|
BANK OF BAKU
 AUDITORS REPORT AND
FINANCIAL STATEMENTS AT
31 DECEMBER 1999
Contents
Notes to the Financial Statements
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
AUDITORS REPORT
To the Board of Directors of Bank of
Baku
We have audited the accompanying balance sheet of Bank of Baku ("the
Bank") at 31 December 1999, and the related statements of income, of cash
flows and of changes in shareholders equity for the year then ended. These
financial statements are the responsibility of the Banks management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with International Standards on
Auditing. Those standards require that we plan and perform our audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the accompanying financial statements present fairly, in all
material respects, the financial position of the Bank at 31 December 1999 and
the results of its operations and its cash flows for the year then ended in
accordance with International Accounting Standards.
Without qualifying our opinion we draw attention to Note 1 to the financial
statements. The Azerbaijan economy has shown progress in achieving a lower
rate of inflation and stable exchange rates in recent years. However, the
Azeri 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.
7 April 2000
Balance Sheet at 31 December
(Amounts are expressed in thousands of Azeri Manat)
| |
Note
|
1999
|
1998
|
| |
|
Assets
|
|
|
Cash and short-term funds
|
4
|
7,080,591
|
4,561,412
|
|
Loans and advances to banks
|
5
|
466,818
|
58,350
|
|
Loans and advances to customers
|
6
|
4,630,339
|
2,678,659
|
|
Accrued interest and commission income
|
|
77,100
|
63,231
|
|
Other assets
|
7
|
57,188
|
2,332 |
|
Premises and equipment
|
8
|
520,456
|
391,544
|
|
Deferred tax asset, net
|
18
|
72,012
|
58,250
|
|
|
|
Total assets
|
|
12,904,504
|
7,813,778
|
| |
|
Liabilities
|
|
|
Due to banks
|
9
|
2,278,048
|
855,147
|
|
Customer accounts
|
10
|
1,214,652
|
857,657
|
|
Other borrowed funds
|
11
|
481,030
|
-
|
|
Accrued interest and commission expense
|
|
13,018
|
- |
|
Other liabilities
|
12
|
258,692
|
236,721
|
| |
|
Total liabilities
|
|
4,245,440
|
1,949,525
|
| |
|
Shareholders equity
|
|
|
Paid-in capital
|
13
|
8,168,980
|
5,872,000
|
|
Revaluation reserve for premises and equipment
|
|
14,314
|
14,314
|
|
Retained earnings/(accumulated deficit)
|
14,23
|
475,770
|
(22,061)
|
| |
|
Total shareholders equity
|
|
8,659,064
|
5,864,253
|
| |
|
Total liabilities and shareholders equity
|
|
12,904,504
|
7,813,778
|
| |
|
Commitments and contingent liabilities
|
22
|
|
|
Statement of Income for the Year Ended
31 December
(Amounts are expressed in thousands of Azeri Manat)
| |
Note |
1999 |
1998 |
| |
|
Interest income on loans to customers |
|
875,633 |
636,791 |
|
Interest income on loans to banks |
|
26,283 |
6,155 |
|
Interest income on nostro accounts |
|
17,433 |
19,250 |
|
|
|
Total interest income |
|
919,349 |
662,196 |
|
|
|
Interest expenses on customer accounts |
|
(15,574) |
(88,047) |
|
Interest expenses on due to banks and other funds borrowed |
|
(177,421) |
(33,108) |
|
|
|
Total interest expenses |
|
(192,995) |
(121,155) |
|
|
|
Net interest income |
|
726,354 |
541,041 |
|
|
|
Provision for impairment on loans to banks |
5 |
(86,650) |
(28,419) |
|
Provision for impairment on loans to customers |
6 |
(237,289) |
(52,731) |
| |
|
Net interest income after provision for impairment on loans |
|
402,415 |
459,891 |
|
|
|
Foreign currency translation and net gains from dealing in foreign
currency |
|
996,527 |
465,984 |
|
Gain from dealing in securities |
|
- |
10,075 |
|
Fee and commission income |
15 |
1,208,433
|
1,386,470
|
|
Fee and commission expenses |
16 |
(1,012,362) |
(372,114) |
|
|
|
Operating income |
|
1,595,013 |
1,950,306 |
|
|
|
Staff costs |
|
(116,355) |
(142,939) |
|
General, administrative and other operating expenses |
17 |
(861,180) |
(939,653) |
| |
|
Profit before taxation |
|
617,478 |
867,714 |
|
|
|
Taxation |
18 |
(103,912) |
(302,889) |
|
|
|
Net profit |
|
513,566 |
564,825 |
|
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