Note on Goodwill Impairment Testing
Goodwill is tested for impairment annually or when events or circumstances indicate that an impairment loss may have occurred.
If the recoverable amount of cash generating unit (CGU) is less than its carrying amount, the carrying amount of CGU is reduced to its recoverable amount and resultant impairment loss is recognized in the statement of profit and loss.
The recoverable amount of a CGU is determined based on higher of value-in-use and fair value less cost to sell. The calculation of value in use involves use of significant estimates and assumptions which include turnover, growth rates and net margins used to calculate projected future cash flows, risk-adjusted discount rate, future economic and market conditions.
**The Scheme of Amalgamation ("the Scheme") of Esencia Technologies India Private Limited, Graphene Semiconductor Services Private Limited and Seastar Labs Private Limited ('Transferor Companies'), wholly-owned subsidiaries, with the Company ('Transferee Company') was approved by The Hon'ble National Company Law Tribunal, Mumbai Bench vide order dated November 29, 2023 and the Company received the certified true copy of the order on December 5, 2023. The Company has filed the same with Registrar of Companies, Mumbai on December 7, 2023. The Appointed date of the Scheme is April 1,2022. The amalgamation has been accounted in accordance with Appendix C of Ind AS 103 ’Business Combinations' at the carrying value of the assets and liabilities of respective Transferor Companies as included in the Standalone Balance Sheet of the Company. Accordingly, the financial information pertaining to amalgamation in respect of the prior periods was restated and goodwill of INR 386 million was recognized in the Standalone Financial Statements of the Company during the previous year.
16.3 Terms/rights attached to equity shares
The Company has only one class of equity shares having a par value of H 2 per share. They entitle the holder to participate in the dividends, and to share in the proceeds of the winding up the Company in proportion to the number of and amounts paid on the shares held. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees.
16.6 Shares reserved for issue under options
Information relating to L&T Technology Services Limited Employee Option Plan, including details of options issued, exercised and lapsed during the financial year and options outstanding at the end of the reporting period, is set out in note 16.8 of the standalone financial statements.
16.7 In the period of five years immediately preceding March 31, 2024 :
Aggregate number and class of shares allotted as fully paid up pursuant to contract without payment being received in cash - Nil (previous year: Nil)
Aggregate number and class of shares allotted as fully paid up by way of bonus shares - Nil (previous year: Nil) Aggregate number and class of shares bought back - Nil (previous year: Nil)
16.8 Share based payments
i) The objective of the ESOP Scheme, 2016 is to reward those employees who contribute significantly to the Company's profitability and shareholder's value as well as encourage improvement in performance and retention of talent. In Series A, the options are vested equally over a period of 5 years and in Series B options are vested equally over period of 4 years, subject to the discretion of the management and fulfillment of certain conditions.
ii) The exercise period for the options granted under the ESOP Scheme, 2016 would be seven years (84 months) from the date of grant of options or six years from the date of first vesting or three years (36 months) from the date of retirement/death, whichever is earlier, subject to any change as may be approved by the Board. The exercise price may be decided by the Board, in such manner, during such period, in one or more tranches and on such terms and conditions as it may deem fit, provided that the exercise price per option shall not be less than the par value of the equity share of our Company and shall not be more than the market price as defined in the SEBI (Share Based Employee Benefits) Regulations,2021 and shall be subject to compliance with accounting policies under the said regulation. The number of shares to be allotted on exercise of options should not exceed the total number of unexercised vested options that may be exercised by the employee.
vi) Weighted average share price at the date of exercise for stock options exercised during the year is H 4,320.68 per share. (previous year H 3,692.66 per share).
vii) No options expired during the periods covered in the above table.
viii) Expense on Employee Stock Option Schemes debited to the statement of profit and loss during 2023-24 is H 434 million (previous year: H 816 million).
ix) There were 16,400 new options granted duing the year ended March 31, 2024. The fair value at grant date of options granted during previous year: H 3,369.5. The fair value at grant date is determined using the Black Scholes Model which takes into account the exercise price, term of option, share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option. The model inputs for options granted during the year included:
16.9 Dividends
The final dividend on shares is recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Company's Board of Directors.
The Company declares and pays dividends in Indian rupees. Companies are required to pay/distribute dividend after deducting applicable withholding income taxes. The remittance of dividends outside India is governed by Indian law on foreign exchange and is also subject to withholding tax at applicable rates.
