Financial Statements

Annual report 2011

# Financial Statements

# Report of the independent auditor on the summary consolidated financial statements

To the Shareholders and Board of Directors of Bank Vozrozhdenie:

The accompanying summary consolidated financial statements, which comprise the summary consolidated statement of financial position as at 31 December 2011 and the summary consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended are derived from the audited consolidated financial statements of Bank Vozrozhdenie and its subsidiary (the “Group”) for the year ended 31 December 2011. We expressed an unmodified audit opinion on those consolidated financial statements in our report dated 26 March 2012.

The summary consolidated financial statements do not contain all the disclosures required by International Financial Reporting Standards (“IFRS”). Reading the summary financial statements, therefore, is not a substitute for reading the audited consolidated financial statements of the Group prepared in accordance with IFRS.

### Management’s responsibility for the summary consolidated financial statements

Management of the Group is responsible for the preparation of a summary of the audited consolidated financial statements on the basis described in Note “Basis for preparation”.

### Auditor’s responsibility

Our responsibility is to express an opinion on the summary consolidated financial statements based on our procedures, which were conducted in accordance with International Standard on Auditing (ISA) 810, “Engagements to Report on Summary Financial Statements”.

### Opinion

In our opinion, the summary consolidated financial statements derived from the audited consolidated financial statements of the Group for the year ended 31 December 2011 are consistent, in all material respects, with those consolidated financial statements, on the basis described in Note “Basis for preparation”.

26 March 2012
Moscow, Russia

# FINANCIAL STATEMENTS 2011

##### Summary Consolidated Financial Statements Derived from the Audited International Financial Reporting Standards Consolidated Financial Statements and Independent Auditor’s Report 31 December 2011

#### Summary consolidated statement of financial position

In millions of Russian Roubles | 31 December 2011 | 31 December 2010
--- | --- | ---
ASSETS
Cash and cash equivalents | 37 755 | 32 151
Mandatory cash balances with the CBRF | 1 939 | 1 072
Trading securities | 7 347 | 12 182
Due from other banks | 967 | 5 860
Loans and advances to customers | 124 383 | 104 046
Investment securities available for sale | 1 377 | 2 043
Property, equipment and intangible assets | 3 048 | 3 132
Other financial assets | 1 254 | 1 644
Non-current assets classifield as held for sale | 1 254 | 1 644
Other assets | 4 843 | 3 922
TOTAL ASSETS | 183 888 | 166 158
LIABILITIES
Due to other banks | 8 202 | 7 772
Customer accounts | 145 142 | 130 334
Debt securities in issue | 6 722 | 5 794
Subordinated loans | 4 217 | 4 293
Other financial liabilities | 588 | 611
Other liabilities | 555 | 494
TOTAL LIABILITIES | 165 426 | 149 298
EQUITY
Share capital | 250 | 250
Share premium | 7 306 | 7 306
Retained earnings | 10 807 | 9 227
Other reserves | 99 | 77
TOTAL EQUITY | 18 462 | 16 860
TOTAL LIABILITIES AND EQUITY | 183 888 | 166 158

D.L. Orlov President |  | A.A. Novikova Chief Accountant |

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#### Summary consolidated statement of comprehensive income

In millions of Russian Roubles | 2011 | 2010
--- | --- | ---
Interest income | 13 959 | 13 600
Interest expense | (6 503) | (8 109)
Net interest income | 7 456 | 5 491
Provision for loan impairment | (2 304) | (1 872)
Net interest income after provision for loan impairment | 5 152 | 3 619
Fee and commission income | 5 232 | 4 295
Fee and commission expense | (410) | (360)
Losses less gains/Gains less losses from trading securities | 7 | (90)
Gains less losses from trading in foreign currencies | 420 | 345
Foreign exchange translation losses less gains | (50) | (24)
Gains less losses from disposals of investment securities available for sale | 12 | 15
Dividend income | 3 | 2
Other operating income | 219 | 225
Administrative and other operating expenses | (8 353) | (7 180)
Provision for impairment of other assets | (216) | (121)
Profit before tax | 2 016 | 726
Income tax expense | (422) | (145)
PROFIT FOR THE YEAR | 1 594 | 581
Other comprehensive income:
Available-for-sale investments:
Gains less losses/(Losses less gains) arising during the year | 32 | (5)
Income tax credit/(expense) recorded directly in other comprehensive income | (10) | 12
Other comprehensive income for the year | 22 | 7
TOTAL COMPREHENSIVE INCOME FOR THE YEAR | 1 616 | 588
Earnings per share for profit attributable to the equity holders of the Bank, basic and diluted (expressed in RR per share)
Ordinary shares | 64 | 23
Preference shares with determined dividend amount |  | 25

