In the Name of GOD SINA BANK Annual Report 2015 - 2016 Table of Contents Financial Highlights 4 Message of the Board of Directors 5 Introducing the Board of Directors 6 Introducing the Executive Board 7 Organisational Chart 8 CHAPTER I - Introduction 9 Background 10 Objectives 10 Vision 10 Mission Statement 10 Strategies 11 Regulatory Environment 12 Specialist Committees & Workgroups 12 Our Capital 13 Prizes, Distinctions & Accomplishments 16 Sina Bank Listed in the Stock Exchange 19 Composition of Shareholders 20 Our Future Plans 20 CHAPTER II - Performance 21 Operational Performance 22 Human Resources 22 Branch Network 22 International Banking & Foreign Exchange Services 23 Anti-Money Laundering Department 24 Information Technology 27 Risk Management 29 Regulation Compliance Department 32 Financial Performance 34 Main Financial Items 34 Balance of Deposits 35 Islamic Banking Principles 36 Balance of Loans 38 Revenues 39 Interest Paid to Depositors 40 Ratios 41 Capital Adequacy Ratio 42 Our Investments 42 CHAPTER III - Independent Auditor’s Reports & Financial 43 Statements Sina Bank Financial Highlights Total Revenues Total Assets 35,000,000 180,000,000 30,000,000 160,000,000 140,000,000 25,000,000 120,000,000 20,000,000 100,000,000 15,000,000 80,000,000 million IRR million IRR 60,000,000 10,000,000 40,000,000 5,000,000 20,000,000 0 0 2014-15 2015-16 2014-15 2015-16 Balance of Loans Total Shareholders’ Equity (IRR & Foreign Currency) 140,000,000 16,000,000 120,000,000 14,000,000 12,000,000 100,000,000 10,000,000 80,000,000 8,000,000 60,000,000 million IRR million IRR 6,000,000 40,000,000 4,000,000 20,000,000 2,000,000 0 0 2014-15 2015-16 2014-15 2015-16 Balance of Deposits Registered Capital (IRR & Foreign Currency) 160,000,000 12,000,000 140,000,000 10,000,000 120,000,000 8,000,000 100,000,000 80,000,000 6,000,000 million IRR million IRR 60,000,000 4,000,000 40,000,000 2,000,000 20,000,000 0 0 2014-15 2015-16 2014-15 2015-16 The rate of exchange was $1/IRR 30,240 at the end of the reported period. The Bank’s fiscal year ends on March 19th. Annual Report 2015 - 2016 Message of the Board of Directors With over 31 years of invaluable experience Since the lifting of sanction against Iran’s and thanks to its profound knowledge of the Financial sector, Sina Bank has made several Iranian financial market, the ability to make measures to boost its international operations, sound policies Sina Bank has demonstrated a including being linked to SWIFT and installing high degree of success in penetrating the a wide scale infrastructure, required for market and achieving sustained growth. carrying our international operations; expanding regional and European relations, During the reporting financial period, Sina human resource training etc. As a result, Sina Bank also demonstrated a remarkable Bank now offers a wide range of foreign financial and operational performance. Total currency and Forex services. In expanding revenues increased from IRR 27,189 billion our European relations, we have been reaching IRR 30,813 billion, whilst operating successful in obtaining a license to open a profits enjoyed a rise from IRR 5,848 billion in branch in Munich – Germany through contract 2014-15, to reach IRR 6,210 billion in the agreement with the internationally reputable following year. Total assets also grew from auditing firm such as KPMG, which is IRR 148,998 billion to IRR 169,134 billion. On expected to be inaugurated by 2017. We also the operational side, we successfully intend to open a branch in Muscat –Oman in increased deposits from IRR 130,085 billion the near future. in 2014-15 to IRR 149,745 billion in the following year. We also have boosted our Referring to fulfilling our corporate social lending from IRR 115,885 billion in 2014-15 to responsibilities, we have focused on granting IRR 136,246 billion during the year under special loans to the needy people and on review. financing job creating projects in Iran’s less developed regions. As a result of our performance we have been able to distribute EPS according to forecasts To conclude, I am confident that we shall and to achieve high returns for our continue to demonstrate strong performance shareholders hence, earning their trust and in the future and as a result, we shall further satisfaction of our shareholders. And thanks increase our market share by relying on the to our highly experienced and dedicated loyalty of our clients, the trust of our personnel, we continue to offer our clients a shareholders and the support of our expert wide of high quality banking products and and dedicated colleagues. services, achieving customer loyalty. Other accomplishments during the reporting Board of Directors financial period include: being recognised as Iran s top bank in