Information on Adjusting Events after the Reporting Date

Information on Adjusting Events after the Reporting Date

Adjusting EARD are recognized in the accounting records. Adjusting EARD are events confirming the existence as of the reporting date of the conditions in which the Bank has operated.

The total volume and composition of EARD for 2011 are reflected in the consolidated turnover statement in the form of Appendix 14 to Regulation of the Bank of Russia No. 302-P. According to Directive of the Bank of Russia No. 2089-U and the Bank’s Accounting Policy, the accounting records contain, in particular, the following adjusting EARD:

• 
  carryover of the balances from the profit and loss accounts of the accounting year to the profit and loss accounts of the previous year, namely:
  

• 
  7,379,506.6 million rubles from the profit accounts;
  
• 
  7,057,615.5 million rubles from the expense accounts;
  

• 
  adjustments for taxes and duties payable by the Bank in the amount of 1,037.9 million rubles (increase by 1,064.9 million rubles, decrease by 27.0 million rubles);
  
• 
  adjustment of loss provisions (including for contingent credit-related liabilities) created as of the reporting date, subject to information on the conditions prevailing as of the reporting date received when drawing up the annual report, in the amount of 1,049.2 million rubles (increase by 1,067.8 million rubles, decrease by 18.6 million rubles);
  
• 
  receipt after the reporting date of source documents confirming the transactions performed before the reporting date and/or determining (specifying) the cost of the work, services and assets for such transactions and specifying the income and expenditure reflected in the accounting records for the amount of 3,700.5 million rubles (increase in profit by 1,520.0 million rubles, increase in expenditure by 5,220.5 million rubles);
  
• 
  depreciation of fixed asset items chargeable to expenditure in the amount of 5,878.4 million rubles;
  
• 
  appreciation of fixed asset items chargeable to income in the amount of 269.8 million rubles;
  
• 
  depreciation (reduction) of the cost of fixed asset items upon revaluation as of January 1, 2012 in the amount of 2,803.1 million rubles;
  
• 
  reduction of the accumulated amortization upon depreciation of fixed asset items as a result of their revaluation in the amount of 277.0 million rubles.
  

7. Non-Adjusting Events after the Reporting Date

On February 15, 2012, Sberbank of Russia closed a deal for the purchase of 100% of shares of Volksbank International AG (VBI) – East European division of the Austrian banking group Oesterreichische Volksbanken AG. The deal will allow Sberbank additionally to enter the markets of Austria, the Czech Republic, Hungary, Croatia, Serbia, Slovenia and Bosnia-Herzegovina.

8. Information on Failures to Comply with Accounting Rules

No non-compliance with the accounting rules was revealed.

9. Changes in the Bank’s Accounting Policy for 2012

From January 1, 2012, the Bank’s headquarters and branches classify property into fixed assets, immovable property temporarily unused in the core activities, intangible assets and inventories in accordance with the regulatory documents of the Bank of Russia and the Bank’s Accounting Policy.

The value of the immovable property temporarily unused in the core activities is determined: after its first recognition, such immovable property is valuated at its current (fair) cost.

The items of the immovable property temporarily unused in the core activities are revaluated at the current (fair) value on a quarterly basis.

If it appears impossible to determine the current (fair) value of an item, that is for the first time classified as property temporarily unused in the core activities, after changing the way it is used, the Bank’s headquarters and branches value this item at its initial value net of the accumulated amortization and accumulated impairment losses. Such items are checked for impairment once a year.

Further, such an item will be recognized at its initial cost net of the accumulated amortization and accumulated impairment losses up to its disposal or transfer from the property temporarily unused in the core activities.

The criteria for recognizing the immovable property temporarily unused in the core activities have been defined.

