To

The Members,

Marshall Machines Limited,

Your Directors have great pleasure of presenting the 29th Annual Report on the affairs of the Company for the financial year ended 31st March, 2023.

FINANCIAL SUMMARY OF THE COMPANY

The summary of Company's Financial Results for the financial year ended 31st March, 2023 is as under:

(Rs. In Lakhs)

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 the earnings in the Company, hence, the Board has not recommended any dividend on the equity share capital of the Company.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

Since there was no dividend declared and paid last year, the provisions of Section 125 of the Companies Act, 2013 does not apply.

OPERATIONAL REVIEW AND STATE OF AFFAIR

Yours Company is engaged in a single segment i.e. developing, manufacturing and marketing of Machines Tool Equipment including wide range of single spindle, patented double and four spindle CNC machines, automated robotic solutions and patent pending IOTQ suit of intelligent equipment. Therefore, disclosure requirements as required under Accounting Standard (AS)-17 issued by Institute of Chartered Accountant of India, New Delhi, are not applicable.

During the period under review, your Company has reported total Income of Rs. 3699.89lakhs for the financial year ended 31^st March, 2023 as compared to Rs. 6046.31 lakhs in the previous

year and the net profit / Loss for the year under review amounted to Rs. -689.95 lakhs in the current year as compared to Rs. -313.57 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 year under review.

MATERIAL CHANGES AND COMMITMENT, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There were No Material changes and commitment affecting the financial position of the Company in the financial year to which these financial statements relate.

CHANGES IN SHARE CAPITAL

There is no change in the Share capital of the company during the Financial Year 2022-23.

DISCLOSURE RELATING TO EQUITY SHARES WITH DIFFERENTIAL RIGHTS

Your Company has not issued any equity shares with differential rights during the year under 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 review and hence no information as per provisions of Rule 8(13) of the Companies (Share Capital and 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 Stock Purchase 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 Seven Directors as on 31^st March, 2023, viz, Mr. Gaurav Sarup-Managing Director, Mr. Prashant Sarup-Whole Time Director cum CFO, Mr. Siddhant Sarup-Whole Time Director, Mrs. Archana Sarup-Whole Time Director, Mrs. Rita Aggarwal – Non-executive Independent Director and Mr. Satvinder Singh - Independent Directors, Mr. Anil Singla – Non-Executive Independent Director.

The Board, therefore, presently comprises of Eight Directors.

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

In order to ensure compliance with Section 152(6) of the Act, the Board has considered Mr. Prashant Sarup, Wholetime Director who shall retire by rotation at the ensuing AGM and being eligible, offers himelf for re-appointment, for ensuring compliance with Section 152(6) of Act.

DECLARACTION BY INDEPENDENT DIRECTORS

The Independent Directors of the Company have submitted the declaration of independence, as required pursuant to the provisions of Section 149(7) of the Companies Act, 2013, stating that they meet the criteria of Independence as provided under Section 149(6). They have also confirmed that they meet the requirements of Independent Director as mentioned under Regulation 16(1) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

KEY MANAGERIAL PERSONNEL

Mr. Gaurav Sarup-Managing Director, Mr. Prashant Sarup-Whole Time Director cum CFO, Mr. Siddhant Sarup-Whole Time Director, Mrs. Archana Sarup-Whole Time Director and Ms. Gauri Agarwal-Company Secretary of the Company are the Key Managerial Personnel as per the provisions of the Companies Act, 2013 and rules made thereunder.

BOARD MEETINGS

The Directors of your Company met at regular intervals with the gap between two meetings not exceeding 120 days to review Company's policies and strategies apart from the Board matters. The notices of the meeting were given in advance. Additional meetings were held on the basis of the requirements of the Company. During the year under review, the Board of Directors met Eleven (11) times on:

MEETING OF MEMBERS

During the year under review, an Annual General Meeting of the Company was held on 30^th

September, 2022 respectively.

COMMITTEES OF BOARD

In accordance with provisions of Companies Act, 2013 read with rules and regulations made thereunder and further read with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has constituted following Committees:

• Audit Committee
• Nomination and Remuneration Committee
• Stakeholder Relationship Committee
• Corporate Social Responsibility Committee
• Finance Committee

APPOINTMENT AND REMUNERATION POLICY

The Board on the recommendation of the Nomination and Remuneration Committee has framed a policy for Appointment and Remuneration of Directors, Senior Management and other employees as provided under Section 178(3) of the Companies Act, 2013. The Company's Policy of Appointment and Remuneration includes criteria for determining Qualification, Positive Attributes, Independence of Directors and other matters, as required under Section 178(3) of the Companies Act, 2013. The policy also laid down the criteria for determining the remuneration of directors, key managerial personnel and other employees. The Appointment and Remuneration Policy of the Company is available on the Company's website and can be accessed at link:

https://marshallcnc.com/wp-content/uploads/2020/11/Nomination-and-Remuneration- Policy.pdf

BOARD EVALUATION

The provisions of the Companies Act, 2013 and Regulation 17 of SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015, mandate that a formal annual performance evaluation is to be made by the Board of its own performance and that of its Committee and individual Directors and Schedule IV of the Companies Act, 2013 states that performance evaluation of the Independent Director shall be done by Directors excluding the Directors being evaluated.

The Board carried out a formal annual performance evaluation as per criteria/framework laid down by the Nomination and Remuneration Committee and adopted by the Board. The evaluation was carried out through a structured evaluation process to evaluate the performance of individual Directors including the Chairman of the Board. They were evaluated on parameters such as their education, knowledge, experience, expertise, skills, behaviour, leadership qualities, level of engagement and contribution, independence of judgement, decision making ability for safeguarding the interest of the Company, stakeholders and its shareholders. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non-Independent Directors were carried out by the Independent Directors in their meeting held on 25.03.2023. The Board was satisfied with evaluation process and approved the evaluation results thereof.

REMUNERATION TO DIRECTORS/EMPLOYEES AND RELATED ANALYSIS

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

DIRECTORS' RESPONSIBILITY STATEMENT

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

1. in the preparation of the accounts for the financial year ended 31^st March, 2023, the applicable accounting standards have been followed along with proper explanation relation to material departures;
2. the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to a give true and fair view of the state of affairs of the Company at the end of the said financial year and of the profit and loss of the company for the said financial year;
3. 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;
4. the Directors had prepared the accounts for the year ended 31^st March, 2022 on a going concern basis;
5. 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.
6. the Directors had laid down internal financial controls to be followed by the Company 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 all assets are safeguarded, properly utilized and protected against loss from un-authorized use or disposition and those transactions are authorized and recorded by the concerned departments properly and reported to the Audit Committee/Board correctly.

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

However, the statutory auditor has reported that there is no proper quarterly internal audit plan and documentation of the quarterly audit available. They also reported that the internal Auditor has not covered many areas for audit i.e. Accounting, Financing, Compliance and Information Technology (IT systems). The items stated and suggested by the statutory auditor have been taken a note of and the Company shall implement such practices from here onwards.

DISCLOSURES RELATING TO SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES

During the year under review, your company did not have any subsidiary, associate and joint venture company.

DEPOSITS

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

PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013

During the year under the review, the Company has not given any loan, guarantee, provided security to any person or other body corporate or acquired by the way of subscription, purchase or otherwise, the securities of anybody corporate, exceeding the limit 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 2022-23 were on an arm's length basis and in the ordinary course of business. Accordingly, the disclosure of related party transactions, as required under Section 134(3)(h) of the Act in Form AOC-2 is not applicable to the Company.

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

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Corporate Social Responsibility Committee (CSR Committee) had formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, and the same was duly approved by the Board. The CSR Policy can be accessed on the website of the Company at link https://marshallcnc.com/wp-content/uploads/2020/11/CSR-Policy.pdf

During the year under review, the provisions were not applicable to the Company.

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

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2015 is annexed as Annexure - D herewith and forms part of this Report.

RISK MANAGEMENT

The Company has adopted Risk Management Policy which has been approved by the Board of Directors of the Company. The aim of the Risk Management Policy is to maximize opportunities in all activities and to minimize adversity. The policy includes identifying types of risks and its assessment, risk handling and monitoring and reporting, which in the opinion of the Board may threaten the existence of the Company. The Risk Management policy can be accessed on the Company‘s website at the link:

https://marshallcnc.com/wp-content/uploads/2020/11/RISK-MANAGEMENT-POLICY.pdf

ESTABLISHMENT OF VIGIL MECHANISM / WHISTLE BLOWER POLICY

Your Company promotes ethical behaviour in all the business activities and has put in place a mechanism wherein employees are free to report illegal or unethical behaviour, actual or suspected fraud or violation of Company's Code of Conduct or Corporate Governance Policies or any improper activity to the Chairman of the Audit Committee of the Company. The whistle blower policy is duly communicated with your Company. The functioning of the Vigil Mechanism is reviewed by the Audit Committee from time to time. The Vigil Mechanism/Whistle Blower Policy can be accessed on the Company‘s website at the link: https://marshallcnc.com/wp-content/uploads/2020/11/WHISTLE-BLOWER-POLICY.pdf

AUDITORS STATUTORY AUDITORS

M/s. S. Sood & Co., Chartered Accountants, Firm Registration No. 010801N, were appointed as Statutory Auditor of the Company by the Members of the Company, for the term of five consecutive years starting from the conclusion of the 22^nd Annual General Meeting up to conclusion of the 27th Annual General Meeting of the Company to be held in the year 2021. Thereafter they were reappointed in the years 2021 and 2022.

As per the provision of Section 139(1) of the Companies Act, 2013, M/s. S. Sood & Co., Chartered Accountants, Firm Registration No. 010801N to be re-appointed for a period of One Year, commencing from 29th Annual General Meeting to be held in the year 2023 till the conclusion of 30th Annual General Meeting to be held in the year 2024, at a remuneration to be decided by the Managing Director of the company.

AUDIT REPORT

The Statutory Auditors have submitted Audit Report on the Financial Statements of the Company for the financial year ended 31^st March, 2023. The observations and comments given by the Auditors in their Report read together with the Notes to the Accounts are self- explanatory except the following:

1. The Company has not disclosed the impact of pending litigations on its financial position in its standalone financial.

Explanation / Comment from Board: The Directors are of the opinion that there will not be any financial liability in the said cases in view of the nature of these litigations.

2. Creditors include MSME creditors amounting to Rs. 1.33 Crores which have been identified by the company as due but not paid within stipulated time period under Micro Small and Medium Enterprises Development Act , 2006 ( MSMED).

Explanation / Comment from Board: there was some dispute in concerned transactions & out of above major amount has been settled till date.

3. Income Tax payable on self-assessment (u/s 140A of Income Tax Act, 1961) of Rs. 78.89 Lacs for A.Y 2020-21 and Interest thereon is outstanding for more than six months. Explanation / Comment from Board: Delay in payment was due to circumstances imposed as a result of the 2nd COVID wave.
4. The Company has defaulted in the repayment of loans or borrowings to some banks, financial institutions 31.03.2023.

Explanation / Comment from Board: Moratorium given by Bank/NBFC's in 2022 & Delay in payment was due to circumstances imposed as a result of the 2nd COVID wave and the financial imbalance that followed the company thereafter.

SECRETARIAL AUDITOR

The Board of Directors, pursuant to provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, had appointed M/s Bhambri & Associates, Company Secretaries in practice, having Certificate of Practice No. 22626 as Secretarial Auditor of Company for the financial year 2023-24 and onwards.

SECRETARIAL AUDIT REPORT and ANNUAL SECTREARIAL COMPLIANCE REPORT

The Secretarial Audit Report for the financial year ended 31^st March, 2023 is annexed as Annexure - E herewith in the prescribed format i.e. MR-3 and forms part of this Report.

Also with the Annexure – F another certificate regarding "Certificate of Non-Disqualification of Directors" as per schedule V of the SEBI LODR Regulations is annexed.

The Annual Secretarial Compliance Report is annexed as Annexure – J

The following were the observations of Secretarial Auditor which are commented and explained by the Board as under:

1. Creditors include MSME creditors amounting to Rs. 1.33 Crores which have been identified by the company as due but not paid within stipulated time period under Micro Small and Medium Enterprises Development Act, 2006 (MSMED).
2. The Company had not complied to the following LODR Regulations in a timely manner for which fine was levied by the Stock Exchange (NSE):
1. Payment of Annual Listing Fee 2022-23
2. Regulation 29 Intimation of Board Meeting for Financial Results for Quarter ended 30.06.2022.
3. Regulation 29 Intimation of Board Meeting for Financial Results for Quarter ended 31.12.2022.
4. Regulation 33 Financial results for the Quarter ended 31.03.2022.
5. Regulation 33 Financial Results for the Quarter ended 30.09.2022.
6. Regulation 33 Financial Results for the Quarter ended 31.12.2022.
7. Updation of the Website.
3. The Company had not captured the said events in the SDD software in a timely manner for Financial Results for the Quarter Ending 31.03.2022 and 30.06.2022.
4. The Company had not filed various eforms with the ROC
5. The Company has not been regular in depositing its Statutory Dues.
6. Company has not realized its Foreign Debtor amounting to Rs.105.07 Lacs within the time prescribed under the regulations of the FEMA Act, 1999.
7. The Company has disclosed impact of its pending litigations in the books of accounts except interest on such pending amounts which may arise in future has not been disclosed
8. Income Tax payable on self-assessment (u/s 140A of Income Tax Act,1961) of Rs.

94.50 Lacs for A.Y 2020-21, TDS amounting to Rs. 35.50 Lacs, Provident Fund amounting to Rs. 12.45 Lacs and ESI amounting to Rs. 3.50 Lacs along with Interest thereon which are outstanding for more than six months.

9. The company is not regular in repayment of its loans and interest thereon to the financial institutions and banks. The loan installments have been delayed many times during the year.
10. Accounts of the Company with various lenders have been classified as NPA as on 31.03.2023.

Explanation / Comment from Board:

The company had paid the fee at a later date and the delays have been caused due to employee turnover being high in the company due to financial crunch.

Some of the events were missed out inadvertently and were recorded at a later date to comply The forms were filed but the payment bounced back and were rendered not filed

Due to Financial problems most of the issues mentioned above have occured. The management has been actively looking for ways to counter the financial problems

INTERNAL AUDITOR

The Board of Directors, pursuant to provisions of Section 138 of the Companies Act, 2013 read with Rule 13(1) of the Companies (Accounts) Rules, 2014, had re-appointed Mr. Suresh Kumar, Bachelor of Technology - PAN EHQPK7835A, as an Internal Auditor of Company for the financial year 2023-24 and onwards.

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

There are NO qualification, reservations or adverse remarks made by the statutory auditors in their report for the year ended 31^st March, 2023. During the year, there were no instances of frauds reported by auditors under Section 143(12) of the Companies Act, 2013.

COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS

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

ANNUAL RETURN

The Annual Return of the Company, pursuant to the provisions of Companies act 2013 for the financial year 2021-22 (Form MGT-7) is available on Company's website and can be accessed at the link:

https://marshallcnc.com/wp-content/uploads/2023/08/MGT-7-Marshall-2021-22.pdf

CORPORATE SOCIAL RESPONSIBILITY POLICY

Pursuant to the provisions of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the CSR Committee had formulated the CSR Policy which has been adopted by the Board. The CSR Policy outlines the various programs/projects/activities to be undertaken by the Company as laid down in schedule VII of the Companies Act, 2013. The CSR policy can be accessed on the Company‘s website at the link:

https://marshallcnc.com/wp-content/uploads/2020/11/CSR-Policy.pdf

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

The Board members are provided with necessary documents/brochures, reports and internal policies to enable them to familiarize with the Company's procedures and practices. The details of such familiarization programs for Independent Directors are posted on the Company's website and can be accessed at link:

https://marshallcnc.com/wp-content/uploads/2020/11/Familiarization-Programme-for- Independent-Directors.pdf

POLICY FOR DETERMINATION OF MATERIALITY

Pursuant to Regulation 30(4) read with schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board had adopted policy and procedure with regard to determination of materiality of event. The policy for determination of materiality is available on Company's website and can be accessed at the link: https://marshallcnc.com/wp-content/uploads/2020/11/Policy-for-Determination-of- Materiality.pdf

POLICY FOR PRESERVATION OF DOCUMENTS

The policy segregates the documents to be preserved permanently and documents to be preserved at least for a period of eight years as per requirement of law. The policy for preservation of documents is available on Company's website and can be accessed at link: https://marshallcnc.com/wp-content/uploads/2020/11/Policy-on-Preservation-of- Documents.pdf

INSIDER TRADING POLICY

In order to prevent Insider Trading in securities of the company on basis of Unpublished Price Sensitive Information, the Board of Directors had approved and adopted Code of Practice & Procedure for Fair Disclosure in accordance with SEBI (Prohibition of Insider Trading) Regulations, 2015, issued by Securities Exchange Board of India (SEBI) vide its notification dated 15^th January, 2015. The SEBI vide its notification dated 31^st December, 2018 has amended the same which is now hereby referred as SEBI (Prohibition of Insider Trading)(Amendment) Regulations, 2018 and put in place a framework for prohibition of insider trading in securities. The framework adopted by the Company to prevent insider trading in securities of the Company is available on Company's website and can be accessed at the link:

https://marshallcnc.com/wp- content/uploads/2019/04/Code_of_Conduct_for_Prohibition_of_Insider_Trading_compresse d.pdf

RELATED PARTY TRANSACTION POLICY

Pursuant to the requirements of Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board had approved a policy on Materiality of Related Party Transactions and Dealing with Related Party Transactions. The policy regulates the transaction between the Company and its Group/Associates Companies, if any, and related parties. The Related Party Transaction Policy is available on Company's website and can be accessed at the link:

https://marshallcnc.com/wp-content/uploads/2020/11/Related-Party-Transaction-Policy.pdf

CEO AND CFO CERTIFICATION

By virtue of Regulation 15 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the compliance with the CEO and CFO Certification provisions as specified under Regulation 17(8) is done by the Company. The Company has received a certificate as

required under Regulation 17(8) of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 duly signed by Mr. Gaurav Sarup, Managing Director and Mr. Prashant Sarup, Whole Time Director cum CFO which is annexed herewith as Annexure – G and forms the part of this report.

DISCLOSURE OF ACCOUNTING TREATMENT

In the preparation of the financial statements, the Company has followed the Accounting Standards referred to in Section 133 of the Companies Act, 2013. The significant accounting policies which are consistently applied are set out in the Notes to the Financial Statements.

SEPARATE MEETING OF INDEPENDENT DIRECTORS

The Company's Independent Directors held their meeting on 25.03.2023 without the attendance of Non-Independent Directors and members of the management. All Independent Directors were present at the meeting. They reviewed i. the performance of non-Independent directors and the Board as a whole; ii. the performance of the 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 information between the company's Management and the Board which is necessary for the Board to effectively and reasonably perform their duties.

ENVIRONMENT, HEALTH AND SAFETY

Your Company considers it is essential to protect the Earth and limited natural resources as well as the health and well-being of every person. The Company strives to achieve safety, health and environmental excellence in all aspects of its business activities. Acting responsibly with a focus on safety, health and the environment is a part of the Company's DNA.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

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

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

There is no deviation(s) or variation(s) in utilizing of public issue proceeds. The funds that were raised during the Initial Public Offer (IPO) had been utilized and only towards the purposes as were stated in objects clause of the offer document.

The statement is not applicable now.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the Company's performance during the year under review as stipulated under the Regulation 34(2)(e) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is discussed hereunder:

Global Machine Tool Industry

The coronavirus pandemic and its effects on the world economy and industrial productivity have overshadowed most recent global technological developments in the machine tool industry. Global industrial production continued below pre-crisis levels until mid-2021, with a sluggish recovery in machine tool demand occurring until H1 2021. According to Oxford Economics, the output of machine tools is estimated to have fallen by 6.2% in 2020 and expected to increase by 7.9% in 2021. China represents a sizable chunk of the global share, and other Asian markets are expected to perform reasonably well.

As the global automotive sector focuses on creating and developing EVs, switching from conventional cars to electric vehicles (EVs) continues to be a significant worry for the global machine tool industry. The adoption of new EV emissions rules, which will lead to wider uptake of electric vehicles, is projected to have the most impact on machine tool demand in European countries. Additionally, it is anticipated that Chinese EV use would increase significantly, which will have a negative impact on the short-term trends in machine tool demand.

The machine tool industry's tendencies are generally more cyclical than overall fixed investment spending, which is one of the most cyclical parts of the economy in and of itself.

However, medium-term growth tendencies, such as rising demand for automobiles and high- tech consumer goods in emerging nations, are still in force as per capita income rises in the upcoming years. In addition, China, already the largest consumer and producer of machine tools worldwide, is anticipated to keep holding the top spot because it serves as the central manufacturing hub for exports to the rest of the world, despite China's declining competitiveness as a result of the country's rising wages.

Indian Machine Tool Industry

India ranks 12th in the production of machine tools and 7th in the consumption of machine tools, according to Gardner's "World Machine Tool Survey, 2019". The expected production of machine ools in India for the fiscal year 2019–20 is ? 6,150 crores, while the estimated consumption is ? 15,670 crores.

The difference will be covered by imports, which will make up 66% of consumption in the fiscal year 2019–20.

The prediction for the Indian machine tool industry differs from one sector to another in light of current affairs and sectoral trends. Manufacturing of basic metals and metal products is anticipated to perform better due to the nation's relatively strong economic recovery, particularly as construction activity recovers. Meanwhile, as post- COVID enterprises have gradually resumed production in light of the muted demand, it is projected that the recovery in the car manufacturing sector will take longer than expected. In light of these developments, the machine tool industry must explore uncharted waters and take full advantage of technology improvements to spur the creation of new products and procedures.

While the government is emphasising on a self-reliant India, the machine tool industry must continue to collaborate with new and emerging sectors, such as healthcare and medical equipment, infrastructure, aerospace, defence, food processing, agricultural machinery, textile machinery, railways, and power generation, as well as other sectors such as electronics and electronics-related equipment.

Industry Outlook

There is substantial demand for large-sized machine tool requirements in emerging manufacturing industries like aerospace, aviation, healthcare, and infrastructure, as well as in more established industries like railroads, power, and the built environment.

Rising automation and the use of advanced technology in the manufacturing and construction industry will lead to an increase in demand for machine tools.

Indian enterprises are exploring the prospects for joint ventures and strategic alliances with overseas players in order to acquire intellectual property, advance technology, and assess cross-selling opportunities.

Government support and initiatives – such as Make in India, Atma Nirbhar Bharat, PLI, and many others, to advance technology and support domestic manufacturing.

Key Challenges

Lack of indigenous technology - limited investments in research and development leading to commoditized offerings.

Highly import-dependent industry - lack of high-end technologies leading to a substantial gap fulfilled by imports.

Low brand building activities and lack of credible brands - limited efforts on brand building, user-interaction and demonstrations to create awareness.

Highly competitive market - a product-centric market, with little focus on after-sales service. Lack of complete product range - a product-centric rather than a comprehensive solutions- driven approach.

