Kemistar Corporation Ltd Management Discussions.

1. INDUSTRY STRUCTURE AND DEVLOPEMENT:

The Company deals in Specialty Chemicals, which are characterized by vastly differentiated products with higher value addition. Added with improved policy support by the Government, thereby creating a growth driven economy, the manufacturing sector in the country has been benefitted at large. The Governments Initiative like ‘Make in India has helped revive the Chemical industries. 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.

2. OPPORTUNITIES AND OUTLOOK:

India is the third largest producer of chemicals in Asia. The growth is likely to be driven by rising demand in end-use segments for specialty chemicals. The domestic chemical sector attracted FDI investment of $1.3 billion in FY18, which is about 3 per cent of the total FDI inflow. The Indian chemicals industry is projected to reach $ 304 bn by 2025.100% FDI is allowed under the automatic route in the chemicals sector. GSTs role in easing logistics and related processes has helped the industries invariably. 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, among primary concerns of Indian exporters include sanitary and phytosanitary measures such as certifications, testing procedures; pre-shipment formalities such as customs procedures and pre-shipment inspection; and technical barriers such as quality requirements, labeling regulations and other specifications under the purview of technical measures from importing countries,. Among non-technical measures hindering exports to destination economies, price control measures (such as administrative measures affecting customs value, seasonal duties, custom surcharges), distribution restrictions (such as limiting sales of goods to certain areas within an importing country, or by designated retailers only) and rules of origin (including measures restricting origin of products or their inputs) are seen as major impediments. 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 looked after and tackled.

4. INTERNAL CONTROL SYSTEMS AND ITS ADEQUACY:

The Company ensures the safety and protection of its assets by having implemented well defined policies and their implementation in a well efficient manner The Company also has definite hierarchy of management put to practice, defining roles, responsibilities, and answerability among the top management and the employees of the company. The board of the Company is always well informed regarding the operations of the company. The company always ensures the dissemination of information through proper channels in a professional manner. The management takes regular recommendations and advises from the reliable professionals having experience in their fields, in order to efficiently discharge responsibilities 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. 291.83 Lakhs to Rs. 323.77 Lakh

(ii) Expenditure:

The total expenditure Increased from Rs. 282.08 Lakh - to Rs 309.46 Lakh for the financial year 2018-19

(iii)Profit before Tax:

For the year under review the Profit before Tax is Rs.14.31 Lakh as compared to Rs.8.76 Lakh during the immediate previous financial year.

(iv)Profit after tax:

For the year under review the Profit after-tax is Rs. 10.70 Lakh as compared to Rs.7.05 Lakh during the immediate previous financial year.

(v) Net Block:

The net block increased from Rs. 4.32 Lakh to Rs 4.45 Lakh for the year 2018-19.

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 implements 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 lookingstatement.

For and on behalf of the Company
Sd/- Sd/-
Place: Ahmedabad Ketankumar Patel Parshottambhai Patel
Date: August 12, 2019 Managing Director Director
(DIN: 01157786) (DIN: 02458676)
Registered Office:
604, Manas Complex,
Jodhpur Cross Road,
Satellite, Ahmedabad - 380015