AFFLUENCE

NOTICE OF THE FORTIETH (40th) ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT THE 40THANNUAL GENERAL MEETING OF THE MEMBERS OF THE DIFFUSION ENGINEERS LIMITED [CIN – U99999MH2000PLC124154] WILL BE HELD ON SHORTER NOTICE ON TUESDAY ON 27TH SEPTEMBER, 2022 11.00 A.M. AT REGISTERED OFFICE AND SIMULTANEOUSLY CO – ORDINATED THROUGH VIDEO CONFERENCING (“VC”) / OTHER AUDIO VISUAL MEANS (“OAVM”) FROM T-5 & 6, MIDC, HINGANA NAGPUR – 440 038 TO TRANSACT THE FOLLOWING BUSINESS:-

ORDINARY BUSINESS:-

• To receive, consider and adopt the Audited Standalone Financial Statements and Audited Consolidated Financial Statements for the year ended March 31, 2022 together with the Reports of the Board of Directors and Auditors thereon.

• To declare a final dividend of Rs.2 per equity share and to approve the interim dividend of Rs. 2 per equity share already paid during the year, for the year ended March 31, 2021.

• To appoint a Director in place of Dr. Renuka Garg (DIN – 02815373) who retires from the office by rotation and being eligible, offers herself for re – appointment.

SPECIAL BUSINESS:-

• Ratification of Remuneration payable to the Cost Auditors for the Financial Year 2022 – 23

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

“RESOLVED THAT pursuant to the provisions of Section 148 and other applicable provisions, if any, of the Companies Act, 2013 read with 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, 2023.

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.”

For and on behalf of Board of Directors

                                                                        Diffusion Engineers Limited

Date: 21.09.2022.       Prashant Garg

Place: Nagpur Chairman & Managing Director

(DIN – 00049106)

NOTES:-

• A member entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and vote instead of himself and a proxy need not be a Member of the Company. The instrument appointing a proxy should, however, be deposited at the Registered Office of the Company not less than 48 hours before the commencement of the Meeting.

A person appointed as a proxy shall act on behalf of such number of Member(s) not exceeding fifty and holding in the aggregate not more than 10% of the total share capital of the Company, carrying voting rights. Further, a Member holding more than ten percent, of the total share capital of the Company carrying voting rights may appoint a single person as proxy and such person shall not act as proxy for any other person or shareholder.

• In view of the ongoing COVID-19 pandemic, the Ministry of Corporate Affairs (‘MCA‘) has vide its General Circulars dated April 8, 2020, April 13, 2020, May 5, 2020, January 13, 2021, December 14, 2021 and May 5, 2022 (collectively referred to as ‘MCA Circulars‘) permitted the holding of the Annual General Meeting (‘AGM‘) through Video Conferencing (‘VC’) facility / Other Audio Visual Means (‘OAVM’), without the physical presence of the Members at a common venue. In compliance with the applicable provisions of the Companies Act, 2013 (‘the Act’) and the MCA Circulars, the 40th AGM of the Company is being held at Registered Office and simultaneously  through VC/OAVM on Friday, September 30, 2022 at 3.00 p.m. (IST). The venue of the proceedings of the 40th AGM shall be the Registered Office of the Company at T-5 & 6, MIDC, Hingana Nagpur – 440 038

• Explanatory Statement pursuant to Section 102(1) of the Companies Act, 2013, in respect of the Item No.4 set out above is annexed hereto and forms part of this notice.

• All relevant documents referred to in this notice and the explanatory statement will be available for inspection by the members at the registered office of the Company during normal business hours on all working days [except Saturday(s) and Sunday(s) and public holiday(s)] up to the date of the AGM and during the continuance of AGM.

ANNEXURE TO THE NOTICE OF ANNUAL GENERAL MEETING

EXPLANATORY STATEMENT PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013

Pursuant to Section 102 of the Companies Act, 2013 (“the Act”), the following Explanatory Statement sets out all material facts relating to the business mentioned under Item No. 4 of the accompanying Notice dated 21st September, 2022

Item No. 4

Pursuant to the provisions of Section 148 of the Companies Act, 2013 (“the Act”), read with the Companies (Cost Records and Audit) Rules, 2014, the Company is required to have the audit of its cost records conducted by a cost accountant in practice.

