Annual Report 2019/20
Saman Bank in 2019/20
4 Statement of the Board and the CEO
7 Key Figures
8 About Saman Bank
10 Corporate Governance
15 Senior Executive Team
16 Division Heads
16 Independent Audit
17 Saman Financial Group
20 Saman’s position in the Securities and Exchange Organisation
20 The Bank’s Legal Environment
22 An Overview of Saman’s Group Consolidated Operational and Financial Performances
27 Resource and Expense Analysis
30 Major Achievements of the Bank in Different Areas
42 Human Capital
46 Organisational Structure
47 Major Accolades and Achievements of Saman Bank in 2019/20
48 Plans and Projects for 2020/21
Financial Report
50 Independent Auditors and Legal Inspectors Reports
54 Group Consolidated Financial Statements
60 Saman Bank (PJSC) Financial Statements
66 Explanatory Notes
Saman Bank in 2019/20 performance of the government as well as private sector directly. Aforementioned facts only partly reflect the economically complicated situation of the country in 2019/20. This severe condition is the result of maximum pressure policy of the United States and hostile sanctions on Iran. Fortunately, the CBI was able to partly control and alleviate the pressure by adopting efficient policies. The main pillars of the 2019/20 Strategy Considering the factors affecting the economy in 2019/20 and the fact that strategic plan of Saman bank had been formerly developed and circulated to all business units of the bank in the form of 5- year plan named Saman 2021, all our planning and supervising efforts were focused on ensuring adaptability of the goals set in the said strategic plan under the current economic conditions and adopting appropriate policies to move toward those goals. Based on this strategy, despite all unfavorable conditions, operation units of the bank achieved all of the defined goals by the end of the year. The outcome would have undoubtedly been much more conspicuous in the absence of stagflation the Iranian economy suffered throughout the year. However based on Saman 2021 strategic plan and in line with optimization of operational procedures, we tried to reduce executive costs and succeeded despite high inflation. Additionally, in view of devaluation of Iranian Rials against other currencies, we tried to get more active in international transactions and currency operations for export companies. As a result, succeeded to retain its 20 percent share of the whole currency operations of the country, mainly through the support of two vital sectors of food and drug. In pursuit of bigger goals with Saman 2021 Saman 2021 as the fundamental and strategic plan of the Board includes different dimensions and approaches. Implementing all its prerequisites while optimizing the bank's performance during the years of its implementation will bring us to a higher position and standard in 2021 where redundant and unprofitable processes will be eliminated and the operations of all departments of the bank will be on the path to profitability. Statement of the Board and the CEO Accordingly, with the implementation of new processes and the necessary software and hardware infrastructure, the debt collection structure of the bank has improved and accelerated. In the executive operations of the bank, by increasing the capacity of electronic banking services, we managed to reduce unnecessary visits to branches to save time for creating sales opportunities. Respected shareholders and supporters of Saman Bank According to the plans implemented so far, Saman 2021 has paved the way for good results in the bank and the Iranian economy experienced a different transition period in 2019/20 compared to the previous year. As an cost of money in Saman Bank has decreased from 13.41 to 12 percent. Also, the effective rate of our lending active player, Saman bank was consequently affected by the economic conditions of the year. It is no secret that has increased from 15.6 to 15.9 percent, both of which have positively contributed to the bank's profitability and development of banking is only possible in an economically stable and dynamic environment. As the key indexes of shareholders' dividends. Iran’s economy reveal, the country has not experienced stability in 2019/20.Thus the banking system and Saman bank had to undergo some adjustments and changes in order to be in compliance with the new conditions and Saman Bank's position in the area of currency exchange pursue its ideals. The coming report details the most important measures and achievements as well as outlines Planning, follow-up and policies of the board of directors in recent years have placed name of Saman Bank among of the forthcoming strategies adopted to overcome the mentioned conditions and maintain profitability of the bank the leading and outstanding banks in the field of currency exchange and international banking. This is influenced and the interests of the esteemed shareholders. by our food and drug strategic policy, and in spite of all sanctions, we are one Iranian economy in the past year of the few banks operating in the three international currency transfer platforms of the humanitarian channel in Switzerland, INSTEX and South Korea, and this shows the credibility and internationally-recognized position of Whilst the enactment of JCPOA in 2018 brought sparks of hope for Iran’s economy, the return and increase Saman Bank. of more hostile sanctions in 2019 adversely affected the economy through different factors and- directly and indirectly-overshadowed the performance of the banking system. Therefore, it was essential to pay special Highest international standards in compliance and anti- money-laundering attention to those factors in development of strategies and adjustment of the goals to reach practical, logical and achievable results. The key economic factors can be summarized as below: Despite the restrictions on employment of international consultants in auditing, compliance and anti-money-laundering, we have constantly tried to comply with the latest international regulations and laws in Inflation: According to Central Bank of Islamic Republic of Iran, inflation rate during last year was 41.2 Percentage the said fields. Besides we are still interacting and cooperating with our correspondent banks network and have of which affected many of the bank’s development programs. maintained our leadership position in this area. Liquidity growth: Statistics show 34percent liquidity growth in the last year. This increase reflects country’s exceptional conditions compared to the previous years. We are looking to increase the bank's capital Currency Rate: Studies on the significant increase of exchange rates for major currencies such as Euro and Rise of currency values and inflation have increased the need of our borrowers for working capital, and due to the Dollar during the period between the ends of 2018/19 to the end of 2019/20 show the huge impact of exchange rate limits set for maximum lending to each borrower, the board is seriously pursuing capital increase. To this end, fluctuations on the Iranian economy as well as the foreign currency operations of banks in the field of commerce. efforts were directed toward capital increase last year and the auditor’s report on this matter was submitted to the CBI. In early 2020, the CBI issued the license to increase the bank's capital. Pursuant to this license, we started Budget deficit: The government faced a significant budget deficit in 2019/20 resulting in adjustment of many corresponding and negotiating with the Securities and Exchange Organization to obtain the necessary license and macroeconomic components. are actively following up with our application. COVID-19: Alongside all predictable, analyzable and measurable economic factors, at the end of 2019/20, the world faced the new and unexpected phenomenon of COVID-19 which undoubtedly affected economic
4 Annual Report 5 We will keep pace with market developments One of the serious plans of the board is to monitor the developments and needs of the market and take appropriate measures to keep the bank in line with these developments. Accordingly, one of the key approvals of the board in 2019 was to launch a digital bank. Digital Bank development started in September 2019 and will revolutionize electronic banking services especially in retail banking thus enabling us to focus more on corporate banking and private banking. Coronavirus and Saman’s programs COVID-19 has certainly troubled the whole world. Its destructive effects on our economy are undeniable. Every country has allocated a budget to deal with this crisis according to their capabilities. Likewise, the government of Iran has allocated a budget to control the economic impact of the coronavirus. Saman bank also has done their best to provide lending to the industries and business most affected by the pandemic from the credits allocated by the CBI. Additionally, according to scientific news and guidelines published by the World Health Organization, this virus will continue to survive in 2020/2021 as well and we therefore have proper planning in place to deal with this issue. We are strengthening our electronic infrastructure and modify our branches in a manner to minimize disruption caused by the pandemic. One of the important measures during the pandemic was Saman Bank’s support for the research project on the use of blood plasma in treatment of COVID-19 patients. We also sought to support job retention by providing fast loans to large corporations in transportation and tourism industry which were badly hit by the pandemic. Our serious plan to operate in the capital market One of the advantages of the current conditions in 2019 and 2020 was the capital market boom. Having anticipating these conditions, we first increased our share in Saman Brokerage and secondly invested in a start-up company Key Figures in order to use its Fintech Platform in wealth management and provision of capital market services to our customers. Among other strategies of Saman Bank to exploit the capital market boom is to publicize owned companies in (Adjusted)
Stock Exchange Organization. Following the successful offering of part of the shares of Saman Electronic Payment 2019/20 2018/19 2017/18 (SEP) Company, we are now undertaking necessary measures to offer Kardan Investment Bank’s share in the Consolidated Bank Consolidated Bank Consolidated Bank Stock Exchange. Key performance indicators IRR billion We remain favored bank of the nation during the year Net revenue from lending and (8,306) (8,307) (10,171) (10,209) (14,183) (14,243) Saman bank participated in a survey for election of popular bank in 2019/2020, in which more than 140,000 deposits customers of Iranian banking system took part. We successfully won the title of the most popular bank in Iran. Net revenue from fees and (19) (99) (39) (94) (248) (311) This accomplishment is highly important and valuable for us because the survey was conducted at national level charges by direct vote of customers. It certainly makes our responsibility to maintain this position greater and heavier. Total operating revenues 4,587 3,255 2,553 1,779 (2,492) (2,766) We are the 22nd top company in Iran Net profit(loss) 1,912 2,152 4,518 4,343 122 318 Key items in balance sheet IRR billion According to the annual evaluation of the Industrial Management Organization of Iran, which is measured by sales Lending and claims 226,162 226,870 168,278 168,674 136,641 137,137 indicators, Saman Bank succeeded in obtaining the 22nd rank among the top 500 companies in Iran in 2019/2020. Total assets 552,736 554,591 483,996 480,649 308,386 309,418 This rank is important because it can show a clear picture of Saman Bank's position in the Iranian economy. A position that we will strive to maintain and improve in the coming years. Total deposits 73,118 72,860 66,203 65,532 26,455 26,399 Total debts 143,045 138,287 173,507 167,119 46,690 44,625 Dear shareholders and constant companions of Saman Bank, the mentioned achievements are the result of valuable and unwavering support and encouragement of each of you for the strategies of the Board of Directors Investors' equity 392,021 397,483 297,043 298,776 253,176 254,382 and the actions of Saman's hard-working staff at all levels. At Saman Board of Directors, we hope to achieve more Paid capital 8,000 8,000 8,000 8,000 8,000 8,000 with the excellent infrastructure and programs envisaged and with anticipated positive trends in national economy. Shareholders' equity 17,670 18,822 13,447 14,754 8,520 10,411 Return Rate Percentage Board of Directors Return on Asset 0.37 0.42 1.14 1.10 0.04 0.11 Return on Net Worth(ROE) 12.29 12.82 41.14 34.52 1.35 2.95 Performance per share Number of shares 8,000,000,000 8,000,000,000 8,000,000,000 8,000,000,000 8,000,000,000 8,000,000,000 Basic earnings per share IRR 249 269 560 543 9 42 Diluted earnings per shar IRR 249 269 560 543 9 42 Other information Personnel Person 3219 2491 3271 2491 3215 2419 Number of branches - 136 - 136 - 136
6 Annual Report 7 Capital The capital of Saman Bank at the beginning of its establishment was IRR 200 billion (including 200 million shares with a nominal value of IRR 1000 per share) which has been increased in several stages as follows:
Date of capital increase Increase New capital Source of increase Percentage IRR billion 29/08/2002 0 200 Liquidated claims and shareholders' equity 27/11/2003 10 220 Liquidated claims and shareholders' equity 14/10/2004 36.4 300 Shareholders' equity 7/3/2005 100 600 Liquidated claims and shareholders' equity 16/11/2005 25 750 Liquidated claims and shareholders' equity 8/10/2006 20 900 Liquidated claims and shareholders' equity 13/01/2010 100 1800 Liquidated calims & shareholders' equity & denying rights of preference 20/03/2011 66.7 3000 Liquidated claims and shareholders' equity 19/03/2012 33.3 4000 Shareholders' equity 21/10/2012 64.7 6588 Surplus of assets revaluation 9/3/2016 21 8000 Shareholders' equity and accumulated profit
Shareholder structure The major shareholders of Saman Bank at the end of 2019/20 are shown in the table below:
About Saman Bank Shareholder 19/3/2020 Number of Shares Percentage One percent and above Saman Investment Development Company (Private Joint-Stock) 711,999,995 9 The official activity of Saman Bank as the first credit institution with a license from the Central Bank of the Saman Insurance company (Private Joint-Stock) 513,714,785 6 Islamic Republic of Iran and with an initial capital of IRR 11 billion under name of "Saman Eghtesad" started on Steel Industries Pension Fund 400,088,117 5 2 September 1999. The bank is commercially registered under 154444 with the Corporate and Non-commercial Ofogh Kourosh chain stores (Public joint stock) 200,000,000 3 Entities Register. Pakshoo Industrial Group (Public joint stock) 200,000,000 3 In September 2002, Saman Eghtesad Credit Institution started a new period of its life as a private bank by providing Kouroch Food Industry Company (Public joint stock) 160,000,000 2 the necessary capital and obtaining the necessary license from CBI to perform and provide banking services. Sam Electronics 79,800,000 1 Pumpiran Holding 148,080,232 2 Other individual shareholders ( above 1%) 1,111,503,036 14 Scope of Activities Others (less than %1) Other corporate shareholders (103 shareholders) 825,444,871 10 The subject of the bank's activity is described in detail in Article 3 of the Articles of Association, the most important Other individual shareholders (1.936 shareholder) 3,649,368,964 46 of which is as follows: 8,000,000,000 100 • Opening and maintaining current loan and savings accounts and other similar accounts; Accepting short-term and long-term investment deposits and similar accounts and issuing investment • The composition of shareholders in terms of their authenticity and legality is according to the table below: certificates; Granting credit facilities within the framework of the law, regulations and executive instructions of the law • 19/3/2020 20/3/2019 on interest-free banking operations; Number of Number of Number of Number of Percentage Percentage • Carrying out authorized foreign exchange transactions and transferring funds inside and outside the Shareholders Shares Shareholders Shares country; Individual 8200 4,818,971,897 60 8285 4,891,956,208 61 • Opening and notifying credits, including letters of credits and issuing various types of guarantees; Corporate 88 3,181,028,103 40 77 3,108,043,792 39 • Issuance of credentials and all types of checks; 8288 8,000,000,000 100 8362 8,000,000,000 100 • Issuance and sale of participation bonds; • Partnership and investment; • Providing a variety of payment tools and electronic banking services. Carrying out other banking and commercial operations and transactions in accordance with laws and regulations Individual Corporate that are not prohibited for banks. 60% 40%
8 Annual Report 9 Corporate Governance
Board of Directors
Ahmad Mojtahed, Chairman A former Head of the Monetary and Banking Research Academy (MBRA) and Advisor to the Governor of the Central Bank of Iran and to the Minister Hossein Ghazavi, Member of Economic Affairs and Finance, Dr. Mojtahed joined Saman in March 2010 Mr. Ghazavi has served as a Member of the board at the Export as Vice President of Planning and Development as well as Chairman of the Development Bank of Iran and a Member of the Executive Board of the Board of the Iranian Credit Bureau and Credit Scoring Company. He was Central Bank of the Islamic Republic of Iran. He joined Saman as a member elected Chairman of Saman Bank’s Board of Directors in September 2012, of the Risk Committee on 12 January 2019. Mr. Ghazavi holds a PhD in serving as the Vice Chairman since March 2014, and is currently serving as Strategic Defence Science from Supreme National Defence University. the Chairman. With a PhD in Economics from Iowa State University, USA, Dr. Mojtahed also maintains a successful academic career as a researcher and professor at Allameh Tabatabaei University.
11
Bahram Fathali, Vice Chairman Ali Ne’mati, Member A former VP Investment, board member, and advisor of Keshavarzi Bank, Mr. Ne’mati has worked with Saman since 22 August 2012 in different Mr. Fathali served as board member in Parsian and Eghtesad Novin banks positions, including Advisor to the CEO, Member of the Audit Committee, before joining Saman on 12 January 2019. He serves as a member of the and Member of Wholesale Credit Committee. He has a record of Risk Committee, member of the Human Resources Committee, and Head membership in several committees and assemblies of Post Bank Iran. Mr. of the Audit Committee in Saman. Mr. Fathali holds a master’s degree in Ne’mati holds a master’s degree in State Management from the Institute Accounting from the UK. for Management and Planning Studies.
Farideh Geraminejad, Member Before joining the board, Ms. Geraminejad served as Saman’s International Banking Director. She worked at Tejarat Bank from 1977 to 2009 where her latest position was the Head of Treasury and Correspondent Relations. Ms. Geraminejad holds a bachelor’s degree in General Linguistics from the University of Tehran.
10 11 Annual Report 11 Information on the number of board meetings and the presence of members in the meetings During the financial year 2019/20, the Board met 68 times (minimum one meeting per week) and adopted decisions on major issues within the bank.
Executive Compensation • The Board of Directors approves the CEO’s salary, benefits, and bonuses. • The reward of the board of directors is also paid in annual ordinary general assembly of the bank observing provisions of the Commercial Law. This amount was approved in the ordinary general assembly of the fiscal year ending in February 2020 on gross basis in amount of 3 percentage of cash profit equivalent to Rls(m). 5,040. Board Committees
Strategy and Budget Committee Members of the Committee: Two members of the Board, Senior Advisor to the Board, CEO or Deputy CEO, VP Finance and Planning, VP Banking and Marketing (to be invited when needed), VP Development and Infrastructure (to be invited when needed) Objectives of the Committee: To ensure the bank’s survival and profitability by aligning its organisational structure and strategies with its desired status and its objectives, mission, and vision. Secretary of the Committee: Deputy CEO
Audit Committee Members of the Committee: Vice Chairman of the Board, CEO, Deputy CEO (non-voting), four advisors to the Board in internal auditing Objectives of the Committee: To help the Board oversee the efficiency of the internal control system, financial reporting processes, and proper functioning of accounting systems and financial controls to ensure accurate and comprehensive financial statements, as well as full compliance with relevant laws and regulations, supervisory requirements, and the bank’s policies. Secretary of the Committee: Director of Internal Audit and Control
Risk Committee Members of the Committee: Two members of the Board (Vice Chairman and one non-executive member), CEO, Deputy CEO, Risk Advisor to the Board Objectives of Committee: To oversee the risk management policies and processes are all up-to-date and correctly observed, to supervise the implementation of policies and directives adopted by the Committee and the Board, to ensure a desirable capital adequacy ratio is maintained, and to adopt necessary measures to preserve and improve the bank’s reputation. Secretary of the Committee: Director of Risk Unit
Human Capital Committee Members of the Committee: One representative of the Board, Vice Chairman of the Board, one member of the Board, CEO, Deputy CEO Objectives of Committee: To plan for recruitment, development, training, and maintenance of human capital in order to create sustainable value toward the fulfilment of the bank’s objectives and policies. Secretary of the Committee: Human Resources Director
12 Annual Report 13 Senior Executive Team
Alireza Marefat: CEO Mr. Alireza Marefat was appointed Deputy CEO in February 2018. His former positions at Saman include VP Lending, Deputy Director and Director of Corporate Banking, Head of High-Net-Worth Client Credit Scoring, Deputy Director of SME Lending Support, and deputy branch manager. Mr Marefat holds an MBA from Multimedia University in Malaysia.
Reza Isfandyari: VP Legal Mr. Isfandyari has held the position of Executive VP Legal since August 2013. Formerly, he served as Legal Advisor to the CEO of Saman Bank. Mr Isfandyari holds a Master’s Degree in Private Law.
Mansour Momeni: VP Banking and Marketing Mr. Mansour Momeni was appointed VP Banking and Marketing in January 2018. He has worked at Saman for many years and has held different managerial positions, including Director of Public Relations and Customer Care, Deputy Director of Public Relations and Customer Development, Deputy Director of Retail Banking, and Head of Electronic Banking Branch. Mr Momeni holds a Bachelor’s Degree in Chemistry from Arak University.
Information Technology and Security Committee Ehsan Torkaman: VP Finance and Planning Members of the Committee: One representative of the Board, CEO, Deputy CEO, Board’s Advisor in Mr. Ehsan Torkaman was appointed VP Finance and Planning in November 2019. He worked formerly as Information Technology, VP Development and Infrastructure, and VP Banking and Marketing Financial Director of Saman and Financial Deputy Director/Financial Director of Saman Electronic Payment Company. Objectives of Committee: To align the bank’s objectives with new advancements in information technology, to ensure Saman’s competitive advantage through concentrated decision-making, and to improve the speed of responding to stakeholders’ demands by adopting correct IT policies. To achieve sustainable cybersecurity in critical infrastructures under the business continuity plan and to minimise the Ghasemian Yadegari: VP Monitoring effect of crises and cyber threats on the bank’s infrastructure Mr. Ghasemian Yadegari was appointed VP Control in August 2018. He has a master's degree in industrial Secretary of the Committee: Information Technology Director management- operations research from Azad University- Central Tehran.
Compliance Committee of Saman Financial Group Members of the Committee: Two members of the Board, CEO, Deputy CEO, VP Control, Compliance and AML Director and as the case may warrant, Compliance and AML directors of Saman Financial Group companies Objectives of the Committee: To support strategic goals of Saman Financial Group by advising and leading financial crime control and prevention initiatives, to supervise risks affiliated with identified non- compliance cases in anti-money-laundering, terrorism financing, sanctions, fraud, bribery, and corruption Secretary of the Committee: Compliance and AML Director
Compliance and Financial Crime Committee Members of the Committee: Two members of the Board, CEO, Deputy CEO, VP Control, Compliance and AML Director Objectives of the Committee: To manage financial crime risks at all levels in accordance with the financial crime-compliance plan and to manage risks affiliated with identified non-compliance cases in anti-money-laundering, terrorism financing, sanctions, fraud, bribery, and corruption Secretary of the Committee: Compliance and AML Director
14 Annual Report 15 Division Heads Saman Financial Group
Full Name Position Year Joined Saman Bank Percentage of Net Profit (Loss) Net Profit (Loss) Capital Bank's Ownership Manager of Training Department-research in 2019/20 in 2018/19 Davood souri 2015 (direct or indirect) institute of Academy IRR billion Percentage IRR billion IRR billion
Hamid Tahamtan Manager of Contracts & Legal Support 2014
Saman Exchange Office 219 96.46 304 260 Siamak Shahbazzadeh Khiyavi Manager of Inspection and Compliance 2004
Abbasmirza Nayyeri Manager of Electronic banking 2008 Hafez Saman Iranian 24 94.00 36 11 Accreditation Co. SeyedMorteza Hosseininezhad Manager of Marketing and Product Development 2004
Reza Shirin goharian Manager of Retail Credits 2002 Pardazeshgaran Saman 250 100 64 17
Farnood Hassani Manager of Public relations and customer’s voice 2007
Marziyeh Azizi Manager of Information Technology 2004 Saman Brokerage 50 75 139 75
Fereshteh Zarabiyeh Manager of Human Capital 2004
Mohammad Hassan Dolati Manager of Support 2004 Saman Financial & Economic 0 100 529 33 Development
Mohammad Farrokhipour Manager of Retail Banking 2003
Morrovat Ranjbar Manager of Corporate Banking 2004 Atiyeh Andisheh Sepehr Mehr 23 100 0.10 0.10
Gassem Sarkhosh Manager of Monitor & Audit unit 1999
Service Development of Atiyeh 20 98 521 186 Haleh Hosseinzadeh Manager of International Banking 2009 Andishan Sepehr Sjarg
Maryam Karbalayee Hosseini Financial Manager 2005
Adonis 400 24 43 28
Independent Audit Saman Bank general assembly always utilise the services of reputable, respected chartered accountants trusted by the Central Bank of Iran as independent auditors. Senior management fully appreciates the crucial role these Kish Cell Pars Co. 1200 60 (268) (281) professionals play in ensuring the credibility of Saman’s reputation and the elite standing of its operations. The bank’s Audit Committee strives to increase the reach and effectiveness of independent auditors, and it ensures that the bank’s financial statements present a fair and accurate picture of its performance. Saman Smart Financial In 2017/18, Saman Bank’s shareholders selected the chartered accountancy practice Azmoon Pardaz Iran 1 70 1 0 Mashhood as its independent auditor. Azmoon Pardaz Iran Mashhood is one of the leading professional auditing Solution Co. firms specialising in banking and insurance and is trusted by the Tehran Stock Exchange and the Central Bank of Iran. The practice provides professional auditing and advisory services in assurance, investment, and internal auditing.
16 Annual Report 17 Our Vision Saman’s vision on the horizon of 2018/19 to 2021/22 is as follows: • To serve as the first choice in Iranian banking for different groups of customers; • To operate as the first-choice correspondence banking partner for overseas banks; • To secure the highest value of foreign currency operations among privately owned banks; • To maintain the bank’s position as a first-choice employer for the most talented banking professionals. Our Mission Saman Bank strives to create real value for its customers and to encourage their loyalty through the consistent delivery of high-quality services that are defined by convenience, speed, and reliability. Saman’s core values within framework of our vision and in line with realization of our mission are summarized under following scopes: • Customer-centric culture; • Capable human capital; • Transparency; • Professionalism. Our Priorities • Sustainable growth and profitability based on a customer-centric structure; • Conversion of non-revenue-generating assets (non-current liabilities, repossessed properties, and surplus assets) to revenue-generating assets. Strategic Goals • To expand our touch point with customers and provide instant services; • To offer prompt 24/7 services through electronic channels; • To enhance our performance management system; • To reduce resource costs; • To sustainably grow current deposit accounts; • To sustainably grow revenue from commissions and fees; • To increase capital adequacy ratio; • To reduce noncurrent liabilities ratio. Strategic Directions of Saman toward Horizon 2021 • Sustainable profitability of the bank’s core business through innovation and new products for target customers; • Enhanced operational efficiency through simplification and specialisation of activities and procedures; • Improved organisational performance management system.
18 Annual Report 19 Saman’s position in the Securities and Exchange Organisation According to notification number 900-851 dated 16 November 2011 by Iran Fara Bourse, Saman was listed in the Banks and Credit Institutions group as the 49th stock symbol (29th company in the first market) and was assigned the stock symbol ‘Saman’. On 7 June 2013, Saman Bank’s listing was transferred to the main market of the Iran Stock Exchange as per IFB’s letter no. 91/03/3035.
The Bank’s Legal Environment The following laws and regulations are the most important rules governing Saman’s activities: • Commercial Code passed in 1932 and its subsequent amendments; • The Monetary and Banking Act of Iran ratified in 1972 and its subsequent amendments; • The Banking Regulations Act and its annex passed in 1979; • Law banning Bank Borrowers from leaving the Country passed in 1980; • The Law for Usury (Interest) Free Banking ratified in 1983; • The Law annexing two notes to Article 15 of the Law for Usury (Interest) Free Banking as amended in 1997; • The Law permitting the Establishment of Privately-Owned Banks passed in 2000; • E-Commerce Law passed on 25 January 2004; • The Law pertaining to Non-Regulated Money Markets passed in 2004; • Negotiable Instruments Market Law passed on 22 November 2005; • Law adjusting Bank Loan Interests to the Return Rate in Different Economic Sectors passed in 2006; • The Direct Taxation Act passed in 2015 and its subsequent amendments; • Law on Counter-Terrorist Financing adopted on 12 March 2016; • Law for Development of Production and National Financial System adopted on 12 May 2017; • The Cheques Act passed in 2003 and the revised Cheques Act passed in 2018; • The Anti-Money-Laundering Act passed in 2007, revised and re-circulated in 2018; • The By-Law on Enforcing Legally Binding Documents; • Article 34 of the Registration Act as amended; • By-laws and guidelines circulated by the Central Bank of Iran; • By-laws and guidelines circulated by the Securities and Exchange Organisation; • Supervision packages and policies of the CBI, which act as guidelines for the bank’s operations and other legal activities during the reported year; • General policies adopted under Article 44 of the Constitution; • Monetary and Banking Act; • Law requiring issuance of national identification number and postal code to all citizens; • Approvals by the Money and Credit Council; • Saman’s Articles of Association; • Supervision packages and policies and foreign currency regulations of the CBI, which act as guidelines for the bank’s operations and other legal activities during the reported year.
20 Annual Report 21 An Overview of Saman’s Group Consolidated Operational and Financial Performances
Consolidated Balance Sheet Items
19/3/2020 20/3/2019 20/3/2018
Percentage Percentage IRR billion Percentage Increase (decrease) IRR billion Percentage Increase (decrease) IRR billion compared with previous year compared with previous year
Assets Assets Cash balance 91,382 16.48 (38.54) Cash balance 148,682 30.93 304.59 36,749 Claims from banks & other credit Institutions 8,721 1.57 (12.39) Claims from banks & other credit Institutions 9,955 2.07 (6.85) 10,688 Granted loans & claims from natural persons 226,870 40.91 34.50 Granted loans & claims from natural persons 168,674 35.09 23.00 137,137 Investments in stock exchange & other securities 51,248 9.24 201.77 Investments in stock exchange & other securities 16,983 3.53 26.40 13,436 Claims from subsidiaries & dependent companies 5,202 0.94 114.23 Claims from subsidiaries & dependent companies 2,428 0.51 (17.90) 2,929 Other received accounts 66,547 12 26.30 Other received accounts 52,689 10.96 30.55 40,360 Tangible fixed asset 5,772 1.04 26.82 Tangible fixed asset 4,551 0.95 53.11 2,973 Intangible fixed asset 5,686 1.03 14.81 Intangible fixed asset 4,952 1.03 123.45 2,216 Legal deposit 49,042 8.84 37 Legal deposit 35,798 7.45 30.28 27,479 Other assets 44,119 7.96 22.77 Other assets 35,937 7.48 1.37 35,453 Total assets 554,591 100 15.38 Total assets 480,649 100 55.34 309,418 Debts Debts Debts to banks & other credit institutions 48,827 8.80 (46.87) Debts to banks & other credit institutions 91,897 19.12 919.46 9,014 Customer’s deposits 72,860 13.14 11.18 Customer’s deposits 65,532 13.63 148.23 26,399 Dividends payable 37 0.01 (28.28) Dividends payable 52 0.01 0 52 Reserves & other liabilities 15,284 2.76 75.84 Reserves & other liabilities 8,692 1.81 2.64 8,469 Reserve of employee end of service benefits 1,279 0.23 35.21 Reserve of employee end of service benefits 946 0.20 36.91 691 Total debt before owner’s investment equity 138,287 24.93 (17.25) Total debt before owner’s investment equity 167,119 34.77 274.49 44,626 Owner’s investment equity Owner’s investment equity Long term investment deposits 395,365 71.29 33.05 Long term investment deposits 297,164 61.83 17.82 252,217 Profit payable to long-term investment deposits 2,118 0.38 31.41 Profit payable to long-term investment deposits 1,612 0.34 (25.56) 2,165 Owner’s investment equity 397,483 71.67 33.04 Owner’s investment equity 298,776 62.16 17.45 254,382 Total debts 535,769 96.61 15.00 Total debts 465,895 62.50 55.81 299,008 Owner’s equity Owner’s equity Capital 8,000 1.44 0 Capital 8,000 1.66 0 8,000 Increased circulating capital 0 0 0 Increased circulating capital 0 0 0 0 Legal reserve 2,784 0.50 13.12 Legal reserve 2,461 0.51 45.67 1,698 Other reserves 3,528 0.64 0 Other reserves 3,528 0.73 0 0 Asset’s reevaluation excess 560 0.10 (3.73) Asset’s reevaluation excess 582 0.12 (5.43) 615 Retained earnings 3,950 0.71 2,050.58 Retained earnings 184 0.04 73.79 106 Total owner’s equity 18,822 3.39 27.57 Total owner’s equity 14,754 3.07 41.73 10,410 Total debts & owner’s equity 554,591 100 15.38 Total debts & owner’s equity 480,649 100 55.34 309,418
22 Annual Report 23 Profit & loss Statement
19/3/2020 20/3/2019 20/3/2018
Percentage Percentage IRR billion Percentage Increase (decrease) IRR billion Percentage Increase (decrease) IRR billion compared with previous year compared with previous year
Revenues Revenues Lending & deposit income 34,636 58.51 30 Lending & deposit income 26,643 51 36.07 19,580 Fee & commission income 2,997 5.06 25.28 Fee & commission income 2,392 4.62 45.80 1,641 Net investment profit 7,674 12.96 35.48 Net investment profit 5,664 10.93 (27.74) 7,839 Net foreign currency transaction profit 3,987 6.73 (37.86) Net foreign currency transaction profit 6,417 12.38 62.46 3,950 Other incomes 9,906 16.73 (7.52) Other incomes 10,712 20.67 (7.60) 9,955 Total incomes 59,200 100 14.22 Total incomes 51,828 100 20.63 42,964 Expenses Expenses Interest paid on deposits (42,943) 75.27 16.53 Interest paid on deposits (36,851) 77.61 8.95 (33,822) Fee & commission expenses (3,096) 5.43 24.56 Fee & commission expenses (2,486) 5.23 27.35 (1,952) General & administrative expenses (7,837) 13.74 20.47 General & administrative expenses (6,506) 13.70 26.40 (5,147) Doubtful dues expenses (2,500) 4.38 127.27 Doubtful dues expenses (1,100) 2.32 (8.33) (1,200) Financial expenses 0 0 0 Financial expenses 0 0 0 0 Depreciation (672) 1.18 23.97 Depreciation (542) 1.14 3.29 (525)
Total expenses (57,048) 100 20.14 Total expenses (47,484) 100 11.35 (42,646) Profit ( loss) before tax 2,152 0 (50.45) Profit ( loss) before tax 4,342 0 1.264.24 318 Income tax 0 0 0 Income tax 0 0 0 0 Net profit ( loss) 2,152 0 0 Net profit ( loss) 4,342 0 0 318
24 Annual Report 25 Key Performance Indicators Resource and Expense Analysis Key performance indicators for the years 2018/2019 and 2019/20 are shown in the following table: Deposits
2019/20 2018/19 Key performance indicators for attracting deposits (in Iranian and foreign currencies) are as follows: Percentage Percentage 2019/20 2018/19 Capital adequate ratio 3.76 3.86 Deposit amount Percentage of total Deposit amount Percentage of total Lending to deposit ratio 48.45 46.51 IRR billion IRR billion Lending to total assets ratio 40.91 35.09 Sight deposits 41,865 8.94 21,734 5.99 Total expenditure to total revenue ratio 96.36 91.62 Saving deposits & alike (IRR) 14,567 3.11 8,957 2.47 Assets return ratio 0.39 0.9 Long-term investment deposits (IRR) 369,161 78.84 275,966 76.09 Capital return ratio 26.9 54.29 Foreign currency deposits 37,838 8.08 51,801 14.28 Total deposit to total assets ratio 84.43 75.46 Other deposits (IRR) 4,794 1.02 4,240 1.17 Loan interest to total revenues ratio 58.51 51.41 468,225 100 362,696 100 Dividend to total expenditures ratio 75.27 77.61 Doubtful dues expense to total expenditures 4 2.32 | Composition of deposits in terms of cost type |
2019/20 2018/19 2019/20 2018/19 Deposit amount Percentage of total Deposit amount Percentage of total IRR billion IRR billion IRR billion IRR billion Deposit per branch ratio 3,443 2,667 Costly deposits 395,365 84.44 297,164 81.93 Lending per branch ratio 1,668 1,240 Costless deposits 72,860 15.56 65,532 18.07 Net profit per branch ratio 16 32 468,225 100 362,696 100 Deposit per average employee size ratio 194 151 Lending per average employee size ratio 94 70
Net profit per average employee size ratio 0,89 1,807 | Comparison table for deposits |
2019/20 2018/19 2017/18 2016/17 2015/16 IRR billion IRR billion IRR billion IRR billion IRR billion Total deposits 468,225 362,696 278,617 229,989 213,944 Percentage change compared to 29.1 30.18 21.14 7.5 17.46 the previous year
| Deposits |
468,225
362,696
278,617
229,989 213,944
2019/20 2018/19 2017/18 2016/17 2015/16
| Comparison of Saman Bank deposits with Iran’s banking system |
2019/20 2018/19 2017/18 2016/17 2015/16 IRR billion IRR billion IRR billion IRR billion IRR billion Deposits with Saman 468,225 362,696 278,617 229,989 213,944 Total deposits in Iranian banks 25,780,631 20,673,368 16,464,055 12,728,364 10,619,015 Percentage of Saman's share in the 1.82 1.75 1.69 1.81 2.01 Iran’s banking system
26 Annual Report 27 Lending Interest paid to investment deposits The following table is a summary of Saman’s performance indicators for lending: Interests paid to investment deposits during financial years 2018/19 and 2019/20 are as follows:
2019/20 2018/19 2019/20 2018/19
Percentage Percentage Percentage Percentage Amount Amount Amount Amount from Total from Total from total from total
IRR billion IRR billion IRR billion IRR billion Installment sale loan 16,649 7.3 12,223 7.2 Short term investment deposits 7,811 18.19 9,274 25.17 Joala(commission-based contract)loan 49,821 22 41,054 24.3 Long term deposits 34,678 80.75 27,170 73.73 Ijara(lease ending with ownership)loan 2,341 1 2,360 1.4 Long term deposits of banks & other credit institutions 7 0.02 17 0.05 Qard al-hasan(interest-free)loan 1,225 0.5 1,022 0.6 Foreign currency deposits 447 1.04 390 1.06 Mudaraba(trust financing contract)loan 8,539 3.8 9,275 5.5 42,943 100 36,851 100 Diminishing Musharaka(co-ownership)loan 90,957 40.1 79,794 47.3 Percentage of Growth compared to previous year 17 Debt purchase 35,199 15.5 12,012 7.1 Foreign currency loan 206 0.1 2,750 1.6 Letters of credit issued 300 0.1 475 0.3 Revenue from lending Letters of guarantee issued 582 0.3 590 0.3 Revenues earned from loans granted in financial years 2018/19 and 2019/20 are as follows: Others 21,051 9.3 7,119 4.2
226,870 100 168,674 100 2019/20 2018/19
Percentage Percentage Amount Amount from total from total
| Comparison Table for Lending (IRR billion) | IRR billion IRR billion Installment sale loan 1,557 5.36 1,835 7.5 2019/20 2018/19 2017/18 2016/17 2015/16 Joala(commission-based contract)loan 9,489 32.64 6,302 25.76 IRR billion IRR billion IRR billion IRR billion IRR billion Ijara(lease ending with ownership)loan 53 0.18 71 0.29 Total lending 226,870 168,674 137,137 127,75 126,988 Mudaraba(trust financing contract)loan 585 2.01 1,082 4.42 Percentage of change compared to 34.5 23 7.35 0.6 7.52 Diminishing Musharaka(co-ownership)loan 11,316 38.93 12.213 49.92 previous year Debt purchase /Debtors of LCs paid 2,958 10.17 1,172 4.79 Delay payment penalty 67 0.23 353 1.44
| Lending | Foreign currency loan 53 0.18 552 2.26 Others 2,992 10.29 884 3.61 226,87 29,070 100 24,646 100 Percentage of Growth compared to previous year 19 168,674
137,137 127,75 126,988
2019/20 2018/19 2017/18 2016/17 2015/16
| Saman Bank Lending compared with the Iranian Banking System's Total Lending (IRR billion) |
2019/20 2018/19 2017/18 2016/17 2015/16 IRR billion IRR billion IRR billion IRR billion IRR billion Saman Bank lending 226,870 168,674 137,137 127,750 126,988 Total banking system lending 18,120,588 15,090,207 12,587,132 9,866,616 7,916,102 Percentage of Saman's share of 1.25 1.12 1.09 1.29 1.6 total lending
28 Annual Report 29 • Supervised the credit portfolio; • Supervised the improvement of credit scoring procedures of customers (retail, SME, corporate); • Supervised the bank’s capital adequacy; • Supervised the effective automation of procedures such as currency services and related risks; • Supervised liquidity (performance of assets and debts commission); • Advised the board; • Prepared risk management policies and guidelines.
Meetings of the Subordinate Workgroups on Credit Risk and Operational Risk The Subordinate Workgroups on Credit Risk and Operational Risk are specialised and executive entities formed to provide expert reports and improvement proposals to the Risk Committee. They continued to operate in 2019/20 and were responsible for monitoring operational risk and credit risk management through risk detection, measurement, assessment, and control.
Meetings of the Assets and Debts Commission The Assets and Debts Commission met regularly every week during the year to supervise the bank’s liquidity risk management. Reporting directly to the CEO, it channels the resources toward the annual operational goals while maintaining an optimal balance of assets and debts with due consideration to the liquidity position and the capital adequacy ratio prescribed in the operational strategy. The Assets and Debts Commission has two distinct functions: (1) a controlling mechanism to monitor and control the liquidity position and profitability continuously and (2) an operational mechanism to manage resources and expenses to attain the objectives of liquidity risk management.
Major Activities of the Risk Unit with regard to Risk Management The Risk Unit carries out numerous detection and measurement activities to facilitate risk assessment for the Risk Committee. To this end, it follows the guidelines of the Central Bank of Iran and the recommendations of the Basel Committee for the management of credit, liquidity, operational, and market risks. The unit’s main activities during the reported year are as follows: • Identifying different types of business-related risks, effective variables, and items susceptible to Major Achievements of the Bank in Different Areas different types of risks; • Upgrading the credit-scoring mechanism (for retail, SME and corporate customers) and monthly surveys in order to assess and improve the system; • Designing and updating risk-evaluation models with the use of information and statistics, effective variables, and guidelines of the Basel Committee and the Central Bank of Iran; Risk Analysis Report • Identifying, determining, and updating evaluation indicators for different types of risks (market, Risk management is the process of identifying, assessing, and controlling potential risks related to the nature of operational, liquidity, and credit); banking activities. The purpose of risk management is to ensure reasonably the fulfilment of objectives based on the bank’s approved strategies. While striving to attain these risk objectives, the department measure risk indexes • Providing analytical reports on operational risks including operational risks in resource allocation and tolerance levels and defines the risk appetite as a major element in corporate governance and the bank’s procedures and human resources management as well as risk analysis in view of systems and automation strategy. in foreign currency and credit operations; The key activities of ensuring effective risk management are as follows: • Providing analytical reports on market risk including foreign currency open positions depending on the type of the currency, foreign currency gap reports and value at risk analysis of the bank’s portfolio in Risk Committee Meetings foreign currencies; The Risk Committee is a strategic body that reports to the Board of Directors. The outcomes of its findings are • Calculating the capital required to cover credit, market, and operational risks and preparing necessary presented to the board in the form of supervisory and advice reports. The Risk Committee was established reports; to comply with the internal control structure required by the Central Bank of Iran and to ensure appropriate • Analysing credit concentration risks based on factors such as economic sector, geographical location, and sufficient managerial policies and procedures are implemented to monitor and control various risks maturity, market type, and type of lending agreement in order to verify compliance with credit limits set involved in banking operations. The Risk Committee supervises the enforcement of risk policies approved by internally and by the CBI; the Committee and the board and places special emphasis on the protection and enhancement of the bank’s reputation, as well as on attaining optimal capital adequacy ratio. • Preparing reports on entry and exit surveys, economic cost of money, age analysis of deposits, age analysis of receivables and loans, and currency market risk in order to determine currency risk, liquidity The most important measures undertaken by the Risk Committee during 2019/20 include the following: gap risk, and other types of risks; • Study of reports received on risk management and identifying areas that can be improved; • Forecasting liquidity surplus/shortfall on major currencies at different time intervals and reporting on • Study of risk-control-related guidelines, plans, and proposals. the foreign currency liquidity gap; In order to execute these initiatives, the Risk Committee met regularly during the year. The outcomes are • Disclosing risk-management information based on the requirements of the CBI and IFRS-compatible summarised below: financial statements template.
30 Annual Report 31 Electronic Banking | 5year Comparison Table of ATM Numbers |
• Launched corporate Net Bank and Dashboard; 2019/20 2018/19 2017/18 2016/17 2015/16 • Launched money transfer service up to IRR 150 millions through physical portals (using smart National Number 1,613 1,538 1,459 1,458 1,303 ID cards); Percentage of change compared to previous year 4.88 5.41 0.07 11.9 6.45 • Launched SATNA money transfer service through physical portals (using smart National ID cards); • Launched PAYA money transfer service through physical portals (using smart National ID cards); | Numbers of ATMs |
1,613 • Launched Ramzineh bankimg app; 1,538 1,459 1,458 • Launched password recovery service for online bank and Mobillet app; 1,303 • Added dynamic password for Mobilet app; • Launched signing dashboard for business banking in Mobillet app; • Launched billing inquiry service with the cooperation of Ghabsino Co; • Launched web based services of Mobillet version (PWA); 2019/20 2018/19 2017/18 2016/17 2015/16 • Launched IOS version of Mobillet; • Added the option to change username in Net bank and Mobillet; | 5year Comparison Table of Debit and Credit Card Numbers | • Launched micro transaction service and discrepancy detection of card readers in Mobillet Plus app. 2019/20 2018/19 2017/18 2016/17 2015/16 Number 1,456,652 1,456,064 1,293,431 1,384,438 1,742,387 | 5year Comparison Table of Card Reader Numbers | Percentage of change compared to previous year 0.04 12.57 (6.57) (20.54) (13.32)
2019/20 2018/19 2017/18 2016/17 2015/16 | Number of Debit and Credit Cards | Number 231,507 225,459 214,514 203,311 201,027
Percentage of change compared to previous year 2.67 5.1 5.51 1.14 2.93 1,742,387
Number of transactions 939,011,215 843,977,588 646,693,996 530,843,484 410,221,293 1,456,652 1,456,064 1,384,438 1,293,431 Percentage of change compared to previous year 11.26 30.51 21.82 29.4 51.49
| Number Card Readers |
231,507
225,459 2019/20 2018/19 2017/18 2016/17 2015/16
214,514 | 5year Comparison Table of Virtual Banking Customer Numbers (Person) | 203,311 201,027 2019/20 2018/19 2017/18 2016/17 2015/16 Person Person Person Person Person Net Bank/Web service 1,376,913 1,070,983 936,829 859,337 780,333 SAMANAK 792,503 779,187 682,485 559,461 453,379 2019/20 2018/19 2017/18 2016/17 2015/16 Telephone Bank 891,188 880,934 863,763 836,264 Mobillet 285,203 148,812 2,454,619 2,890,170 2,500,248 2,282,561 2,069,976 Percentage of change compared to previous year (15.07) 15.6 9.54 10.27 13.88
| Number of Virtual Banking Customers |
2,890,170 2,454,619 2,500,248 2,282,561 2,069,976
2019/20 2018/19 2017/18 2016/17 2015/16
32 Annual Report 33 Retail Banking • Increased zero-cost resources from IRR 19,000 to IRR 40,000 billion; • Increased total absorbed resources from IRR 140,000 to IRR180,000 billion; • Reduced interest rates on branch deposits from 13.5 to 11.5 Percentage; • Registered about 320 thousand collaterals in the new system in order to systematize the obtained collaterals; • Reduced the debts for foreign currency settlement cases outstanding from the years 2015 to 2018 for 62 Percentage; • Increased branch migration index from 25 to 60 Percentage; • Optimised branch network structure by relocating two branches. Microcredit and SME Lending In order to boost profitability from operational incomes, we considerably increased microcredit and MSE lending targets in 2019/2020. We exceeded all targets, as shown in the table below:
Target Operation Target Achieved Growth of IRR lending balance IRR billion 16,621 33,497 202 Letters of guarantee IRR billion 13,000 20,874 161 Foreign Currency L/Cs, drafts, and money orders US$ million 3,000 4,028 134 Commission from letters of guarantees IRR billion 115 175 152 Commission from currency operations IRR billion 300 446 149
Encouraged by the popularity of the business credit card launched in 2018/19 and the successful experience in marketing this product as well as its very low debt-to-credit ratio, we ran an aggressive marketing campaign in 2019/20 and entered into contract with qualified organisations. As a result, a number of 39,226 business credit cards with a total value of IRR 12,661,648 million were issued in 2019/20. Furthermore, in view of the competitive market and to encourage card reader holders to concentrate their banking accounts in Saman, we offered premium credit packages to the SME customers who used Saman card readers in Corporate Banking their businesses. We identified 23,917 qualified customers from around 250,000 businesses who had Saman card readers and provided the lists (updated monthly) to their respective branches for marketing and follow-up. By the • Paid 2,748 loans in the amount of IRR 138,825 billion (balance of loans at the end of financial year 2019/2020 end of financial year 2019/20, 4,034 customers visited our branches and were issued credit cards for the amount of IRR 86,715 billion); 1,828,049 million. • Issued 1,542 letters of guarantee and extended 847 letters of guarantee (balance of issued and extended In line with our marketing plan and in order to attract medical professionals, Saman designed a credit package letters of guarantee at the end of the year 2019/20 IRR 23,723,billion); to pay loans to doctors, staff of medical universities, private hospitals and hospitals affiliated to social security • Recorded a balance of IRR 76,161 billion from the attracted resources at the end of financial year 2019/20; organization. In 2019/20, we signed agreements with a large number of medical universities including Tehran, Iran and Shahid Beheshti Universities of Medical Sciences, as well as the Health Department of the Social Security • Concentrated the salary payment accounts of 25,000 personnel of clients in the Corporate Banking Unit; Organization. By the end of financial year 2019/20, the amount of IRR 1,623,000 million loans was paid to faculty • Received fees in the amount of IRR 3,635 billion for services in foreign currency and Iranian currency. members, doctors and staff of the said universities and hospitals. As part of our social responsibility scheme, we paid 1484 marriage loans (interest-free) totalling IRR 463,200 Premier and Private Banking million to newly-wed couples. We also paid 206 interest-free loans amounting to IRR 84,180 million to help low- income families in receipt of benefits from the Imam Khomeini Relief Committee and 324 interest-free loans Offered supplemental medical insurance with coverage levels higher than before; • amounting to IRR 105,949 million to those in receipt of benefits from the Welfare Organisation to help them • Operated private banking special booths in pilot branches and offering premier and private banking services become self-employed. in six branches; • Launched Saman Reservation Centre website; • Redesigned Private Banking Office in Zaferanieh; • Attracted more than IRR 159 billion from premium customers; • Increased the number of premium customers from 8,894 to 11,676; • Increased managed assets from IRR 105 billion to IRR 360 billion.
