Bank Mellat: Consolidated Financial Statements - March 2015

Transcription

1. Bank Mellat (Public Joint Stock Co.) Report of Independent Auditor and Legal Inspector together with Consolidated Financial Statements of the Group & Bank for the fiscal year ended on March 20, 2015 Page 1 of 50 Bank Mellat – Financial Statements March 20, 2015
2. Bank Mellat (Public Joint Stock Co.) Table of Contents Title Page (Original) A) Report of Independent Auditor & Legal Inspector (1) - (7) B) Consolidated Financial Statements of Group: 1- Letter of the Bank’s Board to the Ordinary General Meeting of Shareholders 1 2- Consolidated Balance Sheet 2 3- Consolidated profit and loss statement & turnover of retained profit 3 4- Consolidated comprehensive profit and loss statement 4 5- Consolidated cash flow statement 5 C) Bank’s Basic Financial Statements: 1. Balance sheet 6 2- Profit and loss statement and turnover of retained profit 7 3-6- Comprehensive profit and loss statement 8 3- Cash flow statement 9 D) Explanatory notes accompanying consolidated and Bank financial statements 10 - 67 Page 2 of 50 Bank Mellat – Financial Statements March 20, 2015
3. Emblem I .R. of Iran Ministry of Economic Affairs and Finance Audit Organization Report of Independent Auditor & Legal Inspector to Ordinary General Meeting of the Shareholders Bank Mellat (Public Joint Stock Co.) Report on the Financial Statement Preamble 1. Consolidated balance sheet of the Group and Bank Mellat (Public Joint Stock Co.) on March 20, 2015 and consolidated statements of profit and loss and comprehensive profit and loss and cash flow of the group and bank for the fiscal period ended on the said date, together with accompanying Explanatory Notes 1-60 have been audited by this Organization. Responsibility of the Board of Directors in Respect of Financial Statements 2. The Bank’s Board of Directors is responsible for preparation of financial statements according to the accounting standards. Such responsibility includes design, exercise and maintenance of internal controls related to preparation of financial statements, in such a manner that such statement are free from material misstatement, whether due to fraud or error. Responsibility of the Auditor and Legal Inspector 3. Our responsibility is to express an opinion on these financial statements based on our audits and in accordance with Auditing Standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is adequate and appropriate to provide a basis for our expressing qualified opinion concerning the consolidated financial statements of the group and the parent company. Additionally, this organization is responsible to act as the legal inspector and report to the ordinary general meeting of the shareholders the required cases and also any non-compliance with due legal requirements set out in the monetary and banking regulations, usury-free operations, Commercial Code as amended, as well as provisions of the Articles of Association of the Bank. Basis of Expressing a Qualified Opinion 4. By virtue of Article (29) of the Articles of Association of the Banks’ Personnel Retirement & Disability Fund the current value of the Fund’s future obligations had to be reviewed each three years and the obligation of each relevant member bank had to be supplied after approval of the general meeting of the Fund. To this end, a reserve of IRR 11,164 billion was considered in the accounts in the past years, and sum of IRR 3,700 billion thereof was paid. Nevertheless, no future actuary obligations (except for IRR 709 billion) for the three-year period of 2011-2013and also no estimation for the year 2014 have been reflected in the accounts. Further, the actuary obligations calculated on the basis of resolutions adopted in the Meeting held on July 05, 2014 by the specialist of the Fund’s Trustee Board, as notified to the Page 3 of 50 Bank Mellat – Financial Statements March 20, 2015
4. 5 . Fund’s Trustee Board’s Members, have been declared as IRR 30,400 billion, irrespective of the Bank’s share in the current value of the Fund’s assets. Supply of more reserve for this respect is necessary, but designation of final adjustment amount shall hinge on notification of final sum the said Fund. As detailed in the explanatory notes (9) and (10), a part of customers’ non-current liabilities for sum of IRR 87,379 billion (preceding year: IRR 77,625 billion) has been depreciated with new conditions and they have been transferred to the current class by their settlement by installment, they have been recognized as earning due from such process. Reviews made on the status of receivables from such customers in the past indicate failure in their total collection at their maturity dates. Additionally, the provisions of Circulars 2823MB, dated February 24, 2007, 91/21270, dated April 19, 2012 and 93/337180, dated March 05, 2015 issued by the Central Bank of I.R. of Iran concerting breaking down and classification of granted facilities and lack of return of reserve of the depreciated facilities and accounting the required reserve for doubtful accounts have not been completely complied with. With regard to the foregoing concerning compliance with the said circulars and accounting standards, although adjustment of accounts is final in this regard, it is not possible for this organization to designate its amount. Expressing a Qualified Opinion 6. In opinion of this organization, except for the effects set out in Clauses (4) and (5), the said financial statements, fairly present, in all material respects, the financial position of the group and Bank Mellat (Public Joint Stock Co.) as at March 20, 2015, and their financial performance and their cash flows for the year then ended in accordance with Accounting Standards. Emphasis of a Matter 7. We draw the attention of the shareholders’ general meeting to this matter that profit available for distribution as per the consolidated financial statements of the group is less than the profit available for distribution according to the Bank’s financial statements. Hence, this matter is important for prevention of distribution of fictitious interests upon deciding on distribution of profit. 8. As detailed in the Explanatory Note (6-2) according to the Circular 60/1015, dated December 07, 2013 issued by the Central Bank of I.R. of Iran, the reported bank claimed sum of IRR 12,791 billion from the Central Bank of I.R. of Iran by registration of FC obligation in the central Bank’s System, which has been decided to be specially audited. Further, as detailed in the Explanatory Note (6-1) in the late year ended March 2012 in consideration of Approval No. 47698T/M/90-34030, dated January 05, 2012, the FiveMember Committee of FC Issues Organization, the Central Bank withdrawn net sum of IRR 2,537 billion out of the Bank Mellat Account as the differential of the FC Rate which was recorded as the liability account of Central Bank in the books and follow-ups are still in progress to this end. The opinion of our Organization concerning the effect of these provisions of this clause is not qualified. 9. As it is reflected in the Explanatory Note (25-2), according to Article (7) and Clause (1) of Article (9) of the Directive of the amount and procedures of collecting fee for membership in the Deposits Guarantee Fund, subject of Resolution H4837T/100998, dated July 24, 2013, and Amending Resolution No. H49837T/850501, dated March 01, 2015, approved by the Council of Ministers, the bank is liable to the said Fund in consideration of the initial and annual membership fee, for which sum of IRR 175 billion has been paid on-account basis, and sum of IRR 1,704 billion reserve has been recorded in the accounts. 10. As it has been reflected in the explanatory notes (24) and (25), on the strength of the decision of the Tax Dispute Board, indicating accepting the cost of doubtful accounts, the Bank has recorded tax reserves for the years 2011 through 2013 (irrespective of the issued final and assessment tax notices) in 2010, assuming acceptance of the such cost. It is to be noted that bank has bas objected to the assessment and final tax notices issued in the preceding years, and this is being pursued through dispute settlement boards and tax supreme council; nevertheless, no decision has been notified up to date of this report. 11. The entry of receivables from the government (explanatory note 8 of financial statements), including IRR 3,841 billion, is mainly related to the actuary cost prior to privatization of the Bank, water-power participating bonds in the year 2007 and credit facilities from ABC Bank, for which no documentation, indicating they are guaranteed by the government, has been provided to this Organization; hence, the authenticity of classification of the above-said items as a part of receivable due from the government is not proved to this Organization. In consideration of accrued interest concerning receivables in the year 2012, the Bank has considered in the receivables audit report sum of IRR 1,760 billion more than the declared interest. Further, the Bank has calculated and recorded in the accounts of the year 2014 sums of IRR 6,152 billion and IRR 3,968 billion in consideration of accrued interest of receivables for respectively for the years 2013 and 2014, irrespective of rates of initial contracts, according to the Page 4 of 50 Bank Mellat – Financial Statements March 20, 2015
5. interest rates of transactional contracts (15% and 22%), the acceptance of which will be dependant on special auditing. 12. The entry of granted facilities and receivables from other persons, other assets and receivables from the government (explanatory notes (10), (16) and (8) of financial statements), including total sum of IRR 10,464 billion receivable from Tehran Municipality, Tehran Subway Co., Wagon Making Co. (affiliated to the Municipality) and Mashhad Municipal participating bonds, facilities paid to the Municipalities of provinces related to ABC Bank of Bahrain, which despite their being past due, they have been reflected in the current class on the strength of agreement, dated April 10, 2012 with Tehran Municipality. Conducted reviews indicate failure in total execution of the provisions of the said letter of understanding concerning their collection. 13. As detailed in the explanatory note (18-2), Bank Mellat (acting as an agent bank) repayment of liability to the FC Reserve Fund (not offset), facilities granted to the persons which has depreciated, deems subject to collection from the said persons. Opinion of this organization is not qualified due to the effect of the clauses (8) through (13). Report on other Legal Requirements and Regulations of Bank Mellat (Public Joint Stock Co.) Report on other Responsibilities of Legal Inspector 14. Instances of failures in observing binding circular letters and approvals in the banking system in 2014 have been notified to the Central Bank of I.R. of Iran through a separate letter by this Organization. 15. According to the available information, the amount of embezzlement from the Bank during the reported fiscal year amounts to IRR 276 billion, and the collected amounts from the said embezzlement unto the date of this report was IRR 50 billion. It is to be noted that the declared embezzled amount is not in conformity with the books. 16. Detailed statement of calculations related to differential of final profit and investment deposits account disclosed in the Explanatory Note (40) of the financial statements have been audited in compliance with the provisions of Circular No. 126331, dated March 09, 2009 issued by the Central Bank of I.R. of Iran. In this respect, no cases of non-compliance with the provisions of the said Circular were found. 17. Failures in compliance with legal requirements set out in the Commercial Code, as amended and provisions of the Bank’s Articles of Association, are as follows: 17-1. We draw the attention of the shareholders’ general meeting to the financial effects of materials set out in the clauses of this report: 17-2. Following-ups made by the Bank for a resolution at the ordinary general meeting, dated July 21, 2014, the shareholders reached no final result concerning Clauses (4), (9), (20) and (22) of this report. 17-3. Articles of Association of the Bank was approved by the EGM and registered at the Registry of Companies on January 13, 2015; nevertheless, it has not been completely executed in some cases. We draw the attention of the Shareholders’ general meeting to the Article (115) of Articles of Association concerning Max. distribution of profit, i.e., 10%, when adequacy of capital is less than 8%. 18. We reviewed the transactions set out in the Explanatory Note (59-1) reported as the total transactions made subject to Article (129) of the Commercial Code, as amended, during the reported fiscal year, as notified to our Organization by the Board of Directors. Concerning such transactions, the provisions of the above-said article indicating receiving authorization from the board of directors and nonparticipation of the beneficiary manager in voting were observed. Further, this organization found no evidences indicating such transactions were conducted in improper trading conditions and irregular trend of the banking operations. 19. We reviewed the board’s report concerning the activity and general status of the bank, subject of Article (232) of Commercial Code, as amended, which was drawn up to be presented to the Shareholders’ Ordinary General Meeting. To this end, we found no material instances indicating discrepancy of the information set out in the said report with the documents presented by the board of directors. Report on other legal and regulatory responsibilities of the Auditor 20. Executive Directive of disclosure of information of companies registered by the Securities and Exchange Org., set out below, have not been observed: 20-1. provision of reports and financial statements in various points of time during the reported year within due deadlines. 20-2. Total presentation and disclosure of financial statements of the bank as per the sample presented by the Securities and Exchange Org. Page 5 of 50 Bank Mellat – Financial Statements March 20, 2015
6. 20-3 . Provisions of Article (10) of directives internal controls concerning designation of the president of the Audit Committee out of the board members. 21. Entry of investments and partnerships (Explanatory Note 13 of Financial Statements), includs IRR 4,695 billion as the cost price of investment in companies’ shares; the required information in consideration of the status of the said investments was not provided. 22. Toward execution of Article (33) of the Executive Directive of Anti-Money-Laundry by the auditors, we reviewed observance of the provisions set out in the said law and the relevant by-laws and directives, as per the checklists notified by the relevant authority and audit standards. Despite establishment of antimoney laundry unit at bank’s network and carrying out some measures to this end, the provisions of the said law and the applicable directives have not be totally executed in the banking system. Date: July 12, 2014 Audit Organization Mr. Bahram Sadoghianzadeh (Signed) Mr. Mohammad Hossein Khatibzadeh (Signed) Page 6 of 50 Bank Mellat – Financial Statements March 20, 2015
7. In The Name Of God Bank Mellat (Public Joint Stock Co.) Explanatory Notes of the Financial Statements For the Fiscal Year Ended on March 20, 2015 Securities and Exchange Organization Please find attached consolidated financial statements together with financial statements of Bank Mellat concerning fiscal year ended on March 20, 2015. Constituents of the financial statements are as follows: A     B     C   Basic Consolidated Financial Statements of Group: Consolidated balance sheet Consolidated profit and loss statement Accumulated retained profit turnover Comprehensive consolidated profit and loss statement Statement of consolidated cash flow Basic Financial Statements of Bank: Balance sheet Profit and loss statement Retained profit turnover Comprehensive profit and loss statement Statement of cash flow Explanatory Notes: General Information Preparation basis for financial statements Summary of material accounting policies  Notes concerning figures set out in the financial statements & other financial information Page (Original) 2 3 3 4 5 6 7 7 8 9 10 11 11-16 17-67 Consolidated financial statements of group and financial statement of bank Mellat were prepared on the basis of accounting standards and approved by Board of Directors of Bank on July 12, 2015. Board Members Mr. Ali Rastegar Mr. Mostafa Zarghami Mr. Kourosh Madelat Position Board Member & Managing Director Signature Signed Board Member Board Member Signed Signed Page 7 of 50 Bank Mellat – Financial Statements March 20, 2015
8. Bank Mellat (Public Joint Stock) Consolidated Balance Sheet as at March 20, 2015 Assets Cash Receivables from the Central Bank Receivables from banks & credit institutes Receivables from the government Granted facilities & Receivables from the governmental sector Granted facilities & Receivables from the other persons Debtors concerning FC L/Cs and time drafts Participating bonds & other similar bonds Investments & partnerships Fixed tangible assets Intangible assets Other assets Items in transit Total Assets Obligations Obligations for L/Cs Obligations for guarantees Other obligations Administered funds & similar cases 5 6 March 20, 2015 Million Rials 22,056,529 160,214,833 Restated March 20, 2014 Million Rials 20,249,716 108,833,625 7 104,438,026 8 53,212,718 9 Note 263,819,958 Liability to the central bank Liability to banks & credit institutes 18 19 145,869,160 Sight deposits 20 207,558,461 44,382,694 Saving deposits & similar items 21 56,831,768 59,373,961 244,446,078 277,432,621 Time investment deposits 22 622,647,090 540,182,946 10 661,184,765 568,940,692 Other deposits 23 54,605,112 63,032,161 11 13,157,925 25,022,038 Payable tax 24 2,327,390 1,825,318 12 16,463,031 14,100,479 Reserves & other liabilities 25 87,944,636 72,886,485 13 14 15 16 17 37,662,540 47,163,761 3,469,657 104,514,126 0 34,383,359 43,024,799 2,516,526 109,270,380 5,703,491 Liability for accepting L/Cs & timed FC drafts Payable divided Reserve for personal termination benefits Items in transit Total Liabilities Shareholder’s Equity: Capital On-account capital increase Parent company’s shares owned by the subsidiary company Reserves Subsidiary companies capital – out of reassessment surplus Difference of conversion of FC assets & liabilities Accumulated profit (loss) 26 27 28 17 13,358,299 1,764,658 6,407,802 26,188,014 1,386,525,680 25,403,084 124,024 5,021,282 0 1,319,602,893 29 40,000,000 0 33,100,000 7,013,705 30 (1,575,017) (1,406,993) 31 16,783,320 12,766,085 32 420,484 306,777 33 3,580,406 20,246,158 3,736,755 22,522,990 79,455,351 2,002,958 81,458,309 1,467,983,988 78,039,319 2,087,367 80,126,686 1,399,729,579 49,953,647 142,536,792 269,514,606 2,637,477 464,642,523 64,241,431 142,289,255 251,124,007 2,831,756 460,486,449 1,467,983,988 1,399,729,579 49,953,647 142,536,792 269,514,606 2,637,477 464,642,523 64,241,431 142,289,255 251,124,007 2,831,756 460486449 Total parent co. shareholders’ equity Minority share Total shareholders’ equity Total liabilities & shareholders’ equity Obligations Party to obligations due to L/Cs Party to obligations due to guarantees Party to other obligations Party to the administered funds & similar cases Note Restated March 20, 2014 Million Rials 234,759,523 53,179,150 March 20, 2015 Million Rials 251,491,067 55,401,382 56 Liabilities & Equities 34 56 Explanatory Notes Constitute an Integral Part of the Financial Statements Page 8 of 50 Bank Mellat – Financial Statements March 20, 2015
