IN THE NAME OF GOD - mondovisione.com · Regulation Self-regulated under SEO’s surveillance ... Saba Ta’min Investment company Mr. Jamshid Imani Member of the Board

IN THE NAME OF GOD

TSEANNUAL REPORT

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TEHRAN STOCK EXCHANGEAnnual ReportFiscal Year Ended 20 March 2017

4. 50th Anniversary of Iran Capital Market

6. TSE at a glance

11. TSE Annual General Assembly

14. Board of Directors

16.Message from board of directors

18. Time line

25. Introduction to TSE and financial performance

30. Financial performance

33. Market Operations Review

54. Corporate Governance

58. Risk Analysis Report

63. Operations & Achievements in the Financial Year

67. TSE’s strategic plans

68. Targets & plans in 2017 - 2018

72. Financial Statements

CO

NT

EN

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TSEANNUAL REPORT

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February 1967 is the first registered date when Tehran Stock Exchange was inaugurated with 6 listed companies. Later some public bonds and certain state-backed securities were added to the tradable instruments.

In its initial period of development (1967-1978), TSE became the trading venue, as well as fund raising platform for 105 listed companies, including 22 banks, 2 insurance companies, and 81 other industrial corporations.

In the next periods of evolution, several significant milestones can be specified at the Exchange, namely providing tax incentives for listing and trading in TSE,

STOCK EXCHANGE HISTORY IN IRAN DATES BACK TO

MORE THAN YEARS NOW

introducing electronic trading system, restructuring of the capital market and demutualizing of TSE, privatization of the state-owned companies, joining global capital markets’ entities, deregulation of foreign investment and developing new securities, like ETFs and derivatives.

With huge resources, vast geographical area, large population and great untapped opportunities, Iran’s capital market is a real promising investment destination for local and international investors.

The new logo on the other page has been designed to commemorate the 50th anniversary of the capital market in Iran.

50th Anniversary of Iran Capital Market

FISCAL YEAR ENDED 20 MAR. 2017

TSEANNUAL REPORT

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TradingTrading days Saturdays - Wednesdays

Trading hours 9:00 – 12:30 (pre-opening 8:30 – 9:00)

Trading system Fully automated order based

Trading mechanism Opening auction / continuous trading

Market making Optional

Tradable instruments Shares, rights, Islamic participation papers, single stock futures, embedded put option, option, sukuks, CDs and ETFs.

Currency Iranian Rial

Online accessible information (Opening, minimum, maximum and closing) prices, indices, listed companies information, trading data and quotes

Depository, clearing and settlementEntity Central Securities Depository of Iran (CSDI)

Settlement period T+3 (shares, derivatives and ETFs)

T+1 (Islamic participation papers, fixed-income securities)

Settlement Funds settlement at broker level, securities dematerial-ized settlement at client

Clearing Multilateral netting

Short selling N/A

TaxDividends Exempted

Capital gain Exempted

Transaction (seller) 0.5% of trading value

Structure and regulationsLegal structure Public joint stock company

Regulation Self-regulated under SEO’s surveillance

Daily price fluctuation limit Shares and debt instruments: ±5%, rights: ±10% (it is changeable by market makers’ proposal and SEO’s confir-mation in case of Auction)

Closing price calculation Weighted average based on equity’s base volume

Foreign investment Authorized (based on foreign investment bylaw)

Markets and Listing RequirementsFirst Market / main board First market / subsidiary

boardSecond market

Minimum paid-in Capital (IRR billion)

1,000 500 200

Minimum years of business activity

3 3 2

Minimum free-float (%) 20 15 10

Minimum number of share-holders

1,000 750 250

Profitability (years) 3 2 1

Equity/total assets (%) 30 20 15

Share Trading Commission

Buyer (%) Seller (%) Total (%)

Securities and Exchange Organization (SEO)

0.032 0.048 0.08

TSE 0.032 0.048 0.08

Brokerage Firm 0.4 0.4 0.8

TSE Technology Manage-ment Co.

0.01 0.015 0.025

CSDI 0.012 0.018 0.03

Total 0.486 0.529 1.015

Debt Trading Commission


Different types of Sukuk (Ijareh, Participant, Mora-beh, Istesna, …)

0.0725 0.0725 0.145

Derivatives Trading Commission


Futures 0.108 0.108 0.216

Options 0.0832 0.0848 0.168

Embedded Put Options 0.4 0.4 0.8

Mutual Funds Trading Commission


Investment Funds in Equi-ties

0.486 0.529 1.015

Mix Investment Funds 0.243 0.2645 0.5075

Mutual Funds in Fix Income Securities

0.0725 0.0725 0.145

Real State Funds 0.0725 0.0725 0.145

Securities Information

Equities Market

Equities First Market-main board First market-secondary board

Second market

Total

Listed companies 67 61 197 325

Debt Market

Fix Income Papers Number

Islamic Participates 16

Sukuk 6

Derivatives Market

Derivatives Number

Futures 3 Contracts

Put Embedded Option 4 papers

Call Option 22 Contracts

Put Option 22 Contracts

TSE at a GlanceTrading Commission


TSEANNUAL REPORT

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ETFsInvestment Traded Funds 9

Investment Funds in Equities 2

Mutual Funds in Fix Income Securities 4

Mix Investment Funds 1

Real State Funds 2

Brokerage firms

Tehran Provinces - regions Total

Number of brokerage firms (entities) 101 4 105

Trading stations 859 758 1,617On-line trading access providers 100 4 104

Financial information (IRR billion)Performance Information Fiscal Year 20

Mar. 2017(Net Worth)

Fiscal Year 20 Mar. 2017

(Main)


(Main)


(Main)Operating revenues 644 644 573 514Total expenses (377) (377) 341 272Operating income 267 267 232 242EBIT 401 369 358 389Net income 343 312 297 327Cash flows from operations 408 408 367 230EPS (IRR) 275 249 270 363

Financial status (IRR billion)Financial status Fiscal Year 20



(Main)


(Main)


(Main)Current assets 176 176 494 511Total assets 2,330 2,143 1,854 1,451Total liabilities 455 455 368 171Registered capital 1,250 1,250 1,100 900Total equities 1,875 1,687 1,486 1,280

Rate of Return (%)Rate of Return Fiscal Year 20



(Main)


(Main)


(Main)Return On Asset* 14.7 14.5 16.1 22.5Return On Equity** (net worth) 18.3 18.4 19.9 25.5

Equity sharesFiscal Year 20



(Main)


(Main)


(Main)Number of shares (million) 1,250 1,250 1,100 900Real EPS (IRR) 275 249 270 363Dividends Per Share (IRR) --- --- 100 100Last EPS forecast (IRR) 4,707 4,707 6,630 5,991Book Value 1500 1351 1351 1422

Other informationNumber of staff 287 287 274 275

Financial digest

Market information

*ROA = Net Income/Total Assets **ROE = Net Income/Shareholder’s Equity

Market indicators Fiscal Year 20 Mar. 2017



Market capitalization (IRR billion) 3,220,374 3,448,390 2,813,156

Nominal Value (IRR billion) 1,377,883 1,171,812 954,198

Market cap/nominal value 2.3 2.9 2.9

Average P/E 6.84 7.45 5.43

Total Trading Market Fiscal Year 20 Mar. 2017



Total trading value (IRR billion) 638,540 561,607 559,353

Total trading volume (million shares) 256,772 228,063 165,499

Number of trading days 242 243 241

Number of issued trading codes 145,071 115,972 151,540

Equities Trading Fiscal Year 20 Mar. 2017



trading value (IRR billion) 537,936 473,624 542,522

trading volume (million shares) 252,613 227,798 165,184

Number of trades (thousand) 15,689 13,922 12,916

Normal trading value (IRR billion) 490,269 425,537 377,119

Normal trading volume (million shares) 232,975 204,287 144,646

Average daily trading value (IRR billion) 2,223 1,949 2,251

Average daily trading volume (million shares) 1,044 937 685

Daily average number of trades (thousand) 65 57 54

Debt Instruments Trading Fiscal Year 20 Mar. 2017



Trading value (IRR billion) 93,132 86,626 15,676

Trading volume (million paper) 93 88 15.6

Derivatives Trading Fiscal Year 20 Mar. 2017



Trading value (IRR billion) 60 12 21

Trading volume (million shares) 3,371 57 166

Broad index Fiscal Year 20 Mar. 2017



Broad Index (value-weighted) 77,230 80,219 62,532

Price Index (value-weighted) 26,829 30,511 26,987

Board Index (equal-weighted) 15,723 13,357 9,862

Price Index (equal-weighted) 12,377 11,202 9,036

TSE at a Glance


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MONTHLY TRADING VALUE AND VOLUME TREND

TSE ANNUAL GENERAL ASSEMBLY

Implementing the provisions of Article 232 of the Commercial Law Amendment, approved in March 1968, and Article 45 of the Law on Securities, hereby the report on TSE’s general activities and financial situation during the fiscal year ended to 20 March 2017, provided according to existing documents and information is presented. The report, as one of the Annual Board Member reports to the General Assembly, is according to the information of the Financial Statement, and shows the

company’s general status and the Board performance. In our opinion, considering TSE profit and coordinate with the rules and regulations and TSE statute, the report confirms fairly the Board performance. This report is in line with reality and their effects are inadequate to the extent that they can be predicted in the current situation and no information has been removed from the report if its lack of knowledge leads to misleading the users. This report has been signed by the Board on 11 June 2017.

Board of Directors

Member Delegate Position

Tejarat Brokerage Firm Mr. Mohammad Esmaeil Fadaei Nezhad

Chairman

Arzesh Afarinan Pasargad Group Mr. Ali Akbar Amin Tafreshi Vice Chairman

Tadbir Investment Company Mr. Mojtaba Taghipour Member of the Board

Tosee Melli Investment Company Mr. Abbas Naeemi Member of the Board

Saba Ta’min Investment company Mr. Jamshid Imani Member of the Board

Tosee Farda Brokerage Firm Mr. Farhad Abdollahzadeh Member of the Board

Mellat Financial Group Mr. Mostafa Zarghami Member of the Board

---- Mr. Hassan Ghalibaf Asl CEO and President

---- Mr. Ali Sahraee Secretary of Board

Monthly Trading Value and Volume trend during the last three years

TSE at a Glance

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Volume (Mil. Shares) Value (IRR Bil.)

TSEANNUAL REPORT

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Tehran Stock ExchangeAnnual Report

Fiscal Year Ended 20 March 2017

MESSAGE FROM

BOARD OF DIRECTORS


TSEANNUAL REPORT

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MEMBER OF THE BOARD MEMBER OF THE BOARD

Board of Directors

Mr. Jamshid Imani

Saba Ta’min Investment Co.

Mr. Farhad Abdollahzadeh

Tosee Farda Brokerage Co.

Mr. Mojtaba Taghipour

Tadbir Investment Co.

Dr. Hassan Amiri

SEO

Mr. Ali Akbar Amin Tafreshi

Arzesh Afarinan Pasargad Co.

Mr. Abbas Naeemi

Tosee Melli Investment Co.

Mr. Ali Sahraee

Secretary of Board

Dr. Mohammad Esmaeil Fadaee Nejad

Tejarat Brokerage Co.

Mr. Mostafa Zarghami

Mellat Financial Group

Dr. Hassan Ghalibaf Asl

CEO & President

VICE CHAIRMAN OF THE BOARD MEMBER OF THE BOARD MEMBER OF THE BOARD

SUPERVISOR OF SEO VICE PRESIDENT, MARKET

CHAIRMAN OF THE BOARD

CEO AND PRESIDENTMEMBER OF THE BOARD

TSEANNUAL REPORT

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MESSAGE FROM

BOARD OF DIRECTORS

In 2016, named by the Supreme Leader as “the Economy of Resistance: Action and Implementation” Tehran Stock Exchange, as an incomparable pillar of the capital market and an important and influential member of the Iranian economy, has been tirelessly trying to achieve the macroeconomic goals.Tehran Stock Exchange has overtaken this year with the pursuit of general policy objectives for the Economy of Resistance. Activating funds for entrepreneurship development, maximizing community participation in economic activities by facilitating and encouraging collective cooperation, complete reforming and strengthening the financial system of the country, financing from abroad, attracting foreign investment and transparency and health of the economy were all principles of resistance policies which were considered by Tehran Stock Exchange. The year 2016, as the first year of post-JCPOA saw the presence of various political and economic groups and Tehran stock exchange as an important part of the Iran economy was attractive for international investors. The attention of international investors toward Iran economy and capital market confirmed that Iran is an untouched market with a high potential of growth.

The number of international visitors groups to Tehran Stock Exchange, which had grown to 46, was unprecedented and International creditable companies demonstrated their willingness clearly to invest in different sectors of the Iran economy and in important cases, they also started contracting with Iranian companies. Eventually and after many efforts, Eventually, in the financial year ended 20 March 2017, following the efforts of Securities and Exchange organization and Tehran Stock Exchange, along with the acceptance of SEO membership in the International Organization of Securities Commissions (IOSCO), the suspended membership of Tehran Stock Exchange in the World Federation of Exchanges (WFE) was renewed. The suspension removing of TSE membership can enhance the reputation of the Tehran Stock Exchange and help attract international investors in this market. Promotion of the trading system, which was a concern for the market participants for a long time, this year and with the agreement with Atos entered into the executive phase. The signing of the Memorandum of Understanding with the Athens and Munich Stock Exchanges was another of the international activities of the Tehran Stock Exchange last year. In the international activities, maintaining the TSE membership in the board of the Federation of

Euro-Asian Exchanges could be worthy of attention.In the year before, 7 new companies were listed in and two companies were delisted from Tehran Stock Exchange. Additionally, the listing companies had a capital raise of IRR 167 trillion. These resulted in 17.6 percent growth of TSE nominal value (1,378 trillion). In spite of holding the 20 meetings of the listing board and the presence of listing potential and offering of 40 new companies in TSE, with the increasing sensitivity of the capital market participants in the issuance of shares and the restrictions imposed on it, financing through TSE in the financial year ended 20 March 2017 decreased by 16% and it reach from IRR 276 to IRR 238 trillion. In this period, and among other parameters of the capital market, the growth of securities transactions, in particular, derivatives instruments was significant. The trading volume grew by 13.6% this year, and brought the turnover in the Tehran Stock Exchange to more than 16%. Among the various types of securities traded in Tehran Stock Exchange, the derivative instrument was associated with a stunning growth of 408%. The derivatives market, which previously included futures and embedded put options, was also available to deal options during the year. In the last year, there were a significant drop in futures, a sharp increase in the volumes of embedded put options and the increase in options trading. Meanwhile, ETFs trading grew by 451% in this year. Fixed Income Securities also increased by 7.5% last year. All this reflects the high capacity

of modern financial instruments in Iran capital market, which, through the development of general and specialized knowledge, the use of up-to-date software and continuous monitoring and pathology, can provide a significant place in the capital market. In the field of development of new financial instruments, in addition to launching the market for the option, Tehran Stock Exchange received an approval to set up a deposit account certificate from the Sharia Committee of Securities and Exchange Organization. Executive studies for the distribution of dividend-backed securities were also another attempt by Tehran Stock Exchange in last year that could lead to an increase in the financial instruments of the Iran capital market. Additionally, regarding the increase in market value and trading of these bonds in the past year, the study of indices of fixed-income securities was carried out by Tehran Stock Exchange and by obtaining the necessary methodology and formulas and initial calculations, sent to the Index Committee of Stock Exchange Organization in order to make decision. At the end, the board of directors, appreciates the support of shareholders, members of the High Council of Securities and exchanges, Securities and Exchange Organization’s board and managers, members and issuers of the listed companies, the media and human resources of Tehran Stock Exchange and believes that the development and generalization of the capital market will be possible with the cooperation of all market participants.

TSEANNUAL REPORT

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25 April 2016

26 April 2016

3 May 2016

4 May 2016

5 May 2016

18 May 2016

19 May 2016

2 July 2016

9 July 2016

10 July 2016

11 July 2016

17 July 2016

TIME LINEInternational Oil, Gas, Refining and Petrochemical Exhibition Tehran Stock Exchange attended “the International Oil, Gas, Refining and Petrochemical Exhibition” to introduction of financing opportunities through Tehran stock exchange along with other participants of the capital market.

Participating in FEAS meetings in Romania Tehran Stock Exchange as a member of the Board of ‘the Euro-Asian Federation of Exchanges (FEAS) participated in the meeting of the Working Committee and Executive Committee of this Federation hosted by the Bucharest Stock Exchange, in Romania.

TSE attending the foreign investors meeting in LondonCEO and President of Tehran Stock Exchange at a meeting in London, was attended by the foreign investors interested in Iran’s capital market delivered the overall outline and investment opportunities of this market.

TSE attending Euromoney ConferenceTehran Stock Exchange took part in 2016 Euromoney Conference in London. In this conference, the CEO of Tehran Stock Exchange, responded to various questions about the characteristics of this market in the specific panel of “Knowing Iran Capital Market”.

