Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
2
3
Introduction
AN OVERVIEW OF THE MAIN RISK FACTORS INHERENT IN TAJIK COMPANIES THAT
SIGNIFICANTLY IMPAIR THEIR PERFORMANC...
4
Corporate governance is one of the
determining factors in adopting investment
decisions: “Over 80% of investors declare
...
5
Summary
THE PURPOSE OF THIS RESEARCH IS TO PROVIDE A COMPREHENSIVE ASSESSMENT OF THE
COMPLETENESS AND QUALITY OF COMMUNI...
6
Methodology
THIS SURVEY COVERED 32 COMPANIES FROM AMONG FINANCIAL INSTITUTIONS AND
NON-FINANCIAL COMPANIES THAT HAVE COR...
7
Characteristics of the sample
OUR RESEARCH COVERED THE COMPANIES, FOR WHICH TAJIKISTAN IS THE MAIN
PRODUCTION BASE, REGA...
8
Criterion 1.
A separate page for investors
IN CASE OF INVESTOR INTEREST, IN ADDITION TO A SEPARATE SERVICE OR SPECIALIST...
9
Criterion 2.
Minimum information for shareholders and
investors
INVESTORS AND SHAREHOLDERS OF THE COMPANY WANT TO UNDERS...
10
At the same time, the quality of the
provided information indicates of improper
attention to interested parties. The pr...
11
Criterion 3.
Financial Information
FOR INVESTORS ACCESS TO FINANCIAL INFORMATION IS ONE OF THE MAJOR FACTORS
FOR INVEST...
12
Criterion 4.
Ownership Structure
INFORMATION ON THE OWNERSHIP STRUCTURE OF THE COMPANY AND INFORMATION
ABOUT PERSONS (G...
13
Criterion 5.
Corporate governance
IN A COMPANY, IN WHICH THEY HAVE ALREADY INVESTED OR ARE WILLING TO INVEST
THEIR FUND...
14
description of the biography and
professional experience.
It should be noted that a positive fact is that
25% of compan...
15
Criterion 6.
Disclosure of corporate information
ACCORDING TO THE CORPORATE GOVERNANCE PRINCIPLES: STAKEHOLDERS OF THE
...
16
Criterion 7.
Data on the issuer’s rating
THE ISSUER’S RATING CAN OTHERWISE BE SEEN AS THE BUSINESS PARTNER RATING.
THIS...
17
Criterion 8.
Frequently Asked Questions / availability of
the corporate profiles in social networks
FEEDBACK AND VISIBI...
18
Criterion 9.
Contacts for investors
HOW CAN POTENTIAL INVESTORS CONTACT THE COMPANY’S MANAGEMENT WITHOUT
UNNECESSARY DI...
19
Criterion 10.
Compliance with best IR practice
CORPORATE WEBSITE SHOULD BE AIMED AT PRESENTING A POSITIVE IMAGE OF THE
...
20
This way, the company demonstrates
professionalism and commitment to
providing complete and reliable information
about ...
21
5,13
5,08
4,85
4,22
3,22
2,97
2,68
2,53
2,4
2,28
2,2
2,17
1,98
1,75
1,52
1,37
1,36
1,28
1,27
1,1
1,1
0,83
0,7
0,68
0,55...
22
IMKON CONSULTING
IMKON CONSULTING OPERATES IN THE MARKET OF TAJIKISTAN SINCE 2007.
THE COMPANY SPECIALIZES IN A RANGE O...
23
734002 Republic of Tajikistan, Dushanbe, 45
M.Tursun-zade str., off 518
www.imkon.net; centre@imkon.net;
tel.: +992 372...
Corporate Websites through the Eyes of an Investor. Republic of Tajikistan
Upcoming SlideShare
Loading in …5
×

Corporate Websites through the Eyes of an Investor. Republic of Tajikistan

860 views

Published on

Surveying Corporate Governance in the Republic of Tajikistan: Corporate Websites through the Eyes of an Investor, is an independently produced survey of corporate information disclosure practices in Tajikistan. It finds that most companies disclose corporate information, including details about financing, performance, ownership, and governance, on an ad hoc basis, often with incomplete information.

