Polisan : 1Q 2023 Financial Report

(Convenience translation of interim consolidated financial statements originally issued in Turkish)

Polisan Holding A.Ş.

January 1 - March 31, 2023 interim condensed consolidated financial statements

CONTENTS	Pages
INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION	....................................................... 1-2
INTERIM CONSOLIDATED STATEMENT OF PROFIT OR LOSS……………………………………………….3
INTERIM CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME……………………………...4
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY……………………….5
INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS…………………………………………………………6
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS…………………..…7-51
1.	Group's organization and nature of operations	7
2.	Basis of presentation of financial statements	9
3.	Segment reporting	14
4.	Cash and cash equivalents	17
5.	Financial investments	17
6.	Financial borrowings	18
7.	Trade receivable and payables	20
8.	Other receivable and payables	21

9. Inventories…..………. .............................................................................................................. 21

10.	Prepaid expenses and deferred income	21
11.	Current income tax assets	22
12.	Investments accounted using the equity method	23
13.	Investment properties	25
14.	Right of use asset	26
15.	Property, plant and equipment	27
16.	Intangible assets	28
17.	Short-term provisions, contingent assets and liabilities	29
18.	Employee benefits	32
19.	Other assets and liabilities	33
20.	Capital, reserves and other equity items	34
21.	Revenue and cost of sales	36
22.	Expenses by nature	37
23.	Other income and expenses from operations	38
24.	Income and expenses from investment activities	39
25.	Financial income and expenses	39
26.	Income taxes (including deferred tax assets and liabilities)	40
27.	Earnings/ (losses) per share	43
28.	Related party disclosures	44
29.	Nature and level of risk derived from financial instruments	46
30.	Financial instruments (fair value and hedge accounting disclosures)	50
31.	Other matters	51
32.	Subsequent events	51

(Convenience translation of financial statements and notes originally issued in Turkish)

Polisan Holding A.Ş.

Consolidated statements of financial position as at March 31, 2023

(Amounts expressed in Turkish Lira ("TL") unless otherwise indicated.)

		Current period	Prior period
		Unaudited	Audited
		March 31,	December 31,
Assets	Notes	2023	2022
Current assets		2.010.155.849	1.949.989.723
Cash and cash equivalents	4	510.010.252	475.142.944
Financial investments	5	95.730.000	64.819.730
Trade receivables	7	760.134.635	765.114.968
- Trade receivables from related parties	28	29.315.112	33.411.027
- Trade receivables from third parties		730.819.523	731.703.941
Other receivables	8	31.050.403	26.769.069
- Other receivables from third parties		31.050.403	26.769.069
Inventories	9	502.324.021	534.728.068
Prepaid expenses	10	41.129.592	17.673.101
Current income tax assets	11	3.768.197	3.214.037
Other current assets	19	66.008.749	62.527.806
Sub total		2.010.155.849	1.949.989.723
Non-current assets		3.965.163.897	3.882.341.288
Other receivables	8	940.715	932.996
- Other receivables from third parties		940.715	932.996
Investments accounted using the equity method	12	631.083.622	636.067.190
Investment properties	13	1.377.466.000	1.386.089.000
Tangible assets	15	1.472.709.851	1.432.302.104
Right of use assets	14	76.090.623	78.830.188
Intangible assets	16	2.520.064	3.070.587
Prepaid expenses	10	40.935.911	40.839.493
Deferred tax assets	26	363.417.111	304.209.730
Total assets		5.975.319.746	5.832.331.011

The accompanying notes are an integral part of these consolidated financial statements.

(1)

(Convenience translation of financial statements and notes originally issued in Turkish)

Polisan Holding A.Ş.

Consolidated statements of financial position as at March 31, 2023

(Amounts expressed in Turkish Lira ("TL") unless otherwise indicated.)