The Board of Directors of your Company has, on the recommendation of the Audit Committee, approved the appointment of M/s A. B. Verma & Co., Cost Accountants, Nagpur (Firm Registration No. 102527/ Membership No. 31367), 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, 2023, at a remuneration of Rs. 50,000/- plus applicable taxes and reimbursement oftravel and out of pocket expenses.

M/s A. B. Verma & Co., Cost Accountants, Nagpur (Firm Registration No. 102527/ Membership No. 31367), have the necessary experience in the field of cost audit and have submitted a certificate regarding their eligibility for appointment as Cost Auditors of the Company.

As per the provisions of Section 148 of the Act read with Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors has to be ratified by the members of the Company.

Accordingly, consent of the members is sought for passing the resolution as set out in Item No. 4 of the Notice for ratification of the remuneration payable to the Cost Auditors for the Financial Year ending March 31, 2023.

None of the Directors and Key Managerial Personnel or their relatives are, in any way, concerned or interested, financially or otherwise, in the said resolution.

The Board accordingly recommends the ordinary resolution as set out in Item No. 4 of this Notice for your approval.

  For and on behalf of Board of Directors

                                                                          Diffusion Engineers Limited

Date: 21.09.2022.       Prashant Garg

Place: Nagpur Chairman & Managing Director

(DIN – 00049106)

DIRECTORS REPORT

Dear Members,

Your Directors have immense pleasure in presenting the Fortieth Annual Report on the business and operation of the Company together with Audited Statement of Accounts for the financial year ended 31st March, 2022.

• Financial Highlights

During the year under review, performance of your company as under:

(Rs.in Lakhs)

The consolidated performance of the group as per consolidated financial statements is as under:

(Rs.in Lakhs)

**Annexure-I & II for details

• Dividend

During the Year, the board had declared and distributed an interim dividend of 20% & proposed final dividend of 20%, total dividend for 2021– 22 is 40%.

• Amounts transferred to Reserves   The Board of the company has not transferred any amount to its reserves.

• State of Company’s Affairs & Future Outlook

Your company completes 40 glorious years of its existence, a fairly long journey which was began with a visionary founder late Shri. N. K. Garg whose disciplined work culture & professional approach   towards governance,    principles of independence, transparency, accountability, responsibility, compliance, ethics and trust has been successfully adopted by the present  management . We will continue to uphold the value systems which have been the traditional hallmark of Diffusion Engineers Limited for over four decades.

As we step into the third year of the pandemic, it is abundantly clear that we are at the crossroads of a redefined future. While economies started rebounding, new challenges emerged including geopolitical tensions, inflationary headwinds as well as extended supply chain disruptions. Our journey into the future will be shaped by our ability to adapt to the new normal and address emerging challenges with agility, innovative capabilities, inclusivity and resilience. While the COVID-19 crisis has caused unprecedented disruptions to human life and economic activity, it has also provided multi-dimensional learnings which will power transformational change going forward. We witnessed the constant breakthroughs in science, technology and innovation, the extraordinary fortitude displayed by humanity in serving people in distress. As the dust settles, and a clearer picture of the world ahead emerges, I believe we are standing at the threshold of a period of great opportunity and growth. In the face of widespread change, your company has shown remarkable resilience and adaptability, coming out stronger than ever, after catastrophic events like the global financial crisis or the pandemic.

In a year marked by several disruptions, your Company turned in a creditable performance and registered appreciable recovery across key performance parameters. It is a matter of achievement and satisfaction that your Company was able to withstand the challenges and came out with an encouraging performance under challenging conditions. The company continues to be a high quality manufacturer of Maintenance Welding Consumables like Lo Temp Welding Electrodes, Flux Cored Wires, Wear Plates, Wear Plate Parts, and Fabricated Equipment’s for the core industrial sectors. The company has constantly been striving to move up in the value chain of its customers and therefore has been successful in keeping ahead of competition. Its emphasis on making consistent quality and precision products for highly critical end user applications have led it realize higher returns.

The subsidiary and associate companies have also improved their performance during the year.

• Directors

In terms of the provisions of Section 152 and other applicable provisions, if any, of the Companies Act, 2013:-

Dr. Renuka Garg (DIN – 02815373) Director retires by rotation at the ensuing Annual General Meeting, and being eligible, offers herself for re – appointment.  

• Number of Board Meetings & Attendance   Four meetings were held during the Financial Year 2021 – 22, dates and attendance details:-

  

• Audit Committee

The Audit Committee’s role is to assist the Board in overseeing the governance function and responsibilities in relation to the Company’s financial reporting process carried out by the Management, internal control system, risk management system and internal and external audit functions. The Audit Committee functions according to its charter/terms of reference that defines its composition, authority, responsibilities and reporting functions.

The Audit Committee consists of the following members -

• Mr. Ajay Jain [Independent Director & Chairperson of the Committee]

• Ms Anita Vijayakar [Independent Director]

• Mr. Prashant Garg [Managing Director]

• Corporate Social Responsibility Committee

The Corporate Social Responsibility (‘CSR’) Committee of the Board is constituted in accordance with the provisions of Section 135 of the Act. The CSR Committee has been entrusted with the specificresponsibility of reviewing corporate social responsibility programs.

The CSR Committee comprised Three (3) Members out of which one (1) is an Independent Director. During the year under review, one (1) Meeting of the CSR Committee were held on the following date –

• 24th September, 2021

The members of the CSR Committee are as under –

• Ms Anita Vijayakar [Independent Director & Chairman of Committee]

• Dr. Renuka Garg [Director]

• Mr. Prashant Garg [Managing Director]

• NOMINATION & REMUNERATION COMMITTEE

The role of committee is to formulate Policy on director’s appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters as specified u/s 178 (3) of the Companies Act, 2013 have been followed by company.

The Nomination & Remuneration Committee consist of following directors as members -

• Mr. Ajay Jain [Independent Director & Chairman of the Committee]

• Ms Anita Vijayakar [Independent Director]

• Dr. Renuka Garg [Director]

During the year under review, One (1) Meeting of the Nomination & Remuneration Committee was held on the following date -

• 17th December, 2021

• Corporate Governance

The company has been following best of the Corporate Governance practices, the management strives to protect the interest of all stakeholders in most transparent and fair manner. The Board is balanced as regards the representation of suitable number of non – executive and independent directors who are taking care of the interests and well – being of all the stakeholders. Its decision making is objective. The Board has an effective mechanism to understand the concerns of stakeholder & it effectively and regularly monitors the functioning of the management team. The Board remains in effective control of the affairs of the company at all times.

• Secretarial Standards:

The directors state that applicable Secretarial standards. i.e. SS – 1 and SS – 2 relating to ‘Meeting of the Board of Directors’ and ‘General Meetings’, respectively have been duly followed by the company.

• Subsidiaries

As on 31st March 2022 company had 7 (seven) Subsidiary Companies (3 in India and 4 overseas) including Associates / Joint Venture details of which is given in

Following are the list of Subsidiaries and Associates / Joint Venture

• Diffusion Super Conditioning Services Private Limited

• Nowelco Industries Private Limited

• Diffusion Hernon Adhesive And Sealant Private Limited

• Diffusion Engineers Singapore Pte. Ltd.

• Diffusion Wear Solutions Inc. (Philippines)

• LSN Diffusion Limited (United Kingdom)

• Mecdiff SD BHD (Malaysia)

• Particulars of Loan, Guarantees and Investments under Section 186 The Company has not given any loans or provided additional corporate guarantees during the year under review.  Details of loans, guarantees and investments covered under the provisions of Section 186 of the Act are given in the notes to the financial statements. The details of investments made during the year are as per Annexure–III

• Particulars of Contracts or Arrangements with Related Parties   All the related party transactions entered into during the financial year were on arm’s length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Act. There are no transactions to be reported in Form AOC–2.

• Deposits

Company has not accepted/ renewed/ repaid any deposits during the financial year.

• Auditors

M/s. P. R. Bhuta & Co. Chartered Accountants, Mumbai, were appointed for a period of five as statutory auditors of the company, at the Annual General Meeting held on 14th September 2019.

The board has decided to re appoint them for remaining period of two years until 42nd AGM. The auditors have confirmed that they are not disqualified from continuing as Auditors of the company.

The Notes on financial statement referred to in the Auditor’s Report are self – explanatory and do not call for any further comments. The Auditor’s Report does not contain any qualification, reservation, adverse remark or disclaimer.

• Cost Audit Records

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

• Cost Auditors and Cost Audit Report

As per Section 148 of the Act, 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 2022 – 23 under Section 148 and all other applicable provisions of the Act 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 provision to 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. They have further confirmed their independent status and an arm’s length relationship with the Company.

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 at item No. 4 of the Notice convening the AGM.

• Risk Management Policy   The company has been constantly assessing various risk factors and it has adequate risk review   system with respect to following areas:   Plant Operations: - Various Plants of the company are running at its optimal capacity. It is paying special attention to Industrial safety and training, company has insured all its plants adequately.   Financial Risk: - The Company has been managing its financial and other resources very effectively; Credit period offered to customers is effectively monitored, with optimal utilization of internal accruals the financial cost is very minimum in comparison with other companies operating in the same field. It also pays more attention to Foreign Exchange Earning and Expenses.   Protection of IPR & Legal diligence: -Constant evaluation of Intellectual Property Rights related issues and Contractual obligations with Jurisdictional issue are diligently observed.

• Disclosures under Sexual Harassment of Women at Workplace (Prevention, Prohibition &Redressal) Act, 2013

There are no cases reported during the year under review. Ms. Anita Vijayakar (DIN – 01190200) an Independent Director is a Chairperson of the committee along with various women staff members both from plants and office.

• Conservation of Energy, Technology, Absorption, Foreign Exchange Earnings and Outgo

Details is as per Annexure–IV

• Corporate Social Responsibility (CSR) Policy   Composition of CSR committee, the details about implementation is provided as per the prescribed format under Companies (Corporate Social Responsibility Policy) Rules, 2014, is as per Annexure–V

• Extract of Annual Return   Pursuant to Section 92(3) read with Section 134 (3) (a) of the Act and Rule 12 of the Companies (Management and Administration), Rules 2014 the Annual Return in Form MGT – 7 as on March 31, 2022 is available on the Company’s website at __________________

• Directors Responsibility Statement   In accordance with the provisions of Section 134 (5) of the Companies Act 2013, your directors confirm that:

• in the preparation of the annual accounts for the financial year ended 31st March, 2022, the applicable accounting standards had been followed along with proper explanation relating to material departures;

• the directors had 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 as at 31st March, 2022 and of the profit /loss of the Company for that period;

• the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

• the directors had prepared the annual accounts on a going concern basis;

• they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

• the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

• Acknowledgment

Your Directors place on record their gratitude to government authorities, Bankers and all stakeholders for the assistance, co – operation and encouragement they extended to the Company. Your directors also wish to place on records their sincere thanks and appreciation to Employees at all levels for continuing support and unstinting efforts in ensuring an excellent all around operational performance.

For and on behalf of the Board of Directors of

Diffusion Engineers Limited

Place : Nagpur               PRASHANT GARG

Date : 21st September, 2022 (DIN – 00049106) Chairman & Managing Director

Annexure I

(Point 1 of Director’s Report)

(Rs. in Lakhs)

Annexure II

(Point 1 of Director’s Report)

(Rs. in Lakhs)

Annexure III

(Point 12 of Director’s Report)

Annexure IV

(Point 20 of Director’s Report)

•  Conservation of Energy

Research and development is very important because of the nature of the industry and your company has given it prime importance. We have recently added another specialist who is very experienced in the field of repair and maintenance for strengthening our team further. Our collaboration with Universities has increased to make use of their facilities and get research assistance. We are planning to establish a separate R&D wing in our premises for focusing more on R&D. Your company has also received DSIR – Department of Scientific and Industrial Research Certificate.

• Exports:

Growth in Export is consistent and improving every year.

• Foreign Exchange Earning and outgo:

Foreign Exchange Earning Rs. 1,617.40/- Lakhs

Foreign Exchange outgo Rs. 14.01/- Lakhs

Annexure V

(Point 21 of Director’s Report)

Corporate Social Responsibility (CSR)

[Pursuant to clause (o) of sub – section (3) of section 134 of the Act and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014]

Areas identified for CSR activities:

• Health & Sanitation

• Preserving Environment & Water Harvesting

• Education / Skill Development

• Provision of Basic Needs

Financial Period 2021 – 2022

• HEALTH & SANITATION:

• Preserving Environment:

The Company contributed to CSR for the Maintenance of the Pawanbhoomi ground cum park. Project is ongoing project & progressing well. Ground is well maintained.

