SIGNIFICANT ACCOUNTING POLICIES & NOTES ON ACCOUNTS Schedule Forming Part of the Financial Statement for the Year ended 31st March 2011.

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1 SCHEDULE- 15 SIGNIFICANT ACCOUNTING POLICIES & NOTES ON ACCOUNTS Schedule Forming Part of the Financial Statement for the Year ended 31st March (A) Significant Accounting Policies [A] Basis of Preparation: - The Financial statements have been prepared on accrual basis and under the historical cost convention in accordance with the generally accepted accounting principles in India and the relevant provision of the Companies Act, [B] Revenue Recognition: - Revenue is recognised on accrual basis to the extent it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. -Sale of Goods: - Revenue from sale of goods is recognised when the significant risks and rewards of ownership of the goods are transferred to the customer and is stated net of sales tax and sales returns. Export sales are stated at FOB value. -Service, Maintenance Charges & installation: - Revenue from these activities are booked, based on agreements /arrangements with concerned parties. -Interest: - Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable. -Insurance Claims :- Insurance claims are accounted for when settled. [C] Expenditure: - Expenses are accounted for on accrual basis and provisions are made for all known losses and liabilities. Purchases are accounted on the basis of Goods Received Note (GRN). [D] Fixed assets: - Fixed assets are stated at cost less accumulated depreciation. Cost comprises the purchase price and any attributable cost of bringing the assets to its working condition for its intended use. The cost of technical know-how is capitalized as plant and depreciated on the basis of their estimated life evaluation made by technical experts. Leased assets are capitalized at actual cost less subsidy received / receivable [E] Depreciation: - (i) Depreciation on fixed assets ( Other than leasehold land, technical know how and temporary structure) are depreciated on straight-line method (SLM) at the rate and in the manner prescribed in schedule XIV to the companies Act, 1956 by writing off 95% of the cost of the assets over the specified period of the assets. (ii) Depreciation on additions to assets or on sale/discardment of assets is calculated on pro-rata basis from the date of such addition as per Goods Received Note (GRN) or up to the date of such sale / discardment, as the case may be. (iii) Cost of lease hold land of Factory premises is amortized over the period of lease i.e. 99 years, however land situated at Mansarovar, Jaipur, has not been amortized. (iv) Depreciation on fixed assets of costing up to Rs.5000 has been provided at the rate of 95% keeping 5% residual value of assets in books of accounts. (v) Depreciation on Fixed Assets used for Generation of Wind Power is 5.28% on Straight Line Method (SLM), i.e. treating it as a continuous process plant. (vi) Lease assets (SPV Water Pumping System) in respect of plant & machinery has been depreciated over lease period of respective assets so as to keep the carrying amount of each assets equivalent to future lease rent receivable. (vii) In respect of following assets, depreciation is provided at rates higher than the rates specified in schedule (xiv) of the Companies Act, Particulars Rates of Depreciation Rates specified Charged in Schedule(xiv) (a) Office Equipment 9.5% 6.33% (Included in Furniture & Fixtures) (b) Plant & Machinery 5.38% 4.75% (Other than Machinery used for manufacturing of electronic goods & components) (c) Building 3.34% 1.63% (Other than Factory Building) (d) Road, Drains & Water Supply 3.34% 1.63%