9. Bank Mellat (Public Joint Stock Co.) Consolidated Profit & Loss Statement for the Fiscal Year Ended on March 20, 2015 Note Million Rials A- Income due from Joint Activities Profit due from granted facilities Sales of goods & earning due from providing services Profit due from investments and deposits Total joint incomes Less: Cost price of sold goods and rendered services On-account interest of investment deposits (deficit) surplus payment to depositors Interest - depositor’s share Interest – bank’s share and attorney’s fee B- Non-Joint Incomes Received profit & retention money Received commission Other incomes Total non-joint income Total Bank’s income 35 36 37 38 39 40 41 42 43 127,220,012 63,293,415 21,253,165 11,907,819 96,454,399 (122,838,652) 4,381,360 (18,580,857) (59,267,694) (0) (77,848,551) 18,605,848 65,731,182 70,112,542 27,465,005 13,778,422 13,128,180 54,371,607 72,977,455 (53,806,457) 16,306,085 (1,463,148) 14,842,937 164,248 376 (26,556,289) (10,935,213) (300,000) (10,112,648) (781,510) (48,685,660) 24,291,795 (2,313,763) 21,978,032 279,054 566 77,723,297 30,451,848 19,044,867 (27,427,031) (95,411,621) (0) 43,832,998 18,372,567 3,525,617 C- Expenses Admin, & general expenses 44 (27,671,233) Doubtful accounts expenses 45 (5,122,150) Personnel’s retirement expenses (actuary) 46 (0) Financial expenses 47 (15,297,982) Other expenses 48 (5,715,092) Total Bank expenses Pre-tax profit Less: Tax Net Profit Minority share Basic earnings per share – IRR (with a capital of IRR 40,000,000 million) 51 Turnover of Consolidated Retained Profit Account Net profit Opening retained profit 20,771,692 Yearly adjustments 49 2,115,835 Opening retained profit – adjusted Approved dividend Profit available for appropriation Appropriation of Profit Legal reserve Transfer to the parent company’s account Million Rials Restated March 20, 2014 Million Rials March 20, 2015 14,842,937 22,887,527 37,730,464 (13,200,000) 24,530,464 21,978,032 12,441,152 4,611,984 17,053,136 39,031,168 (5,296,000) 33,735,168 (4,102,517) 20,427,947 181,790 20,246,158 (3,947,641) (6,900,000) (10,847,641) 22,887,527 364,537 22,522,990 (4,102,517) (0) Year-end retained profit Minority share out of retained profit Retained profit – attributable to shareholder of parent company Explanatory notes constitute an integral part of the of financial statements Page 9 of 50 Bank Mellat – Financial Statements March 20, 2015
10. Bank Mellat (Public Joint Stock Co.) Consolidated Comprehensive Profit & Loss Statement for the Fiscal Year Ended on March 20, 2015 Note Net profit Surplus of reassessed fixed tangible assets Differential of conversion of financial statements of branches abroad 33 Comprehensive profit of the fiscal year Annual adjustments 49 Comprehensive profit (loss) recognized as of the date of preceding period reporting Minority share due from fiscal year comprehensive profit March 20, 2015 Million Rials Restated March 20, 2014 Million Rials 14,842,937 21,978,032 113,707 0 (156,349) 3,195,328 14,800,295 25,173,360 2,115,835 4,611,984 16,916,130 29,785,344 164,248 163,377 Explanatory notes constitute an integral part of the of financial statements Page 10 of 50 Bank Mellat – Financial Statements March 20, 2015
11. Bank Mellat (Public Joint Stock Co.) Consolidated Cash Flow Statement for the Fiscal Year Ended on March 20, 2015 Note March 20, 2015 Million Rials Million Rials Restated March 20, 2014 Million Rials Operating Activities Net in-flow of cash funds due from operating activities 52 27,500,257 18,769,509 Return on investments & paid profit in consideration of financing Paid dividend Dividend to minority shareholders (11,025,168) (6,912,045) (534,198) (415,701) Net cash out-flow due to investments return & paid-up profit due to financing (11,559,366) (7,327,746) (5,288,949) (3,025,448) Income Tax Paid-out income tax Investment Activities Payments due to investments (9,931,121) Received funds due from sales of investments Payments due to purchase of tangible & intangible fixed assets Received funds due from selling tangible fixed assts (1,982,691) 1,300,276 466,159 (2,901,408) (6,048,742) 376,983 840,391 Net cash outflow due to investment activities (11,155,270) (6,724,883) Net cash outflow prior to financing activities (503,328) 1,691,432 Financing Activities Net repayment of facilities from banks abroad Net received facilities from other banks by the group companies Changes in parent company’s shares owned by subsidiaries (12,481) (35,086) 49,134 1,670,520 (168,024) (99,964) Net cash in-(out)flow due from/to financing activities (131,371) 1,535,470 Net Decrease in Cash Fund (634,699) 3,226,902 Opening cash balance 53 26,214,893 22,987,991 Year-end cash balance 53 25,580,194 26,214,893 Non-cash transactions 54 4,575,267 3,311,766 Explanatory notes constitute an integral part of the of financial statements Page 11 of 50 Bank Mellat – Financial Statements March 20, 2015
12. Bank Mellat (Public Joint Stock) Balance Sheet on March 20, 2015 Assets Note Restated March 20, 2014 Million Rials 14,980,894 108,833,625 Cash balance Receivables from the Central Bank Receivables from banks & credit institutes 5 6 March 20, 2015 Million Rials 15,666,708 160,214,833 7 105,002,834 145,654,680 Receivables from the government 8 53,212,718 44,382,694 Granted facilities & Receivables from the governmental sector Facilities granted to group member companies Granted facilities and receivables from other persons Debtors concerning FC L/Cs and time drafts Participating bonds & other similar bonds Investments & partnerships March 20, 2015 Million Rials 251,491,067 54,945,387 208,730,164 Restated March 20, 2014 Million Rials 234,759,523 52,772,289 266,956, 078 Liability to the central bank Liability to banks & credit institutes 18 19 Sight deposits 20 Saving deposits & similar items 21 56,831,835 60,150,743 Time investment deposits 22 624,831,520 541,924,951 Other deposits 23 43,037,486 50,659,692 Payable tax 24 1,669,031 747,510 244,446,078 277,432,621 10 14,800,949 14,626,160 10 659,350,208 566,313,057 11 13,157,925 25,022,038 Reserves & other liabilities 25 86,530,662 71,261,496 12 14,194,139 16,227,620 Liability for accepting L/Cs & timed FC drafts Payable divided Reserve for personal termination benefits Items in transit 26 13,358,299 25,403,084 27 28 73,811 6,172,663 29,355 4,868,100 17 26,188,014 0 1,373,859,940 1,309,532,822 31 40,000,000 0 15,240,229 33,100,000 6,900,000 11,585,953 33 2,077,265 1,899,599 18,806,786 76,124,280 17,339,910 70,825,462 1,449,984,220 1,380,358,284 49,953,647 142,536,792 269,514,606 64,241,431 142,289,255 251,124,007 2,637,477 2,831,756 464,642,523 460,486,449 13 24,859,671 21,897,422 14 41,980,727 39,552,896 Intangible assets Other assets Items in transit 15 16 17 3,020,426 100,077,004 0 2,379,268 97,351,818 5,703,491 Total Assets Administered funds & similar cases Note 9 Fixed tangible assets Obligations Customers’ obligations due to L/Cs Obligations due to guarantees Other obligations Liabilities & Equities 56 1,449,984,220 1,380,358,284 49,953,647 142,536,792 269,514,606 64,241,431 142,289,255 251,124,007 2,637,477 2,831,756 464,642,523 460,486,449 Total Liabilities Shareholder’s Equity: Capital On-account Capital increase Reserves Difference of conversion of financial statements of branches abroad Accumulated profit Total shareholders’ equity Total liabilities & shareholders’ equity Obligations: Bank’s obligations due to L/Cs Bank’s obligations due to guarantees Other Bank’s obligations Party to the administered funds & similar cases 29 56 Explanatory Notes Constitute an Integral Part of the Financial Statements. Page 12 of 50 Bank Mellat – Financial Statements March 20, 2015
13. Bank Mellat (Public Joint Stock Co.) Bank Profit & Loss Statement for the Fiscal Year Ended on March 20, 2015 Note A- Income due from Joint Activities Profit due from granted facilities Profit due from investments and deposits Total joint incomes Less: On-account interest of investment deposits (Deficit) Surplus payment to depositors Interest – depositors’ share Interest – bank’s share and attorney’s fee income B- Non-Joint Incomes Received profit & retention money Received commission Other incomes Total non-joint income Total income 35 37 39 40 41 42 43 C- Expenses Admin, & general expenses Doubtful accounts expenses Personnel’s retirement expenses (actuary) Financial expenses Other expenses Total expenses Pre-tax profit Less: Tax Net Profit 44 45 46 47 48 Basic earnings per share – IRR (with a capital of IRR 40,000,000 million) March 20, 2015 Million Rials Million Rials 77661690 23,683,818 101,345,508 64,081,789 11,112,095 75,193,884 (95,735,206) 5,610,302 (59,471,196) (0) (59,471,196) 15,722,688 64,932,066 70,542,368 27,465,506 13,778,487 9,781,075 51,025,068 66,747,756 (51,364,773) 19,177,595 (874,140) 18,303,455 (26,603,516) (11,156,311) (300,000) (10,034,891) (758,879) (48,853,596) 17,894,160 (1,101,780) 16,792,380 458 420 18,303,455 17,339,910 35,643,365 (13,200,000) 22,443,365 16,792,380 11,846,451 4,236,156 16,082,607 32,874,987 (5,296,000) 27,578,987 (3,636,579) 18,806,786 (3,339,076) (6,900,000) (10,239,076) (17,339,910) (95,735,206) (0) 43,833,497 18,371,270 2,727,299 (27,062,698) (4,960,343) (0) (13,673,439) (5,668,293) 51 Turnover of Accumulated Profit Account Net profit Opening retained profit Annual adjustments Opening retained profit – adjusted 49 14,837,776 2,502,134 Approved dividend Profit available for appropriation Appropriation of Profit Legal reserve Transfer to capital account as per approval of the Bank’s Meeting March 20, 2014 Million Rials (3,636,579) (0) Year-end retained profit Explanatory notes constitute an integral part of the of financial statements Page 13 of 50 Bank Mellat – Financial Statements March 20, 2015
14. Bank Mellat (Public Joint Stock Co,) Bank Comprehensive Profit & Loss Statement for the Fiscal Year Ended on March 20, 2015 Note Net profit Differential of conversion of financial statements of branches abroad Restated Year ended on March 20, 2014 Million Rials 18,303,455 16,792,380 177,666 1,653,078 18,481,121 18,445,458 2,502,134 4,236,156 20,983,255 22,681,614 33 Fiscal year comprehensive profit Annual adjustments Year ended on March 20, 2015 Million Rials 49 Comprehensive profit (loss) recognized as of the date of preceding period reporting Explanatory notes constitute an integral part of the of financial statements Page 14 of 50 Bank Mellat – Financial Statements March 20, 2015
15. Bank Mellat (Public Joint Stock Co,) Cash Flow Statement for the Fiscal Year Ended on March 20, 2015 Note Operating Activities Net cash inflow due from operating activities March 20, 2015 Million Rials Million Rials 52 Return on investments & paid-out profit in consideration of financing Paid-out dividend 19,070,542 16,920,314 (13,155,544) (7,295,866) (7,295,866) (3,847,063) (5,967,556) (3,105,893) (1,037,958) (3,321,345) 36,330 (3,285,015) 371,877 (12,481) (35,086) (35,086) (1,050,439) 20,240,811 19,190,372 336,791 19,904,020 20,240,811 (13,155,544) Net cash out-flow due to return on investments and paid-out profit in consideration of financing Income Tax Paid-out income tax Restated March 20, 2014 Million Rials Investment Activities (3,487,160) 381,267 Payments due to purchase of fixed tangible & intangible assets Received payments due from selling fixed tangible assts Net cash out-flow due to investment activities Net cash in-(out)flow prior to financing activities Financing Activities Net repayment of facilities from the banks abroad Net cash out-flow due to financing activities Net (Decrease) Increase in Cash Fund Opening cash balance Year-end cash balance (12,481) 53 53 Explanatory notes constitute an integral part of the of financial statements Page 15 of 50 Bank Mellat – Financial Statements March 20, 2015
16. Bank Mellat (Public Joint Stock Co.) Consolidated Financial Statements of the Group & Bank for the Fiscal Year Ended on March 20, 2015 History of the Bank’s Activities 1-1 General Information The group includes Bank Mellat (Public Joint Stock Company) and its subsidiaries. Bank Mellat was formed on July 22, 1980, by virtue of the Enactment, dated May 19, 1980 of General Meetings of Banks through merger of Banks: Tehran, Daryoush, Iran International, Farhangian, Iran Insurance, Pars, Foreign Trades, Iran and Arab, Cooperative Credit and Distribution, and registered at the Department for Registration of Companies under No, 38077, and on the strength of resolutions adopted at the Extraordinary General Meeting of Banks, held on April 06, 2008 and Enactment No, T/68985, dated July 24, 2007, approved by the Board of Ministers, the legal status of the Bank was changed to “Public Joint Stock” and on February 11, 2009 it was the first public bank listed on the signboard of Tehran Securities Exchange Market, in the section of banks and credit institutes and other public monetary institutes, and on February 19, 2009, 5% of its shares were offered at the Securities Market to discover the prices; and at present, 19.05% of its shares is owned by the Government, 30% is owned by Provinces Investment Companies, and the remainder is owned by the private and non-governmental sectors. 1-2. Major Activities Object of activity of bank, as per provisions of Article (2) of the Articles of Association, is engagement in banking operations as per Iranian monetary and banking regulations and subsidiary companies are mainly engaged in banking, leasing, investment, exchange, design and production of computer software and provide maintenance services concerning produced software, as detailed in Note (13-3). 1-3. Number of Branches: The Branches of the Bank are as follows: BRANCHES Branches at Tehran Province Branches in other Provinces Branches in Free Zones Branches Abroad Total March 20, 2015 290 1,303 9 4 1,606 March 20, 2014 296 1,328 9 4 1,637 1-4. Number of Employees: Average number of permanent and provisional personnel during the fiscal period is as follows: DESCRIPTION A) Bank: Head Office Tehran Province Branches Branches of Other Provinces Total B) Subsidiary Companies Total March 20, 2015 March 20, 2014 2,844 4,304 15,330 22,478 6,351 28,829 2,469 4,434 15,254 22,157 5,783 27,940 2. Basis for Preparation of Financial Statements 2-1. Basis for Preparation of Financial Statements Consolidated financial statements of group and Bank Mellat have been basically prepared on historical cost price basis, and “current values” has also been used where necessary. 3. Fundamentals of Consolidation 3-1. Consolidated financial statements were resulted from accumulation of the Bank’s financial statements items and those of subsidiaries subject to consolidation, after exclusion of in-group transactions and balances and unrealized profit and loss due to transactions among them. The subsidiaries have been disclosed in the Note (13-3) and their fiscal year ends in March 20. 3-2. Concerning companies acquired during the period, the results of operations thereof as of the date whose control is effectively transferred to the parent company and concerning assigned subsidiary companies, the result of operations thereof until such assignment are recorded in the consolidated profit and loss statement. Page 16 of 50 Bank Mellat – Financial Statements March 20, 2015
17. 3-3 . Shares of the parent company acquired by the subsidiary companies are recorded at the cost price in the accounts and are reflected as contra equity under the entry of “parent company’s shares owned by the subsidiary companies in the consolidated balance sheet. 4. Summary of Significant Accounting Policies 4-1. Inventory of Goods & Materials Inventory of goods and materials is assessed on basis of lower of cost and net sales value of either one of the items. Where the cost price is greater than the net sales price, then, the differential will be recognized as the reserve of impairment of the inventory. Cost price of inventory is determined applying the following procedures: APPLIED METHODS Raw materials and packaging Goods in progress Finished goods Spare parts & accessories Inventory at hotel reception halls Moving weighted average and FIFO Weighted average Weighted average Specific identification & Moving weighted average FIFO 4-2. Investments ASSESSMENT METHOD Long-Term Investments: Investment in subsidiaries subject to consolidation Consolidation Investment in affiliates Net value Other long-term investments: Cost price (Less: Reserve for accumulated impairment in investment value) Current Investments: Marketable investments CONSOLIDATED GROUP PARENT COMPANY Cost price (Less: accumulated impairment in investment value) Cost price (Less: accumulated impairment in investment value) Cost price (Less: accumulated impairment in investment value) Lower of cost and net sales value of total investments Lower of cost and net sales value of either investment Lower of cost and net sales value of total investments Lower of cost and net sales value of either investment Recognition of Earning: Investment in subsidiaries subject to consolidation Consolidation Investment in affiliates Equity method Long-term investments and current investments Upon approval of profit by the general meeting of shareholder of investee company (up to the date of approval of balance sheet) Upon approval of profit by the general meeting of shareholder of investee company (up to the date of approval of financial statements) Upon approval of profit by the general meeting of shareholder of investee company (up to the date of approval of financial statements) Upon approval of profit by the general meeting of shareholder of investee company (up to the date of approval of balance sheet) Other current investments 4-3. Fixed Tangible Assets 4-3-1. Fixed tangible assets, except for the items set out in the Note 4-3-2, are reflected in the accounts on the basis of cost price. Renovation and major repairs expenditures that may cause significant increase in capacity or useful life of the fixed assets or basic renovation in return quality thereof are considered as capital expenditure and will be depreciated during remained part of useful life. Maintenance expenses and slight repair charges spent from standards of basic assessed operations of assets for maintenance and repair of expected economic resources of commercial unit shall be considered as current expenses and will be recorded in the profit and loss statements of the period, when realized. 4-3-2. Toward execution of Article (62) of Third Development Plan, the land and building of the Bank on March 20, 2005 was recorded in the statements on the basis of restated price and for IRR 11,543 billion, and the surplus amount of said restated amount, for IRR 10,637 billion was recorded in the account of “government’s increased capital in the bank” according to the said regulations. Page 17 of 50 Bank Mellat – Financial Statements March 20, 2015
