Annual Report 2018/19 Annual Report 2018 / 19
Saman Bank in 2018/19
4 Statement of the Board and the CEO
7 Key Figures
8 About Saman Bank
10 Corporate Governance
15 Professional Backgrounds of the Senior Executives
16 Independent Auditors and legal Inspector
17 Saman Financial Group
20 The Bank’s Legal Environment
21 Saman Versus Tehran Stock Exchange Saman Bank
22 An Overview of Saman’s Operational and Financial Performance in 2018/19
27 Saman Bank’s Resources and Advances Analyses
30 Major Achievements of the Bank in Different Areas
45 Human Capital
50 Chart of Organization
51 Major Accolades and Achievements of Saman Bank 2018/19
52 Plans and Projects for 2019/20
53 Financial Report
54 Independent Auditors and Legal Inspectors Reports
58 Group Consolidated Financial Statements
64 Saman Bank (PJSC) Financial Statements
71 Explanatory Notes
2 Annual Report 3 Amidst the diverse challenges posed by sanctions with regard to maintaining and developing correspondent banking relations, Saman’s international banking efforts yielded more favourable results in 2018/19 than in the previous year, translating to 47percent growth in the volume of our international operations. Furthermore, the cost price of money in Saman reduced from 15.3percent to 13.4percent and revenue from lending increased from the effective rate of 15.5percent to 17.4percent. Alongside these achievements, we enhanced operational efficiency in cost management and profitability. In order to advance the policies under the Saman 2021 Strategic Plan, we sought to prepare technical and procedural infrastructure and to enable our staff members to improve the quality and quantity of their services. The new performance-assessment model introduced in 2018/19 has considerably improved the performance of our staff and the operational procedures of the bank. Investments Another major achievement in 2018/19 concerned Saman’s investments. Saman Electronic Payment Company (SEP) was admitted to the Tehran Stock Exchange and was well-received in the market. Thus, Saman registered a good added value as the outcome of 15 years of investment in this company. We closely monitor the megatrends in digital, banking, and payment industries and have adopted two approaches: First, we sponsor start-ups in fintech, investing in Tap30 and Mobillet and continuing to invest in Samantel. Second, we launched investments in four start-ups active in blockchain, fintech, commercial intelligence, and payment services through SEP. We expect our investments in SEP—which all align with current and future trends in the banking industry—will bring about considerable added value for the bank and for Saman Group in the near future. Research-based Planning All of our plans and initiatives are based on research efforts and studies that seek to reduce our operational and decision-making risks in the future. In addition to its training and education mission, two years ago Saman Statement of the Board and the CEO Academy of Banking began macroeconomic research and analysis, which form the basis of our economic forecasting based on trends in international, national currency, and credit sectors. For example, macroeconomic reports of Saman Academy helped us adopt proper decisions in our international policies and earn a substantial income from foreign exchange operations by accurately forecasting exchange rates.
By the end of the financial year 2018/19, Saman celebrated its 20th year of proud business in the Iranian economy. Capital Increase These 20 years were filled with invaluable experiences and countless achievements and innovations toward Higher exchange rates meant a considerable number of our customers active in production and business sectors facilitating a new style of banking in our beloved Iran. faced huge difficulties in securing cash reserve and revolving cash. If the bank failed to support them in this As the first privately owned financial-credit institute in the Country, Saman has introduced diverse concepts in difficult time, they would likely leave the bank or enter into stagnation. In order to adapt to these new conditions banking and economy since its inception. By introducing advanced technologies and electronic payment facilities, and accommodate our customer’s needs, we started a capital increase journey. During 2018/19, we adopted Saman successfully added smart solutions to people’s businesses and their banking experience. policies to pave the way for capital increase in 2019/20. The Board intends to accomplish this capital increase before the end of financial year 2019/20. Our first and second strategic plans—based on the three principles of Convenience, Speed, and Trust enabled us to revolutionise our procedures and servicing standards, thereby enhancing customer loyalty. These policies Supporting Production brought us close to our important goal of ‘becoming the first-choice bank for customers’, and we were chosen as the most ‘beloved bank in Iran’ by a public vote of more than 60 thousand participants in 2018/19 as in the previous We adopted our support programs to encourage production under two strategic approaches. First, we increased year. our lending to the production sector by 40 percent compared with the previous year. We intend to increase lending capability by increasing the bank’s capital while boosting the velocity of money through lending to the production 2018/19, A Turning Point for Saman and consumption chains in food and pharmaceutical industries, which are the two focal industries of Saman’s business banking. The financial year 2018/19 is considered a turning point in the 20-year history of Saman Bank. As a result of the positive changes in the Iranian economic environment that started in 2017/18, and in view of the new approach of On the other hand, by designing new credit products, for the staff members of these producing companies, we are the Central Bank of Iran, we turned the challenges caused by the re-imposition of sanctions and the US withdrawal taking serious steps towards the preserving and incising their motivations and we hope these entities with less of the JCPOA into opportunities for growth. This was made possible because of the existing infrastructures and worries in their human recourses affairs, they would have more concentrations on production. capabilities. First Choice in International Banking In another important turning point during this year, we made the first phase of our new strategic plan, named Saman 2021, operational and have already experienced its positive outcomes. Under our strategy of becoming the first-choice partner for international banks, we continue to strengthen our international presence and expand our correspondent banking relations through full compliance with international Profitability in International Banking and Retail Banking standards. In spite of the re-imposition of sanctions, we preserved our representative office in Italy, which improved our extensive and constructive interactions with the Italian central bank. We continue to follow-up our One of our main programs in Saman 2021 has been to continue the optimisation and simplification of internal application for opening our branch in Germany, and we hope to open this branch in the near future. methods and procedures to enhance operational efficiency. By relying on past experiences and regular customer surveys and by employing experienced international advisors, we advantageously increased service and product sales and reduced operational and executive costs, as reflected in the 2018/19 financial statements showing increased joint revenues (from lending) of 31percent and reduced costs in spite of inflation rates exceeding 27percent.
4 Annual Report 5 Risk Management One of the dynamic and active pillars of Saman is the risk committee and risk management unit, which is responsible for managing, controlling, and reducing the three major risks in the bank. These are as follows: • Credit risk: New infrastructures created in 2019/20 to ensure credit rating of all loan applicants, whether in retail or corporate banking. Our credit-rating system has been implemented with the help of a German company, Scope Group. This system will be used in Iran, as well as in our branch in Germany. Consequently, Saman’s NPLs ratio continues to decrease, even in the current economic climate in Iran. • Liquidity risk: We have controlled liquidity to an effective—but not excessively low—level and reduced the cost price of resources from 15.3 percent to 13.4 percent. Our Asset and Liability Committee has gained invaluable experiences in this area during its 8 years of activity. Fortunately, Saman’s account with the Central Bank has never been in debit, and Saman plays an active role in the interbank market as net lander. • Market risk: Currency exchange rate risk serves as the main component of this section. We strive to abide by CBI regulations and maintain a limited and controlled open position. Anti-Money-Laundering and Compliance of Highest International Standards Saman takes great pride in adhering faithfully to standards of international banking relations; therefore, anti-money-laundering and compliance are major priorities for us. In addition to maintaining full compliance with all national rules and regulations, Saman has benefited the advice of a competent international consultant to review and optimise operational methods for the past 18 months and has obtained an international certificate for the improvement of operational methods and procedures. Saman is successfully implementing the highest international standards in all staff and line units, creating a competitive advantage in international correspondent banking. Key Figures One Saman, One Team The achievements of the Board encapsulated in the Saman 2021 Strategic Plan and those of the bank during 2018/19, would have been impossible without the full cooperation and diligence of our staff. The Board of Directors is grateful to all our colleagues for their wonderful commitment to the bank and to our shareholders whose active (Adjusted) involvement, trust, and support helped make our 21st year a turning point in the history of Saman. 2018/19 2017/18 2016/17 Consolidated Bank Consolidated Bank Consolidated Bank Key performance indicators IRR billion during the year Board of Directors Net revenue from lending and (10,171) (10,209) (14,183) (14,243) (7,667) (7,694) deposits Net revenue from fees and (39) (94) (248) (311) (318) (514) charges Total operating revenues 2,553 1,779 (2,492) (2,766) (3,149) (1,789) Net profit(loss) 5,318 5,143 122 318 (1,866) 85 Key items in balance sheet IRR billion Loans & Non -Performing claims 169,078 169,474 136,641 137,137 127,532 127,750 Total assets 484,427 481,449 308,386 309,418 257,639 258,035 Total deposits 66,203 65,532 26,455 26,399 17,071 17,063 Total debts 173,593 167,119 46,690 44,625 34,447 31,977 Investors' equity 297,043 298,776 253,176 254,382 213,714 214,853 Paid up capital 8,000 8,000 8,000 8,000 8,000 8,000 Shareholders' equity 13,791 15,554 8,520 10,411 9,478 11,205 Return Rate Percentage Return on Asset 1.34 1.30 0.04 0.11 (0.72) 0.03 Return on Equity 47.67 39.62 1.35 2.95 (18.97) 0.81 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 660 643 11 40 (239) 11 Diluted earnings per shar IRR 660 643 11 40 (239) 11 Other information Personnel 3267 2491 3215 2419 3379 2406 Number of branches - 136 - 136 - 137
6 Annual Report 7 Changes in capital (IRR billion)
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 list of Saman shareholders at the end of the financial year 2018/19 is presented in the following table:
Shareholder 20/3/2019 Number of Shares Percentage About Saman Bank Steel Industries Pension Fund 400,088,117 5.00 Mines and Metals Development Investment Company 323,686,501 4.05 Mohammad Zarrabieh 305,266,280 3.82 Havva Chayi Dehkhuyi 214,211,112 2.68 Nutrica Techvest Company 364,030,308 4.55 Saman began its official activity on 2 September 1999 as the first credit institution in post-revolutionary Iran under Saman Investment Development Company 719,999,995 9.00 the name Saman Eghtesad. Saman Eghtesad was registered with the Corporate and Non-commercial Entities Vali Zarrabieh 196,660,057 2.46 Registrar under number 154444, with an initial capital of IRR 11 billion. Seyed Mehdi Ghafouri 181,316,669 2.27 Ahmadreza Zarrabieh 123,349,619 1.54 In September 2002, Saman Eghtesad had accumulated sufficient capital to obtain a banking license from the Pumpiran Holding 147,330,232 1.84 Central Bank of the Islamic Republic of Iran. This opportunity allowed the institution to enter a new phase of life as Iran va Gharb Company (Private Joint-Stock) 88,975,787 1.11 a privately-owned bank. Others (less than %1) Other corporate shareholders (63 shareholders) 1,063,932,852 13.30 Scope of Activities Other individual shareholders (1.923 shareholder) 3,871,152,471 48.39 The bank’s scope of activities is detailed in Article 3 of the Memorandum of Association. A summary of these 8,000,000,000 100 activities is as follows: • Opening and maintaining different types of bank accounts, including current and savings accounts; Individual and corporate share ratio: • Accepting term deposits and issuing deposit certificates; • Providing loan and finance products within the framework of rules and regulations and the standards of 20/3/2019 20/3/2018 non-usurious banking laws; Number of Number of Number of Number of Percentage Percentage • Operating in currency markets domestically and internationally; Shareholders Shares Shareholders Shares Individual 8280 4,891,956,208 61 4246 4,791,009,505 60 Administering all types of credit instruments; • Corporate 71 3,108,043,792 39 71 3,208,990,495 40 • Issuing L/C and different types of checks; 8351 8,000,000,000 100 4317 8,000,000,000 100 • Issuing and trading bonds; • Offering partnership and investment opportunities; • Offering different payment tools and electronic banking services; Engaging in other banking and business activities allowed under relevant rules and regulations. Corporate Individual 39% 61% Capital At the time of registration, the bank’s capital was IRR 200 billion (divided into 200 million shares, each of IRR 1,000 nominal value). This has subsequently increased, as follows:
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 Ali Ne’mati, Member of Economic Affairs and Finance, Dr. Mojtahed joined Saman in March 2010 as Vice President of Planning and Development as well as Chairman of the Mr. Ne’mati has worked with Saman since 22 August 2012 in different Board of the Iranian Credit Bureau and Credit Scoring Company. He was positions, including Advisor to the CEO, Member of the Audit Committee, elected Chairman of Saman Bank’s Board of Directors in September 2012, and Member of Wholesale Credit Committee. He has a record of serving as the Vice Chairman since March 2014, and is currently serving as membership in several committees and assemblies of Post Bank Iran. Mr. the Chairman. With a PhD in Economics from Iowa State University, USA, Ne’mati holds a master’s degree in State Management from the Institute Dr. Mojtahed also maintains a successful academic career as a researcher for Management and Planning Studies. and professor at Allameh Tabatabaei University.
Bahram Fathali, Vice Chairman Vali Zarrabieh, First Alternate Member A former VP Investment, board member, and advisor of Keshavarzi Bank, Mr. Zarrabieh, a board member of Saman Electronic Payment Company Mr. Fathali served as board member in Parsian and Eghtesad Novin banks and Saman Brokerage Company, served as the first Deputy CEO of Saman before joining Saman on 12 January 2019. He serves as a member of the Bank and was appointed CEO in June 2010. In 2013, he was elected Risk Committee, member of the Human Resources Committee, and Head Chairman of the Board and currently serves as the First Alternate Member of the Audit Committee in Saman. Mr. Fathali holds a master’s degree in of the Board. Mr. Zarrabieh holds a master’s degree in finance from the Accounting from the UK. CASS Business School of London, specializing in corporate finance and valuation, as well as an MBA from Manchester Business School, UK, specializing in strategy.
Farideh Geraminejad, Member Reza Isfandyari, Second Alternate Member Before joining the board, Ms. Geraminejad served as Saman’s International Mr. Isfandyari joined Saman on 11 May 2012 and has served as Executive Banking Director. She worked at Tejarat Bank from 1977 to 2009 where VP Legal, Advisor to the CEO, Member of Compliance and Financial Crimes her latest position was the Head of Treasury and Correspondent Relations. Committee, and Member of Compliance Committee for Saman Financial Ms. Geraminejad holds a bachelor’s degree in General Linguistics from the Group. He holds a master’s degree in private law. University of Tehran.
Hossein Ghazavi, Member Mr. Ghazavi has served as a Member of the board at the Export Development Bank of Iran and a Member of the Executive Board of the Central Bank of the Islamic Republic of Iran. He joined Saman as a member of the Risk Committee on 12 January 2019. Mr. Ghazavi holds a PhD in Strategic Defence Science from Supreme National Defence University.
10 Annual Report 11 Board Meetings During the financial year 2018/19, the Board met 64 times (minimum one meeting per week) and resolved the major issues within the bank.
Executive Compensation The Board of Directors approves the CEO’s salary, benefits, and bonuses. The Annual General Meeting approves bonuses for the Board of Directors in compliance with the provisions of the Commercial Code. The Board decided at the reported year’s AGM not to take any bonus. 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 Objectives of the Committee: To ensure the bank’s progress 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: Chairman of the Board, Vice Chairman of the Board, one member of the Board, two advisors to the Board 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: Three members of the Board (Chairman, Vice Chairman, and one member), Risk Senior 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 Resources Committee Members of the Committee: Vice Chairman of the Board, two members of the Board, CEO or 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
Information Technology and Security Committee Members of the Committee: One representative of the Board, VP Development and Infrastructure, and CEO of Saman Processing 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 effect of crises and cyber threats on the bank’s infrastructure. Secretary of the Committee: Development and Quality Director
12 Annual Report 13 Senior Executive Team
Alireza Marefat: Deputy CEO Mr. Alireza Marefat was appointed Deputy CEO in February 2018. His former positions at Saman include VP Loans & Advances, Deputy Director and Director of Corporate Banking, Head of High-Net-Worth Clients Credit Scoring, Deputy Director of SME Credits Support, and Deputy Branch Manager.
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.
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.
Ehsan Torkaman: VP Finance and Planning Mr. Ehsan Torkaman was appointed VP Finance and Planning in November 2019. He worked formerly as Financial Director of Saman and Financial Deputy Director/Financial Director of Saman Electronic Payment Company.
Hasan Dehghanizadeh: VP International Compliance Committee of Saman Financial Group Mr. Dehghanizadeh was appointed VP International in December 2018. He has worked in numerous managerial Members of the Committee:CEO, Deputy CEO, VP Legal, VP Financial and Planning, VP Banking and positions at Saman, including Director of International Banking, Deputy Director of Treasury Services, and Head Marketing, VP Control, VP Compliance and AML, Risk Unit Director, Corporate Banking Director, SME Credit of Currency Exchange Department. He is also responsible for supervising the International Banking Division. Director, Legal Director Objectives of the Committee:To support strategic goals of Saman Financial Group by advising and leading Khodarahm Ghasemian Yadegari: VP Supervision financial crime control and prevention initiatives, to supervise risks affiliated with identified non-compliance Mr. Ghasemian Yadegari was appointed VP Supervision in August 2018. cases in anti-money-laundering, terrorism financing, sanctions, fraud, bribery, and corruption Secretary of the Committee: Appointed by the Head of the Committee
Compliance and Financial Crime Committee Members of the Committee: CEO, Deputy CEO, VP Legal, VP Supervision, Compliance and AML Director or Deputy Director, Retail Banking Director, Corporate Banking Director, Premium and Private Banking Director, SME Credit Director, Legal Director, and Risk Unit 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: Appointed by the Head of the Committee
14 Annual Report 15 Division Heads Saman Financial Group
Full Name Position Highest Academic Qualification Year Joined Saman Bank Percentage of Bank's Net Profit (Loss) Net Profit (Loss) Capital Ownership (direct or in 2018/19 in 2017/18 BankingDean of Saman indirect) Davoud Souri PhD 2014 Academy IRR billion Percentage IRR billion IRR billion
Hamid Tahamtan Legal Executive Master's degree 2013 Saman Exchange Co. 219 96.46 260 293
Siamak Shahbazzadeh Khiavi Compliance and AML Executive Master's degree 2003 Hafez Saman Iranian Credit 24 94.00 11 19 Scoring Co. Abbas Mirza Nayyeri Electronic Banking Executive Bachelor's degree 2007
Marketing and Product Saman processing Co. 250 100 17 31 Seyed Morteza Hosseininejad Executive Master's degree 2003 Development
Microcredit and Reza Shirin Goharian Executive Master's degree 2001 SME Lending Saman Brokerage Co. 50 75 75 8
Public Relations and Farnood Hassani Executive Master's degree 2007 Customer Care Tondar Noor Co. 2.7 74 64 0.2
Marzieh Azizi Quality and Development Executive Bachelor's degree 2003
Saman Financial & Economic 0.0 100 33 1.5 Fereshteh Zarrabieh Human Resources Director Director Master's degree 2003 Development Group Co.
Mohammad Hassan Dowlati Logistics Executive Master's degree 2003 Atieh Andishan Sepeher Mehr Co. 23 100 1 3
Hamidreza Alavizadeh Nouri IT Executive Master's degree 2013 Atieh Andishan Sepeher Shargh 20 98 186 5 Service Development Co.
Mohammad Farrokhipour Retail Banking Executive Bachelor's degree 2002
Adonis Co. 400 20.32 28 23 Morovat Ranjbar Corporate Banking Executive Bachelor's degree 2004
Ghassem Sarkhosh Supervision and Accounting Executive Master's degree 1999 Kish Cell Pars Co. 1200 32 (257) (77)
Independent Audit
The General Assembly of Saman Bank always appoints the reputable, respected chartered accountants approved by the Central Bank of Iran as independent auditors. The top management are fully aware of the crucial role these independent auditors 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 access of these auditors to the documents and information they need, in order to reflect a true and reasonable operation of the bank on the financial statements. In 2017/18, Saman Bank’s shareholders selected the chartered accountancy practice Azmoon Pardaz Iran Mashhood as its independent auditor. Azmoon Pardaz Iran Mashhood is one of the leading professional auditing firms specialising in banking and insurance and is trusted by the Tehran Stock Exchange and the Central Bank of Islamic Republic of Iran. The practice provides professional auditing and advisory services in insurance, 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 international operations among privately owned banks; • To maintain the bank’s position as a first-choice employer for the most talented banking professionals. Our Mission and Values 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 Trust. To these ends, we introduced and continue to uphold the following core values: • 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 contact point with customers; • To offer prompt 24/7 services through electronic channels; • To enhance our performance management system; • To reduce resource costs; • To grow current accounts by 30percent per annum; • To grow commissions and fees by 50percent per annum; • 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 The Bank’s Legal Environment • By-laws and guidelines circulated by the Securities and Exchange Organisation; The following laws and regulations are the most important rules governing Saman’s activities: • Supervision packages and policies of the CBI, which act as guidelines for the bank’s operations and other legal activities during the year under reference; • Commercial Code 1932 and its subsequent amendments; • General policies adopted under Article 44 of the Constitution; • The Monetary and Banking Act of Iran ratified in 1972 and its subsequent amendments; • Monetary and Banking Act; • The Banking Regulations Act and its annex passed in 1979; • Law requiring issuance of national identification number and postal code to all citizens; • The Law banning Bank Borrowers from leaving the Country passed in 1980; • Approvals by the Money and Credit Council; • The Law for Usury (Interest) Free Banking ratified in 1983; • Saman’s Articles of Association; • The Law annexing two notes to Article 15 of the Law for Usury (Interest) Free Banking as amended in 1997; • Supervision packages and policies and international regulations of the CBI, which act as guidelines for the • The Law permitting the Establishment of Privately-Owned Banks passed in 2000; bank’s operations and other legal activities during the year under reference. • E-Commerce Law passed on 25 January 2004; • The Cheques Act passed in 2003 and the revised Cheques Act passed in 2018; Saman’s position in the Securities and Exchange Organisation • The Law pertaining to Non-Regulated Money Markets passed in 2004; 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 Negotiable Instruments Market Law passed on 22 November 2005; • the stock symbol ‘ZeSaman’. On 7 June 2013, Saman Bank’s listing was transferred to the main market of the Iran • The Anti-Money-Laundering Act passed in 2007, revised and recirculated in 2018; Stock Exchange as per IFB’s letter no. 91/03/3035. • Law adjusting Bank Loan Interests to the Rate of Return 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 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;
20 Annual Report 21 An Overview of Saman’s Group Consolidated Operational and Financial Performances
Consolidated Balance Sheet Items
20/03/2019 20/03/2018 20/03/2017
Percentage Percentage IRR billion Percentage Increase (decrease) IRR billion Percentage Increase (decrease) IRR billion compared with previous year compared with previous year
Assets Cash 148,682 30.88 304.59 36,749 11.88 16.68 31,495 Due from banks and other credit institutions 9,955 2.07 (6.85) 10,688 3.45 10.46 9,676 Loans and advances to customers 169,474 35.20 23.58 137,137 44.32 7.35 127,750 Investment in stocks and securities 18,293 3.80 36.15 13,436 4.34 383.69 2,778 Due from subsidiaries and affiliates 2,428 0.50 (17.09) 2,929 0.95 4.49 2,803 Other accounts receivable 48,560 10.09 20.32 40,360 13.04 69.13 23,863 Tangible fixed assets 4,551 0.95 53.11 2,973 0.96 (17.73) 3,613 Intangible assets 4,952 1.03 123.45 2,216 0.72 (48.47) 4,301 Legal deposit 35,798 7.44 30.28 27,479 8.88 19.29 23,036 Other assets 38,756 8.05 9.32 35,453 11.46 23.44 28,720 Total Assets 481,449 100.00 55.60 309,418 100.00 19.91 258,035 Liabilities Due to banks and other credit institutions 91,897 19.09 919.46 9,014 2.91 (7.62) 9,758 Customer deposits 65,532 13.61 148.23 26,399 8.53 54.72 17,063 Dividends payable 52 0.01 0.00 52 0.02 (1.85) 52 Other debts and provisions 8,692 1.81 2.64 8,469 2.74 85.45 4,567 Provision for staff end of service benefits 946 0.20 36.91 691 0.22 28.61 537 Total liabilities before investment accounts equity 167,119 34.71 274.49 44,625 14.42 39.55 31,978 Investment accounts equity Termed investment account equity 297,164 61.72 17.82 252,217 81.51 18.45 212,927 Interest payable to termed investment accounts 1,612 0.33 (25.56) 2,165 0.70 12.40 1,926 Investment accounts equity 298,776 62.06 17.45 254,382 82.21 18.40 214,853 Total liabilities 465,895 96.77 55.81 299,007 82.91 21.14 246,831 Shareholders' equity Share capital 8,000 1.66 0.00 8,000 2.59 0.00 8,000 Capital increase under process 0 0.00 0.00 0.00 0.00 0.00 0.00 legal reserve 2,461 0.51 45.67 1,689 0.55 9.94 1,537 Other reserves 3,528 0.73 0.00 0 0.00 0.0 0 Assets revaluation surplus 582 0.12 (5.43) 615 0.20 (59.20) 1,507 Retained earnings 984 0.20 822.01 107 0.03 (33.48) 160 Total equity 15,554 3.23 49.40 10,411 3.36 (7.08) 11,204 Total liabilities and equity 481,449 100.00 55.60 309,418 100.00 19.91 258,035
22 Annual Report 23 Profit & loss Statement
2018/19 2017/18 2016/17
Percentage Percentage IRR billion Percentage Increase (decrease) IRR billion Percentage Increase (decrease) IRR billion compared with previous year compared with previous year
Revenues Interest income 26,643 51.41 36.07 19,580 46 (19.27) 24,254 Fees and commissions income 2,392 4.62 45.80 1,641 3.82 23.43 1,329 Net investment profit (loss) 5,664 10.93 (27.74) 7,839 18.24 55.70 5,034 Net foreign currency transactions profit (loss) 6,417 12.38 62.46 3,950 9.19 185.27 1,385 Other incomes 10,712 20.67 7.60 9,955 23.17 60.40 6,207 Total income 51,828 100 20.63 42,964 100 12.45 38,209 Expenses Interest paid on deposits (36,851) 78.94 8.95 (33,822) 79.31 5.87 (31,948) Fees and commissions expenses (2,486) 5.32 27.35 (1,952) 4.58 5.90 (1,843) General and administrative expenses (6,506) 13.94 26.40 (5,147) 12.07 43.52 (3,586) Doubtful debts expenses (300) 0.64 (75.00) (1,200) 2.81 300.00 (300) Financial expenses 0 0.00 0.00 0 0.00 (100.00) (2) Depreciation (542) 1.16 3.29 (525) 1.23 17.83 (445)
Total expenses (46,684) 100 9.47 (42,646) 100 11.86 (38,124) Profit (loss) before tax 5,143 1,515.53 318 276.00 85 Income tax Net profit (loss) 5,143 318 85
24 Annual Report 25 Key Performance Indicators The Saman Resource and Expense Analysis Key performance indicators for the years 2018/19 and 2017/18 are shown in the following table: Deposits 2018/19 2017/18 Key performance indicators for attracting deposits (in Iranian and foreign currencies) are as follows: Percentage Percentage
Capital adequacy ratio 3.78 3.61 2018/19 2017/18 Lending to deposits ratio 46.73 49.22 Amount Percentage from Total Amount Percentage from Total Lending to total assets ratio 35.20 44.32 IRR billion IRR billion Total expenditure to total revenue ratio 90.08 99.26 Demand deposits-IRR 21,734 5.99 11,745 4.22 Return on Assets ratio 1.07 0.10 Saving deposits and similar accounts-IRR 8,957 2.47 6,399 2.30 Term deposits-IRR 275,966 76.09 226,857 81.42 Return on Equity ratio 64.3 3.98 Foreign currency deposits 51,801 14.28 32,324 11.60 Total deposits to total assets ratio 75.33 90.05 Other deposits-IRR 4,240 1.17 1,291 0.46 Loan interest to total revenues ratio 51.41 45.57 362,696 100 278,617 100 Devidend to total expenditures ratio 78.94 79.31 Deubtful debts expense to total expenditures ratio 1 1 2.81 | Interest-Bearing versus Non-Interest-Bearing Deposits |
2018/19 2017/18 2018/19 2017/18 IRR billion IRR billion Amount Percentage from Total Amount Percentage from Total Deposit per branch ratio 2,667 2,049 IRR billion IRR billion Interest-bearing deposits 297,164 81.93 252,217 90.52 Lending per branch ratio 1,246 1,008 Non-interest-bearing deposits 65,532 18.07 26,399 9.48 Net profit per branch ratio 38 2 362,696 100 278,617 100 Deposit per average employee size ratio 150 116 Lending per average employee size ratio 70 57 Net profit per average employee size ratio 2.126 0.132 | Comparative Table of Deposits |
2018/19 2017/18 2016/17 2015/16 2014/15 IRR billion IRR billion IRR billion IRR billion IRR billion Total deposits 362,696 278,617 229,989 213,944 182,144 Percentage of change compared 30.18 21.14 7.50 17.46 13.22 with previous year
| Deposits |
362,696
278,617
229,989 213,944 182,144
2018/19 2017/18 2016/17 2015/16 2014/15
| Saman Bank Deposits compared with the Iranian Banking System's Total Deposits |
2018/19 2017/18 2016/17 2015/16 2014/15 IRR billion IRR billion IRR billion IRR billion IRR billion Saman Bank deposits 362,696 278,617 229,989 213,944 182,144 Total banking system deposits 20,223,091 16,464,055 12,728,364 10,619,015 8,192,761 Percentage of Saman's share of 1.79 1.69 1.81 2.01 2.22 total deposits
26 Annual Report 27 Loans and Advances Interest paid to investment deposits Key Performance Indicators for Loans and Advances Interest paid to investment deposits during financial years 2018/19 and 2017/18 are as follows:
2018/19 2017/18 2018/19 2017/18
Percentage Percentage Percentage Percentage Amount Amount Amount Amount from Total from Total of Total of Total
IRR billion IRR billion IRR billion IRR billion Equity Hire Purchase Loans 12,223 7.2 9,264 6.8 Short-term investment deposists 9,274 25.17 10,418 30.80 Joalah (Contract of reward) advances 41,054 24.2 22,456 16.4 Long-term deposits 27,170 73.73 22,936 67.81 Ijara (Equity lease purchase) loans 2,360 1.4 2,307 1.7 Termed deposits of banks and other credit instituions 17 0.05 26 0.08 Qard al-hasanah (Interest free) loans 1,022 0.6 1,396 1.0 Foreign currency deposits 390 1.06 443 1.31 Mudarabah (Capital trust financing ) loans 9,275 5.5 9,898 7.2 36,851 100 33,822 100 Mosharakat Madani (Working Capital Partnership Venture) 80,594 47.6 75,420 55.0 Percentage of increase compared to previous year 9 Debt Instruments purchase 12,012 7.1 8,381 6.1 Foreign currency loan 2,750 1.6 5,598 4.1 Letters of credit issued 475 0.3 1,307 1.0 Revenue from lending Letters of guarantee issued 590 0.3 640 0.5 Revenues earned from loans granted in financial years 2018/19 and 2017/18 are as follows: Others 7,119 4.2 470 0.3 169,474 100 137,137 100 2018/19 2017/18
Percentage Percentage Amount Amount of Total of Total
| Comparative Table for Loans & Advances (IRR billion) | IRR billion IRR billion Equity Hire Purchase Loans 1,835 7.50 1,184 6.50 2018/19 2017/18 2016/17 2015/16 2014/15 Joalah (Contract of reward) advances 6,302 25.76 2,144 11.76 IRR billion IRR billion IRR billion IRR billion IRR billion Ijara (Equity lease purchase) loans 71 0.29 69 0.38 Total Loans & Advances 169,474 137,137 127,750 126,988 118,112 Mudarabah (Capital trust financing) loans 1,082 4.42 991 5.44 Percentage of change compared to 23.58 7.35 0.60 7.52 14.57 Mosharakat Madani (Working Capital Partnership Venture) 12,213 49.92 12,417 68.14 previous year Debt Instruments purchase 1,172 4.79 776 4.26 Delay Penalties 353 1.44 460 2.52
| Loans | Foreign currency loans 552 2.26 62 0.34 Others 884 3.61 121 0.66 169,474 24,464 100 18,224 100
137,137 Percentage of growth compared to last years 34 127,750 126,988 118,112
2018/19 2017/18 2016/17 2015/16 2014/15
| Saman Bank Loans & Advances compared with the Iranian Banking System's Total Loans (IRR billion) |
2018/19 2017/18 2016/17 2015/16 2014/15 IRR billion IRR billion IRR billion IRR billion IRR billion Saman Bank Loans & Advances 169,474 137,137 127,750 126,988 118,112 Total banking system Loans 14,573,874 12,587,132 9,866,616 7,916,102 6,739,744
Percentage of Saman's share of 1.16 1.09 1.29 1.60 1.75 total Banking System
28 Annual Report 29 • Supervised the credit portfolio; • Supervised the improvement of corporate credit scoring procedures; • 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 Liabilities commission); • Advised the board; • Prepared risk management policies and guidelines. Meetings of the Subordinate Working Groups on Credit Risk and Operational Risk The Subordinate Working Groups 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 2018/19 and were responsible for monitoring operational risk and credit risk management through risk detection, measurement, assessment, and control. Meetings of the Assets and Liabilities Committee The Assets and Liabilities Committee 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 Liabilities with due consideration to the liquidity position and the capital adequacy ratio prescribed in the operational strategy. The Assets and Liabilities 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 year under reference are as follows: • Identifying different types of business-related risks, effective variables, and items susceptible to different types of risks; Major Achievements of the Bank in Different Areas • Upgrading the corporate credit-scoring mechanism 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 I.R. of Iran; Risk Analysis • 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 operational, liquidity, and credit); of banking activities. The purpose of risk management is to ensure reasonably the fulfilment of objectives based • Providing analytical reports on operational risks including operational risks in resource allocation on the bank’s approved strategies. While striving to attain these risk objectives, the department measures risk procedures and human resources management as well as risk analysis in view of systems and automation indexes and tolerance levels and define the risk appetite as a major element in corporate governance and the in international and credit operations; bank’s strategy. • Providing analytical reports on market risk including international open positions depending on the type The key activities of ensuring effective risk management are as follows: of the currency, international gap reports and value at risk analysis of the bank’s portfolio in foreign currencies; Risk High Committee Meetings • Calculating the capital required to cover credit, market, and operational risks and preparing necessary The Risk High Committee is a strategic body that reports to the Board of Directors. The outcomes of its findings reports; are presented to the board in the form of supervisory and advice reports. The Risk Committee was established • Analysing credit concentration risks based on factors such as economic sector, geographical location, to comply with the internal control structure required by the Central Bank of Iran and to ensure appropriate maturity, market type, and type of lending agreement in order to verify compliance with credit limits set and sufficient managerial policies and procedures are implemented to monitor and control various risks internally and by the CBI; involved in banking operations. The Risk High Committee supervises the enforcement of risk policies approved by the Committee and the board and places special emphasis on the protection and enhancement of the bank’s • Preparing a contingency funding plan based on the CBI’s guidelines in regard to liquidity risk management reputation, as well as on attaining optimal capital adequacy ratio. and stress testing; The most important measures undertaken by the Risk High Committee during 2018/19 include the following: • 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 gap risk, • Study of reports received on risk management and identifying areas that can be improved; and other types of risks; • Study of risk-control-related guidelines, plans, and proposals. • Forecasting liquidity surplus/shortfall on major currencies at different time intervals and reporting on the international liquidity gap; In order to execute these initiatives, the Risk High Committee met regularly during the year. The outcomes are summarised below: • Disclosing risk-management information based on the requirements of the CBI and IFRS-compatible financial statements template.
30 Annual Report 31 | 5-year Comparative Table of ATM Numbers |
2018/19 2017/18 2016/17 2015/16 2014/15 Number 1538 1459 1458 1303 1224 Percentage change compared to previous year 5.41 0.07 11.90 6.45 21.67
| Number of ATMs |
1538 1459 1458 1303 1224
2018/19 2017/18 2016/17 2015/16 2014/15
| 5-year Comparative Table of Debit and Credit Card Numbers |
2018/19 2017/18 2016/17 2015/16 2014/15 Number 1,456,064 1,293,431 1,384,438 1,742,387 2,010,187 Percentage change compared to previous year 12.57 (6.57) (20.54) (13.32) 27.96
| Number of Debit and Credit Cards | Electronic Banking 2,010,187 • Installing 75 Cash Recycling Systems; 1,742,387 1,456,064 1,384,438 1,293,431 • Launching the identity-verification services in connection with the Civil Status Registration; • Optimizing productivity of in-Branch ATMs; • Preparing the system for sale of Samantel PINs through Electronic Gateways;
• Launching BURSAR (on line Stock Trading Services). 2018/19 2017/18 2016/17 2015/16 2014/15
| 5-year Comparative Table of POS Numbers | | 5-year Comparative Table of Virtual Banking Customer Numbers |
2018/19 2017/18 2016/17 2015/16 2014/15 2018/19 2017/18 2016/17 2015/16 2014/15 Number 225,459 214,514 203,311 201,027 195,308 Person Person Person Person Person Percentage change compared to previous year 5.10 5.51 1.14 2.93 22.48 Net Bank 1,070,983 936,829 859,337 780,333 683,845 Number of transactions 843,977,588 646,693,996 530,843,484 410,221,293 270,783,397 Samanak 779,187 682,485 559,461 453,379 344,496 Telephone Bank 891,188 880,934 863,763 836,264 789,270 Percentage change compared to previous year 30.51 21.82 29.40 51.49 79.56 Mobilet 148,812 0 0 0 0 2,890,170 2,500,248 2,282,561 2,069,976 1,817,611 Percentage change compared to previous year 15.60 9.54 10.27 13.88 20.02 | Number of POSs |
225,459 | Number of Virtual Banking Customers | 214,514 2,890,170
203,311 2,500,248 201,027 2,282,561 2,069,976 195,308 1,817,611
2018/19 2017/18 2016/17 2015/16 2014/15 2018/19 2017/18 2016/17 2015/16 2014/15
32 Annual Report 33 Corporate Banking • Payment of 2,893 loans in the amount of IRR 148,433 billion (balance of loans at the end of financial year 2018/2019: IRR 70,256 billion); • Issued 1,563 letters of guarantee in the amount of IRR 17,638 billion (balance of letters of guarantee at the end of the financial year 2018/2019: IRR 7,344 billion); • Attained total resources at the end of the financial year 2018/2019 amounted to IRR 23,812 billion; • Concentrated the salary payments scheme of 10,658 personnel of corporate clients in the Corporate Banking Unit; • Signed an agreement with TAP30 to create an exclusive online payment portal. Premier and Private Banking • Offered 2,396 bookings for travel services including air tickets, domestic and international tours, and accommodations; • Issued 3,096 golden cards and 526 black cards for premier and private banking customers, respectively; • Issued 2,116 insurance policies including third-party and comprehensive car insurance and travel insurance policies, as well as redesigned complementary health insurance and Farda University Fee Insurance packages; • Issued 537 complementary health insurance policies for premium customers against their interest free deposits; • Launched Premium Customers’ Profile System; • Trained staff, in Branches and in Private Banking Offices, at the Premium Customer Services; • Merged private banking offices in Tehran into one luxury Zaferanieh Private Banking Office; • Transferred the service desk in Imam Khomeini Airport CIP Lounge to the Premier and Private Banking Unit; • Controlled resources of premium customers on a monthly basis to ensure the cost price remains at the planned level; • Organised Premium Customers Festival in Mashhad in order to introduce private banking products and services; • Arranged gifts for loyal customers on the occasion of the Iranian New Year; • Sold discounted health and sport packages to premium customers; • Designed a business model for private banking; • Offered 3,637 bookings of CIP services and 3,732 bookings of airport transport services; • Launched reservation centre contact system; • Offered the services of international "Priority Pass "at the airports lounges to the Premium Clients; • Sold investment products including Amin Saman and Negin Saman mutual funds; • Held meetings with VIP customers. The number of premium and VIP customers and the balance of their resources are as shown in the following tables:
2018, March/April 2019, February/March Premium Customers 8,335 8,683 Private Customers 482 566 Total Number 8,817 9,249
2018, March/April 2019, February/March IRR billion IRR billion Premium Customer's resources 74,452 76,745 Private Customer's resources 38,904 44,284 Total resources 113,356 121,029
34 Annual Report 35 In light of the unstable conditions of the market during 2018/19 and in order to reduce credit risk under such conditions, we designed a new product called ‘group credit card’ to be offered to qualified organisations through the Saman branch network. Until the end of the year under report, Saman entered into credit service contracts with 136 different organisations and issued 17,006 credit cards for a total amount of IRR 4,045,358 million for their personnel. In view of the competitive market and to encourage card reader users to bring all their banking accounts to Saman, we designed special credit packages for SME customers who used Saman card readers in their businesses. In the first phase, we identified about 24,000 qualified customers from around 225,000 businesses who had Saman card readers and provided the lists (updated monthly) to their respective branches for marketing and follow-up. Furthermore, informative text messages were sent to qualified customers every month. By the end of the reported year, 2,457 customers visited our branches, borrowed a total of IRR 294,354 million, and were issued credit cards for the amount of IRR 1,120,132 million. In order to attract customers from academia, we signed a memorandum of understanding with the Ministry of Science, Research and Technology. Under this memorandum, 3,151 credit cards in the total amount of IRR 1,292,386 million was issued until the end of the reported year for the faculty members and other university staff, and a sum of IRR 49,355 million was paid in loan. In order to increase revenue from fees and commissions, we reviewed our terms and conditions for issuing letters of guarantee. As a result, Saman’s terms and conditions are now highly competitive in comparison with other banks and attractive to customers. We further designed a special package for issuing letters of Guarantee to cover obligations of travel agencies vis-à-vis the air and railways transport companies. Consequently, we attracted 61 travel agencies and issued 181 letters of Guarantee for them in the short period between the launch of the product and the end of the financial year. The bank issued hundreds of small loans as part of our social responsibility scheme. As a result, 269 marriage loans (interest-free) totalling IRR 36,550 million were paid to eligible newly-wed couples. Interest-free loans to Retail Banking help low-income families in receipt of benefits from the Imam Khomeini Relief Committee to become self-employed were paid in the amount of 20,840 million to 116 applicants. Loan applications by small and • Optimised branch network structure by closing down two kiosks and relocating five branches; medium-sized enterprises introduced by the Business Development Committee were admitted and processed as instructed by the Central Bank. • Profitability of the Services Centres considerably increased compared to the previous year; In order to reduce credit risk and increase control of the lending procedure, the bank launched the Sole Trader Operated Saman 2021 Sale Model in all branches, which resulted in increased sale potential through training • Lending System and developed the Consumer Lending System with the help of Saman Processing Company and and product dialogues; the Quality Improvement Unit. This personal loan system is being piloted in selected branches and will become • Installed electronic equipment, like Cash Recycle Machines, in the branches enabling the staff members to operational in all branches in August 2020. A similar system for SME (legal entity) lending will be designed concentrate on sales; subsequently. • Shifted the work culture of the colleagues in the branches and the retail banking unit toward sales-centric approach; • Increased zero-cost resources; • Reduced cost of funds; • Organised four quarterly assemblies attended by branch managers and area directors; • Implemented a programme to attract, retain and expand the network of merchants using our points of sales devices; • Launched SamanTel Sim cards sale project in the selected branches and all the Service Centres; • Reduced branches’ NPLs. SMEs and Corporate Credit Facilities In order to boost profitability from operational incomes, we considerably increased Corporate and SME lending targets, in some cases tripling the amounts compared to the year before. We exceeded all targets, as shown in the table below:
Target Achieved Target Operation (Percentage)
Growth of IRR lending balances IRR billion 13,885 15,867 114 Letters of guarantee IRR billion 7,000 10,919 156 Foreign Currency L/Cs, drafts, remittances US$ million 2,500 4,031 159 Commission from letters of guarantee IRR billion 70 81 116 Commission from currency operations IRR billion 104 221 212.5
36 Annual Report 37 International Banking
International Operations International operations including L/C, Bills of Exchange, and money orders as well as letters of Guarantee during 2018/19 are shown in the following table:
Money orders Money orders L/C import Import Doc.Bills Guarantee letters import export
2018/19 US$ million 289.36 1,088.44 26.88 7,521.34 9,710.52 18,637.94
As shown in the table provided above, the overall amount has reached US $18.6 million, which shows a 102 percent increase in comparison with the previous year. In spite of sanctions implemented by a number of correspondent banks, Saman managed to secure a share of 16.8 percent from the national banking network’s for international operations. This great achievement indicates 57 percent growth compared with the previous financial year.
Bank’s Revenue Our most important achievements in view of revenue from international operations are as follows: • Revenue from international operations was IRR 3,083 billion, which is 18 percent above the approved target (IRR 2,600 billion); • Revenue from currency exchange was IRR 2,917, which is 88 percent above the approved target (IRR 1,550 billion); • Revenue from commission and charges was IRR 756 billion, which is 116 percent above the approved target (IRR 350 billion).
Bank’s Performance in Foreign Exchange During the year under reference, foreign exchange for the import of commodities and services was purchased through the banks and through the NIMA (CBI’s Foreign Exchange Management Integrated system). According to the CBI reports, a total of USD 3.7 billion has been purchased from the CBI through banks, and about USD 1 billion has been purchased through the NIMA system. Saman obtained the necessary license from the CBI on 19 December 2018 and started purchasing international earned from exports by petrochemical companies. The total amount purchased and sold to applicants was USD 191 million.
