Bank Mellat: Consolidated Financial Statement - March 2021

Transcription

1. Bank Mellat (Public Joint Stock) Bank Mellat (Public Joint Stock Company) Independent auditor and legal inspector report Along with consolidated financial statement of the bank and group Fiscal year ending on March 20, 2021 Auditing organization
2. Table of Contents Title Independent Auditor ’s Brief Inspection Report Consolidated Interim Financial Statement of the Group and the Bank Page (--)to (--) -- to --
3. Emblem Islamic Republic of Iran Ministry of Economic Affairs & Finance Audit Organization No.7, Shahid Ahmadian St. Shahid Ahmad Ghasir St. Argantin Sq. Tehran Tel: +98-21-82182100 Fax: +98-21-88722435 www.audit.org.ir Independent Auditor’s Brief Inspection Report To the Board of Directors Bank Mellat (Public Joint Stock) Introduction 1- The consolidated financial statements of the group and Bank Mellat (PJSC) including balance sheets ending on March 20th, 2021 as well as profit and loss statements; comprehensive profit and loss; changes in shareholders’ equity, and cash flows as well as operational statement of the bank’s investment deposit for the fiscal year ending on the above-said date, together with explanatory notes 1-67 have been audited by this organization. Responsibility of the Board Members for Financial Statements 2- The responsibility for the preparation of the mentioned financial statements in accordance with financial accounting standards rests with the bank board members. This responsibility entails designing, implementing and maintaining internal controls relevant to preparation of the financial statements in a manner so as to this statements that are free from material misstatement, whether due to fraud or mistake. Responsibility of Auditor and Legal Inspector 3- The responsibility of this organization is to express an inform judgment with respect to the mentioned financial statements based on the conducted auditing procedures in accordance with financial accounting standards. The aforementioned standards require the organization to observe the professional behavior and organize and perform the
4. auditing procedure in a manner so as to obtain reasonable assurance that the statements are free from material distortion in the financial statements . Auditing involves implementing of procedures to obtain accounting evidence about the amounts and other disclosed information in financial statements. Choosing auditing methods will depend on the auditor's judgment, including assessing the fraud material risks whether due to fraud or mistake in financial statements. For appraisal these risks, internal controls relevant to preparation and presenting financial statements for designing proper auditing procedures for the existing circumstances, and not for the purpose of expressing an opinion on the effectiveness of the bank's internal controls. Auditing also includes assessing the appropriateness of accounting procedures adopted and the reasonableness of the conducted accounting estimates made by the board members, as well as assessing the overall presentation of the financial statements. This organization believes that the obtained audit evidence is sufficient and appropriate for an informed judgment and qualified opinion with regards to the consolidated financial statements of the group and bank. Also, this auditing organization, in addition to perform the responsibilities of the legal inspector, is obliged to report to the ordinary general assembly of the stockholders of any relatable required information as well as any instances of non-observance of legal obligations laid down in the monetary and banking regulations, amendments of the provisions of the commercial law, and the provisions of the bank's article of association. Basic for qualified opinion 4- On the basis of the provisions of clause (34) of articles of association of the banks staff retirement fund, the deficits in the cash resources should be secured by the respective banks that are the members of this fund. On the basis of the actuary calculations, share of the reporting bank from fund's deficits resources is set the sum of IRR 270,313 billion (on March 20th, 2020 IRR 121,844 billion). It is worth to note that the bank whilst objecting to criteria subject to actuary calculations during the period of the bank privatization (March 20th, 2009) and thereafter, has considered sum of IRR 41,222 billion (explanatory note 26 of financial statements) has settled or reserved in the accounts. With due regard to the aforementioned, computing sufficient reserves in the accounts is necessary, but determining the exact amount will subject to clarification of the bank’s objections.
5. 5- Dues from government heading (explanatory note 11) includes sum of IRR 7,720 Billion (IRR 26,252 Billion in previous year) the interest for delay in payment of the previous years and sum of IRR 8,724 Billion actuary expense before privatization is not considered as dues from government due to Lack of compliance with resolution No. H 53875 T/M/96-9343 dated August 14th, 2017 of board of ministers and failure to provide relevant documents. Also, adjustment of the recognized profit of the previous year leads to decrease the income of current year in sum of IRR 13,297 Billion, while the this adjustment of the recognized profit should be posted to debit account of the retained earning at the beginning of the year. Accounts adjustment due to the abovementioned instances are necessary and in case of amendment, retained earning at the fiscal year and dues from government will decrease to IRR 26,949 Billion and IRR 16,444 Billion respectively also the profit of the current year will increase to IRR 10,505 Billion. 6- Classification of the banks’ dues and calculating doubtful loans reserve are not done properly and the requirements of the relevant guidelines regarding classification and applying coefficients and collaterals are not fully observed. Furthermore, due to translation of non-current FX dues, the bank has recognized sum of IRR 172,429 Billion as translation profit and without providing relevant details and collaterals, has calculated the cost of doubtful receivables equal to the above amount (explanatory notes 45 and 46). Furthermore, the provisions of instruction for recognizing facilities income have not been observed for some contracts. Given above, Adjustment of translation profit and doubtful loans reserves is necessary in compliance with accounting standards and in accordance with the relevant instructions. However, it is not possible for this organization to determine its definite amount in the current situation. 7- As stated in explanatory note 24 of the financial statements, the total amount of IRR 147,951 Billion has been claimed for operating tax of 2017 and 2018 based on the primary tax dispute resolution board and recognition paper. While the bank objecting to the principles of recognition, has considered or paid IRR 54,129 billion tax debts in the accounts in this regard. Likewise, for current year operating tax sum of IRR 36,355 billion tax debts has been considered in the accounts based on income subject to instrumental tax. Given above and bank’s tax records (demanding translation profit tax with NIMA rate) it is necessary to consider additional tax debt in the accounts, but determining the exact
6. amount is subject to the announcing final opinion of the tax affairs administration . Meanwhile, sum of IRR 104,000 billion operating tax adjustment of previous years is considered in the account of reporting fiscal year that in compliance with accounting standards, it is necessary to adjust and assess the comparative figures of financial statements. 8- During reporting fiscal year, sum of IRR 18,053 billion regarding to incomes of FX participation bonds of Pars oil and gas company and sum of IRR 12,192 billion the income of granted facilities to Petrosina Aria, oil industries engineering and construction (explanatory note 12) have not been recognized. In case of adjusting accounts, the profit of current year and granted facilities to public sectors (explanatory note 12) will be increased to IRR 30,245 billion. 9- According to explanatory notes 8-15, 33 and 45 of the financial statements, based on the letter No.98/450508 issued by the CBI, the monetary and foreign currency assets and liabilities of the bank mainly have been translated with rate of IRR 190,000 for per EUR and IRR 159,000 for per USD (previous fiscal year IRR 102,000 for per EUR and IRR 90,000 for per USD) and other foreign currencies have been translated based on its parity rate with EUR by the end of the year and in this regard IRR 416,379 Billion(previous fiscal year sum of IRR 109,964 billion) has been transferred to the net profit (loss) of foreign currency exchanges and transactions and sum of IRR 17,175 Billion (previous fiscal year sum of IRR 5,985 billion) has been set to foreign currency translation difference of foreign operations. According to accounting standards, if there are several rates for one foreign currency, the rate will be used for translation that future cash flows due to transactions or balance of the relevant account will be settled based on that rate. So, the abovementioned method does not in compliance with accounting standards and therefore, it is necessary to amend financial statements for the abovementioned items, but currently, due to the lack of access to the to the accessible foreign currency rate determining the necessary adjustments over the financial statements is not clear for this organization. 10- Investments and partnership in the group (explanatory not 14-4-1) includes sum of IRR 20,149 billion for Mellat market making exclusive investment fund units price, that in observing accounting standards requirements the abovementioned amount should be
7. reflected as treasury shares in shareholders ’ equity. Meanwhile, for changing in shareholder’s equity of interests with no controlling rights in subsidiary commercial units, the required adjustment has not been done regarding the reflection of the difference of interests with no controlling rights adjustment amount and fair value of paid or received difference directly in shareholders’ equity. 11- Requirements of accounting standards regarding the providing and disclosing in some cases such as providing financial statements at the date of beginning of the previous fiscal year with respect to reviewing of financial statements, providing annual adjustments in comprehensive profit (loss), proper providing of cash flows from operating activities and financing, applying of special value method regarding investments in affiliated companies, accurate classification of marketable investments, group fixed assets table in each category breakdown, disclosure of effects of income tax accounting standard and implementing of the similar procedure regarding accounting of marketable investments of the group has not been observed. Also, the requirements of disclosing of important risk available in banking industry including test results and liquidity adequacy analysis, analysis of the impact of investments and foreign currency rate on profit and loss statement and facilities information and liabilities of the relevant individuals also have not been observed. 12- Investment and partnerships heading ( explanatory note 14) the following issues could be proposed 12-1- This organization has not been provided by audited details and financial statements of other foreign investments in sum of IRR 1,531 billion equal to EUR 172.1 million (EUR 219.6 million previous fiscal year ) and also, audited financial statements of PIB and FEE bank. Furthermore, dues from subsidiaries and affiliated companies includes sum of IRR 4,079 billion (explanatory not 15-1) is related to realized profit shares of abovementioned investments of the previous years. 12-2- Mellat financial group subsidiary company has purchased a number of listed companies’ shares in sum of IRR 4,920 billion as proxy from affiliated individuals in the form of memorandum of understanding and has realized sum of IRR 1,321 billion as profit shares for current year. According to the provisions of the notification number 96/b/440/023 dated August 19th, 2017 of securities and exchange organization and part B
8. of article 36 of permanent orders of the country development program , such over-thecounter transactions are invalid. 13- Given above, it is not possible for this organization to determine the probable effects of access to the required evidence on the Group's financial statements.The answer of the requested confirmation from National development fund due to received facilities and relevant profit share equal to IRR 1,494,453 billion (explanatory note 25), OSF in sum of IRR 3,699 billion (explanatory note 21), FX partnership bonds of Pars oil and gas company (explanatory note 12) in sum of IRR 253,336 billion and 69 FX accounts in sum of IRR127,676 billion and also conformation of bank’s lawyer have not received yet. Also, the answer of the confirmation of the cash headings, granted facilities and dues from public sectors and other assets (explanatory notes 9,12 and 20 of the financial statements), sums of IRR 5,346 billion and IRR 28,603 billion are respectively more than and less than stated sums in the accounts. Also, despite of launching core banking system, this system is not fully executed for annual cases status and FX facilities and consequently items in transit are not resolved on time. Items in transit heading (explanatory note 20-4) including numerous debit and credit unreconciled items (FX and Rial) that are not resolved until the date of this report. Proving abovementioned amounts through other accounting methods has not been available yet. Given above Determining the probable effects of resolving the said discrepancy and receiving confirmations as well as resolving annual unreconciled items on reporting financial statements has not been possible for this organization. Qualified opinion 14- This organization believes that, except the effects of provisions stated in clauses 4 to 11 and also except the probable impacts of stated provisions in clauses 12 and 13, of the abovementioned financial statements, properly shows the financial status of the group and Bank (PJSC) on March 20th, 2021 and financial operation and cash flows of the group and the bank for the fiscal year ending on the abovementioned date from all material aspects according to accounting standards. Emphasize on specific issues 15- As explained in explanatory notes 10-2-2-1 and 21 of financial statements, the bank by registering foreign currency liabilities with reference rate in CBI system (subject of
9. foreign currency FX liabilities instruction bearing No 60 /1015 dated December 7th, 2013 on the CBI), the reporting bank claims for allocating USD 1,169 Million of that bank and in this regard sum of IRR 36,147 billion ( equal to translation rate until March 20th, 2016) has been considered as dues from the CBI and sum of IRR17,805 billion (equal to translation with reference rate) has been considered as dues to the CBI (explanatory note 21), and the difference in sum of IRR 18,342 billion has been considered to translation profit of the previous years. Furthermore, in 2011 sum of IRR 2,537 billion (explanatory note 10-2-2-2) withdrawn from the account by the CBI and deposited to treasury account. Resolving the above amounts requires coordination with the government and the CBI that despite the follow-ups, the result has not been determined yet. The opinion of this organization is not qualified by the provisions of this paragraph. 16- As explained in explanatory note 10-2-2-4 according to the resolution No. H56962 T/164537 dated March 16th, 2020 of the council of ministers, the difference of the foreign currency cost price and announced rate by the CBI on March 20th, 2020 (IRR 90,000 per USD) In line with the implementation of article 20, removal of production barriers, regarding customers’ FX settled facilities out of OSF sum of IRR 55,243 billion has posted to dues from the CBI account (explanatory note 10) Its acceptance in accordance with the said resolution requires special consideration. The opinion of this organization is not qualified by the provisions of this paragraph. Other Information 17- The board members of the bank would be responsible for “other information”. Other information includes the existing information in the explanatory report of the management. The opinion of this organization for the financial statements does not include giving opinion about “other information” and no opinion is given about it.The responsibility of this organization is studying “other information” in order to recognize its material discrepancy with the financial statements or by information acquired in auditing process or material distortions. If this organization concludes that there is material distortion in “other information” it shall report this issue. There is not any reportable point in this regard.
10. Report on other Legal and regulatory requirements of bank Mellat (PJSC) Report on other duties of Legal Inspector 18- The provisions of article 5 of guidelines of clause B of article 17 and provision 33 of the IRI sixth five-year development program based on prohibition of credit institutions on opening and maintaining governmental accounts for executive organizations including National Iranian Oil Company, National Iranian Oil Refining and Distribution Company, National Iranian Gas Company, and Iran University of Medical Sciences (clause A of article 20 of permanent orders law of development programs of the country) and at least 15% of the average facilities granted by non-specialized intermediary banks to the agricultural sector (according to article 5 of the executive instruction of article 47 of the law on removing competitive production obstacles and improving the financial system of the country) have not been observed. 19- The provisions of note 21 of 2016 whole country budget low and 160164 income row stated in budget low of 2017 to 2020 regarding depositing 2 percent of received income for transactions in E-banking system to the general treasury account has not been observed. 20- Capital adequacy ratio of the bank as explained in explanatory note 62-7-3 of the financial statements is calculated, based on the guidelines of calculating observing capital and capital adequacy of the credit institutions No.98/436758 dated March 7th, 2020, but the provisions of article 4-2, 4-4, 4-5, and 11 are respectively for adjusting supervisory capital, bank’s share held with affiliated sections, mutual investment in non-affiliated financial institutions, investments out of set limitations and credit risk weighed assets have not been observed. In case of observing the provisions of the abovementioned provisions and by considering the effects of the clauses 4 to 10 of this report, the mentioned ratio will be decreased. 21- We pay the attention of the general assembly of shareholders at the time of distributing profit, to the effects of the clauses 4 to 10 and considering clause 20 of this report and the provisions of article 15 of article of association that states; if the bank’s capital adequacy ratio become less than the determined amount by the CBI, merely 10 percent of the annual especial profit would be dividend and also the letter no. 98/450508 dated March 18, 2020
11. of the CBI that states the profit due to translation of the FX assets and liabilities , will not consider as the DPS and could be used for bank’s capital injection. 22- The instances of non-observance the legal requirements set in commercial law amendment and the provisions of the bank’s article of association in the reporting fiscal year are as follows: 22-1- The provisions of article 106 of the commercial law amendment and about sending memorandum of understanding copy of general assembly to companies’ registration office. 22-2- The provisions of article 119 of the commercial law amendment and 72 of article of association Based on the election of the chairman and vice-chairman of the board of directors in the first meeting of the board of directors. 22-3- Provisions of article 128 of the amendment of the commercial code regarding the sending of a copy of the minutes of the board of directors regarding the name, specifications and limits of the CEO's authorities to the company registration office and announcement in the official gazette. 22-4- Provisions of article 7 of article of association about permitted ceiling for possessing bank’s share directly or indirectly by other legal entities is maximum 5 percent (Mellat’s staff Tamin atiyeh fund 6.45 percent) and also note 1 of the mentioned provision that states; legal entities that are under the management of the state-owned section, cannot be shareholder in the bank. (Saba Tamin Investment Company has 3.7 in its ownership). 22-5- Provisions of article 11 of articles of association regarding the prohibition on the purchase of bank shares by subsidiaries (Mellat Financial Group holds 4.39% of the bank shares) 22-6- The provisions of article 114 of article of association about granting facilities to the single beneficiary and accepting commitments in his/her/its favor is merely based on the CBI framework (about Mellat financial group and Mobarakeh steel company). 22-7- Article 117 of article of association that states; the bank cannot accept its shares that belong to its shareholders for guaranteeing granted facilities or commitments (social welfare investment company).
12. 22-8- The provisions of article 118 of article of association about allocating sufficient reserve proportionate to the level of each assets in the CBI framework . 22-9- Provisions 89 of article of association regarding the announcement of the authorized signatories of all binding papers and documents and the conditions and manner of their signing to the companies’ registration office for inclusion in the gazette. 22-10- Banks following ups for performing prescribed tasks in the ordinary general meeting of shareholders dated July 21st, 2020 in addition to clauses 4 to 7, 9, 11 to 13, 15, 18, 20, 22, 25-1, 25-2, 26 to 28 of this report have not been reached to final conclusion. 23- The transactions stated in explanatory note 63-3, as all transactions subject to article 129 of trade law amendment that have been fulfilled during the reporting fiscal year and have been announced to this organization by the board members of the bank have been reviewed. About the mentioned transactions, the provisions of the abovementioned article based on taking license from the board members and nonparticipation of the beneficiary manager in voting has been observed and this organization has not noticed any evidence which indicate that the abovementioned transactions have not been fulfilled in suitable commercial conditions and ordinary procedure of bank operations. 24- This organization has reviewed the report of the board members about the activity and general status of the bank, subject to article 232 of trade act amendment that has been prepared to present to the ordinary general assembly of the shareholders. Regarding to the conducted investigations, this organization has not noticed to material instances that indicate discrepancy of financial information stated in the abovementioned report with the presented documents and papers by the board members. Report on other legal responsibilities and regulatory of auditor 25- The requirements of the securities and exchange organization during the reported fiscal year have not been observed in the following cases: 25-1 - The provisions of clause 2 of articles 7 and 10 of executive guidelines of disclosing information of listed companies in securities and exchange organization about presenting the report of the board members to the general
13. assembly , registering minute of meeting of the general assembly in companies registration office in set time and article18 of disciplinary guidelines about paying gratuitous aid upon approval of the ordinary general assembly. 25-2 The provisions of note 5 of article 4, note 2 of article 15, articles 16, 21, 28, 42 of corporate governance guideline, listed companies in Tehran securities and exchange organization about an independent board member with financial education, being independence and non-executive of the majority of the members of the appointment committee, establishment and evaluation of the effectiveness process of the bank's board of directors and relevant board members in subsidiaries and affiliates companies, establishing an independent secretariat of the board members, non-ownership of shares of parent companies by subsidiaries, disclosing material information of the board members and the CEO, specialized committees of the board of directors and its members, membership in the board of directors of other companies originally or on behalf, and the procedures of corporate governance in the bank’s website and management explanatory report. 25-3 The provisions of articles 10 and clause 3 of article 11 of the instructions for internal controls of issuers listed companies in securities and exchange organization regarding the chairmanship of the audit committee with nonexecutive board members and requirements of disclosing information and approving the transactions of affiliated persons and also the provisions of clauses 13 and 52 of requirements of internal controls governing financial reporting about designing the mechanism for achieving reasonable assurance from effectiveness of internal controls of financial reporting by audit committee, recognition, measurement and assessing the risks relevant to IT. 25-4 The provisions of articles 3, 4, and 6 of requirements of disclosing information of affiliated persons and transactions information in classification breakdown have not been observed. 25-5 Providing explanatory report in accordance with relevant criteria completely. 26- Based on explanatory note 25-2 of the financial statements, according to the provisions of “bylaw for the amount and the manner of receiving membership in deposits guarantee fund” the annual membership fee of each bank has been determined equal to minimum 0.30% and for the reporting fiscal year 0.35% of the average of weekly balance of every deposit account of the previous fiscal year up to maximum guaranteed of the fund. The bank has paid his share of the membership fee from 2014 to 2019 for the amount of IRR 7,030 Billion and it has been reserved IRR 1,861 Billion in the accounts
14. (explanatory note 25-2) for the reporting fiscal year. Controlling the calculation process and determining the abovementioned years’ membership fee, requires to fulfil special auditing. 27- Calculations of definite and on-account profit difference of investment deposits have been revealed as stated in explanatory note 39 to 42 and it has been inspected in compliance with the provisions of circular No.94/69383 issued by the CBI on June 10, 2015 except paying surplus profit over the approved rates ratified by monetary and credit council in some cases, and excluding short-term deposits of the blocked value in calculating joint-profit, we didn’t have found instances of non-observing the provisions of the abovementioned circular. 28- In implementing article 33 of executive guidelines of anti-money laundering by auditors, observing the provisions of the abovementioned law and relevant bylaws and executive guidelines in frame of noticed checklists of the relevant authority and auditing standards has been assessed by this organization. Regarding to establish anti-money laundering division in the bank’s network and performing some effective measures in this respect, the provisions of the above-stated act and applicable guidelines in the banking system have not been executed completely. July 10th, 2021 Audit Organization Signed: Manuchehr Farshad Signed: Asghar Hasanpour
15. Bank Mellat (Public Joint Stock) Consolidated Financial Statements of the Group & the Bank For fiscal year ending on March 20th, 2021 The consolidated financial statements of the group and Bank Mellat for fiscal year ending on March 20th, 2021 is presented. The components of the financial statements are as follows: Group’s Consolidated Basic Financial Statements Page No. Consolidated Balance Sheet Consolidated Profit & Loss Statement Consolidated Comprehensive Profit & Loss Statement Consolidated Shareholder’s Equity Changes Statement Consolidated Cash flow Statement Bank’s Consolidated Basic Financial Statements Balance Sheet Profit & Loss Statement Comprehensive Profit & Loss Statement Shareholders’ Equity Changes Statement Cash flow Statement Explanatory Notes The consolidated financial statements of the group and bank have been provided based on accounting standards and regulations of the CBI and they have been confirmed by the board of directors of the bank on July 10th, 2021. Members of Board of Directors Mohammad Bigdeli Morteza Najaf Bahman Eskandari Mohammad Taghi Samadi Alireza Lagzaee Position CEO & Board member Chairman Vice Chaiman Board member Board member & deputy CEO Executive/ Non-Executive Executive Executive Executive Executive Executive Signature Signed Signed Signed Signed Signed
16. Bank Mellat (Public Joint Stock) Consolidated Balance Sheet For Fiscal year ending on March 20th, 2021 Assets Assets Cash Dues from banks & other credits institutions Dues from government Loans and advances to public entities Loans and advances to private entities Investments and partnerships Dues from subsidiary & affiliated companies Other receivable accounts Tangible fixed assets Intangible assets Legal deposit Other Assets Note 20.03.2021 Million Rials (Restated) 20.03.2020 Million Rials 9 10 11 12 13 14 15 267,788,310 803,518,912 135,484,372 2,887,832,475 2,353,186,880 424,839,338 13,498 215,937,131 509,945,242 159,511,678 1,600,809,815 1,321,953,971 113,978,381 1,425,513 16 17 18 19 20 126,825,716 208,592,615 21,259,804 380,126,497 71,403,581 74,915,328 202,571,839 17,788,341 253,360,236 31,969,565 liabilities & Shareholders’ Equities Liabilities: Clients’ liabilities for issued Guarantees Other clients’ liabilities Party to manages funds & the like 56-1 56-2 56-3 56-4 7,680,871,998 554,755,223 459,049,554 728,180,680 478,113,352 4,504,167,040 348,376,974 296,079,303 371,497,074 329,709,175 (Restated) 20.03.2020 Million Rials Dues to banks & other credit institutions 21 22 23 24 25 26 851,771,697 1,823,934,854 484,605 143,811,210 1,686,337,247 80,084,935 4,586,424,547 488,514,978 1,219,565,393 1,156,963 21,005,447 851,143,099 37,902,068 2,619,287,940 Investment deposits holders’ equity Total liabilities Shareholders’ equity Capital Capital of parent company held with subsidiary Legal reserve Other reserves Surplus of assets revaluation Foreign Currency translation difference Retained earnings Treasury share premium 27 2,521,863,300 7,108,287,848 1,476,914,962 4,096,202,902 28 207,042,862 (21,372,362) 63,099,309 80,319,412 0 35,618,422 185,893,977 1,349,329 50,000,000 (2,614,176) 42,365,301 80,315,797 157,042,863 21,129,783 52,385,803 0 400,625,371 Clients’ deposits Dividend payable Operation tax reserve Provisions & other liabilities Severance provisions& staff retirement liabilities Total liabilities before equity of investment deposits holders Total Equities attributable to shareholders of parent Co. Total Assets Clients’ liabilities for L/Cs Note 20.03.2021 Million Rials Interest with no controlling right Total shareholders’ equities Total liabilities & shareholders’ equity Bank’s liabilities for L/Cs Bank’s liabilities for issued guarantees Other liabilities of the bank Managed funds & the like Note: The explanatory notes is an integral part of the financial statements. 30 31 32 33 34 56-1 56-2 56-4 56-5 551,950,949 20,633,202 572,584,151 7,680,871,998 554,755,223 459,049,554 728,180,680 478,113,352 7,338,767 407,964,138 4,504,167,040 348,376,974 296,079,303 371,497,074 329,709,175
17. Bank Mellat (Public Joint Stock) Consolidated Profit & Loss Statement For fiscal year ending on March 20th, 2021 Description (Restated) 20.03.2020 Million Rials 20.03.2021 Million Rials Income of loans granted & depositing & debt securities Deposits’ interest cost Net income of loans & investments 35 39 Sales of products & income of rendered services Cost price of products sold & services rendered Net sale & cost price 36 37 Commission income Commission expense Net commission income 43 44 Net investments profit (loss) 216,560,495 251,614,400 (153,624,369) 97,990,031 11,735,232 87,746,235 (76,679,217) 11,067,018 13,088,656 19,165,330 (13,814,808) 5,350,522 38 45 46 29,691,099 390,301,139 7,719,752 669,096,372 11,265,948 107,813,098 5,002,783 238,489,400 Net other incomes and expenses Administrative & general expenses Doubtful loans expense Financial expenses Depreciation expense Profit before income tax 47 48 49 50 51 14,394,989 (146,273,642) (208,775,758) (19,309,213) (2,891,676) 306,241,073 21,742,338 (91,093,703) (69,943,793) (5,352,078) (2,919,608) 90,922,555 Income tax of current year Changes in income tax of previous years 24 24 (143,123,064) 163,118,009 (10,572,826) (35,221,420) (45,794,246) 45,128,309 158,459,392 4,658,617 43,940,249 1,188,060 784 214 Net profit of foreign exchange transactions Other operating incomes and expenses Total operating incomes Net profit Attributable to: Parent company owners Interest with no controlling right EPS (Rials) 57 432,576,862 (216,016,368) 138,311,498 (126,576,266) 29,571,110 (16,482,454) (38,972,202) (104,150,862) Note: The explanatory notes is an integral part of the financial statements.
18. Bank Mellat (Public Joint Stock) Consolidated Profit & Loss Statement For fiscal year ending on March 20th, 2021 Fiscal year ending on 20.03.2021 Million Rials Description Net profit (restated) 20.03.2020 Million Rials 163,118,009 45,128,309 Other comprehensive profit and loss items: Assets reevaluation surplus 32 0 157,042,863 Foreign currency difference of foreign operations 33 17,175,137 5,985,052 180,293,146 208,156,224 (2,495,268) 940,185 177,797,878 209,096,409 171,311,727 207,480,146 6,486,151 1,616,263 177,797,878 209,096,409 Comprehensive profit of the fiscal year Annual adjustments Recognized comprehensive profit from previous reporting period 52 Attributable to Parent company owners Interest with no controlling right
19. ۱۹ Bank Mellat (Public Joint Stock) Changes Statement in Consolidated Shareholders Equity For fiscal year ending on March 20th, 2021 Capital Balance on March 21st, 2021 Errors correction Balance of restated revaluation on March 21st, 2021 Changes in shareholders’ equity in fiscal year ending on march 20th, 2021 Foreign currency translation difference Net profit of fiscal year ending on March 20th, 2021 Comprehensive profit of fiscal year ending on March 20th, 2021 Surplus of assets revaluation Approved EPS Purchasing treasury share Profit (loss) from selling treasury shares Allocating to legal reserve (note 28) Changes in investing percent in subsidiary Balance in fiscal year ending on March 20th, 2021 52 Million Rials 50,000,000 0 50,000,000 Total Million Rials 407,964,138 (2,495,268) 405,468,870 0 33 32 14,488,639 157,042,862 29 207,042,862 52 Million Rials 50,000,000 0 50,000,000 (157,042,862) 0 1,349,329 Capital Balance on March 21st, 2020 Errors correction Balance of restated revaluation on March 21st, 2020 Changes in shareholders’ equity in fiscal year ending on March 20th, 2020 Foreign currency translation difference Net profit of fiscal year ending on March 20th, 2020 Comprehensive profit of fiscal year ending on March 20th, 2020 Surplus of assets revaluation Approved EPS Purchasing treasury share Profit (loss) from selling treasury shares Allocating to legal reserve (note 28) Changes in investing percent in subsidiary Balance in fiscal year ending on March 20th, 2020 March 20th, 2021 Assets Treasury shares Attributable to Interest with no Retained Share premium Legal Reserve Other Reserves revaluation Difference of items parent company controlling right Earnings (Loss) Surplus owners Million Rials Million Rials Million Rials Million Rials Million Rials Million Rials Million Rials Million Rials Million Rials 0 42,365,301 80,315,797 157,042,862 21,129,783 52,385,804 (2,614,176) 400,625,371 7,338,767 (2,495,268) (2,495,268) 42,365,301 80,315,797 157,042,862 21,129,783 49,890,536 (2,614,176) 398,130,103 7,338,767 1,349,329 20,734,008 3,615 63,099,308 80,319,412 0 14,488,639 158,459,392 158,459,392 (3,829,193) 35,618,422 (20,754,303) 2,127,545 185,893,977 0 (18,758,186) 21,372,362 0 32 2,686,498 4,658,617 7,345,115 (3,829,193) (18,758,186) 1,349,329 (16,680) 2,127,544 551,950,949 5,949,320 20,633,202 0 5,556,849 0 0 0 0 157,042,763 5,556,849 43,940,249 43,940,249 0 (385,244) 29 50,000,000 14,488,639 158,459,392 172,948,031 March 20th, 2020 Assets Treasury shares Attributable to Interest with no Retained Share premium Legal Reserve Other Reserves revaluation Difference of items parent company controlling right Earnings (Loss) Surplus owners Million Rials Million Rials Million Rials Million Rials Million Rials Million Rials Million Rials Million Rials Million Rials 0 38,453,480 286,909 0 15,572,934 91,352,408 (2,228,932) 193,436,799 5,238,336 940,185 940,185 0 38,453,480 286,909 0 15,572,934 92,292,593 (2,228,932) 194,376,984 5,238,336 33 0 0 0 3,911,821 80,028,888 42,365,301 80,315,797 157,042,863 21,129,783 (83,940,709) 93,670 52,385,803 (2,614,176) 5,556,849 43,940,249 49,497,098 157,042,863 0 (385,244) 0 0 93,670 400,625,371 17,175,137 163,118,009 180,293,146 0 (3,829,193) (18,758,186) 1,349,329 (16,680) 8,076,864 572,584,151 Total Million Rials 198,675,135 940,185 199,615,320 0 428,203 1,188,060 1,616,263 484,168 7,338,767 5,985,052 45,128,309 51,113,361 157,042,863 0 (385,244) 0 0 577,838 407,964,138
20. Bank Mellat (Public Joint Stock) Consolidated Cash flow Statement For fiscal year ending on March 20th, 2021 Description Note March 20th,2021 Million Rials Operating activities Cash received for: Profit & delay payment charges for granted loans Commission Depositing profit Investments profit Other operating incomes 45,356,408 35,470,335 65,454,525 30,028,540 (7,258,034) Cash paid for: Deposits profit Commission financial expense Other operational expenses Income tax (191,315,128) (16,483,454) (5,325,247) (100,314,117) (20,317,298) Cash outflow from operating activities before changes in operating assets & liabilities Cash flow from changes in operating assets & liabilities: Net increase (decrease) in liabilities: Dues to banks & other credit institutions Clients’ deposits Operating portion of provisions & other liabilities Investment depositors’ interest Net (increase) decrease in assets: Dues from banks and other credit institutions Principal of dues from the government Principal of loans & advanced to public sectors Principal of loans & advanced to private sectors Investments & partnerships Dues from subsidiary & affiliated companies Other accounts receivable Legal deposit Operational portion of other assets Cash flows of changes in operating assets & liabilities Net cash inflow (outflow) due to the operating activities Investment activities Cash paid to acquire tangible fixed assets Cash received from disposing tangible fixed assets Cash paid to acquire intangible assets Cash received for disposing intangible assets Net cash inflow (outflow) from the investment activities Net cash inflow (outflow) before financing activities Financing Activities Dividend payable Treasury shares transactions Financial facilities received Principal of financial facilities repaid Net cash inflow (outflow) from financing activities Net cash increase (decrease) Cash at beginning of the year Impact of foreign currency rate changes Cash at end of year Non-cash transactions 169,051,774 132,173,448 19,290,053 51,398,117 11,265,948 19,095,241 233,222,807 (333,754,244) (164,702,470) (144,133,265) (16,623,949) (27,265) (79,187,764) (27,200,165) (267,172,408) (33,949,601) 2,657,621 494,140,955 112,527,279 882,692,240 15,669,734 310,894,174 (1,561,630) 193,694,205 (114,537,518) 23,564,565 (355,705,634) (295,756,334) (308,405,757) 280,435 (39,277,624) (126,766,261) (169,954,539 105,459,428 (59,243,042) (14,823,754) (21,380,395) (6,278,252) (291,362,653) (38,289,481) 981,315 (16,006,075) (50,560,307) 18,088,943 99,065,824 65,116,223 (9,308,846) (68,551,888) (11,516,159) 3,864,762 (2,422,358) 714,958 (9,358,797) 55,757,426 (23,918,242) (92,470,130) 215,937,131 144,321,309 267,788,310 126,119,426 (114,002) 0 42,095,990 (47,130,839) (5,148,851) 50,608,575 153,496,814 11,831,742 215,937,131 4,517,968 54 (11,471,311) 2,912,014 (1,166,493) 416,944 1,972,358 (17,408,857) 30,279,709 (34,834,736) 55 (Restated) 20.03.2020 Million Rials Cash received as principal, interest and delay payment charges of facilities granted merely includes direct cash remittance by clients in this regard. It is understood that other settlement methods such as settlement by granting new facilities or foreclosures, etc. that do not lead to direct cash remittance by clients are classified as noncash transactions. Note: The explanatory notes is an integral part of the financial statements.
21. Bank Mellat (Public Joint Stock) Balance Sheet Ending on March 20th, 2021 Assets Assets Cash Dues from Banks & Other Credits Institutions Dues from Government Loans & and advances to the public sectors Loans & and advances to the private sectors Investments and partnerships Dues from subsidiary & affiliated companies Other accounts receivable Tangible fixed assets Intangible assets Legal deposit Other assets Note 9 10 11 12 13 14 15 16 17 18 19 20 20.03.2021 Million Rials 284,705,887 758,976,619 135,484,372 2,887,832,475 2,356,907,028 344,067,541 66,633,841 67,233,395 193,179,479 17,676,310 380,126,497 67,971,529 (Restated) 20.03.2020 Million Rials 206,809,705 490,487,090 159,511,678 1,600,809,815 1,331,890,605 72,219,773 28,204,209 24,280,933 188,959,890 16,872,706 253,360,236 30,212,717 liabilities & Shareholders’ Equity liabilities: 55-1 55-2 55-4 55-5 7,560,794,972 554,755,223 459,049,554 728,180,680 478,113,352 4,423,619,357 348,376,974 296,079,303 371,497,074 329,709,175 (Restated) 20.03.2020 Million Rials Dues to Banks & Other Credit Institutions Clients’ deposits Payable dividend Operating tax provision Provisions & other liabilities Severance & staff retirement liabilities provisions Total liabilities before investment depositors’ interest 21 22 23 24 25 26 825,577,506 1,846,116,537 163,627 139,968,129 1,639,435,303 78,382,794 4,529,643,896 475,998,818 1,186,327,192 36,514 18,166,680 850,729,017 36,702,949 2,567,961,170 Investment depositors’ interest Total liabilities Shareholders’ equity Capital Legal reserve Other reserves 27 2,529,311,728 7,058,955,623 1,495,193,446 4,063,154,616 28 207,042,862 59,738,129 80,091,465 0 17,173,761 137,793,133 501,839,349 50,000,000 39,327,976 80,087,850 157,042,863 11,115,276 Surplus of assets revaluation Total Assets Clients’ liabilities for L/Cs Clients’ liabilities for Issued LGs Other clients’ liabilities Party to managed funds & the like Note 20.03.2021 Million Rials Foreign currency translation difference Retained earnings Total shareholders’ equity Total liabilities & shareholders’ equity Bank’s liabilities for L/Cs Bank’s liabilities for Issued LGs Other liabilities of bank Managed Funds & the like Note: The explanatory notes is an integral part of the financial statements. 30 31 32 33 56-1 56-2 56-3 56-4 7,560,794,972 554,755,223 459,049,554 728,180,680 478,113,352 22,890,777 360,464,742 4,423,619,357 348,376,974 296,079,303 371,497,074 329,709,175
22. Bank Mellat (Public Joint Stock) Profit & Loss Statement For Financial Year Ending on March 20th, 2021 Description Note loans, deposits & debt securities income Deposits’ interest expense Net income of loans & depositing 35 39 Commission income Commission expenses Net commission income 43 44 Net profit of investments Net profit of foreign exchange transactions & exchange 20.03.2021 20.03.2020 Million Rials Million Rials 209,048,723 250,759,903 (154,963,273) 95,796,630 12,715,249 19,005,700 (13,813,278) 5,192,422 38 45 46 21,645,671 389,398,998 3,313,319 636,121,960 3,341,364 106,759,688 3,300,248 214,390,354 Net other incomes and expenses Administrative & general expenses Doubtful loans expenses Financial expenses Depreciation expenses Earnings before income tax 47 48 49 50 51 12,923,922 (141,600,042) (208,506,313) (19,441,184) (2,533,313) 276,965,030 20,927,692 (88,112,948) (69,931,978) (5,688,075) (2,742,677) 68,842,368 Income tax of current year Changes in income tax of previous years 24 24 (140,354,546) 136,610,484 (8,732,016) (35,000,000) (43,732,016) 25,110,352 660 121 Other operating incomes and expenses Total operating incomes Net profit EPS (Rials) 57 425,784,069 (216,735,346) 29,194,491 (16,479,242) (36,354,546) (104,000,000) Note: The explanatory notes is an integral part of the financial statements.