Published in: Investor Relations
  • Be the first to comment

Corporate Websites through the Eyes of an Investor. Republic of Tajikistan

  1. 1. 2
  2. 2. 3 Introduction AN OVERVIEW OF THE MAIN RISK FACTORS INHERENT IN TAJIK COMPANIES THAT SIGNIFICANTLY IMPAIR THEIR PERFORMANCE, MARKET VALUE AND ATTRACTIVENESS TO INVESTORS IS POOR CORPORATE GOVERNANCE When speaking about the current crisis and its impact on Tajikistan, experts emphasize that the country will have to face a significant reduction in the inflow of hard currency. There are no doubts that today Tajikistan's economy urgently needs investment more than ever. In turn, the activity of any company depends not only on appropriately selected strategy, but competent management, availability of valuable resources and markets. Successful development of any business is impossible without access to investment capital. It is very important to understand that investors will not invest significant amounts of money in a company with no effective management and control over its activities. Investors want to:  Understand the specifics of companies’ operations and the extent of their transparency;  be able to assess their risks;  know how the company takes account of the interests of all shareholders, including minority ones;  have more information when adopting investment decisions;  compare corporate governance standards in different companies. In other words, the inflow of private investment is only possible given that the financial and managerial activity of the enterprise is transparent. Investors want to participate in real control over the management process in order to ensure efficient use of assets for exercising their interests. They want to see effective corporate governance systems in the companies, in which they have already invested or are willing to invest their money. This should be a system, which ensures appropriate transparency and clarity in the process of adopting corporate decisions and thus provides investors with additional guarantees. Investors need the key corporate governance procedures to comply with all these requirements and adequately secured in the internal documents of the company. A company willing to attract investment must meet expectations of potential investors / shareholders, primarily in terms of transparency of information about the business. The benchmarks in this area are information transparency standards developed under the corporate laws of different countries, as well as various codes and recommendations.
  3. 3. 4 Corporate governance is one of the determining factors in adopting investment decisions: “Over 80% of investors declare their willingness to pay more for shares of companies with good corporate governance compared to companies with poor governance”1(McKinsey & Co., Investor Opinion Study, June 2000). Corporate governance:  increases investment attractiveness,  helps to attract long-term investors,  reduces the cost of loans,  increases the market value of a company. According to a research study, The Emerging Market Investor Survey, conducted by the IFC in 2010, 100% of investors believe that: Corporate governance is an important factor for adopting investment decisions and a part of the pre-investment audit of the company. 50% emphasized that: They would invest at least 10% more in companies with better governance in the emerging markets 40% stated that: Well-managed companies can compensate for some of their shortcomings through corporate governance. The corporate governance level in each country is affected by its history, culture and legislation. The rate and level of development of corporate governance practices in Tajikistan are significantly different from those observed in other countries of the former Soviet Union including Russia, Kazakhstan and Ukraine. This could be due to specificity of the economic growth of the country and current institutional reforms. According to our observations during investment forums in 2014, most potential investors demonstrated no interest in investing their resources in businesses in Tajikistan due to risks associated with the lack of openness and transparency of companies’ activity. Corporate governance is a relatively new topic for Tajik companies. Starting from market reforms, the vast majority of companies preferred to develop exclusively using their own funds. At the same time, the political and economic situation in the country and underdeveloped securities market restricted the ability of companies to attract investment. However, today due to dynamic technological changes and intense competition, the lack of companies’ own funds became apparent. The need for attracting external funds on a regular basis and in large amounts is inevitable. For this the companies must demonstrate that they operate in line with modern governance principles. 1 (McKinsey & Co., Investor Opinion Study, June 2000).
