COMPARATIVE ANALYSIS OF VOLUNTARY INFORMATION DISCLOSURE PRACTICES OF RUSSIAN AND BRITISH PUBLIC COMPANIES

II ANNUAL STUDY IR AGENCY “INTERFAX BUSINESS SERVICE”

COMPARATIVE ANALYSIS OF VOLUNTARY INFORMATION DISCLOSURE PRACTICES OF RUSSIAN AND BRITISH PUBLIC COMPANIES 2012: The issuers keep increasing variety and thoroughness of their disclosure

Acronyms in the text: FVID - Format of voluntary information disclosure

What did we learn? 2011 2012

Identified FVIDs: 18 35

FVID usage intensity:

largest Russian public companies

largest British public companies

35.0%

56.9%

30.7%

45.6%

The issuers which are the most active in voluntary disclosure

(among the largest as well as medium/small companies)

Lukoil

Synergy

Gazprom Neft

CTC Media

The issuers which have significantly intensified their voluntary disclosure activity (among the largest as well as medium/small companies)

-

VTB Bank

IDGC of Volga

Companies reviewed (in Russia and in Great Britain): 80 126

Moscow, 2012

2

ON THE IMPORTANCE AND MOTIVATION OF THE STUDY

Competition of issuers for investors’ attention has become ever-more sophisticated over the years and makes increasing demands on IR services for satisfying growing information requests by market participants. Like investment bank analysts who keep searching for fresh investment ideas with a view to attracting attention of investor clients of their financial units, the issuers keep searching for innovative methods of convincing presentation of their activities and their industry’s trends to investors and analysts. One can say about “intellectual arms race” unfolding before our eyes between issuers not only within specific industries but in absentia between companies with similar capitalization and other similar fundamental characteristics. The regulators’ requirements in the field of information disclosure do not systematically catch up with changes in the markets and investor demands. This is why issuers with advanced IR do not limit themselves to the publication of materials subject to regulatory (mandatory) disclosure (often tailored at specific investor categories – i.e. the company’s bondholders). It is hard to overestimate the importance of FVID for communication with investors. They are especially important for the issuers who are geographically remote from world financial centers with limited possibilities for management to regularly meet with the investment community. It is also true with regard to many Russian companies. With a view to understanding current trends and specific methods of voluntary disclosure, IR agency “Interfax Business Service” annually reviews the activity of the issuers in this field through the example of Russian and British companies. The study conducted this year will allow the managers and specialists of IR departments to get an idea about existing FVIDs and evaluate the level of voluntary disclosure of a specific issuer against the best national and foreign business practices.

CONTENTS OF THE STUDY

ON THE IMPORTANCE AND MOTIVATION OF THE STUDY ............................................................................................ 2

KEY FINDINGS ................................................................................................................................................................ 3

METHODOLOGY ............................................................................................................................................................. 5

WHICH KEY FORMATS OF VOLUNTARY DISCLOSURE DO PUBLIC COMPANIES PREFER? .............................................. 6

NEW FVID PRACTICES .................................................................................................................................................. 10

COMPANIES’ RANKING IN VOLUNTARY DISCLOSURE LEVEL: GAZPROM NEFT AND CTC MEDIA – NEW RUSSIAN

LEADERS....................................................................................................................................................................... 15

THE ISSUERS BECOME MORE ACTIVE IN VOLUNTARY DISCLOSURE ALONG WITH MARKET CAPITALIZATION

GROWTH...................................................................................................................................................................... 18

VOLUNTARY DISCLOSURE ACTIVITY INCREASES THE CHANCES FOR AN IRO AND IR TEAM OF AN ISSUER TO BE

RECOGNIZED BY THE INVESTMENT COMMUNITY ....................................................................................................... 19

CONTACT INFORMATION ............................................................................................................................................ 20

3

KEY FINDINGS

The Study allows to estimate both average level of activity lag of Russian issuers compared to British issuers and the level of demand for each disclosure format:

The Study 2012 identified, on the websites, 35 various formats of voluntary disclosure, which is double the number a year ago (18).