The amount of per share dividend recognized as distribution to equity shareholders in accordance with Companies Act 2013 is as follows:
(a) During the year ended March 31, 2024, the Company paid the final dividend of H 30 per equity share for the year ended March 31,2023.
(b) The Company paid, on November 13, 2023 an Interim dividend of H 17 per equity share for the year ended March 31,2024.
(c) On April 25, 2024, the Board of Directors of the Company have recommended the final dividend of H 33 per equity share for the year ended March 31,2024 subject to approval by the shareholders at the forthcoming annual general meeting. On approval, the total dividend payment based on number of shares outstanding as on March 31, 2024 is expected to be H 3,490 million.
Nature and Purpose of reserves.Securities Premium Account
Amounts received on issue of shares in excess of the par value has been classified as securities premium, net of utilisation.
Share options outstanding account
Employee Share options reserve represents the cumulative expense recognized for equity-settled transactions at each reporting date until the employee share options are exercised/expired upon which such amount is transferred to Profit and Loss.
Retained Earnings
This reserve represents undistributed accumulated earnings of the Company as on the balance sheet date.
Capital Reserve
The Company recognizes difference between the amount of consideration paid and net worth of acquired business as capital reserve for common control business combination transactions.
Cash flow hedge reserve
When a derivative is designated as cashflow hedging instrument, the effective portion of changes in the fair value of derivative is recognised in Other comprehensive income (OCI) and accumulated in cashflow hedge reserve.
Cumulative gains or losses previously recognised in cashflow hedge reserve are recognised in the statement of profit and loss in the period in which such transaction occurs/hedging instruments are settled/ cancelled.
Fixed price contracts:
Fixed price arrangements with customers have defined delivery milestones with agreed scope of work and pricing for each milestone. Revenue from fixed-price contracts, where the performance obligations are satisfied over the time and when there is no uncertainty as to measurement or collectability of consideration, is recognised as per the 'percentage-of-completion' method. When there is uncertainty as to measurement or ultimate collectability, revenue recognition is postponed until such uncertainty is resolved. Percentage of completion is determined based on the project costs incurred to date as a percentage of total estimated project costs required to complete the project. The input method has been used to measure the progress towards completion as there is direct relationship between input and productivity.
Time and materials contracts:
Revenue from time and material contracts are recognised as and when services are rendered to the customer. These are based on the efforts spent and rates agreed with the customer.
33 Corporate social responsibility expenditure
a) As per section 135 of the Act, a company meeting the applicability threshold, needs to spend atleast 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility ('CSR') activities. The Company's CSR ambit covers skill development, water, health, sports for disabled & education and environment and it is continuously investing in welfare initiatives and programmes to provide support to people in the communities where the Company has presence. A CSR committee has been formed by the Company as per the Act.
b) Amount required to be spent by the Company on CSR related activities during the year is H 230 million (previous year: H 199 million).
d) Details of related party transactions in relation to CSR expenditure as per relevant Accounting standard - H 5.00 million (previous year H 3.36 million) spent on CSR through L&T Public Charitable Trust on Education and Skill development.
34 Capital Management Note
The key objective of the Company's capital management is to maximise shareholder value, safeguard business continuity and support the growth of the company. The Company determines the capital requirement based on annual operating plans and long term and other strategic investment plans. The funding requirements are met through operating cash flows generated, and equity. The Company is not subject to any externally imposed capital requirements.
As evident from the above table, the Company is predominantly equity-financed. Also, the company has been generating healthy free cash flow along with major investments in liquid instruments. The Company continues its policy of a conservative capital structure which has ensured that it retains the highest credit rating. Low gearing levels also equip the Company with the ability to navigate business stresses on one hand and raise growth capital on the other. This policy also provides flexibility of fund raising options for future, which is especially important in times of global economic volatility.
37 Segment reporting(a) Description of segments and principal activities
Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker, in deciding how to allocate resources and assessing performance. The Company's chief operating decision maker is the Chief Executive Officer.
The company has identified business segments as reportable segments. The business segments comprise of :-
• Transportation
• Industrial products
• Hi-tech communications and media
• Plant Engineering
• Medical Devices
Brief description of each segment and principal activities are as under:
1. Transportation: Transportation segment partners with OEMs and Tier 1 suppliers serving aerospace,automotive, rail, commercial vehicles, off-highway and polymer segments. The segment delivers end-to-end services from concept to detailed design through manufacturing and sourcing support and helps OEMs develop cost effective vehicles.
