| Textual Information(1) |
1. The above results were reviewed by the Audit Committee and approved by the Board of Directors at its meeting held on August 06, 2026 and were subjected to review by the Statutory Auditors. 2. The figures for the quarter ended March 31, 2026 are the derived figures between the audited figures in respect of full financial year upto March 31, 2026 and the unaudited published year-to-date figures upto December 31, 2025 being the date of end of the third quarter of the previous financial year which was subjected to limited review. 3. The Group had received a settlement offer during the quarter ended June 30, 2025 from Beste Motor Co. Ltd. and TYC Brother Industrial Co. Ltd. (“TYC Parties”) alleging breach of Transition Management Agreement (‘TMA’ or ‘agreement’) in respect of certain income amounting to Rs. 209.89 million recognised during the quarter ended June 30, 2025 and Rs. 231.82 million recognised during the year ended March 31, 2025 by the Group under ‘Revenue from operations’, as received from Chongqing Varroc TYC Auto Lamps Co., Ltd. (erstwhile joint venture). Subsequently, the Group received Statement of Claim under the arbitration proceedings originally initiated by TYC Parties in August 2022, on the aforesaid matter and on certain additional claims/breaches under the aforesaid TMA, which are to be quantified against which the Group has filed Statement of defence in March 2026. The Group believes that it has a strong case and will take appropriate actions as necessary to protect its interests. The auditors in their review report have included a qualification in respect of this matter. 4. On July 7, 2025, the Group received an intimation from ICC International Court of Arbitration with respect to a Request for Arbitration initiated by OPmobility Lighting Holding, France (Erstwhile PO Lighting Systems). The request pertains to certain alleged breaches of covenants under the Securities Purchase Agreement executed between the parties on April 29, 2022, and subsequently amended on October 5, 2022, May 12, 2023, and June 15, 2023. Claims in respect of some of the breaches have been quantified at US$ 66.41 million plus legal costs while for others no quantification has been provided. The Group is evaluating the matter and exploring legal and contractual remedies. It intends to contest the claims and take appropriate steps to protect its interests. Based on a legal opinion obtained, the Group believes that it has grounds to defend against the said allegations and accordingly no provision has been considered in respect of this matter in these results. 5. The Group had received following GST orders in relation to inappropriate classification of certain goods supplied during the period from July 1, 2017 to September 30, 2023: a) Order dated November 5, 2024 from Additional Commissioner of CGST & Central Excise for appropriation of GST dues amounting to Rs. 629 million along with equivalent penalty and applicable interest; b) Order dated January 03, 2025 from Commercial Tax Officer (Divisional GST office, Karnataka) consisting of demand for GST dues amounting to Rs. 0.03 million along with interest of Rs. 302.67 million and penalty of Rs. 564.19 million. The Group had paid the principal demand and had filed appeals against the above orders which have been partly allowed resulting in reduction of total demand to Rs. 284 million. The Group has filed further appeal against (b) above and intends to pursue further appellate remedies against (a) above, in respect of the interest and penalty components. Based on legal advice and assessment of the merits of the cases, management believes that it has adequate grounds to successfully defend the matters. Pending conclusion of the proceedings, no adjustments have been made in the financial results for the quarter ended June 30, 2026. 6. Exceptional items for the periods presented in the consolidated financial results include the following: a) On November 21, 2025, the Government of India notified the four Labour Codes – the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020 consolidating 29 existing labour laws. The Group has assessed and disclosed the incremental impact of these changes on the basis of the best information available and guidance provided by the Institute of Chartered Accountants of India. Considering the materiality and regulatory-driven, non-recurring nature of this impact, the Group has presented such incremental impact under Exceptional Items in the financial results for the year ended March 31, 2026. The incremental impact on provisions for employee benefits expenses of Rs. 225.49 million (gross of tax) towards gratuity and compensated absences primarily arises due to change in wage definition. The Group continues to monitor the finalisation of Central/State Rules and clarifications from the Government on other aspects of the Labour Code and would provide appropriate accounting effect as and when such clarifications are issued/rules are notified. b) The Group announced a Voluntary Separation Scheme (‘VSS’) for all eligible permanent workmen at specific plants of the Group. In this regard, the Group accepted separation of 411 employees and the separation cost of Rs. 799.49 million (gross of tax) associated with the VSS has been recognised as an exceptional item during the year ended March 31, 2026. c) Exceptional item includes write back of excess accrual of estimated expenses directly attributable to the merger of Varroc Polymers Limited (‘VPL’) with the Varroc Engineering Limited ('VEL'), the Holding company of Rs. 10.00 million for the year ended March 31, 2026. d) Net loss of Rs. 33.83 million for the year ended March 31, 2026 pertaining to liquidation of a step-down subsidiary, Varroc Lighting Systems, Bulgaria, EOOD. e) On December 11, 2024, the Group received an order from ICC International Court of Arbitration ('ICC') in respect of the ongoing arbitration between Varroc Corp Holding B.V. ('VCHBV') jointly with Varroc Engineering Limited and Beste Motor Co. Ltd. ('TYC BVI Entity') jointly with TYC Brother Industrial Co. Ltd ('TYC Group') and Varroc TYC Corporation ('VTYC' or 'China JV'), wherein VCHBV was directed to transfer its 50% shareholding in VTYC to TYC BVI Entity for a consideration of RMB 310.50 million. The Group received above consideration on May 07, 2025 and transferred its investments in China JV. On account of such disposal, the cumulative exchange gains pertaining to China JV of Rs. 611.94 million, which had been recognised in Other Comprehensive Income and accumulated in foreign currency translation reserve during the previous periods, were reclassified to the Statement of Profit or Loss. This has been disclosed as an exceptional item and reduced from Other Comprehensive Income for the quarter ended June 30, 2025 and year ended March 31, 2026. 7. The 'Automotive' segment consists of the business of automobile products consisting of auto parts for two-wheelers, three-wheelers and fourwheelers and related design, development and engineering activities and other services. 'Others' comprise of forging components for off road vehicles and components for mining and oil drilling industry which is below the thresholds for reporting as separate operating segment. Investment in joint ventures and corresponding share of profit/loss from joint ventures is considered under unallocated assets and profit/loss respectively. |