Key Performance Indicators

Achievement of the priority objectives of Company development is estimated by the system of key performance indicators (KPI) applied in the Company.

Since 2015, the structure of key performance indicators has been significantly changed in order to take into account the priorities determined by the Development Strategy of the Electric Grid Complex approved by Decree of the Government of the Russian Federation No. 511-r of April 3, 2013 as well as to correlate with the indicators of the Company’s Business Plan and fulfill certain instructions of the Government of the Russian Federation.

The system of key performance indicators of the Company’s Director General is set on the basis of the following:

  •  Company’s Articles of Association;
  • Decision of the Board of Directors of March 6, 2015 (Minutes No. 204/2015) “On Approval of Methods for Calculating and Assessing Efficiency Key Indicators Performance of Director General of OJSC Kubanenergo”.

The following composition and target values of key performance indicators were set for 2015:

Indicators composition

Unit of measurement

Target values in 2015

 Quarterly indicators:

 

 

1. Lack of major accidents

 

 

1Q

quantity

<2

2Q

quantity

<2

3Q

quantity

<2

4Q

quantity

<2

2. Prevention of growth in number of victims in case of accidents

 

 

1Q

unit

≤ 0.0207

2Q

unit

≤ 0.0207

3Q

unit

≤ 0.0207

4Q

unit

≤ 0.0207

3. Indicator of financial stability - coefficient of financial leverage

 

 

1Q

unit

1.1

2Q

unit

1.08

3Q

unit

1.01

4Q

unit

1.04

 Annual indicators:

 

 

Profitability of shareholders’ investments (TSR - total shareholder return)

%

≥ 6.49

Return on invested capital (ROIC)

%

0.64

Decrease in specific operating expenses

%

10

Level of power losses

%

≤ 13.21

Achievement of reliability level of the rendered services

unit

1

Decrease in specific investment expenses

%

≥ 15

Implementation of the schedule of objects’ commissioning

%

≥ 95

Observance of terms for implementation of technological connection

unit

≤1.1

Labor productivity indicator

rub/man/h

2,238

Target values of key performance indicators following the results of 2015 were achieved, level of annual KPI is 100 %, quarterly KPI is 92 % except for KPI “Prevention of growth in number of victims in case of accidents” in 3Q of 2015.

The system of key performance indicators applied in the Company is interconnected with an amount of variable part of remuneration to managers: specific amount in volume of the paid bonuses is established for each indicator, quarter and annual bonuses are paid providing thatall corresponding KPIs are performed.