Independent Auditor & Legal Inspectors Report to the Ordinary General Shareholders Assembly of Ghadir Investment Co.

(Public P.S.)

1. Groups and Ghadir Investment Co. (Public P.S.) consolidated balance sheets and Groups 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 companys 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

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 Companys 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

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 Companys 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.

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 Directors report on Group and the Companys 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

Ghadir Investment Co. (Public Joint Stock) Consolidated Balance Sheet As at December 21st, 2009
21/12/2009 Million Rls Current Assets: Cash Short-term Investments Trade Accounts & Notes Receivable Other Accounts & Notes Receivable Inventory Orders & Prepayments Total Current Assets Non-current Assets: Tangible Fixed Assets Intangible Assets Goodwill Long-term Investments in Affiliated Companies Other Long-term Investments Other Assets Total Non-current Assets 5 6 7 8 9 10 523,682 1,074,140 8,040,317 598,359 2,450,664 1,264,174 13,951,336 (Revised) 21/12/2008 Million Rls 325,494 1,274,600 4,674,787 478,511 2,782,013 497,915 10,042,320 21/12/2009 Million Rls Current Liabilities: Trade Accounts & Notes Payable Other Accounts & Notes Payable Advances Received Tax Provision Payable Dividend Financial Facilities Received Total Current Liabilities Non-current Liabilities: Long-term Accounts & Notes Payable Long-term Financial Facilities Received Provision for Employees Work Termination Benefits Total Non-current Liabilities Total Liabilities 16 17 18 19 20 21 1,631,755 1,194,961 778,306 442,539 2,540,800 4,116,379 10,704,740 158,397 4,673,012 168,898 5,000,307 15,705,047 (Revised) 21/12/2008 Million Rls 990,013 1,127,996 470,952 453,452 1,853,890 3,403,963 8,300,266 186,269 3,050,484 214,940 3,451,693 11,751,959

Assets

Note

Liabilities & Shareholders' Equity

Note

11 12 13 14 14 15

5,032,785 77,514 3,387,778 4,001,978 5,213,179 3,230,239 20,943,473

4,387,206 69,971 3,879,908 2,567,280 5,989,118 2,453,103 19,346,586

22 21 23

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

24

6,075,000

6,075,000

Assets

Note

21/12/2009 Million Rls

(Revised) 21/12/2008 Million Rls

Liabilities & Shareholders' Equity Shares of the Parent Company in Ownership of Subsidiary Companies Legal Reserve Capital Reserve Other Reserves Difference in Retained Foreign Exchange Retained Profit Total Shareholders Equity of Parent Company Minority Interest Total Shareholders Equity Total Liabilities & Shareholders Equity

Note 24 25 26 27 28 29

21/12/2009 Million Rls (64,229) 819,383 4,425,276 301,994 40,401 4,380,382 15,978,207 3,211,555 19,189,762 34,894,809

(Revised) 21/12/2008 Million Rls (86,126) 805,654 4,303,479 318,953 38,965 3,368,907 14,824,832 2,812,115 17,636,947 9,388,906

Total Assets

34,894,809

29,388,906

Accompanying notes are an integral part of these financial statements.

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 Million Rls 7,034,139 (4,254,332) 2,779,807 1,086,349 (429,914) (496,452) (976,741) 3,031,076 35 36 (862,791) 123,832 (738,959) Profit before Calculating Group's Share from Profit of Affiliated Companies Group's Share from Profit of Affiliated Companies Profit before Tax Tax Net Profit Minority Interest from Net Profit EPS (Earnings Per Share) Rls (926,366) 2,939,790 (618,338) 398,495 (219,843)

Note

For the Year Ended December 21st, 2009 Million Rls Million Rls 8,003,745 (4,496,807) 3,506,938

Net Sales & Income from Services Rendered Cost Price of Goods Sold & Services Rendered Gross Profit Income from Operating Investments Sales, Administrative & General Expenses Net Other Operating Incomes & Expenses Operating Profit Financial Expenses Net Other Non-operating Incomes & Expenses

30 31

32 33 34 (472,739) (504,002)

482,879

2,274,117

2,719,947

14

1,399,006 3,673,123 (229,946) 3,443,177 750,361 443

1,537,611 4,257,558 (179,556) 4,078,002 767,864 545

Statement of Consolidated Retained Profit (Loss) Net Profit Retained Earnings at the beginning of the Fiscal Year Prior Years Adjustments Retained Earnings at the beginning of the Year Adjusted 3,443,177 4,301,500 37 (128,578) 4,172,922 4,078,002 1,874,065 3,487 1,877,552

Note

For the Year Ended December 21st, 2009 Million Rls Million Rls 7,616,099

Allocable Profit Profit Allocation: Legal Reserve Capital Reserve Other Reserves Ratified Dividend

(Revised) For the Year Ended December 21st, 2008 Million Rls 5,955,554 (104,674) (328,253) (1,349,705) (1,782,632) 4,172,922 804,015 3,368,907

25 26 27

(55,159) (121,797) (70) (2,133,120) (2,310,146) 5,305,953

Minority Interest from Retained Earnings Retained Profit at the End of the Year

29

925,571 4,380,382

Accompanying notes are an integral part of these financial statements.

Ghadir Investment Co. (Public Joint Stock) Consolidated Comprehensive Profit (Loss) Statement For the Year Ended December 21st, 2009
For the Year Ended December 21st, 2009 Million Rls 3,443,177 28 1,436 3,444,613 (128,578) 3,316,035 788,839 (Revised) For the Year Ended December 21st, 2008 Million Rls 4,078,002 11,303 4,089,305 3,487 4,092,792 745,376

Note

Net Profit Exchange Difference of Assets & Liabilities of Independent Foreign Unit Comprehensive Profit of the Fiscal Year Prior Years Adjustments Recognized Comprehensive Profit from the Prior Year Report Minority Interest from Comprehensive Profit of the Fiscal Year

37

Accompanying notes are an integral part of these financial statements.

Ghadir Investment Co. (Public Joint Stock) Consolidated Cash Flows Statement For the Year Ended December 21st, 2009
For the Year Ended December 21st, 2009 Million Rls Operating Activities: Net Cash Inflow from Operating Activities Return on Investments & Paid Interest for Financing: Received Profit of Banking Deposits & Other Short-term & Long-term Investments Profit Paid for Financial Facilities Dividend Paid to Minority Shareholders Dividend Paid to Shareholders of the Parent Company Net Cash Outflow from Return on Investments & Paid Profit for Financing Income Tax: Income Tax Paid Investment Activities: Funds Paid for Purchasing Tangible Fixed Assets Funds Paid for Acquiring Long-term & Short-term Investments Funds Earned from Sales of Tangible Fixed Assets Funds Paid for Acquiring Intangible Assets Funds Paid for Acquiring Other Assets Net Cash Outflow from Investment Activities Net Cash Outflow before Financing Activities Financing Activities: Decrease (Increase) in Shares of the Parent Company in Ownership of the Subsidiary Companies Financial Facilities Received Payment of the Original of the Financial Facilities Net Cash Inflow from Financing Activities 38 1,168,805 (Revised) For the Year Ended December 21st, 2008 Million Rls 3,347,355

Note

92,427 (688,254) (598,169) (237,077)

95,184 (569,308) (348,464) (84,965)

(1,431,073)

(907,553)

(240,860)

(125,556)

(1,162,435) (496,678) 11,130 (7,543) (1,655,526) (2,158,654)

(1,507,305) (1,677,587) 209,364 (42,170) (38,497) (3,056,195) (741,949)

21,897 3,743,386 (1,408,441) 2,356,842

(64,786) 2,514,092 (1,786,040) 663,266

10

Note

For the Year Ended December 21st, 2009 Million Rls

(Revised) For the Year Ended December 21st, 2008 Million Rls (78,683) 404,177 325,494 178,612

Net Increase (Decrease) in Cash Cash Balance at the beginning of the Year Cash Balance at the End of the Year Non-cash Transactions 39

198,188 325,494 523,682 610,963

Accompanying notes are an integral part of these financial statements.