2. Industrial Products: Industrial Products engineering partners with OEM customers across building automation, home and office products, energy, process control and machinery. This segment offers end-to-end product development counsel, leveraging expertise spanning software, electronics, connectivity, mechanical engineering, industrial networking protocols, user interface/user experience (UI/UX), test frameworks and enterprise control solutions.
3. Hi-Tech communications and media: Hi-Tech communications and media caters to OEM/ODMs, chipset vendors,telecom carriers and ISVs delivering end-to-end embedded software design and development, hardware platform design and development, product maintenance,enhancement and sustenance, testing and validation, system integration for communication and related solutions and systems and field implementation services.
4. Plant engineering: Plant engineering segment provides end to end engineering services for leading plant operators across the globe. The industry span and services are broadly for chemical,consumer packaged goods (FMCG) and energy and utility sector clients.
5. Medical devices: Medical devices engineering is a dedicated practice that is revolutionizing delivery of healthcare by providing product development solutions across a variety of Class I, II and III devices, with concept design, embedded systems, hardware and software,mechanical engineering services, application software, value analysis and value engineering, manufacturing engineering and regulatory compliance. Medical device industry comprises of diagnostic, life sciences, surgical, cardiovascular, home healthcare, general medical and other devices.
The management primarily uses a measure of earnings before interest, tax, depreciation and amortisation (EBITDA,
see below) to assess the performance of the operating segments.
Property, plant and equipment (PPE) used and liabilities contracted for performing the Company's business have not been identified to any of the above reported segments as the PPE and services are used interchangeably among segments.
(iii) No single customer represents 10% or more of the Company's total revenue for the year ended March 31, 2024 and 2023.
(iv) The Company is streamlining and simplifying its organizational structure into 3 main segments to drive future growth, scalability and technology innovation effective April 1,2024. The Company will consolidate its existing five segments into three: Mobility, Sustainability, and Hi-Tech, as part of the Company's 'Go Deeper to Scale' strategy to meet evolving customer demands. The Mobility segment will encompass Automotive, Commercial Vehicles and Aerospace verticals. Sustainability will cover Industrial Machinery & Building Technology, Electric & Power, FMCG and Oil & Gas. The Hi-Tech segment will include MedTech, Semiconductors, Consumer Electronics, Hyperscalers and NexGen Comm verticals.
38 Financial risk managementi) Market risk management
The Company regularly reviews its foreign exchange forward and option positions, both on a standalone basis and in conjunction with its underlying foreign currency related exposures. The Company follows cash flow hedge accounting for highly probable forecasted exposures (HPFE) hence the movement in mark to market (MTM) of the hedge contracts undertaken for such exposures is likely to be offset by contra movements in the underlying exposures values. However, till the point of time that the HPFE becomes an on-balance sheet exposure, the changes in MTM of the hedge contracts are accumulated in the balance sheet of the Company. The Company manages its exposures normally for a period of up to three years based on the estimated exposures over that period. As the period increases, the cash flows hedged as a percentage of the total expected cash flows diminish, as there is increased uncertainty of the total cash flows materializing over a longer period of time. The recognition of the gains and losses related to these instruments may not always coincide with the timing of gains and losses related to the underlying economic exposures and, therefore, may adversely affect the Company's financial condition and operating results. Hence, the Company monitors the potential risk arising out of the market factors like exchange rates, interest rates, price of traded investment products etc. on a regular basis. For on balance sheet exposures, the Company monitors the risks on net un-hedged exposures.
ii) Price risk management
The Company's investment policy and strategy are focused on preservation of capital and supporting the Company's liquidity requirements. The Company uses a combination of internal and external management to execute its investment strategy and achieve its investment objectives. The Company typically invests in money market funds, under a limits framework which governs the credit exposure to any one issuer as defined in its investment policy. To provide a meaningful assessment of the price risk associated with the Company's investment portfolio, the Company performed a sensitivity analysis to determine the impact of change in prices of the securities that would have on the value of the investment portfolio assuming a 0.25% move in debt funds and debt securities. Based on the investment position a hypothetical 0.25% change in the fair market value of debt securities would result in a value change of /- H 12.07 million as of March 31, 2024, and /- H 21.89 million as of March 31,2023. The investments in money market funds are for the purpose of liquidity management only and are held only overnight and hence not subject to any material price risk.
iii) Foreign currency risk management
In general, the Company is a net receiver of foreign currency. Accordingly, changes in exchange rates, and in particular a strengthening of the Indian Rupee, will negatively affect the Company's net sales and gross margins as expressed in Indian Rupees.
