KB prezent. angl - Komerční banka

8. Administrative expenses
In addition to wages and salaries and social security costs, administrative expenses in the aggregate amount of CZK 9,202 million
comprise other administrative expenses, such as tax charges, advisory fees and other purchased consumables. Wages and salaries
include Management Board bonuses paid under management contracts and compensation paid under the equity compensation
scheme. Remuneration to the members of the Management and Supervisory Boards arising from mandate contracts are recorded in
the profit and loss statement line Other operating expenses.
CZK million 2003 2002 2001
Total administrative expenses (9,202) (10,433) (10,343)
Staff costs (4,784) (5,003) (5,937)
– Wages and salaries (3,470) (3,717) (4,564)
– Social security and health insurance costs (1,220) (1,241) (1,306)
– Other staff costs (94) (45) (67)
Other administrative expenses (4,418) (5,430) (4,406)
– Taxes and fees (44) (34) (45)
– Legal, tax services and audit fees (125) (277) (305)
– Other fees for advisory services (148) (730) (191)
– Other purchased consumables (4,101) (4,389) (3,865)
of which: rental charges (720) (811) (900)
repairs and maintenance (531) (787) (685)
consumed material and energy (465) (442) (434)
promotion and representation (319) (360) (310)
IT and telecommunication services (723) (736) (696)
other services (1,343) (1,253) (840)
Physical number of employees at the year-end 8,207 8,795 9,299
Average recalculated number of employees during the year 8,683 8,935 9,873
Average cost per employee (CZK) 550,996 559,950 601,327
Restructuring costs
Following the change of control of the Bank, the Management Board of the Bank approved a restructuring and transformation plan for
the Bank. The objective of the transformation program is to re-align the activities, operations and organisation of the Bank to make it
compatible with the strategy adopted by the Bank’s majority shareholder. The Bank reorganised the structure of and management
tools used in the sales network, centralised and rationalised selected activities and changed the Bank’s corporate image (the Bank
specifically incurred costs in respect of the change of the logo and advisory and consultancy services related to the transformation
program). Rationalisation and centralisation of the Bank’s activities involves reducing staffing levels at the Bank and has led to the
Bank incurring severance and compensation costs associated with the staff laid off under the restructuring measures. The Bank
reviewed the location, appearance and positioning of its branch network and intends to dispose of buildings, owned and leased, in
the medium term that are not compatible with its plans for the branch network.
Restructuring costs comprise:
CZK million 2003 2002 2001
Severance compensation costs (214) (47) (86)
Other restructuring costs (456) (960) (1,669)
Total restructuring costs (670) (1,007) (1,755)
As of 31 December 2003, the Bank maintained restructuring reserves of CZK 135 million (2002: CZK 242 million) which cover
restructuring costs relating to the restructuring plan approved in 2002 that will be incurred in the following reporting periods.