Diffusion Engineers Limited

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(CIN: L99999MH2000PLC124154)

Registered Office: T-5 & 6, MIDC, Hingana, Nagpur, Maharashtra, India, 440016 Mobile No.: 9158317943

E-mail - [email protected] Website - www.diffusionengineers.com

Date: 30/06/2025

Department of Corporate Services, Listing Department, BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers, Dalal Street, C-1, G-Block, Bandra - Kurla Complex Mumbai – 400 001 Bandra (E), Mumbai – 400 051

Scrip Code: 544264 Scrip Symbol: DIFFNKG ISIN: INE184O01015

Subject:

1. Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”): Electronic copy of the Notice of the 43rd Annual General Meeting (“43rd AGM”) and Annual Report for the financial year ended 31st March 2025; and

2. Intimation of cut-off date of 10th July 2025 to determine the eligibility of the members to cast their vote through remote e-Voting and e-Voting during the 43rd AGM.

Dear Madam/ Sir,

This is further to our intimation dated May 15, 2025 regarding convening of the 43[rd] AGM of the Company on Tuesday, 22nd July 2025 through Video Conferencing/ Other Audio-Visual Means (VC/ OAVM) facility.

Please find enclosed herewith the electronic copy of the Notice of the 43rd AGM, and the Annual Report for the financial year ended 31st March 2025, which is being sent by email to those members whose email address is registered with the Company/ Depository Participant(s). Further, in accordance with Regulation 36(1)(b) of the Listing Regulations, a letter containing the web-link of the website of the Company from where the Annual Report for the financial year ended 31st March 2025 can be accessed, is being dispatched to those members whose email address is not registered with the Company/ Depository Participant(s).

Notice of the 43rd AGM and the Annual Report for the financial year ended 31st March 2025 are also being uploaded on the website of the Company at www.diffusionengineers.com and on the website of Central Depository Services (India) Limited (“CDSL”) i.e. www.evotingindia.com

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Further, in terms of Section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management and Administration) Rules, 2014 (as amended), the Company has fixed Thursday, 10th July 2025 as the cut-off date to determine the eligibility of the members to cast their vote through remote e-Voting and e-Voting during the 43rd AGM.

Please take the same on record.

Thanking you,

Yours truly,

For DIFFUSION ENGINEERS LIMITED

CHANCHA Digitally signed by CHANCHAL L RAJESH RAJESH JAISWAL Date: 2025.06.30 JAISWAL 10:38:40 +05'30'

Chanchal Jaiswal Company Secretary & Compliance Officer (Membership no. A67136)

Place : Nagpur Date : June 30, 2025 Registered Office: T- 5 & 6, MIDC, Hingana, Nagpur, Maharashtra, India, 440016

Encl.: as above

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DIFFUSION ENGINEERS LIMITED

(CIN: L99999MH2000PLC124154) Registered Office: T-5 & 6, MIDC, Hingana, Nagpur, Maharashtra, India, 440016

Mobile No.: 9158317943 E-mail - [email protected] • Website - www.diffusionengineers.com

NOTICE

Notice is hereby given that the Forty Third Annual General Meeting (“43[rd] AGM”) of the members of Diffusion Engineers Limited (CIN: L99999MH2000PLC124154) (“the Company”) will be held on Tuesday, July 22, 2025 at 02:00 p.m., Indian Standard Time (IST), through Video Conferencing/ Other Audio-Visual Means (“VC/ OAVM”) facility, to transact the following business:

ORDINARY BUSINESS:

To receive, consider and adopt: a) the audited standalone financial statements of the Company for the financial year 2024-25 including Balance Sheet as at 31[st] March 2025, the Statement of Profit and Loss and Cash Flow Statement for the financial year ended on that date and the Reports of the Board of Directors and Auditors’ thereon; and b) the audited consolidated financial statements of the Company for the financial year 2024-25 including Balance Sheet as at 31[st] March 2025, the Statement of Profit and Loss and Cash Flow Statement for the financial year ended on that date and the Report of the Auditors’ thereon.
To declare final dividend of Rs. 1.50/- (One Rupees Fifty Paisa Only) per share on equity shares for the financial year ended 31[st] March 2025.
To appoint a director in place of Mr. Nitin Garg (DIN: 08558736), who retires by rotation and being eligible, offers himself for re-appointment.

SPECIAL BUSINESS:

Ratification of Remuneration payable to Cost Auditor for Financial Year 2025-26

To consider and if thought fit, to pass the following resolution as an Ordinary Resolution:

“ RESOLVED THAT pursuant to the provisions of Section 148[3] and other applicable provisions, if any, of the Companies Act, 2013 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014 and Companies (Cost Records and Audit) Rules, 2014 (including any statutory modification(s) or re – enactment thereof, for the time being in force), the Company hereby ratifies the

remuneration of Rs.50,000/- (Rupees Fifty Thousand only) plus applicable taxes and reimbursement of travel and out of pocket expenses, to be paid to M/s A. B. Verma & Co., Cost Accountants, Nagpur (Firm Registration No. 102527/ Membership No. 31367), who have been appointed by the Board of Directors on the recommendation of the Audit Committee, as the Cost Auditors of the Company to conduct the audit of the cost records of the Company for the Financial Year ending March 31, 2026.

RESOLVED FURTHER THAT the Board (including any Committee thereof) be and is hereby authorized to do all such acts, deeds and things and take all such steps as may be necessary, proper or expedient to give effect to this resolution.”

5. Appointment of Mr. Madhav Kawde, Practising Company Secretary as Secretarial Auditor and fix their remuneration

To consider and if thought fit, to pass the following resolution as an Ordinary Resolution:

RESOLVED THAT pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014,Regulation 24A of the SEBI (Listing Obligations and Requirements) Regulations, 2015, relevant circulars issued by SEBI (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) and other applicable laws, if any, approval of the members of the Company be and is hereby accorded for the appointment of Mr. Madhav Kawde, Peer Reviewed Practicing Company Secretary (FCS-3251, CP No. 1892), as the Secretarial Auditors of the Company, for a term of five consecutive years, to hold office from the conclusion of this Annual General Meeting till the conclusion of 48[th] Annual General Meeting to be held in the year 2030, covering the period from the financial year ending 31[st] March 2026 till the financial year ending 31[st] March 2030, at such remuneration as may be determined by the Board of Directors of the Company (including its Committees thereof), from time to time, in consultation with the Secretarial Auditors.

By Orders of the Board of Directors Diffusion Engineers Limited

Place: Nagpur Date: June 30, 2025

Registered Office:

T- 5 & 6, MIDC, Hingana, Nagpur, Maharashtra, India, 440016

Sd/- Chanchal Jaiswal Company Secretary and Compliance Officer (Membership no. A67136)

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NOTES:

The Explanatory Statement pursuant to Section 102 of the Companies Act, 2013 (“the Act”), setting out all material facts concerning the special business under Item Nos. 4 and 5 of the accompanying Notice of the 43[rd] Annual General Meeting (“Notice”), is annexed hereto and forms part of this Notice. The Board of Directors of the Company at its meeting held on May 15,2025 and June 24, 2025 considered that the special business under Item Nos. 4 and 5 respectively being considered unavoidable, be transacted at the 43[rd] Annual General Meeting (43[rd] AGM) of the Company through Video Conferencing/ Other Audio-Visual Means (“VC/ OAVM”).
The Ministry of Corporate Affairs, Government of India (“MCA”) vide its General Circular Nos. 14/2020, 20/2020, 02/2021, 19/2021, 21/2021, 02/2022, 10/2022, 09/2023 and 09/2024 dated 8[th] April 2020, 5[th] May 2020, 13[th] January 2021, 8[th] December 2021, 14[th] December 2021, 5[th] May 2022, 28[th] December 2022, 25[th] September 2023 and 19[th] September 2024, respectively, and other circulars issued in this respect (“MCA Circulars”) allowed, inter-alia, to conduct AGM through VC/ OAVM facility in accordance with the requirements provided in paragraph 3 and paragraph 4 of the MCA General Circular No. 20/2020. The Securities and Exchange Board of India (“SEBI”) also vide its Circular No. SEBI/ HO/CFD/CFD-PoD-2/P/CIR/2024/133 dated 3[rd] October 2024 has provided certain relaxations from compliance with certain regulations of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”). In compliance with aforesaid MCA Circulars, aforesaid SEBI Circular, provisions of the Act and the Listing Regulations, the 43[rd] AGM of the Company is being conducted through VC/ OAVM facility, which does not require physical presence of members at a common venue. The deemed venue for the 43[rd] AGM shall be the Registered Office of the Company.
In terms of the MCA Circulars and SEBI Circular dated 3[rd] October 2024, the Notice of the 43[rd] AGM and Annual Report for the financial year ended 31[st] March 2025 (“Annual Report for the financial year 2024-25”), will be available on the Company’s website (www. diffusionengineers.com); BSE Limited (www.bseindia. com); National Stock Exchange of India Limited (www. nseindia.com); and Central Depository Services (India) Limited (www.evotingindia.com)
In terms of the MCA Circulars, physical attendance of members has been dispensed with therefore, there is no requirement of appointment of proxies. Accordingly, the facility of appointment of proxies by members under Section 105 of the Act will not be available for the 43[rd] AGM. However, in pursuance of Section 112 and Section 113 of the Act, representatives of the members may be appointed for the purpose of voting through remote e-Voting facility, for participation in the 43[rd] AGM through VC/ OAVM facility and e-Voting during the 43[rd] AGM. As the 43[rd] AGM is being held through

VC/ OAVM facility, the Route Map is not annexed to this Notice of the 43[rd] AGM.

Pursuant to the provisions of Section 108 of the Act read with Rule 20 of the Companies (Management and Administration) Rules, 2014, Secretarial Standard on General Meetings (SS-2) issued by the Institute of Company Secretaries of India (“ICSI”) and Regulation 44 of the Listing Regulations read with MCA Circulars, as amended, the Company is providing remote e-Voting facility to its members in respect of the business to be transacted at the 43[rd] AGM and facility for those members participating in the 43[rd] AGM to cast their vote through remote e-Voting system during the 43[rd] AGM. The members, whose names appear in the Register of Members/ List of Beneficial Owners as on July 10, 2025, are entitled for e-Voting on the resolutions set forth in this Notice of the 43[rd] AGM.

For this purpose, the Company has entered into an agreement with Central Depository Services (India) Limited (CDSL) for facilitating voting through electronic means, as the authorized e-Voting’s agency. The facility of casting votes by a member using remote e-voting as well as the e-voting system on the date of the AGM will be provided by CDSL.

The Members can join the AGM in the VC/OAVM mode 15 minutes before and after the scheduled time of the commencement of the Meeting by following the procedure mentioned in the Notice. The facility of participation at the AGM through VC/OAVM will be made available to atleast 1000 members on first come first served basis. This will not include large Shareholders (Shareholders holding 2% or more shareholding), Promoters, Institutional Investors, Directors, Key Managerial Personnel, the Chairpersons of the Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee, Auditors etc. who are allowed to attend the AGM without restriction on account of first come first served basis.
Attendance of the members participating in the 43[rd] AGM through VC/ OAVM facility using their login credentials shall be counted for the purpose of reckoning the quorum under Section 103 of the Act.
Electronic copy of the Notice of the 43[rd] AGM, interalia, indicating the process and manner of electronic voting (“e-Voting”) and electronic copy of the Annual Report for the financial year 2024-25 are being sent to all the members whose e-mail address is registered with the Company/ Depository Participant(s) for communication purposes.

In case any member is desirous of obtaining hard copy of the Annual Report for the financial year 2024-25 they may send a request from the registered e-mail address to the Company’s e-mail address at cs@ diffusionengineers.com mentioning their Folio no./ DP ID and Client ID.

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Additionally, in accordance with Regulation 36(1) (b) of the Listing Regulations, the Company is also sending a letter to members whose e-mail address is not registered with Company/ Depository Participant providing the exact web-link of Company’s website from where the Annual Report for financial year 202425 can be accessed.

Members whose KYC details (i.e. postal address with PIN code, mobile number, bank account details, PAN linked with Aadhaar etc.) or e-mail address is not registered/ updated with the Company or with their respective Depository Participant(s) [‘DPs’], and who wish to receive the Notice of the 43[rd] AGM, the Annual Report for the financial year 2024-25 and all other future communications sent by the Company from time to time, can get their KYC details and e-mail address registered/ updated by following the steps as given below:
a. Members holding shares in physical form by submitting duly filled and signed request letter in Form ISR-1 along with self-attested copy of the PAN linked with Aadhaar; and self-attested copy of any document in support of the address of the member (such as Aadhaar Card, Driving Licence, Election Identity Card, Passport etc.) and such other documents as prescribed in the Form ISR-1:
- i. if e-mail address is registered - by sending an e-mail at [email protected] from their registered e-mail address followed by mandatorily sending the physical copy of the same through post at the Registered Office of the Company or directly sending the Form ISR-1 along with the supporting documents to the Registrar and Share Transfer Agents, Bigshare Services Private Limited, (RTA); and
- ii. if e-mail address is not registered - by sending the physical copy of the same through post at the Registered Office of the Company or directly to the RTA.
b. Members holding shares in demat form may update their KYC details and e-mail address with their Depository Participant(s).

The Company strongly urges the members to register their e-mail address with the Company / Registrar and Share Transfer Agents or the Depository Participant(s), if you hold shares in physical form or demat form respectively.

Communication with regard for updation of KYC has been sent to all members holding shares in physical form at their registered address from time to time.

For members holding shares in physical form, SEBI vide its Master Circular SEBI/HO/MIRSD/POD-1/P/ CIR/2024/37 dated 7[th] May 2024 read with SEBI/HO/ MIRSD/POD-1/P/CIR/2024/81 dated 10[th] June 2024, as

amended from time to time, has mandated furnishing of PAN linked with Aadhaar and KYC details (i.e., postal address with PIN code, mobile number, bank account details, PAN linked with Aadhaar etc.). In case any of the aforesaid documents/ details are not available in the record of the RTA, the member shall not be eligible to lodge grievance or avail any service request from the RTA until they furnish complete KYC details. Further, with effect from 1[st] April 2024, any payment of dividend shall only be made in electronic mode to such members. The Company has made relevant intimations to the members from time to time.

Further, SEBI has mandated that securities of listed companies can be transferred only in demat form. Therefore, members are advised to dematerialize shares held by them in physical form for ease in portfolio management

For consolidation of share certificates, members holding shares in physical form, in more than one folio, with identical order of names, are requested to send the details of such folios together with the share certificates along with the requisite KYC documents for consolidating their holdings in one folio to the RTA. Requests for consolidation of share certificates shall only be processed in dematerialized form.

Nomination facility as per the provisions of Section 72 of the Act is available to individuals holding shares in the Company. Members may nominate a person in respect of all the shares held by them severally or jointly. Members holding shares in physical form and who have not yet registered their nomination are requested to register the same by submitting Form SH13. If a member desires to opt out or cancel the earlier nomination and record a fresh nomination, he/ she may submit the same in Form ISR-3 or SH-14 as the case may be. The said forms can be downloaded from the website of the RTA. Members holding shares in demat form may approach their respective Depository Participants to complete the nomination formalities.
Online Dispute Resolution (ODR) Portal was introduced by SEBI vide its Master Circular SEBI/HO/OIAE/OIAE_ IAD- 1/P/CIR/2023/145 dated 11[th] August 2023, which is in addition to the existing SCORES 2.0 portal which can be utilized by the investors and the Company for dispute resolution. Please note that the investors are advised to initiate dispute resolution through the ODR portal only if the Company does not resolve the issue itself or it is not resolved through SCORES 2.0 portal.
Members holding shares in physical form, who have not updated their mandate for receiving the dividends directly in their bank account(s) through Electronic Clearing Service or any other electronic means (“Electronic Bank Mandate”), may register their Electronic Bank Mandate to receive dividends directly into their bank account(s) electronically or any other means, by sending scanned copy of the

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following details/ documents to the Company at cs@ diffusionengineers.com

a. a signed request letter mentioning your name, folio number, complete address and following details relating to bank account in which the dividend is to be received:
i. Name and Branch of Bank and Bank Account type;
ii. Bank Account Number allotted by your bank after implementation of Core Banking Solutions; and
iii. 11-digit IFSC Code.
b. self-attested scanned copy of cancelled cheque bearing the name of the member(s) or first holder, in case shares are held jointly;
c. self-attested scanned copy of the PAN linked with Aadhaar; and
d. self-attested scanned copy of any document in support of the address of the member(s) (such as Aadhaar Card, Driving Licence, Election Identity Card, Passport), as registered with the Company.

For the members holding shares in demat mode, please update your Electronic Bank Mandate through your Depository Participant(s).

The Board of Directors has recommended final dividend of ₹ 1.5 per equity share of face value of ₹10.00 each for the financial year 2024-25, subject to the approval of the members at the 43[rd] AGM. The record date fixed for determining the entitlement of the members to the final dividend is 10[th] July 2025.
Pursuant to the relevant provisions of the Income Tax Act, 1961 (“the IT Act”), dividend income is taxable in the hands of the members and the Company is required to deduct tax at source (“TDS”) from dividend paid to the members at the rates applicable as per the IT Act read with tax treaty as may be applicable. In order to enable compliance with TDS requirements, members are requested to complete and/ or update their Residential Status, PAN details linked with Aadhaar, Category with their Depository Participant(s) or in case shares are held in physical form, with the Company by sending e-mail to the Company’s e-mail address at cs@ diffusionengineers.com or RTA’s e-mail address at info@ bigshareonline.com from the e-mail address registered with the Company / RTA. For details, members may refer to the “Communication regarding Tax Deducted at Source (TDS) on Dividend Distribution” appended to this Notice of the 43[rd] AGM. Please refer “Annexure-I” to this Notice of the 43[rd] AGM for details.

Non-resident shareholders can avail beneficial rates under tax treaty between India and their country of residence, as may be applicable, subject to providing necessary documents, i.e., No Permanent Establishment

and Beneficial Ownership Declaration, Tax Residency Certificate, Form 10F, and any other document which may be required to avail the tax treaty benefits by sending an e-mail to the Company’s e-mail address at [email protected] or RTA’s e-mail address at [email protected] from the e-mail address registered with the Company / RTA

Dividend, if any, approved by the members or declared by the Board of Directors of the Company from time to time, will be paid as per the mandate registered with the Company or with their respective Depository Participant(s).
Except for shares held in physical form, where KYC details (i.e. postal address with PIN code, mobile number, bank account details, PAN details linked with Aadhaar etc.) or e-mail address are not updated, in the event the Company is unable to pay the dividend to any member directly in their bank accounts through Electronic Clearing Service or any other electronic means, due to non-registration of the Electronic Bank Mandate or any other reasons whatsoever, subject to specific mandate otherwise issued by SEBI, the Company shall dispatch the dividend warrant/ Bankers’ cheque/ demand draft to such member, as soon as possible.
Pursuant to the provisions of Section 124 of the Act, Investor Education and Protection Fund Authority (Accounting, Audit Transfer and Refund) Rules, 2016 read with the relevant circulars and amendments thereto (“IEPF Rules”), the amount of dividend remaining unpaid or unclaimed for a period of seven years is required to be transferred to the Investor Education and Protection Fund (“IEPF”), constituted by the Central Government. During the year, the Company was not required to transfer any amount to Investor Education and Protection Fund (IEPF) as per the requirements of the IEPF Rules.
To prevent fraudulent transactions, members are advised to exercise due diligence and notify the Company/ RTA of any change in address or demise of any member as soon as possible. Members are also advised not to leave their demat account(s) dormant for long. Periodic statement of holding may be obtained from the concerned Depository Participant, and holdings should be verified from time to time.
Documents referred to in the accompanying Notice of the 43[rd] AGM and the Explanatory Statement shall be available at the Registered Office of the Company for inspection without any fee during normal business hours i.e. from 9:00 A.M. to 5:00 P.M. (IST) on all working days except Sunday, up to and including the date of the 43[rd] AGM of the Company.
The Register of directors and key managerial personnel and their shareholding, maintained under Section 170 of the Act, and the Register of Contracts or Arrangements in which the directors are interested,

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maintained under Section 189 of the Act, will be available electronically for inspection by the members during the AGM. Electronic copy of relevant documents referred to in the Notice and Explanatory Statement will be made available through email for inspection by the Members. A Member is requested to send an email to [email protected] for the same.

Details as required under Regulation 36 of the Listing Regulations and Secretarial Standard on General Meetings (SS-2) issued by the Institute of Company Secretaries of India, in respect of the appointment of Directors seeking appointment/ re-appointment at the 43[rd] AGM, forms an integral part of the Notice of the 43[rd] AGM. Requisite declarations have been received from the Directors seeking appointment/ re-appointment.
General instructions for accessing and participating in the 43[rd] AGM through VC/ OAVM facility and voting through electronic means including remote e-Voting: -
The remote e-Voting period will commence from Saturday, July 19, 2025 (9:00 A.M. IST) and end on Monday, July 21, 2025 (5:00 P.M. IST). During this period, members of the Company, holding shares either in physical form or in dematerialized form, as on July 10, 2025 (“Cut-off Date”), may cast their vote electronically. The e-voting module shall be disabled by CDSL for voting thereafter.
The voting right of members shall be in proportion to their share in the paid-up equity share capital of the Company as on the Cut-off Date. Once the vote on a resolution is cast by the member, the member shall not be allowed to change it subsequently.
Shareholders who have already voted prior to the meeting date would not be entitled to vote at the meeting.
A person who is not a member as on the Cut-off Date should treat this Notice of the 43[rd] AGM for information purpose only.
Pursuant to the provisions of Section 91 of the Act, the Register of Members and Share Transfer books of the Company will remain closed from 11[th] July 2025 to 22[nd] July 2025 (both days inclusive) for the purpose of the Annual General Meeting & Final Dividend, if approved by the Members.
Any person, who acquires shares of the Company and becomes member of the Company after the Company sends the Notice of the 43[rd] AGM by e-mail and holds shares as on the Cut-off Date, may obtain the User ID and password by sending a request to the Company’s e-mail address at cs@ diffusionengineers.com
A person, whose name is recorded in the Register of Members or in the Register of Beneficial Owners

maintained by the depositories as on the Cut-off Date only shall be entitled to avail the facility of remote e-Voting or casting vote through e-Voting system during the 43[rd] AGM.

During the 43[rd] AGM, the Chairman shall, after response to the questions raised by the members in advance or as a speaker at the 43[rd] AGM, formally propose to the members participating through VC/ OAVM facility to vote on the resolutions as set out in the Notice of the 43[rd] AGM and announce start of the voting process through the e-Voting system. After the members participating through VC/ OAVM facility, eligible and interested to cast votes, have cast the votes, the e-Voting will be closed with the formal announcement of closure of the 43[rd] AGM.
Mr. Amit Rajkotiya, Practicing Company Secretary (Membership No. FCS 5561) has been appointed as the Scrutinizer to scrutinize the remote e-Voting process and casting vote through the e-Voting system during the meeting in a fair and transparent manner.
The Scrutinizer shall after the conclusion of e-Voting at the 43[rd] AGM, first download the votes cast at the 43[rd] AGM and thereafter unblock the votes cast through remote e-Voting and shall make a consolidated Scrutinizer’s Report of the total votes cast in favour or against, invalid votes, if any, and whether the resolution has been carried or not, and such Report shall then be sent to the Chairman or a person authorized by him, who shall then countersign and declare the result of the voting forthwith.The result of the voting will be declared within the time stipulated under the applicable laws.
The Results declared along with the Report of the Scrutinizer shall be placed on the website of the Company at www.diffusionengineers.com and on the website of CDSL at www.evotingindia.com immediately after the declaration of Results by the Chairman or a person authorized by him. The Results shall also be immediately forwarded to the stock exchanges where shares of the Company are listed i.e., BSE Limited and National Stock Exchange of India Limited.

Instructions for members for Remote e-Voting are as under: -

Access through Depositories CDSL/NSDL e-Voting system in case of individual shareholders holding shares in demat mode.

In terms of SEBI circular no. SEBI/HO/CFD/CMD/ CIR/P/2020/242 dated December 9, 2020 on e-Voting facility provided by Listed Companies, Individual shareholders holding securities in demat mode are allowed to vote through their demat account maintained with Depositories

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and Depository Participants. Shareholders are advised to update their mobile number and email Id in their demat accounts in order to access e-Voting facility.

Pursuant to abovesaid SEBI Circular, Login method for e-Voting and joining virtual meetings for Individual shareholders holding securities in Demat mode CDSL/NSDL is given below:

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Type of shareholders Login Method
Individual Shareholders 1) Users who have opted for CDSL Easi / Easiest facility, can login through their existing user
holding securities in id and password. Option will be made available to reach e-Voting page without any further
Demat mode with authentication. The users to login to Easi / Easiest are requested to visit CDSL website www.
CDSL Depository cdslindia.com and click on login icon &My Easi New (Token) Tab.
2) After successful login the Easi / Easiest user will be able to see the e-Voting option for eligible
companies where the e-voting is in progress as per the information provided by company. On
clicking the e-voting option, the user will be able to see e-Voting page of the e-Voting service
provider for casting your vote during the remote e-Voting period or joining virtual meeting
& voting during the meeting. Additionally, there is also links provided to access the system
of all e-Voting Service Providers, so that the user can visit the e-Voting service providers’
website directly.
3) If the user is not registered for Easi/Easiest, option to register is available at CDSL website
www.cdslindia.com and click on login & My Easi New (Token) Tab and then click on
registration option.
4) Alternatively, the user can directly access e-Voting page by providing Demat Account Number
and PAN No. from a e-Voting link available on www.cdslindia.com home page. The system
will authenticate the user by sending OTP on registered Mobile & Email as recorded in the
Demat Account. After successful authentication, user will be able to see the e-Voting option
where the e-voting is in progress and also able to directly access the system of all e-Voting
Service Providers.
Individual Shareholders 1) If you are already registered for NSDL IDeAS facility, please visit the e-Services website of
holding securities in NSDL. Open web browser by typing the following URL: https://eservices.nsdl.com either on a
demat mode with Personal Computer or on a mobile. Once the home page of e-Services is launched, click on the
NSDL Depository “Beneficial Owner” icon under “Login” which is available under ‘IDeAS’ section. A new screen
will open. You will have to enter your User ID and Password. After successful authentication,
you will be able to see e-Voting services. Click on “Access to e-Voting” under e-Voting services
and you will be able to see e-Voting page. Click on company name or e-Voting service provider
name and you will be re-directed to e-Voting service provider website for casting your vote
during the remote e-Voting period or joining virtual meeting & voting during the meeting.
2) If the user is not registered for IDeAS e-Services, option to register is available at https://
eservices.nsdl.com. Select “Register Online for IDeAS “Portal or click at https://eservices.nsdl.
com/SecureWeb/IdeasDirectReg.jsp
3) Visit the e-Voting website of NSDL. Open web browser by typing the following URL: https://
www.evoting.nsdl.com/ either on a Personal Computer or on a mobile. Once the home page
of e-Voting system is launched, click on the icon “Login” which is available under ‘Shareholder/
Member’ section. A new screen will open. You will have to enter your User ID (i.e. your sixteen-
digit demat account number hold with NSDL), Password/OTP and a Verification Code as shown
on the screen. After successful authentication, you will be redirected to NSDL Depository site
wherein you can see e-Voting page. Click on company name or e-Voting service provider
name and you will be redirected to e-Voting service provider website for casting your vote
during the remote e-Voting period or joining virtual meeting & voting during the meeting
4) For OTP based login you can click on https://eservices.nsdl.com/SecureWeb/evoting/
evotinglogin.jsp. You will have to enter your 8-digit DP ID,8-digit Client Id, PAN No., Verification
code and generate OTP. Enter the OTP received on registered email id/mobile number and
click on login. After successful authentication, you will be redirected to NSDL Depository site
wherein you can see e-Voting page. Click on company name or e-Voting service provider
name and you will be re-directed to e-Voting service provider website for casting your vote
during the remote e-Voting period or joining virtual meeting & voting during the meeting.
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Type of shareholders Login Method
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Type of shareholders

Login Method

Individual Shareholders
(holding securities
in demat mode)
login through
theirDepository
Participants (DP)

You can also login using the login credentials of your demat account through your Depository
Participant registered with NSDL/CDSL for e-Voting facility. After Successful login, you will be able
to see e-Voting option. Once you click on e-Voting option, you will be redirected to NSDL/CDSL
Depository site after successful authentication, wherein you can see e-Voting feature. Click on
company name or e-Voting service provider name and you will be redirected to e-Voting service
provider website for casting your vote during the remote e-Voting period or joining virtual meeting
& votingduringthe meeting.

Important note: Members who are unable to retrieve User ID/ Password are advised to use Forget User ID and Forget Password option available at abovementioned website.

Helpdesk for Individual Shareholders holding securities in demat mode for any technical issues related to login through Depository i.e. CDSL and NSDL

Login type	Helpdesk details
Individual Shareholders holding securities in Demat mode withCDSL	Members facing any technical issue in login can contact CDSL helpdesk by sending a request [email protected] contact at toll free no. 1800 21 09911
Individual Shareholders holding securities in Demat mode withNSDL	Members facing any technical issue in login can contact NSDL helpdesk by sending a request [email protected] call at : 022 - 4886 7000 and 022 - 2499 7000

Access through CDSL e-Voting system in case of shareholders holding shares in physical mode and non-individual shareholders in demat mode.

(i) Login method for e-Voting and joining virtual meetings for Physical shareholders and shareholders other than individual holding in Demat form.
1) The shareholders should log on to the e-voting website www.evotingindia.com.
2) Click on “Shareholders” module.
3) Now enter your User ID
- a. For CDSL: 16 digits beneficiary ID,
- b. For NSDL: 8 Character DP ID followed by 8 Digits Client ID,
- c. Shareholders holding shares in Physical Form should enter Folio Number registered with the Company.
4) Next enter the Image Verification as displayed and Click on Login.
5) If you are holding shares in demat form and had logged on to www.evotingindia.com and voted on an earlier e-voting of any company, then your existing password is to be used.
6) If you are a first-time user follow the steps given below:

	For Physical shareholders and other than individual shareholders holding shares in Demat.
PAN	Enter your 10 digit alpha-numeric *PAN issued by Income Tax Department (Applicable for both demat shareholders as well as physical shareholders) • Shareholders who have not updated their PAN with the Company/Depository Participant are requested to use the sequence number sent byCompany/RTA or contact Company/RTA.
Dividend Bank Details ORDate of Birth (DOB)	Enter the Dividend Bank Details or Date of Birth (in dd/mm/yyyy format) as recorded in your demat account or in the company records in order to login. • If both the details are not recorded with the depository or company, please enter the member id / folio number in the Dividend Bank details feld.

(ii) After entering these details appropriately, click on “SUBMIT” tab.
(iii) Shareholders holding shares in physical form will then directly reach the Company selection screen. However, shareholders holding shares in demat form will now reach ‘Password Creation’ menu wherein they are required to mandatorily enter their login password in the new password field. Kindly note that this password is to be also used by the demat holders for voting for resolutions of any other company on which they are eligible to vote, provided that company opts for e-voting through CDSL platform. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential.

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(iv) For shareholders holding shares in physical form, the details can be used only for e-voting on the resolutions contained in this Notice.
(v) Click on the EVSN for Diffusion Engineers Limited.
(vi) On the voting page, you will see “RESOLUTION DESCRIPTION” and against the same the option “YES/NO” for voting. Select the option YES or NO as desired. The option YES implies that you assent to the Resolution and option NO implies that you dissent to the Resolution.
(vii) Click on the “RESOLUTIONS FILE LINK” if you wish to view the entire Resolution details.
(viii) After selecting the resolution, you have decided to vote on, click on “SUBMIT”. A confirmation box will be displayed. If you wish to confirm your vote, click on “OK”, else to change your vote, click on “CANCEL” and accordingly modify your vote.
(ix) Once you “CONFIRM” your vote on the resolution, you will not be allowed to modify your vote.
(x) You can also take a print of the votes cast by clicking on “Click here to print” option on the Voting page.
(xi) If a demat account holder has forgotten the login password then Enter the User ID and the image verification code and click on Forgot Password & enter the details as prompted by the system.
(xii) There is also an optional provision to upload BR/ POA if any uploaded, which will be made available to scrutinizer for verification.
(xiii) Additional Facility for Non – Individual Shareholders and Custodians –For Remote Voting only.
Non-Individual shareholders (i.e. other than Individuals, HUF, NRI etc.) and Custodians are required to log on to www.evotingindia.com and register themselves in the “Corporates” module.
A scanned copy of the Registration Form bearing the stamp and sign of the entity should be emailed to [email protected].
After receiving the login details a Compliance User should be created using the admin login and password. The Compliance User would be able to link the account(s) for which they wish to vote on.
The list of accounts linked in the login will be mapped automatically & can be delink in case of any wrong mapping.
It is Mandatory that, a scanned copy of the Board Resolution and Power of Attorney (POA) which they have issued in favour of the Custodian, if any, should be uploaded in PDF format in the system for the scrutinizer to verify the same.
Alternatively Non Individual shareholders are required mandatory to send the relevant
Board Resolution/ Authority letter etc. together with attested specimen signature of the duly authorized signatory who are authorized to vote, to the Scrutinizer and to the Company at the email address viz; cs@diffusionengineers. com, if they have voted from individual tab & not uploaded same in the CDSL e-voting system for the scrutinizer to verify the same.

INSTRUCTIONS FOR SHAREHOLDERS ATTENDING THE AGM THROUGH VC/OAVM & E-VOTING DURING MEETING ARE AS UNDER:

The procedure for attending meeting & e-Voting on the day of the AGM is same as the instructions mentioned above for e-voting.
The link for VC/OAVM to attend meeting will be available where the EVSN of Company will be displayed after successful login as per the instructions mentioned above for e-voting.
Shareholders who have voted through Remote e-Voting will be eligible to attend the meeting. However, they will not be eligible to vote at the AGM.
Shareholders are encouraged to join the Meeting through Laptops / IPads for better experience.
Further shareholders will be required to allow Camera and use Internet with a good speed to avoid any disturbance during the meeting.
Please note that Participants Connecting from Mobile Devices or Tablets or through Laptop connecting via Mobile Hotspot may experience Audio/Video loss due to Fluctuation in their respective network. It is therefore recommended to use Stable Wi-Fi or LAN Connection to mitigate any kind of aforesaid glitches.
Shareholders who would like to express their views/ ask questions during the meeting may register themselves as a speaker by sending their request in advance at least 7 days prior to meeting mentioning their name, demat account number/folio number, email id, mobile number at cs@diffusionengineers. com. The shareholders who do not wish to speak during the AGM but have queries may send their queries in advance 7 days prior to meeting mentioning their name, demat account number/folio number, email id, mobile number at cs@diffusionengineers. com. These queries will be replied to by the company suitably by email.
Those shareholders who have registered themselves as a speaker will only be allowed to express their views/ ask questions during the meeting.
Only those shareholders, who are present in the AGM through VC/OAVM facility and have not casted their vote on the Resolutions through remote e-Voting and are otherwise not barred from doing so, shall be eligible to vote through e-Voting system available during the AGM.

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If any Votes are cast by the shareholders through the e-voting available during the AGM and if the same shareholders have not participated in the meeting through VC/OAVM facility, then the votes cast by such shareholders may be considered invalid as the facility of e-voting during the meeting is available only to the shareholders attending the meeting.

PROCESS FOR THOSE SHAREHOLDERS WHOSE EMAIL/MOBILE NO. ARE NOT REGISTERED WITH THE COMPANY/DEPOSITORIES.

For Physical shareholders- please provide necessary details like Folio No., Name of shareholder, scanned copy of the share certificate (front and back), PAN (self attested scanned copy of PAN card), AADHAR (self attested scanned copy of Aadhar Card) by email to Company/RTA email id.
For Demat shareholders Please update your email id & mobile no. with your respective Depository Participant (DP)
For Individual Demat shareholders – Please update your email id & mobile no. with your respective Depository Participant (DP) which is mandatory while e-Voting & joining virtual meetings through Depository.

If you have any queries or issues regarding attending AGM & e-Voting from the CDSL e-Voting System, you can write an email to [email protected] or contact at toll free no. 1800 21 09911

All grievances connected with the facility for voting by electronic means may be addressed to Mr. Rakesh Dalvi, Sr. Manager, (CDSL) Central Depository Services (India) Limited, A Wing, 25[th] Floor, Marathon Futurex, Mafatlal Mill Compounds, N M Joshi Marg, Lower Parel (East), Mumbai - 400013 or send an email to [email protected] or call toll free no. 1800 21 09911.

EXPLANATORY STATEMENT IN RESPECT OF THE SPECIAL BUSINESS PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013

Item No. 4

In accordance with the provisions of Section 148 of the Companies Act, 2013 (“the Act”) read with the Companies (Audit and Auditors) Rules, 2014, as amended, the remuneration payable to the Cost Auditor is required to be ratified by the members of the Company.

M/s A. B. Verma & Co., Cost Accountants, (Firm Registration Number – 102527) is a firm of Practicing Cost Accountants based in Nagpur offering a wide spectrum of Services to its esteemed clientele. The firm has handled various assignments in Costing such as Cost audit, Certifications, Setting up costing systems, Cost consultancy, Costingbased turnaround strategies, etc. across diverse industry and client base.

On the recommendation of the Audit Committee, the Board of Directors, at its meeting held on May 15, 2025, approved the appointment of M/s A. B. Verma & Co., Cost Accountants, (Firm Registration Number – 102527), as Cost Auditor to conduct the audit of the cost records of the Company for the financial year 2025-26 at a remuneration of ₹ 50,000/(Rupees fifty thousand only) plus out of pocket expenses and applicable taxes, which is same as last year’s remuneration. Considering the limited scope of cost audit, time and resources deployed by the cost auditors, and in the opinion of the Board of Directors, the proposed remuneration payable would be fair and reasonable and do not in any way impair the independence and judgement of the Cost Auditor.

The Company has received written consent from M/s A. B. Verma & Co. confirming their eligibility and willingness to be appointed as the Cost Auditor of the Company. They have also confirmed that they meet the requirements to be appointed as Cost Auditor in accordance with the provisions of the Act and that they are not disqualified for appointment under the Act, the Cost and Works Accountants Act, 1959 (23 of 1959) and the rules or regulations made thereunder. They also confirmed that there are no pending proceedings against the audit firm or any partner of the audit firm with respect to professional matters of conduct. The appointment, if made, complies with the applicable provisions of the Act.

None of the Directors, Key Managerial Personnel of the Company and their relatives are, in any way, concerned or interested, financially or otherwise, in the resolution as set out at Item No. 4 of the accompanying Notice of the 43[rd] AGM. Accordingly, the Board of Directors recommends the aforesaid appointment and remuneration to the members for their approval by way of Ordinary Resolution as set out at Item No. 4 of the accompanying Notice of the 43[rd] AGM.

Item No. 5

In accordance with the provisions of Section 204 and other applicable provisions of the Companies Act, 2013, read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, (“the Act”) and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”), Mr. Madhav Kawde, Peer Reviewed Practicing Company Secretary (FCS-3251, CP No. 1892), has served as Secretarial Auditor of the Company for the financial year 2024-25.

Regulation 24A of the Listing Regulations, inter alia, provides that with effect from 1[st] April 2025, the Company is required to appoint a Practicing Company Secretary for not more than one term of five consecutive years or a firm of Practicing Company Secretaries as Secretarial Auditors for not more than two terms of five consecutive years, with the approval of the members at its Annual General Meeting (“AGM”) and such Secretarial Auditor(s) must be a peer reviewed company secretary and should not have incurred any of the disqualifications as specified under the

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Listing Regulations. Further, as per the said Regulation, any association of the individual or the firm as the Secretarial Auditor(s) of the Company before 31[st] March 2025 shall not be considered for the purpose of calculating the tenure of the Secretarial Auditor(s).

Mr. Madhav Kawde, Practicing Company Secretary (FCS-3251, CP No. 1892), has over 25 years of experience in Company Law, Secretarial and Corporate Governance, Legal Due Diligence, Listing Regulations, RBI Laws, and related advisory services. He is well-regarded for his expertise in handling secretarial audits and regulatory compliance for listed companies.

Taking into account the above requirements, along with an evaluation of proposals received by the Company and the consideration of factors such as technical skills, independence, industry experience, expertise, audit partners, audit team, quality of audit practices, and past association with the Company, the Board of Directors, on the recommendation of the Audit Committee, has approved the appointment of Mr. Madhav Kawde, Practicing Company Secretary (FCS-3251, CP No. 1892), as Secretarial Auditors of the Company for a term of five consecutive years, to hold office from the conclusion of this AGM till the conclusion of 48[th] AGM of the Company to be held in the Year 2030, covering the period from the financial year ending on 31[st] March 2026 till financial year ending 31[st] March 2030, subject to the approval of the members of the Company.

The Board of Directors in consultation with the Audit Committee and Mr. Madhav Kawde, fixed the remuneration at ₹ 3,00,000/- (Rupees Three Lakh only) per annum, plus any out of pocket expenses incurred by them in connection with the audit and other applicable taxes.

The Company has received written consent from Mr. Madhav Kawde confirming their eligibility and willingness to be appointed as the Secretarial Auditors of the Company. They have also confirmed that they meet the requirements to be appointed as Secretarial Auditors in accordance with the provisions of the Act and Listing Regulations, and they hold a valid certificate issued by the Peer Review Board of ICSI and that they have not incurred any of the disqualifications as specified by the SEBI. The appointment, if made, complies with the applicable provisions of the Act and Listing Regulations.

The Board of Directors in consultation with the Audit Committee and Mr. Madhav Kawde, may alter or vary the terms and conditions of appointment, including remuneration, in such manner and to such extent as may be mutually agreed.

None of the Directors, Key Managerial Personnel of the Company and their relatives are, in any way, concerned or interested, financially or otherwise, in the resolution set out at Item No. 5 of the accompanying Notice of the 43[rd] AGM. Accordingly, the Board of Directors recommends aforesaid appointment to the members for their approval by way

of an Ordinary Resolution as set out at Item No. 5 of the accompanying Notice of the 43[rd] AGM.

DETAILS IN TERMS OF REGULATION 36 OF THE SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015

Re-appointment of Mr. Nitin Garg (DIN: 08558736), as a Director (Item No. 3)

In terms of Section 152(6) of the Companies Act, 2013, (“the Act”), Mr. Nitin Garg (DIN: 08558736), shall retire by rotation at the 43[rd] AGM and being eligible, offers himself for re-appointment.

The Board on the recommendation of Nomination and Remuneration Committee at its meeting held on July 23, 2024 appointed Dr Nitin Garg (DIN: 08558736) as an Additional Director under the category of Non-Executive Director of the Company with effect from July 23, 2024. The appointment was regularised by the shareholders at the Annual General Meeting of the Company held on August 31, 2024, subject to retirement by rotation.

Dr. Nitin Garg aged 48 years, is promoter and Non-Executive Director of Company with Management & Leadership Skills. He holds a bachelor’sdegree in medicine and a bachelor’s degree in surgery from Nagpur University. He also holds a master’s degree in general surgery from Manipal Academy of Higher Education, a master’s degree in neurosurgery from National Institute of Mental Health and Neuro Sciences and has a Fellowship from the University of Pittsburgh. He is currently practicing as a neurosurgeon in Bhopal. He has founded BTSG Awareness Foundation, a non-profit organization and Cenos Health Care Private Limited.

Dr. Nitin Garg (DIN – 08558736), is a director/ designated partner in the following companies/LLPs/Body Corporate during the last three years:-

BTSG Awareness Foundation
Nowelco Industries Private Limited
N K Garg Foundation
Diffusion Hernon Adhesive and Sealant Private Limited
Devi Kiran Advisory LLP
Cenos Health Care Private Limited

Mr. Nitin Garg is also the member of Corporate Social Responsibility Committees and Stakeholders Relationship Committee of Diffusion Engineers Limited

Mr. Nitin Garg attended all nine Board Meetings during the financial year 2024-25.

Except for Mr. Nitin Garg, being the appointee, Mr. Prashant Garg and Ms. Chitra Garg who are brother and mother of Mr. Nitin Garg respectively, none of the Directors, Key Managerial Personnel and their relatives are, in any way concerned or interested, financially or otherwise, in the proposed resolution.

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Mr. Nitin Garg holds 74,03,221 equity shares of the company. He also holds 20,85,279 equity shares in capacity of Karta of N K Garg HUF.

Upon his re-appointment as a Director, Mr. Nitin Garg shall continue to hold office as a Non-Executive Director. Accordingly, the Board of Directors recommends his re-appointment for approval of the members by way of an Ordinary Resolution as set out at Item No. 3 of the Notice of the 43[rd] AGM.

By Orders of the Board of Directors Diffusion Engineers Limited

Place: Nagpur Date: June 30, 2025

Registered Office: T- 5 & 6, MIDC, Hingana, Nagpur, Maharashtra, India, 440016

Sd/- Chanchal Jaiswal Company Secretary and Compliance Officer (Membership no. A67136)

Annexure-I

(Refer Note 15 of the Notice of the 43[rd] AGM)

COMMUNICATION ON TAX DEDUCTED AT SOURCE (TDS) ON DIVIDEND DISTRIBUTION

Pursuant to the provisions of the Income Tax Act, 1961 (“the IT Act”), dividend income is taxable in the hands of the members and the Company is required to deduct tax at source (“TDS”) from dividend paid to the members at prescribed rates in the IT Act. Please take note of the below TDS provisions and information/document requirements for each member:

Individual
Hindu Undivided Family (HUF)
Firm
Limited Liability Partnership (LLP)
Association of Persons (AOP), Body of Individuals (BOI) or Artificial Juridical Person (AJP)
Trust

Section 1: For all members - Details that should be completed and /or updated, as applicable

All members are requested to ensure that the below details are completed and/or updated, as applicable, in their respective demat account/s maintained with the Depository Participant/s; or in case of shares held in physical form, with the Company, by 10[th] July 2025 (“Record Date”). Please note that these details as available on Record Date in the Register of members/ Register of Beneficial Ownership will be relied upon by the Company, for the purpose of complying with the applicable TDS provisions:

Domestic company
Foreign company.
IV. Email Address.
V. Address.

Section 2: TDS provisions and documents required, as applicable for relevant category of members

Members are requested to take note of the TDS rates and document(s), if any, required to be submitted to the Company by the Record Date their respective category, in order to comply with the applicable TDS provisions.

I. Valid Permanent Account Number (PAN).
II. Residential status as per the IT Act i.e. Resident or NonResident for FY 2025-26.
III. Category of the Member:
Mutual Fund
Insurance Company
Alternative Investment Fund (AIF) Category I and II
AIF Category III
Government (Central/State Government)
Foreign Portfolio Investor (FPI) /Foreign Institutional Investor (FII): Foreign Company
FPI/FII: Others (being Individual, Firm, Trust, AJP, etc.)
I. For Resident members:
i . Mutual Funds : No TDS is required to be deducted as per section 196(iv) of the IT Act subject to specified conditions. Self-attested copy of valid SEBI registration certificate needs to be submitted.
ii. Insurance companies : No TDS is required to be deducted as per section 194 of the IT Act subject to specified conditions. Self- attested copy of valid IRDA registration certificate needs to be submitted.
iii. Category I and II Alternative Investment Fund : No TDS is required to be deducted as per section 197A (1F) of the IT Act subject to specified

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conditions. Self-attested copy of valid SEBI registration certificate needs to be submitted.

iv. Recognised Provident funds: No TDS is required to be deducted as per Circular No. 18/2017 subject to specified conditions. Self- attested copy of a valid order from Commissioner under Rule 3 of Part A of Fourth Schedule to the IT Act, or Self-attested valid documentary evidence (e.g. relevant copy of registration,notification, order, etc.) in support of the provident fund being established under a scheme framed under the Employees’ Provident Funds Act, 1952 needs to be submitted.
v. Approved Superannuation fund: No TDS is required to be deducted as per Circular No. 18/2017 subject to specified conditions. Self-attested copy of valid approval granted by Commissioner under Rule 2 of Part B of Fourth Schedule to the IT Act needs to be submitted.
vi. Approved Gratuity Fund: No TDS is required to be deducted as per Circular No. 18/2017 subject to specified conditions. Self- attested copy of valid approval granted by Commissioner under Rule 2 of Part C of Fourth Schedule to the IT Act needs to be submitted.
vii. National Pension Scheme: No TDS is required to be deducted as per Sec 197A (1E) of the IT Act.
viii. Government (Central/State): No TDS is required to be deducted as per Sec 196(i) of the IT Act.
ix. Any other entity entitled to exemption from TDS: Valid self-attested documentary evidence (e.g. relevant copy of registration, notification, order, etc.) in support of the entity being entitled to exemption from TDS needs to be submitted.
x. Other resident members:
a) TDS is required to be deducted at the rate of 10% under u/s 194 of the IT Act.
b) No TDS is required to be deducted, if aggregate dividend distributed or likely to be distributed during the financial year to individual member does not exceed ₹10,000. Normal dividend/s declared in the preceding financial year 2024- 2025 would be considered as the basis to determine applicability of the said threshold for the entire financial year.
c) No TDS is required to be deducted on furnishing of valid Form 15G (for individuals, with no tax liability on total income and income not exceeding maximum amount which is not chargeable to tax) or Form15H (for individual above the age of 60 years with no tax liability on total income). Please note that all fields are mandatory to be filled up and the Company may at its sole

discretion reject the form if it does not fulfil the requirement of law and company policies. Shareholders should submit fresh declarations for any subsequent tranches of Dividend declared during the year in event of any change to the earlier submitted Form 15G/15H to the Company for the same financial year. In event of no intimation of subsequent change to the Company in following tranches, earlier submitted Form 15G/15H for the applicable financial year will be considered by the Company.

  - d) Please also note that valid Permanent Account Number (‘PAN’) will be mandatorily required

  - e) TDS to be deducted at higher rate in case of non-linkage of PAN with Aadhaar:

  - f) As per Section 139AA of the Income Tax Act, every person who has been allotted a PAN and who is eligible to obtain Aadhaar, shall be required to link the PAN with Aadhaar. In case of failure to comply to this, the PAN allotted shall be deemed to be invalid/inoperative and tax shall be deducted at the rate of 20% as per the provisions of section 206AA of the Act. The Company will be using functionality of the Income-tax department for the above purpose. Provisions are effective from 1[st] July 2023. TDS is required to be deducted at the rate of 20% u/s 206AA of the IT Act, if valid PAN of the member is not available.

  - g) TDS is required to be deducted at the rate prescribed in the lower tax withholding certificate issued u/s197 of the Act, if such valid certificate is provided.

II. For Non-resident members:
i. Any entity entitled to beneficial rate / exemption from TDS: Valid self-attested documentary evidence(e.g. relevant copy of registration, notification, order, etc. by Indian tax authorities) in support of the entity being entitled to beneficial rate / exemption from TDS needs to be submitted.

ii. Other non-resident members:

a) TDS is required to be deducted at the rate of 20% (plus applicable surcharge and cess) u/s 196D of the IT Act (For FPI and FII) and u/s 195 of the IT Act for other non-resident members.
b) Member may be entitled to avail lower TDS rate as per Double Taxation Avoidance Agreement (DTAA) between India and the country of tax residence of the member, on furnishing the below specified documents applicable for the relevant period:-

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1) Self-attested copy of PAN. In case PAN is not available, provide details as per Rule 37BC of the Income-Tax Rules, 1962;
2) Self-attested copy of valid Tax Residency Certificate (TRC) obtained from the tax authorities of the country of which the member is a resident;
3) Self-declaration in Form 10F (it should be noted that vide notification number 03/2022 issued by the CBDT, it has been mandated to issue Form 10F electronically for it to be considered valid); and
4) Self-declaration on letterhead of having no Permanent Establishment in India, Beneficial ownership of shares and eligibility to claim treaty benefits (as per Annexure A to this Communication).
c) TDS is required to be deducted at the rate prescribed in valid lower tax withholding certificate issued u/s 197 of the IT Act, if such valid certificate is provided.

