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Shares of Cyient Ltd ended at ₹1,204.10, up by ₹10.80, or 0.91%, on the BSE.
Domestic technology company Cyient Ltd on Monday (May 5) said its US-based wholly owned subsidiary Cyient Inc. has received a penalty order of USD 26,779.74 from the U.S. Department of the Treasury's Internal Revenue Service (IRS).
"This is to inform that Cyient Inc., a wholly owned Subsidiary of the Company located in the U.S.A has received an order levying a penalty of USD 26,779.74," according to a stock exchange filing. The penalty pertains to alleged non-compliance with the Employer Shared Responsibility Provisions (ESRP) under the Affordable Care Act (ACA).
According to the IRS, the violation involves Cyient Inc. either failing to provide Minimum Essential Coverage (MEC) to at least 95% of its full-time employees and their dependents or having at least one full-time employee qualify for a Premium Tax Credit (PTC), despite such coverage being offered.
Also Read: Cyient launches wholly owned semiconductor subsidiary to tap global chip market
The company clarified that the order does not have a material impact on its financials, operations, or other business activities. Cyient further stated that it is actively engaging with its health insurance broker to contest the IRS decision and is seeking cancellation of the penalty.
Despite the penalty, Cyient noted that it continues to ensure compliance with applicable regulations and is working toward a resolution in accordance with U.S. employment and healthcare laws.
For the fourth quarter, Cyient's profit after tax rose sharply by 39.4% to ₹170.4 crore, driven by improved execution and cost controls. The revenue for the quarter slipped 0.9% sequentially to ₹1,909.2 crore, while EBIT margins improved to 12.3% from 11% in the previous quarter, helped by operational efficiencies.
Also Read: Cyient Q3 Results: Order intake for digital, engineering, and tech segment hits an all-time high
Shares of Cyient Ltd ended at ₹1,204.10, up by ₹10.80, or 0.91%, on the BSE.
