2018 Annual Report - sb24.ir 8 Annual Report 9 Saman began its official activity on 2 September 1999 as the first credit institution in post-revolutionary Iran under the name Saman

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Annual Report 2018/19

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Saman Bank in 2018/19

Statement of the Board and the CEO

Key Figures

About Saman Bank

Corporate Governance

Professional Backgrounds of the Senior Executives

Independent Auditors and legal Inspector

Saman Financial Group

The Bank’s Legal Environment

Saman Versus Tehran Stock Exchange

An Overview of Saman’s Operational and Financial Performance

Saman Bank’s Resources and Advances Analyses

Major Achievements of the Bank in Different Areas

Human Capital

Chart of Organization

Major Accolades and Achievements of Saman Bank 2018/19

Plans and Projects for 2019/20

Financial Report

Independent Auditors and Legal Inspectors Reports

Group Consolidated Financial Statements

Saman Bank (PJSC) Financial Statements

Explanatory Notes

Saman Bank in 2018/19

54 Annual Report

By the end of the financial year 2018/19, Saman celebrated its 20th year of proud business in the Iranian economy. These 20 years were filled with invaluable experiences and countless achievements and innovations toward facilitating a new style of banking in our beloved Iran.

As the first privately owned financial-credit institute in the Country, Saman has introduced diverse concepts in banking and economy since its inception. By introducing advanced technologies and electronic payment facilities, Saman successfully added smart solutions to people’s businesses and their banking experience.

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 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 year.

2018/19, A Turning Point for Saman 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 the Central Bank of Iran, we turned the challenges caused by the re-imposition of sanctions and the US withdrawal of the JCPOA into opportunities for growth. This was made possible because of the existing infrastructures and capabilities.

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.

Profitability in International Banking and Retail Banking One of our main programs in Saman 2021 has been to continue the optimisation and simplification of internal 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.

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.

InvestmentsAnother 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 PlanningAll 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 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.

Capital IncreaseHigher exchange rates meant a considerable number of our customers active in production and business sectors faced huge difficulties in securing cash reserve and revolving cash. If the bank failed to support them in this difficult time, they would likely leave the bank or enter into stagnation. In order to adapt to these new conditions and accommodate our customer’s needs, we started a capital increase journey. During 2018/19, we adopted 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.

Supporting ProductionWe adopted our support programs to encourage production under two strategic approaches. First, we increased 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 and consumption chains in food and pharmaceutical industries, which are the two focal industries of Saman’s business banking.

On the other hand, by designing new credit products, for the staff members of these producing companies, we are taking serious steps towards the preserving and incising their motivations and we hope these entities with less worries in their human recourses affairs, they would have more concentrations on production.

First Choice in International BankingUnder 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 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 application for opening our branch in Germany, and we hope to open this branch in the near future.

Statement of the Board and the CEO

76 Annual Report

Risk ManagementOne 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 StandardsSaman 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.

One Saman, One TeamThe 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 involvement, trust, and support helped make our 21st year a turning point in the history of Saman.

Board of Directors

(Adjusted)

2018/19 2017/18 2016/17

Consolidated Bank Consolidated Bank Consolidated Bank

Key performance indicators during the year

IRR billion

Net revenue from lending and deposits

(10,171) (10,209) (14,183) (14,243) (7,667) (7,694)

Net revenue from fees and charges

(39) (94) (248) (311) (318) (514)

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

Key Figures

98 Annual Report

Saman began its official activity on 2 September 1999 as the first credit institution in post-revolutionary Iran under the name Saman Eghtesad. Saman Eghtesad was registered with the Corporate and Non-commercial Entities Registrar under number 154444, with an initial capital of IRR 11 billion.

In September 2002, Saman Eghtesad had accumulated sufficient capital to obtain a banking license from the Central Bank of the Islamic Republic of Iran. This opportunity allowed the institution to enter a new phase of life as a privately-owned bank.

Scope of ActivitiesThe bank’s scope of activities is detailed in Article 3 of the Memorandum of Association. A summary of these activities is as follows:

• Opening and maintaining different types of bank accounts, including current and savings accounts;

• Accepting term deposits and issuing deposit certificates;

• Providing loan and finance products within the framework of rules and regulations and the standards of non-usurious banking laws;

• Operating in currency markets domestically and internationally;

• Administering all types of credit instruments;

• Issuing L/C and different types of checks;

• 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.

CapitalAt 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:

Shareholder StructureThe list of Saman shareholders at the end of the financial year 2018/19 is presented in the following table:

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


14/10/2004 36.4 300 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 20/3/2019

Number of Shares Percentage

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 Investment Development Company 719,999,995 9.00

Vali Zarrabieh 196,660,057 2.46

Seyed Mehdi Ghafouri 181,316,669 2.27

Ahmadreza Zarrabieh 123,349,619 1.54

Pumpiran Holding 147,330,232 1.84

Iran va Gharb Company (Private Joint-Stock) 88,975,787 1.11

Others (less than %1)

Other corporate shareholders (63 shareholders) 1,063,932,852 13.30

Other individual shareholders (1.923 shareholder) 3,871,152,471 48.39

8,000,000,000 100

Individual and corporate share ratio:

20/3/2019 20/3/2018

Number of Shareholders

Number of Shares

PercentageNumber of Shareholders

Number of Shares

Percentage

Individual 8280 4,891,956,208 61 4246 4,791,009,505 60

Corporate 71 3,108,043,792 39 71 3,208,990,495 40

8351 8,000,000,000 100 4317 8,000,000,000 100

About Saman Bank

Individual61%

Corporate39%

1110 Annual Report

Board of DirectorsCorporate Governance

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 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 Board of the Iranian Credit Bureau and Credit Scoring Company. He was elected Chairman of Saman Bank’s Board of Directors in September 2012, serving as the Vice Chairman since March 2014, and is currently serving as the Chairman. With a PhD in Economics from Iowa State University, USA, Dr. Mojtahed also maintains a successful academic career as a researcher and professor at Allameh Tabatabaei University.

Bahram Fathali, Vice Chairman

A former VP Investment, board member, and advisor of Keshavarzi Bank, Mr. Fathali served as board member in Parsian and Eghtesad Novin banks before joining Saman on 12 January 2019. He serves as a member of the Risk Committee, member of the Human Resources Committee, and Head of the Audit Committee in Saman. Mr. Fathali holds a master’s degree in Accounting from the UK.

Farideh Geraminejad, Member

Before joining the board, Ms. Geraminejad served as Saman’s International Banking Director. She worked at Tejarat Bank from 1977 to 2009 where her latest position was the Head of Treasury and Correspondent Relations. Ms. Geraminejad holds a bachelor’s degree in General Linguistics from the University of Tehran.

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.

Ali Ne’mati, Member

Mr. Ne’mati has worked with Saman since 22 August 2012 in different positions, including Advisor to the CEO, Member of the Audit Committee, and Member of Wholesale Credit Committee. He has a record of membership in several committees and assemblies of Post Bank Iran. Mr. Ne’mati holds a master’s degree in State Management from the Institute for Management and Planning Studies.

Reza Isfandyari, Second Alternate Member

Mr. Isfandyari joined Saman on 11 May 2012 and has served as Executive VP Legal, Advisor to the CEO, Member of Compliance and Financial Crimes Committee, and Member of Compliance Committee for Saman Financial Group. He holds a master’s degree in private law.

Vali Zarrabieh, First Alternate Member

Mr. Zarrabieh, a board member of Saman Electronic Payment Company and Saman Brokerage Company, served as the first Deputy CEO of Saman Bank and was appointed CEO in June 2010. In 2013, he was elected Chairman of the Board and currently serves as the First Alternate Member of the Board. Mr. Zarrabieh holds a master’s degree in finance from the CASS Business School of London, specializing in corporate finance and valuation, as well as an MBA from Manchester Business School, UK, specializing in strategy.

1110 Annual Report

1312 Annual Report

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

1514 Annual Report

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

Mr. Dehghanizadeh was appointed VP International in December 2018. He has worked in numerous managerial positions at Saman, including Director of International Banking, Deputy Director of Treasury Services, and Head of Currency Exchange Department. He is also responsible for supervising the International Banking Division.

Khodarahm Ghasemian Yadegari: VP Supervision

Mr. Ghasemian Yadegari was appointed VP Supervision in August 2018.

Compliance Committee of Saman Financial Group

Members of the Committee:CEO, Deputy CEO, VP Legal, VP Financial and Planning, VP Banking and Marketing, VP Control, VP Compliance and AML, Risk Unit Director, Corporate Banking Director, SME Credit Director, Legal Director

Objectives of the Committee:To support strategic goals of Saman Financial Group by advising and leading financial crime control and prevention initiatives, to supervise risks affiliated with identified non-compliance cases in anti-money-laundering, terrorism financing, sanctions, fraud, bribery, and corruption

Secretary of the Committee: 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

1716 Annual Report

Division Heads

Independent AuditThe 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.

Full Name Position Highest Academic Qualification Year Joined Saman Bank

Davoud SouriBankingDean of Saman Academy PhD 2014

Hamid Tahamtan Legal Executive Master's degree 2013

Siamak Shahbazzadeh Khiavi Compliance and AML Executive Master's degree 2003

Abbas Mirza Nayyeri Electronic Banking Executive Bachelor's degree 2007

Seyed Morteza HosseininejadMarketing and Product Development

Executive Master's degree 2003

Reza Shirin GoharianMicrocredit and SME Lending


Farnood HassaniPublic Relations and Customer Care


Marzieh Azizi Quality and Development Executive Bachelor's degree 2003

Fereshteh Zarrabieh Human Resources Director Director Master's degree 2003

Mohammad Hassan Dowlati Logistics Executive Master's degree 2003

Hamidreza Alavizadeh Nouri IT Executive Master's degree 2013

Mohammad Farrokhipour Retail Banking Executive Bachelor's degree 2002

Morovat Ranjbar Corporate Banking Executive Bachelor's degree 2004

Ghassem Sarkhosh Supervision and Accounting Executive Master's degree 1999

Saman Financial Group

Capital Percentage of Bank's Ownership (direct or

indirect)

Net Profit (Loss)in 2018/19

Net Profit (Loss)in 2017/18

IRR billion Percentage IRR billion IRR billion

Saman Exchange Co. 219 96.46 260 293

Hafez Saman Iranian Credit Scoring Co.

24 94.00 11 19

Saman processing Co. 250 100 17 31

Saman Brokerage Co. 50 75 75 8

Tondar Noor Co. 2.7 74 64 0.2

Saman Financial & Economic Development Group Co.

0.0 100 33 1.5

Atieh Andishan Sepeher Mehr Co. 23 100 1 3

Atieh Andishan Sepeher Shargh Service Development Co.

20 98 186 5

Adonis Co. 400 20.32 28 23

Kish Cell Pars Co. 1200 32 (257) (77)

1918 Annual Report

Our VisionSaman’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 ValuesSaman 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.

2120 Annual Report

The Bank’s Legal EnvironmentThe following laws and regulations are the most important rules governing Saman’s activities:

• Commercial Code 1932 and its subsequent amendments;

• The Monetary and Banking Act of Iran ratified in 1972 and its subsequent amendments;

• The Banking Regulations Act and its annex passed in 1979;

• The Law banning Bank Borrowers from leaving the Country passed in 1980;

• The Law for Usury (Interest) Free Banking ratified in 1983;

• The Law annexing two notes to Article 15 of the Law for Usury (Interest) Free Banking as amended in 1997;

• The Law permitting the Establishment of Privately-Owned Banks passed in 2000;

• E-Commerce Law passed on 25 January 2004;

• The Cheques Act passed in 2003 and the revised Cheques Act passed in 2018;

• The Law pertaining to Non-Regulated Money Markets passed in 2004;

• Negotiable Instruments Market Law passed on 22 November 2005;

• The Anti-Money-Laundering Act passed in 2007, revised and recirculated in 2018;

• 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;

• By-laws and guidelines circulated by the Securities and Exchange Organisation;

• Supervision packages and policies of the CBI, which act as guidelines for the bank’s operations and other legal activities during the year under reference;

• General policies adopted under Article 44 of the Constitution;

• Monetary and Banking Act;

• Law requiring issuance of national identification number and postal code to all citizens;

• Approvals by the Money and Credit Council;

• Saman’s Articles of Association;

• Supervision packages and policies and international regulations of the CBI, which act as guidelines for the bank’s operations and other legal activities during the year under reference.

Saman’s position in the Securities and Exchange OrganisationAccording to notification number 900-851 dated 16 November 2011 by Iran Fara Bourse, Saman was listed in the Banks and Credit Institutions group as the 49th stock symbol (29th company in the first market) and was assigned the stock symbol ‘ZeSaman’. On 7 June 2013, Saman Bank’s listing was transferred to the main market of the Iran Stock Exchange as per IFB’s letter no. 91/03/3035.

2322 Annual Report

20/03/2019

IRR billion PercentagePercentage Increase (decrease) compared with previous year

Assets

Cash 148,682 30.88 304.59

Due from banks and other credit institutions 9,955 2.07 (6.85)

Loans and advances to customers 169,474 35.20 23.58

Investment in stocks and securities 18,293 3.80 36.15

Due from subsidiaries and affiliates 2,428 0.50 (17.09)

Other accounts receivable 48,560 10.09 20.32

Tangible fixed assets 4,551 0.95 53.11

Intangible assets 4,952 1.03 123.45

Legal deposit 35,798 7.44 30.28

Other assets 38,756 8.05 9.32

Total Assets 481,449 100.00 55.60

Liabilities

Due to banks and other credit institutions 91,897 19.09 919.46

Customer deposits 65,532 13.61 148.23

Dividends payable 52 0.01 0.00

Other debts and provisions 8,692 1.81 2.64

Provision for staff end of service benefits 946 0.20 36.91

Total liabilities before investment accounts equity 167,119 34.71 274.49

Investment accounts equity

Termed investment account equity 297,164 61.72 17.82

Interest payable to termed investment accounts 1,612 0.33 (25.56)

Investment accounts equity 298,776 62.06 17.45

Total liabilities 465,895 96.77 55.81

Shareholders' equity

Share capital 8,000 1.66 0.00

Capital increase under process 0 0.00 0.00

legal reserve 2,461 0.51 45.67

Other reserves 3,528 0.73 0.00

Assets revaluation surplus 582 0.12 (5.43)

Retained earnings 984 0.20 822.01

Total equity 15,554 3.23 49.40

Total liabilities and equity 481,449 100.00 55.60

20/03/2018 20/03/2017

IRR billion PercentagePercentage Increase (decrease) compared with previous year

IRR billion

36,749 11.88 16.68 31,495

10,688 3.45 10.46 9,676

137,137 44.32 7.35 127,750

13,436 4.34 383.69 2,778

2,929 0.95 4.49 2,803

40,360 13.04 69.13 23,863

2,973 0.96 (17.73) 3,613

2,216 0.72 (48.47) 4,301

27,479 8.88 19.29 23,036

35,453 11.46 23.44 28,720

309,418 100.00 19.91 258,035

9,014 2.91 (7.62) 9,758

26,399 8.53 54.72 17,063

52 0.02 (1.85) 52

8,469 2.74 85.45 4,567

691 0.22 28.61 537

44,625 14.42 39.55 31,978

252,217 81.51 18.45 212,927

2,165 0.70 12.40 1,926

254,382 82.21 18.40 214,853

299,007 82.91 21.14 246,831

8,000 2.59 0.00 8,000

0.00 0.00 0.00 0.00

1,689 0.55 9.94 1,537

0 0.00 0.0 0

615 0.20 (59.20) 1,507

107 0.03 (33.48) 160

10,411 3.36 (7.08) 11,204

309,418 100.00 19.91 258,035

An Overview of Saman’s Group Consolidated Operational and Financial Performances

Consolidated Balance Sheet Items

2524 Annual Report

Profit & loss Statement

2018/19

IRR billion Percentage Percentage Increase (decrease) compared with previous year

Revenues

Interest income 26,643 51.41 36.07

Fees and commissions income 2,392 4.62 45.80

Net investment profit (loss) 5,664 10.93 (27.74)

Net foreign currency transactions profit (loss) 6,417 12.38 62.46

Other incomes 10,712 20.67 7.60

Total income 51,828 100 20.63

Expenses

Interest paid on deposits (36,851) 78.94 8.95

Fees and commissions expenses (2,486) 5.32 27.35

General and administrative expenses (6,506) 13.94 26.40

Doubtful debts expenses (300) 0.64 (75.00)

Financial expenses 0 0.00 0.00

Depreciation (542) 1.16 3.29

Total expenses (46,684) 100 9.47

Profit (loss) before tax 5,143 1,515.53

Income tax

Net profit (loss) 5,143

2017/18 2016/17

IRR billion Percentage Percentage Increase (decrease) compared with previous year

IRR billion

19,580 46 (19.27) 24,254

1,641 3.82 23.43 1,329

7,839 18.24 55.70 5,034

3,950 9.19 185.27 1,385

9,955 23.17 60.40 6,207

42,964 100 12.45 38,209

(33,822) 79.31 5.87 (31,948)

(1,952) 4.58 5.90 (1,843)

(5,147) 12.07 43.52 (3,586)

(1,200) 2.81 300.00 (300)

0 0.00 (100.00) (2)

(525) 1.23 17.83 (445)

(42,646) 100 11.86 (38,124)

318 276.00 85

318 85

2726 Annual Report

2018/19 2017/18

Percentage Percentage

Capital adequacy ratio 3.78 3.61

Lending to deposits ratio 46.73 49.22

Lending to total assets ratio 35.20 44.32

Total expenditure to total revenue ratio 90.08 99.26

Return on Assets ratio 1.07 0.10

Return on Equity ratio 64.3 3.98

Total deposits to total assets ratio 75.33 90.05

Loan interest to total revenues ratio 51.41 45.57

Devidend to total expenditures ratio 78.94 79.31

Deubtful debts expense to total expenditures ratio 1 1 2.81

2018/19 2017/18

IRR billion IRR billion

Deposit per branch ratio 2,667 2,049

Lending per branch ratio 1,246 1,008

Net profit per branch ratio 38 2

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

Key Performance IndicatorsKey performance indicators for the years 2018/19 and 2017/18 are shown in the following table:

The Saman Resource and Expense Analysis

DepositsKey performance indicators for attracting deposits (in Iranian and foreign currencies) are as follows:

2018/19 2017/18

Amount Percentage from Total Amount Percentage from Total


Demand deposits-IRR 21,734 5.99 11,745 4.22

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

Foreign currency deposits 51,801 14.28 32,324 11.60

Other deposits-IRR 4,240 1.17 1,291 0.46

362,696 100 278,617 100

2018/19 2017/18

Amount Percentage from Total Amount Percentage from Total


Interest-bearing deposits 297,164 81.93 252,217 90.52

Non-interest-bearing deposits 65,532 18.07 26,399 9.48

362,696 100 278,617 100

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 with previous year

30.18 21.14 7.50 17.46 13.22

2018/19 2017/18 2016/17 2015/16 2014/15


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 total deposits

1.79 1.69 1.81 2.01 2.22

| Interest-Bearing versus Non-Interest-Bearing Deposits |

| Comparative Table of Deposits |

| Deposits |

| Saman Bank Deposits compared with the Iranian Banking System's Total Deposits |

362,696

278,617

229,989 213,944

182,144

2017/182018/19 2015/162016/17 2014/15

2928 Annual Report

Loans and AdvancesKey Performance Indicators for Loans and Advances

Interest paid to investment depositsInterest paid to investment deposits during financial years 2018/19 and 2017/18 are as follows:

Revenue from lending Revenues earned from loans granted in financial years 2018/19 and 2017/18 are as follows:

2018/19 2017/18

AmountPercentage from Total

AmountPercentage from Total


Equity Hire Purchase Loans 12,223 7.2 9,264 6.8

Joalah (Contract of reward) advances 41,054 24.2 22,456 16.4

Ijara (Equity lease purchase) loans 2,360 1.4 2,307 1.7

Qard al-hasanah (Interest free) loans 1,022 0.6 1,396 1.0

Mudarabah (Capital trust financing ) loans 9,275 5.5 9,898 7.2

Mosharakat Madani (Working Capital Partnership Venture) 80,594 47.6 75,420 55.0

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

Letters of guarantee issued 590 0.3 640 0.5

Others 7,119 4.2 470 0.3

169,474 100 137,137 100

2018/19 2017/18 2016/17 2015/16 2014/15


Total Loans & Advances 169,474 137,137 127,750 126,988 118,112

Percentage of change compared to previous year

23.58 7.35 0.60 7.52 14.57

2018/19 2017/18 2016/17 2015/16 2014/15


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 total Banking System

1.16 1.09 1.29 1.60 1.75

2018/19 2017/18

AmountPercentageof Total



Short-term investment deposists 9,274 25.17 10,418 30.80

Long-term deposits 27,170 73.73 22,936 67.81

Termed deposits of banks and other credit instituions 17 0.05 26 0.08

Foreign currency deposits 390 1.06 443 1.31

36,851 100 33,822 100

Percentage of increase compared to previous year 9

2018/19 2017/18




Equity Hire Purchase Loans 1,835 7.50 1,184 6.50

Joalah (Contract of reward) advances 6,302 25.76 2,144 11.76

Ijara (Equity lease purchase) loans 71 0.29 69 0.38

Mudarabah (Capital trust financing) loans 1,082 4.42 991 5.44

Mosharakat Madani (Working Capital Partnership Venture) 12,213 49.92 12,417 68.14

Debt Instruments purchase 1,172 4.79 776 4.26

Delay Penalties 353 1.44 460 2.52

Foreign currency loans 552 2.26 62 0.34

Others 884 3.61 121 0.66

24,464 100 18,224 100

Percentage of growth compared to last years 34

| Comparative Table for Loans & Advances (IRR billion) |

| Loans |

| Saman Bank Loans & Advances compared with the Iranian Banking System's Total Loans (IRR billion) |

169,474

137,137127,750 126,988

118,112

2017/182018/19 2015/162016/17 2014/15

3130 Annual Report

Risk AnalysisRisk management is the process of identifying, assessing, and controlling potential risks related to the nature of banking activities. The purpose of risk management is to ensure reasonably the fulfilment of objectives based on the bank’s approved strategies. While striving to attain these risk objectives, the department measures risk indexes and tolerance levels and define the risk appetite as a major element in corporate governance and the bank’s strategy.

The key activities of ensuring effective risk management are as follows:

Risk High Committee Meetings

The Risk High Committee is a strategic body that reports to the Board of Directors. The outcomes of its findings are presented to the board in the form of supervisory and advice reports. The Risk Committee was established to comply with the internal control structure required by the Central Bank of Iran and to ensure appropriate and sufficient managerial policies and procedures are implemented to monitor and control various risks 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 reputation, as well as on attaining optimal capital adequacy ratio.

The most important measures undertaken by the Risk High Committee during 2018/19 include the following:

• Study of reports received on risk management and identifying areas that can be improved;

• Study of risk-control-related guidelines, plans, and proposals.

In order to execute these initiatives, the Risk High Committee met regularly during the year. The outcomes are summarised below:

• 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;

• 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;

• Identifying, determining, and updating evaluation indicators for different types of risks (market, operational, liquidity, and credit);

• Providing analytical reports on operational risks including operational risks in resource allocation procedures and human resources management as well as risk analysis in view of systems and automation in international and credit operations;

• Providing analytical reports on market risk including international open positions depending on the type of the currency, international gap reports and value at risk analysis of the bank’s portfolio in foreign currencies;

• Calculating the capital required to cover credit, market, and operational risks and preparing necessary reports;

• Analysing credit concentration risks based on factors such as economic sector, geographical location, maturity, market type, and type of lending agreement in order to verify compliance with credit limits set internally and by the CBI;

• Preparing a contingency funding plan based on the CBI’s guidelines in regard to liquidity risk management and stress testing;

• 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, and other types of risks;

• Forecasting liquidity surplus/shortfall on major currencies at different time intervals and reporting on the international liquidity gap;

• Disclosing risk-management information based on the requirements of the CBI and IFRS-compatible financial statements template.

Major Achievements of the Bank in Different Areas

3332 Annual Report

2018/19 2017/18 2016/17 2015/16 2014/15

Number 225,459 214,514 203,311 201,027 195,308

Percentage change compared to previous year 5.10 5.51 1.14 2.93 22.48

Number of transactions 843,977,588 646,693,996 530,843,484 410,221,293 270,783,397


2018/19 2017/18 2016/17 2015/16 2014/15

Number 1538 1459 1458 1303 1224


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

Electronic Banking• Installing 75 Cash Recycling Systems;

• 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

Person Person Person Person Person

Net Bank 1,070,983 936,829 859,337 780,333 683,845

Samanak 779,187 682,485 559,461 453,379 344,496

Telephone Bank 891,188 880,934 863,763 836,264 789,270

Mobilet 148,812 0 0 0 0

2,890,170 2,500,248 2,282,561 2,069,976 1,817,611


| 5-year Comparative Table of POS Numbers |

| 5-year Comparative Table of ATM Numbers |

| Number of ATMs |

| Number of Debit and Credit Cards |

| 5-year Comparative Table of Debit and Credit Card Numbers |

| 5-year Comparative Table of Virtual Banking Customer Numbers |

| Number of Virtual Banking Customers |

| Number of POSs |

225,459

214,514

203,311 201,027

195,308

2017/182018/19 2015/162016/17 2014/15

15381459 1458

1303 1224

2017/182018/19 2015/162016/17 2014/15

1,456,064 1,293,431 1,384,438

1,742,387 2,010,187

2017/182018/19 2015/162016/17 2014/15

2,890,170

2,500,248 2,282,561

2,069,976 1,817,611

2017/182018/19 2015/162016/17 2014/15

3534 Annual Report

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 Customer's resources 74,452 76,745

Private Customer's resources 38,904 44,284

Total resources 113,356 121,029

2018, March/April 2019, February/March

Premium Customers 8,335 8,683

Private Customers 482 566

Total Number 8,817 9,249

3736 Annual Report

Retail Banking• Optimised branch network structure by closing down two kiosks and relocating five branches;

• Profitability of the Services Centres considerably increased compared to the previous year;

• Operated Saman 2021 Sale Model in all branches, which resulted in increased sale potential through training and product dialogues;

• Installed electronic equipment, like Cash Recycle Machines, in the branches enabling the staff members to concentrate on sales;

• 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:

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 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 medium-sized enterprises introduced by the Business Development Committee were admitted and processed as instructed by the Central Bank.

In order to reduce credit risk and increase control of the lending procedure, the bank launched the Sole Trader Lending System and developed the Consumer Lending System with the help of Saman Processing Company and the Quality Improvement Unit. This personal loan system is being piloted in selected branches and will become operational in all branches in August 2020. A similar system for SME (legal entity) lending will be designed subsequently.

Target OperationTarget Achieved

(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

3938 Annual Report

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.

L/C import Import Doc.Bills Guarantee lettersMoney orders

importMoney orders

export

2018/19 US$ million 289.36 1,088.44 26.88 7,521.34 9,710.52

18,637.94

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:

4140 Annual Report

Investments and Assemblies Affairs Unit

Projects carried out in 2018/19

A) Online Operations of Investment Funds

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:

| Daily fee for safekeeping, Iranian Rials (per coin) |

| Authentication fee, Iranian Rials (per coin) |

10,000

7,500

5,000

2,500

0

700

600

500

400

300

200

100

0

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;

• Rating banks for interbank-lending purposes;

• Feasibility Studies on different plans such as increasing coin storage capacity, publishing bonds, etc.;

• Survey reports on the evaluation of shares of selected companies.

10/2/2018

10/2/2018 13/11/2018

27/8/2018 5/11/2018 7/01/2019

4342 Annual Report

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.

4544 Annual Report

Internal Audit and ControlBy 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 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.

PhD Master's

Degree Bachelor's

Degree

Associate Diploma &

LowerSubtotal Total

GrandTotal

2018/19

Head Office

Female 1 124 128 13 266826

2491Male 6 194 209 151 560

BranchesFemale 1 190 337 10 538

1665Male 1 266 759 101 1127

9 774 1433 275 2491

2017/18

Head Office

Female 0 114 123 11 248785

2419Male 7 171 199 160 537


1634Male 1 232 763 111 1107

9 689 1427 294 2419

2016/17

Head Office

Female 0 109 130 13 252784

2406Male 5 152 200 175 532


1622Male 1 202 772 113 1088

7 613 1473 313 2406

Human Capital

The banks human capital structure over the past three years is presented in the following table:

4746 Annual Report

The bank’s human capital structural position over the past three years is presented in the following table:

Training and Development The key training courses offered and the numbers of participants during 2018/19 were as follows:

Major accomplishments of the Human Capital Directorate in 2018/19

• Design and implementation of Bank’s performance management dashboard;

• Implementation of and acquiring certificate of ISO 9001:2015 in human capital management;

• Implementation of the first phase of talent management;

• Periodic health surveys for all personnel of the bank;

• Obtained discount facilities for the colleagues, form the merchants using SEP points of sales;

• Organising Saman Cup internal futsal competitions;

• Charitable support for colleagues;

• Signing contracts with different hotels throughout the country to get discounted accommodation rates for personnel;

• Translation and publication of Retail Banking book I;

• Designing and Implementing hands-on training courses in international banking and credit;

• 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;

2018/19 2017/18 2016/17

Members of the Board of Directors 5 4 4

Senior Advisors and Inspectors 31 27 23

Senior and Executive Directors 24 25 27

Deputy Executive Directors 12 10 11

Division Heads 39 32 25

Deputy Division Heads 19 26 22

Unit Managers 91 92 95

Experts 479 379 408

Regional Managers 9 9 10

Branch Managers 140 146 143

Branch Deputy Managers 185 143 146

Banking Clerks 1172 1171 1101

Administration Staff 289 322 354

Total Personnel and Members of the Board of Directors 2495 2422 2410

Type of the Course Number of Participants 2018/19 Man-hours 2018/19

Specialized non-banking courses 2923 54259

Specialized banking courses 1100 25318

Behavioural courses 762 7956

Virtual behavioural courses 0 0

General courses 3083 41463

General English courses 234 7208

Virtual training courses 0 0

8102 136204

• Localising specialised banking training courses;

• Preparing and launching a branch-grading system;

• Visiting more than 80 branches and Service Centres in Tehran and 13 other cities and preparing survey reports on their weak paints;

• Documenting the organisational culture with regard to the needs of the organisation and colleagues (five documents have already been produced);

• Changing the work assessment approach and determining the number of staff needed in each branch based on Saman 2021 Plan;

• Coordinating the organisational structure of various head office units in light of the bank’s long-term strategy and environmental changes;

• Entering into contracts with other recruitment interviewers;

• Recruitment, employment, and appointment of required workforce in accordance with the Plan of Saman 2021 Plan;

• The actions taken in connection with personnel files and records;

• Updating, amending, and adapting existing positions based on the new organisational structure;

• Reviewing procedures in executive manuals towards the enhancement of staff satisfaction;

• Creating the procedure for evaluating the recruitment process of new staff;

• Arranged for of leave and business trip applications, expenses claim forms, and some lifestyle services, to be presented on line.

Some of Human Capital Directorate’s plans for 2019/20

• Implementation of SAP software;

• Collaboration in the implementation of Saman 2021 Plan;

• Implementation of the talent management project;

• Identification of key positions;

• To make Payment of Bourse System targeted, based on Key Performance Indicators (KPI);

• Compiling organisational culture documentations in accordance with organization and the colleagues requirements of the business and workforce;

• Publishing Retail Banking book II;

• Naturalization and digitization of the Retail Banking I training courses;

• Launching Educators’ Club;

• Compiling the English language training courses tailored to the job descriptions, of different organisational units;

• Producing electronic texts for specialised banking courses;

• Equipment of Area Directors Offices for training courses;

• Launching the Excellence Training Award/feasibility study for Participation in the Excellence in Training and the Human Capital Development Award;

• Organising RBA-III course in collaboration with the Retail Banking Academy, London;

• Offering etiquette and socialising skills courses, to be attended in person, for all the staff in Tehran;

• Launching an online Training system;

• Launching a Social Network concentrated Training course;

• Implementation of DMS software.

4948 Annual Report

Social Responsibilities• Financial assistance to earthquake victims in Kermanshah Province;

• Cooperation with UNICEF Iran office;

• Donations to different charities;

• Paying surgical and medical costs of 33 children from low-income families through the Chain of Hope (La Chaîne de L’Espoir) charity;

• Supplying Fadak Charity with five computers and five desks;

• Construction of Accidents and Emergency Centre in Sarpol Zahab city, Kermanshah Province;

• Distribution of Saman Financial Group’s presents among the students in underprivileged regions of Chahbahar City;

• Construction of an educational complex in Yazd.

Future Projects in Social Responsibility

In 2019/20, Saman will continue to cooperate with the aforementioned charities. The next year’s budget for the aforementioned charities has been approved and allocated.

5150 Annual Report

Major Accolades and Achievements of Saman Bank and Saman Financial Group in 2018/19• Received the highest number of public votes in the fifth round of "My favourite Bank in Iron "festival;

• 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;

• Saman Bank has been awarded with the Management of Customer Complaint Handling Process, as per ISO 1002:2018 Certificate;

• 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 mountaineer’s ascent to Mount Damavand;

• Launched Saman Bank Shareholder’s Portal;

• Iranian Association of Internal Auditors, at their Annual Congress in 2018 awarded Internal Audit and Control Unit of Saman Bank with: 1st. National Internal Audit Award. The Silver Award is the highest level of honour awarded to the participant banks;

• 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 enhancement and elevating of the level of Financial and Economic Management of the Group, in 2018;

• Sponsored the art of 800 years old " Daraii” weaving, a traditional technique for dyeing and weaving, called "Ikat" used to pattern textiles, in Yazd, Iran;

• Saman Financial Group was appreciated by the Kish Free Zone Governor at the closing ceremony of 21st Kish Island Summer Festival.

• A full appreciation of Saman Bank at the National Gathering for glorification of those selected entities who accept social responsibilities;

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5554 Annual Report

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 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, 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 financial statements of the above companies have not been delivered to us in full hence determining the effects of the above mentioned on items of consolidated financial statements is not possible.

9- According to civil partnership contract with Messrs. Mahmoud Esmailzadeh Marvian and Reza Kamrani in the prior years, in order to establish karaj city center project (Alborz Mall), in addition to transferring two pieces of land for place of project, Six different loan facilities were granted which together with the related interest, fees and payments, the amount of Rls. 6,757 Billions are shown under the heading of facilities granted. Since the counter 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 the present conditions and not delivery of some information to this firm, determining the effect of recognizing & reflection of value of these confiscated properties, is not possible for this firm.