34 Annual Report 35 International Banking
Foreign Currency Operations One of the concerns of this department is to facilitate processes and foreign exchange operations and to accelerate the import of goods into the country especially essential commodities like medications in the face of sanctions. This is highly important and always emphasized by senior management. Foreign exchange operations including L/C, bills of exchange, and incoming and outgoing money orders as well as the letters of guarantee in the years 2014/15 to 2019/20 are shown in the following table:
2019/20 2018/19 2017/18 2016/17 2015/16 2014/15 Import letters of credit 54.88 289.36 721.55 502.81 518.18 1,396.20 Import bills of exchange 1,631.65 1,088.44 264.79 291.96 47.11 46.27 Letters of guarantee 19.27 26.88 54.36 32.15 13.38 20.43 Incoming international money orders 3,921.33 7,521.34 2,881.57 1,749.91 3,585.33 3,835.95 Outgoing international money orders 6,591.74 7,885.20 5,304.21 4,793.46 3,267.21 4,463.99 12,218.86 16,811.22 9,226.48 7,370.29 7,431.22 9,762.84
(Figures in USD millions).
As shown in the above table, the foreign currency operations of the bank in 2019/20 is about USD 8.27 billion, which is 3.5 Percentage of higher than the set target of USD 8 billion. Since Saman was chosen by the CBI as the official agent for Indian Rupee, payment orders received from CBI equivalent to INR 189 billion were processed during the reported year. In spite of sanctions by some correspondent banks, Saman managed to secure 19.7 Percentage of share of the entire foreign currency operations in Iranian banking system until 19 February 2020 as documented by CBI statistics. This shows 17 Percentage of growth compared with similar period in the previous financial year which is a significant achievement for the bank.
36 Annual Report 37 Bank’s Revenue Revenue from foreign currency operations is IRR 3,987 billion.
Bank’s Performance in Currency Exchange During the reported year, foreign currency exchange for the import of commodities and services was carried out through the banks and through the NIMA (CBI’s Foreign Exchange Management Integrated system) as well as the foreign currency earned from export of petrochemical and non-petrochemical products. According to the CBI reports, performance of Saman bank in foreign currency exchange during the reported year has been as follows: The total amount of currencies allocated to Saman Bank at the bank rate was about USD 3,82 billion. USD 498 million was sourced from arrangements agreed by tripartite agreements involving intermediary companies and USD 339 million was sourced from exports. A number of correspondent banks didn’t process our applications, yet we purchased USD 3.14 billion from the CBI. The 15 Percentage of reduction in purchase during 2019/20 compared to the previous year is due to CBI’s foreign exchange policy which changed the priority scale of some commodities. In total, the amount of foreign currency allocated to Saman Bank in NIMA rate was about USD 5,95 billion, but the amount purchased was only USD 1,61 billion due to the reduction of CBI’S foreign exchange resources. Despite CBI’s policies changing the classification of some commodities from priority one (qualifying for subsidised exchange rate) to priority two (qualifying for NIMA rate) and also re-classifying the priority two group into 21, 22, 23 (staples, food and medicine) and 24, 25, 26 (foreign currency for individual needs), the total amount sold to applicants with NIMA rate in 2019/20 increased by about 61 Percentage of compared to 2018/19. The amount of purchase and consequently the sale of foreign currency sourced from export of petrochemical products were about USD 589 million. Saman’s position as the CBI agent for purchase of foreign currency (USD, Euro and UAE Dirham) earned from exports by petrochemical companies through exchange bureaus allowed for doubling the amount compared to the previous year.
Settlement of Foreign Currency Liabilities Based on the information from the CBI’s foreign currency liability settlement system, the percentage of unsettled foreign currency liabilities of Saman in early 2019 (6 April 2019) was 15.84 Percentage. With continuous training of relevant branches on various methods to reduce foreign exchange liabilities in the said system, which is a complex system, as well as holding regular meetings with representatives of corporate banking, retail banking, compliance and AML, we managed to reduce the unsettled liabilities to 4.58 Percentage Investments and Assemblies Affairs on 18 March 2020 which means 11.26 Percentage of reduction. Purchased over IRR 27,000 billion of fixed income government bonds with a yield of up to 21.5 Percentage of which had the following benefits while carrying out our social responsibility in helping the government which in addition Correspondent Banking to performing social responsibility and helping the government: Highlights in correspondent banking are as follows: • Effective maturity date of six months to one year means we can also control our interest rate risk; • The first choice of foreign banks for correspondent banking; • Minimum 1.5 Percentage of higher output than short-term bonds and 2.5 Percentage of higher than the interbank market; • Selected as Iranian banking network’s agent for all foreign currency operations with correspondent banks in India (using Indian Rupee); • Mutual cooperation with Bank Mellat in purchase and transfer of government bonds as a result of negotiations initiated by our Investment Department and welcomed by Bank Mellat; • Frontrunner in allocating foreign currency for import of humanitarian goods including pharmaceuticals, food and medical equipment; • Daily monitoring and control of debt market. • Never appeared on the list of US secondary sanctions, which enabled Saman to continue international Followed up and managed gold coin investment project which generated IRR 16 billion in revenue during 2019/20. banking activities. Mobilized and expertly supervised investment funds with acceptable return rates through Saman group companies, increased the volume of resources which was welcomed by our customers and not only generated IRR 13 billion in commission and fees but also brought in more than IRR 1000 billion of stable deposits at the interest rate of 17.9 Percentage while the return for investors was above 19 Percentage. This margin was made possible by proper fund management;
Analyzed and valuated listed and non-listed companies Prepared analytical reports including review of customers' secured shares, analysis of financial statements of subsidiaries, economic and financial evaluation of projects, rating banks and so on.
38 Annual Report 39 • Design of internal module for measuring customer risk; • Adding new reports to meet the needs of management and respond to legal authorities; • Concluding contract with Saman Electronic Payment Company to provide them with a version of payment fraud control system; • Designing a project to integrate all internal software products of compliance and AML in the fraud control system and to house it in Saman’s data centre. Financial Management • Proper liquidity management resulting in zero; • kept during the 365 days when Saman as a depositor in the market, showing 134 Percentage of growth compared with the previous year; • Although the majority of banks were heavily fined by the tax authorities for stamp duty taxes outstanding from 2008/09 to 2018/19, Saman managed to successfully resolve the tax dispute by presenting proper documents without paying any fines; • Cooperated in the personnel performance evaluation based on pre-set goals; • Prepared the bank’s performance reports (weekly and monthly) and compared them with operational plans; • Prepared and sent weekly and monthly reports requested by the CBI; • Prepared and presented operational plan for 2020/21; • Cooperated in the bank’s rating process carried out by CI; • Implemented SAP software; Inspection and Compliance • Cooperated and set goals for the implementation of Saman 2021 Plan. • Identification and analysis of financial crime gap in comparison with first class world banks and premium international standards; Internal Audit and Control • Definition of the bank’s road map toward compliance with the use of superior international solutions; Maintaining the stability and health of banking operations is achieved only through creating a safe monetary and • Design and implementation of a comprehensive plan and transparent organisational structure in view financial network one requirement of which is the establishment of corporate governance. The Basel Committee of financial crime compliance; on Banking Supervision considers proper corporate governance a requirement for safety and soundness of banking system. This issue has been repeatedly emphasized in the instructions of CBI as the highest supervisory • Customer classification based on financial crimes risk under three categories of low risk, average risk, authority of the country's banking network. Following the Basel Committee guidelines and CBI’s requirements, the and high risk and continuation of running Saman bank CDD Remediation Project and creation of related board has designed a supervisory structure whereby all operations are directly controlled by the operational units, module in fraud management software; the Risk Committee, and the Compliance and AML Committee. Furthermore, the board created the Internal Audit • Upgrade of the Omni Enterprise system for transaction monitoring, customer profiling, and sanctions and Control Unit in 2007 to act as an independent body for assessing the efficiency of internal audit system and screening; processes, risk management and the corporate governance in Saman and in its subsidiary companies. • Increasing the number of compliance officers in branches and regional supervisory departments; The Internal Audit and Control Unit have been operating since 2014 within the framework of internal control instructions, charters of the audit committee and as the internal auditor. As the supervisory arm of the board, the • Upgrading BPMS to automate the compliance checklist; Internal Audit and Control Unit evaluates the efficiency and effectiveness of operations, the reliability of financial • Organizing training courses on compliance for Saman Financial Group companies; reporting and compliance with rules and regulations in accordance with the highest international standards and the International Professional Practices Framework (IPPF) standards. The Internal Audit and Control Unit enjoy • Preparing an online platform for compliance training for all personnel; appropriate authorities, independence, skilled workforce and access to the board. • Designing an internal system on foreign currency undertakings to record statistics and obtain reports on measures seeking to fulfil such undertakings; • Increasing more than fourfold the number of STR reports sent to Financial Information and AML Department in the Ministry of Economic Affairs and Finance as well as the frequency of branch inspections to improve Saman’s ranking in anti-money-laundering and counter-terrorist funding under CBI’s guidelines; • Monitoring all customers against the UN sanctions list in Infrosoft software; • Background checks on international customers under the bank's compliance policies; • Implementation of new requirements of correspondent banks in the area of food and medicine as they emerge; • Launching and updating the online card fraud detection section; • Designing a form-building tool in the fraud detection program to facilitate creating new reports without the need to change the program codes;
40 Annual Report 41 The organizational positions in 2019/20, 2018/19 and 2017/18 are shown in the following table:
2019/20 2018/19 2017/18 Members of the Board of Directors 5 5 4 Senior Advisors and Inspectors 25 31 27 Executive Directors 22 24 25 Deputy Executive Directors 12 12 10 Division Heads 35 39 32 Deputy Division Heads 26 19 26 Unit Managers 63 91 92 Experts 463 479 379 Regional Managers 10 9 9 Branch Managers 130 140 143 Branch Deputy Managers 174 185 182 Banking Clerks 1,162 1,172 1,171 Administration Staff 369 289 322 Total Personnel and Members of the Board of Directors 2,491 2,490 2,418
Education and Development Training courses and the number of participants in 2019/20 are as follows:
Type of the Course Number of Participants Man-hours Virtual -Behavioral courses 339 29500 Virtual- General courses 37 1776 Virtual - Professional non-banking courses 4584 22168 Human Capital Virtual -Professional banking courses 3401 37294 In-person behavioral courses 806 2960 In-person General courses 200 2520 In-person Professional non-banking courses 1542 15855 The bank’s human capital structure over the past three years is presented in the following table: In-person Professional banking courses 3135 64104
Associate General English courses 337 10911 Master's Bachelor's PhD Diploma & Subtotal Total Grand Total Degree Degree 14,381 187,088 Lower
Head Female 1 111 108 12 232 647 Office Male 3 172 176 64 415 2019/20 2491 Major accomplishments of the Human Capital Department in 2019/20 Female 1 198 344 9 552 Branches 1844 • Cooperation in implementation of projects related to Saman 2021 (identification and elimination of Male 3 316 795 178 1292 redundant procedures, simplification and centralization of processes through Lean Out project, focus on 8 797 1423 263 2491 attracting customer and move towards selling products through Sales Model Project, performance Head Female 1 124 128 13 266 management, design and restructure of Legal and Debt Collection Department); 826 Office Male 6 194 209 151 560 ISO 9001:2005 standard in human resources management as audited and approved by Quality 2491 • 2018/19 Female 1 190 337 10 538 Management System; Branches 1665 Male 1 266 759 101 1127 • Promoting the employee recognition and appreciation culture through various applications in order to 9 774 1433 275 2491 enhance organisational attachment and unity;
Head Female 0 114 123 11 248 Promoting remote meetings using Skype thus significantly reducing travel and accommodation expenses 785 • Office Male 7 171 199 160 537 and increasing decision-making speed; 2017/18 2319 Female 1 172 342 12 527 Implementing phase 2 of the staff talent management project; Branches 1534 • Male 1 232 763 11 1007 • Periodic human resources survey and planning in all branches and service centres; 9 689 1427 194 2319 • Staff offices survey and planning (6 organisational units); • Human resources survey and planning for subsidiary companies. Proposing a restructure of Hafez Saman Iranian Credit Scoring Company;
42 Annual Report 43 • Surveying and planning for specialist educational needs of all personnel (around 2000) and increasing the production of educational material including videos and textbooks; • Surveying employees’ job satisfaction based on GFK new model and presenting analytical reports.
Human capital department and Saman Academy plans for 2020/21 • Development of human capital management processes through SAP software; • Implementation of a employee attachment enhancement project; • Dating the bank’s merit system; • Preparation and communication of organizational documents • Organizational culture documentation Maintaining and updating the quality management system and staying ready for surveillance audit; • Assessing organizational culture to identify the root causes of cultural problems; • Advancing the human resources planning systematization project; • Designing and planning for specialized training workshops for middle and senior managers; • Economic study of Saman’s prospective investments by Saman Academy; • Planning for the implementation of educational process management under standard10015; • Launching combined training courses (offline + online) and (offline+ in person) in order reduce costs in accordance with latest standards; • Holding specialized seminars in sales and marketing and motivation for employees in different layers in Tehran and other cities; • Developing course material for Retail Banking 2 in the form of educational videos and publishing new books in banking, financing, and so on; • Field study on the financial state of trades and business groups the bank is planning to attract. Social Responsibility • Cooperation with charities including Arasteh, Child Foundation, Behnam Daheshpour, and Sepehr, and paying surgical and medical costs of children from low-income families; • Construction of a school with 9 classrooms in Sarpol Zahab city, Kermanshah Province; • Construction of Trauma and Emergency Centre in Sarpol Zahab city, Kermanshah Province; • Construction of a school with 12 classrooms in Yazd Province; • Construction of a school with 6 classrooms in Ghoshjanabad village, Agh-ghela city, Golestan Province; • Posting UNICEF messages on Saman’s website and ATMs.
Future Projects in Social Responsibility In 2020/21, Saman will continue to cooperate with the aforementioned charities. The budget for acts of charity for the next year has been approved and allocated.
44 Annual Report 45 Office Secretariat Security Office Inspection Office Supervisory Deputy Passive Defense Electronic Protection activities management Consulting and development of International Deputy international activity
& International banking Directors committee High Security IT committee High Audit committee High Strategy & budget Office Claims Legal Deputy &
Legal Management Collection Planning Office of Large Claims Office of retail & small Management Scope voice management
support management Major Accolades and Achievements of Saman Bank in 2019/20 Anti money laundering anti terrorism financial Public relation & customer’s • Ranked 22nd top company in Iran based on the ranking by the Industrial Management Organization; management Financial Deputy • Ranked First in Customer Satisfaction in survey by the Tehran Governor General’s Office; Investment and stock Financial Management CEO Deputy • Renew the standard certificate ISO 10002 for Complaint Procedure;
Board of Directors • Commended and awarded Gold Medal in the 14th National Festival of Public Relations Publications; • Saman’s Mobillet application was chosen Iran’s best progressive application in 12th Iranian Web and Mobile Festival;
Risk Division management
& Renewed ISO 9001: 2015 in human resources management; IT management • Organisational Structure Organizational Chart-Level 1 Development Deputy Strategy & project management office Quality improvement Logistics management
Human capital Management • Implemented SAP in human resources management; Audit Unit Internal Monitor • Saman Bank’s futsal team was the runner-up in Safir Cup; • Saman Bank’s futsal team won championship in Tehran Workers' Premier League; • Supported the National Plan for the Use of Plasma in COVID 19 Treatment; Credit Deputy committee committee Committee
Financing and Saman Electronic Payment Company ranked among the top 20 e-payment companies worldwide;
Corporate banking • Micro & retail credits High Human Capital High financial crime management of Project High Risk management of Saman financial group
High Compliance committee • Inauguration of Saman Bank school in Sar Pole Zahab. of claims health Executive committee • Assets & Debts • Macro Credits • International Banking • Personnel Discipline • Average Credits • Deals • Follow up and receipt • Occupational safety and &
Saman Premium development Marketing & VIP banking Retail banking Electronic banking deputy deputyDeputy communication Unit Banking and Evaluation
46 Annual Report 47 Plans and Projects for 2020/21 The major plans and projects for 2020/21 under the bank’s strategy are as follows: • Implementing the bank’s strategy at different levels including management, business units, and support and operation units; • Amending and improving sale structure in business units (corporate banking, premier and private banking units); • Implementation of Debt Collection Integrated System; • Implementation of Early Warning System (EWS); • Implementation of Corporate Lending System.
Finnacial Report
48 To Annual Ordinary General Meeting of Shareholders 7- The accounting standards requirements in relation to consolidated financials’ disclosures and presentation and the bank’s nondisclosure of 3 column balance sheet (including balance at 2018/03/21, not presenting prior Saman Bank (Public Joint Stock Company) year adjustments in comprehensive income, separation of tax for current year and prior years, uniformity of the group’s (Accounting) policies (Assets’ Revaluation), classification method and disclosure of some items and Report on the Financial Statements information about new standards and their implementation date which is not yet due and bank has not complied with such requirements, has not been complied with. Introduction 8- In preparation of attached consolidated financial statements, the financial statements of Sarv Zarin Atlas 1- We have audited the consolidated financial statements of Saman Group & Bank (Public Joint Stock Company), company, Kala Tejarat Fars company, Iranian Fanavar pars, Aftab Tejarat Saman and Tosseh Omid Atieh Andish including the balance sheets as at March 19, 2020 and statements of profit or loss, statements of comprehensive have not been consolidated nor used equity method. It should be noted that the audited financial statements of income, statements of changes in shareholders’ equity as well as the cash flow statements for the fiscal year the above companies have not been delivered to us in full hence determining the effects of the above mentioned then ended together with the explanatory notes 1 to 63 hereto attached. on items of consolidated financial statements is not possible. 9- As explained in Note 8-9 of the financial statements, the bank’s foreign currency Accounts as at Balance sheet Responsibility of the board of directors for financial statements date are translated using the central bank’s rate (Rls. 90000 per USD and Rls.102000 per Euro and other 2- The board of directors of the Bank shall be responsible for preparing the financial statements according to currencies using USD rates) and consequently an amount of Rls.3,507 Billions is being accounted for as forex accounting standards. Such responsibility includes design, implementation and maintenance of internal controls translation difference. Also regarding part of the currencies held by other persons, brought forward from prior for setting up these statements in such a manner to ensure that there is no significant misstatement due to years there are no documented information on recoverability of such amounts at balance sheet date available fraud or error. to this firm. Considering that there are various currency rates applicable as per accounting standards, it is necessary to use the future currency rate which is going to be used in settlement of Account balance. Hence Responsibility of auditor and legal inspector there are necessary adjustments required to be done. In absence of some information, specifically foreign currency Assets, the effects of above mentioned adjustments on financial statements items, in particular 3- Our responsibility is to express an opinion on these financial statements based on our conducted audit in regarding reflection of FX translation difference in the related heading is not possible to determine. accordance with auditing standards. Those standards require that we comply with ethical requirements and 10- Accounts receivable (note 15-2 to financial Statements) as at Balance sheet includes receivables from sales plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from contracts for properties (Behnad Bana & Tamin Atieh Karkonan Saman Co.) taken place in recent years. Since material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts the receivables related to prior year’s sales which have not been received in accordance with the relevant and disclosures in the financial statements. The procedures selected depends on the auditor’s judgment, payment terms and no documentations were provided to this firm regarding settlement of the obligations by including the assessment of the risks of material misstatement of financial statements, whether due to fraud or these persons, who were somehow among related parties of the main company, based on the contractual error. In making those risk assessments, internal control relevant to the company’s preparation of the financial payment terms, no opinion can be expressed on their possible effects on the financial statements of the year statements in order to design audit procedures that are appropriate in circumstances, but not for the purpose under review nor the comparatives relating to prior years. of expressing an opinion on the effectiveness of the company’s financial statements, is considered. An audit also includes evaluating the appropriateness of accounting policies used and reasonableness of accounting 11- According to partnership contract with Messrs. Mahmoud Esmailzadeh Marvian and Reza Kamrani in the prior estimates made by directors, as well as evaluating the presentation of the financial statements. years, in order to establish karaj city center project (Alborz Mall), in addition to transferring two pieces of land for place of project, Six different loan facilities were granted which together with the related interest, fees and We believe that the audit evidence we have obtained is sufficient and appropriate to express a qualified opinion payments, the amount of Rls. 7,743 Billions are shown in 2019-2020 under the heading of facilities granted. on the financial statements. Since the counter party has not complied with the terms and conditions anticipated in the contract, subsequent Our responsibility, as the legal inspector, is to report on non-compliance with legal requirements as per the to Bank’s complaint and consequent legal procedures the above mentioned project was confiscated December amended commercial code of Iran and the Bank’s articles of association and legal regulatory requirements of 2018 and as a result of claim by the other party against bank, the case is being considered by judicial authorities. banking activities to the ordinary general meeting of shareholders. Under the present conditions and not delivery of some information to this firm, determining the effect of recognizing & reflection of value of these confiscated properties and bank’s method of settlement of debts to 3rd Basis of qualified opinion parties, is not possible for this firm. 12- As explained in Note 10-2-1 to the financial statements, dues form the Central Bank of Iran include an amount 4- The situation of given financial facilities and dues from persons and the method of calculation of interest and of Rls. 17,307 Billions (including Rls.7,081Billions under heading of dues and Rls.10,226 Billions as part of net related charges together with provisions envisaged in I.R.I. Central Bank’s circulars are explained in Notes differences in foreign exchange rates in the table of note21) as advance purchase of foreign currency during 8-4, 8-5, 8-6 and 11 to the financial statements. the 2011 and 2012, which despite actions taken, including special audits, the final settlement method of which In this regards, in addition to the fact that the requirements of the manual instructions on “Asset Classification in is not clear yet. It should be noted that, in connection to foreign exchange differences in the letters of credit Credit Institutions and Calculation of Provisions for Doubtful Debts approved by Money and Credit Council” and opened during the above mentioned years, an amount of Rls. 2,841 Billions were received from customers, related circulars on classification of receivables are not fully complied with, the overdue facilities have mainly which have been reflected in Note 22 of the financial statements as debts to banks and credit institutions. been without any funds received and hence dealt with by rescheduling or renewing and reflected as current Additionally, according to the Central Bank’s correspondence, an amount of Rls. 6,780 Billions were claimed as facilities and related interests shown in the accounts. Therefore, considering the control weaknesses in the penalty for overnight withdrawals, for which no entry has been made in the accounts. Considering that no replies system of calculating provisions for doubtful debts, including the revaluation of collateralized assets at different was received to our request for confirmation from the Central Bank of Iran, no information on the possible points in time, it has not been possible for this firm to determine the required provisions. effects resulting from settlement of the mentioned accounts, including interest & other charges on inter-bank accounts, on the Bank’s financial statements under review nor comparative year is available. 5- The current investment in other shares and gains arising from increase in the value of these shares are reflected, respectively, in Notes 12,8-1 and 36-3 to the financial statements. Since the practice used by the 13- The title deeds for a part of immovable properties and a part of collateralized properties have not been Bank for reclassification and valuation of shares are not based on accounting standards, and considering the transferred up to the date of this report. In addition, in relation to the method of utilizing the collateralized ownership percentage, applying the equity method of accounting would be necessary. The required adjustments properties in hand, resolving disputed properties, construction and completion costs and subsequent planning would decrease the accumulated profit and the investments in the consolidated balance sheet by the amount of for sale of such properties, there is no information provided to this firm. Therefore, determining the possible Rls.4,009 Billions. effects of the above items on financial statements is not possible for this firm. 6- Based on Note 26 to the financial statements, and since corporate income tax for the years 2009 to 2015 have Qualified opinion been finalized, tax differences for these years, amounting to Rls. 702Billions, should have been dealt with as the prior year adjustments. And, on the other hand, tax paid in advance of Rls. 702 Billions under the heading 14- In our opinion, except for the effects of the items stated in Clauses 4 to 7 above and subject to possible effects of ‘other assets’ should be written off, tax payable for 2017 and 2018 is to be reflected under the heading of of items mentioned in Clauses 8 to 13, the financial position of Saman Group & the Bank (Public joint stock ‘provision for corporate income tax’. Additionally, due to inaccessibility to necessary information, it has not been company) as at March 19, 2020 and their financial performance and cash flows for the fiscal year then ended are possible for this firm to establish the minimum provision. true and fair, according to the accounting standards, from all material aspects.
50 Annual Report 51 Emphasis of matters 25- The provisions of the executive directive on disclosure of information in respect of listed companies in the Securities & Exchange Organization have not been complied in the following matters: (Our opinion has not been qualified as a result of items 15 to 17 below). Clause 1 of Article 7 regarding timely issue of audited annual financial statements of the Bank and the 15- As explained under Note 10-3-1 to the financial statements, although actions have been taken regarding • group consolidated accounts collection of receivables from Bank Pasargad and Saderat, but there have been no concrete results. ; Clause 2 of Article 7 on submission of Board of Directors’ Report & Auditor’s Report on it within maxmum 16- As per the tax claim notice, subject of Clauses (B) & (P) of Article 17 of the Act of Removing the Obstacles • 4 months from the year end of the Bank; of Competitive Production (Note 26-2-1 to the financial statements), an amounts of Rls. 3,768Billions and 4,753Billions are claimed by the tax office for 2017 and 2018, but the company has appealed against it, and the • Article 10 in relation to submission of minutes for ordinary & extraordinary meetings within maximum case is currently being reviewed by the board of settlement of tax disputes. of 10 days, to Companies Registrar and its disclosure within one week after notice of registration; 17- As explained in Note 21-2-3 to the financial statements, the collateralized assets do not appear to have been • Clause 3 of Article 7 regarding submission of unaudited interim financial statements for 3 and adequately insured. The inventory is not adequately insured neither (Note 17-1 to the financial statements). 9-months periods within maximum 30 days from end of 3-months periods; • Clause 4 of Article 7 regarding submission of 6-monthly audited financial statements within Report on other legal responsibilities maximum 75 days of the end of the 6-monthly financial period; • Clause 5 of Article 7 regarding submission of unaudited financial statements within 60 days after Report on other responsibilities of the legal inspector financial year end; 18- The cases of non-compliance with some of the monetary and banking laws and regulations together with related • Clause 10 of Article 7 regarding submission of annul audited financial statements of controlled circulars over the banking operations and mandatory bylaws for the banking system for the period under review companies at least 10 days before bank’s annual ordinary general meeting & submission of interim by our firm have been submitted to the Central Bank of Iran under a separate letter by this firm. audited financial statements of the mentioned companies within maximum 60 days after end of 6 19- As explained in Note 57-7-3 to the financial statements, capital adequacy ratio is lower than the required value monthly duration; by the CBI (8 Percentage), and the ratio will be even lower by considering the content of this report. • Article 9 regarding immediate disclosure of decisions made in general meetings; 20- Cases of non-compliance with the legal requirements provided under the Amendment of the Commercial Code • Article 43 regarding appointing a managing director by the board maximum within 1 month of being of Iran and articles of association of the Bank are as follows: without a managing director. Provisions of notification No. 021/440/B/96 dated 15th July 2017 requiring presentation of financial Article in the Clause in the Amended Articles of statements based on IFRS within maximum 6 months from publications of audited financial statements. Commercial Code Association 26- Internal controls related to the financial reporting of the Bank as 2020/03/19 were assessed according to Selecting the managing director, extent of authority, duration & his remuneration 128 & 124 18 the requirements of the Securities & Exchange Organization. Based on this assessment and considering the Payment of dividends within 4 months from approval date (prior years’ profits) - 111 inherent limitations in internal controls, this firm has not observed any material weaknesses in internal controls Holding annual general meeting within the period stipulated in the articles of association 89 & 138 31 related to financial reporting, according to the second chapter of internal control instructions approved by SEO, with the exception of failure of the audit committee to perform its tasks in accordance with the approved Compliance with ownership ceiling of the Bank’s shares - 7 framework, failure to set up the software for some parts of the banking operations, such as letters of credit, and failure of the established mechanized system to report important elements of the banking operations, e.g., loan collaterals. Also, we draw the shareholders’ attention to the effects of clauses 4 to 13 of this report on distributable dividends and letter reference no. 98/450508 dated 2020/03/18 from CBI for non-distribution of dividends on the 27- Regarding non-compliance with the Act of Removing the Obstacles of Competitive Production and Promoting gain of FX asset /liability translation gain. National Financial System in the financial year under review, the following matters should be reported: 21- Transactions mentioned under Note 59-3 to financial statements, including all the transactions subject of Article • Clause ‘P’ of Article 17 of the executive bylaw regarding preparation of the list of excess properties 129 of the Amendment of the Commercial Code of Iran performed during the fiscal year, reported to us by the and submission of this list to the Central Bank of Iran after auditor’s confirmation is not complied with, board of directors, were reviewed by this firm. Such transactions are performed in compliance with the provisions hence, it has not been possible to carry out compliance checks for Clauses “A” & “B” of Article 16; of the mentioned Article in terms of obtaining of the board's consent and absence of the director concerned • Provisions of Article 21 of the executive bylaw regarding opening of a special account if requested by in voting. Considering the special circumstances of the related party transactions, our firm believes that such the receiver of the loan facilities; transactions should be brought to the annual general meeting of shareholders for appropriate decisions. • Provisions of Article 47 regarding agricultural loan facilities to the extent determined by the Central 22- We have examined the report of the board about activities and general situation of the Bank, provided under Bank of Iran. Article 232 of the Amendment of the Commercial Code of Iran, to be presented to the general meeting of shareholders. In view of such examination, we can confirm that there is no significant case of inconsistency 28- In execution of Article 33 of ‘Executive Directive on Anti-Money Laundering for Auditors’, we have evaluated the between the information therein and the documents provided by the board. Bank’s compliance with the provisions of the mentioned law and other related circulars and executive directives as per the required check-lists and auditing standards. In this respect, with the exception of ‘risk-based 23- Detailed calculations relating to the difference between on account and final interest on investment deposits classification of customers’ and ‘certain cases of non-compliance by subsidiaries’, no material cases of is shown in note 37 to the statement of investment deposit performance. In checking compliance with circular non-conformity with the above laws and regulations has been detected. No. 126331 dated 2009/03/09 & letter No. 94/69383 dated 2015/07/11 of the Central Bank of Iran, we have seen no cases of non-conformity. The excess interest payable to depositors amounts to Rls. 361Billions. Which after considering the effects of clauses included in this report the amount of excess will be different. Azmoon Pardaz Iran Mashhood Audit Firm Report on other legal and regulatory responsibilities of auditor (IACPAs) 24- The annual membership fees of year 2019-2020 for deposits guarantee fund, in line with the provisions for Date: 6th August 2020 Farzad Shadadfard M.H. Saadatian Farivar calculation and receipt of such membership fee based on the amended bylaws for such deposits (subject of letter no.98/11/361 dated 2020/03/13 and circular number 68469/96 dated 28th May 2017 in relation to Directive )800447( )800385( number 22196/t53725 “H” dated 20th May 2017 of council of ministers) were reviewed by this firm and no material noncompliance were observed.
52 Annual Report 53 Saman Bank (Public Joint Stock Company) Consolidated Balance sheet For the fiscal year ended March19, 2020
(restated) (restated) Note March 19, 2020 March 20, 2019 Liabilities and shareholders' equity Note March 19, 2020 March 20, 2019 Rls(m) Rls(m) Rls(m) Rls(m) Assets Liabilities Cash 9 88,381,239 150,923,336 Due to banks and other credit istitutions 22 49,269,001 92,278,307 Due from banks and other credit institutions 10 8,738,095 10,338,939 Customers' deposits 23 73,118,479 66,203,469 Due from the government 0 0 Dividends payable 24 288,500 124,833 Loans granted to and amounts due from governmental entities 0 0 Trade accounts payable 0 0 Loans granted to and amounts due from non-governmental entities 11 226,161,937 168,277,815 Advances received 25 587,483 88,192 Investments in shares and other securities 12 50,597,714 16,801,352 Debt securities 0 0 Long-term investments in affiliates 13 115,490 254,495 Provision for corporation tax 26 186,096 201,766 Due from subsidiaries and affiliates 14 1,463,748 628,332 Provisions and other liabilities 27 18,244,587 13,612,634 Other accounts recievable 15 69,036,630 54,528,577 Provisions for employees' termination and pension benefits 28 1,350,856 997,769 Orders and prepayments 16 310,428 50,108 Total liabilities before investment depositors' equity 143,045,002 173,506,970 Inventory (materials and goods) 17 798,620 398,228 Investment depositors' equity 29 392,020,957 297,042,957 Tangible fixed assets 18 7,861,391 5,405,118 Total liabilities 535,065,959 470,549,927
Intangible assets 19 5,946,909 4,928,883 Shareholders' equity Statutory deposits 20 49,042,140 35,798,262 Share capital 30 8,000,000 8,000,000 Other assets 21 44,281,757 35,663,025 Ongoing capital increase 0 0 Shares premium reserve 0 0 Parent company's shares held by subsidiaries (9) (9) Legal reserve 31 2,834,064 2,507,876 Other reserves 32 3,528,218 3,528,218 Assets revaluation reserve 33 559,865 581,569 Difference in foreign exchange rates 0 0 Retained earnings 2,159,601 (1,349,080) Treasury shares 0 0 Parent company total shareholders' equity 17,081,739 13,268,574 Minority interest 34 588,400 177,968 Total assets 552,736,098 483,996,470 Total liabilities and shareholders' equity 552,736,098 483,996,470
Customers' obligations for LCs 52-1 795,241 4,041,632 Bank's obligations for LCs 52-1 795,241 4,041,632 Customers' obligations for LGs issued 52-2 19,749,406 14,387,047 Bank's obligations for LGs issued 52-2 19,749,406 14,387,047 Customers' other obligations 52-3 57,465,699 46,410,920 Bank's other obligations 52-3 57,465,699 46,410,920 Managed funds and similar items 52-4 360,779 473,099 Managed funds and similar items 52-4 360,779 473,099
• The accompanying explanatory notes are an integral part of these financial statements.
54 Annual Report 55
Consolidated statement of profit & Loss For the fiscal year ended March 19, 2020
(restated) 344,848 ) 96,514 ) 15,166,348 0 1,915,393 ( 0 0 0 1,994,287 0 0 0 13,613,423 0 0 0 0 Rls(m) 0 0 17,081,739 Total areholders' equity 0 ( 0 1,915,393 Note 2020 2019 Rls(m) Rls(m) Income from loans granted and placements in other banks and debt securituies 35 34,580,933 26,625,183
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) 0 0 0 Treasury shares 0 0 Interest expenses on deposits 37-5 (42,887,248) (36,795,773) 0
Net income from loan interests and placements in other banks (8,306,315) (10,170,590)
Fee and commission incomes 39 3,025,013 2,409,831 Fee and commission expenses 40 (3,043,736) (2,449,280) 344,848 ) 1,004,231 ) 326,188 ) 96,514 ) 0 570,398 0 1,915,393 ( 21,704 0 0 1,994,287 0 0 0 ( 0 ( 0 Rls(m) 21,704 0 2,159,601 Retained profit (loss) 0 ( 1,589,205
Net income from fees and commissions (18,723) (39,449) 0 Income from sales and services rendered 41 138,415,979 84,344,987 Cost of sales and services rendered 42 (137,123,304) (83,433,077) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) 0 0 0 Difference in foreign exchange rates 0 0 1,292,675 911,910 0 Net profit (loss) from investments 36 7,583,499 5,358,720
Net profit (loss) from foreign currency exchanges and transactions 43 4,036,031 6,492,360 21,704 ) Other operating incomes 0 0 21,704 ) 0 0 559,865 0 0 0 ( 0 0 0 0 0 0 581,569 0 0 0 Rls(m) ( 0 559,865 Assets revaluation reserve 0 0 Total operating incomes 4,587,167 2,552,951
Net other incomes and expenses 44 9,218,316 10,716,883 Administrative and general expenses 45 (8,444,923) (6,928,003) 0 0 0 3,528,218 0 0 0 0 0 0 0 0 0 0 3,528,218 0 0 0 Rls(m) 0 0 3,528,218 Other reserves Expenses for doubtful debts 46 (2,501,200) (1,100,000) 0
Financial expenses 47 (21,281) (2,234) 2019 - 2020
Deprecciation/amortization expenses 48 (779,643) (537,770) Profit before calculating group share from incomes earned by affiliates 326,188 0 0 2,507,876 0 0 0 0 0 0 0 0 0 0 2,507,876 0 326,188
2,058,436 4,701,827 0 Rls(m) 0 0 2,834,064 Legal reserve 0 Group share from incomes earned by affiliates 13 10,634 (43,169) Profit (loss) before income tax 2,069,070 4,658,658
Income tax of the year 26 (135,936) (140,588) ) ) ) 9 9 9 0 0 0 ( 0 0 0 0 0 0 0 0 0 0 ( 0 0 0 Rls(m) 0 0 ( Parent company's shares held by subsidiaries 0 Income tax of previous years (21,333) 0 Total income tax (157,269) (140,588) Net profit (loss) 1,911,801 4,518,070 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) 0 0 0 Shares premium reserve Minority interest from net profit (82,483) 39,705 0 Earnings per share (EPS) (Rls) 54 Basic earnings per share (Rls) 249 560
Diluted earnings per share (Rls) 249 560 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) 0 0 0 Ongoing capital increase
Consolidated Comprehensive statement of profit & Loss For the fiscal year Capital 0 0 0 0 8,000,000 0 0 0 0 0 0 0 0 0 0 8,000,000 0 0 0 Rls(m) 0 0 ended March 19, 2020 8,000,000
Note 2020 2019 Note 24 49 32 Rls(m) Rls(m) 31 Net Group Profit (Loss) 1,994,287 4,478,366 Surplus of assets revaluation reserve 33 0 0 Difference in exchange rates for foreign transactions 0 0 Income earned from selling treasury shares 1,915,393 0 (Comprehensive income for fiscal year) 3,909,680 4,478,366 Prior years' adjustments 49 (344,848) (947,006) Consolidated adjustments (96,514) 15,069 (Comprehensive income recognized from reporting date of previous fiscal year) 3,468,318 3,546,429 Capital increase Increase in registered capital Purchase of shares Consolidated adjustments Total comprehensive incomes Approved dividend Sale of treasury shares Prior years' adjustments Total other comprehensive incomes Dividend per share Purchase of treasury shares Net profit Tax for other comprehensive incomes Other reserves Parent company's shares held by subsidiaries Treasury shares Balance as at March 21, 2019 Difference in foreign exchange rates Distribution and allocation Legal reserve Increase in unregistered capital Other comprehensive incomes (losses) after tax deduction Assets revaluation reserve Sale of shares • The accompanying explanatory notes are an integral part of these financial statements. Balance as at March 19, 2020 Consolidated statement of changes in shareholders' equity For the fiscal year ended March 19, 2020
56 Annual Report 57
Consolidated statement of cash flows For the fiscal year ended March 19, 2020
(restated) 947,006 ) 33,402 ) 33,402 ) 13,268,575 0 0 ( ( 0 0 4,478,366 0 0 0 9,754,937 0 0 0 Rls(m) ( 0 Total areholders' equity 0 13,268,574 15,680 0 Operating activities 2020 2019 Rls(m) Rls(m) Cash received for 1 Interest and late payment penalty on loans granted 3,550,337 4,906,413 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) 0 0 Treasury shares 0 0 0 Interest on debt securities 751,013 131,918
Fees and commissions 2,996,895 2,392,080
Interest on placements in other banks 4,512,074 1,805,313 Profit from investments 7,699,989 5,672,646 1,349,876 ) 4,303,692 ) 947,006 ) 592,427 ) 3,528,218 ) 775,474 ) 0 2,954,613 0 ( ( 0 0 4,478,366 0 0 0 ( 0 ( 0 Rls(m) 0 ( Retained profit (loss) 0 ( 15,680 Other operating incomes 7,880,531 7,665,387 Cash payment for 0 0 Interest on deposits (42,942,724) (36,851,249) Fees and commissions (3,096,222) (2,485,648)
Financial expenses (48,784) (48,682) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) 0 0 Difference in foreign exchange rates 0 0 Other operating expenses (10,061,300) (6,687,785) Income tax (136,842) (89,564)
Net cash (outflow) inflow from operating activities before changes in operating assets and liabilities (28,895,033) (23,589,171) Cash flows from changes in operating assets and liabilities 33,402 ) 33,402 ) 0 581,569 0 581,569 0 0 0 ( 0 0 0 0 0 0 614,971 0 0 0 Rls(m) ( 0 Assets revaluation reserve 0 Net increase (decrease) in liabilities Due to banks and other credit institutions (49,969,076) 82,882,696
Customers' deposits 7,327,820 41,105,349 Debt securities 0 0 Operating portion of provisions and other liabilities 6,442,367 3,497,898 0 3,528,218 0 0 0 3,528,218 0 0 0 0 0 0 0 0 0 0 3,528,218 0 Rls(m) 0 0 Other reserves 0 Investment depositors' equity 98,706,638 44,393,709 2018-2019 Net (increase) decrease in assets
0 0
Due from banks and other cerdit institutions 1,233,948 719,643 Principal amounts due from the government 0 0 0 2,507,876 0 1,732,402 0 775,474 0 0 0 0 0 0 0 0 1,732,402 0 0 0 Rls(m) 0 775,474 Legal reserve 0 Principal loans granted to and amounts due from governmental entities 0 0 Principal loans granted to and amounts due from non-governmental entities (32,676,862) (12,779,437) Investment in shares and other securities (34,346,517) (4,834,727) Due from subsidiaries and affiliates (2,773,974) 500,510 ) ) ) Other accounts receivable (13,581,652) (8,696,464) 9 9 9 0 ( 0 ( 0 0 0 0 0 0 0 0 0 0 ( 0 0 0 Rls(m) 0 0 Parent company's shares held by subsidiaries 0 Statutory deposit (12,842,508) (8,230,980) Operating portion of other assets (1,458,321) 1,839,743 Cash flows from changes in operating assets and liabilities (33,938,137) 140,397,940 Net cash inflow (outflow) from operating activities (62,833,170) 116,808,769 Investing activities 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) 0 0 Shares premium reserve 0 Funds paid for acquisition of tangible fixed assets (2,621,552) (2,475,256) Proceeds received from sale of tangible fixed assets 150,983 295,799 Funds paid for acquisition of intangible assets (1,142,917) (2,915,285) Proceeds received for sale of intangible assets 137,905 49,313
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) 0 0 Ongoing capital increase Funds paid for acquisition of non-operating real estates 0 0 Proceeds received for sale of non-operating real-estates 0 0
Net cash inflow (outflow) from investing activities (3,475,581) (5,045,429) Net cash inflow (outflow) before financing activities (66,308,751) 111,763,340 Capital Financing activities 0 0 8,000,000 0 8,000,000 0 0 0 0 0 0 0 0 0 0 8,000,000 0 0 0 Rls(m) 0 0 Cash from capital increase 540,100 169,990 Treasury shares transactions 0 0 Funds from shares premium 0 0 49 24 32 31 Note Dividends paid (297,076) (373,595) Financial facilities received 31,923,632 25,188,228 Repayment of principal financial facilities (31,505,414) (25,119,783) Net cash inflow (outflow) from financing activities 661,242 (135,160) Net cash increase (decrease) (65,647,509) 111,628,180 Cash at the beginning of the year 150,923,336 36,547,212 Effects of changes in forex exchange rates 3,105,410 2,747,943 Cash at year end 88,381,239 150,923,336 Non-cash transactions 11,795,653 10,827,967
1. Cash received for the principal interest and late payment will solely include cash deposits directly paid by customers. Obviously, other settlement procedures such as settlements out of new facilities or foreclosures and ... which are not deemed as direct cash payment by the customer will be entered under the heading of non-cash exchanges. Capital increase Increase in registered capital Sale of shares Balance as at March 21, 2019 Consolidated adjustments Total comprehensive incomes Purchase of shares Prior years' adjustments Total other comprehensive incomes Approved dividend Sale of treasury shares Net profit Tax for other comprehensive incomes Dividend per share Parent company's shares held by subsidiaries Treasury shares Purchase of treasury shares Balance as at March 21, 2018 Difference in foreign exchange rates Other reserves Increase in unregistered capital Other comprehensive incomes (losses) after tax deduction Assets revaluation reserve Distribution and allocation Legal reserve • The accompanying explanatory notes are an integral part of these financial statements.
58 Annual Report 59 Saman Bank (Public Joint Stock Company) Balance sheet of the Parent Company or the fiscal year ended March 19, 2020
(restated) (restated) Note March 19, 2020 March 20, 2019 Liabilities and shareholders' equity Note March 19, 2020 March 20, 2019 Rls(m) Rls(m) Rls(m) Rls(m) Assets Liabilities Cash 9 91,382,999 148,681,746 Due to banks and other credit istitutions 22 48,826,518 91,897,010 Due from banks and other credit institutions 10 8,721,345 9,955,293 Customers' deposits 23 72,859,834 65,532,014 Due from government 0 0 Dividends payable 24 36,943 51,510 Loans granted to and amounts due from governmental entities 0 0 Debt securities 0 0 Loans granted to and amounts due from non-governmental entities 11 226,869,900 168,673,517 Provision for corporation tax 26 0 0 Investments in shares and other securities 12 51,248,334 16,982,591 Provisions and other liabilities 27 15,284,420 8,692,291 Due from subsidiaries and affiliates 14 5,202,307 2,428,333 Provisions for employees' termination and pension benefits 28 1,279,164 946,079 Other accounts receivable 15 66,547,058 52,688,844 Total liabilities before investment depositors' equity 138,286,879 167,118,904 Tangible fixed assets 18 5,771,863 4,551,267 Investment depositors' equity 29 397,482,600 298,775,962 Intangible assets 19 5,685,687 4,952,329 Total liabilities 535,769,479 465,894,866 Statutory deposit 20 49,042,140 35,798,262 Shareholders' equity Other assets 21 44,119,487 35,936,957 Share capital 30 8,000,000 8,000,000 Ongoing capital increase 0 0 Shares premium reserve 0 0 Legal reserve 31 2,783,614 2,460,818 Other reserves 32 3,528,218 3,528,218 Assets revaluation reserve 33 559,865 581,569 Difference in foreign exchange rates 0 0 Retained profit (loss) 3,949,945 183,669 Treasury shares 0 0 Total shareholders' equity 18,821,642 14,754,274 Total assets 554,591,120 480,649,139 Total liabilities and shareholders' equity 554,591,120 480,649,139
Customers' obligations for LCs 52-1 795,241 4,041,632 Bank's obligations for LCs 52-1 795,241 4,041,632 Customers' obligations for LGs issued 52-2 19,749,406 14,387,047 Bank's obligations for LGs issued 52-2 19,749,406 14,387,047 Customers' other obligations 52-3 57,465,699 46,410,920 Bank's other obligations 52-3 57,465,699 46,410,920 Managed funds and similar items 52-4 360,779 473,099 Managed funds and similar items 52-4 360,779 473,099
• The accompanying explanatory notes are an integral part of these financial statements.
