At the meeting held on 15 February 2018 the Board of Directors of PJSC SAFMAR Financial investments (SFI) adopted the dividend policy, which determined basic principles for year-end payments to shareholders.
Dividends to the SFI shareholders shall be paid upon the receipt of dividend payments from subsidiary (affiliated) companies. The target dividend payment level amounts to at least 75% of:
The choice of the basis for the target dividend payment level is made in favour of the lesser.
According to the Russian legislation, dividends are paid from the net profit of the company for the reporting year or retained earnings from prior years following accounting (financial) statements in accordance with the Russian Accounting Standards (RAS).
PJSC SAFMAR Financial investments (SFI) is a financial holding company with dividends from subsidiary and affiliated companies as the main source of income.
According to the Russian Accounting Standards, dividends are recognised as income at the date of receipt, which generates profit and allows to pay dividends to the SFI shareholders. The positive SFI investment revaluation may also generate profit, but there is no cash flow correlating with this profit to pay dividends to shareholders. In order to eliminate this potential discrepancy when estimating the target dividend payment level, the Board of Directors of SFI resolved to make a choice in favour of the lesser between the net profit under the Russian Accounting Standards and the free cash flow.
In turn, SFI recommends its subsidiary companies to pay dividends for the reporting year amounting to at least 50% of the net profit in accordance with IFRS.