handbook on investor relations - oil...
TRANSCRIPT
Driving Long-term Shareholders Value
Corporate Office : OIL House, Plot Number 19, Sector 16A, Noida, District Gautam Budh Nagar, Uttar Pradesh 201301, India
Tel; +91 (120) 2488 333. Website : www.oil-india.com
HANDBOOK ON INVESTOR RELATIONS
Handbook on Investor Relations
Investor Relations is a strategic management responsibility that integrates finance, communication, marketing and securities law compliance to enable the most effective two way communication between a company, the financial community, and other constituencies, which ultimately contributes to a Company’s securities in
achieving fair valuation. Our Investor Relations Programme (IRP) is aimed at developing and implementing an Investor Communication Policy for the mutual benefit of Oil India Limited (OIL) and the investor community at large. Our principal objectives of the IRP are as follows:(a) to communicate timely, accurately, consistently, proactively, effectively and transparently our values,
performance, long-term strategic vision, risks, current and future business plans and growth prospects, market trends and where we stand in relation thereto;
(b) to differentiate our achievements vis-a vis competition in relation to benchmarks, compliance and corporate governance;
(c) to communicate our uniqueness and competitive edge in the search for excellence;(d) to create and maximize long-term shareholder value and create visibility for the Company;(e) to broaden the base of long-term investors;(f) to build long term relationships with Investors and Analysts;(g) to build the company's corporate brand so that it is recognized as the leader in its industry.Accordingly, we offer a wide range of investor relations capabilities with an integrated and comprehensive approach which captures our vision, policy, regulations, strategy, business plans and insights from important decision makers and investors and conveys our story in a transparent and timely manner. It is our transparency that creates credibility for the future-value addition to our image and prospects. We are committed to help our investors through effective communication of our economic propositions, in order not only to establish, enhance and protect our credibility but also to facilitate them to shape their perceptions accurately about our performance, corporate reputation, goals and strategies. By taking this approach that effectively combines analysis and research with strong experience, our IRP enables the investors compare measurable results. Our IRP team brings a diversity of experience in the value chain of the oil industry covering all the aspects of the E&P business, corporate finance, public policy, government affairs, corporate communications etc. that help our stake-holders to understand our uniqueness and take value-added decisions. More than anything else, we intend to use the IRP as a bridge of friendship and trust between OIL and our stakeholders in line with our corporate values and organizational culture. The OIL Board endorses the belief of the right to inform by disseminating all relevant information to the investor fraternity and keeping an open channel of communication.
FOR
EWO
RD
(N. M. Borah)Chairman and Managing Director
"A good investor relations function is absolutely necessary to communicate effectively with investors and to influence their perception on the Company."
OIL gives utmost importance to Investor Relations.
OIL offers a wide range of investor relations capabilities. As a full service agency, OIL’s IR's approach is comprehensive; we capture insight from important investment decision makers and influencers in order to convey our investors' story and messages. It is the Company’s strategy, if properly understood, that creates credibility for the future-value proposition. OIL's IR helps its investors communicate their economic proposition, while establishing, enhancing and protecting management's credibility. We help our investors shape perceptions so they accurately reflect a Company's performance, corporate reputation, goals and strategies.
In OIL's endeavour to give utmost satisfaction to its investors, has set up an “Investor Relations Cell” to cater to their needs. This will further strengthen our relationship with our valuable investors by making it transparent and consistent.
Investors are served through Secretarial Department and through our Registrar & Transfer Agent, M/s Karvy Computershare Pvt. Ltd. with the commitment from the Senior Management Team.
OIL’s Investor Relations – A perspective
(T. K. Ananth Kumar)Director Finance
TDo’s
eam OilIndia is a large family of diverse stakeholders and it upholds, with pride, the family values and traditions of always maintaining the highest standards in performance in a transparent and accountable manner. Our aim is to build long-term relationships with our stakeholders, which stand the test of time and
auger their support through thick or thin.