Details and/ or documents as mentioned above in Section 1 and Section 2, as applicable to the Member, need tobe sent, duly completed and signed, through registered e-mail address of the Member with PAN being mentioned in the subject of the e-mail to reach cs@diffusionengineers. com by Record Date. Please note that no communication in this regard, shall be accepted post Record Date.

Please note that the Company is not obligated to apply the beneficial DTAA rates at the time of tax deduction/withholding on dividend amounts. Application of beneficial DTAA rate shall depend upon the completeness and satisfactory review of the documents submitted.

Section 3: Other general information for the members:

I. For all self-attested documents, members must mention on the document “certified true copy of the original”. For all documents being sent / accepted by e-mail, the Member undertakes to send the original document/s on the request by the Company.
II. TDS will be deducted based on details of registered member only. Once TDS is deducted in the name of Registered members/ Beneficial Owners as appearing on Record Date, no transfer of such TDS in the name of anotherperson shall be entertained under any circumstances.
III. TDS deduction certificate will be sent to the members’ registered e-mail address in due course. Shareholders will also be able to see the credit of TDS in Form 26AS,

which can be downloaded from their e-filing account at https://www.incometax.gov.in/iec/foportal

IV. Surcharge rates applicable for the financial year 2025 - 26 for non-residents:
(i) Individual, HUF, AOP, BOI, AJP, Trust

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Dividend Income Rate
Upto ₹50 lakhs Nil
Income exceeds ₹ 50 lakhs but 10%
does not exceed ₹ 1 crore
Income exceeds ₹ 1 crore 15%
(ii) Co-operative society or Firm, registered under
applicable Indian law
Aggregate Income Rate
Income exceeds ₹ 1 crore 12%
(iii) Foreign company
Aggregate Income Rate
Income exceeds ₹ 1 crore but 2%
does not exceed ₹ 10 crores
Income exceeds ₹ 10 crores 5%
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V. Normal dividend(s) declared in the preceding financial year 2024–25 would be considered as the basis to determine applicability of the surcharge rate.
VI. Health and Education Cess of 4% is applicable for non-residents.
VII. Shareholders holding shares under multiple accounts under different status/ category (eg. Resident and NonResident) and single PAN, may note that, higher of the tax as applicable to the status in which shares held under a PAN will be considered on their entire holding in different accounts.
VIII. Equity shares of the Company, which were transferred by the Company in the name of Investor Education and Protection Fund (‘IEPF’) in terms of Section 124(6) of the Companies Act 2013 and Rules framed thereunder, the TDS shall be deducted basis the available details of the underlying members.
IX. Application of TDS rate is subject to necessary due diligence and verification by the Company of the member details as available in Register of members on the Record Date, documents, information available in public domain, etc. In case of ambiguous, incomplete or conflicting information, or the valid information/documents not being provided, the Company will arrange to deduct tax at the maximum applicable rate.
X. In case TDS is deducted at a higher rate, an option is still available with the member to file the return of income and claim an appropriate refund, if eligible. Once deducted, no claim shall lie against the company in relation to TDS.

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XI. The Company may make adjustments for the past withholding tax on dividend paid to the shareholder, as may be necessary.
XII. Income tax rates as per the latest Finance Act shall be used for determining the income-tax payable in respect of the total income of a person (being individual/ HUF/ AOP/ BOI/ AJP). The prescribed rates are applicable to all specified person by default.

The company is required to declare in its TDS return, “if the deductee is opting out of this new regime u/ s115BAC(1A). As a default option, the company will be opting as “No” for all shareholders to whom this section applies. In case, you wish to opt out of this new regime (shift to old tax regime), please provide declaration enclosed as Annexure B. Accordingly, on receipt of declaration with complete details, the company will update the response as “Yes” in its TDS return. Please

note that no changes will be made if any declaration is received subsequent to record date.

XIII. In the event of any income tax demand (including interest, penalty, etc.) arising from any misrepresentation, inaccuracy or omission of information provided / to be provided by the member/s, such member/s will be responsible to indemnify the Company and also, provide the Company with all information / documents and cooperation in any appellate proceedings.

Note:

Above communication on TDS sets out the provisions of law in a summary manner only, as on the date of the communication, and does not purport to be a complete analysis or listing of all potential tax consequences. Members should consult with their own tax advisors for the tax provisions applicable to their particular circumstances.

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Annexure A

FORMAT FOR DECLARATION FOR CLAIMING BENEFITS UNDER DTAA

Refer Section 2(II)(ii)(b)(4) of above Communication on TDS on Dividend Distribution

Date:______

To, Diffusion Engineers Limited

T-5 & 6, MIDC, Hingana, Nagpur, Maharashtra, India, 440016 E-mail - [email protected]

Subject: Declaration for eligibility to claim benefit under Agreement for Avoidance of Double Taxation between Government of India and Government of ....................................

............................ (“DTAA”), as modified by Multilateral Instrument (“MLI”), if applicable

With reference to above, I/We wish to declare as below:

I / We, , having permanent account number (PAN) under the Indian Income tax Act, ............................................................... , and holding ......................................... number of shares of the Company under demat account number/ folio number ......................... as on the record date, am / are a tax resident of ..................... ...................................... in terms of Article

4 of the DTAA as modified by MLI (if applicable) and do not qualify as a ‘resident’ of India under section 6of the Indian Income-tax Act, 1961 (“the IT Act”). A copy of the valid tax residency certificate for …………… , which is valid as on the Record Date, is attached herewith. We request you to provide the benefit of the said DTAA.

I/We am/are eligible to be governed by the provisions of the DTAA as modified by MLI (if applicable), in respect of the dividend income and meet all the necessary conditions to claim treaty rate.
I/We am/are the legal and beneficial owner of the dividend income to be received from the Company.
I/We do not have a Permanent Establishment (“PE”) in India in terms of Article 5 of the DTAA as modified by MLI(if applicable) or a fixed base in India and the amounts paid/payable to us, in any case, are not attributable to the PE or fixed base, if any, which may have got constituted otherwise.
I/We do not have a PE in a third country and the amounts paid/payable to us, in any case, are not attributable toa PE in third jurisdiction, if any, which may have got constituted otherwise.
I/We do not have a Business Connection in India according to the provision of section 9(1)(i) of the Act and the amounts paid/payable to us, in any case, are not attributable to business operations, if any, carried out in India.
I/We confirm that my affairs/affairs of_________ were arranged such that the main purpose or the principal purpose thereof was not to obtain tax benefits available under the applicable tax treaty.
Further, our claim for relief under the tax treaty is not restricted by application of Limitation of Benefit clause, ifany, thereunder.
We confirm that we are aware of the necessary compliances under the Indian domestic tax laws and would comply with the said compliance requirements.

I/We hereby certify that the declarations made above are true and bonafide. In case in future, any of the declarations made above undergo a change, we undertake to promptly intimate you in writing of the said event. You may consider the above representations as subsisting unless intimated otherwise.

I/we in the event of any income tax demand (including interest, penalty, etc.) arising from any misrepresentation,inaccuracy or omission of information provided by me, I will be responsible to pay and indemnify such income tax demand (including interest, penalty, etc.) and provide the Company with all information / documents that may be necessary and co-operate in any proceedings before any income tax / appellate authority.

For Authorised Signatory

Innovative Superconditioning Solutions

Annexure B

Format for Declaration for opting out of New Regime u/s 115BAC(1A)

(Opting for the Old Tax Regime)

Date:_____

To,

Diffusion Engineers Limited

T-5 & 6, MIDC, Hingana, Nagpur, Maharashtra, India, 440016

E-mail - [email protected]

Subject: Declaration for opting out of New Tax Regime u/s 115BAC(1A) [Shifting to the Old Tax Regime]

This is to certify that I ………………….[name of individual]/ Karta of Hindu undivided family (HUF)................[name of HUF]/ ......................... [others], on behalf of........................... [name and address of the individual/ HUF/others, having Permanent Account Number (PAN) …………………….. do hereby, exercise the option for taxability under the old tax slabs/regime and do not wish to opt for new tax regime prescribed under section 115BAC(1A) of the Income Tax Act for the financial year 2025-26.

The details for this purpose are given below:

(i) Name of the individual/ HUF/ other* :
(ii) PAN :
(iii) Address :
(iv) Date of Birth/ Incorporation* : dd/mm/yyyy

I undertake to ensure that old regime is opted in manner as may be prescribed before filing my return of income.

Further, I also understand that option once exercised, will be valid for entire financial year 2025-26 and cannot be changed subsequently during the course of the year for the purpose of reporting in TDS return by the deductor.

*Delete whichever is inapplicable.

Yours faithfully,

Signature of Individual/ Karta of HUF / Authorized Representative …………………………

Name ……………………………………………..

Designation……………………………………..

Date: ……………………………………………..

Place: ……………………………………………..

Note: This form shall be signed by the individual/ Karta of the HUF/ Authorized Representative

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STRENGTH IN EVERY SPARK

A strong foundation for a thriving future

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DIFFUSION ENGINEERS LIMITED

ANNUAL REPORT 2024-25

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CONTENT
Strength in Every Spark	1
Statement from the Chairman's Desk	2
About Us	6
What Sets Difusion Apart	16
Our Products	18
Key Performance Indicators	24
Risk Management	26
Board of Directors	28
Corporate Social Responsibility	30
Management Discussion & Analysis	34
Corporate Information	52
Board's Report	53
Corporate Governance Report	87
Standalone Financial Statements	112
Consolidated Financial Statements	159

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Every spark tells a story of strength in the making. Each one carries the weight of precision, purpose, and power. Behind every gleam of molten metal lies strength— born from skill, forged by fire. In every joint we create, we bond more than steel— we unite trust, durability, and resilience. We craft the backbone of progress, forging structures that endure, powered by strength in every spark. In doing so, every deliverable has become a testament, and each client, a brand ambassador. At , we are not Diffusion Engineers just fusing metal—we are forging long-term partnerships. With every spark, we illuminate limitless horizons, laying strong foundations for a future that stands tall, lasts long, and inspires confidence.

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As a pragmatic and future-focused organisation, we recognise that past achievements do not guarantee future success. Accordingly, we remain vigilant in identifying emerging opportunities, embracing innovation to stay ahead of the curve, adapting to dynamic market conditions, and unlocking new avenues for sustainable growth.

Dear Stakeholders,

I am truly honoured to connect with you as the Chairman of Diffusion Engineers. Having been associated with the company for nearly 22 years, engaging with you in this capacity always remains a privilege.

Reflecting on our journey in the last fiscal year, I am deeply grateful for the resilience and dedication of my team that have guided the Company through a dynamic global landscape. Our steadfast commitment to innovation, operational excellence, and sustainable growth has strengthened our foundation, enabling us to create enduring value for our stakeholders. Commencing on a new journey, with a clear vision and unwavering resolve, we stand ready to embrace the opportunities within India’s vibrant economic transformation.

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Statutory Reports Financial Statements

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A NEW BEGINNING

I warmly welcome our new shareholders and express our sincere gratitude to the investor community for their confidence in Diffusion Engineers’ vision and growth journey. Your trust reinforces our commitment and inspires us to strive towards continued excellence and accelerated progress.

We are proud to share that Diffusion Engineers was successfully listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on 4th October 2024. The listing was met with enthusiastic investor response, resulting in substantial gains and signalling strong market confidence. This milestone significantly enhances our financial position, empowering us to invest further in infrastructure, innovation, and strategic expansion.

A BROADER PERSPECTIVE

In FY25, India continued to distinguish itself globally through a stable democratic framework and a progressive, outward-looking foreign policy. This foundation has enabled the country to navigate geopolitical tensions and supply-chain disruptions more effectively than many of its emerging market counterparts.

The Government’s ambitious long-term roadmap, Viksit Bharat @ 2047, envisions transforming India into a US$5-trillion economy, anchored by robust high single-digit GDP growth and sustained industrial expansion. The manufacturing sector has steadily regained strategic prominence, with its contribution to Gross Value Added (GVA) rising to 17% in FY25.

Record-breaking public infrastructure investments further supported this industrial resurgence. The momentum is set to continue, with the Union Budget 2025–26 allocating ₹11.21 lakh crore toward core capital expenditure, demonstrating a strong commitment to infrastructure-led growth.

Our core end markets—cement, steel, power and engineering —are witnessing sustained momentum, underpinned by significant capacity expansions and improved utilisation levels nationwide. India’s cement industry has entered a renewed expansionary cycle, with expectations of strong volume growth. Concurrently, the country has reinforced its position as

the world’s second-largest producer of steel, reflecting the sector’s growing scale and resilience.

Meanwhile, the ongoing energy transition continues to gather pace. Strategic government initiatives—such as the National Infrastructure Pipeline and the Make in India programme—are providing robust support to domestic demand across the heavy engineering and manufacturing landscape. These structural tailwinds are creating a fertile environment for long-term growth and sectoral transformation.

CORPORATE FINANCIALS

FY25 marked a significant milestone for the Company, reflecting robust operational and financial performance. Consolidated net revenue rose by 20.51% year-on-year to ₹3,351.96 million. EBITDA (excluding other income) reached ₹470.76 million, representing a 21.12% increase, while Profit After Tax (PAT) grew by an impressive 17% year-on-year to ₹360.40 million.

This strong performance was anchored by sustained demand in core sectors, timely execution of highvalue projects, and deeper market penetration. EBITDA margins improved to 14.63%, driven by a favourable product and customer mix, disciplined cost management, and reduced direct expenses.

In line with our commitment to stakeholder value, the Board has recommended a 15% final dividend for FY25. Furthermore, we are in the process of setting up an ESOP scheme to align employee interests with long-term value creation and attract top talent to drive the next phase of growth.

OPERATIONAL PERFORMANCE

We sustained a healthy average capacity utilisation of approximately 85% during the year. We made capital investments to strengthen our production and machining infrastructure aligned with our strategic growth objectives.

Key initiatives included commissioning of an additional flux-cored wire manufacturing line and the installation of advanced wire-drawing machine at our Nimji facility. Additionally, we upgraded our heavy engineering and component machining capabilities by deploying state-of-the-art CNC

Annual Report 20 24 - 25

We are also broadening our presence in strategic sectors such as Indian Railways, Nuclear, Mining, and Oil & Gas. Notably, we recently secured a prestigious order from the Heavy Vehicle Factory for the supply of Flux Cored Wires, reinforcing our credentials in high-specification manufacturing.

Horizontal-Lathe Machine and a 6.5-metre swing Vertical Lathe Machine. These enhancements significantly expand our ability to manufacture larger, high-precision components and better serve evolving customer requirements. We are also in the process of commissioning a CNC Horizontal-Boring Machine(X8m; Y-3.5m; Z+W-2m).

Looking ahead, we see substantial opportunities across various sectors. Our strategic forward integration—from special-purpose electrodes to flux-Cored wires, wear plates, wear parts, and heavy engineering equipment—positions us as a comprehensive solution provider, effectively serving as a one-stop shop for our customers.

NOTABLE ACHIEVEMENT

We successfully manufactured and exported a rotor assembly for a Russian client, engineered as a singlepiece fabrication and reassembled on-site under extreme conditions at -20°C, demonstrating our exceptional fabrication standards and operational reliability in challenging environments.

In the cement sector, we executed a turnkey replacement of an 18.6-meter kiln shell within a month—a highly complex undertaking rarely performed outside OEM capabilities in India, further underscoring our technical expertise and execution excellence in critical industrial applications.

In the steel sector, we successfully executed the supply of 300+ continuous casting roller assemblies involving complex machining, hard facing and assembly. These items operate in extremely harsh industrial conditions and are critical components needed in steel manufacturing.

UPCOMING OPPORTUNITIES ON THE HORIZON

In line with evolving market preferences, there is growing demand for ready-to-fit and complete solutions. This trend is driving accelerated growth in our heavy engineering and wear parts business. Our deep expertise in metallurgy and materials science, rooted in our welding alloy legacy, enables us to develop durable, high-performance wear parts that enhance uptime and reliability for process plants— directly addressing customers’ need to minimise operational disruptions and profit loss.

We are also broadening our presence in strategic sectors such as Defence, Indian Railways, Nuclear, Mining, and Oil & Gas. Notably, we recently secured a prestigious order from the Heavy Vehicle Factory for the supply of Flux Cored Wires, reinforcing the credentials of our high performance products.

Our industrial services portfolio, which includes super-conditioning, critical breakdown repairs, and kiln alignment, remains essential even during cyclical downturns in capital expenditure, as customers prioritise operational continuity and asset performance. We anticipate this segment will contribute increasingly to our revenue mix in the coming years.

OUTLOOK

Moving forward, we maintain a highly optimistic and ambitious outlook for the financial year 2025-26 and beyond, envisioning a phase of considerable

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Statutory Reports Financial Statements

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Domestically and globally, our focus remains on enhancing product and customer mix, with cost efficiency as a central pillar to drive margin improvement. We anticipate accelerated growth in all the three offerings – Anti-wear & Welding Consumables, Wear Plates & Wear Parts and Heavy Engineering.

Our in-house DSIR-recognised R&D laboratory will continue to spearhead innovation, enabling the development of high-performance, applicationspecific products tailored to evolving industry requirements. We are also expanding our offerings in anti-wear and welding consumables and actively developing advanced grinding rollers for the cement sector.

growth propelled by strategic capacity expansion, deeper market penetration, and an expanded range of product and service offerings. The company anticipates a future characterised by a focus on evolving into a more comprehensive solutions provider for core industrial clients.

We are also strengthening our distribution network by signing a Memoranda of Understanding with over 50 dealers across India to reinforce market reach. This and our strategically deployed sales force ensure extensive coverage and prompt customer engagement.

EXCITING PLANS FOR FY26

In such a scenario, our strategy for the coming year is anchored on aggressive capacity expansion, product leadership, and deepening market penetration.

From a sustainability standpoint, we are investing in a 1.1 MW captive rooftop solar plant at our Nimji facility. This initiative reaffirms our commitment to energy efficiency and environmental responsibility.

As part of our long-term strategic vision, we have committed to a capital expenditure programme that will enable us to nearly double our production capacity across all three key business segments— Heavy Engineering, Wear Parts & Plates, and welding Consumables.

WRAPPING UP

Ultimately, none of our accomplishments would have been feasible without the unwavering support of our stakeholders—employees, customers, partners, and communities. Your trust and commitment have constituted the foundation of our success, and we remain resolutely devoted to maintaining the highest standards of corporate responsibility and transparency.

A new manufacturing complex in Nagpur at B33 MIDC Hingna and at Nimji is currently under development and is slated to commence operations in this financial year. The B33 facility will be dedicated to producing special-purpose electrodes and wire strips. The expansion of the Nimji facility will enable us to significantly increase our capacity to manufacture wear parts and heavy engineering equipment.

I sincerely thank each of you, our esteemed shareholders, for your unwavering confidence in our organisation. Together, we commence a new chapter replete with promise and opportunity, propelled by a collective dedication to excellence and value creation.

Internationally, we are in the process of incorporating a wholly owned subsidiary, Diffusion Engineers Middle East, in the UAE to provide service and manufacturing facility in Abu Dhabi. These initiatives are part of a broader strategy to strengthen our international footprint by extending our supply and service capabilities outside India. The Abu Dhabi plant is expected to be operational shortly.

Warm regards,

Prashant Garg

Chairman & Managing Director

Annual Report 20 24 - 25 5

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We are a proxy to India’s large and growing Engineering space.

We are a pioneer in wear solutions and a leader in heavy engineering excellence. We serve marquee corporate brands in India and key industrialised nations worldwide.

Our competencies span from manufacturing welding rods to developing heavy engineering equipment.

We are Diffusion Engineers Limited

Established in 1982 by Mr. N. K. Garg, Diffusion Engineers Limited specialises in welding consumables, wear plates, and heavy engineering equipment.

Headquartered in Nagpur, Maharashtra, the Company manufactures electrodes, flux-cored wires, wear plates, and heavy machinery, focusing on superconditioning for enhanced equipment durability at its facilities around the city.

In addition to serving leading conglomerates in India, the Company enjoys an expansive global footprint across 30+ nations with subsidiaries in Singapore, Turkey, Philippines and joint ventures in the UK and Malaysia.

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Statutory Reports Financial Statements

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Vision Statement

Dedicated to driving the World’s Engineering progress with our solutions that transform industries. By building trust and absolute reliability, we aim to be the go-to partner for industries facing highstakes and complex challenges where success is paramount.

Mission Statement

We empower the industrial sector to overcome wear, reduce downtime, and future-proof their operations.

By mastering the science of superconditioning, metallurgy, and heavy engineering, we deliver top-tier welding consumables, proprietary alloys, wear parts, services and fully integrated solutions — all under one roof. Driven by speed, precision, and customer centricity, we don’t just solve problems — we engineer possibilities.

Core Values

Reliability

Our promise is our performance.

We show up, follow through, and stand firm — for clients, teams, and vendors alike.

Precision

Excellence is engineered, not improvised.

Every detail matters — in design, execution, and delivery.

Speed with Clarity

Fast, but never frantic.

We act promptly — and with purpose, clarity, and structure.

Integrity & Sustainability

We do what’s right, not what’s easy. Standards, ethics, sustainability and safety are non-negotiable.

Growth Mindset

The future is built by learners.

We stretch our thinking, question limits, and lead with curiosity.

OUR RESPECT WITH PROVEN PARTNERSHIPS

10,300 projects completed

Across Cement, Steel, Power, Mining, Engineering, Oil & Gas, Defence, Sugar Industries

84 +

Established Clients

Strong, long-standing partnerships with global players across geographies

OUR FOCUS

We manufacture welding consumables, wear plates, wear parts, and heavy engineering equipment for core industries

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Cement Sugar	Steel Power Engineering Defence Mining Oil & gas

Annual Report 20 24 - 25 7

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Statutory Reports Financial Statements

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Annual Report 20 24 - 25

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UNIT I

UNIT II

Produces Special Purpose welding electrodes Area: 2,000 sq. mtrs. Operational since 1994

Produces Flux cored wires, wear plates and wear parts Area: 13,068 sq. mtrs. Operational since 2000

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UNIT III

UNIT IV

Produces Anti-wear Consumables Area: 1,000 sq. mtrs. Operational since 2015

Produces Flux cored wires, wear plates and heavy engineering machinery Area: 89,197* sq. mtrs. Operational since 2016

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*The total area stands reduced to the extent of approx. 3,191 sq. mtrs. pursuant to the acquisition of land by the National Highway Authority of India for public purposes in 2018.

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OUR CERTIFICATIONS
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UPCOMING FACILITY

Area: 10,850 sq. meter. Status: Work-in-progress To commence: within FY26 Products: Special-purpose electrodes and wire strips

Area: 72,029.84 sq. meter. Status: Work-in-progress To commence: within FY26 Products: Wear Plates, flux cored wires and heavy engineering equipment

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ISO 9001:2015 ISO 14001:2015 ISO 45001:2018

Annual Report 20 24 - 25

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D 293.86 30+ 17% Million Nations Revenue Growth Revenue from Global Presence (5-yr CAGR) Exports in FY25

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Statutory Reports Financial Statements

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Manufacturing plant in Nagpur, India
Export to other countries
FY21 FY22 FY23 FY24 FY25
EXPORT INCOME
( D Million)
358.07
293.86
263.49
188.18
161.74
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Annual Report 20 24 - 25

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BUILDING UP

1994

1995

SPREADING WINGS 2012

1997-2000

2013

GETTING STARTED

2006 - 2011

1982-93

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Statutory Reports Financial Statements

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2024

2014

2015

2016

2022

Annual Report 20 24 - 25

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DIVERSIFIED PRODUCT PORTFOLIO AND FORWARD INTEGRATION

The Company provides a comprehensive and diversified range of products, including specialised welding consumables, wear plates and components, and heavy engineering equipment. Over time, it has successfully executed a forward integration strategy—progressing from the production of welding electrodes to the development of flux-coated wires, wear-resistant solutions, and large-scale engineering equipment. This transformation into a one-stop solutions provider has enhanced its credibility and enabled it to deliver integrated offerings that meet complex and evolving customer requirements.

METALLURGICAL & MATERIAL EXPERTISE

With a strong foundation in welding alloy and consumable design, the Company brings deep expertise in metallurgy and materials science. This specialised knowledge enables the development of comprehensive, value-driven solutions in a quick and cost effective way increasing operational reliability and equipment uptime in process plants.

STRONG R&D CAPABILITIES

Diffusion operates an in-house, DSIR-certified R&D laboratory recognised by the Department of Scientific and Industrial Research. This state-of-the-art facility supports the ideation and development of innovative solutions while enabling rigorous product testing to meet the stringent tolerance requirements of leading domestic and international clients.

CAPACITY & CAPABILITIES

Over the years, the Company has made significant investments to expand manufacturing capacities and enhance technological capabilities. These strategic initiatives have not only broadened the Company’s growth opportunities but have also improved speed and responsiveness in serving its customers.

CERTIFICATIONS AND ACCREDITATIONS

The Company holds accreditation from the National Accreditation Board for Testing and Calibration Laboratories (ISO/IEC 17025:2017) and certifications for Environment Management System (EMS), Quality Management System (QMS)-ISO 9001:2015, and Occupational Health and Safety Management systems (ISO 45001:2018 and ISO 14001:2015)45. These certifications underscore its commitment to quality and operational excellence.

Statutory Reports Financial Statements

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STRATEGIC MANUFACTURING LOCATION

The Company’s manufacturing facilities are strategically located in Nagpur, leveraging its central connectivity to key transportation networks. This geographic advantage enhances logistical efficiency, shortens transit durations, and optimises distribution costs, enabling seamless service delivery across Indian and global markets.

GLOBAL FOOTPRINT

The Company possesses a significant global footprint, exporting to over thirty countries, including United Arab Emirates, Bangladesh, Kenya, Tanzania, Sri Lanka, Indonesia, and Germany. Furthermore, it has enhanced its global presence through subsidiaries in Singapore, Turkey, and Philippines, as well as joint ventures and associate companies in the United Kingdom and Malaysia. A service and manufacturing plant located in Abu Dhabi is anticipated to commence operations shortly.

LONG-STANDING CUSTOMER RELATIONSHIPS

The Company has established enduring partnerships with leading global organisations and maintains a diverse and expansive customer base. To date, it has successfully served over 500 clients and executed more than 10,300 projects across various industries. The Company has strengthened its market credibility by engaging directly with major industry players and through OEM collaborations. Additionally, its extensive distribution network includes over 95 domestic distributors and nine international partners, ensuring broad market reach and effective service delivery.

The diligent efforts in establishing its business and strengthening its assets have resulted in substantial growth. Furthermore, it has created a solid platform for the Company to transition into a new growth phase.

FY24 FY25

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145.85
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Heavy Wear Plates & Welding Engineering Wear Parts Consumables

OUR ORDER BOOK

AS OF MARCH 31, 2025 ( D Million)

Annual Report 20 24 - 25 17

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OUR PRODUCTS

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SPECIAL PURPOSE ELECTRODES

A welding electrode is a rod made of metal or alloy that conducts electric current to generate the heat required for welding. It helps sustain the welding arc and supplies the filler metal needed to form the welded joint.

FLUX CORED WIRES

It is a tubular welding consumable filled with a flux mixture of minerals, metal powders and chemical agents. It enables higher welding speeds, ensuring a efficient and rapid welding process.

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COLD REPAIR COMPOUNDS

Cold repair compounds, based on polymer chemistry and ceramic composites, are used for maintenance, anti-corrosion, electrical insulation and structural & floor coatings.

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Statutory Reports Financial Statements

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HIGHLIGHTS FOR FY25

We’ve secured a prestigious order from Defence Sector companies for our flux-cored welding wires. This milestone reinforces our growing reputation in the defence manufacturing sector. Following this success, we are on course to develop innovative solutions for other industries

We have engineered a specialized hardfacing consumable for a

leading farm equipment OEM— designed specifically to withstand the severe wear and abrasion conditions typical in agricultural machinery. This solution helped them indigenise and move away from importing this consumable which formed a critical part of their supply chain.

Follow-on orders by renowned Engineering (Industrial Valves

Manufacturer) Companies for our newly developed products—a powerful affirmation of their unwavering trust in our innovations and quality. These repeat procurements not only validate the excellence of our solutions but also mark the beginning of a deeper, long-term partnership.

OPPORTUNITIES

The global welding consumables market was valued at US$17.7 billion in 2024 and is projected to reach US$26.3 billion by 2033, with the Asia-Pacific region holding the largest market share. Similarly, the Indian welding consumables market is anticipated to grow from US$1.248 billion in 2024 to US$2.1 billion by 2033.

This growth is driven by industrial expansion across heavy engineering, energy, oil & gas,

investments. New sectors like Defence and Railways present specific opportunities.

railways, shipbuilding, power, transportation, and automotive sectors, along with government initiatives like 'Make in India' and significant infrastructure

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Global welding consumables industry Indian welding consumable industry
($ billion) ($ billion)
26.3 2.1
17.7
1.248
2024 2033 2024 2033
Compound annual growth rate (CAGR) of Compound annual growth rate (CAGR)
4.49% between 2025 and 2033 of 6% between 2025 and 2033
CAGR 4.49%
CAGR 6%
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STRATEGY MOVING FORWARD

The Company is focused on expanding this segment by increasing its market share at the expense of competitors. To support this growth, it is undertaking significant capacity expansion initiatives, including the installation of a new flux-cored wire manufacturing line, specialised wire-drawing machines at the Nimji facility, a new wire strip plant, and an additional dedicated facility for special electrodes. These initiatives are part of a broader strategy to nearly double overall capacity across all three of its business segments.
The Company is also focusing on developing low-fume, chromium-free wire formulations to stay ahead of regulatory requirements.
Internationally, the Company is in the process of setting up a subsidiary, Diffusion Engineers Middle East, in the UAE to deliver welding services and light fabrication solutions. The unit in Abu Dhabi is scheduled to become operational in FY26.
Additionally, the Company is prioritising the establishment of regional service centres and stock points in strategic global markets to enhance maintenance responsiveness and customer support.

Annual Report 20 24 - 25

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WEAR PLATE

Wear plates are produced using an open arc welding process, leveraging backward integration with flux-cored wire production for superior hardness and wear resistance.

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WELDING SERVICE

The Company offers in-house and on-site maintenance including inspection, repair, and upgrades ensuring optimal performance and durability of industrial equipment.

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WEAR PART

The Company also manufactures readyto-fit wear parts using wear plates, forgings, castings, and hard-facing consumables.

This vertical involves the manufacturing and supplying of precision-engineered wear plates and wear parts designed to protect equipment surfaces from abrasion, impact, corrosion, and high-temperature wear in harsh industrial environments. The Company serves close to 1,000 customers in this segment. The majority of the business is conducted at the company's

workshop, with some on-site assembly when requested.

Diffusion Engineers has recently started offering a specific type of wear part on a rental basis, which includes the cost of supply and maintenance. This new business model currently has two ongoing contracts and does not require a capital commitment on the Company's books due to explored tie-ups with NBFCs.

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HIGHLIGHTS FOR FY25

We have reached a recordsetting milestone in wear plate production—firmly establishing our position as the industry leader in capacity and reliability

We’ve successfully fulfilled a major supply contract, delivering over 400 continuous-casting rollers to a leading steel manufacturer— underscoring our proven expertise and reliability in heavy-industry applications

OPPORTUNITIES

Wear plates play a vital role across heavy industries including power generation, steel production, quarrying, and cement manufacturing. The sector stands to benefit significantly from the global resurgence in infrastructure development and industrial expansion, which will drive increased maintenance needs and create robust growth opportunities.

The global wear plate market is projected to grow from US$ 31.5 billion in 2024 to US$ 46.6 billion by 2034, reflecting strong demand across core sectors. In India, the wear plate market is expected

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Statutory Reports Financial Statements
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Global wear plates
($ billion)
46.6
31.5
2024 2034
Growing at a CAGR of approximately 8.8%.
CAGR 8.8%
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to reach US$ 6.8 million by 2033, underscoring the country’s industrial momentum.

The Company anticipates accelerated growth in its wear parts segment, as customers increasingly prefer integrated, ready-to-fit solutions. Key demand drivers include the mining sector (requiring heavy-duty components for excavation equipment), the steel industry (utilising hard-facing wires and wear plates in mills), and the cement sector (seeking hard-facing services for clinker processing lines).

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Indian wear plates
($ billion)
6.8
4.5
2024 2033
CAGR of 5.0% from 2026 to 2033
CAGR 5%
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STRATEGY MOVING FORWARD

The Company is undertaking a major capacity expansion at its flagship Nimji facility to double its installed capacity across all business segments, including wear plates and wear parts.
The Company has also initiated strategic leasing and OPEX contracts for industrial asset lifecycle management, including the rental model for wear parts.

Annual Report 20 24 - 25

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Tandem Wagon Tippler

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Coal Pulverizer Mill Shell

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Impeller Fan

Material Hopper for Blast Furnace

Hammer Crusher Assembly

This business vertical specialises in the manufacturing and fabrication of heavy engineering equipment tailored for core industrial sectors such as cement, steel, power, and sugar. The product portfolio includes large-scale, customengineered components such as air separators, high-pressure grinding rollers, forced draft (FD) fans, mill bodies, and rotary air preheater (RAPH) rotors. These units vary significantly in scale, with individual equipment weighing from 10 tons to as much as 500 tons.

The key differentiator of the Company is its profound

understanding of metallurgy and materials, which arises from its foundational roots as a welding alloy design firm. This expertise enables the production of equipment characterised by extended lifespans and enhanced availability for customers.

In addition to manufacturing capabilities, the company provides end-to-end repair and maintenance services for missioncritical equipment directly at client sites. Offerings include emergency breakdown repairs, precision kiln alignment, and other high-value industrial support services. The vertical currently

serves approximately 50 clients, delivering bespoke solutions that uphold performance reliability and operational continuity.

Recent significant projects encompass the reconditioning of a 2,800 millimetre-diameter RAL, the manufacturing and export of a rotor assembly for a Russian client, as well as the replacement of an 18.6-meter kiln shell on a turnkey basis within the cement sector.

Industrial services contribute high value and approximately 1-2% of current revenue, serving as a "door opener" for other business divisions.

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Statutory Reports Financial Statements

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HIGHLIGHTS FOR FY25

We upgraded our heavy engineering and component machining capabilities by deploying state-of-the-art CNC Horizontal-Lathe Machine and a 6.5-metre swing Vertical Lathe Machine. These enhancements significantly expand our ability to manufacture larger, high-precision components and better serve evolving customer requirements. We are also in the process of commissioning a CNC HorizontalBoring Machine(X-8m; Y-3.5m; Z+W-2m).

Undergoing major expansion with approximately doubling the capacity.

We are successfully executing a highly complex equipment order for a top-tier mining and steel OEM—demonstrating our advanced engineering capabilities, project management excellence, and unwavering commitment to delivering bespoke solutions in demanding industrial environments.

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OPPORTUNITIES

India’s heavy engineering sector is poised for sustained growth, driven by robust activity in manufacturing and infrastructure development, rising technological sophistication, favourable policy support, and increased foreign direct investment.

This segment is expected to outpace the consumables sector in expansion, underpinned by growing demand for integrated, end-to-end engineering solutions. The company recognises significant opportunities for product line diversification and is

actively exploring high-potential verticals such as Indian Railways, Nuclear Energy, Mining, and Oil & Gas. These initiatives are aligned with its strategic focus on margin enhancement and the adoption of advanced manufacturing capabilities.

Additionally, strong growth prospects have been identified across key industries:

Cement – high-pressure grinding rollers and critical maintenance solutions

Steel – refurbishment of converter mouths and sinter plant components

Power – in-situ weld-repair service contracts

Sugar/Ethanol – wear-resistant overlays and comprehensive shutdown support services

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Global heavy engineering equipment
($ billion)
300
180
2024 2032
compound annual growth rate
(CAGR) of 5.5%
CAGR 5.5%
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STRATEGY MOVING FORWARD

The Company is further enhancing its machining capabilities to produce larger and more precise components, considering the limited number of suppliers in India for such capabilities. Strategic initiatives involve entering into more critical and larger industrial equipment markets, developing new products for sectors such as Oil & Gas, Petrochemical, Railways, and Defence, and launching High-Performance Grinding Rollers for the Cement Industry.
The Company has launched Kiln Services as a standalone offering to complement its wear-consumables business and deepen customer engagement.

Annual Report 20 24 - 25

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(BASED ON CONSOLIDATED FINANCIAL STATEMENT)

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Our strong performance across key indicators affirms the effectiveness of our team and strategic direction. This momentum positions us well to accelerate growth, gain market share, and consistently deliver long-term value for all stakeholders.

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FY21 FY22 FY23 FY24 FY25
REVENUE FROM OPERATIONS
( D Million)
3,351.96
2,781.45
2,548.76
2,045.89
1,552.63
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FY21 FY22 FY23 FY24 FY25
EBITDA
( D Million)
470.76
388.69
278.77
224.90
207.21
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FY21 FY22 FY23 FY24 FY25
PROFIT AFTER TAX
( D Million)
360.40
308.05
221.44
170.47
116.62
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FY21 FY22 FY23 FY24 FY25
363.79
118.72
110.51
86.20
(47.37)
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NET CASH FLOW FROM OPERATIONS ( D Million)

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FY21 FY22 FY23 FY24 FY25 FY21 FY22 FY23 FY24 FY25
EBITDA MARGIN PAT MARGIN
(%) (%)
FY21 FY22 FY23 FY24 FY25 FY21 FY22 FY23 FY24 FY25
RETURN ON CAPITAL EMPLOYED TOTAL DEBT TO EQUITY RATIO
(%)
15.13 10.66 10.48
14.04
13.35
10.99 10.94 8.56
8.17
7.32
20.63 0.34
18.46
17.30
15.94
11.18 0.19 0.20
0.18
0.06
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Annual Report 20 24 - 25

Risk Management

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Risk represents an essential and inescapable element of all enterprises. Diffusion Engineers is committed to managing its risks proactively. Although risks cannot be fully eliminated, a robust risk management strategy ensures that they are minimised, circumvented, retained, or apportioned. The Risk Management Committee oversees our risks and is responsible for evaluating the effectiveness of the risk management strategy or process. During the year under review, these controls were assessed, and no material weaknesses were identified in their design or operations.

Risk 1: Raw-material price volatility

The prices of core inputs like nickel, chromium, and high-alloy steels are subject to sharp swings, which can compress the Company's profit margins.

Mitigation measures

Implemented multi-vendor sourcing.
We’ve introduced a price-variation clause in our long-term contracts. It allows pricing to be adjusted fairly, based on agreed benchmarks.

Statutory Reports Financial Statements

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Risk 2: Energy and utilities cost escalation

Increases in grid tariffs or fuel prices would inflate conversion costs at the Company's energy-intensive plants.

Mitigation measures

Implemented energy-efficiency retrofits.
Investments in on-site solar capacity commissioning at the Nimji unit in Q3 FY26.

Risk 3: Supply-chain disruptions

Geopolitical events or port congestion could cause a delay in the arrival of critical inputs, especially speciality alloys sourced internationally.

Mitigation measures

Maintained strategic safety stocks.

Risk 4: Competitive pressure from low-cost imports

Cheaper electrodes and wires from East-Asian producers can potentially erode realisation for commoditised products.

Mitigation measures

Moving away from ‘supply and forget’ to becoming a strategic partner for the entire lifecycle management of industrial equipment for our customer.
Provide faster on-site service.
Differentiated offerings through proprietary high-performance consumables.
Benefited from the "Make-in-India" preference in Government and PSU tenders.
Established dual-port routing options.
Localising select grades through Indian ferro-alloy suppliers.

Annual Report 20 24 - 25

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MR. PRASHANT GARG

Chairman and Managing Director

Prashant Garg is the Chairman and Managing Director of our Company. He holds a bachelor’s degree in engineering and was among the top rankers at Nagpur University. He also possesses a master’s degree in business administration from Saïd Business School, University of Oxford. He has been associated with the Company since 2003 and has approx. 20 years of experience in the industry we operate in. Currently, he is responsible for the day-to-day affairs. He also looks after new product development, infusion and technology upgrades in our Company's operations and production processes. He has been responsible for innovations

MRS. CHITRA GARG

Non-Executive Director

Chitra Garg is the Non-Executive NonIndependent Director of our Company. She holds a Master’s degree in Arts (Geography) from Agra University. She has been acting as a Director on the Board of our subsidiary company, Diffusion Super Conditioning Services Private Limited, since 1995 and is a

DR. NITIN GARG

Non-Executive Director

Dr. Nitin Garg is the Non-Executive Director of our Company. He holds a bachelor’s degree in medicine and a bachelor’s degree in surgery from Nagpur University. He also holds a master’s degree in general surgery from Manipal Academy of Higher Education, a master’s in neurosurgery from the National Institute of Mental Health and Neuro Sciences, and a fellowship from the University of Pittsburgh. He is currently practising as a neurosurgeon in Bhopal.

in the manufacturing process and the addition of new product lines in the business. Apart from Diffusion Engineers Limited, he is also a director on the Board of Nowelco Industries Private Limited, Diffusion Super Conditioning Services Private Limited, Diffusion Hernon Adhesive and Sealant Private Limited, Benvira Forward Algorithms Private Limited, N K Garg Foundation, LSN Diffusion Limited, Diffusion Wear Solutions Philippines Inc., Diffusion Engineers Singapore Pte. Ltd. and Mecdiff SDN BHD. He is also a Partner in Devi Kiran Advisory Services LLP.

Partner in Devi Kiran Advisory Services LLP. She has been associated with our Company for the past three decades as a shareholder and is responsible for overseeing the Company’s general administrative activities. She also holds a directorship in the N K Garg Foundation, a not-for-profit organisation.

He founded BTSG Awareness Foundation, a non-profit organisation, and CENOS Health Care Private Limited. He also serves as a director on the Board of our subsidiary companies, Diffusion Hernon Adhesive, Sealant Private Limited, and Nowelco Industries Private Limited. He further holds a directorship in N K Garg Foundation, a not-for-profit organisation, and is a partner at Devi Kiran Advisory Services LLP.

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MR. ANIL TRIGUNAYAT

Independent Director

Anil Trigunayat is the Non-Executive Independent Director of our Company. He holds a Master of Science (Physics) from Agra University and a Diploma in Foreign Services Programme from Oxford University. He was associated with the Government of India as an Ambassador

MR. SHERRY OOMMEN

Independent Director

Sherry Oommen is an Independent Director of our Company. He holds a master’s degree in commerce from Aligarh Muslim University and a bachelor’s degree in law from Bangalore University. He is also a member of the Institute of Chartered Accountants of India and the Institute of Cost Accountants of India, and he has cleared the professional programme examination

MRS. DEEPALI BENDRE

Independent Director

Deepali Bendre is an Independent Director of our Company. She holds a master’s degree in commerce from Pune University and is also a member of the Institute of Chartered Accountants of India. With over 27 years of experience, she has been a practising Chartered

and has served in various capacities throughout his career, retiring in 2016 as India’s Ambassador to Libya and Jordan and High Commissioner to Malta. He is also a Director on the Board of NTPC Limited.

held by the Institute of Company Secretaries of India. Additionally, he holds a master’s degree in international taxation from the National Academy of Legal Studies and Research (NALSAR) University of Law, Hyderabad. He has been practising in legal and taxation matters. He is currently a partner of M/s. Omega Alliance, Advocates and Solicitors, Kochi, Kerala.

Accountant, specialising in finance and accounting. Currently, she is a partner at M/s. Diwan & Dasture, Chartered Accountants, Nagpur, Maharashtra.

LEADERSHIP TEAM

Mr. Prashant Garg, Chairman & Managing Director

Mr. Ramesh Kumar N, Chief Executive Officer

Mr. Abhishek Mehta, Chief Financial Officer

Ms. Chanchal Jaiswal, Company Secretary

Mr. Ajay Urkude, Vice President

Mr. Shreekant Premkhede, Vice President, Marketing

Mr. Sameer Khaladkar, Vice President, Export

Mr. Manoj Srivastava, Senior Vice President, Sales and Marketing

Mr. Kaushik Chakraborty, General Manager, Marketing – OEM

Mr. Ajit Kothathane, Vice President, Export

Annual Report 20 24 - 25 29

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Diffusion Engineers Limited undertook several Corporate Social Responsibility (CSR) initiatives during the financial period 20242025, focusing on key areas such as Health & Sanitation, Preserving the Environment, Education/Skill Development, Provision of Basic Needs, and Promoting Sports.

Here are the specific initiatives and their details:

Environment

Preserving Environment: This involved the development and maintenance of plantations in and around the Nimji Plant, Kalmeshwar, to increase green cover in what was an upcoming industrial and fairly barren area. This effort also aimed to increase and sustain birdlife, contributing to the area's greenery. The expenditure for this initiative was I 2,87,650.

Medical Help

Paediatric Heart Surgeries: The Company sponsored two paediatric open heart surgeries for needy children in association with the Rotary Club of Nagpur Vision. These surgeries, conducted at Shri Swami Vivekanand Medical Mission in Khapri, Nagpur, gave a new lease of life to a nineyear-old named Kalp Bisen and a four-year-old named Khushi Rangnekar. Swami Vivekanand Medical Mission is a voluntary and charitable organisation providing affordable and quality healthcare

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to underprivileged sections of society. The total expenditure was I 2,64,000.

and live a normal life. This project was executed through Mahavir International Service Trust in collaboration with Rotary Club of Nagpur Vision. The donation amount was I 2.5 lakhs.

Donation for Mechanical Heart Valves: A donation of I 5 lakhs was given to Swami Vivekanand Medical Mission, Khapri, Nagpur, for 10 mechanical heart valves for economically backward and needy patients unable to afford the cost. These artificial valves improve patients' quality of life.

Chichbhavan Village Medical

Services: An ongoing project at Chichbhavan Village, Kalmeshwar, provided medical services twice a week (Wednesday and Saturday), with 15 to 25 patients per session. This service was particularly valuable as the nearest Primary Health Centre is quite distant, and medicines were also provided. The expenditure amounted to I 1,58,0973.

Brain Tumour Support Group and Awareness Foundation Donation: A donation of I 5 lakhs was made to a foundation that supports the non-medical needs of brain tumour patients and their caregivers. The foundation aims to provide psycho-social support, conduct monthly meetings, assist with logistics for out-of-town patients, and provide access to information on survivorship and clinical trials. The donation was used for awareness activities, financial aid for needy patients, and psychological support.

General Medical Check-up Camp at Kalmeshwar Taluka: A comprehensive medical checkup camp was organised for 612 participants in and around Kalmeshwar Taluka, providing general full body check-ups, BP, sugar, eye check-ups, and cardiac issue screenings, along with counselling for corrective actions8. Medicines were also provided. The camp was conducted in association with Dande Hospital, Ravi Nagar, Nagpur, with an expenditure of I 3,91,118 lakhs.

Jaipur Foot Donation: Fifty Jaipur Foot prosthetics were donated to 50 individuals who had lost a foot below the limb due to accidents, enabling them to walk properly

Statutory Reports Financial Statements

Education

N.K.Garg Scholarship Program: The N.K. Garg Foundation/Diffusion Engineers Limited announced this scholarship program in memory of Shri N.K.Garg, Founder and Chairman, for B.E./B.Tech – 1st and 2nd Year Mechanical Engineering/ Metallurgy/Industrial Engineering or equivalent courses. The second round of scholarships was given to 10 students sponsored in 2022-23 until graduation. The scholarship covers college fees, guidance, and internship programs at Diffusion Engineers Limited's Hingna/ Kalmeshwar Plants. The amount is I 50,000 per student per year, provided they maintain above 65% scores annually. In Academic Session 2024-25, six students from Shri Ramdeobaba College of Engineering & Management, Nagpur, and four from Visvesvaraya National Institute of Technology, Nagpur, received scholarships based on merit and economic background. These students were well-placed or doing good

Annual Report 20 24 - 25 31

internships, and 10 new students will be selected in 2025-26. The total scholarship amount was I 5,00,000.

Donation to Suryodaya Foundation: A donation of I 50,000 was made to Suryodaya Foundation, a non-profit institution dedicated to providing education to children with intellectual disabilities, aiming to make them functionally independent adults.

Partnering with Bridge The Gap: The company partnered with Bridge The Gap Foundation, Nagpur, by adopting and sponsoring education for a cluster of Zilla Parishad schools and Anganwadis in Hingna zone. Bridge the Gap Foundation focuses on bridging the educational gap between rural and urban children through quality, practical education and community collaboration, impacting over 3,000 rural children. The expenditure was I 2.5 lakhs.

Promoting Sports

Shri N.K.Garg Memorial Badminton Tournament: The second annual tournament was held from 5th to 7th December 2024, sponsored by N.K.Garg Foundation & Diffusion Engineers Limited and organised by Nagpur District Badminton Association. It saw over 200 participants across 14 categories (under 9 to Seniors 17+). The donation amount was I 1,50,000.

Shri N.K.Garg Sports Scholarship/ Fund: Under its CSR Program, Diffusion Engineers Limited announced this scholarship to support needy and deserving sportspersons.

In 2023-24, a racing cycle was given to Riyansh J Sontakke, a young cyclist from Nagpur, for his achievements in various cycle championships.

In 2024-25, a scholarship of I 1.50 lakh was awarded to Vaishnavi Manglekar, a budding badminton star from Nagpur, to support

her training, travel, lodging, and participation in tournaments. This scholarship was presented by Mr. Prashant Garg, Managing Director, and assisted by the Nagpur District Badminton Association.

Developing & Donation of School Playground and Sports Equipment: A multi-purpose cemented playground was constructed by N.K. Garg Foundation in association with Diffusion Engineers Limited at Tejaswini Primary and High School Koradi. This school, located in a rural area of Nagpur district, caters to 1500 students from Grades 5 to 12. Sports equipment, including skates, basketballs, handballs, badminton rackets, and tennis balls, was also donated. The project cost I 1,79,947 lakhs and was executed through the Rotary Club of Nagpur Down Town.

Donation to Inspire Institute of Sports: A donation of I 5 lakhs was made to Inspire Institute of Sport, a cutting-edge environment in

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Statutory Reports Financial Statements

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Vijayanagar, Karnataka, dedicated to crafting champions for the Olympic Games. The institute focuses on world-class highperformance centres, holistic training environments, and supporting para-athletes to maximise their potential. The donation was for training and promotion of sports-related activities.

Provision of Basic Needs

The Annamitra Foundation: A donation of I 2.5 lakhs was made to The Annamitra Foundation, a non-profit organisation that implements the Mid Day Meal

Programme to eliminate classroom hunger and malnutrition in India. The foundation operates a kitchen in Kalamna, Nagpur, and provides mid-day meals to 110 schools.

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Annual Report 20 24 - 25

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GLOBAL ECONOMY

2024: A Cautious Economic Resilience

The global economy demonstrated resilience amid challenges, with real GDP growth stabilising at around 3.2%, slightly below historical averages, driven by robust performances in the U.S., India and emerging Asia, though Europe lagged.

Declining Inflation

Inflation declined steadily from 6.8% in 2023 to approximately 5.9%, with advanced economies nearing central bank targets faster than emerging markets, though core inflation remained sticky due to persistent service sector pressures. Major central banks, including the U.S. Federal Reserve and European Central Bank, initiated rate cuts, e.g., the Fed lowered rates by 50 basis points to 4.75-5% to support growth as disinflation progressed. However, they remained cautious due to trade uncertainties. As inflation moderated and central banks eased policies, consumer dynamics also began to shift.

