VÝROČNÍ ZPRÁVA ANNUAL REPORT - Philip Morris

ANNUAL REPORT 2008
Other information for shareholders
1. INFORMATION ON REMUNERATION RECEIVED BY EXECUTIVES AND SUPERVISORY BOARD
MEMBERS DURING THE ACCOUNTING PERIOD 2008
The Act on business activities on the capital market, no. 256/2004 Coll., section 118 assesses the obligation to publish information on all monetary income
and income in kind received by Executives and Supervisory Board members during the accounting period from the Philip Morris ČR a.s. (“the Company”). The
Executive category includes income of directors whose position meets a definition of Section 73 of the Labour Code. Based on this definition, the Executive
category represents the members of the Board of Directors who at the same time manage a defined area of the Company’s operations. The Chairman of the
Board of Directors is the Managing Director of the Company at the same time.
Remuneration of Executives and members of the Supervisory Board who are employees of the Company comprises annual base salary, annual bonus, sharebased
payments and other remuneration in kind such as cars for use, lunch allowances, pension contribution, life and accident insurance.
Bonus (Incentive Compensation) is a one-off payment, made in addition to the Annual Base Salary. This bonus is expressed as a percentage of the annual
base salary and is based on assessments of both Philip Morris International, Inc (“PMI”) business performance as well as individual performance. PMI annual
business performance is reviewed and evaluated by PMI by the Compensation Committee towards the end of the year versus objectives. Some of the key
components used to assess those objectives are based on quantitative data such as operating company income, cash flow as well as qualitative data such as
business development, strengthening the organization etc. Managing Director of the Company proposes IC bonuss to individual Executives and President EU
region proposes the IC bonus to Managing Director of the Company. These proposals are validated at the Senior Management level to ensure consistency of
treatment across PMI.
Non-employee Executives are employees of Philip Morris Management Services S.A. or other PMI group of companies and their remuneration is provided by
these companies. The Company provides them with other remuneration in kind such as cars for use and lunch allowances. Remuneration of members of the
Supervisory Board who are non-employee of the Company or an entity within the PMI group comprises an annual fee.
Executives and members of Supervisory Board who are employees of the Company or an entity within the PMI group of companies receive no additional
compensation for services as members of the Board of Directors and Supervisory Board.
In 2008 no matters which could lead to a conflict of interest were discovered either with Board of Directors members or with the Supervisory Board
members.
Information on all monetary income and income in kind received by Executives and members of the Supervisory Board from the Company or the entities
controlled by the Company during the current accounting year (in CZK 000’):
2008 2007
Monetary Income Income in Kind Monetary Income Income in Kind
Board of Directors 8 690 292 13 497 470
Supervisory Board 1 565 66 1 563 66
2. FEE PAID TO AUDITORS
In 2008, the Company paid CZK 6 384k in fees to its auditor for audit and audit-related services (2007: CZK 5 673k). In 2008 and 2007, no fees were paid for
tax and other consultancy services.
In 2008, the Group paid CZK 7 427k in fees to its auditor for audit and audit-related services (2007: CZK 6 502k). In 2008 and 2007, no fees were paid for
tax and other consultancy services.
3. INVESTMENTS
In 2008, the main investments were leaf processing machinery and equipment to increase capacity and improve manufacturing efficiency. The company also
invested in new software to ensure consistency with systems used within PMI. The most important are (in CZK 000’s):
Acquisition value
Investments in equipment for leaf processing 148 318
Investments in equipment to increase capacity 75 776
Investments to software 100 284
All investments in non-current assets were financed by the Company’s own resources.
As at December 31, 2008 management approved spending of CZK 319 560k for the purchase of manufacturing equipment to increase production capacity.
Investment programs are subject to periodic reviews and actual construction in progress may vary from the mentioned estimates.
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