Saint-Petersburg Commercial Bank “Tavrichesky” (joint-stock) (стр. 9 )

	2006	2005
	RUR	USD	EURO	RUR	USD	EURO
Assets
Financial assets calculated at fair value using profit or loss	-	-	-	11,0%	-	-
Assets in other banks	5,2%	-	-	2,4%	-	-
Credits and receivables	13,4%	13,5%	11,4%	13,5%	12,7%	10,0%
Liabilities
Assets of other banks	11,6	-	-	10,5%	-	-
Assets of clients	5 – 10,5%	4-8%	3-8%	8 – 11%	5 – 8%	-
Issued debt securities	9,3%	10,9%	12,6%	12,8%	8,2%	-
Other borrowed assets	7,2%	-	-	7,2%	-	-

Note 26 – Contingent Liabilities And Derivative Financial Instruments

a) Liabilities of credit character

The main destination of these instruments is provision of granting funds to clients if necessary. Warranties, letters of credit which are not used by IFRS 4 “Insurance contracts” bear the same risk level as the credits. Liabilities of credit character of the Bank were as follows:

	2006	2005
Liabilities issued
Unused credit lines
Warranties
	1	1
With deduction of depreciation reserves
Liabilities of credit character, total	1	1

Liabilities on granting credits represent the unused part of credits, warranties and letters of credit approved for issuance. In relation to the liabilities to grant credits the Bank potentially bears risks of loss at the amount which equals the total sum of unused liabilities. Nevertheless, the possible sum of losses is lower than the total sum of unused liabilities, as the major part of liabilities on granting credits is backed by observation by the clients of certain standards of creditability. The Bank controls the term which is left until redemption of liabilities of credit character because usually longer-term liabilities have a higher level of credit risk than the short-term ones.

The total amount of liability on warranties and unused credit lines does not necessarily represent future monetary claims because it is possible that the terms may expire or these liabilities may be written off without granting of funds to the borrower.

The analysis and changes of estimated liabilities is given below:

	2006	2005
Balance value of estimated liabilities as of December 31 of the year which precedes the reporting year	12 342	10 893
Additional estimated liabilities within the period	10 164	1 449
Estimated liabilities as of December 31 of the reporting year	22 506	12 342

b) Liabilities on operational lease

In fulfillment of its operations, the Bank concludes contracts on lease of fixed assets. Future liabilities under these contracts comprise:

	2006	2005
Less than 1 year	82 630	93 277
From 1 to 5 years	15 678	16 229
Liabilities on operational lease, total	98 308

c) Legal proceedings

In fulfillment of its operations, the Bank may be involved in legal proceedings. The Bank’s management considers that possible liabilities related to law suits would not have a substantial negative effect on financial standings or results of the future Bank’s activities and, correspondingly, the reserve for such proceedings has not been formed in the financial statement.

d) Assets under custody

Assets under custody comprise the assets that have been transferred to the Bank for depositary storage under an agent agreement or any other similar conditions. These assets are not presented in the balance sheet as they are not assets of the Bank. The par value of such assets given below usually differs from their fair value. The assets under custody comprise the following categories:

	2006	2005
	Par value	Par value
Securities under contracts of custody	1	1
Shares of enterprises under custody in the Depository Clearing Company and the custody of the Bank

The Bank has no insurance coverage for the assets under custody.

e) Current derivative financial instruments

Currency derivative financial instruments are usually subject to trade on over-the-counter market with professional participants of the market on the basis of standardized contract terms. Contract amounts of some financial instruments make the basis for comparison with instruments presented in the balance sheet but not always present amount of future monetary flows or current fair value of instruments and, as a result, do not present the level of credit or price risks borne by the Bank. The derivative financial instruments have either potentially profitable conditions (assets) or potentially unprofitable conditions (liabilities) as a result of fluctuation of interest rates on the market or of the currency exchange rates related to these instruments. Total contractual or contingent amount of derivative financial instruments, potential profitability or non-profitability of their conditions and, consequently, their total fair value may change substantially with the course of time.

	2006	2005
	Contracts with Russian counterparties	Contracts with Russian counterparties
	Contractual (agreed) sum	Negative fair value	Positive fair value	Contractual (agreed) sum	Negative fair value	Positive fair value
Forward contracts
Foreign currency
- foreign currency sold		(328)	1 107	74 130	-	553

The table given below represents the comparative analysis of contractual and agreed amounts of transactions and the fair value of derivative financial instruments. This table comprises total sums on transaction before bilateral clearing of items on each counterparty on types of financial instruments.

f) Pledged assets.