11

Ghadir Investment Co. (Public Joint Stock) Consolidated Balance Sheet As at December 21st, 2009
21/12/2009 Million Rls Current Assets: Cash Short-term Investments Trade Accounts & Notes Receivable Other Accounts & Notes Receivable Prepayments Total Current Assets Non-current Assets: Fixed Tangible Assets Intangible Assets Long-term Investments Other Assets Total Non-current Assets 5 6 7 8 10 99,577 130,028 6,522,088 231,903 112,636 7,096,232 11 12 14 15 4,391 702 10,389,342 2,628,313 13,022,748 (Revised) 21/12/2008 Million Rls 64,831 191,682 4,518,535 240,626 111,104 5,126,778 6,129 520 10,018,382 2,555,082 12,580,113 21/12/2009 Million Rls Current Liabilities: Trade Accounts & Notes Payable Other Accounts & Notes Payable Advances Received Tax Provision Payable Dividend Financial Facilities Received Total Current Liabilities Non-current Liabilities: Financial Facilities Received - Long-term Provision for Employees Work Termination Benefits Total Non-current Liabilities Total Liabilities Shareholders Equity: Capital (6,075 million of Rls1000 Shares, Fully Paid) Legal Reserve Capital Reserve Other Reserves Retained Earnings Total Shareholders Equity Total Liabilities & Shareholders Equity 16 17 18 19 20 21 23,007 83,087 2,001,318 511,137 2,618,549 170,323 3,405 173,728 2,792,277 6,075,000 607,500 4,425,276 281,846 5,937,081 17,326,703 20,118,980 (Revised) 21/12/2008 Million Rls 7,757 158,243 1,330,609 435,152 1,931,761 268,569 2,602 271,171 2,202,932 6,075,000 67,500 4,303,479 281,846 4,236,134 15,503,959 17,706,891

Assets

Note

Liabilities & Shareholders' Equity

Note

21 23

24 25 26 27

Total Assets

20,118,980

17,706,891

Accompanying notes are an integral part of these financial statements.

12

Ghadir Investment Co. (Public Joint Stock) Profit (Loss) Statement For the Year Ended December 21st, 2009
(Revised) For the Year Ended December 21st, 2008 Million Rls 3,354,957 (35,745) 7,545 (26,052) 3,502,491 35 36 (151,430) (9,567) (160,997) 3,341,494 3,341,494 550 Flow of Retained Profit (Loss) Account Net Profit Retained Earnings at the beginning of the Fiscal Year Prior Years Adjustments Retained Earnings at the beginning of the Year Adjusted Allocable Profit Profit Allocation: Legal Reserve Capital Reserve Ratified Dividend Retained Profit at the End of the Year 3,341,494 4,307,038 37 (70,904) 4,236,134 7,577,628 25 26 (121,797) (1,518,750) (1,640,547) 5,937,081 3,167,888 2,188,048 78,538 2,266,586 5,434,474 (19,587) (328,253) (850,500) (1,198,340) 4,236,134 (28,200) 3,326,757 (143,151) (15,718) (158,869) 3,167,888 3,167,888 521

Note

For the Year Ended December 21 , 2009 Million Rls Million Rls 3,528,543

st

Income from Investments Sales, Administrative & General Expenses Net Other Operating Incomes & Expenses Operating Profit Financial Expenses Net Other Non-operating Incomes & Expenses Profit before Tax Tax Net Profit Earnings Per Share (EPS) Rls

32 33 34 (69,121) 43,069

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.

13

Ghadir Investment Co. (Public Joint Stock) Cash Flows Statement For the Year Ended December 21st, 2009
For the Year Ended December 21st, 2009 Million Rls Operating Activities: Net Cash Inflow from Operating Activities Return on Investments & Paid Interest for Financing: Profit Paid for Financial Facilities Dividend Paid to Shareholders of the Company Net Cash Outflow from Return on Investments & Profit Paid for Financing Investment Activities: Funds Paid for Purchasing Tangible Fixed Assets Funds Paid for Acquiring Intangible Assets Net Cash Outflow from Investment Activities Net Cash Inflow before Financing Activities Financing Activities: Financial Facilities Received Repayment of the Original Financial Facilities Received Net Cash Outflow from Financing Activities Net Increase in Cash Cash Balance at the beginning of the Year Cash Balance at the End of the Year Non-cash Transactions 38 441,313 (Revised) For the Year Ended December 21st, 2008 Million Rls 371,196

Note

(104,881) (237,077)

(141,302) (84,965)

(341,958)

(226,267)

(87) (112) (119) 99,156

(1,479) (50) (1,529) 143,400

56,616 (121,026) (64,410) 34,746 64,831 99,577 39 610,963

234,146 (365,062) (130,916) 12,484 52,347 64,831 -

Accompanying notes are an integral part of these financial statements.

14

Ghadir Investment Co. (Public Joint Stock) Notes to the Financial Statements For the Year Ended December 21st, 2009

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

15

G) Execution of all legal operations which are useful for realization of the Companys 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 21/12/2009 Person Permanent Employees Interim & Contracting Employees 2,368 1,990 21/12/2008 Person 2,901 2,224 Parent Company 21/12/2009 21/12/2008 Person Person 23 22 18 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

16

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 Evaluation Method: Long-term Investment: Investment in Subsidiary Companies which are Liable to Consolidation Investment in Affiliated Companies Cost Price (Minus the Reserve for Perpetual Reduction in Investment Value) Cost Price (Minus the Reserve for Perpetual Reduction in Investment Value) Cost Price (Minus the Reserve for Perpetual Reduction in Investment Value) Parent Company

Liable to Consolidation

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

Other Long-term Investments

Current Investments: Investments Rapidly Transacted in the Market Other Current Investments Income Recognition Method: Least Cost Price and Net Sales Value of Total Investments Least Cost Price and Net Sales Value of Each Investments Least Cost Price and Net Sales Value of Total Investments Least Cost Price and Net Sales Value of Each Investments

17

Consolidated of Group

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

Investment in Liable to Consolidation Subsidiary Companies

Liable to Consolidation

Investment in Subsidiary Companies Excluded from 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 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)

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 Work in Progress Finished Goods Spare Parts Weighted Average Annual Weighted Average Annual Weighted Average 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

18

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 Building Installments Machineries Furniture Tools Motor Vehicles Depreciation Rate 7%,8% & 10% 12%, 13% & 15 years 10%, 10 & 15 Years 10 Years 4 Years 25%, 30% & 35% Method of Depreciation Declining Declining & Straight Line Declining & Straight Line Straight Line Straight Line 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 nonmonetary 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.