Consumption

Global consumption grew modestly, supported by real wage recovery and employment gains, particularly in the U.S. and India, but weakened in Europe due to subdued demand.

Industry and Manufacturing

Manufacturing and industrial growth faced headwinds, with China’s PMI indicating contraction and Europe’s sector in recession, though emerging markets showed resilience. Despite industrial headwinds, global trade showed signs of revival.

Global Trade

Global trade growth rebounded to 2.7% from 1.1% in 2023, driven by recovering demand and easing supply chain issues, but trade tensions and tarifs posed risks.

Outlook

The global economy will likely to face a dynamic landscape in 2025, with real GDP growth projected at 2.8%, down from 3.2% in 2024. U.S. tarifs, though on a 90-day pause, will disrupt global trade and supply chains. Countries are anticipated to diversify trade partnerships, thereby reducing reliance on U.S.-China routes and fostering resilience in global supply chains. Global infation is forecast to ease even further, stabilising prices and improving purchasing power, especially in advanced economies. Emerging economies, particularly India and Southeast Asia, are projected to drive global growth due to strong domestic consumption and infrastructure investments.

Source: https://www.imf.org/en/Publications/WEO/ Issues/2025/04/22/world-economic-outlook-april-2025

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World US China
Other AEs Other EMDEs
12 1. Headline Inflation
10
8
6
4
2
0
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12 1. Real GDP Growth
World AEs
10 EMDEs US
Euro area China
8
6
4
2
0
2000-14 2015-23 2024-25
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Statutory Reports Financial Statements

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INDIAN ECONOMY

India’s Resilient Economic Growth The Indian economy demonstrated robust performance in FY2024-25, with GDP growing at 6.5%3 for the full year, bolstered by a strong fourth-quarter expansion of 7.4%4. This growth was driven by a rebound in domestic demand, improved agricultural output, and sustained services momentum. Despite global headwinds, India remained the fastest-growing major economy, supported by structural reforms and public infrastructure investments.

Inflation and Consumption Trends

Inflation averaged 4.6%1 for FY2024-25, easing from earlier highs due to moderating food prices and effective monetary policy. Private Final Consumption Expenditure (PFCE), a key growth driver, expanded by 7.2%2, reflecting revived consumer confidence and discretionary spending. However, rural demand lagged in urban recovery, highlighting uneven economic revival.

Industrial and Manufacturing Revival

Industrial production grew, with manufacturing registering a 4%5 uptick, aided by Production-Linked Incentive (PLI) schemes and easing supply chain bottlenecks. The eight core industries, coal, steel, cement, electricity, refining, fertilisers, natural gas, and crude oil—posted a collective growth of 4.4%6, signalling broad-based infrastructure and energy demand.

Monetary Policy and RBI’s Accommodative Stance

The Reserve Bank of India (RBI) cut the repo rate three times in FY2024-25, bringing it down to 5.5%7 to Sources:

stimulate credit growth. These cuts, coupled with improved liquidity, supported borrowing in business while keeping inflation within the target band.

External Trade and Current Account Dynamics

The country’s merchandise exports reached US$ 374.1 billion, a 6%8 increase over the last fiscal year. The Current Account Deficit (CAD) narrowed to 1.1%9 of GDP in Q3, aided by resilient services exports and remittances. However, it is projected to be widened in Q4. Free Trade Agreement (FTA) negotiations with the UK and EU provided additional momentum.

GST Collections

A Testament to Formalisation Goods and Services Tax (GST) collections hit a record ₹16.75 trillion10 in FY202425, an increase of 9.98%, underscoring compliance improvements and economic formalisation. States benefitted from buoyant collections, enabling higher capex spending.

Outlook

Sustaining Momentum Amid Challenges India’s economy in FY2025-26 is poised for stable growth, sustaining high momentum driven by stable government policies and reforms. The UKIndia FTA should boost exports, while the impact of the US tariff differentials with the other competing countries should be beneficial for the Indian economy. Despite geopolitical tensions, India’s diversified trade and resilient domestic demand ensure stability. Infrastructure investments, digital transformation, and renewable energy initiatives will fuel consumption and industrial growth. With declining inflation and strategic trade partnerships, India is set to strengthen its global economic position, leveraging its youthful workforce and policy continuity for sustained prosperity.

https://www.pib.gov.in/PressReleasePage.aspx?PRID=2122148#:~:text=Retail%20infation%20in%20India%20has,4.6%20percent%20 in%202024%E2%80%9325.

https://www.pib.gov.in/PressReleasePage.aspx?PRID=2132688 https://www.mospi.gov.in/sites/default/fles/press_release/NAD_PR_30may2025.pdf https://www.mospi.gov.in/sites/default/fles/press_release/NAD_PR_30may2025.pdf https://www.mospi.gov.in/iip https://www.fnancialexpress.com/policy/economy-core-sector-output-grows-3-8-in-march-44-in-fy253817179/#:~:text=policy,digits%20since%20November%20last%20year https://economictimes.indiatimes.com/wealth/borrow/loan/personal-loan/personal-loan-vs-savings-smart-ways-to-choose-when-youneed-quick-funds/articleshow/121331056.cms https://economictimes.indiatimes.com/news/economy/foreign-trade/indias-total-exports-grow-6-01-to-reach-record-824-9-bln-in-fy25/ articleshow/120822675.cms?from=mdr https://www.livemint.com/economy/india-current-account-defcit-india-trade-defcit-trump-remittance-tax-foreign-capital-outfowsindia-indian-rupee-11749015982271.html https://cfo.economictimes.indiatimes.com/news/tax-legal-accounting/top-10-states-by-gst-collection-infy202425/121179928#:~:text=India's%20GST%20collections%20for%20FY2024%E2%80%9325%20touched%20a%20total%20of,economic%20activity%20and%20compliance%20improvements

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INDUSTRIAL STRUCTURE & DEVELOPMENT

Global Welding Consumables Industry

Welding Consumables are materials used during welding to form joints, including electrodes, filler wires, fluxes, and shielding gases. They melt to fuse metals, ensuring strength and durability. Used in construction, automotive, and manufacturing, their composition matches base metals for optimal performance. Quality impacts weld integrity, making them vital for structural safety and efficiency.

Types:

Electrodes (coated metal rods for arc welding)
Filler Wires (for MIG/TIG welding)
Fluxes (chemical cleaners to prevent oxidation)
Shielding Gases (e.g., argon, CO₂ to protect the weld pool)
Alloys & Flux-Cored Wires (for specialised applications)
Cold Repair Compounds

Applications:

Construction (steel beams, pipelines)
Automotive (chassis, exhaust systems)
Shipbuilding & Aerospace (high-strength joints)
Energy
Repairs & Fabrication

North America is the leading region with the largest welding consumables market revenue share. The construction and automotive sectors are driving robust growth, with increased investment in infrastructure

projects and advancements in welding technology, while the oil and gas industry's growing energy demand is also fuelling market expansion across the region.

According to IMARC Group, the global welding consumables market was valued at US$17.7 billion in 2024. The market is expected to reach US$26.3 billion by 2033, with a compound annual growth rate (CAGR) of 4.49% between 2025 and 2033. The growth of the market is driven by the increasing use of new consumables with advanced alloy compositions and coatings, the rising construction of residential and commercial buildings, and the expanding application of welding consumables across various industries.

Growth Trends:

The global construction boom is increasing demand for welding consumables across residential, commercial, and industrial sectors, necessitating extensive welding for building and maintaining structures. The automotive and manufacturing industries rely on welding for vehicle and machinery production, further driving market expansion. Technological advances and efficient production processes heighten the need for high-quality welding materials. The energy sector, including oil and gas, renewable energy, and power generation, requires durable welding solutions for pipelines, rigs, and other infrastructure, fuelling market growth.

Source: https://www.imarcgroup.com/weldingconsumables-market

Indian Welding Consumables Industry

India's welding consumables market was valued at US$1.248 billion in 2024. In the future, IMARC Group forecasts the market to reach US$2.1 billion by 2033, with a compound annual growth rate (CAGR) of 6% from 2025 to 2033. Key market growth drivers include renewable energy projects, such as wind farms and solar power installations, the oil and gas sector expansion, and the introduction of advanced welding technologies and materials.

Leading Techniques, Types, and Segments

Techniques: As per welding consumables market insights, arc welding is relatively cost-effective in terms of equipment setup and consumable usage and holds the largest share of the industry. Additionally, it produces robust and durable welds, ensuring the structural strength of fabricated components, machinery, and structures.

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Types: Stick electrodes require minimal equipment compared to other welding methods and help reduce setup costs and complexity. Moreover, stick electrodes are effective in outdoor and adverse conditions, including windy or wet environments, as they can maintain a stable arc in challenging situations and account for most of the market share.

Segments: Construction projects are incredibly diverse, spanning the construction of towering skyscrapers to the development of vital infrastructure, including bridges, roads, and tunnels. In every one of these endeavours, welding is crucial for joining and fabricating the structural components that form the core of these structures. The durability and integrity of these welded connections are essential for guaranteeing the long-term safety and stability of the constructed buildings. Welding has widespread use in building steel and concrete structures.

Performance in 2024:

The Indian welding consumables market performed robustly in 2024, driven by growth in key sectors and technological advancements. The market saw steady expansion due to increased demand from construction, automotive, and infrastructure projects. The rise in renewable energy initiatives, such as wind and solar installations, further boosted the consumption of electrodes, wires, and fluxes. The oil and gas sector’s pipeline and offshore platform activities also contributed significantly.

Stick electrodes dominated the market, favoured for their versatility in automotive and construction applications. Technological innovations, including lowspatter electrodes and automated welding systems, enhanced efficiency, supporting market growth. Despite challenges like fluctuating raw material costs, rural electrification and the defence sector demand sustained momentum, positioning the market for further growth in coming years.

Sectors that are Driving Growth:

As India strives to modernise, propelled by initiatives like PM Gati Shakti (multi-modal connectivity), National Infrastructure Pipeline, Bharatmala (roadways), Sagarmala (ports), and UDAN (regional air connectivity), Smart Cities Mission, Vande

Bharat trains, renewable energy corridor and other initiatives to improve the country’s infrastructure, there's a rapid push towards building bridges, highways, buildings, pipelines, and other vital infrastructure. This development directly translates to a higher demand for welding and, by extension, welding consumables.

The manufacturing industry as a whole in India is experiencing significant growth and transformation due to several strategic initiatives, notably the Production Linked Incentive (PLI) scheme and the Make in India campaign. These programs are designed to boost domestic manufacturing by providing financial incentives to manufacturers and encouraging investments in various sectors. As a result, there is a noticeable increase in the demand for welding consumables, which are essential materials used in the welding process.
The automotive industry is metal-intensive and relies heavily on welding processes for production and repair work. The automotive industry, in particular, is undergoing a significant shift with the rise of electric vehicles (EVs). This transition requires a redesign of many vehicle components, and as a result, new welding techniques and consumables are needed to meet these evolving specifications.
Shipbuilding is also a highly metal-intensive industry that demands a robust welding process. As global trade expands and there's a growing need for more energy-efficient and eco-friendly vessels, the demand for advanced ships is rising. These vessels, constructed from specialist alloys that can withstand the harsh conditions of the sea, depend on high-quality welding consumables to guarantee their integrity and durability.
As new techniques come to the fore, they often require specific welding consumables to achieve the best possible results. The growth of laser welding, friction stir welding, and robotic welding has driven the development of consumables that can withstand higher temperatures and pressures. Furthermore, with industries shifting towards automation, there's a growing need for welding consumables that are compatible with automated welding systems.

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Emerging Trends & Opportunities:

The Indian welding consumables market is evolving rapidly, driven by technological advancements and industry demands. Below are the key trends shaping the market:

1. Increased Automation and Robotics

Adopting automated welding systems and robotics is surging, improving precision, productivity, and consistency. This trend, prominent in the automotive and manufacturing sectors, boosts demand for compatible consumables like fluxcored wires.

2. Eco-Friendly Consumables

Manufacturers are developing low-emission, sustainable welding consumables, such as electrodes and fluxes, with reduced environmental impact, aligning with India’s sustainability goals and global regulations.

3. Advanced Alloy Compositions

New consumables with advanced alloy coatings and low-spatter electrodes enhance weld quality and efficiency, catering to high-precision industries like aerospace and defence.

4. Digital Transformation

Integration of digital tools, like IoT and data analytics, optimises welding processes, enabling real-time monitoring and improved consumable performance in industrial applications.

5. Customised Consumables

Demand for specialised consumables tailored for specific applications, such as high-tensile steel welding in infrastructure, is growing, driven by diverse industry needs.

Source: https://www.imarcgroup.com/india-welding-consumablesmarket

Global Wear Plates / Wear Parts Industry

Wear Plates are ultra-durable, abrasion-resistant steel or alloy plates (e.g., AR400, AR500, chromium carbide) used to protect machinery surfaces from wear, impact, and erosion in harsh environments.

On the other hand, wear parts are specialised, replaceable components engineered to endure extreme abrasion, impact, corrosion, or heat in industrial machinery. They are crafted from ultradurable materials like high-carbon steels, tungsten carbide, ceramics, or composite alloys to protect critical equipment from degradation. By sacrificing themselves to friction and mechanical stress, worn parts preserve the integrity and functionality of larger systems, reducing unplanned downtime and maintenance costs.

In short, the wear plates act like armour, while wear parts are the sacrificial tools; both work together to extend equipment life. Upgrading one often demands re-evaluating the other for optimal performance. Wear Plates act as protective surfaces bolted or welded onto machinery (e.g., excavator buckets, chutes) to shield structural components from abrasion/impact. Wear Parts are replaceable active components (e.g.,

teeth, blades, liners) that directly engage with abrasive materials, absorbing wear to preserve the integrity of both the equipment and attached wear plates.

Applications:

Mining: Bucket liners, crusher screens, conveyor chutes
Construction: Bulldozer blades, excavator buckets, grader parts
Cement/Steel: Hopper liners, slag tanks, pelletising equipment
Agriculture: Harvester blades, ploughshares
Energy: Coal handling plants, wind turbine components

The industry is mainly driven by the increasing demand for equipment that can withstand harsh operating conditions in various sectors, including mining, construction, and manufacturing. As these industries expand their production and output, the need for components that can cope with high impact, friction, and abrasion becomes increasingly critical. Wear plates are designed to prolong the lifespan of machinery by

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protecting vital components, cutting maintenance costs, and boosting productivity.

The industry is poised for significant growth due to opportunities in emerging markets, particularly in the Asia-Pacific region. As industries such as construction, infrastructure development, and heavy manufacturing continue to expand in countries like China, India, and Southeast Asia, there is a growing need for reliable wear protection solutions.

Opportunity: Research initiatives backed by the European Union funded 18 wear plate projects in 2023, according to documents from the European Commission's research portal. In the same period, academic and industrial organisations in the US showed significant interest in advanced materials, with the US National Science Foundation recording 48 publications on wear plate research. Official records from China reveal that production of wear-resistant steel plates reached 1.85 million tons in 2023, driven by growing demand for renewable energy infrastructure. These recent advancements highlight promising prospects for modern industrial uses and sustainable technology solutions.

Wear Plate Market is anticipated to expand from $31.5 billion in 2024 to $46.6 billion by 2034, growing at a CAGR of approximately 8.8%. The increasing demand for wear-resistant materials, critical in mining, construction, and manufacturing industries, drives market growth.

As of 2024, the Wear Parts Market was valued at US$85 billion, and it is expected to reach US$120 billion by 2033, with a compound annual growth rate (CAGR) of 4.5% between 2026 and 2033.

Sources: https://www.fortunebusinessinsights.com/wear-platesmarket-112324

https://www.thebusinessresearchcompany.com/report/wear-partsglobal-market-report#:~:text=1)%20By%20Ceramic%20Wear%20 Parts,Wear%20Parts%2C%20Plastic%20Wear%20Parts

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https://www.globalinsightservices.com/reports/wear-plate-market/
Wear Plates Market GRAND VIEW
Share, by End-use, 2024 (%) RESEARCH
$3.7B
Global Market Size,
2024
Mining & Quarrying Construction & Earthmoving Equipment Source:
Steel & Cement Oil & Gas Others www.grandviewresearch.com
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Indian Wear Plates / Wear Parts Industry

India is the fastest-growing regional market in Asia Pacific. The wear plate market size in India is estimated to be US$4.5 Billion in 2024 and is expected to reach US$6.8 Billion by 2033 at a CAGR of 5.0% from 2026 to 2033. In terms of revenue, India accounted for 3.3% of the global wear-plate market in 2024.

Growth Drivers:

1. Rapid Industrialisation and Infrastructure Development

India’s booming construction and infrastructure sectors, fuelled by government initiatives like Smart Cities and mega textile parks, increase demand for wear plates to protect heavy machinery from abrasion in harsh environments.

2. Growth in Mining and Quarrying Activities

The mining industry’s expansion, driven by demand for critical minerals like lithium and cobalt, boosts the need for durable wear plates in equipment such as crushers and conveyors.

3. Rising Manufacturing Sector Demand

Manufacturing industries, propelled by PLI and Make in India initiatives, utilise wear plates to enhance equipment longevity, reducing downtime and maintenance costs amid growing industrial output.

4. Technological Advancements in Materials

Innovations in composite and ceramic wear plates, offering superior abrasion resistance and durability, cater to high-performance needs in heavy industries, driving market adoption.

5. Focus on Sustainability and Efficiency

Industries prioritise wear plates to minimise equipment replacements, aligning with sustainability goals and reducing their carbon footprints, supported by advancements in energyefficient materials.

Annual Report 20 24 - 25

Trends :

1. Automation and Smart Manufacturing: Increased use of automated machinery in mining and construction boosts demand for specialised wear plates designed for high-precision, high-wear environments.

2. Customised Solutions: Tailored wear plates for specific applications, such as high-temperature or corrosive environments in oil and gas, are gaining traction, meeting diverse industry needs.

3. Digital Integration: IoT and data analytics are being integrated to monitor wear plate performance, optimise maintenance schedules and enhance equipment efficiency in industrial settings.

Opportunities:

India’s significant reliance on imported wear plates, particularly for high-performance applications in industries like mining, cement, and steel, creates substantial opportunities for domestic companies to capitalise on this demand.

Domestic Production Growth: Indian companies are scaling up the manufacturing of wear plates, offering products such as chromium carbide overlay plates, which reduces reliance on foreign suppliers. However, domestic output is limited compared to demand, indicating significant opportunities for the future.
Government Initiatives: The Atmanirbhar Bharat initiative and Production Linked Incentive (PLI) schemes aim to boost local manufacturing, reducing import dependence by encouraging indigenous production of high-quality wear plates.
Technological Innovation: Developing advanced wear plates (e.g., chromium carbide, ceramic composites) allows Indian firms to meet specialised needs, replacing imports with high-quality, costeffective domestic alternatives for industries like mining and construction.
Cost Reduction and Supply Chain Stability: Local production mitigates import costs (e.g., duties, logistics) and supply chain disruptions, enabling Indian firms to offer competitive pricing and reliable supply, attracting domestic buyers.

Challenges & threats:

Significant Import Volume: India is a leading global importer of wear plates, with thousands of shipments annually, primarily from China, Germany, and the United States. These imports cater to industries like mining, cement, and steel, where high-quality, abrasion-resistant plates are critical.

Key Drivers of Imports:

Specialised Requirements: High-performance wear plates, such as those with chromium carbide or ceramic composites, often require advanced manufacturing capabilities not fully met by domestic producers, necessitating imports.
Cost Competitiveness: Imported wear plates, especially from China, are often more costeffective due to economies of scale, despite import duties, making them attractive for price-sensitive industries.
Demand Surge: Rapid industrialisation, infrastructure projects, and mining expansion (e.g., lithium, cobalt) increase demand for durable wear plates, outpacing local supply capacity.

Import Trends: Between October 2023 and September 2024, India imported thousands of wear plate shipments, with a year-on-year growth of 23%, indicating strong reliance. China dominates as the top supplier, followed by Germany and the U.S.

Sources: https://www.verifedmarketreports.com/ product/wear-plate-market/

https://www.grandviewresearch.com/horizon/ outlook/wear-plates-market/india

- https://www.volza.com/p/wear plates/import/import in-india/
Export Potential through FTAs: The UK-India FTA and other trade agreements enable Indian companies to export wear plates to global markets, leveraging lower production costs to compete with China and Germany.

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Global Heavy Engineering Equipment Industry

It refers to large-scale machinery used in construction, mining, and other industrial projects designed to handle extreme loads, harsh environments, and complex tasks. Examples include excavators, cranes, crushers, and bulldozers. Built for durability and high performance, these machines enable infrastructure development, resource extraction, and mass production in steel, energy, power, sugar, transportation, and manufacturing sectors.

In 2024, the industry thrived, driven by infrastructure investments, urbanisation, and technological advancements. It saw robust demand for excavators, cranes, and loaders, particularly in Asia-Pacific, led by India and China. Automation, IoT, and electric machinery boosted efficiency and sustainability. North America and Europe contributed through urban and mining projects despite economic slowdowns. Rising raw material costs and U.S. tariffs posed challenges, but localised production mitigated disruptions.

The global heavy engineering equipment market size is projected to reach US$300 billion by 2032, growing at a compound annual growth rate (CAGR) of 5.5% from its 2023 valuation of US$180 billion.

Growth Drivers:

The global heavy engineering equipment industry is growing due to rising infrastructure investments, urbanisation, and energy projects. Governments worldwide are funding roads, railways, and smart cities, while mining and renewable energy sectors demand advanced machinery for resource extraction and wind/ solar installations. Technological advancements like automation, IoT-enabled predictive maintenance,

and electric/hydrogen-powered equipment are boosting efficiency and sustainability. Post-pandemic recovery has accelerated delayed projects, particularly in emerging markets like Asia-Pacific and Africa. Stricter emission norms in the EU and U.S. are driving fleet modernisation, while defence and aerospace expansions further fuel demand.

Trends in the Global Heavy Engineering Equipment Industry (2025):

1. Focus on Compact Equipment The demand for compact equipment like mini excavators is increasing for urban projects, particularly in the Asia-Pacific and Europe, due to space constraints and the versatility these machines offer, which supports urban construction needs and enhances project flexibility.

2. Digital Twin and BIM Adoption Building Information Modelling (BIM) and digital twins streamline equipment design and project management, optimising performance in construction and manufacturing applications while improving project planning accuracy and enhancing equipment lifecycle management.

3. Circular Economy Practices Manufacturers are emphasising equipment refurbishment and recycling to reduce waste, driven by sustainability regulations and costsaving demands in mining and construction, which promotes resource efficiency and lowers operational costs.

Source: https://dataintelo.com/report/global-heavyengineering-equipment-market

Indian Heavy Engineering Equipment Industry

The engineering sector, closely associated with the manufacturing and infrastructure sectors, holds strategic importance for India’s economy. This sector has witnessed remarkable growth over the last few years, driven by increased infrastructure and industrial production investments. The Government of India has appointed the Engineering Export Promotion Council (EEPC) as the apex body responsible for promoting engineering goods, products, and services from India.

India exports transport equipment, capital goods, and other machinery and equipment to various countries worldwide. In India, different types of heavy machinery for varied sectors, like textiles, power plants, locomotive motors, steel, infrastructure, and defence, are manufactured.

According to the Indian Electrical and Electronics Manufacturers’ Association (IEEMA), the electrical equipment industry witnessed consistent double-digit

Annual Report 20 24 - 25

growth in power equipment, particularly transmission equipment and transformers, driven by domestic demand and international market expansion.

Government initiatives have boosted the capital goods sector. The Ministry of Heavy Industries launched policies to enhance domestic production and reduce imports. These efforts are part of the Make in India campaign (2014), which aims to increase the manufacturing sector's GDP contribution, generate employment, and improve technology. The capital goods sector is crucial to India's economic strategy, supporting large-scale manufacturing and infrastructure projects.

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Capital Goods Production & Exports
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120
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Due to the catalytic effect of the Ministry of Heavy Industries intervention, the production of the capital goods sector has increased from I 2,29,533 crore in 2014-15 to I 4,29,001 crore in 2023-24. Production (in crore). Production ( I crore) by sub-sectors are given below:

S. No.	Sub-sector of capital goods	2019-20	2020-21	2021-22	2022-23	2023-24
1	Machine Tools	6152	6602	9307	11956	13571
2	Die, Moulds & Press Tools	13682	12294	13128	13915	15600
3	Textile Machinery	5355	5093	11658	14033	14639
4	PrintingMachinery	12678	10058	13215	16107	23479
5	Earthmovingand MiningMachinery	31020	290121	28674	37551	73000
6	Plastic ProcessingMachinery	2350	3710	3850	3912	4310
7	Food ProcessingMachinery	7547	10250	12210	13203	13863
8	Process Plant Equipment	29250	21938	24000	23415	27396

Performance in FY2024-25: The Indian

heavy engineering equipment industry experienced modest growth, with the construction equipment sector achieving a low single-digit year-on-year increase, reaching 140,191 units sold, driven by infrastructure projects like Bharatmala and Smart Cities. Earthmoving equipment led with a 71% market share, supported by robust domestic demand. Exports grew 10%, bolstered by global infrastructure needs. Government policies, including PLI schemes and 100%

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FDI, enhanced production. However, challenges like general elections, new emission norms, and component sourcing issues tempered growth. Technological advancements, such as electric machinery, gained traction, positioning India as a global hub despite raw material cost pressures.

Growth Drivers:

1. Mining Sector Expansion: Rising demand for critical minerals, such as lithium and cobalt, drives mining activities and increases the need for heavy machinery, which supports renewable energy projects and enhances equipment performance.

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2. Urbanisation and Industrial Growth: Rapid urbanisation and industrial projects, including mega textile parks, spur demand for construction and material handling equipment, fuelling both residential and commercial projects and driving equipment sales in Tier-2 areas.

3. Technological Advancements: Adopting electric machinery, automation, and IoT improves efficiency and aligns with sustainability goals, attracting ecoconscious buyers and reducing operational costs.

4. Export Opportunities: Global demand for cost-competitive Indian equipment is growing, supported by FTAs like the UK-India agreement and CEPA with the UAE, which expands market reach and strengthens trade partnerships.

5. Renewable Energy Projects: Wind and solar energy initiatives require heavy equipment for installation, which boosts demand in green energy sectors while aligning with net-zero goals and driving specialised equipment needs.

Government Impetus: India's National Capital Goods Policy, created by the Ministry of Heavy Industries and Public Enterprises, is a comprehensive plan to boost the country's capital goods sector. The policy aims to increase the sector's contribution to manufacturing from 12% in 2016 to 20% by 2025. Its goal is to establish India as a top capital goods producer, with a target of more than doubling production and increasing exports to at least 40% of total production. Additionally, the policy seeks to enhance the sector's technological capabilities, moving from basic and intermediate levels to advanced levels.

Opportunity Landscape: The capital goods sector in India is set to grow at a healthy rate of 13-15% over the next two to three years, according to ICRA. The

rating agency attributes this optimism to continued investments in end-user industries, particularly renewable power and transmission infrastructure. The industry's strong order book, which stands at an alltime high of I 1.41 lakh crore as of September 2024, signals sustained demand and revenue visibility.

Robust capacity additions in renewable power, cement, steel, and oil and gas are driving demand for capital goods. Additionally, the government’s increased capex allocation of I 11.2 lakh crore for FY2026 is expected to bolster order inflows further.

The power sector remains a crucial growth driver, with a planned government investment of I 25 lakh crore over the next five years for expanding generation, transmission, and distribution infrastructure. The cement industry is also set to add over 40 million tonnes per annum of capacity, with data centre capacity projected to double, both by FY2026-27.

India's ‘Make in India’ initiative has profoundly impacted heavy industries and engineering. The initiative has been instrumental in bolstering India's industrial foundation by driving technological progress, boosting domestic production, improving competitiveness, and creating jobs. With ongoing policy backing and further investment, the sector is set for continued growth upcoming years.

Sources: https://www.pib.gov.in/ P r e s s R e l e a s e I f r a m e P a g e . a s p x ? P R I D = 2 1 1 7 9 6 8 - https://realty.economictimes.indiatimes.com/news/allied industries/indias-construction-equipment-industry-grows-3-infy25-amidst-challenges/121490042

https://www.businessworld.in/article/capital-goods-sector-grows13-15-as-orders-reach-rs-141-lakh-cr-549632 h t t p s : / / w w w. p i b . g o v. i n / P r e s s R e l e a s e I f r a m e P a g e . aspx?PRID=2117968#:~:text=The%20National%20Capital%20 Goods%20Policy,intermediate%20levels%20to%20advanced%20 levels.

OPPORTUNITIES & THREATS

India’s infrastructure, industrial, and energy ecosystems continue to offer strong demand tailwinds across multiple sectors relevant to our business. In cement, a new expansionary cycle is underway, supported by rising dispatches, significant budgetary allocations under infrastructure programmes, and the renewed push for affordable housing under PMAY-U 2.0. The steel sector continues its strong momentum, with India maintaining its position as the world’s second-largest

crude steel producer. Government policies such as DMISP 2025 and Vision 300 are fuelling both capacity expansion and higher domestic consumption. These trends are translating into consistent demand for our anti-wear welding consumables, wear plates & wear parts and heavy engineering equipment.

In the energy sector, the dual thrust on renewables and coal-based generation presents a wide spectrum of business opportunities. India added more than

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25 GW of clean energy in FY 2025, even as legacy thermal plants undergo life-extension programs. This opens revenue channels across renewable-equipment fabrication and thermal overhauls, where our PTA powders, laser cladding, and in-situ repair solutions are well-positioned.

Other sectors such as sugar/ethanol, nuclear, mining, railways, and defence are also undergoing transformation. India’s ethanol blending mandate, with the E30 roadmap, is driving significant distillery capex, creating recurring wear-resistant overlay requirements. Nuclear energy capacity is expected to triple by 2031, boosting demand for ASME-grade welding consumables. The coal sector’s 42% output target jump by 2030, electrification and modernisation across Indian Railways, and increased defence indigenisation are enabling new applications for our high-performance consumables, automated welding systems, and turnkey fabrication solutions.

While the medium-to-long-term outlook remains promising, certain risks continue to shape the external environment. Volatility in global metal prices, often exacerbated by geopolitical tensions, can impact input costs and margins. Additionally, since our business is closely linked to the health of core industries such as steel, cement, power, and mining, any downturn in these sectors—whether due to regulatory changes, commodity cycles, economic slowdown, or evolving demand patterns—can significantly affect our sales, capacity utilization, and overall financial performance. Customer procurement volumes are also subject to fluctuations based on their inventory cycles, growth strategies, and market positioning. Although such variations have not had a material adverse impact in the recent past, prolonged or widespread disruption in any of these industries could pose challenges to our revenue continuity and operational stability.

Domain-Wise Business Performance

Forward Integration Through End-to-End Wear Solutions

Diffusion Engineers provides a comprehensive range of specialised products engineered to significantly extend the lifespan and performance of industrial equipment.

Our offerings include anti-wear electrodes, flux-cored wires (FCW), thermal spray powders, and cold repair compounds known as Diffcor. These consumables cater to a broad spectrum of industries, delivering superior protection against wear, abrasion, corrosion, and impact. Our innovative solutions ensure that operational efficiency and reliability are maximized, reducing downtime and maintenance costs for our clients.

Wear Plates and Wear Parts:

Building upon our robust product line, we specialize in the manufacturing and supply of precision-engineered wear plates and wear parts. These critical components are designed to withstand severe operating conditions in industries such as mining, cement, steel, and power generation. Utilizing advanced materials and stateof-the-art manufacturing techniques, our wear plates and parts offer exceptional durability and resistance to wear, significantly enhancing equipment longevity and operational performance.

Heavy Engineering:

Complementing our expertise in wear solutions, the company extends its capabilities into heavy engineering for large-scale industrial applications. Our skilled team handles complex fabrication, hardfacing and machining to manufacture custom-built heavy machinery to the stringent requirements of OEMs and major industrial clients. Leveraging extensive experience, technical expertise, and precision engineering, we ensure the delivery of high-quality, reliable, and efficient heavy-engineering solutions.

Insitu Job Work:

Further integrating our service offerings, we excel in insitu job work, enabling critical repairs and maintenance directly at our clients' operational sites. This specialized service eliminates the need for dismantling and transporting heavy equipment, substantially reducing downtime and associated costs. Our dedicated team of skilled technicians employs cutting-edge techniques such as insitu welding, machining, and coating applications to promptly restore equipment integrity and functionality, ensuring minimal disruption to industrial processes.

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MANUFACTURING AND TESTING EXCELLENCE

The company’s commitment to product integrity is anchored by its National Accreditation Board for Testing and Calibration Laboratories (NABL)-certified materials laboratory, which operates as an integral part of the Company’s manufacturing value chain. Every production batch—whether special electrodes, fluxcored wires or wear plates—passes through this facility for validation against stringent internal and customerspecific standards.

To replicate service conditions, the laboratory conducts dual-path abrasion testing: a Dry-Sand Rubber-Wheel rig simulates low-stress sliding wear, while an Air-Jet apparatus reproduces high-velocity particle erosion. Data from these trials allows experts to select or finetune consumables that deliver optimal chemical composition and the lowest possible wear rate for the customer’s specific operating environment.

This closed-loop testing framework not only ensures repeatable quality but also underpins the Company’s value proposition of extending component life and reducing total cost of ownership for clients across cement, steel, power, and mining sectors.

GO-TO-MARKET STRATEGY

Diffusion Engineers’ commercial blueprint for FY 202628 pivots on three reinforcing pillars—market coverage, product leadership and performance discipline— underpinned by a robust channel ecosystem and customer-success playbook.

Penetration into new markets is a core aspect of our targeted growth strategy. Our dedicated ‘New Business Development’ Department actively pursues opportunities to generate fresh leads and identify promising areas in products or services previously unexplored by the Company. This strategic approach enables us not only to strengthen our existing expertise in key industries such as cement but also to push boundaries within heavy engineering by developing innovative equipment offerings that, while established within the industry, represent new ventures for the company.

With the incremental revenue anticipated from deeper market penetration and a strengthened dealer network, we are now sharpening its focus on achieving the optimal product mix across its portfolio. By aligning product focus with market pull and operational

realities, we aim to capture higher-value projects, improve blended profitability, and ensure sustainable growth across economic cycles.

Channel partners represent a significant and strategic growth avenue for us. Recognising their crucial role, we have prioritised expanding and nurturing our dealer network this year. To strengthen these partnerships, we have entered into Memorandums of Understanding (MoUs) with more than 50 dealers across India. This structured approach is designed not only to encourage mutual growth and increased sales but also to foster stronger and lasting business relationships, thereby driving overall market penetration and enhancing customer reach nationwide.

Further bolstering this comprehensive growth strategy is our robust sales force comprising multitudes of dedicated sales executives. Strategically positioned at key industrial hubs and market centres across India, these professionals play a pivotal role in ensuring consistent market coverage and timely response to customer needs. Their proactive presence not only enhances our capacity to engage closely with customers but also provides crucial insights into regional market dynamics, enabling us to swiftly capitalise on emerging opportunities. This geographically distributed sales team acts as a vital link between our channel partners and direct customers, effectively driving deeper market penetration and fostering stronger relationships across our entire customer base.

To support these strategic initiatives and deepen technical engagement, we have institutionalised regular product training sessions and on-site workshops at customer locations. These sessions— conducted jointly by application engineers and product heads—are tailored to specific industry usecases, helping plant teams optimise consumable usage, adopt best practices in wear protection, and reduce unplanned downtimes. Beyond knowledge transfer, these interactions serve as a feedback loop, allowing the Company to refine its offerings based on real-world operating conditions. This hands-on approach not only strengthens customer relationships but also reinforces Diffusion Engineers’ positioning as a solution partner rather than a transactional vendor.

PERFORMANCE HIGHLIGHTS

During the year, the Company successfully completed the reconditioning of a 2 800 mm-diameter RAL—

Annual Report 20 24 - 25 45

work that only a handful of engineering firms in India can execute at full scale. The assignment required precision machining across the entire 2.8-metre span, reaffirming our capability to handle exceptionally large refurbishment projects.

A notable international milestone involved the manufacture and export of a rotor assembly for a Russian customer. Fabricated as a single piece in our plant and shipped in three transportable sections, the rotor was re-assembled on site by the client at –20 °C. Post-commissioning feedback confirmed that dimensional integrity and performance targets were fully met, underscoring the robustness of our fabrication standards in extreme operating environments.

In the cement sector, we executed an 18.6-metre kiln-shell replacement on a turnkey basis. The scope covered detailed engineering, supply of the new shell and tyre, removal of the existing section, and complete re-installation. The plant resumed operations with stable parameters and smooth running—one of the few instances in India where such a large-scale kiln intervention has been carried out outside the original equipment manufacturer’s purview. A separate export engagement required a comprehensive mechanical study and skew correction of support rollers, followed by a new kiln-shell replacement; subsequent data show significant gains in thermal efficiency and equipment reliability.

The Company also commissioned a series of compound-cast rollers that have already logged 24 000 operating hours without a single technical snag. For context, forged rollers typically achieve around 20 000 hours of service life, while compound-cast rollers are benchmarked at roughly 35 000 hours. Surpassing the forged-roller standard by a considerable margin at this stage of endurance testing underscores the superior metallurgy and quality controls embedded in our manufacturing processes.

We successfully executed a complete turnkey project involving the design, manufacturing, supply, dismantling, and reassembly of an 80 metric ton Kiln shell for one of India’s leading steel manufacturers. This project required high-precision fabrication, meticulous planning, and seamless coordination across multiple departments and on-site teams. Despite the sheer scale and engineering complexity, the entire operation was completed within the committed timeline and without a single safety incident, reflecting our deep

commitment to both quality and workplace safety. This project also demonstrated our capability to deliver mission-critical equipment that forms the backbone of industrial processing units.

In another major engagement within the steel sector, we delivered over 300 continuous casting roller assemblies, each involving complex precision machining, specialized hardfacing for wear resistance, and stringent assembly standards. These roller assemblies are vital components in continuous casting operations, which are among the most demanding environments in steel production. Designed to withstand extreme thermal and mechanical stress, our assemblies contribute directly to minimized downtime, longer equipment life, and stable production cycles. The project further underscored our expertise in manufacturing high-performance assemblies for harsh, continuous operations in heavy industry.

OPERATIONAL HIGHLIGHTS

FY 2024–25 was a year of meaningful operational progress for us, driven by a focused agenda of strengthening core manufacturing capabilities, enhancing machining precision, and laying the groundwork for future capacity expansion.

During the year, significant investments were made to augment our production and machining infrastructure, enabling us to meet increasing customer demand while improving the consistency and turnaround of our offerings. A new flux-cored wire (FCW) manufacturing line was successfully commissioned, addressing both in-house consumption and the growing requirements of our direct-to-customer (D2C) segment. At our Nimji facility, where thinner wire gauges were previously constrained by capacity, we installed specialised wire-drawing machines, eliminating a key production bottleneck and improving the flow of operations in our consumables vertical.

Our heavy engineering and component machining capabilities also saw major upgrades. We installed two CNC lathe machines at Nimji to support higher accuracy and closer tolerances for precision jobs. Additionally, we upgraded our heavy engineering and component machining capabilities by deploying state-of-theart CNC Horizontal-Lathe Machine and a 6.5-metre swing Vertical Lathe Machine. These enhancements significantly expand our ability to manufacture larger, high-precision components and better serve evolving

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Statutory Reports Financial Statements

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customer requirements. We are also in the process of commissioning a CNC Horizontal-Boring Machine(X8m; Y-3.5m; Z+W-2m).

In parallel with these infrastructure improvements, we have launched a structured 5S implementation programme across all major production units. This ongoing initiative has already delivered measurable improvements in material handling, space utilisation, and workplace efficiency, and is central to building a culture of operational discipline and continuous improvement across the organisation.

Looking ahead, we have initiated multiple capacity expansion projects in response to market traction and strategic growth plans. At our flagship facility in Nimji, we have embarked on a major expansion project to double the plant’s installed capacity, further strengthening our ability to deliver across product lines such as flux-cored wires, wear plates, and heavy engineering solutions.

In addition to scaling existing facilities, we are also introducing two new manufacturing units that mark important additions to our capabilities. The first is a new strip slitting plant that will be used to manufacture steel strips, which is a critical raw material for flux cored wires. The second is a new plant dedicated to special electrodes, aimed at expanding our existing electrode manufacturing capacity to meet increasing customer demand across industry verticals.

Together, these developments reflect a calibrated and future-ready approach to operations—one that balances short-term efficiency with longterm scalability, and reinforces our commitment to delivering high-quality, high-performance solutions across a diverse and growing customer base.

CERTIFICATIONS

At Diffusion Engineers, our commitment to quality, safety, and environmental responsibility is reflected in the certifications we maintain across our operations. We adhere to internationally recognized management systems that ensure our processes meet the highest standards of compliance and performance. These include:

ISO 14001:2015 – Environmental Management System, demonstrating our dedication to sustainable practices and minimizing environmental impact.
ISO 45001:2018 – Occupational Health and Safety Management System, underscoring our focus on

creating a safe and healthy working environment for all employees.

ISO 9001:2015 – Quality Management System, ensuring consistent delivery of high-quality products and services that meet customer and regulatory requirements.

These certifications form the foundation of our operational excellence and continuous improvement philosophy.

Our commitment to quality, innovation, and continuous improvement is reflected in the certifications we’ve earned:

NABL Accreditation: Our in-house testing laboratory is NABL (National Accreditation Board for Testing and Calibration Laboratories) accredited, ensuring the highest standards in testing accuracy, reliability, and compliance. This accreditation is a testament to our technical competence and consistent quality control across materials and products.
DSIR Recognition: Our R&D facility is officially recognized by the Department of Scientific and Industrial Research (DSIR), Government of India, with certification valid through March 31, 2027. This recognition affirms our sustained investment in research and innovation, as well as our capabilities in developing indigenous technologies and improving manufacturing processes.

AWARDS AND RECOGNITIONS

We are proud to share that we have been certified as a Great Place to Work for the third consecutive year. This recognition is a testament to our strong organisational culture, employee-centric policies, and the collaborative environment we continue to foster across all levels of the company. Being consistently acknowledged reinforces our belief that investing in our people and building a positive workplace directly contributes to our sustained business success.

OUTLOOK, RISKS AND CONCERNS

Outlook

India moves into FY 2026 with a supportive macro backdrop: headline retail inflation has dipped below the three-per-cent threshold for the first time in six years and is expected to stay there through the June quarter of FY 26, giving the Reserve Bank room to remain accommodative. Simultaneously, the

Annual Report 20 24 - 25

Union Budget has preserved its record-high capitalexpenditure envelope of ₹11.21 lakh crore (3.1 % of GDP), keeping the multi-year highway, housing, railway and energy pipelines on track. Leading indicators for our core end-markets—cement dispatches, crudesteel utilisation, and renewables build-out—continue to point to mid-single-digit growth over the next 12– 18 months. Within this environment, the Company’s offering is largely OPEX-linked, tied to equipment wear rates and maintenance schedules rather than greenfield capex cycles, providing a measure of resilience across economic swings.

Risks and Concerns

Raw-material price volatility - Core inputs such as nickel, chromium and high-alloy steels have shown sharp swings—nickel, for instance, traded between US $14,100 and US $16,700 per tonne in Q1 2025 alone. Sudden spikes can compress margins until customer prices reset. The company mitigates this by multi-vendor sourcing, quarterly repricing clauses in contracts, and selective commodity hedging.

End-market cyclicality - A prolonged slowdown in steel or cement output could defer kiln shutdowns and reduce consumable off-take. The Company counters this by diversifying exposure to power, rail, mining and defence, and by structuring maintenance agreements that guarantee minimum call-outs regardless of production levels.

options, and is localising select grades through Indian ferro-alloy suppliers.

Competitive pressure from low-cost imports - Cheaper electrodes and wires from East-Asian producers can erode price realisation in commoditised SKUs. Our focus on life-cycle-cost audits, faster onsite service, and proprietary high-performance consumables to differentiate, while the “Make-in-India” preference in Government and PSU tenders offers an additional buffer.

Regulatory and ESG compliance - Emerging norms on shop-floor emissions and hazardous-waste disposal may require incremental capex. The Company is progressing on an ISO 14001 roadmap, conducts periodic third-party audits, and is investing in lowfume, chromium-free wire formulations to stay ahead of regulatory curves.

Cyber-security threats - Manufacturing was the target of roughly two-thirds of all ransomware incidents tracked in India during Q1 2025, underscoring the vulnerability of operational-technology networks.

Working-capital and credit risk - Lengthening receivable cycles—especially with public-sector undertakings and EPC contractors—can strain liquidity. The Company now enforces stricter credit screening, milestone-based billing, and embeds dayssales-outstanding targets in sales KPIs.

OVERALL ASSESSMENT

Energy and utilities cost escalation - Rising grid tariffs or fuel prices would inflate conversion costs at heat-intensive plants. The mitigation pathway includes on-site solar capacity being commissioned at Nimji in Q3 FY 26, energy-efficiency retrofits, and cost-passthrough provisions embedded in multi-year contracts.

Foreign-exchange movement - Rupee depreciation inflates the landed cost of imported alloys and speciality spares. A natural hedge from export revenues, combined with forward covers on large-value dollar payables, limits net exposure.

Supply-chain disruptions - Geopolitical events or port congestion could delay critical inputs, particularly speciality alloys sourced overseas. The Company carries strategic safety stocks, maintains dual-port routing

While FY 2025-26 offers a constructive demand environment, management recognises the need for constant vigilance against cost volatility, supply-chain fragility and digital threats. By broadening its sector footprint, tightening operational controls, and investing in ESG and cyber safeguards, the company believes it is well placed to navigate foreseeable uncertainties and protect profitability in the year ahead.

INTERNAL CONTROL SYSTEM & ADEQUACY

As per the explanation to clause (e) of Section 134(5) of the Companies Act, 2013, Internal Financial Controls (IFC) refer to the policies and procedures adopted by a company to ensure the orderly and efficient conduct of its business. This includes adherence to

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Statutory Reports Financial Statements

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internal policies, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and the timely preparation of reliable financial information.

Diffusion has proactively aligned its internal financial control systems with the requirements of the Companies Act, 2013. These controls are designed to enhance transparency, accountability, and integrity across all business operations. The internal control framework facilitates the identification and assessment of key risks and supports the implementation of appropriate mitigation strategies. The Company has successfully implemented a robust and comprehensive control framework, and continues to monitor its effectiveness on an ongoing basis.

The internal control systems at Diffusion are appropriate and commensurate with the size, scale, and complexity of its operations. These systems provide reasonable assurance regarding the reliability of financial and operational information, compliance with applicable laws and regulations, protection of assets from unauthorised use or disposition, proper authorisation of transactions, and conformity with established corporate policies.

Diffusion has a clearly defined delegation of authority framework, with prescribed approval limits for both revenue and capital expenditures. It has also institutionalised processes for the formulation and periodic review of annual and long-term strategic business plans.

The Company employs advanced technology platforms, including a robust ERP system, to capture and consolidate financial and operational data across all locations. This enables seamless information exchange and efficient decision-making. Continuous efforts are being made to align internal controls and processes with globally recognised best practices.

To ensure independent oversight, Diffusion has appointed an Internal Auditor to carry out audits in accordance with a structured internal audit plan. This plan is reviewed quarterly in consultation with the Statutory Auditors and the Audit Committee. The internal audit covers critical operational areas such as project execution, finance and accounting, procurement, human resources, travel, insurance, and IT systems, with a focus on evaluating the effectiveness of internal controls and risk management practices.

The Audit Committee plays an active role in overseeing the internal control environment. It regularly reviews the findings and recommendations of internal and statutory auditors, and ensures timely implementation of corrective actions wherever necessary. The Committee also engages with the Statutory Auditors to assess the adequacy and effectiveness of internal financial controls and keeps the Board of Directors periodically updated on significant observations and developments.

FINANCIAL PERFORMANCE

The Company demonstrated robust growth, with standalone revenue rising 22.99% to ₹3,250.86 million, while consolidated revenue increased 20.65% to ₹3,445.23 million. Profitability surged, with standalone EBITD up 35.05% and PBT climbing 36.85%, reflecting strong operational efficiency. Standalone PAT jumped 44.26% to ₹337.53 million, while consolidated PAT grew 17% to ₹360.41 million. Total Comprehensive Income (standalone) rose 44.63%, underscoring enhanced financial health. However, consolidated Basic EPS declined 12.31% due to higher share count, whereas standalone Diluted EPS surged 44.30%, indicating improved earnings distribution. The company’s performance highlights strong revenue growth, margin expansion, and profitability, though consolidated EPS faced dilution. Overall, the results reflect solid execution and a strengthening market position.

Annual Report 20 24 - 25

( I Million)

			(`I`Million)
Particulars	Financial Year		Increase %
	2024-25	2023-24
Total Revenue (Standalone)	3,250.86	2,643.19	22.99%
Total Revenue (Consolidated)	3,445.23	2,855.62	20.65%
Earnings before interest, tax, depreciation (EBITD)-Standalone	408.82	302.70	35.05%
Earnings before interest, tax, depreciation (EBITD)-Consolidated	470.77	388.68	21.12%
Proft Before Tax (Standalone)	433.27	316.58	36.85%
Proft Before Tax (Consolidated)	469.04	410.84	14.17%
Proft after tax (PAT) (Standalone)	337.53	233.95	44.26%
Proft after tax (PAT) (Consolidated)	360.41	308.04	17.00%
Total Comprehensive Income (Standalone)	336.14	232.42	44.63%
Total Comprehensive Income (Consolidated)	360.92	304.38	18.58%
Basic Earnings Per Share (EPS) (Standalone)	9.02	8.35	8.02%
Basic Earnings Per Share (EPS) (Consolidated)	9.59	10.94	-12.31%
Diluted Earnings Per Share (EPS) (Standalone)	9.02	6.25	44.30%
Diluted Earnings Per Share (EPS) (Consolidated)	9.59	8.19	17.15%

Underlying EBITDA is defined by exclude exceptional item, other income and share of profit and loss on associate companies. Consolidated PBT is defined net of the share of profit and loss on associate companies.

HUMAN RESOURCE

Our Company continues to place its people at the core of its success. We recognize that our employees are our most valuable asset and the driving force behind all our operations. We strive to foster an environment that promotes excellence in quality, productivity, efficiency, and customer satisfaction.

We take pride in our high levels of employee retention and organizational loyalty, a testament to the culture of trust, growth, and recognition that we have cultivated over the years. Our people-centric approach continues to foster a sense of belonging, resulting in a stable and committed workforce.

Leadership development remains a cornerstone of our HR strategy. We actively invest in building futureready leaders through structured learning pathways and advanced management programs. Notably, we have nominated several senior leaders to attend the Post Graduate Certification in Senior Management at

IIM Nagpur—an initiative aimed at equipping them with strategic decision-making and transformational leadership capabilities.

In a significant milestone during the year, we welcomed Mr. Ramesh Kumar Narasinghbhan as our new Chief Executive Officer. With his extensive leadership experience and deep industry knowledge, he is wellpositioned to lead the company into its next phase of growth and operational excellence. His appointment reinforces our commitment to strong, visionary leadership and sustained value creation.

Our HR policies continue to evolve with the goal of attracting and retaining top-tier talent while building a diverse and inclusive workforce that reflects our values and vision.

The Company employed 486 employees and 179 workers as of March 31, 2025, as compared to 460 employees and 180 workers as on March 31, 2024.

