Sintex Industries Ltd

Dear Shareholders,

Your Directors take pleasure in presenting the 79th annual report and audited accountsfor the financial year ended 31 March 2010.

Financial results

Your Company’s financial performance for 2009-10 is given below:

Review of numbers

Your Directors are pleased to report that your Company reported positive growth in2009-10, reflected in the financial statements.

• Gross turnover grew 6.13% at Rs 2,103.56 crore in 2009-10 as against Rs 1,982.04crore in 2008-09

• EBIDTA stood at Rs 476.83 crore in 2009-10 as against Rs 468.03 crore in 2008-09

• Profit after tax rise to Rs 273.70 crore in 2009-10 as against Rs 266.71 crore

• Cash plough back in the business grew 5.31% from Rs 404.06 crore in 2008-09 toRs 425.51 crore in 2009-10

• Earning per share stood at Rs 20.20 (basic) and Rs 20.20 (diluted) in 2009-10

What is of greater significance is that the year under review vindicated the robust andflexible business model which facilitated achieving these numbers despite a key businessvertical of 2008-09 namely Basic Telecom (BT) shelters generating marginal income in2009-10.

Your Company sustained its growth momentum during the year and continued toaggressively pursue inorganic and organic opportunities to strengthen its competitiveposition and enhance stakeholder value.

Dividend

Your Company practices a policy of maintaining a prudent balance between the need toreward shareholders for their faith in the management and its own investment need tocapitalise on emerging business opportunities through a larger proportion of internalaccruals which would further strengthen shareholder value.

The benefit of this policy is reflected in a 77-year uninterrupted dividend payout andan enterprise value which registered a 25% CAGR over the last decade (leading to 2009-10).

In keeping with its conventional policy, your Directors are pleased to recommend adividend of Rs 1.20 per equity share (Rs 1.10 per share in 2008-09) on a face value of Rs2 each on 13,64,95,433 equity shares and any further shares that may be allotted by theCompany, following the conversion of bonds prior to September 14, 2010. This dividend willbe subject to the approval of shareholders, financial institutions and banks at theforthcoming Annual General Meeting.

Business review and divisional performance

A detailed discussion of your Company’s operations is given elsewhere in thisannual report under ‘Management discussion and analysis report.’

1) Plastics division

The plastics division strengthened its position as the Company’s key growthengine:

• Registered a 10% growth from Rs 1,515.32 crore in 2008-09 to Rs 1,666.93 crorein 2009-10

• Accounted for 82.91% of your Company’s revenue in 2009-10 against 80.46% in2008-09

• Contributed 119.70% to the Company’s 6.13% topline growth which nullifiedthe marginal decline in the textiles division

This division grew despite marginal contribution from last year’s key businessdriver, the BT shelters business, owing to the massive growth in earnings from themonolithic construction business. Other contributors include building products and custommoulded products. Your Company introduced a number of novel products and solutions whichstrengthened the ‘Sintex’ brand recall and grew market share in key businessverticals.

Monolithic construction: It was another year of excellent results for yourCompany’s affordable housing programme which strengthened its position as the leaderin mass housing for EWS/LIG segment, vindicating the management’s initiative ofpioneering this technology in the Indian environment. Your Company’s ability todeliver superior-quality and low-cost mass housing solutions is reflected in the followingbusiness realities:

• Delivered significant number of dwelling units in 2009-10

• A sizeable unexecuted order book which represents revenue visibility over thecurrent year

The Central Government’s initiative to provide homes to every family below thepoverty line is expected to boost the Company’s growth plans. Moreover, your Companyhas taken definite steps to establish itself as a real estate developer to offer low-costhousing solutions under its own brand name.

