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Marshall Machines Ltd.

BSE: 535106 Sector: Engineering
NSE: MARSHALL ISIN Code: INE00SZ01018
BSE 05:30 | 01 Jan Marshall Machines Ltd
NSE 00:00 | 02 Aug 32.25 1.50
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Marshall Machines Ltd. (MARSHALL) - Director Report

Company director report

To

The Members

Marshall Machines Limited

Your Directors have great pleasure of presenting the 25th Annual Report onthe affairs of the Company for the financial year ended 31st March 2019.

FINANCIAL SUMMARY OF THE COMPANY

The summary of Company's Financial Results for the financial year ended 31stMarch 2019 is as under:

(Rs. In Lakhs)
Particulars Current Financial Year Ended Previous Financial Year Ended
31.03.2019 31.03.2018
Revenue from Operations 6522.83 5935.49
Other Income 22.88 6.94
Total Revenue 6545.71 5942.44
Total Expenses 5745.37 5196.07
Profit before before tax 800.34 746.37
Tax expenses 222.88 245.78
Profit for the period 577.46 500.59

RESERVES

No amount is being transferred to reserve & surplus during the period under review.

DIVIDEND

Keeping in view the present economic situations the board recommends retaining theearnings in the Company hence the Board has not recommended any dividend on the equityshare capital of the Company.

OPERATIONAL REVIEW AND STATE OF AFFAIR

Yours Company is engaged in a single segment i.e. developing manufacturing andmarketing of Machines Tool Equipment including wide range of single spindle patenteddouble and four spindle CNC machines automated robotic solutions and patent pending IOTQsuit of intelligent equipment. Therefore disclosure requirements as required underAccounting Standard (AS)-17 issued by Institute of Chartered Accountant of India NewDelhi are not applicable.

During the period under review your Company has reported total Income of Rs. 6545.71lakhs for the financial year ended 31st March 2019 as compared to Rs. 5942.44lakhs in the previous year ended 31st March 2018 and the net profit for theyear under review amounted to Rs. 577.46 lakhs in the current year as compared to Rs.500.59 lakhs of previous year.

CHANGE IN THE NATURE OF BUSINESS IF ANY:

There were no changes in the nature of the business of your Company during the yearunder review.

MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY

Material changes and commitment affecting the financial position of the Companyoccurred between the end of the financial year to which these financial statements relateand on the date of this report are as follows:

CONVERSION OF THE COMPANY

During the year under review your company was converted from Private Limited Companyto a Public Limited Company and requisite fresh Certificate of Incorporation dated 17thMay 2018 was issued by the Registrar of Companies Chandigarh. Consequent to theconversion of the Company the name of the Company has been changed from Marshall MachinesPrivate Limited to Marshall Machines Limited.

INITIAL PUBLIC OFFER (IPO)

An Initial Public Offer (IPO) of 3870000 Equity Shares of Rs. 10/- each at an issueprice of Rs. 42/- per equity share (Including share premium of Rs. 32/- per equity share)aggregating Rs. 162540000/- were issued. Out of 3870000 Equity Shares 198000Equity Shares were reserved for subscription by market maker to the issue and the balance3672000 Equity Shares were issued to general public. The IPO of the Company was openedfrom 28th August 2018 to 30th August 2018. The IPO of the Companywas oversubscribed by 2.14 times. The equity shares offered under IPO of the Company wereallotted to shareholders on 5th September 2018. Thereafter the Equity Sharesof the Company got listed on NSE EMERGE Platform of National Stock Exchange of India on 7thSeptember 2018. Initial and Annual Listing fees has been duly paid by the Company to theExchange.

SHARE CAPITAL

The Authorized share capital of the Company as on 31st March 2019 was Rs.150000000/- divided into 15000000 equity shares of Rs. 10/- each fully paid up.

The Paid-up share capital of the Company as on 31st March 2019 was Rs.145500000/- divided into 14550000/- equity shares of Rs. 10/- each fully paid up.

Further during the year under review

The Authorized share-capital of yours Company was increased to Rs. 150000000/-(Rupees Fifteen Crores) divided into 15000000/- equity shares of Rs. 10/- each inExtra-Ordinary General Meeting held on 24th April 2018.

Your Company after getting approval from shareholders in their Extra-Ordinary GeneralMeeting held on 23rd May 2018 had allotted 8544000 equity shares of Rs. 10/-each by way of bonus issue in proportion of 4:1 (i.e. Four Equity Shares for each existingEquity Share) in Board Meeting held on 25th May 2018.

