29th Oct

ATTN: MR: CHANDIMA UDABAGE RUNDOWN THE STATE OF BUSINESS – 29TH OCT, 2007 MILK PRICES

VTR

RAVI

03:39

GRANTS

VTR

CHAMINDA

00:56

FITCH

VTR

CHAMINDA

01.15

VTR

RIYAD

01.20

ADD BUDGET BRIDGE BUDGET

BREAK 1- ADD STATE OF BUSINESS BRIDGE HOLLAND DAY

VTR

LASHINI

02.00

VTR

NILANTHA

01.15

ADD CORPORATE BRIDGE TATA

BREAK 2 – ADD STATE OF BUSINESS BRIDGE STOCK

CARDS

01.15

CURRENCY

CARDS

00.15

LINE UP EDITOR

ANOUK

ANCHOR

ANOUK

HEADLINES 1. CUTBACK ON MILK POWDER IMPORTS AFFECTS THE MASSES, AND 2. FINDING THE PERFECT MATCH!- THE NETHERLANDS GOVERNMENT HELPS CREATE BUSINESS PARTNERSHIPS 1. MILK SHORTAGE - VTR THE TRADE MINISTRY SAYS LOCAL MILK POWDER CONSUMERS WILL HAVE TO WAIT AT LEAST ANOTHER WEEK TO GAIN ACCESS TO AMPLE SUPPLIES OF MILK POWDER. CURRENTLY SRI LANKA IS FACING A MILK POWDER SHORTAGE OWING TO A HALT IN IMPORTS WHICH IS A RESULT OF THE LOW PRICE CEILING THE GOVERNMENT HAD IMPOSED ON MILK POWDER UP UNTIL LAST FRIDAY. THE STATE OF BUSINESS TAKES A CLOSER LOOK AT THE MATTER. ROLL VTR 2. GRANTS – FLASH THE INFORMATION COMMUNICATION TECHNOLOGY AGENCY IS ONCE AGAIN CALLING APPLICATIONS FROM LOCAL ICT AND BPO FIRMS TO APPLY FOR GRANTS TO OBTAIN INTERNATIONAL QUALITY CERTIFICATES. THE ICTA SAYS GLOBALLY ACCLAIMED QUALITY CERTIFICATES ARE VITAL FOR LOCAL ICT FIRMS, AS MOST INTERNATIONAL CLIENTS LOOK FOR SUCH CERTIFICATIONS BEFORE BUILDING UP ALLIANCES WITH A LOCAL PARTNER. THE CLOSING DATE FOR APPLICATIONS IS THE 9TH OF NEXT MONTH. ROLL VTR 3. FITCH COMMENTS – VTR A REPORT EXPECTED TO BE RELEASED BY FITCH RATINGS HAS IDENTIFIED 12 REGISTERED FINANCE COMPANIES, FAILING TO MEET THE 200 MILLION RUPEE MINIMUM CAPITAL REQUIREMENT FOR THE FINANCIAL YEAR 2007.

FITCH SAYS ALTHOUGH THE SECTOR AS A WHOLE IS ADEQUATELY CAPITALIZED, ITS CAPITALIZATION VARIES MARKEDLY ACROSS THE INDUSTRY. ROLL VTR 4. BUDGET WITH THE CAPTAINS VOICING UPCOMING

SECOND READING OF THE BUDGET JUST 8 DAYS AWAY, FROM VARIOUS INDUSTRIES AND CHAMBERS HAVE BEEN THEIR CONCERNS, HOPES AND ASPIRATIONS ON THE BUDGET.

