Donear Industries has issued a communication to shareholders regarding tax deduction at source (TDS) procedures for its proposed final dividend of ₹0.20 per equity share for FY25. The payout is subject to shareholder approval at the 40th Annual General Meeting.

The Board of Directors recommended the dividend at its meeting held on May 30, 2026. Under the Income Tax Act, 1961, as amended by the Finance Act, 2025, dividend distribution tax has been abolished, making dividend income taxable in the hands of shareholders.

Tax Deduction Guidelines

The company outlined specific TDS rates and documentation requirements for resident and non-resident shareholders to ensure appropriate tax withholding.

Resident Shareholders

Tax is not deducted if the total dividend paid to a resident individual in a financial year does not exceed ₹10,000. For dividends exceeding this threshold, the following rates apply:

Non-Resident Shareholders

Non-resident shareholders are subject to different withholding rates based on their entity type and treaty benefits:

Shareholders seeking beneficial Double Taxation Avoidance Agreement (DTAA) rates must submit complete documentation, including a valid Tax Residency Certificate and Digital Form 41. The company is not obligated to apply DTAA rates without satisfactory review of submitted documents.

Submission Deadline and Compliance

Shareholders must upload required declarations and documents via the Registrar and Transfer Agent’s portal on or before September 4, 2026, at 5:00 pm IST. Communications received after this deadline will not be considered for the current dividend payment.

In cases where tax is deducted at a higher rate due to missing or incomplete documents, shareholders may claim a refund by filing their income tax returns. No claims will lie against the company for such deductions.

Additionally, residents must link their PAN with Aadhaar to avoid TDS at the higher rate of 20% under Section 397(2). Shareholders holding shares in physical folios must ensure bank account details are updated, as SEBI mandates electronic dividend payments only from April 1, 2024.

Donear Industries reported a 28% year-on-year increase in net profit to ₹112.9 crore for the quarter ended June 30, 2026, driven by an 8% rise in revenue from operations to ₹2,121.2 crore. The textile manufacturer’s consolidated profit after tax (PAT) stood at ₹112.6 crore, reflecting a minor share of loss from its associate company, Neo Stretch Private Limited.

The Board of Directors approved the standalone and consolidated unaudited financial results during a meeting held on August 14, 2026. The results were reviewed by the Audit Committee and subjected to limited review by statutory auditors M L Bhuwania and Co LLP.

Financial Performance

Revenue from operations increased to ₹2,121.2 crore in Q1FY27, compared to ₹1,963.2 crore in the corresponding period of FY26. Total income, which includes other income, rose to ₹2,144.5 crore from ₹1,973.3 crore. However, other income saw a sharp decline, falling to ₹23.4 crore from ₹10.1 crore in Q1FY26 and dropping significantly from ₹93.7 crore in the previous quarter.

Total expenses were contained at ₹1,987.6 crore, down from ₹2,410.8 crore in Q4FY26 but up from ₹1,852.1 crore in Q1FY26. Key expense components included:

• Cost of materials consumed: ₹840.1 crore
• Purchase of stock-in-trade: ₹322.3 crore
• Employee benefits expenses: ₹271.6 crore
• Finance costs: ₹64.3 crore

Profit before tax stood at ₹156.9 crore, compared to ₹121.2 crore in the same quarter last year. Tax expense was ₹44.0 crore, comprising current tax of ₹51.3 crore and deferred tax benefit of ₹7.3 crore.

What the Numbers Show

A notable divergence emerged between operating performance and non-operating income. While revenue grew steadily, other income contracted sharply from ₹93.7 crore in Q4FY26 to ₹23.4 crore in Q1FY27. This decline in other income contrasts with the expansion in profit before tax, indicating that the profit growth was primarily driven by core operational improvements rather than incidental gains. The company’s single-segment focus on textiles business remains unchanged, with no segment reporting required under Ind AS 108.

Regulatory and Compliance Notes

The financial results have been prepared in accordance with Indian Accounting Standards (Ind AS) and the Companies Act, 2013. The company disclosed that changes to employee benefit plans arising from the new Labour Codes notified by the Government of India resulted in an increase in gratuity liability. This included a past service cost recognition of ₹14.7 lakh for the quarter ended March 31, 2026, and ₹146.3 lakh for the full year ended March 31, 2026.

The dividend recommended by the Board in its May 30, 2026 meeting, if approved at the Annual General Meeting, will be paid before October 30, 2026. The auditor’s review report confirmed that nothing came to attention suggesting material misstatement in the financial results submitted pursuant to Regulation 33 of SEBI Listing Regulations.