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 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 years, an amount of Rls. 2,810 were received from customers, which have been reflected in Note 22 of the financial statements as debts to banks and credit institutions. Additionally, according to the Central Bank’s correspondence, an amount of Rls. 5,956 Billions were claimed as penalty for overnight withdrawals, for which no entry has been made in the accounts. Considering that no replies was received to our request for confirmation from the Central Bank of Iran (CBI), no information on the possible effects resulting from settlement of the mentioned accounts, including interest & other charges on inter-bank accounts, on the Bank’s financial statements under review nor comparative year is available.

11- As explained in Note 8-9-1 of the financial statements, the bank’s foreign currency Accounts as at Balance sheet date are translated using the central bank’s rate (Rls. 75000 per USD) and consequently an amount of Rls. 3,334 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 in settlement of Account balance. Hence there are necessary adjustments required to be done. In absence of some information, specifically foreign currency Assets, the effects of above mentioned adjustments on financial statements items, in particular regarding reflection of FX translation difference in the related heading is not possible to determine.

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 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 items on financial statements is not possible for this firm.

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 other companies (Tosseh Saramayeh Gozari Saman Group companies and Tosseh Mali Va Eghtesadie Saman Group) taken place in recent years. Since the receivables related to prior year’s sales which have not been received in accordance with the relevant payment terms and no documentations were provided to this firm regarding settlement of the obligations by these persons, who were somehow among related parties of the Bank, based on the contractual payment terms, no opinion can be expressed on their possible effects on the financial statements of the year under review nor the comparatives relating to prior years.

Qualified opinion

14- In our opinion, except for the effects of the items stated in Clauses 4 to 11 above and subject to possible effects of items mentioned in Clauses 12 & 13, the financial position of Saman Group & the Bank (Public joint stock company) as at March 19, 2019 and their financial performance and cash flows for the fiscal year then ended are true and fair, according to the accounting standards, from all material aspects.

Emphasis of matters

(Our opinion has not been qualified as a result of items 15 to 18 below).

15- As explained under Note 10-3-1 to the financial statements, although actions have been taken regarding collection of receivables from Bank Pasargad and Saderat for the amounts of Rls. 2,641 Billions and Rls. 858 Billions respectively, there has been no concrete results.

To Annual Ordinary General Meeting of Shareholders

Saman Bank (Public Joint Stock Company)

Report on the Financial Statements

Introduction

1- We have audited the consolidated financial statements of Saman Group & Bank (Public Joint Stock Company), including the balance sheets as at March 20, 2019 and statement of investment deposit performance, statements of profit or loss, statements of comprehensive income, statements of changes in shareholders’ equity as well as the cash flow statements for the fiscal year then ended together with the explanatory notes 1 to 66 hereto attached.

Responsibility of the board of directors for financial statements

2- The board of directors of the Bank shall be responsible for preparing the financial statements according to accounting standards. Such responsibility includes design, implementation and maintenance of internal controls for setting up these statements in such a manner to ensure that there is no significant misstatement due to fraud or error.

Responsibility of auditor and legal inspector

3- Our responsibility is to express an opinion on these financial statements based on our conducted audit in accordance with auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depends on the auditor’s judgment, including the assessment of the risks of material misstatement of financial statements, whether due to fraud or error. In making those risk assessments, internal control relevant to the company’s preparation of the financial statements in order 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 appropriateness of accounting policies used and reasonableness of accounting estimates made by directors, as well as evaluating the presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to express a qualified opinion on the financial statements.

Our responsibility, as the legal inspector, is to report on non-compliance with legal requirements as per the 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.

Basis of qualified opinion

4- The situation of given financial facilities and dues from persons and the method of calculation of interest and 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.

In this regards, in addition to the fact that the requirements of the manual on “Asset Classification in Credit Institutions and Calculation of Provisions for Doubtful Debts approved by Money and Credit Council” and related circulars on classification of receivables are not fully complied with, the overdue facilities have mainly been without any funds received and hence dealt with by rescheduling or renewing and reflected as current facilities and related interests shown in the accounts. Therefore, considering the control weaknesses in the system of calculating provisions for doubtful debts, including the revaluation of collateralized assets at different points in time, it has not 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, respectively, in Notes 12-2-1 and 36-3 to the financial statements. Since the practice used by the Bank for reclassification and valuation of shares are not based on accounting standards, and considering the ownership percentage, applying the equity method of accounting would be necessary. The required adjustments would decrease the accumulated profit and the investments in the consolidated balance sheet by the amount of Rls. 1,432 Billions.

6- Based on Note 26 to the financial statements, and since corporate income tax for the years 1387 to 1394 have been finalized, tax differences for these years, amounting to Rls. 1,017 Billions, should have been dealt with as the prior year adjustments. And, on the other hand, tax paid in advance of Rls. 702 Billions under the heading of ‘other assets’ should be written off, tax payable of Rls. 315 Billions is to be reflected under the heading of ‘provision for corporate income tax’. Additionally, considering the assessed tax for the year 1396 and the tax authority’s investigation, it seems necessary to make extra tax provision of Rls. 402 Billions as a minimum.

5756 Annual Report

• Clause 1 of Article 7 regarding timely issue of audited annual financial statements of the Bank and the group consolidated accounts.

• Clause 2 of Article 7 on submission of Board of Directors’ Report & Auditor’s Report on it within maximum 4 months from the year end of the Bank.

• Article 10 in relation to submission of minutes for ordinary & extraordinary meetings within maximum of 10 days, to Companies Registrar and its disclosure within one week after notice of registration.

• Clause 3 of Article 7 regarding submission of unaudited interim financial statements for 3-, 6- and 9-month periods within maximum 30 days from end of 3-month periods.

• Clause 4 of Article 7 regarding submission of 6-monthly audited financial statements within maximum 75 days of the end of the 6-monthly financial period.

• Clause 5 of Article 7 regarding submission of unaudited financial statements within 60 days after financial year end.

• Clause 10 of Article 7 regarding submission of annul audited financial statements of controlled companies at least 10 days before bank’s annual ordinary general meeting & submission of interim audited financial statements of the mentioned companies within maximum 60 days after end of 6 monthly duration.

• Article 9 regarding immediate disclosure of decisions made in general meetings.

• Article 43 regarding appointing a managing director by the board maximum within 1 month of being without a managing director.

Provisions of notification No. 021/440/B/96 dated 24th Tir 1396 requiring presentation of financial statements based on IFRS within maximum 6 months from publications of audited financial statements.

27- Internal controls related to the financial reporting of the Bank as at 29 Esfand 1397 were assessed according to the requirements of the Securities & Exchange Organization. Based on this assessment and considering the inherent limitations in internal controls, this firm has not observed any material weaknesses in internal controls related to financial reporting, according to the second chapter of internal control instructions approved by SEO, with the exception of failure of the audit committee to perform its tasks in accordance with the approved framework, failure to set up the software for some parts of the banking operations, such as letters of credit, and failure of the established mechanized system to report important elements of the banking operations, e.g., loan collaterals.

28- Regarding non-compliance with the Act of Removing the Obstacles of Competitive Production and Promoting 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, hence, it has not been possible to carry out compliance checks for Clauses “A” & “B” of Article 16.

• Provisions of Article 21 of the executive bylaw regarding opening of a special account if requested by the receiver of the loan facilities.

• Provisions of Article 47 regarding agricultural loan facilities to the extent determined by the Central Bank of Iran (CBI).

29- In execution of Article 33 of ‘Executive Directive on Anti-Money Laundering for Auditors’, we have evaluated the Bank’s compliance with the provisions of the mentioned law and other related circulars and executive directives as per the required check-lists and auditing standards. In this respect, with the exception of ‘risk-based classification of customers’ and ‘certain cases of non-compliance by subsidiaries’, no material cases of non-conformity with the above laws and regulations has been detected.

16- As per the tax claim notice, subject of Clauses (B) & (P) of Article 17 of the Act of Removing the Obstacles of Competitive Production (Note 26-2-1 to the financial statements), an amount of Rls. 3,768 Billions is claimed by the tax office for year 1396, but the company has appealed against it, and the case is currently being reviewed by the board of settlement of tax disputes. Also, for the year 1397, the Bank has not presented the information required by the mentioned Act.

17- As explained in Note 21-2-3 to the financial statements, the collateralized assets do not appear to have been adequately insured. The inventory is not adequately insured neither (Note 17-1 to the financial statements).

18- The information about significant risks in the banking industry and explanation of the Bank’s status in terms 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 calculation of such risks.

Report on other legal responsibilities

Report on other responsibilities of the legal inspector

19- The cases of non-compliance with some of the monetary and banking laws and regulations together with related circulars over the banking operations and mandatory bylaws for the banking system for the period under review by our firm have been submitted to the Central Bank of Iran (CBI) under a separate letter by this firm.

20- As explained in Note 60-7-3 to the financial statements, capital adequacy ratio is lower than the required value by the CBI (8%), and the ratio will be even lower by considering the content of this report.

21- Cases of non-compliance with the legal requirements provided under the Amendment of the Commercial Code of Iran and articles of association of the Bank are as follows:

Article in the Amended

Commercial Code

Clause in the Articles ofAssociation

Selecting the managing director, extent of authority, duration & his remuneration 124 18

Payment of dividends within 4 months from approval date (prior years’ profits) - 111

Holding annual general meeting within the period stipulated in the articles of association 89 & 138 31

Compliance with ownership ceiling of the Bank’s shares - 7

Compliance with capital adequacy ratio - 115 & 116

Also, we draw the shareholders’ attention to the effects of clauses 4 to 11 of this report on distributable dividends.

22- Transactions mentioned under Note 62-3 to financial statements, including all the transactions subject of Article 129 of the Amendment of the Commercial Code of Iran performed during the fiscal year, reported to us by the 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 in voting. Considering the special circumstances of the related party transactions, our firm believes that such transactions should be brought to the annual general meeting of shareholders for proper decisions.

23- We have examined the report of the board about activities and general situation of the Bank, provided under Article 232 of the Amendment of the Commercial Code of Iran, to be presented to the general meeting of shareholders. In view of such examination, we can confirm that there is no significant case of inconsistency between the information therein and the documents provided by the board.

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.

Report on other legal and regulatory responsibilities of auditor

25- The annual membership fees for deposits guarantee fund, in line with the provisions for calculation and receipt 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:

Azmoon Pardaz Iran Mashhood Audit Firm(IACPAs)

Farzad Shadadfard M.H. Saadatian Farivar (800447) (800385)

Date: 6th July 2019

5958 Annual Report

(restated)

Liabilities and shareholders' equity Note March 20, 2019 March 20, 2018

Rls(m) Rls(m)

Liabilities

Due to banks and other credit istitutions 22 92,278,307 9,215,208

Customers' deposits 23 66,203,469 26,455,203

Dividends payable 24 124,833 26,316

Trade accounts payable 0 0

Advances received 25 88,192 58,508

Debt securities 0 0

Provision for corporation tax 26 201,766 147,135

Provisions and other liabilities 27 13,698,716 10,062,738

Provisions for employees' termination and pension benefits 28 997,770 724,836

Total liabilities before investment depositors' equity 173,593,053 46,689,944

Investment depositors' equity 29 297,042,957 253,176,148

Total liabilities 470,636,010 299,866,092


Share capital 30 8,000,000 8,000,000

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 liabilities and shareholders' equity 484,427,401 308,386,176

Bank's 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

Bank's other obligations 55-3 46,410,920 28,847,484

Managed funds and similar items 55-4 473,099 1,246,146

(restated)

Note March 20, 2019 March 20, 2018

Rls(m) Rls(m)

Assets

Cash 9 150,969,609 36,593,485

Due from banks and other credit institutions 10 10,338,939 10,683,747

Due from the government 0 0

Loans granted to and amounts due from governmental entities 0 0

Loans granted to and amounts due from non-governmental entities 11 169,077,815 136,641,385

Investments in shares and other securities 12 17,631,037 13,022,437

Long-term investments in affiliates 13 254,495 297,664

Due from subsidiaries and affiliates 14 628,332 458,720

Other accounts recievable 15 50,439,492 41,592,890

Orders and prepayments 16 50,183 63,828

Inventory (materials and goods) 17 398,227 255,810

Tangible fixed assets 18 5,405,118 3,668,807

Intangible assets 19 4,928,883 2,181,127

Statutory deposits 20 35,798,262 27,478,565

Other assets 21 38,507,009 35,447,711

Total assets 484,427,401 308,386,176

Customers' obligations for LCs 55-1 4,041,632 7,719,819

Customers' obligations for LGs issued 55-2 14,387,047 9,870,529

Customers' other obligations 55-3 46,410,920 28,847,484



Consolidated Balance sheet For the fiscal year ended March 20, 2019

The accompanying explanatory notes are an integral part of these financial statements. The accompanying explanatory notes are an integral part of these financial statements.

6160 Annual Report

2018

- 2

019

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(restated)

Note 2019 2018

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)

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)

Net income from fees and commissions (39,449) (247,651)

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

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

Total operating incomes 2,552,951 (2,492,075)

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)

Financial expenses 50 (2,234) (8,301)

Deprecciation/amortization expenses 51 (537,770) (543,474)

Profit before calculating group share from incomes earned by affiliates 5,501,827 242,514

Group share from incomes earned by affiliates 13 (43,169) (19,197)

Profit (loss) before income tax 5,458,658 223,317

Income tax of the year 26 (140,588) (101,805)

Income tax of previous years 0 0

Total income tax (140,588) (101,805)

Net profit (loss) 5,318,070 121,512

Minority interest from net profit 39,705 35,393

Earnings per share (EPS) (Rls) 57

Basic earnings per share (Rls) 660 11

Diluted earnings per share (Rls). 660 11

Note Year ended

March 20, 2019 Year ended

March 20, 2018

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)

Consolidated statement of profit & Loss For the fiscal year ended March 20, 2019

Co

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Consolidated Comprehensive statement of profit & Loss For the fiscal year

ended March 20, 2019

The accompanying explanatory notes are an integral part of these financial statements.

6362 Annual Report

(restated)

Operating activities 2019 2018

Rls(m) Rls(m)

Cash received forInterest and late payment penalty on loans granted 4,906,413 1,585,530 Interest on debt securities 131,918 31,304 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 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) Financial expenses (6,687,785) (5,492,918) Income tax (89,564) (118,825)

Net cash (outflow) inflow from operating activities before changes in operating assets and liabilities (23,589,171) (26,474,308)

Cash flows from changes in operating assets and liabilitiesNet increase (decrease) in liabilitiesDue to banks and other credit institutions 82,882,696 (743,280) Customers' deposits 41,105,349 9,137,191 Debt securities 0 0 Operating portion of provisions and other liabilities 3,497,898 5,185,685 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) 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) 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 Net cash inflow (outflow) from operating activities 116,808,769 1,207,531 Investing activitiesFunds paid for acquisition of tangible fixed assets (2,475,256) (858,851) Proceeds received from sale of tangible fixed assets 295,799 706,312 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 (5,045,429) 1,120,476 Net cash outflow before financing activities 111,763,340 2,328,007 Financing activitiesCash from capital increase 169,990 0 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

Consolidated statement of cash flows For the fiscal year ended March 20, 2019


2017

- 2

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6564 Annual Report

(restated)

Liabilities and shareholders' equity Note March 20, 2019 March 20, 2018

Rls(m) Rls(m)

Liabilities

Due to banks and other credit istitutions 22 91,897,010 9,014,314

Customers' deposits 23 65,532,014 26,399,333

Dividends payable 24 51,510 51,510

Debt securities 0 0

Provision for corporation tax 26 0 0

Provisions and other liabilities 27 8,692,291 8,469,046

Provisions for employees' termination and pension benefits 28 946,079 691,032

Total liabilities before investment depositors' equity 167,118,904 44,625,235

Investment depositors' equity 29 298,775,962 254,382,253

Total liabilities 465,894,866 299,007,488


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

Bank's 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

Bank's other obligations 55-3 46,410,920 28,847,484


(restated)

Note March 20, 2019 March 20, 2018

Rls(m) Rls(m)

Assets

Cash 9 148,681,746 36,749,077

Due from banks and other credit institutions 10 9,955,293 10,687,731

Due from government 0 0

Loans granted to and amounts due from governmental entities 0 0

Loans granted to and amounts due from non-governmental entities 11 169,473,517 137,136,638

Investments in shares and other securities 12 18,292,591 13,435,948

Due from subsidiaries and affiliates 14 2,428,333 2,928,844

Other accounts receivable 15 48,560,024 40,359,781

Tangible fixed assets 18 4,551,267 2,972,625

Intangible assets 19 4,952,329 2,216,341

Statutory deposit 20 35,798,262 27,478,565

Other assets 21 38,755,778 35,452,920

Total assets 481,449,140 309,418,470

Customers' obligations for LCs 55-1 4,041,632 7,719,819

Customers' obligations for LGs issued 55-2 14,387,047 9,870,529

Customers' other obligations 55-3 46,410,920 28,847,484



Balance sheet of the Parent Company or the fiscal year ended March 20, 2019

6766 Annual Report

Note Year ended

March 20, 2019 Year ended March

20, 2018

Rls(m) Rls(m)

Net profit (loss) 5,143,292 318,366

Assets revaluation reserve 33 0 (892,177)

Difference in exchange rates for foreign transactions 0 0

Comprehensive income for fiscal year 5,143,292 (573,811)

Prior years' adjustments 52 (920,303) (220,303)

Comprehensive income recognized from the reporting date of previous fiscal year 4,222,989 (794,114)

Statement of the investment deposits performance of parent company For the

fiscal year ended March 20, 2019

Comprehensive statement of profit & Loss of the parent company For the fiscal

year ended March 20, 2019

Statement of profit & Loss of the parent company For the fiscal year ended

March 20, 2019

Note 2019 2018

Rls(m) Rls(m)

Profit sharing incomes

Income from loans granted 35 23,500,796 17,902,175

Income from placements in other banks and debt securities 35-2 1,831,414 1,073,527


Total profit-sharing incomes 30,996,682 26,814,283

Bank's share from profit-sharing incomes 37-1 0 0

Depositors' share from profit-sharing incomes before fees reduction 30,996,682 26,814,283

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 surplusto profit-sharing uses

39 9,944,442 10,028,495

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)

(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 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.

6968 Annual Report

Sta

tem

en

t o

f c

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ity f

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at M

arch

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0 0

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9 0

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8 0

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0 11

,205

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Net

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7170 Annual Report

1-4- Employment status

The number of bank’s employees (headcount) during the fiscal year was as follows:

2019 2018

Year end Average Year end Average

Branches in Tehran province 83 83 83 83

Branches in other provinces 51 51 51 51

Branches in free zones 2 2 2 2

Overseas branches 0 0 0 0

136 136 136 136

Group Parent Company

2019 2018 2019 2018

Year end Year end Year end Average Year end Average

Central headquarters and district head offices 1,602 1,595 826 801 785 783

Branches in Tehran Province 1,052 1,025 1,052 1,039 1,025 1,014

Branches in other provinces 585 577 580 580 577 575

Branches in free zones 32 32 33 32 32 32

Overseas branches 0 0 0 0

3,271 3,229 2,491 2,452 2,419 2,404

• Average means, the monthly average of the reporting period.

• Average means, the monthly average of the reporting period.

(restated)

Operating activities 2019 2018

Rls(m) Rls(m)

Cash received forInterest and late payment penalty on loans granted 4,906,413 1,585,530

Interest on debt securities 131,918 31,304

Fees and commissions 2,392,080 1,640,633

Interest on placements in other banks 1,875,012 1,324,689

Profit from investments 5,664,472 7,838,581

Other operating incomes 3,673,854 1,535,073

Other incomes 3,245,453 380,997

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 0 0

Financial expenses (6,687,785) (6,192,918)

Income tax 0 (4,460)

Net cash outflow from operating activities before changes in operating assets and liabilities (24,135,480) (27,634,914)

Cash flows from changes in operating assets and liabilitiesNet increase (decrease) in liabilitiesDue to banks and other credit institutions 82,882,696 (743,280)

Customers' deposits 39,132,681 9,336,821

Debt securities 0 0

Operating portion of provisions and other liabilities 223,245 3,902,189

Investment depositors' equity 44,393,709 39,529,204

Net (increase) decrease in assets 0 0

Due from banks and other cerdit institutions 732,438 (1,011,701)

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) 7,251,920

Investment in shares and other securities (4,856,643) (10,658,155)

Due from subsidiaries and affiliates 500,510 (125,909)

Other accounts receivable (8,200,243) (16,496,345)

Statutory deposit (8,010,677) (4,442,881)

Operating portion of other assets 4,163,594 2,625,214

Cash flows from changes in operating assets and liabilities 138,181,873 29,167,077

Net cash inflow (outflow) from operating activities 114,046,393 1,532,163

Investing activitiesFunds paid for acquisition of tangible fixed assets (2,290,229) (670,897)

Proceeds received from sale of tangible fixed assets 295,799 704,742

Funds paid for acquisition of non-operating real estates (2,911,365) (465,660)

Proceeds received from sale of non-operating real-estates 49,313 1,740,325

Funds paid for acquisition of intangible assets 0 0

Proceeds received from sale of intangible assets 0 0

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 activitiesCash from capital increase 0 0

Treasury shares transactions 0 0

Funds from shares premium 0 0

Financial facilities received 0 (973)

Repayment of principal financial facilities 8,495,000 7,500,000

Repayment of principal financial facilities (8,495,000) (7,500,000)

Dividends paid 0 0

Net cash inflow (outflow) from financing activities 0 (973)

Net cash increase (decrease) 109,189,911 2,839,700

Cash at the beginning of the year 36,749,078 31,494,714

Effects of changes in forex exchange rates 2,742,757 2,414,664

Cash at year end 148,681,746 36,749,077

Non-cash transactions 10,827,967 18,374,645

Statement of cash flows for the parent company For the fiscal year ended

March 20, 2019


Explanatory notes to the financial statements For the fiscal year ended March 20, 2019

1- Introduction of the Bank

1-1- Background

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 registered with Tehran Department of Companies and Non-Commercial Entities Registration under No. 154444 on September 1, 2009 and was listed with Tehran Stock Exchange/Iran Farabourse on November 16, 2011. Thus, the Bank has been put on the official list of prices which prevail on Tehran Stock Exchange/Iran Farabourse since June 6, 2012. The Bank is headquartered in Tehran, of No. 1543, Tarkeshdouz St., Parkway Intersection, Vali-asr Ave., Tehran, Iran. The Bank’s Economic Code is 4111-1166-8595.

1-2- Bank’s main activities

The Bank has been licensed with the main objectives of performing authorized banking operations and activities (operations and transactions which are not prohibited for banks under the prevalent rules) under article 3 of the Articles of Association/Constitution and in accordance with the regulation No. 92/377538 of March 13, 2014 as approved by the Central Bank of I. R. of Iran. By extension, the bank’s main activities include: open various accounts such as savings accounts, free-interest deposit accounts, short-term or long-term investment deposit accounts; issue various banking credit cards or other authorized cards and other similar accounts; receive facilities and credit lines; grant loans in the form of applicable contracts and agreements; make fund transfers; conduct all transactions or foreign exchange transfers/money orders; open letters of credit and carry out all related affairs; issue banking letters of guarantee and certificates of deposit; trade (buy and sell) participation bonds and other securities; conduct all operations related to purchase and sale of shares; safe custody services; carry out transactions in gold and silver; act as a broker or agent for participation bonds and for interbank operations and other credit institutions; provide insurance coverage for banking affairs; cash management for customers; open branches and expand the banking network inside and outside the country; and overall to conduct and carry out all operations and activities in line with the objectives set and defined for the bank in the context of the prevalent rules and regulations..

1-3- Number of Branches

The number of branches during the year is listed below:

7372 Annual Report

8- Summary of significant accounting policies

8-1- Investments

8-1-1- Method of valuation

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 investments are valuated at net sales value of each item of investment.

8-1-2- Method of income recognition

The incomes earned from investments in subsidiary and affiliated companies are recognized at the time of approving dividends by the investee company shareholders’ general meeting (until the approval date of financial statements) and the incomes earned from other long-term and current investments are recognized at the time of approving dividends by the investee company’s shareholders’ general meeting (until the balance sheet date).

8-2- Tangible Fixed Assets

8-2-1- Except for land and buildings, the tangible fixed assets are recorded in accounts on the basis of cost. The expenditures incurred for renovation and major repairs that will substantially increase the capacity or the useful life of fixed assets or will fundamentally improve the output quality are regarded as capital expenditures and will be depreciated/amortized over the remaining useful life of related assets. The expenditures incurred for minor repairs and maintenance out of the assets initial valuated performance standards for the purpose of protection or recovery of the expected economic benefits of commercial unit are regarded as current expenses at the time of occurrence and recorded in the profit and loss account of the given period.

8-2-2- Depreciations of tangible fixed assets are calculated and recorded in accounts under the provisions of the Depreciation Rules under article 151 of Direct Taxation Law and on the basis of the following rates and methods:

Type of asset Depreciation rate Depreciation method

Buildings and installations 6 & 25% Straight line

Furniture, fixtures, computer hardware and devices 3, 5 & 10 years Straight line

Motor vehicles 6 years Straight line

POS terminals 5 years Straight line

ATM machines 5 years Straight line

Technical equipment, satellite and hub 3 & 5 years Straight line

Costs for branch improvement and refurbishments 3 years Straight line

Tools 6 years Straight line

2- Basis of preparing financial statementsThe existing financial statements have been prepared on the basis of accounting standards and in accordance with applicable rules and regulations of the Central Bank of of Iran(CBI). The details of accounting standards including the changes made during the year have been defined in notes 5 and 6.

3- Basis of consolidation3-1- The bank consolidated financial statements aggregate the assets and liabilities of the bank and of the

subsidiaries qualifying for consolidation upon elimination of inter-group transactions and balances as well as the unrealized profit and loss from intergroup transactions.

3-2- As to the acquisition of subsidiaries during the given period, the results of their operations are consolidated as of the date they are effectively controlled by the bank. As regards the subsidiaries transferred to the bank, the results of their operations are consolidated until the date of their possession.

3-3- The bank shares acquired by the subsidiaries are recorded at cost price in their accounts. Such shares are entered in accounts and reflected in the consolidated balance sheet as a declining element of the shareholders’ equity and reflected in the financial statements under the heading of “parent company’s shares held by subsidiaries”.

3-4- The fiscal year of subsidiaries ends on December 21 of each year and their operations are consolidated in the same manner. Nonetheless, in the case any event occurs up to the reporting date of the bank’s financial statements which might substantially affect the consolidated financial statements in their entirety, the effects thereto will be reflected in accounts by making the required adjustments in the items of the financial statements of subsidiaries.

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. The adjustments so required have been made in the financial statements.

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 statements.

4- Operating and reporting currency unitThe items in the financial statements have been measured by using Rial as the currency unit in the main economic environment where Saman Bank has been operating. Such items have been presented in Iranian million rials (shortened to Rls. M.) for better understanding and comprehension unless otherwise expressly stated in financial statements and/or in the relevant explanatory notes.

5- Using judgment and estimatesIn 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 actual results may vary from such estimates. However, the estimates and assumptions are based on historical records and the management board will continuously review them by comparing with actual events.

5-1- In preparing the bank financial statements, no particular judgment and estimate have been used.

6- Basis for measurementExcept for the material cases, the financial statements have been prepared on the basis of the historical cost price. However, for certain fixed assets including land, buildings thereon, and goodwill, the basis of revaluation method adopted by independent experts or appraisers has been applied.

7- Change in accounting proceduresThe 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.

8-2-3- For the fixed assets acquired and used during the month, depreciation will be calculated at the time of purchase and recorded in accounts. When each item of depreciable assets, upon availability for operation is not utilized for some time on the grounds of work stoppage or shut-down, the rate of depreciation for such period will be equivalent to 30% of the rate which has been reflected in the above-mentioned table.

8-3- Intangible assets

8-3-1- Intangible assets except for goodwill of business place are entered in accounts at cost. The goodwill of business place will not be depreciated. However, upon a value impairment test at the end of each financial year, the required provision will be calculated if it is deemed necessary. Computer software packages used for operational and administrative purposes are depreciated on a straight line basis over 3 years. For other intangible assets no depreciation/amortization is computed.

8-4- Recognizing incomes from the loan facilities granted, fees and late payment

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:

7574 Annual Report

3- The loans with the expiry of 5 years or more from their maturity for repayment of the principal amounts and interests thereto are required to have 100% specific provision (without considering the value of collaterals).

The management has not passed any judgment on the financial statements beyond the context of the foregoing directive.

8-7- Provision for employees’ termination benefits

The employees’ termination benefits are calculated and entered in accounts on the basis of the last month’s fixed salary and regular benefits for each year of their service records.

8-8- Provision for employees’ pension benefits

The bank’s employees are under the social security coverage and thus no provision for their retirement pension has been entered in accounts.

8-9- Foreign currency translation

8-9-1- Country-wide domestic accounts

Monetary items in foreign currency are translated at the official exchange rate (as announced by the Central Bank of Iran (CBI)) at the balance sheet date and non-monetary items recorded in foreign currency at historical cost are translated at the official rate prevailing on the date the transaction is conducted. The differences arising out of settlement or translation of foreign currency monetary items are recognized as income or expense for the given period and then entered in the profit and loss statement.

8-9-2- Offshore banking transactions accounts

The assets and liabilities of overseas branches are translated at foreign exchange rate at the balance sheet date and the incomes and related expenses are translated at the foreign exchange rate prevailing on the transaction date. All differences resulting from such translations are recognized in the statement of comprehensive profit and loss and are classified under the heading of “shareholders’ equity” in the balance sheet. Additionally, the differences in translation of monetary items which inherently form a portion of net investment in offshore banking transactions are recognized in the statement of comprehensive profit and loss and classified and titled under shareholders’ equity” in the balance sheet until the time investment is transferred.

8-10- Goodwill

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 application of special worth method for group shares is recognized as goodwill out of the fair net value of their recognizable assets at the time of acquisition and will be amortized over 10 years. The goodwill derived from 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.

8-11- Treasury stock/shares

Under the provision of the Law Governing the Removal of Competitive Production Barriers and Enhancement of Financial System and on the strength of the executive regulations adopted by the Securities and Exchange Organization High Council, the bank shall be allowed to 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 and sale of treasury shares is reflected in the shareholders’ equity section.

8-12-“Other items” in the notes to financial statements

Considering the number of items used for certain accounts, some items in every note have been reported under the heading of “Other”. The items which are entered in accounts under the title of “other” include insignificant or 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.

In applying the provisions of the Usury-Free Banking Law ratified on August 30, 1983 and the executive regulations and by-laws thereto and in view of the directive No. 94/69643 of June 10, 2015 issued by the Central Bank of of Iran (CBI), the profit-sharing income, uses of shared resources and depositors’ share from the profit-sharing income should be calculated and the results thereof should be reported in the statement of investment deposits performance.

8-5- Classification of loans granted (loan portfolios)

Pursuant to the Directive for Classification of Assets Owned by Credit Institutions adopted by the Money and Credit Council (subject of the directive No. MB/2823 of February 25, 2007 issued by the Central Bank of of Iran (CBI)) and with regard to time factors and delay in payments as described below, the customers’ financial situation and status of related industry, the loan facilities granted by the bank shall be evaluated and classified into one of the following four categories:

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)

3- Outstanding category (6 to 18 months as of the maturity date and/or the date of payment interruption)

4- Doubtful category (over 18 months as of the maturity date and/or the date of payment interruption)

• The management has not passed any judgment on the financial statements beyond the context of the aforesaid directive.

8-6- Provision for doubtful debts

Pursuant to the regulations governing the procedures for calculation of provisions for credit Institutions as approved by the Money and Credit Council (subject of the directive No. 91/21270 of April 20, 2012 issued by the Central Bank of of Iran (CBI)), provisions for the loan facilities granted are to be calculated and entered in accounts as follows:

1. General provision which is equivalent to one and half (1.5%) percent of the total loans balance will be calculated at the end of each year except for the balance of the loans for which specific provision has been calculated.

2. Specific provision relative to the balances of overdue, outstanding and doubtful accounts will be calculated as described below after deduction of the updated value of collaterals in each loan category by exercising the predetermined rates:

Loan category Rate Percentage

Overdue loans 10

Outstanding loans 20

Doubtful loans (based on the evaluation of the customer’s repayment capability) 50-100

Income and late penalties on loans granted and fees Method of recognition

Interest on loans granted

Current Accrual / Cash

Overdue Accrual / Cash

Outstanding Accrual / Cash

Doubtful Accrual / Cash

Late payment penalties

Current Accrual / Cash

Overdue Accrual / Cash

Outstanding Accrual / Cash

Doubtful Cash

Commission Fees

Commission fees from LGs issued Cash

Commission fees from other banking services Cash

Commission fees from loans granted on interest-free accounts Accrual / Cash

7776 Annual Report

10-1- The placements in other banks which do not have restrictions on their withdrawal have been classified under the heading of “cash”.

10-2- Due from Central Bank of Iran (CBI)

10-2-1- The balance of this account amounting to Rls. 7,395,487/- million is related to the forward purchase of 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:

It is further added that owing to the follow-up actions by the bank management and until the issuance date of the financial statements, an agreement was reached between the representatives of the CBI’s Office of Statistics and Forex Obligations and representatives of Saman Bank to the effect that the Central Bank agreed to provide the amount of $ 363 million as listed below. Accordingly, on the strength of the letter No. 256646 of December 16, 2014, the Central Bank has made the settlement of forex debts due subject to the performance of a special audit of foreign currency by an independent auditor for the years 2012 and 2013. In pursuance of this demand, Sokhane-hagh Auditing Services and Institute performed an audit as requested by CBI and then Saman Bank submitted the completed audit report containing the detailed list of the assets and liabilities as well as the forex resources used to cover the years 2012 and 2013 to the CBI Deputy for Foreign Exchange Affairs under the letters No. 95.31969 of March 18, 2017 and No. 95-31972 of March 18, 2017.