Bank’s Performance in Non-commercial Currency Services In spite of further strict policies adopted by the CBI, Saman was nominated as the CBI’s agent to supply international to outgoing tourists, students, and patients seeking medical treatment overseas. During the reported year, Saman sold USD 115 million for tour and travel, USD 80 million for studying abroad, and USD 5.5 million for medical treatment abroad, totalling USD 202 million.
Correspondent Banking Relations Highlights in Saman correspondent banking are as follows: • Selected as the Iranian banking network’s agent for all international operations with correspondent banks in India (using Indian Rupees) and in South Korea (using Korean Wons) • Never appeared on the list of US secondary sanctions, which enabled us to continue international banking activities after US withdrawal from the JCPOA • Remained the frontrunner in receiving foreign currency allocations for import of humanitarian goods including food, pharmaceuticals, and medical equipment.
38 Annual Report 39 | Daily fee for safekeeping, Iranian Rials (per coin) |
700
600
500
400
300
200
100
0 10/2/2018 27/8/2018 5/11/2018 7/01/2019
| Authentication fee, Iranian Rials (per coin) |
10,000
7,500
5,000
2,500
0
10/2/2018 13/11/2018
Saman intends to increase this gold warehousing capacity even further after acquiring the agreement of the Iran Mercantile Exchange.
Analytical Reports The Investment Department prepared analytical reports on different subjects. The following is a list of the most notable ones: • Analyses of the financial statements of subsidiary and affiliated companies for different financial periods; • Studies of the capital increase reports of subsidiary and affiliated companies; • Fundamental and technical analyses of companies admitted to the Tehran Stock Exchange and Iran Fara-Bourse; Investments and Assemblies Affairs Unit • Rating banks for interbank-lending purposes; Projects carried out in 2018/19 • Feasibility Studies on different plans such as increasing coin storage capacity, publishing bonds, etc.; A) Online Operations of Investment Funds • Survey reports on the evaluation of shares of selected companies. With due regard to the Central Bank if Iran declaration asper letter No. 96/322441 dated 10.10.1396, which forbidden all the banks and financial institutions to take any actions in connection with investment funds including the issuance of investment units, identification of the customers and providing relevant forms, in the branches, hence the on line processing of the investment funds with fixed income was taken into the Saman Bank agenda. On the same issue, the process of using Amin Saman Fund was implemented through internet by Amin Investment Company with the cooperation of Saman Bank. The exclusive feature of the site of the afore-mentioned Fund (www.aminesaman.com), was to avoid the investors identification control, within the branches.
B) Gold Coins Warehousing Against Issuing Certificates With the help of the Iran Mercantile Exchange (IME), Saman offered the service of acceptance, safekeeping, and delivery of gold coins. Gold coin deposit certificates were issued by Saman bank’s gold storage with a capacity of 20,000 gold coins on 16 February 2018. Following the popularity of this project, the capacity increased to 40,000 on 9 January 2019. By the end of the year, more than 90 percent of the capacity was full. The daily fee for safekeeping and the fee for authentication of gold have changed during the period, as shown below:
40 Annual Report 41 Inspection and Compliance • Identification and analysis of financial crime gap in comparison with the average of the world first class banks and premium international standards; • To define the bank’s road map towards compliance on the financial crimes with the use of superior international solutions; • Design and implementation of a comprehensive plan and transparent organisational structure in view of financial crimes compliance; • Customers classification based on financial crimes risk under three categories of low risk, medium risk, and high risk and the start of (Saman bank CDD Remediation Project with 2000 high-risk retail customers, 262 corporate customers, and 59 ‘Ring-fenced’ Saman international customers; this is in the process of completion.); • Prioritizing identified risks based on the risk analysis reports of Saman Financial Group of companies; • Implementation of the Omni Enterprise system for doubtful transactions monitoring, customer profiling, based on sanctions lists; • Posting a compliance officer at the Saman Insurance Company; • Increasing the number of compliance officers in branches and regional directorates; • Launching BPMS to automate the compliance checklist; • Organizing training courses on compliance by Ernst & Young; • Preparing an online platform for compliance training for all personnel; • Designing an internal system on foreign currency undertakings settlements recording to the respective directors’ viewpoints to record statistics and obtain reports on the actions taken in connection with these undertakings; • Implementation of the software for control of unpaid commission and charges for the services rendered under international and domestic activities, credit facilities, as well as evaluation of securities which have not been lodged with us. Advising the branches of the shortfalls and follow ups to collect all the pending items; • Considerably increasing the number of Suspicious Transaction Reports sent to Financial Information unit 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. Financial Management • Proper liquidity management resulting in zero overdraft from the CBI; • Earned IRR 1700 billion from the interbank market during the 357 days when Saman was a depositor in the market, showing 75 percent growth compared with the previous year; • Challenged and won a tax dispute case of IRR 781 billion under tax clauses ‘B’ and ‘C’ of Article 17 of the Law for "Re manual of the Obstacles for Competitive Production " pertaining to the tax year ending 20 March 2017; • Reached an agreement with the tax authority in regard to the fixed tax files (properties and stocks transfers) for years 2015/16, 2016/17, and 2017/18, which reduced the payable tax for IRR 1584 billion, equivalent to more than 68 percent of the total amount of tax claimed; • Cooperated in the personnel performance evaluation based on pre-set targets; • 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 2019/20; • Cooperated in the bank’s rating process carried out by Capital Intelligence Rating Agency; • Implemented SAP software; • Cooperated and set targets for the implementation of Saman 2021 Plan.
42 Annual Report 43 Internal Audit and Control By adopting a systematic and effective approach, the Internal Audit and Control Unit improves the efficiency of the bank’s governance system, risk management, and control measures. The senior management of Saman appreciates the importance of internal auditing as a key principle in corporate governance. With this in mind, they strive to ensure all of the departments and units within the organisation are fully aware of the role and value of internal audits and make timely and effective use of internal audit findings to address any problems that may arise. With internal auditing, the bank seeks to promote the effectiveness of internal controls and full compliance with international standards and relevant regulations such as the updated COSO Internal Control – Integrated Framework (2013 Framework), as well as those of the Central Bank of Iran (CBI), recommendations of the Basel Committee, and requirements of the Securities and Exchange Organisation of Iran (SEO). As the executive arm of the Audit Committee, the Internal Audit and Control Unit assesses the efficiency and effectiveness of operations, the reliability of financial reporting, and compliance with rules and regulations. Auditing reports are first discussed by the Audit Committee and then by the Board of Directors. Proper decisions are made by the Board and circulated to the executive units. One of the most important phases of audit work is to follow-up proper measures adopted to address the audit findings comprehensively. The Internal Audit and Control Unit and the Secretary of the Executive Board carry out the follow-up in specific time frames. With due regard to the importance of the activities of the subsidiary companies and in order to ensure the effectiveness of the internal controls, in the direction of achievement of the macro objectives of the Bank and other Beneficiaries, the implementation of internal audit and supervision is entrusted with this unit. In accordance with the approved plan of the internal Audit and Control Unit, the auditing of the Human Capital Directorate (Training), the Services rendered at the e-Banking Department, the management of assets and liabilities (Rials), Information Technology and Security, legal services, general accounts, the assets book keeping and the share holders relations directorates were audited in 2019 by the Internal Audit and Control Division. In compliance with International Professional Practices Framework (IPPF) standards for internal auditing and the Board’s decision, the performance of Saman’s Internal Audit and Control Unit was assessed in 9 areas (leadership, resource finding, competence development, continued staff excellence, methodology, technology, knowledge management, operations and risks quality and reliability) by Ernst & Young Consulting Firm. In the first round of the National Iranian Prize for International Audit, Saman was awarded the silver trophy. The prize was bestowed Human Capital by the Iranian Association of Internal Auditors for the ‘desirable performance in continued improvement of internal auditing’. Saman’s silver trophy was the highest level obtained by banks in this competition.
The banks human capital structure over the past three years is presented in the following table:
Associate Master's Bachelor's Grand PhD Diploma & Subtotal Total Degree Degree Total Lower
Head Female 1 124 128 13 266 826 Office Male 6 194 209 151 560 2018/19 2491 Female 1 190 337 10 538 Branches 1665 Male 1 266 759 101 1127 9 774 1433 275 2491
Head Female 0 114 123 11 248 785 Office Male 7 171 199 160 537 2017/18 2419 Female 1 172 342 12 527 Branches 1634 Male 1 232 763 111 1107 9 689 1427 294 2419
Head Female 0 109 130 13 252 784 Office Male 5 152 200 175 532 2016/17 2406 Female 1 150 371 12 534 Branches 1622 Male 1 202 772 113 1088 7 613 1473 313 2406
44 Annual Report 45 The bank’s human capital structural position over the past three years is presented in the following table: • Localising specialised banking training courses;
2018/19 2017/18 2016/17 • Preparing and launching a branch-grading system; Members of the Board of Directors 5 4 4 • Visiting more than 80 branches and Service Centres in Tehran and 13 other cities and preparing survey Senior Advisors and Inspectors 31 27 23 reports on their weak paints; Senior and Executive Directors 24 25 27 • Documenting the organisational culture with regard to the needs of the organisation and colleagues Deputy Executive Directors 12 10 11 (five documents have already been produced); Division Heads 39 32 25 • Changing the work assessment approach and determining the number of staff needed in each branch Deputy Division Heads 19 26 22 based on Saman 2021 Plan; Unit Managers 91 92 95 • Coordinating the organisational structure of various head office units in light of the bank’s long-term Experts 479 379 408 strategy and environmental changes; Regional Managers 9 9 10 • Entering into contracts with other recruitment interviewers; Branch Managers 140 146 143 • Recruitment, employment, and appointment of required workforce in accordance with the Plan of Saman Branch Deputy Managers 185 143 146 2021 Plan; Banking Clerks 1172 1171 1101 • The actions taken in connection with personnel files and records; Administration Staff 289 322 354 • Updating, amending, and adapting existing positions based on the new organisational structure; Total Personnel and Members of the Board of Directors 2495 2422 2410 • Reviewing procedures in executive manuals towards the enhancement of staff satisfaction; • Creating the procedure for evaluating the recruitment process of new staff; Training and Development • Arranged for of leave and business trip applications, expenses claim forms, and some lifestyle services, The key training courses offered and the numbers of participants during 2018/19 were as follows: to be presented on line. Some of Human Capital Directorate’s plans for 2019/20 Type of the Course Number of Participants 2018/19 Man-hours 2018/19 Specialized non-banking courses 2923 54259 • Implementation of SAP software; Specialized banking courses 1100 25318 • Collaboration in the implementation of Saman 2021 Plan; Behavioural courses 762 7956 • Implementation of the talent management project; Virtual behavioural courses 0 0 • Identification of key positions; General courses 3083 41463 To make Payment of Bourse System targeted, based on Key Performance Indicators (KPI); General English courses 234 7208 • Virtual training courses 0 0 • Compiling organisational culture documentations in accordance with organization and the colleagues requirements of the business and workforce; 8102 136204 • Publishing Retail Banking book II; • Naturalization and digitization of the Retail Banking I training courses; Major accomplishments of the Human Capital Directorate in 2018/19 • Launching Educators’ Club; • Design and implementation of Bank’s performance management dashboard; • Compiling the English language training courses tailored to the job descriptions, of different organisational • Implementation of and acquiring certificate of ISO 9001:2015 in human capital management; units; • Implementation of the first phase of talent management; • Producing electronic texts for specialised banking courses; • Periodic health surveys for all personnel of the bank; • Equipment of Area Directors Offices for training courses; • Obtained discount facilities for the colleagues, form the merchants using SEP points of sales; • Launching the Excellence Training Award/feasibility study for Participation in the Excellence in Training • Organising Saman Cup internal futsal competitions; and the Human Capital Development Award; • Charitable support for colleagues; • Organising RBA-III course in collaboration with the Retail Banking Academy, London; • Signing contracts with different hotels throughout the country to get discounted accommodation rates for • Offering etiquette and socialising skills courses, to be attended in person, for all the staff in Tehran; personnel; • Launching an online Training system; • Translation and publication of Retail Banking book I; • Launching a Social Network concentrated Training course; • Designing and Implementing hands-on training courses in international banking and credit; • Implementation of DMS software. • Continued production of virtual training courses in new methods; • Producing texts and training services to the subsidiary companies; • Organizing long-term MIM, DBA, and RBA courses; • Designing and implementation of a banking test to compile training needs;
46 Annual Report 47 Social Responsibilities • Distribution of Saman Financial Group’s presents among the students in underprivileged regions of Chahbahar City; • Financial assistance to earthquake victims in Kermanshah Province; • Construction of an educational complex in Yazd. • Cooperation with UNICEF Iran office; • Donations to different charities; Future Projects in Social Responsibility • Paying surgical and medical costs of 33 children from low-income families through the Chain of Hope In 2019/20, Saman will continue to cooperate with the aforementioned charities. The next year’s budget for the (La Chaîne de L’Espoir) charity; aforementioned charities has been approved and allocated. • Supplying Fadak Charity with five computers and five desks; • Construction of Accidents and Emergency Centre in Sarpol Zahab city, Kermanshah Province;
48 Annual Report 49 Protection Inspection Office Regulatory Assistance Bureau of Electronic and Law Enforcement
Department of Protection
international affairs deputy development Management consulting and Management of
international business International Banking
Technology Human Capital Financial Group Managing Board
Committee of Saman Compliance Supreme
Supreme Committee of Supreme Committee of
Security and Information
Supreme Audit Committee Department for of receipt claims
Claims Collection Claims Collection Legal management Corporte and MIcro Legal Assistane Deputy
(PMO) Department for Major
Major Accolades and Achievements of Saman Bank and Saman
Department of Planning and Collection of Claims
Managerial Domain project project Financial Group in 2018/19
Received the highest number of public votes in the fifth round of "My favourite Bank in Iron "festival;
Strategic, • and customer voice management office Public relations management management relations Public • As per the announcement from the office of the Governor of Tehran Province, Saman Bank has attained the Top Rank in the Customers’ Satisfaction and earned full 100 marks for the year 2018; and Planning Management Deputy of Finance Finance Management Investment and Stock Saman Bank has been awarded with the Management of Customer Complaint Handling Process, as per ISO
• Deputy 1002:2018 Certificate;
Board of Director Managing Director • Saman Bank also received ISO 9001:2008 and ISO 9001: 2015 Quality Management System Certificate;
Saman Bank Sponsored Damavand 2018 Symposium on the occasion of the 175th anniversary of an Austrian Organisational Structure Organizational Chart-Level 1 • mountaineer’s ascent to Mount Damavand; Management Management Management Launched Saman Bank Shareholder’s Portal; and Infrastructure Human Capital
IT Management • Risk Department Improvement and
AML & Compliance Compliance & AML Deputy of Development quality management Support Management • Iranian Association of Internal Auditors, at their Annual Congress in 2018 awarded Internal Audit and Control Authority Unit of Saman Bank with: 1st. National Internal Audit Award. The Silver Award is the highest level of honour
awarded to the participant banks; Internal Audit and
• The 9th Annual “Three Star "Award of the National Financial Management of Iran, was awarded to Saman Financial and Economic Development Group, the Holding Company of Saman Group of Companies for the
Crimes enhancement and elevating of the level of Financial and Economic Management of the Group, in 2018; Management management credit assistance Department of
corporate banking Risk Management
Strategy and Budget and corporate credits Financing and Project Management of micro
Supreme Committee of Supreme Committee of Supreme Committee of Sponsored the art of 800 years old " Daraii” weaving, a traditional technique for dyeing and weaving, called
• Compliance and Financial "Ikat" used to pattern textiles, in Yazd, Iran;
Collections Receive and Health • Saman Financial Group was appreciated by the Kish Free Zone Governor at the closing ceremony of 21st Kish Executive Committees • assets & debts • Macro Credits • international banking discipline personnel • • Average credits transaction • & follow-up • Safety Occupational • Island Summer Festival.
• A full appreciation of Saman Bank at the National Gathering for glorification of those selected entities who marketing & Bank Deputy E-banking accept social responsibilities; Management management management management microbanking
and marketing
Private Banking
product developmen Saman Ertebat Office
50 Annual Report 51 ۵۴ *(ارش %ﺎ#"! ۵۵ To Annual Ordinary General Meeting of Shareholders 7- Presentation of statement of investment deposit performance and statement of changes in equity as fundamental financial statements, according to I.R.I. Central Bank’s directives, and also presentation of cash flow statement in Saman Bank (Public Joint Stock Company) three categories, have not been mentioned as mandatory by the accounting standards. 8- In preparation of attached consolidated financial statements, the financial statements of Sarv Zarin Atlas company, Report on the Financial Statements Kala Tejarat Fars company, Tosseh Sarmayeh Gozarie Saman, Iranian Fanavar pars, Aftab Tejarat Saman, Tosseh Tejarat Atieh Alborz and Tosseh Omid Atieh Andish have not been consolidated. It should be noted that the audited Introduction financial statements of the above companies have not been delivered to us in full hence determining the effects of 1- We have audited the consolidated financial statements of Saman Group & Bank (Public Joint Stock Company), the above mentioned on items of consolidated financial statements is not possible. including the balance sheets as at March 20, 2019 and statement of investment deposit performance, statements 9- According to civil partnership contract with Messrs. Mahmoud Esmailzadeh Marvian and Reza Kamrani in the of profit or loss, statements of comprehensive income, statements of changes in shareholders’ equity as well as prior years, in order to establish karaj city center project (Alborz Mall), in addition to transferring two pieces of the cash flow statements for the fiscal year then ended together with the explanatory notes 1 to 66 hereto attached. land for place of project, Six different loan facilities were granted which together with the related interest, fees and payments, the amount of Rls. 6,757 Billions are shown under the heading of facilities granted. Since the counter Responsibility of the board of directors for financial statements party has not complied with the terms and conditions anticipated in the contract, subsequent to Bank’s complaint and consequent legal procedures the above mentioned project was confiscated on Month of Dey 1397. Under 2- The board of directors of the Bank shall be responsible for preparing the financial statements according to the present conditions and not delivery of some information to this firm, determining the effect of recognizing & accounting standards. Such responsibility includes design, implementation and maintenance of internal controls reflection of value of these confiscated properties, is not possible for this firm. for setting up these statements in such a manner to ensure that there is no significant misstatement due to fraud or error. 10- As explained in Note 10-2-1 to the financial statements, dues form the Central Bank of Iran (CBI) include an amount of Rls. 13,195 Billions advance purchase of foreign currency during the years 1390 and 1391, which despite Responsibility of auditor and legal inspector actions taken, including special audits, the final settlement method of which is not clear yet. It should be noted that, in connection to foreign exchange differences in the letters of credit opened during the above mentioned 3- Our responsibility is to express an opinion on these financial statements based on our conducted audit in years, an amount of Rls. 2,810 were received from customers, which have been reflected in Note 22 of the financial accordance with auditing standards. Those standards require that we comply with ethical requirements and statements as debts to banks and credit institutions. Additionally, according to the Central Bank’s correspondence, plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from an amount of Rls. 5,956 Billions were claimed as penalty for overnight withdrawals, for which no entry has been material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and made in the accounts. Considering that no replies was received to our request for confirmation from the Central disclosures in the financial statements. The procedures selected depends on the auditor’s judgment, including the Bank of Iran (CBI), no information on the possible effects resulting from settlement of the mentioned accounts, assessment of the risks of material misstatement of financial statements, whether due to fraud or error. In making including interest & other charges on inter-bank accounts, on the Bank’s financial statements under review nor those risk assessments, internal control relevant to the company’s preparation of the financial statements in order comparative year is available. to design audit procedures that are appropriate in circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s financial statements, is considered. An audit also includes evaluating the 11- As explained in Note 8-9-1 of the financial statements, the bank’s foreign currency Accounts as at Balance sheet appropriateness of accounting policies used and reasonableness of accounting estimates made by directors, as date are translated using the central bank’s rate (Rls. 75000 per USD) and consequently an amount of Rls. 3,334 well as evaluating the presentation of the financial statements. billions is being accounted for as forex translation difference. 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 We believe that the audit evidence we have obtained is sufficient and appropriate to express a qualified opinion on in settlement of Account balance. Hence there are necessary adjustments required to be done. In absence of the financial statements. some information, specifically foreign currency Assets, the effects of above mentioned adjustments on financial statements items, in particular regarding reflection of FX translation difference in the related heading is not Our responsibility, as the legal inspector, is to report on non-compliance with legal requirements as per the possible to determine. amended commercial code of Iran and the Bank’s articles of association and legal regulatory requirements of banking activities to the ordinary general meeting of shareholders. 12- The title deeds for a part of immovable properties and a part of collateralized properties have not been transferred up to the date of this report. In addition, in relation to the method of utilizing the collateralized properties in Basis of qualified opinion hand, resolving disputed properties, construction and completion costs and subsequent planning for sale of such properties, there is no information provided to this firm. Therefore, determining the possible effects of the above The situation of given financial facilities and dues from persons and the method of calculation of interest and 4- items on financial statements is not possible for this firm. related charges together with provisions envisaged in I.R.I. Central Bank’s circulars are explained in Notes 8-4, 8-5, 8-6 and 11 to the financial statements. 13- Accounts receivable (note 15-2 to financial Statemens) as at Balance sheet includes receivables from sales contracts for properties (Behnad Bana & Taamin Atieh Karkonan Saman Co.) and finance of share acquisitions In this regards, in addition to the fact that the requirements of the manual on “Asset Classification in Credit in other companies (Tosseh Saramayeh Gozari Saman Group companies and Tosseh Mali Va Eghtesadie Saman Institutions and Calculation of Provisions for Doubtful Debts approved by Money and Credit Council” and related Group) taken place in recent years. Since the receivables related to prior year’s sales which have not been received circulars on classification of receivables are not fully complied with, the overdue facilities have mainly been without in accordance with the relevant payment terms and no documentations were provided to this firm regarding any funds received and hence dealt with by rescheduling or renewing and reflected as current facilities and related settlement of the obligations by these persons, who were somehow among related parties of the Bank, based on interests shown in the accounts. Therefore, considering the control weaknesses in the system of calculating the contractual payment terms, no opinion can be expressed on their possible effects on the financial statements provisions for doubtful debts, including the revaluation of collateralized assets at different points in time, it has not of the year under review nor the comparatives relating to prior years. been possible for this firm to determine the required provisions. 5- The current investment in other shares and gains arising from increase in the value of these shares are reflected, Qualified opinion respectively, in Notes 12-2-1 and 36-3 to the financial statements. Since the practice used by the Bank for 14- In our opinion, except for the effects of the items stated in Clauses 4 to 11 above and subject to possible effects of reclassification and valuation of shares are not based on accounting standards, and considering the ownership items mentioned in Clauses 12 & 13, the financial position of Saman Group & the Bank (Public joint stock company) percentage, applying the equity method of accounting would be necessary. The required adjustments would as at March 19, 2019 and their financial performance and cash flows for the fiscal year then ended are true and decrease the accumulated profit and the investments in the consolidated balance sheet by the amount of Rls. 1,432 fair, according to the accounting standards, from all material aspects. Billions. 6- Based on Note 26 to the financial statements, and since corporate income tax for the years 1387 to 1394 have Emphasis of matters been finalized, tax differences for these years, amounting to Rls. 1,017 Billions, should have been dealt with as (Our opinion has not been qualified as a result of items 15 to 18 below). the prior year adjustments. And, on the other hand, tax paid in advance of Rls. 702 Billions under the heading of ‘other assets’ should be written off, tax payable of Rls. 315 Billions is to be reflected under the heading of ‘provision 15- As explained under Note 10-3-1 to the financial statements, although actions have been taken regarding collection for corporate income tax’. Additionally, considering the assessed tax for the year 1396 and the tax authority’s of receivables from Bank Pasargad and Saderat for the amounts of Rls. 2,641 Billions and Rls. 858 Billions investigation, it seems necessary to make extra tax provision of Rls. 402 Billions as a minimum. respectively, there has been no concrete results.
54 Annual Report 55 16- As per the tax claim notice, subject of Clauses (B) & (P) of Article 17 of the Act of Removing the Obstacles of • Clause 1 of Article 7 regarding timely issue of audited annual financial statements of the Bank and the Competitive Production (Note 26-2-1 to the financial statements), an amount of Rls. 3,768 Billions is claimed by the group consolidated accounts. tax office for year 1396, but the company has appealed against it, and the case is currently being reviewed by the Clause 2 of Article 7 on submission of Board of Directors’ Report & Auditor’s Report on it within maximum board of settlement of tax disputes. Also, for the year 1397, the Bank has not presented the information required by • 4 months from the year end of the Bank. the mentioned Act. Article 10 in relation to submission of minutes for ordinary & extraordinary meetings within maximum of As explained in Note 21-2-3 to the financial statements, the collateralized assets do not appear to have been • 17- 10 days, to Companies Registrar and its disclosure within one week after notice of registration. adequately insured. The inventory is not adequately insured neither (Note 17-1 to the financial statements). Clause 3 of Article 7 regarding submission of unaudited interim financial statements for 3-, 6- and The information about significant risks in the banking industry and explanation of the Bank’s status in terms • 18- 9-month periods within maximum 30 days from end of 3-month periods. of structure, risk management methods & analysis, as elaborated in Note 60 to the financial statements, in the absence of any specific standards, are presented only based on the Bank’s own interpretation regarding • Clause 4 of Article 7 regarding submission of 6-monthly audited financial statements within maximum calculation of such risks. 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 financial Report on other legal responsibilities year end. • Clause 10 of Article 7 regarding submission of annul audited financial statements of controlled companies Report on other responsibilities of the legal inspector at least 10 days before bank’s annual ordinary general meeting & submission of interim audited financial 19- The cases of non-compliance with some of the monetary and banking laws and regulations together with related statements of the mentioned companies within maximum 60 days after end of 6 monthly duration. circulars over the banking operations and mandatory bylaws for the banking system for the period under review by • Article 9 regarding immediate disclosure of decisions made in general meetings. our firm have been submitted to the Central Bank of Iran (CBI) under a separate letter by this firm. • Article 43 regarding appointing a managing director by the board maximum within 1 month of being 20- As explained in Note 60-7-3 to the financial statements, capital adequacy ratio is lower than the required value by without a managing director. the CBI (8%), and the ratio will be even lower by considering the content of this report. Provisions of notification No. 021/440/B/96 dated 24th Tir 1396 requiring presentation of financial 21- Cases of non-compliance with the legal requirements provided under the Amendment of the Commercial Code of statements based on IFRS within maximum 6 months from publications of audited financial statements. Iran and articles of association of the Bank are as follows: 27- Internal controls related to the financial reporting of the Bank as at 29 Esfand 1397 were assessed according to the Article in the Clause in the requirements of the Securities & Exchange Organization. Based on this assessment and considering the inherent Amended Articles of limitations in internal controls, this firm has not observed any material weaknesses in internal controls related Commercial Code Association to financial reporting, according to the second chapter of internal control instructions approved by SEO, with Selecting the managing director, extent of authority, duration & his remuneration 124 18 the exception of failure of the audit committee to perform its tasks in accordance with the approved framework, Payment of dividends within 4 months from approval date (prior years’ profits) - 111 failure to set up the software for some parts of the banking operations, such as letters of credit, and failure of the Holding annual general meeting within the period stipulated in the articles of association 89 & 138 31 established mechanized system to report important elements of the banking operations, e.g., loan collaterals. Compliance with ownership ceiling of the Bank’s shares - 7 28- Regarding non-compliance with the Act of Removing the Obstacles of Competitive Production and Promoting Compliance with capital adequacy ratio - 115 & 116 National Financial System in the financial year under review, the following matters should be reported: • Clause ‘P’ of Article 17 of the executive bylaw regarding preparation of the list of excess properties and submission of this list to the Central Bank of Iran (CBI) after auditor’s confirmation is not complied with, Also, we draw the shareholders’ attention to the effects of clauses 4 to 11 of this report on distributable dividends. hence, it has not been possible to carry out compliance checks for Clauses “A” & “B” of Article 16. 22- Transactions mentioned under Note 62-3 to financial statements, including all the transactions subject of Article • Provisions of Article 21 of the executive bylaw regarding opening of a special account if requested by the 129 of the Amendment of the Commercial Code of Iran performed during the fiscal year, reported to us by the receiver of the loan facilities. board of directors, were reviewed by this firm. Such transactions are performed in compliance with the provisions of the mentioned Article in terms of obtaining of the board's consent and absence of the director concerned • Provisions of Article 47 regarding agricultural loan facilities to the extent determined by the Central in voting. Considering the special circumstances of the related party transactions, our firm believes that such Bank of Iran (CBI). transactions should be brought to the annual general meeting of shareholders for proper decisions. 29- In execution of Article 33 of ‘Executive Directive on Anti-Money Laundering for Auditors’, we have evaluated the 23- We have examined the report of the board about activities and general situation of the Bank, provided under Article Bank’s compliance with the provisions of the mentioned law and other related circulars and executive directives as 232 of the Amendment of the Commercial Code of Iran, to be presented to the general meeting of shareholders. In per the required check-lists and auditing standards. In this respect, with the exception of ‘risk-based classification view of such examination, we can confirm that there is no significant case of inconsistency between the information of customers’ and ‘certain cases of non-compliance by subsidiaries’, no material cases of non-conformity with the therein and the documents provided by the board. above laws and regulations has been detected. 24- Detailed calculations relating to the difference between on account and final interest on investment deposits is shown in the statement of investment deposit performance. In checking compliance with circular No. 126331 dated 19.12.1387 & letter No. 94/69383 dated 1394/04/20 of the Central Bank of Iran (CBI), we have seen no cases of non- conformity. The excess interest payable to depositors amounts to Rls. 181 Billions. Which after considering the effects of clause 5 of this report the amount of excess will increase. Azmoon Pardaz Iran Mashhood Audit Firm (IACPAs) Report on other legal and regulatory responsibilities of auditor Date: 6th July 2019 Farzad Shadadfard M.H. Saadatian Farivar 25- The annual membership fees for deposits guarantee fund, in line with the provisions for calculation and receipt (800447) (800385) of such membership fee based on the amended bylaws for such deposits (subject of circular number 68469/96 dated 7th khordad 1396 in relation to Directive number 22196/t53725 “H” dated 30th Ordibehesht 1396 of council of ministers) for the years up to and including 1396 were paid and for year 1397 were not calculated, nor paid. 26- 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:
56 Annual Report 57 Saman Bank (Public Joint Stock Company) Consolidated Balance sheet For the fiscal year ended March 20, 2019 (restated) (restated) Note March 20, 2019 March 20, 2018 Liabilities and shareholders' equity Note March 20, 2019 March 20, 2018 Rls(m) Rls(m) Rls(m) Rls(m) Assets Liabilities Cash 9 150,969,609 36,593,485 Due to banks and other credit istitutions 22 92,278,307 9,215,208 Due from banks and other credit institutions 10 10,338,939 10,683,747 Customers' deposits 23 66,203,469 26,455,203 Due from the government 0 0 Dividends payable 24 124,833 26,316 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 11 169,077,815 136,641,385 Advances received 25 88,192 58,508 Investments in shares and other securities 12 17,631,037 13,022,437 Debt securities 0 0 Long-term investments in affiliates 13 254,495 297,664 Provision for corporation tax 26 201,766 147,135 Due from subsidiaries and affiliates 14 628,332 458,720 Provisions and other liabilities 27 13,698,716 10,062,738 Other accounts recievable 15 50,439,492 41,592,890 Provisions for employees' termination and pension benefits 28 997,770 724,836 Orders and prepayments 16 50,183 63,828 Total liabilities before investment depositors' equity 173,593,053 46,689,944 Inventory (materials and goods) 17 398,227 255,810 Investment depositors' equity 29 297,042,957 253,176,148 Tangible fixed assets 18 5,405,118 3,668,807 Total liabilities 470,636,010 299,866,092
Intangible assets 19 4,928,883 2,181,127 Shareholders' equity Statutory deposits 20 35,798,262 27,478,565 Share capital 30 8,000,000 8,000,000 Other assets 21 38,507,009 35,447,711 Ongoing capital increase 0 0 Shares premium reserve 0 0 Parent company's shares held by subsidiaries (9) (9) Legal reserve 31 2,507,876 1,732,402 Other reserves 32 3,528,218 0 Assets revaluation reserve 33 581,569 614,971 Difference in foreign exchange rates 0 0 Retained earnings (1,004,231) (1,994,584) Treasury shares 0 0
Parent company total shareholders' equity 13,613,423 8,352,780 Minority interest 34 177,968 167,304
Total assets 484,427,401 308,386,176 Total liabilities and shareholders' equity 484,427,401 308,386,176 Customers' obligations for LCs 55-1 4,041,632 7,719,819 Bank's obligations for LCs 55-1 4,041,632 7,719,819 Customers' obligations for LGs issued 55-2 14,387,047 9,870,529 Bank's obligations for LGs issued 55-2 14,387,047 9,870,529 Customers' other obligations 55-3 46,410,920 28,847,484 Bank's other obligations 55-3 46,410,920 28,847,484 Managed funds and similar items 55-4 473,099 1,246,146 Managed funds and similar items 55-4 473,099 1,246,146
The accompanying explanatory notes are an integral part of these financial statements. The accompanying explanatory notes are an integral part of these financial statements.
58 Annual Report 59
Consolidated statement of profit & Loss For the fiscal year ended March 20, 2019 ) ) )
(restated)
33,402 33,402 921,843 0 0 13,613,423 13,613,423 0 ( 0 0 0 0 0 ( 0 Note 2019 2018 15,679 0 ( 0 5,278,366 0 9,274,623 0 Rls(m) 0 Total areholders' equity Rls(m) Rls(m) Income from loans granted and placements in other banks and debt securituies 35 26,625,183 19,571,824 Interest expenses on deposits 41 (36,795,773) (33,754,445)
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) 0 Treasury shares Net income from loan interests and placements in other banks (10,170,590) (14,182,621) ) ) ) )
) Fee and commission incomes 42 2,409,831 1,663,679 )
Fee and commission expenses 43 (2,449,280) (1,911,330)
1,004,231 4,303,692 3,528,218 775,474 921,843 1,072,741 0 0 ( 3,299,461 ( 0 0 0 0 0 ( 0 ( 15,679 0 ( 0 5,278,366 0 ( 0 Rls(m) 0 Net income from fees and commissions (39,449) (247,651) Retained profit (loss) Income from sales and services rendered 44 84,344,987 90,626,149 Cost of sales and services rendered 45 (83,433,077) (90,033,414) 911,910 592,735
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) 0 Difference in foreign exchange rates Net profit (loss) from investments 36 5,358,720 7,414,572
Net profit (loss) from foreign currency exchanges and transactions 46 6,492,360 3,930,890 ) ) Other operating incomes 0 0
33,402 33,402 0 0 581,569 581,569 0 ( 0 0 0 0 0 ( 0 0 0 0 0 0 0 614,971 0 Rls(m) 0 Total operating incomes 2,552,951 (2,492,075) Assets revaluation reserve
Net other incomes and expenses 47 10,716,883 9,965,319 Administrative and general expenses 48 (6,928,003) (5,478,955)
Expenses for doubtful debts 49 (300,000) (1,200,000) 0 0 3,528,218 0 3,528,218 0 0 0 0 0 3,528,218 0 0 0 0 0 0 0 0 0 0 Rls(m) 0 Other reserves Financial expenses 50 (2,234) (8,301)
2018 - 2019
Deprecciation/amortization expenses 51 (537,770) (543,474) Profit before calculating group share from incomes earned by affiliates 5,501,827 242,514
0 0 2,507,876 1,732,402 775,474 0 0 0 0 0 0 0 775,474 0 0 0 0 0 0 1,732,402 0 Rls(m) 0 Group share from incomes earned by affiliates 13 (43,169) (19,197) Legal reserve Profit (loss) before income tax 5,458,658 223,317 Income tax of the year 26 (140,588) (101,805) ) ) )
9 9 Income tax of previous years 0 0 9 0 0 ( ( 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 ( 0 Rls(m) 0 Parent company's shares held by subsidiaries Total income tax (140,588) (101,805) Net profit (loss) 5,318,070 121,512 Minority interest from net profit 39,705 35,393
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) 0 Earnings per share (EPS) (Rls) 57 Shares premium reserve Basic earnings per share (Rls) 660 11
Diluted earnings per share (Rls). 660 11
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) 0 Ongoing capital increase
Consolidated Comprehensive statement of profit & Loss For the fiscal year ended March 20, 2019
0 0 8,000,000 8,000,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 8,000,000 0 Rls(m) 0 Capital
Year ended Year ended Note March 20, 2019 March 20, 2018 24 32 31 52 Note Rls(m) Rls(m) Net Group Profit (Loss) 5,278,366 86,118 Assets revaluation reserve 33 0 (892,177) Difference in exchange rates for foreign transactions 0 0 Comprehensive income for fiscal year 5,278,366 (806,059) Prior years' adjustments 52 (921,843) (308,808) Consolidated adjustments 15,679 85,769
Comprehensive income recognized from reporting date of previous fiscal year 4,372,202 (1,029,098) Increase in unregistered capital Capital increase Increase in registered capital Balance as at March 20, 2019 Total comprehensive incomes Total other comprehensive incomes Approved dividend Tax for other comprehensive incomes Dividend per share Difference in foreign exchange rates Other reserves Other comprehensive incomes (losses) after tax deduction Assets revaluation reserve Distribution and allocation Legal reserve Consolidated adjustments Sale of shares Prior years' adjustments Purchase of shares Net profit Sale of treasury shares Balance as at March 21, 2018 Purchase of treasury shares The accompanying explanatory notes are an integral part of these financial statements. Parent company's shares held by subsidiaries Treasury shares Consolidated statement of changes in shareholders' equity For the fiscal year ended March 20, 2019
60 Annual Report 61
) ) ) Consolidated statement of cash flows For the fiscal year ended March 20, 2019
(restated)
892,177 892,177 308,808 Operating activities 2019 2018 0 0 8,352,780 ( 8,352,780 0 0 0 0 0 ( 0 85,770 0 ( 0 86,118 0 9,381,877 0 Rls(m) 0 Total areholders' equity Rls(m) Rls(m) Cash received for Interest and late payment penalty on loans granted 4,906,413 1,585,530
Interest on debt securities 131,918 31,304 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) 0 Treasury shares Fees and commissions 2,392,080 1,640,633 ) ) ) ) ) ) Interest on placements in other banks 1,805,313 1,422,354
Profit from investments 5,672,646 7,841,881 Other operating incomes 3,673,854 1,535,073
1,994,584 1,840,243 154,341 154,341 308,808 1,703,323 0 0 ( 0 ( 0 ( 0 0 0 0 85,770 ( ( 0 86,118 0 ( 0 Rls(m) 0 Retained profit (loss) Other incomes 3,991,533 901,547 Cash payment for 0 0 Interest on deposits (36,851,249) (33,822,475) Fees and commissions (2,485,648) (1,951,868)
Other operating expenses (48,682) (46,544) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) 0 Difference in foreign exchange rates Financial expenses (6,687,785) (5,492,918)
) ) Income tax (89,564) (118,825)
Net cash (outflow) inflow from operating activities (23,589,171) (26,474,308) before changes in operating assets and liabilities
892,177 892,177 0 0 614,971 ( 614,971 0 0 0 0 0 ( 0 0 0 0 0 0 0 1,507,148 0 Rls(m) 0 Assets revaluation reserve Cash flows from changes in operating assets and liabilities Net increase (decrease) in liabilities Due to banks and other credit institutions 82,882,696 (743,280) Customers' deposits 41,105,349 9,137,191
Debt securities 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) 0 Other reserves Operating portion of provisions and other liabilities 3,497,898 5,185,685
2017 - 2018 Investment depositors' equity 44,393,709 39,529,204
Net (increase) decrease in assets 0 0 Due from banks and other cerdit institutions 719,643 (1,008,603)
0 0 1,578,061 0 1,732,402 0 154,341 0 0 0 0 0 0 154,341 0 0 0 0 1,578,061 0 Rls(m) 0 Legal reserve 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 (12,779,437) 6,551,920 Investment in shares and other securities (4,834,727) (12,704,094) ) ) )
9 9 9 0 0 ( 0 ( 0 0 0 0 0 0 0 0 0 0 0 0 0 ( 0 Rls(m) 0 Parent company's shares held by subsidiaries Due from subsidiaries and affiliates 500,510 (125,909) Other accounts receivable (8,696,464) (16,372,287) Statutory deposit (8,230,980) (4,442,881) Operating portion of other assets 1,839,743 2,674,893 Cash flows from changes in operating assets and liabilities 140,397,940 27,681,839
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) 0 Shares premium reserve Net cash inflow (outflow) from operating activities 116,808,769 1,207,531 Investing activities Funds paid for acquisition of tangible fixed assets (2,475,256) (858,851) Proceeds received from sale of tangible fixed assets 295,799 706,312
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) 0 Ongoing capital increase Funds paid for acquisition of intangible assets (2,915,285) (467,295) Proceeds received for sale of intangible assets 49,313 1,740,310
Funds paid for acquisition of non-operating real estates 0 0 Proceeds received for sale of non-operating real-estates 0 0
Net cash (outflow) from investing activities 1,120,476
(5,045,429)
0 0 8,000,000 0 8,000,000 0 0 0 0 0 0 0 0 0 0 0 0 0 8,000,000 0 Rls(m) 0 Capital Net cash outflow before financing activities 111,763,340 2,328,007 Financing activities Cash from capital increase 169,990 0 24 32 31 52 Note Treasury shares transactions 0 0 Funds from shares premium 0 0 Financial facilities received (373,595) (165,666) Repayment of principal financial facilities 25,188,228 15,905,367 Dividends paid (25,119,783) (15,591,641) Net cash inflow (outflow) from financing activities (135,160) 148,060 Net cash increase (decrease) 111,628,180 2,476,067 Cash at the beginning of the year 36,593,485 31,701,765 Effects of changes in forex exchange rates 2,747,944 2,415,653 Cash at year end 150,969,609 36,593,485 Non-cash transactions 10,827,967 18,374,645 Increase in unregistered capital Capital increase Increase in registered capital Total comprehensive incomes Total other comprehensive incomes Balance as at March 20, 2018 Tax for other comprehensive incomes Approved dividend Difference in foreign exchange rates Dividend per share Other comprehensive incomes (losses) after tax deduction Assets revaluation reserve Other reserves Consolidated adjustments Distribution and allocation Legal reserve Prior years' adjustments Sale of shares Net profit Purchase of shares Balance as at March 20, 2017 Sale of treasury shares Parent company's shares held by subsidiaries Treasury shares Purchase of treasury shares The accompanying explanatory notes are an integral part of these financial statements.
62 Annual Report 63 Saman Bank (Public Joint Stock Company) Balance sheet of the Parent Company or the fiscal year ended March 20, 2019 (restated) (restated) Note March 20, 2019 March 20, 2018 Liabilities and shareholders' equity Note March 20, 2019 March 20, 2018 Rls(m) Rls(m) Rls(m) Rls(m) Assets Liabilities Cash 9 148,681,746 36,749,077 Due to banks and other credit istitutions 22 91,897,010 9,014,314 Due from banks and other credit institutions 10 9,955,293 10,687,731 Customers' deposits 23 65,532,014 26,399,333 Due from government 0 0 Dividends payable 24 51,510 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 11 169,473,517 137,136,638 Provision for corporation tax 26 0 0 Investments in shares and other securities 12 18,292,591 13,435,948 Provisions and other liabilities 27 8,692,291 8,469,046 Due from subsidiaries and affiliates 14 2,428,333 2,928,844 Provisions for employees' termination and pension benefits 28 946,079 691,032 Other accounts receivable 15 48,560,024 40,359,781 Total liabilities before investment depositors' equity 167,118,904 44,625,235 Tangible fixed assets 18 4,551,267 2,972,625 Investment depositors' equity 29 298,775,962 254,382,253 Intangible assets 19 4,952,329 2,216,341 Total liabilities 465,894,866 299,007,488 Statutory deposit 20 35,798,262 27,478,565 Shareholders' equity Other assets 21 38,755,778 35,452,920 Share capital 30 8,000,000 8,000,000 Ongoing capital increase 0 0 Shares premium reserve 0 0 Legal reserve 31 2,460,818 1,689,324 Other reserves 32 3,528,218 0 Assets revaluation reserve 33 581,569 614,971 Difference in foreign exchange rates 0 0 Retained profit (loss) 983,669 106,687 Treasury shares 0 0 Total shareholders' equity 15,554,274 10,410,982 Total liabilities and shareholders' equity 481,449,140 309,418,470 Total assets 481,449,140 309,418,470 Bank's obligations for LCs 55-1 4,041,632 7,719,819 Customers' obligations for LCs 55-1 4,041,632 7,719,819 Bank's obligations for LGs issued 55-2 14,387,047 9,870,529 Customers' obligations for LGs issued 55-2 14,387,047 9,870,529 Bank's other obligations 55-3 46,410,920 28,847,484 Customers' other obligations 55-3 46,410,920 28,847,484 Managed funds and similar items 55-4 473,099 1,246,146 Managed funds and similar items 55-4 473,099 1,246,146
64 Annual Report 65 Statement of the investment deposits performance of parent company For the Comprehensive statement of profit & Loss of the parent company For the fiscal fiscal year ended March 20, 2019 year ended March 20, 2019
Note 2019 2018 Year ended Year ended March Note Rls(m) Rls(m) March 20, 2019 20, 2018 Profit sharing incomes Rls(m) Rls(m) Income from loans granted 35 23,500,796 17,902,175 Net profit (loss) 5,143,292 318,366 Income from placements in other banks and debt securities 35-2 1,831,414 1,073,527 Assets revaluation reserve 33 0 (892,177) Net profit (loss) from investments 36 5,664,472 7,838,581 Difference in exchange rates for foreign transactions 0 0 Total profit-sharing incomes 30,996,682 26,814,283 Comprehensive income for fiscal year 5,143,292 (573,811) Bank's share from profit-sharing incomes 37-1 0 0 Prior years' adjustments 52 (920,303) (220,303) Depositors' share from profit-sharing incomes before fees reduction 30,996,682 26,814,283 Comprehensive income recognized from the reporting date of previous fiscal year 4,222,989 (794,114) Deposits management fee 38 (4,944,595) (3,931,454) Depositors' share from profit-sharing incomes 26,052,087 22,882,829 Interest on statutory deposit/investment deposits 37-3 283,706 232,707
Compensation of expenses related to depositors' free resource surplus 39 9,944,442 10,028,495 to profit-sharing uses
Final interest accrued on investment deposits 36,280,235 33,144,031 Provisional interest paid on investment deposits 39 (36,461,701) (33,379,523) Differential in interests payable (surplus of interest paid) to depositors (181,466) (235,492)
Statement of profit & Loss of the parent company For the fiscal year ended March 20, 2019 (restated) Note 2019 2018 Rls(m) Rls(m) Income from loans granted and placements in other banks and debt securities 35 26,642,537 19,579,880 Interest expenses on deposits 41 (36,851,249) (33,822,475) Net income from loan interests and placements in other banks (10,208,712) (14,242,595) Fee and commission incomes 42 2,392,080 1,640,633 Fee and commission expenses 43 (2,485,648) (1,951,868) Net incomes from fees and commissions (93,568) (311,235) Net profit (loss) from investments 36 5,664,472 7,838,581 Net profit (loss) from foreign currency exchanges and transactions 46 6,416,611 3,949,737 Other operating incomes 0 0 Total operating incomes 1,778,803 (2,765,512) Net other incomes and expenses 47 10,711,905 9,955,090 Administrative and general expenses 48 (6,505,564) (5,146,638) Expenses for doubtful debts 49 (300,000) (1,200,000) Financial expenses 50 0 0 Deprecciation/amortization expenses 51 (541,852) (524,574) Profit (loss) before income tax 5,143,292 318,366 Income tax of the year 27 0 0 Income tax of previous years 0 0 Total income tax 0 0 Net profit (loss) 5,143,292 318,366 Earnings per share (EPS) - (Rls) 57 Basic earnings per share (Rls) 643 40 Diluled earnings per share (Rls) 643 40
The accompanying explanatory notes are an integral part of these financial statements. The accompanying explanatory notes are an integral part of these financial statements.
