**Exhibit 10.5**

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**IMPERIAL  CHEMICAL INDUSTRIES PLC**

**GROUP  RESULTS (Unaudited)   FOURTH  QUARTER AND FULL YEAR 2002**

| • | Group sales 3% lower for the quarter and 5% lower for the year, primarily the result of lower sales for the Regional and Industrial Businesses and adverse exchange rate movements. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Comparable International Business sales4% ahead for the quarter and 1% ahead for the year.                                                                                          |
| • | ComparableInternational Business trading profit 3% lower for the quarter and 1% lower for the year.                                                                                 |
| • | Group profit before      tax† £88m for the      quarter, 6% ahead of 2001.                                                                                               |
| • | Full year Group      profit before tax† £400m,      essentially in line with last year, and net profit† £264m,      2% up.                                    |
| • | Interest cover significantly improved: to 4.1 times for the quarter (2001:3.5) and 4.3 times for the year (2001:3.5).                                                               |
| • | Cash flow substantially better. Year end net debt £1,667m, £1,250m below last year.                                                                                     |
| • | Second interim dividend 4.5p per share.                                                                                                                                             |

**Brendan O’Neill, Chief Executive, commented:**

“Overall, our performance for both the quarter and the year was satisfactory, given the persistence of difficult conditions in many of our markets.  In these circumstances, I am particularly pleased to report sales growth for the International Businesses on a comparable basis – with excellent progress in Asia – and a substantial improvement in cash flow for the year.

With our strengthened balance sheet and continuing actions to improve our market positions and cost and capital effectiveness, ICI faces the uncertain economic outlook with increased confidence.”

**Further information**

Access will be available over the Internet to the results presentation to investment analysts at 9am on ICI's website, www.ici.com. A press conference will be held at UBS Warburg Conference Centre at 11.00am.

† Profit and EPS figures are quoted before goodwill amortisation and exceptional items throughout this statement unless otherwise stated. References to **“Comparable”** performance throughout this statement exclude the effect of currency translation differences and the impact of acquisitions and divestments on the results reported by the International Businesses. Reconciliation to the **“Reported”** results can be found in the Appendix III to this document. 

 

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**GROUP  FINANCIAL REVIEW**

|                                                  |   |   | **Fourth Quarter**   |   | **Year** |                 |
|-------------------------------------------------------|--------|--------|----------------------|--------|----------|----------------------|
|                                                  |   |   | **2002****£m** |   |     | **2001****£m** |   |   | **2002****£m** |   |   | **2001****£m** |   |
|                                                  |        |        |                      |        |          |                      |  |  |  |  |  |  |  |
| **Sales**                                             |   |   |                 |   |     |                 |   |   |   |   |   |   |   |
| - International Businesses*                           |   |   | 1,292                |   |     | 1,341                |   |   | 5,543 |   |   | 5,645 |   |
| - Total Group                                         |   |   | 1,460                |   |     | 1,508                |   |   | 6,125 |   |   | 6,425 |   |
|                                                  |        |        |                      |        |          |                      |  |  |  |  |  |  |  |
| **Trading Profit†**                              |   |   |                 |   |     |                 |   |   |   |   |   |   |   |
| - International Businesses*                           |   |   | 118                  |   |     | 134                  |   |   | 543 |   |   | 569 |   |
| - Total Group                                         |   |   | 115                  |   |     | 136                  |   |   | 533 |   |   | 573 |   |
|                                                  |        |        |                      |        |          |                      |  |  |  |  |  |  |  |
| Income from associates (net of      interest)         |   |   | 1                    |   |     | (20                  | ) |   | (10 | ) |   | (10 | ) |
| Net interest for the Group                            |   |   | (28                  | )      |     | (33                  | ) |   | (123 | ) |   | (162 | ) |
|                                                  |        |        |                      |        |          |                      |  |  |  |  |  |  |  |
| **Profit before tax†**                           |   |   | **88**               |   |     | **83**               |   |   | **400** |   |   | **401** |   |
|                                                  |        |        |                      |        |          |                      |  |  |  |  |  |  |  |
| Taxation†                                        |   |   | (25                  | )      |     | (24                  | ) |   | (115 | ) |   | (116 | ) |
| Attributable to minorities                            |   |   | (7                   | )      |     | (6                   | ) |   | (21 | ) |   | (26 | ) |
|                                                  |        |        |                      |        |          |                      |  |  |  |  |  |  |  |
| Net profit for the period†                       |   |   | 56                   |   |     | 53                   |   |   | 264 |   |   | 259 |   |
|                                                  |        |        |                      |        |          |                      |  |  |  |  |  |  |  |
| **Earnings per £1 Ordinary      Share**†   |   |   | **4.6**              | **p**  |     | **6.1**              | **p** |   | **23.7** | **p** |   | **29.8** | **p** |
| **Dividend per £1 Ordinary      Share**         |   |   |                 |   |     |                 |   |   | **7.5** | **p** |   | **13.3** | **p** |
| **Key      ratios**                                   |   |   |                 |   |     |                 |   |   |   |   |   |   |   |
| Trading margin (International      Businesses)†  |   |   | 9.1                  | %      |     | 10.0                 | % |   | 9.8 | % |   | 10.1 | % |
| Trading margin (ICI Group)†                      |   |   | 7.9                  | %      |     | 9.0                  | % |   | 8.7 | % |   | 8.9 | % |
| Interest cover – times†                     |   |   | 4.1                  |   |     | 3.5                  |   |   | 4.3 |   |   | 3.5 |   |
| Effective tax rate (comparative      full year)† |   |   |                 |   |     |                 |   |   | 29 | % |   | 29 | % |

|                       |
|----------------------------|
| **Basis of presentation:** |

| *International Businesses comprise      National Starch, Quest, Performance Specialties and Paints. |
|-----------------------------------------------------------------------------------------------------|

| †Before goodwill      amortisation and exceptional items. 2001 has been restated for the bonus      element of the Rights Issue and FRS19. The full UK GAAP P&L account      is presented in Appendix I. |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| A further explanation is included      in Appendix VIII including the definitions for key ratios. |
|---------------------------------------------------------------------------------------------------|

