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

Bank of Baku (the Bank) was established on 14 February 1994 as the commercial bank Tugai. Upon the decision of the shareholders, the Bank changed its name to Bank of Baku on 10 February 1997 and re-registered as a closed joint-stock company on 27 August 1997. The Bank provides commercial banking services to its customers through the Head Office.

Currently, the Bank operates under a general banking license and a license for foreign currency operations granted by the National Bank of Azerbaijan Republic ( the NBAR). The Bank has 23 employees as of 31 December 2001 (31 December 2000: 18 employees). The registered address of the Bank is as follows: Neftchilar pr. 65, Baku, 370004, Azerbaijan.

The Azerbaijan economy has shown progress in achieving a lower rate of inflation, stable exchange rates and sustainable growth in recent years. However, the economy is largely dependent on oil prices and all sectors of the economy, including the banking sector, might be affected by fluctuations in oil prices.
 

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