After Issue of Bonus shares the Paid up Capital of your Company was increased to Rs.106800000/- (Rupees Ten Crores Sixty Eight Lakhs only) divided into 10680000 equityshares of Rs. 10/- each.

Your Company offered 3870000 equity shares of Rs. 10/- each at an issue price of Rs.42/- per equity share (Including share premium of Rs. 32/- per equity share) aggregatingRs. 162540000/- for subscription to general public under Initial Public Offer (IPO).Out of 3870000 equity shares 198000 equity shares were reserved for subscription bymarket maker to the issue and the balance 3672000 equity shares were issued to generalpublic. The IPO of the Company was oversubscribed by 2.14 times. The equity shares offeredunder IPO of the Company were allotted to the shareholders on 5th September2018. After issuing the equity shares under IPO the Paid-up Capital of the Company wasincreased to Rs. 145500000/- (Rupees Fourteen Crores Fifty Five Lakhs only) dividedinto 14550000/- equity shares of Rs. 10/- each.

DISCLOSURE RELATING TO EQUITY SHARES WITH DIFFERENTIAL RIGHTS

Your Company has not issued any equity shares with differential rights during the yearunder review and hence no information as per provisions of Rule 4(4) of the Companies(Share Capital and Debenture) Rules 2014 is furnished.

DISCLOSURE RELATING TO SWEAT EQUITY SHARES

Your Company has not issued any sweat equity shares during the year under the reviewand hence no information as per provisions of Rule 8(13) of the Companies (Share Capitaland Debenture) Rules 2014 is furnished.

DISCLOSURE RELATING TO EMPLOYEE STOCK OPTION SCHEME AND EMPLOYEE STOCK PURCHASE SCHEME

Your Company has not issued any Employee Stock Option Scheme and Employee StockPurchase Scheme. Hence no information as per the provisions of Rule 12(9) of the Companies(Share Capital and Debenture) Rules 2014 has been furnished.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Company's Board comprised six Directors as on 31st March 2019 viz Mr.Gaurav Sarup Managing Director Mr. Prashant Sarup Mr. Siddhant Sarup Whole TimeDirectors Mrs. Archana Sarup Non-Executive Director Dr. (Mr.) Harish Pal Kumar and Mr.Satvinder Singh Independent Directors.

The Board therefore presently comprises six Directors.

APPOINTMENT / RE-APPOINTMENT / RETIREMENT OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. Prashant Sarup (DIN: 01257440) Whole-Time Director of the Company was re-appointedby the Board of Directors to work in such capacity with effect from 1st April2018 for period of 5 (five) years. His re-appointment was ratified by shareholders atExtra-Ordinary General Meeting held on 23rd May 2018.

Mr. Siddhant Sarup (DIN: 07779416) was working as Non-Executive Director of theCompany. The Board of Directors (subject to the approval of the Shareholders) passed aresolution to change the designation of Mr. Siddhant Sarup from Non-Executive Director toWhole-Time Director of the Company. The Change in designation and his appointment asWhole-Time Director was approved by the shareholders by way of Special Resolution passedat Extra-Ordinary General Meeting held on 23rd May 2018.

Dr. (Mr.) Harish Pal Kumar (DIN: 01826010) was appointed as an Independent Director ofthe Company not liable to retire by rotation by the Members in their Extra-OrdinaryGeneral Meeting held on 23rd May 2018 for the period of five (5) consecutiveyears. Mr. Satvinder Singh (DIN: 08148602) was appointed as an Additional (Independent)Director by the Board in their meeting held on 05th June 2018 to hold suchposition up to forthcoming Annual General Meeting.

In the 24th Annual General Meeting held on 27th August 2018 theMembers of the Company had appointed Mr. Satvinder Singh (DIN: 08148602) to hold theposition of Independent Director of the Company for the period of five (5) consecutiveyears from the conclusion of this Annual General Meeting up to 4th June 2023subject to not liable to retire by rotation.

Mr. Sumit Malhotra Associate Member of Institute of Company Secretaries of India(ICSI) was appointed as Company Secretary & Compliance Officer of the Company witheffect from 3rd May 2018. However Mr. Sumit Malhotra resigned from current post witheffect from 1st August 2019.

Mr. Phulljit Singh Grover Member of Institute of Chartered Accountants of India (ICAI)was appointed as Chief Financial Officer of the Company with effect from 21st May 2018pursuant to provisions of Companies Act 2013 read with rule and regulations madethereunder.

Ms. Shruti Gupta Associate Member of Institute of Company Secretaries of India (ICSI)was appointed as Company Secretary & Compliance Officer with effect from 1stAugust 2019 pursuant to provisions of Companies Act 2013 read with rule and regulationsmade thereunder and SEBI (Listing Obligations and Disclosure Requirements) Regulations2015.

In order to ensure compliance with Section 152(6) of the Act the Board has consideredMrs. Archana Sarup Non-Executive Director who shall retire by rotation at the ensuing AGMand being eligible offers herself for re-appointment for ensuring compliance withSection 152(6) of Act.

DECLARACTION BY INDEPENDENT DIRECTORS

The Independent Directors of the Company have submitted the declaration ofindependence as required pursuant to the provisions of Section 149(7) of the CompaniesAct 2013 stating that they meet the criteria of Independence as provided under Section149(6). They have also confirmed that they meet the requirements of Independent Directoras mentioned under Regulation 16(1) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.

KEY MANAGERIAL PERSONNEL

Mr. Gaurav Sarup Managing Director Mr. Prashant Sarup and Mr. Siddhant Sarup WholeTime Directors Mr. Phulljit Singh Grover Chief Financial Officer and MS. Shruti GuptaCompany Secretary of the Company are the Key Managerial Personnel as per the provisions ofthe Companies Act 2013 and rules made thereunder.

BOARD MEETINGS

The Directors of your Company met at regular intervals with the gap between twomeetings not exceeding 120 days to review Company's policies and strategies apart from theBoard matters. The notices of the meeting were given in advance. Additional meetings wereheld on the basis of the requirements of the Company. During the year under review theBoard of Directors met fifteen (15) times on 2nd April 2018 3rdMay 2018 5th May 2018 18th May 2018 21st May 201825th May 2018 5th June 2018 11th June 2018 16thJuly 2018 23rd July 2018 3rd August 2018 18thAugust 2018 5th September 2018 14th November 2018 and 11thMarch 2019.

The attendance of each Director at all meetings of Board of Directors held during theFY 2018 - 19:

Date of Board Meetings

Name of Directors

Mr. Gaurav Sarup Mr. Prashant Sarup Mr. Siddhant Sarup Mrs. Archana Sarup Dr. Harish Pal Kumar Mr. Satvinder Singh
02nd April 2018
03rd May 2018
05th May 2018
18th May 2018
21st May 2018
25th May 2018
05th June 2018

11th June 2018

16th July 2018

23rd July 2018

03rd August 2018

18th August 2018

05th September 2018

14th November 2018

11th March 2019

MEETING OF MEMBERS

During the year under review an Extra-ordinary General Meeting of the Company was heldon 23rd May 2018 and an Annual General Meeting of the Company was held on 27thAugust2018 respectively.

COMMITTEES OF BOARD

In accordance with provisions of Companies Act 2013 read with rules and regulationsmade thereunder and further read with SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 your Company has constituted following Committees:

Audit Committee

Nomination and Remuneration Committee Stakeholder Relationship Committee CorporateSocial Responsibility Committee

AUDIT COMMITTEE

The Board of Directors in their meeting held on 5th June 2018 hadconstituted Audit Committee of the Company in compliance with provisions of Section 177 ofthe Companies Act 2013 read with Rule 6 of the Companies (Meetings of Board and itsPowers) Rules 2014 and Regulation 18 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 by consisting following Members/Chairman:

Sr. No. Name of Directors Designation
1 Dr. (Mr.) Harish Pal Kumar Chairman
2 Mr. Satvinder Singh Member
3 Mr. Gaurav Sarup Member

All the Members of Audit Committee are financially literate and have accountingknowledge to interpret and understand the financial statements. The Audit Committeemeetings were held at the Registered Office of the Company and Statutory Auditor ChiefFinancial Officer Internal Auditor and Company Secretary were permanent invitees to themeetings. The Company Secretary of the Company acts as the secretary of the Committee. Noseparate Committee was constituted to deal with matters related to Initial Pubic Offer(IPO) of the Company. All the matters related to IPO were assigned to Audit Committee bythe Board of Directors subject to their approval. During the year under review the AuditCommittee Members met eight (8) times on 9th June 2018 16th July2018 18th July 2018 1st August 2018 17th August2018 10th October 2018 14th November 2018 and 9thMarch 2019 and All members were present in the meetings.

NOMINATION AND REMUNERATION COMMITTEE

The Board of Directors in their meeting held on 5th June 2018 hadconstituted Nomination and Remuneration Committee of the Company in compliance withprovisions of Section 178 of the Companies Act 2013 read with Rule 6 of the Companies(Meetings of Board and its Powers) Rules 2014 and Regulation 19 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 by consisting followingMembers/Chairman:

Sr. No. Name of Directors Designation
1 Dr. (Mr.) Harish Pal Kumar Chairman
2 Mr. Satvinder Singh Member
3 Mrs. Archana Sarup Member

The Nomination and Remuneration Committee has framed a policy on Remuneration ofDirectors Key Managerial

Personnel & Senior Employees called as "Nomination and RemunerationPolicy" which is available on the website of the company and can be accessed athttps://marshallcnc.com/Nomination-Remuneration-Policy.pdf

The Nomination and Remuneration Committee Members met three (3) times on 9thJune 2018 1st August 2018 and 13th November 2018. All memberswere present in the meetings.

STAKEHOLDER RELATIONSHIP COMMITTEE

The Board of Directors in their meeting held on 18th August 2018 hadconstituted Stakeholder Relationship Committee (SRC) of the Company in compliance withprovisions of Section 178 of the Companies Act 2013 read with Rule 6 of the Companies(Meetings of Board and its Powers) Rules 2014 and Regulation 20 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 by consisting followingMembers/Chairman:

Sr. No. Name of Directors Designation
1 Mr. Satvinder Singh Chairman
2 Mr. Prashant Sarup Member
3 Mrs. Archana Sarup Member

The SRC monitors redressal of complaints received from shareholders/ investors withrespect to transfer of shares non-receipt of dividend non-receipt of Annual Reportsinterest payment on Bonds etc. SRC also takes note of number of transfers processedissue of fresh share certificates top shareholders pattern of shareholding etc. Duringthe FY 2018-19 no complaints were received. There was no complaint outstanding as on 31stMarch 2019. Also no instruments of transfer were pending as on 31st March2019. The Company Secretary is the Compliance Officer of the Committee. The Committeemeets as and when required to deal with the investor related matters etc.

The Stakeholder Relationship Committee Members met two (2) times on 13thNovember 2018 and 9th March 2019. All members were present in the meetings.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The Company has attracted criteria for Corporate Social Responsibility (CSR) as its netprofit was over 5 crores pursuant to the provisions of Section 135 of the Companies Act2013 including Rules framed thereunder.

As per requirement of Section 135 of the Companies Act 2013 read with Schedule VII ofthe said Act and further read with Companies (Corporate Social Responsibility) Rules2014 the Company had constituted "Corporate Social Responsibility (CSR)Committee" in the Board Meeting held on 14th November 2018 consistingfollowing Members/Chairman:

Sr. No. Name of Directors Designation
1 Mr. Gaurav Sarup Chairman
2 Mr. Siddhant Sarup Member
3 Mr. Satvinder Singh Member

During the year under review CSR Committee Members met once on 9th March2019 and had identified and recommended to the Board certain projects/activities on whichCSR expenditure for the financial year 2018-19 can be made. The Board of Director approvedthe same in Board Meeting held on 11th March 2019. The CSR policy is availableon company's website and can be accessed at linkhttps://marshallcnc.com/wp-content/uploads/2019/04/CSR-Policy-compressed.pdf. The Reporton CSR Activities is annexed herewith and forms part of this report.

APPOINTMENT AND REMUNERATION POLICY

The Board on the recommendation of the Nomination and Remuneration Committee has frameda policy for Appointment and Remuneration of Directors Senior Management and otheremployees as provided under Section 178(3) of the Companies Act 2013. The Company'sPolicy of Appointment and Remuneration includes criteria for determining QualificationPositive Attributes Independence of Directors and other matters as required underSection 178(3) of the Companies Act 2013. The policy also laid down the criteria fordetermining the remuneration of directors key managerial personnel and other employees.The Appointment and Remuneration Policy of the Company is available on the Company'swebsite and can be accessed at link:https://marshallcnc.com/Nomination-Remuneration-Policy.pdf.

BOARD EVALUATION

The provisions of the Companies Act 2013 and Regulation 17 of SEBI (ListingObligations and Disclosure Requirement) Regulations 2015 mandate that a formal annualperformance evaluation is to be made by the Board of its own performance and that of itsCommittee and individual Directors and Schedule IV of the Companies Act 2013 states thatperformance evaluation of the Independent Director shall be done by Directors excludingthe Directors being evaluated. The Board carried out a formal annual performanceevaluation as per criteria/framework laid down by the Nomination and RemunerationCommittee and adopted by the Board. The evaluation was carried out through a structuredevaluation process to evaluate the performance of individual Directors including theChairman of the Board. They were evaluated on parameters such as their educationknowledge experience expertise skills behaviour leadership qualities level ofengagement and contribution independence of judgement decision making ability forsafeguarding the interest of the Company stakeholders and its shareholders. Theperformance evaluation of the Independent Directors was carried out by the entire Board.The performance evaluation of the Chairman and the Non-Independent Directors were carriedout by the Independent Directors. The outcome of the Board Evaluation for the financialyear 2018-19 was discussed by the Nomination and Remuneration Committee at the meetingheld on 29th May 2019 and the Board at the meeting held on 30thMay 2019. The Board was satisfied with evaluation process and approved the evaluationresults thereof.

REMUNERATION TO DIRECTORS/EMPLOYEES AND RELATED ANALYSIS

During the year under review no employee of the Company received salary in excess ofthe limits as prescribed under the Act. Accordingly no particulars of employees are beinggiven pursuant to Section 134 of the Companies Act 2013 read with Rule 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014. The detailspertaining to the ratio of the remuneration of each director to the median employee‘sremuneration and other prescribed details as required under section 197(12) of theCompanies Act 2013 read with rule 5(1) of the Companies (Appointment And Remuneration ofManagerial Personnel) Rules 2014 are annexed herewith as Annexure - A and forms part ofthis report.

DIRECTORS' RESPONSIBILITY STATEMENT

To the best of knowledge and belief and according to the information and explanationsobtained by them your Directors make the following statement pursuant to provision ofSection 134(3)(c) of the Companies Act 2013 that:

(a) in the preparation of the accounts for the financial year ended 31stMarch 2019 the applicable accounting standards have been followed along with properexplanation relation to material departures;

(b) the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to a give true andfair view of the state of affairs of the Company at the end of the said financial year andof the profit and loss of the company for the said financial year;

(c) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

(d) the Directors had prepared the accounts for the year ended 31st March2019 on a going concern basis;

(e) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

(f) the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and operating effectively.

INTERNAL FINANCIAL CONTROLS

The Company has a proper and adequate system of internal control to ensure that allassets are safeguarded properly utilized and protected against loss from un-authorizeduse or disposition and those transactions are authorized and recorded by the concerneddepartments properly and reported to the Audit Committee/Board correctly.

The Company has also in place adequate internal financial controls with reference tofinancial statement. Such controls are tested from time to time and no re-portablematerial weakness in the design or operation has been observed so far.

DISCLOSURES RELATING TO SUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES

During the year under review your company did not have any subsidiary associate andjoint venture company.

DEPOSITS

During the year under review your company neither accepted any deposits nor there anyoutstanding at the beginning of the year which were classified as deposit in term ofSection 73 to 76 of the Companies Act 2013 read with the Companies (Acceptance ofDeposit) Rules 2014 and hence requirements of furnishing details of deposits which arenot in compliance with Chapter V of the Companies Act 2013 is not applicable.

PARTICULARS OF LOANS GUARANTEES INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT2013

During the year under the review the Company has not given any loan guaranteeprovided security to any person or other body corporate or acquired by the way ofsubscription purchase or otherwise the securities of anybody corporate exceeding thelimit prescribed under section 186 of the Companies Act 2013.

PARTICULAS OF CONTRACTS OR ARRANGMENTS WITH RELATED PARTIES

All related party transactions entered into during financial year 2018-19 were on anarm's length basis and in the ordinary course of business. Accordingly the disclosure ofrelated party transactions as required under Section 134(3)(h) of the Act in Form AOC-2is not applicable to the Company.

The details of the transactions with related parties are provided in the accompanyingfinancial statements.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Corporate Social Responsibility Committee (CSR Committee) had formulated andrecommended to the Board a Corporate Social Responsibility Policy (CSR Policy) indicatingthe activities to be undertaken by the Company and the same was duly approved by theBoard. The CSR Policy can be accessed on the website of the Company at linkhttps://marshallcnc.com/wp-content/uploads/2019/04/CSR-Policy-compressed.pdf.

During the year under review the Company had spent an amount of Rs. 131000 (RupeesOne Lakh Thirty-One Thousand) which constitute 2% of the average net profit made duringthe three immediate preceding financial years on CSR activities identified by CSRCommittee. The disclosure in respect of the existing CSR Activities pursuant to Section134(3) of the Companies Act 2013 read with Rule 9 of the Companies (Accounts) Rules 2014and Companies (Corporate Social Responsibility) Rules 2014 is annexed as Annexure - Bherewithand forms part of this Report.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information pertaining to conservation of energy technology absorption foreignexchange earnings and outgo as required under Section 134(3)(m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2015 is annexed as Annexure -C herewith and forms part of this Report.

RISK MANAGEMENT

The Company has adopted Risk Management Policy which has been approved by the Board ofDirectors of the Company. The aim of the Risk Management Policy is to maximizeopportunities in all activities and to minimize adversity. The policy includes identifyingtypes of risks and its assessment risk handling and monitoring and reporting which inthe opinion of the Board may threaten the existence of the Company. The Risk Managementpolicy can be accessed on the Company‘s website at the link:https://marshallcnc.com/RISK-MANAGEMENT-POLICY.pdf

ESTABLISHMENT OF VIGIL MECHANISM / WHISTLE BLOWER POLICY

Your Company promotes ethical behaviour in all the business activities and has put inplace a mechanism wherein employees are free to report illegal or unethical behaviouractual or suspected fraud or violation of Company's Code of Conduct or CorporateGovernance Policies or any improper activity to the Chairman of the Audit Committee of theCompany. The whistle blower policy is duly communicated with your Company. The functioningof the Vigil Mechanism is reviewed by the Audit Committee from time to time. The VigilMechanism/Whistle Blower Policy can be accessed on the Company‘s website at the link:https://marshallcnc.com/WHISTLE-BLOWER-POLICY.pdf

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS AND COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

Marposs India Private Limited a company incorporated under the provisions of CompaniesAct 1956 having Registered Office at J-30 1st Floor Lajpat Nagar-III New Delhi-110024in its capacity as operational creditor had filed a petition on 10th January2018 under "Insolvency and Bankruptcy Code 2016" (IBC) with Hon'ble NationalCompany Law Tribunal Chandigarh Bench (NCLT). The matter is sub-judice as on date.

No other significant and material orders have been passed by any Regulatory or Court orTribunal which can impact on the going concern status and the Company's operations infutures.

AUDITORS STATUTORY AUDITORS

M/s. S. Sood & Co. Chartered Accountants Firm Registration No. 010801N wereappointed as Statutory Auditor of the Company by the Members of the Company for the termof five consecutive years starting from the conclusion of the 22nd AnnualGeneral Meeting up to conclusion of the 27th Annual General Meeting of theCompany to be held in the financial year 2021-22. As per the provision of Section 139(1)of the Companies Act 2013 the appointment of Statutory Auditors was to be ratified bythe Members at every Annual General Meeting of the Company. The Ministry of CorporateAffair vide its notification dated 7th May 2018 has omitted the firstprovision of Section 139 of the Companies Act 2013 in sub section (1). Accordingly theBoard has not proposed any resolution for the ratification of Appointment of StatutoryAuditors by the Shareholders of the Company.

AUDIT REPORT

The Statutory Auditors have submitted Audit Report on the Financial Statements of theCompany for the financial year ended 31st March 2019. The observations andcomments given by the Auditors in their Report read together with the Notes to theAccounts are self-explanatory and require no comments from the Board.

SECRETARIAL AUDITOR

As your Company got listed on NSE EMERGE Platform on 7th September 2018the provisions of Section 204 of the Companies Act 2013 read with relevant rules ifany became applicable to the Company. The Board of Directors pursuant to provisions ofSection 204 of the Companies Act 2013 read with Rule 9 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 had appointed M/s. Rajeev Bhambri &Associates Company Secretaries in practice having Certificate of Practice No. 9491 asSecretarial Auditor of Company for the financial year 2018-19.

SECRETARIAL AUDIT REPORT

The Secretarial Audit Report for the financial year ended 31st March 2019is annexed as Annexure - D herewith in the prescribed format i.e. MR-3 and forms part ofthis Report. The observation of Secretarial Auditor is self-explanatory and do not requirefurther explanation.

INTERNAL AUDITOR

As your Company got listed on NSE EMERGE Platform on 7th September 2018the provisions of Section 138 of the Companies Act 2013 read with relevant rules if anybecame applicable to the Company. The Board of Directors pursuant to provisions ofSection 138 of the Companies Act 2013 read with Rule 13(1) of the Companies (Accounts)Rules 2014 had appointed Mr. Abhimanyu Kumar Bachelor of Technology as an InternalAuditor of Company for the financial year 2018-19.

BOARD'S RESPONSE ON AUDITOR'S QUALIFICATION RESERVATION OR ADVERSE REMARKS ORDISCLAIMER MADE

There are no qualification reservations or adverse remarks made by the statutoryauditors in their report for the year ended 31st March 2019. During the yearthere were no instances of frauds reported by auditors under Section 143(12) of theCompanies Act 2013.

COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS

Your Company has complied with Secretarial Standards issued by the Institute of CompanySecretaries of India on Board Meetings and General Meetings.