• MEDICAL FUND :   

1.Chichbhavan Village Medical Services –Kalmeshwar

We have got the permission from CDPO to use the Aganwadi Chichbhavan for the services. We have commenced the medical services for Chichbhavan and surrounding 5 villages with permission from Government Health Department. Nagpur from February 2019. We have designated Dr. MayurNipane (B.A.M.S & D.Y.N.S) for the program. Dr. Nipane will visit and provide medical consultancy twice a week i.e. on Wednesday & Saturday for 2 hours per visit i.e. 7.00 am to 9.00 am and 3.00 pm to 5.00 pm. Diffusion Engineers Ltd pays consultancy charges to Dr. Nipane per visit for 8 visits per month. Diffusion Engineers Ltd provides basic and emergency medication to patients and is stocked at the Aganwadi. In case of requirement for specialists, Dr. Nipane will refer the same. We have provided Dr. Nipane with an Assistant to assist in the service and spreading knowledge about the services in Chichbhavan and nearby villages. Project is just started with average of 10 to 20 patients per visit. Project is progressing well and going on with great success with average of 15 to 25 patients per session. Medicines as per requirement are also provided to the patients which saves them a trip to the nearest primary health centre.

2.Oxygen Generation Plant Donation:

The NK Garg Foundation donated an advanced Oxygen Generation Plant in the memory of Shri NK Garg, Founder and Promoter of Diffusion Engineers Limited to Swami Vivekanand Medical Mission Hospital at Khapri, Nagpur. The Oxygen plant was inaugurated by Shri Nitin Gadkari, Honorable Minister of Road Transport and Highways and The Minister of Micro, Small and Medium Enterprises on 04th July 2021.

Mr. Prashant Garg, Managing Director of Diffusion Engineers Ltd informed that during the second wave of COVID, hospitals across India witnessed critical constraints in Oxygen availability. The hospital administrators have realized the need to be self-sufficient and have in-house oxygen generation facilities. With similar aim, the NK Garg Foundation has come forward and decided to donate the Oxygen generation plant which has the capacity to fill 70 jumbo oxygen cylinders per day. ShriNitinGadkari appreciated the efforts of NK Garg Foundation and highlighted the need to have more private organizations/NGO to supplement the efforts of the Government.

Mr Prashant Garg, Managing Director gave a brief introduction about various social and charitable activities conducted under the Foundation. The Foundation has been doing charitable work in the areas of Health, Education and Social Upliftment. This effort was generously supported by donors and patrons from across the world. The addition of the Oxygen Generation Plant will make the hospital self-sufficient and ready to manage any unexpected surge in the number of patients. The occasion was graced by the trustees of Hospital, Mrs Chitra Garg, Mrs Neelu Garg, Ms Aneeta Vijayakar, Dr. Nitin Garg, Mr. Ulhas Bujone – Secretary SVMM, Dr. Meena Khaltkar- Medical superintendent.

The oxygen generation plant donated by NK Garg Foundation would be solace to the needy in these trying times.

3. Cataract Operation:

Company contributed towards Cataract operation performed for one patient at Dr. K. G. Deshpande Memorial Centre, Ram Nagar.

• SOCIAL COMMITMENT / PROVISION OF BASIC NEEDS

1. Donation of RO water plant to SanjiwanVriddhashram :

Sanjiwangram is a fast evolving facility that has its roots in The Sanjiwan Home/ Vriddhashram for aged. The Foundation cares for the elderly who cannot live with their families for various reasons, or those who choose to live in an old age home, or have no option other than living in one. The elderly who become unwanted once their material utility is over develop a feeling of destitution. Diffusion Engineers Limited donated AquatekPurio RO water plant to SanjiwanVriddhashram to take care of their needs through the harsh summers. The Water Plant has a capacity of purifying 100 litres per hour.

• SKILL DEVELOPMENT

Right training and skill development can help underprivileged individuals to get decent jobs and sustain high growth momentum. One of the CSR Goals at Diffusion Engineers Limited is to help & to develop the skills of youth of rural India as well as to enable them to earn well and live a better life. Understanding its importance, we started Pilot Batch of Welding & Fabrication Skill Development Course under Skill India in association with Montfort Integrated Education Centre commenced on 16th January, 2020. It gets immense response & there are total 15 participants. 11 students have appeared for the certificate exam of Skill India.

