3Q 2024 Interim Report

Interim Report

(January 1 - September 30, 2024)

B. Company Information:

C. Shareholder Structure

The company's registered capital ceiling is 1,000,000,000 Turkish Lira, and its paid-in capital is 758,500,000 Turkish Lira, with no changes in the first half of 2024.

As of September 30, 2024 and December 31, 2023 the Group's shareholder structure is as follows:

1. As of September 30, 2024 and December 31, 2023, the Group shareholders have no hold of the shares in the publicly traded shares.

On May 31, 2024, Ahmet Faik Bitlis sold 4.400.000 shares of Polisan Holding A.Ş. to A. Melike Bitlis Bush. Following this transaction, Ahmet Faik Bitlis' share in the company's capital decreased to 7,83% as of May 31,2024, while A. Melike Bitlis Bush's share increased to 9,14%.

D. Amendments in the Articles of Association during the Period and the Reasons:

There is no change in the Articles of Association in this period.

This statement has been translated into English for informational purposes. In case of a discrepancy between the Turkish and the English versions of this disclosure statement, the Turkish version shall prevail.

3 | Polisan Holding, Interim Report for the period January 1 - September 30 2024

E. Board of Directors

At the Ordinary General Assembly meeting held on 26.04.2024, it was decided, in accordance with Article 10 of the Articles of Association, to set the total number of Board of Directors members at 6. The following Board Members, who are to serve for a period of one year, were elected at the relevant general assembly meeting:

By the decision of the Board of Directors dated 26.04.2024; Emin Bitlis Management Consulting Limited Company and its individual representative Tayfun Bayazıt have been appointed as the Chairman of the Board, and Ertuğrul Bitlis Management Consulting Limited Company and its individual representative Esra Yazıcı have been appointed as the Vice Chairman of the Board1.

F. Board Committees

By the decision of the Company's Board of Directors dated 29.04.2024 and within the framework of the provisions in the Capital Markets Board's Corporate Governance Communiqué, it has been decided to establish the committee structure as follows.

• It has been decided not to establish the Nomination Committee and the Remuneration Committee, and that their duties will be performed by the Corporate Governance Committee.

1 The biographies of the Board of Directors are available on the company's corporate website (www.polisanholding.com).

This statement has been translated into English for informational purposes. In case of a discrepancy between the Turkish and the English versions of this disclosure statement, the Turkish version shall prevail.

4 | Polisan Holding, Interim Report for the period January 1 - September 30 2024

G. Senior Management

The information regarding senior executives who have resigned and those who are currently in office during the year is as follows.:

POLİSAN HOLDİNG SENIOR MANAGEMENT2

POLİSAN HOLDİNG GROUP COMPANIES SENIOR MANAGEMENT

1. Number of Personnel, Collective Bargaining Practices, and Rights and Benefits Provided to Personnel and Workers

As of September 30, 2024, the average number of employees for the company, its subsidiaries, and business partnership is 1,124 (December 31, 2023: 1,101). In calculating the average numbers, the number of employees from Polisan Kansai Paint and Rohm and Haas were not weighted according to the Group's shareholding ratio but were taken as full numbers.

The provision for severance pay has been calculated as 77.181.783 Turkish Lira as of September 30, 2024 (December 31, 2023: 51.764.845 TL).

Collective Labor Agreement

Our Collective Labor Agreement with our subsidiary Poliport and Liman İş Union, which covers a three-year period from January 1, 2022, to December 31, 2024, is in effect. Additionally, an agreement was reached on April 2, 2024, during collective labor negotiations for the Dilovası, Adana, and Samsun facilities of Polisan Chemical Industry Inc. and Polisan Yapıkim Building Chemicals Industry and Trade Inc., which are members

2 The biographies of the Senior Executives are available on the company's corporate website (www.polisanholding.com).

This statement has been translated into English for informational purposes. In case of a discrepancy between the Turkish and the English versions of this disclosure statement, the Turkish version shall prevail.

5 | Polisan Holding, Interim Report for the period January 1 - September 30 2024

of the Lastik-İş Union. A two-year Collective Labor Agreement covering the period from January 1, 2024, to December 31, 2025, has been signed.

1. Financial Rights Provided to Members of the Management Body and Senior Executives

At the Ordinary General Assembly meeting held on April 26, 2024, it was decided that each Independent Board Member would be paid a monthly gross remuneration of 95.000 Turkish Lira for the 2024 fiscal year and until the subsequent Ordinary General Assembly meeting, while other Board Members would not receive any remuneration.

The total amount of compensation and similar benefits paid to senior management from January 1 to September 30, 2024, amounted to 30.320.337 Turkish Lira (January 1 - September 30, 2023: 11.526.655 Turkish Lira). The Group has designated the board members, the general manager, and the deputy general managers as senior management.