  4. 4. 5 Summary THE PURPOSE OF THIS RESEARCH IS TO PROVIDE A COMPREHENSIVE ASSESSMENT OF THE COMPLETENESS AND QUALITY OF COMMUNICATION WITH THE INVESTMENT COMMUNITY THROUGH CORPORATE WEBSITES, AS WELL AS TO ANALYZE POSSIBLE DIRECTIONS OF COMMUNICATION DEVELOPMENT BY TAJIK COMPANIES Currently, the channel for disseminating information, which entails minor costs for both joint stock companies and stakeholders is the corporate website. It has become one of the main sources of information about the company. In accordance with best practice, companies with a “high” level of transparency post all necessary internal documents, news and publications about the company on their corporate websites. In turn, well organized corporate website contributes to the formation of a favorable image of the company, which is another asset of the company for building effective relationships with investors and shareholders. By placing a web site on the Internet with regular disclosure of information, a company provides online access to corporate information to any interested party for free, which is an important precondition for the formation of the image and reputation of the company. The lack of a section on disclosure of corporate information on the website, or failure to regularly disclose information in the news column of the authorized information agencies, makes it difficult to analyze company’s activity and may indicate of a high investment risk. However, business practice shows that not all companies have understand the importance of this tool. There are a number of typical shortcomings related to the disclosure on company websites: A formal approach to reporting; Provided information is not systematized, which does not allow an overall picture of the company to become apparent; A lack of clarity of methods for calculating presented indicators; The lack of description of the competitive position and advantages of the business; Risks associated with the company are described using general wording; A lack of information about the company's social responsibility policy. As practice shows, currently openness and transparency of the business are intangible assets that help companies maintain continuous relationship with investors and attract the required funds for the development of the company.
  5. 5. 6 Methodology THIS SURVEY COVERED 32 COMPANIES FROM AMONG FINANCIAL INSTITUTIONS AND NON-FINANCIAL COMPANIES THAT HAVE CORPORATE WEBSITES AND ARE POTENTIALLY ATTRACTIVE FOR INVESTORS The obvious advantage of this approach to assessment is that it enabled to conduct a universal analysis of public data of the Tajik companies. All these companies are potentially attractive for investors. Disadvantage of this approach is that it was impossible for the research to cover several large Tajik companies that either have no corporate websites, or that have websites in the process of development. This research examined external attributes of corporate governance that can be meaningfully analyzed on the basis of public information. Our analysis is based solely on the information provided on the corporate websites of the companies. Only information published by companies before December 31, 2014 was used for the analysis. We assessed publicly available information using 10-point scale, in the context of the following information / sections: 1. A separate page for shareholders (investors) 2. The minimum possible information for shareholders (investors) 3. Financial information 4. Ownership structure 5. Corporate governance 6. Disclosure of information 7. Data on the issuer’s rating 8. Frequently Asked Questions / availability of the corporate profiles in social networks 9. Contact information for investors 10.Compliance with best international practices Each section was assessed by analyzing certain groups of parameters and their subgroups. In the absence of information on the parameter for assessment on the website, the company was awarded 0 for this parameter. In assessing the group parameter, the total score for the group was divided by the number of assessed subgroups. For example, to assess the availability of financial information on the website, posting of reports that are in line with IFRS, availability of the audit reports and the company's accounting policies, as well as liquidity indicators were assessed.
  6. 6. 7 Characteristics of the sample OUR RESEARCH COVERED THE COMPANIES, FOR WHICH TAJIKISTAN IS THE MAIN PRODUCTION BASE, REGARDLESS OF THE COUNTRY OF REGISTRATION AND AVAILABILITY OF THE PARENT COMPANIES As can be seen from the diagram, 32 companies from the following six sectors were covered by the survey: 1. Finance - 18 2. Telecommunications - 5 3. Manufacturing - 5 4. Health Services - 1 5. Services - 2 6. Transport – 1 It is noteworthy that there were more companies from the category “Financial sector”, as implementation of the corporate governance standards and principles in this industry is regulated by the National Bank of Tajikistan. Corporate governance of companies from other industries is regulated under the legislation that is relevant and applicable to their form of business. Disclosure of the financial information is mandatory for open joint stock companies and is voluntary for closed ones. This survey does not cover those joint stock companies that do not have their corporate websites, such as:  OJSC “Rogun HPP”  OJSC “Tajiktransgas”  OJSC “Chuan Tong Tajikistan”  OJSC “Shirin”  OJSC Plant “Torgmash”  OJSC “Nafisa”  OJSC “Todjhkabel”  OJSC “Barki Tochik”  OJSC “Kolinhoi Kayrokum”  OJSC “Tajikcement”  and others 0 2 4 6 8 10 12 14 16 18 20 ЗАО ОАО ГСБ The structure of the respondents CJSC OJSC SSB* 56%16% 16% 6% 3% 3% Sectoral structure of respondents Financial Telecommunications Production Services Transport Health Services
