Tümosan Motor ve Traktör Sanayi : 31.03.2024 Independent Audit Report

Tümosan Motor ve Traktör Sanayi A.Ş.

and its Subsidiaries

Summary of Consolidated Financial Information

for the Three-Month Interim Period

Ended 31 March 2024

Tümosan Motor ve Traktör Sanayi A.Ş.

and its Subsidiaries

Table of contents

Condensed Consolidated Interim Statement of Financial Position Condensed Consolidated Interim Statement of Profit or Loss

Condensed Consolidated Interim Statement of Other Comprehensive Income Condensed Consolidated Interim Statement of Changes in Equity Condensed Consolidated Interim Statement of Cash Flows

Notes to the Condensed Consolidated Interim Notes to the Financial Statements

Tümosan Motor ve Traktör Sanayi A.Ş. and its Subsidiaries

Condensed Consolidated Interim Statement of Financial Position

As at 31 March 2024

(The amounts are expressed in terms of purchasing power of Turkish Lira ('TL') as of 31 March 2024, unless otherwise specified)

	Note	Audited	Audited
ASSETS		31 March 2024	31 December 2023
Current Assets
Cash and cash equivalents	4	331.356.270	341.309.269
Financial investments	5	674.003.431	587.352.001
Trade receivables
-Trade receivables from related parties	3	378.322.263	646.243.952
-Trade receivables from non-related parties	7	833.489.606	1.230.965.108
Other receivables
- Other receivables from related parties	3	--	220.010
- Other receivables from non-related parties	8	35.329.369	4.932.936
Inventories	9	2.825.117.456	2.444.902.932
Prepaid expenses	10	247.639.145	223.621.562
Other current assets	17	231.399.442	243.652.743
Total Current Assets		5.556.656.982	5.723.200.513
Non-Current Assets
Other receivables
-Other receivables from non-related parties	8	170.082	195.703
Property, plant and equipment	12	3.777.925.518	3.812.834.889
Intangible assets	13	119.013.471	100.344.277
Investment property	11	86.040.134	86.040.134
Right of use assets	14	38.042.826	50.871.484
Total Non-Current Assets		4.021.192.031	4.050.286.487
Total Assets		9.577.849.013	9.773.487.000

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

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Tümosan Motor ve Traktör Sanayi A.Ş. and its Subsidiaries

Condensed Consolidated Interim Statement of Financial Position

As at 31 March 2024 (continued)

(The amounts are expressed in terms of purchasing power of Turkish Lira ('TL') as of 31 March 2024, unless otherwise specified)

	Note	Audited	Audited
LIABILITIES		31 March 2024	31 December 2023
Short Term Liabilities
Short term borrowings	6	1.717.931.924	1.510.763.037
Short term portion of long-term borrowings	6	28.952.455	35.252.246
Trade payables
- Trade payables to related parties	3	19.680.109	24.677.250
- Trade payables to non-related parties	7	845.498.087	1.376.146.245
Payables related to employee benefis	16	55.793.367	45.402.541
Other payables
Oyher Payables to Related Parties	8	39.650.307	25.411.298
- Other payables to non-related parties	10	167.880.853	195.417.229
Deferred income	23	83.863.536	95.092.428
Current period tax liability
Short term provisions	16	17.975.000	13.805.481
- Short term provisions for employee benefits	15	51.200.350	59.761.104
- Other short term provisions	14	1.361.407	2.026.819
Total Short Term Liabilities		3.029.787.395	3.383.755.678
Long term borrowings	6	63.017.751	82.485.935
Long term provisions
- Long term provisions for employee benefits	16	30.126.515	25.742.133
Liabilities from leasing transactions	14	12.858.731	14.795.722
Deferred tax liability	23	767.191.439	691.788.918
Total Long Term Liabilities		873.194.436	814.812.708
Total Liabilities		3.902.981.831	4.198.568.386
Equity Attributable to the Owners of the Company
Paid-in share capital	18	115.000.000	115.000.000
Capital adjustment differences		1.221.485.263	1.221.485.263
Share premium		133.669.706	133.669.706
Accumulated other comprehensive income
- Items will not to be reclassified in profit or loss		(23.179.418)	(17.703.661)
Restricted reserves		141.051.908	141.051.908
Retained earnings		3.981.415.398	3.221.965.830
Net profit for the period		105.424.325	759.449.568
Total Equity		5.674.867.182	5.574.918.614
Total Equity and Liabilities		9.577.849.013	9.773.487.000

