Dear Members,

The Directors hereby submits the twenty-eighth annual report of the business and operations of your Company along with the audited financial statements, for the financial year ended March 31, 2018

OPERATIONS

During the year under review, your Company was not able to utilize the manufacturing capacity at its optimum. During this financial year, the Company completed OTS with all banks and their total dues were paid. A loan with ARC is outstanding and will be paid in installments as per their sanction with no interest payable on the outstanding loan as per the terms of the sanction.

Your Company reported total revenue of Rs.18327.25 Lakhs against Rs.29608.04 Lakhs during the last financial year. The Company earned a profit of Rs.263.38 Lakhs after providing Rs.1639.32 Lakhs towards depreciation and Rs.855.89 Lakhs towards interest during the current financial year as compared to a profit of Rs.7874.06 Lakhs in the last financial year.

DIVIDEND

Your directors have not recommended any dividend for the year ended 31st March, 2018, in view of the restrictions under Section 123 of the Companies Act, 2013 (the Act) as amended by the Companies (Amendment) Act, 2015, becoming effective from 29th May, 2015, by virtue of which no Company can declare dividend unless carried over previous losses and depreciation not provided in previous year or years, are set off against profit of the Company for the current year.

DIRECTORS

a) Changes in Directors and Key Managerial Personnel:

In accord with the provisions of Section 152 of the Act read with Article 91 of the Article of Association of the Company, S. L. Agarwal, Managing Director will retire by rotation at the ensuing AGM and being eligible, offer himself for reelection. The Board has recommended their re-election.

b) No. of Meetings of the Board:

Five meetings of the Board were held during the year ended March 31, 2018.

c) Declaration by Independent Directors:

All Independent directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and as per respective regulation of SEBI Listing Regulation(LODR) 2015. The declaration is received in the first meeting of Board of Directors for the year.

d) Separate Meeting of Independent Director:

Details of the separate meeting of Independent Directors held in terms of Schedule IV of the Act and Regulation 25(3) of the Listing Regulations are given in the Corporate Governance Report.

STATUTORY AUDITORS

M/s T. More & Co. Chartered Accountants (FRN 327844E) were appointed as Statutory Auditors of your Company at the Annual General Meeting held on 23rd September 2017, for a term of five consecutive years. However, M/s T. More & Co. have tendered their resignation from the Auditorship with effect from the conclusion of the ensuing Annual General Meeting of the shareholders of the Company.

The Company has received special notice u/s 115 of the Companies Act, 2013 from two shareholders of the Company expressing their desire to propose the name of M/s G. P. Agrawal & Co., Chartered Accountants as Statutory Auditors of the Company.

M/s G. P Agrawal & Co. has given their consent to act as Statutory Auditor of the Company, if appointed.

There is no qualification, reservation, adverse remark or disclaimer given by the Auditors in their report.

Clarification/explanation on remarks in Independent Auditors’ Report

a. In the comments of Auditors under para "EMPHASIS OF MATTER" regarding confirmation of accounts, the director states that all the balance confirmation letters have been sent to respective vendors and customers, confirmations from all have not been received.

b. In Annexure B point No. 1(a) of the Auditors’ Report regarding updation of fixed asset Register, your Directors have to state that fixed asset register will be completed in the next financial year.

c. As regards delay in payment of undisputed statutory dues mentioned in Annexure B point no. 7(a) to the Auditors’ Report, it is submitted that it was due to the continuous adverse financial condition and no banking facility currently available to the Company. However, we hereby submit that all the statutory dues relating to the financial year 2017-18 have since been paid.

COST AUDIT

Cost Audit is not applicable to the Company.

SECRETARIAL AUDIT

Your Board appointed M/s. AL & Associates, Practicing Company Secretaries, to conduct a secretarial audit of the Company for the financial year ended 31st March 2018. The report of the M/s. AL & Associates is provided in the Annexure ‘A' forming part of this report, pursuant to Section 204 of the Act.

DEPOSITS

The Company has neither accepted nor renewed any deposits as envisaged in Section 73 of the Companies Act, 2013 during the year under review.

KEY MANAGERIAL PERSONNEL:

Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company are Mr. S.L. Agarwal, Managing Director, Mrs. Sima Jhunjhunwala, Chief Financial Officer and Mrs. Sweta Biyani, Company Secretary. During the year, there has been no change in the Key Managerial Personnel of the Company. Details pertaining to their remuneration have been provided in the Extract of Annual Return annexed hereto and forming part of this Report.

COMMITTEES OF THE BOARD:

Pursuant to various requirements under the Act and the Listing Regulations, the Board of Directors has constituted various committees such as Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee and Share Transfer Committee. The details of composition, terms of reference, etc., pertaining to these committees are mentioned in the Corporate Governance Report.

AUDIT COMMITTEE:

All recommendations made by the Audit Committee during the year were accepted by the Board.

WHISTLEBLOWER POLICY:

The Company has in place a Whistleblower Policy to deal with unethical behavior, victimization, fraud and other grievances or concerns, if any. The aforementioned whistleblower policy is available on the Company’s website at the following web-link: https://www.websolar.com/investor-corner/corporate-governance.

POLICY ON SELECTION AND REMUNERATION OF DIRECTORS:

Based on the recommendation of the Nomination & Remuneration Committee, the Policy on Selection & Remuneration of Directors, Key Managerial Personnel and other employees was revised and adopted by the Board of Directors at their meeting held on 21.08.2017. The said policy was made applicable w.e.f 01.10.17.

BOARD EVALUATION:

Pursuant to the provisions of the Act and Regulation 17 of the Listing Regulations, the Board has carried out the evaluation of its own performance and that of its Committees as well as evaluation of the performance of the individual directors. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report attached to this Report.

