BANK OF BAKU
AUDITORS REPORT AND FINANCIAL STATEMENTS AT 31 DECEMBER 2001

	2001	2000
Depreciation on premises and equipment (Note 10)	198,770	202,669
Professional fees	148,754	147,540
Communication expenses	86,087	68,190
Utility expenses	63,875	85,124
Business trip expenses	47,256	47,148
Repair and maintenance expenses	39,395	57,097
Advertising expenses	26,353	9,596
Rent expenses	24,304	24,789
Building security	16,993	15,925
Amortisation expenses	23,944	16,920
Membership fees	16,931	5,629
Insurance expenses	12,437	78,878
Custom duties for import of petty cash in foreign currency	7,058	401,608
Penalties paid	-	82,884
Other expenses	59,466	28,398
Loss on guarantee letters	-	238,117
Total general, administrative and other operating expenses	771,623	1,510,512

During 2000 the Bank paid AZM 401,608 of custom duties for import of petty cash in foreign currency. On 25 October 2000 the NBAR imposed restrictions to such operations. Those restrictions were lifted on 9 July 2001. 

During 2000 the Bank incurred losses on guarantee letters issued in prior years. Those letters were given to individuals for consumer purchases.

Note 1 Principal Activities 
Note 2 Significant Accounting Policies 
Note 3 Use of financial instruments 
Note 4 Cash and short-term Funds 
Note 5 Loans and Advances to Banks 
Note 6 Loans and Advances to Customers 
Note 7 Investment securities held-to-maturity 
Note 8 Other Assets 
Note 9 Intangible assets 
Note 10 Premises and Equipment 
Note 11 Due to Banks 
Note 12 Customer Accounts
Note 13 Other Borrowed Funds 
Note 14 Other Liabilities 
Note 15 Paid-in Capital 
Note 16 Retained earnings
Note 17 Dividends 
Note 18 Fee and commission income 
Note 19 Fee and commission expense 
Note 20 General, administrative and other operating expenses 
Note 21 Taxation 
Note 22 Commitments and contingent liabilities 
Note 23 Reconciliation of Azerbaijanian Accounting Rules to International Accounting Standards 
Note 24 Related party transactions 
Note 25 Post balance sheet events