Provision for warranties

Provision for current warranty-related costs is recognized when the related product is sold. Provision is based on
technical estimates which are based on historical experience. The estimates of such warranty-related costs are
reviewed and revised annually.

Contingent liabilities and contingent assets

Contingent liabilities are possible obligations whose existence will only be confirmed by future events not
wholly within our control, or present obligations where it is not probable that an outflow of resources will be
required or the amount of the obligation cannot be measured with sufficient reliability. Contingent liabilities are
not recognized in the consolidated financial statements but are disclosed unless the possibility of an outflow of
economic resources is considered remote.

A contingent asset is not recognized but disclosed in the consolidated financial statements where an inflow of
economic benefit is probable.

Contingent liabilities and contingent assets are reviewed at each reporting date.
Leases

For the purpose of preparation of Restated Consolidated Financial Information, we have applied Ind AS 116
using the modified retrospective approach from 1 April 2018.

We assess whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the
contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration. To assess whether a contract conveys the right to control the use of an identified asset, we assess
whether: (i) the contact involves the use of an identified asset (ii) we have substantially all of the economic
benefits from use of the asset through the period of the lease and (iii) we have the right to direct the use of the
asset.

On transition to Ind AS 116, we have elected to apply the practical expedient of grandfathering the assessment
of which transactions are leases. Contracts that were not identified as leases under Ind AS 17 were not re-
assessed for whether there is a lease under Ind AS 116. Therefore, the definition of leases that we have tested
our right-of-use assets for impairment on the date of assessment and have concluded that there is no indication
that the right of use assets, is impaired.

As a lessee

We recognize a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is
initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of
costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is
located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date
to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated
useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment. In
addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain
remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, our incremental borrowing rate. Generally, we use our incremental borrowing rate as the discount
rate.

Lease payments included in the measurement of the lease liability comprise the fixed payments, including in-
substance fixed payments.

The lease liability is measured at amortized cost using the effective interest method.

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