2 [F] Impairment of Assets: - The Company determines whether there is any indication of impairment of the carrying amount of its assets. The recoverable amount of such assets are estimated, if any indication exists and impairment loss is recognized wherever the carrying amount of the assets exceeds its recoverable amount. [G] Inventories: - Cost of inventories comprises of all cost of conversion and other cost incurred in bringing them to their respective present location and condition and valued on the basis of FIFO method. Raw material & Component and packing material stores are valued at cost or net realisable value which ever is less, except Raw Material & Components determined obsolete and slow moving which are valued at estimated realisable value. Further no valuation of discarded and rejected material has been made, as revenue in respect thereof is accounted on realization basis. Value of Work in progress includes material cost only. Inventories of Field Maintenance Centers are valued similar to the rates of raw material and components lying at factory. Value of imported inventory includes impact on account of foreign exchange fluctuation. Goods in transit are accounted to the extent paid for, if any. Finished goods are valued at cost or net realisable value which ever is less. Cost is determined on estimated basis and inclusive of excise duty. Traded goods are valued at cost or net realisable value whichever is less. Stand by EMTs and sub-assemblies of EMT s are written off over a period of 5 and 3 years respectively. [H] Provision for Current and deferred Tax: - Provision for current tax is made after taking into consideration benefits admissible under the provision of the income tax act, Deferred tax liability/assets resulting from timing difference between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognised and carried forward only to the extent that there is a reasonable / virtual certainty that the asset will be realised in future. [I] Provision, Contingent Liabilities and Contingent Assets: - Provision involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statement. [J] Sundry Debtors and Loans and advance: - Sundry debtors and loans and advances are stated after making adequate provision for any doubtful balance. [K] Foreign Currency Transaction: - Foreign currency transactions are accounted on the rates prevailing on the date of transaction. Balances in the form of Current Assets and Current Liabilities in Foreign Currency, outstanding on the date of balance sheet are accounted at the rates of exchange prevailing on the date of the balance sheet. [L] Employee Benefits: - Gratuity Liability under the payment of Gratuity Act is based on actuarial valuation carried out at the close of the financial year. Company has taken a policy administered by Life Insurance Corporation of India through approved gratuity trust fund. Earned Leave accruing to employees as on the last day of financial year is accounted for on accrual basis. Retirement benefits in the form of provident fund/superannuation/pension scheme whether in pursuance of any law or otherwise accounted on accrual basis and charged to Profit & Loss account. [M] Grant in Aid: - Revenue in respect of Grants from Govt.and Govt.Departments are recognised for in the years in which the specific work for which the grant was received is completed by the Company. Unutilised Grants, if any, feature as Other Liabilities in the Balance Sheet.

3 (B) OTHER NOTES (Rs.in Lacs) (Rs.in Lacs) 1. Contingent Liabilities: (a) Guarantee given by bankers on behalf of the company (b) Claims against the Company Not acknowledged as debts: Liability against Taxes/Excise duty for which representations and/or appeals are pending with appropriate authorities Expenditure on Research and Development: (i) Revenue Rs. 1,38,13,926/- Rs. 1,25,28,131/- (ii) Capital Rs. 10,30,720/- Rs. 9,28,183/ Rs. 1,48,44,646/- Rs.1,34,56,314/ Provision(s)/Adjustment(s) has not been made in the accounts for: (a) Additional liabilities, if any, in respect of pending Sales tax and Income-tax assessment, being unascertained. (b) Claims pending for settlement in court of law, being unascertained. 4. A. Lease Accounting 1. Gross carrying amount of lease assets : Rs. 1,50,81,056/- 2. Accumulated depreciation of the lease assets : Rs. 1,37,81,875/- 3. Accumulated impairment losses : Nil 4. Depreciation charge on lease assets during the year : Rs. 10,47,185/- 5. Impairment loss recognised during the year : Nil 6. Impairment loss reversed during the year : Nil B. Future minimum lease payments receivables 1. Not later than one year : Rs. 10,00,222/- 2. Later than one year and not later than 5 years : Rs. 2,98,959/- 3. Later than five years : Rs. Nil C. Contingent rent : Nil D. General Description of lease : Leases are non-cancelable operating leases. 5. Disclosure of Deferred tax liability as per Accounting Standard 22 of The Institute of Chartered Accountants of India: Particulars Balance Balance A) Deferred Tax Liability Difference of depreciation as per income tax laws and books of accounts Total (A) B) Deferred Tax Assets Provision for Leave Encashment Provision for Gratuity, Bonus, PRP Total (B) Net Deferred tax liability Inventories as at the close of the year (Sch.5A) includes raw material and components lying with job working parties valuing Rs. 8,36,958(previous year Rs. 2,79,800) and lying with other parties on loan basis valuing Rs. 4,07,147/- (previous year Rs. 57,212/-). 7. Debtors (Schedule 5B) include Rs. 2,11,39,469/- (previous year Rs. 2,31,27,458/-) being Retention Money kept by the customers according to the terms of the their purchase orders.

