Improvements 2023

Kobirate's rating resulted in our Company's Corporate Governance Compliance Rating Note being set at 9.4/10.0 as of April 2023, and we have been included in the Borsa Istanbul Corporate Governance Index. Work continues for Borsa Istanbul Sustainability Index participation.

Biotrend's Sustainable Lease Certificates issuance, with an issuance ceiling of 100 million TL, was approved by the CMB in April 2023. On April 27, we completed the sale of sustainable lease certificates totaling 60 million TL with a maturity of 3 months, and on June 14, 2023, we completed the sale of 40 million TL sustainable lease certificates with a maturity of 84 days.

In the fourth quarter of 2022, we earned USD 5 million from carbon credits, followed by USD 2 million in the first half of 2023.

In March 2023, we signed a memorandum of understanding with UOP LLC of the Honeywell group for License, Guarantee, and Equipment Supply Agreement. We received an invitation from the Ministry of Industry and Technology of the Republic of Turkey for application under the project-based incentive system for our planned investment. Work is ongoing regarding the project.

As part of continuous improvement activities, we reached a total installed capacity of 118.42 MWe with capacity increases at Ezine Biomass and Serenti Energy Facilities.

We signed a letter of intent on September 9, 2022, with UOP LLC of Honeywell group companies in the United States for collaboration in establishing Honeywell UpCycle plant in Turkey to implement Honeywell's UpCycle Process Technology. Subsequently, on March 28, 2023, our subsidiary Biotrend Advanced Recycling and Renewable Energy Technologies Inc., entered into a process license agreement, guarantee agreement, and main equipment supply agreement with UOP Limited of Honeywell group companies in the United Kingdom. Additionally, a memorandum of understanding regarding future shareholding and investment was signed between our Company and UOP Limited for future shareholding in Biotrend Advanced Recycling. UOP Limited will invest in Biotrend Advanced Recycling, with its shareholding in Biotrend Advanced Recycling's capital being envisaged as non-controlling minority shareholding. Engineering, procurement, and construction (EPC) terms related to the project's structuring and ongoing project finance studies, based on previously signed protocols for the continuation of the project, have also been concluded with the signing of the final contract between Honeywell UOP Limited and Biotrend Advanced Recycling and Renewable Energy Technologies Inc.

Biotrend started carbon credit projects in 2021 with Harmandalı, Balıkesir, and Uşak projects under Verra, GCC, and ICR certificate programs, documenting the positive environmental impact through audits conducted by third-party independent organizations. In 2023, it advanced its work to cover all facilities. Accordingly, carbon reduction certification projects are being carried out under the aforementioned certificate programs.

With the Presidential Decree published in the Official Gazette dated November 5, 2023, and numbered 7885, a decision was made to grant state aid and incentives for the investment project to be carried out in Izmir by our subsidiary Biotrend Advanced Recycling and Renewable Energy Technologies Inc., for the production of pyrolysis oil from Nafta substitution recycling. It is envisaged that our total fixed investment of 9.2 billion TL will be completed within 3 years from March 1, 2023. The Ministry of Industry and Technology may grant additional time for the completion of the investment. Support elements for the investment include customs duty exemption, VAT exemption, VAT refund, tax reduction (tax reduction rate: 100%, investment contribution rate: 60%, rate at which investment contribution amount can be used during the investment period: 100%), employer's share support for insurance premium (without maximum amount limit for 5 years), qualified personnel support (maximum 100,000,000 TL), and investment site allocation.

As of April 3, 2023, Mr. Osman Nuri Vardı, Vice Chairman of the Board of Directors and CEO of our Company, has resigned from his position as CEO and continues his duties as Vice Chairman of the Board of Directors. Following Mr. Osman Nuri Vardı, Mr. Özgür Umut Eroğlu assumed the CEO position. Mr. Özgür Umut Eroğlu, who has nearly 30 years of international experience in the energy, oil and gas, and defense industries, has held various senior positions, including CEO and Chairman of the Board of Directors, in the energy sector. The first tomato seedling plantings under greenhouse farming activities have been carried out. The greenhouse investment, aimed at producing approximately 2,500 tons of cluster tomatoes annually using soilless farming techniques on a 54,000 m2 plot of land in Sivas, was completed in 2022. The first tomato seedling plantings in Sivas Seras were carried out in September 2023.

On April 6, 2023, upon approval from the Capital Markets Board, we completed the sale of sustainable lease certificates totaling 100,000,000 TL to qualified investors domestically through a management contract based on Biotrend Environment and Energy Investments Inc.

Our 100% subsidiaries, Doğu Star Electricity Production Inc. ("Doğu Star"), Biotrend Ayvacık Renewable Energy Electricity Production Industry and Trade Inc. ("Biotrend Ayvacık"), and Uşak Renewable Energy Electricity Production Inc., increased their capital during the period and were published in the Turkish Trade Registry Gazette.

At the Board of Directors meeting dated February 14, 2023, the Board of Directors decided to carry out share buyback transactions by our Company. In this context, it was determined that the fund to be allocated for share buybacks will be a maximum of 100,000,000 TL from our Company's own resources, and the maximum number of shares to be repurchased was determined as 5,000,000 shares. The maximum period for the planned share buyback transactions was set as 3 years from the date of the Board of Directors' Resolution.

As a result of the rating study conducted by Kobirate International Credit Rating Services and Corporate Governance Inc. to rate compliance with the "Corporate Governance Principles", our Company's Corporate Governance Compliance Rating Note was determined as 9.4 as of April 13, 2023 (out of 10 full points). The results of the rating by main headings (out of 100 full points) are as follows: Shareholders section: 92.93, Public Disclosure and Transparency section: 98.11, Stakeholders section: 95.27, Board of Directors section: 91.31.

Biotrend established the Sustainability Committee in March to strengthen its communication with all stakeholders and enhance its environmental, social, and governance sustainability performance. Biotrend was also selected as one of four firms from Turkey for the Climate Finance Acceleration Program (CFA) supported by the United Kingdom. Participation was achieved in the program held in London in March 2023, where climate-sensitive investors and financial institutions attended. Contacts were made by presenting projects to potential investors.

Biotrend Environment and Energy Investments Inc. was evaluated by JCR Eurasia. As a result of the evaluation, the Long-Term National Institutional Credit Rating of "Biotrend Environment and Energy Investments Inc." was confirmed as "A+ (tr)".

In March 2023, we signed a memorandum of understanding with UOP LLC of the Honeywell group for License, Guarantee, and Equipment Supply Agreements. We received an invitation from the Ministry of Industry and Technology of the Republic of Turkey for application under the project-based incentive system for our planned investment. Work continues regarding the project.

In 2022, alongside Sivas BES, we completed the investment in Sivas Seras on a 54,000 m2 plot of land for soilless farming activities. The first tomato seedling plantings in Sivas Seras were carried out in September 2023. As part of continuous improvement activities, we continue with capacity increases in our facilities. With the capacity increase at Ezine Biomass facility, we reached a total installed capacity of 114.179 MWe.

At Biotrend, during this period, we continue our efforts in organizational restructuring under our strategies and corporate governance, planning to increase the capacity utilization of our facilities, sustainability initiatives, digitalization, and transformation infrastructure projects. We are progressing rapidly with new goals in the implementation efforts of the Honeywell Project.