23. Bank Mellat (Public Joint Stock) Comprehensive Profit & Loss Statement For Financial Year Ending on March 20th, 2021 Description Net profit Surplus of assets revaluation Note Foreign currency translation difference of fiscal year 32 33 Comprehensive profit of fiscal year Annual adjustment 52 Recognized comprehensive profit from reporting period Fiscal year ending on 20.03.2021 Million Rials 136,610,484 0 6,058,485 142,668,969 0 Million Rials 25,110,352 157,042,863 3,646,910 185,800,125 940,185 142,668,969 186,740,310 Note: The explanatory notes is an integral part of the financial statements. 20.03.2020
24. Bank Mellat (Public Joint Stock) Shareholders’ Equities Changes Statement For Financial Year Ending on March 20th, 2021 Capital Balance on March 21st, 2020 Net Profit Annual adjustments Foreign currency translation difference Surplus of assets revaluation Total other comprehensive profit Total comprehensive profit Distribution and allocation Legal reserve Other reserves DPS Legal reserve Million Rials 50,000,000 52 33 Balance on March 20th, 2021 Total changes of shareholders’ equity items during year Balance on March 20th, 2020 136,610,484 142,668,969 3,615 (20,408,128) 0 2,024 3,615 0 (1,300,000) (1,300,000) 0 (21,708,128) (1,294,361) 17,173,761 137,793,133 501,839,349 0 0 0 0 20,410,153 0 20,410,153 3,615 207,042,862 59,738,129 80,091,465 Legal reserve Million Rials 50,000,000 Million Rials 35,606,325 52 33 30 31 6,058,485 0 Capital Distribution and allocation Legal reserve Other reserves DPS 0 0 0 (157,042,862) 0 0 0 0 6,058,485 March 20th, 2020 Surplus of assets revaluation Foreign currency translation Other reserves difference of foreign operations Million Rials Million Rials Million Rials 98,891 0 7,468,366 0 0 0 0 0 0 0 0 0 3,721,651 0 79,988,959 0 Total Shareholders’ Equity 6,058,485 0 30 31 Retained earning (loss) Million Rials 360,464,741 136,610,484 0 6,058,485 0 6,058,485 157,042,862 0 Total changes of shareholders’ equity items during year Balance on March 21st, 2019 Net Profit Annual adjustments Foreign currency translation difference Surplus of assets revaluation Total other comprehensive profit Total comprehensive profit Million Rials 39,327,976 March 20th, 2021 Surplus of assets revaluation Foreign currency translation Other reserves difference of foreign operations Million Rials Million Rials Million Rials 80,087,85 157,042,862 11,115,276 0 0 3,721,651 79,988,959 50,000,000 39,327,976 80,087,850 157,042,863 157,042,863 157,042,863 0 0 0 0 157,042,863 Million Rials 22,890,777 136,610,484 0 Retained earning (loss) 3,646,910 940,185 Million Rials 173,729,016 25,110,352 940,185 3,646,910 157,042,863 161,629,958 3,646,910 26,050,537 186,740,310 0 0 (3,715,195) (80,000,000) 6,456 (11,041) 3,646,910 Million Rials 80,555,434 25,110,352 940,185 Total Shareholders’ Equity 0 0 0 (83,715,195) (4,585) 11,115,276 22,890,777 360,464,742
25. Bank Mellat (Public Joint Stock) Cash flow Statement For Financial Year Ending on March 20th, 2021 Description Notes (Restated) 20.03.2020 Million Rials 20.03.2021 Million Rials Operating activities Cash received for: Profit & delay payment charges for granted loans * Commission Depositing profit Investments profit Other operating incomes 44,939,343 35,093,716 59,078,797 21,983,112 (15,317,087) Cash paid for: Deposits’ profit Commission Financial expenses Other operating expenses Income tax (192,034,106) (16,479,242) (5,457,219) (95,612,200) (18,553,097) Cash (outflow) of operating activities before changes in operating assets & liabilities Cash flow from changes in operating assets and liabilities: Net increase (decrease) in liabilities Dues to banks & other credit institutions Clients’ deposits Operating portion of reserves & other liabilities Investment depositors’ interest Net (increase) decrease in assets: Dues from banks and other credit institutions Principal of dues from government Principal of loans and advances to public sectors Principal of loans and advances to private sectors Investments and partnerships Dues from subsidiary & affiliated companies Other accounts receivable Legal deposit Operating portion of other assets Cash flows from changes in operating assets & liabilities Net cash inflow (outflow) from operating activities Investment activities Cash paid to acquire tangible fixed assets Cash received from disposing tangible fixed assets Cash paid to acquire intangible fixed assets Cash received to acquire intangible fixed assets Net cash inflow (outflow) from investing activities Net cash inflow (outflow) before financing activities Financing Activities Paid dividend Financial facilities received Principal of financial facilities repaid Net cash inflow (outflow) from financing activities Net cash increase (decrease) Cash at beginning of the year Impact changes in foreign currency rate Cash at the end of the year Non-cash transactions 145,777,881 122,152,937 19,130,423 49,497,113 1,133,333 15,743,647 207,657,453 (328,135,864) (145,472,169) (13,622,419) (308,232) (76,600,746) (25,417,838) (261,421,404) (182,357,983) (53,763,951) (10,987,650) 549,560,839 66,039,410 871,862,183 1,808,719 302,068,008 866,848 202,303,810 (88,576,515) 24,393,204 (354,547,219) (300,845,201) (269,392,568) (39,276,603) (9,214,414) (126,766,261) (186,687,472) (125,561,733) (56,796,250) (13,927,195) (21,380,395) (6,278,252) (289,983,288) (28,271,595) 16,240,858 (18,595,072) (50,560,307) 17,298,859 111,590,998 57,827,047 (8,321,979) (65,118,229) (8,134,396) 2,473,076 (2,416,591) 457,728 (7,620,183) 50,206,866 (1,205,646) (66,323,875) 206,809,705 144,220,057 284,705,887 135,027,759 (1,666) 21,880,889 (21,495,349) 383,874 50,590,740 144,451,299 11,767,668 206,809,704 5,155,333 54 (10,274,629) 2,433,988 (898,282) 416,944 (1,172,887) 0 (32,759) Cash received as principal, interest and delay payment charges of facilities granted merely includes direct cash remittance by clients in this regard. It is understood that other settlement methods such as settlement by granting new facilities or foreclosures, etc. that do not lead to direct cash remittance by clients are classified as non-cash transactions. Note: The explanatory notes is an integral part of the financial statements.
26. Bank Mellat (Public Joint Stock) Explanatory Notes of Consolidated Financial Statements of Group & Bank For Six-Month Fiscal Period Ending on September 22nd, 2020 History of the Bank Activity 1-1- Generalities The group includes Bank Mellat (Public Joint Stock) as per National ID No.10100834967 and its subsidiary companies. Bank Mellat was formed on July 22nd, 1980 by virtue of decree issued by the general assembly of the banks dated December 20th, 1979 by integration of Tehran Bank, Iran International Bank, Farhangian Bank, Iran Insurance Bank, Pars Bank, Foreign Trade Bank, Iran & Arab Bank, Etebarat, Taavoni Va Tozi Bank, Omran Bank and daryoush bank and it was registered with companies registration office as per No.38077, and pursuant to the resolutions ratified in the extraordinary general assembly of the banks on April 5th, 2008 and decree No.T/68985 issued by the council of ministers on July 24th, 2007, the legal entity of the bank was changed to public joint stock, and it was listed on the main board of first market of Tehran Securities and Exchange in banks and credit institution section and other monetary institutions on February 10, 2009 and five percent of its shares provided to discover the price in stock exchange on February 18th, 2009. Now, the government holds 16.16% of the bank shares, Edalat shares provincial investment holds 18.48% and the rest of it belong to the private and non-governmental sectors. 1- 2- Main Activity of Bank The subject of the activity of the bank shall be in compliance with Article 3 of the articles of association approved by the extraordinary general assembly on October 29th, 2014 and registered in companies registration office on January 13th, 2015, providing banking operations in compliance with monetary and banking rules of the country and its subsidiary companies are mainly include banking, leasing, investment, foreign exchange, designing and producing computer software and rendering maintenance services for the produced software. 1- 3- Number of Branches The number of branches of the bank on the end of the year is as follows: Branches of Tehran province Branches of other provinces Branches of Free Zones Branches abroad 20.03.2021 End of Year Average 265 266 1,135 1,149 9 9 4 4 1,413 1,428 20.03.2020 End of Year Average 267 269 1,157 1,164 9 9 4 4 1,437 1,446 1-4- Employment Status The number of the bank’s staff during the period has been as follows: Head Office Branches of Tehran province Branches of other provinces Subsidiary companies Branches abroad Free Zones Contractual services staff Total 20.03.2021 End of Year Average 2,412 2,422 3,663 3,731 13,032 13,116 7,519 7,670 7 7 29 107 26,662 27,053 4,761 4,708 31,423 31,761 20.03.2020 End of Year Average 2,410 2,420 3,736 3,852 13,478 13,337 7,821 7,705 9 9 120 122 27,574 27,445 4,708 4,708 32,282 32,153
27. 2- Financial Statements Providing Basis The financial statements have been provided based on accounting standards and rules of The CBI . The details of accounting procedures including changes during the year haven been stated in explanatory note 5 to 8. Also, explanatory notes 24, 30, 31, 36, 38-3, 39-4 and 55-2 the samples announce by the CBI dated February 2020 about the bank is not related and there is no balance and turnover in the relevant accounts. 2-1- Approved new and revised accounting standards that are not yet applicable. In 2019 the following accounting standards have been approved or revised Accounting Standard 18 as non-consolidated financial statements, accounting standard 20 as investment in commercial affiliates and special partnerships, accounting standards 38 as business combinations, accounting standard 39 as consolidated financial statements, and accounting standard 41 as disclosing of interests in other business units is binding since March 21st, 2021. Regarding current situations, based on the evaluations and estimates of the company's management, the above standards will not have a significant effect on the recognition, measurement and reporting of items in the financial statements. 3- Integration Basis 3-1- The consolidated financial statements is the result of integrating the financial statements of the bank and subsidiary companies subject to integration after omitting inter-group transactions and balances and unrealized profit and loss due to mutual transactions. The subordiary companies are disclosed in explanatory note 14-5 and the fiscal year of Bank Mellat Yerevan and Tarh Va Andisheh Behsaz Mellat Company, Behsaz Mellat Insurance Services Company, Arzesh Afarin Atlas Company, Vavan Construction & Urban Development Company, Tadbirgaran Behsaz Mellat Company, Petro Faravaran Atlas Company and Behsaz Trading Services Development are until, Gostaresh Fannavari Sanat Sakhteman Company until the end of December and the rest of them are until March 20th. By the way the financial statements of the mentioned companies are stated in consolidated financial statements as its orders. However, in case of any changes until the date of the financial statements of the bank that have material effects on generalities of consolidated financial statements, these effects would be considered in the accounts through accomplishing required amendments in financial statements items. 3-2- The operation results of subsidiary companies acquired during the year are considered from the date that its control being done by the parent company and the operation results of the assigned subsidiaries companies are considered in the consolidated profit and loss statement until the date of its ownership assignment. 3-3- The shares of parent company acquired by subsidiary companies are considered in the accounts in cost price and they are reflected as devaluation of shareholders’ equities under heading of “shares of main company in ownership of subsidiary companies”. 3-4- The consolidated financial statements are provided by using from accounting procedures except for lack of revaluation of the subsidiary companies assets (land and good will) about transactions and other similar events that happened under the same conditions. 4- Reporting & Operating Monetary Unit The items of the financial statements have been measured by monetary unit of the main economic environment of the bank’s activity place that is Rials. These items have been presented in Million Rials to be understood better unless in cases that is mentioned explicitly in the financial statements or explanatory notes. 5- Using from Judgments & Estimations Bank management has applied judgments, estimations and assumptions in determining recognized amounts in providing financial statements. The real results may be different from the estimations. Theses estimations and its assumptions are based on historical records and the management reviews them continuously by comparing them to real events. Retirement liabilities, operating tax and doubtful loans reserve can be noticed in this regard.
28. 6- Measurement Basis The financial statements of the bank have been provided based on historical cost price and in cases that the price except than historical cost price is used , it has been disclosed in relevant accounting procedures 7- Change in Accounting Procedure The bank has provided the accounting procedures stated in note 8 by observing consistency of procedures in all reported periods in the financial statements. 8- Summary of Important Accounting Procedures 8-1- Investments Measurement Long-term investments: Investment in subsidiary companies Investment in affiliated companies Other long-term investments Investment in properties Current investments: Marketable investments Other current investments Income recognition: Investment in subsidiary companies Group consolidation Parent Company Subject to consolidation Cost value to the deducting of accumulated value of each investments Cost value to the deducting of accumulated value of each investments Cost value to the deducting of accumulated value of each investments Special value Cost value to the deducting of accumulated value of each investments Cost value to deducting the accumulated value of each investments Minimum cost value and net sale value of the portfolio/ Market value Minimum cost value and net sale value of each of investments Minimum cost value and net sale value of the portfolio Minimum cost value and net sale value of each of investments Subject to consolidation At the time of approving profit by the general assembly of shareholders of the investee company (until the date of approving financial statements) At the time of approving profit by the general assembly of shareholders of the investee company (until the date of approving financial statements) At the time of approving profit by the general assembly of shareholders of the investee company (until the date of balance sheet) At the time of realized pledged profit Investment in affiliated companies Special value method Other current and long term investments in companies shares At the time of approving profit by the general assembly of shareholders of the investee company (until the date of balance sheet) At the time of realized pledged profit Investment in securities 8-2- Financing expenses Financing expenses are recognized as expense at the time of occurring except for those expenses that are directly attributable to acquire “eligible assets” 8-3- Tangible fixed assets 8-3-1- Tangible fixed assets excluding land, building and key money record in the accounts based on cost price. Improvement and major repairs costs that leads to remarkable increase in the capacity or useful life of fixed tangible assets or fundamental improvement in their output quality are considered as capital costs and they depreciate during useful life of the relevant assets. Maintenance and minor costs that are carried out based on initial operating evaluation standards to preserve or fix the expected economic interests of the commercial unit, are considered as current costs on their date and they are considered as profit and loss account of the period.
29. 8-3-2- The land is reflected in the accounts based on the revaluation amount . Revaluation of the bank has been done in 2019 out of performing the provisions of article 14 of the maximum use of producing and service rendering of the country ability and supporting Iranian goods and by using assessment of independent experts also the banks building has been reflected in the accounts on March 19th, 2005 in executing article 62 of third development program law act, based on the amount of the revaluation. 8-3-3- Depreciation of fixed tangible assets are done with regard to expected economic resources consumption pattern in future (including useful lifetime estimated by experts of civil engineering department of Bank Mellat) related to the assets by considering depreciation table subject to article 149 of direct tax act ratified in July 2015 and its subsequent amendments based on the following rates and methods. It shall be mentioned that upon permission of article 19 of executive rules related to depreciation cost subject to article 149 of direct tax act, the depreciation of the building that is considered in mentioned table in direct 25 years rate, is calculated with rate of 25 to 91 years. Type of Asset Building Installations Office Furniture & Equipment Compute Accessories Vehicles Depreciation Rate 25 to 91-year 10-year 6-year 3-year 6-year Depreciation Method Direct Direct Direct Direct Direct 8-3-4- The depreciation of fixed assets that are acquired and used during the month, will be calculated and considered in the accounts from the first day of the next month. In cases where any of the depreciable assets are not used for a period of time after being ready for use due to work stoppage or other reasons, the depreciation rate for the mentioned period is equal to 30% of the depreciation rate reflected in the above table. 8-3-5- The depreciation of fixed assets of subsidiary companies is calculated with the following rates and methods based on table of depreciations stated in article 149 of direct tax law as amended: Type of Asset Building Installations Office furniture & equipment’s Computer accessories Vehicles Depreciation Rate 25 year 10-year 3, 5 & 6-year 3-year 6 & 10-year Depreciation Method Direct Direct Direct Direct Direct 8-3-5-1- The depreciation rate of group companies is not the same as the bank’s. 8-4- Intangible Assets The intangible assets except goodwill of the business unit are recorded in the accounts based on the cost price. The goodwill of the business unit is not depreciated. If the operational and office software be included in development program, the development costs incurred will be added to the cost price of the software. Operating and office software are depreciated directly within maximum 5 years. 8-4-1 The goodwill of business place is reflected by revaluated value in 2019 by official court experts. 8-5- The loss of assets devaluation. 8-5-1 At the end of each reporting period, if there is any indication that assets are devalued, the depreciation test will be done. In this situation the recyclable amount of the assets estimate and compare to its book value. If the estimation of the recyclable amount of the single asset not be possible the recyclable amount of the generating unit of the cash that the asset is related to it would be determined. 8-5-2 If the amount of an asset is less than its book value, the book value of assets (or the generating unit of cash) decrease until its recyclable amount and the deference immediately recognizes in profit and loss statement as the loss of devaluation unless, the asset revaluates that in this regard would lead to decrease in surplus amount. 8-6 Non-current assets held for sale 8-6-1 Non-current assets (immovable properties and goodwill) that the book value of them, merely collected through selling not through constant usage, are classified as “not-current assets held for selling”. These conditions are met only
30. when the non-current assets for immediate sale in their current state , only on the terms that are common for the sale of such assets is being ready and the sale is highly probable and the appropriate level of management is committed to implementation plan of selling non-current assets in such a way that the conditions for completing the sale are expected to be met within one year from the date of classification, except for cases that are outside the scope of the company's management. 8-6-2 Non-current assets held for sale, are measured in “minimum of the book value and the net sale value”. 8-7 Recognition of Income of Granted Loans, Commissions & Delay payment charges By virtue of resolution of meeting No.1044 issued by Money and Credit Council on July 16, 2005 noticed through circular No.772/AB issued by The CBI of Islamic Republic of Iran on July 18, 2005, recognition of the granted facilities interest is on the accrual basis. Also based on the circular No. 94/258020 dated November 30 2015 for doubtful loan and based on circular no. 97/96778 dated June 17th, 2018 for defaulted class, income has not been recognized, the recognition method of incomes of the bank is as follows: Interest & Delay payment charges of Granted, Commission Interests of granted loans: Current Overdue Defaulted Doubtful loans Delay payment charges (Profit + delay payment charges): Current Overdue Defaulted Doubtful loans Commission: Commission for issued guarantees Commission for other banking services Commission of non-interest bearing granted loans Recognition Method Cash/commitment Cash/commitment Cash Cash Cash/commitment Cash/commitment Cash Cash Cash/commitment Cash Cash/commitment 8-8- Basis of determining depositor’s share from joint-Income: In implementing Usury free banking operations act ratified on August 30th, 1983 and executive guidelines and bylaws of the said law and with regard to circular No.94/69643 issued by the CBI on June 10th, 2015, the joint incomes, joint resources and share of depositors of joint income are calculated and the results are reported in investment deposits operation statement. (Note 39) 8-9- Granted facilities classification The loans granted by the bank based on “guidelines of assets classification of credit institutions” ratified by Monetary & Credit Council (subject of circular No.2823/MB issued by the CBI on February 24th, 2007) were classified in one of the following categories based on the factors of delay payment charges date, financial condition of the client and relevant industry or field of activity: 1- Outstanding category (maximum up to 2 months after maturity date or date of stopping payment) 2- Overdue category (between 2 to 6 months after maturity date or date of stopping payment) 3- Defaulted category (between 6 to 18 months after maturity date or date of stopping payment) 4- Doubtful loans category (more than 18 months after maturity date or date of stopping payment) * The management has not performed any judgment in financial statements beyond the abovementioned circular. 8-10- Doubtful loans reserve The reserve for granted facilities are calculated and considered in the accounts based on “guidelines of calculation method of dues reserve of credit institutions” ratified by monetary & credit council (subject to circular No.91/21270 issued by the CBI of on March 21st, 2012).
31. 1- The general reserve calculates equal to 1 .5% of the total balance of loans by the end of each year except the balance of facilities for which specialized reserve has been considered. 2- The specialized reserve regarding the balance of overdue facilities, defaulted and doubtful loans will be calculated after deducting the value of pledges of each case by exerting set coefficients as follows. Category Overdue Category Defaulted Category Doubtful loans (with regard to assessing repayment ability of the client) Coefficient 10% 20% 50 to 100% 3- For loans that 5 years have been passed from their maturity date of paying either principal or interest, a special reserve will be considered after deducting the value of 50% of the pledges, and for loans that 5 to 10 years have been passed from their maturity date of paying the principal and interest, a specialized reserve between 50 to 100% (just by considering the value of the cash and semi cash pledges) will be considered and for the facilities more than 10 years has passed from maturity date of principal and interest the exclusive reserve equal to 100 percent would be considered (without considering the value of the collaterals). * The management has not performed any judgment in financial statements beyond the abovementioned circular. 8-11- Deposits guarantee fund According to the by-laws, the amount and manner of receiving the membership fee of the deposits guarantee fund (subject of resolution No. 53725/T/22196 dated May 20th, 2017 the council of ministers, circular No. 96/68469 dated May 28th, 2017 issued by the CBI and regulations of the manner to calculate and pay the annual membership fee of 2020 of deposits guarantee fund), The annual membership fee of the deposits guarantee fund is equal to 0.35 percent of the average weekly balance of deposits up to the fund guarantee limitation (Equivalent to IRR 1 billion) calculates and executes to mentioned fund. 8-12- Staff’s severance service provisions Severance provisions will be calculated based on the fixed salary and constant benefits of the last month for each year of their work and it will be recorded in the accounts. 8-13- Liabilities of staff retirement allowance The staff of the bank are covered by retirement, pension and disability fund of the banks and the retirement salary and disability salary of the staff will be paid by the abovementioned fund. According to Article 34 of articles of association of the abovementioned fund, the fund deficit shall be financed by the banks. Therefore, the liabilities due to the staff retirement allowances that are calculated based on actuary in annual intervals (or in case of remarkable changes in actuary assumption on date of change) are determined and the necessary reserve is considered in the accounts. Also for those bank staff that are under the coverage of the social security fund no reserve has been considered in the accounts due to the retirement allowance obligations. 8-14- Dues from government Dues from government are as follows: 8-14-1 Dues guaranteed by the government: Facilities whose repayment is guaranteed by the government in accordance with the law or whose pledging permission by the government is provided in the law and the relevant guarantee is issued by the management and planning organization. (Facilities granted based on the Supreme Leader's travels are also categorized under this heading) 8-14-2 Dues pledged by the government: Are grant facilities and subsidies shares’ profit pledged by the government, the payment of which was initially committed by the government. Facilities after classification in the defaulted and doubtful loans class are transferred to dues from the government heading. 8-15- Foreign currency translation 8-15-1- Domestic Accounts Monetary foreign currency items except for cases subject to circular No. 60/1015 (in sum of USD 792,091,929 equivalent) translates by the rate determined by the CBI through letter No.00/37873 dated May 04th, 2021 (the rate of USD is IRR 159,000 and the rate of EUR is IRR 190,000 and other foreign currencies based on their EUR parity rate until March 20th, 2021) at the date of balance sheet and non-monetary items that have been recorded with historical cost
32. price based on foreign currency will be translate with official rate on date of fulfilling the transaction . The differences of settling or translating monetary foreign currency items are recognized as income or cost of the recognized period and it will be reported in profit and loss statement. 8-15-2- Accounts due to Foreign Operations The assets and liabilities of branches abroad and foreign subsidiary companies are translated with the set rate by the CBI through letter No.00/37873 dated May 04th, 2021 (the rate of USD is IRR 159,000 and the rate of EUR is IRR 190,000 and other foreign currencies based on their EUR parity rate until March 20th, 2021) at the date of balance sheet and their incomes and expenses are translated with average foreign currency rate. All translation differences resulted of are recognized in comprehensive profit and loss statement and it is classified under heading of shareholders’ equities in the balance sheet. In addition, differences of translating monetary items the nature of which comprises a part of net investment in foreign operation, are recognized in comprehensive profit and loss statement and they are classified under heading of shareholders’ equities in the balance sheet until date of allocating the investment. 8-15-3 Translation of the subsidiary companies are being done by accessible FX rate. 8-16- Treasury shares The treasury shares of the bank reports based on the cost price on acquiring date. Any difference caused by purchasing or selling treasury shares reports in shareholders’ equities section. The shares of parent company held with subsidiary companies is exerted in note 29. 8-17- With regard to the multiplicity of items of some accounts, a part of the items of each note have been reported under the title of “other”. The items under “others” title based on their content includes low important items and the maximum of this title is up to 10% of the total amount of that note. 9- Cash Balance Note Cash – Rials Cash – Foreign Currency Fund in transit – Rials Sight deposit held with CBI (unlimited) Deposits held with Other Banks & Credit Institutions (unlimited) 9-2 9-3 9-4 Total Group 20.03.2021 20.03.2020 Million Rials Million Rials 7,234,209 14,467,794 59,728,867 37,877,353 540 675 66,779,063 105,302,459 134,045,632 58,288,849 267,788,310 215,937,131 Bank 20.03.2021 20.03.2020 Million Rials Million Rials 6,976,204 9,352,842 48,788,972 23,143,721 540 48 66,779,063 105,302,460 162,161,108 69,010,634 284,705,887 206,809,705 9-1- The balance of fund in Rials and foreign currency held with the bank branches has been insured sufficiently against probable dangers of rubbery and accidents up to IRR 32,000 Billion based on the financial annual average of 2020. 9-2- The balance of fund in foreign currency includes USD 147,048,943; EUR 74,407,800; AED 4,646,625 and equal to IRR 654,082 Million of other foreign currency also IRR 6,655,582 Million is the balance of branches abroad. 9-3- Sight deposits held with the CBI (Unlimited) Sight Deposit held with CBI – IRR (unlimited) Sight Deposit held with CBI – Foreign Currency (unlimited) Sight deposits held with central banks of other Countries (unlimited) Total Group 20.03.2021 20.03.2020 Million Rials Million Rials 64,873 67,865,365 65,783,897 36,001,449 930,292 1,435,646 66,779,063 105,302,460 Bank 20.03.2021 20.03.2020 Million Rials Million Rials 64,873 67,865,365 65,783,897 26,001,449 930,292 1,435,646 66,779,063 105,302,460
33. 9-4- Deposits held with other banks & credit institutions (Unlimited) Group 20.03.2020 Million Rials Million Rials 20.03.2021 Note Sight deposits held with other domestic banks & credit institutions – Rials (unlimited) Sight deposits held with other foreign banks & credit institutions – foreign currency (unlimited) 1,490,177 9-4-1 Sight deposits held with foreign banks – foreign currency (unlimited) Total deposits held with the other banks and credit institutions (unlimited) 339,088 Bank 20.03.2020 Million Rials Million Rials 20.03.2021 379,000 339,088 20,247,652 3,955,912 20,303,822 14,677,697 112,307,804 53,993,849 141,478,287 53,993,849 134,045,632 58,288,849 162,161,108 69,010,634 9-4-1- They are Sight deposits held with domestic banks that are used in domestic banking operations. 9-5- The balance held with the banks that have limitation in withdrawal (time limitation and other limitations) has been classified in dues from banks category. 10- Dues from banks & other credits institutions Note Dues from the CBI Dues from other banks & credit institutions Total dues from other banks & credit institutions 10-2 10-3 Group 20.03.2021 20.03.2020 Million Rials Million Rials 598,791,240 300,967,882 204,727,672 208,977,360 803,518,912 Bank 20.03.2021 20.03.2020 Million Rials Million Rials 598,791,240 300,967,882 160,185,378 189,519,208 509,945,242 758,976,619 490,487,090 10-1- Cash held with the banks which has no withdrawal limitation is classified in cash part. 10-2- Dues from the CBI Note Time deposits held with central bank of other The bonus of the legal deposits Total dues 20.03.2021 Million Rials Group 20.03.2020 Million Rials 20.03.2021 Million Rials Bank 20.03.2020 Million Rials 10-2-1 484,807,419 258,266,029 484,807,419 258,266,029 10-2-2 113,983,822 598,791,240 42,701,853 300,967,882 113,983,822 598,791,240 42,701,853 300,967,882 10-2-1 Dollar equivalent of the above amount is USD 3,056 Million that is deposit held with the South Korea central bank and is considered as limited assets with due regard to the sanction situation. 10-2-2 Other dues from the CBI includes following items. Note Past liabilities in foreign currency (circular No.60/1015 of Central Bank) Night withdrawals from accounts Shaparak, Chakavak transactions Stated-owned deposits Difference of foreign currency rate in minor float or export transactions Difference of facilities subject to article 20 Law on removing barriers to production Miscellaneous receivables Sight deposit held with the CBI- Market open position Doubtful loans general reserve Doubtful loans special reserve Total dues from the CBI Group 20.03.2021 20.03.2020 Bank 20.03.2021 Million Rials 20.03.2020 Million Rials Million Rials Million Rials 10-2-2-1 36,146,875 36,146,875 36,146,875 36,146,875 10-2-2-2 2,537,107 109,354 0 2,537,106 64,023 3,878,562 2,537,107 109,354 0 2,537,106 64,023 3,878,562 10-2-2-3 1,385,378 1,385,378 1,385,378 1,385,278 10-2-2-4 55,242,640 0 55,242,640 0 150,714 75,287 150,714 75,287 20,625,770 0 20,625,770 0 116,197,839 (828,640) (1,385,378) 113,983,822 44,087,231 0 (1,385,378) 42,701,853 116,197,839 (828,640) (1,385,378) 113,983,822 44,087,231 0 (1,385,378) 42,701,853
34. 10-2-2-1- Following Circular No .60/1015 issued by the CBI on December 07, 2013 about determining the liabilities in foreign currency, Bank Mellat has considered in dues from the CBI account the amount of IRR 36,147 Billion (equal to USD 1,169 Million) for L/Cs and bill of exchange in foreign currency for past FX dues (equivalent of translation rate until March 20, 2016) and sum of IRR 17,805 Billion (Equal to translation with reference rate) has consider as dues to the mentioned Bank and the difference in sum of IRR 18,342 Billion has been considered in translation profit of the previous years. 10-2-2-2 On March 19, 2012, the amount of IRR 2,537 Billion has withdrawn from the bank account and it has credited into the general treasury account of Iran, by virtue of letter No.98/16862 issued by the CBI on April 15, 2019, collecting the condition of the abovementioned amount requires necessary collaboration with the government and receiving necessary licenses, that is followed up by the CBI. 10-2-2-3 The amount of IRR 1,385 Billion of the difference rate for floating or export of foreign currency is related to L/Cs up to date of payment day that has been considered in the account of the CBI but the CBI has not accepted payment of the abovementioned dues through letter No.95/335760 on January 11, 2016 and it subject to resolving its condition to allocation of credit by the State Budget & Plan Organization and also in implementing provisions of article 4 of letter No.96.327764 issued by the CBI on January 02, 2017, equal to the above-said dues, has been considered in the special reserve. 10-2-2-4- According to approval No. T/164537 H56962 dated March 16, 2020 of council of ministers, the difference of cost price and announced rate by the CBI on March 20, 2020 (per USD equal to IRR 90,000) in line with executing article 20 Law of removing barriers of production, settled FX facilities of the customers from OFS sum of IRR 55,243 Billion has been considered in dues from CBI account that the acceptance of this issue is subject to special consideration. 10-3- Dues from Other Banks & Credit Institutions Note Short-term investment in the banks (limited) Time deposits held with other domestic banks and credit institutions 10-3-1 Paying cheques issued by other banks Time deposits held with domestics banks and credit institutions-foreign currency Time deposits held with foreign banks – foreign currency Sight deposits held with the foreign banks- FX (limited) Profit receivable for our deposits held with the banks FX dues from Bank Maskan Other dues Total dues from other banks and credit institutions 10-3-2 Group 20.03.2021 20.03.2020 Million Rials Million Rials 778,143 19,617,681 67,369,549 113,700,000 589,529 73,145 9,629,740 5,280,000 29,030,585 22,245 97,248,078 70,130,978 81,465 0 584 0 0 153,311 204,727,672 208,977,360 Bank 20.03.2021 20.03.2020 Million Rials Million Rials 778,143 159,529 53,300,000 113,700,000 589,529 73,145 7,608,000 5,280,000 579,580 22,245 97,248,078 70,130,978 81,465 0 584 0 0 153,311 160,185,378 189,519,208 10-3-1- IRR time deposit held with other banks and credit institutions include followings items: Name of Bank/Credit Institute Bank Shar EN Bank Bank Melli Ayandeh Bank Tose’e Ta’avon Bank Iran Zamin Bnak Tourism Bank Melal credit institution Bank Keshavarzi Dues balance at the end of the year Loan Balance 20.03.2021 20.03.2020 Million Rials Million Rials 19,000,000 20,000,000 11,300,000 0 8,000,000 11,000,000 5,000,000 20,000,000 3,000,000 7,500,000 2,500,000 600,000 2,500,000 2,000,000 7,100,000 0 47,500,000 53,300,000 113,700,000 10-3-2 The profit rate of the above deposits is equal to 19.5 percent and is usually calculates daily. 10- Includes sum of USD 631 Million Dollar equivalent held with foreign bank, that is considered as limited assets with due regard to current sanction situation.
