Airfloa Rail Technology Limited Receives ₹17.27 Lakh Penalty from RoC for CSR Compliance Delay

Airfloa Rail Technology Limited has received 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 20, 2026, pertains to violations related to financial year 2019-20 and was received by the company on the same date through email.

Penalty Details and Violations

The RoC has imposed penalties under Section 454 of the Companies Act, 2013, for violations of Section 135(5) and Section 135(6) related to CSR obligations. The adjudication order carries Order ID PO/ADJ/12-2025/CN/01243 and addresses the company's failure to timely transfer unspent CSR obligation amounts to funds specified under Schedule-VII of the Companies Act, 2013.

Penalty Details:	Amount
Company Penalty:	₹17,27,343.00
Director Penalty (each):	₹1,72,734.00
Payment Timeline:	90 days from receipt

The penalty amount of ₹17.27 lakh imposed on the company is equivalent to the unspent CSR obligation for financial year 2019-20 that was belatedly transferred to the Prime Minister's National Relief Fund.

Directors Penalized

Two directors have been identified as officers in default and penalized ₹1.73 lakh each:

Dakshinamoorthy Venkatesan (DIN: 00232210)
Dakshna Moorthy Manikandan (DIN: 00232275)

Company's Response and Legal Action

Airfloa Rail Technology Limited has expressed disagreement with the penalty imposition, stating that the levy of maximum penalty is unjustified. The company argues that it deserves lenient treatment considering it voluntarily filed a suo moto adjudication application with RoC under SRN N30641906 dated May 8, 2025, and had already made good the non-compliance.

The company plans to file an appeal with the Regional Director under Section 454 of the Companies Act, 2013, within the permissible timeline. This appeal will challenge the penalty amount and seek relief based on the voluntary nature of the disclosure and subsequent compliance.

Financial Impact

The company has disclosed that if it is unable to obtain a waiver or reduction of the imposed penalty, the financial implications will affect the company's profitability to the extent of the final penalty amount. The total potential impact includes the company penalty of ₹17.27 lakh plus the director penalties.

Regulatory Compliance Context

The adjudication order stems from the company's initial application that covered multiple financial years including 2019-20, 2020-21, 2021-22, and 2022-23. However, the current penalty specifically addresses violations pertaining to financial year 2019-20. The company has maintained that it voluntarily sought adjudication and subsequently transferred the unspent CSR amount to the designated fund, demonstrating good faith compliance efforts.

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:

Entity:	Penalty Amount	Details
Company:	₹27.12 lakh	Equivalent to unspent CSR obligation for FY 2021-22
Director 1:	₹2.00 lakh	Dakshinamoorthy Venkatesan (DIN: 00232210)
Director 2:	₹2.00 lakh	Dakshna Moorthy Manikandan (DIN: 00232275)
Total Penalty:	₹31.12 lakh	Payable within 90 days of order receipt

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.