Varroc Engineering Limited — Interim / Quarterly Report 2022

Feb 14, 2022

Varroc Engineering Limited

Regd. & Corp. Office

L-4, MIDC, Industrial Area Tel + 91 240 6653700 email : varroc.info@varroc.com Waluj, Aurangabad 431 Fax + 91 240 2564540 www.varroc.com 136, Maharashtra, India CIN: L28920MH1988PLC047335

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VARROC/SE/INT/2021-22/60

February 14, 2022

To,

The Manager- Listing The Listing Department, National Stock Exchange of India Limited Exchange Plaza, Plot No. C/1, G Block, Bandra-Kurla Complex, Bandra (East), Mumbai-400051. NSE Symbol: VARROC

The Manager – Listing The Corporate Relation Department, Bombay Stock Exchange Limited Phiroze Jeejeebhoy Towers, Dalal Street, Fort, Mumbai-400 001. BSE Security Code: 541578

• Sub: Outcome of Board Meeting Ref: Regulation 30 (read with Part A of Schedule III) and Regulation 33 & 52 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations")

Dear Sir/Madam,

This is to inform you that the Board of Directors of the Company, at its meeting held today i.e., on Monday, February 14, 2022, which commenced at 2:45 p.m. and concluded at 3:20 p.m. has considered and approved the following items:

1. Unaudited Financial Results (Standalone and Consolidated) for the quarter and nine months ended on December 31, 2021

The Unaudited (Standalone and Consolidated) Financial Results of the Company for the quarter and nine months ended on December 31, 2021 were approved.

Pursuant to Regulation 33 and 52 of the Listing Regulations, we enclose the following:

i. Statements showing the Unaudited Financial results (Standalone and Consolidated) of the Company for the quarter and nine months ended on December 31, 2021; and

ii. The Limited Review Reports issued by the Statutory Auditors of the Company on the aforesaid Unaudited Financial Results (Standalone and Consolidated).

Further, these Financial Results will be uploaded on the Company's website www.varroc.com and will also be published in Business Standard (English) and Loksatta (Marathi) newspapers.

2. The Board was also briefed regarding the expression of interest received by the Company from certain strategic investors in the Varroc Lighting Systems business of the Company. The discussions are ongoing with these investors and no firm/ binding offer has been received as on date by the Company.

This intimation is also being uploaded on the Company’s website i.e., www.varroc.com.

We request you to take this on record and treat the same as compliance with the applicable provisions of the Listing Regulations, as amended.

Thanking you, Yours faithfully, For Varroc Engineering Limited

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Ajay Sharma Group General Counsel and Company Secretary Encl: a/a

SRBC&C lLP Chartered Accountants

Ground FIOOI Panchshil Tech Pari(, Yerwada (Near Don Bosco Sct1ool) Pune · 411 006, India Tel : +91 20 6603 6000

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Independent Auditor's Review Report on the Quarterly and Year to Date Unaudited Consolidated Financial Results of the Company Pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended

Review Report to

The Board of Directors

Varroc Engineering Limited

1. We have reviewed the accompanying Statement of Unaudited Consolidated Financial Results of Varroc Engineering Limited (the "Holding Company") and its subsidiaries (the Holding Company and its subsidiaries together referred to as "the Group"), and its joint ventures for the quarter ended December 3 I, 2021 and year to date from Apri I 0 I, 2021 to December 31, 2021 (the "Statement") attached herewith, being submitted by the Holding Company pursuant to the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 20 I 5, as amended (the "Listing Regulations").

2. This Statement, which is the responsibility of the Holding Company's Management and approved by the Holding Company's Board of Directors, has been prepared in accordance with the recognition and measurement principles laid down in Indian Accounting Standard 34, (Ind AS 34) "Interim Financial Reporting" prescribed under Section 133 of the Companies Act, 2013 as amended, read with relevant rules issued thereunder and other accounting principles generally accepted in India. Our responsibility is to express a conclusion on the Statement based on our review.

3. We conducted our review of the Statement in accordance with the Standard on Review Engagements (SRE) 2410, "Review of Interim Financial Information Perfonned by the Independent Auditor of the Entity" issued by the Institute of Chai1ered Accountants of India. This standard requires that we plan and perform the review to obtain moderate assurance as to whether the Statement is free of material misstatement. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We also petformed procedures in accordance with the Circular No. CIR/CFD/CMD 1/44/2019 dated March 29, 2019 issued by the Securities and Exchange Board of India under Regulation 33(8) of the Listing Regulations, to the extent applicable.

