Varroc Engineering Limited has disclosed its related party transactions for the half year ended March 31, 2026, in compliance with Regulation 23(9) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The filing, submitted to the National Stock Exchange of India and BSE Limited, outlines the consolidated transactions involving subsidiaries, key management personnel, and other related entities. The disclosure confirms that all transactions remained within the limits approved by the audit committee.

The report details various transactions, including the sale and purchase of goods and services, loans, and corporate guarantees extended to subsidiaries. Significant transactions include sales to Varroc Dellorto Private Limited amounting to 235.33 and purchases from Varroc Intelligent Driving R&D Center (C) totaling 299.65. The company also recorded interest received from Varroc Connect Private Limited at 8.09 and interest received from Varroc European Holding B.V. at 2.21.

Transactions with Key Management Personnel

The disclosure outlines remuneration paid to key managerial personnel. Chairman and Managing Director Mr. Tarang Jain received remuneration of 46.53, while Whole time Director Mr. Arjun Jain received 12.11. Mr. K. Mahendra Kumar, Group Chief Finance Officer, received 13.44, and Company Secretary Mr. Anil Ghatiya received 2.22. Other directors, including Mr. Dhruv Jain and Mr. Avinash Chintawar, also received remuneration as per the disclosed details.

Corporate Guarantees and Loans

Varroc Engineering provided corporate guarantees to several subsidiaries during the period. A guarantee of 516.61 was extended to Varroc Electronics Romania S.r.l., while Industria Meccanica E Stampaggio S.p.a. received guarantees amounting to 272.43. The company also extended loans to subsidiaries, including a loan of 177.90 to Varroc Connect Private Limited and 199.80 to Varroc European Holding B.V.

Inter-Subsidiary Transactions

The filing highlights numerous inter-subsidiary transactions. Varroc Italy S.p.A. engaged in significant purchases from Varroc Romania S.A. amounting to 143.34. VarrocCorp Holding B.V. received interest of 81.11 from Varroc European Holding B.V. and extended a loan of 115.50 to the same entity. These transactions were conducted within the approved framework and limits.

Varroc Engineering Limited has significantly strengthened its environmental, social, and governance (ESG) credentials, achieving notable improvements in sustainability ratings and operational performance. The global tier-1 automotive components supplier announced these developments on World Earth Day, reinforcing its commitment to sustainable manufacturing and environmental stewardship.

Enhanced ESG Performance and Recognition

The company has achieved substantial progress in external ESG assessments across multiple rating agencies. Building on previous ratings from CRISIL ESG Ratings & Analytics Limited and SES ESG Research Private Limited, Varroc has now received an ESG rating of 75 from CFC Finlease Private Limited, a SEBI-registered ESG Rating Provider.

The EcoVadis improvement has elevated Varroc's global percentile ranking from the 18th to the 34th percentile, earning the company the "Sustainability Committed" badge. This advancement reflects stronger performance relative to global peers and demonstrates the effectiveness of Varroc's ESG framework across its international operations.

Renewable Energy and Carbon Reduction Achievements

Varroc has made substantial progress in transitioning to clean energy and reducing its carbon footprint. The company increased renewable energy usage to approximately 40% of its total electricity consumption in FY25-26, representing 36% of overall energy consumption including process fuels. This marks a substantial year-on-year increase with a clear roadmap to surpass 50% in the near term.

Through efficiency-led initiatives across its global manufacturing footprint, the company reduced energy intensity and avoided over 28,000 tonnes of CO₂ emissions in FY 2026 compared to the previous year. The implementation of over 100 energy efficiency projects worldwide supported an approximately 26% reduction in carbon emissions during FY 2026.

Circular Manufacturing and Water Stewardship

Varroc continues advancing circular manufacturing practices with impressive waste management results. Over 90% of total waste generated is recycled, supported by robust scrap management systems that minimize landfill dependency and improve material efficiency. The company has also achieved year-on-year reduction in overall waste generation.

Water stewardship remains a key priority, particularly in water-stressed regions. Varroc has implemented Zero Liquid Discharge (ZLD) systems across key facilities, enabling over 90% wastewater recycling and reuse, reinforcing its commitment to responsible water management.

Kham River Restoration Impact

Extending sustainability efforts beyond operations, Varroc continues contributing to the restoration of the Kham River through comprehensive environmental initiatives. The restoration project has achieved significant measurable impact:

The Kham River Restoration Mission received global recognition as one of the top five finalists worldwide for the WRI Ross Center Prize for Cities, selected from over 200 applications across 148 cities in 62 countries. This recognition reinforces that locally rooted, data-led, and community-driven environmental action can meet the highest global benchmarks.

Leadership Perspective and Future Outlook

Chairman and Managing Director Tarang Jain emphasized the company's commitment, stating that environmental sustainability shapes every aspect of Varroc's operations and growth. The improvement in ESG ratings reflects progress across energy transition, emissions reduction, and responsible manufacturing.

Looking ahead, Varroc will continue focusing on key improvement areas, including Scope 3 emissions, deeper supply chain ESG integration, and enhanced external assurance, with a target to further improve its EcoVadis score. As ESG considerations increasingly influence investor decisions, Varroc's improving ratings and disclosures strengthen its positioning among global automotive component players, enhancing stakeholder confidence and supporting long-term value creation.