In general, the most popular formats in the market are as follows:

Top five formats of voluntary disclosure

Issuers using the format, in %

Annual report (presentation version) 89%

IR release, operations 86%

IR release, financials 85%

Financial calendar 79%

Presentation of financial statements 74%

As of July 2012 largest British public companies on average still use formats of voluntary information disclosure significantly more often: the reviewed British companies use 46% of existing disclosure formats (15.9 out of 35), while largest Russian companies use only 31% of available formats (10.7 out of 35). Major Russian issuers seriously lag behind comparable British companies as far as their activity in using the following formats is concerned:

Interactive annual report,

Annual summary / Annual review,

Investor relations kit,

Webcast/Conference call,

FAQ, investor calculator, integration with social networks.

Thus, Russian companies still lag far behind in using interactive disclosure formats. One can take note of positive developments last year demonstrated only by the significantly increased use of webcasts and conference calls by the companies. As far as interactivity is concerned, one should note that development of some formats is subject to constraining factors. Specifically, an issuer’s presence in popular social media is subject to risks associated with legal requirements to information disclosure and lower target orientation of IR communications, because one can not be absolutely certain who may read a post quoted repeatedly and how accurately it is interpreted in new context.

Russian companies with medium/small capitalization look better than large local

companies; they almost caught up with their British counterparts, the gap diminished compared to previous year: 21.1% compared to 22.3% of used formats.

Unlike large companies, Russian mid-cap business is confidently ahead of Brits (!) in active use of whole number of formats (Investor Day (a number of presentations), Interactive data room, iPad app/website versions for PDA and WAP). However they still fall behind in using such formats as Investor Calculator and Fact sheet.

4

The most popular format (Diagram 1) both for largest Russian and British companies is Annual Report (presentation version), publication of operational and financial IR releases, and display of financial calendar and interactive stock chart on the website. In this regard nothing has changed last year.

Last year the largest issuers (both Russian and British) began using Investor Days more often. The Russians began more actively publishing separate presentations on development strategy (true for major issuers) and IR releases on operational results, while the Brits began publishing statements about sustainable development and post Investor relations kits on their websites more often (Diagrams 2-3).

It’s encouraging that out of 17 new formats of voluntary disclosure (new in 2012) 30%

were used only by Russian companies, 10% were initiated by the Brits, while the remaining 60% were used for the first time by the companies concurrently in both countries.

The British voluntary information disclosure novelty – abridged annual report (annual summary)

The Russians introduced larger number of new formats: credit ratings in charts, consensus forecast Interactive charts, tag clouds.

Both Russians and Brits have expanded their practices of voluntary disclosure mainly on account of the formats tailored at retail investors (65% of newly introduced formats), and to a lesser extent institutional investors (35%).

Russian leaders in voluntary disclosure level ranking are Gazprom Neft and CTC Media,

while BG Group and Grainger lead among the British companies.

Last year best achievements in using new formats of voluntary disclosure were

demonstrated in Russia by VTB Bank and IDGC of Volga, and by Centrica and Grainger in Great Britain.

The activity in the field of voluntary disclosure increase IRO’s and IR team’s

chances to be recognized by the investment community being given prestigious IR awards, and their companies being included into leading international rankings and ratings. This conclusion is based upon the analysis of correlation between the issuers’ activity in the field of voluntary disclosure and the results of their participation in IR Magazine Awards as well as in Financial Times Bowen Craggs and KWD ratings.

The quality of IR program and the level of its public IR documents are not directly

related to the scale of the issuer’s business; successful IR work is possible in the companies with medium/small capitalization. In reality it is important for the management to recognize the significance of this corporate function, and for the company’s senior management to be interested in real results of IR activities.

5

METHODOLOGY

Like last year, during the Study 2012 the analysis of activity of British and Russian public companies in the field of voluntary disclosure was carried out (Table 1). Table 1. Categories of Russian and British companies reviewed by “Interfax Business Service” IR agency with regard to their activity in the field of voluntary disclosure (a total of 126 companies) Categories of companies making the

list of leading national stock exchange indices

Companies of the Russian Federation reviewed

Companies of Great Britain reviewed

The largest companies in terms of market capitalization

38 largest companies of the indices “Large capitalization MICEX” and “Standard capitalization MICEX”* Mcap: $2.3 –$111.0 billion USD

35 largest companies of FTSE-100* index Mcap: $5.1 – $158.8 billion USD

The smallest companies in terms of market capitalization

33 smallest companies of the index “Base capitalization MICEX”* Mcap: $0.1-$1.8 billion USD

20 smallest companies of the FTSE-350 index Mcap:$ 0.1 – $0.6 billion USD

*Additionally data was analyzed on the companies, chosen in the previous year, but excluded as of July 2012, as well as data on the companies which were the leaders in IR and voluntary information disclosure based on leading European ratings and awards, including Financial Times Bowen Craggs Index, KWD (earlier Hallvarsson & Halvarsson rating), IR Magazine Awards.