2

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**GROUP FINANCIAL REVIEW (continued)**

**Trading performance**

Comparable sales for the International Businesses were 4% ahead for the quarter, with excellent growth in Asia (+11%), and continued growth in both North America (+4%) and Europe (+3%), offsetting another difficult quarter in Latin America (–12%).  Each of the International Businesses delivered comparable sales growth for the quarter.  Group sales for the quarter were £1,460m, 3% below 2001, mainly due to adverse exchange rates and business divestments.

For the year, comparable sales for the International Businesses were 1% ahead, with growth in all regions except Latin America.  Group sales were £6,125m, 5% lower than 2001, largely as a consequence of lower sales for the Regional and Industrial businesses and adverse exchange rates.

For the quarter, Paints delivered comparable trading profit growth of 12%, and National Starch was 6% ahead, but lower profits for Quest and Performance Specialties resulted in 3% lower comparable trading profit for the International Businesses.  Quest delivered £13m trading profit for the quarter, after an estimated £8m impact from flavour production issues resulting from second quarter systems changes in the Netherlands.  The production issues are now essentially resolved, and the cost impact in 2003 is expected to be less than £5m.

Lower trading profit from Regional and Industrial, and the impact of divestments and exchange rate movements resulted in Group trading profit for the quarter of £115m, 15% below last year.

For the full year, comparable trading profit for the International Businesses was only 1% lower than 2001.  Paints (+9%) and National Starch (+5%) both made good progress in difficult circumstances, but profits were lower for Quest (–23%) and Performance Specialties (–24%), with Uniqema being particularly affected by rising raw material costs in the second half of the year.

A £14m reduction in trading profit from Regional and Industrial, and the impact of divestments and exchange rate movements contributed to Group trading profit for the year of £533m, 7% lower than 2001.

Profit before tax of £88m for the quarter was 6% ahead of 2001, with a £21m improvement in income from associates (principally due to the absence of 2001 losses from Huntsman International) and a further reduction in net interest cost more than offsetting the lower trading profit.  Full year profit before tax of £400m was essentially in line with 2001, and with the tax rate maintained at 29%, and lower profit attributable to minorities, net profit of £264m was 2% ahead.

3

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**GROUP FINANCIAL REVIEW (continued)**

| **Operating      cash flow**                                                             |   |   | **Year****2002****£m** |   |   | **Year****2001****£m** |   |
|------------------------------------------------------------------------------------------|--------|--------|------------------------------|--------|--------|------------------------------|--------|
|                                                                                     |        |        |                              |        |        |                              |        |
| Trading profit      before goodwill amortisation and exceptional items                   |   |   | 533                          |   |   | 573                          |   |
| Depreciation                                                                             |   |   | 196                          |   |   | 209                          |   |
|                                                                                     |        |        |                              |        |        |                              |        |
| Earnings before      Interest, Tax, Depreciation and Amortisation (“EBITDA”) |   |   | 729                          |   |   | 782                          |   |
| Movement in      working capital                                                         |   |   | 13                           |   |   | (30                          | )      |
| Capital expenditure                                                                      |   |   | (219                         | )      |   | (235                         | )      |
| Other items      including exceptional outflows against restructuring provisions         |   |   | (89                          | )      |   | (85                          | )      |
|                                                                                     |        |        |                              |        |        |                              |        |
| **Operating      cash flow after capital expenditure – Total Group1**               |   |   | **434**                      |   |   | **432**                      |   |
|                                                                                     |        |        |                              |        |        |                              |        |
| Interest and      tax excluding tax on divestments                                       |   |   | (191                         | )      |   | (224                         | )      |
| Dividends paid                                                                           |   |   | (127                         | )      |   | (205                         | )      |
| Acquisitions                                                                             |   |   | (17                          | )      |   | (68                          | )      |
|                                                                                     |        |        |                              |        |        |                              |        |
| **Net operating      cash in / (out) flow – Total Group**                           |   |   | **99**                       |   |   | **(65**                      | **)**  |
|                                                                                     |        |        |                              |        |        |                              |        |
| **Reshaping      and legacy cash flows**                                                 |   |   |                         |   |   |                         |   |
| Divestment proceeds from sale      of assets and businesses                              |   |   | 458                          |   |   | 344                          |   |
| Tax paid on divestments                                                                  |   |   | (8                           | )      |   | (21                          | )      |
| Payments against divestment provisions                                                   |   |   | (133                         | )      |   | (298                         | )      |
| Special top up pension payment                                                           |   |   | (30                          | )      |   | (30                          | )      |
| Loans to associates and other      investments                                           |   |   | (37                          | )      |   | (41                          | )      |
|                                                                                     |        |        |                              |        |        |                              |        |
| **Net cash in / (out) flow due      to reshaping and legacy items**                      |   |   | **250**                      |   |   | **(46**                      | **)**  |
|                                                                                     |        |        |                              |        |        |                              |        |
| **Movement in net debt**                                                                 |   |   |                         |   |   |                         |   |
| **Opening net debt**                                                                     |   |   | (2,917                       | )      |   | (2,799                       | )      |
|                                                                                     |        |        |                              |        |        |                              |        |
| Net operating cash in / (out)      flow                                                  |   |   | 99                           |   |   | (65                          | )      |
| Net cash in / (out) flow due      to reshaping and legacy items                          |   |   | 250                          |   |   | (46                          | )      |
|                                                                                     |        |        |                              |        |        |                              |        |
| **Cash flow before financing**                                                           |   |   | **349**                      |   |   | **(111**                     | **)**  |
| Net proceeds from the Rights      issue                                                  |   |   | 807                          |   |   | –                       |   |
| Non cash movements in net debt      arising on foreign currency translation              |   |   | 94                           |   |   | (7                           | )      |
|                                                                                     |        |        |                              |        |        |                              |        |
| **Total movement in net debt**                                                           |   |   | **1,250**                    |   |   | **(118**                     | **)**  |
|                                                                                     |        |        |                              |        |        |                              |        |
| **Closing net debt**                                                                     |   |   | **(1,667**                   | **)**  |   | **(2,917**                   | **)**  |
|                                                                                     |        |        |                              |        |        |                              |        |

