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4 Chairmanʼs Review new hardware purchased, amortization costs relating to the HospitalNet solution (that finally is in live operation) and a provision for advance rental paid on a lease that is currently in dispute. Some of these are one-time costs but the company is investigating ways and means of controlling and managing its recurrent costs in this period of high inflation. I am pleased to provide this message on the recently concluded year of operation at E-Channelling Limited. The period 2007/8 has seen some re-alignment of the operations whereby some of the non-core activities were outsourced. This included the company s call center operation now being handled via the Dialog call centre facility and the server farm being re-located at the SLT Internet Data Centre. Such initiatives resulted in the company being able to relocate to a new office and all operations which were previously carried out in 3 different locations coming under the one roof for effective manageability. This migration was all done seamlessly and with minimal downtime to the client which is indeed a significant achievement. The year also saw the appointment of a new Chief Executive Officer (CEO) Mr. Ravi Raveendran. Ravi has over 15 years experience in the IT and ITeS industries covering all aspects of sales, marketing, finance and operations. He has an MBA and BEng in Electronics from the UK and has spent most of his working life in the UK. His last role in the UK was General Manager (Business Equipment Division) NEC UK Ltd prior to returning to Sri Lanka in In Sri Lanka he was last involved in setting up and running the Business Process Outsourcing company - The Edge Group (Pvt) Ltd of which he is now the non-executive Chairman. Ravi has a track record of delivering high quality results in each of his previous roles and will be an asset to E- Channelling. Please join the Board in welcoming Ravi to E-Channelling and we wish him well in his endeavours with the Company. The company continued its monopoly of the market in the area of channeling with a majority of the hospitals using our channeling solution as its primary booking system. This is indeed significant and bookings via this system increased 30% and revenues by a healthy 64% but the company still incurred a loss of Rs 10.7 mill during the period under review. This was due primarily to the increased cost of labour and overheads, costs incurred in setting up the new offices, increased depreciation on the The HospitalNet solution which automates the operations of a hospital is now live at Nawaloka Hospital which is one of the largest in South Asia handling a large volume of transactions. A monthly revenue is now forthcoming from this implementation and this will contribute to the top line. With this solution in place the company now has a good portfolio of solutions for the healthcare industry and is well positioned to approach other hospitals and generate additional revenue streams through license fees in the coming year. In addition, the intellectual property (IP) created through these products continue to bring considerable value to the company. In the next year the company will look at actively expanding its user base for the HospitalNet system in order to establish itself as the preferred solution for the local hospitals. Given the reference the company will now have with Nawaloka Hospitals similar opportunities could be investigated with other hospitals in the South Asian region. I am hopeful that the company s considerable investments in building this product and its strategy of securing additional licenses will assist in effectively recouping these investments in the next few years. The healthcare sector continues its growth in Sri Lanka given the new hospitals being setup and the large scale expansions being undertaken by the existing operators. The company with a new CEO, portfolio of end-to-end solutions, investments in new premises, state of the art hardware, and restructured operations is now well geared to launch an active marketing drive and capitalize and profit from these trends. I would like to take this opportunity to thank you the shareholders for keeping faith in the company, Board of Directors for their continued guidance and support, the CEO and the team at E-Channelling for their tireless efforts. Our special thanks and appreciation is due to our valued customers for choosing E-Channelling as their preferred healthcare platform and for placing their trust in the company. You have all contributed in no small measure in ensuring value to the shareholders and building a company that is well geared to dominate this industry in the future. Suresh Bartlett Colombo 30th August

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11 Report of the Directors on the state of affairs of the company (Contd) Statutory Payments The Directors to the best of their knowledge and belief are satisfied that all statutory payments in relation to the government and the employees have been made on time. Environment, Health and Safety The Company policy continues to ensure that all environmental, health and safety regulations are strictly adhered to minimize any adverse effect to the environment. Corporate Governance/Internal Control The Board of Directors are the focal point of the Company s corporate governance process and are ultimately accountable and responsible for the performance and affairs of the Company. The Company maintains a well established control framework comprising clear structures and accountabilities. The Company has identified the major process and procedures have been properly designed for those identified processes and periodic reviews have been carried out to ensure the effectiveness. Contingent Liabilities There were no material contingent liabilities outstanding as at 31st March Post Balance Sheet Events Subsequent to the date of the Balance Sheet no circumstances have arisen which would require adjustments to the accounts. Significant post balance sheet events which in the opinion of the Directors require disclosure are described in Note 22 to the financial statements. Annual General Meeting The Eighth Annual General Meeting of the Company will be held at the Anthurium Hall, Hotel Renuka, 328 Galle Road, Colombo 03 on Tuesday 30th of September 2008 at a.m. For and on behalf of the Board of Directors of e-channelling LIMITED Director Director Secretaries S S P Corporate Services (Private) Limited Date: 25th August

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31 Notice of Annual General Meeting NOTICE IS HEREBY GIVEN that the Eighth Annual General Meeting of e-channelling Limited will be held at the Anthurium Hall, Hotel Renuka, 328 Galle Road, Colombo 03 on Tuesday30th September 2008 at am for the purpose. AGENDA 1. To receive and consider the Report of the Directors on the State of Affairs of the Company and the Statement of Accounts for the year ended 31st March 2008, with the Report of the Auditors thereon. 2. To re-elect Mr. N Weerasekera a Director who retires by rotation at the Annual General Meeting in terms of Article 89 of the Articles of Association of the Company. 3. To re-elect Mr. S S Bartlett a Director who retires by rotation at the Annual General Meeting in terms of Article 89 of the Articles of Association of the Company. 4. To re-appoint Messrs KPMG Ford, Rhodes, Thornton and Company, Chartered Accountants as Auditors of the Company and to authorise the Directors to determine their remuneration. 5. To authorise the Directors to determine contributions to charities for ORDER OF THE BOARD OF DIRECTORS OF e-channelling LIMITED S S P CORPORATE SERVICES (PRIVATE) LIMITED SECRETARIES Date: 29th August 2008 Note: (a) A member who is unable to attend and vote at the above mentioned meeting is entitled to appoint a Proxy to attend and vote in his or her place. A proxy need not be a member of the Company. A Form of Proxy accompanies this Notice. (b) A Form of Proxy is annexed to this notice. (c) The completed Form of Proxy should be deposited at the Registered Office of the Company, Suncity Towers, Mezzanine Floor, No.18, St. Anthony s Mawatha, Colombo 03 not later than 48 hours before the time appointed for the holding of the meeting. 28

32 Form of Proxy I /We... of... being a member/s of the above Company, hereby appoint... of... or failing him. Mr. Samuel Sureshkumar Bartlett of Colombo or failing him Mr. Tyronne Wilfred De Silva of Colombo or failing him Mr. Thalpawila Kankanamage Don Aruna Prasad Samarasinghe of Colombo or failing him Mr. Nissanka Bandara Weerasekera of Colombo or failing him Mr. Satyajit Nilkamal Seneviratne of Colombo or failing him as my/our proxy to represent me/us and vote on my/our behalf at the Eighth Annual General Meeting of the Company to be held on 30th September 2008 and at any adjournment thereof and at every poll which may be taken in consequence of the aforesaid meeting and to VOTE as indicated below: FOR AGAINST 1. To receive and consider the Report of the Directors on the State of Affairs of the Company and the Statement of Accounts for the year ended 31st March 2008, with the Report of the Auditors thereon. 2. To re-elect Mr. N Weerasekera a Director who retires by rotation at the Annual General Meeting in terms of Article 89 of the Articles of Association of the Company. 3. To re-elect Mr. S S Bartlett a Director who retires by rotation at the Annual General Meeting in terms of Article 89 of the Articles of Association of the Company. 4. To re-appoint Messrs KPMG Ford, Rhodes, Thornton and Company, Chartered Accountants as Auditors of the Company and to authorise the Directors to determine their remuneration. 5. To authorise the Directors to determine contributions to charities for Signed this... day of...two Thousand and Eight. Signature:... Note: Please delete the inappropriate words. 1. Instructions for completion of form of proxy are noted on the reverse 2. A proxy need not be a member of the Company 3. Please mark X in appropriate cages, to indicate your instructions as to voting 29

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