anti-money laundering measures; being granted a bonus from the Central Bank of the Islamic Republic of Iran (CBI) for being the most law-abiding Iranian bank, enabling us to reduce our statutory deposit held at CBI from 13% to 11% obtaining top ranking in terms of e-banking security, achieving more than required capital adequacy ratio as well as ranking fifth among top commercial Islamic banks in terms of asset returns. Sina Bank Introducing the Board of Directors Dr. Mohammad Mokhber Chairman Mohammad Reza Pishrow Vice-Chairman & Managing Director Dr. Seyed Mohammad Badr Tale’ Board Member Dr. Hamid Reza Fartouk Zadeh Board Member Annual Report 2015 - 2016 Introducing the Executive Board Mohammad Reza Pishrow Managing Director Ghorban Daniali Vice Managing Director Mohammad Reza Saroukhani Investment & International Affairs Deputy Gholam Abbas Nematollahi Credit & Loan Supervision Deputy Ali Dehghan Menshadi Branches & Human Resource Deputy Masoud Pashmchi Information Technology & Communication Network Deputy Sina Bank Organisational Chart Board of Directors Supreme Audit Supreme Risk Committee Committee Compliance Committee Managing Director Vice Managing Director Internal Audit Regulations Complianc Department Inspection Risk Department Legal Managing Director’s Management Office Security Public Relations Advisors Anti-Money Laundering Department Planning, Credit & Information Investment & Branches & Human Technology & Network Financial & Support International Affairs Resources Deputy Supervision Deputy Communications Deputy Deputy Deputy Investment & Branches & Information Budget & General Marketing Credit Technology Assemblies Affairs Accounting Network & Foreign Human Supervision & Branches Operations Operations Resources & Collection of Accounting & Training Loans Support Treasury Projects, Systems Planning & Development Support Research Security CHAPTER I Introduction Sina Bank Background Objectives Sina Bank was established in 1985. From its Maximise profitability. humble beginnings, Sina Bank has greatly Increase market share. expanded the network of its clients, branches Focus on customer requirements and to and well trained personnel and has achieve customer satisfaction. successfuly penetrated Iran’s ever growing Optimise human resource productivity. competitive market. This display of vast Further elevate our position in the expansion reflects the considerable success international arena. Sina Bank has already earned. The Boost our competitiveness via enhancing consequences of such an outstanding past, our current position in electronic banking. result in both potential for the future and the inevitable growth Sina Bank will gain. Vision Become an advanced, innovative, effective and customer oriented bank. Take advantage of the latest technologies, human resources capable of innovating new banking products and services. Become a pioneering bank in terms of offering banking services with an object e of creating additional wealth for beneficiaries. Become a more credible bank within the Middle East and Western Asia. Mission Statement Our mission is to offer a wide variety of high quality banking products and services which comply with global standards (having taken advantage of the latest technologies). Our mission is also to maximise profitability for our shareholders, to pay a special attention towards our human resources and teamwork and finally, to make a positive contribution to Iran’s economic growth and development. Annual Report 2015 - 2016 Strategies To offer a competitive and different basket of products and services. To further expand the scope of international banking operations. To further develop our human resources. To enhance our credit rating and collections system. To further develop our electronic banking and boost its security. To boost the potentials of services. To further develop corporate and exclusive banking services. Sina Bank Regulatory Environment Sina Bank complies with the following rules and regulations: The Banking & Monetary Act of 1972 and its amendments The Usury-Free Banking Operations Act of 1983-84 Ratifications of the Monetary & Credit Council of the Central Bank of the Islamic Republic of Iran (CBI) Credit, Monetary & Regulatory Policies of CBI Circulars of the Central Bank of the CBI on departments’ regulations, licences and regulating the banks The Easing of Granting Financial Loans Act Cheque Law Tax Laws Commercial Code Regulations of the Securities & Exchange Organisation Registration & Municipality Laws Articles of Association of Sina Bank Other laws and regulations (including penal and civil codes) Specialist Committees & Workgroups The main committees and workgroups of Sina Bank are stated below: Transactions Committee Credit Committees (Branches, Regional,