Consolidated Financial Report.pdf

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Consolidated Financial Statements

The consolidated financial statements of JSC Bank Qartu (the "Bank") and its subsidiaries (the "Group") for the year ended December 31, 2011, have been prepared in accordance with International Financial Reporting Standards (IFRS).

Accounting Policies

The Group's accounting policies are based on the principles of fairness, transparency, and consistency. The financial statements have been prepared using the historical cost convention, except for certain financial instruments that are measured at fair value.

Audit Report

The audit report states that the consolidated financial statements present a true and fair view of the Group's financial position, performance, and cash flows for the year ended December 31, 2011. The auditors have conducted their audit in accordance with International Standards on Auditing (ISAs) and have found that the financial statements are free from material misstatements.

Financial Highlights

The Group's financial highlights for the year ended December 31, 2011, include:

Total assets: GEL 65,165 million (2010: GEL 63,342 million)
Total liabilities: GEL 25,803 million (2010: GEL 27,223 million)
Net profit: GEL 1,543 million (2010: GEL 42 million)
Return on assets (ROA): 2.37% (2010: 0.07%)
Return on equity (ROE): 11.41% (2010: 0.42%)

Segment Reporting

The Group's segment reporting discloses the financial performance of its main business segments, including:

Corporate banking
Retail banking
Investment banking
* Other operations

Risk Management

The Group has a risk management system in place to identify, assess, and mitigate risks associated with its operations. The system includes risk management policies, procedures, and controls to ensure that risks are properly managed and monitored.

Going Concern

The Group's management believes that the consolidated financial statements have been prepared on a going concern basis, as the Group has sufficient resources to continue its operations for the foreseeable future.

Signature

The consolidated financial statements have been approved by the Bank's management and signed by the General Director, Nodar Javaxishvili, and the Chief Financial Officer, Manana Nadiradze, on May 7, 2012.