Prefabricated structures: The prefabs business suffered a setback in 2009-10. This waslargely owing to slackened demand from the telecom sector. As telecom majors halted theirroll out plans, the demand for BT shelters remained absent. Your Company expects thisscenario to continue over the short term. What was heartening was that your Company’sestablished position as a total solution provider for telecom service providers yieldedimpressive returns. This opportunity is expected to grow over the coming years. YourCompany increased its focus on pre fabricated structures for education and health sectorswhere large capital for infrastructure creation is earmarked.

In 2008-09, your Company also introduced a new line to manufacture sandwich panels,which are expected to emerge as a revolutionary product group that will help the Companyredefine construction. Cold storages built with sandwich panels are gaining success andare expected to emerge as a robust growth engine over the short term. In 2009-10, yourCompany undertook a campaign to promote sandwich panels, a relatively lesser knownproduct.

Your Company expanded its range of doors and windows where PVC/UPVC windows witnessedincreasing acceptance owing to their various advantages like energy efficiency and soundproof over traditional windows. The doors and windows division, coupled with plasticsections, is expected to deliver impressive growth in the future.

Besides, your Company’s products gained international acceptance owing to superiorfunctional attributes.

Custom moulding: It was a very interesting year for your Company in this segment withnumerous successful product developments for diverse sectors catering to both global anddomestic customers. Some products were under advanced stages of approval, for others, yourCompany received orders which are expected to yield significant results.

Your Company actively pursued the OEM business, securing approval from companies likeJohn Deere, M&M, Cummins and Kirloskar Engines, among others, for specialised andcustomised products.

Additionally, your Company built upon its excellent business relationship with theelectrical sector to grow its revenue from the energy sector. Your Company is focusing onthe distribution and feeder-pillar boxes to capitalise on the opportunity emerging fromthe modernisation of the T&D segment of the energy value chain. Your Company is nowmoving towards a total solution provider by integrating various equipments with its boxesto be one-point source for utility companies. Your Company was rated the best contractorfor its turnkey projects in Rajasthan, an event that could create new businessopportunities in this geography.

In the FRP tanks segment, your Company increased its business visibility with approvalsfrom HPCL, Essar and IOC for its underground tanks.

Liquid management solutions: Water tanks, the Company’s flagship brand, maintainedits growth and expanded its presence across geographies with greater reach in rural andsemi-urban markets. Water tanks, maintained a dominant position and a range of panel typetanks for larger capacities was added to your Company’s product basket.

In anticipation of huge opportunities for decentralised waste water systems, theCompany increased focus on septic tanks, collaborating with Aqua Nishihara CorporationLtd, Thailand and Japan to develop Decentralised Wastewater Treatment Systems (DEWATS).The great utility of the packaged sewage treatment plants was reflected in severalsuccessfully installations across the country. Your Company expects to replicate thissuccess across wider regions in India over coming years. The Company’s otherinnovative solutions -- rain water harvesting system for drinking water and grey waterrecycling systems -- received good responses.

Material handling solution: The Company offered a total material handling solution toindustries and institutions by adding racking systems and equipment to its range,registering a positive growth.

Green initiatives and prospects: Your Company initiated green orientation aroundbuilt-up structures. It created awareness regarding sustainable development and greenbuilding products and technology in association with CEPT University, Ahmedabad. UnderSintex Chair, CEPT signed an MoU with the Indian Green Building Council for evaluation,approval and recommendation of various materials and technologies that form a part ofgreen buildings in India.

With the integration of certain ‘green’ elements, your Company offers varioustechnologies for affordable green housing solutions like decentralised wastewatertreatment systems, grey water recycling systems, solar water heating systems, biogasplants, composting bins and rain harvesting structures.

2) Textiles division

Following the global meltdown’s effect on advanced economies, consumptionexpenditure, especially fashion textile off take, was significantly curtailed, impactingthe textile business in 2009-10; turnover stood at Rs 343.63 crore in 2009-10 against Rs368.09 crore in 2008-09 while exports stood at Rs 27.07 crore against Rs 21.07 crore in2008-09. In line with global realities, your Company intelligently focused on the domesticmarket, especially on semi-urban and rural markets which sustained product offtake.Further, your Company expanded its product basket for women’s wear and added a numberof global and domestic customers to its largely branded-clientele.

