure amounted to
As a result of better pricing and reduced fixed overheads, Rs. 248 million for the year for rationalisation and
HST, USA, witnessed 63% improvement in bottom line. modification to enhance operational efficiencies.
Financials
Profitability Capital Employed
Consolidated (Rs. in million) FY 2009 FY 2008

During the year the Company has repaid loans
Domestic Sales 6,857 6,200 amounting to Rs. 2,129 million at consolidated level.
Export Sales 9,280 9,926 The funds were generated from internal accruals and
reduction in working capital requirements.
Total Net Sales 16,138 16,126
Other Income 42 69 MIL further infused fresh equity of USD 10 million in

Total Revenue 16,180 16,195 the nature of preferred stock in its wholly owned
subsidiary in USA.
EBITDA 2,110 1,913
EBITDA (%) 13% 12% Consolidated Net Worth of the Company was at
Interest 185 775 Rs. 5,829 million as against Rs. 5,074 million in Dec. 08.
Depreciation 584 593
Tax 374 208
PAT 968 337
PAT (%) 6% 2%
EBITDA for FY 2009 was Rs. 2,110 million up 10%

compared to previous year. This was mainly due to
reduction in RMC by 1% and controlled overheads.
Interest Outgo was at Rs. 185 million for the year

(including hedge cost) as against Rs. 775 million in
previous year. Excluding forex gain / loss, Interest for
the year was Rs. 191 million as compared to
Rs. 291 million for 2008. Total Interest as percentage
to sales stood at 1%.
Sales to Capital Employed at 2.0 times as compared
Tax of MIL for the period aggregated to Rs. 374 million,
to 1.7 times in 2008. Capital employed decreased in
higher by Rs. 166 million as compared to 2008, due to
absolute terms by Rs. 1,374 million on account of
higher profit and effective tax rate.
reduction in borrowings and net working capital.
Consolidated Profit was at Rs. 968 million mainly due
to reduced losses in HST, USA, and supported by Net Working Capital Cycle was 4.0 times as compared
increased profits of MIL. to 3.2 times in previous year.
MIL Standalone Profit stood at Rs. 1,125 million as Debt to Equity was at 0.4 times as compared to
against Rs. 903 million in the previous year. 0.9 times in previous year.
US Subsidiary's Loss was at USD 3.3 million as against
Total Consolidated Debt was at Rs. 2,237 million
USD 8.8 million in the previous year. Losses were
with a substantial reduction of Rs. 2,129 million
curtailed by exiting non-profitable large supply contracts
and reduced fixed costs. from 2008.
Consolidated EPS at Rs. 38.90 as against Rs. 13.54 in Total Investment made during the year by MIL in HST,
previous year and MIL standalone EPS stood at USA, was Rs. 478 million. The net investment stood at
Rs. 45.25 compared to Rs. 36.30 in previous year. Rs. 971 million.
Internal Controls:
Company has a well defined organisation structure, documented policy guidelines, predefined authority levels and an
extensive system of internal controls to ensure optimal utilisation and protection of its resources from unauthorised use or
disposal, IT security and accurate reporting of financials and legal compliances. The Company also has budgetary control
in place. The internal control system is supplemented by internal audit conducted by M/s. Dalal & Shah, Chartered
Accountants, to ensure that the assets are properly accounted for and the business operations are conducted in adherence
to laid down policies and procedures. The Company uses SAP 4.7 as the accounting, operational and information backbone,
which facilitates in-built internal checks and control.
The Company has an Audit Committee of the Board of Directors, which meets regularly to review the risk management
policies, adequacies of internal controls and the audit findings on the various segments of the business.
Human Resources:
In order to optimize the contribution of the employees to the Company's business, several training and development
programme for all levels of employees have been conducted. Occupational Health, Safety and Environment Management
are given utmost importance. We had industrial peace and harmony during the year.
As at Financial Year ending December 2009, the employee strength on permanent rolls of the Company is 1,108 in India
and 150 in HST, USA.
Information Systems:
The Company runs on SAP 4.7 to remain updated with the latest system for better operational efficiency and timely
information management.
With SAP a reliable, high-end, comprehensive, disciplined and integrated business solution is in place. The Company
has gained from the in-built checks and balances and efficient controls by maintaining audit trails.
Outlook:
The Indian GDP is still expected to grow at a rate of about 7-8%. Overall global economic scenario has improved in 2009
but is continued to be volatile. It is expected that the economic conditions may remain volatile for the year 2010 for India
as well as other countries.
The Ink industry however, is not expected to see speedy recovery due to worldwide recessionary trends. The input prices
needs to be closely watched on back of volatile global situation. In late 2009 input prices witnessed a rising trend and it is
expected to continue in 2010. The operating margins are expected to be under pressure globally.
Risks and Concerns

Risks are integral aspects of business. Evaluation of risk and its management becomes more important in the global
scenario, especially when your Company is trying to penetrate the global markets. The following risks and concerns are
identified and various actions initiated by the management are outlined herein below:
Product Risks:
In Ink Industry product replacement, obsolescence of the product / technology is inherent with the growing applications in
print media, books, magazines, brochures, market literatures and packaging of various consumer related products,
the Company continuously invests in Research and Development to upgrade its product portfolio to cater to newer
applications and customer demand. These efforts will be further supplemented through the global R&D efforts of the
hubergroup. It shall further have access to the newer technologies products, processes and best practices of the group
which would widen the product basket and improve quality.
Market Related Risks:

The Printing Ink Industry is highly competitive and our products have to compete globally on quality and costs.
The Company would continue to benefit from deep backward integration for manufacture of key raw materials like pigments,
flushes, resins and varnishes and from combined marketing strengths post integration making it uniquely positioned to
cater to international markets with product diversity and minimal customer and market concentration.
Revenues of the Company are expected to be well diversified with dominant presence in key global markets mitigating
marketing risks in any particular geography while enhancing brand value and recognition.
Financial Risks and Leverage:

International revenues of the Company which contributes to about 58% of total revenues, imports which are about 29% of
total revenue from India and foreign currency loans for long term and working capital financing, which are largely
denominated in USD are subject to foreign exchange risks. While it enjoys a natural hedge the Company also takes
forward covers on net positions of receivables, payables and loans to partially offset this risk.
The current debt to equity ratio is comfortable. The cash flows of the Company are estimated to be stable on account of
diversified and more predictable revenues and profitability.
DISCLAIMER
The discussion, analysis and information in this section have been provided with a view to enable
Shareholders to analyse the results of the year with additional information. In certain areas the discussion
may cover strategic decision and management expectations from the same. Such forecasts should not be
construed as a guarantee of performance and actual results may differ significantly depending upon the
operating conditions and external environment.
Product Portfolio
▲
Web Offset Inks Heatset Inks
▲
Magazines & Books,
News Papers, Yellow Pages,
▲
Coldset Inks Brochures, Calendars,
Offset Inks
▲
Folding Cartons, etc.
▲
Sheetfed Inks Commercial Inks
▲
▲
Packaging Inks
▲
Laminates, Shopping Bags,
Water Based
Flexo & Labels, Woven Bags,
Gravure Inks Reverse Printing Kraft Paper, etc.
▲
▲
Solvent Based
▲
▲
Surface Printing
Screen Inks
Various Substrates
▲
Textiles, Labels, Stickers,
▲
Display, Packaging, etc.
Metal Decorating PP Caps, Crown Caps,

Inks & Coatings
▲
Body Cans, Food Cans, etc.
▲
UV Inks
Aqueous & UV Coatings
▲
▲
Light Fast Inks
▲
Special Range Low Odour / Low Migration Inks
Press Chemicals
▲
▲
Wire Enamels
▲
Raw Materials
▲
Lamination Solvent Based
Adhesives
Annual Report 2009
▲
Solvent Less
55
FINANCIAL HIGHLIGHTS
(Rs. in million)
Particulars 2009 2008 2007 Nine- 2005-06 2004-05 2003-04 2002-03 2001-02 2000-01
Month
Period
ended
December
2006
Sales & Other Operating

Income (Gross) 14311.55 14227.51 12292.65 7653.20 9866.72 9011.30 6732.12 6363.04 5631.73 3843.36
Sales & Other Operating

Income (Net of Excise) 13764.81 @ 13382.78 @11488.01 @7104.28 @9181.02 @8415.33 @6224.75 @5921.60 @5217.84 @3471.13
Export (FOB) 6761.66 7044.84 6141.97 3493.10 4512.66 4227.15 2614.71 2700.94 2221.43 855.62
PBDIT 2145.82 2191.92 1338.61 8.71 1185.22 1668.47 1242.97 1134.46 1152.47 604.27
Interest and Other