18. Further , with respect to requirements of the Executive Directive – Part (B) of Clause (78) of Iranian Budget Act 2011, Bank Mellat reassessed the land and building sites of all of its owned properties and recorded sum of IRR 13,100 billion out of such reassessment. 4-3-3. With respect to the Enactment of 1077th Meeting of Money & Credit Council, held on February 17, 2007, the depreciation of fixed assets, have been calculated based on the rates and methods as per the Depreciations Table, subject of Article (151) of Direct Tax Act, since 2006. ASSET Building & Installation Vehicles Computer Systems Software Computer Hardware (P.C) ATM POS Furniture & Fittings Sorter Telecommunication Equipment Module DEPRECIATION RATE 7% 25% 5 years 3 years 5 Years 5 Years 10 Years 6 Years 3 Years 4 Years DEPRECIATION METHOD Accelerated Method Accelerated Method Straight Line Method Straight Line Method Straight Line Method Straight Line Method Straight Line Method Straight Line Method Straight Line Method Straight Line Method Depreciation of the Bank’s reassessed buildings on March 20, 2005 is calculated at the rate of 3.5% using accelerated method as per Note (10) of the Depreciations Directive, subject of Article (151) of Direct Tax Act. 4-3-4. Depreciation of fixed assets of subsidiaries is calculated according to Article (151) of Direct Tax Act and at the rates and methods as follows: ASSETS Building Installations Installations Machinery Machinery Vehicles Furniture & Fixtures Tools Tools Software (Intangible Asset) DEPRECIATION RATE 7, 8, 10, 12 percent 10, 12, 15 percent 10 & 15 Years 10, 12, 15, 25, 30 & 35 percent 4, 8, 10 & 15 Years 20, 25, 30 & 35 percent 3, 5, 10 Years 10, 15 & 25 percent 1, 4, 8, 10 & 20 Years 3 & 4 Years DEPRECIATION METHOD Accelerated Method Accelerated Method Straight Line Method Accelerated Method Straight Line Method Accelerated Method Straight Line Method Accelerated Method Straight Line Method Straight Line Method 4-4. The Key-Money of the Commercial Entities of the Bank Toward execution of provisions of Article (62) of Third Development Plan, the Key-Moneys of the Bank’s commercial entities in 2004 have been recorded in the in the books on the basis of reassessed prices. Further, regarding that as per the Enactment of 1077th Meeting of the Money & Credit Council, depreciation of the Bank’s assets is conducted as per depreciations table, subject of Article (151) of Direct Tax Act; therefore, no depreciation is calculated as of March 21, 2006. 4-5. Consolidated Key-Money Accounting for combination of commercial entities in terms of acquiring type is carried out on the basis of purchase method. Surplus amount of cost price of acquiring investment in subsidiaries subject to consolidation, and affiliates subject to applying equity method concerning the group’s share out of net fair value of assets and recognizable liabilities thereof at the time of acquiring is recognized as key-money and is depreciated during 20 years through straight line. The key-money due to acquiring affiliated companies is reflected in the consolidated balance sheet as a part of book value of the long-term investment in the affiliated companies. 4-6. Recognition of Bank’s Income With respect to the Circular Letter No, 772/MB, dated July 18, 2005, issued by the Central Bank’s Dept, of Baking Studies & Regulations and on the strength of Enactment of the Meeting No, 1044, dated July 16, 2005 of the Money and Credit Council, the Bank’s incomes have been calculated through accrual method and have been reflected in the financial statements. Page 18 of 50 Bank Mellat – Financial Statements March 20, 2015
19. Based on the said method , the recognition method of the Bank’s incomes are as detailed below: Type of Income Profit of granted facilities Recognition Method Based on duration and with respect to balance of principal facility and minimum expected profit Based on duration and with respect to amounts of outstanding installments and due delay rate Pro rata duration Upon rendering services Delay penalties of repayment of facilities installments Commission of issued guarantees Commission of other banking services 4-7. Basis of Designation of Joint Profit –Share of Depositors Toward execution of Usury-Free Banking Operations Act, approved on August 30, 1983, and executive by-laws and directives of the said Act and with respect to the Circular Letter No. 1799/MB, dated January 08, 2004 issue by the Central Bank of I.R. of Iran, the earning due from the activities related to the granting financial facilities are recognized as investment in the shares and participating bonds as per accounting policies applied by the Bank, and it is deemed as joint earning with depositors, and the shares of depositors are designated in proportion to application of their net resources in the said activities. 4-8. Conversion of Foreign Currency (FC) 4-8-1. Local Accounts Monetary FC items are converted at the date of balance sheet and non-monetary items which have been recorded at the historical cost price and in terms of registered FC are converted at the rate of creation date at the date of transaction. The remainder of outstanding and doubtful receivables is converted at the date of balance sheet at the exchange FC rate and an equivalent reserve for the same as differential of the FC Conversions in arrears. The differentials due from settlement with Conversion of Monetary FC Items as recognized as earning and/or the cost of realization period. The differential of conversion of FC assets and liabilities of branches abroad is reported in the comprehensive profit and loss statement. 4-8-2. Entities Abroad All monetary and non-monetary items (except for shareholders equity) of the branches and units abroad are converted at the market rate on the date of balance sheet and shareholders equity are converted at market rate on the date of creation (historical rates). Profit and loss items are converted during the period at the average market rate. The differentials due to conversion of financial statements of the said units are reflected under the entry of shareholders’ equity. 4-9 Classification of Receivables Bank’s granted facilities are classified in one the following classes based on the Directive of classification of credit institutes, approved by Money and Credit Council, subject of Circular No. 2823/MB, dated February 24, 2007, served by Banking Studies and Regulations Dept. of the Central Bank of I.R. of Iran, with respect to the factors of payment delay, customer’s financial status and status and conditions of customer’s activity field. 1. Current class (Max. 2 months passed the maturity date) 2. Passed due date class (between 2 to 6 months passed the maturity date) 3. Arrears class (between 6 to 18 months passed the maturity date) 4. Doubtful account class (exceeding 18 months passed the maturity date) 4-10. Reserve for Doubtful Accounts Doubtful accounts, as per the Directive, approved by the meetings set out in Clause (4-10) of Money and Credit Council, are calculated and reflected in the accounts as detailed below: 4-10-1. General Reserve as of March 21, 2006, is calculated equal to 1.5% (until 20 March 2006: 2%) of the total balance of facilities, except for the facility balance for which particular reserve is considered. 4-10-2. Particular reserve concerning the balance of overdue classes and thereafter, which lack security coverage, is calculate as detailed below: DESCRIPTION Overdue class facilities (up to 2 months) Outstanding Class Facilities (up to 6 months) Doubtful account class facilities, with respect to customer’s solvency (up to 18 months) Facilities with overdue repayment of principal and interest for 5 years or longer Page 19 of 50 Bank Mellat – Financial Statements March 20, 2015 % OF RESERVE 10% 20% 50 – 100% 100 %
20. 4-10-3 . By virtue of Circular No. 21270/91, date April 19, 2012, issued by the Central Bank, for the facilities with maturity date of principal and interest elapsed for more than five years, the total facility balances thereof, without deducting the securities, have been considered the basis of appropriated surplus. 4-11. Reserve for Personnel Termination Benefits Reserve for Personnel Termination Benefits is reflected in the accounts based on the one last month fixed salary and continuous allowances in return for each year of their service. 4-12. Reserve for Redemption of Personnel Leave of Absence Concerning the accumulated leave of absence of personnel in consideration of previous years and current year, the required reserve based on 9 days of salary and allowances per year has been calculated and reflected in the account. 4-13. Obligations of Retirement Benefits Current value of obligations of retirement benefits in relation to severance pay of personnel (including employed, retired employees and pensioners subject to retirement scheme) are calculated on the basis of actuary’s assumptions. 4-14. Receivables from the Government Withholding granted facilities, which have been granted based on the guarantee of State Management and Planning and Deputy of Strategic Supervision of President, and are classified as receivables from the government under the following conditions: A. Granted facilities, outstanding due to inability of loan-taker in returning the same, inadequacy of the relevant securities, or ineffectiveness of Bank’s actions for collecting the same. B. Granted facilities of passed due date, related to execution of plans of taking possession of capital assets. C. Facilities granted to Ministries and Governmental Institutes. D. All accelerated obligations and liabilities for the period when the government was a shareholder are related to preprivatization. 5- Cash Balance Cash balance is constituted of following items: Group Cash balance Cash in transit / IRR Cash in transit / FC Bank notes & FC cash March 20, 2015 Million Rials 9,432,381 17,529 33,593 12,573,027 22,056,529 Bank March 20, 2014 Million Rials 9,372,123 18,856 1,130 10,857,607 20,249,716 March 20, 2015 Million Rials 7,747,580 17,529 33,593 7,868,006 15,666,708 March 20, 2014 Million Rials 6,997,113 18,856 1,130 7,963,794 14,980,894 5-1- The cash balance of the branches and the fund in transit are sufficiently insured against theft and accidents. 6- Receivables from the Central Bank Receivables from the Central Banks are as follows: Bank Current account at the Central Bank Legal deposit at the Central Bank Legal deposit of entities abroad Current account at the Local Central Bank (Branches Abroad) Sight FC Deposit at the Central Bank Prepayment to purchase FC at the Central Bank Receivables due to from the Central Bank in consideration of public deposits Central Bank’s liability due to withdrawal from the accounts Receivable due from the Central Bank in consideration of SHAPARAK transactions Receivable due from the Central Bank in consideration of FC obligations Addressee of Central Bank’s notice Less: Prepayment to FC purchase from the Central Bank 6-1 6-2 March 20, 2015 Million Rials 2,984,864 94,423,328 185,709 254,797 454,219 2,205 887,703 2,537,107 29,480,461 29,006,646 0 (2,205) 160,214,833 March 20, 2014 Million Rials 7,588,679 95,748,208 222,357 277,540 2,386,715 2,205 3,968 2,537,107 0 0 69,051 (2,205) 108,833,625 6-1- In consideration of Resolution No. 47698T/M/90-34030, dated January 05, 2012, approved by 5-Member FC Issues Organization Committee, the Central Bank withdrew net sum of IRR 2,537 billion as the FC rate differential from Bank Mellat’s account, which has been recorded in the books in the Central Bank’s account. The Bank is following up to collect the said amount. Page 20 of 50 Bank Mellat – Financial Statements March 20, 2015
21. 6-2- Pursuant to the Circular No . 60/1015, dated December 07, 2013 issued by the Central Bank of I.R. of Iran concerning Bank Mellat’s FC obligations in consideration of L/Cs and FC drafts, sum of IRR 25,874 billion was reflected in the account of receivables from the Central Bank and sum of IRR 13,083 billion was reflected in the account of the liability to the said Bank (under title of facilities received out of FC reserve account (Explanatory Note 18), and as a result sum of IRR 12,791 billion was reflected in the account of the result of local FC transactions in consideration of differential of reference and transactional FC rate (net cost due to translation of FC reflected in the explanatory note 48). 6-3. The legal reserve deposited at the Central Bank has been calculated toward execution of Clause (3), Article (14) of Monetary and Banking Law, and based on the rates designated by the Money and Credit Council, and has been approved by the Central Bank; The said legal reserve is as follows: Rate (%) 13.5 13.5 10 13.5 13.5 13.5 Short-term & 1-year deposits Sight deposits Interest-free savings deposits 2 to 5-year long-term deposits Guarantee and housing-purchase deposits Advances due from L/Cs March 20, 2015 Million Rials 53,106,531 18,901,688 3,572,607 15,408,775 1,035,139 2,398,588 94,423,328 March 20, 2014 Rate (%) Million Rials 15 & 16 48,501,939 17 27,186,602 10 3,827,744 10 & 12 & 13 12,629,598 17 1,196,672 17 2,405,653 95,748,208 7- Receivables from Banks & Credit Institutes The amounts reflected in the above-said entry are constituted of the following items: Group Balance at local banks after clearing Sight FC deposits 7-1 Time FC deposits Loan and credit granted to Iranian banks Bank cheques in the process of collection Short-term deposits at banks General investment deposit certificate of other banks Nightly inter-bank facilities Receivable profit for short-term deposits Interest-free savings deposits Less: General reserve of doubtful accounts Bank March 20, 2015 Million Rials 465,903 63,225,826 2,230,367 0 12,409,265 2,182,407 4,541,061 16,793,000 2,390,197 200,000 104,438,026 March 20, 2014 Million Rials 826,175 61,148,732 2,141,485 3,074 32,996,396 25,120,425 3,042,920 20,590,000 0 0 145,869,206 March 20, 2015 Million Rials 465,903 63,790,634 2,230,367 0 12,409,265 2,182,407 4,541,061 16,793,000 2,390,197 200,000 105,002,834 March 20, 2014 Million Rials 120,914 61,639,513 2,141,485 3,074 32,996,396 25,120,425 3,042,920 20,590,000 0 0 145,654,727 (0) 104,438,026 (46) 145,869,160 (0) 105,002,834 (46) 145,654,680 7-1- Sight FC deposits are kept at Local and foreign banks, which are used in the Local and foreign banking operation. The open figures of the baking statements are related to FC deposits at Local banks are mainly related to failure in disposition of the relevant instruments by the branches due to lack of supply of FC by the Central Bank. 8- Receivables from the Government Receivables from the Government are as follows: Bank Principal Million Rials 17,714,759 995,416 9,437,428 28,147,603 Interest Million Rials 21,924,822 0 20,965,763 42,890,585 Balance Million Rials 39,639,581 995,416 30,403,191 71,038,188 Restated March 20, 2014 Balance Million Rials 32,810,113 892,582 21,570,357 55,273,051 (0) (321,085) 27,826,518 (17,015,123) (489,261) 25,386,200 (17,015,123) (810,346) 53,212,718 (10,274,916) (615,442) 44,382,694 March 20, 2015 Receivables from Government at Central Dept. Receivables from Government in FC for ABC Bank of Bahrain Receivables from Government at Branches & General Treasure Less: Profit of future year note facilities, secured by the Government General reserve for doubtful debts Page 21 of 50 Bank Mellat – Financial Statements March 20, 2015
22. 8-1- Sum of IRR 32 ,027 billion of receivables due from the Government at the central department is as follows: Bank Ahvaz Sugar Lump & Sugar Treatment Outstanding profit of withholding facilities Deficit of operation tax reserve for the years 2006-2008 Flood and earthquake sufferers – share of Bank Saderat Facilities to the married 1988 - share of Bank Saderat Earthquake striking north and northwest of Iran - share of Bank Saderat Relief to flood and earthquake sufferers – Bank Melli Salary to prisoners of war for their captivity period Liability to Privatization Org. Principal Million Rials 31,657 0 0 703 59 March 20, 2015 Interest Million Rials 39,149 18,958,745 2,926,928 0 0 Balance Million Rials 70,806 18,958,745 2,926,928 703 59 March 20, 2014 Balance Million Rials 112,074 12,877,204 2,926,928 703 59 8,946 0 8,946 8,946 802 128,000 9,932,507 10,102,674 0 0 0 21,924,822 802 128,000 9,932,507 32,027,496 802 128,000 12,786,706 28,841,422 8-2- Turnover of Receivables Account from the Government Year 2010 2011 2012 2013 2014 2015 Opening Balance Million Rials 16,289,516 14,738,337 34,039,106 28,739,126 34,532,071 55,273,051 Debit Turnover Million Rials 91,882,451 23,052,019 15,243,397 28,729,042 28,891,950 37,126,434 Credit Turnover Million Rials 93,433,629 3,751,251 20,543,377 22,936,097 8,150,970 21,361,296 Closing Balance Million Rials 14,738,337 34,039,106 28,739,126 34,532,071 55,273,051 71,038,188 8-3- According to the Resolution No. 45251/150061, dated September 21, 2011, approved by the Council of Ministers, in consideration of assignment of shares for IRR 5,292 billion, title of shares of some companies for IRR 4,231 billion were transferred. 8-4- According to Resolution No. 48485T/262656, dated March 18, 2013, approved by the Council of Ministers, concerning the government’s liability to the banks, upon calculating the government’s previous amounts and assignments via shares, the government’s properties and assets and those of the public companies, at the discretion of the Minister of Economic Affairs and Finance, have to be settled applying the method and pricing procedures approved by the assignment Board, toward execution of clause (24-3) and Part (C) of the Clause (24-3-4) of the Iranian Budget Law for the Year 2012. Despite conclusion of collective contract No. 90/2/11422 with the Privatization Org. concerning transfer of titles of the shares of some companies, the provisions of the said contract has not been executed. Therefore, out of IRR 12,139 billion of the bank’s receivables due from the Government, shares for IRR 2,756 billion has been transferred and IRR 9,383 billion out of assignment of the shares of the preceding years has not been settled and the relevant proprietary rights have not been allocated to the bank in this respect; therefore, the receivables and sum of IRR 2,364 billion of the relevant profit, up to the settlement date, are reflected in this entry. 8-5- According to the Resolution No. 48485T/262656, dated March 18, 2013, approved by the Council of Ministers, out of sum of IRR 9,808 billion, sum of IRR 530 billion shares has been transferred and sum of IRR 9,279 billion of assignable shares of public companies has been allocated to the Bank through Privatization Org., but proprietary rights have not been allocated to the bank in this respect; therefore, the relevant receivables and profit are reflected under this entry until total settlement. 8-6- Interest of receivables due from the Government has been calculated and reflected in the accounts according to the rate of transactional contracts, notified by the Central Bank of I.R. of Iran. Such rate was 22% in the year 2014. Further the delay penalty concerning such receivable from the government has been calculated and recorded in the accounts. 9. Granted Facilities & Receivables from the Public Sector The balance of facilities granted to and receivables due from the public sector (totally owned by the Bank) is as follows: Title Granted Rials facilities (net) Granted FC facilities (net) Debtors due to L/C paid in Rials Debtors due to L/C paid in FC Receivable retention money Receivable profit Other Less: Differential of conversion of FC in arrears Reserve of doubtful accounts Total Granted Facilities & Receivables from Public Sector March 20, 2015 March 20, 2014 Million Rials Million Rials 1,637,519 164,833 244,354,262 278,005,697 49,075 41,534 0 1,560,244 69,817 69,817 905,889 525,640 249 249 (164) (3,722,529) 243,294,117 (0) (4,224,862) 276,143,151 Notified Granted Facilities to Public Sector March 20, 2015 March 20, 2014 Million Rials Million Rials 1,151,961 1,289,470 (0) (0) 1,151,961 (0) (0) 1,289,470 Page 22 of 50 Bank Mellat – Financial Statements March 20, 2015 Total Granted Facilities & Receivables from the Public Sector March 20, 2015 March 20, 2014 Million Rials Million Rials 2,789,480 1,454,303 244,354,262 278,005,697 49,075 41,534 0 1,560,244 69,817 69,817 905,889 525,640 249 249 (164) (3,722,529) 244,446,078 (0) (4,224,862) 277,432,621