Note:1Appendix VI includes notes  reconciling this presentation to the UK GAAP FRS1 cash flow statement

4

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**GROUP FINANCIAL REVIEW (continued)**

**Cash flow – Basis of presentation**

This analysis of Group cash flow distinguishes  between cash flows relating to operating activities and those related to portfolio  reshaping and legacy issues. Included within "reshaping and legacy" are gross  proceeds from divestments, cash expenditures following divestments (including  tax paid and payments against divestment provisions, which, in some cases, will  continue for a number of years), the ICI UK Pension Fund top-up payments, and  loans to associates and other investments. Management believes this presentation  provides important financial information relating to the continuing operating  activities of the Group and the cash flows relating to the divestment programme  and the transformation of the Group. This should not be considered as an alternative,  but as supplementary to the presentation of cash flows in accordance with UK  GAAP included in Appendix VI.

**Operating cash flow**

The Group’s net operating cashflow improved substantially for the year. Group earnings before interest, tax, depreciation and goodwill amortisation for the year, at £729m, were 7% below 2001, mainly as a result of lower trading profit. However, the benefits of further working capital efficiency improvements – resulting in a small cash inflow from working capital for the year – and somewhat lower capital expenditure delivered operating cash flow after capital expenditure of £434m, slightly better than 2001. Including the benefit of the revised dividend policy and the cash interest benefits of the Rights Issue, net interest, tax (excluding tax on divestments) and dividend payments reduced by £111m for the year. With acquisition expenditure £51m lower, the Group generated a 2002 net operating cash****inflow of £99m, £164m better than for 2001.

**Reshaping and legacy outflows**

The successful divestment of Synetix  (gross proceeds of £260m received in the fourth quarter) and the proceeds  from the first instalment in relation to the sale of ICI’s interests in  Huntsman International (£109m received in the first half) were the major  contributors to overall 2002 divestment proceeds of £458m, £114m  more than for 2001. Payments against divestment provisions were also £165m  lower than for 2001. Reflecting these factors, the 2002 cash flow due to reshaping  and legacy items was an inflow of £250m, £296m better than for 2001.  

**Movement in Net Debt**

Cash flow before financing for the year, at £349m, was £460m better than for 2001. In combination with the £807m proceeds from the Rights Issue, and a favourable exchange rate translation impact of £94m, this reduced year end net debt by £1,250m, to £1,667m.

5

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**GROUP FINANCIAL REVIEW (continued)**

**Exceptional Items**

|                                                        |   | **Fourth Quarter**   |   |   | **Year**             |   |
|-------------------------------------------------------------|--------|----------------------|--------|--------|----------------------|--------|
|                                                        |   | **2002****£m** |   |   | **2001****£m** |   |   | **2002****£m** |   |   | **2001****£m** |   |
|                                                        |        |                      |        |        |                      |        |  |  |  |  |  |  |
| Exceptional operating items in      trading profit          |   | –               |   |   | (122                 | )      |   | – |   |   | (143 | ) |
| Share of associates’ exceptional      operating items |   | –               |   |   | (9                   | )      |   | – |   |   | (9 | ) |
| Profit/(loss) on sale or closure      of operations         |   | 43                   |   |   | 16                   |   |   | 50 |   |   | 7 |   |
| Profit/(loss) on disposal of      fixed assets              |   | (2                   | )      |   | 6                    |   |   | 3 |   |   | 8 |   |
| Write off of investments                                    |   | (99                  | )      |   | (22                  | )      |   | (99 | ) |   | (22 | ) |
|                                                        |        |                      |        |        |                      |        |  |  |  |  |  |  |
| Exceptional items before tax      and minority interests    |   | (58                  | )      |   | (131                 | )      |   | (46 | ) |   | (159 | ) |
| Taxation                                                    |   | 7                    |   |   | 27                   |   |   | 4 |   |   | 19 |   |
| Minority interests                                          |   | (3                   | )      |   | (3                   | )      |   | (6 | ) |   | (2 | ) |
|                                                        |        |                      |        |        |                      |        |  |  |  |  |  |  |
| Exceptional items after tax and      minority interests     |   | (54                  | )      |   | (107                 | )      |   | (48 | ) |   | (142 | ) |
|                                                        |        |                      |        |        |                      |        |  |  |  |  |  |  |

Exceptional profits on sale or closure of operations for the fourth quarter included a £90m profit before tax on the sale of our catalyst business, Synetix, partially offset by a £32m loss on the divestment of the UK Nitrocellulose and Energetic Technologies businesses. The balance represented a number of smaller divestments and closures. 