The Study recorded each and every format of voluntary disclosure used by the issuers (Table 2). If within reasonable time one could not find some format at the corporate website, it was considered that a company does not disclose any information in such format (because an investor or an analyst would not find such a document either, should they visit this company’s website).

Table 2. FVID usage activity among reviewed issuers’ categories, average

Company’s category

Average activity of formats usage

Number of formats %

2011 2012 2011 2012

out of 18 formats

out of 35 formats

max 18 formats

max 35 formats

Russian companies with large capitalization 6.3 10.7 35.0% 30.7%

Russian companies with medium/small capitalization

4.6 8.4 25.6% 21.1%

British companies with large capitalization 10.3 15.9 56.9% 45.6%

British companies with medium/small capitalization

5.1 7.8 28.1% 22.3%

The analysis of correlation between FVID usage activity and size of capitalization (see Diagrams 5-8) as well as Index of issuer’s recognition by the investment community was carried out; the results thereof will be reviewed later. As follows from the title, this index was created with a view to demonstrating how the society evaluates the transparency of the companies. The index is composed of indicators which characterize the issuers’

6

achievements in IR Magazine Awards as well as their place in Financial Times Bowen Craggs and KWD ratings.

WHICH KEY FORMATS OF VOLUNTARY DISCLOSURE DO PUBLIC COMPANIES

PREFER?

The preferences of the public companies in using FVID this year are as follows (Tables 3-7): Table 3. Top 5 FVID, which are popular in the group of Russian issuers with large capitalization

Table 5. Top 5 FVID, which are popular in the group of British issuers with large capitalization

FVID Popularity,

%

Annual Report 100%

Webcast/Conference call 97%

Presentation of financial statements (PPT/PDF)

94%



Table 4. Top 5 FVID, which are popular in the group of Russian issuers with medium/small capitalization

FVID Popularity, %

Annual Report 82%




Interactive stock chart 64%

Table 6. Top 5 FVID, which are popular in the group of British issuers with medium/small capitalization

FVID Popularity, %

Annual Report 85%





60%

Table 7. Top 5 FVID, which are in general popular in the market in 2011.

Table 8. Top 5 FVID, which are in general popular in the market in 2012г.

FVID Popularity, %

Annual Report 89%





79%

FVID Popularity, %

Annual Report 98%




69%


FVID Popularity, %

Annual Report 89%





74%

7

In general, all leading FVIDs, except presentation annual report, were more widely used compared to previous year, which is demonstrated by the indicators of their popularity. In spite of identified lower popularity of presentation annual report it still remains the most popular format. The lower activity in using annual reports in Russia is due to reduced scale of disclosure by companies, which were acquired by strategic investors and are actually on the way to forthcoming delisting. It is worth noting that the Russian issuers ignore this FVID more often than the British ones, missing an opportunity to realize all the potential of this IR instrument, while annual report not only occupies a prominent place in the best IR practices, but improves every year. For example, in 2% of reports for the year 2011 QR codes are used for convenient transition to electronic version and interactive tables (Picture 1), while 5% of reports are divided into subject modules, which are convenient for downloading and perception of information. It is important to note though, that such ideas were used only by the Russian companies reviewed in our Study, and none by a British one.

This year IR releases surpassed financial calendar in popularity having pushed it to the fourth position of the Top-5 FVID in 2012, while presentation of financial statements shifted from the fourth to the fifth position. These formats also allow the issuers to experiment with additional functionality; Rostelecom, for instance, submitted a video version of a financial IR release (Picture 2), while 21% of issuers use financial calendars, integrated with Outlook, iCal and other software, which can not but be appreciated by the users. 2.5% of the companies filter their calendars by events, while the calendars at the sites of KTK and Acron allow to download all materials associated with the event, at once, which is an excellent finding to optimize navigation on the website (Picture 3).

