2024 Financial Statements

(Convenience translation into English of the independent auditors’ report and consolidated financial statements originally issued in Turkish)

Consolidated financial statements for the period between January 1 - December 31, 2024 and

independent auditors’ report

Deloitte.

ORB Ba0imsiz Denebm

ve Serbest J luhasebeci

PterLez: Maslak nor Plaza

Eski Buyitkdere Ceddesi /4a slak

]qahahesi Ro: i Pastas, sadder

34s85 Istanbul

Tel: +90 (212)

TñAlye

6O0D

Fax: +90 (212) 366 60t0

5»w: Smr Alis wKi skin Cad. No: 4 Now Ter Xat: 24 Dis no: 241-242-2g3

BayraMi, tzmIr,W

Te!: *90 (232) 464 7064

Fax: +90 (232) '464 7194

Piersis No: 3T68339 711958392

Ticari SioiT No: lg392g

(CONVENIEf4CE TRANSLATION OF INDEPENDENT AUDITOR'S REPORT ORIGINALLY ISSUED JH TURKISH)

INDEPENDENT AUDITOR'S REPORT

To the General Assembly of Bati inn Bari Anadolu 5iineoto Sanayii A.§.

A} Report on the Audit of the Consolidated Finenclal Statements

1. 9uelified Opinion

   We have audited tote consolidated financial statements of Bad§im Bath Anadolu kimento Sangyii A.§. (“the Company”} an4 its subsidiaries (“the Group”), wfticfi comprise the consolidated statement of financial position as at 3 I December 2024, and the consolidated statement of comprehensive income, consolidated statement of ckcnges in equity and conseTidatcd statement of cash flows for the year then en4cd, and notes to the consolidated financial statements, ncIu4ing a summary of significant accounling

   In our opinion, except i°or the effect on the consolidated financial statements of the matrer described in the Basis for Qualified Opinion paragraph below, the accompanying consolidated financial statements pwsent fairly, in gl] material respects, the consolidated financial position of the Group as Bt3 I December 2024, and its consolidated financial performance and its consoTidatc4 cash flows for the year then ended in accordance with Turkish Financial Reporting Standards ( fiRSs).

2. Beers for Qualified Opinion

   The Group's property, plonl and equipment and intangible assets are required to be assessed for impnirment in accordance wiih TAS 36 “Impairment of Assets”. As of the date of this report, the Crroup‘s subsidiary Bali§im EnerJi Elektrik Dretim A.§. is in the process of determining the recoverable amount of intangible assets related to the concession of Kovada I and Kovada II hydroelectric power planls with a net book value of TL I ,03fi,63 I as stated in Note 13. Therefore, the Group has not been able lo determine whether any adjustments, including deferred tax effects, that may be necessary as a resull of the comparison of the recoverable amounts of these assets with their indexed cost values are required to be recognized in lhe accompanying consolidated financial statements.

   We conducted our audit io accordance with the Standards on Independent Auditing (SIA) which is a part of Tnrkish Auditing Standards accepted by regulations of the Capital Markets Board and pub1ishcd by the Public Oversight Accounting and Auditng StandBrd$ Authority (POA). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We arc indejxndent of the Group in accordance with the Code of Ethics for Independent Auditors tCodeof Ethics) published by the POA, together with the ethical requirements included in the regulations of the Capital Markets Board and other regulations Lhat are relevant to our audit of tIc consolidated financiBT statements, and we kave fulfilled our order ethical NspOnsibJiLies in 8ccor tance with these requirements and the Code of Ethics. We believe that rke audit evidence we have obtained is sufficient and app@priate to provide a basis for our opinion.

   Deloitte.

3. Key Audit Matters

   Key audit matters are those matters that, in our professional judgment, new of most significance in our audit of fhc consolidated financial statements of the current period. JTiese matters wee addressed in the content of our audit of tfto consolidated financial statements as a whole, and in forming our opinion thereon, and we do not p oxide a separate opinlon on these matters.

   Key Audit flatter

   How the matter was addressed lii the sudit

   Accounting for Property› Plant and Equipment using Revaluation Method In ihe financial Statements as at 3I December 2024, the Company measure tfic lands and machinery, pram and equipment at their fair values based on the results of the valuation studies carried our by an independent valuation firm authorized by the CMB as of 3I December 2024 and the increase in value of the related assets amounting to TL 998.502 after tax Effect, is recognized under the revaluation reserve related to propeñy, plant and equipment accounts irt other comprehensive income. The processes involved in the recognition of such tr:insactions in the financial statements and the valuation of such transactions, which involve significant expertise, judgement and asswmpt one, are 5 gn ficant to nur audit and have Restore been identtfied as a key nudit Detgil«rt explanations rdatcd to property, plant anJ eq‹iipnJent are disclosed in Note 2 gnd Note 12.

   During our audit, we performed the following audit procedures related to the measurement of property, plant and equipment In accordance with the devaluation model: nnthods weed by the valuation experts in the said valuation reports. which constitute the basis for the fair values of the related tangible fixed assets measured according to ihe re Valuation model. experts of another organization. In this frameu/ork, ns a result of the studies an4 examinafions catzied Out by the experts on the real estate valuation calculations in question, we Seve evaluated whether the fa r value appraised by £he valuation expens is wihin an acceptobe rgnge.

   • Regarding The revaluation of property, plant and eguipment, we assessed the qualifications, competencies and impartiality of tfte zeal estate appraiscrs app0inted by the management. In our audit, we assessed the approprfaieness of the

   • In order lo check the conformity of the assumptions used by the independent valuation experts during the valuation with ifi market data, an extemai expert was included with the vaI‹iat on

   • Tfie appropriateness of the valuation method used has bun checked by evaluating the related machinery, p]nnt and equipment together with their intended use.

   • In addition, within the scope of the abovementioned specific accounting, we have questioned the compliance cf thc information in the financial statements and explanatory notes in accordance with TAS 16.

4. Other MaHem

   The consolidated financial statements Of BaQ§im Baht Anadolu imento Sanayii A.§. for the year ended 31 December 2023 were audited by another 8Udilor wIo expressed en unmodified opinion on those statements on 20 May 2024.

5. Responsibilities of Menagemeat and Tbosc Cbargecl witTi Covernance f‘or the Coruolidated

   Financial Statements

   Management is msponsibJe for the preparation and fair presentation of the consolidated financial statements ia accordance with TFRS, and for such internal control as management de1crmines is necessay to enable the pregomtion of consolidated financial statemcn£S Th8T 8s free from material misstatement, whether 4ue to frau‹l or error.

   In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a goilg concern, disclosing, as applicable, matte+s related to going concern and using the going concern basis of accounting unJes.s management either intends to liquidate the Group or to cegse operations, or has no realistic altemati ve but to do so.

   Those charged with governance in xsponsible for overseeing the Group's financial repoñing process.

