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Monday، 10 December 2018
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Articles of Association o f The National Development Fund ( of Iran )

Article 84 of the Fifth Development Plan of the Islamic Republic of Iran Article 84: The National Development Fund of Iran, hereinafter referred to as the “Fund”, is established to turn a portion of the revenue s originated from selling oil, gas, gas condensate and oil products to durable wealth and productiv e economic investments as well as preserv ing the share of future generations from the oil and gas resources and products . The Fund is positioned in Tehran and has no branche s in the city of Tehran nor in other provinces of the country . The assets and properties of the Fund are owned by the G overnment of the Islamic Republic of Iran. This article forms the Articles of Association of the Fund

1 - Board of Trustees

2 - Board of Executive Directors,

3 - Supervisory Board

The Board of Trustees, as the highest ranking pillar of the Fund, has the following authorities and responsibilities:

1 - Steer ing and setting the policies ,

2 - Approving terms and conditions for extending facilities for produc tion and invest ment to the private, cooperatives and non - governmental public sectors ,

3 - Approving guidelines, strategic plan s, annual budget, financial and performance reports of the Fund ,

4 - Choosing the chairman and other members of the Board of Executive Directors according to Paragraphs D and E ,

5 - Dismissing the chairman and members of the Board of Executive Dir ectors upon 1 the proposal of any member of the Board of Trustees and approval of the Board of Trustees ,

6 - T aking decision about referring disputes and claims for intermedia tion or settlement , within the framework of Article 139 of the Constitution ,

7 - Determining the type of acceptable and eligible activities which take the priority for receiving facilities in economically - generative and economically - viable production and service sectors and sub - sectors ,

8 - Determining the minimum expected rate of return for the Fund’s resources and also acceptable rate of return for production and investment projects , enjoy ing NDFI facilities, and determining the partnership share of investment projects , provided that the average of these rates would not be less than the average rate of return of the Central Bank of Iran’s deposits in foreign markets

The Board of Trustees is comprised of:

a. The President (Chairman of the Board of Trustees)

b. Vice President for Strategic Planning and Supervision (Secretary of the Board of Trustees)

c. Minister of Finance and Economic Affairs

d. Minister of Labor and Social Affairs

e. Minister of Petroleum

f. Governor of the Central Bank of Iran

g. Chairman of Iran Chamber of Commerce, Mine and Industry, as an observer without the right to vote

h. Chairman of Iran Chamber of Cooperative, as an observer without the right to vote

i. Two members of the Pa rliament’s Econom ic , Planning, Budget and Audit Commission , proposed by the Parliament

j. Attorney General

Note 1: Board of Trustees holds meeting every four months, at least .

Note 2: Board of Trustees’ meetings come to order when at least two thirds of members 2 (who have the right to vote) are present. The decisions are taken by at least five votes.

Note 3: Chairman of the Board of Executive Directors and chairman of the Supervisory Board can attend the Board of Trustees’ meetings without the right to vote.

Note 4: Any decision taken by the Board of Trustees regarding the approval of balance sheet and financial statements of the Fund, and also appointment of the chairman and members of the Board of Executive Directors shal l be published in the Official Gazette and a newspaper of mass circulation , as selected by the Board of Trustees.

Note 5: agenda, date and venue of the meetings of the Board of Trustees are set by the Secretary of Board of Trustees and shall be circulated among the members at least 15 days before the holding of the meeting.

Note 6: The budget of the Fund headquarter shall be ratified by the Board of Trustees

in order to manage the Fund , w ithin the framework of the provisions of the Articles of Association and approvals of the Board of Trustees, Board of Executive Directors shall be formed compris ing of five members who are distinguished, experienced and well - known in economy, law, finance , banking and planning , with a minimum 10 years of related experience and postgraduate qualification. Members of Board of Executive Directors shall be named by the Board of Trustees and appointed by the President. They shall take on the following functions and responsibilities:

1 - To propose to the Board of Trustees the acceptable prioritized activities to receive financial facilities in economically - generative and economically - viable production and service sectors and sub - sectors ,

2 - To propose to the Board of Trustees investment plans in domestic and international money and financial markets ,

3 - To set the framework of Agency Contracts to be concluded with agent banks and to determine authorities and responsibilities of the agent bank s within the framework of these Contracts,

4 - To establish an internal audit system and a proper internal control system ,

5 - To confirm the foreign and national - currency financial statements and submitting them to the Board of Trustees ,

6 - To pr opose to the Board of Trustees recommendations on related guidelines and 3 terms and conditions of extending financial facilities ,

7 - To take decisions regarding any measure s which shall be taken under the name of the Fund within the duties and goals described in the Articles of Association except for areas the decision making about which are within the power of the Board of Trustees or the chairman of the Board of E xecutive Directors , Board of trustees cannot delegate any of its powers to Board of Ex ecutive Directors nor any other authority. Whatever delegated earlier is declared null and void ,