60 Annual Report 61
Statement of profit & Loss of the parent company For the fiscal year ended March 19, 2020
(restated) 800,000 ) 0 0 0 ( 0 0 2,151,976 16,906,250 0 15,554,274 1,351,976 0 Rls(m) 0 1,915,393 18,821,642 Total hareholders' equity 0 0 1,915,393 Note 2020 2019 Rls(m) Rls(m) Income from loans granted and placements in other banks and debt securities 35 34,635,862 26,642,537
0 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) 0 0 0 Treasury shares 0 Interest expenses on deposits 37-5 (42,942,724) (36,851,249) 0 Net income from loan interests and placements in other banks (8,306,862) (10,208,712)
Fee and commission incomes 39 2,996,895 2,392,080 Fee and commission expenses 40 (3,096,222) (2,485,648) 800,000 ) 322,796 ) 1,592,597 21,704 0 0 ( 0 0 2,151,976 2,357,349 0 983,669 1,373,680 ( Rls(m) 0 1,915,393 3,949,945 Retained profit (loss) 0 0 Net incomes from fees and commissions (99,327) (93,568) Net profit (loss) from investments 36 7,674,122 5,664,472 Net profit (loss) from foreign currency exchanges and transactions 43 3,986,995 6,416,611 Other operating incomes 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) 0 0 0 Difference in foreign exchange rates 0 0 Total operating incomes 3,254,928 1,778,803
Net other incomes and expenses 44 9,906,002 10,711,905 Administrative and general expenses 45 (7,837,222) (6,505,564) 21,704 ) 21,704 ) 0 0 ( 0 0 0 0 0 0 559,865 0 581,569 ( 0 Rls(m) 0 0 559,865 Assets revaluation reserve Expenses for doubtful debts 46 (2,500,000) (1,100,000) 0
Financial expenses 47 0 0
2019 - 2020 Deprecciation/amortization expenses 48 (671,733) (541,852) Profit (loss) before income tax 2,151,975 4,343,292 0 0 0 0 0 0 0 0 0 3,528,218 0 3,528,218 0 0 Rls(m) 0 0 3,528,218 Other reserves 0 Income tax of the year 27 0 0
Income tax of previous years 0 0
Total income tax 0 0 0 322,796 0 0 0 0 0 0 0 2,460,818 0 2,460,818 0 322,796 Rls(m) 0 0 2,783,614 Legal reserve Net profit (loss) 2,151,975 4,343,292 0 Earnings per share (EPS) (Rls) 53 Basic earnings per share (Rls) 269 543
Diluled earnings per share (Rls) 269 543 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) 0 0 0 Shares premium reserve
Comprehensive statement of profit & Loss of the parent company For the fiscal 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) 0 0 0 year ended March 19, 2020 Ongoing capital increase
Note 2020 2019 Rls(m) Rls(m) 0 0 0 0 0 0 0 0 0 0 8,000,000 0 8,000,000 0 0 Rls(m) 0 0 8,000,000 Capital Net profit (loss) 2,151,975 4,343,292 Surplus of assets revaluation reserve 33 0 0 24 52 32 31 Difference in exchange rates for foreign transactions 0 0 Note Income earned from selling treasury shares 1,915,393 0 (Comprehensive profit (loss) for fiscal year) 4,067,368 4,343,292 Prior years' adjustments 49 (800,000) (920,303)
(Comprehensive profit (loss) recognized from the 3,267,368 3,422,989 reporting date of previous fiscal year) Statement of changes in shareholders' equity for the fiscal year ended March 19, 2020 Difference in foreign exchange rates Treasury shares Purchase of treasury shares Other comprehensive incomes (losses) after tax deduction Assets revaluation reserve Increase in unregistered capital Approved dividend Prior years' adjustments Capital increase Increase in registered capital Dividend per share Net profit Total comprehensive incomes Other reserves Balance as at March 21, 2019 Total other comprehensive incomes Distribution and allocation Legal reserve Tax for other comprehensive incomes Sale of treasury shares • The accompanying explanatory notes are an integral part of these financial statements. Balance as at March 19, 2020
62 Annual Report 63
Statement of cash flows for the parent company For the fiscal year ended
March 19, 2020 (restated) 920,303 ) 0 0 0 ( 0 0 4,343,292 14,754,274 0 11,331,285 3,422,989 0 Rls(m) 0 0 14,754,274 Total hareholders' equity 0 0 0 Operating activities 2020 2019 Rls(m) Rls(m) Cash received for
Interest and late payment penalty on loans granted1 3,550,337 4,906,413 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) 0 0 0 Treasury shares 0 0 0 Interest on debt securities 751,013 131,918 Fees and commissions 2,996,895 2,392,080
Interest on placements in other banks 4,470,784 1,875,012 Profit from investments 7,674,122 5,664,472 Other operating incomes 6,309,904 6,919,307 920,303 ) 3,528,218 ) 771,494 ) 4,299,712 ) ( 33,402 0 0 ( 0 0 4,343,292 4,483,381 ( 1,026,990 3,456,391 ( Rls(m) 0 0 183,669 Retained profit (loss) 0 0 Cash payment for Interest on deposits (42,942,724) (36,851,249) Fees and commissions (3,096,222) (2,485,648) Other operating expenses 0 0 Financial expenses (10,061,300) (7,487,785) 0 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) 0 0 0 Difference in foreign exchange rates 0 0 Income tax 0 0 Net cash inflow (outflow) from operating activities before changes in operating assets and liabilities (30,347,191) (24,935,480)
Cash flows from changes in operating assets and liabilities
Net increase (decrease) in liabilities Due to banks and other credit institutions (43,070,492) 82,882,696
33,402 ) 33,402 ) 0 0 ( 0 0 0 0 0 0 581,569 0 614,971 ( 0 Rls(m) 0 0 581,569 Assets revaluation reserve 0 Customers' deposits 7,327,820 39,132,681 Debt securities 0 0
2018 - 2019 Operating portion of provisions and other liabilities 6,592,128 223,245 Investment depositors' equity 98,706,638 44,393,709 Net (increase) decrease in assets 0 0 0 3,528,218 0 0 0 0 0 0 0 0 3,528,218 0 0 0 Rls(m) 0 0 3,528,218 Other reserves 0 Due from banks and other cerdit institutions 1,233,948 732,438 Principal amounts due from the government 0 0
Principal loans granted to and amounts due from governmental entities 0 0 Principal loans granted to and amounts due from non-governmental entities (32,676,862) (11,979,437) Investment in shares and other securities (34,265,743) (3,546,643) 0 771,494 0 0 0 0 0 0 0 1,689,324 0 1,689,324 0 771,494 Rls(m) 0 0 2,460,818 Legal reserve 0 Due from subsidiaries and affiliates (2,773,974) 500,510 Other accounts receivable (13,858,213) (12,329,064) Statutory deposit (12,842,508) (8,010,677) Operating portion of other assets (1,790,366) 6,982,415 Cash flows from changes in operating assets and liabilities (27,417,624) 138,981,873 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) 0 0 0 Shares premium reserve Net cash inflow (outflow) from operating activities (57,764,815) 114,046,393 Investing activities Funds paid for acquisition of tangible fixed assets (1,777,119) (2,290,229) Proceeds received from sale of tangible fixed assets 150,936 295,799 Funds paid for acquisition of non-operating real estates (1,137,409) (2,911,365) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) 0 0 0 Ongoing capital increase Proceeds received from sale of non-operating real-estates 137,905 49,313 Funds paid for acquisition of intangible assets 0 0
Proceeds received from sale of intangible assets 0 0 Net cash (outflow) from investing activities (2,625,687) (4,856,482) Net cash outflow before financing activities (60,390,502) 109,189,911 0 0 0 0 0 0 0 0 0 0 8,000,000 0 8,000,000 0 0 Rls(m) 0 0 8,000,000 Capital Financing activities Cash from capital increase 0 0 Treasury shares transactions 0 0 24 52 32 31 Note Funds from shares premium 0 0 Dividends paid (14,567) 0 Financial facilities received 11,870,000 8,495,000 Repayment of principal financial facilities (11,870,000) (8,495,000) Net cash inflow (outflow) from financing activities (14,567) 0 Net cash increase (decrease) (60,405,069) 109,189,911 Cash at the beginning of the year 148,681,746 36,749,077 Effects of changes in forex exchange rates 3,106,320 2,742,758 Cash at year end 91,382,999 148,681,746 Non-cash transactions 11,795,653 10,827,967
1. Cash received for the principal interest and late payment will solely include cash deposits directly paid by customers. Obviously, other settlement procedures such as settlements out of new facilities or foreclosures and ... which are not deemed as direct cash payment by the customer will be entered under the heading of non-cash exchanges. Difference in foreign exchange rates Treasury shares Purchase of treasury shares Other comprehensive incomes (losses) after tax deduction Assets revaluation reserve Increase in unregistered capital Approved dividend Prior years' adjustments Capital increase Increase in registered capital Dividend per share Net profit Total comprehensive incomes Other reserves Balance as at March 21, 2018 Total other comprehensive incomes Distribution and allocation Legal reserve Tax for other comprehensive incomes Sale of treasury shares Balance as at March 20, 2019 • The accompanying explanatory notes are an integral part of these financial statements.
64 Annual Report 65 Explanatory notes to the financial statements For the fiscal year ended 2- Basis of preparing financial statements March 19, 2020 The existing financial statements have been prepared on the basis of accounting standards and in accordance with applicable rules and regulations of the Central Bank of of Iran(CBI). The details of accounting standards including the changes made during the year have been defined in notes 6 and 7. 1- Introduction of the Bank 1-1- Background 3- Basis of consolidation By virtue of the license No. H/1745 of July 24, 1999 granted by the Central Bank of I. R. of Iran, Saman Bank was 3-1- The bank consolidated financial statements aggregate the assets and liabilities of the bank and of the registered with Tehran Department of Companies and Non-Commercial Entities Registration under No. 154444 subsidiaries qualifying for consolidation upon elimination of inter-group transactions and balances as well on September 1, 2009 and was listed with Tehran Stock Exchange/Iran Farabourse on November 16, 2011. Thus, as the unrealized profit and loss from intergroup transactions. the Bank has been put on the official list of prices which prevail on Tehran Stock Exchange/Iran Farabourse since 3-2- As to the acquisition of subsidiaries during the given period, the results of their operations are consolidated June 6, 2012. The Bank is headquartered in Tehran, of No. 1543, Tarkeshdouz St., Parkway Intersection, Vali-asr as of the date they are effectively controlled by the bank. As regards the subsidiaries transferred to the Ave., Tehran, Iran. The Bank’s Economic Code is 4111-1166-8595. bank, the results of their operations are consolidated until the date of their possession. 1-2- Bank’s main activities 3-3- The bank shares acquired by the subsidiaries are recorded at cost price in their accounts. Such shares are entered in accounts and reflected in the consolidated balance sheet as a declining element of the The Bank has been licensed with the main objectives of performing authorized banking operations and activities shareholders’ equity and reflected in the financial statements under the heading of “parent company’s (operations and transactions which are not prohibited for banks under the prevalent rules) under article 3 of shares held by subsidiaries”. the Articles of Association/Constitution and in accordance with the regulation No. 92/377538 of March 13, 2014 as approved by the Central Bank of I. R. of Iran. By extension, the bank’s main activities include: open various 3-4- The fiscal year of subsidiaries ends on December 21 of each year and their operations are consolidated in accounts such as savings accounts, free-interest deposit accounts, short-term or long-term investment deposit the same manner. Nonetheless, in the case any event occurs up to the reporting date of the bank’s financial accounts; issue various banking credit cards or other authorized cards and other similar accounts; receive statements which might substantially affect the consolidated financial statements in their entirety, the facilities and credit lines; grant loans in the form of applicable contracts and agreements; make fund transfers; effects thereto will be reflected in accounts by making the required adjustments in the items of the financial conduct all transactions or foreign exchange transfers/money orders; open letters of credit and carry out all statements of subsidiaries. related affairs; issue banking letters of guarantee and certificates of deposit; trade (buy and sell) participation bonds and other securities; conduct all operations related to purchase and sale of shares; safe custody services; 4- Operating and reporting currency unit carry out transactions in gold and silver; act as a broker or agent for participation bonds and for interbank operations and other credit institutions; provide insurance coverage for banking affairs; cash management for The items in the financial statements have been measured by using Rial as the currency unit in the main economic customers; open branches and expand the banking network inside and outside the country; and overall to conduct environment where Saman Bank has been operating. Such items have been presented in Iranian million rials and carry out all operations and activities in line with the objectives set and defined for the bank in the context of (shortened to Rls. M.) for better understanding and comprehension unless otherwise expressly stated in financial the prevalent rules and regulations.. statements and/or in the relevant explanatory notes. 1-3- Number of Branches 5- Using judgment and estimates The number of branches during the year is listed below: In preparing the present financial statements, the Bank management have used, made and adopted judgments, estimates, and assumptions in determining the amounts recognized in the financial statements. Arguably, the 2020 2019 actual results may vary from such estimates. However, the estimates and assumptions are based on historical Year end Average Year end Average records and the management board will continuously review them by comparing with actual events. Branches in Tehran province 78 78 83 83 Branches in other provinces 56 56 51 51 5-1- In preparing the bank financial statements, no particular judgment and estimate have been used. Branches in free zones 2 2 2 2 Overseas branches 0 0 0 0 6- Basis for measurement 136 136 136 136 Except for the material cases, the financial statements have been prepared on the basis of the historical cost price. However, for certain fixed assets including land, buildings thereon, and goodwill, the basis of revaluation method • Average means, the monthly average of the reporting period. adopted by independent experts or appraisers has been applied.
1-4- Employment status 7- Change in accounting procedures The number of bank’s employees (headcount) during the fiscal year was as follows: The bank has used and presented in its financial statements the accounting policies and methods set forth in note 8 by maintaining stability in procedures for all periods so reported.
Group Parent Company 2020 2019 2020 2019 Year end Year end Year end Average Year end Average Central headquarters and district head offices 1,438 1,602 648 721 826 801 Branches in Tehran Province 1,164 1,052 1,164 1,108 1,052 1,039 Branches in other provinces 585 585 647 623 580 580 Branches in free zones 32 32 32 32 33 32 Overseas branches 0 0 0 0 3,219 3,271 2,491 2,483 2,491 2,452
• Average means, the monthly average of the reporting period.
66 Annual Report 67 8- Summary of significant accounting policies Income and late penalties on loans granted and fees Method of recognition Interest on loans granted 8-1- Investments Current Accrual / Cash Overdue Accrual / Cash 8-1-1- Method of valuation Outstanding Accrual / Cash Doubtful Accrual / Cash Long-term investments are valuated at cost price upon deduction of any accumulated loss in each item of Late payment penalties investment and the current quickly marketable investments are valuated at market price and other current investments are valuated at net sales value of each item of investment. Current Accrual / Cash Overdue Accrual / Cash 8-1-2- Method of income recognition Outstanding Accrual / Cash Doubtful Cash The incomes earned from investments in subsidiary and affiliated companies are recognized at the time of Commission Fees approving dividends by the investee company shareholders’ general meeting (until the approval date of financial Commission fees from LGs issued Cash statements) and the incomes earned from other long-term and current investments are recognized at the time Commission fees from other banking services Cash of approving dividends by the investee company’s shareholders’ general meeting (until the balance sheet date). Commission fees from loans granted on interest-free accounts Accrual / Cash
8-2- Tangible Fixed Assets In applying the provisions of the Usury-Free Banking Law ratified on August 30, 1983 and the executive regulations 8-2-1- Except for land and buildings, the tangible fixed assets are recorded in accounts on the basis of cost. and by-laws thereto and in view of the directive No. 94/69643 of June 10, 2015 issued by the Central Bank of of The expenditures incurred for renovation and major repairs that will substantially increase the capacity or the Iran (CBI), the profit-sharing income, uses of shared resources and depositors’ share from the profit-sharing useful life of fixed assets or will fundamentally improve the output quality are regarded as capital expenditures income should be calculated and the results thereof should be reported in the statement of investment deposits and will be depreciated/amortized over the remaining useful life of related assets. The expenditures incurred performance. for minor repairs and maintenance out of the assets initial valuated performance standards for the purpose of protection or recovery of the expected economic benefits of commercial unit are regarded as current expenses 8-5- Classification of loans granted (loan portfolios) at the time of occurrence and recorded in the profit and loss account of the given period. Pursuant to the Directive for Classification of Assets Owned by Credit Institutions adopted by the Money and Credit 8-2-2- Depreciations of tangible fixed assets are calculated and recorded in accounts under the provisions Council (subject of the directive No. MB/2823 of February 25, 2007 issued by the Central Bank of of Iran (CBI)) of the Depreciation Rules under article 151 of Direct Taxation Law and on the basis of the following rates and and with regard to time factors and delay in payments as described below, the customers’ financial situation and methods: status of related industry, the loan facilities granted by the bank shall be evaluated and classified into one of the following four categories: Type of asset Depreciation rate Depreciation method 1- Current category (maximum up to 2 months as of the maturity date and/or the date of payment interruption) Buildings and installations 6 & 25% Straight line 2- Overdue category (2 to 6 months as of the maturity date and/or the date of payment interruption) Furniture, fixtures, computer hardware and devices 3, 5 & 10 years Straight line Motor vehicles 6 years Straight line 3- Outstanding category (6 to 18 months as of the maturity date and/or the date of payment interruption) POS terminals 5 years Straight line 4- Doubtful category (over 18 months as of the maturity date and/or the date of payment interruption) ATM machines 5 years Straight line • The management has not passed any judgment on the financial statements beyond the context of the Technical equipment, satellite and hub 3 & 5 years Straight line aforesaid directive. Costs for branch improvement and refurbishments 3 years Straight line 8-6- Provision for doubtful debts Tools 6 years Straight line Pursuant to the regulations governing the procedures for calculation of provisions for credit Institutions as approved by the Money and Credit Council (subject of the directive No. 91/21270 of April 20, 2012 issued by the Central Bank of of Iran (CBI)), provisions for the loan facilities granted are to be calculated and entered in accounts 8-2-3- For the fixed assets acquired and used during the month, depreciation will be calculated at the time of as follows: purchase and recorded in accounts. When each item of depreciable assets, upon availability for operation is not utilized for some time on the grounds of work stoppage or shut-down, the rate of depreciation for such period 1- General provision which is equivalent to one and half (1.5%) percent of the total loans balance will be will be equivalent to 30% of the rate which has been reflected in the above-mentioned table. calculated at the end of each year except for the balance of the loans for which specific provision has been calculated. 8-3- Intangible assets 2- Specific provision relative to the balances of overdue, outstanding and doubtful accounts will be calculated as described below after deduction of the updated value of collaterals in each loan category by exercising the 8-3-1- Intangible assets except for goodwill of business place are entered in accounts at cost. The goodwill predetermined rates: of business place will not be depreciated. However, upon a value impairment test at the end of each financial year, the required provision will be calculated if it is deemed necessary. Computer software packages used for operational and administrative purposes are depreciated on a straight line basis over 3 years. For other Loan category Rate Percentage intangible assets no depreciation/amortization is computed. Overdue loans 10 Outstanding loans 20 8-4- Recognizing incomes from the loan facilities granted, fees and late payment Doubtful loans (based on the evaluation of the customer’s repayment capability) 50 - 100 penalties The loans with the expiry of 5 years or more from their maturity for repayment of the principal amounts and On the strength of the resolution adopted by the Money and Credit Council at its 1044 session of July 16, 2005 which 3- interests thereto are required to have 100% specific provision (without considering the value of collaterals). was notified under the directive No. 772/MB of July 18, 2005 by the Central Bank of I. R. Iran, the income earned from the loans granted should be recognized on the basis of accrual system. Accordingly, by virtue of the directive • The management has not passed any judgment on the financial statements beyond the context of the No. 94/258020 of November 30, 2015 no accrual income has been recognized for the category of doubtful debts. foregoing directive. Thus on the basis of the accrual system, the method of recognizing the bank’s incomes is described as follows:
68 Annual Report 69 8-7- Provision for employees’ termination benefits 9- Cash The employees’ termination benefits are calculated and entered in accounts on the basis of the last month’s fixed salary and regular benefits for each year of their service records. Group Parent Company 8-8- Provision for employees’ pension benefits Note 2020 2019 2020 2019 Rls(m) Rls(m) Rls(m) Rls(m) The bank’s employees are under the social security coverage and thus no provision for their retirement pension Cash in hand (Rial) 2,350,122 1,628,421 2,347,217 1,628,069 has been entered in accounts. Cash in hand (Forex) 9-2 3,025,410 3,093,845 2,916,268 2,830,806 8-9- Foreign currency translation Foreign currencies placed with brokers 2,354 1,329,053 0 0 Cash in transit (Rial) 1,201 3,400 1,201 400 8-9-1- Country-wide domestic accounts Cash in transit (Forex) 0 0 0 0 Monetary items in foreign currency are translated at the official exchange rate (as announced by the Central Demand deposits placed with CBI 9-3 6,063,575 412,377 6,063,575 412,378 Bank: 90 thousand rials per US dollar and 102 thousand rials per Euro) at the balance sheet date and (unrestricted) non-monetary items recorded in foreign currency at historical cost are translated at the official rate prevailing Placements with other banks and 9-4 76,938,577 144,456,240 80,054,738 143,810,093 on the date the transaction is conducted. The differences arising out of settlement or translation of foreign credit institutions (unrestricted) currency monetary items are recognized as income or expense for the given period and then entered in the 88,381,239 150,923,336 91,382,999 148,681,746 profit and loss statement.
8-9-2- Offshore banking transactions accounts The assets and liabilities of overseas branches are translated at foreign exchange rate at the balance 9-1- The cash amounts in rials and foreign currencies placed with the Saman bank branches up to the limit of sheet date and the incomes and related expenses are translated at the foreign exchange rate prevailing on Rls. 9,987, 210/- million have been put under sufficient insurance coverage against possible accidents and the transaction date. All differences resulting from such translations are recognized in the statement of risks arising from theft and fire. comprehensive profit and loss and are classified under the heading of “shareholders’ equity” in the balance 9-2- The cash foreign currencies owned by the parent company include: 47,880,746.21 USD, 19,006,672.93 Euros, sheet. Additionally, the differences in translation of monetary items which inherently form a portion of net 39,245 UK Pounds, 1,909,384 Dirhams and 4,743/- Turkish Liras. investment in offshore banking transactions are recognized in the statement of comprehensive profit and loss and classified and titled under shareholders’ equity” in the balance sheet until the time investment is 9-3- The demand deposits placed with the Central Bank of Iran (CBI) (unrestricted) transferred. 8-10- Goodwill 2020 2019 Rls(m) Rls(m) The The accounting policy for purchase of business units will take place on the basis of acquisition method. The surplus cost of acquiring investment in subsidiaries qualified for consolidation and in affiliated companies qualified Demand deposits with CBI (Rial) (unrestricted) 5,583,451 15,593 for the application of special value (equity) method for group shares is recognized as goodwill out of the fair net Demand deposits with CBI (Forex) (unrestricted) 480,124 396,785 value of their recognizable assets at the time of acquisition and will be amortized over 10 years. The goodwill Demand deposits with Central Banks of other countries (unrestricted) 0 0 derived from acquisition of affiliates will be recorded in the consolidated balance sheet as part of the book value 6,063,575 412,378 for long-term investments in the affiliated companies. 8-11- Treasury stock/shares Under the provision of the Law Governing the Removal of Competitive Production Barriers and Enhancement 9-4- The placements in other banks and credit institutions (unrestricted) of Financial System and on the strength of the executive regulations adopted by the Securities and Exchange Organization High Council, the bank shall be allowed to hold 10 percent of its own shares. The treasury shares are Group Parent Company to be reported on the basis of cost price on the acquisition date. Any type of differential resulting from purchase 2020 2019 2020 2019 and sale of treasury shares is reflected in the shareholders’ equity section. Rls(m) Rls(m) Rls(m) Rls(m) 8-12-“Other items” in the notes to financial statements Demand deposits with other local banks and credit institutions (Rial) (unrestricted) 1,679,071 718,814 536,606 211,683 Term deposits with other local banks and credit institutions (Rial) (unrestricted) 3,424,435 1,096,698 3,424,087 2,568,597 Considering the number of items used for certain accounts, some items in every note have been reported under the heading of “Other”. The items which are entered in accounts under the title of “other” include insignificant or Demand deposits with foreign banks (Forex) (unrestricted) 21,657,121 14,976,683 20,603,532 14,340,451 less important items in terms of content and may be up to 10% of the total amount which come under such note. Term deposits with other local banks and credit institutions (Forex) (unrestricted) 128,157 131,845 128,157 131,845 Notably, the number of items under this heading has also been disclosed. Term deposits with foreign banks (Forex) (unrestricted) 50,047,885 127,530,781 55,362,356 126,557,517 Demand deposits with other local banks and credit institutions (Forex) (unrestricted) 1,908 1,419 0 0 76,938,577 144,456,240 80,054,738 143,810,093
9-5- The placements in other banks which have restrictions on their withdrawal (in terms of time and other restrictions) have been classified under the heading of “Due from banks”.
70 Annual Report 71 10- Due from banks and credit institutions Amounts in dollar Amount requested by Data entered by Saman bank on website of Saman bank under Statistics Information Department Post-control Group Parent Company letter no. obligations 210/9/M/013678 Total registered Note 2020 2019 2020 2019 Due from CBI of February 25,2014 amount Rls(m) Rls(m) Rls(m) Rls(m) Exchange rate Due from CBI 10-2 7,081,144 7,395,567 7,081,145 7,395,567 Due from other banks and credit institutions 10-3 1,656,951 2,943,372 1,640,200 2,559,726 Reference exchange rate (subsidized) 462,679,859 750,600,608 563,176,118 301,954,123 8,738,095 10,338,939 8,721,345 9,955,293 Official exchange rate 140,214,008 170,080,338 150,154,772 43,187,252 Free market rate 0 0 0 18,100,244 Exchange rate for opening LCs 0 955,547 461,132 0 10-1- The placements in other banks which do not have restrictions on their withdrawal have been classified 602,893,867 921,636,493 713,792,022 363,241,619 under the heading of “cash”. 10-2- Due from Central Bank of Iran (CBI) 10-3- Due from other banks and credit institutions
Group Parent Company Group Parent Company Note 2020 2019 2020 2019 Note 2020 2019 2020 2019 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Purchase of foreign currency from CBI- forex 10-2-1 0 0 0 0 Demand deposits with other local banks 0 0 0 0 Other amounts due from CBI- forex 0 0 0 0 and credit institutions (Rial) (restricted) Demand deposits with CBI - rial (restricted) 0 0 0 0 Demand deposits with other local banks 0 0 0 0 Demand deposits with CBI - forex (restricted) 0 0 0 0 and credit institutions (Forex) (restricted)
Demand deposits with Central Banks of Term deposits with other local banks 0 0 0 0 0 0 0 0 other countries (restricted) and credit institutions (Rial) (restricted) Term deposits with other local banks Interest receivable on statutory deposit 0 0 0 0 0 0 0 0 and credit institutions (Forex) (restricted) Other amounts due (3 items) 7,081,145 7,395,567 7,081,145 7,395,567 Demand deposits with foreign banks (Forex) 7,081,145 7,395,567 7,081,145 7,395,567 0 0 0 0 (restricted) Term deposits with foreign banks (Forex) 0 0 0 0 (restricted) 10-2-1- The balance of this account amounting to Rls. 7,081,065- million is related to the forward purchase of Facilities granted to other banks and credit 0 0 0 0 forex from the Central Bank of Iran for letters of credit under the directive No. M 60/1015 of December 7, 2013 institutions issued by the CBI and breaks down as follows: Payment of checks issued by other banks 174,575 1,425,316 157,824 1,041,670 Other amounts due (2 items) 10-3-1 1,482,376 1,518,056 1,482,376 1,518,056 2020 1,656,951 2,943,372 1,640,200 2,559,726 Reference exchange rate Official exchange rate Total
Type of Exchange Amount in Exchange Amount in Exchange Amount in Forex amount Forex amount Forex amount Currency rate Rials rate Rials rate Rials
Rls(m) Rls(m) Rls(m) Euro 62,716,454.42 46,325 2,905,340 37,188,557.46 46,325 1,722,760 99,905,011.88 46,325 4,628,100 UAE Dirham 34,270,705.10 11,437 391,954 2,563,672.39 11,437 29,321 36,834,377.49 11,437 421,275 Chinese Yuan 0 5,992 0 24,142,410.16 5,992 144,661 24,142,410.16 5,992 144,661 S. Korean Won 52,416,788,566 34 1,782,433 3,060,739,620.99 34 104,080 55,477,528,186.99 34 1,886,513 Turkish Lira 78,719.68 6,558 516 0 6,558 0 78,719.68 6,558 516 5,080,243 2,000,822 7,081,065
It is further added that owing to the follow-up actions by the bank management and until the issuance date of the financial statements, an agreement was reached between the representatives of the CBI’s Office of Statistics and Forex Obligations and representatives of Saman Bank to the effect that the Central Bank agreed to provide the amount of $ 363 million as listed below. Accordingly, on the strength of the letter No. 256646 of December 16, 2014, the Central Bank has made the settlement of forex debts due subject to the performance of a special audit of foreign currency by an independent auditor for the years 2012 and 2013. In pursuance of this accord, Sokhane-hagh Auditing Services and Institute performed an audit as requested by CBI and then Saman Bank submitted the completed audit report containing the detailed list of the assets and liabilities as well as the forex resources used to cover the years 2012 and 2013 to the CBI Deputy for Foreign Exchange Affairs under the letters No. 95-31969 of March 18, 2017 and No. 95-31972 of March 18, 2017.
72 Annual Report 73 10-3-1- Other amounts related to the claims from Saderat Bank and Pasargad Bank break down as follows: As such, a number of companies made applications for discount of the letters of credit opened and guaranteed by other banks which were processed in compliance with the foregoing standards and upon receipt of authorization Balance of receivables from the bank’s credit committees. For the discount of forex-denominated letters of credit, all credit items were 2020 2019 paid and settled on maturity dates by the banks which had opened and guaranteed such instruments. For the discounts of rial-denominated term letters of credit all items with the exception of a number of items connected Type of Type of interest rate Forex Name of bank Maturity Type of collateral Rls(m) Rls(m) with Amir Mansour Arya Group, were paid and settled by the opening banks in a normal way of business practices. currency contract (Percentage) amount For the discounting facilities provided for the companies affiliated to Amir Mansour Arya Group or for the Amounts in rial companies which were trading partners of this Group, except for two banks, Bank Saderat and Bank of Industry Factoring Saderat Rial 21 April 2011 ,23 LC documents 0 0 0 and Mine, all other banks including Pasargad Bank, Sepah Bank, Bank Melli and Bank Maskan fulfilled their (discount) obligations and paid Saman Bank the committed amounts under 18 letters of credit totaling Rls. 2,136 billion on Factoring Saderat Rial 21 April 2011 ,27 LC documents 0 0 0 the due dates. Only the two banks of of Saderat and Industry and Mine failed to honor their obligations pledged (discount) against Saman Bank. The total discounts made and the amounts guaranteed to be paid in the letters of guarantee Factoring Saderat Rial 21 August 2011 ,1 LC documents 0 0 0 (discount) by these two opening banks on the maturity dates were as follows: Factoring Saderat Rial 21 June 2011 ,28 LC documents 0 0 0 (discount) Balance of Company name LC opening bank Factoring documents Saderat Rial 21 June 2011 ,28 LC documents 0 242,400 242,400 (first beneficiary) discounting Customer (Obligor to Company's ownership (discount) traded applicant/transferor of no. pay funds on (in billion Factoring proceeds maturity) Saderat Rial 21 April 2011 ,25 LC documents 0 0 0 rials) (discount) Factoring Elit Co.- Anzali Free Trade Zone 1305959 Saderat 761 Amir Reza Moujoudi (99%) Saderat Rial 21 May 2011 ,24 LC documents 0 0 0 (discount) "Staff cooperative Co. of National Iranian Industrial and Factoring Saderat Rial 21 May 2011 ,10 LC documents 0 0 0 Fouladyar Iranian Steel Group (55% of shares) (discount) 174667 Saderat 300 Trading-Industerial Co. Iran Metal Wastes Procurement and Processing Co. (40% Factoring Saderat Rial 21 May 2011 ,10 LC documents 0 0 0 of shares)" (discount) Factoring Saderat Rial 21 May 2011 ,4 LC documents 0 0 0 Foulad Iran Public Service Co.. 7778609 Saderat 521 Foulad Staff Pension Fund(99.7%) (discount) Factoring Saderat Rial 21 April 2011 ,28 LC documents 0 0 0 IMIDRO (50.5%) & Provincial Investment Companies(30%) (discount) Khuzestan Steel Co. 13934 Saderat 807 Factoring Saderat Rial 21 March 2011 ,9 LC documents 0 0 0 (discount) Saderat 1,350 Amir Reza Taremi (95%) Factoring Foulad Spadana Co. 1124386 Saderat Rial 21 April 2011 ,23 LC documents 0 0 0 (discount) Industry & Mine 499 Mohsen Karimian (60%) 242,400 242,400 Parsian Milad Hadid Co. 1124386 Saderat 802 Amounts in forex 5,040 Factoring October ,5 Amounts collected Pasargad Euro 12.81 LC documents 15,766,893 730,401 751,419 (4,261) (discount) 2012 by March 20, 2019 Factoring September Cash collected during 2020 (536) Pasargad Euro 12.81 LC documents 5,000,000 231,625 238,290 (discount) 2012 ,29 Final court decree against Factoring October ,3 0 Pasargad Euro 12.81 LC documents 6,000,000 277,950 285,948 Bank Saderat (discount) 2012 1,239,976 1,275,657 Debt balance due 243 1,482,376 1,518,056
In order to protect the interests and rights of Saman Bank and seek compensation from the guaranteed amounts Saderat Bank and force the two banks of Saderat and Industry and Mine to fulfill their obligations, Saman Bank has taken legal actions versus these two banks by claiming the collection of proceeds derived from 8 matured letters of credit In line with the policy of expanding banking services aimed at providing finance for its customers in the areas of whereby 6 letters of credit are related to Bank Saderat and 2 letters of credit are related to Bank of Industry and rials and foreign currencies, mitigating the credit portfolio risks and maintaining the capital adequacy ratio, Saman Mine. For all of the 8 letters of credit, Saman Bank submitted a statement of claim to the trial court and requested Bank included in its loan portfolio services the discount of the term letters of credit which other banks opened attachment of the assets and property owned by the opening banks. Thus the court’s order resulted in the seizure and guaranteed their payments on due dates as of March 2011 (ending the Iranian calendar year). In the area of of the assets which belong to Saderat Bank and Bank of Industry and Mine being equivalent to the amounts foreign currencies, discounts were made without recourse to the beneficiary by paying the amounts so discounted claimed by Saman Bank. Until the date of presenting financial statements, the court made its ruling on the two into the beneficiary’s account (the discount applicant) in compliance with the appropriate rules and standards and cases, brought against the Bank of Industry and Mine in favor of Saman Bank which upon finality of decree and within the context of the regulations governing the forex letters of credit and uniform rules concerning the letters issuance of a writ for execution of the court’s decision resulted in the collection of Rls. 666 billion comprising the of credit. In the area of rials, Saman Bank discounted the locally-issued term letters of credit (in rials) opened by original amount for Rls 499 billion, late payment penalty, litigation costs and lawyer’s fee for the amount of Rls. the Iranian banks within the framework of the rules governing the local letters of credit (in rials) and applicable 167 billion. standards adopted by the Central Bank of Iran (uniform rules concerning the letters of credit) without recourse as of 2010 and early periods of 2011 and paid the amounts so discounted into the beneficiary’s account (the discount applicant) in compliance with the appropriate rules and regulations. The discounts so described were performed along with the exercise of all necessary controls following the exchange of instruments in the letters of credit and after receipt of required confirmations (encoded Faxes from correspondent banks) regarding the authenticity of opened letters of credit as well as irrevocable commitments by the opening banks for payment of the proceeds derived from such discounts to Saman Bank on due dates and in return for transfer of the beneficiary’s rights (discount applicant).
74 Annual Report 75
The legal actions taken so far concerning the letters of credit issued by the Bank Saderat are described in this table:
Original Late payment Processing cost 2019 LC number Balance due Debt status 1,495,650 2,359,728 - - 41,010,185 589,732 5,586,021 12,222,773 475,039 12,011,870 Rls(m) 2,749,547 79,594,259 Net - 168,277,815 9,123,380 1,022,325 amount sought penalty and lawyer's fees 37,306
89/3446/0029 259,922
89/3446/0030 259,915
402,914 24,222 0 Settled 90/3446/0023 143,595 90/3446/0024 143,583 37,108 1,865,490 2,340,826 0 0 49,654,028 581,558 19,148,765 16,649,490 299,786 35,198,919 Rls(m) 205,505 90,629,462 Net 0 226,161,937 8,325,801 89/3446/0063 257,600 203,654 9,425 0 Settled 1,225,199 90/3446/0010 249,681 262,450 7,491 0 Settled 90/3446/0021 260,009 314,847 26,609 0 Settled 90/3446/0022 239,991 314,776 26,668 0 Settled 90/3446/0027 240,463 291,170 24,632 0 Settled 11,001,735 ) 13,478 ) 64,006 ) 13,770 ) 112,968 ) 58,183 ) 1,016,522 ) 27,913 ) 35,369 ) 8,718,320 ) 941,206 ) ( 0 0 ( 0 0 ( ( 0 ( ( ( Rls(m) ( ( Doubtful debt Provision 0 ( ( 90/3446/0038 260,000 299,855 41,589 0 Settled
90/3446/0031 320,577 371,221 51,034 0 Settled
90/3446/0016 274,709 442,808 94,219 0 Settled
90/3446/0018 50,370 85,841 5,615 0 Settled 90/3446/0028 240,388 311,064 43,810 0 Settled 50,586 1,865,491 1,225,199 2,404,832 0 0 49,667,798 694,526 19,148,765 16,707,673 1,316,308 35,226,832 Rls(m) 240,874 99,347,782 Total 0 237,163,673 9,267,007 90/3446/0015 275,317 0 0 0 Amounts credited and settlement in 2020 90/3446/0017 300,300 395,597 51,409 0 Settled 90/3446/0037 261,215 339,357 42,512 0 Settled 90/3446/0019 260,970 0 0 0 Amounts credited and settlement in 2020 5,308,721 ) 2,437 ) 14,806 ) 258,633 ) 15,105 ) 1,850,009 ) 389,937 ) 3,711 ) 2,419,679 ) 89/3446/0072 242,400 0 0 242,400 Amounts credited and settlement in 2020 354,404 ) ( 0 0 ( 0 0 ( 0 ( ( 0 ( Rls(m) ( ( Deferred interest and fee 0 ( ( 4,541,004 4,035,554 449,235 242,400 Group
Concerning the 11 letters of credit under numbers 90/3446/0015 and 90/3446/0018 and 90/3446/0017 and 90/3446/00137 2020 27,784,667 ) 91,885 ) 10,109,779 ) 4,241,728 ) 3,846,702 ) 9,488,439 ) 6,134 ) 0 0 0 ( 0 0 ( 0 ( ( 0 ( Rls(m) ( 0 Unrealized interest 0 ( and 90/3446/0028 and 90/3446/0021 and 90/3446/0031 and 90/3446/0027 and 90/3446/0038 and 90/3446/0019 and 0 90/3446/0022 totaling the amount of Rls. 2,729,397/ million. The verdicts passed by the Bench 14 of Tehran Public Civil Court were against Bank Saderat. Following the appeal lodged by Bank Saderat, the verdicts of initial court in connection with 5 letters of credit under numbers 90/3446/0031 and 90/3446/0027 and 90/3446/0038 and 90/3446/0022 and 90/3446/0021 received finality in the Bench 18 of Tehran Provincial Court of Appeal (Revision). The final verdicts were referred to the initial court for issuance of the execution writ for enforcement of final judgments. The execution writ 4,973,201 ) 4,938,111 ) 35,090 ) 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) 0 ( Amounts received for Muzarabeh and joint civil partnership accounts 0 ( was issued and served on Bank Saderat. Despite the service of the writ, Bank Saderat did not take any action to enforce ( the judgment and thus an executory file was formed against Bank Saderat and enforcement actions were taken for the
foregoing 5 letters of credit as deemed appropriate. As result, a total amount of Rls. 3,102,282/ million- was collected and
credited to Saman Bank account and the case for the said five letters of credit was closed.
As regards the letter No. 90/3446/0018, Bank Saderat lodged the second appeal and the file was referred to the chamber 23,526 0 0 324,160 0 0 209,458 244,271 2,414 739,348 99,203 2,670,450 Rls(m) 45,547 11,327,815 Balance of late penalties receivable 0 20,535,289 22 of the Supreme Court. Upon examination of submissions and deliberations, this chamber upheld the previous verdict 4,849,097 in favor of Saman Bank and returned the file to the initial court for enforcement actions. Since Saman Bank had already
requested the court for attachment/seizure of the appellant’s property being equivalent to the remedy sought, it collected
the amount of Rls. 50,370 million for the original claim and the amount of Rls. 91,456 milion as compensation loss. As
regards the letter of credit No. 90/3446/0016 which was investigated by the Bench No. 19 of Tehran Public Civil Court,
Saman Bank collected the amount of Rls. 811735 million for the original claim and loss thereof in settlement of all its 1,606 41 0 13,799 0 0 1,855,003 1,333 233,373 2,060,593 470,699 2,217,001 Rls(m) 97,328 7,013,239 Balance of interest and fee recievable 0 14,722,459 claims and thus the case was closed. 758,444
As regards the letters of credit under numbers 90/3446/0015, 90/3446/0017, 90/3446/0019, 90/3446/0037, and
90/3446/0028, the case was reheard by the court of appeal (Bench No. 12 of Tehran Provincial Court of Appeal and final
verdicts were passed and upheld in favor of Saman Bank. Following the enforcement actions, Saman Bank recovered all its claims totalling the amount of Rls. 1,985,651million for the principal and losses under the letter of credit Nos. 28, 37 239,972,514 27,891 1,865,450 1,225,199 2,173,564 0 0 57,971,749 448,922 23,169,811 19,604,443 746,406 40,217,757 Rls(m) 107,844 88,364,518 Balance of principal, unrealized and deferred interests 0 and 17. As regards the letters of credit Nos. 15 and 19, an amount totalling Rls. 1211710 million was collected and the 4,048,960 executory file is currently open for recovery of Rls. 116,232 million as the remainder. Pasargad Bank As regards the discount of letters of credit for Pasargad Bank, this bank has filed a lawsuit versus the claims brought by Saman Bank which was referred to the Bench No. 7 of Tehran Public Civil Court for investigation. The court-appointed expert examined the evidence and pleadings submitted by both parties and, upon full inquiries into the matter, reported the breach and default by Pasargad Bank and Saman Bank’s entitlement to the claim to the court. The lawyer of Pasargad Bank has made an appeal against the court’s decision. For the second time, the matter was referred to a team of three experts where they confirmed the first expert’s opinion and Saman Bank’s entitlement to the claims brought under letters of credit in foreign exchange versus Pasargad Bank. Thus the courts passed the judgment No. 9709970226701194 of December 25, 2018 and sentenced Pasaegad Bank to pay the amount of 26766893 Euros for the original claim along with the litigation costs and lawyer’s fee. Upon service of the judgement, Pasargad Bank lodged an appeal. On the other hand, Saman Bank made a plea against this action requesting for late penalty (loss) on the non-fulfillment of obligations by Pasargad Bank. The submissions and pleadings were referred to the Tehran Court of Appeal for rehearing the appeal. Upon appointment of a rehearing session by the Tehran Court of Appeal, Bench 51, the case was reheard on May 5, 2020, while the attorneys of both parties attended the court session and pleadings and defenses were made by them. Following this rehearing, the court, for further inquiry Salaf (future contracts) Debtors of prepaid credit cards Gharzolhassaneh (Interest-free) loan Hire purchase Debtors for participation and Sukuk bonds paid Estesna'a Jealeh (service contracts) Debtors of LGs paid Murabahah (Sale contracts) Sales by installments Debtors of LCs paid Factoring Loans granted in Forex Mosharakat Madani (Civil partnership) Other loans granted in Rial Muzarabah (trade contracts)
and proof, requested the Central Bank's opinion on the statement made by Pasargad Bank claiming that it has paid the 11- Loans granted to and amounts due from non-governmental entities/persons amount due on the forex bill exchange. The case is still pending for the CBI's responses.