66 Annual Report 67
) ) ) )
794,114 892,177 920,303 220,303 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10,410,982 15,554,274 4,222,989 ( 0 0 0 0 0 ( ( ( 5,143,292 318,366 11,331,285 11,205,096 Rls(m) Rls(m) 10,410,982 15,554,274 Total hareholders' equity Total hareholders' equity 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) Rls(m) 0 0 Treasury shares Treasury shares 0 0 ) )
) ) ) ) )
3,528,218 152,755 771,494 920,303 220,303 152,755 4,299,712 ( 0 0 0 0 0 ( ( ( 0 0 0 0 0 0 0 0 5,283,381 259,442 4,256,391 98,063 0 0 0 0 33,402 0 ( ( 5,143,292 318,366 1,026,990 161,379 Rls(m) Rls(m) 106,687 983,669 Retained profit (loss) Retained profit (loss) (
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) Rls(m) 0 0 Difference in foreign exchange rates Difference in foreign exchange rates 0
) )
) )
33,402 892,177 33,402 892,177 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 581,569 614,971 ( ( 0 0 0 0 ( ( 0 0 0 0 614,971 1,507,148 Rls(m) Rls(m) 614,971 581,569 Assets revaluation reserve Assets revaluation reserve
2018 - 2019 2017 - 2018
0 3,528,218 0 0 0 0 0 3,528,218 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) Rls(m) 0 3,528,218 Other reserves Other reserves
152,755 771,494 0 0 0 0 0 0 152,755 771,494 0 0 0 0 0 0 0 0 1,689,324 1,536,569 0 0 0 0 0 0 0 0 0 0 0 0 1,689,324 1,536,569 Rls(m) Rls(m) 1,689,324 2,460,818 Legal reserve Legal reserve
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) Rls(m) 0 0 Shares premium reserve Shares premium reserve
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) Rls(m) 0 0 Ongoing capital increase Ongoing capital increase
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 8,000,000 8,000,000 0 0 0 0 0 0 0 0 0 0 0 0 8,000,000 8,000,000 Rls(m) Rls(m) 8,000,000 8,000,000 Capital Capital 24 24 32 32 31 31 52 52 Note Note Approved dividend Approved dividend Dividend per share Dividend per share Other reserves Other reserves Distribution and allocation Legal reserve Distribution and allocation Legal reserve Sale of treasury shares Sale of treasury shares Treasury shares Purchase of treasury shares Treasury shares Purchase of treasury shares Increase in unregistered capital Increase in unregistered capital Capital increase Increase in registered capital Capital increase Increase in registered capital Total comprehensive incomes Total comprehensive incomes Total other comprehensive incomes Total other comprehensive incomes Tax for other comprehensive incomes Tax for other comprehensive incomes Difference in foreign exchange rates Difference in foreign exchange rates Other comprehensive incomes (losses) after tax deduction Assets revaluation reserve Other comprehensive incomes (losses) after tax deduction Assets revaluation reserve Prior years' adjustments Prior years' adjustments Net profit Net profit Balance as at March 21, 2018 Balance as at March 21, 2017 Balance as at March 20, 2018 Balance as at March 20, 2019 Statement of changes in shareholders' equity for the fiscal year ended March 20, 2019
68 Annual Report 69 Statement of cash flows for the parent company For the fiscal year ended Explanatory notes to the financial statements For the fiscal year ended March 20, 2019 March 20, 2019 (restated) Operating activities 2019 2018 1- Introduction of the Bank Rls(m) Rls(m) Cash received for 1-1- Background Interest and late payment penalty on loans granted 4,906,413 1,585,530 Interest on debt securities 131,918 31,304 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 Fees and commissions 2,392,080 1,640,633 registered with Tehran Department of Companies and Non-Commercial Entities Registration under No. 154444 Interest on placements in other banks 1,875,012 1,324,689 on September 1, 2009 and was listed with Tehran Stock Exchange/Iran Farabourse on November 16, 2011. Thus, Profit from investments 5,664,472 7,838,581 the Bank has been put on the official list of prices which prevail on Tehran Stock Exchange/Iran Farabourse since Other operating incomes 3,673,854 1,535,073 June 6, 2012. The Bank is headquartered in Tehran, of No. 1543, Tarkeshdouz St., Parkway Intersection, Vali-asr Other incomes 3,245,453 380,997 Ave., Tehran, Iran. The Bank’s Economic Code is 4111-1166-8595. Cash payment for 0 0 Interest on deposits (36,851,249) (33,822,475) 1-2- Bank’s main activities Fees and commissions (2,485,648) (1,951,868) Other operating expenses 0 0 The Bank has been licensed with the main objectives of performing authorized banking operations and activities Financial expenses (6,687,785) (6,192,918) (operations and transactions which are not prohibited for banks under the prevalent rules) under article 3 of Income tax 0 (4,460) the Articles of Association/Constitution and in accordance with the regulation No. 92/377538 of March 13, 2014 Net cash outflow from operating activities (24,135,480) (27,634,914) as approved by the Central Bank of I. R. of Iran. By extension, the bank’s main activities include: open various before changes in operating assets and liabilities accounts such as savings accounts, free-interest deposit accounts, short-term or long-term investment deposit Cash flows from changes in operating assets and liabilities accounts; issue various banking credit cards or other authorized cards and other similar accounts; receive Net increase (decrease) in liabilities facilities and credit lines; grant loans in the form of applicable contracts and agreements; make fund transfers; Due to banks and other credit institutions 82,882,696 (743,280) conduct all transactions or foreign exchange transfers/money orders; open letters of credit and carry out all 39,132,681 9,336,821 Customers' deposits related affairs; issue banking letters of guarantee and certificates of deposit; trade (buy and sell) participation Debt securities 0 0 bonds and other securities; conduct all operations related to purchase and sale of shares; safe custody services; Operating portion of provisions and other liabilities 223,245 3,902,189 carry out transactions in gold and silver; act as a broker or agent for participation bonds and for interbank Investment depositors' equity 44,393,709 39,529,204 Net (increase) decrease in assets 0 0 operations and other credit institutions; provide insurance coverage for banking affairs; cash management for Due from banks and other cerdit institutions 732,438 (1,011,701) customers; open branches and expand the banking network inside and outside the country; and overall to conduct Principal amounts due from the government 0 0 and carry out all operations and activities in line with the objectives set and defined for the bank in the context of Principal loans granted to and amounts due from governmental entities 0 0 the prevalent rules and regulations.. Principal loans granted to and amounts due from non-governmental entities (12,779,437) 7,251,920 Investment in shares and other securities (4,856,643) (10,658,155) 1-3- Number of Branches Due from subsidiaries and affiliates 500,510 (125,909) Other accounts receivable (8,200,243) (16,496,345) The number of branches during the year is listed below: Statutory deposit (8,010,677) (4,442,881) Operating portion of other assets 4,163,594 2,625,214 2019 2018 Cash flows from changes in operating assets and liabilities 138,181,873 29,167,077 Year end Average Year end Average Net cash inflow (outflow) from operating activities 114,046,393 1,532,163 Branches in Tehran province 83 83 83 83 Investing activities Branches in other provinces 51 51 51 51 Funds paid for acquisition of tangible fixed assets (2,290,229) (670,897) Proceeds received from sale of tangible fixed assets 295,799 704,742 Branches in free zones 2 2 2 2 Funds paid for acquisition of non-operating real estates (2,911,365) (465,660) Overseas branches 0 0 0 0 Proceeds received from sale of non-operating real-estates 49,313 1,740,325 136 136 136 136 Funds paid for acquisition of intangible assets 0 0 Proceeds received from sale of intangible assets 0 0 • Average means, the monthly average of the reporting period. Net cash (outflow) from investing activities (4,856,482) 1,308,510 Net cash outflow before financing activities 109,189,911 2,840,673 Financing activities Cash from capital increase 0 0 1-4- Employment status Treasury shares transactions 0 0 The number of bank’s employees (headcount) during the fiscal year was as follows: Funds from shares premium 0 0 Financial facilities received 0 (973) Group Parent Company Repayment of principal financial facilities 8,495,000 7,500,000 Repayment of principal financial facilities (8,495,000) (7,500,000) 2019 2018 2019 2018 Dividends paid 0 0 Year end Year end Year end Average Year end Average (973) Net cash inflow (outflow) from financing activities 0 Central headquarters and district head offices 1,602 1,595 826 801 785 783 Net cash increase (decrease) 109,189,911 2,839,700 Branches in Tehran Province 1,052 1,025 1,052 1,039 1,025 1,014 Cash at the beginning of the year 36,749,078 31,494,714 Branches in other provinces 585 577 580 580 577 575 Effects of changes in forex exchange rates 2,742,757 2,414,664 Branches in free zones 32 32 33 32 32 32 Cash at year end 148,681,746 36,749,077 Non-cash transactions 10,827,967 18,374,645 Overseas branches 0 0 0 0 3,271 3,229 2,491 2,452 2,419 2,404
The accompanying explanatory notes are an integral part of these financial statements. • Average means, the monthly average of the reporting period.
70 Annual Report 71 2- Basis of preparing financial statements 8- Summary of significant accounting policies 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 8-1- Investments the changes made during the year have been defined in notes 5 and 6. 8-1-1- Method of valuation 3- Basis of consolidation Long-term investments are valuated at cost price upon deduction of any accumulated loss in each item of investment and the current quickly marketable investments are valuated at market price and other current 3-1- The bank consolidated financial statements aggregate the assets and liabilities of the bank and of the investments are valuated at net sales value of each item of investment. subsidiaries qualifying for consolidation upon elimination of inter-group transactions and balances as well as the unrealized profit and loss from intergroup transactions. 8-1-2- Method of income recognition 3-2- As to the acquisition of subsidiaries during the given period, the results of their operations are consolidated The incomes earned from investments in subsidiary and affiliated companies are recognized at the time of as of the date they are effectively controlled by the bank. As regards the subsidiaries transferred to the approving dividends by the investee company shareholders’ general meeting (until the approval date of financial bank, the results of their operations are consolidated until the date of their possession. statements) and the incomes earned from other long-term and current investments are recognized at the time 3-3- The bank shares acquired by the subsidiaries are recorded at cost price in their accounts. Such shares of approving dividends by the investee company’s shareholders’ general meeting (until the balance sheet date). are entered in accounts and reflected in the consolidated balance sheet as a declining element of the shareholders’ equity and reflected in the financial statements under the heading of “parent company’s 8-2- Tangible Fixed Assets shares held by subsidiaries”. 8-2-1- Except for land and buildings, the tangible fixed assets are recorded in accounts on the basis of cost. 3-4- The fiscal year of subsidiaries ends on December 21 of each year and their operations are consolidated in The expenditures incurred for renovation and major repairs that will substantially increase the capacity or the the same manner. Nonetheless, in the case any event occurs up to the reporting date of the bank’s financial useful life of fixed assets or will fundamentally improve the output quality are regarded as capital expenditures statements which might substantially affect the consolidated financial statements in their entirety, the and will be depreciated/amortized over the remaining useful life of related assets. The expenditures incurred effects thereto will be reflected in accounts by making the required adjustments in the items of the financial for minor repairs and maintenance out of the assets initial valuated performance standards for the purpose of statements of subsidiaries. protection or recovery of the expected economic benefits of commercial unit are regarded as current expenses at the time of occurrence and recorded in the profit and loss account of the given period. 3-5- Atieh Alborz Company was not consolidated in the financial statements of the fiscal year ending March 20, 2017 and March 20, 2018, due to its lack of operations or a future plan to be either transferred or dissolved. 8-2-2- Depreciations of tangible fixed assets are calculated and recorded in accounts under the provisions The adjustments so required have been made in the financial statements. of the Depreciation Rules under article 151 of Direct Taxation Law and on the basis of the following rates and methods: 3-6- Upon the launch of Atieh Andishan Sepehr Shargh Company business activities during the fiscal year ending March 20, 2017, this company’s operations were also reflected in the bank’s consolidated financial Type of asset Depreciation rate Depreciation method statements. Buildings and installations 6 & 25% Straight line Furniture, fixtures, computer hardware and devices 3, 5 & 10 years Straight line 4- Operating and reporting currency unit Motor vehicles 6 years Straight line The items in the financial statements have been measured by using Rial as the currency unit in the main economic POS terminals 5 years Straight line environment where Saman Bank has been operating. Such items have been presented in Iranian million rials ATM machines 5 years Straight line (shortened to Rls. M.) for better understanding and comprehension unless otherwise expressly stated in financial statements and/or in the relevant explanatory notes. Technical equipment, satellite and hub 3 & 5 years Straight line Costs for branch improvement and refurbishments 3 years Straight line 5- Using judgment and estimates Tools 6 years Straight line 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 For the fixed assets acquired and used during the month, depreciation will be calculated at the time of actual results may vary from such estimates. However, the estimates and assumptions are based on historical 8-2-3- purchase and recorded in accounts. When each item of depreciable assets, upon availability for operation is not records and the management board will continuously review them by comparing with actual events. utilized for some time on the grounds of work stoppage or shut-down, the rate of depreciation for such period 5-1- In preparing the bank financial statements, no particular judgment and estimate have been used. will be equivalent to 30% of the rate which has been reflected in the above-mentioned table.
6- Basis for measurement 8-3- Intangible assets 8-3-1- Intangible assets except for goodwill of business place are entered in accounts at cost. The goodwill Except for the material cases, the financial statements have been prepared on the basis of the historical cost price. of business place will not be depreciated. However, upon a value impairment test at the end of each financial However, for certain fixed assets including land, buildings thereon, and goodwill, the basis of revaluation method year, the required provision will be calculated if it is deemed necessary. Computer software packages used adopted by independent experts or appraisers has been applied. for operational and administrative purposes are depreciated on a straight line basis over 3 years. For other intangible assets no depreciation/amortization is computed. 7- Change in accounting procedures 8-4- Recognizing incomes from the loan facilities granted, fees and late payment 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. penalties On the strength of the resolution adopted by the Money and Credit Council at its 1044 session of July 16, 2005 which 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 No. 94/258020 of November 30, 2015 no accrual income has been recognized for the category of doubtful debts. Thus on the basis of the accrual system, the method of recognizing the bank’s incomes is described as follows:
72 Annual Report 73 Income and late penalties on loans granted and fees Method of recognition 3- The loans with the expiry of 5 years or more from their maturity for repayment of the principal amounts and Interest on loans granted interests thereto are required to have 100% specific provision (without considering the value of collaterals). Current Accrual / Cash The management has not passed any judgment on the financial statements beyond the context of the foregoing Overdue Accrual / Cash directive. Outstanding Accrual / Cash Doubtful Accrual / Cash 8-7- Provision for employees’ termination benefits Late payment penalties The employees’ termination benefits are calculated and entered in accounts on the basis of the last month’s fixed Current Accrual / Cash salary and regular benefits for each year of their service records. Overdue Accrual / Cash Outstanding Accrual / Cash 8-8- Provision for employees’ pension benefits Doubtful Cash The bank’s employees are under the social security coverage and thus no provision for their retirement pension Commission Fees has been entered in accounts. Commission fees from LGs issued Cash Commission fees from other banking services Cash 8-9- Foreign currency translation Commission fees from loans granted on interest-free accounts Accrual / Cash 8-9-1- Country-wide domestic accounts Monetary items in foreign currency are translated at the official exchange rate (as announced by the Central In applying the provisions of the Usury-Free Banking Law ratified on August 30, 1983 and the executive regulations Bank of Iran (CBI)) at the balance sheet date and non-monetary items recorded in foreign currency at historical and by-laws thereto and in view of the directive No. 94/69643 of June 10, 2015 issued by the Central Bank of of cost are translated at the official rate prevailing on the date the transaction is conducted. The differences Iran (CBI), the profit-sharing income, uses of shared resources and depositors’ share from the profit-sharing arising out of settlement or translation of foreign currency monetary items are recognized as income or income should be calculated and the results thereof should be reported in the statement of investment deposits expense for the given period and then entered in the profit and loss statement. performance. 8-9-2- Offshore banking transactions accounts 8-5- Classification of loans granted (loan portfolios) The assets and liabilities of overseas branches are translated at foreign exchange rate at the balance sheet date Pursuant to the Directive for Classification of Assets Owned by Credit Institutions adopted by the Money and Credit and the incomes and related expenses are translated at the foreign exchange rate prevailing on the transaction Council (subject of the directive No. MB/2823 of February 25, 2007 issued by the Central Bank of of Iran (CBI)) date. All differences resulting from such translations are recognized in the statement of comprehensive profit and with regard to time factors and delay in payments as described below, the customers’ financial situation and and loss and are classified under the heading of “shareholders’ equity” in the balance sheet. Additionally, the status of related industry, the loan facilities granted by the bank shall be evaluated and classified into one of the differences in translation of monetary items which inherently form a portion of net investment in offshore banking following four categories: 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 transferred. 1- Current category (maximum up to 2 months as of the maturity date and/or the date of payment interruption). 2- Overdue category (2 to 6 months as of the maturity date and/or the date of payment interruption) 8-10- Goodwill 3- Outstanding category (6 to 18 months as of the maturity date and/or the date of payment interruption) The accounting policy for acquisition of units will take place on the basis of purchase method. The surplus cost of acquiring investment in subsidiaries qualified for consolidation and in affiliated companies qualified for the 4- Doubtful category (over 18 months as of the maturity date and/or the date of payment interruption) application of special worth method for group shares is recognized as goodwill out of the fair net value of their • The management has not passed any judgment on the financial statements beyond the context of the recognizable assets at the time of acquisition and will be amortized over 10 years. The goodwill derived from aforesaid directive. acquisition of affiliates will be recorded in the consolidated balance sheet as part of the book value for long-term investments in the affiliated companies. 8-6- Provision for doubtful debts 8-11- Treasury stock/shares 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 Under the provision of the Law Governing the Removal of Competitive Production Barriers and Enhancement Central Bank of of Iran (CBI)), provisions for the loan facilities granted are to be calculated and entered in accounts of Financial System and on the strength of the executive regulations adopted by the Securities and Exchange as follows: Organization High Council, the bank shall be allowed to hold10 percent of its own shares. The treasury shares are to be reported on the basis of cost price on the acquisition date. Any type of differential resulting from purchase 1. General provision which is equivalent to one and half (1.5%) percent of the total loans balance will be and sale of treasury shares is reflected in the shareholders’ equity section. calculated at the end of each year except for the balance of the loans for which specific provision has been calculated. 8-12-“Other items” in the notes to financial statements 2. Specific provision relative to the balances of overdue, outstanding and doubtful accounts will be calculated Considering the number of items used for certain accounts, some items in every note have been reported under as described below after deduction of the updated value of collaterals in each loan category by exercising the the heading of “Other”. The items which are entered in accounts under the title of “other” include insignificant or predetermined rates: less important items in terms of content and may be up to 10% of the total amount which come under such note. Notably, the number of items under this heading has also been disclosed.
Loan category Rate Percentage Overdue loans 10 Outstanding loans 20 Doubtful loans (based on the evaluation of the customer’s repayment capability) 50-100
74 Annual Report 75 9- Cash 10- Due from banks and credit institutions
Group Parent Company Group Parent Company Note 2019 2018 2019 2018 Note 2019 2018 2019 2018 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Cash in hand (Rial) 1,628,421 1,765,896 1,628,069 1,765,004 Due from CBI 10-2 7,395,566 7,471,674 7,395,567 7,471,674 Cash in hand (Forex) 9-2 3,093,896 1,267,104 2,830,807 1,181,209 Due from other banks and credit institutions 10-3 2,943,373 3,212,073 2,559,726 3,216,057 Foreign currencies placed with brokers 1,345,752 786,982 0 0 10,338,939 10,683,747 9,955,293 10,687,731 Cash in transit (Rial) 3,400 200 400 200 Cash in transit (Forex) 0 0 0 0 Demand deposits placed with CBI 9-3 412,377 3,886,993 412,377 3,886,993 (unrestricted) 10-1- The placements in other banks which do not have restrictions on their withdrawal have been classified Placements in other banks and 9-4 144,485,763 28,886,310 143,810,093 29,915,671 under the heading of “cash”. credit institutions (unrestricted) 150,969,609 36,593,485 148,681,746 36,749,077 10-2- Due from Central Bank of Iran (CBI)
Group Parent Company 9-1- The cash amounts in rials and foreign currencies placed with the Saman bank branches up to the limit of Rls. 9, 624, 110/- million have been put under sufficient insurance coverage against possible accidents and Note 2019 2018 2019 2018 risks arising from theft and fire. Rls(m) Rls(m) Rls(m) Rls(m) 9-2- The cash foreign currencies owned by the parent company include: 45,253,576.27 USD, 18,838,006.27 Euros, Demand deposits with CBI (Rial) (restricted) 0 0 0 0 51,454 UK Pounds, 2,576,590.50 Dirhams and 4,615/- Turkish Liras. Demand deposits with CBI (Forex) (restricted) 0 0 0 0 Demand deposits with Central Banks of 0 0 0 0 9-3- The demand deposits placed with the Central Bank of Iran (CBI) (unrestricted) other countries (restricted)
Interest receivable on statutory deposit 0 0 0 0 2019 2018 Other amounts due (3 items) 10-2-1 7,395,566 7,471,674 7,395,567 7,471,674 Rls(m) Rls(m) 7,395,566 7,471,674 7,395,567 7,471,674 Demand deposits with CBI (Rial) (unrestricted) 15,593 3,743,588 Demand deposits with CBI (Forex) (unrestricted) 396,784 143,405 Demand deposits with Central Banks of other countries (unrestricted) 0 0 10-2-1- The balance of this account amounting to Rls. 7,395,487/- million is related to the forward purchase of 412,377 3,886,993 forex from the Central Bank of of Iran(CBI) for letters of credit under the directive No. M 60/1015 of December 7, 2013 issued by the CBI and breaks down as follows:
9-4- The placements in other banks and credit institutions (unrestricted) 2019 Reference exchange rate Official exchange rate Total
Type of Exchange Amount in Exchange Amount in Exchange Amount in Group Parent Company Forex amount Forex amount Forex amount Currency rate Rials rate Rials rate Rials 2019 2018 2019 2018 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Euro 62,716,454.42 47,658 2,988,941 37,188,557.46 47,658 1,772,332 99,905,011.88 47,658 4,761,273 Demand deposits with other local banks and credit institutions (Rial) 718,814 198,449 211,683 133,689 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 (unrestricted) Chinese Yuan 0 6,255 0 24,142,410.16 6,255 151,011 24,142,410.16 6,255 151,011 Term deposits with other local banks and credit institutions (Rial) 1,096,698 310,410 2,568,596 1,421,414 (unrestricted) S. Korean Won 52,416,788,566 37 1,947,598 3,060,739,620.99 37 113,725 55,477,528,186.99 37 2,061,323 Turkish Lira 78,719.68 7,684 605 0 7,684 0 78,719.68 7,684 605 Demand deposits with foreign banks (Forex) (unrestricted) 14,976,683 2,759,921 14,340,451 2,568,074 5,329,098 2,066,389 7,395,487 Term deposits with other local banks and credit institutions (Forex) 131,845 0 0 0 (unrestricted) Term deposits with foreign banks (Forex) (unrestricted) 127,560,303 24,696,726 126,557,518 24,948,395 Demand deposits with other local banks and credit institutions (Forex) It is further added that owing to the follow-up actions by the bank management and until the issuance date of the 1,420 920,804 131,845 844,099 (unrestricted) 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 144,485,763 28,886,310 143,810,093 29,915,671 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 demand, 9-5- The placements in other banks which have restrictions on their withdrawal (in terms of time and other Sokhane-hagh Auditing Services and Institute performed an audit as requested by CBI and then Saman Bank restrictions) have been classified under the heading of “Due from banks”. 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.
76 Annual Report 77 Amounts in dollar 10-3-1- Other amounts related to the claims from Saderat Bank and Pasargad Bank break down as follows:
Amount requested by Data entered by Saman bank on website of Exchange rate Saman bank under Statistics Information Department Balance of receivables Post-control letter no. obligations 2019 2018 013678/M/92/210 Total registered Due from CBI Interest of February 2014 ,25 Type of Type of Forex amount Name of bank rate Maturity Type of collateral Rls(m) Rls(m) currency contract (percentage) amount Reference exchange rate (subsidized) 462,679,859 750,600,608 563,176,118 301,954,123 Amounts in rial Official exchange rate 140,214,008 170,080,338 150,154,772 43,187,252 Factoring Saderat Rial 21 April 2011 ,23 LC documents 0 0 275,317 Free market rate 0 0 0 18,100,244 (discount) Exchange rate for opening LCs 0 955,547 461,132 0 Factoring Saderat Rial 21 April 2011 ,27 LC documents 0 0 300,300 602,893,867 921,636,493 713,792,022 363,241,619 (discount) Factoring Saderat Rial 21 August 2011 ,1 LC documents 0 0 261,215 (discount) Factoring Saderat Rial 21 June 2011 ,28 LC documents 0 0 260,971 10-3- Due from other banks and credit institutions (discount) Factoring Saderat Rial 21 June 2011 ,28 LC documents 0 242,400 242,400 Group Parent Company (discount) Note 2019 2018 2019 2018 Factoring Saderat Rial 21 April 2011 ,25 LC documents 0 0 50,370 (discount) Rls(m) Rls(m) Rls(m) Rls(m) Factoring Demand deposits with other local banks Saderat Rial 21 May 2011 ,24 LC documents 0 0 240,388 0 0 0 0 (discount) and credit institutions (Rial) (restricted) Factoring Demand deposits with other local banks Saderat Rial 21 May 2011 ,10 LC documents 0 0 274,709 0 0 0 0 (discount) and credit institutions (Forex) (restricted) Factoring Term deposits with other local banks Saderat Rial 21 May 2011 ,10 LC documents 0 0 0 0 0 0 0 (discount) and credit institutions (Rial) (restricted) Factoring Term deposits with other local banks Saderat Rial 21 May 2011 ,4 LC documents 0 0 0 0 0 0 0 (discount) and credit institutions (Forex) (restricted) Factoring Demand deposits with foreign banks (Forex) Saderat Rial 21 April 2011 ,28 LC documents 0 0 0 0 0 0 0 (discount) (restricted) Factoring Term deposits with foreign banks (Forex) Saderat Rial 21 March 2011 ,9 LC documents 0 0 0 0 0 0 0 (discount) (restricted) Factoring Facilities granted to other banks and credit Saderat Rial 21 April 2011 ,23 LC documents 0 0 0 0 0 0 0 (discount) institutions 242,400 1,905,669 Payment of checks issued by other banks 1,425,317 68,462 1,041,670 72,446 Amounts in forex Other amounts due (2 items) 10-3-1 1,518,056 3,143,611 1,518,056 3,143,611 Factoring 2,943,373 3,212,073 2,559,726 3,216,057 Pasargad Euro 12.81 October 2012 ,5 LC documents 15,766,893 751,419 729,203 (discount) Factoring September Pasargad Euro 12.81 LC documents 5,000,000 238,290 231,245 (discount) 2012 ,29 Factoring Pasargad Euro 12.81 October 2012 ,3 LC documents 6,000,000 285,948 277,494 (discount) 1,275,657 1,237,942 1,518,056 3,143,611
Saderat Bank In line with the policy of expanding banking services aimed at providing finance for its customers in the areas of rials and foreign currencies, mitigating the credit portfolio risks and maintaining the capital adequacy ratio, Saman Bank included in its loan portfolio services the discount of the term letters of credit which other banks opened and guaranteed their payments on due dates as of March 2011 (ending the Iranian calendar year). In the area of foreign currencies, discounts were made without recourse to the beneficiary by paying the amounts so discounted into the beneficiary’s account (the discount applicant) in compliance with the appropriate rules and standards and within the context of the regulations governing the forex letters of credit and uniform rules concerning the letters of credit. In the area of rials, Saman Bank discounted the locally-issued term letters of credit (in rials) opened by the Iranian banks within the framework of the rules governing the local letters of credit (in rials) and applicable standards adopted by the Central Bank of of Iran(CBI) (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
78 Annual Report 79 the authenticity of opened letters of credit as well as irrevocable commitments by the opening banks for payment Original Late payment Processing cost Balance LC number Debt status of the proceeds derived from such discounts to Saman Bank on due dates and in return for transfer of the amount sought penalty and lawyer's fees due beneficiary’s rights ( discount applicant). 89/3446/0029 259,922 89/3446/0030 259,915 As such, a number of companies made applications for discount of the letters of credit opened and guaranteed by 402,914 24,222 0 Settled other banks which were processed in compliance with the foregoing standards and upon receipt of authorization 90/3446/0023 143,595 from the bank’s credit committees. For the discount of forex-denominated letters of credit, all credit items were 90/3446/0024 143,583 paid and settled on maturity dates by the banks which had opened and guaranteed such instruments. For the 89/3446/0063 257,600 203,654 9,425 0 Settled discounts of rial-denominated term letters of credit all items with the exception of a number of items connected 90/3446/0010 249,681 262,450 7,491 0 Settled with Amir Mansour Arya Group, were paid and settled by the opening banks in a normal way of business practices. 90/3446/0021 260,009 314,847 26,609 0 Settled For the discounting facilities provided for the companies affiliated to Amir Mansour Arya Group or for the 90/3446/0022 239,991 314,776 26,668 0 Settled companies which were trading partners of this Group, except for two banks, Bank Saderat and Bank of Industry 90/3446/0027 240,463 291,170 24,632 0 Settled and Mine, all other banks including Pasargad Bank, Sepah Bank, Bank Melli and Bank Maskan fulfilled their 90/3446/0038 260,000 299,855 41,589 0 Settled obligations and paid Saman Bank the committed amounts under 18 letters of credit totaling Rls. 2,136 billion on 90/3446/0031 320,577 371,221 51,034 0 Settled the due dates. Only the two banks of of Saderat and Industry and Mine failed to honor their obligations pledged 90/3446/0016 274,709 442,808 94,219 0 Settled against Saman Bank. The total discounts made and the amounts guaranteed to be paid in the letters of guarantee 90/3446/0015 50,370 85,841 5,615 0 Settled by these two opening banks on the maturity dates were as follows: 90/3446/0017 240,388 311,064 43,810 0 Settled 90/3446/0037 275,317 0 0 0 Amounts credited and in the process of settlement 90/3446/0028 300,300 395,597 51,408 0 Amounts credited and in the process of settlement Company name LC opening bank Balance of (first beneficiary) discounting Customer (Obligor to documents Company's ownership 90/3446/0019 261,215 339,357 42,512 0 Amounts credited and in the process of settlement applicant/transferor of no. pay funds on traded (% held) 90/3446/0018 260,971 0 0 0 Amounts credited and in the process of settlement proceeds maturity) (in billion rials) 89/3446/0072 242,400 0 0 242,400 pending 4,541,006 4,035,554 449,235 242,400 Elit- Anzali Free Trade Zone 1305959 Saderat 761 Amir Reza Moujoudi (99%) Co.
Staff cooperative of National Iranian Industrial Fouladyar Iranian and Steel Group Co. (55% of shares) Concerning the 11 letters of credit under numbers 90/3446/0015 and 90/3446/0018 and 90/3446/0017 and 174667 Saderat 300 Trading-Industerial Co. Iran Metal Wastes Procurement and Processing Co. 90/3446/00137 and 90/3446/0028 and 90/3446/0021 and 90/3446/0031 and 90/3446/0027 and 90/3446/0038 and (40% of shares) 90/3446/0019 and 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 Foulad Iran Public Service Co.. 7778609 Saderat 521 Foulad Staff Pension Fund(99.7%) verdicts of initial court in connection with 5 letters of credit under numbers 90/3446/0031 and 90/3446/0027 and IMIDRO (50.5%) & Provincial Investment 90/3446/0038 and 90/3446/0022 and 90/3446/0021 received finality in the Bench 18 of Tehran Provincial Court Khuzestan Steel Co. 13934 Saderat 807 Companies(30%) 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 was issued and served on Bank Saderat. Despite the service Saderat 1,350 Foulad Spadana Co. 1124386 Amir Reza Taremi (95%) of the writ, Bank Saderat did not take any action to enforce the judgment and thus an executory file was formed Industry & Mine 499 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 Parsian Milad Hadid Co. 1124386 Saderat 802 Mohsen Karimian (60%) account and the case for the said five letters of credit was closed. 5,040 As regards the letter No. 90/3446/0018, Bank Saderat lodged the second appeal and the file was referred to the Amounts collected by March (4,261) chamber 22 of the Supreme Court. Upon examination of submissions and deliberations, this chamber upheld the 20, 2019 previous verdict in favor of Saman Bank and returned the file to the initial court for enforcement actions. Since Cash collected during 2019 (536) 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. Final court decree against 0 91,456 milion as compensation loss. As regards the letter of credit No. 90/3446/0016 which was investigated by the Bank Saderat Bench No. 19 of Tehran Public Civil Court, Saman Bank collected the amount of Rls. 811735 million for the original Debt balance 243 claim and loss thereof in settlement of all its claims and thus the case was closed. 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 In order to protect the interests and rights of Saman Bank and seek compensation from the guaranteed amounts recovered all its claims totalling the amount of Rls. 1,985,651million for the principal and losses under the letter of and force the two banks of Saderat and Industry and Mine to fulfill their obligations, Saman Bank has taken legal credit Nos. 28, 37 and 17. As regards the letters of credit Nos. 15 and 19, an amount totalling Rls. 1211710 million actions versus these two banks by claiming the collection of proceeds derived from 8 matured letters of credit was collected and the executory file is currently open for recovery of Rls. 116,232 million as the remainder. whereby 6 letters of credit are related to Bank Saderat and 2 letters of credit are related to Bank of Industry and Mine. For all of the 8 letters of credit, Saman Bank submitted a statement of claim to the trial court and requested Pasargad Bank attachment of the assets and property owned by the opening banks. Thus the court’s order resulted in the seizure of the assets which belong to Saderat Bank and Bank of Industry and Mine being equivalent to the amounts As regards the discount of letters of credit for Pasargad Bank, this bank has filed a lawsuit versus the claims claimed by Saman Bank. Until the date of presenting financial statements, the court made its ruling on the two brought by Saman Bank which was referred to the Bench No. 7 of Tehran Public Civil Court for investigation. The cases, brought against the Bank of Industry and Mine in favor of Saman Bank which upon finality of decree and 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 issuance of a writ for execution of the court’s decision resulted in the collection of Rls. 666 billion comprising the the court. The lawyer of Pasargad Bank has made an appeal against the court’s decision. original amount for Rls 499 billion, late payment penalty, litigation costs and lawyer’s fee for the amount of Rls. 167 billion. 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 The legal actions taken so far concerning the letters of credit issued by the Bank Saderat are described in this Pasargad Bank. Thus the courts passed the judgment No. 9709970226701194 of December 25, 2018 and sentenced table: 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.