35. 11- Dues from the Government Dues of the bank from the government are as follows : Rider facilities called up by the government Rider facilities guaranteed by the government Total 20.03.2021 20.30.2020 Balance of principal & Profit of Future Years & defaulted Profit Million Rials 70,632,460 Balance of Receivable Profit & Commission Balance of Receivable delay payment charges Profit of future Years Defaulted profit and commission Million Rials 16,427,538 Million Rials 0 Million Rials 0 Million Rials (7,723,080) 87,682,153 72,072,771 0 (60,998,089) 158,314,613 88,500,309 0 (60,998,089) General doubtful loans reserve Net Net Million Rials (1,305,900) Million Rials 78,031,019 Million Rials 47,830,730 (40,546,168) (757,314) 57,453,353 111,680,948 (48,269,248) (2,063,214) 135,484,372 159,511,678
36. 11-1- Classification of dues from the government based on the guidelines approved by monetary & credit council is as follows: Bank Rider facilities guaranteed by the government Note facilities called up by government Receivable profit & commission Gross total dues from government Deducted Profit of future years Defaulted profit & commission Net facilities granted before deducting Doubtful loans reserve General doubtful loans reserve Balance on 20.03.2021 Balance on 20.03.2021 20.03.2021 Current Million Rials 87,682,153 70,632,460 88,500,309 246,814,922 Overdue Million Rials ----- defaulted Million Rials ----- Doubtful loans Million Rials ----- Total Million Rials 87,682,153 70,632,460 88,500,309 246,814,922 (60,998,089) (48,269,248) --- --- --- (60,998,089) (48,269,248) 137,547,585 -- -- -- 137,547,585 (2,063,214) 135,484,372 --- --- --- (2,063,214) 135,484,372 159,511,678 -- -- -- 159,511,678 11-2- pursuant to approval T/115274 H58317 dated December 30th, 2020 of council of ministers, sum of IRR 58,898 billion dues from government in return of receiving stocks belong to government has been settled during 2020. Specification of foreclosed companies stocks has been disclosed in note 14-1-2. 12- Loans & advance to public sectors Equity Partnership Granted loans in foreign currency Debtors for participation bonds Total granted facilities and dues from public sectors 12-3 12-4 Balance of principal & Interest of future years & defaulted Interest, commission & delay payment charges Million Rials 18,500,000 1,957,158,186 212,740,425 2,188,398,612 Balance of Receivable profit & Commission Balance of receivable delay payment charges Received Funds of profit sharing & Common account of equity Partnership Million Rials 1,051,397 697,460,835 38,627,877 737,140,109 Million Rials 214,734 4,088,828 1,967,337 6,270,899 Million Rials 0 0 0 0 20.03.2021 Interest of future Years Million Rials 0 0 0 0 Interest and commission of delay payment charges Total Doubtful loans Reserve Net 20.03.2020 Net Million Rials 0 0 0 0 Million Rials 19,766,132 2,658,707,849 253,335,639 2,931,809,620 Million Rials (296,492) (39,880,618) (3,800,035) (43,977,144) Million Rials 19,469,640 2,618,827,232 249,535,604 2,887,832,475 Million Rials 29,759,295 1,437,089,311 133,961,208 1,600,809,815
37. 12-1- Classification of Loans & advance to public sectors based on guideline approved by monetary & credit council is as follows: Equity partnership Granted loans in foreign currency Debtors for participation bonds Total gross loans & advance to public sectors Deducted Interest of future years Defaulted interest & commission Received funds for profit sharing Common accounts of equity partnership Net granted loans before deducting doubtful loans reserve General doubtful loans reserve Specific doubtful loans reserve Balance on 20.03,2021 Balance on 20.03.2020 Current Million Rials 19,766,132 2,658,707,849 253,335,639 2,931,809,620 Overdue Million Rials 0 0 0 0 0 0 0 0 0 0 0 0 2,931,809,620 (43,977,144) 0 2,887,832,475 1,600,809,815 Bank 21.03.2021 Defaulted Million Rials 0 0 0 0 Doubtful loans Million Rials 0 0 0 0 Total Million Rials 19,766,132 2,658,707,849 253,335,639 2,931,809,620 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2,931,809,620 0 0 0 0 0 0 0 0 0 0 0 0 (43,977,144) 0 2,887,832,475 1,600,809,815 12-2- Turnover of doubtful loans reserve is as follows: Balance at the beginning of the year Recycled Bad debt Increase or decrease during period Balance at the end of the period General Reserve Million Rials 24,377,814 0 0 19,599,330 43,977,144 21.03.2021 Special reserve Million Rials 0 0 0 0 0 Total Million Rials 24,377,814 0 0 19,599,330 43,977,144 General reserve Million Rials 18,915,475 0 0 5,462,339 24,377,814 defaulted Million Rials 0 0 0 Doubtful loans Million Rials 0 0 0 20.03.2020 Special reserve Million Rials 0 0 0 0 0 Total Million Rials 18,915,475 0 0 5,462,339 24,377,814 12-3- Granted loans in foreign currency in paid resources breakdown Internal sources 12-3-1 National Development Fund 12-3-2 Current Million Rials 1,276,662,484 1,382,045,365 2,658,707,849 21.03.2021 Overdue Million Rials 0 0 0 20.03.2020 Gross Total Million Rials 1,276,662,484 1,382,045,365 2,658,707,849 Gross Total Million Rials 651,971,889 807,002,031 1,458,973,920
38. 12-3-1- Granted loans out of internal resources is mainly related to energy fund and includes the following items : The granted loans in foreign currency out of resources of Energy Fund including IRR 5,190 Billion (since 2010 to 2013) for principal of the facilities which has been granted to National Iranian Oil Company and National Iranian Oil Distribution Company. The granted amount out of the resources of Energy Fund to NIOC is in sum of EUR 3,714 Billion. Based on the agreement dated March 17th, 2014 this debt has been extended by a 3-year grace period and until the end of the abovementioned agreement merely sum of EUR 611 million of facilities interest has been received. It is worth to note, abovementioned facilities has being forbearance according to the budget lows of 2015, 2017 and 2019 until March 20, 2022. The dues amount of NIOC until March 20, 2021 is EUR 3,438 Million equal to IRR 653,132 billion for principal of facilities and sum of EUR 1,484 Million equal to IRR 282,048 billion for interest. The collaterals granted to the bank includes letter No. MA 228646 dated August 13th, 2013 signed by then time CEO of the mentioned company that states “based on this agreement bank Mellat has the right to withdrawal or set off its dues from each type of banking accounts of NIOC such as FX or Rial account held with each bank without any type of judiciary and official formalities. Granted loans to NIODC out of the resources of energy fund is in sum of EUR 1,475 million. These facilities has being forbearance according to the budget lows of 2015, 2017 and 2019 until March 20, 2022. The dues amount of NIODC until March 20, 2021 is EUR 1,225 Million equal to IRR 232,682 billion for principal of facilities and sum of EUR 573 Million equal to IRR 108,801 billion for interest. Letter of commitment No 92/3-134213 dated February 06th, 2014 signed by the deputy of minister and then time CEO and also financial affairs manager repayment of principal, interest and branches of received facilities out of energy fund is committed by NIODC. 12-3-2 Granted loans out of OSF resources to the state-owned companies are as follows: Company’s name Granting date Date of first Date of last Principal of facilities Receivable interest and penalty instalment instalment commission Petrosina Aria Oil and Gas company 2013 to 2017 1400/03/30 1402/09/30 1,959,659,920 791,738,491 14,479,679 OIEC 2013 to 2017 1400/03/30 1402/09/30 1,793,411,841 888,636,869 11,250,294 Petropaydar Iranian Company 2014 to 2017 1400/08/30 1402/08/30 698,953,041 222,668,006 0 Sabay-e-Kangan Oil and Gas company 2016 to 2021 1400/06/30 1403/06/10 2,290,263,720 195,478,790 0 Total dues of the state-owned companies out 6,742,288,522 2,098,522,156 25,729,973 of OSF-USD Rial equivalent of State-owned companies dues out of OSF – Million Rial 1,071,343,917 306,612,621 Total 2,765,878,090 2,693,299,004 921,621,047 2,485,742,510 8,866,540,651 4,088,828 1,382,045,365 12-4 Debtors for participation bonds is relevant to redeemed FX participation bonds of Pars Oil and Gas Company and includes EUR 1,120 million principal and EUR 203 million interest and EUR 10 million penalty that based on agreement dated March 15th, 2017 between bank and NIOC are following up for collection.
39. 12-5- The loans and advance to public sectors based on due date and interest rate 2020 and before 2021 2022 and afterwards Total loans and advance to public sectors 0 0 0 21 to 24 % Million Rials 0 0 0 0 18 to 21% Million Rials 11,394,735 8,371,397 0 19,766,132 21.03.2021 15 to 18% Million Rials 0 0 0 0 12 to 15% Million Rials 0 0 0 0 Lower than 12% Million Rials 253,335,639 0 2,658,707,849 2,912,043488 Total Million Rials 264,730,364 8,371,397 2,658,707,849 2,931,809,620 0 0 29,759,295 0 0 1,571,050,520 1,600,809,815 24% & More Million Rials 20.03.2020 12-6- loans and advance to public sectors based on type of collateral Cheque & promissory note Binding contracts Guarantee letter Loans & dues without collateral Total loans and advance from public sectors 20.03,2021 Million Rials 19,766,132 248,305,741 2,663,737,747 2,931,809,620 0 2,931,809,620 20.03.2020 Million Rials 29,759,295 133,961,208 1,437,089,311 1,600,809,814 0 1,600,809,814 20.03.2020 Total Million Rials 0 29,759,295 1,571,050,520 1,600,809,815
40. 12-7- Turnover of loans and advance to public sectors equity Partnership Principal of granted loans Balance on 20 .03.2020 Granted during the year Collected during the year Translation effect during year Balance on 20.03.2021 Interest of granted loans Balance on 20.03.2020 Increase during the year Collated during the year Translation effect during period Balance on 20.03.2021 Doubtful loans reserve Balance on 20.03.2020 Increase or decrease during period settled Balance on 20.03.2021 Net granted loans Balance on 20.03.2020 Balance on 20.03.2021 Million Rials 29,024,909 8,475,091 (19,000,000) Granted Loans in Foreign Currency Million Rials Debtors for paid LCs Million Rials Redeemed FX participation bonds Million Rials Total Million Rials 1,130,459,848 403,027 (75,998,645) 902,293,956 1,957,158,186 0 0 0 0 0 114,208,018 0 0 98,532,407 212,740,425 1,273,692,775 8,878,118 (94,998,645) 1,000,826,363 2,188,398,612 1,266,131 328,514,072 114,307,572 (11,196,910) 269,924,929 701,549,663 0 0 0 0 0 21,793,209 0 0 18,802,004 40,595,213 351,494,854 114,193,663 (11,004,443) 288,726,933 743,411,008 (453,187) 156,695 (21,884,609) (17,996,009) (2,040,018) (1,760,016) (296,492) (39,880,618) 0 0 0 0 (3,800,035) (24,377,814) (19,599,330) 0 (43,977,144) 29,759,295 19,469,640 1,437,089,311 2,618,827,232 0 0 133,961,207 249,535,604 1,600,809,815 2,887,832,475 18,500,000 1,187,573 (113,909) 192,467
41. 12-7-1- Turnover of interest of loans and advance to public sectors equity Partnership Receivable profit of granted loans Balance on 20 .03.2020 Increase during year Collected during year Translation effect during period Balance on 20.03.2021 Delay payment charges of granted loans Balance on 20.03.2020 Increase during year Collated during year Translation effect during year Balance on 20.03.2021 Interest of granted loans Balance on 20.03.2020 Balance on 20.03.2021 Million Rials 935,380 154,252 (38,235) Granted Loans in Foreign Currency Million Rials Debtors for paid participation bonds Million Rials 328,514,072 112,57,516 (11,196,910) 268,086,157 697,460,835 0 0 214,734 0 2,250,056 0 1,838,772 4,088,828 1,187,573 1,266,131 328,514,072 701,549,663 1,051,397 252,193 4,261 (41,720) FX redeemed participation bonds Million Rials Total Million Rials 20,737,060 0 0 17,890,817 38,627,877 350,186,512 112,211,768 (11,235,145) 285,976,974 737,140,109 0 1,056,149 0 0 911,188 1,967,337 1,308,342 2,254,317 (41,720) 2,749,960 6,270,899 0 0 21,793,209 40,595,213 351,494,854 743,411,008 0
42. 13- Loans and advance to private sectors Group Installment Sale reward Contract Hire purchase Forward Profit sharing Equity partnership Forfaiting Market up loan Non-interest bearing Granted loans in foreign currency Debtors for paid L /Cs Debtor for paid guarantees Debtors for participation bonds PIB Bank and Bank Mellat Yerevan Total Granted loans and dues from private sectors Bank 20.03.2021 (restated) 20.03.2020 20.03.2021 (restated) 20.03.2020 Million Rials Million Rials Million Rials Million Rials 252,713,480 37,010,785 1,485,922 248,553,934 30,498,347 191,919,184 71,019,046 1,042,294,375 177,996,169 271,334,835 3,700,464 9,683,104 2,833,906 12,143,330 233,356,877 35,299,667 1,765,751 91,722,702 23,878,344 279,631,404 31,849,974 341,651,218 91,591,706 164,796,758 16,784,145 410,473 3,339,007 5,875,944 268,576,958 37,010,785 1,485,922 248,553,934 30,498,347 191,919,184 71,019,046 1,042,294,375 177,996,169 271,334,835 3,700,464 9,683,104 2,833,906 0 233,356,876 35,299,667 1,786,365 91,722,702 23,878,345 292,644,445 31,849,974 344,430,144 91,591,706 164,796,758 16,784,144 410,473 3,339,007 0 2,353,186,880 1,321,953,971 2,356,907,028 1,331,890,605 13-1- Loans and advance to other sectors of the group are as follows: Note Loans and advance to other sectors of bank Loans grated to companies member of the group Loans granted by PIB and Bank Mellat Yerevan Total 13-10 20.03.2021 Million Rials 2,356,907,028 (15,863,478) 12,143,330 2,353,186,880 20.03.2020 Million Rials 1,331,890,605 (15,812,581) 5,875,946 1,321,953,970
43. 13-2- Loans and advance to private sectors : installment Sale Reward contract Hire purchase Forward Profit sharing equity partnership forfaiting Market up loan Non-interest bearing Granted facilities in foreign currency Debtors for paid LCs Debtors for paid LGs Debtors for participation bonds Total loans and advance to private sectors Balance of principal & Interest of futures Years & defaulted delay payment Million Rials 325,653,069 46,252,446 2,340,552 244,501,108 32,552,327 221,971,982 72,748,663 1,094,895,280 180,764,848 460,205,017 Balance of Receivable Interest & Commission Balance of Receivable Delay payment charges Million Rials 9,684,653 332,098 133,677 8,593,886 1,323,511 10,254,083 2,481,332 203,951,024 515,903 48,715,296 Million Rials 10,397,706 180,827 148,088 667,255 2,340,595 15,501,492 356,735 750,050 155,490 36,356,965 Received funds for profit sharing & Common Account of equity partnership Million Rials 0 0 0 0 (13,852) (18,188,500) 0 0 0 0 70,508,801 14,063,895 2,033,110 2,768,491,097 0 0 287,641 286,273,104 1,167,722 244,352 556,311 68,823,588 0 0 0 (18,202,353) 20.03.2021 Interest of future years 20.03.2020 Defaulted interest, commission and delay payment charges Total Doubtful loans Reserve Net Net Million Rials (55,344,181) (8,244,514) (730,381) 0 0 (870) (3,145,755) (237,954,554) (18,850) (1,023,535) Million Rials (1,082,247) (341,913) (197,419) (369,003) (1,434,836) (8,285,895) (13,010) (1,025,549) (55,572) (4,148,535) Million Rials 289,309,000 38,178,944 1,694,518 253,393,246 34,767,744 221,252,291 72,427,965 1,060,616,250 181,361,819 540,105,209 Million Rials (20,732,042) (1,168,159) (208,596) (4,839,312) (4,269,397) (29,333,106) (1,408,919) (18,321,875) (3,365,650) (268,770,374) Million Rials 268,576,958 37,010,785 1,485,922 248,553,934 30,498,347 191,919,184 71,019,046 1,042,294,375 177,996,169 271,334,835 Million Rials 233,356,876 35,299,667 1,786,365 91,722,702 23,878,345 292,644,445 31,849,974 344,430,144 91,591,706 164,796,758 (0) (528,240) 0 (306,990,881) (237,413) (2,916,029) 0 (20,107,420) 71,439,109 10,863,978 2,877,062 2,778,287,135 (67,738,646) (1,180,875) (43,156) (421,380,107) 3,700,464 9,683,104 2,833,906 2,356,907,028 16,784,144 410,473 3,339,007 1,331,890,605 13-2-1- The heading of loans and advance to other sectors (explanatory note 13 of the financial statements) includes IRR 16,000 Billion working capital equity partnership equity loans of previous years granted to Social Security Investment Company. The goal of the initial agreement was to improve mutual collaboration through concentration the resources of Ministry of Health & Medical Education and affiliated departments held with the bank in order to expand suitable platforms and rendering loans services to the abovementioned ministry. Settlement the principal and interest in maturity date, has not been realized on March 20th, 2016 but the loans has been extended by paying interest. Meanwhile, the collateral of the above-said loans is bank Mellat shares owned by Social Security Organization and Saba Tamin Investment Company. 13-2-2- FX granted loans includes sum of IRR 3,114 billion of branches abroad granted loans.
44. 13-3- Classification of loans and advance to public sectors based on directive approved by Monetary & credit council are as follows: Note installment Sale Reward Contract Hire Purchase Forward Profit sharing Equity partnership forfaiting Market up loan Non-interest bearing Granted loans in foreign currency Debtors for paid L/Cs Debtors for paid LGs Debtors for participation bonds Total gross loans and advance to the private sectors Deducted: Interest of future years Defaulted interest & commission Amounts received for profit sharing Common account of equity partnership Net granted loans before deducting doubtful loans reserve General reserve of doubtful loans Special reserve of doubtful loans Balance on 20.03.2021 Balance on 20.03.2020 13-5 20.03.2021 Current Million Rials 314,538,612 44,978,648 2,208,862 251,236,471 26,484,383 Overdue Million Rials 2,294,130 41,055 6,988 495,083 1,328,701 defaulted Million Rials 1,613,830 54,236 8,970 388,392 626,512 149,452,416 6,862,920 16,917,860 74,494,361 74,209,814 180,627 190,192 1,006,098 75,586,731 1,282,457,373 4,390,376 8,084,796 4,663,807 1,299,596,353 179,545,071 226,165,671 221,118 1,689,581 2,877,062 2,556,065,080 317,273 312,060 0 0 0 16,229,214 468,328 2,413,145 0 0 0 30,766,260 1,105,569 316,386,403 71,455,404 12,618,666 0 520,527,235 181,436,241 545,277,279 71,676,522 14,308,247 2,877,062 3,123,587,789 (306,990,881) 0 (13,852) (18,188,500) 0 0 0 0 0 (1,084,732) 0 0 0 (19,022,687) 0 0 (306,990,881) (20,107,420) (13,852) (18,188,500) 2,230,871,846 16,229,214 29,681,528 501,504,547 2,778,287,135 (954,136) 15,275,077 13,031,184 (5,114,289) 24,567,239 14,932,940 (381,848,605) 119,655,943 97,963,262 (33,463,078) (387,917,029) 2,356,907,028 1,331,890,606 (33,463,078) 2,197,408,769 1,205,963,219 Doubtful loans Million Rials 27,288,855 1,691,433 397,498 1,642,303 7,776,837 Total Million Rials 345,735,428 46,765,371 2,622,317 253,762,249 36,216,433 247,727,557 13-4- Turnover of doubtful loans reserve is as the table below: Balance at the beginning of the year Increase or decrease during year Balance at the end of year General Reserve Million Rials 18,364,922 15,098,156 33,463,078 20.03.2021 Special Reserve Million Rials 218,986,199 168,930,830 387,917,029 Total Million Rials 237,351,121 184,028,986 421,380,107 General Reserve Million Rials 14,279,144 4,085,778 18,364,922 20.03.2020 Special Reserve Million Rials 158,945,082 60,041,117 218,986,199 Total Million Rials 173,224,226 64,126,895 237,351,121
45. 13-5- Loans and advance to private sectors based on paid resources : Internal resources OSF NDF Total FX granted facilities 13-5-1 13-5-2 Outstanding Million Rials 134,996,387 2,826,013 88,343,270 226,165,671 20.03.2021 overdue Million Rials 312,060 0 0 312,060 defaulted Million Rials 2,413,145 0 0 2,413,145 Doubtful loan Million Rials 113,721,628 29,705,757 172,959,018 316,386,403 20.03.2020 total Million Rials 251,443,220 32,531,770 261,302,288 545,277,279 total Million Rials 156,844,106 94,093,765 46,530,196 297,468,067 13-5-1- Loans granted from the OSF to the Central Bank (note 21-1). In 2009 part of dues from government has been set off out of this heading and part of relevant loans granted has been settled by virtue of article 20 of the law of removing barriers to competitive production and improving the country's financial system. (Note 10-2-2-4) 13-5-2 the main amount of loans granted out of NDF in sum of IRR 170,278,051 million (USD 1,072 million) is related to the two granted facilities to Persian Gulf star company for every EUR and CNY. Due to non-payment of the two overdue installments, the debt balance has been transferred to the doubtful loans category. 13-6- Loans and advance to private sectors based on maturity date and interest rate 2020and before 2021 2022 2023 2024 and afterwards 20.03.2021 20.03.2020 24% & more Million Rials 10,850,520 3,340 1,629 0 437 10,855,926 1,212,523 21 to 24% Million Rials 41,745,812 12,747 1,427,900 17,549 186,362 43,390,370 1,252,325 18 to 21% Million Rials 446,785,052 814,218,448 124,172,067 261,529,738 307,224,797 1,953,930,101 962,109,937 20.03.2021 15 to 18% Million Rials 17,666,352 794,829 2,449,974 3,345,587 4,163,834 28,420,576 11,524,653 12 to 15% Million Rials 9,469,226 1,816,295 13,922,102 7,184,313 5,489,221 37,881,157 8,125,622 Less than 12% Million Rials 463,063,016 66,800,266 69,813,516 61,289,181 42,843,026 703,809,005 347,665,546 Total Million Rials 989,579,976 883,645,924 211,787,189 333,366,368 359,907,677 2,778,287,135 1,331,890,606 20.03.2020 Total Million Rials 707,620,970 402,026,716 141,583,359 1,006,796 79,652,765 1,331,890,606
46. 13-7- Loans and advance to private sectors based on type of collaterals 20 .03.2021 Deposit Participation Bonds Banking LG Listed stocks Land and Building Machinery Cheque & promissory note other Total loans and dues with collateral loans and dues without collateral Total loans and advance to private sectors 13-7-1 Million Rials 113,389,377 89,619 860,738 63,136,103 527,247,885 72,324,695 1,061,268,529 939,970,189 2,778,287,135 0 2,778,287,135 20.03.2020 Restated Million Rials 77,728,570 23,560 1,347,525 41,131,900 496,506,989 56,252,590 658,589,846 309,627 1,331,890,607 0 1,331,890,607 13-7-1- besides receiving cheque and promissory note, retails facilities has individual valid guarantor with salary deduction certificate 13-8- Turnover of loans and advance to private sectors Installment Sale Reward Contract Hire Purchase Forward Profit sharing equity Partnership Forfaiting Market-up loan Non-interest bearing FX loans granted Debtors for paid L/Cs Debtors for paid LGs Debtors for Partnership Bonds Total 217,705,525 76,191,829 (24,670,713) 35,919,909 10,779,701 (9,033,591) 1,601,294 640,739 (829,280) 90,017,672 175,535,861 (21,421,428) 24,181,107 11,610,947 (4,688,416) 288,275,135 66,326,221 (159,104,641) 31,467,121 57,273,644 (19,150,867) 300,616,568 661,606,072 (106,307,464) 93,585,477 120,266,889 (33,161,940) 245,424,792 135,749,260 (75,798,086) 59,701,904 12,202,402 (19,223,901) 6,615,742 3,337,980 (2,306,236) 2,433,465 101,722 (502,078) 1,397,545,710 1,331,623,269 (476,198,640) 149,656,982 17,590,982 2,972,141 269,226,641 37,666,019 1,412,753 244,132,105 31,103,639 195,496,716 69,589,898 855,915,176 180,690,426 455,032,947 70,271,388 10,619,627 2,033,110 2,423,190,444 29,509,411 8,269,252 (17,696,304) 731,615 219,660 (438,351) 366,892 146,875 (232,002) 3,995,038 7,793,931 (2,527,827) 3,474,471 1,669,082 (1,479,447) 31,170,825 7,455,728 (12,870,978) 1,328,477 2,419,076 (909,486) 53,483,596 160,360,783 (9,143,306) 463,000 595,273 (386,880) 44,514,083 10,300,845 (15,359,139) 1,462,510 190,396 (485,185) 239,708 31,206 (26,562) 956,389 507,063 (619,500) 171,696,017 199,959,168 (62,174,967) 20,082,359 512,925 281,765 9,261,141 3,664,106 25,755,575 2,838,068 204,701,073 671,393 85,072,261 1,167,722 244,352 843,952 355,096,691 Doubtful loans reserve Balance on 20.03.2020 Increase during period Balance on 20.03.2021 (13,858,060) (6,873,982) (20,732,042) (1,351,857) 183,698 (1,168,159) (181,821) (26,775) (208,596) (2,290,007) (2,549,305) (4,839,312) (3,777,233) (492,164) (4,269,397) (26,801,516) (2,531,590) (29,333,106) (945,624) (463,295) (1,408,919) (9,670,021) (8,651,854) (18,321,875) (2,456,771) (908,879) (3,365,650) (125,142,117) (143,628,257) (268,770,374) (44,380,270) (23,358,376) (67,738,646) (6,444,977) 5,264,102 (1,180,875) (50,848) 7,692 (43,156) (237,351,122) (184,028,985) (421,380,107) Net loans granted Balance on 20.03.2020 Balance on 20.03.2021 233,356,876 268,576,958 35,299,667 37,010,785 1,786,365 1,485,922 91,722,702 248,553,934 23,878,345 30,498,347 292,644,445 191,919,184 31,849,974 71,019,046 344,430,144 1,042,294,375 91,591,706 177,996,169 164,796,758 271,334,835 16,784,144 3,700,464 410,473 9,683,104 3,339,007 2,833,906 1,331,890,605 2,356,907,028 Principal of loans granted Balance on 20.03.2020 Granted during period Collected during period Translation effect during period Balance on 20.03.2021 Interests of granted loans Balance on 20.03.2020 Increase during period Collected during period Translation effect during period Balance on 20.03.2021 170,220,105 45,616,473 45,616,473
47. 13-8-1 Turnover of interest of loans and advance to private sectors Profit receivable of loans granted Balance on 20 .03.2020 increase during period Collected during period Translation effect during period Balance on 20.03.2021 Delay payment charges of granted loans Balance on 20.03.2020 Increase during period Collected during period Translation effect during period Balance on 20.03.2021 Interest of granted loans Balance on 20.03.2020 Balance on 20.03.2021 Installment Sale Reward Contract Hire Purchase Forward Profit sharing equity Partnership Forfaiting Market-up loan Non-interest bearing FX loans granted Debtors for paid L/Cs Debtors for paid LGs Debtors for Partnership Bonds Total 18,167,916 3,959,808 (12,443,071) 529,952 141,715 (339,568) 206,176 69,176 (141,675) 3,196,580 7,228,712 (1,831,406) 765,761 595,914 (38,163) 12,085,360 2,805,771 (4,637,049) 934,850 2,113,017 (566,535) 52,670,781 159,769,357 (8,489,115) 406,019 456,510 (346,626) 16,308,496 9,039,501 (2,993,298) 0 0 0 0 0 0 0 287,641 0 105,271,892 186,467,121 (31,826,507) 9,684,653 332,098 133,677 8,593,886 1,323,511 10,254,083 2,481,332 203,951,024 515,903 48,715,296 0 0 287,641 286,273,104 11,341,495 4,309,445 (5,253,233) 201,663 77,946 (98,782) 160,716 77,698 (90,327) 798,458 565,218 (696,421) 2,708,710 1,073,168 (1,441,284) 19,085,465 4,632,799 (8,216,772) 393,627 306,059 (342,951) 812,815 591,426 (654,191) 56,981 138,763 (40,254) 28,205,587 1,261,343 (12,365,841) 1,462,510 190,396 (485,185) 239,708 31,206 (26,562) 956,389 219,422 (619,500) 66,424,124 13,474,889 (30,331,302) 10,397,706 180,827 148,088 667,255 2,340,595 15,501,492 356,735 750,050 155,490 36,356,965 1,167,722 244,352 556,311 68,823,588 29,509,411 20,082,359 731,615 512,925 366,892 281,765 3,995,038 9,261,141 3,474,471 3,664,106 31,170,825 25,755,575 1,328,477 2,838,068 53,483,596 204,701,073 463,000 671,393 44,514,083 85,072,261 1,462,510 1,167,722 239,708 244,352 956,389 843,952 171,696,017 355,096,691 26,360,597 26,360,597 19,255,876 19,255,876 13-9- loans granted and dues from private sectors in type of customers’ breakdown: Real customers Legal customers Staff Total loans granted and dues from private sectors 13-9-1 20.03.2021 Outstanding Million Rials 1,204,946,138 1,466,154,333 107,186,664 overdue Million Rials (189,111,147) (230,106,656) (2,162,304) defaulted Million Rials 1,015,834,991 1,236,047,677 105,024,360 Doubtful loan Million Rials 671,527,020 817,100,631 80,614,075 20.03.2020 total Million Rials (105,755,381) (130,386,529) (1,209,211) total Million Rials 565,771,639 686,714,102 79,404,864 2,778,287,135 (421,380,107) 2,356,907,028 1,569,241,726 (237,351,121) 1,331,890,605 13-9-1 loans granted to staff are as follows: out of interest free resources in sum of IRR 12,668 billion and the rest in form of reward contracts in sum of IRR 31,995 billion, instalment sale in sum of IRR 17,035 billion and market up loan in sum of IRR 45,489 billion.
48. 13-10- loans granted to subsidiary and affiliated companies are as follows : Current Million Rials 295,739 235,208 23,207 404,597 5,683,380 13,170 7,014,494 0 1,823,256 2,020 609,543 440 companies member of the group Bank Mellat Brokerage Safe instruction of transaction Bank Mellat Publication Company Behsazan Mellat Company Bafgh Mineral, Iron & Steel Complex Rahbari Sanaye Behsaz Company Construction Company of Bank Mellat Behsaz Trading Service Development Company Mellat leasing Company Developing gostaresh rail transportation Behpardakht Mellat Company Eirdak Total Loans granted to the subsidiary and affiliated companies 20.03.2021 Non-Current Million Rials Million Rials 0 16,105,054 0 0 0 0 0 0 0 0 0 0 (4,436) (3,528) (348) (6,069) (85,251) (198) (105,217) 0 (27,349) (30) (9,143) (7) 0 (241,576) 231,680 22,859 398,528 5,598,129 12,972 6,909,277 0 1,795,907 1,990 600,400 433 20.03.2020 Total Million Rials 147,750 0 0 0 1,388,328 20,614 10,242,005 1,899,731 1,382,709 0 731,443 0 15,863,478 15,812,580 Total Million Rials 291,303 Doubtful loans Reserve 14- Investment and partnerships Investment in marketable shares Investment in real estates Investment in other shares Investment in other securities Total investments and partnerships Investment in marketable shares Investment in other shares Investment in other securities Total investments and partnerships 14-1 14-2 14-3 14-4 14-1 14-3 14-4 Current Million Rials 116,173,858 0 0 0 116,173,858 Current Million Rials 88,998,244 0 0 88,998,244 20.03.2021 Long-term Million Rials 0 11,572,105 24,284,677 272,808,698 308,665,480 20.03.2021 Long-term Million Rials 0 28,561,364 226,507,933 255,069,297 Group Total Million Rials 116,173,858 11,572,105 24,284,677 272,808,698 424,839,338 Current Million Rials 8,048,631 0 0 0 8,048,631 bank Total Million Rials 88,998,244 28,561,364 226,507,933 344,067,541 Current Million Rials 0 0 0 0 20.03.2020 Long-term Million Rials 0 10,189,704 33,464,207 62,275,839 105,929,750 Total Million Rials 8,048,631 10,189,704 33,464,207 62,275,839 113,978,381 20.03.2020 Long-term Million Rials 100,000 23,283,558 48,836,215 72,219,773 Total Million Rials 100,000 23,283,558 48,836,215 72,219,773
49. 14-1- Investment in marketable shares in the market are as follows : 14-1-1 Current investment in marketable shares in the market Shares of listed companies Iranian Investment Petrochemical Group Esfahan Oil Refinery Co. Mobin Petrochemical Co. Pardis Petrochemical Co. Bank Saderat National Iranian Copper Co. Mobarakeh steel Co. Telecommunication Company of Iran Iran Alloy Steel Co. Tehran Oil refinery Co Social security investment Co. Alborz Insurrance Co. Asia Insurance Co. Civil Pension Fund Investment Lavan Oil Co. South Kaveh Steel Co. Zagros Petrochemical Co. Sepah Investment Co. Ghadir Investment Co. Tabriz Oil Refinery Co. Bandar Abbas Oil Refinery Co. National Investment Co. Iran Transfo Co. Amin Reinsurance Co. Iran Khodro Co. other Source Number of Shares Share 223,150,000 2,942,617,265 124,788,899 19,300,000 586,184,920 568,784,741 1,438,338,189 20,000,000 90,000,000 2,066,544,253 54,137,500 2,920,049,022 1,848,981,074 125,500,000 4,094,000 28,000,000 2,950,000 41,313,187 20,658,062 259,007,539 854,362,548 446,819,778 577,988,522 59,019,352 5,072,825,205 6,941,838,879 percent Rate 1.60 3.90 2.78 1.23 0.76 2.80 1.26 0.63 2.10 2.62 1.64 20.25 2.60 14.50 2.07 3.01 1.27 8.20 3.59 2.59 0.60 2.55 1.59 1.51 1.68 - group 20.03.2021 Cost Price Million Rials 487,513 23,994,698 392,704 379,912 970,240 1,770,365 4,022,129 85,170 1,688,125 20,365,168 792,925 1,626,890 638,803 553,349 396,150 312,831 294,347 268,214 243,693 7,150,110 21,561,208 6,532,617 1,739,022 292,382 12,073,324 7,541,969 116,173,858 Net Sale Value Million Rials 2,433,049 42,788,316 2,137,376 1,997,954 1,557,151 7,673,038 20,201,897 203,592 1,736,880 19,930,529 571,490 11,403,749 4,233,560 1,897,033 379,035 615,575 891,351 296,065 240,187 8,472,033 24,463,165 4,951,485 1,581,210 287,469 12,771,588 0 173,894,778 Market Value Million Rials 2,454,650 43,168,196 2,156,352 2,015,692 1,570,976 7,741,160 20,381,252 205,400 1,752,300 20,107,475 576,564 11,504,993 4,271,146 1,913,875 382,400 621,040 899,265 298,694 242,319 8,547,249 24,861,950 4,995,445 1,595,248 290,021 12,884,976 0 175,438,638 20.03.2020 Cost Price Net Sale Value Million Rials Million Rials 466,425 880,788 564,934 4,042,043 463,850 1,346,816 297,310 590,970 51,707 69,969 861,244 2,038,861 2,024,145 6,203,350 140,857 231,168 0 0 128,013 189,462 0 0 591,678 4,012,074 396,369 3,044,504 305,366 677,858 42,200 51,525 71,999 100,432 257,613 296,500 9,868 14,028 78,112 89,600 0 0 0 0 0 0 0 0 0 0 0 0 1,296,941 5,793,140 8,048,631 29,673,088
50. 14-1-1 The shares of listed companies have no accumulated value Listed companies source Ma Insurance Tehran Refinery Co . Tabriz Refinery Co. Isfahan refinery Co. Bandar Abbas Refinery Co Iran Investment co. Iran Transfo Alborz Insurance Amin Reinsurance Iran Khodro Co. 20.03.2021 Number of Shares Share Bank 20.03.2020 percent Cost Price Total sale value Market Value Cost Price Net sale vale percent Million Rials Million Rials Million Rials Million Rials Million Rials 266,666,666 1,966,241,981 259,007,539 1,814,551,382 773,462,548 6.60 2.62 2.59 2.39 2.70 100,000 18,761,494 7,150,110 22,517,217 18,915,416 1,987,686 18,963,177 8,472,033 26,385,217 22,309,692 2,005,333 19,131,534 8,547,249 26,619,469 22,507,760 0 0 0 0 0 0 0 0 0 0 446,819,778 577,988,522 264,167,754 59,019,352 5,072,825,205 2.55 1.59 1.83 1.51 1.68 6,532,617 1,739,022 916,662 292,382 12,073,324 88,998,244 4,951,485 1,422,645 1,031,662 287,469 12,771,588 98,582,654 4,995,445 1,435,275 1,040,821 290,021 12,884,976 99,457,884 0 0 0 0 0 0 0 0 0 0 0 0 14-1-2 Long term investment in Marketable shares in the market source Listed companies Ma Insurance Establishment 20.03.2021 20.03.2020 Number of Shares percent Cost Price Total sale value Market Value Cost Price Net sale vale Share percent Million Rials Million Rials Million Rials Million Rials Million Rials 0 0 0 0 0 0 0 0 0 0 100,000 100,000 Net book value Million Rials 629,442 629,442 14-1-3 Sum of IRR 88,898 Billion increase in current investment in marketable shares in 2020, by virtue of approval No H5837 T/115274 dated Dec 30th, 2020 on council of ministers regarding assignment of the government’s remaining shares in abovementioned companies is against paying sum of IRR 30,000 billion in cash and settlement the dues from government in sum of IRR 58,898 billion (note11-2).
