Independent auditor’s report to the members of Bank of Georgia Group PLC continued Conclusions relating to principal risks, going concern and viability statement We have nothing to report in respect of the following information in the annual report, in relation to which the ISAs (UK) require us to report to you whether we have anything material to add or draw attention to: •the disclosures in the Annual Report set out on pages 60 to 67 that describe the principal risks and explain how they are being managed or mitigated; •the Directors’ confirmation set out on page 124 in the Annual Report that they have carried out a robust assessment of the principal risks facing the entity, including those that would threaten its business model, future performance, solvency or liquidity; •the Directors’ statement set out on page 178 in the financial statements about whether they considered it appropriate to adopt the going concern basis of accounting in preparing them, and their identification of any material uncertainties to the entity’s ability to continue to do so over a period of at least 12 months from the date of approval of the financial statements; •whether the Directors’ statement relating to going concern required under the Listing Rules in accordance with Listing Rule 9.8.6R(3) is materially inconsistent with our knowledge obtained in the audit; or •the Directors’ explanation set out on page 69 in the Annual Report as to how they have assessed the prospects of the entity, over what period they have done so and why they consider that period to be appropriate, and their statement as to whether they have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions. Overview of our audit approach Key audit matters • Allowance for expected credit loss • Revenue recognition • Valuation of investment property Audit scope We performed an audit of the complete financial information of three components and audit procedures on specific balances for a further one component. The components where we performed full or specific audit procedures accounted for 99% of Profit before non-recurring items and tax, 94% of Revenue and 94% of Total assets. Materiality Overall Group materiality of GEL20 million which represents 4% of pre-tax profit adjusted for non-recurring items. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. There have been no changes in the key audit matters compared to 2017, but the relative significance of each of them has changed as a result of the demerger and the introduction of IFRS 9, as indicated in the relevant sections below. 156 Annual Report 2018Bank of Georgia Group PLC