Dear Shareholder''s
 
 The Directors are pleased to present the Twenty Second Annual Report
 and the Audited Accounts for the financial period ended 30th June,
 2012.
 
 FINANCIAL RESULTS                                        (Rs. In Lacs) 
 
                                                2011-12       2010-11
 
 Gross Income from Sales and other operations 13,520.40     18,478.75
 
 Profit / (Loss) before interest,
 depreciation & taxes                        (17,310.27)     2,740.53
 
 Less: Interest                                3,175.00      1,292.90
 
 Profit / (Loss) before depreciation 
 and taxes                                   (20,485.27)     1,447.63
 
 Less: Depreciation                            1,995.50        918.85
 
 Profit / (Loss) before Tax                  (22,480.77)       528.78
 
 Less: Provision for taxes including
 deferred taxes                                 (937.77)      (347.24)
 
 Profit / (Loss) after Tax                   (23,418.54)       181.54
 
 Add: Balance brought forward from 
 previous period                               2,771.81      2,590.27
 
 Balance Carried to Balance Sheet            (20,646.73)     2,771.81
 
 The last financial period of fifteen months was marked by unimaginable
 and unexpected global downturn in the solar photovoltaic industry
 mainly due to the crisis in Europe and the sharp decline in the sales
 realisations. At the same time, the industry was more so affected
 because of the historic devaluation of the Indian currency against the
 US Dollars. These factors had an impact on your Company also and as
 such the capacity was underutilised.
 
 During the fifteen months period under review your company reported a
 total income of 13,520.40 Lacs against 18,478.75 Lacs during the last
 accounting period for nine months. After providing Rs. 1995.50 Lacs
 towards depreciation and Rs. 3,175.00 lacs towards interest, the company
 suffered a loss of Rs. 22,480.77 Lacs during 2011-12 as compared to a
 profit ofRs. 528.78 Lacs in 2010-11.  The heavy losses resulted in severe
 liquidity crisis making it difficult to service the debts and this
 prompted your Company to approach its lenders to restructure the
 existing debts.
 
 DEBT RESTRUCTURING
 
 In its endeavour to survive and revive the business your Company
 applied to the Banks / Institutions to restructure the debts during
 December 2011. The restructuring was proposed as a solution to the
 present problem of your Company as well as the lenders and ensure time
 bound process of revival and growth. As such the lead bank of your
 Company approved and sanctioned the restructuring package under
 bilateral scheme during March 2012. The package is effective from
 01.10.2011 and includes, inter-alia, the carving out of losses into
 working capital term loan (WCTL), rescheduling of the repayment period
 of such WCTL and other Term Loans with an initial moratorium period of
 24 months from the effective date. The interest on loans during the
 moratorium period will be funded by additional funded interest term
 loan (FITL).
 
 STATUS OF IMPLEMENTATION OF EXPANSION PROJECT
 
 Your Company''s mission of achieving 120 MW by the end of 2011-12 could
 not take shape due to market conditions and the timing of
 implementation of the same will now depend on the outlook of the
 industry.
 
 DIVIDEND
 
 Due to huge losses as reported, the Board of Directors of your company
 could not recommend any dividend for the financial period ended 30th
 June, 2012.
 
 DIRECTORS
 
 During the year under review Mr. S. P. Bangur, Mr. O. P. Agarwal and
 Mr. Sameer Agarwal resigned from the office of Directors w.e.f.
 07.11.2011, 29.02.2012 and 02.06.2012, respectively. The Board put on
 record their valuable guidance and services rendered during their
 tenure as Directors of the Company.
 
 Mr. Biswa Ranjan Sengupta and Mr. Santosh Kumar Tibrewalla were
 appointed as Directors of the Company to fill up casual vacancy caused
 by the resignation of Directors.
 
 According to the provisions of Articles of Association of the Company
 and the Companies Act, 1956, Mr. Biswa Ranjan Sengupta and Mr. Santosh
 Kumar Tibrewalla, Directors will retire by rotation at the forthcoming
 Annual General Meeting and being eligible offer themselves for
 re-appointment.
 
 STATUTORY AUDITORS
 
 M/s. Agarwal Sanganeria & Co., Chartered Accountants, the Statutory
 Auditors of your Company retire at the ensuing Annual General Meeting
 and have confirmed their eligibility for re- appointment at the
 forthcoming Annual General Meeting under section 224(1B) of the
 Companies Act, 1956.
 
 STATUTORY AUDITORS'' REPORT
 
 On the Statutory Auditor''s observations, reply from the management is
 as under:
 
 a.As mentioned in para (iii) of the Annexure to the Auditors'' Report,
 regarding irregularity in receipt and payment of principal and interest
 to and from parties covered under section 301 of the Companies Act,
 1956 , the irregularity was due to financial constrains owing to heavy
 losses. Company has initiated legal action in respect of loan given.
 
 b.As mentioned in para (ix) of the Annexure to the Auditors'' Report,
 regarding delay in deposit of undisputed statutory dues as on 30th June
 2012, the same is due, because of adverse cash flow situation of the
 Company. The said dues will be paid in due course of time.
 
 c.As mentioned in para (x) of the Annexure to the Auditors'' Report,
 regarding accumulated losses exceeding the net worth and cash losses
 incurred by the Company, the same was due to unexpected global downturn
 in the solar photovoltaic industry mainly due to the crisis in Europe
 and the sharp decline in the sales realisations. These factors had an
 impact on your Company also and as such the capacity was underutilised.
 As regards erosion of Net Worth, the Company is taking the necessary
 steps.
 
 d.As mentioned in para (xi) of the Annexure to the Auditors'' Report,
 regarding delays in repayment of principal sums and interest thereon to
 banks / financial institutions, the same was due to heavy cash losses
 resulting in severe liquidity crisis.
 
 Pursuant to this, the Company approached the lenders for restructuring
 of its debts and the lead Bank of the Company approved and sanctioned
 the restructuring package, under bilateral scheme.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 We, the Directors of the Company, hereby confirm, pursuant to
 provisions of section 217 (2AA) of the Companies Act, 1956, in respect
 of financial period under review
 
 i) That in the preparation of the Annual Accounts for the financial
 period ended 30th June, 2012, the applicable accounting standards have
 been followed and there are no material departures from the same;
 
 ii) That 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 period as at 30th June, 2012
 and of the loss of the Company for that period;
 
 iii) That we have taken proper and sufficient care for the maintenance
 of adequate accounting records in accordance with the provisions of the
 Companies Act, 1956 for safeguarding the assets of the Company and for
 preventing, and detecting fraud and other irregularities; and
 
 iv) That we have prepared the annual accounts on a going concern
 basis.
 
 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.
 
 CORPORATE GOVERNANCE
 
 As required under Clause 49 of the Listing Agreement with the Stock
 Exchanges, a report on Corporate Governance along with a certificate
 from Auditors of the Company regarding Compliance of Conditions of
 Corporate Governance, certification by CEO and the Management
 Discussion & Analysis Report are given in the enclosed Annexure - B,
 which forms part of this Report.
 
 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.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNING
 AND OUTGO
 
 Information in accordance with the provisions of Section 217(1) (e) of
 the Companies Act, 1956 read with the Companies (Disclosure of
 Particulars in the report of Board of Directors) Rules , 1988 regarding
 conservation of energy, technology absorption, foreign exchange
 earnings and outgo are given in the Annexure -A, which forms part of
 this report.
 
 INDUSTRIAL RELATIONS
 
 The industrial relation during the period 2011-12 had been cordial.
 The Directors take on record the dedicated services and significant
 efforts made by the Officers, Staff and Workers towards the progress of
 the Company.
 
 PARTICULARS OF EMPLOYEES
 
 During the period under review none of the employees were in receipt of
 remuneration in excess of the amount prescribed under Section 217(2A)
 of The Companies Act, 1956.
 
 ACKNOWLEDGEMENT
 
 The Board of Directors would like to place on record their grateful
 appreciation for the support, assistance and co-operation received from
 the Financial Institutions, Banks and the Government Authorities during
 the period under review. The Board is thankful to the shareholders for
 their support to the Company.
 
                                 On behalf of the Board of Directors, 
 
                                    For WEBSOL ENERGY SYSTEM LIMITED
 
 S. L. Agarwal                                           S. Vasanthi
 
 (Managing Director)                 Director (Technical & Marketing)
 
 Date: 25th October 2012
 
 Place: Kolkata