MAHINDRA & MAHINDRA LTD. | Integrated Annual Report 2022-23

396 MAHINDRA & MAHINDRA LTD. Integrated Annual Report 2022-23 44. 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. 3,646.89 crores before tax (2022: Rs. 2,024.67 crores before tax). (ii) Other matters (excluding claims where amounts are not ascertainable): Rs. 567.14 crores before tax (2022: Rs. 448.46 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. 2,098.42 crores (2022: Rs. 1,230.78 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. 740.59 crores (2022: Rs. 683.43 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, 2023 is Rs. 2,926.43 crores (2022: Rs. 2,150.66 crores) and other commitment as at 31 st March, 2023 is Rs. 631.45 crores (2022: Rs. 477.76 crores). 45. 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. 858.48 crores (2022: Rs. 909.52 crores). 46. Regulatory order A subsidiary of the Company has received an order (‘the Order’) from National Financial Reporting Authority (‘NFRA’) on 29 th March, 2023 wherein NFRA has made certain observations on identification of operating segments by the subsidiary in compliance with requirements of Ind AS 108 and the Subsidiary’s existing accounting policy for recognition of revenue on straight-line basis over the membership period. The Subsidiary is in the process of conducting the review as required by the Order. As at 31 st March, 2023, the management of the subsidiary has assessed the application of its accounting policies relating to segment disclosures and revenue recognition. Basis the current assessment by the subsidiary after considering the information available as on date, the existing accounting policies, practices and disclosures are in compliance with the respective Ind AS and accordingly have been applied by the subsidiary in the preparation of its financial statements.