76 Annual Report 77
11-1- Classification of Group loans granted to and amounts due from non-governmental entities/persons based
on the regulations adopted by the Money and Credit Council (Note 8-5 to the financial statements) breaks
2019 down as follows: 2,359,728 0 0 41,053,872 589,732 5,586,021 12,222,773 475,039 12,011,870 Rls(m) 2,749,547 79,794,289 Net 0 9,275,365 168,673,517 1,022,325 37,306 1,495,650
Group
2020
Current Overdue outstanding doubtful Total 1,865,492 37,108 2,340,826 0 0 49,821,482 581,557 19,148,765 16,649,490 299,785 35,198,919 Rls(m) 205,504 90,956,917 Net 0 8,538,856 226,869,900 1,225,199 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Sales by installments 17,291,196 31,037 2,945 5,079,205 22,404,384 Jealeh (service contracts) 58,236,608 102,317 44,192 1,653,092 60,036,210 Hire purchase 668,458 1,782 14,176 1,827,107 2,511,523
11,012,516 ) 13,478 ) 64,006 ) 16,320 ) 112,968 ) 58,183 ) 1,016,522 ) 27,913 ) 35,369 ) 8,723,306 ) 944,451 ) 0 ( 0 ( 0 0 ( ( 0 ( ( ( Rls(m) ( ( Doubtful debt Provision 0 ( ( Salaf (future contracts) 25,133 0 0 27,891 53,024
Muzarabah (trade contracts) 5,981,256 9,412 7,473 3,658,360 9,656,501
Mosharakat Madani (Civil partnership) 86,093,417 443,526 1,712,954 18,455,675 106,705,572
Factoring 43,927,165 42,750 0 1,135,292 45,105,207 50,586 1,865,493 1,225,199 2,404,832 0 0 49,837,802 694,526 19,148,765 16,707,673 1,316,308 35,226,832 Rls(m) 240,874 99,680,223 Total 0 9,483,307 237,882,420 Murabahah (Sale contracts) 23,356,260 44,043 4,814 481 23,405,598 Estesna'a 0 0 0 0 0 Gharzolhassaneh (Interest-free) loan 1,209,244 8,059 2,417 5,479 1,225,199 Other loans granted in Rial 0 0 0 0 0 5,308,721 ) 2,437 ) 14,806 ) 258,633 ) 15,105 ) 1,850,009 ) 389,937 ) 3,711 ) 2,419,679 ) 354,404 ) ( 0 0 0 ( 0 ( 0 ( ( 0 ( Rls(m) ( ( Deferred interest and fee 0 ( ( Loans granted in Forex 149,009 0 0 101,709 250,718 Debtors of LCs paid 604,954 0 0 711,355 1,316,308
Parent Company Debtors of LGs paid 255,712 0 0 438,814 694,526 2020 27,758,666 ) 91,885 ) 10,083,778 ) 4,241,728 ) 3,846,702 ) 9,488,439 ) 6,134 ) Debtors for participation 0 0 0 0 ( 0 ( 0 ( ( 0 ( Rls(m) ( 0 Unrealized interest 0 0 ( 0 0 0 0 0 and Sukuk bonds paid
Debtors of prepaid credit cards 1,865,491 0 0 0 1,865,491 239,663,903 682,926 1,788,971 33,094,460 275,230,261 5,016,337 ) 4,981,247 ) 35,090 ) Less: 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) 0 ( Amounts received for Muzarabeh and joint civil partnership accounts 0 ( ( Unrealized interest (27,784,667) 0 0 0 (27,784,667)
Deferred Interest and fee 0 (105,924) (304,088) (4,898,709) (5,308,721)
Amounts received for Muzarabah (35,090) 0 0 0 (35,090) (trade contracts) 23,526 0 0 0 324,160 0 209,458 244,271 2,414 739,348 99,203 2,670,450 Rls(m) 45,547 11,327,815 Balance of late penalties receivable 0 4,849,097 20,535,289 Joint Civil partnership account (4,938,111) 0 0 0 (4,938,111)
Net loans granted before deducting
206,906,035 577,002 1,484,883 28,195,751 237,163,672
provision for doubtful debts
1,606 41 0 13,799 0 0 1,855,499 1,333 233,373 2,060,593 470,699 2,217,001 Rls(m) 97,328 7,082,935 Balance of interest and fee recievable 0 758,444 14,792,651 General provision for doubtful debts (4,168,981) 0 0 0 (4,168,981)
specific provision for doubtful debts 0 (108,620) (153,472) (6,570,662) (6,832,754)
Balance at March 19, 2020 202,737,054 468,382 1,331,411 21,625,089 226,161,937
Balance at March 20, 2019 145,312,893 434,192 7,249,366 15,281,364 168,277,815 27,891 1,865,452 1,225,199 2,173,564 0 0 58,115,256 448,922 23,169,811 19,604,443 746,406 40,217,757 Rls(m) 107,844 88,670,399 Balance of principal, unrealized and deferred interests 0 4,265,260 240,638,204 Salaf (future contracts) Debtors of prepaid credit cards Gharzolhassaneh (Interest-free) loan Hire purchase Debtors for participation and Sukuk bonds paid Estesna'a Jealeh (service contracts) Debtors of LGs paid Murabahah (Sale contracts) Sales by installments Debtors of LCs paid Factoring Loans granted in Forex Mosharakat Madani (Civil partnership) Other loans granted in Rial Muzarabah (trade contracts)
78 Annual Report 79 11-2- Classification of the loans granted by the parent company to and amounts due from non-governmental 11-3- Details of provision for doubtful debts of the parent company break down as follows: entities/persons based on the regulations adopted by the Money and Credit Council (Note 8-5 to the financial statements) breaks down as follows: 2020 2019
General Specific General Specific Total Total Parent Company provision provision provision provision
2020 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Current Overdue outstanding doubtful Total Balance at the beginning of the year 2,179,762 6,332,754 8,512,516 1,779,762 5,632,753 7,412,515 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Recovered 0 0 0 0 0 0 Sales by installments 17,291,196 31,037 2,945 5,079,205 22,404,383 Bad debts (written-off) 0 0 0 0 0 0
Jealeh (service contracts) 58,380,611 102,317 44,192 1,653,092 60,180,212 Increase or decrease during the year 2,000,000 500,000 2,500,000 400,000 700,000 1,100,000 Hire purchase 668,458 1,782 14,176 1,827,107 2,511,523 Balance at year-end 4,179,762 6,832,754 11,012,516 2,179,762 6,332,753 8,512,515 Salaf (future contracts) 25,133 0 0 27,891 53,024 Muzarabah (trade contracts) 6,197,556 9,412 7,473 3,658,360 9,872,801 Mosharakat Madani (Civil partnership) 86,468,994 443,526 1,712,954 18,455,675 107,081,149 11-3-1- The general and specific provisions are calculated and entered in accounts at the end of the fiscal year. Factoring 43,927,165 42,750 0 1,135,292 45,105,207 Murabahah (Sale contracts) 23,356,260 44,043 4,814 481 23,405,598 11-4- Loans granted by the parent company in foreign currency by a breakdown Estesna'a 0 0 0 0 0 of payment resources
Gharzolhassaneh (Interest-free) loan 1,209,244 8,059 2,417 5,479 1,225,199
Other loans granted in Rial 0 0 0 0 0 2020 2019 Loans granted in Forex 149,009 0 0 101,709 250,718 Current Overdue Outstanding Doubtful Total Total Debtors of LCs paid 604,954 0 0 711,355 1,316,309 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Debtors of LGs paid 255,712 0 0 438,814 694,526 Local resources 6,134 0 0 484,271 490,405 2,958,934
Debtors for participation Forex reserve account 0 0 0 70,945 70,945 70,945 0 0 0 0 0 and Sukuk bonds paid National Development Fund 0 0 0 0 0 0 Debtors of prepaid credit cards 1,865,491 0 0 0 1,865,491 Syndicated loans 0 0 0 0 0 0 240,399,783 682,926 1,788,971 33,094,460 275,966,140 6,134 0 0 555,216 561,349 3,029,879 Less: Unrealized interest (27,758,666) 0 0 0 (27,758,666) Deferred Interest and fee 0 (105,924) (304,088) (4,898,709) (5,308,721) 11-5- Loans granted to and amounts due from non-governmental entities/persons Amounts received for Muzarabah (35,090) 0 0 0 (35,090) in terms of maturities and interest rates (trade contracts)
Joint Civil partnership account (4,981,247) 0 0 0 (4,981,247) 2020 2019 Net loans granted before deducting 207,624,780 577,002 1,484,883 28,195,751 237,882,416 provision for doubtful debts Over 24% 21 to 24% 18 to 21% 15 to 18% 12 to 15% 12% and less Total Total
General provision for doubtful debts (4,179,762) 0 0 0 (4,179,762) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) specific provision for doubtful debts 0 (108,620) (153,472) (6,570,662) (6,832,754) 2018 and before 30,409,549 15,954,143 10,244,612 658,588 400,888 1,167,105 58,834,885 56,908,513 Balance at March 19, 2020 203,445,018 468,382 1,331,411 21,625,089 226,869,900 2019 854,804 27,600,960 57,251,355 4,104,664 4,746,699 13,041,200 107,599,682 83,657,340 Balance at March 20, 2019 145,708,595 434,192 7,249,366 15,281,364 168,673,517 2020 861,112 1,610,129 6,180,979 11,508 19,022,852 450,037 28,136,617 6,634,135 2021 671,265 1,611,234 16,640,342 25,024 1,957,371 350,782 21,256,018 9,835,255 2022 and onward 2,293,560 7,158,781 4,478,545 19,000 1,784,867 6,320,456 22,055,211 20,150,789 35,090,290 53,935,247 94,795,833 4,818,784 27,912,677 21,329,580 237,882,416 177,186,032 March 20, 2019 30,126,540 14,048,987 31,417,969 78,141,403 9,520,791 13,930,342 177,186,032
80 Annual Report 81
11-6- Loans granted to and amounts due from non-governmental entities/persons
by a breakdown of the type of collateral Total 486,795,360 ) 168,673,517 226,869,900 Rls(m) 140,802,428 ( 4,981,247 ) ( 2,500,000 ) 0 0 207,570,814 22,267,950 36,383,605 553,563,746 ( 0 ( 23,323,615 ) 0 35,327,940 ( 8,512,516 ) ( 11,012,516 ) 0 ( 35,090 ) 0
2020 2019 cards Debtors
Rls(m) Rls(m) of prepaid 1,495,650 1,865,492 Rls(m) 1,495,531 0 0 0 0 1,865,451 2,293 119 17,069,289 ( 16,699,369 ) 0 ( 2,371 ) 0 41 0 0 0 0 0 Deposits 6,160,822 6,451,900 Participation bonds and other debt securities guaranteed by the government and CBI 0 0 bonds paid and Sukuk Debtors for 0 0 Rls(m) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Participation bonds and other debt securities guaranteed by other banks 5,237 1,860 0 participation Banking letters of guarantee 1,464 501
Letters of credit traded 1,287,151 1,136,604 of paid Debtors letters of guarantee 589,731 581,558 Rls(m) 455,682 0 0 0 0 448,922 68,745 ( 70,158 ) 247,017 1,905,654 ( 1,912,414 ) 0 0 245,604 ( 112,968 ) ( 112,968 ) 0 0 Shares listed on the Stock Exchange 6,395,410 2,097,778 0
Land and buildings 32,695,702 31,589,143
Machinery 688,981 497,989 credit of paid Debtors letters of 475,039 299,786 Rls(m) 836,561 0 0 0 0 ( 1,016,522 ) 746,406 0 ( 85,098 ) 655,000 2,876,556 ( 2,966,711 ) 0 0 569,902 ( 1,016,522 ) 0 0 0 Checks and promissary notes 181,990,211 125,593,261
Other 8,657,438 9,816,997 forex Total loans and claims (with security) 237,882,416 177,186,032 Loans granted in 2,749,547 205,503 Rls(m) 1,748,534 0 0 0 0 ( 35,369 ) 97,998 68,674 ( 962,182 ) 1,036,382 0 ( 1,650,536 ) 0 0 142,874 ( 35,369 ) 0 0 0 Unsecured loans and claims (without security) 0 0 237,882,416 177,186,032 in rial loans Other granted 0 0 Rls(m) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
• Disclosure of collaterals in possession and their allocation based on the loan balances move from the most liquid ones to other items (Free hasaneh interest) respectively. Gharzol- 1,022,325 1,225,199 Rls(m) 1,022,325 0 0 0 0 0 1,225,199 0 0 0 656,179 ( 453,305 ) 0 0 0 0 0 0 0
of Estesna'e Exchange) 0 0 Rls(m) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 (Contracts
(Sale contracts) 1,215,221 ) 4,277,779 ) Murabahah 5,586,021 19,148,765 Rls(m) 5,519,150 0 0 0 0 0 1,384,138 ( 66,871 17,671,606 ( 0 18,912,977 0 235,788 0 0 0 0
Factoring 19,975,057 ) 12,011,870 35,198,918 Rls(m) 8,945,588 0 0 0 0 ( 27,913 ) 2,786,801 ( 993,546 ) 3,094,195 41,368,850 ( 0 30,339,381 0 4,887,450 ( 27,913 ) 0 0 0
Civil 303,828,255 ) partnership 79,794,289 90,956,917 Rls(m) 65,216,662 ( 2,500,000 ) 0 0 ( 8,723,306 ) 9,842,850 ( 12,233,034 ) 20,800,933 324,862,314 ( 0 86,250,721 0 18,410,749 ( 6,223,306 ) 0 0 0 ( 4,981,247 )
Muzabahah 9,275,365 8,538,855 Rls(m) 4,375,229 0 0 ( 944,451 ) 1,026,143 ( 1,263,190 ) 5,844,587 648,054 ( 1,112,427 ) 0 3,910,856 0 5,607,540 ( 944,451 ) 0 0 ( 35,090 ) 0 0
Salaf (future contracts) 37,307 37,109 Rls(m) 25,597 0 0 ( 13,478 ) 0 ( 55 ) 25,188 0 ( 143 ) 0 25,454 0 25,133 ( 13,478 ) 0 0 0 0 0
Hire purchase 2,359,728 2,340,827 Rls(m) 2,082,753 0 0 ( 64,006 ) 31,679 ( 34,700 ) 340,981 61,790 ( 77,670 ) 0 2,066,873 0 337,960 ( 64,006 ) 0 0 0 0 0
Jealeh (service contracts) 130,065,745 ) 49,821,481 Rls(m) 39,447,599 41,053,872 0 0 ( 16,320 ) 6,026,772 ( 5,584,408 ) 1,622,593 138,390,990 ( 0 47,772,844 0 2,064,957 ( 16,320 ) 0 0 0 0 0
Sales by 16,649,491 Rls(m) 9,631,217 8,052,464 12,222,773 0 0 ( 58,183 ) 1,029,855 ( 879,652 ) 2,649,739 ( 3,775,949 ) 0 13,907,732 0 2,799,942 ( 58,183 ) 0 0 0 0 0 installments 1 consisted of the collected portion accrued and cash interests during period. The interest on loans included the granted as well late payment penalty. amount increased dur ing period accrued and cash interests recognized amounts collected . Balance at March 19, 2020 Principal loan amounts Balance at March 20, 2019 Granted during the year Net loans granted Balance at March 20, 2019 Bad debts (written-off) during the year Increased or decreased during the year Balance at March 19, 2020 Interest on loans granted Collected during the year Increased during the year Balance at March 20, 2019 Collected during the year Effect of forex exchange rates during the period Balance at March 19, 2020 Effect of forex exchange rates during the period Balance at March 19, 2020 Provision for doubtful debts Balance at March 20, 2019 Amounts received Amounts received for Muzarabeh (trade contracts) Joint civil partnership account Balance at March 20, 2019 Balance at March 19, 2020 11-7- Turnover of loans granted to and amounts due from non-governmental entities/persons 1
82 Annual Report 83
11-8- Loans granted to and amounts due from non-governmental entities/
Total persons by a breakdown of customer type 3,962,412 ) 19,361,202 ) 2,095,937 22,401,763 20,172,011 ( 0 13,981,843 36,383,605 14,792,652 35,327,940 Rls(m) ( 0 20,535,288
2020 2019
cards Provision for Provision for
Debtors Gross amount Net Gross amount Net
of prepaid 0 0 0 2,293 ( 2,371 ) 0 119 119 41 41 Rls(m) 0 0 doubtful debts doubtful debts
Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Natural customers 63,914,509 (649,018) 63,265,492 43,493,954 (649,017) 42,844,936 bonds paid and Sukuk Debtors for 0 0 0 0 0 0 0 0 0 0 Rls(m) 0 0 participation Legal customers 169,724,126 (10,363,498) 159,360,628 129,856,370 (7,863,498) 121,992,873
Personnel 4,243,780 0 4,243,780 3,835,708 0 3,835,708
237,882,416 (11,012,516) 226,869,900 177,186,032 (8,512,515) 168,673,517 of paid Debtors 70,158 ) letters of guarantee ( 68,745 245,683 0 0 0 1,333 247,016 1,333 245,603 Rls(m) 0 244,270
credit of paid Debtors 39,965 ) letters of 11-9- Loans granted by the Group to the affiliated companies are as follows: ( 0 139,169 1 ( 45,133 ) 0 515,833 655,002 470,701 569,905 Rls(m) 0 99,204
Group forex Loans 714,065 ) granted in ( 0 759,611 68,674 ( 248,117 ) 0 276,771 1,036,382 97,328 142,874 Rls(m) 0 45,546 2020 2019
Provision for interest rates Current Non-current Total Net in rial loans Other doubtful debts granted 0 0 0 0 0 0 0 0 0 0 Rls(m) 0 0
Percentage Rls(m) Rls(m) Rls(m) Rls(m) Rls(m)
(Free Related parties hasaneh interest) Gharzol- 0 0 0 0 0 0 0 0 0 0 Rls(m) 0 0 Adonis Co. 18-22 111,283 0 (1,669) 109,615 15,908
of 111,283 0 (1,669) 109,615 15,908 Estesna'e Exchange) 0 0 0 0 0 0 0 0 0 0 Rls(m) 0 0 (Contracts
(Sale contracts) 11,840 ) 1,203,381 ) Murabahah ( 13,636 618 1,370,501 ( 0 233,373 66,253 66,871 235,787 Rls(m) 0 2,414 11-10- Loans granted by the parent company to subsidiaries and affiliates are as follows:
Parent Company Factoring 10,263 ) ( 171,098 2,509,615 2,615,702 ( 983,282 ) 0 2,217,001 584,581 3,094,197 4,887,451 Rls(m) 0 2,670,450 2020 2019
Average Provision for weighted Current Non-current Total Net Civil doubtful debts Interest rates 2,298,092 ) 9,934,942 ) partnership ( 1,035,207 12,590,699 8,807,643 ( 0 7,082,935 8,210,234 20,800,933 18,410,749 Rls(m) 0 11,327,814
Percentage Rls(m) Rls(m) Rls(m) Rls(m) Rls(m)
Subsidiary (affiliated) 489,038 ) Muzabahah ( 537,120 4,801,015 489,024 ( 774,152 ) 0 758,444 1,043,572 5,844,587 5,607,541 Rls(m) 0 4,849,097 companies
Saman Brokerage Co. 18 169,593 0 (2,544) 167,049 0
Salaf Sepehr Mehr 22 68,747 0 (1,031) 67,716 43,597 (future contracts) 0 0 23,526 0 ( 55 ) 0 1,606 1,661 25,187 25,132 Rls(m) 0 23,526 Hafez Iranian credit
18 53,674 0 (805) 52,869 0
scoring Co. Hire 1,923 ) purchase ( 1,433 324,651 30,246 ( 32,777 ) 0 13,799 16,330 340,981 337,960 Rls(m) 0 324,161 Kish Cell 18 214,029 0 (3,210) 210,819 0
Tondar Noor 18 0 0 0 0 346,177
Other related perties Jealeh (service contracts) 303,183 ) ( 244,489 ( 5,281,225 ) 0 1,855,498 2,064,956 268,152 5,782,282 Rls(m) 1,354,441 0 209,458 1,622,593 Adonis Co. 18-22 111,283 0 (1,669) 109,615 15,908
617,329 0 (9,259) 608,068 405,682
Sales by 23,885 ) 855,767 ) ( 24,209 ( 0 2,060,593 2,799,941 739,024 1,005,645 Rls(m) 1,910,715 0 739,348 2,649,739 installments 11-7-1- Turnover of interests accrued on the loans granted to and amounts due from entities/persons Collected during the year Increased during the year Collected during the year Effect of foreign exchange rate during the period Balance at March 19, 2020 Increased during the year Balance at March 19, 2020 Late penalties for loans granted Balance at March 20, 2019 Interests receivable on loans granted Balance at March 20, 2019 Effect of foreign exchange rate during the period Balance at March 19, 2020 Interests on loans granted Balance at March 20, 2019
84 Annual Report 85 12- Investments in shares and other securities
Group 0 Market value Rls(m) 0 12,225,343 246 260 272,679 11,515,934 11,789,119 12,225,343 2020 2019 436,224 436,224 Note Current Long-term Total Current Long-term Total
Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m)
Investment in marketable shares 12-1 18,856,826 46,257 18,903,083 12,225,343 40,099 12,265,442
Investment in other shares/stocks 12-2 3,894,082 1,363,334 5,257,416 2,724,247 712,100 3,436,347 0 Net sale value Rls(m) 0 12,225,343 246 260 272,679 11,515,934 11,789,119 436,224 12,225,343 Investment in other securities 12-3 25,432,573 1,004,642 26,437,215 357,926 741,637 1,099,563 436,224 2019 48,183,481 2,414,233 50,597,714 15,307,516 1,493,836 16,801,352
Parent Company 0 Cost Rls(m) 9,325,447 12,225,343 171 169 111,628 2,688,691 2,800,661 99,235 2,899,896 99,235 2020 2019 Note Current Long-term Total Current Long-term Total
Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Investment in marketable shares 12-1 18,856,826 46,257 18,903,083 12,225,343 40,099 12,265,442 0 Rls(m) Market value 0 18,856,826 0 0 877,164 16,941,475 17,818,638 1,038,188 18,856,826 Investment in other shares/stocks 12-2 3,894,082 2,013,954 5,908,036 2,243,932 1,373,653 3,617,585 1,038,188 Investment in other securities 12-3 25,432,573 1,004,641 26,437,215 357,926 741,638 1,099,564
48,183,481 3,064,852 51,248,334 14,827,201 2,155,390 16,982,591
Rls(m) Net sale value 0 18,856,826 0 0 877,164 17,818,638 16,941,475 1,038,188 18,856,826 1,038,188 0
Rls(m) Cost 13,516,256 18,856,826 0 0 111,630 5,241,335 5,129,705 99,235 5,340,570 99,235 0 2020 Percentage Investment 1.26 41.00 8.43 Number of shares 125,999,999 1,229,446,584 147,533,435 Origination Purchase Rights issue Purchase Purchase Purchase Around 51 million shares of Saman Electronic Payment Co. has been deposited with the Central Securities Depository and Settlem ent Company for listing coins' Parent company’s investments in marketable shares are as follows: 12-1-1-1- treasury related to the issuance of coins debt certificates. It is further added that date depositing was on June 24, 20 19, and would continue as long activities coins treasury are carried on. 12-1-1- Current investments in marketable shares Cost price adjustment Shares of companies listed on the stock exchange Takin Co. Takin Co.-rights issue Middle East Bank Saman Electronic Payment Co. Shares of companies listed on the Farabourse Saman Insurance Co. Added (Less): 12-1-
86 Annual Report 87 12-2-2- Long-term investments in other shares
Group 2020 2019 Market value Rls(m) 6 88,908 88,914 1,424 1,424 90,338 Market value Rls(m) 0 2,243,932 2,243,932 Number of Ownership Cost Book Market value Net book Market value
2019 shares value value 2019
Percentage Rls(m) Rls(m) Rls(m) Rls(m) Rls(m)
Iran Energy Exchange Co. 1,629,000 0.00027 12,480 12,480 16,945 12,480 11,424 Iran Transfo 2,800,000 0 22,733 22,733 29,707 0 0 Middle East Bank (Public) 10,499,999 0.105 5,817 5,817 0 5,967 0 Net book value Rls(m) 3 39,521 39,524 575 575 40,099 Net book value Rls(m) 0 1,396,499 1,396,499 Tehran Stock Exchange 1,600,000 0 10,076 10,076 32,282 10,076 7,385 Saman Insurance Co. 11,420,349 0 36,157 36,157 78,564 31,839 35,904 Novin Insurance Co. 6,309,910 0 17,563 17,563 17,620 0 0
Tehran Oil Refining Co. 3,000,000 0 13,605 13,605 17,248 0 0 Mobin Petrochemical Co. 5,800,000 0 55,988 55,988 59,485 0 0 Saman Electronic Payment Co. 307,830,560 0.1026 522,758 522,758 4,276,754 0 0 Market value Rls(m) 44 507,763 507,807 9,372 9,372 517,179 Market value Rls(m) 1,650,150 2,243,932 3,894,082 Tamin Maseh Rikhtegari 0 0 0 0 0 10,809 11,619 Chodan Sazan (Cast-iron) Manufacturing 4,250,000 0 19,178 19,178 35,567 0 0
Tamin Pharmaceutical Investment Co. 1,500,000 0 30,546 30,546 35,545 0 0
Shafa Pharmaceutical Investment Co. 2,488,840 0 34,067 34,067 32,311 0 0 Sarcheshmeh Copper Investment Co. 8,000,000 0 31,678 31,678 52,198 0 0 Net book value Rls(m) 3 45,679 45,682 575 575 46,257 Net book value Rls(m) 1,650,150 2,243,932.41 3,894,082 Sarv Zarrin Atlas Co. 49 0.49 490 490 0 490 0 Gohar Zamin Iron Ore Co. 1,500,000 0 24,766 24,766 26,700 0 0 Karon Cement Co. 249,999 0.0000025 250 250 4,439 614 353 Atieh Alborz Trade Development Co. 9,970 99.7 10 10 0 10 0 Segal Information Technology Pioneers Co. 2,672,000 2.78 1,338 1,338 0 2,674 0 Omid Atieh Andish Development Co. 100,000 0 100 100 0 100 0 Accumulated value impairment Rls(m) 0 0 0 0 0 0 Accumulated value impairment Rls(m) 0 0 0 Saman Investment Development Co. 189,522 0 101 101 0 101 0
2020 Behnad Bana Civil & Development Co. 260 0 4 4 0 0 0 Saman Aftab Tejarat Services Co. 1,000 0.1 20 20 0 10 0
Hooshmand-Ayandeh Zarrin Smart Chains Co. 2,500 0.25 50,000 50,000 0 0 0 Iran Farabourse Co. (Public) 140,000 0.02 60 60 0 60 0 Cost Rls(m) 3 45,679 45,682 575 575 46,257 Cost Rls(m) 1,650,150 649,208 2,299,358 Ghaemshahr Textile Co. 24,161 0 24 24 0 24 0 Exchange Information and Services Co. 490 0 490 490 0 490 0 Tehran Stock Brokers' Co. 666,664 0 217 217 13,147 50 2,886 Iran National Copper Industries 3,200,000 0 14,073 14,073 20,607 0 0 Investment Percentage 0.0004 2.156 0.537 Amin Yekom Fixed Income Fund Co. 4,204,651 0 42,660 42,660 42,340 0 0 Parand Paydar Sepehr Fund Co. 5,200,161 0 52,766 52,766 51,937 0 0 Investment Percentage 15 32.33 Tabas Coal Production Co. 0 0 0 0 0 80,950 98,920 Ofogh Kurosh Chain Store 1,000,155 0 61,796 61,796 68,958 0 0 Foolad (steel) Mobarakeh Isfahan Co. 5,000,000 0 22,913 22,913 25,935 0 0 Number of shares 2,000 24,841,635 309,535 Persian Gulf International Goods and Services 7,209,990 0.48 5 5 0 5 0 Ryan Sipa Leasing 34,200,000 0 69,657 69,657 84,633 0 0 Shahid Bahonar Copper Co. 1,000,000 0 9,225 9,225 16,910 0 0 Number of shares 4,500,000 646,666,400 Iran National Lead and Zinc Co. 2,792,953 0 76,078 76,078 74,536 0 0 Origination Purchase Purchase Purchase Alborz Pharmaceutical Raw Materials 0 0 0 0 0 3,251 2,084 Alvan Kashi (Tile) Co. 0 0 0 0 0 9,308 6,211 Central Securities Depository and Settlement Co. 47,850,000 3.19 7,975 7,975 128,895 7,975 41,696 Iran Investment Co. 27,090,000 0.3 27,090 27,090 27,090 27,090 27,090 Iran Credit Rating Co. 2,247,574 6.42 3,243 3,243 3,243 3,243 3,243 Stock Exchange Co. 1,399,996 0.07 105 105 103,608 105 4,901 Iran Energy Exchange Co. 4,566,000 0.76 4,566 4,566 51,433 4,566 43,077 Saman Aftab Tejarat Co. 148,000 14.8 2,950 2,950 2,950 1,470 1,470 Shaparak Electronic Payment Co. 22,304,000 1.31 9,315 9,315 9,315 9,315 9,315 0 0 1,294,934 1,294,934 5,440,900 223,072 307,580
Investment prepayment in C.I.P. shares 12,000,000 12 68,400 68,400 0 68,400 68,400 (Iranian Pars Technology)
Investment prepayment in Saman Investment
Investments in other shares are as follows: 0 0 0 420,629 420,629 Development Co. shares 12-1-2- Long-term investments in marketable shares 12-2-1- Current investments in other shares 1,363,334 1,363,334 5,440,900 712,100 796,609 Shares of companies listed on the Stock Exchange Iran Pump Manufacturing Co. Hamedan Glass Works Shares of companies listed on Farabourse Plastiran Total Total long term investments in marketables shares in marketables Total long term investments Mellat (Nations) Hotels Group Kardan Investment Bank 12-2-
88 Annual Report 89 Parent Company 12-2-3- Details of Saman Bank subsidiary and affiliated companies are as follows: 2020 2019
Provision for Domicile Invesment percentage Auditing firm Main activities Number of Book Market Net book Market Origination Ownership Cost accumulated shares value value value value Group Parent Company value impairment Subsidiaries Percentage Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Investment, brokerage and Saman Exchange Co. Established 21,124,980 96.46 215,625 0 215,625 215,625 215,625 215,625 Saman Brokerage Co. Tehran 0 96 Bayat Rayan financial services Saman Brokerage Co. Acquired 48,124,000 96.25 170,436 0 170,436 170,436 61,064 61,064 Credit rating services, preventive Central Securities Hafez Saman Iranian Credit Azmoon Pardaz Tehran 0 94 measures of past-due claims, and Depository and Settlement Acquired 47,850,000 3.19 7,975 0 7,975 128,895 7,975 41,696 Scoring Co. Iran Mashhood follow-up and collection of claims Co.
Azmoon Pardaz Iran Investment Co. Acquired 27,090,000 0.30 27,090 0 27,090 27,090 27,090 27,090 Saman Exchange Co. Tehran 0 96.46 Trading foreign currencies Iran Mashhood Iran Credit Rating Co. Acquired 2,247,574 6.42 3,243 0 3,243 3,243 3,243 3,243 Design, development and support Stock Exchange Co. Established 1,399,996 0.07 105 0 105 103,608 105 4,901 Saman Processing Azmoon Pardaz Tehran 0 100 of core banking-based products, Estab- (Pardazeshgaran) Iran Mashhood Hafez Saman Iranian applications and tools lished and 46,529,003 94.15 77,501 (8,331) 69,170 69,170 45,204 45,204 Credit Scoring Co. acquired Saman Financial and Economic Azmoon Pardaz Provision of technical and Tehran 0 100 Saman Processing Development Group Iran Mashhood engineering services Established 249,999,996 100 253,473 0 253,473 253,473 253,473 253,473 (Pardazeshgaran) Co. Atieh Andishan Sepehr Shargh Production of iron ingots from iron Ajabshir 100 0 Bayat Rayan Saman Financial & Services Development scrappings Economic Development Established 9,970 99.70 10 0 10 10 10 10 Provision of services in IT and Group Kish Cell Pars Co. Kish Island 0 60 Roshangar Basir telecommunication Iran Energy Exchange Acquired 4,566,000 0.76 4,566 0 4,566 51,433 4,566 43,077 Design, development and Saman Aftab Tejarat Acquired 148,000 14.80 2,950 0 2,950 2,950 1,470 1,470 Azmoon Pardaz Saman Smart Mobillet Co. Tehran 70 0 production of mobile applications Iran Mashhood Shaparak Electronic and payment service provider Acquired 22,304,000 1.31 9,315 0 9,315 9,315 9,315 9,315 Payment Co. Provision of technical and Azmoon Pardaz engineering services, purchase Kish Cell Pars Co. Acquired 72,000,000 60 840,000 0 840,000 840,000 240,000 240,000 Atieh Andishan Sepehr Mehr Co. Tehran 100 0 Iran Mashhood and sale of all authorized goods Adonis IT Service and commodities Acquired 120,955,000 24.19 161,596 0 161,596 161,596 15,483 15,483 Development Co. Affiliates 1,773,885 (8,331) 1,765,554 2,036,844 884,623 961,651 Provision of services in IT, Saleh Andishan Added: Adonis Electronic Services Co. Tehran 0 24 computer devices, electronic and Institution telecommunication equipment Prepayment for the capital increase of Acquired 18,000,000 0 180,000 0 180,000 0 0 0 Kish Cell Pars Co.
Investment prepayment in C.I.P. shares Acquired 12,000,000 12 68,400 0 68,400 68,400 68,400 68,400 (Iranian Pars Technology)
Investment prepayment in Saman Investment Acquired 1,433,702,823 35.8 0 0 0 420,629 420,629 Development Co. shares
2,022,285 (8,331) 2,013,954 2,105,243 1,373,653 1,450,680
90 Annual Report 91 12-3- Investments in other securities are as follows: 14- Amounts due from subsidiaries and affiliates
Issuer Origination Type of security Interest rate 2020 2019 Group Percentage Rls(m) Rls(m) 2020 2019 Government and state-run corporations Doubtful debts Balance due Net Net Khordad Dovom Intermediary Co. (Ltd.) Purchase Sukuk Bonds 21 29,938 29,938 provision Tir Sevom Intermediary Co. (Ltd.) Purchase Sukuk Bonds 20 1,998 1,998 Rls(m) Rls(m) Rls(m) Rls(m) Bahman Sevom Purchase Sukuk Bonds 17 34,800 34,800 Due from subsidiaries 1,463,748 0 1,463,748 628,332 Shahrivar Sevom Intermediary Co. Purchase Sukuk Bonds 20 0 291,190 Due from affiliates 0 0 0 0 Ministry of Economic Affairs & Finance (trea. 706) Purchase Treasury stocks/shares 112,349 0 1,463,748 0 1,463,748 628,332 Ministry of Economic Affairs & Finance (trea. 709) Purchase Treasury stocks/shares 67,990 0 Ministry of Economic Affairs & Finance (trea. 715) Purchase Treasury stocks/shares 117,115 0 Ministry of Economic Affairs & Finance (trea. 802) Purchase Treasury stocks/shares 1,352 0 Parent Company Ministry of Economic Affairs & Finance (partic. 9) Purchase Governmental Benefit Bonds 15 4,551,663 0 2020 2019 Shahrivar Chaharom Intermediary Co. (benef. 1) Purchase Governmental Benefit Bonds 20 500,080 0 Doubtful debts Balance due Net Net provision Ministry of Economic Affairs & Finance (trea. 801) Purchase Treasury stocks/shares 1,971 0 Rls(m) Rls(m) Rls(m) Rls(m) Ministry of Economic Affairs & Finance (partic. 22) Purchase Morabaha bonds 18 10,000,630 0 Due from subsidiaries 5,202,307 0 5,202,307 2,428,333 Khordad Intermediary Co. (benef. 51) Purchase Governmental Benefit Bonds 18 3,000,081 0 Due from affiliates 0 0 0 0 Ministry of Economic Affairs & Finance (Salaf 2997) Purchase Salaf bonds 18 1,088,599 0 5,202,307 0 5,202,307 2,428,333 Khordad Intermediary Co. (benef. 52) Purchase Governmental Benefit Bonds 18 1,926,757 0 Ministry of Economic Affairs & Finance (Salaf 984) Purchase Salaf bonds 2,024,205 0 Benefit bonds (benef. 61) Purchase Governmental Benefit Bonds 18 1,973,045 0 Considering the fact that the fiscal year of Group Companies will end three months earlier than the Banks 14-1- end of the bank’s fiscal year, the amounts due from subsidiaries have not been entirely eliminated in Other companies and mutual funds consolidated operations. Whereas such amounts do not affect the consolidated financial statements in its Saman Joint Venture Fund - Yekom Establishment Privileged investment unit 45.27 10,000 10,000 entirety, adjustments have not been therein made (in accordance with the accounting standards). Agah Charity Fund - Yekom Establishment Privileged investment unit 38.71 2,500 2,500 14-2- The balances of the parent company’s receivables from subsidiaries and affiliates based on the Amin Saman Mutual Fund Establishment Privileged investment unit 18.43 10,000 10,000 inter-group transactions consist of the following: Iran Capital Market Development Mutual Fund Establishment Ordinary investment unit 57.71 35,000 35,000 2020 Ordinary & privileged Negin Saman Fixed-Income Fund Establishment 16.99 655,818 561,934 Provisional Provisional Assets and Assets and Intergroup invest unit Name of subsidiary/ Services Services amounts amounts Dividends Dividends investments investments interest- Total affiliate purchased sold received paid recievable payable sold acquired free loans Sahm Ashna Yekom special market-making fund Purchase Ordinary investment unit 39.59 291,323 122,203 (on-account) (on-account) Total investments in other securities 26,437,215 1,099,564 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Saman Exchange Co. 0 0 0 0 0 976,717 0 289,384 0 1,266,100
Hafez Saman Iranian 0 0 0 0 0 56,502 0 83,495 0 139,997 Credit Scoring Co.
13- Long-term investments in affiliated companies Saman Smart Financial Co. 0 0 0 0 0 0 0 0 0 0 (Mobillet) Group Saman Processing Share of net Share of total net (Pardazeshgaran) 0 0 0 0 0 122 0 1,469 0 1,591 Goodwill assets assets Co.
Saman Brokerage Rls(m) Rls(m) Rls(m) 0 0 0 0 0 696 0 170,962 0 171,657 Co. Balance at the beginning of the year 1,558,601 110,360 1,668,961 Saman Financial Asquisition during the year 0 0 0 and Economic 0 2,816,198 0 0 0 18 0 550,952 0 3,367,168 Development Group Partial payment of subscribed capital 0 0 0 Atieh Andishan Share of profit in affiliates before goodwill depreciation 10,634 0 10,634 0 0 0 0 0 9,304 0 0 0 9,304 Sepehr Mehr Dividends received or receivable during the year 0 0 0 Kish Cell Pars Co. 0 0 0 0 0 68,791 0 0 0 68,791 Goodwil depreciation 0 0 0 Atieh Andishan Sepehr Shargh 0 0 0 0 0 177,699 0 0 0 177,699 Change in category/clssification (1,453,745) (110,360) (1,564,105) Services Development Co. 115,490 0 115,490 Total amounts due from subsidiaries and 0 2,816,198 0 0 0 1,289,847 0 1,096,261 0 5,202,307 affiliates Net transactions 0 profit (loss)
92 Annual Report 93 2019 15- Other accounts receivable Provisional Name of Assets and Assets and Provisional Intergroup Services Services amounts Dividends Dividends subsidiary/ investments investments amounts paid interest- Total purchased sold received recievable payable affiliate sold acquired (on-account) free loans (on-account) Group Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) 2020 2019 Saman Exchange 0 0 5,564 0 0 5,086 0 241,151 0 251,801 Specific provision General provision Co. Balance due Net Net for doubtful debts for doubtful debts Hafez Saman Iranian Credit 0 0 0 0 0 1,764 0 204,485 0 206,249 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Scoring Co. Dividends receivable 1,798,264 0 0 1,798,264 1,514,705 Saman Processing Interest accrued (realized) on (Pardazeshgaran) 0 19,227 0 0 0 12,835 0 0 0 32,062 0 0 0 0 0 Co. participation bonds
Saman Brokerage 0 0 0 0 0 3,030 0 58,440 0 61,469 Amounts due from personnel 0 0 0 0 0 Co. Temporary debtors 67,574,386 (321,302) (14,718) 67,238,366 53,013,872 Saman Financial and Economic 0 1,454,397 0 0 0 0 0 213,052 0 1,667,449 69,372,650 (321,302) (14,718) 69,036,630 54,528,577 Development Group
Atieh Andishan 0 0 0 0 0 9,304 0 0 0 9,304 Sepehr Mehr Parent Company Atieh Andishan Sepehr Shargh 0 0 0 0 0 200,000 0 0 0 200,000 Note 2020 2019 Services Development Co. Specific provision General provision Balance due Net Net for doubtful debts for doubtful debts Total amounts due from subsidiaries 0 1,473,624 5,564 0 0 232,019 0 717,128 0 2,428,333 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) and affiliates Dividends receivable 15-1 1,541,676 0 0 1,541,676 1,307,774 Net transactions 0 Interest accrued (realized) profit (loss) 0 0 0 0 0 on participation bonds
Amounts due from personnel 0 0 0 0 0 Temporary debtors 15-2 65,174,151 (154,051) (14,718) 65,005,382 51,381,070 14-3- Pursuant to the directive adopted by the Money and Credit Council (Note 8-6), the amounts due from subsidiary and affiliated companies are classified as follows: 66,715,827 (154,051) (14,718) 66,547,058 52,688,844
2020
Doubtful 15-1- The balances of dividends receivable excluding the dividends from subsidiaries and affiliates are as follows: Current Overdue Outstanding Total debts
Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) 2020 2019 Due from subsidiaries 5,202,307 0 0 0 5,202,307 Rls(m) Rls(m) Due from affiliates 0 0 0 0 0 Companies listed on the Stock Exchange and Farabourse Shomal Drilling Co. 11,019 11,019 Net amounts due from subsidiaries and affiliates before 5,202,307 0 0 0 0 5,202,307 deduction of doubtful debts provision Housing Investment Co. 3,090 4,090 Mines and Metals Development Co. 358 358 General provision for doubtful debts 0 0 0 0 0 Tooka Foulad Investment 10,674 12,751 Specific provision for doubtful debts 0 0 0 0 0 Tooka Transport Co. 978 978 Balance at March 19, 2020 5,202,307 0 0 0 5,202,307 Rayan Saipa 28 28 Balance at March 20, 2019 2,428,333 0 0 0 2,428,333 Mapna Group 0 1,623 Saman Insurance Co. 7 1,946 Iran Pump Manufacturing Co. 4,219 4,218 Hamedan Glass Works 13,452 12,242 Middle East Bank 0 0 Saman Kish Electronic Payment Co. 1,083,370 834,104 Other 2,709 4,976 1,129,903 888,334 Other companies Saman Aftab Tejarat 0 3,705 Iran Investment 1,625 1,625 Kardan Investment Bank 389,667 414,109 Saman Investment Development Co. 20,481 0 411,773 419,439 Balance of dividends receivable 1,541,676 1,307,774
94 Annual Report 95 15-2- Balances due by temporary debtors consist of the following: 16- Orders and prepayments
2020 2019 Group Rls(m) Rls(m) 2020 2019 Items related to loan facilities Rls(m) Rls(m) Proceeding and debt collection costs 3,019,163 2,859,421 Prepayments 309,740 48,630 3,019,163 2,859,421 Orders 688 1,478 Items unrelated to loan facilities 310,428 50,108 Debtors for sale of assets 44,977,864 42,695,140 Debtors for sale of investments 6,621,856 4,367,454 Debtors for financial fraud (abuses) 0 0 Temporary debtors of forex 10,168,976 1,054,686 17- Inventory (materials and goods) Other 386,293 573,137 Total items unrelated to loan facilities 62,154,988 48,690,419 Group 65,174,151 51,549,840 2020 2019 Rls(m) Rls(m) Inventory in stock 736,662 394,545 15-2-1-Debtors for sale and assets break down as follows: Ongoing projects (in the process of completion) 61,958 3,683 798,620 398,228 2020 2019 Rls(m) Rls(m) Behnad Bana Co. 29,092,147 24,988,094 17-1- The inventory of goods and spare parts owned by the Group has been put under insurance coverage up Tamin Atieh Karkonan (Personnel Savings) Co. 10,683,619 12,460,627 to the amount of Rls. 280,000/- million against possible risks and accidents resulting from fire, flood and Sarmand Holding Co. 2,669,850 0 earthquake. Idepardazan (Idea Processors) Co. 2,300,000 0 Other items 232,248 5,246,419 44,977,864 42,695,140
15-2-1-The amounts of Rls. 91,642 million (equivalent to the amount of 2,694,948,349.85 South Korean won), is the balance related to the directive No. 60/1015 of December 7, 2013 issued by the CBI and the amount of Rls. 776,354 million (equivalent to 18,484,610 US dollars) of this balance is related to the allocation of foreign exchange for overseas students. 15-3- Pursuant to the directive adopted by the Money and Credit Council (Note 8-6), other accounts receivable are classified as follows:
2020 Current Overdue Outstanding Doubtful Total Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Dividends receivable 1,541,676 0 0 0 1,541,676 Interests accrued (realized) on participation bonds 0 0 0 0 0 Amount due from personnel 0 0 0 0 0 Temporary debtors 62,154,988 0 0 3,019,163 65,174,151
Net other accounts receivable before deduction of doubtful 63,696,664 0 0 3,019,163 66,715,827 debt provision
General provision for doubtful debts (14,718) 0 0 0 (14,718) Specific provision for doubtful debts 0 0 0 (154,051) (154,052) Balance at March 19, 2020 63,681,946 0 0 2,865,112 66,547,058 Balance at March 20,2019 49,983,475 0 0 2,705,370 52,688,844
96 Annual Report 97
48,443 ) 8,418 ) 1,072,487 ) 159,355 ) 720,171 ) 28,192 ) 26,821 ) 290,589 ) 219,008 ) 1,072,487 ) 291,038 ) 44,725 ) 16,866 ) 721,893 ) 28,629 ) 26,821 ) 2,972,625 5,771,863 4,551,267 2,834,474 ( ( ( 7,037,013 ( ( 0 2,448,849 2,485,746 405,589 0 8,606,336 ( 2,091,570 422,368 ( ( 3,362,716 5,064,194 ( 0 ( 8,152,008 3,870,527 ( ( 3,220,234 3,827,095 534,937 5,405,118 2,746,889 7,861,391 ( 11,081,634 0 ( 2,340,941 434,577 ( ( 3,374,316 6,168,038 Total Rls(m) Total Rls(m)
491,451 ) 502,121 ) 502,121 ) 491,451 ) 142,077 211,059 231,317 Capital items in stock 0 ( ( 211,059 0 511,709 231,317 Rls(m) 0 0 571,103 142,077 0 0 463,740 ( 259,027 190,045 259,027 231,317 ( 231,317 Capital items in stock Rls(m) 0 0 571,103 190,045
137,817 ) 31,623 ) 31,623 ) 158,163 ) 19,555 11,874 327,318 Orders and capital prepayments 0 ( ( 11,874 453,261 0 327,318 Rls(m) 0 0 23,943 19,555 0 0 484,491 ( 25,832 31,791 25,832 352,160 ( 352,160 Orders and capital prepayments Rls(m) 0 0 25,665 31,791
412,992 ) 188,250 ) 412,992 ) 2,293 ) 188,250 ) 601,242 49,000 379,000 Assets in process of completion 330,000 0 0 ( 49,000 0 379,000 Rls(m) 0 ( 601,242 49,000 0 0 1,023,446 ( 305,702 857,944 305,702 1,326,855 ( 1,326,855 Assets in process of completion Rls(m) 0 ( 857,944 49,000
232,210 ) 232,210 ) 51,767 217,873 207,959 208,419 0 Renovation and improvement in leased buildings 276,903 0 ( 64,131 371,685 0 0 153,812 54,608 0 136,035 0 416,378 17,776 Rls(m) 0 0 187,802 119,752 0 276,903 0 64,131 371,685 0 51,767 0 208,419 217,873 54,607 153,813 207,959 ( 0 416,378 136,035 0 17,776 Renovation and improvement in leased buildings Rls(m) 0 0 187,802 119,752
Parent Company Group 48,443 ) 46,932 ) 64,657 ) 24,949 ) 25,974 ) 47,084 ) 44,725 ) 123 ) 64,471 ) 25,386 ) 26,423 ) 907,365 943,916 912,412 2,424,105 ( 361,226 ( ( 3,086,879 0 0 0 293,033 2,179,515 0 1,843,562 ( 3,336,516 360,901 Furniture and fixtures Rls(m) 0 ( 2,787,478 325,375 ( 386,233 0 3,153,192 0 ( 978,524 2,472,975 943,816 ( 308,447 2,209,376 954,890 ( 0 1,869,941 3,427,865 ( 364,821 Furniture and fixtures Rls(m) 0 ( 2,848,465 331,149
2,609 ) 2,609 ) 368 ) 368 ) 2,609 ) 2,609 ) 368 ) 368 ) 34,467 42,892 31,164 91,839 0 1 12,645 112,966 ( 0 ( 15,949 78,499 64,039 0 ( 123,004 14,828 Vehicles Rls(m) ( 0 0 106,931 6,402 ( 34 0 126,746 0 50,709 0 100,529 41,577 ( 17,968 39,167 15,525 85,169 70,003 0 139,696 ( 15,534 Vehicles Rls(m) 0 ( 120,711 6,402 0
) ) 2,195 ) 5 5 34,555 ) 7,337 ) 3,365 8,510 80,937 22,533 0 15,110 64,657 25,898 ( 0 0 0 22,533 17,283 ( 0 103,470 5,255 Installations Rls(m) ( 25,792 0 0 111 ( 236,862 0 441,163 0 272,867 256,275 0 257,540 ( 96,580 374,386 183,623 3,783 647,252 181,141 0 0 2,481 Equipment Rls(m) 0 0 437,416 3,747
) ) 60,068 ) 5,810 ) 2,871 ) 23,888 ) 257,599 ) 10,198 ) 5,770 ) 416 ) 5 5 910,023 746,927 1,067,252 87,577 0 126,601 126,886 961,411 ( 0 41,999 ( 30,651 51,388 ( 0 1,154,829 23,608 Buildings Rls(m) ( ( 777,578 ( 475,517 18,564 ( 0 29,473 0 12,026 23,201 0 6,213 ( 357 83,722 64,657 23,260 106,923 17,341 ( 0 5,924 Installations Rls(m) ( 29,367 0 111
47,551 ) 52,105 ) 16,623 ) 81,439 ) 257,599 ) 6,382 ) 2,871 ) 23,888 ) 10,198 ) 2,206,242 415,739 2,534,505 0 0 374,038 2,206,242 1,776 2,534,505 ( 0 0 0 0 0 0 0 0 Land Rls(m) ( 67,717 415,739 ( 1,791,514 140,953 268,273 ( 1,103,496 0 ( 142,244 852,827 0 1,011,847 ( 56,977 1,289,038 1,431,282 66,479 91,649 ( 0 28,040 Buildings Rls(m) ( 919,307 ( 475,873
47,551 ) 52,105 ) 16,623 ) 1,776 711,981 ( 2,335,691 0 67,717 0 545,187 0 2,335,691 3,001,897 3,001,897 0 0 0 0 0 Land Rls(m) ( 545,187 ( 1,791,514 At March 20, 2019 Book value At March 21, 2018 At March 19, 2020 Balance at March 19, 2020 Transfers and other changes Increased during the year Balance at March 20, 2019 Transfers and other changes Balance at March 19, 2020 Assets sold Increase (decrease) from revaluation Depreciation during the year and value impairment Assets sold Accumulated depreciation and accumulated value impairment Balance at March 21, 2018 Balance at March 20, 2019 Assets sold Transfers and other changes Depreciation during the year and value impairment Assets sold Transfers and other changes Cost price Balance at March 21, 2018 Increase (decrease) from revaluation Increased during the year Transfers and other changes Increased during the year Assets sold Balance at March 20, 2019 Increase (decrease) from revaluation Transfers and other changes Balance at March 19, 2020 Book value At March 21, 2018 Transfers and other changes At March 20, 2019 Assets sold Depreciation during the year and value impairment At March 19, 2020 Balance at March 19, 2020 Accumulated depreciation and accumulated value impairment Balance at March 21, 2018 Balance at March 20, 2019 Assets sold Transfers and other changes Depreciation during the year and value impairment Assets sold Cost price Balance at March 21, 2018 Increase (decrease) from revaluation Increased during the year 18- Tangible fixed assets
98 Annual Report 99 18-1- The book value of revaluated land and buildings on the cost price basis is described as follows: 19- Intangible assets
2020 2019 Group Based on cost price Based on revaluation Based on cost price Based on revaluation Goodwill for Software Royalty to use Rls(m) Rls(m) Rls(m) Rls(m) Software Total place of business development public utilities Land 2,164,277 2,534,504 781,500 2,206,242 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Buildings 331,739 1,154,828 1,007,136 961,411 Cost price 2,496,016 3,689,332 1,788,636 3,167,652 Balance at March 21, 2018 2,022,316 363,736 0 37,809 2,423,861 Increased during the year 2,435,403 477,417 0 731 2,913,551 In-company development plan 0 0 0 0 0 18-2- All tangible fixed assets owned by the bank have been insured up to the amount of Rls. 4,179,926/- million against possible risks and accidents arising from fire, flood and earthquake. Motor vehicles have also Increase (decrease) from revaluation (6,581) 0 0 0 (6,581) been put under body insurance coverage up to the amount of Rls. 282,830/- million and a large amount of Assets sold (49,313) 0 0 0 (49,313) the properties which are being foreclosed is related to the real estate owned by Bazar Kaffashha Branch. Transfers and other changes 0 0 0 0 0 Furthermore, the tangible fixed assets and motor vehicles owned by the group have been insured up to Balance at March 20, 2019 4,401,825 841,153 0 38,540 5,281,518 the amount of Rls. 4,133,415/- million against possible risks and accidents resulting from fire, flood and earthquake. Balance at March 21, 2019 4,401,825 841,153 0 38,540 5,281,518 Increased during the year 867,764 688,298 0 117,300 1,673,362 In-company development plan 0 0 0 0 0 Increase (decrease) from revaluation 0 0 0 0 0 Assets sold (137,794) (9,400) 0 0 (147,194) Transfers and other changes 0 0 0 (110) (110) Balance at March 19, 2020 5,131,795 1,520,051 0 155,730 6,807,576
Accumulated depreciation and accumulated value impairment
Balance at March 21, 2018 0 (216,051) 0 (15,030) (231,081) Depreciation during the year 0 (121,552) 0 0 (121,552) Value impairment loss 0 0 0 0 0 Assets sold 0 0 0 0 0 Transfers and other changes 0 0 0 0 0 Balance at March 20, 2019 0 (337,603) 0 (15,030) (352,633) Balance at March 21, 2019 0 (337,603) 0 (15,030) (352,633) Depreciation during the year 0 (471,852) 0 (39,205) (511,057) Value impairment loss 0 0 0 0 0 Assets sold 0 3,025 0 0 3,025 Transfers and other changes 0 0 0 0 0 Balance at March 19, 2020 0 (806,430) 0 (54,235) (860,665) Book value At March 21, 2018 2,022,316 147,685 0 22,779 2,192,780 At March 20, 2019 4,401,825 503,551 0 23,510 4,928,883 At March 19, 2020 5,131,795 713,621 0 101,495 5,946,909
100 Annual Report 101 Parent Company 19-1- The book value of the revaluated goodwill for place of business on the cost price basis is described as follows: Goodwill for Software Royalty to use Software Total place of business development public utilities 2020 2019
Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Based on cost price Based on revaluation Based on cost price Based on revaluation Rls(m) Rls(m) Rls(m) Rls(m) Cost price Goodwill for place of business 3,145,491 5,131,796 1,036,995 4,401,825 Balance at March 21, 2018 2,022,316 339,061 0 22,051 2,383,428 3,145,491 5,131,796 1,036,995 4,401,825 Increased during the year 2,435,403 475,473 0 489 2,911,365 In-company development plan 0 0 0 0 0 Increase (decrease) from revaluation (6,581) 0 0 0 (6,581) Assets sold (49,313) 0 0 0 (49,313) 20- Statutory deposit Transfers and other changes 0 0 0 0 0 2020 2019 Balance at March 20, 2019 4,401,825 814,534 0 22,540 5,238,899 Rls(m) Rls(m) Balance at March 21, 2019 4,401,825 814,534 0 22,540 5,238,899 Statutory deposit - deposits of mainland branches (rial) Increased during the year 867,764 264,083 0 5,560 1,137,409 48,775,094 35,610,882 Statutory deposit - deposits of mainland branches (forex) 0 0 In-company development plan 0 0 0 0 0 Statutory deposit - deposits of free zones branches (rial) 267,046 187,380 Increase (decrease) from revaluation 0 0 0 0 0 Statutory deposit - deposits of free zones branches (forex) 0 0 Assets sold (137,794) 0 0 0 (137,794) Statutory deposit placed with central banks of other countries (forex) 0 0 Transfers and other changes 0 0 0 (110) (110) 49,042,140 35,798,262 Balance at March 19, 2020 5,131,796 1,078,617 0 27,991 6,238,404
Accumulated depreciation and accumulated value impairment
Balance at March 21, 2018 0 0 0 0 0 20-1- The statutory deposits placed with the Central Bank of Iran pursuant to paragraph 3 of article 14 of the Monetary and Banking Law has been calculated on the basis of the rates determined by the Money and Depreciation during the year 0 (119,482) 0 0 (119,482) Credit Council and approved by the Central Bank of Iran. Value impairment loss 0 (167,086) 0 0 (167,086) Assets sold 0 0 0 0 0 21- Other assets Transfers and other changes 0 0 0 0 0 Balance at March 20, 2019 0 (286,568) 0 0 (286,568) Group Parent Company Balance at March 21, 2019 0 (286,568) 0 0 (286,568) Note 2020 2019 2020 2019 Depreciation during the year 0 (266,147) 0 0 (266,147) Rls(m) Rls(m) Rls(m) Rls(m) Value impairment loss 0 0 0 0 0 Customers' net debts for term LCs 21-1 97,888 307,802 97,888 307,802 Assets sold 0 0 0 0 0 Non-operating real estates 0 0 0 0 Transfers and other changes 0 0 0 0 0 Foreclosed collaterals 21-2 32,135,948 25,161,015 32,260,004 25,352,012 Balance at March 19, 2020 0 (552,715) 0 0 (552,715) Advance deposits for leased buildings 2,111,812 2,065,196 2,107,926 2,065,196 Book value Assets insurance prepayment 4,478 0 0 0 At March 21, 2018 2,022,316 339,061 0 22,051 2,383,427 Advance deposits for leased branches 11,222 12,016 11,222 12,016 At March 20, 2019 4,401,825 527,966 0 22,540 4,952,329 Inventory of supplies 0 0 0 0 At March 19, 2020 5,131,796 525,902 0 27,991 0 5,685,687 Items in transit 0 0 0 0 Gold and silver 0 0 0 0 Tax stamp 3,635 2,598 3,635 2,598 Other prepayments 6,194 8,066 0 0 Tax and insurance prepayment 814,225 701,701 814,225 701,701 Consolidated goodwill 21-3 351,365 42,997 0 0 Differences in forex exchange rates 3,506,798 3,528,218 3,506,799 3,528,218 Payment for new acquisition (equity) 1,614,966 1,449,445 1,614,966 1,449,445 Other 21-4 3,623,227 2,383,971 3,702,822 2,517,969 44,281,757 35,663,025 44,119,487 35,936,957
102 Annual Report 103 21-1- Customers’ net debts for term LCs 21-3- Goodwill Details of goodwill from the consolidated statements under note (8-10 of significant accounting policies) are as 2020 2019 follows: Rls(m) Rls(m) Group Customers' debts for term LCs - (rial) 32,945 13,585 2020 2019 Customers' debts for term LCs - (forex) 102,480 319,503 Rls(m) Rls(m) 135,425 333,088 Cost at the beginning of the year 84,469 84,467 Less: Goodwill acquired during the year 351,594 0 Advances and upfronts payments received for term LCs - (rial) (2,580) (2,580) Adjusted goodwill from sale 0 2 Advances and upfronts payments received for term LCs - (forex) (34,957) (22,706) Cost at year-end 436,063 84,469 General provision for doubtful debts 0 0 Accumulated depreciation at the beginning of the year (41,472) (33,364) 97,888 307,802 Depreciation during the year (43,226) (8,108) Adjustment of accumulated depreciation from sale 0 0 Accumulated depreciation at year-end (84,697) (41,472) 21-2- Foreclosed collaterals/properties Book value 351,365 42,997 The composition of the foreclosed collaterals balance breaks down as follows:
Foreclosed during Sold/transferred 22- Due to banks and other credit institutions 2019 2020 the year during the year
Rls(m) Rls(m) Rls(m) Rls(m) Group Parent Company Movable properties Note 2020 2019 2019 2020 Furniture 0 0 0 0 Rls(m) Rls(m) Rls(m) Rls(m) Equipment 0 0 0 0 Central Bank of Iran (CBI) Goods 0 0 0 0 Deposits (rial) 0 0 0 0 Motor vehicles 0 0 0 0 Demand deposits (forex) 37,216,488 82,297,512 37,216,488 82,297,512 Shares 0 0 0 0 Term deposits (forex) 452,327 0 452,327 0 Debit balance of current account for overdraft 0 0 0 0 Other securities 0 0 0 0 Debt for differences in foreign exchange rates 2,841,317 2,810,340 2,841,317 2,810,340 0 0 0 0 Debt for foreign exchange reserves account 0 0 0 0 Immovable properties Facilities received (rial) 0 0 0 0 Residential properties 7,309,898 4,869,043 (1,942,119) 10,236,823 Facilities received (forex) 0 0 0 0 Business/Offiice properties 10,660,522 6,491,435 (3,124,449) 14,027,507 Other 0 0 0 0 Factory/plant 4,251,085 98,823 (21,681) 4,328,227 Total amounts due to CBI 40,510,132 85,107,852 40,510,132 85,107,852 Land 3,130,507 803,078 (266,137) 3,667,447 Local banks and credit institutions 25,352,012 12,262,379 (5,354,386) 32,260,004 Demand deposits (rial) 377 377 377 377 25,352,012 12,262,379 (5,354,386) 32,260,004 Demand deposits (forex) 2,720,821 4,186,535 2,720,821 4,186,535 Accumulated value impairement 0 0 Payment of checks issued by other banks 0 0 0 0 25,352,012 32,260,004 Facilities received (rial) 442,484 381,297 0 0 Profit (loss) from sales 7,415,496 4,404,039 Facilities received (forex) 0 0 0 0 Other 22-1 5,594,413 2,601,448 5,594,413 2,601,448 Total amounts due to local banks and credit 8,758,095 7,169,657 8,315,611 6,788,360 institutions 21-2-1- The age of the balance of immovable foreclosed collaterals breaks down as follows: Foreign banks Demand deposits (rial) 0 0 0 0 2020 2019 Demand deposits (forex) 775 798 775 798 Rls(m) Rls(m) Facilities received (forex) 0 0 0 0 Less than a year from the foreclosure date 12,462,718 1,875,274 Debit balance of current account for overdraft 0 0 0 0 One or two years from the foreclosure date 1,457,454 8,282,672 Other 0 0 0 0 Total amounts due to foreign banks 775 798 775 798 Over two years from the foreclosure date 18,339,832 15,194,066 49,269,001 92,278,307 48,826,518 91,897,010 32,260,004 25,352,012
21-2-2- The profit (loss) from the sale of foreclosed collaterals has been disclosed in the statement of profit 22-1- This amount represents the difference in settlement time via the Shetab Payment System in Saman Bank and loss under note No. 44. and the CBI (cut-off period). 21-2-3- The amount of Rls. 7,770 billion of the foreclosed collaterals has insurance coverage and the remainder does not need any insurance taking account of the increased value of the premises (buildings and • The investment deposits received from foreign and local banks in rial and foreign currency are classified like other investment deposits in goodwill). the section of “investment depositors’ equity” with a view to maturities.