Note 2019 2018 2019 2018

Rls(m) Rls(m) Rls(m) Rls(m)

Due from CBI 10-2 7,395,566 7,471,674 7,395,567 7,471,674

Due from other banks and credit institutions 10-3 2,943,373 3,212,073 2,559,726 3,216,057

10,338,939 10,683,747 9,955,293 10,687,731


Note 2019 2018 2019 2018


Demand deposits with CBI (Rial) (restricted) 0 0 0 0

Demand deposits with CBI (Forex) (restricted) 0 0 0 0

Demand deposits with Central Banks of other countries (restricted)

0 0 0 0

Interest receivable on statutory deposit 0 0 0 0

Other amounts due (3 items) 10-2-1 7,395,566 7,471,674 7,395,567 7,471,674

7,395,566 7,471,674 7,395,567 7,471,674

2019

Reference exchange rate Official exchange rate Total

Type of Currency

Forex amount Exchange rate

Amount in Rials


Amount in Rials


Amount in Rials

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

UAE Dirham 34,270,705.10 11,437 391,954 2,563,672.39 11,437 29,321 36,834,377.49 11,437 421,275

Chinese Yuan 0 6,255 0 24,142,410.16 6,255 151,011 24,142,410.16 6,255 151,011

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

5,329,098 2,066,389 7,395,487

9-5- The placements in other banks which have restrictions on their withdrawal (in terms of time and other restrictions) have been classified under the heading of “Due from banks”.

9- Cash


Note 2019 2018 2019 2018


Cash in hand (Rial) 1,628,421 1,765,896 1,628,069 1,765,004

Cash in hand (Forex) 9-2 3,093,896 1,267,104 2,830,807 1,181,209

Foreign currencies placed with brokers 1,345,752 786,982 0 0

Cash in transit (Rial) 3,400 200 400 200

Cash in transit (Forex) 0 0 0 0

Demand deposits placed with CBI (unrestricted)

9-3 412,377 3,886,993 412,377 3,886,993

Placements in other banks and credit institutions (unrestricted)

9-4 144,485,763 28,886,310 143,810,093 29,915,671

150,969,609 36,593,485 148,681,746 36,749,077

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 risks arising from theft and fire.

9-2- The cash foreign currencies owned by the parent company include: 45,253,576.27 USD, 18,838,006.27 Euros, 51,454 UK Pounds, 2,576,590.50 Dirhams and 4,615/- Turkish Liras.

9-3- The demand deposits placed with the Central Bank of Iran (CBI) (unrestricted)

9-4- The placements in other banks and credit institutions (unrestricted)

2019 2018

Rls(m) Rls(m)

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

412,377 3,886,993


2019 2018 2019 2018


Demand deposits with other local banks and credit institutions (Rial) (unrestricted)

718,814 198,449 211,683 133,689

Term deposits with other local banks and credit institutions (Rial) (unrestricted)

1,096,698 310,410 2,568,596 1,421,414

Demand deposits with foreign banks (Forex) (unrestricted) 14,976,683 2,759,921 14,340,451 2,568,074

Term deposits with other local banks and credit institutions (Forex) (unrestricted)

131,845 0 0 0

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) (unrestricted)

1,420 920,804 131,845 844,099

144,485,763 28,886,310 143,810,093 29,915,671

10- Due from banks and credit institutions

7978 Annual Report

10-3-1- Other amounts related to the claims from Saderat Bank and Pasargad Bank break down as follows:

Balance of receivables

2019 2018

Name of bank Type of currency

Type of contract

Interest rate(percentage)

Maturity Type of collateralForex amount

Rls(m) Rls(m)

Amounts in rial

Saderat RialFactoring (discount)

21 April 2011 ,23 LC documents 0 0 275,317




21 August 2011 ,1 LC documents 0 0 261,215


21 June 2011 ,28 LC documents 0 0 260,971


21 June 2011 ,28 LC documents 0 242,400 242,400




21 May 2011 ,24 LC documents 0 0 240,388


21 May 2011 ,10 LC documents 0 0 274,709


21 May 2011 ,10 LC documents 0 0 0


21 May 2011 ,4 LC documents 0 0 0


21 April 2011 ,28 LC documents 0 0 0


21 March 2011 ,9 LC documents 0 0 0


21 April 2011 ,23 LC documents 0 0 0

242,400 1,905,669

Amounts in forex

Pasargad EuroFactoring (discount)

12.81 October 2012 ,5 LC documents 15,766,893 751,419 729,203


12.81September 2012 ,29

LC documents 5,000,000 238,290 231,245


12.81 October 2012 ,3 LC documents 6,000,000 285,948 277,494

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

Amounts in dollar

Exchange rate Amount requested by Saman bank under letter no. 013678/M/92/210 of February 2014 ,25

Data entered by Saman bank on website of Statistics Information Department

Post-control obligations

Total registered amount

Due from CBI

Reference exchange rate (subsidized) 462,679,859 750,600,608 563,176,118 301,954,123

Official exchange rate 140,214,008 170,080,338 150,154,772 43,187,252

Free market rate 0 0 0 18,100,244

Exchange rate for opening LCs 0 955,547 461,132 0

602,893,867 921,636,493 713,792,022 363,241,619

10-3- Due from other banks and credit institutions


Note 2019 2018 2019 2018


Demand deposits with other local banksand credit institutions (Rial) (restricted)

0 0 0 0

Demand deposits with other local banksand credit institutions (Forex) (restricted)

0 0 0 0

Term deposits with other local banksand credit institutions (Rial) (restricted)

0 0 0 0

Term deposits with other local banksand credit institutions (Forex) (restricted)

0 0 0 0

Demand deposits with foreign banks (Forex) (restricted)

0 0 0 0

Term deposits with foreign banks (Forex) (restricted)

0 0 0 0

Facilities granted to other banks and credit institutions

0 0 0 0

Payment of checks issued by other banks 1,425,317 68,462 1,041,670 72,446

Other amounts due (2 items) 10-3-1 1,518,056 3,143,611 1,518,056 3,143,611

2,943,373 3,212,073 2,559,726 3,216,057

8180 Annual Report

Concerning the 11 letters of credit under numbers 90/3446/0015 and 90/3446/0018 and 90/3446/0017 and 90/3446/00137 and 90/3446/0028 and 90/3446/0021 and 90/3446/0031 and 90/3446/0027 and 90/3446/0038 and 90/3446/0019 and 90/3446/0022 totaling the amount of Rls. 2,729,397/ million. The verdicts passed by the Bench 14 of Tehran Public Civil Court were against Bank Saderat. Following the appeal lodged by Bank Saderat, the verdicts of initial court in connection with 5 letters of credit under numbers 90/3446/0031 and 90/3446/0027 and 90/3446/0038 and 90/3446/0022 and 90/3446/0021 received finality in the Bench 18 of Tehran Provincial Court of Appeal (Revision). The final verdicts were referred to the initial court for issuance of the execution writ for enforcement of final judgments. The execution writ was issued and served on Bank Saderat. Despite the service of the writ, Bank Saderat did not take any action to enforce the judgment and thus an executory file was formed against Bank Saderat and enforcement actions were taken for the foregoing 5 letters of credit as deemed appropriate. As result, a total amount of Rls. 3,102,282/ million- was collected and credited to Saman Bank account and the case for the said five letters of credit was closed.

As regards the letter No. 90/3446/0018, Bank Saderat lodged the second appeal and the file was referred to the chamber 22 of the Supreme Court. Upon examination of submissions and deliberations, this chamber upheld the previous verdict in favor of Saman Bank and returned the file to the initial court for enforcement actions. Since Saman Bank had already requested the court for attachment/seizure of the appellant’s property being equivalent to the remedy sought, it collected the amount of Rls. 50,370 million for the original claim and the amount of Rls. 91,456 milion as compensation loss. As regards the letter of credit No. 90/3446/0016 which was investigated by the Bench No. 19 of Tehran Public Civil Court, Saman Bank collected the amount of Rls. 811735 million for the original claim and loss thereof in settlement of all its 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 recovered all its claims totalling the amount of Rls. 1,985,651million for the principal and losses under the letter of credit Nos. 28, 37 and 17. As regards the letters of credit Nos. 15 and 19, an amount totalling Rls. 1211710 million was collected and the executory file is currently open for recovery of Rls. 116,232 million as the remainder.

Pasargad Bank

As regards the discount of letters of credit for Pasargad Bank, this bank has filed a lawsuit versus the claims brought by Saman Bank which was referred to the Bench No. 7 of Tehran Public Civil Court for investigation. The court-appointed expert examined the evidence and pleadings submitted by both parties and, upon full inquiries into the matter, reported the breach and default by Pasargad Bank and Saman Bank’s entitlement to the claim to the court. The lawyer of Pasargad Bank has made an appeal against the court’s decision.

For the second time, the matter was referred to a team of three experts where they confirmed the first expert’s opinion and Saman Bank’s entitlement to the claims brought under letters of credit in foreign exchange versus Pasargad Bank. Thus the courts passed the judgment No. 9709970226701194 of December 25, 2018 and sentenced Pasaegad Bank to pay the amount of 26766893 Euros for the original claim along with the litigation costs and lawyer’s fee. Upon service of the judgement, Pasargad Bank lodged an appeal. On the other hand, Saman Bank made a plea against this action requesting for late penalty (loss) on the non-fulfillment of obligations by Pasargad Bank. The submissions and pleadings were referred to the Tehran Court of Appeal for rehearing the appeal.

LC number Original

amount sought Late payment

penalty Processing costand lawyer's fees

Balancedue

Debt status

89/3446/0029 259,922

402,914 24,222 0 Settled89/3446/0030 259,915

90/3446/0023 143,595

90/3446/0024 143,583

89/3446/0063 257,600 203,654 9,425 0 Settled

90/3446/0010 249,681 262,450 7,491 0 Settled

90/3446/0021 260,009 314,847 26,609 0 Settled

90/3446/0022 239,991 314,776 26,668 0 Settled

90/3446/0027 240,463 291,170 24,632 0 Settled

90/3446/0038 260,000 299,855 41,589 0 Settled

90/3446/0031 320,577 371,221 51,034 0 Settled

90/3446/0016 274,709 442,808 94,219 0 Settled

90/3446/0015 50,370 85,841 5,615 0 Settled

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

90/3446/0019 261,215 339,357 42,512 0 Amounts credited and in the process of settlement

90/3446/0018 260,971 0 0 0 Amounts credited and in the process of settlement

89/3446/0072 242,400 0 0 242,400 pending

4,541,006 4,035,554 449,235 242,400

Company name (first beneficiary) discounting

applicant/transferor ofproceeds

Customerno.

LC opening bank (Obligor to

pay funds onmaturity)

Balance of documents

traded (in billion rials)

Company's ownership (% held)

Elit- Anzali Free Trade Zone Co.

1305959 Saderat 761 Amir Reza Moujoudi (99%)

Fouladyar Iranian Trading-Industerial Co.

174667 Saderat 300

Staff cooperative of National Iranian Industrial and Steel Group Co. (55% of shares) Iran Metal Wastes Procurement and Processing Co. (40% of shares)

Foulad Iran Public Service Co.. 7778609 Saderat 521 Foulad Staff Pension Fund(99.7%)

Khuzestan Steel Co. 13934 Saderat 807 IMIDRO (50.5%) & Provincial Investment Companies(30%)

Foulad Spadana Co. 1124386Saderat 1,350

Amir Reza Taremi (95%)Industry & Mine 499

Parsian Milad Hadid Co. 1124386 Saderat 802 Mohsen Karimian (60%)

5,040

Amounts collected by March 20, 2019 (4,261)

Cash collected during 2019 (536)

Final court decree against Bank Saderat

0

Debt balance 243

In order to protect the interests and rights of Saman Bank and seek compensation from the guaranteed amounts and force the two banks of Saderat and Industry and Mine to fulfill their obligations, Saman Bank has taken legal actions versus these two banks by claiming the collection of proceeds derived from 8 matured letters of credit 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 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 claimed by Saman Bank. Until the date of presenting financial statements, the court made its ruling on the two cases, brought against the Bank of Industry and Mine in favor of Saman Bank which upon finality of decree and issuance of a writ for execution of the court’s decision resulted in the collection of Rls. 666 billion comprising the original amount for Rls 499 billion, late payment penalty, litigation costs and lawyer’s fee for the amount of Rls. 167 billion.

The legal actions taken so far concerning the letters of credit issued by the Bank Saderat are described in this table:

the authenticity of opened letters of credit as well as irrevocable commitments by the opening banks for payment of the proceeds derived from such discounts to Saman Bank on due dates and in return for transfer of the beneficiary’s rights ( discount applicant).

As such, a number of companies made applications for discount of the letters of credit opened and guaranteed by other banks which were processed in compliance with the foregoing standards and upon receipt of authorization from the bank’s credit committees. For the discount of forex-denominated letters of credit, all credit items were paid and settled on maturity dates by the banks which had opened and guaranteed such instruments. For the discounts of rial-denominated term letters of credit all items with the exception of a number of items connected with Amir Mansour Arya Group, were paid and settled by the opening banks in a normal way of business practices. For the discounting facilities provided for the companies affiliated to Amir Mansour Arya Group or for the companies which were trading partners of this Group, except for two banks, Bank Saderat and Bank of Industry and Mine, all other banks including Pasargad Bank, Sepah Bank, Bank Melli and Bank Maskan fulfilled their obligations and paid Saman Bank the committed amounts under 18 letters of credit totaling Rls. 2,136 billion on the due dates. Only the two banks of of Saderat and Industry and Mine failed to honor their obligations pledged against Saman Bank. The total discounts made and the amounts guaranteed to be paid in the letters of guarantee by these two opening banks on the maturity dates were as follows:

8382 Annual Report

Gro

up

2019

2018

Bal

ance

of

prin

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real

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an

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rest

s

Bal

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of

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and

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Bal

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of

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2019

2018

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13,4

64,6

77

22,9

18,9

28

(4,0

01,4

77)

(12,

809,

055)

(5

,344

,186

) 17

7,18

6,03

4 (7

,712

,515

) 16

9,47

3,51

7 13

7,13

6,63

8

11-

Loan

s gr

ante

d to

and

am

ount

s du

e fr

om n

on-g

over

nmen

tal e

ntiti

es/p

erso

ns

8584 Annual Report

11-1- Classification of Group loans granted to and amounts due from non-governmental entities/persons based on the regulations adopted by the Money and Credit Council (Note 8-5 to the financial statements) breaks down as follows:

11-2- Classification of the parent company loans granted to and amounts due from non-governmental entities/persons based on the regulations adopted by the Money and Credit Council (Note 8-5 to the financial statements) breaks down as follows:

Group

2019

Current Overdue outstanding doubtful Total

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

Jealeh (service contracts) 45,624,012 53,373 18,743 1,720,834 47,416,961

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

Muzarabah (trade contracts) 6,551,329 25,117 11,186 3,889,083 10,476,715

Mosharakat Madani (Civil partnership) 74,535,300 587,610 4,342,574 12,654,290 92,119,774

Factoring 13,141,636 1,650 94,491 1,047,272 14,285,050

Murabahah (Sale contracts) 6,995,373 8,215 564 465 7,004,617

Estesna'a 0 0 0 0 0

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

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 LGs paid 295,114 0 0 407,584 702,699

Debtors for participationand Sukuk bonds paid

0 0 0 0 0

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

Less:

Unrealized interest (12,801,769) 0 0 0 (12,801,769)

Deferred Interest and fee 0 (161,267) (1,998,060) (3,184,860) (5,344,187)

Joint Civil partnership account (20,346) 0 0 0 (20,346)

Amounts received for Muzarabah (trade contracts)

(3,970,224) 0 0 0 (3,970,224)

Net loans granted before deducting provision for doubtful debts

147,486,627 542,811 7,402,838 21,352,024 176,784,302

General provision for doubtful debts (1,773,736) 0 0 0 (1,773,736)

specific provision for doubtful debts 0 (108,620) (153,472) (5,670,661) (5,932,754)

Balance at March 20, 2019 145,712,891 434,191 7,249,366 15,681,363 169,077,815

Balance at March 20, 2018 112,760,119 4,391,191 672,411 18,817,664 136,641,385

Parent Company

2019

Current Overdue outstanding doubtful Total


Sales by installments 12,155,827 17,234 4,921,934 171,869 17,266,864

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

Salaf (future contracts) 25,188 0 0 28,054 53,242

Muzarabah (trade contracts) 6,705,629 25,117 11,186 3,889,083 10,631,015

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 14,285,049

Murabahah (Sale contracts) 6,995,373 8,215 564 465 7,004,617

Estesna'a 0 0 0 0 0

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

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 LGs paid 295,114 0 0 407,584 702,698

Debtors for participationand Sukuk bonds paid

0 0 0 0 0

Debtors of prepaid credit cards 1,495,649 0 0 0 1,495,649

164,698,887 704,078 9,400,898 24,536,884 199,340,747

Less:

Unrealized interest (12,809,055) 0 0 0 (12,809,055)

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)

Amounts received for Muzarabah (trade contracts)

(3,981,131) 0 0 0 (3,981,131)

Net loans granted before deducting provision for doubtful debts

147,888,355 542,811 7,402,838 21,352,028 177,186,032

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) (5,932,753)

Balance at March 20, 2019 146,108,593 434,191 7,249,366 15,681,367 169,473,517

Balance at March 20, 2018 113,955,372 4,391,191 672,411 18,117,664 137,136,638

8786 Annual Report

• Disclosure of collaterals in possession and their allocation based on the loan balances move from the most liquid ones to other items respectively.

11-6- Loans granted to and amounts due from non-governmental entities/persons

by a breakdown of the type of collateral

2019 2018

Rls(m) Rls(m)

Deposits 6,451,900 4,884,478

Participation bonds and other debt securities guaranteed by the government and CBI 0 0

Participation bonds and other debt securities guaranteed by other banks 1,860 11,961

Banking letters of guarantee 501 474

Letters of credit traded 1,136,604 1,418,842

Shares listed on the Stock Exchange 2,097,778 2,737,695

Land and buildings 31,589,143 28,367,042

Machinery 497,989 475,346

Checks and promissary notes 125,593,260 97,079,784

Other 9,816,997 9,573,531

177,186,032 144,549,153

Unsecured loans and claims (without security) 0 0

177,186,032 144,549,153

11-3- Details of provision for doubtful debts of the parent company break down as follows:

11-4- Loans granted by the parent company in foreign currency by a breakdown

of payment resources

11-5- Loans granted to and amounts due from non-governmental entities/persons

in terms of maturities and interest rates

2019 2018

General provision

Specific provision

TotalGeneral provision

Specific provision

Total

Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m)

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

Recovered 0 0 0 0 0 0

Bad debts (written-off) 0 0 0 0 0 0

Increase or decrease during the year 0 300,000 300,000 0 1,200,000 1,200,000

Balance at year-end 1,779,762 5,932,753 7,712,515 1,779,762 5,632,753 7,412,515

2019 2018

Current Overdue Outstanding Doubtful Total Total


Local resources 9,209 0 0 2,949,725 2,958,934 6,034,720

Forex reserve account 0 0 0 70,945 70,945 70,945

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

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

8988 Annual Report

11

-7

-1

- D

eta

ils

of

inte

re

sts

ac

cru

ed

on

th

e l

oa

ns

gra

nte

d t

o a

nd

am

ou

nts

du

e f

ro

m e

nti

tie

s/p

ers

on

s

11

-7

- D

eta

ils

of

loa

ns

gra

nte

d t

o a

nd

am

ou

nts

du

e f

ro

m n

on

-g

ove

rn

me

nta

l e

nti

tie

s/p

ers

on

s

* The

inte

rest

on

loan

s in

clud

ed th

e in

tere

st o

n th

e lo

ans

gran

ted

as w

ell a

s th

e la

te p

aym

ent p

enal

ty. T

he a

mou

nt in

crea

sed

duri

ng th

e pe

riod

incl

uded

the

accr

ued

and

cash

inte

rest

s re

cogn

ized

and

the

amou

nts

colle

cted

con

sist

ed

of th

e co

llect

ed p

ortio

n of

acc

rued

and

cas

h in

tere

sts

duri

ng th

e pe

riod

.

Sal

es b

y in

stal

lmen

ts

Jea

leh

(ser

vice

cont

ract

s)

Hir

epu

rcha

se

Sal

af (f

utur

eco

ntra

cts)

Muz

abah

ah C

ivil

part

ners

hip

Fact

orin

gM

urab

ahah

(Sal

eco

ntra

cts)

Este

sna'

e (C

ontr

acts

of

Exch

ange

)

Gha

rzol

-ha

sane

h (F

ree

inte

rest

)

Oth

er lo

ans

gra

nted

in r

ial

Loa

ns g

rant

ed in

fore

x

Deb

tors

of p

aid

lett

ers

ofcr

edit

Deb

tors

of p

aid

lett

ers

ofgu

aran

tee

Deb

tors

for

par

ticip

atio

n a

nd S

ukuk

bond

s pa

id

Deb

tors

of p

repa

idca

rds

Tota

l

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Pri

ncip

al lo

an a

mou

nts

Bal

ance

at M

arch

20,

201

87,

731,

552

21,5

40,1

73

2,03

8,32

5 26

,252

5,

142,

749

61,0

64,9

42

3,53

1,99

7 31

6,00

0 0

1,39

5,64

1 0

4,42

7,78

5 1,

665,

442

506,

297

0 11

1,95

1 10

9,49

9,10

6

Gra

nted

dur

ing

the

year

3,48

1,02

2 11

3,76

2,71

8 12

9,05

0 0

1,24

3,25

1 24

0,69

0,96

4 13

,084

,260

6,

150,

831

0 59

,515

0

5,13

5,30

1 6,

619,

819

1,47

3,90

1 0

7,58

2,77

2 39

9,41

3,40

4

Col

lect

ed d

urin

g th

e ye

ar(1

,581

,357

) (9

5,85

5,29

2)

(84,

622)

(6

55)

(1,9

90,4

25)

(232

,558

,113

) (7

,670

,669

) (9

47,6

81)

0 (4

32,8

31)

0 (7

,814

,552

) (7

,448

,700

) (1

,524

,517

) 0

(6,1

99,1

90)

(364

,108

,604

)

Effe

ct o

f for

ex e

xcha

nge

rate

s du

ring

the

peri

od0

0 0

0 0

0 0

0 0

0 0

0 0

0 0

0 0

Bal

ance

at M

arch

20,

201

99,

631,

217

39,4

47,5

99

2,08

2,75

3 25

,597

4,

395,

575

69,1

97,7

93

8,94

5,58

8 5,

519,

150

0 1,

022,

325

0 1,

748,

534

836,

561

455,

681

0 1,

495,

533

144,

803,

906

Inte

rest

on

loan

s gr

ante

d *B

alan

ce a

t Mar

ch 2

0, 2

018

1,59

0,80

7 93

2,09

3 33

2,34

5 25

,301

5,

699,

750

19,4

78,7

02

4,87

6,91

3 3,

608

0 0

0 1,

205,

846

657,

666

247,

017

0 0

35,0

50,0

48

Incr

ease

d du

ring

the

year

1,58

4,15

4 4,

258,

331

36,3

35

0 1,

258,

594

15,3

44,6

20

881,

339

244,

679

0 0

0 88

1,36

1 9,

285

0 0

6,04

7 24

,504

,745

Col

lect

ed d

urin

g th

e ye

ar(5

25,2

23)

(3,5

67,8

32)

(27,

699)

(1

14)

(1,1

13,7

56)

(14,

022,

388)

(2

,664

,057

) (1

81,4

16)

0 0

0 (1

,050

,825

) (1

1,95

1)

0 0

(5,9

26)

(23,

171,

189)

Effe

ct o

f for

ex e

xcha

nge

rate

s du

ring

the

peri

od0

0 0

0 0

0 0

0 0

0 0

0 0

0 0

0

Bal

ance

at M

arch

20,

201

92,

649,

738

1,62

2,59

2 34

0,98

1 25

,187

5,

844,

588

20,8

00,9

34

3,09

4,19

5 66

,871

0

0 0

1,03

6,38

2 65

5,00

0 24

7,01

7 0

121

36,3

83,6

04

Prov

isio

n fo

r do

ubtf

ul d

ebts

Bal

ance

at M

arch

20,

201

8(5

8,18

3)

(16,

320)

(6

4,00

6)

(13,

478)

(9

44,4

51)

(5,1

23,3

06)

(27,

913)

0

0 0

0 (3

5,36

9)

(1,0

16,5

22)

(112

,968

) 0

0 (7

,412

,516

)

Rec

eive

d0

0 0

0 0

(300

,000

) 0

0 0

0 0

0 0

0 0

0 (3

00,0

00)

Incr

ease

d or

dec

reas

eddu

ring

the

year

0 0

0 0

0 0

0 0

0 0

0 0

0 0

0 0

0

Bad

deb

ts (w

ritt

en-o

ff)

duri

ng th

e ye

ar0

0 0

0 0

0 0

0 0

0 0

0 0

0 0

0 0

Bal

ance

at M

arch

20,

201

9(5

8,18

3)

(16,

320)

(6

4,00

6)

(13,

478)

(9

44,4

51)

(5,4

23,3

06)

(27,

913)

0

0 0

0 (3

5,36

9)

(1,0

16,5

22)

(112

,968

) 0

0 (7

,712

,516

)

Amou

nts

rece

ived

for

Muz

arab

eh (t

rade

con

trac

ts)

Am

ount

s re

ceiv

ed fo

r M

uzar

abeh

0 0

0 0

0 0

0 0

0 0

0 0

0 0

0 0

0

Civi

l par

tner

ship

join

t acc

ount

0 0

0 0

(20,

346)

0

0 0

0 0

0 0

0 0

0 0

(20,

346)

Bal

ance

at M

arch

20,

201

80

0 0

0 0

0 0

0 0

0 0

0 0

0 0

0 0

Bal

ance

at M

arch

20,

201

90

0 0

0 0

(3,9

81,1

31)

0 0

0 0

0 0

0 0

0 0

(3,9

81,1

31)

Net

loan

s gr

ante

d

Bal

ance

at M

arch

20,

201

89,

264,

176

22,4

55,9

46

2,30

6,66

4 38

,075

9,

898,

048

75,4

20,3

38

8,38

0,99

7 31

9,60

8 0

1,39

5,64

1 0

5,59

8,26

2 1,

306,

586

640,

346

0 11

1,95

1 13

7,13

6,63

8

Bal

ance

at M

arch

20,

201

912

,222

,772

41

,053

,871

2,

359,

728

37,3

06

9,27

5,36

6 80

,594

,290

12

,011

,870

5,

586,

021

0 1,

022,

325

0 2,

749,

547

475,

039

589,

730

0 1,

495,

654

169,

473,

517

Sal

es b

y in

stal

lmen

ts

Jea

leh

(ser

vice

cont

ract

s)

Hir

epu

rcha

se

Sal

af (f

utur

eco

ntra

cts)

Muz

abah

ah C

ivil

part

ners

hip

Fact

orin

gM

urab

ahah

(Sal

eco

ntra

cts)

Este

sna'

e (C

ontr

acts

of

Exch

ange

)

Gha

rzol

-ha

sane

h (F

ree

inte

rest

)

Oth

er lo

ans

gra

nted

in r

ial

Loa

ns g

rant

ed in

fore

x

Deb

tors

of p

aid

lett

ers

ofcr

edit

Deb

tors

of p

aid

lett

ers

ofgu

aran

tee

Deb

tors

for

par

ticip

atio

n a

nd S

ukuk

bond

s pa

id

Deb

tors

of p

repa

idca

rds

Tota

l

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Inte

rest

s re

ceiv

able

on

loan

s gr

ante

d

Bal

ance

at M

arch

20,

201

81,

539,

167

679,

782

11,7

79

1,77

5 1,

112,

390

8,37

2,35

3 49

7,40

9 3,

362

0 0

0 44

8,83

5 51

8,49

8 1,

333

0 0

13,1

86,6

83

Incr

ease

d du

ring

the

year

885,

070

4,10

7,04

3 31

,513

0

647,

207

9,99

2,37

0 65

8,50

8 24

2,11

9 0

0 0

420,

839

9,28

6 0

0 6,

045

17,0

00,0

00

Col

lect

ed d

urin

g th

e ye

ar(5

13,5

22)

(3,4

32,3

84)

(26,

962)

(1

14)

(716

,025

) (1

0,15

4,49

0)

(571

,336

) (1

79,2

27)

0 0

0 (5

92,9

03)

(11,

951)

0

0 (5

,926

) (1

6,20

4,84

0)

Effe

ct o

f for

eign

exc

hang

e ra

te d

urin

g th

e pe

riod

0 0

0 0

0 0

0 0

0 0

0 0

0 0

0 0

0

Bal

ance

at M

arch

20,

201

91,

910,

715

1,35

4,44

1 16

,330

1,

661

1,04

3,57

2 8,

210,

233

584,

581

66,2

54

0 0

0 27

6,77

1 51

5,83

3 1,

333

0 11

9 13

,981

,843

Late

pen

alti

es fo

r lo

ans

gran

ted

Bal

ance

at M

arch

20,

201

851

,640

25

2,31

1 32

0,56

7 23

,526

4,

587,

360

11,1

06,3

49

4,37

9,50

5 24

6 0

0 0

757,

011

139,

169

245,

683

0 0

21,8

63,3

67

Incr

ease

d du

ring

the

year

699,

084

151,

288

4,82

2 0

611,

387

5,35

2,24

9 22

2,83

1 2,

560

0 0

0 46

0,52

2 0

0 0

0 7,

504,

743

Col

lect

ed d

urin

g th

e ye

ar(1

1,70

1)

(135

,448

) (7

37)

0 (3

97,7

31)

(3,8

67,8

99)

(2,0

92,7

21)

(2,1

89)

0 0

0 (4

57,9

22)

0 0

0 0

(6,9

66,3

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ct o

f for

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exc

hang

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te d

urin

g th

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riod

0 0

0 0

0 0

0 0

0 0

0 0

0 0

0 0

0

Bal

ance

at M

arch

20,

201

973

9,02

3 26

8,15

1 32

4,65

2 23

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4,

801,

016

12,5

90,6

99

2,50

9,61

5 61

7 0

0 0

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139,

169

245,

683

0 0

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rest

s on

loan

s gr

ante

d

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ance

at M

arch

20,

201

81,

590,

807

932,

093

332,

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25,3

01

5,69

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0 19

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4,

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3,60

8 0

0 0

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7,66

8 24

7,01

6 0

0 35

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Bal

ance

at M

arch

20,

201

92,

649,

738

1,62

2,59

2 34

0,98

2 25

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5,

844,

588

20,8

00,9

32

3,09

4,19

6 66

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0

0 0

1,03

6,38

2 65

5,00

2 24

7,01

6 0

119

36,3

83,6

05

9190 Annual Report

12- Investments in shares and other securities

Group

2019 2018

Note Current Long-term Total Current Long-term Total


Investment in quickly marketable shares

12-1 12,225,343 40,099 12,265,442 1,426,900 127,355 1,554,255

Investment in other shares/stocks 12-2 2,243,932 2,022,100 4,266,032 7,100,911 856,305 7,957,216

Investment in other securities 12-3 357,926 741,637 1,099,563 3,401,931 109,035 3,510,966

14,827,201 2,803,836 17,631,037 11,929,742 1,092,695 13,022,437

Parent Company

2019 2018

Note Current Long-term Total Current Long-term Total


Investment in quickly marketable shares

12-1 12,225,343 40,099 12,265,442 1,426,900 127,355 1,554,255

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

Investment in other securities 12-3 357,926 741,637 1,099,564 3,401,931 109,035 3,510,966

14,827,201 3,465,389 18,292,591 11,929,742 1,506,206 13,435,948

11-8- Loans granted to and amounts due from non-governmental entities/

persons by a breakdown of customer type

11-9- Loans granted by the Group to the affiliated companies are as follows

11-10- Loans granted by the parent company to subsidiaries and affiliates are as

follows

2019 2018

Gross amountProvision for doubtful debts

Net Gross amountProvision for doubtful debts

Net


Natural customers 43,493,954 (649,017) 42,844,936 34,909,172 (649,017) 34,260,154

Legal customers 129,856,370 (7,063,498) 122,792,873 106,199,747 (6,763,498) 99,436,250

Personnel 3,835,708 0 3,835,708 3,440,234 0 3,440,234

177,186,032 (7,712,515) 169,473,517 144,549,153 (7,412,515) 137,136,638

Group

2019 2018

Interest rates

Current Non-currentProvision for doubtful debts

Total Net

Percentage Rls(m) Rls(m) Rls(m) Rls(m) Rls(m)

Related parties

Adonis Co. 18-22 16,149 0 (242) 15,908 53,184

16,149 0 (242) 15,908 53,184

Parent Company

2019 2018

Interest rates

Current Non-currentProvision for doubtful debts

Total Net

Percentage Rls(m) Rls(m) Rls(m) Rls(m) Rls(m)

Group companies

Saman Satellite Communications Co.

18 0 0 0 0 75,690

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

9392 Annual Report

12

-1

-2

-

Lo

ng

-te

rm

in

ve

stm

en

ts i

n q

uic

kly

ma

rk

eta

ble

sh

are

s

12

-2-

Inve

stm

ents

in o

ther

sha

res

are

as fo

llow

s:

12

-2

-1

- C

urre

nt

inve

stm

en

ts i

n o

the

r s

ha

re

s

2019

2018

Ori

gina

tion

Num

ber

of

shar

esIn

vest

men

t C

ost

Acc

umul

ated

va

lue

impa

irm

ent

Net

boo

k va

lue

Mar

ket v

alue

Net

boo

k va

lue

Mar

ket v

alue

Per

cent

age

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Sam

an E

lect

roni

c P

aym

ent C

o.K

arda

n In

vest

men

t Ban

k0

00

0 59

3,09

7 5,

704,

412

646,

666,

400

32.3

364

9,20

8 0

1,39

6,49

92,

243,

932

649,

208

1,39

6,49

9

649,

208

01,

396,

499

2,24

3,93

2 1,

242,

305

7,10

0,91

1

2019

2018

Ori

gina

tion

Num

ber

of

shar

esIn

vest

men

t C

ost

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umul

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va

lue

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irm

ent

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ket v

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Net

boo

k va

lue

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ket v

alue

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cent

age

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(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Shar

es o

f com

pani

es li

sted

on

the

Stoc

k Ex

chan

ge

Iran

Pum

p M

anuf

actu

ring

Co.

P

urch

ase

2,00

00.