19

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-toconsolidation 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 companys 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 21/12/2009 21/12/2008 Million Rls Million Rls 5,758 3,077 496,065 277,009 2,774 2,652 435 18,650 0 523,682 101 42,364 291 325,494 Parent Company 21/12/2009 21/12/2008 Million Rls Million Rls 233 202 99,064 64,629 28 99,577 64,831

Note Cash in Hand Bank Balance Petty Cashes Notes under Collection Short-term Banking Deposits Securities

5-1

20

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

Note Investments Rapidly Transacted in the Market: Shares of Rapidly Transacted Companies in the Market Participation Bonds Investment in Shares of Other Companies Bonds of Investment Fund Investment Deposits held with Banks Plans, Projects & Properties Expensive Metals (Platinum)

6-1

631,090

663,275

88,646

112,351

6-2

90,804 721,894

117,140 780,415 92,270

88,646 15,008

112,351 65,456

6-3

68,360

790,254 22,899

872,685 -

103,654 12,499

177,807 -

242,282 4,830 13,875 1,074,140

338,552 49,488 13,875 1,274,600

13,875 130,028

13,875 191,682

21

6.1. Group investments in shares of rapidly transacted companies in the market describes as follows:
21/12/2009 Investee Company No. Cost Price Million Rls Accepted in TSE Oroumieh Cement Behbahan Cement Fan Avaran Petrochemical Pars Vegetable Oil Doroud Cement Saipa Bank Pasargad Iran Refractory Products Ardebil Cement Khazar Cement Boroujerd Textile Hegmatan Cement Esfahan Mobarakeh Steel Kalsimin Esfahan Oil Refinery Esfahan Petrochemical Mazandaran Textile Khark Petrochemical Chador Malou Saipa Diesel Informatics Services Pension Investment Omid Investment Arak Petrochemical Other Provision for Value Decrease 12,129,091 2,816,773 3,544,737 19,253,243 3,067,453 9,948,571 64,877,692 2,849,923 713,852 25,073,416 14,685,612 12,757,708 3,774,191 268,068 2,710,000 1,989,210 12,825,214 717,121 250,000 4,538,618 477,825 1,588,851 2,037,09 484,000 79,624 64,697 24,938 48,929 39,645 17,839 64,877 11,295 22,152 85,631 19,303 12,768 11,304 2,686 18,165 10,302 13,282 10,753 2,677 12,481 6,650 2,944 6,663 3,842 158,438 751,885 (120,795) 631,090 660,697 Market Value Million Rls 53,465 33,017 16,559 28,013 22,627 12,963 97,608 5,492 14,300 59,241 10,574 30,044 6,433 1,969 15,255 4,653 10,311 8,279 2,120 4,634 6,087 2,415 6,087 1,103 207,499 660,697 21/12/2008 Cost Price Million Rls 76,634 61,469 57,254 49,701 37,289 26,883 62,412 22,678 22,152 21,544 19,303 19,220 17,014 16,779 108 14,538 13,283 12,726 12,682 10,939 8,343 7,052 7,986 5,054 184,057 787,100 (123,825) 663,275

22

6.1.1. Investment of the Parent Company in shares of the listed companies includes the following items:
21/12/2009 Cost Price Million Rls 48,911 13,272 19,303 6,760 17,839 6,650 2,565 2,420 5,112 3,842 26,011 152,685 Provision for Value Decrease (64,039) 88,646 21/12/2008 Cost Price Million Rls 48,911 13,272 19,33 6,760 10,042 6,606 2,565 2,420 4,417 3,781 11,383 28,138 18,792 176,390 (64,039) 112,351

Investee Company Pars Vegetable Oil Mazandaran Textile Boroujerd Textile Iran Poplin Saipa Informatics Services Saipa Diesel Behpak Industrial Khark Petrochemical Arak Petrochemical Iran Refractory Products Fan Avaran Petrochemical Other

No. 19,245,715 12,805,214 14,685,612 2,899,324 9,948,571 477,825 455,132 568,949 320,500 484,000

Market Value Million Rls 28,002 10,295 10,574 2,885 12,963 6,036 467 619 3,744 1,103 21,003 97,691 97,691

6.2. Investment in Groups participation bonds based on investee companies is as follows:

21/12/2009 Million Rls 45,750 8,500 17,260 19,185 109 90,804 21/12/2008 Million Rls 31,450 15,379 11,670 40,000 15,245 3,396 117,140

Ghadir Industry & Capital Development Co. Shargh Cement Co. Kordestan Cement Co. Eetezad Ghadir Co. Ghadir Trade & Management Services Co. Construction International Group Companies Other

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.

23

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

Percent of Participation A) Parent Company: Sistan va Balouchestan Development Investment Zagros Investment Semnan Carbonate Sodium Sulfurin Other B) Eetezad Ghadir Investment Co.: Pars Aryan Investment Omran Ardebil Other C) Ghadir Industry & Capital Development Co.: Pars Aryan Investment D) Other Group Companies No. of Shares 21/12/2009 Million Rls 21/12/2008 Million Rls

12 7 4

4,075,472 5,082,433

4,075 5,212 5,721 15,008

4,075 5,212 10,395 40,141 5,633 65,456

12,480,000 4,000,000

14,976 4,000 13,816 32,792

12,584 4,000 9,680 26,264

19,375,000

19,375 1,185 68,360

550 92,270

24

7. Trade Accounts & Notes Receivable

Group 21/12/2009 21/12/2008 Million Rls Million Rls 2,123,314 2,760,912 2,717,894 275,512 1,713,002 1,539,819 532,356 116,532 Parent Company 21/12/2009 21/12/2008 Million Rls Million Rls 310,290 3,345,521 2,638,983 225,646 2,068,005 1,488,667 -

Note Notes Receivable Subsidiary Companies Affiliated Companies Customers Rials Customers Foreign Exchange Balance of Share Sales Installments Other Investee Companies Other Provision for Doubtful Debts 7-1 7-2 7-2

56,632 7-2 230,579 721 8,165,564 (125,247) 8,040,317

804,295 77,153 4,798,789 (124,002) 4,674,787

56,632 170,662 6,522,088 6,522,088

15,632 720,585 4,518,535 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 Groups 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.

25

7.2. Debt balance of the Parent Company from subsidiary, affiliated and other investee companies is as follows:
Parent Company 21/12/2009 Accounts inTotal between Million Rls Million Rls 103,973 12,357 274,300 164,663 398,000 944,300 73,380 154,800 26,879 718,793 154,357 73,293 257,868 103,099 274,300 1,789 390,630 3,345,521

21/12/2008 Total Million Rls 70,472 237,000 446,500 75,114 48,000 37,621 308,700 42,786 24,977 701,250 70,281 5,304 2,068,005

Dividend Million Rls Subsidiary Companies: Almasader Jabal Ali Ghadir Trade & Industrial Zarrin Persia Motojen Kalaye Sepehr Pars Shargh Cement Ghadir Capital & Industry Development Ghadir Management Services Eetezad Ghadir Investment Construction Development International Sepahan Cement Alvand Ghadir Development Investment Other Affiliated Companies: Behshahr Industries Development Pardis Petrochemical (Ghadir Urea & Ammoniac) Zagros Petrochemical Bahman Group Kavir Tire Iran Alloy Steel Other Other Companies: Maroun Petrochemical Fan Avaran Petrochemical 164,663 398,000 944,300 73,380 154,800 26,879 614,820 142,000 73,293 257,868 103,099 1,789 2,954,891

35,631 1,512,800 749,600 107,732 64,864 129,500 38,856 2,638,983

35,631 1,512,800 749,600 107,732 64,864 129,500 38,856 2,638,983

46,718 1,164,000

81,055 40,455 113,208 43,231 1,488,667

119,000 11,988

119,000 11,988 5,349

26

Dividend Million Rls 3,611 36,063 170,662

Boroujerd Textile Zagros Petrochemical Other

Parent Company 21/12/2009 Accounts inTotal between Million Rls Million Rls 3,611 0 36,063 170,662

21/12/2008 Total Million Rls 2,876 680,000 32,360 720,585

8. Other Accounts & Notes Receivable

Group 21/12/2009 21/12/2008 Million Rls Million Rls 40,668 14,076 64,355 59,969 8-1 8-2 122,598 5,280 25,311 22,970 44,880 24,511 43,824 Parent Company 21/12/2009 21/12/2008 Million Rls Million Rls 33,773 2,700 9,097 4,340 111,944 5,280 25,311 143,551 44,880 24,511 -

Note Notes Receivable Personnel Debts Group Companies Mr. Khayyam Bashi National Petrochemical Industries Co. Mazandaran Textile Co. Deposits Receivable Dividend, Participation Bonds & Banking Deposits Other Provision for Doubtful Debts

132,441 219,430 633,053 (34,694) 598,359

98,908 235,268 521,436 (33,925) 487,511

46,636 232,041 (138) 231,903

20,782 240,764 (138) 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.

