Par Drugs faces Rs 20.09 lakh tax demand due to filing error

Par Drugs and Chemicals Limited has disclosed receiving an Intimation Order under Section 143(1) of the Income Tax Act, 1961, from the Income Tax Department. The order, downloaded on May 21, 2026, outlines a total tax demand of Rs 20,09,030, comprising a tax component of Rs 14,79,466 and interest of Rs 5,29,563. The demand arises from certain additions and disallowances aggregating to Rs 58,78,360 made to the company's taxable income.

Details of the Additions

The Intimation Order specifies that an amount of Rs 32,00,000 towards Corporate Social Responsibility (CSR) expenditure and Rs 26,78,360 towards provision for gratuity were added to the taxable income. The company noted that these amounts had already been added back while computing the taxable income. However, an inadvertent clerical error during the filing of the Income Tax Return (ITR) led to these amounts being incorrectly disclosed under the wrong column or serial number.

Component	Amount
CSR Expenditure Addition	Rs 32,00,000
Gratuity Provision Addition	Rs 26,78,360
Total Additions	Rs 58,78,360
Tax Demand	Rs 14,79,466
Interest	Rs 5,29,563
Total Demand	Rs 20,09,030

Rectification and Impact

The company stated that the Intimation Order is subject to rectification under Section 154 of the Income Tax Act, 1961. Par Drugs and Chemicals Limited intends to initiate the necessary rectification process to correct the clerical error in the ITR. Upon the disposal of the rectification application, the tax demand is expected to be recomputed as NIL. Consequently, the company confirmed that there is no material impact on its financial, operational, or other activities quantifiable in monetary terms as of the date of this disclosure.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
+0.18%	-3.03%	-1.50%	-0.54%	-12.60%	+43.84%

The Board of Directors of Par Drugs & Chemicals Limited convened a meeting on Thursday, 14th May, 2026, at 3:30 PM at its GIDC Industrial Estate, Phase-II, Chitra, Bhavnagar premises, concluding at 6:16 PM. The board considered and approved the standalone audited financial results for the quarter and year ended 31st March, 2026. The statutory audit was conducted by CA Miral Mehta, Partner of Sarupria Somani & Associates, Chartered Accountants (FRN: 010674C), who issued an unmodified opinion on the financial results. The financial results were reviewed by the Audit Committee prior to board approval, and the Certificate of Correctness was signed by the CEO and CFO of the Company.

Financial Performance Overview

The company's standalone financial results for FY26 reflect a marginal moderation in net profit compared to the previous year, while revenue from operations registered a modest increase. The following table summarises the key profit and loss metrics:

Metric:	Q4 FY26 (31-03-2026)	Q3 FY26 (31-12-2025)	Q4 FY25 (31-03-2025)	FY26 (Year Ended 31-03-2026)	FY25 (Year Ended 31-03-2025)
Revenue from Operations (Rs. Lakhs):	1,961.08	2,933.95	2,232.99	10,365.56	10,097.35
Other Income (Rs. Lakhs):	35.85	132.54	78.90	400.07	215.03
Total Revenue (Rs. Lakhs):	1,996.93	3,066.49	2,311.89	10,765.63	10,312.38
Total Expenses (Rs. Lakhs):	1,913.78	2,422.29	2,084.03	9,035.47	8,520.09
Profit Before Tax (Rs. Lakhs):	83.15	644.20	227.86	1,730.16	1,792.29
Net Profit (Rs. Lakhs):	85.36	479.72	165.09	1,310.86	1,335.79
Basic EPS (Rs.):	0.69	3.90	1.34	10.65	10.86
Diluted EPS (Rs.):	0.69	3.90	1.34	10.65	10.86

For FY26, revenue from operations stood at Rs. 10,365.56 lakhs compared to Rs. 10,097.35 lakhs in FY25. Net profit for the full year was Rs. 1,310.86 lakhs against Rs. 1,335.79 lakhs in the prior year. The company reported no exceptional items during the period.

Balance Sheet Highlights

The company's total assets grew to Rs. 12,921.23 lakhs as at 31st March, 2026, from Rs. 11,939.01 lakhs as at 31st March, 2025. Key balance sheet figures are presented below:

Parameter:	As at 31-03-2026 (Rs. Lakhs)	As at 31-03-2025 (Rs. Lakhs)
Total Non-Current Assets:	6,488.64	6,452.90
Total Current Assets:	6,432.59	5,486.11
Total Assets:	12,921.23	11,939.01
Total Equity:	11,198.46	9,897.49
Total Non-Current Liabilities:	348.41	384.66
Total Current Liabilities:	1,374.36	1,656.86
Total Equity and Liabilities:	12,921.23	11,939.01

Cash and cash equivalents increased significantly to Rs. 4,184.29 lakhs as at 31st March, 2026, from Rs. 2,757.72 lakhs as at 31st March, 2025. Total equity stood at Rs. 11,198.46 lakhs, with equity share capital remaining unchanged at Rs. 1,230.46 lakhs and reserves and surplus at Rs. 9,968.00 lakhs.

Cash Flow Summary

The company generated net cash from operating activities of Rs. 1,643.22 lakhs for the year ended 31st March, 2026, compared to Rs. 1,616.03 lakhs in the previous year. Net cash used in investing activities was Rs. 216.64 lakhs, a significant improvement from Rs. 2,523.70 lakhs in FY25. There were no cash flows from financing activities during the year.

Key Board Decisions

In addition to approving the financial results, the board transacted several significant matters during the meeting. The board also approved the Human Resource Annual Report for FY 2025-26 and took note of the Actuarial Valuation Report under AS 15 for the defined benefit scheme of Gratuity Benefits, received from Kapadia & Kochrekar Actuaries & Consultant. Key decisions are summarised below:

Decision:	Details
Investment Authorisation:	Approved investment limit of ₹90.00 Crore in liquid funds, arbitrage funds, fixed deposits, and similar instruments
Banking Facility Renewal:	Renewal of banking facilities with Kotak Mahindra Bank at existing limit of Rs. 161.00 Lakh without revision
Employee Bonus:	10% of basic salary, totalling Rs. 25.14 lakh, paid to employees in April 2026 for FY 2025-26
Motor Vehicle Sale:	Approved sale of a company motor vehicle at total consideration of approximately Rs. 1.50 Lakh
Internal Audit:	Approved Internal Audit Report for FY 2025-26 conducted by M/s. Sidhpura & Co., Chartered Accountants
Regulatory Filings:	Authorised Director & CEO to file E-Form DPT-3, E-Form MGT-14, and the FLA Return with the Registrar of Companies

Regulatory and Governance Matters

The auditor's report highlighted a key audit matter relating to an ongoing regulatory proceeding. During the previous financial year, the company had proposed a strategic restructuring involving the slump sale of its primary business undertaking to a related party. The Securities and Exchange Board of India (SEBI) subsequently issued an Ex-Parte Interim Order followed by a Confirmatory Order restraining the implementation of the proposed Business Transfer Arrangement. The company is evaluating available legal remedies, including the option of challenging the orders before the appropriate appellate authority. Based on legal advice and management's assessment, the auditors found management's going concern assumption to be reasonable and the related disclosures to be adequate. The company reported zero pending investor complaints at the end of the quarter, having received and disposed of 4 complaints during the quarter ended 31st March, 2026. The trading window for designated persons will reopen 48 hours after the declaration of the financial results.