Risk Committee Report Safeguarding shareholder value Tamaz Georgadze Chairman of the Risk Committee Dear Shareholders, I begin my first report as Chairman of the Risk Committee Further detail of the Risk Committee’s work in 2018 by paying tribute to the work of colleagues of the Group. is set out in the following report. It has been a year of significant change, but throughout it all the business has continued to target effective Tamaz Georgadze risk management as a means of ensuring there is Chairman of the Risk Committee a sound underpinning to the achievement of our 27 March 2019 strategic objectives. An overview of our risk management framework During the year, we have seen a further move towards is set out on pages 48 to 59. more responsible and prudent lending in a previously more liberal, unregulated consumer finance landscape A description of principal risks and uncertainties, in Georgia, with guidelines introduced by our regulator, in addition to recent trends and outlook, as well as the National Bank of Georgia, coming into force earlier mitigation efforts can be found on pages 60 to 67. in 2018 and at the start of 2019. We have adapted well to the changing landscape and the Risk Committee has maintained a keen focus on ensuring that the consequent changes to our loan profile do not expose us to unnecessary risk. We recognise that there are challenges in the global macroeconomic environment. The potential implications on the Georgian economy, and the consequent impact upon the Group, are areas of focus for us during 2019. Related to this, and in line with the requirements of the UK Corporate Governance Code, we intend to do more to consider emerging risks and undertake more forward- looking work. 126 Annual Report 2018Bank of Georgia Group PLC