Harrisons Malayalam Limited (HML), a leading plantation company headquartered in Kochi, Kerala, has disclosed a regulatory development involving the Employees Provident Fund Organization (EPFO). The matter concerns a penalty order issued by the Regional Provident Fund Commissioner-II, Coimbatore, under the Employees Provident Fund and Miscellaneous Provisions Act, 1952. The action pertains to delays in remittance of employees' provident fund contributions during the financial years 2020 to 2024.

Details of the Regulatory Action

On March 25, 2025, the Regional PF Commissioner-II passed an order against the company under Section 14B of the EPF Act, read in conjunction with Para 32A of the Employees' Provident Fund Scheme, 1952. The order cited the company’s delay in remitting contributions to the PF Authority for a four-year period—from April 1, 2020, to March 31, 2024.

The order was received by the company on April 2, 2025, and the Company Secretary was made aware of it on April 3, 2025. In accordance with Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the company formally disclosed this to stock exchanges on April 4, 2025.

Monetary Penalty and Company’s Response

The EPFO has levied damages amounting to ₹5,60,666 against Harrisons Malayalam Limited. This amount has been attributed to the delay in remittance rather than any fraud or evasion. The company has committed to pay the penalty within the stipulated timeframe.

HML has clarified that, after a thorough internal assessment, the financial impact is not material, and it does not affect the company’s operational or financial stability in any significant way. The penalty has been acknowledged as a compliance obligation, and the company aims to resolve the matter promptly.

Background on the Provident Fund Compliance

Under the Employees Provident Fund Act, all employers are required to deposit employee contributions to the Provident Fund on a timely basis, along with the employer’s share. Any delay in the remittance—irrespective of the reason—can attract damages under Section 14B and interest under Section 7Q.

Section 14B specifically empowers the PF authorities to recover damages for any default in payment, which are penal in nature and assessed based on the duration and frequency of the delay.

Impact Assessment and Compliance Posture

In its disclosure, Harrisons Malayalam has proactively addressed the regulatory order, emphasizing transparent communication with stakeholders. The company’s decision to disclose the notice, despite the low materiality threshold, is in line with best practices in corporate governance.

The company maintains that its business operations remain unaffected and that it continues to be in full compliance with all applicable labor laws and statutory obligations.

Furthermore, Harrisons Malayalam has indicated a willingness to strengthen its internal compliance frameworks to prevent similar instances in the future. This includes better real-time monitoring of statutory dues, ensuring timely filing and remittance, and adopting digital compliance dashboards for tracking.

About Harrisons Malayalam Limited

Harrisons Malayalam Limited (HML) is one of the largest plantation companies in South India, engaged in cultivation and processing of tea and rubber. It has a rich history in Kerala’s plantation sector and is listed on both NSE and BSE under the ticker HARRMALAYA.

With a legacy that spans over decades, HML operates several tea and rubber estates across the state and is known for its commitment to sustainable agricultural practices. Despite occasional regulatory challenges, the company maintains a strong compliance culture and is committed to ethical governance.

Industry Perspective on PF Delays

Instances of delays in provident fund remittance are not uncommon, especially during periods of economic uncertainty or operational disruption, such as those caused by the COVID-19 pandemic. However, regulators have continued to enforce strict compliance, underscoring the non-negotiable nature of statutory dues.

In recent years, several listed and unlisted companies have been penalized under Section 14B, with regulatory authorities maintaining that compliance failures—even when unintentional—are punishable under law.

HML’s case is noteworthy because the company has chosen to proactively disclose the penalty and reassure stakeholders about the limited impact and full remediation.

Final Takeaway

The issuance of the PF order by the EPFO’s Coimbatore office against Harrisons Malayalam Limited serves as a reminder of the importance of timely statutory compliance in corporate India. While the damages amounting to ₹5.6 lakh are relatively modest, the incident underscores the need for robust compliance monitoring systems.

HML’s decision to promptly disclose the development, acknowledge the issue, and take corrective measures reflects its commitment to regulatory transparency and corporate governance. Stakeholders and investors can take confidence in the company’s measured response and the absence of any material impact on its financials or operations.

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