0004

30

36

28,8

1541

,760

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edan

Gla

ss W

orks

Pur

chas

e24

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2.15

639

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039

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0897

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45

Pla

stir

anP

urch

ase

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50

575

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40,0

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Shar

es o

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on

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bour

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o. (O

TC)

00

00

00

00

00

00

40,0

990

40,0

9990

,338

127,

355

141,

884

12-1- Parent company’s investments in quickly marketable shares are as follows:

12-1-1- Current investments in quickly marketable shares

2019 2018

Origination Number of shares Investment Cost Net sale value Cost Net sale value

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

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

Iranian Leasing Purchase 0 0 0 0 1,960 1,582

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

Oil Industry 0 0 0 0 0 0

Mines and Metals Investment Development Co. Purchase 0 0 0 0 14,354 13,903

Mines and Metals Investment Development Co. - rights issue Rights issue 0 0 0 0 255 255

Iran Khodro 0 0 0 0 0 0

Iran Khodro Investment Development Co. 0 0 0 0 0 0

Ansar Bank Purchase 0 0 0 0 13 12

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

Takin Co. Purchase 32,400 0.04 171 245 16,887 16,249

Takin Co.-right issue 39,599 169 260 0 0

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

Tamin Maseh Rikhtegari Purchase 0 0 0 0 0 0

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

Alhavi Pharmaceutical Co. Purchase 0 0 0 0 6,205 4,440

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

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

Added (Less):

Cost price adjustment 9,325,447 0 660,843 0

12,225,343 12,225,343 1,426,900 1,426,900

9594 Annual Report

Par

ent C

ompa

ny

2019

2018

Ori

gina

tion

Num

ber

of

shar

esIn

vest

men

tC

ost

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umul

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lue

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irm

ent

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cent

age

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Pay

men

t Co.

Acq

uire

d22

,304

,000

13

19,

317

0 9,

315

9,31

6 9,

315

9,31

5

223,

071

0 22

3,07

1 30

7,94

4 43

3,37

7 23

0,73

1

Add

ed:

12,0

00,0

00

1268

,400

0

68,4

00

68,4

00

68,4

00

68,4

00

Inve

stm

ent p

repa

ymen

t in

C.I.

P. s

hare

s (Ir

ania

n P

ars

Tech

nolo

gy)

1,63

8,51

7,51

2 41

1,73

0,62

9 0

1,73

0,62

9 1,

730,

629

354,

528

354,

528

Inve

stm

ent p

repa

ymen

t in

Sam

an In

vest

men

t Dev

elop

men

t Co.

sha

res

2,02

2,10

0 0

2,02

2,10

0 2,

106,

973

856,

305

653,

659

9796 Annual Report

13- Long-term investments in affiliated companies

14- Amounts due from subsidiaries and affiliates

Group

Share of net assets

GoodwillShare of total net assets

Rls(m) Rls(m) Rls(m)

Balance at the beginning of the year 1,637,880 110,360 1,748,240

Asquisition during the year 0 0 0

Partial payment of subscribed capital 0 0 0

Share of profit in affiliates before goodwill depreciation (43,169) 0 (43,169)

Dividends received or receivable during the year 0 0 0

Goodwil depreciation 0 0 0

Change in category/clssification (1,340,216) (110,360) (1,450,576)

254,495 0 254,495

Group

2019 2018

Balance dueDoubtful debts provision

Net Net


Due from subsidiaries 628,332 0 628,332 458,720

Due from affiliates 0 0 0 0

628,332 0 628,333 458,720

Parent Company

2019 2018

Balance dueDoubtful debts provision

Net Net


Due from subsidiaries 2,428,333 0 2,428,333 2,928,844

Due from affiliates 0 0 0 0

2,428,333 0 2,428,333 2,928,844

12-2-3- Details of Saman Bank subsidiary and affiliated companies are as follows:

12-3- Investments in other securities are as follows:

Domicile Invesment percentage Auditing firm Main activities


Subsidiaries

Saman Brokerage Co. Tehran 0 75 Sokhan Hagh Investment, brokerage and financial services


Tehran 0 94 Sokhan HaghCredit rating services, preventive measures of past-due claims, and follow-up and collection of claims

Tondar Noor Tehran 74 0 Sokhan HaghScientific and research activities in computer development and sale of software

Saman Exchange Co. Tehran 0.00 96.46Azmoon Pardaz Iran Mashhood

Trading foreign currencies

Saman Processing (Pardazeshgaran)

Tehran 0 100 Sokhan HaghDesign, development and support of core banking-based products, applications and tools

Saman Financial and Economic Development Group

Tehran 0 100 Bayat Rayan Provision of technical and engineering services

Atieh Andishan Sepehr Shargh Services Development

Ajabshir 100 0 Bayat Rayan Production of iron ingots from iron scrappings

Atieh Andishan Sepehr Mehr Co.

Tehran 100 0Azmoon Pardaz Iran Mashhood

Provision of technical and engineering services, purchase and sale of all authorized goods and commodities

Affiliates

Kish Cell Pars Co. Kish Island 20.0 20.0 Roshangar Basir Operator and telecommunication services

Adonis Electronic Services Co. Tehran 20.33 4 Mokhtar and Co.Provision of services in IT, computer devices, electronic and telecommunication equipment

Issuer Origination Type of security Interest rate 2019 2018

Percentage Rls(m) Rls(m)

Government and state-run corporations

Shahrivar Sevom Intermediary Co. Purchase Sukuk Bonds 20 291,190 291,190

Ministry of Economic Affairs & Finance Purchase Islamic treasury bonds 0 0 10,000

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

Saman Joint Venture Fund - Yekom EstablishmentOrdinary & privileged invest units

4.85 10,000 10,000

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

9998 Annual Report

14-3- Pursuant to the directive adopted by the Money and Credit Council (Note 8-6), the amounts due from subsidiary and affiliated companies are classified as follows:

15- Other accounts receivable

2019

Current Overdue OutstandingDoubtful debts

Total


Due from subsidiaries 2,428,333 0 0 0 2,428,333

Due from affiliates 0 0 0 0 0

Net amounts due from subsidiaries and affiliates before deduction of doubtful debts provision

2,428,333 0 0 0 2,428,333

General provision for doubtful debts 0 0 0 0 0

Specific provision for doubtful debts 0 0 0 0 0

Balance at March 20, 2019 2,428,333 0 0 0 2,428,333

Balance at March 21, 2018 2,928,844 0 0 0 2,928,844

Group

2019 2018

Balance dueSpecific provision for doubtful debts

General provision for doubtful debts

Net Net


Dividends receivable 1,504,029 0 0 1,504,029 1,309,588

Interest accrued (realized) on participation bonds

0 0 0 0 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

Parent Company

Note 2019 2018

Balance dueSpecific provision for doubtful debts

General provision for doubtful debts

Net Net


Dividends receivable 15-1 1,307,774 0 0 1,307,774 1,301,604

Interest accrued (realized) on participation bonds

0 0 0 0 0


Temporary debtors 15-2 47,421,019 (154,051) (14,718) 47,252,250 39,058,177

48,728,793 (154,051) (14,718) 48,560,024 40,359,781

14-1- Considering the fact that the fiscal year of Group Companies will end on 21st December of each year (end of Azar based on the Iranian calendar year) namely three months earlier than the end of the bank’s fiscal 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 have not been therein made (in accordance with the accounting standards).

14-2- The balances of the parent company’s receivables from subsidiaries and affiliates based on the inter-group transactions consist of the following:

2019

Name of subsidiary/affiliateAssets and investments sold

Assets and investments purchased

Services purchased

Provisional amounts received (on-account)

Provisional amounts paid (on-account)

Dividends recievable


Dividends payable Total

Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m)

Saman Exchange Co. 0 0 5,564 0 5,086 0 241,150 0 251,800


0 0 0 0 1,764 0 204,485 0 206,249


0 19,227 0 0 12,835 0 0 0 32,062

Saman Brokerage Co. 0 0 0 0 3,030 0 58,440 0 61,469

Adonis Co. 0 0 0 0 0 0 0 0 0

Satelite Communication Co. 0 0 0 0 0 0 0 0 0

Atieh Andishan Sepehr Shargh

0 1,454,397 0 0 0 0 213,052 0 1,667,449

Atieh Andishan Sepehr Mehr

0 0 0 0 9,304 0 0 0 9,305


0 0 0 0 200,000 0 0 0 200,000

0 1,473,624 5,564 0 232,017 0 717,127 0 2,428,334

Net transactions profit (loss) 0

2018

Name of subsidiary/affiliateAssets and investments sold

Assets and investments purchased

Services purchased

Provisional amounts received (on-account)

Provisional amounts paid (on-account)



Dividends payable Total

Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m)

Saman Exchange Co. 0 0 5,564 0 5,080 0 331,879 0 342,523


0 0 0 0 26,144 0 71,365 0 97,509


0 62,423 0 0 172,583 0 31,500 0 266,506

Saman Brokerage Co. 0 0 0 0 1,785 0 5,765 0 7,549

Adonis Co. 0 0 0 0 0 0 0 0 0

Satelite Communication Co. 0 0 0 0 2,897 0 19,235 0 22,132

Atieh Andishan Sepehr Shargh

0 1,970,676 0 0 30 0 2,518 0 1,973,224


0 0 0 0 9,304 0 0 0 9,304


0 0 0 0 210,097 0 0 0 210,097

0 2,033,099 5,564 0 427,920 0 462,262 0 2,928,844

Net transactions profit (loss) 0

101100 Annual Report

15-2- Balances due by temporary debtors consist of the following:

15-3- Pursuant to the directive adopted by the Money and Credit Council (Note 8-6), other accounts receivable are classified as follows:

2019 2018

Rls(m) Rls(m)

Items related to loan facilities

Proceeding and debt collection costs 2,859,421 2,654,871

2,859,421 2,654,871

Items unrelated to loan facilities

Debtors for sale of assets 42,695,141 35,082,461

Debtors for sale of investments 238,634 751,000

Debtors for financial fraud (abuses) 0 0

Temporary debtors of forex 1,054,686 699,182

Other 573,137 39,432

44,561,598 36,572,075

47,421,019 39,226,946

2019

Current Overdue Outstanding Doubtful Total


Dividends receivable 1,307,774 0 0 0 1,307,774

Interest accrued (realized) on participation bonds 0 0 0 0 0


Temporary debtors 44,561,598 0 0 2,859,421 47,421,019

Net other accounts receivable before deduction of doubtful debts provision 45,869,372 0 0 2,859,421 48,728,794

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

15-1- The balances of dividends receivable excluding the dividends from subsidiaries and affiliates are as follows:

2019 2018

Rls(m) Rls(m)

Companies listed on the Stock Exchange and Farabourse (OTC)

Shomal Drilling Co. 11,019 22,038

Housing Investment Co. 4,090 4,090

Mines and Metals Development Co. 358 6,880

Barez Industrial Co. 0 2

Bahman Group 0 5,349

Tooka Foulad Investment 12,751 19,992

Sepah Investment Co. 0 8,800

Tooka Transport Co. 978 908

Rayan Saipa 28 28

Isfahan Mobarakeh Steel Mill 0 1,446

Mapna Group 1,623 1,180

Saman Insurance Co. 1,946 5

Iran Pump Manufacturing Co. 4,218 4,218

Hamedan Glass Works 12,242 12,242

Middle East Bank 0 20,231

Saman Kish Electronic Payment Co. 834,106 832,577

Kardan Investment Bank 414,109 352,856

Others 4,976 5,360

1,302,444 1,298,202

Other companies

Saman Aftab Tejarat 3,705 3,402

Iran Investment 1,625 0

5,330 3,402

1,307,774 1,301,604


18-

Tang

ible

fixe

d as

sets

Gro

up

Land

B

uild

ings

Inst

alla

tion

sEq

uipm

ent

Vehi

cles

Furn

itur

e an

d fi

xtur

es

Ren

ovat

ion

and

impr

ovem

ent

in le

ased

bu

ildin

gs

Ass

ets

in

proc

ess

of

com

plet

ion

Ord

ers

and

capi

tal

prep

aym

ents

Cap

ital

item

s in

sto

ckTo

tal

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Cos

t pri

ce

Bal

ance

at M

arch

21,

201

790

1,65

5 1,

188,

464

21,6

70

275,

337

111,

656

2,68

6,37

7 14

5,29

5 55

0,46

0 96

,090

11

4,85

6 6,

091,

860

Incr

ease

d du

ring

the

year

166,

759

191,

126

4,12

2 62

,883

0

170,

233

48,2

38

320,

033

76,8

97

257,

645

1,29

7,93

6

Incr

ease

(dec

reas

e) fr

om r

eval

uatio

n(2

36,8

74)

104,

783

0 0

0 0

0 0

0 0

(132

,091

)

Ass

ets

sold

(286

,354

) (4

64,9

85)

0 0

(453

) (1

95)

0 0

(8)

0 (7

51,9

95)

Tran

sfer

s an

d ot

her

chan

ges

0 14

,900

0

0 7,

252

0 (5

,731

) (1

21,3

13)

(75,

688)

(2

30,6

66)

(411

,246

)

Bal

ance

at M

arch

20,

201

854

5,18

8 1,

034,

288

25,7

92

338,

220

118,

455

2,85

6,41

5 18

7,80

2 74

9,18

0 97

,291

14

1,83

5 6,

094,

466

Incr

ease

d du

ring

the

year

1,79

1,51

4 1,

058,

212

221

3,77

3 8,

667

330,

216

119,

752

49,0

00

25,6

65

571,

102

3,95

8,12

2

Incr

ease

(dec

reas

e) fr

om r

eval

uatio

n(1

6,62

3)

(10,

198)

0

0 0

57

0 0

0 0

(26,

764)

Ass

ets

sold

(52,

105)

(2

5,27

6)

(5)

0 (3

68)

(26,

038)

0

(188

,250

) 0

0 (2

92,0

41)

Tran

sfer

s an

d ot

her

chan

ges

67,7

17

(259

,333

) 0

0 0

31

64,1

31

(412

,992

) (3

1,62

3)

(502

,121

) (1

,074

,190

)

Bal

ance

at M

arch

20,

201

92,

335,

691

1,79

7,69

4 26

,008

34

1,99

3 12

6,75

4 3,

160,

676

371,

685

196,

938

91,3

32

210,

816

8,65

9,59

4

Acc

umul

ated

dep

reci

atio

n an

d ac

cum

ulat

ed v

alue

impa

irm

ent

Bal

ance

at M

arch

21,

201

70

200,

247

12,7

03

91,2

88

53,5

45

1,46

9,54

1 12

2,40

0 1,

949,

724

Dep

reci

atio

n du

ring

the

year

and

val

ue

impa

irm

ent

0 37

,345

4,

579

31,2

16

15,1

62

414,

522

13,6

35

516,

458

Ass

ets

sold

0 (4

6,60

5)

0 0

519

(195

) 0

(46,

281)

Tran

sfer

s an

d ot

her

chan

ges

0 5,

757

0 0

0 0

0 5,

757

Bal

ance

at M

arch

20,

201

80

196,

744

17,2

82

122,

504

69,2

26

1,88

3,86

8 13

6,03

5 2,

425,

658

Dep

reci

atio

n du

ring

the

year

and

val

ue

impa

irm

ent

66,9

20

5,31

4 11

,958

16

,095

73

9,61

6 17

,777

85

7,68

1

Ass

ets

sold

(3,4

69)

(5)

0 (3

68)

(25,

030)

0

(28,

872)

Tran

sfer

s an

d ot

her

chan

ges

0 0

0 22

0 0

(220

) 0

0

Bal

ance

at M

arch

20,

201

90

260,

195

22,5

91

134,

684

84,9

53

2,59

8,23

4 15

3,81

3 3,

254,

468

Boo

k va

lue

At M

arch

21,

201

790

1,65

5 98

8,21

7 8,

967

184,

049

58,1

12

1,21

6,83

6 22

,895

55

0,46

0 96

,090

11

4,85

6 4,

142,

136

At M

arch

20,

201

854

5,18

8 83

7,54

4 8,

511

215,

715

49,2

30

972,

547

51,7

67

749,

180

97,2

91

141,

835

3,66

8,80

7

At M

arch

20,

201

92,

335,

691

1,53

7,49

9 3,

417

207,

309

41,8

01

562,

442

217,

873

196,

938

91,3

32

210,

816

5,40

5,11

8 16- Orders and prepayments

17- Inventory (materials and goods)

17-1- The inventory of goods and spare parts owned by the Group has been put under insurance coverage up to the amount of Rls. 165,000/- million against possible risks and accidents resulting from fire, flood and earthquake.

Group

2019 2018

Rls(m) Rls(m)

Prepayments 48,705 40,532

Orders 1,478 23,296

50,183 63,828

Group

2019 2018

Rls(m) Rls(m)

Inventory in stock 394,544 220,773

Ongoing projects (in the process of completion) 3,683 35,037

398,227 255,810


18-1- The book value of revaluated land and buildings on the cost price basis is described as follows:

18-2- All tangible fixed assets owned by the bank have been insured up to the amount of Rls. 5,553,493/- million 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 the amount of Rls. 3,209,169/- million against possible risks and accidents resulting from fire, flood and earthquake.

2019 2018

Based on cost price Based on revaluation Based on cost price Based on revaluation


Land 841,500 2,206,239.56 860,696 415,738

Buildings 1,017,136 961,411 702,053 777,578

1,858,636 3,167,651 1,562,749 1,193,316

Par

ent C

ompa

ny

Land

B

uild

ings

Inst

alla

tion

sVe

hicl

esFu

rnit

ure

and

fixt

ures

Ren

ovat

ion

and

impr

ovem

ent

in le

ased

bu

ildin

gs

Ass

ets

in

proc

ess

of

com

plet

ion

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ers

and

capi

tal

prep

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ents

Cap

ital

item

s in

sto

ckTo

tal

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Cos

t pri

ce

Bal

ance

at M

arch

21,

201

779

4,39

6 93

9,71

0 21

,670

10

0,00

7 2,

623,

254

145,

295

447,

555

90,2

72

115,

098

5,27

7,25

6

Incr

ease

d du

ring

the

year

144,

570

183,

170

4,12

2 0

164,

418

48,2

38

275,

000

4,97

9 25

7,64

5 1,

082,

143

Incr

ease

(dec

reas

e) fr

om r

eval

uatio

n(2

36,8

74)

104,

783

0 0

0 0

0 0

0 (1

32,0

91)

Ass

ets

sold

(286

,354

) (4

64,9

85)

0 (3

28)

(195

) 0

0 (8

) 0

(751

,869

)

Tran

sfer

s an

d ot

her

chan

ges

0 14

,900

0

7,25

2 0

(5,7

31)

(121

,313

) (7

5,68

8)

(230

,666

) (4

11,2

46)

Bal

ance

at M

arch

20,

201

841

5,73

9 77

7,57

8 25

,792

10

6,93

1 2,

787,

478

187,

802

601,

242

19,5

55

142,

077

5,06

4,19

4

Incr

ease

d du

ring

the

year

1,79

1,51

4 47

5,51

8 11

1 6,

403

325,

375

119,

752

49,0

00

23,9

42

571,

103

3,36

2,71

7

Incr

ease

(dec

reas

e) fr

om r

eval

uatio

n(1

6,62

3)

(10,

198)

0

0 0

0 0

0 0

(26,

821)

Ass

ets

sold

(52,

105)

(2

3,88

8)

(5)

(368

) (2

5,97

4)

0 (1

88,2

50)

0 0

(290

,589

)

Tran

sfer

s an

d ot

her

chan

ges

67,7

17

(257

,599

) 0

0 0

64,1

31

(412

,992

) (3

1,62

3)

(502

,121

) (1

,072

,487

)

Bal

ance

at M

arch

20,

201

92,

206,

242

961,

412

25,8

98

112,

967

3,08

6,87

9 37

1,68

5 49

,000

11

,873

21

1,05

9 7,

037,

014

Acc

umul

ated

dep

reci

atio

n an

d ac

cum

ulat

ed v

alue

im

pair

men

t

Bal

ance

at M

arch

21,

201

70

44,6

14

12,7

03

49,2

04

1,43

5,29

9 12

2,40

0 1,

664,

220

Dep

reci

atio

n du

ring

the

year

and

val

ue im

pair

men

t 0

32,6

43

4,57

9 15

,162

40

8,45

7 13

,635

47

4,47

6

Ass

ets

sold

0 (4

6,60

5)

0 (3

28)

(195

) 0

(47,

127)

Tran

sfer

s an

d ot

her

chan

ges

0 0

0 0

0 0

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Group

Goodwill for place of business

SoftwareSoftware development

Royalty to use public utilities

Total


Cost price

Balance at March 21, 2017 4,203,368 188,850 15,957 37,270 4,445,444

Increased during the year 317,516 147,618 0 525 465,659

In-company development plan 0 0 0 0 0

Increase (decrease) from revaluation (760,086) 0 0 0 (760,086)

Assets sold (1,738,482) 0 0 0 (1,738,482)

Transfers and other changes 0 (48,098) 0 (22) (48,121)

Balance at March 20, 2018 2,022,316 288,370 15,957 37,773 2,364,415

Balance at March 21, 2018 2,022,316 288,370 15,957 37,773 2,364,415

Increased during the year 2,484,391 481,261 2,425 744 2,968,821



Assets sold (49,298) 0 0 0 (49,298)

Transfers and other changes 0 (1,095) 0 0 (1,095)

Balance at March 20, 2019 4,450,813 768,536 18,382 38,517 5,276,247

Accumulated depreciation and accumulated value impairment

Balance at March 21, 2017 0 (133,810) 0 (15,030) (148,840)

Depreciation during the year 0 (50,097) 0 (147) (50,244)

Value impairment loss 0 0 0 0 0

Assets sold 0 0 0 0 0

Transfers and other changes 0 16,188 0 0 16,188

Balance at March 20, 2018 0 (167,719) 0 (15,177) (182,896)

Balance at March 21, 2018 0 (182,450) (5,062) 8,719 (178,794)

Depreciation during the year 0 (159,704) (4) 0 (159,708)


Assets sold 0 (77) 0 0 (77)

Transfers and other changes 0 0 (66) 0 (66)

Balance at March 20, 2019 0 (350,951) (5,133) 8,719 (338,645)

Book value

At March 21, 2017 4,203,368 55,040 15,957 22,240 4,296,604

At March 20, 2018 2,022,316 120,651 15,957 22,595 2,181,127

At March 20, 2019 4,450,813 417,585 13,249 47,236 4,928,883

Parent Company

Goodwill for place of business

SoftwareSoftware development

Royalty to use public utilities

Total


Cost price

Balance at March 21, 2017 4,203,368 193,263 0 21,548 4,418,179

Increased during the year 317,516 147,619 0 525 465,660



Assets sold (1,738,482) 0 0 0 (1,738,482)

Transfers and other changes 0 (1,821) 0 (22) (1,843)

Balance at March 20, 2018 2,022,316 339,061 0 22,051 2,383,427

Balance at March 21, 2018 2,022,316 339,061 0 22,051 2,383,427

Increased during the year 2,435,402 475,473 0 488 2,911,365



Assets sold (49,313) 0 0 0 (49,313)

Transfers and other changes 0 0 0 0 0

Balance at March 20, 2019 4,401,824 814,534 0 22,539 5,238,897

Accumulated depreciation and accumulated value impairment

Balance at March 21, 2017 0 (116,989) 0 0 (116,989)

Depreciation during the year 0 (50,097) 0 0 (50,097)




Balance at March 20, 2018 0 (167,086) 0 0 (167,086)

Balance at March 21, 2018 0 (167,086) 0 0 (167,086)

Depreciation during the year 0 (119,482) 0 0 (119,482)




Balance at March 20, 2019 0 (286,568) 0 0 (286,568)

Book value

At March 21, 2017 4,203,368 193,263 0 21,548 4,418,179

At March 20, 2018 2,022,316 171,975 0 22,051 2,216,341

At March 20, 2019 4,401,824 527,966 0 22,539 4,952,329

19- Intangible assets


21-1- Customers’ net debts for term LCs

21-2- Foreclosed collaterals/properties

The composition of the foreclosed collaterals balance breaks down as follows:

21-2-1- The age of the balance of immovable foreclosed collaterals breaks down as follows:

2019 2018

Rls(m) Rls(m)

Customers' debts for term LCs (Rial) 13,585 7,290

Customers' debts for term LCs (Forex) 319,503 2,127,749

333,088 2,135,039

Less:

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

307,802 1,858,727

2018 Foreclosed during

the year Sold/transferred during the year

2019


Movable properties

Furniture 0 0 0 0

Equipment 0 0 0 0

Goods 0 0 0 0

Motor vehicles 0 0 0 0

0 0 0 0

Immovable properties

Residential properties 7,139,787 1,408,125 (1,269,171) 7,278,741

Business/Offiice properties 11,237,317 3,294,435 (3,840,072) 10,691,679

Factory/plant 4,679,958 57,898 (486,771) 4,251,085

Land 2,675,855 513,294 (58,642) 3,130,507

25,732,917 5,273,752 (5,654,656) 25,352,012

25,732,917 5,273,752 (5,654,656) 25,352,012

Accumulated value impairement 0 0

25,732,917 25,352,012

Profit (loss) from sales 7,398,403 7,415,496

2019 2018

Rls(m) Rls(m)

Less than a year from the foreclosure date 1,875,274 10,428,417.34

One year or two years from the foreclosure date 8,282,672 3,986,573

Over two years from the foreclosure date 15,194,066 11,317,927

25,352,012 25,732,917

19-1- The book value of the revaluated goodwill for place of business on the cost price basis is described as follows:

20-1- The statutory deposits placed with the Central Bank of of Iran (CBI) pursuant to paragraph 3 of article 14 of the Monetary and Banking Law has been calculated on the basis of the rates determined by the Money and Credit Council and approved by the Central Bank of of Iran (CBI).

21- Other assets

20- Statutory deposit

2019 2018

Based on cost price Based on revaluation Based on cost price Based on revaluation


Goodwill for place of business 1,296,995 4,401,824 1,301,612 2,022,316

1,296,995 4,401,824 1,301,612 2,022,316

2019 2018

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

Statutory deposit - deposits of free zones branches (Rial) 187,380 216,169

Statutory deposit - deposits of free zones branches (Forex) 0 0

Statutory deposit placed with central banks of other countries (Forex) 0 0

35,798,262 27,478,565


Note 2019 2018 2019 2018


Customers' net debts for term LCs 21-1 307,802 1,858,727 307,802 1,858,727

Non-operating real estates 0 0 0 0

Foreclosed collaterals 21-2 25,161,015 25,661,993 25,352,012 25,732,917

Advance deposits for leased buildings 2,065,196 1,570,989 2,065,196 1,570,990

Assets insurance prepayment 0 0 0 0

Prepayment for leased branches 12,016 29,707 12,016 29,707

Inventory of supplies 0 0 0 0

Items in transit 0 0 0 0

Gold and silver 0 0

Tax stamp 2,598 3,019 2,598 3,019

Tax prepayment 8,067 7,070 0 0

Other prepayments 701,701 0 701,701 0

Consolidated goodwill 21-3 42,997 51,104 0 0

Payment for new asquisition 1,449,445 2,474,233 1,449,445 2,474,233

Other 21-4 8,756,172 3,790,869 8,865,008 3,783,328

38,507,009 35,447,711 38,755,778 35,452,920

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).


22-1- This amount represents the difference in settlement time via the Shetab Payment System in Saman Bank and the CBI (cut-off period).

23- Customers’ deposits

23-1- Demand deposits and similar deposits for natural and legal customers

23-2- Savings deposits and similar deposits – for real and legal persons


Note 2019 2018 2019 2018


Real persons

Demand deposits and similar deposits 23-1 5,721,951 3,845,821 7,635,752 5,721,951

Savings deposits and similar deposits 23-2 2,903,702 620,481 10,802,441 2,903,702

Other deposits and advance payments 23-3 48,855 52,989 63,233 48,855

8,674,508 4,519,291 18,501,426 8,674,508

Legal persons

Demand deposits and similar deposits 23-1 35,833,867 11,024,790 33,237,789 9,085,582

Savings deposits and similar deposits 23-2 15,817,482 7,984,186 7,924,703 5,704,018

Other deposits and advance payments 23-3 5,877,612 2,926,936 5,868,096 2,935,225

57,528,961 21,935,912 47,030,588 17,724,825

66,203,469 26,455,203 65,532,014 26,399,333


2019 2018 2019 2018


Gharzolhassaneh (interest-free) deposits (Rial) 18,835,267 9,030,397 18,996,731 9,069,296

Gharzolhassaneh (interest-free) deposits (Forex) 70,214 106,913 70,214 106,913

Various bank checks sold 1,122,636 1,126,844 1,122,636 1,126,844

Customers' account with overseas branches 0 0 0 0

Unclaimed balances (Rial) 0 0 0 0

Unclaimed balances (Forex) 808,080 501,927 808,080 501,927

Interim credit accounts (temporary creditors) (Rial) 19,871 10,313 19,871 10,313

Interim credit accounts (temporary creditors) (Forex) 0 0 0 0

Drafts drawn on the bank (Rial) 2,380,538 1,604,221 1,536,797 1,502,243

Drafts drawn on the bank (Forex) 18,255,709 2,448,555 18,255,709 2,448,555

Unused managed cash (Rial) 88,961 67,290 88,961 67,290

Unused managed cash (Forex) 5,915 5,513 5,915 5,514

Less:

Account for the bank's checks sold (unsettled) (31,373) (31,362) (31,373) (31,362)

41,555,818 14,870,611 40,873,541 14,807,533


2019 2018 2019 2018


Gharzolhassaneh (interest-free) deposits (Rial) 8,950,900 6,396,159 8,956,859 6,399,213

Gharzolhassaneh (interest-free) deposits (Forex) 9,770,276 2,208,502 9,770,276 2,208,502

Savings deposits - overseas branches 0 0 0 0

Gharzolhassaneh (interest-free) deposits- for young people

0 0 0 0

Special unused Gharzolhassaneh (interest-free) deposits 8 6 9 5

Personnel savings account 0 0 0 0

Personnel pension fund 0 0 0 0

Savings deposits for housing project 0 0 0 0

18,721,184 8,604,667 18,727,144 8,607,720

21-3- Goodwill

Details of goodwill from the consolidated statements under note (8-11 of significant accounting policies) are as follows:

21-4- If the balance of items in transit remains in credit, it shall be reflected in the note to other liabilities.

22- Due to banks and other credit institutions

• The investment deposits received from foreign and local banks in rial and foreign currency are classified like other investment deposits in the section of “investment depositors’ equity” with a view to maturities.


Note 2019 2018 2019 2018


Central Bank of Iran (CBI)

Deposit (Rial) 0 0 0 0

Term deposits (Forex) 82,297,512 36,713 82,297,512 36,713

Demand deposits (Forex) 0 1,837,145 0 1,837,145

Debt for differences in foreign exchange rates 0 0 0 0

Debt for foreign exchange reserves account 2,810,340 2,810,340 2,810,340 2,810,340

Facilities received (Rial) 0 0 0 0

Facilities received (Forex) 0 0 0 0

Debit balance of current account for overdraft 0 0 0 0

Other 0 0 0 0

85,107,852 4,684,198 85,107,852 4,684,198

Local banks and credit institutions:

Demand deposits (Rial) 377 2,751 377 2,751

Demand deposits (Forex) 4,186,536 571,445 4,186,536 571,445

Payment of checks issued by other banks 0 0 0 0

Facilities received (Rial) 381,297 200,894 0 0


Other 22-1 2,601,448 3,106,991 2,601,448 3,106,991

7,169,658 3,882,081 6,788,361 3,681,187

Foreign banks:

Demand deposits (Rial) 0 0 0 0

Demand deposits (Forex) 797 648,929 797 648,929


Debit balance of current account for overdraft 0 0 0 0

Other 0 0 0 0

797 648,929 797 648,929

92,278,307 9,215,208 91,897,010 9,014,314

Group

2019 2018

Rls(m) Rls(m)

Cost at the beginning of the year 84,467 70,974

Goodwill acquired during the year 0 13,493

Adjusted goodwill from sale 2 0

Cost at year-end 84,469 84,467

Accumulated depreciation at the beginning of the year (33,364) (25,256)

Depreciation during the year (8,108) (8,108)

Adjustment of accumulated depreciation from sale 0 0

Accumulated depreciation at year-end (41,472) (33,364)

Book value 42,997 51,104


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 paid for the years 2016, 2017, 2018 and 2019 is as follows:

26-2- The finalized amount of tax for the year 2016 has been settled and the corporation tax is being paid on installment plan. Furfur the Tax Affairs Authority has confirmed payment of Rls. 788,547 million for the year 2017.

26-2-1- For the year 2018, the amount of Rls. 953,288 million has been demanded as corporation tax and the amount of Rls. 402,005 million as transfer tax against which the bank has made an appeal and the case is now pending by the Tax Dispute Settlement Panel. Furthermore, the amount of Rls. 3,768,034 million has been demanded as corporation tax for the year ended March, 20, 2018 under paragraphs B and C of the Law for Elimination of Barriers to Competitive Products against which the bank has made an appeal and the case is now pending by the Tax Dispute Settlement Panel.

27- Provisions and other liabilities

1. It means the amounts paid to the Ministry of Economic Affairs and Finance.

2019 2018

Fiscal yearProfit (loss) declared

Taxable income

TaxProvision balance

Method of tax assessmentTax

declaredTax assesed

Finalized Paid1 Provision balance


2016 102,751 2,612,268 0 653,067 615,750 550,270 0 0 Under appeal pending at the Tax Dispute Settlement Board.