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

2

Tümosan Motor ve Traktör Sanayi A.Ş. and its Subsidiaries

Condensed Consolidated Interim Statement of Profit or Loss

For the Three-Month Period Ended 31 March 2024

(The amounts are expressed in terms of purchasing power of Turkish Lira ('TL') as of 31 March 2024, unless otherwise specified)

	Note	Audited	Audited
		1 January-	1 January-
		31 March 2024	31 March 2023
Revenue	19	1.330.017.766	1.862.280.550
Cost of sales (-)	19	(982.177.929)	(1.412.511.096)
Gross profit		347.839.837	449.769.454
General administrative expenses (-)	20	(40.480.282)	(16.206.845)
Marketing expenses (-)	20	(122.623.893)	(161.147.534)
Research and development expenses (-)	20	(20.069.479)	(31.998.805)
Other operating income		23.526.183	70.421.766
Other operating expenses (-)		(37.584.689)	(84.119.764)
Operating profit		150.607.677	226.718.272
Incomes from investment activities	22	200.448.093	--
Expenses from investment activities		--	(67.827.588)
Operating profit before financial expenses, net		351.055.770	158.890.684
Financial income	21	27.094.989	20.655.128
Financial expenses (-)	21	(259.230.759)	(38.618.354)
Net monetary position gain /(loss)		88.903.546	110.555.916
Profit before tax		207.823.546	251.483.374
Taxbexpense	23	(102.399.221)	(108.712.229)
- Current tax expense for the period		(25.171.448)	(44.360.892)
- Deferred tax income		(77.227.773)	(64.351.337)
Profit for the period		105.424.325	142.771.145
Distribution of net profit for the period
Equity holders of the Company		105.424.325	142.771.145
Non-controlling interest		--	--
Number of shares	24	115.000.000	115.000.000
Earnings per share	24	0,92	1,24

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

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Tümosan Motor ve Traktör Sanayi A.Ş. and its Subsidiaries

Condensed Consolidated Interim Statement of Other Comprehensive Income For the Three-Month Period Ended 31 March 2024

(The amounts are expressed in terms of purchasing power of Turkish Lira ('TL') as of 31 March 2024, unless otherwise specified)

	Note	Audited	Audited
		1 January-	1 January-
		31 March 2024	31 March 2023
Profit for the period		105.424.325	142.771.145
Other comprehensive income
Not to be reclassified to profit or loss
- Actuarial differences	16	(7.301.009)	(20.785.802)
- Deferred tax income / (expense)	23	1.825.252	4.157.160
Total other comprehensive income		(5.475.757)	(16.628.642)
Total comprehensive income		99.948.568	126.142.503

Distribution of net profit for the period

Equity holders of the Company

Non-controlling interest

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

4

Tümosan Motor ve Traktör Sanayi A.Ş. and its Subsidiaries

Condensed Consolidated Interim Statement of Change in Equity

For the Three-Month Period Ended 31 March 2024

(The amounts are expressed in terms of purchasing power of Turkish Lira ('TL') as of 31 March 2024, unless otherwise specified)

				Accumulated Other
				Comprehensive
				Income and
				Expenses Not to be
				Reclassified to Profit
				or Loss
				Accumulated	Restricted
				Remeasurement
	Paid-In	Differences	Share	Reserves	Retained	Net Profit for
	Gains/Losses on	Total Equity
	Share	in Capital	Premiums	Appropriated	Earnings	the Period
	Defined Benefit
	Capital	Adjustment		Plans	from Profit
Balance at 1 January 2023	115.000.000	1.221.485.263	133.669.706	(9.599.469)	141.051.908	2.776.431.757	445.534.073	4.823.573.238
Transfers	--	--	--	--	--	445.534.073	(445.534.073)	--
Profit for the period	--	--	--	--	--	--	142.771.145	142.771.145
Other comprehensive income	--	--	--	(16.628.644)	--	--	--	(16.628.644)
Actuarial differences	--	--	--	(16.628.644)	--	--	--	(16.628.644)
Balance at 31 March 2023	115.000.000	1.221.485.263	133.669.706	(26.228.113)	141.051.908	3.221.965.830	142.771.145	4.949.715.739
Balance at 1 January 2024	115.000.000	1.221.485.263	133.669.706	(17.703.661)	141.051.908	3.221.965.830	759.449.568	5.574.918.614
Transfers	--	--	--	--	--	759.449.568	(759.449.568)	--
Profit for the period	--	--	--	--	--	--	105.424.325	105.424.325
Other comprehensive income	--	--	--	(5.475.757)	--	--	--	(5.475.757)
Actuarial differences	--	--	--	(5.475.757)	--	--	--	(5.475.757)
Balance at 31 March 2024	115.000.000	1.221.485.263	133.669.706	(23.179.418)	141.051.908	3.981.415.398	105.424.325	5.674.867.182