The Company may enter into foreign currency forward contracts with financial institutions to protect against foreign exchange risks associated with certain existing assets and liabilities, certain firmly committed transactions, forecasted future cash flows and net investments in foreign subsidiaries. The Company's practice is to hedge a portion of its material net foreign exchange exposures with tenors in line with the projected exposure based on future business growth. However, the Company may choose not to hedge certain foreign exchange exposures for a variety of reasons, including but not limited to accounting considerations and the prohibitive economic cost of hedging particular exposures. The Company may also not hedge 100% given the uncertainty with business projections and hence the exposure gets hedged progressively in lower amounts.
To provide a meaningful assessment of the foreign currency risk associated with the Company's foreign currency derivative positions against off balance sheet exposures and unhedged portion of on-balance sheet exposures, the Company uses a multi-currency correlated value-at-risk ("VAR") model. The VAR model uses a Monte Carlo simulation to generate thousands of random market price paths for foreign currencies against Indian rupee taking into account the correlations between them. The VAR is the expected loss in value of the exposures due to overnight movement in spot exchange rates, at 95% confidence interval. The VAR model is not intended to represent actual losses but is used as a risk estimation tool. The model assumes normal market conditions and is a historical best fit model. The overnight VAR for the Company at 95% confidence level is H172 million as of March 31,2024 and H 233 million as of March 31,2023.
Actual future gains and losses associated with the Company's investment portfolio and derivative positions may differ materially from the sensitivity analyses performed as of March 31, 2024 due to the inherent limitations associated with predicting the timing and amount of changes in foreign currency exchanges rates and the Company's actual exposures and position.
iv) Credit/counter-party risk management
The principal credit risk that the Company is exposed to is non-collection of trade receivables and late collection of receivables leading to credit loss. The risk is mitigated by reviewing creditworthiness of the prospective customers prior to entering into contract and post contracting, through continuous monitoring of collections by a dedicated team.
The Company reviews trade receivables on periodic basis and makes provision for doubtful debts if collection is doubtful. The Company also calculates the expected credit loss (ECL) for non-collection and for delay in collection of receivables. The Company makes additional provision if the ECL amount is higher than the provision made for doubtful debts. In case the ECL amount is lower than the provision made for doubtful debts, the Company retains the provision made for doubtful debts without any adjustment.
The provision for doubtful debts including ECL allowances for non-collection of receivables and delay in collection, on a combined basis, was H 146 million as at March 31,2024 and H 248 million as at March 31,2023. The movement in allowances for doubtful accounts comprising provision for both non-collection of receivables and delay in collection is as follows:
The percentage of revenue from its top five customers is 15% for 2023-24 (14% for 2022-23).
The counter-party risk that the Company is exposed to is principally for financial instruments taken to hedge its foreign currency risks. The counter-parties are mainly banks and the Company has entered into contracts with the counterparties for all its hedge instruments.
The Company invests its surplus funds in liquid investments and mitigates the risk of counter-party failure by investing with institutions having good credit rating.
v) Liquidity risk management
The Company manages liquidity risk by maintaining sufficient cash and marketable securities and by having access to funding through an adequate amount of committed credit lines.
Management regularly monitors the position of cash and cash equivalents vis-a-vis projections. Assessment of maturity profiles of financial assets and liabilities including debt financing plans and maintenance of balance sheet liquidity ratios are considered while reviewing the liquidity position.
The Company has no borrowings as on March 31, 2024 but it has credit facilities with banks that will help it to generate funds for the business if required. The contractual maturities of financial assets and financial liabilities is as follows:
(i) Fair value hierarchy
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs). There were no transfers between the levels during the year.
The Company's policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period.
(ii) Valuation technique used to determine fair value
Specific valuation technique used to value financial instruments include :
- the use of quoted market prices or dealer quotes for similar instruments
- the fair value of forward foreign exchange contracts and principal swap is determined using forward exchange rates at the balance sheet date.
(iii) Valuation processes
The finance department of the Company includes a team that performs the valuations of financial assets and liabilities required for financial reporting purposes, including level 3 fair values. The fair valuation of level 1 and level 2 classified assets and liabilities are readily available from the quoted prices in the open market and rates available in secondary market respectively. The valuation method applied for various financial assets and liabilities are as follows -
- Quoted price in the primary market (net asset value) considered for the fair valuation of the current investment i.e mutual funds. Gain/(loss) on fair valuation is recognised in statement of profit and loss.
- The carrying amounts of trade receivable, unbilled revenue, trade payable, cash and bank balances, short term loans and advances, statutory dues/receivable, short term borrowing, employee dues are considered to be the same as their fair value owing to their short-term nature.
- The fair value of premium receivable on financial guarantee contract is derived by discounting premium receivable over the period of contract.Thereafter, the same is carried at the amount initially recognised less the cumulative amortisation of income over the period of the contract.
- The fair value of non-current security deposits are calculated by discounting future cash inflows.
(iv) Fair value of financial assets and financial liabilities measured at amortised cost:
The carrying amounts of all financials assets and financial liabilities are considered to be the same as their fair values owing to their short term nature.
*During the year Company have acquired Smart World Communications (SWC) from Larsen & Toubro Limited and also amalgamated its subsidiaries, Graphene Semiconductor Private Limited, Seastar Labs Private Limited and Esencia India Private Limited. Due to these business acquistion and amalgamation of subsidiaries the tax charge for previous years has been re-stated.
41 Disclosure pursuant to Ind AS 19 "Employee benefits" i) Defined contribution plan
The Company has recognised H 2,089 million (previous year H 1,757 million) towards defined contribution plan as an expense, which includes contribution to social security and employee state insurance scheme in statement of profit and loss account.
Risk exposure
i. Gratuity
The Company operates gratuity plan through a trust wherein every employee is entitled to the benefit equivalent to fifteen days last salary drawn for each completed year of service. The same is payable on termination of service or retirement whichever is earlier. The benefit vests after five years of continuous service. The trustees of the plan have outsourced the investment management of the fund to an insurance company. The insurance company in turn manages these funds as per the mandate provided to them by the trustees and the asset allocation which is within the permissible limits prescribed in the insurance regulations.
ii. Post retirement medical benefits plan
The post-retirement medical care plan provides for reimbursement of health care costs to certain categories of employees post their retirement. The reimbursement is subject to an overall ceiling sanctioned based on cadre of the employee at the time of retirement. The plan is unfunded. Employees do not contribute to the plan.
General descriptions of defined benefit plans: a Gratuity plan
The Company makes contributions to the employees' group gratuity-cum-life assurance scheme of the Life Insurance Corporation of India, a funded defined benefit plan for qualifying employees. The scheme provides for lump sum payment to employees at retirement, death while in employment or termination of employment of an amount equivalent to 15 days salary for every completed year of service or part thereof in excess of six months, provided the employee has completed five years in service.
Unfunded gratuity represents a small part of gratuity plan which is not material. Further, the unfunded portion includes amounts payable in respect of the Company's foreign operations which results in gratuity payable to employees engaged as per local laws of country of operation.
b Post-retirement medical benefit plan
The post-retirement medical benefit plan provides for reimbursement of health care costs to certain categories of employees post their retirement. The reimbursement is subject to an overall ceiling limit sanctioned at the time of retirement. The ceiling limits are based on cadre of the employee at the time of retirement.
c Provident Fund trust managed by the holding company
The Company's provident fund plan is managed by its holding company through a trust permitted under The Employees' Provident Funds and Miscellaneous Provisions Act, 1952. The plan envisages contribution by employer and employees and guarantees interest at the rate notified by the Provident Fund Authority. The contribution by employer and employee together with interest are payable at the time of separation from service or retirement whichever is earlier. The benefit under this plan vests immediately on rendering of service.
Employee benefit plan outside India
In January 2018, the Company established the L&T Technology Services 401k Plan (the "Plan") for the benefit of its employees in USA. As allowed under section 401(k) of the Internal Revenue Code, the Plan provides for tax-deferred salary contributions for eligible employees of L&T Technology Services Limited. The Plan allows the employee and Company's contributions to vest 100% immediately. During the year ended March 31,2024, the Company contributed H 114 million towards the Plan (Previous year: H 111 million)
The transactions with related parties are made on terms equivalent to those that prevail in arm's length transactions. Outstanding balances at the year-end are unsecured and interest free except for borrowings and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 March 2024, the Company has not recorded any impairment of receivables relating to amounts owed by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.