  7. 7. 8 Criterion 1. A separate page for investors IN CASE OF INVESTOR INTEREST, IN ADDITION TO A SEPARATE SERVICE OR SPECIALIST, THE COMPANY SHALL HAVE AN INFORMATIONAL RESOURCE INTENDED FOR INFORMING COMPANY'S INVESTORS In accordance with best practice, a separate page for investors shall include the following:  A brief background of the company  Financial performance  Information on shares / bonds of company  Its ratings  IR releases  Presentations for investors  IR contacts In this survey, we followed the minimum requirements to a separate page for investors. However, only 6 of the 32 respondents have a separate page “For investors” on their corporate website”. The information provided on this web-page is not in line with the corporate governance principles. Most companies have developed interactive manuals and calculators on products for clients. This interactivity is intended exclusively for the clients. In addition, the corporate websites of the researched companies have no any special services for on-line communications. 6 26 0 5 10 15 20 25 30 есть нет "For Investors" yes no 0 5 10 15 20 25 30 0 0,25 0,5 1 Respondents Scores A separate page for investors
  8. 8. 9 Criterion 2. Minimum information for shareholders and investors INVESTORS AND SHAREHOLDERS OF THE COMPANY WANT TO UNDERSTAND THE SPECIFICS OF THE COMPANY’S OPERATION, ITS DEGREE OF TRANSPARENCY; BE ABLE TO ASSESS COMPANY’S RISKS; KNOW HOW THE COMPANY TAKES ACCOUNT OF INTERESTS OF ALL SHAREHOLDERS; AND HAVE MORE INFORMATION WHEN MAKING DECISIONS In accordance with best practices, the following information should be provided on the corporate website:  A brief analytical memo on the company’s position as at the current date;  Information about the rights of shareholders;  The structure of the share capital;  Information on the registrar;  Minutes of the general meetings of shareholders;  Decisions of the Board of Directors (Supervisory Board);  Decision of the management boards;  Events calendar;  Press releases;  Investor calendar. The use of corporate websites by Tajik companies as a communication means not only with the client base, but also with shareholders and the investment community shall be improved. So, even those companies that have web- pages “For investors / shareholders” do not provide enough information. None of the surveyed companies received the highest score for this category. 1 6 11 16 21 26 31 0 0,1 0,3 0,5 1 Respondents Scores Existing minimum information
  9. 9. 10 At the same time, the quality of the provided information indicates of improper attention to interested parties. The provided information is either outdated or fragmented, and is insufficient for decision making. None of the surveyed companies provided information on the registrar. The structure of the equity capital (without details) was indicated by 7 joint-stock companies. Decisions of the Board of Directors are posted on the website by the two companies and minutes of the general meetings of shareholders - by only one company. 0 5 10 15 20 25 30 Shareholding Structure Decisions of the Board of Directors Minutes of General Meetings of… Brief analytical report on the state of… Information about shareholders' rights Information on registrar Government solutions Calendar of Events Press Releases Investor Calendar Minimum information for shareholders and investors
  10. 10. 11 Criterion 3. Financial Information FOR INVESTORS ACCESS TO FINANCIAL INFORMATION IS ONE OF THE MAJOR FACTORS FOR INVESTMENT DECISIONS Public financial statements are useful to a wide range of users for adopting economic decisions. Financial statements also show the results of handling the resources entrusted to the company’s management. Financial statements enable to predict future cash flows of the company and, in particular, the timing and probability of their occurrence. Accordingly, if an investor is unable to calculate his financial risks and capital flow, he will not risk his funds. Unfortunately, not all respondents covered by this research share this information on their corporate website. For example, only 15 of the 32 respondents provided this information on their website, which is less than 50% of the sample. Public posting of financial information was assessed using as a minimum of four indicators:  Reporting under IFRS  Audit reports  Accounting policies  Liquidity indicators International financial reporting standards (IFRS) are a structured reflection of the financial position and performance of the enterprise. According to the Law on Accounting and Financial Reporting of RT, all joint stock companies must prepare IFRS compliant financial statements. IFRS compliant financial statements were presented by only 14 companies. For analyzing the reliability of the financial statements of the company, the law obliges joint stock companies to conduct audit involving external independent auditor. Only 8 of the 32 companies posted the reports of independent auditors on their websites. Only 9 companies provided liquidity indicators, while summarized financial information provided by 15 companies is outdated. 44% 56% Financial statements yes no 0 5 10 15 20 25 30 National standards… IFRS statements Auditor’s Report Accounting policies Portfolio credit… yes no