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

5

Tümosan Motor ve Traktör Sanayi A.Ş. and its Subsidiaries

Condensed Consolidated Interim Statement of Cash Flow

For the Three-Month Period Ended 31 March 2024

(The amounts are expressed in terms of purchasing power of Turkish Lira ('TL') as of 31 March 2024, unless otherwise specified)

	Note	Audited	Audited
		1 January-	1 January-
		31 March 2024	31 March 2023
Net profit for the period		105.424.325	142.771.145
Reconciliation of net cash provided by operating activities to net profit:
Depreciation and amortization	12,13,14	83.878.542	71.013.819
Provision for employee benefits	16	3.502.208	2.919.461
Fair value changes of financial investments
-Adjustments for fair value losses (gains) on financial assets	24	(200.448.093)	67.827.588
Tax (income)/ losses	25	102.399.221	108.712.229
Interest income	23,24	(27.094.989)	(20.655.128)
Provision of itigation and guarantee	15	764.114	18.235.672
Provisions for unused vacation	16	6.195.980	1.947.028
Provision of impairment/ (cancellation) of inventory	9	--	(1.753.100)
Interest expenses from leases	14	460.994	465.383
Interest expense	23	258.769.765	38.152.971
Monetary gains and losses		(51.984.504)	199.726.344
Operating cash flow before change in assets and liabilities
Changes in assets and liabilities
Change in trade receivables and other receivables		623.258.249	22.221.181
Change in inventories		(380.214.524)	(525.283.316)
Change in prepaid expenses and other current assets and liabilities		(11.764.282)	(60.256.445)
Change in trade payables and other payables		(521.406.290)	124.356.915
Change in payables related employee benefits		10.390.826	21.491.726
Change in deferred income		(27.536.376)	(162.777.271)
Employee severance indemnity paid	16	(3.032.166)	(17.887.077)
Payments related to leasing agreements	14	(875.730)	(794.939)
Taxes received / (paid)	25	55.329.347	54.284.010
Net cash generated / (used) from operations		26.016.617	84.718.196
Investing activities
Changes in financial investments		--	(71.418)
Cash inflows from the sale of shares or debt instruments		113.796.663	(243.795.622)
of other enterprises or funds
Purchases of tangible and intangible assets	12,13	(54.809.707)	(27.552.156)
Sales of tangible assets		--	77.981
Net cash generated / (used) in investing activities		58.986.956	(271.341.215)
Financing activities
Financial borrowings, net		181.400.912	122.111.654
Interest received		27.094.989	20.655.128
Interest paid		(258.769.765)	(38.152.971)
Net cash provided from financing activities		(50.273.864)	104.613.811
Net increase/(decrease) in cash and cash equivalents		34.729.709	(82.009.208)
Inflation effect on cash and cash equivalents		(44.682.708)	(301.811.756)
Cash and cash equivalents at the beginning of the period	4	341.309.269	742.442.622
Cash and cash equivalents at the end of the period	4	331.356.270	358.621.658

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

6

Tümosan Motor ve Traktör Sanayi A.Ş. and its Subsidiaries Notes to the Condensed Consolidated Interim Financial Statements As at and for the Three-MonthPeriod Ended 31 March 2024

(The amounts are expressed in terms of purchasing power of Turkish Lira ('TL') as of 31 March 2024, unless otherwise specified)