Finance Charges (Net) 160.67 761.68 204.31 230.06 216.67 166.40 174.99 416.04 422.11 172.31
Profit / (Loss) Before Tax 1499.48 1110.70 824.04 (437.62) 722.24 1296.01 882.87 551.61 601.35 345.58
Tax 373.99 207.85 142.87 (57.19) 113.21 220.31 150.50 111.20 118.26 29.30
Profit / (Loss) After Tax 1125.49 902.85 681.17 (380.43) 609.03 1075.70 732.37 440.41 483.09 316.29
Dividend (Equity) 149.23 149.23 149.23 111.92 149.23 149.23 131.15 54.65 54.65 54.55
Dividend % 60 60 60 45 60 60 60 40 40 40
Retained Profit / (Loss) 950.90 728.26 506.58 (380.43) 424.95 842.85 509.48 301.77 377.47 242.44
Earnings Per Share (Rs.) 45.25 36.30 27.39 (15.30) 23.93 44.00 37.62 ##25.64 31.54 22.21
Book Value (Equity) (Rs.) 224.21 185.98 310.34 289.01 310.62 293.53 214.95 164.42 142.80 124.92
Sources of Funds:
Share Capital 248.72 248.72 248.72 248.72 248.72 683.72 653.58 571.62 586.62 186.62
Reserves 5327.75 4376.85 7470.02 6939.44 7476.90 7366.95 4794.81 **3924.66 **3264.30 2020.39
Shareholders’ Funds 5576.47 4625.57 7718.74 7188.16 7725.62 8050.67 5448.39 4496.28 3850.92 2207.01
Loan Funds 1594.89 3427.90 ^ 3117.84 1832.47 1816.65 1762.24 3261.73 3722.48 3803.75 2049.08
Total 7171.36 8053.47 10836.58 9020.63 9542.27 9812.91 8710.12 8218.76 7654.67 4256.09
Uses of Funds:
Net Fixed Assets 3347.36 3541.80 3571.87 3421.42 ^3399.71 3110.06 2798.41 2773.49 2741.46 1934.69
Investments 971.19 493.50 3889.34 3710.34 3691.56 3655.93 3635.46 2849.49 1754.60 501.98
Net Current Assets ! 2852.81 ! 4018.17 ^! 3762.57 ! 1888.87 !2451.00 !3046.92 !2276.25 !2595.78 ! 3158.61 1819.42
Total 7171.36 8053.47 10836.58 9020.63 9542.27 9812.91 8710.12 8218.76 7654.67 4256.09
@ Includes job-work income.
** Includes advance against warrant / money received against partly paid shares pending appropriation / share application money pending allotment of shares.
! Includes Deferred Tax Liability (Net).
^ Regrouped.
## EPS of year 2002-03 as originally reported at Rs. 26.69 has been restated to Rs. 25.64 per share due to right issue of shares during the year 2003-04.
STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956,

RELATING TO SUBSIDIARY COMPANIES FOR THE YEAR ENDED DECEMBER 31, 2009
Name of the % of Holding Financial Year of No. of Shares Net Aggregate of Profits / (Losses)
Subsidiary in Subsidiary the Subsidiary Held by thereof for Financial Year as
Company Company Company Micro Inks concerning the Members of
Limited Micro Inks Limited
Dealt within the Not Dealt with the
Accounts for the Accounts for the
December 31, December 31,
2009 2009
(Rs. in million) (Rs. in million)
Micro Inks GmbH, Nil December Nil (1.58)# Nil

Austria 2009
Hostmann-Steinberg Inc., 100 2,280 * Nil (155.30)
U.S.A. December (Common
2009 Stock)
100 1,239 *
(Preferred
Stock)
Micro Inks (Singapore) Pte. Ltd., 100 December 1,188,397 Nil 0.10
Singapore 2009
Micro Inks (Hong Kong) Ltd., Nil @ December Nil @ Nil (1.24)
Hong Kong 2009
Notes:
# The Financial Statements of Micro Inks GmbH, Austria, has been considered till the date of sale, i.e. November 1, 2009.
* During the year, the Company has made further contribution of Rs. 477.60 million towards 200 Non-cumulative
Redeemable Series A Preferred Stock and has acquired 2,280 Common Stock from Micro Inks GmbH, Austria, for a
consideration of Rs. 0.11 million.
@ All the Equity Shares of Micro Inks (Hong Kong) Ltd., Hong Kong, are held by Micro Inks (Singapore) Pte. Ltd.,
Singapore, and it has been placed under Members’ voluntary liquidation on April 28, 2009.


STATEMENT REGARDING SUBSIDIARY COMPANIES AS OF DECEMBER 31, 2009

(Rs. in million)
Micro Inks Hostmann- Micro Inks Micro Inks
GmbH, Steinberg (Singapore) (Hong Kong)
Austria Inc., U.S.A. Pte. Ltd., Ltd.,
Singapore Hong Kong
Issued and Subscribed Share Capital — 4,449.55 39.46 —
Reserves — (3,595.73) (34.62) —
Total Assets — 2,239.84 5.69 —
Total Liabilities — 2,239.84 5.69 —
Investment (other than

Investments in Subsidiaries) — — — —
Turnover — 3,477.10 — —
Profit / (Loss) Before Taxation (1.58) (151.74) 0.10 (1.24)
Provision for Taxation — — — —
Profit / (Loss) after Taxation (1.58) (151.74) 0.10 (1.24)
Proposed Dividend — — — —
Note:
The aforesaid statement is prepared pursuant to the Central Government's approval u/s 212(8) of the
Companies Act, 1956, which requires the exchange rates to be used at the end of the year, i.e., December 31, 2009,
and therefore the figures will vary in 212 statement to that extent, where foreign currency figures are converted as
per the Indian Accounting Standard-11.
AUDITORS' REPORT
To,
The Board of Directors of Micro Inks Limited on the Consolidated Financial Statements for the year ended
December 31, 2009
1. We have audited the attached Consolidated Balance Sheet of MICRO INKS LIMITED, the parent company, and its
subsidiaries, as listed in Note No. 1 on Schedule-17 [collectively referred to as 'the group'], as at December 31, 2009,
and also the Consolidated Profit and Loss Account and the Consolidated Cash Flow Statement for the year ended
on that date both annexed thereto. These consolidated financial statements are the responsibility of the parent
company's management and have been prepared by the management on the basis of separate financial statements
and other information regarding components. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit.
2. We conducted our audit in accordance with the Auditing Standards generally accepted in India. These Standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by the management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
3. We did not audit the financial statements of subsidiaries whose financial statements reflect total assets of
Rs. 1,895.38 million as at December 31, 2009, total revenue of Rs. 3,548.80 million and net cash outflows amounting
to Rs. 35.14 million, for the year ended on that date as considered in the Consolidated Accounts. These financial
statements and other financial information have been audited by other auditors, whose reports have been furnished
to us, and our opinion is based solely on the reports of the other auditors.
4. We report that the consolidated financial statements have been prepared by the parent company's management in
accordance with the requirements of Accounting Standard 21 'Consolidated Financial Statements'.
5. Based on our audit of the parent company and on consideration of reports of the other auditors on the separate
financial statements of subsidiaries and on the other financial information of the components, and to the best of our
information and according to the explanations given to us, we are of the opinion that the attached consolidated
financial statements give a true and fair view in conformity with the accounting principles generally accepted in India:
(i) in the case of the Consolidated Balance Sheet, of the state of affairs of the group as at December 31, 2009;
(ii) in the case of the Consolidated Profit and Loss Account, of the profit of the group for the year ended on that
date; and
(iii) in the case of the Consolidated Cash Flow Statement, of the cash flows of the group for the year ended on
that date.

R. K. Hiranandani
CONSOLIDATED BALANCE SHEET

AS AT DECEMBER 31, 2009
(Rs. in million)
Schedule As at As at
31/12/2009 31/12/2008
SOURCES OF FUNDS
SHAREHOLDERS' FUNDS
Share Capital 1 248.72 248.72
Reserves and Surplus 2 5,215.21 4,451.67
5,463.93 4,700.39
LOAN FUNDS
Secured Loans 3 1,543.94 3,332.32
Unsecured Loans 4 693.20 1,033.44
2,237.14 4,365.76
Deferred Tax Liability (Net) (Refer Note No. 11 of Schedule-17) 364.58 373.40
TOTAL 8,065.65 9,439.55
APPLICATION OF FUNDS
FIXED ASSETS 5
Gross Block 7,622.56 7,513.62
Less: Depreciation / Amortisation 3,789.53 3,298.34
Net Block 3,833.03 4,215.28
Capital Work-in-Progress (Including Capital Advances) 245.33 165.81
4,078.36 4,381.09
INVESTMENTS 6 0.00 0.02
CURRENT ASSETS, LOANS AND ADVANCES
Interest Accrued on Investments — 0.02
Inventories 7 2,753.18 3,170.15
Sundry Debtors 8 3,450.93 3,615.33
Cash and Bank Balances 9 183.45 186.73
Loans and Advances 10 554.58 653.53
6,942.14 7,625.76
LESS: CURRENT LIABILITIES AND PROVISIONS 11

Current Liabilities 2,743.91 2,336.78
Provisions 210.94 230.54
2,954.85 2,567.32
NET CURRENT ASSETS 3,987.29 5,058.44
TOTAL 8,065.65 9,439.55