Ejareh Raytel Sukuk Underwriting Ejareh Raytel Sukuk after admission in trading code RITQ1, was underwritten in Tehran stock exchange in IRR 2000 billion value.

Zanjan Financial Center launching construction The ceremony of Zenjan financial center launching construction was held with the participation of Tehran Stock Exchange’s CEO and Zanjan province officials. This financial center is intended to cover the Zanjan capital market and related institutions including banks, insurance and brokerage firms and other financial institutions.

Iranian Investment Petrochemical Company Transferring to TSEIranian Investment Petrochemical Company was transferred to the list of Tehran Stock Exchange’s second market. Each share of the company was traded to investors at a price of IRR 1557.

Removing suspension of TSE membership in WFEFollowing the Tehran Stock Exchange’s numerous pursuits to remove the suspension of TSE membership in the World Federation of Exchanges, after the implementation of JCPOA and the sanctions obviation, and re-structuring of the organization, the WFE’s board was agreed upon with the request for suspension removal of Tehran Stock Exchange membership.

Underwriting of the fixed income investment funds units of Parand Paydar Sepehr Parand Paydar Sepehr investment funds units were admitted and underwritten on the investment fund market of Tehran Stock Exchange.

Attending the 9th International Exchange, Bank and Insurance ExhibitionThe 9th International Exchange, Bank and Insurance Exhibition was held in Tehran International Exhibition venue.

Signing MoU with Munich and AthensAt a meeting between the senior directors of Tehran Stock Exchange and Athens and Munich Stock Exchanges, Mous were signed and Based on these two MoUs, the both sides agreed on the development of markets, the exchange of experiences and expertise, and the establishment of joint trading systems.

Holding TSE’s Annual General Assembly and Extraordinary MeetingsTSE’s Annual General Assembly and Extraordinary Meetings for the fiscal year ended 19 March 2016, with the presence of maximum of shareholders were held. The General Assembly approved IRR 100

1 June 2016

8 June 2016

Mellat Leasing IPO80 million shares, equivalent to 10% of the shares of Mellat Leasing were offered on the second market and traded at the price of IRR 1,060 per share.

Reopening of the Municipality of Isfahan bondMunicipality of Isfahan bond in the value of IRR 3000 billion was admitted and re-traded in Tehran Stock Exchange



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17 October 2016

30 October 2016

13 November 2016

13 November 2016

23 November 2016

23 November 2016

3 December 2016

7 December 2016

18 December 2016

18 December 2016

21 December 2016

Persian Asan Pardakht IPO80 million shares of Persian Asan Pardakht shares in the price of IRR 9999 per share were traded in TSE secondary market.

Tehran Oil Refining Company transferring to TSETehran Oil Refining was transferred to TSE’s secondary market. Each share was traded in the price of IRR 3438 by investors.

System Group transferring to TSESystem Group was transferred to TSE’s secondary market. Each share was traded in the price of IRR 5000 by investors.

Kiyan Fixed income investment fund units underwritingUnits of Kiyan Fixed income investment fund were admitted and underwritten in ETF market.

TSE reselecting in FEAS BoardDuring FEAS Annual meetings on 16 and 17 November, in Egypt, Tehran Stock Exchange was retained as a member of the board.

Signing MoU with Atos Atos representatives and Iran capital market top managers singed an MoU on updating and improving the trading system in Iran capital market as well as using the new soft wares and hard wares.

Amin Yekom Farda Fixed income investment fund units underwritingUnits of Amin Yekom Farda Fixed income investment fund were admitted and underwritten in ETF market.

Embedded put option of Jam Petrochemicals offering According to the fact that the embedded put option of Jam Petrochemicals could have a huge attraction of the investors, 100% of the share was sold in the first three days. The total value is IRR 15 billion.

Options offering Nine options contracts on three basic shares: Mobarakeh Steel, Iran National Copper Industry and Iran Khodro were admitted and started to be traded.

Option market opening The options market with the basic share of three large companies, including Mobarakeh Steel, Iran National Copper Industry and Iran Khodro was inaugurated. The ceremony was held in Central Securities Depository of Iran with the presence of the chairman of Securities and Exchange Organization, CEO & President of Tehran Stock Exchange and the rest of the capital market top managers. To diversify the financial instruments and reduce the risk, the option market has been launched. The existing option contracts are exercised as European options.

Reopening of Tehran Stock Exchange shareAfter qualifying, Tehran Stock Exchange’s share was reopened and entered TSE first market. Each share was traded in the price of IRR 5860 by investors.

1 October 2016

16 October 2016

Admission of Zangan Distribution Transformer Zangan Distribution Transformer was admitted on the second market list of Tehran Stock Exchange.

Reopening of Tehran municipality bondThe bonds of Tehran municipality, in value of IRR 3000 billion was admitted and started its secondary trades.

16 November 2016

19 November 2016

Saipa Murabeh underwritingSaipa Murabehs, in the value of IRR 5000 billion were underwritten in Debt market.

Jey Oil Refining Company admissionJey Oil Refining Company was admitted on TSE’s secondary market.

24 August 2016

Registration of Mino Industrial GroupMino Industrial Company, as 499th listed company in Food Products and Beverages Industry, Manufacture of other food products, and Making bakery products, was admitted on the second market of Tehran Stock Exchange.

28 August 2016

7 September 2016

Narvan Construction Fund units underwriting Narvan Construction Fund was admitted and underwritten in the list of Mutual Funds.

Reopening of Tehran municipality bondThe bonds of Tehran municipality in order to finance first and second phases of the line 6 were admitted and started their secondary trades, in two trading codes, with value of IRR 4600 and IRR 2400 billion.

20 August 2016

Reopening of Mashhad municipality bondThe bonds of Mashhad municipality, in value of IRR 5000 billion, were admitted and traded on Debt Market of Tehran Stock Exchange.

12 August 2016

Maturity of Saipa BondsSaipa bonds, with a maturity of 4 years were successfully settled on August 12. The value of the bonds was IRR 1500 billion.

dividend per share. 36.3 percent capital raise was approved in Extraordinary General Assembly and TSE capital was increased from IRR 1100 billion to IRR 1500 billion. Additionally, it was agreed that the capital raise was accomplished in two steps. The first stage of this increase (from IRR 1100 billion to IRR 1250 billion) was immediately executed and the rest was placed on the board of directors.

TIME LINE


TSEANNUAL REPORT

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8 March 2017

11 March 2017

11 March 2017

14 March 2017

Sina Financial & Investment Holding admissionSina Financial & Investment Holding Co. was admitted on TSE’s secondary market.

Jahrom Power Generation admissionJahrom Power Generation Co. was admitted on TSE’s secondary market.

After a number of review sessions, Sharieh Committee of Securities and Exchange Organization

Chodansazan Manufacture admissionChodansazan Manufacture from “Fabricated Metal Products except Machinary & Equipments Industry” was admitted on TSE’s secondary market.

7 March 2017

Mellat Behpardakht admission Mellat Behpardakht was admitted on TSE’s secondary market.

18 January 2017

23 January 2017

31 January 2017

6 February 2017

11 February 2017

Kish South Kaveh Steel Company admissionKish South Kaveh Steel Company, from “Basic Metal Industry”, “Basic Iron & Steel Manufacturing group” was admitted on the secondary market.

Underwriting and IPO Instructions approvalUnderwriting and IPO Instructions for Tehran Stock Exchange and Iran Fara bourse, including 41 Articles and 35 Notes was approved by Securities and

Omid Investment Bank admissionOmid Investment Bank with the capital of IRR 4000 billion was admitted on TSE secondary market.

Rayan Siapa Leasing Bonds Underwriting Rayan Siapa Leasing Bonds in the value of IRR 1000 billion was underwritten in the debt market.

Appreciation of Tehran Stock Exchange in the 3rd International Conference of Holdings and Companies GroupIn the 3rd International Conference of Holdings and Companies Group, Tehran Stock Exchange was appreciated.

21 February 2017

Isfahan Tile transferring to IFB Trading code of Isfahan tile Industry complex was delisted from TSE and transferred to Base Market of Iran Fara Bourse.

15 January 2017

15 January 2017

Reopening of Mashhad municipality bondRegarding qualifying, the bond of Mashhad municipality, in value of IRR 2000 billion, was admitted and started the secondary trading in Debt Market of Tehran Stock Exchange.

Underwriting of Shahr Rey Negin Real Estate Investment Fund Shahr Rey Negin Real Estate Investment Fund was admitted and underwritten in ETF market.

25 December 2016

Reopening of Mashhad municipality bondRegarding qualifying, the bond of Mashhad municipality, in value of IRR 4000 billion, was admitted and started the secondary trading in Debt Market of Tehran Stock Exchange.

Exchange Organization Board and after testing the designed system, the Initial Public Offering process in book building way was commissioned.

has approved Tehran Stock Exchange’s suggestion for launching Certificate of Deposit and one-share investment fund.

TIME LINE

TSEANNUAL REPORT

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COMMEMORATING THE ANNIVERSARY

OF COMPANIES’ IPO BY

TEHRAN STOCK EXCHANGEBy ringing the opening bell at the trading floor, the selected listed companies’ authorities held the commemoration of companies’ IPO in Tehran Stock Exchange to mark the event.

The presence of TSE at various domestic exhibitions

• the first specialty exhibition and national conference on economy and capital in Hamedan

• the international exhibition of exchange, bank and insurance in Kish

• the third exhibition of exchange, banking and insurance in Shiraz

• the exhibition of the government achievement in Khuzestan

• the first exhibition of Investment Opportunities in Khuzestan

• Holding specialized workshops conditions and benefits of listing at TSE in the first exhibition of exchange, bank and insurance and in the third exhibition of Investment Opportunities in Khorasan

Foreign Investors visiting

During the past financial year, 260 foreign investors in 46 delegations visited Tehran Stock Exchange and were briefed about Iran’s capital market and process and trading.

Holding specialized meetings and educational workshops

Tehran Stock Exchange held a series of specific meetings named “Futures and Options Portfolio”, 3 meetings with investment funds in TSE, meeting of the capital market analysts with Behshahr Industrial Company’s managers, meeting of financing strategies through Tehran Stock Exchange in Isfahan, financing strategies conference in Kish, a training course on financing the capital market and attracting foreign direct investment in Tabriz, and a training meeting and a forum with the presence of the presidents and judges of Iran Judiciary Complex.Additionally, training classes including three-day course on “familiarity with financing, listing procedures and issuance of securities in TSE”, 17 retraining workshops on “capital markets rules and regulations for issuers”, and the first specialized workshop on “Corporate Governance for the listed issuers” were held by TSE.

INTRODUCTION TO TSE AND

FINANCIAL PERFORMANCE

1. History

Tehran Stock Exchange (Public Joint Stock Company) was established on November 2006 based on the new market act ratified by the Parliament in 2005. Based on this development, the existing Exchange, which had been initially launched in 1960s, became demutualized.

2. Activities according to the articles of association

• Organizing and managing the securities exchange in order to make trades by local and foreign investors according to the regulations

• Listing securities of local or international issuers according to the rules and regulations

• Setting membership standards for applicants, ratifying and implementing disciplinary principles on and between members, regulating their responsibilities and monitoring their activities according to the rules and regulations

• Providing the required infrastructure for the members’ fair access to trading

• Cooperating and coordinating with other financial

entities, responsible for parts of the related securities trading, issuing or data processing activities, namely Central Securities Depository of Iran (CSDI),

• Carrying out research activities and training jobs and culture development in order to facilitate and develop securities trading and investment culture

• Working with other Exchanges in Iran or overseas for exchanging information and expertise, harmonizing the regulations and standards and cross-listing of the securities according to the rules and regulations

• Listing securities trading surveillance

• Compiling, processing and disseminating the ordering and trading information

• Observing securities issuers’ activities

3. Percentage of shareholders’ ownershipTSE’s shareholders and ownership level are mentioned in table 01. Based on the 54th market act, no shareholder can hold more than 2.5 percent of the Exchange’s own shares. The article number 9 of statute shows that the shareholders include brokerage firms, financial institutes and retailers. The ownership levels should be always determined by SEO.


TSEANNUAL REPORT

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Shareholders No. of shareholders No. of shares Percent of ownership

Brokerage firms 81 424,558,322 33.96

Financial institutes 85 490,949,988 39.28

Others 5,958 334,491,690 26.76

Total 6,124 1,250,000,000 100

Fiscal year ending

Capital increase regis-

tration date

Previous capital

Increase New capital Increase % Source of increase

20 March 2009 - 150 - 150 - -

20 March 2010 21 November 2010 150 105 255 70 Prudential reserves and

retained earning

20 March 2011 7 December 2011 255 45 300 17.6 Prudential reserves and

retained earning

20 March 2014 14 October 2013 300 150 450 50 Prudential reserves and

retained earning

20 March 2015 22 October 2014 450 450 900 100 Prudential reserves and

retained earning

19 March 2016 5 September 2015 900 200 1100 22.2 Prudential reserves and

retained earning

20 March 2017 24 September 2016 1100 150 1250 13.63 Prudential reserves and

retained earning

No. Shareholder No. of shares Percent of ownershipBrokerage firms 424,558,322 33.96

1 Keshavarzi bank brokerage firm 31,249,998 2.5

2 Mofid brokerage firm 31,249,998 2.5

3 Iran Insurance brokerage firm 28,179,998 2.25

4 Razavi brokerage firm 28,069,998 2.24

5 Agah brokerage firm 24,999,998 2

6 Refah bank brokerage firm 24,999,998 2

7 Mellat bank brokerage firm 24,999,998 2

8 Hafez brokerage firm 22,041,660 1.76

9 Tose’e Farda brokerage firm 19,937,310 1.51

10 Pasargad bank brokerage firm 18,749,998 1.5

11 Maskan bank brokerage firm 18,749,998 1.5

12 Nhayatnegar brokerage firm 16,958,332 1.36

13 Other brokerage firms 135,371,038 10.8

Financial institutes 490,949,988 39.28

14 Parsian Bank Financial Group 31,249,998 2.5

15 Ghadir Investment Company 31,249,998 2.5

16 Omid Investment Management Group Company 31,249,998 2.5

17 Saba Tamin Investment Company 31,249,971 2.5

18 Tose Melli Investment Company 31,249,304 2.5

19 Oil Pension Fund Investment Company 27,499,998 2.2

20 Alborz Insurance Company 25,678,028 2.1

21 Iranian Petrochemical Investment Company 25,568,181 2

22 Bahman Investment Company 25,499,304 2

23 Tadbir Investment Company 24,999,304 2

24 Industry & Mine Investment Company 18,749,998 1.5

25 Iran National Investment Company 18,749,998 1.5

26 Other institutions 167,955,908 13.4

Others 334,491,690 26.76

Total 1,250,000,000 100

Table 01 – Shareholders breakdown composition, fiscal year ending 20 March 2017

4. Major shareholders

Table 02 includes list of TSE’s major shareholders at the end of fiscal year ending 20 March 2017.

Table 02 – Major shareholders based on groups’ breakdown

5. Capital changes

The capital of the company at the time of establishment was IRR150 billion, which increased in several stages by IRR1100 billion at the end of the fiscal year ending 20 March 2017. TSE’s capital has changed since establishment as indicated below.

According to the approval of the Extraordinary General Assembly, dated 17 July 2016, the TSE’s capital raise from IRR1100 billion to IRR1500 billion (36.3%) was agreed during one or more stages and within two years. The first phase of its increase (from 1100 billion to 1250 billion) was immediately implemented and the rest of it was placed on the board decision.

Table 03 – Capital changes (IRR billion)

TSEANNUAL REPORT

28 29


6. TSE’s own shares trading

Due to the GA’s approval for self-listing of TSE’s shares and providing trading mechanism for its shareholders, required arrangements were made on 4 September 2011 for TSE’s shares being listed in Iran Farabourse (IFB). The shares’ trading started on the mentioned date at IFB through negotiated transactions. From 21 December 2016, after qualified for transferring of the company to the main board of the first market of Tehran Stock Exchange, the shares of the company were transferred and traded for all above categories of shareholders. The following table shows TSE’s shares trading in the last two fiscal years.

7. Legal environment

The major governing regulations at Tehran Stock Exchange include Commercial Code, Securities Market Act, The Law for Development of New Financial Instruments and Institutions, Tehran Stock Exchange’s Trading Bylaw, Trading Executive Directive, as well as the Brokerage Firms’ Executive bylaws and Issuers’ Disciplinary Directive, the Instruction to Investigate Delinquency of Persons under Article 35 of the Securities Market Act. The anti-money laundering rule is also among the related regulations.