27

9. Inventory
Group Note Finished Goods Work in Progress Raw Materials, Packaging & Construction Equipments Spare Parts Projects under Construction Constructed Units Properties Other Provision for Value Decrease of Inventories 21/12/2009 Million Rls 112,307 73,443 319,429 9-2 9-3 9-4 350,577 1,154,330 118,784 273,968 49,568 2,452,406 (1,742) 2,450,664 21/12/2008 Million Rls 195,670 78,082 413,795 279,902 1,496,832 106,881 51,686 175,627 2,798,475 (165,462) 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, Saadi 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.

28

10. Orders & Prepayments

Note Foreign Orders: Raw Materials Spare Parts Other Prepayments: Purchase of Raw Materials & Construction Equipments Tax Insurance of Assets Automobile Manufacturing Companies Purchase of Goods & Services Middle East Bank Other Group 21/12/2009 21/12/2008 Million Rls Million Rls 18,309 6,894 86,960 112,163 28,704 9,940 26,274 64,918 Parent Company 21/12/2009 21/12/2008 Million Rls Million Rls -

10-1

10-2 10-3

24,900 236,656 2,219

48,311 233,982 3,656 4,380

110,291 -

110,291 -

10-4

592,748

10-5 10-6

146,843 112,081 36,564 1,152,011 1,264,174

113,414 29,254 432,997 497,915

2,345 112,636 112,636

813 111,104 111,104

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

29

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.

30

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 Assets Added during the Fiscal Year 9,721 39,704 6,739 28,926 5,162 5,960 2,887 99,099 950,976 90,680 21,680 1,162,435 Assets Sold during the Fiscal Year (0) (478) (2,616) (1,029) (248) (2,000) (6,371) (1) (6,372) Accumulated Depreciation Million Rls Accumulated Depreciation of Sold Assets (216) (1,284) (637) (195) (729) (167) (3,228) Book Value Million Rls

Balance at 21/12/2008

Transfers & Adjustments

Balance at 21/12/2009

Balance at 21/12/2008

Depreciation of the Year

Transfers & Adjustments

Balance at 21/12/2009

Balance at 21/12/2009

Balance at 21/12/2008

Land Building & Installments Motor Vehicles Machineries Tools Other Properties Furniture & Equipments Total Assets under Completion Capital Orders & Prepayments Capital Items in Inventory Total

89,188 833,055 101,167 1,756,729 50,517 70,969 78,070 2,979,695 1,679,595 297,738 328,637 5,285,665

61,077 (6,381) (3,089) (147,729) (1,925) 4,036 (435) (94,446) 13,594 (202,969) (120,816) (404,637)

159,986 865,901 102,201 1,636,897 53,507 78,965 80,520 2,977,977 2,644,163 185,450 229,500 6,037,090

198,496 58,264 528,726 25,771 52,588 34,615 898,460

55,791 7,478 95,323 5,504 6,728 6,961 177,785

(13,808) (2,431) (47,593) (3,105) (20,837) 19,063 (68,711)

240,263 62,027 575,819 27,975 37,750 60,471 (68,711)

159,986 625,638 40,174 1,061,078 25,532 41,215 20,049 1,973,672 2,644,168 185,450 229,500

89,188 634,559 42,902 1,228,003 24,746 18,382 43,456 2,081,236 1,679,595 297,738 328,637 4,387,206

898,460

177,785

(3,228)

(68,711)

1,004,305

5,032,785

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

31

11.2. Table of cost price and accumulated depreciation of tangible fixed assets of the Parent Company is as follows:
Cost Price Million Rls Assets Added during the Fiscal Year 34 53 87 87 (1) (1,159) (1,160) Accumulated Depreciation Million Rls Book Value Million Rls

Balance at 21/12/2008

Transfers & Adjustments

Balance at 21/12/2009

Balance at 21/12/2008

Depreciation of the Year

Transfers & Adjustments

Balance at 21/12/2009

Balance at 21/12/2009

Balance at 21/12/2008

Land, Building & Installments Furniture & Equipments Electronic Calculation Machines Motor Vehicles Total Capital Prepayments Total

5,921 1,768 1,993 990 10,672 1,159 11,831

(1)

5,921 1,802 2,044 990 10,757 10,757

2,569 1,028 1,303 802 5,702 5,702

235 179 203 47 664 664

2,804 1,207 1,506 849 6,366 6,366

3,117 595 538 141 4,391 4,391

3,393 740 690 187 4,970 1,159 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.

32

11.4. Balance of assets under completion and capital orders & prepayments based on the Group companies is as follows:
21/12/2009 Assets Capital under Orders & Completion Prepayments Million Rls Million Rls 1,860,575 40,872 684,817 67,224 19,710 146 2,283 1,321 8,087 2,644,163 52,329 13,436 59,923 11,639 7,251 185,450 21/12/2008 Assets Capital under Orders & Completion Prepayments Million Rls Million Rls 1,386,181 12,408 203,326 67,224 16,461 146 2,472 2,016 1,471 298 1,679,595 177,919 25,240 54,207 11,505 13,093 2,208 1,158 297,738

Note

Shargh Cement Sepahan Cement South Aluminum Kordestan Cement Shahid Bahonar Board Construction Motojen Abgineh Other

11-4-1 11-4-2 11-4-3

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. Groups 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.

33

12. Intangible Assets

Group 21/12/2009 Million Rls Royalty of using Public Services Right of Business & Changing Usage of the Building Technical Know-how Financial Software, etc. 68,463 21/12/2008 Million Rls 64,792 Parent Company 21/12/2009 21/12/2008 Million Rls Million Rls 702 520

209

209

4,057 4,785 77,814

4,152 818 69,971

702

520

13. Goodwill
Note Cost Price: Balance at the beginning of the Year Acquired Goodwill during the Year Abandoned Goodwill during the Year Transfer from Goodwill due to Acquiring Affiliated Companies Balance at the End of the Year Less: Accumulated Depreciation Balance at the beginning of the Year Depreciation of the Year Adjustments Goodwill Depreciation of Abandoned Share during the Year Transfer from Goodwill Accumulated Depreciation due to Acquiring Affiliated Companies Balance at the End of the Year Provision for Value Decrease 21/12/2009 Million Rls 5,425,181 13-1 13-2 14,686 (20,968) 0 5,418,899 21/12/2008 Million Rls 3,118,164 559,627 (80,464 1,827,854 5,425,181

1,511,482 536,968 (17,329)

675,035 532,491 6,054 (35,043

332,945 2,031,121 3,387,778 3,387,778 1,511,482 3,913,699 (33,790 3,879,908

13-3

34

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 Million Rls Balance at the beginning of the Year Additions during the Year Transfer from Other Long-term Investments Abandoned during the Year Quota from Profit of Affiliated Companies Dividend Received & Receivable Goodwill Depreciation 2,324,457 14-1-2 14-1-3 14-1-4 14-1-1 153,415 816,000 (99,821) 1,490,643 (1,425,525) 3,259,169 Quota from Net Total Assets Million Rls 2,567,280 223,842 1,333,719 (96,344) 1,490,643 (1,425,525) (91,637) 4,001,978

Note

Goodwill Million Rls 242,823 70,427 517,719 3,477 (91,637) 742,809

14.1.1. Groups quota from profit of affiliated companies is as follows:

Amount Million Rls 1,325,928 164,715 1,490,643 (91,637)