Amounts written off investments of  £99m related to provisions for ICI’s existing investments in Ineos-Chlor,  where uncertainty exists as to the extent to which, and period over which, these  amounts will be recovered.

After tax and minority interests, exceptional items amounted to a loss of £54m for the quarter.

Exceptional items for the year amounted to a loss of £48m and included, in addition to items mentioned above, a profit on sale of the Security Systems business and a write down of our investment in an associate company, Irish Fertilisers Industries, where a liquidator was appointed in November 2002.

**Restructuring**

In November 2001 we announced a major  programme to improve cost effectiveness and supply chain efficiency across all  the International Businesses. By the end of 2004, the programme was expected  to result in exceptional cash expenditure of £120m, targeted at delivering  annualised savings of some £60m, reducing working capital by more than  £50m, and reducing headcount by 1,300.

In 2002, the programme delivered cost savings of £26m in comparison to an original estimate of £20m.  However, following the 2002 flavour production problems in Quest, certain elements of the programme will be deferred, specifically those related to Quest’s further deployment of new supply chain systems.  Consequently, by the end of 2004, the overall ICI programme is now expected to deliver annualised savings of some £52m and a working capital reduction of more than £35m.  Expected headcount reductions have increased to more than 1,450.

6

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**OPERATIONAL REVIEW**

The financial numbers and tables in the following section are presented in pounds sterling and are “as reported”. As reported numbers include the effects of currency translation, acquisitions and divestments and are quoted before accounting for goodwill amortisation and exceptional items.  

Unless otherwise stated, the commentary on pages 8 through 11, for the International Businesses  (National Starch, Quest, Performance Specialties and Paints) refers to performance measured on a “comparable basis” excluding the effect of currency translation differences and the impact of acquisitions and divestments. In respect of Performance Specialties the divestments included the Synetix and Security Systems businesses. A reconciliation of the percentage movements between “comparable” and “as reported” results is provided in Appendix III. Commentary on the Regional and Industrial businesses is “as reported” rather than “comparable”.  

Further explanations in respect of, the Group’s segmentation, references to comparable performance, and “EBITDA” definition are set out in Appendix VIII. 

**Segment Information –“As reported” basis**

|                                                                             |   | **Fourth Quarter**   |   |   | **Year**             |   |
|----------------------------------------------------------------------------------|--------|----------------------|--------|--------|----------------------|--------|
|                                                                             |   | **2002****£m** |   |   | **2001****£m** |   |   | **2002****£m** |   |   | **2001****£m** |   |
|                                                                             |   |                      |   |   |                      |   |   |  |   |   |  |   |
| **Sales**                                                                        |   |                 |   |   |                 |   |   |   |   |
| National Starch                                                                  |   | 453                  |   |   | 451                  |   |   | 1,841 |   |   | 1,853 |   |
| Quest                                                                            |   | 174                  |   |   | 172                  |   |   | 716 |   |   | 727 |   |
| Performance Specialties                                                          |   | 172                  |   |   | 199                  |   |   | 804 |   |   | 832 |   |
| Paints                                                                           |   | 493                  |   |   | 519                  |   |   | 2,182 |   |   | 2,233 |   |
|                                                                             |        |                      |        |        |                      |        |  |  |  |  |  |  |
| International Businesses                                                         |   | 1,292                |   |   | 1,341                |   |   | 5,543 |   |   | 5,645 |   |
| Regional and Industrial                                                          |   | 176                  |   |   | 175                  |   |   | 615 |   |   | 821 |   |
| Eliminations                                                                     |   | (8                   | )      |   | (8                   | )      |   | (33 | ) |   | (41 | ) |
|                                                                             |        |                      |        |        |                      |        |  |  |  |  |  |  |
| Total Group                                                                      |   | 1,460                |   |   | 1,508                |   |   | 6,125 |   |   | 6,425 |   |
|                                                                             |        |                      |        |        |                      |        |  |  |  |  |  |  |
| **EBITDA**                                                                       |   |                 |   |   |                 |   |   |   |   |   |   |   |
| National Starch                                                                  |   | 74                   |   |   | 76                   |   |   | 294 |   |   | 289 |   |
| Quest                                                                            |   | 17                   |   |   | 28                   |   |   | 100 |   |   | 126 |   |
| Performance Specialties                                                          |   | 12                   |   |   | 23                   |   |   | 78 |   |   | 98 |   |
| Paints                                                                           |   | 54                   |   |   | 51                   |   |   | 240 |   |   | 230 |   |
|                                                                             |        |                      |        |        |                      |        |  |  |  |  |  |  |
| International Businesses                                                         |   | 157                  |   |   | 178                  |   |   | 712 |   |   | 743 |   |
| Regional and Industrial                                                          |   | 4                    |   |   | 11                   |   |   | 17 |   |   | 39 |   |
|                                                                             |        |                      |        |        |                      |        |  |  |  |  |  |  |
| Total Group                                                                      |   | 161                  |   |   | 189                  |   |   | 729 |   |   | 782 |   |
|                                                                             |        |                      |        |        |                      |        |  |  |  |  |  |  |
| **Trading      Profit**(before goodwill amortisation      and exceptional items) |   |                 |   |   |                 |   |   |   |   |   |   |   |
| National Starch                                                                  |   | 58                   |   |   | 57                   |   |   | 224 |   |   | 218 |   |
| Quest                                                                            |   | 13                   |   |   | 23                   |   |   | 82 |   |   | 107 |   |
| Performance Specialties                                                          |   | 6                    |   |   | 16                   |   |   | 49 |   |   | 68 |   |
| Paints                                                                           |   | 41                   |   |   | 38                   |   |   | 188 |   |   | 176 |   |
|                                                                             |        |                      |        |        |                      |        |  |  |  |  |  |  |
| International Businesses                                                         |   | 118                  |   |   | 134                  |   |   | 543 |   |   | 569 |   |
| Regional and Industrial                                                          |   | (3                   | )      |   | 2                    |   |   | (10 | ) |   | 4 |   |
|                                                                             |        |                      |        |        |                      |        |  |  |  |  |  |  |
| Total Group                                                                      |   | 115                  |   |   | 136                  |   |   | 533 |   |   | 573 |   |
|                                                                             |        |                      |        |        |                      |        |  |  |  |  |  |  |

