Held in partnership with Creating Connections This document has been prepared for general guidance on matters of interest only, and does not constitute

Held in partnership withHeld in partnership with

Creating Connections

This document has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this document without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this document, and, to the extent permitted by law, PwC, IIRC or their licensors do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this document or for any decision based on it.

Copyright 2014. All rights reserved. Permission is granted to make copies of these slides, provided that all logos, disclaimers, copyright notices and acknowledgements on the slides are retained, and each copy bears the following credit line: "Copyright 2014. All rights reserved. Used with permission of the IIRC and PwC.“ In this document, PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. IIRC refers to the International Integrated Reporting Council.

Acknowledgements of third party source materials are contained on the relevant slides.


Creating ConnectionsCreating

Connections

Creat ing a connected output

Ronel Buys – Accounting Consulting Services Associate Director, PwC

Sallie Pilot – Director of Research and Strategy, Black Sun

Linda Buchler – Managing Director, Ince Agency



Creating a connected output


Creating ConnectionsCreating

Connections

Investor Perspect ives

Held in partnership with




Poll question

Which source of information do you think analysts rely on most? (pick one)

a) Investor presentations

b) Annual Report/10-K/20-F

c) Dialogue with management

d) Company website

Click here

http://gameday.doubledutch.me/?sessionToken=6ee01e9f-a22c-4407-ae02-3fb2f490d00f&mod=polls&pollId=8809



Investor perspective

Which information sources do investors use most?

Source: PwC’s global survey on investors’ views on integrated reporting




Which data sources do investors use most? (top 3)

Financial information

Information about a company’s strategy, and resource allocation

Info on risks and opportunities

Governance information

Environmental social and human capital info

1st Annual Report Investor presentations

Dialogue with Management

Annual Report Annual Report

2nd Preliminary Results Announcement


Annual Report Proxy Statements

Sustainability report

3rd Investor presentation

Annual Report Investor presentations


Website





12%

15%

27%

24%

22%

Do investors agree that they spend more time on a report if they know more effort went into preparing

it?

Strongly agree

Agree

neither agree nor disagree

Disagree

Strongly disagree





1%

13%

14%

27%

45%

Having all the elements in one document is important to investors when performing their

analysis.

Strongly agree

Agree

Neither agree nor disagree

Disagree

Strongly disagree





0

30

60

90

55 48 39 36

ImportanceEffectiveness

88

74

How important is each piece of information investors receive and how effective is it?


87

63




64%

36%

How do investors prefer a company to describe its business model?

Diagram






The power of

language and design





Background





Tullow Oil’s challenges and objectives

Challenges

Experienced huge growth in the past decade resulting in increased need to communicate with shareholders and increasingly with wider stakeholders

Need to demonstrate ‘licence to operate’ and the value created

Objectives

Create a better, more cohesive and concise Report with stronger links between information

Use the Report as a tool to tell the company’s story

Use reporting to compete effectively with peers

Reach out to investors and wider stakeholders

Drive integrated thinking within the company, using the reporting process to drive change

To find a better way to ‘tell our story’, while remaining in the regulatory framework





Poll question



Poll question

What does your company’s business model mostly represent?

a) Value creation

b) Evolution of capitals

c) Business activities

d) Other

Click here




Poll question

Biggest challenge telling the company’s value story:

a) Hard to articulate

b) Conciseness is a challenge

c) Consistency across channels

d) Internal buy-in

Click here






What could the journey look like?



What could the journey look like

Source: Black Sun PLC

































The journey so far…

Group

activity




2007

2008

No business model

First articulation of the business model

Source: Tullow Oil plc




2009

2010

Development of the business model

First articulation of how value is created

Evolution of the business model

Evolution of the value creation story





2011

2012

Expansion of the business model to a ‘special feature’

Integration of value creation discussion

Inclusion of business model ‘special feature’

Outline of the oil lifecycle




The journey so far – restructuring the 2013 Annual Report

Used the business model as a basis to restructure 2013 Report

Reporting around the seven strategic priorities to ensure continually linkage to the core business

Aimed to create a more logical and cohesive flow to the information

Use of the ‘wheel’ device through the report for signalling/labelling and link back to business model

Roll out of business model across other communication channels, including a video




The journey so far – outcomes of 2013 Report

Internal engagement – Support throughout the business with increased engagement from the Exec and the Board

Creating concise summaries – much easier than expected – No strict materiality process in place this year, but key investor feedback helped to shape each section