104 Annual Report 105 23- Customers’ deposits 23-3- Other deposits and advance payments
Group Parent Company Group Parent Company 2020 2019 2020 2019 Note 2020 2019 2020 2019 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Cash deposits for LGs (rial) 1,431,571 1,357,464 1,460,327 1,362,327 Natural persons Cash deposits for LGs (forex) 3,612 3,716 3,612 3,716 Advance received for LCs (rial) 3,314,697 2,846,879 3,314,698 2,846,879 Demand deposits and similar deposits 23-1 9,941,534 5,721,951 9,941,534 7,635,752 Advance received for LCs (forex) 172,411 1,687,874 172,411 1,687,874 Savings deposits and similar deposits 23-2 13,787,749 2,903,702 13,787,749 10,802,441 Other 19,149 30,534 19,148 30,534 Other deposits and advance payments 23-3 98,101 48,855 98,105 63,233 4,941,440 5,926,467 4,970,196 5,931,330 Total deposits of natural persons 23,827,384 8,674,508 23,827,387 18,501,426 Legal persons Demand deposits and similar deposits 23-1 36,741,950 35,833,867 36,449,810 33,237,788 24- Dividends payable Savings deposits and similar deposits 23-2 7,705,805 15,817,482 7,710,546 7,924,703 Other deposits and advance payments 23-3 4,843,339 5,877,612 4,872,091 5,868,097 Group Parent Company Total deposits of legal persons 49,291,095 57,528,961 49,032,447 47,030,588 2020 2019 2020 2019 73,118,479 66,203,469 72,859,834 65,532,014 Rls(m) Rls(m) Rls(m) Rls(m) Balance from prior years 210,877 26,317 51,510 51,510 Dividend approved 394,689 109,271 0 0 23-1- Demand deposits and similar deposits for natural and legal customers Dividend paid (317,066) (10,755) (14,567) 0 288,500 124,833 36,943 51,510
Group Parent Company 2020 2019 2020 2019 24-1- A summary turnover of the said account in the parent company is as follows: Rls(m) Rls(m) Rls(m) Rls(m) Gharzolhassaneh (interest-free) deposits (rial) 38,195,165 18,835,266 38,703,339 18,996,731 Gharzolhassaneh (interest-free) deposits (forex) 55,988 70,214 55,988 70,214 Cash Balance at Dividend Capital increase Balance at Approved dividend per March paid during from accrued March Various bank checks sold 1,478,083 1,122,636 1,478,083 1,122,636 dividend share 20, 2017 2017-2018 dividends 19, 2020 Customers' account with overseas branches 0 0 0 0 Drafts drawn on the bank (rial) 0 0 0 0 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Drafts drawn on the bank (forex) 0 808,080 0 808,080 Prior years 0 5,181,640 51,510 (14,567) 0 36,943 Unused managed cash (rial) 38,918 19,871 38,918 19,871 Fiscal year ended March 2017 ,20 0 0 0 0 0 0 Fiscal year ended March 2018 ,20 0 0 0 0 0 0 Unused managed cash (forex) 0 0 0 0 Fiscal year ended March 2019 ,20 0 0 0 0 0 0 Interim credit accounts (temporary creditors) (rial) 2,344,177 2,380,538 1,543,863 1,536,797 5,181,640 51,510 (14,567) 0 36,943 Interim credit accounts (temporary creditors) (forex) 4,464,518 18,255,709 4,464,518 18,255,709 Unclaimed balances (rial) 132,042 88,961 132,042 88,961 Unclaimed balances (forex) 5,910 5,916 5,910 5,914 Less: 0 0 0 0 25- Advance payments Account for the bank's checks sold (unsettled) (31,317) (31,373) (31,317) (31,373) 46,683,484 41,555,818 46,391,344 40,873,540 Group 2020 2019 Rls(m) Rls(m) 23-2- Savings deposits and similar deposits – for real and legal persons Advance received 587,483 88,192 587,483 88,192
Group Parent Company 2020 2019 2020 2019 26- Provision for corporation tax Rls(m) Rls(m) Rls(m) Rls(m) Gharzolhassaneh (interest-free) deposits (rial) 14,562,013 8,950,900 14,566,754 8,956,859 Group Parent Company Gharzolhassaneh (interest-free) deposits (forex) 6,931,532 9,770,275 6,931,532 9,770,276 2020 2019 2020 2019 Savings deposits - overseas branches 0 0 0 0 Rls(m) Rls(m) Rls(m) Rls(m) Gharzolhassaneh (interest-free) deposits for young Balance at the beginning of the year 162,792 72,727 0 0 0 0 0 0 people Tax provision for the year 135,936 140,588 0 0 Prior years' tax adjustments 0 0 0 Special unused Gharzolhassaneh (interest-free) 9 9 9 9 Tax paid during the year (112,286) (11,549) 0 0 deposits Tax paid during previous years 0 0 0 0 Personnel savings account 0 0 0 0 Consolidated adjustments (346) 0 0 0 Personnel pension fund 0 0 0 0 186,096 201,766 0 0 Savings deposits for housing project 0 0 0 0 Tax prepayments 0 0 0 0 21,493,554 18,721,184 21,498,295 18,727,144 Balance at the year-end 186,096 201,766 0 0
106 Annual Report 107 26-1- Provision for income tax 27- Provisions and other liabilities The bank’s income taxes for all years before 2015 have been finalized and paid and a summary statement of taxes paid for the years 2016, 2017, 2018 and 2019 is as follows: Group Parent Company 2020 2019 2020 2019 2020 2019 Rls(m) Rls(m) Rls(m) Rls(m) Profit Tax Facilities received from National Development Fund 0 0 0 0 Taxable Provision Method of tax Fiscal year (loss) income Tax Tax 1 Provision balance assessment Due for term LCs & drafts (rial) 28,925 1,233 28,925 1,233 declared Finalized Paid declared assesed balance Due for term LCs & drafts (forex) 59,896 166,335 59,896 166,335 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Interests and fees payable 0 0 0 0 Insurance payable 0 0 46,078 8,626 Appeal at the adminis- 2016 102,751 2,612,268 0 653,067 550,270 550,270 0 0 trative Justice Tribunal Withholding taxes payable 68,019 44,145 14,823 8,597 Notes payable 279,641 271,502 0 0 Appeal lodged with the 2017 84,671 (788,547) 0 0 0 0 0 0 Allowance for leave entitlement 0 0 0 0 Initial Tax Panel Provision for expenses payable 1,178,020 783,698 862,189 544,690 Appeal lodged with the Interbranch accounts 1,045,989 1,444,903 1,045,989 1,444,903 2018 1,018,366 3,813,151 0 953,288 0 0 0 0 Initial Tax Panel Items in transit 0 0 0 0 Due to persons/entities- Interbranch accounts 1,286,121 974,720 1,286,121 974,720 Appeal lodged with the 2019 5,143,292 18,751,125 0 4,687,781 0 0 0 0 Due to persons/entities 0 0 0 0 Initial Tax Panel Due to persons/entities- sale of real estate in Qeshm 0 0 0 0 March Interbranch account for debtors settlements 1,264,365 675,420 1,264,365 675,420 2,151,976 0 0 0 0 0 0 0 19,2020 Accounts payable 1,776,514 2,158,474 1,771,443 2,158,474 0 0 Other debts 11,257,097 7,092,204 8,904,591 2,709,294 18,244,587 13,612,634 15,284,420 8,692,291 Tax 0 0 prepayments
0 0
1. It means the amounts paid to the Ministry of Economic Affairs and Finance.
26-2- The finalized amount of tax for the year 2016 has been settled and the corporation tax is being paid on installment plan. Furfur the Tax Affairs Authority has confirmed payment of Rls. 788,547 million for the year 2017. 26-2-1- For the year 2018, the amount of Rls. 953,288 million has been demanded as corporation tax and the amount of Rls. 402,005 million as transfer tax against which the bank has made an appeal and the case is now pending by the Tax Dispute Settlement Panel. Furthermore, the amount of Rls. 3,768,034 million has been demanded as corporation tax for the year ended March, 20, 2018 under paragraphs B and C of the Law for Elimination of Barriers to Competitive Products against which the bank has made an appeal and the case is pending at the Tax Dispute Settlement Panel and it is currently reviewed by the Initial Tax Panel. Further, the amount of Rls. 4,753,094 million has been assessed as corporation tax for the year ended March 20, 2019 under paragraphs B and C of the Law for Elimination of Barriers to Competitive Products against which the bank has made an appeal and the case is pending at the Tax Dispute Settlement Panel and it is currently being reviewed by the Initial Tax Panel. As regards the amounts assessed under paragraphs B and C o the Law for Elimination of Barriers to Competitive Products, it is further noted that such amounts are quite based on estimation and have been notified to all banks without a review and issuance of a letter by the CBI.
108 Annual Report 109 28- Provisions for employees’ termination and pension benefits 29- Investment depositors’ equity
Group Group Parent Company 2020 2019 Note 2020 2019 2020 2019
Provision for Provision Provision for Provision Rls(m) Rls(m) Rls(m) Rls(m) employees' for pension Total employees' for pension Total Term investment deposits termination benefits termination benefits Long-term investment deposits 29-1 212,393,151 152,524,859 212,394,962 152,526,671 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Short-term investment deposits 29-1 173,991,315 141,890,779 179,451,146 143,621,972 Balance at the beginning of year 998,623 0 998,623 724,836 0 724,836 Special short-term investment deposits 29-1 43,956 62,108 43,956 62,108 Paid during the year (49,647) 0 (49,647) (36,570) 0 (36,570) Investment deposits received from banks and credit institutions 29-1 3,474,887 953,681 3,474,888 953,681 Consolidated adjustments 0 0 0 0 0 0 Total term investment depositors 389,903,309 295,431,427 395,364,952 297,164,432 Provisions covered during the year 401,880 0 401,880 309,503 0 309,503 Interest payable on term investment deposits 1,350,856 0 1,350,856 997,769 0 997,769 Long-term investment deposits 29-2 2,081,850 1,577,315 2,081,851 1,577,315 Short-term investment deposits 29-2 35,483 33,825 35,483 33,825 Special short-term investment deposits 29-2 315 390 315 390 Parent Company Investment deposits received from banks and credit institutions 29-2 0 0 0 0 2020 2019 Total interest payable on term investment deposits 2,117,648 1,611,530 2,117,649 1,611,530 Provision for Provision Provision for Provision employees' for pension Total employees' for pension Total 392,020,957 297,042,957 397,482,600 298,775,962 termination benefits termination benefits
Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Balance at the beginning of year 946,078 0 946,078 691,031 0 691,031 29-1-The term investment deposits by a breakdown of rial and foreign currency Paid during the year (24,856) 0 (24,856) (24,489) 0 (24,489) Consolidated adjustments 0 0 0 0 0 0 2020 2019 Provisions covered during the year 357,942 0 357,942 279,537 0 279,537 Rial Forex Total Rial Forex Total 1,279,164 0 1,279,164 946,079 0 946,079 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Investment deposits received from banks 46 3,474,840 3,474,886 43 953,638 953,681 and credit institutions
Ordinary short-term investment deposits 156,722,441 22,728,705 179,451,146 123,376,754 20,245,217 143,621,971 Special short-term investment deposits Up to three months 6,256 0 6,256 7,345 0 7,345 More than three to six months 14,519 0 14,519 27,267 0 27,267 More than six months to one year 23,182 0 23,182 27,496 0 27,496 Long-term investment deposits General certificates of deposit 0 0 0 0 0 0 Special certificates of deposit 0 0 0 0 0 0 One-year term 212,196,277 0 212,196,277 151,227,945 0 151,227,945 Two-year term 2,820 0 2,820 2,820 0 2,820 Three-year term 0 0 0 0 0 0 Four-year term 16,623 0 16,623 31,114 0 31,114 Five-year term 179,243 0 179,243 1,264,793 0 1,264,793 369,161,407 26,203,545 395,364,952 275,965,577 21,198,855 297,164,432
• The growth in the one-year-term deposits is due to the prohibition of more than one-year-term deposit-taking under the directive No. 93/96593 of July 2014 ,2. The balance of over one-year-term deposits is related to prior years’ deposits. • Under the directive No. 93/96593 of July 2014 ,2 and prohibition of more than one-year term deposit-taking, the balances of two-year and three-year terms are related to that group of depositors who have not contacted the bank on the maturity dates whereas the bank has not been authorized to carry over the balances of their account to the short-term investment accounts.
110 Annual Report 111 29-1-1- The long-term investment deposits in terms of maturity and interest rate 29-1-3- Turnover of investment deposits in Forex
2020 2019 Balance at Deposits taken Repayment of Balance at Balance at Balance at March 20, 2019 during the year deposits March 19, 2020 March 19, 2020 March 20, 2019 More than %10
19 to 22 % 16 to 19 % 13 to 16 % 10 to 13 % Total Total 22 % and less Amount in Amount in Amount in forex Amount in forex Amount in rial Amount in rial forex forex Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Matured 0 8,771 11,323 10,528 0 0 30,622 7,101 Rls(m) Rls(m) Long-term deposits 2018 250 1,515 2,134 768 0 0 4,667 40,420 US Dollar 0 0 0 0 0 0 2019 8,362 130,983,325 63,466,476 14,739,158 0 0 209,197,321 150,274,910 Euro 0 0 0 0 0 0 2020 0 272,521 2,065,830 771,334 0 0 3,109,685 2,102,393 UAE Dirham 0 0 0 0 0 0 2021 0 0 3,762 37,372 0 0 41,134 52,793 Special and ordinary 2022 and short-term deposits 0 0 11,532 1 0 0 11,533 49,054 onward US Dollar 104,108,696.03 25,094,235.39 20,029,520.72 109,173,410.70 4,585,283 4,372,565
8,612 131,266,132 65,561,057 15,559,161 0 0 212,394,962 152,526,671 Euro 330,046,532.37 91,833,584.37 194,551,138.56 227,328,978.18 10,531,015 15,729,358 UAE Dirham 7,133,323.88 1,234,536,992.07 608,355,013.45 633,315,302.50 7,243,227 81,584 March 20, 2019 13,560,119 59,631,397 58,918,236 20,416,919 0 0 152,526,671 UK Pound 354,017.55 0 23,509.73 330,507.82 16,820 19,744 Australian dollar 718.35 0 0 718.35 18 21 Canadian dollar 58,045.96 0 1,251.00 56,794.96 1,681 1,829 29-1-2- Turnover of investment deposits in Rial Japanese YEN 41,781,521.76 637,472,355.00 668,504,311.07 10,749,565.69 4,212 15,772 Swiss Franc 5,004.15 0 0 5,004.15 219 210 Balance at Deposits taken Repayment of Balance at Turkish Lira 2,511,183.57 1,436,651.82 2,264,148.44 1,683,686.95 11,042 19,296 March 20, 2019 during the year deposits March 19, 2020 Chinese Yuan 1,000.37 181,867,910.13 126,385,238.57 55,483,671.93 332,458 6 Rls(m) Rls(m) Rls(m) Rls(m) Russian Rouble 7,130,249.83 0 2,561,058.00 4,569,191.83 2,554 4,656 General certificates of deposit 0 0 0 0 Omani Rial 1,608.57 0 0 1,608.57 177 176 Special certificates of deposit 0 0 0 0 Qatari Rial 0 0 0 0 0 0
One-year term 151,227,945 136,261,053 75,292,721 212,196,277 Investment deposits received from banks and Two-year term 2,820 0 (1) 2,821 credit institutions Three-year term 0 0 0 0 US Dollar 0 0 0 0 0 0 Four-year term 31,114 313 14,804 16,623 Euro 20,005,135.93 75,000,000.00 20,000,000.00 75,005,135.93 3,474,613 953,405 Five-year term 1,264,792 7,543 1,093,093 179,242 UAE Dirham 13,930.00 0 0 13,930.00 159 159 Ordinary short-term investment deposits 123,376,755 49,942,207 16,596,520 156,722,442 UK Pound 1,326.25 0 0 1,326.25 67 74 Special short-term investment deposits 62,108 21,167 39,319 43,956 Korean WON 0 0 0 0 0 0
Investment deposits received from banks and credit 26,203,545 21,198,855 43 3 0 46 institutions
275,965,577 186,232,286 93,036,457 369,161,407 29-1-4- The composition of depositors of investment deposits breaks down as follows:
2020 2019 Number Amount Number Amount depositor Rls(m) depositor Rls(m) Deposits in rial Legal persons 17,444 114,400,457 16,332 72,322,110 Natural persons 2,260,286 254,760,904 2,184,496 203,643,424
Investment deposits received from banks and credit 1 45 1 43 institutions
Total deposits in rial 2,277,731 369,161,407 2,200,829 275,965,577 Deposits in foreign currency Legal persons 1,051 15,619,124 976 13,018,051 Natural persons 33,204 7,109,581 32,313 7,227,166 Investment deposits received from banks and credit institutions 4 3,474,840 2 953,639 Total deposits in foreign currency 34,259 26,203,545 33,291 21,198,855 2,311,990 395,364,952 2,234,120 297,164,432
112 Annual Report 113 29-2- Interests payable on term investment deposits are as follows: 30- Share Capital
Group The Bank’s initial capital was the amount of Rls. 200,000/- million (divided into 200 million shares at nominal value of 1000 rials each) which was increased in several stages to the amount of Rls. 8,000 billion (divided into Balance at Provisional Difference in Balance at Interest paid 8,000/- million shares at nominal value of 1,000 rials each) at the end of the fiscal year ended March 20, 2016 as March 20, interest during provisional and March 19, during the year 2019 the year final interest 2020 described below:
Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Date of capital increase Capital Increase Amount of capital increase New capital Source of capital Increase Ordinary short-term deposits 21,486 7,805,519 0 (7,808,356) 18,649 Percentage Rls(m) Rls(m) Special short-term deposits 390 5,183 0 (5,258) 315 August 29, 2002 0 0 200,000 Accrued dividends due and cash contribution General certificates of deposit 0 0 0 0 0 November 27, 2003 10 20,000 220,000 Accrued dividends due and cash contribution Special certificates of deposit 0 0 0 0 0 October 15, 2004 36.4 80,000 300,000 Cash contribution One-year term deposits 155,432 34,584,800 0 (32,859,192) 1,881,041 March 7, 2005 100 300,000 600,000 Accrued dividends due and cash contribution Two-year term deposits 143 0 0 0 143 November 16, 2005 25 150,000 750,000 Accrued dividends due and cash contribution Three-year term deposits 118 0 0 0 118 October 8, 2006 20 150,000 900,000 Accrued dividends due and cash contribution Four-year term deposits 18 3,440 0 (3,327) 131 Accrued dividends due, cash contribution Five-year term deposits 1,419,002 89,428 0 (1,310,612) 197,817 January 12, 2010 100 900,000 1,800،000 and waiver of rights issue Investment deposits received from 0 7,245 0 (7,245) 0 March 19, 2011 66.7 1,200,000 3,000,000 Accrued dividends due and cash contribution banks and credit institutions March 19, 2012 33.3 1,000,000 4,000,000 Shareholders’ cash contribution Foreign currency deposits 14,941 447,109 0 (442,616) 19,434 October 22, 2013 64.7 2,588,000 6,588,000 Assets revaluation reserve 1,611,530 42,942,724 0 (42,436,605) 2,117,648 March 10, 2016 21 1,412,000 8,000,000 Cash contribution and retained earnings
Parent Company
Balance at Provisional Difference in Balance at 30-1- The composition of shareholders as at the balance sheet date was as follows: Interest paid March 20, interest during provisional and March 19, during the year 2019 the year final interest 2020 2020 2019 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Number Percentage of Number Percentage of Ordinary short-term deposits 18,884 7,805,519 0 (7,808,356) 16,048 of shares shares of shares shares Special short-term deposits 390 5,183 0 (5,258) 315 One Percent and More General certificates of deposit 0 0 0 0 0 Saman Investment Development Co. (Private) 711,999,995 9 719,999,995 9 Special certificates of deposit 0 0 0 0 0 Saman Insurance Co. (Public) 513,714,785 6 0 0 One-year term deposits 155,433 34,584,801 0 (32,859,192) 1,881,040 Staff Pension Fund of Foulad (Steel) Co. 400,088,117 5 400,088,117 5 Two-year term deposits 143 0 0 0 143 Ofogh Kurosh Chain Department Stores (Private) 200,000,000 3 0 0 Three-year term deposits 118 0 0 0 118 Pakshoo Industrial Group Co. (Pubic) 200,000,000 2.50 0 0 Four-year term deposits 18 3,440 0 (3,327) 131 Kurosh Foodstuff Industry Co. (Private) 160,000,000 2 0 0 Five-year term deposits 1,421,602 89,428 0 (1,310,612) 200,419 Sam Electronic Co. 79,800,000 1 0 0 Investment deposits received from 0 7,245 0 (7,245) 0 Iran Pump Manufacturing Industries 148,080,232 2 147,330,232 2 banks and credit institutions Mines & Metals Investment Development Co. 0 0 323,686,501 4 Foreign currency deposits 14,941 447,109 0 (442,615) 19,435 Iran and Gharb Co. (Private) 0 0 88,975,787 1 1,611,530 42,942,725 0 (42,436,605) 2,117,649 Notrica Technique Co. 0 0 364,030,308 5 Natural persons- more than 1 percent 1,111,503,036 14 1,020,803,737 13
Other (less than 1 Percent) 29-2-1- Considering the provisional surplus interests paid to depositors in proportion to their shares from the Legal persons (103 shareholders) 825,444,871 10.3 1,063,932,852 13.30 profit-sharing incomes as described in the statement of investment deposits performance under the circular Natural persons (13,936 shareholders) 3,649,368,964 45.62 3,871,152,471 48.39 No. 94/69383 of June 10, 2015, the procedure for calculating the share of each item of various investment deposits from the difference in provisional and final interests for the reporting fiscal year does not apply. 8,000,000,000 100 8,000,000,000 100
30-2- Saman Bank has planned to raise its capital in two stages from the amount of Rls. 8,000 billion to the amount of Rls. 16,000 billion. The stages of the capital increase will be effected with the amount of Rls. 4,500 billion from the shareholders' cash contribution and the amount of Rls. 3,500 billion out of other reserves.
114 Annual Report 115 31- Legal reserve 33- Assets revaluation reserve
Group Parent Company 2020 2019
2020 2019 2020 2019 Assets Transferred, Assets Assets revaluation amortized and retired/ revaluation revaluation Rls(m) Rls(m) Rls(m) Rls(m) amount Capital increase balance balance Balance at the beginning of the year 2,507,393 1,733,012 2,460,817 1,689,324 Rls(m) Rls(m) Rls(m) Rls(m) Transferred from allocated profi 326,672 774,864 322,796 771,494 March 20, 2012 2,588,675 (2,588,000) 675 675 Consolidated adjustments 0 0 0 0 March 20, 2017 1,506,473 0 1,506,473 1,506,473 Balance at the year end 2,834,064 2,507,876 2,783,614 2,460,818 March 20, 2018 0 (892,176) (892,176) (892,177) March 20, 2019 0 (33,402) (33,402) (33,402) March 19, 2020 0 (21,704) (21,704) 0 4,095,148 (3,535,282) 559,865 581,569 31-1- Subject to the provisions of paragraph A of article 33 of the Monetary and Banking Law and paragraph B of article 58 of the articles of association, the legal reserve in the parent company is equivalent to 15% and subject to the provisions of articles 140 and 238 of the Commercial Code Amendment ratified on March 14, 1969, the legal reserve in the subsidiaries is 5% which will be deducted from relevant distributable 34- Minority interest profit and then transferred to the legal reserve account. In accordance with the said articles, such transfer to the legal reserve account is mandatory until when the balance of legal reserve in the bank reaches the amount of the bank’s capital and in the subsidiaries up to 10% of the same company’s capital and 2020 2019 afterwards this process shall remain to be voluntary. The legal reserve will not be transferable to capital Rls(m) Rls(m) account and will not be distributed among the shareholders unless when the company is dissolved. The Share of capital 594,405 124,876 amounts entered in the balance sheet break down as follows: Share of reserve 10,738 11,425 Share of retained profits (232,743) 41,667 Group Share of the capital increase in flow 216,000 0 2020 2019 588,400 177,968 Rls(m) Rls(m) Parent campany Saman Bank 2,783,614 2,460,818 35- Incomes from loans granted and placements in other banks and Subsidiary companies debt securities Saman Exchange Co. 33,841 33,525 Saman Brokerage Co. 3,186 3,186 Group Saman Processing (Pardazeshgaran) 6,716 3,498 2020 2019
Iranian Hafez Saman Credit Bureau and Scoring Co. 3,947 3,947 Profit- Non- Profit- Non-profit- Note Total Total Atiyeh Andishan Sepehr Shargh 481 481 sharing profit-sharing sharing sharing Atiyeh Andishan Sepehr Mehr 230 230 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Tondar Noor 0 191 Income earned from loans granted 35-1 28,541,659 494,309 29,035,968 23,468,889 963,058 24,431,947
Atieh Andishan Sepehr Shargh-Services Development Co. 2,000 2,000 Income earned from placements in 35-2 4,994,563 550,404 5,544,966 1,831,414 361,822 2,193,236 other banks and debt securities Saman Smart Mobillet Co. 49 0 Consolidated adjustments 0 0 33,536,221 1,044,713 34,580,933 25,300,303 1,324,880 26,625,183 2,834,064 2,507,876
Parent Company 32- Other reserves 2020 2019 Profit- Non- Profit- Non-profit- Note Total Total sharing profit-sharing sharing sharing Group Parent company Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) 2020 2019 2020 2019 Income earned from loans granted 35-1 28,575,551 494,306 29,069,857 23,500,796 963,060 24,463,856 Rls(m) Rls(m) Rls(m) Rls(m) Income earned from placements in Balance at the beginning of the year 3,528,218 0 3,528,218 0 35-2 4,994,565 571,440 5,566,005 1,831,414 347,267 2,178,681 other banks and debt securities Decrease 0 0 0 0 33,570,116 1,065,746 34,635,862 25,332,210 1,310,327 26,642,537 Transferred from allocated profit 0 3,528,218 0 3,528,218 Balance at the year end 3,528,218 3,528,218 3,528,218 3,528,218
116 Annual Report 117
58,831 58,831 1,081,971 1,081,971 648,789 648,789 70,644 70,644 24,431,947 24,463,856 0 0 6,330,720 6,330,720 662,274 662,274 0 0 1,834,801 1,834,802 1,171,746 1,171,746 0 0 Rls(m) Rls(m) 3,945 3,945 158,901 158,901 12,409,325 12,441,233 Total Total
0 0 0 0 295,545 295,545 0 0 552,168 552,169 0 0 28,661 28,661 0 0 0 0 0 0 0 0 0 0 Rls(m) Rls(m) 0 0 0 0 227,962 227,963 Forex (Non-profit- sharing) Forex (Non-profit- sharing)
58,831 58,831 1,081,971 1,081,971 353,245 353,245 70,644 70,644 23,879,780 23,911,687 0 0 6,302,059 6,302,059 662,274 662,274 0 0 1,834,801 1,834,802 1,171,746 1,171,746 0 0 Rls(m) Rls(m) 3,945 3,945 158,901 158,901 Total Total 12,181,363 12,213,269
Rial Rial 2019 2019 0 0 58,831 58,831 0 0 0 0 0 0 410,891 410,891 0 0 98,420 98,420 0 0 0 0 94,739 94,739 0 0 0 0 Rls(m) Rls(m) 0 0 158,901 158,901 Non-profit- sharing Non-profit- sharing
12,181,363 12,213,269 0 0 1,081,971 1,081,971 353,245 353,245 70,644 70,644 23,468,889 23,500,796 0 0 6,203,639 6,203,639 662,274 662,274 0 0 1,740,062 1,740,063 1,171,746 1,171,746 0 0 Rls(m) Rls(m) 3,945 3,945 0 0 Profit- sharing Profit- sharing Group
Parent company
11,282,182 11,316,072 90,167 90,167 584,606 584,606 66,690 66,690 52,518 52,519 29,035,968 29,069,857 0 0 9,542,771 9,542,769 2,740,380 2,740,380 0 0 1,556,977 1,556,978 2,957,747 2,957,747 0 0 Rls(m) Rls(m) 723 723 161,207 161,206 Total Total
0 0 0 0 0 0 0 0 0 0 53,368 53,366 0 0 53,368 53,366 0 0 0 0 0 0 0 0 0 0 Rls(m) Rls(m) 0 0 0 0 Forex (Non-profit- sharing) Forex (Non-profit- sharing)
11,282,182 11,316,072 90,167 90,167 584,606 584,606 66,690 66,690 52,519 52,519 28,982,601 29,016,492 0 0 9,489,403 9,489,404 2,740,380 2,740,380 0 0 1,556,977 1,556,978 2,957,747 2,957,747 0 0 Rls(m) Rls(m) Total Total 723 723 161,207 161,206
2020 2020 Rial Rial 0 0 90,167 90,167 0 0 0 0 0 0 440,942 440,941 0 0 106,549 106,549 0 0 0 0 83,019 83,019 0 0 0 0 Rls(m) Rls(m) Non-profit- sharing Non-profit- sharing 0 0 161,207 161,206
0 0 11,282,182 11,316,072 0 0 584,606 584,606 66,690 66,690 52,519 52,519 28,541,659 28,575,551 0 0 9,382,854 9,382,855 2,740,380 2,740,380 0 0 1,473,958 1,473,959 2,957,747 2,957,747 0 0 Rls(m) Rls(m) Profit- sharing Profit- sharing 723 723 Late payment penalty for debtors of LGs paid Late payment penalty for debtors of LGs paid Mosharakat Madani (Civil partnership) Mosharakat Madani (Civil partnership) Late payment penalty for debtors of LCs Late payment penalty for debtors of LCs Muzaraba (trade contracts) Muzaraba (trade contracts) Late payment penalty Late payment penalty Hire purchase contracts Hire purchase contracts Estesna'a Estesna'a Jealeh (service contract) Jealeh (service contract) Murabaha (sale contract) Murabaha (sale contract) Other Other Sales by instalments Sales by instalments Factoring (debt) Factoring (debt) Late payment penalty for debtors of credit cards paid Late payment penalty for debtors of credit cards paid Salaf (futures contract) Salaf (futures contract) 35-1- Income earned from loans granted (Loan interest)
118 Annual Report 119
1,076,017 316,415 759,602 Rls(m) 5,664,472 Total 4,588,455 5,350 ) 5,350 ) Rls(m) ( 309,020 1,823,433 51,578 2,178,681 Total ( Rls(m) 309,021 1,837,987 51,578 2,193,236 Total 2019
0 0 0 Rls(m) 0 Forex Non- profit- sharing 0 Rls(m) 0 0 38,247 0 38,247 Forex (Non-profit- sharing) 0 Rls(m) 0 38,249 0 38,249 Forex (Non-profit- sharing)
1,076,017 316,415 759,602 Rls(m) 5,664,472 Rial (profit- sharing) 4,588,455 5,350 ) 5,350 )
Rls(m) ( 309,020 1,785,186 51,578 Total 2,140,434 ( Rls(m) 309,021 1,799,738 51,578 Total 2,154,987 Parent Company
3,118,208 1,506,853 1,611,355 Rls(m) 7,674,122 Total 4,555,914 Rial 2019 Rial 2019 Rls(m) 0 309,020 0 0 Non-profit- sharing 309,020 0 Rls(m) 309,021 14,552 0 Non-profit- sharing 323,573 2020
0 0 0 Rls(m) 0 Forex Non- profit- sharing 0
5,350 ) 5,350 ) Rls(m) ( 0 1,785,186 51,578 Profit- sharing 1,831,414 ( Rls(m) 0 1,785,186 51,578 Profit- sharing 1,831,414 Group 3,118,208 1,506,853 1,611,355 Rls(m) 7,674,122 Rial (profit- sharing) 4,555,914
Parent Company
Rls(m) 693,851 401,370 4,331,187 139,597 Total 5,566,005 5,544,966 693,851 Rls(m) 345,446 4,366,073 139,596 Total 748,425 317,577 430,848 Rls(m) 5,358,720 Total 4,610,295
2019 170,070 Rls(m) 0 0 170,070 0 Forex (Non-profit- sharing) 170,071 0 Rls(m) 0 170,071 0 Forex (Non-profit- sharing) 0 0 0 Rls(m) 0 Forex Non- profit- sharing 0
748,425 317,577 430,848 Rls(m) 5,358,720 Rial (profit- sharing) 4,610,295 5,395,935 Rls(m) Total 693,851 401,370 4,161,117 139,597 5,374,896 693,851 Rls(m) Total 345,446 4,196,003 139,596 Group
2020 2020 Rial Rial 2,579,056 1,586,775 992,281 Rls(m) 7,583,499 Total 5,004,443 401,370 Rls(m) Non-profit- sharing 0 401,370 0 0 380,333 0 Rls(m) Non-profit- sharing 345,446 34,887 0
2020 0 0 0 Rls(m) 0 Forex Non- profit- sharing 0
4,994,565 Rls(m) Profit- sharing 693,851 0 4,161,117 139,597 4,994,563 693,851 Rls(m) Profit- sharing 0 4,161,115 139,596
2,579,056 1,586,775 992,281 Rls(m) 7,583,499 Rial (profit- sharing) 5,004,443 36-2 36-1 Note 36-3 other debt securities bank) Interest on statutory deposit (share of depositors and the Interest on term deposits placed with other banks Interest on certificates of deposit, participation bonds and Earnings from fixed-income funds Total profit (loss) realized on investments Profit (loss) from sales of companies' shares and mutual funds Profit (loss) realized on investments Dividends from shares of companies and mutual funds Interest on certificates of deposit, participation bonds and other debt securities Interest on statutory deposit (share of depositors and the bank) Interest on term deposits placed with other banks Earnings from fixed-income funds Profit (loss) from increase (decrease) in investments value Net profit (loss) from increase (decrease) in investments value 35-2- Income earned from placements in other banks and debt securities 36- Net profit (loss) from investments
120 Annual Report 121 36-1- Dividends from companies and units of mutual funds in the parent company break down as follows: 36-2- Profit (loss) from sales of companies’ shares and units of mutual funds in the parent company:
2020 2019 2020 2019 Number of Net sale Profit Profit Rial Forex Rial Forex Book value (profit- (non-profit Total (profit- (non-profit Total shares value (loss) (loss) sharing) sharing) sharing) sharing) Share Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Profit (loss) from sales of companies' shares (Rial) Saman Exchange Co. 289,386 0 289,386 241,375 0 241,375 (profit-sharing) Saman Brokerage Co. 75,247 0 75,247 52,675 0 52,675 Iranian National Copper Industries 0 0 0 0 10 Central Securities Depository 5,742 0 5,742 1,085 0 1,085 Mines and Metals Investment Development Co. 0 0 0 0 (293) and Settlement Co. Isfahan Mubarakeh Steel Co. 0 0 0 0 785 Iran Investment Co. 0 0 0 1,625 0 1,625 Shomal Drilling Co. 0 0 0 0 150 Iran Credit Rating Co. 6,422 0 6,422 9,632 0 9,632 Mapna Group 0 0 0 0 (2,243) Stock Exchange Co. 157 0 157 84 0 84 Gole Gohar 0 0 0 0 49 Kardan Investment Bank 356,357 0 356,357 98,000 0 98,000 Gole Gohar-righsts issue 0 0 0 0 (2) Iranian Credit Scoring Co. 19,886 0 19,886 18,830 0 18,830 Iranian Leasing Co. 0 0 0 0 (72) Saman Processing (Pardazeshgaran) Co. 1,469 0 1,469 0 0 0 Saderat Bank 0 0 0 0 4 Saman Financial Esfahan Steel Mill 0 0 0 0 1,047 498,634 0 498,634 49,800 0 49,800 and Economic Development Group Tooka Rail 0 0 0 0 (37) Iran Energy Exchange 196 0 196 457 0 457 Mapna Power Generation - Asalouyeh 0 0 0 0 92 Saman Aftab Tejarat Co. 1,694 0 1,694 1,850 0 1,850 Tooka Foolad Investment Co. 0 0 0 0 (4,945) Shaparak Electronic Payment Co. 0 0 0 32,564 0 32,564 Bahman Group 0 0 0 0 (609) Iran Pars Technology Investment 13,200 0 13,200 16,800 0 16,800 Kharazmi Investment Co. 0 0 0 0 0 Hamedan Glass Works 20,425 0 20,425 0 0 0 Tamin Petrochemical Oil and Gas Investment Co. 0 0 0 0 (848) Tooka Transport Co. 0 0 0 0 32 Iran Pump Manufacturing Co. 1 0 1 0 0 0 Takin Co. Corrosion Control 32,400 314 245 69 4,056 Adonis Electronic Services Development Co. 9,676 0 9,676 0 0 0 Takin Co. Corrosion Control- rights issue 39,599 295 260 35 0 Saman Investment Development Co. 20,480 0 20,480 0 0 0 Mellat Leasing Co. 0 0 0 0 18 Dividends from long-term investments 1,318,973 0 1,318,973 524,777 0 524,777 Ghadir Investment Co. 0 0 0 0 (299) Saman Electronic Payment Co. 245,889 0 245,889 201,527 0 201,527 Kerman Civil and Development Investment Co. 0 0 0 0 61 Middle East Bank 28,971 0 28,971 901 0 901 Sarcheshmeh Copper Co. 0 0 0 0 1,151 Saman Insurance 12,642 0 12,642 20,114 0 20,114 Sarcheshmeh Copper Co.-rights issue 0 0 0 0 (211) Tooka Transport Co. 0 0 0 70 0 70 Tamin Maseh Rikhtegari 0 0 0 0 1,295 Bahman Group 0 0 0 581 0 581 Alvand Kashi (Tile) Co. 0 0 0 0 586 Mapna Group 0 0 0 443 0 443 Cultural Heritage and Tourism Investment 0 0 0 0 175 Iranian Leasing Co. 0 0 0 154 0 154 Pars Civil and Development Co 0 0 0 0 (1,653) Tooka Foulad Investment Co. 0 0 0 609 0 609 Bojnourd Cement Co. 0 0 0 0 (342) Takin Co. 0 0 0 1,040 0 1,040 Kayson 0 0 0 0 (2,370) Kharazmi Investment Co. 0 0 0 3,000 0 3,000 Kayson-rights isue 0 0 0 0 (140) Tooka Rail 0 0 0 456 0 456 Alhavi Pharmaceutical Co. 0 0 0 0 (883) Mines and Metals Seir Kosar Rail Co. 0 0 0 0 (240) 0 0 0 1,512 0 1,512 Investment Development Co. Kharazmi Development and IT Co. 0 0 0 0 (167) Middle East Life Insurance 0 0 0 10 0 10 Iran National Investment Co. 0 0 0 0 (92) Mellat Leasing Co. 0 0 0 10 0 10 Middle East Life Insurance 0 0 0 0 (3) Pars Petrochemical Co. 0 0 0 0 1 Cultural Heritage and Tourism Investment Co. 0 0 0 1,500 0 1,500 Insurance Industry 0 0 0 0 663 Bojnourd Cement 0 0 0 1,339 0 1,339 Saman Insurance Co. 0 0 0 0 75,678 Alvand Kashi (Tile) Co. 0 0 0 135 0 135 Middle East Bank 0 0 0 0 9,026 Seir Kosar Rail Co. 0 0 0 81 0 81 Electronic Payment Co. 2,300,000 37,856 25,427 12,429 122,399 Gole Gohar 0 0 0 650 0 650 Shahid Bahonar Copper Co. 0 0 0 0 (958) Iran Copper Industries 0 0 0 36 0 36 Hamadad Glass Works 0 0 0 0 86,002 Pars Petrochemical Co. 0 0 0 9 0 9 Iran Pump Manufacturing Co. 0 0 0 0 22,560 Tamin Maseh 0 0 0 13 0 13 Ofogh Koorosh 0 0 0 0 1 Dividends from short-term investments 287,502 0 287,502 234,191 0 234,191 Saman Investment Development Co. 204,804,689 1,914,929 420,609 1,494,320 0 Saman Yekom Mutual Fund 1,347 0 1,347 633 0 633 207,176,688 1,953,394 446,541 1,506,853 309,433 Aghigh Mutual Fund 2,222 0 2,222 0 0 0 Profit (loss) from sales of mutual funds - rial(profit-sharing) Yekom Agah Mutual Fund 1,311 0 1,311 0 0 0 Sahm Ashna Yekom special market-making fund 0 0 0 0 7,018 Profit from units of mutual funds 4,880 0 4,880 633 0 633 Nik Andishane Honar Charity Mutual Fund 0 0 0 0 (36) Dividends from companies' shares and units of Profit (loss) from sales of companies' share (Forex) (non-profit sharing) 0 0 0 0 0 1,611,355 0 1,611,355 759,602 0 759,602 mutual funds Profit (loss) from sales of mutual funds (Forex) (non-profit sharing) 0 0 0 0 0 207,176,688 1,953,394 446,541 1,506,853 316,415
122 Annual Report 123 36-3- Profit (loss) from increase (decrease) in investments value: 37-1- Bank’s share from profit-sharing incomes Bank’s share of sources from profit-sharing incomes is calculated as follows: 2020 2019
Number Net sale 37-1-1- Bank’s share from profit-sharing incomes of shares/ Book value Profit (loss) Profit (loss) value Investment units Bank's share of sources to Bank’s share of sources Fiscal year Profit-sharing incomes total uses ratio (37-2) from profit-sharing incomes Share Rls(m) Rls(m) Rls(m) Rls(m) Percentage Rls(m) Rls(m) Profit (loss) from sales of companies' shares (rial) 2019 0 30,996,682 0 (profit-sharing) 2020 0 41,244,235 0 Takin Co. 0 0 0 (32) Takin Co.-rights issue 0 0 0 (39) • Should the shared uses be less than the total free resources of investment deposits, the bank’s resources and accordingly its share from Saman Kish Electronic Payment 1,229,446,584 13,592,009 16,941,474 3,349,465 3,612,613 the profit-sharing incomes will drop to nil. Middle East Bank 125,999,999 272,679 877,164 604,485 79,897 Saman Insurance 147,533,435 436,225 1,038,189 601,964 0 Kardan Investment Bank 0 0 0 847,433 37-1-2- Distribution of shared resources and uses between the depositors and the bank Adjustment of impairment loss reserves 0 0 0 0 48,583 1,502,980,018 14,300,912 18,856,826 4,555,914 4,588,455 2020 2019 Average Rls(m) Rls(m) Profit (loss) from increase (decrease) in investments value - (forex) (non-profit sharing) Average shared uses (37-2-1) 232,029,768 164,819,824 52-week average Average balance of investment deposits (37-2-2) 309,747,996 245,753,679 52-week average 0 0 0 0 0 Less: Statutory deposit from investment deposits (35,576,860) (28,055,901) 52-week average 1,502,980,018 14,300,912 18,856,826 4,555,914 4,588,455 Free resources of investment deposits 274,171,136 217,697,777
Bank’s share of sources out of shared uses (42,141,369) (52,877,953) (Surplus free resources of investment deposits) 37- Bank’s share from profit-sharing incomes • The bank’s share of resources out of the shared uses means the shared uses deducted from the free resources of investment depos- its. Should the total free resources of investment deposits exceed the shared uses, the surplus thereof will be named the surplus free 2020 2019 resources of investment deposits. Note Rls(m) Rls(m) Profit sharing incomes Income from loans granted 35 28,575,551 23,500,796 37-1-2-1- Average shared uses Income from placements in other banks and debt securities 35-2 4,994,565 1,831,414 March 19, 2020 March 20, 2019 Net profit (loss) from investments 36 7,674,122 5,664,472 Amount (average) Amount (average) Total profit-sharing incomes 41,244,238 30,996,682 Rls(m) Rls(m) Bank's share from profit-sharing incomes 37-1 0 0 Items of shared uses Depositors' share from profit-sharing incomes before fees reduction 41,244,237 30,996,682 Net uses related to loans 191,189,518 144,254,788 Deposits management fee 37-2 (6,960,893) (4,944,595) Net uses related to investment deposits placed with other banks 21,510,857 8,838,485 Depositors' share from profit-sharing incomes 34,283,344 26,052,087 Net uses related to investment in shares and other securities 19,329,393 11,726,551 232,029,768 164,819,824 Interest on statutory deposit/investment deposits 37-3 360,561 283,716
Compensation of expenses related to depositors' free resource surplus to 37-4 7,490,800 9,944,442 profit-sharing uses 37-1-2-2- Average investment deposits Final interest accrued on investment deposits 42,134,705 36,280,245
Interests on forex deposits 447,109 389,547 March 19, 2020 March 20, 2019 Total Interest expenses on deposits 42,581,815 36,669,793 Amount (average) Amount (average) Differential in interests payable (surplus of interest paid) to depositors (360,909) (181,456) Rls(m) Rls(m) Investment deposits Ordinary short-term deposits 127,437,213 99,812,063 Special short-term deposits 51,604 2,310,633 General certificates of deposit 0 0 One-year term 181,839,862 137,663,187 Two-year term 2,820 3,021 Three-year term 0 214 Four-year term 15,418 42,236 Five-year term 400,457 5,841,450 Investment deposits received from banks and credit institutions 622 80,875 309,747,996 245,753,679
124 Annual Report 125 37-2- Deposits management fee 37-5- Provisional interests (on-account) paid on investment deposits The bank’s management fee for the fiscal year 2019-2020 was calculated at the rate of 3% on the basis of the minutes dated June 19, 2017 as follows: Group Parent Company Management fee = Free rate x Average shared uses 2020 2019 2020 2019 6,960,893 = %3 x 232,029,768 Rls(m) Rls(m) Rls(m) Rls(m) Interest on ordinary short-term deposits 7,750,043 8,748,510 7,805,519 8,803,988 Interest on special short-term deposits 5,183 470,457 5,183 470,457 37-2-1- Stated management fee (MF) Long-term deposits
Stated MF Stated MF One-year term 34,584,800 25,954,825 34,584,800 25,954,825 Rate (Percentage) Amounts in Rls(m) Rate (Percentage) Amounts in Rls(m) Two-year term 0 0 0 0 Ordinary short-term deposits 3 3,384,297 2.54 2,864,121 Three-year term 0 0 0 0 Special short-term deposits 3 1,370 2.54 1,160 Four-year term 3,440 7,609 3,440 7,609 General certificates of deposit 3 2.54 Five-year term 89,428 1,207,575 89,428 1,207,575 One-year term 3 4,828,325 2.54 4,086,198 General certificates of deposit 0 0 0 0 Two-year term 3 75 2.54 63 Investment deposits received from banks and credit 7,245 17,249 7,245 17,249 institutions Three-year term 3 2.54 Four-year term 3 410 2.54 347 42,440,138 36,406,225 42,495,616 36,461,701 Five-year term 3 10,638 2.54 9,003
Investment deposits received from banks and credit 3 1 2.54 1 institutions Note Group Parent Company 2020 2019 2020 2019 8,225,118 6,960,893 Rls(m) Rls(m) Rls(m) Rls(m) Interest on investment deposits in rial 37-5 42,440,138 36,406,225 42,495,616 36,461,701 37-3- Interests on statutory deposits are as follows: Interest on special certificates of deposit 0 0 0 0 Interest on foreign currency deposits 447,110 389,547 447,109 389,547 March 19, 2020 March 20, 2019 42,887,248 36,795,773 42,942,724 36,851,249 Rls(m) Rls(m) Average statutory deposit of investment deposits 35,576,860 28,055,901 Interest on statutory deposit 360,561 283,716 38- Reconciliation statement of provisional interests (on-account) paid on investment deposits (in rial) along with interest expenses on 37-4- Compensation of expenses related to depositors' free resource surplus to investment deposits shared uses
Pursuant to the directive No. 94/69383 of June 10, 2015 the expenses for depositors’ surplus resources are Note 2020 2019 calculated as follows: Rls(m) Rls(m) Final interest accrued to investment deposits 42,134,706 36,280,245 Provisional interests (on-account) paid on investment deposits 37-5 (42,495,616) (36,461,701) Profit-sharing incomes Surplus free resources of investment deposits to shared uses x Differential interest payable (surplus interest paid) to depositors (360,909) (181,456) Average shared uses 41,244,237 42,141,369x = 7,490,800 232,029,768
126 Annual Report 127 39- Fee and commission incomes 41- Incomes from sales and services rendered
Group Parent Company Group Note 2020 2019 2020 2019 2020 2019 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m)