Quota from Profit of Affiliated Companies Quota from Profit of Zagros Petrochemical from Acquiring Date until Remarkable Influence Date Goodwill Depreciation

35

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 Cost Price Million Rls 298,653 222,881 72,109 84,524 24,117 139,193 841,477 21/12/2008 Cost Price Million Rls 298,653 220,174 130,319 83,350 22,629 62,340 817,465

No. of Shares Arak Petrochemical Karoun Cement Khazar Cement Darab Cement Hegmatan Cement Other 48,144,041 26,435,236 15,659,390 13,700,010 5,007,563

Market Value Million Rls 109,672 206,369 30,916 77,021 11,451 117,678 553,107

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

Group 21/12/2009 Million Rls 751,790 689,543 119,439 79,481 80,000 35,000 170,000 85,622

Maroun Petrochemical Khouzestan Cement Amir Kabir Petrochemical Pars Aryan Investment Novin Capital Provision Gharb Petrochemical Morvarid Petrochemical Zagros Petrochemical Other

No. of Shares 280,000,000 155,000,359 43,670,427 79,481,250 80,000,000 100,000,000 170,000,000

21/12/2008 Million Rls 751,790 654,543 119,439 92,204 80,000 35,000 170,000 1,333,719 120,737

36

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 Million Rls Pardis Petrochemical Ghadir Iranian Iron & Steel Project Morvarid Petrochemical Petrochemical Projects 14-1-81 1,073,745 44,000 85,000 1,202,745 21/12/2008 Million Rls 1,149,007 51,472 1,200,479

Note

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 abovementioned 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 Companys quota. 14.1.9. Other long-term investments related to Groups companies investments in properties and construction projects are as follows:
Note Almasader Jabal Ali Co. Construction Development International Group Other Companies 14-1-9-1 14-1-9-2 21/12/2009 Million Rls 784,217 332,061 22,825 1,139,103 21/12/2008 Million Rls 535,946 25,511 561,457

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 Other Companies Million Rls 21/12/2008 Accepted Other in TSE Companies Million Million Rls

Accepted in TSE Million

Total Million Rls

37

Rls Subsidiary Companies Affiliated Companies Other Companies Plans & Projects 1,205,480 702,178 192,741 3,672,952 2,144,032 1,269,214 1,202,745 2,100,399 8,288,943 4,878,432 2,846,210 1,461,955 1,202,745 10,389,342

Rls 1,141,269 655,484 112,685 3,666,498 653,290 2,588,677 1,200,479 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 Market Cost Price Cost Price Value Construction Development International Bahman Group Sepahan Cement Motojen Behshahr Industries Development Other 570,077 395,163 358,103 176,689 205,113 395,254 2,100,399 836,855 457,157 210,447 153,096 157,903 253,178 2,068,636 466,754 394,843 358,103 177,646 158,545 353,547 1,909,438

Other Companies Million Rls 21/12/2009 Ghadir Capital & Industry Development Zagros Petrochemical Pardis Petrochemical (Ghadir Urea & Ammoniac) Maroun Petrochemical Eetezad Ghadir Investment Sarouj Boushehr International Iran Alloy Steel Co. Amir Kabir Petrochemical Morvarid Petrochemical Novin Capital Provision Almasader Jabal Ali Ghadir Trade & Industrial Ghadir Iranian Iron & Steel Pars Aryan Investment Ghadir Management Services Kavir Tire Other 2,849,200 1,333,719 1,149,530 751,790 495,000 299,590 244,353 119,439 170,000 80,000 74,737 72,999 104,000 79,481 54,000 47,149 363,956 8,288,943 21/12/2008 2,849,200 1,333,719 1,149,517 751,790 495,000 299,590 147,984 119,439 170,000 80,000 74,737 72,999 104,000 66,234 54,000 50,746 289,989 8,108,944

38

14.3. Details of Groups subsidiary companies based on holding and direct investments of the Parent Company are as follows:
% of Investment Parent Group Company 100 100 76 76 76 99 66 80 100 -

Company Ghadir Management Services Bank Saderat Printing Shahid Bahonar Board Araz Gol Gonbad Golestan Wood Industries International Ghadir Trade Development International Kaspian Foulad Ghadir Trade KSP Co. Construction Development International ASP Baghmisheh Housing Behsan Pars (Nasr Construction) Azarbaijan Construction Waste Water Industry Development Sarpanah Fars Pars Sazeh Construction & Engineering Peyman Ghadir Consulting Engineers Kish Royaye Zendegi Sivan Rahsaz Tisa Kish

Location Iran Iran Iran Iran Iran Iran Iran United Arab Emirates Iran Iran Iran Iran Iran Iran Iran

Main Activity Financial & Consulting Services Printing Services Production of Chip Board Agricultural Products Wood Industries Trade Services Trade Services Trade Services Sell & Purchase of Land, Building & Investment Construction Operations Construction Operations Construction Operations Construction Operations Production of Concrete Pipes Providing Land & Consulting Construction Road Making & Construction Activities Technical Consulting & Engineering Services Construction Operations Road Making Operations Construction Operations

95 95 95 95 58 51 94

22 -

Iran

94

Iran

94

40

Iran Iran Iran

72 95 73 -

39

Company Development of Narenjestan Hotel & Building Sakht Beton Pre-fabricated Parts Motojen Momtaz Electric Payvar Andish Sepahan Cement Sepahan Cement Investments Shargh Cement Shargh Cement Products Shargh Coal Mines Direct Investments: Ghadir Capital & Industry Development Kordestan Cement Daryaban Jonoub Eetezad Ghadir Investment Ghadir Trade & Industry Almasader Jabal Ali Karamad Systems South Aluminum Vasepary Sepehr Pars Azar Investment Day Investment Zarrin Persia Investment Alvand Ghadir Development Investment Arman Equipping & Resources Management Sepehr Iranian Insurance Services

Location Iran Iran Iran Iran Iran Iran Iran Iran Iran Iran

% of Investment Parent Group Company 73 93 53 42 53 33 33 29 29 29 52 11 6 -

Main Activity Construction Operations Production of Concrete Prefabricated Parts Production of Electrical Engines Production of Electrical Engines Parts Rendering Industrial Services Cement Production Investment, Sell & Purchase of Shares Cement Proiduction Production of Cement Production Exploitation of Mines

Iran Iran Iran Iran Iran Dubai Iran Iran Iran Iran Iran Iran Iran Iran Iran

100 52 100 100 100 100 100 51 80 33 51 95 100 100 100

100 100 99 100 100 98 51 80 1 1 95 98 98 98

Investment in Cement Industry & Other Industries Cement Production Marine Services Investment Investment & Trade Services Trade Services Designing Systems Aluminum Production Technical & Marketing Services Investment Investment Investment Investment Investment Insurance Services

40

14.4. Details of Groups affiliated companies are as follows:

% of Investment Parent Group Company 6 11 20 31 38 29 25 37 18 33 19 20 51 34 49 40 6 10 20 31 23 25 37 18 33 19 20 51 34 40

Location Behshahr Development Industries Bahman Production Group Shahid Ghazi Serum Making Iran Kish Card Ney Riz Cement Sarouj Boushehr Kerman Steel Iran Alloy Steel Kavir Tire Bank Saderat Brokerage Ghadir Automobile Leasing Iran Bearing Pardis Petrochemical Zagros Petrochemical Dashtestan Cement Ghadir Iranian Iron & Steel Iran Iran Iran Iran Iran Iran Iran Iran Iran Iran Iran Iran Iran Iran Iran Iran

Main Activity Investment, Sell & Purchase of Shares Automobile Production Production of Human & Animal Serums Credit Card Services Cement Production Cement Production Production of Steel Products Production of Alloy Steel Products Production of Automobile Tires Stock Brokerage Services Credit Services Production of Bearing Petrochemical Products Petrochemical Products Cement Production 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.