Immovable property temporarily unused in the core activities is the property (part of the property) (land or building, or part of the building or both) owned by the Bank (obtained in the course of its charter activities) and intended for receiving rent payments (save for the payments under financial lease contracts), revenues from the increase in the cost of such property or both, but not for using as labor instruments for the provision of services, management of a credit organization, as well in cases stipulated by sanitary and hygienic, technical and operating, and other special technical standards and requirements, which is not planned to be sold within one year from the date of being classified as the property temporarily unused in the core activities.

The immovable property temporarily unused in the core activities includes:

• 
  land plots the purpose of which is not defined;
  
• 
  land plots provided for temporary possession and use or for temporary use under one or more lease contracts, save for financial lease;
  
• 
  a building (part of a building) provided for temporary possession and use or for temporary use under one or more lease contracts, save for financial lease;
  
• 
  a building (part of a building) provided for temporary possession and use or for temporary use under one or more lease contracts, save for financial lease;
  
• 
  facilities under construction (building) or reconstruction, intended to be provided for temporary possession and use or for temporary use under one or more lease contracts, save for financial lease.
  

If parts of an immovable property item cannot be sold separately, the said item is considered immovable property temporarily unused in core activities only if a maximum of 5% of the total area of the item intended for using as labor instruments for the provision of services, management of a credit organization, as well as in cases provided for by the sanitary and hygienic, technical and operating, and other special technical standards and requirements.

Items are accounted as property temporarily unused in core activities only if all of the following conditions established by the Bank of Russia are met:

• 
  an item is capable of bringing economic benefits to the Bank in future;
  
• 
  the cost of an item can be reliably determined.
  

If it is decided to sell an item of immovable property temporarily unused in core activities, it is transferred to non-current inventories.

If items of fixed assets as well as non-current inventories are transferred to immovable property temporarily unused in core activities, the Bank's headquarters and branches revaluate the items transferred at the current (fair) value as of the item transfer date.

If an item of immovable property temporarily unused in core activities is transferred to fixed assets and non-current inventories, its current (fair) value as of the transfer date is taken as the initial cost of such item for the purposes of further accounting.

From January 1, 2012, items of over 40,000 rubles per unit are accounted as part of the fixed assets.

Monthly depreciation is charged on property temporarily unused in core activities, which is accounted at its initial cost net of the accumulated amortization and accumulated impairment losses, at the rates calculated based on the useful life as set forth by Decree of the Russian Government No. 1 “On classification of fixed assets included in depreciation groups” dated January 1, 2002, subject to the provisions of the Accounting Policy for Tax Purposes of Sberbank of Russia as it pertains to defining the useful life of the depreciated property.

The cost of securities acquired under the contracts being derivative financial instruments (“DFI”) is determined. The value of such securities to be accounted is determined subject to the DFI cost.

From January 2012, the current (fair) value of securities is determined by methods set forth in Methodology for Determining the Current Fair Value of Financial Instruments No. 2360 dated December 27, 2011.

The specific features of DFI accounting are determined, involving the following. A derivative financial instrument is initially recognized in the accounting records upon signature of the contract being a derivative financial instrument.

From the date of the initial recognition, derivative financial instruments are valued at fair value.

• 
  an obligation of the parties or a party to the contract to pay monies, whether on a regular or nonrecurring basis, including in the event of any claims raised by the other party, depending on the change of prices for goods and securities, the exchange rate of the respective currency, the amount of interest rates, the level of inflation, the values calculated based on the prices for derivative financial instruments, the values of indicators constituting official statistical information, the values of physical, biological and/or chemical environment indicators, the occurrence of a circumstance evidencing a failure to perform or improper performance by one or more legal entities, governments or municipal units of their obligations (save for a surety contract and an insurance contract), or any other circumstance provided for by federal law or regulations of a federal executive authority for the securities market, and in respect of which it is unknown whether it will or will not occur, as well as on the change of values calculated based on one or several of the indicators mentioned in this clause. Moreover, such contract may also provide for an obligation for a party or parties thereto to transfer securities, goods or currency to the other party, or an obligation to enter into a contract being a derivative financial instrument;
  