8 - To adopt decisions regarding all issues which the chairman of Board of Executive Directors , within his/her competence, put s on the agenda of the Board of Executive Directors ,

9 - To implement approvals of the Board of Trustees ,

10 - To propose the claims to be refer red to arbitration, determin ation of the Fund ,

11 - To open and close accounts in foreign currencies with the accounts designated by the C entral Bank of the Islamic Republic of Iran, and accounts in Iranian Rials with the Central Bank, and to introduce the holders of signing rights from among the members of the Board of Executive Directors , the Chairman and other directors of the Fund ,

12 - To enter into contracts with qualified international advisors in the fi e ld of investment and financ ial engineering in order to assess, improve and boost the performance of the Fund ,

13 - Other issues referred by the Board of Trustees

Note 1 : Dismissal and acceptance of the resignation of the members of the Board of Executive Directors shall be conditioned up on confirmation by two thirds of the members of the Board of Trustees who have the right to vote.

Note 2: Members of Board of Executive Directors shall be employed full - time. They shall not be engaged in any other economic activity n or any occupation except for teaching. Members of Board of Executive Directors are subject to the provision described in Article 142 of the Constitution.

Note 3: The tenure of Board of Executive Directors shall be five year s a nd can be r e - appointment.

Note 4 : All securities, cheques, promissory notes, drafts , contracts and other binding documents shall be considered valid once signed by two of the three members of Board of Executive Directors who are assigned by Board of Executive Directors

Note 5 : Decisions adopted by Board of Executive Directors shall be effective with at least three votes

Chairman of Board of Executive D irectors , who is the highest ranking executive official of the Fund, shall be selected by the Board of Trustees from amongst the members of Board of Executive Directors and appointed with the verdict of the President. Chairman of Board of Executive Directo rs has the following functions and responsibilities:

1 - To notify and issue orders for the implementation of the decisions made by the Board of Executive Directors and to supervise over the good implementation of them.

2 - To set the agenda and run th e meetings of Board of Executive Directors .

3 - To run the Fund within the framework of the approvals of Board of Executive Directors and the Board of Trustees.

4 - To prepare programs and draw up plans for implementation within the field of activities of the Fund.

5 - To prepare and formulate the plan, budget, financial statements and draft reports of the Board of Executive Directors to be submitted to the Board of Trustees .

6 - To run the internal affairs of the Fund, to employ human workforce, a nd to pay the costs of the Fund.

7 - To prepare and draw up at least quarterly performance reports, to be submitted to Board of Executive Directors ,

8 - To represent the Fund against third parties and all domestic and foreign bodies such as judicial, admin istrative and status registration organizations and the like, with the right of substitution even though continuously .

9 - To file claims or to defend claims made against the Fund, whether judicial or criminal, having all authorities related to court proce edings, except for the right to reconcile and the right to refer the case for arbitration .

10 - Other issues referred to by Board of Executive Directors

In order to make sure that the goals of the Fund are realized and its performance is under supervision, and in order to prevent any probable deviation from the provisions of the Articles of Association and policies of the Fund, the Supervisory Board shall be formed comprising of the heads of the State Audit Court, State Audit Organization and State Inspectorate Organization .

Note 1: The supervision exercised by the Supervisory Board shall not replace other supervisory bodies such as the State Inspectorate Organization or the State Audit Court to fulfill their supervisory functions against the Fund.

Note 2 : The Board of Supervisors is comprised of a chairman, deputy chairman, and secretary, who will be selected in the first meeting of the Supervisory Board

1 - To verify financial statements and reports of the Fund and to prepare occasional and periodical reports for the Board of Trustees and the Parliament.

2 - To verify detailed list of asset s , receivables , financial commitments and summary statement s of the accounts of the Fund and to certify them for publication in the Official Gazette.

3 - To supervise over the performance of the Fund in terms of compliance

with law s and regulations , Articles of Association and goals of the Fund.

To fulfill its functions and without interfering in the current affairs of the Fund, the Supervisory Board shall verify all documents, assets and accounts of the Fund and shall have access to all of Fund’s information and documents, where necessary. The Supervisory Board is also duty bound to submit its supervisory report every six months to the Board of Trustees and the Parliament.

Note: The Board of Supervisors ca n employ qualified individuals and legal entities to audit the performance of the Fund

1 - At least equivalent to 20 percent of the revenues from exporting oil (crude oil, gas condensates , gas and oil products) during the period of the Fifth Development Plan , while its amount is determined in the annual budget ,

2 - At least 20 percent of the value of swap of the above - mentioned items

3 - Shares of the resources described in paragraphs A a nd B shall increase on an annual basis by three percent ,

4 - Fifty percent of the cash balance at the end of the 1389 Iranian calendar year (2011) and following years ,

5 - Resources available from international money markets under the permission of the Board of Trustees in accordance with relevant rules and regulations ,

6 - Net profit of the Fund during the financ ial year ,

7 - I nterest of the Fund’s resources with the Central Bank of Iran, not less than the average of interest rate of the Central Bank of Iran’s deposits in foreign markets, with calculation and payment every three months ,

8 - Twenty percent of resources subject matter of Part D of Paragraph 4 of the 2011 Annual Budget Law ,

Note 1 : R epayment of the Principal and interest of facilities extende d to applicants by the Fund shall be made to the Fund’s account and be used again to materialize the goals of the Fund.