7

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**OPERATIONAL REVIEW (continued)**

**National  Starch**

| **4th Quarter**        |   |                   | **Full Year** |                |
|------------------------|--------|------------------------|---------------|---------------------|
| **2002      £m** |   | **2001      £m** |          | **Reported      %** |   | **Comparable      %** |   |   | **2002      £m** |   | **2001      £m** |   | **Reported      %** |   | **Comparable      %** |   |
| 453                    |   | 451                    |          | –              |   | 6 |   | Sales | 1,841 |   | 1,853 |   | (1 | ) | 2 |   |
|                        |   |                        |          |                     |   |  |   |   |  |   |  |   |  |   |  |   |
| 58                     |   | 57                     |          | 2                   |   | 6 |   | Trading Profit | 224 |   | 218 |   | 3 |   | 5 |   |
|                        |   |                        |          |                     |   |  |   |   |  |   |  |   |  |   |  |   |

**“Comparable”** percentages exclude the effect of currency translation differences and the impact of acquisitions and divestments. Reconciliation to **“Reported”** percentages for the International Business can be found in the Appendix III to this document.

National Starch comprises four distinct business groupings; Adhesives and Sealants (41% of National Starch’s sales in 2002), Food and Industrial Starch (26%), Specialty Synthetic Polymers (19%) and Electronic and Engineering Materials (14%).  The geographic split of sales by customer location for National Starch in 2002 was Europe 25%, North America 43%, Asia 26% and Latin America and Rest of World 6%.

National Starch finished the year  well, with sales for the quarter 6% ahead and trading profit 6% up. All regions  and businesses contributed to the top-line growth, with notable performances  in Asia and from the Electronic and Engineering Materials business.

For the year as a whole, sales were 2% ahead, with excellent progress in Asia (+9%) and a return to growth in North America (+1%).  With gross margin percentages slightly better, and tight control of fixed costs, trading profit was 5% ahead and trading margins improved to 12.2%.

**Adhesives** delivered a second consecutive quarter of sales growth, 4% ahead of last year.  All regions were ahead, with growth in China particularly strong and a number of successes with major accounts in North America.  However, adverse sales mix and some rises in raw material costs contributed to lower trading profit for the quarter.  For the full year, sales were 1% ahead.  Trading profit was also up, as gross margin percentages improved and the business benefited from savings from the 2001 exceptional programme.

**Starch** sales grew by 7% for the quarter and 4% for the year.  Good sales growth continued in both Europe and North America for the quarter, in part due to new business wins with both food and industrial customers.  Sales mix also improved from Q3 in the food sector, but gross margin percentages were below last year due to adverse mix and higher raw material costs and, consequently, trading profit was lower.

**Specialty Synthetic Polymer** sales were 4% ahead for the quarter, with good performances in Personal Care, Elotex and Asia.  Gross margin percentages remained ahead of last year and this, combined with continued strong cost control, led to good trading profit growth for the quarter.  For the year, sales were 2% ahead, with trading profit well up.

**Electronic and Engineering Materials** had a good fourth quarter with sales 12% ahead of a relatively weak final quarter of 2001.  Once again, all businesses contributed to the growth, with Ablestik 25% up despite relatively weak market conditions.  Gross margin percentages improved for the quarter and, despite fixed cost investment to support future growth, trading profit was well ahead of 2001.  For the year, EEM achieved sales growth of 6% and good growth in trading profit.

8

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**OPERATIONAL REVIEW (continued)**

**Quest**

| **4th        Quarter** |        |        |              |        |        | **Full        Year** |        |
|------------------------|--------|--------|--------------|--------|--------|----------------------|--------|
| **2002**               |        |        | **2001**     |        |        | **Reported**         |        |  | **Comparable** |  |  |  |  |  | **2002** |  |  | **2001** |  |  | **Reported** |  |  | **Comparable** |  |
| **£m**           |        |        | **£m** |        |        | **%**                |        |  | **%** |  |  |  |  |  | **£m** |  |  | **£m** |  |  | **%** |  |  | **%** |  |
|                        |   |        |              |   |        |                      |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |
| 174                    |   |   | 172          |   |   | 1                    |   |   | 5 |   |   | Sales |   |   | 716 |   |   | 727 |   |   | (2 | ) |   | 1 |   |
|                        |        |        |              |        |        |                      |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| 13                     |   |   | 23           |   |   | (43                  | )      |   | (43 | ) |   | Trading Profit |   |   | 82 |   |   | 107 |   |   | (23 | ) |   | (23 | ) |
|                        |        |        |              |        |        |                      |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

**“Comparable”** percentages exclude the effect of currency translation differences and the impact of acquisitions and divestments. Reconciliation to **“Reported”** percentages for the International Business can be found in the Appendix III to this document.