1. Significant Developments Related to Company Activities

A. Significant Developments in the first nine months of 2024

Statements Regarding the General Assembly Meeting (April 26, 2024)

The Ordinary General Assembly Meeting of the Company for the year 2023 was held on April 26, 2024, at 11:00 AM at the company's headquarters located at Dilovası Organize Sanayi Bölgesi, 1.Kısım, Liman Cad., No:7, Dilovası - Kocaeli. The meeting was conducted under the supervision of the Ministry Representative Sultan Kurbanoğlu, who was appointed by the Kocaeli Provincial Directorate of Commerce with their letter dated April 18, 2024, numbered 95967693. The Minutes of the General Assembly Meeting and the List of Attendees are available on the company's corporate website at www.polisanholding.com. The General Assembly was registered on May 3, 2024.

Dividend Distribution:

At the Ordinary General Assembly meeting held on April 26, 2024, Polisan Holding approved the Board of Directors' decision regarding dividend distribution, which was taken on April 1, 2024, and previously announced to the shareholders. It was decided to distribute a gross dividend of 90,000,000 TL on April 30, 2024. The cash dividend distribution was carried out between April 30 and May 3, 2024.

Resumption of Operations at Polisan Hellas (April 22, 2024)

According to the notification made by Polisan Hellas S.A. on April 22, 2024, the damage and repair works related to the flood disaster announced on the Public Disclosure Platform (KAP) on September 6, 2023, have been completed. It was reported that Polisan Hellas resumed production activities at its Volos factory as of April 19, 2024.

According to the disclosure from our subsidiary Polisan Hellas, the damage assessment related to the flood disaster, which we announced on the Public Disclosure Platform (KAP) on September 6, 2023, has been

This statement has been translated into English for informational purposes. In case of a discrepancy between the Turkish and the English versions of this disclosure statement, the Turkish version shall prevail.

6 | Polisan Holding, Interim Report for the period January 1 - September 30 2024

completed. The process has been finalized with a total payment of 7,700,000 Euros received from the insurance company, including the advance payment announced on KAP on October 20, 2023.

Investor Relations Unit

As of February 19, 2024, Banu Çamlıtepe has started working full-time in our company as the Investor Relations and Corporate Communications Manager.

Investor Relations Contact Information

Tel: +90 216 578 56 00

Email:yatirimciiliskileri@polisanholding.com.tr

B. Subsequent Events

Completion of the Poliport 8th Tank Farm Invetment

According to the announcement made by Poliport Kimya San. ve Tic. A.Ş., a subsidiary of Polisan Holding, the 8th tank farm renewal and modernization investment, which began in November 2023, has been completed. With the commissioning of the new tanks, the available commercial capacity has increased by 5,850 cubic meters.

C. Information on Investments

Total investment expenditures were TL 360.089.243 in 9M2024 (9M2023: TL 292.434.644).

Completion of Polisan Yapıkim Yapı Kimyasalları A.Ş.'s PCE (Polymer) Investment

As stated in the special condition announcement on November 13, 2023, the PCE (Polymer) investment with a capacity of 30,000 metric tons within the Adana factory limits of Polisan Yapıkim Yapı Kimyasalları A.Ş., a subsidiary of the Company, was completed and commenced on July 31, 2024. This investment is anticipated to not only increase capacity but also achieve savings in transportation, intermediate goods costs, storage, and handling expenses.

Completion of Poliport Kimya San. ve Tic. A.Ş.' 8th Tank Farm Renewal and Modernization Investment As disclosed on the Public Disclosure Platform on November 16, 2023, the investment for the renewal and modernization of the 8th tank farm of Poliport Kimya San. ve Tic. A.Ş., another subsidiary of the Company, was completed on November 6, 2024. With the commissioning of the new tanks, the available commercial capacity has increased by 5,850 cubic meters.

This statement has been translated into English for informational purposes. In case of a discrepancy between the Turkish and the English versions of this disclosure statement, the Turkish version shall prevail.

7 | Polisan Holding, Interim Report for the period January 1 - September 30 2024

D. Analysis Related to Operations

The Company's summary consolidated financial information for 9M2024, prepared in accordance with inflation accounting (IAS 29 "Financial Reporting in Hyperinflationary Economies")3, is provided below:

CONSOLIDATED INCOME STATEMENT SUMMARY

• Consolidated revenues amounted to 4.52 billion TL this year, down from 6.08 billion TL the previous year. Despite the revenue increase in Polisan Yapıkim and Poliport, the main reason for the decline in consolidated revenues is that Polisan Hellas resumed production on April 19, 2024, after the flood disaster, and, coupled with low demand, its revenues were approximately 1.3 billion TL lower

3 Unless otherwise stated, amounts in the tables and explanations are expressed in millions of Turkish Lira ("TL") in terms of the purchasing power of the Turkish Lira as of September 30, 2024.