80 Annual Report 81
2018 2018
111,948 0 0 640,347 640,347 1,306,585 1,306,585 5,598,262 5,598,262 0 0 1,395,641 1,395,641 0 0 319,608 319,608 8,380,998 8,380,998 75,099,052 75,420,338 9,780,841 9,898,048 38,075 38,075 2,306,664 2,306,664 22,399,187 22,455,947 9,264,177 9,264,177 Rls(m) Rls(m) Net Net 137,136,638 136,641,385 111,948
1,495,652 0 0 589,731 589,732 475,039 475,038 2,749,546 2,749,545 0 0 1,022,325 1,022,325 0 0 5,586,021 5,586,021 12,011,870 12,011,870 80,394,258 80,594,289 9,123,379 9,275,364 37,306 37,306 2,359,728 2,359,728 41,010,185 41,053,873 12,222,774 12,222,774 Rls(m) Rls(m) Net Net 169,473,517 169,077,815 1,495,652
) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )
112,968 112,967 1,016,522 1,016,522 35,369 35,369 7,712,515 7,706,490 27,913 27,913 5,420,260 5,423,306 942,136 944,451 13,478 13,478 64,006 64,006 15,655 16,320 58,183 58,183 0 0 0 0 ( ( ( ( ( ( 0 0 0 0 0 0 0 0 ( ( ( ( ( ( ( ( ( ( ( ( ( ( Rls(m) Rls(m) Doubtful debt Provision Doubtful debt Provision ( (
1,495,650 1,495,652 0 0 702,699 702,699 1,491,561 1,491,561 2,784,915 2,784,915 0 0 1,022,325 1,022,325 0 0 5,586,021 5,586,021 12,039,783 12,039,783 85,814,518 86,017,595 10,065,515 10,219,815 50,784 50,784 2,423,734 2,423,734 41,025,840 41,070,193 12,280,957 12,280,957 Rls(m) Rls(m) Total Total 177,186,034 176,784,302 ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )
235,754 235,754 5,344,186 5,344,186 2,904 2,904 237,030 237,030 2,335,031 2,335,031 390,854 390,854 2,457 2,457 13,624 13,624 279,737 279,737 1,846,795 1,846,795 0 0 0 0 0 0 0 0 ( ( 0 0 0 0 0 0 ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( Rls(m) Rls(m) Deferred interest and fee Deferred interest and fee ( ( Group ) ) ) ) ) ) ) ) ) ) ) ) Parent Company ) ) 2019 2019
9,209 9,209 12,809,055 12,801,769 1,415,692 1,415,692 2,008,237 2,008,237 118,134 118,134 6,111,384 6,118,670 3,139,113 3,139,113 0 0 0 0 0 0 0 0 ( ( 0 0 0 0 0 0 ( ( ( ( 0 0 0 0 0 0 ( ( ( ( ( ( Rls(m) Rls(m) Unrealized interest Unrealized interest ( ( ) ) ) ) ) )
4,001,477 3,990,570 3,970,224 3,981,131 20,346 20,346 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 ( ( ( ( 0 0 0 0 0 0 0 0 Rls(m) Rls(m) Amounts received for Muzarabeh and joint civil partnership accounts Amounts received for Muzarabeh and joint civil partnership accounts ( (
0 0 0 0 247,017 247,017 655,000 655,000 759,611 759,611 0 0 0 0 0 0 618 618 2,509,615 2,509,615 12,590,699 12,590,699 4,801,015 4,801,015 23,526 23,526 324,651 324,651 268,152 268,152 739,024 739,024 Rls(m) Rls(m) Balance of late penalties receivable Balance of late penalties receivable 22,918,928 22,918,928
119 119 0 0 0 0 0 0 276,771 276,771 0 0 0 0 0 0 66,253 66,253 584,581 584,581 8,197,044 8,210,234 1,043,572 1,043,572 1,661 1,661 16,330 16,330 1,348,862 1,354,441 1,910,715 1,910,715 Rls(m) Rls(m) Balance of interest and fee recievable Balance of interest and fee recievable 13,464,677 13,445,908
1,495,531 1,495,533 0 0 455,682 455,682 836,561 836,561 1,993,496 1,993,496 0 0 1,022,325 1,022,325 0 0 6,937,746 6,937,746 11,190,854 11,190,854 71,332,030 71,532,824 4,632,128 4,786,428 28,054 28,054 2,214,511 2,214,511 45,799,947 45,846,007 14,617,126 14,617,126 Rls(m) Rls(m) Balance of principal, unrealized and deferred interests Balance of principal, unrealized and deferred interests 162,957,147 162,555,991 Debtors of prepaid credit cards Debtors of prepaid credit cards Debtors for participation and Sukuk bonds paid Debtors for participation and Sukuk bonds paid Debtors of LGs paid Debtors of LGs paid Debtors of LCs paid Debtors of LCs paid Loans granted in Forex Loans granted in Forex Other loans granted in Rial Other loans granted in Rial Gharzolhassaneh (Interest-free) loan Gharzolhassaneh (Interest-free) loan Estesna'a Estesna'a Murabahah (Sale contracts) Murabahah (Sale contracts) Factoring Factoring Mosharakat Madani (Civil partnership) Mosharakat Madani (Civil partnership) Muzarabah (trade contracts) Muzarabah (trade contracts) Salaf (future contracts) Salaf (future contracts) Hire purchase Hire purchase Jealeh (service contracts) Jealeh (service contracts) Sales by installments Sales by installments 11- Loans granted to and amounts due from non-governmental entities/persons
82 Annual Report 83 11-1- Classification of Group loans granted to and amounts due from non-governmental entities/persons based 11-2- Classification of the parent company loans granted to and amounts due from non-governmental entities/ on the regulations adopted by the Money and Credit Council (Note 8-5 to the financial statements) breaks persons based on the regulations adopted by the Money and Credit Council (Note 8-5 to the financial down as follows: statements) breaks down as follows:
Group Parent Company 2019 2019 Current Overdue outstanding doubtful Total Current Overdue outstanding doubtful Total Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Sales by installments 12,155,827 17,234 4,921,934 171,869 17,266,865 Sales by installments 12,155,827 17,234 4,921,934 171,869 17,266,864 Jealeh (service contracts) 45,624,012 53,373 18,743 1,720,834 47,416,961 Jealeh (service contracts) 45,675,650 53,373 18,743 1,720,834 47,468,600 Hire purchase 716,274 3,162 7,337 1,828,719 2,555,492 Hire purchase 716,274 3,162 7,337 1,828,719 2,555,492 Salaf (future contracts) 25,188 0 0 28,054 53,242 Salaf (future contracts) 25,188 0 0 28,054 53,242 Muzarabah (trade contracts) 6,551,329 25,117 11,186 3,889,083 10,476,715 Muzarabah (trade contracts) 6,705,629 25,117 11,186 3,889,083 10,631,015 Mosharakat Madani (Civil partnership) 74,535,300 587,610 4,342,574 12,654,290 92,119,774 Mosharakat Madani (Civil partnership) 74,749,283 587,610 4,342,574 12,654,290 92,333,757 Factoring 13,141,636 1,650 94,491 1,047,272 14,285,050 Factoring 13,141,636 1,650 94,491 1,047,272 14,285,049 Murabahah (Sale contracts) 6,995,373 8,215 564 465 7,004,617 Murabahah (Sale contracts) 6,995,373 8,215 564 465 7,004,617 Estesna'a 0 0 0 0 0 Estesna'a 0 0 0 0 0 Gharzolhassaneh (Interest-free) loan 1,007,473 7,717 4,069 3,066 1,022,325 Gharzolhassaneh (Interest-free) loan 1,007,473 7,717 4,069 3,066 1,022,325 Other loans granted in Rial 0 0 0 0 0 Other loans granted in Rial 0 0 0 0 0 Loans granted in Forex 1,045,591 0 0 1,984,287 3,029,878 Loans granted in Forex 1,045,591 0 0 1,984,287 3,029,878 Debtors of LCs paid 690,200 0 0 801,361 1,491,561 Debtors of LCs paid 690,200 0 0 801,361 1,491,561 Debtors of LGs paid 295,114 0 0 407,584 702,699 Debtors of LGs paid 295,114 0 0 407,584 702,698
Debtors for participation Debtors for participation 0 0 0 0 0 0 0 0 0 0 and Sukuk bonds paid and Sukuk bonds paid
Debtors of prepaid credit cards 1,495,649 0 0 0 1,495,649 Debtors of prepaid credit cards 1,495,649 0 0 0 1,495,649 164,278,966 704,078 9,400,898 24,536,884 198,920,828 164,698,887 704,078 9,400,898 24,536,884 199,340,747 Less: Less: Unrealized interest (12,801,769) 0 0 0 (12,801,769) Unrealized interest (12,809,055) 0 0 0 (12,809,055) Deferred Interest and fee 0 (161,267) (1,998,060) (3,184,860) (5,344,187) Deferred Interest and fee 0 (161,267) (1,998,060) (3,184,856) (5,344,183) Joint Civil partnership account (20,346) 0 0 0 (20,346) Joint Civil partnership account (20,346) 0 0 0 (20,346)
Amounts received for Muzarabah Amounts received for Muzarabah (3,970,224) 0 0 0 (3,970,224) (3,981,131) 0 0 0 (3,981,131) (trade contracts) (trade contracts)
Net loans granted before deducting provision Net loans granted before deducting provision 147,486,627 542,811 7,402,838 21,352,024 176,784,302 147,888,355 542,811 7,402,838 21,352,028 177,186,032 for doubtful debts for doubtful debts
General provision for doubtful debts (1,773,736) 0 0 0 (1,773,736) General provision for doubtful debts (1,779,762) 0 0 0 (1,779,762) specific provision for doubtful debts 0 (108,620) (153,472) (5,670,661) (5,932,754) specific provision for doubtful debts 0 (108,620) (153,472) (5,670,661) (5,932,753) Balance at March 20, 2019 145,712,891 434,191 7,249,366 15,681,363 169,077,815 Balance at March 20, 2019 146,108,593 434,191 7,249,366 15,681,367 169,473,517 Balance at March 20, 2018 112,760,119 4,391,191 672,411 18,817,664 136,641,385 Balance at March 20, 2018 113,955,372 4,391,191 672,411 18,117,664 137,136,638
84 Annual Report 85 11-3- Details of provision for doubtful debts of the parent company break down as follows: 11-6- Loans granted to and amounts due from non-governmental entities/persons by a breakdown of the type of collateral 2019 2018
General Specific General Specific Total Total 2019 2018 provision provision provision provision Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Deposits 6,451,900 4,884,478 Balance at the beginning of the year 1,779,762 5,632,753 7,412,515 1,779,762 4,432,753 6,212,515 Participation bonds and other debt securities guaranteed by the government and CBI 0 0 Recovered 0 0 0 0 0 0 Participation bonds and other debt securities guaranteed by other banks 1,860 11,961 Bad debts (written-off) 0 0 0 0 0 0 Banking letters of guarantee 501 474 Increase or decrease during the year 0 300,000 300,000 0 1,200,000 1,200,000 Letters of credit traded 1,136,604 1,418,842 Balance at year-end 1,779,762 5,932,753 7,712,515 1,779,762 5,632,753 7,412,515 Shares listed on the Stock Exchange 2,097,778 2,737,695 Land and buildings 31,589,143 28,367,042 11-4- Loans granted by the parent company in foreign currency by a breakdown Machinery 497,989 475,346 of payment resources Checks and promissary notes 125,593,260 97,079,784 Other 9,816,997 9,573,531 177,186,032 144,549,153 2019 2018 Unsecured loans and claims (without security) 0 0 Current Overdue Outstanding Doubtful Total Total 177,186,032 144,549,153 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Local resources 9,209 0 0 2,949,725 2,958,934 6,034,720 • Disclosure of collaterals in possession and their allocation based on the loan balances move from the most liquid ones to other items Forex reserve account 0 0 0 70,945 70,945 70,945 respectively. National Development Fund 0 0 0 0 0 0 Syndicated loans 0 0 0 0 0 0 9,209 0 0 3,020,670 3,029,878 6,105,665
11-5- Loans granted to and amounts due from non-governmental entities/persons in terms of maturities and interest rates
2019 2018 Over 24% 21 to 24% 18 to 21% 15 to 18% 12 to 15% 12% and less Total Total Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) 2018 and before 26,749,792 8,620,081 11,400,640 6,051,504 773,081 3,313,416 56,908,514 55,290,122 2019 2,238,663 3,971,839 15,055,604 57,359,537 1,354,119 3,677,578 83,657,340 64,988,978 2020 158,012 361,662 227,389 1,967,074 3,542,622 377,376 6,634,135 4,007,453 2021 254,089 190,542 922,997 7,701,867 19,376 746,384 9,835,255 4,489,246 2022 and onward 725,984 904,863 3,811,340 5,061,421 3,831,593 5,815,587 20,150,788 15,773,354 30,126,540 14,048,987 31,417,970 78,141,403 9,520,791 13,930,341 177,186,032 144,549,153 March 20, 2018 34,480,371 14,410,262 16,134,012 59,226,169 5,218,357 15,079,982 144,549,153
86 Annual Report 87
) ) )
)
) ) )
) ) Total Total
7,712,516 16,204,840 6,966,348 23,171,189 3,981,131 7,412,516 300,000 20,346 364,108,604 7,504,743 ( 21,863,367 17,000,000 ( 0 13,981,843 13,186,683 109,499,106 399,413,404 35,050,048 24,504,745 0 22,401,762 35,050,052 36,383,605 ( ( ( 137,136,638 0 36,383,604 169,473,517 144,803,906 ( ( 0 Rls(m) Rls(m) 0 ( 0 ( 0 )
)
)
cards
cards Debtors
Debtors
5,926 of prepaid
of prepaid
0 0 0 6,045 ( 0 119 0 0 0 0 119 Rls(m) 5,926 6,199,190
111,951 7,582,772 0 6,047 ( 0 ( 0 111,951 0 121 1,495,654 1,495,533 0 0 0 Rls(m) 0 0 0 0 0
and Sukuk bonds paid Debtors for
and Sukuk participation 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) bonds paid Debtors for
participation 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) 0 0 0 0 0 0
)
)
)
of paid
Debtors of paid
letters of
Debtors
guarantee
letters of 0 0 245,683 0 0 0 1,333 1,333 0 245,683 247,016 247,016 Rls(m) 112,968 1,524,517 112,968
guarantee 506,297 1,473,901 247,017 0 0 ( 0 0 640,346 0 247,017 589,730 455,681 ( 0 0 Rls(m) 0 ( 0 0 0 ) ) )
)
)
credit of paid
credit Debtors of paid
letters of
11,951 Debtors
letters of 0 0 139,169 9,286 ( 0 515,833 518,498 0 139,169 657,668 655,002 Rls(m) 1,016,522 7,448,700 11,951 1,016,522
1,665,442 6,619,819 657,666 9,285 0 ( ( 0 1,306,586 0 655,000 475,039 836,561 ( 0 Rls(m) 0 0 ( 0 0 0
) )
) )
) ) forex Loans
forex Loans
457,922 592,903 granted in
460,522 ( 757,011 420,839 ( 0 276,771 448,835 0 759,611 1,205,846 1,036,382 Rls(m) 35,369 7,814,552 1,050,825 35,369 granted in
4,427,785 5,135,301 1,205,846 881,361 0 ( ( 0 5,598,262 0 1,036,382 2,749,547 1,748,534 ( Rls(m) 0 0 0 ( 0 0 0 loans Other in rial
loans
Other in rial
granted
granted 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) Rls(m) 0 0 0 0 0 0 0
)
(Free
(Free
hasaneh interest) Gharzol- 432,831 hasaneh interest) Gharzol-
1,395,641 59,515 0 0 0 ( 0 0 1,395,641 0 0 1,022,325 1,022,325 0 Rls(m) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m)
ng the period included the accrued and cash interests recognized and the amounts collected consisted consisted collected amounts the and recognized interests cash and accrued the included period the ng of
of
Estesna'e
(Contracts Exchange) 0 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m) 0 0 0 0 0 0 0 0
Estesna'e (Contracts Exchange) 0 0 0 0 0 0 0 0 0 0 0 0 Rls(m)
) )
)
)
(Sale
(Sale
contracts) 947,681 181,416
Murabahah 316,000 6,150,831 3,608 244,679 0 ( ( 0 319,608 0 66,871 5,586,021 Rls(m) 5,519,150 0 0 0 0 0 0 0 0 contracts) 2,189 179,227 Murabahah 2,560 ( 246 242,119 ( 0 66,254 3,362 0 617 3,608 66,871 Rls(m)
) )
)
) ) )
Factoring 27,913 7,670,669 2,664,057 27,913
3,531,997 13,084,260 4,876,913 881,339 0 ( ( 0 8,380,997 0 Rls(m) 3,094,195 12,011,870 8,945,588 ( 0 0 0 ( 0 0 0 Factoring 2,092,721 571,336 222,831 ( 4,379,505 658,508 ( 0 584,581 497,409 0 2,509,615 4,876,915 3,094,196 Rls(m)
) )
)
) ) )
)
) Civil
Civil
5,423,306 14,022,388 5,123,306 300,000 3,981,131 232,558,113 partnership
61,064,942 240,690,964 19,478,702 15,344,620 ( ( 0 75,420,338 0 Rls(m) 20,800,934 80,594,290 69,197,793 ( ( 0 0 ( 0 0 0 ( 3,867,899 10,154,490 partnership 5,352,249 ( 11,106,349 9,992,370 ( 0 8,210,233 8,372,353 0 12,590,699 19,478,702 20,800,932 Rls(m) ) )
)
) ) ) )
944,451 1,990,425 1,113,756 944,451 20,346
Muzabahah 5,142,749 1,243,251 5,699,750 1,258,594 ( ( 0 Rls(m) 9,898,048 0 5,844,588 9,275,366 4,395,575 ( 0 0 0 ( 0 ( 0 0 397,731 716,025 Muzabahah 611,387 ( 4,587,360 647,207 ( 0 1,043,572 1,112,390 Rls(m) 0 4,801,016 5,699,750 5,844,588 ) )
) ) ) Salaf
(future Salaf
13,478 655 114 13,478 (future
contracts)
26,252 0 25,301 0 ( ( Rls(m) 0 38,075 0 25,187 37,306 25,597 ( 0 0 0 ( 0 0 0 0 114 contracts) 0 0 23,526 0 ( 0 1,661 1,775 Rls(m) 0 23,526 25,301 25,187
) ) ) )
)
) Hire
Hire
64,006 84,622 27,699 64,006 purchase
2,038,325 129,050 332,345 36,335 ( ( Rls(m) 0 2,306,664 0 340,981 2,359,728 2,082,753 ( 0 0 0 ( 0 0 0 0 737 26,962 purchase 4,822 ( 320,567 31,513 ( 0 16,330 11,779 Rls(m) 0 324,652 332,346 340,982
)
)
)
) ) )
Jealeh
(service Jealeh
(service contracts) 16,320 95,855,292 3,567,832 16,320
21,540,173 113,762,718 ( 932,093 4,258,331 ( 0 Rls(m) 22,455,946 0 1,622,592 41,053,871 39,447,599 ( 0 0 0 ( 0 0 0 0 contracts) 135,448 3,432,384 ( 151,288 ( 0 1,354,441 252,311 4,107,043 679,782 0 268,151 932,093 1,622,592 Rls(m)
)
) ) ) )
)
Sales by
58,183 1,581,357 525,223 58,183 Sales by
installments
7,731,552 3,481,022 ( 1,590,807 1,584,154 ( Rls(m) 0 9,264,176 0 2,649,738 12,222,772 9,631,217 ( 0 0 0 ( 0 0 0 0 11,701 513,522
installments ( 699,084 ( 0 1,910,715 51,640 885,070 Rls(m) 1,539,167 0 739,023 1,590,807 2,649,738
* 11-7-1- Details of interests accrued on the loans granted to and amounts due from entities/persons The interest on loans included the granted as well late payment penalty. amount increased duri Collected during the year Increased during the year Collected during the year Effect of foreign exchange rate during the period Balance at March 20, 2019 Late penalties for loans granted Balance at March 20, 2018 Increased during the year Principal loan amounts Balance at March 20, 2018 Granted during the year Collected during the year Interests receivable on loans granted Balance at March 20, 2018 Balance at March 20, 2018 Increased during the year Collected during the year Effect of foreign exchange rate during the period Balance at March 20, 2019 Interests on loans granted Balance at March 20, 2018 Balance at March 20, 2019 Effect of forex exchange rates during the period Net loans granted Balance at March 20, 2018 Effect of forex exchange rates during the period Balance at March 20, 2019 Balance at March 20, 2019 Balance at March 20, 2019 Provision for doubtful debts Balance at March 20, 2018 Interest on loans granted Received Increased or decreased during the year Bad debts (written-off) during the year Balance at March 20, 2019 Amounts received for for received Amounts Muzarabeh (trade contracts) Amounts received for Muzarabeh Civil partnership joint account Balance at March 20, 2018 Balance at March 20, 2019 11-7- Details of loans granted to and amounts due from non-governmental entities/persons * of the collected portion accrued and cash interests during period.
88 Annual Report 89 11-8- Loans granted to and amounts due from non-governmental entities/ 12- Investments in shares and other securities persons by a breakdown of customer type Group 2019 2018 2019 2018
Provision for Provision for Note Current Long-term Total Current Long-term Total Gross amount Net Gross amount Net doubtful debts doubtful debts Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m)
Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Investment in quickly marketable 12-1 12,225,343 40,099 12,265,442 1,426,900 127,355 1,554,255 Natural customers 43,493,954 (649,017) 42,844,936 34,909,172 (649,017) 34,260,154 shares Legal customers 129,856,370 (7,063,498) 122,792,873 106,199,747 (6,763,498) 99,436,250 Investment in other shares/stocks 12-2 2,243,932 2,022,100 4,266,032 7,100,911 856,305 7,957,216 Personnel 3,835,708 0 3,835,708 3,440,234 0 3,440,234 Investment in other securities 12-3 357,926 741,637 1,099,563 3,401,931 109,035 3,510,966 177,186,032 (7,712,515) 169,473,517 144,549,153 (7,412,515) 137,136,638 14,827,201 2,803,836 17,631,037 11,929,742 1,092,695 13,022,437
11-9- Loans granted by the Group to the affiliated companies are as follows Parent Company 2019 2018 Note Current Long-term Total Current Long-term Total Group Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) 2019 2018 Investment in quickly marketable Interest Provision for 12-1 12,225,343 40,099 12,265,442 1,426,900 127,355 1,554,255 Current Non-current Total Net shares rates doubtful debts Investment in other shares/stocks 12-2 2,243,932 2,683,653 4,927,585 7,100,911 1,269,816 8,370,727 Percentage Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Investment in other securities 12-3 357,926 741,637 1,099,564 3,401,931 109,035 3,510,966 Related parties 14,827,201 3,465,389 18,292,591 11,929,742 1,506,206 13,435,948 Adonis Co. 18-22 16,149 0 (242) 15,908 53,184 16,149 0 (242) 15,908 53,184
11-10- Loans granted by the parent company to subsidiaries and affiliates are as follows
Parent Company 2019 2018
Interest Provision for Current Non-current Total Net rates doubtful debts
Percentage Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Group companies
Saman Satellite 18 0 0 0 0 75,690 Communications Co.
Saman Brokerage Co. 18 0 0 0 0 288,001 Sepehr Mehr 22 44,260 0 (664) 43,596 63,133 Tondar Noor 18 351,448 0 (5,272) 346,176 0 Other related perties Adonis Co. 18-22 16,149 0 (242) 15,908 53,184 411,857 0 (6,178) 405,680 480,008
90 Annual Report 91 12-1- Parent company’s investments in quickly marketable shares are as follows:
12-1-1- Current investments in quickly marketable shares Market value Market value Rls(m) Rls(m) 5,704,412 41,760 1,396,499 99,145 7,100,911 979 141,884 0 0 2019 2018 141,884
Number of 2018 2018 Origination Investment Cost Net sale value Cost Net sale value shares Percentage Rls(m) Rls(m) Rls(m) Rls(m)
Shares of companies listed on the stock exchange Isfahan Mubarakeh Steel Mill Purchase 0 0 0 0 18,021 31,197 Net book value Net book value Rls(m) Rls(m) 593,097 28,815 649,208 97,965 1,242,305 575 127,355 0 0 127,355 Iran Construction Investment Co. 0 0 0 0 0 0 Iran Telecommunication 0 0 0 0 0 0 Sina Bank 0 0 0 0 0 0
Shomal Drilling Co. Purchase 0 0 0 0 8,140 2,558 MAPNA Purchase 0 0 0 0 39,536 33,104 Bank Mellat 0 0 0 0 0 0
Market value Market value Rls(m) Rls(m) 0 6 2,243,932 88,908 2,243,932 1,424 90,338 0 0 Iranian Leasing Purchase 0 0 0 0 1,960 1,582 90,338 Saderat Bank Purchase 0 0 0 0 12,885 6,762 Tooka Foulad Investment Co. Purchase 0 0 0 0 27,409 20,545 Tooka Foulad Investment Co.- rights issue 0 0 0 0 0 0
Bahman Group 0 0 0 0 0 0 Kharazmi Investment Purchase 0 0 0 0 0 0 Tooka Transport Purchase 0 0 0 0 4,341 3,515
Net book value Net book value Rls(m) Rls(m) 0 3 1,396,499 39,521 1,396,499 575 40,099 0 0 Oil Industry 0 0 0 0 0 0 40,099 Mines and Metals Investment Purchase 0 0 0 0 14,354 13,903 Development Co. Mines and Metals Investment Rights issue 0 0 0 0 255 255 Development Co. - rights issue Iran Khodro 0 0 0 0 0 0 Iran Khodro Investment Development Co. 0 0 0 0 0 0 Accumulated value impairment Accumulated value impairment Rls(m) Rls(m) 0 0 0 0 0 0 0 0 0 Ansar Bank Purchase 0 0 0 0 13 12 0 Shiraz Petrochemical Co. - Urine salaf 0 0 0 0 0 0 Informatic services 0 0 0 0 0 0 Iran Copper Industries - rights issue Rights issue 0 0 0 0 240 391
Fars Development Co. Purchase 0 0 0 0 20,165 16,434 2019 2019 Takin Co. Purchase 32,400 0.04 171 245 16,887 16,249
Takin Co.-right issue 39,599 169 260 0 0 Cost Cost Rls(m) Rls(m) 0 3 649,208 39,521 649,208 575 40,099 0 0 40,099 Gol-e Gohar Purchase 0 0 0 0 5,756 6,395 Gol-e Gohar - right issue Rights issue 0 0 0 0 755 755 Tamin Oil, Gas and petrochemical Co. Purchase 0 0 0 0 12,541 13,573 Ghadir Investment Co. Purchase 0 0 0 0 11,978 10,175 Bojnord Cement Co. Purchase 0 0 0 0 18,426 18,429 Middle East Bank Purchase 88,199,999 1.26 111,630 272,679 207,215 292,459 Investment Investment Percentage Percentage 0.0004 32.33 2.156 Tamin Maseh Rikhtegari Purchase 0 0 0 0 0 0 0.537 Saman Electronic Payment Co. Purchase 1,086,465,505 36.22 2,688,691 11,515,935 0 0 2,800,661 11,789,119 420,877 488,293 Shares of companies listed on the Farabourse (OTC) Tooka Rail Purchase 0 0 0 0 10,491 6,702 Middle East Life Insurance Purchase 0 0 0 0 100 106 Number of shares Number of shares 2,000 646,666,400 24,841,637 Alhavi Pharmaceutical Co. Purchase 0 0 0 0 6,205 4,440 309,535 Taliseh Nemouneh 0 0 0 0 0 0 A.S.P. 0 0 0 0 0 0 Sarcheshmeh Copper Mines Purchase 0 0 0 0 42,906 40,608 Sarcheshmeh Copper-right issue 0 0 0 0 0 0 Kharazmi IT Development Purchase 0 0 0 0 2,024 1,398 Isfahan Steel Mill Purchase 0 0 0 0 4,705 4,157 Origination Origination Purchase Purchase Purchase Asalouye Power - MAPNA Purchase 0 0 0 0 25,997 22,244 Kowsar Rail Track Purchase 0 0 0 0 10,753 9,251 Kayson Purchase 0 0 0 0 39,747 32,893 Kayson - rights issue Rights issue 0 0 0 0 4,352 3,029 Kerman Development Co. Purchase 0 0 0 0 210 231 Miras Farhangi Investment Co. Purchase 0 0 0 0 19,689 19,280 Saman Insurance Co. Purchase 126,421,110 8.43 99,235 436,224 178,001 794,269 Ghaed Basir Petrochemical Co. 0 0 0 0 0 0 99,235 436,224 345,180 938,608 2,899,896 12,225,343 766,057 1,426,900 Investments in other shares are as follows: Added (Less): 12-1-2- Long-term investments in quickly marketable shares Cost price adjustment 9,325,447 0 660,843 0 12-2-1- Current investments in other shares Shares of companies listed on the Stock Exchange Iran Pump Manufacturing Co. Saman Electronic Payment Co. Kardan Investment Bank Hamedan Glass Works Plastiran Shares of companies listed on Farabourse Co. (OTC)
12,225,343 12,225,343 1,426,900 1,426,900 12-2-
92 Annual Report 93
1,422,962 354,528 68,400 1,000,034 15,483 240,000 9,315 5 34,214 10 103,473 46,405 0 2,683 0 0 3,243 37 653,659 253 354,528 353 68,400 230,731 27,090 1,855 9,315 1,528 12,649 5 0 34,214 128,895 0 2,683 1 3,243 0 0 61,064 27,090 0 0 0 128,895 0 0 0 215,625 0 0 0 0 0 0 0 8,608 112,529 0 Market value Rls(m) 0 Rls(m) Market value 2018 2018
1,269,816 354,528 68,400 846,888 15,483 240,000 9,315 5 4,566 10 103,473 46,405 101 105 490 1,904 3,243 25 856,305 125 354,528 614 68,400 433,377 3,251 27,090 9,315 50 12,480 5 5 4,566 7,975 490 105 326,945 3,243 0 0 61,064 27,090 75 0 20,000 7,975 0 0 0 2 215,625 10 0 0 0 60 0 8,608 Net book value Rls(m) 112,529 5,817 24 Rls(m) Net book value
2,760,680 1,730,629 68,400 961,651 15,483 240,000 9,315 1,470 43,077 10 253,473 45,204 0 4,901 0 0 3,243 0 2,106,973 348 1,730,629 353 68,400 307,944 2,084 27,090 9,316 2,886 11,424 1,470 0 43,077 41,696 0 4,901 17 3,243 0 0 27,090 61,064 0 0 0 41,696 0 6,211 7,385 0 215,625 0 11,619 0 98,920 0 35,904 Market value Rls(m) 0 0 0 0 Rls(m) Market value
101 490 2,674 0 2,022,100 150 1,730,629 614 68,400 223,071 3,251 9,315 50 12,480 1,470 5 4,566 490 105 3 3,243 0 0 27,090 100 5 0 7,975 5 9,300 10,076 2 10 10,809 0 80,950 60 31,839 0 Net book value Rls(m) 5,817 24 2,683,653 1,730,630 68,400 884,623 15,483 240,000 9,315 1,470 4,566 10 253,473 45,204 105 3,243 27,090 7,975 61,064 215,625 0 Rls(m) Net book value ) ) ) Group
8,331 8,331 8,331 ( 0 0 ( 0 0 0 0 0 0 0 ( 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Accumulated Accumulated impairment value Rls(m) 0 0 0 Rls(m) Accumulated value impairment Parent Company
2019 2019
2,691,984 1,730,630 68,400 892,954 15,483 240,000 9,315 1,470 4,566 10 253,473 53,535 101 490 105 2,674 0 2,022,100 150 3,243 1,730,629 614 68,400 223,071 3,251 9,317 50 27,090 12,480 1,470 5 4,566 490 105 7,975 3 3,243 0 0 27,090 100 5 0 61,064 7,975 5 9,300 10,076 2 10 10,809 215,625 0 80,950 60 31,839 Cost Rls(m) 0 5,817 0 24 Rls(m) Cost 41 12 3.87 20.00 1.31 15.00 0.76 99.70 100.00 94.15 0 0 0.07 0 0 0 6.42 41 0 12 0.04 131 3.33 0.30 0.07 1480 48 76 49 7 3.19 0.02 642 30 0 75.25 319 10 49 8 0.30 99.70 165 96.69 10 174 3 69 Investment Percentage 0 10.50 0 Percentage Investment
1,638,517,512 12,000,000 15,482,880 24,000,000 22,304,000 148,000 4,566,000 9,970 249,999,994 46,529,003 189,522 490 874,999 2,672,000 0 150,000 963,246 1,638,517,512 100,000 12,000,000 719,144 22,304,000 499,998 1,629,000 27,090,000 148,000 7,209,990 4,566,000 49 874,999 15,950,000 20 3,124 963,246 20 100,000 500 27,090,000 0 37,624,000 15,950,000 500 1,941,751 1,200,000 2,469 9,970 2,666,789 10 21,175,000 6,270,741 100,000 10,323,606 Number of shares 0 6,300,000 24,161 Number of shares Acquired Acquired Acquired Acquired Acquired Acquired Acquired Established Established Established and acquired Acquired Acquired Established Acquired Acquired Acquired Acquired Acquired Acquired Acquired Acquired Acquired Acquired Acquired Acquired Acquired Acquired Acquired Acquired Established Acquired Established Acquired Origination Origination
12-2-2- Long-term investments in other shares Investment prepayment in Saman Investment Development Co. shares Added: Investment prepayment in C.I.P. shares (Iranian Pars Technology) Adonis IT Service Development Co. Kish Cell Pars Co. Shaparak Electronic Payment Co. Saman Aftab Tejarat Iran Energy Exchange Saman Financial & Economic Development Group Saman Processing (Pardazeshgaran) Co. Hafez Saman Iranian Credit Scoring Co. Stock Exchange Co. Iran Credit Rating Co. Iran Investment Co. Central Securities Depository and Settlement Co. Saman Brokerage Co. Saman Exchange Co. Saman Satelite Communication Co. Saman Investment Development Co. Exchange Information and Services Co. Segal IT Software Co. Middle East Bank-right issue Investment prepayment in Saman Development Co. shares Middle East Bank Investment prepayment in C.I.P. shares (Iranian Pars Technology) Added: Karoon Cement Co. Alborz Pharmaceutical Raw Materials Tehran Stock Brokers' Co. Shaparak Electronic Payment Co. Iran Energy Exchange Saman Aftab Tejarat Persian Gulf International Goods and Services Iran Energy Exchange Sarv Zarrin Atlas Stock Exchange Co. Saman Kish Electronic Payment Behnad Bana Development Co. Iran Credit Rating Co. Saman Aftab Tejarat Atieh Alborz Trade Development Co. Tosee Omid Atieh Andish Co. Iran Investment Co. Kardan Investment Bank Central Securities Depository and Settlement Co. Alvand Tile Saman Aftab Tejarat Co. Saman Satelite Communication Co. Tehran Stock Exchange Atieh Alborz Trade Development Tamin Maseh Rikhtegari AtiehAndishan Sepehr Shargh Tabas Coal Production Saman Insurance Co. Iran Farabourse Rightel Ijareh Bonds Middle East Bank Ghaemshahr Textile Co.
94 Annual Report 95 12-2-3- Details of Saman Bank subsidiary and affiliated companies are as follows: 13- Long-term investments in affiliated companies
Domicile Invesment percentage Auditing firm Main activities Group Group Parent Company Share of net Share of total net Goodwill Subsidiaries assets assets
Investment, brokerage and Rls(m) Rls(m) Rls(m) Saman Brokerage Co. Tehran 0 75 Sokhan Hagh financial services Balance at the beginning of the year 1,637,880 110,360 1,748,240 Hafez Saman Iranian Credit Credit rating services, preventive Tehran 0 94 Sokhan Hagh measures of past-due claims, and Asquisition during the year 0 0 0 Scoring Co. follow-up and collection of claims Partial payment of subscribed capital 0 0 0 Scientific and research activities Tondar Noor Tehran 74 0 Sokhan Hagh in computer development and sale Share of profit in affiliates before goodwill depreciation (43,169) 0 (43,169) of software Dividends received or receivable during the year 0 0 0 Azmoon Pardaz Saman Exchange Co. Tehran 0.00 96.46 Trading foreign currencies Goodwil depreciation 0 0 0 Iran Mashhood Change in category/clssification (1,340,216) (110,360) (1,450,576) Saman Processing Design, development and support Tehran 0 100 Sokhan Hagh of core banking-based products, 254,495 0 254,495 (Pardazeshgaran) applications and tools
Saman Financial and Tehran 0 100 Bayat Rayan Provision of technical and Economic Development Group engineering services 14- Amounts due from subsidiaries and affiliates Atieh Andishan Sepehr Shargh Ajabshir 100 0 Bayat Rayan Production of iron ingots from iron Services Development scrappings Group Provision of technical and Atieh Andishan Sepehr Mehr Azmoon Pardaz 2019 2018 Tehran 100 0 engineering services, purchase Co. Iran Mashhood and sale of all authorized goods Doubtful debts and commodities Balance due Net Net provision Affiliates Rls(m) Rls(m) Rls(m) Rls(m)
Operator and telecommunication Due from subsidiaries 628,332 0 628,332 458,720 Kish Cell Pars Co. Kish Island 20.0 20.0 Roshangar Basir services Due from affiliates 0 0 0 0 Provision of services in IT, 628,332 0 628,333 458,720 Adonis Electronic Services Co. Tehran 20.33 4 Mokhtar and Co. computer devices, electronic and telecommunication equipment
Parent Company 12-3- Investments in other securities are as follows: 2019 2018 Doubtful debts Balance due Net Net Issuer Origination Type of security Interest rate 2019 2018 provision Percentage Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Government and state-run corporations Due from subsidiaries 2,428,333 0 2,428,333 2,928,844 Shahrivar Sevom Intermediary Co. Purchase Sukuk Bonds 20 291,190 291,190 Due from affiliates 0 0 0 0 Ministry of Economic Affairs & Finance Purchase Islamic treasury bonds 0 0 10,000 2,428,333 0 2,428,333 2,928,844 Tir Sevom Intermediary Co. (Ltd.) Purchase Sukuk Bonds 20 1,998 1,898 Mehr Intermediary Co. (Ltd.) Purchase Sukuk Bonds 20 0 55 Bahman Sevom Intermediary Co. (Ltd.) Purchase Sukuk Bonds 17 34,800 34,800 Shahrivar Chaharom Intermediary Co. (Ltd.) Purchase Sukuk Bonds 20 0 3,033,200 Banks Other companies and mutual funds Novin Saman Fixed-Income Fund Establishment Privileged investment unit 0 0
Ordinary & privileged Saman Joint Venture Fund - Yekom Establishment 4.85 10,000 10,000 invest units
Agah Charity Fund - Yekom Establishment Privileged investment unit 20.57 2,500 2,500 Amin Saman Mutual Fund Establishment Privileged investment unit 18.59 10,000 10,000 Iran Capital Market Development Mutual Fund Establishment Ordinary investment unit 22.73 35,000 35,000 Nik-Andishan Honar Charity Mutual Fund Purchase Ordinary investment unit 24.90 0 2,535 Negin Saman Fixed-Income Fund Establishment Privileged investment unit 17.99 561,934 49,000 Sahm Ashna Yekom special market-making fund Purchase Privileged investment unit 122,203 0 Tir Yekom Intermediary Co. (Ltd.) Purchase Sukuk Bonds 20 0 800 Khordad Dovom Intermediary Co. (Ltd.) Purchase Sukuk Bonds 21 29,938 29,938 Mehr Yekom Intermediary Co. (Ltd.) Purchase Sukuk Bonds 20.00 0 50 1,099,563 3,510,966
96 Annual Report 97 14-1- Considering the fact that the fiscal year of Group Companies will end on 21st December of each year (end 14-3- Pursuant to the directive adopted by the Money and Credit Council (Note 8-6), the amounts due from of Azar based on the Iranian calendar year) namely three months earlier than the end of the bank’s fiscal subsidiary and affiliated companies are classified as follows: year, the amounts due from subsidiaries have not been entirely eliminated in consolidated operations. Whereas such amounts do not affect the consolidated financial statements in its entirety, adjustments 2019 have not been therein made (in accordance with the accounting standards). Doubtful Current Overdue Outstanding Total 14-2- The balances of the parent company’s receivables from subsidiaries and affiliates based on the inter- debts group transactions consist of the following: Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Due from subsidiaries 2,428,333 0 0 0 2,428,333 2019 Due from affiliates 0 0 0 0 0 Provisional Provisional Assets and Assets and Services amounts amounts Dividends Dividends Dividends Net amounts due from subsidiaries and affiliates before Name of subsidiary/affiliate investments investments Total purchased received paid recievable recievable payable 2,428,333 0 0 0 2,428,333 sold purchased deduction of doubtful debts provision (on-account) (on-account)
Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) General provision for doubtful debts 0 0 0 0 0 Saman Exchange Co. 0 0 5,564 0 5,086 0 241,150 0 251,800 Specific provision for doubtful debts 0 0 0 0 0 Balance at March 20, 2019 2,428,333 0 0 0 2,428,333 Hafez Saman Iranian 0 0 0 0 1,764 0 204,485 0 206,249 Credit Scoring Co. Balance at March 21, 2018 2,928,844 0 0 0 2,928,844
Saman Processing 0 19,227 0 0 12,835 0 0 0 32,062 (Pardazeshgaran) Saman Brokerage Co. 0 0 0 0 3,030 0 58,440 0 61,469 15- Other accounts receivable Adonis Co. 0 0 0 0 0 0 0 0 0 Satelite Communication Co. 0 0 0 0 0 0 0 0 0 Group Atieh Andishan Sepehr 0 1,454,397 0 0 0 0 213,052 0 1,667,449 2019 2018 Shargh Specific provision General provision Atieh Andishan Sepehr 0 0 0 0 9,304 0 0 0 9,305 Balance due for doubtful for doubtful Net Net Mehr debts debts
Atieh Andishan Sepehr Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Shargh Services 0 0 0 0 200,000 0 0 0 200,000 Dividends receivable 1,504,029 0 0 1,504,029 1,309,588 Development Interest accrued (realized) on 0 0 0 0 0 0 1,473,624 5,564 0 232,017 0 717,127 0 2,428,334 participation bonds Net transactions profit (loss) 0 Amounts due from personnel 0 0 0 0 0 Temporary debtors 49,232,150 (281,969) (14,718) 48,935,463 40,283,302 50,736,179 (281,969) (14,718) 50,439,492 41,592,890 2018
Provisional Provisional Assets and Assets and Services amounts amounts Dividends Dividends Dividends Name of subsidiary/affiliate investments investments Total purchased received paid recievable recievable payable sold purchased (on-account) (on-account) Parent Company
Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Note 2019 2018
Saman Exchange Co. 0 0 5,564 0 5,080 0 331,879 0 342,523 Specific provision General provision Balance due for doubtful for doubtful Net Net Hafez Saman Iranian 0 0 0 0 26,144 0 71,365 0 97,509 debts debts Credit Scoring Co. Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Saman Processing 0 62,423 0 0 172,583 0 31,500 0 266,506 (Pardazeshgaran) Dividends receivable 15-1 1,307,774 0 0 1,307,774 1,301,604 Interest accrued (realized) Saman Brokerage Co. 0 0 0 0 1,785 0 5,765 0 7,549 0 0 0 0 0 on participation bonds Adonis Co. 0 0 0 0 0 0 0 0 0 Amounts due from personnel 0 0 0 0 0 Satelite Communication Co. 0 0 0 0 2,897 0 19,235 0 22,132 Temporary debtors 15-2 47,421,019 (154,051) (14,718) 47,252,250 39,058,177 Atieh Andishan Sepehr 0 1,970,676 0 0 30 0 2,518 0 1,973,224 Shargh 48,728,793 (154,051) (14,718) 48,560,024 40,359,781
Atieh Andishan Sepehr 0 0 0 0 9,304 0 0 0 9,304 Mehr
Atieh Andishan Sepehr Shargh 0 0 0 0 210,097 0 0 0 210,097 Services Development
0 2,033,099 5,564 0 427,920 0 462,262 0 2,928,844 Net transactions profit (loss) 0
98 Annual Report 99 15-1- The balances of dividends receivable excluding the dividends from subsidiaries and affiliates are as follows: 15-2- Balances due by temporary debtors consist of the following:
2019 2018 2019 2018 Rls(m) Rls(m) Rls(m) Rls(m) Companies listed on the Stock Exchange and Farabourse (OTC) Items related to loan facilities Shomal Drilling Co. 11,019 22,038 Proceeding and debt collection costs 2,859,421 2,654,871 Housing Investment Co. 4,090 4,090 2,859,421 2,654,871 Mines and Metals Development Co. 358 6,880 Items unrelated to loan facilities Barez Industrial Co. 0 2 Debtors for sale of assets 42,695,141 35,082,461 Bahman Group 0 5,349 Debtors for sale of investments 238,634 751,000 Tooka Foulad Investment 12,751 19,992 Debtors for financial fraud (abuses) 0 0 Sepah Investment Co. 0 8,800 Temporary debtors of forex 1,054,686 699,182 Tooka Transport Co. 978 908 Other 573,137 39,432 Rayan Saipa 28 28 44,561,598 36,572,075 Isfahan Mobarakeh Steel Mill 0 1,446 47,421,019 39,226,946 Mapna Group 1,623 1,180 Saman Insurance Co. 1,946 5 Iran Pump Manufacturing Co. 4,218 4,218 15-3- Pursuant to the directive adopted by the Money and Credit Council (Note 8-6), other accounts Hamedan Glass Works 12,242 12,242 receivable are classified as follows: Middle East Bank 0 20,231 2019 Saman Kish Electronic Payment Co. 834,106 832,577 Current Overdue Outstanding Doubtful Total Kardan Investment Bank 414,109 352,856 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Others 4,976 5,360 Dividends receivable 1,307,774 0 0 0 1,307,774 1,302,444 1,298,202 Interest accrued (realized) on participation bonds 0 0 0 0 0 Other companies Amounts due from personnel 0 0 0 0 0 Saman Aftab Tejarat 3,705 3,402 Temporary debtors 44,561,598 0 0 2,859,421 47,421,019 Iran Investment 1,625 0 Net other accounts receivable before deduction of 45,869,372 0 0 2,859,421 48,728,794 5,330 3,402 doubtful debts provision 1,307,774 1,301,604 General provision for doubtful debts (14,718) 0 0 0 (14,718) Specific provision for doubtful debts 0 0 0 (154,052) (154,052) Balance at March 20, 2019 45,854,654 0 0 2,705,369 48,560,024 Balance at March 21, 2018 37,873,679 0 0 2,654,871 40,359,781
100 Annual Report 101 )
16- Orders and prepayments ) ) ) )
) ) )
28,872 132,091 751,995 411,246 26,764 292,041 1,074,190 46,281 2,425,658 857,681 ( 0 3,254,468 4,142,136 3,668,807 5,405,118 Group 6,091,860 1,297,936 ( ( ( 6,094,466 3,958,122 ( ( ( 8,659,594 1,949,724 516,458 ( 5,757 Total Rls(m) 2019 2018
Rls(m) Rls(m) ) )
Prepayments 48,705 40,532
230,666 502,121 114,856 141,835 210,816 Capital items in stock Rls(m) Orders 1,478 23,296 114,856 257,645 0 0 ( 141,835 571,102 0 0 ( 210,816 50,183 63,828 ) )
)
8 75,688 31,623 96,090 97,291 91,332 Orders and capital prepayments Rls(m) 17- Inventory (materials and goods) 96,090 76,897 0 ( ( 97,291 25,665 0 0 ( 91,332 ) ) )
Group
2019 2018 121,313 188,250 412,992 550,460 749,180 196,938 Assets in process of completion Rls(m) 550,460 320,033 0 0 ( 749,180 49,000 0 ( ( 196,938 Rls(m) Rls(m)
Inventory in stock 394,544 220,773
) Ongoing projects (in the process of completion) 3,683 35,037
5,731 136,035 17,777 0 0 153,813 22,895 51,767 217,873 Renovation and improvement in leased buildings Rls(m) 398,227 255,810 145,295 48,238 0 0 ( 187,802 119,752 0 0 64,131 371,685 122,400 13,635 0 0
) ) ) ) ) Group
17-1- The inventory of goods and spare parts owned by the Group has been put under insurance coverage up
25,030 220 195 26,038 195 1,883,868 739,616 ( ( 2,598,234 1,216,836 972,547 562,442 Furniture and fixtures Rls(m) to the amount of Rls. 165,000/- million against possible risks and accidents resulting from fire, flood and 2,686,377 170,233 0 ( 0 2,856,415 330,216 57 ( 31 3,160,676 1,469,541 414,522 ( 0 earthquake.
) ) )
368 453 368 16,095 ( 0 84,953 58,112 49,230 41,801 Vehicles Rls(m) 111,656 0 0 ( 7,252 118,455 8,667 0 ( 0 126,754 53,545 15,162 519 0 69,226
11,958 0 220 134,684 184,049 215,715 207,309 Equipment Rls(m) 275,337 62,883 0 0 0 338,220 3,773 0 0 0 341,993 91,288 31,216 0 0 122,504
) )
5 5 5,314 ( 0 22,591 8,967 8,511 3,417 Installations Rls(m) 21,670 4,122 0 0 0 25,792 221 0 ( 0 26,008 12,703 4,579 0 0 17,282
) )
) ) )
)
3,469 464,985 10,198 25,276 259,333 46,605 66,920 ( 0 260,195 988,217 837,544 1,537,499 Buildings Rls(m) 1,188,464 191,126 104,783 ( 14,900 1,034,288 1,058,212 ( ( ( 1,797,694 200,247 37,345 ( 5,757 196,744
) )
) )
236,874 286,354 16,623 52,105 0 0 901,655 545,188 2,335,691 Land Rls(m) 901,655 166,759 ( ( 0 545,188 1,791,514 ( ( 67,717 2,335,691 0 0 0 0 0 Depreciation during the year and value impairment Assets sold Transfers and other changes Balance at March 20, 2019 Book value At March 21, 2017 At March 20, 2018 At March 20, 2019 Cost price Balance at March 21, 2017 Increased during the year Increase (decrease) from revaluation Assets sold Transfers and other changes Balance at March 20, 2018 Increased during the year Increase (decrease) from revaluation Assets sold Transfers and other changes Balance at March 20, 2019 Accumulated depreciation and accumulated value impairment Balance at March 21, 2017 Depreciation during the year and value impairment Assets sold Transfers and other changes Balance at March 20, 2018 18- Tangible fixed assets
102 Annual Report 103 )
18-1- The book value of revaluated land and buildings on the cost price basis is described as follows: ) ) ) )
) ) )
2019 2018
28,192 132,091 751,869 411,246 26,821 290,589 1,072,487 47,127 ( 0 2,485,748 3,613,037 2,972,625 4,551,267 5,277,256 1,082,143 ( ( ( 5,064,194 3,362,717 ( ( ( 7,037,014 1,664,220 474,476 ( 0 2,091,569 422,371 Total Rls(m) Based on cost price Based on revaluation Based on cost price Based on revaluation Rls(m) Rls(m) Rls(m) Rls(m)
) )
Land 841,500 2,206,239.56 860,696 415,738 Buildings 1,017,136 961,411 702,053 777,578
230,666 502,121 115,098 142,077.0 211,059 Capital items in stock Rls(m) 115,098 257,645 0 0 ( 142,077 571,103 0 0 ( 211,059 1,858,636 3,167,651 1,562,749 1,193,316
) )
)
All tangible fixed assets owned by the bank have been insured up to the amount of Rls. 5,553,493/- million
8 75,688 31,623 18-2- 90,272 19,555.1 11,873 Orders and capital prepayments Rls(m) 90,272 4,979 0 ( ( 19,555 23,942 0 0 ( 11,873 against possible risks and accidents arising from fire, flood and earthquake. Motor vehicles have also been put under body insurance coverage up to the amount of Rls. 180,251/- million and a large amount of
) ) )
the properties which are being foreclosed is related to the real estate owned by Bazar Kaffashha Branch.
Furthermore, the tangible fixed assets and motor vehicles owned by the group have been insured up to
121,313 188,250 412,992 447,555 601,241.9 49,000 Assets in process of completion Rls(m) 447,555 275,000 0 0 ( 601,242 49,000 0 ( ( 49,000 the amount of Rls. 3,209,169/- million against possible risks and accidents resulting from fire, flood and earthquake.