Usage activity of existing FVIDs in the market in general is demonstrated in Diagram 1.

Picture 1. Reference to QR-code used in INTER RAO UES annual report http://www.interrao.ru/upload/d

ocs/interrao_ar2011_rus.pdf

Picture 2. Reference to Rostlecom video release. http://rostelecom.ru/ir/results_and_presentations/financials/IFRS/1q2012.php

Picture 3. Reference to KTK investor calendar. http://oaoktk.ru/investors/

http://www.interrao.ru/upload/docs/interrao_ar2011_rus.pdf

http://www.interrao.ru/upload/docs/interrao_ar2011_rus.pdf

http://rostelecom.ru/ir/results_and_presentations/financials/IFRS/1q2012.php



http://oaoktk.ru/investors/

8

Diagram 1 Usage of various FVID activity – practices of Russian and British companies; FVIDs are given in the receding order of popularity among 71 Russian companies.

Last year popularity of webcasts and conference calls among the Russian issuers with large capitalization increased the most (Diagram 2). Their usage frequency by Russian companies increased almost fivefold, though among British issuers this format’s popularity increased only by 8% compared to 2011, while popularity of sets of presentations for Investor days increased the most among the British issuers with large capitalization: +314% compared to 2011. However, their popularity increased by 286% among Russian companies as well during the same period.

9

Interactive data room lost its popularity among 30% of British companies, while its popularity increased (+84%) among Russian companies. The Russians use interactive stock charts less frequently (-10%). It is interesting that such a seemingly habitual instrument still allows to find interesting solutions. For example, interactive stock chart at the Uralkali website is very conveniently combined with investment calculator, which is duly appreciated by retail investors. Diagram 2. The increment of various FVIDs’ usage activity by public companies with large capitalization (2012/2011, %). FVIDs are given in the order of receding popularity among 35 Russian companies with large capitalization.

FAQ is the leader in popularity growth among Russian issuers with medium/small capitalization (+324%), while the interest in it among Brits diminished on the contrary (-43%) (Diagram 3). What is more, many issuers combine them into thematic blocks to more conveniently search for new information. Operational IR releases were used by the largest number of new users among British companies with medium/small capitalization (+240%).

10

They have become more popular in Russia, too, though (+163%). Unfortunately, the Russian companies lost interest in such format as strategy presentation (-100% per year). They shouldn’t have done it, for it is one of FVIDs which is in great demand by investors. In Great Britain the interest in interactive annual report diminished most significantly (-43%), while the Russians continue using this format with the same intensity (+1%). Diagram 3. The increment of various FVIDs’ usage activity by public companies with medium/small capitalization (2012/2011, %). FVIDs are given in the order of receding popularity among 33 Russian companies with medium/small capitalization.

NEW FVID PRACTICES

This year the analysis of IR sections of public companies’ websites identified 35 FVIDs – twice the number recorded by the Study in 2011, which demonstrates continuous development of voluntary disclosure instruments.

11

Table 9. Categories of voluntary disclosure formats (given in the order of receding popularity among 71 Russian companies reviewed)

New format* (identified in the Study-2012 for the first time)

Format name Tailored at investors: I - Institutional, R – Retail**

Annual Report (Presentation version) I

IR release, operations I

IR release, financials I

Financial calendar I

Presentation of financial statements (PPT/PDF) I

Interactive stock chart R

Investor day (a number of presentations) I

Webcast/Conference call I

+ Investor calculator

R

Fact sheet R

FAQ R

+ Interactive presence map

R

Interactive annual report I

+ Integration with social networks

R

Investor relations kit I

+ Transcripts of interviews, presentations, public addresses

I

+ iPad app/website versions for PDA and WAP

I

Interactive data room I

Sustainable development report I

Strategy presentation I

Investor and analyst handbook (data book, XLS) I

+ Analyst commentaries/reports

R

+ Shareholder hotline

R

Investor bulletin I

+ Company fact book

I

+ Credit ratings in charts

I

+ Shareholder’s personal account

R

+ Market analysis (presentations)

I

+ Tag cloud

R

Investor and analyst handbook (text) I

12

New format* (identified in the Study-2012 for the first time)

Format name Tailored at investors: I - Institutional, R – Retail**

+ Consensus forecast Interactive charts

I

+ IR blog

R

+ Market analysis (press releases)

R

+ Shareholder newsletter/magazine

R

+ Annual summary/annual review

I

Notes:

*A number of formats, identified as new, were not absolutely new for the global IR market, but they were new in terms of selection for this Study (both for Russian and British components of the selection);

**The division of the formats by tailored at institutional or retail investors is not the only possible one, and reflects nothing but the view of the Study’s authors.