4 8. Book debts, Loans and advances, creditors, deposits etc. have been taken at their book values, awaiting respective confirmation and/or reconciliation and its consequential adjustment. 9. In absence of necessary information with the Company, relating to the registration status of suppliers under the Micro, Small and Medium Enterprises Development Act, 2006, the information required under the said Act could not be complied and disclosed. 10. In compliance of AS 15 in respect of employee benefits, the disclosure as defined in the Accounting Standard is given below: DEFINED BENEFIT PLAN I. GRATUITY: The employees gratuity fund scheme is managed by a policy, administered by Life Insurance Corporation of India through approved gratuity trust fund is a defined benefit plan. The present value of obligation is determined based on Actuarial valuation using the Projected Unit Credit (PUC) method to assess the plan s liabilities including those related to retirement, resignation and death-in-service benefits. (a) Reconciliation of opening and closing balance of defined benefit obligation (in Rs.) (in Rs.) Opening Defined Benefit Obligation on ,87,94,826 3,23,41,698 Service cost for the year 32,38,176 28,58,284 Interest cost for the year 39,03,586 25,87,336 Actuarial losses (gains) 32,41,659 1,13,97,149 Benefits paid (32,58,633) (3,89,641) Closing defined benefit obligation on ,59,19,614 4,87,94,826 (b) Reconciliation of opening and closing balance of fair value of plan assets. (in Rs.) Opening fair value of plan assets 1,67,22,571 1,15,54,963 Expected return 28,78,131 12,53,183 Actuarial gains and (losses) 62,966 (71,506) Contributions by employer 3,20,43,361 43,75,572 Benefits paid (32,58,633) (3,89,641) Closing balance of fund 4,84,48,396 1,67,22,571 (c) Reconciliation of fair value of assets and obligations. (in Rs.) Present value of funded obligations 4,84,48,396 1,67,22,571 Fair value of plan assets 4,84,48,396 1,67,22,571 Present value of unfunded obligations 74,71,218 3,20,72,255 Unrecognised past service cost Nil Nil Net liability 74,71,218 3,20,72,255 Amounts in the balance sheet: Liabilities 5,59,19,614 4,87,94,826 Assets 4,84,48,396 1,67,22,571 Net liability 74,71,218 3,20,72,255 (d) Expenses recognised during the year. (in Rs.) Current service cost 32,38,176 28,58,284 Interest on obligation 39,03,586 25,87,336 Expected return on plan assets (28,78,131) (12,53,183) Net actuarial losses (gains) recognised in the year 31,78,693 1,14,68,656 Past service cost Nil Nil Losses (gains) on curtailments and settlement Nil Nil Expense recognised 74,42,324 1,56,61,093

5 (e) Investment Details Funds managed by Insurer (LIC) 100% (f) Acturial Assumption Discount rate as on % Expected return on plan assets at % Annual increase in Salary costs 6.00% Mortality Rate LIC ( ) The estimates of future salary increase are based on seniority, promotion and other relevant factors, such as supply and demand in the employment market. II. LEAVE ENCASHMENT: Cost of compensated absences expenses (Earned Leave) of Rs. 87,26,010/- has been provided in the Books on accrual basis. Total liability as on is Rs. 4,01,75,301/- which is un-funded. 11. Payment to Auditors include: Audit fee Rs. 60,000 Rs. 40,000 Tax Audit fee Rs. 30,000 Rs. 25,000 Certification work Rs. 6,100 Rs. 17,000 Out of pocket expenses Rs. 25,000 Rs. 20,000 Service tax Rs. 9,898 Rs. 10, Earning per Equity Share:- EPS is computed in accordance with the Accounting Standard-20: Net Profit After Tax (Rs.) Weighted average number of Equity Shares for calculation of Basic EPS Basic earning per share (Rs.) Weighted average number of Equity Shares outstanding Add: Diluted impact of Share Application money Weighted average number of Equity Shares for calculation of Diluted EPS Diluted earning per share (Rs.) Segment Reporting: - In Compliance of Accounting Standard 17 on Segment Reporting issued by Institute of Chartered Accountants of India, the required information is as under: Business Segments: - The Company has adopted following business segments as its reportable segment. 1. Solar Energy 2. Electronic 3. Wind Power Geographical Segment has been considered for secondary Segments Reporting by treating sales revenue in India and foreign countries as separate geographical segments.

