Gübre Fabrikalari Türk Anonim Sirketi : Consolidated Financial Statements and Footnotes as of 30.06.2023

(Convenience translation of

interim condensed consolidated financial statements originally issued in Turkish)

GÜBRE FABRİKALARI

TÜRK

ANONİM ŞİRKETİ

INTERIM CONDENSED

CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE PERIOD

JANUARY 1 - JUNE 30, 2023

INDEPENDENT AUDITORS' REVIEW REPORT

FOR THE PERIOD ENDED JUNE 30, 2023

To the Board of Directors of

Gübre Fabrikalari Türk Anonim Şirketi

Introduction

We have reviewed the accompanying interim consolidated statement of financial position of Gübre Fabrikalari Türk Anonim Şirketi ("the Company") and its subsidiaries (collectively referred to as the "Group") as of June 30, 2023, and the interim consolidated statements of profit or loss, interim consolidated other comprehensive income, interim consolidated changes in equity and interim consolidated cash flows for the six-month period then ended and notes to the interim consolidated financial information. The Group Management is responsible for the preparation and presentation of these interim consolidated financial information in accordance with the Turkish Accounting Standard 34 Interim Financial Reporting ("TAS 34") issued by the Public Oversight Accounting and Auditing Standards Authority ("POA"). Our responsibility is to express a conclusion on these the accompanying interim consolidated financial statements based on our review.

Scope of Review

We conducted our review in accordance with the Standard on Review Engagements 2410 "Limited Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for Qualified Conclusion

The financial statements of Razi Petrochemical Co. ("Razi"), a subsidiary of the Group operating in Iran, which is consolidated in the accompanying financial statements, have been reviewed by the component auditor, where Razi's financial statements and financial information included in the accompanying consolidated financial statements are presented based on the report dated August 7, 2023 containing disclaimer of a conclusion. As explained in Note 12 to the interim financial statements, there is a lawsuit filed against Razi in the local court in the amount of TL 8.521.623.000 (330 million USD), alleging excessive gas consumption in previous periods. Razi objected to this lawsuit. The review report prepared by the component auditor contained an opinion disclaimer regarding the interim financial statements on the grounds that there is a fundamental uncertainty regarding the final outcome of the ongoing litigation as a final conclusion is not yet determined and a lawyer confirmation has not been received. In regards the aforementioned lawsuit, land pertaining to Razi amounting to TL 42.956.024 (624 Million IRR) has been mortgaged. The Group management has made a provision over the book value of the relevant land in its financial statements.

Basis for Qualified Conclusion (Cont'd)

Petro Saman Avaran Razi, a subsidiary of Razi, which is consolidated in the accompanying financial statements, has not been included in the consolidation.

The consolidated financial statements of Razi included the unaudited accounts of Arya Phosphoric Co., Razi's subsidiary, with a statement made to the effect that the consequences of auditing the investee's financial statements were not clear for the investee.

Based on our review, with the exception of the matters set out in the Basis for Qualified Conclusion paragraph, nothing has come to our attention that causes us to believe that the accompanying interim condensed consolidated financial information is not prepared, in all material respects, in accordance with TAS 34 Interim Financial Reporting Standard.

Emphasis of Matters

Due to the accumulative inflation rate of last three years in Iran exceeding 100% (year-end price index is 338.9 for 2020 and 676.5 for 2022), the commercial transactions have been adjusted according to the effects of inflation instead of historical cost basis, as of the beginning of the accounting period of 2020. IAS 29 "Financial Reporting in Highly Inflationary Economies" standard was applied during the preparation of the financial statements of Razi consolidated in the accompanying financial statements. Accordingly, as of January 1, 2022, Razi's equity opening balances have been adjusted by TL (1.245.581.706) regarding inflationary accounting.

As explained in Note 16 to the condensed financial statements, the sanctions imposed by the United Nations on the Islamic Republic of Iran ("Iran") since 2010 have been suspended for certain periods of time and extent. However, the United States of America, one of the parties to the agreement, stated on May 8, 2018 its withdrawal from the agreement, and that it will start to re-implement the previously suspended sanctions. The first part of the re-implemented sanctions came into effect on August 6, 2018, and it was stated that the trade of Iran's oil, petroleum products and petrochemical products will also be subject to sanctions in the second group of sanctions, which was put into effect on November 4, 2018 and on May 2, 2019, the United States lifted this exemption to countries that it granted exemptions to trade in petroleum, petroleum products, and petrochemical products. As of the date of these consolidated financial statements, none of the companies within the Group is not subject to sanctions. However, this situation may affect the future operations of the Group's subsidiary in this country. Iran's economic stability depends on the measures it will take in the face of sanctions and the effects of legal, administrative, and political developments. These developments are not under the control of companies operating in the country. As a result, companies operating in this country must consider some risks that are not generally observed in other markets. The attached consolidated financial statements contain the assumptions of the Group management about the effects of the current sanctions imposed on Iran on the operations and financial condition of the subsidiary. Iran's future economic situation may differ from Group management's assumptions.