More readable and interesting document – Clear set-up pages and digestible summaries that could be used as a standalone document

More concise report – Slimming of content and strict word counts

Supporting video – Use of video to explain and promote Report

Integrated online approach – Integrated the Report into ‘Investors’ section, reducing time and spend, with better results and viewing figures





Poll question



Poll question

Most significant benefit of formulating the business model for your company?

a) Telling the company’s story

b) Competitive advantage

c) Stakeholder communication

d) Drive integrated thinking

Click here






Top Tips



Top tips for your communications

1Think integrated

Develop an integrated approach to all communications across all media

Be consistent and relevant about information at year end and throughout the year

2Set out key messages

Reflect a Director’s view of the business

Focus on matters relevant to ‘stakeholders’

Have a forward-looking orientation

3Stay focused

Be both comprehensible and understandable

Be balanced and neutral

Be comparable over time

4Build up your story over time

Build, report and reinforce key themes and messages

Set timings for statements and announcements and communicate to investors and other stakeholders

5Reflect your culture and values

Reinforce what makes your organization different

Tell your organization’s story



Video - http://www.tullowoil.com/index.asp?pageid=599&banner=active&video=401





Round up





Opportunity not obligation…





Effective stakeholder engagement through various

digital mediums





Consistency

a single input andmultiple outputs

measure effective

communications

of information across all media channels

Documentation with Using analytics to

Source: Ince



Integrated annual report

and supporting documentation

Print

Consistency of

information

Financial and retail shareholders Regulators Customers Staff Business

partnersFinancial advisers

Feedback

Input

OnlineXBRLRegulatory News

servicesMobile

Source: Ince





Case Studyone



Case study 1: Background – Multiple output

The compilation, editing and checking of an integrated report is complicated

The printed report is supported by other reports in various digital and other formats

Proofing and tracking of documentation in multiple outputs carry risks requiring long hours

Consistency of information across all outputs is required

simplified?

How could this process

be

Source: Ince





Case Study

twoGrowthPoint



Case study 2: Background – Stakeholder

engagementCurrent integrated annual reportcommunication from the listed entityto the stakeholder is a one-way channel

Communications between anorganization and its stakeholders is only effectiveif feedback is received

Substantial measurement foreffective investor relationsstrategy is required

measure

How did we

this forGrowthPoint?

Source: Ince






Group

activity



Case study 1: Group discussion

• What does your current process involve? (integrated report first, then ads, then HTML, etc.)

• How many outputs (integrated report, html, tablet, etc.) are supported by your master files (Word and XLS)?

• How do you ensure consistency of information, facts and figures across all outputs without running them a separate projects?

Source: Ince



Case study 2: Group discussion

• Do you currently have an effective stakeholder communications programme in place?

• Do you use different media channels for different stakeholder groups?

• How do you measure the impact and effect of corporate communications (to shareholders)?

• What do you do with the feedback – if relevant? (improvement?)

Source: Ince





Solutions and outcomes



Case study 1: Solution

Tag Word and Excel files or link through XML code to design outputs = one

Word and Excel file document as master

document

Single input in native language

Multiple output across various mediums with consistency of informationDesign templates

Master Word and Excel files placed in

secure SharePoint

Working on Word and Excel file by the issuer is still possible

PRINT TABLET WEB PPT XBRL

Source: Ince



Case study 1: Outcome

Changes to master Word and Excel are pulled through and viewed immediately on all output files

No delays in proofing

No checking of multiple output files

No risk that changes will not be incorporated

No duplication

Changes made anywhere and anytime

All versions live at sign off

Saving time and cost on proofing

Source: Ince



Case study 2: Solution

Various digital and media channels available to measure effective communications

Feedback and stats wereprovided to GrowthPointto see how and wherechanges could bemade for more effectivecommunication Adobe analytics

were used

Source: Ince



Case study 2: Outcome

Growthpoint issued their IAR, a personalised email and an sms with the URL of the IAR

Click through to Growthpoint’s web page provided the following results:4 768Emails sent

3 365SMS sent

2 096URL click through21.40 Average duration

on site (minutes)

209Questionsasked to CEO

Time spent watching video: 17.1 min

Analytics allowed for a tailor made solution to be in place in year two

Source: Ince





In Conclusion

Documents

Held in partnership with Creating Connections This document has been prepared for general guidance on matters of interest only, and does not constitute