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Annual Report 2015

ru

Cost management

Cost management programme (CMP) is the key tool to increase the internal operating efficiency of the Company through the implementation of the cost management process aimed at minimising the consumed resources while simultaneously maximising the return on them.

The target indicator for reduction of operating expenses by 15% by 2017 (adjusted for inflation) compared to 2012 costs as calculated per unit of electrical equipment serviced (as approved by the Development Strategy of the Electric Grid Complex of the Russian Federation in accordance with the RF Government Executive Order No 511-r dated April 03, 2013). The economic effect of the CMP implementation according to the approved 2015 Company's Business Plan provides for decline in operating costs of the Company in 2015, (in 2012 prices) by 19.16% compared to 2012 costs.

The effect of implementation of the Cost Management programme of PJSC IDGC of the North-West as of year-end 2015 was 21.34%, which improved the effect provided for in the Company's Business Plan by 2.18%, while the target value is exceeded by 11.34%. Thus, the CMP implementation in the Company is outperforming.

Cost Management Programme
Indicator Unit of measurement 2012 actual 2013 actual 2014 actual 2015 actual
Number of conventional units thousand c.u. 1,021,214 1,081,247 1,087,959 1,112,957
CPI % 0 6.8 7.8 15.4
Total costs including selling and management costs, where: RUB million 29,057 30,824 31,674 35,869
Influenceable costs RUB million 10,803 11,566 11,639 12,314
Non-influenceable costs RUB million 18,255 19,258 20,035 23,555
THE CMP EFFECT % 0 –5.32 –12.16 —21.34
Target level of decline in non-influenceable costs % 0 2.0 5.0 10.0
The effect of implementation of the Cost Management Programme
The effect of implementation of the Cost Management Programme