MANAGEMENT DISCUSSION AND ANALYSIS REPORT

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:

Agriculture is the dominant sector in India which determines the growth and sustainability of economy. Agriculture production capability has to cope up with the ever-growing world population. Despite the fact that more than half of the Indian population relies on agriculture for employment and livelihood, Agro-Chemical consumption in India is very low, compared to the world. In India, per hectare approximate consumption of agrochemicals is 0.58 kg as against 16.6 kg in Korea and 11 kg in Japan (Source: 3rd National Conference on Agro Chemicals, FICCI).

India accounts for approx 4% of the global agro chemicals market estimated at USD 1.8 Billion. With the introduction of newer molecules and the increasing awareness among farmer community, the industry is witnessing high growth rates in recent times. The crop protection industry in India is dominated by molecules which are off-patent. Hence, a strong distribution network and brand brsence acts as a competitive advantage.

2. OPPORTUNITIES AND OUTLOOK:

The Agro-Chemical industry is highly dependent on conditions like monsoon and sudden change in weather, which affects the demand for the agrochemical products. This kind of risk remains constantly in this industry. The industry has also built up large capacities and has many players resulting in high level of competition. Globally, the Agro-Chemical industry is dominated by MNCs which invest heavily in R&D with the aim of securing patent protection.

The fundamentals of the Agriculture sector continue to be robust and will drive growth in the years to come. The remunerative produce prices for most of the key crops are expected to continue and will lead to increased investments by the farmers on agri inputs and improving overall productivity.

3. PERFORMANCE:

Maintaining its turnover, the company recorded a profit in the year inspite there being various factors such as rising cost of material, slackness in the market, debrciation of the rupee resulting in higher costs of imports, machinery of company became dead, capital work in progress written off, inflation and slow growth in the economy had a negative impact on the performance of the company. Despite of all these challenges, recession and exemplary high costs in the business, your Company has withstood the brssure and reported comparatively better business.

4. RISK, CONCERNS AND THREATS:

The performance of Agrochemical industry Is dependent on monsoon. The erratic rainfall affect the crop acreages, pest application and overall productivity directly affect the sales. The main threat to the industry is erratic monsoon and frequent changes in government policies which may result in ban of certain agrochemicals. Volatility in raw material prices, fuel cost, crude oil and transportation cost can adversely affect the business operation and can thin out profitability of the Company. The exchange rate fluctuations between Dollar and Rupee also impact the raw material prices. With no entry barriers and competitive prices, the business of the company can be .affected by competition in the industry.

5. INTERNAL CONTROL SYSTEMS AND ITS ADEQUACY:

The Company has implemented internal control system across its operations to ensure that all assets are adequately safeguarded and protected against loss from unauthorized use. The Company has established well defined roles of the employees of the company. The senior executives are equipped with authority and are responsible for major operational activities of the company. The Board of Directors is provided timely and requisite information for control and review of the operations of the company. The Company is taking service of independent internal auditors to assist the management in effective discharge of its responsibilities by furnishing it with findings, observations and pertinent comments, adequacy of internal controls, analysis and recommendations concerning the activities covered for audit and reviewed by it during the year. Findings 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.

6. FINANCIAL PERFORMANCE:

A. Standalone Financial Performance:

(i) Net Sales and Other Income:

Net Sales and other income for the year under review increased from Rs. 16,09,237/- to Rs. 86,55,144/- which is mainly on account of developing new customers and adding more items in our product range.

(ii) Expenditure:

The total expenditure increased from Rs.10, 30,043/- to Rs 84, 19,540/- for the financial year 2013-14, The increase in total expenditure is mainly attributable to the increase in debrciation, administrative expenses, financial cost and for Revocation of suspension of the Company from BSE.

IV) Profit before Tax:

The Profit before tax increased from from Rs. (77,003,136)/- to Rs. 2, 35,604/- for the year 2013^14.

(v) Profit after tax:

The Total profit increased from Rs. (77,011,162)/-to Rs. 1,91,983/-.

(vi) Net Block:

The net block decreased from Rs. 5, 11,791/- to Rs 4,97,028/- for the year 2013-14, which was on account of debrciation,

7. DEVELOPMENT IN HUMAN RESOURCES:

Kemistar Corporation Limited is committed to its human resources development. The Company believes that employees are real assets and they treat them as their HR capital. It recognizes and translates skills, expertise and talent of its team to achieve targeted growth of the Company. Team effort and its commitment, technical know-how, innovation and performance driven mindset enables the company to achieve desired results. The company provides continuous on job training, sends its employees to outside seminars and conducts training

Programs in all functional areas for overall development of human attributes like leadership, management, technical competency & marketing. The company has also focused on planned organizational restructuring In key areas leading to higher productivity and efficiencies.

8. ENVIRONMENT, HEALTH & SAFETY (EHS)

The Company has a environmental policy for implementing an Environmental Management System(EMS) for meeting the content & purpose of organization's Environmental Policy & objectives which take into account legal requirements and other requirements to which the organization subscribes and information about significant environmental aspects. It aims at 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.

9. CAUTIONARY STATEMENT:

No reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions 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 exbrssed or implied in such statements. Readers are cautioned not to place undue reliance on any forward looking statement.

For and on behalf of the board of Directors

Sd/- Ketankumar P. Patel

Managing Director

Sd/- Vasantbhai B. Savalia

Director

Place:Ahmedabad

Date: 19/07/2014