The Russian Federation’s Ministry of Finance (MinFin) announced that state-owned companies have been encouraged to switch from calculating dividends using Russian Accounting Standards (RAS) to using the International Financial Reporting Standards (IFRS). Furthermore, MinFin plans to set a 35 percent pay-out ratio for such companies.
Starting November 2012, state-owned companies should pay at least 25 percent of their net income in dividends calculated on the basis of RAS (previously there was no mandatory standard). Currently MinFin proposes to keep a 25 percent pay-out ratio only for companies in the defence industry.
The largest Russian state-owned companies (such as Gazprom, Rosneft, VTB, Aeroflot, Transneft, etc.) already report using IFRS, since it is one of the listing requirements or loan conditions for global transactions.
Impact on investors:Raising dividends should further strengthen Moscow as a financial centre and increase its investment attractiveness.