8. Human resources

Human resources, as the main and valuable capital of the company, play an important role in implementing current and development programs. The combination of the company’s human resources on 20 March 2017 is presented in the following table:

Shareholder

Fiscal year ending 20 March 2017 Fiscal year ending 19 March 2016

Total trading volume

Total trading value

(IRR)

Average price per share (IRR)

Total trading volume

Total trading value

(IRR)

Average price per share

(IRR)

Brokerage firm 8,794,997 44,742 5,084 341,332 2,826 8,279

Financial institutes 11,823,763 81,958 6,932 5,696,665 196,362 6,964

Others 57,243,858 396,307 5,526 50,615,255 268,325 5,301

EducationNumber of Staff

% of totalTehran Regional Floors Total

PhD 5 4 9 3.1

MA, MS 79 28 107 37.3

BA, BS 60 42 102 35.5

AA, AS 6 6 12 4.2

Diploma and less 33 24 57 19.9

Total 183 104 287 100

Table 04 – TSE’s shares trading

Table 07 – TSE’s Human Resources Combination

Finance

Physical Securities

AdvisorsStrategic & Risk Management Committee

CompensationCommittee

ListingStatistics & Information

R & D

Administration

Contracts & Legal Affairs Construction

Development Management

PR & International

CEO’s Office

Board of Directors

Secretariat

Internal Auditing

AuditingCommittee

Issuers Operations Organizational Excellence

Information Technology &

SystemsMembers

Market Surveillance

Investment Culture

Development

Issuers and Members Deputy

Logistics DeputyDevelopment

Deputy

General Assembly

CEO

Board of Directors

9. Organizational chart

Market Deputy

TSE’s staff in trading floor


TSEANNUAL REPORT

30 31

1. Performance information

A summary of Tehran Stock Exchange’s financial activities during the fiscal year ended 20 March 2017 is given in the following table:

4. Earnings per share forecast

The forecasted TSE’s EPS for the fiscal year ending 20 March 2018, as well as the comparative information of the fiscal year ended 20 March 2017 are included in the table 11.

2. Financial status information

The most important of Tehran Stock Exchange’s financial items during the fiscal year ended 20 March 2017 is given in the following table:

3. Financial ratios

The most important of Tehran Stock Exchange’s Financial Ratios during the fiscal year ended 20 March 2017 is given in the following table:

Table 08 – Financial activities’ market

Table 10 – Financial Ratios

Table 11 – the forecasted information on TSE’s EPS and real operations

Table 09 – Financial items summery

Description Fiscal year ended 20 March 2017 (IRR billion)

Fiscal year ended 19 March 2016 (IRR billion) % Change

Income from services 644 573 12

Cost of services (254) (224) 14

General and administrative expenses (123) (118) 4

Income from investment 78 77 -

Net other incomes 23 49 (53)

EBIT 369 358 (3)

Net profit 312 297 (5)

EPS (IRR) 249 237 (5)

Description Fiscal year ended 20 March 2017 (IRR billion)

Fiscal year ended 19 March 2016 (IRR billion) % Change

Current assets 176 494 (64)

Total assets 2,143 1,854 15

Total liabilities 455 368 21

Registered capital 1,250 1,100 13

Equities 1,687 1,486 13

Description Fiscal year ended 20 March 2017

Fiscal year ended 19 March 2016 % Change

Current ratio % 1 43 154 (72)

Total debt ratio % 2 27 25 8

Return on assets % 3 14.5 16.1 (10)

Return on equity % 4 18.4 19.9 (7)

Description FY ending 20 Mar. 2018 budget (IRR million)

FY ended 20 Mar. 2017 budget (IRR million)

FY ended 20 Mar. 2017 operations (IRR million)

Income from services 860,974 668,996 644,463

Cost of services (289,622) (246,760) (254,497)

Gross income 571,351 422,236 389,966

General and administrative expenses (161,189) (119,314) (122,696)

Operating profit 410,162 302,922 267,270

Net other non-operating income and expenses 106,597 88,219 101,453

EBIT 516,760 391,141 368,723

Tax (83,808) (65,862) (57,223)

Net profit 432,952 325,279 311,500

EPS (IRR) 346 260 249

Operating EPS (IRR) 261 190 173

Non-operating EPS (IRR) 85 70 76

Number of shares based on EPS calculation 1,250 1,250 1,250

1. Current Ratio = Current Assets ÷ Current Liabilities2. Total Debt Ratio = Total Liabilities ÷ Net Worth3. Return on Assets = Net Profit ÷ Total Assets4. Return on equity = Net Profit ÷ Equities

Financial Performance


TSEANNUAL REPORT

32 33

Financial Performance

5. Forecasted income statement

The forecasted TSE’s Income Statement for the fiscal year ending 20 March 2018, as well as the comparative information of the fiscal year ended 20 March 2017 are included in the table 06.

Description

FY ending 20 Mar. 2017

operations (net worth)

FY ended 20 Mar. 2017 oper-

ations (main)

FY ended 20 Mar. 2018

budget Audited (net worth)

FY ended 20 Mar. 2018

budget Audited (main)

IRR million IRR million IRR million IRR million

Income from services 644,463 644,463 860,974 86,974

Cost of services (254,497) (254,497) (289,622) (289,622)

Gross income 389,966 389,966 571,351 571,351

General and administrative expenses (122,696) (122,696) (161,189) (161,189)

Operating profit 267,270 267,270 410,163 410,163

Net other non-operating income and expenses 72,674 101,453 87,482 106,597

Profit before calculating the portion of the profit (loss) of the subsidiaries 339,944 368,723 497,645 516,760

The share of the profit (loss) of the subsidiaries 60,630 - 71,828 -

Tax (57,223) (57,223) (83,808) (83,808)

Net profit 343,351 311,500 485,665 432,952

EPS (IRR) 275 249 389 346

Table 12 – Forecasted Income Statement1.Overview

The following chart indicates the general overview of Tehran Stock Exchange’s markets and boards. During the financial year ended 20 March 2017, number of listed companies reached 325, with 3 IPOs (Mellat Leasing, Asan Pardakht, and Barekat Pharmaceutical), and 4 upgraded transferred companies from Iran Farabourse (Iranian Investment Petrochemical, Tehran Oil Refinery, Hamkaran System, and Tehran Stock Exchange). Two companies were also transferred from Tehran Stock Exchange to Iran Farabourse (Isfahan Tile

Equities Debt Derivatives ETFs

This section is divided into two separate markets:

First Markets (main and secondary boards) and

Second Market. Equities and rights are tradable here.

In this market, different sukuks (including Ijarah,

Murabeha, Istisna, etc.) and certificates of deposit are underwritten and traded.

Futures, embedded put options, (put & call) options

are traded in this market.

Exchange Traded Funds are admitted and traded in this

market.

and Tehran-Shimi Pharmaceutical). In the period, 4 fixed rate participation papers and sukuks were underwritten and 7 participation papers started being traded in the secondary market. There are 22 fixed rate debt instruments in Tehran Stock Exchange. In the last financial year, new derivatives market was launched and 44 different contracts of options securities were introduced for trading. Also, 5 new Exchange Traded Funds (ETFs) were admitted and started trading in the Exchange.

Table 2 – Markets and Boards Overview

Market Operations Review


TSEANNUAL REPORT

34 35

۳۳نمودار باالی صفحھ

25,000.00

27,500.00

30,000.00

32,500.00

65,000.00

70,000.00

75,000.00

80,000.00

85,000.00

Broad Index Price Index

Index FY ended 20 Mar. 2017

FY ended 19 Mar. 2016 Changes % of changes

Broad Index 77230 80219 -2989 (3.7)

Price Index (value weighted) 26829 30511 -3682 (12.1)

Broad Index (equal weighted) 15723 13357 2366 17.7

Price Index (equal weighted) 12377 11202 1175 10.5

Free Float Index 84725 92557 -7832 (8.5)

First Market Index 54460 57004 -2544 (4.5)

Second Market Index 166371 170269 3897 (2.3)

Financial Index 131866 158225 -26359 (16.7)

Industry Index 66100 66994 -893 (1.3)

50 Most Active Com-panies Indices 3035 3254 -220 (6.7)

30 Blue-chip Index 3098 3381 -283 (8.4)

Table 13 – Main Indices Movement – Fiscal Years Ended 19 March 2016 and 20March 2017

Chart 3 – Broad and Price Indices (value weighted) – FY Ended 20 March 2017

Chart 4 – Broad and Price Indices (equal weighted) - FY Ended 20 March 2017


۳۳نمودار پایین صفحھ

10,000.00

11,000.00

12,000.00

13,000.00

14,000.00

15,000.00

16,000.00

17,000.00

Price Index Broad Index

2- Equity Market Indices

In the fiscal year ended 20 March 2017, the broad index of Tehran Stock Exchange declined from 80219 units to 77230 at the end of the period. This indicates a drop of 3.7%. The price index (value weighted) shrank 12% from 30511 at the beginning of the

year to 26829 at the end of the period. The broad index (equal weighted), however, gained 17.7% and approached 15723 from 13357 at the end of the period. Moreover, the price index (equal weighted) reached 12377 unit on 20 March 2017 with 10% rise.


TSEANNUAL REPORT

36 37

۳۴نمودار باالی صفحھ

2,800

2,900

3,000

3,100

3,200

3,300

3,400

3,500

3,600

Market Cap (IRR Trillions)

Market Cap (IRR…

3 - Equities Market Capitalization

Total market capitalization of Tehran Stock Exchange declined 6.61% in the fiscal year ended 20 March 2017 and reached IRR 3220 trillion.

4- Total Securities Trading

Tehran Stock Exchange’s total trading value of securities (including equities, rights, fixed-income products, futures, options and ETFs) during the financial year ended 20 March 2017 reached IRR 638,539 billion, which is 14% above last year’s figure. Total equities and rights trading value during the period with 242 trading days equaled IRR

Chart 5 – Market Capitalization - FY Ended 20 March 2017 (IRR Trillions)

Table 14 – Market Capitalization of Exchange Industries - FY Ended 20 March 2017

Table 15 – Total Securities Trading

Chart 7 – Industries’ Breakdown of Market Capitalization - FY Ended 20 March 2017

Industry No. of Companies Market Capitalization (IRR Billion) % of Total Market

Chemical Products 29 664,472 20.6

Basic Metals 19 331,557 10.3

Banks & Credit Institutes 11 315,176 9.8

Telecommunication 2 285,064 8.9

Petroleum Products 8 212,801 6.6

Diversified Holdings 4 207,632 6.4

Metal Ores 9 183,810 5.7

Automotive Manufacturing 30 155,927 4.8

Pharmaceutical 28 141,507 4.4

Utilities 2 99,531 3.1

Others 183 622,896 19.3

Total 325 3,220,374 100

10.30%

9.79%8.85%

6.61

%

6.45

%5.71%4.84%

4.39%

3.09%

19.34% 20.63%Chemicals 20.63%Base Metals 10.30%Banks and Credit Inst.TelecomPetroleum ProductsHoldings

Metal OresAuto ManufacturingPharmaceuticalUtilitiesOthers

ProductsFY Ended 20 March 2017 FY Ended 19 March 2016 Change %

No. (Mil) Value(IRR Bil) No. (Mil) Value

(IRR Bil) No. Value

Equities 252,613 537,936 227,798 473,624 10.9 13.6

Debt 93 93,132 88 86,626 5.7 7.5

Derivatives 3,371 60 57 12 5,796 408

ETFs 695 7,412 120 1,345 479 451

Total Market 256,772 638,540 228,063 561,607 12.6 13.7

537,935 billion, 13.6% more than one year earlier. Fixed-income securities turnover exceeded 7.5% than the preceding year to reach IRR 93,132 billion. A considerable growth was noted in derivatives and ETFs trading value. Additionally, 145,071 investment codes were registered for new investors during the financial year, increased by 25% than the last year.


Chart 6 – Market Capitalization of TSE’s Boards - FY Ended 20 March 2017

32%

41%

27%

First Market - Main

Second Market

First Market - Secondary


TSEANNUAL REPORT

38 39

30

537935

473623

440000

460000

480000

500000

520000

540000

560000

FY 20 Mar 2017 FY 19 Mar 2016

Equities

FY 20 Mar 2017 FY 19 Mar 2016

93132

86626

82000

84000

86000

88000

90000

92000

94000

FY 20 Mar 2017 FY 19 Mar 2016

Debt

FY 20 Mar 2017 FY 19 Mar 2016

30

537935

473623

440000

460000

480000

500000

520000

540000

560000

FY 20 Mar 2017 FY 19 Mar 2016

Equities

FY 20 Mar 2017 FY 19 Mar 2016

93132

86626

82000

84000

86000

88000

90000

92000

94000

FY 20 Mar 2017 FY 19 Mar 2016

Debt

FY 20 Mar 2017 FY 19 Mar 2016

Chart 8 – Trading Value of Different Sectors (IRR billion)

Equities

Debt


Derivatives

ETFs

31

4-1 Equities Market

At the end of the fiscal year ended 20 March 2017, TSE’s market capitalization reached IRR 3,220,374 billion, translating 6.6% decline than a year earlier. Total trading value of equities rose by 13.6% in the year to amount IRR 537,936 billion. Broad index of the Exchange dropped 3.73% and closed at 77,230. Average daily trading value and volume respectively increased 14.1% and 15.7% at Tehran Stock Exchange in the year ended 20 March 2017. The equities market number of trading surged 12.9% to exceed 15 million transactions from around 14 million one year earlier.

The on-line trading value continued its growth by 23% from IRR 233,378 billion in the fiscal year ended 19 March 2016 to reach IRR 287,206 billion in the last year. The volume of on-line trading also gained 21% to catch up IRR 152,897 billion in this year from IRR 126,114 billion.

60

120

10

20

30

40

50

60

70

FY 20 Mar 2017 FY 19 Mar 2016

Derivatives

Derivatives

7412

13450

1000

2000

3000

4000

5000

6000

7000

8000

FY 20 Mar 2017 FY 19 Mar 2016

ETFs

ETFs

31

4-1 Equities Market

At the end of the fiscal year ended 20 March 2017, TSE’s market capitalization reached IRR 3,220,374 billion, translating 6.6% decline than a year earlier. Total trading value of equities rose by 13.6% in the year to amount IRR 537,936 billion. Broad index of the Exchange dropped 3.73% and closed at 77,230. Average daily trading value and volume respectively increased 14.1% and 15.7% at Tehran Stock Exchange in the year ended 20 March 2017. The equities market number of trading surged 12.9% to exceed 15 million transactions from around 14 million one year earlier.

The on-line trading value continued its growth by 23% from IRR 233,378 billion in the fiscal year ended 19 March 2016 to reach IRR 287,206 billion in the last year. The volume of on-line trading also gained 21% to catch up IRR 152,897 billion in this year from IRR 126,114 billion.

60

120

10

20

30

40

50

60

70

FY 20 Mar 2017 FY 19 Mar 2016

Derivatives

Derivatives

7412

13450

1000

2000

3000

4000

5000

6000

7000

8000

FY 20 Mar 2017 FY 19 Mar 2016

ETFs

ETFs

12

1345


TSEANNUAL REPORT

40 41

4-1 Equities Market

At the end of the fiscal year ended 20 March 2017, TSE’s market capitalization reached IRR 3,220,374 billion, translating 6.6% decline than a year earlier. Total trading value of equities rose by 13.6% in the year to amount IRR 537,936 billion. Broad index of the Exchange dropped 3.73% and closed at 77,230. Average daily trading value and volume respectively increased 14.1% and 15.7% at Tehran Stock Exchange in the year ended 20 March 2017.

The equities market number of trading surged 12.9% to exceed 15 million transactions from around 14 million one year earlier.The on-line trading value continued its growth by 23% from IRR 233,378 billion in the fiscal year ended 19 March 2016 to reach IRR 287,206 billion in the last year. The volume of on-line trading also gained 21% to catch up 152,897 million shares, in this year from 126, 114 million shares.

From total trading turnover, First Market (Main and Secondary boards)’s share in trading value, volume and number of trades is respectively 60, 62 and 53 per cent.