• CONTRIBUTION TO N. K. GARG FOUNDATION

The Company has donated to N K Garg Foundation with objective of which is to work towards social upliftment of the deprived / less privileged sections of the society.  The donation will be used for projects in the areas of education in rural development, medical aid, skill development, child nutrition & maternal health, assistance to industrial workers and to sportsmen. The company and the N.K. Garg Foundation jointly completed the installation of Oxygen Plant through Swami Vivekananda Mission, Khapri Nagpur.

 Manner in which the amount spent during the financial year is detailed below.

Note -

The CSR Projects of Diffusion Engineers Limited are executed through N. K. Garg Foundation as discussed and approved by the Board of Directors, however due to subsequent amendments N.K.Garg Foundation being section 8 company requires itself to comply with the requirements of CSR-1. During the year under review the company donated Rs.11, 50,000/- to the foundation from its funds. N.K.Garg foundation has applied for the recognition under section 80(G) of the Income Tax, 1961. The registration is still awaited & hence it could not file Form CSR-1 with the MCA. In the meantime during the year under review the menace of COVID-19 corona virus was at peak to tide over the shortage of Oxygen in the city of Nagpur the company and the N.K. Garg Foundation jointly completed the installation of Oxygen Plant through Swami Vivekananda Mission ,Khapri Nagpur.

State of Company’s Affairs & Future Outlook

Your company completes 40 glorious years of its existence, a fairly long journey which was began with a visionary founder late Shri. N. K. Garg whose disciplined work culture & professional approach   towards governance,    principles of independence, transparency, accountability, responsibility, compliance, ethics and trust has been successfully adopted by the present  management . We will continue to uphold the value systems which have been the traditional hallmark of Diffusion Engineers Limited for over four decades.

As we step into the third year of the pandemic, it is abundantly clear that we are at the crossroads of a redefined future. While economies started rebounding, new challenges emerged including geopolitical tensions, inflationary headwinds as well as extended supply chain disruptions. Our journey into the future will be shaped by our ability to adapt to the new normal and address emerging challenges with agility, innovative capabilities, inclusivity and resilience. While the COVID-19 crisis has caused unprecedented disruptions to human life and economic activity, it has also provided multi-dimensional learnings which will power transformational change going forward. We witnessed the constant breakthroughs in science, technology and innovation, the extraordinary fortitude displayed by humanity in serving people in distress. As the dust settles, and a clearer picture of the world ahead emerges, I believe we are standing at the threshold of a period of great opportunity and growth. In the face of widespread change, your company has shown remarkable resilience and adaptability, coming out stronger than ever, after catastrophic events like the global financial crisis or the pandemic.

In a year marked by several disruptions, your Company turned in a creditable performance and registered appreciable recovery across key performance parameters. It is a matter of achievement and satisfaction that your Company was able to withstand the challenges and came out with an encouraging performance under challenging conditions. The company continues to be a high quality manufacturer of Maintenance Welding Consumables like Lo Temp Welding Electrodes, Flux Cored Wires, Wear Plates, Wear Plate Parts, and Fabricated Equipment’s for the core industrial sectors. The company has constantly been striving to move up in the value chain of its customers and therefore has been successful in keeping ahead of competition. Its emphasis on making consistent quality and precision products for highly critical end user applications have led it realize higher returns.

The subsidiary and associate companies have also improved their performance during the year.

Conservation of Energy, Technology, Absorption, Foreign Exchange Earnings and Outgo

Details is as per Annexure–IV

Annexure IV

(Point 20 of Director’s Report)

•  Conservation of Energy

b) Technology Absorption

Exports:

Growth in Export is consistent and improving every year.

Foreign Exchange Earning and outgo:

Foreign Exchange Earning Rs. 1,617.40/- Lakhs

Foreign Exchange outgo Rs. 14.01/- Lakhs

Directors Responsibility Statement   In accordance with the provisions of Section 134 (5) of the Companies Act 2013, your directors confirm that:

a)      in the preparation of the annual accounts for the financial year ended 31st March, 2022, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b)      the directors had 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 as at 31st March, 2022 and of the profit /loss of the Company for that period;

c)      the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d)     the directors had prepared the annual accounts on a going concern basis;

e)      they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f)       the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.