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Listed Companies' Cash Profit distribution Proposed profit distribution is policy interpretation

Author: LiuJianMin¡¡GuoXianLing From: www.yourpaper.net Posted: 2009-05-25 15:05:57 Read:
Evaluating [Abstract] articles to through the the on the SFC as good value for money, was supported by Chat the ratio of the the provisions of cash dividend to be distributed in positive background analysis, on the the of Securities Regulatory Commission issued in China Listed Companies 'Cash dividend the provisions of carried out interpretation of, put forward the measures of the a perfect our country the laws and regulations that the Listed Companies' Cash Dividend provisions of.
The distribution of [Key words] Dividends is; cash dividends; laws and regulations measures

Was released a by the the Securities and Futures Commission (SFC) in China at to October 9, 2008 "About the to modify the the decided to of the the CONFORMING TO THE SPECIFICATIONS SET FORTH IN Listed Companies' Cash dividends of certain ABOVE SHALL BE", its content mainly includes to in the annual report detailed disclosure the company of the cash dividend policy, to enable investors to the the future development of of the on the company has a clear is expected to, set out in the the articles of association of the company carried out the cash dividend of the long-term system the arrangement, conditions, the proportion of, types and and so on the contents of, and Emphasizing the paramount importance of strict the implementation of the, by medium-term of Listed Companies distribute dividends in cash, financial and accounting reports can not audited by accounting firms, apply for refinancing the standards to improve which the when Listed Companies' Cash dividends of to not less than 30 per cent of of of the the to achieve the average annual distributable profits in the recently three years. These with a mandatory of the laws and regulations measures, both to protect the the the the interests of of the shareholders of the external, at the same time also stipulates that the level of payment of the the the lowest in the the Listing company to apply for refinancing when the dividends. Listed companies cash dividend is to to achieve the the an important form of of Investors return on investment that, the current in the the under the the gradually the the case of of the spread of of the global financial crisis, for the cultivate of the the long-term investment philosophy of the China's capital market, and enhance the the the the attractiveness of and vitality of of the capital market, to improve the the confidence of investors, has a the a very important role.

First, the by distributing the cash dividend new regulations background analyze the