In propagation of these benchmarks it is imperative to prescribe certain practices in dealing with investors, which even though already followed , just need a refreshing as follows:-
(a) Be prepared always by being abreast of whatever is happening or likely to happen not only in-house, but also in the industry or in the value chain;
(b) Interact with all segments of the business proactively for gathering data;
(c) Be honest, consistent, precise, clear and transparent in your communications;
(d) Apart from communication on the historical performance, endeavour to communicate the following also:-
�Insights on our vision, strategic initiatives for growth, expansion, and diversification;
�Our long-term value drivers and ability to generate sustained earnings.
�Strategic risks and steps taken to mitigate them;
�Market trends and competition and our positioning in relation thereto;
�Our uniqueness in creativity, in benchmarking for achieving excellence;
�Our superiority in operations; and
�Our credibility in the industry.
A Few Words of Caution
LIQUIDITY
INVESTORS
RESEARCH
COMMUNICATION
(e) If you don’t know an answer to a question, say so and seek permission to revert;
(f) Be humble, polite and courteous always;
(g) Be prompt in addressing a query or a request for data. If it is not readily available give a time frame and adhere to the schedule;
(h) Be diplomatic notwithstanding that an abstruse remark or query is raised;
(i) Be educative and laconic in your discourses;
(j) Be respectful of any contrary views;
(k) Share views and learn;
(l) Be friendly and aim to develop relationships; and
(m) Aim to build brand equity.
(n) Don’t display an air of superiority;
(o) Don’t attempt to wiggle out of a tricky question by a vague reply;
(p) Don’t ever make a statement which is likely to jeopardize the corporate image;
(q) Don’t criticize competitors or down-size them;
(r) Don’t criticize Government policy, regulations or working;
(s) Don’t be speculative or make speculative statements; and
(t) Don’t breach the Do’s ever.
Don'ts
Nestled in the North Eastern corner of India, Oil India Limited (OIL) traces and symbolises the development
and growth of the Indian Petroleum Industry. With a legacy that goes back to the discovery of crude oil in
the far east of India at Digboi, Assam in 1889, to its present status as a fully integrated upstream petroleum
company, OIL has come far, crossing many milestones.
On February 18, 1959, Oil India Private Limited was incorporated to expand and develop the newly discovered oil
fields of Naharkatiya and Moran in the Indian North East. In 1961, it became a joint venture company between the
Indian Government and Burmah Oil Company Limited, UK.
In 1981, OIL became a wholly-owned Government of India enterprise. Today, OIL is a premier Navratna Indian
National Oil Company engaged in the business of exploration, development and production of crude oil and natural
gas, transportation of crude oil, gas, petroleum products and production of LPG. OIL also provides various E&P
related services and holds 26% equity in Numaligarh Refinery Limited (NRL) and 10% equity stake in Brahmaputra
Crackers and Polymers Limited (BCPL) and 23% equity stake in Duliajan Numaligarh Pipeline Limted (DNPL).
The Authorized share capital of the Company is ` 2000 crores. The Issued, Subscribed and Paid share capital of the
company is ̀ 601.14 crores. At present, the Government of India, the Promoter of the Company is holding 78.43% of
the total Issued & Paid-up Capital of the Company. The balance 21.57% of the Equity capital is held by others.
A Saga of Overcoming Challenges
HERITAGE
I. INVESTOR RELATIONS FUNCTION
1. Financial Performance
2. Corporate Strategy
Importance of investor relations function
DPE IR Guidelines
Investor relations function is a strategic management function. The function is of utmost importance to:
• Clearly communicate the company’s values, business plan, strategy, risks, growth prospects, etc.
• Differentiate the company’s performance vis-à-vis competition.
• Differentiate the company as leaders in compliance, disclosures, transparency and corporate governance.
• Communicate to the investing community, what makes the company unique for the investor to invest their money. Investor relations serve as the bridge between the management and the investors. Investors and regulatory requirements today demand much greater transparency. Timely and accurate information is of utmost essence. Investors typically wish to access the following information:
• Top-and bottom-line growth (on a consolidated and standalone basis).
• Segmental information.
• Historical performance to assess future growth potential.
• Management’s vision and insight on strategic initiatives on growth, expansion, diversification and positioning the company.
• Long-term orientation on shareholder value.
• Consistency.
• Creativity and differentiation.
• Alignment with market trends.
