2. OPERATING COSTS

The following items have been included in arriving at operating profit:             Group       Company (All amounts in Sri Lanka Rupees millions)   2004   2003   2004   2003 Staff costs (Note 3)   3,619   3,484   3,395   3,364 Payments to international network operators   1,750   1,765   1,750   1,751 Payments to other network operators - international   664   828   661   828 Payments to other network operators - domestic   316   139   316   139 Auditors’ remuneration   4   3   3   3 Non-Audit fees   2   -   2   - Repairs and maintenance   1,420   773   1,342   745 Provision for doubtful debts   2,563   812   1,904   739 Provision for fall in value of inventories   90   (5)   40   (15) Net foreign exchange gains on operating activities   (358)   (37)   (473)   (36) Payments to NTT Communications Corporation [Note (a)]   47   72   47   72 Amortisation of goodwill (Note 10)   78   78   -   - Other operating expenditure   3,934   3,012   2,342   2,434             14,129   10,924   11,329   10,024                   (a) Payments to NTT Communications Corporation represent amounts payable (to NTT Communications Corporation) on account of salaries and expenditure of seconded experts (Refer Note 29).     (b) The above expenses include Directors’ emoluments for 2004 of Rs. 39 million (2003 - Rs. 36 million). This wholly consists of fees paid to NTT for the secondment of expatriate personnel who are also Directors of SLTL.

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