CONSOLIDATED PROFIT AND LOSS ACCOUNT

(Rs. in million)
Schedule 31/12/2009 31/12/2008
INCOME
Sales and Other Operating Income (Gross) 12 16,684.53 16,970.35
Less: Excise Duty 546.74 844.73
Sales and Other Operating Income (Net) 16,137.79 16,125.62
Other Income 13 42.55 69.19
TOTAL 16,180.34 16,194.81
EXPENDITURE
Materials Consumed 10,354.60 10,081.69
Manufacturing and Other Expenses 14 3,760.24 3,792.03
(Increase) / Decrease in Semi-Finished Goods
and Finished Goods Stock 15 (44.78) 408.58
Depreciation / Amortisation (Refer Note No. 13 of Schedule-17) 5 584.09 593.10
TOTAL 14,838.71 15,650.10
PROFIT BEFORE TAX 1,341.63 544.71
Provision for Taxation
– for Current Tax 381.69 217.11
– for Deferred Tax (8.82) (13.80)
– for Fringe Benefit Tax 1.21 4.65
TOTAL 374.08 207.96
PROFIT AFTER TAX 967.55 336.75
Debit Balance Brought Forward (2,159.21) (2,071.37)
Cumulative Debit Balance (1,191.66) (1,734.62)
APPROPRIATIONS (made by Micro Inks Limited, the Parent Company)
Provision for Dividend Distribution Tax on Proposed Dividend 25.36 25.36
674.59 424.59
Debit Balance Carried to Reserves and Surplus (Schedule-2) (1,866.25) (2,159.21)
Basic and Diluted Earnings Per Share of Rs. 10/- each (in Rs.) 38.90 13.54
CONSOLIDATED CASH FLOW STATEMENT

(Rs. in million)
31/12/2009 31/12/2008
(A) CASH FLOW FROM OPERATING ACTIVITIES
Profit Before Tax 1,341.63 544.71
Adjustment for:
Depreciation / Amortisation 584.09 593.10
Loss / (Profit) on Sale / Retirement of Fixed Assets (Net) 3.23 (2.65)
Profit on Sale of Trade Investment in Subsidiary (0.29) —
Write-off for Obsolescences of Inventory 17.21 10.97
Unrealised Exchange (Gain) / Loss (Net) (153.72) 159.83
Exchange Gain on Reduction of Share Capital in Subsidiary — (11.86)
Bad Debts including Provision for Doubtful Debts (Net) 48.75 90.57
Operating Profit before Working Capital Changes 2,025.46 2,159.37
Adjustment for:
Inventories 399.76 37.07
Trade and Other Receivables 76.22 (100.81)
Trade and Other Payables 562.00 (828.05)
Currency Fluctuation Reserve on Consolidation 12.54 (114.92)
1,050.52 (1,006.71)
Cash Generated from Operations 3,075.98 1,152.66
Direct Taxes Paid (Net) (333.44) (268.79)
Net Cash from Operating Activities (A) 2,742.54 883.87
(B) CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Fixed Assets (225.58) (477.29)
Sale of Fixed Assets 7.61 24.63
Sale of Trade Investment in Subsidiary 1.20 —
Sale of Non-Trade Investment 0.02 77.98
Currency Fluctuation Reserve on Consolidation 34.99 (157.84)
Net Cash used in Investing Activities (B) (181.76) (532.52)
(C) CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from Long-term Borrowings 607.91 1,218.90
Repayment of Long-term Borrowings (512.16) (1,150.25)
(Repayment of) / Proceeds from Short-term Borrowings (Net) (2,052.34) 143.72
Payment of Interest (389.54) (604.84)
Payment of Dividend (including Dividend Distribution Tax) (174.31) (174.47)
Currency Fluctuation Reserve on Consolidation (41.98) 185.79
Net Cash used in Financing Activities (C) (2,562.42) (381.15)
Net Decrease in Cash and Cash Equivalents (A+B+C) (1.64) (29.80)
Opening Cash and Cash Equivalents (See Schedule-9) 186.73 247.75
Cash and Cash Equivalents given up on
Disposal of Subsidiary (1.64) (31.22)
Closing Cash and Cash Equivalents (See Schedule-9) 183.45 186.73
Note: The figures of the previous year have been regrouped / rearranged wherever necessary.
SCHEDULES TO THE CONSOLIDATED BALANCE SHEET

(Rs. in million)
As at As at
31/12/2009 31/12/2008
SHARE CAPITAL (SCHEDULE – 1)
Authorised
30,000,000 (As at 31/12/2008, 30,000,000) Equity Shares of Rs. 10/- each 300.00 300.00
5,500,000 (As at 31/12/2008, 5,500,000) Preference Shares of Rs. 100/- each 550.00 550.00
850.00 850.00
Issued, Subscribed and Paid-up
24,871,941 (As at 31/12/2008, 24,871,941) Equity Shares, of Rs. 10/- each, fully paid-up 248.72 248.72
(Of the above shares, 6,831,000 shares are allotted as fully paid-up
Bonus Shares by way of capitalisation of securities premium)
(Of the above shares, 17,534,718 (As at 31/12/2008, 17,534,718) Shares are
held by MHM Holding GmbH, Germany, the Holding Company)
248.72 248.72
RESERVES AND SURPLUS (SCHEDULE – 2)

Capital Reserve
State Cash Subsidy 1.62 1.62
Capital Redemption Reserve # 450.00 450.00
Securities Premium Account # 4,177.43 4,177.43
Currency Fluctuation Reserve on Consolidation (52.55) (23.13)
General Reserve: 31/12/2009 31/12/2008 2,504.96 2,004.96
As per last Balance Sheet 2,004.96 1,754.96

Add: Transferred from Profit and Loss Account 500.00 250.00
2,504.96 2,004.96
Debit Balance in Profit and Loss Account (1,866.25) (2,159.21)
5,215.21 4,451.67
# In the previous year, the credit balances in Capital Redemption Reserve Account of Rs. 450.00 million and Securities
Premium Account to the extent of Rs. 3,177.43 million have been utilised by the Parent Company for the purpose of
writing-off of investments in subsidiary companies in accordance with requisite approvals. This adjustment by way of
utilisation of these credit balances is not applicable to the Consolidated Financial Statements.
SECURED LOANS (SCHEDULE – 3)

From Banks
Working Capital Loans 65.16 1,887.50
Foreign Currency Term Loans 1,478.78 1,444.82
1,543.94 3,332.32
UNSECURED LOANS (SCHEDULE – 4)
Short-Term Loans and Advances from Banks
Foreign Currency Loans — 389.84
Rupee Loans — 400.00
Commercial Paper 400.00 —
Other Loans and Advances from Banks
Foreign Currency Loans 293.20 243.60
693.20 1,033.44
64
Micro Inks Limited
FIXED ASSETS (SCHEDULE – 5)

(Refer Note No. 6 of Schedule-17) (Rs. in million)
PARTICULARS GROSS BLOCK DEPRECIATION / AMORTISATION NET BLOCK

As at Addi- Deduc- Adjust- As at Upto For the Deduc- Adjust- Upto As at As at
01/01/2009 tions tions ment* 31/12/2009 31/12/2008 Year# tions ment* 31/12/2009 31/12/2009 31/12/2008
Freehold Land 204.95 — — (3.43) 201.52 — — — — — 201.52 204.95

Leasehold Land 36.03 0.35 — — 36.38 3.77 0.41 — — 4.18 32.20 32.26
Buildings 1,792.57 28.32 0.56 (22.33) 1,798.00 387.48 55.40 0.17 (5.81) 436.90 1,361.10 1,405.09
Plant and Machinery 4,316.09 180.93 15.87 (48.79) 4,432.36 2,081.29 389.92 11.90 (35.83) 2,423.48 2,008.88 2,234.80
Laboratory Equipment 258.24 5.10 8.18 (6.15) 249.01 142.15 40.75 5.38 (4.96) 172.56 76.45 116.09
Wind Mills 19.02 — — — 19.02 19.02 — — — 19.02 — —
Computers 151.00 6.41 2.64 (1.51) 153.26 129.53 17.57 2.47 (1.39) 143.24 10.02 21.47
Furniture and Fittings 177.86 1.67 1.76 (3.87) 173.90 115.18 23.73 1.75 (3.27) 133.89 40.01 62.68
Vehicles 146.82 22.91 7.93 (2.53) 159.27 81.08 29.93 4.44 (2.39) 104.18 55.09 65.74
Intangible Assets:
– Software 71.45 1.97 — (2.11) 71.31 59.33 7.88 — (2.08) 65.13 6.18 12.12
– Technical Know-how 92.53 — — — 92.53 32.45 18.50 — — 50.95 41.58 60.08
– Goodwill on Consolidation 247.06 — — (11.06) 236.00 247.06 — — (11.06) 236.00 — —
Total (A) 7,513.62 247.66 36.94 (101.78) 7,622.56 3,298.34 584.09 26.11 (66.79) 3,789.53 3,833.03 4,215.28
Previous year 6,662.19 502.19 52.65 401.89 7,513.62 2,489.69 593.10 30.67 246.22 3,298.34 4,215.28
Capital Work-in-Progress 105.18 130.82
Advances for Capital Expenditure 140.15 34.99
Total (B) 245.33 165.81
Total (A+B) 4,078.36 4,381.09
* Adjustment on account of foreign exchange translation differences.

