In the Notes of Financial Statements Due to the High Numbers of Items in Some Accounts, Some Items of Each Note Have Been Reported Under the Heading of “Others”
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IN THE NAME OF GOD Annual Report 2019 Annual Report 2019 1 2 Annual Report 2019 Contents PART One EN Bank Overview ............................................................................................................ 05 CEO’s Message .................................................................................................................... 06 Financial Highlights ............................................................................................................. 08 EN Bank at a Glance ............................................................................................................. 11 Background ......................................................................................................................... 14 Honors and Distinctions ...................................................................................................... 15 Strategy & Strategic Objectives ........................................................................................... 16 Introducing our 2020 Business Updates .............................................................................. 16 Composition of Shareholders .............................................................................................. 18 Board of Directors ............................................................................................................... 19 Executive Board Members ................................................................................................... 22 Position in the Industry ..................................................................................................... 23 Business Profile ................................................................................................................. 25 Retail Banking ..................................................................................................................... 26 Corporate Banking .............................................................................................................. 26 Electronic Banking .............................................................................................................. 27 International Banking .......................................................................................................... 28 Corporate Governance ..................................................................................................... 30 Internal Control & Audit ...................................................................................................... 30 Bank’s Risk Analysis Report ................................................................................................. 31 Human Resource and Training ............................................................................................. 34 Corporate Social Responsibilities .................................................................................... 37 Part Two Auditor’s Opinion and Financial Statements ................................................................... 41 Annual Report 2019 Financial Statements and Notes ....................................................................................... 49 3 4 Annual Report 2019 PART One EN Bank Overview Annual Report 2019 5 6 Annual Report 2019 Mr. Alireza Bolgouri CEO CEO’s Message To the 2020 General Meeting, To our shareholders and clients, To my teammates, To leaders and partners in the communities we serve across Iran. I am pleased to share the 2019-20 Bank Eghtesad Novin's Annual Report with you. In this report, my teammates and I share highlights of the progress our bank made during the year, which capped off a decade of growth for our bank and for Iran's banking industry. Bank Eghtesad Novin pursues a new guideline for its operation and accomplishing its goals through defining new business strategies. In this regard choosing proper goals, which require an improvement of business infrastructures, including financial structures is our bank's priority. The board of directors' briefing report for capital increase through reevaluation of assets and shareholders' cash deposits was provided. To improve the existing internal and external control systems and rules recommended by the Central Bank of Islamic Republic of Iran, Securities and Stock Exchange Organization, our internal auditing committee restructured itself with the mission of acting as service provider not only to the management but also to the organization as a whole. Due to the 132% increase in capital, we hope that this growth continues in order to strengthen bank's financial stability and future growth and development. We are extremely proud that the bank's proper performance and financial clarity in issued reports for the stock market lead to a welcoming and impressive reaction from the market which resulted in a 567% growth of stock value since March 20, 2019 to the date. Another underscored approach of the board of directors through the year ending March 19, 2020, was emphasis on professional banking standards, aiming to focus on banking operations and financial intermediation via selling of about IRR 10'000 billion non-banking investments and estate properties. In addition, Necessary measures have been taken to accept and offer a portion of the shares of the subsidiary companies, including Eghtesad Novin leasing companies and Pardakht Novin Aryan in the capital market. As in the past, the bank remained committed to its social responsibilities. In response to the trust of the respected shareholders and fulfilling our mission to maximize profitability for them, business enterprises and large corporations also have a moral obligation to serve society at large and local communities, from which we emerge and thrive. We allocate a considerable portion of our resources towards fulfilling our role as a socially responsible bank. In support of educational purposes, six schools have been constructed in underprivileged regions of the country and in support of Covid-19 patients; a portion of the needed medical equipment for Imam Khomeini Hospital has been purchased and dedicated to the said hospitals. I hope you will enjoy reading about your bank in the following pages, where you can look at how we are helping make financial lives better through every connection. There are factors beyond our control that affect the markets and economies in which we operate but we continue to use our operational excellence work to drive operational risk out of the bank. Despite headwinds that may arise from time to time, over the last decade we have built a strong, stable platform, with significant liquidity and capital, and we will remain resilient as we maintain disciplined focus on what we can control, which is embedded in delivering Responsible Growth. As we look ahead to 2020 and beyond, we will maintain our focus on delivering Responsible Growth through disciplined adherence to the tenets I have discussed: by serving our clients, managing risk well and ensuring those results are sustainable through operational excellence, being a great place to work for our teammates, and sharing our success. The strategy that our board of directors reviewed in 2019 is based on continued adherence to this approach. Sincerely Yours, Kind regards, Alireza Bolgouri CEO. Annual Report 2019 7 8 Financial Highlights The Following Table Represent Financial High Lights of EN Group for the Fiscal Year Ended Annual Report 2019 March 19, 2020: Ended Ended Ended A) Financial Performance Information of Fiscal Year - Million IRR March 19, 2020 March 20, 2019 March 20, 2018 Mutual Income from Granted Loans 31,901,918 35,712,160 44,530,305 Other Mutual Incomes 10,951,778 4,916,065 1,677,960 Non-Mutual Income 21,498,494 16,108,462 13,070,422 Total of Income 64,352,190 56,736,687 59,278,688 On Account Profit of Deposits - IRR and Foreign Currency (51,732,810) (47,153,514) (51,498,910) Cash from Operational Activities (22,471,654) 43,625,712 (26,687,177) Net Profit (Loss) 1,049,123 (1,155,726) (1,263,128) Net Profit (Loss) of Parent Company's Shareholders 865,592 (1,257,779) (1,334,520) Net Profit (Loss) of Shareholders Without Control 183,532 102,052 71,392 Retained Profit (Loss) (6,182,775) (6,849,234) (4,100,276) B) Financial Balance at the end of Period - Million IRR Total of Assets 651,365,404 469,380,231 425,631,331 Total of Liabilities (Including Investment Depositors' Equity) 604,655,750 452,045,454 406,673,269 Total of Shareholders' Equity (Including equity of Shareholders without 46,709,654 17,334,777 18,958,062 Control) C) Return Rate - % Return Rate of Assets 0.19% (0.26%) (0.29%) Return Rate of Shareholders' Equity 3.28% (6.37%) (6.37%) D) Information per Share No. of Share at the Time of General Meeting 13,131,000,000 13,131,000,000 13,131,000,000 Profit (Loss) per Share - IRR 66 (96) (102) E) Other Information Number of Employees at the End of the Year 4,246 4,379 4,433 Number of Subsidiary Companies 13 13 13 Number of Affiliated Companies 3 4 4 The Following Table Represent Financial High Lights of EN Bank for the Fiscal Year Ended March 19, 2020: Ended Ended Ended A) Financial Performance Information of Fiscal Year - Million IRR March 19, 2020 March 20, 2019 March 20, 2018 Mutual Income from Granted Loans 31,440,800 35,787,926 44,638,715 Other Mutual Incomes 12,939,857 5,985,371 3,559,828 Non-Mutual Income 20,547,089 15,028,341 11,984,335 Total Income of the Bank 64,927,745 56,801,638 60,182,878 On Account Profit of Deposits - IRR and Foreign Currency (51,829,438) (47,230,683) (51,567,982)