Net fees for Gharzolhassaneh (interest-free) 39-1 Sales and services rendered 138,423,049 84,344,987 51,217 50,843 51,217 50,843 transactions Refund for reductions (7,070) 0
Fees for LCs opened 207,655 126,523 207,655 126,522 138,415,979 84,344,987 Fees for LGs issued 373,552 250,926 384,684 252,664 Forex transactions 187,867 200,531 187,867 200,531 41-1- The incomes earned from sales and services rendered are mainly related to the foreign currency trading/ Fees for managed funds 0 0 0 0 transactions carried out by the Saman Foreign Exchange Company. Banking drafts 734,805 442,064 699,431 422,575 Credit cards subscription 165,877 93,185 165,877 93,186 42- Cost price of sales and services rendered Fees for Shetab Payment System 592,591 552,110 592,591 552,110 Fees for cards issuance 21,489 17,205 21,489 17,205 Group Holders of Shetab Cards 363,167 296,045 363,167 296,045 2020 2019 Fees received for transactions on POS terminals 0 0 0 0 Rls(m) Rls(m) Fees received for short banking messages (SMS) 104,119 109,015 104,119 109,015 Cost price of goods and services rendered 137,123,304 83,433,077 Incomes received for sale of insurance policies 28,454 59,196 28,454 59,196 137,123,304 83,433,077 Fees received for other services 194,221 212,188 190,345 212,188 3,025,013 2,409,831 2,996,895 2,392,080 43- Net profit (loss) from foreign currency exchanges and ransactions
39-1- Net fees for Gharzolhassaneh (interest-free) transactions are as follows: Group Parent Company
2020 2019 2020 2019 2020 2019 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Fees received for Ghazolhassaneh (interest-free) loans 55,023 51,887 Profit (loss) from forex trading (buying & selling) 893,213 3,696,612 880,674 3,673,854 Fees for prizes on interest-free deposits (3,806) (1,044) Profit (Loss) from foreign exchange translation 3,142,818 2,795,748 3,106,321 2,742,757 51,217 50,843 4,036,031 6,492,360 3,986,995 6,416,611
40- Fee and commission expenses 44- Net other incomes and expenses
Group Parent Company Group Parent Company Note 2020 2019 2020 2019 2020 2019 2020 2019 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Income earned from sales of movable properties 0 0 14,403 0 Fees paid to Shetab payment system 464,386 435,249 464,386 435,249 Profit (loss) from sale of tangible fixed and Fees for POS terminals 0 0 0 0 44-1 119,057 51,038 72,732 50,956 intangible assets Fees for clearing house 0 0 0 0 Profit (loss) from sale of foreclosed 4,404,039 7,415,496 4,404,039 7,415,496 Fees paid to brokers 17,874 8,565 17,874 8,565 collaterals/properties
Fees paid to CBI- for Shaparak Payment System 1,784,197 1,420,738 1,784,197 1,420,738 Profit (loss) from sale of prior years' assets 44-2 1,928,398 127,487 1,928,398 127,487 Fees paid to persons/entities 0 53,989 0 90,357 Professional service fees 161,446 131,642 161,446 131,642 Fees paid to Electronic Payment Co. 0 414,686 0 414,686 Income from post, Telegraph, Telephone and Swift 1,729 1,430 1,729 1,430 Other 777,279 116,053 829,765 116,053 Insurance and loans monitoring 273 19 273 19 3,043,736 2,449,280 3,096,222 2,485,648 Income earned from legal proceedings (lawsuits) 0 2,194,653 0 2,194,653 Other 44-3 2,603,373 795,118 3,322,983 790,222 9,218,316 10,716,883 9,906,002 10,711,905
128 Annual Report 129 44-1- Profit (loss) from sale of fixed assets breaks down as follows: 45-2- The administrative expenses break down as follows:
2020 2019 Group Parent Company Cost Book value Amount sold Profit (loss) Profit (loss) 2020 2019 2020 2019 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Land 47,551 47,551 60,518 12,967 33,934 Office rents 480,130 436,697 448,203 402,916 Installations 0 0 0 0 0 Expenses for advertisement and marketing 273,494 267,461 251,264 262,780 Buildings 60,068 54,258 76,448 22,190 14,236 Training and research 33,076 26,749 32,628 26,736 Furniture and fixtures 0 0 0 0 0 Communications and telecommunications 0 0 0 0 Motor vehicles 0 0 0 0 0 Insurance payments 49,380 16,916 45,496 13,907 Assets in process of completion 0 0 0 0 0 Auditing and consulting fees 133,845 211,575 125,497 204,961 Orders and capital prepayments 0 0 0 0 0 Transportation charges 23,778 24,982 22,825 23,732 Capital items in stock/warehouse 0 0 0 0 0 Utilities: water and electricity 231,748 214,590 208,697 149,602 Goodwill for place of business 137,794 137,794 175,370 37,575 2,786 Repairs and maintenance of tangible fixed-assets 624,753 530,627 624,217 530,209 Royalties 0 0 0 0 0 Office supplies and consummables 157,694 97,731 153,546 94,813 245,413 239,603 312,335 72,732 50,956 Contribution paid to Deposits Guarantee Fund 233,033 298,167 221,835 298,167 Bonus and remuneration for board members 22,142 10,775 0 0
Attendance bonus for non-executive board 0 0 0 0 44-2- The balance of this account is related to the contracts made for sale of assets in preceding years which members were revoked in the fiscal year 2019-2020 and/or is related to the gains earned from installment-based Expenses for hosting guests and entertainments 321,289 208,929 318,784 207,681 sale of assets in preceding years. Contract-based services (outsourcing contracts) 0 0 0 0 44-3- The amount of Rls. 2,620 billion from this account receivable is related to the late payment penalty on Expense for automation 81,736 62,992 104,728 62,992 repayment of assets sale under note 15-2 of the financial statements. Meals for personnel 3,154 1,638 0 0 Gifts, presents and prizes 817 997 0 0 45- Administrative and general expenses Consulating service 13,767 22,013 0 0 Other expenses 1,054,899 1,173,731 945,527 1,119,884 Group Parent Company 3,738,735 3,606,570 3,503,247 3,398,380 Note 2020 2019 2020 2019 Rls(m) Rls(m) Rls(m) Rls(m) Personnel expenses 45-1 4,706,188 3,321,433 4,333,975 3,107,184 46- Expenses for doubtful debts Administrative expenses 45-2 3,738,735 3,606,570 3,503,247 3,398,380 8,444,923 6,928,003 7,837,222 6,505,564 Group Parent Company Note 2020 2019 2020 2019
45-1- The personnel expenses break down as follows: Rls(m) Rls(m) Rls(m) Rls(m) Specific expenses for doubtful debts, loans 46-1 501,200 700,000 500,000 700,000 Group Parent Company and claims
2020 2019 2020 2019 General expenses for doubtful debts, loans 46-2 2,000,000 400,000 2,000,000 400,000 Rls(m) Rls(m) Rls(m) Rls(m) and claims Salaries, wages and benefits 3,551,920 2,498,818 3,265,302 2,350,229 2,501,200 1,100,000 2,500,000 1,100,000 Social security insurance - employer's contribution 657,725 436,864 630,526 418,222 Employees' termination and pension benefits 11,692 8,199 0 0 Business travels and allowances 81,098 59,619 80,185 59,181 Other 403,753 317,933 357,962 279,552 4,706,188 3,321,433 4,333,975 3,107,184
130 Annual Report 131 46-1- The specific expenses for doubtful debts incurred for the loans granted and the amounts due are as follows: 47- Financial expenses
2020 2019 Group Parent Company Doubtful Doubtful debts Overdue Outstanding debts more than 5 Total Total 2020 2019 2020 2019 up to 5 years years Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Interest on facilities received from other banks 0 0 0 0 Net loans and non-current claims before deduction and credit institutions of provisions for doubtful claims Interest and late payment penalty 0 0 0 0 Other banks and credit institutions 0 0 0 0 0 0 on facilities received from the CBI Governmental entities/persons 0 0 0 0 0 0 Financial expenses of debt securities 21,281 2,234 0 0 Non-governmental entities/persons 577,002 1,484,883 28,195,752 0 30,257,636 29,297,675 Late payment penalty paid 0 0 0 0 Balance of other accounts receivable at year-end 0 0 0 0 0 0 Late payment penalty for overdraft Amounts due from subsidiary and affiliated companies 0 0 0 0 0 0 0 0 0 0 from current account with CBI (Note 14) 21,281 2,234 0 0 Other accounts receivable (Note 15) 0 0 3,019,163 0 3,019,163 2,859,421 577,002 1,484,883 31,214,915 0 33,276,799 32,157,096 Less: collaterals value by calculating risk factors Savings and investment deposits 20,798 2,529 43,630 0 66,957 92,219 47-1- The expenses paid for Sukuk bonds are related to the preceding years which were settled in the beginning Participation bonds and other debt securities 0 0 0 0 0 0 of the year 2015-2016. guaranteed by the government and CBI
Participation bonds and other debt securities 0 0 0 0 0 0 guaranteed by other banks 48- Depreciation/amortization expenses Banking LGs 0 0 0 0 0 0 LCs transacted 0 0 0 0 0 0 Shares listed on the stock exchange 0 0 126,143 0 126,143 123,516 Group Parent Company Real estates 470,000 714,995 17,017,571 0 18,202,567 18,941,952 2020 2019 2020 2019 Machinary 0 0 378,145 0 378,145 296,423 Rls(m) Rls(m) Rls(m) Rls(m) 490,798 717,524 17,565,489 0 18,773,812 19,454,110 Tangible fixed assets depreciation 503,171 433,666 405,587 422,370 Base balance for calculating specific provision 86,202 767,359 13,649,425 0 14,502,987 12,702,986 Intangible assets depreciation 276,472 104,104 266,147 119,482 Base factor for calculating specific provision 10 20 50 50-100 (percentage) 779,643 537,770 671,733 541,852 Specific provision for doubtful debts 8,620 153,472 6,824,713 0 6,986,805 6,486,805 Plus: specific provision for renewed and restructured 0 0 0 0 0 0 loans 49- Prior years’ adjustments Less: Balance of provision for doubtful debts during 8,620 153,472 6,324,713 0 6,486,805 5,786,805 the year Plus: bad loans during the year 0 0 0 0 0 0 Group Parent Company 0 0 500,000 0 500,000 700,000 Note 2020 2019 2020 2019 Rls(m) Rls(m) Rls(m) Rls(m) Accumulated effects of changes in accounting 0 0 0 0 46-2- General expenses for doubtful debts incurred for the loans granted and the amounts due are as follows: standards/policies Amendment of errors 49-1 (344,848) (947,006) (800,000) (920,303) (344,848) (947,006) (800,000) (920,303) 2020 2019 Rls(m) Rls(m) Balance of loans granted to other banks and credit institutions (Note…) 0 0 Balance of amounts due from the government (Note…) 0 0 49-1- The amendment of errors includes the following items: Balance of loans granted to governmental entities/persons (Note…) 0 0 Balance of loans granted to non-governmental entities/persons (Note 11-1) 237,882,415 177,186,032 Group Parent Company Balance of customers' liabilities for term LCs after deduction of advances (Note 21-1) 97,888 307,802 2020 2019 2020 2019 Amounts due from subsidiary and affiliated companies (Note 14-2) 5,202,307 2,428,333 Other accounts receivable (Note 15-3) 66,715,827 52,857,614 Rls(m) Rls(m) Rls(m) Rls(m) Less: Prior years' adjusted income tax 0 (220,303) 0 (220,303) Balance of loans granted and the amounts for which specific provision has been calculated (14,502,986) (12,702,986) Adjusted value added tax (VAT) 0 0 0 0 Base balance for calculating general provision 295,395,451 220,076,795 Adjusted withholding tax and prior years' salaries 0 (1,540) 0 0 Base factors for calculating general provision (percentage) 1.4 0.8 Adjusted insurance premiums 0 0 0 0 General provision for loans granted and amounts due 4,194,614 1,794,480 Adjusted provisions for doubtful debts (800,000) (700,000) (800,000) (700,000) Less: balance of general provision for loans granted and amounts due at year-end (2,194,749) (1,394,479) Plus: bad loans during the year 0 0 Adjusted incomes 480,315 0 0 0 2,000,000 400,000 Financial expenses 0 0 0 0 Other expenses (25,163) (25,163) 0 0 (344,848) (947,006) (800,000) (920,303)
132 Annual Report 133 49-2- In order to provide a fair profile of the financial position and the results of operations, all relevant 51- Non-cash transactions comparative items in the comparative financial statements have been amended and restated. For this The major non-cash transactions during the year break down as follows: reason, some of the items so compared may not necessarily correspond with those in the financial statements presented for the previous fiscal year. Note 2020 2019 Rls(m) Rls(m) 50- Reconciliation statement of net profit Assets acquisition in exchange for loans granted 51-1 3,818,758 1,163,544 The reconciliation statement of net profit along with the net cash inflow from operating activities breaks down as Assets offset for loans granted 51-2 0 0 follows: Restructured loans (to settle previous loans) 7,976,895 9,664,422 Exchange of assets 51-3 0 0 Capital increase from dividends accrued to shareholders 0 0 Group Parent Company Capital increase from assets revaluation reserve 0 0 2020 2019 2020 2019 11,795,653 10,827,967 Rls(m) Rls(m) Rls(m) Rls(m) Net profit (loss) 3,337,630 5,612,546 2,151,976 4,343,292 Depreciation/amortization expense 883,361 601,021 671,733 541,852 51-1- During the reporting year, the following assets have been acquired:
Net increase (decrease) in provision for employees' 352,258 272,932 333,085 255,047 termination and pension benefits 2020 Amount paid by Amount paid for Doubtful debts expenses 2,500,000 1,100,000 2,500,000 1,100,000 Debt amount at Value of acquired Debt balance Type of asset Type of customer customer/debt surpluse value of the acquisition asset appraised after Net increase (decrease) in financial expenses payable 37,708 0 0 0 foreclosed relationship remission by foreclosed property date by exper foreclosure bank as appraised Net increase (decrease) in income tax payable 154,373 0 0 0 Profit (loss) from sale of tangible fixed and intangible assets (72,832) (50,956) (72,732) (50,956) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Residential Unrelated Profit (loss) from sale of non-operating real estates (4,404,039) (7,415,496) (4,404,039) (7,415,496) 644,604 440,303 2,705 43,746 245,342 properties customer Net profit (loss) from cash foreign currency translation (3,108,227) (2,742,757) (3,106,321) (2,742,757) Business/office Unrelated 1,715,919 2,619,601 0 1,343,267 439,585 (319,768) (2,622,710) (1,926,299) (3,969,017) properties customer Unrelated Net increase (decrease) in operating liabilities Shares 0 0 0 0 0 customer Due to banks and other credit institutions (49,969,076) 82,882,696 (43,070,492) 82,882,696 Participation Unrelated 0 0 0 0 0 Customers' deposits 7,327,820 41,105,349 7,327,820 39,132,681 bonds customer Debt securities 0 0 Factory/plant Unrelated 0 0 0 0 0 and equipment customer Operating portion of provisions and other debts 6,287,994 3,497,898 6,592,128 223,245 Unrelated Land 1,011,129 758,854 107,446 94,740 239,569 Investment depositors' equity 98,706,638 44,393,709 98,706,638 44,393,709 customer 62,353,376 171,879,652 69,556,094 166,632,331 3,371,651 3,818,758 110,152 1,481,753 924,495 Net (increase) decrease in operating assets Due from banks and other credit institutions 1,233,948 719,643 732,438 2019 Amounts due from the government 0 0 0 0 Amount paid by Amount paid for Debt amount at Value of acquired Debt balance Loans granted to and amounts due from governmental Type of asset Type of customer customer/debt surpluse value of 0 0 0 0 the acquisition asset appraised after entities/persons foreclosed relationship remission by foreclosed property date by exper foreclosure bank as appraised Loans granted to and amounts due from (60,696,383) (33,436,879) (60,696,384) (32,636,879) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) non-governmental entities/persons Residential Unrelated 3,796,513 1,069,305 68,909 18,492 2,676,791.49 Investment in shares and other securities (34,346,517) (4,834,727) (34,265,743) (3,546,643) properties customer Due from subsidiaries and affiliates (2,773,974) 500,510 (2,773,974) 500,510 Business/office Unrelated 29,881 8,438 0 0 21,443.06 properties customer Other accounts receivable (13,581,652) (8,696,464) (13,858,213) (12,329,064) Unrelated Statutory deposit (13,243,878) (8,319,697) (13,243,878) (8,319,697) Shares 0 0 0 0 0 customer Operating portion of other assets (1,458,320) 1,619,441 (1,790,366) 6,982,415 Participation Unrelated 0 0 0 0 0 (124,866,776) (52,448,173) (125,394,610) (48,616,920) bonds customer Factory/plant Unrelated Net cash inflow (outflow) from operating activities (62,833,170) 116,808,769 (57,764,815) 114,046,393 0 0 0 0 0 and equipment customer Unrelated Land 5,271,535 85,802 19,014 4,762 5,171,481.12 customer 9,097,929 1,163,544 87,923 23,255 7,869,717
51-2- During the fiscal year ended March 19, 2020, the bank did not offset any asset with the loans granted. 51-3- During the fiscal year ended March 19, 2020 the bank did not have any exchange of assets.
134 Annual Report 135 52-1-2- The obligations pledged by the parent company under rial-denominated letters of credit are as follows:
Balance at the Credited (cancelled) Opened during the year Balance at the year end 8,453 681,531 10,905 690,276 8,745 91,264 338,842 292 191,998 1,018 Rls(m) 47,504 Amount in rial beginning of the year during the year
Type of credit Number Rls(m) Number Rls(m) Number Rls(m) Number Rls(m) Demand/call 1 2,170 0 0 0 0 1 2,171 Term 16 234,202 4 184,584 (12) (315,993) 8 102,794 211,299.74 419,354,636.00 0 13,987,798.54 2,082,545.69 587,407,451.45 405,588.10 21,068,361.63 89,013.46 14,025,503.84 0 Amount in forex 236,372 184,584 (315,993) 104,965 Balance at the year end 4 1 0 1 1 5 1 8 1 4 0 Number 52-2- The obligations under letters of guarantee issued in rial and foreign currency 52-2-1-The statement of obligations pledged by the bank under the letters of guarantee in foreign currency breaks down as follows: the year ) Effects of exchange 200,751 ) 202,241 ) 1,490 ) rate during 617 ) 17,237 ) 4,439 ) 2,645 ) 137,106 ) 1 38,452 ) 4,715 ) 871 ) ( ( ( ( ( ( ( 3,844.38 ( ( ( 0 Rls(m) ( ( Rial 2020 2019 Amount in forex Amount in rial Amount in forex Amount in rial Rls(m) Rls(m) UK Pound 138,334 0 138,334 7,715 ) 6,361,975 ) 6,535,463.90 ) 173,489 ) 12,991 ) 175,111 ) 26,400 ) 3,352,407 ) 2 1,437,054 ) 151,093 ) 1,311,083 ) 59,917 ) 9,405 ) ( ( ( ( ( ( ( ( ( ( ( 0 Rls(m) ( ( Amount in rial Euro 34,503,662 576,982 15,898,916.86 773,761 576,982 781,476
52-2-2- The obligations pledged by the bank under rial-denominated letters of guarantee are as follows: 251,620.40 ) 5,050,895,541.70 ) 47,227,761.62 ) 497,205,731.90 ) 2,460,757,339.40 ) 980,286.93 ) 11,378,100.66 ) 3,901,920.16 ) 276,565,520.00 ) ( ( ( ( 0 ( ( ( 0 ( ( Amount in forex 2020 2019 Credited (cancelled) during the year Rls(m) Rls(m) ) ) ) 4 3 18 ) 4 0 ( 2 0 0 ( 0 ( 0 ( 1 Number Obligations for LGs issued 19,172,424 13,605,571
19,172,424 13,605,571 0 3,622,721.94 0 0 3,622,722 3,336,999.92 0 0 118,952.02 0 166,770 0 Rls(m) 0 0 Amount in rial 52-3- Other obligations pledged by the bank break down as follows:
2020 2019 Rls(m) Rls(m) during the year 0 0 0 508,844,146.90 0 131,007,800 0 3,600,000 0 0 0 Amount in forex Obligations for participation bonds and other similar securities guaranteed 0 0
Opened (increased obligation) Obligations for credit cards 6,732,414 4,125,319 Obligations for contracts in forex - Foreign Exchange Reserve Account 0 0 0 0 0 0 0 0 0 0 0 0 0 Number Obligations for syndicated contracts 0 0
Obligations for commodity loans guaranteed 0 0
Obligations for contracts in rial 30,164,678 29,150,962 Obligations for contracts with the Management and Planning Organization 0 0 10,276.07 22,061.85 3,621,536 203,252.62 30,839.73 3,805,260 18,052.66 183,724 87,421.10 1,794,051.55 151,386.06 1,374,764.70 1,018.05 Rls(m) 112,136.04 Amount in rial
Obligations for amounts received from the National Development Fund (rial) 0 0
Obligations for amounts received from the National Development Fund (forex) 0 0 Balance at the Obligations by borrowers/users for credit services 4,057 4,125 beginning of the year Obligations for mutual funds guaranteed 7,694,879 2,566,525 276,565,520.00 462,920.14 5,470,250,177.70 2,349,383.54 47,227,761.62 2,082,545.69 2,917,156,990.85 28,846,462.29 89,013.46 1,385,875.03 17,927,424.00 Amount in forex Obligations for drafts 12,869,671 10,563,989 57,465,699 46,410,920
1 4 8 5 1 2 1 8 26 1 1 Number The statement of obligations pledged by the parent company under letters credit in foreign currency breaks down as follows: 52-1-1- Korean Won Term Euro Chinese Yuan Korean Won Turkish Lira Russian Ruble Swiss Franc Indian Rupee Demand/call Euro UAE Dirham Omani Rial Type of currency 52- Off-balance sheet items 52-1- The obligations under letters of credit (LCs) in rial and forex
136 Annual Report 137 52-4- Managed funds and similar items are as follows: 57- A profile of the bank’s risks Saman Bank has devised and established a specialized and appropriate structure which is consistent with the 2020 2019 accepted framework of risk management. This structure will enable the bank to manage the significant risks Rls(m) Rls(m) in banking industry within the context of a business model devised for banking activities and operations. The Loans granted out of managed funds 259,337 388,765 information provided in this section is rooted in the bank’s operations and reflects the effect of risks on the Unused managed funds 101,225 84,117 balance sheet and the statement of the profit and loss. The key risks which are chiefly addressed by the Saman Loans granted out of special Gharzolhassaneh (interest-free) deposits 176 176 Bank management in compliance with the risk management guidelines recommended by the Basel Committee Special unused Gharzolhassaneh (interest-free) deposits 41 41 (Basel II) are listed below: 360,779 473,099 • Credit risk • Liquidity risk 52-5- The obligations created under letters of credit and letters of guarantee by • Market risk a breakdown of collateral type • Operational risk The foregoing risks emerge from the bank’s business model and the risk management mechanism. In the 2020 2019 current model, attempt has been made to identify the events which may affect the level of the bank’s achieving its Rls(m) Rls(m) paramount goals within the framework of risk management. More notably in parallel with the risks evaluation, the bank’s risk management will take the anticipated loss index as well as the quantitative and qualitative models into Deposits 3,187,932 2,859,595 account and will continuously develop and enhance its evaluation models and patterns. Participation bonds and other debt securities guaranteed by government and CBI 0 0 Participation bonds and other debt securities guaranteed by other banks 0 0 57-1- Relationship between various business segments and the key risks each segment is exposed to: Banking LGs 512,015 459,280 Saman Bank has a strong determination to counter the business risks and environmental uncertainties. The key Letters of credit transacted 0 0 business segments impacted by financial risks include the retail banking division which is substantially affected Shares listed on the stock exchange 28,519 25,581 by credit and liquidity risks and the corporate banking division which is influenced by various credit, liquidity and Land and buildings 1,031,452 925,219 market risks. The operational risks may accordingly affect some areas of current activities of the segments which Machinery 44,998 40,364 will be surveyed and evaluated by applying the common practices. Checks and promissary notes 15,688,875 14,073,022 Other 49,063 44,010 20,542,854 18,427,071 Saman Bank Unseccured obligations 1,793 1,608 20,544,647 18,428,679
Private International Corporate Retail banking banking banking banking 53- Capital obligations and contingent liabilities 53-1- There were no material capital obligations as at the balance sheet date. Credit risk Low Credit risk Low Credit risk Average Credit risk Low 53-2- There were no material contingent liabilities as at the balance sheet date. Market risk Low Market risk Average Market risk Low Market risk Low 54- Earnings per share (EPS) Liquidity risk Low Liquidity risk Low Liquidity risk Average Liquidity risk Low 54-1- Basic earnings per share
The basic EPS is earned by dividing the dividends belonging to ordinary shareholders by the average weighted Operational risk Low Operational risk Low Operational risk Low Operational risk Average number of ordinary shares outstanding with the shareholders. The average weighted number of ordinary shares (basic) consists of 8,000,000,000,000 shares. 57-2- Framework and chart of risk management 54-2- Diluted earnings per share The risk management is responsible for developing and controlling the bank’s risk management policies. Thus The diluted earnings per share is earned by dividing the dividends belonging to ordinary shareholders by the in line with the policy of effective risk management, Saman Bank has devised and created a Risk Management average weighted number of ordinary shares outstanding with the shareholders upon adjustment of dilution System comprising the High or Senior Risk Committee and the Risk Department as illustrated in the diagram impact of all potential ordinary shares. The average weighted number of ordinary shares (diluted) consists of below. 8,000,000,000,000 shares. Board of Directors 55- Post-balance sheet events From the balance sheet date until the approval date of financial statements, there has been no material event which might have affected the financial statements and required disclosures.(Under section 5 of the rules Senior Risk Committee governing the minimum transparency standards and public disclosure by credit institutions.) CEO 56- Bad (written-off) debts Risk Department Saman Bank has no record of bad/written-off debts as at March 19, 2020.
138 Annual Report 139 • At Saman Bank the responsibility for all accepted risks shall remain with the Board of Directors ; 57-3-2- Credit policies and procedures • The Bank’s Senior Risk Committee shall regularly monitor and measure the existence, accuracy and Saman Bank credit policies covering loans, facilities and outstanding debts or receivables due to this bank are adequacy of the management policies and processes, control and encounter with various risks affecting described as follows: the bank’s operations. Additionally, the Senior Risk Committee shall also have to ensure the compli- A- Loan facilities: to abide by the authorized sanctioning limits and amend the loans portfolio based on tenor ance of the bank’s procedures for internal controls with the framework recommended by the Central and return; Bank of Iran, to monitor implementation of the risk policies adopted by the Committee and the board of directors by concentrating on the consolidation and enhancement of bank reputation and position and to B- Receivables: To reduce the debt balance (receivables) and review the records of large debts. maintain a proper capital adequacy ratio as required. The outcome of the Committee’s actions shall be Accordingly, the most significant plans and credit requirements of the bank are as follows: submitted to the bank’s board of directors under the title of “Guiding and Regulatory Reports”; To set the quantitative goals of the policy on loan facilities, debt collection, letters of guarantee and The Senior Risk Committee, regarded as a key body which is substantially influencing the various risk • • letters of credit; management areas pursues the following goals: • To define the scope of powers or sanctioning authority of credit departments in granting loans and – To approve the level of risk appetite and desired capital adequacy ratio every six months, monitor the collecting debts; process of this ratio and prepare it for approval by the board of directors along with the key policies for maintenance of this ratio up to the desired level; • To install and implement the monitoring systems for granting loans; – To approve the annual report on the performance appraisal of the bank’s risk management system • To emphasize the customers’ repayment capacity for receipt of loans; and prepare it for submission to the board of directors to be incorporated in the annual report • To establish a supervisory and controlling system over the quality of informational reports; addressing the shareholders’ general meeting; • To mitigate the risk of loans and commitments by receiving secure collaterals; – To approve the annual risk management plans concerning the development, improvement and implementation of the risk measurement, assessment and management systems in the bank which • To comply strictly with the regulations governing the single borrower/beneficiary, related parties as well may include procurement of required hardware and software facilities and recruitment of human as the large loans and debts; resources; • To regularly hold the meetings by Restructuring and Debt Collection Committees at various levels so as – To review reports and conduct periodic assessment on the calculation and measurement of the to take decisions on the customers’ outstanding debts as quickly as possible; bank’s overall risks and identify the improved areas (with emphasis on the compliance with the ap- • To pay special attention to the reasons for growing overdue and outstanding debts, paid letters of credit, proved policies for the risk control management, cases of non-compliance, departments and persons paid letters of guarantee by preparing a statement, filing a report and making necessary involved, feedback policies in respect of non-compliance and effectiveness of such policies) and recommendations; provide information to the board of directors on the outcomes of the evaluation and measures taken in these • To conduct periodic inspections by the inspectors named in relevant directives and pay random visits to the loan business places for monitoring their progress, and functionality by supervisors, credit areas; committee members and other competent authorities. • The Risk Department has been created to act as an executive arm of the Senior Risk Committee with the aim of fulfilling the requirements set forth by the Central Bank of Iran and preparing the grounds for 57-3-3- Executive units of credit risk management execution of the guidelines recommended by the Basel International Committee. This department will The implementation areas will include across-the-board sectors (all departments and divisions) of the bank in identify the principal financial risks as accepted by the Basel Committee including credit, liquidity, mar- particular, branches, credit affairs division, debt collection office, credit committees and other credit units. ket and operational risks and will report them to the High Risk Committee, the CEO, and other appropri- ate committees. The Risk Department reports to the Bank Deputy for Supervision as specified in the 57-3-4- Scope of powers at various organizational levels for sanctioning loans and liabilities organization chart. More importantly, this Department performs its functions in compliance with the directives and instructions of the High Risk Committee towards accomplishment of its goals. An important element of credit risk management is to specify the level of exposure for individual counterparties or a group of related counterparties. Considering the segregation of Retail and SMEs Banking and Corporate 57-3- Credit risk Banking, in Saman Bank, the prevalent criteria and standards for decision making on loans and liabilities will include the three areas of: Large Loans and Liabilities 1 , Related Parties’ Loans and Liabilities, and Retail and SMEs Loans and Liabilities. 57-3-1- Definition of the credit risk Credit risk is the likelihood of suffering loss arising from the counterparty’s failure to meet his contractual Large loans and liabilities obligations with respect to the principal amounts and interests. That is the reason why the main component in Loans and obligations in the area of corporate banking shall be based on customer due diligence (CDD) of a banking operations will meaningfully be premised on the correct performance, design and implementation of single borrower or beneficiary . The following persons will fall under the category of single beneficiary 2: written procedures and policies for identifying, assessing, monitoring and controlling the credit risk. The credit policies will provide a framework for financings and granting credit facilities by the bank. Obviously, the bank • Natural or legal person independently credit policies shall include the matters such as target markets, portfolio composition, pricing requirements, • The ownership relationships between the natural and legal persons which include the following: terms of reference, loan approving or sanctioning authorities, reporting procedures, the process relating to list of exclusions and … Such measures shall be clearly defined in line with the banks’ contingent procedures and – A natural person as well as his/her spouse and dependents with affiliates and their associates; shall be appropriate to the scale and complexities of banking operations. – A legal person/entity with affiliates and their associates; More significantly, the credit policies shall be devised and implemented with a view to the internal and external Affiliates and associates of a natural person or a legal entity having interrelationships provided that factors such as the bank market position, business locations/areas, staff capabilities and technological – multiplication of their ownership percentages in such units will be at least 20%. advances. Arguably, these policies shall particularly define the banks’ objectives in the areas of portfolio composition, exposure limits of the counterparty or a group of related parties, special industries or economic sectors, 1. It means the total net loans granted and the liabilities so created to or for each single beneficiary which will add up to at least 10% of the bank geographical regions and special products. In general, banks shall ensure that their internal exposure limits base capital. are consistent with any type of contingent limitations or scopes which have been determined by the banking 2. Single borrower or beneficiary means a natural person or a legal person independently or two or more natural persons who may on the grounds inspectors (regulators). of enjoying ownership, managerial, financial or controlling relationships or otherwise place the bank exposed to risks (in a vulnerable position) in such a way that the problems pertaining to one of them can affect the other/others and this domino effect may result in the failure of repayment or default on the loan obligations.
140 Annual Report 141 • The managerial relationships between the legal entities which include the following: • A legal entity whose capital or shares are owned by the related parties stated in items 1,2, 3 and 4 above in a manner that the said related parties have the authority to appoint at least one member of the board A legal entity with other legal entity having at least two thirds of joint board members; – of directors in this legal entity; A legal entity with other legal entity having joint chairmanship of board of directors. – • A legal entity in which the related parties stated in items 1, 2, 3 and 4 above hold management positions • The financial relationships between a legal entity and a natural person which include the following: (board member, executive board, managing director (CEO) and deputy managing director); – A natural person with his/her spouse and dependents; • A legal entity that directly holds at least 5% of shares in the credit institution; – The obligor with obligee provided that the amount of guarantee comes up to at least 75% of the • A legal entity in which at least 20% of its capital or shares is directly owned by the legal entities stated in obligor’s annual income or assets. The reverse relationship in this proportion may apply when these item 8 above. two parties have mutually agreed on counter guarantees; Limits of loans to and liabilities by related parties – Party (A) with party (B) provided that over 50% of the gross annual income of party (A) is funded by party (B). The reverse relationship of this proportion does not apply; • Individual limit: the total net loans to and obligations by each person shall not exceed 3% of the bank’s base capital. – The persons who each holds at least 20% of shares or capital with a voting right for a legal entity; • Group limit: the total net loans to and obligations by related parties shall not exceed 40% of the bank’s – The persons who earn each over 50% of their gross annual income from the same income source. base capital. • The controlling relationships between a natural person and a legal entity include the following: The bank board of directors shall approve the loans to and obligations by related parties prior to the grant of – A natural person as well as his/her spouse and dependents with a legal entity who has in any manner any loans or creation of any obligations. The board meetings for decision making on the grant of loans to or arranged the voting right of over 20% of such legal entities’ votes; creation of obligations by the related parties shall be held without the presence of the related parties involved in this process. – A legal entity with other legal entity who has in any manner arranged the voting right of over 20% of the other legal entity’s votes; Corporate loans and liabilities – A natural person or a legal entity with other legal entity who has the power to direct and control the The Corporate Banking Commission shall have the authority to sanction the loans and credit lines for each financial and operational policies including the decisions on the distribution of dividend or profit; corporate customer up to the limit of Rls. 800 billion and the bank board of directors shall approve the amounts – A natural person or legal entity with other legal entity who has the power to appoint or dismiss the of loans in excess of Rls. 800 billion. majority of board members of the entity in any manner arranged. Retail and SMEs loans and liabilities1 When single borrowers/beneficiaries are identified, the corporate banking offices shall enter the information about the loan borrower in the bank’s statistics and database management system in the unit of the single The loans and obligations in the area of retail and SMEs banking shall be based on the type of customer and the beneficiary. amount of requested loans. Thus, the prevailing criteria for identifying the retail and SMEs customer include the following: Payment of loans to or creation of obligations for any single borrower which may cause such loans and obligations to fall under the category of “Large Loans and Liabilities” shall have to receive the approval of the • Natural persons: all natural persons over the age of 18 applying for any amount of loans and obligations. bank board of directors. Therefore, if the customer meets the requirements for receipt of loans and obligations • Legal entities: that group of legal entities that along with the relevant single beneficiaries make a within the stipulated limits, he shall finally have to obtain the authorization from the board of directors. request for loans and liabilities for the maximum amount of Rls 500 billion and/or its rial equivalent in foreign currencies. Limits of large loans and liabilities All branches are required to accept and consider the credit applications within the above mentioned limits and, • The maximum total large loans to and obligations by ay single borrower shall not exceed 20% of the where the amounts of such applications are in excess of the stipulated limits, they have to send them to the bank capital; Corporate Banking Department in coordination with the Retail and SMEs Banking Department. Regardless of the loan amounts being requested or used, any credit services to the following customers shall be provided The maximum total large loans and obligations will be eight times (eightfold) of the bank’s base capital; • solely by the Corporate Banking Department: When the loan amount requested by a single borrower is more than the specified limit in the applicable • Manufacturing companies with a registered capital in excess of Rls. 100 billion; regulations, the bank may under the prevalent rules, apply the procedures for granting joint-loans (such • as syndicated, consortium or similar methods). • Trading and service companies with a registered capital in excess of Rls. 120 billion; State-run corporations and non-governmental public organizations; Loans to and liabilities by related parties • • Related parties and bank’s subsidiaries and affiliates; The loans to and obligations by related parties will be based on the KYC of related parties 1 . The following persons will fall under the category of related parties: • Subsidiaries and affiliates to other banks; • Directors of the credit institutions including board members, managing director (CEO), deputy managing • Public joint-stock companies listed on the Stock Exchange. director and other executive board members; Sanctioning bodies in Retail and SME Banking Department • Independent auditor (whether the auditing firm and copartner) and legal inspector of credit institution; In managing the retail and SME banking affairs, the branches of Saman Bank vary in terms of credit A natural person and his family members including the father, the mother, the spouse and the children • sanctioning authority, and are categorized into five classes: who jointly or severally own at least 5% of shares in the credit institution; Top Group Branches, Group I Branches, Group II Branches, Group III Branches and Group IV Branches. The The father, mother (parents), spouse and children of the related parties stated in items 1 and 2 above; • scope of credit sanctioning powers of each group for acceptance and approval of the types, components and
1. SME or Business loans: means facilities granted to the targeted trade union or guild for the purpose of providing working capital to run and 1. Related parties are natural and legal persons who have the power to directly and/or indirectly control the decisions taken in the bank or have expand the existing businesses or create new business ventures. significantly influenced in one way or another such as personal, ownership, managerial or supervisory relationships in a way that they may pref- Retail loans: means the facilities granted to meet the consumer needs of retail customers such as home repairs and purchase of housing and erably use the bank as their financial resources and thus the bank’s interests are overshadowed by the interests of the said persons. consumer goods.