Quest comprises two distinct business groupings: Fragrances (40% of Quest’s sales in 2002) and Food (60%).  The geographic split of sales for Quest by customer location in 2002 was Europe 41%, North America 26%, Asia 18% and Latin America and Rest of World 15%.

Quest had a mixed final quarter of  2002. Sales growth, at 5%, was excellent. All regions other than Latin America  were ahead, with particularly strong performances in North America and Asia.  However, trading profit was impacted by adverse transactional exchange rate  movements and by an estimated £8m impact from the flavour production issues  resulting from the second quarter systems changes in the Netherlands. This included  £2m of unanticipated once-off stock write-offs. Consequently, reported  trading profit for the fourth quarter of £13m was £10m below last  year.

For the year, comparable sales were 1% ahead.  Gross margin percentages were maintained, but with the full year impact of the flavour production problems estimated at £17m, comparable trading profit was 23% lower.  These problems are now essentially resolved, and a cost impact of less than £5m is expected in 2003.

**Fragrance** sales for the quarter were 2% ahead, with strong performances in fine fragrances and personal care.  Sales to the household sector also improved.  However, gross margin percentages were negatively impacted by the weaker US dollar and this, in combination with continued investment in resource to support future growth, contributed to lower trading profit for the quarter.  For the year as a whole, sales were 1% lower despite a strong second half, and trading profit was consequently below 2001.

**Food**delivered 7% sales growth for the quarter and 2% for the year.  Good progress with key accounts continued, particularly in North America, and Asia also performed well.  Both flavours and food ingredients achieved good growth for the quarter, but with gross margin percentages and fixed costs negatively impacted by the Naarden supply chain problems, trading profit was well down for both the quarter and the year. 

9

----

**OPERATIONAL REVIEW (continued)**

**Performance  Specialties**

| **4th        Quarter** |        |        |              |        |        | **Full        Year** |        |
|------------------------|--------|--------|--------------|--------|--------|----------------------|--------|
| **2002**               |        |        | **2001**     |        |        | **Reported**         |        |  | **Comparable** |  |  |  |  |  | **2002** |  |  | **2001** |  |  | **Reported** |  |  | **Comparable** |  |
| **£m**           |        |        | **£m** |        |        | **%**                |        |  | **%** |  |  |  |  |  | **£m** |  |  | **£m** |  |  | **%** |  |  | **%** |  |
|                        |   |        |              |   |        |                      |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |
| 172                    |   |   | 199          |   |   | (14                  | )      |   | 8 |   |   | Sales |   |   | 804 |   |   | 832 |   |   | (3 | ) |   | 2 |   |
|                        |        |        |              |        |        |                      |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| 6                      |   |   | 16           |   |   | (63                  | )      |   | (34 | ) |   | Trading Profit |   |   | 49 |   |   | 68 |   |   | (28 | ) |   | (24 | ) |
|                        |        |        |              |        |        |                      |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

**“Comparable”** percentages exclude the effect of currency translation differences and the impact of acquisitions and divestments. In respect of Performance Specialties the divestments include the Synetix and Security Systems businesses. Reconciliation to **“Reported”** percentages for the International Business can be found in the Appendix III to this document.

Performance Specialties comprised two main businesses: Uniqema (83% of Performance Specialties’ sales in 2002) and Synetix (15%) together with other businesses (2%).  The geographic split of sales for Performance Specialties by customer location in 2002 was Europe 48%, North America 30%, Asia 15% and Latin America and Rest of World 7%. Additional information on Uniqema is given in Appendix VIII, note 2.

Reported sales and trading profit for Performance Specialties for the fourth quarter and full year reflect the effects of the Synetix divestment outside India on 1 November 2002, and in India on 2 December 2002.

**Uniqema** had a difficult fourth quarter, with trading profit impacted by weaker product mix and higher raw material prices. Overall volumes for the quarter were strong, with good growth in North America and Europe, and comparable sales were 8% ahead. Personal Care and Lubricants both performed well. Gross margins remained under pressure, however, as a result of weaker sales mix in fatty acids, and further increases in raw material costs. Price increases are now being implemented, but gross margin percentages were below last year for the quarter and, despite good fixed cost control, trading profit was well down. For the year as a whole, comparable sales for Uniqema were 2% ahead of 2001 but trading profit was 24% lower. 

**Paints**

| **4th        Quarter** |        |        |         |        |        | **Full        Year** |        |
|------------------------|--------|--------|--------------|--------|--------|----------------------|--------|
| **2002**               |        |        | **2001**     |        |        | **Reported**         |        |  | **Comparable** |  |  |   |  |  | **2002** |  |  | **2001** |  |  | **Reported** |  |  | **Comparable** |  |
| **£m**           |        |        | **£m** |        |        | **%**                |        |  | **%** |  |  |   |  |  | **£m** |  |  | **£m** |  |  | **%** |  |  | **%** |  |
|                        |   |        |              |   |        |                      |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |
| 493                    |   |   | 519          |   |   | (5                   | )      |   | 1 |   |   | Sales |   |   | 2,182 |   |   | 2,233 |   |   | (2 | ) |   | 1 |   |
|                        |        |        |              |        |        |                      |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| 41                     |   |   | 38           |   |   | 8                    |   |   | 12 |   |   | Trading Profit |   |   | 188 |   |   | 176 |   |   | 7 |   |   | 9 |   |
|                        |        |        |              |        |        |                      |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

**“Comparable”** percentages exclude the effect of currency translation differences and the impact of acquisitions and divestments. Reconciliation to **“Reported”** percentages for the International Business can be found in the Appendix III to this document.