# Refer Note No. 13 of Schedule-17.
(Rs. in million)
As at As at
31/12/2009 31/12/2008
INVESTMENTS (SCHEDULE – 6)
LONG-TERM INVESTMENTS
(At Cost)
Non-Trade Investments (Unquoted)

Government Securities – 6 Year National Saving Certificates
(Deposited as security with third party) — 0.02
Other Investments – Rs. 2,600 (100 fully paid-up of Rs. 25 each,
Equity Shares of The Shamrao Vithal Co-operative Bank Ltd.) 0.00 0.00
0.00 0.02
INVENTORIES (SCHEDULE – 7)
At lower of Cost (Less: Write-off for Obsolescence) and Net Realisable Value
Stock-in-Trade
Raw Materials and Packing Materials 1,221.63 1,678.58
Semi-Finished Goods 430.48 490.50
Finished Goods:
— Manufactured 888.05 760.76
— Traded 144.06 166.55
1,032.11 927.31
2,753.18 3,170.15
SUNDRY DEBTORS (SCHEDULE – 8)

Debts Outstanding
Over Six Months 152.12 360.81
Others 3,444.27 3,493.11
Total Debts* 3,596.39 3,853.92
Less: Provision for Doubtful Debts 145.46 238.59
3,450.93 3,615.33
* of the above Debts
(a) Fully Secured, Considered Good 107.59 83.27
(b) Unsecured, Considered Good 3,343.34 3,532.06
(c) Unsecured, Considered Doubtful 145.46 238.59
Total Debts 3,596.39 3,853.92
CASH AND BANK BALANCES (SCHEDULE – 9)

Cash and Stamps on Hand 1.06 0.54
Balances with Scheduled Banks
— In Current Accounts 100.42 85.61
— In Dividend Accounts 3.01 2.72
— In Fixed Deposit Accounts / Margin Accounts (including interest accrued thereon) 0.27 0.22
103.70 88.55
Balances with Non-Scheduled Banks (In Current Accounts) 78.69 97.64
183.45 186.73
(Rs. in million)
As at As at
31/12/2009 31/12/2008
LOANS AND ADVANCES (SCHEDULE – 10)

(Unsecured – Considered Good)
Advance Payment of Taxes (Net of Provisions) 43.79 93.25
Advances Recoverable in Cash or in Kind or for value to be received 369.55 465.41
Bills of Exchange 28.23 25.93
Balances with Excise and Customs 70.10 25.44
Deposits 42.91 43.50
554.58 653.53
CURRENT LIABILITIES AND PROVISIONS (SCHEDULE – 11)

CURRENT LIABILITIES
Acceptances 164.74 153.78
Sundry Creditors 2,369.61 2,000.86
Advances from Customers 147.16 107.15
Investor Education and Protection Fund shall be credited by Unpaid Dividend # 3.01 2.72
Other Liabilities 47.43 23.84
Interest Accrued but not Due on Loans 11.96 48.43
2,743.91 2,336.78
PROVISIONS
Provision for Dividend Distribution Tax 25.36 25.36
Provision for Compensated Absences 36.35 36.71
Provision for Gratuity (Refer Note No. 9(a) of Schedule-17) — 19.24
210.94 230.54
# This figure reflects the position of unclaimed dividend as at December 31, 2009. The actual amount to be transferred
to the Investor Education and Protection Fund in this respect shall be determined on the due dates.
SCHEDULES TO THE CONSOLIDATED PROFIT AND LOSS ACCOUNT

(Rs. in million)
31/12/2009 31/12/2008
SALES AND OTHER OPERATING INCOME (SCHEDULE – 12)

Sales (Domestic) 7,327.18 6,975.12
Sales (Export) 9,280.45 9,926.15
Other Operating Income 76.90 69.08
16,684.53 16,970.35
OTHER INCOME (SCHEDULE – 13)

Sale of Scrap Material 36.93 32.71
Profit on Sale / Retirement of Fixed Assets (Net) — 2.65
Profit on Sale of Trade Investment in Subsidiary 0.29 —
Miscellaneous Income 5.33 33.83
42.55 69.19
MANUFACTURING AND OTHER EXPENSES (SCHEDULE – 14)

Salaries, Wages and Bonus 886.48 949.70
Staff Welfare Expenses 79.97 91.82
Contribution to Provident Fund and Other Funds (Refer Note No. 9 of Schedule-17) 39.01 59.42
1,005.46 1,100.94
Power and Fuel 594.30 544.49
Insurance 43.07 44.41
Telephone 21.80 24.04
Travelling and Conveyance 58.24 83.77
Office and Godown Rent 46.98 44.76
Rates and Taxes 38.65 19.46
Sales Commission 35.60 45.26
Freight Outward 645.97 743.68
Discount and Deductions 202.68 213.22
Repairs and Maintenance — Buildings 31.70 23.77

— Machinery 98.78 93.15
— Electricals 14.53 14.47
145.01 131.39
Loss on Sale / Retirement of Fixed Assets (Net) 3.23 —
Royalty 277.50 150.24
Miscellaneous Expenses (Refer Note No. 8 of Schedule-17) 546.16 528.58
3,760.24 3,792.03
(INCREASE) / DECREASE IN SEMI-FINISHED GOODS

AND FINISHED GOODS STOCK (SCHEDULE – 15)
Opening Stock — Semi-Finished Goods 490.50 549.06
— Finished Goods (including Goods Traded) 927.31 1,277.33
TOTAL (A) 1,417.81 1,826.39
Closing Stock — Semi-Finished Goods 430.48 490.50

— Finished Goods (including Goods Traded) 1,032.11 927.31
TOTAL (B) 1,462.59 1,417.81
(A) – (B) (44.78) 408.58
SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS

SIGNIFICANT ACCOUNTING POLICIES (SCHEDULE – 16)
The Consolidated Financial Statements comprise the financial statements of Micro Inks Limited (‘the Parent Company’)
and its wholly owned and controlled subsidiaries as given below (collectively referred to as ‘the Group’).
S. No. Relationship Name of the Companies Extent of Holding
(1) Subsidiaries Micro Inks GmbH, Austria 100% (upto November 1, 2009, sold during the year)
Hostmann-Steinberg Inc., USA 100% (w.e.f. July 20, 2009, step-down subsidiary upto
July 19, 2009)
Micro Inks (Singapore) Pte. Ltd., 100%
Singapore
(2) Step-down Micro Inks (Hong Kong) Ltd., 100% owned by Micro Inks (Singapore) Pte. Ltd.
Subsidiary Hong Kong (placed under Members’ voluntary liquidation
on April 28, 2009)
The financial statements of Micro Inks GmbH, Austria, and Micro Inks (Hong Kong) Ltd., Hong Kong, have been included
in these consolidated financial statements till the date of sale / liquidation.
A. BASIS OF CONSOLIDATION:
The financial statements of the Parent Company and its subsidiary companies have been combined on a line-by-
line basis by adding together the book value of like items of assets, liabilities, income and expenditure after fully
eliminating intra-group balances, intra-group transactions and unrealised profits or losses as per Indian Accounting
Standard-21 “Consolidated Financial Statements”.
These subsidiaries have been classified as ‘Non-Integral Foreign Operations’. Revenue items are consolidated at
the average rate prevailing during the year and Assets and Liabilities are converted at the rates prevailing at the end
of the year. All resulting exchange differences have been accumulated in a ‘Foreign Currency Translation Reserve’.
The financial statements of Hostmann-Steinberg Inc. and Micro Inks (Singapore) Pte. Ltd., both for the year ended
December 31, 2009, have been drawn up and audited upto the date at which the financial statements of the Parent
Company have been prepared. The financial statements of Micro Inks GmbH for the period from January 1, 2009 to
November 1, 2009 (being the date of sale of investment) have been drawn up and audited. The financial statements of
Micro Inks (Hong Kong) Ltd. have not been audited as the Company has been placed under members’ voluntary
liquidation on April 28, 2009 and net proceeds were received and accounted by Micro Inks (Singapore) Pte. Ltd.
The excess of the Parent Company’s portion of equity of the subsidiaries as at the date of its investment over the
cost of its investment is treated as Capital Reserve on consolidation. The excess of cost of investment over the
Parent Company’s portion of equity as at the date of investment is treated as Goodwill on consolidation.
Significant Accounting Policies, as disclosed herein, and Notes to these consolidated financial statements as disclosed
in Schedule-17, are intended to serve as a means of informative disclosure and a guide to better understanding the
consolidated position of the Group. Recognising this purpose, the Group has disclosed only such policies and notes
from the individual financial statements, which fairly present the needed disclosures. Lack of homogeneity and other
similar consideration made it desirable to exclude some of them, which in the opinion of the Management, could be
better viewed when referred to in the individual financial statements.
B. CONSOLIDATED ACCOUNTING POLICIES:
1. Accounting Assumption
The consolidated financial statements of the Group have been prepared under historical cost convention on an
accrual basis and in accordance with the generally accepted accounting principles in India. In case, each
company in the Group does not follow a uniform accounting policy, the same as disclosed in the audited
accounts of the said company, has been reproduced, if material.
2. Use of Estimates
The preparation of financial statements requires the management to make estimates and assumptions that
affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities as at the
date of the financial statements and reported amounts of income and expenses during the year. Examples of
such estimates include provision for doubtful debts, employee retirement benefit plans, provision for income
taxes and the useful lives of fixed assets. The Management believes that the estimates used in preparation of
the financial statements are prudent and reasonable. Future results could differ from these estimates.
3. Fixed Assets
Micro Inks Limited, India
Fixed Assets are stated at historical cost of acquisition or construction less accumulated depreciation /
amortisation. All costs relating to the acquisition and installation of fixed assets are capitalised. The cost excludes
the duty benefits admissible against installation of the specific assets.
Interest on borrowed money allocated to and utilised for fixed assets, pertaining to the period upto date of
capitalisation is capitalised in accordance with the Indian Accounting Standard-16 “Borrowing Costs”.
Advances paid towards acquisition or construction of fixed assets and the cost of assets not put to use as at
reporting date are disclosed under capital work-in-progress.
Hostmann-Steinberg Inc., USA