23. 9-1- Sum of IRR 48 ,627 billion of granted FC facilities is related to the governmental finance facilities, withdrawn from the FC Reserve Account, granted to the public companies in the years 2006-2009 (explanatory Note 18 of financial statements. The said facilities are past due, but, with regard to the Government’s guarantee, no dedicated reserve for doubtful account has been considered in the accounts in this respect. 9-2- Sum of IRR 38,931 billion, equal to € 1,291 million of FC facilities granted to National Iranian Oil Co. out of Energy Fund is past due. The said facilities has been extended after a three-year period according to the Agreement dated March 17, 2014 with the said company, and for purpose of collection interest of the said facilities and participating bonds reflected in the Note (16-2) of the financial statements, sum of € 50 million is being collected (Sum of € 650 million has been collected up to now), and with regard to the said agreement, no reserve for the dedicated doubtful accounts has been considered in the account in this respect. 9-3- The granted FC facilities includes foreign finance of IRR 4,230 billion (equal to € 140 million) to the state-owned companies, which past due; but, due to existence of governmental securities, no dedicated doubtful account has been considered in the accounts in this respect. 10. Granted Facilities & Receivables from other Persons Group March 20, 2015 million Rials 56,869,323 20,258,595 1,976,898 335,938 27,122,155 236,826,149 30,962,511 2,773,229 3,739,731 10,700,007 129,046,847 3,459,512 166,601 111,200,602 25,746,666 661,184,765 Sale by installment Unilateral (JUALA)contract Lease purchase Forward Capital bailment Civil participation Interest-free Debtors due to paid out L/Cs Debtors due to paid out guarantees Debtors due to FC L/Cs Granted FC facilities Factoring Facilities granted to branches abroad Usury (sale) Other facilities Bank March 20, 2014 million Rials 59,641,977 24,029,030 1,279,300 292,612 25,058,907 206,660,098 33,114,974 3,343,258 2,414,070 9,259,858 113,522,450 1,558,730 281,555 63,088,033 25,395,841 568,940,692 March 20, 2015 million Rials 56,988,539 20,258,595 2,353,153 335,938 27,122,155 251,122,769 30,962,511 2,773,229 3,739,731 10,700,007 129,046,847 3,468,370 166,601 111,200,602 23,912,109 674,151,158 March 20, 2014 million Rials 60,155,845 24,029,030 1,898,590 292,612 25,082,172 220,113,556 33,114,974 3,343,258 2,414,070 9,259,858 113,522,450 1,575,008 281,555 63,088,033 22,768,206 580,939,217 10-1. Granted facilities and receivables from other persons of the group are as follows: Group Granted facilities and receivables from other persons of the bank Granted facilities to group-member companies Granted facilities to PIB Bank Total March 20, 2015 March 20, 2014 674,151,158 (14,800,949) 1,834,557 661,184,765 580,939,217 (14,626,160) 2,627,635 568,940,692 10-1-1- Facilities granted to other persons includes IRR 55,222 billion which is related to the facilities granted to banks’ personnel, in form of JUALA contracts, sales by installment and interest-free loans. 10-2. Granted facilities and receivables from other persons of the bank are as follows: Bank March 20, 2015 Installment sale JUALA contract Lease purchase Forward Capital bailment Civil participation Interest-free Debtors due to paid out L/Cs Debtors due to paid out guarantees Debtors due to FC L/Cs Granted FC facilities Factoring Facilities granted to branches abroad Usury (sale) Other facilities Balance Profit & Commission Reserve of Receivables Million Rials 90,706,030 27,105,073 2,957,667 1,647,735 29,940,482 250,623,363 32,099,391 7,379,684 5,811,797 22,012,769 154,659,702 3,516,479 167,716 137,056,214 24,276,253 789,960,353 Million Rials (24,654,806) (5,948,163) (678,517) (0) (0) (0) (84) (0) (144,823) (0) (1,843,443) (0) (0) (23,994,910) (0) (57,264,745) Million Rials (9,181,901) (898,315) (302,252) (1,311,798) (2,818,326) (13,797,214) (1,136,796) (4,606,455) (1,927,243) (11,312,763) (8,760,375) (56,967) (1,115) (1,860,702) (364,144) (58,336,363 March 20, 2014 FC Conversion Differential (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (15,009,037) (0) (0) (0) (0) (15,009,037) Page 23 of 50 Bank Mellat – Financial Statements March 20, 2015 Net Net Million Rials 56,869,323 20,258,595 1,976,898 325,938 27,122,155 236,826,149 30,962,511 2,773,229 3,739,731 10,700,007 129,046,847 3,459,512 166,601 111,200,602 23,912,109 659,350,208 Million Rials 59,641,977 24,029,030 1,279,300 292,612 25,058,907 206,660,098 33,114,974 3,343,258 2,414,070 9,259,858 113,522,450 1,558,730 281,555 63,088,033 22,768,206 566,313,057
24. 10-2-1 . Classification of above granted facilities, according to Directive approved by the Money and Credit Council, is as follows: Installment sale Reward contract Lease purchase Forward Capital bailment Civil participation Interest-free Debtors due to paid out L/Cs Debtors due to paid out guarantees Debtors due to FC L/Cs Granted FC facilities Factoring -IRR Facilities granted to branches abroad Usury (sale) Other facilities (10-2-1-1) Less: Differential of FC conversion in arrears Total Less: Subsequent years profit & commission General reserve of doubtful accounts Particular reserve of doubtful accounts Current Million Rials 78,229,667 25,269,418 2,600,584 227,957 25,210,751 223,900,104 30,427,078 474,906 1,576,519 722,783 124,630,669 3,490,957 74,305 131,911,439 24,276,253 673,023,391 (0) 673,023,391 (57,264,745) (9,236,380) (0) 606,522,266 Passed due date Million Rials 707,227 82,466 6,229 2 160,641 2,265,091 112,671 0 0 0 95,931 1,358 0 3,302,491 0 6,734,107 (0) 6,734,107 (361,928) 6,372,179 Bank March 20, 2015 Arrear Million Rials 681,726 286,786 21,708 1,003 299,667 2,723,631 670,545 0 0 0 2,257,173 24,163 93,410 1,842,284 0 8,902,097 (2,218,423) 6,683,674 Doubtful account Million Rials 11,087,410 1,466,403 329,147 1,418,772 4,269,422 21,734,536 889,097 6,904,778 4,235,278 21,289,986 27,675,929 0 0 0 0 101300758 (12,790,614) 88,510,144 Total Million Rials 90,706,030 27,105,073 2,957,667 1,647,735 29,940,482 250,623,363 32,099,391 7,379,684 5,811,797 22,012,769 154,659,702 3,516,479 167,716 137,056,214 24,276,253 789,960,353 (15,009,037) 774,951,316 (47,815,008) 40,695,136 (57,264,745) (9,236,380) (49,099,983) 659,350,208 (923,048) 5,760,626 10-2-1-1- Granted FC facilities include the following: 1- Sum of IRR 58,689 billion, equal to € 1,946 million of facilities granted to Pero Sina Aria Co. and Oil Industry Eng. Co. and Petro Paidar Co. out of National development Fund resources for the development of South Pars Installments (Note 18). It is to be noted that the credit amount of the above-said project was USD 5 billion, and its payment date was until July 2015, and repayment of its principal and interest was designated 5 years after expiration of its repayment period. 2- The granted facilities for sum of IRR 4,819 billion (equal to € 159.8 million) was offset out of FC reserve fund, which include profit and the received retention money, and sum of IRR 4,283 billion (equal to € 142 million) of granted facilities out of un-offset FC reserve fund (note 18). 3- Further, the granted FC facilities include sum of 27,413 billion in consideration of interest and delay penalty received concerning granted FC facilities to the public and non-public companies. 4- Sum of IRR 4,819 billion of granted FC facilities is consideration of the balance of principal. Interest and receivable retention money of facilities granted to the non-public companies. 5- Sum of IRR 4,282 billion (equal to € 142 million) is consideration of facilities granted to non-public sector out of un-setoff FC reserve fund; and principal amount, interest and delay penalty, share of the Central Bank have been credited to its account. Generally, the abovesaid granted facilities have been depreciated as per request of the applicant and with respect to the delegation of authority by the Central Bank concerning decision on procedure of settlement of liability (depreciation) to the credit structure of Bank Mellat. 10-2-2- Other facilities are in consideration of deficit of imprest, pars oil and gas participating bonds, Iranian oil company, Band Abbas Oil Refinery, etc. 10-3- According to the requirements set out in the provisions of Articles (28) and (29) of Budget Laws for the years 2011 and 2012 and also the Bank’s Credit Policies, sum of IRR 87,625 billion of non-current rial receivables was depreciated and sum of IRR 73,517 billion thereof was classified as current facilities, and according to the Bank’s policy, the relevant doubtful reserves are calculated with regard to the new classification and they are recognized as the earning due from the said process. It is evident that failure in compliance with the conditions of the contract, depreciation of the said facilities will return to the initial receivables class and the required reserves are considered in the accounts and the recognition of earning is ceased. Further, about 60% of the collection and 2% of the previous entry have been transferred. 10-4- About 40% total securities provided in return for the non-public facilities is made up of cheques and promissory notes. 10-5- Out of IRR 6,278 billion of rial facilities granted to Tehran Municipality and sum of € 232.1 million (principal and liability) are in consideration of L/Cs related to Wagon making and Tehran Subway Companies, which are past due and in arrears; nevertheless, according to the Letter of Understanding, dated April 10, 2012 it was decided that they may be settled out of density duty of construction of the Bank’s buildings. Additionally, sum of IRR 2,816 billion was received in consideration of L/Cs of Wagon Making Co. and recorded in the entry of advance and blocked account. Page 24 of 50 Bank Mellat – Financial Statements March 20, 2015
25. 10-3 . Facilities granted to the Group Member Companies Bank March 20, 2015 Sale by installment Lease purchase Capital bailment Factoring Civil partnership Balance Future Year Profit Million Rials 132,339 478,554 0 9,842 14,514,336 15,135,071 Million Rials (11,307) (96,570) (0) March 20, 2014 Reserve of Receivables Million Rials (1,815) (5,730) (0) (984) (217,715) (226,244) (0) (107,877) Net Net Million Rials 119,216 376,254 0 8,858 14,296,621 14,800,949 Million Rials 513,868 619,290 23,266 16,278 13,453,458 14,626,160 10-3-1. Classification of the above granted facilities, based on the directive approved by the Money & Credit Council, is detailed below: Bank March 20, 2015 Installment sale Lease purchase Capital bailment Factoring Civil participation Less: Subsequent years profit General reserve of doubtful account Dedicated reserve of doubtful account Current Overdue Arrear Million Rials 132,339 477,648 0 14,511,689 15,121,676 Million Rials 0 906 9,842 2,647 13,395 Million Rials 0 0 0 0 0 (107,877) (225,207) 0 0 (1,038) 12,357 14,788,592 Doubtful Account Million Rials 0 0 0 0 0 Million Rials 132,339 478,554 9,842 14,514,336 15,135,071 0 (107,877) (225,207) (1,038) 14,800,949 0 Total 10-3-2- Out of IRR 14,512 billion million of civil participation, sum of IRR 5,559 million is related to granting facilities to construction companies of Bank Mellat and Peiriz Bonyan Marsous Co. in consideration of the purchase of Autobank, Elahieh, Bagh-e Jamshidieh, Shahab and Letman Kan Bank properties. 11. Debtors due to paid-out FC L/Cs & FC Time Bills of Exchange Balance of debtors in consideration of L/Cs (totally owned by the Bank) is as follows: Bank Debtors due to paid out FC L/Cs & time bills of exchange Less: General reserve of doubtful accounts Total March 20, 2015 Million Rials 13,358 ,299 March 20, 2014 Million Rials 25,403,084 (200,374) 13,157,925 (381,046) 25,022,038 11-1. Debtors in consideration of time FC L/Cs are related to Foreign Banks’ Finance Credit Line and it was not possible to settle the obligations with respect to the sanctions and lack of repayment channel through foreign agents (Note 26). Further, a sum has been received as advance payment in this regard as detailed in Note (23): other Deposits.. 12. Participating Bonds & Other Similar Securities The above entry includes balance of participating bonds and securities as detailed below: Group Participating bonds – Public Sector Participating bonds – Non-Public Sector FC Securities Private securities (12-1) March 20, 2015 Million Rials 0 14,925,028 1,448,752 89,251 16,463,031 Bank March 20, 2014 Million Rials 3,944,783 7,057,065 3,098,631 0 14,100,479 March 20, 2015 Million Rials 0 11,722,853 2,382,035 89,251 14,194,139 March 20, 2014 Million Rials 3,944,783 8,250,923 4,031,914 0 16,227,620 12-1- IRR 11,723 billion of securities of public sector are mainly related to participating bonds of Tehran Oil Refinery, participating bonds of Shiraz Municipality, participating bonds of Ministry of Road and Urban Development, participating bonds of Qom municipality, participating bonds of Mashhad Municipality and other cases. Page 25 of 50 Bank Mellat – Financial Statements March 20, 2015
26. 13 . Investments & Participations Group Investments & Participations March 20, 2015 Million Rials 37,662,540 37,662,540 Bank March 20, 2014 Million Rials 34,383,359 34,383,359 March 20, 2015 Million Rials 24,859,671 24,859,671 March 20, 2014 Million Rials 21,897,422 21,897,422 13-1. Investments & Participations of the Group include the following items: Group Marketable liquid investments: Shares of listed companies Investment in the shares of other companies: Affiliates Companies abroad Other Local companies Investment Deposits at Banks Note March 20, 2015 Million Rials March 20, 2014 Million Rials 13-1-1 10,590,438 10,590,438 10,218,399 10,218,399 3,486,769 5,754,247 13,983,605 3,847,481 27,072,102 37,662,540 1,886,344 5,754,247 11,655,060 4,869,309 24,164,960 34,383,359 13-1-2 Total investment in securities 13-1-1. Investment of the group in the shares of listed companies is mainly related to investment of the Mellat Financial Group in the listed companies. The said investment is mainly to the following companies: March 20, 2015 Market Value Million Rials # of Shares Bandar Abbas Oil Refinery Isfahan Oil Refinery Mobile Communication Co. Pardis Petrochemical Co. Bank Saderat National Iranian Cupper Industries Co. Jam Petrochemical Co. Iran Telecommunication Co. Other Total 737,562,597 390,917,755 41,355,300 32,416,167 477,567,329 209,337,915 37,118,814 99,895,863 3,419,840 1,273,996 1,263,358 503,543 397,728 338,983 294,695 255,129 Cost Price Million Rials March 20, 2014 Cost Price Million Rials 3,712,058 1,076,334 947,889 601,835 441,710 553,086 370,485 334,381 2,552,660 10,590,438 3,685,535 203,837 587,274 525,899 0 424,229 316,303 270,898 4,204,424 10,218,399 13-1-2. Investment in companies abroad is mainly related to Bank Mellat (parent Company) as follows: Bank March 20, 2015 % of Participation Eihbank Other 26.31 - March 20, 2014 Cost price Cost price Cost price 92,031,154 - Million Rials 1,059,064 4,695,183 5,754,247 Million Rials 1,059,064 4,695,183 5,754,247 13-1-3- Whereas the difference between equity and cost price of investment in eihbank, we disregarded disclosing investment using equity method. 13-2. Investments and partnerships of Bank Mellat (parent company) are as follows: Bank Subsidiaries Other Companies – local Other Companies - abroad Total Less: Impairment reserve March 20, 2015 Million Rials 18,027,989 259,288 6,582,410 24,869,688 March 20, 2014 Million Rials 151,144,555 172,527 6,582,410 21,899,092 (10,017) 24,859,671 (1,670) 21,897,422 Page 26 of 50 Bank Mellat – Financial Statements March 20, 2015
27. 13-2-1- According to the Clause (S) of Article (3) of Iranian Budget Law for the Year 2010, the Government was obligated to settle its liability to the banks that at least 50% of shares of them have been assigned by the Government in various forms, including Justice Shares, not later than September 22, 2010 using the government’s shares in companies (or their affiliates) and/or via administered funds and/or via facilities paid out of the FC reserve account, 13-3. Particulars of subsidiaries of the group are as follows: % of Investment Name of Company Address Group Main Entity Major Activity A) Parent entity’s direct investments Persia International Bank (PIB) Bank Mellat of Armenia England Armenia 60 100 60 100 Banking Banking Iran Iran Iran Iran Iran Iran Iran Iran Iran Iran Iran Iran Iran 100 92.93 100 99.62 100 99 100 100 100 100 100 55 100 100 - Investment Cutting tools production Manpower supply Thread production Textile Constructional contract Constructional services Printing services Business services Project management Hotel management Iran Iran Iran Iran Iran Iran Iran 100 100 100 100 100 100 100 100 Iran Iran Iran Iran Iran Iran Iran Iran Iran Iran Iran Iran Iran Iran Iran Iran Iran Iran 100 100 17 100 100 100 90 100 100 100 100 100 100 99 100 70 100 100 100 10 - A-1) Behsaz Partnership Group Behsaz Mellat Partnership Almaseh Saz Behsaman Mellat Isfahan Behris Kerep Naz Airdak Bank Mellat Constructional Bank Mellat Printing Rahbari Behsaz Industry Peiriz Bonyan Marsous Jahan Behsaz Mofarah Tehran-Saveh Freeway Mad Marketing & Sales Development B) Fanavaran Houshmand Behsazan Farda Group Fanavaran Houshmand Behsazan Farda Group Behsazan Mellat Behpardakht Mellat Yas Arghavani System Engineering Yas Arghavani Industrial Engineering Shaghayegh Software Engineering Secure Infrastructure of Transactional Services Co. C) Mellat Financial Group Mellat Financial Group Behsaz Mellat Insurance Services Insurances Tadbirgaran Behsaz Mellat Tarh va Andisheh Behsaz Mellat Behsaz Business Service Development Mellat leasing Bank Mellat Capital Security Bank Mellat Broking Moein Kheradmandan Investment Development Mellat Exchange Arzash Afarin Atlas Petro Faravaran Atlas Nosaz Construction & services Vavan Construction & Urban Development Kavosh Research Town Mellat Insurance Coverage Services Nogam Oil & Gas Co. - Construction & Utilization of the Freeway Bank’s Surplus properties management Software design & production Software design & production Software design & production Software design & production Software design & production Software design & production Equipment installation & commissioning Investment Insurance services Insurance services Feasibility study Collection of receivables in arrears Business & partnership Leasing Financing Share brokerage services Investment Exchange services Collaboration, Brokering & Trading Business services Constructional services Civil Civil Machines Insurance companies’ agency Oil & gas field activity 13-4. Particulars of group’s affiliates are as follows: Name of Company Refah Chain Stores Amin Investment Bank Bafgh Iron & Steel Mineral & Industrial Complex (Plan) Eih Bank Address Iran Iran Iran Germany % of Investment Group Main Entity 10 10 40 26.31 26.31 Major Activity Retails Financing Minerals extraction Banking 13-5- With regard to low importance and lack of on-time accessibility to the affiliate’s financial statements, disclosing investment using equity method has been disregarded. Page 27 of 50 Bank Mellat – Financial Statements March 20, 2015