The novelty in British practice of voluntary information disclosure is an abridged version of annual report (annual summary). Russian issuers proposed bigger variety of new FVIDs: credit ratings in charts, consensus forecast Interactive charts, tag clouds. A number of FVIDs were used for the first time by both British and Russian companies: market analysis in the form of presentations and press releases, webcast transcripts, fact

book, IR blog, personal account.

Diagram 4. Proportion of new FVIDs used by Russian and British public companies

13

Tables 10-13 below allow us to understand which new FVIDs were initiated by Russian and British public companies. Let us take note that main attention of the issuers of all groups was drawn to the instruments tailored at retail investors.

Table 10. New FVIDs used by Russian public companies with large capitalization

New FVID FVID Popularity

Target audience: institutional investors

Transcripts of interviews, presentations, public

addresses 24%

iPad app/website versions for PDA and WAP 16%

Fact book 11%

Credit ratings in charts 11%

Market analysis (presentations) 8%

Consensus forecast Interactive charts 5%

Target audience: retail investors

Investor calculator 45%

Interactive presence map 34%

Integration with social networks 34%

Shareholder hotline 11%

Personal Account 11%

Analyst commentaries/reports 8%

Tag cloud 5%

IR blog 5%

Market analysis (press releases) 3%

Shareholder newsletter/magazine 3%

One should note that development of some interactive formats is subject to constraining

factors. For example, on the one hand, the presence of an issuer in popular social media

networks allows to expand the number of IR instruments, more comprehensively elucidate

activity and state of a company, having received an access to new audience, and organize

bilateral communications with existing and potential investors and analysts. On the other

hand, a company’s decision to expand the number of IR instruments through social media is

subject to risks associated with legal requirements to information disclosure and lower target

orientation of IR communications, for one can not be absolutely certain who will read

repeatedly quoted post and if it is correctly interpreted in new context.

14

Table 11. New FVIDs used by British public companies with large capitalization



Transcripts of interviews, presentations, public addresses

54%

Annual summary / annual review 51%


Fact book 20%

Market analysis (presentations) 3%





Personal Account 17%



IR blog 6%


Table 12. New FVIDs used by Russian public companies with medium/small capitalization





12%







Tag cloud 3%

Table 13. New FVIDs used by British public companies with medium/small capitalization



Annual summary / annual review 20%


5%

Fact book 5%







Market analysis (press releases) 5%

Personal Account 5%


The format containing information about the reasons to invest into a company has not yet

found its proper place in current IR practices. However some issuers (e.g. Vimpelcom, RusAl,

Aviva) include this data into their presentations and subsections of IR websites. Interesting

15

options of reducing the impact of country risks are offered by INTER RAO UES and X5 Retail

Group: in the first case the issuer calls for “fighting corruption together” by reporting about a

relevant precedent over “the hotline” (http://www.interrao.ru/company/corrupt/), while Х5

Retail Group strives for transparency, having added unusual form of feedback “No to

corruption” (http://www.x5.ru/ru/nocorruption/nocorruption/).

COMPANIES’ RANKING IN VOLUNTARY DISCLOSURE LEVEL: GAZPROM NEFT

AND CTC MEDIA – NEW RUSSIAN LEADERS

Now let us look at the leaders of 2012 in terms of activity in the field of voluntary disclosure.

