Airfloa Rail Technology Limited has disclosed receiving an adjudication order from the Registrar of Companies (RoC), Tamil Nadu, imposing significant penalties for delayed compliance with Corporate Social Responsibility (CSR) obligations. The order, dated January 7, 2026, and received on January 9, 2026, relates to violations under Section 135(5) and 135(6) of the Companies Act, 2013, specifically concerning the delayed transfer of unspent CSR amounts for financial year 2021-22.

Penalty Details and Financial Impact

The RoC has imposed substantial penalties on both the company and its directors for the CSR compliance violations:

The penalty amount of ₹27.12 lakh imposed on the company is equivalent to the unspent CSR obligation amount that was belatedly transferred to the Prime Minister's National Relief Fund. The company has acknowledged that if unable to secure a waiver or reduction of the penalty, it will affect profitability to the extent of the final penalty amount.

Background and Compliance Issues

The adjudication order stems from a suo moto application filed by the company itself with the RoC on May 8, 2025, under Section 454 of the Companies Act, 2013. The original investigation covered multiple financial years from 2019-20 to 2022-23, but the current penalty specifically addresses violations in financial year 2021-22.

The company failed to comply with the mandatory requirement to transfer unspent CSR amounts to funds specified under Schedule-VII of the Companies Act within the prescribed timeline. This violation of Section 135(5) and 135(6) of the Companies Act resulted in the maximum penalty being imposed by the regulatory authority.

Company's Response and Next Steps

Airfloa Rail Technology Limited has expressed its intention to challenge the penalty, stating that the levy of maximum penalty is unjustified given that the company voluntarily sought adjudication and has since rectified the non-compliance. The company's planned course of action includes:

• Filing an appeal with the Regional Director as the appellate authority
• Submitting a compounding application under Section 441 of the Companies Act, 2013
• Completing the appeal process within the permissible timeline
• Seeking lenient treatment based on the voluntary nature of the disclosure

The company believes it deserves more lenient treatment considering it proactively sought adjudication and has already transferred the unspent CSR amount to the Prime Minister's National Relief Fund. The 90-day payment deadline provides a window for the company to pursue its appeal before the penalty becomes due.

Airfloa Rail Technology Limited has disclosed receiving two adjudication orders from the Registrar of Companies (RoC), Tamil Nadu, imposing significant penalties for delayed compliance with Corporate Social Responsibility (CSR) obligations. The orders, both dated January 7, 2026, address violations related to the delayed transfer of unspent CSR amounts to specified funds under Schedule-VII of the Companies Act, 2013.

Penalty Details and Financial Impact

The RoC has imposed substantial penalties on the company and its directors across two separate orders covering different financial years:

The penalties have been imposed on the company and two directors - Dakshinamoorthy Venkatesan (DIN: 00232210) and Dakshna Moorthy Manikandan (DIN: 00232275) - who have been identified as officers in default.

Regulatory Violations and Background

The adjudication orders stem from violations of Section 135(5) and Section 135(6) of the Companies Act, 2013, which govern the transfer of unspent CSR obligations. The company had filed a suo moto adjudication application with RoC on May 8, 2025 (SRN N30641906), acknowledging the delayed transfers of CSR amounts to the Prime Minister's National Relief Fund.

The violations covered multiple financial years (2019-20, 2020-21, 2021-22, and 2022-23), though the penalties specifically address the delayed transfers for FY 2020-21 and FY 2022-23. The penalty amounts correspond to the equivalent unspent CSR obligation amounts that were transferred belatedly to the designated funds.

Company's Response and Future Actions

Airfloa Rail Technology Limited has expressed disagreement with the severity of the penalties imposed. The company believes that the levy of maximum penalty is unjustified, particularly considering that it proactively disclosed the non-compliance through a suo moto application and subsequently rectified the violations.

The company plans to challenge the orders through the following actions:

• Filing an appeal with the Regional Director as the appellate authority
• Submitting a compounding application under Section 441 of the Companies Act, 2013
• Seeking lenient treatment based on voluntary disclosure and subsequent compliance
• Completing the appeal process within the permissible timeline

Financial Implications

The company has acknowledged that if it fails to obtain a waiver or reduction of the imposed penalties, the financial impact will affect its profitability to the extent of the final penalty amount. With total company penalties of ₹45.63 lakhs, this represents a significant financial burden that could impact the company's financial performance if the appeal is unsuccessful.

The disclosure was made pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, ensuring transparency with stakeholders regarding regulatory communications and their potential financial implications.