CONTENTS

1	Organization and Nature of Operation	8
2	Basis of Presentation of Financial Statements	10
2.1	Basis of Presentation	10
2.2	Compliance of TFRS	14
2.3	Changes in Accounting Policies	14
2.4	Changes in Accounting Estimates and Errors	16
2.5	Summary of Significant Accounting Policies	16
3	Related Party Disclosures	17
4	Cash and Cash Equivalent	20
5	Financial Investments	20
6	Financial Borrowings	20
7	Trade Receivables and Payables	21
8	Other Receivables and Payables	22
9	Inventories	23
10	Prepaid Expenses and Deferred Income	23
11	Investment Properties	23
12	Property, Plant and Equipment	24
13	Intengible Assets	26
14	Leasing Transactions	26
15	Provisions, Contingent Assets and Liabilities	28
16	Employee Benefits	30
17	Other Assets and Liabilities	32
18	Capital, Reserves and Other Equity Items	32
19	Revenue	33
20	Operating Expense	33
21	Finance Income and Expense	34
22	Income and Expense from Investment Activities	34
23	Income Tax	35
24	Earning per Share	36
25	Financial Instruments- Risk Management and Fair Value	36
26	Subsequent Events	39

7

Tümosan Motor ve Traktör Sanayi A.Ş. and its Subsidiaries

Notes to the Condensed Consolidated Interim Financial Statements

As at and for the Three-Month Period Ended 31 March 2024

(The amounts are expressed in terms of purchasing power of Turkish Lira ('TL') as of 31 March 2024, unless otherwise specified)

1 Organization and Nature of Operation

Tümosan Motor ve Traktör Sanayi A.Ş. (formerly known as Alçelik Çelik Yapı İnşaat Sanayi ve Ticaret Anonim Şirketi) ("Tümosan" or "the Company"), was established in 1975 to produce engine parts, transfer organs and similar equipment, but then concentrated its activities on diesel engine and tractor production. Tümosan, which is the first diesel engine producer of Turkey, along with providing diesel engines to tractors produced under the same brand, produced diesel engines for many years for other companies producing diesel vehicles.

The Company was taken into the scope and program of privatization on 18 August 1998 and the shares belonging to Mechanics and Chemistry İnstitution Corporation were transferred to Directorate of Privatization Administration and it was decided that privatization procedures shall be completed within a year.

Four companies participated in the privatization tender of the Company held on 24 April 2000 and at the end of the tender, Anadolu Joint Venture Group took the first place when Konya Selçuklu Joint Venture Group took the second place. At the end of the tender, since the sale contracts forwarded respectively to the ventures could not be signed within the specified time frame, their indemnities were recorded as revenue and the tender could not be concluded positively.

Tümosan, which continued its activities in a more limited frame after the tender, was adhered to Sümer Holding on 7 February 2003. For privatization purposes, the second tender was held in 2004 and Tümosan was acquired by Alçelik Çelik Yapı İnşaat Sanayi ve Ticaret A.Ş. through asset sale and the takeover was completed on 1 July 2004.

26% of the Company's shares were offered to public at Istanbul Stock Exchange on 5 December 2012. Since 5 December 2012, the shares of the Company are listed at Istanbul Stock Exchange.

The headquarters and factory of the Company is at the following addresses:

Headquarters:

Maltepe Mahallesi Londra Asfaltı Caddesi No:28/1 Topkapı, 34010, Zeytinburnu/İstanbul/Turkey

Factory:

Büyükkayacık Mahallesi Aksaray Çevre Yolu Caddesi No:7/1 Selçuklu/Konya/Turkey Information regarding the Company's shareholding interests and their shares is as follows:

	31 March 2024	31 December 2023
Name/ Title	Shareholding	Shareholding
Rates %	Rates %
Ereğli Tekstil Turizm Sanayi ve Ticaret A.Ş.	60,87	60,87
Muzaffer Albayrak	1,74	1,74
Ahmet Albayrak	1,74	1,74
Bayram Albayrak	1,74	1,74
Nuri Albayrak	1,74	1,74
Kazım Albayrak	1,74	1,74
Mustafa Albayrak	1,74	1,74
Halka açık kısım	28,69	28,69
Total	100,00	100,00

The main shareholder of the Company is Ereğli Tekstil Turizm Sanayi ve Ticaret A.Ş. ("Ereğli Tekstil") which is controlled by Albayrak Family.

8