Property, plant and equipment are recorded at cost. Leasehold improvements are amortised over the estimated
useful lives or the term of the related leases, whichever is shorter, using the Straight-Line Method. Additions,
major renewals and replacements that increase the property’s useful life are capitalised. Expenditure for
maintenance and repairs are charged to operations as incurred. The cost of property, plant and equipment
retired or sold and the related accumulated depreciation or amortisation are excluded from the accounts, and
any related gain or loss is included in the statement of operations for the year.
4. Intangible Assets
Intangible Assets comprising of cost incurred to acquire computer software licences and technical know-how
are stated at cost less accumulated amortisation.
Interest on borrowed money allocated to and utilised for intangible assets, pertaining to the period upto date of
the capitalisation is capitalised in accordance with the Indian Accounting Standard-16 “Borrowing Costs”.
Advance paid towards acquisition of intangible assets, which is not put to use as at reporting date is disclosed
under capital work-in-progress.
5. Depreciation / Amortisation
Depreciation on fixed assets is provided on the Straight-Line Method, at rates derived on the basis of the
estimated useful lives of the assets determined by the management as given below, except that depreciation
on Buildings and Plant and Machinery, other than those described below, is provided at the rates prescribed in
Schedule XIV of the Companies Act, 1956.
S. No. Type of Assets Useful Life
(in Years)
(a) Plant and Machinery:
(i) Contribution to Common Effluent Treatment Plant, Factory Equipment,
Material Handling Equipment and Storage Tank with third party 15
(ii) Air Conditioner, Fire & Safety Equipment, Forklift Truck, Stacker and
Weighing Balance 10
(iii) Fire Tender and Tractor & Trailer 8
(iv) Communication Equipment (other than Mobile Phone), Office Equipment,
Photocopier and Refrigerator 5
(v) Mobile Phone and Tote Bin 3
(b) Laboratory Equipment 10
(c) Computers 3
(d) Furniture and Fittings 10
(e) Vehicles 5
(f) Intangible Assets:
(i) Software 4
(ii) Technical Know-how 5
Leasehold Land is amortised over the unexpired period of lease.

Depreciation on assets not owned by the Company included in Gross Block is provided over the estimated
period of the economic life of the assets.
Depreciation is charged on pro-rata basis for the assets purchased / sold during the year.
Depreciation is computed on Straight-Line Method over the estimated useful life of assets, which range from
4 to 30 years.
6. Goodwill on Consolidation
Goodwill on consolidation is amortised over a period of 5 years, unless required to be amortised over a shorter
period in view of change in circumstances.
7. Impairment of Assets
The carrying value of assets / cash generating units at each balance sheet date is reviewed for impairment.
If any indication of such impairment exists, the recoverable amount of those assets is estimated and impairment
loss is recognised, if the carrying amount of those assets / cash generating units exceeds their recoverable
amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is
arrived at by discounting future cash flows to their present value based on appropriate discount factor.
When there is indication as at each balance sheet date, that an impairment loss recognised for an asset in prior
accounting year no longer exists or may have decreased such reversal of impairment loss is recognised.
8. Investments
Long-term investments are stated at cost, less provision for diminution in value other than temporary. Investments
that are readily realisable and intended to be held for not more than a year from the date of investment are
classified as current investments. Current investments are stated at lower of cost and fair value.
9. Inventories
The finished and semi-finished inventories are valued at lower of cost on absorption basis and net
realisable value.
The raw materials and packing materials are valued at lower of cost and net realisable value. However, materials
and other items held for use in production of finished goods are not written down below cost if the products,
in which they will be incorporated, are expected to be sold at or above cost. Cost is determined on a transactional
weighted average basis, net of CENVAT benefits availed by the Company. The items imported under Duty
Entitlement Pass Book (DEPB) / Duty Free Replenishment Certificate (DFRC) / Advance License (AL) / Special
Import License (SIL) are valued inclusive of the notional duty benefits availed.
Damaged, unserviceable and inert stocks are suitably depreciated.
Excise Duty and Customs Duty payable on goods held in the bonded warehouse are provided in the valuation
of inventory.
Consumables and other spares, tools, etc., are valued at lower of cost (transactional weighted average cost,
net of CENVAT benefits availed by the Company) and net realisable value.
Inventories are stated at the lower of cost or market value and the inventory costs have been determined using
the first-in, first-out method.
10. Employee Benefits
The Company has both defined contribution and defined benefit plans, of which some have assets in special
funds or similar securities. The plans are financed by the Company and in the case of some defined contribution
plans by the Company along with its employees.
(a) Defined Contribution Plan
These are plans in which Company pays pre-defined amounts to separate funds and does not have any
legal or informal obligation to pay additional sums. These comprise of contributions to the Employee’s
Provident Fund and Family Pension Fund which are reported as expenses during the year in which the
employees perform the services.
(b) Defined Benefit Plan
At the reporting date, the Company’s liabilities towards Gratuity / Compensated absences is determined
by independent actuarial valuation using the projected unit credit method which considers each year of
service as giving rise to an additional unit of benefit entitlement and measures each unit separately to
build up the final obligation. Past services are recognised on a straight-line basis over the average period
until the amended benefits become vested. Actuarial gain and losses are recognised immediately in the
Profit and Loss Account as income or expense. Obligation is measured at the present value of estimated
future cash flows using a discounted rate that is determined by reference to market yields at the Balance
Sheet date on Government bonds where the currency and terms of the Government bonds are consistent
with the currency and estimated terms of the defined benefit obligation.
Gratuity to employees is covered under Group Gratuity Life Assurance Scheme of the Life Insurance
Corporation of India.
Company recognises the undiscounted amount of short-term employee benefits like Medical
Reimbursement, Leave Travel Assistance, etc., during the accounting year based on service rendered by
employee.
The Company has a 401(k) Salary Deferral Plan (the “Plan”). Under the Plan, all employees at least 21 years
of age, and that have been employed for at least three months may voluntarily contribute upto 15% of their
compensation. The Plan allows for a matching Company contribution of 50% of the first 4% of each participant’s
compensation, which vests ratably over four years of service.
11. Provisions and Contingencies
A provision is recognised when the Company has a present legal or constructive obligation as a result of past
event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which
reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to its present
value and are determined based on best estimate require to settle the obligation at the Balance Sheet date.
These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate. Contingent
liabilities are not recognised in Profit and Loss Account but are disclosed in Notes to the Accounts.
12. Revenue Recognition
Domestic sales are recognised at the time of despatch to the customer, invoicing being the conclusive event.
Export sales are recognised on the basis of dates of bills of lading.
Gross Sales include the excise duty recovered but exclude customs duty, education cess, sales tax and are net
of trade discounts. Other recoveries charged separately in invoice are set-off against the respective expenditure
heads.
Revenue is recognised upon transfer of title and risk of loss to customers. Title passes to certain customers
upon shipment and for customers purchasing on consignment, title passes when ink is used by the customer.
13. Export Benefits

