MAHINDRA & MAHINDRA LTD. | Integrated Annual Report 2021-22

369 MAHINDRA & MAHINDRA LTD. Integrated Annual Report 2021-22 43. Contingent Liability & Commitments (A) Contingent Liability: (a) Claims against the Group not acknowledged as debts comprise of: (i) Excise Duty, Sales Tax, and Service Tax claims disputed by the Group relating to issues of applicability and classification aggregating Rs. 2,024.67 crores before tax (2021: Rs. 2,855.66 crores before tax). (ii) Other matters (excluding claims where amounts are not ascertainable): Rs. 448.46 crores before tax (2021: Rs. 655.02 crores before tax). (b) Taxation matters: (i) Demands against the Group not acknowledged as debts and not provided for, relating to issues of deductibility and taxability in respect of which the Group is in appeal and exclusive of the effect of similar matters in respect of assessments remaining to be completed: – Income-tax: Rs. 1,230.78 crores (2021: Rs. 1,403.53 crores). (ii) Items in respect of which the Group has succeeded in appeal, but the Income-tax Department is pursuing/likely to pursue in appeal/reference and exclusive of the effect of similar matters in respect of assessments remaining to be completed: – Income-tax matters: Rs. 683.43 crores (2021: Rs. 456.73 crores). (c) In respect of (a) & (b) above, it is not practicable for the Group to estimate the closure of these issues and the consequential timings of cash flows, if any. (B) Commitments: The estimated amount of contracts remaining to be executed on capital account and not provided for as at 31 st March, 2022 is Rs. 2,150.66 crores (2021: Rs.2,556.08 crores) and other commitment as at 31 st March, 2022 is Rs. 477.76 crores (2021: Rs.435.97 crores). 44. Research and Development expenditure In recognised Research and Development units: Debited to the Consolidated Statement of Profit and Loss, including certain expenditure based on allocations made by the Group, aggregate Rs. 909.52 crores (2021: Rs.868.40 crores). 45. Discontinued operations Ssangyong Motor Company (SYMC), a material foreign subsidiary of the Company, filed an application before the Bankruptcy Court for commencement of rehabilitation proceedings on 21 December, 2020 and also applied for the Autonomous Rehabilitation Support Program (“ARS”) to work on a possible deal with a potential investor. The Court approved the ARS and granted time until 28 February, 2021 to the parties. However, the deal with the potential investor could not be concluded. Consequently, as per the process of rehabilitation, the Court appointed a Receiver to manage the affairs of SYMC. Pursuant to the admission in the ARS program and following the guidance under Ind AS 110 – Consolidated Financial Statements, the Company has ceased consolidating SYMC as a subsidiary from 28 December, 2020 and has classified the investment to be measured at fair value as per Ind AS 109 – Financial instruments. Consequently, operation of SYMC has been presented as ‘discontinued operations’ in accordance with Ind AS 105- Non-current assets held for sale and discontinued operations. Accordingly, the losses from operations, resultant gain on deconsolidation of SYMC and impairments/provisions for the exposures of the Company to SYMC have been recognised and presented under ‘Profit / (loss) before tax from discontinued operation’ in the Consolidated Statement of Profit and Loss. a) Results of discontinued operations Rupees crores Particulars 2021 Total Income ............................................................................................................................................................................... 14,748.98 Total Expenses including exceptional items . ........................................................................................................................... 18,006.72 Profit / (loss) before tax from discontinued operation before share of associates and joint ventures ........................... (3,257.74) Share of associates and joint ventures ..................................................................................................................................... 5.29 Profit / (loss) before tax from discontinued operation . ........................................................................................................ (3,252.45) Income tax on discontinued operation .................................................................................................................................... — Profit / (loss) after tax from discontinued operation before gain on deconsolidation . .................................................... (3,252.45) Gain on deconsolidation . .......................................................................................................................................................... 1,062.92 Profit / (loss) after tax from discontinued operation after gain on deconsolidation . ....................................................... (2,189.53) Non-controlling interest ............................................................................................................................................................ (654.61)