6. Auditor's Respon8lbilities for the Audit of the Consolidated financial Statements

   ResponxiFilities of independent auditors in an independent nudit are as follows:

   Our objectives are lo obtain reasonable assurame about whether the consolidated financial statements as a whole are free fmm material misstatement, whether due to frnud or error, and to issue an auditor's ie9nR that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducie0 in accordance with the regulations of the Capital Markets Board and IIA wi 11 always deteci a material misstatement when it crisis. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to i nfluence the economic decisions of users teken on the basis of these consolidated financial statements.

   As part of an audit in accordance with the regulations of the Capital Markers Board and SLA, we exercise professional judgment ond maintain professional skepticism throughout the audit. We also:

   • Identify aad ass ca nsks of material rnizstors of the corsoltdated €nanciat sewnents, whether due to fraud or errur, design and perform au4it procednrresponsive to those risks, and obtain audit cvidence that is sufficient an4 appropriate to provide # basir for our opinion (The risk of not detecting a materiM misstatement resulting from fraud is higher than for one resulting from error, as fraud my involve collusion. forgery, intentional omissions. misrepresentations, or the override o£ internal control).

   • Obtotn an understanding of internal coniroT relevant to the audit in order to design gudit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.

   • Evaluate the appmpriaieness of accounting policies used and the rDsonableness of accounting estimates and related disclosures made by management.

   • Conclude on the appropriateness of mznzgement's us of the going concern basis of accenting and, hnsed on the audit evidence obtained, whether a material uncertainty ezixts related to events or conditions that may cast significani doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertairt OxlSts, we are required to draw aiiention in our auditor‘s repori to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. HoWever, future events or condilionx may cause the Group lo cease to continue as a going concern

1. Auditor's Responsibilities for the Audit of the Consolidated Financial State-ents (cont’d)

   • Evaluate the overall presenuitlon, struc‹uw and content of fhc consolidated financial statements, including the d sclosures, gn4 whether tke consolidated financial sfaTemen represent the nnderlying transactions and events in a rnaancr that achieves fair presentation.

   • Obtaio sufficiem upgropñate audit evidence regarding fhe financial information of the entities or business acti viti«s within the Group to express an opinion on the consolidated financial stgtWe Bra responsible for the direction, supervision and perfoi mance of the group audit. We Fennain solely responsible for our audit opinion.

We commnnicate with lkose Charged with governance regarding, among other matters, the planned scope and timing of the audit gnd significant audit findings, including nny significant deficiencies in internal conwol thac we identify during our audit.

We also pmvids thosc charged with governance with a statement tkat we have complied with relevant ethical rcquiremenfs rcgarcting independence, and to communicate with them aI relationships and other matters that may reasonably be thought to bear on onr independence, and wkere applicable, related safeguards.

Fmm the matters communicated with those charged with governance, we determine those matters thai were of most significance in the gudit of the consolidated financia1 statements of the current period and are therefore Lhe key au4it matters. We describe these matters in our auditor's report unless law or regnlation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public intexst benefits of such communication.

B) Report on Other I•egaI and Regulatory Requirements

In accordance with paragraph four of the Article 398 of the Turkish Coiiimercial Code No. 6102 ('TCC"J, the auditor's ruport on the system and the committee of early detection of risk has been submitted to the Board of Directors of the Company on I I April 2021.

In accordance with paragraph fonr of the Article 402 of TCC, nothing has come to o‹ir ctrention that may cause us to believe heat the Ampony's scf of accounts and financial statements prepared for the period I January — 31 December 2024 docs not comgly with TCC and the provisions of the Company's articles of association in relation to financial reporting.

In accordance with paragraph four of the Article 402 of TCC, the Board of Directors provided us all the required information and documentation with respect to our atidit.

The engagement partner on the audit resulting in this independent auditor*s report is Ozgtir Oney.

DRT BAGIMSIZ DENETIM VE SERBEST MUHASEBECI MARI MU§AV IRLIK A.}. Member of DELOITTf TOUCHM TOHMATSU LIMITED

Izmir, 11 April 2025

(Convenience translation into English of the consolidated financial statements originally issued in Turkish)

Batıçim Batı Anadolu Çimento Sanayii Anonim Şirketi and its Subsidiaries

Table of contents Page

Consolidated statement of financial position 2 - 3

Consolidated statement of profit or loss and other comprehensive income ................................. 4

Consolidated statement of changes in equity................................................................................ 5

Consolidated statement of cash flows ........................................................................................... 6

Notes to the consolidated financial statements 7 - 64

(Convenience translation into English of the consolidated financial statements originally issued in Turkish)

Batıçim Batı Anadolu Çimento Sanayii Anonim Şirketi and its Subsidiaries Consolidated statement of changes in equity for the period ended December 31, 2024

(All amounts expressed in thousands of Turkish Lira (“TL”) in terms of the purchasing power of the TL at December 31, 2024 unless otherwise indicated.)

(*) The related amount arises from the capital increase of Batısöke Söke Çimento Sanayii T.A.Ş., a subsidiary of the Company, during the year.

The accompanying notes form an integral part of these consolidated financial statements. (5)

The accompanying notes form an integral part of these consolidated financial statements. (6)

1. The Group’s organization and nature of operations

Batıçim Batı Anadolu Çimento Sanayii A.Ş. (“Group” or “Batıçim”) was established in accordance with the Turkish Trade Law in 1966 in İzmir, Turkey.

The Group headquarters is located at Ankara Caddesi No: 335 Bornova, İzmir. The principal place of business is at the same address.

The Group is registered under the Capital Markets Board (“CMB”) and since 1995 its stocks are traded, in Borsa İstanbul (“BIST”).

The Group’s shareholder structure at historical basis is as below:

December 31, 2024 December 31, 2023

The Board members of the Group are as follows:

Chairman : Sabit Aydın

Deputy of Chairman and Authorized Member : Gülant Candaş

Official Member : Ömer Çağdaş Selvi

Member : Coşkun Kılıç

Independent Member: : Mehmet Şahne

Independent Member: : Ufuk Bala Yücel

Independent Member: : Enis Turan Erdoğan

As of December 31, 2024, the information related to the Group’s subsidiaries is as follows:

Subsidiaries

Batısöke Söke Çimento Sanayii T.A.Ş.

Stock Exchange

Market

Main Business

Activities

Production and sale of

(“Batısöke”) Borsa İstanbul

ASH Plus Yapı Malzemeleri Sanayi ve Ticaret A.Ş. (“ASH

clinker and cement

Plus”) - Ash production and sale

Batıçim Enerji Elektrik Üretim A.Ş.

(“Batıçim Enerji”) -

Batıbeton Sanayi A.Ş.

(“Batıbeton”) -

Batıliman Liman İşletmeleri A.Ş.