51. 14-2- Investment of the group in real estates is as follows : Source Land in Shahinshahr Three plots of land in Kelarabad Let Mall trading center Shahab trading center Ferdos boulevard land Louks-e- Talaei Land Jamshidieh Project Shahr-e Ghods land Real estate in Fereshteh St. Other Purchase Purchase Establishment Establishment Purchase Purchase Establishment Purchase Purchase Group 20.03.2021 Million Rials 205,108 1,291 5,971,149 1,728,961 14,500 1,979,532 916,993 111,886 7,141 635,544 11,572,105 14-2-1 investment in real estate is related to Behsaz Mosharekathay-e- Mellat Co. 20.03.2020 Million Rials 212,307 1,291 5,391,519 1,680,580 14,500 1,974,972 914,535 0 0 0 10,189,704
52. 14-3- Investment in other companies is as follows : Group Source Gharzolhasaneh Mehr-e-Iran Developing Metals Mines Persian gulf petrochemical industry Petro Imen Sepahan Bafgh Iron & Steel Mineral & Industry Complex Fars Export Industries Development Mellat Bazar Information-excluded from consolidation Radin Behsaz Trading of Anzali Free Zone-excluded from consolidation EIH Bank FEE Bank- excluded from consolidation SHAPARAK ITFC JAM Petrochemical Noor Credit Institution Pars Paper Bank Tejarat Bank’s staff retirement fund Oksir Farabi second Fund Khouzastan Steel Co. Tamin Oil and Gas Co. Mobile telecommunication Co. Pishro Common fund Agah Common fund Parsian Oil and Gas Co. Tamin Medical investments Persian gulf petrochemical industry Other Total Number of Shares Investment percent Cost Price Share Rate Million Rials 3,596,000,000 958,816,271 704,903,614 7,769,720 1,687,999,000 15.50 2.00 4.33 27.00 40.00 2,507,420 2,172,022 3,647,565 1,201,629 3,264,575 204,181,526 4,998,980 41.00 100.00 4,750,000 20.03.2021 Accumulated Net book value Value Decrease Million Rials Market Value Million Rials Million Rials Book Value 20.03.2020 Market Value Million Rials Million Rials 0 0 0 0 0 2,507,420 2,172,022 3,647,565 1,201,629 3,264,575 2,468,130 13,174,137 7,570,665 0 5,012,113 2,507,420 1,120,737 636,129 1,271,567 2,087,234 0 4,104,230 2,168,047 744,739 5,409 0 0 744,739 5,409 823,274 0 550,079 5,410 0 0 95.00 4,750 0 4,750 0 5,000 0 81,508,952 100,000,000 26.00 100.00 1,905,312 1,028,400 0 0 1,905,312 1,028,400 0 0 1,905,312 1,028,400 0 0 228,751,900 0 6,940,497 149,500,000 35,000,000 162,600,000 27,001,205 197,532 42,000,000 25,700,000 17,000,000 407,167 678 13.00 0.00 1.90 4.98 4.20 3.90 6.10 0.60 1.30 0.89 2.40 3.10 0.03 94,192 47,785 180,352 149,500 148,952 123,150 180,612 199,999 229,940 229,882 221,812 219,999 219,900 0 0 0 0 0 0 0 0 0 0 0 0 0 94,192 47,785 180,352 149,500 148,952 123,150 180,612 199,999 229,940 229,882 221,812 219,999 219,900 0 63,256 262,767 149,500 186,900 471,540 150,937 199,156 655,200 334,871 459,170 238,094 239,781 94,192 47,785 19,124 149,500 158,054 53,447 0 70,000 285,378 56,330 288,356 99,990 99,897 0 0 26,548 175,000 164,237 71,206 0 70,000 302,258 95,212 298,421 99,990 99,897 10,394,276 3.10 212,583 0 212,583 225,974 9,358 99,897 8,580,000 1.40 207,302 0 207,302 272,973 118,884 123,691 20,000,000 1.75 203,313 4,933,583 0 0 203,313 4,933,583 214,800 0 8,457 20,788,167 11,349 11,345,861 24,284,677 0 24,284,677 33,173,238 33,464,207 19,255,844 0
53. Bank Source Mellat Financial Group Behsaz Mosharekathaye Mellat Fannavaran Behsazan Farda Group PIB Bank Bank Mellat Yerevan EIH FEE Bank Mellat Market Making Special Investment (Shaparak) ITFC Company Other foreign investments of bank Other Rials investments of the bank Total Establishment Establishment Establishment Establishment Establishment Establishment Establishment Purchase 20.03.2021 Investment percent Cost Price Number of Shares Share 11,999,995,600 1,449,652,000 2,698,920,000 90,000,000 6,850,000,000 81,508,952 100,000,000 228,751,900 Purchase Establishment 0 0 0 Rate 100 100 100 60 100 26.30 100 13 Million Rials 11,998,496 1,409,734 2,619,379 6,377,880 1,475,807 1,905,312 1,028,400 94,192 0 0 0 Accumulated Value Decrease Book Value 20.03.2020 Book Value Million Rials 0 0 0 0 0 0 0 0 Million Rials 11,998,496 1,409,734 2,619,379 6,377,880 1,475,807 1,905,312 1,028,400 94,192 Million Rials 11,998,496 1,409,734 2,619,379 677,880 1,475,807 1,905,312 1,028,400 94,192 0 0 (7,104) (7,104) 47,785 1,530,728 73,651 28,561,364 47,785 1,994,092 32,481 23,283,558 47,785 1,530,728 80,755 28,568,469 14-3-1- Due to lack of significant influence on EIH and due to not having a board seat, investment in that bank has not been subjected to use special value method. 14-4- Investment in other securities is as follows: Source Partnership bonds of public sector FX partnership bonds Partnership bonds of private sector Total investment in other securities 14-4-2 Purchase Purchase Purchase Group 20.03.2021 Million Rials 231,003,539 9,948,907 31,856,252 272,808,698 20.03.2020 Million Rials 40,288,443 5,975 21,981,422 62,275,839 Bank 20.03.2021 Million Rials 215,814,951 0 10,692,982 226,507,933 20.03.2020 Million Rials 40,288,443 2,845,800 5,701,972 48,836,215
54. 14-4-1 The details of investments in other securities are as follows Name of Company Source Type of Bonds Government and state-owned companies : Ministry of Economic Affairs & Finance Crude oil standard Bonds Health Bonds Government benefit bonds Government benefit bonds Governmental Sokuk – Governmental benefit bonds Tehran Municipality bonds Shiraz urban Train Bonds Isfahan urban Train Bonds Shiraz Municipality Participation bonds Iran Khodro Bonds Saba Arvand Oil and Gas forward Bonds Isfahan Municipality participation bonds Regional electricity of Gilan Co. Forward bopnd Other Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Islamic treasury documents Banks: Bank Mellat Yerevan debentures Other FX securities of branches abroad Other investment companies and funds: Other FX securities of branches abroad Amin Yekom Farda Investment fund with fixed income Kamand Investment fund with fixed income Parand Paydar Sepehr Investment Fund Firt financial intermediary fund Vista Market Making Fund Tseey-e-Bazar-e Sarmayeh Common investment fund Mellat market making specific investment fund Owj-e-Mellat Investment fund Ofogh-e-Mellat Investment fund Andukhteh Mellat Investment fund Kiyan Investment fund with fixed income (Kiyan) Omid-e-Aseman common investment fund Mobarakeh Steel Co. Other Total investment in other bonds Group Average of profit rate 20.03.2021 Million Rials 20.03.2020 Million Rials Forward bonds Participation Participation Participation Participation Bonds Market up loan bonds Forward Bonds Participation Bonds Forward Bonds 19.8% 20.0% 17.7% 22.9% 18.8% 17.9% 20.0% 19.0% 19.0% 19.0% 18.0% 18.5% 18.0% 18.5% 413,176 25,008,829 500,000 21,331,909 157,361,036 0 5,000,000 2,350,000 2,350,000 1,500,000 1,463,721 5,291,837 1,950,000 4,999,677 1,483,354 231,003,539 2,301,215 4,999,999 500,000 16,587,229 10,000,000 4,400,000 0 0 0 1,500,000 0 0 0 0 0 40,288,443 Purchase Purchase Participation Bonds Participation Bonds 9.0% 6.2% 9,948,907 0 9,948,907 0 5,974 5,974 Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Participation Bonds Investment unit Investment fund Investment fund Investment fund Investment fund Investment fund Investment fund Investment Fund Investment Fund Investment Fund Investment Fund Investment fund Forward 6.20% 0.40% 6.20% 0.87% 1.20% 3.10% 1.08% 100.00% 51.00% 59.00% 51.00% 2.50% 8.10% 18.90% 8,249 1,269,310 752,856 457,401 246,592 244,347 1,797,774 22,878,477 1,699,212 263,175 384,951 177,819 120,417 1,500,000 55,672 31,856,252 272,808,698 0 607,233 524,617 682,410 0 0 1,499,546 999,073 634,044 82,002 0 174,305 100,000 0 16,678,192 21,981,422 62,275,839 forward Market-up loanbonds AFAD Market up loan-ARAD
55. Publisher Source Type of Bonds Government and state-owned companies : Ministry of Economic Affairs & Finance Crude oil standard Bonds Health Bonds Government benefit bonds Government benefit bonds Governmental Sokuk – Governmental benefit bonds Tehran Municipality bonds Shiraz urban Train Bonds Isfahan urban Train Bonds Shiraz Municipality Participation bonds Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Islamic treasury documents Banks: PIB debenture bonds Other investment companies and funds: Tahrobeh Iranian Common investment fund Mellat market making specific investment fund Other FX securities of branches abroad Mobarakeh Steel Co. Total investment in other bonds Bank Average of profit rate 20.03.2021 Million Rials 20.03.2020 Million Rials Forward bonds Participation Participation Participation Participation Bonds 19.8% 20.0% 17.7% 22.9% 18.8% 17.9% 19.0% 19.0% 19.0% 19.0% 413,176 25,008,829 500,000 21,331,909 157,361,036 0 5,000,000 2,350,000 2,350,000 1,500,000 215,814,951 2,301,215 4,999,999 500,000 16,587,229 10,000,000 4,400,000 0 0 0 1,500,000 40,288,443 Purchase Forty-year 0% 0 2,845,800 Purchase Purchase Purchase Purchase Investment fund Investment fund Participation Bonds Forward 23.0% 6.2% 18.9% 0 9,184,733 8,249 1,500,000 10,692,982 226,507,933 1,900,998 3,795,000 5,974 0 5,701,972 48,836,215 forward Market-up loan bonds AFAD Market up loan-ARAD
56. 14-5- Characteristics of subsidiary companies of the group are as follows : Name of Company A) Direct Investments of Main Company: Persian International Bank (PIB) Bank Mellat Yervan Country Investment percent Group Main unit England Armenia 60 100 60 100 B) Behsaz Mosharekatha Group: Behsaz Mosharekathaye Mellat Tadbirgaran Behsaz Mellat Tarh va Andisheh Behsaz Mellat Behris Isfahan Ierdak Bank Mellat Construction Co Bank Mellat Publication Rahbari Sanaye Behsaz Co Jahan Behsaz Mofarah Co Mellat leasing Mellat exchange office Mad Marketing and sale development Iran Iran Iran Iran Iran Iran Iran Iran Iran Iran Iran Iran 100 82 100 100 99 92 100 98 95 75 70 100 100 ---------- C) Fannavaran Hooshmand Behsazan Farda Group: Fannavaran Hooshmand Behsazan Farda Group Behsazan Mellat Beh Pardakht Mellat Yas Arghavani System Engineering Yas Arghavani Industrial Engineering Shaghayegh Software Engineering Safe transactional services infrastructure Etemad vosough Gostar Development Iran Iran Iran Iran Iran Iran Iran Iran 100 100 93 100 100 100 98 98 100 - D) Mellat Financial Group: Mellat Financial Group Behsaz Mellat Insurance Services MA Insurance Behsaz Trading Services Development Bank Mellat Financing Bank Mellat Brokerage Moein Mellat Development Almaseh Saz Arzesh Afarin Atlas Petro Faravaran Atlas Sepehr Sanat Sorena Vavan Construction & Urban Development Pars Shiraz International Hotel company Developing construction industry technology Railway Transportation Development Iran Iran Iran Iran Iran Iran Iran Iran Iran Iran Iran Iran Iran Iran Iran 100 100 7 100 95 90 96 93 100 100 100 100 70 75 95 100 10 - Main Activity Banking Investment Credit Rating & Assessment Debt collection String Production Building contractor Construction Services Printing Services Trading Services Hotel Management Leasing Exchange office services Surplus real states of the bank -- Software Design & Production Software Design & Production Software Design & Production Software Design & Production Software Design & Production Software Design & Production Equipment Installation & Commissioning Software Design & Production Investment Insurance services Insurance services Trading & Partnership Financing Stock Brokerage Services investment Production of cutting tools contract & Trading Operations Trading Services Warehousing & Tank Renting Services Constriction – Development Tourism industry Performing construction affairs Constructing Domestic Railway 14-6- Characteristics of affiliated companies of the group are as follows: Name of Company Tamin Sarmayeh Amin Bafgh Iron & Steel Industry & Mineral Complex (Project) EIH Fars Export & Industrial Development Minerals Drilling & Exploration Engineering Investment Percent Country Group Main Unit Iran 9 Iran 40 Germany 26.31 26.31 Iran 41 Iran 40 - Main Activity Financing Minerals Exploration Banking Export Minerals Exploration 14-7- Regarding low importance and lack of timely access to the financial statements of affiliated companies disclosing of investment in special value manner has waived. 20/03/2021 Name of Company Tamin Sarmayeh Amin Bafgh Mineral Iron & Steel Industry Complex (Project) EIH Fars Export & Industrial Development Period/Status 6-month/Non-audited 6-month /Non-audited 6-month /Non-audited 6-month /Non-audited Total Assets Total liabilities Incomes Profit & Loss Million Rials Million Rials Million Rials Million Rials 23,453,779 9,722,564 6,551,594 4,878,966 21,538,930 13,058,613 22,953,934 3,172,512 25,745,000 10,242,000 491,000 21,000 3,155,929 2,025,437 248,519 (10,315)
57. 15- Dues from subsidiary and affiliated companies Note Dues from subsidiary companies Dues from affiliated companies Total dues from subsidiary and affiliated companies 15-1 15-1 Group 20 .03.2021 20.03.2020 Net Net Million Rials balance Million Rials Million Rials 0 67,641,718 1,425,513 6,852 1,425,513 67,648,570 0 13,498 13,498 Bank 20.03.2021 20.03.2021 Doubtful loans Net reserve Million Rials Million Rials (1,014,626) 66,627,092 (103) 6,749 (1,014,729) 66,633,841 20.03.2020 Net Million Rials 27,056,335 1,147,874 28,204,209 15-1- Balance of dues from subsidiary and affiliated companies based on subject of bilateral transaction is as follows: 20.03.2021 Name of Assets & Assets & Purchasing Selling Received Paid OnMutual Receivable Payable Total Subsidiary/Affiliated Investments Investments services services OnAccount Interest- Dividend Dividend Company Sale purchase Account Free Subsidiary: Million Million Million Million Million Million Million Million Million Million Rials Rials Rials Rials Rials Rials Rials Rials Rials Rials Mellat Financial 0 0 0 0 0 39,555,420 0 8,899,997 0 48,455,417 Group Company Behsaz Mosharekathaye Mellat Bank Mellat construction Co. Fanavaran Behsazan Farda Company Mellat exchange office company Other dues Total dues from subsidiary companies Affiliated: Qarzolhasaneh Mehr Iran Total dues from affiliated companies 0 0 0 0 0 8,300,857 0 1,168,055 0 9,468,912 0 0 0 0 0 42,878 0 0 0 42,878 0 0 0 0 0 0 0 5,420,030 0 5,420,030 0 0 0 0 0 175,000 0 0 0 175,000 0 0 0 0 0 0 0 0 0 0 0 48,074,155 0 4,079,481 0 19,567,563 0 4,079,481 0 67,641,718 0 0 0 0 0 6,852 0 0 0 6,852 0 0 0 0 0 6,852 0 0 0 6,852 15-1-1 In the reported financial year, according to the tripartite memorandum of understanding, transferring shares of the holding companies of Behsaz Mosharekathay-e- Mellat and Mellat Financial Group dated Dec 12th, 2020, Tarh-oAndisheh Behsaz Mellat Co., Tadbir Mellat Co., Mellat leasing, Mellat exchange office, and Gharzolhasaneh- Mehr-eIran from Mella financial group to Behsaz Mosharekathay-e Mellat in sum of IRR 8,216 billion and the stocks of Mellat companies, and also shares of Almaseh saz, Mehr-o-Mah infrastructure and investment development companies from Behsaz Mosharekathay-e-Mellat have been transferred to Mellat Financial Goup in sum of IRR 692 billion, that the method of settling the transaction has been determined through set off with Bank Mellat dues from the mentioned companies.
58. 15-1- The remaining of note : 20.03.2020 Name of Assets & Assets & Purchasing Selling Received Paid On- Mutual Receivable Payable Subsidiary/Affiliated Investments Investments services services OnAccount Interest- Dividend Dividend Company Sale purchase Account Free Subsidiary: Million Million Million Million Million Million Million Million Million Rials Rials Rials Rials Rials Rials Rials Rials Rials Mellat Financial 0 0 0 0 0 6,735,048 0 12,256,680 0 Group Company Behsaz Mosharekathaye Mellat Behsazan Farda Company Bank Mellat construction Co. Fanavaran Behsazan Farda Co. Mellat exchange office company Other dues Total dues from subsidiary companies Affiliated: Qarzolhasaneh Mehr Iran Ahvaz sugar purification Mellat market making special fund Total dues from affiliated companies Total Million Rials 18,991,728 0 0 0 0 0 344,261 0 1,260,367 0 1,604,628 0 0 0 0 0 2,371 0 0 0 2,371 0 0 0 0 0 42,878 0 0 0 0 0 0 0 0 0 4,228,641 0 4,228,641 0 0 0 0 0 461,527 0 0 0 461,527 0 0 0 0 0 0 7,586,085 0 2,153,965 0 19,899,653 0 0 2,153,965 27,485,738 0 0 0 0 0 0 1,348 5,504 0 6,852 0 0 0 0 0 141,125 0 0 0 141,125 0 0 0 0 0 1,000,000 0 0 0 1,000,000 0 0 0 0 0 1,141,125 1,348 5,504 0 1,147,977 42,878
59. 15-2- Classification of dues from subsidiary and affiliated companies is as follows : Net dues from subsidiary companies Net dues from affiliated companies General reserve of doubtful loans Balance on 20.03.2021 Balance on 20.03.2020 Current Million Rials 67,641,717 6,852 (1,014,729) 66,633,841 28,204,209 Overdue Million Rials 0 0 0 0 0 20.03.2021 Defaulted Million Rials 0 0 0 0 0 Doubtful loans Million Rials 0 0 0 0 0 Total Million Rials 67,641,717 6,852 (1,014,729) 66,633,841 28,204,209
60. 16- Other Accounts Receivable Group Note Receivable Dividend Sundry debtors Realized Interest of bonds Dues from staff Dues from disposing assets Group companies ’ other accounts receivable 16-1 16-2 16-4 16-5 16-6 16-7 Other accounts receivable of group Balance Million Rials 10,248 24,056,082 7,632,975 30,875,014 19,181,877 59,592,321 141,348,517 Future years profit 0 0 0 0 (10,266,175) 0 (10,266,175) Bank Note Receivable Dividend Sundry debtors Realized Interest of bonds Dues from staff Dues from disposing assets Other accounts receivable of Bank 16-1 16-2 16-4 16-5 16-6 Balance Million Rials 10,248 24,056,082 7,632,975 30,875,014 19,181,877 81,756,196 Future years profit 0 0 0 0 (10,266,175) (10,266,175) 20.03.2021 Doubtful loans reserve Million Rials (154) (3,545,116) (114,495) (463,125) (133,736) 0 (4,256,625) Net Million Rials 10,095 20,510,965 7,518,480 30,411,888 8,781,966 59,592,321 126,825,716 20.03.2020 Net Million Rials 10,095 38,075,235 1,584,369 4,611,234 0 30,634,395 74,915,328 20.03.2021 Doubtful loans reserve Million Rials (154) (3,545,116) (114,495) (463,125) (133,736) (4,256,625) Net Million Rials 10,095 20,510,965 7,518,480 30,411,888 8,781,966 67,233,395 20.03.2020 Net Million Rials 10,095 38,075,235 1,584,369 4,611,234 0 44,280,933
61. 16-1- Balance of receivable dividend excluded interest of subsidiary and affiliated companies is as follows : Stock exchange market and & secondary market Iranite Company Gazlouleh Company. Mellat Investment Company Total Other Companies Refah Chain Store – Affiliated Total Balance of dividend receivable 20.03.2021 Gross Million Rials Bank 25 36 10,083 10,144 20.03.2020 Gross Million Rials 25 36 10,084 10,145 104 104 104 104 10,248 10,249 16-2- Balance of sundry debtors is as follows: 20.03.2021 Relevant items to facilities Claims and debt collection expenses FX Credit cards Receivable interest & commission Extending L/Gs Extending insurance policies of granted loans Extending sight L/Cs Total relevant items to facilities Total unrelated items to facilities Debtors for special issues On-account paid to individuals counterparty to the Head Quarters Ministry of economic affairs and finance Place in rent Clients of financial & credit institutions Advance payment to counterparties companies of the bank Sundry debtors in foreign currency of branches abroad Claim from non-listed Companies. Dues from selling National Iranian Copper Industries Forward bonds receivable interest Other items Total of non-relevant items to facilities Sundry debtors balance 16-2-1 16-2-2 16-2-3 16-2-4 16-2-5 20.03.2020 Gross Million Rials 1,130,850 3,232,766 652,317 2,902,984 37,587 18,348 7,974,852 Gross Million Rials 383,741 1,754,231 932,490 999,418 32,800 15,021 4,117,701 1,108,373 3,945,320 6,932,219 428,103 0 38,997 54,505 484,585 0 0 3,089,126 16,081,229 24,056,082 1,103,705 3,712,457 5,506,670 354,745 170,316 80,818 67,733 484,585 20,142,461 0 2,921,462 34,544,952 38,662,653 16-2-1 The amount of IRR 2,591 billion of this amount has been received from the Tember ank of Turkey, which until the date of preparation financial statements, property with TRY 13.6 million worth and a promissory note worth EUR 40 million (equal to TRY 359 million) have been received that part of the amount of received promissory note is related to one of the bank correspondent in the mentioned country. The process of legal procedures has been carried out by Tarh-o-Andishe Behsaz Mellat Company and has led to issuance of order from Turkish court in favor of the bank. 16-2-2 the main abovementioned dues in sum of USD 12.2 Million from foreign correspondents is for extending LGs. 16-2-3 this amount is mainly includes IRR 889 billion received from Mad marketing Co. for disposing surplus and foreclosed properties and sum of IRR 1,787 billion advance payment to the counterparty companies with logistics division. 16-2-4 According to minutes of meeting No. 0020/632 dated March 19th, 2018, between economic affairs and finance minister, head of country plan and budget organization, and Bank Mellat CEO, about crediting 50 percent or refunding used amount out of OSF, in implementing article 17 of permanent provisions of the country development program, sum of IRR 4,500 billion has been credited to the treasury account that has not been resolved definitely yet and based on the approved rate by monetary and credit council, profit calculates for them and registers in the accounts. 16-2-5 For using financial and credit institutions clients from SHETAB services that is being done through Bank Mellat ATMs.
62. 16-3- Classification of other receivable accounts based on guidelines approved by monetary and credit council is as follows : Dividend receivable Realized profit of the participation bonds Dues from staff Sundry debtors Dues for disposing assets Net other receivable accounts before deducting doubtful loans reserve General reserve of doubtful loans Special reserve of doubtful loans Balance on 20.03.2021 Balance on 20.03.2020 Current Million Rials 10,248 7,632,975 30,875,014 20,823,315 8,915,702 68,257,254 (1,023,859) 67,233,395 44,280,933 Overdue Million Rials 0 0 0 0 0 0 0 0 0 0 20.03.2021 Defaulted Million Rials Doubtful loans 0 0 0 0 0 0 0 0 0 0 Million Rials 0 0 0 3,232,766 0 3,232,766 0 (3,232,766) 0 0 Total Million Rials 10,248 7,632,975 30,875,014 24,056,082 8,915,702 71,490,020 (1,023,859) (3,232,766) 67,233,395 44,280,933 16-4 Includes profit receivable of ministry of cooperatives labor and social welfare market up loan and Ministry of agriculture-Jahad. 16-5 Is mainly for on-account paid due to part of staff retirement allowance to staff special investment fund. 16-6 The above amount is mainly includes sum of IRR 15,581 billion due from Atiyeh Khahan capital management Co. for disposing Salsabi project (Hotel Jahan) as instalment (16-year). 16-7 The main amount of receivable accounts from group is related to Behsaz Mosharekathay-e- Mellat holding that is due from brokerages and money changers and has not been settled until preparation date of this report. Main dues from holding are as follows: Behsaz Mosharekathay-e- Mellat IRR 30,949 Billion, Mellat Financial Group IRR 17,370 Billion, and Fanavaran Houshmand Behsazan Farda IRR 6,251 Billion.
63. 17- Tangible Fixed assets Group Cost Price – Revaluation Balance on 21.03.2019 Increase during fiscal year Increase (decrease) due to revaluation Sold Transfers & other changes Balance on 20.03.2020 Increase during fiscal year Increase (decrease) due to reevaluation Sold Transfers & other changes Balance on 20.03.2021 Accumulated depreciation & decrease of accumulated value Balance on 21.03.2019 Year depreciation & value decrease Sold Transfers & other changes Balance on 20.03.2019 Year depreciation & value decrease Sold Transfers & other changes Balance on 20.03.2021 Book value Balance on 21.03.2019 Balance on 20.03.2020 Balance on 20.03.2021 Land Building & Installations Vehicles Furniture & Appliances Computer Accessories Million Rials Million Rials Million Rials Million Rials Million Rials Rented Properties Renovation Million Rials Properties under Construction Million Rials Capital Orders & Prepayments Million Rials Capital Items in Warehouse Total Total Million Rials Million Rials Million Rials 19,320,779 41,473 146,627,667 18,255,081 1,149,123 0 290,900 162,381 0 4,592,398 473,841 0 3,762,102 1,958,961 0 214,862 14,268 0 7,902,992 1,563,784 0 55,333 504,288 (0) 426,940 2,266,277 0 54,821,387 8,134,396 146,627,667 73,090,451 11,516,159 146,627,667 (645,616) (692,689) 164,651,614 2,079,633 0 (241,409) 782,338 19,945,133 889,788 0 (16,469) 0 436,812 101,216 0 (156,888) (272,219) 4,637,132 1,180,195 0 (11,873) (172,882) 5,536,308 1,755,083 0 (0) 0 229,130 70,140 0 0 (1,265,307) 8,201,469 2,778,161 0 0 (28,502) 531,119 834,217 0 0 (1,998,152) 695,065 4,612,413 0 (1,072,255) (3,647,413) 204,863,782 14,300,846 0 (2,572,044) (3,551,404) 225,110,829 21,627,714 0 (470,374) 0 166,260,873 (3,214,192) 5,454,638 23,075,367 (32,826) 0 505,202 (24,954) (295,360) 5,497,013 (82,034) (290,082) 6,919,275 0 0 299,270 0 (5,454,638) 5,524,992 0 (282,396) 1,082,940 0 (3,158,379) 2,149,099 (3,824,380) (4,026,217) 211,314,031 (5,301,865) (5,681,478) 235,755,201 0 0 6,525,644 835,473 164,766 38,698 4,029,473 397,127 3,255,470 628,096 158,702 31,880 14,134,055 1,931,274 18,756,155 3,907,953 0 0 0 0 (135,230) 41,028 7,266,915 998,865 (16,254) 0 187,210 53,620 (33,855) 4,392,745 542,877 (11,873) (5,253) 3,866,440 778,455 0 0 190,582 (21,510) (197,212) 35,775 15,903,892 2,395,327 (203,788) (78,670) 22,538,990 5,142,129 0 0 0 (137,604) 111,028 8,239,204 (32,743) 0 208,087 (24,954) (4,557) 4,906,111 (80,395) 4,558 4,569,058 0 0 212,092 0 0 0 (275,696) 111,029 18,134,552 (620,354) 101,821 27,162,586 19,320,779 164,651,614 166,260,873 11,729,437 12,678,218 14,836,163 126,134 249,602 297,115 562,925 244,387 590,902 506,632 1,669,868 2,350,217 56,160 38,548 87,178 7,902,992 8,201,469 5,524,992 55,333 531,119 1,082,940 426,940 695,065 2,149,099 40,687,332 188,959,890 193,179,479 54,334,296 202,571,839 208,592,615 17-1- Fixed assets have been evaluated as stated in explanatory note 8-3-2. 17-2- The assets of the bank and foreclosed properties and key money, rental real states and inventories of warehouses totally in IRR 87,494 billion cost price and IRR 67,273 billion book value have been insured up to IRR 64,044. Furthermore, according to note 1 of article 3 of the movable and immovable properties’ fire insurance contract bearing No. 90/99/0004 dated September 3rd, 2011 and extending from September 23rd, 2019 until September 21st, 2020 for one month and since Sep 22nd, 2020 until March 20th, 2021has been extended via insurance policy monthly.
64. If the insurer for any reason , characteristic and the value of the properties be omitted and do not being announced to the insurer, the insurer at the time of occurring accident, will compensate the occurred damage, subject to that the relevant insurance premium be paid to the insurer at the same time (at the time of damage payment). 17-3- Number of 78 of the bank's immovable real estates in IRR 1,998 billion and IRR 1,573 Billion cost price and book value respectively do not have ownership documents or their ownership documents are in the name of others, that the bank is following up the issue and acquiring the ownership documents. Also, number of 44 of immovable properties in IRR 550 billion book value has endowed land. Furthermore, number of 50 of the bank’s properties in IRR 18,755 billion book value is in the name of the merged banks. 17-4 Accumulated depreciation of disposable movable property is removed from the books at the time of disposal. 17-5 Completing assets are mainly for projects in progress, constructing and repairing the management buildings and bank branches throughout the country including building of branches management of East Azarbayjan, Fars, Golestan, Golestan-e-Pasdaran, and Jeyhoun crisis Management site. 17-6 The properties of the bank are insured based on value of the building, and according to this issue that, the land is not threatened by any dangers under cover, therefore insurance cover of the buildings and immoveable properties is sufficient. 17-7 The balance of trusty goods held with the bank is under the insurance cover in sum of IRR 300 Billion. 17-8 During fiscal year for the occurred damage to the bank’s branches sum of IRR 68 billion has been collected from insurance Co. and is inserted in creditors heading. 17-9- The book value of the revaluated land and building based on the cost price manner is as follows: Land Building Total book value of the revaluated land and building 20.03.2021 Based on Cost Based on Price Revaluation Million Rials Million Rials 8,270,882 166,260,873 10,322,535 14,836,163 18,593,417 181,097,036 20.03.2020 Based on Cost Based on Price Revaluation Million Rials Million Rials 6,661,623 164,651,614 7,192,298 12,678,218 13,853,921 177,329,832 17-10- Out of sum of IRR 18,135 billion accumulated depreciation sum of IRR 2,938 billion is related to revaluated assets depreciation of 1992 and 2014. 17-11- Main increase in heading land during period is related to buy Saba Boulevard and Khaled Eslamboli (private banking building) land in IRR 726 billion. 17-12- The main decrease in building and installations heading during period is related to sell Salsabil Hotel in IRR 3,026 billion cost value. 17-13- Disposing assets during period have been disclosed in classification level in Note 47-1.
65. 18- Intangible Assets Group Bank 20 .03.2021 20.03.2020 20.03.2021 20.03.2020 Million Rials Million Rials Million Rials Million Rials Key money 14,445,425 11,962,135 11,454,579 11,480,129 Royalty of Using Public Services 38,703 45,329 20,665 20,668 Computer Software 10,916,263 9,411,258 10,341,653 8,951,839 25,400,392 21,418,721 21,816,897 20,452,636 Deducted: Accumulated Depreciation (4,140,588) (3,630,380) (4,140,588) (3,579,930) 21,259,804 17,788,341 17,676,310 16,872,706 Bank Cost Price Balance on 21.03.2019 Increase during fiscal year Sold Increase from revaluation Transfers & other changes Balance on 20.03.2020 Balance on 21.03.2020 Increase during fiscal year Increase (decrease) from revaluation Sold Transfers & other changes Balance on 20.03.2020 Accumulated Depreciation & Accumulated Value Decrease Balance on 21.03.2019 Year depreciation Sold Transfers & other changes Balance on 20.03.2021 Balance on 21.03.2020 Depreciation of the period Sold Transfers & other changes Balance on 20.03.2021 Book Value On 21.03.2019 On 20.03.2020 On 20.03.2021 Goodwill of Business Place Million Rials Software Million Rials Software Development Million Rials Royalty of suing public services Million Rials Total Million Rials 1,133,525 6,263 (61,804) 10,415,196 (13,051) 11,480,129 11,480,129 18,691 0 (91,689) 47,448 11,454,579 1,158,292 906,194 0 0 (347,524) 1,716,962 1,716,962 193,510 0 0 510,223 2,420,695 6,814,907 1,504,115 0 0 (1,084,145) 7,234,877 7,234,877 686,081 0 0 0 7,920,958 30,631 19 0 (0) (9,982) 20,668 20,668 0 0 (3) 0 20,665 9,137,355 2,416,591 (61,804) 10,415,196 (1,454,702) 20,452,636 20,452,636 898,282 0 (91,692) 557,671 21,816,897 0 0 0 0 0 548,676 250,970 0 0 799,464 2,194,686 585,598 0 0 2,780,284 0 0 0 0 0 2,743,362 836,568 0 0 3,579,930 0 0 0 0 0 799,646 128,951 0 0 928,597 2,780,284 431,706 0 0 3,211,990 0 0 0 0 0 3,579,930 560,657 0 0 4,140,587 1,133,525 11,480,129 11,454,579 609,616 917,316 1,492,098 4,620,221 4,454,593 4,708,968 30,631 20,668 20,665 6,393,993 16,872,706 17,676,310
66. 18-1- The book value of key money of business place that is revaluated based on cost price is as follows : Key money of business place 20.03.2021 Based on Cost Based on Price Revaluation Million Rials Million Rials 27,960 11,454,579 20.03.2020 Based on Cost Based on Price Revaluation Million Rials Million Rials 289,825 11,480,129 19- Legal Deposit Group 20.03.2021 20.03.2020 Million Rials Million Rials 377,186,703 249,152,603 21,815 3,056,814 2,917,979 1,150,819 380,126,497 253,360,236 Legal deposit – deposits of branches of main land – Rials Legal deposit – deposits of branches of free zones – Rials Legal deposit held with central banks of other countries Bank 20.03.2021 20.03.2020 Million Rials Million Rials 377,186,703 249,152,603 21,815 3,056,814 2,917,979 1,150,819 380,126,497 253,360,236 19-1- The legal deposit held with the CBI has been calculated in executing clause 3 of article 14 of monetary and banking law and based on the rates set by monetary and credit council and it is confirmed by the CBI. 19-2- No legal deposit is held with the CBI for deposits in foreign currency of the main land and free zones branches. 20- Other Assets Note Net debt of clients for time L/Cs Foreclosed collaterals Ready for sail assets Items in transit Gold and silver Tax stamp Consumables items of warehouse other Total of other assets 20-1 20-2 20-3 20-4 Group 20.03.2021 20.03.2020 Million Rials Million Rials 24,963,158 8,695,110 24,631,020 12,970,370 3,071,314 3,741,881 7,079,589 2,934,201 6,308,034 1,566,987 28,578 27,308 2,953,455 884,018 2,368,433 1,149,691 71,403,581 31,969,565 Bank 20.03.2021 20.03.2020 Million Rials Million Rials 24,963,158 8,695,109 24,631,020 12,970,370 2,832,263 3,134,724 7,079,589 2,934,201 6,308,034 1,566,987 28,578 27,308 2,128,887 884,018 0 0 67,971,529 30,212,717
67. 20-1- Net clients ’ debt for time L/Cs 20.03.2021 Clients debts for time L/Cs (Rials) Clients debts for time L/Cs (Foreign Currency) Total clients debts for time L/Cs deducted: Advance-received and interim received of time L/Cs – Foreign currency Doubtful loans reserve Net clients debt for time L/Cs 20-1-1- Turnover of doubtful loans reserve is as table below: 20-1-1 20.03.2021 Million Rials 132,413 0 0 247,737 380,150 Balance at the beginning of year Collected Bad debt Increase or decrease during year Balance at the end of year 20.03.2020 Million Rials 8,499,628 935,135 9,434,763 (607,241) (132,413) 8,695,109 Million Rials 24,053,231 1,582,306 25,635,538 (292,230) (380,150) 24,963,158 20.03.2020 Million Rials 352,994 0 0 (220,581) 132,413 20-2- foreclosed collaterals The combination of foreclosed collaterals is as follows: Nature Moveable Furniture Equipment Vehicles Shares Total movable foreclosed collaterals Immoveable Residential Commercial/Administrative Factory Land Total immovable foreclosed collaterals Total foreclosed collaterals Accumulated value decrease Total foreclosed collaterals Profit (loss) from sale Million Rials foreclosed during period Million Rials 33,959 2,669,903 108,419 21,639 2,833,920 0 101,055 0 10,522,939 10,623,994 0 (108,421) 0 0 (108,421) 0 0 0 0 0 33,959 2,662,537 108,419 10,544,578 13,349,493 3,810,748 1,722,623 3,305,504 1,297,575 10,136,450 12,970,370 0 12,970,370 22,168,725 669,788 2,272,772 153,924 228,064 3,324,548 13,948,542 (727,490) (374,278) (640,421) (388,230) (2,130,419) (2,238,840) (49,052) 0 0 0 (49,052) (49,052) 3,703,994 3,621,117 2,819,007 1,137,409 11,281,527 24,631,020 0 24,631,020 4,797,664 20.03.2020 Selling/assigning during period Million Rials Adjustments 20.03.2021 Million Rials Million Rials
68. 20-2-1- Age analysis of the rest of moveable and immoveable foreclosed collaterals are as follows : Nature Less than one year since foreclosing date One to two years since foreclosing date More than two years since foreclosing date 20.03.2021 Million Rials 13,948,542 3,355,811 7,326,667 24,631,020 20.03.2020 Million Rials 3,699,112 2,451,723 6,819,535 12,970,370 20-2-2- The number of foreclosed properties that is occupied by other parties is 957 in IRR 5,307 billion cost price that 103 of which in IRR 672 billion do not have ownership documents. 20-2-3- The profit of selling foreclosed pledges has been disclosed in explanatory note 47 of the profit and loss statement. 20-3- By virtue of the court order No. of 5,054 million of bank Saderat stocks owned by Falahatiyan brothers against dues from that group separated and based on the conducted agreements in economic crimes court the ownership of the account has transferred to the Mellat financial group through bank Mellat brokerage and central securities depository company and funds settlement. No. of 439 million of stocks have been sale and the relevant funds transferred to the bank. The balance of stocks on March 03, 2021 is IRR 10,523 billion (4,615 million stocks). 20-3- - Assets ready to sell have been classified based on circular No.3247/18 issued by the board of directors of the bank on March 03rd, 2014 and circular No.3274/74 issued by the board of directors of the bank on July 07th, 2014 that is published in wide-circulation newspapers several times. It is worth to note that the number of 24 of real states ready for sale in IRR 54 billion book value do not have ownership document or the land is endowed or the ownership document is in the name of merged banks or in the name of the others. 20-4 Items in transit at the time of balance sheet are as follows: Note Center / Rials Center / Foreign Currency Branches/Rial local debtors / Rials 20-4-1-1 local debtors / Foreign Currency Surplus Resources Sight deposit held with foreign Branches Sight deposit of foreign branches held with each other FX Time deposit held with foreign branches Dues from Head quarters Items in transit 20.03.2021 debit Million Rials 0 0 18,517,436 148,638,793 2,551,981 2,330 29,920,886 74,855 0 669,044 200,375,325 7,079,589 20.03.2020 credit Million Rials 429,686 0 100,361,707 2,068,823 2,330 14,231,316 38,521 0 327,447 117,459,830 2,934,201 Note Center / Rials Center / Foreign Currency Branches/Rial local creditors / Rials local creditors / Foreign Currency Surplus Resources Legal deposit of branches of free zones Sight Deposit of Foreign Branches held with us 20.03.2021 debit Million Rials 6,017,309 2,608,037 0 124,779,687 42,351,327 0 2,277 17,537,099 193,295,736 20.03.2020 Represented credit Million Rials 0 1,508,143 65,152,908 43,729,063 0 2,277 4,133,238 114,525,629
69. 20-4-1The balance of internal debtors in Rial : 20-4-2 The balance of internal creditors in Rial 20-4-1- local debtors in Rial 20-4-2- local creditors in Rial Note Payment to SATNA for HQs SHAPARAK PAYA system TTs Withdrawn funds from core accounts SHETAB Past liabilities in foreign currency other items 20-4-1-1 20.03.2021 Million Rials 0 70,940 0 64,132,884 45,913,866 36,146,875 2,374,228 148,638,793 20.03.2020 Million Rials 1,842,639 71,434 578 29,432,181 28,745,547 36,146,875 4,122,453 100,361,707 Note SHETAB Remitted fund to JAM account Subsidy of SMEs SHAPARAK SATNA other items 20.03.2021 Million Rials 94,115,234 22,927,723 655 1,701,394 0 6,034,682 124,779,687 20.03.2020 Million Rials 42,137,373 16,914,103 831 2,397,676 258,840 3,444,085 65,152,908 20-4-1-1- The headings of local debtors in Rial and local creditors in foreign currency is stated as intermediary headings of branches and international division in sum of IRR 36,147 Billion for the past liabilities in foreign currency subject to the Circular No.60/1015. 20-4-3- About the abovementioned note, the provisions of letter No.1225/B.M. issued by supervision on banks and credit institutions management – Department of banking research and regulations of the CBI the subject of guidelines of the manner of issuing and registering of accounting documents related to operations in foreign currency have been observed. 20-4-4- The main amounts of Center /Rial and Center / foreign currency and local debtors and creditors subject to note 20-4-1 and 20-4-2 are related to credit and withdrawal to/from SHETAB, SATNA, clearing, SHAPARAK systems, etc. with branches and divisions that have been mainly settled until the date of financial statements.
