awk  '
    BEGIN {
        soup = "Group A,Group B,Group C,Group D,Group E"
        nlist = split( soup, list, "," );
    }

    NR != FNR {
        # some other processing for file2
        next;
    }

    # ----------- blocks for processing file 1 ------------------------
    /XYZ/ { Var1++; }   # count lines with XYZ

    /^<x / {
        str = gensub(/(.+")([0-9]+)(">)(.+)(<\/.+)/, "\\2|\\4", "g")
        split( str, a, "|" );
        agroup[a[2]] = a[1];

        # your original code
        B[gensub(/pattern/,"how","g")]      #Storing desired data in array B
        C[gensub(/pattern/,"how","g")]      # #Storing desired data in array C

        # small change to match D with A
        dgroup[a[2]] = gensub(/pattern/, "\\2|\\4", "g") # #Storing desired data in array D

        next;
    }

    /^<\/group>/ {
        for( i = 1; i <= nlist; i++ )       # end of group, it is now safe to fill in D and A
        {
            A[++aidx] = sprintf( "%d|%s", agroup[list[i]], list[i] );
            D[aidx] = dgroup[list[i]];
        }
        delete agroup;
        delete dgroup;
        next;
    }

    END {
        for( i = 1; i <= length( A ); i++ )         # my testing to ensure they align
            printf( "(%s) (%s)\n", A[i], D[i] );
    }
' file1 file2