2017 84,671 (788,547) 0 0 0 0 0 0

2018 1,018,366 3,813,151 953,288 0 0

2019 5,143,292 0 0

Tax prepayments

0 0

0 0


2019 2018 2019 2018


Facilities received from National Development Fund 0 0 0 0

Due for term letters of credit (Rial) 1,233 16,685 1,233 16,685

Due for term letters of credit (Forex) 166,335 2,821,381 166,335 2,821,381

Interests and fees payable 0 0 0 0

Insurance payable 0 0 8,626 6,930

Withholding taxes payable 44,145 26,711 8,597 7,387

Notes payable 271,501 8,624 0 0

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

Interbranch accounts 974,720 493,899 974,720 493,899

Due to persons/entities 0 668,046 0 668,046

Due to persons/entities- sale of real estate in Qeshm 0 76,049 0 76,049

Accounts payable 2,158,475 0 2,158,474 0

Other debts 9,298,608 2,381,961 4,829,615 1,014,271

13,698,716 10,062,738 8,692,291 8,469,046

23-3- Other deposits and advance payments

24-1- A summary turnover of the said account in the parent company is as follows:

24- Dividends payable

25- Advance payments

26- Provision for corporation tax


2019 2018 2019 2018


Cash deposits for LGs (Rial) 1,357,464 846,507 1,362,327 850,662Cash deposits for LGs (Forex) 3,716 5,163 3,716 5,163Advance received for LCs (Rial) 2,846,879 429,080 2,846,879 429,080Advance received for LCs (Forex) 1,687,873 1,687,789 1,687,873 1,687,789Other 30,535 11,386 30,535 11,386

5,926,467 2,979,925 5,931,330 2,984,080


2019 2018 2019 2018


Balance from prior years 26,317 62,283 51,510 52,483 Dividends approved 109,271 363,383 0 0 Dividends paid (10,755) (399,350) 0 (973)

124,833 26,316 51,510 51,510

Cash dividend per

share

Approveddividend

Balance at March 20,

2017

Dividend paid during 2017-2018

Capital increase from accrued

dividends

Balance at March 20,

2019


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 Fiscal year ended March 2, 2018 0 0 0 0 0 0

5,181,640 51,510 0 0 51,510

Group

2019 2018

Rls(m) Rls(m)

Advance received 88,192 58,508

88,192 58,508


2019 2018 2019 2018


Balance at the beginning of the year 72,727 88,841 0 0Tax provision for the year 140,588 101,805 0 0Prior years' tax adjustments 0 0 0 0Tax paid during the year (11,549) (43,511) 0 0Consolidated adjustments 0 0.0 0 0

201,766 147,135 0 0Tax prepayments 0 0 0 0Balance at the year-end 201,766 147,135 0 0


29- Investment depositors’ equity

29-1-The term investment deposits by a breakdown of rial and foreign currency


Note 2019 2018 2019 2018


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

Investment deposits received from banks and credit institutions 29-1 953,682 1,619,283 953,683 1,619,283

295,431,428 251,011,213 297,164,432 252,217,319

Interest payable on term investment deposits

Long-term investment deposits 29-2 1,577,315 1,778,618 1,577,315 1,778,618

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

1,611,530 2,164,935 1,611,530 2,164,934

297,042,957 253,176,148 298,775,962 254,382,253

2019 2018

Rial Forex Total Rial Forex Total


Investment deposits received from banks and credit institutions

43 953,638 953,681 118 1,619,165 1,619,283

Ordinary short-term investment deposits 123,376,754 20,245,217 143,621,971 80,643,453 23,740,765 104,384,218

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

Long-term investment deposits

General certificates of deposit 0 0 0 0 0 0

Special certificates of deposit 0 0 0 0 0 0

One-year term 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

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.

• 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.

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29-1-3- Turnover of investment deposits in Forex

Balance at March20, 2018

Deposits takenduring the year

Repayment ofdeposits

Balance at March 20, 2019



Amount in Forex Amount in Forex Amount in Forex Amount in Forex Amount in Rial Amount in Rial

Rls(m) Rls(m)

Long-term deposits

US Dollar 0 0 0 0 0 0

Euro 0 0 0 0 0 0

UAE Dirham 0 0 0 0 0 0

0 0 0 0 0 0

Special and ordinary 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

Euro 411,947,233.47 60,009,273.23 141,909,973.96 330,046,532.37 15,729,358 19,052,148

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

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

Swiss Franc 879,024.15 99,832.80 973,852.80 5,004.15 210 34,745

Turkish Lira 1,222,132.07 146,463,345.79 145,174,294.29 2,511,183.57 19,296 11,743

Chinese Yuan 1,000.37 3,184,493.83 3,184,493.83 1,000.37 6 6

Russian Rouble 3,522,810.04 96,828,828.43 93,221,388.64 7,130,249.83 4,656 2,314

Omani Rial 4,000.00 0.00 2,391.43 1,608.57 177 392

Qatari Rial 200,000.00 0.00 200,000.00 0.00 0 2,071


US Dollar 0.00 0.00 0.00 0.00 0 0

Euro 35,005,135.93 20,000,000.00 35,000,000.00 20,005,135.93 953,405 1,618,953

UAE Dirham 13,930.00 0.00 0.00 13,930.00 159 143

UK Pound 1,326.25 0.00 0.00 1,326.25 74 70

Korean WON 0.00 0.00 0.00 0.00 0 0

21,198,855 25,359,930

29-1-1- The long-term investment deposits in terms of maturity and interest rate

29-1-2- Turnover of investment deposits in Rial

2019 2018

More than 22%

19 to 22% 16 to 19 % 13 to 16% 10 to 13% 10% and less Total Total


Matured 0 5,712 192 1,197 0 0 7,101 7,196

2018 0 7,405 11,736 21,279 0 0 40,420 16,622

2019 13,551,642 59,473,357 58,573,174 18,676,738 0 0 150,274,911 132,068,268

2020 8,477 144,923 320,791 1,628,201 0 0 2,102,392 10,993,415

2021 0 0 4,852 47,941 0 0 52,793 128,488

2022 and onward

0 0 7,490 41,563 0 0 49,053 115,918

13,560,119 59,631,397 58,918,235 20,416,919 0 0 152,526,670 143,329,907

March ,20 2017 13,343,342 91,581,495 6,799,706 31,605,177 0 186 143,329,907


Deposits takenduring the year

Repayment ofdeposits



General certificates of deposit 0 0 0 0

Special certificates of deposit 0 0 0 0

One-year term 133,286,131 120,401,944 102,460,130 151,227,945

Two-year term 3,529 0 708 2,821

Three-year term 1,546 0 1,546 0

Four-year term 54,496 354 23,735 31,114

Five-year term 9,984,206 3,805 8,723,219 1,264,792

Ordinary short-term investment deposits 80,643,453 72,346,310 29,613,008 123,376,754

Special short-term investment deposits 2,883,910 121,094 2,942,896 62,108


118 0 75 43

226,857,389 192,873,507 143,765,317 275,965,577


29-2- Interests payable on term investment deposits are as follows:

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.

Group

Balance atMarch 20 ,2018

Provisional interest during the year

Difference in provisional and final interest

Interest paid during the year



Ordinary short-term deposits 354,444 8,803,987 0 (9,136,945) 21,486

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 25,954,825 0 (26,421,043) 155,433

Two-years term deposits 144 0 0 0 143

Three-years term deposits 118 0 0 0 118

Four-years term deposits 18 7,609 0 (7,609) 18

Five-years term deposits 1,154,086 1,207,575 0 (942,659) 1,419,002


0 17,249 0 (17,249) 0

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 interest during the year

Difference in provisional and final interest

Interest paid during the year



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


0 17,249 0 (17,249) 0

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

29-1-4- The composition of depositors of investment deposits breaks down as follows:

March 20, 2019 March 20, 2018

Number Amount Number Amount

depositor Rls(m) depositor Rls(m)

Deposits in rial

Legal persons 16,332 72,322,110 14,744 40,449,216

Real persons 2,184,496 203,643,425 2,034,515 186,408,055

Investment deposits received from banksand credit institutions

1 42 3 118

2,200,829 275,965,577 2,049,262 226,857,389

Deposits in foreign currency

Legal persons 976 13,018,051 878 15,443,539

Real persons 32,313 7,227,166 37,372 8,297,225

Investment deposits received from banksand credit institutions

2 953,638 3 1,619,166

33,291 21,198,855 38,253 25,359,930

2,234,120 297,164,432 2,087,515 252,217,319


31-1- Subject to the provisions of paragraph A of article 33 of the Monetary and Banking Law and paragraph B of article 58 of the articles of association, the legal reserve in the parent company is equivalent to 15% and subject to the provisions of articles 140 and 238 of the Commercial Code Amendment ratified on March 14, 1969, the legal reserve in the subsidiaries is 5% which will be deducted from relevant distributable profit and then transferred to the legal reserve account. In accordance with the said articles, such transfer to the legal reserve account is mandatory until when the balance of legal reserve in the bank reaches the amount of the bank’s capital and in the subsidiaries up to 10% of the same company’s capital and afterwards this process shall remain to be voluntary. The legal reserve will not be transferable to capital 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:

31- Legal reserve


2019 2018 2019 2018


Balance at the beginning of the year 1,733,012 1,578,061 1,689,324 1,536,569

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

Group

2019 2018

Rls(m) Rls(m)

Parent campany

Saman Bank 2,460,819 1,689,324

Subsidiary companies

Saman Exchange Co. 33,525 32,945

Saman Brokerage Co. 3,185 2,388

Saman Processing (Pardazeshgaran) 3,498 2,725

Iranian Hafez Saman Credit Bureau and Scoring Co. 3,947 4,157

Atiyeh Andishan Sepehr Shargh 481 481

Atiyeh Andishan Sepehr Mehr 230 191

Tondar Noor 191 191

Atieh Andishan Sepehr Shargh-Services Development Co. 2,000 0

Consolidated adjustments 0 0

2,507,876 1,732,402

30- Share CapitalThe 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/- million shares at nominal value of 1,000 rials each) at the end of the fiscal year ended March 20, 2016 as described below:

30-1- The composition of shareholders as at the balance sheet date was as follows:

Date of capitalincrease

Capital IncreasePercentage

Amount of capitalincrease

New capitalSource of

capital Increase

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

March 7, 2005 100 300,000 600,000 Accrued dividends due and cash contribution

November 16, 2005 25 150,000 750,000 Accrued dividends due and cash contribution

October 8, 2006 20 150,000 900,000 Accrued dividends due and cash contribution

January 12, 2010 100 900,000 1,800,000Accrued dividends due, cash contribution and waiver of rights issue

March 19, 2011 66.7 1,200,000 3,000,000 Accrued dividends due and cash contribution

March 19, 2012 33.3 1,000,000 4,000,000 Shareholders’ cash contribution

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

March 20, 2019 March 20, 2018

Number of shares

Percentage of shares

Number of shares

Percentage of shares

One percent and more

Staff Pension Fund of Foulad (Steel) Co. 400,088,117 5 400,088,117 5

Staff Pension Fund of Iranian Copper Co. 0 0 624,530,308 7.81

Mines and Metals Investment Development Co. 323,686,501 4.05 323,686,501 4.05

Mohammad Zarrabieh 305,266,280 3.82 315,266,280 3.94

Havva Chaie Dekhoie 214,211,112 2.68 214,211,112 2.68

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

Seyyed Mehdi Ghafouri 181,316,669 2.27 181,316,669 2.27

Seyyed Ahmad Akhavan Dastmalchi 0 0 166,800,291 2.09

Ahmad Reza Zarrabieh 123,349,619 1.54 128,349,619 1.60

Iran Pump Manufacturing Industries 147,330,232 1.84 147,330,232 1.84

Iran and Gharb Co. (Private JS) 88,975,787 1.11 79,853,088 1

Others (less than %1)

Legal persons (71 shareholders) 1,063,932,852 13.30 1,149,338,425 14.36

Natural persons (8,280 shareholders) 3,871,152,471 48.38 3,583,405,477 44.79

8,000,000,000 100 8,000,000,000 100

32- Other reserves

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.

Group

2019 2018

Rls(m) Rls(m)

Balance at the beginning of the year 0 0

Decrease 0 0

Transferred from retained profit 3,528,218 0

Balance at the year end 3,528,218 0


35

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34- Minority interest

35- Incomes from loans granted and placements in other banks and debt securities

2019 2018

Rls(m) Rls(m)

Share of capital 124,875 123,674

Share of legal reserve 11,426 10,378

Share of retained earnings 41,667 33,252

177,968 167,304

Group

2019 2018

Note Profit-sharingNon- profit-sharing

Total Profit-sharingNon- profit-sharing

Total


Income earned from loans granted

35-1 23,468,888 963,059 24,431,947 17,876,458 321,712 18,198,169

Income earned from placements in other banks and debt securities

35-2 1,831,412 361,824 2,193,236 1,073,527 300,129 1,373,655

Total incomes earned from loans granted and placements in other banks

25,300,300 1,324,883 26,625,183 18,949,985 621,840 19,571,824

Parent Company

2019 2018

Note Profit-sharingNon- profit-sharing

Total Profit-sharingNon- profit-sharing

Total


Income earned from loans granted

35-1 23,500,798 963,059 24,463,857 17,902,175 321,712 18,223,887

Income earned from placements in other banks and debt securities

35-2 1,831,412 347,268 2,178,680 1,073,527 282,466 1,355,993

Total incomes earned from loans granted and placements in other banks

25,332,210 1,310,327 26,642,537 18,975,702 604,177 19,579,880

33- Assets revaluation reserve

2019 2018

Assets revaluation amount

Transferred, amortized and retired/Capital increase

Assets revaluation balance

Assets revaluation balance


March 20, 2012 2,588,675 (2,588,000) 675 675

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

4,095,148 (3,513,579) 581,569 614,971


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31

0 76

,897

76

,897

0

76,8

97

Late

pay

men

t pen

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for

debt

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of L

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0 15

8,90

1 15

8,90

1 0

158,

901

0 10

,818

10

,818

0

10,8

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0 0

0 0

0 0

0 0

0

23,5

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98

410,

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23,9

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24,4

63,8

57

17,9

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75

259,

570

18,1

61,7

45

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42

18,2

23,8

87


36-1- Dividends from companies and units of mutual funds in the parent company break down as follows:

2019 2018

Rial (profit-sharing)

Forex (Non- profit-sharing) Total




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)

Saman Brokerage Co. 52,675 0 52,675 5,765 0 5,765

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

Iran Credit Rating Co. 9,632 0 9,632 5,458 0 5,458

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

Saman Financial and EconomicDevelopment Group

49,800 0 49,800 160,752 0 160,752

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

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

Iran Pump Manufacturing Co. 0 0 0 1,368 0 1,368

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

Kardan Investment Bank 98,000 0 98,000 396,876 0 396,876

Iran Khodro 0 0 0 47 0 47

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

Tooka Transport Co. 70 0 70 908 0 908

Rayan Saipa 0 0 0 0 0 0

Iran Khodro Investment Co. 0 0 0 35 0 35

Isfahan Mubarakeh Steel Co. 0 0 0 1,446 0 1,446

Bahman Group 581 0 581 2,984 0 2,984

Mapna Group 443 0 443 1,180 0 1,180

Iranian Leasing Co. 154 0 154 4,727 0 4,727

Passargad Bank 0 0 0 0 0 0

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

Gharb Cement Co. 0 0 0 0 0 0

Sahand Tire 0 0 0 0 0 0

Iran Khak Chini 0 0 0 0 0 0

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 36-

Net

pro

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Pro

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431,

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824,

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0 82

4,99

8 75

9,60

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759,

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Pro

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36-2

316,

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0 4,

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6,61

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Net

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5,35

8,72

0 0

5,35

8,72

0 7,

414,

572

0 7,

414,

572

5,66

4,47

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5,66

4,47

2 7,

838,

581

0 7,

838,

581


36-2- Profit (loss) from sales of companies’ shares and units of mutual funds in the parent company:

2019 2018

Number of shares

Net sale value Book value Profit (loss) Profit (loss)

Profit (loss) from sales of companies' shares (Rial)(profit-sharing)

Share Rls(m) Rls(m) Rls(m) Rls(m)

Iranian National Copper Industries 240,000 633 624 10 1,400

Mines and Metals Investment Development Co. 8,751,300 20,656 20,949 (293) (221)

Data Gostar Asr Novin 0 0 0 0 6

Isfahan Mubarakeh Steel Co. 12,956,434 50,106 49,321 785 7,411

Iran Construction Investment Co. 0 0 0 0 (9,424)

Iran Telecommunication Co. 0 0 0 0 (3)

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)

Gole Gohar 1,979,402 8,023 7,974 49 1,761

Gole Gohar-righst issue 395,880 723 724 (2) 0

Iran Khodro 0 0 0 0 (1,203)

Bank Mellat 0 0 0 0 (6,566)

Shahed Investment Co. 0 0 0 0 0

Iranian Leasing Co. 1,029,258 1,267 1,339 (72) (10,004)

Informatic Services Co. 0 0 0 0 568

Sina Bank 0 0 0 0 (13,948)

Saderat Bank 11,600,000 7,145 7,141 4 0

Esfahan Steel Mill 10,000,000 12,756 11,708 1,047 0

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

Khuzestan Steel Co. 0 0 0 0 183

Omid Investment Co. 0 0 0 0 369

Alborz Insurance Co. 0 0 0 0 0

Tooka Foolad Investment Co. 22,588,287 23,559 28,505 (4,945) (7,967)

Tooka Foolad Investment Co. - rights issue 0 0 0 0 0

Tehran Oil Refinery 0 0 0 0 101

Bahman Group 2,903,447 2,382 2,991 (609) (3,365)

Sahand Tire 0 0 0 0 0

Kharazmi Investment Co. 2 0 0 () (15,143)

Taamin Oil, Gas and Petrochemical Investment Co. 8,768,825 13,576 14,423 (848) 419

Shazand Petrochemical Co. 0 0 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

Iran Khodro Investment Development 0 0 0 0 (859)

TakinCo. Corrosion Control 2,400,000 25,975 21,919 4,056 (243)

Oil Industry Investment Co. 0 0 0 0 (778)

Tecnotar 0 0 0 0 0

Mellat Leasing Co. 100,000 175 157 18 0

Shiraz Petrochemical - Urea Future Bond 0 0 0 0 3,206

Ghadir Investment Co. 11,639,294 14,846 15,145 (299) (289)

Ansar Bank 5,703 12 11 0 0

Talise 0 0 0 0 267

A.S.P. 0 0 0 0 (389)

Kerman Civil Development Co. 1,072,658 5,205 5,145 61 1,612

Jam Petrochemical Co. 0 0 0 0 637

Sarcheshmeh Copper Co. 15,306,403 70,754 69,603 1,151 0

Sarcheshmeh Copper Co.-rights issue 700,000 1,970 2,182 (211) 0

Tamin Maseh Rikhtegari 2,759,838 10,013 8,718 1,295 0

2019 2018






Hamkaran System 0 0 0 0 0 0

Tolid Darou Pharmaceutical Co. 0 0 0 0 0 0

Parsian E-Commerce 0 0 0 0 0 0

Tooka Rail 456 0 456 4,221 0 4,221

Iran Kish Credit Card 0 0 0 0 0 0

Mapna Power Generation - Asalouyeh 0 0 0 0 0 0

Pakshoo Industrial Group 0 0 0 0 0 0

Ghasem Iran 0 0 0 0 0 0

Damavand Power Generation 0 0 0 0 0 0

Mobin Petrochemical Co. 0 0 0 0 0 0

Tooka Refractory Industry 0 0 0 0 0 0

Fajr Petrochemical Co. 0 0 0 0 0 0

Sobhan Oncology 0 0 0 0 0 0

Iran Transfo 0 0 0 0 0 0

Karafarin Bank 0 0 0 0 0 0

Oil Industrial Development Co. 0 0 0 84 0 84

Sina Bank 0 0 0 0 0 0

Mellat Insurance 0 0 0 0 0 0

Piazar Agro-Industry Co. 0 0 0 0 0 0

Alhavi Pharmaceutical Co. 0 0 0 84 0 84

Parsian Bank 0 0 0 0 0 0

Middle East Tide Water 0 0 0 0 0 0

A.S.P 0 0 0 0 0 0

Sina Port and Marine Industry Development Co. 0 0 0 0 0 0

Ansar Bank 0 0 0 1 0 1

Shahed Civil and Development Co. 0 0 0 0 0 0

Hekmat Bank 0 0 0 0 0 0

Mines and Metals Investment Development Co. 1,512 0 1,512 0 0 0

Middle East Life Insurance 10 0 10 0 0 0

Mellat Leasing Co. 10 0 10 0 0 0

Cultural Heritage and Tourism Investment Co. 1,500 0 1,500 0 0 0

Bojnourd Cement 1,339 0 1,339 0 0 0

Alvand Kashi 135 0 135 0 0 0

Seir Kosar Rail Co. 81 0 81 0 0 0

Gole Gohar 650 0 650 0 0 0

Iran Copper Industries 36 0 36 0 0 0

Pars Petrochemical Co. 9 0 9 0 0 0

Tamin Maseh Rikhtegri 13 0 13 0 0 0

Other 0 0 0 0 0 0

Dividends from short-term investments 311,175 0 311,175 747,047 0 747,047

Saman Yekom Mutual Fund 633 0 633 11,171 0 11,171

Aghigh Fund 0 0 0 0 0 0

Yekom Agah Fund 0 0 0 556 0 556

Profit from units of mutual funds 633 0 633 11,726 0 11,726

Dividends from companies' shares and units of mutual funds

759,601 0 759,601 1,260,351 0 1,260,351


2019 2018

Number of shares/

Investment units

Book valueNet sale

valueProfit(loss)

Profit (loss)



Mines and Metals Investment Development 0 0 0 0 (451)

Isfahan Mubarakeh Steel Co. 0 0 0 0 13,177

Shomal Drilling Co. 0 0 0 0 (5,582)

Mapna Group 0 0 0 0 (6,432)

Iranian Leasing Co. 0 0 0 0 (378)

Bank Saderat 0 0 0 0 (6,123)

Tooka Rail 0 0 0 0 (3,788)

Tooka Foolad Investment Co. 0 0 0 0 (6,864)

Tooka Transport 0 0 0 0 (826)

Middle East Life Insurance 0 0 0 0 6

Bank Ansar 0 0 0 0 (1)

Alhavi Pharmaceutical Co. 0 0 0 0 (1,765)

Iran Copper Industries Co.-rights issue 0 0 0 0 151

Sarcheshmeh Copper 0 0 0 0 (2,299)

Sarcheshmeh Copper-rights Issue 0 0 0 0 0

Fars Civil Development 0 0 0 0 (3,731)

Kharazmi IT Development 0 0 0 0 (625)

Takin Co. 32,400 277 245 (32) (638)

Takin Co.-rights issue 39,599 299 260 (39) 0

Gole Gohar 0 0 0 0 639

Isfahan Steel Co. 0 0 0 0 (549)

Taamin Oil, Gas and Petrochemical Co. 0 0 0 0 1,032

Rail Seyr Kowsar 0 0 0 0 (1,502)

Mapna Power Generation- Asalouye 0 0 0 0 (3,753)

Kayson 0 0 0 0 (6,854)

Kayson - rights issue 0 0 0 0 (1,324)

Ghadir Investment Co. 0 0 0 0 (1,803)

Bojnord Cement Co. 0 0 0 0 3

Kerman Civil Development 0 0 0 0 22

Cultural Heritage Investment 0 0 0 0 (409)

Saman Kish Electronic Payment 992,255,218 6,904,992 10,517,605 3,612,613 5,111,315

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 (Forex) (non-profit sharing) 0 0 0 0 0

0 0 0 0 0

1,853,614,726 8,931,074 13,470,946 4,588,455 6,611,663

36-3- Profit (loss) from increase (decrease) in investments value:2019 2018

Number of shares

Net sale value Book value Profit (loss) Profit (loss)



Alvand Kashi Co. 1,751,326 6,850 6,264 586 0

Cultural Heritage and Tourism Investment 10,000,000 20,296 20,121 175 0

Pars Civil and Development Co 17,989,621 31,954 33,607 (1,653) 0

Bojnourd Cement Co. 3,925,890 13,655 13,997 (342) 0

Kayson 21,250,000 27,629 29,999 (2,370) 0

Kayson-rights isue 5,000,000 3,340 3,480 (140) 0

Alhavi Pharmaceutical Co. 1,277,010 3,923 4,805 (883) 0

Seir Kosar Rail Co. 4,052,070 8,538 8,779 (240) 0

Kharazmi Development and IT Co. 448,756 976 1,144 (167) 0

Iran National Investment Co. 1,677,785 2,125 2,217 (92) 0

Middle East Life Insurance 200,000 99 102 (3) 0

Insurance Industry 9,774,010 31,096 30,433 663 -

Saman Insurance 104,622,000 436,747 361,069 75,678 43,063

Middle East Bank 70,779,400 154,755 145,729 9,026 0

Electronic Payment Co. 28,395,000 444,024 321,625 122,399 (1,584)

Shahid Bahonar Copper Co. 1,991,203 20,566 21,524 (958) 0

Hamadad Glass Works 36,735,455 144,445 58,443 86,002 0

Iran Pump Manufacturing Co. 22,465,009 51,372 28,812 22,560 0

Ofogh Koorosh 131 3 3 1 0

Faka Agro-Husbandry 173 2 2 0 0

Parsian Lotus Investment Co. 1,439 3 3 () 0

Ghaed Basir Petrochemical Co. 125 2 2 0 0

481,697,905 1,754,644 1,445,210 309,433 (33,432)

Profit (loss) from sales of mutual funds (Rial) (profit-sharing) 0 0 0 0 0

Sahm Ashna Yekom special market-making fund 8,000 17,838 10,820 7,018 0

Nik Andishane Honar Charity Investment Found 2,499 2,499 2,535 (36) 0

Profit (loss) from sales of companies' share (Forex) (non-profit sharing) 0 0 0 0 0

Profit (loss) from sales of mutual funds (Forex) (non-profit sharing)

0 0 0 0 0

481,708,404 1,774,981 1,458,565 316,416 (33,432)


37-3- Interest on statutory deposit of investment deposits are as follows:

38- Deposits management feeThe 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:

Management fee = Free rate x Average shared uses

4,944,594 = %3 x 164,819,824

38-1- Stated management fee (MF)

39- Compensation of expenses related to depositors' free resource surplus to shared uses Pursuant to the directive No. 94/69383 of June 10, 2015 the expenses for depositors’ surplus resources are calculated as follows:

2019 2018

Rls(m) Rls(m)

Average statutory deposit of investment deposits 28,055,901 23,430,897

Interest on statutory deposit 283,706 232,707

Stated MF Calculated MF

Rate Percentage Amounts in Rls(m) Rate Percentage Amounts in Rls(m)

Ordinary short-term deposits 3 2,652,568 2.27 2,008,270

Special short-term deposits 3 61,397 2.27 46,484

General certificates of deposit 3 0 2.27 0

One-year term 3 3,658,081 2.27 2,769,547

Two-year term 3 80 2.27 61

Three-year term 3 6 2.27 4

Four-year term 3 1,123 2.27 850

Five-year term 3 155,253 2.27 117,543


3 2,426 2.27 1,837

6,530,934 4,944,596

37- Bank’s share from profit-sharing incomesBank’s share of sources from profit-sharing incomes is calculated as follows:

37-1- Bank’s share from profit-sharing incomes

37-2- Distribution of shared resources and uses between the depositors and the bank

• The bank’s share of resources out of the shared uses means the shared uses deducted from the free resources of investment depos-its. Should the total free resources of investment deposits exceed the shared uses, the surplus thereof will be named the surplus free resources of investment deposits.

37-2-1- Average shared uses

37-2-2- Average investment deposits

• 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.

Fiscal year Bank's share of sources to

total uses ratio (37-2)Profit-sharing incomes

Bank’s share of sourcesfrom profit-sharing incomes

Percentage Rls(m) Rls(m)

2018 0 26,814,284 0

2019 0 30,996,680 0

2019 2018 Average

Rls(m) Rls(m)

Average shared uses (37-2-1) 164,819,824 131,048,466 52-week average

Average balance of investment deposits (37-2-2) 245,753,679 203,491,258 52-week average

Less: Statutory deposit from investment deposits (28,055,901) (23,430,897) 52-week average

Free resources of investment deposits 217,697,778 180,060,360

Bank’s share of sources out of shared uses (Surplus free resources of investment deposits)

(52,877,954) (49,011,894)

2019 2018

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

Net uses related to investment in shares and other securities 11,726,551 3,194,419

Total uses related to profit-sharing operations 164,819,824 131,048,466

March 20, 2019 March 20, 2018

Investment deposits Amount (average) Amount (average)

Rls(m) Rls(m)

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

Surplus free resources of investment deposits to shared uses x Profit-sharing incomes

Average shared uses

52,877,954 = 9,944,44130,996,680

164,819,824x


42- Fee and commission incomes

43- Fee and commission expenses

42-1- Net fees for Gharzolhassaneh (interest-free) transactions are as follows:


Note 2019 2018 2019 2018


Net fees for Gharzolhassaneh(interest-free) transactions

42-1 50,843 59,887 50,843 59,887

Fees for LCs opened 126,523 78,855 126,523 78,855

Fees for LGs issued 250,926 137,234 252,664 138,629

Forex transactions 200,531 65,496 200,531 65,496

Fees for managed funds 0 0 0 0

Banking drafts 442,064 181,281 422,575 156,840

Credit cards subscription 93,185 9,238 93,185 9,239

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

Holders of Shetab Cards 296,045 226,339 296,045 226,339

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

2,409,831 1,663,679 2,392,080 1,640,633


2019 2018 2019 2018


Fees paid to Shetab payment system 435,250 434,207 435,249 434,207

Fees paid to brokers 8,566 6,080 8,565 6,080

Fees paid to Banks 1,420,739 1,050,834 1,420,738 1,050,834

Fees paid to persons/entities 53,988 31,762 90,357 72,301

Fees paid to Electronic Payment Co. 414,685 356,749 414,686 356,749

Other 116,052 31,696 116,053 31,697

2,449,280 1,911,330 2,485,648 1,951,868

2019 2018

Rls(m) Rls(m)

Fees received for Ghazolhassaneh (interest-free) loans 51,887 60,703

Fees for prizes on interest-free deposits (1,044) (816)

Net fees for interest-free loans 50,843 59,887

40- Provisional interests (on-account) paid on investment deposits

41- Interest expenses on deposits

41-1- Reconciliation statement of provisional interests (on-account) paid on

investment deposits (in rial) along with interest expenses on investment deposits


2019 2018 2019 2018


Interest on ordinary short-term deposits 8,748,510 9,495,786 8,803,987 9,563,817

Interest on special short-term deposits 470,457 853,687 470,457 853,687

Long-term deposits

One-year term 25,954,825 19,896,327 25,954,825 19,896,327

Two-year term 0 0 0 0

Three-year term 0 0 0 0

Four-year term 7,609 12,268 7,609 12,268

Five-year term 1,207,575 3,027,017 1,207,575 3,027,017

General certificates of deposit 0 0 0 0


17,249 26,407 17,249 26,407

36,406,225 33,311,492 36,461,702 33,379,523


Note 2019 2018 2019 2018


Interest on investment deposits in rial 41-1 36,406,225 33,311,492 36,461,702 33,379,523

Interest on special certificates of deposit 0 0 0 0

Interest on foreign currency deposits 389,548 442,953 389,547 442,952

36,795,773 33,754,445 36,851,249 33,822,475

2019 2018

Rls(m) Rls(m)

Provisional interest paid on investment deposits (Note 40) 36,461,702 33,379,523

Plus (less) difference in interest payable to depositors (surplus interest paid to depositors) - carried from the statement of investment deposits performance

(181,466) (235,491)

Final interest accrued to investment deposits 36,280,236 33,144,031

Plus Final interest paid to depositors (equivalent to surplus interest paid to depositors) 181,466 235,491

Interest on ivestment deposits in Rial 36,461,702 33,379,523


47-1- Profit (loss) from sale of tangible fixed and intangible assets breaks down as follows:

47-2- The balance of this account is related to the contracts made for sale of assets in preceding years which were revoked in the fiscal year 2018-2019 and/or is related to the gains earned from installment-based sale of assets in preceding years.

48- Administrative and general expenses

48-1- The personnel expenses break down as follows:


Note 2019 2018 2019 2018


Personnel expenses 48-1 3,321,433 2,654,497 3,107,183 2,482,572

Administrative expenses 48-2 3,606,570 2,824,458 3,398,381 2,664,066

6,928,003 5,478,955 6,505,564 5,146,638


2019 2018 2019 2018


Salaries, wages and benefits 2,498,818 2,049,497 2,350,229 1,932,091

Social security insurance - employer's contribution 436,863 342,721 418,221 328,915

Employees' termination and pension benefits 8,199 6,924 0 0

Business travels and allowances 59,619 450 59,181 0

Other 317,934 254,905 279,552 221,566

3,321,433 2,654,497 3,107,183 2,482,572

2019 2018

Cost Book value Amount sold Profit (loss) Profit (loss)


Land 217,978 217,978 251,912 33,934 228,524

Installations 0 0 0 0 0

Buildings 73,086 70,227 84,463 14,236 559,778

Furniture and fixtures 0 0 0 0 0

Motor vehicles 0 0 0 0 0

Assets in process of completion 0 0 0 0 0

Orders and capital prepayments 0 0 0 0 0

Capital items in stock/warehouse 0 0 0 0 0

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

44- Incomes from sales and services rendered

46- Net profit (loss) from foreign currency exchanges and transactions

47- Net other incomes and expenses

44-1- The income earned from sales and services rendered is mainly related to the foreign currency trading/transactions by the Saman Foreign Exchange Company.

45- Cost price of sales and services rendered

Group

2019 2018

Rls(m) Rls(m)

Sales and services rendered 84,344,987 90,626,149

Refund for reductions 0 0

84,344,987 90,626,149

Group

2019 2018

Rls(m) Rls(m)

Cost price of goods and services rendered 83,433,077 90,033,414

83,433,077 90,033,414


2019 2018 2019 2018


Profit (loss) from forex trading (buying & selling) 3,696,612 1,535,408 3,673,854 1,535,073

Profit (Loss) from foreign exchange translation 2,795,748 2,395,482 2,742,757 2,414,664

6,492,360 3,930,890 6,416,611 3,949,737


Note 2019 2018 2019 2018


Profit (loss) from sale of tangible fixed and intangible assets

47-1 51,038 2,176,275 50,956 2,175,690

Profit (loss) from sale of foreclosed collaterals/properties

7,415,496 7,398,403 7,415,496 7,398,403

Profit (loss) from sale of prior years' assets 47-2 131,642 299,153 131,642 299,153

Professional (loan processing) fees 127,487 (325,260) 127,487 (325,260)

Income from post, Telegraph,Telephone and Swift

1,430 1,559 1,430 1,559

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


49-1- The specific expenses for doubtful debts incurred for the loans granted and the amounts due are as follows:

49-2- General expenses for doubtful debts incurred for the loans granted and the amounts due are as follows:

2019 2018

Overdue OutstandingDoubtful debts up to 5 years

Doubtful debts more than 5 years

Total Total


Balance of loans granted and non-current loans at year-end

Other banks and credit institutions 0 0 0 0 0 0 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 Balance of other accounts receivable at year-end 0 0 0 0 0 0

Amounts due from subsidiary and affiliated companies (Note 14) 0 0 0 0 0 0

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

Less: collaterals value by calculating risk factors

Savings and investment deposits 39,675 10,948 41,596 0 92,219 210,670

Participation bonds and other debt securities guaranteed by the government and CBI 0 0 0 0 0 0

Participation bonds and other debt securities guaranteed by other banks 0 0 0 0 0 0

Banking LGs 0 0 0 0 0 0 LCs transacted 0 0 0 0 0 30,000 Shares listed on the stock exchange 40,106 0 83,410 0 123,516 648,451 Real estates 376,828 6,598,631 11,966,492 0 18,941,951 18,617,520 Machinary 0 25,900 270,523 0 296,423 459,263

456,609 6,635,479 12,362,021 0 19,454,109 19,965,904

Base balance for calculating specific provision 86,202 767,359 11,849,425 0

Base factor for calculating specific provision - percentage 10 20 50 50-100 0 0

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 restructured loans 0 0 0 0 0 0

Less: Balance of provision for doubtful debts during the year 8,620 153,472 5,624,713 0 5,786,805 4,586,805

Plus: bad loans during the year 0 0 0 0 0 0

Specific provision for doubtful debts, loans grantedcand amounts due 0 0 300,000 0 300,000 1,200,000

2019 2018

Rls(m) Rls(m)

Balance of amounts loans granted to other banks and credit institutions 0 0

Balance of amounts due from the government 0 0

Balance of loans granted to governmental entities 0 0

Balance of loans granted to non-governmental entities/persons (Note 11-1) 177,186,032 144,549,153

Balance of debts for term LCs (Note 21-1) 307,802 1,858,727

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

48-2- The administrative expenses break down as follows:

48-2-1- The said amount is the contribution for the CBI’s Deposits Guarantee Fund in 2017-18 which was entered in accounts in 2018-2019.