• 
  an obligation of a party or parties on the terms determined upon signature of the contract and as required by the other party to buy or sell securities, currency or goods or to sign a contract being a derivative financial instrument;
  
• 
  an obligation of one party to transfer ownership of securities, currency or goods to the other party not earlier than the third day after the date of the contract, an obligation of the other party to accept and pay for the said property and the note that such contract is a derivative financial instrument. In this case, supply contracts, under which the basic asset is securities, currency or goods, made on an over-the-counter market are DFIs to the extent it is agreed upon by the parties to the contract in the Agreement or upon concluding a transaction, and is specified in the Agreement and/or the transaction documents. Failing this, such contracts are not DFIs and are not accounted as DFIs but recognized as forward transactions for sale and purchase of the respective asset.
  

• 
  contracts which are DFIs under the law of a foreign country, the regulations of an international treaty or business practice, and in respect of which the law of a foreign country or the regulations of an international treaty provide for the judicial defense thereof;
  
• 
  contracts which are DFIs in accordance with the trade organizer’s specification;
  
• 
  contracts which are DFIs under a broker agreement;
  
• 
  contracts made under ISDA.
  

• 
  operations are performed through a trade organizer;
  
• 
  information on current prices is publishable and publicly available.
  

The fair value of DFI is calculated based on the data disclosed by such information agencies as Bloomberg, Thomson Reuters, Russian or foreign organizers of trade as of the DFI revaluation date.

In addition, to determine the estimated value of individual types of DFI, the Bank may call upon an independent appraiser. The data received from the appraiser are used as input parameters for daily determination of the fair value of DFI.

During 2011 and within the period of drawing up the annual report of which this explanatory note is part, there were no other events required to be disclosed in the explanatory note under the laws of the Russian Federation.

Chairman of the Management Board, Sberbank of Russia OJSC /Signature/ H. Gref

Director of the Accounting and Reporting Department,

Sberbank of Russia OJSC /Signature/ A.V. Kruzhalov
/Seal/: SBERBANK * Sberbank of Russia Joint-Stock Company * Moscow

Evaluation of the Auditor’s Report Prepared by the Bank’s Auditing Committee
On evaluation of the auditor’s report on the annual report for the year ended December 31, 2011 (drawn up in accordance with Directive of the Bank of Russia No. 2089-U dated October 8, 2008 “On the procedure for drawing up of annual statements by credit organizations”

Having reviewed the auditor’s report provided by the independent auditor ZAO Ernst & Young Vneshaudit for the annual report for the year ended December 31, 2011, the Auditing Committee of the Supervisory Board of Sberbank of Russia OJSC resolved to:

1. 
   Note that:
   

• 
  the audit was carried out in compliance with Federal Auditing Standards and International Audit standards;
  
• 
  the audit report is drawn up in conformity to Federal Auditing Standard (FAS) 1/2011 “Auditor’s report on accounting (financial) statements and formation of the opinion on their accuracy” approved by Order of the Ministry of Finance of the Russian Federation No. 46n dated May 20, 2010;
  
• 
  the audit report contains an unqualified opinion on the accuracy of the financial position of Sberbank of Russia OJSC in all material respects as of January 1, 2012 and the results of its financial and economic activities for the period from January 1, 2011 to December 31, 2011 inclusive, subject to the laws of the Russian Federation applicable to credit organizations as it pertains to the preparation of annual reports.
  

2. 
   Recommend the Supervisory Board of Sberbank of Russia OJSC to submit the annual report for the year ended December 31, 2011 (drawn up in accordance with Directive of the Bank of Russia No. 2089-U dated October 8, 2008 “On the procedure for drawing up annual statements by credit organizations”) for approval by the Annual General Shareholders’ Meeting.
   
3. 
   Propose to the Supervisory Board of Sberbank of Russia OJSC to include this resolution of the Auditing Committee of the Supervisory Board of Sberbank of Russia OJSC in the information (materials) provided for review to the persons entitled to participate in the Annual General Shareholders’ Meeting to be held on June 1, 2012 as an evaluation of the auditor’s report on the annual report for the year ended December 31, 2011.
   

