Paras Defence and Space Technologies Limited shareholders rejected a proposed related-party transaction with its subsidiary, Paras Anti-Drone Technologies Private Limited, during the company’s 17th Annual General Meeting held on September 11, 2026.

The meeting, conducted via video conferencing, saw five of the six ordinary resolutions pass with requisite majorities. However, Resolution No. 6, which sought approval for material related-party transactions with the subsidiary, failed to secure support. Shareholders holding 56.80% of the valid votes cast opposed the resolution, while only 43.20% voted in favour.

Voting Breakdown

The total number of shareholders on the record date of September 4, 2026, stood at 349,193. Participation included remote e-voting prior to the meeting and electronic voting during the AGM. Only eight promoter group members and 47 public shareholders attended via video conferencing.

Key Outcomes

Shareholders overwhelmingly approved the adoption of the annual audited financial statements and the declaration of a dividend on equity shares for the financial year ended March 31, 2026. Both resolutions received over 99.99% support from voting shareholders.

The re-appointment of Mrs. Shilpa Amit Mahajan, who retires by rotation, was also approved, securing 99.76% of votes in favour. Additionally, shareholders ratified the remuneration of cost auditors for FY26-27 with near-unanimous support.

A separate resolution regarding material related-party transactions with associate company Controp-Paras Technologies Private Limited passed with 58.57% support. Promoter group members abstained from voting on both related-party transactions, as is standard practice for interested parties under SEBI regulations.

Paras Defence and Space Technologies Limited reported robust financial growth for the fiscal year ended March 31, 2026 (FY26), with consolidated revenue rising 31% to ₹476.57 crore from ₹364.66 crore in FY25. Consolidated EBITDA increased to ₹120.46 crore, while Profit After Tax (PAT) surged 45% to ₹89.46 crore, up from ₹61.49 crore in the prior year. The company closed FY26 with an order book of ₹986 crore, providing visibility for future execution.

The Board of Directors has recommended a final dividend of ₹1 per equity share of face value ₹5 each. The dividend is payable to shareholders on record as of August 28, 2026, subject to approval at the 17th Annual General Meeting (AGM) scheduled for September 11, 2026.

Tax Deduction at Source on Dividend

The company issued a communication regarding the deduction of tax at source (TDS) on dividends, effective April 1, 2026, under the Income Tax Act, 2025. Dividends are taxable in the hands of shareholders, and the company will deduct TDS at applicable rates based on residential status and submitted documents.

For Resident Shareholders

Tax is required to be deducted under Section 393(1) read with Section 393(4) of the Act at the rate of 10% where shareholders have registered a valid Permanent Account Number (PAN). If shareholders do not have a PAN, have an invalid PAN, or have a PAN not linked with Aadhaar, TDS at the rate of 20% shall be deducted under Section 397(2).

No tax shall be deducted on dividends payable to resident individuals if:

• The total dividend amount received during Tax Year 2026-27 does not exceed ₹10,000.
• The shareholder provides Form 121, provided all eligibility conditions are met. This form is required only if the dividend amount exceeds ₹10,000 (shareholding exceeds 10,000 shares).
• An exemption certificate is issued by the Income-tax Department.

For resident non-individual shareholders, such as Insurance Companies, Mutual Funds, Alternative Investment Funds, and National Pension System Trusts, no tax is deducted if they provide self-declarations and relevant registration certificates confirming their exempt status under the Act.

For Non-Resident Shareholders

Taxes are withheld under Section 393(2) of the Act at the rate of 20% (plus applicable surcharge and cess). Non-resident shareholders may opt for benefits under the Double Tax Avoidance Agreement (DTAA) between India and their country of residence if more beneficial. To avail DTAA benefits, shareholders must submit:

• Self-attested copy of PAN card.
• Self-attested Tax Residency Certificate (TRC) valid as on the record date.
• Self-declaration in Form 41 executed electronically.
• Self-declaration of meeting treaty eligibility and beneficial ownership requirements.

Related Party Transaction Approvals

The company is seeking shareholder approval for material related-party transactions (RPTs) under Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The aggregate value of these proposed transactions stands at ₹600 crore, split between its associate company and subsidiary.

Transactions with Controp-Paras Technologies Private Limited

Paras Defence proposes an omnibus approval limit of ₹450 crore for transactions with Controp-Paras Technologies Private Limited, an associate company in which Paras Defence holds a 30% stake. This limit covers the period from the current AGM until the next AGM. The primary driver is an order received by Controp-Paras from Larsen & Toubro Limited (L&T) for Electro-Optics Systems for their CIWS Program, with Paras Defence executing the Indian Content portion valued at approximately ₹293 crore.

The proposed limit includes:

• Supply of goods, services, materials, and technologies: ₹293 crore
• Additional sale and purchase transactions: ₹110 crore
• Other related-party transactions (loans, guarantees, investments): ₹47 crore

Transactions with Paras Anti-Drone Technologies Private Limited

The company also seeks approval for an omnibus limit of ₹150 crore for transactions with its subsidiary, Paras Anti-Drone Technologies Private Limited (55% stake). These transactions support operational continuity and working capital requirements for defense and drone project execution.

Key components include:

• Loans/Inter-Corporate Deposits (ICDs): ₹47.04 crore
• Corporate Guarantees: ₹35.35 crore
• Purchase of Goods/Services: ₹26.50 crore
• Sale of Goods/Services: ₹16.67 crore
• Financial Guarantees: ₹15.00 crore

Both sets of transactions have been reviewed and approved by the Audit Committee, comprising a majority of Independent Directors. The Board asserts that these transactions are conducted at arm’s length and in the ordinary course of business.

What the Numbers Show

The scale of the proposed related-party transactions is substantial relative to the company’s size. The ₹450 crore limit for Controp-Paras represents approximately 94% of Paras Defence’s annual consolidated turnover of ₹476.57 crore in FY26. This high concentration indicates that the company’s near-term revenue visibility and operational execution are heavily dependent on the successful delivery of the L&T CIWS program through its associate. Similarly, the ₹150 crore limit for the subsidiary accounts for roughly 31.47% of the listed entity’s turnover, reflecting significant intra-group financial support and trade flows aimed at consolidating growth within the defense technology vertical.

AGM Details

The 17th AGM will be held via Video Conferencing or Other Audio-Visual Means (VC/OAVM). Members holding shares as of September 4, 2026, are eligible to vote. Remote e-voting will be available from September 8, 2026, to September 10, 2026. The meeting agenda also includes the re-appointment of Mrs. Shilpa Amit Mahajan as a Whole-Time Director and the ratification of remuneration for cost auditors M/s. Dinesh Jain & Company.