41

15. Other Assets

Note Long-term Portion of Accounts & Notes Receivable Long-term Portion of Debt from Group Companies Land & Properties Long-term Portion of Personnel Loan Other Group 21/12/2009 21/12/2008 Million Rls Million Rls 3,089,122 76,775 50,690 13,652 3,230,239 2,022,289 387,495 14,052 29,267 2,453,103 Parent Company 21/12/2009 21/12/2008 Million Rls Million Rls 175,511 2,429,370 13,000 10,432 2,628,313 112,744 2,429,338 13,000 2,555,082

15-1 15-2 15-3

15.1. Long-term portion of accounts and notes receivable based on Group companies is as follows:
Group 21/12/2009 21/12/2008 Million Rls Million Rls 175,511 112,744 866,014 23,205 2,019,105 5,287 3,089,122 725,259 16,462 1,167,824 2,022,289

Note Parent Company Construction Development International Group Motojen Vasepary Sepehr Pars Co. Daryaban Jonoub 7-1 15-1-1

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 Million Rls Million Rls 18,256 297,904 23,724 76,013

Note Vasepary Sepehr Pars Co. Construction Group Companies 15-3-1

42

Other Companies

34,795 76,775

13,578 387,495

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

Note Notes Payable Foreign Exchange Liabilities Sellers of Goods & Services Bank Saderat Iran Other 16-1 16-2 Group 21/12/2009 21/12/2008 Million Rls Million Rls 176,427 206,732 226,800 126,169 Parent Company 21/12/2009 21/12/2008 Million Rls Million Rls -

618,928

531,276

16-3

606,823 22,845 1,631,755

73,887 31,881 990,013

7,757 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 Saadi 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 Banks apartments in Tehran Tower and Rls568,616 million debt

43

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

17. Other Accounts & Notes Payable

Note Notes Payable Payable Insurance Premium Withholding Taxes Kharazmi Investment Current of Renters Payable Duties Payable Deposits Morvarid Petrochemical Provision for Payable Expenses Other 17-1 Group 21/12/2009 21/12/2008 Million Rls Million Rls 179,402 108,895 12,076 11,831 28,896 17-2 17-3 100,479 138,177 40,535 314,695 83,290 275,540 297,411 1,194,961 244,621 1,127,996 630 11,231 23,007 7,557 7,228 158,243 30,549 131,104 31,644 252,812 41,000 Parent Company 21/12/2009 21/12/2008 Million Rls Million Rls 11,146 145 10,705 90,694 914 41,000

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

Note Advances Received Group 21/12/2009 21/12/2008 Million Rls Million Rls 162,713 314,489 Parent Company 21/12/2009 21/12/2008 Million Rls Million Rls -

44

Rials Advances Received Foreign Exchange Group Companies Sales in Advance of Apartments

1,020

18-1

615,593 778,306

155,443 470,952

83,087 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 For the Year Ended 21/12/2009 21/12/2008 Million Rls Million Rls 453,452 256,683 229,947 171,092 151,233 (240,860) (125,556) 442,539 453,452

Balance at the beginning of the Year Tax Provision during the Year Adjustments of Tax Provision Paid during the Year Balance at the End of the Year

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 Declared Profit Declared Recognized Definite Paid Provision Balance 11,246 Fiscal Year Ended 21/12/2008 Million Rls Provision Balance 11,246 Definite & under Settlement

Fiscal Year

Recognition Method

21.12.1995

46,707

25,336

25,802

19,971

8,725

45

Fiscal Year Ended 21/12/2009 Million Rls Tax Declared Profit Declared Recognized Definite Paid Provision Balance 34,034

Fiscal Year

Fiscal Year Ended 21/12/2008 Million Rls Provision Balance 34,034

Recognition Method

22.09.1996

119,949

33,857

57,420

34,034

22.09.1997

204,33

57,501

133,391

56,891

56,891

56,891

22.09.1998

252,601

67,270

80,668

64,788

64,788

64,788

21.12.1999

21,035

300

1,017

779

779

779

21.12.2000

387,437

74,363

84,479

84,025

84,027

84,027

21.12.2001

704,743

76,188

89,246

89,218

89,218

89,218

21.12.2002 21.12.2003 21.12.2004 21.12.2005 21.12.2006 21.12.2007 21.12.2008 21.12.2009

983,815 1,656,983 3,048,134 3,446,445 1,887,243 1,633,268 3,167,888 3,341,494

3,898 -

14 22 258 4,667 -

4,911 14 22 233 4,200 -

14 22 233 4,200 -

4,911 345,894

4,911 345,894 (345,894) -

Definite & under Settlement Definite & under Settlement Definite & under Settlement Definite & under Settlement Definite & under Settlement Definite & under Settlement Definite & under Settlement Definite & Settled Definite & Settled Definite & Settled Definite & Settled Definite & Settled Not Surveyed Not Surveyed

Tax Prepayments

(345,894) -

20. Payable Dividend

Note Group Parent Company

46

21/12/2009 Million Rls Parent Company: Subsidiary Companies Owned by Minority 2,001,318

21/12/2008 Million Rls 1,330,609

21/12/2009 Million Rls 2,001,318

21/12/2008 Million Rls 1,330,609

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:
Group 21/12/2009 21/12/2008 Million Rls Million Rls 7,074,573 5,299,444 1,562,517 1,155,003 152,301 8,789,391 6,454,447 (4,673,012) 4,116,379 (3,050,484) 3,403,963 Parent Company 21/12/2009 21/12/2008 Million Rls Million Rls 110,145 97,094 571,315 606,627 681,460 703,721 (170,323) 511,137 (268,569) 435,152

Banks Domestic Banks Overseas Other Resources Long-term Portion of Financial Facilities Received

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 771,762 1,001,315 110,145 7,016,314 571,315 8,789,391 681,460

Over 20% From 15% to 20% From 5% to 15%

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

21/12/2009 Parent Company

Group

47

2009 2010 2010 2011 3 Last Months of 1390 (2011) & after that

Million Rls 4,116,379 3,653,701 1,019,311 8,789,391

Million Rls 511,137 134,524 35,799 681,460

48

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

21/12/2009 Group Parent Company Million Rls Million Rls 2,557,733 5,456,237 110,145 775,421 8,789,391 571,315 681,460

Land, Building & Machineries Check & Promissory Note In front of Other Assets (Shares & Banking Deposits)

22. Long-term Accounts & Notes Payable

Note Notes Payable Kharazmi Investment Co. Hambulet Co. Foreign Exchange Bills 22-1 22-2 22-3 22-4 Group 21/12/2009 21/12/2008 Million Rls Million Rls 47,671 77,240 57,325 57,325 47,722 46,025 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 Year Ended Year Ended 21/12/2009 21/12/2008 Million Rls Million Rls Parent Company Year Ended Year Ended 21/12/2009 21/12/2008 Million Rls Million Rls

49

Balance at the beginning of the Year Paid During the Year Provided Reserve Adjustments Balance at the End of the Year

214,940 (127,911) 104,177 (22,308) 168,898

109,028 (35,666) 65,530 76,048 214,940

2,602 (1,660) 2,463 3,405

2,138 (1,602) 2,066 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) Armed Forces Social Security Investment Armed Forces Insurance Funds Armed Forces Pension Fund Bank Saderat Iran Network Other Legal Entities Real Entities 364,530,000 953,667,255 911,250,000 911,250,000 1,600,711,060 1,033,992,144 299,599,541 6,075,000,000 % 6 16 15 15 26 17 5 100

24.1. Share of the Parent Company in ownership of sub companies at the date of balance sheet is as follows:
21/12/2009 No. of Shares Sepahan Cement Group Companies Ghadir Capital & Industry 10,315,000 1,020,000 Cost Price Million Rls 35,220 2,160 21/12/2008 Cost Price Million Rls 60,828 3,668

50

Development Co. Shargh Cement Eetezad Ghadir Investment Shahid Bahonar Board Other

3,535,760 4,868,381 17,460 714,512 20,471,113

13,981 11,007 100 1,761 64,229

13,981 5,600 100 1,949 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 Year Ended 21/12/2008 21/12/2009 Million Rls Million Rls 4,303,479 3,975,225 121,797 328,254 4,425,276 4,303,479

Balance at the beginning of the Year Allocation from Allocable Profit Balance at the End of the Year

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 Companys 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.