Electricity production

and sale Ready-mixed concrete production and sale

(“Batıliman”) - Port management

Batıçim Enerji Toptan Satış A.Ş.

(“Batıçim Enerji Toptan”) - Sales and distribution

1. The Group’s organization and nature of operations (continued)

   It is engaged in the production and marketing of cement, ready mixed concrete, aggregate, clinker, port operation, electricity generation and sales activities of the Group and the subsidiaries explained above (together the "Group"). Segment reporting is in Note 3.

   The number of employees is categorized as follows

   	December 31, 2024	December 31, 2023
   Executive	34	33
   Officer	192	182
   Worker	794	791
   	1.020	1.006

2. Presentation of the financial statements

   1. Basis of presentation

The Group and its subsidiaries keep its legal books and prepares their statutory financial statements in accordance with Article 6102 of the Turkish Commercial Code (“TCC”), tax legislation and the Uniform Chart of Accounts issued by the Ministry of Finance.

The consolidated financial statements of the Group have been prepared in accordance with Turkish Accounting Standards/Turkish Financial Reporting Standards (“TAS/TFRS”) promulgated by the Public Oversight Accounting and Auditing Standards Authority (“POA”) that are set out in the communiqué numbered II-14.1 “Communiqué on the Principles of Financial Reporting In Capital Markets” (“the Communiqué”) announced by the Capital Markets Board (“CMB”) on June 13, 2013 and published in Official Gazette numbered 28676. It was also presented in accordance with the TMS taxonomy published by the UPS on July 3, 2024.

In accordance with article 5th of the CMB Reporting Standards, companies should apply Turkish Accounting Standards / Turkish Financial Reporting Standards and interpretations regarding these standards as adopted by the Public Oversight Accounting and Auditing Standards Authority of Turkey (“POA”).

Consolidated financial statements are prepared on the basis of historical cost except for the derivative financial instruments measured at fair value and land, machinery and equipment measured at fair value in accordance with TAS 16 revaluation model. In determining historical cost, the fair value of the amount paid for the assets is generally taken as basis.

Functional and presentation currency

The Group determines the currency (functional currency) of the primary economic environment in which the entity operates in accordance with the TAS 21 Currency Exchange Transactions in preparation of its consolidated financial statements and prepares its financial statements in that currency. The results and financial position are expressed in thousand Turkish Lira (“TL”), which is the functional currency of the Group, and the presentation currency for the financial statements.

Restatement of financial statements during the hyperinflationary periods

The consolidated financial statements and related amounts for previous periods have been restated for changes in the general purchasing power of the functional currency and, consequently, are expressed in terms of the measuring unit current at the end of the reporting period in accordance with TAS 29 “Financial Reporting in Hyperinflationary Economies”.

TAS 29 applies to the financial statements, including the financial statements, of every entity whose functional currency is the currency of a hyperinflationary economy. If an economy is experiencing hyperinflation, TAS 29 requires an entity whose functional currency is the currency of a hyperinflationary economy to present its financial statements in terms of the measuring unit current at the end of the reporting period.

1. Presentation of the financial statements (continued)

   1. Basis of presentation (continued)

As of the reporting date, the cumulative change in the general purchasing power of the last three years according to the Consumer Price Index (“CPI”) figure is above 100%. TAS 29 “Financial Reporting in Hyperinflationary Economies” for the reporting periods ending on or after December 31, 2023.

Within the scope of the Announcement on Inflation Adjustment of Financial Statements of Companies Subject to Independent Audit published by POA on November 23, 2023, it is stated that the financial statements of the companies applying Turkish Financial Reporting Standards for the annual reporting period ending on or after December 31, 2023 should be presented by adjusting them for the effects of inflation in accordance with the related accounting principles in TAS 29.

However, in accordance with the CMB's decision dated December 28, 2023 and numbered 81/1820, issuers and capital market institutions subject to financial reporting regulations that apply Turkish Accounting/Financial Reporting Standards have decided to apply inflation accounting by applying the provisions of TAS 29 starting from their annual financial reports for the accounting periods ending on December 31, 2023.

Accordingly, the consolidated financial statements as at December 31, 2024 have been adjusted for the effects of inflation in accordance with the accounting principles set out in TAS 29.

The table below sets out the inflation rates for the years then ended based on the Consumer Price Indices published by the Turkish Statistical Institute (“TURKSTAT”):

The main lines of TAS 29 indexation transactions are as follows:

• All items other than those expressed in terms of the current purchasing power at the reporting date are restated by applying the relevant adjustment factors. Prior year amounts are restated in the same way.

• Monetary assets and liabilities are not restated because they are expressed in terms of the current purchasing power at the statement of financial position date. Monetary items are cash and items to be received or paid in cash.

• Fixed assets, associates and similar assets are restated at historical cost, but not exceeding their market value. Depreciation is similarly restated. Amounts included in equity have been restated by applying general price indices for the periods in which they were included in or arose within the Company.

• All items in the statement of profit or loss, except for those items in the statement of profit or loss that are affected by the indexation of non-monetary items in the statement of financial position, are restated by applying the same factors as when the income and expense items were first recognized in the financial statements.

• The gain or loss on the net monetary position arising from general inflation is the difference between the restatement adjustments to non-monetary assets, equity items and profit or loss statement accounts. These gains or losses on the net monetary position are included in profit or loss.

1. Presentation of the financial statements (continued)

   1. Basis of presentation (continued)

      • The effect of inflation on the Company's net monetary asset position in the current period is recognized in the statement of profit or loss in the net monetary position gains/(losses) account (Note 30).

The effect of the application of TAS 29 “Financial Reporting in Hyperinflationary Economies” is summarized below:

Restatement of the Statement of Financial Position

Amounts in the statement of financial position that are not expressed in terms of the measuring unit current at the end of the reporting period are restated. Accordingly, monetary items are not restated because they are expressed in the currency of the reporting period. Non-monetary items are required to be restated unless they are expressed in terms of the currency in effect at the end of the reporting period.

The gain or loss on the net monetary position resulting from the restatement of non-monetary items is included in profit or loss and presented separately in the statement of profit or loss and other comprehensive income.

Restatement of the Statement of Profit or Loss

All items in the statement of profit or loss are expressed in terms of the measuring unit current at the end of the reporting period. Therefore, all amounts have been restated by applying changes in the monthly general price index.

Cost of inventories sold has been restated using the restated inventory balance.

Depreciation and amortization expenses are restated using the restated balances of property, plant and equipment, intangible assets and right-of-use assets.

Restatement of Statement of Cash Flows

All items in the statement of cash flows are expressed in terms of the measuring unit current at the end of the reporting period.

Non-monetary items acquired or undertaken before January 1, 2005, the date on which the Turkish lira ceased to be designated as the currency of a hyperinflationary economy, and non-monetary items recognized or incurred before that date are restated for the changes in the CPI between January 1, 2005 and December 31, 2024.

