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.

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.

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

1. 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.

2. 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

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) I n 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) I n 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

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