Building the Bridge
3. The company dynamics
4. Management Quality
5. Corporate Governance
6. Investor Relations
7. Operational Excellence
• How does the company make money?
• What is the logic behind the business model?
• What is the competitive edge?
• What are the long-term value drivers.
• What steps and strategies have been adopted or contemplated by the company to assess and mitigate risks?
• How well does management execute strategic plans?
• Management's credibility and experience in the relevant sector.
• Management’s ability to generate sustained earnings.
• Transparency regarding insider trading.
• Performance-based remuneration.
• Shareholder structure.
• Regulatory compliance, Composition of the board and its committees.
• Regular Reporting and disclosure in accordance with applicable laws.
• Transparency of financial information and disclosures.
• Availability and openness towards investors community.
• Equal importance to communicate good news as well as bad news.
• Quantification of strategic objectives and goals.
• Superiority in operations.
• Seamless execution of business processes.
• Customer satisfaction.
• Market positioning.
• Industrial reputation.
A good investor relations function is absolutely necessary to communicate effectively with investors and to
influence their perception of the company. Overall, the job of the IR function is to communicate clearly to investors
the strategies behind their growth model and position the company as the 'must own’ investment for the investors.
OIL’s PRACTICE
II. INVESTOR RELATIONS CELL
Oil India Limited (OIL) gives utmost importance to Investor Relations. Implementing an investor relations program means acknowledging that investors can operate on vastly different levels of understanding and have varied reasons for investing in the Company.
An investor relations program aims to provide current and prospective investors with information necessary to make well-reasoned investment decisions about its debt and equity securities.
We at OIL, understand that in order to maintain good investor relations it is paramount to communicate timely, effectively, concisely, consistently with investors and to influence their perceptions about the Company.
DPE IR Guidelines
The Department of Public Enterprises recommends that every CPSE constitute a suitable Investor Relation Cell within the organization. The Department expects that the Investor Relations Cell act as an intermediary between the Company, its investors and the larger financial community. The primary goal of the Investor Relations Cell should be to create an awareness of the company’s strengths in the market through positive branding and timely communication.
The cornerstone of the Company's Investor Relations Cell should be to ensure dissemination of information to all current and prospective shareholders. Some of the best practices in proactive investor communication:
• Strive for accuracy and consistency in all communications. Information disseminated should be clear and concise.
• Information is disclosed to the investors promptly and in a timely manner. Provide all investors equal access to the information.
• Engage with investors frequently and on a continual basis at all times, be it calm or turbulent periods.
• Value the importance of dialogue with current and prospective investors.
In the course of its investor relations activities, the Companies are expected to comply with all applicable securities laws, rules and regulations. However, the Department recommends that, in addition to complying with the mandatory disclosures, the Company must adopt a proactive approach of voluntary supplemental disclosure covering broad areas of corporate strategy, business analysis, detailed competitive and financial data (projections or forward looking statements, growth analysis to be given with appropriate disclaimer), and other matters/metrics considered to have a potential impact on investment decisions by interested parties.
Investors are Special to Us
Structure of the Investor Relations Cell
OIL’s PRACTICE
The Department recommends that the Investor Relations Cell (IRC) be headed by a senior person who should be
designated as Head-Investor Relations. It is desirable that such a person has an overall view of the company operations
and preferably with financial background. The Head-Investor Relations may have a small team to support IR activities.
Since, the investor relations function combines various aspects of the organization, it is recommended that the investor
relations officer report directly to the Chief Financial Officer (CFO) or to the Director (Finance). It is imperative that
the investor relations officers have access to all requisite information and have direct access to all senior executives of
the company. CPSEs may devise appropriate formal / informal mechanism of making the required information
available to IRC officials, while ensuring that secrecy/confidentiality is not compromised.
• We serve our investors through our Secretarial Department, Corporate Office for Dividend, Grievances etc. and
through our Registrar & Transfer Agent, M/s. Karvy Computershare Pvt. Ltd. who are equipped with adequate
computer hardware & software and connectivity with the depositories, which facilitates better and faster
services to the investors.
• Other facilities such as remittance of dividend through Electronic Clearing Services (ECS), Bank mandate,
incorporation of Bank details on dividend warrants, direct deposit of dividends, reminders for unclaimed
dividends, nomination facility, issue of Public Notice for lost share certificate, issue of duplicate share
certificate etc. are also extended on timely basis.