  11. 11. 12 Criterion 4. Ownership Structure INFORMATION ON THE OWNERSHIP STRUCTURE OF THE COMPANY AND INFORMATION ABOUT PERSONS (GROUP OF PERSONS) WHO DIRECTLY OR INDIRECTLY (THROUGH THIRD PERSONS) SIGNIFICANTLY AFFECT THE DECISIONS ADOPTED BY THE MANAGEMENT BOARDS OF THE COMPANY MUST BE TRANSPARENT In accordance with best practice, corporate website should provide information on the ownership structure, including:  The structure of the share capital;  Information on ownership of shares by the management and members of the Supervisory Board;  The list of affiliated persons (owners with more than 10% of shares) The survey showed that only 7 (seven) companies outlined the structure of the share capital. At the same time, we can state that it is rather a formal disclosure of the structure. Four companies did not fully present information about ownership of shares by the management and members of the Supervisory Board. Only 3 companies listed their affiliated parties on the website. The lack of this information or its incomplete disclosure involves risks for both shareholders and investors of the company, and clients. For example, the depositor of a bank is normally guided by information about the actual owner in the mass media and assumes the risks, the sources of which are beneficiaries. . 0 5 10 15 20 25 30 Affiliated Parties/Persons list (Beneficiary Owner with more than 10 % shares) Information about Shareholders of management, members of Supervisory Board Shareholding Structure Ownership Structure
  12. 12. 13 Criterion 5. Corporate governance IN A COMPANY, IN WHICH THEY HAVE ALREADY INVESTED OR ARE WILLING TO INVEST THEIR FUNDS, THE INVESTORS WANT TO SEE THE CORPORATE GOVERNANCE SYSTEM THAT ENSURES AN ADEQUATE LEVEL OF INFORMATIONAL TRANSPARENCY AND CLARIFY OF THE PROCESS OF CORPORATE DECISION MAKING AND THUS PROVIDE THEM WITH ADDITIONAL GUARANTEES The survey showed that Tajik joint stock companies do not pay enough attention to corporate governance issues. In accordance with best corporate governance practices, the level of appropriate disclosure is assessed based on the presence of the following documents / information:  The Regulations on the management board: GMS, SB, SC, management Board, and etc.;  The Charter;  The dividend policy;  Data on the composition of management;  Data on the composition of the SB, including the presence of independent directors;  Corporate Governance Code;  The Regulations on information disclosure;  The procedure of informing shareholders with information about the company’s activity. In our survey, we analyzed public information about the corporate governance structure compared to the appropriate national and international corporate governance practices. Initially, the formation of the corporate governance system was caused by the requirements of the Law on Joint Stock Companies of RT and the requirements of the NBRT for financial institutions. Subsequently, one of the benchmarks of best practice for companies of RT were the National corporate governance standards of RT (Standards) developed by joint efforts of the working group established by the Agency for securities market development and specialized registrar, and with technical support from the IFC Corporate Governance in Central Asia. The above standards reflect both the requirements of the current legislation of the Republic of Tajikistan and best corporate governance practice. Joint-stock companies view disclosure of the composition of management bodies as a priority. The survey showed that 50% of companies disclose composition of the Board, 35% of the companies disclose composition of the Supervisory Board, and 25% of the companies disclose information about independent directors. Good practice indicates that in most cases information about members of the Board is accompanied by a photo with the Presence of documents yes no
  13. 13. 14 description of the biography and professional experience. It should be noted that a positive fact is that 25% of companies have independent directors in their boards. The company's charter is posted by only 3 out of the 32 surveyed companies. However, none of the companies has posted the following documents on the corporate website:  The Regulations on the management boards: GMS, SB, SC, management Board, and etc.;  The dividend policy;  Corporate Governance Code;  Data on the composition of the SB, including the presence of independent directors;  The Regulations on information disclosure;  The procedure of informing shareholders with information about the company’s activity The corporate websites of the surveyed companies do not have any data on the risk management system. Websites of none of companies provide corporate governance code. There is also no information about the committees established and functioning under the companies’ boards of directors. 0 5 10 15 20 25 30 35 Corporate Governance structure The Charter The Regulations on the management… The dividend policy Data on the composition of management Data on the composition of managemen Corporate Governance Code; The Regulations on information disclosure Data on the composition of the SB,… The procedure of informing shareholders… Corporate Documents on the website 0 0,05 0,1Scores
