Key Performance Indicators (KPIs) and Functional Key Performance Indicators (FKPIs)
The system of key performance indicators and functional key performance indicators (henceforth referred to as KPI and FKPI, respectively) used inside the Company are used to evaluate the attainment of the Company’s priority development goals.
Since 2023, the KPI system of Rosseti Group has been shaped in line with Order of the Government of the Russian Federation No. 3579-r dated 28 December 2020 (hereinafter referred to as Order No. 3579-r).
In accordance with Order No. 3579-r, the system of key performance indicators is divided into two groups: key performance indicators (hereinafter referred to as KPIs) and functional key performance indicators (hereinafter referred to as FKPIs). Herewith, KPIs are indicators linked to the Company’s strategic documents, which are used to assess the performance of the Company’s entire management team (head, deputy heads, chief accountant), while FKPIs are individual indicators set for the Company’s officials personally, with due regard to the specifics of the Company’s business lines supervised by them.
The KPI and FKPI system applied in the Company is interrelated with the size of the variable part of management remuneration (50% of incentive payments for KPI achievement, 50% of incentive payments for FKPI achievement): each of the indicators has a specific weight in the volume of bonuses paid, annual bonuses are paid subject to accomplishment of the respective indicators.
The renovations involved installing two new transformers with a total capacity of 8,000 kVA to replace the existing 2,000 kVA transformers and replacing the switchgear. As a result, the substation’s capacity will quadruple. Built in 1982, the energy facility is used by another grid operator to transport electricity and has already reached the end of its service life. The upgrading of the power supply centre is scheduled for completion in 2025. The project, once done, will make the power supply more reliable and of better quality, and open up more options for connecting new users in Rostov-on-Don.
Indicator | Method of calculation | Weight in the remuneration system/bonus reduction percentage for 2024, % | UoM | Target/threshold value for 2024 | Value achieved in 2024For 2024, shows the expected achievement of KPIs and FKPs, taking into account the timing and preparation procedure of reports that provide initial data for calculations. The final actual values are to be approved by the Board of Directors of PJSC Rosseti South. | Assessment of achievement in 2024 (%, achieved/ not achieved)If the KPI achievement rate exceeds 120%, the percentage equal to 120% is specified; if the achievement rate is under 80%, the percentage of achievement equal to 0% is specified. | Reasons for underachievement | Target for 2025 | Target for 2026The scope and target values of the indicators were approved by the decision of the Board of Directors of PJSC Rosseti South dated 23 December 2024 (Minutes No. 598/2024 dated 23 December 2024) and are subject to revision (if necessary) by decision of the Board of Directors of the Company, taking into account the requirements of the Standard Procedure for Calculating KPIs and FKPIs for the management of subsidiaries of PJSC Rosseti approved by Order of PJSC Rosseti No. 171 dated 3 April 2025. | |
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FINANCIAL AND ECONOMIC KEY PERFORMANCE INDICATORS | ||||||||||
Return on invested capital (ROIC) | Ratio of operating profit adjusted for impairment/(reversal of impairment) of fixed assets, revenue from grid connection services, and accrual/(reversal of) provision for expected credit losses to the sum of average equity and long-term loans and borrowings | 10 | % | 12.7 | 15.7 | 120 achieved | – | 13.9 | 17.5 | |
Operating profit margin | Ratio of operating profit adjusted for impairment/(reversal of impairment) of fixed assets and revenue from grid connection services to revenue, minus revenue from grid connection services | 20 | % | 5.6 | 7.1 | 120 achieved | – | 7.0 | 8.9 | |
Net profit without impairment and grid connection | Net profit without impairment and grid connection profit/(loss) adjusted for impairment/(reversal of impairment) of fixed assets and revenues from grid connection services (including relevant income tax) | 20 | RUB ‘000 | –1,370,185 | –72,971 | 120 achieved | – | 222,038 | 1,646,588 | |
INDUSTRY-SPECIFIC KEY PERFORMANCE INDICATORS | ||||||||||
Level of electricity losses | Ratio of the volume of electricity losses in the Company’s grids (calculated as the difference between electricity delivered to the grid and electricity delivered from the grid and domestic consumption) increased by the amount of differences for previous periods, settled against the Company, to the electricity delivered to the grid for the reporting period | 15 | % | 9.59 | 9.24 | 104 achieved | – | 9.57 | 9.55 | |
Readiness for heating season | Indicator that estimates the readiness of the Company to work during the heating season, based on monthly monitoring by the Ministry of Energy of Russia | 20 | - | 1 | 1 | 100 achieved | – | 1 | 1 | |
Compliance with commissioning schedule | Ratio of the total actual volume of commissioning of fixed assets in the reporting year derived from the progress report on the Company’s investment programme (in monetary terms, on the basis of the date when the construction completion certificate is signed off by the acceptance commission) to the planned one in accordance with the approved investment programme and implementation schedule | 15 | % | 93.5 | 104.7 | 112 achieved | – | 95.0 | 95.0 | |
BONUS REDUCTION INDICATORS | ||||||||||
Maximum amount of differences in the amount of losses at the end of the reporting period (year) | Bonus reduction indicator, the size of which is calculated as the share of differences at the end of the reporting period (year) (not settled as of the end of the second month of the year following the reporting period) not covered by actional work, relative to the volume of electricity losses in the Company’s grids | –10 | % | 3.50 | 0.0 | achieved | – | 3.50 | 3.50 | |
Violation of the transactions procedure | The indicator assessing the absence of violations in the execution of major transactions, as well as related-party transactions and transactions requiring approval under the Company’s Articles of Association | –10 | number | 0 | 0 | achieved | – | 0 | 0 | |
Timely execution of corrective action plans (CAPs) | The indicator assessing whether the Company fulfilled its CAPs in the reporting period, with the CAPs being developed and approved by the Company based on the results of control measures taken in relation to the Company and audits conducted by auditing commissions | –10 | % | 90 | 100 | achieved | – | 90 | 90 | |
INDICATIVE INDICATORS | ||||||||||
Achievement of the Efficiency of Grid Connection Procedures of the National Investment Climate Rating | The indicator is determined on the basis of the achievement of benchmarks for the Efficiency of Grid Connection Procedures of the National Investment Climate Rating in the constituent entities of the Russian Federation within the Company’s operational responsibility area | Indicative indicator | % | 100.0 | 100.0 | achieved | – | 100.0 | 100.0 | |