Your Company continued to add new equipments replacing conventional machinery withtechnology-intensive, high-speed, contemporary variants, which is expected to drivebusiness volumes in the coming years.

Subsidiaries

During the year under review,

• Zeppelin Mobile System India Ltd, a subsidiary, became a wholly-owned subsidiaryas the Company acquired the balance 26% stake.

• Sintex Infra Projects Ltd, a wholly owned subsidiary, was incorporated inNovember,2009

• Esveegee Steel (Gujarat) Pvt. Ltd (now known as Sintex Oil and Gas PrivateLimited)- 100% equity stake was purchased in September, 2009

1) Zeppelin Mobile Systems India Ltd.

In 2009-10, the Company’s revenue grew 20.77% to Rs 133.84 crore as compared withRs 110.82 crore in 2008-09, driven primarily by telecom TSP contracts and also by thenewly established telecom training centre, EPC business and the strategic initiative ofshifting and expanding from telecom infrastructure to infrastructure space.

During the year under review, raw material expenses skyrocketed owing to the telecomsector dominating the sales mix. Higher salary and wage cost owing to induction of moreskilled labour increased human asset investment. In the future, higher value projectexecution is expected to reduce labour cost impact on turnover. The uncertainty on 3Gauction, BSNL mega infrastructure tender, site sharing by new operators and the technologyshift to outdoor BTS impacted new cell site demand and the margins.

During financial year 2009-10, Zeppelin devised and implemented a strategic path togradually diversify and become an infrastructure entity with interest in EPC contracts andgovernment businesses.

2) Bright AutoPlast Pvt. Ltd

With six manufacturing units across five locations, Bright AutoPlast reported a Rs191.13 crore revenue with improved profit margin during the period under review. Thecommissioning of its second facility at Chennai in March 2009 added significantly to theCompany’s growth and profitability. Moreover, product approvals for new applicationsof existing customers and a wider customer base helped improve the Company’s profits.The Company’s Pune unit is certified with TS-16949 certificate that provides forcontinual improvement, emphasising defect prevention and reduction of variation and wastein the supply chain.

3) Wausaukee Composites Inc. (WCI)

Wausaukee Composites Inc., despite the global crisis, reported topline of US$ 30.84 mnin 2009-10. The Company caters to New Flyer Bus Company, the largest North American busmanufacturer for a programme worth around US$1.20 mn annually. The Company also gainedfrom the launch of the Harley-Davidson and Tri-Glide Motorcycle Body Programme. With along-term view of wind energy development, especially in North America, the production ofwind turbine nacelles and blade hub covers for Acciona Wind Energy and Clipper Wind was onan upward trend. The Company was awarded the Siemens Transportation Systems as well asSalt Lake City Interior Components Programme of Mass Transit segment.

4) Nief Plastics SA

During 2009-10, despite an unprecedented crisis in Europe and negative GDP for theEurope area, Nief Plastics grew business revenue and preserved various profitabilityratios. The main reason for this positive performance and profitability ratios wereNief’s business diversity and associated technological and marketing expertise. NiefPlastics manufactures a wide variety of plastic products with applications in theautomotive, electrical and electronics, aeronautics and defence, household appliances andbuilding industries. Nief Plastics also acquired two more companies named SICMO and SIMOP,specialised in studying, making and testing metallic moulds for plastic injection or lightmetal alloy. The Company strengthened its position in Europe through these acquisitionsand a wider client base. The Company aims at group development through external growth, asthe economic situation favours consolidation of the plastic sector in Europe.