The Paints business comprises two main businesses: the Decorative business (91% of Paints' sales in 2002) and Coatings (9%).  The geographic split of sales for Paints by customer location in 2002 was Europe 34%, North America 46%, Asia 12% and Latin America and Rest of World 8%.

Paints had another solid quarter, delivering sales 1% ahead of 2001.  All regions were ahead except Latin America, where difficult economic conditions persisted.  Geographic mix benefited gross margin percentages and, with good fixed cost control, comparable trading profit for the quarter was 12% ahead of last year. For the full year, comparable sales growth was also 1%, despite the Latin American economic difficulties.  The benefits of purchasing and reformulation initiatives during the year, and the North American restructuring programme, delivered trading profit of £188m, 9% ahead of last year.

10

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**OPERATIONAL REVIEW (continued)**

In**Europe** sales for the fourth quarter were 2% above last year with trading profit essentially in line.  Most countries performed well but were somewhat offset by weakness in Germany. Sales growth was 3% for the year overall, with a much stronger second half for the UK and France, and trading profit was consequently also ahead. 

**North American** sales were 1%  up for the quarter, as growth in the US residential sector continued to offset  weakness in the non-residential construction sector. Trading profit was up for  both the quarter and the year, aided by ongoing cost reduction activities. 

**Latin America** continued to suffer from very difficult economic conditions in the quarter. Sales in US$ terms were 23% below last year, although there was some stabilisation after recent quarters. Trading profit, although below 2001, was better in Q4 than Q3. Despite the benefits of a number of cost savings programmes, the business recorded a small trading loss for the year.

**Asia**had another excellent quarter, with 13% sales growth and particularly strong performances in Thailand, China and India. Trading profit was also well ahead for both the quarter and full year. 

The **Packaging**business delivered 1% sales growth for the year. For the quarter, sales were in line with last year but adverse sales mix led to lower trading profit. 

**Regional and Industrial**

| **4th        Quarter** |        |        |         |        |        | **Full        Year** |        |
|------------------------|--------|--------|--------------|--------|--------|----------------------|--------|
| **2002**               |        |        | **2001**     |        |        | **Reported**         |        |  |   |  |  | **2002** |  |  | **2001** |  |  | **Reported** |  |
| **£m**           |        |        | **£m** |        |        | **%**                |        |  |   |  |  | **£m** |  |  | **£m** |  |  | **%** |  |
|                        |   |        |              |   |        |                      |   |  |  |   |  |  |   |  |  |   |  |  |   |
| 176                    |   |   | 175          |   |   | 1                    |   |   | Sales |   |   | 615 |   |   | 821 |   |   | (25 | ) |
|                        |        |        |              |        |        |                      |        |  |  |  |  |  |  |  |  |  |  |  |  |
| (3)                    |   |   | 2            |   |   | n/a                  |   |   | Trading Profit |   |   | (10 | ) |   | 4 |   |   | n/a |   |
|                        |        |        |              |        |        |                      |        |  |  |  |  |  |  |  |  |  |  |  |  |

Regional and Industrial is shown on an “as reported” basis. The Regional and Industrial segment comprises the Group’s Regional businesses (of which the largest operation is the pure terephthalic acid (“PTA”) business in Pakistan) and some ongoing residual activity in the UK relating to legacy management.  The geographic split of sales for Regional and Industrial by customer relation in 2002 was Europe 41%, North America 3%, Asia 48% and Latin America and Rest of World 8%.

Sales for the Regional and Industrial businesses for the quarter were slightly ahead of last year, with growth in Pakistan offsetting lower sales in other regional businesses.  PTA margins held up better than we expected during the quarter, and Argentina also performed relatively well, but results were impacted by a £5m provision in relation to a continuing European court case involving ICI’s former Soda Ash business.  Consequently, Regional and Industrial recorded a trading loss of £3m for the quarter, £5m below 2001.

For the year, sales of £615m were 25% below 2001, mainly as a result of lower nil margin sales (2002: £209m vs 2001: £275m) and the impact of businesses divested in 2001.  Trading profit was £14m lower, as higher profits from Pakistan and Argentina were offset by the loss of profits from divested businesses and the impact of the Q4 provision.

11

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**ADDITIONAL  INFORMATION**

***FRS 17 Retirement Benefits***

This Standard sets out revised requirements for the accounting and disclosure of an employer's retirement benefit obligations and related funding.  The net recognised deficit and the net liability (after deferred tax) for 2001 and 2002 are presented below, analysed into their main components, and distinguishing between the funded retirement benefit schemes and the unfunded schemes.

