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

ADD BUDGET BRIDGE

BUDGET VTR RIYAD 01.20

BREAK 1- ADD STATE OF BUSINESS BRIDGE

HOLLAND DAY VTR LASHINI 02.00

ADD CORPORATE BRIDGE

TATA VTR NILANTHA 01.15

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 SECOND READING OF THE BUDGET JUST 8 DAYS AWAY,

CAPTAINS FROM VARIOUS INDUSTRIES AND CHAMBERS HAVE BEEN
VOICING THEIR CONCERNS, HOPES AND ASPIRATIONS ON THE
UPCOMING 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 WHILE ANALYSTS SAY MOST

COUNTERS MOVED UP ON SPECULATION.

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 WITH 156.45

MILLION RUPEES. TOUCHWOOD AND SLT FOLLOWED.

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: CORPORATE
DATE: 29/10/07
REPORTER: NK
SLUG: 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 : MAIN
DATE : 29/10/07
REPORTER : LASHINI
SLUG : 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 WILL GO THROUGH A
SUITABILITY TEST IN SRI LANKA.

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
DATE: 29TH OCTOBER 2007
REPORTER: RIYAD R.
EDITOR: ANOUK T.
SLUG: BUDGET

WITH THE SECOND READING OF THE BUDGET JUST 8 DAYS AWAY,

CAPTAINS FROM VARIOUS INDUSTRIES AND CHAMBERS HAVE BEEN
VOICING THEIR CONCERNS, HOPES AND ASPIRATIONS ON THE
UPCOMING 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: MAIN
DATE: 29 / 10 / 2007
REPORTER: CHAMINDA
SLUG: 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: MAIN
DATE: 29 / 10 / 2007
REPORTER: CHAMINDA
SLUG: 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 WITH GRANTS

AMOUNTING TO A TOTAL OF 180,000 US DOLLARS.

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

ENDS.
SEGMENT: MAIN
DATE: 29 / 10
REPORTER: RAVI
SLUG: 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 WHILE ANALYSTS SAY MOST

COUNTERS MOVED UP ON SPECULATION.

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 WITH 156.45

MILLION RUPEES. TOUCHWOOD AND SLT FOLLOWED.

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!