Indicators Unit of Measurement

FY Ended 20 March 2017

FY Ended 19 March 2016 Change%

Broad Index - 77,230 80,219 (3.7)

Market Capitalization IRR Billion 3,220,374 3,448,390 (6.6)

Average P/E Ratio X 6.48 7.45 -

Listed Companies Number 325 320 -

Equities and Rights Trading

Total Trading Value IRR Billion 537,936 473,624 13.6

Total Trading Volume Million Shares 252,613 227,798 10.9

Total Number of Trades X1000 Times 15,689 13,922 12.9

Normal Trading Value (Retail & Block) IRR Billion 490,269 425,537 15.7

Normal Trading Vol-ume (Retail & Block) Million Shares 232,975 204,287 13.9

Wholesale Trading Value IRR Billion 47,666 48,086 (9.0)

Wholesale Trading Volume Million Shares 19,638 23,511 (16.5)

Value of Offered State-owned Shares IRR Billion - 15,970 -

Number of Offered State-owned Shares Million Shares - 6,671 -

Average of Daily Total Trading IRR Billion 2,223 1,949 14.1

Average Normal Trading Value (Retail

& Block)IRR Billion 2,026 1,751 15.7

Value – Online Trading IRR Billion 287,206 233,378 23.1

Volume – Online Trading Million Shares 152,897 126,114 21.2

Table 16 – Equities and Rights Markets Indicators

Table 17 – Market Breakdown of Equities and Rights Retail and Block Trading

Table 18 – Normal Trading Volume, Value and Number of Trading (Retail & Block)

Market FY Ended 20 March 2017

FY Ended 19 March 2016 Change %

Trading Value (IRR Billion) 537,936 473,623 13.6

First Market 327,343 307,126 6.6

Second Market 210,593 166,497 26.5

Number of Shares and Rights Trading

(Million Shares)252,613 227,798 10.9

First Market 158,211 156,440 1.1

Second Market 94,402 71,358 32.3

Number of Trading (x1000) 15,688 13,921 12.7

First Market 8,415 7,827 7.5

Second Market 7,273 6,094 19.3

YearVolume(Million Shares)

Value (IRR Bilion)

Number of trading

(x1000)

Working Days

Daily Average

Volume (Million Shares)

Value (IRR Billion)

Number of Trading

FY Ended 20 March

2015 144,646 377,119 12,916 241 600 1,565 53,593

FY Ended 19 March

2016204,287 425,537 13,922 243 841 1,751 57,291

FY Ended 20 March

2017232,975 490,269 15,689 242 963 2,026 64,831



TSEANNUAL REPORT

42 43

Month (Persian Calendar)

No. of Trading Days

Daily Average Trading Value

(IRR Billion)

Daily Average Trading Volume (Million Shares)

Daily Average Number of Trading

19 3,086 1,233 91,057

2 21 2,631 1,162 83,919

3 21 1,847 853 67,141

4 20 2,076 936 61,947

5 21 1,935 931 64,102

6 21 1,539 780 47,826

7 18 2,070 1,030 79,088

8 21 2,204 929 73,275

9 19 1,678 728 53,109

10 20 1,281 845 50,689

11 21 1,743 956 49,875

12 20 2,276 1,186 52,369

Indicator Measurement Unit FY Ended 20 March 2017


Value IRR Billion 93,132 86,262 7.5

Volume (x1000) 92,524 87,992 5.2

No. of Trades No. 28,237 26,110 8.1

Indicator Measurement Unit FY Ended 20 March 2017


Value IRR Million 59,935 11,807 408

Volume (x1000) 3,371,125 57,177 5,796

No. of Trades No. 2,320 1,498 55

Table 19 –Average Normal Trading (Retail & Block) - FY Ended 20 March 2017

Table 22 – Derivatives Market Value, Volume and Number of Trades

Table 23 – Securities Breakdown of Derivatives Market Value, Volume and Number of Trades

Table 21 – Securities Breakdown of Debt Market Value, Volume and Number of Trades

Table 20 – Debt Market Value, Volume and Number of Trades

4-2 Debt Market

In the financial year ended 20 March 2017, total numbers of 11 debt securities were listed and 2 securities were maturated. At the end of the year

4-3 Derivatives Market

Option contracts were launched in the financial year ended 20 March 2017. The following table includes the market’s derivatives products trading data.

5 – Listing and IPO

In the financial year ended 20 March 2017, the listing board held 20 sessions, and 7 listing applications were admitted and the companies were listed at TSE. In the debt market, 11 different securities,

22 participation papers and sukuks were listed at Tehran Stock Exchange.

SecuritiesFY Ended 20 March 2017 FY Ended 19 March 2016

No. of Trades Volume(x1000)

ValueIRR Billion No. of Trades Volume

(x1000)Value

IRR Billion

Certificate of Deposit 5,805 889 899 13,011 1,411 1,411

Sukuks 13,501 20,109 20,393 1,950 10,163 10,192

Participation Papers 8,931 71,526 71,840 11,149 76,418 75,023

Total 28,237 92,524 93,132 26,110 87,992 86,626

SecuritiesFY Ended 20 March 2017 FY Ended 19 March 2016

No. of Trades Volume(x1000)

ValueIRR Million No. of Trades Volume

(x1000)Value

IRR Million

Stock Futures 11 0.02 811 164 0.4 11,249

Embedded Put Options 1,610 3,371,099 18,672 1,334 57,177 559

Options 699 26 40,452 0 0 0

Total 2,320 3,371,125 59,935 1,498 57,177 11,807

including Murabeha sukuks and participation papers were listed in the Exchange. Five new ETFs were also launched in the market during the year.



TSEANNUAL REPORT

44 45

5-1 Equities Market

The listing board approved to list 24 companies and to admit 15 companies in the financial year ended 20 March 2017. Some of these companies were listed in the past year, and the listing process of rest of them postponed to the financial year ending 20 March 2018. Out of 7 listed companies

in the last financial year, 4 companies were newly listed in the capital market and 3 companies were upgraded to be listed at TSE from Iran Farabourse. The following tables illustrates the latest status of the listed, admitted and offered companies, as well as their trading value of listing.

No. Applied Company Listing Date Admission

DateOffering

Date

Capital (IRR Billion)Descriptions

Listing Date Last

1

Iranian Petrochemical

Investment Group

14.03.2016 03.04.2016 25.04.2016 20,000 20,000

2 Mellat Leasing 27.06.2015 06.01.2016 01.06.2016 800 800

3 Asan Pardakht Persian 10.05.2016 26.09.2016 17.10.2016 1,000 1,000

4 Tehran Oil Refinary 10.05.2016 08.10.2016 30.10.2016 12,000 16,000

5 Hamkaran System 27.09.2016 29.10.2016 13.11.2016 750 750

6 Tehran Stock Exchange 27.09.2016 15.10.2016 21.12.2016 1,250 1,250

7Barekat

Pharmaceutical Group

06.08.2016 04.12.2016 05.02.2017 3,400 3,400

8Minou

Industrial Group

16.09.2015 24.08.2016 - 680 1,260

9 Tozi’ Zangan Transfomator 14.05.2016 01.10.2016 - 500 500

10 Jay Oil Refinary 19.07.2016 19.11.2016 - 940 940

11 Kish South Kaveh Steel 19.07.2016 18.01.2017 - 7,000 7,000

12Omid

Investment Bank

14.06.2016 31.01.2017 - 4,000 4,000

13 Mellat Beh Pardakht 24.01.2017 07.03.2017 - 950 950

Table 24 – Listing Applications Review – FY Ended 20 March 2017

No. Applied Company Listing Date Admission

DateOffering

Date

Capital (IRR Billion)Descriptions

Listing Date Last

14Sina Financil

and Investment Group

03.09.2016 08.03.2017 - 1,200 1,200

15Zarrin Kalay e

Mobin (Jahrom Power Plant)

14.06.2016 11.03.2017 - 24,500 24,500

16 Chodan Sazan 27.09.2016 14.03.2017 - 600 600

17 Iranian Atlas 19.07.2016 - - 1,000 1,000

18 Homa Hotel 01.10.2016 - - 1,961 1,961

19 Persia Gas and Oil 15.10.2016 - - 2,000 2,000 Admitted in

2017.

20Pasargad

Power and Energy

29.10.2016 - - 420 420

21National

Building and Industry

10.12.2016 - - 900 900

22 Jam Poly Propylene 20.12.2016 - - 500 500

23 Shafa Darou 20.12.2016 - - 1,180 1,180

24Qadir Power and Energy Investment

11.02.2017 - - 4,500 4,500

25 MAPNA Staff Investment 11.02.2017 - - 1,500 1,500

26

Detergent Industry

Management of Behshahr

Industrial Development

11.02.2017 - - 1,000 1,000

27Asr e Novin Dadegostar

(HiWeb)26.02.2017 - - 500 500

28 Parsian Leasing - - - 1,300 1,300

Admitted in 2017.

29

Pars National Agriculture,

Industry and Animal Husbandry

- - - 325 325

30 Yazd Power Generator - - - 1,200 1,200

31 Asia Tech Data Transfer - - - 300 300

32 FirouzkouH Cement - - - 600 600

Total 98,750 103,336



TSEANNUAL REPORT

46 47

No. Company

First Day of Listing Retail & Bloc Trading from Listing To 20 March 2017

Volume (Million Share)

Value (IRR Billion)

% of Capital

Volume (Million Share)

Value (IRR Billion)

No. of Trading Days

1

Iranian Petrochemical

Investment Group*

7.45 61.11 0.04 1,771 2,286 208

2 Mellat Leasing 87.20 43.92 10.9 474 575.6 141

3 Persian Asan Pardakht 82.56 51.825 8.26 324 4,515 104

4 Tehran Oil Refinery* 2.62 4.9 0.02 449 1,248 80

5 Hamkaran System* 0.61 7.3 0.08 6 29 83

6 Tehran Stock Exchange* 2.38 93.13 0.19 29 146 61

7Barekat

Pharmaceutical Group

340 28.816 10 700 1,608 30

Total 523 1,772 - 3,753 10,408 -

*Transferred companies from Iran Farabourse

Table 25 – Listed Companies Trading Value - FY Ended 20 March 2017

Table 26 – Debt Securities Details and Value Table 27 – ETFs in FY Ended 20 March 2017

5-2 Debt Market

The value of listed debt securities in the financial year ended 20 March 2017, including participation papers and Sukuks equals IRR 32,000 billion, as described in the following table:

5-3 Derivatives Market

In TSE’s derivatives market, stock futures, embedded put options, option contracts are traded. During the financial year ended on 20 March 2017:

• 9 different futures contracts were tradable on 6 underlying shares. 6 contracts among them were matured in the year.

• 7 different contracts embedded put option

5-4 Exchange Traded Funds (ETFs)

In the financial year ended 20 March 2017, 5 ETFs were listed at TSE, increasing total number of these funds to 9 in the Exchange.

No. Kind of Security Issuer Admission

Date Offering Date Maturity DateNominal

Value (IRR Billion)

1 Ijarah Rightel 02.05.2016 03.05.2016 03.05.2020 2,000

2 Participation Pare Isfahan Municipality 06.06.2016 11.06.2016 16.03.2019 3,000

3 Participation Pare Mashhad Municipality 14.08.2016 20.08.2016 18.03.2018 5,000

4 Participation Pare Tehran Municipality 1 05.09.2016 07.09.2016 30.01.2020 4,600

No. ETF Name Security Type Issuer Admission Date Offering Date

1 Parand Paydar Sepehr Fixed-income Sepehr Investment

Bank 02.07.2016 02.07.2016

2 Narvan Maskan Real estate fund Bank Maskan Invest-ment Bank 23.08.2016 28.08.2016

3 Kian Fixed-income Asel Brokerage Firm 09.11.2016 13.11.2016

4 Amin Yekom Farda Fixed-income Amin Investment Bank 22.11.2016 03.12.2016

5 Negin Shahr e Rey Real estate fund Bank Maskan Invest-ment Bank 09.01.2017 15.01.2017

No. Kind of Security Issuer Admission

Date Offering Date Maturity DateNominal

Value (IRR Billion)

5 Participation Pare Tehran Munici-pality 2 05.09.2016 07.09.2016 15.03.2020 2,400

6 Participation Pare Tehran Munici-pality 3 09.10.2016 16.10.2016 15.03.2020 3,000

7 Morabeha SAIPA 16.11.2016 14.11.2016 16.11.2020 3,000

8 Morabeha SAIPA 16.11.2016 14.11.2016 16.11.2020 2,000

9 Participation Pare Mashhad Munici-pality 1 21.10.2016 25.12.2016 13.08.2020 4,000

10 Participation Pare Mashhad Munici-pality 2 03.01.2017 15.01.2017 13.08.2020 2,000

11 Participation Pare Rayan SAIPA Leasing 31.01.2017 06.02.2017 06.02.2021 1,000

Total - - - 32,000

contracts were launched on 4 underlying shares, out of which 3 contracts were matured in the last financial year.

• 88 option contracts were launched on 4 underlying shares, out of which 44 contracts were matured and the others will be developed in the financial year ending 20 March 2018.



TSEANNUAL REPORT

48 49

6 - Companies Re-classification

Based on article 54 of Listing Directive, the stock exchange is mandated to classify listed companies in both Main and Second boards on May each year. The outcome of such classification in the financial year ended 20 March 2017 (listing of 7

7-Financing through Stock Exchange

During the financial year ended 20 March 2017, 89 listed companies applied for capital raise at the

8 - Brokerage Firms

At the end of the last financial year, 105 member brokerage firms with 1,617 trading stations were performing in the market. Among these, 104 firms provided on-line trading access, 58 brokerage firms

During the financial year ended 20 March 2017, launching permit of 188 new trading stations were issued, and 76 trading stations certificates were

and de-listing of 2 companies) indicates total 325 listed companies in 38 different sectors. Based on the same Directive, the de-listed companies are transferred to Iran Farabourse for having a trading platform.

Year

No. of Listed Companies at the Beginning

of Year

No. of Listed and Offered Companies

No. of De-listed Companies

No. of Listed Companies

at the End of the Year

FY Ended 20 March 2017 320

7: Mellat Leasing, Asan Pardakht Persian, Tehran Stock Exchange, Barekat Pharmaceutical, Iranian

Petrochemical Investment Group, Tehran Oil Refinery,

Hamkaran System

2: Chemi Pharmaceutical, Isfahan Tile 325


6: Mobin Petrochemical, Maa Insurance, Jam Petrochemical, Fadjr Petrochemical, Sobhan

Darou, Khuzestan Cement

- 320


6: Saba Nour Steel Raw Materials, Sepahan Oil, North East Real Estate

Investment, Cement Industry Development Investment,

Kavir Tire, Middle East Bank

9: Firouza Engineering, Tolypers, Rangin Industrial

and Chemical, Wool Knitting Tousi, Iran Plaster, Sadid

Industrial Group, Kaf, Isfahan Petrochemical, Kavian Steel

314

Table 28 - Listed and de-listed Companies

Table 29 – Financing through Stock Exchange (IRR billion)

Table 30 – Listed Companies Capital Increase

Table 31 – Brokerage Firms and Trading Stations

Table 32 – Trading Stations Authorizing

Exchange, at the total amount of IRR 167,169 billion. The following tables indicate the details.

Description FY Ended 20 March 2017



Equity Financing 206,370 217,283 225,359

Listed Companies Capital Raise 167,170 188,981 213,473

IPO 39,200 28,302 11,886

Debt Financing 32,000 58,474 3,700

Total Financing 238,370 275,757 229,059

Year Credits and CashRetained Profit,

Reserves and Assets Re-evaluation Funds

Capital Increase (IRR Billion)

FY Ended 20 March 2017 99,020 68,150 167,170

FY Ended 19 March 2016 103,462 85,340 188,981

FY Ended 20 March 2015 105,228 108,244 213,472

Description FY Ended 20 March 2017 FY Ended 19 March 2016

Number of Brokerage Firms 105 104

Number of Trading Stations 1,617 1,505

Number of Trading in Hafez Floor 104 104

Proprietary Floors’ Trading Stations in Tehran 729 650

Regional Trading Stations in Brokerage Firms Branches 513 479

Regional Floors’ Trading Stations 244 244

Mutual Funds Dedicated Trading Stations 27 28

were licensed to act as listing advisors, 45 of them provided offering advisory, 60 firms were authorized for portfolio management and 53 brokerage firms registered mutual funds.

invalidated. As a result, 112 new trading stations were added last year.


Issuing Trading Stations License 188 174

Invalidating Trading Stations License (76) (77)

(Inactive) Issued Licenses - (4)

Total 112 93



TSEANNUAL REPORT

50 51


Issuing Proprietary Floors License 28 36

Invalidating Proprietary Floors License 39 60

Issuing National Representation and Listing License 88 58

No.

City

TSE

Regi

onal

Flo

or

No.

City

Brok

erag

e Fi

rms

Floo

r

FY E

nded

20

Mar

ch 2

017

FY E

nded

19

Mar

ch 2

016

FY E

nded

20

Mar

ch 2

017

FY E

nded

19

Mar

ch 2

016

Trad

ing

Valu

e%

of T

otal

Trad

ing

Valu

e%

of T

otal

Trad

ing

Valu

e%

of T

otal

Trad

ing

Valu

e%

of T

otal

1Ki

sh47

,984

28.5

227

,493

16.8

31

Ara

k3,

689

31.0

21,

933

21.7

3

2Is

faha

n19

,583

11.6

421

,898

13.4

2Ila

m1,

776

14.2

427

23.

06

3M

ashh

ad15

,693

9.33

24,9

1915

.25

3Ka

shan

1,11

08.

0984

59.

5

4Ra

sht

12,1

447.

229,

292

5.69

4Ba

bol

1,01

98.

1765

17.

32

5Ka

raj

10,9

276.

4914

,876

9.1

5Sa

nand

aj79

56.

371,

102

12.3

9

6Za

njan

9,70

35.

778,

747

5.35

6Sh

ahro

ud44

53.

5749

75.

59

7Ta

briz

8,53

15.