5) Sintex Infra Projects Ltd

A wholly-owned subsidiary was incorporated in November 2009 to cater exclusively to theinfrastructure sector. The Indian economy is targeting a double digit GDP growth rate in2011-12. Increase in demand for goods and services, fresh capital investment by privatesector in industrial and service sectors, buoyant capital market and heavy thrust bygovernment on infrastructure development is likely to boost and consolidate economicgrowth over next few years. In this economic environment, the construction industrycontinues to grow at a scorching pace. Given the positive economic climate and soundfundamentals, the industry is poised for a big leap. To achieve these paramount benefitsof the business, your Company thinks it’s the ideal time to get into this industry.

Sintex Infra Projects secured contracts worth Rs 174.50 crore from Northern States forwork relating to survey, investigate, design, supply, lay, commission RCC/PSC/HDPE/GRPpipes in trunk/ lateral branch sewers and its allied works such as construction of manholechambers, among others.

6) Esveegee Steel (Gujarat) Pvt. Ltd

The subsidiary was added through the acquisition of 100% equity stake and subsequently,the name was changed to Sintex Oil & Gas Pvt. Ltd.

Under the New Exploration Licensing Policy (NELP) for exploration of oil and naturalgas, Sintex Oil and Gas submitted bids for six inland type S-Block under the NELP-VIIIoffer. It emerged successful for three blocks - CB-ONN-2009/1, CB-ONN-2009/2 andCB-ONN-2009/7. As per the NELP guidelines, the Company will sign a production sharingcontract with the Indian Government to explore, develop and produce petroleum resources inthese blocks.

Re Set of Conversion price - FCCB

Pursuant to the terms and conditions of the Bonds, the conversion price has been reseton March 12, 2010 from Rs 580 per Equity Shares to Rs 493 per equity share.

Due to conversion price reset, on full conversion of FCCBs, the Company has to issue1,84,97,464 equity shares of Rs 2 each instead of 1,57,22,844 equity shares of Rs 2 eachas per original conversion price.

Employee stock option scheme

The shareholders of the Company had approved of its employee stock option plan (SintexIndustries Limited Employees Stock Option Scheme 2006) in February 2006. This ESOPS isadministered by the Sintex Employee Welfare Trust on the basis of recommendations of theCompensation Committee of the Board. In terms of the plan, the Company periodicallygranted stock options to eligible employees. The Company will conform to the accountingpolicies specified in the guidelines as amended periodically. The details of the schemeare set out in Annexure 1 of this report.

Changes in equity share capital

In 2009-10, there was no change in the share capital of the Company.

Directors

In accordance with the requirements of the Companies Act, 1956 and the Articles ofAssociation of the Company, Shri Ashwinbhai Lalbhai Shah, Dr. Lavkumar Kantilal and Shri,S.B. Dangayach retire by rotation, but being eligible offer themselves for reappointment.

Your Directors reappoint, subject to the approval of members at the meeting, Shri S. B.Dangayach as Managing Director for a period of 5 years from June 7, 2010.

For the kind perusal of the shareholders, a brief resume of each of them, the nature oftheir expertise and the name of the companies in which they hold directorships and thedetails of membership of the committees of the Board are enclosed. Your Directorsrecommend their reappointment.

Fixed deposits

Your Company did not float any deposit scheme.

Listing of shares and securities

The names and addresses of the stock exchanges where the Company’s securities arelisted are given below:

• The National Stock Exchange of India Ltd, Exchange Plaza, Plot No. C-1, G Block,IFB Centre, Bandra Kurla Complex, Bandra (East), Mumbai 400051

• Bombay Stock Exchange Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai400001

• Ahmedabad Stock Exchange Ltd, Kamdhenu Complex, Panjrapole, Ahmedabad 380015

• Singapore Exchange Securities Trading Limited, 2 Shenton Way, # 19 – 00 SGXCentre 1, Singapore 068804 (FCCB’S USD 225 million)

• Bombay Stock Exchange Limited (Wholesale Debt Market), Phiroze JeejeebhoyTowers, Dalal Street, Mumbai 400001 (NCD Rs 250 crores)

The Company paid listing fees to all the above stock exchanges for 2010-11.