Export entitlements under Duty Entitlement Pass Book (DEPB) and Duty Free Replenishment Certificate (DFRC)
scheme are recognised in Profit and Loss Account when the right to receive credit as per the terms of the
scheme is established in respect of the exports.
Obligation / Entitlement on account of Advance License (AL) and Special Import License (SIL) scheme for
import of raw material are accounted for on purchase of raw material and / or export sale.
Export benefits from DEPB / DFRC are considered as ‘Other Operating Income’. Benefits from AL and SIL are
netted from ‘Materials Consumed’.
14. Research and Development
Expenditure incurred during research phase is recognised as expense when incurred.
Expenditure incurred during development phase is capitalised if it can be demonstrated that such expenditure
would result in future economic benefit.
Other development expenditure is recognised as expense when incurred.
15. Foreign Currency Translations
Transactions in foreign currency are recorded at the rates of exchange in force at the time of occurrence of the
transactions.
Monetary items, denominated in foreign currency as at the reporting date, are stated at the rates of exchange
prevailing at the reporting date and resultant gain / loss are adjusted to Profit and Loss Account.
Forward contracts to which Indian Accounting Standard-11 ‘The Effect of Change in Foreign Exchange Rates’
has been applied, the premium or discount arising at the inception of such forward exchange contracts are
amortised as expense or income over the life of the relevant contracts. Exchange differences on such contracts
are recognised as expense or income in Profit and Loss Account in the reporting period in which the exchange
rates change.
Derivative contracts open as at reporting date, other than the forward contracts to which Indian Accounting
Standard-11 ‘The Effect of Change in Foreign Exchange Rates’ has been applied, are marked to market keeping
in view the principle of prudence.
16. Assets Taken on Lease
Operating lease payments are recognised as expenditure in Profit and Loss Account on a straight-line basis,
representative of the time pattern of benefits received from the use of the assets taken on lease.
17. Taxation
The Provision for Current Income Tax is the aggregate of the balance provision for tax for three months ended
March 31, 2009, and the estimated provision based on the taxable profit of remaining months upto
December 31, 2009, the actual tax liability, for which, will be determined on the basis of the results for the period
April 1, 2009 to March 31, 2010, in accordance with the Income-tax Act, 1961.
Provision for Fringe Benefit Tax (FBT) is made in accordance with the provisions of Income-tax Act, 1961.
Deferred Tax is recognised, on timing differences (other than those which are expected to be reversed during the
tax holiday period), being the difference between taxable income and accounting income that originate in one
period and are capable of reversal in one or more subsequent periods. Deferred Tax Assets are recognised if
there is reasonable certainty that there will be sufficient future taxable income to realise such assets. In situations
where the Company has unabsorbed depreciation or carry forward losses under tax laws, Deferred Tax Assets
are recognised only to the extent that there is virtual certainty supported by convincing evidence that there will be
sufficient future taxable income to realise such assets. The carrying amount of Deferred Tax Assets is reviewed at
each Balance Sheet date and is written down to the extent that it is no longer reasonably / virtually certain that
sufficient future taxable income will be available against which Deferred Tax Asset can be realised.
Income taxes are accounted for in accordance with Accounting Standards Codification (ASC) Section 740
(formerly Financial Accounting Standards Board (FASB) Statement No. 109, Accounting for Income Taxes).
Under this method, deferred income taxes are recorded to reflect the tax consequences in future years of
differences between the tax bases and carrying amounts of assets and liabilities and of net operating loss
carry-forwards. The Company provides a valuation allowance for deferred tax assets for which it does not
consider realisation of such assets to be more likely than not.
18. Earnings Per Share
Basic Earnings Per Share is calculated by dividing the net profit for the year attributable to equity shareholders
by the weighted average number of equity shares outstanding during the year. The weighted average number
of equity shares outstanding during the year is adjusted for events of bonus issues and share split.
For the purpose of calculating Diluted Earnings Per Share, the net profit for the year attributable to equity
shareholders and the weighted average number of equity shares outstanding during the year are adjusted for
the effect of all dilutive potential equity shares.
19. Going Concern
The accounts of Hostmann-Steinberg Inc. have been prepared on a going-concern basis on the assumption of
continued financial support from the Parent Company.
SCHEDULES FORMING PART OF THE CONSOLIDATED ACCOUNTS

NOTES TO THE ACCOUNTS (SCHEDULE – 17)
1. Subsidiaries
The Consolidated Financial Statements present the consolidated accounts of Micro Inks Limited with its following
subsidiaries:
Name of the Country of Proportion of

Foreign Subsidiaries Incorporation Ownership Interest
Subsidiaries
(a) Micro Inks GmbH Austria 100% (upto November 1, 2009, sold during
the year)
(b) Micro Inks (Singapore) Pte. Ltd. Singapore 100%
(c) Hostmann-Steinberg Inc. USA 100% (w.e.f. July 20, 2009, step-down
Subsidiary upto July 19, 2009)
Step-down Subsidiary
(d) Micro Inks (Hong Kong) Ltd. Hong Kong 100% owned by Micro Inks (Singapore) Pte. Ltd.
(placed under Members’ voluntary liquidation on
April 28, 2009)
(Rs. in million)
2. Contingent Liabilities not provided for, in respect of: As at As at
31/12/2009 31/12/2008
(a) Counter Guarantees given to banks 84.76 64.23
(b) Income Tax, Fringe Benefit Tax, Sales Tax, Central Excise and
Service Tax demands:
(i) in respect of matters which are contested by Micro Inks Limited 80.23 54.11
(ii) in respect of matters decided in favour of Micro Inks Limited
where the department is in further appeal 347.75 345.83
(c) Bills Discounted 220.44 234.90
(Rs. in million)
3. Capital Commitments: As at As at
31/12/2009 31/12/2008
Estimated amount of contracts remaining to be executed on Capital Account
and not provided for [net of advances of Rs. 140.15 million (As at 31/12/2008,
Rs. 34.99 million)]. 74.07 18.18
4. Security for Loans:

(a) ECB Loan of Rs. 172.63 million (USD 4 million) [As at 31/12/2008, Rs. 258.96 million (USD 6 million)] from
ICICI Bank Limited, Singapore, is secured by way of pari-passu first charge on movable properties (save and
except stocks and book debts), both present and future, of Micro Inks Limited.
(b) ECB Loan of Rs. 245.80 million (USD 5 million) [As at 31/12/2008, Rs. 245.80 million (USD 5 million)] from The
Hong Kong and Shanghai Banking Corporation Limited, Hong Kong, ECB Loan of Rs. 432.00 million (USD 9
million) [As at 31/12/2008, Rs. 245.80 million (USD 5 million)] from Standard Chartered Bank, United Kingdom
and ECB Loan of Rs. 279.30 million (USD 6 million) (As at 31/12/2008, Nil) from DBS Bank Limited, Singapore,
are secured or to be secured by way of first pari-passu charge on immovable and movable properties (save
and except stocks and book debts), both present and future, of Micro Inks Limited.
(c) Working Capital Loans [including Foreign Currency Loan of Rs. Nil (As at 31/12/2008, Rs. 1,371.41 million)]
are secured by way of first pari-passu charge on all the stocks and book debts, both present and future and
are further secured by way of second charge on the immovable properties, both present and future, of Micro
Inks Limited.
(d) Foreign Currency Loan of Rs. Nil [As at 31/12/2008, Rs. 207.06 million (USD 4.25 million)] from MB Financial,
USA, was secured on fixed assets and current assets, both present and future, of Hostmann-Steinberg Inc.
(e) Foreign Currency Loan of Rs. 349.05 million (USD 7.50 million) [As at 31/12/2008, Rs. 487.20 million (USD 10
million)] from Bank of India, New York branch, is secured on fixed assets and current assets, both present and
future, of Hostmann-Steinberg Inc. and is also guaranteed by Micro Inks Limited.
5. The following are the outstanding derivative instruments:

Type of Contract Purpose No. of Currency Value in FC Value in INR
of Contract Contracts (in million) (in million)
(a) Forward Contracts – Sell Hedging — — —
(14) USD (48.50) (2,362.44)
(b) Forward Contracts – Buy Hedging — — —
(1) USD (5.00) (243.65)
(c) Interest Rate Swap Contract Hedging 3 USD 14.00 651.70
(Notional Principal) (2) USD (10.00) (487.30)
(d) Currency Coupon Hedging 2 USD 10.00 465.50
Swap Contract (2) USD (10.00) (487.30)
(e) Principal Only Swap Contract Hedging 1 USD 4.00 186.20
(1) USD (6.00) (292.38)

6. Fixed Assets where ownership is not with Micro Inks Limited and its Subsidiaries:
(a) Plant and Machinery includes HT line installation having net block of Rs. 17.15 million (As at 31/12/2008,
Rs. 8.64 million), the ownership of which rests with the Electricity Company / Board.
(b) Plant and Machinery includes contribution for Common Effluent Treatment Plant having net block of
Rs. 2.12 million (As at 31/12/2008, Rs. 3.01 million), the ownership of which rests with a third party.
7. Interest and Other Finance Charges of Rs. 184.56 million (Previous year, Rs. 774.70 million) is arrived at as
under.
(Rs. in million)
31/12/2009 31/12/2008
(a) Interest on Fixed Period Loans 78.41 155.53
(b) Other Interest 85.81 155.13
(c) Loss on Swapping Interest Coupon 35.11 13.02
(d) Exchange Rate Fluctuation (Gain) / Loss on Foreign Currency Loans (6.75) 484.07
192.58 807.75
Less:
(e) Interest Capitalised — 0.79
(f) Interest Received from Customers and Others 2.62 3.80
(g) Interest on Deposits 0.17 28.46
(h) Interest Received on Income-tax Refund of earlier years 5.23 —
Total 184.56 774.70
8. Miscellaneous expenses under Manufacturing and Other Expenses (Schedule-14) includes Auditors’
Remuneration: (Rs. in million)
31/12/2009 31/12/2008
(a) Audit Fees 7.36 9.04
(b) Other Matters 2.53 1.98
(c) Out of Pocket Expenses 0.34 0.47
(d) Taxation Matters 0.68 0.97
Total* 10.91 12.46
*Includes amount paid to auditors of subsidiary companies of Rs. 5.60 million (Previous year, Rs. 7.58 million).
9. Employee Benefits:
(a) Defined Benefit Plans – Micro Inks Limited makes annual contributions to the Micro Inks Limited Employees’
Gratuity Trust, who in-turn, has taken Group Gratuity Scheme of the Life Insurance Corporation of India, which
is a funded defined benefit plan for qualifying employees. The scheme provides for lump-sum payment to
vested employees at retirement, death while in employment or on termination of employment as per the Gratuity
Scheme. Vesting occurs upon completion of five years of service.
(Rs. in million)
Expense recognised during the year [included in Manufacturing
and Other Expenses (Schedule-14) of Profit and Loss Account]: 31/12/2009 31/12/2008
(i) Current Service Cost 3.17 2.78
(ii) Interest Cost 2.63 2.20
(iii) Expected Return on Plan Assets (5.03) (1.86)
(iv) Actuarial (Gains) / Losses (2.47) 9.98
Total (1.70) 13.10
Change in the Obligation during the year:
(i) Present value of Defined Benefit Obligation at the beginning of the year 39.27 27.39
(ii) Current Service Cost 3.17 2.78
(iii) Interest Cost 2.63 2.20
(v) Actuarial (Gains) / Losses (5.54) 9.87
Present Value of Defined Benefit Obligation at the end of the year 38.22 39.27
Change in Assets during the year:
(i) Plan Assets at the beginning of the year 20.03 17.89
(ii) Contributions by Employer 24.01 3.36
(iii) Expected Return on Plan Assets 5.03 1.86
(v) Actuarial Losses (3.07) (0.11)
Plan Assets at the end of the year 44.69 20.03
The major categories of plan assets as a percentage of total plan:
Qualifying Insurance Policy 100% 100%
Reconciliation of Net Asset / (Liability) recognised in the
Balance Sheet during the year:
(i) Net Asset / (Liability) at the beginning of the year (19.24) (9.50)
(ii) Employer Income / (Expense) 1.70 (13.10)
(iii) Employer Contributions 24.01 3.36
(iv) Net Asset / (Liability) at the end of the year 6.47 (19.24)
(v) Actual Return on Plan Assets 1.96 1.75
Actuarial Assumptions:
(i) Discount Rate 8.25% 6.50%
(ii) Expected Rate of Return on Plan Assets 8.00% 8.00%
(iii) Expected Rate of Salary Increase 5.00% 5.00%
(iv) Attrition Rate 2.00% 2.00%
(v) Mortality Post-Retirement LIC (1994-96) Ultimate
Amounts for the current and previous years / period are as follows:
Year ended Year ended Year ended Nine-month
31/12/2009 31/12/2008 31/12/2007 period ended
31/12/2006
(i) Defined Benefit Obligation 38.22 39.27 27.39 23.06
(ii) Plan Assets 44.69 20.03 17.89 16.16
(iii) Surplus / (Deficit) 6.47 (19.24) (9.50) (6.90)
(iv) Experience Adjustments on Plan Assets (3.07) (0.11) (0.13) 0.97
(v) Experience Adjustments on Plan
Liabilities 3.08 2.47 3.32 3.01
(b) Defined Contribution Plans:

Amount recognised as an expense and included in Manufacturing and Other Expenses (Schedule-14) of Profit
and Loss Account Rs. 40.71 million (Previous year, Rs. 46.32 million).
(c) Expected rate of return on assets is taken on the basis of the benchmark rate on Government Securities for the
tenure of payment.
(d) The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority,
promotion and other relevant factors, such as supply and demand in the employment market.
10. The significant leasing arrangements in respect of Operating Lease are:
(a) Micro Inks Limited has entered into a Lease Agreement for Power Generating Equipment and Waste Heat
Recovery Equipment. The lease agreement is cancellable by giving notice for the specified period. The Agreement
is renewable on mutually agreed terms after completion of the initial lease period. During the year, the Company
has paid Rs. 46.83 million (Previous year, Rs. 31.86 million) as Standby Charges (Minimum Charges) and
Rs. 7.93 million (Previous year, Rs. 4.68 million) as Variable Charges (Contingent Charges) for the electricity
generated and these amounts are included in ‘Miscellaneous Expenses’ under Manufacturing and Other
(b) Lease arrangements for Premises in respect of Marketing Offices, Matching Centers and Depots of
Micro Inks Limited are usually renewable on mutually agreed terms but are not non-cancellable. Lease payments
in respect of these premises are disclosed as ‘Office and Godown Rent’ under Manufacturing and Other
(c) Lease arrangements for Premises for residential use of employees of Micro Inks Limited are usually renewable
on mutually agreed terms but are not non-cancellable. Lease payments in respect of these premises aggregating
Rs. 0.75 million (Previous year, Rs. 1.10 million) are included in ‘Salaries, Wages and Bonus’ under Manufacturing
and Other Expenses (Schedule-14).
(d) Lease arrangements for certain property, office equipment and automobiles of Hostmann-Steinberg Inc., USA,
are non-cancellable. Lease payments in respect of these premises aggregating Rs. 47.72 million
(Previous year, Rs. 49.40 million) are included under Manufacturing and Other Expenses (Schedule-14).
The minimum future lease rentals payable are as under:
(Rs. in million)
As at As at
31/12/2009 31/12/2008
Not Later than one year 37.88 42.51
Later than one year but not later than five years 67.24 96.29
Later than five years 2.46 6.78
11. Components of Deferred Tax Assets and Liabilities:

(Rs. in million)
Particulars As at As at
31/12/2009 31/12/2008
Deferred Tax Liability
Depreciation 427.69 519.34
Total (A) 427.69 519.34
Deferred Tax Assets
Provision for Compensated Absences & Gratuity 6.49 12.81
Provision for Others 188.47 179.44
Carry forward Operating Losses 1,181.68 1,215.42
#
Provision for Mark to Market Losses on Derivative Contracts — 24.04
1,435.95 1,518.01
Valuation Allowance 1,372.84 1,372.07
Total (B) 63.11 145.94
Net Deferred Tax Liability (A–B) 364.58 373.40
#
Based on the Supreme Court of India ruling in the month of March 2009, revenue loss arising on Mark to Market
(MTM) is an allowable expenditure as per the Indian Income-tax Act, 1961.
12. Earning Per Share (Basic and Diluted): Year ended Year ended
31/12/2009 31/12/2008
Profit After Tax (Rs. in Million) 967.55 336.75
Weighted Average No. of Equity Shares outstanding during the financial year
(in million) 24.87 24.87
Basic and Diluted Earning Per Share of Rs.10 each (in Rs.) 38.90 13.54
13. Micro Inks Limited has reviewed the useful lives of certain categories of fixed assets during the year. Consequently,
depreciation rates on these categories of assets have been revised, resulting in an additional charge for depreciation
by Rs. 151.51 million and a corresponding reduction in profit before tax for the year by a like amount.
14. Related Party Disclosures
Related party disclosures, as required by the Indian Accounting Standard-18, are given below:
(a) Where Control Exists:
S. No. Relationship Related Party
(i) Holding Company MHM Holding GmbH, Germany
(b) Name of related parties and description of relationship, where transactions have taken place during
the year:
(i) Fellow Subsidiaries: — Michael Huber München GmbH, Germany
— Hostmann-Steinberg GmbH, Germany
— Stehlin + Hostag AG, Switzerland
— Hostmann-Steinberg Australia Pty. Ltd., Australia
— Hostmann-Steinberg Limited, Canada
— Huber Chile S.A., Chile
— Huber Italia S.p.A., Italy
— Huber Inks (Shenzhen) Ltd., China
— Info-Lab Limited, Ireland
— Hostmann-Steinberg Tintás Gráficas Brasil Ltda., Brazil
— Hostmann-Steinberg South Africa (Pty.) Ltd., South Africa
— PT Huber Inks Indonesia, Indonesia
(ii) Holding Company: — MHM Holding GmbH, Germany
(iii) Key Management Personnel: — Mr. Ashwani Bhardwaj (Managing Director)

(c) Transactions with Related Parties:
(Rs. in million)
S. Name of Related Party Fellow Holding Key Grand
No. Subsidiaries Company Management Total
Personnel
(i) Sales of Goods and Services 5,932.64 — — 5,932.64A
(5,906.64) — — (5,906.64)
(ii) Purchase of Goods and Services 399.54 — — 399.54B
(594.70) (5.02) — (599.72)
(iii) Purchase of Fixed Assets — — — —
(4.92) — — (4.92)
(iv) Other Expenditure 45.81 95.35 — 141.16C
(27.03) — — (27.03)
(v) Reimbursement of Expenditure 4.05 7.92 — 11.97D
(Obtained) (12.29) (7.51) — (19.80)
(vi) Sale of Investment — 1.20 — 1.20E
— — — —
(vii) Remuneration and Perquisites — — 8.52 8.52F
— — (7.26) (7.26)
(viii) Loss / Gain on Exchange Rate Fluctuation -30.50 3.10 — -27.40G
(Net) [-ve sign denotes loss] (184.82) (-0.04) — (184.78)
(ix) Royalty 277.50 — — 277.50H
(150.24) — — (150.24)
(x) Proposed Dividend (Equity) — 105.21 — 105.21I
— (105.21) — (105.21)
(A) Includes Sales of Goods and Services to:

(Rs. in million)
31/12/2009 31/12/2008
Michael Huber München GmbH, Germany 1,788.07 2,150.04
Hostmann-Steinberg GmbH, Germany 1,284.54 1,114.25
Stehlin + Hostag AG, Switzerland 1,035.27 967.36
Hostmann-Steinberg Limited, Canada 1,170.39 969.32
(B) Includes Purchase of Goods & Services from Stehlin + Hostag AG, Switzerland, amounting Rs. 59.92 million
(Previous year, Rs. 81.24 million), Hostmann-Steinberg Limited, Canada, amounting Rs. 289.19 million
(C) Includes Other Expenditure paid to Hostmann-Steinberg GmbH, Germany, amounting Rs. 21.22 million
(Previous year, Rs.19.78 million), Hostmann-Steinberg Limited, Canada, amounting Rs. 16.26 million
(Previous year, Rs. 0.42 million) and MHM Holding GmbH, Germany, amounting Rs. 95.35 million (Previous year, Nil).
(D) Includes Reimbursement of Expenditure (Obtained) from Hostmann-Steinberg Australia Pty. Ltd., Australia,
amounting Rs. 1.35 million (Previous year, Rs. 5.52 million) and MHM Holding GmbH, Germany,
amounting Rs. 7.92 million (Previous year, Rs. 7.51 million).
(E) Comprises Sale of Investment made in Micro Inks GmbH, Austria, amounting Rs. 1.20 million (Previous year, Nil).
(F) Comprises Remuneration and Perquisites paid to Mr. Ashwani Bhardwaj Rs. 8.52 million (Previous year,
Rs. 6.57 million).
(G) (Loss) / Gain on exchange rate fluctuation on transactions with:
(Rs. in million)
31/12/2009 31/12/2008
Michael Huber München GmbH, Germany (24.98) 106.78
Hostmann-Steinberg GmbH, Germany (18.27) 39.38
Stehlin + Hostag AG, Switzerland (13.08) 35.83
(H) Comprises Royalty paid / payable to Michael Huber München GmbH, Germany, amounting Rs. 277.50 million
(I) Comprises Proposed Dividend payable to MHM Holding GmbH, Germany, amounting Rs. 105.21 million
(d) Balances Outstanding:
(Rs. in million)
S. Description Fellow Holding Grand Total
No. Subsidiaries Company
(i) Receivables 1,421.40 — 1,421.40
(1,471.09) — (1,471.09)
(ii) Payables 170.06 80.38 250.44
(237.07) (0.39) (237.46)
(iii) Proposed Dividend Payable — 105.21 105.21
— (105.21) (105.21)
15. Segment Information
In addition to the Significant Accounting Policies applicable to the business segment as set out in Schedule-16,
the Significant Accounting Policies in relation to the segment accounting are as under:
The Management has considered Business Segment as primary format for segment reporting, namely:
(a) Inks and Intermediates
(b) Other Products and Services (Lamination Adhesives, Wire Enamels, Ketonic Resins and Polyamide Resins)
These Business Segments have been identified and reported taking into account the product, nature of manufacturing
process, industry profile, differences in the risks and returns, the organisational structure and the internal management
reporting system.
Inks and Intermediates and Other Products and Services have different manufacturing process, risks and returns
and internal reporting system.
The Geographical Segment is considered as secondary format for reporting and identified by taking into account the
location of customers, size and risks prevailing in the market, internal organisational structure and the internal
management reporting system.
(a) Primary Segment: Business Segment

(Rs. in million)
Segment Revenue
External Revenue 15,192.46 945.33 16,137.79
(15,303.49) (822.13) (16,125.62)
Inter-segment Revenue 108.64 108.64
(79.86) (79.86)
Total 15,192.46 1,053.97 16,246.43
(15,303.49) (901.99) (16,205.48)
Less: Inter-segment Revenue 108.64 108.64
(79.86) (79.86)
Total Revenue 15,192.46 945.33 16,137.79
(15,303.49) (822.13) (16,125.62)
Segment Results
Segment Result 1,354.04 172.60 1,526.64
(1,219.90) (89.60) (1,309.50)
Less: Interest and Other Finance Charges (Net) 184.56
(774.70)
Others 0.45
(Unallocated Income-Unallocated Expenses) (-9.91)
Profit Before Tax 1,341.63
(544.71)
Segment Assets and Liabilities
Segment Assets 10,432.81 333.39 10,766.20
(11,386.28) (299.81) (11,686.09)
Unallocated Assets 254.30
(320.78)
(12,006.87)
Segment Liabilities 2,609.50 146.73 2,756.23
(2,212.36) (121.49) (2,333.85)
Unallocated Liabilities 198.62
(Excludes Loan Funds and Deferred Tax Liability) (233.47)
Total Liabilities 2,954.85
(2,567.32)
Fixed Assets’ Addition@ 220.72 8.64 229.36
(487.00) (2.42) (489.42)
Unallocated Capital Expenditure 18.30
(12.77)
(502.19)
Depreciation / Amortisation 537.07 9.35 546.42

(574.76) (4.76) (579.52)
Unallocated Depreciation / Amortisation 37.67

(13.58)
Total Depreciation / Amortisation 584.09
(593.10)
Non-Cash Expenses other than Depreciation / 57.93 1.48 59.41
Amortisation (103.50) (-1.07) (102.43)
Unallocated 1.57
(-1.00)
Total Non-Cash Expenses other than 60.98
Depreciation / Amortisation (101.43)
@
Excludes Capital Work-in-Progress and adjustment on account of foreign exchange translation difference.
(b) Secondary Segment : Geographical Segment

(Rs. in million)
Segment Revenue
India 5,969.83 810.62 6,780.45
(5,459.39) (671.57) (6,130.96)
Outside India (including Export Benefit) 9,222.63 134.71 9,357.34
(9,844.10) (150.56) (9,994.66)
Total Revenue 15,192.46 945.33 16,137.79
(15,303.49) (822.13) (16,125.62)
Assets
Segment Assets
India 6,842.85 329.03 7,171.88
(7,216.35) (288.96) (7,505.31)
Outside India 3,589.96 4.36 3,594.32
(4,169.93) (10.85) (4,180.78)
10,432.81 333.39 10,766.20
(11,386.28) (299.81) (11,686.09)
Unallocated Assets
India 254.30
(314.20)
Outside India —
(6.58)
(12,006.87)
Fixed Assets’ Addition@
Segment Assets
India 187.94 8.64 196.58
(325.12) (2.42) (327.54)
Outside India 32.78 — 32.78
(161.88) — (161.88)
220.72 8.64 229.36
(487.00) (2.42) (489.42)
Unallocated Assets
India 18.30
(12.77)
(502.19)
@
Excludes Capital Work-in-Progress and adjustment on account of foreign exchange translation difference.
16. The figures of the previous year have been regrouped / rearranged wherever necessary.


Notes
28 MICRO INKS (SINGAPORE) PTE. LTD., SINGAPORE

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Annual Report 2009 1

Message from the Chairman

Index Page No.

1. Board and other Particulars 3

3. Report on Corporate Governance 10

6. Balance Sheet Abstract 49

7. Management Discussion and Analysis Report 50

9. Statement Pursuant to Section 212 of the Companies Act, 1956 57

10. Auditors' Report on Consolidated Financial Statements 59

11. Consolidated Financial Statements 60

BOARD AND OTHER PARTICULARS

EXECUTIVE COMMITTEE Mr. Ashwani Bhardwaj Managing Director

VICE PRESIDENT & Mr. Hitesh Parikh

AUDITORS M/s. Deloitte Haskins & Sells, Chartered Accountants

REGISTRAR AND Link Intime India Private Limited

Financial Highlights: (Rs. in Million)

Sales/Income From Operations

Domestic (Net)-Including Other Operating Income 6,857.34 6,199.47

Export 6,907.47 7,183.31

PBDIT 2,145.82 2,191.92

Provision for Taxation (Including FBT) 382.81 221.65

Deferred Tax Credit (8.82) (13.80)

PAT 1,125.49 902.85

Balance Brought Forward 1,564.27 1,086.01

Profits Available for Appropriation 2,689.76 1,988.86

Proposed Equity Dividend 149.23 149.23

Tax on Proposed Equity Dividend 25.36 25.36

Transfer to General Reserve 500.00 250.00

Surplus Carried to Balance Sheet 2,015.17 1,564.27

Delisting of Equity Shares of the Company:

Corporate Governance and Management Discussion and Analysis Reports:

Corporate Social Responsibility:

4. the annual accounts have been prepared on a going concern basis.

Energy, Technology & Foreign Exchange:

For and on Behalf of the Board

ANNEXURE TO THE DIRECTORS’ REPORT

(A) Power and Fuel Consumption

Particulars Units 2009 2008

(a) Purchased from Electricity Boards

KWH Units (Million) 26.34 25.78

Total Amounts Rs. (Million) 143.90 127.03

Average Rate Rs./Unit 5.64 4.93

(b) Purchased from Others

KWH Units (Million) — 3.47

Total Amount Rs. (Million) — 23.24

Average rate Rs./Unit — 6.69

2. Natural Gas SCM. (Million) 19.84 15.29

Total Amount Rs. (Million) 315.77 200.05

Average rate Rs./Unit 15.92 13.08

3. High Speed Diesel Ltrs. (Million) 0.63 0.81

Total Amount Rs. (Million) 19.31 26.32

Average rate Rs./Unit 30.49 32.33

4. Furnace Oil Kgs. (Million) 4.86 6.13

Total Amount Rs. (Million) 74.68 131.62

Average Rate Rs./Unit 15.36 21.48

5. Solid Biomass Briquettes Kgs. (Million) 0.87 —

Total Amount Rs. (Million) 3.59 —

Average Rate Rs./Unit 4.11 —

(B) Consumption per Unit of Production

2. BENEFITS DERIVED AS A RESULT OF R&D

3. FUTURE PLAN OF ACTION

B. TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION