Noble Explochem Ltd Management Discussions

Industry Structure and Development:

Noble Explochem Limited (Noble) was a leading manufacturer of Nitro Glycerin (NG) based small dia Explosives. The Govt. of India vide notification discontinued the said activity w.e.f.1^st April 2004. The Company then started manufacturing of Emulsion based explosives in technical collaboration with ETI Canada, (formerly Du pont). The Company also started manufacturing of chemical known as Cetane Improver by utilizing the existing infrastructure of the Ng facility with some modification. The Company undertook Horticulture activities in a big way to enhance profitability by utilizing the open land as well as the available land around the manufacturing infrastructure. The company developed some new range of products for fuel savings, some of them were developed for the first time in India. From November 2006, the manufacturing activity of the Company is stopped due to financial crises and labour unrest.

Opportunity And Threats:

Due to discontinuation of manufacturing activity, Company is incurring losses for the last several financial years and the total net worth was eroded. The Honble BIFr had declared the Company as sick industrial Unit and appointed the IDBI Bank as Operating Agency for preparing Draft Rehabilitation Scheme (DRS). Meanwhile, the BIFR was repealed by the Central Government. As a result the Company has to take initiative for its revival from the financial crises. In this respect, the Management has also approached some prospective strategic investors who will invest funds in the Company. The Company will issue Equity/preference Shares to such Strategic Investors against their investment at par rate.

Segment wise Production Performance:

Company is not in operation hence there is no Segment-wise performance.

Outlook:

The Management of the Company is scouting for strategic investors to help the Company restart its production activities. The Company will focus its efforts on key strengths of research & development related activities after it resumes production of its existing product lines. With the existing infrastructure and production facilities the Management expects to achieve major turnaround in its operations. Efforts to reduce overall costs and overheads will continue.

Risk And Concerns:

The Draft Rehabilitation Scheme had envisaged various reliefs and concessions but the BIFR has been repealed. The company shall however finalise a fresh rehabilitation scheme and restart its operations with help of strategic investors. Internal Control Systems And Their Adequacy:

The Company has sufficient system of internal control, which ensures that all assets are protected against the loss from unauthorized use or disposition and all transactions are recorded and reported in conformity with generally accepted accounting principles.

The internal control systems are documented with clearly defined organizational hierarchy and authority limits. These systems are designed to ensure accuracy and reliability of accounting data, promotion of operational efficiency and adherence to the prescribed management policies.

The Company has a system of periodically reviewing these controls. Internal Audit is conducted by external agencies and further assist in improving effectiveness of internal control systems. The Audit Committee of the Board reviews significant control issues raised by the internal and external auditors of the Company from time to time.

Financial Performance With Respect To Operational Performance:

This year also Company could not start its business activities due to financial and other things beyond the control of management of the Company. The Company deals in following products:

Product	Particulars	2015-16	2016-17
Industrial Explosive	Production MT	0	0
	Sales MT	0	0
Petrochemicals	Production MT	0	0
	Sales MT	0	0
Horticulture	Sales (Lacs)	0	0

Material Development In Human Resources / Industrial Relations Front, Including Number Of People Employed:

The affairs of the Company are being managed under the control and supervision of the Managing Director. Apart from Managing Director and Executive Director, Managing Director is being assisted by experienced and qualified finance, production administrative and marketing team.

Due to discontinuation of manufacturing activity, there are no employees working at the factory. The Company has only employed administrative staff at its head office.

CERTIFICATE ON CORPORATE GOVERNANCE

To

The Members

Noble Explochem Limited

Nagpur - 440010

This certificate was issued as per the terms of our engagement with Noble Explochem Limited ("The Company)

We have examined the compliance of conditions of corporate governance by Noble Explochem Limited, for the year ended on 31^st March 2017 as stipulated in Regulation 17-27 Clauses (b) to (i) and paragraphs C, D & E of Schedule V of the Securities Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015 (Listing Regulations).

Managements Responsibility:

The compliance of conditions of corporate governance is the responsibility of the management. This responsibility includes design, implementation and maintenance of internal control and procedure to ensure the compliance with the conditions of Corporate Governance stipulated in the listing regulations.

Auditors Responsibility:

Our examination was limited to procedures and implementation thereof, adopted by the company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the company

We have carried out an examination of the relevant records of the Company in accordance with the Guidance Note on Certification of Corporate Governance issued by the Institute of the Chartered Accountants of India (the ICAI), the Standards on Auditing specified under Section 143(10) of the Companies Act 2013, in so far as applicable for the purpose of this certificate and as per the Guidance Note on Reports or Certificates for Special Purposes issued by the ICAI which requires that we comply with the ethical requirements of the Code of Ethics issued by the ICAI.

Opinion:

We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the Management has conducted the affairs of the Company.

Based on our examination of the relevant records and according to the information and explanations provided to us and the representations provided by the Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in regulations 17 to 27 and clauses (b) to (i) of regulation 46(2) and para C and D of Schedule V of the Listing Regulations during the year ended March 31,2017 subject to following:

1. The Company had received Show Cause Notice for non-payment of Annual Listing Fees of Bombay Stock Exchange. But Company had already paid the Annual Listing Fees for the financial year 2016-17. And replied accordingly.

2. The Company had not published the financial results in the newspapers for the quarter ended on March 2016, December 2016

For P S Channe & Associates

Sd/-

Pradip Channe

Company Secretary

C. P. NO. 7138

Place: Nagpur:

Date: 14/08/2017