37. Related Party Transactions
For the purposes of these consolidated financial statements, parties are considered to be related if one party has the ability to control the other party, is under common control, or can exercise significant influence over the other party in making financial or operational decisions. In considering each possible related party relationship, attention is directed to the substance of the relationship, not merely the legal form.
The Group’s principal shareholder is the Bank of Russia (refer to Note 1). Other related parties in the tables below comprise key management personnel, their close family members, associated companies of the Group. Disclosures are made in Note 38 for significant transactions with state-controlled entities and government bodies.
As at 31 December 2012 and 31 December 2011, the outstanding balances with the Bank of Russia and other related parties were as follows:
| In billions of Russian Roubles | Note | 2012 | 2011 | ||
|---|---|---|---|---|---|
| the Bank of Russia | Other related parties | the Bank of Russia | Other related parties | ||
| Assets | |||||
| Cash and cash equivalents | 260.4 | — | 51.3 | 0.9 | |
| Mandatory cash balances with the Bank of Russia | 122.6 | — | 99.5 | — | |
| Due from banks (contractual interest rates: 2.0% p.a. — 6.5% p.a.) | — | — | — | 0.8 | |
| Gross amount of loans and advances to customers (contractual interest rates: 7.5% p.a. 21.0% p.a.) | — | 0.1 | — | 0.3 | |
| Other assets | — | 0.1 | — | 0.1 | |
| Liabilities | |||||
| Due to banks (contractual interest rates: 5.5% p.a. — 8.0% p.a.) | 1,070.8 | — | 265.6 | — | |
| Due to individuals | — | 8.3 | — | — | |
| Due to corporate customers (contractual interest rates: 1.0% p.a. — 8.4% p.a.) | — | 0.9 | — | 1.5 | |
| Subordinated debt (effective interest rate: 6.5% p.a.) | 21 | 303.3 | — | 303.3 | — |
| Other liabilities | — | — | — | 0.3 | |
The income and expense items with the Bank of Russia and other related parties for the year ended 31 December 2012 and 31 December 2011 were as follows:
| In billions of Russian Roubles | 2012 | 2011 | ||
|---|---|---|---|---|
| the Bank of Russia | Other related parties | the Bank of Russia | Other related parties | |
| Interest income | — | — | 9.0 | — |
| Interest expense on subordinated debt | (19.6) | — | (19.5) | — |
| Interest expense other than on subordin ated debt | (38.6) | (0.3) | (3.3) | — |
| Operating expenses | (1.4) | (0.2) | (1.3) | (0.1) |
For the year ended 31 December 2012, remuneration of the members of the key management personnel comprised salaries and bonuses totaling 2.4 billion RUB (for the year ended 31 December 2011: 2.2 billion RUB).