Rosimushchestvo has prepared changes in timing of dividend payments to state companies and state banks

Rosimushchestvo (Federal Agency for State Property Management) has prepared and submitted for consideration a number of amendments to the decree of the Government of 2006, which regulates the timing of dividend payments to state companies and state banks. New amendments may come into force already in 2015, i.e. by dividend payments for the year 2014.

Rosimushchestvo offers to oblige state companies and state banks to allocate for dividends minimum 25% of consolidated net profit, in the event they report in accordance with International Financial Reporting Standards (IFRS), otherwise it must be paid in accordance with Russian Accounting Standards (RAS).

As of today the Federal Tariffs Service (FTS) de facto takes into account the norm of profit by the tariff making for monopolies, but de jure it is mentioned nowhere.

As the base for calculation of dividends of monopolies the government agency offers to take maximum from two indicators: net profit on financial statement or net profit, taken into account by the FTS by adoption of a tariff. According to the representatives of Rosimushchestvo, such approach will motivate the management of monopolies to more efficient operations, because as of today the management of organizations re-examines the budget several times and total profit value appears to be much less, than the planned one.

However, the FTS hasn’t approved this proposal, believed that it could lead to the rise in tariffs for consumers. The position of the representatives of the FTS comes down to the fact that the question of dividends must be solved not on account of tariffs, but on account of cost saving. Besides that, the representatives of the FTS note potential adverse effects for monopolies, because the profit, taken into account by the FTS, is a forecast and by force of objective reasons it can differ essentially from actual values and not always in favor of monopolies.