49- Expenses for doubtful debts


Note 2019 2018 2019 2018


Office rents 436,697 368,586 402,916 341,062

Expenses for advertisement and marketing 267,460 212,657 262,780 209,948

Training and research 26,749 37,092 26,736 36,699

Insurance payments 16,916 49,794 13,907 47,726

Auditing and consulting fees 211,575 242,337 204,961 241,478

Transportation charges 24,982 20,011 23,732 18,944

Utilities: water and electricity 214,590 107,242 149,602 42,285

Repairs and maintenance of tangiblefixed-assets

530,628 434,664 530,209 434,110

Office supplies and consummables 97,731 59,177 94,813 56,321

Contribution paid to Deposits Guarantee Fund

48-2-1 298,167 601,892 298,167 601,892

Bonus and remuneration for board members

10,775 6,604 0 0

Expenses for hosting guests and entertainments

208,929 155,614 207,681 154,358

Contract-based services (outsourcing contracts)

0 0 0 0

Expense for automation 62,992 62,594 62,992 62,594

Meals for personnel 1,638 1,101 0 0

Gifts, presents and prizes 997 368 0 0

Consulating service 22,013 10,116 0 0

Other expenses 1,173,731 454,609 1,119,885 416,649

3,606,570 2,824,458 3,398,381 2,664,066


Note 2019 2018 2019 2018


Specific expenses for doubtful debts, loansand claims

49-1 300,000 1,200,000 300,000 1,200,000

General expenses for doubtful debts,loans and claims

49-2 0 0 0 0

300,000 1,200,000 300,000 1,200,000


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 statements presented for the previous fiscal year.

53- Reconciliation statement of net profit The reconciliation statement of net profit along with the net cash inflow from operating activities breaks down as follows:


2019 2018 2019 2018


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' termination and pension benefits

272,932 161,042 255,047 153,719

Net increase (decrease) in financial expenses payable 0 0 0 0

Net increase (decrease) in income tax payable 0 0 0 0

Profit (loss) from sale of tangible fixedand intangible assets

(50,956) (2,175,690) (50,956) (2,175,690)

Profit (loss) from sale of non-operating real estates (7,415,496) (7,398,403) (7,415,496) (7,398,403)

Net profit (loss) from cash foreign currency translation (2,742,757) (2,414,664) (2,742,757) (2,414,664)

(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)

Customers' deposits 41,105,349 9,137,191 39,132,681 9,336,821

Debt securities 0 0 0 0

Operating portion of provisions and other debts 3,497,898 5,766,262 223,245 3,902,189

Investment depositors' equity 44,393,709 39,529,204 44,393,709 39,529,204

171,879,652 53,689,377 166,632,331 52,024,934

Net (increase) decrease in operating assets

Due from banks and other credit institutions 719,643 (1,589,180) 732,438 (1,011,701)

Amounts due from the government 0 0 0 0

Loans granted to and amounts due from governmental entities

0 0 0 0

Loans granted to and amounts due fromnon-governmental entities/persons

(32,336,879) (10,086,437) (32,336,880) (9,386,437)

Investment in shares and other securities (4,834,727) (12,704,094) (4,856,643) (10,658,155)

Due from subsidiaries and affiliates 500,510 (125,909) 500,510 (125,909)

Other accounts receivable (8,696,464) (16,372,287) (8,200,243) (16,496,345)

Statutory deposit (8,319,697) (4,442,881) (8,319,697) (4,442,881)

Operating portion of other assets 1,619,441 2,670,434 4,163,594 2,620,754

(51,348,173) (42,650,354) (48,316,921) (39,500,674)

Net cash inflow (outflow) from operating activities 116,808,769 1,207,531 114,066,392 1,532,163

50- Financial expenses

52- Prior years’ adjustments

51- Depreciation/amortization expenses

52-1- The amendment of errors includes the following items:


2019 2018 2019 2018


Interest on facilities received from other banks and credit institutions 0 0 0 0

Interest and late payment on facilities received from the CBI 0 0 0 0

Financial expenses of debt securities 2,234 8,301 0 0

Late payment penalty paid 0 0 0 0

Late payment penalty for overdraft from current account with CBI 0 0 0 0

2,234 8,301 0 0


2019 2018 2019 2018


Tangible fixed assets depreciation 433,666 490,247 422,369 474,477

Intangible assets depreciation 104,104 53,227 119,483 50,097

537,770 543,474 541,852 524,574


Note 2019 2018 2019 2018


Accumulated effects of changes in accounting standards/policies

0 0 0 0

Amendment of errors 52-1 (921,844) (308,808) (920,303) (220,303)

(921,844) (308,808) (920,303) (220,303)


2019 2018 2019 2018


Prior years' adjusted income tax (220,303) (220,303) (220,303) (220,303)

Adjusted value added tax (VAT) 0 0 0 0

Adjusted withholding tax and prior years' salaries (1,540) (88,505) 0 0

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)


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8 54- Non-cash transactionsThe major non-cash transactions during the year break down as follows:

54-1- During the reporting year, the following assets have been acquired:

54-2- During the fiscal year ended March 20, 2019, the bank did not offset any asset with the loans granted.

54-3- During the fiscal year ended March 20, 2019 the bank did not have any exchange of assets.

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

Restructured loans (to settle previous loans) 9,664,422 9,427,069

Exchange of assets 54-3 0 0

Capital increase from dividends accrued to shareholders 0 0

Capital increase from assets revaluation reserve 0 0

10,827,967 18,374,645

Type of assetforeclosed

Type of customer

relationship

Debt amount at the acquisition

date

Value of acquired asset appraised

by expert

Amount paid by customer/debt remission by

bank

Amount paid for surpluse value of

foreclosed propertyas appraised

Debt balance after

foreclosure


Residential properties

Unrelated customer

3,796,513 1,069,305 68,909 18,492 2,676,791

Business/office properties

Unrelated customer

29,881 8,438 0 0 21,443

SharesUnrelated customer

0 0 0 0 0

Participation bondsUnrelated customer

0 0 0 0 0

Factory and equipment

Unrelated customer

0 0 0 0 0

LandUnrelated customer

5,271,535 85,802 19,014 4,762 5,171,481

9,097,929 1,163,544 87,923 23,254 7,869,716


55-4- Managed funds and similar cases are as follows:

55-5- The obligations created under letters of credit and letters of guarantee by

a breakdown of collateral type

56- Capital obligations and contingent liabilities56-1- 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

57- Earnings per share (EPS)

57-1- Basic earnings per share

The basic EPS is earned by dividing the dividends belonging to ordinary shareholders by the average weighted number of ordinary shares outstanding with the shareholders. The average weighted number of ordinary shares (basic) consists of 8,000,000,000,000 shares.

57-2- Diluted earnings per share

The diluted earnings per share is earned by dividing the dividends belonging to ordinary shareholders by the average weighted number of ordinary shares outstanding with the shareholders upon adjustment of dilution impact of all potential ordinary shares. The average weighted number of ordinary shares (diluted) consists of 8,000,000,000,000 shares.

58- Post-balance sheet eventsFrom 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.)

2019 2018

Rls(m) Rls(m)

Loans granted out of managed funds 388,765 1,172,582

Unused managed funds 84,117 73,347

Loans granted out of special Gharzolhassaneh (interest-free) deposits 176 180

Special unused Gharzolhassaneh (interest-free) deposits 41 37

473,099 1,246,146

2019 2018

Rls(m) Rls(m)

Deposits 2,859,595 5,794,517

Participation bonds and other debt securities guaranteed by government and CBI 0 0

Participation bonds and other debt securities guaranteed by other banks 0 0

Banking LGs 459,280 699,807

Letters of credit transacted 0 0

Shares listed on the stock exchange 25,581 17,817

Land and buildings 925,219 953,216

Machinery 40,364 55,479

Checks and promissary notes 14,073,022 9,705,316

Other 44,010 268,862

18,427,071 17,495,014

Unseccured obligations 1,608 95,334

18,428,679 17,590,348

55-1-2- The obligations pledged by the parent company under rial-denominated letters of credit are as follows:

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 breaks down as follows:

55-2-2- The obligations pledged by the bank under rial-denominated letters of guarantee are as follows:

55-3- Other obligations pledged by the bank break down as follows:

Balance at the beginning of the year

Opened during the year Credited (cancelled)

during the yearBalance at the year end

Type of credit Number Rls(m) Number Rls(m) Number Rls(m) Number Rls(m)

Demand/call 1 2,170 0 0 0 0 1 2170

Term 13 417,588 8 325,214 (5) (508,600) 16 234,202

419,758 325,214 (508,600) 236,372

2019 2018

Amount in Forex Amount in Rial Amount in Forex Amount in Rial

Rls(m) Rls(m)

UK Pound 138,334 7,715 138,334 7,262

Euro 34,503,662 773,760 15,898,916.86 1,595,760

Canadian Dollar 2,370,000 0 2,370,000 68,152

Chinese Yuan 15,642,623.3 0 15,642,623.30 92,964

781,475 1,764,138

2019 2018

Rls(m) Rls(m)

Obligations for LGs issued 13,605,572 8,106,391

13,605,572 8,106,391

2019 2018

Rls(m) Rls(m)

Obligations for participation bonds and other similar securities guaranteed 0 0

Obligations for credit cards 4,125,319 1,928,107

Obligations for contracts in Forex - Foreign Exchange Reserve Account 0 0

Obligations for syndicated contracts 0 0

Obligations for commodity loans guaranteed 0 0

Obligations for contracts in Rial 29,150,962 18,119,400

Obligations for contracts with the Management and Planning Organization 0 0

Obligations for amounts received from the National Development Fund (Rial) 0 0

Obligations for amounts received from the National Development Fund (Forex) 0 0

Obligations by borrowers/users for credit services 4,125 4,472

Obligations for mutual funds guaranteed 2,566,525 5,105,737

Obligations for drafts 10,563,989 3,689,768

46,410,920 28,847,484


• At Saman Bank the responsibility for all accepted risks shall remain with the Board of Directors;

• 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 the bank’s operations. Additionally, the Senior Risk Committee shall also have to ensure the compliance of 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 by concentrating on the consolidation and enhancement of bank reputation and position and to maintain a proper capital adequacy ratio as required. The outcome of the Committee’s actions shall be submitted to the bank’s board of directors under the title of “Guiding and Regulatory Reports”.

• 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 process of this ratio and prepare it for approval by the board of directors along with the key policies for maintenance of this ratio up to the desired level;

– To approve the annual report on the performance appraisal of the bank’s risk management system and prepare it for submission to the board of directors to be incorporated in the annual report addressing the shareholders’ general meeting;

– To approve the annual risk management plans concerning the development, improvement and implementation of the risk measurement, assessment and management systems in the bank which may include procurement of required hardware and software facilities and recruitment of human resources;

– 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 board of directors on the outcomes of the evaluation and measures taken in these areas;

• 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 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 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.

60-3- Credit risk

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 banking operations will meaningfully be premised on the correct performance, design and implementation of written procedures and policies for identifying, assessing, monitoring and controlling the credit risk. The credit policies will provide a framework for financings and granting credit facilities by the bank. Obviously, the bank credit policies shall include the matters such as target markets, portfolio composition, pricing requirements, terms of reference, loan approving or sanctioning authorities, reporting procedures, the process relating to list of exclusions and … Such measures shall be clearly defined in line with the banks’ contingent procedures and shall be appropriate to the scale and complexities of banking operations.

59- Bad (written-off) debtsSaman Bank has no record of bad/written-off debts as at March 20, 2019.

60- A profile of the bank’s risksSaman Bank has devised and established a specialized and appropriate structure which is consistent with the 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 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

• Liquidity risk

• Market risk

• Operational risk

The foregoing risks emerge from the bank’s business model and the risk management mechanism. In the current model, attempt has been made to identify the events which may affect the level of the bank’s achieving its paramount goals within the framework of risk management. More notably in parallel with the risks evaluation, the bank’s risk management will take the anticipated loss index as well as the quantitative and qualitative models into account and will continuously develop and enhance its evaluation models and patterns.

60-1- Relationship between various business segments and the key risks each

segment is exposed to

Saman Bank has a strong determination to counter the business risks and environmental uncertainties. The key business segments impacted by financial risks include the retail banking division which is substantially affected by credit and liquidity risks and the corporate banking division which is influenced by various credit, liquidity and market risks. The operational risks may accordingly affect some areas of current activities of the segments which will be surveyed and evaluated by applying the common practices.

60-2- Framework and chart of risk management

The risk management is responsible for developing and controlling the bank’s risk management policies. Thus in line with the policy of effective risk management, Saman Bank has devised and created a Risk Management System comprising the High or Senior Risk Committee and the Risk Department as illustrated in the diagram below. The Risk Department report to the Bank Deputy for Supervision and shall have to implement the decisions taken by the Senior Risk Committee.

Privatebanking

Internationalbanking

Corporatebanking

Retailbanking

Saman Bank

Credit risk Low LowLow

Average

Average

Average

Average

Low LowLow

Low LowLow

Low LowLow

Credit risk Credit risk Credit risk

Market risk Market risk Market risk Market risk

Liquidity risk Liquidity risk Liquidity risk Liquidity risk

Operational risk Operational risk Operational risk Operational risk

Board of Directors

Senior Risk Committee

CEO

Risk Department


• Natural or legal person independently

• The ownership relationships between the natural and legal persons which include the following:

– A natural person as well as his/her spouse and dependents with affiliates and their associates;

– A legal person/entity with affiliates and their associates;

– Affiliates and associates of a natural person or a legal entity having interrelationships provided that multiplication of their ownership percentages in such units will be at least 20%.

• The managerial relationships between the legal entities which include the following:

– A legal entity with other legal entity having at least two thirds of joint board members;

– A legal entity with other legal entity having joint chairmanship of board of directors.

• The financial relationships between a legal entity and a natural person which include the following:

– A natural person with his/her spouse and dependents;

– The obligor with obligee provided that the amount of guarantee comes up to at least 75% of the obligor’s annual income or assets. The reverse relationship in this proportion may apply when these two parties have mutually agreed on counter guarantees;

– Party (A) with party (B) provided that over 50% of the gross annual income of party (A) is funded by party (B). The reverse relationship of this proportion does not apply;

– The persons who each holds at least 20% of shares or capital with a voting right for a legal entity;

– The persons who earn each over 50% of their gross annual income from the same income source.

• The controlling relationships between a natural person and a legal entity include the following:

– A natural person as well as his/her spouse and dependents with a legal entity who has in any manner arranged the voting right of over 20% of such legal entities’ votes;

– A legal entity with other legal entity who has in any manner arranged the voting right of over 20% of the other legal entity’s votes;

– A natural person or a legal entity with other legal entity who has the power to direct and control the financial and operational policies including the decisions on the distribution of dividend or profit;

– A natural person or legal entity with other legal entity who has the power to appoint or dismiss the majority of board members of the entity in any manner arranged.

When single borrowers/beneficiaries are identified, the corporate banking offices shall enter the information about the loan borrower in the bank’s statistics and database management system in the unit of the single beneficiary.

Payment of loans to or creation of obligations for any single borrower which may cause such loans and obligations to fall under the category of “Large Loans and Liabilities” shall have to receive the approval of the bank board of directors. Therefore, if the customer meets the requirements for receipt of loans and obligations within the stipulated limits, he shall finally have to obtain the authorization from the board of directors.

Limits of large loans and liabilities

• The maximum total large loans to and obligations by ay single borrower shall not exceed 20% of the bank capital.

• The maximum total large loans and obligations will be eight times (eightfold) of the bank’s base capital.

• When the loan amount requested by a single borrower is more than the specified limit in the applicable regulations, the bank may under the prevalent rules, apply the procedures for granting joint-loans (such as syndicated, consortium or similar methods).

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 persons will fall under the category of related parties:

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 significantly influenced in one way or another such as personal, ownership, managerial or supervisory relationships in a way that they may pref-erably use the bank as their financial resources and thus the bank’s interests are overshadowed by the interests of the said persons.

More significantly, the credit policies shall be devised and implemented with a view to the internal and external factors such as the bank market position, business locations/areas, staff capabilities and technological advances.

Arguably, these policies shall particularly define the banks’ objectives in the areas of portfolio composition, exposure limits of the counterparty or a group of related parties, special industries or economic sectors, 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 inspectors (regulators).

60-3-2- Credit policies and procedures

Saman Bank credit policies covering loans, facilities and outstanding debts or claims due to this bank are described as follows:

A. Loan facilities: to abide by the authorized sanctioning limits and amend the loans portfolio based on tenor and return.

B. Claims: To reduce the debt balance (receivables) and review the records of large debts

Accordingly, the most significant plans and credit requirements of the bank are as follows:

• To set the quantitative goals of the policy on loan facilities, debt collection, letters of guarantee and letters of credit;

• To define the scope of powers or sanctioning authority of credit departments in granting loans and collecting debts;

• To install and implement the monitoring systems for granting loans;

• To emphasize the customers’ repayment capacity for receipt of loans;

• To establish a supervisory and controlling system over the quality of informational reports;

• To mitigate the risk of loans and commitments by receiving secure collaterals;

• To comply strictly with the regulations governing the single borrower/beneficiary, related parties as well as the large loans and debts;

• To regularly hold the meetings by Restructuring and Debt Collection Committees at various levels so as to take decisions on the customers’ outstanding debts as quickly as possible;

• 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 recommendations;

• To conduct periodic inspections by the inspectors named in relevant directives and pay random visits to the loan business places for monitoring their progress, and functionality by supervisors, credit commit-tee members and other competent authorities.

60-3-3- Executive units of credit risk management

The implementation areas will include across-the-board sectors (all departments and divisions) of the bank in particular, branches, credit affairs division, debt collection office, credit committees and other credit units.

60-3-4- Scope of powers at various organizational levels for sanctioning loans and liabilities

An important element of credit risk management is to specify the level of exposure for individual counterparties or a group of related counterparties. Considering the segregation of Retail and SMEs Banking and Corporate Banking, in Saman Bank, the prevalent criteria and standards for decision making on loans and liabilities will include the three areas of: Large Loans and Liabilities 1 , Related Parties’ Loans and Liabilities, and Retail and SMEs Loans and Liabilities.

Large loans and liabilities

Loans and obligations in the area of corporate banking shall be based on customer due diligence (CDD) of a single borrower or beneficiary . The following persons will fall under the category of single beneficiary 2:

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 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 such a way that the problems pertaining to one of them can affect the other/others and this domino effect may result in the failure of repayment or default on the loan obligations.


• Subsidiaries and affiliates to other banks;

• Public joint-stock companies listed on the Stock Exchange.

Sanctioning bodies in Retail and SME Banking Department

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:

Top Group Branches, Group I Branches, Group II Branches, Group III Branches and Group IV Branches. The scope of credit sanctioning powers of each group for acceptance and approval of the types, components and amounts of collaterals shall be subject to the requirements set forth in a Saman Bank directive governing “The Requirements for Granting Retail and SME Loans” and subsequent amendments and annexes thereof.

For the purpose of approving credit loans and letters of guarantee and in compliance with the scope of credit sanctioning authority defined for branches, all the bank branches shall have to review and decide on all the customers’ credit applications being consistent with the scope of delegated powers (by computing the customer’s current debts and liabilities) at the commissions which are held at the various levels of bank organization. The commissions which are authorized to make decisions on granting loans in rials and foreign currencies, issuing letters of guarantee, opening letters of credit and entering orders for documentary drafts guaranteed by the bank include the following:

• Branches Credit Commission

• District Credit Commission (District head office)

• Internal SME Credit Commission

• SME High Credit Commission

The scope of sanctioning authority in rials delegated to credit commissions of branches and

district head offices

Sanctioning authority of credit commissions of branches Rls(m)

Type of CommissionType of loans andcredits in Rial

First grade collaterals: type I and IV combined or first grade collaterals: type I and second grade combined

First grade collaterals: type I and third grade guarantee combined

Natural persons Legal persons Natural persons Legal persons

Class III and IV Branch Credit Commission

Loans in Rial 1,500 2,500 600 1,000

LGs in Rial 1,500 2,500 600 1,000

Class II Branch Credit Commission

Loans in Rial 2,500 4,000 1,000 1,500

LGs in Rial 2,500 4,000 1,000 1,500

Class I Branch Credit Commission

Loans in Rial 4,000 6,000 1,500 2,500

LGs in Rial 4,000 6,000 1,500 2,500

Top Branch Credit Commission

Loans in Rial 6,000 9,000 2,500 4,000

LGs in Rial 6,000 9,000 2,500 4,000

• Directors of the credit institutions including board members, managing director (CEO), deputy managing director and other executive board members;

• Independent auditor (whether the auditing firm and copartner) and legal inspector of credit institution;

• 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;

• The father, mother (parents), spouse and children of the related parties stated in items 1 and 2 above;

• A legal entity whose capital or shares are owned by the related parties stated in items 1,2, 3 and 4 above in a manner that the said related parties have the authority to appoint at least one member of the board of directors in this legal entity;

• A legal entity in which the related parties stated in items 1, 2, 3 and 4 above hold management positions (board member, executive board, managing director (CEO) and deputy managing director);

• A legal entity that directly holds at least 5% of shares in the credit institution;

• A legal entity in which at least 10% of its capital or shares is directly owned by the credit institution;

• A legal entity in which at least 20% of its capital or shares is directly owned by the legal entities stated in item 8 above.

Limits of loans to and liabilities by related parties

• Individual limit: the total net loans to and obligations by each person shall not exceed 3% of the bank’s base capital

• Group limit: the total net loans to and obligations by related parties shall not exceed 40% of the bank’s base capital

• 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 loans to or creation of obligations by the related parties shall be held without the presence of the related parties involved in this process.

Corporate loans and liabilities

The Corporate Banking Commission shall have the authority to sanction the loans and credit lines for each 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.

Retail and SMEs loans and liabilities4

The loans and obligations in the area of retail and SMEs banking shall be based on the type of customer and the amount of requested loans. Thus, the prevailing criteria for identifying the retail and SMEs customer include the following:

• Natural persons: all natural persons over the age of 18 applying for any amount of loans and obliga-tions.

• Legal entities: that group of legal entities that along with the relevant single beneficiaries make a 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, 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 the loan amounts being requested or used, any credit services to the following customers shall be provided solely by the Corporate Banking Department:

• Manufacturing companies with a registered capital in excess of Rls. 100 billion;

• Trading and service companies with a registered capital in excess of Rls. 120 billion;

• State-run corporations and non-governmental public organizations;

• Related parties and bank’s subsidiaries and affiliates;

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 expand the existing businesses or create new business ventures.

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.

The scope of sanctioning authority of SMEs credit commissions

Sanctioning authority of district credit commissions of branches in rial and SMEs credit commissions Rls(m)

Type of CommissionAuthority for the 1st, 2nd and 3rd grade collaterals

First grade collaterals: type I and IV combined or first grade collaterals: type I and second grade combined

First grade collaterals: type I and third grade guarantee combined

Legal persons Natural persons Legal persons Natural persons Legal persons Natural persons

District offices commission 15,000

Internal credit commission Internal credit commission 40,000 60,000 20,000 30,000

Retail and SME credit commission

Internal credit commission 200,000


Business riskprofile

Additional keyindexes in scoring

Financial riskprofile

Industry risk

Drivers relatedto the industry

Co-direction ofbusiness cycles

Entry Barriers

Scoringprocess

Overall assessment

Adjustment

Alternative risks

Market share (historical and planned processes)

Special corporate scoring factors

Financial leverage and debt

liquidity

Creation of cash flows

Financial policies

Comparison with co-group companies

Support or contributionprovided by the government of

industrialists

Product diversity, geographical location, customers, suppliers,

assets, sales outlets

Operating profit (EBITDA, historical background, and forecasts thereto)

and its fluctuations

Competitiveposition

60-3-5- Methods of reducing credit risk

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:

first grade collaterals and guarantees

• First grade collateral of type I includes Gharzolhassaneh (interest-free) savings, cash collateral in Rials and without banking cards;

• First grade collateral of type II includes other deposits (excluding current accounts and;

• 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 which Saman Bank is acting as the registrar or guarantor of the fund’s units;

• 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);

• 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.

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).

Third grade collaterals and guarantees include the guaranteed promissory notes received from customers as well as guaranteed documents.

It is noted that the procedures for collaterals acceptance are subject to the requirements set down in the bank’s directive on the retail and SMEs loan facilities as well as the subsequent amendments.

60-3-6- Customers’ credit scoring process

For the credit scoring process, certain components and criteria such as microelectronic environment, customer’s business status, customer’s financial standing and his credit reputation are examined to assess his eligibility for receipt of loan facilities. Considering the fact that the bank has customers from consumption, SMEs and corporate categories, being inherently different, it will apply varying methods of customer credit scoring specific to each category. Thus the scoring criteria will cover three areas for customers from consumption, SMEs and corporate sectors. Overall the general scoring process will include the following 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 relevant data and information shall remain with the branches;

• In addition to the said reports and records, all branches shall, for payment of business loans up to the limit of ten billion rials (like loans for working capital, business expansion and/or business creation) act 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 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 shall rest with credit commissions;

• The responsibility for sanctioning credits in the decision-making departments in respect of the credit size shall remain with credit commissions;

• The responsibility for providing an independent opinion on the loans granted by designing and updating the scoring/rating system, controlling and monitoring the credit risk shall remain with the risk 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;

• The policies on decision-making, monitoring and reporting independently about the credit risk shall be valid under any circumstances.

In 2017-18, Saman Bank updated its scoring criteria for corporate customers which would be described in the following section.

Development of a new scoring model for the bank’s corporate customers

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 a view to the circumstances prevailing in Iran. The main target group of this new model will initially include the legal customers’, and at the later stages, the major natural customers.

Overall structure for credit scoring of corporate customers

Business risk profile

the business risk of an entity in the market and its sectoral movements are regarded as a business driver. The business risk profile may be classified into the following sectors:


Loans granted to banks Loans granted to customersObligations under LGs

and LCs

2019 2018 2019 2018 2019 2018


Current 0 0 147,888,357 115,735,134 18,428,679 17,590,348

Overdue 0 0 542,812 4,499,811 0 0

Outstanding 0 0 7,402,838 825,883 0 0

Doubtful 0 0 21,352,025 23,488,325 0 0

Total gross amount 0 0 177,186,032 144,549,153 18,428,679 17,590,348

Value inpairment reserve 0 0 (7,712,515) (7,412,515) 0 0

Net book value 0 0 169,473,517 137,136,638 18,428,679 17,590,348

60-3-7-3- Credit quality of participation bonds, Islamic treasury bonds, Sukuk bonds, units of

mutual funds and similar items

Credit quality analysis

2019 2018

Rls(m) Rls(m)

Issued by the government and Central Bank

Ministry of Economic Affairs and Finance 0 10,000

0 10,000

Issued by state-run corporations

Shahrivar Sevom Financial Intermediary Co. 291,190 291,190

Tir Sevom Financial Intermediary Co. (Ltd.) 1,998 1,898

Mehr Financial Intermediary Co. (Ltd.) 0 55

Bahman Sevom Co. 34,800 34,800

Shahrivar Chaharom Financial Intermediary Co. (Ltd.) 0 3,033,200

327,988 3,361,143

Issued by non-governmental Sector

Novin Saman Fixed-income Fund 0 0

Saman Yekom Mutual Fund 10,000 10,000

Agah Yekom Charity Fund 2,500 2,500

Amin Saman Mutual Fund 10,000 10,000

Mutual Fund for Iran Capital Market Development 35,000 35,000

Nikandishanhonar Charity Fund 0 2,535

Negin Saman Fixed-income Fund 561,934 49,000

Sahm Ashna Special Yekom Mutual Fund 122,203 0

Tir Yekom Financial Intermediary Co. 0 800

Khordad Dovom Financial Intermediary Co. (Ltd.) 29,938 29,938

Mehr Yekom Financial Intermediary Co. 0 50

771,575 139,823

1,099,563 3,510,966

Grade Risk category S and P: corresponding rates

Grade 1 Low risk AAA to BBB+

Grade 2 Low risk BBB

Grade 3 Low risk BBB-

Grade 4 Average risk BB+

Grade 5 Average risk BB

Grade 6 Average risk BB-

Grade 7 High risk B+

Grade 8 High risk B

Grade 9 High risk B-

Grade 10 Default CCC

• Industry analysis

• Competitive position

– Industry analysis: the industry-related drivers are defined with the aim of employing general drivers in each industry and constitute the following sub-sectors:

– Business cycles: this factor will measure the risk of movements in sales and operating profit in a predictable future compared with the previous industrial performance/indexes.

– Entry barrier: a sub-sector which measures the support and protection level of the companies involved in industry.

– Alternative risk: this factor will measure the risk and vulnerability of industry with regard to obsolescence and maturity of technology.

– Competitive position: this situation is defined with emphasis on specific aims and relevant risks by analyzing the following factors:

– Market share

– Diversity and dispersion

– Operational profitability

Financial risk profile

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 with a strong financial risk profile will outperform as a mitigant to adjust the adverse effects of economic cycle, industrial dynamism, regulatory changes and income-based unforeseen losses. This scoring process concentrated on liquidity ratios will remain invariable as leverage and cost coverage ratios. These ratios which 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:

• Financial leverage and debt

• Financial flexibility and creation of cash flows

• Liquidity

The foregoing model has devised ten grades or categories for assessment and the customer will be placed in these categories based on the ratings they have achieved:

Based on this model, nine grades of customers with low, average and high risks are ranked in the non-default category and grade ten registers the customers whose businesses are in a very bad condition.

The overall assessment will principally be based on the business risk profile and the financial risk profile which will be adjusted or modified by taking the following factors into account:

• Financial policies

• Supports provided by the parent company and the government

It is further noted that the foregoing methodology shall currently apply to all corporate customers of Saman Bank.

60-3-7- Analysis of credit quality

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 have been illustrated in tables 60.3.7.1 through 60.3.7.4.

60-3-7-1- Analyzing credit quality of loans granted, obligations and investments based on the bank’s internal credit scoring/rating system

It should be noted that the customers’ scoring/rating system in Saman Bank is in the process of formation. Although the credit system has been designed, classification of the bank’s customers by the degree of risk exposure has not been performed yet.

60-3-7-2- Table for analyzing the credit quality of the loans granted, obligations and

investments based on the assets categories


60-3-7-4- Types and amounts of collaterals received from credit customers

• Based on the written report filed by the bank’s expert, the said amount is the mortgaged value of all collaterals in possession

Types of main collaterals 2019 2018

Rls(m) Rls(m)

Loans granted to natural persons

Cash 1,803 3,109

Participation/Sukuk bonds 3,733 24,420

Marketable securities (shares) 105,895 189,143

Non-listed securities (shares) 0 0

Deposits 5,605,235 4,748,797

Real estates 39,493,256 46,704,603

Plant and equipment 1,530 16,050

Letters of guarantee 18,077 27,194

Checks/Cheques 43,981,079 44,759,780

Promissary notes 6,545,922 5,627,211

Binding contracts/agreements 6,882,044 7,018,753

Other 31,590,608 203,244

Loans granted to legal persons

Cash 1,868 3,957

Participation/Sukuk bonds 0 527,960

Marketable securities (shares) 4,390,271 8,145,187

Non-listed securities (shares) 0 0

Deposits 6,828,037 7,085,518

Real estates 26,629,879 43,187,884

Plant and equipment 1,067,380 2,887,369

Letters of guarantee 1,261,554 5,394,662

Checks/Cheques 188,253,470 197,114,630

Promissary notes 9015759 15561725

Binding contracts/agreements 10,064,339 18,462,664

Other 21,060 2,196,899

381,762,799 409,890,759

60-3-7-5- The balance of loans based on the ratio of loans balance (less provisions) to

updated cash value of collaterals

• 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 balance of customers’ debts.

60-3-8- Credit risk concentration

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 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.

Types of main collaterals 2019 2018

Rls(m) Rls(m)

Loans granted to banks

Less than 50% 0 0

51 to 70% 0 0

71 to 90% 0 0

91 to 100% 0 0

Over 100% 0 0

Loans granted to real persons

Less than 50% 17,488,503 3,500,632

51 to 70% 4,220,999 2,867,996

71 to 90% 2,854,386 3,271,590

91 to 100% 6,590,480 2,443,061

Over 100% 17,053,332 93,709,376

Loans granted to legal persons

Less than 50% 13,026,215 3,886,471

51 to 70% 3,853,969 4,750,465

71 to 90% 2,292,542 7,009,290

91 to 100% 3,685,685 7,439,404

Over 100% 106,119,923 15,670,868

177,186,034 144,549,153


60-3-8-1- Distribution table of loans and investments by economic sectors and their inland

and overseas concentration

60-3-8-1-1- Distribution of loans, obligations and investments by type of industry:

Loans granted Investments Obligations for LGs & LCs

2019 2018 2019 2018 2019 2018


Book value 177,186,032 144,549,153 18,292,591 13,435,948 18,428,679 17,590,348

Loans/liabilities by economic sectors

Industry 60.3.8.1.1 44,145,782 37,122,047 11,992,763 1,255,022 3,350,462 1,627,526

Housing 21,207,223 17,028,850 0 0 14,579 3,436

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

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

177,186,032 144,549,153 18,292,591 13,435,948 18,428,679 17,590,348

Size of loans/degree of obligations onshore and offshore (inland & overseas)

Inland 177,186,032 144,549,153 18,292,591 13,435,948 18,428,679 17,590,348

Overseas 0 0 0 0 0 0

177,186,032 144,549,153 18,292,591 13,435,948 18,428,679 17,590,348

2019 2018

Rls(m) Rls(m)

Loan facilities

Automobile and auto parts 165,519 36,429

Mining and metal industries 64,675 90,836

Petrochemical, chemical industries and oil products 651,877 342,913

Foodstuffs and pharmaceuticals 5,696,440 3,498,090

Energy 0 0

Contractual services 0 0

Telecommunication, computer and related industries 37,286,814 32,752,608

Financial intermediary 0 0

Other 280,456 401,171

Investments

Automobile and auto parts 0 0

Mining and metal industries 0 77,598

Petrochemical, chemical industries and oil products 0 0

Foodstuffs and pharmaceuticals 0 4,440

Energy 0 2,558

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

60-3-8-2- Distribution table of loans by participation and constant (fixed) profit contracts and

type of customer

60-3-9- Procedures for managing non-current loans

The bank’s policy on the management of non-current claims is premised on preventive measures supported by collaterals and proper management with follow-up actions and debt collection procedures. Considering the requirement set forth in the Law on the Elimination of Barriers to Competitive Production and Enhancement of National Financial System passed on April 21, 2015 by the Islamic Parliament and in compliance with the CBI’s directive No. 94/69383 governing the procedures for calculation and distribution of shared profit, banks shall have to reform their assets structure and increase the share of income-generating assets through the sale and 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 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 levels and credit departments, measures will primarily be taken by relevant departments and Debt Collection Office and, at a later stage, legal actions will be taken by the bank’s legal deputy.

