By Himanshu V. Kishnadwala
Chartered Accountant
Compiler’s Note: Division II of Schedule III to the Companies Act, 2013 requires disclosures regarding ‘Contingent Liabilities and Commitments’. These disclosures include, apart from other items, ‘Other Commitments’. ICAI has, in its Guidance Note on the same, mentioned that ‘the term “Other commitments” would include all expenditure related contractual commitments apart from capital commitments such as commitments arising from long-term contracts for purchase of raw material, employee contracts, lease commitments, etc. The scope of such terminology is very wide and may include contractual commitments for purchase of inventory, services, investments, employee contracts, etc.’ Given below are some illustrations of disclosures made by companies for such ‘Other commitments’ for the year ended 31st March, 2020 (Disclosure of Contingent liabilities, Capital commitments, Litigations and Lease commitments is not included since the same is done by almost all companies).
ADANI PORTS AND SPECIAL ECONOMIC ZONE LIMITED
Other Commitments
a) The port projects of subsidiary companies, viz., The Dhamra Port Company (‘DPCL’) and joint venture Adani International Container Terminal Private Limited (‘AICTPL’) have been funded through various credit facility agreements with banks. Against the said facilities availed by the aforesaid entities from the banks, the Company has pledged its shareholding in the subsidiary / joint venture companies and executed Non-Disposal Undertaking, the details of which are tabulated below:
|
Name of subsidiaries /
Joint venture
|
% of non-disposal
undertaking (as part of pledged)
|
% of shares pledged
of the total shareholding of investee company
|
|
As on 31st March,
2020
|
As on 31st March,
2019
|
As on 31st March,
2020
|
As on 31st March,
2019
|
|
Adani International Container Terminal Private Limited
|
24.97%
|
24.97%
|
25.03%
|
25.03%
|
|
The Dhamra Port Company Limited
|
–
|
21.00%
|
30.00%
|
30.00%
|
b) Contract / Commitment for purchase of certain supplies. Advance given Rs. 356.95 crores (previous year Rs. 356.95 crores).
c) The subsidiary companies have imported capital goods for the Container and Multipurpose Port Terminal Project under the EPCG Scheme at concessional rate of customs duty by undertaking obligation to export. Further, outstanding export obligation under the scheme is Rs. 1,025.26 crores (previous year Rs. 1,331.15 crores) which is equivalent to 6 to 8 times of duty saved – Rs. 167.04 crores (previous year Rs. 218.03 crores). The export obligation has to be completed by 2020-21 to 2025-26.
d) One of the subsidiary Company has entered into agreement in financial year 2013-14 to acquire land measuring 85,553 square metres in the Hazira region and an advance consideration of Rs. 18.23 crores paid towards the land has been classified as capital advance. The AHPPL has entered into agreement to acquire additional land measuring 933 acres in the Patan and Hazira region and an advance consideration of Rs. 35.85 crores paid towards the land classified as capital advance, respectively. As at 31st March, 2020 the AHPPL does not have physical possession of the said land, although it has contractual right in the said land parcels. The management represent that land area and location are identifiable and the transaction will be conducted on receiving necessary government approvals.
e) As part of Environmental Clearance obtained by the Vizhinjam International Sea Port Limited (VISL or ‘the Authority’), the AVPPL has been obliged to incur expenditure of Rs. 33.70 crores towards ‘Corporate Social Responsibility’ along with development of Port Infrastructure under Phase 1 and the same is included under the total Project Cost. Out of total commitment of Rs. 33.70 crores, the AVPPL has incurred Rs. 9.91 crores till 31st March, 2020.
TATA CONSULTANCY LIMITED
The proposed Social Security Code, 2019, when promulgated, would subsume labour laws including Employee’s Provident Funds and Miscellaneous Provisions Act and amend the definition of wages on which the organisation and its employees are to contribute towards Provident Fund. The Company believes that there will be no significant impact on its contributions to Provident Fund due to the proposed amendments. Additionally, there is uncertainty and ambiguity in interpreting and giving effect to the guidelines of the Hon. Supreme Court vide its ruling in February, 2019 in relation to the scope of compensation on which the organisation and its employees are to contribute towards Provident Fund. The Company will evaluate its position and act as clarity emerges.
VEDANTA LIMITED
A) Commitments
The Company has a number of continuing operational and financial commitments in the normal course of business including:
• Exploratory mining commitments;
• Oil and gas commitments;
• Mining commitments arising under production sharing agreements; and
• Completion of the construction of certain assets.
Committed work programme (other than capital commitment)
|
Particulars
|
As on 31st
March, 2020 (Rs. in crores)
|
As on 31st
March, 2019 (Rs. in crores)
|
|
Oil & Gas Sector
Cairn India (OALP – new Oil and gas blocks)
|
5,841
|
3,811
|
Other Commitments
Power Division of the Company has signed a long-term power purchase agreement (PPA) with Gridco Limited for supply of 25% of power generated from the power station with additional right to purchase power (5% / 7%) at variable cost as per the conditions referred to in the PPA. The PPA has a tenure of twenty-five years.
LARSEN & TOUBRO LIMITED
Commitments
|
Particulars
|
As on 31st
March, 2020 (Rs. in crores)
|
As on 31st
March, 2019 (Rs. in crores)
|
|
(b) Funding committed by way of equity / loans to joint venture
companies / other companies:
|
|
|
|
Joint venture companies
|
19.56
|
42.87
|
|
Other companies (including investment through purchase of
investments from other parties)*
|
–
|
10,732.85
|
|
* the Company had entered into a definitive share purchase
agreement to acquire 20.32% stake in Mindtree Limited on 18th
March, 2019 at a price of Rs. 980 per share aggregating to a consideration of
Rs. 3,269. 00 crores. Further, the Company had placed a purchase order with
its stock broker for acquiring 15% stake through on-market purchases for an
overall consideration amount not exceeding Rs. 2,434.00 crores from any
recognised stock exchange, but only after receipt of relevant approvals from
regulatory authorities. The Company had also made an open offer to acquire
31% stake for a consideration of Rs. 5,029.85 crores in accordance with the
requirements of SEBI (Substantial Acquisition Shares and Takeover)
Regulations, 2011
|
RELIANCE INDUSTRIES LIMITED
|
|
2019-20
|
2018-19
|
|
(C) Other Commitments
|
|
|
|
Investments
|
445
|
464
|
INFOSYS LIMITED
|
Particulars
|
As at 31st
March
|
|
|
2020
|
2019
|
|
Other Commitments (1)
|
61
|
86
|
|
Uncalled capital pertaining to investments
|