CORPORATE INSOLVENCY RESOLUTION PROCESS UNDER INSOLVENCY AND BANKRUPTCY CODE 2016

Marposs India Private Limited a company incorporated under the provisions of CompaniesAct 1956 having Registered Office at J-30 1st Floor Lajpat Nagar-III New Delhi-110024in its capacity as operational creditor had filed a petition on 10th January2018 under "Insolvency and Bankruptcy Code 2016" (IBC) with Hon'ble NationalCompany Law Tribunal Chandigarh Bench (NCLT). The matter is sub-judice as on date.

EXTRACT OF ANNUAL RETURN

The Extract of Annual Return of the Company pursuant to the provisions of Section 92read with Rule 12 of the Companies (Management and Administration) Rules 2014 for thefinancial year 2018-19 in the Form MGT-9 is annexed herewith as Annexure E and forms partof this Report. Further The Annual Return of the Company is available on Company'swebsite and can be accessed at the link: https://marshallcnc.com/extract-of-annual-return

OTHER DISCLOSURES- CORPORATE POLICIES CORPORATE SOCIAL RESPONSIBILITY POLICY

Pursuant to the provisions of Section 135 of the Companies Act 2013 read withCompanies (Corporate Social Responsibility Policy) Rules 2014 the CSR Committee hadformulated the CSR Policy which has been adopted by the Board. The CSR Policy outlines thevarious programs/projects/activities to be undertaken by the Company as laid down inschedule VII of the Companies Act 2013. The CSR policy can be accessed on theCompany‘s website at the link:https://marshallcnc.com/wp-content/uploads/2019/04/CSR-Policy-compressed.pdf

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

The Board members are provided with necessary documents/brochures reports and internalpolicies to enable them to familiarize with the Company's procedures and practices. Thedetails of such familiarization programs for Independent Directors are posted on theCompany's website and can be accessed at link:https://marshallcnc.com/Familiarization-Programme-Independent-Directors.pdf

POLICY FOR DETERMINATION OF MATERIALITY

Pursuant to Regulation 30(4) read with schedule III of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Board had adopted policy and procedurewith regard to determination of materiality of event. The policy for determination ofmateriality is available on Company's website and can be accessed at the link:https://marshallcnc.com/Policy-for-Determination-of-Materiality.pdf

POLICY FOR PRESERVATION OF DOCUMENTS

The Board of Directors in their meeting held on 14th November 2018 hadapproved and adopted policy for Preservation of documents. The policy segregates thedocuments to be preserved permanently and documents to be preserved at least for a periodof eight years as per requirement of law. The policy for preservation of documents isavailable on Company's website and can be accessed at link:https://marshallcnc.com/Policy-on-Preservation-of-Documents.pdf

INSIDER TRADING POLICY

In order to prevent Insider Trading in securities of the company on basis ofUnpublished Price Sensitive Information the Board of Directors had approved and adoptedCode of Practice & Procedure for Fair Disclosure in accordance with SEBI (Prohibitionof Insider Trading) Regulations 2015 issued by Securities Exchange Board of India (SEBI)vide its notification dated 15th January 2015. The SEBI vide its notificationdated 31st December 2018 has amended the same which is now hereby referred asSEBI (Prohibition of Insider Trading)(Amendment) Regulations 2018 and put in place aframework for prohibition of insider trading in securities and the same has been approvedand adopted by the Board of Directors in their meeting held on 11th March2019. The framework adopted by the Company to prevent insider trading in securities of theCompany is available on Company's website and can be accessed at thelink:https://marshallcnc.com/wp-content/uploads/2019/04/Code_of_Conduct_for_Prohibition_of_Insider_Trading_compressed.pdf

RELATED PARTY TRANSACTION POLICY

Pursuant to the requirements of Regulation 23 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board had approved a policy on Materialityof Related Party Transactions and Dealing with Related Party Transactions. The policyregulates the transaction between the Company and its Group/Associates Companies if anyand related parties. The Related Party Transaction Policy is available on Company'swebsite and can be accessed at the link: https://marshallcnc.com/Transaction_Policy.pdf

CEO AND CFO CERTIFICATION

Since your Company's securities are listed on NSE EMERGE- SME Platform by virtue ofRegulation 15 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015the compliance with the CEO and CFO Certification provisions as specified under Regulation17(8) is not applicable to the Company. But for good corporate governance the Company hasreceived a certificate as required under Regulation 17(8) of SEBI (Listing Obligations andDisclosure Requirements) Regulation 2015 duly signed by Mr. Prashant Sarup Whole TimeDirector and Mr. Phulljit Singh Grover Chief Financial Officer of the Company which wasplaced before the Board in their meeting held on 30th May 2019 which isannexed herewith as Annexure F and forms the part of this report.