After the sharp depreciation of the local currency, the Iranian Rial, the Central Bank of Iran created a new platform for foreign exchange transactions (called "NIMA") in April 2018 and required all banks and exchange offices to record their transactions on this platform. Companies exporting non-petroleum products are obliged to sell all their foreign currency income from exports to banks or licensed exchange offices through this platform, except (i) to import goods and services for themselves, (ii) to repay foreign currency debt and (iii) to use them as deposits in banks.

Emphasis of Matters (Cont'd)

TAS 21 Standard on the Effects of Changes in Currency states that where various exchange rates are available, the rate to be used is the rate at which the relevant transactions take place and the future cash flows are expected to occur. The Group management, in the foreign currency valuations of Razi in the accompanying consolidated financial statements, has taken the end-of-period exchange rate (NIMA rate) announced by the Foreign Exchange Transactions Center as the exchange rate regime in Iran is ambiguous and the exchange rate of future cash flows is uncertain. Similarly, while calculating the period average rates, the average of the rates announced by the Center was taken into account.

Due to the sanctions imposed on Iran, companies exporting in Iran face various difficulties in these sales. Exporting companies based in Iran are required to obtain approval from the Central Bank of Iran and other authorized institutions, and if this approval is not obtained, they cannot benefit from tax exemptions arising from exports to these companies.

As explained in the Note 16, in November 2011, Iskenderun Fiscal Directorate ("Treasury") brought a suit in order to hypothecate on behalf of public and cancel land register of property owned by the Group having a surface area of located in Hatay, Iskenderun, in accordance with the Regulation on Implementation of Coastal Law and its provisions since the Shore Edge Line passes through the aforementioned land. The net book value of the aforementioned property is TL 365.093.956 as of the balance sheet date. The Group has appealed against the case in its legal period and requested the re- preparation of expert's report issued towards determining Shore Edge Line which constitutes a base for the case and has filed a counterclaim for the compensation of the right to property, also has filed a counterclaim in the amount of TL 500.000.000 for the compensation of the property right, by considering that the case may result in favor of the Treasury. The lawsuits were resulted against the Company; however, the Company requested a revision of the appeal court within the legal period and its request was accepted. In addition, the Group management has opened new lawsuits in the Judicial and Administrative Judiciary in order to re-determine the Coast-Side line. The legal process is still ongoing as of the balance sheet date. In accordance with the opinions of the legal advisors, the Group Management has not recognized any provision for this matter in the consolidated financial statements at this stage.

These matters stated above do not affect our qualified conclusion.

Eren Bağımsız Denetim A.Ş.

Member Firm of Grant Thornton International

Jale Akkaş

Engagement Auditor

İstanbul, August 18, 2023

Contents	Page
Interim consolidated statement of financial position	1-2
Interim consolidated statement of profit or loss and other comprehensive income	3
Interim consolidated statement of changes in equity	4
Interim consolidated statement of cash flows	5
Notes to interim condensed consolidated financial statements	6-45
1.	Group's Organization and Nature of Operations	6-8
2.	Basis of Presentation of the Consolidated Financial Statements	8-14
3.	Segment Reporting	15-17
4.	Cash and Cash Equivalents	17-18
5.	Borrowings	19-20
6.	Trade Receivables and Payables	21-22
7.	Other Receivables and Payables	22-23
8.	Inventories	23
9.	Property, Plant, Equipment	23-26
10.	Intangible Assets	27
11.	Commitments	28
12.	Provisions, Contingent Assets and Liabilities	28-30
13.	Revenue and cost of Sales	31
14.	Other Operating Income and Expenses	31
15.	Earnings Per Share	32
16.	Related Parties Transactions	32-32
17.	Financial Investments	34
18.	Employee Benefits	34-35
19.	Prepaid Expenses and Deferred Income	36
20.	Equity	36-37
21.	Income Taxes (Including Deferred Assets and Liabilities)	37-40
22.	Financial instruments and financial risk management	41-43
23.	Business Combination	44
24.	Derivative Financial Instruments	44-45
25.	Subsequent Events	45