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Statutory Reports Financial Statements

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DETAILS OF SIGNIFICANT CHANGE

Standalone Ratio

Sr. No.	Particulars	As at March 31, 2025	As at March 31, 2024	% Variance	Reason for variance
1	Current Ratio	4.20	1.80	134.11%	Variance is due to increase in cash and cash equivalents due to IPOproceeds.
2	Debt Equity Ratio	0.06	0.19	-67.77%	Variance is due to repayment of debt and issue of fresh equity.
3	Debt Service Coverage Ratio	27.75	26.95	2.97%	-
4	Return on Networth	12.66%	14.85%	-14.80%	-
5	Inventory Turnover Ratio	5.77	5.43	6.15%	-
6	Trade Receivables Turnover Ratio	4.18	3.73	12.05%	-
7	Net Capital Turnover Ratio	2.28	4.58	-50.29%	Variance is due to increase in cash and cash equivalents due to IPOproceeds.
8	Net Proft Margin (%)	10.68%	9.10%	17.39%	-
9	Return on Capital employed	12.09%	15.73%	-23.17%	Variance is due to issue of fresh equity and increase in operatingmargins.
10	Return on Investment	9.51%	13.12%	-27.54%	Variance is due to issue of fresh equity and increase in operatingmargins.
11	EBIDTA Margin (%)	12.94%	11.77%	9.89%

Consolidated Ratio

Sr No.	Particulars	As at March 31, 2025	As at March 31, 2024	% Variance	Reason for variance
1	Current Ratio	4.38	1.89	131.40%	Variance is due to increase in cash and cash equivalents due to IPOproceeds
2	Debt Equity Ratio	0.06	0.18	-65.15%	Variance is due to repayment of debt and issue of fresh equity
3	Debt Service Coverage Ratio	29.37	33.30	-11.81%	-
4	Return on Networth	12.88%	18.52%	-30.44%	Variance is due to increase in Share- holders Equityas a result of IPO
5	Inventory Turnover Ratio	5.67	5.44	4.20%	-
6	Trade Receivables Turnover Ratio	4.55	4.18	8.96%	-
8	Net Capital Turnover Ratio	2.29	4.50	-49.13%	Variance is due to increase in cash and cash equivalents due to IPOproceeds
9	Net Proft Margin (%)	10.48%	10.66%	-1.72%	-
10	Return on Capital employed	15.94%	20.63%	-22.77%	Variance is due to increase in Share- holders Equityas a result of IPO
11	Return on Investment	9.73%	16.08%	-39.45%	Variance is due to increase in Share- holders Equityas a result of IPO
12	EBIDTA Margin (%)	14.04%	15.13%	-7.17%	-

CAUTIONARY STATEMENT

The Company’s plans, beliefs, and expectations for the future, as well as other forward-looking statements based on management’s current expectations or beliefs, may be expressed in part in the Management Discussion and Analysis. A number of assumptions regarding the Company’s operations, external factors, and third-party sources are taken into account. Both known and unknown risks and uncertainties are included, which could result in actual results that are materially different from those anticipated by the relevant forward-looking statements. It is important to remember that any forward-looking comments in the Management Discussion and Analysis about previous patterns or actions do not imply that they will persist in the future. Any forward-looking statements made, whether in response to new information, anticipated events, or otherwise, are not subject to correction or revision. It is not advisable to overly depend on forward-looking statements, as they are only indicative as of the Annual Report’s publication date. The Company and the Management shall not be held liable for any loss or damage, which may arise, as a result of any action taken on the basis of the information contained herein.

Annual Report 20 24 - 25

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CIN: L99999MH2000PLC124154

	BOARD OF DIRECTORS	BOARD OF DIRECTORS
Din	Name	Designation
00049106	Mr Prashant Garg	Chairman and ManagingDirector
01784644	Ms Chitra Garg	Non- Executive Director
08558736	Mr Nitin Garg	Non- Executive Director
07900294	Mr Anil Kumar Trigunayat	Independent Director
07059616	Mr SherrySamuel Oommen	Independent Director
10753545	Ms Deepali Sameer Bendre	Independent Director

Chief Executive Officer

Mr Ramesh Kumar Narasinghbhan

Chief Financial Officer Mr Abhishek Mehta

Company Secretary and Compliance Officer Ms Chanchal Jaiswal

Bankers

HDFC Limited DBS Bank India Limited ICICI Bank Limited YES Bank Limited

Registrar & Transfer Agents:-

Statutory Auditors Name & Address : Bigshare Services Private Limited , PGS & Associates, Chartered Accountants Office No S6-2, 6th floor Pinnacle Business Park, Next to Ahura Centre, Mahakali Caves Road, (Firm Registration No. – 122384W), Mumbai Andheri (East) Mumbai - 400093, India. Secretarial Auditors Tel. : 022-62638200 Mr. Madhav Kawde, Practicing Company Secretary Fax : 022-68638299 (CP No. 1892), Mumbai E-mail : [email protected] Website : www.bigshareonline.com Internal Auditors Listed With Chitaley Mehta & Associates, Chartered Accountants, National Stock Exchange of India Limited (Firm Registration No- 127021W), Nagpur BSE Limited

Cost Auditor s

M/s A. B. Verma & Co., Cost Accountants, Nagpur (Firm Registration No. 102527), Nagpur

Registered Office:

T-5 & 6, MIDC, Hingana, Nagpur, Maharashtra, India, 440016 Mobile No.: 9158317943 E-mail - [email protected] Website - www.diffusionengineers.com

Plant Locations: -

Manufacturing Units	Operational from	Address
Unit I	1994	T-5, T-6, Nagpur Industrial Area, MIDC, Hingna,
		Nagpur – 440016 Maharashtra
Unit II	2000	N-78, N-79, Nagpur Industrial Area, MIDC, Hingna,
		Nagpur – 440016 Maharashtra
Unit III	2015	T-12, Nagpur Industrial Area, MIDC, Hingna,
		Nagpur – 440016 Maharashtra
Unit IV	2016	Khasra No. 35, 36, 38/1, 38/2, 38/3, Khapri (Uma),
		Nagpur- 441 501,Maharashtra

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Financial Statements

Corporate Overview

Board’s Report

Dear Members

The Board of directors take pleasure in presenting the 43[rd] (Forty-Third) Board’s Report on the business and operations of the Company for the financial year ended March 31, 2025. This being the first report after the Initial Public Offer (“IPO”) and listing of the equity shares on BSE Limited (“BSE”) and National Stock Exchange of India Limited (“NSE”) (BSE and NSE hereinafter collectively referred as “Stock Exchanges”), the Board welcomes all the public shareholders and look forward to your continued faith and support.

Results of Company’s operations and Company’s Performance

(Amount In Millions)

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Standalone Consolidated
Sr.
no. [Particulars] For the year ended March 31 For the year ended March 31
2025 2024 2025 2024
i. Revenue from Operations 3,160.07 2,571.26 3,351.96 2,781.45
ii. Other Income 90.79 71.94 93.27 74.17
iii. Total income (I + II) 3,250.86 2,643.19 3,445.23 2,855.62
iv. Expenses
Operating Expenses 2,151.90 1,775.93 2,228.56 1,856.51
Employee Benefits Expenses 399.15 345.51 419.02 360.56
Finance Costs 21.95 16.94 22.74 17.55
Depreciation and Amortisation Expenses 44.39 38.55 52.75 45.49
Admin & Other Expenses 200.20 147.11 233.61 175.70
Total Expenses 2,817.59 2,324.05 2,956.68 2,455.81
v. Profit/(Loss) Before Share of Profit of Joint 433.27 319.14 488.55 399.81
Venture,
Exceptional Items and Tax (III-IV)
vi. Share of Profit of Joint Venture - - (19.51) 13.60
vii. Profit Before Exceptional Items and 433.27 319.14 469.04 413.41
Tax(V+VI)
viii. Exceptional item - (2.57) - (2.57)
ix. Profit/(Loss) before tax (VII+VIII) 433.27 316.58 469.04 410.84
x. Tax expenses 95.74 82.63 108.63 102.80
xi. Profit/(Loss) for the period/year after tax 337.53 233.95 360.41 308.04
(IX -X)
xii. Total Other Comprehensive Income (1.39) (1.54) 0.51 (3.67)
xiii. Total Comprehensive Income for the year 336.14 232.42 360.92 304.38
(XI+XII)
xiv. Paid-up Equity Share Capital (Face value of 374.26 280.21 374.26 280.21
10/-each) xv. Earnings Per Equity Share of 10/- each:
- Basic 9.02 8.35 9.59 10.94
9.02 6.25 9.59 8.19
- Diluted
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Annual Report 20 24 - 25 53

Innovative Superconditioning Solutions

Financial Position

(Amount In Million)

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Standalone Consolidated
Particulars For the year ended March 31 For the year ended March 31
2025 2024 2025 2024
Equity
Equity Share Capital 374.26 280.21 374.26 280.21
Other Equity 3,176.15 1,502.98 3,314.51 1,626.84
Non-controlling Interest - - 4.46 3.14
Total Equity 3,550.42 1,783.20 3,693.24 1,910.19
Non-Current Liabilities 61.62 58.06 66.22 62.43
Current Liabilities 678.99 755.70 684.96 782.63
Total Liabilities 740.61 813.76 751.18 845.05
Equity + Liabilities 4,291.02 2,596.96 4,444.42 2,755.24
Property, Plant and Equipment 950.70 877.93 974.00 905.71
Capital work-in-progress 31.44 11.05 31.44 11.05
Intangible Assets 4.83 4.25 4.83 4.25
Other Non-Current Assets 450.51 347.14 436.47 354.04
Current Assets 2,853.44 1,356.57 2,997.69 1,480.19
Total Assets 4,291.02 2,596.96 4,444.42 2,755.24
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1. Financial Performance

Revenue – Standalone

On a standalone basis in financial year 2024-25, our Revenue from operations has shown an increase of 22.90% which resulted increase of Revenue to 3,160.07/- million in FY 2024-25 as compared to previous FY 2023-24 which was 2,571.26/- million.

Revenue – Consolidated

On consolidated basis in financial year 2024-25, our Revenue from operations has shown an increase of 20.51% which resulted increase of Revenue to 3,351.96/- million in FY 2024-25 as compared to financial year 2023-24 which was 2,781.45 million.

Profits – Standalone

On a standalone basis in financial year 2024-25, the profit before tax and exceptional items has shown an increase of 35.76% and stood at 433.27/- million and Profit after exceptional items and tax stood at 337.53/million. Whereas, in FY 2023-24 the profit before tax and exceptional items stood at 319.14/- million and Profit after exceptional items and tax at 233.95/- million.

Profits – Consolidated

On consolidated basis in financial year 2024-25, the profit before tax and exceptional items has shown an increase of 13.46% and stood at 469.04/- million and profit after exceptional items and tax is 360.41/million. Whereas, in FY 2023-24 the profit before tax and exceptional items stood at 413.4/- million and Profit after exceptional items and tax at 308.04/- million.

EPS- Standalone

On Standalone basis, basic earnings per share increased to 9.02/- per Equity share for financial year 2024-25 as compared to basic earnings per share of 8.35/- per Equity share for last financial year 2023-24 and

Diluted earning per share increased to 9.02/- per Equity share for financial year 2024-25 as compared to diluted earnings per share of 6.25/- per Equity share for last financial year 2023-24.

EPS- Consolidated

On Consolidated basis, basic earnings per share decreased to 9.59/- per Equity share for financial year 2024-25 as compared to basic earnings per share of 10.94/- per Equity share for last financial year 2023-24 and

Diluted earnings per share increased to 9.59/- per Equity share for financial year 2024-25 as compared to diluted earnings per share of 8.19/- per Equity share for last financial year 2023-24.

2. Dividend

Your directors have recommended a final dividend of 1.50/- (One Rupees Fifty Paisa Only) per Equity share for financial 2024-25 aggregating to 56.14/- million subject to approval of Shareholders at the ensuing 43[rd] Annual General Meeting of the Company to be held on Tuesday, July 22, 2025.

3. Business Description and State of Company’s Affairs

Diffusion Engineers Limited was incorporated in the year 1982. The Company is engaged in the business of

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Corporate Overview Financial Statements

providing engineering solutions to customers both in domestic and international market. The Company has been in existence for over four decades and provides a wide range of products and services including manufacture of special welding consumables, wear plates and heavy engineering equipment for core industries and provide special and customized repairs and reconditioning services of heavy machinery and equipment.

The company’s state of affairs reflects robust growth and a commitment to innovation, evidenced by its strategic expansions into new markets and pioneering projects that set industry benchmarks. Diffusion’s steadfast dedication to quality, reliability, and customer satisfaction underpins its success, making it a trusted partner for organizations seeking transformative solutions in today’s dynamic business landscape.

4. Share Capital Structure

The Equity Shares of the Company were listed on Stock Exchanges with effect from October 04, 2024 and the Company’s shares are compulsorily tradable in electronic form.

The Authorized Share Capital of the Company is 40,00,00,000/- [Rupees Forty Crores Only] consisting of 4,00,00,000 [Four Crores] Equity Shares having face value of 10/- [Rupees Ten Only] each. During the year there has been no change in the Authorised Share Capital of the Company.

The paid-up share capital of the Company is 37,42,62,590 [Rupees Thirty-Seven Crore forty-two lakh sixty-two thousand five hundred and ninety only] consisting of 3,74,26,259 [ Three Crore seventyfour lakh twenty-six thousand two hundred and fiftynine] Equity Shares having face value of 10/- [Rupees Ten Only] each.

During the year, your Company has issued and allotted: 94,05,000 [Ninety-Four Lakhs Five Thousand] Equity shares having face value of ` 10/- [Rupees Ten Only] each through Initial Public Offer [IPO]

5. Transfer to Reserves

The Company has not transferred any amount to the general reserve account during the reporting period.

6. Capital Expenditure on Assets

During financial year 2024-25 the company incurred capital expenditure of 142.29/- million as compared 324.57/- million in the last financial year 2023-24.

7. Change in the nature of business

During the year, the company has not changed its business and the activity of the company continues to be the same .

8. Annual Return

Pursuant to Section 92(3) of the Companies Act 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return for FY 2024-25 is available on Company’s website https:// www.diffusionengineers.com/investors-relation

9. Particulars of Loans, Guarantee and Investment

Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 forms part of the Notes to the Financial Statements provided in this Annual Report.

10. Particulars of Loan to Directors or to Entities in which Directors are interested under Section 185 of the Companies Act, 2013

During the period under review, your Company has not given any loan to any Director or to entities in which Directors are interested under section 185 of Companies Act, 2013

11. Public Deposits

The Company has not accepted deposits within the meaning of the provision of Chapter V of the Companies Act, 2013 read with the relevant Rules.

12. Maintenance of Cost Records

Company has maintained cost records as per section 148 (1) of Companies Act, 2013.

13. Particulars of Contracts or Arrangements made with Related Parties

All contracts/ arrangements/transactions entered by the Company with the related parties during the financial year 2024-25 were in its ordinary course of business and at arm’s length basis.

Suitable disclosure as required by the Indian Accounting Standards (IND AS 24) has been made in the notes to the Financial Statements which forms part of the Annual Report.

As per the provisions of Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, (‘Listing Regulations’) the Company has formulated and adopted Policy on Related Party Transactions; details of the same are provided in Annexure-6 to the Board’s Report.

Further, the Company during the reporting year, has not entered into a contract/ arrangement/ transaction which is considered material in accordance with the definition of materiality as included in the Company’s Related Party Transaction Policy read with Regulation 23 of Listing Regulations as amended from time to time.

The disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013

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in Form AOC-2 is appended as Annexure-2 to this Board’s Report.

14. Material Changes and commitments, affecting the financial position of the Company which have occurred between the end of the Financial Year of the Company to which the Financial Statements relate and the date of the Report:

The Shareholders of the Company on April 03, 2025 by way of postal ballot through remote e-voting process approved Re-Appointment of Mr. Prashant Garg (DIN: 00049106) as the Chairman and Managing Director of the Company for a period of Five (5) years with effect from 16[th] March, 2025 till 15[th] March, 2030.

The Board of Directors at its meeting held on May 15, 2025 approved,

i) The proposal for sale of 2.06% stake of its associate company, LSN Diffusion Limited.
ii) ‘Diffusion Engineers Limited – Employee Stock Option Scheme 2025’ and implementation through an irrevocable employee welfare trust namely ‘Diffusion ESOP Trust’ to be set-up by the Company, pursuant to the provisions of Section 62(1)(b), of the Companies Act, 2013 read with rules framed thereunder, and the relevant provisions of the Securities and Exchange Board of India (Share Based Employee Benefits & Sweat Equity) Regulations, 2021, subject to the approval of shareholders of the Company by way of special resolution.

15. Board Policies

The details of the policies approved and adopted by the board as required under Companies Act, 2013 and Listing Regulations are provided in Annexure-6 to the Board’s Report.

16. Risk Management

The Board had constituted the Risk Management Committee. The composition of Risk Management Committee is given in the Corporate Governance Report, forming part of the Annual Report. Further, pursuant to Section 134(3)(n) of the Companies Act, 2013 and Regulation 17(9) of SEBI Listing Regulations, the Company has formulated and adopted the Risk Management Policy inter-alia including the details/ process about identification of elements of risks if any, which in the opinion of the Board may threaten the existence of the Company. The aforesaid Risk Management Policy establishes the philosophy of the Company towards risk identification, analysis and prioritization of risks, development of risk mitigation plans and reporting on the risk environment of the Company. This Risk Management Policy is applicable to all the functions, departments and geographical locations of the Company. The purpose of this policy is to define, design and implement a risk management framework across the Company to identify, assess,

manage and monitor risks. Aligned to this, purpose is also to identify potential events that may affect the Company and manage the risk within the risk appetite and provide reasonable assurance regarding the achievement of the Company’s objectives and business continuity.

17. Human Capital Management

At Diffusion Engineers Limited, we deeply value our people and the opportunity to engage with them. We are committed to enhancing their potential through consistent empowerment, continuous learning, and the sharing of knowledge and experiences.

Our policies and processes are designed to align employees with their individual goals and the organization’s objectives. We place strong emphasis on training and development, which has led to the adoption of industry best practices. Additionally, our self-directed learning culture encourages employees to develop at their own pace in environments that best suit their learning preferences.

The Company is also committed to fostering an equal, inclusive, and diverse workforce. As an Equal Opportunity Employer, we ensure non-discrimination in all aspects of employment. This approach not only strengthens our team but also gives us a competitive advantage in staffing and talent retention.

Furthermore, we are dedicated to the protection and advancement of human rights. Our key focus areas include promoting responsible practices across our extensive and diverse supply chain and supporting a corporate culture that champions diversity and inclusion.

We attract highly skilled and educated professionals. As of March 31, 2025, our workforce numbered 486 employees and 179 workers.

18. Management Discussion and Analysis

In terms of the provisions of Regulation 34 read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Management’s Discussion and Analysis Report is presented in a separate section forming part of this Annual Report.

19. Subsidiaries including Material Subsidiaries

Your Company as on March 31, 2025 have following Subsidiaries: -

i. Diffusion Super Conditioning Services Private Limited
ii. Nowelco Industries Private Limited
iii. Diffusion Hernon Adhesive and Sealant Private Limited
iv. Diffusion Engineers Singapore Pte. Ltd.
v. Diffusion Wear Solutions Philippines Inc.
vi. Diffusion Eurasia Mühendislik Sanayi Ve Ticaret Anonim Sirketi

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Financial Statements

Corporate Overview

Following are Associates / Joint Venture of our company: -

i) LSN Diffusion Limited (United Kingdom) ii) Mecdiff SDN BHD (Malaysia)

None of the company ceased to be the subsidiary, joint venture or associate company of Diffusion Engineers Limited during the reporting year.

The Board of Directors in its meeting held on February 07, 2025 approved Incorporation of a Wholly-owned Subsidiary of the Company with the name having prefix “Diffusion Engineers Middle East” or such other name as may be approved by regulatory authorities of United Arab Emirates (UAE) for the purpose of the business related to service of welding and light fabrication shop to cater to Middle Eastern markets. The Company is in process of incorporation.

The company does not have any material subsidiary in terms of Regulation 16(1)(c) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

Pursuant to provisions of Section 129(3) of the Companies Act, 2013, the Company has prepared Consolidated financial statements of the Company and its subsidiary, which form part of the Annual Report. Further, a statement containing the salient features of the financial statement of the Company’s subsidiaries in the prescribed format AOC-1 is appended as an Annexure-1 to the Board’s Report.

In accordance with the third proviso of Section 136(1) of the Companies Act, 2013, the Annual Report of the Company, containing therein its Standalone and Consolidated financial statements have been placed on the website of the Company at https://www. diffusionengineers.com/investors-relation

20. Corporate Governance

The Company has adopted and consistently adheres to best practices in corporate governance. It firmly believes that strong governance is fundamental to sustainable business growth and the enhancement of stakeholder value. The Board of Directors reaffirms its unwavering commitment to maintaining high standards of corporate governance.

Corporate governance at the Company is an ethically driven process rooted in core values that aim to strengthen the organization’s brand and reputation. This commitment is reflected in ethical decisionmaking and responsible business conduct aligned with stakeholders’ expectations.

A detailed report on Corporate Governance is an integral part of this Annual Report and is presented as a separate section herein.

21. Audit reports and Auditors

a) Statutory Auditor

The members at the 41[st] Annual General Meeting held on 25[th] September, 2023 appointed PGS

& Associates, Chartered Accountants (Firm Registration No. – 122384W) as Statutory Auditors of the Company to hold office for a period of five [5] years commencing from conclusion of 41[st] Annual General Meeting till the conclusion of Annual General Meeting to be held in the year 2028. PGS & Associates have confirmed their eligibility and that they are not disqualified under the Companies Act, 2013, for their continuance as Statutory Auditors of the Company.

The Auditors’ Report for FY 2024-25 provided by PGS & Associates, Chartered Accountants, Statutory Auditors of the Company on Standalone and Consolidated Financial Statements (‘Financial Statements’) does not contain any qualification, reservation or adverse remark. The statements made by the Auditors in their report are self – explanatory and do not call for any further comments. The Auditor’s Report is enclosed as separate section with the financial statements in this Annual Report.

b) Secretarial Auditors

Pursuant to provision of section 204 of Companies Act, 2013 read with rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Board of directors on the recommendation of the Audit Committee, in its meeting held on July 31, 2024, appointed Mr. Madhav Kawde, Practicing Company Secretary (CP No. 1892) as Secretarial Auditor to conduct the secretarial audit of the company for the financial year 2024 – 2025.

In terms of provisions of sub-section 1 of section 204 of the Companies Act, 2013, the Company has annexed to this Board’s Report as Annexure-4 , a Secretarial Audit Report given by the Secretarial Auditor. The Secretarial Auditors’ Report for FY 2024-25 does not contain any qualification, reservation, or adverse remark. The statements made by the Secretarial Auditor in his report are self - explanatory and do not call for any further comments.

As required under Listing Regulations the Practicing Company Secretary’s Certificate on Corporate Governance and non-disqualification of directors including KYC requirement is appended as Annexure-8 . The appended certificate does not contain any qualification, reservation or adverse remarks.

Internal Auditors

The Company’s Internal Audit is being conducted by Independent Auditors on quarterly basis and they furnish their quarterly report on their observations to Audit Committee for review.

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As per the provisions of Section 138 of the Companies Act, 2013 and Rules made thereunder, the Company has appointed Chitaley Mehta & Associates, Chartered Accountants, (Firm Registration No- 127021W) as Internal Auditors for the Financial Year 2025 – 2026.

c) Cost Auditors As per Section 148 of the Companies Act, 2013, the Company is required to have the audit of its cost records conducted by a Cost Accountant in practice. The Board on the recommendation of the Audit Committee has appointed M/s A. B. Verma & Co., Cost Accountants, Nagpur (Firm Registration No. 102527/ Membership No. 31367), as the Cost Auditors of the Company for FY 2025 – 2026 under Section 148 and all other applicable provisions of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014.

M/s A. B. Verma & Co., have confirmed that they are free from disqualification specified under Section 141(3) and Section 148(3) read with Section 141(4) of the Act and that the appointment meets the requirements of Section 141(3)(g) of the Act.

The remuneration payable to the Cost Auditors is required to be placed before the members in a general meeting for their ratification. Accordingly, a Resolution for seeking members’ ratification for the remuneration payable to M/s A. B. Verma & Co. is included in the Notice convening the Annual General Meeting.

The Cost Auditors’ Report for FY 2023-24 does not contain any qualification, reservation, or adverse remark.

22. Reporting of Fraud by Auditors

During the year under review, none of the Auditors have reported to the audit committee, under Section 143 (12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Board’s report.

23. Revision of Financial Statements and Board Report

There was no revision of financial statements and Boards’ Report of the Company during the financial year under review. However, for the purpose of IPO, the Company has re-stated the financial statements of preceding three financial years pursuant to the provisions of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (“SEBI ICDR Regulations”).

24. Segment Reporting

The company has only one operating segment i.e “Welding Fabrication Technology and Engineering” as per Ind AS 108 which includes Manufacturing, Trading and Job Work.

25. Board of Directors and its Meeting

The Company has a professional Board with right mix of knowledge, skills and expertise with an optimum combination of Executive, Non- Executive and Independent Directors including Woman Director. The Chairman of the Board is a Executive Director. The Board provides strategic guidance and direction to the Company in achieving its business objectives and protecting the interest of the stakeholders. The Board met Eleven (11) times during the financial year. The maximum interval between any two meetings did not exceed 120 days, as prescribed under Companies Act, 2013. The details pertaining to the composition of the Board of Directors of the Company and the meetings thereof held during the financial year are given in the Report on Corporate Governance section forming part of this Annual Report.

26. Investor Education and Protection Fund (IEPF)

During the year, the Company was not required to transfer any amount to Investor Education and Protection Fund (IEPF) as per the requirements of the IEPF Rules.

27. Directors’ Responsibility Statement

The Standalone and Consolidated financial statements for the financial year ended March 31, 2025 are prepared in accordance with Indian Accounting Standards (Ind AS) under the historical cost convention on accrual basis, the provisions of the Companies Act 2013 (to the extent notified) and guidelines issued by SEBI, Ind AS as prescribed under section 133 of Companies Act, 2013, read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or the revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

I. In the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;
II. They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;
III. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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Corporate Overview Financial Statements

IV. They have prepared the annual accounts on a going concern basis;
V. They have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;
VI. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
(iii) They have registered themselves with the independent director’s database maintained by the Indian Institute of Corporate Affairs in compliance with Rules 6(1) and 6(2) of the Companies (Appointment and Qualification of Directors) Rules, 2014;
(iv) They are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties.

30. Board Evaluation

28. Internal Financial Controls with Reference to Financial Statements

The Company has internal financial control systems to commensurate with the nature of its business, size and complexity of its operations. Internal financial control systems include policies and procedures which are designed to ensure reliability of financial reporting, compliance with policies, procedure, applicable laws and regulations and that all assets and resources are acquired economically, used efficiently and adequately protected.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, audit performed by the Internal, Statutory and Secretarial Auditors and the reviews performed by the relevant board committees, including the audit and management committee, the board is of the opinion that the Company’s internal financial controls were adequate and effective during the financial year 2024-25. For more details, refer to the ‘Internal control systems and their adequacy’ section in the Management’s discussion and analysis , which forms part of this Annual Report.

29. Declaration of Independence by Independent Director

Independent Directors of the Company has provided declarations under Section 149 (7) of the Companies Act, 2013 and Regulation 25 (8) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, that he/she meets with the criteria of independence, as prescribed under Section 149 (6) of the Companies Act, 2013 and Regulation 25 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Your Company has received declarations from all Independent Directors confirming that:

(i) They meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (LODR) Regulations, 2015.
(ii) They have complied with the code for independent directors prescribed under Schedule IV to the Act;

The Board of Directors carried out an annual evaluation of its own performance, Board Committees and individual Directors pursuant to the provisions the Companies Act, 2013 and SEBI Listing Regulations. The evaluation parameters and the process have been explained in Corporate Governance Report .

31. Familiarization Program for Board Members

The Board members are provided with necessary documents / brochures, reports and internal policies to enable them to familiarise with the Company’s procedures and practices. Periodic presentations are made on business and performance updates of the Company, business strategy and risks involved. The Directors are also updated with various regulations prevailing at the time and the new judicial pronouncements, if any.

32. Policy on Directors Appointment, Remuneration and other details

The Nomination and Remuneration Committee (‘NRC’) has adopted the policy and procedures with regard to identification and nomination of persons who are qualified to become directors and who may be appointed in senior management and the same is available on the website of the company at https:// www.diffusionengineers.com/investors-relation This policy is framed in compliance with the applicable provisions of Regulation 19 read with Part D of the Schedule II of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 (‘the Regulations’) and Section 178 and other applicable provisions of the Companies Act, 2013.

The details as required under Section 197 (12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are provided in the Annexure-3 of the Boards’ Report.

33. Directors and Key Managerial Personnel of the Company

(i) The present composition of the Board of the Company is as under:

The Company has eminent individuals from diverse fields as Directors on its Board, who bring in the required skill, integrity, competence, expertise and experience that is required for

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making effective contribution to the Board. The Board comprise of six (6) Directors with an appropriate mix of NonExecutive Directors, Executive Directors and Independent Directors.

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----- Start of picture text -----

Sr Executive/ Non -
Name of Directors DIN Designation
No Executive
1 Mr. Prashant Garg 00049106 Managing Director Executive
2 Mr. Nitin Garg 08558736 Director Non - Executive
3 Ms. Chitra Narendra Garg 01784644 Director Non - Executive
4 Mr. Anil Kumar Trigunayat 07900294 Independent Director Non - Executive
5 Mr. Sherry Samuel Oommen 07059616 Independent Director Non - Executive
6 Ms. Deepali Bendre 10753545 Independent Director Non - Executive
----- End of picture text -----

Appointment/Resignation of Directors

During the financial year under review:

a) Dr. Renuka Garg (DIN: 02815373) tendered her resignation from the post of NonExecutive Director of the Company with effect from July 23, 2024.
b) The Board on the recommendation of Nomination and Remuneration Committee at its meeting held on July 23, 2024 appointed Dr Nitin Garg (DIN: 08558736) as an Additional Director under the category of Non-Executive Director of the Company with effect from July 23, 2024. The appointment was regularised by the shareholders at the Annual General Meeting of the Company held on August 31, 2024.
c) The Board on the recommendation of Nomination and Remuneration Committee at its meeting held on August 26, 2024 appointed Mr. Sherry Samuel Oommen (DIN: 07059616) and Ms. Deepali Bendre (DIN: 10753545) as an Additional Director under the category of Non-Executive Independent Director of the Company with effect from August 26, 2024. Their appointments as Independent Directors for a term of five (5) years with effect from August 26, 2024 was regularised by the shareholders of the Company in their Extra Ordinary General meeting held on August 26, 2024
d) Mr Ajay Jain (DIN: 02815416) and Ms Anita Vijayakar (DIN: 01190200) ceased to be Independent Directors of the company upon completion of their second term of 5 (Five) consecutive years on September 13, 2024

(ii) Key Managerial Personnel (‘KMP’)

In terms of the provisions of Section 2(51) and Section 203 of the Companies Act, 2013 the following are the KMPs of the Company:

Mr Prashant Garg [Managing Director]
Mr Ramesh Kumar Narasinghbhan [appointed as Chief Executive Officer (CEO) of Company with effect from February 13, 2025]
Mr Abhishek Mehta [appointed as Chief Financial Officer, with effect from 29[th] June 2023]
Ms Chanchal Jaiswal [appointed as Company Secretary and Compliance Officer, with effect from 29[th] June 2023]

Appointment/Resignation of Key Managerial Personnel (KMP)

During the financial year under review:

i. Mr Ramesh Kumar Narasinghbhan (PAN: ABOPN4848E) was appointed as Chief Executive Officer (CEO) of Company with effect from February 13, 2025 for the period of 4 (Four) years in the board meeting held on February 07, 2025.
ii. Mr. Prashant Garg (DIN: 00049106) was reappointed as the Chairman and Managing Director for a period of five years with effect from March 16, 2025, pursuant to a resolution passed by our Board of Directors at their meeting held on February 07, 2025 and a resolution passed by Shareholders through postal ballot on April 03, 2025.

Retirement by Rotation:

In terms of the provisions of Section 152 and other applicable provisions, if any, of the Companies Act, 2013, Dr Nitin Garg (DIN: 08558736), Director retires by rotation at the ensuing Annual General Meeting, and being eligible, offers himself for re – appointment.

Accordingly, a Resolution for seeking members’ approval for appointment of Director is included in the Notice convening the Annual General Meeting.

34. Committees of the Board

As on March 31, 2025, the Board has six committees:

i. Audit Committee
ii. Nomination and Remuneration Committee
iii. Corporate Social Responsibility Committee
iv. Stakeholders Relationship Committee
v. Risk Management Committee
vi. Management Committee

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Financial Statements

Corporate Overview

The details of the powers, functions, composition and meetings of the Committees of the Board held during the financial year 2024-25 are given in the Report on Corporate Governance section forming part of this Annual Report.

35. Conservation of Energy, Technology Absorption, Foreign exchange earnings and outgo

The particulars as prescribed under Sub-section (3) (m) of Section 134 of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, are given separately as Annexure-7 to the Board’s Report.

36. Corporate Social Responsibility

The Company is committed to conduct its business in a socially responsible, ethical and environmental friendly manner and to continuously work towards improving quality of life of the communities in its operational areas. The Board of Directors at its meeting held on August 26, 2024 had re-constituted Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of Companies Act, 2013 read with rules formulated therein. The CSR agenda is planned in consultation with the CSR committee members through a systematic independent need assessment. Your Company believes in positive relationships that are built with constructive engagement which enhances the economic, social and cultural well–being of individuals and regions connected to the Company’s activities. Your Company has adopted a detailed policy on Corporate Social Responsibility. The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company including the annual report on the Company’s CSR activities are set out in Annexure-5 of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014.

37. Secretarial Standards

The Company duly complies with all applicable secretarial standards issued by the Institute of Company Secretaries of India.

38. Vigil Mechanism (Whistle Blower Policy)

In terms of the section 177(9) of companies act, 2013 and rules framed thereunder read with Regulation 22 of Listing Regulations, your Company has established a ‘Vigil Mechanism Policy’ and it provides a channel to the employees to report to the appropriate authorities concerns about unethical behaviour, actual or suspected fraud or violation of the Company’s code of conduct policy and provides safeguards against victimization of employees who avail the mechanism and also provide a direct access to the Chairman of the Audit Committee in exceptional cases. Protected disclosures can be made by a whistle blower through an e-mail, or dedicated telephone line or a letter to the concerned authorities. The details of the vigil mechanism (whistle blower policy) are given in Annexure-6 of this Board Report.

39. Prevention of Insider Trading

The Securities and Exchange Board of India (SEBI) vide notification dated January 15, 2015 had put in place a new framework for prohibition of Insider Trading in securities and to strengthen the legal framework thereof. These regulations of the SEBI under the above notification had become effective from May 15, 2015. Whereas on December 31, 2018, the regulations were amended with Securities and Exchange Board of India (Prohibition of Insider Trading) (Amendment) Regulations, 2018 effective from April 1, 2019. Accordingly, the Board has formulated Code of Conduct and Fair Disclosure for Prevention of Insider Trading Policy in accordance with Regulation 8 & 9 of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 for regulating, monitoring and reporting of Trading of Shares by Insiders. The Code lays down guidelines, procedures to be followed and disclosures to be made while dealing with shares of the Company. The details of the Code of Conduct and Fair Disclosure for Prevention of Insider Trading are given in Annexure-6 of this Board’s Report.

37. Code of Conduct

The Directors, KMP’s and Senior Management of the Company have affirmed compliance with Code of Conduct applicable to them during the year ended March 31, 2025. The details of the Code of Conduct for Directors, KMP’s and Senior Management are given in Annexure- 6 of this Board’s Report. The Annual Report of the Company contains a certificate by Ramesh Kumar Narasinghbhan, Chief Executive Officer of the Company, on compliance declaration received from the Members of the Board, KMP’s and Senior Management as an Annexure-9 .

38. Legal, Governance and Brand Protection

The Company continues to focus on the key areas and projects within the Legal, Compliance and Corporate Affairs functions.

39. Enhancing Shareholders Value

Your Company believes that its members are its most important stakeholders. Accordingly, your Company’s operations are committed to the pursuit of achieving high levels of operating performance and cost competitiveness, consolidating and building for growth, enhancing the productive asset and resource base and nurturing overall corporate reputation.

40. Disclosure Requirements

As per Listing regulations, Corporate Governance Report with the Auditors Certificate thereon and the Management Discussion and Analysis Report are attached herewith and forms part of this Report. The Company has devised a proper system to ensure compliance with the provisions of all Secretarial Standards issued by the Institute of Company

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Secretaries of India and that such systems are adequate and operating effectively.

41. Significant and Material Orders Passed by the Regulators or Courts or Tribunals Impacting the Going Concern Status of the Company

There are no orders passed by the Regulators or Courts or Tribunals which would impact the going concern status and the Company’s future operations.

42. Credit Rating Obtained

During the year under review the Company had obtained the Credit rating from CRISIL Ratings Limited and Acuite Ratings & Research Limited for the loans and credit facilities from Banks. The details of Ratings are provided in Corporate Governance Report forming part of this Annual Report.

43. Sexual Harassment of Women at Workplace:

The Company has zero tolerance towards sexual harassment at the workplace and has adopted a Policy on Prevention of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder.

The details of the policy are given in Annexure-6 of this Board’s Report. The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The details of complaints filed, disposed of and pending during the financial year pertaining to sexual harassment is provided in Corporate Governance Report of this Annual Report.

Your company has been certified as “Great place to work” for the third time in a row. The Great Place to Work Assessment is considered a ‘Gold Standard’ in workplace Culture assessment.

44. Maternity Benefit

The company is in compliance with the provisions relating to the Maternity Benefit Act, 1961.

45. Green Initiatives

Electronic copies of Annual Report 2024-25 and the Notice of 43[rd ] Annual General Meeting shall be sent to all the members whose email addresses are registered with the company/ depository participant. Physical copies of Annual Report will be sent to only to those members who request the Company for the same once dispatch of Annual Report and Notice of AGM through electronic means is completed.

46. Board Diversity

The Board comprises of adequate number of members with diverse experience and skills, such that it best serves the governance and strategic needs of the Company. The Directors are persons of eminence in areas such

as business, industry, finance, law, administration, economics etc. and bring with them experience and skills which add value to the performance of the Board. The Directors are selected purely on the basis of merit with no discrimination on race, colour, religion, gender or nationality . A brief profile of the Directors are available on the website of the Company at https:// www.diffusionengineers.com/about-us

47. Proceeding pending under the Insolvency and Bankruptcy Code, 2016.

No application has been made under the Insolvency and Bankruptcy Code; hence the requirement to disclose the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year is not applicable.

48. CEO/CFO Certification

As required Regulation 17(8) read with Schedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the CEO/CFO certification is attached with this Annual Report as an Annexure-10 .

49. The details of difference between the amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the banks or financial institutions along with the reasons thereof.

There has been no settlement made with any Bank or Financial institution by the Company during the Financial Year, thus the requirement to provide details not applicable to the Company.

50. Material events during FY 2024-25

Initial Public Offer & consequent listing of Shares on National Stock Exchange of India Limited (“NSE”) and BSE Limited (“BSE”)

The equity shares of the Company got listed on Stock Exchanges with effect from October 04, 2024, pursuant to the IPO of the Company by way of fresh issue of 94,05,000 Equity Shares aggregating to INR 1,579.64 million.

The issue comprising of a fresh issue, was open for subscription from September 26, 2024 and ended on September 30, 2024. The issue includes a reservation of up to 50,000 shares for employees offered at a discount of INR 8/- to the issue price. The allotment for Diffusion Engineers IPO was finalized on Tuesday, October 1, 2024. The shares got listed on BSE, NSE on October 4, 2024.

Company completed its IPO successfully with participation of several leading domestic and global institutional investors as well as NRIs, HNIs and retail investors. The Board is deeply grateful and honoured by the trust and confidence shown in the Company by its members. The Board would also like to express its sincere appreciation for the invaluable support from

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Corporate Overview Financial Statements

various Authorities, Book Running Lead Managers (BRLMs), Stock Exchanges, Depositories, Legal Counsels, Consultants, Auditors, and the Company’s Employees, all of whom contributed significantly to the remarkable success of the Company’s maiden IPO.

51. Acknowledgement

Your directors place on record their appreciation to the Government, the Securities and Exchange Board of India, the Stock Exchanges and other regulatory authorities for their valuable guidance and support and wish to express our sincere appreciation for their continued co-operation and assistance. We look forward to their continued support in future as well. We wish to thank our bankers, investors, rating agencies, customers and all other business associates for their support and trust reposed in us.

Your directors express their deep sense of appreciation for all the members of the Diffusion family whose commitment, co-operation, active participation, dedicated efforts, consistent contribution and professionalism at all levels has made the organization’s growth possible. Your Board is thankful to you for the support and trust reposed in them and the Company.

For and on behalf of Board of Directors

Sd/-

Prashant Garg Chairman and Managing Director (DIN: 00049106)

Place: Nagpur Date: 15[th] May 2025

Annual Report 20 24 - 25 63

Innovative Superconditioning Solutions

Annexure-1

FORM AOC – 1

(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)

Statement containing salient features of the financial statement of subsidiaries/associate companies/joint ventures

Part “A”: Subsidiaries

A. Diffusion Super Conditioning Services Private Limited

(Figures in ` Million)

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Sl. No. Particulars Details
1. Sl. No. CIN – U51503MH1990PTC124545
2. Name of the subsidiary Diffusion Super Conditioning Services
Private Limited
3. The date since when subsidiary was acquired 10–01–1990
4. Reporting period for the subsidiary concerned, if different from -
the holding company’s reporting period
5. Reporting currency and Exchange rate as on the last date of the -
relevant Financial year in the case of foreign subsidiaries
6. Share capital 0.38
7. Reserves & surplus 12.29
8. Total assets 39.42
9. Total Liabilities 26.75
10. Investments 4.05
(Non – current Investment)
11. Turnover 69.98
12. Profit before taxation 2.75
13. Provision for taxation 0.60
14. Profit after taxation 2.15
15. Proposed Dividend -
16. Extent of shareholding (In percentage) 98.95%
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B. Diffusion Hernon Adhesive and Sealant Private Limited

(Figures in ` Million)

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Sl. No. Particulars Details
1 Sl. No. CIN – U24297MH2012PTC234063
2 Name of the subsidiary Diffusion Hernon Adhesive And Sealant
Private Limited
3 The date since when subsidiary was acquired 02-08-2012
4 Reporting period for the subsidiary concerned, if different from -
the holding company’s reporting period
5 Reporting currency and Exchange rate as on the last date of the -
relevant Financial year in the case of foreign subsidiaries
6 Share capital 1.00
7 Reserves & surplus 1.75
8 Total assets 4.19
9 Total Liabilities 1.44
10 Investments -
11 Turnover 2.47
12 Profit before taxation 0.71
13 Provision for taxation 0.19
14 Profit after taxation 0.52
15 Proposed Dividend -
16 Extent of shareholding (In percentage) 95.00%
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Financial Statements

Corporate Overview

C. Nowelco Industries Private Limited

(Figures in ` Million)

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Sl. No. Particulars Details
1 Sl. No. CIN - U29309CT1999PTC013276
2 Name of the subsidiary Nowelco Industries Private Limited
3 The date since when subsidiary was acquired 12/03/2004
4 Reporting period for the subsidiary concerned, if different from -
the holding company’s reporting period
5 Reporting currency and Exchange rate as on the last date of the -
relevant Financial year in the case of foreign subsidiaries
6 Share capital 12.46
7 Reserves & surplus 2.38
8 Total assets 49.21
9 Total Liabilities 34.37
10 Investments -
11 Turnover 178.12
12 Profit before taxation 6.73
13 Provision for taxation 0.46
14 Profit after taxation 6.26
15 Proposed Dividend -
16 Extent of shareholding (In percentage) 66.95%
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D. Diffusion Engineers Singapore Pte Ltd.

(Figures in ` Millions)

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Sl. No. Particulars Details
1. Sl. No. UIN-BYWAZ20140111
2. Name of the subsidiary Diffusion Engineers Singapore Pte. Ltd.
3. The date since when subsidiary was acquired 26/11/2013
4. Reporting period for the subsidiary concerned, if different from -
the holding company’s reporting period
5. Reporting currency and Exchange rate as on the last date of the USD
relevant Financial year in the case of foreign subsidiaries 1 USD=INR 84.57
6. Share capital 15.027
7. Reserves & surplus 53.43
8. Total assets 83.16
9. Total Liabilities 14.69
10. Investments 15.45
(Non – current Investment)
11. Turnover 37.01
12. Profit before taxation 51.43
13. Provision for taxation 0
14. Profit after taxation 51.43
15. Proposed Dividend -
16. Extent of shareholding (In percentage) 100%
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Annual Report 20 24 - 25 65

Innovative Superconditioning Solutions

E. Diffusion Wear Solutions Philippines Inc.

(Subsidiary of Diffusion Engineers Singapore Pte. Ltd.)

(Figures in ` Millions)

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Sl. No. Particulars Details
1. Sl. No. -
2. Name of the subsidiary Diffusion Wear Solutions Philippines Inc.
3. The date since when subsidiary was acquired 07/02/2014
4. Reporting period for the subsidiary concerned, if different from -
the holding company’s reporting period
5. Reporting currency and Exchange rate as on the last date of the PHP
relevant Financial year in the case of foreign subsidiaries 1 PHP = INR 1.4918
6. Share capital 13.20
7. Reserves & surplus 74.48
8. Total assets 148.78
9. Total Liabilities 61.10
10. Investments 12.86
(Non – current Investment)
11. Turnover 206.44
12. Profit before taxation 46.48
13. Provision for taxation 11.63
14. Profit after taxation 34.84
15. Proposed Dividend -
16. Extent of shareholding (In percentage) 100%
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F. Diffusion Eurasia Mühendislik Sanayi Ve Ticaret Anonim Sirketi

(Figures in ` Millions)

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Sl. No. Particulars Details
1. Sl. No. UIN – BYJAZ20241104
2. Name of the subsidiary Diffusion Eurasia Mühendislik Sanayi Ve
Ticaret Anonim Sirketi
3. The date since when subsidiary was acquired 21/05/2024
4. Reporting period for the subsidiary concerned, if different from -
the holding company’s reporting period
5. Reporting currency and Exchange rate as on the last date of the TRY
relevant financial year in the case of foreign subsidiaries 1 TRY= INR 2.25
6. Share capital 6.27
7. Reserves & surplus (3.08)
8. Total assets 5.92
9. Total Liabilities 2.73
10. Investments -
11. Turnover 31.08
12. Profit / (Loss) before taxation (2.66)
13. Provision for taxation -
14. Profit / (Loss) after taxation (2.66)
15. Proposed Dividend -
16. Extent of shareholding (In percentage) 70%
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Names of subsidiaries which are yet to commence operations : The Board of Directors in its meeting held on February 07, 2025 approved Incorporation of a Wholly-owned Subsidiary of the Company with the name having pre-fix “Diffusion Engineers Middle East” or such other name as may be approved by regulatory authorities of United Arab Emirates (UAE) for the purpose of the business related to service of welding and light fabrication shop to cater to Middle Eastern markets. The Company is in process of incorporation.
Names of subsidiaries which have been liquidated or sold during the year: NA

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Financial Statements

Corporate Overview

Part “B”: Associates and Joint Ventures

Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures

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(All Figures are in ` million, unless otherwise mentioned)
Mecdiff Sdn Bhd
(Associate of
Name of associates/Joint Ventures LSN Diffusion Ltd.
Diffusion Engineers
Singapore Pte Ltd.)
1. Latest audited Balance Sheet Date 31/12/2024 31/12/2024
2. Date on which the Associate or Joint Venture was associated or Acquired 17/12/2013 31/08/2012
3. Shares of Associate/Joint Ventures held by the company on the year end
No. 3,00,000 7,54,450
Amount of Investment in Associates/Joint Venture 2.9774 67.4607
Extend of Holding (In percentage) 30.00% 21.56%
4. Description of how there is significant influence Shareholding of Shareholding of more
more than 20% than 20%
5. Reason why the associate/joint venture is not consolidated NA NA
6. Net worth attributable to shareholding as per latest audited Balance Sheet 4.29 76.91
7. Profit/Loss for the year
i. Considered in Consolidation 0.13 (19.64)
ii. Not Considered in Consolidation 0.31 (71.46)
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Names of associates or joint ventures which are yet to commence operations - NIL
Names of associates or joint ventures which have been liquidated or sold during the year -NIL

For and on behalf of the Board of Directors of Diffusion Engineers Limited

Prashant Garg Nitin Garg Ramesh Kumar N DIN – 00049106 DIN – 08558736 Chief Executive Officer Chairman & MD Director

Abhishek Mehta Chief Financial Officer

Chanchal Jaiswal Company Secretary and Compliance Officer

Place : Nagpur Date: 15[th] May 2025

Annual Report 20 24 - 25 67

Innovative Superconditioning Solutions

Annexure-2

FORM NO AOC – 2

(Pursuant to clause (h) of sub – section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)

Form for disclosure of particulars of contracts/ arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arm’s length transaction under third proviso thereto

1. Details of contracts or arrangements or transactions not at arm’s length basis:

Diffusion Engineers Limited has not entered into any contract or arrangement or transaction with its related parties which is not at arm’s length during financial year 2024-2025.