In addition, on initial application of TAS 29, the provisions of the Standard are applied assuming that there will always be hyperinflation in the relevant economy. Therefore, the opening balance sheet as at January 1, 2022, which is the beginning of the earliest comparative period, has been adjusted for inflation to provide a basis for subsequent reporting periods. As of January 1, 2022, the inflation adjusted amount of retained earnings/accumulated losses in the statement of financial position as at January 1, 2022 is derived from the balance sheet equivalent that should exist after the inflation adjustment of the other items of the statement of financial position.

1. Presentation of the financial statements (continued)

   1. Basis of presentation (continued)

Going concern basis

As of December 31, 2024, in its consolidated financial statements, its current assets are sufficient to cover its short-term liabilities and its total shareholders' equity reached TL 19.132.525 including total comprehensive income amounting to TL 1.118.055 according to the consolidated results for the current year ended on the same date.

However, as of December 31, 2024, Batısöke's current liabilities (TL 1.884.737 of which consists of non-trade payables to related parties) exceeded its current assets by TL 1.470.903 and its total shareholders' equity reached TL 7.615.082, including total comprehensive income amounting to TL 598.585 for the current year ended on the same date. As of December 31, 2024, the Company management has determined that the total amount of receivables from Batısöke amounting to TL 2.099.979, of which TL 1.878.701 is from non-trade receivables to related parties, together with the principal and interest amounts for 2025 to be used in the capital increase to be realized at Batısöke (capital increase through rights issue or allocated capital increase) and to be followed under shareholders' equity as capital advance, to use all of the pre-emptive rights within the scope of the shares it owns in the capital increase and to purchase all shares issued through the allocated sales method in case of an allocated capital increase. In this context, the amount in question was taken under equity as capital advance in the records of Batısöke in 2025. After this transaction, Batısöke's current assets will be TL 407.798 more than its current liabilities.

The measures taken by the Company in 2024 in order to ensure the sustainable continuity of the significant amount of cash flow generated in 2024 with the total equity that has increased to a positive level as a result of the application of TAS 29 inflation accounting, which entered into force in 2023, and the business plans for the coming period are given below.

In 2024, the Group reduced its clinker exports by approximately 22% on a quantity (ton) basis compared to the previous year and increased its cement exports by approximately 6% on a ton basis compared to the previous year, taking into account production and inventory management as well as customer profitability.

However, the Group plans to close clinker exports in 2025 with a similar strategy and at the same level (tons) that it completed at the end of 2024, but may update its strategy in case of positive changes in profitability and the market.

In 2025, the Group aims to increase cement sales in the domestic market, which has a higher profit margin, and to increase export revenues with a ton-based increase in cement exports above the previous year, and to penetrate the American and European markets.

Although the Group does not foresee any risk regarding the realization of the principal and interest payments due in 2025 within the framework of the EBITDA and cash flow to be generated from its main operations within the framework of the projection made for 2025; the transactions whose processes have been completed or are in progress as of the date of approval of the financial statements for the year-end 2024 and which have been completed and which it aims to complete in the light of the disclosures made on PDP are as follows:

- Batısöke Söke Çimento Sanayii T.A.Ş., a Group company, within the registered capital ceiling of TL 2.000.000.000.000, increased its issued capital of TL 400.000.000 by TL 1.200.000.000 (at the rate of 300%) to TL 1.600.000.000 by exercising the pre-emptive rights of the existing shareholders and provided funds amounting to TL 1.209.250.900 in total, of which TL 895.482.158 was provided as offset and TL 313.768.742 was provided as cash inflow. The funds provided by cash inflow were used for financial debt payments.

1. Presentation of the financial statements (continued)

   1. Basis of presentation (continued)

      • As previously announced to the public, the process for the public offering of the shares of Batıliman Liman İşletmeleri A.Ş., a Group company, through capital increase and/or shareholder sale method has been initiated and the application for transition to the registered capital system in this context has been submitted to the Capital Markets Board on December 30, 2024. Within the framework of the cash flow that will be generated after the public offering transactions, it is considered that some of the public offering proceeds will be used for the early repayment of the refinancing loan or other loans existing in the Group within the framework of the above-mentioned purpose. By reducing the loan debt, it is aimed to reduce the foreign exchange difference and interest expenses that may arise from foreign currency in the future.

      • As a requirement of the refinancing agreement, the Company management anticipates that the cash flow will be sufficient to fulfill short-term liabilities and reduce the refinancing loan before maturity, considering the net cash flows to be generated within the framework of the consolidated business plans and cash flow projections, excluding the energy segment, prepared for Batıçim Group by independent expert institutions appointed by the lenders as a requirement of the refinancing agreement, and the cash flows to be generated from non-operating activities mentioned above.

      • The Group has made timely principal and current period interest payments in relation to the refinancing loan signed to cover the financial borrowings of Batısöke, a subsidiary of the Group, and has also chosen to make early repayments of USD 25.433.287 in July 2024 before the maturity date of the refinancing loan.

      • As of December 31, 2024, it is seen that the debt service coverage ratio ratio, which the Group is committed to fulfill in accordance with the refinancing agreement, has been met, and in terms of the forward-looking commitment in the same agreement, the net cash flow in 2024 shows that the Group as a whole will not have any problems in making the related payments on time for the financial indebtedness that will become due within 12 (twelve) months.

        Within the framework of all these evaluations, the Group's consolidated financial statements as of December 31, 2024 have been prepared in accordance with the going concern principle.

        Approval of the financial statements

        The financial statements have been approved by the Board of Directors and authorized for issue on 11 April 2025. The General Assembly has the authority to amend the financial statements.

        Basis of consolidation

        The consolidated financial statements incorporate the financial statements of the Group and entities controlled by the Group and its subsidiary. Control is achieved when the Group:

        • Has power over the investee;

        • Is exposed, or has rights, to variable returns from its involvement with the investee; and

        • Has the ability to use its power to affect its returns.

The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

1. Presentation of the financial statements (continued)

   1. Basis of presentation (continued)

      When the Group has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Group considers all relevant facts and circumstances in assessing whether or not the Company’s voting rights in an investee are sufficient to give it power, including:

      • The size of the Group's holding of voting rights relative to the size and dispersion of holdings of the other vote holders;

      • Potential voting rights held by the Group, other vote holders or other parties;

      • Rights arising from other contractual arrangements; and

      • Any additional facts and circumstances that indicate that the Group has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders' meetings.

        Consolidation of a subsidiary ceases when the Group has control over the subsidiary and loses control. Income and expenses of subsidiaries purchased or disposed of during the year are included in consolidated profit or loss and other comprehensive income statement until the date of elimination from the date of purchase.

        Profit or loss and each component of other comprehensive income are attributed to the owners of the Group and to the non-controlling interests. Total comprehensive income of subsidiary is attributed to the owners of the Group and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiary to bring their accounting policies into line with the Group’s accounting policies. All intragroup assets and liabilities, equity, income and expenses, and cash flows from Group companies are eliminated on consolidation.