Chairman of the Committee

Management Board of Sberbank of Russia OJSC

of the Audit Commission on the Results of Audit of Sberbank of Russia’s Financial and Economic Activities for 2011

The Bank's annual report for 2011 is drawn up subject to the requirements of the Bank of Russia and the laws of the Russian Federation on securities, and is characterized by the following indicators. The Bank’s assets for the accounting year grew by 1, 896 billion rubles and amounted to 10,419 billion rubles as of January 1, 2012.

The Bank’s capital grew by 22.1% for the year and as of January 1, 2012 it amounted to 1,516 billion rubles. The Bank’s capital growth in 2011 was attributed to net profit. The actual value of the Bank’s equity (capital) adequacy ratio (Н1[N1]) was 15.0% with the minimum admissible value of 10.0%.

The Bank’s financial and economic activities for 2011 were audited in accordance with the work plan of the Audit Commission; in particular, the following issues were considered:

• 
  audit of the correctness of generation and disposition of profits;
  
• 
  audit of the loan debts, including overdue loan debts;
  
• 
  audit of accounts receivable;
  
• 
  audit of investments in affiliates and subsidiaries;
  
• 
  audit of transactions with securities of third party issuers;
  
• 
  audit of the work for forming the budget of capital investments, acquisition of fixed assets and performing an inventory of fixed assets.
  

The processes of the Bank’s risk management and the organization of the internal control were analyzed.

In 2011, in the audited areas of activities, the Bank operated in accordance with the laws, regulatory documents of the Bank of Russia and the Bank's regulations.

The created risk management and internal control system is adequate to the scale and character of the operations carried out by the Bank.

When carrying out the audit within the scope of its functions and powers, the Audit Commission did not reveal any material violations, errors or faults in the Bank's activities which might pose a threat to the interests of the shareholders, creditors and depositors.

The Audit Commission believes that the results of the Bank's financial and economic activities for 2011, reflected in the Bank's annual report, may be accepted by the General Shareholders’ Meeting for consideration and approval.

The results of the audit conducted by the Audit Commission are brought to the notice of the Chairman of the Supervisory Board of Sberbank of Russia OJSC – the Chairman of the Bank of Russia, S.M. Ignatiev, the Auditing Committee of the Supervisory Board, and the Management Board of the Bank.

Chairman of the Audit Commission –

Director of the Internal Audit Department,

Bank of Russia O.V. Polyakova /Signature/

V.M. Volkov /Signature/

Deputy Chief Accountant, Sberbank of Russia – Deputy Director of the Accounting and Reporting Department

A.E. Minenko /Signature/

Deputy Director of the Internal Control, Revisions and Audit Department, Sberbank of Russia OJSC

M.L. Dolzhnikov /Signature/

Head of the Finance Control Unit, Sberbank of Russia

Y.Y. Isakhanova /Signature/

L.A. Zinina /Signature/
Recommendations
of the Bank’s Supervisory Board
on Distribution of Profits and Amount
of Dividends Paid for the Bank’s Shares
for 2011
Recommendations of the Bank’s Supervisory Board on Distribution of Profits and Amount of Dividends Paid for the Bank’s Shares for 2011
Recommend that the Annual General Shareholders’ Meeting:

1. 
   Approve distribution of profits of Sberbank of Russia OJSC
   

(subject to the events after the reporting date)

Amount (rubles)

Net profit after tax 310,494,910,863.88

Distribution of profits after tax:

Funds for payment of dividends 47,490,851,840.00

2. 
   Pay dividends for the ordinary shares of Sberbank of Russia OJSC par value 2.08 rubles per one share, and for the preferred shares par value 2.59 rubles per one share.
   

Written consents of the candidates for election to the Supervisory Board of Sberbank of Russia are available.