Key performance indicators
The achievement of the Company’s priority development goals is assessed using a system of key performance indicators (KPIs) and functional key performance indicators (FKPIs) applied within the Company.
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 KPI system is divided into two groups of indicators:
- KPIs are indicators related to the Company’s strategic documents, based on which the effectiveness of the entire management team of the Company (head, deputy heads, chief accountant) is assessed.
- FKPIs are individual indicators established for the Company’s executives personally, taking into account the specifics of the Company’s business lines they supervise.
The KPI and FKPI system applied in the Company is linked to the size of the variable part of management remuneration (50% of incentive payments — for achieving KPIs and another 50% — for achieving FKPIs). Each indicator has a specific weight in the total amount of bonuses paid. Annual bonuses are paid subject to the achievement of relevant targets.
In 2024, the following year‑on‑year changes were made to the KPIs and FKPIs:
- FKPI ‘Net borrowings and bond loans to finance the deficit in the investment programme’ was replaced by FKPI ‘Debt/EBITDA’
- FKPI ‘Implementation of the Comprehensive Security Plan’ was replaced by FKPI ‘Safeguarding of the Organisation’s Property’
- FKPI ‘No Reservation and/or the Auditor’s Modified Opinion Affecting the Reliability of the Annual Accounting (Financial) Statements’ replaced by FKPI ‘Number of Comments (Errors) on the Organisation’s Accounting Practices Identified by the Auditor and the Auditing Commission during Audits Conducted at the End of the Reporting Period’
- A section entitled ‘Bonus Reduction Indicators’ was added, including the following bonus reduction indicators: ‘Maximum Discrepancy in Losses at the End of the Reporting Period (Year)’, ‘Violation of the Transactions Procedure’ and ‘Timely Execution of Corrective Action Plans (CAPs)’
- FKPIs ‘Staffing level’, ‘Control over the Timely Conduct of the Company’s and Subsidiaries’ Annual General Meetings of Shareholders and Annual General Meetings of Participants’,Annual General Meeting of Shareholders Annual General Meeting of Participants ‘Effectiveness of the Transition to the Use of Domestic Radio‑Electronic Products’ and ‘Effectiveness of the Provision of Additional Services’ were added.
| Indicator | Method of calculation | Weight in the remuneration system / share of bonuses for 2024, % | UoM | Target/threshold value for 2024 | Value achieved in 2024 | Assessment of achievement in 2024 (%, achieved/not achieved) | Reasons for underachievement | Target for 2025 | Targets for 2026 |
|---|---|---|---|---|---|---|---|---|---|
| Financial and economic KPIs | |||||||||
| 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 | % | 9.3 | 12.5 | 120% (achieved) | – | 8.5 | 8.4 |
| 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 | % | 10.3 | 12.7 | 120% (achieved) | – | 10.3 | 10.6 |
| 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 | 3,569,914 | 6,136,894 | 120% (achieved) | – | 3,163,412 | 4,482,857 |
| Industry‑specific KPIs | |||||||||
| 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 | % | 9.86 | 9.33 | 105% (achieved) | – | 9.84 | 9.81 |
| 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 | ea | 1.0 | 1.0 | 100% (achieved) | – | 1.0 | 1.0 |
| 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 | 112.1 | 120% (achieved) | – | 95.0 | 95.0 |
| Bonus reduction indicators | |||||||||
| Implementation of the Company’s Development Plan | Bonus reduction indicator calculated against the number of unfulfilled items of the Company’s Development Plan approved by the Board of Directors of the Company in the reporting period | −50 | % | 0 | 0 | Achieved | – | 0 | 0 |
| 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 | 0.05 | 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 | 0.0 | Achieved | – | 0.0 | 0.0 |
| Timely completion of the CAP | 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 | % | 90.0 | 100.0 | Achieved | – | 90.0 | 90.0 |
| 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 | 108.4 | Achieved | – | 100.0 | 100.0 |
| Indicator | Method of calculation | Official responsible for achieving the FKPI | UoM | Target for 2024 | Value achieved in 2024 | Assessment of achievement (%; achieved/not achieved) | Reasons for underachievement | Target for 2025 | Target for 2026 |
|---|---|---|---|---|---|---|---|---|---|
| FKPI | |||||||||
| Earnings before interest, taxes, depreciation and amortisation (EBITDA) | Calculated as profit/(loss) before taxes, depreciation, amortisation and interest expense adjusted for impairment/(reversal of impairment) of fixed assets, and revenue from grid connection services | General Director Deputy General Director for Economics and Finance | RUB ‘000 | 15,842,394 | 20,073,354 | 100% (achieved) | – | 16,598,928 | 17,901,525 |
| Achievement and verification of readiness for the heating season | The certificate of readiness for heating season shall be received by the Company in a timely manner by 5 November of the reporting year in accordance with the Rules for Assessing the Readiness of Electric Power Entities for the Heating Season, approved by Resolution No. 543 of the Government of the Russian Federation dated 10 May 2017 | General Director Deputy General Director for Technical Issues — Chief Engineer | ea | 1.0 | 1.0 | 100% (achieved) | – | 1.0 | 1.0 |
| No significant accidents in power grids investigated by the Rostechnadzor | The calculation of this indicator takes into account accidents in the Company’s power grids classified by the Rostechnadzor commission in accordance with clause 4 of the Rules for Investigation of the Causes of Accidents in the Electric Power Industry (approved by Resolution of the Government of the Russian Federation No. 846 dated 28 October 2009) | Deputy General Director for Technical Issues — Chief Engineer | Number | 0.0 | 0.0 | 100% (achieved) | – | 0.0 | 0.0 |