        Details of the Group’s subsidiaries as of December 31, 2024 and 2023 are as follows:

        December 31, 2024 December 31, 2023

        Subsidiary	Establishment and operation location	Direct proportional ownership %	Indirect proportional ownership %	Direct proportional ownership %	Indirect proportional ownership %
        Batısöke	Aydın, Türkiye	%74,62	%74,62	%74,62	%74,62
        Batıçim Enerji	İzmir, Türkiye	%100	%100	%100	%100
        Batıçim Enerji Toptan	İzmir, Türkiye	-	%100	-	%100
        Batıbeton	İzmir, Türkiye	%100	%100	%100	%100
        Batıliman (*)	İzmir, Türkiye	%90	%90	%90	%90
        ASH Plus	Manisa, Türkiye	%100	%100	%100	%100

        (*) The Group has transferred its total of 578.345.800 shares, with a nominal value of TL 5.783.458, representing 10% of the paid capital, held in its subsidiary Batıliman Liman İşletmeleri A.Ş., to İstanbul Portföy Yönetimi A.Ş. PRE-IPO Girişim Sermayesi Yatırım Fonu as of December 26, 2023, for US Dollars 12.000.000 and, if distributed, in exchange for the dividend amount that could be paid for the shares in question for the year 2023.

        2. Presentation of the financial statements (continued)

   2. Changes in Turkey Financial Reporting Standards The new standards, amendments, and interpretations

      The accounting policies adopted in preparation of the consolidated financial statements as of December 31, 2024 are consistent with those of the previous financial year, except for the adoption of new and amended TFRS and TFRS interpretations effective as of January 1, 2024 and thereafter. The effects of these standards and interpretations on the Group’s financial position and performance have been disclosed in the related paragraphs.

      1. The new standards, amendments and interpretations which are effective as of December 31, 2024 are as follows:

         Amendments to TAS 1 Classification of Liabilities as Current or Non-Current(1)

         Amendments to TFRS 16 Lease Liability in a Sale and Leaseback(1)

         Amendments to TAS 1 Non-current Liabilities with Covenants(1)

         Amendments to TAS 7 and TFRS 7 Supplier Finance Arrangements(1)

         TSRS 1 General Requirements for Disclosure of Sustainability-related Financial Information(1)

         TSRS 2 Climate-related Disclosures(1)

         (1) It is valid for accounting periods starting after January 1, 2024.

         The Group is within the scope of the application as it meets the criteria specified in the Board's decision. For companies in scope, there is no obligation to present comparative information in the first reporting period and the first year's sustainability report can be published after the financial reports for that period. The Group's fully TSRS compliant report is expected to be published in August 2025, as it is required to be disclosed no later than nine months in 2025.

         The Group has applied the above new standards and amendments and these new standards and amendments do not have a significant impact on the current period and comparative prior periods. Therefore, prior period comparative financial statements have not been restated in accordance with the materiality principle.

      2. Standards issued but not yet effective and not early adopted

         The Group has not yet adopted the following standards, amendments and interpretations to existing standards that are not yet effective

         TFRS 17 Insurance Contracts(2)

         Amendments to TFRS 17 Initial Application of TFRS 17 and TFRS 9 — Comparative Information(1)

         Amendments to TAS 21 Lack of Exchangeability(1)

         1. It is valid for accounting periods starting after January 1, 2025

         2. It is valid for accounting periods starting after January 1, 2026

      The Group will assess the impact of the above amendments on its operations and apply them from the effective date. The Group is in the process of assessing the impact of the adoption of the above standards and interpretations on the consolidated financial statements of the Group in future periods.

      2. Presentation of the financial statements (continued)

   3. Comparative information and restatement of previous year financial statements

      In order to allow for the determination of financial situation and performance trends, The Group has prepared consolidated statement of financial position as at December 31, 2024 comparatively with the consolidated statement of financial position as at December 31, 2023, and consolidated profit or loss statement, consolidated statement of other comprehensive income, consolidated statement of cash flow and consolidated statement of changes in shareholders’ equity for the period ended December 31, 2024 comparatively with the consolidated profit or loss statement, consolidated statement of other comprehensive income, consolidated statement of cash flow and consolidated statement of changes in shareholders’ equity for the period ended December 31, 2023.

   4. Restatement and errors in the accounting policies and estimates

      Accounting policy changes resulting from the first application of a new standard, if any, are applied retrospectively or prospectively, in accordance with the transitional provisions. Changes without any transitional provisions, optional changes in accounting policy or accounting errors detected are applied retrospectively and prior period financial statements are restated.

      If the changes in accounting estimates are for only one period, they are applied prospectively both in the current period when the change is made and in the future periods if the change is made. Significant accounting errors are applied retrospectively, and prior period financial statements are restated.

   5. Summary of significant accounting policies Revenue

Revenue is measured at the fair value of the consideration received or receivable. Net sales are reduced for estimated or realized customer returns, discounts, commissions, rebates, and taxes related to sales.

Sale of goods

Revenue, goods, or services related to performance obligations in the form of goods or service turnover are accounted for as they fulfil their performance obligations by transferring them to their customers. In the sale of property, when the control of the asset is received by the customers, the asset is transferred, and revenue is recognized. This usually happens when the asset is delivered to the customer. However, in cases where there is no alternative use for the Group and there is a legally enforceable right of collection on the payment to be made against the completed performance until that day, the Group transfers the control of the commodity over time and records the proceeds as time-consuming as production takes place. The goods or services are transferred when the control of the goods or services is delivered to the customers.

Following indicators are considered while evaluating the transfer of control of the goods and services

1. Ownership of the Group's right to collect goods or services,

2. The ownership of the property of the customer,

3. Transfer of the possession of the goods or services,

4. Ownership of significant risks and rewards arising from the ownership of the goods or services,

5. It takes into account the conditions for the customer to accept the goods or services.

At the beginning of the contract, the Group evaluates whether the Group has different performance commitments. The Group does not have an important service component identified in customer contracts.

If there is an important financing element in the revenue, the revenue value is determined by reducing the future collections with the interest rate included in the financing element. The difference is recorded in the relevant periods as other income from the main activities on an accrual basis.

1. Presentation of the financial statements (continued)

   1. Summary of significant accounting policies (continued)

      Rendering of services

      Revenue from a contract to provide services is recognized by reference to the stage of completion of the contract. The stage of completion of the contract is determined as follows:

      • Revenue from time contracts is recognized at the contractual rates as labor hours are delivered and direct expenses are incurred.

Dividend and interest income

Dividend income from investments is recognized when the shareholder's right to receive payment has been established (provided that it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably).

Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial recognition.

