DIRECTORS' REPORT

[Pursuant to Section 134(3) of the Companies Act, 2013]

To

The Members,

SHREE HARI CHEMICALS EXPORT LIMITED

The Directors have pleasure in presenting the Twenty Eighth Annual Report together with the Statement of Accounts for the year ended on March 31, 2015:

OPERATIONS:

During the year under review, net sales turnover was Rs. 13099.69 Lakhs as against Rs. 6183.41 Lakhs during the corresponding previous year. Profit after tax was Rs. 3206.83 Lakhs as against Profit of X 1349.89 Lakhs

for the previous year. The growth in the turnover and profit of the Company was mainly attributable to the favorable positive market conditions and demand in the international market for the products. However, the increase in exports was the bright spot in the net sales turnover.

TRANSFER TO GENERAL RESERVE

The Company proposes to transfer Rs. 160.00 Lakhs (5% of Net Profit) to the General Reserve out of the amount available for appopriation and an amount of Rs. 3073.45 Lakhs is proposed to be retained in the Profit and Loss Account.

DIVIDEND

The Board of Directors are pleased to recommend a dividend of Rs. 2.50/- (Rupees two and paisa fifty) per share i. e. 25% on 4446300 Equity Shares of Rs. 10/- each for the year 2014-2015.

EXPORT

Export earnings were Rs. 707.60 Lakhs as against Rs. 407.02 Lakhs during the corresponding previous year.

MATERIAL CHANGES AND COMMITMENTS AFTER THE END OF THE FINANCIAL YEAR

There have been no material changes and commitments, if any, affecting the financial position of the Company, which have occurred between the end of the Financial Year dated March 31st, 2015 and the date of the report.

NUMBER OF MEETINGS OF BOARD OF DIRECTORS

6 (Six) Meetings of the Board of Directors were held during the year.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Pursuant to the provisions of Section 149 of the Act, which came into effect from April 1, 2014, Shri Virjanand Gupta (DIN 00042271), Shri Arvind Chirania (DIN 00044845), Shri Santosh Kumar Sultania (DIN 00041109), Shri Vinit Kedia (DIN 02462683) were appointed as Independent Directors at the Annual General Meeting of the Company held on September 5th, 2014.

Shri Hanuman Prasad Ramuka (DIN 02440114), Director of the Company, retires at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

Shri Kishori Lal Ramuka (DIN 00040695) was re-appointed as the Chairman & Executive Director of the Company from October 1, 2014 for a period of three years which was approved by the shareholders at the Annual General Meeting held on September 5th, 2014.

The Board of Directors at its Meeting held on February 12th, 2015 re-appointed Shri Bankesh Chandra

Agrawal (DIN 00121080) as the Managing Director of the Company for a period of three years from March 1st, 2015, subject to the approval of the Shareholders.

Shri Santosh Kumar Sultania, (DIN 00041109) Director of the Company, resigned as Director with effect from March 26, 2015. The Board places on record their sincere appreciation for the valuable services rendered by him during his tenure as Director of the Company.

With a view to strengthen the Board and also to meet the regulatory requirements, Smt. Ekta Sultania (DIN 07134485) was appointed as Additional Director of the Company with effect from March 26, 2015. Since Smt. Ekta Sultania is an Independent Director of the Company, the resolution seeking approval of the Members for the appointment of Smt. Ekta Sultania as an Independent Director with effect from March 26, 2015 has been incorporated in the notice of the forthcoming Annual General Meeting of the Company. The Company has received notice under Section 160 of the Act along with the requisite deposit proposing her appointment. She is a Bachelor of Science (B.Sc.)

Pursuant to the provisions of Section 203 of the Act, which came into effect from April 1, 2014, the appointment of Shri Kishori Lal Ramuka, Chairman & Executive Director, Shri Bankesh Chandra Agrawal, Managing Director, Shri Hanuman Prasad Ramuka, Whole Time Director and Shri Sanjay Kedia, Chief Financial Officer of the Company as key managerial personnel of the Company was formalized on May 29th, 2014. During the year Company also appointed Smt. Priyanka Ajmera as a Company Secretary with effect from March 26th, 2015 as required under the provisions of Section 203 of the Act.

DECLARATION FROM INDEPENDENT DIRECTORS

Shri Virjanand Gupta, Shri Arvind Chirania, Shri Vinit Kedia and Smt. Ekta Sultania, who are independent directors, have submitted a declaration that each of them meets the criteria of independence as provided in sub Section (6) of Section 149 of the Act and there has been no change in the circumstances which may affect their status as independent director during the year. In the opinion of the Board, the independent directors possess appropriate balance of skills, experience and knowledge, as required.

AUDIT COMMITTEE OF BOARD OF DIRECTORS

The Audit committee of the Board of Directors of the Company consists of the following members:

1. Shri Arvind Chirania

2. Shri Vinit Kedia

3. Shri Virjanand Gupta

4. Shri Santosh Kumar Sultania (Resigned w.e.f. 26.03.2015) Four (4) Meetings of the Committee were held during the Financial Year.

VIGIL MECHANISM

The Company has formulated and published a Whistle Blower Policy to provide a mechanism ("Vigil Mechanism") for employees including directors of the Company to report genuine concerns. The provisions of this policy are in line with the provisions of the Section 177(9) of the Act.

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND CRITERIA FOR INDEPENDENT DIRECTORS

The Remuneration Policy for directors and senior management and the criteria for selection of candidates for appointment as Directors, Independent Directors, senior management as adopted by the Board of Directors are placed on the website of the Company and are annexed as Annexure I & II to this report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

(ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the profit of the Company for that period;

(iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) they have prepared the annual accounts on a going concern basis;

(v) they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;

(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants and the reviews performed by management and the relevant Board Committees, including the Audit Committee, the board is of the opinion that the Company's internal financial controls were adequate and effective during the Financial Year 2014-15.

The Internal Auditor also regularly reviews the adequacy of internal financial control system.

DETAILS OF SUBSIDIARIES/ JOINT VENTURES/ ASSOCIATES

The Company does not have any subsidiary/joint ventures/associates.

EXTRACT OF ANNUAL RETURN

As provided under sub Section (3) of Section 92 of the Act, the extract of annual return is enclosed, which forms part of the directors' report as Annexure III.

AUDITORS

M/s. Kailash Chand Jain & Co., Chartered Accountants (ICAI NO. 112318W), the Auditors of the Company who would retire at the ensuing Annual General Meeting offer themselves for re-appointment. M/s. Kailash Chand Jain & Co., Chartered Accountants, the existing auditors have furnished a certificate, confirming that if re-appointed for the Financial Year 2015-2016 their re-appointment will be in accordance with Section 139 read with Section 141 of the Companies Act, 2013.

COST AUDIT

As per Section 148 and other applicable provisions of the Companies Act, 2013, the Board of Directors based on the recommendation of the Audit Committee had appointed M/s. B. F. Modi & Associates, Cost Accountants, as Cost Auditors to carry out the audit of the Cost Records of the Company for the Financial Year 2014-15. M/s. B. F. Modi & Associates, Cost Accountants, have also been appointed as Cost Auditors to carry out the audit of the Cost Records of the Company for the Financial Year 2015-16. The necessary resolution for seeking ratification of payment of remuneration to them is included in the notice of the ensuing Annual General Meeting.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 and other applicable provisions, if any, of the Companies Act, 2013, M/s. Parikh Parekh & Associates, Practicing Company Secretaries were appointed as the Secretarial Auditor for auditing the secretarial records of the Company for the Financial Year 2014-2015. The Secretarial Auditors' Report is annexed as Annexure IV.

AUDITORS' REPORT AND SECRETARIAL AUDITORS' REPORT

The auditors' report and secretarial auditors' report does not contain any qualifications, reservations or adverse remarks.

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

Information in accordance with Clause (m) of Sub-section (3) of Section 134 of the Act read with Companies (Accounts) Rules, 2014 is annexed to this report as Annexure V.

PARTICULARS OF EMPLOYEES

The information required under Section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as Annexure VI.

DEPOSITS FROM PUBLIC

The Company has not accepted any deposits from public during the year.

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORY/ JUDICIAL AUTHORITY

The Company received a notice vide letter dated June 17th, 2015, from the Regional Officer, Mahad, Maharashtra Pollution Control Board directing to close the manufacturing activities of the Company's factory. Further, the Company has received the order dated July 10th, 2015, directing to restart the manufacturing activities. Accordingly, the Company has restarted its manufacturing activities.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The Company has not given any loans or guarantees or made investments in contravention of the provisions of the Section 186 of the Companies Act, 2013.

RISK MANAGEMENT POLICY

The Board of Directors of the Company has framed a risk management policy and is responsible for reviewing the risk management plan and ensuring its effectiveness. The Audit Committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

CORPORATE SOCIAL RESPONSIBILITY

The Corporate Social Responsibility Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which is approved by the Board.

As part of CSR initiatives, your Company during the Financial Year 2014-15 has amongst other activities, undertaken projects in areas of promoting education, preventive health care and measures for benefits of villagers in rural areas of Raigad District.

The above projects are in accordance with Schedule VII of the Companies Act, 2013. The Company has spent Rs. 5.80 Lakhs towards the CSR projects during the current Financial Year 2014-15.

The average net profit of the Company, computed as per Section 198 of the Act, during the three immediately preceding Financial Years was Rs. 288.62 Lakhs, it was hence required to spend Rs. 5.77 Lakhs on CSR activities during the Financial Year 2014-15 being 2% of the average net profits of the three immediately preceding Financial Years. The Company has spent an entire amount of Rs. 5.77 Lakhs in its CSR during the Financial Year.

The Annual Report on CSR activities is annexed as Annexure VII.

RELATED PARTY TRANSACTIONS

Particulars of transactions with related parties pursuant to Section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Form AOC-2 and the same forms part of this report as Annexure VIII.

EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

An annual evaluation performance of the Board, Board Committees and individual Directors was carried out pursuant to the provisions of the Act in the following manner:

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

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

CORPORATE GOVERNANCE REPORT

As per SEBI circular No. CIR/CFD/POLICY CELL/7/2014 dated September 15, 2014 the revised Clause 49 is not mandatory to the Company.

ACKNOWLEDGEMENT

Your Directors convey their gratitude to the State Bank of India and every official, customers, suppliers, other associates of the Company for their continued co-operation and support. The Directors also wish to place on record their appreciation of hard work put in by the staff of the Company. The Directors are also grateful to you, the Shareholders, for the confidence putting in the Company.

For and on behalf of the Board

Kishori Lal Ramuka

Chairman & Executive Director

Mumbai

August 12, 2015