| Efficiency of innovations | Integral indicator of innovations assesses the extent to which three component indicators are met:
| Deputy General Director for Technical Issues — Chief Engineer | % | 98.0 | 98.0 | 100% (achieved) | – | 98.0 | 98.0 |
| Increase in labour productivity relative to 2022 | Ratio of value added by all types of services to the average annual number of employees. Comparison with the 2023 baseline | Deputy General Director — Head of the Office Deputy General Director for Economics and Finance | % | 10.0 | 22.5 | 100% (achieved) | – | 15.0 | 20.0 |
| Active staff turnover | Ratio of the total voluntary redundancy under Clause 3 (termination of the employment agreement on the employee’s part) and Clause 5 (transfer of an employee at their request or with their consent to work for another employer, or transfer to an elective job (position)) of Article 77 of the Labour Code of the Russian Federation to the average headcount in the reporting period | Deputy General Director — Head of the Office | % | 6.5 | 6.1 | 100% (achieved) | – | 6.5 | 6.5 |
| Staffing level | Defined as the ratio of the staff number reduced by the number of vacant positions to the staff number according to the Company’s staffing table at the end of the reporting period | Deputy General Director — Head of the Office | % | 95.0 | 90.0 | 95% (achieved) | – | 95.0 | 95.0 |
| Observance of grid connection deadlines | A comprehensive indicator that assesses the quality of the grid connection process, consisting of two components:
| First Deputy General Director — Director of Sochi Power Grids Branch Deputy General Director for Development and Grid Connection Deputy General Director for Investments | RU | 1.1 | 1.0 | 100% (achieved) | – | 1.1 | 1.1 |
| Debt/EBITDA | Ratio of long‑term and short‑term loans and borrowings to EBITDA | Deputy General Director for Economics and Finance | RU | 1.6 | 1.2 | 100% (achieved) | – | 1.8 | 1.6 |
| Efficiency of transition to domestic software | Defined as the share (percentage) of installed Russian (domestic) software in the Company‑wide software scope as to the implementation of the in‑house plan for transition to all‑domestic software approved by the Company’s Board of Directors | First Deputy General Director — Director of Sochi Power Grids Branch | % | 84.3 | 87.7 | 100% (achieved) | – | 88.9 | 90.0 |
| Effectiveness of the transition to the use of domestic radio‑electronic products | Defined as the share (percentage) of Russian (domestic) radio‑electronic products purchased by the Company in the company‑wide scope as to the implementation of the plan to transition to the all‑domestic radio‑electronic products | Deputy General Director for Technical Issues — Chief Engineer | % | 77.0 | 94.2 | 100% (achieved) | – | 78.0 | 79.0 |
| Overdue receivables for electricity transmission services | Non‑exceedance of the actual value of overdue receivables (excluding moratorium debt) at the end of the reporting period above the target value | Deputy General Director for Sale of Services Deputy Director General for Corporate Governance | RUB ‘000 | 1,026,451.0 | 1,039,458.1 | 99% (achieved) | – | 907,893.0 | 840,743.9 |
| Safeguarding of the Organisation’s Property | The calculation of this indicator takes into account cases of theft or deliberate damage to the Company’s property | Deputy General Director for Technical Issues — Chief Engineer | – | 0.0 | 0.0 | 100% (achieved) | – | 0.0 | 0.0 |
| Enforcement of insider information protection requirements and maintenance of share listings | A comprehensive indicator assessing the level of corporate governance in the Company, consisting of two components:
| Deputy Director General for Corporate Governance | Fulfilled / not fulfilled | Fulfilled | Fulfilled | 100% (achieved) | – | Fulfilled | Fulfilled |
| Timeliness of the annual General Meeting of Shareholders of the Company and its subsidiaries | The calculation of this indicator takes into account instances of failure by the Company and its subsidiaries to comply with the deadlines for holding the annual General Meeting of Shareholders established by the legislation of the Russian Federation | Deputy Director General for Corporate Governance | % | 100.0 | 100.0 | 100% (achieved) | – | 100.0 | 100.0 |
| Share of contracts concluded based on the results of electronic procedures | Calculated as a ratio of the number of electronic procurement procedures, which resulted in the conclusion of agreements associated with spending of funds, to the total number of procurement procedures (competitive and non‑competitive), which resulted in the conclusion of such agreements | First Deputy General Director — Director of Sochi Power Grids Branch Deputy General Director for Investments | % | 56.0 | 87.3 | 100% (achieved) | – | 60.0 | 64.0 |
| Number of comments (errors) on the organisation’s accounting practices identified by the auditor and the auditing commission during audits conducted at the end of the reporting period | The assessment of the achievement of the indicator takes into account comments (errors) regarding accounting and reporting, comments regarding compliance with Russian Federation legislation on taxes and levies, as well as the level of materiality established by auditing standards | Chief Accountant – Head of the Department for Financial and Tax Accounting and Reporting | – | 0.0 | 0.0 | 100% (achieved) | – | 0.0 | 0.0 |
| Effectiveness of the Provision of Additional Services | This indicator assesses the achievement of planned revenue from the sale of additional services from other activities and the achievement of planned gross profit from the sale of additional services from other activities for the reporting period | First Deputy General Director — Director of Sochi Power Grids Branch | % | 100.0 | 111.0 | 100% (achieved) | – | 100.0 | 100.0 |