Related parties

A related party is a person or entity that is related to the entity that is preparing its financial statements (referred to as the 'reporting entity').

1. A person or a close member of that person's family is related to a reporting entity if that person:

   1. has control or joint control over the reporting entity,

   2. has significant influence over the reporting entity; or,

   3. is a member of the key management personnel of the reporting entity or of a parent of the reporting entity.

2. An entity is related to a reporting entity if any of the following conditions applies:

   1. The entity and the reporting entity are members of the same group.

   2. One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).

   3. Both entities are joint ventures of the same third party.

   4. One entity is a joint venture of a third entity and the other entity is an associate of the third entity.

   5. The entity is a post-employment benefit plan for the benefit of employees of either the reporting entity or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity.

   6. The entity is controlled or jointly controlled by a person identified in (a).

   7. A person identified in (a) (i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).

A related party transaction is a transfer of resources, services or obligations between a reporting entity and a related party, regardless of whether a price is charged. In the consolidated financial statements, the shareholders of the Group, the companies they own, their directors and other groups known to be related are defined as related companies The book value of receivables from related parties and payables due to related parties are assumed to be equal to fair value of these assets and liabilities.

1. Presentation of the financial statements (continued)

   2.5 Summary of significant accounting policies (continued) Inventories

   Inventories are stated at the lower of cost expressed in terms of purchasing power of TL as of December 31, 2024 and net realizable value. Costs, including an appropriate portion of fixed and variable overhead expenses, are assigned to inventories held by the method most appropriate to the particular class of inventory, with the majority being valued on weighted average basis. Net realizable value represents the estimated selling price less all estimated costs of completion and costs necessary to make the sale. When the net realizable value of inventory is less than cost, the inventory is written down to the net realizable value and the expense is included in statement of profit or loss in the period the write-down or loss occurred. When the circumstances that previously caused inventories to be written down below cost no longer exist or when there is clear evidence of an increase in net realizable value because of changed economic circumstances, the amount of the write-down is reversed. The reversal amount is limited to the amount of the original write-down.

   Right-of-use assets

   The Company accounts for the right-to-use assets on the date of commencement of the leasing agreement (for example, as of the date on which the relevant asset is eligible for use).The right of use assets is calculated by deducting the accumulated depreciation and impairment losses from the cost value.

   In case the financial leasing debts are revalued, this figure is corrected. The cost of the right of use asset includes:

   1. The first measurement of the lease obligation,

   2. The amount obtained from all lease payments made before or before the lease actually started, by deducting all lease incentives received, and

   3. All initial costs incurred by the company.

Unless the transfer of the ownership of the underlying asset to the Company at the end of the lease is reasonably finalized, the Company depreciates its asset right to use until the end of the useful life of the underlying asset.

The right to use assets are subject to impairment assessment.

Lease liabilities

The company measures the lease obligation at the present value of the lease payments, which were not paid on the date the lease actually began.

The lease payments included in the measurement of the lease obligation at the date of the lease actually consist of the following payments to be made for the right of use of the underlying asset during the lease period and not paid at the date when the lease actually started:

1. Fixed payments,

2. Variable rental payments based on an index or rate, made using an index or rate at the date when the first measurement was actually started,

3. amounts expected to be paid by the Company within the scope of residual value commitments

4. the price of use of this option if the Group is reasonably sure that it will use the purchase option and

5. If the rental period shows that the Group will use an option to terminate the lease, penalties for termination of the lease.

The variable lease payments that do not depend on an index or rate are recorded as expenses in the period when the event or condition that triggers the payment occurred.

The Group discounts the lease payments using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the lessee shall use the lessee’s incremental borrowing rate.

1. Presentation of the financial statements (continued)

   2.5 Summary of significant accounting policies (continued)

   After the commencement date, the Group measures the amount of lease liabilities as follows:

   1. Increases the carrying amount to reflect the interest on the lease obligation, and

   2. Reduces the carrying value to reflect the rent payments made.

In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset.

Property, plant, and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and impairment, if any, after deducting the provision for impairment, except for land, land improvements and buildings, and facility, machinery and equipment whose fair values are reflected in their revaluation model according to TAS 16. Cost value of tangible asset; the purchase price, the import tax, and the non-taxable taxes, are expenses incurred to make the tangible asset ready for use.

Land is not subject to depreciation. Properties in the course of construction for production, supply or administrative purposed are carried at cost, less any recognized impairment loss. Borrowing costs for the assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets is substantially ready for their intendent use or sale. Such properties are classified to the appropriate categories of property, plant, and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.

As of December 31, 2017 the Group made a decision of applying revaluation model for land and changing the accounting policy prospectively within the scope of TFRS’s. Also the Group changed its accounting policy to adapt revaluation model for the, machinery and equipment, effective as of September 30, 2022.Fair value of property, plant and equipment measured in accordance with the Group’s revaluation model was lastly exercised by a real estate appraisal company licensed by the Capital Markets Board. As December 31, 2024, The Group has renewed the revaluation measurements of the land and machinery and equipments and fair value increases are reflected in the consolidated financial statements dated December 31, 2024 based on their fair values in the current valuation reports prepared by a real estate appraisal company authorized by the CMB.

The revenue measured in accordance with the revaluation model are shown by deducting the accumulated amortization from the fair values of the lands, machinery and equipments. The difference between the net book value determined after deducting the accumulated depreciation from the historical cost expressed in terms of purchasing power of TL as of December 31,2024 and the fair value is followed up with the net deferred tax effect on the " Revaluation gain/(loss) on tangible assets " account under equity. In the event of disposal of a revaluated asset the portion respective portion of revaluation fund is transferred to the prior year's loss. On the other hand, some of the increase in value is transferred to retained earnings as the asset is used by the business.

Expenditures incurred after the property, plant and equipment have been put into the operation, such as repairs and maintenance and overhaul costs are normally charged to income in the period the costs are incurred. Expenditures are added to cost of assets if the expenditures provide economic added value for the future use of the related property, plant and equipment and are subject to depreciation over useful lives.

The frequency of revaluations is dependent on indications of significant changes in the items of property, plant, and equipment subject to revaluation.

2. Presentation of the financial statements (continued)

2.5 Summary of significant accounting policies (continued)

If the carrying amount of an asset has increased as a result of revaluation, this increase is recognized in other comprehensive income and is recognized directly in the equity account group as a revaluation increase. However, a revaluation increase is recognized in the statement of profit or loss to the extent that it reverses the revaluation decrease of the same asset that was previously associated with profit or loss.

If the carrying amount of an asset has decreased as a result of revaluation, the decrease is recognized as an expense. However, this decrease is recognized in other comprehensive income to the extent of the extent of any credit balance in the revaluation surplus related to this asset. This decrease, recognized in other comprehensive income, reduces the amount accumulated in equity under the revaluation surplus item.

An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.