TODAY WE HAVE DR. ANURA EKANAYAKE FROM THE CEYLON CHAMBER OF COMMERCE GIVING HIS VIEWS ON THE AMENDMENTS THAT NEED TO BE INCLUDED IN SRI LANKA’S FLUID TAX STRUCTURE. ROLL VTR BREAK 5. HOLLAND - VTR LOCAL COMPANIES NOW CAN FIND A SUITABLE BUSINESS PARTNER FROM THE NETHERLANDS THROUGH A RECENTLY INITIATED ONLINE MATCHMAKING FACILITY OFFERED BY THE NETHERLANDS GOVERNMENT. DETAILS OF THIS FACILITY WERE REVEALED LAST WEEK BY THE DUTCH EMBASSY IN COLOMBO AT A CEREMONY TO MARK HOLLAND DAY. ROLL VTR 6. TATA – VTR “TATA STEEL” SAYS THEIR IMMEDIATE AIM IS TO GRAB 50% OF THE COUNTRY’S STEEL MARKET. WITH THIS IN MIND, TATA STEEL RECENTLY LAUNCHED THEIR BRAND TATA STEELIUM IN SRI LANKA. ROLL VTR BREAK

STOX TRADING ENDED IN THE RED TODAY COUNTERS MOVED UP ON SPECULATION.

WHILE

ANALYSTS

SAY

MOST

4 CROSSINGS ON JKH AMOUNTING TO A TOTAL OF 712,900 SHARES CHANGED HANDS AT 130 RUPEES. HEADING THE DAY’S VOLUMES LIST WERE EAST WEST, JKH AND SLT TRADING 1.45 MILLION, 1.2 MILLION AND 834,500 SHARES RESPECTIVELY. JKH WAS THE MAIN CONTRIBUTOR TO TURNOVER MILLION RUPEES. TOUCHWOOD AND SLT FOLLOWED.

WITH

156.45

FOREIGN BUYING FOR THE DAY WAS TAGGED AT 191.52 MILLION AND FOREIGN SALES WAS AT 117.18 MILLION. THE ALL SHARE DIPPED 5.53 POINTS TO END THE DAY AT 2,614.73 WHILE THE MILANKA ALSO LOST 13.03 POINTS TO CLOSE AT 3,522.24. TURNOVER WAS AT 405 MILLION RUPEES. THE DAY’S MAIN GAINERS WERE EAST WEST, FERNTEA LTD, YORK ARCADE, NAMUNUKULA AND SEYLAN MERCHANT NON VOTING. THE LOSERS WERE LED BY KELANI VALLEY, TESS AGRO, STAFFORD, VANIK NON VOTING AND BROWNS BEACH. CHEVRON LUBRICANTS LANKA PLC MADE A DIVIDEND ANNOUNCEMENT FOR THE DAY. LET’S TAKE LOOK AT TODAY’S FOREX RATES!

‘BUDGET EXPECTATIONS’ Dr. Anura Ekanayake Deputy Vice Chairman Ceylon Chamber of Commerce

SEGMENT: DATE: REPORTER: SLUG:

CORPORATE 29/10/07 NK TATA – VTR

“TATA STEEL” SAYS THEIR IMMEDIATE AIM IS TO GRAB 50% OF THE COUNTRY’S STEEL MARKET. WITH THIS IN MIND, TATA STEEL RECENTLY LAUNCHED THEIR BRAND TATA STEELIUM IN SRI LANKA. ROLL VTR TAG ‘TATA STEELIUM LAUNCHED IN SRI LANKA’ Anand Sen – Vice President Flat products – TATA Steel Ltd. IN: OUT:

VOICE OVER – TATA ESTABLISHED IN 1907 AS ASIA’S FIRST INTEGRATED PRIVATE SECTOR STEEL COMPANY, TATA STEEL TODAY IS THE WORLD’S SIXTH LARGEST STEEL PRODUCER. ADDRESSING THE MEDIA, TATA STEEL’S VICE PRESIDENT FOR FLAT PRODUCTS SAID TATA STEELIUM OFFERS SUPERIOR PRODUCT ATTRIBUTES, SUCH AS EXCELLENT FORMABILITY, FLATNESS, SURFACE QUALITY, THICKNESS, CONSISTENCY AND STRENGTH. 3.42 – 4.12 We hope that we will be achieving about 50% market share for this product in sl. We hope we will be able to meet the need of the customers particularly the furniture segment. Ends/

SEGMENT DATE REPORTER SLUG

: : : :

