SJP Ultrasonics registered in 2024 after EPF and ESIC breaches

SJP Ultrasonics Limited disclosed that it registered under the Employees Provident Fund and Miscellaneous Provisions Act, 1952 and the Employees State Insurance Act, 1948 on June 15, 2024, after earlier operating above the stated employee thresholds without registration or applicable contributions. No fine or penalty had been imposed as of the prospectus date.

Why did SJP Ultrasonics breach EPF and ESIC requirements?

SJP Ultrasonics says it breached Employees Provident Fund, or EPF, requirements because it had previously employed more than 20 people but had not registered under the Employees Provident Fund and Miscellaneous Provisions Act, 1952 before June 15, 2024. The company states that the lack of registration violated the EPF Act and rules made under it, and that it had not complied with applicable provisions, including payment of applicable employee contributions.

SJP Ultrasonics disclosed a separate failure under the Employees State Insurance Act, 1948, or ESIC Act. The company says it had previously employed more than 10 people but had not registered under the ESIC Act before June 15, 2024, and had not made applicable contributions to Employees State Insurance, or ESIC. The two disclosures therefore involve different laws and thresholds: more than 20 people for EPF and more than 10 people for ESIC.

SJP Ultrasonics does not disclose the date on which either threshold was first crossed, the number of affected employees, or the duration of either defaulting period. The prospectus also gives no amount for unpaid EPF or ESIC contributions. That means the disclosed employee thresholds establish the basis for the compliance risk, but do not permit a calculation of the historical liability.

When did SJP Ultrasonics register and notify the authorities?

SJP Ultrasonics registered under both the EPF Act and the ESIC Act on June 15, 2024. The common registration date marks the stated change from the earlier period in which the company says it had exceeded the respective employee thresholds without being registered. The prospectus does not say that registration resolved past contribution obligations.

SJP Ultrasonics later notified the relevant authorities through separate letters in 2025. It informed the P.F. Commissioner, Kandivali (W), Mumbai about the EPF non-compliance in a letter dated July 21, 2025, and informed the Regional Director, Andheri (E), Mumbai about the ESIC non-compliance in a letter dated August 14, 2025. The ESIC notification was therefore made 24 days after the EPF notification.

SJP Ultrasonics does not disclose any order from the P.F. Commissioner or the ESIC Regional Director following the 2025 letters. It also does not disclose an assessment of arrears, increased contributions, fines, penalties or other amounts as of the prospectus date. The later notifications identify the authorities that received the disclosures, while leaving the outcome of any subsequent action unresolved.

What EPF and ESIC liability does SJP Ultrasonics identify?

SJP Ultrasonics says its EPF non-compliance may lead to fines and penalties, including payment of increased contributions for the defaulting period. The company also says it may be liable to punishment under the EPF Act, which may include imprisonment for its directors. SJP Ultrasonics states that no EPF fine or penalty had been imposed as of the prospectus date.

SJP Ultrasonics describes a comparable ESIC risk. The company says the ESIC non-compliance may result in fines and penalties in the form of increased contributions for the defaulting period, and may lead to punishment under the ESIC Act that could include imprisonment for directors. It also states that no ESIC fine or penalty had been imposed as of the prospectus date.

The prospectus distinguishes between a disclosed non-compliance and an imposed sanction. SJP Ultrasonics acknowledges that applicable contributions were not paid under both regimes, but gives no rupee estimate for contributions, increased contributions, fines or penalties. Any eventual payment would depend on the defaulting period and any determination or action by the EPF or ESIC authority, neither of which is quantified in the disclosure.

How would SJP Ultrasonics fund a monetary penalty?

SJP Ultrasonics says any monetary penalty imposed for the EPF matter would be paid from the company’s internal accruals and not from IPO proceeds. The company gives the same undertaking for any monetary penalty arising from the ESIC matter. This is a stated funding commitment for a penalty, not a disclosed estimate of the amount that may become payable.

SJP Ultrasonics does not disclose the level of internal accruals reserved for either matter, a cap on potential payments, or a timeline for resolution. Its undertaking is conditional on a monetary penalty being imposed, while the prospectus says no EPF or ESIC fine or penalty had been imposed as of its date. The absence of a quantified liability means the possible effect on cash flows cannot be measured from this risk-factor disclosure.

SJP Ultrasonics reported revenue from operations of Rs 26.56 crore for the financial year ended March 31, 2026, compared with Rs 21.06 crore for the financial year ended March 31, 2025. The increase was Rs 5.50 crore year on year, but the prospectus does not connect revenue from operations to the EPF or ESIC matters or state the potential effect of those matters on profit, cash flow or net worth.

What remains unresolved after SJP Ultrasonics registered?

SJP Ultrasonics has resolved the registration gap described in the prospectus by registering under both laws on June 15, 2024, but it has not disclosed a quantified resolution of historical contributions. The company specifically identifies increased contributions for the defaulting period as a possible consequence under both EPF and ESIC. That disclosure leaves the amount and period of any retrospective payment open.

SJP Ultrasonics also identifies possible fines, penalties and punishment, including possible imprisonment for directors, under each law. As of the prospectus date, however, it says neither EPF nor ESIC had imposed a fine or penalty. The distinction matters because the company has disclosed potential enforcement exposure without reporting a current monetary demand.

The prospectus places the EPF and ESIC failures among internal business-related risk factors rather than presenting them as completed enforcement cases. SJP Ultrasonics’ July 21, 2025 EPF letter and August 14, 2025 ESIC letter show that it notified the authorities after the June 15, 2024 registrations. The prospectus does not disclose a later authority response, settlement or closure.

Conclusion

SJP Ultrasonics disclosed historical non-registration and unpaid applicable contributions under two employee social-security regimes, despite previously having more than 20 employees for EPF purposes and more than 10 employees for ESIC purposes. Registration under both laws on June 15, 2024 addressed the stated registration status, but the prospectus does not quantify historical contributions or any related financial exposure.

The next development to watch is whether the P.F. Commissioner or the ESIC Regional Director determines arrears, increased contributions, fines, penalties or other punishment after the company’s 2025 notifications. SJP Ultrasonics has disclosed that no fine or penalty had been imposed as of the prospectus date and that any monetary penalty would be paid from internal accruals rather than IPO proceeds.