Sahyadri Industries Ltd

To

The Members,

Yours Directors have pleasure in presenting their Eighteenth Annual Report togetherwith the Audited statement of accounts for the Financial year ended March 31, 2012

Business Performance

The sales and other income for the year ended 31st March 2012 were Rs. 37772.22 lacs asagainst Rs. 29236.25 Lakhs in the previous year, The operating profit amounted to Rs.1356.76 Lakhs as against Rs. 2039.11 Lakhs in the previous year. The net profit after taxwas Rs. 961.59 Lakhs as against Rs. 1347.24 Lakhs for the previous year.

High inflation had an impact on spending of rural household for new shelter orupgradation of shelter. During the year the raw material prices increased and companycould not pass on the entire increase to its customers. This along with impact of currencyfluctuation resulted in lower profitablity.

Dividend

Board of director is pleased to recommend a dividend ^ of Rs. 2.00 (20%) per equityshare of the face value of Rs. 10 each for the year ended March 31, 2012. The total amountof dividend, if approved by the shareholders will be Rs. 222.25 lacs (Including Dividenddistribution tax and Surcharge) .similar as of the previous year.

Directors

As per the provisions of Companies Act, 1956 and Articles of Association of theCompany, Mr. J. R Patel, Mr. S.V. Patel and Mr. D B Kasad , retire by rotation and areeligible for reappointment,

Mr. M.R Kulkarni resigned as the director of the company during the year. Board ofDirectors places on record its appreciation for contribution to Companies business. Mr. MP Kulkarni agreed on request of the Board that he would be associated with the Company asa consultant.

Mr. R L. Patel, Mr. V. L. Patel, Mr. J. R Patel and Mr. S. V. Patel were appointed asChairman, Managing Director, Executive Director and Director Commercial respectively ofthe Company in the Board meeting held on 26.06.2009 for a period of 5 years from 1 st July2009 and approved by the shareholders in their meeting held on 30th September 2009.

During the year under review, Mr. R L. Patel & V. L. Patel expressed their desiredto relinquish there respective offices of chairman and Managing director and toredesignate themselves as wholetime directors of the Company. Mr. R L. Patel & V. L.Patel navigated the affairs of the Company from its begining to scale the present heightachieved by the Company.

Board appreciated their remarkable contribution towards building of the Company andtaking to new height during their tenure as a Chairman and Managing Director respectively.The Board of Directors promoted Mr. J. R Patel as Executive Chairman and Mr. S. V. Patelas Managing Director for their remaining term and wish them success in their new roles andresponsibilities.

Awards

During the financial year, the Company s wind farm was identified by the Indian WindPower Association to be the BEST WIND FARM (Above 2MV Category ) in Maharashtra among windfarms located in Maharashtra, Gujarat, Rajasthan and Madhya Pradesh for the year 2010-11and award was received.

Directors' Responsibility Statement

Pursuant to the requirement under section 217 (AA) of the Companies Act, 1956, relatingto the Directors Responsibility statement, the Directors to the best of their knowledgeand belief and according to the information obtained by them, confirm that:

i) In the preparation of the annual accounts for the financial year 2011-12 theapplicable accounting standards have been followed along with proper explanations relatingto material departures;

ii) we have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as on March 31, 2012 and of the Profit of theCompany for the year ended on that date;

iii) we have taken proper and sufficient care for the maintenance of the adequateaccounting records in accordance with the provisions of the Companies Act, 1956 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities; and

iv) we have prepared the annual accounts on a going concern basis.

Auditors

The auditors, M/s Parag Patwa & Associates, Chartered Accountants, retire at theensuing Annual General Meeting and have confirmed their eligibility and willingness toaccept the office, if re-appointed.

Fixed deposit

We have not accepted any fixed deposits from public and, as such, no amount ofprincipal or interest was outstanding as of the Balance Sheet date.

Corporate Governance

Pursuant to clause 49 of the Listing Agreement with Stock Exchange, a separate sectiontitled Corporate Governance Report has been included in this annual report, along with thereports on Management Discussion & Analysis and Additional Shareholder Information,

All board members and senior management personnel have affirmed compliance with thecode of conduct for theyear201M2.

Particulars of employees

The Company has no employee whose particulars are required to be disclosed pursuant tosection217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employee)Rules, 1975

Conservation of Energy, Technology Absorption, Foreign Exchange earnings and outgo:

The details about conservation of energy, technology absorption, foreign exchangeearning and outgo as required by section 217(l)(e) of the Companies Act 1956 and theCompanies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 areas given below.

a) Research and Development

1. Specific Areas in which R&D carried out by the company: In respect of theBuilding Material division, the Company has been experimenting in varying ratio of rawmaterials for improving quality and reducing cost.

2. Benefits derived as a result of the above: In respect of Building Material, we haveexplored the possibilities for increase in productivity and reduction in cost.

3. Future Plan of action: Improve the input mix further.

4. Expenditure on R & D: No expenditure exclusively on R & D has been incurredduring the year.

B) Technology absorption, adaptation and innovation

No technology has been imported. The in-house technology is continuously upgraded toimprove the overall performance of the Company.

C) Foreign exchange earnings & out go ( Rs. In Lacs)

• Foreign Exchange Earned Rs. 238.82

• Foreign Exchange Outgo Rs. 10325.76

Acknowledgment:

We thank our customers, vendors, investors and bankers for their continued supportduring the year. We are grateful to the various state governments & local authoritiesfor their continues co operation. We place on record our appreciation of the contributionmade by our employees at all levels. Our consistent growth was made possible by their hardwork, solidarity, cooperation and support.