2. Details of material contracts or arrangement or transactions at arm’s length basis:

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Salient terms of
Nature of Duration of Date(s) of Amount
Name(s) of the the contracts or
Sr contracts/ the contracts / approval by paid as
related party and arrangements or
No arrangement/ arrangements/ the Board, advances,
nature of relationship transaction including
transactions: transactions: if any: if any:
the value (in ` ), if any
1 Diffusion Engineers Sales FY 2024-25 2,89,46,835.00/- 31-07-2024 -
Singapore Pte. Ltd.
(Subsidiary Company)
2 Diffusion Hernon Sales FY 2024-25 19,22,834.74/- 31-07-2024 -
Adhesive & Sealants
Pvt Ltd (Subsidiary
Company)
3 Diffusion Super- Sales FY 2024-25 9,82,08,049.00/- 31-07-2024 -
Conditioning Services
Pvt. Ltd. (Subsidiary
Company)
4 M/s Diffusion Wear Sales FY 2024-25 9,15,46,834.38/- 31-07-2024 -
Solutions Philippines
Inc. (Step-down
Subsidiary)
5 M/s Mecdiff SD. BHD. Sales FY 2024-25 78,29,813.00/- 31-07-2024 -
(Associate of Subsidiary
Company, Diffusion
engineers Singapore
Pte Ltd)
6 Nowelco Industries Sales FY 2024-25 78,13,167.04/- 31-07-2024 -
Pvt. Ltd. (Subsidiary
Company)
7 Diffusion Eurasia Sales FY 2024-25 3,48,61,383.47/- 31-07-2024
Mühendislik Sanayi Ve
Ticaret Anonim Sirketi
(Subsidiary Company)
8 Diffusion Super- Purchase FY 2024-25 5,65,834.00/- 31-07-2024 -
Conditioning Services
Pvt. Ltd. (Subsidiary
Company)
9 LSN Diffusion Ltd (Joint Purchase FY 2024-25 3,75,98,985.95/- 31-07-2024 -
Venture)
10 Nowelco Industries Purchase FY 2024-25 9,53,60,079.00/- 31-07-2024 -
Pvt. Ltd. (Subsidiary
Company)
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Corporate Overview Financial Statements

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Salient terms of
Nature of Duration of Date(s) of Amount
Name(s) of the the contracts or
Sr contracts/ the contracts / approval by paid as
related party and arrangements or
No arrangement/ arrangements/ the Board, advances,
nature of relationship transaction including
transactions: transactions: if any: if any:
the value (in ` ), if any
11 M/s Diffusion Wear Purchase FY 2024-25 78,79,800.00/- 31-07-2024
Solutions Philippines
Inc. (Step-down
Subsidiary)
12 Mr. Prashant Garg Remuneration FY 2024-25 2,40,00,000.00/- 30-11-2023 -
(Managing Director)
13 Mrs. Neelu Garg Remuneration FY 2024-25 55,20,000.00/- 27-09-2022 -
(Relative of Managing
Director)
14 Mr Abhishek Mehta Remuneration FY 2024-25 18,24,372.00/- 31-07-2024 -
(Chief Financial Officer)
15 Ms Chanchal Jaiswal Remuneration FY 2024-25 8,64,000.00/- 31-07-2024 -
(Company Secretary
and Compliance
Officer)
16 Mr. Ramesh Kumar Remuneration FY 2024-25 24,01,509.00/- 07-02-2025
Narasinghbhan (Chief
Executive Officer)
17 Mrs. Chitra N Garg Rent FY 2024-25 33,95,581.00/- 31-07-2024 -
(Director)
18 N. K. Garg HUF Rent FY 2024-25 2,50,200.00/- 31-07-2024 -
(HUF of Director)
19 Mr. Prashant Garg Rent FY 2024-25 8,13,585.00/- 31-07-2024 -
(Managing Director)
20 Diffusion Hernon Rent FY 2024-25 2,10,630.00/- 31-07-2024 -
Adhesive & Sealants
Pvt Ltd (Subsidiary
Company)
21 Mrs Disha Mehta Consultancy FY 2024-25 15,85,000/- 31-07-2024 -
(Relatives of CFO) charges
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For and on behalf of the Board of Directors of Diffusion Engineers Limited

Prashant Garg

Place : Nagpur Date: 15[th] May 2025

(DIN – 00049106) Chairman & Managing Director 3, Chaitriya, Pawanbhumi Somalwada, Nagpur - 440 025

Annual Report 20 24 - 25 69

Innovative Superconditioning Solutions

Annexure-3

PARTICULARS OF EMPLOYEES

(Detail pertaining to remuneration as required under Section 197(12) of the Companies Act 2013 read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014).

Your Company is serving in the field of providing engineering solutions to customers. The remuneration and perquisites provided to our employees including that of the Management are at par with industry levels.

The Nomination and Remuneration Committee continuously reviews the compensation of our Executive and Non-Executive Directors and Senior Executives to align both the short-term and long-term business objectives of the Company and to link compensation with the achievement of measurable performance goals.

i. Ratio of the remuneration of each Executive Director to the median remuneration of the Employees of the Company for the financial year 2024-25, the percentage increase in remuneration of Chief Executive Officer, Chief Financial Officer and other Executive Director(s)and Company Secretary during the financial year 2024-25 is mentioned below:

Name	Title	% increase in Remuneration in the fnancial year 2024-25	Ratio of Remuneration of each Director/KMP to median remuneration of employees
Mr. Prashant Garg	Chairman &ManagingDirector	No Increase	51.29
Mr. Ramesh Kumar Narasinghbhan	Chief Executive Ofcer	NA*	43.6
Mr. Abhishek Anil Mehta	Chief Financial Ofcer	No Increase	03.90
Ms. Chanchal Rajesh Jaiswal	Company Secretary and Compliance Ofcer	16%	1.84

ii. The median remuneration of employees of the Company during the financial year 2024-25 is 4,67,868/- as compared to 4,36,776/-in year 2023-24. Median is based on Annual CTC.
iii. In the financial year 2024-25 there was increase of 7.11 % in the median remuneration of employees. There are no exceptional circumstances for increase in the managerial remuneration. Average increase in salaries of employees is as per Company’s increment guidelines.
iv. The Company employed 486 employees and 179 workers as on March 31, 2025 as compared to 460 employees and 180 workers as on March 31, 2024.
v. It is affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other senior managerial personnel.

Notes to table above:

1. Median is based on Annual CTC.

2. Mr. Ramesh Kumar Narasinghbhan was appointed as Chief Executive Officer of the Company with effect from February 13, 2025.

Additional Note:

The Non-Executive Directors of the Company are entitled to sitting fee as per the statutory provisions. The ratio of remuneration and percentage increase for Non-Executive Directors Remuneration is therefore not considered for the purpose above.

[Information as per Rule 5(2) of Chapter XIII, Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

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Corporate Overview Financial Statements

The Names of Top Ten Employees in terms of Remuneration drawn during the FY 2024-25

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Nature of Whether
% of
Employment the
Sr. Names of Educational Experience Date of Previous equity
Designation whether Age employee is
No. Employees qualification (in years) Joining Employment shares
contractual relative of
held
or otherwise any director
1 Prashant Garg Managing B.E On Payroll 42 20 09/11/2003 NA 27.91% Yes
Director (Mr Prashant Garg is
Brother of Mr. Nitin
Garg and Son of Ms.
Chitra Garg who are Non
Executive directors of
Company)
2 Ramesh Kumar N. Chief B.E On Payroll 63 40 13/02/2025 CG Power - No
Executive (Electrical), and Industrial
Officer MBA Solution Ltd
3 Neelu Garg General B.Sc, MBA On Payroll 41 10 01/11/2014 NA 0.06% Yes
Manager - (Mrs. Neelu Garg is
Procurement Spouse of Managing
Director)
4 Kaushik General B.E (Mech.) On Payroll 49 27 01/09/2021 Konecranes 0.003% No
Chakraborty Manager - and Demag
Marketing Pvt. Ltd
OEM
5 Ganesh Khangar General B.E On Payroll 47 23 07/07/2022 Ganges 0.003% No
Manager- (Mech.),MBA International
Production Pvt. Ltd
6 Ajit Kotasthane Vice President DME On Payroll 60 37 12/11/2018 Messer 0.003% No
– Exports Eutectic
Castolin,
Singapore
7 Sangramsinh Head Of Kiln B.E On Payroll 37 13.6 06/02/2024 Thyssenkrupp 0.002% No
Bhosale Services (Mech.),MBA Industries
India.
8 Paresh Malavia Vice President B.E (Mech.), On Payroll 56 31 05/04/2016 M/S Schutz 0.002% No
- Sales carbon
Electrodes
Pvt. Ltd
9 Ajay S. Urkude Vice President DME On Payroll 49 24 02/06/2003 Hartex Sales 0.002% No
Pvt Ltd
10 Shreekant Vice President- B.E On Payroll 51 26 20/07/1998 NA 0.003% No
Premkhede Marketing
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* Joint Shareholding with another person shown as a Part of that shareholders holding, whose name appears first i.e. first holder.

The statement of remuneration will be made available for e-inspection / inspection by the Members during the business hours on any working day, 21 days prior to the date of AGM. Interested Members may write to the Company for obtaining a copy of the same.

For and on behalf of Board of Directors

Sd/-

Prashant Garg Chairman & Managing Director

Place: Nagpur Date: 15[th] May 2025

Annual Report 20 24 - 25

Innovative Superconditioning Solutions

Annexure-4

FORM NO. MR – 3

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED MARCH 31, 2025

[Pursuant to section 204 (1) of the Companies Act, 2013 and rule 9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014]

To The members, DIFFUSION ENGINEERS LIMITED (CIN – L99999MH2000PLC124154) T-5 & 6, MIDC, Hingana, Nagpur – 440 016

I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by DIFFUSION ENGINEERS LIMITED (CIN: L99999MH2000PLC124154) (hereinafter called the “company”). Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.

Based on my verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, I hereby report that in my opinion, the company has, during the audit period covering the financial year ended on March 31, 2025 (“Audit Period”) complied with the statutory provisions listed hereunder and also that the Company has proper Board processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

I have examined the books, papers, minute books, forms and returns filed and other records maintained by DIFFUSION ENGINEERS LIMITED (“Company”) for the financial year ended on March 31, 2025 according to the provisions of:

(i) The Companies Act, 2013 (“the Act”) and the rules made thereunder;
(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder;
(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;
(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment.
(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):-
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;
(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018;
(d) The Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021; (Not applicable to the Company during the Audit Period);
(e) The Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) Regulations, 2021; (Not applicable to the Company during the Audit Period);
(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;
(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021; (Not applicable to the Company during the Audit Period);
(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018; (Not applicable to the Company during the Audit Period);
(i) The Securities and Exchange Board of India (Listing Obligations and Disclosures requirements) Regulations, 2015 (herein after referred “SEBI LODR Regulations”);
(j) Securities and Exchange Board of India (Depository and Participants) Regulations, 2018;
(vi) I further report that, having regard to the compliance system prevailing in the Company and the management has identified and confirmed the following laws as being specifically applicable to the Company:
The Factories Act, 1948 & the Central Rules or concerned State Rules, made thereunder;
The Environment (Protection) Act, 1986 and Environment (Protection) Rules, 1986;
The Water (Prevention and Control of Pollution) Act, 1974 & Central Rules / concerned State Rules;
The Air (Prevention and Control of Pollution) Act, 1981 & Central Rules / concerned State Rules;
The Noise Pollution (Regulation and Control) Rules, 2000;

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Financial Statements

Corporate Overview

The Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016;
The E-Waste (Management) Rules, 2016;
The Plastics Waste Management Rules, 2016;
The Employees State Insurance Corporation Act, 1948;
The Industries Development and Regulation Act, 1951; and
The Standards of Weights and Measures Act, 1976
All decisions at Board and Committee Meetings are carried unanimously as recorded in the minutes of the Meetings of the Board of Directors or Committee of the Board, as the case may be.
As per the records, the Company filed all the forms, returns, documents and resolutions as were required to be filed with the Registrar of Companies and other authorities within time/ with additional fees and all the formalities relating to the same is in compliance with the Act.
Income Tax Act , 1961 and Indirect Tax Law
Payment of Wages Act, 1936
Minimum Wages Act, 1948
Employees Provident Fund and Misc. Provisions Act, 1952
Indian Stamp Act, 1999
Electricity Act, 2003
Payment of Gratuity Act, 1972
Maternity Benefits Act, 1961
The Information Technology Act, 2000 and the rules made thereunder.

I have also examined compliance with the applicable clauses of the following:

(a) Secretarial Standards issued by The Institute of Company Secretaries of India.
(b) Listing Agreements entered into by the Company with the BSE Limited and National Stock Exchange of India Ltd.
(c) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended time to time.

During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above.

I further report that:

the Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non – Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.
Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance for meetings other than those held at shorter notice. Shorter notice for the meetings were given to all directors as per provisions of Section 173[3] of the Companies Act, 2013 and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.
There are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

I have checked the compliance management system of the Company to obtain reasonable assurance about the adequacy of systems in place to ensure compliance of specifically applicable laws and this verification was done on test basis. I believe that the Audit evidence which I have obtained is sufficient and appropriate to provide a basis for my audit opinion. Except elsewhere mentioned in this report, in my opinion and to the best of my information and according to explanations given to me, I believe that the compliance management system of the Company is adequate to ensure compliance of laws specifically applicable to the Company.

I further report that during the audit period, there were no specific events/actions have taken place having a major bearing on affairs of the Company in pursuance of the above referred laws, rules, regulations, guidelines, etc. except that:

i. The company came out with fresh issue of 94,05,000 Equity Shares aggregating to INR 1,579.64 million through IPO which opened for subscription from September 26, 2024 [On September 25, 2024 for Anchor Investors] and closed on September 30, 2024, at an issue price of INR 160/- per Equity Shares to Eligible Employees in the Eligible Employee Reservation Portion i.e. at a Discount of INR 8/- on the issue price and at an issue price of INR 168/- per Equity Shares to the other categories. The equity shares of the Company got listed on Stock Exchanges with effect from October 04, 2024,

Sd/- Mr Madhav Kondaji Kawde (Practicing Company Secretary) FCS: 3251, CP No: 1892 Place : Mumbai UDIN: F003251G000547762 Date: 15[th] May 2025 PR Certi No.: 2317/2022

Note:

This Report is to be read with our letter of even date which is annexed as “ Annexure A” and forms an integral part of this report.

Annual Report 20 24 - 25 73

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ANNEXURE – A

To The members of

DIFFUSION ENGINEERS LIMITED

(CIN – L99999MH2000PLC124154) T-5 & 6, MIDC, Hingana, Nagpur – 440 016

My Secretarial Audit Report of even date is to be read along with this letter.

Maintenance of secretarial record is the responsibility of the management of the company. My responsibility is to express an opinion on these secretarial records based on our audit.
I have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. I believe that the processes and practices I followed provide a reasonable basis for my opinion.
Where ever required, I have obtained the Management representation about the compliance of laws, rules and regulations and happening of events etc.
The compliances of the provisions of SEBI Laws, Corporate and other applicable laws, rules, regulations, Secretarial standards are the responsibility of management. My examination was limited to the verification of procedures on test basis.
As regards the books, papers, forms, reports and returns filed by the Company under these regulations, the adherence and compliance to the requirements of the said regulations is the responsibility of management. Our examinations was limited to checking the execution and timeliness of the filing of various forms, reports, returns and documents that need to be filed by the Company under the said regulations. We have verified the correctness and coverage of the contents of such forms, returns and documents.

Place : Mumbai Date: 15[th] May 2025

Sd/- Mr Madhav Kondaji Kawde (Practicing Company Secretary) FCS: 3251, CP No: 1892 UDIN: F003251G000547762 PR Certi No.: 2317/2022

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Corporate Overview Financial Statements

Annexure-5

ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES / INITIATIVES

[Pursuant to Section 135 of the Companies Act, 2013 & Rules made thereunder]

A brief outline of the Company’s CSR policy, including overview of the projects or programmes proposed to be undertaken to the CSR policy and projects or programmes:

As part of our unwavering commitment to good corporate citizenship, our Company is dedicated to actively improving the quality of life within communities, with a particular focus on the local areas surrounding our business operations. In our pursuit of long-term stakeholder value creation, we are consistently guided by the principles of inclusivity, responsiveness, and sustainability—especially with regard to key stakeholders such as the socially and economically disadvantaged, underprivileged, and marginalized groups.

We aim to strengthen and expand our tradition of social responsibility by empowering individuals and fostering deeper, more impactful community engagement. To ensure that our CSR efforts are implemented in a focused, effective, and sustained manner, the Company has identified the following thrust areas:

Environmental Sustainability – Promoting and adopting eco-friendly practices that preserve natural resources and ensure a greener future.
Promotion of Education – Supporting initiatives that enhance access to quality education at all levels.
Promotion of Sports – Encouraging physical well-being and talent development through support for sports and related activities.
Health and Welfare – Advancing public health and access to medical care, particularly in underserved regions.
Community Well-being – Facilitating holistic community development and social infrastructure.
Gender Equality and Women Empowerment – Advocating for gender equity and supporting initiatives aimed at empowering women.
Vocational Skills and Employment – Enhancing skill development to improve employability and livelihoods, especially for youth and marginalized communities.
Social Business Projects – Promoting entrepreneurial initiatives that deliver social impact.
Eradicating Extreme Hunger and Poverty – Supporting programs aimed at alleviating hunger and improving food security.
Other Initiatives – Undertaking additional activities as may be identified from time to time, including those aligned with the Company’s core competencies and long-term strategic vision.

All CSR activities undertaken by the Company are fully aligned with the provisions and activities specified under Schedule VII of the Companies Act, 2013, ensuring compliance with statutory obligations and alignment with national priorities.

The Corporate Social Responsibility Committee is constituted by the Board of Directors of Diffusion Engineers Limited in compliance with Section 135 of the Companies Act, 2013 (“the Act”) read along with Schedule VII & the applicable rules thereto. During the Financial Year 2024–25, one meeting of the CSR Committee was held on 31 July 2024.

The composition of the CSR Committee is as under:

Sr. No. Name	Nature of Directorship	Designation in Committee	Number of Meetings of CSR Committee Held During the Year	Number of meetings of CSR Committee attended during theyear
1 Ms Anita Vijayakar_[ Ceased to be_ Chairperson of CSR Committee w.e.f 26th August, 2024]	Independent Director	Chairperson	1	1
2 Dr. Nitin Garg	Non-Executive Director	Member	1	1
3 Ms Chitra Narendra Garg	Non-Executive Director	Member	1	1
4 Mrs. Deepali Bendre_[appointed_ as Chairperson of CSR Committee w.e.f. 26th August, 2024]	Independent Director	Chairperson	0	0

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Web-link where Composition of CSR Committee, CSR Policy and CSR projects approved by the board are disclosed on the website of the company:
www.diffusionengineers.com
Provide the details of Impact assessment of CSR projects carried out in pursuance of sub-rule (3) of rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, if applicable (attach the report) :

Not Applicable - as the Company does not have an average CSR obligation of 10 Crores or more in the three immediately preceding financial years.

The prescribed CSR expenditure of the company for last three financial years (2% of the average net profits of immediately preceding three Financial Years):

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Average net profit Two percent of Surplus arising out of
Amount required Total CSR
of the company for average net profit of the CSR projects or
to be set off for the obligation for the
last three financial the company as per programmes or activities
financial year, if any financial year
years: section 135(5) of the previous financial
(d) (b+c-d)
(a) (b) years (c)
22,45,65,885 44,91,318 - 2.95.251 41,96,067
Amount spent on CSR Projects (both Amount spent in Amount spent on
Total amount spent
Ongoing Project and other than Administrative Impact Assessment, if
for the Financial Year
Ongoing Project). Overheads applicable.
6(a)+6(b)+6(c).
(a) (b) (c)
43,80,812 - - 43,80,812
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CSR amount spent or unspent for the financial year:

|Total Amount
Spent for the
Financial Year.|Amount Unspent (in**)**|**Amount Unspent (in**)|Amount Unspent (in**)**|**Amount Unspent (in**)|Amount Unspent (in**)**| |---|---|---|---|---|---| ||**Total Amount transferred to Unspent** **CSR Account asper section 135(6).**||**Amount transferred to any fund specifed under** **Schedule VII asper secondproviso to section 135(5).**||| ||**Amount.**|**Date of transfer.**|**Name of the Fund**|**Amount.**|**Date of** **transfer.**| |43,80,812|-|-|-|-|-|

Excess amount for set-off, if any::

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Sl. No Particular Amount (in ) (i) Two percent of average net profit of the company as per sub-section (5) of section 135 41,96,067
(ii) Total amount spent for the Financial Year 43,80,812 (iii) Excess amount spent for the Financial Year [(ii)-(i)] 1,84,745
(iv) Surplus arising out of the CSR projects or programmes or activities of the previous Financial -
Years, if any
(v) Amount available for set off in succeeding Financial Years [(iii)-(iv)] ` 1,84,745
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Details of CSR amount spent against ongoing projects for the Financial Year:

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(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Item from Mode of
Amount Amount Mode of
the list of Imple-
Local Amount spent transferred to Impleme-
Name of activities men-
Sr. area Location of Project allocated in the Unspent CSR ntation
the in tation
No. (Yes the Project duration for the current Account for the Through
Project Schedule Direct
/No) project financial project as per Impleme- nting
VII to the (Yes/
year Section 135(6) Agency.
Act. No)
STATE DISTRICT Name CSR
Regist-
ration
number
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Financial Statements

Corporate Overview

Details of CSR amount spent against other than on-going projects for the financial year:

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(1) (2) (3) (4) (5) (6) (7) (8)
Item from Amount Mode of implementation
Local Location of the project
the list of spent for Mode of – Through implementing agency.
Sr. area
Name of project activities in the project implementation CSR
No (Yes/
schedule VII No) State District (in ` ) Direct (Yes/ No) Name Registration
to the Act. number
1 Development and (iv) Yes Maharashtra Nagpur 2,87,650 Yes Not Not Applicable
maintenance of Applicable
plantations in,
Kalmeshwar area, to
enhance green cover
supporting biodiversity
and birdlife.
2 Medical camps at (i) Yes Maharashtra Nagpur 1,58,097 Yes Not Not Applicable
Chichbhavan Village, Applicable
Kalmeshwar, with doctor
consultations and free
medicines,
3 Aided two life-saving (i) Yes Maharashtra Nagpur 2,64,000 No Swami CSR00005068
pediatric heart surgeries Vivekanand
for underprivileged Medical
children Mission
4 Donation provided to (i) No Madhya Bhopal 5,00,000 No BTSG CSR00027838
support awareness, Pradesh Awareness
psychological care, and Foundation
non-medical assistance
for brain tumor patients
and their caregivers.
5 A donation was made, (i) Yes Maharashtra Nagpur 5,00,000 No Swami CSR00005068
for 10 mechanical Vivekanand
heart valves to aid Medical
economically weaker Mission
patients, enhancing their
health and quality of life.
6 Donated 50 Jaipur Foot (i) Yes Maharashtra Nagpur 2,50,000 No Mahavir CSR00017589
prosthetics to amputees, International
helping recipients regain Service Trust
mobility and lead normal
lives.
7 Conducted a (i) Yes Maharashtra Nagpur 3,91,118 Yes Not Not Applicable
comprehensive health Applicable
check-up camp in and
around Kalmeshwar
Taluka, providing
screenings, medicines,
and health counselling.
8 Scholarships awarded (ii) Yes Maharashtra Nagpur 5,00,000 Yes Not Not Applicable
to 10 meritorious and Applicable
needy students
9 Paid part fees for 10 (ii) No Maharashtra Mumbai 50,000 No Suryoday CSR00003067
children with intellectual Trust
disabilities, supporting
their education and skill
development.
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(1) (2) (3) (4) (5) (6) (7) (8)
Item from Amount Mode of implementation
Local Location of the project
the list of spent for Mode of – Through implementing agency.
Sr. area
Name of project activities in the project implementation CSR
No (Yes/
schedule VII No) State District (in ` ) Direct (Yes/ No) Name Registration
to the Act. number
10 Adopted and sponsored (ii) Yes Maharashtra Nagpur 2,50,000 No CSR00082342
education for Zilla Bridge-
Parishad schools and The-Gap
Anganwadis in Hingna Foundation
zone, Nagpur, supporting
quality education for
rural children.
11 Conducted (vii) Yes Maharashtra Nagpur 1,50,000 Yes Not Not Applicable
Shri N.K.Garg Memorial Applicable
Badminton Tournament
with an aim to promote
sports.
12 Awarded (vii) Yes Maharashtra Nagpur 1,50,000 Yes Not Not Applicable
Shri. N.K.Garg Sports Applicable
Scholarship to budding
shuttler, supporting
training and participation
in major badminton
tournaments.
13 Constructed a (vii) Yes Maharashtra Nagpur 1.79.947 Yes Not Not Applicable
multipurpose cemented Applicable
playground and donated
sports equipment to
Tejaswini Primary & High
School, Koradi.
14 Contributed to support (vii) No Karnataka Vijayanagar 5,00,000 No Inspire CSR00000123
training and promotion Institute of
of athletes at Inspire Sports
Institute of Sport,
Karnataka, which
provides world-class
facilities and coaching to
develop India’s Olympic
and Para-Olympic talent.
15 Providing nutritious (i) Yes Maharashtra Nagpur 2,50,000 No Annamrita CSR00001973
mid-day meals to combat Foundation
classroom hunger, and
promoting children’s
health and education at
the grassroots level.
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Financial Statements

Corporate Overview

(a) Details of Unspent CSR amount for the preceding three financial years

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Amount Balance Amount transferred Amount
transferred Amount in Amount to any fund specified remaining
to Unspent Unspent CSR Spent in under Schedule VII as per to be
Preceding
Sr. CSR Account Account under the Section 135(6), if any. spent in Deficiency,
Financial
No. under subsection Financial succeeding if any
Year Name
Section (6) of Year Amount Date of financial
of the
135(6) section 135 (in ) (in ) transfer years
Fund
(in ` )
1 FY-1 - - - - - - - -
2 FY-2 - - - - - - - -
3 FY-3 - - - - - - - -
8. In case of creation or acquisition of capital asset, furnish the details relating to the asset so created or acquired
through CSR spent in the Financial Year.
No
If yes, enter the Number of Capital assets created/ acquired : NA
Furnish the details relating to such asset(s) so created or acquired through Corporate Social Responsibility amount
spent in the Financial Year:
Details of entity/ Authority/
Short particulars of Pincode of Amount beneficiary of the registered owner
Sr. the property or asset(s) the Date of of CSR CSR
No. [including complete address property creation amount Registration Registered
Name
and location of the property] or asset(s) spent Number, if address
applicable
- - - - - - - -
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In case of creation or acquisition of capital asset, furnish the details relating to the asset so created or acquired through CSR spent in the Financial Year.

Furnish the details relating to such asset(s) so created or acquired through Corporate Social Responsibility amount spent in the Financial Year:

In case the Company has failed to spend the 2% of the average net profit of the last 3 financial years or any part thereof, reasons for not spending the amount in its Board Report:

The Company has spent 2% of the average net profit of the last 3 financial years towards CSR expenditure.

For and on behalf of Diffusion Engineers Limited

Sd/- Prashant Garg (DIN: 00049106) Managing Director 3, Chaitriya, Pawanbhumi Somalwada, Nagpur – 440 025

Sd/-

Ms. Deepali Bendre (DIN: 10753545) Chairperson, CSR Committee 5, Saraswati Layout, Deendayal Nagar Nagpur –440022, Maharashtra, India

Place: Nagpur Date: 15[th] May 2025

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Annexure-6

CORPORATE POLICIES

Your company seek to promote and follow the highest level of ethical standards in all our business transactions guided by our value system. The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandated the formulation of certain policies for all listed companies. All our corporate governance policies are available on our website, at https://www. diffusionengineers.com/investors-relation

The policies are reviewed periodically by the Board and updated based on new compliance requirements.

Key policies that have been adopted are as follows:

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Name of the policy Salient Features Web link Summary of Key Changes
Code of Business Conduct The Company has adopted a https://www. During financial year 2024- 25
and Ethics Code of Conduct for all Directors diffusionengineers.com/ Code of Business Conduct and
and Senior Management Personnel investors-relation Ethics was revised
which forms the foundation of and approved by Board on
good corporate practices. February 7,2025.
Vigil Mechanism (Whistle The Company has adopted a Vigil https://www. There has been no change
Blower Policy) Mechanism to report concern about diffusionengineers.com/ to the policy during financial
unethical behaviour, actual or investors-relation year 2024-25.
suspected fraud, or violation of the
Company’s code of conduct.
Policy on Determination This policy applies to disclosure of https://www. During financial year 2024- 25
of Materiality of Events / material events affecting Diffusion diffusionengineers.com/ policy was revised
Information & Disclosure Engineers Limited and investors-relation and approved by Board on
on Material Events / its subsidiaries. October 24,2024.
Information
Code of Practices & This code provides for fair https://www. There has been no change to
Procedures for Fair and timely dissemination of diffusionengineers.com/ the code during financial year
Disclosure of Unpublished unpublished price sensitive investors-relation 2024-25.
Price Sensitive Information information.
Code of Conduct for The policy provides the framework https://www. During financial year 2024-
Regulating, Monitoring and in dealing with securities of the diffusionengineers.com/ 25 Code of Conduct for
Reporting of Trading by Company. investors-relation Regulating, Monitoring
Designated Person and Reporting of Trading
by Designated Person was
revised and approved by
Board on February 7,2025.
Policy For Corporate Social The policy outlines the Company’s https://www. There has been no change
Responsibility strategy to bring about a positive diffusionengineers.com/ to the policy during financial
impact on society through investors-relation year 2024-25.
programs relating to hunger,
poverty, healthcare, environment
etc.
Archival Policy and Policy on The policy deals with the retention https://www. There has been no change
Preservation of Documents and archival of corporate records. diffusionengineers.com/ to the policy during financial
investors-relation year 2024-25.
Nomination & This policy formulates the criteria https://www. During financial year 2024- 25
Remuneration Policy for determining qualification, diffusionengineers.com/ policy was revised
competencies, positive attributes investors-relation and approved by Board on
and independence for the February 7,2025.
appointment of Director (executive/
non-executive) and also the criteria
for determining the remuneration
of Directors, key managerial
personnel and senior management
personnel.
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Corporate Overview Financial Statements

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Name of the policy Salient Features Web link Summary of Key Changes
Policy on Material The policy is used to determine the https://www. During financial year 2024- 25
Subsidiaries material subsidiaries of the diffusionengineers.com/ policy was revised
Company and to provide the investors-relation and approved by Board on
governance framework for them. February 7,2025.
Policy on dealing with This policy regulates all transactions https://www. During financial year 2024- 25
Related Party Transactions between the Company and its diffusionengineers.com/ policy was revised
related parties. investors-relation and approved by Board on
February 7,2025.
Policy on Prevention of This policy is used to prohibit, https://www. There has been no change
Sexual Harassment prevent or deter the commission diffusionengineers.com/ to the policy during financial
of acts of sexual harassment of investors-relation year 2024-25.
woman at workplace and to provide
the procedure for the redressal of
complaints pertaining to sexual
harassment.
Risk Assessment and This policy sets out system of risk https://www. There has been no change
Management Policy oversight, management of diffusionengineers.com/ to the policy during financial
material business risks and internal investors-relation year 2024-25.
control.
Board Diversity Policy The Board Diversity Policy aims to https://www. There has been no change
set out the approach to achieve diffusionengineers.com/ to the policy during financial
diversity on the Board of Directors. investors-relation year 2024-25.
Ethnicity, age and gender diversity
are areas of strategic focus to the
composition of our Board. The
Company recognizes and embraces
the benefits of having a diverse
Board to enhance the quality of its
performance.
Policy and Procedure for This Policy deals with a) https://www. There has been no change
Inquiry in Case of Leak Formulating procedures for diffusionengineers.com/ to the policy during financial
or Suspected Leak of inquiry in case of leak of UPSI. b) investors-relation year 2024-25.
Unpublished Price Sensitive Strengthening the internal control
Information system to prevent leak of UPSI. c)
Penalizing any insider who appears
to have found guilty of violating
this Policy.
Corporate Governance The policy outlines composition of https://www. There has been no change
Policy Board. It also provides scope and diffusionengineers.com/ to the policy during financial
terms of reference of committees investors-relation year 2024-25.
of Board
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Annexure-7

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

[Particulars pursuant to the Companies (Accounts) Rules, 2014]

A) CONSERVATION OF ENERGY

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Steps taken for conservation • Installed a 250 kW rooftop solar power system to reduce dependency on non-
renewable energy.
• Implemented solar-powered street lighting across the factory premises.
• Installed an APFC (Automatic Power Factor Control) panel to optimize power
usage and improve efficiency.
• Replaced all mercury vapor lights with energy-efficient LED lighting on the shop
floor to reduce electricity consumption.
Steps taken for utilizing • Diesel Generator (DG) set installed to serve as a reliable backup power source
alternate sources of energy during outages.
Capital investment on energy • Rooftop solar panel system installed as a major investment towards sustainable
conservation equipment energy practices.
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B) TECHNOLOGY ABSORPTION

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Efforts made for technology Ongoing investments are focused on exploring new processes and technologies aimed
absorption at reducing cycle time and operational costs.
Benefits derived The adoption of innovative techniques and process improvements has played a crucial
role in enhancing our operational efficiency. These advancements have enabled us to
remain competitive in the market by offsetting rising costs in key areas such as electricity,
transportation, and employee remuneration. By continuously embracing modern
methods, we are able to maintain cost-effectiveness while upholding the quality and
reliability of our products and services.
Expenditure on Research & ` 36.5 Million
Development, if any
Details of technology Prior Years
imported, if any
Year of import -
Whether imported Yes
technology fully absorbed
-
Areas where absorption of
imported technology has not
taken place, if any
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C) RESEARCH AND DEVELOPMENT:

Research and development hold strategic importance for our company, given the dynamic and technology-driven nature of our industry. Recognizing this, we have prioritized R&D as a core function within our operations. Our dedicated R&D team now includes a full-time doctoral candidate who is actively engaged in developing new processes and advancing product innovation.

To further strengthen our research capabilities, we have increased our collaboration with universities, leveraging their advanced facilities and academic expertise for joint research efforts. We have also established a separate R&D wing within our premises, solely focused on driving innovation and continuous improvement.

Our commitment to R&D has been formally acknowledged through recognition by the Department of Scientific and Industrial Research (DSIR), valid up to 31[st] March 2027. In addition, one of our laboratories has received NABL (National Accreditation Board for Testing and Calibration Laboratories) accreditation, affirming our compliance with international standards for quality and technical competence in testing and calibration—further enhancing the credibility and reliability of our research outputs.

D) EXPORTS:

Growth in Export is consistent and improving every year.

E) FOREIGN EXCHANGE EARNING AND OUTGO:

Foreign Exchange Earning ` 293.86 Million

Foreign Exchange outgo ` 332.64 Million

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Corporate Overview Financial Statements

Annexure-8

CORPORATE GOVERNANCE COMPLIANCE CERTIFICATE

To The Members of Diffusion Engineers Limited CIN: L99999MH2000PLC124154 T-5 & 6, MIDC, Hingana, Nagpur – 440 016

I have examined all the relevant records of Diffusion Engineers Limited for the purpose of certifying compliance of the conditions of the Corporate Governance as per the relevant provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) for the financial year from April 1, 2024 to March 31, 2025. I have obtained all the information and explanations which to the best of my knowledge and belief were necessary for the purposes of certification.

I have also examined the status of Directors of the Company in accordance with Listing Regulations and Companies Act, 2013 and hereby certify that, none of the Directors on Board of the Company is disqualified from being appointed or continuing as director by the Securities Exchange Board of India/ Ministry of Corporate Affairs. The KYC requirements of all the directors have been updated on the website of Ministry of Corporate Affairs.

The compliance of conditions of corporate governance is the responsibility of the Management. My examination was limited to the procedure and implementation process, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. The certificate is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.

In my opinion and to the best of my information, and according to the explanation and information furnished to me, I certify that the Company has complied with all the mandatory conditions of Corporate Governance as stipulated in the said Listing Regulations during the period under review, as applicable.

Place: Mumbai Date: 15[th] May 2025

Sd/- Mr Madhav Kondaji Kawde Practicing Company Secretary Membership No.:F3251, COP: 1892 UDIN: F003251G00054784 Peer Review certificate No. 2317/2022

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CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS

(Pursuant to regulation 34(3) and Schedule V Para C clause (10)(i) of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015)

The Members of Diffusion Engineers Limited CIN: L99999MH2000PLC124154 T-5 & 6, MIDC, Hingana, Nagpur – 440 016

I have examined the relevant registers, records, forms, returns and disclosures received from the Directors of Diffusion Engineers Limited having CIN No. L99999MH2000PLC124154 and having registered office at T-5 & 6, MIDC, Hingana, Nagpur, Maharashtra – 440 016 (hereinafter referred to as ‘the Company‘), produced before me by the Company for the purpose of issuing this Certificate, in accordance with Regulation 34(3) read with Schedule V Para-C Sub clause 10(i) of the Securities Exchange Board of India (Listing obligations and Disclosure Requirements) Regulation 2015.

In my opinion and to the best of my information and according to the verifications (including Director Identification Number (DIN) status at the portal www.mca.gov.in) as considered necessary and explanations furnished to me by the Company and its officers, I hereby Confirm that none of the Directors on the Board of the Company as stated below for the Financial Year ending on March 31, 2025 have been debarred or disqualified from being appointed or continuing as Directors of companies by the Securities and Exchange Board of India, Ministry of Corporate Affairs or any such other statutory Authority.

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DIN (Director Date of
Sr No Name of Directors Identification Number) appointment in Company
1 Mr Prashant Garg 00049106 01/04/2009
2 Dr. Nitin Garg 08558736 23/07/2024
3 Mr. Anil Kumar Trigunayat 07900294 30/11/2023
4 Ms. Chitra Narendra Garg 01784644 05/12/2023
5 Mr. Sherry Samuel Oommen 07059616 26/08/2024
6 Ms. Deepali Bendre 10753545 26/08/2024
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*the date of appointment is as per the MCA Portal

Ensuring the eligibility for the appointment / continuity of Director on the Board is the responsibility of the management of the Company. My Responsibility is to express an opinion on these based on my verification. This Certificate is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company.

Place: Mumbai Date: 15[th] May 2025

Sd/- Mr Madhav Kondaji Kawde Practicing Company Secretary Membership No.:F3251, COP: 1892 UDIN: F003251G000547795 Peer Review certificate No. 2317/2022

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Financial Statements

Corporate Overview

Annexure-9

DECLARATION UNDER SCHEDULE V (D) OF THE LISTING REGULATIONS BY THE CHIEF EXECUTIVE OFFICER OF AFFIRMATION BY THE DIRECTORS, KMP’S AND SENIOR MANAGEMENT OF COMPLIANCE WITH THE CODE OF CONDUCT

To The Members Diffusion Engineers Limited T-5 & 6, MIDC, Hingana, Nagpur, Maharashtra, India, 440016

Pursuant to Regulation 34 (3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, I hereby declare that all the Board Members, KMPs and Senior Management Personnel are aware of the provisions of the Code of Conduct laid down by the Board as made effective from December 13, 2023.

All Board Members, KMP and Senior Management Personnel have affirmed compliance with the Code of Conduct.

For Diffusion Engineers Limited

Sd/- Ramesh Kumar Narasinghbhan Chief Executive Officer

Place: Nagpur Date: 15[th] May 2025

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Annexure-10

May 14, 2025

The Board of Directors Diffusion Engineers Limited

T-5 & 6, MIDC, Hingana, Nagpur, Maharashtra, India, 440016

Pursuant to Regulation 17(8) of the SEBI (Listing Obligation & Disclosure Requirements) Regulations, 2015, we Ramesh Kumar Narasinghbhan, Chief Executive Officer and Abhishek Mehta, Chief Financial Officer of Diffusion Engineers Limited, to the best of our knowledge and belief, certify that:

a. We have reviewed financial statements and the cash flow statement for the quarter and year ended 31[st] March, 2025 and that to the best of our knowledge and belief:
i. these financials do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;
ii. these statements together present a true and fair view of the company’s affairs and are in compliance with existing accounting standards, applicable laws and regulations.
b. To the best of our knowledge and belief, there are no transactions entered into by the Company during the quarter and year under reference which are fraudulent, illegal or violative of the Company’s Code of Conduct.
c. We accept responsibility for establishing and maintaining internal controls for financial reporting and we have evaluated the effectiveness of internal control systems of the company pertaining to financial reporting and we have disclosed to the auditors and the Audit Committee that there are no deficiencies in the design or operation of such internal controls.
d. We have indicated to the auditors and the Audit committee:
There has not been any significant change in internal control over financial reporting during the quarter and year under reference.
There have not been any significant changes in accounting policies during the quarter and year ended 31[st] March,2025 and the accounting policies have been disclosed in the notes to the financial statements and
We are not aware of any instance during the quarter and year ended under reference of significant fraud with involvement therein of the management or an employee having a significant role in the company’s internal control system over financial reporting.

Sd/-

Mr. Ramesh Kumar Narasinghbhan Chief Executive Officer

Sd/-

CA Abhishek Mehta Chief Financial Officer

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Financial Statements

Corporate Overview

Corporate Governance Report 2024-2025

I. Company’s Philosophy on Corporate Governance

At Diffusion Engineers Limited, corporate governance is the foundation of our commitment to excellence, sustainable growth, and value creation. The Company believes that a strong governance framework is essential for achieving every milestone on our journey forward. The approach to corporate governance is driven by an unwavering commitment to protecting stakeholder interests, proactively managing risks, and fostering long-term business objectives. Corporate governance aims at driving the business ethically for creation and enhancement of long-term sustainable value for your stakeholders. At Diffusion Engineers Limited, it is imperative that the Company’s affairs are managed in a fair and transparent manner. Diffusion ensures that it evolves and follows not just the stated corporate governance guidelines, but also globally accepted best practices. The Company’s philosophy on corporate governance oversees business strategies and ensures fiscal accountability, ethical corporate behaviour and fairness to all stakeholders comprising employees, investors, customers, regulators, suppliers and the society at large. Our governance framework, systems, and processes are designed to align with our Mission, Vision and Values, ensuring that we uphold the highest standards of integrity, accountability, and transparency as we continue on our path to sustained success.

The Company’s essential character is shaped by the values of transparency, customer satisfaction, integrity, professionalism and accountability. The Company continuously endeavours to improve on these aspects. Your Company’s Board of Directors (‘the Board’) view Corporate Governance in its widest sense. The main objective is to create and adhere to a corporate culture of integrity and consciousness. Corporate Governance is a journey for constantly improving sustainable value creation and is an upward moving target.

The Company has adopted a comprehensive Code of Conduct (‘Code’) for its Directors, KMPs and Senior Management. The Code is available on the Company’s website at link: https://www.diffusionengineers.com/ investors-relation. Also, the corporate policies of the company are given in Annexure 6 of the Board’s Report.

II.

It ensures that all directors, senior management and employees have the obligation to conduct themselves in an honest and ethical manner and act in the best interest of the Company at all times.

The Company believes in raising the bar and upholding the highest standards of Corporate Governance as it enhances the long-term value of the Company for its stakeholders. Good governance is an essential ingredient of good business. The following report on the implementation of the Corporate Governance Practices is a sincere effort of the Company to follow the Corporate Governance Principles in its letter and spirit.

Your Company, is in compliance with the requirements stipulated under Regulations 17 to 27 read with Schedule V and clauses (b) to (i) and (t) of sub-regulation (2) of Regulation 46 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”), as applicable, with regard to corporate governance.

Board of Directors (“Board”)

The Company has an active, experienced, diverse and a well-informed Board. The Board along with its Committees undertakes its fiduciary duties keeping in mind the interests of all its stakeholders and the Company’s Corporate Governance philosophy. As on March 31, 2025, the Company has an optimum mix of Board which is constituted in compliance with the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) and includes Executive, Non-Executive & Independent Directors with more than fifty percent of Non-Executive and Independent Directors so as to ensure proper governance and management. The Chairman of the Board is Executive Non-Independent Director. The Board is at the core of corporate governance practice and oversees and ensures that the Management serves and protects the long-term interest of all its stakeholders. The Company believes that an active, well-informed and independent Board is necessary to ensure the highest standards of corporate governance. None of the Independent Director holds shares in the Company as on March 31, 2025.

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Except as stated below, none of our Directors, Key Managerial Personnel and Senior Management are related to each other:

Name of Director	Name of Relative	Nature of Relationship
Prashant Garg	Chitra Garg Dr. Nitin Garg	Mother Brother
Dr. Nitin Garg	Chitra Garg Prashant Garg	Mother Brother
Chitra Garg	Prashant Garg Dr. Nitin Garg	Son Son

A. Size and Composition of the Board:

The Board is entrusted with the ultimate responsibility of the management, direction and performance of the Company. The Company’s policy is to maintain an optimum combination of Executive and Non-Executive/Independent Directors. The composition of the Company’s Board, which comprises of Six (6) Directors, is given in the table below and is in conformity with Regulation 17(1) of the Listing Regulations and other applicable regulatory requirements. More than 50% of the Company’s Board comprises of Non-Executive and Independent Directors (IDs). The Board does not comprise of any Nominee Director. None of the Directors on the Board:

holds directorships in more than ten public companies;
serves as Director or as Independent Directors in more than seven listed entities; and
who are the Executive Directors serve as independent directors in more than three listed entities

1. A brief particular of Board of Directors of the Company as on March 31, 2025 is given below:

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Total Number of Directorships of companies,
Committee Chairmanships and Memberships
as on March 31, 2025 []
Director’s
Name of the Category/ Directorships Committee
Identification Member
Director Designation Number holding Memberships
other than
Public [#] Private Chairmanship
Chairmanship
Position [$]
Position [$]
Executive Directors
Mr Prashant Garg Managing Director 00049106 5 1 0 2
and Chairman
Non- Executive Directors
Dr. Nitin Garg Non-Executive Non- 08558736 5 1 0 1
Independent
Director
Mr. Anil Kumar Non-Executive 07900294 1 0 0 0
Trigunayat Independent
Director
Ms. Chitra Narendra Non-Executive Non- 01784644 3 0 0 0
Garg Independent
Director
Mr. Sherry Samuel Non-Executive 07059616 1 0 2 0
Oommen Independent
Director
Ms. Deepali Bendre Non-Executive 10753545 1 0 0 1
Independent
Director
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Notes:

*Excluding Trust, Society, foreign companies and Government Bodies, if any.

#The Directorship in Public Companies includes Directorship in Non-Profit Companies (Section-8 Companies), Deemed Public Company and Diffusion Engineers Limited.

$Only Audit & Stakeholders Relationship & investor Grievances Committee considered

Mr Prashant Garg, Ms. Chitra Narendra Garg and Dr. Nitin Garg are also promoters of Company.

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Financial Statements

Corporate Overview

Shareholding of Directors as on March 31, 2025

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Number of Percentage of
Particular
Shares held shares held
Mr Prashant Garg 1,04,45,099 27.91%
Dr. Nitin Garg 74,03,221 19.78%
Mr. Anil Kumar Trigunayat - -
Ms. Chitra Narendra Garg 61,30,971 16.38%
Mr. Sherry Samuel Oommen - -
Ms. Deepali Bendre - -
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Joint Shareholding with another person shown as a Part of that shareholders holding, whose name appears first i.e. first holder.

As on March 31, 2025 the Company does not have any convertible instruments.

2. Names of other Listed entities where the Director is holding Directorship and category of directorship as on March 31, 2025:

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Sr No Name of Director Name of Company Category of Directorship
1 Mr Prashant Garg Not applicable Not applicable
2 Dr. Nitin Garg Not applicable Not applicable
3 Mr. Anil Kumar Trigunayat Not applicable Not applicable
4 Ms. Chitra Narendra Garg Not applicable Not applicable
5 Mr. Sherry Samuel Oommen Not applicable Not applicable
6 Ms. Deepali Bendre Not applicable Not applicable
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* Shri Anil Kumar Trigunayat (DIN - 07900294) has been appointed as an Additional Director (Independent) on the Board of NTPC Limited w.e.f. 17[th] April 2025

3. Key Board qualifications, Skills, expertise and attributes

In the context of the Company’s business and activities, the Company requires skills/expertise/competencies in the different areas of Company’s business. The Company’s Board is comprised of individuals who are reputed in the required skills, competence and expertise that allow them to make effective contribution to the Board and its committees. The Board is satisfied that the current composition reflects an appropriate mix of knowledge, skills, experience, diversity and competence required for it to function effectively.

A. Matrix setting out the skills/expertise/competence of the board of directors is specified below:

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Name of Director Expertise in specific functional area
Mr Prashant Garg Industry Experience, Management & Leadership Skills
Dr. Nitin Garg Management & Leadership Skills
Mr. Anil Kumar Trigunayat Management & Leadership Skills
Ms. Chitra Narendra Garg Management & Leadership Skills
Mr. Sherry Samuel Oommen Technical, Management & Leadership Skills
Ms. Deepali Bendre Technical, Management & Leadership Skills
Technical Skills/ Industry Experience Management Skills Leadership Skills
Finance, Industry Knowledge, Management Planning and Decision-making Strategic Thinking, Planning
Experience, Marketing Experience & Delivery
Strategy Development Human or interpersonal skills Communication
Economic Awareness Communication and Delegation Mentoring abilities
Public Relations Motivating Integrity and high ethical
standards
Law Knowledge and ability for Persuasion & Influence
abstract thinking
Accounting Problem-solving People Management
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B. Independent Directors

Independent Directors play a key role in the decision-making process of the Board and in shaping various strategic initiatives of the Company. The Independent Directors are committed to act in what they believe is in the best interests of the Company and its stakeholders. The Independent Directors are professionals, with expertise and experience in general corporate management, science and innovation, realty, public policy, business, finance and

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financial services. This wide knowledge in their respective fields of expertise and best-in-class boardroom practices helps foster varied, unbiased, independent and experienced perspective. The Company benefits immensely from their inputs in achieving its strategic direction.

Considering the requirements of the skill sets on the board, eminent people having an independent standing in their respective field and who can effectively contribute to the Company’s business and policy decisions are considered by the Nomination and Remuneration Committee, for appointment as Independent Directors on the Board. The Nomination and Remuneration Committee, inter alia, considers qualification, positive attributes, area of expertise and number of Directorships and Memberships held in various committees of other companies by such persons in accordance with the criteria set for selection of Directors and determining Directors’ independence. The Board considers the Committee’s recommendation and takes appropriate decision.

In terms of Section 149(7) of the Companies Act, 2013, the Independent Directors; Mr. Anil Kumar Trigunayat (DIN: 07900294), Mr. Sherry Samuel Oommen (DIN: 07059616) and Ms. Deepali Bendre (DIN: 10753545) have given a declaration to the Company that they meet the criteria of independence as specified under Section 149(6) of the Companies Act, 2013. The Board also confirms that the independent Directors fulfil the independent criteria as prescribed under Companies Act, 2013 and Regulation 16 (1) (b) of Listing Regulations and are Independent of Management of the Company. The Board is of the opinion that the independent directors appointed during the year possess the requisite integrity, expertise, experience, and proficiency to effectively discharge their responsibilities.

The Company has established a Familiarization Programme for Independent Directors. The framework together with the details of the Familiarization Programme conducted has been uploaded on the website of the Company. The web-link to this is https://www.diffusionengineers. com/investors-relation

As stipulated by the Code of Independent Directors under Schedule IV of the Companies Act, 2013, a separate meeting of the Independent Directors of the Company was held on September 20, 2024 and March 31, 2025, without the presence of Non-Independent Directors and members of Management, inter-alia to review the performance of Non-Independent Directors, the Board as whole and the Chairman of the Company taking

into account the views of executive directors and non-executive directors. They also reviewed the accessibility with regards to quality, quantity and timeliness of flow of information between the Company, the management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

During the period under review, Mr Ajay Jain (DIN: 02815416) and Ms Anita Vijayakar (DIN: 01190200) ceased to be Independent Directors of the company upon completion of their second term of 5 (Five) consecutive years with effect from September 13, 2024.

1. Attendance of Independent Directors at meeting of the Independent Directors:-

Name of the Director	Attendance
Mr. SherrySamuel Oommen	02 of 02
Ms. Deepali Bendre	02 of 02
Mr. Anil Trigunayat	02 of 02

C. Key Board Proceedings

The Board provides and critically evaluates strategic direction of the Company, management policies and their effectiveness. Their main function is to ensure that long-term interests of the stakeholders are being served. The agenda for the Board includes strategic review from each of the Board committee, a detailed analysis and review of annual strategic and operating plans and capital allocation and budgets. The Board holds minimum four meetings every year to review and discuss the performance of the Company, its future plans, strategies and other pertinent issues relating to the Company. The Board has complete access to all the relevant information of the Company. The quantum and quality of information supplied by the management to the Board goes well beyond the minimum requirement stipulated under Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

To enable the Board to discharge its responsibilities properly, the directors are effectively briefed at every Board Meeting. Senior Management members are also invited, as and when the need arise, to attend the Board Meetings and to provide additional inputs on the items being discussed by the Board. Apart from placing the statutory information required before the Board Members, it is the policy of the Company to regularly place the information/ matter involving major decisions like Annual Budget, Business Plans, Operations, Technology Collaboration, Investments, Half yearly results and quarterly compliance reports on various laws applicable to the Company, legal matters and other material information.