The issuers’ rankings are as follows below:

Table 14. Leaders in FVID usage activity among Russian issuers with large capitalization

Issuer Format usage activity by issuer

Market capitalization billion USD (28.06.2012)

Gazprom Neft 54.3% 20.9

Lukoil 51.4% 45.9

Gazprom 45.7% 111.0

Sberbank 45.7% 55.6

Uralkali 45.7% 22.5

Table 15. Leaders in FVID usage activity among Russian issuers with medium/small capitalization



CTC Media 42.9% 1.3

Pharmstandard 34.3% 1.7

Synergy 34.3% 0.4

LENENERGO 34.3% 0.2

Novorossiysk Commercial Sea Port (NCSP)

31.4% 1.8

http://www.x5.ru/ru/nocorruption/nocorruption/

16

Table 16. Leaders in FVID usage activity among British issuers with large capitalization



BG Group 62.9% 64.2

British American Tobacco

60.0% 97.1

Centrica 60.0% 25.6

Rio Tinto 57.1% 63.7

BP 54.3% 119.4

Table 17. Leaders in FVID usage activity among British issuers with medium/small capitalization



Grainger 45.7% 0.6

Shanks Group 45.7% 0.5

British Assets Trust Public Limited Company

34.3% 0.5

Cape 31.4% 0.5

Gem Diamonds 28.6% 0.4

The Study identified Gazprom Neft as the leader in the group of Russian issuers with large capitalization which pushed the last year’s leader, Gazprom, to the third position. Lukoil’s position has not changed since last year – still second position. The British BG Group moved two lines up having pushed last year’s leader, Vodafone Group, from the first position. British American Tobacco moved nine lines up, Rio Tinto advanced by two lines, and BP kept its last year’s position. A number of changes occurred in the ranking of Russian issuers with medium/small capitalization: the first two positions were taken by CTC media and Pharmstandard, while Synergy stayed on the third line. Lenenergo, which did not participate in the Study-2011, occupied the fourth position, and last year’s leader, Novorossiysk Commercial Cea Port, moved down from the first to the fifth position. In British ranking the situation is changing as dynamically, while the leader remained the same — Grainger

17

Below follow the companies which initiated the biggest number of new FVIDs out of 17, identified in this Study (Tables 18-21).

Table 18. Leaders in using new FVID among Russian issuers with large capitalization

Company Number of used FVIDs, (max=17)

VTB Bank 7

Sberbank 6

Gazprom Neft 6

Gazprom 5

Lukoil 4

Table 19. Leaders in using new FVID among Russian issuers with medium/small capitalization


IDGC of Volga 4

Pharmstandard 3

CTC Media 3

Enel OGK-5 2

Novorossiysk Commercial Sea Port (NCSP)

2

Table 20. Leaders in using new FVID among British issuers with large capitalization


Centrica 7

British American Tobacco

6

BG Group 6

Anglo American 6

Barclays 6

Table 21. Leaders in using new FVID among British issuers with medium/small capitalization


Grainger 5

Shanks Group 5

Anite 3

Cape 3

JPMorgan Asian Investment Trust

3

18

THE ISSUERS BECOME MORE ACTIVE IN VOLUNTARY DISCLOSURE ALONG

WITH MARKET CAPITALIZATION GROWTH

The analysis demonstrated: correlation between the size of the issuers’ market capitalization and their activity in using FVID in Russian companies (especially in medium/small) is expressed more tangibly than in British companies, i.e. in Russia the larger the company, the more attention is paid to voluntary information disclosure, while in British companies the impact of capitalization on the level of information disclosure of the issuer is less significant. This may be due to stricter requirements to disclose information to the companies listed at Western stock exchanges. Investor relations culture in general may also play a certain role, for it had been molded in the western markets long before it was formed in Russia.

Diagram 5. Correlation between market capitalization of Russian issuers with large capitalization and their FVID usage activity

Diagram 6. Correlation between market capitalization of British issuers with large capitalization and their FVID usage activity

Diagram 7. Correlation between market capitalization of Russian issuers with medium/small capitalization and their FVID usage activity

Diagram 8. Correlation between market capitalization of British issuers with medium/small capitalization and their FVID usage activity