As of the reporting dates December 31, 2006 and December 31, 2005 the Bank had no assets used as security.

Note 27 – Transactions With Affiliated Parties

For the purposes of this financial statement the parties are considered affiliated if one of these parties can control the other one or substantially influence on making financial or operational decisions by the other party as specified in IFRS 24 “Reveal of information on affiliated parties”. In consideration of all possible relationships with affiliated parties not only their juridical form but economic aspect of such relationships as well is taken into account.

In the course of conventional operations the Bank fulfills transactions with its major shareholders, managers, dependent or affiliated companies, as well as companies with which the Bank has common shareholders.

Such transactions have comprised settlements, granting credits, deposits attraction and purchase of securities. Most of these transactions have been executed at market rates. The residues on the yearend, profit and loss items as well as other transactions for the year on transactions with affiliated parties are given below:

	2006	2005
	Amount	%	Amount	%
Transactions with shareholders
Credits not redeemed by the beginning of the year		-		-
Credits issued during the year		-	1 700	-
Redemption of credits during the year	(	-		-
Credits by the year end	68 890	0.,9%		3.2%
Reserve for depreciation of credits	(658)	-		-
Interests received, credits	15 225	1.6%	31 700	3.4%
Current and clearing accounts	30 927	0.5%		10.3%
Deposits not redeemed by the beginning of the year		-		-
Deposits attracted during the year		-		-
Refund of deposits during the year	(	-		-
Deposits by the year end		3.4%		56.2%
Interests paid, deposits	8 993	3.7%	21 361	48.3%
Issued debt securities	28 717	1.3%		4.5%
Transactions with companies under common control of the shareholders
Credits not redeemed by the beginning of the year		-		-
Credits issued during the year		-		-
Redemption of credits during the year	(	-	(	-
Credits by the year end		2.5%		2.6%
Reserve for depreciation of credits		-	(2 799)	-
Interests received, credits	7 700	0.8%	6 700	0,7%

Current and clearing accounts	13 913	0.2%	23 444	1%
Interests paid during the year	-	-	16 772	38%
Issued debt securities	4 500	0.2%	-	-
Key management members
Current and clearing accounts	9 576		-	-
Term deposits	60 650		2 826	-
Clients’ assets by the year end, total	70 226	1.2%	2 826	0.2%
Interests paid within the year	1 022	0,6%	186	-

The column “%” shows the quota of the amount of the corresponding item of the balance sheet and of the profit and loss statement for the years 2006 and 2005.

In 2006 the amount of the reward paid to the members of the Board of Directors of the Bank made 29,717 thousand rubles (2005: 17,315 thousand rubles). In 2006 the amount of the wages and bonuses paid to the members of the Bank’s management made 9,223 thousand rubles (2005: 9,213 thousand rubles).

Note 28 – Fair Value Of Financial Instruments

The fair value is the amount for which an asset can be exchanged or a liability settled by making a deal between the parties who are well-informed, willing to make such a deal and independent from each other, excluding the cases of mandatory sale or liquidation. The best confirmation of the fair value is price of the financial instrument quoted on the market. (As the economy of the Russian Federation still continues showing some features characteristic for developing countries and the economic conditions still limit the volumes of activities on financial markets, the market quotation cannot always reflect the value of financial instruments which could be defined on the operating active market where transactions between interested sellers and buyers take place).

Estimated fair value of financial instruments was calculated by the Bank based on available market information (if any) and on the due evaluation methods.

Financial instruments reflected at fair value. Monetary funds and their equivalents, financial assets and liabilities estimated at fair value using profit or loss, as well as financial assets available for sale, are presented in the balance sheet at their fair value. As you can see in note 9, there are no external independent market quotations for financial assets available for sale. The fair value of such assets has been determined by the Bank basing on physical costs.

Derivative financial instruments. The fair value of derivative financial instruments is given in note 26.

Assets in other banks. The management considers that the fair value of credits to banks as of the reporting dates of December 31, 2006 and December 31, 2005 do not sufficiently differ from their balance value. This can be explained by the existing revaluation practice for interest rates for the purpose of reflection of the existing market conditions, as a result of which the interests on the major part of residues are accrued at rates almost equal to the market interest shares.