		Current period	Prior period
		Unaudited	Audited
Liabilities		March 31,	December 31,
Notes	2023	2022
Current liabilities		1.633.155.593	1.576.292.331
Short term borrowings	6	225.833.533	176.953.872
Short term portion of long term borrowings	6	269.440.394	306.024.554
Trade payables	7	986.422.249	965.516.336
- Trade payables to related parties	28	668.634	116.193
- Trade payables to third parties		985.753.615	965.400.143
Employee benefit obligations	18	39.972.194	14.158.752
Other payables	8	6.441.885	8.680.246
- Other payables to related parties		170.527	170.527
- Other payables to third parties		6.271.358	8.509.719
Deferred income	10	42.142.906	10.990.356
Current income tax liability		27.169.079	36.694.099
Provisions, contingent assets and liabilities	17	13.495.342	27.315.078
- Short term provisions for employee benefits		10.939.469	24.759.205
- Other short term provisions		2.555.873	2.555.873
Other current liabilities	19	22.238.011	29.959.038
Non-current liabilities		407.550.997	330.487.043
Long term borrowings	6	279.527.145	265.453.381
Long term provisions	18	39.605.485	31.134.272
- Provisions for employee termination benefits		39.605.485	31.134.272
Deferred tax liabilities	26	88.418.367	33.899.390
Equity		3.934.613.156	3.925.551.637
Equity holders of the parent		3.934.613.156	3.925.551.637
Paid-in share capital	20	758.500.000	758.500.000
Adjustment to share capital	20	1.467.266	1.467.266
Share premium/discounts		34.167.703	34.167.703
Other comprehensive income/expense not to be reclassified to
profit or loss		692.997.924	715.506.254
- Revaluation and measurement gain / loss		692.997.924	715.506.254
Defined benefit plans re-measurement loss		(72.219.117)	(49.710.787)
Tangible assets revaluation		765.217.041	765.217.041
Other comprehensive expense to be reclassified to profit/(loss)		(13.720.229)	(33.477.120)
- Currency translation differences		(11.639.336)	(30.356.457)
-Cash flow hedging losses		(2.080.893)	(3.120.663)
Restricted reserves		62.528.345	62.528.345
Other reserves	20	(208.727.832)	(208.727.832)
Retained earnings		2.595.587.021	963.846.745
Profit for the period		11.812.958	1.631.740.276
Total liabilities and equity		5.975.319.746	5.832.331.011

The accompanying notes are an integral part of these consolidated financial statements.

(2)

(Convenience translation of financial statements and notes originally issued in Turkish)

Polisan Holding A.Ş.

Consolidated statement of profit or loss

for the period between January 1 - March 31, 2023

(Amounts expressed in Turkish Lira ("TL") unless otherwise indicated.)

		Current period	Prior period
		Unaudited	Unaudited
		January 1 -	January 1 -
	Notes	March 31, 2023	March 31, 2022
Profit and loss
Revenue	21	1.029.749.335	826.091.604
Cost of sales (-)	21	(935.189.308)	(650.100.306)
Gross profit from commercial activities		94.560.027	175.991.298
General administrative expenses (-)		(71.783.970)	(30.920.471)
Marketing expenses (-)		(9.437.651)	(4.814.646)
Research and development expenses (-)		(6.882.495)	(2.716.139)
Other operating income	23	22.200.125	33.116.546
Other operating expenses (-)	23	(12.644.249)	(36.683.084)
Profit/Loss from investments accounted using the equity method	12	(238.008)	21.992.119
Operating profit		15.773.779	155.965.623
Income from investment activities	24	23.669.407	14.594.739
Expense from investment activities (-)	24	(2.206)	(4.620)
Operating profit before financial income/expense		39.440.980	170.555.742
Financial income	25	22.771.355	21.308.112
Financial expenses (-)	25	(43.843.963)	(44.236.625)
Profit before tax from continuing operations		18.368.372	147.627.229
Continuing operations tax income/expense
- Current tax expense	26	(8.116.243)	(15.251.933)
- Deferred tax income/expense	26	1.560.829	(1.148.718)
Profit for the period from continuing operations		11.812.958	131.226.578
Profit for the period		11.812.958	131.226.578
Attributable to:
Non-controlling interests		-	-
Equity holders of the parent		11.812.958	131.226.578
Earnings per share	27	0,016	0,173
-Earnings per share from continuing operations		0,016	0,173

The accompanying notes are an integral part of these consolidated financial statements.

(3)