BANK OF BAKU
AUDITORS REPORT AND FINANCIAL STATEMENTS AT 31 DECEMBER 1999

The Bank maintains its accounting records and prepares its statutory financial statements in accordance with the Law on Banks and Banking Activity dated 14 June 1996, tax legislation, and rules and regulations of the NBAR. These financial statements have been prepared from those accounting records and adjusted as necessary in order to comply, in all material respects, with International Accounting Standards ("IAS") issued by the International Accounting Standards Committee. Accordingly, the accounting policies set out in Note 3 have been adopted. The financial statements are presented in the national currency of the Azerbaijan Republic, the Azeri Manat ("AZM").

Note 1 Principal Activities 
Note 2 Basis of Presentation 
Note 3 Significant Accounting Policies 
Note 4 Cash and short-term Funds 
Note 5 Loans and Advances to Banks 
Note 6 Loans and Advances to Customers 
Note 7 Other Assets 
Note 8 Premises and Equipment 
Note 9 Due to Banks 
Note 10 Customer Accounts 
Note 11 Other Borrowed Funds 
Note 12 Other Liabilities
Note 13 Paid-in Capital 
Note 14 Retained earnings / Accumulated Deficit 
Note 15 Fees and Commission Income 
Note 16 Fees and Commission Expense
Note 17 General, Administrative and Other Operating Expenses 
Note 18 Taxation 
Note 19 Dividends 
Note 20 Asset and Liability Concentration 
Note 21 Risk Management 
Note 22 Commitments and Contingent Liabilities 
Note 23 Reconciliation of Azeri Accounting Rules to International Accounting Standards 
Note 24 Related Party Transactions