Annual report 2011 - VTB

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VTB BankNotes to the Consolidated Financial Statements – 31 December 2011 and 2010(in billions of Russian Roubles)39. Fair Values of Financial Instruments (continued)Sensitivity analysis to changes of key assumptions for financial instruments valued using Level 3 models(continued)If the Group had used other reasonably possible alternative assumptions at 31 December 2011, the fair value of theabove equity securities valued based on valuation models, would have been in the range from RUR 43.6 billion toRUR 58.3 billion.As at 31 December 2010, financial assets available-for-sale for the amount of RUR 22.8 billion were valued based onvaluation models by using the peer based valuations model and discounted cash flow method. The averageassumptions related to projections of discounted cash flows in the model up to 2013 were the following: WACC is 15.9%; Cost of debt is 10%;Net margin is 0.0001% less every next year; Liquidity discount applied to the valuation is 30%.If the Group had used other reasonably possible alternative assumptions at 31 December 2010, the fair value of theabove equity securities valued based on valuation models, would have been in the range from RUR 21.8 billion toRUR 23.4 billion.Transfers between levelsDuring the period ended 31 December 2011 the Group transferred financial assets designated as at fair valuethrough profit or loss and financial assets available-for-sale from Level 3 to Level 2 of the fair value hierarchy in thecarrying amount of RUR 2.3 billion. The remaining amount of RUR 0.3 billion was reclassified to investments inassociates. The Group transferred financial assets held for trading from Level 3 to Level 2 in the amount ofRUR 2.3 billion. The reason for the transfers from Level 3 to Level 2 is that inputs to the valuation models becameobservable. Prior to transfer, the fair value of the instruments was determined incorporating significant non marketobservableinputs.During the period ended 31 December 2011 the financial assets held for trading were transferred from Level 1 toLevel 2 in the amount of RUR 11.2 billion as they became estimated on the market internal model basis. Previouslytheir fair values were determined using market quotes.There have been no transfers from Level 2 to Level 1 during the period ended 31 December 2011.During 2010 the financial assets designated as at fair value through profit or loss for the total amount ofRUR 5.0 billion were transferred from Level 2 to Level 1 as they became actively traded during the year and fairvalues were consequently determined using market quotes.There have been no transfers between Level 1 and Level 2 in 2010.40. Related Party TransactionsParties are considered to be related if one party has the ability to control the other party or exercise significantinfluence over the other party in making financial or operational decisions as defined by IAS 24 Related PartyDisclosures. In considering each possible related party relationship, attention is directed to the substance of therelationship, not merely the legal form. A government-related entity is an entity that is controlled, jointly controlled orsignificantly influenced by a government.91
VTB BankNotes to the Consolidated Financial Statements – 31 December 2011 and 2010(in billions of Russian Roubles)40. Related Party Transactions (continued)Transactions and balances with related parties comprise transactions and balances with Russian government-relatedentities and associates and joint ventures and are stated in the tables below:Statements of financial position31 December 2011 31 December 2010Associates and Governmentrelatedjoint ventures entitiesGovernmentrelatedentitiesAssociates andjoint venturesAssetsCash and short-term funds 174.4 – 104.8 –Mandatory reserve deposits with central banks 58.7 – 19.0 –Financial assets at fair value through profit or loss 308.0 – 164.2 –Financial assets pledged under repurchaseagreements and loaned financial assets 191.4 – 9.0 –Due from other banks 97.1 2.1 82.8 3.7Loans and advances to customers 778.7 27.0 391.7 12.4Allowance for loan impairment (20.3) (0.6) (16.9) (1.6)Financial assets available-for-sale 19.4 – 8.3 0.3Investment securities held-to-maturity 31.6 – 32.7 –LiabilitiesDue to other banks 176.0 0.3 75.5 1.3Customer deposits 1,276.5 8.4 565.8 3.5Other borrowed funds 558.7 – 170.2 –Subordinated debt 207.0 – 195.3 –Other liabilities 35.6 0.2 1.1 –Credit Related CommitmentsGuarantees issued 238.7 1.6 137.7 0.7Undrawn credit lines 1.8 – 4.5 –Import letters of credit 4.2 – 2.8 –Income statements2011 2010Interest incomeLoans and advances to customers 39.8 40.5Securities 18.4 15.5Due from other banks 3.0 2.3Interest expenseCustomer deposits (36.3) (23.5)Due to other banks and other borrowed funds (9.2) (7.0)Subordinated debt (16.4) (16.6)(Provision for) / recovery of impairment (2.4) 3.4For the period ended 31 December 2011, the total remuneration of the key management personnel of the Groupincluding pension contributions amounted to RUR 5.7 billion (31 December 2010: RUR 3.8 billion). Key managementpersonnel include VTB Supervisory Council, VTB Management Board, VTB Statutory Audit Committee and keymanagement of subsidiaries. Loans to the key management personnel as at 31 December 2011 amounted toRUR 0.4 billion (31 December 2010: RUR 0.5 billion). Compensation to key management personnel primarily consistsof short term employee benefits.92
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VTB Annual Report 2011Statement of
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VTB Annual Report 20111. Financial
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VTB Annual Report 20113. The econom
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VTB Annual Report 20113. The econom
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Today, about 16 million individuals
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VTB Annual Report 20118. 8. Выд
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VTB Annual Report 20118. Summary co
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VTB Annual Report 201111. Other Gro
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VTB Annual Report 201112. Sharehold
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VTB Annual Report 2011144VTB places
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VTB BankConsolidated Financial Stat
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Annual report 2011 - VTB

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