MAIN 29/10/07 LASHINI HOLLAND - VTR

LOCAL COMPANIES NOW CAN FIND A SUITABLE BUSINESS PARTNER FROM THE NETHERLANDS THROUGH A RECENTLY INITIATED ONLINE MATCHMAKING FACILITY OFFERED BY THE NETHERLANDS GOVERNMENT. DETAILS OF THIS FACILITY WERE REVEALED LAST WEEK BY THE DUTCH EMBASSY IN COLOMBO AT A CEREMONY TO MARK HOLLAND DAY. ROLL VTR INFO TAGS: ‘MATCH MAKING’ More details on: ‘www.hollandinsrilanka.org’ SUPERS: Ruud P. M. van Wensen Programme Manager PSOM Sri Lanka

VOICE OVER – LASHINI - 29/10/07 – HOLLANDS – VTR INTERESTED LOCAL COMPANIES CAN DOWNLOAD AND SUBMIT A PROPOSAL FOR COOPERATION WITH A DUTCH COMPANY ON THE EMBASSY WEBSITE www.hollandinsrilanka.org. THE DUTCH EMBASSY SAYS ALL ENTRIES SUITABILITY TEST IN SRI LANKA.

WILL

GO

THROUGH

A

THE PROPOSALS THAT PASS THIS SUITABILITY TEST WILL BE SENT TO E.V.D., A DUTCH GOVERNMENT AGENCY FOR FURTHER ASSESSMENT. 32:25 WHAT ARE THE CRITERIA? OF COURSE YOU HAVE TO BE A REGISTERED LOCAL COMPANY. WE FOCUS ON SME’S VERY BIG COMPANIES CAN LOOK IN MOST OF THE CASES AFTER THEMSELVES. SO WE FOCUS ON SME’S YOU ALREADY HAVE TO HAVE SOME RECORD. COULD NOT BE THAT YOU STARTED YESTERDAY. YOU MUST SHOW A TWO YEAR RECORD OF YOUR PERFORMANCE. AND YOU NEED TO HAVE A QUITE A SOLID FINANCIAL STRUCTURE TO BECOME A SERIOUS PARTNER FOR A COMPANY IN THE NETHERLANDS. 33:02 ONCE A SUITABLE MATCH IS FOUND IN THE NETHERLANDS THE LOCAL COMPANY WILL RECEIVE A VOUCHER WORTH 5,000 EURO TO HIRE A DUTCH CONSULTANT TO EXPLORE AND DEFINE THE COOPERATIVE EFFORT BETWEEN THE TWO PARTIES. SUCCESSFUL PARTNERSHIPS WILL ALSO GET THE OPPORTUNITY TO VIE FOR FUNDING THROUGH THE DUTCH MINISTRY OF DEVELOPMENT CORPORATION’S PROGRAM FOR CO-OPERATION WITH EMERGING MARKETS. 23:12 OUR AVERAGE PROJECT SIZE IS ABOUT TWO YEARS AND THE MAXIMUM INVESTMENT OF THE OVERALL PROJECT IS 1.5 MILLION EUROS AND WE PROVIDE FIFTY PERCENT OF THE GRANTS FOR THOSE PROJECTS 23:30 ALREADY NINE SUCH PROJECTS INVOLVING SRI LANKAN COMPANIES HAVE BEEN LAUNCHED WHILE FIVE HAVE BEEN SUCCESSFULLY REALIZED. ENDS. SEGMENT:

BUDGET

29TH OCTOBER 2007 RIYAD R. ANOUK T. BUDGET

DATE: REPORTER: EDITOR: SLUG: WITH THE CAPTAINS VOICING UPCOMING

SECOND READING OF THE BUDGET JUST 8 DAYS AWAY, FROM VARIOUS INDUSTRIES AND CHAMBERS HAVE BEEN THEIR CONCERNS, HOPES AND ASPIRATIONS ON THE BUDGET.