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#### Summary consolidated statement of changes in equity

In millions of Russian Roubles | Share capital | Share premium | Revaluation reserve for available-for-sale investments | Retained earnings | Total equity
--- | --- | --- | --- | --- | ---
Balance as at 31 December 2009 | 250 | 7 306 | 70 | 8 660 | 16 286
Profit for the year | — | — | - | 581 | 581
Other comprehensive income | — | — | 7 | - | 7
Total comprehensive income for 2010 | — | — | 7 | 581 | 588
Dividends declared | — | — | — | (14) | (14)
Balance as at 31 December 2010 | 250 | 7 306 | 77 | 9 227 | 16 860
Profit for the year | — | — | - | 1 594 | 1 594
Other comprehensive income | — | — | 22 | - | 22
Total comprehensive income for 2011 | — | — | 22 | 1 594 | 1 616
Dividends declared | — | — | — | (14) | (14)
Balance as at 31 December 2011 | 250 | 7 306 | 99 | 10 807 | 18 462

#### Summary consolidated statement of cash flows

In millions of Russian Roubles | 2011 | 2010
--- | --- | ---
Cash flows from operating activities
Interest received | 14 660 | 13 199
Interest paid | (6 601) | (8 448)
Fees and commissions received | 5 244 | 4 267
Fees and commissions paid | (410) | (360)
Net income received from trading in trading securities | (32) | 19
Net income received from trading in foreign currencies | 420 | 345
Other operating income received | 178 | 217
Administrative and other operating expenses paid | (7 708) | (6 575)
Income tax paid | (825) | (633)
Cash flows from operating activities before changes in operating assets and liabilities | 4 926 | 2 031
Changes in operating assets and liabilities
Net increase in mandatory cash balances with the Central Bank of the Russian Federation | (867) | (204)
Net increase in trading securities | 4 920 | (2 541)
Net decrease/(increase) in due from other banks | 4 912 | 506
Net (increase)/decrease in loans and advances to customers | (24 039) | (20 568)
Net increase in other financial assets | 407 | (425)
Net decrease in other assets | (213) | 148
Net increase/(decrease) in due to other banks | 215 | 3 126
Net increase in customer accounts | 13 773 | 17 978
Net (decrease)/increase in debt securities in issue | 819 | (333)
Net increase in other financial liabilities | (24) | 26
Net increase in other liabilities | (110) | 41
Net cash (used in)/from operating activities | 4 719 | (215)
Cash flows from investing activities
Acquisition of investment securities available for sale | (762) | (1 589)
Proceeds from disposal of investment securities available for sale | 1 491 | 876
Acquisition of premises, equipment and intangible assets | (442) | (511)
Proceeds from disposal of premises, equipment and intangible assets | 15 | 8
Income from disposal of non-current assets available for sale | 38 | 63
Proceeds from disposal of investment properties | 181 | 7
Dividend income received | 3 | 2
Net cash (used in)/from investing activities | 524 | (1 144)
Cash flows from financing activities
Receipt of funding from international financial institutions | - | 407
Repayment of subordinated loans | (226) | (395)
Receipt of subordinated loans | - | 91
Dividends paid | (14) | (14)
Net cash from/(used in) financing activities | 240 | 89
Effect of exchange rate changes on cash and cash equivalents | 601 | (680)
Net (decrease)/increase in cash and cash equivalents | 5 604 | (1 950)
Cash and cash equivalents at the beginning of the year | 32 151 | 34 101

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## Basis for preparation

These summary consolidated financial statements of Bank Vozrozhdenie and its subsidiary (the “Group”) have been prepared by extraction, without any modification, of the consolidated statement of financial position, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows from the consolidated financial statements of the Group prepared in accordance with International Financial Reporting Standards.

The consolidated financial statements, from which the summary consolidated financial statements have been derived, are available from Bank Vozrozhdenie upon request at Luchnikov pereulok, 7/4 bld. 1, 101990, Moscow, Russian Federation.

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