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Financial Statements

Corporate Overview

The Board performs the following specific functions in addition to overseeing the business and management:

a. Review, monitor and approve major financial and business strategies and corporate actions;
b. Assess critical risks facing the Company - review options for their mitigation;
c. Provide counsel on the selection, evaluation, development and compensation of senior management;
d. Ensure that processes are in place for maintaining the integrity and highest levels of standards of:
i. the Company
ii. the Financial Statements
iii. Compliance with law
iv. relationships with all stakeholders

1. Board Meetings and Deliberations

Your Board meets at least four times in a year as per the law. Apart from the four Board meetings, additional Board meetings are also convened by giving appropriate notice to address the specific requirements of the Company. However, in case of a special and urgent business need, the Board’s approval is taken by passing resolutions by circulation, as permitted by law, which are noted and confirmed in the subsequent Board Meeting. During the period under review i.e. April 1, 2024 to March 31, 2025, Eleven (11) Board Meetings were held on April 26, 2024; July 23, 2024; July 31, 2024; August 26, 2024; September 20, 2024; September 25, 2024; September 30, 2024; October 01, 2024; October 24, 2024; November 12, 2024 and February 07, 2025. The gap between two Meetings did not exceed one hundred and twenty days. The requisite quorum was present in all the meetings. Resolutions were also passed by circulation in compliance with the provisions of Companies Act, 2013 and Rules thereunder.

2. Information Material

For seamless scheduling of Meetings, the calendar of Meetings of the Board and its Committees is circulated and agreed upon at the beginning of the year. The Company Secretary tracks and monitors the Board and its Committees’ proceedings to ensure that the terms of reference/ charters are adhered to, decisions are properly recorded in the minutes and actions on the decisions are

tracked. The terms of reference/charters are amended and updated from time to time in order to keep the functions and role of the Board and its Committees at par with the changing statutes. Meeting effectiveness is ensured through detailed agenda, circulation of material in advance and as per statutory timelines, detailed presentations at the Meetings and tracking of action taken reports at every Meeting. Additionally, based on the agenda, Meetings are attended by Members of the senior leadership as invitees which bring in the requisite accountability and also provide developmental inputs. Where it was not practicable to attach any document to the agenda, it was tabled before the meeting, with specific reference to this effect in the agenda. In special and exceptional circumstances, additional or supplementary item(s) on the agenda are permitted with the approval of the Chairman.

3. Minutes

The Company Secretary records minutes of proceedings of meeting of Board and Committees thereof. Draft minutes are circulated to Board/Committee members for their comments. The minutes are entered in the Minutes Book well within the stipulated time, after considering the comments of Board members.

4. Brief changes in the Board of Directors/ Key Managerial Personnel (KMPs) and Senior Management

The brief details of changes in the Board of Directors / KMPs and Senior Management made during the year and till the date of this report are as follows and are also disclosed in Board Report under the heading Change in the position of Directors, Key Managerial Personnel (KMPs) and Senior Management.

a) Dr. Renuka Garg (DIN: 02815373) tendered her resignation from the post of Non-Executive Director of the Company with effect from July 23, 2024.
b) The Board on the recommendation of Nomination and Remuneration Committee at its meeting held on July 23, 2024 appointed Dr Nitin Garg (DIN: 08558736) as an Additional Director under the category of Non-Executive Director of the Company with effect from July 23, 2024. The appointment was regularised by the shareholders at the Annual General Meeting of the Company held on August 31, 2024.

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c) The Board on the recommendation of Nomination and Remuneration Committee at its meeting held on August 26, 2024 appointed Mr. Sherry Samuel Oommen (DIN: 07059616) and Ms. Deepali Bendre (DIN: 10753545) as an Additional Director under the category of Non-Executive Independent Director of the Company with effect from August 26, 2024. Their appointments as Independent Directors for a term of five (5) years with effect from August 26, 2024 was regularised by the shareholders of the Company in their Extra Ordinary General meeting held on August 26, 2024
d) Mr Ajay Jain (DIN: 02815416) and Ms Anita Vijayakar (DIN: 01190200) ceased to be Independent Directors of the company upon completion of their second term of 5 (Five) consecutive years on September 13, 2024
e) Mr Ramesh Kumar Narasinghbhan (PAN: ABOPN4848E) was appointed as Chief Executive Officer (CEO) of Company with effect from February 13, 2025 for the period of 4 (Four) years in the board meeting held on February 07, 2025
f) Mr. Prashant Garg (DIN: 00049106) was re-appointed as the Chairman and Managing Director for a period of five years with effect from March 16, 2025, pursuant to a resolution passed by our Board of Directors at their meeting held on February 07, 2025 and a resolution passed by Shareholders through postal ballot on April 03, 2025.

5. The Committees of the Board

The Board Committees play a crucial role in the governance structure of the Company and have been constituted to deal with specific areas / activities as mandated by applicable regulations which concern the Company and need a closer review. The Board Committees are set up under the formal approval of the Board to carry out clearly defined roles which are considered to be performed by Members of the Board, as a part of good governance practice. The Chairman of the respective Committees informs the Board about the summary of the discussions held in the Committee Meetings. The minutes of the meetings of all Committees are placed before the Board for review. The Board Committees can

request special invitees to join the meeting, as appropriate.

Meetings of Statutory Committees held during the year and Directors’ Attendance

As on March 31, 2025, the Board has Six committees:

A. Audit Committee
B. Nomination and Remuneration Committee
C. Stakeholders Relationship and Grievances Committee
D. Corporate Social Responsibility Committee
E. Management Committee
F. Risk Management Committee

The role and the composition of these Committees including number of meetings held during the financial year and participation of the members at the meetings of the committees, during the year are as under: -

A. Audit Committee

The Company has an adequately qualified Audit Committee and its composition meets the requirement of Section 177 of the Companies Act, 2013 and Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Audit Committee also acts as a link between the statutory and internal auditors and the Board of Directors. Its purpose is to assist the Board in fulfilling its oversight responsibilities of monitoring financial reporting processes, reviewing the Company’s established systems and processes for internal financial controls, governance and reviewing the Company’s statutory and internal audit activities.

The Audit Committee ensures prudent financial and accounting practices, fiscal discipline and transparency in financial reporting. In terms of one of its important charter, the quarterly financial statements are reviewed by the Audit Committee and recommended to the Board for its adoption. The Audit Committee was re-constituted on August 26, 2024.

In addition to the Audit Committee members, Statutory Auditors, the Chief Financial Officer, Head Internal Audit and Divisional Heads are also invited to the Audit Committee Meetings on need basis.

The role and composition of these committees including number of meetings held during the financial year and participation of the members at the meetings of the committees are as under:-

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Corporate Overview Financial Statements

1. The brief terms of reference of Audit Committee are as under:

(i) oversee our Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible;
(ii) recommendation for appointment, remuneration and terms of appointment of auditors of our Company;
(iii) approve payment to statutory auditors for any other services rendered by them;
(iv) review with the management, the annual financial statements and auditor’s report thereon before submission to the Board for approval, with particular reference to:
- (a) matters required to be included in the Director’s Responsibility Statement to be included in the board of directors’ report in terms of clause (c) of sub-Section 3 of Section 134 of the Companies Act, 2013;
- (b) changes, if any, in accounting policies and practices and reasons for the same;
- (c) major accounting entries involving estimates based on the exercise of judgment by the management of our Company;
- (d) significant adjustments made in the financial statements arising out of audit findings;
- (e) compliance with listing and other legal requirements relating to financial statements;
- (f) disclosure of any related party transactions; and
- (g) modified opinion(s) in the draft audit report.
(vii) review, with the management, the quarterly and any other partial year- period financial statements before submission to the board of directors for their approval;
(viii) review, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilised for purposes other than those stated in the offer document/ prospectus/ notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to our board of directors to take up steps in this matter;
(ix) review and monitor the auditor’s independence and performance, and effectiveness of audit process;
(x) formulating a policy on related party transactions, which shall include materiality of related party transactions and the definition of material modifications of related party transactions;

subject to and conditional upon approval of our Board, approval of related party transactions or subsequent modifications thereto and omnibus approval for related party transactions proposed to be entered into by our Company, subject to conditions as may be prescribed;

Provided that only those members of the committee, who are Independent Directors, shall approve related party transactions;

Explanation: The term “related party transactions” shall have the same meaning as provided in Clause 2(zc) of the SEBI Listing Regulations and/or the applicable Accounting Standards and/or the Companies Act.

(xi) approval of related party transactions to which the subsidiary(ies) of the Company is a party but the Company is not a party, if the value of such transaction whether entered into individually or taken together with previous transactions during a financial year exceeds 10% of the annual consolidated turnover as per the last audited financial statements of the Company, subject to such other conditions prescribed under the SEBI Listing Regulations
(xii) scrutinize inter-corporate loans and investments;
(xiii) valuation of undertakings or assets of our Company, wherever it is necessary;
(xiv) evaluate internal financial controls and risk management systems;
(xv) review, with the management, performance of statutory and internal auditors, adequacy of the internal checks and control systems;
(xvi) review the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit;
(xvii) discuss with internal auditors of any significant findings and follow up there on;
(xviii) review the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or

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irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board;
(xix) discuss with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern;
(xx) to look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors;
(xxi) to review the functioning of the whistle blower mechanism;
(xxii) monitoring the end use of funds through public offers and related matters;
(xxiii) oversee the procedures and processes established to attend to issues relating to the maintenance of books of account, administration procedures, transactions and other matters having a bearing on the financial position of our Company, whether raised by the auditors or by any other person;
(xxiv) act as a compliance committee to discuss the level of compliance in our Company and any associated risks and to monitor and report to the Board on any significant compliance breaches;
(xxv) approve the appointment of the Chief Financial Officer of our Company (i.e., the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience and background, etc. of the candidate;
(xxvi) oversee the vigil mechanism established by our Company and the chairman of audit committee shall directly hear grievances of victimisation of employees and directors, who use vigil mechanism to report genuine concerns;
(xxvii) review the utilization of loans and/ or advances from/investment by the holding company in the subsidiary exceeding ` 100 crore or 10% of the asset size of the subsidiary, whichever is lower including existing loans / advances / investments;
(xxviii) consider and comment on rationale, costbenefits and impact of schemes involving merger, demerger, amalgamation etc., on the Company and its shareholders; and
(xxix) carry out any other function as is mentioned in the terms of reference of the Audit

Committee and any other terms of reference as may be decided by the board of directors of our Company or specified/ provided under the Companies Act, 2013 or by the SEBI LODR Regulations or by any other regulatory authority;

(xxx) To formulate, review and make recommendations to the Board to amend the Audit Committee charter from time to time;
(xxxi) oversee the procedures and processes established to attend to issues relating to the maintenance of books of accounts, administrations procedures, transactions and other matters having a bearing on the financial position of our company, whether raised by the auditors or by any other person;
(xxxii) Act as a compliance committee to discuss the level of compliance in our Company and any associated risks and to monitor and report to the Board on any significant compliance breaches.

2. The Audit Committee regularly reviews the following:

(i) management discussion and analysis of financial condition and results of operations;
(ii) management letters/ letters of internal control weaknesses issued by the statutory auditors of our Company;
(iii) internal audit reports relating to internal control weaknesses;
(iv) the appointment, removal and terms of remuneration of the chief internal auditor shall be subject to review by the Audit Committee; and
(v) statement of deviations in terms of the SEBI LODR Regulations:
quarterly statement of deviation(s) including report of monitoring agency, if applicable, submitted to stock exchange(s); and
Annual statement of funds utilized for purposes other than those stated in the offer document/ prospectus/ notice.

3. Composition of Audit Committee

During the period under review the Audit Committee was reconstituted due to the retirement of Mr Ajay Jain (DIN: 02815416) and Ms Anita Vijayakar (DIN: 01190200) as Independent Directors of the company upon completion of their second term of 5 (Five) consecutive years w.e.f. September 13, 2024. Mr. Sherry Samuel Oommen (DIN: 07059616) and Ms. Deepali Bendre (DIN: 10753545) were inducted with effect from August 26, 2024 as the new members of the Audit Committee.

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Financial Statements

Corporate Overview

As on March 31, 2025 Audit Committee comprises as follows:

Name	Position in the committee	Category
Mr. Sherry Samuel Oommen	Chairman	Non-Executive and Independent Director
Ms. Deepali Bendre	Member	Non-Executive and Independent Director
Mr. Prashant Garg	Member	Executive and Managing Director

All the members of the Committee have sound knowledge of finance, accounts and business management. The Chairman of the Committee has extensive accounting and related financial management expertise.

The Company Secretary of the Company acts as the Secretary to the Committee.

4. Meetings

During the period under review i.e. April 1, 2024 to March 31, 2025, Five (5) Audit Committee Meetings were held on July 25, 2024; July 31, 2024; October 24, 2024; November 12, 2024 and February 07, 2025. Attendance table is attached under the head ‘Attendance of Directors/Members at Board and Committee Meeting (s)’. The requisite quorum was present in all the meetings and not more than one hundred and twenty days have elapsed between two meetings.

B. Nomination and Remuneration Committee In compliance with the provisions of Section 178 of the Companies Act, 2013 and Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors of the Company has re-constituted Nomination and Remuneration Committee on August 26, 2024. The Board has approved a Nomination and Remuneration Policy for Directors, KMPs and other Senior Management.

The committee believes that sound succession planning of the senior leadership is the most important ingredient for creating a robust future for the Company. Therefore, the committee has adopted a rigorous process to ensure that the Board selects the right candidates for senior leadership positions. The Chairman of the Committee is an Independent Director.

1. The brief terms of reference of Nomination and Remuneration Committee are as under:

formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend

to the board of directors a policy relating to, the remuneration of the directors, key managerial personnel and other employees

for appointment of an independent directors, evaluation of the balance of skills, knowledge and experience on the Board and on the basis of such evaluation, preparation of a description of the role and capabilities required of an independent director. The person recommended to the Board for appointment as an independent director shall have the capabilities identified in such description. For the purpose of identifying suitable candidates, the Nomination and Remuneration Committee may:
a. use the services of an external agencies, if required;
b. consider candidates from a wide range of backgrounds, having due regard to diversity; and
c. consider the time commitments of the candidates.
formulation of criteria for evaluation of performance of independent directors and the board of directors;
devising a policy on diversity of board of directors
identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the board of directors their appointment and removal;
whether to extend or continue the term of appointment of the independent director, on the basis of the report of performance evaluation of independent directors;
recommend to the board, all remuneration, in whatever form, payable to senior management.
the Nomination and Remuneration Committee, while formulating the Remuneration Policy, should ensure that –
a. the level and composition of remuneration be reasonable and sufficient to attract, retain and motivate directors of the quality required to run our Company successfully;
b. relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

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c. remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short- and long-term performance objectives appropriate to the working of our Company and its goals.
perform such functions as required to be performed by the compensation committee under the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, as amended, including the following:
a. administering the employee stock option plans of our Company, as may be required;
b. determining the eligibility of employees to participate under the employee stock option plans of our Company;
c. granting options to eligible employees and determining the date of grant;
d. determining the number of options to be granted to an employee;
e. making allotment pursuant to the employee stock option plans;
f. determining the exercise price under the employee stock option plans of our Company; and
g. construing and interpreting the employee stock option plans of our Company and any agreements defining the rights and obligations of our Company and eligible employees under the employee stock option plans of our Company, and prescribing, amending and/or rescinding rules and regulations relating to the administration of the employee stock option plans of our Company.
frame suitable policies, procedures and systems to ensure that there is no violation of securities laws, as amended from time to time, including:
a. the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015; and
b. the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to the Securities Market) Regulations, 2003, by the trust, our Company and its employees, as applicable.
performing such other activities as may be delegated by the Board or specified or provided under the Companies Act or the SEBI LODR Regulations, and the rules and regulations made thereunder or other applicable law, including any amendments thereto as may be made from time to time.

2. Composition of Nomination and Remuneration Committee

During the period under review the Nomination and Remuneration Committee was reconstituted due to the retirement of Mr Ajay Jain (DIN: 02815416) and Ms Anita Vijayakar (DIN: 01190200) as Independent Directors of the company upon completion of their second term of 5 (Five) consecutive years w.e.f. September 13, 2024. Mr. Sherry Samuel Oommen (DIN: 07059616) and Ms. Deepali Bendre (DIN: 10753545) were inducted with effect from August 26, 2024 as the new members of the Nomination and Remuneration Committee.

As on March 31, 2025, the Nomination and Remuneration Committee comprises as follows:

Name	Position in the committee	Category
Ms. Deepali Bendre	Chairman	Non-Executive and Independent Director
Mr. Sherry Samuel Oommen	Member	Non-Executive and Independent Director
Ms. Chitra Garg	Member	Non-Executive Director

3. Meetings

During the period under review i.e. April 1, 2024 to March 31, 2025, Three (3) Nomination and Remuneration Committee Meetings were held on July 23, 2024; August 26, 2024 and February 07, 2025. Attendance table is attached under the head ‘Attendance of Directors/Members at Board and Committee Meeting (s). The requisite quorum was present in all the meetings.

4. Nomination and Remuneration Policy

The web link of Nomination and Remuneration policy is prescribed in Annexure 6 to the Board’s Report.

The performance evaluation criteria for independent directors are elaborately mentioned below in point no. 7 of this Report.

5. Details of Senior Management

The details of Senior Management personnel in terms of Regulation 16(1)(d) of the SEBI (LODR)

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Financial Statements

Corporate Overview

Regulation, 2015, as on date of this report are as mentioned below:

Mr. Ramesh Kumar N (Chief Executive Officer)
Mr. Abhishek Mehta (Chief Financial Officer)
Mr. Ajay Urkude (Vice President)
Mr. Shreekant Premkhede (Vice President, Marketing)
Mr. Sameer Khaladkar (Vice President, Export)
Mr. Manoj Srivastava (Senior Vice President, Sales and Marketing)
Mr. Kaushik Chakraborty (General Manager, Marketing – OEM)
Mr. Ajit Kothathane (Vice President, Export), and
Ms. Chanchal Jaiswal (Company Secretary and Compliance Officer)

There was no change in the senior management of the Company during the period under review till the date of this report other than as mentioned

in Board Report under the heading Change in the position of Directors, Key Managerial Personnel (KMPs) and Senior Management.

6. Remuneration of Directors

Remuneration of the Executive Directors:

In terms of the provisions of Section 197 (12) of the Act read with Rules 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in Annexure-3 to the Board’s Report.

The Company pays remuneration by way of salary, benefits, perquisites and allowances (fixed component) and performance incentives (variable component) to its Executive Directors. Annual increments are decided after recommendation of Nomination and Remuneration Committee, Board of Directors subject to approval by members of the Company.

The details of Remuneration paid to Executive Directors during the year 2024 – 2025 are stated in the following table:-

Name of the director	Designation of Director	Fixed Salary and Allowances	Perquisite	Variable Pay	Stock Options	No. of equity shares held as on March 31, 2025 (In Nos.)1
Mr Prashant Garg	Managing Director and Chairman	2,40,00,000.00/-	-	-	-	1,04,45,099

1 Joint Shareholding with another person shown as a Part of that shareholders holding, whose name appears first i.e. first holder

The Shareholders of the Company on April 03, 2025 by way of postal ballot through remote e-voting process approved Re-Appointment of Mr. Prashant Garg as the Chairman and Managing Director of the Company for a period of Five (5) years with effect from 16[th] March, 2025 till 15[th] March, 2030. The employment may be terminated by serving 6 months notice period with no severance fees.

Remuneration of Non-Executive and Independent Directors:

During the financial year 2024 – 2025, the Company has not paid any amount to Non-Executive Directors and Independent Directors except sitting fees as fixed by Board of Directors. The Non-Executive and Independent Directors of the Company don’t have any pecuniary relationship or transaction with Company during the financial year 2024 – 2025 other than those provided under related party transactions. The Nomination and Remuneration Committee has formulated the criteria for making payments to non-executive directors. In compliance with Regulation 46(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, criteria has been disseminated on the Company’s website: https://www.diffusionengineers.com/investors-relation

The details of Sitting fees (remuneration) paid/payable to Non-Executive and Independent Directors of the Company for the year ended March 31, 2025 are stated in the following table:-

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Name of the Designation of Sitting Fees
director Director (Amount in ` )
Dr. Nitin Garg Non-Executive Director and Non- 3,25,000.00/-
Independent Director
Mr. Anil Kumar Trigunayat Non-Executive Director and 3,95,000.00/-
Independent Director
Ms. Chitra Narendra Garg Non-Executive Director and Non- 3,75,000.00/-
Independent Director
Mr. Sherry Samuel Oommen Non-Executive Director and 2,70,000.00/-
Independent Director
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Name of the director	Designation of Director	Sitting Fees (Amount in`)
Ms. Deepali Bendre	Non-Executive Director and Independent Director	2,60,000.00/-
Mr. Ajay Jain*	Non-Executive Director and Independent Director	1,30,000.00/-
Ms. Anita Vijayakar *	Non-Executive Director and Independent Director	1,30,000.00/-
Dr. Renuka Garg*	Non-Executive Director and Non- Independent Director	70,000.00/-

* Mr Ajay Jain (DIN: 02815416) and Ms Anita Vijayakar (DIN: 01190200) ceased to be Independent Directors of the company upon completion of their second term of 5 (Five) consecutive years on September 13, 2024. Dr. Renuka Garg (DIN: 02815373) has tendered resignation and ceased to be director of company w.e.f July 23, 2024.

7. Board and Independent Directors Evaluation Criteria

The Nomination and Remuneration Committee of the Company has laid down the criteria for performance evaluation of the Board, its Committees, Chairman and individual directors including Independent Directors. The Board of Directors carried out an annual evaluation of its own performance, Board Committees and individual Directors pursuant to the provisions the Companies Act, 2013 and SEBI Listing Regulations. Further the Independent Director in their separate meeting reviewed the quality, quantity and timeliness of flow of Information between the Company management and Board to perform their Duties effectively.

The evaluation of all the directors, the Board as a whole and its committees were conducted based on the criteria and framework designed by Nomination and Remuneration Committee and duly adopted by the Board. The evaluation process focused on various aspects of the functioning of the Board and Committees such as composition of the Board and Committees, experience, integrity, frequency of meeting, competencies, performance of specific duties and obligations, governance issues, etc. The guidance note issued by SEBI on Board Evaluation was also duly considered while conducting the evaluation exercise. Separate exercise was carried out to evaluate the performance of individual Directors on parameters such as attendance, contribution, KPIs, timely decisions, confidentiality, competency, governance, independent judgement etc.

During the above evaluation process, it was noted that the Board as a whole is functioning as a cohesive body which is well engaged with different perspectives. The Board members from different backgrounds bring different competencies that help Board to bring richness and value addition to the discussions. It was also noted that the Committees are functioning well and besides the Committee’s terms of reference

as mandated by law, important issues are brought up and discussed in the Committee Meetings.

8. Employee Stock Option Plans

During the reporting period, The Company has not announced Employee stock option scheme therefore the same is not applicable.

In the Board Meeting held on May 15, 2025, Company introduced ‘Diffusion Engineers Limited – Employee Stock Option Scheme 2025’ (“ESOP 2025” or “Scheme”) ) and implementation through an irrevocable employee welfare trust namely ‘Diffusion ESOP Trust’ (“Trust”) to be setup by the Company, pursuant to the provisions of Section 62(1)(b), other applicable provisions, if any, of the Companies Act, 2013 read with rules framed thereunder, and the relevant provisions of the Securities and Exchange Board of India (Share Based Employee Benefits & Sweat Equity) Regulations, 2021 (“Applicable Laws”), subject to the approval of shareholders of the Company by way of special resolution.

C. Stakeholders Relationship and Grievances Committee

In compliance with the provisions of Section 178 of the Companies Act, 2013 and Regulation 20 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Board of Directors of the Company re-constituted Stakeholders’ Relationship and Grievance Committee on August 26, 2024. The Committee looks into the Redressal of shareholders’ and investors’ complaints such as transfer of shares, non-receipt of Balance Sheet, non-receipt of declared dividends, payment of unclaimed dividends etc.

The Committee specifically looks into various aspects of interest of shareholders and other security holders. The Board was kept apprised of all the major developments on investors’ issues through various reports and statements furnished to the Board from time to time throughout the year. The committee meets at least once in a year.

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Corporate Overview Financial Statements

1. The brief terms of reference of Stakeholders Relationship and Grievance Committee are as under:-

(i) consider and look into various aspects of interest of shareholders, debenture holders and other security holders;
(ii) consider and resolve the grievances of security holders of the Company including compliance related;
(iii) to transfer/transmission of shares, nonreceipt of annual report, non-receipt of declared dividend,
(iv) issue of new/duplicate certificates, general meetings etc;
(v) formulation of procedures in line with the statutory guidelines to ensure speedy disposal of various requests received from shareholders from time to time;
(vi) giving effect to allotment of Equity Shares, approval of transfer or transmission of Equity Shares, debentures or any other securities;
(vii) issue of duplicate certificates and new certificates on split/ consolidation/renewal, etc.;
(viii) monitoring transfers, transmissions, dematerialization, re-materialization, splitting and consolidation of Equity Shares and other securities issued by our Company, including review of cases for refusal of transfer / transmission of shares and debentures;
(ix) reference to statutory and regulatory authorities regarding investor grievances;
(x) reviewing the measures taken for effective exercise of voting rights by the shareholders;
(xi) reviewing adherence to the service standards adopted by the Company with respect to all the services;
(xii) reviewing services rendered by the Registrar and Share Transfer Agent;
(xiii) to dematerialize or rematerialize the issued shares;
(xiv) reviewing the measures and initiatives taken by the Company to reduce the quantum of unclaimed dividends;

Relationship Committee as contained in the SEBI Listing Regulations or any other applicable law, as and when amended from time to time.

2. Composition of Stakeholders’ Relationship and Grievance Committee

During the financial year 2024 – 2025, Stakeholders’ Relationship and Grievance Committee was reconstituted, due to the retirement of Mr Ajay Jain (DIN: 02815416) as Independent Director of the company upon completion of his second term of 5 (Five) consecutive years w.e.f. September 13, 2024. Mr. Sherry Samuel Oommen (DIN: 07059616) was inducted with effect from August 26, 2024 as the new member of the Stakeholders’ Relationship and Grievance Committee.

As on March 31, 2025, the Stakeholders’ Relationship and Grievance Committee comprises as follows:

Name	Position in the committee	Category
Mr. Sherry Samuel Oommen	Chairman	Non-Executive and Independent Director
Mr. Prashant Garg	Member	Executive and Managing Director
Dr. Nitin Garg	Member	Non-Executive Director

Ms. Chanchal Jaiswal, Company Secretary and Compliance Officer of the Company acts as the Secretary to the Committee.

3. Meetings

In order to act in compliance with Regulation 13(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Stakeholders Relationship and Grievance Committee reports to the Board as and when the need arises, with respect to the status of redressal of complaints received from the shareholders of the Company. During the period under review i.e. April 1, 2024 to March 31, 2025, One (1) meeting of Stakeholders Relationship and Grievance Committee was held i.e. on July 31, 2024. The requisite quorum was present in the meeting. Attendance table is attached under the head ‘Attendance of Directors/ Members at Board and Committee Meeting (s)’.

4. Investors’ Grievances

(xv) Ensuring timely receipt of dividend warrants/ Annual Reports/ Statutory Notices by the Shareholders of the Company; and
(xvi) carrying out any other functions required to be carried out by the Stakeholders’

The Company addresses all complaints, suggestions, grievances and other correspondence expeditiously and replies are sent usually within 7-10 days except in case of legal impediments and non-availability of documents.

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The Company endeavors to implement suggestions as and when received from the investors. The details of the requests/complaints received and disposed of during the year are as under:

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Sr Opening
Nature of request / complaint Received Attended Pending
No Balance
1 Change of address 0 0 0 0
2 Bank Details/ Bank Mandate/ Electronic Clearing 0 88 88 0
Services
3 Revalidation of dividend warrants 0 0 0 0
4 Non-receipt of Dividend 0 0 0 0
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The members may contact Ms. Chanchal Jaiswal, Company Secretary & Compliance Officer of the Company for their queries, if any, at the contact details provided in the General Shareholder Information in this report.

D. Corporate Social Responsibility (CSR) Committee

The Company’s business priorities co-exist with social commitments to drive holistic development of people and communities. The Company’s CSR initiatives help to elevate the quality of life of people, especially the unprivileged sections of the society. It seeks to touch and transform lives of people by promoting gender equality, empowering women and education. The Company aims to continue its efforts to build on its tradition of social responsibility to empower people and deepen its social engagements. In terms of Section 135 of the Companies Act, 2013, the Board of Directors at its meeting concluded on August 26, 2024, re-constituted the CSR Committee.

1. The Committee is constituted with powers and responsibilities including but not limited to:

1) To formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the company as specified in Schedule VII of the Companies Act and the rules made thereunder and make any revisions therein as and when decided by the Board;
2) To identify corporate social responsibility policy partners and corporate social responsibility policy programs;
3) To formulate and recommend to the Board, an annual action plan in pursuance to the Corporate Social Responsibility Policy, which shall include the following, namely:
- a. the list of Corporate Social Responsibility projects or programmes that are approved to be undertaken in areas or subjects specified in the Schedule VII of the Companies Act;
b. the manner of execution of such projects or programmes as specified in Rule 4 of the Companies (Corporate Social Responsibility Policy) Rules, 2014;
c. the modalities of utilization of funds and implementation schedules for the projects or programmes;
d. monitoring and reporting mechanism for the projects or programmes; and
e. details of need and impact assessment, if any, for the projects undertaken by the company. Provided that the Board may alter such plan at any time during the financial year, as per the recommendations of the Corporate Social Responsibility Committee, based on the reasonable justification to that effect.
4) To recommend the amount of expenditure to be incurred for the corporate social responsibility activities and the distribution of the same to various corporate social responsibility programs undertaken by the Company;
5) To delegate responsibilities to the corporate social responsibility team and supervise proper execution of all delegated responsibilities;
6) To review and monitor the implementation of corporate social responsibility programs and issuing necessary directions as required for proper implementation and timely completion of corporate social responsibility programs; and
7) To perform such other duties and functions as the Board may require the corporate social responsibility committee to undertake to promote the corporate social responsibility activities of the Company and exercise such other powers as may be conferred upon the CSR Committee in terms of the provisions of Section 135 of the Companies Act.

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Corporate Overview

2. Composition of Corporate Social Responsibility (CSR) Committee

During the financial year 2024 – 2025, CSR Committee was reconstituted, due to the retirement of Ms Anita Vijayakar (DIN: 01190200) as Independent Director of the company upon completion of her second term of 5 (Five) consecutive years w.e.f. September 13, 2024. Ms. Deepali Bendre (DIN: 10753545) was inducted with effect from August 26, 2024 as the new member of the CSR Committee.

As on March 31, 2025, the CSR Committee comprises as follows:

Name	Position in the committee	Category
Ms. Deepali Bendre	Chairman	Non-Executive and Independent Director
Dr. Nitin Garg	Member	Non-Executive Director
Ms. Chitra Narendra Garg	Member	Non-Executive Director

The Company Secretary of the Company acts as the Secretary to the Committee.

3. Meetings

During the period under review i.e. April 1, 2024 to March 31, 2025, One (1) meeting of the Corporate Social Responsibility Committee was held i.e. on July 31, 2024. The requisite quorum was present in the meeting. Attendance table is attached under the head ‘Attendance of Directors/Members at Board and Committee Meeting (s)’.

E. Management Committee

In order to manage the day-to-day operations of the company in a smooth way, the Board of the company has formed a Management Committee of the Board of Directors on October 24, 2024. The Management Committee looks after routine business, planning, performance monitoring, corporate governance, finance, human resources, audit, occupational health and safety, operational issues, stakeholder management and takes decisions on matters requiring immediate attention.

1. The members of the committee perform their roles within the organization. Members of the Management Committee share the following responsibilities:

Planning and Execution – The Committee will establish and review operational plans of the company and will advise on its execution manner.
Policy and Decision implementation – The Committee will advise the senior management on implementing and establishing company’s laid down policies and ensure that those policies are strictly adhered.
Regulatory & Legal Compliances – The Committee will oversee that the compliances which are required to be made under various statutes are made on time as well as the burden of legal cost is minimized and signing of legal documents are done properly including applying for new or renewal of Statutory Licences or permits as required by company from time to time. The committee will have power to authorize officials to file Vakalatnama or any other document required in any legal proceedings.
Banking and Financial – The Committee will ensure that all approval of finance arrangements are properly managed, Finance for operations are available on time and at the best rate, financial compliances are being done. The committee will have power to take banking related decisions like Bank account opening, change in signatories, Bank account closure, setting bank operation limits, online banking etc.
Tender - Committee will also have power to authorize officials for filing, tenders, documents relating to tenders upto ` 50 Crore.
Performance Evaluation – The Committee will oversee that the human resources are efficiently and effectively utilized to achieve the organizational goals. It will also monitor all activities of the organization with proper feedback, contributing to the continuous improvement in governance and service delivery.
Branding and Marketing – The Committee will ensure that the brand of the company is properly handled and marketed so that the company’s goals, mission and vision are achieved.
General Management and Administration – The Committee will guide the management whenever required on day-today administration.

2. Composition of Management Committee

During the financial year 2024 – 2025, Management Committee was constituted to manage the dayto-day operations of the company smoothly in the Board Meeting held on October 24, 2024.

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As on March 31, 2025, the Management Committee comprises of the following:

Name	Position in the committee	Category
Mr Prashant Garg	Chairman	Executive and ManagingDirector
Mr Manoj Srivastava	Member	Senior Vice President – Sales & Marketing
Mr Shreekant Premkhede	Member	Vice President - Marketing
Mr Abhishek Mehta	Member	Chief Financial Ofcer
Ms. Chanchal Jaiswal	Member	Company Secretary and Compliance Ofcer

The Company Secretary of the Company acts as the Secretary to the Committee.

3. Meetings

During the period under review i.e. April 1, 2024 to March 31, 2025, Three (3) meetings of Management Committee were held i.e. on October 24, 2024, November 28, 2024 and February 28, 2025. The requisite quorum was present in the meeting. Attendance table is attached under the head ‘Attendance of Directors/Members at Board and Committee Meeting (s)’.

F. Risk Management Committee

The Company has established a robust mechanism to keep Board Members informed about risk assessment and mitigation procedures. This includes regular reviews to ensure that executive management effectively controls risk through a well-defined framework. The Company has formulated a Policy on Risk Management and constituted a Risk Management Committee. Pursuant to provisions of the Companies Act, 2013, and Regulation 21 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors at its meeting concluded on August 26, 2024, re-constituted the Risk Management Committee.

1. The brief terms of reference of Stakeholders Relationship and Grievance Committee are as under:-

To review and assess the risk management system and policy of the Company from time to time and recommend for amendment or modification thereof;
To implement and monitor policies and/or processes for ensuring cyber security;
To frame, devise and monitor detailed risk management plan and policy of the Company which shall include:
a. A framework for identification of internal and external risks specifically faced by the listed entity, in particular including financial, operational, sectoral, sustainability(particularly ESG related risks),information, cyber security risks, or any other risk as may be determined by the Committee.
b. Measures for risk mitigation including systems and processes for internal control of identified risks.
c. Business Continuity Plan
To review and recommend potential risk involved in any new business plans and processes;
To review the Company’s risk-reward performance to align with the Company’s overall policy objectives;
Monitor and review regular updates on business continuity;
To seek information from any employee, obtain outside legal or other professional advice and secure attendance of outsiders with relevant expertise, if it considers necessary.
Advise the Board with regard to risk management decisions in relation to strategic and operational matters such as corporate strategy; and
Performing such other activities as may be delegated by the Board or specified/ provided under the Companies Act, 2013 or by the SEBI Listing Regulations or statutorily prescribed under any other law or by any other regulatory authority.
To ensure that appropriate methodology, processes and systems are in place to monitor and evaluate risks associated with the business of the company;
To monitor and oversee implementation of the risk management policy, including evaluating the adequacy of risk management systems;
To periodically review the risk management policy, at least once in two years, including by considering the changing industry dynamics and evolving complexity;
To keep the Board of Directors informed about the nature and content of its

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discussions, recommendations and actions to be taken;

To review the appointment, removal, and terms of remuneration of the Chief Risk Officer (if any).
Coordination of activities with other committee, in instances where there is any overlap with the activities of such committees as per the framework laid down by the Board of Directors.

2. Composition of Risk Management Committee

During the financial year 2024 – 2025, Risk management Committee was reconstituted, due to the retirement of Mr Ajay Jain (DIN: 02815416) as Independent Director of the company upon completion of his second term of 5 (Five) consecutive years w.e.f. September 13, 2024. Mr. Sherry Samuel Oommen (DIN: 07059616) was inducted with effect from August 26, 2024 as the new member of the Risk Management Committee

As on March 31, 2025, the Risk Management Committee comprises as follows:

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Position
Name in the Category
committee
Mr Prashant Chairman Executive and
Garg Managing Director
Mr. Sherry Member Non-Executive
Samuel and Independent
Oommen Director
Mr. Anil Member Non-Executive
Kumar and Independent
Trigunayat Director
Mr. Abhishek Member Chief Financial
Mehta Officer
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3. Meetings

During the period under review i.e. April 1, 2024 to March 31, 2025, Two (2) meetings of Risk Management Committee were held i.e. on July 31, 2024 and February 07, 2025. The requisite quorum was present in the meeting. Attendance table is attached under the head ‘Attendance of Directors/ Members at Board and Committee Meeting (s)’.

G. Attendance of Directors/Members at Board and Committee Meeting (s)

The following table shows attendance of Directors at the meeting of Board, Members and Statutory Committee Meeting(s) for the year ended March 31, 2025. Attendance is presented as number of meeting(s) attended, (including meetings attended through electronic mode) out of the number of meeting(s) required to be attended.

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Nomination & Stakeholder’s
Audit
Board Remuneration Relationship
Name Committee
Meeting Committee & Grievance
Meeting
Meeting Committee Meeting
Mr Prashant Garg 11 of 11 05 of 05 - 01 of 01
Dr Nitin Garg 09 of 09 - - 01 of 01
Mr Sherry Samuel Oommen 07 of 07 03 of 03 01 of 01 Not Applicable
Ms Deepali Sameer Bendre 07 of 07 03 of 03 01 of 01 -
Mr Anil Kumar Trigunayat 11 of 11 - - -
Ms Chitra Narendra Garg 10 of 11 - 03 of 03 -
Dr Renuka Garg 02 of 02 - - -
Mr Ajay Jain 03 of 04 02 of 02 01 of 02 01 of 01
Ms Anita Vijayakar 03 of 04 02 of 02 02 of 02 -
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Corporate Attendance Attendance at
Risk
Social Management at EGM held last AGM held
Name Management
Responsibility Committee on August 26, on August 31,
Committee
Meeting 2024 2024
Mr Prashant Garg - 03 of 03 02 of 02 Yes Yes
Dr Nitin Garg 01 of 01 - - Yes Yes
Mr Sherry Samuel Oommen - - 01 of 01 No Yes
Ms Deepali Sameer Bendre Not Applicable - - No No
Mr Anil Kumar Trigunayat - - 02 of 02 Yes Yes
Ms Chitra Narendra Garg 01 of 01 - - Yes Yes
Dr Renuka Garg - - - Not Applicable Not Applicable
Mr Ajay Jain - - 01 of 01 Yes Yes
Ms Anita Vijayakar 01 of 01 - - Yes Yes
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*During the financial year under review:

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Dr. Renuka Garg (DIN: 02815373) tendered her resignation from the post of NonExecutive Director of the Company with effect from July 23, 2024.

The Board on the recommendation of Nomination and Remuneration Committee at its meeting held on August 26, 2024 appointed Mr. Sherry Samuel Oommen (DIN: 07059616) and Ms. Deepali Bendre (DIN: 10753545) as an Additional Director under the category of Non-Executive Independent Director

of the Company with effect from August 26, 2024. Their appointments as Independent Directors for a term of five (5) years with effect from August 26, 2024 was regularised by the shareholders of the Company in their Extra Ordinary General meeting held on August 26, 2024

Mr. Sherry Samuel Oommen (DIN: 07059616) was appointed as a chairperson of Stakeholder’s Relationship & Grievance Committee and Audit Committee and as a member of Nomination and Remuneration Committee and Risk Management Committee with effect from August 26, 2024.

Ms. Deepali Bendre (DIN: 10753545) was appointed as a chairperson of Corporate Social Responsibility Committee and Nomination and Remuneration Committee and as a member of Audit Committee with effect from August 26, 2024.

Mr Ajay Jain (DIN: 02815416) and Ms Anita Vijayakar (DIN: 01190200) ceased to be Independent Directors of the company upon completion of their second term of 5 (Five) consecutive years on September 13, 2024.

III. General Body Meetings

A. Annual General Meetings:

Details of location, date and time of the Annual General Meetings (AGM) held during the last three years and details of the special resolutions passed in those AGM are given below:

Year Ended	Venue	Date & Time	Details of Special Resolution passed at the AGM
March 31, 2022	T-5 & 6, MIDC, Hingana, Nagpur, Maharashtra, India, 440016 through Video Conferencing / other Audito Visual Means.	September 27, 2022 Tuesday at 11.00 AM	Not Applicable
March 31, 2023	T-5 & 6, MIDC, Hingana, Nagpur, Maharashtra, India, 440016 through Video Conferencing / other Audito Visual Means.	September 25, 2023 Monday at 05.00 PM	To issue Equity Shares on Preferential Basis in compliance with Section 42 and Section 62 of the Companies Act, 2013
March 31, 2024	T-5 & 6, MIDC, Hingana, Nagpur, Maharashtra, India, 440016 through Video Conferencing / other Audito Visual Means.	August 31, 2024, Saturday at 03.00 PM	Not Applicable

Notes:

The above-mentioned Special Resolutions were passed with requisite majority.
The AGM of the members of Diffusion Engineers Limited was held through Video Conferencing (‘VC’) / other Audio-Visual Means (‘OAVM’) in Compliance with the provisions of the Companies Act, 2013 (‘the Act’), and applicable Ministry of Corporate affairs (MCA) circulars.
B. Special resolutions passed through postal ballots in last year & details of voting pattern and procedure: During the financial year 2024-25, pursuant to Section 110 of the Companies Act, 2013 read with Companies (Management and Administration) Rules, 2014, the Company has passed the following special resolutions as set out below:

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Financial Statements

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Date of Postal Ballot Approval Link for Voting Procedure
Resolution passed Scrutinizer
Notice Date and Results
March 04, 2025 Re-appointment of April 03, CS Amit K https://diffusionengineers.
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Date of Postal Ballot Notice	Resolution passed	Approval Date	Scrutinizer	Link for Voting Procedure and Results
March 04, 2025	Re-appointment of	April 03,	CS Amit K	https://difusionengineers.
[Voting start date: Wednesday, March 05, 2025 (09. 00 a.m. IST) and Voting end date: Thursday, April 03, 2025 (05.00p.m. IST)]	Mr. Prashant Garg (DIN: 00049106) as the Chairman and Managing Director of the Company	2025	Rajkotiya, Practicing Company Secretary	com/images/Investment/ Intimation-about-Postal- Ballot-Result-05-04-2025.pdf

C. Whether any Special Resolution is proposed to be passed through Postal Ballot: -

The Board of Directors at its meeting held on May 15, 2025 approved, ‘Diffusion Engineers Limited – Employee Stock Option Scheme 2025’ and implementation through an irrevocable employee welfare trust namely ‘Diffusion ESOP Trust’ to be set-up by the Company, pursuant to the provisions of Section 62(1)(b), of the Companies Act, 2013 read with rules framed thereunder, and the relevant provisions of the Securities and Exchange Board of India (Share Based Employee Benefits & Sweat Equity) Regulations, 2021, subject to the approval of shareholders of the Company by way of special resolution.

Following Special Resolutions are proposed to be passed through Postal Ballot through remote e-voting

Approval of ‘Diffusion Engineers Limited – Employee Stock Option Scheme 2025’
Consider and approve grant of Options to the employees of the subsidiary Company of the Company under ‘Diffusion Engineers Limited – Employee Stock Option Scheme 2025’
Approval for secondary acquisition of shares through Trust route for the implementation of ‘Diffusion Engineers Limited – Employee Stock Option Scheme 2025’
Approval for provision of money by the Company for purchase of its own Shares by the Trust under the ‘Diffusion Engineers Limited – Employee Stock Option Scheme 2025’

IV. Means of Communication

A. Financial Results:

Pursuant to regulation 47 (4) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company is required to publish its quarterly/half yearly/ annual Financial Results in at least one English language national daily newspaper circulating in the whole of India and in one daily newspaper published in the

regional language. The Company displays its financial results on the website of the Company https://www.diffusionengineers.com/.

The Company normally publishes the financial results in Indian Express-English Language and LoksattaMarathi (Regional) Language.

B. Website:
The Company’s website https://www. diffusionengineers.com/ contains a separate dedicated section namely “Investors Relation” where shareholders information is available. The financial results, Annual Report and official news releases of the Company are also displayed on the website of the Company https://www. diffusionengineers.com/ in a downloadable form.
C. Presentations to institutional investors / analysts: The Company has not given any presentations to institutional investors and financial analysts on the Company’s quarterly and half – yearly financial results during the reporting period i.e during the financial year 2024 – 2025.

However, as on date of this report the Company made presentations to the institutional investors and financial analysts on the Company’s financial results for quarter and year ended March 31, 2025 which were sent to the Stock Exchange. These presentations, video recordings and transcript of the meetings are available on the website of the Company. No unpublished price sensitive information was discussed in the meetings with institutional investors and financial analysts.

D. News releases, presentations, among others: Official news releases and official media releases are sent to Stock Exchanges and are put on the Company’s website https://www. diffusionengineers.com/ wherever applicable in accordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
V. GENERAL SHAREHOLDER INFORMATION

The General Shareholder Information is presented in a separate section forming part of this Report.

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VI. OTHER DISCLOSURES

a) Materially Significant Related Party Transactions:

Pursuant to provisions of regulation 23(2) read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, all the related party transactions are approved by Audit Committee, Board and Shareholders (wherever required). Further, in compliance with the Regulation 23 and 46 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated policy on dealing with related party transactions and same is available on the company’s website at https:// www.diffusionengineers.com/investors-relation

The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and its Related Parties.

This policy specifically deals with the review and approval of Material Related Party Transactions keeping in mind the potential or actual conflicts of interest that may arise because of entering into these transactions. All Related Party Transactions entered during the year were in Ordinary Course of the business and on Arm’s Length basis. These transactions are placed before the Audit Committee, Board and Shareholders (wherever required) for review and approval.

Suitable disclosure as required by the Indian Accounting Standards (IND AS 24) has been made in the notes to the Standalone Financial Statements which forms part of the Annual Report.

Further, the Company during the reporting year has not entered into a contract/ arrangement/ transaction which is considered material in accordance with the definition of materiality as included in the Company’s Related Party Transaction Policy read with Regulation 23 Listing Regulations as amended from time to time.

All related party transactions were made at arms’ length basis and have no potential conflict with the interest of the Company.

The disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is appended as Annexure-2 to this Board’s Report.

b) No Penalty or Strictures:

There has been no instance of non-compliance by the Company on any matter relating to the capital markets and accordingly no material penalties have been levied or strictures have been passed by the Securities and Exchange Board of India or Stock Exchange(s) or any other statutory

authority since listing on the stock exchanges i.e. during last 8 months.

c) Whistle Blower Policy/ Vigil Mechanism: Pursuant to Section 177 (9) and (10) of the Companies Act, 2013 read with Regulation 22 of Listing Regulations, the Company has formulated Whistle Blower Policy for vigil mechanism of Directors and employees to report to the management about the unethical behaviour, fraud or violation of Company’s Code of Conduct. The mechanism provides for adequate safeguards against victimization of employees and Directors who use such mechanism and makes provision for direct access to the Chairperson of the Audit Committee in exceptional cases. None of the personnel of the Company has been denied access to the Audit Committee. The Whistle Blower Policy is displayed on the Company’s website viz. https:// www.diffusionengineers.com/investors-relation.
d) Compliance of mandatory requirements of Corporate Governance and adoption of the non-mandatory requirements:

The Company has complied with all the requirements of Corporate Governance, as applicable to the Company, as on March 31, 2025. The Company continuously endeavours to adopt non - mandatory requirements.

e) Company Secretary’s Certificate on Corporate Governance:

As required under Schedule V of Listing Regulation, the Practicing Company Secretary’s Certificate on Corporate Governance is appended as Annexure- 8 to the Board’s Report.

f) Web link of policy for determining ‘material’ subsidiaries:

The Company has adopted a Policy on Determination of Material Subsidiary in line with the requirements of the Listing Regulations. The objective of this policy is to lay down criteria for identification and dealing with material subsidiaries and to formulate a governance framework for subsidiaries of the Company. The policy on Material Subsidiary is available on the website of the Company under the web link: https:// https://www.diffusionengineers.com/ investors-relation.

g) Web link of policy for Policy on dealing with related party transactions:

The Company has adopted a Policy on Related Party Transactions in line with the requirements of the Listing Regulations and Companies Act, 2013. The objective of this policy is to lay down criteria for identification and dealing with related party. The policy on Related Party Transaction is available on the website of the Company under

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the web link: https://www.diffusionengineers. com/investors-relation.

h) Commodity Price Risk/Foreign Exchange Risk and Hedging:

In the normal course of business, the Company is exposed to risks arising from fluctuations in exchange rates and interest rates. To manage these exposures, it uses derivative financial instruments strictly for hedging purposes—not for speculation.

Risk management activities are overseen by the Company’s Treasury Team, operating within the framework of the Currency and Interest Rate Risk Management which ensures that financial risks are identified, measured, and managed effectively, in line with the Company’s overall risk management objectives.

The Company maintains a robust governance framework through well-defined policies and procedures. Any decision to enter into derivative contracts is made in accordance with this policy framework, taking into account current market conditions and the relative cost and benefit of the instruments.

i) Details of utilization of funds raised through preferential allotment or qualified institutions placement:

The Company has raised funds through Initial Public offer (“IPO”) during the financial year 2024 – 2025. the equity shares of the Company got listed on BSE and NSE (“Stock Exchanges”) with effect from October 04, 2024, pursuant to the Initial Public offer (“IPO”) of the Company by way of fresh issue of 94,05,000 Equity Shares aggregating to INR 1,579.64 million. The Company is utilizing the funds raised through Initial Public offer (“IPO”) in accordance with objects of the issue.

j) Certificate from a Company Secretary in Practice on debarred or disqualified Directors: A Certificate from Company Secretary in Practice stating that none of the directors on the board of the company has been debarred or disqualified from being appointed or continuing as directors of companies by the Board/Ministry of Corporate Affairs or any such statutory authority is attached as an Annexure-8 to the Board’s Report.
k) Recommendation of any committee to Board:

The Board of Directors has accepted all mandatory recommendations of the Committees of Board of Directors.

l) Total fees for all services paid on a consolidated basis to the Statutory Auditor by Company and its subsidiaries:

Total fees for all services paid by the Company and its subsidiaries, on a consolidated basis, to

PGS & Associates, Chartered Accountants (Firm Registration No. – 122384W), Statutory Auditors of the Company, during the year ended March 31, 2025, is INR 10,05,000/-.

m) Disclosures in relation to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:

The Status of Complaints under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 is as follows:

a. Number of complaints filed during the financial year: 0
b. Number of complaints disposed of during the financial year: 0
c. Number of complaints pending as on end of the financial year: 0
n) Disclosure of Non-compliance of any requirement of Corporate Governance Report of sub-paras mentioned above with reasons thereof shall be disclosed:

The Company has complied with all the requirements of sub paras (2) to (10) of Part C of Schedule V of the SEBI (LODR) 2015 as amended from time to time.

o) Adoption of discretionary requirements as specified in Part E of Schedule II SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015:

The following discretionary requirements as specified in Part E of Schedule II of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been adopted by the Company: -

i. The Board:

The Chairman of the Company is an Executive Director.