1. The Statement includes the results of the following entities:

List of Subsidiaries:

Varroc Polymers Private Limited; Durovalves India Private Limited; Team Concepts Private Limited; CarIQ Technologies Private Limited; Varroc European Holding B.V.; VarrocCorp Holding B.V.; Varroc Japan Co. Ltd.; IMES, Italy; Varroc Lighting Systems Italy, S.p.A.; Yarroc Lighting Systems Romania S.A .. ; Varroc Lighting Systems Vietnam Co. Ltd.; Yarroc Lighting Systems SRO CZ; Varroc Lighting Systems, INC; Varroc Lighting Systems, GmBH; Yarroc Lighting Systems, S.de.R.L.de.C.V.; Varroc Lighting Systems SA, Morocco; Varroc do Brasil Industria E Comercio LTDA; Varroc Lighting Systems, S.p.z.o.o.; Varroc Lighting Systems Endi.istriyel Ori.inler imalat ve Ticaret Anonim Sirketi; Yarroc Lighting Systems Bulgaria Eood, Varroc Lighting Systems Electronics Romania SRL.

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s RB c & co LLP. a Limited Llab1l1ty Partnership Wtlh LLP Identity No. AAB·43i8 Reqd. Office: 22. Camac Street. Block '8', 3rd Floor, Kolkata-700 016

SR BC & CO LLP Chartered Accountants

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List of Joint ventures:

Nuova CTS, Sri, Italy; Varroc TYC Corporation BVI; Varroc Dell'0110 Private Limited.

1. Based on our review conducted and procedures pe1fonned as stated in paragraph 3 above and based on the consideration of the review repo11s of other auditors referred to in paragraph 7 and 9 below, nothing has come to our attention that causes us to believe that the accompanying Statement, prepared in accordance with recognition and measurement principles laid down in the aforesaid Indian Accounting Standards ('Ind AS') specified under Section 133 of the Companies Act, 2013, as amended, read with relevant rules issued thereunder and other accounting principles generally accepted in India, has not disclosed the information required to be disclosed in terms of the Listing Regulations, including the manner in which it is to be disclosed, or that it contains any material misstatement.

Emphasis of Matter

1. We draw attention to Note 2 of the accompanying consolidated financial results which describes the litigations relating to alleged patent infringements. As informed, the Group has received cou11 orders confirming infringement in two cases whereas for three other cases, cowi hearings are not yet completed. The Group has filed appeals against these orders which are pending with appellate authorities. The Group had also separately filed for nullification of patents with the relevant authorities. Based on a legal opinion, the management believes that it has grounds to defend all cases under litigation and accordingly no provision has been considered in respect of these matters in these results.

Our conclusion is not modified in respect of this matter.

Other matters

1. The accompanying Statement includes the unaudited interim financial results/statements and other financial information, in respect of:

2. 6 subsidiaries, whose unaudited interim financial results/statements (without giving effect of elimination of intra-group transactions) include total revenues of Rs. 5,897.55 million and Rs. 18, 114.41 million, total net loss after tax of Rs. 323.67 million and Rs. 483.37 million, total comprehensive loss of Rs. 323.67 million and Rs. 483.37 million for the quaiier ended December 31, 2021 and the period from April 1, 2021 to December 31, 2021, respectively, as considered in the Statement which have been reviewed by their respective independent auditors.

3. I joint venture, whose unaudited interim financial results/statements include Group's share of

4. net profit/(loss) of Rs. 24.89 million and Rs. (7.10) million and Group's share of total comprehensive income/(loss) of Rs. 24.89 million and Rs. (7.10) million for the quaiier ended December 31, 2021 and for the period from April I, 2021 to December 31, 2021 respectively, as considered in the Statement whose interim financial results/financial statements, other financial information have been reviewed by its independent auditors.

The independent auditor's reports on interim financial statements/ financial information/ financial results of these entities have been furnished to us by the Management and our conclusion on the Statement, in so far as it relates to the amounts and disclosures in respect of these subsidiaries and joint ventures is based solely on the repo11 of such auditors and procedures performed by us as stated in paragraph 3 above.

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SR BC & CO LLP Chartered Accountants

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1. Certain of these subsidiaries/joint ventures are located outside India whose financial results and other financial information have been prepared in accordance with accounting principles generally accepted in their respective countries and which have been reviewed by other auditors under generally accepted auditing standards applicable in their respective countries. The Holding Company's management has conve11ed the financial results of such subsidiaries/joint ventures located outside India from accounting principles generally accepted in their respective countries to accounting principles generally accepted in India. We have reviewed these conversion adjustments made by the Holding Company's management. Our conclusion in so far as it relates to the balances and affairs of such subsidiaries/joint ventures located outside India is based on the repo11 of other auditors and the conversion adjustments prepared by the management of the Holding Company and reviewed by us.

2. The accompanying Statement includes unaudited interim financial results /statements and other unaudited financial information in respect of:

3. 6 subsidiaries, whose interim financial results/statements and other financial information (without giving effect of elimination of intra-group transactions) reflect total revenues of Rs. 320.59 million and Rs. 892.42 million, total net loss after tax of Rs. 322.35 million and Rs. 362.24 million, total comprehensive loss of Rs. 322.35 million and Rs. 362.24 million, for the quai1er ended December 31, 2021 and the period from April 01, 2021 to December 31, 2021 respectively.

4. 2 joint ventures whose interim financial results/statements includes the Group's share of net profit of Rs. 5.98 million and Rs 23.98 million and Group's share of total comprehensive income of Rs. 5.98 million and Rs 23.98 million for the quarter ended December 31, 2021 and for the period from April 01, 2021 to December 3 I, 2021 respectively.