• Our duly appointed Shareholders’/Investors’ Grievances Committee specifically looks into redressing of
shareholders’ and investors’ complaints/grievances pertaining to transfer/transmission of shares, non-receipt
of annual reports, dividend payments, issue of duplicate certificates and other miscellaneous complaints. The
Committee also oversees and reviews performance of the Registrar and Share Transfer Agents and
recommends measures for overall improvement in the quality of investor services.
• Company Secretary, Head of Secretarial Department reports to Director (F) on the IR functions and also acts as
Secretary to the Shareholders'/Investors' Grievances Committee.
Commitment Demonstrates Character
Staying Plugged-in
III. COMMITMENT FROM SENIOR MANAGEMENT TEAM
OIL’s PRACTICE
IV. INTERFACE WITH INVESTORS/ANALYSTS
DPE IR GuidelinesThe Department expects the senior management of each of the CPSE to devote adequate time for investor relations function. The investment community expects direct access to the senior management. Senior management should spend time, be present and be involved mainly at meetings with large institutional investors, presentations at investor conferences, and quarterly results conference calls. Quality time from senior management is one of the most important aspects of an investor’s analysis and is best evaluated during one-to-one meetings. Hence, senior management should set aside adequate time to meet with investors.Further, the Department expects the senior management to attend and participate in at least two investor conferences in India and one investor conference abroad based on need. The Department also expects the senior management to regularly meet with various institutional investors on one-on-one meetings or structured non-deal road shows.
It is our sincere and continuous commitment that quality time from senior management is recognized and extended for augmenting Investor Relations through interaction in one-to-one meetings or in Investors Conferences with Fund Managers and Investor Analysts. This activity is headed by Director (Finance).Further, annually we envisage conducting at least two investor conferences in India and one investor conference abroad to meet all the investors and analysts together.
DPE IR GuidelinesThe Department recommends that each Investor Relations Cell perform the following activities:1. Respond to requests from investors and analysts for information and data. Ensure that communications are
honest, accurate and consistent. Further, the Investor Relations Cell should endeavour to respond to investor queries within two working days from the time the query is received.
2. Set up periodic investor meetings with the senior management and brief the senior management appropriately. Further, organize site visits and campus tours for analysts / investors.
3. Organize an analyst meet at least once in a year and get the senior management to speak to analysts and prospective
investors on the company, its strategy, operations, and other important aspects. Make sure that the senior
management utilizes the analyst meet forum to set expectations right. Ensure senior management is briefed
appropriately. It would be useful for the Government Nominee Director(s) to participate in this annual meet.
4. Arrange earnings release conference calls. Develop and implement investor materials and events including
presentations, releases, fact sheets, investor events, conferences, and web events. Impress upon the senior
management that frequent dialogue with investors enhances credibility and helps build trust.
5. Develop and implement competitive information which pertains to publicly reported financials, the press,
ratings, and public comments. In doing so, provide senior management and investors with data related to peer
group comparisons, the company position vis-à-vis its peers and the competition. Comparisons with peers must
be confined to the extent of information available in the public domain
6. Track shareholder ownership and investor relation contacts with major and important shareholders. Also, track
the share price performance of peers, indices, trading patterns (selling, buying), ownership mix (institutions,
retail, insiders), and apprise the management at least once a month.
7. Track and analyze analysts' reports and comments, research reports, models, estimates and projections. Also,
track and share information related to competitive information with senior management.
8. Clearly communicate the corporate communication policy related to corporate calendar events, insider trading
policy and silent periods with investors, analysts and external stakeholders.
9. Prepare and submit an annual report on the activities of the investor relations cell to the senior management.
10. Develop an appropriate feedback system that moderates and directs the information flow and communication
between the management and investors.
11. Enable analysts to initiate coverage of scrip. Help analysts on the buy side and fund managers on the sell side to
understand the business model of the company and also validate their assumptions on need basis.
12. Create a data repository and build a suitable mechanism for flow of information from operational departments
for preparation of briefs etc., to maintain consistency and factual accuracy of the information disseminated to
analysts/investors.