  14. 14. 15 Criterion 6. Disclosure of corporate information ACCORDING TO THE CORPORATE GOVERNANCE PRINCIPLES: STAKEHOLDERS OF THE COMPANY SHALL HAVE FREE AND EASY ACCESS TO PUBLICLY DISCLOSED INFORMATION AS NECESSARY FOR MAKING APPROPRIATE DECISIONS The most common and familiar tools of information disclosure for surveyed companies are press releases and reports on corporate events (75%). Only 31% of companies post their annual corporate reports and only 2% of companies post presentations for investors. This information is usually posted in the news section along with other events of the company. Unfortunately, investors and shareholders have to guess, where they can find necessary data on the website. There is virtually no information on general meetings of shareholders in the form of both separate messages, and downloadable minutes of meetings. A common practice is delayed updating of data and no attention to ensuring website operation (dead links, late reconstruction). The company's emphasis on communication through press releases and reports on corporate events without simultaneous development of new channels indicates of outdated approaches to communication with investors with no account of changes in the requirements of investors. 0% 10% 20% 30% 40% 50% 60% 70% 80% Presentations for investors Corporate reports Press releases Corporate events Corporate information
  15. 15. 16 Criterion 7. Data on the issuer’s rating THE ISSUER’S RATING CAN OTHERWISE BE SEEN AS THE BUSINESS PARTNER RATING. THIS RATING MEASURES THE ABILITY OF THE COMPANY TO TIMELY DISCHARGE ITS DEBT OBLIGATIONS AND IS ONE OF THE IMPORTANT INDICATORS FOR INVESTORS In deciding about investing capital, the key references for investors are scores assigned to the company by well-known rating agencies. Keeping this in mind, the company can use paid services of one of the agencies and get its credit rating and assessment of its corporate governance level. In its operations and disclosure of information, the company may follow standards that are considered to be most important by the majority of the rating agencies. There is also the practice of developing and implementation of the national rating, for example, in countries such as Kazakhstan, Ukraine and Russia. Unfortunately, Tajikistan does not have any national standards for debt assessment at the moment. Companies from non-financial sector do not participate in ratings. In this case, the parent company, for example, of the mobile operators have rating from the international rating agencies. However, it should be noted that one of the banks in Tajikistan for the three subsequent years is rated by the international rating agency Moody's. Several companies operating in the microfinance sector use services of the Micro Finanza Rating, as well as Planet Rating. The three major international rating agencies (Big 3) are:  Standard & Poor’s  Moody’s Investors Service  Fitch Ratings These agencies assess credit ratings, assets recovery ratings, financial sustainability ratings, corporate governance ratings, and many others. The objects of the assessment are: corporations, banks, insurance companies, regional and local authorities, cities and even countries.
  16. 16. 17 Criterion 8. Frequently Asked Questions / availability of the corporate profiles in social networks FEEDBACK AND VISIBILITY IN SOCIAL NETWORKS ARE IMPORTANT TOOLS FOR BUILDING A MAXIMUM EFFECTIVE TWO-WAY COMMUNICATION CHANNEL BETWEEN COMPANIES AND INVESTORS, SHAREHOLDERS, CLIENTS, PARTNERS AND COMMUNITIES This section of the website with frequently asked questions greatly facilitates the work of those responsible for operation of the website, since there would be no need to repeatedly answer the same questions. Only 6 companies or 19% of the surveyed companies have this section on their websites. However, it should be noted that the information in the Frequently Asked Questions section often covers issues related to products and services produced by companies. None of the surveyed companies posted information about the elements in this section of their websites. The company's visibility in social networks and regular publication of news on the above communication channels allows the company to be closer to the target audience, create a certain level of confidence and thus enhancing loyalty to the company. Following the global trend, companies have begun to include social networks in their communication channels (45%), the most common of which is Facebook. At the same time, in some cases, the content of the information posted on the corporate website is limited and it is updated with delay, while there is a constant news flow in the social network. The research did not find any mobile versions of websites of the surveyed companies. 0% 10% 20% 30% 40% 50% Facebook Twitter Linkedin Presence in the Social Networks