Costs of property, plant, and equipment, except for land and construction in progress, are amortized on a straight-line basis over their expected useful lives. The estimated useful life, residual value and depreciation method are reviewed annually for the probable effects of changes in estimates and are recognized prospectively if there is a change in estimates.

The estimated useful lives of the property, plant and equipment owned by the Company are as follows:

Period (Year)

Land improvements 15-30

Buildings 10-50

Furniture and fixtures 2-20

Machinery and equipment 2-25

Motor vehicles 4-10

Other tangible fixed assets (mine assets) 10-30

Intangible assets

Intangible assets consist of purchased computer software. The cost of the assets consists of the purchase price and the costs incurred during the purchase.

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortization and accumulated impairment losses. These assets are amortized over their estimated useful lives using the straight-line method. The estimated useful life and the depreciation method, in order to determine the possible effects of changes in estimates are reviewed each year and changes in estimates are accounted for prospectively. Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses.

An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in profit or loss when the asset is derecognized.

2. Presentation of the financial statements (continued)

2.5 Summary of significant accounting policies (continued)

The annual depreciation rates accordingly the estimated useful lives for intangible assets are as follows:

Period (Year)

Rights 3-15

Assets subject to amortization 5

Impairment of tangible and intangible assets other than goodwill

At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than it is carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction, or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets is substantially ready for their intended use or sale.

Borrowing costs consist primarily of interest and other financing costs incurred in relation to borrowing. When the Company borrows in a currency other than its functional currency, the Turkish Lira (TL), and a portion of these funds is used for the financing of a specialized asset, the amount of borrowing costs that can be capitalized is determined with the help of a borrowing rate that would be used to identify the real borrowing costs that would arise if the expenditures related to the asset had been made in TL. This borrowing rate represents the borrowing costs that would have been incurred if the Company had borrowed in TL under the same terms and conditions as an alternative to the borrowing made for the construction of the specialized asset. Financial investment income earned from the temporary investment of the unspent portion of the credit related to the investment is offset against the borrowing costs eligible for capitalization. The portion that is determined not to be of a capitalizable nature, along with all other borrowing costs, is recorded as finance expense in the income statement in the period in which they arise.

1. Presentation of the financial statements (continued)

   1. Summary of significant accounting policies (continued) Financial instruments

      A financial instrument is any contract that gives rise to both a financial asset of one enterprise and a financial liability or equity instrument of another enterprise.

      A financial asset is any asset that is:

      • Cash

      • A contractual right to exchange financial instruments from another enterprise under conditions that are potentially favourable, or,

      • A contractual right to receive cash or another financial asset from another enterprise

      • An equity instrument of another enterprise.

        A financial liability that is a contractual obligation:

      • To deliver cash or another financial asset to another enterprise, or

      • To exchange financial instruments with another enterprise under conditions that are potentially unfavourable

When a financial asset or financial liability is recognized initially, it is measured at its cost, which is the fair value of the consideration given (in the case of an asset) or received (in case of a liability) for it.

Effective interest method

The effective interest rate method is a method of calculating the amortized cost of a financial asset and of allocating the interest income over the relevant period. The effective interest rate is the ratio exactly discounts the estimated future cash receipts through the expected life of the financial asset to the net present value of the financial asset or in a shorter period where appropriate.

Financial assets

Classification

Group classifies its “financial assets measured at amortized cost” .The classification of financial assets is determined considering the entity’s business model for managing the financial assets and the contractual cash flow characteristics of the financial assets. The appropriate classification of financial assets is determined at the time of the purchase.

Financial assets are not reclassified after initial recognition except when the Group's business model for managing financial assets changes; in the case of a business model change, subsequent to the amendment, the financial assets are reclassified on the first day of the following reporting period.

Accounting and Measurement

“Financial assets measured at amortized cost”, are non-derivative assets that are held within a business model whose objective is to hold assets in order to collect contractual cash flows and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Group’s financial assets measured at amortized cost comprise “cash and cash equivalents” “trade receivables” and “financial investments”. Financial assets carried at amortized cost are measured at their fair value at initial recognition and by effective interest rate method at subsequent measurements. Gains and losses on valuation of non-derivative financial assets measured at amortized cost are accounted for under the statement of income.

Financial Statement Exclusion

The Group derecognizes the financial assets when it terminates the rights related to the cash flows due to the contract or when the related rights are transferred through a purchase and sale of all risks and rewards related to the financial asset. Any rights created or held by financial assets transferred by the Group are recognized as a separate asset or liability.

1. Presentation of the financial statements (continued)

   1. Summary of significant accounting policies (continued)

      Impairment

      Impairment of the financial and contractual assets measured by using “Expected credit loss model” (ECL). The impairment model applies for amortized financial and contractual assets. Provision for loss measured as below.

      • 12- Month ECL: results from default events that are possible within 12 months after reporting date.

      • Lifetime ECL: results from all possible default events over the expected life of financial instrument

Lifetime ECL measurement applies if the credit risk of a financial asset at the reporting date has increased significantly since 12-month ECL measurement if it has not.

The Group may determine that the credit risk of a financial asset has not increased significantly if the asset has low credit risk at the reporting date. However, lifetime ECL measurement (simplified approach) always apply for trade receivables and contract assets without a significant financing.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits and other short-term highly liquid investments which their maturities are three months or less from date of acquisition and that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

Financial liabilities

Financial liabilities are measured initially at fair value. Transaction costs which are directly related to the financial liability are added to the fair value. Financial liabilities are classified as equity instruments and other financial liabilities. A financial liability is classified as fair value gain or loss through profit or loss in case it is held for sale. A financial liability is recognized as held for sale in case this financial liability is a derivative instrument or defined as at the first registration. Financial liabilities fair value gain or loss through profit or loss are measured at their fair value and net gain or losses are stated under profit or loss including interest expenses. Other financial liabilities are measured at their amortized costs following their first recognition. Interest expenses and foreign currency gains or losses are stated under profit or loss. Profit or losses resulting sale of these financial liabilities are stated under profit or loss.

Effect of foreign currency transactions

The consolidated financial statements of each Group entity are presented in the currency of the primary economic environment in which the entity operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each entity are expressed in TL, which is the functional currency of the Group, and the presentation currency for the consolidated financial statements.

In preparing the financial statements of the individual entities, transactions in currencies other than TL (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. At each reporting date, monetary items denominated in foreign currencies are retranslated at the rates prevailing on the reporting date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences which relate to assets under construction for future productive use, which are included in the cost of those assets where they are regarded as an adjustment to interest costs on foreign currency borrowings.

1. Presentation of the financial statements (continued)

   2.5 Summary of significant accounting policies (continued) Earnings per share (loss)

   Earnings per share disclosed in the statement of profit or loss is determined by dividing net income by the weighted average number of shares that have been outstanding during the related period.