Note 2: The resources of the Fund shall be held only in the accounts admitted by the Central Bank of the Islamic Republic of Iran

1 - To extend financial facilities to the private and cooperative sector as well as the economic entities owned by public non - governmental institut ions , to be used for production and development of investments with economic, financial and technical feasibility

2 - To extend financial facilities for the export of engineering and technical services to Iranian private and cooperative companies which win inter national tenders, through the Fund’s resources or syndicated facilities .

3 - To extend buyer ’ s credit to the buyers of Iran - made goods and services in the export - target markets of Iran .

4 - To invest in foreign financial and money markets .

5 - To extend finan cial facilities to foreign investors on competitive and economic viability grounds in order to attract and protect investors in Iran in accordance with 7 Article 80 of the Constitution.

6 - To pay for expenses of the Fund .

Note 1: Resources of the Fund shall not be used to cover cost s , acquisition of capital assets and repaying debts of the government in any form and shape .

Note 2 : Financial facilities , subject matter of the clauses of th is article , shall be paid only in foreign currencies. Recipients of facilities are not allowed to convert the foreign currency into Rial in the domestic market.

Note 3: Financial facilities of the Fund shall be extended only through state - owned and non - governmental agent banks.

1 - The share of agent banks shall be set by the Board of Trustees under competitive conditions , proportionate to the service charge and the special ty and expert ise of the agent banks.

2 - The share of the Fund from resources , subject matter of subp aragraphs 1 and 2, Paragraph H of this Article, is transferred to Fund’s account by the Central Bank of Iran on a monthly basis. At the end of the financ ial year, when resources are finalized, accounts shall be cleared.

3 - No financial facility is extende d unless financial, technical and economic feasibility and verification of qualifications of the applicant is approved by the agent bank. If paid, this offence shall be considered as misappropriation of public property. The agent bank is responsible to ass ess the viability and technical, financial and economic feasibility of the investment projects , taking into consideration the risk factor , in a way that returns of the project do not fall below the expected rate of return as announced by the Board of Trustees . This shall be regarded as a guarantee by the agent bank for the repayment of the interest and principal of financial facilities extended to the applicant. The Fund will provide financial facilities for inve st ment projects in agriculture, water and natural resources sectors, through agent banks or through the Fund for Supporting Development of Investment s in the Agriculture Sector, in foreign currency and with lesser expected return .

4 - The grand total of fin ancial facilities, extended from the resources of the Fund through 8 agent banks, to non - governmental public institut ions and entities and their subsidiaries and affiliated companies, should not exceed 20 percent of the resources of the Fund.

Note 1: Non - go vernmental institut ions and companies, subject matter of this Article , are considered non - public only if at least 80 percent of their shares or partnership stocks belong to individuals either directly or through legal entities. Companies and institut ions whose majority of shares is owned by public or non - profit organizations such as endowments, insurance and retirement funds and public charities are considered here as entities and companies affiliated to non - governmental public institut ions.

Note 2 : If m ore than 20 percent of the members of the Board of Directors of an economic entity , irrespective of its ownership, are appointed by government officials, the entity is considered as governmental and no financial facility shall be provided to it by the Fund .

Note 3 : The Fund , when distributing resources among economic sectors and provinces, is required to take regional balance into consideration

5 - The Fund’s financ ial year begins on Farvardin 1 st ( 21 March) and finishe s at the end of Esfand (20 March) .

6 - The Fund shall be subject to the provisions described in this Articles of Association and the rules and regulations related to non - governmental public organizations as well as money and foreign currency policies in its administrative, recruitment , finan cial and transactional affairs. The Necessary regulations shall be approved by the Board of Ministers upon the proposal of the Fund’s Board of Trustees and shall be implemented in accordance with Article 138 of the Constitution.

7 - Chairman of the Fund’s Board of Executive Directors is required to report, every six months, the Fund’s resources and spending to the Board of Trustees, Supervisory Board and the Parliament.

8 - T he Supervisory Board shall report any breach or violation of the provisions of this Article to the competent authorities.

9 - The balance sheet and profit and loss account of the Fund as well as the report and opinion of Supervisory Board shall be submitted to the Board of Trustees at least 15 days 9 before its meeting.

j. Issuance of any guarantees or extending any financial facilities from the resources of the Fund shall be made only through agent banks, either governmental or non - governmental, as well as the Fund for Supporting Development of Investment s in the Agricultur e Sector.

k. Any amendment to the Articles of Association or the dissolution of the Fund shall be made only upon the ratification of the Parliament.