078,

875

5.34

7A

mol

442

3.54

513

5.77

8Ya

zd6,

953

4.13

7,27

04.

458

Nei

shab

our

432

3.46

467

5.25

9Sh

iraz

5,98

03.

555,

900

3.61

9G

orga

n42

33.

3931

43.

53

10Q

om4,

383

2.61

5,84

43.

5810

Now

shah

r38

63.

0912

91.

45

11Ke

rman

shah

4,16

12.

474,

301

2.63

11Bo

jnou

rd26

22.

1032

63.

66

12Q

azvi

n3,

096

1.84

2,42

81.

4912

Rafs

anja

n25

12.

0122

22.

5

13A

rdeb

il2,

710

1.61

3,53

12.

1613

Dor

oud

242

1.94

387

4.35

14H

amed

an2,

703

1.61

3,10

11.

914

Sabz

evar

226

1.81

424

4.77

15Ke

rman

2,47

71.

472,

965

1.81

15Bo

rouj

erd

217

1.74

143

1.61

16A

hwaz

2,39

41.

421,

587

0.97

16Kh

orra

m

Aba

d18

81.

5111

81.

33

17Sa

ri2,

274

1.35

2,56

01.

5717

Shah

r e K

ord

176

1.41

194

2.18

18Ba

ndar

Abb

as2,

241

1.33

2,82

31.

7318

Babo

lsar

740.

5980

0.9

19U

rmie

h2,

171

1.29

3,09

71.

919

Bous

hehr

560.

4582

0.92

20Se

mna

n97

10.

5898

50.

620

Qa’e

n15

0.12

500.

56

21Za

heda

n80

40.

4836

30.

2221

Nou

r0

055

0.62

22Bi

rjand

370

0.22

528

0.32

22O

ther

s68

0.54

921.

03

TOTA

L16

8,25

310

011

63,3

8310

0TO

TAL

12,4

7210

08,

896

100

Table 33 – Proprietary Floors Authorization

Tabl

e 34

– T

radi

ng b

y TS

E Re

gion

al F

loor

s/Br

oker

age

Firm

s Fl

oors

(IRR

Bill

ion)

9 - Regional Floors

Facilitating nationwide access to the Exchange’s trading platform, investors training and holding capital market introduction courses, as well as events and workshops, providing media coverage, improving brokerage networks and handling all operations of the capital market in provinces are among the major activities of the regional floors.Beside its main trading floor in the capital city, Tehran Stock Exchange owns 22 regional floors or

offices in some of the cities. The brokerage firms have proprietary floors in some of the cities where TSE is not directly present. During the financial year ended 20 March 2017, the total trading turnover (buying and selling) out of Tehran was amounted as IRR 180,725 billion, 28 percent of total market turnover. Each floor detailed figures are provided in the following table.


TSE’s trading floor

TSEANNUAL REPORT

52


42

r 9 Shiraz 5,980 3.55 5,900 3.61 9 Gorgan 423 3.39 314 3.53

10 Qom 4,383 2.61 5,844 3.58 10 Nowshahr 386 3.09 129 1.45

11 Kermanshah 4,161 2.47 4,301 2.63 11 Bojnourd 262 2.10 326 3.66

12 Qazvin 3,096 1.84 2,428 1.49 12 Rafsanjan 251 2.01 222 2.5 13 Ardebil 2,710 1.61 3,531 2.16 13 Doroud 242 1.94 387 4.35 14 Hamedan 2,703 1.61 3,101 1.9 14 Sabzevar 226 1.81 424 4.77 15 Kerman 2,477 1.47 2,965 1.81 15 Boroujerd 217 1.74 143 1.61

16 Ahwaz 2,394 1.42 1,587 0.97 16 Khorram Abad 188 1.51 118 1.33

17 Sari 2,274 1.35 2,560 1.57 17 Shahr e Kord 176 1.41 194 2.18

18 Bandar Abbas 2,241 1.33 2,823 1.73 18 Babolsar 74 0.59 80 0.9

19 Urmieh 2,171 1.29 3,097 1.9 19 Boushehr 56 0.45 82 0.92 20 Semnan 971 0.58 985 0.6 20 Qa’en 15 0.12 50 0.56 21 Zahedan 804 0.48 363 0.22 21 Nour 0 0 55 0.62 22 Birjand 370 0.22 528 0.32 22 Others 68 0.54 92 1.03

TOTAL 168,253 100 1163,383 100 TOTAL 12,472 100 8,896 100

Chart 9 – Trading by TSE Regional Floors (%)

Chart 10 – Trading by Brokerage Firms Floors (%)

0

5

10

15

20

25

30

Kish

Isfa

han

Mas

hhad

Rash

t

Kara

j

Zanj

an

Tabr

iz

Yazd

Shira

z

Qom

Kerm

ansh

ah

Qaz

vin

Arde

bil

Ham

edan

Kerm

an

Ahw

az

Sari

Band

ar A

bbas

Urm

ieh

Sem

nan

Zahe

dan

Birja

nd

FY 2017

FY 2016

43

Corporate Governance

1 Board of directors

The efficient procedures of corporate governance are vital for integrated operations of capital market, as well as the national economy and need to attract and preserve public confidence. A week implementation of corporate governance may shrink market’s confidence, which can be a reason for capital outflow from the market and a liquidity crisis, leading to price decline in the Exchanges per se. In fact, a company is in charge of its shareholders, as well as investors and its other members. Tehran Stock Exchange has endorsed its corporate governance directives as its commitment to implement the highest ethical standards, transparent and prompt disclosure and thorough observance of all rules and regulations. This has made a series of expectations to assist the board of directors and its committees to cover their obligations.

The nominated board of directors for the financial year ended 20 March 2017 held 15 sessions for assessing about their tasks accomplishment, being harmonized with shareholders’ benefit and balanced with stakeholders’ prospects. The board of directors is included of 3 specialized and 2 subsidiary committees.

2 Auditing Committee

This body is in charge of internal and independent auditors’ surveillance, proposing auditors to the board of directors for appointment and displacement, reviewing auditing reports and verification of the modifying measures for defects controlling, policies and regulations’ non-compliance. The committee applies the compiled information of the company’s financial system, its mechanized structure, the sessions’ minutes and documents, directors’ notes and the points provided in the

0

5

10

15

20

25

30

35

Arak

Ilam

Kash

an

Babo

l

Sana

ndaj

Shah

roud

Amol

Nei

shab

our

Gor

gan

Now

shah

r

Bojn

ourd

Rafs

anja

n

Doro

ud

Sabz

evar

Boro

ujer

d

Khor

ram

Aba

d

Shah

r e K

ord

Babo

lsar

Bous

hehr

Qa’

en

Nou

r

Oth

ers

FY 2017

FY 2016

Chart 9 – Trading by TSE Regional Floors (%)

Chart 10 – Trading by Brokerage Firms Floors (%)


53


TSEANNUAL REPORT

54 55

1- Board of directors

The efficient procedures of corporate governance are vital for integrated operations of capital market, as well as the national economy and need to attract and preserve public confidence. A week implementation of corporate governance may shrink market’s confidence, which can be a reason for capital outflow from the market and a liquidity crisis, leading to price decline in the Exchanges per se. In fact, a company is in charge of its shareholders, as well as investors and its other members. Tehran Stock Exchange has endorsed its corporate governance directives as its commitment to implement the highest ethical standards, transparent and prompt disclosure and thorough observance of all rules and regulations. This has made a series of expectations to assist the board of directors and its committees to cover their obligations.The nominated board of directors for the financial year ended 20 March 2017 held 15 sessions for assessing about their tasks accomplishment, being harmonized with shareholders’ benefit and balanced with stakeholders’ prospects. The board of directors is included of 3 specialized and 2 subsidiary committees.

2 - Auditing Committee

This body is in charge of internal and independent auditors’ surveillance, proposing auditors to the board of directors for appointment and displacement, reviewing auditing reports and verification of the modifying measures for defects controlling, policies and regulations’ non-compliance. The committee applies the compiled information of the company’s financial system, its mechanized structure, the sessions’ minutes and documents, directors’ notes and the points provided in the independent auditors’ reports. It includes 6 members, with at least 3 members from the board of directors, and others appointed by the board from non-executives.

3- Risk Management and Strategy Committee

This body is composed of risk management committee and strategy subordinate commission. They are in charge of monitoring management measures regarding strategic policies and market management, liquidity, operational, reputation and other corporate risks.The committee makes a large part of corporate risk and strategy management structure, and is aimed at fully supporting the management to reach the targets harmonized with corporate strategic plan. It evaluates risk management structure’s appropriateness and reports to the board of directors. This reporting includes all issues related to governance, rule of law and risk management obligations. The committee has 3 members, including one member of the board, an executive nominated by the CEO, and a specialist verified by the board. The committee is allowed to invite independent and qualified individuals to attend some of the meetings. The committee’s head is appointed by the board of directors, or otherwise, by the committee’s members.

4 - Compensation Committee

Observing all staff compensation and certifying their payment compliance with the corporate targets and strategies are among this committee’s duties. It is composed of 5 members, including 3 non-executive board members, the CEO and Vice President, Administration or a human capital specialist. 3 non-executive members are appointed by the board.

5 - Regulation and Directives Commission

Board of directors has considered a specialized commission in order to accomplish its obligations more effectively. It screens executive procedures, and authorizes offices or floors licenses. The committee is also in charge of resolving about members and issuers violation rulings. This body reports the board of directors about its decision. The committee is composed of 4 members, 3 non-executives from board and the CEO.

6 - Construction Committee

Tehran Stock Exchange’s new building construction project was started over a land as large as 2,621 sqm. since 2010 in Sa’adat Abad region, Tehran. The committee acts to direct, apply proper policies and monitor the construction stages in this project. 3 board members, as well as the CEO, logistics

vice president and 2 independent experts are the committee members with the project executor contractor as the committee’s secretary. Moreover, another project to build Zanjan Financial Center in a piece of land of 1,000 sqm has been initiated since winter 2015.

The latest estimates of the project’s expenses (including land, design and construction), as well as data center amount IRR 2,472 billion, out of which IRR 1,897 billion has been fully paid. The building was more than 90% physically constructed, and the financial obligations were 77% accomplished on 20 March 2017.

7 - Board’s Secretariat

The board of directors has a secretariat which is working under chairperson’s surveillance. This is in charge of sessions’ arrangements, documents provision, and minutes’ preparation. The secretariat is the official reference for board decisions disclosure.

Floors Application Area sqm.

-6 Data center 2,579

-5 to -2 Parking 10,076

-1 Commercial use, training and assembly salons 2,217

GF Lobby, trading floor 1,606

Mezzanine Commercial use, investors assembly 1,362

+1 to +10 Administrative use 15,928

Total area (17 floors) 33,768

8 - Remuneration

Based on the GA’s resolution, total gross amount of IRR 2,100 million was dedicated for the board remuneration of the financial year ended 19 March 2016.The compensation amount of the CEO and other staff was to be determined by the board members. Each board member was entitled to be paid IRR 6 million for each board session (maximum twice a month). The compensation of the board members will be fully paid to the related legal entities.

Table 35 – New building floors and space application


TSEANNUAL REPORT

56 57


9 - Executive Directors

No. Name Position

1 Seyed Rouhollah Hosseini Moghaddam Vice President, Issuers and Members

2 Ali Abbas Karimi Vice President, Administration

3 Ali Sahraee Vice President, Market

4 Shahram Daneshvar Director,Members Department

5 Esmaeil Dargahi Director, Listing

6 Tuba Dehghani Ahmadabad Director, Issuers Department

7 Kazem Farhang Director, IT Department

8 Mahbouneh Jafary Director, Investment Culture Development Department

9 Zohreh Karimi Director,Contracts and Legal Affairs Department

10 Samira Khoshnood Director,Market Surveillance Department

11 Reza Kiani Director, Research and Development Department

12 Ramin Malmasi Director, Organizational Excellence Department

13 Naser Omidvari Director, Internal Auditing Department

14 Seyed Mahdi Parchini Parchin Director,Equity Market Operations

15 Mohammadali Pouladi Baghbaderani Director, Administration Department

16 Hamid Rouhbakhsh Amoli Moghaddam Director, PR and International Department

17 Kazem Shaker Director,Building Development

18 Azadeh Yazdani Director, Finance Department

Table 36 – Executive Officers

TSE’s new building (under Construction)

10 - Independent Auditor and Legal Inspector

TSE’s auditor and inspector is Tadvin & Partners Co., and the substitute inspector is Shakes Andishan Auditing Institute. The auditing committee is in charge of proposing the auditor and determining its remuneration.



TSEANNUAL REPORT

58 59

Risk Analysis Report

Risk sources are generally categorized into diversifiable or nonsystematic risk undiversifiable or systematic risk. The nonsystematic risk depends on the company’s features such as business, financial and liquidity risks, type of product, capital structure and shareholders composition. The systematic risk, on the other hand, refers to the market’s general conditions, and national political and economic developments, business cycles, inflation and unemployment, as well as, global economic conditions and exchange rates. Changing of regulations in a jurisdiction by legal, judiciary or governmental authorities, such as bank interest rates, customs duties, and exchange rates, irrespective of political or economic advantages, will create systematic risk. During the past years, risks posed by international sanctions were among major sources of systematic risks.In the short term, exogenous variables (political, economic, social factors) are more effective on trading volume and equities prices in Tehran Stock Exchange than endogenous factors (companies’


profitability, efficiency, development schemes and internal projects).Diversity of industries, investment funds and the listed companies in Tehran Stock Exchange requires investors to analyze their risk-return expectations in investment decisions for a suitable outcome. Recognition, evaluation and management of the risk are three basic steps to mitigate it. The major challenge of most investors is their unawareness about existence and dimensions of some risks, and the aftermath of such investment. Risk concept is usually interpreted negatively, but it is an indispensible part of investment process, which needs to be accomplished with an accurate understanding of the risk.It is believed that with more transparency of regulations, market information symmetry and sustainable financial policymaking, less systematic risk will be experienced. Once strategic policies of guaranteed purchase, issuing exploitation licenses, market adjustment and raw materials pricing become more transparent, the investors will participate in a less cloudy environment.


TSEANNUAL REPORT

60 61

Category Kind of risks

A - Systematic

1- International risksOil market price volatilities and their effects on national budget, as well as oil, gas and petrochemical sectorGold prices fluctuations and the impacts on forex and currency prices-sensitive sectorsCommodity and basic metals markets and their reactions to the global pricesCapital flowEconomic development among business partners, sanctions, neighboring countries’ political developmentAmbiguities about JCPOA implementation

2- Macro environment risksRisks related to political, regulatory and social environments• Budget• Commodities and services pricing policies• Customs tariffs and duties• Parliament resolutions• Tax rate changes• Government debts• New environmental rules• Investors expertise in the capital marketMacro economy risk• Economic growth• Interest rate changes• Manufacturing sector investment fluctuations• Residential sector investment fluctuations• Liquidity fluctuations• Inflation movements• Income changes (purchasing power)• Exchange rate fluctuations• (Un)employment rate• Export/import volume

3- Operating environment risksCompetitors risk• Parallel markets, including gold, housing, currency regarding their investment potentials• Money market and other Exchanges regarding their financing and investment potentialsBusiness partners risks• Operational risk of CSDI as a result of possible deficiencies in the clearing system, or operations delays• Operational risk of TSETMC as a result of possible deficiencies in the trading system, and delays in providing the required infrastructures to develop new products• Brokerage companies as a result of incompliance with the regulations, investors dissatisfaction, and market’s under development• Investment banks as a result of unappealing existing financing methods and time-consuming process• Time-consuming process of regulating• Lack of enough regulations for corporate governance and hedging instruments• Exchange listed companies’ disclosure quality and transparency

B - Nonsystematic Risks of human errors, regulatory deficiencies, member brokerage firms and issuers arrangements

Table 37 – Risks at Tehran Stock Exchange

Table 38 – Related Parties Transactions (IRR Million)

Description Name Relativity Office RentRent

Contract Deposit

Other Transactions

Delivered/received

guarantees

Related Companies

Iran Farabourse Board member - - 7,000 -

Financial Center Co. Board member - - 2,215 -

Central Assets Management

Co.Board member - - - -

Others

Bank Tejarat Brokerage Board member 989 - - -

Mofid Brokerage Board member 902 - - -

Saba Ta’min Brokerage Board member 958 - - -

Bank Mellat Brokerage Board member 253 - - -

Tadbirgaran Farda

BroekrageBoard member 44 - - -

Bank Pasargad Brokerage Board member 415 - - -

Bank Tejarat Board member 1,182 13,983 - -

Iran Energy Exchange Board member - - 2,397 -

SEO Market regulator - - 21,833 2,823

Total 4,743 13,983 33,445 2,823


TSEANNUAL REPORT

62 63


Measureson GA’s ObligationsThe last financial year’s obligations based on the resolutions of the general assembly are as follow:

a- Dedicating IRR 59,316 million of the payable profit to the legal deposit

b- Paying IRR 110,000 as dividend (DPS: IRR 100)

c- Transferring the remaining amount of payable profits to reserve deposits

Also, the company’s capital gain for the value of IRR 400,000 million was authorized to be implemented in one or more phases. The initial phase was accomplished last year for the amount of IRR 150,000 million. During the second phase, the capital will be increased to IRR 1,500 billion.