The unaudited interim financial statements/ financial information/ financial results and other unaudited financial information of these subsidiaries and joint ventures have not been reviewed by any auditor and have been approved and furnished to us by the Management and our conclusion on the Statement, in so far as it relates to the affairs of these subsidiaries and joint ventures, is based solely on such unaudited interim financial statement/financial results and other unaudited financial information. According to the information and explanations given to us by the Management, these interim financial statements/financial information/financial results are not material to the Group.

Our conclusion on the Statement in respect of matters stated in para 7, 8 and 9 above is not modified with respect to our reliance on the work done and the repo11s of the other auditors and the financial results/financial information ce11ified by the Management.

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Place: Pune Date: February 14, 2022

SR BC & CO LlP Chartered Accountants

Ground Floor Panchshil Tech Parh, Yerwada (Near Don Bosco School) Pune - 411 006, India Tel : +91 20 6603 6000

Independent Auditor's Review Report on the Quarterly and Year to Date Unaudited Standalone Financial Results of the Company Pursuant to the Regulation 33 and 52 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended

Review Report to

The Board of Directors

Varroc E ngineering Limited

• I. We have reviewed the accompanying statement of unaudited standalone financial results ofVarroc Engineering Limited (the "Company") for the quarter ended December 31, 2021 and year to date from April 01, 2021 to December 31, 2021 (the "Statement") attached herewith, being submitted by the Company pursuant to the requirements of Regulation 33 and 52 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (the "Listing Regulations").

• This Statement, which is the responsibility of the Company's Management and approved by the Company's Board of Directors, has been prepared in accordance with the recognition and measurement principles laid down in Indian Accounting Standard 34, (Ind AS 34) "Interim Financial Repo1ting" prescribed under Section 133 of the Companies Act, 2013 as amended, read with relevant rules issued thereunder and other accounting principles generally accepted in India. Our responsibility is to express a conclusion on the Statement based on our review.

• We conducted our review of the Statement in accordance with the Standard on Review Engagements (SRE) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Institute of Chaitered Accountants oflndia. This standard requires that we plan and perform the review to obtain moderate assurance as to whether the Statement is free of material misstatement. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

• Based on our review conducted as above, nothing has come to our attention that causes us to believe that the accompanying Statement, prepared in accordance with the recognition and measurement principles laid down in the aforesaid Indian Accounting Standards ('Ind AS') specified under Section 13 3 of the Companies Act, 20 13 as amended, read with relevant rules issued thereunder and other accounting principles generally accepted in India, has not disclosed the information required to be disclosed in terms of the Listing Regulations, including the manner in which it is to be disclosed, or that it contains any material misstatement.

For S RB C & CO LLP

per Paul Partner Membership No.: I 05754 UDIN: 22105754ABYKMC6 I 80

Place: Pune Date: February 14, 2022

S R 8 C & CO LLP, a Limited Lt�b1l1ty Partnership with LLP Identity No. AAB·43 l 8 Reqd. Office: 22. Camac Street. Bloc k 'B', 3rd Floor, Kolkata-700 016

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Varroc Engineering Limited

Registered and Corporate Office : L-4, MIDC Area, Wnluj, Aurnngabad 431 136, Maharashtra CIN : L28920MH1988PLC047335 Tel: +91 240 6653 700/6653 699, Fax: +91 240 2564 540

E[-] mail : invcstors@varroc.com

var roe

Statement of unaudited consolidated financial results for the quarter and nine months ended December 31, 2021