)
5,731 0 0 153,813 22,895 51,767.0 217,873 Renovation and improvement in leased buildings Rls(m) 145,295 48,238 0 0 ( 187,802 119,752 0 0 64,131 371,685 122,400 13,635 0 0 136,034 17,778
) ) Parent Company ) )
24,949 195 25,974 195 0 2,179,516 1,187,955 943,916.3 907,364 Furniture and fixtures Rls(m) 2,623,254 164,418 0 ( 0 2,787,478 325,375 0 ( 0 3,086,879 1,435,299 408,457 ( 0 1,843,562 360,902 (
) ) ) )
328 368 328 368 0 78,499 50,802 42,892.4 34,468 Vehicles Rls(m) 100,007 0 0 ( 7,252 106,931 6,403 0 ( 0 112,967 49,204 15,162 ( 0 64,039 14,828 (
) )
5 5 0 22,533 8,967 8,509.6 3,365 Installations Rls(m) 21,670 4,122 0 0 0 25,792 111 0 ( 0 25,898 12,703 4,579 0 0 17,283 5,255 (
) )
) ) )
)
464,985 10,198 23,888 257,599 46,605 2,871 0 51,388 895,097 746,927.2 910,024 Buildings Rls(m) 939,710 183,170 104,783 ( 14,900 777,578 475,518 ( ( ( 961,412 44,614 32,643 ( 0 30,651 23,608 (
) )
) )
236,874 286,354 16,623 52,105 0 0 794,396 415,738.8 2,206,242 Land Rls(m) 794,396 144,570 ( ( 0 415,739 1,791,514 ( ( 67,717 2,206,242 0 0 0 0 0 0 0 Transfers and other changes Balance at March 20, 2019 Book value At March 21, 2017 At March 20, 2018 At March 20, 2019 Cost price Balance at March 21, 2017 Increased during the year Increase (decrease) from revaluation Assets sold Transfers and other changes Balance at March 20, 2018 Increased during the year Increase (decrease) from revaluation Assets sold Transfers and other changes Balance at March 20, 2019 Accumulated depreciation and accumulated value impairment Balance at March 21, 2017 Depreciation during the year and value impairment Assets sold Transfers and other changes Balance at March 20, 2018 Depreciation during the year and value impairment Assets sold
104 Annual Report 105 19- Intangible assets
Group Parent Company
Goodwill for Software Royalty to use Goodwill for Software Royalty to use Software Total Software Total place of business development public utilities place of business development public utilities
Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Cost price Cost price Balance at March 21, 2017 4,203,368 188,850 15,957 37,270 4,445,444 Balance at March 21, 2017 4,203,368 193,263 0 21,548 4,418,179 Increased during the year 317,516 147,618 0 525 465,659 Increased during the year 317,516 147,619 0 525 465,660 In-company development plan 0 0 0 0 0 In-company development plan 0 0 0 0 0 Increase (decrease) from revaluation (760,086) 0 0 0 (760,086) Increase (decrease) from revaluation (760,086) 0 0 0 (760,086) Assets sold (1,738,482) 0 0 0 (1,738,482) Assets sold (1,738,482) 0 0 0 (1,738,482) Transfers and other changes 0 (48,098) 0 (22) (48,121) Transfers and other changes 0 (1,821) 0 (22) (1,843) Balance at March 20, 2018 2,022,316 288,370 15,957 37,773 2,364,415 Balance at March 20, 2018 2,022,316 339,061 0 22,051 2,383,427 Balance at March 21, 2018 2,022,316 288,370 15,957 37,773 2,364,415 Balance at March 21, 2018 2,022,316 339,061 0 22,051 2,383,427 Increased during the year 2,484,391 481,261 2,425 744 2,968,821 Increased during the year 2,435,402 475,473 0 488 2,911,365 In-company development plan 0 0 0 0 0 In-company development plan 0 0 0 0 0 Increase (decrease) from revaluation (6,596) 0 0 0 (6,596) Increase (decrease) from revaluation (6,581) 0 0 0 (6,581) Assets sold (49,298) 0 0 0 (49,298) Assets sold (49,313) 0 0 0 (49,313) Transfers and other changes 0 (1,095) 0 0 (1,095) Transfers and other changes 0 0 0 0 0 Balance at March 20, 2019 4,450,813 768,536 18,382 38,517 5,276,247 Balance at March 20, 2019 4,401,824 814,534 0 22,539 5,238,897
Accumulated depreciation and Accumulated depreciation and accumulated value impairment accumulated value impairment
Balance at March 21, 2017 0 (133,810) 0 (15,030) (148,840) Balance at March 21, 2017 0 (116,989) 0 0 (116,989) Depreciation during the year 0 (50,097) 0 (147) (50,244) Depreciation during the year 0 (50,097) 0 0 (50,097) Value impairment loss 0 0 0 0 0 Value impairment loss 0 0 0 0 0 Assets sold 0 0 0 0 0 Assets sold 0 0 0 0 0 Transfers and other changes 0 16,188 0 0 16,188 Transfers and other changes 0 0 0 0 0 Balance at March 20, 2018 0 (167,719) 0 (15,177) (182,896) Balance at March 20, 2018 0 (167,086) 0 0 (167,086) Balance at March 21, 2018 0 (182,450) (5,062) 8,719 (178,794) Balance at March 21, 2018 0 (167,086) 0 0 (167,086) Depreciation during the year 0 (159,704) (4) 0 (159,708) Depreciation during the year 0 (119,482) 0 0 (119,482) Value impairment loss 0 0 0 0 0 Value impairment loss 0 0 0 0 0 Assets sold 0 (77) 0 0 (77) Assets sold 0 0 0 0 0 Transfers and other changes 0 0 (66) 0 (66) Transfers and other changes 0 0 0 0 0 Balance at March 20, 2019 0 (350,951) (5,133) 8,719 (338,645) Balance at March 20, 2019 0 (286,568) 0 0 (286,568) Book value Book value At March 21, 2017 4,203,368 55,040 15,957 22,240 4,296,604 At March 21, 2017 4,203,368 193,263 0 21,548 4,418,179 At March 20, 2018 2,022,316 120,651 15,957 22,595 2,181,127 At March 20, 2018 2,022,316 171,975 0 22,051 2,216,341 At March 20, 2019 4,450,813 417,585 13,249 47,236 4,928,883 At March 20, 2019 4,401,824 527,966 0 22,539 4,952,329
106 Annual Report 107 19-1- The book value of the revaluated goodwill for place of business on the cost price basis is described as follows: 21-1- Customers’ net debts for term LCs
2019 2018 2019 2018 Based on cost price Based on revaluation Based on cost price Based on revaluation Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Customers' debts for term LCs (Rial) 13,585 7,290 Goodwill for place of business 1,296,995 4,401,824 1,301,612 2,022,316 Customers' debts for term LCs (Forex) 319,503 2,127,749 1,296,995 4,401,824 1,301,612 2,022,316 333,088 2,135,039 Less: 20- Statutory deposit Advances and mid-payments received for term LCs (Rial) (2,580) (215,982) Advances and mid-payments received for term LCs (Forex) (22,706) (60,328) General provision for doubtful debts 0 0 2019 2018 307,802 1,858,727 Rls(m) Rls(m) Statutory deposit - deposits of mainland branches (Rial) 35,610,882 27,262,396 Statutory deposit - deposits of mainland branches (Forex) 0 0 21-2- Foreclosed collaterals/properties Statutory deposit - deposits of free zones branches (Rial) 187,380 216,169 The composition of the foreclosed collaterals balance breaks down as follows: Statutory deposit - deposits of free zones branches (Forex) 0 0 Statutory deposit placed with central banks of other countries (Forex) 0 0 Foreclosed during Sold/transferred 2018 2019 35,798,262 27,478,565 the year during the year
Rls(m) Rls(m) Rls(m) Rls(m) Movable properties 20-1- The statutory deposits placed with the Central Bank of of Iran (CBI) pursuant to paragraph 3 of article 14 of Furniture 0 0 0 0 the Monetary and Banking Law has been calculated on the basis of the rates determined by the Money and Credit Council and approved by the Central Bank of of Iran (CBI). Equipment 0 0 0 0 Goods 0 0 0 0 21- Other assets Motor vehicles 0 0 0 0 0 0 0 0 Immovable properties Group Parent Company Residential properties 7,139,787 1,408,125 (1,269,171) 7,278,741 Note 2019 2018 2019 2018 Business/Offiice properties 11,237,317 3,294,435 (3,840,072) 10,691,679 Rls(m) Rls(m) Rls(m) Rls(m) Factory/plant 4,679,958 57,898 (486,771) 4,251,085 Customers' net debts for term LCs 21-1 307,802 1,858,727 307,802 1,858,727 Land 2,675,855 513,294 (58,642) 3,130,507 Non-operating real estates 0 0 0 0 25,732,917 5,273,752 (5,654,656) 25,352,012 Foreclosed collaterals 21-2 25,161,015 25,661,993 25,352,012 25,732,917 25,732,917 5,273,752 (5,654,656) 25,352,012 Advance deposits for leased buildings 2,065,196 1,570,989 2,065,196 1,570,990 Accumulated value impairement 0 0 Assets insurance prepayment 0 0 0 0 25,732,917 25,352,012 Prepayment for leased branches 12,016 29,707 12,016 29,707 Profit (loss) from sales 7,398,403 7,415,496 Inventory of supplies 0 0 0 0 Items in transit 0 0 0 0 Gold and silver 0 0 21-2-1- The age of the balance of immovable foreclosed collaterals breaks down as follows: Tax stamp 2,598 3,019 2,598 3,019
Tax prepayment 8,067 7,070 0 0 2019 2018 Other prepayments 701,701 0 701,701 0 Rls(m) Rls(m) Consolidated goodwill 21-3 42,997 51,104 0 0 Less than a year from the foreclosure date 1,875,274 10,428,417.34 Payment for new asquisition 1,449,445 2,474,233 1,449,445 2,474,233 One year or two years from the foreclosure date 8,282,672 3,986,573 Other 21-4 8,756,172 3,790,869 8,865,008 3,783,328 Over two years from the foreclosure date 15,194,066 11,317,927 38,507,009 35,447,711 38,755,778 35,452,920 25,352,012 25,732,917
21-2-2- The profit (loss) from the sale of foreclosed collaterals has been disclosed in the statement of profit and loss under note No. 47. 21-2-3- The amount of Rls. 780 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 goodwill).
108 Annual Report 109 21-3- Goodwill 23- Customers’ deposits Details of goodwill from the consolidated statements under note (8-11 of significant accounting policies) are as follows: Group Parent Company Note 2019 2018 2019 2018 Group Rls(m) Rls(m) Rls(m) Rls(m) 2019 2018 Rls(m) Rls(m) Real persons Cost at the beginning of the year 84,467 70,974 Demand deposits and similar deposits 23-1 5,721,951 3,845,821 7,635,752 5,721,951 Goodwill acquired during the year 0 13,493 Savings deposits and similar deposits 23-2 2,903,702 620,481 10,802,441 2,903,702 Adjusted goodwill from sale 2 0 Other deposits and advance payments 23-3 48,855 52,989 63,233 48,855 Cost at year-end 84,469 84,467 8,674,508 4,519,291 18,501,426 8,674,508 Accumulated depreciation at the beginning of the year (33,364) (25,256) Legal persons Depreciation during the year (8,108) (8,108) Demand deposits and similar deposits 23-1 35,833,867 11,024,790 33,237,789 9,085,582 Adjustment of accumulated depreciation from sale 0 0 Savings deposits and similar deposits 23-2 15,817,482 7,984,186 7,924,703 5,704,018 Accumulated depreciation at year-end (41,472) (33,364) Other deposits and advance payments 23-3 5,877,612 2,926,936 5,868,096 2,935,225 Book value 42,997 51,104 57,528,961 21,935,912 47,030,588 17,724,825 66,203,469 26,455,203 65,532,014 26,399,333
21-4- If the balance of items in transit remains in credit, it shall be reflected in the note to other liabilities. 23-1- Demand deposits and similar deposits for natural and legal customers 22- Due to banks and other credit institutions Group Parent Company
Group Parent Company 2019 2018 2019 2018 Note 2019 2018 2019 2018 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Gharzolhassaneh (interest-free) deposits (Rial) 18,835,267 9,030,397 18,996,731 9,069,296 Central Bank of Iran (CBI) Gharzolhassaneh (interest-free) deposits (Forex) 70,214 106,913 70,214 106,913 Deposit (Rial) 0 0 0 0 Various bank checks sold 1,122,636 1,126,844 1,122,636 1,126,844 Term deposits (Forex) 82,297,512 36,713 82,297,512 36,713 Customers' account with overseas branches 0 0 0 0 Demand deposits (Forex) 0 1,837,145 0 1,837,145 Unclaimed balances (Rial) 0 0 0 0 Debt for differences in foreign exchange rates 0 0 0 0 Unclaimed balances (Forex) 808,080 501,927 808,080 501,927 Debt for foreign exchange reserves account 2,810,340 2,810,340 2,810,340 2,810,340 Interim credit accounts (temporary creditors) (Rial) 19,871 10,313 19,871 10,313 Facilities received (Rial) 0 0 0 0 Interim credit accounts (temporary creditors) (Forex) 0 0 0 0 Facilities received (Forex) 0 0 0 0 Drafts drawn on the bank (Rial) 2,380,538 1,604,221 1,536,797 1,502,243 Debit balance of current account for overdraft 0 0 0 0 Drafts drawn on the bank (Forex) 18,255,709 2,448,555 18,255,709 2,448,555 Other 0 0 0 0 85,107,852 4,684,198 85,107,852 4,684,198 Unused managed cash (Rial) 88,961 67,290 88,961 67,290 Local banks and credit institutions: Unused managed cash (Forex) 5,915 5,513 5,915 5,514 Demand deposits (Rial) 377 2,751 377 2,751 Less: Demand deposits (Forex) 4,186,536 571,445 4,186,536 571,445 Account for the bank's checks sold (unsettled) (31,373) (31,362) (31,373) (31,362) Payment of checks issued by other banks 0 0 0 0 41,555,818 14,870,611 40,873,541 14,807,533 Facilities received (Rial) 381,297 200,894 0 0 Facilities received (Forex) 0 0 0 0 Other 22-1 2,601,448 3,106,991 2,601,448 3,106,991 23-2- Savings deposits and similar deposits – for real and legal persons 7,169,658 3,882,081 6,788,361 3,681,187 Foreign banks: Demand deposits (Rial) 0 0 0 0 Group Parent Company Demand deposits (Forex) 797 648,929 797 648,929 2019 2018 2019 2018 Facilities received (Forex) 0 0 0 0 Rls(m) Rls(m) Rls(m) Rls(m) Debit balance of current account for overdraft 0 0 0 0 Gharzolhassaneh (interest-free) deposits (Rial) 8,950,900 6,396,159 8,956,859 6,399,213 Other 0 0 0 0 Gharzolhassaneh (interest-free) deposits (Forex) 9,770,276 2,208,502 9,770,276 2,208,502 797 648,929 797 648,929 Savings deposits - overseas branches 0 0 0 0 92,278,307 9,215,208 91,897,010 9,014,314 Gharzolhassaneh (interest-free) deposits 0 0 0 0 - for young people Special unused Gharzolhassaneh (interest-free) deposits 8 6 9 5 22-1- This amount represents the difference in settlement time via the Shetab Payment System in Saman Bank Personnel savings account 0 0 0 0 and the CBI (cut-off period). Personnel pension fund 0 0 0 0 • The investment deposits received from foreign and local banks in rial and foreign currency are classified like other investment deposits in Savings deposits for housing project 0 0 0 0 the section of “investment depositors’ equity” with a view to maturities. 18,721,184 8,604,667 18,727,144 8,607,720
110 Annual Report 111 23-3- Other deposits and advance payments 26-1- Provision for income tax The bank’s income taxes for all years before 2015 have been finalized and paid and a summary statement of taxes Group Parent Company paid for the years 2016, 2017, 2018 and 2019 is as follows: 2019 2018 2019 2018 Rls(m) Rls(m) Rls(m) Rls(m) 2019 2018 Cash deposits for LGs (Rial) 1,357,464 846,507 1,362,327 850,662 Tax Cash deposits for LGs (Forex) 3,716 5,163 3,716 5,163 Profit (loss) Taxable Provision Method of tax Fiscal year Tax Tax Provision declared income Finalized Paid1 balance assessment Advance received for LCs (Rial) 2,846,879 429,080 2,846,879 429,080 declared assesed balance Advance received for LCs (Forex) 1,687,873 1,687,789 1,687,873 1,687,789 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Other 30,535 11,386 30,535 11,386 5,926,467 2,979,925 5,931,330 2,984,080 2016 102,751 2,612,268 0 653,067 615,750 550,270 0 0 Under appeal pending at the 2017 84,671 (788,547) 0 0 0 0 0 0 Tax Dispute Settlement 2018 1,018,366 3,813,151 953,288 0 0 Board. 24- Dividends payable 2019 5,143,292 0 0
Tax 0 0 Group Parent Company prepayments 2019 2018 2019 2018 0 0 Rls(m) Rls(m) Rls(m) Rls(m) Balance from prior years 26,317 62,283 51,510 52,483 1. It means the amounts paid to the Ministry of Economic Affairs and Finance. Dividends approved 109,271 363,383 0 0 Dividends paid (10,755) (399,350) 0 (973) 124,833 26,316 51,510 51,510 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. 24-1- A summary turnover of the said account in the parent company is as follows: 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 Cash Balance at Dividend Capital increase Balance at Approved is now pending by the Tax Dispute Settlement Panel. Furthermore, the amount of Rls. 3,768,034 million has dividend per March 20, paid during from accrued March 20, dividend share 2017 2017-2018 dividends 2019 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 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) now pending by the Tax Dispute Settlement Panel. Prior years 0 5,181,640 51,510 0 0 51,510 Fiscal year ended March 20, 2016 0 0 0 0 0 0 Fiscal year ended March 20, 2017 0 0 0 0 0 0 27- Provisions and other liabilities Fiscal year ended March 2, 2018 0 0 0 0 0 0 5,181,640 51,510 0 0 51,510 Group Parent Company 2019 2018 2019 2018 25- Advance payments Rls(m) Rls(m) Rls(m) Rls(m) Facilities received from National Development Fund 0 0 0 0
Group Due for term letters of credit (Rial) 1,233 16,685 1,233 16,685 2019 2018 Due for term letters of credit (Forex) 166,335 2,821,381 166,335 2,821,381 Rls(m) Rls(m) Interests and fees payable 0 0 0 0 Advance received 88,192 58,508 Insurance payable 0 0 8,626 6,930 88,192 58,508 Withholding taxes payable 44,145 26,711 8,597 7,387 Notes payable 271,501 8,624 0 0 26- Provision for corporation tax Allowance for leave entitlement (unused) 0 0 0 0 Provision for expenses payable 783,698 3,569,382 544,690 3,364,397 Items in transit 0 0 0 0 Group Parent Company Interbranch accounts 974,720 493,899 974,720 493,899 2019 2018 2019 2018 Rls(m) Rls(m) Rls(m) Rls(m) Due to persons/entities 0 668,046 0 668,046 Balance at the beginning of the year 72,727 88,841 0 0 Due to persons/entities- sale of real estate in Qeshm 0 76,049 0 76,049 Tax provision for the year 140,588 101,805 0 0 Accounts payable 2,158,475 0 2,158,474 0 Prior years' tax adjustments 0 0 0 0 Tax paid during the year (11,549) (43,511) 0 0 Other debts 9,298,608 2,381,961 4,829,615 1,014,271 Consolidated adjustments 0 0.0 0 0 13,698,716 10,062,738 8,692,291 8,469,046 201,766 147,135 0 0 Tax prepayments 0 0 0 0 Balance at the year-end 201,766 147,135 0 0
112 Annual Report 113
) 29- Investment depositors’ equity
30,295 691,033 184,015 0 ( 537,313 Rls(m) Total
Group Parent Company Note 2019 2018 2019 2018 Rls(m) Rls(m) Rls(m) Rls(m) 2018
0 0 0 0 0 Rls(m) Provision for pension benefits Term investment deposits Long-term investment deposits 29-1 152,524,859 143,328,095 152,526,670 143,329,907 Short-term investment deposits 29-1 141,890,779 103,179,925 143,621,971 104,384,219
) Special short-term investment deposits 29-1 62,108 2,883,910 62,108 2,883,910
30,295 691,033
184,015 Investment deposits received from banks and credit institutions 29-1 953,682 1,619,283 953,683 1,619,283 0 ( 537,313 Rls(m) Provision for employees' termination 295,431,428 251,011,213 297,164,432 252,217,319
) Interest payable on term investment deposits Parent Company
Long-term investment deposits 29-2 1,577,315 1,778,618 1,577,315 1,778,618 24,490 946,078 279,536 0 ( 691,032 Rls(m) Total Short-term investment deposits 29-2 33,825 368,629 33,825 368,629 Special short-term investment deposits 29-2 390 17,688 390 17,687 Investment deposits received from banks and credit institutions 29-2 0 0 0 0 2019
1,611,530 2,164,935 1,611,530 2,164,934
0 0 0 0 0 Rls(m) Provision for pension benefits 297,042,957 253,176,148 298,775,962 254,382,253
)
29-1-The term investment deposits by a breakdown of rial and foreign currency 24,490 946,078 279,536 0 ( 691,032 Rls(m) Provision for employees' termination
) 2019 2018 Rial Forex Total Rial Forex Total
44,577 724,836 203,731 0 ( 565,682 Rls(m) Total Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m)
Investment deposits received from banks 43 953,638 953,681 118 1,619,165 1,619,283 and credit institutions
2018 Ordinary short-term investment deposits 123,376,754 20,245,217 143,621,971 80,643,453 23,740,765 104,384,218
0 0 0 0 0 Rls(m) Provision for pension benefits Special short-term investment deposits Up to three months 7,345 0 7,345 2,533,404 0 2,533,404
) More than three to six months 27,267 0 27,267 126,484 0 126,484 More than six months to one year 27,496 0 27,496 224,022 0 224,022
44,577 724,836 203,731 0 ( 565,682 Rls(m) Provision for employees' termination Long-term investment deposits
Group General certificates of deposit 0 0 0 0 0 0
) Special certificates of deposit 0 0 0 0 0 0
36,570 997,770 309,503 0 ( 724,837 Rls(m) Total One-year term 151,227,945 0 151,227,945 133,286,131 0 133,286,131 Two-year term 2,820 0 2,820 3,529 0 3,529 Three-year term 0 0 0 1,546 0 1,546 Four-year term 31,114 0 31,114 54,496 0 54,496 2019
0 0 0 0 0 Rls(m) Provision for pension benefits Five-year term 1,264,793 0 1,264,793 9,984,206 0 9,984,206 275,965,577 21,198,855 297,164,432 226,857,389 25,359,930 252,217,319
) • 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.
36,570 997,770 309,503 0 ( 724,837 Rls(m) Provision for employees' termination • 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. Balance at the year-end Provisions covered during the year Consolidated adjustments Paid during the year Balance at the beginning of year 28- Provisions for employees’ termination and pension benefits
114 Annual Report 115 29-1-1- The long-term investment deposits in terms of maturity and interest rate 29-1-3- Turnover of investment deposits in Forex
2019 2018 Balance at March Deposits taken Repayment of Balance at Balance at Balance at 20, 2018 during the year deposits March 20, 2019 March 20, 2019 March 20, 2018 More than 19 to 22% 16 to 19 % 13 to 16% 10 to 13% 10% and less Total Total 22% Amount in Forex Amount in Forex Amount in Forex Amount in Forex Amount in Rial Amount in Rial
Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Matured 0 5,712 192 1,197 0 0 7,101 7,196 Long-term deposits 2018 0 7,405 11,736 21,279 0 0 40,420 16,622 US Dollar 0 0 0 0 0 0 2019 13,551,642 59,473,357 58,573,174 18,676,738 0 0 150,274,911 132,068,268 Euro 0 0 0 0 0 0 2020 8,477 144,923 320,791 1,628,201 0 0 2,102,392 10,993,415 UAE Dirham 0 0 0 0 0 0 2021 0 0 4,852 47,941 0 0 52,793 128,488 0 0 0 0 0 0
2022 and Special and ordinary 0 0 7,490 41,563 0 0 49,053 115,918 onward short-term deposits US Dollar 119,543,615.50 26,896,690.09 42,331,609.56 104,108,696.03 4,372,565 4,505,599 13,560,119 59,631,397 58,918,235 20,416,919 0 0 152,526,670 143,329,907 Euro 411,947,233.47 60,009,273.23 141,909,973.96 330,046,532.37 15,729,358 19,052,148 March ,20 13,343,342 91,581,495 6,799,706 31,605,177 0 186 143,329,907 2017 UAE Dirham 9,349,083.47 559,044.83 2,774,804.42 7,133,323.88 81,584 95,950 UK Pound 608,514.14 3,100.00 257,596.59 354,017.55 19,744 31,946 Australian dollar 718.35 0.00 0.00 718.35 20 20 29-1-2- Turnover of investment deposits in Rial Canadian dollar 58,145.96 0.00 100.00 58,045.96 1,829 1,672 Japanese YEN 6,057,357.45 1,243,555,217.93 1,207,831,053.62 41,781,521.76 15,772 2,158 Balance at Deposits taken Repayment of Balance at Swiss Franc 879,024.15 99,832.80 973,852.80 5,004.15 210 34,745 March 20, 2018 during the year deposits March 20, 2019 Turkish Lira 1,222,132.07 146,463,345.79 145,174,294.29 2,511,183.57 19,296 11,743 Rls(m) Rls(m) Rls(m) Rls(m) Chinese Yuan 1,000.37 3,184,493.83 3,184,493.83 1,000.37 6 6 General certificates of deposit 0 0 0 0 Russian Rouble 3,522,810.04 96,828,828.43 93,221,388.64 7,130,249.83 4,656 2,314 Special certificates of deposit 0 0 0 0 Omani Rial 4,000.00 0.00 2,391.43 1,608.57 177 392 One-year term 133,286,131 120,401,944 102,460,130 151,227,945 Qatari Rial 200,000.00 0.00 200,000.00 0.00 0 2,071 Two-year term 3,529 0 708 2,821 Investment deposits Three-year term 1,546 0 1,546 0 received from banks and credit institutions Four-year term 54,496 354 23,735 31,114 US Dollar 0.00 0.00 0.00 0.00 0 0 Five-year term 9,984,206 3,805 8,723,219 1,264,792 Euro 35,005,135.93 20,000,000.00 35,000,000.00 20,005,135.93 953,405 1,618,953 Ordinary short-term investment deposits 80,643,453 72,346,310 29,613,008 123,376,754 UAE Dirham 13,930.00 0.00 0.00 13,930.00 159 143 Special short-term investment deposits 2,883,910 121,094 2,942,896 62,108 UK Pound 1,326.25 0.00 0.00 1,326.25 74 70 Investment deposits received from banks and credit 118 0 75 43 institutions Korean WON 0.00 0.00 0.00 0.00 0 0
226,857,389 192,873,507 143,765,317 275,965,577 21,198,855 25,359,930
116 Annual Report 117 29-1-4- The composition of depositors of investment deposits breaks down as follows: 29-2- Interests payable on term investment deposits are as follows:
March 20, 2019 March 20, 2018 Group
Number Amount Number Amount Provisional Difference in Balance at Interest paid Balance at interest during provisional and depositor Rls(m) depositor Rls(m) during the year March 20 ,2018 the year final interest March 20 ,2019 Deposits in rial Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Legal persons 16,332 72,322,110 14,744 40,449,216 Ordinary short-term deposits 354,444 8,803,987 0 (9,136,945) 21,486 Real persons 2,184,496 203,643,425 2,034,515 186,408,055 Special short-term deposits 17,688 470,457 0 (487,755) 390 Investment deposits received from banks 1 42 3 118 General certificates of deposit 0 0 0 0 0 and credit institutions Special certificates of deposit 0 0 0 0 0 2,200,829 275,965,577 2,049,262 226,857,389 One-year term deposits 621,650 25,954,825 0 (26,421,043) 155,433 Deposits in foreign currency Two-years term deposits 144 0 0 0 143 Legal persons 976 13,018,051 878 15,443,539 Three-years term deposits 118 0 0 0 118 Real persons 32,313 7,227,166 37,372 8,297,225 Four-years term deposits 18 7,609 0 (7,609) 18 Investment deposits received from banks 2 953,638 3 1,619,166 and credit institutions Five-years term deposits 1,154,086 1,207,575 0 (942,659) 1,419,002 Investment deposits received from 33,291 21,198,855 38,253 25,359,930 0 17,249 0 (17,249) 0 banks and credit institutions 2,234,120 297,164,432 2,087,515 252,217,319 Foreign currency deposits 16,787 389,547 0 (391,394) 14,940 2,164,935 36,851,249 0 (37,404,654) 1,611,530
Parent Company
Provisional Difference in Balance at Interest paid Balance at interest during provisional and during the year March 20 ,2018 the year final interest March 20 ,2019
Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Ordinary short-term deposits 351,843 8,803,987 0 (9,136,945) 18,884 Special short-term deposits 17,688 470,457 0 (487,755) 390 General certificates of deposit 0 0 0 0 0 Special certificates of deposit 0 0 0 0 0 One-year term deposits 621,650 25,954,826 0 (26,421,043) 155,432 Two-years term deposits 143 0 0 1 143 Three-years term deposits 118 0 0 0 118 Four-years term deposits 18 7,609 0 (7,609) 18 Five-years term deposits 1,156,688 1,207,575 0 (942,659) 1,421,603
Investment deposits received from 0 17,249 0 (17,249) 0 banks and credit institutions
Foreign currency deposits 16,787 389,547 0 (391,393) 14,941 2,164,935 36,851,250 0 (37,404,654) 1,611,530
29-2-1- Considering the provisional surplus interests paid to depositors in proportion to their shares from the profit-sharing incomes as described in the statement of investment deposits performance under the circular 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.
118 Annual Report 119 30- Share Capital 31- Legal reserve 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 8,000/- Group Parent Company million shares at nominal value of 1,000 rials each) at the end of the fiscal year ended March 20, 2016 as described 2019 2018 2019 2018 below: Rls(m) Rls(m) Rls(m) Rls(m) Date of capital Capital Increase Amount of capital Source of Balance at the beginning of the year 1,733,012 1,578,061 1,689,324 1,536,569 New capital increase Percentage increase capital Increase Transferred from retained profit to legal reserve 774,864 154,341 771,494 152,755 Consolidated adjustments 0 0 0 Balance at the year end 2,507,876 1,732,402 2,460,818 1,689,324 August 29, 2002 0 0 200,000 Accrued dividends due and cash contribution November 27, 2003 10 20,000 220,000 Accrued dividends due and cash contribution October 15, 2004 36.4 80,000 300,000 Cash contribution 31-1- Subject to the provisions of paragraph A of article 33 of the Monetary and Banking Law and paragraph B March 7, 2005 100 300,000 600,000 Accrued dividends due and cash contribution of article 58 of the articles of association, the legal reserve in the parent company is equivalent to 15% and November 16, 2005 25 150,000 750,000 Accrued dividends due and cash contribution subject to the provisions of articles 140 and 238 of the Commercial Code Amendment ratified on March October 8, 2006 20 150,000 900,000 Accrued dividends due and cash contribution 14, 1969, the legal reserve in the subsidiaries is 5% which will be deducted from relevant distributable profit and then transferred to the legal reserve account. In accordance with the said articles, such transfer Accrued dividends due, cash contribution January 12, 2010 100 900,000 1,800,000 to the legal reserve account is mandatory until when the balance of legal reserve in the bank reaches and waiver of rights issue the amount of the bank’s capital and in the subsidiaries up to 10% of the same company’s capital and March 19, 2011 66.7 1,200,000 3,000,000 Accrued dividends due and cash contribution afterwards this process shall remain to be voluntary. The legal reserve will not be transferable to capital March 19, 2012 33.3 1,000,000 4,000,000 Shareholders’ cash contribution account and will not be distributed among the shareholders unless when the company is dissolved. The amounts entered in the balance sheet break down as follows: October 22, 2013 64.7 2,588,000 6,588,000 Assets revaluation reserve March 10, 2016 21 1,412,000 8,000,000 Cash contribution and retained earnings Group 2019 2018 Rls(m) Rls(m) 30-1- The composition of shareholders as at the balance sheet date was as follows: Parent campany Saman Bank 2,460,819 1,689,324 March 20, 2019 March 20, 2018 Subsidiary companies
Number of Percentage of Number of Percentage of Saman Exchange Co. 33,525 32,945 shares shares shares shares Saman Brokerage Co. 3,185 2,388 Saman Processing (Pardazeshgaran) 3,498 2,725 One percent and more Iranian Hafez Saman Credit Bureau and Scoring Co. 3,947 4,157 Staff Pension Fund of Foulad (Steel) Co. 400,088,117 5 400,088,117 5 Atiyeh Andishan Sepehr Shargh 481 481 Staff Pension Fund of Iranian Copper Co. 0 0 624,530,308 7.81 Atiyeh Andishan Sepehr Mehr 230 191 Mines and Metals Investment Development Co. 323,686,501 4.05 323,686,501 4.05 Tondar Noor 191 191 Mohammad Zarrabieh 305,266,280 3.82 315,266,280 3.94 Atieh Andishan Sepehr Shargh-Services Development Co. 2,000 0 Consolidated adjustments 0 0 Havva Chaie Dekhoie 214,211,112 2.68 214,211,112 2.68 2,507,876 1,732,402 Notrica Technique Co. 364,030,308 4.55 244,163,829 3.05 Saman Investment Development Co. 719,999,995 9 239,999,995 3 Vali Zarrabieh 196,660,057 2.46 201,660,057 2.52 32- Other reserves Seyyed Mehdi Ghafouri 181,316,669 2.27 181,316,669 2.27 Seyyed Ahmad Akhavan Dastmalchi 0 0 166,800,291 2.09 Group Ahmad Reza Zarrabieh 123,349,619 1.54 128,349,619 1.60 2019 2018 Iran Pump Manufacturing Industries 147,330,232 1.84 147,330,232 1.84 Rls(m) Rls(m) Iran and Gharb Co. (Private JS) 88,975,787 1.11 79,853,088 1 Balance at the beginning of the year 0 0 Others (less than %1) Decrease 0 0 Legal persons (71 shareholders) 1,063,932,852 13.30 1,149,338,425 14.36 Transferred from retained profit 3,528,218 0 Natural persons (8,280 shareholders) 3,871,152,471 48.38 3,583,405,477 44.79 Balance at the year end 3,528,218 0 8,000,000,000 100 8,000,000,000 100
32-1- In accordance with the directive No. 98/92847 of June 12, 2019 issued by the CBI, the profit from assets translation and forex debts (based on the interest rate fixed in the said directive) is not deemed distributable profit at the end of the fiscal year 2018-2019. This profit is entered under the headline of other reserves which, upon the CBI’s authorization, can be transferrable to the capital increase account as required by rules.