Credits and receivables. Credits and receivables are presented with the deduction of the depreciation reserve. According to the Bank, the fair value of credits and receivables as of the reporting dates of December 31, 2006 and December 31, 2005 does not substantially differ from their balance value. This can be explained by the existing revaluation practice for interest rates for the purpose of reflection of the existing market conditions, as a result of which the interests on the major part of residues are accrued at rates almost equal to the market interest shares.

Liabilities specified at their amortized value. The fair value of instruments which have the market price is based on market quotations. The estimated fair value of instruments with undefined term of redemption is the amount due on demand. The estimated fair value of the instruments with fixed interest rate which have no market value is based on discounted monetary flows using interest rates for new instruments with similar credit risk and similar term until redemption. See notes 12, 13, 14, 15 in relation to estimated fair value of assets of other banks, assets of clients, issued debt securities or other borrowed assets respectively.

Note 29 – Events After Reporting Date

As of the date of signing the financial statement the following events took place after the reporting date:

- On February 1, 2007 the Board of Directors made the decision to place additional shares of the 12th Bank securities emission totaling 40,000 thousand rubles by means of issuance of 40,000,000 common shares at par value of 1 ruble within the limits of the announced amount of common shares. Form of issuance – non-documentary and nominal, type of placement – public offering. The price of placement of common shares is 2.50 rubles per 1 share at par value of 1 ruble, including the use by shareholders of their preferential right.

On June 4, 2007 the additional emission of securities was registered by the General Management of the Bank of Russia for St. Petersburg.

- Based on the decision of the shareholders’ assembly, the payment of dividends from the special dividend reserve fund on privileged shares totaling 7,200 thousand rubles (10 rubles per one privileged share) was made and 30,000 thousand rubles were transferred as a part of the profit of 2006 for payment of the dividends on common shares. After taxation the amount of dividends was fully paid to the shareholders in March, 2007.

- Changes in the structure of major shareholders of the Bank are given in the table below:

Shareholder	On the date of signing the statement, %	On December, 31 2006, %
Makhauri Kh. D.	8,68%	0%
Alymov O. V.	6, 25%	5,0%
ООО "Nevsky Capital"	6,17%	4,94%
ООО "Energotrans"	1,84%	17,26%

- Replacement of one member in the structure of the Board of Directors of the Bank occurred on the date of signing the statement: Rybalchenko V. V. replaced Polyansky A. E.

- On March 15, 2007 the Bank concluded the supplementary agreement on prolongation of the attracted subordinated deposit at the amount of 150,000 thousand rubles which was attracted up to June 26, 2015 (initial redemption date was June 24, 2010).

Note 30 – Accounting Estimates And Judgments Adopted In Accounting Policy

The Bank performs evaluations and admissions which influence the adopted amounts of assets and liabilities for the following accounting year. Estimates and judgments are adopted and based on history, experience and other factors, including expectations of future events which may arise in certain circumstances.

Losses from impairment of credits and receivables. The Bank regularly analyzes impairment of credits and receivables. Taking into account the existing experience, the Bank uses its subjective judgment in evaluation of losses from impairment in circumstances when the borrower experiences financial difficulties and with lack of necessary amount of actual data on similar borrowers. Similarly, the Bank estimates changes of future money flows based on observed data which prove unfavorable changes in the status of liabilities’ redemption by the borrowers within the group or changes in the state or local economical conditions which correspond to the cases of non-fulfillment of liabilities on assets within the group. The management uses the estimates based on historical data on the structure of losses in respect to assets with similar characteristics of the credit risk and objective data of impairment on credit and receivables groups. Taking into account its experience, the Bank uses its subjective judgment for adjustment of the observed data on the credit or receivables groups to reflect the current circumstances.

Impairment of financial assets available for sale. The Bank states that financial assets available for sale have been impaired by substantial or continuous decrease of the fair value related to the actual one. The impairment is a result of deterioration of the financial standings of the invested companies.

Stamp: Bound, numbered, sealed 37 sheets of paper. Director General OOO “Peterburgbankaudit” A. I. Mikhaylov Signature; Seal: Limited Liability Company, Saint-Petersburg, Peterburgsky Bankovsky Audit

[1] according to the Business and Banking newspaper report in issueof April 2007