LISTING OF SECURITIES IN STOCK EXCHANGES

The shares of the Company are listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited.

Outstanding FCCBs of the Company are listed on Singapore Stock Exchange.

CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING

In terms of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 your Company has adopted the Code of Conduct for Prevention of Insider Trading, approved by Board of Directors, inter alia, prohibits trading in securities of the Company by Directors and employees on the basis of unpublished price sensitive information in relation to the Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNING AND OUTGO

Information in accordance with the provisions of Section 134(3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 regarding conservation of energy, technology absorption, foreign exchange earnings and outgo are given in the Annexure B, which forms part of this report.

RISK MANAGEMENT POLICY:

The policy on risk assessment and minimization procedures as laid down by the Board are periodically reviewed by the Audit Committee and the Board. The policy facilitates the identification of risks at the appropriate time and ensures necessary steps to be taken to mitigate the risks. Brief details of risks and concerns are given in the Management Discussion and Analysis Report.

EXTRACT OF ANNUAL RETURN

The extract of Annual Return in form MGT - 9 is given in Annexure C to the Report.

MATERIAL CHANGES AND COMMITMENTS:

There are no material changes and commitments affecting the financial position of the Company between the end of the financial year i.e. 31st March 2018 and the date of this Report.

SIGNIFICANT AND MATERIAL ORDERS:

There are no significant/ material orders passed by the Regulators / Courts / Tribunals which would impact the going concern status of the Company and its future operations.

INTERNAL FINANCIAL CONTROLS:

The Company has in place adequate internal financial controls with reference to the financial statements. During the year, such controls were reviewed and no reportable material weakness was observed

ANNUAL CSR REPORT

The Company has formed the CSR Committee at the end of last financial year. However, due to cash crisis the Company could not spend any amount on CSR activities during the financial year but has considered to spent the amount in the financial year 18-19 if there are profits in the profit and loss account.

MANAGERIAL REMUNERATION AND PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of managerial personnel and employees of the Company is attached herewith in Annexure D.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

In line with the requirements of Companies Act,2013 and Listing Regulations, your company has formulated a Policy on Related Party Transactions which is also available on the Company’s website at https://www.webelsolar.com/investorscorner/ corpoarte-governance. The policy intends to ensure that proper reporting, approval and disclosure processes are in place for all the transaction between the Company and Related Parties.

All related party Transactions are in place before the Audit Committee for review and approval. All related party transactions that were entered into during the financial year were on arm’s length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the Company with promoters, key managerial personnel or other designated persons which may have potential conflict with the interest of the Company at large. Necessary disclosure regarding transactions with related parties has been made in the Notes to the Audited Accounts.

All related party transactions entered during the year were in the ordinary course of the business and at arm’s length basis. No material related party transactions, i.e. transactions exceeding 10% of the annual consolidated turnover as per the latest audited financial statement, were entered during the year by our Company. Accordingly, the disclosure of related party transactions as required under section 134(3)(h) of the Companies Act,2013, in Form AOC-2 is not applicable.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

The Company has not given any Loan, Guarantee or made any investments or provided any security in violation of section 186 of Companies Act, 2013.

STATE OF AFFAIRS OF THE COMPANY

The Company has made a settlement with all the lenders of working capital and term loan. No Due Certificates have been received from the banks. The Company has made expansion in the year thereby increasing its production capacity from 200 MW to 280 MW (Cell Line) and Module line from 90 MW manual line to 250 MW fully automated Module line. Your Company is planning to expand its existing capacity further to 300 MW (Cell Line) and Module line to 500 MW from existing 250 MW.

CORPORATE GOVERNANCE REPORT

Maintaining high standards of Corporate Governance has been fundamental to the business of the Company since its inception. A separate report on Corporate Governance along with a certificate from the Auditors of the Company regarding Compliance of Conditions of Corporate Governance as stipulated under Listing Regulations is annexed in Annexure-E, which forms part of this report. A certificate of CFO of the Company in terms of Listing Regulations, inter alia, confirming the correctness of financial statements and cash flow statements, adequacy of internal control measures is also annexed.

The extract of annual return in Form MGT-9 as required under section 92(3) of the Companies Act and Rule 12 of the companies (Management and Administration) Rules, 2014 is appended as an Annexure to this Annual Report.

SEXUAL HARASSMENT AT WORKPLACE

Your Company has in place a formal policy for the prevention of sexual harassment of its employees at the workplace. During the year, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

DIRECTORS' RESPONSIBILITY STATEMENT

We, the Directors of the Company, hereby confirm that, pursuant to provisions of section 134(5) of the Companies Act, 2013, in respect of financial year under review:

i) In the preparation of the Annual Accounts for the financial year ended 31st March 2018, the applicable accounting standards have been followed and there are no material departures from the same;

ii) We 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 as at 31st March 2018 and of the Profits of the Company for that period;

iii) We have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing, and detecting fraud and other irregularities; and

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

v) We have laid down internal financial controls for the Company and that such internal financial controls are adequate and operating effectively.

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

ACKNOWLEDGEMENTS

The directors place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment towards their duty leading to cordial industrial relations.

The Board places on record its appreciation for the support and co-operation the Company has been receiving from its suppliers, distributors, retailers, business partners and others associated with it as its trading partners. The Company looks upon them as partners in its progress and has shared with them the rewards of the growth.

The Board of Directors take this opportunity to place on record its deep sense of gratitude for the continued support, assistance and co-operation received from the all the shareholder, Customers, Vendors, Government Authorities and Banks.

On behalf of the Board of Directors

For WEBSOL ENERGY SYSTEM LIMITED

D. Sethia S. L. Agarwal

Independent Director Managing Director

Date : 31st August, 2018

Place : Kolkata