120 Annual Report 121
33- Assets revaluation reserve
2019 2018 18,198,169 0 10,818 76,897 464,568 0 32,909 776,360 0 12,417,147 965,668 69,407 2,201,005 1,183,390 Rls(m) Total
Transferred, Assets Assets Assets amortized and revaluation revaluation revaluation retired/Capital amount balance balance increase
Rls(m) Rls(m) Rls(m) Rls(m)
62,142 0 0 0 5,018 0 0 0 0 106 0 0 57,017 0 Rls(m) March 20, 2012 2,588,675 (2,588,000) 675 675 Forex (Non-profit-sharing)
March 20, 2017 1,506,473 0 1,506,473 1,506,473
March 20, 2018 0 (892,177) (892,177) (892,177)
March 20, 2019 (33,402) (33,402) 0
18,136,027 0 10,818 76,897 459,550 0 32,909 776,360 0 12,417,041 965,668 69,407 2,143,988 1,183,390 Rls(m) 4,095,148 (3,513,579) 581,569 614,971 Total
2018
Rial 34- Minority interest
259,570 0 10,818 76,897 0 0 0 0 0 0 0 0 82,609 89,246 Rls(m) Non- profit-sharing
2019 2018
Rls(m) Rls(m)
Share of capital 124,875 123,674 17,876,458 0 0 0 459,550 0 32,909 776,360 0 12,417,041 965,668 69,407 2,061,379 1,094,144 Rls(m) Profit-sharing Share of legal reserve 11,426 10,378 Group
Share of retained earnings 41,667 33,252
177,968 167,304
24,431,947 0 158,901 58,831 648,789 0 662,273 1,171,746 3,945 12,409,325 1,081,971 70,644 6,330,720 1,834,802 Rls(m) Total 35- Incomes from loans granted and placements in other banks and
debt securities
552,168 0 0 0 295,545 0 0 0 0 227,962 0 0 28,661 0 Rls(m) Group Forex (Non-profit-sharing) 2019 2018
Non- Non-
Note Profit-sharing Total Profit-sharing Total profit-sharing profit-sharing
23,879,779 0 158,901 58,831 353,245 0 662,273 1,171,746 3,945 12,181,363 1,081,971 70,644 6,302,059 1,834,802 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Total Income earned from loans 35-1 23,468,888 963,059 24,431,947 17,876,458 321,712 18,198,169 granted
2019
Rial Income earned from placements in other banks and debt 35-2 1,831,412 361,824 2,193,236 1,073,527 300,129 1,373,655
410,891 0 158,901 58,831 0 0 0 0 0 0 0 0 98,420 94,739 Rls(m) securities Non- profit-sharing
Total incomes earned from loans
granted and placements in other 25,300,300 1,324,883 26,625,183 18,949,985 621,840 19,571,824
banks
23,468,888 0 0 0 353,245 0 662,273 1,171,746 3,945 12,181,363 1,081,971 70,644 6,203,639 1,740,063 Rls(m) Profit-sharing
Parent Company 2019 2018
Non- Non- Note Profit-sharing Total Profit-sharing Total profit-sharing profit-sharing
Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Income earned from loans 35-1 23,500,798 963,059 24,463,857 17,902,175 321,712 18,223,887 granted Income earned from placements in other banks and debt 35-2 1,831,412 347,268 2,178,680 1,073,527 282,466 1,355,993 securities Total incomes earned from loans granted and placements in other 25,332,210 1,310,327 26,642,537 18,975,702 604,177 19,579,880 banks Other Late payment penalty for debtors of LGs paid Late payment penalty for debtors of LCs Late payment penalty Estesna'a Murabaha Factoring Salaf (future contracts) Mosharakat Madani (Civil partnership) Muzaraba (trade contracts) Hire purchase contracts Jealeh (service contract) Sales by instalments 35-1- Income earned from loans granted (Loan interest)
122 Annual Report 123
18,223,887 0 10,818 76,897 464,568 0 32,909 776,360 0 12,417,147 990,873 69,407 1,373,655 2,201,005 1,183,903 1,074,479 16,847 Rls(m) 251,024 31,304 Rls(m) Total Total 1,355,993 1,056,818 16,847 251,024 31,304 Rls(m) Total
62,142 0 0 0 5,018 0 0 0 0 106 0 0 57,017 0 Rls(m) Forex (Non-profit-sharing)
31,443 31,443 0 0 0 Rls(m) Forex (Non-profit-sharing) 31,442 31,442 0 0 0 Rls(m) Forex (Non-profit-sharing)
2018 2018
18,161,745 0 10,818 76,897 459,550 0 32,909 776,360 0 12,417,041 990,873 69,407 2,143,988 1,183,903 Rls(m) Total 1,342,211 1,043,036 16,847 251,024 31,304 Rls(m) Total 1,324,551 1,025,375 16,847 251,024 31,304 Rls(m) Total
2018
Rial
Rial Rial
259,570 0 10,818 76,897 0 0 0 0 0 0 0 0 82,609 89,246 Rls(m) Non- profit-sharing
268,684 17,661 0 251,024 0 Rls(m) Non-profit -sharing 251,024 0 0 251,024 0 Rls(m) Non-profit -sharing
17,902,175 0 0 0 459,550 0 32,909 776,360 0 12,417,041 990,873 69,407 2,061,379 1,094,657 Rls(m) Profit-sharing
1,073,527 1,025,375 16,847 0 31,304 Rls(m) Profit-sharing 1,073,527 1,025,375 16,847 0 31,304 Rls(m) Profit-sharing
Group
Parent Company
Parent Company ) )
24,463,857 0 158,901 58,831 648,789 0 662,274 1,171,747 3,945 12,441,232 1,081,971 70,644 6,330,721 1,834,802 Rls(m) Total 5,350 5,350 2,193,236 1,837,988 51,577 309,021 ( Rls(m) Total 2,178,680 1,823,432 51,577 309,021 ( Rls(m) Total
552,168 0 0 0 295,544 0 0 0 0 227,962 0 0 28,662 0 Rls(m) Forex (Non-profit-sharing)
38,247 38,247 0 0 0 Rls(m) Forex (Non-profit -sharing) 38,247 38,247 0 0 0 Rls(m) Forex (Non-profit-sharing)
2019 2019
) )
23,911,689 0 158,901 58,831 353,246 0 662,274 1,171,747 3,945 12,213,269 1,081,971 70,644 6,302,059 1,834,802 Rls(m) Total 5,350 5,350 2,154,989 1,799,741 51,577 309,021 ( Rls(m) Total 2,140,433 1,785,186 51,577 309,021 ( Rls(m) Total
2019
Rial
Rial Rial
410,891 0 158,901 58,831 0 0 0 0 0 0 0 0 98,420 94,739 Rls(m) Non- profit-sharing
323,577 14,555 0 309,021 0 Non- profit-sharing Rls(m) 309,021 0 0 309,021 0 Non- profit-sharing Rls(m)
) ) 23,500,798 0 0 0 353,246 0 662,274 1,171,747 3,945 12,213,269 1,081,971 70,644 6,203,639 1,740,063 Rls(m) Profit-sharing
5,350 5,350 1,831,412 1,785,186 51,577 0 ( Profit-sharing Rls(m) 1,831,412 1,785,186 51,577 0 ( Rls(m) Profit-sharing Other Late payment penalty for debtors of LGs paid Late payment penalty for debtors of LCs Late payment penalty Estesna'a Murabaha Factoring Salaf (future contracts) Mosharakat Madani (Civil partnership) Muzaraba (trade contracts) Hire purchase contracts Jealeh (service contract) Sales by instalments Interest on term deposits placed with other banks Earnings from fixed-income funds Interest on statutory deposit (share of of (share deposit statutory on Interest depositors and the bank) Interest on certificates of deposit, participation bonds and other debt securities Interest on term deposits placed with other banks Earnings from fixed-income funds Interest on statutory deposit (share of of (share deposit statutory on Interest depositors and the bank) Interest on certificates of deposit, participation bonds and other debt securities 35-2- Income earned from placements in other banks and debt securities
124 Annual Report 125
) 36-1- Dividends from companies and units of mutual funds in the parent company break down as follows: 33,433 7,838,581 6,611,663 1,226,918 ( 1,260,351 Rls(m) Total 2019 2018 Rial Rial Forex (Non- Forex (Non- (profit- Total (profit- Total profit-sharing) profit-sharing) sharing) sharing)
2018 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m)
0 0 0 0 0 Rls(m) Forex (Non- profit-sharing) Satellite Communications Group 0 0 0 19,232 0 19,232
Saman Exchange Co. 241,375 0 241,375 240,927 0 240,927 ) Saman Insurance 20,114 0 20,114 (5,501) 0 (5,501)
33,433 Saman Brokerage Co. 52,675 0 52,675 5,765 0 5,765 7,838,581 6,611,663 1,226,918 ( 1,260,351 Rls(m) Rial (Profit sharing) Central Securities Depository and Settlement Co. 1,085 0 1,085 1,053 0 1,053
Iran Investment Co. 1,625 0 1,625 12,040 0 12,040
Parent Company Iran Credit Rating Co. 9,632 0 9,632 5,458 0 5,458 5,664,472 4,588,455 1,076,017 316,416 759,601 Rls(m) Total Stock Exchange Co. 84 0 84 44 0 44 Iranian Credit Bureau and Scoring Co. 18,830 0 18,830 16,833 0 16,833 Saman Processing (Pardazeshgaran) 0 0 0 0 0 0
2019 Saman Financial and Economic 49,800 0 49,800 160,752 0 160,752 Development Group
0 0 0 0 0 Rls(m) Forex (Non- profit-sharing) Iran Energy Exchange 457 0 457 685 0 685
Saman Aftab Tejarat Co. 1,850 0 1,850 1,440 0 1,440 Middle East Bank 901 0 901 11,306 0 11,306 5,664,472 4,588,455 1,076,017 316,416 759,601 Rls(m) Rial (Profit sharing) Shaparak Electronic Payment Co. 32,564 0 32,564 9,368 0 9,368
Iran Pars Technology Investment 16,800 0 16,800 12,342 0 12,342
) Hamedan Glass Works 0 0 0 8,467 0 8,467
22,091 Iran Pump Manufacturing Co. 0 0 0 1,368 0 1,368 7,414,572 6,611,665 802,907 ( 824,998 Rls(m) Total Dividends from long-term investments 447,793 0 447,793 501,578 0 501,578
Saman Electronic Payment Co. 201,527 0 201,527 328,266 0 328,266
2018 Kardan Investment Bank 98,000 0 98,000 396,876 0 396,876
Iran Khodro 0 0 0 47 0 47 0 0 0 0 0 Rls(m) Forex (Non- profit-sharing)
Shazand Petrochemical Co. 0 0 0 0 0 0
) Tractor Manufacturing Co. 0 0 0 0 0 0 Shomal Drilling Co. 0 0 0 152 0 152 22,091 7,414,572 6,611,665 802,907 ( 824,998 Rls(m) Rial (Profit sharing) Tooka Transport Co. 70 0 70 908 0 908 Group
Rayan Saipa 0 0 0 0 0 0
Iran Khodro Investment Co. 0 0 0 35 0 35 0 1,446
5,358,720 Isfahan Mubarakeh Steel Co. 0 0 0 1,446 4,610,294 748,426 316,781 431,645 Rls(m) Total Bahman Group 581 0 581 2,984 0 2,984
Mapna Group 443 0 443 1,180 0 1,180
2019 Iranian Leasing Co. 154 0 154 4,727 0 4,727
Passargad Bank 0 0 0 0 0 0 0 0 0 0 0 Rls(m) Forex (Non- profit-sharing)
Azarab 0 0 0 0 0 0
Iran Construction Investment Co. 0 0 0 0 0 0
Tooka Foulad Investment Co. 609 0 609 6,033 0 6,033 5,358,720 4,610,294 748,426 316,781 431,645 Rls(m) Rial (Profit sharing) Gharb Cement Co. 0 0 0 0 0 0 Sahand Tire 0 0 0 0 0 0 36-3 36-2 36-1 Iran Khak Chini 0 0 0 0 0 0 Note Iran Amlah Mining Co. 0 0 0 0 0 0 Khorasan Petrochemical Co. 0 0 0 0 0 0 Takin Co. 1,040 0 1,040 0 0 0 Khorasan Pegah 0 0 0 0 0 0 Omid Investment Co. 0 0 0 0 0 0 Kharazmi Investment Co. 3,000 0 3,000 0 0 0 Iran Telecommunication 0 0 0 2 0 2 Net profit (loss) from investments Profit (loss) from increase (decrease) in investments value Net profit (loss) from increase (decrease) in investments value 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 36- Net profit (loss) from investments
126 Annual Report 127 2019 2018 36-2- Profit (loss) from sales of companies’ shares and units of mutual funds in the parent company: Rial Rial Forex (Non- Forex (Non- (profit- Total (profit- Total profit-sharing) profit-sharing) 2019 2018 sharing) sharing) Number of Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Net sale value Book value Profit (loss) Profit (loss) shares Hamkaran System 0 0 0 0 0 0 Profit (loss) from sales of companies' shares (Rial) Tolid Darou Pharmaceutical Co. 0 0 0 0 0 0 Share Rls(m) Rls(m) Rls(m) Rls(m) (profit-sharing) Parsian E-Commerce 0 0 0 0 0 0 Iranian National Copper Industries 240,000 633 624 10 1,400 Tooka Rail 456 0 456 4,221 0 4,221 Mines and Metals Investment Development Co. 8,751,300 20,656 20,949 (293) (221) Iran Kish Credit Card 0 0 0 0 0 0 Data Gostar Asr Novin 0 0 0 0 6 Mapna Power Generation - Asalouyeh 0 0 0 0 0 0 Isfahan Mubarakeh Steel Co. 12,956,434 50,106 49,321 785 7,411 Pakshoo Industrial Group 0 0 0 0 0 0 Iran Construction Investment Co. 0 0 0 0 (9,424) Ghasem Iran 0 0 0 0 0 0 Iran Telecommunication Co. 0 0 0 0 (3) Damavand Power Generation 0 0 0 0 0 0 Shomal Drilling Co. 1,538,445 2,735 2,586 150 (2,213) Mapna Group 14,843,412 50,278 52,521 (2,243) (2,971) Mobin Petrochemical Co. 0 0 0 0 0 0 Gole Gohar 1,979,402 8,023 7,974 49 1,761 Tooka Refractory Industry 0 0 0 0 0 0 Gole Gohar-righst issue 395,880 723 724 (2) 0 Fajr Petrochemical Co. 0 0 0 0 0 0 Iran Khodro 0 0 0 0 (1,203) Sobhan Oncology 0 0 0 0 0 0 Bank Mellat 0 0 0 0 (6,566) Iran Transfo 0 0 0 0 0 0 Shahed Investment Co. 0 0 0 0 0 Karafarin Bank 0 0 0 0 0 0 Iranian Leasing Co. 1,029,258 1,267 1,339 (72) (10,004) Oil Industrial Development Co. 0 0 0 84 0 84 Informatic Services Co. 0 0 0 0 568 Sina Bank 0 0 0 0 0 0 Sina Bank 0 0 0 0 (13,948) Mellat Insurance 0 0 0 0 0 0 Saderat Bank 11,600,000 7,145 7,141 4 0 Piazar Agro-Industry Co. 0 0 0 0 0 0 Esfahan Steel Mill 10,000,000 12,756 11,708 1,047 0 Alhavi Pharmaceutical Co. 0 0 0 84 0 84 Tooka Rail 4,000,000 5,910 5,946 (37) (13,842) Mapna Power Generation - Asalouyeh 1,826,480 20,169 20,076 92 0 Parsian Bank 0 0 0 0 0 0 Khuzestan Steel Co. 0 0 0 0 183 Middle East Tide Water 0 0 0 0 0 0 Omid Investment Co. 0 0 0 0 369 A.S.P 0 0 0 0 0 0 Alborz Insurance Co. 0 0 0 0 0 Sina Port and Marine Industry Development Co. 0 0 0 0 0 0 Tooka Foolad Investment Co. 22,588,287 23,559 28,505 (4,945) (7,967) Ansar Bank 0 0 0 1 0 1 Tooka Foolad Investment Co. - rights issue 0 0 0 0 0 Shahed Civil and Development Co. 0 0 0 0 0 0 Tehran Oil Refinery 0 0 0 0 101 Hekmat Bank 0 0 0 0 0 0 Bahman Group 2,903,447 2,382 2,991 (609) (3,365) Mines and Metals Investment Development Co. 1,512 0 1,512 0 0 0 Sahand Tire 0 0 0 0 0 Middle East Life Insurance 10 0 10 0 0 0 Kharazmi Investment Co. 2 0 0 () (15,143) Mellat Leasing Co. 10 0 10 0 0 0 Taamin Oil, Gas and Petrochemical Investment Co. 8,768,825 13,576 14,423 (848) 419 Cultural Heritage and Tourism Investment Co. 1,500 0 1,500 0 0 0 Shazand Petrochemical Co. 0 0 0 0 0 Bojnourd Cement 1,339 0 1,339 0 0 0 Tooka Transport Co. 1,954,536 3,328 3,296 32 (3,422) Tooka Transport Co. - rights issue 0 0 0 0 0 Alvand Kashi 135 0 135 0 0 0 Iran Khodro Investment Development 0 0 0 0 (859) Seir Kosar Rail Co. 81 0 81 0 0 0 TakinCo. Corrosion Control 2,400,000 25,975 21,919 4,056 (243) Gole Gohar 650 0 650 0 0 0 Oil Industry Investment Co. 0 0 0 0 (778) Iran Copper Industries 36 0 36 0 0 0 Tecnotar 0 0 0 0 0 Pars Petrochemical Co. 9 0 9 0 0 0 Mellat Leasing Co. 100,000 175 157 18 0 Tamin Maseh Rikhtegri 13 0 13 0 0 0 Shiraz Petrochemical - Urea Future Bond 0 0 0 0 3,206 Other 0 0 0 0 0 0 Ghadir Investment Co. 11,639,294 14,846 15,145 (299) (289) Dividends from short-term investments 311,175 0 311,175 747,047 0 747,047 Ansar Bank 5,703 12 11 0 0 Saman Yekom Mutual Fund 633 0 633 11,171 0 11,171 Talise 0 0 0 0 267 Aghigh Fund 0 0 0 0 0 0 A.S.P. 0 0 0 0 (389) Yekom Agah Fund 0 0 0 556 0 556 Kerman Civil Development Co. 1,072,658 5,205 5,145 61 1,612 Jam Petrochemical Co. 0 0 0 0 637 Profit from units of mutual funds 633 0 633 11,726 0 11,726 Sarcheshmeh Copper Co. 15,306,403 70,754 69,603 1,151 0 Dividends from companies' shares and units 759,601 0 759,601 1,260,351 0 1,260,351 Sarcheshmeh Copper Co.-rights issue 700,000 1,970 2,182 (211) 0 of mutual funds Tamin Maseh Rikhtegari 2,759,838 10,013 8,718 1,295 0
128 Annual Report 129 2019 2018 36-3- Profit (loss) from increase (decrease) in investments value: Number of Net sale value Book value Profit (loss) Profit (loss) shares 2019 2018
Profit (loss) from sales of companies' shares (Rial) Number Share Rls(m) Rls(m) Rls(m) Rls(m) of shares/ Net sale Profit (profit-sharing) Book value Profit (loss) Investment value (loss) Alvand Kashi Co. 1,751,326 6,850 6,264 586 0 units
Cultural Heritage and Tourism Investment 10,000,000 20,296 20,121 175 0 Profit (loss) from sales of companies' shares (Rial) Share Rls(m) Rls(m) Rls(m) Rls(m) Pars Civil and Development Co 17,989,621 31,954 33,607 (1,653) 0 (profit-sharing) Bojnourd Cement Co. 3,925,890 13,655 13,997 (342) 0 Mines and Metals Investment Development 0 0 0 0 (451) Kayson 21,250,000 27,629 29,999 (2,370) 0 Isfahan Mubarakeh Steel Co. 0 0 0 0 13,177 Shomal Drilling Co. 0 0 0 0 (5,582) Kayson-rights isue 5,000,000 3,340 3,480 (140) 0 Mapna Group 0 0 0 0 (6,432) Alhavi Pharmaceutical Co. 1,277,010 3,923 4,805 (883) 0 Iranian Leasing Co. 0 0 0 0 (378) Seir Kosar Rail Co. 4,052,070 8,538 8,779 (240) 0 Bank Saderat 0 0 0 0 (6,123) Kharazmi Development and IT Co. 448,756 976 1,144 (167) 0 Tooka Rail 0 0 0 0 (3,788) Iran National Investment Co. 1,677,785 2,125 2,217 (92) 0 Tooka Foolad Investment Co. 0 0 0 0 (6,864) Middle East Life Insurance 200,000 99 102 (3) 0 Tooka Transport 0 0 0 0 (826) Insurance Industry 9,774,010 31,096 30,433 663 - Middle East Life Insurance 0 0 0 0 6 Bank Ansar 0 0 0 0 (1) Saman Insurance 104,622,000 436,747 361,069 75,678 43,063 Alhavi Pharmaceutical Co. 0 0 0 0 (1,765) Middle East Bank 70,779,400 154,755 145,729 9,026 0 Iran Copper Industries Co.-rights issue 0 0 0 0 151 Electronic Payment Co. 28,395,000 444,024 321,625 122,399 (1,584) Sarcheshmeh Copper 0 0 0 0 (2,299) Shahid Bahonar Copper Co. 1,991,203 20,566 21,524 (958) 0 Sarcheshmeh Copper-rights Issue 0 0 0 0 0 Hamadad Glass Works 36,735,455 144,445 58,443 86,002 0 Fars Civil Development 0 0 0 0 (3,731) Iran Pump Manufacturing Co. 22,465,009 51,372 28,812 22,560 0 Kharazmi IT Development 0 0 0 0 (625) Takin Co. 32,400 277 245 (32) (638) Ofogh Koorosh 131 3 3 1 0 Takin Co.-rights issue 39,599 299 260 (39) 0 Faka Agro-Husbandry 173 2 2 0 0 Gole Gohar 0 0 0 0 639 Parsian Lotus Investment Co. 1,439 3 3 () 0 Isfahan Steel Co. 0 0 0 0 (549) Ghaed Basir Petrochemical Co. 125 2 2 0 0 Taamin Oil, Gas and Petrochemical Co. 0 0 0 0 1,032 481,697,905 1,754,644 1,445,210 309,433 (33,432) Rail Seyr Kowsar 0 0 0 0 (1,502) Profit (loss) from sales of mutual funds (Rial) (profit-sharing) 0 0 0 0 0 Mapna Power Generation- Asalouye 0 0 0 0 (3,753) Sahm Ashna Yekom special market-making fund 8,000 17,838 10,820 7,018 0 Kayson 0 0 0 0 (6,854) Kayson - rights issue 0 0 0 0 (1,324) Nik Andishane Honar Charity Investment Found 2,499 2,499 2,535 (36) 0 Ghadir Investment Co. 0 0 0 0 (1,803) Profit (loss) from sales of companies' share (Forex) 0 0 0 0 0 Bojnord Cement Co. 0 0 0 0 3 (non-profit sharing) Kerman Civil Development 0 0 0 0 22 Profit (loss) from sales of mutual funds (Forex) Cultural Heritage Investment 0 0 0 0 (409) 0 0 0 0 0 (non-profit sharing) Saman Kish Electronic Payment 992,255,218 6,904,992 10,517,605 3,612,613 5,111,315 481,708,404 1,774,981 1,458,565 316,416 (33,432) Middle East Bank 88,199,999 192,782 272,679 79,897 85,242 Saman Insurance 126,421,110 436,225 436,225 0 616,267 Kardan Investment Bank 646,666,400 1,396,499 2,243,932 847,433 747,291 Adjustment of impairment loss reserves 0 0 0 48,583 92,215 1,853,614,726 8,931,074 13,470,946 4,588,455 6,611,663 Profit (loss) from increase (decrease) in investments value 0 0 0 0 0 (Forex) (non-profit sharing)
0 0 0 0 0 1,853,614,726 8,931,074 13,470,946 4,588,455 6,611,663
130 Annual Report 131 37- Bank’s share from profit-sharing incomes 37-3- Interest on statutory deposit of investment deposits are as follows:
Bank’s share of sources from profit-sharing incomes is calculated as follows: 2019 2018 37-1- Bank’s share from profit-sharing incomes Rls(m) Rls(m) Average statutory deposit of investment deposits 28,055,901 23,430,897 Interest on statutory deposit 283,706 232,707 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
Percentage Rls(m) Rls(m) 2018 0 26,814,284 0 38- Deposits management fee 2019 0 30,996,680 0 The bank’s management fee for the fiscal year 2018-2019 was calculated at the rate of 3% on the basis of the minutes dated June 19, 2017 as follows: • Should the shared uses be less than the total free resources of investment deposits, the bank’s resources and accordingly its share from the profit-sharing incomes will drop to nil. Management fee = Free rate x Average shared uses 4,944,594 = %3 x 164,819,824 37-2- Distribution of shared resources and uses between the depositors and the bank 38-1- Stated management fee (MF)
2019 2018 Average Stated MF Calculated MF Rls(m) Rls(m) Average shared uses (37-2-1) 164,819,824 131,048,466 52-week average Rate Percentage Amounts in Rls(m) Rate Percentage Amounts in Rls(m) Average balance of investment deposits (37-2-2) 245,753,679 203,491,258 52-week average Ordinary short-term deposits 3 2,652,568 2.27 2,008,270 Less: Statutory deposit from investment deposits (28,055,901) (23,430,897) 52-week average Special short-term deposits 3 61,397 2.27 46,484 Free resources of investment deposits 217,697,778 180,060,360 General certificates of deposit 3 0 2.27 0 Bank’s share of sources out of shared uses (52,877,954) (49,011,894) One-year term 3 3,658,081 2.27 2,769,547 (Surplus free resources of investment deposits) Two-year term 3 80 2.27 61
• The bank’s share of resources out of the shared uses means the shared uses deducted from the free resources of investment depos- Three-year term 3 6 2.27 4 its. Should the total free resources of investment deposits exceed the shared uses, the surplus thereof will be named the surplus free Four-year term 3 1,123 2.27 850 resources of investment deposits. Five-year term 3 155,253 2.27 117,543
37-2-1- Average shared uses Investment deposits received from banks and credit 3 2,426 2.27 1,837 institutions
2019 2018 6,530,934 4,944,596 Items of shared uses Amount (average) Amount (average) Rls(m) Rls(m) Net uses related to loans 144,254,787 122,899,779 Net uses related to investment deposits placed with other banks 8,838,486 4,954,267 39- Compensation of expenses related to depositors' free resource Net uses related to investment in shares and other securities 11,726,551 3,194,419 surplus to shared uses Total uses related to profit-sharing operations 164,819,824 131,048,466 Pursuant to the directive No. 94/69383 of June 10, 2015 the expenses for depositors’ surplus resources are calculated as follows:
37-2-2- Average investment deposits Profit-sharing incomes Surplus free resources of investment deposits to shared uses x March 20, 2019 March 20, 2018 Average shared uses Investment deposits Amount (average) Amount (average) 30,996,680 Rls(m) Rls(m) 52,877,954x = 9,944,441 164,819,824 Ordinary short-term deposits 99,812,063 80,779,211 Special short-term deposits 2,310,633 4,824,543 General certificates of deposit 0 0 One-year term 137,663,187 104,201,053 Two-year term 3,021 33,863 Three-year term 214 47,752 Four-year term 42,236 65,522 Five-year term 5,841,450 13,434,273 Investment deposits received from banks and credit institutions 80,875 105,041 Average investment deposits 245,753,679 203,491,258
132 Annual Report 133 40- Provisional interests (on-account) paid on investment deposits 42- Fee and commission incomes
Group Parent Company Group Parent Company 2019 2018 2019 2018 Note 2019 2018 2019 2018 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m)
Interest on ordinary short-term deposits 8,748,510 9,495,786 8,803,987 9,563,817 Net fees for Gharzolhassaneh(interest-free) 42-1 50,843 59,887 50,843 59,887 Interest on special short-term deposits 470,457 853,687 470,457 853,687 transactions Long-term deposits Fees for LCs opened 126,523 78,855 126,523 78,855 One-year term 25,954,825 19,896,327 25,954,825 19,896,327 Fees for LGs issued 250,926 137,234 252,664 138,629 Two-year term 0 0 0 0 Forex transactions 200,531 65,496 200,531 65,496 Three-year term 0 0 0 0 Fees for managed funds 0 0 0 0 Four-year term 7,609 12,268 7,609 12,268 Banking drafts 442,064 181,281 422,575 156,840 Five-year term 1,207,575 3,027,017 1,207,575 3,027,017 Credit cards subscription 93,185 9,238 93,185 9,239 General certificates of deposit 0 0 0 0 Fees for Shetab Payment System 552,110 597,747 552,110 597,747 Fees for cards issuance 17,205 15,016 17,205 15,016 Investment deposits received from banks and credit 17,249 26,407 17,249 26,407 institutions Holders of Shetab Cards 296,045 226,339 296,045 226,339
36,406,225 33,311,492 36,461,702 33,379,523 Fees received for short banking messages (SMS) 109,015 79,282 109,015 79,282 Incomes received for sale of insurance policies 59,196 63,104 59,196 63,104 Other 212,189 150,200 212,190 150,199 41- Interest expenses on deposits 2,409,831 1,663,679 2,392,080 1,640,633
Group Parent Company 42-1- Net fees for Gharzolhassaneh (interest-free) transactions are as follows: Note 2019 2018 2019 2018 Rls(m) Rls(m) Rls(m) Rls(m) 2019 2018 Interest on investment deposits in rial 41-1 36,406,225 33,311,492 36,461,702 33,379,523 Rls(m) Rls(m) Interest on special certificates of deposit 0 0 0 0 Fees received for Ghazolhassaneh (interest-free) loans 51,887 60,703 Interest on foreign currency deposits 389,548 442,953 389,547 442,952 Fees for prizes on interest-free deposits (1,044) (816) 36,795,773 33,754,445 36,851,249 33,822,475 Net fees for interest-free loans 50,843 59,887
41-1- Reconciliation statement of provisional interests (on-account) paid on 43- Fee and commission expenses investment deposits (in rial) along with interest expenses on investment deposits
Group Parent Company 2019 2018 2019 2018 2019 2018 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Provisional interest paid on investment deposits (Note 40) 36,461,702 33,379,523 Fees paid to Shetab payment system 435,250 434,207 435,249 434,207 Plus (less) difference in interest payable to depositors (surplus interest paid to (181,466) (235,491) Fees paid to brokers 8,566 6,080 8,565 6,080 depositors) - carried from the statement of investment deposits performance Fees paid to Banks 1,420,739 1,050,834 1,420,738 1,050,834 Final interest accrued to investment deposits 36,280,236 33,144,031 Fees paid to persons/entities 53,988 31,762 90,357 72,301 Plus Final interest paid to depositors (equivalent to surplus interest paid to depositors) 181,466 235,491 Fees paid to Electronic Payment Co. 414,685 356,749 414,686 356,749 Interest on ivestment deposits in Rial 36,461,702 33,379,523 Other 116,052 31,696 116,053 31,697 2,449,280 1,911,330 2,485,648 1,951,868
134 Annual Report 135 44- Incomes from sales and services rendered 47-1- Profit (loss) from sale of tangible fixed and intangible assets breaks down as follows:
2019 2018 Group Cost Book value Amount sold Profit (loss) Profit (loss) 2019 2018 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Land 217,978 217,978 251,912 33,934 228,524 Sales and services rendered 84,344,987 90,626,149 Installations 0 0 0 0 0 Refund for reductions 0 0 Buildings 73,086 70,227 84,463 14,236 559,778 84,344,987 90,626,149 Furniture and fixtures 0 0 0 0 0 Motor vehicles 0 0 0 0 0
44-1- The income earned from sales and services rendered is mainly related to the foreign currency trading/ Assets in process of completion 0 0 0 0 0 transactions by the Saman Foreign Exchange Company. Orders and capital prepayments 0 0 0 0 0 Capital items in stock/warehouse 0 0 0 0 0 45- Cost price of sales and services rendered Goodwill for place of business 17,894 17,894 20,680 2,786 1,387,388 Royalties 0 0 0 0 0 308,958 306,099 357,055 50,956 2,175,690 Group 2019 2018 Rls(m) Rls(m) The balance of this account is related to the contracts made for sale of assets in preceding years which Cost price of goods and services rendered 83,433,077 90,033,414 47-2- were revoked in the fiscal year 2018-2019 and/or is related to the gains earned from installment-based 83,433,077 90,033,414 sale of assets in preceding years.
48- Administrative and general expenses 46- Net profit (loss) from foreign currency exchanges and transactions
Group Parent Company Group Parent Company Note 2019 2018 2019 2018 2019 2018 2019 2018 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Personnel expenses 48-1 3,321,433 2,654,497 3,107,183 2,482,572 Profit (loss) from forex trading (buying & selling) 3,696,612 1,535,408 3,673,854 1,535,073 Administrative expenses 48-2 3,606,570 2,824,458 3,398,381 2,664,066 Profit (Loss) from foreign exchange translation 2,795,748 2,395,482 2,742,757 2,414,664 6,928,003 5,478,955 6,505,564 5,146,638 6,492,360 3,930,890 6,416,611 3,949,737
48-1- The personnel expenses break down as follows: 47- Net other incomes and expenses Group Parent Company 2019 2018 2019 2018 Group Parent Company Rls(m) Rls(m) Rls(m) Rls(m) Note 2019 2018 2019 2018 Salaries, wages and benefits 2,498,818 2,049,497 2,350,229 1,932,091 Rls(m) Rls(m) Rls(m) Rls(m) Social security insurance - employer's contribution 436,863 342,721 418,221 328,915 Profit (loss) from sale of tangible fixed and 47-1 51,038 2,176,275 50,956 2,175,690 intangible assets Employees' termination and pension benefits 8,199 6,924 0 0 Business travels and allowances 59,619 450 59,181 0 Profit (loss) from sale of foreclosed 7,415,496 7,398,403 7,415,496 7,398,403 collaterals/properties Other 317,934 254,905 279,552 221,566
Profit (loss) from sale of prior years' assets 47-2 131,642 299,153 131,642 299,153 3,321,433 2,654,497 3,107,183 2,482,572 Professional (loan processing) fees 127,487 (325,260) 127,487 (325,260)
Income from post, Telegraph, 1,430 1,559 1,430 1,559 Telephone and Swift
Insurance and loans monitoring 19 13,272 19 13,272 Income earned from legal proceedings 2,194,654 0 2,194,654 0 Others 795,117 401,917 790,221 392,273 10,716,883 9,965,319 10,711,905 9,955,090
136 Annual Report 137 48-2- The administrative expenses break down as follows: 49-1- The specific expenses for doubtful debts incurred for the loans granted and the amounts due are as follows:
Group Parent Company 2019 2018 Note 2019 2018 2019 2018 Doubtful Doubtful debts Rls(m) Rls(m) Rls(m) Rls(m) Overdue Outstanding debts Total Total more than 5 up to 5 years Office rents 436,697 368,586 402,916 341,062 years Expenses for advertisement and marketing 267,460 212,657 262,780 209,948 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Training and research 26,749 37,092 26,736 36,699 Balance of loans granted and non-current loans at year-end Insurance payments 16,916 49,794 13,907 47,726 Other banks and credit institutions 0 0 0 0 0 0 Auditing and consulting fees 211,575 242,337 204,961 241,478 Governmental entities 0 0 0 0 0 0 Non-governmental entities/persons 542,812 7,402,838 21,352,025 0 29,297,675 28,814,019 Transportation charges 24,982 20,011 23,732 18,944 Balance of other accounts receivable at year-end 0 0 0 0 0 0 Utilities: water and electricity 214,590 107,242 149,602 42,285 Amounts due from subsidiary and affiliated 0 0 0 0 0 0 Repairs and maintenance of tangible companies (Note 14) 530,628 434,664 530,209 434,110 fixed-assets Other accounts receivable (Note 15) 0 0 2,859,421 0 2,859,421 2,654,871 542,812 7,402,838 24,211,446 0 32,157,096 31,468,890 Office supplies and consummables 97,731 59,177 94,813 56,321 Less: collaterals value by calculating risk Contribution paid to Deposits Guarantee factors 48-2-1 298,167 601,892 298,167 601,892 Fund Savings and investment deposits 39,675 10,948 41,596 0 92,219 210,670 Participation bonds and other debt securities Bonus and remuneration for board 0 0 0 0 0 0 10,775 6,604 0 0 guaranteed by the government and CBI members Participation bonds and other debt securities 0 0 0 0 0 0 Expenses for hosting guests and guaranteed by other banks 208,929 155,614 207,681 154,358 entertainments Banking LGs 0 0 0 0 0 0 LCs transacted 0 0 0 0 0 30,000 Contract-based services (outsourcing 0 0 0 0 Shares listed on the stock exchange 40,106 0 83,410 0 123,516 648,451 contracts) Real estates 376,828 6,598,631 11,966,492 0 18,941,951 18,617,520 Expense for automation 62,992 62,594 62,992 62,594 Machinary 0 25,900 270,523 0 296,423 459,263 Meals for personnel 1,638 1,101 0 0 456,609 6,635,479 12,362,021 0 19,454,109 19,965,904 Gifts, presents and prizes 997 368 0 0 Base balance for calculating specific provision 86,202 767,359 11,849,425 0 Base factor for calculating specific 10 20 50 50-100 0 0 Consulating service 22,013 10,116 0 0 provision - percentage Other expenses 1,173,731 454,609 1,119,885 416,649 Specific provision for doubtful debts 8,620 153,472 5,924,713 0 6,086,805 5,786,805 Plus: specific provision for renewed and 3,606,570 2,824,458 3,398,381 2,664,066 0 0 0 0 0 0 restructured loans Less: Balance of provision for doubtful debts 8,620 153,472 5,624,713 0 5,786,805 4,586,805 during the year 48-2-1- The said amount is the contribution for the CBI’s Deposits Guarantee Fund in 2017-18 which was Plus: bad loans during the year 0 0 0 0 0 0 Specific provision for doubtful debts, loans entered in accounts in 2018-2019. 0 0 300,000 0 300,000 1,200,000 grantedcand amounts due 49- Expenses for doubtful debts 49-2- General expenses for doubtful debts incurred for the loans granted and the amounts due are as follows: Group Parent Company Note 2019 2018 2019 2018 2019 2018 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Balance of amounts loans granted to other banks and credit institutions 0 0 Specific expenses for doubtful debts, loans 49-1 300,000 1,200,000 300,000 1,200,000 and claims Balance of amounts due from the government 0 0 Balance of loans granted to governmental entities 0 0 General expenses for doubtful debts, 49-2 0 0 0 0 Balance of loans granted to non-governmental entities/persons (Note 11-1) 177,186,032 144,549,153 loans and claims Balance of debts for term LCs (Note 21-1) 307,802 1,858,727 300,000 1,200,000 300,000 1,200,000 Amounts due from subsidiary and affiliated companies (Note 14-2) 2,428,333 2,928,844 Other accounts receivable (Note 15-3) 48,728,793 40,528,550 Less: Balance of loans granted and the amounts for which specific provision has been calculated (12,702,986) (11,502,986) Base balance for calculating general provision 215,947,974 178,362,288 Base factors for calculating general provision - percentage 1.5 1.5 General provision for loans granted and amounts due 3,239,220 2,675,434 Less: balance of general provision for loans granted and amounts due at year-end 1,794,479 1,794,479 Plus: bad loans during the year 0 0 General provision for loans granted and amounts due 0 0
138 Annual Report 139 50- Financial expenses 52-2- In order to provide a fair profile of the financial position and the results of operations, all relevant comparative items in the comparative financial statements have been amended and restated. For this reason, some of the items so compared may not necessarily correspond with those in the financial Group Parent Company statements presented for the previous fiscal year. 2019 2018 2019 2018 Rls(m) Rls(m) Rls(m) Rls(m) 53- Reconciliation statement of net profit Interest on facilities received from other banks and credit institutions 0 0 0 0 The reconciliation statement of net profit along with the net cash inflow from operating activities breaks down as Interest and late payment on facilities received from the CBI 0 0 0 0 follows: Financial expenses of debt securities 2,234 8,301 0 0 Late payment penalty paid 0 0 0 0 Group Parent Company Late payment penalty for overdraft from current account with CBI 0 0 0 0 2019 2018 2019 2018 2,234 8,301 0 0 Rls(m) Rls(m) Rls(m) Rls(m) Net profit (loss) 5,612,546 1,421,707 5,143,292 318,366 Depreciation/amortization expense 601,021 574,516 541,852 524,574
Net increase (decrease) in provision for employees' 51- Depreciation/amortization expenses 272,932 161,042 255,047 153,719 termination and pension benefits
Net increase (decrease) in financial expenses payable 0 0 0 0 Group Parent Company Net increase (decrease) in income tax payable 0 0 0 0 2019 2018 2019 2018 Profit (loss) from sale of tangible fixed Rls(m) Rls(m) Rls(m) Rls(m) (50,956) (2,175,690) (50,956) (2,175,690) and intangible assets Tangible fixed assets depreciation 433,666 490,247 422,369 474,477 Profit (loss) from sale of non-operating real estates (7,415,496) (7,398,403) (7,415,496) (7,398,403) Intangible assets depreciation 104,104 53,227 119,483 50,097 Net profit (loss) from cash foreign currency translation (2,742,757) (2,414,664) (2,742,757) (2,414,664) 537,770 543,474 541,852 524,574 (3,722,710) (9,831,492) 4,249,019 (10,992,097) Net increase (decrease) in operating liabilities Due to banks and other credit institutions 82,882,696 (743,280) 82,882,696 (743,280) 52- Prior years’ adjustments Customers' deposits 41,105,349 9,137,191 39,132,681 9,336,821 Debt securities 0 0 0 0 Group Parent Company Operating portion of provisions and other debts 3,497,898 5,766,262 223,245 3,902,189 Note 2019 2018 2019 2018 Investment depositors' equity 44,393,709 39,529,204 44,393,709 39,529,204 Rls(m) Rls(m) Rls(m) Rls(m) 171,879,652 53,689,377 166,632,331 52,024,934 Accumulated effects of changes in accounting 0 0 0 0 Net (increase) decrease in operating assets standards/policies Due from banks and other credit institutions 719,643 (1,589,180) 732,438 (1,011,701) Amendment of errors 52-1 (921,844) (308,808) (920,303) (220,303) Amounts due from the government 0 0 0 0 (921,844) (308,808) (920,303) (220,303) Loans granted to and amounts due from governmental 0 0 0 0 entities
Loans granted to and amounts due from (32,336,879) (10,086,437) (32,336,880) (9,386,437) 52-1- The amendment of errors includes the following items: non-governmental entities/persons Investment in shares and other securities (4,834,727) (12,704,094) (4,856,643) (10,658,155) Group Parent Company Due from subsidiaries and affiliates 500,510 (125,909) 500,510 (125,909) 2019 2018 2019 2018 Other accounts receivable (8,696,464) (16,372,287) (8,200,243) (16,496,345) Rls(m) Rls(m) Rls(m) Rls(m) Statutory deposit (8,319,697) (4,442,881) (8,319,697) (4,442,881) Prior years' adjusted income tax (220,303) (220,303) (220,303) (220,303) Operating portion of other assets 1,619,441 2,670,434 4,163,594 2,620,754 Adjusted value added tax (VAT) 0 0 0 0 (51,348,173) (42,650,354) (48,316,921) (39,500,674) Adjusted withholding tax and prior years' salaries (1,540) (88,505) 0 0 Net cash inflow (outflow) from operating activities 116,808,769 1,207,531 114,066,392 1,532,163 Adjusted insurance premiums 0 0 0 0 Adjusted provisions for doubtful debts (700,000) 0 (700,000) 0 Adjusted incomes 0 0 0 0 Financial expenses 0 0 0 0 Other expenses 0 0 0 0 (921,843) (308,808) (920,303) (220,303)
140 Annual Report 141
54- Non-cash transactions
The major non-cash transactions during the year break down as follows: Amount in Rial 0 0 Rls(m) 0 0 151,386 183,724 1,374,763 3,805,258 87,421 0 18,053 203,253 0 112,136 1,018 1,794,053 0 22,062 10,276 30,840 3,621,535
2019 2018 Note Rls(m) Rls(m) Assets acquisition in exchange for loans granted 54-1 1,163,544 8,947,576 Assets offset for loans granted 54-2 0 0 Forex amount 5,918,880.00 13,543,424 945,164.00 27,821.89 1,103,015.57 79,787,435.07 2,082,735.99 0 87,236,036.28 11,718,322,378.70 73,885,210.00 47,465,841.19 89,013.46 1,323,176,820.79 0.01 2,173,507.33 3,308,589,200.00
Restructured loans (to settle previous loans) 9,664,422 9,427,069 Balance at the year end Exchange of assets 54-3 0 0
Number 2 0 1 1 33 1 0 2 15 8 22 1 13 1 Capital increase from dividends accrued to shareholders 0 0 1 6 1 Capital increase from assets revaluation reserve 0 0 ) ) )
10,827,967 18,374,645
)
the year
Effects of exchange 141,540 223,977 54 372,190
rate during Amount in Rial 5,350 0 Rls(m) ( 44,314 82,438 83,565 ( 8,142 0 ( 17,978 4,078 22,410 105 11,935 37 0 32,791 0 0 (
) ) ) ) ) ) ) 54-1- During the reporting year, the following assets have been acquired: ) ) ) ) ) ) ) )
Amount paid by Amount paid for ) Type of Debt amount at Value of acquired Debt balance 1,581,159 15,958,329.43 14,377,171 23,484 96,187 6,066 214 8,796,591 52,025 1,568,876 1,140,313 111,374 773,415 1,934,576 129,473 1,325,735 Amount in Rial ( ( Rls(m) ( ( ( ( ( ( 0 ( ( ( ( 1 ( ( 0 0 ( Type of asset customer/debt surpluse value of 0 ( customer the acquisition asset appraised after foreclosed remission by foreclosed property relationship date by expert foreclosure ) bank as appraised ) ) ) ) ) ) ) ) ) ) ) ) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) )
Residential Unrelated 3,796,513 1,069,305 68,909 18,492 2,676,791 properties customer 150,484,020.00 2,527,200.00 3,167,859.81 114,240,240.83 1,239,150.00 115,639,666.42 24,371,481,801.00 221,160,516.00 79,248,752.23 2,001,906,073.67 2,809,248.00 25,467,827.25 452,561,761.00 61,817,301.28 Forex amount ( ( 0.00 ( ( ( 0.00 ( ( ( ( 0.00 ( ( 0.00 ( ( Business/office Unrelated ( 29,881 8,438 0 0 21,443 properties customer Credited (cancelled) during the year ) ) ) ) ) ) ) ) ) ) ) Unrelated ) ) ) 2 2 26 1 1 21 9 32 1 10 4 Shares 0 0 0 0 0 1 1 3 Number ( ( 0 0 ( 0 ( ( ( ( ( ( ( ( customer ( ( (
Unrelated
Participation bonds 0 0 0 0 0 customer
Amount in Rial 2,183 6,066 Rls(m) 0 141,933 551,338 7,344,850 13,135,946 0 0 101,264 1,004,838 38,971 436,266 0 3,518,909 22,736 0 238,670 139,749 Factory and Unrelated 139,510 12,584,607 0 0 0 0 0 equipment customer
Unrelated Land 5,271,535 85,802 19,014 4,762 5,171,481 customer
9,097,929 1,163,544 87,923 23,254 7,869,716 during the year Forex amount 3,549,680.00 16,070,624.00 0 134,719,592.10 319,226.36 0 0 9,530,446.49 26,973,409.047 103,238,907.00 54,886,350.50 0 2,984,077,498.38 0.00 3,634,848.00 65,970,375.00 4,368,677.00 3,761,150,960.00 Opened (increased obligation)
54-2- During the fiscal year ended March 20, 2019, the bank did not offset any asset with the loans granted. Number 2 0 1 24 1 0 0 1 10 6 21 0 11 0 1 2 0
54-3- During the fiscal year ended March 20, 2019 the bank did not have any exchange of assets.
Amount in Rial Rls(m) 88,655 0 267 1,553,314 2,742,940 387,345 7,300,060 131,304 0 1,857,855 320,751 68,325 426,875 914 197,783 0 711 0 5,746,747 1,076,336 0
Balance at the beginning of the year
Forex amount 0 27,822 59,308,083.80 152,853,220.00 3,951,649 3,321,885.99 0.00 193,345,256.21 9,116,395,133.00 191,806,819.00 71,828,242.92 89,013.46 341,005,396.08 0.01 0.00 1.00 119,564.00 23,272,657.58
Number 2 0 35 2 0 1 1 2 26 11 33 2 12 2 4 4 5 The statement of obligations pledged by the parent company under letters of credit in foreign currency currency foreign in credit of letters under company parent the by pledged obligations of statement The breaks down as follows: 55-1-1- Type of currency Japanese Yen Turkish Lira Demand/call Euro Indian Rupee Omani Rial Swiss Franc Swedish Krona Turkish Lira Korean Won Japanese Yen Chinese Yuan UAE Dirham Indian Rupee Omani Rial Russian Ruble Korean Won Chinese Yuan Term Euro 55- Off-balance sheet items 55-1- The obligations under letters of credit (LCs) – in rial and forex
142 Annual Report 143 55-1-2- The obligations pledged by the parent company under rial-denominated letters of credit are as follows: 55-4- Managed funds and similar cases are as follows:
Balance at the Credited (cancelled) 2019 2018 Opened during the year Balance at the year end beginning of the year during the year Rls(m) Rls(m) Type of credit Number Rls(m) Number Rls(m) Number Rls(m) Number Rls(m) Loans granted out of managed funds 388,765 1,172,582 Demand/call 1 2,170 0 0 0 0 1 2170 Unused managed funds 84,117 73,347 Term 13 417,588 8 325,214 (5) (508,600) 16 234,202 Loans granted out of special Gharzolhassaneh (interest-free) deposits 176 180 419,758 325,214 (508,600) 236,372 Special unused Gharzolhassaneh (interest-free) deposits 41 37 473,099 1,246,146
55-2- The obligations under letters of guarantee issued in rial and foreign currency 55-2-1- The statement of obligations pledged by the bank under the letters of guarantee in foreign currency 55-5- The obligations created under letters of credit and letters of guarantee by breaks down as follows: a breakdown of collateral type
2019 2018 2019 2018 Amount in Forex Amount in Rial Amount in Forex Amount in Rial Rls(m) Rls(m) Rls(m) Rls(m) Deposits 2,859,595 5,794,517 UK Pound 138,334 7,715 138,334 7,262 Participation bonds and other debt securities guaranteed by government and CBI 0 0 Euro 34,503,662 773,760 15,898,916.86 1,595,760 Participation bonds and other debt securities guaranteed by other banks 0 0 Canadian Dollar 2,370,000 0 2,370,000 68,152 Banking LGs 459,280 699,807 Chinese Yuan 15,642,623.3 0 15,642,623.30 92,964 Letters of credit transacted 0 0 781,475 1,764,138 Shares listed on the stock exchange 25,581 17,817 Land and buildings 925,219 953,216 Machinery 40,364 55,479 55-2-2- The obligations pledged by the bank under rial-denominated letters of guarantee are as follows: Checks and promissary notes 14,073,022 9,705,316 Other 44,010 268,862
2019 2018 18,427,071 17,495,014 Unseccured obligations 1,608 95,334 Rls(m) Rls(m) 18,428,679 17,590,348 Obligations for LGs issued 13,605,572 8,106,391 13,605,572 8,106,391 56- Capital obligations and contingent liabilities
55-3- Other obligations pledged by the bank break down as follows: 56-1- There were no material capital obligations as at the balance sheet date. 56-2- There were no material contingent liabilities as at the balance sheet date 2019 2018 Rls(m) Rls(m) 57- Earnings per share (EPS) Obligations for participation bonds and other similar securities guaranteed 0 0 Obligations for credit cards 4,125,319 1,928,107 57-1- Basic earnings per share Obligations for contracts in Forex - Foreign Exchange Reserve Account 0 0 The basic EPS is earned by dividing the dividends belonging to ordinary shareholders by the average weighted Obligations for syndicated contracts 0 0 number of ordinary shares outstanding with the shareholders. The average weighted number of ordinary shares Obligations for commodity loans guaranteed 0 0 (basic) consists of 8,000,000,000,000 shares. Obligations for contracts in Rial 29,150,962 18,119,400 57-2- Diluted earnings per share Obligations for contracts with the Management and Planning Organization 0 0 The diluted earnings per share is earned by dividing the dividends belonging to ordinary shareholders by the Obligations for amounts received from the National Development Fund (Rial) 0 0 average weighted number of ordinary shares outstanding with the shareholders upon adjustment of dilution Obligations for amounts received from the National Development Fund (Forex) 0 0 impact of all potential ordinary shares. The average weighted number of ordinary shares (diluted) consists of Obligations by borrowers/users for credit services 4,125 4,472 8,000,000,000,000 shares. Obligations for mutual funds guaranteed 2,566,525 5,105,737 Obligations for drafts 10,563,989 3,689,768 58- Post-balance sheet events 46,410,920 28,847,484 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 governing the minimum transparency standards and public disclosure by credit institutions.)
144 Annual Report 145 59- Bad (written-off) debts Board of Directors Saman Bank has no record of bad/written-off debts as at March 20, 2019.
60- A profile of the bank’s risks Senior Risk Committee
Saman Bank has devised and established a specialized and appropriate structure which is consistent with the CEO accepted framework of risk management. This structure will enable the bank to manage the significant risks in banking industry within the context of a business model devised for banking activities and operations. The information provided in this section is rooted in the bank’s operations and reflects the effect of risks on the Risk Department balance sheet and the statement of the profit and loss. The key risks which are chiefly addressed by the Saman Bank management in compliance with the risk management guidelines recommended by the Basel Committee (Basel II) are listed below: • Credit risk • At Saman Bank the responsibility for all accepted risks shall remain with the Board of Directors; • Liquidity risk • The Bank’s Senior Risk Committee shall regularly monitor and measure the existence, accuracy and adequacy of the management policies and processes, control and encounter with various risks affecting Market risk • the bank’s operations. Additionally, the Senior Risk Committee shall also have to ensure the compliance of • Operational risk the bank’s procedures for internal controls with the framework recommended by the Central Bank of Iran (CBI), to monitor implementation of the risk policies adopted by the Committee and the board of directors The foregoing risks emerge from the bank’s business model and the risk management mechanism. In the by concentrating on the consolidation and enhancement of bank reputation and position and to maintain a current model, attempt has been made to identify the events which may affect the level of the bank’s achieving its proper capital adequacy ratio as required. The outcome of the Committee’s actions shall be submitted to paramount goals within the framework of risk management. More notably in parallel with the risks evaluation, the the bank’s board of directors under the title of “Guiding and Regulatory Reports”. bank’s risk management will take the anticipated loss index as well as the quantitative and qualitative models into account and will continuously develop and enhance its evaluation models and patterns. • The High Risk Committee, regarded as a key body which substantially affects the various risk management areas pursues the following goals: – To approve the level of risk appetite and desired capital adequacy ratio every six months, monitor the 60-1- Relationship between various business segments and the key risks each process of this ratio and prepare it for approval by the board of directors along with the key policies for segment is exposed to maintenance of this ratio up to the desired level; Saman Bank has a strong determination to counter the business risks and environmental uncertainties. The key – To approve the annual report on the performance appraisal of the bank’s risk management system and business segments impacted by financial risks include the retail banking division which is substantially affected prepare it for submission to the board of directors to be incorporated in the annual report addressing the by credit and liquidity risks and the corporate banking division which is influenced by various credit, liquidity and shareholders’ general meeting; market risks. The operational risks may accordingly affect some areas of current activities of the segments which – To approve the annual risk management plans concerning the development, improvement and will be surveyed and evaluated by applying the common practices. implementation of the risk measurement, assessment and management systems in the bank which may include procurement of required hardware and software facilities and recruitment of human resources; Saman Bank – To review reports and conduct periodic assessment on the calculation and measurement of the bank’s overall risks and identify the improved areas (with emphasis on the compliance with the approved policies for the risk control management, cases of non-compliance, departments and persons involved, feedback policies in respect of non-compliance and effectiveness of such policies) and provide information to the Private International Corporate Retail board of directors on the outcomes of the evaluation and measures taken in these areas; banking banking banking banking • The Risk Department has been created to act as an executive arm of the High Risk Committee with the aim of fulfilling the requirements set forth by the Central Bank of Iran (CBI) and preparing the grounds Credit risk Low Credit risk Low Credit risk Average Credit risk Low for execution of the guidelines recommended by the Basel International Committee. This department will identify the principal financial risks as accepted by the Basel Committee including credit, liquidity, market and operational risks and will report them to the High Risk Committee, the CEO, and other appropriate Market risk Low Market risk Average Market risk Low Market risk Low committees. The Risk Department reports to the Bank Deputy for Supervision as specified in the 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. Liquidity risk Low Liquidity risk Low Liquidity risk Average Liquidity risk Low 60-3- Credit risk Operational risk Low Operational risk Low Operational risk Low Operational risk Average 60-3-1- Definition of the credit risk Credit risk is the likelihood of suffering loss arising from the counterparty’s failure to meet his contractual obligations with respect to the principal amounts and interests. That is the reason why the main component in 60-2- Framework and chart of risk management banking operations will meaningfully be premised on the correct performance, design and implementation of The risk management is responsible for developing and controlling the bank’s risk management policies. Thus written procedures and policies for identifying, assessing, monitoring and controlling the credit risk. The credit in line with the policy of effective risk management, Saman Bank has devised and created a Risk Management policies will provide a framework for financings and granting credit facilities by the bank. Obviously, the bank System comprising the High or Senior Risk Committee and the Risk Department as illustrated in the diagram credit policies shall include the matters such as target markets, portfolio composition, pricing requirements, below. The Risk Department report to the Bank Deputy for Supervision and shall have to implement the decisions terms of reference, loan approving or sanctioning authorities, reporting procedures, the process relating to list taken by the Senior Risk Committee. of exclusions and … Such measures shall be clearly defined in line with the banks’ contingent procedures and shall be appropriate to the scale and complexities of banking operations.
