Kemistar Corporation Ltd Management Discussions.

Notice to the shareholder for MANAGEMENT DISCUSSION AND ANALYSIS REPORT (MDAR) as a part of the corporate governance report as per clause 49 of the listing agreement.

1. INDUSTRY STRUCTURE AND DEVLOPEMENT:

With impetus on developing industrial corridors and smart cities, the government aims to ensure holistic development of the nation. Indian chemical companies support a sizable and highly diversified industry that includes commodities, specialities, polymers, agrochemicals and a range of other groups. In various ways major part of the population is inextricably linked to Chemicals. The chemicals cover an array of more than 70,000 commercial products. Specialty chemicals and agro-chemicals are the two fastest growing sectors among them. The Company deals in Specialty Chemicals, which are characterized by vastly differentiated products with higher value addition, and the market of Specialty Chemical is vast and lucrative, which will further aid in the growth of the Company.

2. OPPORTUNITIES AND OUTLOOK:

India is the sixth largest producer of chemicals in the world and third largest producer in Asia in terms of output. The Indian chemical sector is currently worth USD 150-155 billion and it is expected to double by 2025 if it continues to grow at the current rate of 8 to 10%.

The ‘Make In India initiative would also play a pivotal role in boosting the growth of the Indian chemical industry. India is an attractive hub for foreign investments in the manufacturing sector, considering the lower cost of labour and availability of key raw materials, large consumer markets, and adaptability to technology several mobile phone, luxury and automobile brands, among others, have set up or are looking to establish their manufacturing bases in the country.

3. RISK, CONCERNS AND THREATS:

All companies, regardless of its size, nature and activity posses diverse degree of risk at all times.

Unavailability of skilled Labour, volatility in prices of Raw Materials, Inadequate Infrastructure facilities, Lack of Autonomous research center, Low focus on R&D due to high costs, Higher cost of Production due to various regulatory compliances are various points of concern faced by the Chemical industry

Further, high competition within the industry leads to reduced process which adversely impacts the margin. Apart from this uninterrupted power supply to the energy intensive Chemical Industry, adversely affects the small and medium players in the industry. Escalation of crude oil Prices are responsible for increased price of inputs and the volatility in Indian Currency vis--vis US Dollar and EURO is a matter to be look after and tackled.

For every challenge encountered there is a opportunity for growth.

Chemicals businesses in India have long suffered the wrath of added taxations on their production capacity as well as their consumption demands. The older taxations caused the rise in the production costs of manufacturing vital chemicals, which resulted in the price-hike of the end products and made such goods unaffordable for gross consumption. With the Introduction of GST, the Indian Chemical Industry is expected to witness unbarred growth in the coming years.

4. INTERNAL CONTROL SYSTEMS AND ITS ADEQUACY:

The Company continues to take various measures for ensuring adequate safety and protection of its assets. Definite of hierarchy of management is put to practice, defining roles, responsibilities, and answerability among the top management and the employees of the company. The board is provided with timely information regarding the operations of the company. The services of professionals are sought by the company in order to support the management to efficiently discharge irs responsibility by giving hands on facts, details and recommendations concerning the activities covered for audit and reviewed by it during the year. The conclusions of internal audit reports and effectiveness of internal control measures is reviewed by top management and audit committee of the Company. The Committee also meets the Statutory Auditors of the Company to ascertain, their views on the strengthening of internal control systems in the Company.

5. FINANCIAL PERFORMANCE:

A. Standalone Financial Performance:

(i) Net Sales and Other Income:

Net Sales and other income for the year under review Increase from Rs. 9,970,725/- to Rs.2,82,65,560/-

(ii) Expenditure:

The total expenditure Increased from Rs. 10,045, 375/- to Rs. 28,207,751/- for the financial year 2017-18.

IV) Profit before Tax:

The Profit before tax increased from Rs. 4,61,104/- to Rs. 875,691 for the year 2017-18.

(V) Profit after tax:

The Total profit Increased from Rs. 3,59,218/- to Rs 705,286/-

(VI) Net Block:

The net block decreased from Rs. 447,270/- to Rs 432,192/- for the year 2017-18, which was on account of depreciation.

6. DEVELOPMENT IN HUMAN RESOURCES:

The Company considers its employees as its main assets. The management believes in the philosophy of the development of the Company with the development of its employees. Proper environment of work, all necessities and their safety is looked after. The well being of its employees is always a priority to the company. The employees are given proper guidance and training to execute their tasks. Hence, higher degree of work satisfaction is enjoyed by the employees of the company.

7. ENVIRONMENT, HEALTH & SAFETY (EHS)

The Company commits to ethical and sustainable operation in all business activities. Company maintains and implement an Environmental Management System (EMS) for meeting the purpose of organizations policy and objectives regarding environment. The aims of the system is use of processes, practices, techniques, materials, products, services or energy to avoid, reduce or control the creation, emission or discharge of any type of pollutant or waste, in order to reduce adverse environmental impacts. Adequate Occupational Health & Safety Management System is adopted by the Company for ensuring the conformance to the Occupational Health & Safety Management System, legal & statutory requirements, continual improvement and satisfaction of interested parties (i.e. customers, suppliers, employees and public).

8. CAUTIONARY STATEMENT:

No reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions, predictions etc. may constitute "forward looking statements" contained herein. Certain statements contained in this document may be statements of future expectations, forecasts and other forward-looking statements that are based on management‘s current view and assumptions. Such statements are by their nature subject to significant uncertainties and contingencies and the actual results, performance or events may differ materially from those expressed or implied in such statements. Readers are cautioned not to place undue reliance on any forward looking statement.

For and on behalf of the Company

Place: Ahmedabad Sd/- Sd/-
Date: August 11, 2018 Managing Director Director
(DIN: 01157786) (DIN: 2249636)