DEMATERIALISATION OF SECURITIES

As on 31st March 2019 99.99% of the total Equity Share Capital has beendematerialized. The shareholder (s) who have not gone in for dematerialization of sharestill date are requested to opt for dematerialization of the shares at the earliest. YourCompany has appointed M/s Bigshare Services Pvt. Ltd. as Registrar & Share TransferAgent of the Company. Accordingly all the shareholders Investors Members of the StockExchanges Depository Participants and all other concerned are requested to send allcommunication in respect of share transfer demat/remat change of address etc. to ourregistrar at below mentioned address: M/s. Bigshare Services Pvt. Ltd. 302 Kushal Bazar32-33 Nehru Place New Delhi-110019 E-mail Address: yksinghal@bigshareonline.com.

SEBI vide its Gazetted notification dated 8th June 2018 amended theRegulation 40(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 whereby it has been provided that except in case of transmission or transposition ofsecurities requests for effecting transfer of securities shall not be processed unlessthe securities are held in dematerialized form with the Depository. The said amendment hasbeen come into force with effect from 1st April 2019. Therefore all themembers are hereby requested to get their shares in dematerialized at earliest.

DISCLOSURE OF ACCOUNTING TREATMENT

In the preparation of the financial statements the Company has followed the AccountingStandards referred to in Section 133 of the Companies Act 2013. The significantaccounting policies which are consistently applied are set out in the Notes to theFinancial Statements.

SEPARATE MEETING OF INDEPENDENT DIRECTORS

The Company's Independent Directors held their 1st meeting on 25thMarch 2019 without the attendance of Non-Independent Directors and members of themanagement. All Independent Directors were present at the meeting. They reviewed i. theperformance of non-Independent directors and the Board as a whole; ii. the performance ofthe Chairman of the Company taking into account the views of Executive Directors and Non-Executive Directors; iii. Assessed the quality and timeliness of the flow of informationbetween the company's Management and the Board which is necessary for the Board toeffectively and reasonably perform their duties.

ENVIRONMENT HEALTH AND SAFETY

Your Company considers it is essential to protect the Earth and limited naturalresources as well as the health and well-being of every person. The Company strives toachieve safety health and environmental excellence in all aspects of its businessactivities. Acting responsibly with a focus on safety health and the environment is apart of the Company's DNA.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

Your Company lays emphasis on competence and commitment of its human capitalrecognizing its pivotal role for organization growth. During the year the Companymaintained a record of peaceful employee relations.

Your Directors wish to place on record their appreciation for the commitment shown bythe employees throughout the year.

STATEMENT OF DEVIATION(S) OR VARIATION(S)

There is no deviation(s) or variation(s) in utilizing of public issue proceeds. Thefunds raised under Initial Pubic Offer (IPO) have been utilized only towards the purposesas stated in objects clause of the offer document. A certificate duly certified byStatutory Auditor of the Company regarding utilization of IPO proceeds has been placedbefore the Stakeholder Relationship Committee in their meeting held on 29thMay 2019 and thereafter Audit Committee and Board Meetings held on 30th May2019.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the Company's performance during the yearunder review as stipulated under the Regulation 34(2)(e) of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 is annexed herewith as Annexure G andforms part of this report.

CORPORATE GOVERNANCE

Since the Company's securities are listed on NSE EMERGE Platform by virtue ofRegulation 15 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015the compliance with the Corporate Governance provisions as specified in regulations 17 to27 and clauses (b) to (i) of sub-regulation (2) of Regulation 46 and para C D and E ofSchedule V are not applicable to the Company. Hence Corporate Governance Report does notform part of this report.

SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT2013

The Company has zero tolerance for sexual harassment for women at workplace and hasadopted a policy against sexual harassment in line with Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 and the rules framedthereunder. The Company has complied with the provisions relating to the constitution ofInternal Complaint Committee under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013. During the financial year 2018-19 theCompany has not received any complaints on sexual harassment and hence no compliantremains pending as on 31st March 2019.

ACKNOWLEDGMENT

Your Directors thanks all the Stakeholders including investors customers vendorsbankers auditors consultants and advisers for their continued support during the year.We are place on record our appreciation of the contributions of our employees at all thelevels.

The Management is deeply grateful for the confidence and faith that all thestakeholders have reposed in them. Your Directors look forward for their continued supportin the future for the consistent growth of the Company.

On the behalf of the Board
Marshall Machines Limited
Sd/- Sd/-
Gaurav Sarup Prashant Sarup
Place: Ludhiana Managing Director Whole Time Director
Date: 03/09/2019 (DIN: 00777486) (DIN: 01257440)

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