ANNUAL REPORT 1999-2000 S KUMARS. COM LIMITED CHAIRMAN'S SPEECH S Kumars. com Ltd. FIRST ANNUAL GENERAL MEETING, AUGUST 2, 2000 My dear shareholder friends A hearty welcome to our first annual general meeting. I am glad to inform you that by the grace of god our project is progressing well and we are on our way to establish one of the most exciting and ambitious plans of our times. e-defining business: the sustainable advantage of our network The task of networking a billion people who speak in 280 known dialects, live in 5500 towns and 6 lakh villages is an enormous one. Add to this the abysmally low penetration levels of phone lines (2 per hundred and personal computers (4 per thousand), and this task becomes even more challenging. Nevertheless, networking India is critical if we as a nation are to attain our rightful place in the 21st century. Our company has always viewed these challenges as opportunities that, when overcome, will provide the company and the nation with a sustainable advantage in the long term. Our strategy to overcome these challenges is to redefine the way business is done in India, by integrating cutting edge technologies with the centuries old traditional Indian business ethos. We are setting up an 'Information Infrastructure' which will facilitate the whole gamut of e-commerce, spread education, and aid in removing information asymmetry across the country. Today, we are on the verge of becoming a truly national network because of the phenomenal response we have garnered from all across the country: over 53,000 applications from prospective franchises from as many as 3287 towns and cities in India. For instance, we have received 10,157 applications from 307 cities in Maharashtra; 3769 applications from 288 cities in Andhra Pradesh and 627 applications from the far-flung North Eastern states spread over 23 cities. Of course, this has been possible due to the intense and aggressive marketing efforts undertaken by the company. We were the firs, Indian company to promote our domain name through television (today, many other companies are following suit).'We used hoardings and billboards in as many as 285 cities and towns. We were the first to use the flaming orange/deep blue combination in our hoarding to denote the blend of modern and traditional perspective (today,.host of companies have adopted the same colour scheme). from digital divide to digital unite: IT for the masses In a country like India where even today the internet reaches about 150 cities,,our network will not only take the convenience and economies of e- commerce to the will create avenues for gainful employment for thousands of Indians, and spread the power of information and education to the remotest areas. It will aid in bringing into the new 'IT' age the vast majority of Indians who live in semi-urban and rural areas, and truly provide the benefits of Infotech to the masses. In order to ensure that even those who are intimidated by technology use this network, we have adopted the franchisee concept where the local entrepreneur becomes the friendly intermediary between technology and the common man. creating value from day one We have lined up an impressive list of technology providers, who will be providing state-of-the-art equipment at the most economical prices. Alliances have been finalised with Hughes Network Systems for V-Sats (Very Small Aperture Terminals), IBM for the multi-media network-enabled work stations, Advanced Micro Devices for the micro-processors, Epson for the ink-jet printers,TVS Electronics for the UPS (Uninterrupted Power Supply), Logitech for the web-cameras, Umax for the scanners and Birla Yamaha for the generators. We have not only arranged for the most advanced and appropriate technology solutions for the network, but managed to acquire the same at competitive pricing, thus giving our franchisees a great value gain from day one. Thus, our network starts on a very assertive note from the beginning, enabling U6 to provide services to the customer at the most competitive prices. e-governance We are working with various authorities and agencies to develop e- governance packages, which will act as an interface between the Government authorities and the citizens enabling all segments of society to benefit from the advent of a truly national IT infrastructure. the dot on the brick We have already appointed the Strategic Business Associates; are processing the appointment of the franchisees; and are in the process of aggregating content partners. Installation of equipment at the SBA locations will commence shortly. Training programmes will begin thereafter, and subsequently in a well-synchronized manner the network will go live. At the threshold of the launch, l would like to share with you, my shareholder friends, a thought that crosses my mind. s kumars.com is 'the dot on the brick'. Our venture encompasses the entire spectrum of the Network World: the content partners, the connectivity, the franchisees, the delivery and the payment mechanism, content aggregation, community kiosks, .. the entire works. The whole 'digital cyber platform" is securely and strongly fastened on the edifice of a large, "distribution" network: the franchisees, each one located at a strategic 'brick and mortar' site. With a 'supply chain' of real manufacturers and service providers, S Kumars. com Ltd. is not just a 'dot com nor is it just brick distribution but is in fact the dot on the brick the true integration of the old and the new economy. I am confident that as our business takes shape, true shareholder value will get unlocked and grow tremendously. I will like to assure you that your management is fully alive to the challenges and opportunities, and is well equipped and motivated to make a resounding success of this project of national importance. I would like to take this opportunity to wish all-our dear shareholders and their families the very best. Thank YOu for being present at this meeting, and l look forward to your continued support. Vikas S. Kasliwal Chairman