70. 21- Dues to banks and other credit institutions Central Bank Sight deposit – foreign currency Time deposit – foreign currency Debt for previous FX liabilities (circular No.60/1015 of the CBI) Debt for overdraft from the accounts Debt for difference of foreign currency rate Rials Current deposit of state-owned institutes (in CBI representative) facilities received from CBI – Rials Debit for OSF Paid interest of facilities received from CBI Other Total debt to the CBI Domestic Banks and Credit Institutions Sight deposit – Rial Received facilities- Rial Sight deposit – foreign currency Total dues to the domestic banks and credit institutions Foreign Banks Sight deposit – foreign currency Facilities received - foreign currency Total debt to the foreign bank Total debt to the banks and other credit institutions 20.03.2021 Million Rials 21-2 10-2-2-1 21-3 21-1 21-3 Group 20.03.2020 Million Rials 20.03.2021 Million Rials Bank 20.03.2020 Million Rials 76,937 752,314,891 17,804,554 0 35,787 103,645 19,517,182 3,699,424 8,920,830 49,113 802,522,363 5,857,218 391,109,386 17,804,554 16,586 35,787 4,180,940 19,531,828 14,859,748 6,353,171 1,149 459,750,368 76,937 752,314,891 17,804,554 0 35,787 103,645 19,517,182 3,699,424 8,920,830 49,113 802,522,363 5,857,218 391,109,386 17,804,554 16,586 35,787 4,180,940 19,531,828 14,859,748 6,353,171 1,150 459,750,368 3,564,820 1,963,795 14,334,516 19,863,130 2,441,874 0 9,162,794 11,604,668 3,564,820 0 14,334,516 17,899,335 2,441,874 0 9,162,794 11,604,668 29,356,447 29,757 29,386,203 851,771,697 17,116,169 43,773 17,159,942 488,514,978 5,126,051 29,757 5,155,807 825,577,506 4,600,009 43,773 4,643,782 475,998,818 21-1- Facilities received from the OSF is related to 9 facilities, 8 of which have been settled and the funds of 6 facilities have been remitted to the OSF account during the year in form of article 20 of Law of removing production barriers. The banks profit share’s out of this type of facilities is 60 percent of receivable profit and delay payment charges. 21-2- Abovementioned FX time deposit is mainly related to 16 FX deposits of the CBI held with bank Mellat totally in sum of EUR for granted facilities out of energy fund and reason of its increase is because of foreign currency translation. In spite of rendered deadline to the ministry of petroleum affiliated companies in budget low of 2019 up to 2021 for forbearance, the CBI has not extended the abovementioned deposits in maturity date and its extension is subject to issuance of permission from government (council of ministers) and rendering documents of allocating above facilities to the affiliate state-owned of ministry of petroleum and the proof of using from aforementioned amounts for financing upstream plan of oil and gas.
71. 21-3- Sum of IRR 19 ,517 billon for facilities received from the CBI include sum of IRR 19,000 billion credit line with 17.5 percent rate and 1 year maturity date. Sum of IRR 8,921 billion is the profit of aforementioned credit lines. 22- Deposits of Clients Real Clients Sight deposits and the like Saving deposits and the like Total deposits of real clients Legal Clients Sight deposits and the like Saving deposits and the like Other deposits & advance-received Total legal customers deposits Total customers’ deposits Group 20.03.2021 20.03.2020 Million Rials Million Rials 20.03.2021 Million Rials Bank 20.03.2020 Million Rials 22-1 22-2 495,026,434 445,040,688 940,067,122 447,831,521 433,609,095 881,440,616 495,026,434 445,040,688 940,067,122 447,831,521 433,609,095 881,440,616 22-1 22-2 22-3 433,877,667 335,181,853 114,808,211 883,867,732 1,823,934,854 214,755,073 2,615,048 120,754,656 338,124,777 1,219,565,392 460,191,458 335,181,853 110,676,103 906,049,415 1,846,116,537 221,011,089 2,615,048 81,260,439 304,886,576 1,186,327,192 22-1- Sight deposits and the like of real and legal customers Current interest-free deposits – Rial Current interest -free deposits – foreign currency Types of sold banking check TTs on bank – Rial TTs on bank – foreign currency Unused managed funds in Rial Sundry creditors – Rial Sundry creditors – foreign currency Unclaimed balance – Rials Unclaimed balance – foreign currency Total sight deposits and the like 22-1-1 22-1-2 Group 20.03.2021 20.03.2020 Million Rials Million Rials 786,095,671 477,845,827 78,640,755 34,864,519 30,500,723 125,259,002 44,413 271,459 403 1,818 3,505 38,643 4,277,238 9,089,078 21,322,038 11,447,686 7,852,786 3,665,882 166,569 102,680 928,904,101 662,586,594 Bank 20.03.2021 20.03.2020 Million Rials Million Rials 807,925,508 479,501,621 75,830,118 36,057,785 30,500,723 125,259,002 44,413 271,460 403 1,818 3,505 38,643 11,571,829 12,496,033 21,322,038 11,447,686 7,852,786 3,665,882 166,569 102,680 955,217,892 668,842,609 22-1-1- Types of sold banking checks are related to inter-city checks of issuing branch, coded checks of other branches and inter-bank checks of other banks that issues by the customers’ requests and they will be settled within 24 hours..
72. 22-1-2- The balance of this heading is mainly for undone TTs in foreign currency of the customers . 22-2- Saving deposits and the like of real and legal customers Group 20.03.2021 20.03.2020 Million Rials Million Rials 244,704,017 147,129,882 58,918,944 35,858,584 475,677,310 252,539,867 806,657 646,439 115,614 49,372 780,222,542 436,224,144 Saving interest-free deposits – Rial Saving interest-free deposits – foreign currency Saving deposit – foreign branches 22-2-1 Staff deposit account Special unused interest-free deposits Total saving deposits and the like Bank 20.03.2021 20.03.2020 Million Rials Million Rials 244,704,017 147,129,882 58,918,944 35,858,584 475,677,310 252,539,867 806,657 646,439 115,614 49,372 780,222,542 436,224,144 22-2-1 include interest-free deposits held with the Seoul Branch of South Korea that have been translated at the end of the year. 22-3- Other deposits and advance-received amounts Cash deposits of LGs – Rial Cash deposits of LGs – foreign currency Advance -received amount for L/Cs – Rial Advance -received amount for L/Cs – foreign currency Other Advance -received amounts Long-term accounts and payable documents Total other deposits and advance-received Group 20.03.2021 20.03.2020 Million Rials Million Rials 24,658,698 15,344,634 7,761,033 4,774,056 5,883,134 2,267,356 66,469,856 58,870,236 10,035,490 4,157 0 39,494,216 114,808,211 120,754,655 Bank 20.03.2021 20.03.2020 Million Rials Million Rials 24,658,698 15,344,634 7,761,033 4,774,056 5,883,134 2,267,356 66,469,856 58,870,236 5,903,382 4,157 0 0 110,676,103 81,260,439 23- Payable Dividend Payable dividend of parent company Payable dividend of subsidiary companies Total 23-1 Group 20.03.2021 Million Rials 163,627 320,978 484,605 20.03.2020 Million Rials 36,514 1,120,449 1,156,963
73. 23-1- Payable dividend of the parent company is as follows : Previous years EPS Approved dividend Rials Million Rials Fiscal year ending on 20.03.2020 26 Total Balance on 20.03.2020 Million Rials 36,514 0 1,300,000 36,514 Payable Dividend during year 20.03.2021 Million Rials (1,950) (1,170,937) Capital injection out of dues Million Rials (1,172,887) 0 0 0 Balance on 20.03.2021 Million Rials 34,564 129,063 163,627 24- Operation Tax Reserve The tax reserve turnover is as follows: 20.03.2021 Balance at beginning of year Operation tax reserve of year Operation tax of previous years amendment Paid during the year Relevant operation tax reserve Tax advance payments Balance at the end of the year Group Million Rials 21,005,447 38,972,202 104,150,862 (20,317,301) 143,811,210 0 143,811,210 20.03.2020 Million Rials 7,743,790 10,572,826 35,221,419 (19,489,756) 34,048,279 (13,042,832) 21,005,447 20.03.2021 Bank Million Rials 18,166,680 36,354,546 104,000,000 (18,553,097) 139,968,129 0 139,968,129 20.03.2020 Million Rials 5,184,926 8,732,016 35,000,000 (17,750,262) 31,166,680 (13,000,000) 18,166,680 24-1- Income tax of the bank for all years before 2016 has been finalized and settled and the summary of tax status of the bank for operation years of 2015 up to 2020 is as follows: Amounts in Million Rials Fiscal Year 21.03.2015 to 19.03.2016 20.03.2016 to 20.03.2017 21.03.2017 to 20.03.2018 21.03.2018 to 20.03.2019 21.03.2019 to 20.03.2020 21.03.2020 to 20.03.2021 Total Tax Recognized Reserve Balance 20.03.2021 Reserve Balance 20.03.2020 Declared Profit (Loss) Income subject to tax declared 13,179,119 3,948,305 789,661 12,452,772 7,145,059 7,367,504 0 0 7,211,999 647,150 129,430 11,209,868 8,481,278 9,050,758 0 0 11,395,991 3,200,656 640,131 16,958,801 0 0 12,453,413 5,640,132 123,897,482 2,100,000 420,000 110,188,262 86,364,000 30,332,625 56,031,375 3,794,531 68,842,369 43,660,080 8,732,016 132,276,741 0 6,544,120 35,128,796 8,732,016 276,965,030 181,772,729 36,354,546 0 0 0 36,354,546 0 47,065,784 283,086,444 101,990,337 53,295,007 139,968,129 18,166,680 Declared Definite Paid Recognition Method Book inspection Book inspection Uninspected Uninspected
74. 24-2 about probable debt to the tax affairs organization , besides the reserved amount in payable tax heading, the required reserves is in existed in other reserve heading. 24-3- With regard to settling the balance of tax debts until March 20th, 2015, the relevant liquidation certificate has been taken until March 20th, 2015. 24-4 Based on definite operation tax slip of 2015 fiscal year bearing No. 69593520 dated Dec 22ed, 2019 sum of IRR 7,145 Billion has been claimed from the bank that totally has been paid, furthermore in executing legal regulations after objection and following up from high tax council, the issues has been returned to board of appeal, again. 24-5- Based on definite operation tax slip No.61139794 dated March 10, 2019 sum of IRR 8,481 Billion has been claimed from the bank that has been paid totally and in line with the banks objection to the mentioned tax by virtue of verdict No. D/201/10523 dated September 21 2019 of the high tax council the case has transferred to another tax dispute resolution board that based on the report of executing contract, at least sum of IRR 656 billion extra paid tax would be return to the bank. 24-6 Based on operation recognition tax slip No.24686092 dated January 12, 2019 for fiscal year from March 21, 2017 to March 20, 2018 sum of IRR 16,958 Billion has been claimed from the bank that by virtue of the vote of problem resolving council of initial tax No. 87394811 dated January 9th, 2021 the abovementioned tax has been decreased to IRR 15,674 Billion and the bank has objected in executing legal regulation. It shall be mentioned that no definite tax slip has been noticed to the bank up to now. 24-7- Based on operation recognition tax slip No.100000094523476 for fiscal year from March 21, 2018 to March 20th’, 2019 dated March 29th, 2021 sum of IRR 86,364 billion has been claimed from the bank that despite of the CBI obligation to translation of monetary items with IRR 75,000 for USD and IRR 85,000 for EUR, it has been translated by NIMA rate by Tax affairs organization experts and based on that act to issue recognition slip. The bank has act in executing legal regulations in legal due date for objecting and following up the issue from tax dispute resolution board. 24-8- Based on operation recognition tax slip of fiscal 2019 fiscal year bearing No. 94079338 dated March 13th, 2021 sum of IRR 12,277 billion been claimed from the bank that despite of the CBI obligation to translation of monetary items with IRR 90,000 for USD and IRR 102,000 for EUR, it has been translated by NIMA rate by Tax affairs organization experts and based on that act to issue recognition slip. The bank has act in executing legal regulations in legal due date for objecting and following up the issue from tax dispute resolution board. 24-9- Sum of IRR 36,355 Billion reserve has been considered in the accounts for operating tax of 2020. 24-10 the surplus of paying tax proportionate to the definite slip is for relevant penalties.
75. 25- Reserves and Other Dues Facilities received from National Development Fund Profit of participation period NDF share Dues to the government Bank ’s dues for L/Cs and time drafts– foreign currency Bank’s debt for L/Cs and time drafts– Rials Administrative expenses reserve Withholding payable taxes Payable membership fee of deposits guarantee fund Leave redemption reserve Article 17 of removal production barriers Other reserves and dues Total reserves and other dues 25-1 25-1-1 25-2 25-3 Group 20.03.2021 20.03.2020 Million Rials Million Rials 1,292,742,796 695,252,333 201,710,333 91,489,251 919,206 904,283 94,406,697 31,874,166 24,053,444 8,500,647 2,581,811 1,130,019 2,626,448 340,773 1,861,262 1,648,000 7,239,580 4,382,127 7,281,445 9,090,988 50,914,224 6,530,504 1,686,337,247 851,143,091 Bank 20.03.2021 20.03. 2020 Million Rials Million Rials 1,292,742,796 695,252,333 201,710,333 91,489,251 919,206 904,283 94,406,697 31,874,166 24,053,444 8,500,647 2,367,301 1,130,019 704,100 340,773 1,861,262 1,648,000 7,239,580 4,382,127 7,281,445 9,090,988 6,149,138 6,116,430 1,639,435,303 850,729,017 25-1- Loans received from National Development Fund at date of balance sheet are as follows: Received Amount National Development Fund National Development Fund National Development Fund National Development Fund National Development Fund National Development Fund National Development Fund Currency – Final Due Date –Number of Installments USD – from 2013 so far – paying INR – from 2013 so far – paying EUR – from.2013 so far – paying JPY – from 2013 so far – paying CNY – from 2013 so far – paying KRW – from 20.03.2013 so far – paying AED Interest Rate % 6 6 6&8 6&8 6 6 6 FX Loans Balance Foreign Currency 677,531,756 10,799,111,111 4,909,621,922 1,560,600,000 8,065,610,978 190,416,726,920 46,176,686 loans balance Million Rials 107,727,549 23,695,087 932,828,165 2,275,868 197,325,147 26,893,064 1,997,916 1,292,742,796 25-1- received facilities from NDF are allocated based on conducted contracts as description note 12-3-1 and 13-5 and repayment facilities will be done in accordance with FX repayment (definite) tables and schedules announced by NDF. 25-2- In implementing Article 7 and clause 1 of Article 9 of the bylaw the amount and manner of receiving membership in Deposits Guarantee Fund subject of the approval No.H4837/T/100998 issued by the council of ministers on July 24, 2013, the amount of IRR 7,030 Billion has been paid and IRR 1,861 Billion has been considered as reserve in the accounts. Also, based on note 2 of Article 9 of the abovementioned bylaw, Deposits Guarantee Fund should determine the membership fee of credit institutes but it has not been noticed to the bank so far.
76. 25-3- Regarding tax clauses B and P of article 17 of competitive production obstacles removal law for 2016 of relevant tax area via claim slip bearing No . 44431733 dated March 6th, 2018, sum of IRR 11,996 billion has been claimed that the tax relevant to clause B for non-banking investments by virtue of definite tax slip No.69675816 dated Dec 29th, 2019, in sum of IRR 7,241 billion has been approved and paid the bank has objected to this issue due to the manner of calculation stocks income and by virtue of definite slip No. 72953231 dated Aug 15th, 2020 sum of IRR 5,333 billion has been set off as surplus paid tax with operation tax of 2018, and clause P tax (surplus properties) has been decreased from IRR 2,000 billion to IRR 48 billion according to the report of implementation order No. 11739 dated Aug 20, 2020. 25-3-1 For clauses B and P tax of article 17 of competitive production obstacles removal law for 2017, the relevant tax area via claim slip bearing No. 61136462 dated March 10th, 2019 sum of IRR 21,171 billion has been claimed that the bank has objected to this issue due to the manner of calculation and regarding to the received confirmation from the CBI by virtue of letter No. 0020/506 dated December 31st, 2019 that and clause B tax by virtue of definite slip No. 74991871dated December 14, 2020, has been decreased from IRR 9,000 billion to IRR 1,810 billion. Meanwhile, the tax of clause P is in the implementation part of initial board order and it is anticipated that it would be decreased from IRR 12,000 billion to IRR 1,000 billion. 25-3-2- For clause B and P tax of article 17 of competitive production obstacles removal law of 2018, the relevant tax area via claim slip bearing No. 69667953 dated December 28th, 2019 sum of IRR 71,229 billion has been claimed that the bank has acted in executing legal regulations in legal due date for objection and following up the issues from tax dispute resolution boards and by virtue of tax definite slip No. 76358982v dated March 13 2021 the amount of tax has been decreased to IRR 1,239 billion. 25-3-3 For clauses B and P tax of article 17 of competitive production obstacles removal law of 2019, by virtue of circular No. 200/99/6 dated April 8th, 2019 of the tax affairs organization and also reducing fixed assets ratio under %75 it is anticipated that sum of IRR 692 billion being claimed from bank due to the stocks profit.
77. 26- Severance payment and retirement liabilities reserve Description Balance at beginning of year Paid during the year Secured reserve during the year Balance at the end of the year severance payment Reserve Million Rials 18 ,436,394 (1,522,090) 21,949,039 38,863,343 20.03.2021 Staff retirement liabilities reserve Million Rials 19,465,674 ( 9,589,763) 31,345,680 41,221,592 Group Total Million Rials 37,902,068 ( 11,111,852) 53,294,719 80,084,935 severance payment Reserve Million Rials 13,375,939 ( 891,650) 5,952,105 18,436,394 20.03.2020 Staff retirement liabilities reserve Million Rials 12,620,190 ( 8,807,706) 15,653,190 19,465,674 Severance payment Reserve Million Rials 12,570,558 ( 837,157) 5,503,873 17,237,275 20.03.2020 Staff retirement liabilities reserve Million Rials 12,620,190 ( 8,807,706) 15,653,190 19,465,674 Total Million Rials 25,996,129 ( 9,699,356) 21,605,295 37,902,068 Bank Description Balance at beginning of year Paid during the year Secured reserve during the year Balance at the end of the year Severance payment reserve Million Rials 17,237,275 (1,854,277) 21,778,204 37,161,202 20.03.2021 Staff retirement liabilities reserve Million Rials 19,465,674 (9,589,763) 31,345,680 41,221,592 Total Million Rials 36,702,949 (11,444,039) 53,123,884 78,382,794 Total Million Rials 25,190,748 ( 9,644,862) 21,157,063 36,702,949 26-1- For actuary liabilities, totally sum of IRR 81,590 Billion including IRR 41,222 Billion reserve and IRR 40,368 Billion paid to the retirement fund of the banks has been posted in the accounts. 27- Investment depositors’ equity 20.03.2021 Time investment deposits Long-term investment deposits Ordinary short-term investment deposits Special short-term investment deposits Investment deposits received from banks & credit institutions Total time investment deposits Payable interest for time investment deposits Long-term investment deposits Short-term investment deposits Total payable interest of the time investment deposits Total investment depositors equity 27-1 27-1 27-1 27-1 27-2 27-2 Group Million Rials 1,263,250,395 1,147,919,871 25,221,214 41,571,449 2,477,962,929 35,116,261 8,784,110 43,900,371 2,521,863,300 20.03.2020 20.03.2021 Million Rials Million Rials 716,346,996 707,471,053 12,842,269 21,055,510 1,457,715,829 14,211,436 4,987,697 19,199,133 1,476,914,962 Bank 1,269,336,389 1,149,282,304 25,221,214 41,571,449 2,485,411,356 35,116,261 8,784,110 43,900,371 2,529,311,728 20.03.2020 Million Rials 723,302,903 708,071,844 12,842,269 31,777,297 1,475,994,314 14,211,435 4,987,697 19,199,132 1,495,193,446
78. 27-1- Due to paying interest to government staff savings deposits , these deposits have been reflected in note of time investment deposits. Also, the average of abovementioned deposits is considered in calculating the operation of investment deposits. 27-2- Long-term investment deposits in Rials include sum of IRR 20,057 Billion is for deposits of individuals for Umrah Hajj Pilgrimage. 27-3- Time investment deposits in Rial and foreign currency breakdown: Investment deposits received from banks Short-term investment deposits Three-month short term Three to six months-short term Six months to one year-short term Long-term investment deposits Certificate of Deposit One-year Two-year Four-year Five-year Total time investment deposits Bank Rials Million Rials 1,028,069 1,108,972,161 2,382,919 2,578,875 24 20.03.2021 Foreign Currency Million Rials 40,543,380 40,310,143 7,586,771 3,609,812 9,062,815 Total Million Rials 41,571,449 1,149,282,304 9,969,689 6,188,686 9,062,838 Rials Million Rials 5,320,478 683,199,593 0 0 40 20.03.2020 Foreign Currency Million Rials 26,456,819 24,872,251 4,667,465 2,384,277 5,790,487 Total Million Rials 31,777,297 708,071,844 4,667,465 2,384,277 5,790,527 479,750,581 321,784,216 275,928,572 0 8,876 2,192,434,292 0 191,864,144 0 0 0 292,977,064 479,750,581 513,648,361 275,928,572 0 8,876 2,485,411,356 226,268,515 388,874,461 0 520 7,551,551 1,311,215,159 0 100,607,856 0 0 0 164,779,155 226,268,515 489,482,317 0 520 7,551,551 1,475,994,314 27-1-1 Long-term investment deposits in Rial include sum of IRR 19,986 Billion is for deposits of individuals for Umrah Hajj Pilgrimage. 27-1-2- Time investment deposits based on maturity date and interest rate Overdue 2020 2021 2022 Total time investment deposits 20.03.2020 More than 22% Million Rials 0 0 0 0 0 19 to 22% Million Rials 0 30,152 260,000 29,693,819 29,983,971 5,025,580 77,226,209 16 to 19% Million Rials 0 752,026 540,639,268 244,304,753 785,696,047 372,337,176 20.03.2021 13 to 16% Million Rials 0 3,505 269,020,413 3,507,744 272,531,663 10 to 13% Million Rials 0 486 55,004,332 0 55,004,818 Less than 10% Million Rials 1,197,597,933 0 144,534,636 62,289 1,342,194,858 168,105,816 154 853,299,380 20.03.2020 Total Total Million Rials Million Rials 1,197,597,933 1,071,851,769 786,169 400,758,699 1,009,458,649 3,383,847 277,568,605 0 2,485,411,356 1,475,994,315 1,475,994,315
79. 27-1-3- Turnover of investment deposits in Rial Balance on 20 .03.2020 Million Rials Long-term investment Certificate of deposit One-year Two-year Four-year Five-year Short-term deposits Special short-term deposits 226,268,515 388,874,461 0 520 7,551,551 683,199,593 40 5,320,478 1,311,215,159 Investment deposits received from banks and credit institutions Balance of Rial investment deposits Bank Investment absorbed Repayment of the during year Deposits Million Rials Million Rials 1,436,162,372 492,274,945 400,301,096 0 0 31,126,843,515 12,961,598 255,106,122 33,723,649,648 (1,182,680,306) (559,365,190) (124,372,524) (520) (7,542,675) (30,701,070,947) (7,999,822) (259,398,530) (32,842,430,515) Balance on 20.03.2021 Million Rials 479,750,581 321,784,216 275,928,572 0 8,876 1,108,972,161 4,961,817 1,028,069 2,192,434,292 27-1-4- Turnover of FX investment deposits Balance on 20.03.2020 Long-term deposits USD EUR AED KRW TRY Short-term and Special Deposits USD EUR JPY AED Investment deposits received from banks and credit institutions USD EUR AED Total FX investment deposits Foreign Currency deposits absorbed during period Foreign Currency Repayment of the Deposits Balance on 20.03.2021 Foreign Currency Foreign Currency 20.03.2021 Balance on Balance on 20.03.2020 Foreign Currency Million Rials 20,123,191 78,128,339 2,353,888 1,295 1,143 223,591,011 765,964,109 93,473,590 17,297,024 79,141 15,723,049 202,927,298 57,761,934 145,318 38,455 (17,005,395) (166,487,191) (57,455,684) (10,505,602) (35,691) 222,308,665 802,404,216 93,779,840 6,936,740 81,905 Foreign Currency Million Rials 35,347,078 152,456,801 4,057,550 978 1,737 129,234,078 241,132,276 9,816,985 58,749,469 102,117,136 787,259,827 (140,800,984) (800,763,694) 62,286,563 (53,817,241) 90,550,230 227,628,409 9,816,985 67,218,791 14,397,487 43,249,398 14,316 2,908,340 11,631,067 24,595,492 8,469 1,479,452 19,000,000 94,484,197 600,000,000 9,000,000 90,696,709 508,916,667 (16,000,000) (95,696,709) (608,916,667) 12,000,000 89,484,197 500,000,000 1,908,000 17,001,997 21,633,382 292,977,064 1,710,000 9,637,388 15,109,431 164,779,155
80. 27-1-5- The combination of investment deposit depositors is as follows . 20.03.2021 Rial deposits Legal entities Real entities Investment deposits received from banks and credit institutions Total Rial deposits Deposits in foreign currency Legal entities Real entities Investment deposits received from banks and credit institutions Total FX deposits Total investment deposits Number Depositor 20.03.2020 Amount Million Rials Number Depositor Amount Million Rials 107,042 25,387,220 580 25,494,842 308,111,920 1,883,294,303 1,028,069 2,192,434,292 66,758 14,909,498 30 14,976,286 329,105,603 976,789,078 5,320,478 1,311,215,159 2,560 37,072 3 39,635 25,534,477 235,852,648 16,581,037 40,543,380 292,977,064 2,485,411,356 2,707 14,197 2 16,906 14,993,192 125,216,101 13,106,235 26,456,819 164,779,155 1,475,994,314 27-3- The interest payable to time investment deposits is as follows: Ordinary & special short-term deposits One-year deposits Two-year deposits Three-year deposits Four-year deposits Five-year deposits Certificate of Deposits Investment deposits received from banks and credit institutions Deposits in foreign currency Total interest payable to time investment deposits Balance on 20.03.2020 Million Rials 7,334,567 6,216,658 0 0 0 0 2,975,513 On-account interest during period Million Rials 44,844,922 56,726,749 14,970,492 0 3 1,022,840 59,646,604 Difference of definite & on-account interest Million Rials 8,327,770 11,182,654 4,318,703 2,672,395 19,199,132 15,906 7,303,552 184,531,068 3,045 285,733 8,086,373 32,204,278 Paid interest during period Million Rials (51,723,149) (61,860,062) (13,636,235) 0 (3) (1,022,840) (60,039,368) Balance on 20.03.2021 Million Rials 8,784,110 12,265,998 5,652,961 0 0 285,733 10,669,123 (12,862) (3,739,590) (192,034,107) 6,089 6,236,357 43,900,371 27-3-1 the main reason of difference between on-account profits during period, with paid profit during the period is for paying definite profit of 2019 during 2020.