  17. 17. 18 Criterion 9. Contacts for investors HOW CAN POTENTIAL INVESTORS CONTACT THE COMPANY’S MANAGEMENT WITHOUT UNNECESSARY DIFFICULTY? Typically, contact information sections on corporate websites provide phone numbers of the call center and the address of the company. Specialists from call centers have no information that does not relate to the company's products or services. For example this includes the general meetings of shareholders, contact details of corporate secretaries, availability of press releases and others. One of the major mistakes in communication policies of the Tajik companies is improper understanding of the importance of having an investor relations officer responsible for communication with investors. In accordance with best practices, communication with investors must meet the following requirements:  Ease of communication (usability);  Multilingual information for investors;  A feedback form;  IRO personal data;  A Subscription for updates, news RSS- line. 99% of companies do not indicate on their websites any contacts for communication with investors. Only 1 company has provided the contact details of an investor relations officer. This is in accordance with best practices, communication with investors2 section on investor relations officer. 2 Richard Higgins. Investor Relations: best practices. Towards the creation of shareholder value / Higgins Richard; translated from English. - M .: Alpina Business Books, 2005. Tomas Ryan, M. Jacobs Chad. Using investor relations for maximized evaluation of the equity capital / Trans. The corporate website should provide a feedback form that ensures on-line clarification of questions and immediate response. 69% of companies have a feedback form on their websites, but there was no opportunity to assess its efficiency and response to questions. In modern practice, in communicating with clients, they use on-line consultants; this allows to immediately get answers to their questions for the clients. Subscription to website updates allows on- line and prompt access to information, immediately after publication of news on the website, and coverage of the whole audience. Only two companies use this tool. from English by A. E. Jibrova. - M .: Publishing house “Gorodets”, 2009. Organization of investor relations: Russian and foreign practice. - M .: Alpina Publishers, 2010. – p. 230 IR Magazine Global Investor Relations Practice Report 2014 / IR Magazine. - London, 2014.
  18. 18. 19 Criterion 10. Compliance with best IR practice CORPORATE WEBSITE SHOULD BE AIMED AT PRESENTING A POSITIVE IMAGE OF THE COMPANY. THE QUALITY OF THE WEBSITE (AND ITS IR SECTION) SHALL BE CHECKED USING A SIMPLE TEST: WOULD YOU BE WILLING TO INVEST IN COMPANIES BASED ON THE DATA, WHICH YOU CAN FIND ON THEIR CORPORATE WEBSITES? Given that the capacity of the internal investment market is insufficient for capital intensive companies, therefore, availability of documents in English on the corporate website enables it to reach a broader audience of the website, a international levels. This approach allows significant development of cooperation with the international investment community, increasing the level of transparency for the purpose of positioning the company as a market leader. The majority, i.e. 18 of 32 (or 56%) of the surveyed companies have an English version of the website. The option providing the possibility to download documents is important so that analysts of investors could have all the necessary documentation for analyzing company activity and receiving performance indicators as necessary for making appropriate decisions. Only 8 companies provide the option for downloading files from the website, however, the files posted in only one format are with no indication of the date and name of the document. Posting the documents in various formats, such as, xls, pdf or doc simplifies analysis of the documentation. Almost all surveyed companies post documents in pdf format, which does not allow data processing using analytical programs. Most of the surveyed companies do not provide marking of the documents, which is important for the users so that they could download the document, which they need. In turn, marking of the documents makes it easier to search the document using the “website search” function. Only 28% of companies indicate the size and format of the documents, which is too low compared to best practice. At the same time, there is no information on regular updating of the documents with the date of the last update. Decisions of the Board of Directors (Supervisory Board) or the Management Board and other documents of the surveyed companies have no indications of the date, making it difficult to search documents in the list. Switching from one section on the website to another should normally be through no more than three clicks, as for website visitors it is often very difficult to understand the logic behind the website structure and intricacy of “dead ends” in sections. However, in most of the surveyed corporate websites one can switch from one section to another through more than three clicks. A short path to the information on the website, such as “website map” or links to information sections that are the most important for investors on the main page of the website helps to reduce the time for searching necessary documentation or information on the website.
  19. 19. 20 This way, the company demonstrates professionalism and commitment to providing complete and reliable information about its activities. However, as was mentioned above, the architecture of most websites is extremely “sophisticated”. Analytical market reviews enable investors to see the company's position in the market, its competitive ability and prospects of development of both the company and the market in general. Only one out of 32 companies posted analytical report on its website. The option “website search” is linked with the option of documents marking. Through daily routine updating of information, the web-resource becomes a massive source of important documents, which in case of incorrect work of the website can be hidden from potential investors and affect the correct judgment about the company. Only 18 companies provide the “website search” option. The companies also neglect visual display of information, which is the best way to communicate information and allows to visually demonstrate performance of the company using graphic image and thus positively affect the decision-making by the investor. Only 6% of companies used this tool for communicating information. Below are key parameters of compliance with the best investor relations practice in the form of a diagram. At this stage, we can not speak about friendliness and maximum focus of the surveyed companies on high quality two- way communication with investors. It seems that the companies are rather “fenced off” from the investors. 0 5 10 15 20 25 30 English site version Ability of files download Posting documents in different formats Tagging documents: format, size Regular updates with the date of last update Goes among the blocks (documents) no more than 3 clicks Short path site location Analytics market review (Statements’ Releases) Site searching Graphical Data visualization Compliance with best IR practice 0,1 0,05 0
  20. 20. 21 5,13 5,08 4,85 4,22 3,22 2,97 2,68 2,53 2,4 2,28 2,2 2,17 1,98 1,75 1,52 1,37 1,36 1,28 1,27 1,1 1,1 0,83 0,7 0,68 0,55 0,43 0,1 0 0 0 0 0 0 2 4 6 8 10 OJSC «Bank Eskhata» OJSC «Sangtudinskaya GES-1» CJSC «AccessBank Tajikistan» CJSC «Spitamen Bank» CJSC MDO «Bovari va Khamkori» CJSC MDO «Imon International» SSB RT «Amonatbonk» OJSC «Orienbank» OJSC «Agroinvestbank» CJSC «Fononbonk» CJSC «Kazkommercbank Tajikistan» OJSC «Teleradiocom» OJSC «Tojiksodirotbank» CJSC «First Microfinancial Bank» CJSC IB «Kont» CJSC «Humo» CJSC «Tajprombank» OJSC «Sokhibkorbank» OJSC «Tajik Air» CJSC «Babilon-M» CJSC «Indigo - Tajikistan» CJSC «TelecommTechnology LTD» IC IBN SINO CJSC MDO «Samar» OJSC «Neksigol» OJSC «International Airport… OJSC «Avicenna» CJSC «Banki Rushdi Tojikiston» OJSC «Mekhnonkhonai Tojikiston» CJSC «Tajam» (Sim-Sim) CJSC «TTmobile» MLT OJSC «Fabrikai shirii Saodat» The rating results
  21. 21. 22 IMKON CONSULTING IMKON CONSULTING OPERATES IN THE MARKET OF TAJIKISTAN SINCE 2007. THE COMPANY SPECIALIZES IN A RANGE OF SERVICES IN MANAGEMENT CONSULTING AND BUSINESS EDUCATION. IMKON CONSULTING ARE OFFICIAL PARTNERS OF IFC CORPORATE GOVERNANCE. This report (or this publication) is produced in partnership with the IFC Central Asia Corporate Governance Project, which is financed by the government of Switzerland and the United Kingdom’s Department for International Development (DFID) and Ukrainian agency Investor Relations Agency. PARTNERS INTERNATIONAL FINANCIAL CORPORATION IFC Central Asia Corporate Governance Project The project helps local joint stock companies and banks strengthen their corporate governance practices to increase their ability to attract financing and manage risks. The project is made possible with financial support from the government of Switzerland and the United Kingdom’s Department for International Development (DFID). IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. Working with private enterprises in about 100 countries, we use our capital, expertise, and influence to help eliminate extreme poverty and boost shared prosperity. In FY14, we provided more than $22 billion in financing to improve lives in developing countries and tackle the most urgent challenges of development. For more information, visit www.ifc.org. INVESTOR RELATIONS AGENCY "Investor Relations Agency – the first national Ukrainian agency that specializes in providing a full range of financial analytics, information, consulting and communication services of the organization of investor relations, corporate governance and sustainable business development. Investor Relations Agency operating in Ukraine since 2008. Company site – www.ua-ir.com.ua"
  22. 22. 23 734002 Republic of Tajikistan, Dushanbe, 45 M.Tursun-zade str., off 518 www.imkon.net; centre@imkon.net; tel.: +992 372 218799; 992 372 218891

×