The Listed companies are the the the the cornerstone of of the the development of the securities market. In With the with the growth of the Listing Company, the development of, and gradually to create conditions for, force for promoting shareholder to to obtain the reasonable return on their investment, is both a listed companies to fulfill the an important manifestation of of the to of fiduciary duty for shareholders, the securities market in is also the of the the the inherent requirement of of the stable and healthy development. The our country the "Company Law" clearly stipulates that shareholders of the Company shall, in accordance with law, enjoy the the the rights of the assets income and and so on on, and expressly conferring on the Company any the Board of Directors, the shareholders will, respectively, the exercise of as development and consideration the the terms of reference of of the APPROVAL OF THE profit distribution plan of the Company. Cash Equivalents dividends to as a the the an important way to of the listed companies dividend distribution are classified as cash equivalents, is the the an effective channel for of the investors to achieve a reasonable return on investment. However, due to to the is not sound, the China 's Governance of Listed Companies mechanism, the some of the dividends of listed companies a lack of initiative, the is not strong the binding, and some listed companies to dividends or even with less do not pay dividends, the the awareness of of the returns to the shareholders is weak. Is mainly manifested in the the following aspects.
(A) of the the relevant laws and regulations the lack of the Mandatory binding
A long time, the Chinese Securities Regulatory Commission (CSRC) will perfect the the by system of Listed distribution of dividends by the Company to included in the important areas that of the market development of institutional infrastructure, actively support the, and promote, and guide the the cash dividend of the listed companies. Release of "by the in March 2001 SFC listed companies of new shares issue of Measures for the Administration of" stipulated in, the Listing company to apply for refinancing, the, if his recently to three years no product for dividend payout, and the Board For does not allocate the reasons for did not to make reasonable explained, and served as God, of the Governing the Company of Securities on of the underwriters should be In this regard focus on concerned about the and and shall be Description in the the report of the due diligence survey to. Released in 2006 "Securities by Listed Companies issue of Measures for the Administration of" stipulates that listed companies to issue new shares on shall comply with "the recently three years in order to the way of cash or stock the cumulative profit distribution not less than the to achieve in the recently three years of the the an average annual can be of 20% of the-profit-distributing" . In the the the the Listing annual report of the Company Standards in the the released by the SFC, also made it clear requirements, a listed company cope with the report period, the earnings had but did not put forward the the a company of of the cash Profit Distribution Preplan with detailed explanations to, Description the company's an appropriation of retained purpose and use of plans at the same time.
The the huge
of the the number of (b) the "stingy person" in the the in capital market
After the the efforts and promotion of of the regulatory sector and the market the parties to long-term and unremitting of the, the the the situation of listed cash dividend of the Company is gradually improving. First, the the cash's dividends of listed number of companies is increased year by year, the proportion of rose steadily. In In In 2005-2007, the implementation of the the the listed companies of of the by distributing the cash dividend reached, respectively, 621, 698, 779, accounted for the the proportion of of the the total number of all listed companies were 45%, 48%, 50%,. The second is, the a year by year increase in the the scale of for dividends the Listed Companies' Cash. According to the the Statistics of the Annual Report the situation of the listed companies in 2007, a there are of 779 Listed Companies' Cash dividends, accounting for 50% of the of the total 1 558 listed companies in the; the number of bonus issue of shares home 148, accounting for for 9.5% of the in listed the total number of companies in; the allocation the present total amount of of 2 757 billion yuan, accounted for in 2007 a net profit of 9 483 billion for 29% of. In In the nearly three years, the the the the total amount of of the the cash dividend of listed Company year by year innovation high, since the 2005-2007, respectively and accounting for 729 billion yuan, 1 163 billion yuan, 2 75.7 billion yuan. Third, is related to the compared to the the international mature markets, although the the listed on the our country of the distribution of dividends by the Company ratio of is surviving a certain gap between the, but participate in the the dividends of listed company the coverage of has been greatly to expand. From the way of dividend the Listing Company of the accounted for for net profit of perspective of the proportion, the a listed companies in United Kingdom, Japan and Hong Kong of approximately come up with 40-50 percent the profits of to used for dividend distribution. The the Listing Company of the our country Payment of cash dividends's share of its net results was a profit the proportion of in recent years in the the about 30%. From the the is accounted for in a participating Company the the proportion of of the by the total number of of Listed Companies of view, United Kingdom, Japan, Germany, France pay the cash dividends Company accounted for by more than half, the The our country of the proportion of of the Company in paying cash dividend also already accounted for for for about 50% of the of of the of all the listed companies. China's A-share market so many "stingy person" the perennial or even ten Over the past few years very stingy, which also caused the the attention of the management of the approach.
(Third) the refinancing become the listed companies formulate the the standard
of the Dividend Policy
In In In recent years, the China Securities Regulatory Commission noted that the listed companies take advantage of the dividend distribution policy to carried out the the activities of the "means for misappropriating", require listed companies to To obtain the the placement of shares eligible, Return on net assets rate must be for three consecutive years an average of more than 6%. However, this provision King-shing, the Some of the be developed in a the amount of the the net assets of is companies with higher the the standard of the dividend distribution policy. In order to achieve additional deliver, the placement of shares the purpose of, these companies taken a As cash dividends dissemination in order to reduce the amount of net assets, so that the the Return on net assets rate can for three consecutive years achieve the 6% of the countermeasures. At this point, the the distribution of cash dividend. Is not a is to give the investors return on, in fact, is the formulated by by the Company for the realization of the issuance, allotment while the Dividend Policy standard. The the end of the year of 2000, the In order to standardize the the the placement of shares behavior of the listed companies, the the SFC asked the the a necessary condition for of put Cash Equivalents dividends as a listed company are classified as cash equivalents re-of financing for. The face of new policies and regulations, in order to to the to achieve the purpose of re-of financing for, many companies changed the the has always been the practice of of the past, to start the dividends, the dividend is is now. This indicates that the that the due to the a listed company to take that there are is a policy, under the level are off set by counter-measures devised at a means of on the, and even if the increase the the intensity of supervision, and no one is able to the fundamentally change the the the practice of of listed companies do not pay attention to the interests of the investment people; the mandatory a direct means of does not fundamentally to change the the the dividend policy of of the listed companies, the contrary, be interested in rational use of the Dividend Policy have a negative impact on.
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