51

27. Other Reserves

Flow of other reserves account during the fiscal year is as follows:
Group Year Ended Year Ended 21/12/2009 21/12/2008 Million Rls Million Rls Balance at the beginning of the Year Allocation from Allocated Profit Adjustments Balance at the End of the Year 318,953 319,124 Parent Company Year Ended Year Ended 21/12/2009 21/12/2008 Million Rls Million Rls 281,846 281,846

52 (17,011) 301,994

(171) 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 Groups consolidated financial statements.

29. Minority Interest

Minority interest in subsidiary companies includes the following items:
21/12/2009 Million Rls 2,030,619 150,479 25,886 79,000 925,571 3,211,555 21/12/2008 Million Rls 1,750,081 113,806 25,273 118,940 804,015 2,812,115

Capital Legal Reserve Other Reserves Capital Increase On-account Retained Profit

52

30. Net Sales & Income from Rendered Services

Note Sales of Products: Domestic Sales Export Sales Total Products Sales Sales of Land & Properties Return on Sales & Discounts Net Sales Income from Rendered Services Income from Granted Facilities Year Ended 21/12/2009 Million Rls 4,489,761 657,717 5,147,478 2,360,038 (156,537) 7,350,979 181,218 471,548 8,003,745 Year Ended 21/12/2008 Million Rls 4,192,505 672,900 4,865,405 1,925,731 (28,691) 6,762,445 59,835 211,859 7,034,139

30-1 30-2 30-3 30-4

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:
Year Ended 21/12/2009 Million Rls 178,215 572 2,431 181,218 Year Ended 21/12/2008 Million Rls 51,445 5,582 2,808 59,835

Construction Investment Group Daryaban Jonoub Marine Services Other

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 Year Ended 21/12/2009 Million Rls 3,379,398 1,044,862 Year Ended 21/12/2008 Million Rls 3,380,586 859,020

Cost Price of Goods Sold Cost Price of Sold Land &

31-1 31-2

53

Properties Cost Price of Services Rendered

31-3

72,547 4,496,807

14,726 4,254,332

31.1. Cost price of sold products describes as follows:

Year Ended 21/12/2009 Million Rls 543,440 260,825 979,658 (42,776) 1,741,147 (13,383) (1,740) 1,726,024 1,698,441 (30,958) (14,109) 3,379,398 Year Ended 21/12/2008 Million Rls 908,407 256,721 1,022,031 (20,070) 2,167,089 (25,503) (2,080) 2,139,506 1,336,662 (95,202) (380) 3,380,586

Note Direct Consumable Materials Direct Wage Production Overhead Unabsorbed Costs in Production Total Production Costs Increase in Under Production Inventory Extra Ordinary Wastes Cost Price of Produced Goods Purchase of Produced Goods Increase in Produced Goods Non-productive Consumptions & Adjustments Cost Price of Goods Sold 31-1-1 31-1-2 31-1-3 31-1-4

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 Million Rls 217,157 13,782 11,467 18,419 260,825 Year Ended 21/12/2008 Million Rls 204,599 18,197 23,561 10,364 256,721

Salary, Wage & Benefits Insurance Premium (Employer Quota) Work Termination Benefits Other

31.1.3. Production overhead expenses are as follows:

Year Ended 21/12/2009 Million Rls 205,881 30,777 37,210 Year Ended 21/12/2008 Million Rls 294 39,525 51,891

Salary, Wage & Benefits Insurance Premium (Employer Quota) Employees Work Termination

54

Benefits Indirect Materials Depreciation Repair & Maintenance of Assets Electricity & Energy Property & Assets Insurance Premium Transport Other

122,902 218,570 73,269 18,992 2,967 17,916 89,174 979,658

35,892 179,224 62,438 244,700 2,852 8,861 102,497 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 Sales Cost Price Million Rls Million Rls Cement Industry Companies Almasader Jabal Ali Co. Motojen Group (Electrical Engines) Shahid Bahonar Board Co. Construction Development International Group Companies Ghadir Management Services Co. Bank Saderat Printing Co. Kaspian Foulad Ghadir Co. Glass Production Companies Karamad Systems Management Co. 2,461,388 364,807 708,037 38,798 1,098,220 314,677 562,210 28,802 Year Ended 21/12/2008 Sales Cost Price Million Rls Million Rls 2,229,268 505,408 730,766 59,494 1,125,931 435,584 597,283 41,039

65,581

160,178

117,156

82,941

1,002,647 11,781 335,146 2,756

861,868 8,699 341,472 3,272

206,078 10,778 787,894 186,985 2,887

178,058 7,769 718,146 189,583 4,252

55

4,990,941

3,379,398

4,836,714

3,380,586

56

32. Profit from Operating Investments

Group Year Ended Year Ended 21/12/2009 21/12/2008 Million Rls Million Rls Parent Company Year Ended Year Ended 21/12/2009 21/12/2008 Million Rls Million Rls 1,914,464 1,355,710

Note Dividend of Subsidiary Companies Dividend of Affiliated Companies Dividend of Other Companies Total Profit from Sales of Investments Profit of Participation Bonds & Banking Deposits Other

32-1

32-2 32-3

372,878 372,878

890,481 890,481 191,200

1,264,063 228,219 3,406,746 121,797

1,131,210 708,371 3,195,291 159,666

32-4

59,652

12,629 37,720 482,879

4,668 1,086,349

3,528,543

3,354,957

32.1. Dividend of subsidiary companies liable to consolidation includes the following items:
Year Ended 21/12/2009 Million Rls Construction Development International Zarrin Persia Investment Almasader Jabal Ali Ghadir Trade & Industrial Ghadir Management Services Shargh Cement Motojen Eetezad Ghadir Investment Kalaye Sepehr Pars Ghadir Capital & Industry Development Sepahan Cement Other 226,312 497,800 79,262 261,000 122,000 16,112 38,388 67,320 120,800 439,876 45,105 489 1,914,464 Year Ended 21/12/2008 Million Rls 204,530 446,500 73,428 237,000 30,000 13,427 35,912 22,275 48,000 199,944 38,619 6,075 1,355,710

32.2. Dividend of affiliated companies is as follows:

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

57

Behshahr Development Industries Bahman Production Group Pardis Petrochemical (Ghadir Urea & Ammonic) Zagros Petrochemical Iran Alloy Steel Co. Ghadir Automobile Leasing Shahid Ghazi Serum Making Kavir Tire Bank Saderat Brokerage Other

25,197 58,996 448,800 540,600 129,500 8,657 13,500 36,409 1,650 754 1,264,063

3,844 67,041 918,000 83,622 15,871 13,500 23,703 2,970 2,659 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:
Year Ended 21/12/2009 Million Rls 121,797 (5,960) (29,675) (150) (11,266) 74,746 (15,094) 59,652 Year Ended 21/12/2008 Million Rls 159,666 16,914 (9,384) (2,370) 916 165,742 25,458 191,200