	(Rs.inMillion�	(Rs.inMillion�	(Rs.inMillion�	(Rs.inMillion�	(Rs.inMillion�
Sr. No. Particulars	Quarter ended			Nine months ended Year ended
	December 31, 2021	Scptcm her 30, 2021	December 31, 2020	December 31, 2021	December 31, 2020 Morch 31, 2021
1 2 3 4 5 6 7 8 9 10 II 12 13 14 15 16 17 18 19 20 21 Revenue from operations Other income Totnl income(I+2) Expenses Cost of materials consumed Changesin inventories of work-in-progress and fnished goods Employeebenefits expense Finance costs Depreciation and amortisationexpense Other expenses Total expenses Proft/(loss) befre share of profits of joint ventures, tax and exceptional items (J-4) Share of Profts of Joint Ventures Proft/(loss) before exceptional items and tax (5+6) Tax expense Current tax Short (excess) provision in respect of earlier year Deferred tax Total tax expense Prort/(loss) fr the period befre exceptional items(7-8) Exceptional item-TaExpense(refer note 5) Proft/(loss) for the period (9-10) Other comprehensive income to be reclassified to profit or loss in subsequent periods Defrred hedging gains on cash fow hedges (net of tax) Exchange differences in translating the fnancial statementsol freign operations Other comprehensive income not to be reclassifed to proft or loss in subsequent periods Remeasurement of defned beneft obligation (net of tax) Other comprehensive incomc/(loss), net of tax (12+13) Total comprehensive incomc/(loss) for the period (11+14) Proft/(Loss) for the period attributable to: Shareholders of the Company Non-controlling interests Other comprehensive incomc/(loss) attributable to: Shareholders of the Company Non-controlling interests Total comprehensive incomc/(loss) for the period attributable to: Shareholders of the Company Non-controlling interests Paid-upequity share capital(fcevalue of Re.I) Reserves excluding revaluation reserves as per balance sheet Earnings per equity share attributable to Owners (Nomina value per share: Re. 1 (Previous year: Re. l))(not annualised) Basic and diluted (in Rupees)	Unaudited	Unaudited	Unaudited	Unaudited	Unaudited Audited
	31,349.51 148.02	30,325.58 99.18	34,926.55 219.32	91,091.08 400.79	76,834.94 113,027.51 950.90 1.271.00
	31.497.53 20,855.81 300.31 4,553.50 518.90 2,534.81 5,282.38	30,424.76 20,672.88 90.97 4,562.25 440.31 2,373.72 5,146.64	35,145.87 23,896.80 (819.02) 4,267.12 378.80 2,247.19 5,318.29	91,491.87 62,682.89 (870.21) 13.878.42 1,345.00 7,100.62 15.159.32	77,785.84 114.298.51 50,801.54 75,845.11 (329.38) (729.39) 11,619.57 16,295.75 1,253.09 1.626.29 6.586.45 8,950.93 11,951.35 17.648.13
	34,045.71	33,286.77	35,289.18	99,296.04	81.882.62 119,636.82
	(2,548.18) 30.87	(2,862.01) 11.51	(143.31) 92.45	(7,804.17) 16.87	(4,096.78) (5,338.31) 292.32 356.28
	12,517.31	12,850.501	150.861	17,787.301	13,804.46) 14.982.031
	273.28 255.55 (0.26) (146.26) Cl33.57)		215.29 (34.27) 60.00	589.47 (9.08) (458.35)	479.87 614.64 (34.27) (180.25) (484.60) (207.77) ~~-~~
	127.02 121.72		241.02	122.04	139.001 226.62
	12,644.33	12,972.221 -	1291.88l 1,077.76	17,909.341 -	13,765.461 (5,208.651 1,077.76 1,077.76
	12,644.331 59.41	12,972.221 (61.33)	11,369.641 (6.95) 163.01	l7,909.34l 459.60	14,843.221 16,286.411 (19.90) (111.55) (355.68) 51.90
	59.41 12,584.921 (2,651.57) 7.24 59.41 (2,592.16) 7.24 152.79 l (17.35)	161.331 13,033.551 (2,982.79) 10.57 (61.33) - (3,044.12) 10.57 152.79 (19.52)	156.06 11,213.581 (1,387.25) 17.61 156.06 (1,231.19) 17.61 134.81 (10.29)	459.60 17,449.74 (7,937.21) 27.87 459.60 - (7,477.61) 27.87 152.79 (51.95)	7131.451 (303.78' 14,974.671 (6,590.19 (4,865.06) (6,319.07) 21.84 32.66 (131.45) (303.64) (0.14) (4,996.51) (6,622.71) 21.84 32.52 134.81 152.79 30,126.34 (36.09) (46.75)

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Varroc Engineering Limited

Registered and Corporate Office: Lr4, MIDC Arca, Waluj, Aurangabad 431 136, Maharashtra CIN : L28920MH1988PLC047335 Tel : +91 240 6653 700/6653 699, Fax : +91 240 2564 540 E-mail : investors@varroc.com

varroc

Unaudited Consolidated Segment wise Revenue, Results, Assets and Liabilities

	(Rs.in Million)	(Rs.in Million)	(Rs.in Million)	(Rs.in Million)	(Rs.in Million)	(Rs.in Million)
Particulars	Quarterended			Nine months ended		For thevcarended
	December 31, 2021	September 30, 2021	December 31, 2020	December 31, 2021	December 31, 2020	March 31, 2021
1) Segment Revenue (i) Automotive (ii) Others 2) Segment Results (i) Automotive (ii) Others Total Segment Results Add (Less): (a) Finance Cost (b) Net unallocated (expenditure)Iincome Proft/(loss) befre tax 3) Segment Assets (i) Automotive (ii) Others Total segment assets Add: Unallocated Total assets 4) Segment Liabilities (i) Automotive (ii) Others Total segment liabilities Add: Unallocated Total liabilities	Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Audited
	30,639.01 710.50	29,736.08 589.50	34,416.07 510.48	89,056.27 2,034.81	75,515.43 1,319.51	111,137.63 1,889.88
	31,349.51 ( l ,952.30) (135.01)	30,325.58 (2,391.46) (97.09)	34,926.55 278.09 (115.78)	91,091.08 (6,385.99) (285 30)	76,834.94 (:,728.87) (308.70)	113,027.51 (3,668.62) (373.42)
	(2,087.31) (518.90) 88.90	(2,488.55) (440.31) 78.36	162.31 (378.80) 165.63	(6,671.29) ( l,345.00) 228.99	(3,037.57) (l ,253.09) 486.20	(4,042.04) ( l ,626.29) 686.30
	(2,517.31) 96,288.03 2,450.94	(2,850.50l 102,552.31 2,427.85	(50.86) 100,394.06 2,206.31	17,787.30' 96,288.03 2,450.94	13,804.46) 100,394 06 2,206.31	(4,982.03) 102,849.49 2,546.73
	98,738.97 7,066.95	104,980.16 6.924.96	102,600.37 6,97138	98,738.97 7,066.95	102,600.37 6,971.38	105,396.22 6,857.01
	105,805.92 50,633.11 1,024.15	111,95.12 49,347.32 918.70	109,571.75 50,340.86 716.45	105,805.92 50,633.11 1,024.15	109,571.75 50,340.86 716.45	112,253.23 48,674.58 650.21
	51,657.26 31,097.02	50,266.02 36,001.88	51,057.31 33,170.31	51,657.26 31,097.02	51,057.3 l 33,170.31	49,324.79 32.367.54
	82,754.28	86,267.90	84,227.62	82,754.28	84,227.62	81,692.33