Corporate Governance report

Your Directors adhered to the requirements set by the Securities and Exchange Board ofIndia’s Corporate Governance practices and implemented all the stipulationsprescribed.

A separate Corporate Governance report is furnished as a part of Directors’ reportand the Certificate from the Company’s Auditors regarding compliance with theconditions of Corporate Governance is annexed to it.

Your Company is complying with the provisions related to Corporate Governance as perclause 49 of the Listing Agreement. Your Company is also in the process of implementingthe Corporate Governance Voluntary Guidelines, 2009 issued by the Ministry of CorporateAffairs, Government of India on December, 2009

Directors’ responsibility statement

To the best of their knowledge and belief and based on the information obtained bythem, your Directors make the following statement in terms of Section 217 (2AA) of theCompanies Act, 1956:

1. That in the preparation of the annual accounts for the year ending March 31, 2010,the applicable accounting standards have been followed and there have been no materialdepartures.

2. That the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for that period.

3. That the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act, 1956for safeguarding the assets of the Company and for preventing and detecting frauds andother irregularities.

4. That the annual accounts for the year ending March 31, 2010 have been prepared on agoing concern basis.

Consolidated financial statements

The Company made an application u/s. 212(8) of the Companies Act, 1956 to the CentralGovernment seeking exemption from attaching an annual accounts of subsidiaries and expectsto receive the same.

The some key information has been disclosed in a brief abstract forming part of thisAnnual Report. Accordingly, the report contains the consolidated audited financialstatements prepared as per Clause 41 of the Listing Agreement entered into with the stockexchanges and prepared in accordance with the accounting standards prescribed by the ICAI.

Further, the annual accounts of the subsidiary companies and the related detailedinformation will be made available to any member of the Company/its subsidiaries at anypoint of time. The annual accounts of the subsidiary companies will also be kept forinspection by any member of the Company/its subsidiaries at the Registered Office of theCompany and that of the respective subsidiary companies.

Conservation of energy, technology absorption

A statement containing the necessary information required under the Companies(Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed tothis report as Annex 2.

Particulars of employees

The information required under section 217(2A) of the Companies Act, 1956, read withCompanies (Particular of Employees) Rules, 1975, forms part of this report as Annex 3.However, as permitted by section 219(I)(b ) (iv) of the Companies Act, 1956, this AnnualReport is being sent to all shareholders excluding the said Annexure. Any shareholderinterested in obtaining the particulars may obtain it by writing to the Company Secretaryat the Registered Office of the Company.

Insurance

All the insurable interests of the Company, including plant and machinery, stocks, lossof profits, standing charges and insurable interest are adequately insured.

Auditors

M/s. Deloitte Haskins & Sells, statutory auditors of the Company, retire and beingeligible, have indicated their willingness to be reappointed. The observations made in theAuditor’s Report are self-explanatory and do not call for any further comments underSection 217 of the Companies Act, 1956.

Cost accounting records

As required under the order made by the Central Government, the Company is maintainingnecessary cost accounting records with respect to cotton textiles.

Acknowledgements

Your Directors express their gratitude for the cooperation and support received fromvendors, customers, banks, financial institutions, shareholders and society at large. YourDirectors also take, on record, their appreciation for the contribution and hard work ofemployees across all levels. Without their commitment, inspiration and hard work, yourCompany’s consistent growth would not have been possible.

Annexure 1 to the Director’s Report

Disclosure pursuant to the provisions of SEBI (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines, 1999

Annexure 2 to the Director’s Report

Information required under Section 217(1)(e) of the Companies Act, 1956

a) Energy conservation measures taken:

1) In textile Division, Humidification Plants are audited for its performance bycalculation of volume and existing CFMs. From the report, CFMs are balanced in all plantsby changing blade angles and switching off the return and supply air fans, ultimatelyresulting into saving of energy.

