Saudi Kayan Petrochemical : INTERIM FINANCIAL STATEMENTS SEPTEMBER 30,2023

SAUDI KAYAN PETROCHEMICAL COMPANY (SAUDI KAYAN)

(A SAUDI JOINT STOCK COMPANY)

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

30 SEPTEMBER 2023

WITH

INDEPENDENT AUDITOR'S REVIEW REPORT

SAUDI KAYAN PETROCHEMICAL COMPANY (SAUDI KAYAN)

(A SAUDI JOINT STOCK COMPANY)

INTERIM CONDENSED STATEMENT OF CASH FLOWS (CONTINUED) FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2023

(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.
   During 2023, the Company has conducted major inspections (turnarounds / shutdown plans) in certain plants.
   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 three and nine-month periods ended 30 September 2023 and 2022. Management believes that such decrease in sales prices is short‐term and the sales prices are expected to improve in the foreseeable future. Also see Note 5.
   As at 30 September 2023, the Company's current liabilities exceeded its current assets by SR 1.03 billion primarily due to expected scheduled debt repayments of SR 3.1 billion over the next twelve months which include SR 1.5 billion due against a revolving credit facility. The master facility agreement for this revolving credit facility is valid until 16 November 2027. Based on the terms of the agreement, a cash settlement cannot be enforced by the lender except in the case of non-compliance with the underlying covenants, a situation that management considers to be an unlikely event given the nature of these covenants. Accordingly, management believes that the repayment date of amounts due under the revolving credit facility will continue to be rolled over until the expiry of the agreement, as was the case in the past. Furthermore, as at 30 September 2023, the Company has access to undrawn borrowing facilities amounting to SR 1.5 billion under the same revolving credit facility.
   These interim condensed financial statements have been approved on 8 Rabi Al Thani 1445H (corresponding to 23 October 2023G).
2. BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES

2.1 Statement of compliance

7

SAUDI KAYAN PETROCHEMICAL COMPANY (SAUDI KAYAN)

(A SAUDI JOINT STOCK COMPANY)

NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (CONTINUED) FOR THE THREE AND NINE-MONTH PERIODS ENDED 30 SEPTEMBER 2023

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

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

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 2022. 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.

An interim period is considered 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.

2.2 New standards, interpretations and amendments

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 2022, 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 2023, and have no impact on the Company's transactions and balances for the current or prior periods:

• Definition of Accounting Estimates - (Amendments to IAS 8)
• Deferred Tax related to Assets and Liabilities arising from a Single Transaction - Amendments to IAS 12

There are no new accounting standards or amendments to accounting standards and interpretations that have been issued but not yet adopted by the Company.

8