Interim financial statements june 30, 2024

SAUDI KAYAN PETROCHEMICAL COMPANY (SAUDI KAYAN)

(A SAUDI JOINT STOCK COMPANY)

INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE THREE AND SIX-MONTH PERIODS ENDED

30 JUNE 2024

WITH

INDEPENDENT AUDITOR'S REVIEW REPORT

SAUDI KAYAN PETROCHEMICAL COMPANY (SAUDI KAYAN)

(A SAUDI JOINT STOCK COMPANY)

NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS

FOR THE THREE AND SIX-MONTH PERIODS ENDED 30 JUNE 2024

(EXPRESSED IN SAUDI RIYALS IN THOUSANDS, UNLESS OTHERWISE STATED)

1. CORPORATE INFORMATION
   Saudi Kayan Petrochemical Company (Saudi Kayan) ("the Company'') is a Saudi Joint Stock Company registered under Commercial Registration No. 2055008450 issued in Al Jubail on 26 Jumada'I 1428 H (12 June 2007G). The registered address of the Company is P.O. Box 10302, Al Jubail Industrial City, the Kingdom of Saudi Arabia. 35% of the Company's shares are owned by Saudi Basic Industries Corporation ("SABIC") and the remaining held by the general public.
   The Company is engaged in production of polypropylene, propylene, acetone, polyethylene, ethoxylate, ethylene, ethylene glycol, bisphenol, ethanolamine, industrial fatty alcohol, polycarbonate and other petrochemical products under an industrial license No. (218) dated 14 Shawwal 1443H (corresponding to 16 May 2022G) and ending on 14 Shawwal 1446H (corresponding to 13 April 2025G) issued by the Ministry of Industry and Mineral Resources.
   The Company has 33.33% interest in Saudi Butanol Company (Sabuco), a Saudi Arabian Mixed Limited Liability Company. Sabuco's principal activities comprise of a Butanol plant in Jubail for the production of N­Butanol and lso-Butanol. All of the N-Butanol and lso-Butanol produced by Sabuco is sold to the parties to the joint arrangement (i.e. the Company and other shareholders of Sabuco). Based on these facts and circumstances, it was assessed that the Company has rights to the assets and obligations for the liabilities relating to Sabuco and has therefore been classified as a joint operation. The Company has accounted for its share of assets, liabilities, income and expenses based on its 33.33% shareholding interest.
   Starting the second half of 2022, there was a significant decline in the sales prices of the Company's products in the global markets which resulted in a significant decrease in revenue, margin and profitability for the six- month period ended 30 June 2024 and 2023. Management believes that such decrease in sales prices is short‐ term and the sales price are expected to improve in the foreseeable future.
   As at 30 June 2024, the Company's current liabilities exceeded its current assets by Saudi Riyals 2.33 billion primarily due to expected scheduled debt repayments of Saudi Riyals 3.77 billion over the next twelve months which include Saudi Riyals 2.40 billion due against a revolving credit facility. The master facility agreement for this revolving credit facility is valid until 16 November 2027 and accordingly management of the Company believes that the repayment date of amounts due under the revolving credit facility will be rolled over beyond the twelve-month period. Furthermore, as at 30 June 2024, the Company also has access to undrawn borrowing facilities amounting to Saudi Riyals 0.6 billion from the same revolving credit facility. Accordingly, the Company has prepared the condensed interim financial statements on the basis that it will continue to operate as a going concern.
   These interim condensed financial statements have been approved on 22 Muharram 1446H (corresponding to 28 July 2024G).
2. BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES

2.1 Statement of compliance

These condensed interim financial statements have been prepared in accordance with International Accounting Standard 34 - "Interim Financial Reporting" ("IAS 34"), as endorsed in the Kingdom of Saudi Arabia and other standards and pronouncements issued by the Saudi Organization for Chartered and Professional Accountants ("SOCPA").

These condensed interim financial statements do not include all the information and disclosures required in a full set of annual financial statements and should therefore be read in conjunction with the Company's annual financial statements for the year ended 31 December 2023. An interim period is considered as an integral part of the whole fiscal year, however, the results of operations for the interim periods may not be a fair indication of the results of the full year operations.

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SAUDI KAYAN PETROCHEMICAL COMPANY (SAUDI KAYAN)

(A SAUDI JOINT STOCK COMPANY)

NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (CONTINUED) FOR THE THREE AND SIX-MONTH PERIODS ENDED 30 JUNE 2024

(EXPRESSED IN SAUDI RIYALS IN THOUSANDS, UNLESS OTHERWISE STATED)

2. BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

2.2 New standards, interpretations and amendments

a. New and revised standards with no material effect on the condensed interim financial statements

The accounting policies adopted in the preparation of these interim condensed financial statements are consistent with those followed in preparing the Company's annual financial statements for the year ended 31 December 2023, except for the adopted amendments to IFRS as elaborated in the next paragraph.

The Company has adopted the following relevant amendments to IFRS which are effective for periods beginning on and after 1 January 2024, and have no impact on the Company's transactions and balances for the current or prior periods:

1. • Amendments to IAS 1 - Non-current liabilities with covenants;
   • Amendment to IFRS 16 - Lease liability in sale and leaseback; and
   • Amendments to IAS 7 and IFRS 7 - Supplier finance arrangements.
2. New and revised standards issued but not yet effective
   Certain new accounting standards, amendments to accounting standards and interpretations have been published that are not mandatory for 30 June 2024 reporting periods and have not been early adopted by the Company. Management is in the process of assessing the impact of such new standards and interpretations on its financial statements.

3. RELATED PARTY TRANSACTIONS AND BALANCES

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