28. 14 . Fixed Tangible Assets of the Group & Bank Cost Price or Reassessed Amount Million Rials Items Accumulated depreciation Million Rials Book Value Million Rials Balance on 20/3/2014 Added assets in the fiscal year Sold assets in the fiscal year Movements & other changes Adjustments Balance on 20/03/2015 Balance on 20/03/2014 Fiscal year depreciation Accumulated depreciation of sold assets Adjustments Balance on 20/03/2015 Balance on 20/03/2015 Balance on 20/03/2014 Group 51,456,151 7,189,215 (659,782) (0) (1,273,803) 56,711,782 8,431,352 1,758,672 (151,005) (490,998) 9,548,021 47,163,761 43,024,799 Bank 47,369,031 5,620,540 (462,522) (0) (1,902,413) 50,624,637 7,816,135 1,460,388 (138,534) (494,080) 8,643,910 41,980,727 39,552,896 14-1- Ratio of net fixed assets according to the Circular No. 94/62147, dated June 01, 2015, issued by the Central Bank has been calculated as follows: Million Rials Restated March 20, 2014 Million Rials 50,624,637 47,369,031 Net surplus of reassessment of the years 2004 & 2011 (20,410,683) (20,641,574) Reserve of depreciation of movable and immovable (8,643,910) (7,816,135) Net fixed assets 21,570,044 18,911,322 3,346,186 2,133,514 March 20, 2015 Fixed assets Less : Add: Intangible assets Leased capital items 71,040 32,004 Above-2 year property collateral 2,931,171 1,894,257 Total 27,918,441 22,971,097 Shareholders’ equity 76,124,280 70,825,462 Net surplus of reassessment of the years 2004 & 2011 (20,410,683) (20,410,683) Retained profit (18,806,786) (17,339,910) 36,906,811 33,074,869 75.65 69.45 Less : Total Ratio (%) Page 28 of 50 Bank Mellat – Financial Statements March 20, 2015
29. 14-2 . Fixed Tangible Assets of the Bank are as follows: Cost Price or Reassessed Amount – Million Rials Accumulated Depreciation – Million Rials Depreciation of fiscal year 20,277,235 (719,698) 13,221,993 3,991,907 393,633 (107,066) Computer equipment 5,171,219 13,386 (0) 208,489 (472,549) 4,920,545 1,616,736 631,653 - 20/3/2014 Balance at the beginning of year (659,244) 1,065,366 20/3/2015 Balance at the end of year 270,319 (382,853) Balance at the end of year Adjustments (25,414) 207,881 Adjustments Movements & other changes 1,836,067 13,051,296 Accumulated depreciation of sold assets Assets added during fiscal year 18,855,507 Assets sold during fiscal year Balance at the beginning of year Land Building Items Book value Million Rials 20,277,235 18,855,507 (127,402) 4,151,072 9,070,920 9,059,389 (353,786) 1,894,603 3,025,942 3,554,483 Vehicles 220,295 - (18,679) 8,218 (0) 209,834 119,358 9,819 (15,315) - 113,862 95,973 100,937 Furniture 2,558,062 20,791 (35,577) 988,348 (739) 3,530,884 2,088,134 425,284 (16,153) (12,892) 2,484,373 1,046,511 469,928 Total 39,856,378 2,078,125 (462,522) 2,540,739 (1,852,230) 42,160,491 7,816,135 1,460,388 (138,534) (494,080) 8,643,910 33,516,580 32,040,243 Assets in the process of completion 5,869,653 2,462,286 - (1,207,467) (0) 7,124,472 7,124,472 5,869,653 Orders & capital prepayments 600,231 193,466 - (286,007) (0) 507,689 507,689 600,231 Capital items at warehouse 1,042,769 886,664 (0) (1,047,265) (50,182) 831,986 831,986 1,042,769 Total 7,512,653 3,542,416 (0) (2,540,739) (50,182) 8,464,147 Grand Total 47,369,031 5,620,540 (462,522) (0) (1,902,413) 50,624,637 7,816,135 1,460,388 (138,534) (494,080) 8,643,910 8,464,147 7,512,653 41,980,727 39,552,896 14-3- Fixed assets as detailed in the Explanatory Note 4-3-2 have been re-assessed. 14-4- The Bank’s properties and the acquired properties are insured up to IRR 16,517 billion. 14-5- 249 Real Estates are occupied by other persons, lay within municipal plans and have problems regarding title deeds. 228 real estates lack title deeds, the Bank is pursing for receiving respective title deeds. 14-6- Accumulated depreciation are phased out movable properties that are written off upon sales and/or assignment. 14-7- Assets in progress are mainly in consideration of Damavand, Salsabil Hotel of Mashhad, Golestan Pasdaran, Jeihoun Site, … projects 14-8- The Bank’s properties are insured according to the standing property value, and with regard to this fact that the building site is not subject to insurable peril; therefore, the buildings and immovable properties are adequately insured. Page 29 of 50 Bank Mellat – Financial Statements March 20, 2015
30. 15 . Intangible Assets Group Note Key-money Royalty Computer software – Net Other Total 15-1 Bank March 20, 2015 March 20, 2014 March 20, 2015 March 20, 2014 Million Rials 2,907,509 555,994 5,024 1,130 3,469,657 Million Rials 2,189,720 253,345 24,036 49,425 2,516,526 Million Rials 2,788,244 232,182 0 0 3,020,426 Million Rials 2,134,309 244,959 0 0 2,379,268 15-1- Sum of IRR 574 billion of Software service fees are recorded in the key-money entry. 16. Other Assets The constituents of the above entry on the balance sheet date are as follows: Group Provisional debtors – Rial Provisional debtors – FC Provisional debtors abroad Accounts receivables 16-1 16-2 Drawn collaterals Profit & commission receivable General warehouse Ready-for-sale assets Other 16-4 16-3 16-5 Less : Reserve of doubtful accounts Bank March 20, 2015 March 20, 2014 March 20, 2015 March 20, 2014 Million Rials 17,278,409 51,566,108 636,593 13,904,336 83,385,446 14,024,594 80,619 342,863 1,774,692 6,175,885 105,784,099 Million Rials 30,946,494 51,396,718 590,019 9,369,102 92,302,333 12,993,897 52,817 472,631 0 4,732,737 110,554,415 Million Rials 33,098,703 51,566,108 636,593 0 85,301,404 12,024,594 80,619 342,863 1,480,894 116,603 101,346,976 Million Rials 33,210,162 51,396,718 590,019 0 85,196,899 12,993,897 52,817 243,460 0 148,781 98,635,854 (1,269,972) 104,514,126 (1,284,035) 109,270,380 (1,269,972) 100,077,004 (1,284,035) 97,351,818 March 20, 2015 March 20, 2014 March 20, 2015 March 20, 2014 Million Rials 752,417 6,505,391 1,934,124 8,086,477 17,278,409 Million Rials 3,273,589 5,778,774 2,145,083 19,749,048 30,946,494 Million Rials 3,302,721 23,888,208 1,934,124 4,973,650 33,098,703 Million Rials 6,509,231 13,353,664 2,145,083 11,202,184 33,210,162 16-1. Provisional Debtors ion Rials are constituted of the following items: Group On-account payment & receivables from companies Dividend receivable from other companies Profit due from participating bonds Other items Bank 16-1-1- sum of IRR 3,500 billion of other items is related to Bank;s interim debtors concerning receivables due from the Hajj & Pilgrimage Org., which was settled in June. 16-2- Out of IRR 51,565 billion of interim FC debtors, sum of IRR 42,412 billion is related to the FC participating bonds of South Pars Oil & Gas Co. which will be collected according to the agreement reflected in Explanatory Note (9-2). Further, sum of IRR 965 billion of the interim FC debtors is related to receivables due from Bank Maskan in consideration of payment of 2 L/Cs opened by the said bank, for collection of which legal actions are in progress. Furthermore, sum of IRR 7,597 billion was in consideration of the clearing account which is related to the interim FC debtors (Note 20). 16-3. Accounts receivables are constituted of the following items: Group Trade notes receivable Trade debtors Other Reserve of doubtful accounts March 20, 2015 March 20, 2014 Million Rials 802,654 13,525,447 205,722 (629,488) 13,904,336 Million Rials 4,454,552 3,997,446 944,324 (27,220) 9,369,102 Page 30 of 50 Bank Mellat – Financial Statements March 20, 2015
31. 16-4- Possessed securities include IRR 6 ,657 billion of possessed shares of National Iranian Cupper Industries Co., sum of IRR 2,028 billion of movable properties, sum of IRR 5,130 billion of immovable properties and sum of IRR 210 billion of other possessed securities. 16-4-1- According to the Minutes of Extraordinary General Meeting held on November 30, 2014 National Iranian Cupper Industries Co. they have agreed with 24% increase of the capital, and the foregoing is being followed up concerning registrations of the same in the relevant books. 16-4-2- Out of the possessed properties, 1,068 properties in counties and 31 properties in Tehran and free zones have not been received from the former owners. 16-4-3- The possessed properties are adequately insured for sum of IRR 6,457 billion. 16-5- ready-for-sale assets have been classified according to the Resolutions Nos. 3247/18, dated March 03, 2014 and 3274/74, dated July 07, 2014 adopted by the Board of Directors of the Bank, which were published in the widely-circulated Newspapers for several times 17- Items in Transit Items in transit on the date of balance sheet are as follows: March 20, 2015 Debtors Million Rials Center /IRR Center /FC Branches /IRR Local debtors /IRR (17-4) Local debtors /FC Capital payment to branches abroad - FC Surplus resources Legal deposit of branches in free zones Rial value of FC transactions A/C FC status A/C Time FC Deposit at branches abroad Demand FC Deposit at branches abroad kept by one another Time FC Deposit at branches abroad kept by one another Receivables due from Central Dept. Items in transit 369,702,237 198,613,435 10,538 112,046,490 47,308 1,435,559 15,704,249 1,059,621 256,234,906 120,867,115 5,028,111 338,328 310,492 March 20, 2014 459,317,384 224,111,910 10,538 148,796,979 63,215 1,435,559 13,606,281 0 227,424,300 114,797,622 5,056,138 174,379 124,311 2,817,526 1,084,215,915 26,188,014 1,110,403,929 March 20, 2015 Restated Debtors Million Rials Creditor Center /IRR Center /FC Branches /IRR Local creditors/IRR (17-5) Local creditors /FC (17-1) Capital of branches abroad Surplus resources Free Zones Branches FC status A/C Rial value of FC transactions A/C Demand Deposit of Central Dept. Demand Deposit at branches abroad kept by one another Time FC Deposit A/C at branches abroad 0 1,194,918,614 0 1,194,918,614 Million Rials 435,141,922 201,295,978 0 60,672,074 12,794,270 March 20, 2014 Restated Debtors Million Rials 1,435,559 15,704,249 1,059,621 256,234,906 120,867,115 4,743,247 245 574,960,192 216,534,414 0 36,102,070 5,379 1,435,559 13,606,281 0 227,424,300 114,797,622 4,349,053 255 454,743 0 -1,110,403,929 0 1,110,403,929 1,189,215,123 5,703,491 1,194,918,614 17-1- Concerning the above note, the provisions of the Letter No. 1225/BM, dated February 06, 2002, issued by General Management of Supervision on banks and credit institutes – Dept. of Banking Studies & Regulations of the Central Bank, subject of the Directive of Procedure of Issuance and Registration of Accounting Documents in relation to FC Operations have been observed. 17-2- Major items of IRR Center / FC Center and Local debtors and creditor, subject of the Note 17-4 and 17-5 are mainly related to process of crediting and withdrawal to/from SHETAB, SATNA, Barter, SHAPARAK, etc. systems with the branches and General Dept., which are settled within a few days. 17-3- In reference to the Note (6-2) adjustment of accounts created toward execution of Circular 1015 of Central Bank, which is carried out at the Central Dept., are executed in 2015 at Branches level. Page 31 of 50 Bank Mellat – Financial Statements March 20, 2015
32. 17-4 . Local debtors include the following items: Accounts among bank internal departments Mellat Card – ATM Terminal Payments to SATNA in consideration of offices Centralized Unit Funds credited to JAM A/C Funds credited to the Current Account No. 20400 SHAPARAK PAYA Drafts System SHETAB Funds withdrawn out of integrated accounts Allocation of FC documented credits and drafts Other items 17-4-1 17-3 17-4-2 March 20, 2015 Million Rials 1,249,914 0 19,001,083 55,000 49,732,123 0 2,874,046 1,285 0 1,396,129 25,874,836 11,862,074 112,046,490 March 20, 2014 Million Rials 3,094,401 30,149 7,838,544 36,900 21,215,115 55,818,949 3,066,216 1,375 52,541,092 0 0 5,154,237 148,796,979 17-4-1. Items related to the accounts among the bank internal departments are constituted of the following items: Intercity drafts Payment of drafts issued by other departments Working account of branches March 20, 2015 Million Rials 0 861,648 388,266 1,249,914 March 20, 2014 Million Rials 7,698 1,740,156 1,346,547 3,094,401 17-4-2- Other items are related to local debtors, including transfer of funds from abeyant Mellat card, encrypted cheques, instruments exchanged among departments, etc. 17-5. Local creditors are constituted of the following items: Accounts among bank internal departments SHETAB Clearinghouse Subsidy of quick-return workshops Credited funds out of integrated accounts Other items March 20, 2015 Million Rials 386,129 22,034,356 11,730,848 295 444,964 26,075,482 60,672,074 March 20, 2014 Million Rials 5,658,820 0 20,886,813 499 0 9,575,939 36,102,070 17-5-1- Other local creditors’ items include abeyant encrypted cheques, instruments exchanged among departments, Fuel Card Bag, POS, etc. 18. Liability to the Central Bank Bank Central Bank time FC deposit account Facilities received from FC Reserve Account 18-1 Facilities received from Central Bank Liability to Central Bank for FC rate differential – non-conventional cases Less: Amounts receivable from Central Bank for management floating rate differential March 20, 2015 Million Rials 126,452,906 124,503,749 800,000 45,271 251,801,926 March 20, 2014 Million Rials 116,141,302 118,121,566 800,000 46,295 235,109,162 (310,859) 251,491,067 (349,639) 234,759,523 18-1- Time deposits of central Bank maintained at the Bank are mainly in consideration of deposits, out of which facilities have been paid to those introduced by the said bank. 18-2- Out of IRR 124,504 billion liability to the Central Bank is in consideration of facilities granted out of FC reserve including IRR 95,795 billion of finance facilities to the public sector and sum of IRR 4,283 billion (equal to € 142 million) related to facilities granted to non-public sector (Note 10-2-1-1) (it is to be noted that it is solely paid to the Central Bank upon collection of liability installments) and sum of IRR 13,083 billion is in consideration of FC rial value, allocable by the Central Bank in consideration of Circular 60/1015 and other is for sum of IRR 11,343 billion. Page 32 of 50 Bank Mellat – Financial Statements March 20, 2015
33. 19 . Liability to Banks and Credit Institutes Group Loro interest-free current account deposit (after clearing) Interest-free current account deposit of non-bank credit institutes Sight FC deposit of Iranian banks Sight FC deposit of foreign banks Time FC deposit of Iranian banks Time FC deposit of foreign banks Liability to foreign banks due to ECO FC loans Loans received by subsidiary companies from other banks Deposits of other banks March 20, 2015 Million Rials 181,899 985,383 9,249,912 23,677 9,896,358 3,737,668 0 2,544,985 28,781,499 55,401,382 Bank March 20, 2014 Million Rials 2,727,215 1,280,905 17,208,747 439,752 9,552,918 5,524,471 12,481 2,495,851 13,936,811 53,179,150 March 20, 2015 Million Rials 181,899 985,383 9,249,912 2,112,668 9,896,358 3,737,668 0 0 28,781,499 54,945,387 March 20, 2014 Million Rials 2,727,215 1,280,905 17,208,747 2,528,742 9,552,918 5,524,471 12,481 0 13,936,811 52,772,289 20. Sight Deposits Sight deposits, on the date of balance sheet, are as follows: Group March 20, 2015 Million Rials 135,845,307 15,959,192 15,462,786 2,991,795 4,925,408 30,562,722 44,504 1,766,747 207,558,461 Current interest-free deposits- IRR Current interest-free deposits- FC Types of sold-out bank cheques Civil partnership joint-account Provisional creditor – IRR Provisional creditor – FC Payable profit & commission Other items Bank March 20, 2014 Million Rials 149,107,464 25,472,290 46,268,076 3,071,986 4,698,831 32,965,859 52,076 2,178,375 263,814,958 March 20, 2015 Million Rials 135,774,268 15,976,803 15,462,786 2,991,795 6,150,540 30,562,722 44,504 1,766,747 208,730,164 March 20, 2014 Million Rials 149,302,390 27,420,775 46,268,076 3,071,986 5,696,540 32,965,859 52,076 2,178,375 266,956,078 20-1- Types of sold bank cheques are related to local intra-city issuing branch, encrypted cheques issued by other branches and inter-bank cheques issued by other banks, which have been issued at the request of the customers and are settled within 72 hours. 20-2- Major items of the Bank’s interim creditors include payable cases to Hamrah Aval Co. and Irancell in consideration of sales of credit SIM cards, Payments concerning access cards, good performance guarantee, social security insurance, etc. 20-3- Other demand items include unused administered funds, uncalled balances, drafts drawn to the Bank, etc. 21. Savings Deposits & Similar Items The constituents of the above entry on the date of balance sheet are as follows: Group March 20, 2015 Million Rials 50,025,701 6,384,369 421,698 56,831,768 Interest-free savings deposit / IRR Interest-free savings deposit / FC Customers saving Bank March 20, 2014 Million Rials 42,141,677 16,787,062 445,222 59,373,961 March 20, 2015 Million Rials 50,025,769 6,384,369 421,698 56,831,835 March 20, 2014 Million Rials 42,918,460 16,787,062 445,222 60,150,743 22. Time Investment Deposits Investment deposits are constituted of the following items: Group Long-term investment deposit 22-1 Short-term investment deposit Special Short-term investment deposit Government’s personnel savings (Employees’ share) Government’s personnel savings ( Government’s share) FC time deposit Time deposit of branches abroad March 20, 2015 Million Rials 262,111,277 298,715,458 4,870,589 882,940 881,622 55,021,705 163,500 622,647,090 Bank March 20, 2014 Million Rials 231,145,714 243,635,636 4,886,352 716,279 717,771 58,916,405 164,789 540,182,946 March 20, 2015 Million Rials 263,357,576 299,377,289 5,146,889 882,940 881,622 55,021,705 163,500 624,831,520 March 20, 2014 Million Rials 231,680,012 244,784,243 4,945,452 716,279 717,771 58,916,405 164,789 541,924,951 22-1- Long-term investment deposit includes IRR 22,539 billion, in consideration of investment by persons for Hajj pilgrimage, the profit of which have been calculated at 20%. Page 33 of 50 Bank Mellat – Financial Statements March 20, 2015