6 A. BUSINESS SEGMENT Segment Revenue - External (Net of Excise Duty) (Rs. in Lacs) Solar Electronics Wind Power Total Cur.Yr. Prev.Yr. Cur.Yr. Prev.Yr. Cur.Yr. Prev.Yr. Cur.Yr. Prev.Yr Results Segment Results Add:- Unallocated Corporate Interest and any Other income Less: Unallocated Corporate Exp., Interest and finance charges Income Tax(Net) Profit after Tax Other Information Segment Assets Add:- Unallocated Corporate Assets Total Segment Liabilities Add: Unallocated Corporate Liabilities Total Capital Expenditure Depreciation Non Cash expenses other than Depreciation B. GEOGRAPHICAL SEGMENT Sales Revenue Cur.Year Prev.Year - India Foreign Countries Total Carrying Amount of Segment Assets - India Foreign Countries Total Additions to Fixed Assets - India Foreign Countries Total

7 14. Closing stock of finished goods includes excise duty of Rs. 6,81,768/- (previous year Rs. 4,06,941/- ). 15. Related Party disclosure: - Disclosures as per Accounting standard 18 are as under (i)promoters : - Instrumentation limited Kota RIICO Ltd. Jaipur As per AS 18 Being a Govt. Company there is no need to disclose transaction with Promoters (ii) Key Managerial Personnel : - Shri A.K. Jain (Managing Director) w.e.f Shri A.K. Sharda (Managing Director) Additional Charge to Shri P.M. Bhardwaj (Managing Director) Additional Charge to Shri M.M. Bhardwaj (Managing Director) up to Remuneration and other benefits paid to M.D. Shri A.K.Jain (Rs.) 1,15, Shri M.M. Bhardwaj (Rs.)26,06,853 14,35, (Rs.)27,22,099 14,35, Bad debts amounting to Rs. 2,12,07,800/- is on account of non-recoverable old outstanding sundry debtors and includes liquidated damages of Rs. 36,80,903/ Expenditure on Technical Literature, Software, Electronic Media Stores, Maintenance, Printing & Stationery and Consumable stores are charged to profit & loss account treating them as consumed in the year of purchases. 18. Depreciation includes arrears of depreciation provided on lease assets - plant & machinery (SPV Water Pumping System) of Rs. 2,35,824, due to change in accounting policy in respect of depreciation. 19. Sales does not include sales of spares for which service job reports from field has been received after closing of the financial year. 20. Liability towards Service and maintenance on account of warranty obligation has not been provided for as amount of obligation is un-ascertainable. 21. Advance from Customers includes Central Financial Assistance (CFA) from Ministry of New & Renewable Energy, Govt. of India, for executing various projects of Renewable Energy. The same is adjusted on prorata basis from each invoice raised for the respective project. 22. Company has not executed registry of the land situated at Mansarovar, Jaipur. 23. Value of obsolete/non-moving /slow moving inventory is reduced by Rs. 1,13,49,470/ Previous Year figures have been re-arranged/regrouped to make them comparable with those of the current year. (C) ADDITIONAL INFORMATION PURSUANT TO PROVISION OF PART-II PARA 3 & 4 OF SCHEDULE-VI TO COMPANIES ACT, Quantitative information regarding licenced capacity and installed capacity and goods manufactured. S.No. PARTICULARS LICENCED INSTALLED ACTUAL ACTUAL CAPACITY CAPACITY PRODUC- PRODUC- AS ON AS ON TION IN TION IN 31/03/ /03/ Electronic Milk (In Nos.) N.A Analyser (EMA) 2. Solar PV Modules/ (In KW.) N.A Systems (SPV) (43428Nos.)** (48605 Nos.) 3. Wind Power Generation (In Kwh) N.A ** Installed capacity is on single shift basis. * The Qty. of production of SPV modules includes 1522 Nos. purchases/returns during the year. ** Includes Kwh used for captive consumption and Kwh taken by RVVNL towards wheeling charges.

8 2. Statement of opening & closing stock & sale of Finished goods. S.No. ITEMS STOCK AS ON CLOSING STOCK SALES 01/04/2010 AS ON QTY. VALUE QTY. VALUE QTY. VALUE QTY. VALUE (Rs.) (Rs.) (Rs.) (Rs.) Electronic (Nos.) Milk Analyser (EMA) 2. Solar PV Module/ (Nos.) System (SPV) 3. Wind Power Generation (Kwh) NOTE: 1) The value of Sales of EMA & SPV are inclusive of sales of spares etc. 2) The Qty. of Sales of SPV includes 36 Nos. transferred and used in internal use/replacement. 3) The Qty. of Sales of Wind Power Generation does not include Kwh being wheeling taken by RVVNL. 4) The opening/closing stock of EMA includes 51 Nos. of Stand by units Rs. 1/- each. 5) The Qty. of Sales of EMA includes 21 Nos. of Electronic Energy Meter used during the year. 3. Break-up of imported & indigenously obtained raw material, components & spare consumed: Particulars (Rs.) (%) (Rs.) (%) (A) Raw Material & Components: - Imported (landed cost) 33,98,61, ,56,07, Indigenously obtained (Cost is net of Modvat Credit) 61,44,57, ,36,85, ,43,18, ,92,93, (B) Stores & Spares consumed: - Imported (landed cost) 2,54, Indigenously obtained 27,71, ,72, Details of major raw material & components consumed: ,26, ,72, CURRENT YEAR PREVIOUS YEAR Particulars Qty. Value(Rs.) Qty. Value(Rs.) Solar Cells (Nos.) 10,23,995 17,76,41, ,81,88,020

9 5. Value of imports on CIF basis: (Rs.) (Rs.) Raw Material & Components 31,47,07,686 18,34,10, Expenditure in foreign currency: Foreign Travelling 1,97,560 2,32,398 Training Expenses - 3,29, Earnings in foreign exchange on FOB value: Export Sales 3,69,106 1,87,843 Others-commission - 11,79, Remuneration to Managing Director: During the year the following amounts were paid to Managing Director as remuneration: Salaries & Allowances 10,08,042 10,62,102 P.F. Contribution 1,38,806 95,133 Perks 3,04,347 2,78,328 Retirement Consideration 12,70, ,22,099 14,35, Besides above use of Staff Car including for personal use up to ceiling of 750 Kms per month on payment of Rs. 325 p.m. has been allowed to Managing Director in accordance with terms of appointment.

10 BALANCE SHEET ABSTRACT AND COMPANY S GENERAL BUSINESS PROFILE The information relating to the Balance Sheet abstract and the Company s general business profile as per the Part IV of Schedule VI to the Companies Act, 1956 is as under:- I.Registration Details Registration No OF 1981 State Code 17 Balance Sheet Date Date Month Year II. Capital Raised during the year (Amount in Rs. Thousands) Public Issue Right Issue NIL Bonus Issue NIL Private Placement NIL III.Position of Mobilisation and Deployment of funds (Amount in Rs. Thousands) Total Liabilities Total Assets Sources of Funds *Paid up Capital Reserves & Surplus Secured Loans Unsecured Loans NIL * Includes Share Application money Net Deferred Tax Liability Application of Funds Net fixed Assets Investments NIL IV. Performance of Company (Amount in Rs. Thousands) Net Current Assets Misc.Expenditure NIL Accumulated Losses NIL #Turnover Total Expenditure Profit/Loss before tax Profit/Loss after tax # Turnover represents total income Earning Per Share in Rs. Dividend Rate % V. Generic Names of three principal products/services of Company (as per monetary terms) Item Code No. Product Description AGRO ELECTRONIC INSTRUMENTS SOLAR PHOTOVOLTAIC MODULES & ITS SYSTEMS -Nil- WIND POWER GENERATION

11 CASH FLOW STATEMENT FOR THE YEAR ENDED 31st MARCH, 2011 (In Rupees) (A) Cash Flow from Operating Activities Net Profit before tax 6,25,27,163 1,99,67,504 Adjustments for; Depreciation and amortisation 94,97,643 1,71,22,230 Interest and finance charges 87,43,269 1,98,32,041 (Profit)/Loss on sale of fixed assets(net) 85,456 85,335 Fixed Assets written off 70,387 7,66,024 Interest Income (72,36,231) (7,34,213) Operating Profit Before Working Capital Changes 7,36,87,687 5,70,38,921 (Increase)/Decrease in Inventories (7,31,20,978) 2,91,01,786 (Increase)/Decrease in Sundry Debtors 37,11,105 (13,55,94,918) (Increase)/Decrease in loans & advances 1,19,104 (32,59,478) (Decrease)/Increase in current liabilities & provisions 15,55,68,365 9,43,78,175 Income taxes paid(net) (1,96,29,991) (79,58,902) Net Cash from operating activities (A) 14,03,35,292 3,37,05,584 (B) Cash flow from investing activities Purchase of Fixed Assets (42,98,935) (25,62,268) Sale proceeds of Fixed Assets 1,71,786 1,02,499 Interest Income 72,36,231 7,34, Net Cash from investing activities(b) 31,09,082 (17,25,556) (C) Cash flow from financing activities Equity Contribution(including Share Application Money) 3,55,00,000 - Addition/(repayment) of loans(net) (1,63,94,796) (3,18,77,291) Payment of interest & finance charges (87,43,269) (1,98,32,041) Dividend paid (72,89,333) (36,32,634) Dividend tax paid (12,10,667) (6,17,366) Net Cash from financing activities(c ) 18,61,935 (5,59,59,332) Net increase in Cash & Cash equivalents (A+B+C) 14,53,06,309 (2,39,79,304) Cash & Cash equivalents as at the beginning of the year 1,18,43,021 3,58,22,325 Cash & Cash equivalents as at the end of the year* 15,71,49,330 1,18,43, Note: All figures in brackets are outflows * Cash and cash equivalents at the end of the year includes bank term deposit receipts of Rs Lacs (Previous Year Rs Lacs) which have been pledged as security with the Bank against Overdraft, Guarantee and Letter of Credit facility provided by Bank on behalf of the Company, this amount is not available for use by the Company. Sd/- Sd/- Sd/- (Subhash Agrawal) (P.M. Bhardwaj) (A.K. Jain) Dy.Gen.Manager(Fin.) Director Managing Director This is the Cash flow statement referred to in our report of even date. For & on behalf of Gopal Sharma & Co. Chartered Accountants. Place: Jaipur Date: Sd/- (Abhishek Sharma) Partner

DEEPAK PHENOLICS LIMITED (Formerly known as Deepak Clean Tech Limited ) Balance Sheet as at March 31, 2016 As at March 31, 2016

DEEPAK PHENOLICS LIMITED (Formerly known as Deepak Clean Tech Limited ) Balance Sheet as at Note No. I. EQUITY AND LIABILITIES Shareholders Funds Share Capital 2 6,184.41 1,405.00 Reserves and Surplus