A represents value less than 0.5 million
a) Transaction price allocated to remaining performance obligation
i) The aggregate value of performance obligations that are completely or partially unsatisfied as of March 31, 2024, other than those meeting the exclusion criteria mentioned below in (ii), is H 45,169 million Out of this, the Company expects to recognize revenue of around H 19,452 million within the next one year. Remaining performance obligation estimates are subject to change and are affected by several factors, including changes in the scope of contracts, periodic revalidations, and adjustments for currency.
ii) The Company has applied practical expedient and has not disclosed information about remaining performance obligations in contracts where the entity has the right to consideration that corresponds directly with the value of entity's performance completed to date, typically those contracts where invoicing is on time and material basis.
b) Movement in contract balances
i) The Company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue. Revenues in excess of billings is recorded as unbilled revenue and is classified as a financial asset for time and material jobs where right to consideration is unconditional upon passage of time. Unbilled revenue for fixed price contracts is classifed as non financial asset as the contractual right to consideration is dependent on completion of contractual milestones.
45 Disclosures pursuant to Indian accounting standard (IND AS) 103 "Business combinations"i) Common Control Business Combination- Smart World & Communication (SWC) :
The Company entered into a Business Transfer Agreement on January 12, 2023 to acquire substantial portion of business division under the name Smart World and Communication Business Unit (SWC) from Larsen & Toubro Limited (L&T). The Company consummated the above transfer of business on April 1, 2023.
The transaction was recorded in the books of the Company in previous year using the "Pooling of interests method" as laid down in Appendix C - 'Business combinations of entities under common control' of Ind AS 103 notified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015.
- Accordingly, the assets and liabilities transferred have been accounted at the carrying amounts as reflected in the books of L&T as at April 1, 2022 and no adjustments have been made to reflect the fair values, or recognize any new assets or liabilities;
- The identity of the reserves have been preserved and are recorded in the same form and at the carrying amount as appearing in the Standalone financial statements of L&T;
- The inter-company balances between both have been eliminated;
- Comparative financial information in the financial statements of the Company has been restated for the accounting impact of merger, as stated above, as if the merger had occurred from the beginning of the comparative period;
- The difference between the purchase consideration and the carrying amounts of the net assets transferred has been transferred to capital reserve and presented separately from other capital reserves.
ii) Amalgamation of Esencia Technologies India Private Limited, Graphene Semiconductor Services Private Limited and Seastar Labs Private Limited with L&T Technology Services Limited :
The Scheme of Amalgamation ("the Scheme") of Esencia Technologies India Private Limited, Graphene Semiconductor Services Private Limited and Seastar Labs Private Limited ('Transferor Companies'), wholly-owned subsidiaries, with the Company ('Transferee Company') was approved by The Hon'ble National Company Law Tribunal, Mumbai Bench vide order dated November 29, 2023 and the Company received the certified true copy of the order on December 5, 2023. The Company has filed the same with Registrar of Companies, Mumbai on December 7, 2023. The Appointed date of the Scheme is April 1,2022.
The amalgamation has been accounted in accordance with Appendix C of Ind AS 103 'Business Combinations' at the carrying value of the assets and liabilities of respective Transferor Companies as included in the Standalone Balance Sheet of the Company. Accordingly, the financial information pertaining to amalgamation in respect of the prior periods was restated and goodwill of H 386 million was recognized in the Standalone Financial Statements of the Company during the previous year.
46 Government grants
A. The Company has received incentives amounting to H 29 million (previous year H 17 million) from government of UK against money spent on research and development and has accounted for it under other income.
B. The Company has received Compensation Grant due to war in Israel that resulted in decreased revenue cycle of a financial entity amounting to H 2 million (previous year H NIL) and has accounted for it under other income.
C. The Company has received government grants amounting to H 29 million (previous year H 6 million) from governments of various countries on compliance with several employment-related conditions and accordingly, accounted it as a credit to employee benefits expense.
49 The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the Company towards Provident Fund and Gratuity. The Ministry of Labor and Employment had released draft rules for the Code on Social Security, 2020 on November 13, 2020. The Company will assess the impact and its evaluation after the subject rules are notified and will give appropriate impact in its financial statements in the period in which the Code becomes effective and the related rules to determine the financial impact are published.
50 The Company did not have any significant long-term contracts including derivative contracts for which there were any material foreseeable losses.
51 An amount of H 0.10 million which was due and payable and remained unclaimed and unpaid for a period of seven years, was transferred to the Investor Education and Protection Fund (IEPF) as at March 31,2024 (previous year: H Nil).
52 Previous year's figures have been regrouped / reclassified wherever necessary.
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