34. 23 . Other Deposits Constituents of the above entry are as follows: Group Advances from customers due from Rial L/Cs / non-governmental Advances from customers due from FC L/Cs / governmental Advances from customers due from Local FC L/Cs / nongovernmental Bank March 20, 2015 Million Rials 10,875,983 12,782,086 March 20, 2014 Million Rials 8,291,071 22,465,356 March 20, 2015 Million Rials 10,875,983 12,782,086 March 20, 2014 Million Rials 8,291,071 22,465,356 7,881,260 8,509,902 7,881,260 8,509,902 8,307,905 2,539,902 633,412 11,584,565 54,605,112 7,502,034 2,983,946 899,769 12,380,082 63,032,161 8,314,438 2,539,902 633,412 10,405 43,037,486 7,502,034 2,983,946 899,769 7,614 50,659,692 Cash deposit of guarantees – IRR/ non-governmental FC Cash deposit of guarantees Advances from customers due from Local L/Cs / governmental Other 23-1- The said amount is mainly related to sums received from debtors in consideration of L/Cs and time FC drafts (as detailed the Note 11 of financial statements) 23-2- received on-account amount is in consideration of unpaid FC L/Cs which remained unpaid due failure of Central Bank in supply of the required FC has been disclosed in this note. 24. Payable Tax Group March 20, 2015 Million Rials 1,825,318 1,463,148 3,894,444 433,428 (4,933,882) (355,067) 2,327,390 Opening balance Reserve of tax of operations of the year Preceding years tax reserves Tax adjustments Settled during the year /period Settled on-account tax Closing balance Bank March 20, 2014 Million Rials 2,336,181 2,529,165 0 (14,580) (3,025,448) (0) 1,825,318 March 20, 2015 Million Rials 747,510 874,140 3,894,444 (0) (3,843,486) (3,577) 1,669,031 March 20, 2014 Million Rials 1,631,117 1,101,780 3,982,169 (0) (3,782,359) (2,185,196) 747,510 24-1. The Bank’s tax has been finalized by the tax authorities until March 20, 2010 and duly paid out. Summary of tax status of the Bank for operations of the year 2011 up to March 20, 2015 is as follows: Fiscal Year Declared Profit (Loss) 2011 2012 2013 2014 March 20, 2015 Total 8,037,969 7,528,606 16,050,972 17,894,159 18,147,596 67,659,301 Taxable Income Tax Declared 6,422,225 1,284,445 2,310,207 519,797 3,475,859 1,344,908 4,477,227 1,101,780 4,370,698 874,140 21,056,216 5,125,069 Less: Settled on-account tax Grand Total Assessed 4,193,967 5,658,041 7,109,493 6,820,073 0 23,781,574 Final 2,149,772 4,376,363 0 0 0 6,526,135 Settled 3,090,745 4,564,265 2,190,366 1,388,486 0 11,233,862 Balance Balance March 20, 2015 March 20, 2014 791 167,586 419,209 210,882 874,140 1,672,609 (3,577) 1,669,031 791 467,586 1,362,549 1,101,780 0 2,932,707 (2,185,196) 747,510 Assessment Method Audited books Audited books Audited books Audited books Unaudited 24-2. In consideration of contingent liability to the Iranian National Tax Administration, in addition to the reserved funds set out in the tax payable entry, the required reserves are available in the entries of other reserves. 24-3. With regard to the settlement of tax balance liabilities until March 20, 2010, the relevant acquittance of March 20, 2010 was received. 24-4. On the strength of final tax assessment notice for the fiscal year ended on March 20, 20110, bearing No. 2946323, dated March 08, 2014, sum of IRR 2,149 billion was totally paid; nevertheless, whereas Supreme Tax Council reissued another final tax notice with an equivalent tax amount, and the case was objected by the chief auditor, the bank lodged a complaint to the High Administrative Court. It is to be noted that according to the decision of Tax Dispute Settlement Board indicating acceptance of doubtful account costs in the year ended on March 20, 2011, the Case was referred to the Supreme Tax Council, and the Bank has considered reserves in the accounts on the strength of such decision and upon assuming acceptability of doubtful account cost for the years ended on March 20, 2012 through March 20, 2013. 24-5. On the strength of final tax assessment notice for the fiscal year ended on March 20, 2012, bearing No. 7955191, dated September 15, 2014, sum of IRR 4,376 billion was demanded from the Bank, which was totally paid up; nevertheless, the Bank has objected to the issued award, and intends to lodge a complaint to the Minister of Economic Affairs and Finance incompliance with Article 251 of Direct Tax Act. 24-6- On the strength of final tax assessment notice for the fiscal year ended on March 20, 2013, bearing No. 3030883, dated February 10, 2014, sum of IRR 7,109 billion was demanded from the Bank, and the Bank toward execution of legal regulations, objected and it is following up the case at the Tax Dispute Boards. Page 34 of 50 Bank Mellat – Financial Statements March 20, 2015
35. 24-7- On the strength of final tax assessment notice for the fiscal year ended on March 20 , 2014, bearing No. 11220198, dated February 08, 2015, sum of IRR 6,820 billion was demanded from the Bank, and the Bank toward execution of legal regulations, objected and it is following up the case at the Tax Dispute Boards. 25. Reserves and Other Liabilities Reserves and other liabilities are constituted of the following items: Group Facilities received from National Development Fund / FC Reserves of branches abroad Reserves of Bank’s Retirement Fund (Actuary) 25-1 Reserve for redemption of leave of absence Reserve of Personnel Expenses Reserve of admin. Expenses Reserve for bonuses of interest-free savings deposits Tax reserve of previous years Reserve of Deposits Guarantee Fund 25-2 Other items 25-3 March 20, 2015 Million Rials 58,701,189 42,979 8,173,922 1,195,143 415,525 41,578 1,198,835 3,860,554 1,704,170 12,610,742 87,944,636 Bank March 20, 2014 Million Rials 42,906,153 44,205 8,173,922 1,195,675 59,491 109,954 1,227,790 7,337,804 1,704,170 10,127,322 72,886,485 March 20, 2015 Million Rials 58,701,189 42,979 8,173,922 1,195,143 415,525 41,578 1,198,835 3,860,554 1,704,170 11,196,767 86,530,662 March 20, 2014 Million Rials 42,906,153 44,205 8,173,922 1,195,675 59,491 109,954 1,227,790 7,337,804 1,704,170 8,502,333 71,261,496 25-1- The actuary reserve, according to the qualified actuary’s calculations, has been considered in the accounts and the amount regarded by the retirement fund has not been recorded in the accounts due to objection to calculation procedures and assumption regarded by the bank’s selected actuary. 25-2- Toward execution of Article 7 and Clause 1 of Article 9 of Directive of the Amount and Procedure of Receiving the Deposits Guarantee Fund Membership Fee, as set out in the Resolution No. H4837T/100998, dated July 24, 2013, approved by the Council of Ministers, sum of IRR 176 billion, including initial membership fee has been paid on account and sum of IRR 1,704 billion was recorded in the accounts as reserve. Further, according to the Letter No. 92/235155, dated November 02, 2013, issued by the President of the Central Bank, the subject of Max. amount of deposits for calculation of annual membership fee is being processed. 25-3- Other items are mainly include reserve for profit payable concerning Moi Scheme Deposit. 26. Bank’s Liability in Consideration of Accepting Time FC L/Cs and Drafts Bank Bank’s liability in consideration of accepting time FC L/Cs and drafts Facilities received concerning Local usances of foreign banks Facilities received from branches abroad due to Local usances March 20, 2015 Million Rials 13,278,490 47,419 32,390 13,358,299 Page 35 of 50 Bank Mellat – Financial Statements March 20, 2015 March 20, 2014 Million Rials 24,978,276 291,994 132,814 25,403,084
36. 27 . Payable Dividend Bank Group Payable Dividend Paid Dividend Description Fiscal year ended on 20/3/2009 Fiscal year ended on 20/3/2010 Fiscal year ended on 20/3/2011 Fiscal year ended on 20/3/2012 Fiscal year ended on 20/3/2013 Fiscal year ended on 20/3/2014 Parent Company Subsidiaries – owned by minority Approved dividend During 2009 During 2010 During 2011 During 2012 During 2013 During 2014 Balance March 2015 Balance March 2015 Million Rials Million Rials Million Rials Million Rials Million Rials Million Rials Million Rials Million Rials Million Rials 2,227,000 1,578,116 648,231 137 52 43 13 409 409 3,157,100 0 2,834,089 320,750 1,549 93 88 531 531 1,280,000 0 0 1,016,947 261,713 285 63 993 993 5,400,000 0 0 0 3,373,295 2,020,764 2,171 3,770 3,770 5,296,000 0 0 0 0 5,274,681 12,685 8,634 8,634 13,200,000 0 0 0 0 0 13,140,525 59,475 59,475 30,560,100 1,578,116 3,482,320 1,337,834 3,636,609 7,295,866 13,155,544 73,811 73,811 1,690,847 1,764,658 28. Reserve for Personnel Termination Benefits The turnover of the account of the reserve for personnel termination benefits is as follows: Group Opening period/year Balance Supplied reserve for the period /year Payable during the period/ year Year/period -end Balance September 2014 Million Rials 5,021,282 1,584,844 (198,324) 6,407,802 Bank March 20, 2014 Million Rials 4,315,691 815,102 (109,511) 5,021,282 September 2014 Million Rials 4,868,100 1,472,515 (167,952) 6,172,663 March 20, 2014 Million Rials 4,220,696 743,583 (96,179) 4,868,100 Page 36 of 50 Bank Mellat – Financial Statements March 20, 2015
37. 29 . Capital 29-1. The Bank’s capital at the beginning of establishment was IRR 33,500 million (including 33,500,000 shares, each at par value of IRR 1,000), which through the following steps reached sum of IRR 40,000,000 million. Capital Increase Finance Source Date of Increase % of Increase Amount Reassessment of fixed assets Special Participating Bonds – subject of Article (93) of 3rd Development Plan Reassessment of fixed assets and conversion FC assets & liabilities Shareholders’ Cash Contribution Retained profit Reassessment of fixed assets Retained profit 01.09.1993 01.09.2001 10.08.2005 26.04.2011 24.06.2012 23.09.2012 29.04.2014 1,706 104,8 957,3 22,1 25 65 20,8 Million Rials 571,500 634,000 11,861,000 2,900,000 4,000,000 13,100,000 6,900,000 New Capital Amount Million Rials 605,000 1,239,000 13,100,000 16,000,000 20,000,000 33,100,000 40,000,000 29-1-1- For IRR 11,861 billion increase in the capital related to the year 2005, sum of IRR 1,224 billion was supplied out of legal changes in exchange rates and sum of IRR 10,637 billion was supplied out the reassessment of fixed assets of the bank. 29-2. The composition of shareholders at the balance sheet is as follows: March 20, 2015 % # of Shares Provincial Justice Share Investment Company (PJS) Government of I.R. of Iran Social Security Org. Saba Tamin Investment Co. (Public Joint Stock) Bank Mellat Personnel Future Security Fund Personnel preferred shares Iran Overall Distribution Co. Moin Atieh Khahan Cooperative Co. Shirin Asal Co. Oil Retirement Fund Investment Co. Mellat Financial Group Co. Iranian National Investment Co. Kohan Tejarat Mehran Co. Mellat Insurance Co. Other shareholders 11,999,999,797 7,621,893,854 3,997,007,592 1,560,907,558 2,426,176,841 1,218,382,283 651,288,358 710,575,223 483,397,223 484,632,277 1,534,781,637 444,562,983 422,733,678 0 6,443,660,696 40,000,000,000 30 19.05 9.99 3.90 6.07 3.05 1.63 1.78 1.21 1.21 3.84 1.11 1.06 0 16.11 100 March 20, 2015 % # of Shares Number of Shareholders: Legal Entities Real Persons 441 46,987 47,428 0.93 99.07 100 March 20, 2014 % # of Shares 9,929,999,882 6,507,690,519 3,307,523,797 2,147,690,123 1,710,117,267 1,312,266,484 650,271,205 588,001,000 382,761,204 422,999,999 1,302,083,619 368,043,095 0 337,055,271 4,133,496,535 33,100,000,000 30 19.66 9.99 6.49 5.17 3.96 1.96 1.78 1.16 1.28 3.93 1.11 0 1.02 12.49 100 March 20, 2014 % # of Shares 187 38.084 38.271 0.49 99.51 100 29-3- With respect to resolutions adopted in the Extraordinary General Meeting, dated February 15, 2014, the Bank’s Capital was increased to IRR 40,000 billion from IRR 33,100 out of the retained profit, and was registered at the Registry of Companies on April 29, 2014. 29-4. Capital Adequacy Ratio Capital adequacy ratio, which is obtained by dividing the Bank’s basic capital by weighted assets expressed as its risk percentage, as required by Basel Committee, subject of Approval No. BM/1911, dated February 05, 2004, and Circular No. 89/79378, dated July 06, 2010 has been calculated at the balance sheet date as detailed below March 20, 2015 Calculated Central Bank Million Rials Million Rials 15,691,500 15,691,500 15,158,354 15,158,354 2,159,140 2,159,140 3,897,819 3,897,819 16,976,440 16,976,440 53,883,253 53,883,253 Bank Paid-out capital Legal reserve Other reserves Reassessed realized balance (approved by auditor and legal inspector) Retained profit Total principal capital 29-4-1 29-4-2 March 20, 2014 Bank Million Rials 15,691,500 11,521,147 1,964,406 0 1,637,776 30,814,829 General reserve for re-assessed receivables & reserves of fixed assets Less: Tier 2 capital adjustments Total complementary capital Less: Investments Total basic capital after deduction of investments 32,112,423 (0) 32,112,423 (2,087,464) 83,908,212 35,235,058 (0) 35,235,058 (2,087,464) 87,030,847 32,269,531 (1,454,702) 30,814,829 (2,087,464) 59,542,194 Total risk-weighted assets (not 29-5) Capital adequacy ratio (%) 936,006,289 8.96 1,185,949,984 7.34 948,527,860 6.28 Page 37 of 50 Bank Mellat – Financial Statements March 20, 2015
38. 29-4-1 . Table of reassessed realized balance of fixed assets – March 2015: Title/Year Depreciated fixed assets (reassessed 1992) Sold fixed assets – real estates (reassessed 1992) Depreciated fixed assets (reassessed 2004) Sold fixed assets – real estates (reassessed 2004) Sold fixed assets – key-money (reassessed 2004) Sold fixed assets – (reassessed 1992) Total Until 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Total 77,723 17,282 16,677 16,094 15,530 14,987 14,462 13,956 13,468 12,996 12,541 225,716 79,902 869 529 3,511 2,355 3,625 2,557 1,017 1,170 9,317 508 105,360 0 321,125 309,305 298,352 284,800 274,301 261,740 249,938 240,384 231,225 211,847 2,683,017 0 16,585 3,651 88,843 15,164 84,585 75,452 23,053 21,293 322,430 5,419 656,475 0 2,160 14,883 26,909 16,887 0 0 0 0 12,593 0 73,632 0 0 0 0 0 0 0 32,486 54,226 66,531 576 153,819 157,625 358,021 345,045 433,709 334,736 377,498 354,211 320,450 330,541 655,092 230,891 3,897,819 29-4-2- 10% net profit (legal stipulation of distribution of profit to shareholders) out of retained profit at end of fiscal year was deducted and was considered in the calculation of the principal capital. 29-5- Risk-Weighted Assets March 20, 2015 Assets Cash balance Funds in transit Receivables from central bank Receivables from Bank Receivables from Government Governmental & central Bank Securities Investments & partnerships (net) Governmental facilities (net) Non-public facilities, secured by the government (net) Non-public facilities Granted housing facilities Outstanding receivables Fix assets Debtors for time FC L/Cs & drafts Other Assets Total Assets Obligations for L/Cs after deduction of advances Obligations for under-1-year guarantees after deduction of cash deposit Obligations for over-1-year guarantees after deduction of cash deposit Other obligations (non-public) Other obligations (companies’ participating bonds) Other obligations (inter-banks) Other obligations (public) Total Obligations Total Risk-Weighted Assets Million Rials 15,709,484 51,122 128,116,592 82,545,797 63,426,103 Conversion Risk Factor Factor Percent 0 20 0 20 0 Risk adjusted assets Million Rials 0 10,224 0 16,509,159 0 Assets Million Rials 15,109,688 19,986 119,728,582 104,109,488 51,304,360 Restated March 20, 2014 Conversion Risk Factor Factor Percent 0 20 0 20 0 1,540,683 - 0 0 3,944,783 27,274,620 232,928,570 - 100 0 27,274,620 0 27,034,301 287,190,837 1,151,961 - 0 0 13,650,803 0 0 343,097,408 94,598,879 46,767,992 60,502,228 8,966,591 240,435,172 - 100 50 100 100 100 100 343,097,408 47,299,440 46,767,992 60,502,228 8,966,591 240,435,172 239,918,008 64,411,902 16,617,829 54,356,336 10,026,600 165,824,956 100 50 100 100 100 100 239,918,008 32,205,951 16,617,829 54,356,336 10,026,600 165,824,956 790,862,834 1,173,248,459 20 100 3,555,514 24,065,239 1,347,113,202 17,777,569 - Risk adjusted assets Million Rials 0 3,997 0 20,821,898 0 - 20 68,484,673 50 83,960,912 100 34,295,181 11,830 153,884,161 4,813,048 14,810,424 123,379,258 20 34,242,337 18,862,875 50 24,675,852 100 83,960,912 48,282,542 100 100 48,282,542 50 50 8,573,795 29,295,181 50 50 7,323,795 20 0 20 0 473 0 11,830 50,856,209 20 0 20 0 473 0 145,143,455 936,006,289 294,753,134 1,468,001,593 100 # Share March 20, 2015 Cost Price 1,534,781,637 27,892 30,524 1,534,840,053 1,574,965 23 29 1,575,017 Page 38 of 50 Bank Mellat – Financial Statements March 20, 2015 9,431,438 94,527,147 948,527,860 30- Shares of Parent Company Owned by Subsidiaries Shares of Parent Company Owned by Subsidiaries at the date of balance sheet are as follows: Mellat Financial Group Co. Mellat Partnership Behsaz Co. Behsazan Co. Total 100 100 100 432,466,445 1,779,579,647 0 27,034,301 287,190,837 854,000,713 20 100 74,052,119 0 100 100 March 20, 2014 Cost Price 1,406,937 26 30 1,406,993
39. 31 . Reserves Balance of reserves includes the following items: Group Local legal reserve Legal reserve abroad Other Local legal reserves Other legal reserve abroad Bank March 20, 2015 Million Rials 16,458,918 122,110 123,555 78,738 March 20, 2014 Million Rials 12,492,749 121,481 90,185 61,670 March 20, 2015 Million Rials 15,036,245 122,110 3,137 78,738 March 20, 2014 Million Rials 11,399,666 121,481 3,137 61,670 16,783,320 12,766,085 15,240,229 11,585,953 33-1- Discrepancy in the note of reserves is due to compliance with international standards of branches abroad, and to this end, the branches’ auditors have given their attestation. 32. Capital of subsidiaries supplied out of surplus due to re-assessment of fixed assets Group Fixed assets reassessment surplus March 20, 2015 Million Rials 420,484 March 20, 2014 Million Rials 306,777 420,484 306,777 33. Differential of Conversion of FC due from Foreign Operations Group Differential due from conversion of FC Assets & Liabilities Bank March 20, 2015 March 20, 2014 March 20, 2015 March 20, 2014 Million Rials Million Rials Million Rials Million Rials 3,580,406 3,736,755 2,077,265 1,899,599 3,580,406 3,736,755 2,077,265 1,899,599 33-1. Toward execution of clause 4-A and 4-C of the Circular No. 1844/BM, dated January 12, 2004, issued by the Central Bank of I.R. of Iran, the differential of conversion of assets and liabilities of the branches abroad was calculated and recorded in the accounts. 33-2. Increase in the differential due from conversion of FC Assets & Liabilities is due to exercising exchange rates in the year 2015. 34. Minority Share Group Capital Reserves Accumulated differential of FC conversion Accumulated profit & loss March 20, 2015 March 20, 2014 Million Rials 988,283 52,077 780,808 181,790 2,002,958 Million Rials 683,682 51,155 987,992 364,537 2,087,367 35. Granted Profit of Facilities Group Installment sale Civil Participation Reward contract Lease purchase Capital bailment Regular notified governmental facilities Factoring Usury (sale) Forward purchasing Retention money of IRR Facilities 35-1 Bank March 20, 2015 March 20, 2014 March 20, 2015 March 20, 2014 Million Rials 5,517,440 33,184,153 1,835,882 183,601 3,756,417 186,048 497,076 11,178,195 1,152 21,383,333 77,723,297 Million Rials 5,485,881 29,312,711 2,194,080 275,394 3,657,161 192,777 237,533 4,123,569 3,082 17,811,227 63,293,415 Million Rials 5,259,567 33,184,153 1,835,882 183,601 3,756,417 186,048 497,076 11,178,195 1,152 21,579,599 77,661,690 Million Rials 5,267,847 29,312,711 2,194,080 275,394 3,657,161 192,777 237,533 4,123,569 3,082 18,817,635 64,081,789 35-1- Earning due from the Retention money of IRR. Facilities is related to the delay penalty received in consideration of all bank contracts. Page 39 of 50 Bank Mellat – Financial Statements March 20, 2015