In performance of operational and strategic actions and subject to the applicable laws and regulations, Saman Bank shall have to sell surplus and foreclosed assets and properties to collect its outstanding and doubtful debts. As has been contemplated in the organizational structure, the Collection Office shall be tasked with reducing the amounts of past-due loans. Accordingly, the bank’s Logistical Deputy shall be responsible for sale of the bank’s real estate properties.

The procedures for collecting claims and debts by all credit departments and offices of deputies are governed by the applicable laws and regulations in the country adopted by the CBI as well as the bank’s internal by-laws and directives. As prescribed in the prevalent laws, requirements and the bank’s internal by-laws, the overall procedures for collecting debts from sale of foreclosed properties and collaterals will sequentially entail and include calculation of mortgage debt, submission of documents, request for issuance of enforcement writ, service of enforcement writ, inquiry about property registration status, official expert’s appraisal report, notification of official expert’s opinion, issuance of authorization prior to the notice of sale auction or bid, operating procedures for sale of foreclosed properties and liquidation of claims due to the bank. Where the mortgaged real estate is not sold at the sale auction, the bank shall have to take possession of six shares (the entire portion) or partnership in the foreclosed mortgage put up for sale pursuant to the bank’s applicable rules and on the strength of the permits or licenses issued for this purpose.

The Gharzolhassaneh (interest-free) loans have been classified as non-constant profit contracts.

Loans granted during the year Loans balance at year-end

Amount Total percentage Amount Total percentage

Rls(m) Percentage Rls(m) Percentage

Constant (fixed) profit contractsReal customers 19,625,922 5 24,709,991 14

Legal customers 122,117,260 32 48,966,201 28

Participation contractsReal customers 14,398,074 4 21,395,002 12

Legal customers 227,595,656 59 78,424,928 45


60-3-9-1- Distribution of non-current loans by economic sectors

60-3-9-2- Balances of foreclosed assets

60-3-10- Capital sum required for credit risk coverage

The amount of capital required for credit risk coverage will come up to Rls. 29,238,162/- million which has been calculated and presented in the table 60.3.10.1.

60-3-10-1- The table for calculating the capital required for credit risk coverage

Non-current loans balance Specific provision for doubtful debts Net loans and non-current claims

Economic Sector 2019 2018 2019 2018 2019 2018


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

Commerce 14,131,830 14,527,163 2,786,378 2,602,678 11,345,453 11,924,486

Services 3,497,535 3,389,665 1,053,562 823,526 2,443,973 2,566,139

Agriculture 163,176 195,778 7,850 6,077 155,326 189,701

Banks 0 0 0 0 0 0

Mining 240 2,379 0 0 240 2,378

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

2019 2018

Rls(m) Rls(m)

Movable properties 0 0

Residential real properties 7,278,741 7,139,787

Business/Office properties 10,691,680 11,237,317

Plant and Equipment 4,251,085 4,679,958

Investments 0 0

Debt securities 0 0

Land 3,130,506 2,675,855

25,352,012 25,732,917

60-4- Liquidity risk

60-4-1- Definition of liquidity risk

The liquidity risk means the possibility of impairing or endangering the bank’s ability to provide funds for fulfillment of its obligations.

60-4-2- Liquidity risk policies and processes

The Saman Bank policy is typically to keep for each type of currency a cash buffer of at least 2% of the total deposits of the same currency which is being reviewed not to slide lower than this percentage. Further in this arrangement, a limit has been set for transactions with other banks and there is strict control not to violate such limit.

60-4-3- Executive units of liquidity risk management

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.

60-4-4- Credit risk measurement method (including bases and assumptions)

In order to measure the liquidity risk, Saman Bank uses the existing financial ratios in Basel III which include NSFR (Necessary Stable Funding Ratio) and LCR (Liquidity Coverage Ratio). Additionally, the liquidity gap which may exist between rial and foreign currencies shall be deployed for this purpose.

60-4-5- Mechanism for controlling and monitoring liquidity risk

The responsibility for controlling and monitoring the liquidity risk in Saman Bank shall remain with the Risk Department, Sources and Applications Committee and Treasury Department. The Sources and Applications Committee shall be responsible to the Senior Risk Committee and the Board of Directors and shall trace up the following matters:

• 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, 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 budget;

• To take decisions on the rates of funding and allocation of rial-denominated and foreign currency sources with respect to the needs, peers’ rates, international market rates and sanctioning authority of executive units to change such rates with a view to their effect on profitability based on the annual operating budget;

• To take decisions on the solutions to liquidity coverage subject to the liquidity level approved by the Senior Strategy Committee and Senior Risk Committee;

• To determine inter-departmental interest rates;

• 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;

2019 2018

Note Rls(m) Rls(m)

Total credit risk weighted assets 60-7-2 365,477,022 242,021,627

Percentage factor 8 8

Capital required for credit risk coverage 29,238,162 19,361,730


• To adopt proper policies so as to keep the profit margin of resources and uses appropriate to the rates or amounts set in the annual budget and submit proposals and proper solutions to the Senior Strategy Commission;

• 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 of directors;

• To ensure the control and maintenance of liquidity level in various circumstances;

• To monitor interbank operations.

The Treasury Department shall be responsible for the launch and execution of interbank operations.

60-4-5-1- Liquidity reserves

The table below shows the composition of bank liquidity reserves:

2019 2018

Rls(m) Rls(m)

Balance with CBI 412,377 3,886,993

Cash and balance placed with other banks 143,810,093 29,915,670

Bonds issued by the government 0 10,000

144,222,470 33,812,663

60-4-5-2- Table of liquidity ratios

Beginning ofthe year

Mid-year Max. during

the year Min. during

the yearYear-end

Percentage Percentage Percentage Percentage Percentage

Cash and cash equivalent to total assets 1 17.2 22.4 40.3 14.7 36.6

Cash and cash equivalent to total deposits 14.9 19.7 36.6 12.4 33.6

Net cash assets to total deposits 2 11.9 17.0 34.5 9.8 31.6

Loan facilities to total deposits 47.2 46.4 52.2 37.7 41.1

Loan facilities to on-year term deposits and more 92.0 103.8 115 92 115

Demand deposits to total deposits 3 39.6 46.7 60.1 39.6 58.3

60-4-5-3- Analyzing the maturity of assets and liabilities

The table below shows the maturity of the bank financial assets and liabilities based on the dates which would possibly be claimed or settled.

2019

Book valueLess than 1 month

1 - 3 months3 months to 1 year

1 - 5 yearsMore than 5 years

Without specified maturity

Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m) Rls(m)

Assets

Cash in hand 148,681,746 148,681,746 0 0 0 0 0

Due from banks and other credit institutions 9,955,293 9,955,293 0 0 0 0 0

Due from the government 0 0 0 0 0 0 0

Loans granted to and amounts due from governmental entities 0 0 0 0 0 0 0

Loans granted to and amounts due from non-governmental entities/persons

169,473,517 72,686,319 36,372,780 28,194,240 27,486,739 4,733,440 0

Investments in shares and other securities 18,292,591 14,469,275 0 0 357,926 0 3,465,390

Due from subsidiaries and affiliates 2,428,333 0 0 0 0 0 2,428,333

Other accounts receivable 48,560,024 48,560,024 0 0 0 0 0

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

Statutory deposit 35,798,262 904,447 746,098 1,416,632 3,465,832 29,265,253 0

Other assets 38,755,778 11,338,982 823 12,866 25,337,912 0 2,065,195

481,449,140 306,596,085 37,119,701 29,623,738 56,648,409 33,998,693 17,462,514

Liabilities

Due to banks and other credit institutions (91,897,010) (80,891,744) 0 (11,005,266) 0 0 0

Customers' deposits (65,532,014) (3,907,528) (3,907,538) (7,419,297) (18,151,606) (32,146,045) 0

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

Provisions and other liabilities (8,692,291) 0 0 0 0 0 (8,692,291)

Provisions for employees' termination and pension benefits

(946,079) 0 0 0 0 0 (946,078)

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 (percentage) 0 1,349 140 (5) 130 (1,746) (83)

Accumulated gap to regulatory capital ratio (percentage) 0 1,349 1,489 1,485 1,614 (131) (215)

Gap to regulatory capital ratio base for other contingency ratios (percentage)

0 1,724 180 (6) 166 (2,232) (107)

Accumulated gap to regulatory capital base for other contingency ratios (percentage)

0 1,724 1,904 1,898 2,064 (168) (275)

1. Cash and cash equivalent mean cash amounts, participation bonds and similar items with an active cash-traded market.

2. Net cash assets mean cash and cash equivalent, investment papers/certificates with an active cash-traded market less bank deposits, issued debt securities, other loans and liabilities which will mature (fall due) by next month.

3. Demand deposits include the deposits without any contractual maturity such as current accounts, savings accounts and current interest-free accounts and …


60-4-5-4- Analyzing the contractual maturities of financial liabilities

60-4-5-4-1- The table below shows the maturity of financial liabilities based on the maturity specified in the contract.

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.

2019






Liabilities

Due to banks and other credit institutions (91,897,010) (76,457,541) (8,120,984) (1,906,320) 0 0 (5,412,166)

Customers' deposits (65,532,014) 0 0 (65,532,014)

Debt securities 0 0 0

Loans received from the National Development Fund

0 0 0

Investment depositors' equity (298,775,962) (20,644,181) (8,609,462) (124,806,633) (140,033) 0 (144,575,653)

(456,204,986) (97,101,722) (16,730,446) (126,712,953) (140,033) 0 (215,519,833)

2018






Liabilities

Due to banks and other credit institutions (9,014,314) (1,002,136) (1,965,959) (126,136) 0 0 (5,920,084)

Customers' deposits (26,399,333) 0 0 0 0 0 (26,399,333)

Debt securities 0 0 0 0 0 0


0 0 0 0 0 0

Investment depositors' equity (254,382,253) (19,130,558) (17,127,876) (111,272,948) (847,371) 0 (106,003,501)

(289,795,900) (20,132,694) (19,093,835) (111,399,084) (847,371) 0 (138,322,918)

2019






Liabilities and deposits

Due to banks and other credit institutions (86,484,845) (76,457,541) (8,120,984) (1,906,320) 0 0 0




0 0 0 0 0 0 0

Investment depositors' equity (21,213,796) (12,005,911) (2,022,571) (6,115,113) 0 0 (1,070,201)

(138,300,424) (88,463,452) (10,143,555) (8,021,433) 0 0 (31,671,984)

2018







Due to banks and other credit institutions (3,094,230) (1,002,136) (1,965,959) (126,136) 0 0 0




0 0 0 0 0 0 0

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)

2018






Assets

Cash in hand 36,749,077 36,749,077 0 0 0 0 0

Due from banks and other credit institutions 10,687,731 10,687,731 0 0 0 0 0


Loans granted to and amounts due from governmental entities 0 0 0 0 0 0 0


137,136,638 66,821,742 24,688,083 24,696,358 15,163,944 5,766,511 0

Investments in shares and other securities 13,435,948 8,537,811 850 55 3,391,026 0 1,506,206


Other accounts receivable 40,359,781 40,359,781 0 0 0 0 0



Statutory deposit 27,478,565 672,025 460,160 873,715 2,137,567 23,335,099 0

Other assets 35,452,920 8,149,548 1,070 14,445 25,716,867 0 1,570,990

309,418,470 171,977,715 25,150,163 25,584,573 46,409,403 29,101,610 11,195,006

Liabilities

Due to banks and other credit institutions (9,014,314) (5,498,777) 0 (3,515,538) 0 0 0

Customers' deposits (26,399,333) (1,574,134) (1,574,137) (2,988,837) (7,312,308) (12,949,917) 0





Provisions for employees' termination and pension benefits

(691,032) 0 0 0 0 0 (691,032)

Investment depositors' equity (254,382,253) (5,292,756) (3,127,867) (5,938,960) (14,529,784) (225,492,886) 0

Total liabilities (299,007,488) (12,365,667) (4,702,004) (12,443,335) (21,842,092) (238,442,803) (9,211,588)


Total cash outflow from off-balance items (23,841,989) (8,344,696) (5,960,497) (3,576,298) (1,192,099) (1,192,099) (3,576,298)

Total liabilities, shareholders' equity and off-line items (333,260,459) (20,710,363) (10,662,501) (16,019,633) (23,034,191) (239,634,902) (23,198,868)

Gap (23,841,989) 151,267,352 14,487,662 9,564,940 23,375,212 (210,533,292) (12,003,861)

Accumulated gap (23,841,989) 151,267,352 165,755,013 175,319,953 198,695,165 (11,838,127) (23,841,989)

Gap to regulatory capital ratio (percentage) 0 1,545.8 148.0 97.7 238.9 (2.151) (123)

Accumulated gap to regulatory capital ratio (percentage) 0 1,545.8 1,693.8 1,791.5 2,030.4 (121.0) (243.6)

Gap to regulatory capital ratio based on other contingency ratios (percentage)

0 1,271.9 121.8 80.4 196.5 (1.770) (101)

Accumulated gap to regulatory capital base for other contingency ratios (percentage)

0 1,271.9 1,393.7 1,474.2 1,670.7 (99.5) (2.005)


1. Possible change in market price has been calculated for a -10day period.

2. Effect on profit and loss at market price has been calculated for a -10day period.

2019 2018

Type of investmentPossible change in market price1

Effect on profit and loss2

Possible change in market price

Effect on profit and loss

Percentage Rls(m) Percentage Rls(m)

Investment in quickly marketable shares (-2.3,4.5) 4,299 (-3.3,3.6) (1096)

Investment in units of mutual funds (-1.9,3.1) 1,982 (-1.7,1.9) 278

60-4-6- Crisis contingency plan (liquidity stress test)

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 plan for the stress test project is executed with the aim of studying and identifying the factors creating liquidity crisis in the bank by using the previous studies, determining the major risk factors, shock and its impact on 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 maintaining an appropriate level of liquidity in response to cash outflows and avoiding the source funding with substantial expenses.

During the recent financial crisis, the liquidity risk has been the main focus of attention in that, it has revealed how a crisis can accelerate the process of liquidity shortage in the market among the banks and even deter other large institutions from their operations. Previous to such financial crisis, there was no liquidity crisis test performed by any banks for the historical evidence did not indicate any sign of liquidity risk crisis on the grounds of liquidity events.

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 as follows:

• 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 will happen less quickly. As such, the borrowers will have the sources at their disposal for a longer period of time.

• Scenario 2: In this scenario it is assumed that outflow of sources by depositors will happen more quickly. As such, the inflow of new sources and return of sources by lenders will not cover the outflow of sources.

• Scenario 3: In this scenario, it is assumed that outflow of sources by depositors will increase and simultaneously return of sources by borrowers will slide out of normal conditions.

One of the most applicable ratios for testing the liquidity crisis is the LCR (Liquidity Coverage Ratio). To define a hypothetical scenario regarding LCR, it will be imperative to exercise hypothetical shocks to the inflow and outflow of assets and measure their impact on this ratio and crisis borderline.

Under normal circumstances and considering the background, the liquidity ratios including LCR have never reached the crisis borderline. Therefore, our scenario will be built on a hypothetical situation and not on historical data. There are various assumptions which may influence the occurrence of crisis including the external factors such as changes in inflation rate, foreign currency translation, housing price indexes, blocking Shetab payment system by the CBI and…

The impact of each externally exogenous variables on the balance sheet ratios and increase in the claims ratio 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- Market risk

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 portfolio revenues of a financial institution as a result of changes in market situation such as asset prices, interest rates, market volatility and market liquidity. The market risk will probably emerge when a financial institution is actively engaged in trading assets, liabilities and derivative instruments and not when such items are held for long-term investments, financing and hedging purposes.

60-5-2- Executive units charged with market risk management

Saman Bank firmly believes in active management of market risk and with this view in mind, it has devised a coherent structure to actively manage such risks. In this structure, the board of directors, Senior Risk Committee, Resource Allocation Committee (ALCO), Investment Commission, Investment Affairs Division, 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);

• 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);

• Deputy for Investment and Affiliates – for a transaction amount from 3 billion Rials up to 30 billion Rials in a day and less than 5% of the investee company shares;

• Investment Affairs Manager – for a transaction amount from 0.2 to 3 billion Rials in a day;

• Investment expert – for a transaction amount up to the limit of 200 million.

Foreign currencies

• The International Division and, more professionally, the foreign exchanges office are responsible for decision-making on the authorized limits of transactions;

• In certain cases at the weekly commissions held at the International Division, the board chairperson and CEO will participate in decision-making process as deemed proper by the bank’s special and mega policies.

60-5-3- Methods of measuring the market risk

The bank trading portfolio is made up of two segments:

• Shares/stocks

• Foreign exchange open positions

In evaluating the market risk of shares, the value at-risk of total shares portfolio with a confidence level of 99% will be calculated.

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 regards the foreign exchange market risk, the Forex open position for the total portfolio as well as the degree of positive/negative open position of each of the currencies and the amount of required capital for the Forex risk coverage and value-at-risk of foreign currency portfolio, the historical simulation method will also be used. The open position of a foreign currency will include the absolute value of the following items:

A. The rial equivalent of the difference between forex assets and liabilities in any currency entered in the online accounts of balance sheet;

B. The rial equivalent of the difference between the bank’s and customers’ obligations in any currency entered in the off-line accounts of balance sheet.

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 aggregate currencies (positive or negative) is maximum up to 30% of the bank base capital.

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 value, the level of value-at-risk for investment in shares and other market-priced investments have been illustrated in the table below:


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00

00

Loan

s gr

ante

d to

and

am

ount

s du

e fr

om g

over

nmen

tal e

ntiti

es0

00

00

00

0

Loan

s gr

ante

d to

and

am

ount

s du

e fr

om n

on-g

over

nmen

tal e

ntiti

es/p

erso

ns46

6,62

362

,875

,509

00

3,79

3,08

41,

708,

200

677

0

Inve

stm

ent i

n sh

ares

and

oth

er s

ecur

ities

00

00

00

00

Due

from

sub

sidi

arie

s an

d af

filia

tes

00

00

00

00

Oth

er a

ccou

nts

reci

evab

le0

00

00

00

0

Tang

ible

fixe

d as

sets

00

00

00

00

Inta

ngib

le a

sset

s0

00

00

00

0

Stat

utor

y de

posi

t0

00

00

00

0

Oth

er a

sset

s33

,474

,150

173,

967,

935

00

060

,013

24,1

42,4

100

Tota

l for

ex a

sset

s11

3,09

9,66

187

4,35

4,57

686

5,60

05,

958,

941

4,10

8,27

9,45

413

8,73

6,12

1,36

22,

520,

238,

448

0

Cus

omer

s' li

abili

ties

for

LCs

029

,309

,382

02,

082,

546

(0)

2,91

7,15

6,99

117

,927

,424

0

Cus

omer

s' li

abili

ties

for

LGs

issu

ed0

16,2

35,6

8113

8,33

40

00

00

Oth

er c

usto

mer

s lia

bilit

ies

00

00

00

00

Cus

tom

ers'

tota

l lia

bilit

ies

in F

orex

045

,545

,063

138,

334

2,08

2,54

6(0

)2,

917,

156,

991

17,9

27,4

240

Tota

l cus

tom

ers'

ass

ets

and

liabi

litie

s in

For

ex11

3,09

9,66

191

9,89

9,63

91,

003,

934

8,04

1,48

74,

108,

279,

454

141,

653,

278,

353

2,53

8,16

5,87

20

Ria

l equ

ival

ent o

f tot

al c

usto

mer

s' a

sset

s an

d lia

bilit

ies

in F

orex

-Rls

(M)

4,75

0,18

5,77

3,34

043

,840

,576

,975

,446

55,9

91,3

94,7

7833

7,56

5,52

1,13

71,

550,

793,

328,

296

87,1

16,7

66,1

87,0

4615

,876

,227

,527

,296

7,76

0,56

8,14

4,41

5

Due

to b

anks

and

oth

er c

redi

t ins

titut

ions

(7,8

11,7

18)

(293

,061

,880

)(1

,493

)(3

20,5

91)

(262

,949

,782

)(1

32,8

84,6

85,6

46)

00

Cus

omer

s' d

epos

its(7

,960

,427

)(1

89,3

95,0

79)

(222

,434

)(5

4,97

4)(3

,799

,334

,010

)(4

,495

,890

,625

)(2

,340

,577

,431

)0

Div

iden

ds p

ayab

le0

00

00

00

0

Deb

t sec

uriti

es0

00

00

00

0

Pro

visi

on fo

r co

rpor

atio

n ta

x0

00

00

00

0

Pro

visi

ons

and

othe

r lia

bilit

ies

(7,3

58,5

97)

(12,

622,

692)

00

0(2

,628

,000

)0

0

Inve

stm

ent d

epos

itors

' equ

ity(1

04,1

08,6

94)

(330

,046

,533

)(3

54,0

18)

(5,0

04)

(41,

781,

522)

0(1

,000

)0

Tota

l for

ex o

blig

atio

ns(1

27,2

39,4

35)

(825

,126

,184

)(5

77,9

45)

(380

,570

)(4

,104

,065

,314

)(1

37,3

83,2

04,2

71)

(2,3

40,5

78,4

31)

0

Ban

k's

oblig

atio

ns fo

r LC

s0

(29,

309,

382)

0(2

,082

,546

)0

(2,9

17,1

56,9

91)

(17,

927,

424)

0

Ban

k's

oblig

atio

ns fo

r LG

s is

sued

0(1

6,23

5,68

1)(1

38,3

34)

00

00

0

Oth

er b

ank'

s lia

bilit

ies

00

00

00

00

Tota

l ban

k's

liabi

litie

s in

For

ex0

(45,

545,

063)

(138

,334

)(2

,082

,546

)0

(2,9

17,1

56,9

91)

(17,

927,

424)

0

Tota

l ban

k's

debt

s an

d lia

bilit

ies

in F

orex

(127

,239

,435

)(8

70,6

71,2

47)

(716

,279

)(2

,463

,115

)(4

,104

,065

,314

)(1

40,3

00,3

61,2

61)

(2,3

58,5

05,8

56)

0

Ria

l equ

ival

ent o

f tot

al b

ank'

s de

bts

and

liabi

litie

s in

For

ex-R

ls(M

)(5

,344

,056

,277

,980

)(4

1,49

4,45

0,30

0,48

7)(3

9,94

8,29

2,31

0)(1

03,3

96,6

58,2

61)

(1,5

49,2

02,5

74,5

97)

(86,

284,

722,

175,

718)

(14,

752,

454,

126,

465)

(4,6

05,9

76,6

45,5

64)

Net

ope

n fo

rex

posi

tion

(long

/sho

rt) o

f eac

h cu

rren

cy a

s at

Mar

ch 2

0, 2

019

(14,

139,

774)

49,2

28,3

9128

7,65

55,

578,

371

4,21

4,14

01,

352,

917,

092

179,

660,

016

0

Ria

l equ

ival

ent o

f net

ope

n fo

rex

posi

tion

(long

/sho

rt) o

f eac

h cu

rren

cy a

s at

Mar

ch 2

0, 2

019-

Rls

(M)

(593

,871

)2,

346,

127

16,0

4323

4,16

91,

591

832,

044

1,12

3,77

33,

154,

591

Ope

n po

sitio

n of

eac

h cu

rren

cy to

reg

ulat

ory

capi

tal a

t Mar

ch 2

0, 2

019-

(per

cent

age)

(3.9

)15

.40.

11.

50.

05.

57.

420

.7

Ope

n po

sitio

n of

eac

h cu

rren

cy to

reg

ulat

ory

capi

tal b

ase

for

othe

r co

ntin

genc

y ra

tios

at M

arch

20,

201

6- (p

erce

ntag

e)(5

)19

.70.

12.

00.

07.

09.

426

.5

US

Dol

lar

Euro

UK

Pou

ndSw

iss

Fran

cJa

pane

se Y

enTu

rkis

h Li

ra O

ther

fore

ign

curr

enci

es

Cas

h in

han

d22

,535

,010

6,70

4,99

475

,269

00

2,61

50

Due

from

ban

ks a

nd o

ther

cre

dit i

nstit

utio

ns39

,360

,045

433,

941,

585

927,

298

36,7

06,6

105,

348,

228,

174

100,

985,

008

0

Due

from

the

gove

rnm

ent

00

00

00

0

Loan

s gr

ante

d to

and

am

ount

s du

e fr

om g

over

nmen

tal e

ntiti

es0

00

00

00

Loan

s gr

ante

d to

and

am

ount

s du

e fr

om n

on-g

over

nmen

tal e

ntiti

es/p

erso

ns19

,274

,018

144,

670,

935

00

22,9

87,4

010

0

Inve

stm

ent i

n sh

ares

and

oth

er s

ecur

ities

00

00

00

0

Due

from

sub

sidi

arie

s an

d af

filia

tes

00

00

00

0

Oth

er a

ccou

nts

reci

evab

le0

00

00

00

Tang

ible

fixe

d as

sets

00

00

00

0

Inta

ngib

le a

sset

s0

00

00

00

Stat

utor

y de

posi

t0

00

00

00

Oth

er a

sset

s22

,944

,708

114,

124,

808

1,66

30

078

,720

0

Tota

l for

ex a

sset

s10

4,11

3,78

269

9,44

2,32

21,

004,

230

36,7

06,6

105,

371,

215,

575

101,

066,

343

0

Cus

omer

s' li

abili

ties

for

LCs

082

,580

,741

03,

321,

886

191,

806,

819

193,

373,

078

0

Cus

omer

s' li

abili

ties

for

LGs

issu

ed0

34,5

03,6

6213

8,33

40

00

0

Oth

er c

usto

mer

s lia

bilit

ies

00

00

00

0

Cus

tom

ers'

tota

l lia

bilit

ies

in F

orex

011

7,08

4,40

413

8,33

43,

321,

886

191,

806,

819

193,

373,

078

0

Tota

l cus

tom

ers'

ass

ets

and

liabi

litie

s in

For

ex10

4,11

3,78

281

6,52

6,72

61,

142,

564

40,0

28,4

965,

563,

022,

394

294,

439,

421

0

Ria

l equ

ival

ent o

f tot

al c

usto

mer

s' a

sset

s an

d lia

bilit

ies

in F

orex

-Rls

(M)

3,92

4,04

8,42

8,88

137

,763

,544

,551

,237

59,9

82,3

08,0

731,

582,

206,

360,

206

1,98

1,65

9,83

7,19

12,

829,

268,

398,

503

7,43

0,57

3,07

0,73

5

Due

to b

anks

and

oth

er c

redi

t ins

titut

ions

(5,9

46,0

24)

(95,

100,

355)

(1,4

93)

(320

,591

)(2

,728

,184

)(5

,165

,001

)0

Cus

omer

s' d

epos

its(5

,671

,694

)(9

5,45

0,58

3)(1

13,6

31)

(164

,682

)(7

1,71

7,70

5)(2

9,61

2,26

8)0

Div

iden

ds p

ayab

le0

00

00

00

Deb

t sec

uriti

es0

00

00

00

Pro

visi

on fo

r co

rpor

atio

n ta

x0

00

00

00

Pro

visi

ons

and

othe

r lia

bilit

ies

(4,4

70,8

88)

(7,6

70,2

56)

(1)

(145

,967

)0

00

Inve

stm

ent d

epos

itors

' equ

ity(1

19,5

43,6

15)

(411

,947

,233

)(6

08,5

14)

(879

,024

)(6

,057

,357

)(1

,222

,132

)0

Tota

l for

ex o

blig

atio

ns(1

35,6

32,2

21)

(610

,168

,427

)(7

23,6

39)

(1,5

10,2

64)

(80,

503,

246)

(35,

999,

401)

Ban

k's

oblig

atio

ns fo

r LC

s0

(82,

580,

741)

0(3

,321

,886

)(1

91,8

06,8

19)

(193

,373

,078

)0

Ban

k's

oblig

atio

ns fo

r LG

s is

sued

0(3

4,50

3,66

2)(1

38,3

34)

00

00

Oth

er b

ank'

s lia

bilit

ies

00

00

00

0

Tota

l ban

k's

liabi

litie

s in

For

ex0

(117

,084

,404

)(1

38,3

34)

(3,3

21,8

86)

(191

,806

,819

)(1

93,3

73,0

78)

0

Tota

l ban

k's

debt

s an

d lia

bilit

ies

in F

orex

(135

,632

,221

)(7

27,2

52,8

31)

(861

,973

)(4

,832

,150

)(2

72,3

10,0

65)

(229

,372

,479

)

Ria

l equ

ival

ent o

f tot

al b

ank'

s de

bts

and

liabi

litie

s in

For

ex-R

ls(M

)(5

,111

,978

,414

,767

)(3

3,63

4,71

6,16

5,65

7)(4

5,25

1,85

0,15

4)(1

91,0

00,4

04,5

13)

(97,

002,

291,

515)

(2,2

04,0

40,1

52,2

48)

(2,0

76,8

44,3

47,1

93)

Net

ope

n fo

rex

posi

tion

(long

/sho

rt) o

f eac

h cu

rren

cy a

s at

Mar

ch 2

0, 2

019

(31,

518,

440)

89,2

73,8

9528

0,59

135

,196

,346

5,29

0,71

2,32

965

,066

,942

0

Ria

l equ

ival

ent o

f net

ope

n fo

rex

posi

tion

(long

/sho

rt) o

f eac

h cu

rren

cy a

sat

Mar

ch 2

0, 2

019-

Rls

(M)

(1,1

87,9

30)

4,12

8,82

814

,730

1,39

1,20

61,

884,

658

625,

228

5,35

3,72

9

Ope

n po

sitio

n of

eac

h cu

rren

cy to

reg

ulat

ory

capi

tal a

t Mar

ch 2

0, 2

019-

(per

cent

age)

(12.

1)42

.20.

214

.219

.36.

454

.7

Ope

n po

sitio

n of

eac

h cu

rren

cy to

reg

ulat

ory

capi

tal b

ase

for

othe

r co

ntin

genc

y ra

tios

at M

arch

20,

201

6- (p

erce

ntag

e)(1

0.0)

34.7

0.1

11.7

15.8

5.3

45.0


60-5-7- Analyzing the gap between the assets and liabilities sensitive to interest rates

2019


1 - 3 months

3 months to 1 year


Non-sensitive to interest rate


Assets

Cash in hand148,681,746 14,552,134 129,257,960 0 0 0 4,871,653

1.9% 19.6% 0 0 0 0 0

Due from banks and other credit institutions9,955,293 2,559,727 0 0 0 0 7,395,567

5.0% 19.6% 0 0 0 0 0



0 0 0 0 0 0 0


169,473,517 54,824,135 42,602,519 32,610,525 31,792,204 7,644,133 0

13.6% 18.3% 10.6% 13.1% 10.9% 9.8% 0

Investments in shares and other securities 18,292,591 0 0 0 0 0 18,292,591


Other accounts receivable 48,560,024 0 0 0 0 0 48,560,024



Statutory deposit 35,798,262 19,602,959 1,031,555 14,953,882 16,778 0 193,088

Other assets 38,755,778 0 0 0 0 0 38,755,778

Total assets 481,449,140 91,538,955 481,449,140 47,564,407 31,808,982 7,644,133 130,000,630


Due to banks and other credit institutions(91,897,010) (76,457,541) (8,120,984) (1,906,320) 0 0 (5,412,166)

3.0% 3.0% 5.4% 2.8% 0 0 0






Investment depositors' equity(298,775,962) (163,608,304) (8,609,462) (124,806,633) (140,033) 0 (1,611,530)

13.3% 9.1% 13.8% 18.8% 16.7% 0 0

Total liabilities (465,894,866) (240,065,845) (16,730,446) (126,712,952) (140,033) 0 (82,245,589)


Total liabilities and shareholders' equity (481,449,140) (240,065,845) (16,730,446) (126,712,953) (140,033) 0 (97,799,863)

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

60-5-5-1- A summary of the open forex position

60-5-5-2- Analyzing the effect of foreign exchange rate risk on profit and loss

Considering the historical simulation method and percentage of possible changes thereupon in the foreign exchange rate, the level of value-at-risk for net assets and liabilities in foreign currencies has been illustrated in the table below:

60-5-6- Capital sum required for market risk coverage

1. Possible change in market price has been calculated for a -10day period.

2. Effect on profit and loss at market price has been calculated for a -10day period.

2019 2018

Type of currencyPossible change in market price1

Effect on profit and loss2

Possible change in market price

Effect on profit and loss

Percentage Rls(m) Percentage Rls(m)

US Dollar ( -5.68 , 5.04 ) (55,097) (-0.03 ,0.49 ) (4,471)

Euro ( -6.3 , 6.51 ) 122,997 ( -1.77,2.38 ) 4,296

UK Pound ( -4.9 , 6.34 ) 954 (-1.96 , 2.71) 83

UAE Dirham ( -6.3 , 6.23 ) 41,082 (-0.07 ,0.48 ) 2,461

Japanese Yen ( -6.5 , 6.23 ) 95 (-2.25 , 2.67) 5,602

Swiss Franc ( -6.3 , 5.95 ) 13,779 (-1.73 , 2.08) 5,256

Canadian Dollar ( -5.32 , 6.56 ) (109) (-1.85 ,2.36) (7)

Australian Dollar ( -5.75 , 6.23 ) 6 (-2.31 ,2.6) (1)

Turkish Lira ( -8.76 , 9.43 ) 3,287 (-3.88 ,3.19 ) (336)

Indian Rupee ( -5.97 , 5.59 ) 46,978 (-1.1 ,1.33 ) 899

Chinese Yuan ( -6.3 , 6.04 ) 65,441 (-0.8 ,1.36 ) 3,486

Omani Rial ( -6.3 , 6.23 ) 12,246 (-0.24 ,0.54 ) 1,011

South Korean Won ( -5.34 , 5.98 ) 120,072 (-2.05 , 2.24) 10,533

371,732 28,812

Shares risk Forex risk

Measurement method Value-at-riskRequired capital reserve

Value-at-riskRequired capital reserve

Total capital reserve for market risk coverage


Historical simulation model 212,212 2,013,218 266,054 1,307,086 3,320,304

2019 2018

Rls(m) Rls(m)

Open long position of all foreign currencies 7,710,249 13,400,473

Open short position of all foreign currencies (595,781) (1,190,023)

Open forex position 7,114,468 12,210,449

Open long position of all foreign currencies to regulatory capital (percentage) 51 137

Open long position of all foreign currencies to regulatory capital base for other effective contingency ratios (percentage)

65 113

Open short position of all foreign currencies to regulatory capital (percentage) (4) (12)

Open short position of all foreign currencies to regulatory capital base for other effective contingency ratios (percentage)

(5) (10)


2018


1 - 3 months

3 months to 1 year


Non-sensitive to interest rate


Assets

Cash in hand36,749,077 2,701,763 26,522,047 691,861 0 0 6,833,406

1.4% 18.0% 0 3.9% 0 0 0

Due from banks and other credit institutions

10,687,731 3,216,057 0 0 0 0 7,471,674

5.4% 18.0% 0 0 0 0 0



0 0 0 0 0 0 0


137,136,638 53,317,765 29,774,460 29,252,423 17,961,667 6,830,323 0

15.7% 18.7% 13.2% 15.4% 12.3% 12.3% 0

Investments in shares and other securities 13,435,948 0 0 0 0 0 13,435,948


Other accounts receivable 40,359,781 0 0 0 0 0 40,359,781



Statutory deposit 27,478,565 13,283,219 1,850,166 12,019,789 91,534 0 233,858

Other assets 35,452,920 0 0 0 0 0 35,452,920

Total assets 309,418,470 72,518,804 58,146,673 41,964,072 18,053,200 6,830,323 111,905,398


Due to banks and other credit institutions(9,014,314) (1,002,136) (1,965,959) (126,136) 0 0 (5,920,084)

0.8% 2.7% 2.2% 2.0% 0 0 0






Investment depositors' equity(254,382,253) (122,969,125) (17,127,876) (111,272,948) (847,371) 0 (2,164,935)

13.9% 9.2% 19.0% 18.6% 21.3% 0 0

Total liabilities (299,007,488) (123,971,260) (19,093,835) (111,399,083) (847,371) 0 (43,695,939)


Total liabilities and shareholders' equity (309,418,470) (123,971,260) (19,093,835) (111,399,083) (847,371) 0 (54,106,921)

Gap (51,452,457) 39,052,838 (69,435,011) 17,205,830 6,830,323 57,798,476

Accumulated gap (51,452,457) (12,399,619) (81,834,630) (64,628,800) (57,798,476) 0

60-6- Operational risk

60-6-1- Definition of operational risk

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.