The company has one women Independent Director on its Board of Directors.

ii. Shareholders rights:

The quarterly and half yearly financial results of the Company are published in the English newspaper in Indian Express having a wide circulation all over India and in a Marathi newspaper (Loksatta) having a circulation in Nagpur. However, the same are not sent separately to the shareholders of the Company but hosted on the website of the Company.

iii. Audit Qualifications:

During the year under review, there is no audit qualification in your Company’s Financial Statements.

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iv. Reporting of Internal Auditor:

Internal auditors of the Company make quarterly presentations to the audit committee on their reports.

v. Separate posts of Chairperson and the Managing Director or the Chief Executive Officer:

The Chairman of the Company is also the Managing Director.

vi. Independent Directors

A separate meeting of the Independent Directors of the Company was held on September 20, 2024 and March 31, 2025, without the presence of Non-Independent Directors and members of Management and all the Independent Directors were present in both the meetings,

vii. Risk Management

The company have constituted risk management committee with the composition, roles and responsibilities specified in regulation 21 of SEBI (LODR) Regulations, 2015.

p) Disclosures of the compliance with Corporate Governance requirements:

All compliances with regards to Corporate Governance requirements specified in regulations 17 to 27 and clause (b) to clause (i) of subregulation (2) of regulation 46 and Para C, D, E of Schedule V Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 are applicable to the Company and all the activities done by the Company are in compliance with the applicable provisions. A certificate from practicing Company Secretary certifying compliance with the provisions of Corporate Governance forms part of Annexure-8 to Board Report.

q) Disclosure with respect to Suspense Demat Account:

In accordance with the requirements of Regulation 34(3) and Part F of Schedule V of the Listing Regulations, following are details of equity shares in the suspense account.

(a) aggregate number of shareholders and the outstanding shares in the suspense account lying at the beginning of the year: 6 shareholders holding 23,100 shares
(b) number of shareholders who approached listed entity for transfer of shares from suspense account during the year: 2
(c) number of shareholders to whom shares were transferred from suspense account during the year: 2
(d) aggregate number of shareholders and the outstanding shares in the suspense account lying at the end of the year: 4 shareholders holding 16,416 shares

The voting rights on these shares shall remain frozen till the rightful owner of such shares claims the shares.

r) Web link of Document Preservation & Archival policy:

In Compliance with regulation 9 and 30(8) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 the company has formulated a Document Preservation & Archival policy.

The same can be downloaded from the website of the company https://www. diffusionengineers.com/ by following the link: https://www.diffusionengineers.com/ investors-relation

s) Disclosure by listed entity and its subsidiaries of ‘Loans and advances’ in the nature of loans to firms/ companies in which directors are interested by name and amount:

The Company has not provided any loans and advances in the nature of Loan to firms/companies in which directors are interested.

t) Details of material subsidiaries of the listed entity

In terms of Regulation 16 (1) (c) and Regulation 24 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company has adopted a Policy for determining Material Subsidiary.

None of the unlisted subsidiaries qualify to be material subsidiary as per the threshold limit provided under Regulation 16 of Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015.

The Audit Committee reviews the Consolidated Financial Statements of the Company and the investments made by its unlisted subsidiary Companies. The minutes of the Board meetings along with a report on significant developments of the unlisted subsidiary companies are periodically placed before the Board of Directors of the Company.

u) Disclosure of certain types of agreements binding listed entities:

During the year, the company had not entered into any agreement that needs to be disclosed pursuant to clause 5A of paragraph A of Part A of Schedule III of SEBI (LODR) Regulations, 2015.

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General Shareholder Information

A. Company Identification Number - L99999MH2000PLC124154
B. NSE Symbol – DIFFNKG BSE Scrip Code – 544264
C. Company’s Registered Address - T-5 & 6, MIDC, Hingana, Nagpur, Maharashtra, India, 440016
D. Reporting Financial Year - April 1, 2024 - March 31, 2025
E. Date and Time of Annual General Meeting - Tuesday, July 22, 2025 at 2:00 PM
F. Venue of Annual General Meeting - The 43[rd] Annual General Meeting of the Members of the Company will be held through Video Conferencing (VC) or Other Audio Visual Means (OAVM) as per the relaxation given by Ministry of Corporate Affairs vide General Circular No. 09/2024 dated September 19, 2024. Registered office of the company shall be the deemed venue for AGM.
G. Book Closure - 11[th] July 2025 to 22[nd] July 2025 (both days inclusive)
H. Cut-off date for sending Notices of AGM – June 20, 2025
I. Cut-off date for Dividend & E-voting - 10[th] July 2025
J. Dividend Payment Date - On or before August 20, 2025
K. Listing on Stock Exchanges: The Equity shares of the company are listed on the following stock exchange

Name of the Stock Exchange	Address	Code	ISIN	Security ID	Website
National Stock Exchange of India Limited	Exchange Plaza, Bandra Kurla Complex Bandra (East), Mumbai - 400 051	DIFFNKG	INE184O01015	DIFFNKG	https://www.nseindia.com/
BSE Limited	Floor 25, P. J. Towers, Dalal Street, Mumbai – 400001	544264	INE184O01015	DIFFNKG	www.bseindia.com

The Company has paid the Annual Listing Fee for the year 2025-26 to National Stock Exchange of India Limited and BSE Limited. During Financial Year 2024-25, the trading of security of the Company was not suspended.

L. Registrar & Transfer Agents:-

Name & Address : Bigshare Services Private Limited , Office No S6-2, 6[th] floor Pinnacle Business Park, Next to Ahura Centre, Mahakali Caves Road, Andheri (East) Mumbai - 400093, India.”

Tel. : 022-62638200

Fax : 022-68638299

E-mail : [email protected] Website : www.bigshareonline.com

M. Share Transfer System: -

The process and approval of share transfer has been delegated to the Company Secretary and Stakeholders’ Relationship and Grievance Committee of the Board of Directors. Securities lodged for transfer at the Registrar’s address are normally processed within 15 days from the date of lodgement if the documents are clear in all respects. All requests for dematerialization of securities are processed and the confirmation is given to the depositories within 15 days.

Pursuant to Regulation 13(3) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a statement on investor grievances is filed with the stock exchanges and placed before the Board of Directors on a quarterly basis.

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N. Distribution of Shareholding (In Rupees) as on March 31, 2025: -

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NUMBER OF PERCENTAGE SHARE PERCENTAGE
SHAREHOLDING OF NOMINAL
SHAREHOLDERS OF TOTAL AMOUNT OF TOTAL
`
1 5000 22329 94.9806 14196050 3.7931
5001 10000 553 2.3523 4268690 1.1406
10001 20000 331 1.4080 4721760 1.2616
20001 30000 78 0.3318 1988220 0.5312
30001 40000 51 0.2169 1803330 0.4818
40001 50000 44 0.1872 2087660 0.5578
50001 100000 48 0.2042 3756150 1.0036
100001 999999999999999 75 0.3190 341440730 91.2303
TOTAL 23509 100.00 374262590 100
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O. Dematerialization of Shares and Liquidity: -

The Company’s shares are compulsorily traded in dematerialized form. As on March 31, 2025, 99.99% of Equity shares of the Company are in dematerialized form. The Company’s shares are liquid and traded on the ‘BSE Limited’ and National Stock Exchange of India Limited.

Under the Depository System, the International Securities Identification Number (ISIN) allotted to the Company’s shares is INE184O01015

P. Outstanding ADRs/ GDRs/ Warrants or any convertible instruments, conversion date and likely impact on equity: -

As on March 31, 2025, the Company has no American Depository Receipts / Global Depository Receipts / Warrants or any such convertible instruments outstanding, hence there is no likely impact on the Company’s Equity Shares.

Q. Commodity Price Risk / Foreign Exchange Risk and Hedging: -

During the FY 2024-25, the Company had managed the foreign exchange risk as the company is naturally hedged, no hedge position was taken to limit the risk. The details of foreign currency exposure are disclosed in Notes to the Financial Statements of the Company.

R. Plant Locations: -

Manufacturing Units	Operational from	Address	Products
Unit I	1994	T-5, T-6, Nagpur Industrial Area, MIDC, Hingna, Nagpur – 440016 Maharashtra	Special purpose welding electrodes
Unit II	2000	N-78, N-79, Nagpur Industrial Area, MIDC, Hingna, Nagpur – 440016 Maharashtra	Flux cored wire, wear plates and wear part through fabrication and machining
Unit III	2015	T-12, Nagpur Industrial Area, MIDC, Hingna, Nagpur – 440016 Maharashtra	Anti-wear consumables
Unit IV	2016	Khasra No. 35, 36, 38/1, 38/2, 38/3, Khapri (Uma), Nagpur- 441 501, Maharashtra	Flux cored wires, wear plates and heavyengineeringmachinery

S . Address for Correspondence: -

Registered Office and any other matter:

CS Chanchal Jaiswal Company Secretary and Compliance Officer Tel.: 9158317943 E-mail: [email protected]

T-5 & 6, MIDC, Hingana, Nagpur, Maharashtra, India, 440016

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For Transfer/Dematerialization of shares, change of address of members and other queries

M/S Bigshare Services Private Limited

Office No S6-2, 6[th] floor Pinnacle Business Park, Next to Ahura Centre, Mahakali Caves Road, Andheri (East) Mumbai - 400093, India.” Tel.: 022-62638200 Fax :022-68638299 E-mail: [email protected] Website: www.bigshareonline.com

T. List of Credit Ratings obtained: -

Following are the Credit Rating obtained during the FY 2024-25:-

1) Rating given by Acuite Ratings & Research Limited on January 14, 2025

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Product Quantum ( Cr) Long Term Rating Short Term Rating Bank Loan Ratings 47.50 ACUITE A | Stable | - Upgraded Bank Loan Ratings 18.00 - ACUITE A1 | Upgraded Total Outstanding Quantum ( Cr) 65.50 - -
Rating given by CRISIL Ratings Limited on August 31, 2024
Total Bank Loan Facilities Rated ` 65 Crore
Long Term Rating CRISIL A-/Stable (Assigned)
Short Term Rating CRISIL A2+/Stable (Assigned)
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2) Rating given by CRISIL Ratings Limited on August 31, 2024

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Standalone Independent Auditor’s Report

TO THE MEMBERS OF DIFFUSION ENGINEERS LIMITED

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

Opinion

We have audited the accompanying Standalone Financial Statements of DIFFUSION ENGINEERS LIMITED (“the Company”), which comprise the balance sheet as at March 31, 2025, and the Statement of Profit and Loss including the statement of Other Comprehensive Income and the Cash Flows Statement and the Statement of Changes in Equity for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 (‘Act’) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2025, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs), as specified under section 143 (10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the ‘Auditor’s responsibilities for the audit of the Standalone Financial Statements’ section of our report. We are independent of

the Company in accordance with the code of ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the code of ethics.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone Ind AS Financial Statements for the financial year ended March 31, 2025. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the standalone financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements.

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Key audit matters How our audit addressed the key audit matter
Revenue recognition
Revenue is recognized when control of the goods are Our audit procedures included the following:
transferred to the customer at an amount that reflects Evaluated Company’s revenue recognition policy and its
the consideration to which the Company expects to be compliance in terms of Ind AS 115 ‘Revenue from contracts with
entitled in exchange for those goods. During the year customers’.
ended March 31, 2025, the Company has recognized
• Assessed the design and tested the operating effectiveness of
revenue amounting to ` 3160.07 millions. Terms of
internal controls related to revenue recognition.
sales arrangements, including the timing of transfer of
control, delivery specifications including incoterms in • Evaluated the general information and technology control
environment and tested the operating effectiveness of key IT
case of exports, timing of recognition of sales require
significant judgment in determining revenues. The application controls over recognition of revenue.
risk is, therefore, that revenue may not get recognised • Tested samples of individual sales transaction and traced to
in the correct period. Therefore, there is a significant sales invoices, sales orders, (received from customers) and
risk associated with timing of revenue recognition in other related documents. Further, in respect of the samples
accordance with terms of Ind AS 115 ‘Revenue from tested, reviewed recognition of revenue when the conditions
contracts with customers’. Accordingly, due to the for revenue recognitions are met.
significant risk associated with revenue recognition in • Selected sample of sales transactions made pre- and post-
accordance with terms of Ind AS 115 ‘Revenue from year-end, traced the period of revenue recognition to
contracts with customers’, it has been determined to underlying documents.
be a key audit matter in our audit of the Standalone
• Performed procedures to identify any unusual trends of
financial statements.
revenue recognition.
• Assessed the relevant disclosures made within the standalone
financial statements.
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IT systems and controls over financial reporting.

We identified IT systems and controls over financial We applied the following audit procedures among others, to obtain reporting as a key audit matter for the Company sufficient and appropriate audit evidence: because its financial accounting and reporting • Assessed the complexity of the IT environment through systems are fundamentally reliant on IT systems and discussion with the IT team and identified IT applications that IT controls to process significant transaction volumes, are relevant to our audit; specifically with respect to revenue and raw material • Assessed the design and evaluation of the operating consumption. Also, due to large transaction volumes effectiveness of IT general controls over program development and the increasing challenge to protect the integrity and changes, access to program and data and IT operations; of the Company’s systems and data, cyber security has become more significant. Automated accounting • Performed inquiry procedures with the IT team of the Company in respect of the overall security architecture and procedures and IT environment controls, which include any key threats addressed by the Company in the current year; IT governance, IT general controls over program development and changes, access to program and data • Assessed the design and evaluation of the operating and IT operations, IT application controls and interfaces effectiveness of IT application controls in the key processes between IT applications are required to be designed impacting financial reporting of the Company; and to operate effectively to ensure accurate financial • Assessed the operating effectiveness of controls relating to reporting.

We applied the following audit procedures among others, to obtain sufficient and appropriate audit evidence:

Assessed the design and evaluation of the operating effectiveness of IT application controls in the key processes impacting financial reporting of the Company;

Assessed the operating effectiveness of controls relating to data transmission through the different IT systems to the financial reporting systems.

Management’s Responsibility for the Financial Statements

The Company’s board of directors are responsible for the matters stated in section 134 (5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standard) Rules, 2015, as amended. This responsibility also includes maintenance of adequate

accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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In preparing the Standalone Financial Statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Company’s financial reporting process.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions

that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements for the financial year ended March 31, 2025 and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor’s Report) Order, 2016 issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (herein after referred to as the “Order”), and on the basis of such checks and records of the Company as we consider appropriate and according to the information and explanations given to us, we give in the “Annexure A”, a statement on the matters specified in paragraphs 3 and 4 of the Order.
As required by section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best of our

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knowledge and belief were necessary for the purposes of our audit.

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid financial statement comply with the Accounting Standards referred to in section 133 of the Companies Act, 2013 read with the Rule 7 of the Companies (Account) Rules 2015.
e) On the basis of written representations received from the directors as on March 31, 2025 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2025, from being appointed as a director in terms of Section 164(2) of the Companies Act, 2013.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in “Annexure B” Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting;
g) In our opinion, the managerial remuneration for the year ended March 31, 2025 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act and
h) With respect to other matters to be included in the Auditors’ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us, we report as under:
(i) The Company has disclosed the impact of pending litigations as at March 31, 2025, if any, on its financial position in its financial statements.
(ii) The Company did not have any long – term contracts including derivative contracts for which there were any material foreseeable losses;
(iii) There was no amount required to be transferred to the Investor Education and

Protection Fund by the Company during the year ended March 31, 2025;

(iii) a) The Management has represented that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
c) Based on the audit procedures that were considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub clause (a) & (b) contain any material misstatement.
(v) The final dividend paid by the Company during the year in respect of that declared for the previous year is in accordance with section 123 of the Act to the extent it applies to payment of dividend.

As stated in Note No 14 to the standalone financial statements, the Board of Directors of the Company have proposed final dividend for the year which is subject to the

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approval of the members at the ensuing Annual General Meeting.

(vi) Based on our examination, which included test checks, the Company has used accounting software’s for maintaining its books of account for the financial year ended March 31, 2025 which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software’s. Further, during the course of our audit we did not come across any instance of the audit trail feature being tampered with.

As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April 1, 2023, reporting under Rule

11(g) of the Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statutory requirements for record retention is not applicable for the financial year ended March 31, 2025.

For PGS & Associates Chartered Accountants Firm Registration No.: 0122384W UDIN: 25111592BMMJFJ8535

Premal H Gandhi

Partner

Membership Number: 111592

Place: Mumbai Date: 15[th] May 2025

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ANNEXURE A TO THE INDEPENDENT AUDITOR’S REPORT

(REFERRED TO IN PARAGRAPH 1 UNDER ‘REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS’ SECTION OF OUR REPORT OF EVEN DATE)

(i) In respect of its Property, Plant & Equipment and Intangible Assets:
(a) (A) The company has maintained proper records showing full particulars, including quantitative details and situation of its “Property, Plant and Equipment” on the basis of available information.
- (B) the company has maintained proper records showing full particulars of intangible assets.
(b) As explained to us, the “Property, Plant and Equipment” have been physically verified by the management, in accordance with a phased programme of verification, which in our opinion, is reasonable, having regard to the size of the company and the nature of its assets. The frequency of physical verification is reasonable and no material discrepancies were noticed on such verification.
(c) The title deeds of the all the immovable properties held by the company are in the name of the company;
(d) The Company has not revalued its Property, Plant and Equipment (including right to use) or intangible assets during the year ended March 31, 2025,
(e) There are no proceedings initiated or are pending against the company for holding any Benami property under the Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder.
(ii) (a) In respect of its inventories, as explained to us, the inventories have been physically verified by the management at regular intervals during the year. In our opinion, the frequency of such verification is reasonable having regard to the size of the company and nature of its business. Discrepancies of 10% or more in aggregate for each class of inventory were not noticed on such physical verification.
(b) As disclosed in Note No. 19 to the standalone financial statements, the Company has been sanctioned working capital limits in excess of `5 crore in aggregate from banks on the basis of security of current assets of the Company. The quarterly returns/statements filed by the company with such banks are in agreement with the books of accounts of the company.
(iii) The Company has not made any investments, provided any guarantee or security or granted any loans or advances in the nature of loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or any other parties during the year and accordingly, the requirement to report on clause 3(iii) is not applicable to the Company.
(iv) In our opinion & according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Act, with respect to the loans and investments made.
(v) The Company has neither accepted any deposits from the public nor accepted any amounts which are deemed to be deposits within the meaning of sections 73 to 76 of the Companies Act and the rules made thereunder, to the extent applicable. Accordingly, requirement to report on clause 3(v) of the order is not applicable to the company.
(vi) We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) In respect of statutory dues:

(a) According to the information and explanations given to us and in our opinion, the Company has been regular in depositing undisputed statutory dues including Provident Fund, Employees’ State Insurance, Income Tax, Sales Tax, GST, Service Tax, Custom Duty, Excise Duty, Value Added Tax, Cess and any other statutory dues, as applicable, with the appropriate authorities and hence, no undisputed amounts payable in respect of provident fund, income tax, sales tax, value added tax, duty of customs, service tax, cess and other material statutory dues were in arrears as at March 31, 2025 for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us and the records of the company examined by us, there are no outstanding dues of

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Income Tax, Sales Tax, Custom Duty, Excise Duty, Service Tax or Value Added Tax that have not been deposited except GST which is as under :

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----- Start of picture text -----

Sr. Name of the Period to which the Forum where dispute
Name of Statutes Amount ( ` )
No Dues amount relates is pending
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Sr. No Name of Statutes	Name of the Dues	Amount (`)	Period to which the amount relates	Forum where dispute ispending

1 Goods and Service Tax Act	GST Appeal	45,00,000	01.07.2017 to 31.03.2020	Assistant Commissioner of GST
(viii) The Company has not surrendered or disclosed any transaction, previously unrecorded in the books of account, in the tax assessments under the Income Tax Act, 1961 as income during the year. Accordingly, the requirement to report on clause 3(viii) of the Order is not applicable to the Company. (ix) (a) The Company has not defaulted in repayment of loans or other borrowings or in the payment of interest thereon to any lender. (b) The Company has not been declared wilful defaulter by any bank or fnancial institution or government or any placement of shares /fully or partially or optionally convertible debentures during the year under audit and hence, the requirement to report on clause 3(x) (b) of the Order is not applicable to the Company and hence not reported upon (x) (a) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the standalone fnancial statements and according to the information and explanations given by the management, no fraud by the Company or no material fraud on the Company has been noticed or reported during the year.

(b) The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.
(b) During the year, no report under sub-section (12) of section 143 of the Companies Act, 2013 has been filed by cost auditor/ secretarial auditor or by us in Form ADT – 4 as prescribed under Rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government.
(c) Term loans were applied for the purpose for which the loans were obtained.
(d) On an overall examination of the standalone financial statements of the Company, no funds raised on shortterm basis have been used for longterm purposes by the Company.
(c) The Company is not required to make and does not have Whistle Blower Policy. Accordingly, the requirement to report on clause 3(xi)(c) is not applicable to the Company.
(e) On an overall examination of the financial statements of the Company, the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures. Accordingly, the requirement to report on clause 3(ix)(e) of the Order is not applicable to the Company and hence not reported upon.
(xii) In our opinion and according to the information and explanations given to us, the company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable.
(f) The Company has not raised loans during the year on the pledge of securities held in its subsidiaries, joint ventures or associate companies. Hence, the requirement to report on clause (ix)(f) of the Order is not applicable to the Company and hence not reported upon
(xiii) According to the information and explanations given to us and based on our examination of the records of the company, the transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013 where applicable and the details of such transactions have been disclosed in the Financial Statements, as required by the applicable accounting standards.
(x) (a) The moneys raised by way of initial public offer or further public offer (including debt instruments) during the year were applied for the purposes for which those are raised,
(xiv) (a) The Company has an internal audit system commensurate with the size and nature of its business.
(b) The Company has not made any preferential allotment or private
(b) The internal audit reports of the Company issued till the date of the

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audit report, for the period under audit have been considered by us.

(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into noncash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.
(xvi) The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the requirement to report on clause 3(xvi) is not applicable to the Company.
(xvii) The Company has not incurred cash losses in the current year and in the immediately preceding financial year.
(xvii) There has been no resignation of the statutory auditors during the year and accordingly requirement to report on Clause 3(xviii) of the Order is not applicable to the Company.
(xix) On the basis of the financial ratios disclosed in No 26(xvii), to the standalone financial statements, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the standalone financial statements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as

on the date of the audit report that Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

(xx) (a) In respect of other than ongoing projects, there are no unspent amounts that are required to be transferred to a fund specified in Schedule VII of the Companies Act (the Act), in compliance with second proviso to sub section 5 of section 135 of the Act.

(b) There are no unspent amounts in respect of ongoing projects, that are required to be transferred to a special account in compliance of provision of sub section (6) of section 135 of Companies Act.

For PGS & Associates Chartered Accountants Firm Registration No.: 0122384W UDIN: 25111592BMMJFJ8535

Premal H Gandhi Partner Membership Number: 111592

Place: Mumbai Date: 15[th] May 2025

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ANNEXURE B TO THE INDEPPENDENT AUDITOR’S REPORT

(REFERRED TO IN PARAGRAPH 1 UNDER ‘REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS’ SECTION OF OUR REPORT OF EVEN DATE)

REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (I) OF SUB-SECTION 3 OF SECTION 143 OF THE COMPANIES ACT, 2013 (“THE ACT”)

Opinion

We have audited the internal financial controls over financial reporting of DIFFUSION ENGINEERS LIMITED (“the Company”) as of March 31, 2025 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2025, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors’ Responsibility

Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures

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of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial

control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

For PGS & Associates Chartered Accountants Firm Registration No.: 0122384W UDIN: 25111592BMMJFJ8535

Premal H Gandhi

Partner

Membership Number: 111592

Place: Mumbai Date: 15[th] May 2025

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Standalone Statement of Asset and Liabilites as at 31[st] March, 2025

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(All amounts in rupees Million, unless otherwise stated)
Note As at As at
Particulars
No. 31 [st] March, 2025 31 [st] March, 2024
ASSETS
(1) Non-current assets
(a) Property, plant and equipment 3 950.79 877.93
(b) Capital work-in-progress 3 (a) 31.44 11.05
(c) Intangible assets 4 4.83 4.25
(d) Financial assets
(i) Investments 5 360.36 295.38
(ii) Other financial assets 6 90.16 51.76
Total non-current assets 1,437.58 1,240.38
(2) Current Assets
(a) Inventories 7 621.85 474.02
(b) Financial Assets
(i) Trade receivables 8 863.52 646.80
(ii) Cash and cash equivalents 9 1,184.50 25.53
(iii) Other bank balances 10 - -
(iv) Loans and advances 11 112.53 154.43
(v) Others financial assets 12 8.61 10.25
(c) Other current assets 13 62.43 45.54
Total current assets 2,853.44 1,356.57
Total Assets 4,291.02 2,596.96
EQUITY AND LIABILITIES
Equity
(a) Equity share capital 14 374.26 280.21
(b) Other equity 15 3,176.15 1,502.98
Total equity 3,550.42 1,783.20
Liabilities
Non-current liabilities
(a) Financial liabilities
(i) Borrowings 16 - -
(ii) Other financial liabilities 17 4.73 4.72
(b) Deferred tax liabilities (net) 18 56.89 53.34
Total non-current liabilities 61.62 58.06
Current liabilities
(a) Financial liabilities
(i) Borrowings 19 216.30 337.08
(ii) Trade payables 20
Total outstanding dues of micro, small and medium enterprises 27.33 109.76
Total outstanding dues of creditors other than micro enterprises, 292.03 199.08
small and medium enterprises
(iii) Other financial liabilities 21 13.60 18.64
(b) Provisions 22 4.23 3.61
(c) Other current liabilities 23 113.53 81.65
(d) Current tax liabilities (net) 24 11.97 5.89
Total current liabilities 678.99 755.70
Total Equity and liabilities 4,291.02 2,596.96
The accompanying notes form an integral part of the 1-45
standalone financial statements
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As per our report of even date For PGS & Associates Chartered Accountants F.R.N. : 0122384W

For and on behalf of the Board of Directors of Diffusion Engineers Limited

PREMAL H GANDHI

Partner Membership Number: 111592 Place : Mumbai UDIN : 25111592BMMJFJ8535 Date : 15-05-2025

PRASHANT N. GARG

Chairman & Managing Director DIN :- 00049106 Place : Nagpur Date : 15-05-2025

NITIN N GARG

Director DIN :- 08558736 Place : Nagpur Date : 15-05-2025

RAMESH KUMAR NARASINGHBHAN Chief Executive Officer Place : Nagpur Date : 15-05-2025

ABHISHEK MEHTA Chief Financial Officer Place : Nagpur Date : 15-05-2025

CHANCHAL JAISWAL Company Secretary Place : Nagpur Date : 15-05-2025

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Standalone Statement of Profit & Loss

for the period ended 31[st] March, 2025

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(All amounts in rupees Million, unless otherwise stated)
Note Year ended Year ended
Particulars
No. 31 [st] March, 2025 31 [st] March, 2024
Revenue
I Revenue from operations 25 3,160.07 2,571.26
II Other income 26 90.79 71.94
III Total revenue (I+II) 3,250.86 2,643.19
IV Expenses
Cost of materials consumed 27 1,680.76 1,264.98
Purchases of stock-in-trade 130.67 185.55
Changes in inventories of fnished goods and work-in-progress 28 (87.90) (8.01)
Manufacturing expenses 29 428.37 333.40
Employee beneft expenses 30 399.15 345.51
Finance costs 31 21.95 16.94
Depreciation and amortization expenses 3 & 4 44.39 38.55
Other expenses 32 200.20 147.11
Total expenses (IV) 2,817.59 2,324.05
V Proft/(loss) before Exceptional Items and Tax (III-IV) 433.27 319.14
VI Exceptional Items 33 - 2.57
VII Proft/ (loss) before Tax(V-VI) 433.27 316.58
VIII Tax expenses
- Current tax 34 94.00 67.66
(Excess)/short provision of tax relating of previous years (1.81)
- Deferred tax 3.55 14.97
Total tax expenses 95.74 82.63
IX Net proft for the year (VII-VIII) 337.53 233.95
X Other comprehensive income
(A) (i) Items that will not be reclassifed subsequently to proft or loss
Remeasurements of the defned beneft plans (1.80) (1.99)
Income tax efect on above 0.41 0.45
(B) (ii) Items that will be reclassifed to proft or loss in subsequent periods
Gain / (Loss) on Items designated as Fair Value Through Other Comprehensive Income
Income tax efect on above
Other comprehensive income for the year, net of tax (X) (1.39) (1.54)
XI Total comprehensive income / (loss) for the period (IX+X) 336.14 232.42
XII Earnings per equity share 35
Earnings per equity share [nominal value of share ` 10/-]
Basic 9.02 8.35
Diluted 9.02 6.25
The accompanying notes form an integral part of the 1-45
standalone financial statements
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As per our report of even date For PGS & Associates Chartered Accountants F.R.N. : 0122384W

For and on behalf of the Board of Directors of Diffusion Engineers Limited

PREMAL H GANDHI Partner Membership Number: 111592 Place : Mumbai UDIN : 25111592BMMJFJ8535 Date : 15-05-2025

PRASHANT N. GARG

Chairman & Managing Director DIN :- 00049106 Place : Nagpur Date : 15-05-2025

NITIN N GARG Director DIN :- 08558736 Place : Nagpur Date : 15-05-2025

RAMESH KUMAR NARASINGHBHAN Chief Executive Officer Place : Nagpur Date : 15-05-2025

ABHISHEK MEHTA

Chief Financial Officer Place : Nagpur Date : 15-05-2025

CHANCHAL JAISWAL

Company Secretary Place : Nagpur Date : 15-05-2025

Annual Report 20 24 - 25 123

Innovative Superconditioning Solutions

Standalone Cash Flow Statement

for the year ended 31[st] March, 2025

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----- Start of picture text -----

(All amounts in rupees Million, unless otherwise stated)
For the year ended For the year ended
Particulars
31 [st] March, 2025 31 [st] March, 2024
A Cash flows from operating activities
Profit /(loss) before tax 433.27 316.58
Adjustments:
Depreciation and amortisation 44.39 38.55
Bad Debts & Write Off 8.50 8.42
Gain / (loss) on remeasurements of the defined employee benefit (1.39) (1.54)
plans
Net (gain)/loss on financial instruments at fair value through profit or 8.02 (29.34)
loss
Interest and Finance Charges 21.95 16.94
Interest Income (40.95) (4.00)
Loss / (Surplus) on Sale of Fixed Assets / Investments (Net) (36.61) (20.41)
Exceptional Item - 2.57
Operating cash flows before working capital changes and other assets 437.18 327.77
(Increase) / decrease in inventories (147.83) (1.53)
Decrease/ (increase) in Trade and Other Receivables (174.06) (13.25)
(Decrease) / increase in other current assets (16.86) 5.21
(Decrease) / increase in Trade and Other Payables 5.47 70.45
(Decrease) / increase in other current liabilities 31.87 (9.41)
(Decrease) / increase in other current provisions 0.63 2.05
Cash generated from operations 136.41 381.31
Income taxes refund / (paid), net (86.11) (65.62)
Net Cash Flow From/(Used In) Operating Activities (A) 50.30 315.68
B CASH FLOW FROM INVESTING ACTIVITIES
Purchase/ Sale of property, plant and equipment (117.25) (310.76)
Purchase/ sale of intangible assets (0.58) (1.70)
Purchase of CWIP (20.39) 7.22
Non Current investment (72.99) (53.70)
Interest Income 40.95 4.00
Advance for capital (46.02)
Profit/(loss) on sale of Investments 36.61 20.41
Net Cash Flow From/(Used In) Investing Activities (B) (179.67) (334.54)
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124

Corporate Overview / Statutory Reports

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Standalone Cash Flow Statement

for the year ended 31[st] March, 2025

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----- Start of picture text -----

(All amounts in rupees Million, unless otherwise stated)
For the year ended For the year ended
Particulars
31 [st] March, 2025 31 [st] March, 2024
C CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from long-term borrowings - (16.69)
Proceeds from short-term borrowings(Net) (120.78) (122.21)
Finance Cost paid (21.95) (16.94)
Dividend Paid (7.01) (18.22)
Proceeds from Issue 1,579.64 202.37
Issue Expenses (141.56) (2.57)
Net Cash Flow From/(Used In) Financing Activities (C) 1,288.35 25.74
Net increase / decrease in cash and cash equivalents 1,158.97 6.88
Cash and cash equivalents at the beginning of the period 25.53 18.65
Cash & Cash Equivalents at the End of the Period(A+B+C) 1,184.50 25.53
----- End of picture text -----

As per our report of even date For PGS & Associates Chartered Accountants F.R.N. : 0122384W

For and on behalf of the Board of Directors of Diffusion Engineers Limited

PREMAL H GANDHI Partner Membership Number: 111592 Place : Mumbai UDIN : 25111592BMMJFJ8535 Date : 15-05-2025

PRASHANT N. GARG

Chairman & Managing Director DIN :- 00049106 Place : Nagpur Date : 15-05-2025

NITIN N GARG Director DIN :- 08558736 Place : Nagpur Date : 15-05-2025

RAMESH KUMAR NARASINGHBHAN Chief Executive Officer Place : Nagpur Date : 15-05-2025

ABHISHEK MEHTA Chief Financial Officer Place : Nagpur Date : 15-05-2025

CHANCHAL JAISWAL

Company Secretary Place : Nagpur Date : 15-05-2025

Annual Report 20 24 - 25 125

Innovative Superconditioning Solutions

Notes forming part of the Standalone Financial Statements for the period ended March, 2025

1 CORPORATE INFORMATION:

We are engaged in the business of manufacturing welding consumables, wear plates and wear parts and heavy engineering machinery for core industries. The company was incorporated in 1982 and with over four decades of experience, our Company is dedicated to providing specialized repairs and reconditioning services for heavy machinery and equipment.Additionally, we are also involved in trading of anti-wear powders and welding and cutting machinery. We provide a super conditioning process at our manufacturing facilities, a surface treatment solution for machine components that enhances wear resistance, eliminates stress and improves their repairability ultimately extending their lifespan and reducing production costs. We have developed a synergistic system of forward integration whereby we manufacture special purpose electrodes and flux cored wires which are utilized for manufacturing wear resistance plates (commonly known as wear plates).

2 BASIS OF PREPARATION OF FINANCIAL STATEMENTS AND SIGNIFICANT ACCOUNTING POLICIES:

2.1 Basis of Preparation

These financial statements have been prepared in accordance with Indian Accounting Standards (‘Ind AS’) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of Companies Act, 2013, (the ‘Act’) and other relevant provisions of the Act

2.2 Basis of Measurement

These financial statements have been prepared in Indian Rupee which is the functional currency of the Company. These financial statements have been prepared on historical cost basis, except for certain financial instruments which are measured at fair value or amortised cost at the end of each reporting period, as explained in the accounting policies below.

2.3 Use of judgments, estimates and assumptions

In preparing these standalone financial statements, management has made judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, expenses and disclosures. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively.

2.4 Property, plant and equipment

Recognition and measurement

Freehold land is carried at historical cost. All other items of property, plant and equipment are measured

at cost of acquisition or construction less accumulated depreciation and accumulated impairment loss, if any.

The cost of an item of property, plant and equipment comprises its purchase price, including import duties and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use; any discounts and rebates are deducted in arriving at the purchase price.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Property, plant and equipment under construction are disclosed as capital work-in-progress. Advances paid towards the acquisition of property, plant and equipment outstanding at each reporting date are disclosed under “Other non-current assets”.

Subsequent costs

The cost of replacing a part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in the statement of profit and loss as incurred.

Disposal

An item of property, plant and equipment is derecognised upon disposal or when no future benefits are expected from its use or disposal. Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognised net within other income/expenses in the statement of profit and loss.

Depreciation

126

Corporate Overview / Statutory Reports

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Notes forming part of the Standalone Financial Statements for the period ended March, 2025

each part of an item of property, plant and equipment as prescribed in Schedule II of the Companies Act 2013 except in the cases mentioned below where the management based on the technical evaluation have estimated the life to be lower than the life prescribed in schedule II.

Depreciation is not recorded on capital work-inprogress until construction and installation are complete and the asset is ready for its intended use. Depreciation is also not recorded for Land.

2.5 Intangible assets

Recognition and measurement

Intangible assets are recognised when the asset is identifiable, is within the control of the Company, it is probable that the future economic benefits that are attributable to the asset will flow to the Company and cost of the asset can be reliably measured.

Intangible assets acquired by the Company that have finite useful lives are measured at cost less accumulated amortisation and accumulated impairment losses (if any).

Subsequent measurement

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates.

Amortisation

Amortisation is calculated over the cost of the asset, or other amount substituted for cost, less its residual value. Amortisation is recognised in statement of profit and loss on a straight-line basis over the estimated useful lives of intangible assets from the date that they are available for use, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset.

Amortisation is not recorded on intangible assets under development until development is complete and the asset is ready for its intended use.

The intangible asset are amortised over the estimated useful lives as given below: -

Computer Software : 3 years

2.6 Inventories

Raw materials and traded goods are valued at lower of cost or net realizable value. The costs of these items of inventory comprises of cost of purchase and other incidental costs incurred to bring the inventories to their present location and condition. However, raw materials are written down below cost only when the finished product to which they belong are written down below cost and the replacement cost of that raw material is lower than cost. Cost of raw materials and traded goods are determined on “Weighted Average” /”FIFO” basis.

Work-in-process and Finished goods are valued at lower of cost or net realizable value. The cost includes direct materials, labour, other direct costs and related production overheads based on normal operating capacity. Cost is determined on “Weighted Average” /”FIFO” basis.

2.7 Foreign currencies transactions

Transactions and balances

In preparing the financial statements of each individual Company entity, transactions in currencies other than the entity’s functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences on monetary items are recognised in profit or loss in the period in which they arise.

2.8 Borrowing costs

Borrowing costs are interest and other costs that an entity incurs in connection with the borrowing of funds.

Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalized in the cost of that asset. Qualifying assets are those assets which necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are recognised in the year in which they are incurred.

2.9 Current and Non-Current Classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification.

All assets and liabilities are classified into current and non-current.

An asset is treated as current when it is:

It is expected to be realised in or is intended for sale or consumption in the Company’s normal operating cycle;

Held primarily for the purpose of trading;

It is expected to be realised within 12 months after the reporting date; or

It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.

127

Annual Report 20 24 - 25

Innovative Superconditioning Solutions

Notes forming part of the Standalone Financial Statements for the period ended March, 2025

Current assets include the current portion of noncurrent financial assets. All other assets are classified as non-current.

A liability is current when:

It is expected to be settled in the Company’s normal operating cycle;

It is held primarily for the purpose of being traded;

It is due to be settled within 12 months after the reporting date; or

The company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Current liabilities include current portion of noncurrent financial liabilities. All other liabilities are classified as non-current.

Operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents.

2.10 Investment

Current investments are carried at lower of cost and fair value. Non-current investments except quoted investments are stated at cost. Provision for diminution in the value of long term investment is made only if such a decline is other than temporary.

Investments in subsidiaries and associates

The Company has elected to recognise its investments in subsidiary and associate companies at cost in accordance with the option available in Ind AS 27, Separate Financial Statements.

2.11 Employee benefits

Short-term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid e.g., under shortterm cash bonus, if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the amount of obligation can be estimated reliably.

Defined Benefit Plans

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Company’s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that

employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognised asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan (‘the asset ceiling’). In order to calculate the present value of economic benefits, consideration is given to any minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised in OCI. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service (‘past service cost’ or ‘past service gain’) or the gain or loss on curtailment is recognised immediately in profit or loss. The Company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.

Other long-term employee benefits

The Company’s net obligation in respect of longterm employee benefits other than post-employment benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of any related assets is deducted. The obligation is measured on the basis of an annual independent actuarial valuation using the projected unit credit method. Remeasurements gains or losses are recognised in profit or loss in the period in which they arise.

Termination benefits are expensed at the earlier of when the Company can no longer withdraw the offer of those benefits and when the Company recognises costs for a restructuring.

128

Corporate Overview / Statutory Reports

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Notes forming part of the Standalone Financial Statements for the period ended March, 2025

Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. The Company makes specified monthly contributions towards government administered provident fund scheme. Obligations for contributions to defined contribution plans are recognised as an employee benefit expense in profit or loss in the periods during which the related services are rendered by employees.

Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

2.12 Lease

The Company, as a lessee, recognises a right-of-use asset and a lease liability for its leasing arrangements, if the contract conveys the right to control the use of an identified asset.

The contract conveys the right to control the use of an identified asset, if it involves the use of an identified asset and the Company has substantially all of the economic benefits from use of the asset and has right to direct the use of the identified asset. The cost of the right-of-use asset shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs incurred. The right-of-use assets is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability. The right-ofuse assets is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset.

The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. The lease payments are discounted using the interest rate implicit in the lease if that rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate.

For short-term and low value leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the lease term.

2.13 Income tax

Income tax expense comprises current tax and deferred tax. Income tax expenses are recognised in statement of profit or loss except to the extent that it relates to items recognized in other comprehensive income (OCI).

Current tax

Current tax is the tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of the previous year. It is measured using tax rates (and tax laws) enacted or substantially enacted by the reporting date.

Current tax assets/liabilities are offset only if there is a legally enforceable right to set off the recognised amounts, and it is intended to realise the asset and settle the liability on a net basis.

Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes.

Deferred tax assets (if any) are recognised only to the extent that it is probable that future taxable profits will be available against which they can be used. Deferred tax assets/liabilities are reviewed at each balance sheet date and are recognised/ reduced to the extent that it is probable / no longer probable respectively that the related tax benefit will be realised.

Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on the laws that have been enacted or substantively enacted by the reporting date.

2.14 Provisions

A Provision is recognised when the Company has a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

2.15 Contingent Liabilities

Contingent liability is disclosed for (i) Possible obligation which will be confirmed only by the future events not wholly within the control of the company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be

Annual Report 20 24 - 25 129

Innovative Superconditioning Solutions

Notes forming part of the Standalone Financial Statements for the period ended March, 2025

required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

Contingent Assets

Contingent assets are not recognised in the financial statements. A contingent asset is disclosed where an inflow of economic benefits is probable. Contingent assets are assessed continually and , if it is virtually certain that an inflow of economic benefits will arise, the asset and related income are recognised in the period in which the change occurs.

2.16 Financial Instruments:

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

(a) Financial assets

Financial assets include cash and cash equivalents, trade and other receivables, investments in securities and other eligible current and non-current assets.

At initial recognition, all financial assets are measured at fair value. Such financial assets are subsequently classified under one of the following three categories according to the purpose for which they are held. The classification is reviewed at the end of each reporting period.

Financial assets at amortised cost: At the date of initial recognition, are held to collect contractual cash flows of principal and interest on principal amount outstanding on specified dates. These financial assets are intended to be held until maturity. Therefore, they are subsequently measured at amortised cost by applying the Effective Interest Rate (EIR) method to the gross carrying amount of the financial asset. The EIR amortisation is included as interest income in the profit or loss. The losses arising from impairment are recognised in the profit or loss.

Financial assets at fair value through other comprehensive income: At the date of initial recognition, are held to collect contractual cash flows of principal and interest on principal amount outstanding on specified dates, as well as held for selling. Therefore, they are subsequently measured at each reporting date at fair value, with all fair value movements recognised in Other Comprehensive Income (OCI). Interest income calculated using the Effective Interest Rate (EIR) method, impairment gain or loss and foreign exchange gain or loss are recognised in the Statement of Profit and Loss. On derecognition

of the asset, cumulative gain or loss previously recognised in Other Comprehensive Income is reclassified from the OCI to Statement of Profit and Loss.

Financial assets at fair value through profit or loss: At the date of initial recognition, financial assets are held for trading, or which are measured neither at Amortised Cost nor at Fair Value through OCI. Therefore, they are subsequently measured at each reporting date at fair value, with all fair value movements recognised in the Statement of Profit and Loss.

Investment in Equity shares of subsidiaries and associates are valued at cost.

The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109.

The company assesses impairment based on the expected credit losses (ECL) model to all its financial assets measured at amortised cost.

(b) Financial liabilities

Financial liabilities include long-term and shortterm loans and borrowings, trade and other payables and other eligible current and noncurrent liabilities.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and other payables, net of directly attributable transaction costs. After initial recognition, financial liabilities are classified under one of the following two categories:

Financial liabilities at amortised cost: After initial recognition, such financial liabilities are subsequently measured at amortised cost by applying the Effective Interest Rate (EIR) method to the gross carrying amount of the financial liability. The EIR amortisation is included in finance expense in the profit or loss.

Financial liabilities at fair value through profit or loss: which are designated as such on initial recognition, or which are held for trading. Fair value gains / losses attributable to changes in own credit risk is recognised in OCI. These gains / losses are not subsequently transferred to Statement of Profit and Loss. All other changes in fair value of such liabilities are recognised in the Statement of Profit and Loss.

130

Corporate Overview / Statutory Reports

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Notes forming part of the Standalone Financial Statements for the period ended March, 2025

The Company derecognises a financial liability when the obligation specified in the contract is discharged, cancelled or expires.

2.17 Revenue Recognition

Revenue from contracts with customer

Revenue from contract with customers is recognised when the Company satisfies performance obligation by transferring promised goods and services to the customer. Performance obligations are satisfied at the point of time when the customer obtains controls of the asset. Revenue is measured based on transaction price, which is the fair value of the consideration received or receivable, stated net of discounts, returns and goods & service tax. Transaction price is recognised based on the price specified in the contract, net of the estimated sales incentives/ discounts if any.

Rental income

Rental income from investment property is recognised as part of revenue from operations in profit or loss on a straight-line basis over the term of the lease.

Dividend and interest income

Dividend income from investments is recognised when the shareholder’s right to receive payment has been established (provided that it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably).

Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount on initial recognition.

Receipts from insurance claims are accounted after the same is approved by the insurance company.

2.18 Earnings per share

Basic earnings per share are calculated by dividing the profit for the period attributable to equity shareholders

by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

2.19 Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM) of the Company. The CODM is responsible for allocating resources and assessing performance of the operating segments of the Company.

As a result of the Management review mechanism, the Company has one segment “Welding Fabrication Technology and Engineering” which includes Manufacturing, Trading and Job Work.since Company has only one Segment separate disclosure not given

2.20 Cash and Cash Equivalents

Cash and cash equivalents in the balance sheet comprise cash at banks, cash on hand and highly liquid short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

2.21 Statement of Cash Flows

Statement of Cash flows is reported using the indirect method, whereby profit for the year is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

2.22 Operating Cycle

Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current

131

Annual Report 20 24 - 25

Innovative Superconditioning Solutions

Notes forming part of the Standalone Financial Statements for the period ended March, 2025

(All amounts in rupees Million, unless otherwise stated)

NOTE 3 PROPERTY, PLANT AND EQUIPMENT

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Furniture Capital work
Land Plant and Office
Particulars Buildings and Vehicles Total in progress
Freehold Equipment equipment [ Computers ]
Fixtures (CWIP)
As at 31 March 2023 84.75 238.08 307.35 10.80 26.19 5.48 4.16 676.81 18.27
Additions 229.41 7.99 63.84 2.57 3.83 0.94 2.04 310.62 11.66
Sales/Disposals/ - - - - 0.35 - 0.41 0.76 18.88
Adjustments
As at 31 March 2024 314.17 246.07 371.18 13.37 29.66 6.42 5.80 986.67 11.05
Additions 23.96 6.51 76.55 2.16 6.77 2.50 2.06 120.51 20.38
Sales/Disposals/ - - 6.36 - 1.01 - 0.08 7.45 -
Adjustments
As at 31 March 2025 338.12 252.59 441.37 15.53 35.42 8.92 7.78 1,099.74 31.44
Accumulated depreciation
As at 31 March 2023 - 15.14 46.48 2.03 4.35 1.72 1.38 71.09 -
Depreciation for the year - 7.63 23.85 1.25 3.31 0.73 1.21 37.97 -
Sales/Disposals/ - - - - - - 0.32 0.32 -
Adjustments
As at 31 March 2024 - 22.77 70.32 3.28 7.66 2.45 2.27 108.74 11.05
Depreciation for the year 7.73 27.33 1.94 3.45 1.49 1.63 43.57 -
Sales/Disposals/ - - 2.92 - 0.40 - 0.04 3.36 -
Adjustments
As at 31 March 2025 - 30.50 94.73 5.22 10.70 3.93 3.86 148.94 -
Net block
As at 31 March 2024 314.17 223.30 300.86 10.09 22.01 3.98 3.53 877.93 11.05
As at 31 March 2025 338.12 222.09 346.64 10.31 24.72 4.99 3.92 950.79 31.44
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Accumulated
Particulars Cost Net Block
Depreciation
Land Freehold 338.12 - 338.12
Buildings 252.59 30.50 222.09
Plant and Equipment 441.37 94.73 346.64
Furniture and Fixtures 15.53 5.22 10.31
Vehicles 35.42 10.70 24.72
Office equipment 8.92 3.93 4.99
Computers 7.78 3.86 3.92
Total 1,099.74 148.94 950.79
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NOTE 3A CAPITAL WORK-IN-PROGRESS

Particulars	As at 31st March, 2025	As at 31st March, 2024
Carryingamount at end ofyear	31.44	11.05

Ageing of Capital work-in-progress

Particulars	As at 31st March, 2025	As at 31st March, 2024
Less than 1year	20.38	11.05
1-2years	11.05
2-3years
More than 3years
Total	31.44	11.05

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Notes forming part of the Standalone Financial Statements for the period ended March, 2025

(All amounts in rupees Million, unless otherwise stated)

NOTE 4 INTANGIBLE ASSETS

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Technical
Software Total
Know-how
As at 31 March 2023 0.13 3.45 3.58
Additions during the period 2.28 2.28
Disposals / Adjustments during the year -
As at 31 March 2024 0.13 5.73 5.86
Additions during the period 1.40 1.40
Disposals / Adjustments during the year
As at 31 March 2024 0.13 7.13 7.26
Accumulated amortisation:
As at 31 March 2023 - 1.03 1.03
Charge for the year 0.58 0.58
Disposals / Adjustments during the year -
As at 31 March 2024 1.61 1.61
Charge for the year - 0.82 0.82
Disposals / Adjustments during the year
As at 31 March 2025 2.43 2.43
Carrying amount (net)
As at 31 March 2024 0.13 4.12 4.25
As at 31 March 2025 0.13 4.70 4.83
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NOTE 5 INVESTMENTS (NON-CURRENT ASSETS)

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As at As at
Particulars
31 [st] March, 2025 31 [st] March, 2024
Equity instruments
(i) 'Investment carried at cost (Unquoted)
(a) '- in subsidiaries
3,760 equity shares (Previous years : 3,760 equity shares) of 10 each of 3.30 3.30 Diffusion Super-Conditioning Services Pvt. Ltd. 95,000 equity shares (Previous years : 95,000 equity shares) of 10 each of 0.95 0.95
Diffusion Hernon Adhesive And Sealant Pvt. Ltd.
6,85,510 equity shares (Previous years : 6,85,510 equity shares) of ` 10 each 6.67 6.67
of Newelco Industries Pvt Ltd
2,50,217 equity shares (Previous years : 2,50,217 equity shares) of Diffusion 15.44 15.44
Engineers Singapore Pte. Ltd.
1750 equity shares (Previous years : 0 equity shares) of Diffusion Euresia 4.39 -
(b) '- in associate company
LSN Diffusion Ltd (Fully Paid Equity Shares) - 7,54,450 (March 31, 2022 - 67.47 67.46
7,54,450 shares,April 01, 2021)
98.22 93.82
(ii) 'Investment carried at fair value through profit or loss
Quoted
(a) Investment in Equity
- In Equity Shares 23.96 0.51
(b) Investment in mutual funds
'- Mutual funds 238.18 201.05
262.14 201.56
Total (i+ii) 360.36 295.38
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Annual Report 20 24 - 25 133

Innovative Superconditioning Solutions

Notes forming part of the Standalone Financial Statements for the period ended March, 2025

(All amounts in rupees Million, unless otherwise stated)

Particulars	As at 31st March, 2025	As at 31st March, 2024
(a) Investments inquoted instruments:
Aggregate carryingvalue	225.43	156.83
Aggregate market value	262.14	201.56

NOTE 6 OTHER NON-CURRENT FINANCIAL ASSETS

Particulars	As at 31st March, 2025	As at 31st March, 2024
Securitydeposit	-	4.23
Fixed deposit with Bank	90.16	47.53
Total	90.16	51.76

NOTE 7 INVENTORIES

(Valued at cost, unless otherwise stated)

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As at As at
Particulars
31 [st] March, 2025 31 [st] March, 2024
Consumables, Stores and Spare parts
(At lower of cost and net realisable value)
Stock in trade
Raw Materials 264.64 206.39
Work in Progress 180.96 111.51
Finished goods & Traded Goods 158.11 138.78
603.71 456.68
Stock - In - Transit
Raw Materials 17.92 15.15
Consumables,Stores and Spare parts 0.22 0.89
Traded Goods - 1.30
18.14 17.34
Total 621.85 474.02
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NOTE 8 TRADE RECEIVABLES

(Unsecured / secured, considered good unless otherwise stated)

Particulars	As at 31st March, 2025	As at 31st March, 2024
Secured, consideredgood
Unsecured, consideredgood*	867.86	649.37
Less: Allowance for expected credit loss	4.34	2.57
Total	863.52	646.80
Receivables from relatedparties (Refer Note 37)	132.88	82.11
Receivables from others	730.64	564.69
	863.52	646.80

* There are some cases pending before Hon’ble NCLT court against some parties amounting to ` 4.24 million. The company will provide necessary treatment in the books as per the directions of Hon’ble NCLT Court.