81. 27-4 Payable profit of time investment deposits are as follows : Ordinary & special short-term deposits General certificate of deposit One-year deposits Two-year deposits Five-year deposits Investment deposits received from banks and credit institutions Total Instalment ratio of definite and on-account profit difference % 25.86 25.11 34.72 13.41 0.89 8 18 15.66 18 20 Difference of the allocated definite profit % 1.53 2.33 4.67 5 0 8 1.53 Average of on-account profit year during period % 100 Definite rate % 9.53 20.33 20.33 23 20.33 9.53 28- Capital The bank’s capital at the beginning of establishment was IRR 33,500 Million (including 33.5 Million shares with nominal value of IRR 1,000 for each share) that has been raised to IRR 207,042,862 in several phases (including 207,043 Million shares with nominal IRR 1,000 value for each share) by the fiscal year ending on March 20, 2021. Date of Capital Injection Sept. 01, 1993 Sept. 01, 2001 Aug. 10, 2005 Apr. 26, 2011 June 24, 2012 Sept. 23, 2012 Feb. 15, 2014 Oct. 19, 2016 Aug 27th, 2020 Capital injection percentage % 1,706 105 957 22 25 65 21 25 314 Amount of Capital injection Million Rials 571,500 634,000 11,861,000 2,900,000 4,000,000 13,100,000 6,900,000 10,000,000 157,042,862 Amount of New Capital Million Rials 605,000 1,239,000 13,100,000 16,000,000 20,000,000 33,100,000 40,000,000 50,000,000 207,042,862 The source of capital increase Revaluation of fixed assets Special participation bonds subject of Article 93 of TDP Revaluation of fixed assets and translation of FX assets and liabilities Cash injection of shareholders Retained earning Revaluation of fixed assets Retained earning Other reserves Revaluation of fixed assets
82. 28-1- Combination of shareholders on date of balance sheet is as follows : 20.03.2021 23,181,119,470 23,114,768,760 0 7,659,597,269 13,353,035,330 11,748,764,647 9,253,327,080 9,092,281,608 4,561,801,327 8,452,300,914 0 4,161,561,525 2,496,936,881 2,423,674,676 4,278,903,677 3,442,236,423 Share Rate % 11.20 11.16 0.00 3.70 6.45 5.67 4.47 4.39 2.20 4.08 0.00 2.01 1.21 1.17 2.07 1.66 One percent & Higher Provincial investment-Edalat-ESC Government of IR Iran (exemp from tax) Social Security Organization Saba Tamin Investment Co (Public J.S.) Tamin Atieh Fund of Bank Mellat staff Investment fund of first financial mediator Fanaaran petrochemical Co. (Public J.S.) Mellat Financial Group Company (Public J.S.) Moein Atieh Khahan Cooperative Co Mellat BFM market making. Investment fund Iran overall distribution company Mehr-e- Ayandegan Financial Development Group Company Shirin Asal Company National Iranian Investment Company (Public J.S.) Saham-e-Edalat Provincial Investment Co. of Tehran Province Saham-e-Edalat Provincial Investment Co. of Khorasan Razavi Province Saham-e-Edalat Provincial Investment Co. of Fars Province Saham-e-Edalat Provincial Investment Co. of Isfahan Province Saham-e-Edalat Provincial Investment Co. of Khuzestan Province Saham-e-Edalat Provincial Investment Co. of East Azarbayjan Province Saham-e-Edalat Provincial Investment Co. of Mazandaran Province Saham-e-Edalat Provincial Investment Co. of Kerman Province Saham-e-Edalat Provincial Investment Co. of Gilan Province Saham-e-Edalat Provincial Investment Co. of west Azarbayjan Province Saham-e-Edalat Provincial Investment Co. of sistan-oBalouchestan Province Other provincial investment companies of Saham-e- Edalat less than 1% Provincial investments-Saham-e-Edalat ESC (Released) Other shareholders (less than 1%) Total 2,593,956,288 2,274,221,331 2,526,080,803 0 20.03.2020 0 8,499,999,996 1,904,782,481 2,938,250,875 3,224,703,139 0 0 1,569,240,989 1,280,347,308 1,487,757,192 720,612,912 1,000,000,000 604,246,528 585,307,471 1,525,595,446 1,217,728,923 Share Rate % 0.00 17.00 3.81 5.88 6.45 0.00 0.00 3.14 2.56 2.98 1.44 2.00 1.21 1.17 3.05 2.44 1.25 1,032,597,703 2.07 1.10 1.22 0 941,458,365 921,606,612 777,907,910 1.88 1.84 1.56 0 0 725,746,772 1.45 0 0 707,520,623 1.42 0 0 654,789,078 1.31 0 0 567,032,348 1.13 0 0 547,327,808 1.09 0 72,428,293,991 207,042,862,000 0 34.98 100 5,380,688,142 11,184,751,379 50,000,000,000 10.76 22.37 100 Number of Shares Number of Shares Number of Shareholders Legal entities-individual Real entities- person Number 3,037 395,327 398,364 20.03.2021 Stake 86.14 13.86 100 Number 1,108 87,748 88,856 20.03.2020 Stake 88.01 11.99 100 29- Capital of Parent Company Owned by Subsidiary Company Mellat Financial Group Company Behsaz Mosharekathaye Mellat Company Behsazan Farda Company Total 20.03.2021 Number of Shares Cost Price Million Rials 8,154,695,839 21,356,317 3,334,649 15,966 78,995 79 8,158,109,483 21,372,362 20.03.2020 Number of Shares Cost Price Million Rials 1,750,496,643 2,614,132 38,154 30 13,620 14 1,750,548,417 2,614,176 30- Legal Reserve Balance at the beginning of year Transfer from allocable profit Adjustments of branches abroad Balance at the end of the year Group 20.03.2021 20.03.2020 Million Rials Million Rials 42,365,301 38,453,480 20,731,983 3,905,365 2,024 6,456 63,099,309 42,365,301 Bank 20.03.2021 20.03.2020 Million Rials Million Rials 39,327,976 35,606,325 20,408,128 3,715,195 2,024 6,456 59,738,129 39,327,976
83. 30-1- According to clause A of Article 33 of Monetary and Banking Law and Article 108 of Articles of Association of the bank , minimum 15% and maximum 20% net profit after deducting recognized loss in previous years are considered as legal reserve for each year. Considering the legal reserve shall be obligatory up to the bank’s capital and it will be optional after this amount. 31- Other Reserves Note Balance at beginning of year Transfer from allocable profit Balance at end of year 31-1 Group 20.03.2021 20.03.2020 Million Rials Million Rials 80,315,797 286,909 3,615 80,028,888 80,319,412 80,315,797 Bank 20.03.2021 20.03.2020 Million Rials Million Rials 80,087,850 98,891 3,615 79,988,959 80,091,465 80,087,850 31-1- the main amount of is related to reserve of FX assets and liabilities of 2018 that after approving by general assembly has been considered to other reserves. 32- Surplus of assets revaluation 20.03.2021 Date The amount of assets revaluation 2019 Total Million Rials 157,042,863 157,042,863 Assignment, amortizes, discarded /capital injection Million Rials (157,042,863) (157,042,863) Balance of assets revaluation 2019 Balance of assets revaluation Million Rials 0 0 Million Rials 157,042,863 157,042,863 33- Difference of foreign currency translation Group 20.03.2021 Difference of FX translation of foreign operations Translation operations in England Translation operations in Armenia Translation operations in Turkey Translation operations in South Korea Million Rials Minority share from difference of foreign currency translation FX translation difference Bank 20.03.2020 20.03.2021 Million Rials Million Rials 20.03.2020 Million Rials 15,218,073 9,313,818 4,055,654 13,118,106 41,705,652 8,501,829 4,913,410 2,887,239 8,228,037 24,530,515 0 0 4,055,654 13,118,106 17,173,761 0 0 2,887,239 8,228,037 11,115,276 (6,087,229) (3,400,732) 0 0 35,618,422 21,129,783 17,173,761 11,115,276 33-1- Branches abroad assets and liabilities and foreign subsidiaries companies have been translated based on the procedure stated in note 8-15-2. 34- Interest with no controlling right 20.03.2021 Capital Reserves Accumulated difference of foreign currency translation Retained earning and loss Share from net fair value of acquired subsidiary companies Group Million Rials 8,652,070 947,765 6,087,229 3,706,340 1,239,798 20,633,202 20.03.2020 Million Rials 2,488,313 355,332 3,400,732 1,094,390 0 7,338,767
84. 35- Granted facilities and depositing and debt securities income Group Income of granted loans Income of depositing & debt bonds Total income of granted loans & depositing 20.03.2021 Non-joint Million Rials 115,822,548 35-1 Joint Million Rials 245,267,720 35-2 67,934,123 3,552,472 313,201,843 119,375,019 Bank Total Million Rials Joint Million Rials 361,090,267 170,846,515 20.03.2020 Non-joint Total Million Million Rials Rials 29,369,768 200,216,283 Joint Million Rials 246,379,550 20.03.2021 Non-joint Million Rials 114,293,652 Total Million Rials 20.03.2020 Non-joint Million Rials 29,369,769 Joint Million Rials Total Million Rials 360,673,202 171,893,021 45,005,152 6,392,965 51,398,117 61,929,222 3,181,645 65,110,867 43,104,148 6,392,965 49,497,113 432,576,862 215,851,667 35,762,733 251,614,400 308,308,772 117,475,297 425,784,069 214,997,169 35,762,734 250,759,903 71,486,595 201,262,790 35-1- Income of granted loans 20.03.2021 Rials Joint Installment sale Reward contract Hire purchase Profit sharing equity partnership Forward Forfaiting Market-up loan Delay payment charges Delay payment charges of debtors for L/Cs Other Non-joint Million Rials 36,843,806 1,117,479 304,473 3,958,442 29,009,693 26,336,949 9,032,819 97,159,283 40,476,381 Million Million Rials Rials 163,699 37,007,505 315,295 1,432,774 0 304,473 0 3,958,442 0 29,009,693 0 26,336,949 0 9,032,819 1,083,212 98,242,495 0 40,476,381 0 0 1,028,393 8,749,203 245,267,720 10,311,410 Installment sale Reward contract Hire purchase Profit sharing equity partnership Forward Forfaiting Market-up loan Delay payment charges Delay payment charges of debtors for L/Cs Other Non-joint Million Rials 37,955,637 1,117,479 304,473 3,958,442 29,009,693 26,336,949 9,032,819 97,159,283 40,476,381 0 0 Total Million Million Rials Rials 163,699 38,119,336 315,295 1,432,774 0 304,473 0 3,958,442 0 29,009,693 0 26,336,949 0 9,032,819 1,083,212 98,242,495 0 40,476,381 0 1,028,393 8,749,203 246,379,550 10,311,410 Foreign Currency Total (Non-joint) Million Million Rials Rials 11,549,545 48,557,050 0 1,432,774 0 304,473 0 3,958,442 76,039,527 105,049,220 0 26,336,949 0 9,032,819 0 98,242,495 0 40,476,381 10,357,527 9,777,597 7,564,539 255,579,129 105,511,138 20.03.2021 Rials Joint Total Group 0 20.03.2020 Rials Joint Non-joint Million Rials 29,435,169 1,301,499 316,143 1,468,549 22,908,985 11,486,195 5,578,268 35,058,899 50,161,635 Million Rials 143,238 201,162 0 0 0 0 0 548,439 0 0 0 10,357,527 17,342,135 13,131,173 361,090,267 170,846,515 10,357,527 9,777,597 7,564,539 256,690,960 103,982,242 10,357,527 Million Million Rials Rials 29,578,407 133,693 1,502,661 0 316,143 0 1,468,549 0 22,908,985 24,554,725 11,486,195 0 5,578,268 0 35,607,338 0 50,161,635 0 Total Million Rials 29,712,100 1,502,661 316,143 1,468,549 47,463,710 11,486,195 5,578,268 35,607,338 50,161,635 2,555,137 2,555,137 0 13,131,173 892,839 171,739,354 1,233,374 28,476,929 14,364,547 200,216,283 20.03.2020 Rials Joint Non-joint Million Rials 28,579,537 1,301,499 316,143 1,468,549 22,908,985 11,486,195 5,578,268 36,961,039 50,161,635 Million Rials 143,238 201,162 0 0 0 0 0 548,439 0 0 0 17,342,135 13,131,172 360,673,202 171,893,021 Foreign Currency (Non-joint) 0 Bank Foreign Currency Total (Non-joint) Million Million Rials Rials 10,020,649 48,139,985 0 1,432,774 0 304,473 0 3,958,442 76,039,527 105,049,220 0 26,336,949 0 9,032,819 0 98,242,495 0 40,476,381 Total Total Foreign Currency (Non-joint) Million Million Rials Rials 28,722,775 133,693 1,502,661 0 316,143 0 1,468,549 0 22,908,985 24,554,725 11,486,195 0 5,578,268 0 37,509,478 0 50,161,635 2,555,137 Total Million Rials 28,856,468 1,502,661 316,143 1,468,549 47,463,710 11,486,195 5,578,268 37,509,478 52,716,772 0 1,233,374 1,233,374 0 13,131,172 892,840 172,785,861 0 28,476,929 13,131,172 201,262,790
85. 35-2- Income of depositing and security bonds Bonus of legal deposit (depositors & bank’s share) Profit of time deposits held with banks Profit of certificate of deposit, participation bonds and other debt bonds Joint Million Rials 0 Group 20.03.2021 Rials Non-joint Million Rials 3,040,274 Total Million Rials 3,040,274 Foreign Currency (Non-joint) Million Rials 0 Total Million Rials 3,040,274 Joint Million Rials 0 20.03.2020 Rials Non-joint Million Rials 2,174,841 Total Million Rials 2,174,841 Foreign Currency (Non-joint) Million Rials Total 0 Million Rials 2,174,841 37,921,751 314,228 38,235,979 141,371 38,377,350 39,651,073 0 39,651,073 39,192 30,012,372 56,599 30,068,971 0 30,068,971 5,354,079 0 5,354,079 4,178,932 39,690,265 9,533,011 67,934,123 3,411,101 71,345,224 141,371 71,486,595 45,005,152 2,174,841 47,179,993 4,218,124 51,398,117 Bank Bonus of legal deposit (depositors & bank’s share) Profit of time deposits held with banks Profit of certificate of deposit, participation bonds and other debt bonds Joint Million Rials 0 20.03.2021 Rials Non-joint Million Rials 3,040,274 Total Million Rials 3,040,274 Foreign Currency (Non-joint) Million Rials 0 Total Million Rials 3,040,274 Joint Million Rials 0 20.03.2020 Rials Non-joint Million Rials 2,174,841 Total Million Rials 2,174,841 Foreign Currency (Non-joint) Million Rials Total 0 Million Rials 2,174,841 36,163,632 0 36,163,632 141,371 36,305,002 38,581,160 0 38,581,160 39,192 38,620,352 25,765,591 0 25,765,591 0 25,765,591 4,522,988 0 4,522,988 4,178,932 8,701,920 61,929,,222 3,040,274 64,969,497 141,371 65,110,867 43,104,148 2,174,841 45,278,989 4,218,124 49,497,113 36- Goods sale and income of rendering services Selling foreign currency by Mellat Exchange office Goods Sale Rendering services income 20.03.2021 Million Rials 77,424,773 2,654,014 58,232,711 138,311,498 20.03.2020 Million Rials 46,632,626 4,872,966 36,240,643 87,746,235
86. 37- Cost price of sold goods and rendered services : Consumables articles Direct wage Production overhead Unabsorbed expenses in production Total production expenses Group 20.03.2021 20.03.2020 Million Rials Million Rials 244,034 2,705,341 292,823 (368,133) 3,610,331 (14,142) 0 3,596,189 73,873 17,393 3,652,669 47,213,014 75,710,584 126,576,266 Increase in producing goods inventory Wastage Cost price of production Purchasing manufactured goods Decrease in manufactured goods inventory Cost price of sold goods Cost price of rendered services Cost price of sold foreign currency 3,489,903 4,370,687 2,986,004 (15,474) 10,831,120 (1,234,916) 0 9,596,204 159,288 585,249 10,340,741 20,325,214 46,013,262 76,679,217 38- Net profit (loss) of investments: Realized profit (loss) of investments Profit of companies and investment funds Profit (loss) of selling shares of companies and investment funds Total realized profit (loss) of investments Profit (loss) increase (decrease) of investments value Net profit (loss) of investments 381 382 Profit of companies and investment funds Profit (loss) of selling shares of companies and investment funds Total realized profit (loss) of investments Total Million Rials 20.03.2020 joint (Rials) Foreign Currency (nonjoint) Million Million Rials Rials Total Million Rials 10,732,782 1,023,811 11,756,593 4,019,950 0 4,019,950 18,334,507 0 18,334,507 7,245,998 0 7,245,998 29,067,289 1,023,811 30,091,099 11,265,948 0 11,265,948 (400,000) 0 (400,000) 0 0 0 28,667,289 1,023,811 29,691,099 11,265,948 0 11,265,948 joint (Rials) Realized profit (loss) of investments Group 20.03.2021 joint (Rials) Foreign Currency (nonjoint) Million Million Rials Rials Million Rials 38-1 38-2 20.03.2021 Foreign Currency (non-joint) Million Rials Bank Total Million Rials joint (Rials) Million Rials 20.03.2020 Foreign Currency (non-joint) Million Rials Total Million Rials 15,817,967 4,803,894 1,023,811 0 16,841,778 4,803,894 3,341,364 0 0 0 3,341,364 20,621,861 1,023,811 21,645,671 3,341,364 0 3,341,364
87. 38-1- The profit of companies and investment funds shares is as follows : joint (Rials) National Iranian Copper Industry Mobarakeh Steel Company Developing mines and industries company Isfahan Oil Refinery Mobin Petrochemical Company Alborz insurance Co. Asia insurance Co. Retirement fund Owj-e-Mellat investment fund Saramad-e shar investment Co. Negin-e-Refah investment fund Paydar Sepehr investment fund Ganjineh Omid Investment fund Lutus investment fund Amin Ashena Investment fund FEE Bank Other Profit of long-term investments shares Million Rials 0 0 0 0 0 0 0 0 832,840 0 484,930 1,320,098 638,062 747,892 209,774 0 6,499,187 10,732,782 Group 20.03.2021 20.03.2020 Foreign Total joint (Rials) Foreign Total Currency Currency (non-joint) (non-joint) Million Million Rials Million Million Million Rials Rials Rials Rials 0 0 0 0 0 0 0 264,616 0 264,616 0 0 265,995 0 265,995 0 0 249,589 0 249,589 0 0 132,214 0 132,214 0 0 87,561 0 87,561 0 0 45,289 0 45,289 0 0 51,622 0 51,622 0 832,840 0 0 0 0 0 566,598 0 566,598 0 484,930 0 0 0 0 1,320,098 0 0 0 0 638,062 0 0 0 0 747,892 0 0 0 0 209,774 0 0 0 1,023,811 1,023,811 0 0 0 0 6,499,187 2,356,466 0 2,356,466 1,023,811 11,756,593 4,019,950 0 4,019,950 joint (Rials) Mellat Financial Group Behsaz Mosharekathaye Mellat Company Fannavaran Hooshmand Behsazan Farda Group Co Gostaresh-e Fardaye Iranian investment fund Tajrobeh Iranian Investment fund Saramad-e shar investment Co. Owj investment fund Paydar Sepehr investment fund Negin-e-Refah investment fund Ganjineh Omid Investment fund Lutus investment fund Amin Ashena Investment fund FEE Bank Other Shares profit of companies & investment funds Million Rials 8,399,997 1,059,746 1,528,469 0 0 0 832,840 1,320,098 484,930 638,062 747,892 209,774 0 596,160 15,817,967 20.03.2021 Foreign Currency (non-joint) Million Rials 0 0 0 0 0 0 0 0 0 0 0 0 1,023,811 0 1,023811 Bank Total Million Rials 8,399,997 1,059,746 1,528,469 0 0 0 832,840 1,320,098 484,930 638,062 747,892 209,774 1,023,811 596,160 16,841,778 joint (Rials) Million Rials 1,751,999 118,952 337,080 215,796 306,661 566,598 0 0 0 0 0 0 0 44,278 3,341,364 20.03.2020 Foreign Currency (non-joint) Million Rials Total 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Million Rials 1,751,999 118,952 337,080 215,796 306,661 566,598 0 0 0 0 0 0 0 44,278 3,341,364
88. 38-2- Profit (loss) from selling shares of companies and investment funds is as follows: March 20, 2021 Rial (joint) Profit because of selling shares of companies – Rials - Joint Mobarakeh steel company Isfahan Oil Refining Co Jahrom power plant development company Golgohar Ironstone Co Bandar Abbas Oil Refinery Co National Iranian Cooper Industries Chador Malou Foolad Steel Co. Tehran Oil Refinery National investment National development group investment Alborz insurance Pars Paper Omid investment Persian Gulf petrochemical Asia Insurance Negin-e-Refah investment fund Owj investment fund Ganjineh Omid Investment fund Amin Ashena Investment fund Paydar Sepehr investment fund Gostaresh-e Fardaye Iranian investment fund Lutus investment fund Mellat exclusive market making Other Companies Profit of companies and investment fund Million Rials 586,567 401,585 2,071,539 86,030 218,161 1,048,422 404,702 402,380 343,296 300,856 298,122 273,356 208,258 191,789 188,099 165,551 1,131,553 5,508 523,144 2,288 24,956 543,016 43,492 2,529,936 6,341,901 18,334,507 Foreign Currency (non-joint) Million Rials 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Group March 20, 2020 Million Rials Million Rials Foreign Currency (non-joint) Million Rials 586,567 401,585 2,071,539 86,030 218,161 1,048,422 404,702 402,380 343,296 300,856 298,122 273,356 208,258 191,789 188,099 165,551 1,131,553 5,508 523,144 2,288 24,956 543,016 43,492 2,529,936 6,341,901 18,334,507 393,036 278,514 0 238,371 214,727 288,615 155,535 206,935 22,979 0 19,061 112,835 86,344 13,689 96,290 118,688 0 0 0 0 0 0 0 0 5,000,379 7,245,998 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Total Rial (joint) Total 393,036 278,514 0 238,371 214,727 288,615 155,535 206,935 22,979 0 19,061 112,835 86,344 13,689 96,290 118,688 0 0 0 0 0 0 0 0 5,000,379 7,245,998 38-3- Profit (loss) from selling shares of companies and investment funds is as follows: March 20, 2021 Rial (joint) Profit because of selling shares of companies – Rials - Joint Negin-e-Refah investment fund Owj investment fund Ganjineh Omid Investment fund Amin Ashena Investment fund Million Rials Foreign Currency (non-joint) Million Rials Group March 20, 2020 Total Million Rials Foreign Currency (non-joint) Million Rials Total Rial (joint) Million Rials Paydar Sepehr investment fund 1,131,553 5,508 523,144 2,288 24,956 0 0 0 0 0 1,131,553 5,508 523,144 2,288 24,956 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Mellat exclusive market making Other Companies Profit of companies and investment fund 543,016 43,492 2,529,936 4,803,894 0 0 0 0 543,016 43,492 2,529,936 4,803,894 0 0 0 0 0 0 0 0 0 0 0 0 Gostaresh-e Fardaye Iranian investment fund Lutus investment fund
89. 39- Profit expense of deposits Profit expense of deposits 391 20 .03.2021 Million Rial Group 20.03.2020 Million Rial Bank 20.030.2021 20.03.2020 Million Rial Million Rial 216,016,368 153,624,369 216,735,346 154,963,273 216,016,368 153,624,369 216,735,346 154,963,273 39-1 the expense of the banks’ deposits is as follow: Description Note joint incomes Income of granted facilities Income of depositing and debt securities Net profit (loss) of investments Total joint incomes Bank’s share from joint incomes 39-1-1 Depositors’ share from joint incomes before deducting spread spread 40-1 Depositors’ share from joint incomes Bonus of legal deposit of investment deposits 40-2 Definite interest attributed to investment deposits 42 FX deposits profit Total expenses of profit investments Difference of profit payable to the depositors 42 20.03.2021 20.03.2020 Million Rials Million Rials Million Rials 246,379,550 61,929,222 20,621,861 328,930,633 (75,536,050) 253,394,583 (46,304,891) 207,089,692 2,342,102 209,431,793 7,303,552 216,735,346 32,204,278 171,893,021 43,104,148 3,341,364 218,338,533 (35,283,668) 183,054,866 (32,548,100) 150,506,765 1,823,385 152,330,150 2,633,122 154,963,273 9,217,133 39-1-1 Bank’s share from joint incomes is as follow: Fiscal Year Ratio of Bank Resources to total allocation of resources 22.96% 16.16% 20.03.2021 20.03.2020 Joint Incomes Million Rials 328,930,633 218,338,533 Bank’s share from joint Incomes Million Rials 75,536,050 35,283,668 39-1-2- Distributing joint resources and allocation of resources between depositors and bank Description Average of joint resources allocation (39-1-2-1) Average of balance of investment deposits (39-1-2-2) Deducted: legal deposit of investment deposits Free resources of investment deposits Bank’s share of joint resources allocation (surplus of free resources of investment deposits) 20.03.2021 Million Rials 2,003,607,310 1,741,723,863 (198,227,493) (1,543,496,370) 460,110,939 20.03.2020 Million Rials 1,294,057,293 1,228,669,627 (143,732,945) (1,084,936,682) 209,120,611 description 52-week average 52-week average 52-week average
90. 39-1-2-1- Average of joint resources allocation : Items of joint resources allocation Net resources allocation related to loans and dues Net resources allocation related to participation bonds held with banks Net resources allocation related to deposits with other bonds Total resources allocation related to joint operations 20.03.2021 20.03.2020 Amount (Average) Million Rials 1,578,928,820 229,787,007 194,891,483 2,003,607,310 Amount (Average) Million Rials 1,044,158,483 186,986,890 62,911,920 1,294,057,293 20.03.2021 20.03.2020 Amount (Average) Million Rials 586,675,777 2,340 184,871,298 436,146,792 0 0 69,355 16,881,917 4,022,148 1,228,669,627 39-1-2-2- Average of Investment Deposits Investment Deposits Ordinary short-term deposits Special short-term deposits Certificate of deposit One-year Two-year Three-year Four-year Five-year Investment deposits received from banks and other credit institutions Average of investment deposits Amount (Average) Million Rials 927,992,860 2,573,280 364,138,265 350,456,646 89,980,215 0 0 4,011,136 2,571,461 1,741,723,863 39-1-2-2-1 due to pay profit to the government staff’s deposits, this deposits are reflected in time investment deposits. Also the average of the aforementioned deposits considers in calculation of investment deposits operation. 40- Spread The Spread of the bank for fiscal year ending on March 20, 2020 has been calculated maximum 3% based on decree issued on Jan 20, 2020. Spread amount = Average of Free Resource of Depositors × Spread Rate
91. 40-1- Announced and applied Spread Announced Spread Applied Spread Rate - % Million Rials Rate - % Million Rials Ordinary short-term deposits 3 Special short-term deposits (Total) 3 24,684,255 3 24,684,255 One-year deposit 3 68,504 3 68,504 Two-year deposit 3 19,068,480 3 19,068,480 Three-year deposit 3 2,322,381 3 2,322,381 Four-year deposit 3 0 3 0 Five-year deposit 3 84,126 3 84,126 3 77,144 3 77,144 Investment deposits received from banks and other credit institutions 3 3 Total speard 46,304,891 46,304,891 40-2- Bonus of legal deposit of investment deposits is as follows: Description 20.03.2021 Million Rials (198,227,493) 2,342,102 Average of legal deposit of investment deposits Bonus of legal deposit (with rate of 1% of average resources) 20.03.2020 Million Rials (143,732,945) 1,823,385 41- On-account interest paid to investment deposits Short term deposits Short-term deposits Special short-term deposits Long-term deposits: One-year Two-year Three-year Four-year Five-year Certificate of deposit Received investment deposits from banks and credit institutions Total on-account paid profit to investment deposits 20.03.2021 Million Rials Bank 20.03.2020 Million Rials Group 20.03.2021 Million Rials 20.03.2020 Million Rials 44,550,707 294,215 35,218,310 (1,338,665) 44,550,707 294,215 35,218,310 239 55,963,679 14,970,492 0 3 1,022,840 59,646,604 15,906 72,244,192 0 0 11,988 4,069,884 31,568,404 0 56,726,749 14,970,492 0 3 1,022,840 59,646,604 15,906 72,244,192 0 0 11,988 4,069,884 31,568,404 0 176,464,445 141,774,113 177,227,516 143,113,017 42- The reconciliation statement of on-account profit paid to investment deposits (in Rial) together with investment deposits profit Definite profit attributed to investment deposits (IRR) On-account profit paid to the investment deposits Difference of profit payable to depositors 41 20.03.2021 Million Rials 209,431,793 (177,227,516) 32,204,278 20.03.2020 Million Rials 152,330,150 (143,113,017) 9,217,133
92. 43- Commission Income Million Rials 5 ,351,627 1,623,745 7,505,420 583,047 Bank 20.03.2020 Million Rials 3,066,768 1,064,727 4,363,922 173,491 Million Rials 5,351,627 1,623,745 7,505,420 583,047 20.03.2020 Million Rials 3,066,768 1,064,727 4,363,922 173,491 209,799 660,696 1,221,045 800,907 1,786,892 6,527,799 227,302 1,326,415 785,393 155,725 134,816 565,754 210,807 1,395,491 5,272,270 154,960 666,676 596,127 209,799 660,696 1,221,045 536,956 1,786,892 6,527,799 227,302 1,326,415 785,393 155,725 134,816 565,754 210,807 1,395,491 5,272,270 154,960 666,676 596,127 73,187 887,835 29,571,110 0 1,343,796 19,165,330 73,187 775,167 29,194,491 0 1,184,166 19,005,700 20.03.2021 Million Rials 5,351,671 Group 20.03.2020 Million Rials 3,066,804 20.03.2021 Million Rials 5,351,671 20.03.2020 Million Rials 3,066,804 (44) 5,351,627 (36) 3,066,768 (44) 5,351,627 (36) 3,066,768 20.03.2021 Million Rials 5,276,673 1,264,429 9,929,540 11,811 16,482,454 Group 20.03.2020 Million Rials 4,635,449 1,266,475 7,872,399 40,485 13,814,808 20.03.2021 Million Rials 5,276,673 1,264,429 9,929,540 8,599 16,479,242 20.03.2020 Million Rials 4,635,449 1,266,475 7,872,399 38,955 13,813,278 20.03.2021 Million Rials (26,066,121) 416,367,260 Group 20.03.2020 Million Rials (3,204,034) 111,017,132 20.03.2021 Million Rials (26,979,549) 416,378,547 20.03.2020 Million Rials (3,204,034) 109,963,722 390,301,139 107,813,098 389,398,998 106,759,688 20.03.2021 Net commission of interest-free operations Opened L/Cs Issued guarantees 43-1 Commission of current accounts (bounced cheques) Commission of received bills Bank TTs Commission of insurance services Reviewing credit files of clients Commission of credit card SHTAB Plan Removing bad effect commission Commission of plans expertise Commission of sending SMS to private banking customers FX services commission Other services Total commission income Group 20.03.2021 43-1- Net commission of interest-free operation is as follows: Commission received for non-interest bearing granted facilities Bonus of equipping of interest-free deposits expense Net commission of interest-free operation 44- Commission expense Commission of SHETAB plan Commission paid to debts collection companies POS Commission (SHAPARAK, share of POSs) others Total commission income 45- Net profit (loss) of FX transactions and exchanges Profit (loss) of foreign currency bid and ask 45-2 Profit (loss) of foreign currency translation 45-1 Net profit (loss) of FX transactions and exchanges 45-1- FX assets and liabilities are translated with rate of IRR 190,000 for each EUR (IRR 159,000 for each USD) and other foreign currencies are translated based on their EUR parity rate by the end of the year by virtue of letter No.00/37873 issued by the CBI on May 1st2021, and with regard to average of twelve-month of foreign currency rate in NIMA system and considering cautionary requirements in the banking network of the country, and the difference has been considered in the account of profit and loss due to translation. 45-2- IRR 18,484 billion from above amount is related to settlement or installment of some of the FX cases in line with implementing provisions of executive by law of article 20 of removing competitive production
93. barriers law , about settling dues with foreign currency rate on March 20.2020 ( IRR 90,000 fro per EUR). Therefore, increasing FX rate during year (IRR 110,000 for per USD) leads to recognition loss in FX transactions. 45-3- Part of FX monetary assets and liabilities have not been translated by virtue of note 8-15-1 of material accounting procedures. 46- Other operating incomes Group 20.03.2021 Million Rials 542,799 7,176,953 7,719,752 profit (loss) of branches abroad other Total other operating incomes 20.03.2020 Million Rials 720,415 4,282,368 5,002,783 Bank 20.03.2021 Million Rials 542,799 2,770,520 3,313,319 20.03.2020 Million Rials 720,415 2,579,833 3,300,248 47- Net other incomes and expenses Profit (loss) earned by disposing tangible and intangible fixed assets 47-1 Tax expense of removing obstacles of production law Profit from selling foreclosed stocks of National Iranian Copper Industry Profit (loss) from selling foreclosed pledges Penalty received from HM Treasury 47-2 Total other incomes and expenses 20.03.2021 Million Rials 9,597,325 Bank 20.03.2020 Million Rials 3,642,873 20.03.2021 Million Rials 8,126,258 20.03.2020 Million Rials 1,993,967 0 (11,000,000) 0 (11,000,000) 0 19,437,059 0 19,437,059 4,797,664 0 14,394,989 1,897,406 7,765,000 21,742,338 4,797,664 0 12,923,922 2,731,666 7,765,000 20,927,692 47-1- Profit earned by disclosing fixed tangible and intangible assets of the bank is as follows: 20.03.2021 March 20, 2020 Cost Price Book value Sale Amount Profit (Loss) Profit (loss) Million Rials Million Rials Million Rials Million Rials Million Rials Land 470,374 470,374 4,516,479 4,046,105 1,022,838 Building and instalments 3,214,192 3,076,588 6,774,718 3,698,130 517,690 Furniture 24,954 0 19,880 19,880 1,243 Computer equipment 82,034 1,639 5,787 4,148 7,251 Vehicles 32,826 83 32,826 32,743 49,021 Key money of rental building 0 0 33,009 33,009 72,827 Royalty (key money) 91,692 91,689 383,932 292,243 323,097 Total 3,916,072 3,640,373 11,766,631 8,126,258 1,993,967 47-2- From abovementioned amount sum of IRR 2,333 billion was related to the profit of disposing foreclosed properties. 48- Administrative and general expenses Note staff expenses Administrative expenses 48-1 48-2 Total administrative and general expenses 20.03.2021 Million Rials 86,112,773 60,160,869 146,273,642 Bank 20.03.2020 Million Rials 48,366,295 42,727,408 91,093,703 20.03.2021 Million Rials 83,130,745 58,469,297 141,600,042 20.03.2020 Million Rials 46,596,252 41,516,696 88,112,948 20.03.2021 Million Rials 48,921,773 3,739,958 Bank 20.03.2020 Million Rials 39,083,287 2,224,843 20.03.2021 Million Rials 46,552,814 3,489,381 20.03.2020 Million Rials 37,448,249 2,036,397 48-1- The staff expenses are as follows: Salary and wages Insurance portion of employer
94. Severance and retirement payment of the staff Travel and mission allowance 21 ,949,039 291,069 11,210,933 86,112,773 Other Total Staff expenses 5,631,589 304,220 1,122,356 48,366,295 48-2- Administrative expenses include the following items: Health and treatment Purchasing contractual services logistic expense of software and banking systems Publication & advertisement Repairing and maintaining tangible fixed assets expenses Training and researches Deposits guarantee fund expense Rent Actuary expenses 48-2-1 Communication and telecommunication Counting machines Energy and water Consumables requirements Other Total of administrative expenses 21,775,204 232,669 11,077,676 83,130,745 5,509,056 293,748 1,308,802 46,596,252 20.03.2021 Million Rials 3,312,888 6,248,336 3,582,893 2,947,157 1,356,659 Bank 20.03.2020 Million Rials 4,062,392 3,876,780 5,278,261 1,712,277 974,376 20.03.2021 Million Rials 3,311,281 5,975,078 3,504,316 2,355,976 1,299,147 20.03.2020 Million Rials 3,894,841 4,960,906 5,231,134 1,288,914 912,379 57,627 1,861,262 625,689 31,345,680 1,739,304 927,619 614,006 2,546,861 2,994,888 60,160,869 147,969 1,648,000 592,825 15,655,242 1,405,055 1,062,965 628,147 1,097,347 4,585,772 42,727,408 56,016 1,861,262 547,403 31,345,680 1,739,304 927,619 565,806 2,495,326 2,485,083 58,469,297 145,991 1,648,000 543,001 15,655,242 1,405,055 1,062,965 584,308 1,064,993 3,118,967 41,516,696 48-2-1- The above amount is related to reserves and payment made to the staff retirement fund that according to provisions of article 34 of the mentioned article of association, member banks are obligated to securing its resources deficit. 48-3- The reason why some bank and group staff expense are the same is due to the inconsistency of the financial statements heading of the subsidiaries companies with the bank. 49- Doubtful loans expense Doubtful loans special expense Doubtful loans general expense Bank 20.03.2021 Million Rials 172,783,771 35,991,987 208,775,758 49-1 49-2 20.03.2020 Million Rials 60,041,117 9,902,676 69,943,793 Group 20.03.2021 Million Rials 172,163,597 36,342,716 208,506,313 20.03.2020 Million Rials 60,041,117 9,890,861 69,931,978 49-1- Doubtful loans special expense for granted facilities and dues of the bank has been calculated as follows: Overdue Net non-current loans and dues before deducting doubtful loans reserve Million Rials Bank 20.03.2021 Defaulted Million Rials Doubtful loans up to 5 years Million Rials Doubtful loans more than 5 years Million Rials 20.03.2020 Total Total Million Rials Million Rials 0 Dues from banks and other credit institutions 10 13 16,229,214 Granted loans to private sectors 16 0 Other accounts receivable (6,687,852) Deducted: value of pledges by exerting deposit, properties, real estate , machineries and etc coefficient 0 29,681,528 0 (4,110,085) 0 231,430,623 0 (1,757,508) 1,385,378 270,073,925 3,232,766 (3,043,661) 1,385,378 547,415,289 3,232,766 (15,599,106) 1,385,378 344,913,585 0 (42,296,565) 9,541,362 10% 25,571,443 20% 229,673,114 50% 271,648,408 50%-100% 536,434,327 304,002,398 954,136 (799,946) 5,114,289 (2,328,509) 114,836,557 (55,521,801) 271,630,192 (161,721,321) 392,535,174 (220,371,577) 220,371,577 (160,330,460) 154,190 2,785,780 59,314,756 109,908,871 172,163,597 60,041,117 Balance of calculating special reserve Coefficient basis of calculating special reservePercent Special reserve of doubtful loans Deducted: balance of special reserve of doubtful loans at the end of the previous year Special expense of doubtful loans & dues of current period
95. 49-2- General expense of doubtful loans of granted facilities and dues has been calculated as follows : Note Dues to other banks and credit institutions 20.03.2020 Million Rials 1,385,378 11 20.03.2021 Million Rials 56,628,019 137,547,585 12 2,931,809,620 1,625,187,629 13 10 Dues from government Granted facilities to public sectors Granted facilities to private sectors Clients’ debt for deferred L/Cs after deducting advance-received Dues from subsidiaries and affiliated companies Other accounts receivable 2,778,287,135 1,569,241,727 20-1 15 25,343,307 67,648,570 8,827,522 28,633,715 16 71,490,020 44,955,262 (552,033,433) 5,516,720,823 1.5% 82,750,812 (46,408,096) (346,298,963) 3,093,873,060 %1.5 46,408,096 (36,517,235) 36,342,716 9,890,861 Deducted Balance of granted loans for which special reserve is considered Balance basis for calculating general reserve Basis coefficient for calculating general reserve – percent General reserve of granted loans and dues Deducted: General reserve balance of granted loans & dues at the end of previous year General reserve of doubtful loans of granted loans & dues 50- Financial expenses Profit of received loans from other banks & credit institutions Profit and delay payment charges of loans received from the CBI Group 50-1 161,940,790 Bank 20.03.2021 Million Rials 433,555 20.03.2020 Million Rials 242,950 20.03.2021 Million Rials 819,693 20.03.2020 Million Rials 578,946 18,875,658 5,109,128 18,621,492 5,109,128 19,309,213 5,352,078 19,441,184 5,688,075 50-1 IRR 15,926 billion of above amount relevant to received funds from CBI (note 21-2) is for granting loans to public and private sectors. Increasing this amount proportionate to previous fiscal year is due to increase in foreign currency rate. 51- Depreciation expense Depreciation of tangible fixed assets Depreciation of intangible assets Total depreciation expense Group 20.03.2021 Million Rials 2,282,558 609,118 2,891,676 20.03.2020 Million Rials 2,318,260 601,348 2,919,608 Bank 20.03.2021 Million Rials 1,972,656 560,657 2,533,313 20.03.2020 Million Rials 2,141,329 601,348 2,742,677 52- Annual adjustment Accumulated effects of changes in accounting manner Consolidation adjustments Group 20.03.2021 Million Rials 2,282,558 20.03.2020 Million Rials 2,318,260 Bank 20.03.2021 Million Rials 1,972,656 20.03.2020 Million Rials 2,141,329 609,118 2,891,676 601,348 2,919,608 560,657 2,533,313 601,348 2,742,677 52-1- Accumulated effects of changes in accounting manner are as follows: Changes in translation manner of FX non- 52-1 current items Changes in doubtful loans reserves Other Group 20.03.2021 Million Rials 0 20.03.2020 Million Rials 85,334,876 0 (1,636,305) (1,636,305) (84,394,691) 0 940,185 Bank 20.03.2021 Million Rials 0 20.03.2020 Million Rials 85,334,876 0 0 0 (84,394,691) 0 940,185
96. 52- In order to provide proper copy of financial position and operation results , all of the relevant comparative figures in comparative financial statements have been amended and provided and for this reason comparative items does not match by provided financial statement in previous fiscal year. 53- In order to provide financial statements properly, comparative items relevant to classification adjustments made to the Bank's financial statements are re-presented as follows: Description Note Granted facilities & dues from private sectors Dues from banks and other credit institutions Tax reserve 13 Reserves and other liabilities 25 10 24 20.03.2020 Balance before amendment debit (credit) Million Rials Bank Classified Amendments debit Credit Million Rials Million Rials 1,333,596,106 1,705,500 Annual Adjustments debit Credit Million Million Rials Rials 20.03.2020 Amended balancedebit (credit) Million Rials 0 0 1,331,890,606 488,781,590 1,705,500 0 0 490,487,090 23,499,104 845,396,593 5,332,424 0 0 18,166,680 5,332,424 0 0 850,729,017 7,037,924 0 0 7,037,924
97. 54- Net profit reconciliation statement The net profit reconciliation statement with net cash inflow of operating activities are as follows : Net profit Depreciation expense Doubtful loans expenses Net increase of severance payment & staff retirement liabilities allowances Net increase (decrease) of payable income tax Loss (Profit) of selling intangible and tangible fixed assets Net (profit) of translation cash foreign currency Adjusted net profit Net increase (decrease) of operating liabilities Dues to banks and other credit institutions Deposits of clients Operating portion of reserves and other dues Investment depositor’s equity Net (increase) decrease of operating assets Dues from banks & other credit institutions Dues from government Granted facilities and dues from public sectors Granted facilities and dues from private sectors Investment & partnerships Dues from subsidiaries & affiliated companies Other accounts receivable Legal deposit Operating portion of other assets Net cash inflow (outflow) of cash earned by operating activities 20.03.2021 Million Rials 163,118,009 2,891,676 208,775,758 42,182,867 Group 20.03.2020 Million Rials 45,128,309 2,919,608 69,943,794 11,905,939 20.03.2021 Million Rials 136,610,484 2,533,313 208,506,313 41,679,845 20.03.2020 Million Rials 25,110,353 2,742,677 69,931,977 11,512,202 122,805,763 (9,597,325) (144,220,057) 385,956,691 18,594,080 (3,642,873) (11,831,737) 133,017,120 121,801,449 (8,126,258) (144,220,057) 358,785,089 18,314,178 (1,993,967) (11,767,667) 113,849,753 363,256,719 604,369,461 835,194,156 1,044,948,339 2,847,768,675 92,222,450 314,019,471 174,680,160 226,010,822 806,932,903 349,578,688 659,789,344 788,706,286 1,034,118,281 2,832,192,599 83,396,284 305,825,961 177,108,638 234,620,427 800,951,310 (293,573,671) 24,027,306 (1,287,022,660) (1,031,232,909) (310,860,957) 1,412,015 (51,910,388) (126,766,261) (217,040,883) (3,292,968,408) (59,243,042) (25,958,434) (36,403,303) (364,265,800) (379,479,483) (38,870,082) 960,107 (16,677,922) (50,560,307) 36,421,424 (874,833,800) 65,116,223 (268,489,529) 24,027,306 (1,287,022,660) (1,025,016,422) (271,847,768) (38,429,632) (22,952,462) (126,766,261) (231,276,510) (3,247,773,938) (56,796,250) (25,061,875) (36,402,303) (364,265,800) (376,629,469) (28,852,196) 16,219,650 (19,278,736) (50,560,307) 27,858,020 (856,974,016) 57,827,047 55- Non-cash transaction Main non-cash transaction during the year are as follows: Group 20.03.2021 Million Rials Foreclosing assets against granted facilities 55-1 Fannavaran Hooshmand Behsaz Farda Group for transferring Vozara Building to the bank Exchanging subsidiary companies (note 15-1-1) Settling dues from government (note 11-2) Setteling FX facilities subject to article 20 of production obstacles removal (note 10-2-2-4) Total Non-cash transactions 11,978,542 20.03.2020 Million Rials 4,517,968 Bank 20.03.2021 Million Rials 11,978,542 20.03.2020 Million Rials 4,517,968 0 637,365 0 637,365 0 58,898,244 0 0 8,908,333 58,898,244 0 0 55,242,640 0 55,242,640 0 126,119,426 5,155,333 135,027,759 5,155,333
98. 55-1- The following assets have been foreclosed by the bank in reported fiscal year . Type of possessive asset Residential property Commercial/administrative property Stocks Factory & Equipment Vehicles Land Client relation type Irrelevant client Irrelevant client Irrelevant client Irrelevant client Irrelevant client Irrelevant client Debt Amount on Date of foreclosure Expertise Value of foreclosed Asset Paid by the client/ forgiveness by the bank Million Rials Million Rials Million Rials 1,512,431 683,681 (669,788) (302,772) 0 0 10,522,939 (10,522,939) 0 347,571 (153,924) 0 228,189 (101,055) 0 514,985 (228,064) 0 13,809,796 (11,978,542) 0 Paid for expertise value surplus of foreclosed properties Million Rials Debt Amount after foreclosure 0 0 0 0 0 0 0 Million Rials 842,643 380,909 0 193,647 127,134 286,921 1,831,254
99. 56- Off-balance sheet items 56-1- Bank ’s liabilities for L/Cs in foreign currency and in Rial are as follows. Bank’s liabilities for L/Cs in foreign currency Liabilities of bank for domestic issued L/Cs Total Bank 20.03.2021 20.03.2020 Million Rials Million Rials 405,008,729 296,167,246 149,746,494 52,209,728 554,755,223 348,376,974 56-1-1 56-1-2 56-1-1- The statement of bank’s liabilities for L/Cs in foreign currency are as follows: Type of Foreign Currency Sight USD EUR TRY KRW JPY AED Other foreign exchanges Total . Balance at the beginning of the year issuance (or increase of liability) during year Amount in foreign currency Number 6,026,416 1,568,951,407 632,818 153,975,782 19,840,625 349,107 IRR Equivalent Million Rials 542,377 160,033,044 9,138 11,529 17,116 8,791 135,545,251 296,167,246 0 2,964 26 0 2 724 0 Foreign currency Amount 0 392,921,434 157,608 0 0 0 0 IRR Equivalent Million Rial 92,076 74,655,072 2,276 0 0 0 112,241,188 186,990,612 Credit (cancelled) during the year Number Amount in foreign currency 0 (2,189,489) 320 (776,002,368) 6 0 0 (153,975,782) 0 0 1 (2,730) 91 0 IRR Equivalent Million Rial Impact of Rate Changes during period IRR Equivalent Million Rial (289,130) 264,748 (81,710,825) 72,338,099 0 5,340 (11,529) 0 0 11,819 (69) 6,264 (151,246,696) 82,482,850 (233,258,249) 155,109,120 20.03.2021 Amount in foreign currency IRR Equivalent Million Rial 3,836,927 1,185,870,473 790,426 0 19,840,625 346,377 0 610,070 225,315,389 16,753 0 28,936 14,987 179,022,593 405,008,729
100. 56-1-2- Bank ’s liabilities for local L/Cs in Rial are as follows: Type of Credit Sight Diferred Total Balance at beginning of the year Number Million Rials --- 30,853,762 21,355,966 52,209,728 Issued during the year Number Million Rials - 81,520,278 59,045,343 140,565,622 Credit (cancelled) during the year Number Million Rials - (23,880,136) (19,148,719) (43,028,855) 56-2- Bank’s liabilities for issued LGs in foreign currency 56-2-1- Bank’s liabilities for issued LGs in foreign currency and in Rial are as follows: LGs in foreign currency 56-2-2 LGs and subscriptions issued in Rials Total bank’s liabilities for the issued FX and Rial LGs 56-2-2 Bank 20.03.2021 20.03.2020 155,775,109 106,976,937 303,274,445 189,102,365 459,049,554 296,079,302 56-2-2- Bank’s liabilities for LGs in foreign currencies are as follows: EUR AED USD SEK TRY JPY Other foreign currencies Total liabilities for issued guarantees in foreign currency Bank 20.03.2021 20.03.2020 Amount in foreign Amount in foreign Rial equivalent Rial equivalent currency currency Million Rials Million Rials 690,347,622 131,166,048 860,215,268 87,741,957 52,138,653 2,255,871 126,631,340 3,188,879 106,457,937 16,926,812 139,424,438 12,548,199 0 0 7,849,575 73,593 4,391,293 93,078 541,292 7,816 0 0 560,439,850 483,480 0 5,333,300 0 2,933,013 155,775,109 106,976,937 Balance at the end of the year Number Million Rials - 88,493,904 61,252,590 149,746,494
101. 56-3- Other bank ’s liabilities are as follows: Liabilities for FX concluded contracts Liabilities for concluded contracts of transactions – private sector Liabilities for credit cards Liabilities for amounts received out of NDF/ foreign currency Total bank’s other liabilities Bank 20.03.2021 20.03.2020 Million Rials Million Rials 91,411,217 87,158,967 477,420,090 188,968,178 2,283,057 873,385 157,066,317 94,496,544 728,180,680 371,497,074 56-4- Managed funds and the like are as follows: Granted facilities out of managed funds Unused managed funds Managed funds of unused foreign currency Total unused funds and the like 56-4-1 Bank 20.03.2021 20.03.2020 Million Rials Million Rials 358,947 2,081,984 1,468,450 41,141 476,285,956 327,586,050 478,113,352 329,709,175 56-4-1- The Managed funds in foreign currency is EUR 2,507 Million including loans granted from foreign currency reserve account for governmental preferred plans that has been reflected in the off-balance sheet items of the balance sheet that based on the letter No.118619 issued by the CBI on August 02, 2015. According to Article 11 of Executive code of conduct of Article 17 of permanent orders of the country development plan, following up for collecting installments of the loans granted from foreign currency reserve account and crediting to the relevant accounts shall be merely done by the intermediary banks, and according to clause H of Clause 16 of budget act in 2019, the government is allowed to extend the dues of the CBI and commercial banks for the principal and interest of the facilities paid to the state-owned companies affiliated to Ministry of Petroleum for financing oil and gas up-stream projects up to March 20, 2022. 56-4-2 based on clause H note 16 of the budget law for 2019, the government is allowed to extend the dues of the CBI and commercial banks for the principal and interest of the facilities paid to the state-owned companies affiliated to Ministry of Petroleum for financing oil and gas up-stream projects up to March 20, 2022.
