diff --git a/CHANGELOG.md b/CHANGELOG.md
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -1,6 +1,24 @@
 # Change Log
 All notable changes to this project will be documented in this file.
 
+## [0.1.2.1] - 2015-06-02
+### Changed
+- `libsass/VERSION` file is generated during sdist phase.
+
+### Fixed
+- all tests pass (libsass reports correct version).
+
+## [0.1.2.0] - 2015-06-01
+### Added
+- Bindings to `sass_string_is_quoted`, `sass_string_set_quoted` and
+  `sass_make_qstring`.
+
+### Changed
+- libsass @ 3672661 is used.
+
+### Fixed
+- Link to compare in this changelog.
+
 ## [0.1.1.1] - 2015-04-12
 ### Added
 - This CHANGELOG file.
@@ -19,5 +37,7 @@
 - Bindings to Libsass C API
 - Basic tests
 
-[0.1.1.1]: https://github.com/jakubfijalkowski/hlibsass/compare/v10.1.1.0...0.1.1.1
+[0.1.2.1]: https://github.com/jakubfijalkowski/hlibsass/compare/v0.1.2.0...v0.1.2.1
+[0.1.2.0]: https://github.com/jakubfijalkowski/hlibsass/compare/v0.1.1.1...v0.1.2.0
+[0.1.1.1]: https://github.com/jakubfijalkowski/hlibsass/compare/v0.1.1.0...v0.1.1.1
 [0.1.1.0]: https://github.com/jakubfijalkowski/hlibsass/compare/v0.1.0.0...v0.1.1.0
diff --git a/Setup.hs b/Setup.hs
--- a/Setup.hs
+++ b/Setup.hs
@@ -6,7 +6,8 @@
                                                      absoluteInstallDirs,
                                                      localPkgDescr)
 import           Distribution.Simple.Setup
-import           Distribution.Simple.Utils          (rawSystemExit)
+import           Distribution.Simple.Utils          (rawSystemExit,
+                                                     rawSystemStdout)
 import           System.Directory                   (getCurrentDirectory)
 
 main = defaultMainWithHooks simpleUserHooks
@@ -15,12 +16,13 @@
   , confHook = \a f -> confHook simpleUserHooks a f >>= updateExtraLibDirs
   , postCopy = copyLibsass
   , postClean = cleanLibsass
+  , preSDist = \a f -> (updateLibsassVersion a f >> preSDist simpleUserHooks a f)
   }
 
 makeLibsass :: Args -> ConfigFlags -> IO ()
 makeLibsass _ flags =
-    rawSystemExit (fromFlag $ configVerbosity flags) "env"
-        ["make", "--directory=libsass"]
+    let verbosity = fromFlag $ configVerbosity flags
+    in rawSystemExit verbosity "env" ["make", "--directory=libsass"]
 
 updateExtraLibDirs :: LocalBuildInfo -> IO LocalBuildInfo
 updateExtraLibDirs localBuildInfo = do
@@ -53,3 +55,10 @@
 cleanLibsass _ flags _ _ =
     rawSystemExit (fromFlag $ cleanVerbosity flags) "env"
         ["make", "--directory=libsass", "clean"]
+
+updateLibsassVersion :: Args -> SDistFlags -> IO ()
+updateLibsassVersion _ flags = do
+    let verbosity = fromFlag $ sDistVerbosity flags
+    ver <- rawSystemStdout verbosity "env" [ "git", "-C", "libsass", "describe",
+        "--abbrev=4", "--dirty", "--always", "--tags" ]
+    writeFile "libsass/VERSION" ver
diff --git a/hlibsass.cabal b/hlibsass.cabal
--- a/hlibsass.cabal
+++ b/hlibsass.cabal
@@ -1,5 +1,5 @@
 name:                hlibsass
-version:             0.1.2.0
+version:             0.1.2.1
 license:             MIT
 license-file:        LICENSE
 author:              Jakub Fijałkowski <fiolek94@gmail.com>
@@ -28,6 +28,7 @@
   libsass/utf8/*.h
   libsass/Makefile
   libsass/LICENSE
+  libsass/VERSION
   CHANGELOG.md
 
 source-repository head
diff --git a/libsass/VERSION b/libsass/VERSION
new file mode 100644
--- /dev/null
+++ b/libsass/VERSION
@@ -0,0 +1,1 @@
+3.2.4-18-g3672