   In Turkey, companies can increase their share capital by making a pro-rata distribution of shares (“bonus shares”) to existing shareholders from retained earnings on equity items. Such kind of bonus shares are taken into consideration in the computation of earnings per share as issued share certificates. For the purpose of earnings per share computations, the weighted average number of shares outstanding during the period has been adjusted in respect of bonus shares issues without a corresponding change in resources, by giving them retroactive effect for the year in which they were issued and each earlier year.

   The cash in the paid-in capital is calculated by considering the date on which the weighted average common share capital increase for the current period's ordinary shares to be used in earnings (loss) calculations is calculated when there is a change in the name of the issued share capital from capital increase.

   Events after the reporting period

   Events after the reporting period are those events that occur between the reporting date and the date when the financial statements are authorized for issue, even if they occur after an announcement related with the profit for the year or public disclosure of other selected financial information.

   As of the reporting date, if the evidence with respect to such events or such events has occurred after the reporting date and such events require restating the financial statements; accordingly, the Group restates the financial statements appropriately. If such events do not require restating the financial statements, such events have been disclosed in the related notes.

   Provisions, contingent assets, and liabilities

   Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

   The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, considering the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows. Provisions are reviewed at each reporting date and necessary adjustments are made to reflect management's best estimates.

   Contingent assets and liabilities

   A contingent liability is an obligation arising from a past event that is not fully under the control of the entity and arises from past events or events in which one or more non-contingent events occur in the future and can be verified; but not included in the financial statements for the following reasons:

   1. There is no possibility of leaving economically beneficial resources out of business to meet the obligation, or,

   2. The amount of the obligation cannot be measured sufficiently reliably.

A contingent asset arises from past events and that is not in full control of the entity and whose existence will be confirmed if one or more uncertain events occur in the future.

The presentation of contingent assets in the financial statements is not included in the financial statements, as it may result in the recognition of an income that can never be obtained. However, if it is virtually certain that an income will be obtained, the asset is not a conditional asset and is reflected in the financial statements.

2. Presentation of the financial statements (continued)

2.5 Summary of significant accounting policies (continued)

Mine site rehabilitation provision

Cost of reclamation, rehabilitation and closure of mines comprise the provisioned amount for costs that are considered as highly probable to be incurred during the closure and rehabilitation of mines, discounted and recognized on the reporting date of the financial statements. These provisions are discounted at the reporting date with the discount rates, which are non-taxable and risk-free rates for the future expected cash flows, taking into consideration the market interest rate and the risk associated with the liability. The calculations are reviewed at each reporting date. The changes arising from the changes in the management estimates used for the calculation of the provision related to the conditioning, rehabilitation and closure of mining areas, are recognized in the reclamation of mining areas, rehabilitation and closure costs. On the other hand, in determining the costs related to the reclamation, rehabilitation and closure of mines the depreciation rate used is the lower of; the remaining economic life of the mine, or the quantity of the mined amount during the period divided by the reserves left in the mine at the end of the period. Based on the scope of existing programs to prevent environmental pollution and protection of the environment is reflected in the consolidated statement of profit or loss as an expense in the period in which the costs are incurred.

Segment information

The Group have identified relevant operating segments based on internal reports that are regularly reviewed. Chief operating decision making body of the Group is the Executive Board.

The chief operating decision making body of the Group reviews results and operations on a product basis in order to monitor performance and to allocate resources. Product basis segments of the Group are defined in the following categories: stone and mineral basis products, ready-mixed concrete, port services and electricity production.

Taxes calculated on the basis of the company's earnings

Turkish tax legislation does not permit a parent company and its subsidiary to file a consolidated tax return. Therefore, provisions for taxes, as reflected in the consolidated financial statements, have been calculated on a separate-entity basis.

Tax expense includes current tax expense and deferred tax expense. Tax is included in the income statement, provided that it is not related to an operation that is accounted for directly under equity. Otherwise, the tax is accounted under equity as well as the related transaction.

Current income tax

Current income tax expense is calculated taking into account tax legislation in force in the countries where the Group's subsidiaries operate as of the date of the consolidated statement of financial position. According to Turkish tax legislation, legal or business centers institutions in Turkey, the corporation is subject to tax. Current year tax liability is calculated on the portion of the period profit subject to taxation. Taxable profit differs from the profit included in the income statement because it excludes taxable or tax-deductible items in other years or taxable items that cannot be deducted from taxable income. The Group's current income tax liability is calculated using tax rates that are legally enacted or substantively enacted by the balance sheet date.

The corporate tax rate in Turkey is 25% (25% was applied for the corporate earnings of the institutions for the 2023 taxation periods). The corporate tax rate is the addition of the expenses that are not considered to be deductible in accordance with the tax laws to the commercial income of the corporations. is applied to the net corporate income to be found as a result of deducting the exceptions and deductions in the tax laws. Corporate tax is declared until the evening of the thirtieth day of the fourth month following the end of the year in which it relates, and is paid in one installment until the end of the relevant month.

Companies calculate provisional tax at a rate of 25% on their quarterly financial profits and declare and pay it by the 17th day of the second month following that period. The provisional tax paid during the year is related to that year and is offset against the corporate tax to be calculated on the corporate tax return to be submitted in the following year. If there is any amount of provisional tax paid remaining after the offset, this amount can be refunded in cash or offset against any other financial debt to the state.

2. Presentation of the financial statements (continued)

2.5 Summary of significant accounting policies (continued)

According to the Corporate Tax Law, financial losses shown on the declaration can be deducted from the corporate tax base of the period not exceeding 5 years. Declarations and related accounting records can be examined within five years of tax.

In Turkey, the resident companies from corporation tax and not responsible for the income tax and who are resident in Turkey, those made to those except for exempt and non-natural persons and dividend payments to legal persons not resident in Turkey are subject to 10% income tax.

Dividend payments made to resident corporations in Turkey again from resident companies in Turkey are not subject to income tax. In addition, if the profit is not distributed or added to the capital, the income tax is not calculated.

As of December 31, 2024 and 2023, the tax provision has been set aside under the current tax legislation.

25% of the profits arising from the sale of the intangible assets held in the assets for the same period as the 75% of the profits arising from the sale of founders' shares, founding shares and preferential rights, to be added to the capital as stipulated in the Corporate Tax Law or to be kept in a special fundaccount for 5 years.

Deferred tax

Deferred tax is determined by calculating the temporary differences between the carrying amounts of assets/liabilities in the financial statements and the corresponding tax bases, used in the computation of the taxable profit, using currently enacted tax rates. Deferred tax liabilities are generally recognized for all taxable temporary differences where deferred tax assets resulting from deductible temporary differences are recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary difference can be utilized. Such assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

In the deferred tax calculation, a tax rate of 25% is used for temporary differences expected to be realized/closed in 2024 and after.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized if it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis Deferred income tax is determined using tax rates that have been enacted by the balance sheet date.