Board’s Proposal for Dividends PaymentMembers of the board propose the GA to authorize paying out of IRR 37,500 million (IRR 30 for each share) as dividends and transferring of the remaining amount to the reserve and prudential deposits.

Operations and Achievements

in the Financial Year Ended 20 March 2017

Descrip-tion Name Relativity

Trade Receiva-

bles

Non-trade Receiva-

bles

Non-trade Payables Dividends

20 March 2016

19 March 2015

Gross Gross

Related Companies

Iran Farabourse

Board member - 3,830 - - 3,830 17,675

Central Assets

Management Co.

Board member - 881 - - 881 -

Iran Financial

Center

Board member - 2,791 - - 2,791 -

Total - 7,502 - - 7,502 17,675

Descrip-tion Name Relativity

Trade Receiva-

bles

Non-trade Receiva-

bles

Non-trade Payables Dividends

20 March 2016

19 March 2015

Gross Gross

Others

CSDI Investee 13,156 455 - - 13,611 29,858

Bank Tejarat Board member 55 1,615 13,983 - 12,313 -

Bank Tejarat Brokerage

Board member - - 1,728 - 1,728 1,920

Saba Ta’min Brokerage

Board member - - 586 - 586 -

Mofid Brokerage

Board member - - 3,755 - 3,755 13,799

Bank Mellat Brokerage

Board member - - 2,774 - 2,774 -

Tose’e Farda Brokerage

Board member - - 280 - 280 -

Tadbirgaran Farda

Brokerage

Board member - - 3,645 - 3,645 -

Bank Pasargad

Brokerage

Board member - - 5,278 - 5,278 -

Tose’e Melli Investment

Co.

Board member 56 - - - 56 -

Parsian Insurance

Co.

Board member 79 - - - 79 88

Iran Energy Exchange

Board member - 2,398 - - 2,398 -

Alborz Insurance

Co.

Board member 5 - - - 5 5

SEO Regulator - - - 25,675 3,818

Total 13,351 11,970 32,029 23,651

56,034

47,626

19,537

Table 39 – Related Parties Final Accounts (IRR Million)


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64 65

Listing and Issuers Department

Operations and Achievements in the Financial Year Development Department

Development plans• Holding marketing sessions (regional seminars) for debt instruments listing

• Iron ore industry analysis

• Accreditation process improvement

• Brokerage companies ranking directive revising

Current activities• Listing and offering of 4 companies’ shares: Mellat Leasing (IRR 800 billion), Asan Pardakht Persian (IRR 1,000 billion), Tehran Stock Exchange (IRR 1,250 billion), Barekat Pharmaceutical Group (IRR 3,400)

• Transferring and offering 3 companies’ shares from Iran Farabourse: Iranian Petrochemical Investment (IRR 20,000 billion), Hamkaran System (IRR 750 billion), Tehran Oil Refinery (IRR 12,000 billion)

• Admission of the following companies: Minou

Development plans• Reviewing TSE’s international membership and interactions

• Studying algorithmic trading requirements, infrastructure and outcomes at TSE

• Devising futures contracts on the listed companies’ dividends

• Preparing TSE’s annual report and fact book

• Analyzing TSE’s value weighted and equal weighted indices movements

• Considering dividends-backed listing securities methods

• Establishing listing and trading mechanism of equity certificate of deposits in the capital market

• Acknowledging Repo contracts and feasibility study of their introduction in TSE

• Debt instruments designing

Industrial, Zangan Transformer, Jey Oil Refinery, South Kaveh Steel, Omid Investment Bank, Mellat Bepardakht, Sina Financial and Credit Holding, Jahrom Generator Development, Chodan Sazan

• The admitted but not listed companies include: Iranian Atlas, Homa Hotel, Persia Oil and Gas, Pasargad Power and Energy, Shafa Darou Investment, Jam Polypropylene, National Construction and Industry, Qadir power and Energy Investment, MAPNA Group Investment, Behshahr Detergent Industry Management, and Hiweb

• Listing fixed income securities including Sukuks, municipality participation papers, etc.

• 570 supervising visits to brokerage firms

• Holding more than 170,000 person/hour training courses in the regional floors

• Holding 1,666 person/hour issuers upgrading courses

• Revising TSE’s strategic plan

• Reviewing and trouble shooting of TSE’s marketing activities

Current activities• Holding +10,500 person/hour specialized courses for market participants, brokerage agents and public sessions

• Holding stock portfolio option and futures contracts forum, and a regional seminar on debt instruments introduction in Kermanshah floor

• Publishing one new book and 3 technical brochures

• Sponsoring 4 dissertations and research projects

• Holding incessant control sessions and quarterly monitoring of projects development

• Introducing new indices, certificates of deposit, equity portfolio derivatives, short selling and currency futures trading

Tehran Stock Exchange in line with its macro strategies, sketched development plans and activities of the Exchange during the financial year ended 20 march 2017.

Conference on Attracting Foreign Capital to Iran , Tehran - Oct. 2017 Conference on Attracting Foreign Capital to Iran , Tehran - Oct. 2017

TSEANNUAL REPORT

66 67

Market Department

Development plans

• Launching option contracts market• Reviewing market surveillance reference• Surveillance platform monitoring• Studying other exchanges’ surveillance and disclosure procedures• Preparing IPO and book-building directives• Business intelligence programing in line with surveillance targets• Studying and classifying all types of market manipulation and their cases in other exchanges

Current activities

• New futures contract introduction• Abnormal trading detection operations• Removing trading limitations in investment funds• Providing FAQ for option contracts • Comparative analysis of existing manipulations with the new violations related to new trading instruments• Making algorithms of front running in a cooperation with Iran Farabourse• Shareholders complaint inspection• Inspecting suspicious trades against money laundering

Chief Executive Department

Development plans

• Revising the English section of TSE’s website to facilitate foreign investors access to the market

Tehran Stock Exchange’s strategic plan

TSE’s strategic plan includes goals and macro strategies, as well as operational and development programs as follow:

Chart 10 – Macro Goals

Goal 1: increasing capital market’s share in financing economic productive activities

Goal 2: applying effective regulations and procedures in order to protect market’s integrity and shareholders’ rights

Goal 3: deepening and expanding the market, as well as facilitating its public access with modern technology and updated processes

Goal 4: improving financial literacy and investment culture in the country

Goal 5: observing accountability and transparency to interact with all stakeholders

Goal 6: Developing physical assets and human capital constant

Goal 7: Making value for shareholders

Chart 11 - Macro Strategies

The Exchange’s macro strategies in operational and administrative fields include:

Designing new financial instruments and trading mechanisms

Public investment development and encouraging

investors to indirect participation in the market

Trading and surveillance infrastructure development and upgrading

Improving listing advisors status and role in the listing process

Facilitating trading access in cyber space

Increasing efficiency in regional trading floors

Developing investment culture and planning to raise investment base of the country

Supporting disclosure system, aiming at mitigating risks and increasing transparency

Creating advantage and brand management at TSE

Effective application of international memberships and cooperation with international Exchanges

Increasing incentives and constant improvements in the staff occupational attitudes

Constant improvement of human sources capability and efficiency

Developing interaction with the listed companies and providing new mechanisms for monitoring issuers and upgrading internal auditing

Effective connections with the market’s active participants to establish required regulations and deregulations

Cash flow management by capital and money markets’ mechanisms

Reviewing organizational regulations and management settings

Planning for less ownership centralization and more free float equities in the listed companies

Current activities

• Signing MoU with the stock exchanges of Athens and Munich• Arranging 48 delegations’ visit to TSE (257 visitors)• Holding quarterly press conferences

Logistics Department

Development plans• Designing and implementing non-cash payments

Current activities• Holding average 19 person/hour training for each of TSE’s staff

• Revising human resources’ existing directives and bylaws• Providing financial directives regarding general assembly, budget making and revenue finding• Accomplishing the construction operations of the new building for TSE


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Department Development plans Current activities

Issuers and members

• Listing Iranian companies in international markets• Issuing foreign currency debt securities overseas• Pursuing prospectus issues (major shareholders)• Providing surveillance and inspection procedures for option contracts• Differentiating and ranking of the brokerage companies• Implementing evaluation system for regional floors• Holding workshops and semester-based courses with new topics

• Listing of 15 new companies and transferring 5 companies from IFB• Listing 10 funds, including ETFs, project and construction funds• Listing 20 debt securities• Holding 15 marketing sessions for different securities listing• Holding +150K person/hour training in the regional floors• 550 visits to brokerage companies• Holding 2,000 person/hour training courses on issuing requirements• Calculating corporate governance grade for the listed companies• Preparing a guide for investment at TSE IN English language• Frequent meetings with mutual funds managers during the year• Trouble shooting sessions with nominated industries• Preparing surveillance reports of the companies• Holding quarterly meetings with brokerage houses

Development

Doing comparative analyses among stock markets and their boards as a TSE’s markets revision feasibility study• Providing a gap analysis report on mixed tradable structured instruments• Reviewing the social services provided by TSE• Studying halting and suspension mechanism of trad-ing at TSE and feasibility of improvement• Comparative analysis of investors protection funds in stock markets• Studying the executive processes of capital increase at TSE and feasibility of improvement• Providing a gap analysis report on price fluctuations derivatives• Preparing a gap analysis report on turbo certificates• Providing a gap analysis report on equity based finan-cial instruments• Trouble shooting of sukuks marketing• Reviewing trading behaviors of 4 investors groups (2nd. Version)• Studying capital market’s role on the economic and employment growth• Analyzing the process and quality of dividends pay-ment at TSE• Finalizing new trading and post-trade system procure-ment• Producing training animations• Inscribing the risk management regime• Implementing TSE’s macro strategies based on bal-anced scorecard

Department Development plans Current activities

Administra-tion

• Employment grading system implementation• New financial system establishment• Reviewing financial procedures

• Holding average 15 person/hour training courses for each staff• Finalizing construction operations of TSE’s new premises• Preparing capital gain reports• Human resources and financial directives revision

Market

• Developing option markets• Revising executive procedures of new financial instru-ments• Upgrading trading platform• Designing surveillance procedures for option contracts• Cooperation with TSETMC for designing a platform to provide book building and underwriting services in IPOs

• Introducing option contracts on new underlying equities• Marketing for equity option contracts• Documenting book building process in IPOs• Developing investors’ guide about trading sys-tem’s microstructures• Designing risk management system of options contracts• Launching on-line trading access for option contracts• Contracts exercise system launching

Chief Executive

Department• Legal review of TSE’s trading directives

• Partnership in 50th anniversary of capital market in Iran• Holding an introductory seminar for local issuers about listing requirements in interna-tional markets• Quarterly press conferences and meetings with investors• Attending local and international exhibitions• Organizing foreign delegates visits to TSE• Finalizing international contracts and mem-berships

Targets &plans in 2017-2018

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Memberships

TSE’s International

Relations

TSE’s International

Relations

MoUs

1. Malaysia 2007

2. Indonesia 2008

3. South Korea 2009

4. Cyprus 2009

5. Damascus 2010

6. Lahore 2011

7. Kazakhstan 2011

8. Karachi 2012

9. Muscat 2014

10.Istanbul 2015

11.Athens 2016

12.Munich 2016

1992

1995

2008

2008

Tradable Instruments in TSE

Iran’s Capital Market Financial Entities:

1.Equities

2.Rights

3.Debt Securities

(Islamic Participation Papers, Sukuks, CDs,)

4.Futures Contracts

5.Option Contracts

6.Exchange-Tradad Funds

1. Brokerage Firms

2.Investment Bank Firms

3.Investment Funds

4. Investment Firms

5. Holding Firms

6.Market Maker

7. Portfolio Manager

8. Investment Consultants

9. Financial Information Analysis Firms

10. Listing Advisor

11. Offering Advisor

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FINANCIAL STATEMENTS For the Fiscal Year Ended March 20, 2017

Tehran Stock ExchangeAnnual Report

Fiscal Year Ended 20 March 2017

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74 75

Report of Independent Auditor and Legal Inspector To the General Assembly

Tehran Stock Exchange Corporation

Report on the Financial Statements

1. We have audited the balance sheet of Tehran Stock Exchange Corporation as of 1395 and the income and cash flow statements of the Company for the fiscal year ended 3/20/2017, together with notes 1-27 thereof.

Board of Directors’ responsibility

2. The responsibility of financial statements is with the company’s Board of Directors according to accounting standards. The board of directors should plan, apply and maintain the relevant internal controls in order to prepare the financial statements which are free from material misstatements resulted from frauds and errors.

Auditor’s and legal Inspector’s Responsibility

3. Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with the Auditing Standard of financial statements. These standards require that we meet the requirements of professional ethics and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements. The audit includes examining, on a

Opinion

4. In our opinion, the financial statements referred to above present fairly in all material aspects in conformity with Iranian Accounting Standards.

test basis, evidences supporting the amounts and disclosures in the financial statements. Deciding on the auditing methods is on the auditor’s judgment and based on reviewing any risks of material misstatement resulted from frauds and errors in the financial statements. To review the risks, we assess internal controls related to the preparation and presentation of financial statements in order to plan the relevant audit methods in the current circumstances, not to express an opinion on the effectiveness of the internal controls. An audit also includes assessing the accounting principles and procedures used and significant estimates made by the Board as well as evaluating the overall fairness of financial statement presentation. We believe our audit provides a reasonable basis for our opinion. Also, our responsibility is to report to the general assembly of shareholders on any noncompliance with the legal requirements set out in the Commercial Code as amended and the company’s provisions of the Articles of Incorporation.

Report on Other Legal and Regulatory Requirements

Reports on other Duties of Legal Inspector

5. The transaction included in the explanatory note 26 to the financial statements has been examined as all transactions subject to the Article 129 of the Commercial Code, which are conducted and reported to us by the Company’s Board of Directors. In these transactions the provisions of the Article 129 including permission of the Board of directors and no participation of the beneficiary manager, have been observed. We have not observed any evidences indicating that the transaction has not been conducted on the appropriate trade conditions and in normal course of the company’s activities.

6. We have examined the report of the Board of Directors to the Annual General Meeting of the company in respect of the Company’s general status and activities, as the subject of the article 232 of the Commercial Code. Based on our examinations,

we have not observed any material cases of non-conformity of the provided information with books and records submitted to us by the Board of Directors.

Report on Other Auditor’s Legal and Regulatory Responsibilities

7. In respect to the Announcement approved by Securities and Exchange Organization in relation to the Checklist of internal controls on financial reporting, , we have examined the checklist and no material cases have been observed, except that a proper risk assessment and management system is required.

8. With respect to the article 33 of anti-money laundering rules for auditors, we have examined the rules and procedures compliance in the framework of auditing standards. We have not observed any material cases of non-compliance with the rules and procedures.

2 July 2017

Tadvin Audit institute and Colleagues

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Tehran Stock Exchange CorporationFinancial StatementsFor the Fiscal year ended March 20, 2017

We would like to submit the financial statements of Tehran Stock Exchange Corporation for The fiscal year ended March 20, 2017. Components of the financial statements are as followings:

Equity method Primary Financial Statements

• Balance sheet• Income statement Retained earnings account• Cash flow statement

Primary Financial Statements

• Balance sheet• Income statement Retained earnings account• Cash flow statement

Explanatory Notes

• History• Basis for preparing Financial Statements• Equity basis• Significant Accounting policies• Notes to the Financial Statements (items and numbers)

The financial statements have been prepared according to the National Accounting Standards and they have been approved by the Board of Directors on May 26, 2017.

Member of the Board of Directors Position

Mohammad Esmaeel Fadaeenejad

Chairman

Ali Akbar Amin Tafreshi Vice Chairman

Mojtaba Taghipoor Non-executive member

Abbas Naeemi Non-executive member

Jamshid Imani Non-executive member

Farhad Abdollahzade Non-executive member

Mostafa Zarghami Non-executive member

Hossein Amiri Organizational Regulator

Assets Note

March 20,2017 Million

Rials


Rials

Liabilities & shareholders' equity Note


Rials


Rials

Current Assets: Current Liabilities:

Cash 3 36,816 59,320 Non-trade Payables 11 333,439 260,910

Short Term Investments 4 19,689 290,121 Taxes 12 50,902 56,964

Trade and non-trade Accounts Receivable 5 111,923 140,263 Dividends 13 17,080 8,645

Prepayments 6 7,092 4,597

Total Current Assets 175,520 494,301 Total Current Liabilities 401,421 326,519

Non-Current Assets: Noncurrent liabilities:

Long Term Receivables 5 30,634 25,692

Long Term Investments 7 221,761 189,910 Provisions for Employees’ Termination Benefits 14 53,692 41,415

Intangible assets 8 35,092 3,150

Tangible Fixed Assets 9 1,862,027 1,292,780

Other Assets 10 4,842 3,513

Total Non-Current Assets 2,154,356 1,515,045 Total Non-Current Liabilities 53,692 41,415

Total Liabilities 455,113 367,934

Shareholders' equity:

Paid-in capital (1250 million shares paid totally) 15 1,250,000 1,100,000

Legal reserve 16 91,773 76,198

prudential reserve 17 66,438 62,138

Retained earning 466,552 403,076

Total Shareholders' equity 1,874,763 1,641,412

Total Assets 2,329,876 2,009,346 Total Liabilities and Shareholders, Equity 2,329,876 2,009,346

Members of the Board of Directors

Equity Method Balance Sheet - For the Fiscal year ended March 20, 2017

Explanatory notes are an integral part of financial statements.