134

Corporate Overview / Statutory Reports

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Notes forming part of the Standalone Financial Statements

for the period ended March, 2025

(All amounts in rupees Million, unless otherwise stated)

Trade Receivables ageing schedule as at 31[st] March, 2025

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Outstanding for following periods from due date of payment
Particulars Less than 6 months More than
1-2 years 2-3 years Total
6 months -1 year 3 years
(i) Undisputed Trade receivables - 773.13 50.40 23.68 5.79 10.63 863.62
considered good
(ii) Undisputed Trade receivables - -
considered doubtful
(iii) Disputed trade receivables -
considered good
(iv) Disputed trade receivables - - - - 4.24 4.24
considered doubtful
Total 773.13 50.40 23.68 5.79 14.87 867.86
Expected Credit Loss 4.34
Net 863.52
Trade Receivables ageing schedule as at 31 [st] March, 2024
Outstanding for following periods from due date of payment
Particulars Less than 6 months More than
1-2 years 2-3 years Total
6 months -1 year 3 years
(i) Undisputed Trade receivables - 544.82 48.27 28.87 9.39 13.22 644.57
considered good
(ii) Undisputed Trade receivables - - - - - - -
considered doubtful
(iii) Disputed trade receivables - - - - - -
considered good
(iv) Disputed trade receivables - - - - 4.80 4.80
considered doubtful
Total 544.82 48.27 28.87 9.39 18.02 649.37
Expected Credit Loss 2.57
Net 646.80
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NOTE 9 CASH AND BANK BALANCES

Particulars	As at 31st March, 2025	As at 31st March, 2024
Cash and Cash Equivalents
Cash on hand	1.21	0.55
Balance with scheduled banks
in current accounts	91.94	6.41
Fixed deposit with current maturity	1,025.06	18.58
Cheque in Hand	66.29	-
	1,184.50	25.53

Annual Report 20 24 - 25 135

Innovative Superconditioning Solutions

Notes forming part of the Standalone Financial Statements for the period ended March, 2025

(All amounts in rupees Million, unless otherwise stated)

NOTE 10 OTHER BANK BALANCES

Particulars	As at 31st March, 2025	As at 31st March, 2024
Dividend accounts	-	-
Total	-	-

NOTE 11 LOANS AND ADVANCES

Particulars	As at 31st March, 2025	As at 31st March, 2024
Loan and advances to employees	9.22	4.31
Advance to others	57.29	150.12
Advance for capex	46.02	-
Total	112.53	154.43

NOTE 12 OTHERS FINANCIAL ASSETS

Particulars	As at 31st March, 2025	As at 31st March, 2024
Deposits recoverable	8.61	10.25
Total	8.61	10.25

NOTE 13 OTHER CURRENT ASSETS

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As at As at
Particulars
31 [st] March, 2025 31 [st] March, 2024
Prepaid expenses 4.66 0.33
Balances with government authorities
Security Deposits 11.88 10.09
GST receivable 8.14 3.81
Export and other incentives receivable 31.93 29.04
Custom duty paid 2.94 -
Vat and sales tax 0.32 0.32
Balances with others
Net surplus/(shortfall) in defined benefit plan- gratuity fund (2.31) 1.57
Other recoverable 4.87 0.39
Total 62.43 45.54
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NOTE 14 AUTHORISED, ISSUED, SUBSCRIBED AND PAID-UP SHARE CAPITAL

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As at As at
Particulars
31 [st] March, 2025 31 [st] March, 2024
Authorised share capital
Equity share capital
4,00,00,000 (Previous Years 50,00,000) equity shares of 10 each 400.00 400.00 400.00 400.00 Issued, subscribed and paid-up share capital Equity share capital 3,74,26,259 (Previous Years 280,21,259 ) Equity shares of 10/- each fully paid up 374.26 280.21
374.26 280.21
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136

Corporate Overview / Statutory Reports

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Notes forming part of the Standalone Financial Statements for the period ended March, 2025

(All amounts in rupees Million, unless otherwise stated)

Rights, preferences and restrictions attached to the equity shares

The Company has issued only one class of equity shares having a face value of ₹ 10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by board of directors is subject to the approval of shareholders in the ensuing Annual General Meeting. In the event of liquidation of the company, the holder of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the share holders.

Details of shares held by each shareholder holding more than 5%

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As at As at
Name of Shareholders 31 [st] March, 2025 31 [st] March, 2024
% held Nos % held Nos
Equity shares with voting rights
NK Garg (HUF) 5.57% 20,85,279 7.44% 20,85,279
Mr Prashant Garg 27.73% 1,03,79,551 37.04% 1,03,79,551
Dr Nitin Garg 18.37% 68,76,254 24.54% 68,76,254
Mrs Chitra Garg 16.38% 61,30,971 21.88% 61,30,971
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Reconciliation of shares outstanding at the beginning and at the end of the reporting year

	As at 31st March, 2025	As at 31st March, 2024
Equity shares
Outstanding at the beginning of the year	2,80,21,259	37,37,467
Add:Shares issued during the year	94,05,000	2,42,83,792
Outstanding at the end of the year	3,74,26,259	2,80,21,259

Number of shares held by promoters and promotor group:

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As at As at
Name of Shareholders 31 [st] March, 2025 31 [st] March, 2024
% held Nos % held Nos
Mr Prashant Garg 27.73% 1,03,79,551 37.04% 1,03,79,551
Dr Nitin Garg 18.37% 68,76,254 24.54% 68,76,254
Mrs Chitra Garg 16.38% 61,30,971 21.88% 61,30,971
Nitin and Renuka Garg 1.41% 5,26,967 1.88% 5,26,967
Prashant and Neelu Garg 0.18% 65,548 0.23% 65,548
NK Garg (HUF) 5.57% 20,85,279 7.44% 20,85,279
Neelu Prashant Garg 0.06% 22,400 0.08% 22,400
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Annual Report 20 24 - 25 137

Innovative Superconditioning Solutions

Notes forming part of the Standalone Financial Statements for the period ended March, 2025

(All amounts in rupees Million, unless otherwise stated)

NOTE 15 STANDALONE STATEMENT OF CHANGE IN EQUITY FOR THE PERIOD ENDED 31[ST] MARCH, 2025 A EQUITY SHARE CAPITAL

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No. of Shares Amount
Balance as at March 31, 2023 37,37,467 37.37
Add: Issue during the year 2,42,83,792 242.84
Balance as at March 31, 2024 2,80,21,259 280.21
Add: Issue during the year 94,05,000 94.05
Balance as at March 31, 2025 3,74,26,259 374.26
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B OTHER EQUITY

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Capital
Retained Securities Capital General
Particulars Redemption Total
Earnings Premium Reserve Reserve
Reserve
Balance as at 31 March 2023 1,155.70 29.37 4.72 17.42 122.05 1,329.26
Profit for the year 232.42 - - - 232.42
Interim dividend (7.01) - (7.01)
Final Dividend 2022-2023 (11.21) (11.21)
Issue of share 199.71 199.71
Utilised against Bonus shares (229.07) (4.72) (6.39) (240.18)
Balance as at 31 March 2024 1,369.90 0.00 0.00 17.42 115.66 1,502.98
Profit for the year 336.14 336.14
Final Dividend 2023-2024 (7.01) (7.01)
Issue of share 1,485.59 1,485.59
Utilised against Share issue Expenses (141.56) (141.56)
Balance as at 31 March 2025 1,699.03 1,344.04 0.00 17.42 115.66 3,176.15
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Description of Reserves

Retained earnings

Retained earnings represents surplus/accumulated earnings of the Company and are available for distribution to shareholders.

Securities premium

Securities premium is used to record the premium received on issue of shares.Issue Expenditure related to IPO has been adjusted against the Securities Premium . It is utilised in accordance with the provisions of the Companies Act, 2013.

Issue of Shares

The equity shares of the Company have been listed on National Stock Exchange of India Limited (“NSE”) and on BSE Limited (“BSE”) on October 4, 2024 by completing Initial Public Offer (‘’the IPO”) of 93,55,000 equity shares of face value of 10/-each at an issue price of 168/-per equity share (including share premium of 158/-per equity share) aggregating to 1,571.64 million and 50,000 equity shares to employees of face value of 10 each and an issue price of 160/- per equity shares (including share premium of 150/- per equity share) aggregating to 8 million. Total amount aggregating to 1,579.64 million. 750.07 million was received from Anchor investors on 25[th] September 2024 and subsequently allotment was done on 1[st] October 2024.

138

Corporate Overview / Statutory Reports

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Notes forming part of the Standalone Financial Statements

for the period ended March, 2025

(All amounts in rupees Million, unless otherwise stated)

Capital Redemption Reserve

In FY 2001-02 company completed the Buy-Back of 4,72,150 equity shares of 10/- each at a Premium of 25.62 per share. The total consideration paid was 1,68, 17,981/- out of which the Premium of 1,20,96,481/- was paid by utlising the share premium account. The company has also transferred ` 47,21,500/- to the capital redemption reserve account from General Reserve as a consequent to the Buy-Back of shares.

Capital Reserve

The company started creating the capital reserve for receipt of state subsidy from the year 1992-93.

General reserves

General Reserve represents appropriation of retained earnings and are available for distribution to shareholders

As per our report of even date For PGS & Associates Chartered Accountants F.R.N. : 0122384W

For and on behalf of the Board of Directors of Diffusion Engineers Limited

PREMAL H GANDHI Partner Membership Number: 111592 Place : Mumbai UDIN : 25111592BMMJFJ8535 Date : 15-05-2025

PRASHANT N. GARG Chairman & Managing Director DIN :- 00049106 Place : Nagpur Date : 15-05-2025

NITIN N GARG Director DIN :- 08558736 Place : Nagpur Date : 15-05-2025

RAMESH KUMAR NARASINGHBHAN Chief Executive Officer Place : Nagpur Date : 15-05-2025

ABHISHEK MEHTA Chief Financial Officer Place : Nagpur Date : 15-05-2025

CHANCHAL JAISWAL

Company Secretary Place : Nagpur Date : 15-05-2025

Annual Report 20 24 - 25 139

Innovative Superconditioning Solutions

Notes forming part of the Standalone Financial Statements for the period ended March, 2025

(All amounts in rupees Million, unless otherwise stated)

NOTE 16 BORROWINGS

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As at As at
Particulars
31 [st] March, 2025 31 [st] March, 2024
Secured
Term Loan - -
Total - -
NOTE 17 OTHER NON-CURRENT FINANCIAL LIABILITIES
As at As at
Particulars
31 [st] March, 2025 31 [st] March, 2024
Vehicle and laptop Scheme 4.73 4.72
Total 4.73 4.72
NOTE 18 DEFERRED TAX LIABILITIES (NET)
As at As at
Particulars
31 [st] March, 2025 31 [st] March, 2024
Deferred Tax Liability:
Timing Difference on account of Carrying amount of Property, plant and equipment 56.89 53.34
and Intangible assets in the Financial Statements and the Income Tax Return
Deferred Tax Assets:
Expense allowable for tax purpose when paid (Section 43B items)
Total 56.89 53.34
NOTE 19 BORROWINGS
As at As at
Particulars
31 [st] March, 2025 31 [st] March, 2024
Unsecured
Loan From Banks 216.30 337.08
Total 216.30 337.08
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Note 19.1

a Interest rate of the above loan in range between 8.5% to 9.25%.

b Borrowings from banks are secured by way of :-

Secured against Mortgage of Land & Building, book debts & hypothication of Stock.

NOTE 20 TRADE PAYABLES

Particulars	As at 31st March, 2025	As at 31st March, 2024
total outstandingdues of micro and small and medium enterprises	27.33	109.76
total outstanding dues of creditors other than micro and small and medium enterprises	292.03	199.08
	319.35	308.83

Note on MSME Discolsure

Outstanding to Small ,Micro and Medium Enterprise March 25 : 27.33 March 24 : 109.76 Million. The identification of suppliers under “Micro, Small and Medium Enterprises Development Act, 2006” was done on the basis of the information to the extent provided by the suppliers to the Company. Total outstanding dues of Micro, Small and Medium Enterprises, which were outstanding for more than the stipulated period, are given below:

Particulars	As at 31st March, 2025	As at 31st March, 2024
Principal amount due and remainingunpaid	27.33	109.76
Interestpaid
Interest due
Interest accrued and due
Interest due and remainingunpaid
	27.33	109.76

140

Corporate Overview / Statutory Reports

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Notes forming part of the Standalone Financial Statements for the period ended March, 2025

(All amounts in rupees Million, unless otherwise stated)

Trade Payables ageing schedule: As at 31[st] March, 2025

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Outstanding for following periods from due date of payment
Particulars
Not due < 1 Year 1-2 years 2-3 years > 3 years Total
(I) MSME 26.13 - - - - 26.13
(ii) Others 125.73 149.99 3.21 4.66 8.44 292.03
(iii) Disputed dues- MSME - 0.21 0.30 0.63 0.06 1.20
(iv) Disputed dues - Others - - - - - -
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Trade Payables ageing schedule: As at 31[st] March, 2024

Particulars	Outstanding for following periods from due date ofpayment	Outstanding for following periods from due date ofpayment	Outstanding for following periods from due date ofpayment	Outstanding for following periods from due date ofpayment	Outstanding for following periods from due date ofpayment	Outstanding for following periods from due date ofpayment
	Not due	< 1 Year	1-2years	2-3years	> 3years	Total
(I) MSME	59.68	49.01	-	-	-	108.69
(ii) Others	-	186.25	3.39	2.05	7.39	199.08
(iii) Disputed dues- MSME	-	-	0.60	0.22	0.25	1.07
(iv) Disputed dues - Others	-	-	-	-	-	-

NOTE 21 OTHER FINANCIAL LIABILITIES

Particulars	As at 31st March, 2025	As at 31st March, 2024
Deposits from distributors	5.30	5.27
Liabilities For Expences	8.30	8.48
Interim Dividend Payable 23-24	-	4.89
Total	13.60	18.64

NOTE 22 PROVISIONS

Particulars	As at 31st March, 2025	As at 31st March, 2024
Leave Encashment	4.23	3.61
Total	4.23	3.61

NOTE 23 OTHER CURRENT LIABILITIES

Particulars	As at 31st March, 2025	As at 31st March, 2024
StatutoryRemittances	48.22	23.06
Advance Received from customers	14.06	29.24
Mobile Scheme	0.01	0.01
Other Credit Balances	51.24	29.34
Total	113.53	81.65

NOTE 24 CURRENT TAX LIABILITIES (NET)

Particulars	As at 31st March, 2025	As at 31st March, 2024
Provission for Tax- Net of Advance Tax	11.97	5.89
Total	11.97	5.89

Annual Report 20 24 - 25 141

Innovative Superconditioning Solutions

Notes forming part of the Standalone Financial Statements

for the period ended March, 2025

(All amounts in rupees Million, unless otherwise stated)

NOTE 25 REVENUE FROM OPREATION

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As at As at
Particulars
31 [st] March, 2025 31 [st] March, 2024
Sale of Products and Services
- Manufacturing 2,437.35 1,900.96
- Trading 161.17 207.39
- Export Sales 280.84 260.77
2,879.36 2,369.13
Job work receipt
- Local 247.19 176.00
- Export 13.02 2.72
260.21 178.72
Other Operating Revenues
Insurance, Licenses & Packing on Sales 16.39 19.78
Duty Drawback 4.11 3.63
20.50 23.41
Total 3,160.07 2,571.26
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Disclosure in accordance with Ind AS - 115 “Revenue Recognition Disclosures”, of the Companies (Indian Accounting Standards) Rules, 2015

Revenue disaggregation is as follows

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As at As at
31 [st] March, 2025 31 [st] March, 2024
Disaggregation of goods
Manufactured Products 2,718.19 2,161.73
Trading Products 161.17 207.39
Job Works 260.21 178.72
Others 20.50 23.41
3,160.08 2,571.26
Disaggregation based on geography
India 2,866.21 2,307.76
Outside India 293.86 263.49
3,160.07 2,571.26
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Geographical location is based on the location of customers excluding export incentives Information about major customers

Customer Type	As at 31st March, 2025	As at 31st March, 2024
Customers under Government Projects	245.29	184.25
Industrial Customers	2,620.92	2,123.52
Export Customers	293.86	263.49
Total	3,160.07	2,571.26

142

Corporate Overview / Statutory Reports

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Notes forming part of the Standalone Financial Statements for the period ended March, 2025

(All amounts in rupees Million, unless otherwise stated)

NOTE 26 OTHER INCOME

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As at As at
Particulars
31 [st] March, 2025 31 [st] March, 2024
Interest income
- on Deposit 40.95 4.00
- Unwinding of discount on security deposits and others - 0.20
Foreign exchange gain (net) 6.44 1.96
Profit on sale of assets and investment 36.61 20.41
Net gain/(loss) on financial instruments at fair value through profit or loss (8.02) 29.34
Rent income 0.18 0.17
Insurance claim receipt 0.40 2.68
Export incentive 0.80 2.59
Miscellaneous income 0.05 0.08
Dividend income 1.61 0.31
PSI subsidy 11.76 10.19
Total 90.79 71.94
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NOTE 27 COST OF MATERIALS CONSUMED

Particulars	As at 31st March, 2025	As at 31st March, 2024
As at beginning of the period	206.38	211.71
Add: Purchases	1,739.02	1,259.66
Less : As at end of the period	264.64	206.39
Total	1,680.76	1,264.98

NOTE 28 CHANGES IN INVENTORIES OF FINISHED GOODS AND WORK-IN-PROGRESS

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As at As at
Particulars
31 [st] March, 2025 31 [st] March, 2024
Inventories at the beginning of the year:
Stock-in-trade 87.18 55.57
Finished goods 57.87 52.61
Work-in-progress 111.51 140.37
256.56 248.55
Inventories at the end of the year:
Stock-in-trade 90.87 87.18
Finished goods 72.63 57.87
Work-in-progress 180.96 111.51
344.46 256.56
Total (87.90) (8.01)
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Annual Report 20 24 - 25 143

Innovative Superconditioning Solutions

Notes forming part of the Standalone Financial Statements for the period ended March, 2025

(All amounts in rupees Million, unless otherwise stated)

NOTE 29 MANUFACTURING EXPENSES

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As at As at
Particulars
31 [st] March, 2025 31 [st] March, 2024
Consumable, stores and spare parts material Consumed
Inventories at the beginning of the year: 11.07 12.22
Add:- Purchases for the year 74.96 57.72
Inventories at the end of the year: 12.75 11.07
73.28 58.87
Custom duties expenses 31.65 10.50
Job work charges 177.36 144.53
Labour charges 41.78 34.69
Carriage inward and clearing charges 30.91 18.89
Power and fuel 65.06 57.65
Lease rental 7.94 7.93
Water charges 0.39 0.34
355.09 274.53
Total 428.37 333.40
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NOTE 30 EMPLOYEE BENEFITS EXPENSES

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As at As at
Particulars
31 [st] March, 2025 31 [st] March, 2024
Salaries, wages and bonus 369.48 315.23
Post employment benefits
- Contribution to provident and other funds 16.71 15.96
- Gratuity and other defined benefit plans 3.77 3.33
Staff welfare expenses 3.67 3.17
Sales Incentive 5.52 6.08
Directors' Commission - 1.75
399.15 345.51
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NOTE 31 FINANCE COST

Particulars	As at 31st March, 2025	As at 31st March, 2024
- Interest expense on:
Borrowings	17.86	13.69
Other costs	4.09	3.26
Total	21.95	16.94

NOTE 3 & 4 DEPRECIATION AND AMORTISATION EXPENSE

Particulars	As at 31st March, 2025	As at 31st March, 2024
Depreciation of tangible assets	43.57	37.97
Amortisation of intangible assets	0.82	0.58
Total	44.39	38.55

144

Corporate Overview / Statutory Reports

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Notes forming part of the Standalone Financial Statements

for the period ended March, 2025

(All amounts in rupees Million, unless otherwise stated)

NOTE 32 OTHER EXPENSES

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As at As at
Particulars
31 [st] March, 2025 31 [st] March, 2024
Rent 4.70 4.72
Security charges 7.97 7.20
Rates and taxes 3.82 2.57
Repairs and maintenance:
- Machinery 1.75 1.18
- Vehicles 4.45 2.85
- Others 3.87 4.58
Insurance 4.26 4.69
Travelling, communication and conveyance 42.44 35.09
Directors sitting fees 2.12 1.78
Commission 6.73 6.95
Packing, forwarding and distribution 47.46 24.65
Advertisements and sales promotion 1.62 0.68
Payment to auditors
- As auditor - Audit fees 0.48 0.48
- For other services 0.53 1.40
Bad debts w/off / ECL Provsion 8.50 8.42
Legal and professional fees 33.64 18.37
Loss on sale of fxed assets 0.16 0.02
Expenditure on corporate social responsibility 4.38 3.00
Miscellaneous expenses 21.32 18.49
Total 200.20 147.11
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NOTE 33 EXCEPTIONAL ITEMS

Particulars	As at 31st March, 2025	As at 31st March, 2024
Share issue Expenses	-	2.57

NOTE 34 TAX EXPENSE

Particulars	Year ended 31st March, 2025	Year ended 31st March, 2024
Current tax (includingearlieryears)	94.00	67.66
Deferred tax	3.55	14.97
Income tax expense reported in the statement ofproft and loss	97.55	82.63
Other comprehensive income
Deferred tax charge/ (credit) on remeasurements losses of defned beneftplans	0.41	0.45
Total tax expense	97.14	82.17

The major components of income tax expense and reconciliation of expected tax expense based on the domestic effective tax rate of the Company at 2025 25.17%, and 2024 25.17% respectively and the reported tax expense in the statement of profit or loss are as follows:

Annual Report 20 24 - 25 145

Innovative Superconditioning Solutions

Notes forming part of the Standalone Financial Statements for the period ended March, 2025

(All amounts in rupees Million, unless otherwise stated)

Reconciliation of tax expense and the accounting profit multiplied by tax rate

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Year ended Year ended
Particulars
31 [st] March, 2025 31 [st] March, 2024
Accounting profit before income tax 433.27 316.58
At country’s statutory income tax rate of 25.17% 31 March 2025 and 31 March 2024: 109.05 79.68
25.17%)
Tax effect of amounts which are not deductible (taxable) in calculating taxable
income:
Difference Between Book Depreciation And Tax Depreciation (4.38) (4.65)
Net Expenses disallowed/allowed under Income Tax 12.00 7.51
Fair Value Gain as per IND AS 2.02 (7.39)
Effect of Deferred Tax 3.55 14.97
Others (26.50) (7.95)
95.74 82.17
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NOTE 35 EARNING PER EQUITY SHARE

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Year ended Year ended
Particulars
31 [st] March, 2025 31 [st] March, 2024
Net profit attributable to equity shareholders
Net profit for the year 337.53 233.95
Nominal value of equity share ` 10.00 10.00
Total number of equity shares outstanding at the beginning of the year 28.02 3.74
Total number of equity shares outstanding at the end of the year 37.43 28.02
Weighted-average number of equity shares (Post Bonus Issue) 37.43 28.02
Basic 9.02 8.35
Diluted * 9.02 6.25
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* As per para 64 of INDAS 33,the number of ordinary shares has increased as a result of a capitalisation through IPO hence diluted EPS for 2023-2024 is calculated considering the issue of shares through IPO

NOTE 36 EMPLOYEE BENEFIT OBLIGATIONS

Defined contribution plan

The Company makes contribution to statutory provident fund as per Employees Provident Fund and Miscellaneous Provisions Act, 1952. This is a defined contribution plan as per IND-AS 19.

Particulars	Year ended 31st March, 2025	Year ended 31st March, 2024
Employers Contribution to Provident Fund/ Pension Fund	14.58	13.03
Employers Contribution to ESIC	1.35	1.71
Total	15.93	14.74

Defined Benefit Plan for Gratuity & for Leave Encashment :

(i) Actuarial gains and losses in respect of defined benefit plans are recognised in the Financial statements through other comprehensive income.

(ii) Through its defined benefit plans the Company is exposed to a number of risks, the most significant of which are detailed below:

146

Corporate Overview / Statutory Reports

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Notes forming part of the Standalone Financial Statements

for the period ended March, 2025

(All amounts in rupees Million, unless otherwise stated)

(a) Asset Volatility :

(i) The plan liabilities are calculated using a discount rate; if plan assets under perform compared to the discount rate, this will create or increase a deficit.
(ii) As the plans mature, the Company intends to reduce the level of investment risk by investing more in assets that better match the liabilities.

(b) Life Expectancy :

The majority of the plan’s obligations are to provide benefits for the service life of the member, so increases in service life expectancy will result in an increase in the plan’s liabilities. This is particularly significant in the Company’s defined benefit plans, where inflationary increases result in higher sensitivity to changes in service life expectancy.

The amounts recognized in the Balance Sheet are as follows :

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Leave Encashment
Particulars Year ended Year ended
31 [st] March, 2025 31 [st] March, 2024
Present value of obligation at the end of year 3.61 2.70
Fair value of plan assets at the end of year - -
Net liability recognized in the Balance Sheet 3.61 2.70
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The amounts recognized in the Balance Sheet are as follows :

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Gratuity
Particulars Year ended Year ended
31 [st] March, 2025 31 [st] March, 2024
Present value of obligation at the end of year 33.67 27.72
Fair value of plan assets at the end of year 31.36 29.29
Net liability (asset) recognized in the Balance Sheet 2.31 -1.57
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The amounts recognized in the Statement of Profit and Loss are as follows:

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Leave Encashment
Particulars Year ended Year ended
31 [st] March, 2025 31 [st] March, 2024
Current Service Cost 0.80 0.59
Interest Cost 0.18 0.20
Past Service Cost
Benefits Paid -
Recognized Net Actuarial (Gain)/ Loss 1.72 0.12
Total, included in Employee Benefit Expenses 2.71 0.90
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The amounts recognized in the Statement of Profit and Loss are as follows:

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----- Start of picture text -----

Gratuity
Particulars Year ended Year ended
31 [st] March, 2025 31 [st] March, 2024
Current Service Cost 3.11 2.66
Interest Cost (0.03) (0.32)
Past Service Cost
Benefits Paid
Recognized Net Actuarial (Gain)/ Loss
Total, included in Employee Benefit Expenses 3.08 2.35
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147

Annual Report 20 24 - 25

Innovative Superconditioning Solutions

Notes forming part of the Standalone Financial Statements for the period ended March, 2025

(All amounts in rupees Million, unless otherwise stated)

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----- Start of picture text -----

Leave Encashment
Particulars Year ended Year ended
31 [st] March, 2025 31 [st] March, 2024
Defined benefit obligation at beginning of the year 3.61 2.70
Current Service Cost 0.80 0.59
Past Service Cost
Interest Cost 0.18 0.20
Benefits Paid
Actuarial (Gain)/ Loss 1.72 0.12
Defined benefit obligation at the end of the year 6.31 3.61
Gratuity
Particulars Year ended Year ended
31 [st] March, 2025 31 [st] March, 2024
Defined benefit obligation at beginning of the year 27.72 22.60
Current Service Cost 3.11 2.66
Past Service Cost -
Interest Cost 1.93 1.62
Benefits Paid (0.95) (1.14)
Other (Employee contribution,tax expenses) (0.09) (0.08)
Actuarial (Gain)/ Loss 1.94 2.06
Defined benefit obligation at the end of the year 33.67 27.72
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Gratuity
Particulars Year ended Year ended
31 [st] March, 2025 31 [st] March, 2024
Defined benefit plan at beginning of the year 29.29 27.06
Interest income 1.96 1.93
Employer contribution 1.00 1.44
Benefits Paid (0.86) (1.22)
Actuarial Gain/ (Loss) 0.14 0.07
Defined benefit plan at the end of the year 31.53 29.28
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The Financial assumptions used in accounting for the Gratuity Plan & Leave Encashment are set out below:

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Leave Encashment
Particulars Year ended Year ended
31 [st] March, 2025 31 [st] March, 2024
(i) Discount Rate 0.07 0.07
(ii) Salary Escalation Rate 0.05 0.05
Gratuity
Particulars Year ended Year ended
31 [st] March, 2025 31 [st] March, 2024
(i) Discount Rate 0.07 0.07
(ii) Salary Escalation Rate 0.05 0.05
(iii) Expected Rate of Return on Plan Assets 0.07 0.07
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148

Corporate Overview / Statutory Reports

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Notes forming part of the Standalone Financial Statements

for the period ended March, 2025

(All amounts in rupees Million, unless otherwise stated)

The Demographic assumptions used in accounting for the gratuity plan & leave encashment are set out below:

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Leave Encashment
Particulars Year ended Year ended
31 [st] March, 2025 31 [st] March, 2024
(i) Retirement Age 58 years 58 years
(ii) Employee Turnover :
18-30 Years 0.01 0.01
30-45 Years 0.01 0.01
Above 45 Years 0.01 0.01
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Gratuity
Particulars Year ended Year ended
31 [st] March, 2025 31 [st] March, 2024
(i) Retirement Age 58 years 58 years
(ii) Employee Turnover :
18-30 Years 0.01 0.01
30-45 Years 0.01 0.01
Above 45 Years 0.01 0.01
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Bifurcation of Present Value of Obligations at the end of the valuation period as per Schedule III of the Companies Act, 2013

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Leave Encashment
Particulars Year ended Year ended
31 [st] March, 2025 31 [st] March, 2024
(i) Current liabilities 0.97 0.80
(ii) Non Current liabilities 3.26 2.81
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The Sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is: Expected Cash flow for following years

Gratuity:

Expected Cash Flow for the Next Ten Years	Year ended 31st March, 2025	Year ended 31st March, 2024
Year 1	5.90	4.36
Year 2	2.93	1.61
Year 3	1.50	2.53
Year 4	1.72	1.35
Year 5	1.99	1.62
Year 6 to 10	14.08	10.98

The estimates of future salary increase, considered in actuarial valuation, take into account inflation, seniority, promotions and other relevant factors such as supply and demand in the employment market. The Company evaluates these assumptions annually based on its long-term plans of growth and industry standards. The discount rate is based on prevailing market yields on government securities as at balance sheet date for the estimated term of the obligations.

NOTE 37 CONTINGENT LIABILITIES

	Year ended 31st March, 2025	Year ended 31st March, 2024
Contingent Liabilities notprovided for :
Claims against the companynot acknowledge as Debt
a. GST liabilitydisputed	4.50	-
	4.50	-

149

Annual Report 20 24 - 25

Innovative Superconditioning Solutions

Notes forming part of the Standalone Financial Statements for the period ended March, 2025

(All amounts in rupees Million, unless otherwise stated)

NOTE 38 RELATED PARTY TRANSACTIONS

38.1 Names of related parties and description of relationship:

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Relationship Name of the related party
Subsidiary Companies Diffusion Super-Conditioning Services Pvt. Ltd.
Nowelco Industries Pvt. Ltd.
Diffusion Hernon Adhesive & Sealants Pvt Ltd
Diffusion Engineers Singapore Pte. Ltd.
Diffusion Eurasia Mühendislik Sanayi Ve Ticaret Anonim Sirketi
Step-down Subsidiary M/s Diffusion Wear Solutions Philippines Inc.
(100% subsidiary of Diffusion Engineers Singapore Pte Ltd)
Associate of Subsidiary M/s Mecdiff SD. BHD.
(Associate of Diffusion Engineers Singapore Pte Ltd)
Associate company LSN Diffusion Ltd
Key Management Personnel Mr. Prashant Garg
Mr. Ramesh Kumar Narasinghbhan
Mr Abhishek Mehta
Ms Chanchal Jaiswal
Independent Director Mr. Ajay Jain #
Mr. Anil Trigunyat
Ms. Anita Vijaykar #
Mrs. Deepali Sameer Bendre
Mr. Sherry Samuel Oommen
Relatives of Key Managerial Personnel/ Mrs. Chitra N Garg
Director N. K. Garg HUF
Mr. Nitin N Garg
Mrs Neelu Garg
Ajay Jain ( H.U.F)
Mrs Daksha Jain
Mrs Disha Mehta
Mrs. Renuka Garg
Common Management Benvira Forward Algorithms Private Limited
N.K.Garg Foundation
BTSG Awareness Foundation
Devi Kiran LLP
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38.2 Details of related party transactions

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----- Start of picture text -----

Year ended Year ended
31 [st] March, 2025 31 [st] March, 2024
Sales
Diffusion Engineers Singapore Pte. Ltd. 28.95 30.79
Diffusion Hernon Adhesive & Sealants Pvt Ltd 1.92 0.45
Diffusion Super-Conditioning Services Pvt. Ltd. 98.21 91.73
M/s Diffusion Wear Solutions Philippines Inc. 91.55 63.51
M/s Mecdiff SD. BHD. 7.83 12.58
Nowelco Industries Pvt. Ltd. 7.81 3.60
Benvira Forward Algorithms Private Limited - 5.41
Diffusion Eurasia Mühendislik Sanayi Ve Ticaret Anonim Sirketi 34.86 -
Purchase
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150

Corporate Overview / Statutory Reports

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Notes forming part of the Standalone Financial Statements

for the period ended March, 2025

(All amounts in rupees Million, unless otherwise stated)

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----- Start of picture text -----

Year ended Year ended
31 [st] March, 2025 31 [st] March, 2024
Diffusion Super-Conditioning Services Pvt. Ltd. 0.57 0.75
LSN Diffusion Ltd 37.60 42.96
Nowelco Industries Pvt. Ltd. 95.36 141.13
M/s Diffusion Wear Solutions Philippines Inc. 7.88 -
Reimursement
Benvira Forward Algorithms Private Limited 1.34 0.01
Diffusion Hernon Adhesive & Sealants Pvt Ltd 0.56 0.26
Diffusion Super-Conditioning Services Pvt. Ltd. 1.08 1.43
LSN Diffusion Ltd - 0.09
Nowelco Industries Pvt. Ltd. 10.08 5.43
Mr. Prashant Garg 0.22 2.41
N.K.Garg Foundation 0.00 -
Contribution towards CSR
BTSG Awareness Foundation 0.50 -
Commission
Mr. Ajay Jain - 0.35
Mrs. Renuka Garg - 0.35
Ms. Anita Vijaykar - 0.35
Mrs. Chitra N Garg - 0.35
Mr. Anil Trigunyat - 0.35
Debit / (Credit) due to exchange fluctuation
Diffusion Engineers Singapore Pte. Ltd. 0.37 0.18
LSN Diffusion Ltd (0.19) 0.28
M/s Diffusion Wear Solutions Philippines Inc. 0.14 0.08
M/s Mecdiff SD. BHD. (0.04) 0.08
Benvira Forward Algorithms Private Limited -
Diffusion Eurasia Mühendislik Sanayi Ve Ticaret Anonim Sirketi 0.19 -
Dividend
Mr. Prashant Garg 2.61 6.98
Ajay Jain ( H.U.F) 0.02 0.05
Mr. Nitin N Garg 1.72 4.67
Mrs Daksha Jain 0.00 0.00
Mrs. Chitra N Garg 1.53 4.08
Mrs. Neelu Garg 0.01 0.03
Mrs. Renuka Garg 0.13 0.36
N. K. Garg HUF 0.52 1.42
Ms. Anita Vijaykar 0.00 0.00
Mr Abhishek Mehta 0.00 0.00
Mr Ajay Jain 0.01 0.01
Remuneration
Mr. Prashant Garg 24.00 20.00
Mrs. Neelu Garg 5.52 5.52
Sitting Fees to Directors
Renuka Garg 0.07 0.36
Ajay Jain 0.13 0.40
Anil Trigunayat 0.40 0.11
Anita Vijaykar 0.13 0.40
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Annual Report 20 24 - 25 151

Innovative Superconditioning Solutions

Notes forming part of the Standalone Financial Statements for the period ended March, 2025

(All amounts in rupees Million, unless otherwise stated)

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----- Start of picture text -----

Year ended Year ended
31 [st] March, 2025 31 [st] March, 2024
Prashant garg 0.16 0.41
Chitra Garg 0.38 0.11
Mr. Nitin N Garg 0.33 -
Mrs. Deepali Sameer Bendre 0.26 -
Mr. Sherry Samuel Oommen 0.27 -
Rent
Mrs. Chitra N Garg 3.40 3.03
N. K. Garg HUF 0.25 0.22
Mr. Prashant Garg 0.81 0.73
Key Managerial Personnel - Remuneration
Mr Abhishek Mehta 1.82 1.82
Ms Chanchal Jaiswal 0.86 0.60
Mr. Ramesh Kumar Narasinghbhan 2.40 -
Relatives of Key Managerial Personnel - Consultancy
Mrs Disha Mehta 1.59 1.50
Rent Receipt
Diffusion Hernon Adhesive & Sealants Pvt Ltd 0.21 0.17
Purchase of land
Mr. Prashant Garg - 13.33
Mr. Nitin N Garg - 13.33
Mrs. Chitra N Garg - 13.33
476.31 497.85
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38.3 Details of outstanding to/from related parties

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----- Start of picture text -----

Year ended Year ended
31 [st] March, 2025 31 [st] March, 2024
Trade Payables
LSN Diffusion Ltd 4.71 -
Nowelco Industries Pvt. Ltd. 0.65 -
M/s Diffusion Wear Solutions Philippines Inc. 5.52
Trade receivables
Diffusion Engineers Singapore Pte. Ltd. 16.69 23.79
Diffusion Hernon Adhesive & Sealants Pvt Ltd 0.59 0.36
Diffusion Super-Conditioning Services Pvt. Ltd. 26.98 19.33
M/s Diffusion Wear Solutions Philippines Inc. 63.92 24.03
M/s Mecdiff SD. BHD. 4.03 7.78
Nowelco Industries Pvt. Ltd. 7.06 6.82
Benvira Forward Algorithms Private Limited 6.42 6.28
Diffusion Eurasia Mühendislik Sanayi Ve Ticaret Anonim Sirketi 7.18
Total Debit Notes towards expenses
Nowelco Industries Pvt. Ltd. - 1.17
Rent Deposit
Diffusion Hernon Adhesive & Sealants Pvt Ltd 0.04 0.04
----- End of picture text -----

# Mr Ajay Jain [DIN: 02815416] and Ms Anita Vijayakar [DIN:01190200] ceased to be Independent Directors of the company upon completion of their term at the close of business hours on September 13, 2024.

152

Corporate Overview / Statutory Reports

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Notes forming part of the Standalone Financial Statements for the period ended March, 2025

(All amounts in rupees Million, unless otherwise stated)

NOTE 39 FINANCIAL INSTRUMENTS BY CATEGORY

A. Fair Values

Set out below, is a comparison by class of the carrying amounts and fair value of the financial instruments of the Company

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Carrying Value
Financial Instruments by category Year ended Year ended
31 [st] March, 2025 31 [st] March, 2024
Financial Assets at Amortised Cost
Cash and Bank Balances 1,184.50 25.53
Investments 225.43 156.83
Other Financial Assets 98.77 62.00
Trade Receivables 863.52 646.80
Loans and advances 112.53 154.43
Total 2,484.74 1,045.59
Financial Liabilities at Amortised Cost
Trade Payables 319.35 308.83
Borrowings 216.30 337.08
Other Financial Liabilities 18.33 23.36
Total 553.98 669.27
Fair Value
Financial Instruments by category Year ended Year ended
31 [st] March, 2025 31 [st] March, 2024
Financial Assets at Amortised Cost
Cash and Bank Balances 1,184.50 25.53
Investments 360.36 295.38
Other Financial Assets 98.77 62.00
Trade Receivables 863.52 646.80
Loans and advances 112.53 154.43
Total 2,619.67 1,184.15
Financial Liabilities at Amortised Cost
Trade Payables 319.35 308.83
Borrowings 216.30 337.08
Other Financial Liabilities 18.33 23.36
Total 553.98 669.27
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The following methods and assumptions were used to estimate the fair values:

Cash and short-term deposits, trade receivables, loans, trade payables, and other current financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

Long-term receivables/payables are evaluated by the Company based on parameters such as interest rates, risk factors, individual creditworthiness of the counterparty and the risk characteristics of the financed project. Based on this evaluation, allowances are taken into account for the expected credit losses of these receivables.

All foreign currency denominated assets and liabilities are translated using exchange rate at reporting date.

Fair Value Hierarchy

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: Inputs other than the quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and

Level 3: Inputs based on unobservable market data.

Annual Report 20 24 - 25 153

Innovative Superconditioning Solutions

Notes forming part of the Standalone Financial Statements

for the period ended March, 2025

(All amounts in rupees Million, unless otherwise stated)

Quantitative Disclosures of Fair Value Measurement Hierarchy for Assets:

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Year ended 31 [st] March, 2025
Carrying
Particulars Level of input used in
Amount
Level 1 Level 2 Level 3
Financial Assets at Amortised Cost
Cash and Bank Balances 1,184.50 - - 1,184.50
Investments 225.43 262.14 - 225.43
Other Financial Assets 98.77 - - 98.77
Trade Receivables 863.52 - - 863.52
Financial Liabilities at Amortised Cost
Trade Payables 319.35 - - 319.35
Borrowings 216.30 - - 216.30
Other Financial Liabilities 18.33 - - 18.33
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Year ended 31 [st] March, 2024
Carrying
Particulars Level of input used in
Amount
Level 1 Level 2 Level 3
Financial Assets at Amortised Cost
Cash and Bank Balances 25.53 - - 25.53
Investments 156.83 201.56 - 156.83
Other Financial Assets 62.00 - - 62.00
Trade Receivables 646.80 - - 646.80
Financial Liabilities at Amortised Cost
Trade Payables 308.83 - - 308.83
Borrowings 337.08 - - 337.08
Other Financial Liabilities 23.36 - - 23.36
----- End of picture text -----

40 FINANCIAL INSTRUMENTS

B. Financial Risk Management

Diffusion engineers limited is exposed primarily to market risk (fluctuation in foreign currency exchange rates & interest rate), credit, liquidity which may adversely impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial environment & seeks to mitigate potential adverse effects on the financial performance of the Company.

1. Capital Management :

The Group’s capital management objectives are:
(i) The Board policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The board of directors monitors the return on capital employed.
(ii) The Company manages capital risk by maintaining sound/optimal capital structure through monitoring of financial ratios, such as debt-to-equity ratio and net borrowings-to-equity ratio on a monthly basis and implements capital structure improvement plan when necessary.
(iii) The Company uses debt equity ratio as a capital management index and calculates the ratio as the net debt divided by total equity. Net debts and total equity are based on the amounts stated in the financial statements.

154

Corporate Overview / Statutory Reports

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Notes forming part of the Standalone Financial Statements

for the period ended March, 2025

(All amounts in rupees Million, unless otherwise stated)

(iv) Debt Equity Ratio is as follows:

Particulars	As at 31st March, 2025	As at 31st March, 2024
Debt (A)	216.30	337.08
Equity(B)	3,550.42	1,783.20
Debt Equity Ratio (A/B)	0.06	0.19

2. Credit Risk :

(i) Credit risk is the risk of financial loss arising from counter-party failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analysing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit.
(ii) Financial instruments that are subject to concentration of credit risk principally consists of trade receivables, investments, derivative financial instruments and other financial assets. None of the financial instruments of the Company results in material concentration of credit risk.

3. Liquidity Risk :

Liquidity Risk Management : Liquidity Risk Management : Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

Maturities of Borrowings :

The following table details the Group’s expected maturity for borrowings :

Exposure to Risk	As at 31st March, 2025	As at 31st March, 2024
Interest bearing borrowings:
On Demand	216.30	337.08
Less than 180 Days	-	-
181-365 Days
More than 365 Days

4. Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Such changes in the values of financial instruments may result from changes in the foreign currency exchange rates, interest rates, credit, liquidity and other market changes. The Company’s exposure to market risk is primarily on account of foreign currency exchange rate risk.

a) Foreign Currency Exchange Rate Risk :

The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss and other comprehensive income and equity, where any transaction references more than one currency or where assets / liabilities are denominated in a currency other than the functional currency of the respective entities. Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in AED, US Dollar, Australian Dollar, Great Britain Pound, Euro, SGD against the respective functional currencies of the Company. The Company, as per its risk management policy, evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks & uses derivative instruments primarily to hedge foreign exchange (if required).

Annual Report 20 24 - 25 155

Innovative Superconditioning Solutions

Notes forming part of the Standalone Financial Statements for the period ended March, 2025

(All amounts in rupees Million, unless otherwise stated)

Foreign Currency Exposures :

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----- Start of picture text -----

As at March 31, As at March 31,
Particulars Currency type
2025 2024
I. Trade receivables/Advance USD 1.55 0.98
EURO 0.21 0.04
Total 1.76 1.02
II. Borrowing balances : USD -
Total -
III. Trade payables : USD 0.30 0.30
EUR 0.02 0.02
Total 0.32 0.32
----- End of picture text -----

Foreign Currency Sensitivity :

The following tables demonstrate the sensitivity to a reasonably possible change in foreign currency exchange rates, with all other variables held constant. The impact on the Company’s profit before tax is due to changes in the fair value of monetary assets and liabilities.

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Effect on profit
Particulars Currency Change in rate
before tax
Year ended 31 March 2025 USD 10% 0.13
USD -10% (0.13)
EUR 10% 0.02
EUR -10% (0.02)
Year ended 31 March 2024 USD 10% 0.07
USD -10% (0.07)
EUR 10% 0.00
EUR -10% (0.00)
----- End of picture text -----

b) Interest Rate Risk :

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of change in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s debt obligations with floating interest rates.

Floating Interest rate exposure :	Year ended 31st March, 2025	Year ended 31st March, 2024
Secured Loans :
Loans repayable taken from Banks:	216.30	337.08
Total	216.30	337.08

Interest Rate Sensitivity :

The sensitivity analyses below have been determined based on exposure to interest rate. For variable rate liabilities, analysis is prepared assuming the amount of liability outstanding at the end of the reporting period was outstanding for the whole year. With all other variables held constant, the Company’s profit before tax is affected through the impact on variable rate borrowings, as follows:

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Increase / Effect on
Particulars Decrease in Profit Before
Basis Points Tax(Loss)
As at March 31, 2025 +100 (2.16)
-100 2.16
As at March 31, 2024 +100 (3.37)
-100 3.37
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156

Corporate Overview / Statutory Reports

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Notes forming part of the Standalone Financial Statements for the period ended March, 2025

(All amounts in rupees Million, unless otherwise stated)

NOTE 41 SEGMENT REPORTING

The Company has not presented standalone segment information as permitted by Ind AS 108 – Operating Segments, as segment information of the Group is included in consolidated financial statements.

NOTE 42 RATIO ANALYSIS

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Sr 31 [st] March 31 [st] March % Reason for
Numerator Denominator
No. [Ratio Analysis] 2025 2024 Variance variance
1 Current Ratio Current Assets Current 4.20 1.80 134.11% Variance is due
Liabilities to increase in
cash and cash
equivalents due
to IPO proceeds
2 Debt Equity Ratio Total borrowings Sharholder's 0.06 0.19 -67.77% Variance is due
Equity to repayment of
debt and issue of
fresh equity
3 Debt Service Earnings Debt Service 27.75 26.95 2.97%
Coverage Ratio available for debt
service
4 Return on Equity Profit After Tax Avg. 12.66% 14.85% -14.80%
Ratio Shareholders
Equity
5 Inventory Turnover Net Sales Average 5.77 5.43 6.15%
Ratio Inventory
6 Trade Receivables Net Credit Sales Average Trade 4.18 3.73 12.05%
Turnover Ratio Receivables
7 Trade Payables Total Purchases Average Trade 6.19 5.40 14.59%
Turnover Ratio Payables
8 Net Capital Turnover Net Sales Average Working 2.28 4.58 -50.29% Variance is due
Ratio Capital to increase in
cash and cash
equivalents due
to IPO proceeds
9 Net Profit Ratio Profit After Tax Net Sales 10.68% 9.10% 17.39%
10 Return on Capital EBIT Capital 12.09% 15.73% -23.17% Variance is
employed Employed due to issue
of fresh equity
and increase
in operating
margins
11 Return on Investment Profit After Tax Sharholder's 9.51% 13.12% -27.54% Variance is
Equity due to issue
of fresh equity
and increase in
operating margins
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Explanation :

Total Debt represents Current Borrowings + Non Current Borrowings.

Shareholders Equity represents Equity Share Capital + Other equity Earnings available for debt service represents Profit Before Tax + Depreciation and Amortizations + Interest on Debt

Annual Report 20 24 - 25 157

Innovative Superconditioning Solutions

Notes forming part of the Standalone Financial Statements

for the period ended March, 2025

(All amounts in rupees Million, unless otherwise stated)

Debt Service represents Interest on Debt + Scheduled Principal Repayment of Non Current Borrowings

Net Sales represents Domestic Sales + Export Sales + Scrap Sales

Capital Employed represents Total Equity + Borrowings

NOTE 43 PROPOSED DIVIDEND

Board of Directors proposes 15% Final Dividend on Equity shares subject to approval in AGM.

NOTE 44 OTHER AMENDMENTS WITH RESPECT TO SCHEDULE III

The Company does not have any Benami property, where any proceedings have been initiated or pending against the company for holding any Benami property.

The company is not declared as wilful defaulter by any bank or financial Institution or other lender

The Company does not have any transactions with Companies struck off.

The Company has not traded or invested in Crypto currency or Virtual currency during the financial year.

The company has filed certain Adjudication/Regularization Applications before the Registrar of Companies, Mumbai.

The Company has not given any advance or loan or invested funds to any other person / entities, including foreign entities (intermediaries) with the understanding that the intermediary shall:

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (ultimate beneficiaries) or
(ii) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

The company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall:

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (ultimate beneficiaries) or
(ii) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

NOTE 45

Previous year’s figures have been regrouped / rearranged wherever necessary, to conform to the current year’s classification / disclosure.