Company Overview

Marshall Machines, founded by Mr Gautam Sarup in 1961, is a well-known brand in the Indian machine tool industry. Marshall started out by manufacturing high-precision bench lathes, heavy-duty lathes, and capstan lathes. However, in the last two decades, under the aegis of second-generation promoters Mr Gaurav Sarup and Mr Prashant Sarup, the Company's single-minded focus on product innovation, research and development, automation, and Industry 4.0 technologies has positioned it as a niche player in a somewhat commoditized industry. Resultantly, Marshall is currently a front-runner in the space of automated, Industry 4.0-enabled, and smart IoT-enabled CNC solution offerings to India's leading manufacturing companies. Marshall's clientele is spread across numerous industries, including automobile, consumer durables & appliances, and general engineering, to name a few.

Business Overview

Marshall Machines is in the business of designing, manufacturing, and deploying solution offerings, providing after sales services for machine tool equipment. Products offered by the Company include single spindle CNC machines, innovative two spindle & four spindle CNC machines, automated robotic CNC machine solutions, and Industry 4.0 products such as SmartCorrect Gauging Stations. Since then, the Company has grown into a well-regarded player in automated solutions, smart and technologically superior machine tool offerings that enable its clients to enhance productivity, reduce cost per component, and generate a higher return on investment (ROI) from their machines. Constant product innovation, achieved via rigorous research and development, intellectual property generation and protection, has enabled the Company to produce solutions that meet the emerging needs of its clients.

The Company's machines are being used in a number of industries, including the automobile industry, consumer durables and appliances, and general engineering, among others. They are used to manufacture a variety of products such as axles, crankshafts, auto components, fans, and pumps. They are also used to manufacture bearings, gear blanks, bushes, and other similar items. These machines are well-regarded for their quality, dependability, and precision performance. In addition, Marshall provides its clients with the ability to create and implement customised solutions with the desired flexibility. As a result, customers' unique requirements are met with these customised solutions that are designed to maximise the efficiency with which these equipment are used in their operations.

Marshall and Maruti Center for Excellence

During the year, the Company launched a significant initiative along with Automobiles major Maruti by launching India's 1st comprehensive Training Program for Industry 4.0 Technologies at MACE. In this initiative, Marshall has installed proprietary equipment for training on four types of machines at MACE, i.e., Vertical Machining Center, CNC Turning Center, Injection Moulding Machine, and Hydraulic Press.

The training will cover the three most important areas for machine shops Productivity, Quality and Health. In addition, through the LOPI (Learn, Observe, Practice, Implement) model, trainees will learn to implement Industry 4.0 Technologies in their respective factories.

Outlook

Post completion of the recent CAPEX cycle (2018-2021), the Company has created a cumulative capacity of ?250 crores in Revenues from erstwhile ?75 crores. The Company will rely on the increased deployment of Industry 4.0 and affordable automation solution offerings in order to enhance revenues and capacity utilisation. In addition to having a much higher ticket size, these high-end automated product cells also have better profitability margins. The disruptions caused by the first and subsequent waves of Covid-19 have had an impact on the Company's performance in FY21 and FY22. However, on the customer front, they have highlighted several structural problems in the way Indian machine shops are currently operating. It has drawn attention to challenges such as a scarcity of skilled operators, an over-reliance on human resources, the need for increased productivity, and a dire need to reduce cost per component to optimise profitability in challenging times. Marshall Machines has a complete gamut of product offerings that address these needs, and we will be at the forefront of addressing these problems with our meticulously developed product portfolio.

INSOLVENCY PROCEEDINGS

There are two insolvency proceedings pending against the Company in NCLT namely:

CORPORATE GOVERNANCE

The Corporate Governance Report is annexed to the report as Annexure A.

SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has zero tolerance for sexual harassment for women at workplace and has adopted a policy against sexual harassment in line with Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder. The Company has complied with the provisions relating to the constitution of Internal Complaint Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the financial year 2022-23, the Company has not received any complaints on sexual harassment and hence no compliant remains pending as on 31st March, 2023.

ACKNOWLEDGMENT

Your Directors thanks all the Stakeholders including investors, customers, vendors, bankers, 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 the levels.

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

By order of the Board of Directors,