9th Nov

ATTN: MR CHANDIMA UDABAGE RUNDOWN THE STATE OF BUSINESS –09th Nov, 2007 IMPORT VALUE

VTR - RG

01.25

FITCH

CARD - CR

00.55

SHILPA

VTR - CR

01.05

BREAK 1 - ADD STATE OF BUSINESS BRIDGE ADD BUDGET REVIEW BRIDGE FCCISL

VTR –

NK

02.30

CCC

CARD -

CR

00.50

RAJIV

00.50

BREAK 2 - STOCK WATCH STOCK REVIEW VTR

-

STOCK UPDATE CARDS CURRENCY CARDS

-

LINE UP EDITOR ANCHOR

01.00 00.30 NISHANI NISHANI

HEADLINES 1. SRI LANKA CUSTOMS GEARED TO PREVENT UNDER VALUATION OF IMPORTS, AND 2. THE 2008 BUDGET HAS NOT FOCUSED ON SIMPLIFYING THE VAT SYSTEM SAYS FCCISL 1.SLUG:IMPORT VALUE–VTR DIRECTOR GENERAL OF THE CUSTOMS DEPARTMENT SARATH JAYATHILAKA SAYS FRESH EFFORTS WILL BE TAKEN TO PREVENT UNDER VALUATION OF IMPORTS WHICH IS CURRENTLY A CAUSING A REVENUE LOSS TO THE GOVERNMENT. HE SAID THIS WILL BE A JOINT EFFORT OF THE CUSTOMS DEPARTMENT, COMMERCIAL BANKS AND THE INLAND REVENUE DEPARTMENT. ROLL VTR 2. SLUG:FITCH – CARD FITCH RATINGS LANKA HAS AFFIRMED NATIONAL SAVINGS BANK'S LONG TERM RATING AT AAA LANKA WITH A STABLE OUTLOOK. Card in IT SAYS THE RATING REFLECTS THE FULL STATE OWNERSHIP OF THE BANK, LOW CREDIT RISK ON ITS ASSETS DUE TO ITS SIGNIFICANT EXPOSURE TO GOVERNMENT SECURITIES AND THE EXPLICIT GOVERNMENT GUARANTEE ON DEPOSITS. PROFITABILITY OF THE BANK, AS MEASURED BY RETURN ON ASSETS HAS DECREASED TO 0.7 PERCENT DURING THE FIRST HALF OF 2007 AND TO 0.8 PERCENT DURING LAST YEAR MAINLY OWING TO FALLING NET INTEREST MARGINS, AN INCREASE IN PERSONNEL EXPENSES AND INCREASED TAXES.

FITCH SAYS THE BANK HAS A DEPOSIT MOBILIZING FRANCHISE IN THE RETAIL SPACE, BUT ADDS THAT ITS FLEXIBILITY TO MOBILIZE DEPOSITS THROUGH COMPETITIVE INTEREST RATE CHANGES IS LIMITED DUE TO THE SIGNIFICANT EXPOSURE TO LOWER YIELDING GOVERNMENT SECURITIES. READ ON .. 3.SLUG:SHILPA–VTR A HANDICRAFT EXHIBITION GOT UNDERWAY IN COLOMBO TODAY WITH OVER 100 CRAFT MAKERS DISPLAYING THEIR WORKS AT THE BMICH. THE THREE DAY EVENT TITLED “SHILPA – 2007 HANDICRAFT, SMALL AND MEDIUM SCALE INDUSTRY NATIONAL EXHIBITION” IS AIMED AT CREATING A MEETING PLACE FOR PRODUCERS AND BUYERS. ROLL VTR BREAK

4. SLUG: FCCISL – VTR THE FEDERATION OF CHAMBERS OF COMMERCE AND INDUSTRY OF SRI LANKA SAYS THAT THE LATEST “BUDGET PROPOSALS” HAS NOT CONSIDERED ITS REQUEST TO “RETHINK AND RESTRUCTURE” THE VAT SYSTEM. HOWEVER ADDRESSING A MEDIA CONFERENCE IN COLOMBO TODAY - THE FCCISL’S PRESIDENT SAID THE BUDGET IS A DEVELOPMENT” ORIENTED” ONE. ROLL VTR 5.SLUG:CCC–CARD MEANWHILE THE CEYLON CHAMBER OF COMMERCE ISSUING A PRESS RELEASE TODAY STATED THAT THE 2008 BUDGET HAS NOT GIVEN ADEQUATE EMPHASIS TO ENHANCE THE OVERALL PRODUCTIVITY AND COMPETITIVENESS OF THE ECONOMY, SPECIALLY FOR EXPORT ORIENTED INDUSTRIES AND SERVICES. CARD IN IT ADDS THAT “SINGULAR LACK OF REFERENCE TO IMPROVING THE PRODUCTIVITY OF THE LARGE AND GROWING PUBLIC SECTOR IS INDEED DISAPPOINTING” HOWEVER THE CHAMBER COMMENDS THE SUPPORT THE GOVERNMENT HAS EXTENDED TO THE APPAREL, GEM AND JEWELRY AND SHIPPING SECTOR. CCC SAYS MANAGING EXPENDITURE WILL BE AN ENORMOUS CHALLENGE FOR THE GOVERNMENT, PARTICULARLY IN VIEW OF THE INCREASING DEFENSE EXPENDITURE AND THE COLOSSAL BURDEN OF DEBT SERVICE. CARD OUT

IT ADDS “THIS WILL REQUIRE A VERY CAREFUL DISCIPLINED MANAGEMENT OF THE ECONOMY”.

AND

READ ON BREAK 6.STOX ANALYSTS SAY ACTIVITY WAS CENTRAL ON JKH TODAY WHILE PARTICIPATION WAS A MIX OF RETAIL AND INSTITUTIONAL BUYING. 8 CROSSINGS TOOK PLACE FOR THE DAY. JKH SAW 4 CROSSINGS TOTALING 3.13 MILLION SHARES TAKE PLACE. CALTEX EXPERIENCED 2 CROSSINGS AMOUNTING TO 340,000 SHARES AT 841. 330,000 SHARES OF HNB ALSO MOVED AT 105.25 WHILE 14,300 SHARES OF BROWNS CROSSED AT 810 AND A HALF. JKH TRADED THE HIGHEST VOLUME FOLLOWED BY PELAWATTE AND SLT

OF

3.37

MILLION

MAJOR SHARE TO TURN OVER ALSO CAME FROM JKH WHICH CONTRIBUTED 439 MILLION RUPEES AND WAS FOLLOWED BY CALTEX AND CEYLON LEATHER THE DAY SAW FOREIGN PURCHASES WORTH 544.9 MILLION RUPEES WHILE FOREIGN SALES WAS RECORDED AT 242.7 MILLION. CARD 1 BOTH INDICES ENDED THE WEEK ON NEGATIVE TERRITORY. THE ASPI LOST 4.24 POINTS TO CLOSE AT 2,619.46 WHILE THE MILANKA ENDED 18.7 POINTS LOWER AT 3,515.56 TURN OVER FOR THE DAY WAS 767.6 MILLION

CARD 2 BROWNS, BOGAWANTALAWA, HORANA, KELANI TYRES PELAWATTE WERE THE TOP GAINERS FOR THE DAY

AND

CARD 3 WHILE THE DAY’S LOSERS WERE LED BY SERENDIB HOTELS, ASCOT, CFI, PDL AND VALLIBEL NOW LET’S JOIN RAJIV AT HNB FOR A RECAP OF THIS WEEK’S MARKET OPERATIONS FOREX RATES CARD 4 CARD 5

SEGMENT: MAIN DATE: 09/11/2007 REPORTER: NK SLUG: FCCISL – VTR THE FEDERATION OF CHAMBERS OF COMMERCE AND INDUSTRY OF SRI LANKA SAYS THAT THE “BUDGET PROPOSALS” TABLED ON WEDNESDAY HAS NOT CONSIDERED ITS REQUEST TO “RETHINK AND RESTRUCTURE” THE VAT SYSTEM. HOWEVER ADDRESSING A MEDIA CONFERENCE IN COLOMBO TODAY - THE FCCISL’S PRESIDENT SAID THE BUDGET IS A DEVELOPMENT” ORIENTED” ONE. ROLL VTR ‘BUDGET REVIEW’ “VAT system needs restructuring”: FCCISL President Nawaz Rajabdeen President – FCCISL IN: OUT:

VOICE OVER/NILANTHA/9TH NOV–FCCISL 7.24 – 8.48 We requested at one time simplifying the vat system. But this does not come into the budget, because vat remains same… + we feel from the business sector point of view ird should be a tax collector but not a tax refunder. Because when you refund u see a lot of corruption….I think we should have 2 to 3 tariffs on the vat the importer should get 7% or may be 10% cannot retake. That money should go into the cost of product. So a large amount of vat could come into the treasury. When refunding people might take more vat than the actual amount they pay… THE GOVERNMENT HAS TAKEN MEASURES TO ENCOURAGE INVESTMENT IN THE EAST THROUGH THE 2008 BUDGET. ONE OF THEM IS TO GRANT A 5 YEAR TAX HOLIDAY FOR ANY INVESTMENT WHICH EXCEEDS 50 MILLION RUPEES AND GENERATE OVER 50 EMPLOYMENT OPPORTUNITIES. BUT THE FCCISL FEELS THE RISK IS TOO HIGH AND PROPOSES THAT THE GOVERNMENT ENCOURAGES SME’S TO INVEST IN THE EAST. 3.21 – 3.55 “We feel 50 million investment is too high. Because it’s a more difficult area for the people to make investment. I think we should start with 5 million investment with a five year tax holiday….its better to start small and grow rather than having a big industry and come down to zero”. HE ALSO MENTIONED THE IMPORTANCE OF THE ROLE OF POLITICIANS IN ENSURING THE ACHIEVEMENT OF THE DEVELOPMENT GOALS. 31.30 – 32.20

“the biggest draw back in this country is the politicians. Because when one sector comes into power and do something and it’s the opposition who goes around the country and say not to give money to this….you see last few months it was a political battle. That’s why all political parties must come to a common platform in the interest of the country. We are trying to talk of peace in the n/e when there’s no peace in the political sector”. Ends/

SEGMENT DATE REPORTER SLUG

: : : :

MAIN 09/11/2007 RAVI IMPORT VALUE – VTR

DIRECTOR GENERAL OF THE CUSTOMS DEPARTMENT SARATH JAYATHILAKA SAYS FRESH EFFORTS WILL BE TAKEN TO PREVENT UNDER VALUATION OF IMPORTS WHICH IS CURRENTLY A CAUSE OF REVENUE LOSS TO THE GOVERNMENT. HE SAID THIS WILL BE A JOINT EFFORT OF THE CUSTOMS DEPARTMENT, COMMERCIAL BANKS AND THE INLAND REVENUE DEPARTMENT. ROLL VTR

VOICE OVER – RAVI – IMPORT VALUE - CHAMINDA SRI LANKA CUSTOMS SAYS UNDER-VALUATION MAINLY OCCURS IN THE IMPORTATION OF TIMBER, CANNED FISH, ONIONS AND POTATOES WHICH IS HANDLED BY ONLY A FEW IMPORTERS. THIS SITUATION IS COSTS THE DEPARTMENT A REVENUE LOSS OF 2 BILLION RUPEES PER ANNUM. VC – JAYATILEKE 24:40 BY COMBINING TOGETHER WITH THE INLAND REVENUE DEPARTMENT AND COMMERCIAL BANKS WE ARE TRYING TO HAVE THE DIRECT LINK WITH THE TRANSACTIONAL COSTS TAKEN DIRECTLY FROM BANKS CHANNELS. 25:00 ++ 25:14 CAN TAX THE INVOICES ON VALUES THAT THEY HAVE ACTUALLY TRANSACTED IN THE BANKS. WHICH WE HAVE FOUND IN THE PAST THAT IN-BETWEEN THERE ARE SO MANY MANIPULATIONS TAKING PLACE AND THEREBY REVENUE LOSS IS FAIRLY HIGH. 25:33 ACCORDING TO HIM SRI LANKA CUSTOMS IS EXPECTED TO FALL SHORT OF ITS REVENUE TARGET OF 300 BILLION RUPEES THIS YEAR. DIRECTOR GENERAL OF THE CUSTOMS DEPARTMENT SAYS IT IS A RESULT OF THE DROP IN MOTOR VEHICLE IMPORTS AND GOVERNMENT TAX HOLIDAYS ON ESSENTIAL COMMODITIES. AS AT END OCTOBER 2007 THE CUSTOMS HAS EARNED REVENUE OF ONLY 220 BILLION RUPEES. END./

SEGMENT: DATE: REPORTER: SLUG:

MAIN 09 / 11 / 2007 CHAMINDA SHILPA – VTR

A HANDICRAFT EXHIBITION GOT UNDERWAY IN COLOMBO TODAY WITH OVER 100 CRAFT MAKERS DISPLAYING THEIR WORK AT THE BMICH. THE THREE DAY EVENT TITLED “SHILPA – 2007 HANDICRAFT, SMALL AND MEDIUM SCALE INDUSTRY NATIONAL EXHIBITION” IS AIMED AT CREATING A MEETING PLACE FOR PRODUCERS AND BUYERS. ROLL VTR HANDICRAFT EXHIBITION Over 100 craft makers attending Exhibition open till Sunday VOICE OVER – CHAMINDA – SHILPA – VTR THE PARTICIPANTS FOR THIS EXHIBITION WERE SELECTED BY A COMPETITION ORGANIZED BY THE MINISTRY OF RURAL INDUSTRIES ON A PROVINCIAL BASIS. ORGANIZERS SAY THIS ANNUAL EVENT AIMED AT PROVIDING A PLATFORM FOR LOCAL HANDICRAFT MAKERS TO MEET LOCAL AND INTERNATIONAL BUYERS. THOUSANDS OF LOCALS ARE EXPECTED TO FLOCK BMICH THIS WEEKEND TO WITNESS SOME OF THE MOST OUTSTANDING WORKS OF THESE CRAFTSMEN. AUTHORITIES HAVE ALSO TAKEN STEPS TO PROMOTE THE EVENT AMONG VISITING TOURISTS VIA PROMOTION CAMPAIGNS IN FIVE STAR HOTELS IN COLOMBO PARALLEL TO THE EXHIBITION.

VISUALS WITH MUSIC... ENDS.

STOX ANALYSTS SAY ACTIVITY WAS CENTRAL ON JKH TODAY WHILE PARTICIPATION WAS A MIX OF RETAIL AND INSTITUTIONAL BUYING. 8 CROSSINGS TOOK PLACE FOR THE DAY. JKH SAW 4 CROSSINGS TOTALING 3.13 MILLION SHARES TAKE PLACE. CALTEX EXPERIENCED 2 CROSSINGS AMOUNTING TO 340,000 SHARES AT 841. 330,000 SHARES OF HNB ALSO MOVED AT 105.25 WHILE 14,300 SHARES OF BROWNS CROSSED AT 810 AND A HALF. JKH TRADED THE HIGHEST VOLUME FOLLOWED BY PELAWATTE AND SLT

OF

3.37

MILLION

MAJOR SHARE TO TURN OVER ALSO CAME FROM JKH WHICH CONTRIBUTED 439 MILLION RUPEES AND WAS FOLLOWED BY CALTEX AND CEYLON LEATHER THE DAY SAW FOREIGN PURCHASES WORTH 544.9 MILLION RUPEES WHILE FOREIGN SALES WAS RECORDED AT 242.7 MILLION. CARD 1 BOTH INDICES ENDED THE WEEK ON NEGATIVE TERRITORY. THE ASPI LOST 4.24 POINTS TO CLOSE AT 2,619.46 WHILE THE MILANKA ENDED 18.7 POINTS LOWER AT 3,515.56 TURN OVER FOR THE DAY WAS 767.6 MILLION CARD 2 BROWNS, BOGAWANTALAWA, HORANA, KELANI TYRES PELAWATTE WERE THE TOP GAINERS FOR THE DAY CARD 3

AND

WHILE THE DAY’S LOSERS WERE LED BY SERENDIB HOTELS, ASCOT, CFI, PDL AND VALLIBEL NOW LET’S JOIN RAJIVE AT HNB FOR A RECAP OF THIS WEEK’S MARKET OPERATIONS FOREX RATES CARD 4 CARD 5

SEGMENT: MAIN DATE: 09 / 11 / 2007 REPORTER: CHAMINDA SLUG: CCC BUDGET – CARD MEANWHILE THE CEYLON CHAMBER OF COMMERCE ISSUING A PRESS RELEASE TODAY STATED THAT THE 2008 BUDGET HAS NOT GIVEN ADEQUATE EMPHASIS TO ENHANCE THE OVERALL PRODUCTIVITY AND COMPETITIVENESS OF THE ECONOMY, SPECIALLY FOR EXPORT ORIENTED INDUSTRIES AND SERVICES. CARD IN IT ADDS THAT “SINGULAR LACK OF REFERENCE TO IMPROVING THE PRODUCTIVITY OF THE LARGE AND GROWING PUBLIC SECTOR IS INDEED DISAPPOINTING” HOWEVER THE CHAMBER COMMENDS THE SUPPORT THE GOVERNMENT HAS EXTENDED TO THE APPAREL, GEM AND JEWELRY AND SHIPPING SECTOR. CCC SAYS MANAGING EXPENDITURE WILL BE AN ENORMOUS CHALLENGE FOR THE GOVERNMENT, PARTICULARLY IN VIEW OF THE INCREASING DEFENSE EXPENDITURE AND THE COLOSSAL BURDEN OF DEBT SERVICE. CARD OUT IT ADDS “THIS WILL REQUIRE A VERY CAREFUL DISCIPLINED MANAGEMENT OF THE ECONOMY”. READ ON

AND

CARD IN CEYLON CHAMBER OF COMMERCE – BUDGET PRESS RELEASE 2008 - Singular lack of reference to improving the productivity - commends the support the government support to apparel, gems and jewellery and shipping sectors. - Managing expenditure challenge

will

be

an

enormous

SEGMENT: MAIN DATE: 09 / 11 / 2007 REPORTER:

CHAMINDA

SLUG:

FITCH - CARD

FITCH RATINGS LANKA HAS AFFIRMED THE STATE OWNED NATIONAL SAVINGS BANK'S LONG TERM RATING AT AAA LANKA WITH A STABLE OUTLOOK. Card in IT SAYS THE RATING REFLECTS THE FULL STATE OWNERSHIP OF THE BANK, LOW CREDIT RISK ON ITS ASSETS DUE TO ITS SIGNIFICANT EXPOSURE TO GOVERNMENT SECURITIES AND THE EXPLICIT GOVERNMENT GUARANTEE ON DEPOSITS. PROFITABILITY OF THE BANK, AS MEASURED BY RETURN ON ASSETS HAS DECREASED TO 0.7 PERCENT DURING FIRST HALF 2007 AND 0.8 PERCENT DURING LAST YEAR MAINLY OWING TO FALLING NET INTEREST MARGINS, AN INCREASE IN PERSONNEL EXPENSES AND INCREASED TAXES. Fitch says the BANK HAS A DEPOSIT MOBILIZING FRANCHISE IN THE RETAIL SPACE, BUT ADDS THAT ITS FLEXIBILITY TO MOBILIZE DEPOSITS THROUGH COMPETITIVE INTEREST RATE CHANGES IS LIMITED DUE TO THE SIGNIFICANT EXPOSURE TO LOWER YIELDING GOVERNMENT SECURITIES. READ ON .. FITCH RATINGS LANKA AFFIRMS NATIONAL SAVINGS BANK'S 'AAA(LKA)' RATING -

-

Low credit risk on its assets Flexibility to mobilize deposits through competitive interest rate changes is limited Significant exposure to interest-rate risk