13. Make sure that all the price-sensitive information is vetted and pre-approved by the senior management before
the same is communicated to the public. IRO should be associated with preparation of the annual press brief that
publishes the Company’s statement on earnings, its position, growth plans, strategy and future business
potential, etc.
14. Ensure that all appropriate press releases and briefings are uploaded on the Company’s website promptly
immediately after the information is disseminated to the stock exchanges.
OIL’s PRACTICE• We interact proactively and timely with our stakeholders to
keep them updated in relation to our vision, strategic initiatives, current and long-term business plans and our physical and financial performance in relation thereto.
• We endeavour to respond promptly to requests for information and data from investors and analysts and ensure that the communications are honest, accurate and consistent.
• We attend Investors Conferences periodically based upon requests received to communicate latest updates and interact on our working, performance and plans.
• We arrange conference calls, meetings with senior management and decision-makers, organize site visits and
tours of our operations periodically. • The official news releases, detailed presentations made to media,
institutional investors, financial analysts etc are displayed on the company’s website. Press meetings are also held after the Board
approves periodic Financial Results.• We have created a data repository and built a suitable mechanism for flow of
timely and accurate information from operational departments for preparation of briefs etc., to maintain consistency and factual accuracy of the information disseminated to analysts/investors.
• We ensure that all the price-sensitive information is vetted and pre-approved by the senior management before the same is communicated to the public.
• We ensure that all appropriate press releases and briefings are uploaded on the Company’s website timely and promptly immediately after the information is disseminated to the stock exchanges.
V. COMMUNICATION WITH FINANCIAL ANALYSTS AND INVESTORS
The Department recommends that the Company designate the Chairman & Managing Director, Director (Finance) and the Investor Relations Officer as the official spokespersons to interact with financial analysts and
Communication works for those who work at it
DPE IR Guidelines
investors. In specific circumstances, other spokespersons (e.g. board members), who have been given explicit authority to communicate with analysts and investors, may do so in the presence of designated spokespersons.
• We have designated the Chairman & Managing Director, Director (Finance) and the Investor Relations Officer as our Brand Ambassadors and official spokespersons to interact with financial analysts and investors.
• In specific circumstances, other spokespersons (e.g. other Board members or members of the Senior Management team), who have been given explicit authority to communicate with analysts and investors, do so in the presence of designated spokespersons.
DPE IR GuidelinesThe Department recommends that all CPSEs publish their quarterly financial information as early as possible. Timely dissemination of data is as important as the accuracy of the data.The financial information should be disseminated widely through a press release to all the media including electronic and print media. This should be followed up with an earnings call with research analysts and fund managers. The senior management personnel of the CPSEs should attend the call to answer questions raised by investors/analysts.We regularly intimate un-audited as well as audited financial results to the Stock Exchanges, immediately after these are taken on record/approved. These financial results are normally published in the leading English and vernacular dailies having wide circulation across the country. The results are also displayed on the web site of the Company 'www.oil-india.com'.
OIL’s PRACTICE
VI. FINANCIAL INFORMATION TIMELINE AND DISSEMINATION OF DATA
Time is of Essence
Silence is Golden
Online for you 24x7
VII. SILENT PERIODS DPE IR GUIDELINES
OIL’s PRACTICE
VIII. MAINTAINING THE INVESTORS RELATIONS PAGE ON THE CORPORATE WEBSITE
1. Company Information
2. Financial results and earnings release
Silent periods are the periods prior to the publication of financial results during which no meetings and presentations with investors and financial analysts are held in-principle. In addition, during silent periods no other communication with analysts and investors should take place, unless such communication would relate to factual clarifications of previously disclosed information. The Department desires that the Company concerned decide on the length of the silent period. In general, it is advisable to commence the silent period 15 days prior to the date of the board meeting convened to consider the financial results and end the period at least 24 hours after the financial results are made public and filed with the stock exchanges as required under the listing agreements and applicable law.
• We at OIL do follow the above guidelines with utmost caution and silent periods are maintained strictly as per the guidelines.
• Trading Window is also closed from the date of intimation to the Stock Exchanges regarding the date of meeting of the Board /Committee and opens after elapse of 24 hours post the “Price Sensitive Information”, for which the trading window is closed, is made public.