146 Annual Report 147 More significantly, the credit policies shall be devised and implemented with a view to the internal and external • Natural or legal person independently factors such as the bank market position, business locations/areas, staff capabilities and technological advances. • The ownership relationships between the natural and legal persons which include the following: Arguably, these policies shall particularly define the banks’ objectives in the areas of portfolio composition, – A natural person as well as his/her spouse and dependents with affiliates and their associates; exposure limits of the counterparty or a group of related parties, special industries or economic sectors, A legal person/entity with affiliates and their associates; geographical regions and special products. In general, banks shall ensure that their internal exposure limits – are consistent with any type of contingent limitations or scopes which have been determined by the banking – Affiliates and associates of a natural person or a legal entity having interrelationships provided that inspectors (regulators). multiplication of their ownership percentages in such units will be at least 20%. 60-3-2- Credit policies and procedures • The managerial relationships between the legal entities which include the following: Saman Bank credit policies covering loans, facilities and outstanding debts or claims due to this bank are – A legal entity with other legal entity having at least two thirds of joint board members; described as follows: – A legal entity with other legal entity having joint chairmanship of board of directors. A. Loan facilities: to abide by the authorized sanctioning limits and amend the loans portfolio based on tenor • The financial relationships between a legal entity and a natural person which include the following: and return. A natural person with his/her spouse and dependents; B. Claims: To reduce the debt balance (receivables) and review the records of large debts – The obligor with obligee provided that the amount of guarantee comes up to at least 75% of the Accordingly, the most significant plans and credit requirements of the bank are as follows: – obligor’s annual income or assets. The reverse relationship in this proportion may apply when these • To set the quantitative goals of the policy on loan facilities, debt collection, letters of guarantee and two parties have mutually agreed on counter guarantees; letters of credit; – Party (A) with party (B) provided that over 50% of the gross annual income of party (A) is funded by • To define the scope of powers or sanctioning authority of credit departments in granting loans and party (B). The reverse relationship of this proportion does not apply; collecting debts; – The persons who each holds at least 20% of shares or capital with a voting right for a legal entity; • To install and implement the monitoring systems for granting loans; – The persons who earn each over 50% of their gross annual income from the same income source. • To emphasize the customers’ repayment capacity for receipt of loans; • The controlling relationships between a natural person and a legal entity include the following: • To establish a supervisory and controlling system over the quality of informational reports; – A natural person as well as his/her spouse and dependents with a legal entity who has in any manner • To mitigate the risk of loans and commitments by receiving secure collaterals; arranged the voting right of over 20% of such legal entities’ votes; • To comply strictly with the regulations governing the single borrower/beneficiary, related parties as well A legal entity with other legal entity who has in any manner arranged the voting right of over 20% of as the large loans and debts; – the other legal entity’s votes; To regularly hold the meetings by Restructuring and Debt Collection Committees at various levels so as • A natural person or a legal entity with other legal entity who has the power to direct and control the to take decisions on the customers’ outstanding debts as quickly as possible; – financial and operational policies including the decisions on the distribution of dividend or profit; • To pay special attention to the reasons for growing overdue and outstanding debts, paid letters of credit, paid letters of guarantee by preparing a statement, filing a report and making necessary – A natural person or legal entity with other legal entity who has the power to appoint or dismiss the recommendations; majority of board members of the entity in any manner arranged. • To conduct periodic inspections by the inspectors named in relevant directives and pay random visits to When single borrowers/beneficiaries are identified, the corporate banking offices shall enter the information the loan business places for monitoring their progress, and functionality by supervisors, credit commit- about the loan borrower in the bank’s statistics and database management system in the unit of the single tee members and other competent authorities. beneficiary. Payment of loans to or creation of obligations for any single borrower which may cause such loans and 60-3-3- Executive units of credit risk management obligations to fall under the category of “Large Loans and Liabilities” shall have to receive the approval of the The implementation areas will include across-the-board sectors (all departments and divisions) of the bank in bank board of directors. Therefore, if the customer meets the requirements for receipt of loans and obligations particular, branches, credit affairs division, debt collection office, credit committees and other credit units. within the stipulated limits, he shall finally have to obtain the authorization from the board of directors.
60-3-4- Scope of powers at various organizational levels for sanctioning loans and liabilities Limits of large loans and liabilities An important element of credit risk management is to specify the level of exposure for individual counterparties • The maximum total large loans to and obligations by ay single borrower shall not exceed 20% of the or a group of related counterparties. Considering the segregation of Retail and SMEs Banking and Corporate bank capital. 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 • The maximum total large loans and obligations will be eight times (eightfold) of the bank’s base capital. SMEs Loans and Liabilities. • When the loan amount requested by a single borrower is more than the specified limit in the applicable Large loans and liabilities regulations, the bank may under the prevalent rules, apply the procedures for granting joint-loans (such as syndicated, consortium or similar methods). Loans and obligations in the area of corporate banking shall be based on customer due diligence (CDD) of a 2 single borrower or beneficiary . The following persons will fall under the category of single beneficiary : Loans to and liabilities by related parties The loans to and obligations by related parties will be based on the KYC of related parties 3 . The following 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 persons will fall under the category of related parties: base capital. 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 of enjoying ownership, managerial, financial or controlling relationships or otherwise place the bank exposed to risks (in a vulnerable position) in 3. 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 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 significantly influenced in one way or another such as personal, ownership, managerial or supervisory relationships in a way that they may pref- or default on the loan obligations. erably use the bank as their financial resources and thus the bank’s interests are overshadowed by the interests of the said persons.
148 Annual Report 149 • Directors of the credit institutions including board members, managing director (CEO), deputy managing • Subsidiaries and affiliates to other banks; director and other executive board members; • Public joint-stock companies listed on the Stock Exchange. • Independent auditor (whether the auditing firm and copartner) and legal inspector of credit institution; Sanctioning bodies in Retail and SME Banking Department • A natural person and his family members including the father, the mother, the spouse and the children who jointly or severally own at least 5% of shares in the credit institution; In managing the retail and SME banking affairs, the branches of Saman Bank vary in terms of credit sanctioning authority, and are categorized into five classes: • The father, mother (parents), spouse and children of the related parties stated in items 1 and 2 above; Top Group Branches, Group I Branches, Group II Branches, Group III Branches and Group IV Branches. The A legal entity whose capital or shares are owned by the related parties stated in items 1,2, 3 and 4 above • scope of credit sanctioning powers of each group for acceptance and approval of the types, components and in a manner that the said related parties have the authority to appoint at least one member of the board amounts of collaterals shall be subject to the requirements set forth in a Saman Bank directive governing of directors in this legal entity; “The Requirements for Granting Retail and SME Loans” and subsequent amendments and annexes thereof. A legal entity in which the related parties stated in items 1, 2, 3 and 4 above hold management positions • For the purpose of approving credit loans and letters of guarantee and in compliance with the scope of (board member, executive board, managing director (CEO) and deputy managing director); credit sanctioning authority defined for branches, all the bank branches shall have to review and decide on • A legal entity that directly holds at least 5% of shares in the credit institution; all the customers’ credit applications being consistent with the scope of delegated powers (by computing the customer’s current debts and liabilities) at the commissions which are held at the various levels of bank A legal entity in which at least 10% of its capital or shares is directly owned by the credit institution; • organization. The commissions which are authorized to make decisions on granting loans in rials and foreign • A legal entity in which at least 20% of its capital or shares is directly owned by the legal entities stated in currencies, issuing letters of guarantee, opening letters of credit and entering orders for documentary drafts item 8 above. guaranteed by the bank include the following: Branches Credit Commission Limits of loans to and liabilities by related parties • • District Credit Commission (District head office) • Individual limit: the total net loans to and obligations by each person shall not exceed 3% of the bank’s base capital • Internal SME Credit Commission • Group limit: the total net loans to and obligations by related parties shall not exceed 40% of the bank’s • SME High Credit Commission base capital The scope of sanctioning authority in rials delegated to credit commissions of branches and • The bank board of directors shall approve the loans to and obligations by related parties prior to the grant of any loans or creation of any obligations. The board meetings for decision making on the grant of district head offices loans to or creation of obligations by the related parties shall be held without the presence of the related parties involved in this process. Sanctioning authority of credit commissions of branches Rls(m)
First grade collaterals: type I Corporate loans and liabilities and IV combined or first grade First grade collaterals: type I and Type of loans andcredits Type of Commission collaterals: type I and second third grade guarantee combined The Corporate Banking Commission shall have the authority to sanction the loans and credit lines for each in Rial grade combined corporate customer up to the limit of Rls. 800 billion and the bank board of directors shall approve the amounts of loans in excess of Rls. 800 billion. Natural persons Legal persons Natural persons Legal persons Class III and IV Loans in Rial 1,500 2,500 600 1,000 4 Retail and SMEs loans and liabilities Branch Credit Commission LGs in Rial 1,500 2,500 600 1,000
The loans and obligations in the area of retail and SMEs banking shall be based on the type of customer and the Class II Loans in Rial 2,500 4,000 1,000 1,500 amount of requested loans. Thus, the prevailing criteria for identifying the retail and SMEs customer include Branch Credit Commission LGs in Rial 2,500 4,000 1,000 1,500 the following: Class I Loans in Rial 4,000 6,000 1,500 2,500 • Natural persons: all natural persons over the age of 18 applying for any amount of loans and obliga- Branch Credit Commission LGs in Rial 4,000 6,000 1,500 2,500 tions. Top Loans in Rial 6,000 9,000 2,500 4,000 • Legal entities: that group of legal entities that along with the relevant single beneficiaries make a Branch Credit Commission LGs in Rial 6,000 9,000 2,500 4,000 request for loans and liabilities for the maximum amount of Rls 500 billion and/or its rial equivalent in foreign currencies. All branches are required to accept and consider the credit applications within the above mentioned limits and, The scope of sanctioning authority of SMEs credit commissions where the amounts of such applications are in excess of the stipulated limits, they have to send them to the Corporate Banking Department in coordination with the Retail and SMEs Banking Department. Regardless of Sanctioning authority of district credit commissions of branches in rial and SMEs credit commissions Rls(m) the loan amounts being requested or used, any credit services to the following customers shall be provided solely by the Corporate Banking Department: First grade collaterals: type I Authority for the 1st, 2nd and 3rd and IV combined or first grade First grade collaterals: type I and • Manufacturing companies with a registered capital in excess of Rls. 100 billion; Type of Commission grade collaterals collaterals: type I and second third grade guarantee combined grade combined • Trading and service companies with a registered capital in excess of Rls. 120 billion; Legal persons Natural persons Legal persons Natural persons Legal persons Natural persons State-run corporations and non-governmental public organizations; • District offices commission 15,000 • Related parties and bank’s subsidiaries and affiliates; Internal credit commission Internal credit commission 40,000 60,000 20,000 30,000
Retail and SME credit 4. SME or Business loans: means facilities granted to the targeted trade union or guild for the purpose of providing working capital to run and Internal credit commission 200,000 expand the existing businesses or create new business ventures. commission Retail loans: means the facilities granted to meet the consumer needs of retail customers such as home repairs and purchase of housing and consumer goods.
150 Annual Report 151 60-3-5- Methods of reducing credit risk In 2017-18, Saman Bank updated its scoring criteria for corporate customers which would be described in the following section. One way of mitigating the credit risk is the collateral coverage with a view to the risk level and debt liquidity ratio. Considering the risk exposure, collaterals may be divided into three grades: Development of a new scoring model for the bank’s corporate customers first grade collaterals and guarantees In order to improve and enhance its scoring process, the bank has developed a new model for scoring the corporate customers. This model which has been adopted from the international standards is employed with First grade collateral of type I includes Gharzolhassaneh (interest-free) savings, cash collateral in Rials • a view to the circumstances prevailing in Iran. The main target group of this new model will initially include and without banking cards; the legal customers’, and at the later stages, the major natural customers. • First grade collateral of type II includes other deposits (excluding current accounts and; Overall structure for credit scoring of corporate customers • Atieh savings 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 of the bank’s long-term investments, investment certificates of fixed income funds for Drivers related which Saman Bank is acting as the registrar or guarantor of the fund’s units; to the industry • 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); Co-direction of business cycles • First grade collateral of type IV: Includes investment deposits and general long-term registered and 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. Entry Barriers Industry risk Second grade collaterals and guarantees include immovable properties and shares of companies listed on the stock exchange (excluding the shares of companies which are traded on the agreed primary market). Alternative risks Third grade collaterals and guarantees include the guaranteed promissory notes received from customers as well as guaranteed documents. Business risk It is noted that the procedures for collaterals acceptance are subject to the requirements set down in the profile Market share (historical and bank’s directive on the retail and SMEs loan facilities as well as the subsequent amendments. planned processes)
Product diversity, geographical Overall 60-3-6- Customers’ credit scoring process location, customers, suppliers, assessment assets, sales outlets For the credit scoring process, certain components and criteria such as microelectronic environment, Competitive position customer’s business status, customer’s financial standing and his credit reputation are examined to assess Operating profit (EBITDA, historical background, and forecasts thereto) his eligibility for receipt of loan facilities. Considering the fact that the bank has customers from consumption, and its fluctuations SMEs and corporate categories, being inherently different, it will apply varying methods of customer credit Scoring scoring specific to each category. Thus the scoring criteria will cover three areas for customers from Special corporate scoring process consumption, SMEs and corporate sectors. Overall the general scoring process will include the following factors stages: • 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 Financial leverage and debt relevant data and information shall remain with the branches; Financial risk • In addition to the said reports and records, all branches shall, for payment of business loans up to the liquidity limit of ten billion rials (like loans for working capital, business expansion and/or business creation) act profile for a site visit of the customer’s business location, examination of financial statements and preparation of a report on his financial position and then in the final analysis, prepare an expert report containing Creation of cash flows an express opinion on the customer’s credit file which will serve as a basis on which decisions are to be made as appropriate; • The responsibility for receiving the proposals made by branches, evaluating the customer’s scores/ rates, managing the credit limits assigned for branches and expressing opinion on the suggested credit Financial policies shall rest with credit commissions; Additional key Support or contribution The responsibility for sanctioning credits in the decision-making departments in respect of the credit Adjustment • indexes in scoring provided by the government of size shall remain with credit commissions; industrialists
• The responsibility for providing an independent opinion on the loans granted by designing and updating Comparison with co-group the scoring/rating system, controlling and monitoring the credit risk shall remain with the risk companies management department; • The functions assigned to the risk management department are segregated from the functions of the business activity and customer relationship management in credit areas; Business risk profile The policies on decision-making, monitoring and reporting independently about the credit risk shall be • the business risk of an entity in the market and its sectoral movements are regarded as a business driver. valid under any circumstances. The business risk profile may be classified into the following sectors:
152 Annual Report 153 • Industry analysis 60-3-7- Analysis of credit quality • Competitive position The bank assets quality including loans, liabilities/obligations, investments, type, amount and adequacy of the collaterals received (ratio of loans balance to updated value of collaterals) LTV in terms of credit risk profile Industry analysis: the industry-related drivers are defined with the aim of employing general drivers in – have been illustrated in tables 60.3.7.1 through 60.3.7.4. each industry and constitute the following sub-sectors: 60-3-7-1- Analyzing credit quality of loans granted, obligations and investments based on the bank’s – Business cycles: this factor will measure the risk of movements in sales and operating profit in a internal credit scoring/rating system predictable future compared with the previous industrial performance/indexes. It should be noted that the customers’ scoring/rating system in Saman Bank is in the process of formation. – Entry barrier: a sub-sector which measures the support and protection level of the companies Although the credit system has been designed, classification of the bank’s customers by the degree of risk involved in industry. exposure has not been performed yet. – Alternative risk: this factor will measure the risk and vulnerability of industry with regard to obsolescence and maturity of technology. 60-3-7-2- Table for analyzing the credit quality of the loans granted, obligations and – Competitive position: this situation is defined with emphasis on specific aims and relevant risks by investments based on the assets categories analyzing the following factors: Obligations under LGs Market share Loans granted to banks Loans granted to customers – and LCs
– Diversity and dispersion 2019 2018 2019 2018 2019 2018 – Operational profitability Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Current 0 0 147,888,357 115,735,134 18,428,679 17,590,348 Financial risk profile Overdue 0 0 542,812 4,499,811 0 0 Outstanding 0 0 7,402,838 825,883 0 0 The financial risk will measure the strengths of a company’s financial profile and assess its ability for creation of a recurring cash flows, liability requirements, financial flexibility and viability. Doubtless, an entity Doubtful 0 0 21,352,025 23,488,325 0 0 with a strong financial risk profile will outperform as a mitigant to adjust the adverse effects of economic Total gross amount 0 0 177,186,032 144,549,153 18,428,679 17,590,348 cycle, industrial dynamism, regulatory changes and income-based unforeseen losses. This scoring process Value inpairment reserve 0 0 (7,712,515) (7,412,515) 0 0 concentrated on liquidity ratios will remain invariable as leverage and cost coverage ratios. These ratios which Net book value 0 0 169,473,517 137,136,638 18,428,679 17,590,348 are appropriate for the credit risk assessment will slightly register any change or deviation in the accounting system compared to the financial ratios which are based on profit and loss items or the balance sheet items. Assessment of the scoring cards will be made by applying the following risk factors: 60-3-7-3- Credit quality of participation bonds, Islamic treasury bonds, Sukuk bonds, units of • Financial leverage and debt mutual funds and similar items • Financial flexibility and creation of cash flows Credit quality analysis Liquidity • 2019 2018 The foregoing model has devised ten grades or categories for assessment and the customer will be placed in Rls(m) Rls(m) these categories based on the ratings they have achieved: Issued by the government and Central Bank Ministry of Economic Affairs and Finance 0 10,000 Grade Risk category S and P: corresponding rates 0 10,000 Grade 1 Low risk AAA to BBB+ Issued by state-run corporations Grade 2 Low risk BBB Shahrivar Sevom Financial Intermediary Co. 291,190 291,190 Grade 3 Low risk BBB- Tir Sevom Financial Intermediary Co. (Ltd.) 1,998 1,898 Grade 4 Average risk BB+ Mehr Financial Intermediary Co. (Ltd.) 0 55 Bahman Sevom Co. 34,800 34,800 Grade 5 Average risk BB Shahrivar Chaharom Financial Intermediary Co. (Ltd.) 0 3,033,200 Grade 6 Average risk BB- 327,988 3,361,143 Grade 7 High risk B+ Issued by non-governmental Sector Grade 8 High risk B Novin Saman Fixed-income Fund 0 0 Grade 9 High risk B- Saman Yekom Mutual Fund 10,000 10,000 Agah Yekom Charity Fund 2,500 2,500 Grade 10 Default CCC Amin Saman Mutual Fund 10,000 10,000 Mutual Fund for Iran Capital Market Development 35,000 35,000 Based on this model, nine grades of customers with low, average and high risks are ranked in the non-default Nikandishanhonar Charity Fund 0 2,535 category and grade ten registers the customers whose businesses are in a very bad condition. Negin Saman Fixed-income Fund 561,934 49,000 Sahm Ashna Special Yekom Mutual Fund 122,203 0 The overall assessment will principally be based on the business risk profile and the financial risk profile which Tir Yekom Financial Intermediary Co. 0 800 will be adjusted or modified by taking the following factors into account: Khordad Dovom Financial Intermediary Co. (Ltd.) 29,938 29,938 • Financial policies Mehr Yekom Financial Intermediary Co. 0 50 771,575 139,823 • Supports provided by the parent company and the government 1,099,563 3,510,966 It is further noted that the foregoing methodology shall currently apply to all corporate customers of Saman Bank.
154 Annual Report 155 60-3-7-4- Types and amounts of collaterals received from credit customers 60-3-7-5- The balance of loans based on the ratio of loans balance (less provisions) to updated cash value of collaterals Types of main collaterals 2019 2018 Rls(m) Rls(m) Types of main collaterals 2019 2018 Loans granted to natural persons Rls(m) Rls(m) Cash 1,803 3,109 Loans granted to banks Participation/Sukuk bonds 3,733 24,420 Less than 50% 0 0 Marketable securities (shares) 105,895 189,143 51 to 70% 0 0 Non-listed securities (shares) 0 0 71 to 90% 0 0 Deposits 5,605,235 4,748,797 91 to 100% 0 0 Real estates 39,493,256 46,704,603 Over 100% 0 0 Plant and equipment 1,530 16,050 Loans granted to real persons Letters of guarantee 18,077 27,194 Less than 50% 17,488,503 3,500,632 Checks/Cheques 43,981,079 44,759,780 51 to 70% 4,220,999 2,867,996 Promissary notes 6,545,922 5,627,211 71 to 90% 2,854,386 3,271,590 Binding contracts/agreements 6,882,044 7,018,753 91 to 100% 6,590,480 2,443,061 Other 31,590,608 203,244 Over 100% 17,053,332 93,709,376 Loans granted to legal persons Loans granted to legal persons Cash 1,868 3,957 Less than 50% 13,026,215 3,886,471 Participation/Sukuk bonds 0 527,960 51 to 70% 3,853,969 4,750,465 Marketable securities (shares) 4,390,271 8,145,187 71 to 90% 2,292,542 7,009,290 Non-listed securities (shares) 0 0 91 to 100% 3,685,685 7,439,404 Deposits 6,828,037 7,085,518 Over 100% 106,119,923 15,670,868 Real estates 26,629,879 43,187,884 177,186,034 144,549,153 Plant and equipment 1,067,380 2,887,369 Letters of guarantee 1,261,554 5,394,662 • 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 Checks/Cheques 188,253,470 197,114,630 balance of customers’ debts. Promissary notes 9015759 15561725 Binding contracts/agreements 10,064,339 18,462,664 Other 21,060 2,196,899 60-3-8- Credit risk concentration 381,762,799 409,890,759 The credit risk concentration in Saman Bank has been defined in a manner to reflect the type, volume and nature and content of credit risk. More significantly, the credit risk concentration will include the two • Based on the written report filed by the bank’s expert, the said amount is the mortgaged value of all collaterals in possession 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.
156 Annual Report 157 60-3-8-1- Distribution table of loans and investments by economic sectors and their inland 60-3-8-2- 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 2019 2018 2019 2018 2019 2018 Amount Total percentage Amount Total percentage Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Percentage Rls(m) Percentage Book value 177,186,032 144,549,153 18,292,591 13,435,948 18,428,679 17,590,348 Real customers 19,625,922 5 24,709,991 14 Constant (fixed) profit contracts Loans/liabilities by economic sectors Legal customers 122,117,260 32 48,966,201 28 Industry 60.3.8.1.1 44,145,782 37,122,047 11,992,763 1,255,022 3,350,462 1,627,526 Real customers 14,398,074 4 21,395,002 12 Housing 21,207,223 17,028,850 0 0 14,579 3,436 Participation contracts Legal customers 227,595,656 59 78,424,928 45 Commerce 62,176,117 55,851,207 0 0 8,855,540 12,336,916 Services 42,424,640 29,792,514 4,927,586 8,370,728 6,176,491 3,621,008 Agriculture 1,091,878 1,183,906 0 0 876 761 The Gharzolhassaneh (interest-free) loans have been classified as non-constant profit contracts. Banks 0 0 272,679 299,233 0 0 Mining 452,970 153,354 0 0 30,731 701 Other 5,687,422 3,417,275 1,099,563 3,510,968 0 0 60-3-9- Procedures for managing non-current loans 177,186,032 144,549,153 18,292,591 13,435,948 18,428,679 17,590,348 The bank’s policy on the management of non-current claims is premised on preventive measures supported Size of loans/degree of obligations onshore by collaterals and proper management with follow-up actions and debt collection procedures. Considering the and offshore (inland & overseas) requirement set forth in the Law on the Elimination of Barriers to Competitive Production and Enhancement of Inland 177,186,032 144,549,153 18,292,591 13,435,948 18,428,679 17,590,348 National Financial System passed on April 21, 2015 by the Islamic Parliament and in compliance with the CBI’s Overseas 0 0 0 0 0 0 directive No. 94/69383 governing the procedures for calculation and distribution of shared profit, banks shall 177,186,032 144,549,153 18,292,591 13,435,948 18,428,679 17,590,348 have to reform their assets structure and increase the share of income-generating assets through the sale and disposal of the foreclosed properties and assets and collection of debts. In order to improve its assets structure and achieve the targets set for collection of non-current debts, Saman Bank takes appropriate measures within the context of its own internally approved by-laws and procedures. To this end, where the follow-up actions 60-3-8-1-1- Distribution of loans, obligations and investments by type of industry: towards collection of the bank’s claims in the pending files (including movable and immovable properties and/ or rights and privileges which will be held or put under the bank’s ownership) fail to collect debts at branch 2019 2018 levels and credit departments, measures will primarily be taken by relevant departments and Debt Collection Rls(m) Rls(m) Office and, at a later stage, legal actions will be taken by the bank’s legal deputy. Loan facilities In performance of operational and strategic actions and subject to the applicable laws and regulations, Saman Automobile and auto parts 165,519 36,429 Bank shall have to sell surplus and foreclosed assets and properties to collect its outstanding and doubtful Mining and metal industries 64,675 90,836 debts. As has been contemplated in the organizational structure, the Collection Office shall be tasked with Petrochemical, chemical industries and oil products 651,877 342,913 reducing the amounts of past-due loans. Accordingly, the bank’s Logistical Deputy shall be responsible for sale Foodstuffs and pharmaceuticals 5,696,440 3,498,090 of the bank’s real estate properties. Energy 0 0 The procedures for collecting claims and debts by all credit departments and offices of deputies are governed Contractual services 0 0 by the applicable laws and regulations in the country adopted by the CBI as well as the bank’s internal by-laws Telecommunication, computer and related industries 37,286,814 32,752,608 and directives. As prescribed in the prevalent laws, requirements and the bank’s internal by-laws, the overall Financial intermediary 0 0 procedures for collecting debts from sale of foreclosed properties and collaterals will sequentially entail Other 280,456 401,171 and include calculation of mortgage debt, submission of documents, request for issuance of enforcement Investments writ, service of enforcement writ, inquiry about property registration status, official expert’s appraisal report, Automobile and auto parts 0 0 notification of official expert’s opinion, issuance of authorization prior to the notice of sale auction or bid, Mining and metal industries 0 77,598 operating procedures for sale of foreclosed properties and liquidation of claims due to the bank. Where the Petrochemical, chemical industries and oil products 0 0 mortgaged real estate is not sold at the sale auction, the bank shall have to take possession of six shares (the Foodstuffs and pharmaceuticals 0 4,440 entire portion) or partnership in the foreclosed mortgage put up for sale pursuant to the bank’s applicable rules Energy 0 2,558 and on the strength of the permits or licenses issued for this purpose. Contractual services 0 52,587 Telecommunication, computer and related industries 11,515,934 1,398 Financial intermediary 0 42,190 Other 476,828 1,074,251 Obligations Automobile and auto parts 383,064 186,078 Mining and metal industries 233,480 113,416 Petrochemical, chemical industries and oil products 1,550,559 753,202 Foodstuffs and pharmaceuticals 850,526 413,153 Energy 0 0 Contractual services 0 0 Telecommunication, computer and related industries 0 0 Financial intermediary 0 0 Other 332,833 161,677 59,489,007 40,004,595
158 Annual Report 159 60-3-9-1- Distribution of non-current loans by economic sectors 60-4- Liquidity risk
Non-current loans balance Specific provision for doubtful debts Net loans and non-current claims 60-4-1- Definition of liquidity risk Economic Sector 2019 2018 2019 2018 2019 2018 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. Industry 6,594,556 8,960,648 1,778,648 1,990,808 4,815,908 6,969,840 Housing 4,584,891 1,530,551 273,186 128,589 4,311,705 1,401,962 60-4-2- Liquidity risk policies and processes Commerce 14,131,830 14,527,163 2,786,378 2,602,678 11,345,453 11,924,486 The Saman Bank policy is typically to keep for each type of currency a cash buffer of at least 2% of the total Services 3,497,535 3,389,665 1,053,562 823,526 2,443,973 2,566,139 deposits of the same currency which is being reviewed not to slide lower than this percentage. Further in this Agriculture 163,176 195,778 7,850 6,077 155,326 189,701 arrangement, a limit has been set for transactions with other banks and there is strict control not to violate Banks 0 0 0 0 0 0 such limit. Mining 240 2,379 0 0 240 2,378 60-4-3- Executive units of liquidity risk management Miscellaneous 325,447 207,835 33,129 81,075 292,317 126,760 29,297,675 28,814,019 5,932,753 5,632,753 23,364,922 23,181,266 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, the Sources and Applications (ALCO) Committee, the Treasury Department and the Risk Department will play the leading roles. 60-3-9-2- Balances of foreclosed assets 60-4-4- Credit risk measurement method (including bases and assumptions) 2019 2018 In order to measure the liquidity risk, Saman Bank uses the existing financial ratios in Basel III which include Rls(m) Rls(m) NSFR (Necessary Stable Funding Ratio) and LCR (Liquidity Coverage Ratio). Additionally, the liquidity gap which Movable properties 0 0 may exist between rial and foreign currencies shall be deployed for this purpose. Residential real properties 7,278,741 7,139,787 Business/Office properties 10,691,680 11,237,317 60-4-5- Mechanism for controlling and monitoring liquidity risk Plant and Equipment 4,251,085 4,679,958 The responsibility for controlling and monitoring the liquidity risk in Saman Bank shall remain with the Risk Investments 0 0 Department, Sources and Applications Committee and Treasury Department. The Sources and Applications Debt securities 0 0 Committee shall be responsible to the Senior Risk Committee and the Board of Directors and shall trace up the Land 3,130,506 2,675,855 following matters: 25,352,012 25,732,917 • To review and control the financial ratios and indices and deviation from the budget with respect to the forecast of annual operating budget; • To take decisions on the amount and optimal pattern of usage or consumption including credit lines, 60-3-10- Capital sum required for credit risk coverage foreign currencies, investments, cash or cash equivalent whether in rial or in foreign currency and interbank operations with a view to the level of impact on the bank profitability based on annual operating The amount of capital required for credit risk coverage will come up to Rls. 29,238,162/- million which has budget; been calculated and presented in the table 60.3.10.1. • To take decisions on the rates of funding and allocation of rial-denominated and foreign currency 60-3-10-1- The table for calculating the capital required for credit risk coverage sources with respect to the needs, peers’ rates, international market rates and sanctioning authority of executive units to change such rates with a view to their effect on profitability based on the annual 2019 2018 operating budget; Note Rls(m) Rls(m) • To take decisions on the solutions to liquidity coverage subject to the liquidity level approved by the Total credit risk weighted assets 60-7-2 365,477,022 242,021,627 Senior Strategy Committee and Senior Risk Committee; Percentage factor 8 8 • To determine inter-departmental interest rates; Capital required for credit risk coverage 29,238,162 19,361,730 • To review and approve a contingency plan so as to face liquidity crisis with a view to the level of impact 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;
160 Annual Report 161 • To adopt proper policies so as to keep the profit margin of resources and uses appropriate to the rates 60-4-5-3- 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 2019 of directors; Without Less than 3 months to More than Book value 1 - 3 months 1 - 5 years specified 1 month 1 year 5 years • To ensure the control and maintenance of liquidity level in various circumstances; maturity • To monitor interbank operations. 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 148,681,746 148,681,746 0 0 0 0 0 Due from banks and other 60-4-5-1- Liquidity reserves 9,955,293 9,955,293 0 0 0 0 0 credit institutions The table below shows the composition of bank liquidity reserves: Due from the government 0 0 0 0 0 0 0 Loans granted to and amounts 0 0 0 0 0 0 0 2019 2018 due from governmental entities Rls(m) Rls(m) Loans granted to and amounts Balance with CBI 412,377 3,886,993 due from non-governmental 169,473,517 72,686,319 36,372,780 28,194,240 27,486,739 4,733,440 0 entities/persons Cash and balance placed with other banks 143,810,093 29,915,670 Investments in shares and Bonds issued by the government 0 10,000 18,292,591 14,469,275 0 0 357,926 0 3,465,390 other securities 144,222,470 33,812,663 Due from subsidiaries and 2,428,333 0 0 0 0 0 2,428,333 affiliates Other accounts receivable 48,560,024 48,560,024 0 0 0 0 0 60-4-5-2- Table of liquidity ratios Tangible fixed assets 4,551,267 0 0 0 0 0 4,551,267 Intangible assets 4,952,329 0 0 0 0 0 4,952,329 Beginning of Max. during Min. during Mid-year Year-end Statutory deposit 35,798,262 904,447 746,098 1,416,632 3,465,832 29,265,253 0 the year the year the year Other assets 38,755,778 11,338,982 823 12,866 25,337,912 0 2,065,195 Percentage Percentage Percentage Percentage Percentage 481,449,140 306,596,085 37,119,701 29,623,738 56,648,409 33,998,693 17,462,514 Cash and cash equivalent to total assets 1 17.2 22.4 40.3 14.7 36.6 Liabilities Cash and cash equivalent to total deposits 14.9 19.7 36.6 12.4 33.6 Due to banks and other credit (91,897,010) (80,891,744) 0 (11,005,266) 0 0 0 institutions Net cash assets to total deposits 2 11.9 17.0 34.5 9.8 31.6 Customers' deposits (65,532,014) (3,907,528) (3,907,538) (7,419,297) (18,151,606) (32,146,045) 0 Loan facilities to total deposits 47.2 46.4 52.2 37.7 41.1 Dividends payable (51,510) 0 0 0 0 0 (51,510) Loan facilities to on-year term deposits and more 92.0 103.8 115 92 115 Debt securities 0 0 0 0 0 0 0 3 39.6 46.7 60.1 39.6 58.3 Demand deposits to total deposits Provision for corporation tax 0 0 0 0 0 0 0 Provisions and other liabilities (8,692,291) 0 0 0 0 0 (8,692,291) 1. Cash and cash equivalent mean cash amounts, participation bonds and similar items with an active cash-traded market. Provisions for employees' 2. Net cash assets mean cash and cash equivalent, investment papers/certificates with an active cash-traded market less bank deposits, issued termination and pension (946,079) 0 0 0 0 0 (946,078) debt securities, other loans and liabilities which will mature (fall due) by next month. benefits 3. Demand deposits include the deposits without any contractual maturity such as current accounts, savings accounts and current interest-free accounts and … Investment depositors' equity (298,775,962) (5,296,755) (3,685,277) (6,997,329) (17,119,106) (265,677,495) 0 Total liabilities (465,894,866) (90,096,028) (7,592,815) (25,421,891) (35,270,712) (297,823,540) (9,689,879) Total shareholders' equity (15,554,274) (15,554,274) Total cash outflow from off-balance items (32,656,349) (11,429,722) (8,164,087) (4,898,452) (1,632,817) (1,632,817) (4,898,452)
Total liabilities, shareholders' equity and off-line items (514,105,489) (101,525,750) (15,756,902) (30,320,344) (36,903,530) (299,456,357) (30,142,605)
Gap 0 205,070,335 21,362,798 (696,607) 19,744,880 (265,457,665) (12,680,091) Accumulated gap 0 205,070,335 226,433,133 225,736,526 245,481,406 (19,976,258) (32,656,349) Gap to regulatory capital ratio 0 1,349 140 (5) 130 (1,746) (83) (percentage)
Accumulated gap to regulatory 0 1,349 1,489 1,485 1,614 (131) (215) capital ratio (percentage)
Gap to regulatory capital ratio base for other contingency 0 1,724 180 (6) 166 (2,232) (107) ratios (percentage)
Accumulated gap to regulatory capital base for other 0 1,724 1,904 1,898 2,064 (168) (275) contingency ratios (percentage)
162 Annual Report 163 2018 60-4-5-4- Analyzing the contractual maturities of financial liabilities Without Less than 3 months to More than 60-4-5-4-1- The table below shows the maturity of financial liabilities based on the maturity specified in Book value 1 - 3 months 1 - 5 years specified 1 month 1 year 5 years the contract. maturity Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) 2019 Assets Less than 3 months to More Without Cash in hand 36,749,077 36,749,077 0 0 0 0 0 Book value 1 - 3 months 1 - 5 years than specified 1 month 1 year 5 years maturity Due from banks and other 10,687,731 10,687,731 0 0 0 0 0 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) credit institutions Liabilities Due from the government 0 0 0 0 0 0 0 Due to banks and other credit institutions (91,897,010) (76,457,541) (8,120,984) (1,906,320) 0 0 (5,412,166) Loans granted to and amounts 0 0 0 0 0 0 0 Customers' deposits (65,532,014) 0 0 (65,532,014) due from governmental entities Debt securities 0 0 0 Loans granted to and amounts Loans received from the National 0 0 0 due from non-governmental 137,136,638 66,821,742 24,688,083 24,696,358 15,163,944 5,766,511 0 Development Fund entities/persons Investment depositors' equity (298,775,962) (20,644,181) (8,609,462) (124,806,633) (140,033) 0 (144,575,653) Investments in shares and 13,435,948 8,537,811 850 55 3,391,026 0 1,506,206 (456,204,986) (97,101,722) (16,730,446) (126,712,953) (140,033) 0 (215,519,833) other securities
Due from subsidiaries and 2,928,844 0 0 0 0 0 2,928,844 affiliates 2018
Other accounts receivable 40,359,781 40,359,781 0 0 0 0 0 Less than 3 months to More Without Book value 1 - 3 months 1 - 5 years than specified Tangible fixed assets 2,972,625 0 0 0 0 0 2,972,625 1 month 1 year 5 years maturity Intangible assets 2,216,341 0 0 0 0 0 2,216,341 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Statutory deposit 27,478,565 672,025 460,160 873,715 2,137,567 23,335,099 0 Liabilities Due to banks and other credit institutions (9,014,314) (1,002,136) (1,965,959) (126,136) 0 0 (5,920,084) Other assets 35,452,920 8,149,548 1,070 14,445 25,716,867 0 1,570,990 Customers' deposits (26,399,333) 0 0 0 0 0 (26,399,333) 309,418,470 171,977,715 25,150,163 25,584,573 46,409,403 29,101,610 11,195,006 Debt securities 0 0 0 0 0 0 Liabilities Loans received from the National Due to banks and other credit 0 0 0 0 0 0 (9,014,314) (5,498,777) 0 (3,515,538) 0 0 0 Development Fund institutions Investment depositors' equity (254,382,253) (19,130,558) (17,127,876) (111,272,948) (847,371) 0 (106,003,501) Customers' deposits (26,399,333) (1,574,134) (1,574,137) (2,988,837) (7,312,308) (12,949,917) 0 (289,795,900) (20,132,694) (19,093,835) (111,399,084) (847,371) 0 (138,322,918) Dividends payable (51,510) 0 0 0 0 0 (51,510) Debt securities 0 0 0 0 0 0 0 Provision for corporation tax 0 0 0 0 0 0 0 60-4-5-4-2- The table below shows the maturity of financial liabilities in foreign currency based on the maturity specified in the contract. Provisions and other liabilities (8,469,046) 0 0 0 0 0 (8,469,046)
Provisions for employees' 2019 termination and pension (691,032) 0 0 0 0 0 (691,032) benefits Less than 3 months to More Without Book value 1 - 3 months 1 - 5 years than specified 1 month 1 year Investment depositors' equity (254,382,253) (5,292,756) (3,127,867) (5,938,960) (14,529,784) (225,492,886) 0 5 years maturity Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Total liabilities (299,007,488) (12,365,667) (4,702,004) (12,443,335) (21,842,092) (238,442,803) (9,211,588) Liabilities and deposits Total shareholders' equity (10,410,982) (10,410,982) Due to banks and other credit institutions (86,484,845) (76,457,541) (8,120,984) (1,906,320) 0 0 0 Total cash outflow from off- Customers' deposits (30,601,783) 0 0 0 0 0 (30,601,783) balance items (23,841,989) (8,344,696) (5,960,497) (3,576,298) (1,192,099) (1,192,099) (3,576,298) Debt securities 0 0 0 0 0 0 0 Total liabilities, shareholders' (333,260,459) (20,710,363) (10,662,501) (16,019,633) (23,034,191) (239,634,902) (23,198,868) Loans received from the National equity and off-line items 0 0 0 0 0 0 0 Development Fund Gap (23,841,989) 151,267,352 14,487,662 9,564,940 23,375,212 (210,533,292) (12,003,861) Investment depositors' equity (21,213,796) (12,005,911) (2,022,571) (6,115,113) 0 0 (1,070,201) Accumulated gap (23,841,989) 151,267,352 165,755,013 175,319,953 198,695,165 (11,838,127) (23,841,989) (138,300,424) (88,463,452) (10,143,555) (8,021,433) 0 0 (31,671,984) Gap to regulatory capital ratio 0 1,545.8 148.0 97.7 238.9 (2.151) (123) (percentage)
Accumulated gap to regulatory 2018 0 1,545.8 1,693.8 1,791.5 2,030.4 (121.0) (243.6) capital ratio (percentage) Less than 3 months to More Without Book value 1 - 3 months 1 - 5 years than specified 1 month 1 year Gap to regulatory capital ratio 5 years maturity based on other contingency 0 1,271.9 121.8 80.4 196.5 (1.770) (101) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) ratios (percentage) Liabilities and deposits Accumulated gap to regulatory Due to banks and other credit institutions (3,094,230) (1,002,136) (1,965,959) (126,136) 0 0 0 capital base for other 0 1,271.9 1,393.7 1,474.2 1,670.7 (99.5) (2.005) Customers' deposits (6,964,362) 0 0 0 0 0 (6,964,362) contingency ratios (percentage) Debt securities 0 0 0 0 0 0 0 Loans received from the National 0 0 0 0 0 0 0 Development Fund Investment depositors' equity (25,376,716) (14,999,767) (2,174,486) (6,468,079) 0 0 (1,734,385) (35,435,308) (16,001,903) (4,140,445) (6,594,215) 0 0 (8,698,747)