102. 56-5- Liabilities for L /Cs and LGs in type of pledge breakdown Bank 20.03.2021 20.03.2020 Million Rials Million Rials 151,123,636 145,934,744 40,236,180 21,837,973 7,643 5,622 146,205,568 121,837,973 35,793,708 11,365,126 369,618,017 187,143,122 171,971,362 115,693,830 914,956,114 603,818,390 98,848,663 40,637,887 1,013,804,777 644,456,277 Bank deposits Participatory bonds and other debt securities Banking LGs Transacted L/Cs Land and building Check and promissory note Other Total liabilities with pledge Liabilities without pledge Total liabilities for IRR LCs and LGs 57- EPS 57-1- Basic EPS The basic EPS is calculated by dividing the profit of ordinary shareholders to weighted mean of each ordinary share hold by the shareholders. The weighted average of number of ordinary shares (basic) are 207 billion shares. Bank Profit before tax deduction Tax impact Profit after tax deduction EPS – Rials 20.03.2021 Million Rials 276,965,030 (140,354,546) 136,610,484 660 20.03.2020 Million Rials 68,842,369 (43,732,016) 25,110,353 121 Group Profit before tax deduction Tax impact Benefits with no controlling right Profit (loss) after tax deduction EPS – Rials 20.03.2021 Million Rials 306,241,073 (143,123,064) (4,658,617) 158,459,392 784 20.03.2020 Million Rials 90,922,555 (45,794,246) ( 1,188,060) 43,940,249 214 Group Weighted average of number of ordinary shares Shares of parent companies owned by subsidiary companies Weighted average of number of ordinary shares 28 29 Bank 20.03.2021 Million Shares 207,043 (4,954) 202,089 20.03.2020 Million Shares 207,043 ( 1,660) 205,383 20.03.2021 Million Shares 207,043 0 207,043 20.03.2020 Million Shares 207,043 0 207,043 Capital injection of the bank out of Assets revaluations on Aug 25, 2020, registered in companies’ registration office. Due to lack of changes in resources, calculation weighted average of the beginning of the period for ordinary shares has been done from the beginning of the previous fiscal year; so comparative items of 2019 have been represented. 58- Bad debts 58-1- Bad debts based on type of dues are as follows: Description Bad debts at the beginning of the year Bad debts during the year Bad debts and collected during the period Bad debts at the end of the year Due to the facilities Million Rials 273,698 0 0 273,698 Other Dues Million Rials Total 0 0 0 0 Million Rials 273,698 0 0 273,698
103. 58-2- Bad debts based on type of the facilities are as follows : Governmental Non-governmental Total Total Total mandatory Non- mandatory Million Rials Million Rials Million Rials Million Rials Million Rials Million Rials 0 0 0 273,698 273,698 273,698 0 0 0 0 0 0 0 0 0 0 0 0 mandatory Non- mandatory Description Million Rials 0 0 0 Bad debts at the beginning of the year Bad debts during the year Bad debts & Collected during the year Bad debts at the end of the year 0 0 0 0 273,698 273,698 273,698 58-3- Bad debts based on facilities receivers are as follows: Description Bad debts at the beginning of the year Bad debts during the year Bad debts & collected during the period Bad debts at the end of the year Relevant persons with the bank Million Rials 0 0 0 0 Irrelevant persons to the bank Million Rials 273,698 0 0 273,698 Total Million Rials 273,698 0 0 273,698 58-4- Bad debts due to loans based on type of contract are as follows: Description Bad debts at the beginning of the year Bad debts during the year Transactional contract Million Rials Bad debts and collected during the period Bad debts at the end of the year 0 0 0 0 Participatory contract Million Rials 273,698 0 0 273,698 Total Million Rials 273,698 0 0 273,698 58-5- Bad debts due to loans based on the type of liabilities are as follows: Description Bad debts at the beginning of the year Bad debts during the year Bad debts and collected during the period Bad debts at the end of the year principal interest Million Rials Million Rials 273,698 0 0 273,698 0 0 0 Delay payment charges Million Rials 0 judicial expenses 0 0 0 Million Rials 0 Total 0 0 0 0 58-6- Considered reserve in to the accounts for the bad debts during the year are as follows: Description Bad debts reserve during the period Bad debts reserve during the period Total 20.03.2021 Million Rials 273,698 0 273,698 20.03.2020 Million Rials 273,698 0 273,698 59- Capital liabilities and probable debts 59-1- The probable liabilities and debts of the bank during the reported period are as follows: Description Guarantying the principal and interest of deposit Guarantying the principal and interest of deposit Guarantying the principal and interest of deposit Related to company Owj Mellat Investment Fund Andoukhteh Mellat Investment Fund Atieh Mellat Investment Fund 22.09.2020 Million Rials 75,922,421 5,190,367 3,229,243 Million Rials 273,698 0 0 273,698
104. 59-2- Probable debts of subsidiary companies on date of balance sheet are as follows : Description Liabilities related to partnership bonds market making Our guaranteed document held with others Banking LG provided to Stock exchange market & mercantile exchange Other Our guaranteed documents held with others- Rahbari-e- Sanaye Behsaz Co. Our guaranteed documents held with others - construction Co. Our guaranteed documents held with others-Behris Isfahan Co. Our guaranteed documents held with others-Mellat leasing Co. Advance payment LG- Irdak Construction Co. Guarantee held with Isfahan Tax affairs department Total Related to company Mellat Financial Group Mellat Financial Group Mellat Financial Group Mellat Financial Group Behsaz Mosharekathaye Mellat Behsaz Mosharekathaye Mellat Behsaz Mosharekathaye Mellat Behsaz Mosharekathaye Mellat Behsaz Mosharekathaye Mellat Behsaz Mosharekathaye Mellat 20.03.2021 Million Rials 119,800,000 5,684,846 22,864 335,815 1,936,374 139,502 26,522 9,316,852 978 1,459 137,265,212 60- Events after date of balance sheet 60-1-No remarkable event that is necessary to be revealed in the financial statements has not been taken place after date of balance sheet.
105. 61-operational sections 61-2- Information about reportable operational sections The information related to each reportable sections has been presented in the table below . The profit before tax of the sections has been used as criterion of sections function. Note Acquired fund from out of the bank Incomes of granted facilities and depositing Deposits profit expense Net income of facilities and depositing Commission income Commission expense Net commission income Net profit (loss) of investments Net profit (loss) of FX transactions and exchanges Net other operating incomes Net acquired incomes from out of the bank Net incomes among bank sections Total Incomes of operational section of the bank Doubtful loans expenses of operational section Other direct expenses attributable to operating section Interest (loss) each section before non-attributable general expenses General expenses non- attributable to sections Profit before tax 35 39 43 44 38 45 47 61-2-1 Proxy Banking Million Rials 308,308,772 (209,431,793) 98,876,979 4,709,050 (1,264,429) 3,444,620 21,645,671 0 12,923,922 34,569,594 136,891,193 2,770,520 139,661,714 (39,616,200) (56,640,017) 43,405,497 Interest-Free Banking Million Rials 0 0 0 5,351,627 (44) 5,351,583 0 0 0 0 5,351,583 0 5,351,583 0 (14,160,004) (8,8080,422) International Banking Million Rials 117,475,297 (7,303,552) 110,171,744 9,202,352 0 9,202,352 0 389,398,998 0 389,398,998 508,773,094 542,799 509,315,893 (168,890,114) (21,240,006) 319,185,772 Electronic Banking Million Rials 0 0 0 6,527,799 (15,206,213) (8,678,414) 0 0 0 0 (8,678,414) 0 (8,678,414) 0 (35,400,011) (44,078,425) Other Activities Million Rials 0 0 0 3,403,663 (8,555) 3,395,108 0 0 0 0 3,395,108 0 3,395,108 0 (14,160,004) (10,764,896) Total Million Rials 425,784,069 (216,735,346) 209,048,723 29,194,491 (16,479,242) 12,715,249 21,645,671 389,398,998 12,923,922 423,968,591 645,732,564 3,313,319 649,045,883 (208,506,314) (141,600,042) 298,939,527 (21,974,497) 276,965,030
106. 61-2-1- instalment of direct expenses to any operational section is 40 % for proxy banking, 10% interestfree banking, 15% international banking, 25% electronic banking, and 10% for other activities. 61-3- Geographical concentration of main items of assets and liabilities and incomes In providing geographical information, the main items of assets are reported based on location, incomes and liabilities based on living place of the counterparty of the bank in geographical areas. Assets Cash Dues from banks and other credit institutions Dues from government Granted facilities and dues from public sectors Granted facilities and dues from private sectors Investment in shares and other securities Dues from subsidiaries and affiliated companies Other accounts receivable Tangible fixed assets Intangible assets Legal reserve Other assets Total assets liabilities Dues to banks and other credit institutions Deposits of clients Investment depositors interest Payable dividend Operating tax reserve Reserves and other liabilities Severance payment and staff retirement liabilities reserve Total liabilities Total operating incomes Net other incomes and expenses Assets Cash Dues from banks and other credit institutions Dues from the government Granted facilities and dues from public sectors Granted facilities and dues from private sectors Investment in shares and other securities Dues from subsidiaries and affiliated companies Other accounts receivable Tangible fixed assets Intangible assets Legal reserve Other assets Total assets liabilities Dues to banks and other credit institutions Deposits of clients Investment depositors interest Payable dividend Operating tax reserve Reserves and other liabilities Severance payment and staff retirement liabilities reserve Total liabilities Total operating incomes Net other incomes and expenses Iran Million Rials 261,795,752 274,169,200 135,484,372 2,887,832,475 2,338,043,790 344,060,445 66,633,841 66,913,229 191,648,571 17,676,310 377,208,518 South Korea Million Rials 3,17,699 484,807,419 0 0 4,944 0 0 54,630 1,300,623 0 0 20.03.2021 Turkey Million Rials Total Million Rials 19,732,435 0 0 0 2,994,816 7,096 0 265,536 230,286 0 2,917,979 284,705,887 758,976,619 135,484,372 2,887,832,475 2,341,043,550 344,067,541 66,633,841 67,233,395 193,179,479 17,676,310 380,126,497 85,014,858 (3,987,394) (13,055,936) 67,971,529 7,046,481,361 485,357,920 13,092,212 7,544,931,494 824,458,328 1,368,747,122 2,529,309,012 163,627 139,968,129 1,639,196,024 78,382,794 432,049 474,696,836 978 0 0 0 0 687,129 2,672,579 1,737 0 0 239,279 0 825,577,506 1,846,116,537 2,529,311,728 163,627 139,968,129 1,639,435,303 78,382,794 6,580,225,036 213,847,555 12,923,922 475,129,862 (294,347) 0 3,600,724 837,145 0 7,058,955,623 214,390,354 12,923,922 Iran Million Rials South Korea Million Rials 20.03.2020 restated Turkey Million Rials Total Million Rials 192,776,070 230,515,560 159,511,678 1,600,809,815 1,332,528,013 72,213,799 28,204,209 44,183,637 188,565,285 16,872,707 252,209,417 30,212,703 1,666,806 258,266,029 397 68,388 321,139 - 12,366,828 1,067,696 5,974 28,909 73,467 1,150,819 16 206,809,704 490,487,089 159,511,678 1,600,809,815 1,333,596,106 72,219,773 28,204,209 44,280,934 188,959,891 16,872,707 253,360,236 30,212,719 4,148,602,893 260,322,759 14,693,709 4,423,619,361 475,071,394 930,539,942 1,495,191,009 36,514 23,499,104 841,704,287 36,702,949 228,443 252,760,847 1,295 0 0 1,766,340 - 698,980 3,026,403 1,143 0 0 1,925,966 - 475,998,817 1,186,327,192 1,495,193,447 36,514 23,499,104 845,396,593 36,702,949 3,802,745,199 214,047,961 20,927,692 254,756,925 92,191 0 5,652,492 250,201 0 4,063,154,616 214,390,353 20,927,692
107. • • • • 62- Description of the bank risks In the risk notes section, the most important existing risks in banking industry, the status of bank in structure and risk management methods as well as fulfilled analysis about the impact of each risk on the items of financial statements of the bank is revealed. The structure of this part of the bank’s reporting has been arranged with regard to instructions of risk management, issued by the BAL Committee (BAL 2) and international financial reporting standards (IFRS). Disclosing the risks of activity method and banking operation and the manner of managing these risks by the bank, enable the users that while understanding the way of reflecting the risk criteria of the bank activities, become aware from the impact of risk on the items of the balance sheet and profit and loss statement as well. Bank exposes to the following risks: Credit risk; Liquidity risk; Market risk; Operational risk. The amount of sensitivity of the financial risks on different parts of the bank’s business is as following charter: 61-1- The charter of relation between different business parts and the main risks that each unit is facing. Bank Melat (PJSC) Retail Banking Corporate Banking Commercial Banking Credit Risk Low Credit Risk Medium Credit Risk Low Market Risk Low Market Risk Medium Market Risk Medium Liquidity Risk Low Liquidity Risk Low Liquidity Risk Medium Operational Risk Medium Operational Risk Low Operational Risk Low
108. 62-2- The framework and chart of risk management structure Board of directors Risk Management committee Compliance committee Asset liability committee Head of risk management Deputy of financial risk management Liquidity risk Companies & financial risk Market risk Department Deputy of non-financial risk management Credit risk Dept. Planning and business risk Operational risk. dept Non-compliance risk Dept. IT risk 62-3- Credit Risk 62-3-1- Definition of credit risk Credit risk is the loss due to negligence of the loanee or bank’s counterparty in fulfilling his/her/its obligations, based on the agreed conditions. Credit risk affects liquidity and profitability of the bank. Customer’s default risk, collaterals risk and concentration risk are the most important aspects of credit risk. 62-3-2- Policies of credit risk The most important risk management policies of Bank Mellat can be explained as follows: 1) Supporting from domestic production; 2) Supporting green trade; 3) Supporting advantageous industries; 4) Facilitating receiving loans for the public; 5) Supporting from using domestic goods; 6) Developing non-interest bearing loans; 7) Supporting export growth and increasing GDP; 8) Supporting national projects; 9) Supporting employment in the society. The bank benefits fro
109. m proper structure including policy making in credit risk management , integrated executive units with specified task description, codified and developed procedures in credit risk management, numerous and partly unique in the country banking system and supporting companies in credit processes, in order to achieve the abovementioned goals. The effects of COVID-19 economic crises and spreading on the bank operation Regarding to the economic changes due to spreading Corona Virus and its effects on credit risks and also according to the announcement of the damaged parts from this disease by the CBI, the bank has acted in order to recognize the effects of this issue on its credit portfolio, and would calculate the level of the facilities risk in accordance with new situation. Based on the fulfilled considerations the banks’ reserves for comforting credit risk driven from spreading Corona Virus is appropriate and the credit risks due to this issues has been considered constantly and required reports for managing risks arisen from changes in economic situations due to the Corona Virus in the bank credit portfolio would be rendered to the CEO of the bank and relevant divisions. 62-3-3- Executive division of credit risk management - Whereas credit risks constitute the main part of the bank’s risks, numerous units in different parts of the bank are working on credit risk management. This issue is managed in Bank Mellat in a way that every one of the staff is responsible of risk management of his/her working area proportionate with his/her responsibilities and powers. All of the relevant staff to the operating activities are categorized as credit risk management executive staff. Regarding the abovementioned items, relevant departments to credit risk management in Bank Mellat are divided in two policy making and executive departments. The policy making departments in credit risk management of Bank Mellat are introduced as follows: Board of directors; Risk management high committee; Asset and liability committee; Optimizing allocation resources committee; Risk management division; Credit planning and supervision division; Asset and liability management division. In addition to the abovementioned policy making units, the executive units related to credit risk management of Bank Mellat are introduced below: High credit committee: making decision for loans and liabilities in highest level of the bank before the board of directors of the bank; Credits division: making decision for loans and liabilities in level higher than regions committee and lower than high credit committee; Specific regional committees: making decisions on facilities and liabilities in higher level than branches management and lower than credit division; Credit committees of Branches management: Making decision on facilities and liabilities in higher level than branches and lower than specific regional committees; Credit committees of branches: Making decision on facilities and liabilities in level of branches authorities with regard to their grades; Expertise department of credit division: Providing expertise reports on highest level of the bank; Expertise department of corporate banking: Providing expertise reports and making credit decisions in specific manner for large companies with regard to the determined scope of authorities; Expertise department of regional management: Providing expertise reports on regional management level; Credit experts of branches: assessing credit status of the client in facilities and liabilities in branches scope authorities and also establishing credit files based on the scope of the higher level authorities. 62-3-4- Authorities scope of different organizational levels for ratifying facilities and liabilities All executive departments stated above have determined scope of authorities. This scope of authorities is determined proportionate to acceptable risk level of any different organizational level of the bank. Different parameters are considered in order to determine the acceptable credit risk level at any organizational levels, these parameters includes: branches level, branches management level, client risk, collaterals risk, volume of facilities and liabilities, type of facilities and liabilities, etc. In other words, the scope of authorities in Bank Mellat is determined with regard to decisions risk level. The scope of authorities is considered in credit planning and supervision department and it will be sent to the bank network after confirmation of the board of directors. 62-3-5- Methods for reducing credit risk Bank Mellat has been successful in reducing credit risk in order to manage credit risk regarding abovementioned structures based on risk, programs owner, procedures systems and specialized companies. The applied programs, processes and systems are explained briefly as follows:
110. • • 62-3-5-1-Programs Bank Mellat uses coherent programs to reduce the credit risk. The most important programs to reduce credit risk are as follows: Market risk department report: As stated above, the credit risk shall be managed with regard to indices of macro economy and market. So, the market management risk department studies different aspects of the country future economy status such as inflation, interest rate, foreign currency rate, industries status, economic sectors, business conditions, etc. and regularly presents the results to high risk committees, board of directors and allocating resource optimization committee. With regard to the abovementioned evaluations, the risk of different industries will be determined. The reports are in a way that enable the credit departments of the bank to useful and specific usage in order to reduce the credit risk. Customers’ assessment development: Developing different types of banking is one of the major programs of the bank to facilitate rendering banking services and credit risk management. Corporate, private, commercial and retail banking renders services proportionate to each group of customers based on credit risk level. • Developing credit systems: Although Bank Mellat benefits from valuable systems in credit risk management currently, but developing systems is one of the Bank Mellat important program. Developing systems such as core credit system, credit risk assessment system, customers risk model system, competence and capacity system, credit executive systems, etc. is the agenda of the bank. The abovementioned systems are designed in a way that the indices upgrade regarding to the economic and environmental changes. • Designing services proportionate to customers risk: Modern studies and economic consideration are exist in Bank Mellat and the main purpose of this department is to design services based on the customers’ requirements and also omitting or limiting facilities that are irrelevant to needs of customers. In other words in credit risk management process of the not only manages the credit risk of the bank but also customers’ risk as well. • • • • 62-3-5-2- Processes Credit risk management process in Bank Mellat is a comprehensive and integrated process. This process includes the request of the client to debts collection. The most important process to reduce credit risk is as follows: Client risk assessment process: Client risk process is carried out by different credit experts from branches up to highest level of the bank. Competence and capacity system is applied for this purpose. The volume of high-risk clients’ facilities is reduced in credit portfolio by using this system. The rank of clients upgrade for credit clients of the bank. Abovementioned issue will make the change in behavior of credit customers more obvious and the effects of credit risk will be greatly reduced. In addition to the abovementioned items, this software uses support tests (compliance between prediction and real operation). Collateral Risk Management Process: The perspective of value changes of collaterals is determined by market risk department. The abovementioned risk is managed by considering the above-said changes in process of receiving collateral. Concentration Risk Management Process: Bank Mellat controls its concentration risk by diversification in type of loans based on economic capacity and geographical diversity of the country. Crisis Test or Stress Test Process: The bank has developed crisis test processes in order to identify risks that can affect the bank in critical conditions. Crisis test is applied in the bank to identify the weak points and also credit and financial stability of the bank. 62-3-5-3- Systems Bank Mellat uses different software to decrease the credit risk. The most important software are: • Competence and Capacity Assessment Software: This system determines the credit capacity of the client with regard to standard indices that are used in most raised banks. The abovementioned system ranks the client by applying financial, non-financial information, etc. the output of this system determines credit rating of the customers, the amount of loans and also type of collaterals to cover the credit risk of the client. • Comprehensive Credit System: The comprehensive credit system provides valuable information data from all information of legal companies to different decision makers’ authorities.
111. • • • • • • • • • • • • Statistical Reporting System: This software is designed to consider the bank credit portfolio risk and it prepares different required reports for the managers in different levels. Single beneficiary system: It is a unique system that is used to identify relevant individuals and single beneficiaries and also the amount of loans and commitments of the different individuals. The bank manages an important part of credit concentration risk by using this system. Other Systems: Bank Mellat uses numerous systems such as systems for connection with different economic sections and social sectors of the country in order to follow up dues and also systems to communicate with the clients or their guarantors. 62-3-5-4- Leasing Bank Mellat has outsourced a part of credit process to specialized companies with regard to significant advantages of outsourcing some parts of processes and their effects on making specialized approaches to subordinate processes, removable connection with the clients, the speed of rendering services and improving control and decreasing risks in subordinate processes and also in order to develop credit risk management process. Receiving information of the client and debt collection are two parts that Bank Mellat uses the services of two specialized companies. Both mentioned companies have appropriate structure, trained staff and developed systems specific for the required services. Receiving customer’s information: Bank Mellat uses the services of a specialized company to receive the clients’ information in order to decrease the credit risk and increase the speed and precision of credit services. The abovementioned company uses specialist experts in order to take the financial and non-financial information of the client quickly and also evaluating the pledges of the clients. The systems used by the abovementioned company are connected to Bank Mellat’ systems and reports are available in Bank Mellat. Debts collection: Bank Mellat uses the services of a specialized company in debt collection. The abovementioned company while benefits from specialized experts in debt collection and advanced systems, uses developed professional processes that are documented. The services of the abovementioned company have increased the speed of following up the dues. On the other hand, the specialized processes of this company and also authorities to change the installments or decrease the delay payment charges, leads to increase customers’ satisfaction. 62-3-6- customers’ credit rating process Credit risk management process in Bank Mellat is a comprehensive and integrated process that to this end credit risk standard is used. Credit process in Bank Mellat is designed from application date by the client up to date of debt collection that the summary of which is explained as follows: Customers’ application: credit rating process begins with receiving application for loans and services. The financial and credit behavior of the client a long with capacities. etc. are considered and monitored in this step. Some of applications are not accepted because of the client high risk. The risk of some of application are adjusted upon changes in type of loans, installments amount and repayment due date. Low risk applications would be transferred to the next step. The process of receiving the applicant application is bilateral and the credit experts render different consultation for receiving loan. Issuing credit code: A specific credit code that connects the client to one of the branches of the bank is issued for each client in order to manage the credit risk of the clients. The client’s information is recognizable and referable through the abovementioned code in Bank Mellat. Banking system enquiry: Bank Mellat takes several enquiries from different authorities on credit, financial and personal behaviors of the client in order to decrease credit risk and managing relevant risks to credit risk such as risk of fraud and offense. The most important enquiries are: enquiry of bounced check, enquiry of NPLs, enquiry of gazette and enquiry of civil registration. Some of the abovementioned enquiries are completely systematic and online that are considered as premier advantages of Bank Mellat in country banking system. Receiving single beneficiary information: Bank Mellat receives relevant information of individuals which is connected to the customer in order to manage credit concentration risk. This item is expanded and exerted in all credit processes of the bank. Receiving financial and non-financial information of the customers: Almost all financial and non-financial information of the client are received through specific forms in order to precise inspection of credit risk management. Providing expertise reports: The “financial”, “credit”, “economic” and “technical” status of the clients is gathered in the expertise report and a single report is rendered about the client together with credit proposal and opinion: Customers rating: All gathered information are entered in to the model in this part and the client’s rating is determined finally. 62-3-7- Credit Quality Analysis The quality of bank’s assets including the loans, liabilities and investments, type and amount of taken pledges and sufficiency of the taken pledges (the ratio of granted loans to updated value of pledges - LTV) have been shown in tables No.62-3-7-1 to No.613-7-5 based on credit risk:
112. 62-3-7-1- Credit quality analysis of granted facilities and liabilities and investments based on the bank internal credit rating Grade 1 – Low risk Grade 2 – Medium risk Grade 3 – High risk Grade 4 – Near to bad debt Gross Total Value decrease reserve Net book value Credit Quality Analysis Loans granted to Banks Loans granted to clients Investments Liabilities for LGs & LCs 20.03.2021 20.03.2020 20.03.2021 20.03.2020 20.03.2021 20.03.2020 20.03.2021 20.03.2020 0 0 5,162,681,466 2,849,515,771 242,535,542 61,068,823 453,020,940 241,312,093 0 0 45,910,742 13,831,130 101,539,103 11,158,053 532,744,646 382,986,975 0 0 476,429,320 315,391,405 0 0 28,039,192 20,157,209 0 0 25,075,227 15,691,050 0 0 0 0 0 0 5,710,096,755 3,194,429,356 344,074,645 72,226,876 1,013,804,777 644,456,277 0 0 465,357,251 261,728,936 7,104 7,104 0 0 0 0 5,244,739,503 2,932,700,420 344,067,541 72,219,772 1,013,804,777 644,456,277 * The bank has developed a pattern to credit ranking of the banks. ** 2.2 percent of bank Mellat credit portfolio has affected by the risks driven from Corona Virus and this issue has been considered in relevant calculation of determining quality of the bank’s credit portfolio. ** At present the bank uses competence and capacity assessment for risk assessment and raking granted loans. Also, this bank is developing internal credit raking model with risk based approach. *** The investments include each type of securities by ownership right characteristics such as different types of stocks. 62-3-7-2- The table of credit quality analysis table of granted loans and liabilities based on asset classification. (Figures in Million Rials) Current Overdue defaulted Doubtful loans Gross Total Value decrease reserve Net book value Loans granted to Banks 20.03.2021 20.03.2020 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Loans granted to Clients 20.03.2021 20.03.2020 5,162,681,466 2,849,515,771 16,229,214 13,831,130 29,681,528 17,261,449 501,504,547 313,821,006 5,710,096,755 3,194,429,356 (465,357,251) (261,728,936) 5,244,739,503 2,932,700,420 Liabilities for LGs & L/Cs 20.03.2021 20.03.2020 1,013,804,777 644,456,277 0 0 0 0 0 0 1,013,804,777 644,456,277 0 0 1,013,804,777 644,456,277 62-3-7-3- Credit quality of participation bonds, treasury documents, Sukuk, investment funds and the like Credit Quality Analysis Issued by government and the CBI Documents of Islamic Treasury State-owned Sokuk (state-owned benefit bonds) Government benefit bonds (AFAD) Government benefit bonds (Market up-ARAD) Market-up bonds (Health) Total Issued by state-owned companies Crude oil standard bonds Toatl Issued by non-state-owned section Tehran municipality bonds (participation) Shiraz municipality bonds Shiraz urban train bonds (participation) Isfahan urban train bonds (participation) Tajrobeh Iranian Common Investment Fund Mobarakeh Steel Co. (forward) Mellat market making exclusive investment fund Bonds of PIB Branches abroad securities Total Grand Total 20.03.2021 Million Rials 20.03.2020 Million Rials 413,176 0 21,331,909 157,361,036 500,000 179,606,121 2,301,215 4,400,000 16,587,229 10,000,000 500,000 33,788,444 25,008,829 25,008,829 4,999,999 4,999,999 5,000,000 1,500,000 2,350,000 2,350,000 0 1,500,000 9,184,733 0 8,249 21,892,982 226,507,933 0 1,500,000 0 0 1,900,998 0 3,795,000 2,845,800 5,974 10,047,772 48,836,215
113. 62-3-7-4- Type and amount of received collaterals from credit customers Main Types of collaterals facilities granted to real customers Cash Deposit Participation bonds / Sokuk Marketable share bonds Non-stock market bonds Properties and real estates Factory and equipment Guarantee Check Promissory note Binding contract Other Total collaterals of real customers Facilities granted to legal customers Cash Deposit Participation bonds / Sokuk Marketable share bonds Non-stock market bonds Properties and real estates Factory and equipment LG Check Promissory note Binding contract other Total collaterals of legal customers Total received collaterals from credit customers 20.03.2021 Million Rials 20.03.2020 Million Rials 0 73,485,075 1,242,574 13,087,301 0 328,024,118 1,937,189 951,542 0 580,599,685 852,537,200 0 1,851,864,683 0 57,813,711 297,467 734 0 215,371,898 3,015,232 45,844 0 538,223,033 432,637,671 0 1,247,405,590 0 73,297,394 1,943,513 123,245,827 81 116,134,482 36,588,573 8,060,674 0 41,508,375 775,252,035 0 1,176,030,955 3,027,895,638 0 39,411,907 5,088,697 39,259,783 44,024 75,047,630 14,920,210 3,492,538 0 49,467,917 645,524,662 0 872,257,368 2,119,662,958
114. 62-3-7-5- The balance of facilities based on the balance of facilities ratio (to deducting reserves) to updated cash value of collaterals Description Loans granted to banks Less than 50% 51 to 70% 71 to 90% 91 to 100% Higher than 100% Total loans granted to banks Loans granted to real clients Less than 50% 51 to 70% 71 to 90% 91 to 100% Higher than 100% Total loans granted to real clients Loans granted to legal clients Less than 50% 51 to 70% 71 to 90% 91 to 100% Higher than 100% Total loans granted to legal clients Total loans granted to clients Total 20.03.2021 Million Rials 20.03.2020 Million Rials 0 0 0 0 0 0 0 0 0 0 0 0 883,222,253 7,437,193 45,477,950 79,244,832 105,477,123 1,120,859,351 546,713,488 55,831,743 18,566,804 8,642,043 15,422,425 645,176,503 982,263,929 91,903,416 61,783,071 57,773,779 42,323,482 1,236,047,677 2,356,907,028 2,356,907,028 529,830,499 8,393,557 29,536,539 43,804,657 75,148,850 686,714,102 1,331,890,605 1,331,890,605 This table discloses the collaterals coverage held with the bank for the reported debt balances of the customers and the calculations are based on the updated value of the collaterals and taking into account the liquidity coefficients mentioned in the assets and reserving classification circular. 62-3-8 – Credit concentration Risk In this part, the bank’s policy about distributing credit risk from economic divisions, domestic and international sections and types of contracts are explained and the result of these policies are shown in table No.61-3-8-1 and table No.61-3-8-2.
