The Agency became interested in the undistributed trillions of state-owned companies

The government ordered state-owned companies to conduct monitoring decisions regarding the allocation of net profit at the end of 2013-2014, reports “Interfax” with reference to a letter the Agency sent to joint stock companies from specificna — about 50 companies, in which the position of the state as a shareholder forms the government.

If the net profit for the period remained undistributed, the Agency requires submission of “satisfactory justification of such decision”. And after that — “to ensure elimination of the causes that led to the rejection of the decision on distribution of net profit of JSC Specimena, and consideration of the distribution of retained earnings net profit for 2013-2014” at the annual meeting of shareholders in 2016.

In March, expert and consulting Council of Rosimushchestvo discussed the issue of retained earnings as a potential source of dividend payments. According to the report, presented to the Board, the total retained earnings for the years 2011-2014 in the sample of 36 state-owned companies amounted to 7.1 trillion. This is more than 20 times the total amount announced for 2014 dividends. The members of the Advisory Council then recommended that the Federal property management Agency in the month of April-may 2016 to develop proposals for the use of undistributed profit of previous years taking into account the “optimal balance” between the investment objectives of the company and payment of dividends to the state Treasury.

The head of Rosimushchestvo Olga Dergunova (retired this month) at the March meeting, stressed that undistributed profits of previous years is “dead” money that is reinvested. Therefore, it is more important to evaluate the effectiveness of these reinvestment and does not require to give this money to the budget, considered Dergunova, followed from the press release of the Agency.

In 2016, the government plans to collect more dividends from state-owned companies by increasing the ratio of profit distribution with regard to profit in 2015. Prime Minister Dmitry Medvedev on Tuesday signed an Executive order which requires state-owned companies to pay dividends following the results of last year, at least 50% of profit (in accordance with RAS or IFRS — what’s more) and not 25% as in previous years. According to Medvedev, this budget revenue is planned to increase by almost 100 billion rubles.