Information disclosure: further initiatives

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• Information disclosure further initiatives

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Key topics

• Overview of ARFIs networking advantages
• Official recognition of IR profession in the
  Russian Federation
• ARFI initiatives regulations for IR departments
• Duty responsibilities
• Professional license (IR certificate)
• Best practice
• Corporate disclosure rules
• Committee on the disclosure policy

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Financial Communications and Investor Relations
Association

• Founded in 2000
• Comprises leading Russian stock exchanges,
  financial media, consultants, issuers to come in
• No permanent staff
• Corporate governance
• General meeting
• BoD, Executive director, Secretariat
• Supervising Board, government officials and
  experts
• Code of Ethics was approved in 2001
• 7 Committees, IR Club, Working groups
• Reorganized in 2008, ex-AFBID

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committees

• ARFIs affiliates have the right to influence in
  the IR lanscape developments through
  participation in initiatives of the committees
• Technical Audit (Standards), 2002
• Legislation, 2003
• Ticker Unification, 2007
• Ratings, 2007
• Membership, 2008
• IR Certification, 2008
• International Affairs, 2008

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IR profession in Russia

• The IR qualification requirements were collected
  and addressed to the Health and Social
  Development Ministry (a survey of ARFI, 2007)
• April 29, 2008 became the official birthday of IR
  profession in Russia

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between Scylla and Charybdis

• IR market in the Russian Federation is of great
  potential and remarkably growing.
• IR profession is underway
• IR services have appeared in Russia
• If top management comes to the conclusion that
  IR is important, then one can easily find an IR
  professional and adopt best practice.

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best practice

• The aim of IR specialists is to build long-term
  relationships and credibility with our
  shareholders and potential investors
• The basic component of Investor Relations is
  disclosing information about the companys
  business, corporate actions, corporate
  governance, audit, and other material data

• IR director
• IR officer
• Head of IR department
• IR specialist

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compensations

• RUR 1.6M monthly ex. bonuses in average
• Top managers annually ex. bonuses RUR2.5-3.5M, up
  to USD500K
• IR specialist RUR1-2M

Source ARFI, 2007-2008
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trends in IR services market

• Balanced
• Development of IR strategy
• Annual reports, IR presentations, investment
  memorandums
• Information disclosure
• Investor targeting
• Road Show

• Demands higher than Supply
• IR pages on the web sites
• Investor perception survey
• Investment Marketing campaigns
• Financial analysis
• Public/Private placement services
• Ratings

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IR certification

• ARFI standards were recommended to the
  educational centers in Russia by expertise of the
  Health and Social Development Ministry
• The committee was created in July 2008 to
  initiate common market educational standards

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Disclosure system in Russia
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New paradigms
Issuer

• ?????? Single window approach
• News releases vs Press releases
• No news is NOT a good news

Corporate Information Center
Intermediaries
Investors
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disclosure policy

• Document recommended by the Corporate Governance
  Code of the FFMS of Russia
• Not only public companies
• Must have for the A-listed companies (1st level
  154 issues of 106 issuers, 2nd level 41 issues of
  29 issuers as of June 2008 end)

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disclosure committee

• Its responsibility
• Control over disclosure policy
• Materiality of information
• Not necessary
• 3 to 5 members
• At the BoD or Executive Board?
• First dozen of pioneering issuers

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contacts

• Ms.Olga Rink
• ARFI Executive director
• www.arfi.ru
• mailto contacts_at_arfi.ru
• Secretariat
• Address 2/1 Tverskaya-Yamskaya street, Moscow,
  127006, Russia
• Tel. 7.495.250-89-13
• Faximile 7.495.251-44-47