142 Annual Report 143 amounts of collaterals shall be subject to the requirements set forth in a Saman Bank directive governing 57-3-5- Methods of reducing credit risk (risk mitigation) “The Requirements for Granting Retail and SME Loans” and subsequent amendments and annexes thereof. One way of mitigating the credit risk is the collateral coverage with a view to the risk level and debt liquidity For the purpose of approving credit loans and letters of guarantee and in compliance with the scope of ratio. Considering the risk exposure, collaterals may be divided into three grades: credit sanctioning authority defined for branches, all the bank branches shall have to review and decide on all the customers’ credit applications being consistent with the scope of delegated powers (by computing first grade collaterals and guarantees the customer’s current debts and liabilities) at the commissions which are held at the various levels of bank organization. The commissions which are authorized to make decisions on granting loans in rials and foreign • First grade collateral of type I: includes Gharzolhassaneh (interest-free) savings, cash collateral in currencies, issuing letters of guarantee, opening letters of credit and entering orders for documentary drafts Rials and without banking cards; guaranteed by the bank include the following: • First grade collateral of type II: includes other deposits (excluding current accounts and Atieh savings • Branches Credit Commission deposits), long-term registered and bearer certificates of investment deposits issued by Saman Bank with their interest rates lower than and/or equivalent to the current interim (on-account) interest rates • District Credit Commission (District head office) of the bank’s long-term investments, investment certificates of fixed income funds for which Saman • Internal SME Credit Commission Bank is acting as the registrar or guarantor of the fund’s units; • SME High Credit Commission • First grade collateral of type III: includes participation bonds issued by the CBI as well as the participation bonds issued by the state (governmental bonds); The scope of sanctioning authority in rials delegated to credit commissions of branches and • First grade collateral of type IV: Includes investment deposits and general long-term registered and district head offices bearer certificates of investment deposits issued by Saman Bank with their interest rates higher than the current interim (on-account) interest rates of the Bank’s long-term investments. Sanctioning authority of credit commissions of branches Rls(m) Second grade collaterals and guarantees First grade collaterals: type I and First grade collaterals: type I and first grade collaterals III or second include immovable properties and shares of companies listed on the stock exchange (excluding the shares of Type of loans andcredits third grade guarantee combined Type of Commission grade combined companies which are traded on the agreed primary market). in Rial Natural persons Legal persons Natural persons Legal persons Third grade collaterals and guarantees Rls(m) Rls(m) Rls(m) Rls(m) include the guaranteed promissory notes received from customers as well as guaranteed documents. Loans in rial 2,000 3,000 600 1,000 Class III Branch Credit Commission Net LGs in rial 2,000 3,000 600 1,000 It is noted that the procedures for collaterals acceptance are subject to the requirements set down in the bank’s directive on the retail and SMEs loan facilities as well as the subsequent amendments. Cumulative cap 4,000 6,000 1,200 2,000 Loans in rial 3,000 5,000 1,000 1,500 57-3-6- Customers’ credit scoring process Class II Branch Credit Commission Net LGs in rial 3,000 5,000 1,000 1,500 For the credit scoring process, certain components and criteria such as microelectronic environment, Cumulative cap 6,000 10,000 2,000 3,000 customer’s business status, customer’s financial standing and his credit reputation are examined to assess Loans in rial 5,000 7,000 1,500 2,500 his eligibility for receipt of loan facilities. Considering the fact that the bank has customers from consumption, Class I Branch Credit Commission Net Loans in rial 5,000 7,000 1,500 2,500 SMEs and corporate categories, being inherently different, it will apply varying methods of customer credit scoring specific to each category. Thus the scoring criteria will cover three areas for customers from Cumulative cap 10,000 14,000 3,000 5,000 consumption, SMEs and corporate sectors. Overall the general scoring process will include the following stages:
The scope of sanctioning authority of district head offices and SMEs credit commissions • The primary responsibility for receiving customers, allocating credit loans, preparing credit reports, assessing customer’s scores, making enquiries from the existing sites/databases and keeping the relevant data and information shall remain with the branches; The scope of sanctioning authority of district head offices and SMEs credit commissions In addition to the said reports and records, all branches shall, for payment of business loans up to the First grade collaterals: type First grade collaterals: • First grade collateral I and first grade collaterals: type I and third grade limit of ten billion rials (like loans for working capital, business expansion and/or business creation) act types I, II or IV type II or III guarantees combined for a site visit of the customer’s business location, examination of financial statements and preparation Type of Type of loans and credits of a report on his financial position and then in the final analysis, prepare an expert report containing Commission Natural Legal Natural Legal Natural Legal an express opinion on the customer’s credit file which will serve as a basis on which decisions are to be persons persons persons persons persons persons made as appropriate; Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) The responsibility for receiving the proposals made by branches, evaluating the customer’s scores/ Loans in rial • 20,000 rates, managing the credit limits assigned for branches and expressing opinion on the suggested credit District Net demand LCs in foreign currency offices shall rest with credit commissions; commission Net LGs in rial 50,000 The responsibility for sanctioning credits in the decision-making departments in respect of the credit Cumulative cap 50,000 • size shall remain with credit commissions; Loans in rial and foreign currency 50,000 70,000 25,000 35,000 Internal credit The responsibility for providing an independent opinion on the loans granted by designing and updating Net LCs in rial and foreign currency • commission the scoring/rating system, controlling and monitoring the credit risk shall remain with the risk Net LGs in rial and foreign currency Authority delegated to 100,000 the SME Internal Credit management department; Loans in rial and foreign currency Commission SME credit The functions assigned to the risk management department are segregated from the functions of the Net LCs in rial and foreign currency 300,000 • commission business activity and customer relationship management in credit areas; Net LGs in rial and foreign currency • The policies on decision-making, monitoring and reporting independently about the credit risk shall be valid under any circumstances.
144 Annual Report 145 The scoring criteria for corporate customers of Saman Bank would be described in the following section. Business risk profile
Development of a new scoring model for the bank’s corporate customers the business risk of an entity in the market and its sectoral movements are regarded as a business driver. The business risk profile may be classified into the following sectors: In order to improve and enhance its scoring process, the bank has developed a new model for scoring the Industry analysis corporate customers. This model which has been adopted from the international standards is employed with • a view to the circumstances prevailing in Iran. The main target group of this new model will initially include • Competitive position the legal customers’, and at the later stages, the major natural customers. – Industry analysis: the industry-related drivers are defined with the aim of employing general drivers Overall structure for credit scoring of corporate customers in each industry and constitute the following sub-sectors: – Business cycles: this factor will measure the risk of movements in sales and operating profit in a predictable future compared with the previous industrial performance/indexes; – Entry barrier: a sub-sector which measures the support and protection level of the companies involved in industry; Drivers related to the industry – Alternative risk: this factor will measure the risk and vulnerability of industry with regard to obsolescence and maturity of technology.
Co-direction of – Competitive position: this situation is defined with emphasis on specific aims and relevant risks by business cycles analyzing the following factors: – Market share Entry Barriers Diversity and dispersion Industry risk – – Operational profitability Alternative risks Financial risk profile Business risk The financial risk will measure the strengths of a company’s financial profile and assess its ability for profile Market share (historical and creation of a recurring cash flows, liability requirements, financial flexibility and viability. Doubtless, an entity planned processes) with a strong financial risk profile will outperform as a mitigant to adjust the adverse effects of economic cycle, industrial dynamism, regulatory changes and income-based unforeseen losses. This scoring process Product diversity, geographical Overall concentrated on liquidity ratios will remain invariable as leverage and cost coverage ratios. These ratios which location, customers, suppliers, assessment assets, sales outlets are appropriate for the credit risk assessment will slightly register any change or deviation in the accounting Competitive system compared to the financial ratios which are based on profit and loss items or the balance sheet items. position Operating profit (EBITDA, historical background, and forecasts thereto) Assessment of the scoring cards will be made by applying the following risk factors: and its fluctuations Scoring • Financial leverage and debt Special corporate scoring process • Financial flexibility and creation of cash flows factors • Liquidity The foregoing model has devised ten grades or categories for assessment and the customer will be placed in Financial leverage and debt these categories based on the ratings they have achieved:
Financial risk Grade Risk category S and P: corresponding rates liquidity profile Grade 1 Low risk AAA to BBB+ Grade 2 Low risk BBB Creation of cash flows Grade 3 Low risk BBB- Grade 4 Average risk BB+ Grade 5 Average risk BB Financial policies Grade 6 Average risk BB- Grade 7 High risk B+ Support or contribution Additional key Adjustment Grade 8 High risk B indexes in scoring provided by the government of industrialists Grade 9 High risk B- Grade 10 Default CCC Comparison with co-group companies
Based on this model, nine grades of customers with low, average and high risks are ranked in the non-default category and grade ten registers the customers whose businesses are in a very bad condition. The overall assessment will principally be based on the business risk profile and the financial risk profile which will be adjusted or modified by taking the following factors into account:
146 Annual Report 147 • Financial policies 57-3-7-3- Credit quality of participation bonds, Islamic treasury bonds, Sukuk bonds, units of • Supports provided by the parent company and the government mutual funds and similar items It is further noted that the foregoing methodology shall currently apply to all corporate customers of Credit quality analysis Saman Bank. 2020 2019 57-3-7- Analysis of credit quality Rls(m) Rls(m) The bank assets quality including loans, liabilities/obligations, investments, type, amount and adequacy of the Issued by the government and Central Bank collaterals received (ratio of loans balance to updated value of collaterals) LTV in terms of credit risk profile Ministry of Economic Affairs and Finance (Akhza 706) 112,349 0 have been illustrated in tables 57-3-7-1 through 57-3-7-4. Ministry of Economic Affairs and Finance (Akhza 709) 67,990 0 Ministry of Economic Affairs and Finance (Akhza 715) 117,115 0 57-3-7-1- Analyzing credit quality of loans granted, obligations and investments based on Ministry of Economic Affairs and Finance (Akhza 802) 1,352 0 the bank’s internal credit scoring/rating system Ministry of Economic Affairs and Finance (Eshad 9) 4,551,663 0 Ministry of Economic Affairs and Finance (Akhza 801) 1,971 0 Loans granted to Obligations under LGs Loans granted to banks Investments Ministry of Economic Affairs and Finance (Arad 22) 10,000,630 0 customers and LCs Ministry of Economic Affairs and Finance (Senft 2997) 1,088,599 0 2020 2019 2020 2019 2020 2019 2020 2019 Ministry of Economic Affairs and Finance (Senft 984) 2,024,205 0 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Benefit bonds (Efad 61) 1,973,045 0 First grade- low 0 0 171,013,992 111,053,117 51,248,334 16,982,591 20,418,619 18,296,115 19,938,920 0 risk Issued by state-run corporations Secod grade- Khordad Dovom Financial Intermediary Co. (Ltd.) 29,938 29,938 0 0 36,771,373 6,388,288 0 0 126,028 132,564 medium risk Tir Sevom Financial Intermediary Co. (Ltd.) 1,998 1,998 Third grade-high Bahman Sevom Co. 34,800 34,800 0 0 30,097,050 59,744,627 0 0 0 0 risk Shahrivar Sevom Financial Intermediary Co. 0 291,190 Fourth grade- to Shahrivar Chaharom Financial Intermediary Co. (Efad 1) 500,080 0 be written-off 0 0 0 0 0 0 0 0 Khordad Financial Intermediary Co. (Efad 51) 3,000,081 0 (bad debt) Khordad Financial Intermediary Co. (Efad 52) 1,926,757 0 Total gross 0 0 237,882,415 177,186,032 51,248,334 16,982,591 20,544,647 18,428,679 5,493,654 357,926 amount Issued by non-governmental Sector Value inpairment 0 0 (11,012,515) (8,512,515) 0 0 0 0 Saman Yekom Mutual Fund 10,000 10,000 reserve Agah Yekom Charity Fund 2,500 2,500 Net book value 0 0 226,869,900 168,673,517 51,248,334 16,982,591 20,544,647 18,428,679 Amin Saman Mutual Fund 10,000 10,000 Mutual Fund for Iran Capital Market Development 35,000 35,000 • Investments shall include any type of security characterized by equity like various shares. Negin Saman Fixed-income Fund 655,818 561,934 Sahm Ashna Special Yekom Mutual Fund 291,323 122,203 1,004,642 741,637 57-3-7-2- Table for analyzing the credit quality of the loans granted, obligations and 26,437,215 1,099,563 investments based on the assets categories
Obligations under LGs Loans granted to banks Loans granted to customers and LCs
2020 2019 2020 2019 2020 2019 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Current 0 0 207,624,779 147,888,357 20,544,647 18,428,679 Overdue 0 0 577,002 542,812 0 0 Outstanding 0 0 1,484,883 7,402,838 0 0 Doubtful 0 0 28,195,752 21,352,025 0 0 Total gross amount 0 0 237,882,415 177,186,032 20,544,647 18,428,679 Value inpairment reserve 0 0 (11,012,515) (8,512,515) 0 0 Net book value 0 0 226,869,900 168,673,517 20,544,647 18,428,679
148 Annual Report 149 57-3-7-4- Types and amounts of collaterals received from credit customers 57-3-7-5- The balance of loans based on the ratio of loans balance (less provisions) to updated cash value of collaterals Types of main collaterals 2020 2019 Rls(m) Rls(m) Types of main collaterals 2020 2019 Loans granted to natural persons Rls(m) Rls(m) Cash 2,173 1,803 Loans granted to banks Participation/Sukuk bonds 450 3,733 Less than 50% 0 0 Marketable securities (shares) 104,392 105,895 51 to 70% 0 0 Non-listed securities (shares) 0 0 71 to 90% 0 0 Deposits 9,452,255 5,605,235 91 to 100% 0 0 Real estates 46,936,579 39,493,256 Over 100% 0 0 Plant and equipment 5,467 1,530 0 0 Letters of guarantee 29,792 18,077 Loans granted to real persons Checks/Cheques 67,736,662 43,981,079 Less than 50% 30,006,297 17,488,503 Promissary notes 7,656,819 6,545,922 51 to 70% 4,102,460 4,220,999 Binding contracts/agreements 7,033,630 6,882,044 71 to 90% 4,506,586 2,854,386 Other 100,227,324 31,590,608 91 to 100% 787,883 6,590,480 239,185,543 134,229,181 Over 100% 29,747,491 17,053,332 Loans granted to legal persons 69,150,716 48,207,699 Cash 416,490 1,868 Loans granted to legal persons Participation/Sukuk bonds 0 0 Less than 50% 21,101,109 13,026,215 Marketable securities (shares) 15,374,911 4,390,271 51 to 70% 2,837,407 3,853,969 Non-listed securities (shares) 0 0 71 to 90% 1,840,318 2,292,542 Deposits 13,688,153 6,828,037 91 to 100% 7,449,536 3,685,685 Real estates 22,802,170 26,629,879 Over 100% 135,503,328 106,119,923 Plant and equipment 1,446,817 1,067,380 168,731,698 128,978,333 Letters of guarantee 1,282,454 1,261,554 237,882,415 177,186,032 Checks/Cheques 257,561,763 188,253,470 Promissary notes 9,232,735 9,015,759 • In the calculation process, this amount is the updated mortgaged value of collaterals with respect to the liquidity factors specified in the directive for provisioning and assets classification. This table is to disclose the coverage of collaterals in the bank’s possession for the Binding contracts/agreements 9,077,220 10,064,339 balance of customers’ debts. Other 14,158 21,060 Total collaterals of legal persons 330,896,871 247,533,618 57-3-8- Credit risk concentration 570,082,414 381,762,799 The credit risk concentration in Saman Bank has been defined in a manner to reflect the type, volume • Based on the written report filed by the bank’s expert, the said amount is the mortgaged value of all collaterals in possession. and nature and content of credit risk. More significantly, the credit risk concentration will include the two components of target market and maximum market share of credit portfolio. To this end, Saman Bank annually drafts an operational program in which the target market covering the on-and off balance sheet items will be determined each year. Thus the bank will define its credit risk concentration in the following areas: • Corporate banking • Retail and SME banking Further it should be noted that the responsibility for defining and reviewing various economic sectors including goals and total amounts of credit portfolio shall remain with the High Committee for Strategy and Budget.
150 Annual Report 151 57-3-8-1- Distribution table of loans and investments by economic sectors and their inland 57-3-8-2- Distribution table of loans by participation and constant (fixed) profit contracts and and overseas concentration type of customer
Loans granted Investments Obligations for LGs & LCs Loans granted during the year Loans balance at year-end 2020 2019 2020 2019 2020 2019 Amount Total Amount Total Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Percentage Rls(m) Percentage Book value 237,882,415 177,186,032 51,248,334 16,982,591 20,544,647 18,428,679 Real customers 39,368,994 7 45,561,213 19.4 Loans/liabilities by economic sectors Constant (fixed) profit contracts Industry 60-3-8-1-1 54,470,471 44,145,782 18,025,919 11,992,763 3,979,436 3,350,462 Legal customers 166,176,707 31 77,477,194 33.0 Housing 23,058,139 21,207,223 0 0 110,265 14,579 205,545,701 39 123,038,407 52 Commerce 84,430,535 62,176,117 0 0 6,595,352 8,855,540 Real customers 18,376,400 3 20,646,326 8.8 Services 71,544,550 42,424,640 5,908,036 3,617,586 9,453,953 6,176,491 Participation contracts Legal customers 307,790,147 58 90,321,356 38.7 Agriculture 1,016,936 1,091,878 0 0 56,075 876 Banks 0 0 877,164 272,679 0 0 326,166,547 61 110,967,682 48 Mining 315,839 452,970 0 0 349,566 30,732 531,712,248 100 234,006,089 100 Other 3,045,945 5,687,422 26,437,215 1,099,563 0 0 237,882,415 177,186,032 51,248,334 16,982,591 20,544,647 18,428,679 • The Gharzolhassaneh (interest-free) loans have been classified as non-constant profit contracts. Size of loans/degree of obligations onshore and offshore (inland & overseas) Inland 237,882,415 177,186,032 51,248,334 16,982,591 20,544,647 18,428,679 Overseas 0 0 0 0 0 0 57-3-9- Procedures for managing non-current loans 237,882,415 177,186,032 51,248,334 16,982,591 20,544,647 18,428,679 The bank’s policy on the management of non-current claims is premised on preventive measures supported by collaterals and proper management with follow-up actions and debt collection procedures. Considering the requirement set forth in the Law on the Elimination of Barriers to Competitive Production and Enhancement of 57-3-8-1-1- Distribution of loans, obligations and investments by type of industry: National Financial System passed on April 21, 2015 by the Islamic Parliament and in compliance with the CBI’s directive No. 94/69383 governing the procedures for calculation and distribution of shared profit, banks shall have to reform their assets structure and increase the share of income-generating assets through the sale and 2020 2019 disposal of the foreclosed properties and assets and collection of debts. In order to improve its assets structure Rls(m) Rls(m) and achieve the targets set for collection of non-current debts, Saman Bank takes appropriate measures within Loan facilities the context of its own internally approved by-laws and procedures. To this end, where the follow-up actions Automobile and auto parts 625,061 165,519 towards collection of the bank’s claims in the pending files (including movable and immovable properties and/ Mining and metal industries 179,839 64,675 or rights and privileges which will be held or put under the bank’s ownership) fail to collect debts at branch Petrochemical, chemical industries and oil products 1,201,970 651,877 levels and credit departments, measures will primarily be taken by relevant departments and Debt Collection Foodstuffs and pharmaceuticals 10,910,725 5,696,440 Office and, at a later stage, legal actions will be taken by the bank’s legal deputy. Energy 0 0 Contractual services 0 0 In performance of operational and strategic actions and subject to the applicable laws and regulations, Saman Telecommunication, computer and related industries 40,935,004 37,286,814 Bank shall have to sell surplus and foreclosed assets and properties to collect its outstanding and doubtful Financial intermediary 0 0 debts. As has been contemplated in the organizational structure, the Collection Office shall be tasked with Other 617,872 280,456 reducing the amounts of past-due loans. Accordingly, the bank’s Support Deputy shall be responsible for sale 54,470,471 44,145,782 of the bank’s real estate properties. Investments The procedures for collecting claims and debts by all credit departments and offices of deputies are governed Automobile and auto parts 0 0 by the applicable laws and regulations in the country adopted by the CBI as well as the bank’s internal by-laws Mining and metal industries 0 0 and directives. As prescribed in the prevalent laws, requirements and the bank’s internal by-laws, the overall Petrochemical, chemical industries and oil products 0 0 procedures for collecting debts from sale of foreclosed properties and collaterals will sequentially entail Foodstuffs and pharmaceuticals 0 0 Energy 0 0 and include calculation of mortgage debt, submission of documents, request for issuance of enforcement Contractual services 0 0 writ, service of enforcement writ, inquiry about property registration status, official expert’s appraisal report, Telecommunication, computer and related industries 17,979,662 11,515,934 notification of official expert’s opinion, issuance of authorization prior to the notice of sale auction or bid, Financial intermediary 0 0 operating procedures for sale of foreclosed properties and liquidation of claims due to the bank. Where the Other 46,257 476,828 mortgaged real estate is not sold at the sale auction, the bank shall have to take possession of six shares (the 18,025,919 11,992,763 entire portion) or partnership in the foreclosed mortgage put up for sale pursuant to the bank’s applicable rules Obligations and on the strength of the permits or licenses issued for this purpose. Automobile and auto parts 454,975 383,064 Mining and metal industries 277,311 233,480 Petrochemical, chemical industries and oil products 1,841,642 1,550,559 Foodstuffs and pharmaceuticals 1,010,193 850,526 Energy 0 0 Contractual services 0 0 Telecommunication, computer and related industries 0 0 Financial intermediary 0 0 Other 395,315 332,833 3,979,436 3,350,462 76,475,825 59,489,006
152 Annual Report 153 57-3-9-1- Distribution of non-current loans by economic sectors 57-4- Liquidity risk
Non-current loans balance Specific provision for doubtful debts Net loans and non-current claims 57-4-1- Definition of liquidity risk 2020 2019 2020 2019 2020 2019 The liquidity risk means the possibility of impairing or endangering the bank’s ability to provide funds for Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) fulfillment of its obligations. Economic Sector Industry 6,293,434 6,594,556 1,808,099 1,898,568 4,485,335 4,695,987 57-4-2- Liquidity risk policies and processes Housing 5,053,806 4,584,891 279,280 291,605 4,774,525 4,293,286 The Saman Bank policy is typically to keep for each type of currency a cash buffer of at least 2% of the total Commerce 14,314,282 14,131,830 3,439,850 2,974,242 10,874,432 11,157,589 deposits of the same currency which is being reviewed not to slide lower than this percentage. Further in this Services 4,235,394 3,497,535 1,266,227 1,124,596 2,969,167 2,372,939 arrangement, a limit has been set for transactions with other banks and there is strict control not to violate such limit. Agriculture 136,560 163,176 8,528 8,379 128,031 154,797 Banks 0 0 0 0 0 0 57-4-3- Executive units of liquidity risk management Mining 240 240 0 0 240 240 Miscellaneous 223,921 325,447 30,769 35,363 193,152 290,085 Saman Bank has strong belief in active management of liquidity risk. To this end, this bank has developed a coherent system to manage the liquidity risk. In this system, the Board of Directors, the Senior Risk Committee, 30,257,636 29,297,675 6,832,753 6,332,753 23,424,883 22,964,922 the Sources and Applications (ALCO) Committee, the Treasury Department and the Risk Department will play the leading roles.
57-3-9-2- Balances of foreclosed assets 57-4-4- Credit risk measurement method (including bases and assumptions) In order to measure the liquidity risk, Saman Bank uses the existing financial ratios in Basel III which include 2020 2019 NSFR (Necessary Stable Funding Ratio) and LCR (Liquidity Coverage Ratio). Additionally, the liquidity gap which Rls(m) Rls(m) may exist between rial and foreign currencies shall be deployed for this purpose. Movable properties 0 0 Residential real properties 10,236,823 7,309,898 57-4-5- Mechanism for controlling and monitoring liquidity risk Business/Office properties 14,027,507 10,660,522 The responsibility for controlling and monitoring the liquidity risk in Saman Bank shall remain with the Risk Plant and Equipment 4,328,227 4,251,085 Department, Sources and Applications Committee and Treasury Department. The Sources and Applications Investments 0 0 Committee shall be responsible to the Senior Risk Committee and the Board of Directors and shall trace up the following matters: Debt securities 0 0 Land 3,667,447 3,130,507 • To review and control the financial ratios and indices and deviation from the budget with respect to the 32,260,004 25,352,012 forecast of annual operating budget; • To take decisions on the amount and optimal pattern of usage or consumption including credit lines, foreign currencies, investments, cash or cash equivalent whether in rial or in foreign currency and 57-3-10- Capital sum required for credit risk coverage interbank operations with a view to the level of impact on the bank profitability based on annual operating budget; The amount of capital required for credit risk coverage will come up to Rls. 38,563,088 million which has been calculated and presented in the table 57-3-10-1. • To take decisions on the rates of funding and allocation of rial-denominated and foreign currency sources with respect to the needs, peers’ rates, international market rates and sanctioning authority 57-3-10-1- The table for calculating the capital required for credit risk coverage of executive units to change such rates with a view to their effect on profitability based on the annual operating budget; Note 2020 2019 • To take decisions on the solutions to liquidity coverage subject to the liquidity level approved by the Rls(m) Rls(m) Senior Strategy Committee and Senior Risk Committee; Total credit risk weighted assets 57-7-2 482,038,606 365,477,022 • To determine inter-departmental interest rates; Percentage factor 8 8 • To review and approve a contingency plan so as to face liquidity crisis with a view to the level of impact 38,563,088 29,238,162 on the bank’s profitability, and where the decision-making goes beyond the scope of the commission’s authority, the relevant report shall be submitted to the Senior Strategy Commission and the Board of Directors; • To control the maturity dates of assets and liabilities, bank profitability trend, bank structure of expenses, profit sharing and non-profit sharing ratios, rate of return on assets and shares, cost of money within the defined authority and its impact on the bank profitability based on the annual approved budget; • To review and decide on the amount of investment size in the capital and commodity markets; • To review and analyze the bank investment portfolio and, in the case of any deviation from the approved budget, provide appropriate solutions towards achieving the bank’s operational goals; • To control and monitor the rate of loan facilities and return on assets of various types (loans, investments, interbank operations and…) based on the size established in the bank’s annual budget; • To control and monitor the average cost rate of bank funding sources based on the amounts set in the annual budget;
154 Annual Report 155 • To adopt proper policies so as to keep the profit margin of resources and uses appropriate to the rates 57-4-5-3- Analyzing the maturity of assets and liabilities or amounts set in the annual budget and submit proposals and proper solutions to the Senior Strategy Commission; The table below shows the maturity of the bank financial assets and liabilities based on the dates which would possibly be claimed or settled: • To determine and approve the amount of annual contingent liquidity appropriate to the annual budget and in compliance with the applicable laws and regulations and the recommendation made by the board 2020 of directors; Balance 3 months Without Less than More than before Book value 1 - 3 months to 1 - 5 years specified • To ensure the control and maintenance of liquidity level in various circumstances; 1 month 5 years deducting 1 year maturity reserves • To monitor interbank operations. Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) The Treasury Department shall be responsible for the launch and execution of interbank operations. Assets Cash in hand 91,382,999 91,382,999 0 0 0 0 0 91,382,999 57-4-5-1- Liquidity reserves Due from banks and other 8,721,345 8,721,345 0 0 0 0 0 8,721,345 credit institutions The table below shows the composition of bank liquidity reserves: Due from the government 0 0 0 0 0 0 0 0 Loans granted to and amounts 2020 2019 due from governmental 0 0 0 0 0 0 0 0 entities Rls(m) Rls(m) Loans granted to and amounts Balance with CBI 6,063,575 412,377 due from non-governmental 226,869,900 86,272,127 39,958,605 37,197,571 58,198,563 5,243,034 0 238,373,768 Cash and balance placed with other banks 80,054,738 143,810,093 entities/persons Investments in shares and Bonds issued by the government 19,938,920 0 51,248,334 22,750,908 2,171,258 5,825,922 17,435,394 0 3,064,852 51,248,334 other securities 106,057,233 144,222,470 Due from subsidiaries and 5,202,307 0 0 0 0 0 5,202,307 5,202,307 affiliates Other accounts receivable 66,547,058 66,547,058 0 0 0 0 5,773,863 66,547,058 Tangible fixed assets 5,771,863 0 0 0 0 0 4,551,267 5,771,863 57-4-5-2- Table of liquidity ratios Intangible assets 5,685,687 0 0 0 0 0 4,952,329 5,685,687 Statutory deposit 49,042,140 1,185,041 964,237 1,830,816 4,479,145 40,582,902 0 49,042,140 Beginning of Mid-year Max. during Min. during Year-end Other assets 44,119,487 9,751,923 733 9,900 32,249,004 0 2,107,927 44,119,487 the year the year the year 554,591,119 286,611,401 43,094,833 44,864,209 112,362,105 33,998,693 17,462,514 566,094,987 Percentage Percentage Percentage Percentage Percentage Liabilities Due to banks and other credit 1 36.6 33.1 40.0 24.6 19.9 (48,826,518) (44,875,708) 0 (3,950,810) 0 0 0 (48,826,518) Cash and cash equivalent to total assets institutions Cash and cash equivalent to total deposits 33.6 29.4 37.4 21.8 18.0 Customers' deposits (72,859,834) (4,344,473) (4,344,481) (8,248,926) (20,181,327) (35,740,629) 0 (72,859,834) Net cash assets to total deposits 2 31.6 27.3 35.4 19.6 15.6 Dividends payable (36,943) 0 0 0 0 0 (36,943) (36,943) Loan facilities to total deposits 41.1 42.3 48.6 39.8 52.6 Debt securities 0 0 0 0 0 0 0 0 Loan facilities to on-year term deposits and more 115.2 111.9 121 103 123 Provision for corporation tax 0 0 0 0 0 0 0 0 3 58.3 57.1 60.8 53.6 53.3 Demand deposits to total deposits Provisions and other liabilities (15,284,420) 0 0 0 0 0 (15,284,420) (15,284,420)
1. Cash and cash equivalent mean cash amounts, participation bonds and similar items with an active cash-traded market. Provisions for employees' termination and pension (1,279,163) 0 0 0 0 0 (1,279,163) (1,279,163) 2. Net cash assets mean cash and cash equivalent, investment papers/certificates with an active cash-traded market less bank deposits, issued benefits debt securities, other loans and liabilities which will mature (fall due) by next month. Investment depositors' equity (397,482,600) (7,020,757) (4,903,108) (9,309,656) (22,776,255) (353,472,825) 0 (397,482,600) 3. Demand deposits include the deposits without any contractual maturity such as current accounts, savings accounts and current interest-free accounts and … . Total liabilities (535,769,477) (56,240,937) (9,247,588) (21,509,391) (42,957,582) (389,213,454) (16,600,525) (535,769,477) Total shareholders' equity (18,821,642) (18,821,642) (18,821,642) Total cash outflow from (39,185,562) (13,714,947) (9,796,391) (5,877,834) (1,959,278) (1,959,278) (5,877,834) (39,185,562) off-balance items Total liabilities, shareholders' equity and (593,776,682) (69,955,884) (19,043,979) (27,387,225) (44,916,860) (391,172,732) (41,300,001) (593,776,682) off-line items Gap 216,655,517 24,050,854 17,476,984 67,445,244 (345,346,796) (19,467,365) Accumulated gap 216,655,517 240,706,371 258,183,355 325,628,599 (19,718,197) (39,185,562) Gap to regulatory capital ratio 1,049.8 116.5 84.7 326.8 (1,673.3) (94.3) (percentage) Accumulated gap to regulatory capital ratio 1,049.8 1,166.3 1,251.0 1,577.8 (95.5) (189.9) (percentage) Gap to regulatory capital ratio base for other contingency 1,821.7 202.2 147.0 567.1 (2,903.8) (163.7) ratios (percentage)
Accumulated gap to regulatory capital base for 1,821.7 2,024.0 2,170.9 2,738.0 (165.8) (329.5) other contingency ratios (percentage)
156 Annual Report 157 2019 57-4-5-4- Analyzing the contractual maturities of financial liabilities Balance 3 months Without Less than More than before 57-4-5-4-1- The table below shows the maturity of financial liabilities based on the maturity specified in Book value 1 - 3 months to 1 - 5 years specified 1 month 5 years deducting 1 year maturity the contract: reserves Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) 2020 Assets Less than 3 months to More than Without specified Book value 1 - 3 months 1 - 5 years Cash in hand 148,681,746 148,681,746 0 0 0 0 0 148,681,746 1 month 1 year 5 years maturity Due from banks and 9,955,293 9,955,293 0 0 0 0 0 9,955,293 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) other credit institutions Liabilities Due from the 0 0 0 0 0 0 0 0 Due to banks and other credit government (48,826,518) (36,463,709) (3,926,702) 0 0 0 (8,436,107) institutions Loans granted to and Customers' deposits (72,859,834) 0 0 0 0 0 (72,859,834) amounts due from 0 0 0 0 0 0 0 0 governmental entities Debt securities 0 0 0 0 0 0 0 Loans received from the Loans granted to and 0 0 0 0 0 0 0 amounts due from non- National Development Fund 168,673,517 72,343,203 36,201,082 28,061,149 27,356,988 4,711,095 0 177,186,032 governmental entities/ Investment depositors' equity (397,482,600) (89,380,118) (16,609,666) (108,476,362) (90,423) 0 (182,926,032) persons (519,168,952) (125,843,827) (20,536,367) (108,476,362) (90,423) 0 (264,221,973) Investments in shares 16,982,591 14,469,275 0 0 357,926 0 2,155,390 16,982,591 and other securities Due from subsidiaries 2,428,333 0 0 0 0 0 2,428,333 2,428,333 2019 and affiliates Less than 3 months to More than Without specified Other accounts Book value 1 - 3 months 1 - 5 years 52,688,844 52,688,844 0 0 0 0 0 52,688,844 1 month 1 year 5 years maturity receivable Tangible fixed assets 4,551,267 0 0 0 0 0 4,551,267 4,551,267 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Intangible assets 4,952,329 0 0 0 0 0 4,952,329 4,952,329 Liabilities Due to banks and other credit Statutory deposit 35,798,262 904,447 746,098 1,416,632 3,465,832 29,265,253 0 35,798,262 (91,897,010) (76,457,541) (8,120,984) (1,906,320) 0 0 (5,412,166) Other assets 35,936,957 8,520,161 823 12,866 25,337,912 0 2,065,195 35,936,957 institutions 480,649,140 307,562,969 36,948,003 29,490,647 56,518,658 33,976,348 16,152,514 489,161,654 Customers' deposits (65,532,014) 0 0 0 0 0 (65,532,014) Liabilities Debt securities 0 0 0 0 0 0 0 Due to banks and other Loans received from the (91,897,010) (80,891,744) 0 (11,005,266) 0 0 0 (91,897,010) 0 0 0 0 0 0 0 credit institutions National Development Fund Customers' deposits (65,532,014) (3,907,528) (3,907,538) (7,419,297) (18,151,606) (32,146,045) 0 (65,532,014) Investment depositors' equity (298,775,962) (20,644,181) (8,609,462) (124,806,633) (140,033) 0 (144,575,653) Dividends payable (51,510) 0 0 0 0 0 (51,510) (51,510) (456,204,987) (97,101,722) (16,730,446) (126,712,953) (140,033) 0 (215,519,833) Debt securities 0 0 0 0 0 0 0 0 Provision for corporation 0 0 0 0 0 0 0 0 57-4-5-4-2- The table below shows the maturity of financial liabilities in foreign currency based on the tax maturity specified in the contract: Provisions and other (8,692,291) 0 0 0 0 0 (8,692,291) (8,692,291) liabilities 2020 Provisions for Less than 3 months to More than Without specified employees' termination (946,078) 0 0 0 0 0 (946,078) (946,078) Book value 1 - 3 months 1 - 5 years and pension benefits 1 month 1 year 5 years maturity Investment depositors' Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) (298,775,962) (5,296,755) (3,685,277) (6,997,330) (17,119,105) (265,677,495) 0 (298,775,962) equity Liabilities Total liabilities (465,894,866) (90,096,028) (7,592,815) (25,421,892) (35,270,712) (297,823,540) (9,689,879) (465,894,866) Due to banks and other credit (40,390,411) (36,463,709) (3,926,702) 0 0 0 0 Total shareholders' institutions (14,754,274) (14,754,274) (14,754,274) equity Customers' deposits (11,633,971) 0 0 (11,633,971) Total cash outflow from (32,656,349) (11,429,722) (8,164,087) (4,898,452) (1,632,817) (1,632,817) (4,898,452) (32,656,349) Debt securities 0 0 0 0 0 0 0 off-balance items Loans received from the Total liabilities, 0 0 0 0 0 0 0 National Development Fund shareholders' equity and (513,305,489) (101,525,750) (15,756,903) (30,320,345) (36,903,529) (299,456,357) (29,342,605) (513,305,489) off-line items Investment depositors' equity (26,222,980) (363,263) (171) (5,983) 0 0 (25,853,562) Gap 206,037,220 21,191,100 (829,698) 19,615,129 (265,480,009) (13,190,091) (78,247,361) (36,826,972) (3,926,872) (5,983) 0 0 (37,487,533) Accumulated gap 206,037,220 227,228,320 226,398,622 246,013,751 (19,466,258) (32,656,349.2) Gap to regulatory capital 1,355.0 139.4 (5.5) 129.0 (1,745.9) (86.7) 2019 ratio (percentage) Less than 3 months to More than Without specified Book value 1 - 3 months 1 - 5 years Accumulated gap to 1 month 1 year 5 years maturity regulatory capital ratio 1,355.0 1,494.3 1,488.9 1,617.9 (128.0) (214.8) (percentage) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Gap to regulatory capital Liabilities ratio based on other 1,732.4 178.2 (7.0) 164.9 (2,232.3) (110.9) Due to banks and other credit contingency ratios (86,484,845) (76,457,541) (8,120,984) (1,906,320) 0 0 0 institutions (percentage) Accumulated gap to Customers' deposits (30,601,783) 0 0 0 0 0 (30,601,783) regulatory capital base Debt securities 0 0 0 0 0 0 0 1,732.4 1,910.6 1,903.6 2,068.6 (163.7) (274.6) for other contingency Loans received from the ratios (percentage) 0 0 0 0 0 0 0 National Development Fund Investment depositors' equity (21,213,796) (12,005,911) (2,022,571) (6,115,113) 0 0 (1,070,201) (138,300,423) (88,463,451) (10,143,555) (8,021,433) 0 0 (31,671,984)
158 Annual Report 159 57-4-6- Crisis contingency plan (liquidity stress test) • Investment Commission – for a transaction amount up to the limit of Rls. 50 billion in a day or 10% of the investee company shares (whichever is lower); In order to test the liquidity crisis in Saman Bank, it is essential to identify the factors creating liquidity crisis and make scenarios based on the assumptions which result from the existing facts. To this end, the operational • Deputy for Investment and Affiliates – for a transaction amount from 3 billion Rials up to 30 billion Rials plan for the stress test project is executed with the aim of studying and identifying the factors creating liquidity in a day and less than 5% of the investee company shares; crisis in the bank by using the previous studies, determining the major risk factors, shock and its impact on Investment Affairs Manager – for a transaction amount from 0.2 to 3 billion Rials in a day; the assets and liabilities, designing the scenario in alignment with assets and liabilities, modeling the liquidity • crisis test based on the internal influential factors, predicting the possibility for emergence of liquidity crisis and • Investment expert – for a transaction amount up to the limit of 200 million. maintaining an appropriate level of liquidity in response to cash outflows and avoiding the source funding with substantial expenses. Foreign currencies During the recent financial crisis, the liquidity risk has been the main focus of attention in that, it has revealed • The International Division and, more professionally, the foreign exchanges office are responsible for how a crisis can accelerate the process of liquidity shortage in the market among the banks and even deter decision-making on the authorized limits of transactions; other large institutions from their operations. Previous to such financial crisis, there was no liquidity crisis In certain cases at the weekly commissions held at the International Division, the board chairperson test performed by any banks for the historical evidence did not indicate any sign of liquidity risk crisis on the • and CEO will participate in decision-making process as deemed proper by the bank’s special and mega grounds of liquidity events. policies. As a general rule, in the banking industry, the inflow of sources should be consistent with the outflow of sources the failure of which may lead to three possible scenarios to bring about liquidity shortage for the bank 57-5-3- Methods of measuring the market risk as follows: The bank trading portfolio is made up of two segments: • Scenario 1: In this scenario it is assumed that the inflow and outflow of sources by depositors will take place in normal conditions. However, the collection of debts by or recovery of sources from the borrowers • Shares/stocks will happen less quickly. As such, the borrowers will have the sources at their disposal for a longer • Foreign exchange open positions period of time. In evaluating the market risk of shares, the value at-risk of total shares portfolio with a confidence level of 99% • Scenario 2: In this scenario it is assumed that outflow of sources by depositors will happen more will be calculated. quickly. As such, the inflow of new sources and return of sources by lenders will not cover the outflow of sources. Pursuant to Basel II requirements and the CBI’s evidence regarding the market risk, the historical simulation method shall be employed to calculate the necessary capital to cover the risk of shares portfolio. Notably, as • Scenario 3: In this scenario, it is assumed that outflow of sources by depositors will increase and regards the foreign exchange market risk, the Forex open position for the total portfolio as well as the degree simultaneously return of sources by borrowers will slide out of normal conditions. of positive/negative open position of each of the currencies and the amount of required capital for the Forex risk One of the most applicable ratios for testing the liquidity crisis is the LCR (Liquidity Coverage Ratio). To define coverage and value-at-risk of foreign currency portfolio, the historical simulation method will also be used. The a hypothetical scenario regarding LCR, it will be imperative to exercise hypothetical shocks to the inflow and open position of a foreign currency will include the absolute value of the following items: outflow of assets and measure their impact on this ratio and crisis borderline. A- The rial equivalent of the difference between forex assets and liabilities in any currency entered in the Under normal circumstances and considering the background, the liquidity ratios including LCR have never online accounts of balance sheet. reached the crisis borderline. Therefore, our scenario will be built on a hypothetical situation and not on B- The rial equivalent of the difference between the bank’s and customers’ obligations in any currency historical data. There are various assumptions which may influence the occurrence of crisis including the entered in the off-line accounts of balance sheet. external factors such as changes in inflation rate, foreign currency translation, housing price indexes, blocking Shetab payment system by the CBI and… Pursuant to the CBI’s directive, the authorized limit of open position for any of the currencies (positive or negative) is maximum up to 10% of the bank base capital and the authorized limit of open position for all The impact of each externally exogenous variables on the balance sheet ratios and increase in the claims ratio aggregate currencies (positive or negative) is maximum up to 30% of the bank base capital. as well as decrease in the amounts of facilities and deposits will change the LCR (Liquidity Coverage Ratio) and may ultimately approach the crisis borderline. 57-5-4- Analyzing the value-at-risk investment in shares and other market-valued 57-5- Market risk investments Considering the historical simulation method and percentage of possible changes thereupon in the market 57-5-1- Definition of market risk value, the level of value-at-risk for investment in shares and other market-priced investments have been illustrated in the table below: The market risk or the market value at risk (VaR) may be defined as the risk probability of uncertainty in trading portfolio revenues of a financial institution as a result of changes in market situation such as asset prices, 2020 2019 interest rates, market volatility and market liquidity. The market risk will probably emerge when a financial Possible change Effect on profit Possible change Effect on profit institution is actively engaged in trading assets, liabilities and derivative instruments and not when such items Type of investment are held for long-term investments, financing and hedging purposes. in market price1 and loss2 in market price and loss Percentage Rls(m) Percentage Rls(m) 57-5-2- Executive units charged with market risk management Investment in quickly marketable shares (-3.4 ,4.3) 44,849 (-2.3 ,4.5) 4,299 Saman Bank firmly believes in active management of market risk and with this view in mind, it has devised Investment in units of mutual funds (-2.1 , 2.9) 4,526 (-1.9 , 3.1) 1,982 a coherent structure to actively manage such risks. In this structure, the board of directors, Senior Risk
Committee, Resource Allocation Committee (ALCO), Investment Commission, Investment Affairs Division, 1. Possible change in market price has been calculated for a 10 - day period.