This statement has been translated into English for informational purposes. In case of a discrepancy between the Turkish and the English versions of this disclosure statement, the Turkish version shall prevail.

8 | Polisan Holding, Interim Report for the period January 1 - September 30 2024

compared to the same period last year. Polisan Hellas generated 549 million TL in revenue during 9M2024, while in the same period of 2023, it was 1.886 billion TL.

• Another factor contributing to the decline in consolidated revenues this quarter is the widening gap between inflation and exchange rates. This has negatively impacted revenues for group companies that primarily generate income in foreign currencies. Furthermore, weak demand and low order volumes for chemical products in both domestic and European markets, along with low dollar-based prices, have adversely affected production and exports in Turkey's chemical sector, leading to a decrease in the Company's chemical segment revenues.
• Despite challenging economic and commercial conditions, consolidated Gross Profit for 9M2024 remained at the same level as the previous year, reaching 1.104 million TL. The Gross Profit margin increased by 5.8 percentage points, rising from 18.7% in 9M2023 to 24.4% this year. The widening gap between inflation and exchange rates continued to worsen in the third quarter compared to the first half of the year, negatively impacting profitability, along with rising freight and raw material costs due to geopolitical tensions in the Red Sea, particularly affecting Polisan Yapıkim. However, the increase in value-added products in port operations, price increases in sales, and a reduction in Polisan Hellas's operating losses contributed to maintaining Gross Profit at similar levels to the same period last year.
• Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) for 9M2024 reached 842 million TL. The holding's consolidated EBITDA margin increased from 15.9% in 9M2023 to 18.6% in
  9M2024.
• Other Net Operating Expenses improved by 59 million TL due to a decrease in foreign exchange losses, reaching 41 million TL in 9M2024.
• The share of profit/loss from investments accounted by the equity method recorded a loss of 304 million TL in 9M2024. In the paint segment, a contraction in domestic demand and declining profit margins in the third quarter reduced operational profitability, while high financing costs throughout the year were the main contributors to the loss.
• Due to a decrease in interest income, increased net financial expenses, and a monetary loss of 143 million TL, along with the impact of 212 million TL in deferred tax expenses, a Net Loss of 403 million TL was recorded in 9M2024. The increase in deferred tax expenses stemmed from the inflation accounting applied to tangible fixed assets and the revaluation of investment properties, which led to a higher deferred tax base effect, further impacted by the widening gap between CPI and PPI in 2024.

CONSOLIDATED CASH FLOW SUMMARY

This statement has been translated into English for informational purposes. In case of a discrepancy between the Turkish and the English versions of this disclosure statement, the Turkish version shall prevail.

9 | Polisan Holding, Interim Report for the period January 1 - September 30 2024

• Cash flows from operating activities amounted to -68 million TL, affected by decreased operational profitability and an increase in working capital. The 564 million TL impact on working capital stemmed from Polisan Hellas resuming production in April and altering its sales strategy. Polisan Hellas's inventories rose by 298 million TL compared to year-end, while trade payables decreased by 264 million TL due to raw material payment settlements. While effective working capital management continued at Polisan Kimya and Poliport, Yapıkim's trade receivables collection periods extended due to contraction in domestic demand, contributing to the increase in net working capital.
• With the slowdown in the real estate sector, cash inflows from the Z Office Project sales totaled 4 million TL in 9M2024 (9M2023: 65 million TL). Investment expenditures reached 360 million TL in 9M2024, up from 292 million TL in the same period last year. Due to increased investment spending, cash outflows from investment activities totaled 324 million TL (9M2023: 101 million TL cash outflow).
• In 9M2024, net cash inflows from loans amounted to 370 million TL, with 62 million TL in interest payments and 67 million TL in lease payments. Polisan Hellas utilized a net 487 million TL loan for financing raw material purchases, while other group companies repaid 117 million TL in loans. Including the 103 million TL dividend payment made in the second quarter, net cash inflows from financing activities amounted to 138 million TL (9M2023: 817 million TL cash outflow).

CONSOLIDATED BALANCE SHEET SUMMARY

*Based on Rolling Net Profit and EBITDA figure

This statement has been translated into English for informational purposes. In case of a discrepancy between the Turkish and the English versions of this disclosure statement, the Turkish version shall prevail.

10 | Polisan Holding, Interim Report for the period January 1 - September 30 2024