40. 36 . Sales of Goods and Earning Due from Service Provision Group Sales of FC by Mellat Exchange Sales of products Earning due from service provision Other March 20, 2015 March 20, 2014 Million Rials Million Rials 18,262,862 4,717,926 6,583,640 887,420 30,451,848 11,304,053 4,832,011 4,733,555 383,546 21,253,165 37. Profit due from Investments & Deposits Group Profit due from investment in the shares of subsidiaries subject to consolidation Profit due from investment in the shares of companies March 20, 2014 Million Rials March 20, 2015 Million Rials March 20, 2014 Million Rials 0 0 8,566,660 5,209,734 4,621,079 2,353,812 1,977,349 418,647 37-1 Profit due from investment deposit and participating bonds and legal deposits Profit due from/to sales of shares Loss due to decrease in the value of investment in the shares of companies Earning due from sales of preemptive certificate Net profit due to investment in the shares of companies 37-2 Bank March 20, 2015 Million Rials 4,621,079 2,353,812 10,544,009 5,628,381 13,767,261 6,027,575 12,322,561 5,405,612 462,210 3,448,330 (632,123) (0) (9,192) (0) 826,440 78,102 826,440 78,102 19,044,867 11,907,819 23,683,818 11,112,095 0 37-1. Out of IRR 8,567 billion dividend of the subsidiaries subject to consolidation, sum of IRR 6,999 billion is related to profit of Mellat Financial Group Co., IRR 870/- billion is related to the profit of Fanavaran Behsazan Houshmand Farda Co., and IRR 698 billion is related to profit of Mellat Partnership Behsaz Co. 37-2. Bank’s earning in consideration of profit of investments deposits and participating bonds is as follows: Bank Profit due from deposits: Profit due from legal deposit Profit due from deposits at banks Total profit due from deposits Profit due from investment in participating bonds March 20, 2015 Million Rials March 20, 2014 Million Rials 905,984 9,983,498 10,889,482 1,433,079 12,322,561 720,484 3,029,656 3,750,140 1,655,472 5,405,612 38. Cost price of sold goods and rendered service Group Consuming materials Direct labor Production overhead Cost unabsorbed in production Total production costs Increase in inventory of goods in progress Wastages Cost price of production Purchase of finished goods Increase in inventory of produced goods Cost price of sold goods Cost price of rendered services Cost price of sold FC Cost price of sold goods March 20, 2015 March 20, 2014 Million Rials Million Rials 907,319 1,304,427 851,377 (11,122) 3,052,001 (103,576) (386) 2,948,039 3,338,830 105,585 6,392,454 6,242,246 14,792,331 27,427,031 707,045 851,908 661,890 (7,123) 2,213,720 (129,450) (315) 2,083,955 3,227,576 (1,106,777) 4,204,754 3,224,394 11,151,709 18,580,857 Page 40 of 50 Bank Mellat – Financial Statements March 20, 2015
41. 39 . On-Account Profit of Investment Deposits Group Profit due from time deposits Profit due from short-term deposits: Profit due from special short-term deposits 1-year 2-year 3-year 4-year 5-year Profit due from certificate of 1-year public investment March 20, 2015 Million Rials 30,208,614 1,835,653 30,369,035 5,647,690 1,415,074 202,513 23,349,655 2,383,387 95,411,621 Bank March 20, 2014 Million Rials 14,838,198 2,643,417 7,638,641 2,077,259 1,191,723 175,664 27,093,884 3,608,908 59,267,694 March 20, 2015 Million Rials 30,208,614 1,835,653 30,367,547 5,647,690 1,415,074 202,513 23,674,728 2,383,387 95,735,206 March 20, 2014 Million Rials 14,838,198 2,643,417 7,637,385 2,077,259 1,191,723 175,664 27,298,642 3,608,908 59,471,196 39-1- On-account profit paid to the depositors for IRR 95,735 billion includes IRR 5,035 related to Moj Scheme Deposits, which has been considered in the reserve accounts with respect to the fact that the deposits have not reached their maturity. 39-2. On-Account Interest Rates of Investment Deposits are as Follows: Bank Year ended on March 20, 2015 10 14 16 16 18 22 22 22 22 22 22 Regular short-term and house purchase 3-month special short-term 4-month special short-term 6-month special short-term 9-month special short-term 1-year 2-year 3-year 4-year 5-year Certificate of public investment Year ended on March 20, 2014 7 10 12 12 15 17 18.5 19 19.5 20 20 40. Differential of Final & On-Account Profits of Investment Deposits The differential of final & on-account profits of time investment deposits of customers have been calculated as per Circular Letter No, 22243/BM, dated April 26, 2009, issued by Central Bank of I.R. of Iran, as follows: March 20, 2015 Million Rials Million Rials 440,520,814 62,217,670 11,220,551 513,959,035 Average Joint-Consumptions Granted facilities Investments Participating bonds Less: Net Investors’ Resources: Ordinary Average short-term Special Average short-term Average 1-year Average 2-year Average 3-year Average 4-year Average 5-year Average investment deposits of other banks Total average investment deposits Average legal deposit of investment deposits Net depositors’ resources Bank resources % of Depositors’ profit from joint earnings Joint Incomes: Profit due from granted facilities Profit due from investments (Except for statuary deposit) Profit due from investments Total joint profit Shareholders’ profit share Bonus of legal deposit of investment deposits Depositors’ interests Received attorney’s fee Interests payable to depositors On-account profit paid-out to depositors during year (Note 40) Deficit (surplus) of profit paid-out to depositors 268,965,651 5,042,426 137,997,250 22,845,074 5,932,991 1,055,279 107,785,477 17,878,010 567,502,158 (63,953,853) 503,548,305 10,410,730 172,793,512 7,529,611 70,738,863 9,485,743 6,405,851 1,000,618 129,623,464 11,805,306 409,382,968 (45,510,278) 363,872,690 66,981,094 100,439,524 98,405,026 887,632 99,292,658 (14,187,554) 85,105,104 (95,735,206) (10,630,102) 64,081,789 2,318,949 8,072,663 74,473,401 62,895,668 486,330 63,381,998 (10,234,574) 53,147,424 (59,471,196) (6,323,772) 77,661,690 9,983,498 12,794,336 Page 41 of 50 Bank Mellat – Financial Statements March 20, 2015 March 20, 2014 Million Rials 388,375,299 31,036,859 11,441,626 430,853,784
42. 40-1 . Attorney’s fee amounting to 2.5% of the average investment deposits has been calculated (Bank’s approved attorney’s fee in the year end on March 20, 2015: 2.5%) 41. Received Profit & Retention Money Profit & Retention Money of Non-Joint Earnings are as follows: Group Profit (branches abroad) Retention money from other receivables Retention money out of granted FC facilities/ non-governmental Profit out of granted FC facilities/ non-governmental Profit out of FC investments and FC deposits FC debentures Other Bank March 20, 2015 Restated March 20, 2014 March 20, 2015 Restated March 20, 2014 Million Rials 237,933 21,259,024 1,428,666 16,255,091 1,119,088 3,533,172 23 43,832,998 Million Rials 196,417 12,514,573 509,321 11,920,183 1,119,198 1,205,017 296 27,465,005 Million Rials 237,933 21,259,026 1,428,666 16,255,091 1,119,088 3,533,670 23 43,833,497 Million Rials 196,417 12,514,575 509,321 11,920,183 1,119,198 1,205,515 297 27,465,506 42. Received Commission Received Commissions include the following items: Group Commission of opened L/Cs Commission of issued guarantees Commission of received bills Bank drafts Commission (SHETAB) Commission of interest-free facilities Commission of branches abroad Commission of governmental accounts Received Commission of facilities of junk vehicles Commission of current accounts (bounced cheques) Commission of insurance services Commission of Rials and FC drafts Commission of bad cheques Commission of expert’s fee concerning plans Commission of preparation of report on credit data Credit card subscription fee Commission of securities sales agents Other Bank Services Bank March 20, 2015 March 20, 2014 March 20, 2015 March 20, 2014 Million Rials Million Rials Million Rials Million Rials 335,712 2,379,316 212,818 1,505,383 1,019,864 14 93,048 34 81,193 163,839 403,169 38,784 43,056 27,166 8,784,512 40 3,284,619 18,372,567 432,432 1,801,692 205,680 803,192 1,103,918 2,211 69,099 16,703 66,779 112,686 81,692 35,190 36,965 32,075 8,606,059 62,500 309,549 13,778,422 335,712 2,379,337 212,818 1,505,383 1,019,864 14 93,048 34 81,193 163,839 403,169 38,784 43,056 27,166 8,784,512 40 3,283,301 18,371,270 432,432 1,801,757 205,680 803,192 1,103,918 2,211 69,099 16,703 66,779 112,686 81,692 35,190 36,965 32,075 8,606,059 62,500 309,549 13,778,487 42-1- This commission related to yearly subscription of money lending credit card and the profit related to money lending facilities are reflected in the Note (35) (Profit of granted facilities’). 43. Other Non-Joint Earnings Group Result of Local FC transactions Result of FC transactions (branches abroad) Result of conversion of FC accounts Miscellaneous earnings 43-1 Miscellaneous earnings (branches abroad) Bank March 20, 2015 March 20, 2014 March 20, 2015 March 20, 2014 Million Rials Million Rials Million Rials Million Rials 262,635 12,271 240,473 3,000,927 9,311 3,525,617 487,196 40,874 9,261,135 3,322,683 16,292 13,128,180 262,635 12,271 0 2,443,082 9,311 2,727,299 487,196 40,874 7,996,393 1,240,318 16,292 9,781,073 43-1. Miscellaneous Earnings are as follows: Group Post, Telegraph & Telephone Profit due from selling fixed assets & scraps Earning due from rentals Card Issuance Expert’s fee and assessment of assets Other Bank March 20, 2015 March 20, 2014 March 20, 2015 March 20, 2014 Million Rials 3,734 595,754 22,354 158,248 232,048 1,988,789 3,000,927 Million Rials 112,767 350,074 17,422 165,835 186,576 2,490,009 3,322,683 Million Rials 3,734 420,373 22,354 158,248 232,048 1,606,325 2,443,082 Million Rials 3,913 267,138 17,583 165,835 186,576 599,273 1,240,318 Page 42 of 50 Bank Mellat – Financial Statements March 20, 2015
43. 43-1-1- Sum of IRR 1 ,606 billion in the entry of other, includes IRR 792 billion in consideration of yearly profit due from returned annulled long-term deposits. 44. Admin. & General Expenses Group Personnel expenses Admin. Expenses 44-1 44-2 Bank March 20, 2015 March 20, 2014 March 20, 2015 March 20, 2014 Million Rials Million Rials Million Rials Million Rials 18,115,783 9,555,450 27,671,233 13,451,660 13,104,629 26,556,289 17,337,043 9,725,655 27,062,698 12,790,189 13,813,327 26,603,516 44-1. Personnel expenses are constituted of the following items: Group Salary and wage Allowances 44-1-1 Welfare & groceries & health Savings & retirement Personnel retirement costs Bonus Termination benefits Commission plan Leave of absence redemption cost Expenses of expatriate personnel Bank March 20, 2015 March 20, 2014 March 20, 2015 March 20, 2014 Million Rials 3,272,125 6,454,569 952,984 2,294,435 1,058,041 464,088 1,519,534 1,969,015 49,382 81,610 18,115,783 Million Rials 2,722,732 4,647,790 779,107 1,809,021 860,359 382,594 765,869 1,366,668 31,890 85,630 13,451,660 Million Rials 2,689,840 6,351,414 945,966 2,255,615 1,057,598 464,088 1,472,515 1,969,015 49,382 81,610 17,337,043 Million Rials 2,181,039 4,624,543 776,448 1,771,826 860,359 352,923 743,584 1,361,947 31,890 85,630 12,790,189 44-1-1- The figures in the allowances are mainly related to overtime, evening overtime, cashier commission allowance and other casual payments. 44-2. Admin. Expenses are constituted of the following items: Group Contractual services 44-2-1 Consumables & accessories Communications and telecommunications Rentals and duties Water, power & fuel Traveling and mission Calculating machines Depreciation cost Other items Admin. Expenses of branches abroad Bank March 20, 2015 March 20, 2014 March 20, 2015 March 20, 2014 Million Rials 4,163,757 935,140 714,336 371,273 342,514 204,223 266,191 1,682,169 811,929 63,918 9,555,450 Million Rials 3,509,012 755,100 392,660 241,045 253,584 177,585 186,660 1,218,814 6,299,453 70,716 13,104,629 Million Rials 5,020,731 916,719 714,336 317,815 320,006 198,545 266,191 1,429,737 477,657 63,918 9,725,655 Million Rials 4,440,911 730,844 392,660 229,420 239,097 162,487 186,660 1,139,461 6,221,071 70,716 13,813,327 44-2-1- The figures in the contractual services are mainly related to costs of health and treatment of personnel, outsourcing services contracts, buildings’ small repairs. 45. Expense of Doubtful Accounts Group Expense of particular doubtful accounts 45-1 Expense of general doubtful accounts 45-2 Bank March 20, 2015 March 20, 2014 March 20, 2015 March 20, 2014 Million Rials 4,069,918 1,052,232 5,122,150 Million Rials 7,915,692 3,019,521 10,935,213 Million Rials 4,069,917 890,426 4,960,343 Million Rials 7,915,691 3,240,620 11,156,311 Page 43 of 50 Bank Mellat – Financial Statements March 20, 2015
44. 45-1 . The reserve of particular doubtful accounts is as detailed below: Description Year-end balance of granted facilities Less: Value of Securities * Coefficient: Properties, real estates & machinery Basic Balance used for calculation of particular reserve Basic coefficient used for calculating particular reserve Reserve of particular doubtful accounts Reserve of particular doubtful accounts of previous year Written off receivables Expense of particular reserve of current year Bank Passed due date Million Rials 6,747,502 Arrears Million Rials 6,683,674 Doubtful Million Rials 88,510,144 Total Million Rials 101,941,320 (3,117,851) 3,629,651 10% 362,965 (250,283) (0) 112,682 (2,068,434) 4,615,240 20% 923,048 (1,470,193) (0) (547,145) (12,509,123) 76,001,021 50% up to 100% 47,815,008 (43,285,513) (25,115) 4,504,380 (17,695,408) 84,245,912 49,101,021 (45,005,989) (25,115) 4,069,917 45-2. The cost of General Doubtful Accounts: The cost of the general doubtful accounts has been calculated as follows: Bank March 20, 2015 Million Rials 1,132,928,546 Balance of granted facilities at the end of the financial period being reported Less: Balance of granted facilities for which particular reserve has been considered Basic Balance used for calculation of general reserve Reserve of general doubtful accounts (1.5%) Reserve of general doubtful accounts of previous year Expense of general doubtful accounts (101,941,320) 1,0 30,987,226 15,464,808 (14,574,382) 890,426 46. Expense of Personnel’s Retirement Benefits (Actuary) Obligations in respect of Expense of Personnel’s Retirement Benefits on the basis of calculations of actuary are as follows: Group Bank March 20, 2015 March 20, 2014 March 20, 2015 March 20, 2014 Million Rials Million Rials Million Rials Million Rials 0 300,000 0 300,000 Expense of personnel’s retirement benefits (Actuary) 47. Financial Expenses Financial expenses are constituted of the following items: Group Expense of received facilities Expense of banking service fees Bank March 20, 2015 March 20, 2014 March 20, 2015 March 20, 2014 Million Rials Million Rials Million Rials Million Rials 11,678,871 3,619,111 15,297,982 7,298,444 2,814,204 10,112,648 10,231,569 3,441,870 13,673,439 7,237,199 2,797,692 10,034,891 47-1- Out of IRR 10,232 billion of the Expense of received facilities, sum of IRR 4,973 billion is related to FC resources received from the central Bank. 48. Other Expenses Group Cost due to money conversion Interest-free accounts bonuses Total Bank March 20, 2015 March 20, 2014 March 20, 2015 March 20, 2014 Million Rials Million Rials Million Rials Million Rials 4,802,466 912,626 5,715,092 0 781,510 781,510 4,802,466 865,827 5,668,293 0 758,879 758,879 48-1. By virtue of Article (2) of the Directive concerning bonuses to be granted to the interest-free savings deposits, approved by the Enactment of 534th Meeting, dated August 04, 1984 of the Money and Credit Council, the maximum mount to be used for granting bonuses to the holders of interest-free savings deposits will be designated by the Money and Credit Council. Page 44 of 50 Bank Mellat – Financial Statements March 20, 2015
45. 49 . Annual Adjustments 49-1- Annual adjustments include the following items: Group Adjustment of provision Provision of FC assets and liabilities Branches abroad Deposits Guarantee Fund Actuary cost Sales of other assets Adjustment due to consolidation Profit due from the Government - preceding year Retention money of participating bonds Preceding year tax cost March 20, 2015 Million Rials 0 0 534 (1,218,000) (274,000) (138,809) (386,299) 3,968,691 1,193,718 (1,030,000) 2,115,835 Bank March 20, 2014 Million Rials (0) 928,665 70,588 (1,218,000) (274,000) (138,809) 1,111,131 3,968,691 1,193,718 (1,030,000) 4,611,984 March 20, 2015 Million Rials 0 0 534 (1,218,000) (274,000) (138,809) 0 3,968,691 1,193,718 (1,030,000) 2,502,134 March 20, 2014 Million Rials 735,303 928,665 70,588 (1,218,000) (274,000) (138,809) 0 3,968,691 1,193,718 (1,030,000) 4,236,156 49-2 - In order to provide a better view of financial statements, comparative item in relation to yearly adjustments and other classified adjustments have been restated as follows: Adjusted Classified Adjustments Annual Adjustments Balance Before Balance- 2014 Description Adjustment -2014 Debit Credit Debit Credit Receivables due from the 40,414,003 0 3,968,691 44,382,694 Government Granted facilities and receivables 567,343,057 0 0 0 (1,030,000) 566,313,057 from non-public sector Participating bonds & other similar 14,235,197 1,992,423 16,227,620 bonds Other assets 98,288,799 (1,992,423) 1,194,252 (138,809) 97,351,819 Liability to Central Bank (277,661,295) 42,906,153 (4,381) (234,759,523) Demand deposits (266,960,459) 4,381 (266,956,078) Items in transit (2,207,512) 7,911,003 (0) 5,703,491 Reserves and other liabilities (18,952,340) (50,817,156) (1,492,000) (71,261,496) Retained profit (14,837,776) 2,660,809 (5,162,943) (17,339,910) 52,813,960 (52,813,960) 7,823,752 (7,823,752) 50. Year-End Retained Profit LEGAL DUTIES: 50-1- According the resolution of Annul Extraordinary General Meeting of Shareholders, held on July 21, 2014, related to the fiscal year ended on March 20, 2014, sum of IRR 13,200 billion was distributed among the shareholders. 50-2- Toward execution of Article (115) of the Bank’s Articles of Association, it is suggested that 10% of the net consolidated profit be distributed and the remainder of retained profit be credited to the capital adequacy reserve account so that after proceeding with the preliminary capital increase, the capital of the bank may be increased. 51. Profit Per Share Bank Pre-tax profit Tax effect Profit after tax deduction Profit per share (40,000 million shares) March 20, 2015 Million Rials 19,177,595 (874,140) 18,303,455 458 Pre-tax profit Tax effect Profit after tax deduction Profit per share (40,000 million shares) March 20, 2015 Million Rials 16,125,646 (1,446,957) 14,678,689 382 March 20, 2014 Million Rials 17,894,160 (1,101,780) 16,792,380 420 Group 51-1- Profit per share after deduction of the parent company’s shares, was calculated as owned by the subsidiary. Page 45 of 50 Bank Mellat – Financial Statements March 20, 2015 March 20, 2014 Million Rials 24,041,392 (2,323,640) 21,717,752 566