Note Parent Company Ghadir Capital & Industry Development Co. Eetezad Ghadir Investment Co. Ghadir Trade & Industry Co. Other Net Recognized Profit (Loss) & Goodwill Accumulated Depreciation of Groups Abandoned Companies 32-4-1

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

Year Ended 21/12/2009 Investee Company Sales Million Rls A) TSE Companies: Cost Price Million Rls Profit (Loss) Million Rls Year Ended 21/12/2008 Profit (Loss) Million Rls

58

Year Ended 21/12/2009 Investee Company Sales Million Rls 150,620 6,575 6,174 19,785 183,154 75,134 17,357 10,368 6,045 108,904 292,058 Cost Price Million Rls 65,010 7,759 4,324 26,115 1,454 104,662 40,141 10,395 11,025 3,597 441 65,599 17,261 Profit (Loss) Million Rls 85,610 (1,184) 1,850 (6,330) (1,454) 78,492 34,993 6,962 (657) 2,448 (441) 43,305 121,797

Year Ended 21/12/2008 Profit (Loss) Million Rls 5 42,053 (6,121) (4,531) (608) 30,798 118,715 15,185 368 (5,400) 128,868 159,666

Abgineh Motojen Construction Development International Shahdab Industry & Mine Leasing Other Sales Expenses B) Non-TSE Companies Sulfurine Carbonate Sodium Kerman Steel Industries Saramad Ghadir Investment Azar Glass Industries Other Sales Expenses

33. Sales, Administrative & General Expenses

Group Year Ended Year Ended 21/12/2009 21/12/2008 Million Rls Million Rls Salary, Wage & Benefits Insurance Premium (Employer Quota) Provision for Employees Work Termination Benefit Rent Repair & Maintenance of Assets Sales & Advertisement Expenses Depreciation of Assets Doubtful Debts Expenses Trip & Mission Bonus 161,572 16,708 19,612 5,131 24,581 44,072 17,151 4,218 10,259 127,387 12,710 24,259 7,110 28,936 35,986 12,148 8,173 6,547 Parent Company Year Ended Year Ended 21/12/2009 21/12/2008 Million Rls Million Rls 25,029 1,606 2,958 423 3,047 664 1,870 18,234 1,261 2,200 113 1,158 644 1,083

59

Petrochemical Holding Expenses Other

169,435 472,739

166,658 429,914

10,468 23,056 69,121

11,052 35,745

34. Net Other Operating Incomes & Expenses

Group Year Ended Year Ended 21/12/2009 21/12/2008 Million Rls Million Rls (536,968) (42,776) (532,491) (20,070) Parent Company Year Ended Year Ended 21/12/2009 21/12/2008 Million Rls Million Rls -

Note Goodwill Depreciation Unabsorbed Expenses in Production Profit (Loss) from Conversion of Operating Assets & Liabilities Dividend, Participation Bonds & Banking Deposits Increase (Decrease) in Investments Value Profit of Selling Shares in Installments Increase (Decrease) in Assets Value Other

13

8,169

(3,618)

1,767

4,388

1,433

2,053

(22,379)

4,957

39,322

9,480

39,322

9,480

34-1

9,606 39,256 (504,002)

(21,965) 62,867 (496,452)

2,314 43,069

(3,988) 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

Group Year Ended Year Ended 21/12/2009 21/12/2008 Million Rls Million Rls Profit of Received Facilities from Banks 688,254 569,308 Parent Company Year Ended Year Ended 21/12/2009 21/12/2008 Million Rls Million Rls 104,881 141,302

60

Other

174,537 862,791

49,030 618,338

46,549 151,430

1,849 143,151

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 Year Year Ended Ended 21/12/2009 21/12/2008 Million Rls Million Rls 7,987 144,996 58,846 66,320 33,581 32,977 (15,145) 5,586 123,832 28,863 178,667 1,014 (22,193) 828 398,495 Parent Company Year Year Ended Ended 21/12/2009 21/12/2008 Million Rls Million Rls (9,567) (9,567) (16,608) 890 (15,718)

Profit from Sales of Fixed Assets Profit of Participation Bonds & Baking Investment Deposits Dividend of Companies Adjustment of Investments Value Profit from Sales of Investments Loss from Foreign Exchange of Non-operating Assets & Liabilities Other

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 A) Parent Company Expense of Financial Facilities Received by Eetezad Ghadir Co. Profit (Loss) from Selling Shares Amending the Balance of Dividend Receivable Adjustment of Tax Provision of the Previous Years Amending Cost Price of Long-term Investments Other B) Subsidiary Companies Adjustment of Tax Provision of the Previous Years Amendment of Tax Prepayment (4,700) (57,325) (1,187) (4,513) (3,179) (70,904) (151,234) 122,102 Year Ended 21/12/2008 Million Rls (32,377) 111,263 (14,823) (5,440) 17,883 2,032 78,538 (178,375) 122,102

61

Amendment of Financial Expenses Amendment of the Balance of Ayandeh Saz Fund Account Amendment of the Balance of Investment in Affiliated Companies Retained Difference of Foreign Exchange Conversion Dividend Income Payable Dues Other

(13,979) (9,946) (4,617) (57,674) (128,578)

(13,979) (9,946) 33,426 (27,663) 30,385 (1,447) (29,554) (75,051) 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 Year Year Ended Ended 21/12/2009 21/12/2008 Million Rls Million Rls 3,013,076 2,939,790 177,785 536,968 (46,042) 177,425 532,491 105,912 Parent Company Year Year Ended Ended 21/12/2009 21/12/2008 Million Rls Million Rls 3,502,491 3,326,757 664 804 51,153 (4,579,850) 642,068 (766,259) (2,800,809) (429,521) (145,707) (2,057,628) (1,533) (370,961) 69,872 307,354 1,425,525 388,308 291,816 (26,109) 1,223,375 1,478,692 (54,956) (17,481) (711,808) 83,087 644 463 114,907 (2,544,066) 857 (550,058) 39,173 -

Operating Profit Depreciation of Fixed Tangible Assets Goodwill Depreciation Net Increase (Decrease) in Provision for Employees Work Termination Benefits Decrease in Short-term Investments Increase in Operating Accounts Receivable Decrease (Increase) in Inventory Decrease (Increase) in Orders & Prepayments Increase in Long-term Investments Increase (Decrease) in Operating Accounts Payable Increase (Decrease) in Advances Received Dividend Received from Affiliated Companies Other Incomes & Expenses

62

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:
Note Granted Guarantee to Banks for Received Loans Other Granted Facilities 41-1-1 Group Million Rls 22,175,194 454,161 22,629,355 Parent Company Million Rls 12,786,308 12,786,308

41.1.1. Granted guarantee by the Parent Company to banks related to loan guarantee of the Groups companies. 41.2. Capital Commitments Capital commitments of the Group companies are as follows:
Company Parent Company Committed Capital of Marjan Petrochemical Co. Sepahan Cement Completion of Product of 3,300 Tons/Day of Clinker Project Shargh Cement Completion of Production Line Unit 4 Other Companies Amount Million Rls 11,050 107,273 100,000 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:

63

Name Iran Refractory Products Sata Investment

Type of Relationship Common Board Member Common Board Member

Transaction Description Purchase of Refractory Brick Sales of Building & Apartment

Transaction Amount Million Rls 4,669

Debt (Credit) Balance at the End of the Year Million Rls -

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 Million Rls Sata Investment Common Board Member Sales of Building 310,963 Debt (Credit) Balance at the End of the Year Million Rls (15,000)

Name

Type of Relationship

Transaction Description

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 Board of Directors Suggestion Proposed Dividend of the Board of Directors

334,149

1,518,750

64