KPI system
Weights of corporate and functional KPIs for the final performance evaluation of the Management Board
The performance evaluation system is among the Company’s strategic and day-to-day management tools to ensure that the Company’s business processes are aligned with its strategic goals.
The KPI system relies on the following principles:
- a balanced approach where production, financial and economic KPIs come along with sustainability and ESG KPIs;
- a top-down approach with the breakdown of strategic KPIs into operational KPIs and the top-down cascading of strategic KPIs through the organisational structure and by type of activity.
Corporate KPIs are the same for all employees and are based on KMG’s priorities for the reporting period. Functional KPIs are individual KPIs of the Company’s Management Board members and are based on their individual strategic targets.
| № | KPI | Unit | ActualThe final approval by the KMG Board of Directors of the actual values for 2022 is expected in July 2023, and therefore the values indicated in the table may be slightly adjusted. |
|---|---|---|---|
| 1 | Oil and gas condensate productionKMG Kashagan B.V.’s oil and gas production volumes are included at 50% until 15 September 2022 and 100% after 15 September 2022. | thous. tonnes | 22.012 |
| 2 | Free Cash Flow (FCF)Free Cash Flow = Net cash flow from operating activities minus Purchase of property, plant and equipment, intangible assets, investment property and exploration and evaluation assets. Dividends received from JVs and associates are included in cash flow from operating activities. | KZT bln | 1.116 |
| 3 | Lost Time Incident Rate (LTIR) | Ratio | 0.36 |
| 4 | ESG risk rating | Rating | 28.4 |
| 5 | Preparation for IPO | % | 100 |
| 6 | Performance under investment projects | % | 60 |
| № | KPI | Unit | Actual |
|---|---|---|---|
| 1 | Performance under investment projects | % | 43 |
| 2 | Operational efficiency improvement | % | 98 |
| 3 | FCF available for development and distribution as dividendsCash flow from operating activities (excluding joint ventures and associates) less maintenance CAPEX | KZT bln | -31 |
| 4 | Net Asset Value (NAV)On November 9, 2021, KMG transferred 100% of the shares of QazaqGaz NC JSC in favor of Samruk-Kazyna JSC. Therefore, QazaqGaz NC JSC was excluded from the consolidation perimeter. However, the actual figure includes QazaqGaz NC. | KZT bln | 10.255 |
| 5 | Debt/EBITDAAs per approved methodology of JSC Samruk-Kazyna. | Ratio | 2.4 |
| 6 | ESG rating | Rating | 72 |
| 7 | Local content across KMG GroupA composite indicator reflecting performance against local content targets set across KMG Group. | % | 78 |
KPIs and targets for members of KMG’s Management Board are approved annually by KMG’s Board of Directors. Performance evaluation for awarding bonuses is carried out after the Company has analysed its financial and economic results for the reporting year.
Corporate KPIs for 2022 were developed based on the sustained need for the management to focus on operational efficiency improvements and on ESG aspects of the Company’s operations.