International Division and Risk Department will play leading roles. The units and departments which are tasked 2. Effect on profit and loss at market price has been calculated for a 10 - day period. with decision-making in the area of risk management are listed below:
Shares • Senior executive commission at the highest level – for a transaction amount in excess of 50 billion rials in a day or 10% of the investee company shares (whichever is lower);
160 Annual Report 161
currencies currencies Other foreign Other foreign 2,837,275 0 0 0 0 0 0 0 (4,433,185) 0 13.7 23.9 0 0 0 0 0 7,270,460 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2,454,635 0 0 0 0 0 0 (3,272,190) 0 20.8 26.5 0 0 0 0 0 0 0 5,726,826 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Chinese Yuan Chinese Yuan 2,259,467 0 (1,258,744,786) (7,927,920) 0 (6,619,400) (14,547,320) (1,273,292,106) (7,629,566) 377,080,614 10.9 19.0 7,927,920 0 6,619,400 14,547,320 1,650,372,720 9,889,033 0 (578,665,771) 0 0 0 (680,079,015) 1,635,825,400 982,310,258 0 0 676 0 0 24,142,410 0 0 0 629,372,055 0 1,123,773 (2,340,578,432) (17,927,424) 0 0 (17,927,424) (2,358,505,856) (14,752,454) 179,660,016 7.4 9.4 (1,000) 2,520,238,448 17927424 0 0 17,927,424 2,538,165,872 15,876,228 0 (2,340,577,431) 0 0 0 0 0 2,496,095,360 0 0 677 0 0 0 0 0 0 24142410.16
Indian Rupee Indian Rupee 279,664 0 (66,573,919,936) (596,555,122) 0 (9,096,058,002) (9,692,613,124) (76,266,533,061) (43,319,391) 492,365,817 1.4 2.4 596,555,122 0 9,096,058,002 9,692,613,124 76,758,898,877 43,599,055 (58,307,092,399) (2,472,414,305) 0 0 0 (5,794,413,233) 67,066,285,753 62,892,870,916 0 0 1,708,200 0 0 60,013 0 0 0 4,171,646,624 0 832,044 (137,383,204,270) (2,917,156,991) 0 0 (2,917,156,991) (140,300,361,261) (86,284,722) 1,352,917,092 5.5 7.0 0 138,736,121,362 2917156991 0 0 2,917,156,991 141,653,278,353 87,116,766 (132,884,685,646) (4,495,890,625) 0 0 0 (2,628,000) 0 138,734,353,149 0 0 1,708,200 0 0 0 0 0 0 60013.1
UAE Dirham UAE Dirham 1,207,249 (1,799,730,248) (89,013) 0 (11,334,233) (11,423,246) (1,811,153,495) (20,714,163) 105,556,465 5.8 10.2 89,013 89,013 0 11,334,233 11,423,246 1,916,709,959 21,921,412 (308,595,417) (684,534,374) 0 0 0 (806,600,458) 0 1,905,286,713 1,905,286,713 320,232,399 320,232,399 0 0 1,141,872 0 0 787,241,139 0 0 0 794,680,918 1,990,385 1,990,385 699,956 (116,531,274) (89,013) 0 0 (89,013) (116,620,287) (1,333,786) 61,201,037 4.6 5.9 177,732,311 177,732,311 89,013 0 0 89,013 177,821,325 2,033,742 (102,592,821) (6,538,765) 0 0 0 (266,363) (7,133,324) 2,576,591 2,576,591 137,028,280 0 0 1,141,872 0 0 0 0 0 0 36,985,568
Japanese Yen Japanese Yen 91,631 ) ( (6,854,349,944) 0 0 (575,482,070) (575,482,070) (7,429,832,014) (2,911,008) (233,871,085) (0.4) (0.8) 0 575,482,070 575,482,070 7,195,960,930 2,819,377 (117,646,287) (3,353,321,033) 0 0 0 (3,383,382,625) 0 0 6,620,478,860 0 0 3,793,084 0 0 0 0 0 0 3,368,351,829 3,248,333,947 0 1,591 0 0 0 0 (4,104,065,314) (1,549,203) 4,214,140 0.0 0.0 (4,104,065,314) (0) 0 0 (0) 4,108,279,454 1,550,793 (262,949,782) (3,799,334,010) 0 0 0 0 (41,781,522) 4,108,279,454 4,104,486,370 0 0 3,793,084 0 0 0 0 0 0 0 0
Swiss Franc Swiss Franc (3,810,217) (2,082,506) 0 0 (2,082,506) (5,892,723) (258,243) 5,578,398 244,468 1.2 2.1 0 0 2,082,506 11,471,120 502,710 (320,591) (18,945) 0 0 0 (3,470,680) 0 2,082,506 9,388,614 0 0 0 0 0 0 0 0 0 3,429,673 5,958,941 0 234,169 (2,082,546) 0 0 (2,082,546) (2,463,115) (103,397) 5,578,371 1.5 2.0 (380,570) 2,082,546 0 0 2,082,546 8,041,487 337,566 (320,591) (54,974) 0 0 0 0 (5,004) 5,958,941 5,958,941 0 0 0 0 0 0 0 0 0 0 0
UK Pound UK Pound (808,459) 0 0 0 0 (808,459) (41,142) 439,262 22,354 0.1 0.2 0 0 0 1,247,721 63,497 (1,493) (412,626) 0 0 0 (394,341) 0 0 1,247,721 0 0 0 0 0 0 0 0 0 394,337 814,129 39,255 16,043 0 (138,334) 0 (138,334) (716,279) (39,948) 287,655 0.1 0.1 (577,945) 0 138,334 0 138,334 1,003,934 55,991 (1,493) (222,434) 0 0 0 0 (354,018) 865,600 814,115 0 0 0 0 0 0 0 0 0 0 51,485
Euro Euro 3,603,724 ) (679,628,990) (4,327,085) (12,455,092) (140,242,488) (157,024,664) (836,653,654) (38,757,981) (77,792,202) ( (17.5) (30.3) 792,062 140,242,488 145,361,634 758,861,452 35,154,257 (123,886,284) (279,070,396) 0 0 0 (276,672,310) 0 4,327,085 0 0 10,092,516 0 0 116,931,572 0 0 0 265,810,912 613,499,817 201,658,145 19,006,673 (29,309,382) (16,235,681) 0 (45,545,063) (870,671,247) (41,494,450) 49,228,391 2,346,127 15.4 19.7 (825,126,184) 29,309,382 16,235,681 0 45,545,063 919,899,639 43,840,577 (293,061,880) (189,395,079) 0 0 0 (12,622,692) (330,046,533) 618,673,125 0 0 62,875,509 0 0 0 0 0 0 173,967,935 874,354,576 18,838,006 US Dollar US Dollar 18,405,765 ) 773,042 ) 14,139,774 ) 593,871 ) (236,671,191) 0 0 0 0 (236,671,191) (9,940,190) ( ( (3.7) (7) 0 0 0 218,265,426 9,167,148 (13,811,315) (114,444,367) 0 0 0 (108,415,509) 0 0 0 0 1,664,028 0 0 27,325,841 0 0 0 107,647,469 218,265,426 33,747,341 47,880,746 0 0 0 0 (127,239,435) (5,344,056) ( ( (3.9) (5.0) (127,239,435) 0 0 0 0 113,099,661 4,750,186 (7,811,718) (7,960,427) 0 0 0 (7,358,597) (104,108,694) 33,905,313 0 0 466,623 0 0 0 0 0 0 33,474,150 113,099,661 45,253,576 57-5-5- Analyzing the value-at-risk foreign exchange rate The position of assets and liabilities foreign currency obligations at year-end is shown in this table: The position of Bank’s foreign currency at the end year 2019-20 is shown in this table: Total liabilities in forex Bank's obligations for LCs Bank's obligations for LGs issued Other bank's liabilities Total bank's liabilities in forex Total bank's debts and liabilities in forex Rial equivalent of total bank's debts and liabilities in forex-Rls (M) Net open forex position (long/short) of each currency as at March 19, 2020 (Rial equivalent of net open forex position (long/short) each currency as at March 19, 2020 (Rls(m) Open position of each currency to regulatory capital at March 19, 2020 (percentage) Open position of each currency to regulatory capital base for other contingency ratios at March 20, 2016 (percentage) Cusomers' liabilities for LGs issued Other customers liabilities Customers' total liabilities in forex Total customers' assets and liabilities in forex Rial equivalent of total customers' assets and liabilities in forex-Rls (M) Due to banks and other credit institutions Cusomers' deposits Dividends payable Debt securities Provision for corporation tax Provisions and other liabilities Investment depositors' equity Cusomers' liabilities for LCs Due from the government Loans granted to and amounts due from governmental entities/persons Loans granted to and amounts due from non-governmental entities/persons Investment in shares and other securities Due from subsidiaries and affiliates Other accounts recievable Tangible fixed assets Intangible assets Statutory deposit Other assets Total forex assets Due from banks and other credit institutions Cash in hand Bank's obligations for LCs Bank's obligations for LGs issued Other bank's liabilities Total bank's liabilities in forex Total bank's debts and liabilities in forex Rial equivalent of total bank's debts and liabilities in forex-Rls (M) Net open forex position (long/short) of each currency as at March 20, 2019 Rial equivalent of net open forex position (long/short) each currency as at March 20, 2019 Rls. (M) Open position of each currency to regulatory capital at March 20, 2019 (percentage) Open position of each currency to regulatory capital base for other contingency ratios at March 20, 2016 (percentage) Total liabilities in forex Cusomers' liabilities for LCs Cusomers' liabilities for LGs issued Other customers liabilities Customers' total liabilities in forex Total customers' assets and liabilities in forex Rial equivalent of total customers' assets and liabilities in forex-Rls (M) Due to banks and other credit institutions Cusomers' deposits Dividends payable Debt securities Provision for corporation tax Provisions and other liabilities Investment depositors' equity Due from banks and other credit institutions Due from the government Loans granted to and amounts due from governmental entities/persons Loans granted to and amounts due from non-governmental entities/persons Investment in shares and other securities Due from subsidiaries and affiliates Other accounts recievable Tangible fixed assets Intangible assets Statutory deposit Other assets Total forex assets Cash in hand
162 Annual Report 163 57-5-5-1- A summary of the open forex position 57-5-7- Analyzing the gap between the assets and liabilities sensitive to interest rates:
2020 2019 2020 Rls(m) Rls(m) Less than 1 3 months to More than 5 Non- Open long position of all foreign currencies 6,852,235 7,710,249 Book value 1 - 3 months 1 - 5 years sensitive to month 1 year years interest rate Open short position of all foreign currencies (4,470,154) (595,781) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Open forex position 2,382,080 7,114,468 Assets Open long position of all foreign currencies to regulatory capital (percentage) 33 51 91,382,999 21,140,138 58,914,600 0 0 0 11,328,261 Open long position of all foreign currencies to regulatory capital base for other effective 58 65 Cash in hand contingency ratios (percentage) 4.3% 18.4% 0.0% 0.0% 0.0% 0.0% 0.0% Open short position of all foreign currencies to regulatory capital (percentage) (22) (4) Due from banks and other credit 8,721,345 1,640,200 0 0 0 0 7,081,145 Open short position of all foreign currencies to regulatory capital base for other effective (38) (5) institutions 3.5% 18.4% 0.0% 0.0% 0.0% 0.0% 0.0% contingency ratios (percentage) Due from the government 0 0 0 0 0 0 0
Loans granted to and amounts due 0 0 0 0 0 0 0 57-5-5-2- Analyzing the effect of foreign exchange rate risk on profit and loss from governmental entities/persons Considering the historical simulation method and percentage of possible changes thereupon in the foreign Loans granted to and amounts due 226,869,900 70,309,861 50,186,124 45,725,051 54,546,430 6,102,434 0 from non-governmental entities/ exchange rate, the level of value-at-risk for net assets and liabilities in foreign currencies has been persons 13.3% 17.2% 11.1% 12.2% 12.2% 7.2% 0.0% illustrated in the table below: Investments in shares and other 51,248,334 0 0 0 0 0 51,248,334 securities 2020 2019 Due from subsidiaries and affiliates 5,202,307 0 0 0 0 0 5,202,307 Possible change Effect on profit Possible change Effect on profit in market price 1 and loss 2 in market price and loss Other accounts receivable 66,547,058 0 0 0 0 0 66,547,058 Tangible fixed assets 5,771,863 0 0 0 0 0 5,771,863 Percentage Rls(m) Percentage Rls(m) Intangible assets 5,685,687 0 0 0 0 0 5,685,687 Type of currency Statutory deposit 49,042,140 33,336,358 2,049,331 13,384,015 11,157 0 261,279 US Dollar ( -4.02 , 4.27 ) (44,526) ( -5.68 , 5.04 ) (55,097) Other assets 44,119,487 0 0 0 0 0 44,119,487 Euro ( -6.3 , 6.23 ) (146,448) ( -6.3 , 6.51 ) 122,997 Total assets 554,591,119 126,426,557 111,150,055 59,109,066 54,557,586 6,102,434 197,245,421 UK Pound ( -6.21 , 6.23 ) 1,092 ( -4.9 , 6.34 ) 954 Liabilities and deposits UAE Dirham ( -6.3 , 6.23 ) 59,470 ( -6.3 , 6.23 ) 41,082 (48,826,518) (36,463,709) (3,926,702) 0 0 0 (8,436,107) Japanese Yen ( -6.5 , 6.23 ) (5,254) ( -6.5 , 6.23 ) 95 Due to banks and other credit institutions 0.2% 0.0% 2.2% 0.0% 0.0% 0.0% 0.0% Swiss Franc ( -6.3 , 5.95 ) 13,080 ( -6.3 , 5.95 ) 13,779 Customers' deposits (72,859,834) 0 0 0 0 0 (72,859,834) Canadian Dollar ( -6.3 , 6.56 ) (85) ( -5.32 , 6.56 ) (109) Dividends payable (36,943) 0 0 0 0 0 (36,943) Australian Dollar ( -5.74 , 6.23 ) 4 ( -5.75 , 6.23 ) 6 Debt securities 0 0 0 0 0 0 0 Turkish Lira ( -7.24 , 8.36 ) 15,020 ( -8.76 , 9.43 ) 3,287 Provision for corporate income tax 0 0 0 0 0 0 0 Indian Rupee ( -6.3 , 5.63 ) 15,346 ( -5.97 , 5.59 ) 46,978 Provisions and other liabilities (15,284,420) 0 0 0 0 0 (15,284,420) Chinese Yuan ( -6.3 , 6.04 ) 114,006 ( -6.3 , 6.04 ) 65,441 Provision for employees' termination Omani Rial ( -6.3 , 6.23 ) 11,319 ( -6.3 , 6.23 ) 12,246 (1,279,163) 0 0 0 0 0 (1,279,163) and pension benefits South Korean Won ( -6.3 , 5.98 ) 102,109 ( -5.34 , 5.98 ) 120,072 (397,482,600) (270,188,501) (16,609,666) (108,476,362) (90,423) 0 (2,117,649) 135,131 371,732 Investment depositors' equity 12.5% 10.0% 17.0% 18.3% 15.8% 0.0% 0.0%
1. Possible change in market price has been calculated for a 10 - day period. Total liabilities (535,769,477) (306,652,210) (20,536,367) (108,476,362) (90,423) 0 (100,014,115)
2. Effect on profit and loss at market price has been calculated for a 10 - day period. Total shareholders' equity (18,821,642) 0 0 0 0 0 (18,821,642)
Total liabilities and shareholders' (554,591,119) (306,652,210) (20,536,367) (108,476,362) (90,423) 0 (118,835,757) equity 57-5-6- Capital sum required for market risk coverage Gap 0 (180,225,652) 90,613,688 (49,367,296) 54,467,163 6,102,434 78,409,663
Accumulated gap 0 (180,225,652) (89,611,965) (138,979,261) (84,512,098) (78,409,663) (0) Shares risk Forex risk
Required capital Required capital Total capital Measurement method Value-at-risk Value-at-risk reserve for market reserve reserve risk coverage
Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Historical simulation model 2,800,213.605 8,400,640.814 119,571.1422 1,190,690.161 9,591,331
164 Annual Report 165 2019 57-6- Operational risk
Less than 1 3 months to More than 5 Non- Book value 1 - 3 months 1 - 5 years sensitive to 57-6-1- Definition of operational risk month 1 year years interest rate Operational risk is the risk arising from human error, inefficiency of internal processes, system failure and Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) external events. The operational risk does not include reputation risk and legal risk. Assets
148,681,746 14,552,134 129,257,960 0 0 0 4,871,653 57-6-2- Executive units of operational risk management Cash in hand 1.9% 19.6% 0.0% 0.0% 0.0% 0.0% 0.0% Saman Bank has designed and developed a coherent framework in harmony with other departments/divisions
Due from banks and other credit 9,955,293 2,559,727 0 0 0 0 7,395,567 of this bank so as to employ the scope of operational risk management in accordance with the CBI’s regulatory institutions 5.0% 19.6% 0.0% 0.0% 0.0% 0.0% 0.0% laws and in line with the best prevailing practices in banking industry and accordingly strives to ensure that operational risks are consistently and comprehensively identified, evaluated, Due from the government 0 0 0 0 0 0 0 measured and controlled. The following departments or divisions are involved in this Loans granted to and amounts due process: 0 0 0 0 0 0 0 from governmental entities/persons • Risk Department: This department acts as an executive unit for operational risk with the aim of iden- Loans granted to and amounts due 168,673,517 72,343,203 36,201,082 28,061,149 27,356,988 4,711,095 0 tifying the resources exposed to operational risk and implementing the process of operational risk from non-governmental entities/ management at the level of organizational process. More importantly, the process of operational risk persons 13.6% 18.3% 10.6% 13.1% 10.9% 9.8% 0.0% management is practiced in a unified approach which includes risk identification, risk assessment, Investments in shares and other risk indicators monitoring and further through risk mitigation plans in line with the risk appetite. As 16,982,591 0 0 0 0 0 16,982,591 securities it stands, by receiving the periodic and updated reports from other executive departments which are acting in this connection, the operational risk in the bank’s key processes is monitored, measured and Due from subsidiaries and affiliates 2,428,333 0 0 0 0 0 2,428,333 evaluated. Other accounts receivable 52,688,844 0 0 0 0 0 52,688,844 Quality Improvement Management: This department’s main functions are to design and document the Tangible fixed assets 4,551,267 0 0 0 0 0 4,551,267 • operational procedures, define and develop the kind of relationship with other organizational divisions Intangible assets 4,952,329 0 0 0 0 0 4,952,329 with respect to the operational processes, determine the monitoring indicators for evaluation and Statutory deposit 35,798,262 19,602,959 1,031,555 14,953,882 16,778 0 193,088 control as well as establishing an effective link between regulations and directives with the existing
Other assets 35,936,957 0 0 0 0 0 35,936,957 processes. This structure has been devised and developed for standardization of processes and minimization of operational events or occurrences. Total assets 480,649,140 109,058,022 166,490,596 43,015,031 27,373,767 4,711,095 130,000,629
Liabilities and deposits • Inspection Management: This department will perform periodic inspections of operational processes at branch levels in accordance with the prevailing directives, procedures and by-laws and then will file Due to banks and other credit (91,897,010) (76,457,541) (8,120,984) (1,906,320) 0 0 (5,412,166) reports on the findings of such inspections. The contents of these reports will be used as the base data institutions 3.0% 3.0% 5.4% 2.8% 0.0% 0.0% 0.0% for analyzing the operational events at branch levels. As such, the operational risk of branches will be Customers' deposits (65,532,014) 0 0 0 0 0 (65,532,014) assessed by the type of events documented by the Basel Committee with respect to the number
Dividends payable (51,510) 0 0 0 0 0 (51,510) (frequency) of events and the severity of possible losses as reported by the Risk Department. Debt securities 0 0 0 0 0 0 0 • Human Capital Management: This unit’s main function is to create and promote the proper risk Provision for corporate income tax 0 0 0 0 0 0 0 attitude/culture at the branch levels towards exercise of preventive controls from occurrence of operational risk damaging events. Provisions and other liabilities (8,692,291) 0 0 0 0 0 (8,692,291) The reports on the operational risk will be periodically reviewed by a working group or team that has been Provision for employees' termination (946,078) 0 0 0 0 0 (946,078) and pension benefits formed to remonitor risks and take decisions in respect of the operational risk management.
(298,775,962) (163,608,304) (8,609,462) (124,806,633) (140,033) 0 (1,611,530) Investment depositors' equity 57-6-3- Preventive measures from occurrence of intentional and unintentional human errors 13.3% 9.1% 13.8% 18.8% 16.7% 0.0% 0.0% In view of the fact that one of the effective factors which may result in operating losses is typically shaped Total liabilities (465,894,866) (240,065,845) (16,730,446) (126,712,953) (140,033) 0 (82,245,589) up by individuals in an organization, Saman Bank has taken a series of actions as listed below to prevent the Total shareholders' equity (14,754,274) 0 0 0 0 0 (14,754,274) occurrence of human intentional and unintentional events by its personnel:
Total liabilities and shareholders' attempt to create culture and a transparent environment in which all employees, divisions and (480,649,140) (240,065,845) (16,730,446) (126,712,953) (140,033) 0 (96,999,863) • equity departments will be aware of performing their duties and responsibilities thoroughly with regard to the
Gap 0 (131,007,823) 149,760,150 (83,697,922) 27,233,733 4,711,095 33,000,766 adverse events of operational risk; Accumulated gap 0 (131,007,823) 18,752,327 (64,945,594) (37,711,861) (33,000,766) (0) • dissemination of a proper culture with regard to operational risk so as to institutionalize the enforcement of decent ethical standards; • Planning to organize training courses to ensure that the staff members have sufficient knowledge and expertise in their career path.
57-6-4- Actions to confront a crisis To obtain assurance for maintaining the situation in times of crisis and/or returning to normal situation under a well-defined plan in the shortest possible time aimed at minimizing the implications of crisis occurrence, Saman Bank has designed a passive defense by-law.
166 Annual Report 167 57-6-5- Method of assessing operational risk 57-7- Capital management Saman Bank employs the base index approach for inclusion of operational risk in its calculations related to capital adequacy ratio as required by the Basel II guidelines. Additionally, Saman Bank is currently striving to 57-7-1- Regulatory capital create and develop the structures required for assessing the operational risk by using an advanced calculation method. To this end, the bank needs to identify and assess the operational risk in all working processes. The 2020 2019 identification and assessment tools are listed below: Rls(m) Rls(m) • Using the risk self-assessment method qualitatively through interaction with directors and operational Tier 1 capital divisions of the bank; Capital paid less funds raised out of assets revaluation reserve 7,420,323 7,420,323 • Using the findings and collected data in connection with adverse operational risk events in the bank’s Shares premium 0 0 daily operations resulting from regular inspection and auditing; Retained profit (loss) 3,949,945 983,669 • Using the risk key indicators in the important processes so as to conduct a survey of the operational risk Legal reserve 2,783,614 2,460,818 trends. Contingency fund/reserve 0 0 Other reserves 3,528,218 3,528,218 57-6-6- Mechanisms for controlling and monitoring operational risk Total tier 1 capital before regulatory adjustments 17,682,100 14,393,028 Mechanism for controlling operational risk Less: regulatory adjustments Cost price of treasury stock/shares 0 0 Upon assessment of operational risk, the bank will determine which categories of risks it may accept or control. The control of operational risk shall take place through full cooperation with respective executive Cost of bank's shares directly purchased by affiliates at IPO and/or at capital increase stage 9 9 departments. The key measures taken in this area include identification of the processes bottleneck which is Intangibal assets 553,892 550,505 deemed to be a factor for creating operational risk (individuals, systems, processes and external events) and Minimum cost price of mutual investments in shares of credit institutions and/or non-affiliated 87,925 87,925 development, review of amended and preventive by-laws related to the occurrence of operational adverse financial institutionss incidents. Cost price surplus to 10% of tier-1 capital as to investments in less than 10% in shares of other 0 0 Mechanism for monitoring operational risk credit and financial institutions Cost price surplus to 10% of shares of investee companies as to investments in more than 10% in The bank’s operational risk position will be monitored so as to review the efficiency and effectiveness of 734,012 462,324 controls as well as the effect of any new incident on the organization profile during the course of specified shares of other credit and financial institutions periods. During each period, the amount of resources exposed to operational risk, frequency and severity of Cost price of investments in the affiliates not considered as financial institutions 322,643 298,677 the effect of risk factors, key risk indicators and further the degree of efficiency and effectiveness of current Other adjustments as determined by Central Bank 0 0 controls will be reviewed and monitored. The bank’s operational risk position will be monitored so as to review the efficiency and effectiveness of controls as well as the effect of any new incident on the organization Total regulatory investments 1,698,481 1,399,440 profile during the course of specified periods. During each period, the amount of resources exposed to Tier-1 capital after regulatory adjustments 15,983,620 12,993,588 operational risk, frequency and severity of the effect of risk factors, key risk indicators and further the degree Tier 2 capital of efficiency and effectiveness of current controls will be reviewed and monitored. Debt due to issuance of debt securities by financial institutions and their uses and other liabilities 0 0 under applicable rules 57-6-7- The capital sum required for operational risk coverage General provision for doubtful debts up to 1.25% of risk-weighted assets 4,348,531 1,794,479 The capital sum required for operational risk coverage at Saman Bank will be measured and gauged by using Adjusted amounts from revaluation of fixed assets, shares and securities 305,899 418,048 the base index method. The amount of capital exposed to operational risk is listed below: Total tier-2 capital 4,654,430 2,212,528 Less: Measurement method amount of capital exposed to operational risk Surplus tier-2 capital to tier-1 capital 0 0 Rls(m) Tier-2 capital calculable in regulatory capital 4,654,430 2,212,528 Base index method 1,642,061 Regulatory capital 20,638,050 15,206,116 Regulatory capital base for other contingency ratios 11,892,889 11,892,889
The basic effective capital for calculation of contingency ratios until the approval date of financial statements is the amount of Rls. 11,892,889 million (base capital for the year 2015-2016). The bank’s new base capital shall also be endorsed by the Central Bank on the basis of the financial statements approved by the general meeting after any possible changes, modifications or deductions such as distribution of dividends among the shareholders.
168 Annual Report 169
Rls(m) 98 716,247 658,952 0 Capital required 5,642,636 2,236 704,864 0 105,840 5,248 423,514 0 0 648,145 290,610 0 12,171 599,326 333,054 0 194,267 151,579 7,164,745 253,938 30,133 9,537 0 16,521 42 332,231 Rls(m) Capital required 29,238,162 4,960,682 0 3,100,462 1,380,797 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 54,286 0 0 0 0 0 382,419 1,063,581 0 0
2019 2019
Rls(m) 1,229 8,953,091 8,236,903 0 Risk- weighted assets and liabilities 70,532,946 27,946 8,810,804 0 1,323,006 65,598 5,293,930 0 0 8,101,814 3,632,625 0 152,141 7,491,577 4,163,177 0 2,428,333 1,894,737 89,559,315 3,174,231 376,662 119,208 0 206,514 523 4,152,889 Rls(m) Risk- weighted assets and liabilities 365,477,022 62,008,519 0 38,755,778 17,259,958 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 678,570 0 0 0 0 0 4,780,234 13,294,765 0 0
, 25 that will finally be
Rls(m) 192,000 Capital required 344,380 75,259 0 8,997,441 2,236 756,729 112,875 0 749 0 107,083 0 746,102 455,038 0 66,539 713,775 425,685 416,185 245,933 10,006,071 0 1,496,327 54,116 405,573 872,293 44,474 142,556 275,941 Rls(m) Capital required 38,563,088 40,670 3,529,559 2,184,082 0 87,580 0 0 118,240 0 0 0 0 0 3,690,476 0 0 0 0 0 0 0 0 10,959 0 0 0 0 0 728,381 0 1,125,462 92,321
of April 2018
Rls(m) Risk- weighted assets and liabilities 4,304,756 940,740 0 112,468,012 27,946 9,459,110 1,410,942 0 9,360 0 1,338,536 0 9,326,270 5,687,974 0 831,742 8,922,191 5,321,063 5,202,307 3,074,161 125,075,889 0 18,704,082 676,445 5,069,658 10,903,658 555,931 1,781,956 3,449,262 2,400,000 Rls(m) Risk- weighted assets and liabilities 482,038,606 508,375 44,119,487 27,301,021 0 1,094,754 0 0 1,477,997 0 0 0 0 0 46,130,955 0 0 0 0 0 0 0 0 136,991 0 0 0 0 0 9,104,759 0 14,068,269 1,154,012
Percentage Risk factor 400 100 0 200 300 100 150 300 20 0 100 100 50 300 0 100 50 150 100 75 200 0 100 100 300 100 150 20 50 80 Percentage Risk factor 50 100 100 100 100 100 0 100 20 150 100 20 50 100 100 50 20 50 100 100 50 100 100 150 100 100 150 150 100 50 100 20 2020 2020
1
Rls(m) factors 1,076,189 Adjusted amount with collaterals and conversion 940,740 5,264,685 56,234,006 9,315 9,459,110 940,628 0 46,798 49,042,140 1,338,536 0 18,652,539 1,895,991 13,144,720 831,742 17,844,382 3,547,375 5,202,307 4,098,881 62,537,944 1,998 18,704,082 676,445 1,689,886 10,903,658 370,621 8,909,778 6,898,523 3,000,000 Rls(m) Adjusted amount with collaterals and conversion factors 44,119,487 27,301,021 0 1,094,754 0 0 1,477,997 0 0 0 0 0 46,130,955 0 0 0 0 0 0 0 0 136,991 0 0 0 0 0 9,104,759 0 14,068,269 5,770,058 1,016,749
Percentage Conversion factor 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 Percentage Conversion factor 100 100 100 100 100 100 100 100 100 0 100 100 100 20 100 100 100 50 100 100 100 20 100 100 50 100 100 50 100 50 100 100
, 25 and then multiplied by the risk factors. Amount Rls(m) 940,740 5,264,685 66,147,115 9,315 9,459,110 1,984,204 0 46,798 49,042,140 2,146,380 0 55,780,904 1,895,991 13,144,720 831,742 57,732,091 4,519,499 5,202,307 6,939,062 84,569,075 1,998 18,704,082 1,858,840 1,689,886 10,903,658 1,183,115 1,076,189 8,909,778 6,898,523 3,000,000 Amount Rls(m) 44,119,487 0 1,094,754 0 0 1,477,997 0 0 0 0 0 46,130,955 0 0 0 0 0 0 0 0 694,867 0 0 0 0 0 18,209,518 0 30,164,678 27,301,021 5,770,058 1,016,749 57-7-2- Capital allocation The total bank’s risk weighted assets for the fiscal year ended March 19, 2020 add up to Rls. 482,038,606/- million. risk-weighted by the relevant factors. The off-line items are first balanced with on-line on the basis of conversion factors and then adjusted by type o f collaterals received under article 12 directive No. 97/31434 The on-line items are first adjusted by the type of collaterals received under article 12 directive No. 97/31434 April 2018
Due form banks and other credit institutions with CAR lower than 2% Cash in hand (fuds plus the amounts transit-rial and forex) Principal and interest on non-partnership contracts-over 10 billion rials per person Cost price of non-commercial investments in other credit and financial institutions (shareholding lower than 10% less tier-1 capital) Due form banks and other credit institutions whose financial statements have not been issued or two years has passed from the due date Net non-current receivables (principal, interest and late penalty less the specific prvision)- privison than 20% of balance Cost price of non-commercial investments in other credit and financial institutions (shareholding lower than 10% higher tier-1 capital) up to 10% of tier-2 capital Due from the government (for facilities or securities purchase) Statutory deposit place with C.B.I Net non-current receivables (principal, interest and late penalty less the specific provision)- provision than 20% to 50% of non-current balance Due from governmental organizations and corporations public non-governmental institutions entities( for facilities securities purchase) Net non-current receivables (principal, interest and late penalty less the specific provision)- provision 50% over of non- current balance Cost price of non-commercial investments in other credit and financial institutions (shareholding higher than 10%) up to 10% cost of ordinary shares Due form C.B.I Non-gornmental participation bonds Principal and interest on non-partnership contracts-for residential properties Principal loan for partnership contracts (Mosharakate Madani (civil partnership), Mudarabah, Musaghat, Muzara'ah) with companies listed on the stock Exchange Amounts due from subsidiaries and affiliates (current non-facility nature) Principal and interest on non-partnership contracts-for other facilities up to 1 billion rials per person Principal loan for partnership contracts Mosharakate Madani (civil partnership), Mudarabah, Musaghat, Muzara'ah) with other natural and legal persons Participated bonds issued or guaranteed by C.B.I Other accounts receivable (current) Principal and interest on non-partnership contracts-from 1 to 5 billion rials per person Non-commercial investments in companies listed on the stock Exchange less deduction of accumulated value impairment Net fixed assets Principal and interest on non-partnership contracts-from 5 to 10 billion rials per person Non-commercial investments in other companies (excluding credit institutions and affiliated to non-financial institutions) less deduction of accumulated value impairment Due form banks and other credit institutions with CAR 8% or higher Due form banks and other credit institutions with CAR 4% to 8% Due form banks and other credit institutions with CAR 2% to 4% Other on-line items countries- unrated Amount due for loans: purchase of securities from credit financial institutions in other countries- rated BBB+ to BBB- Amount due for loans: purchase of securities from legal persons inside and outside the country (overseas local)-unrated Amount due for loans: purchase of securities from other governments, central banks and public non-governmental entities in countries- rated AAA+ to AA- Amount due for loans: purchase of securities from credit financial institutions in other countries- rated BB+ to B- Amount due for loans: purchase of securities from multilateral development banks- rated AAA+ to AA- Amount due for loans: purchase of securities from credit financial institutions in other countries-lower than B- Unconditional revocable obligations Amount due for loans: purchase of securities from other governments, central banks and public non-governmental entities in countries- rated A+ to A- Amount due for loans: purchase of securities from multilateral development banks- rated A+ to A- Amount due for loans: purchase of securities from credit financial institutions in other countries-unrated Irrevocable obligations with maturities of one and less than year cash deposit advances Amount due for loans: purchase of securities from other governments, central banks and public non-governmental entities in countries- rated BBB+ to BBB- Amount due for loans: purchase of securities from legal persons inside and outside the country (overseas local)-rated AAA+ to AA- Amount due for loans: purchase of securities from multilateral development banks- rated BBB+ to BBB- Irrevocable obligations with maturities of over one year less cash deposit and advances Amount due for loans: purchase of securities from other governments, central banks and public non-governmental entities in countries- rated BB+ to B- Amount due for loans: purchase of securities from legal persons inside and outside the country (overseas local)-rated A+ to A- Amount due for loans: purchase of securities from multilateral development banks- rated BB+ to B- Obligations for LCs issued or confirmed with good-covered credit less advances Amount due for loans: purchase of securities from other governments, central banks and public non-governmental entities in countries- rated lower than B- Amount due for loans: purchase of securities from legal persons inside and outside the country (overseas local)-rated BBB+ to BB- Obligations for LCs issued or confirmed without good-covered credit less advances Amount due for loans: purchase of securities from multilateral development banks- rated lower than B- Amount due for loans: purchase of securities from other governments, central banks and public non-governmental entities in Amount due for loans: purchase of securities from legal persons inside and outside the country (overseas local)-rated lower than BB- Obligaitons for LGs issued less cash deposit Amount due for loans: purchase of securities from multilateral development banks- unrated Obligations for trade agreements guaranteed by various Skuks including participation bonds Other obligations Amount due for loans: purchase of securities from credit financial institutions in other countries- rated AAA+ to AA- Amount due for loans: purchase of securities from credit financial institutions in other countries- rated A+ to A- . 1
170 Annual Report 171 57-7-2-1- Total market risk-weighted assets for the fiscal year ended March 19, 2020, 57-7-3- Capital adequacy ratio (CAR) for the amount of Rls. 46,909,467 million. The bank capital adequacy for the fiscal year ended March 19, 2020 is 3.76 percent.
2020 2019 2020 2019 Requuired Required Amount Risk factor Amount Risk factor Rls(m) Rls(m) capital capital Regulatory capital base for other contingency ratios 11,892,889 11,892,889 Rls(m) Percentage Rls(m) Rls(m) Percentage Rls(m) Credit risk-weighted assets 482,038,606 357,418,201 Shares 19,907,724 8 1,592,618 13,007,079 8 1,040,566 Market risk-weighted assets 46,909,467 21,020,440 Total cost price of securities-specific risk 25,432,574 5 1,271,629 385,203 5 19,260 Operational risk- weighted assets 20,525,760 15,061,252 Securities-general risk- time remained 0 0 0 0 0 0 up to one-year-maturity and less Total risk-weighted assets 549,473,833 393,499,892 Securities-general risk- time remained Tier-I capital to risk-weighed asset ratio (percentage) 2.91 3.30 2,171,258 0.2 4,343 0 0.2 0 from 1 to 3-month maturity Capital adequacy ratio (percentage) 3.76 3.86 Securities-general risk- time remained 183,662 0.4 735 0 0.4 0 from 3 to 6-month maturity Securities-general risk- time remained 5,642,260 0.7 39,496 0 0.7 0 57-7-4- Leverage ratio from 6 to 12-month maturity Securities-general risk- time remained The leverage ratio is the total shareholders’ equity to bank’s assets. The bank’s leverage ratio for the fiscal year 0 1.25 0 350,443 1.25 4,381 from 1 to 2-year maturity ended March 19, 2020 is 3.4 percent. Securities-general risk- time remained 16,900,514 1.75 295,759 34,760 1.75 608 from 2 to 3-year maturity 2020 2019 Securities-general risk- time remained Rls(m) Rls(m) 0 2.25 0 0 2.25 0 from 3 to 4-year maturity Total shareholders’ equity 18,821,642 14,754,274 Securities-general risk- time remained 0 2.75 0 0 2.75 0 Total assets 554,591,119 480,649,140 from 4 to 5-year maturity Leverage ratio (percentage) 3.4 3.1 Securities-general risk- time remained 0 3.25 0 0 3.25 0 from 5 to 7-year maturity Securities-general risk- time remained 0 3.75 0 0 3.75 0 from 7 to 10-year maturity Securities-general risk- time remained 0 4.5 0 0 4.5 0 from 10 to 15-year maturity Securities-general risk- time remained 0 5.25 0 0 5.25 0 from 15 to 20-year maturity Securities-general risk- time remained for 0 6 0 0 6 0 over 20-year maturity
Open long position of all currencies with absolute value of open short position of all 6,852,235 8 548,179 7,710,249 8 616,820 currencies whichever is higher
Total capital required for market risk 3,752,757 1,681,635 coverage
Factor (percentage) 12.5 12.5 Market risk-weighted assets 46,909,467 21,020,440
57-7-2-2- Total operational risk-weighted assets for the fiscal year ended March 19, 2020 for the amount of Rls. 20,525,760 million.
2020 2019
Capital Capital Amount Risk factor required for Amount Risk factor required for risk coverage risk coverage
Rls(m) Percentage Rls(m) Rls(m) Percentage Rls(m) Total average incomes for three recent years 10,947,072 15 1,642,061 8,032,668 15 1,204,900 Fator (percentage) 12.5 12.5 20,525,760 15,061,252
172 Annual Report 173 58- Operating sectors 58-3- Geographical concentration of major items of assets, liabilities and incomes In providing the geographical information, the major items of assets are reported on the basis of their location and 58-1- The basis for division of sectors the major items of liabilities and incomes on the basis of the bank counterparty’s domicile/residence in various The business sectors in Saman Bank include collaborative banking (by proxy), Gharzolhassaneh (interest-free) geographical regions. banking, international banking and electronic banking. 2020 58-2- Information on reportable operating sectors Iran Iraq UAE Other Total The information related to each of the reportable sectors has been provided in the following table. The profit Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) before tax for each sector is used as a standard to assess the performance of that sector. Assets Cash in hand 91,382,999 0 0 0 91,382,999
Collaborative Interest free International Other Due from banks and other credit institutions 8,721,345 0 0 0 8,721,345 E-banking Total banking (by proxy) banking banking activities Due from government 0 0 0 0 0
Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Loans granted to and amounts due from 0 0 0 0 0 Incomes earned from outside the bank governmental entities/persons
Income from loans granted and Loans granted to and amounts due from non- 34,412,427 0 223,436 0 0 34,635,863 226,869,900 0 0 0 226,869,900 placements in other banks governmental entities/persons
Interest expenses on deposits (42,495,615) 0 (447,109) 0 0 (42,942,724) Investments in shares and other securities 51,248,334 0 0 0 51,248,334 Due from subsidiaries and affiliates 5,202,307 0 0 0 5,202,307 Net income from loan interest and (8,083,188) 0 (223,673) 0 0 (8,306,861) placements in other banks Statutory deposit 49,042,140 0 0 0 49,042,140 Tangible fixed assets 5,771,863 0 0 0 5,771,863 Fee and commission incomes 1,510,569 55,023 187,867 1,247,246 0 3,000,705 Intangible assets 5,685,687 0 0 0 5,685,687 Fee and commission expenses (829,764) (3,806) (17,874) (2,248,584) 0 (3,100,028) Other accounts receivable 66,547,058 0 0 0 66,547,058 Net income from fees and commissions 680,805 51,217 169,993 (1,001,338) 0 (99,323) Other assets 44,119,487 0 0 0 44,119,487 Net profit (loss) from investments 0 0 0 0 7,674,122 7,674,122 Total assets 554,591,120 0 0 0 554,591,120 Net profit (loss) from forex exchanges/ 3,986,995 0 0 0 0 3,986,995 transactions Liabilities Due to banks and other credit istitutions (48,826,518) 0 0 0 (48,826,518) Other operating incomes 0 0 0 0 9,906,002 9,906,002 Customers' deposits (72,859,834) 0 0 0 (72,859,834) 0 0 3,986,995 0 17,580,124 21,567,119 Debt securities 0 0 0 0 0 Net incomes earned from outside the (7,402,383) 51,217 3,933,315 (1,001,338) 17,580,124 13,160,935 Investment depositors' equity (397,482,600) 0 0 0 (397,482,600) bank Dividend payable (36,943) 0 0 0 (36,943) Net incomes from interbank sectors 0 0 0 0 0 0 Provision for corporate income tax 0 0 0 0 0 Total incomes from bank's operating (7,402,383) 51,217 3,933,315 (1,001,338) 17,580,124 13,160,935 Reserves and other liabilities (15,284,420) 0 0 0 (15,284,420) sectors Provision for employees' termination and pension (1,279,163) 0 0 0 (1,279,163) Expenses for doubtful debts of benefits (2,2500,000) 0 0 0 0 (2,500,000) operating sector Total liabilities (535,769,478) 0 0 0 (535,769,478) Other direct expenses attributable to Total operating incomes 3,254,929 0 0 0 3,254,929 0 0 0 0 0 0 operating sector Net other incomes and expenses (1,102,954) 0 0 0 (1,102,954)
Profit (loss) of each sector before (9,902,383) 51,217 3,933,315 (1,001,338) 17,580,124 10,660,935 non-attributable general expenses
General expenses non-attributable to (8,508,956) sectors
Profit before tax 2,151,976
• The non-rial transactions of collaborative banking (by proxy) and Gharzolhassaneh (interest-free) banking sectors are disclosed in the international banking sector. • All non-rial transactions are disclosed in the international banking sector.
174 Annual Report 175 2019 59-3- Transactions with related parties during the year are as follows: Iran Iraq UAE Other Total Balance Balance Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Gross Commitments Amount Gross Type of Total Amount (due) (due) Name of related party Type of deal profit amount (off- paid profit Relationship amount realized March March Assets (loss) balance) (received) (loss) 19, 2020 20, 2019 Cash in hand 148,681,746 0 0 0 148,681,746 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Due from banks and other credit institutions 9,955,293 0 0 0 9,955,293 Contracts Saman JBM 144,200 0 0 0 93,400 50,801 0 0 Due from government 0 0 0 0 0 Processing (Joint Board (Pardazeshgaran) Member) and LGs issued – 2 items Loans granted to and amounts due from Co. Co-Group 0 0 0 27,783 2,778 25,004 0 0 0 0 0 0 0 governmental entities/persons 0 0 0 0 0 0 0 0 Loans granted to and amounts due from non- 168,673,517 0 0 0 168,673,517 LGs issued – 17 items 0 0 0 114,260 10,146 104,114 116,571 0 governmental entities/persons Saman Satellite 116,571 0 0 0 0 20,321 0 0 Investments in shares and other securities 16,982,591 0 0 0 18,292,591 Communication Co-Group Co. Contracts - 1 item 0 0 0 0 0 0 46 0 Due from subsidiaries and affiliates 2,428,333 0 0 0 2,428,333 Civil partnership - 5 Statutory deposit 35,798,262 0 0 0 35,798,262 118,000 0 0 0 0 118,000 134,695 3,289 items Tangible fixed assets 4,551,267 0 0 0 4,551,267 Civil partnership - 7 0 0 0 0 0 0 65,265 0 Intangible assets 4,952,329 0 0 0 4,952,329 items Civil partnership - 1 Other accounts receivable 52,688,844 0 0 0 48,560,024 Atieh Andishan 66,127 0 0 0 0 66,127 0 0 Co-Group item Sepehr Mehr Co. Other assets 35,936,957 0 0 0 38,755,778 Loans - 6 items 0 0 0 0 0 0 0 2,620 Total assets 480,649,139 0 0 0 480,649,140 LGs issued – 1 item 0 0 0 87,400 17,480 69,920 0 0 Subsidiaries Liabilities JBM Civil partnership - 1 Hafez Saman 50,000 0 0 0 0 50,000 0 3,674 Due to banks and other credit istitutions (91,897,010) 0 0 0 (91,897,010) (Joint Board item Iranian Credit Member) and Contract - debt Customers' deposits (65,532,014) 0 0 0 (65,532,014) Scoring Co. 90,626 0 0 0 30,237 60,389 0 0 Co-Group collection Debt securities 0 0 0 0 0 Loans - 72 items 0 0 0 0 0 0 501,314 0 Investment depositors' equity (298,775,962) 0 0 0 (298,775,962) LGs issued – 2 items 0 0 0 0 0 0 151,674 0 Dividend payable (51,510) 0 0 0 (51,510) Saman Brokerage Co-Group LGs issued – 6 items 0 0 0 166,846 9,185 157,661 0 0 Provision for corperate income tax 0 0 0 0 0 Muzarebeh loans - 1 169,500 0 0 0 0 169,500 0 0 Reserves and other liabilities (8,692,291) 0 0 0 (8,692,291) item
Provision for employees' termination and pension Saman Financial (946,078) 0 0 0 (946,078) and Economic Penalty for late Co-Group 1,660,852 808,628 0 0 0 2,469,480 1,920,597 0 benefits Development contract Group Total liabilities (465,894,866) 0 0 0 (465,894,866) Saman Exchange Co-Group Lease contracts 0 0 9,387 0 9,387 0 0 0 Total operating incomes 1,778,803 0 0 0 1,778,803 Net other incomes and expenses 2,564,489 0 0 0 2,564,489 Jealeh contract - 1 item 0 0 0 0 0 0 319,360 0 Tondar Noor Other LGs issued – 1 item 0 0 0 5,170 517 4,653 0 0
Contracts - 6 items 415,675 0 0 0 334,469 81,206 77,951 0
Civil partnership - 4 0 0 0 0 0 0 163,190 3,379 59- Disclosure about related parties' transactions items Affiliates Adonis Affiliates 59-1- Changes in major shareholders (over one percent) Jealeh contract - 2 items 0 0 0 0 0 0 70,000 0 Civil partnership - 6 183,433 0 0 0 0 108,529 161,381 0 During the fiscal year ended March 19, 2020, no real or legal person entered the category of shareholders over items Civil partnership - 4 one percent by purchasing shares. Further, no natural or legal person exited from the category of shareholders 0 0 0 0 0 0 1,416,667 8,586 over one percent by selling shares. items JBM Other Saman Kish Civil partnership - 1 (Joint Board 900,000 0 0 0 0 878,066 0 0 related Electronic item Member) and 59-2- Transactions with directors parties Payment Co-Group LGs issued – 8 items 0 0 0 0 0 0 1,214,408 0 This bank has no record of transactions with its directors (the directors here include the managing director/ LGs issued – 21 items 0 0 0 472,400 47,490 424,910 0 0 CEO, members of board of directors and members of the executive board.) Vice- Bahram Fathali 0 0 0 0 0 0 0 0 chairman
Farideh Board Jealeh 251 0 0 0 0 140 175 0 Geraminejad member
Board Board Hossein Ghazavi 0 0 0 0 0 0 0 0 members member
Board Ali Nemati Instalment sale 1,917 0 0 0 0 682 1,066 9 member
Ahmad Mojtahed Chairman 0 0 0 0 0 0 0 0
176 Annual Report 177 Balance Balance Gross Commitments Amount Gross Type of Total Amount (due) (due) Name of related party Type of deal profit amount (off- paid profit 60- Accumulated earnings at year-end Relationship amount realized March 19, March 20, (loss) balance) (received) (loss) 2020 2019 Allocation of the year-end accumulated earnings are subject to the approval of the shareholders’ ordinary general Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) meeting in the following circumstances:
LGs issued – 3 items 0 0 0 0 0 0 6,473 0 Aftab Other Tejarat Amount LGs issued – 3 items 0 0 0 8,769 0 8,769 0 0 Rls(m) Insurance policies 0 0 0 0 0 173,357 180,266 0
LGs issued – 14 items 0 0 0 50,902 2,482 48,420 0 0 Legal duties Saman Shareholder Insurance 215,198 Sale contract 2,160,061 1,784,519 0 0 100,000 2,060,061 0 0 Distribution of at least 10 percent of net profit earned in 2019-2020 under the provision LGs issued – 23 items 0 0 0 0 0 0 53,200 0 of article 90 of the Commercial Code Amendment Proposal by the board of directors Contracts - 3 items 0 0 0 0 0 0 24,988,095 0 The amount of dividend proposed by the board of directors 0 Penalty for late contract 556,260 0 0 0 0 556,260 0 0
Other Purchase contracts - 2,116,821 0 0 0 0 0 0 0 related real states parties Behnad Bana Other Sale contract- real states 4,700,000 3,505,000 0 0 0 28,535,887 0 0 61- Performance of Gharzolhassaneh (interest-free) transactions in rial Sale contract- real 0 0 0 0 0 0 1,002,739 0 states: 43 items 61-1- Status of balance of Gharzolhassaneh (interest-free) sources and users LGs issued – 3 items 0 0 0 0 0 0 158,754 0
Penalty for late contract 745,440 745,440 0 0 0 745,440 0 0 Note 2020 2019 LGs issued – 1 item 0 0 0 2,350 235 2,115 0 0 Rls(m) Rls(m)
Personnel Recognizing interest Other 0 0 0 0 0 1,836,267 0 0 Gharzolhassaneh (interest-free) deposits in (rial) Savings Fund of Mirdamad real estate Debtors persons - Total Gharzolhassaneh (interest-free) sources 20-2 14,566,754 8,956,859 for the sale of Mirdamad 0 0 0 0 0 7,356,472 12,424,000 0 real estate to personnel Uses of interest-free savings 14,566,754 8,956,859 Tamin Atieh Loans granted in rial and amounts due from governmental entities (before provision) Civil partnership - 3 58,420 0 0 0 0 58,420 351,652 18,240 JBM items Ordinary loans 0 0 (Joint Board Kish Cell Jealeh contract - 1 Loans under note --- to the budget 0 Member) 91,580 0 0 0 0 91,580 0 0 Pars item and Co- Loans under note --- to the budget 0 0 Group LGs issued – 5 items 0 0 0 32,928 3,957 28,971 0 0 Total loans granted to and amounts due from governmental entities/persons 0 0 Civil partnership - 12 0 0 0 0 0 0 3,544,205 0 items Loans granted in rial and amounts due from non-governmental entities/persons (before provision Factoring - 2 items 1,170,250 0 0 0 0 85,497 0 0 Persian Gulf Other Kala Tejarat Ordinary loans (1,225,199) (1,022,325) Civil Partnership - 12 4,217,283 0 0 0 0 2,762,986 0 0 items Staff loans 0 0
LGs issued – 1 item 0 0 0 3,100 310 2,790 0 0 Loans under note --- to the budget 0 0
Civil partnership - 2 Loans under note --- to the budget 0 0 930,000 0 0 0 0 977,011 0 0 items Saman Total loans granted to and amounts due from non-governmental entities/persons 11 0 0 Investment Other Investment sale 0 0 0 0 1,447,466 3,099,626 4,547,092 0 Development Total uses of interest-free sources (1,225,199) (1,022,325) Penalty for late contract 509,863 509,863 0 0 0 509,863 0 0 Statutory deposit on sources of Gharzolhassaneh (interest-free) deposits (1,343,658) (775,988) Sepehr JBM Shargh Atieh (Joint Board Liquidity reserve on interst-free deposits (5%) (728,338) (447,843) LGs issued – 1 item Subsidiaries Andishan Member) 0 0 0 16,000 3,200 12,800 0 0 Services and Co- Surplus (shortage) of sources to uses of Gharzolhassaneh (interest-free deposits) 11,269,559 6,710,703 Development Group
61-2- Net fees on Gharzolhasaneh (interest- free) transactions 59-4- Balances of accounts (receivables) of related parties with whom no transactions have been conducted during the year are as follows: Note 2020 2019 Rls(m) Rls(m) Adjustments Type of Balance (due) at Balance (due) at Name of related party Received (Paid) (expenses of doubtful Fees received from interest-free loans relationship March 19, 2020 March 20, 2019 55,023 51,887 debts and …) Prizes on interest-free deposits (3,806) (1,044) Rls(m) Rls(m) Rls(m) Rls(m) 37-1 51,217 50,843 Atieh Andishan Sepehr Mehr Co. Subsidiary 0 0 9,304 9,304 Atieh Andishan Sepehr Shargh Subsidiary (18,638) 0 302,711 284,073 Service Development Co. Saman Financial & Economic Subsidiary 18 0 1,860,845 1,860,863 Development Group
178 Annual Report 179 61-3- Classification of Gharzolhassaneh (interest- free) loans by a breakdown of the lending purposes
2020 2019 Rls(m) Rls(m) Marriage 936,311 871,486 Relief (Emdad) Committee pensioners 160,848 116,662 Ordinary people 128,040 34,178 Staff members 0 0 1,225,199 1,022,325
61-4- Classification of Gharzolhassaneh (interest- free) loans by a breakdown of the type of customer:
2020 2019 Rls(m) Rls(m) Natural persons 1,225,199 1,022,325 Legal persons - Cooperative society 0 0 Legal persons - Other 0 0 1,225,199 1,022,325
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