Key Performance Indicators (KPI) System

The Key Performance Indicators SystemApproved by the Transneft Board of Directors on 30 November 2016 (Minutes No. 23) (hereinafter referred to as the KPI System) is used to sum up the results of the Company’s business activities. The planned KPI values for 2018Resolution of the Transneft Board of Directors dated 25 December 2017 (Minutes No. 19) and 2019Resoltuion of the Transneft Board of Directors dated 27 December 2018 (Minutes No. 22) have been approved by the Board of Directors

Planned KPIs and their Achievement Results
No. KPI System Unit of measurement Plan for 2018 Execution status in 2018 Plan for 2019
Ensuring reliability, environmental and industrial safety of the trunk pipeline system
1 Integrated indicator of trunk pipeline system reliability, environmental and industrial safety % 100 Achieved 100
1.1 Specific trunk pipelines accident rate emergency situations per 1,000 km of trunk pipelines 0.086 Achieved 0.072
1.2 Reduction of specific air pollutant emissions during oil and petroleum products transportation via trunk pipelines % 1 Achieved 1
Raising the operational efficiency in the operation of the trunk pipelines system
2 Integrated operational activity efficiency indicator % 100 Achieved 100
2.1 Reduction of operating expenses; % 2 Achieved 2
2.2 Reduction of specific electricity consumption during oil transportation over trunk pipelines under comparable conditions % 0.5 Achieved 0.5
2.3 Raising labour productivity in oil and petroleum products transportation % 2 Achieved 2
Development and upgrading of the trunk pipeline system to fully satisfy the needs of the Russian Federation
3 Integrated indicator of investment activities efficiency under the Programme of Trunk Pipeline Facilities Development, Technical Upgrading and Revamping (hereinafter – the Development Program) % 100 Achieved with regard for normalisation 100
3.1 Execution of the Development Programme Financing Plan RUB million 243,336 Achieved 276,626
3.2 Execution of the Capital Investments Use Plan envisaged in the Development Programme RUB million 206,231 Achieved 232,356
3.3 Execution of the Action Plan for Reduction of Capital Costs within the Development Programme RUB million 3,826 Achieved 3,804
3.4 Keeping investment project deadlines units 5 Achieved with regard for normalisation 4
3.5 Integrated indicator of the volume of work done within the TUR Programme % 100 Achieved 100
3.5.1 Execution of the Pipe Replacement Plan (the line part) km 1,018 Achieved 1,001
3.5.2 Execution of the Storage Tank Construction and Revamping Plan units 57 Achieved 80
4 Integrated indicator of innovation activities’ efficiency % 100 Achieved 100
4.1 Financing of innovative projects, including R&D, from own funds, as the percentage of Transneft’s revenue from oil transportation services (by RAS) % 1.41 Achieved 1.41
4.2 Number of titles of protection for intellectual property obtained during the reporting period and two previous years documents 92 Achieved 93
4.3 Integrated effect of in-house commercialisation of innovative projects, including R&D, for the reporting period and two previous years in terms of percentage of Transneft’s revenue from oil transportation services by RAS % 1.47 Achieved 1.48
4.4 Quality indicator for the updated Investment Development Programme / IDP (in the year of its update)/IDP execution quality indicator (in subsequent years) % 90 Achieved 90
Ensuring the Company’s Financial Stability
5 Total debt to EBITDA ratio ≤2,5 Achieved ≤2,5
Ensuring the shareholder control and effective management of business operations
6 Integrated indicator of achieving additional KPIs set by executive orders and instructions of the shareholder, the President and the Government of the Russian Federation % 100 Achieved 100
6.1 Return on invested capital (ROIC) % ≥7 Achieved ≥7
6.2 Dividends RUB billion 41.44 Achieved 25.91
6.3 Annual volume of direct purchases from SMEs % 18 Achieved 18