164 Annual Report 165 60-4-6- 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 60-5-3- 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. 60-5-4- Analyzing the value-at-risk investment in shares and other market-valued investments: Considering the historical simulation method and percentage of possible changes thereupon in the market 60-5- 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: 60-5-1- Definition of market risk The market risk or the market value at risk (VaR) may be defined as the risk probability of uncertainty in trading 2019 2018 portfolio revenues of a financial institution as a result of changes in market situation such as asset prices, Possible change Effect on profit Possible change Effect on profit Type of investment interest rates, market volatility and market liquidity. The market risk will probably emerge when a financial in market price1 and loss2 in market price and loss institution is actively engaged in trading assets, liabilities and derivative instruments and not when such items Percentage Rls(m) Percentage Rls(m) are held for long-term investments, financing and hedging purposes. Investment in quickly marketable shares (-2.3,4.5) 4,299 (-3.3,3.6) (1096) 60-5-2- Executive units charged with market risk management Investment in units of mutual funds (-1.9,3.1) 1,982 (-1.7,1.9) 278
Saman Bank firmly believes in active management of market risk and with this view in mind, it has devised 1. Possible change in market price has been calculated for a -10day period. a coherent structure to actively manage such risks. In this structure, the board of directors, Senior Risk 2. Effect on profit and loss at market price has been calculated for a -10day period. Committee, Resource Allocation Committee (ALCO), Investment Commission, Investment Affairs Division, International Division and Risk Department will play leading roles. The units and departments which are tasked 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);
166 Annual Report 167 currencies currencies Other foreign
Other foreign
3,154,591 0 (4,605,976,645,564) 0 0 0 0 0 0 0 0 0 0 0 0 0 7,760,568,144,415 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 26.5 0 20.7 45.0 54.7 5,353,729 0 (2,076,844,347,193) 0 0 0 0 0 0 0 0 0 0 0 7,430,573,070,735 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Chinese Yuan 1,123,773 179,660,016 (14,752,454,126,465) (2,358,505,856) (17,927,424) 0 0 (17,927,424) (2,340,578,431) (1,000) 0 0 0 0 (2,340,577,431) 0 15,876,227,527,296 2,538,165,872 17,927,424 0 0 17,927,424 2,520,238,448 24,142,410 0 0 0 0 0 0 677 0 0 2,496,095,360 9.4 0 7.4 Turkish Lira 5.3 6.4 625,228 65,066,942 (2,204,040,152,248) (229,372,479) (193,373,078) 0 0 (193,373,078) (35,999,401) (1,222,132) 0 0 0 0 (29,612,268) (5,165,001) 2,829,268,398,503 294,439,421 193,373,078 0 0 193,373,078 101,066,343 78,720 0 0 0 0 0 0 0 0 0 100,985,008 2,615 Indian Rupee 832,044 1,352,917,092 (86,284,722,175,718) (140,300,361,261) (2,917,156,991) 0 0 (2,917,156,991) (137,383,204,271) 0 (2,628,000) 0 0 0 (4,495,890,625) (132,884,685,646) 87,116,766,187,046 141,653,278,353 2,917,156,991 0 0 2,917,156,991 138,736,121,362 60,013 0 0 0 0 0 0 1,708,200 0 0 138,734,353,149 7.0 0 5.5 Japanese Yen 15.8 19.3 1,884,658 5,290,712,329 (97,002,291,515) (272,310,065) (191,806,819) 0 0 (191,806,819) (80,503,246) (6,057,357) 0 0 0 0 (71,717,705) (2,728,184) 1,981,659,837,191 5,563,022,394 191,806,819 0 0 191,806,819 5,371,215,575 0 0 0 0 0 0 0 22,987,401 0 0 5,348,228,174 0 Japanese Yen 1,591 4,214,140 (1,549,202,574,597) (4,104,065,314) 0 0 0 0 (4,104,065,314) (41,781,522) 0 0 0 0 (3,799,334,010) (262,949,782) 1,550,793,328,296 4,108,279,454 (0) 0 0 (0) 4,108,279,454 0 0 0 0 0 0 0 3,793,084 0 0 4,104,486,370 0.0 0 0.0 Swiss Franc 11.7 14.2 1,391,206 35,196,346 (191,000,404,513) (4,832,150) (3,321,886) 0 0 (3,321,886) (1,510,264) (879,024) (145,967) 0 0 0 (164,682) (320,591) 1,582,206,360,206 40,028,496 3,321,886 0 0 3,321,886 36,706,610 0 0 0 0 0 0 0 0 0 0 36,706,610 0 Swiss Franc 234,169 5,578,371 (103,396,658,261) (2,463,115) (2,082,546) 0 0 (2,082,546) (380,570) (5,004) 0 0 0 0 (54,974) (320,591) 337,565,521,137 8,041,487 2,082,546 0 0 2,082,546 5,958,941 0 0 0 0 0 0 0 0 0 0 5,958,941 2.0 0 1.5 UK Pound 0.1 0.2 14,730 280,591 (45,251,850,154) (861,973) (138,334) 0 (138,334) 0 (723,639) (608,514) (1) 0 0 0 (113,631) (1,493) 59,982,308,073 1,142,564 138,334 0 138,334 0 1,004,230 1,663 0 0 0 0 0 0 0 0 0 927,298 75,269 UK Pound 16,043 287,655 (39,948,292,310) (716,279) (138,334) 0 (138,334) 0 (577,945) (354,018) 0 0 0 0 (222,434) (1,493) 55,991,394,778 1,003,934 138,334 0 138,334 0 865,600 0 0 0 0 0 0 0 0 0 0 814,115 0.1 51,485 0.1 Euro 34.7 42.2 4,128,828 89,273,895 (33,634,716,165,657) (727,252,831) (117,084,404) 0 (34,503,662) (82,580,741) (610,168,427) (411,947,233) (7,670,256) 0 0 0 (95,450,583) (95,100,355) 37,763,544,551,237 816,526,726 117,084,404 0 34,503,662 82,580,741 699,442,322 114,124,808 0 0 0 0 0 0 144,670,935 0 0 433,941,585 6,704,994 Euro 2,346,127 49,228,391 (41,494,450,300,487) (870,671,247) (45,545,063) 0 (16,235,681) (29,309,382) (825,126,184) (330,046,533) (12,622,692) 0 0 0 (189,395,079) (293,061,880) 43,840,576,975,446 919,899,639 45,545,063 0 16,235,681 29,309,382 874,354,576 173,967,935 0 0 0 0 0 0 62,875,509 0 0 618,673,125 19.7 18,838,006 15.4 ) ) US Dollar ) ) 1,187,930 31,518,440 (10.0) (12.1) ( ( (5,111,978,414,767) (135,632,221) 0 0 0 0 (135,632,221) (119,543,615) (4,470,888) 0 0 0 (5,671,694) (5,946,024) 3,924,048,428,881 104,113,782 0 0 0 0 104,113,782 22,944,708 0 0 0 0 0 0 19,274,018 0 0 39,360,045 22,535,010 US Dollar 593,871 14,139,774 ( ( (5,344,056,277,980) (127,239,435) 0 0 0 0 (127,239,435) (104,108,694) (7,358,597) 0 0 0 (7,960,427) (7,811,718) 4,750,185,773,340 113,099,661 0 0 0 0 113,099,661 33,474,150 0 0 0 0 0 0 466,623 0 0 33,905,313 (5) 45,253,576 (3.9)
The position of Bank’s foreign currency at the end year 2017-18 is shown in this table: 60-5-5- 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: Rial equivalent of net open forex position (long/short) each currency as at March 20, 2019- Rls(M) Net open forex position (long/short) of each currency as at March 20, 2019 Rial equivalent of total bank's debts and liabilities in Forex-Rls(M) Total bank's debts and liabilities in Forex Total bank's liabilities in Forex Other bank's liabilities Open position of each currency to regulatory capital base for other contingency ratios at March 20, 2016- (percentage) Bank's obligations for LGs issued Bank's obligations for LCs Open position of each currency to regulatory capital at March 20, 2019- (percentage) Total forex obligations Investment depositors' equity Rial equivalent of net open forex position (long/short) each currency as at March 20, 2019-Rls(M) Provisions and other liabilities Provision for corporation tax Net open forex position (long/short) of each currency as at March 20, 2019 Debt securities Dividends payable Rial equivalent of total bank's debts and liabilities in Forex-Rls(M) Cusomers' deposits Due to banks and other credit institutions Total bank's debts and liabilities in Forex Rial equivalent of total customers' assets and liabilities in Forex-Rls(M) Total customers' assets and liabilities in Forex Total bank's liabilities in Forex Customers' total liabilities in Forex Other customers liabilities Other bank's liabilities Cusomers' liabilities for LGs issued Cusomers' liabilities for LCs Bank's obligations for LGs issued Total forex assets Other assets Bank's obligations for LCs Statutory deposit Intangible assets Total forex obligations Tangible fixed assets Other accounts recievable Investment depositors' equity Due from subsidiaries and affiliates Investment in shares and other securities Provisions and other liabilities Loans granted to and amounts due from non-governmental entities/persons Loans granted to and amounts due from governmental entities Provision for corporation tax Due from the government Due from banks and other credit institutions Debt securities Open position of each currency to regulatory capital base for other contingency ratios at March 20, 2016- (percentage) Cash in hand Open position of each currency to regulatory capital at March 20, 2019- (percentage) Dividends payable Cusomers' deposits Due to banks and other credit institutions Rial equivalent of total customers' assets and liabilities in Forex-Rls(M) Total customers' assets and liabilities in Forex Customers' total liabilities in Forex Other customers liabilities Cusomers' liabilities for LGs issued Cusomers' liabilities for LCs Total forex assets Other assets Statutory deposit Intangible assets Tangible fixed assets Other accounts recievable Due from subsidiaries and affiliates Investment in shares and other securities Loans granted to and amounts due from non-governmental entities/persons Loans granted to and amounts due from governmental entities Due from the government Due from banks and other credit institutions Cash in hand
168 Annual Report 169 60-5-5-1- A summary of the open forex position 60-5-7- Analyzing the gap between the assets and liabilities sensitive to interest rates
2019 2018 2019 Rls(m) Rls(m) Non- Less than 1 1 - 3 3 months to More than 5 sensitive Open long position of all foreign currencies 7,710,249 13,400,473 Book value 1 - 5 years month months 1 year years to interest Open short position of all foreign currencies (595,781) (1,190,023) rate Open forex position 7,114,468 12,210,449 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m)
Open long position of all foreign currencies to regulatory capital (percentage) 51 137 Assets Open long position of all foreign currencies to regulatory capital base for other effective 65 113 148,681,746 14,552,134 129,257,960 0 0 0 4,871,653 contingency ratios (percentage) Cash in hand Open short position of all foreign currencies to regulatory capital (percentage) (4) (12) 1.9% 19.6% 0 0 0 0 0 Open short position of all foreign currencies to regulatory capital base for other effective 9,955,293 2,559,727 0 0 0 0 7,395,567 (5) (10) contingency ratios (percentage) Due from banks and other credit institutions 5.0% 19.6% 0 0 0 0 0
Due from the government 0 0 0 0 0 0 0
Loans granted to and amounts due from 60-5-5-2- Analyzing the effect of foreign exchange rate risk on profit and loss 0 0 0 0 0 0 0 governmental entities Considering the historical simulation method and percentage of possible changes thereupon in the foreign Loans granted to and amounts due from non- 169,473,517 54,824,135 42,602,519 32,610,525 31,792,204 7,644,133 0 exchange rate, the level of value-at-risk for net assets and liabilities in foreign currencies has been governmental entities/persons 13.6% 18.3% 10.6% 13.1% 10.9% 9.8% 0 illustrated in the table below: Investments in shares and other securities 18,292,591 0 0 0 0 0 18,292,591
2019 2018 Due from subsidiaries and affiliates 2,428,333 0 0 0 0 0 2,428,333 Other accounts receivable 48,560,024 0 0 0 0 0 48,560,024 Possible change Effect on profit Possible change Effect on profit Type of currency in market price1 and loss2 in market price and loss Tangible fixed assets 4,551,267 0 0 0 0 0 4,551,267
Percentage Rls(m) Percentage Rls(m) Intangible assets 4,952,329 0 0 0 0 0 4,952,329 US Dollar ( -5.68 , 5.04 ) (55,097) (-0.03 ,0.49 ) (4,471) Statutory deposit 35,798,262 19,602,959 1,031,555 14,953,882 16,778 0 193,088 Euro ( -6.3 , 6.51 ) 122,997 ( -1.77,2.38 ) 4,296 Other assets 38,755,778 0 0 0 0 0 38,755,778 UK Pound ( -4.9 , 6.34 ) 954 (-1.96 , 2.71) 83 Total assets 481,449,140 91,538,955 481,449,140 47,564,407 31,808,982 7,644,133 130,000,630 UAE Dirham ( -6.3 , 6.23 ) 41,082 (-0.07 ,0.48 ) 2,461 Liabilities and deposits Japanese Yen ( -6.5 , 6.23 ) 95 (-2.25 , 2.67) 5,602 (91,897,010) (76,457,541) (8,120,984) (1,906,320) 0 0 (5,412,166) Due to banks and other credit institutions Swiss Franc ( -6.3 , 5.95 ) 13,779 (-1.73 , 2.08) 5,256 3.0% 3.0% 5.4% 2.8% 0 0 0 Canadian Dollar ( -5.32 , 6.56 ) (109) (-1.85 ,2.36) (7) Customers' deposits (65,532,014) 0 0 0 0 0 (65,532,014) Australian Dollar ( -5.75 , 6.23 ) 6 (-2.31 ,2.6) (1) Dividends payable (51,510) 0 0 0 0 0 (51,510) Turkish Lira ( -8.76 , 9.43 ) 3,287 (-3.88 ,3.19 ) (336) Debt securities 0 0 0 0 0 0 0 Indian Rupee ( -5.97 , 5.59 ) 46,978 (-1.1 ,1.33 ) 899 Provision for corporation tax 0 0 0 0 0 0 0 Chinese Yuan ( -6.3 , 6.04 ) 65,441 (-0.8 ,1.36 ) 3,486 Provisions and other liabilities (9,638,369) 0 0 0 0 0 (9,638,369) Omani Rial ( -6.3 , 6.23 ) 12,246 (-0.24 ,0.54 ) 1,011 (298,775,962) (163,608,304) (8,609,462) (124,806,633) (140,033) 0 (1,611,530) Investment depositors' equity South Korean Won ( -5.34 , 5.98 ) 120,072 (-2.05 , 2.24) 10,533 13.3% 9.1% 13.8% 18.8% 16.7% 0 0 371,732 28,812 Total liabilities (465,894,866) (240,065,845) (16,730,446) (126,712,952) (140,033) 0 (82,245,589) Total shareholders' equity (15,554,274) (15,554,274)
1. Possible change in market price has been calculated for a -10day period. Total liabilities and shareholders' equity (481,449,140) (240,065,845) (16,730,446) (126,712,953) (140,033) 0 (97,799,863) 2. Effect on profit and loss at market price has been calculated for a -10day period. Gap (148,526,890) 156,161,588 (79,148,545) 31,668,949 7,644,133 32,200,766
Accumulated gap (148,526,890) 7,634,697 (71,513,848) (39,844,899) (32,200,766) 0
60-5-6- Capital sum required for market risk coverage
Shares risk Forex risk
Total capital Required capital Required capital reserve for Measurement method Value-at-risk Value-at-risk reserve reserve market risk coverage
Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Historical simulation model 212,212 2,013,218 266,054 1,307,086 3,320,304
170 Annual Report 171 2018 60-6- Operational risk
Less than 1 1 - 3 3 months to More than 5 Non-sensitive 60-6-1- Definition of operational risk Book value 1 - 5 years month months 1 year years to interest rate Operational risk is the risk arising from human error, inefficiency of internal processes, system failure and external events. The operational risk does not include reputation risk and legal risk. Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Assets 60-6-2- Executive units of operational risk management 36,749,077 2,701,763 26,522,047 691,861 0 0 6,833,406 Cash in hand Saman Bank has designed and developed a coherent framework in harmony with other departments/divisions 1.4% 18.0% 0 3.9% 0 0 0 of this bank so as to employ the scope of operational risk management in accordance with the CBI’s regulatory Due from banks and other 10,687,731 3,216,057 0 0 0 0 7,471,674 laws and in line with the best prevailing practices in banking industry and accordingly strives to ensure that credit institutions 5.4% 18.0% 0 0 0 0 0 operational risks are consistently and comprehensively identified, evaluated, measured and controlled. The following departments or divisions are involved in this process: Due from the government 0 0 0 0 0 0 0
Loans granted to and amounts due from • Risk Department: This department acts as an executive unit for operational risk with the aim of 0 0 0 0 0 0 0 governmental entities identifying the resources exposed to operational risk and implementing the process of operational risk management at the level of organizational process. More importantly, the process of operational risk 137,136,638 53,317,765 29,774,460 29,252,423 17,961,667 6,830,323 0 Loans granted to and amounts due from management is practiced in a unified approach which includes risk identification, risk assessment, non-governmental entities/persons 15.7% 18.7% 13.2% 15.4% 12.3% 12.3% 0 risk indicators monitoring and further through risk mitigation plans in line with the risk appetite. As Investments in shares and other securities 13,435,948 0 0 0 0 0 13,435,948 it stands, by receiving the periodic and updated reports from other executive departments which are
Due from subsidiaries and affiliates 2,928,844 0 0 0 0 0 2,928,844 acting in this connection, the operational risk in the bank’s key processes is monitored, measured and evaluated. Other accounts receivable 40,359,781 0 0 0 0 0 40,359,781
Tangible fixed assets 2,972,625 0 0 0 0 0 2,972,625 • Quality Improvement Management: This department’s main functions are to design and document the operational procedures, define and develop the kind of relationship with other organizational divisions Intangible assets 2,216,341 0 0 0 0 0 2,216,341 with respect to the operational processes, determine the monitoring indicators for evaluation and Statutory deposit 27,478,565 13,283,219 1,850,166 12,019,789 91,534 0 233,858 control as well as establishing an effective link between regulations and directives with the existing Other assets 35,452,920 0 0 0 0 0 35,452,920 processes. This structure has been devised and developed for standardization of processes and minimization of operational events or occurrences. Total assets 309,418,470 72,518,804 58,146,673 41,964,072 18,053,200 6,830,323 111,905,398 Liabilities and deposits • Inspection Management: This department will perform periodic inspections of operational processes (9,014,314) (1,002,136) (1,965,959) (126,136) 0 0 (5,920,084) at branch levels in accordance with the prevailing directives, procedures and by-laws and then will file Due to banks and other credit institutions reports on the findings of such inspections. The contents of these reports will be used as the base data 0.8% 2.7% 2.2% 2.0% 0 0 0 for analyzing the operational events at branch levels. As such, the operational risk of branches will be Customers' deposits (26,399,333) 0 0 0 0 0 (26,399,333) 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 attitude/ Provision for corporation tax 0 0 0 0 0 0 0 culture at the branch levels towards exercise of preventive controls from occurrence of operational risk damaging events. Provisions and other liabilities (9,160,077) 0 0 0 0 0 (9,160,077)
(254,382,253) (122,969,125) (17,127,876) (111,272,948) (847,371) 0 (2,164,935) The reports on the operational risk will be periodically reviewed by a working group or team that has been Investment depositors' equity 13.9% 9.2% 19.0% 18.6% 21.3% 0 0 formed to remonitor risks and take decisions in respect of the operational risk management. Total liabilities (299,007,488) (123,971,260) (19,093,835) (111,399,083) (847,371) 0 (43,695,939) 60-6-3- Preventive measures from occurrence of intentional and unintentional human errors Total shareholders' equity (10,410,982) (10,410,982) In view of the fact that one of the effective factors which may result in operating losses is typically shaped Total liabilities and shareholders' equity (309,418,470) (123,971,260) (19,093,835) (111,399,083) (847,371) 0 (54,106,921) up by individuals in an organization, Saman Bank has taken a series of actions as listed below to prevent the Gap (51,452,457) 39,052,838 (69,435,011) 17,205,830 6,830,323 57,798,476 occurrence of human intentional and unintentional events by its personnel: Accumulated gap (51,452,457) (12,399,619) (81,834,630) (64,628,800) (57,798,476) 0 • attempt to create culture and a transparent environment in which all employees, divisions and departments will be aware of performing their duties and responsibilities thoroughly with regard to the adverse events of operational risk; • 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.
60-6-4- 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.
60-6-5- Method of assessing operational risk Saman Bank employs the base index approach for inclusion of operational risk in its calculations related to
172 Annual Report 173 capital adequacy ratio as required by the Basel II guidelines. Additionally, Saman Bank is currently striving to 60-7- Capital management 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 60-7-1- Regulatory capital identification and assessment tools are listed below: • Using the risk self-assessment method qualitatively through interaction with directors and operational 2019 2018 divisions of the bank; Rls(m) Rls(m) • Using the findings and collected data in connection with adverse operational risk events in the bank’s Tier 1 capital daily operations resulting from regular inspection and auditing; Capital paid less funds raised out of assets revaluation reserve 7,420,323 5,575,004 • Using the risk key indicators in the important processes so as to conduct a survey of the operational risk Shares premium 0 0 trends. Retained profit (loss) 983,669 106,687 Legal reserve 2,460,818 1,689,324 60-6-6- Mechanisms for controlling and monitoring operational risk Contingency fund/reserve 0 0 Mechanism for controlling operational risk Other reserves 3,528,218 0 Upon assessment of operational risk, the bank will determine which categories of risks it may accept or Total tier 1 capital before regulatory adjustments 14,393,028 7,371,015 control. The control of operational risk shall take place through full cooperation with respective executive Less: regulatory adjustments departments. The key measures taken in this area include identification of the processes bottleneck which is Copst price of treasury stock/shares 0 0 deemed to be a factor for creating operational risk (individuals, systems, processes and external events) and development, review of amended and preventive by-laws related to the occurrence of operational adverse Cost of bank's shares directly purchased by affiliates at IPO and/or at capital increase stage 9 9 incidents. Intangibal asset 550,505 194,026
Mechanism for monitoring operational risk Minimum cost price of mutual investments in shares of credit institutions and/or non-affiliated 87,925 87,925 financial institutionss 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 profile during the course of specified Cost price surplus to 10% of tier-1 capital as to investments in less than 10% in shares of other 0 0 periods. During each period, the amount of resources exposed to operational risk, frequency and severity of credit and financial institutions the effect of risk factors, key risk indicators and further the degree of efficiency and effectiveness of current Cost price surplus to 10% of shares of investee companies as to investments in more than 10% in controls will be reviewed and monitored. 462,324 462,368 shares of other credit and financial institutions 60-6-7- The capital sum required for operational risk coverage Cost price of investments in the affiliates not considered as financial institutions 298,677 149,878 Other adjustments as determined by Central Bank 0 0 The capital sum required for operational risk coverage at Saman Bank will be measured and gauged by using the base index method. The amount of capital exposed to operational risk is listed below: Total regulatory investments 1,399,440 894,206 Tier-1 capital after regulatory adjustments 12,993,588 6,476,809 Measurement method amount of capital exposed to operational risk Tier 2 capital
Rls(m) Debt due to issuance of debt securities by financial institutions and their uses and other liabilities 0 0 Base index method 1,204,900 under applicable rules General provision for doubtful debts up to 1.25% of risk-weighted assets 1,794,479 1,794,479 Adjusted amounts from revaluation of fixed assets, shares and securities 418,048 1,514,689 Total tier-2 capital 2,212,528 3,309,168 Less: Surplus tier-2 capital to tier-1 capital 0 0 Tier-2 capital calculable in regulatory capital 2,212,528 3,309,168 Regulatory capital 15,206,116 9,785,977 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. 11,892,888 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.
174 Annual Report 175
Rls(m) 693,636 2,463 234,307 223,297 399,595 Required capital 6,489 2,474,316 552,993 59,266 0 249,186 2,236 0 516,999 131,567 11,417 0 290,599 0 0 41 53,573 0 0 222,709 53,938 0 5,792,926 1,378,595 361,275 Rls(m) 1,031,700 Required capital 0 0 0 0 2,836,234 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 19,361,730 0 0 858,247 0 95,927 0 631,603 0 196,596 0 2018 2018
that will finally be be finally will that
25 ,
Rls(m) 8,670,446 30,788 2,928,844 2,791,218 4,994,940 Assets and liabilities 81,110 30,928,949 6,912,414 740,826 0 3,114,820 27,946 0 6,462,494 1,644,587 142,715 0 3,632,492 0 0 507 669,657 0 0 2,783,863 674,229 0 72,411,580 17,232,443 4,515,935 Rls(m) 12,896,247 Assets and liabilities 0 0 0 0 35,452,920 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 242,021,627 0 0 10,728,084 0 1,199,084 0 7,895,039 0 2,457,451 0 2018
Rls(m) 648,145 12,171 194,267 253,938 716,247 Required capital 16,521 5,642,636 105,840 423,514 0 658,952 2,236 0 599,326 151,579 30,133 0 290,610 0 0 42 332,231 98 0 704,864 5,248 0 7,164,745 9,537 333,054 Rls(m) 4,960,682 Required capital 0 0 0 0 3,100,462 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 29,238,162 0 0 1,380,797 0 54,286 0 1,063,581 0 382,419 0
Rls(m) 8,101,814 152,141 2,428,333 3,174,231 8,953,091 Assets and liabilities 206,514 70,532,946 1,323,006 5,293,930 0 8,236,903 27,946 0 7,491,577 1,894,737 376,662 0 3,632,625 0 0 523 4,152,889 1,229 0 8,810,804 65,598 0 89,559,315 119,208 4,163,177 Rls(m) 62,008,519 Assets and liabilities 0 0 0 0 38,755,778 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 365,477,022 0 0 17,259,958 0 678,570 0 13,294,765 0 4,780,234 0 of the directive No. 97/31434 April 12
50 100 100 100 100 Percentage 200 150 100 Risk factor 0 400 300 300 50 75 100 150 0 300 0 0 20 50 80 100 100 20 100 200 300 150 Percentage 50 Risk factor 20 100 100 150 100 0 100 20 20 50 50 100 100 150 150 100 100 20 100 50 100 50 100 100 100 100 100 100 150 100 50 * 2019 2019
and then multiplied by the risk factors.
152,141 2,428,333 3,174,231 8,953,091 Rls(m) 35,266,473 882,004 5,293,930 16,203,627 4,459,276 2,059,226 9,315 0 2,526,316 376,662 137,676 Adjusted amount with collaterals and conversion factors 35,798,262 1,210,875 14,983,154 7,807,943 0 2,613 8,305,777 1,536 0 8,810,804 327,988 0 39,736 2,775,451 44,779,658 Rls(m) 0 124,017,039 0 0 0 38,755,778 0 Adjusted amount with collaterals and conversion factors 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 678,570 0 17,259,958 0 4,780,234 13,294,765 0 25 , f collaterals received under article 2018
100 100 100 100 100 100 100 100 Percentage 100 100 100 100 100 100 100 Conversion factor 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 Percentage 100 100 100 100 100 100 100 Conversion factor 100 100 100 100 100 100 100 100 100 100 100 100 0 100 20 100 50 100 20 50 100 100 50 50 100
152,141 2,428,333 3,174,231 8,953,091 Rls(m) 39,883,434 2,041,118 11,115,274 46,282,739 Amount 4,459,276 2,059,226 9,315 0 4,991,094 1,137,719 515,654 35,798,262 1,210,875 49,725,894 7,807,943 0 2,613 8,305,777 1,536 0 8,810,804 327,988 0 39,736 3,329,669 60,858,524 Rls(m) Amount 0 124,017,039 0 0 0 38,755,778 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 4,041,632 0 17,259,958 0 14,387,047 29,150,962 0
of the directive No. 97/31434 April 12 60-7-2- Capital allocation The total bank’s risk weighted assets for the fiscal year ended March 20, 2019 add up to Rls. 365,477,022/- million. The on-line items are first adjusted by the type of collaterals received under article The off-line items are first balanced with on-line on the basis of conversion factors and then adjusted by type o risk-weighted by the relevant factors. Non-gornmental participation bonds Amounts due from subsidiaries and affiliates (current non-facility nature) Other accounts receivable (current) Net fixed assets Principal and interest on non-partnership contracts-over 10 billion rials per person Net non-current receivables (principal, interest and late penalty less the specific prvision)- privison than 20% of non-current balance Net non-current receivables (principal, interest and late penalty less the specific provision)- provision less than 20% to 50% of non-current balance Net non-current receivables (principal, interest and late penalty less the specific provision)- provision 50% and over of non-current balance Cash in hand (fuds plus the amounts transit-Rial and Forex) non-financial institutions) less deduction of accumulated value impairment Cost price of non-commercial investments in other credit and financial institutions (shareholding lower than 10% and less than of tier-1 capital) Cost price of non-commercial investments in other credit and financial institutions (shareholding lower than 10% and higher than of tier-1 capital) up to tier-2 capital Principal and interest on non-partnership contracts-for other facilities up to 1 billion rials per person Principal and interest on non-partnership contracts-from 1 to 5 billion rials per person Principal and interest on non-partnership contracts-from 5 to 10 billion rials per person Statutory deposit place with C.B.I Cost price of non-commercial investments in other credit and financial institutions (shareholding higher than 10%) up to 10% of cost price ordinary shares Principal and interest on non-partnership contracts-for residential properties Due form C.B.I Participated bonds issued or guaranteed by C.B.I 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% Due form banks and other credit institutions with CAR lower than 2% Due form banks and other credit institutions whose financial statements have not been issued or two years has passed from the due date Due from the government (for facilities or securities purchase) Due from governmental organizations and corporations public non-governmental institutions entities( for facilities and securities purchase) Non-commercial investments in companies listed on the stock Exchange less deduction of accumulated value impairment Non-commercial investments in other companies (excluding credit institutions and affiliated to Principal loan for partnership contracts (Mosharakate Madani (civil partnership), Mudarabah, Musaghat, Muzara'ah) with companies listed on the stock Exchange Principal loan for partnership contracts Mosharakate Madani (civil partnership), Mudarabah, Musaghat, Muzara'ah) with other natural and legal persons Other on-line items Amount due for loans: purchase of securities from other governments, central banks and public non- governmental entities in other countries- rated AAA+ to AA- 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- 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 credit financial institutions in other countries- rated BB+ to B- Amount due for loans: purchase of securities from credit financial institutions in other countries-lower than B- Amount due for loans: purchase of securities from credit financial institutions in other countries-unrated Amount due for loans: purchase of securities from other governments, central banks and public non- governmental entities in other countries- rated A+ to A- 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 other governments, central banks and public non- governmental entities in other countries- rated BBB+ to BBB- 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 other governments, central banks and public non- governmental entities in other countries- rated BB+ to B- Amount due for loans: purchase of securities from legal persons inside and outside the country (overseas local)-rated BBB+ to BB- Amount due for loans: purchase of securities from other governments, central banks and public non- governmental entities in other countries- rated lower than B Amount due for loans: purchase of securities from legal persons inside and outside the country (overseas local)-rated lower than BB- Amount due for loans: purchase of securities from other governments, central banks and public non- governmental entities in other countries- unrated 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 multilateral development banks- rated AAA+ to AA- Unconditional revocable obligations Amount due for loans: purchase of securities from multilateral development banks- rated A+ to A- Irrevocable obligations with maturities of one and less than year cash deposit advances 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 Total 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 Obligations for LCs issued or confirmed without good-covered credit less advances Other obligations Amount due for loans: purchase of securities from multilateral development banks- rated lower than B- Obligaitons for LGs issued less cash deposit Obligations for trade agreements guaranteed by various Skuks including participation bonds Amount due for loans: purchase of securities from multilateral development banks- unrated * *
176 Annual Report 177 60-7-2-1- Total market risk-weighted assets for the fiscal year ended March 20, 2019, for the amount of Rls. 60-7-3- Capital adequacy ratio (CAR) 21,020,440 million. The bank capital adequacy for the fiscal year ended March 20, 2019 is 3.79 percent. 2019 2018 2019 2018 Requuired Requuired Amount Risk factor Amount Risk factor capital capital Rls(m) Rls(m)
Rls(m) Percentage Rls(m) Rls(m) Percentage Rls(m) Regulatory capital base for other contingency ratios 11,892,889 11,892,889 Shares 13,007,079 8.00 1,040,566 1,663,290 8.00 133,063 Credit risk-weighted assets 365,477,022 242,021,627 Total cost price of securities-specific risk 385,203 5.00 19,260 3,401,931 5.00 170,097 Market risk-weighted assets 21,020,440 18,123,552 Operational risk- weighted assets 15,061,252 10,704,753 Securities-general risk- time remained up to 0 0 0 10,000 0 0 one-year-maturity and less Total risk- weighted assets 401,558,714 270,849,932
Securities-general risk- time remained Tier-I capital to risk-weighed asset ratio-percentage 3.24 2.39 0 0.2 0 50 0.2 0 from 1 to 3-month maturity Capital adequacy ratio (percentage) 3.79 3.61 Securities-general risk- time remained 0 0.4 0 800 0.4 3 from 3 to 6-month maturity
Securities-general risk- time remained 60-7-4- The capital adequacy ratio will be raised to 4.8 when the bank’s capital increase to Rls. 16,000/- billion 0 0.7 0 55 0.7 0 from 6 to 12-month maturity is materialized with the Central Bank’s approval.
Securities-general risk- time remained 350,443 1.25 4,381 0 1.25 0 60-7-5- Leverage ratio from 1 to 2-year maturity The leverage ratio is the total shareholders’ equity to bank’s assets. The bank’s leverage ratio for the fiscal year Securities-general risk- time remained 34,760 1.75 608 323,026 1.75 5,653 from 2 to 3-year maturity ended March 20, 2019 is 3.2 percent.
Securities-general risk- time remained 0 2.25 0 3,068,000 2.25 69,030 from 3 to 4-year maturity 2019 2018 Securities-general risk- time remained 0 2.75 0 0 2.75 0 Rls(m) Rls(m) from 4 to 5-year maturity Total shareholders’ equity 15,554,274 10,410,982 Securities-general risk- time remained 0 3.25 0 0 3.25 0 from 5 to 7-year maturity Total assets 481,449,140 309,418,470 Leverage ratio (percentage) 3.2 3.4 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 0 6.00 0 0 6.00 0 for over 20-year maturity
Open long position of all currencies with absolute value of open short position of all 7,710,249 8.00 616,820 13,400,473 8.00 1,072,038 currencies whichever is higher
Total capital required for market risk 1,681,635 1,449,884 coverage
Factor (percentage) 12.5 12.5 Market risk-weighted assets 21,020,440 18,123,552
60-7-2-2- Total operational risk-weighted assets for the fiscal year ended March 20, 2019 for the amount of Rls. 12,534,160 million.
2019 2018
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 8,032,668 15.00 1,204,900 5,709,202 15.00 856,380 Factor (percentage) 12.5 12.5 Operational risk-weighted assets 15,061,252 10,704,753
178 Annual Report 179 61- Operating sectors 61-3- 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 61-1- 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. 2019 61-2- 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 148,681,746 0 0 0 148,681,746 Collaborative Interest free International Other banking (by E-banking Total Due from banks and other credit institutions 9,955,293 0 0 0 9,955,293 banking banking activities proxy) 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 governmental entities Incomes earned from outside the bank
Income from loans granted and Loans granted to and amounts due from non- 26,052,122 0 590,415 0 0 26,642,537 169,473,517 0 0 0 169,473,517 placements in other banks governmental entities/persons
Interest expenses on deposits (36,461,701) 0 (389,547) 0 0 (36,851,249) Investments in shares and other securities 18,292,591 0 0 0 18,292,591 Due from subsidiaries and affiliates 2,428,333 0 0 0 2,428,333 Net income from loan interest and (10,409,579) 0 200,868 0 0 (10,208,712) placements in other banks Statutory deposit 35,798,262 0 0 0 35,798,262
Fee and commission incomes 1,073,146 51,887 200,531 1,067,560 0 2,393,124 Tangible fixed assets 4,551,267 0 0 0 4,551,267 Fee and commission expenses (206,410) (1,044) (8,565) (2,270,673) 0 (2,486,692) Intangible assets 4,952,329 0 0 0 4,952,329 Net income from fees and commissions 866,736 50,843 191,966 (1,203,112) 0 (93,568) Other accounts receivable 48,560,024 0 0 0 48,560,024 Net profit (loss) from investments 0 0 0 0 5,664,472 5,664,472 Other assets 38,755,778 0 0 0 38,755,778 Total assets 481,449,140 0 0 0 481,449,140 Net profit (loss) from forex 0 0 6,416,611 0 0 6,416,611 exchanges/transactions Liabilities
Other operating incomes 0 0 0 0 10,711,905 10,711,905 Due to banks and other credit istitutions (91,897,010) 0 0 0 (91,897,010) 0 0 6,416,611 0 16,376,377 22,792,988 Customers' deposits (65,532,014) 0 0 0 (65,532,014)
Net incomes earned from outside Debt securities 0 0 0 0 0 (9,542,843) 50,843 6,809,444 (1,203,112) 16,376,377 12,490,708 the bank Investment depositors' equity (298,775,962) 0 0 0 (298,775,962)
Net incomes from interbank sectors 0 0 0 0 0 0 Dividend payable (51,510) 0 0 0 (51,510)
Total incomes from bank's operating Provision for corporation tax 0 0 0 0 0 (9,542,843) 50,843 6,809,444 (1,203,112) 16,376,377 12,490,708 sectors Reserves and other liabilities (8,692,291) 0 0 0 (8,692,291)
Expenses for doubtful debts of Provisions for employees' termination benefit and (300,000) 0 0 0 0 (300,000) (946,078) 0 0 0 (946,078) operating sector pension funds
Other direct expenses attributable to Total liabilities (465,894,865) 0 0 0 (465,894,865) 0 0 0 0 0 0 operating sector Total operating incomes 1,778,803 0 0 0 1,778,803 Profit (loss) of each sector before Net other incomes and expenses 3,364,489 0 0 0 3,364,489 (9,842,843) 50,843 6,809,444 (1,203,112) 16,376,377 12,190,708 non-attributable general expenses
General expenses non-attributable to (7,047,416) sectors
Profit before tax 5,143,292
• 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.
180 Annual Report 181 2018 Is it liable to Balance Balance Type of article 129 of Total Gross profit (due) (due) Name of relatWed party Type of deal Pricing method Iran Iraq UAE Other Total Relationship Commercial amount (loss) March 20, March 20, Code? 2018 2017 Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Assets Rls(m) Rls(m) Rls(m) Rls(m) Cash in hand 36,749,077 0 0 0 36,749,077 JBM Contracts - 6 items Bank's by-laws and 192,947 0 2,800 Saman (Joint Board internal transactions Due from banks and other credit institutions 10,687,731 0 0 0 10,687,731 Processing Member) LGs issued – 4 items Yes commission 0 0 0 111 (Pardazeshgaran) and Due from government 0 0 0 0 0 Co-Group LGs issued – 1 item 0 0 0
Civil partnership - 7 Loans granted to and amounts due from 0 65,265 0 0 0 0 0 0 items governmental entities LC - 1 item 0 0 0 Bank's by-laws and Loans granted to and amounts due from non- Atieh Andishan Co-Group Yes internal transactions 0 137,136,638 0 0 0 137,136,638 Sepehr Mehr LGs issued – 5 items 0 0 0 governmental entities/persons commission Investments in shares and other securities 13,435,948 0 0 0 13,435,948 Loans - 6 items 0 0 0 Due from subsidiaries and affiliates 2,928,844 0 0 0 2,928,844 LGs issued – 2 items 0 0 0 JBM Contract - Credit Statutory deposit 27,478,565 0 0 0 27,478,565 0 0 0 Hafez Saman (Joint Board reporting software Bank's by-laws and Tangible fixed assets 2,972,625 0 0 0 2,972,625 Iranian Credit Member) Yes internal transactions Contract - debt Scoring and commission 0 0 0 0 Intangible assets 2,216,341 0 0 0 2,216,341 Co-Group collection Other accounts receivable 40,359,781 0 0 0 40,359,781 Subsidiaries loans - 72 items 8,633,945 501,314 0 Other assets 35,452,920 0 0 0 35,452,920 LGs issued – 2 items 0 151,674 0 Total assets 309,418,470 0 0 0 309,418,470 LGs issued – 2 items 0 0 3,710 Bank's by-laws and Saman Co-Group Civil partnership - 201 No internal transactions 63,497 Liabilities Brokerage 0 0 100,266 items commission Due to banks and other credit istitutions (9,014,314) 0 0 0 (9,014,314) Muzarebeh loans - 10 0 0 213,189 Customers' deposits (26,399,333) 0 0 0 (26,399,333) items Debt securities 0 0 0 0 0 Lease contracts - 1 item 0 0 0
Investment depositors' equity (254,382,253) 0 0 0 (254,382,253) Saman Financial Bank's by-laws and and Economic Co-Group Share sales No internal transactions 0 0 1,920,597 1,970,676 Development Dividend payable (51,510) 0 0 0 (51,510) Group commission
Provision for corperation tax 0 0 0 0 0 Bank's by-laws and Saman Exchange Co-Group Lease contracts Yes internal transactions 0 0 0 9,017 Reserves and other liabilities (8,469,046) 0 0 0 (8,469,046) commission Provisions for employees' termination benefit and (691,031) 0 0 0 (691,031) Jealeh contract - 1 item Bank's by-laws and 350,000 319,360 0 pension funds Tondar Noor Co-Group Yes internal transactions 1,448 LGs issued – 1 item commission 0 0 875 Total liabilities (299,007,487) 0 0 0 (299,007,487) Contracts - 6 items 296,021 77,951 2,330 Total operating incomes (2,765,513) 0 0 0 (2,765,513) Civil partnership - 4 Net other incomes and expenses 3,083,879 0 0 0 3,083,879 0 163,190 49,141 items Bank's by-laws and Adonis Co-Group No internal transactions 14,631 Jealeh contract - 2 commission 70,000 70,000 0 items
Civil partnership - 8 340,000 161,381 0 62- Disclosure about related parties transactions items
Civil partnership - 4 Affiliates 1,650,000 1,416,667 0 62-1- Changes in major shareholders (over one percent) items
Civil partnership - 5 0 0 136,021 During the fiscal year ended March 20, 2019, no real or legal person entered the category of shareholders over one items JBM percent by purchasing shares. Further, no natural or legal person exited from the category of shareholders over Saman Kish (Joint Board LGs issued – 8 items Bank's by-laws and 0 1,214,408 0 one percent by selling shares. Electronic Member) Yes internal transactions 39,228 Payment and commission LGs issued – 10 items 0 0 115,563 Co-Group 62-2- Transactions with directors Lease contract 0 0 0
Lease and services This bank has no record of transactions with its directors (the directors here include the managing director/CEO, 358,383 0 0 contracts - 2 items members of board of directors and members of the executive board.) Copper Pension Board Loan - 1 item 0 0 0 62-3- Transactions with related parties during the year are as follows: Fund member Vice- Bahram Fathali 0 175 0 chairman
Farideh Board Geraminejad member Bank's by-laws and Board internal transactions 57 members Board commission Hossein Ghazavi 0 0 0 member
Board Ali Nemati Instalment sale 508 1,066 0 member
Ahmad Mojtahed Chairman 0 0 0
182 Annual Report 183 Is it liable to Balance Balance Type of article 129 of Total Gross profit (due) (due) 63- Accumulated earnings at year-end Name of related party Type of deal Pricing method Relationship Commercial amount (loss) March 20, March 20, Code? 2018 2017 Allocation of the year-end accumulated earnings are subject to the approval of the shareholders’ ordinary general meeting in the following circumstances: Rls(m) Rls(m) Rls(m) Rls(m)
LGs issued – 3 items 0 6,473 0 Amount LGs issued – 1 item 0 0 400 Rls(m) Cleaning Services Bank's by-laws and 0 0 0 Aftab Tejarat Other Contract No internal transactions 0 Legal duties commission Cleaning Services 181,613 0 0 Contract Distribution of at least 10 percent of net profit earned in 2018-2019 under the provision 514,329 Contracts - 5 items 0 0 0 of article 90 of the Commercial Code Amendment Proposal by the board of directors Insurance policies 0 180,266 0 The amount of dividend proposed by the board of directors 0 Civil partnership - 1 Shareholder 180,000 0 0 item Bank's by-laws and Saman Insurance Yes internal transactions 1,686 Insurance policies - commission 0 0 0 2018-19
LGs issued – 23 items 53,200 13,616 64- Performance of Gharzolhassaneh (interest-free) transactions in rial Contracts - 3 items 50,915 24,988,095 20,150,018 64-1- Status of balance of Gharzolhassaneh (interest-free) sources and users Civil partnership - 1 1,000,000 0 0 item Bank's by-laws and Behnad Bana Other No internal transactions 1,973 Sales contracts - real commission 0 1,002,739 5,005,875 Note 2019 2018 Other states - 43 items related Rls(m) Rls(m) parties LGs issued – 3 items 0 158,754 19,200
Lease contract 0 0 0 21,542 Bank's by-laws and Personnel Gharzolhassaneh (interest-free) deposits in rial 20-2 8,956,859 6,399,213 Other No internal transactions Savings Fund Sales contracts - real commission 0 0 12,424,000 13,260,000 state Total Gharzolhassaneh (interest-free) sources 8,956,859 6,399,213 Uses of interest-free savings Civil partnership - 1 350,000 351,652 0 item Bank's by-laws and Kish Cell Pars Other No internal transactions 24,226 Loans granted in rial and amounts due from governmental entities (before provision) commission Sales contracts - real 0 0 36,171 Ordinary loans state
Civil partnership - 12 Loans under note --- to the budget 0 0 3,544,205 1,400,495 items Loans under note --- to the budget 0 0 Jealeh contract - 1 0 0 0 item Total loans granted to and amounts due from governmental entities 0 0 Loans granted in rial and amounts due from non-governmental entities (before provision Retail loans - 3 items Bank's by-laws and 0 0 522,946 Kala Tejarat Other No internal transactions 0 Khalij Fars Ordinary loans (1,022,325) (1,395,628) Jeale contract - Swiss commission 0 0 0 Franc 5 items Staff loans (13)
Civil Partnership - 32 Loans under note --- to the budget 0 0 0 0 0 items Loans under note --- to the budget 0 0 LGs issued – 1 item 0 0 0 Total loans granted to and amounts due from non-governmental entities 11 Total uses of interest-free sources (1,022,325) (1,395,641) Statutory deposit on sources of Gharzolhassaneh (interest-free) deposits (775,988) (624,650) 62-4- Balances of accounts (receivables) of related parties with whom no transactions have been conducted Liquidity reserve on interst-free deposits (5%) (447,843) (319,961) during the year are as follows: Surplus (shortage) of sources to uses of Gharzolhassaneh (interest-free deposits) 6,710,703 4,058,961
Adjustments Type of Received (expenses of Balance (due) at Balance (due) at Name of related party relationship (Paid) doubtful debts March 20, 2019 March 20, 2018 and …) 64-2- Net fees on Gharzolhasaneh (interest- free) transactions Rls(m) Rls(m) Rls(m) Rls(m)
Atieh Andishan Sepehr Mehr Co. Subsidiary 0 0 9,304 9,304 Note 2019 2018 Atieh Andishan Sepehr Shargh Rls(m) Rls(m) Subsidiary (73,975) 0 284,073 210,098 Service Development Co. Fees received from interest-free loans 51,887 60,703 Saman Financial & Electronic Subsidiary 142,723 0 1,860,863 2,003,586 Prizes on interest-free deposits (1,044) (816) Development Group Net fees on interest-free transactions 37-1 50,843 59,887
184 Annual Report 185 64-3- Classification of Gharzolhassaneh (interest- free) loans by a breakdown of the lending purposes
2019 2018 Rls(m) Rls(m) Marriage 871,486 1,221,156 Relief (Emdad) Committee pensioners 116,662 130,846 Ordinary people 34,178 43,626 Staff members 0 13 1,022,326 1,395,641
64-4- Classification of Gharzolhassaneh (interest- free) loans by a breakdown of the type of customer
2019 2018 Rls(m) Rls(m) Real persons 1,022,325 1,395,641 Legal persons - Cooperative society 0 0 Legal persons - Other 0 0 1,022,325 1,395,641
186 Annual Report 2018/19 Annual Report 2018 / 19