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Assets NoteFiscal year ended

March 20,2017Million Rials

Fiscal year endedMarch 20,2016

Million Rials

Services revenue 18 644,463 573,433

Cost of services 19 (254,497) (223,572)

Gross income 389,966 349,861

Administrative and general expenses 20 (122,696) (117,690)

Operating income 267,270 232,171

Other non-operating income and expenses 21 72,674 109302

Income irrespective of income from associate companies 339,944 341473

Income from associate companies 7 60,630 60,979

Income before tax 400,574 402,452

Income tax 12 (57,223) (61,647)

Net income 343,351 340,805

Earnings per shares:

Revenue 173 139

Gains 102 133

Earnings per share 22 275 272

Net Income 343,351 340,805

Retained earnings at the beginning of the period 403,076 364,639

Prior period adjustment - (1,223)

Retained earnings at the beginning of the period-adjusted 403,076 363,416

Dividend 13 (110,000) (90,000)

Capitalization 15 (92,000) (137,000)

Income allocation: 544,427 477,221

Legal reserve 16 (15,575) (14,829)

Prudential reserve 17 (62,300) (59,316)

Retained earnings at the end of the period 466,552 403,076

Assets NoteFiscal year ended

March 20,2017Million Rials

Fiscal year endedMarch 20,2016

Million Rials

Operating activities:

Net cash inflow from operating activities 23 407,897 367,390

Return on investments and servicing of finance:

Interest received from bank deposits 50,540 92,908

Earnings per share received 20,746 15,341

Dividends Paid (101,565) (85,025)

Net cash inflow (Outflow) from Investment Returns and servic-ing of finance (30,279) 23,224

Income tax:

Income Tax paid (59,870) (63,392)

Investing activities:

Payments for acquisition of tangible fixed assets (578,464) (414,928)

Receipts from short term investment sales 270,432 142,707

Receipts from tangible fixed asset sales 45 21

Payments for acquisition of intangible assets (32,265) -

Receipts from prudential reserve release - (3,323)

Net cash out flow from investing activities (340,252) (274,523)

Net cash increase (decrease) (22,504) 52,699

Cash Balance at the beginning of the period 59,320 6,621

Cash balance at the end of the period 36,816 59,320

Equity method Income Statement For the Fiscal year ended March 20, 2017 Equity Method Cash flow Statement For the Fiscal year ended March 20, 2017

Explanatory notes are an integral part of financial statements.Explanatory notes are an integral part of financial statements

Financial Statements

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1. Background 2. Significant Accounting Policies

1.1. History

Tehran Stock Exchange Corporation has been founded according to the Securities Market Law approved on November 22, 2005, and registered with the number 286502 with the Companies & Non-commercial Institutions Registration Office in Tehran. According to approval of Securities listing Council, the company is listed on the main board of the main market of Tehran Stock Exchange. The head office of the company is located in Tehran and has 23 Branches within the country and an independent registered branch in Kish Island by now.

1.2. Main Activities

According to the Provision 3 of the Articles of Incorporation, the main activities of the company are:

• Establishing, organizing and operating the Stock Exchange for making trades on listed securities by Iranian and foreign parties according to the law and regulations.

• Listing securities including securities of foreign

2.1. Basis for preparing financial statements

The financial statements (primary financial statements and equity financial statements) of the Company have been prepared mainly on historical cost basis and, where necessary, current values have been used.

2.2. Basis for equity method

2.2.1. Equity financial statements have been prepared through aggregation of items of Tehran Stock Exchange financial statements with TSE’s share of changes in net assets and operation results of its associated companies including Farabourse (out of the counter) Company and Central Asset

2.3. Investments

issuers according to the law and regulations.

• Determining the brokerage membership conditions for different groups of members, admitting the membership applicants, and enactment and enforcement of professional and disciplinary principles, determining the members’ duties and responsibilities and monitoring them.

• Providing conditions necessary for fair access of members to trades of listed securities.

• Cooperation and Consistency with the other financial institutions undertaking responsibilities related to securities trades, making researches, training, culture developing, and cooperation with other Iranian and foreign Exchanges to share information and experiences.

• Supervising well conduction of listed securities transactions and supervising issuers’ activities. Providing, collecting, processing and issuing information related to securities, and performing other duties according to the law and regulations.

1.3. Employment position

The number of employees at the end of the financial period is as follows:

Permanent and temporary employee

March 20,2017

March 20,2016

328 314

Evaluation method Equity method financial statements Investor's financial statements

Long term investments:

Investment in associates Equity method Cost (less accumulated impairment of investments)

Other long term investments Cost (less accumulated impairment of investments)

Cost (less accumulated impairment of investments)

Revenue recognition method:

Investment in associates Equity methodAt earning approval by the investee's

general association of shareholders ( until financial statements approval)

Other long term and current investments

At earning approval by the investee's general association of shareholders ( until

the balance sheet date)

At earning approval by the investee's general association of shareholders (until

the balance sheet date)

Investments in other secu-rities At interest realization At interest realization

Management of Capital Market, less of unrealized gains and losses from transactions.

2.2.2 The investor company’s share of associated companies’ operation has been reflected in income and comprehensive income statements as the case may be.

2.2.3. The fiscal year for Central Asset Management of Capital Market is ended) is ended in January of the next year, however, its financial statements are used in equity calculations as before. Any significant event occurred until the parent company’s financial statement date, should be accounted for in the financial statements of the associate company Central Asset Management of Capital Market.



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2.4. Goodwill

Accounting for commercial combinations as an acquisition is conducted based on purchase method. The cost surplus of acquisition of the associated company subject to equity method for the group share of net fair value of net assets at acquisition date, is recognized as goodwill and amortized after 20 years. As the acquisition of associated companies by Tehran Stock Exchange is made at the foundation date, fair value of net assets has been equal to the book value and no goodwill has been created.

2.5. Intangible Assets

Intangible assets are carried on the cost basis and amortizable intangible assets (software) are amortized until maximum 3 years and based on straight line basis.

2.6. Tangible fixed assets

2.6.1. Tangible fixed assets are carried on the cost basis. Costs for betterment and substantial repairs resulting in a significant increase in the capacity and useful life of fixed assets or an improvement of their output quality, are accounted for as capital costs and depreciated during the remaining useful life of the relevant assets. Costs necessary to maintain the normal capacity of the assets like maintenance and insignificant repairs, are accounted for as expenses of the period when incurred.

2.6.2. Depreciation of tangible fixed assets are calculated based on the estimated useful life of the asset, according to the depreciation regulations included in the Article 149 of the amendment of the Direct Taxation Act approved in 1988 and on the basis of the following rates and methods:

2.6.3. Fixed assets acquired and used within a month are depreciated and carried from the beginning of the next month. When an asset is

Assets Depreciation rate Depreciation method

Buildings 25 years Straight line

Computer system and hardware 3 years Straight line

Administrative equipment 6,5 years Straight line

Vehicles 6 years Straight line

Constructions of the rental building 3 years Straight line

not used for any reason like work stopping, its depreciation will be equivalent to 30% of the depreciation rate included in the table above.

2.7. Devaluation of Non-current Assets

2.7.1. If there is any sign of devaluation of assets at the end of any reporting period, a devaluation test is made, that is, the recoverable amount of the asset is estimated and compared with its book value. If the estimation is impossible, the recoverable amount of the cash generating unit the asset is belonged to will be determined.

2.7.2. Devaluation test of intangible assets is conducted annually irrespective of any sign of it.

2.7.3. Recoverable amount of an asset (or cash generating unit) is equal to the sale value divided into the more of sale costs or economic value. The economic value is equal to the current value of future cash flows from asset using discount rate

before tax indicating the time value of money and the asset risks that the estimated future cash flows have not been adjusted for.

2.7.4. Only if the recoverable amount of an asset is less than its book value, the book value decreases to the recoverable amount and the difference is immediately included in income statement as impairment losses.

2.7.5. If the recoverable amount increases from the last loss recognition, which indicates returning of impairment losses, the asset book value increases to new recoverable amount. The return of asset impairment losses is immediately included in income statement.

2.8

Foreign currency items with the formal exchange rate at the balance sheet date and expenses carried in foreign currency at historical cost are translated with the formal exchange rate at the date the transaction is entered into. Differences arising from settlement or exchange of foreign currency items are recognized as cost of that asset for qualified asset and as income or expenses of the period when incurred for other assets.

2.9. Provision for employees’ termination benefits

Provision for employees’ termination benefits are calculated and carried according to their last monthly fixed salary and continuous benefits for every year of their service.

2.10. Revenue recognition

The income from services is recognized when services are rendered.



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3. Cash

5. Trade and non-trade accounts receivable

4. Short – term investments

3.1. Cash in hand at the balance sheet date foreign currencies amounted 466 million Rials including 14,298.81 Dollars and 2.54 Euro which have been converted to 32,580 Rials and 35, 023 Rials, respectively as the balance sheet.

5.1.1 The amount includes 4,374 million Rials as admission fee and 16,338 million Rials as listing fee. The provision for doubtful debts as amounted 4,102 million Rials is related to the balance of annual receivables from some listed firms for listing fees and some delisted firms. The amount of 931 million Rials of all receivables has been collected up to financial statements approval date.

4.1. Short term deposits in Day Bank will be held for more than 3 months.

The company’s cash in hand at the balance sheet date are as following:

Notes March 20,2017 Million Rials March 20, 2016 Million Rials

Bank accounts (Rial) 3.1 35,703 55,187

Fund & Petty Cash (Rial) 3.2 1,113 4,133

Total 36,816 59,320

Notes

March 20,2017March

20,2016 million Rial

2017/3/20million Rial

Provision for doubt-ful debts

million Rial

Netmillion Rial

Trade

Listed companies (listing fees) 5.1.1 20,712 (4,102) 16,610 11,714

Brokerage (rent, service, tax, value added tax) 16,336 16,336 48,701

Central Depository and Settlement Corporation 5.1.2 13,554 13,554 29,858

Non-trade

Associated companies:

Over the counter (Farabourse) 29,963 29,963 17,675

Financial center 3,016 3,016 1,402

Central financial management 881 881 152

Others:

Loans to Employees (current portion) 17,229 17,229 13,739

Rentals receivable from banks 5.1.3 4,474 4,474 3,196

Energy Exchange 2,398 2,398 1,944

Security for building lease 1,370 1,370 2,670

Income from short-term deposits with banks 1,145 1,145 6,327

Other: 4,947 4,947 2,885

116,025 111,923 140,263

Notes March 20,2017 Million Rials March 20, 2016 Million Rials

Bank Day deposits 4.1 19,689 134,547

Bank Pasargad deposit certificate - 100,000

Bank Parsian short term deposits - 55,574

Total 19,689 290,121

3.2. The balance of foreign currency fund has been included 3,444 Dollars, 3,240 Euro, 4,441 Pound, 2,665 Yuan and 1,968 Dollars as Visa card which have been converted at the free rate at the balance sheet date.

5.1 Short-term receivables

5.1.2 .This amount has been received from Central Depository and Settlement Corporation on 2016/3/26.

5.1.3. The balance refers to rentals from banks Melli, Saman, Saderat and Tejarat. The amount of 1,142 million Rial of the balance has been received up to financial statement approval date.



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5.2. Long-term receivables

March 20, 2017March

20,2016 million Rial

2017/3/20million Rial

Provision for doubt-ful debts

million Rial

Netmillion Rial

Loans to Employees (long term loan portion)30,634 - 30,634 25,692

30,634 - 30,634 25,692

Notes March 20,2017 Million Rials March 20, 2016 Million Dollars

Costs, goods and services 2,777 1,428

Tax 8,098 4,683

Insurance 4,315 3,169

Tax payable 12 8,098 4,693

7,092 4,597

6. Prepayments

The balance of prepayments is including:

7.1. Investment in OTC of Iran is subject to Equity method as the following:

7-Long –Term investments

Equity method Investor

Notes No. of Shares Investment%March 2017 Cost-equity Million Rials

March 2016 Cost-equity Million Rials

March 2017 Cost

Million Rials

March 2016 Cost

Million Rials

Associated companies:

Over the counter (Fara-bourse Corporation) 7.1 140,000,000 20 184,798 159,837 20,000 20,000

Iran financial center (Pvt.) 7.2 4,000,000 20 4,878 4,433 2,000 2,000

Central Asset Manage-ment Pvt. 7.3 200,000 20 19,454 13,009 208 208

Other long term investments:

Central depository and settlement corporation 25,000,000 5 10,000 10,000 10,000 10,000

Energy Exchange Corpo-ration 2,610,000 0.5 2,610 2,610 2,610 2,610

Iran mercantile Exchange corporation 58,500 0.01 21 21 21 21

2017 2016

NotesShare of net

assetMillion IRR

Goodwill Share of total

net assets Million IRR

Share of net asset

Million IRR

Goodwill Million IRR

Share of total net assetsMillion IRR

Balance at the beginning of the year 159,837 - 159,837 125,821 - 125,821

Share of the financial year profit and other

adjustments7.1.1 52,961 - 52,961 50,016 - 50,016

Dividend receivable 7.1.2 (28,000) - (28,000) (16,000) - (16,000)

184,798 184,798 159,837 159,837



TSEANNUAL REPORT

88 89

7.1.1 Income from investment of TSE in OTC, amounted 52,961 million IRR, for the fiscal year ended 2017/3/20 has been calculated and included in the financial statements based on equity method.

7.1.2 Dividend of OTC has been 200 IRR per share for financial year ended 2016/3/20 and 200

7.1.4 All shares of OTC Co. is submitted to TSE as a security according to Article 42 of the Constitution and approval of Securities and Exchange Organization.

IRR per share for financial year ended 2017/3/20 according to decision of the General Association of Shareholders on 2017/5/22.

7.1.3 Significant parts of OTC’s balance sheet and income statements based on equity method for the financial year ended 2017/3/20 are as following:

Balance sheet

2017/3/20 Million IRR


Current assets 747,990 Current

liabilities 130,631

Non-cur-rent assets 454,930 Non-current

liabilities 8,297

Capital 700,000

Reserves 137,202

Retained profit 226,790

Total assets 1,202,920Total

liabilities and equities

1,202,920

Balance sheet




liabilities 5,159


liabilities 700

Capital 20,000

Reserves 948


Total assets 30,499 Total liabilities and equities 30,499

Income statements


Services revenue 313,939

Expenses (193,099)

Other operational and non-operational income and expenses 142,121

Net income 262,961

Income statements



Expenses (24,889)

Other operational and non-operational income and expenses 4,718

Net income 2,473

7.2. Investment in Iran Financial Center is subject to Equity method as the following:

7.2.1. Income from investment of TSE in Iran Financial Center, amounted 495 million IRR, for the fiscal year ended 2017/3/20 has been calculated and included in the financial statements based on equity method.

7.2.2. Dividend of Iran Financial Center is 12.5 IRR per share for financial year ended 2017/3/20

7.3. Investment in Central Asset Management Company is subject to the equity method as following:

2017 2016

NotesShare of net

assetMillion IRR


Share of total net assets Million IRR

Share of net asset

Million IRR




Share of the financial year profit 7.2.1 495 - 495 3,296 - 3,296

Dividend receivable 7.2.2 (50) - (50) (600) - (600)

4,878 4,878 4,433 4,433

2017 2016

NotesShare of net

assetMillion IRR


Share of total net assets Million IRR

Share of net asset

Million IRR




Share of the financial year profit and other adjust-

ments7.3.1 7,174 - 7,174 7,667 - 7,667

Dividend receivable 7.3.2 (729) - (729) (152) - (152)

19,454 19,454 13,009 13,009

according to decision of the General Association of Shareholders on 2017/4/22.

7.2.3. Significant parts of Iran Financial Center balance sheet and income statements based on equity method for the financial year ended 2017/3/20 are as following:



TSEANNUAL REPORT

90 91

7.3.1. Income from investment in Central Asset Management Company, as amounted 7,174 million IRR for the fiscal year ended 2017/3/20 based on the consolidated financial statements of the company, has been calculated based on equity method and included in the financial statements.