TODAY WE HAVE DR. ANURA EKANAYAKE FROM THE CEYLON CHAMBER OF COMMERCE GIVING HIS VIEWS ON THE AMENDMENTS THAT NEED TO BE INCLUDED IN SRI LANKA’S FLUID TAX STRUCTURE. ROLL VTR

SEGMENT: DATE: REPORTER: SLUG:

MAIN 29 / 10 / 2007 CHAMINDA FITCH COMMENTS – VTR

A REPORT EXPECTED TO BE RELEASED BY FITCH RATINGS HAS IDENTIFIED 12 REGISTERED FINANCE COMPANIES, FAILING TO MEET THE 200 MILLION RUPEE MINIMUM CAPITAL REQUIREMENT FOR THE FINANCIAL YEAR 2007. FITCH SAYS ALTHOUGH THE SECTOR AS A WHOLE IS ADEQUATELY CAPITALIZED, ITS CAPITALIZATION VARIES MARKEDLY ACROSS THE INDUSTRY. ROLL VTR ‘FINANCE COMPANIES’ 25.3% Compounded growth during the last 5 years Margins are expected to depress Risk management practices weak and vary widely across the sector

VOICE OVER – FITCH COMMENTS – CHAMINDA – 29 / 10 ACCORDING TO FITCH REGISTERED FINANCE COMPANIES DURING THE 2002 TO 2006 PERIOD HAVE SEEN A COMPOUNDED ANNUAL GROWTH RATE OF 25.3 PERCENT, PRIMARILY DRIVEN BY PROVISION OF VEHICLE FINANCE. HOWEVER FITCH SAYS THE PRESENT INFLATIONARY, RISING AND VOLATILE INTEREST RATE ENVIRONMENT IS LIKELY TO DEPRESS MARGINS OF FINANCE COMPANIES ON THE SHORT TO MEDIUM TERM. APART FROM THIS, CREDIT QUALITY OF LOCAL FINANCE COMPANIES WILL ALSO COME UNDER STRESS. HOWEVER THE RATING AGENCY POINTS OUT THAT THE SECTOR AS A WHOLE WILL BE ABLE TO WITHSTAND THESE SHOCKS. YET FITCH IN A RELEASE STATES THAT RISK MANAGEMENT PRACTICES IN THE SECTOR ARE RELATIVELY WEAK AND VARY WIDELY ACROSS THE INDUSTRY, COMPARED TO THE BANKING SECTOR. HOWEVER THE AGENCY SAYS THE INDUSTRY IS ADDRESSING THE ISSUE VIA IMPROVEMENTS IN MANAGEMENT INFORMATION SYSTEMS, CREDIT APPRAISAL TECHNIQUES AND STREAMLINED RECOVERY PROCEDURES. CONSEQUENTLY RFC’S ASSET QUALITY IMPROVED WITH THE GROSS NON PERFORMING TO GROSS LOANS RATIO DECLINING TO 11.6 PERCENT LAST YEAR FROM 15 PERCENT THE PREVIOUS YEAR. ENDS.

SEGMENT: DATE: REPORTER: SLUG:

MAIN 29 / 10 / 2007 CHAMINDA GRANTS – FLASH

THE INFORMATION COMMUNICATION TECHNOLOGY AGENCY IS ONCE AGAIN CALLING APPLICATIONS FROM LOCAL ICT AND BPO FIRMS TO APPLY FOR GRANTS TO OBTAIN INTERNATIONAL QUALITY CERTIFICATES. THE ICTA SAYS GLOBALLY ACCLAIMED QUALITY CERTIFICATES ARE VITAL FOR LOCAL ICT FIRMS, AS MOST INTERNATIONAL CLIENTS LOOK FOR SUCH CERTIFICATIONS BEFORE BUILDING UP ALLIANCES WITH A LOCAL PARTNER. THE CLOSING DATE FOR APPLICATIONS IS THE 9TH OF NEXT MONTH. ROLL VTR ‘ICT FUNDING’ Apply via http://www.icta.lk/icbp Up to $ 15,000 Grants for ICT companies

VOICE OVER – GRANTS – 29 / 10 - CHAMINDA ANY QUALIFIED ICT COMPANY WILL RECEIVE A GRANT OF UP TO 15,000 US DOLLARS FROM THE ICTA WHICH IS A PART OF THE COST FOR OBTAINING A QUALITY CERTIFICATE. CURRENTLY THE PROCEDURE COSTS AROUND 25000 DOLLARS. THE ICTA SAYS THAT SO FAR, ISO AND CMMI ARE THE TWO BEST KNOWN CERTIFICATIONS, BUT ANY OTHER INTERNATIONALLY RECOGNIZED CERTIFICATION TOO WILL QUALIFY. SO FAR THE ICTA HAS FUNDED 13 COMPANIES AMOUNTING TO A TOTAL OF 180,000 US DOLLARS.

WITH

GRANTS

APPLICATIONS WILL BE ACCEPTED UNTIL THE 9TH OF NEXT MONTH. ENDS.

SEGMENT: DATE: REPORTER: SLUG:

MAIN 29 / 10 RAVI MILK SHORTAGE - VTR

THE TRADE MINISTRY SAYS LOCAL MILK POWDER CONSUMERS WILL HAVE TO WAIT AT LEAST ANOTHER WEEK TO GAIN ACCESS TO AMPLE SUPPLIES OF MILK POWDER. CURRENTLY SRI LANKA IS FACING A MILK POWDER SHORTAGE OWING TO A HALT IN IMPORTS WHICH IS A RESULT OF THE LOW PRICE CEILING THE GOVERNMENT HAD IMPOSED ON MILK POWDER UP UNTIL LAST FRIDAY. THE STATE OF BUSINESS TAKES A CLOSER LOOK AT THE MATTER. ROLL VTR. Lal Saranapala Marketing Director Lanka Milk Foods (CWE) Ltd. ‘Milked dry’ MILK SHORTAGE

VOICE OVER – MILK SHORTAGE – RAVI – 29 / 10 / 2007 MILK POWDER PRICES IN THE GLOBAL MARKET HAVE RISEN BY AROUND 100 PERCENT DURING THE LAST 12 MONTHS OWING TO MANY FACTORS. TRADE EXPERTS SAY THE DROUGHT IN AUSTRALIA WHICH IS A LEADING DIARY PRODUCER AND THE HUGE DEMAND FOR MILK IN THE CHINESE MARKET TRIGGERED BY ITS ECONOMIC GROWTH ARE TWO KEY REASONS. THE EUROPEAN UNION REMOVING THE SUBSIDIES HANDED OUT TO ITS DIARY FARMERS TOO HAS HELPED AGGRAVATE THE SITUATION. DESPITE THE HIGH GLOBAL PRICES, LOCAL MILK POWDER IMPORTERS WERE NOT ALLOWED BY THE GOVERNMENT TO RAISE THEIR PRICES IN PARALLEL WITH THIS INCREASE, IN A BID TO CURTAIL THE RISING COST OF LIVING. THIS PROMPTED LOCAL IMPORTERS TO LIMIT OR TOTALLY HALT THE IMPORTATION OF MILK POWDER CREATING A HUGE SHORTAGE. WITH THE SCARCITY TAKING ITS TOLL ON CONSUMERS, THE GOVERNMENT LAST FRIDAY TOOK A DECISION TO ALLOW A PRICE HIKE SUBJECT TO A CEILING. YET AS OF THIS MORNING THE SHORTAGE CONTINUED. VC – TRADER (SUBTITLES) 34:37 THERE WAS A SHORTAGE OF MILK POWDER FOR A MONTH. FROM LAST FRIDAY WE ARE OUT OF STOCK. 34:46 ++ 34:49 THE MAIN DISTRIBUTORS SAY THAT THEY’LL RELEASE STOCKS IN A WEEK. 34:53 VC – CONSUMER (SUBTITLES) 38:42 WE CAME TO THE SUPER MARKET BECAUSE THERE IS NO MILK AT THE GROCERY STORES. BUT THEY DON’T HAVE MILK POWDER EVEN HERE. 39:04 LANKA MILK FOODS ONE OF THE MAIN MARKET PLAYERS SAYS IT WILL TAKE AT LEAST ANOTHER 2 MONTHS TO FILL THE VACUUM.

VC - LAL 20:05 IF YOU ORDER NOW IT’LL TAKE ABOUT 2 MONTHS FOR IT TO COME. PEOPLE WHO HAVE ORDERED NOW THE SHIPMENT WILL COME AND THEY’LL BE ABLE TO GIVE IT IN THE NEW PRICE. 20:17 20:19 WE JUST CLEARED A CONSIGNMENT AND WE ARE PACKING ON THAT SO WE R PACKING ON THAT SO WE CANT JUST GIVE IT WITH A FREE FLOW. IT’LL TAKE SOME TIME. 20:30 HE ALSO SHOWS THAT ANOTHER REASON FOR THIS SHORTAGE IS THAT MANUFACTURES OF ICE CREAM AND YOGHURT TOO HAVE BEGUN PURCHASING THEIR REQUIREMENT FROM RETAIL OUTLETS. VC - LAL 19:03 THE MANUFACTURES LIKE CHOCOLATE, ICE-CREAM AND YOGHURT THEY BOUGHT FROM PETTAH, WHO WERE DIRECT IMPORTERS OF BULK POWDER. SINCE THE PRICES ARE GOING UP THEY HAVE STOPPED IMPORTS. SO THEY WERE PICKING UP FROM RETAIL OUTLETS AND USING THEM FOR THEIR PURPOSES. THAT’S ANOTHER REASON FOR THE SHORTAGE. 19:28. WHILE CONSUMERS ARE HIT BY THE “SHORTAGE SHOCK”, THEY WILL ALSO HAVE TO GET READY TO FACE THE “PRICE SHOCK” WHEN MILK POWDER PACKS ARE PILED ONTO THE NOW EMPTY SHELVES. FOLLOWING THE GOVERNMENT’S AUTHORIZATION TO RAISE PRICES, THE LEADER IN THE LOCAL MILK POWDER MARKET, ANCHOR, A PRODUCT OF FONTERRA BRANDS HAS DONE JUST THAT. A 400GRAM ANCHOR PACKET WILL COST 255 RUPEES FROM TODAY ONWARDS. FONTERRA BRANDS SAYS THAT A SECOND INCREASE WILL ALSO TAKE PLACE AT A LATER DATE AND ADDS THAT THEY HAVE NO OPTION BUT TO INCREASE PRICES TO FACE THE “GLOBAL PRICE SHOCK. A PATTERN THAT MANY OTHER MILK POWDER MARKETERS ARE SURE TO FOLLOW, PUTTING MORE PRESSURE ON LOCAL CONSUMERS WHO ARE FIGHTING A LOSING BATTLE AGAINST THE “RISING COST OF LIVING”. END/

STOX TRADING ENDED IN THE RED TODAY COUNTERS MOVED UP ON SPECULATION.

WHILE

ANALYSTS

SAY

MOST

4 CROSSINGS ON JKH AMOUNTING TO A TOTAL OF 712,900 SHARES CHANGED HANDS AT 130 RUPEES. HEADING THE DAY’S VOLUMES LIST WERE EAST WEST, JKH AND SLT TRADING 1.45 MILLION, 1.2 MILLION AND 834,500 SHARES RESPECTIVELY. JKH WAS THE MAIN CONTRIBUTOR TO TURNOVER MILLION RUPEES. TOUCHWOOD AND SLT FOLLOWED.

WITH

156.45

FOREIGN BUYING FOR THE DAY WAS TAGGED AT 191.52 MILLION AND FOREIGN SALES WAS AT 117.18 MILLION. THE ALL SHARE DIPPED 5.53 POINTS TO END THE DAY AT 2,614.73 WHILE THE MILANKA ALSO LOST 13.03 POINTS TO CLOSE AT 3,522.24. TURNOVER WAS AT 405 MILLION RUPEES. THE DAY’S MAIN GAINERS WERE EAST WEST, FERNTEA LTD, YORK ARCADE, NAMUNUKULA AND SEYLAN MERCHANT NON VOTING. THE LOSERS WERE LED BY KELANI VALLEY, TESS AGRO, STAFFORD, VANIK NON VOTING AND BROWNS BEACH. CHEVRON LUBRICANTS LANKA PLC MADE A DIVIDEND ANNOUNCEMENT FOR THE DAY. LET’S TAKE LOOK AT TODAY’S FOREX RATES!