Independent auditor’s report to the members of Bank of Georgia Group PLC continued An overview of the scope of our audit Tailoring the scope Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality determine our audit scope for each entity within the Group. Taken together, this enables us to form an opinion on the financial statements. We take into account size, risk profile, the organisation of the Group and effectiveness of Group-wide controls, changes in the business environment and other factors such as recent Internal Audit findings when assessing the level of work to be performed at each entity. In assessing the risk of material misstatement to the Group financial statements, and to ensure we had adequate quantitative coverage of significant accounts in the financial statements, of the 22 reporting components of the Group (pre-Demerger: 33), we selected four components covering entities within the UK and Georgia, which represent the principal business units within the Group. Of the four components selected, we performed an audit of the complete financial information of three components (“full scope components”) which were selected based on their size or risk characteristics. For the remaining one component (“specific scope component”), we performed audit procedures on specific account balances within that component that we considered had the potential for the greatest impact on the significant accounts in the financial statements either because of the size of these accounts or their risk profile. The reporting components where we performed audit procedures accounted for 99% (2017: 98%) of the Group’s Profit before non-recurring items and tax, 94% (2017: 91%) of the Group’s Revenue and 94% (2017: 96%) of the Group’s Total assets, all benchmarks related to continuing operations. The table below illustrates the coverage obtained from the work we performed: 2018 2017 No. Revenue Profit4 Total assets No. Revenue Profit4Total assets Full scope1 3 94% 99% 93% 5 88% 93% 94% Specific scope2 1 0% 0% 1% 1 3% 5% 2% Full and specific scope coverage 4 94% 99% 94% 6 91% 98% 96% Remaining components3 18 6% 1% 6% 24 9% 2% 4% Total reporting components 22 100% 100% 100% 30 100% 100% 100% 1.We audited the complete financial information. 2.We audited specific account balances within these components. The audit scope of these components may not have included testing of all significant accounts of the components but will have contributed to the coverage of significant accounts tested for the Group. 3.We performed other procedures, including analytical review and testing of consolidation journal entries and intercompany eliminations to respond to any potential risks of material misstatement to the Group financial statements. 4.Profit from continuing operations before non-recurring items and tax. The components for which we performed full or specific scope procedures are set out below: Component Scope Location/team Bank of Georgia Group PLC Full London/primary team BGEO Group Limited Full London/primary team JSC Bank of Georgia Full Georgia/primary team JSC BGEO Group Specific Georgia/primary team Changes from the prior year For the year ended 31 December 2018, we changed the scope for JSC BGEO Group from full scope to specific scope because of the decrease in the size and risk characteristics of this component and we have removed from scope the components that have been transferred out of the Group as a result of the Demerger of Banking and Investment Businesses of the Group in May 2018. We have specifically verified that the profit and total comprehensive income from their operations together with the results of the Demerger have been properly presented in lines ‘Profit from discontinued operations’ in the consolidated income statement and ‘Total comprehensive income for the year from discontinued operations’ in the consolidated statement of comprehensive income, respectively. 160 Annual Report 2018Bank of Georgia Group PLC