DPE IR GuidelinesCorporate website has now become an important medium for external communication. The department recommends designing special “investor relations” sections in Company sites for continuous and enhanced communication with their investors.
Indicative contents of IR page
This section may provide the Company overview, Strategy and Operations and Segmental information.
This section may provide the latest announcements and presentations on the Company’s financial results, earnings press release and webcast, complete set of financial statements (income statement, balance sheet, cash flow statement and segment information on a consolidated and standalone basis), performance presentation and outlook, key performance indicators, and segmental results.
OIL WEBSITE
COMPANY BUSINESS INVESTORS NEWSROOM INITIATIVES CAREERS CONTACT USTENDERS
VISION
CORPORATE SPREAD
JVs/PSCs/ALLIANCES
BOARD OF DIRECTORS
HERITAGE
ACHIEVEMENTS
PROFILE
50 YEARS OF OIL
DRILLING AND WORK OVER
PIPELINES
PRODUCTION SERVICES
PERFORMANCE
EXPLORATION
FINANCIAL RESULTS
ANNUAL REPORTS
CHAIRMAN’S ADDRESS
INVESTOR SERVICES
HIGHLIGHTS
OIL IN MEDIA
PUBLICATIONS
PHOTOS
VIDEOS
PRESS RELEASE
INFORMATION TECHNOLOGY
RESEARCH & DEVELOPMENT
CORPORATE SOCIAL
RESPONSIBILITY
CAREER @ OIL
INSTITUTES
CURRENT OPENINGS
OIL PEOPLE
GLOBAL TENDERS
LIMITED TENDERS
E TENDERS
NATIONAL TENDERS
EXPRESSION OF INTEREST
MAJOR CONTRACTS &
POs
FEEDBACK
VIGILANCE
DULIAJAN
OIL OFFICES
3. Shareholder Information
4. Investors’ News
5. Financial calendar
6. Investor Contact
This section may provide the information on the Company’s Board of Directors & Management, Board
Committees, Corporate Governance Practices, Annual & Quarterly Reports, Sustainability Reports, Code of Conduct for Board and Senior Management, Shareholders Meetings, Details of Corporate Actions (Stock and Cash Dividends/Bonus, Stock Splits, Record Dates etc), Share Price Information (both current and historical), FAQs, Global footprint etc.
This section may provide for the latest Investor Relations press releases, announcements and news updates on the company’s financial performance and operations. It should also provide a facility for investors to sign up for automated news alerts. The section should also provide archives of the press releases issued by the Company, so as to enable investors to download the release as and when required.
This section may provide the information on all the important dates of the corporate events and actions (past, current and upcoming) such as board meeting dates, silent period, etc.
This section may provide the contact information of key managerial personnel and of the Head-Investor Relations.
OIL’s PRACTICE
IX CONCLUSION
• Our website 'www.oil-india.com' contains a separate dedicated section ‘Investors’ where the shareholders information is available. The Annual Report, Shareholding Pattern, Financial Results etc. are also available on the web-site in a user-friendly manner.
• It is our endeavour to update the website on a dynamic basis.
Investor Relations is a specialized activity. Hence, matters relating to secretarial domain like share transfers, investors' grievances dividend queries, etc., are handled by the Company Secretary’s Department as mandated by clause 47 of the Equity Listing Agreement.
Head-Investor relations is assisted by a team of professionals who are continuously alert to the internal and external environment, our policies and practices, Government policies and regulations, market trends, fiscal and other policies and regulations and benchmarks for superior performance.
We endeavour to build long-term relationships and deliver value to all our stakeholders/investors.
Setting Investor’s Perception Right
50 Years of Building Investors' Trust
Registered Office:Oil India Limited,P.O. Duliajan,District Dibrugarh,Assam 786 602
Corporate Office:Oil India Limited,“Oil House”, Plot No.-19,Sector - 16 A,Noida - 201 301,Uttar Pradesh
Registrar & Share Transfer Agent:Karvy Computershare Private LimitedUnit : Oil India Limited Plot No. 17-24, Vittal Rao Nagar,Madhapur,Hyderabad 500 081