60-6-2- Executive units of operational risk management

Saman Bank has designed and developed a coherent framework in harmony with other departments/divisions of this bank so as to employ the scope of operational risk management in accordance with the CBI’s regulatory laws and in line with the best prevailing practices in banking industry and accordingly strives to ensure that operational risks are consistently and comprehensively identified, evaluated, measured and controlled. The following departments or divisions are involved in this process:

• Risk Department: This department acts as an executive unit for operational risk with the aim of 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 management is practiced in a unified approach which includes risk identification, risk assessment, risk indicators monitoring and further through risk mitigation plans in line with the risk appetite. As it stands, by receiving the periodic and updated reports from other executive departments which are acting in this connection, the operational risk in the bank’s key processes is monitored, measured and evaluated.

• 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 with respect to the operational processes, determine the monitoring indicators for evaluation and control as well as establishing an effective link between regulations and directives with the existing processes. This structure has been devised and developed for standardization of processes and minimization of operational events or occurrences.

• Inspection Management: This department will perform periodic inspections of operational processes at branch levels in accordance with the prevailing directives, procedures and by-laws and then will file reports on the findings of such inspections. The contents of these reports will be used as the base data for analyzing the operational events at branch levels. As such, the operational risk of branches will be assessed by the type of events documented by the Basel Committee with respect to the number (frequency) of events and the severity of possible losses as reported by the Risk Department.

• Human Capital Management: This unit’s main function is to create and promote the proper risk attitude/culture at the branch levels towards exercise of preventive controls from occurrence of operational risk damaging events.

The reports on the operational risk will be periodically reviewed by a working group or team that has been formed to remonitor risks and take decisions in respect of the operational risk management.

60-6-3- Preventive measures from occurrence of intentional and unintentional human errors

In view of the fact that one of the effective factors which may result in operating losses is typically shaped up by individuals in an organization, Saman Bank has taken a series of actions as listed below to prevent the occurrence of human intentional and unintentional events by its personnel:

• 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


60-7- Capital management

60-7-1- Regulatory capital

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.

2019 2018

Rls(m) Rls(m)

Tier 1 capital

Capital paid less funds raised out of assets revaluation reserve 7,420,323 5,575,004

Shares premium 0 0

Retained profit (loss) 983,669 106,687

Legal reserve 2,460,818 1,689,324

Contingency fund/reserve 0 0

Other reserves 3,528,218 0

Total tier 1 capital before regulatory adjustments 14,393,028 7,371,015

Less: regulatory adjustments

Copst price of treasury stock/shares 0 0

Cost of bank's shares directly purchased by affiliates at IPO and/or at capital increase stage 9 9

Intangibal asset 550,505 194,026

Minimum cost price of mutual investments in shares of credit institutions and/or non-affiliated financial institutionss

87,925 87,925

Cost price surplus to 10% of tier-1 capital as to investments in less than 10% in shares of other credit and financial institutions

0 0

Cost price surplus to 10% of shares of investee companies as to investments in more than 10% in shares of other credit and financial institutions

462,324 462,368

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

Total regulatory investments 1,399,440 894,206

Tier-1 capital after regulatory adjustments 12,993,588 6,476,809

Tier 2 capital

Debt due to issuance of debt securities by financial institutions and their uses and other liabilities under applicable rules

0 0

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

Measurement method amount of capital exposed to operational risk

Rls(m)

Base index method 1,204,900

capital adequacy ratio as required by the Basel II guidelines. Additionally, Saman Bank is currently striving to 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 identification and assessment tools are listed below:

• Using the risk self-assessment method qualitatively through interaction with directors and operational divisions of the bank;

• Using the findings and collected data in connection with adverse operational risk events in the bank’s daily operations resulting from regular inspection and auditing;

• Using the risk key indicators in the important processes so as to conduct a survey of the operational risk trends.

60-6-6- Mechanisms for controlling and monitoring operational risk

Mechanism for controlling operational risk

Upon assessment of operational risk, the bank will determine which categories of risks it may accept or control. The control of operational risk shall take place through full cooperation with respective executive departments. The key measures taken in this area include identification of the processes bottleneck which is 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 incidents.

Mechanism for monitoring operational risk

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 periods. During each period, the amount of resources exposed to operational risk, frequency and severity of the effect of risk factors, key risk indicators and further the degree of efficiency and effectiveness of current controls will be reviewed and monitored.

60-6-7- The capital sum required for operational risk coverage

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:


2019

2018

Am

ount

Con

vers

ion

fact

or

Adj

uste

d am

ount

w

ith

coll

ater

als

and

conv

ersi

on fa

ctor

sR

isk

fact

orA

sset

s an

d lia

bilit

ies

Req

uire

d ca

pita

lA

sset

s an

d lia

bilit

ies

Req

uire

d ca

pita

l

Rls

(m)

Per

cent

age

Rls

(m)

Per

cent

age

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Cas

h in

han

d (f

uds

plus

the

amou

nts

in tr

ansi

t-R

ial a

nd F

orex

)4,

459,

276

100

4,45

9,27

6 0

0 0

0 0

Stat

utor

y de

posi

t pla

ce w

ith C

.B.I

35,7

98,2

62

100

35,7

98,2

62

0 0

0 0

0

Due

form

C.B

.I7,

807,

943

100

7,80

7,94

3 0

0 0

0 0

Par

ticip

ated

bon

ds is

sued

or

guar

ante

ed b

y C

.B.I

0 10

0 0

0 0

0 0

0

Due

form

ban

ks a

nd o

ther

cre

dit i

nstit

utio

ns w

ith C

AR

8%

or

high

er2,

613

100

2,61

3 20

52

3 42

50

7 41

Due

form

ban

ks a

nd o

ther

cre

dit i

nstit

utio

ns w

ith C

AR

4%

to 8

%8,

305,

777

100

8,30

5,77

7 50

4,

152,

889

332,

231

669,

657

53,5

73

Due

form

ban

ks a

nd o

ther

cre

dit i

nstit

utio

ns w

ith C

AR

2%

to 4

%1,

536

100

1,53

6 80

1,

229

98

0 0

Due

form

ban

ks a

nd o

ther

cre

dit i

nstit

utio

ns w

ith C

AR

low

er th

an 2

%0

100

0 10

0 0

0 0

0

Due

form

ban

ks a

nd o

ther

cre

dit i

nstit

utio

ns w

hose

fina

ncia

l sta

tem

ents

hav

e no

t bee

n is

sued

or

two

year

s ha

s pa

ssed

from

the

due

date

8,81

0,80

4 10

0 8,

810,

804

100

8,81

0,80

4 70

4,86

4 2,

783,

863

222,

709

Due

from

the

gove

rnm

ent (

for

faci

litie

s or

sec

uriti

es p

urch

ase)

327,

988

100

327,

988

20

65,5

98

5,24

8 67

4,22

9 53

,938

Due

from

gov

ernm

enta

l org

aniz

atio

ns a

nd c

orpo

ratio

ns a

nd p

ublic

non

-gov

ernm

enta

l ins

titut

ions

and

ent

ities

( fo

r fa

cilit

ies

and

secu

ritie

s pu

rcha

se)

0 10

0 0

100

0 0

0 0

Pri

ncip

al lo

an fo

r pa

rtne

rshi

p co

ntra

cts

(Mos

hara

kate

Mad

ani (

civi

l par

tner

ship

), M

udar

abah

, Mus

agha

t, M

uzar

a'ah

) with

com

pani

es li

sted

on

the

stoc

k Ex

chan

ge3,

329,

669

100

2,77

5,45

1 15

0 4,

163,

177

333,

054

4,51

5,93

5 36

1,27

5

Pri

ncip

al lo

an fo

r pa

rtne

rshi

p co

ntra

cts

Mos

hara

kate

Mad

ani (

civi

l par

tner

ship

), M

udar

abah

, Mus

agha

t, M

uzar

a'ah

) with

oth

er n

atur

al a

nd le

gal p

erso

ns60

,858

,524

10

0 44

,779

,658

20

0 89

,559

,315

7,

164,

745

72,4

11,5

80

5,79

2,92

6

Non

-com

mer

cial

inve

stm

ents

in c

ompa

nies

list

ed o

n th

e st

ock

Exch

ange

less

ded

uctio

n of

acc

umul

ated

val

ue

impa

irm

ent

39,7

36

100

39,7

36

300

119,

208

9,53

7 17

,232

,443

1,

378,

595

Non

-com

mer

cial

inve

stm

ents

in o

ther

com

pani

es (e

xclu

ding

cre

dit i

nstit

utio

ns a

nd c

ompa

nies

aff

iliat

ed to

no

n-fin

anci

al in

stitu

tions

) les

s de

duct

ion

of a

ccum

ulat

ed v

alue

impa

irm

ent

2,05

9,22

6 10

0 2,

059,

226

400

8,23

6,90

3 65

8,95

2 3,

114,

820

249,

186

Cos

t pri

ce o

f non

-com

mer

cial

inve

stm

ents

in o

ther

cre

dit a

nd fi

nanc

ial i

nstit

utio

ns (s

hare

hold

ing

low

er th

an

10%

and

less

than

10%

of t

ier-

1 ca

pita

l)9,

315

100

9,31

5 30

0 27

,946

2,

236

27,9

46

2,23

6

Cos

t pri

ce o

f non

-com

mer

cial

inve

stm

ents

in o

ther

cre

dit a

nd fi

nanc

ial i

nstit

utio

ns (s

hare

hold

ing

low

er th

an

10%

and

hig

her

than

10%

of t

ier-

1 ca

pita

l) up

to 1

0% o

f tie

r-2

capi

tal

0 10

0 0

300

0 0

0 0

Cos

t pri

ce o

f non

-com

mer

cial

inve

stm

ents

in o

ther

cre

dit a

nd fi

nanc

ial i

nstit

utio

ns (s

hare

hold

ing

high

er th

an

10%

) up

to 1

0% o

f cos

t pri

ce o

f ord

inar

y sh

ares

1,21

0,87

5 10

0 1,

210,

875

300

3,63

2,62

5 29

0,61

0 3,

632,

492

290,

599

Pri

ncip

al a

nd in

tere

st o

n no

n-pa

rtne

rshi

p co

ntra

cts-

for

resi

dent

ial p

rope

rtie

s49

,725

,894

10

0 14

,983

,154

50

7,

491,

577

599,

326

6,46

2,49

4 51

6,99

9

Pri

ncip

al a

nd in

tere

st o

n no

n-pa

rtne

rshi

p co

ntra

cts-

for

othe

r fa

cilit

ies

up to

1 b

illio

n ri

als

per

pers

on4,

991,

094

100

2,52

6,31

6 75

1,

894,

737

151,

579

1,64

4,58

7 13

1,56

7

Pri

ncip

al a

nd in

tere

st o

n no

n-pa

rtne

rshi

p co

ntra

cts-

from

1 to

5 b

illio

n ri

als

per

pers

on1,

137,

719

100

376,

662

100

376,

662

30,1

33

142,

715

11,4

17

Pri

ncip

al a

nd in

tere

st o

n no

n-pa

rtne

rshi

p co

ntra

cts-

from

5 to

10

billi

on r

ials

per

per

son

515,

654

100

137,

676

150

206,

514

16,5

21

81,1

10

6,48

9

Pri

ncip

al a

nd in

tere

st o

n no

n-pa

rtne

rshi

p co

ntra

cts-

over

10

billi

on r

ials

per

per

son

39,8

83,4

34

100

35,2

66,4

73

200

70,5

32,9

46

5,64

2,63

6 30

,928

,949

2,

474,

316

Net

non

-cur

rent

rec

eiva

bles

(pri

ncip

al, i

nter

est a

nd la

te p

enal

ty le

ss th

e sp

ecifi

c pr

visi

on)-

spe

cific

pri

viso

n le

ss

than

20%

of n

on-c

urre

nt b

alan

ce2,

041,

118

100

882,

004

150

1,32

3,00

6 10

5,84

0 6,

912,

414

552,

993

Net

non

-cur

rent

rec

eiva

bles

(pri

ncip

al, i

nter

est a

nd la

te p

enal

ty le

ss th

e sp

ecifi

c pr

ovis

ion)

- sp

ecifi

c pr

ovis

ion

less

than

20%

to 5

0% o

f non

-cur

rent

bal

ance

11,1

15,2

74

100

5,29

3,93

0 10

0 5,

293,

930

423,

514

740,

826

59,2

66

Net

non

-cur

rent

rec

eiva

bles

(pri

ncip

al, i

nter

est a

nd la

te p

enal

ty le

ss th

e sp

ecifi

c pr

ovis

ion)

- sp

ecifi

c pr

ovis

ion

50%

and

ove

r of

non

-cur

rent

bal

ance

46,2

82,7

39

100

16,2

03,6

27

50

8,10

1,81

4 64

8,14

5 8,

670,

446

693,

636

Non

-gor

nmen

tal p

artic

ipat

ion

bond

s15

2,14

1 10

0 15

2,14

1 10

0 15

2,14

1 12

,171

30

,788

2,

463

Am

ount

s du

e fr

om s

ubsi

diar

ies

and

affil

iate

s (c

urre

nt a

nd n

on-f

acili

ty n

atur

e)2,

428,

333

100

2,42

8,33

3 10

0 2,

428,

333

194,

267

2,92

8,84

4 23

4,30

7

Oth

er a

ccou

nts

rece

ivab

le (c

urre

nt)

3,17

4,23

1 10

0 3,

174,

231

100

3,17

4,23

1 25

3,93

8 2,

791,

218

223,

297

Net

fixe

d as

sets

8,95

3,09

1 10

0 8,

953,

091

100

8,95

3,09

1 71

6,24

7 4,

994,

940

399,

595

2019

2018

Am

ount

Con

vers

ion

fact

or

Adj

uste

d am

ount

w

ith

coll

ater

als

and

conv

ersi

on fa

ctor

s*R

isk

fact

orA

sset

s an

d lia

bilit

ies

Req

uire

d ca

pita

lA

sset

s an

d lia

bilit

ies

Req

uire

d ca

pita

l

Rls

(m)

Per

cent

age

Rls

(m)

Per

cent

age

Rls

(m)

Rls

(m)

Rls

(m)

Rls

(m)

Oth

er o

n-lin

e ite

ms

38,7

55,7

7810

0 38

,755

,778

10

0 38

,755

,778

3,

100,

462

35,4

52,9

20

2,83

6,23

4

Am

ount

due

for

loan

s: p

urch

ase

of s

ecur

ities

from

oth

er g

over

nmen

ts, c

entr

al b

anks

and

pub

lic n

on-

gove

rnm

enta

l ent

ities

in o

ther

cou

ntri

es-

rate

d A

AA

+ to

AA

-0

100

0 0

0 0

0 0

Am

ount

due

for

loan

s: p

urch

ase

of s

ecur

ities

from

oth

er g

over

nmen

ts, c

entr

al b

anks

and

pub

lic n

on-

gove

rnm

enta

l ent

ities

in o

ther

cou

ntri

es-

rate

d A

+ to

A-

010

0 0

20

0 0

0 0

Am

ount

due

for

loan

s: p

urch

ase

of s

ecur

ities

from

oth

er g

over

nmen

ts, c

entr

al b

anks

and

pub

lic n

on-

gove

rnm

enta

l ent

ities

in o

ther

cou

ntri

es-

rate

d B

BB

+ to

BB

B-

010

0 0

50

0 0

0 0

Am

ount

due

for

loan

s: p

urch

ase

of s

ecur

ities

from

oth

er g

over

nmen

ts, c

entr

al b

anks

and

pub

lic n

on-

gove

rnm

enta

l ent

ities

in o

ther

cou

ntri

es-

rate

d B

B+

to B

-0

100

0 10

0 0

0 0

0

Am

ount

due

for

loan

s: p

urch

ase

of s

ecur

ities

from

oth

er g

over

nmen

ts, c

entr

al b

anks

and

pub

lic n

on-

gove

rnm

enta

l ent

ities

in o

ther

cou

ntri

es-

rate

d lo

wer

than

B0

100

0 15

0 0

0 0

0

Am

ount

due

for

loan

s: p

urch

ase

of s

ecur

ities

from

oth

er g

over

nmen

ts, c

entr

al b

anks

and

pub

lic n

on-

gove

rnm

enta

l ent

ities

in o

ther

cou

ntri

es-

unra

ted

010

0 0

100

0 0

0 0

Am

ount

due

for

loan

s: p

urch

ase

of s

ecur

ities

from

mul

tilat

eral

dev

elop

men

t ban

ks-

rate

d A

AA

+ to

AA

-0

100

0 20

0

0 0

0

Am

ount

due

for

loan

s: p

urch

ase

of s

ecur

ities

from

mul

tilat

eral

dev

elop

men

t ban

ks-

rate

d A

+ to

A-

010

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60-7-3- Capital adequacy ratio (CAR)

The bank capital adequacy for the fiscal year ended March 20, 2019 is 3.79 percent.

60-7-2-1- Total market risk-weighted assets for the fiscal year ended March 20, 2019, for the amount of Rls. 21,020,440 million.

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.

60-7-4- The capital adequacy ratio will be raised to 4.8 when the bank’s capital increase to Rls. 16,000/- billion is materialized with the Central Bank’s approval.

60-7-5- Leverage ratio

The leverage ratio is the total shareholders’ equity to bank’s assets. The bank’s leverage ratio for the fiscal year ended March 20, 2019 is 3.2 percent.

2019 2018

Rls(m) Rls(m)

Regulatory capital base for other contingency ratios 11,892,889 11,892,889

Credit risk-weighted assets 365,477,022 242,021,627

Market risk-weighted assets 21,020,440 18,123,552

Operational risk- weighted assets 15,061,252 10,704,753

Total risk- weighted assets 401,558,714 270,849,932

Tier-I capital to risk-weighed asset ratio-percentage 3.24 2.39

Capital adequacy ratio (percentage) 3.79 3.61

2019 2018

Rls(m) Rls(m)

Total shareholders’ equity 15,554,274 10,410,982

Total assets 481,449,140 309,418,470

Leverage ratio (percentage) 3.2 3.4

2019 2018

Amount Risk factorRequuired capital

Amount Risk factorRequuired capital

Rls(m) Percentage Rls(m) Rls(m) Percentage Rls(m)

Shares 13,007,079 8.00 1,040,566 1,663,290 8.00 133,063

Total cost price of securities-specific risk 385,203 5.00 19,260 3,401,931 5.00 170,097

Securities-general risk- time remained up to one-year-maturity and less

0 0 0 10,000 0 0

Securities-general risk- time remained from 1 to 3-month maturity

0 0.2 0 50 0.2 0


0 0.4 0 800 0.4 3


0 0.7 0 55 0.7 0

Securities-general risk- time remained from 1 to 2-year maturity

350,443 1.25 4,381 0 1.25 0


34,760 1.75 608 323,026 1.75 5,653


0 2.25 0 3,068,000 2.25 69,030


0 2.75 0 0 2.75 0


0 3.25 0 0 3.25 0


0 3.75 0 0 3.75 0


0 4.5 0 0 4.5 0


0 5.25 0 0 5.25 0

Securities-general risk- time remained for over 20-year maturity

0 6.00 0 0 6.00 0

Open long position of all currencies with absolute value of open short position of all currencies whichever is higher

7,710,249 8.00 616,820 13,400,473 8.00 1,072,038

Total capital required for market risk coverage

1,681,635 1,449,884

Factor (percentage) 12.5 12.5

Market risk-weighted assets 21,020,440 18,123,552

2019 2018

Amount Risk factorCapital required for risk coverage

Amount Risk factorCapital required for 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


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 the major items of liabilities and incomes on the basis of the bank counterparty’s domicile/residence in various geographical regions.

2019

Iran Iraq UAE Other Total


Assets

Cash in hand 148,681,746 0 0 0 148,681,746

Due from banks and other credit institutions 9,955,293 0 0 0 9,955,293

Due from government 0 0 0 0 0


0 0 0 0 0


169,473,517 0 0 0 169,473,517

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

Statutory deposit 35,798,262 0 0 0 35,798,262

Tangible fixed assets 4,551,267 0 0 0 4,551,267

Intangible assets 4,952,329 0 0 0 4,952,329

Other accounts receivable 48,560,024 0 0 0 48,560,024

Other assets 38,755,778 0 0 0 38,755,778

Total assets 481,449,140 0 0 0 481,449,140

Liabilities

Due to banks and other credit istitutions (91,897,010) 0 0 0 (91,897,010)

Customers' deposits (65,532,014) 0 0 0 (65,532,014)

Debt securities 0 0 0 0 0

Investment depositors' equity (298,775,962) 0 0 0 (298,775,962)

Dividend payable (51,510) 0 0 0 (51,510)

Provision for corporation tax 0 0 0 0 0

Reserves and other liabilities (8,692,291) 0 0 0 (8,692,291)

Provisions for employees' termination benefit and pension funds

(946,078) 0 0 0 (946,078)

Total liabilities (465,894,865) 0 0 0 (465,894,865)

Total operating incomes 1,778,803 0 0 0 1,778,803

Net other incomes and expenses 3,364,489 0 0 0 3,364,489

Collaborative banking (by

proxy)

Interest freebanking

Internationalbanking

E-banking Other

activitiesTotal


Incomes earned from outside the bank

Income from loans granted and placements in other banks

26,052,122 0 590,415 0 0 26,642,537

Interest expenses on deposits (36,461,701) 0 (389,547) 0 0 (36,851,249)

Net income from loan interest and placements in other banks

(10,409,579) 0 200,868 0 0 (10,208,712)

Fee and commission incomes 1,073,146 51,887 200,531 1,067,560 0 2,393,124

Fee and commission expenses (206,410) (1,044) (8,565) (2,270,673) 0 (2,486,692)

Net income from fees and commissions 866,736 50,843 191,966 (1,203,112) 0 (93,568)

Net profit (loss) from investments 0 0 0 0 5,664,472 5,664,472

Net profit (loss) from forexexchanges/transactions

0 0 6,416,611 0 0 6,416,611

Other operating incomes 0 0 0 0 10,711,905 10,711,905

0 0 6,416,611 0 16,376,377 22,792,988

Net incomes earned from outsidethe bank (9,542,843) 50,843 6,809,444 (1,203,112) 16,376,377 12,490,708

Net incomes from interbank sectors 0 0 0 0 0 0

Total incomes from bank's operating sectors (9,542,843) 50,843 6,809,444 (1,203,112) 16,376,377 12,490,708

Expenses for doubtful debts of operating sector

(300,000) 0 0 0 0 (300,000)

Other direct expenses attributable to operating sector

0 0 0 0 0 0

Profit (loss) of each sector before non-attributable general expenses

(9,842,843) 50,843 6,809,444 (1,203,112) 16,376,377 12,190,708

General expenses non-attributable to sectors

(7,047,416)

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.

61- Operating sectors

61-1- The basis for division of sectors

The business sectors in Saman Bank include collaborative banking (by proxy), Gharzolhassaneh (interest-free) banking, international banking and electronic banking.

61-2- Information on reportable operating sectors

The information related to each of the reportable sectors has been provided in the following table. The profit before tax for each sector is used as a standard to assess the performance of that sector.


62- Disclosure about related parties transactions

62-1- Changes in major shareholders (over one percent)

During the fiscal year ended March 20, 2019, no real or legal person entered the category of shareholders over one percent by purchasing shares. Further, no natural or legal person exited from the category of shareholders over one percent by selling shares.

62-2- Transactions with directors

This bank has no record of transactions with its directors (the directors here include the managing director/CEO, members of board of directors and members of the executive board.)

62-3- Transactions with related parties during the year are as follows:

2018

Iran Iraq UAE Other Total


Assets

Cash in hand 36,749,077 0 0 0 36,749,077

Due from banks and other credit institutions 10,687,731 0 0 0 10,687,731

Due from government 0 0 0 0 0


0 0 0 0 0


137,136,638 0 0 0 137,136,638

Investments in shares and other securities 13,435,948 0 0 0 13,435,948

Due from subsidiaries and affiliates 2,928,844 0 0 0 2,928,844

Statutory deposit 27,478,565 0 0 0 27,478,565

Tangible fixed assets 2,972,625 0 0 0 2,972,625

Intangible assets 2,216,341 0 0 0 2,216,341

Other accounts receivable 40,359,781 0 0 0 40,359,781

Other assets 35,452,920 0 0 0 35,452,920

Total assets 309,418,470 0 0 0 309,418,470

Liabilities

Due to banks and other credit istitutions (9,014,314) 0 0 0 (9,014,314)

Customers' deposits (26,399,333) 0 0 0 (26,399,333)

Debt securities 0 0 0 0 0

Investment depositors' equity (254,382,253) 0 0 0 (254,382,253)

Dividend payable (51,510) 0 0 0 (51,510)

Provision for corperation tax 0 0 0 0 0

Reserves and other liabilities (8,469,046) 0 0 0 (8,469,046)

Provisions for employees' termination benefit and pension funds

(691,031) 0 0 0 (691,031)

Total liabilities (299,007,487) 0 0 0 (299,007,487)

Total operating incomes (2,765,513) 0 0 0 (2,765,513)

Net other incomes and expenses 3,083,879 0 0 0 3,083,879

Name of relatWed party Type ofRelationship Type of deal

Is it liable to article 129 of Commercial

Code?

Pricing method Totalamount

Gross profit(loss)

Balance (due)

March 20,2018

Balance (due)

March 20,2017


Subsidiaries


JBM (Joint Board Member) and Co-Group

Contracts - 6 items

Yes

Bank's by-laws and internal transactions commission

192,947

0

0 2,800

LGs issued – 4 items 0 0 111

LGs issued – 1 item 0 0 0


Co-Group

Civil partnership - 7 items

YesBank's by-laws and internal transactions commission

0

0

65,265 0

LC - 1 item 0 0 0


Loans - 6 items 0 0 0


Hafez Saman Iranian Credit Scoring


Contract - Credit reporting software


0 0 0

Contract - debt collection

0 0 0 0

Saman Brokerage

Co-Group

loans - 72 items

NoBank's by-laws and internal transactions commission

8,633,945

63,497

501,314 0

LGs issued – 2 items 0 151,674 0

LGs issued – 2 items 0 0 3,710


0 0 100,266

Muzarebeh loans - 10 items

0 0 213,189

Lease contracts - 1 item 0 0 0

Saman Financial and Economic Development Group

Co-Group Share sales NoBank's by-laws and internal transactions commission

0 0 1,920,597 1,970,676

Saman Exchange Co-Group Lease contracts YesBank's by-laws and internal transactions commission

0 0 0 9,017

Tondar Noor Co-GroupJealeh contract - 1 item


350,0001,448

319,360 0


Affiliates

Adonis Co-Group

Contracts - 6 items


296,021

14,631

77,951 2,330


0 163,190 49,141

Jealeh contract - 2 items

70,000 70,000 0


340,000 161,381 0

Saman Kish Electronic Payment




1,650,000

39,228

1,416,667 0


0 0 136,021

LGs issued – 8 items 0 1,214,408 0

LGs issued – 10 items 0 0 115,563

Lease contract 0 0 0

Lease and services contracts - 2 items

358,383 0 0

Board members

Copper Pension Fund

Board member

Loan - 1 item

Bank's by-laws and internal transactions commission

0

57

0 0

Bahram FathaliVice-chairman

0 175 0

Farideh Geraminejad

Board member

Hossein GhazaviBoard member

0 0 0

Ali NematiBoard member

Instalment sale 508 1,066 0

Ahmad Mojtahed Chairman 0 0 0


64- Performance of Gharzolhassaneh (interest-free) transactions in rial

64-1- Status of balance of Gharzolhassaneh (interest-free) sources and users

64-2- Net fees on Gharzolhasaneh (interest- free) transactions

Note 2019 2018

Rls(m) Rls(m)

Gharzolhassaneh (interest-free) deposits in rial 20-2 8,956,859 6,399,213

Total Gharzolhassaneh (interest-free) sources 8,956,859 6,399,213

Uses of interest-free savings

Loans granted in rial and amounts due from governmental entities (before provision)

Ordinary loans

Loans under note --- to the budget 0

Loans under note --- to the budget 0 0

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

Ordinary loans (1,022,325) (1,395,628)

Staff loans (13)



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)

Liquidity reserve on interst-free deposits (5%) (447,843) (319,961)

Surplus (shortage) of sources to uses of Gharzolhassaneh (interest-free deposits) 6,710,703 4,058,961

Note 2019 2018

Rls(m) Rls(m)

Fees received from interest-free loans 51,887 60,703

Prizes on interest-free deposits (1,044) (816)

Net fees on interest-free transactions 37-1 50,843 59,887

Other related parties

Aftab Tejarat Other

LGs issued – 3 items


0

0

6,473 0


Cleaning Services Contract

0 0 0

Cleaning Services Contract

181,613 0 0

Contracts - 5 items 0 0 0

Saman Insurance

Shareholder

Insurance policies


0

1,686

180,266 0

Civil partnership - 1 item

180,000 0 0

Insurance policies - 2018-19

0 0 0

LGs issued – 23 items 53,200 13,616

Behnad Bana Other

Contracts - 3 items


50,915

1,973

24,988,095 20,150,018


1,000,000 0 0

Sales contracts - real states - 43 items

0 1,002,739 5,005,875

LGs issued – 3 items 0 158,754 19,200

Personnel Savings Fund

Other

Lease contract


0 0 0 21,542

Sales contracts - real state

0 0 12,424,000 13,260,000

Kish Cell Pars Other



350,000

24,226

351,652 0

0 0 36,171Sales contracts - real state

Kala Tejarat Khalij Fars

Other



0

0

3,544,205 1,400,495

Jealeh contract - 1 item

0 0 0

Retail loans - 3 items 0 0 522,946

Jeale contract - Swiss Franc 5 items

0 0 0

Civil Partnership - 32 items

0 0 0


62-4- Balances of accounts (receivables) of related parties with whom no transactions have been conducted during the year are as follows:

63- Accumulated earnings at year-endAllocation of the year-end accumulated earnings are subject to the approval of the shareholders’ ordinary general meeting in the following circumstances:

Name of related party Type ofrelationship

Received(Paid)

Adjustments (expenses of

doubtful debtsand …)

Balance (due) atMarch 20, 2019

Balance (due) atMarch 20, 2018


Atieh Andishan Sepehr Mehr Co. Subsidiary 0 0 9,304 9,304

Atieh Andishan Sepehr SharghService Development Co.

Subsidiary (73,975) 0 284,073 210,098

Saman Financial & Electronic Development Group

Subsidiary 142,723 0 1,860,863 2,003,586

Amount

Rls(m)

Legal duties

Distribution of at least 10 percent of net profit earned in 2018-2019 under the provision of article 90 of the Commercial Code Amendment

514,329

Proposal by the board of directors

The amount of dividend proposed by the board of directors 0

Name of related party Type ofRelationship Type of deal

Is it liable to article 129 of Commercial

Code?

Pricing method Totalamount

Gross profit(loss)

Balance (due)

March 20,2018

Balance (due)

March 20,2017


186

64-3- Classification of Gharzolhassaneh (interest- free) loans by a breakdown of

the lending purposes

64-4- Classification of Gharzolhassaneh (interest- free) loans by a breakdown of

the type of customer

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

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

Ann

ual R

epor

t 201

8/19

Annual Report 2018/19