115. 62-3-8-1- Table of distribution of economic sections , facilities, investments and its domestic or international concentration Amounts in Million Rials Book Value Amount of facilities/liabilities based on economical section Industry & Mine Housing Trading Services Agriculture Banks Other Total Amount of facilities / liabilities based on in & out of the country * In the country Out of the country Total • Note 61-3-8-1-1 Granted Loans 20.03.2021 20.03.2020 2,356,907,028 1,331,890,606 Investments 20.03.2021 20.03.2020 344,067,541 72,219,773 Liabilities for Guarantees & L/Cs 20.03.2021 20.03.2020 1,013,804,777 644,456,277 484,772,936 88,971,619 237,451,167 1,022,175,312 130,665,689 0 392,870,305 2,356,907,028 360,287,760 84,136,052 174,005,194 673,910,727 34,162,825 0 5,388,049 1,331,890,607 106,165,412 0 0 225,510,351 0 10,388,398 2,003,380 344,067,541 4,851,582 0 1,876,159 46,862,813 0 7,933,199 10,696,019 72,219,772 0 0 927,631,372 0 0 0 86,173,406 1,013,804,778 0 0 584,350,649 0 0 0 60,105,628 644,456,277 2,356,907,028 0 2,356,907,028 1,331,890,606 0 1,331,890,606 331,705,822 12,361,719 344,067,541 62,286,508 9,933,264 72,219,772 453,020,940 560,783,838 1,013,804,778 241,312,093 403,144,184 644,456,277 Total includes granted facilities and dues from private sectors and loans granted to the banks.
116. 62-3-8-1-1- Distributing facilities and investments based on type of industry and mine are as follows : Description Facilities Automobile and spare parts Mineral and Metal industries Petrochemical, chemical and oil products industries Food & pharmaceutical Energy Contractual Telecommunication, computer and affiliated industries Financial mediatory Other Total loans 20.03.2021 Million Rials Investments Automobile and spare parts Mineral and metal industries Petrochemical, chemical and oil products industries Telecommunication, computer and affiliated industries Other Total investments Grand Total 20.03.2020 Million Rials 38,094,437 185,357,420 92,989,070 67,996,389 4,460,770 0 0 0 95,874,851 484,772,936 50,161,603 126,302,094 36,096,623 58,349,445 36,892,569 413 38,648 0 52,446,365 360,287,760 12,073,324 1,739,022 92,353,066 0 0 106,165,412 590,938,348 0 2,885,389 1,326,094 140,857 499,242 4,851,582 365,139,342 * Disclosing distribution of liabilities based on type of industry along with promoting the bank’s reporting software in compliance with the announced revealed level by the supervising department is in the agenda. 62-3-8-2- Table of distribution of non-governmental facilities based on transactional and participatory contracts and type of client Contracts Type of clients Transactional contracts Real Legal Total Participatory contracts Total Grand total Real Legal Granted facilities during period Amount Ratio to the total Million Rials 793,723,846 188,304,000 982,027,846 36,317,828 161,886,230 198,204,058 1,180,231,904 % 67.25 15.95 83.21 3.08 13.72 16.79 100 Balance of loans on 20.03.2020 Amount Ratio to the total Million Rials 681,344,898 987,596,121 1,668,941,019 233,535,098 166,878,603 400,413,701 2,069,354,720 % 32.93 47.72 80.65 11.29 8.06 19.35 100 Non-interest bearing facilities are classified in participatory contracts (non-transactional) section. 62-3-9- Non-Current loans and dues management method The bank uses software and systems and also services of specialized companies to manage non-current loans that was explained in the previous notes. The results of this policies are shown in table No.62-3-9-1 to No.62-3-9-3.
117. 62-3-9-1 table of non-current facilities and dues Description Balance of non-current loans and dues at beginning of the year Posted to non-current during year Settled non-current loans and dues during year Cash collection Collected by properties foreclosing Settlement with new facilities Forbearance Bad debts Forfaiting Forgiving penalties Balance of non-current loans and dues at the end of the year 20 .03.2021 Principal interest Million Rials Million Rials 300,231,558 38,569,511 Delay Payment charges Million Rials Total 20.03.2020 Principal interest Million Rials Million Rials Million Rials Delay Payment charges Million Rials Total Million Rials 6,112,516 344,913,585 194,129,336 44,073,001 4,126,836 242,329,173 590,165,398 75,816,117 12,015,377 677,996,892 207,087,488 10,979,723 3,745,373 221,812,584 221,577,310 28,465,124 10,426,775 1,339,485 0 0 181,892,808 23,367,019 0 0 0 0 0 0 476,500,063 61,213,999 69,844,985 3,611,919 0 27,528,362 0 0 0 300,231,558 9,583,737 808,529 0 291,756 0 0 0 38,569,511 1,370,417 97,520 0 291,756 0 0 0 6,112,516 80,799,139 4,517,968 0 33,911,065 0 0 0 344,913,585 4,511,168 254,553,602 212,282 11,978,542 0 0 3,703,217 208,963,045 0 0 0 0 0 0 9,701,226 547,415,289 62-3-9-2- Distribution of non-current facilities and dues based on economic sections Distribution of a part of non-current facilities Industry Construction & housing Trading Services Agriculture Banks Other Total Balance of Non-current Loans & Dues 20.03.2021 20.03.2020 Million Rials Million Rials 54,055,499 2,126,053 28,877,999 49,663,097 7,655,125 0 405,037,514 547,415,288 48,567,349 13,468,903 331,555,655 54,426,420 1,652,979 0 195,242,279 344,913,585 Net Doubtful loans reserve 20.03.2021 20.03.2020 Million Rials Million Rials 24,478,452 381,820 12,980,019 15,248,797 1,985,074 0 332,842,868 387,917,029 26,131,559 5,067,070 16,035,956 16,572,944 696,522 0 154,482,148 218,986,199 Net Non-current Loans & dues 20.03.2021 20.03.2020 Million Rials Million Rials 29,577,047 1,744,234 15,897,981 34,414,300 5,670,051 0 72,194,646 159,498,259 22,435,790 8,401,833 15,519,699 37,853,476 956,457 0 40,760,131 125,927,386
118. 62-3-9-3- Balance of foreclosing assets Description 20 .03.2021 Million Rials 108,419 3,703,994 1,137,409 1,651,117 2,819,007 2,662,537 10,544,578 33,959 22,661,020 0 22,661,020 Vehicles Residential property Land Commercial property Factory Equipment Shares Furniture Total Decreasing accumulated value Total 20.03.2020 Million Rials 108,419 3,810,748 1,297,575 1,722,623 3,305,504 2,669,903 21,639 33,959 12,970,370 0 12,970,370 62-3-10- Capital required for covering credit risk Capital required for covering credit risk of the bank’s assets is as follow: 62-3-10-1- Capital required for covering credit risk Note Total weighted assets to credit risk Coefficient (Percent) Required Capital for covering credit risk 62-7-2 20.03.2021 Million Rials 4,015,854,822 %8 321,268,386 20.03.2020 Million Rials 2,390,301,381 %8 191,224,110 62-4- Liquidity risk 62-4-1- Definition of liquidity risk The liquidity risk is defined as disability of the bank in financing amounts to pay debts on due date (debts mainly includes deposits). When the bank has no sufficient liquidity it is not be able to finance the required fund quickly and on a reasonable cost. The liquidity risk usually affects profitability risk. In other words, when the bank faces liquidity risk, it has no way other than financing with rate higher than clients and other banks. On the other hand, maintaining surplus high amount liquidity is not desirable because it takes investment chances from the bank and leads to the bank’s return. 62-4-3- Liquidity risk management policies The most important point in policies section is conformity and alignment of strategies and liquidity risk management programs. In Bank Mellat, short-term liquidity risk programs are designed with regard to long-term liquidity risk and on the other hand, liquidity risk management programs are oriented from strategies. The most important liquidity risk management and policies are as follows: • • • • Liquidity risk management programs: bank Mellat has regular programs for managing liquidity risk. The most important program of the liquidity risk management are as follows: Liquidity risk appetite document: In mentioned document, cash fund and equal cash of the bank is determined in two marketable cash assets and other cash assets. Each of the abovementioned parts have combinations of cash assets that the liquidity required of the bank in each abovementioned parts is determined in detail in liquidity risk appetite management. Operational plan: In operational plan of the bank, different indexes of liquidity risk management from the branches level to the whole bank level are monitored and managed continuously. In other words, liquidity risk management is managed totally from branches to whole bank in the operational plan. Budgeting: The liquidity risk management is considered in providing annual budget of the bank. Relevant policies: Allocating resources of the bank are designed proportionate to the bank liquidity in credit policies. Other programs: Numerous programs are in the agenda of the assets and liability committee, high risk management committee and other departments of the bank to manage liquidity risk of the bank.
119. Credit policies of the bank : Whereas liquidity risk most of the time is function of credit risk, Bank Mellat has integrated credit risk and liquidity risk management policies. Credit policies of Bank Mellat are determined with regard to the economic condition to reduce client default risk. Also, the allocation of resources of the bank are designed based on liquidity of the bank. Economic crisis and Corona Virus Incidence: with due regard to the CBI requirement for three-month grace period in receiving instalments of non-interest bearing loans and damaged sections from this disease, risk management has act in order to recognize the effects of this issue on liquidity turnover of the bank, based on the fulfilled consideration, bank has sufficient liquidity reserves for comforting liquidity risks arised from Corona incidence and this reserves are under supervision permanently. 62-4-3- Executive units of liquidity risk management Circular No.96/251081 issued by the CBI on October 31, 2017 has emphasized on necessity of establishing standard structure of liquidity risk management. Subordinate committee of liquidity risk management has established under supervision of the risk management committee. In case of approval of risk committee (due to the connection role of risks) the resolutions of subordinate committee of liquidity risk management will be applicable. The members and duties of the committee have been designed in accordance with circular of the CBI. On the other hand, regarding the necessity of calculation the covering ratio of liquidity in the abovementioned guideline, the database and calculation procedure have been done in two foreign currency and Rial and it will be provided to the users based on the circular. Risks are considered interestedly in risk management. Liquidity risk management departments work in specialized manner under risk management as previous years. Liquidity risk management departments of Bank Mellat are explained as follow in three “liquidity governance risk”, “liquidity risk management structure” and “liquidity risk officials” parts: Liquidity risk management structure in Bank Mellat CEO Board of Directors Risk Management Committe Liquidity Risk Management Subordinate Committee of liquidity risk management Liquidity Risk Management Dept., Risk Management, Asset & liability Committee, and Accounting Management & Investment division Asset & liability Management, Treasury Management, Districts & Branches Management 62-4-4- Liquidity risk measurement method (including bases and assumptions) The liquidity risk measurement methods and models of Bank Mellat are in accordance with standard measurement methods of this risk and are as follows: 1) Transfer pricing of the funds: Transfer pricing of the funds is another instrument that is used for liquidity risk management. Transfer pricing of the funds is determined with regard to liquidity condition of the bank and profit
120. 2 ) 3) 4) 5) • • • • • • 6) • • • • • 7) • rate. The resources and allocation of resources are managed in branches upon changes in transfer pricing of the funds and consequently the bank’s liquidity would be managed. Deviation from liquidity risk appetite documents: The volume and combination of real liquidity reserves of the bank are compared to volume and combination of liquidity reserve of the bank’s appetite document and deviations are determined in each part and noticed as importance bases in liquidity management. Asset and liability maturity date: Bank Mellat considers the assets and liabilities maturity date in order to manage liquidity risk appropriately and the assets and liabilities ladder is calculated daily. Assets and liabilities gap analysis with short-term maturity date can be very useful in observing the bank’s liquidity risk. Liquidity ratios: Different liquidity risk ratios are monitored in the bank. Ratios of “liquid assets to total assets in Rial and foreign currency”, “liquid assets to sight liquidities in Rial and foreign currency”, “deposit to loans in Rial & foreign currency”, etc. are ratios that are noticed in liquidity part. Anti-Crisis program: Different scenarios are designed for crisis program with regard to predicting the liquidity condition in future and also interest rate changes. Some of main sources of liquidity crises that considerd to the model are: Changes in monetary and financial policies of the government: major changes in monetary and financial policies of the government affects the banks’ liquidity quickly. These factors are reviewed regularly in Bank Mellat. Interest rate changes: lack of change in interest rate of deposits and loans based on changes in market interest rate could affect the bank’s liquidity. Foreign currency rate changes: Foreign currency changes have different impacts on loans, commitments and deposits. These changes are considered in liquidity model. Changes of balance sheet: off-balance sheet items can affect the bank’s liquidity. All commitments and LGs of the bank and their maturity date are considered in the bank’s liquidity planning. Liquidity status of other banks: Liquidity problems of each bank will transfer to other banks due to various problems. Liquidity status of all banks and allocated credit lines of the CBI to other banks are considered and monitored periodically in Bank Mellat and liquidity policies of the bank will be adjusted based on the consideration results. CAMELS liquidity system (CAMELS ratios) is used in Bank Mellat in order to liquidity consideration of some important banks. Other risks that may affect bank’s liquidity risk: operating risks such as electronic systems power failure of bank that can affect the bank’s liquidity is considered in liquidity crisis test of the bank. Continuous activity program: Continuous activity program has been designed in Bank Mellat to confront liquidity risk crisis. This program consist of several aspects: Liquidity committees: Liquidity committees are designed to confront liquidity risk crisis. The members of this committees have been appointed and their task description have been determined. In case of necessity, mentioned committees will be established in all levels of the organization. Liquidity planning: A liquidity proportionate to the bank’s status has been considered in the bank’s programs in order to control and maintain liquidity. Inter-bank transactions: Inter-bank transactions are determined based on depositing, loans and also issued pledged bonds in Bank Mellat. Credit limits with different banks are determined in risk management. Mentioned limits are approved by the board of directors after confirmation of liquidity risk committees and risk management committee and treasury management of the bank will interact with other banks based on the set limits. Fund supply planning: Supplying fund from other banks and also other clients is referred to the executive departments of liquidity risk management after consideration in liquidity committee. Facilities inflow prediction: The amount of received instalments and loans inflow will be predicted with regard to similar trends and also historical behaviors of the clients as well as different economic status. Deposit, facilities and liabilities concentration risk: Another method of liquidity risk calculation is calculating concentration risk. The liquidity risk is calculated by Herfindahl-Hirschman index on different levels of deposits, loans and liabilities. Liabilities concentration especially liabilities in foreign currency is very important for Bank Mellat. In addition to the abovementioned items, the deposit of 100 premier clients is monitored continuously. 62-4-5- Liquidity risk control and monitoring mechanism In addition to the abovementioned items about liquidity risk management methods and executive departments in Bank Mellat, controlling and monitoring (supervision in the bank) the above-said risk are carried out with regard to task description of liquidity risk management departments in Bank Mellat and by using data and systems such as: “asset and liability maturity date analysis”, “FTP”, and “statistical reports software’ by different departments: Risk management committee: Liquidity risk, changes in trend and relevant indices are monitored in risk management department. The major changes along with offers report to risk management committee and after confirmation and
121. • • • • • noticing to the relevant departments, necessary following ups from relevant departments will be done by risk management in order to adjust the risk. Liquidity committee: All required reports about bank’s liquidity risk management are reviewed and analyzed every week in Bank Mellat liquidity committee and required decisions will be made on the above-said risk management. According to guidelines of the CBI, the liquidity committee has been transferred to risk management committee subcategory. Asset and liability committee: This committee examines liquidity risk indices periodically. Treasury management: Bank’s liquidity management supervises the main transactions in inter-bank area. Branches and branches management: Branches and branches management, manages bank’s liquidity by following up relevant operating programs. Supervisory departments: The efficiency and effectiveness of liquidity risk management system are monitored by supervisory departments of the bank (Internal accounting). 62-4-5-1- Liquidity reserves The table below shows the combination of the bank’s liquidity reserves: Description 20.03.2021 Million Rials 64,873 65,783,897 54,268,528 6,976,744 48,788,972 206,114,951 0 109,354 382,107,319 Balance held with the CBI (unlimited – Rials) Balance held with the CBI (unlimited – foreign currency) Balance held with other banks (unlimited – Rials) Rial fund balance Fx fund balance Issued bonds by the Government Securities purchased from banks Dues for SHAPARAK Total liquidity reserve 20.03.2020 Million Rials 67,865,365 36,001,449 114,112,233 9,352,890 23,143,721 40,288,443 2,845,800 64,023 293,673,924 62-4-5-2- Table of Liquidity Ratios Cash asset and cash equivalent to total assets Cash asset and cash equivalent to total deposits Net cash assets to total deposits Facilities to total deposits Facilities to one-year & more than oneyear deposits Evasion deposits to total deposits Beginning of year Percent 6.6 Period Average Percent 7.2 Maximum during Period Percent 8.7 Minimum during Period Percent 5.1 Ending of period Percent 5.1 11.0 11.7 13.8 8.7 8.7 10.1 109.4 405.5 11 118.3 428.6 13.1 158 547.7 8.2 101.2 369.8 8.2 119.9 413.2 28.0 39.6 56.6 24.8 24.8 Cash and cash equivalent is the cash on hand, participation bonds and the like that have active market of cash transaction. * Net cash assets are cash and equivalent of cash, investment bonds that have active market of cash transaction minus banks’ deposits, issued debt securities, other borrowing and liabilities that will mature until one month later. ** Evasion deposits include deposits that does not have maturity date such as current and saving interest-free deposits and etc. All calculated ratios include Rial and foreign currency.
122. 62-4-5-3- Assets and liabilities maturity date analysis The table below shows the financial assets and liabilities of the bank based on expected date of request or settlement . Book Value Assets Cash Dues from banks & other credit institutions Dues from the Government Granted loans & Dues from public 20.03.2021 Less than one 1 to 3 months 3 months to 1 month year 1 to 5 years Million Rials Million Rials Million Rials Million Rials Million Rials More than 5 years Without specified maturity Balance before deducting reserve Million Rials Million Rials Million Rials 284,705,887 758,976,619 284,705,887 718,907,258 0 0 0 0 0 40,069,360 0 0 135,484,372 2,887,832,475 0 331,597,718 0 313,180,913 0 535,748,951 0 804,827,198 0 2,330,841 135,484,372 137,547,585 900,146,854 2,931,809,620 Granted loans & Dues from private sectors 2,356,907,028 Investment and partnership 344,067,541 164,658,736 0 0 231,739,841 0 0 749,284,913 0 0 982,970,769 315,506,177 19,905,157 3,361,249 28,561,364 0 224,891,521 2,778,287,135 0 344,074,645 46,728,684 67,648,570 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 544,920,754 1,285,033,865 2,163,278,661 0 0 0 0 0 34,253,454 67,233,395 71,490,020 193,179,479 211,314,031 17,676,310 21,816,897 380,126,497 380,126,497 67,971,529 67,971,529 2,033,438,640 8,055,769,034 sectors Investment in subsidiary & affiliated companies Other accounts receivable Tangible fixed assets Intangible assets Legal deposits Other assets Total Assets liabilities Dues to banks & other credit institutions Deposits of clients * Dividend payable Debt securities Operating tax reserve Reserves and other liabilities Retirement allowance & Staff liabilities reserve Investment depositors equities Total liabilities Total shareholders’ equities Total cash output due to off-balance sheet items Total liabilities & shareholders’ equities & off-balance sheet items Gap Accumulated gap Gap ratio to supervisory capital **percent Accumulated gap ratio to supervisory capital -percent Gap to supervising capital ratio basis for other cautionary ratios***-percent Accumulated gap ratio to supervisory capital basis for other cautionary rates-percent 66,633,841 67,233,395 0 193,179,479 0 17,676,310 0 380,126,497 0 67,971,529 0 7,560,794,972 1,499,869,599 825,577,506 0 0 23,102,323 0 12,569,014 756,014,316 5,780,978 1,846,116,537 1,083,175,064 163,627 0 0 0 139,968,129 0 1,639,435,303 0 78,382,794 0 4,985,056 0 0 0 0 0 139,615,373 0 0 0 0 0 567,490,121 0 0 0 119,379,348 0 0 0 0 0 1,494,453,129 0 50,850,923 1,846,116,537 163,627 163,627 0 0 139,968,129 139,968,129 25,602,826 1,639,435,303 78,382,794 78,382,794 2,529,311,728 41,571,449 1,149,282,304 7,058,955,623 1,147,848,837 1,154,267,360 501,839,349 0 0 0 0 0 25,221,214 1,269,336,389 177,405,600 2,712,220,173 0 0 0 0 0 1,500,234,107 0 0 43,900,371 2,529,311,728 366,979,545 7,058,955,623 501,839,349 501,839,349 0 7,560,794,972 1,147,848,837 1,154,267,360 177,405,600 2,712,220,173 1,500,234,107 (134,859,804) 7,560,794,972 501,839,349 501,839,349 1.12 352,020,762 (609,346,606) 1,107,628,264 (548,941,513) (1,465,980,653) 853,860,111 244,513,505 1,352,141,769 803,200,256 (662,780,397) 0.79 (1.36) 2.48 (1.23) (3.28) 28,110,875 284,705,887 758,976,619 1,666,459,095 1,003,678,698 3.73 1.12 1.91 0.55 3.02 1.80 (1.48) 2.25 1.88 1.32 (2.28) 4.14 (2.05) (5.49) 6.24 1.88 3.20 0.91 5.06 3.01 (2.48) 3.76 825,577,506
123. 62-4-5-3-1 Assets and liabilities maturity date analysis The table below shows financial assets and liabilities of the bank based on expected date of request or settlement . Book Value Less than one month Million Rials Million Rials 1 to 3 months 3 months to 1 year Million Rials Million Rials Assets Cash 206,809,705 206,809,705 0 0 Dues from banks & other credit institutions 490,487,090 450,417,731 0 0 Dues from the Government 159,511,678 0 0 0 Granted loans & Dues from public sectors 1,600,809,815 183,814,292 173,605,319 296,981,278 Granted loans & Dues from private sectors 1,331,890,605 123,284,017 139,976,717 373,941,974 Investment and partnership 72,219,773 0 0 0 Investment in subsidiary & affiliated 28,204,209 0 0 0 companies Other accounts receivable 44,280,933 0 0 0 Tangible fixed assets 188,959,890 0 0 0 Intangible assets 16,872,706 0 0 0 Legal deposits 253,360,236 0 0 0 Other assets 30,212,717 0 0 0 Total Assets 4,423,619,357 964,325,745 313,582,037 670,923,252 liabilities Dues to banks & other credit institutions 478,998,818 22,061,895 0 6,621,452 Deposits of clients * 1,186,327,192 752,163,783 2,063,712 49,829,508 Dividend payable 36,514 0 0 0 Debt securities 0 0 0 0 Operating tax reserve 18,166,680 0 0 0 Reserves and other liabilities 850,729,017 0 0 0 Retirement allowance & Staff liabilities 36,702,949 0 0 0 reserve Investment depositors equities 1,495,193,446 31,777,297 537,976,902 12,842,269 Total liabilities 4,063,154,616 806,002,975 540,040,614 69,293,229 Total shareholders’ equities 360,464,742 0 0 0 Total cash output due to off-balance 0 0 0 0 sheet items Total liabilities & shareholders’ equities 4,423,619,357 806,002,975 540,040,614 69,293,229 & off-balance sheet items Gap 360,464,741 158,322,771 (226,458,578) 601,630,023 Accumulated gap 360,464,741 518,787,512 292,328,934 893,958,957 Gap ratio to supervisory capital **-percent 1.33 0.58 (0.83) 2.22 Accumulated gap ratio to supervisory 1.33 1.91 1.08 3.29 capital -percent Gap to supervising capital ratio basis for 4.11 1.81 (2.58) 686 other cautionary ratios***-percent Accumulated gap ratio to supervisory 4.11 5.92 3.33 10.20 capital basis for other cautionary ratespercent 20.03.2020 1 to 5 years More than 5 years Without specified maturity Million Rials Million Rials Million Rials 0 40,069,359 0 446,139,203 475,193,111 48,936,215 19,567,563 0 0 0 0 0 1,029,905,451 0 0 0 1,292,053 1,764,008 23,283,558 0 Without specified maturity Million Rials 0 0 159,511,678 498,977,670 217,730,778 0 8,636,646 206,809,705 490,487,090 161,574,892 1,625,187,629 1,569,241,726 72,219,773 28,204,209 0 44,280,933 0 188,959,890 0 16,872,706 0 253,360,236 0 30,212,717 26,339,619 1,418,543,253 44,955,262 204,863,782 20,452,636 253,360,236 30,212,717 4,707,569,657 395,696,239 212,342,170 0 0 0 41,279,096 0 3,651,443 0 0 0 0 786,741,584 0 47,967,789 69,928,019 36,514 0 18,166,680 22,708,337 36,702,949 475,998,818 1,186,327,192 36,514 0 18,166,680 850,729,017 36,702,949 723,302,903 1,472,620,408 0 0 0 790,393,027 0 0 189,294,074 384,804,362 360,464,742 0 1,495,193,446 4,063,154,616 360,464,742 0 1,472,620,408 790,393,027 745,269,104 4,423,619,357 (442,714,957) (764,053,408) 1,033,738,891 451,244,000 (312,809,408) 720,929,483 (1.63) (2.81) 3.81 1.66 (1.51) 2.66 (5.05) (8.72) 11.79 5.15 (3.57) 8.22 * Deposits of clients include sight deposits, savings deposits and the like and other deposits. ** Supervising capital is based on standards of the CBI for risk reports and in accordance with note 62-7-1. *** Supervising capital is the basis of other cautionary ratios based on standards of the CBI for risk reports and in accordance with note 62-7-1. * Deposits of clients include sight deposits, savings deposits and the like and other deposits. ** Supervising capital is based on standards of the CBI for risk reports and in accordance with note 62-7-1. *** Supervising capital is the basis of other cautionary ratios based on standards of the CBI for risk reports and in accordance with note 62-7-1
124. 62-4-5-4- Financial debts contractual maturity analysis 62-4-5-4-1- Table below shows the financial debts contractual maturity based on maturity stated in the contract . Note Liabilities Dues to banks and other credit institutions Deposits of clients Facilities received from National Development Fund Investment depositors’ equities Book Value Million Rials 25-1 Total Note Liabilities Dues to banks and other credit institutions Deposits of clients Facilities received from National Development Fund Investment depositors’ equities Total 825,577,506 1,846,116,537 1,292,742,796 2,529,311,728 6,493,748,566 Book Value Million Rials 475,998,817 1,186,327,192 695,252,333 1,495,193,446 3,852,771,789 Less than one month Million Rials 23,102,323 1,083,175,064 149,099,118 41,571,449 1,296,947,955 Less than one month Million Rials 22,061,895 752,163,783 41,724,015 31,777,297 847,726,990 1 to three months 20.03.2021 3 months to 1 year 1 to 5 years More than 5 years Million Rials Million Rials Million Rials Million Rials 0 4,985,056 67,747,544 1,149,282,304 1,222,014,904 12,569,014 139,615,373 96,565,827 25,221,214 273,971,427 756,014,316 567,490,121 972,659,659 1,269,336,389 3,565,500,485 5,780,978 0 6,670,649 0 12,451,627 1 to three months 20.30.2020 3 months to 1 year 1 to 5 years More than 5 years Million Rials Million Rials Million Rials Million Rials 0 2,063,712 10,424 537,976,902 540,051,038 6,621,452 49,829,508 7,743,054 12,842,269 77,036,283 395,696,239 312,342,170 305,830,573 723,302,903 1,737,171,885 3,651,443 44,417,910 0 48,069,353 Without specified maturity Million Rials 28,110,875 50,850,923 0 43,900,371 122,862,169 Without specified maturity Million Rials 47,967,789 69,928,019 295,526,357 189,294,074 602,716,239
125. 62-4-5-4-2- Table below shows financial liabilities in foreign currency based on maturity stated in the contract . Note Book Value liabilities Dues to banks and other credit institutions Deposits of clients Million Rials 793,421,916 706,146,271 Loans received from National Development Fund 25-1 1,292,742,796 Investment depositors’ equities 299,213,422 Total 3,091,524,404 Book Value Liabilities Dues to banks and other credit institutions Deposits of clients Million Rials 443,473,269 399,652,712 Loans received from National Development Fund 25-1 695,252,333 Investment depositors’ equities 167,451,550 Total 1,705,829,864 Less than one month Million Rials 19,537,503 610,426,372 149,099,118 80,853,523 859,916,516 Less than one month Million Rials 19,620,021 324,456,236 41,724,015 51,329,070 437,129,342 1 to three months 20.03.2021 3 months to 1 year 1 to 5 years More than 5 years Million Rials Million Rials Million Rials Million Rials 0 0 67,747,544 7,586,771 75,334,315 0 0 96,565,827 12,672,626 109,238,453 752,314,891 0 972,659,659 191,864,144 1,916,838,695 0 0 6,670,649 0 6,670,649 1 to three months 20.30.2020 3 months to 1 year 1 to 5 years More than 5 years Million Rials Million Rials Million Rials Million Rials 0 0 10,424 4,667,465 4,677,889 0 0 7,743,054 8,174,764 15,917,818 391,109,386 0 305,830,573 100,607,856 797,547,815 0 0 44,417,910 0 44,417,910 Without specified maturity Million Rials 21,569,521 95,719,899 0 6,236,357 123,525,777 Without specified maturity Million Rials 32,743,862 75,196,476 295,526,357 2,672,395 406,139,090
126. 62-4-6- Confronting Crisis Program Liquidity risk is a subordinate risk and it can be derived from operating risks , information systems risk, credit risk, foreign currency rate risk, etc. In Bank Mellat, the program for confronting with liquidity risk is designed based on Basel committee and guidelines and directive of the CBI. Confronting crisis program in this bank is comprised of three steps of “liquidity theories design”, “crisis test scenario improvement and analysis” and “necessity program design” and they are as follows: • Liquidity theories design: Different liquidity risk scenarios are examined in different modes. These scenarios can be derived from different factors and risks. Some of items that are examined in liquidity risk management are as follows:  Information systems risk: Disorder in operating activities can have significant impact on liquidity risk. The effect of these disorders are examined by reviewing their factors and degree of impact in liquidation in different scenarios.  Credit risk: Different scenarios of credit risk and also their degree of effect are entered in the model. One of the most important aspects of credit risk is concentration risk that would be considered in the model extensively.  Foreign currency risk: Different scenarios of foreign currency changes rate and the amount of its effect on liquidity of the bank especially for foreign currency that comprises high volume of activity of the bank (such as EUR) are studied in different scenarios.  Operating risk: Different components of operating risk can be led to liquidity risk in the bank. The impact of most important operating risk factors is considered in liquidity risk model. • Crisis test scenario analysis and improvement: measuring the amount of impact of crisis scenarios is done by using its historical effects and also the opinion of experts and internal effects of different scenarios. The value faced to liquidity risk is measured by using historical data. • Necessity program design: The necessity program is designed with the abovementioned items in Bank Mellat the most important usage of necessity program in bank is as follows: 1- Training: Managers and staff of the bank are trained about the impact of other risks such as credit, operating and market risk and their on bank’s liquidity. 2- Establishing Necessity committee: The necessary committees of the bank are designed in critical conditions of liquidity risk management and the duties of different departments and managers are determined. 3- 4- Designing liquidity risk appetite document and protecting the document: Mentioned document is ratified by the board of directors and all effective departments in liquidity management protect the liquidity of the mentioned document. All liquidity risk crisis scenarios are observed in mentioned document. Historical data has been used to extract risk appetite document. Standard deviation, mean deviation and negative data are calculated with 95% reliability of liquidity by statistical method after data collection. Different scenarios are entered into the model and finally the high and low threshold of liquidity in crisis and non-crisis state is determined. Designing information systems: Providing information to all managers and experts who are the officer of liquidity risk management or affecting the liquidity risk management in bank, is vital for the banks. A strong information system is the complementary of proper liquidity decisions in crisis. At present, the information systems of the bank are able to design the asset-liability ladder, assessing the concentration risk and classifying the clients based on different fields such as deposit interest rate and etc. in the bank, regions management and branches management level. 62-5- Market Risk 62-5-1- Definition of market risk Market risk is the risk resulted from unexpected changes or fluctuation in market rates or prices. In other words, the market risk related to indefiniteness of incomes of transactions portfolio of a financial institution due to change in the market conditions (including asset price, interest rate, market fluctuations and market liquidity). Types of Market Risk: Different types of market risk that are noticed in Bank Mellat include interest rate risk, foreign currency rate, stocks and other items relevant to effects of macroeconomic indexes that are described briefly as follows:
127. Interest rate risk: The risk of loss resulted from interest rate fluctuation is called interest rate risk. A financial institution may face with loss or interest reduction because of interest rate changes with regard to inconformity of maturity date of assets and liabilities or time difference of their maturity dates. Deposits, loans, debentures etc. are exposed to interest rate risk. Foreign currency rate risk: The loss risk resulted from foreign currency rate fluctuations is called foreign currency risk. Foreign currency risk includes the following items: • Assets and liabilities in foreign currency; • Foreign currency transactions; • Derivative foreign currency transactions including (future, SWAP, option etc.); • Other assets and liabilities that their cash flow is in foreign currency. Shares risk: The risk of loss resulted from fluctuations of shares market value is called shares risk. This risk would be appeared when the assets shares existing in portfolio of the bank’ shares faces with price reduction. 62-5-2- Market Risk Management Procedures & Policies With due regard to the fact that credit institutions have assets that are affected and benefit by interest rate, foreign currency rate or shares rate fluctuations extensively, several departments in Bank Mellat manage market risk (including policy making, recognition techniques, evaluation, and monitoring and controlling market risk). Some of the executive departments of market risk management with regard to the each of explained duties are comprised of risk management, financial affairs division, treasury management division, credits division, investment division and companies’ affairs, international division, domestic branches foreign currency operations division, corporate banking, commercial banking and personal banking. In addition to the abovementioned departments, “supreme risk committee”, “risk technical committee”, “asset and liability committee” and other relevant committees help the board of directors of the bank to determine Bank Mellat’s policies for managing market risk. 62-5-3- Market risk assessing method For the first time risk measuring indices were calculated by studying statistical indices of dispersion and after that more modern methods including downside risk; applying duration were introduced to calculate the sensitivity of value of debentures and finally value at risk that all of them use statistical methods. The method used in performing sensitivity analysis calculations and its major parameters and theories are as follows: Value Risk (VaR) VaR is the maximum loss that may be incurred during a fixed time period and a specific confidence level in a portfolio. If random variable of R shows a portfolio, F(R) be probability density function of R and C be confidence level, the probability that the output be less than R* is as follows: