anualreports-90

1

Independent Auditor & Legal Inspector’s Report to the Ordinary General

Shareholders’ Assembly of Ghadir Investment Co. (Public P.S.)

1. Group’s and Ghadir Investment Co. (Public P.S.) consolidated balance sheets

and Group’s Income and Cash Flow Statements for the financial year ended on

1388/9/30 (21/12/2009) along with Accompanying Explanatory Notes No. 1 to 44,

which were prepared and approved by the Company's board of director, were

audited by this audit firm. The responsibility of the integrity of the consolidated

financial statements lies with the board of directors. The duty of this firm is to

comment on the financial statements based on the audit and to comply with

duties set forth by Articles 148 and 242 as well as other legal requirements set

forth by the Commercial Law, contents of company’s Articles of Association.

2. Except with the limitations mentioned in Paragraph 3, 6 to 8 of the present report,

the audit was performed in accordance with the audit standards. These standards

require this firm to plan and execute the audit in a manner that a marginal

assurance against the absence of significant misrepresentation (distortion) in the

financial statements. Audit includes random examination of evidence supporting

figures and information mentioned in financial statements. Audit also includes

evaluation of accounting principles, practices, and main assessments by the

Company's board of directors and general examination of financial statements.

This firm believes that the audit provides a reasonable basis for comments.

3. The prepayment heading of the Group and the Company's, as described in Note

10-3 accompanying the financial statements comprises 110 billion Rials tax

prepayments. The mentioned amount includes 456 billion Rials tax withheld from

the Company's dividend and 346 billion Rials corporate tax provision of 1375

(1996-97) to 1381 (2002-03). During the financial year being reported, the

Company attempted to obtain the tax receipts concerning the payments of

dividend by the investee companies and has succeeded to receive the tax receipt

for 255 billion Rials. Determination of possible adjustments arising from this issue

will be pending the receipt of the tax payment receipt of 201 billion Rials

remaining dividends and the terms for the return of the net tax prepayments for

the mentioned years.

4. Goodwill heading totaling 3,388 billion Rials, as described in (Note 13), and

minority interest totaling 3,212 billion Rials (Note 29) and also goodwill of

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affiliated companies (Note 14-1) were recorded based on the subsidiaries and

affiliated companies' book value of assets and liabilities when acquired. In

accordance with accounting standards concerning goodwill and subsidiaries'

goodwill must be measured based on recognizable assets and liabilities' net fair

value on the date acquired. Due to the absence of evidence concerning the

determination of affiliated companies and subsidiaries' recognizable assets and

liabilities' net fair value when acquired, determination of the impact of any

required adjustment on the financial statements is not feasible. On the other

hand, 1,260 billion Rials of the acquired goodwill balance is for the purchase of

shares of Construction Development International Co., which is mainly resulting

from the difference of the fair value of Tehran High-rise and its book value.

Recording of the difference is incompliance with the accounting standards and

must be recorded on under the relevant heading and in proportion to the units of

the high-rise sold in to the profit & loss account. Considering that most of the

units were sold, the devaluation provision must be considered to the relevant

goodwill; however, presently the determination of the exact amount of

devaluation is not feasible.

5. Although 51% of Pardis Petrochemical (Private J.S.) belongs to the Company

and most of its board members are from the Group's subsidiaries, Pardis

Petrochemical financial statements were not consolidated in the Group's

consolidated financial statements. Determination of the financial impacts arising

from such practice is not presently feasible.

6. The financial statements of Sepahan Cement Co., Shargh Cement Co. and

Kordestan Cement Co. which were qualified for consolidation ends on the end of

Esfand (March 20) and their audited mid-period financial reports (first 2 quarters

ending Sept. 22) were used for consolidation. Determination of the financial

impacts arising from such practice is not presently feasible and shall be pending

the preparation of their audit report.

7. Market value of some the Company’s long-term investments in companies

enlisted with TSE (Note 14-2) is in total 316 billion Rials less than their final cost.

Market value of some of the Group's other long-term investment is 427 billion

Rials less than their cost. Justifying that the intrinsic value of the mentioned

investments are more than that listed on the TSE Price Board, the Company did

not consider any devaluation provision. Moreover, the Company's portion of

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shareholders' equity of Amir Kabir Petrochemical, which is presented under other

investments in the shares of other companies (Note 14-2-1), is 100 billion Rials

less than its final cost. The assurance for disregarding such investment

devaluation provision is subject to evidence supporting the intrinsic value of the

mentioned investments.

8. Financial statements of Al Masader Jabal Ali Co. which is consolidated in the

Group financial statements and has 151 billion Rials in assets and 365 billion

Rials in revenue as well as the mid-period financial statements of some affiliated

companies (Note 14-1-5) that are the basis for net worth were not audited.

Hence, determination of whether adjustments are required is not feasible for us.

9. Except for the impact cases mentioned in Paragraphs 4, 5 and also except for the

possible adjustments that would be required in the absence of limitations

mentioned in the Paragraphs 3, 6, & 8 it is the opinion of this firm that the audited

financial statements indicate that Company’s financial status at the end of

financial year ended on 1388/9/30 (21/12/2009) as well as operation results and

cash flow for the same period with respect to significant aspects, according to

accounting standards, are presented appropriately.

10. Based on Cabinet Decree No. 33068/T192976 dated 1386/11/28 (17/2/2008) and

Amendment No. 41050T/136316 dated 1387/7/24 (15/10/2008) pertinent to the

exchange rate difference of L/C financing for period prior to 1374 (1995-96) and

considering Guideline No. 87/65564 dated 1387/10/1 (21/12/2008) issued by

Central Bank of Iran (CBI) and the Tax Affair Organization's Resolution No.

110994 dated 1387/10/30 (19/1/2009) regarding the execution of the mentioned

Decree tax exemption was granted on payment of foreign currency exchange

rate difference between the official and the floating (market) rate. In order to

benefit from the mentioned opportunity for the machinery imported prior to 1374

(1995-96), Kordestan Cement Co. (a Group's subsidiaries) adjusted its accounts

after receiving authorization from the official accountants. The relevant

adjustments resulted in 126 billion Rials of tax prepayment (set off by 135 billion

Rials prepayment tax and 9 billion Rials tax provision for 2008-09) and 4 billion

Rials return from fixed assets' account (set off by 63 billion Rials fixed assets and

59 billion Rials depreciation provision) and 122 billion Rials accumulated profit.

The approval of the mentioned adjustments was not approved by the executing

bank and CBI was not finalized; therefore, accounting for such adjustments will

be pending the approval of the CBI and the executing bank.

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11. The contents of Article 240 of the Amended Commercial Law pertaining to the

payment of dividend within 8 months from the date of Ordinary General Assembly

Meeting was not observed. Moreover, the shareholders' rights were not uniformly

upheld.

12. The regulations set forth by the Direct Taxation Act concerning deduction and

payment of taxes levied on salaries and benefits were not observed in some

cases.

13. Some information were delivery late or were not delivery to the Security

Exchange Organization (SEO), which presents a violation of SEO regulations.

14. Transactions mentioned in Note 42-2 as the parent company's total transactions

subject to Article 129 of Amended Commercial Law during the financial year

presented by the board were reviewed. It is our opinion that all said transactions

were conducted in accordance to the Law.

15. The Board of Director’s report on Group and the Company’s activities and

general status was prepared for presentation to the Annual General Assembly

was reviewed. Considering the reviews, this audit firm did not find any significant

event leading to any discrepancy between the information provided in the

aforementioned report and the relevant documentation presented by the board.

1389/1/18 (7/4/2010) Farivaran Audit Firm

Javad Bostanian Mohammad Saeed Asgharian

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Ghadir Investment Co. (Public Joint Stock) Consolidated Balance Sheet

As at December 21st, 2009

21/12/2009 (Revised) 21/12/2008

21/12/2009(Revised) 21/12/2008 Assets Note

Million Rls Million Rls Liabilities & Shareholders' Equity Note

Million Rls Million Rls Current Assets: Current Liabilities: Cash 5 523,682 325,494 Trade Accounts & Notes Payable 16 1,631,755 990,013 Short-term Investments 6 1,074,140 1,274,600 Other Accounts & Notes Payable 17 1,194,961 1,127,996 Trade Accounts & Notes Receivable

7 8,040,317 4,674,787 Advances Received 18 778,306 470,952

Other Accounts & Notes Receivable

8 598,359 478,511 Tax Provision 19 442,539 453,452

Inventory 9 2,450,664 2,782,013 Payable Dividend 20 2,540,800 1,853,890 Orders & Prepayments 10 1,264,174 497,915 Financial Facilities Received 21 4,116,379 3,403,963

Total Current Assets 13,951,336 10,042,320 Total Current Liabilities 10,704,740 8,300,266

Non-current Liabilities: Non-current Assets: Long-term Accounts & Notes Payable 22 158,397 186,269 Tangible Fixed Assets 11 5,032,785 4,387,206 Long-term Financial Facilities Received 21 4,673,012 3,050,484 Intangible Assets

12 77,514 69,971Provision for Employees’ Work Termination Benefits

23 168,898 214,940

Goodwill 13 3,387,778 3,879,908 Total Non-current Liabilities 5,000,307 3,451,693

Long-term Investments in Affiliated Companies

14 4,001,978 2,567,280 Total Liabilities 15,705,047 11,751,959

Other Long-term Investments 14 5,213,179 5,989,118 Other Assets 15 3,230,239 2,453,103 Shareholders’ Equity:

Total Non-current Assets 20,943,473 19,346,586

Capital (6,075 million of Rls1000 Shares Fully Paid)

24 6,075,000 6,075,000

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21/12/2009 (Revised) 21/12/2008


Million Rls Million Rls Liabilities & Shareholders' Equity Note

Million Rls Million Rls

Shares of the Parent Company in Ownership of Subsidiary Companies

24 (64,229) (86,126)

Legal Reserve 25 819,383 805,654 Capital Reserve 26 4,425,276 4,303,479 Other Reserves 27 301,994 318,953 Difference in Retained Foreign Exchange 28 40,401 38,965 Retained Profit 4,380,382 3,368,907

Total Shareholders’ Equity of Parent Company 29 15,978,207 14,824,832 Minority Interest 3,211,555 2,812,115

Total Shareholders’ Equity 19,189,762 17,636,947

Total Assets 34,894,809 29,388,906 Total Liabilities & Shareholders’ Equity 34,894,809 9,388,906

Accompanying notes are an integral part of these financial statements.

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Ghadir Investment Co. (Public Joint Stock) Consolidated Profit (Loss) Statement

For the Year Ended December 21st, 2009


(Revised) For the Year

Ended December 21st,

2008

Note

Million Rls Million Rls Million Rls Net Sales & Income from Services Rendered

30 8,003,745 7,034,139

Cost Price of Goods Sold & Services Rendered

31 (4,496,807) (4,254,332)

Gross Profit 3,506,938 2,779,807Income from Operating Investments

32 482,879 1,086,349

Sales, Administrative & General Expenses

33 (472,739) (429,914)

Net Other Operating Incomes & Expenses

34 (504,002) (496,452)

(976,741) (926,366)

Operating Profit 3,031,076 2,939,790

Financial Expenses 35 (862,791) (618,338)Net Other Non-operating Incomes & Expenses

36 123,832 398,495

(738,959) (219,843)

Profit before Calculating Group's Share from Profit of Affiliated Companies

2,274,117 2,719,947

Group's Share from Profit of Affiliated Companies

14 1,399,006 1,537,611

Profit before Tax 3,673,123 4,257,558Tax (229,946) (179,556)

Net Profit 3,443,177 4,078,002

Minority Interest from Net Profit

750,361 767,864

EPS (Earnings Per Share) – Rls

443 545

Statement of Consolidated Retained Profit (Loss)

Net Profit 3,443,177 4,078,002

Retained Earnings at the beginning of the Fiscal Year

4,301,500 1,874,065

Prior Years’ Adjustments 37 (128,578) 3,487

Retained Earnings at the beginning of the Year – Adjusted

4,172,922 1,877,552

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Ended December 21st,

2008

Note

Million Rls Million Rls Million Rls

Allocable Profit 7,616,099 5,955,554Profit Allocation:

Legal Reserve 25 (55,159) (104,674)Capital Reserve 26 (121,797) (328,253)Other Reserves 27 (70) -Ratified Dividend (2,133,120) (1,349,705)

(2,310,146) (1,782,632)

5,305,953 4,172,922Minority Interest from Retained Earnings

29 925,571 804,015

Retained Profit at the End of the Year

4,380,382 3,368,907


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Ghadir Investment Co. (Public Joint Stock) Consolidated Comprehensive Profit (Loss) Statement


For the Year Ended December 21st,

2009

(Revised) For the Year Ended

December 21st, 2008

Note

Million Rls Million Rls Net Profit 3,443,177 4,078,002Exchange Difference of Assets & Liabilities of Independent Foreign Unit

28 1,436 11,303

Comprehensive Profit of the Fiscal Year 3,444,613 4,089,305Prior Years’ Adjustments 37 (128,578) 3,487

Recognized Comprehensive Profit from the Prior Year Report

3,316,035 4,092,792

Minority Interest from Comprehensive Profit of the Fiscal Year

788,839 745,376


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Ghadir Investment Co. (Public Joint Stock) Consolidated Cash Flows Statement



2009


December 21st, 2008

Note

Million Rls Million Rls Operating Activities: Net Cash Inflow from Operating Activities

38 1,168,805 3,347,355

Return on Investments & Paid Interest for Financing:

Received Profit of Banking Deposits & Other Short-term & Long-term Investments

92,427 95,184

Profit Paid for Financial Facilities (688,254) (569,308)Dividend Paid to Minority Shareholders

(598,169) (348,464)

Dividend Paid to Shareholders of the Parent Company

(237,077) (84,965)

Net Cash Outflow from Return on Investments & Paid Profit for Financing

(1,431,073) (907,553)

Income Tax: Income Tax Paid (240,860) (125,556)

Investment Activities: Funds Paid for Purchasing Tangible Fixed Assets

(1,162,435) (1,507,305)

Funds Paid for Acquiring Long-term & Short-term Investments

(496,678) (1,677,587)

Funds Earned from Sales of Tangible Fixed Assets

11,130 209,364

Funds Paid for Acquiring Intangible Assets

(7,543) (42,170)

Funds Paid for Acquiring Other Assets - (38,497)

Net Cash Outflow from Investment Activities

(1,655,526) (3,056,195)

Net Cash Outflow before Financing Activities

(2,158,654) (741,949)

Financing Activities: Decrease (Increase) in Shares of the Parent Company in Ownership of the Subsidiary Companies

21,897 (64,786)

Financial Facilities Received 3,743,386 2,514,092Payment of the Original of the Financial Facilities

(1,408,441) (1,786,040)

Net Cash Inflow from Financing Activities

2,356,842 663,266

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2009


December 21st, 2008

Note


Net Increase (Decrease) in Cash 198,188 (78,683)Cash Balance at the beginning of the Year

325,494 404,177

Cash Balance at the End of the Year 523,682 325,494

Non-cash Transactions 39 610,963 178,612


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Ghadir Investment Co. (Public Joint Stock) Consolidated Balance Sheet

As at December 21st, 2009

21/12/2009(Revised) 21/12/2008


Million Rls Million RlsLiabilities & Shareholders' Equity Note

Million Rls Million Rls Current Assets: Current Liabilities: Cash 5 99,577 64,831 Trade Accounts & Notes Payable 16 - 7,757 Short-term Investments 6 130,028 191,682 Other Accounts & Notes Payable 17 23,007 158,243 Trade Accounts & Notes Receivable 7 6,522,088 4,518,535 Advances Received 18 83,087 - Other Accounts & Notes Receivable 8 231,903 240,626 Tax Provision 19 - - Prepayments 10 112,636 111,104 Payable Dividend 20 2,001,318 1,330,609 Financial Facilities Received 21 511,137 435,152

Total Current Assets 7,096,232 5,126,778 Total Current Liabilities 2,618,549 1,931,761

Non-current Assets: Non-current Liabilities:

Fixed Tangible Assets 11 4,391 6,129 Financial Facilities Received - Long-term 21 170,323 268,569

Intangible Assets 12 702 520 Provision for Employees’ Work Termination Benefits 23 3,405 2,602

Long-term Investments 14 10,389,342 10,018,382 Total Non-current Liabilities 173,728 271,171

Other Assets 15 2,628,313 2,555,082 Total Liabilities 2,792,277 2,202,932

Total Non-current Assets 13,022,748 12,580,113 Shareholders’ Equity:

Capital (6,075 million of Rls1000 Shares, Fully Paid) 24 6,075,000 6,075,000

Legal Reserve 25 607,500 67,500

Capital Reserve 26 4,425,276 4,303,479 Other Reserves 27 281,846 281,846 Retained Earnings 5,937,081 4,236,134

Total Shareholders’ Equity 17,326,703 15,503,959

Total Assets 20,118,980 17,706,891 Total Liabilities & Shareholders’ Equity 20,118,980 17,706,891


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Ghadir Investment Co. (Public Joint Stock) Profit (Loss) Statement




Ended December 21st, 2008

Note

Million Rls Million Rls Million Rls Income from Investments 32 3,528,543 3,354,957

Sales, Administrative & General Expenses

33 (69,121) (35,745)

Net Other Operating Incomes & Expenses

34 43,069 7,545

(26,052) (28,200)

Operating Profit 3,502,491 3,326,757

Financial Expenses 35 (151,430) (143,151)Net Other Non-operating Incomes & Expenses

36 (9,567) (15,718)

(160,997) (158,869)

Profit before Tax 3,341,494 3,167,888Tax - -

Net Profit 3,341,494 3,167,888

Earnings Per Share (EPS) – Rls 550 521

Flow of Retained Profit (Loss) Account

Net Profit 3,341,494 3,167,888

Retained Earnings at the beginning of the Fiscal Year

4,307,038 2,188,048

Prior Years’ Adjustments 37 (70,904) 78,538

Retained Earnings at the beginning of the Year – Adjusted

4,236,134 2,266,586

Allocable Profit 7,577,628 5,434,474Profit Allocation:

Legal Reserve 25 - (19,587)Capital Reserve 26 (121,797) (328,253)Ratified Dividend (1,518,750) (850,500)

(1,640,547) (1,198,340)

Retained Profit at the End of the Year

5,937,081 4,236,134

Since the Comprehensive Income Statement is limited to the profit and prior years’ adjustments of the period, the Comprehensive Income Statement is not presented. Accompanying notes are an integral part of these financial statements.

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Ghadir Investment Co. (Public Joint Stock) Cash Flows Statement



(Revised) For the Year Ended December 21st, 2008

Note

Million Rls Million Rls Operating Activities: Net Cash Inflow from Operating Activities

38 441,313 371,196

Return on Investments & Paid Interest for Financing:

Profit Paid for Financial Facilities

(104,881) (141,302)

Dividend Paid to Shareholders of the Company

(237,077) (84,965)

Net Cash Outflow from Return on Investments & Profit Paid for Financing

(341,958) (226,267)

Investment Activities: Funds Paid for Purchasing Tangible Fixed Assets

(87) (1,479)

Funds Paid for Acquiring Intangible Assets

(112) (50)

Net Cash Outflow from Investment Activities

(119) (1,529)

Net Cash Inflow before Financing Activities

99,156 143,400

Financing Activities: Financial Facilities Received 56,616 234,146Repayment of the Original Financial Facilities Received

(121,026) (365,062)

Net Cash Outflow from Financing Activities

(64,410) (130,916)

Net Increase in Cash 34,746 12,484

Cash Balance at the beginning of the Year

64,831 52,347

Cash Balance at the End of the Year

99,577 64,831

Non-cash Transactions 39 610,963 -


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Ghadir Investment Co. (Public Joint Stock) Notes to the Financial Statements


1. History of Activities 1.1. Generalities The Group consists of Ghadir Investment Company – Public Joint Stock (Parent Company) and its subsidiary companies. Ghadir Investment Company – Public Joint Stock was established on 16 October 1991 and was registered with Companies and Industrial Ownership Registration Department in Tehran under No.86180 with the initial name of Bank Saderat Investment Co. (Private Joint Stock). The Company changed into public joint stock on 19 December 1995 and accepted in Tehran Stock Exchange on 17 March 1996. According to ratification of the Extra Ordinary General Assembly dated October 11th, 1999, the end of the financial year of the Company changed from September 22nd to December 21st of every year. The headquarters of the Company located in Tehran. 1.2. Main Activities According to Article 2 of the Articles of Association, the main activities of the Company include the following items: A) Establish, participation (legal) in capital, purchase of shares, reconstruction, renovation and launch of all types of companies and institutes within or outside of the Country, sales of shares, assignment of companies’ shares or liquidation of them B) Preparation of investee companies in order to enter stock market C) Using financial facilities and credits of banks and credit institutes D) Subscribing shares and doing transactions related to domestic or foreign shares and securities E) Providing required services for companies in the following cases: Services and consulting in the fields of production, new investments, development, completion, planning & budgeting, providing financial & credit resources, issuance, approve and accept of any guarantee or commitment, marketing & designing management systems for easing & increasing their efficiency through consultation or establishing company or institution F) Issuance of participation bonds

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G) Execution of all legal operations which are useful for realization of the Company’s objectives directly or indirectly or it is necessary for implementation of the subject of the Company 1.3. Employment Status The average number of permanent and interim employees during the reported year is as follows:

Group Parent Company 21/12/2009 21/12/2008 21/12/2009 21/12/2008

Person Person Person Person Permanent Employees

2,368 2,901 23 18

Interim & Contracting Employees

1,990 2,224 22 29

4,358 5,125 45 47

Decrease in number of personnel of the Group companies, is mainly related to assignment of shares of Abgineh Co. and its exclusion from consolidation.

2. Basis for Preparing Financial Statements The Group and the Parent Company's consolidated financial statements have been fundamentally prepared based on historical cost price and where necessary, current values are used.

3. Basis for Consolidation 3.1. Consolidated financial statements are the result of adding the figures of the financial statements of Ghadir Investment Company (Public Joint Stock) and the subsidiary companies which are liable to consolidation after elimination of the inter-group transactions and balances and non-materialized profit and loss resulted from their transactions in-between. 3.2. Regarding the subsidiary companies acquired within the period, the results of their operations are included in the consolidated profit and loss statement from the date their control has been effectively transferred to the Parent Company. In case of the assigned subsidiary companies, the results of operations till the date of assignment are included in the consolidated profit and loss statement. 3.3. The shares of the Parent Company acquired by the subsidiary companies are entered into accounts as cost price and in consolidated balance sheet

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under account heading of “Shares of Parent Company in Ownership of Subsidiary Companies” as a reduction of the shareholders' equity. 3.4. The financial year of most of subsidiary companies ends at September 22nd. The financial statements of the mentioned companies apply in consolidation the same way. In case of any event in a way that it considerably affects the consolidated financial statements until the date of preparation of financial statements of the Parent Company, its effects take into consideration through applying required adjustments in items of mentioned subsidiary companies’ financial statements. In addition, regarding those affiliated and subsidiary companies that their fiscal year ends at March 20th of every year, their middle period financial statements used in the consolidation until September 22nd. It is note-worthy that their performance for one year period ended September 22nd use in consolidation.

4. Summary of Most Important Accounting Procedures 4.1. Investments

Consolidated of Group Parent Company

Evaluation Method:

Long-term Investment:

Investment in Subsidiary Companies which are Liable to Consolidation

Liable to Consolidation

Cost Price (Minus the Reserve for Perpetual Reduction in Investment Value)

Investment in Affiliated Companies

Special Value


Other Long-term Investments



Current Investments:

Investments Rapidly Transacted in the Market

Least Cost Price and Net Sales Value of Total Investments

Least Cost Price and Net Sales Value of Total Investments

Other Current Investments Least Cost Price and Net Sales Value of Each Investments

Least Cost Price and Net Sales Value of Each Investments

Income Recognition Method:

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Consolidated of Group Parent Company

Investment in Liable to Consolidation Subsidiary Companies

Liable to Consolidation

In Time of Profit Approval by the General Meeting of Shareholders of the Investee Company (till the approval date of financial statements)

Investment in Subsidiary Companies Excluded from Consolidation



Investment in Affiliated Companies

Net Value Method


Other Long-term and Current Investments

In Time of Profit Approval by the General Meeting of Shareholders of the Investee Company (till the date of Balance Sheet)

In Time of Profit Approval by the General Meeting of Shareholders of the Investee Company (till the date of Balance Sheet)

4.2. Inventory Inventory of goods and materials are evaluated at minimum finished cost and net sales value of individual items and similar group of items. In case of excess finished cost compared to net sales value, the difference is recorded as inventory devaluation provision. Finished costs of inventories are calculated by application of following methods:

Method

Raw Materials & Packaging Weighted Average

Work in Progress Annual Weighted Average

Finished Goods Annual Weighted Average

Spare Parts Weighted Average

4.3. Tangible Fixed Assets 4.3.1. Tangible fixed assets are entered into accounts based on the cost prices. Upgrading costs and costs of fundamental repairs which cause considerable increase in the capacity or remaining life span of the fixed assets or improve the quality of their output considerably are considered capital costs and are amortized in the remaining life span of the relevant assets. The

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maintenance and trivial repairs costs whose purpose is maintaining or revival of expected economic interests of the commercial unit (in proportion to evaluated standard function) are considered current costs and are entered into profit and loss account of the period. 4.3.2. Depreciation of the fixed tangible assets considering estimated life span of the relevant assets calculated in following methods and with following rates in compliance with Depreciation Bylaw of Article 151 of Direct Taxation Act passed on March 1988 and its later amendments:

Asset Depreciation Rate Method of Depreciation

Building 7%,8% & 10% Declining

Installments 12%, 13% & 15 years Declining & Straight Line

Machineries 10%, 10 & 15 Years Declining & Straight Line

Furniture 10 Years Straight Line

Tools 4 Years Straight Line

Motor Vehicles 25%, 30% & 35% Declining

In respect of the fixed assets acquired and used during the month the depreciation is calculated from the beginning of the following month and entered into accounts. When a depreciable asset, while being ready for being used, is not used because of work stop or any other reasons, its depreciation for that period is 30% of the depreciation rates given in the above table. 4.4. Financing Costs Except the costs that are directly ascribable to acquired "qualified assets", the financing costs are considered as cost of the year. 4.5. Foreign Exchange 4.5.1. Foreign currency monetary items at the date of balance sheet and non-monetary items which have been entered at historical cost prices in terms of the type of the foreign currency are changed at the exchange rate at the date of the transaction. The differences resulted from settlement or exchanging the foreign currency are identified as revenue or cost of the period. 4.5.2. All assets and liabilities of the independent foreign units are changed at the exchange rate at the date of balance sheet and the revenues and costs are changed at the rate which is average of the rates during the period. All differences resulted from changing are classified in the headings of the shareholders' equity and reflected in comprehensive profit and loss statement. If the independent foreign unit is sold the differences resulted from changing are transferred to accumulated profit and loss account directly.

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4.6. Provision for Employees' Work Termination Benefit Provision for employees' work termination benefit is calculated based on the last month's fixed salary and continuous benefits of one year multiplied by the years of service and are entered into accounts. 4.7. Goodwill The accounting of the combination of trade units are done based on purchasing method. Excess of cost price of acquiring investment in liable-to-consolidation subsidiary companies and the affiliated companies which are liable to net value method in comparison to the share of the group from net book value of their recognizable liabilities and assets at the time of acquisition is recognized as goodwill and amortized within 10 years in direct line method. The goodwill resulted from acquiring affiliated companies are reflected in the consolidated balance sheet as part of long-term investment book value in affiliated companies. 4.8. Capital Reserve Profit from selling shares available in company’s portfolio reflects in capital reserve account. Capital reserve may not be distributed among shareholders and can be used for capital increase. Only in exceptional cases, for continuation of profitability process, the company may distribute up to 20% of the amount that have been transferred to capital reserve in the same year to shareholders upon recommendation of the Board of Directors and approval of the Ordinary General Assembly.

5. Cash

Group Parent Company

21/12/2009 21/12/2008 21/12/2009 21/12/2008 Note

Million Rls Million Rls Million Rls Million Rls

Cash in Hand 5,758 3,077 233 202

Bank Balance 5-1 496,065 277,009 99,064 64,629

Petty Cashes 2,774 2,652 28 -

Notes under Collection

435 101 - -

Short-term Banking Deposits

18,650 42,364 - -

Securities 0 291 - -

523,682 325,494 99,577 64,831

21

5.1. The balance of bank account includes Rls29,966 million that is equivalent to the foreign currencies of the Group companies (mainly Almasader Jabal Ali, Motojen & Shargh Cement companies).

6. Short-term Investments


21/12/2009 21/12/2008 21/12/2009 21/12/2008

Note


Investments Rapidly Transacted in the Market:

Shares of Rapidly Transacted Companies in the Market

6-1 631,090 663,275 88,646 112,351

Participation Bonds

6-2 90,804 117,140 - -

721,894 780,415 88,646 112,351

Investment in Shares of Other Companies

6-3 68,360 92,270 15,008 65,456

790,254 872,685 103,654 177,807

Bonds of Investment Fund

22,899 - 12,499 -

Investment Deposits held with Banks

242,282 338,552 - -

Plans, Projects & Properties

4,830 49,488 - -

Expensive Metals (Platinum)

13,875 13,875 13,875 13,875

1,074,140 1,274,600 130,028 191,682

22

6.1. Group investments in shares of rapidly transacted companies in the market describes as follows:

21/12/2009 21/12/2008

Cost Price Market Value

Cost Price Investee Company No.


Accepted in TSE

Oroumieh Cement 12,129,091 79,624 53,465 76,634

Behbahan Cement 2,816,773 64,697 33,017 61,469

Fan Avaran Petrochemical

3,544,737 24,938 16,559 57,254

Pars Vegetable Oil 19,253,243 48,929 28,013 49,701

Doroud Cement 3,067,453 39,645 22,627 37,289

Saipa 9,948,571 17,839 12,963 26,883

Bank Pasargad 64,877,692 64,877 97,608 62,412

Iran Refractory Products

2,849,923 11,295 5,492 22,678

Ardebil Cement 713,852 22,152 14,300 22,152

Khazar Cement 25,073,416 85,631 59,241 21,544

Boroujerd Textile 14,685,612 19,303 10,574 19,303

Hegmatan Cement 12,757,708 12,768 30,044 19,220

Esfahan Mobarakeh Steel

3,774,191 11,304 6,433 17,014

Kalsimin 268,068 2,686 1,969 16,779

Esfahan Oil Refinery

2,710,000 18,165 15,255 108

Esfahan Petrochemical

1,989,210 10,302 4,653 14,538

Mazandaran Textile 12,825,214 13,282 10,311 13,283

Khark Petrochemical

717,121 10,753 8,279 12,726

Chador Malou 250,000 2,677 2,120 12,682

Saipa Diesel 4,538,618 12,481 4,634 10,939

Informatics Services 477,825 6,650 6,087 8,343

Pension Investment 1,588,851 2,944 2,415 7,052

Omid Investment 2,037,09 6,663 6,087 7,986

Arak Petrochemical 484,000 3,842 1,103 5,054

Other 158,438 207,499 184,057

751,885 660,697 787,100

Provision for Value Decrease

(120,795) (123,825)

631,090 660,697 663,275

23

6.1.1. Investment of the Parent Company in shares of the listed companies includes the following items:

21/12/2009 21/12/2008

Cost Price Market Value Cost Price Investee Company No.


Pars Vegetable Oil 19,245,715 48,911 28,002 48,911

Mazandaran Textile 12,805,214 13,272 10,295 13,272

Boroujerd Textile 14,685,612 19,303 10,574 19,33

Iran Poplin 2,899,324 6,760 2,885 6,760

Saipa 9,948,571 17,839 12,963 10,042

Informatics Services 477,825 6,650 6,036 6,606

Saipa Diesel 455,132 2,565 467 2,565

Behpak Industrial 568,949 2,420 619 2,420

Khark Petrochemical 320,500 5,112 3,744 4,417

Arak Petrochemical 484,000 3,842 1,103 3,781

Iran Refractory Products

- - 11,383


- - 28,138

Other 26,011 21,003 18,792

152,685 97,691 176,390

Provision for Value Decrease

(64,039) - (64,039)

88,646 97,691 112,351

6.2. Investment in Group’s participation bonds based on investee companies is as follows:

21/12/2009 21/12/2008


Ghadir Industry & Capital Development Co. 45,750 31,450

Shargh Cement Co. 8,500 15,379

Kordestan Cement Co. 17,260 11,670

E’etezad Ghadir Co. 19,185 -

Ghadir Trade & Management Services Co. - 40,000

Construction International Group Companies - 15,245

Other 109 3,396

90,804 117,140

6.2.1. Purchased participation bonds related to guarantee of banks deposits and Governments civil projects (1 year to 5 years) and its profit rate is mainly 16% and 17% per year.

24

6.3. Investment in shares of other companies describes as follows:

21/12/2009 21/12/2008

Percent of Participation

No. of Shares Million Rls Million Rls

A) Parent Company:

Sistan va Balouchestan Development Investment

12 4,075,472 4,075 4,075

Zagros Investment 7 5,082,433 5,212 5,212

Semnan Carbonate Sodium

4 - 10,395

Sulfurin - 40,141

Other 5,721 5,633

15,008 65,456

B) E’etezad Ghadir Investment Co.:

Pars Aryan Investment

12,480,000 14,976 12,584

Omran Ardebil 4,000,000 4,000 4,000

Other 13,816 9,680

32,792 26,264

C) Ghadir Industry & Capital Development Co.:

Pars Aryan Investment

19,375,000 19,375 -

D) Other Group Companies

1,185 550

68,360 92,270

25

7. Trade Accounts & Notes Receivable


21/12/2009 21/12/2008 21/12/2009 21/12/2008 Note


Notes Receivable

7-1 2,123,314 1,713,002 310,290 225,646

Subsidiary Companies

7-2 - - 3,345,521 2,068,005

Affiliated Companies

7-2 2,760,912 1,539,819 2,638,983 1,488,667

Customers – Rials

2,717,894 532,356 - -

Customers – Foreign Exchange

275,512 116,532 - -

Balance of Share Sales Installments

56,632 804,295 56,632 15,632

Other Investee Companies

7-2 230,579 77,153 170,662 720,585

Other 721 4,798,789 - -

8,165,564 (124,002) 6,522,088 4,518,535

Provision for Doubtful Debts

(125,247) 4,674,787 - -

8,040,317 6,522,088 4,518,535

7.1. The balance of notes receivable of the Parent Company mainly relates to current portion of checks received from Mr. Mahboubian for selling shares of Azar Glass Industries Co., Mr. Delfani for selling shares of Sabz Investment Co., Sarouj International Co. for selling shares of Asiaye Aram Co., Behshahr Development Industries for selling shares of Saramad Ghadir Co. and Mr. Yousef Afshar for selling shares of Shahdab Co. In addition, the amount of Rls 175,511 million of received checks from Mr. Mahboubian, Mr. Delfani and Mr. Afshar under the title of long-term notes receivable have been reflected in other assets. 7.1.1. The balance of Group’s notes receivable mainly related to Rls1,085,712 million current portion of checks received of Construction Development International Co. from purchasers of Tehran Tower apartments, Yas Tower and other construction projects. In addition, Rls388,089 million long-term portion of checks received from purchasers have been reflected in other assets.

26

7.2. Debt balance of the Parent Company from subsidiary, affiliated and other investee companies is as follows:

Parent Company

21/12/2009 21/12/2008

Dividend Accounts in-

between Total Total


Subsidiary Companies:

164,663 - 164,663 70,472

Almasader Jabal Ali 398,000 - 398,000 237,000

Ghadir Trade & Industrial

944,300 - 944,300 446,500

Zarrin Persia 73,380 - 73,380 75,114

Motojen 154,800 - 154,800 48,000

Kalaye Sepehr Pars 26,879 - 26,879 37,621

Shargh Cement 614,820 103,973 718,793 308,700

Ghadir Capital & Industry Development

142,000 12,357 154,357 42,786

Ghadir Management Services

73,293 - 73,293 24,977

E’etezad Ghadir Investment

257,868 - 257,868 701,250

Construction Development International

103,099 - 103,099 70,281

Sepahan Cement - 274,300 274,300 -

Alvand Ghadir Development Investment

1,789 1,789 5,304

Other 2,954,891 390,630 3,345,521 2,068,005

Affiliated Companies: Behshahr Industries Development

35,631 - 35,631 46,718

Pardis Petrochemical (Ghadir Urea & Ammoniac)

1,512,800 - 1,512,800 1,164,000

Zagros Petrochemical 749,600 - 749,600

Bahman Group 107,732 - 107,732 81,055

Kavir Tire 64,864 - 64,864 40,455

Iran Alloy Steel 129,500 - 129,500 113,208

Other 38,856 - 38,856 43,231

2,638,983 - 2,638,983 1,488,667

Other Companies:

Maroun Petrochemical

119,000 - 119,000


11,988 - 11,988 5,349

27

Parent Company

21/12/2009 21/12/2008

Dividend Accounts in-

between Total Total


Boroujerd Textile 3,611 - 3,611 2,876

Zagros Petrochemical 0 680,000

Other 36,063 - 36,063 32,360

170,662 - 170,662 720,585

8. Other Accounts & Notes Receivable


21/12/2009 21/12/2008 21/12/2009 21/12/2008 Note


Notes Receivable 40,668 14,076 33,773 2,700

Personnel Debts 64,355 59,969 9,097 4,340

Group Companies

- - 111,944 143,551

Mr. Khayyam Bashi

8-1 122,598 - - -

National Petrochemical Industries Co.

8-2 5,280 44,880 5,280 44,880

Mazandaran Textile Co.

25,311 24,511 25,311 24,511

Deposits Receivable

22,970 43,824 - -

Dividend, Participation Bonds & Banking Deposits

132,441 98,908 - -

Other 219,430 235,268 46,636 20,782

633,053 521,436 232,041 240,764

Provision for Doubtful Debts

(34,694) (33,925) (138) (138)

598,359 487,511 231,903 240,626

8.1. Debt balance from Mr. Khayyam Bashi related to debt of Vasepari Sepehr Pars Company for the remaining amount of returning Esfahan Keshavarz Blvd. project to the seller. Until the date of preparation of this report, Rls10 billion of the mentioned amount have been settled. 8.2. Debt balance of the Parent Company from National Iranian Petrochemical Industries Company related to tax of share transfer of Zagros Petrochemical, Maroun and Arvand companies which have been paid by the Company.

28

9. Inventory

Group 21/12/2009 21/12/2008

Note


Finished Goods 112,307 195,670Work in Progress 73,443 78,082Raw Materials, Packaging & Construction Equipments

319,429 413,795

Spare Parts 350,577 279,902Projects under Construction 9-2 1,154,330 1,496,832Constructed Units 9-3 118,784 106,881Properties 9-4 273,968 51,686Other 49,568 175,627 2,452,406 2,798,475Provision for Value Decrease of Inventories

(1,742) (165,462)

2,450,664 2,782,013

9.1. Inventory of materials and goods at the date of balance sheet has been sufficiently covered by insurance against probable hazards. 9.2. The balance of projects under construction completely related to construction projects under completion of Construction Development International Co. (mainly Tehran Tower, Yas Tower, Sa’adi Project, Erfan Residential Project, Narenjestan 2 Projects and Marjan Kish). Tehran Tower which located in Kordestan Street has been purchased from A.S.P Company according to purchasing contract dated March 19th, 2003 and the construction management of the project abandoned to the same company as management contractor based on the contract dated December 20th, 2002. Physical progress of the project until 22nd September 2009 in residential units and shops is 100% and in triplex units is 99.5%. Tehran Tower project has 126,026 useful square meters (include 555 residential units, 23 shops and one restaurant). Until the end of September 2009, 539 units of the mentioned tower have been sold. 9.3. The existing units are completely related to Construction Development International Group companies and mainly related to constructed apartments built by Bagh Misheh Housing Co. and Azarbaijan Construction Co. 9.4. The existing properties related to lands owned by Construction Development International Group and Bagh Misheh which have been purchased for implementation of construction projects.

29

10. Orders & Prepayments

Group Parent Company 21/12/2009 21/12/2008 21/12/2009 21/12/2008 Note Million Rls Million Rls Million Rls Million Rls

Foreign Orders:

18,309 28,704 - -

Raw Materials 6,894 9,940 - -Spare Parts 86,960 26,274 - -Other 10-1 112,163 64,918 - -Prepayments: Purchase of Raw Materials & Construction Equipments

10-2 24,900 48,311 - -

Tax 10-3 236,656 233,982 110,291 110,291Insurance of Assets

2,219 3,656 - -

Automobile Manufacturing Companies

10-4 592,748 4,380

Purchase of Goods & Services

10-5 146,843 113,414 - -

Middle East Bank

10-6 112,081 -

Other 36,564 29,254 2,345 813 1,152,011 432,997 112,636 111,104 1,264,174 497,915 112,636 111,104

10.1. Other foreign orders include Rls72,909 million and Rls13,473 million, balance of two opened letters of credit through Kaspian Foulad Ghadir Co. for purchase of 46,660 tons of slab and two opened letters of credit by Ghadir Trade & Management Services Co. for import of meat from Brazil and home appliances from Turkey, respectively. 10.2. Prepayment balance of purchasing raw materials and construction equipments mainly related to Motojen, Shargh Cement and Sepahan Cement companies. 10.3. Tax prepayment include Rls110,291 million tax prepayment of the Parent Company and Rls125,708 million tax prepayment of the Kordestan Cement Co. Tax prepayment of the Parent Company include Rls456 billion as deducted tax from dividend of the Company after clearing with Rls346 billion tax provision. I addition, tax prepayment of Kordestan Cement Co. have been considered as retained profit in the accounts based on ratification dated February 17th, 2008 of the Board of Ministers and instruction dated December 22nd, 2008 of the Central Bank of Iran regarding changes in foreign exchange

30

rate of import machineries finance and in order to enjoy benefits of the mentioned ratifications. 10.4. Prepayment to car manufacturing companies related to funds paid by the Vasepari Sepehr Pars Co. to Iran Khodro, Iran Khodro Diesel, Bahman Khodro and Sapco for providing car in order to assign them to clients in the framework of hire purchase contracts. 10.5. Prepayment for purchasing goods and services mainly related to paid on-accounts to second hand contractors through Construction Development International Group companies. 10.6. Prepayment to Middle East Bank related to Almasader Company.

31

11. Tangible Fixed Assets 11.1. Table of cost price and accumulated depreciation of tangible fixed assets of the Group is as follows:

Cost Price – Million Rls Accumulated Depreciation – Million Rls Book Value – Million

Rls

Balance at 21/12/2008

Assets Added during

the Fiscal Year

Assets Sold

during the

Fiscal Year

Transfers & Adjustments



Depreciation of the Year

Accumulated Depreciation

of Sold Assets





Land 89,188 9,721 (0) 61,077 159,986 - - - - - 159,986 89,188 Building & Installments

833,055 39,704 (478) (6,381) 865,901 198,496 55,791 (216) (13,808) 240,263

625,638 634,559

Motor Vehicles

101,167 6,739 (2,616) (3,089) 102,201 58,264 7,478 (1,284) (2,431) 62,027

40,174 42,902

Machineries 1,756,729 28,926 (1,029) (147,729) 1,636,897 528,726 95,323 (637) (47,593) 575,819 1,061,078 1,228,003 Tools 50,517 5,162 (248) (1,925) 53,507 25,771 5,504 (195) (3,105) 27,975 25,532 24,746 Other Properties

70,969 5,960 (2,000) 4,036 78,965 52,588 6,728 (729) (20,837) 37,750

41,215 18,382

Furniture & Equipments

78,070 2,887 - (435) 80,520 34,615 6,961 (167) 19,063 60,471

20,049 43,456

Total 2,979,695 99,099 (6,371) (94,446) 2,977,977 898,460 177,785 (3,228) (68,711) (68,711) 1,973,672 2,081,236 Assets under Completion

1,679,595 950,976 (1) 13,594 2,644,163 2,644,168 1,679,595

Capital Orders & Prepayments

297,738 90,680 - (202,969) 185,450 185,450 297,738

Capital Items in Inventory

328,637 21,680 - (120,816) 229,500

229,500 328,637

Total 5,285,665 1,162,435 (6,372) (404,637) 6,037,090 898,460 177,785 (3,228) (68,711) 1,004,305 5,032,785 4,387,206

- Adjustments amount mainly related to assets of Abgineh Production Company which have been sold in the current year.

32

11.2. Table of cost price and accumulated depreciation of tangible fixed assets of the Parent Company is as follows:

Cost Price – Million Rls Accumulated Depreciation – Million Rls Book Value – Million

Rls


Assets Added during

the Fiscal Year




Depreciation of the Year





Land, Building & Installments

5,921 - - 5,921 2,569 235 2,804 3,117 3,393

Furniture & Equipments

1,768 34 - 1,802 1,028 179 1,207 595 740

Electronic Calculation Machines

1,993 53 (1) 2,044 1,303 203 1,506 538 690

Motor Vehicles

990 - 990 802 47 849 141 187

Total 10,672 87 (1) 10,757 5,702 664 6,366 4,391 4,970 Capital Prepayments

1,159 - (1,159) - - - - - 1,159

Total 11,831 87 (1,160) 10,757 5,702 664 6,366 4,391 6,129

11.3. Adjustments and transfers of cost price and accumulated depreciation of different titles of fixed assets include removing balance at the beginning of the fiscal year of fixed tangible assets of Abgineh Co. due to abandoning shares of the mentioned company by the Group in the current fiscal year and removing it from consolidation.

33

11.4. Balance of assets under completion and capital orders & prepayments based on the Group companies is as follows:

21/12/2009 21/12/2008 Assets under

Completion

Capital Orders &

Prepayments

Assets under

Completion

Capital Orders &

Prepayments Note

Million Rls Million Rls Million Rls Million Rls Shargh Cement 11-4-1 1,860,575 40,872 1,386,181 12,408Sepahan Cement

11-4-2 684,817 52,329 203,326 177,919

South Aluminum 11-4-3 67,224 - 67,224 -Kordestan Cement

19,710 13,436 16,461 25,240

Shahid Bahonar Board

146 59,923 146 54,207

Construction 2,283 - 2,472 11,505Motojen 1,321 11,639 2,016 13,093Abgineh - - 1,471 2,208Other 8,087 7,251 298 1,158 2,644,163 185,450 1,679,595 297,738

11.4.1. Assets under completion and capital orders and prepayments of Shargh Cement Co. related to cost price of development project of unit 4 of the plant with the capacity of 3,400 tons of clinker per day. 11.4.2. Assets under completion and capital orders and prepayments of Sepahan Cement Co. related to expenditures of constructing new production line of producing clinker (include amounts paid for establishing building and purchase and installing machineries and equipments as well as other expenditures of phase 3). This project utilized after the reported financial year. 11.5. Balance of capital items in the inventory mainly related to Sepahan Cement Co. (include Rls53,977 million and Rls129,870 million cost price of machineries and equipments of clinker production line and machineries and equipments of plant optimization, respectively). 11.6. Group’s fixed tangible assets have insurance coverage up to Rls3,086 billion and the Parent Company up to Rls13 billion, against probable hazards such as fire, flood and earthquake. 11.7. A part of buildings, installations and machineries of the Group companies held with banks that gave financial facilities.

34

12. Intangible Assets


Million Rls Million Rls Million Rls Million Rls Royalty of using Public Services

68,463 64,792 702 520

Right of Business & Changing Usage of the Building

209 209 - -

Technical Know-how

4,057 4,152 - -

Financial Software, etc.

4,785 818 - -

77,814 69,971 702 520

13. Goodwill

21/12/2009 21/12/2008

Note Million Rls Million Rls

Cost Price: Balance at the beginning of the Year

5,425,181 3,118,164

Acquired Goodwill during the Year

13-1 14,686 559,627

Abandoned Goodwill during the Year

13-2 (20,968)

(80,464

Transfer from Goodwill due to Acquiring Affiliated Companies

0

1,827,854

Balance at the End of the Year 5,418,899 5,425,181Less: Accumulated Depreciation

Balance at the beginning of the Year

1,511,482

675,035

Depreciation of the Year 536,968 532,491Adjustments - 6,054Goodwill Depreciation of Abandoned Share during the Year

(17,329)

(35,043

Transfer from Goodwill Accumulated Depreciation due to Acquiring Affiliated Companies

-

332,945

Balance at the End of the Year 2,031,121 1,511,482 3,387,778 3,913,699Provision for Value Decrease 13-3 - (33,790 3,387,778 3,879,908

35

13.1. Acquired goodwill during the fiscal year mainly related to acquiring shares of Kordestan and Sepahan Cement companies by the Group (mainly through Ghadir Capital & Investment Co.). 13.2. Decrease in balance of goodwill during the fiscal year mainly related to abandoning shares of Abgineh Co. (total share of the Group) and Motojen by the Parent Company. 13.3. Provision for value decrease at the end of the previous fiscal year related to provided provision by Ghadir Capital & Industry Development Co. as the increase in cost price of acquired share of Sepahan Cement Co. compare to its market value which have been returned through increase in market value of the mentioned company in the reported fiscal year.

14. Long-term Investments 14.1. Group's long-term investments are as follows: A) Long-term investment in affiliated companies

Quota from Net Assets

Goodwill Quota from Net Total Assets

Note

Million Rls Million Rls Million Rls Balance at the beginning of the Year

2,324,457 242,823 2,567,280

Additions during the Year

14-1-2 153,415 70,427 223,842

Transfer from Other Long-term Investments

14-1-3 816,000 517,719 1,333,719

Abandoned during the Year

14-1-4 (99,821) 3,477 (96,344)

Quota from Profit of Affiliated Companies

14-1-1 1,490,643 - 1,490,643

Dividend Received & Receivable

(1,425,525) - (1,425,525)

Goodwill Depreciation - (91,637) (91,637) 3,259,169 742,809 4,001,978

14.1.1. Group’s quota from profit of affiliated companies is as follows:

Amount

Million Rls Quota from Profit of Affiliated Companies 1,325,928Quota from Profit of Zagros Petrochemical from Acquiring Date until Remarkable Influence Date

164,715

1,490,643Goodwill Depreciation (91,637)

36

1,399,006

14.1.2. Investment additions in shares of affiliated companies related to participation in capital increase of Iran Alloy Steel Co. acquiring shares of Behshahr Development Industries and Dashtestan Cement companies as well as adjustment of cost price investment in shares of Pardis Petrochemical Co. 14.1.3. Transfer from other long-term investments related to transfer of cost price of investment in shares of Zagros Petrochemical Company due to enjoying remarkable influence in the mentioned company (selection of one board member by the Group) in the reported year. 14.1.4. Abandoning shares of affiliated companies in the reported fiscal year mainly related to assigning all shares of Kerman Steel Co. and a part of shares of Bahman Co. 14.1.6. Group investment in shares of listed companies describe as follows:

21/12/2009 21/12/2008 Cost Price Market Value Cost Price

No. of Shares Million Rls Million Rls Million Rls

Arak Petrochemical

48,144,041 298,653 109,672 298,653

Karoun Cement

26,435,236 222,881 206,369 220,174

Khazar Cement

15,659,390 72,109 30,916 130,319

Darab Cement 13,700,010 84,524 77,021 83,350Hegmatan Cement

5,007,563 24,117 11,451 22,629

Other 139,193 117,678 62,340 841,477 553,107 817,465

14.1.7. Group investment in shares of other companies describe as follows:

Group 21/12/2009 21/12/2008


Maroun Petrochemical 280,000,000 751,790 751,790Khouzestan Cement 155,000,359 689,543 654,543Amir Kabir Petrochemical 43,670,427 119,439 119,439Pars Aryan Investment 79,481,250 79,481 92,204Novin Capital Provision 80,000,000 80,000 80,000Gharb Petrochemical 100,000,000 35,000 35,000Morvarid Petrochemical 170,000,000 170,000 170,000Zagros Petrochemical - 1,333,719Other 85,622 120,737

37

2,010,875 3,357,432

14.1.8. Balance of plans and projects at the date of balance sheet completely related to the Parent Company and describes as follows:

21/12/2009 21/12/2008 Note

Million Rls Million Rls Pardis Petrochemical 14-1-8-

11,073,745 1,149,007

Ghadir Iranian Iron & Steel Project 44,000 -Morvarid Petrochemical 85,000Petrochemical Projects - 51,472 1,202,745 1,200,479

14.1.8.1. Based on the conducted contract between Ghadir Investment Co. and National Petrochemical Industries Co., 51% of Assaluyeh Urea & Ammoniac Production project assigned to Ghadir Investment Co. The above-mentioned project includes two units with the capacity of 1,100,000 tons of Urea and Ammoniac per year, each unit. The first unit has been utilized in 2007/08. The afore-mentioned amount is the retained paid for 51% of the Company’s quota. 14.1.9. Other long-term investments related to Group’s companies investments in properties and construction projects are as follows:

21/12/2009 21/12/2008 Note

Million Rls Million Rls Almasader Jabal Ali Co. 14-1-9-1 784,217 535,946Construction Development International Group

14-1-9-2 332,061 -

Other Companies 22,825 25,511 1,139,103 561,457

14.1.9.1. Investments of Almasader Jabal Ali Co. in construction projects related to IB Tower, Jaddaf and Ammar projects. 14.1.9.2. Investments of Construction Group in properties mainly related to maintained lands for construction through Baghmisheh Co. 14.2. Long-term investments of the Parent Company are as follows:

21/12/2009 21/12/2008 Accepted

in TSE Other

Companies Total

Accepted in TSE

Other Companies

Million Million Rls Million Rls Million Million Rls

38

Rls Rls Subsidiary Companies

1,205,480 3,672,952 4,878,432 1,141,269 3,666,498

Affiliated Companies

702,178 2,144,032 2,846,210 655,484 653,290

Other Companies

192,741 1,269,214 1,461,955 112,685 2,588,677

Plans & Projects

1,202,745 1,202,745 1,200,479

2,100,399 8,288,943 10,389,342 1,909,438 8,108,944

14.2.1. Long-term investments of the Parent Company are as follows:

Accepted in TSE – Million Rls

21/12/2009 21/12/2008

Cost Price Market Value

Cost Price


570,077 836,855 466,754

Bahman Group 395,163 457,157 394,843Sepahan Cement 358,103 210,447 358,103Motojen 176,689 153,096 177,646Behshahr Industries Development 205,113 157,903 158,545Other 395,254 253,178 353,547 2,100,399 2,068,636 1,909,438

Other Companies – Million Rls

21/12/2009 21/12/2008

Ghadir Capital & Industry Development 2,849,200 2,849,200Zagros Petrochemical 1,333,719 1,333,719Pardis Petrochemical (Ghadir Urea & Ammoniac)

1,149,530 1,149,517

Maroun Petrochemical 751,790 751,790E’etezad Ghadir Investment 495,000 495,000Sarouj Boushehr International 299,590 299,590Iran Alloy Steel Co. 244,353 147,984Amir Kabir Petrochemical 119,439 119,439Morvarid Petrochemical 170,000 170,000Novin Capital Provision 80,000 80,000Almasader Jabal Ali 74,737 74,737Ghadir Trade & Industrial 72,999 72,999Ghadir Iranian Iron & Steel 104,000 104,000Pars Aryan Investment 79,481 66,234Ghadir Management Services 54,000 54,000Kavir Tire 47,149 50,746Other 363,956 289,989 8,288,943 8,108,944

39

14.3. Details of Group’s subsidiary companies based on holding and direct investments of the Parent Company are as follows:

% of Investment Company Location

Group Parent

Company Main Activity

Ghadir Management Services

Iran 100 100 Financial & Consulting Services

Bank Saderat Printing Iran 100 - Printing Services

Shahid Bahonar Board Iran 76 - Production of Chip Board

Araz Gol Gonbad Iran 76 - Agricultural Products

Golestan Wood Industries International

Iran 76 - Wood Industries

Ghadir Trade Development International

Iran 99 - Trade Services

Kaspian Foulad Ghadir Trade

Iran 66 - Trade Services

KSP Co. United Arab

Emirates 80 - Trade Services


Iran 95 22 Sell & Purchase of Land, Building & Investment

ASP Iran 95 - Construction Operations

Baghmisheh Housing Iran 95 - Construction Operations

Behsan Pars (Nasr Construction)

Iran 95 - Construction Operations

Azarbaijan Construction Iran 58 - Construction Operations

Waste Water Industry Development

Iran 51 - Production of Concrete Pipes

Sarpanah Fars Iran 94 - Providing Land & Consulting Construction

Pars Sazeh Construction & Engineering

Iran 94 - Road Making & Construction Activities

Peyman Ghadir Consulting Engineers

Iran 94 40

Technical Consulting & Engineering Services

Kish Royaye Zendegi Iran 72 Construction Operations

Sivan Rahsaz Iran 95 Road Making Operations

Tisa Kish Iran 73 - Construction Operations

40

% of Investment Company Location

Group Parent

Company Main Activity

Development of Narenjestan Hotel & Building

Iran 73 - Construction Operations

Sakht Beton Pre-fabricated Parts

Iran 93 Production of Concrete Pre-fabricated Parts

Motojen Iran 53 52 Production of Electrical Engines

Momtaz Electric Iran 42 - Production of Electrical Engines Parts

Payvar Andish Iran 53 - Rendering Industrial Services

Sepahan Cement Iran 33 11 Cement Production Sepahan Cement Investments

Iran 33 - Investment, Sell & Purchase of Shares

Shargh Cement Iran 29 6 Cement Proiduction

Shargh Cement Products Iran 29 - Production of Cement Production

Shargh Coal Mines Iran 29 - Exploitation of Mines

Direct Investments:

Ghadir Capital & Industry Development

Iran 100 100 Investment in Cement Industry & Other Industries

Kordestan Cement Iran 52 - Cement Production Daryaban Jonoub Iran 100 100 Marine Services E’etezad Ghadir Investment Iran 100 99 Investment

Ghadir Trade & Industry Iran 100 100 Investment & Trade Services

Almasader Jabal Ali Dubai 100 100 Trade Services Karamad Systems Iran 100 98 Designing Systems

South Aluminum Iran 51 51 Aluminum Production

Vasepary Sepehr Pars Iran 80 80 Technical & Marketing Services

Azar Investment Iran 33 1 Investment Day Investment Iran 51 1 Investment Zarrin Persia Investment Iran 95 95 Investment Alvand Ghadir Development Investment

Iran 100 98 Investment

Arman Equipping & Resources Management

Iran 100 98 Investment

Sepehr Iranian Insurance Services

Iran 100 98 Insurance Services

41

14.4. Details of Group’s affiliated companies are as follows:

% of Investment

LocationGroup

Parent Company

Main Activity

Behshahr Development Industries

Iran 6 6 Investment, Sell & Purchase of Shares

Bahman Production Group Iran 11 10 Automobile Production

Shahid Ghazi Serum Making Iran 20 20 Production of Human & Animal Serums

Iran Kish Card Iran 31 31 Credit Card Services

Ney Riz Cement Iran 38 - Cement Production Sarouj Boushehr Iran 29 23 Cement Production

Kerman Steel Iran 25 25 Production of Steel Products

Iran Alloy Steel Iran 37 37 Production of Alloy Steel Products

Kavir Tire Iran 18 18 Production of Automobile Tires

Bank Saderat Brokerage Iran 33 33 Stock Brokerage Services

Ghadir Automobile Leasing Iran 19 19 Credit Services

Iran Bearing Iran 20 20 Production of Bearing

Pardis Petrochemical Iran 51 51 Petrochemical Products

Zagros Petrochemical Iran 34 34 Petrochemical Products

Dashtestan Cement Iran 49 - Cement Production

Ghadir Iranian Iron & Steel Iran 40 40 Production of Steel Products

14.4.1. Despite belonging of 51% shares of Pardis Petrochemical Co. (Ghadir Urea & Ammoniac) to the Group, due to lack of control, the mentioned investment classified in “investment in affiliated companies”. 14.4.2. Applying special value method to those companies that investment in them are less than 20% is due to having remarkable influence in the investee company.

42

15. Other Assets

Group Parent Company 21/12/2009 21/12/2008 21/12/2009 21/12/2008 NoteMillion Rls Million Rls Million Rls Million Rls

Long-term Portion of Accounts & Notes Receivable

15-1 3,089,122 2,022,289 175,511 112,744

Long-term Portion of Debt from Group Companies

15-2 - - 2,429,370 2,429,338

Land & Properties 15-3 76,775 387,495 13,000 13,000Long-term Portion of Personnel Loan

50,690 14,052 - -

Other 13,652 29,267 10,432 -

3,230,239 2,453,103 2,628,313 2,555,082

15.1. Long-term portion of accounts and notes receivable based on Group companies is as follows:

Group 21/12/2009 21/12/2008 Note

Million Rls Million Rls Parent Company 7-1 175,511 112,744Construction Development International Group

15-1-1 866,014 725,259

Motojen 23,205 16,462Vasepary Sepehr Pars Co. 2,019,105 1,167,824Daryaban Jonoub 5,287 -

3,089,122 2,022,289

15.1.1. Long-term portion of accounts and notes receivable of Construction Development International Group companies include Rls388,089 million checks received from purchasers of constructed units. 15.1.2. Long-term portion of debt form Group companies include; debt form Zarrin Persia companies (for sales of 499.9 million shares of Construction Development International Co.) and Ghadir Trade & Industry (for sales of 250 million shares of Construction Development International Co.). The decision is to use these amounts for capital increase of the two mentioned companies in the next two years. 15.3. Land and properties based on Group companies are as follows:

Group 21/12/2009 21/12/2008 Note Million Rls Million Rls

Vasepary Sepehr Pars Co. 15-3-1 18,256 297,904Construction Group Companies 23,724 76,013

43

Other Companies 34,795 13,578

76,775 387,495

15.3.1. The balance of land and properties of Vasepary Sepehr Pars Co. at the end of the previous fiscal year include Rls249,467 million cost price of Esfahan Keshavarz Blvd. project, Rls27,658 million cost price of Esfahan Motahhari property and Rls20,779 million cost price of 4 residential apartments and stores in Tehran Tower. Esfahan Keshavarz Blvd. project and Esfahan Motahhari property mainly assigned in the reported year and Rls75,822 million earned profit reflected in “Sales & Income from Rendered Services”.

16. Trade Accounts & Notes Payable


Notes Payable

16-1 176,427 226,800 - -

Foreign Exchange Liabilities

16-2 206,732 126,169 - -

Sellers of Goods & Services

618,928 531,276 - -

Bank Saderat Iran

16-3 606,823 73,887 - -

Other 22,845 31,881 - 7,757

1,631,755 990,013 - 7,757

16.1. Balance of notes payable include Rls20,362 million notes payable of Kalaye Sepehr Pars Co., Rls35,215 million notes payable of Ghadir Capital & Industry Development Co. to Privatization Organization for purchasing shares of Dashtestan Cement Co. Rls54,718 million issued checks by Construction Group companies in favor of Shiraz Municipality for receiving construction licenses and surplus density of Sa’adi projects and Rls58,532 million balance of notes payable of Kordestan Cement Co. 16.2. Balance of foreign exchange liabilities include Rls88,382 million debt of Almasader Jabal Ali Co. to purchasers of goods and Rls118,350 million debt of Kaspian Foulad Ghadir for cost of purchased goods for sale. 16.3. Debt balance of Bank Saderat include Rls38,207 million debt of Construction Development International Co. for remaining of funds earned from sales of Bank’s apartments in Tehran Tower and Rls568,616 million debt

44

of Ghadir Trade & Management Services Co. to Bank Saderat for amount of opened letters of credit for purchasing goods.

17. Other Accounts & Notes Payable

Group Parent Company 21/12/2009 21/12/2008 21/12/2009 21/12/2008 Note

Million Rls Million Rls Million Rls Million Rls Notes Payable 17-1 179,402 108,895 - -Payable Insurance Premium

12,076

11,831 - 145

Withholding Taxes

28,896

30,549 11,146 10,705

Kharazmi Investment

17-2 100,479

131,104 - 90,694

Current of Renters

17-3 138,177

- - -

Payable Duties 40,535 31,644 - -Payable Deposits

314,695

252,812 - 914

Morvarid Petrochemical

-

41,000 - 41,000

Provision for Payable Expenses

83,290

275,540 630 7,557

Other 297,411 244,621 11,231 7,228

1,194,961 1,127,996 23,007 158,243

17.1. Notes payable mainly related to checks paid by Group companies in favor of Tax Affairs Organization. 17.2. Debt balance to Kharazmi Investment Co. include Rls60,803 million and Rls23,076 million debt of Azar and Day Investment companies, respectively. In addition, Rls16,600 million is debt of Vasepary Sepehr Pars Co. 17.3. Debt balance to renters related to Vasepary Sepehr Pars Co. and mainly related to insurance and goods differences amounts and until preparation of these financial statements, the final confirmation have been issued.

18. Advances Received


Advances Received –

162,713 314,489 - -

45

Rials Advances Received – Foreign Exchange

- 1,020 - -

Group Companies

18-1 - - 83,087 -

Sales in Advance of Apartments

615,593 155,443 - -

778,306 470,952 83,087 -

18.1. Advances received of the Parent Company include amounts received from Ghadir Capital & Industry Development Co. for contract of selling shares of Sepahan Cement, Shargh Cement, Khazar Cement and Hegmatan Cement companies.

19. Tax Provision

19.1. Turnover of the Group's tax provision account during the year is as follows:

Group For the Year Ended

21/12/2009 For the Year Ended

21/12/2008

Million Rls Million Rls Balance at the beginning of the Year 453,452 256,683Tax Provision during the Year 229,947 171,092Adjustments of Tax Provision - 151,233Paid during the Year (240,860) (125,556)

Balance at the End of the Year 442,539 453,452

19.2. Summary of income tax situation of performance of the Parent Company from 1993/94 to 2002/03 described in note 12-2-1 and from last year until the date of balance sheet is as follows:

Fiscal Year Ended 21/12/2009 – Million Rls

Tax

Fiscal Year Ended

21/12/2008 – Million

Rls Fiscal Year Declared

Profit

Declared Recognized Definite Paid Provision Balance

Provision Balance

Recognition Method

21.12.1995 46,707 25,336 25,802 19,971 8,725 11,246 11,246 Definite & under Settlement

46

Fiscal Year Ended 21/12/2009 – Million Rls

Tax

Fiscal Year Ended

21/12/2008 – Million

Rls Fiscal Year Declared

Profit

Declared Recognized Definite Paid Provision Balance

Provision Balance

Recognition Method

22.09.1996 119,949 33,857 57,420 34,034 - 34,034 34,034 Definite & under Settlement



21.12.1999 21,035 300 1,017 779 - 779 779 Definite & under Settlement



21.12.2002 983,815 3,898 - 4,911 - 4,911 4,911 Definite & under Settlement

21.12.2003 1,656,983 - 14 14 14 - - Definite & Settled

21.12.2004 3,048,134 - - - - - - Definite & Settled



21.12.2007 1,633,268 - 4,667 4,200 4,200 - - Definite & Settled

21.12.2008 3,167,888 - - - - - - Not Surveyed

21.12.2009 3,341,494 - - - - - - Not Surveyed

345,894 345,894 Tax Prepayments

(345,894) (345,894)

- -

20. Payable Dividend

Note Group Parent Company

47

21/12/2009 21/12/2008 21/12/2009 21/12/2008 Million Rls Million Rls Million Rls Million Rls

Parent Company:

2,001,318 1,330,609 2,001,318 1,330,609

Subsidiary Companies – Owned by Minority

539,482 523,281 - -

2,540,800 1,853,890 2,001,318 1,330,609

21. Financial Facilities Received

21.1. Financial facilities received based on providers of financial facilities are as follows:


Million Rls Million Rls Million Rls Million RlsBanks – Domestic 7,074,573 5,299,444 110,145 97,094Banks – Overseas 1,562,517 1,155,003 571,315 606,627Other Resources 152,301 - - - 8,789,391 6,454,447 681,460 703,721Long-term Portion of Financial Facilities Received

(4,673,012) (3,050,484) (170,323) (268,569)

4,116,379 3,403,963 511,137 435,152

21.1.1. Financial facilities received from other resources include Rls87,443 million and Rls23,018 million debt balance of Almasader Co. as property loan and Rls41,840 million debt of Kaspian Foulad Ghadir for opened L/Cs, respectively. 21.2. Financial facilities received based on profit rate and commission is as follows:

21/12/2009 Group Parent Company

Million Rls Million Rls Over 20% 771,762From 15% to 20% 1,001,315 110,145From 5% to 15% 7,016,314 571,315

8,789,391 681,460

21.3. Financial facilities received based on repayment time are as follows:


48

Million Rls Million Rls 2009 – 2010 4,116,379 511,1372010 – 2011 3,653,701 134,5243 Last Months of 1390 (2011) & after that

1,019,311 35,799

8,789,391 681,460

49

21.4. Financial facilities received based on type of pledge are as follows:


Million Rls Million Rls Land, Building & Machineries 2,557,733 -Check & Promissory Note 5,456,237 110,145In front of Other Assets (Shares & Banking Deposits)

775,421 571,315

8,789,391 681,460

22. Long-term Accounts & Notes Payable

Group 21/12/2009 21/12/2008 Note

Million Rls Million Rls Notes Payable 22-1 47,671 77,240Kharazmi Investment Co. 22-2 57,325 57,325Hambulet Co. 22-3 47,722 46,025Foreign Exchange Bills 22-4 5,679 5,679

158,397 186,269

22.1. Long-term portion of notes payable include Rls47,548 million notes payable to Privatization Organization for purchasing shares of Dashtestan Cement Co. and in tender dated November 18th, 2007. The related installments would be paid within 4 years. 22.2. Debt balance to Kharazmi Investment Co. related to Zarrin Persia Co. for transferring 5% debts of Ghadir Investment Co. for selling shares of Construction Development International Co. to the account of Kharazmi Investment Co. in line with decisions related to capital increase. 22.3. Foreign exchange debt balance to Hambulet Co. related to 10% remaining of cost of purchased production machineries by Sepahan Cement Co. from the mentioned company in the previous years. 22.4. Balance of foreign exchange bills related to Rial equivalent of 5.4 million Mark debt of Shahid Bahonar Board Co. for assignment bills for purchasing machineries from Germany Trepel Co. in the previous years.

23. Provision for Employees’ Work Termination Benefit

Group Parent Company Year Ended 21/12/2009

Year Ended 21/12/2008




50

Balance at the beginning of the Year

214,940 109,028 2,602 2,138

Paid During the Year

(127,911) (35,666) (1,660) (1,602)

Provided Reserve

104,177 65,530 2,463 2,066

Adjustments (22,308) 76,048 - -

Balance at the End of the Year

168,898 214,940 3,405 2,602

23.1. Adjustments of provision in the reported year related to the balance of employees’ work termination benefit at the beginning of the year of Abgineh Co. which has been eliminated due to assignment of its shares and exclusion from consolidation.

24. Capital

The capital of the Parent Company amounted to Rls6,075 billion which includes 6,075 million common shares, with name (Rls1000 each). The last capital increase of the Company according to ratification of the Extra-ordinary General Assembly dated March 29th, 2007, was amounted to Rls1,012.5 billion (20%) from capital reserve and registered at Tehran Trade Institutes and Companies Registrar Office on July 1st, 2007. Composition of shareholders and their percent of ownership at the date of balance sheet are as follows:

No. of Shares %

Armed Forces Social Security Organization (Sata) 364,530,000 6 Armed Forces Social Security Investment 953,667,255 16 Armed Forces Insurance Funds 911,250,000 15 Armed Forces Pension Fund 911,250,000 15 Bank Saderat Iran Network 1,600,711,060 26 Other Legal Entities 1,033,992,144 17 Real Entities 299,599,541 5

6,075,000,000 100

24.1. Share of the Parent Company in ownership of sub companies at the date of balance sheet is as follows:

21/12/2009 21/12/2008 Cost Price Cost Price


Sepahan Cement Group Companies

10,315,000 35,220 60,828

Ghadir Capital & Industry

1,020,000 2,160 3,668

51

Development Co. Shargh Cement 3,535,760 13,981 13,981E’etezad Ghadir Investment

4,868,381 11,007 5,600

Shahid Bahonar Board

17,460 100 100

Other 714,512 1,761 1,949

20,471,113 64,229 86,126

25. Legal Reserve As stipulated by Articles 140 and 238 of the Amended Commercial Code passed in 1969, some amounts from the allocable profit of the Parent Company and subsidiary companies are transferred to legal reserve account. According to above-mentioned articles allocating part of the profit to legal reserve is compulsory till the balance of the said reserve reaches to 10% of the capital of each company. The legal reserve may not be transferred to capital and is not distributable among the shareholders unless the company is being liquidated.

26. Capital Reserve Turnover of the capital reserve account (related to the Parent Company) is as follows:

Capital Reserve Year Ended 21/12/2009


Million Rls Million Rls Balance at the beginning of the Year 4,303,479 3,975,225Allocation from Allocable Profit 121,797 328,254

Balance at the End of the Year 4,425,276 4,303,479

26.1. According to Article 52 of the Articles of Association of the Company, ratification of the Extra-ordinary General Assembly dated November 24th, 2008, the net profit from selling shares of the Company’s portfolio shall be transferred to capital reserve account every year. After reaching half of the registered capital and receiving license from Tehran Stock Exchange, based upon suggestion of Board of Directors with ratification of Extra-ordinary General Assembly it can be changes into capital. Capital reserve may not be distributed among shareholders until the Company is operating. Only in exceptional cases, the company may transfer up to 20% of the amount that have been transferred to capital reserve in the same year to dividend account upon recommendation of the Board of Directors and approval of the Ordinary General Assembly of the shareholders.

52

27. Other Reserves Flow of other reserves account during the fiscal year is as follows:





Million Rls Million Rls Million Rls Million Rls Balance at the beginning of the Year

318,953 319,124 281,846 281,846

Allocation from Allocated Profit

52 - - -

Adjustments (17,011) (171) - -

Balance at the End of the Year

301,994 318,953 281,846 281,846

28. Difference of Retained Foreign Exchange Difference of retained foreign exchange amounted to Rls40,401 million (at the end of the previous year it was Rls38,965 million) include Rls6,343 million retained difference from conversion of items in financial statements of subsidiary company Almasader Jabal Ali from Kuwait Dinar to United Arab Emirates Dirham in the process of preparation of consolidated financial statements of Almasader Jabal Ali Co., Rls35 million retained difference from conversion of items stated in the financial statements of the subsidiary company Vasepary Sepehr Pars from United Arab Emirates Dirham to Rials for using in consolidated financial statements of Vasepari Sepehr Pars Co. and Rls34,023 million retained difference from conversion of items in financial statements of Almasader Jabal Ali from United Arab Emirates Dirham to Rials for using in Group’s consolidated financial statements.

29. Minority Interest Minority interest in subsidiary companies includes the following items:

21/12/2009 21/12/2008

Million Rls Million Rls Capital 2,030,619 1,750,081Legal Reserve 150,479 113,806Other Reserves 25,886 25,273Capital Increase On-account 79,000 118,940

Retained Profit 925,571 804,015

3,211,555 2,812,115

53

30. Net Sales & Income from Rendered Services


Year Ended 21/12/2008 Note

Million Rls Million Rls Sales of Products: 4,489,761 4,192,505Domestic Sales 657,717 672,900

Export Sales 5,147,478 4,865,405Total Products Sales 2,360,038 1,925,731Sales of Land & Properties 30-1 (156,537) (28,691)

Return on Sales & Discounts 30-2 7,350,979 6,762,445Net Sales 181,218 59,835Income from Rendered Services 30-3 471,548 211,859

Income from Granted Facilities 30-4 8,003,745 7,034,139

30.1. Sales of land and properties include Rls2,284,217 million sales of Construction Group Companies (mainly sales of Tehran Tower apartments and other under implementation projects) and Rls75,822 million sales profit of properties (Esfahan Keshavarz Blvd. and Motahhari property projects) by Vasepari Sepehr Pars Co. 30.2. Return on sales and discounts mainly related to Sepahan Cement, Shargh Cement and Motojen. 30.3. Income from rendered services based on the Group companies is as follows:



Million Rls Million Rls Construction Investment Group 178,215 51,445Daryaban Jonoub – Marine Services 572 5,582Other 2,431 2,808

181,218 59,835

30.4. Income from granted facilities related to income of Vasepary Sepehr Pars Co. which mainly include commission of granted facilities and conducted contracts with Saipa Diesel and Sapco.

31. Cost Price of Goods Sold & Services Rendered



Note

Million Rls Million Rls Cost Price of Goods Sold 31-1 3,379,398 3,380,586Cost Price of Sold Land & 31-2 1,044,862 859,020

54

Properties Cost Price of Services Rendered 31-3 72,547 14,726

4,496,807 4,254,332

31.1. Cost price of sold products describes as follows:


Year Ended 21/12/2008 Note

Million Rls Million Rls Direct Consumable Materials 31-1-1 543,440 908,407Direct Wage 31-1-2 260,825 256,721Production Overhead 31-1-3 979,658 1,022,031Unabsorbed Costs in Production 31-1-4 (42,776) (20,070)

Total Production Costs 1,741,147 2,167,089Increase in Under Production Inventory

(13,383) (25,503)

Extra Ordinary Wastes (1,740) (2,080)

Cost Price of Produced Goods 1,726,024 2,139,506Purchase of Produced Goods 1,698,441 1,336,662Increase in Produced Goods (30,958) (95,202)Non-productive Consumptions & Adjustments

(14,109) (380)

Cost Price of Goods Sold 3,379,398 3,380,586

31.1.1. Decrease in cost of consumable materials in the reported fiscal year compare to the previous year was mainly due to decrease in cost of consumable materials in Motojen Co. and exclusion of Abgineh Co. from consolidation due to assignment. 31.1.2. Direct wage consist of the following items:

Year Ended 21/12/2009 Year Ended 21/12/2008 Million Rls Million Rls

Salary, Wage & Benefits 217,157 204,599Insurance Premium (Employer Quota)

13,782 18,197

Work Termination Benefits 11,467 23,561Other 18,419 10,364

260,825 256,721

31.1.3. Production overhead expenses are as follows:


Salary, Wage & Benefits 205,881 294Insurance Premium (Employer Quota)

30,777 39,525

Employees’ Work Termination 37,210 51,891

55

Benefits Indirect Materials 122,902 35,892Depreciation 218,570 179,224Repair & Maintenance of Assets 73,269 62,438Electricity & Energy 18,992 244,700Property & Assets Insurance Premium

2,967 2,852

Transport 17,916 8,861Other 89,174 102,497

979,658 1,022,031

31.1.4. The unabsorbed production expenses mainly related to Shargh Cement, Sepahan Cement and Shahid Bahonar Board companies. 31.2. Cost price of sold land and properties amounted to Rls1,044,862 million related to cost price of assigned properties through Construction Group which mainly related to cost price of sold units from Tehran Tower and other projects under implementation by Construction Development International Co. 31.3. Cost price of rendered services completely related to Construction Development International Group companies. 31.4. Comparison of sales and cost price of goods sold based on type of activities is as follows:

Year Ended 21/12/2009 Year Ended 21/12/2008 Sales Cost Price Sales Cost Price

Million Rls Million Rls Million Rls Million Rls Cement Industry Companies

2,461,388 1,098,220 2,229,268 1,125,931

Almasader Jabal Ali Co. 364,807 314,677 505,408 435,584Motojen Group (Electrical Engines)

708,037 562,210 730,766 597,283

Shahid Bahonar Board Co.

38,798 28,802 59,494 41,039

Construction Development International Group Companies

65,581 160,178 117,156 82,941

Ghadir Management Services Co.

1,002,647 861,868 206,078 178,058

Bank Saderat Printing Co.

11,781 8,699 10,778 7,769

Kaspian Foulad Ghadir Co.

335,146 341,472 787,894 718,146

Glass Production Companies

- - 186,985 189,583

Karamad Systems Management Co.

2,756 3,272 2,887 4,252

56

4,990,941 3,379,398 4,836,714 3,380,586

57

32. Profit from Operating Investments





Note

Million Rls Million Rls Million Rls Million Rls Dividend of Subsidiary Companies

32-1 - - 1,914,464 1,355,710

Dividend of Affiliated Companies

32-2 - - 1,264,063 1,131,210

Dividend of Other Companies

32-3 372,878 890,481 228,219 708,371

Total 372,878 890,481 3,406,746 3,195,291Profit from Sales of Investments

32-4 59,652 191,200 121,797 159,666

Profit of Participation Bonds & Banking Deposits

12,629 4,668 - -

Other 37,720 - - -

482,879 1,086,349 3,528,543 3,354,957

32.1. Dividend of subsidiary companies liable to consolidation includes the following items:



226,312 204,530

Zarrin Persia Investment 497,800 446,500Almasader Jabal Ali 79,262 73,428Ghadir Trade & Industrial 261,000 237,000Ghadir Management Services 122,000 30,000Shargh Cement 16,112 13,427Motojen 38,388 35,912E’etezad Ghadir Investment 67,320 22,275Kalaye Sepehr Pars 120,800 48,000Ghadir Capital & Industry Development

439,876 199,944

Sepahan Cement 45,105 38,619Other 489 6,075

1,914,464 1,355,710

32.2. Dividend of affiliated companies is as follows:


58

Behshahr Development Industries 25,197 3,844Bahman Production Group 58,996 67,041Pardis Petrochemical (Ghadir Urea & Ammonic)

448,800 918,000

Zagros Petrochemical 540,600Iran Alloy Steel Co. 129,500 83,622Ghadir Automobile Leasing 8,657 15,871Shahid Ghazi Serum Making 13,500 13,500Kavir Tire 36,409 23,703Bank Saderat Brokerage 1,650 2,970Other 754 2,659

1,264,063 1,131,210

32.3. Dividend of other companies include Rls154,000 million dividend of Maroun Petrochemical Co., Rls730 million dividend of Industry & Mines Leasing, Rls9,538 million dividend of Pars Aryan Investment Co. and Rls25,288 million dividend of Fan Avaran Petrochemical Co. In addition, income of the Parent Company in the previous year as dividend of other companies include Rls680,000 million dividend of Zagros Petrochemical Co. Due to Group follow ups and having remarkable influence in the mentioned company, income of the Parent Company reflected in dividend of affiliated companies as dividend of the said company. 32.4. Profit from sales of investments based on seller companies is as follows:



Note

Million Rls Million Rls Parent Company 32-4-1 121,797 159,666Ghadir Capital & Industry Development Co.

(5,960) 16,914

E’etezad Ghadir Investment Co. (29,675) (9,384)Ghadir Trade & Industry Co. (150) (2,370)Other (11,266) 916

74,746 165,742Net Recognized Profit (Loss) & Goodwill Accumulated Depreciation of Group’s Abandoned Companies

(15,094) 25,458

59,652 191,200

32.4.1. Profit from sales of shares through Parent Company is as follows:

Year Ended 21/12/2009 Year Ended 21/12/2008

Sales Cost Price Profit (Loss)

Profit (Loss)Investee Company

Million Rls Million Rls Million Rls Million Rls A) TSE Companies:

59

Year Ended 21/12/2009 Year Ended 21/12/2008

Sales Cost Price Profit (Loss)

Profit (Loss)Investee Company

Million Rls Million Rls Million Rls Million Rls Abgineh 150,620 65,010 85,610 -Motojen 6,575 7,759 (1,184) Construction Development International

6,174 4,3241,850 5

Shahdab - - - 42,053Industry & Mine Leasing - - - (6,121)Other 19,785 26,115 (6,330) (4,531)Sales Expenses - 1,454 (1,454) (608)

183,154 104,662 78,492 30,798

B) Non-TSE Companies Sulfurine 75,134 40,141 34,993 -Carbonate Sodium 17,357 10,395 6,962 -Kerman Steel Industries 10,368 11,025 (657) -Saramad Ghadir Investment

- -- 118,715

Azar Glass Industries - - - 15,185Other 6,045 3,597 2,448 368Sales Expenses - 441 (441) (5,400)

108,904 65,599 43,305 128,868

292,058 17,261121,797 159,666

33. Sales, Administrative & General Expenses





Million Rls Million Rls Million Rls Million Rls Salary, Wage & Benefits

161,572 127,387 25,029 18,234

Insurance Premium (Employer Quota)

16,708 12,710 1,606 1,261

Provision for Employees’ Work Termination Benefit

19,612 24,259 2,958 2,200

Rent 5,131 7,110 - -

Repair & Maintenance of Assets

24,581 28,936 423 113

Sales & Advertisement Expenses

44,072 35,986 3,047 1,158

Depreciation of Assets 17,151 12,148 664 644

Doubtful Debts Expenses

4,218 8,173 - -

Trip & Mission Bonus 10,259 6,547 1,870 1,083

60

Petrochemical Holding Expenses

- - 10,468 -

Other 169,435 166,658 23,056 11,052

472,739 429,914 69,121 35,745

34. Net Other Operating Incomes & Expenses





Note

Million Rls Million Rls Million Rls Million Rls Goodwill Depreciation

13 (536,968) (532,491) - -

Unabsorbed Expenses in Production

(42,776) (20,070) - -

Profit (Loss) from Conversion of Operating Assets & Liabilities

8,169 (3,618) - -

Dividend, Participation Bonds & Banking Deposits

1,767 4,388 1,433 2,053

Increase (Decrease) in Investments Value

(22,379) 4,957

Profit of Selling Shares in Installments

39,322 9,480 39,322 9,480

Increase (Decrease) in Assets Value

34-1 9,606 (21,965) - -

Other 39,256 62,867 2,314 (3,988)

(504,002) (496,452) 43,069 7,545

34.1. Income from increase in assets value amounted to Rls9,606 million related to return of reflected provision in the previous year for value decrease of Construction Development Co. projects.

35. Financial Expenses





Million Rls Million Rls Million Rls Million Rls Profit of Received Facilities from Banks

688,254 569,308 104,881 141,302

61

Other 174,537 49,030 46,549 1,849

862,791 618,338 151,430 143,151

35.1. Other financial expenses mainly related to Rls46,234 million and Rls80,296 million commission of purchasing shares in installments expenses by Sepahan Cement companies and Ghadir Capital & Industry Development as well as refinance expense of Vasepary Sepehr Pars Co.

36. Net Other Non-operating Incomes & Expenses

Group Parent Company Year

Ended 21/12/2009

Year Ended

21/12/2008

Year Ended

21/12/2009

Year Ended

21/12/2008

Million Rls Million Rls Million Rls Million RlsProfit from Sales of Fixed Assets 7,987 144,996 - -Profit of Participation Bonds & Baking Investment Deposits

58,84666,320 - -

Dividend of Companies 33,581 28,863 - -Adjustment of Investments Value 32,977 178,667 - -Profit from Sales of Investments - 1,014 - -Loss from Foreign Exchange of Non-operating Assets & Liabilities

(15,145)(22,193) (9,567) (16,608)

Other 5,586 828 - 890

123,832 398,495 (9,567) (15,718)

37. Prior Years' Adjustments

37.1. The prior years' adjustments related to amending errors of the previous years are as follows:

Group Year Ended 21/12/2009


Million Rls Million Rls A) Parent Company Expense of Financial Facilities Received by E’etezad Ghadir Co.

(4,700)(32,377)

Profit (Loss) from Selling Shares (57,325) 111,263Amending the Balance of Dividend Receivable (1,187) (14,823)Adjustment of Tax Provision of the Previous Years

(4,513)(5,440)

Amending Cost Price of Long-term Investments - 17,883Other (3,179) 2,032 (70,904) 78,538B) Subsidiary Companies Adjustment of Tax Provision of the Previous Years

(151,234)(178,375)

Amendment of Tax Prepayment 122,102 122,102

62

Amendment of Financial Expenses (13,979) (13,979)Amendment of the Balance of Ayandeh Saz Fund Account

(9,946)(9,946)

Amendment of the Balance of Investment in Affiliated Companies

-33,426

Retained Difference of Foreign Exchange Conversion

-(27,663)

Dividend Income - 30,385Payable Dues - (1,447)Other (4,617) (29,554) (57,674) (75,051) (128,578) 3,487

37.2. In order to presenting suitable outlook from financial situation and operation results, all relative comparative items in comparative financial statements have been amended and revised. Therefore, some comparative items are not same as financial statements of the previous years.

38. Reconciliation Statement of Operating Profit The reconciliation statement of operating profit with net cash inflow from operating activities is as follows:

Group Parent Company Year

Ended 21/12/2009

Year Ended

21/12/2008

Year Ended

21/12/2009

Year Ended

21/12/2008

Million Rls Million Rls Million Rls Million Rls Operating Profit 3,013,076 2,939,790 3,502,491 3,326,757Depreciation of Fixed Tangible Assets

177,785 177,425 664 644

Goodwill Depreciation 536,968 532,491 - -Net Increase (Decrease) in Provision for Employees’ Work Termination Benefits

(46,042) 105,912 804 463

Decrease in Short-term Investments

51,153 114,907

Increase in Operating Accounts Receivable

(4,579,850) (2,800,809) (2,057,628) (2,544,066)

Decrease (Increase) in Inventory 642,068 (429,521) - -Decrease (Increase) in Orders & Prepayments

(766,259) (145,707) (1,533) 857

Increase in Long-term Investments

(370,961) (550,058)

Increase (Decrease) in Operating Accounts Payable

69,872 291,816 (711,808) 39,173

Increase (Decrease) in Advances Received

307,354 (26,109) 83,087 -

Dividend Received from Affiliated Companies

1,425,525 1,223,375

Other Incomes & Expenses 388,308 1,478,692 (54,956) (17,481)

63

1,168,805 3,347,355 441,313 371,196

39. Non-cash Transactions Non-cash transactions related to the Parent Company and for transfer of building and debts of subsidiary companies to Armed Forces Social Security Organization (Sata) and Sata Investment Co. in front of dividend payable to them.

41. Commitments & Contingent Liabilities

41.1. At the date of the balance sheet, the contingent liabilities which are subject of Article 235 of the Amended Commercial Code passed in March 1969 were as follows:

Group Parent Company Note

Million Rls Million Rls Granted Guarantee to Banks for Received Loans

41-1-1 22,175,194 12,786,308

Other Granted Facilities 454,161 22,629,355 12,786,308

41.1.1. Granted guarantee by the Parent Company to banks related to loan guarantee of the Group’s companies. 41.2. Capital Commitments Capital commitments of the Group companies are as follows:

Company Amount – Million Rls

Parent Company – Committed Capital of Marjan Petrochemical Co.

11,050

Sepahan Cement – Completion of Product of 3,300 Tons/Day of Clinker Project

107,273

Shargh Cement – Completion of Production Line Unit 4 100,000Other Companies 1,611 219,934

42. Transactions with the Third Parties

42.1) Group transactions with the third parties (except transactions of the Parent Company with Group companies which have been eliminated through process of preparation of the consolidated financial statements) during the reported year is as follows:

64

Transaction Amount

Debt (Credit) Balance at the End of the Year

Name Type of

Relationship Transaction Description

Million Rls Million Rls Iran Refractory Products

Common Board

Member

Purchase of Refractory

Brick 4,669 -

Sata Investment

Common Board

Member

Sales of Building & Apartment

913,963 261,772

42.2. Transactions of the Parent Company with third parties subject of Article 129 of the Amended Commercial Code during the reported year is as follows:

Transaction Amount

Debt (Credit) Balance at the End of the Year

Name Type of

Relationship Transaction Description


Sata Investment

Common Board

Member

Sales of Building

310,963 (15,000)

43. Events Occurred after the Date of Balance Sheet From the date of balance sheet to the date these financial statements were released, no event that needed to be disclosed in financial statements has occurred.

44. Retained Earnings at the End of the Year Allocation of retained earnings at the end of the year in the following items postponed to ratification of Ordinary General Assembly of the shareholders:

Amount – Million Rls

Legal Duties

Distribution of at Least 10% Net Profit of the Year Ended 21/12/2009 According to Article 90 of the Amendment of Commercial Code

334,149

Board of Directors’ Suggestion

Proposed Dividend of the Board of Directors

1,518,750

anualreports-90

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