0,0

20,0

40,0

60,0

80,0

100,0

120,0

140,0

160,0

180,0

0% 20% 40% 60% 80%

Mar

ket

cap

ital

izat

ion

, bill

ion

USD

Formats usage activity by issuers, % of max 35 formats -20,0

0,0

20,0

40,0

60,0

80,0

100,0

120,0

0% 20% 40% 60%

Mar

ket

cap

ital

izat

ion

, bill

ion

USD

Formats usage activity by issuers, % of max 35 formats

0,0

0,2

0,4

0,6

0,8

1,0

1,2

1,4

1,6

1,8

2,0

0% 10% 20% 30% 40% 50%

Mar

ket

cap

ital

izat

ion

, bill

ion

USD


0,0

0,1

0,2

0,3

0,4

0,5

0,6

0% 10% 20% 30% 40% 50%

Mar

ket

cap

ital

izat

ion

, bill

ion

USD


VOLUNTARY DISCLOSURE ACTIVITY INCREASES THE CHANCES FOR AN IRO

AND IR TEAM OF AN ISSUER TO BE RECOGNIZED BY THE INVESTMENT

COMMUNITY

There is no secret that activity in the field of voluntary disclosure contributes to recognition of the issuer by the investment community, which as a practical matter may express itself in receiving prestigious IR awards, and in companies being included into leading international rankings and ratings. Analysis of the data on the companies for the period 2009-2012 allowed to identify the correlation between the issuer’s activity in the field of voluntary disclosure and its recognition by the investment community. This resulted in setting up the model below. Diagram 9. The model of correlation between the issuer’s recognition by the investment community and its activity in the field of voluntary information disclosure

Index of recognition of the issuer by the investment community was formed as follows. The points scored by the issuers as a result of their participation in Financial Times Bowen Craggs and KWD ratings and for IR Magazine Awards, were adapted to the scale from 0% to 100%. Value of the index for an individual issuer is an average of three indicators.

y = 0,5705x + 0,0231

0%

10%

20%

30%

40%

50%

60%

0% 10% 20% 30% 40% 50% 60% 70%

Ind

ex

of

reco

gnit

ion

of

the

issu

er

by

the

inve

stm

en

t co

mm

un

ity

Coefficient of activity in the field of voluntary information disclosure

20

CONTACT INFORMATION

IR Agency INTERFAX BUSINESS SERVICE

Authors of research:

Stanislav Martushev,

Maria Gorbunova

Tel: +7 (495) 647-8850

Fax: +7 (499) 256-2520

E-mail: [email protected]

Web: www.irconsulting.ru

Interfax Business Service is a subsidiary of Interfax Group and specializes in providing consulting

and other services in the field of Investor Relations in Russia and CIS countries.

Interfax is uniquely positioned for rendering IR services: it has resources of a leading Russian

information agency, close business relations with Russian institutional and private investors, work

experience with issuers and investors in various fields (information disclosure, ratings, credit risks,

analytics).

Interfax Information Services Group creates information products and means of communication for

business and political decisions. The Group, established in 1989, combines a network of national,

regional and industrial information agencies working in Russia, other CIS countries, China and

Central Europe. Interfax (www.interfax.com, www.interfax.ru) is composed of the companies and units

which work out integrated solutions and provide news, analytical services, market data, fundamental

information.

Interfax-CEA regularly prepares statistical and analytical materials about various segments of

financial market in Russia and CIS countries, provides information about activities of Russian

institutional investors. The company’s products include as follows: daily projections and reports on the

state of various segments of financial market, ranking of Russian banks and insurance companies

issued under “Interfax-100” brand, as well as ranking of the banks and insurance companies of the

CIS countries – “Interfax-1000”.

An international rating agency Moody's Investors Service is Interfax’s partner in Moody's Interfax

Rating Agency, which holds leading position in the Russian rating services market.

Together with Experian, a world leader in the field of information solutions for business, Interfax

established a credit bureau “Experian-Interfax” with a view to providing information regarding

timeliness of credit payments by borrowers.

A special analytical service provider Interfax-ACI, which is a part of Interfax Group, established the

largest information and analytical data base about the companies – SPARK - which consolidated

information about all legal entities registered in Russia.

mailto:[email protected]

http://www.irconsulting.ru/

http://www.interfax.com/

http://www.interfax.ru/

21

IBS Clients in 2008-2012

This material is an intellectual property of “Interfax Business Service” CJSC. All intellectual rights of the Company are protected in accordance with the legislation of the Russian Federation. Neither part of this material can be sold, reproduced or disseminated without written consent of the Company. All information contained in this material is received by “Interfax Business Service” CJSC from sources considered to be reliable by the Company. The Company does not guarantee absolute reliability of the provided information given the possibility of technical or human error or other factors. Any judgments contained in this material must be considered as nothing but opinion of the Company’s experts rather than a recommendation to buy or sell securities/investment funds’ shares or to use any of the financial instruments.