7.3.2. Dividend of Central Asset Management Company has been 759 IRR per share for financial

The intangible assets are including:

Consolidated Balance sheet




liabilities 34,724


liabilities 32,822

Capital 1,000

Reserves 447


Minority interest 825

Total assets 168,462 168,462

Consolidated Income statements



Net other income and expenses 29,851

Expenses (26,104)

Minority interest (268)

Net income 34,345

Notes March 20, 2017 Million Rial March 20,2016 Million Rial

Water, sewage and electricity Mem-bership fee 28,701 1,738

Prepayment for trading system soft-ware 5,015 -

Regional floor Branches 763 710

Software 8-1 410 507

22 Mobile lines and 33 telephone line 203 195

35,092 3,150

8-Intangible Assets

8.1. Software in the company includes:

Cost Million Rials

Retained Amortization Million Rials

Book value Million Rials

Balance on 2016/3/20 Purchases Balance on

2017/3/20Balance on2016/3/20

During the year

Balance on2017/3/20

Balance on2017/3/20

Balance on2016/3/20

Future Contract Software 700 - 700 700 - 700 0 0

Firm valuing software 177 - 177 177 - 177 0 0

Didgah software 319 72 391 133 118 251 140 186

Free floats follow-up system 133 - 133 66 44 110 22 67

Shareholders information software 151 62 213 58 64 122 91 93

Other Software 437 92 529 276 97 373 157 161

1,917 226 2,143 1,410 323 1,733 410 507


year ended 2016/1/20 and 3,645 IRR per share for financial year ended 2017/1/20 according to decision of the General Association of Shareholders on 2017/4/15.

7.3.3. Significant parts of Central Asset Management Company’s consolidated balance sheet and consolidated financial statements for the financial year ended 2017/1/20 are as following:


TSEANNUAL REPORT

92 93

9.1. All tangible fixed assets amounted 63,192 million Rials are insured against fire, flood and earthquake,

9.2. Equipment, fixtures and computer additions

9.4. The capital prepayments are amounted 156,038 million Rial in 2017 as compared to 139,693 Million Rial in 2016.

9.5. Capital inventory refers to ironware for construction of the new building.

are mainly related to purchasing computers and hardware, and network equipment.

9.3. Details related to sold and disposal assets are as following:

Description Million IRR

Cost Million IRR

Retained depreciation

Million IRR

Book value Million IRR

Sale price Million IRR

Fixed asset sale income Million IRR

Furniture, fixtures and computer 104 (96) 8 45 37

9.6. The balance of assets in progress heading refers to the new building which almost 73% is completed up to balance sheet date. It is expected to be completed 100% at the end of the year 2017/9/21.

9.6.1. The project is insured up to 1,100 Billion Rial.

March 20, 2017 Million Rial March 20, 2016 Million Rials

Building project costs 2,472,541 1,829,375

Costs incurred 1,798,668 1,233,635

Progress percent (Rial) 73 67

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nce

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17/3

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/9/2

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Land

334,

347

216

--

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4,56

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4,56

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2,81

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814

2,40

241

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2,81

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18,9

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,997

7,99

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8,62

610

,371

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9,75

112

,697

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2,61

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--

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611

1,73

344

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2,17

643

587

8

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63,

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436

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413

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139,

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578,

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1,29

2,78

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Other assets are including:

10. Other assets

March 20, 2017 Million Rial March 20, 2016 Million Rial

A prudential reserve security with SEO 4,138 2,823

Nikoukari fund 500 500

Other 204 190

4,842 3,513



TSEANNUAL REPORT

94 95

12. Provision for Tax

13. Dividends

12.1. Income tax of the Company for the years 2006 to 2014 has been finalized and settled.

Summary of the provision for taxes is as the followings:

Fiscal Year

March 20, 2017 -(Million Rials) March 20,2016 Million

Rials Basis for recognition

Tax

declared profit (Loss)

Income taxable declared assessed finalized paid provision

balanceprovision balance

2015 327,383 247,382 61,846 68,800 63,466 63,466 - -Tax dispute settlement authorities

2016 296,578 246,588 61,647 64,313 - 61,647 1,777 61,647 Taxes and books auditing

2017 368,723 286,115 57,223 - - - 57,223 - Not audited

59,000 61,647

Offseting with tax prepay-ment-note 6

(8,098) (4,683)

Total 50,902 56,964

12.2. Tax and value added duties have been finalized and settled up to 2010/3/20.


Dividend in 1394 11,267 -

Dividend in 1393 3,482 6,594

Dividend in 1392 809 884

Years before 1392 1,522 1,167

17,080 8,645

11. Non-trade Accounts Payable


Brokers 11-1 124,719 132,636

Lease contract deposit 11-2 62,988 -

Insurance deposit 11-3 44,781 29,401

Performance bond deposit 11-4 28,993 16,394

Employee's saving fund 11-5 19,690 14,995

Provision for incurred and unpaid expenses 11-6 19,329 1,283

Security and Exchange Organization 11-7 11,444 3,818

Provision for employees' unapplied allowed leave 6,914 7,991

Taxes payable 11-8 5,127 3,731

Provision for tax and value added duties 3,590 43,135

Insurance Premium 11-9 2,557 2,025

Information company 1,822 842

Market development fund - 3,462

Other 1,485 1,197

333,439 260,910

11.1. This amount is mainly related to additional amounts received from some brokerages, which has been finalized on 2017/3/20 and paid and settled next year

11.2. This amount is related to lease contracts with Banks Melli, Tejarat, Saman and Pasargad for some business parts of Saadatabad building.

11.3. This amount is mainly related to Insurance deposit for the new building construction agreements.

11.4. This amount is mainly related to Performance bonus deposit for the new building construction agreements.

11.5. This amount is related to employee’s

investment deposit including 3% wages and salaries and 3% share of the company together with its profits.

11.6. The amount is related to provision for lease of Kish, Isfahan, Kermanshah and Hamedan.

11.7. The amount is mainly related to lease contract of Hafez building floor.

11.8 This amount includes 1,845 million IRR as the tax of wages and salary of the employee at the end of the year and 3,282 million IRR as withholding tax which has been paid to Tax Affairs Organization.

11.9. This amount is related to insurance Premium of employees’ salaries and wages in the last month of the year.



TSEANNUAL REPORT

96 97

According to articles 140 and 238 of the amendment to Commercial Code and article 64 of the Constitution, the amount of 15,578 million Rials from allocable income has been transferred to legal reserve. According to the articles, 1/20 of

16. Legal reserves

17. Prudential Reserves

18. Services Revenue

Prudential Reserves

2017/3/20 Million Rials 2016/3/20 Million Rials

Balance at the beginning of the year 62,138 65,822

Raising during the year 62,300 59,316

Transfer to the capital (58,000) (63,000)

Balance at the end of the year 66,438 62,138

18.1. According to the approval of the Securities & Exchange Organization, income from trading commission and future contracts commission has

net income should be transferred to the reserve as far as it reaches 10% of the capital of the company. The legal reserve may not be transferred to the capital and may be paid to shareholders only on the company liquidation.


Income from trading commission 18-1 400,524 354,527

Income from broker services 18-2 183,937 177,746

Income from listing fees 18-3 37,030 19,892

Rentals 18-4 22,972 21,268

Total 644,463 573,433

been calculated based on 0.8/1000 value of per transaction up to 400 million IRR.

13.1. Dividend approved in 2016 as amounted 110,000 million IRR has been paid according to the schedule. The balance of this account is related to a number of natural and legal shareholders without

15.1. According to the article 11 of the Constitution, anybody in every time may own directly or indirectly (through related parties) maximum 2/5 percent of the company’s share.

Capital of the company on 2017/3/20 is 1,250,000 million Rials including 1,250 million non-bearer shares with price of 1000 Rial which is totally paid. At

the introduced bank account.. Up to financial statement approval, 4,132 million IRR of the above mentioned balance has been paid.

14. Provision for employees’ termination benefits

15. Capital


Balance at the beginning of the year 41,415 28,043

Current year provision 14,148 13,745

Paid out during the year (1,871) (373)

Balance at the end of the year 53,692 41,415

Turnover of this account is as follows:

Mar 20,2017 Mar 20, 2016

Shares % Shares %

Brokers 424,558,322 34 373,611,323 34

Financial institutions 490,949,988 39 432,035,990 39

Other 334,491,690 27 294,352,687 27

Total 1,250,000,000 100 1,100,000,000 100

15.2. On 2016/7/17, the company’s share has increased from 1,100 billion IRR to 1,250 billion IRR from retained profit and legal reserve. The increase has been registered with Office for Registration of Companies on 2016/9/18.

the balance sheet date, the company’s shareholders according to the article 9 of the Constitution are classified as:



TSEANNUAL REPORT

98 99

The costs of services are including:

19.1. Items of salary and wages are including:

19.1.1. Increases in the direct wages and salaries are as a result of approvals by the board and the ministry of labor and social affairs.

19. Cost of services:


wage and salary 19-1 184,380 155,675

Supply and maintenance of Regional floors 19-2 48,806 46,044

Floors security forces fees 14,242 14,597

Computers, communications and technology costs 4,183 3,468

Conference and exhibition costs 2,131 3,194

Council duty 579 440

Marketing and development of mar-kets and financial instruments 176 154

254,497 223,572


Salary and wages 19-1-1 87,694 74,737

New year bonus and rewards 47,636 39,433

Insurance premium by employer 20,672 16,426

Employee's termination benefits 10,813 9,720

Over time pay 12,446 9,896

Mission allowance and traveling costs 1,142 1,933

Others 3,977 3,530

184,380 155,675

19.2. The cost of supply and maintenance of regional floors are including:


Normal transactions 367,096 273,353

Whole trading 23,600 74,867

Future contracts and participation bonds 9,828 6,307

Total 400,524 354,527

18.2. Income from broker services

18.3. Income from listing fees

18.2.1. According to the Board of directors’ approval, trading system fees have been increased 25 million IRR for every trading floor and brokerage

18.3.1. According to the approval of the Securities and Exchange Organization, Listing fees are as equivalent to 0.002 of capital and maximum 50 million Rials for every year. Listing fees in the first half of the year refers to 319 firms listed in TSE.

18.3.2. According to the approval of the Securities and Exchange Organization, admitting fees are annually as equivalent to 0.002 of capital


Trading system fees 18-2-1 157,802 151,900

Exchange floor trading station fees 15,694 15,642

Brokerage fees 10,442 10,204

Total 183,937 177,746


Listing fees 18-3-1 15,978 15,712

Admission fees 18-3-2 21,052 4,180

37,030 19,892

fees have been increased 10% up to 1,200 million IRR maximum, provided that, fixed and changing trading system fees do not exceed 200 million IRR.

and maximum 500 million Rial for the companies that their capital are equivalent to or less than 250 billion Rials and 1000 billion Rials for the companies that their capital are more than 250 billion IRR. The fees are received only at the admission time.

18.4. Income from regional floors’ rental is related to the agreements entered into by brokerages for using offices.



TSEANNUAL REPORT

100 101


Salaries, wages 38,416 36,713

bonus and rewards 23,596 21,411

Over time payments 9,483 7,561

Insurance premium by employer 9,031 7,643

Employees' termination benefits 4,738 4,026

Mission allowances and traveling costs 930 650

Others 1,965 1,694

Total 88,159 79,698

20.1. Compensation costs are including:

21. Net other non-operating income and expenses

Equity method The Company

March 20, 2017 Million IRR




Bank deposit interest 45,358 57,051 45,358 57,051

Contribution bonds - 34,858 - 34,858

Income from rentals 17,387 15,051 17,387 15,051

Income from Ganjine Almas Investment Fund 2,403 - 2,403 -

Central depository and settlement corporation's dividend 1,300 3,000 1,300 3,000

Energy Exchange dividend 261 261 261 261

Net profit (loss) of the foreign currency exchange 25 48 25 48

Iran mercantile Exchange dividend 3 15 3 15

Over the Counter Exchange (Farabourse) dividend - - 28,000 16,000

Central Asset Management dividend - - 729 152

Income from Financial Center of Iran Co. - - 50 600

Income from tangible fixed assets sale 37 1 37 1

Others 5,900 (983) 5,900 (983)

Total 72,674 109,302 101,453 126,054


Rentals for regional floors buildings 28,065 26,446

Depreciation costs 7,477 6,790

Water, Electricity, Telephone and Gas 4,166 3,711

Repair and maintenance of floors 3,324 3,527

Entertainment 1,136 1,000

Duty 930 906

Services fee 862 1,352

Consumer goods 712 528

Transfers 573 450

Other 1,561 1,334

48,806 46,044

20. General and Administrative Expenses


Salaries and wages 20-1 88,159 79,698

Rent of building 12,987 11,563

Water, Electricity, Phone and Gas 3,824 3,945

The Board bonus 2,100 2,100

Council duty 2,064 1,465

Depreciation Cost 2,055 1,476

Administrative and consumable supplies 1,783 1,649

Entertainment 1,751 1,768

Withholding and legal tax 1,586 4,050

Meetings 1,347 1,059

Membership fee of professional asso-ciations 1,244 2,156

Transfers 710 605

The board attending compensation 558 654

Repair and maintenance 465 351

Publication cost 444 901

Administrative and Computer supplies 245 485

Legal expenses 56 2,623

Others 1,318 1,142

Total 122,696 117,690



TSEANNUAL REPORT

102 103

23. Reconciliation of Operating Profit

24. Contingent Liabilities and Capital Obligations

25. Post balance sheet date events






Operating profits 267,270 232,171 267,270 232,171

Increase in employees' termination benefits 12,277 13,372 12,277 13,372

Depreciation expenses 9,532 8,266 9,532 8,266

Decrease (increase) in operating accounts receivable 30,216 (79,176) 30,216 (79,176)

Increase (decrease) in prepayments and other assets (7,239) (1,580) (7,239) (1,580)

Increase (decrease) in operating accounts payable 72529 180,411 72,529 180,411

Other non-operating income and expenses 23312 13,926 23,312 13,926

407,897 367,390 407,897 367,390

Reconciliation of operating profit to net cash inflow from operating activities is as the followings:

Capital obligations of the company are mainly related to construction costs of the new building of the company as amounted 264,514 million Rials.

No significant post balance sheet event has occurred requiring adjustments or disclosures in the financial statements.

Total amounts of agreements are 1,515,173 million Rials from which the amount of 1,250,659 million Rials has been paid.

22. Earnings per share


march 20, 2017 million Rials

(restated) march 20,2016

million Rials

march 20, 2017 million Rials

(restated) march 20,2016

million Rials

Income from ongoing operation-op-erating 267,270 232,1171 267,270 232,171

Tax effects (51,386) (58,118) (51,386) (58,118)

net operating income 215,884 174,053 215,884 174,053

Number of normal sharesused in calculation of basic earnings per

share-million shares1,250 1,250 1,250 1,250

Basic earnings per share- operating 173 139 173 139

income from ongoing operation- non-operating 133,304 170,281 101,453 126,054

Tax effects (5,837) (3,529) (5,837) (3,529)

net non-operating income 127,467 166,752 95,616 122,525

Number of normal sharesused in calculation of basic earnings per

share-million shares1,250 1,250 1,250 1,250

Basic earnings per share-non-oper-ating 102 133 76 98

Basic earnings per share 275 272 249 237

Basic and reduced earnings per share are restated considering dividend of all financial period and according to the Accounting Standard 30.



TSEANNUAL REPORT

104 105

27. Retained earnings at the end of the year:

Amount Million IRR

Legal duties:

Division of minimum 10% of net profit according to the Article 190 of the Commercial Code as amended.

31.150

Board of Directors proposal:

Dividend proposed by Board of Directors (30 IRR per share) 37,500

26. Related parties transactions

Description Party Relationship type

Subject to the Article 129 of the

Commercial Code

Office rental Lease con-tract deposit

Other transactions Guarantees

Associates

OTC (Farabourse)

Common board of directors member

and Board of Directors Member

- - 7,000 -

Financial Center of Iran Co



- - 2,215 -

Central Asset Management of Capital Market



- - - -

Other

Bank Tejarat Brokerage

Board of Directors Member 989 - - -

Mofid brokerage

Board of Directors Member 902 - - -

Saba Tamin Brokerage

Common Board of Directors Member 958 - - -

Bank Mellat brokerage


Tadbirgaran farda brokerage


Pasargan Bank Brokerage


Tejarat Bank Common Board of Directors Member 1,182 13,983 - -

Iran Energy Exchange

Common Board of Directors Member - - 2,397 -

Securities and Exchange

OrganizationRegulator - - 21,833 2,823

Total 4,743 13,983 33,445 2,823



TSEANNUAL REPORT

106 107

TEHRAN

NOTE

Documents

IN THE NAME OF GOD - mondovisione.com · Regulation Self-regulated under SEO’s surveillance ... Saba Ta’min Investment company Mr. Jamshid Imani Member of the Board