Notes:

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• The above results were reviewed by the Audit Committee and approved by the Board of Directors at its meeting held on February 14, 2022 and were subjected to limited review by the Statutory Auditors.

• 2 The Group had received notices from a tl1ird-party auto component supplier for certain alleged patent infiingements in respect of some of tl1e products supplied by an overseas subsidiary of tl1e Group in tl1e European region. During the quarter ended December 31, 2021, the Group has received Court Orders confirming inf i ngement by tl1e Group in two cases whereas for three other cases, court hearings are not yet completed. The quantification of compensation payable in respect of such infiingements has not yet been initiated. The management has assessed that tl1ese Orders do not materially impact the current or future sales deliveries to respective OEMs. The Group has filed appeals against tliese Orders which are pending witl1 appellate autl1orities. Further, tl1e Group had separately filed for nullification of patents for which separate proceedings are pending witl1 tl1e relevant authorities, which if successful would have the effect that all claims will lose their legal basis. Based on a legal opinion, tl1e management believes that it has grounds to defend all cases under litigation and accordingly no provision has been considered in respect of these matters in these results for tl1e quarter and nine-montl1 period ended December 31, 2021. TI1e auditors in their review report have drawn Emphasis of Matter in relation to tl1is matter.

• 3 The Group has incurred significant losses in the previous year due to impact of COVID 19 and in the current period primarily due to the impact of semiconductor shortages which impacted and continues to impact the automotive sales volumes of its customers significantly. TI1e reduction in sales volumes and losses have affected the working capital cycle and cash generation from operations of the Group. The Group had certain term loans from banks maturing in September 21 of Eur 26.1 mn (Rs 2, 196 mn) in an overseas subsidiary out of which Eur 12.6 mn (Rs 1,060 mn) have been repaid to banks till December 31, 2021 and for tl1e remaining Eur 13.5 mn (Rs 1,136 mn); the Group has availed extension till end of March 2022. Further, there are working capital facilities from these banks of Eur 36 mn (Rs 3,028 mn) which were also extended and are also maturing by end of March 2022. The Group is in tl1e process of negotiating witl1 the banks for refinancing and/or rollover tl1e aforesaid term loans and working capital facilities and basis ongoing discussions with banks, the management does not foresee any risk of non-payment on due dates or replacement/renewal of working capital facilities. Furtlier, tl1e Group is also evaluating various alternatives to meet its fund requirements for operations and for repayment of debts falling due witl1in tl1e next 12 months and tl1e management does not foresee any material challenge in raising tl1ese funds. Accordingly, the results as at and for tl1e period ended December 31, 2021 are prepared based on going concern asswnption being appropriate for the next 12 months.

• 4 During tl1e quarter ended March 31, 2021, the Company had issued 17,974,870 equity shares of Re. l each at an issue price of Rs. 389 per equity share, aggregating to Rs. 6,992.22 million (including securities premium of Rs. 6,974.25 million). TI1e issue was made through eligible Qualified Institutional Placement (QlP) in terms of chapter VI of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 as amended, Section 42 and otl1er relevant provisions of tl1e Companies Act, 2013. The proceeds (net of issue expenses) have been utilised for repayment of borrowings of tl1e Group to tl1e extent of Rs. 2,442 million and remaining amount of Rs. 4,409.92 million has been utilised by tl1e Group for working capital requirements and capital expenditure.

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Varroc Engineering Limited

Registered and Corporate Office : L-4, MIDC Area, Waluj, Aurangabad 431 136, Maharashtra CIN : L28920MHl988PLC047335 Tel : +91 240 6653 700/6653 699, Fax : +91 240 2564 540

E-mail : invcstors@varroc.com

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varroc
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• The Czech subsidiary of the company had, in earlier years, recognised certain tax credits as deferred tax assets under two different incentive schemes available to the company. �1 the previous year, the management had reassessed the recoverability of these tax assets based on revised business plans, taking into account the impact of COVID-19 on the business volumes and profitability of the Czech subsidiary for future years. Based on this assessment, management had concluded that there was an uncertainty on the recoverability of the deferred tax assets recognised under the first scheme, which expires by March 2024. Accordingly, the Group had written down these tax assets amounting to Rs. 1,077.76 million under tl1e abovementioned scheme during tl1e quarter and nine months ended December 31, 2020 and the same was disclosed separately as "Exceptional Item" in the results. The management is working on various opportunities to utilize tl1is benefit and tl1is write off does not impact tl1e eligibility of the Czech subsidiary to claim the incentive benefit in the event there are sufficient taxable profits available in subsequent years before expiry of the benefits.

• 6 During tl1e nine montl1s period ended December 31, 2020 and for the year ended March 31, 2021, subsidiary company in Czech Republic has received a government grant of Rs. 2 I 5.47 million towards employee benefit expenses incurred during tl1e lockdown imposed due to COVID- I 9 pandemic.

• 7 The deferred tax in "Tax expense" for the nine months ended December 31, 2021 includes a credit of Rs. 78.57 Million (quarter and nine months ended December 31, 2020 and for tl1e year ended March 31, 2021 includes a credit of Rs. 134.15 Million) recognized on tax incentive available on eligible investments by overseas subsidiaries.

• 8 The Group's automotive lighting plant at Pune, India was destroyed by fire on February 18, 2020. The insurance claim in this regard was settled in previous year and accordingly the other income for the previous nine months period ended December 31, 2020 and year ended March 31, 2021 includes an amount of Rs. 364.71 million being the excess of claim amount over net book value of assets destroyed. Furtl1er, tl1e Group sold plot of land belonging to the above said plant in the year ended March 3 I , 2021. Accordingly, other income for the year ended March 31, 2021 also includes amount of Rs. 241.87 million being profit on sale of such land.

• 9 The Code on Social Security, 2020 ('Code') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified and the final rules/interpretation have not yet been issued. TI1e Company will assess tl1e impact of tl1e Code when it comes into effect and will record any related impact in the period the Code becomes effective.

• 10 TI1e Group has considered tl1e possible effects ofCOVID-19 pandemic including the impact on sales projections for future periods and consequent impacts on the recoverable values of assets including property, plant and equipment, intangible assets, de.ferred tax assets, etc and impact on liquidity position. In developing the assumptions relating to tl1e possible future uncertainties in the economic conditions because of tl1is pandemic and arriving at estimates, the Group, as at the date of approval of these financial results, has used internal and external sources of information. The Group has performed analysis on tl1e asswnptions used and based on current estimates, expects that tl1e carrying amounts of tl1e assets to be recoverable as at December 31, 2021. TI1e impact of COVID-19 on tl1e Group's financial results may differ from tliat estimated as at the date of approval of these consolidated financial results.

• 11 The "Automotive" segment consists of the business of automobile products consisting of auto parts for two-wheelers, tlrree-wheelers and four-wheelers and related design, development and engineering activities and other services. "Otl1ers" comprise of forging components for off road vehicles and components for mining and oil drilling industry which is below tl1e tliresholds for reporting as separate operating segment. Investment in Joint Venture and corresponding share of profit/loss from joint venture is considered under unallocated assets and profit/loss respectively.

• 12 Figures of previous year/periods have been reclassified/regrouped/restated, wherever necessary to conform to current period/year's classification.

Place: Pune Date : February 14, 2022

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For and on behalf of Board o Directors
Varroc Engineering Li ited
.
Tarang Jain
Chairman and Managing Director
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Varroc Engineering Limited Registered and Corporate Office: L[-] 4, MIDC Area, Waluj, Aurangabad 431 136, Maharashtra CIN: L28920MHI988PLC047335 Tel: +91 240 6653 700/6653 699, Fax: +91 240 2564 540

vorroc

E[-] mail: investors@varroc.com

Statement of unaudited standalone financial results for the quarter and nine months ended December 31, 2021

		(R. inmillion)	(R. inmillion)	(R. inmillion)	(R. inmillion)	(R. inmillion)	(R. inmillion)
Sr. No.	Particulars	Quarter ended			Nine months ended		Year ended
		December 31, 2021	September 30, 2021	December 31, 2020	December 31, 2021	December 31, 2020	March 31, 2021
		Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Audited
I 2 3 4 5 6 · 7 8 9 10 II 12	Revenue from operations Otl1er income (refer note3) Total Income (1 + 2) Expenses (a) Cost of materials consumed (b) Changes in stock of fnished goods and work-in-progess (c) Employee benefits expense (d) Finance costs (e) Depreciation and amortisation expense (f Otl1er expenses (refer note3 ) Total expenses (4) Proft/(loss) before tax (3- 4) Tax expense Current tax Short/( excess) provision fr tax relating to prior periods Deferred tax Total tax expense (6) Profit/(loss) for the period (5-6) Other comprehensive income Items that will be reclassified to profit or loss in subsequent periods (net of tax) Deferred hedging gains/(losses) on cash fow hedges (net of tax) Items that will not be reclassified to profit or loss in subsequent periods (net of tax) Remeasurement of defned beneft obligation (net of tax) Other comprehensive income Total comprehensive income fr the period (7+8) Paid-up equity share capital (Face value of the share in'Re.1/- each) Reserves excluding revaluation reserves as per balance sheet of previous accounting year Eings per share (of ReIi- each) (not annualised): Basic&diluted	8,568.08 138.93	8,881.58 254.31	7,909.55 155.44	24,109.85 488.04	17,381.00 731.08	25,617.78 1,114.15
		8,707.01	9,135.89	8,064.99	24,597.89	18,112.08	26,731.93
		5,795.27 (89.15) 801.22 286.34 441.38 1,546.51	5,846.18 5,404.99 92.10 (259.54) 880.68 748.25 173.78 128.76 440.72 395.92 1,298.13 1,157.61		16,454.37 (513.12) 2,488.78 585.77 1,277.59 3,907.83	11,405.51 (357.22) 1,877.33 420.91 1,159.58 2,752.93	17,462.19 (746.45) 2,686.87 561.10 1,543.62 3,853.09
		8,781.57	8,731.59 7,575.99		24,201.22	17,259.04	25,360.42
		(74.56)	404.30	489.00	396.67	853.04	1,371.51
		(11.60) (22.89)	72.32 84.27	77.51 (34.27) 90.81	72.91 (8.82) 73.62	180.46 (34.27) 116.43	247.55 (37.47) 239.81
		(34.49)	156.59	134.05 137.71		262.62	449.89
		(40.07)	247.71	354.95	258.96	590.42	921.62
			-	(6.95) -	-	(19.90) -	18.15
		-	-	(6.95) -		(19.90)	18.15
		(40.07) 152.79 (0.26)	247.71 348.00 258.96 152.79 134.81 152.79 1.62 2.63 1.69			570.52 134.81 4.38	939.77 152.79 19,016.83 6.82

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var roe

Varroc Engineering Limited

Registered and Corporate Office: L-4, MIDC Arca, Waluj, Aurangabad 431 136, Maharashtra CIN: L28920MH1988PLC047335 Tel : +91 240 665J 700/6653 699, Fax : +91 240 2564 540 E-mail : i nvestors@varroc.com

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Additional disclosures as per Regulations 52(4) of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015

Particulars	QuarterEnded	QuarterEnded	QuarterEnded	Nine months ended	Nine months ended	Year Ended
	December JI,2021	September JO,2021	December JI,2020	December December JI,2021 31,2020		March, 31 2021
Debt Equity ratio [ref emote (i) l Debt servce coverage ratio [refer note (ii)l Interest service coverage ratio [refer note (iii) l Outstanding Redeemable Preference Shares (QtyI Value) Capital Redemption Resere Debenture Redemption Resere Net Worth [refer note (iv)] Net profit after tax Ean ershareCEPS) Basic EPS (Not Annualised) Diluted EPS (Not Annualised) Current Rato [refer note (v) l Long Term Debt To Working Capital [refer note (vi)l' Bad Debts To Account Receivable Ratio [refer note (vii) l Curent Liability Ratio [refer note (viii) l Total Debts To Total Assets [refer note (ix) l Debtors Turover [refer note (x) l Inventory Tuover [refer note (xi)] Operating Margin [refer note (xii) l Net ProftMarginrrefer note(xiii) l (No of times) (No of times) (No of times) (R.In Millions) (Rs.In Millions) (Rs) (R) (No of times) (No of times) (No of times) (No of times) (No of times) (No of times) (No of times) (In%) (In%)	0.61 0.58 0.80 1.79 2.28 5.86		0.48 2.26 7.87	0.61 0.48 1.24 2.14 3.86 5.78		0.26 2.22 6.20
	Not Applicable Not Applicable NotAlicable
	19,428.58 (40.07) (0.26) (0.26) 0.61 (2.30) 0.00 0.63 0.29 2.08 1.50 0.85% -0.47%	19,468.98 247.71 1.62 1.62 0.79 (8.98) 0.00 0.61 0.28 2.18 1.58 3.65% 2.79%	11,967.661 19,428.58 354.95 258.96 2.63 1.69 2.63 1.69 0.88 0.61 20.58 (2.30) -0.00 0.00 0.71 0.63 0.22 0.29 2.28 6.79 1.68 4.56 5.85% 2.05% 4.49% 1.07%		11,967.66 590.42 4.38 4.38 0.88 20.58 0.00 0.71 0.22 5.96 3.65 3.12% 3.40%	19, 169.62 921.62 6.82 6.82 1.16 1.83 0.00 0.65 0.15 8.32 5.79 3.19% 3.60%
Fonnulae forcalculation of ratios are as fllows: (i) Debt Equity Ratio= [Total DebtITotal Equity l (ii)Debtserice coverage ratio= [ (Eaing before Interest Tax&Depreciation )/((Interest Expense+ Principal repayments of long term loan made during the period excluding prepayment)) (iii) Interest service coverage ratio= [ (Eaing before Interest and Tax&Depreciation)l(Interest Expense) l (iv) Net Worh= [ Equity share capital+ Other equityl (v) Current ratio= [ Current AssetsICurrent Liabilities l (vi) Long term debt to working capital= [ Non Current borrowing (including current maturty of long term borrowing)IWorking Capital l (v)Bad debts to Accounts receivable ratio= [ (Bad debts written of +Provision forbaddebts charged to profit and loss account)IAverage Trade Receivables l (viii) Curent liability rato= [ Curent LiabilityITotal Liability) (ix) Total debts to Total assets= [Total DebtITotal Assetsl (x) Debtors Tuover= [ Revenue from OperationsIAverage Debtors l (xi) Inventor Tuover= [ (Cost of Material Consumed+Changes in stock of finished goods and work-in-progress + Consumption of Stores, Spares, Packing Material)IAverage Inventorl (xii) Operating Margin=[EBIT-Other IncomeIRevenue fom operation) (xiii) Net Profit Margin= [ Net proft afer taxIRevenue fom operation] (xiv) Total Debt= Long Term Borrowings+ Short Term Borrowings (includes Current Maturities of Long Term Borrowings) (xv) Total Equity= Equity Share Capital+ Other Equity (xvi) Working Capital= [Total Curent Assets -Total Current Liabilities (excluding curent maturity of long ter borrowing)) •Rato not annualised, except for the year ended March31, 2021 unumbers are below0.01 ' Ratio for December31, 2021isnegativebecause networking caoitalisnegative

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Varroc Engineering Limited

Registered and Corporate Office: L-4, MIDC Area, Waluj, Aurangabad 431 136, Maharashtra CIN: L28920MH1988PLC047335

-varroc

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Tel: +91 240 6653 700/6653 699, Fax: +91 240 2564 540

E-mail: investors@varroc.com

Notes to the Unaudited Standalone Financial Results:

• I) The above results were reviewed by the Audit Committee and approved by the Board of Directors at its meeting held on February 14, 2022 and were subjected to limited review by the Statutory Auditors.

• 2) The automotive lighting plant of the Company (erstwhile Varroc Lighting Systems India Private Limited) at Pune, India was destroyed by fire on February 18, 2020. The insurance claim in this regard was settled in previous year and accordingly the other income for the period ended December 31, 2020 and year ended March 31, 2021 includes an amount of Rs. 364. 72 million being the excess of claim amount over net book value of assets destroyed. Further, the Company sold plot of land belonging to the above said plant in the year ended March 31, 2021. Accordingly, other income for the year ended March 31, 2021 also includes amount of Rs. 241.87 million being profit on sale of such land.

• 3) Other expenses for the quarter and nine months period ended December 31, 2021 includes amounts ofRs.218.30 million and Rs.316.43 million respectively in respect ofumealised foreign exchange loss on loans given to overseas subsidiaries.

• 4) During the quarter ended March 31, 2021, the Company had issued 17,974,870 equity shares of Re I each at an issue price of Rs 389 per equity share, aggregating to Rs 6,992.22 million (including securities premium of Rs 6,974.25 million). The issue was made through eligible Qualified Institutional Placement (QIP) in terms of chapter VI of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 as amended, Section 42 and other relevant provisions of the Companies Act, 2013. The proceeds (net of issue expenses) have been utilised for repayment of borrowings of the Company (Rs.890 million) and investment in overseas subsidiary (Rs.4, 726. 70 million) and remaining amount has been utilised by the Company for working capital requirements and capital expenditure.

• 5) During the previous quarter ended September 30, 2021, the Company issued 3, 750 Number of Debentures 8% Secured Listed Non-convertible Debentures of Rs. 1 million each aggregating to Rs.3,750 million on a private placement basis. The NCDs have bullet repayment on June 17, 2023 ofRs.1,250 million and on September 17, 2023 ofRs.2,500 million with coupon payments to be made on an annual basis. The proceeds from the issue have been utilised for investment in overseas subsidiary for loan ' repayments and for general corporate purposes.

• 6) The Company has considered the possible effects of the COVID-19 pandemic including the impact on sales projections for future periods and consequent impacts on the recoverable values of assets including property, plant and equipment, intangible assets, etc. In developing the assumptions relating to the possible future uncertainties in the economic conditions because of th.is pandemic and arriving at estimates, the Company, as at the date of approval of these financial results, has used internal and external sources of information. The Company has performed analysis on the assumptions used and based on current estimates, expects the carrying amounts of the assets to be recoverable as at December 31, 2021. The impact of COVID-19 on the Company's financial results may differ from that estimated as at the date of approval of these standalone financial results.

• 7) The Code on Social Security, 2020 ('Code') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified and the final rules/interpretation have not yet been issued. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

• 8) Figures of previous year/periods have been reclassified/regrouped/restated, wherever necessary to conform to current period/year classification.

Place: Pune

Date: February 14, 2022

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and on behalf of Board of Directors
c ':,) Varroc Engineering Limited -
� '
I';
Tarang Jain
,....... "' ..r ,.../ Chairman and Managing Director
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