2) In textile division, for supplying Raw Water earlier Two Working plus One StandbyV-Belt driven Pumps (each having 30 HP capacity) were running. By installation ofsubmersible pumps (10 HP – one working and one standby) all old V-Belts driven pumpsare now stopped resulting into saving of energy.

3) In textile division, for supplying Raw Water to Softening Plant earlier Two Workingplus One Standby Centrifugal Pumps (each having 25 HP capacity) were running. Byinstallation of submersible pump (20 HP – One Working and one standby) all oldcentrifugal pumps are now stopped resulting into saving of energy.

4) In textile division, overhead process water tank is installed. Before installationprocess water supply pump was running continuously 24 Hrs. After installation of overheadtank the working of this pump is reduced to 50 %.

5) Condensate water from CRP Plant taken back into system for re-use resulting intosaving of cost.

6) At central effluent treatment plant, earlier total four nos. Surface Aerator Fans (each having 60 HP capacity ) were running. After changing the process of treatment, oneno. surface aerator fan is stopped now resulting into saving of energy.

7) At central effluent treatment plant, earlier one no. blower motor (having 30 HPcapacity) was running continuously 24 Hrs. After changing the process of treatment,working hours of this blower motor is now reduced to 40% resulting into saving of energy.

8) At central effluent treatment plant, process chemical cost was cut down byimplementing new process steps. Earlier it was Rs 3.00 and now it is Rs 1.33 per 1000liter effluent water.

9) In plastic division during the year, several modifications were made in the mouldingmachines to increase the production with the same input of energy. This is expected tobring down the energy consumption. Several measures were taken for redesigning the energyconsumption in the other manufacturing departments.

b) Additional Investments and Proposals, if any, being Implemented for Reduction ofconsumption of energy.

1) In Textile division we are installing High Efficient L. R. Ring frame machine in ourSpinning Section in place of old conventional Ring Frame machine resulting intoachievement of substantial power savings.

2) In textile division, Old Semi Automatic Type Staffi Made Yarn Dyeing Machines are tobe replaced with fully automatic Gofront Made Yarn Dyeing Machines which are more energyefficients.

3) In plastics division, we are considering to use energy efficient burners and energyefficient light fittings in the whole plant.

c) Impact of the measures (a) and (b) above for reduction of the Energy consumption andconsequent impact on the cost of Production of goods.

1) In Textile Division higher and good quality of production achieved with saving ofconsiderable power consumption.

2) The above mentioned measures have resulted into energy saving and subsequentreduction in energy cost and hence in cost of production.

3) In Plastics Division the impact of energy saving devices will be peripheral in thebeginning. It can however be substantial if the whole programme is implemented.

d) Total energy consumption and energy consumption per unit of production in respect ofthe Company's products.

Details are provided in Form A annexed hereto.

e) Efforts made in technology absorption

a) In Plastic Division we have been able to assimilate and develop products based ontechnology of Containment solutions, USA in the field of underground tanks, manholes, wetwells etc.

b) We have been further able to develop several models of package type waste watertreatment plants and septic tanks to address problem of wastewater treatment at site in adecentralized manner through technical collaboration with M/s. Aqua Nishihara CorporationLtd., Japan.

c) We have also developed appropriate technologies and techniques in the field ofwindows, doors and SMC products, among others.

f) Activities relating to exports, initiatives taken to increase exports, developmentof new markets for products and services and export plans.

In Textile division, the Company has obtained quality certification "OEKOTEX" Standard 100 Certificate for Eco-friendly Products, Certified by TESTEX,Switzerland. Ongoing initiatives are regularly made to explore new markets and widen thereach of the products, by regular meetings with customers and participation inexhibitions. These all has enhanced the competitiveness of our products in global markets.

g) Total foreign Exchange used and earned.

FORM - A

Form for disclosure of particulars with respect to consumption of energy.

The variation in consumption in power and fuel was due to a different product mixbetween current and previous year.

FORM - B

Form for disclosure of particulars with respect to absorption of technology, research& development