46. 52 . Reconciliation Statement of Profit Prior to Deduction of Income Tax Statement of reconciliation of pre-tax profit with net cash in-flow due from operating activities is as follows: Group Bank Million Rials 16,306,085 1,758,672 1,386,520 19,451,277 Restated March 20, 2014 Million Rials 24,291,795 1,395,354 705,690 26,392,839 Net increase (decrease) in operating liabilities Liability to Central Bank Liability to banks and credit institutes Sight deposits Savings deposits & similar deposits Time investment deposits Other deposits Operating part of other liabilities Items in transit Liability due to time FC L/Cs and drafts Total 16,731,544 4,730,895 (56,256,497) (2,542,193) 82,464,143 (8,427,049) 19,242,733 26,188,015 (12,044,785) 70,086,806 Net (increase) decrease in operating assets Receivables from Central Bank Receivables from banks and credit institutes Receivables from the Government Granted facilities and receivables from governmental sector Granted facilities and receivables from other persons Granted facilities to Group's Member Companies Participating bonds and other similar bonds Operating share of other assets Items in transit Debtors due to time FC L/Cs and drafts Investment Total Cash in(out)-flow due from operating activities (56,007,769) 41,070,867 (8,830,024) 32,986,543 (92,244,073) 0 (2,362,552) 429,914 5,703,491 11,864,113 5,351,664 (62,037,826) 27,500,257 March 20, 2015 Operating Activities Pre-tax profit Depreciation expense Expense of personnel termination benefits Million Rials 19,177,595 1,460,388 1,304,563 21,942,546 Restated March 20, 2014 Million Rials 17,894,160 1,185,976 647,404 19,727,540 29,228,505 3,919,362 (12,029,502) (21,510,664) 142,562,017 (6,704,638) 59,077,038 0 (1,785,031) 192,757,087 16,731,544 4,730,896 (58,225,914) (3,318,908) 82,906,569 (7,622,207) 19,163,610 26,188,015 (12,044,785) 68,508,820 29,228,505 6,088,018 (9847,452) (20,741,838) 142,066,097 (17,658,554) 60,471,398 0 (1,785,031) 182,821,143 (15,493,925) (7,219,189) (10,342,938) (35,591,338) (108,428,143) 0 32,791,104 (52,578,123) 645,688 1,758,255 (5,921,808) (200,380,417) 18,769,509 (56,007,766) 40,996,834 (8,830,024) 32,986,543 (93,037,151) (174,789) 2,033,481 (3,953,307) 5,703,491 11,864,113 (2,962,249) (71,380,824) 19,070,542 (15,493,928) (7,605,404) (10,342,938) (35,591,338) (107,266,787) (2,722,111) 29,999,426 (44,699,543) 645,688 1,758,255 690,311 (190,628,369) 16,920,314 March 20, 2015 52-1- As per note set out in the Appendix No. (3) of Accounting Standard No, 2, regarding that in the sample profit and loss, approve by the Money and Credit Council, no operating profit is used, therefore, in the present reconciliation statement, pre-tax profit has been selected for reconciliation with net cash flow due to operating activities. It is understood that in this case, the items which are separately classified in other major entries, have been considered in converting pre-tax profit to the net cash flow due to operating activities. 53. Net Increase (Decrease) in the Cash Fund Net increase (decrease) in the cash fund reflected in the statement of cash flow is as detailed below: Group Cash Current at Central Bank Current local Central Bank - branches abroad Our Balance at Local banks after clearing Balance of Local banks kept by us after clearing Year-end cash balance Group Bank March 20, 2015 March 20, 2014 March 20, 2015 Bank March 20, 2014 Changes in March 2015 Changes in March 2015 Million Rials 22,056,529 2,984,864 254,797 465,903 (181,899) 25,580,194 Million Rials 20,249,716 7,588,679 277,540 826,175 (2,727,215) 26,214,893 Million Rials 15,666,708 2,984,864 254,797 465,903 (181,899) 19,190,372 Million Rials 14,980,894 7,588,679 277,540 120,914 (2,727,215) 20,240,811 Million Rials 1,806,813 (4,603,815) (22,742) (360,272) 2,545,316 (634,701) Million Rials 685,814 (4,603,815) (22,742) 344,988 2,545,316 (1,050,439) 54. Non-Cash Transactions Major non-cash transactions during the year are as follows: Group Mellat Financial Group Co. Mellat Partnership Behsaz Co. Behsazan Co. Secure Infrastructure of Transactional Services Co. Fanavaran Houshmand Behsazan Farda Group Co. March 20, 2015 Million Rials 4,408,157 146,260 0 0 20,850 4,575,267 March 20, 2014 Million Rials 2,970,068 244,411 88,787 8,500 0 3,311,766 Page 46 of 50 Bank Mellat – Financial Statements March 20, 2015
47. 54-1- Non-cash transactions are mainly related to capital increase out of accelerated claims , acquiring non-cash fixed assets and other cases. 55- Comparison of recommended percentages set out in Article (10) supervising monetary and credit policies (Central Bank) and credit operations for the year 2015. % Economic Sector Recommended Percentage 20 37 25 8 10 100 Agriculture Industry and Mine Building & Housing Services and business Export operation 4.06 20 -4.45 80.39 0 100 56. Obligations Balance of the above account on the date of balance sheet, includes the following items: Group March 20, 2015 Million Rials 49,953,647 142,536,792 269,514,606 2,637,477 464,642,523 Obligations due to opened L/Cs Obligations due to Rial /FC issued guarantees Other obligations Administered funds and similar cases Bank March 20, 2014 Million Rials 64,241,431 142,289,255 251,124,007 2,831,756 460,486,449 March 20, 2015 Million Rials 49,953,647 142,536,792 269,514,606 2,637,477 464,642,523 March 20, 2014 Million Rials 64,241,431 142,289,255 251,124,007 2,831,756 460,486,449 56-1. Constituents of obligations due to L/Cs are as follows: Group Bank’s obligations due to opened L/Cs Branches’ obligations due to opened L/Cs by branches abroad Bank’s obligations due to opened Local L/Cs March 20, 2015 Million Rials 43,766,899 2,960 6,183,788 49,953,647 Bank March 20, 2014 Million Rials 57,430,629 2,565 6,808,237 64,241,431 March 20, 2015 Million Rials 43,766,899 2,960 6,183,788 49,953,647 March 20, 2014 Million Rials 57,430,629 2,565 6,808,237 64,241,431 56-2. Obligations due to issued guarantees and subscriptions are as follows: Group Bank’s obligations due to issued guarantees and subscriptions – IRR Bank’s obligations due to issued guarantees and subscriptions – FC Branches’ obligations due to issued guarantees Branches’ obligations due to issued counter-guarantees - FC March 20, 2015 Million Rials 94,408,548 42,420,529 126,591 5,581,124 142,536,792 Bank March 20, 2014 Million Rials 85,087,323 50,307,338 47,123 6,847,471 142,289,255 March 20, 2015 Million Rials 94,408,548 42,420,529 126,591 5,581,124 142,536,792 March 20, 2014 Million Rials 85,087,323 50,307,338 47,123 6,847,471 142,289,255 56-3. Constituents of other obligations are as follows: Group Obligations due to contract concluded with Management & Planning Org. Obligations due to FC concluded contracts Obligations due to concluded transactions contracts Obligations in consideration of expired contracts Bank’s obligations due to guaranteeing participating bonds Bank’s obligations due to credit cards Bank’s obligations for received funds from National development Fund / FC Bank March 20, 2015 March 20, 2014 March 20, 2015 March 20, 2014 Million Rials Million Rials Million Rials Million Rials 1,627,881 1,459,708 1,627,881 1,459,708 11,824 79,822,056 2,519 44,295,181 3,785,145 11,331,893 70,947,610 2,519 39,295,181 2,577,096 11,824 79,822,056 2,519 44,295,181 3,785,145 11,331,893 70,947,610 2,519 39,295,181 2,577,096 139,970,000 125,510,000 139,970,000 125,510,000 269,514,606 251,124,007 269,514,606 251,124,007 Page 47 of 50 Bank Mellat – Financial Statements March 20, 2015
48. 56-4 . Administered funds and similar cases are as follows: Group Granted facilities out of administered funds Unused administered funds Granted funds out of inter-bank funds Granted facilities out of special interest-free deposit March 20, 2015 Million Rials 1,957,137 317,318 11,830 351,192 2,637,477 Bank March 20, 2014 Million Rials 2,134,260 333,923 11,830 351,742 2,831,756 March 20, 2015 Million Rials 1,957,137 317,318 11,830 351,192 2,637,477 March 20, 2014 Million Rials 2,134,260 333,923 11,830 351,742 2,831,756 57. Post Balance Sheet Events There have been no material post balance sheet events that would require disclosure or adjustment to these financial statements. 58. Capital Obligations & Contingent Liability 58-1- The Bank’s Capital Obligations & Contingent Liability at the Balance Sheet date include: Hotel Mashhad Moghadas (Mellat Great Hotel), for IRR 100 billion and Ilgoli of East Azarbaijan, for IRR 120 billion. Whereas there were many capital obligations, we avoided to mention all of them. 58-2- The Group’s Capital Obligations & Contingent Liability at the Balance Sheet date are as follows: Description Our guarantee instruments maintained by others Guarantee allocated credits to Behsaz Business Services Development Co. Bounced cheques received from other legal and natural persons Market making of Mahan Lease papers Bank Mellat Shares kept in trust, owned by Fars Fund Secured notes and trust instruments received from debtors In consideration of trilateral contract among bank Mellat, Mellat Leasing and Saipa In consideration of Civil Participation contract with Bank Tejarat Guarantee purchase contract of Oxin sheet and slab by Petro Fanavaran Atlas In consideration of Civil Participation contract with Hormozgan Steel Co. Guarantee instruments received from companies Bank guarantees provided to the Central Bank Bank guarantees provided to Mercantile Exchange Bank guarantees given to stock exchange Future Goods contracts Guarantee facilities of the companies under coverage Promissory notes presented to the Ministry of Finance and companies Our guarantee instruments maintained by others Total Related to Company March 20, 2015 Mellat Financial Group Mellat Financial Group Mellat Financial Group Mellat Financial Group Mellat Financial Group Mellat Financial Group Mellat Financial Group Mellat Financial Group Mellat Financial Group Mellat Financial Group Mellat Financial Group Mellat Financial Group Mellat Financial Group Mellat Financial Group Mellat Financial Group Mellat Partnership Behsaz Co. Mellat Partnership Behsaz Co. Mellat Partnership Behsaz Co. Million Rials 3,234,036 1,085,206 1,757,516 914,250 884,775 614,001 4,521,727 240,000 856,950 70,254 39,089 14,000 6,000 34,820 1,000 588,945 101 135,565 14,998,235 59-1. Bank’s transactions with affiliates during the fiscal year are as follows: Transactions subject to Article (129) of Commercial Code, as amended: Million Rials Transaction Counterparty Affiliation Mellat Financial Group Joint board member Behsazan Co. Joint board member Mellat Investment Co. Joint board member Transaction Transfer of Companies from Privatization Org. – Payment of a part of Bank’s shares Transference Fund Received facilities Issued statements for provided services Deductions of contracts On-account funds and advances Payable dividend Bank deposit profit Received hire-purchase facilities Commission - Contract of South Gas Field project Commission – contract of managerial services of supervision on granting facilities Commission on principal and supplementary contract of comprehensive banking design Commission – contract of deployment of centers of excellent at the bank Commission on contract of training and consultation and services Page 48 of 50 Bank Mellat – Financial Statements March 20, 2015 Transaction Amount (Million rial) 2,854,198 2,612,060 546,146 36,853 (358,819) (999,896) 266,377 22,382 12,143 9,676 41,195 18,276 4,622 Balance of Receivables/ Liability until the end of year (Million rial) 11,090,216 0 (1,838,117) (5,179) 0 0 0 0 0 0
49. 59-2 . Bank’s transactions with affiliates (except for companies subject to consolidation) during the reported fiscal year: Million Rials Affiliation Transaction Transaction Amount (Million rial) Joint Shareholder Reinsurance operation Sales of insurance policy Transaction of securities Transaction of securities Transaction of securities Received on-account fund Purchase of vehicle Supply of traveling expense Received on-account fund (1,142) 2 367,895 2,228,388 2,037,846 127,266 650 130 2,247 Transaction Counterparty Balance of Receivables/ Liability until the end of year (Million rial) (404) (0) (0) (0) (1) 0 0 (889) 0 MELLAT FINANCIAL GROUP Alborz Insurance Co. Sepahan Oil Co, Iran Zamin Investment Fund Atieh Mellat Investment Fund Andoukhteh Mellat Investment Fund Sorbonne North Co. Mr. Ahmad Fattahpour Academic Center for Education, Culture and Research Mr. Abdollah Ranjbar Shareholder Same Group Same Group Same Group Same Group Same Group Same Group Same Group 59-3. Transactions of parent company with affiliates are as follows: MELLAT FINANCIAL GROUP Transaction Counterparty Behsaz Business Services Development Co. Mellat Leasing Co. Mellat Investment Co. Exchange Co. Ma Insurance Co. Bank Mellat Brokerage Co. Tarh & Andisheh Behsaz Mellat Co. Tadbirgaran Co. Tadbirgaran Co. Kavosh Research Town Co. Affiliation Subsidiary Transaction Facilities receipt and repayment Leasing the Company’s branches Commission on contract and profit of bank deposit Transfer of FC funds and FC transaction Sales of insurance policies Securities transaction Collection of outstanding receivables Payment of installments of facilities Leasing offices in counties Training class – publishing books Transaction Amount 719,238 235 374,671 13,092 93,514 2,436,611 663,037 (11,758) 2,969 1,782 Balance of Receivables/ Liability until the end of year Transaction Amount 546,146 (36,853) (358,819) (999,896) Balance of Receivables/ Liability until the end of year (1,960,380) (568) (5,179) (354) 36,168 0 84,754 31,283 (169) (0) Fanavaran Houshmand Behsazan Farda Group Co. Transaction Counterparty Behsazan Co. Affiliation Transaction Issued statements for provided services Deductions of contracts On-account payments and advances Payable dividend Subsidiary 0 (1,838,117) Mellat Partnership Behsaz Co. Transaction Counterparty Affiliation Behsaman Mellat Service Co. Behsaz Leadership Industries Bank Mellat Construction Co. Bank Mellat Printing Crêpe Naz Jahan Behsaz Mofarah Mad development, Marketing & Sales Subsidiary Transaction Supply of manpower Advance –contracts Payable rental Issued statements Jeihoun & Gendarmerie projects Provision of printing services and letterheads Sales of black viel Services and leasing Issued statements 59-4. Transactions made with affiliates were according to fair value. Page 49 of 50 Bank Mellat – Financial Statements March 20, 2015 Transaction Amount 142,254 24,888 180 422,648 10,118 399,242 525 117,844 45,914 Balance of Receivables/ Liability until the end of year (6,176) 1,478 180 (50,341) (3,670) (23,650) (464) (5,369) 383,431
50. 60- Foreign Currency Status Monetary and assets and liabilities and Local FC obligations are as follows : 167,658 6,627,981 25,450,565 44,070,360 76,316,563 2015/03/20 FC Status Million Rials 7,518,118 66,652,890 433,244,798 634,030,261 1,141,446,067 2014/03/20 FC Status Million Rials 7,539,763 62,947,513 446,754,825 545,235,868 1,062,477,970 48,957 75,114,635 2,485 75,166,077 61,411,844 1,698,795 20,895,053 47,164,413 69,758,261 6,558,303 231,462,643 180,768,547 628,503,030 1,040,734,220 100,711,847 256,779,725 183,135,034 547,008,430 986,923,189 75,554,781 USD Euro 1000 Korean Won Turkish Lira 100 Japanese Yen AED Swedish krone Danish krone Other FCs Million Rials Cash balance Receivables from other banks & institutes Granted facilities Other Total FC assets 189,633,636 245,895,594 1,230,290,758 3,420,755,322 5,086,575,309 56,961,324 1,351,734,181 11,522,647,029 13,528,845,379 26,460,187,913 0 227,073,372,504 182,212,260,879 853,252,301,613 1,262,537,934,997 0 57,857,356 32,014,861 409,918,743 499,790,960 884,000 2,681,414,466 21,496,351,636 6,652,382,623 30,831,032,725 42,498,686 711,846,103 4,490,434,407 8,288,851,053 13,533,630,249 0 2,439,000 0 616,835 3,055,835 0 5,806 75,114,635 61,457,482 136,577,922 Received deposit Received facilities Other Total FC liabilities FC Status 997,867,882 612,035,002 3,546,738,001 5,156,640,885 (70,065,576) 4,355,625,100 4,664,044,455 12,958,946,330 21,978,615,884 4,481,572,029 1,865,228,572,911 56,958,087,507 889,172,805,674 2,811,359,466,091 (1,548,821,531,095) 52,954,649 374,941 416,222,768 469,552,358 30,238,602 697,996,423 0 8,211,901,827 8,909,898,250 21,921,134,476 3,015,396,753 46,672,757 8,494,038,190 11,556,107,700 1,977,522,549 1,152,497 0 22,477,891 23,630,387 (20,574,552) Bank’s obligations in consideration of opened L/Cs Bank’s obligations in consideration of issued FC guarantees and subscription Bank’s obligations in consideration of issued FC counter guarantees Bank’s obligations in consideration of contract concluded with Management & Planning Org. Bank’s obligations in consideration of concluded FC contracts Bank’s obligations in consideration of funds received from National Development Fund / FC 6,747,008 1,204,234,772 29,184,349,956 3,114,199 5,386,757,431 10,606,013 0 0 5,152,591 43,754,899 57,430,629 247,122,772 1,140,756,112 0 0 0 101,242,203 0 0 102,688 42,194,474 50,205,387 49,406,947 136,543,790 0 0 0 0 7,849,575 0 15,965 5,542,078 6,790,994 58,151,067 0 0 0 0 0 0 0 0 1,627,881 1,459,708 0 358,467 0 93,260 0 0 0 0 0 11,824 11,331,893 5,000,000,000 0 0 0 0 0 0 0 0 139,970,000 125,510,000 60-1- “Other” in the assets section is mainly related to the FC account of branches abroad. 60-2- Observance of stipulations set out in the Clause (2) of Directive related to the supervising regulations and control of foreign currency status, as set out in the Letter of Circular No. 1345BM, dated March 18, 2002, issued by the Central Bank, indicating authorized limit of open foreign currencies status is 10% at maximum for each foreign currency and for the aggregate foreign currencies is 30% of the base capital, have been always observed by the bank. Nevertheless, due to the reasons, including exchange of the Bank’s FC liabilities in consideration of FC Reserve Account with the account of receivable from the Government and in impossibility of transactions with other international banks due to sanctions imposed on the Central Bank in other cases, the Bank was unable to comply with the limits in conversion of foreign currencies into one another. Signed & Sealed: Bank Mellat / Int’l Division True translation from Persian text is certified. Tehran/KH Page 50 of 50 Bank Mellat – Financial Statements March 20, 2015 Aug. 18, 2015