Contingent liabilities are disclosed in the Financial Statements by way of notes to accounts, unless possibility of an
outflow of resources embodying economic benefit is remote.

Provision for Warranty

Provisions for expected cost of warranty obligations are recognized based on Management's best estimate of the
expenditure required to settle the obligation which takes into account the empirical data on the nature, frequency and
average cost of warranty claims and regarding possible future incidences.

Provision for Rejection
Provision for rejection on sales is recognised once the products are sold. Materials are rejected due to various reasons

and are either re processed and replaced to the customers depending on the type of rejections. These rejections get
fulfilled within a period of 3 months and the provisions represent the value of management's best estimate of possible
rejections within the next one quarter.

B.12 REVENUE RECOGNITION
Sale of Goods & Rendering of Services

Revenue is recognised when a promise in a customer contract (performance obligation) has been satisfied by
transferring control over the promised goods to the customer. Control over a promised good refers to the ability to
direct the use of, and obtain substantially of all of the remaining benefits from, those goods. Control is usually
transferred upon shipment, delivery to, upon receipt of goods by the customer, in accordance with the individual
delivery and acceptance terms agreed with the customers. The amount of revenue to be recognized (transaction price)
is based on the consideration expected to be received in exchange for goods, excluding amounts collected on behalf of
third parties such as Goods and Services Tax or other taxes directly linked to sales.

Revenue from rendering of services is recognised over time as and when the customer receives the benefit of the
Group's performance and the Group has an enforceable right to payment for services transferred. Unbilled revenue
represents value of services performed in accordance with the contract terms but not billed.

Other Operating revenues

Other operating revenues comprise income from ancillary activities incidental to the operations of the Group and are
recognised when the right to receive the income is established as per the terms of the contract.

Dividend and Interest Income

Dividend income from investments is recognised when the Group's right to receive payment has been established
(provided that it is probable that the economic benefits will flow to the Group and the amount of income can be
measured reliably).

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate
applicable (provided that it is probable that the economic benefits will flow to the Group and the amount of income
can be measured reliably).

B.13 BORROWING COST

Since the Group does not have any qualifying assets, capitalisation of borrowing cost is not applicable to the Group. All
borrowing costs are recognised in Statement of Profit and Loss in the period in which they are incurred.

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