| **Analysis      of net recognised (deficits) of major**               |   |   |   |   |   | **2002**     |   |   |   |   |   | **2001**     |   |
|-----------------------------------------------------------------------|--------|--------|--------|--------|--------|--------------|--------|--------|--------|--------|--------|--------------|--------|
| **Post-retirement      pension schemes**                              |   |   |   |   |   | **£m** |   |   |   |   |   | **£m** |   |
|                                                                  |        |   |   |        |        |              |        |   |   |        |        |              |        |
|                                                                  |   |   |   |   |   |         |   |   |   |   |   |         |   |
| **Funded schemes**                                                    |   |   |   |   |   |         |   |   |   |   |   |         |   |
|      ICI UK Pension Fund                     |   |   |   |   |   | (257         | )      |   |   |   |   | (161         | )      |
|      Other funded      pension schemes       |   |   |   |   |   | (307         | )      |   |   |   |   | (115         | )      |
|                                                                  |        |   |   |        |        |              |        |   |   |        |        |              |        |
| Total funded schemes                                                  |   |   |   |   |   | (564         | )      |   |   |   |   | (276         | )      |
|                                                                  |        |   |   |        |        |              |        |   |   |        |        |              |        |
|                                                                  |   |   |   |   |   |         |   |   |   |   |   |         |   |
| **Unfunded      schemes**                                             |   |   |   |   |   |         |   |   |   |   |   |         |   |
|      Pension      schemes                    |   |   |   |   |   | (75          | )      |   |   |   |   | (79          | )      |
|      Post retirement      healthcare schemes |   |   |   |   |   | (175         | )      |   |   |   |   | (156         | )      |
|                                                                  |        |   |   |        |        |              |        |   |   |        |        |              |        |
| Total unfunded schemes                                                |   |   |   |   |   | (250         | )      |   |   |   |   | (235         | )      |
|                                                                  |        |   |   |        |        |              |        |   |   |        |        |              |        |
|                                                                  |        |   |   |        |        |              |        |   |   |        |        |              |        |
| **Net recognised      (deficit)**                                     |   |   |   |   |   | (814         | )      |   |   |   |   | (511         | )      |
| Deferred tax asset                                                    |   |   |   |   |   | 126          |   |   |   |   |   | 58           | *      |
|                                                                  |        |   |   |        |        |              |        |   |   |        |        |              |        |
| **Net liabilities**                                                   |   |   |   |   |   | (688         | )      |   |   |   |   | (453         | )      |
|                                                                  |        |   |   |        |        |              |        |   |   |        |        |              |        |

| * | Not restated for FRS 19 |
|---|-------------------------|

***FRS 19 Deferred Taxation Restatement***

The Group has applied the provisions of FRS 19 for the year ending 31 December 2002. The application has led to the restatement of prior period balance sheets.  This has resulted in a decrease in shareholder funds of 31 December 2000 £(33)m, 31 March 2001 £(49)m, 30 June 2001 £(58)m, 30 September 2001 £(63)m and 31 December 2001 £(81)m and reduced the Q4 2001 and Full Year 2001 profit and loss accounts by £(12)m and £(41)m respectively.

***Earnings per ordinary share***

Earnings per ordinary share for the year are calculated by dividing the profit after tax before exceptional items and goodwill amortisation by 1,114 million ordinary shares, being the weighted average number of shares in issue (less shares held by the Group's employee share plans and adjusted for the rights issue from the day consideration was receivable on the 21 March 2002) during the period. Earnings per share for the fourth quarter and the comparable period are calculated as the cumulative earnings per share for the full year less the earnings per share for the first nine months. The comparative earnings per share are shown after adjusting the declared and published figures for 2001 for the bonus element in the rights issue in accordance with FRS 14 Earnings per Share.

12

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**DIVIDEND**

The Board has declared a second interim dividend of 4.5p per £1 Ordinary Share, which the Annual General Meeting will be asked to confirm as the final dividend for 2002, payable on 22 April 2003 to members of the register on 7 March 2003. This, together with the first interim dividend of 3.0p, gives a total cash dividend of 7.5p for the year, equivalent to about a third of net profit before goodwill amortisation and exceptional items.

**ANNUAL GENERAL MEETING**

The Annual General Meeting of the Company will be held on 22 May 2003 at the Queen Elizabeth II Conference Centre, Broad Sanctuary, Westminster, London SW1.

**NEXT ANNOUNCEMENT**

Trading results for the first quarter of 2003 will be announced on 1 May 2003.

Imperial Chemical Industries PLCICI Group Headquarters20 Manchester SquareLondon W1U 3AN

6 February 2003

**ATTACHMENTS**

| Appendix I    | Group Profit and Loss Account Q4 2002, Q4 2001, Full Year 2002, Full Year 2001                                                                        |
|---------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|
| Appendix II   | Segment Information – Trading      Profit before Exceptional Items                                                                               |
| Appendix III  | Reconciliation Table – “Comparable”      to “As Reported” Sales and Trading Profit for the International      Businesses |
| Appendix IV   | Summary Group Balance Sheet                                                                                                                           |
| Appendix V    | Statement of Group Total Recognised Gains and LossesReconciliation of Movements in Shareholder's Funds                                                |
| Appendix VI   | Summary Group Cash Flow                                                                                                                               |
| Appendix VII  | UK GAAP to US GAAP net income reconciliation                                                                                                          |
| Appendix VIII | Additional notes                                                                                                                                      |

13

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**APPENDIX I**

**IMPERIAL CHEMICAL  INDUSTRIES PLC**

**GROUP PROFIT AND LOSS ACCOUNT**

**FOURTH QUARTER**

The unaudited trading results of the Group for the fourth quarter 2002, with comparative restated figures for 2001 are set out below:

|                                                                                                                                                                                                                                                 |   |        | **Fourth        Quarter 2002**             |        |        | **Fourth        Quarter 2001 (as restated)** |        |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------------------------------------------|--------|--------|----------------------------------------------|--------|
|                                                                                                                                                                                                                                                      |        |        |                                            |        |        |                                              |        |
|                                                                                                                                                                                                                                                 |   |   | **Continuing        operations******       |   |   | **Discontinued      Operations**             |   |   | **Total** |   |   | ****Continuing      operations******** |   |   | **Discontinued      Operations** |   |   | **Total** |   |
|                                                                                                                                                                                                                                                 |   |   | **Before        exceptional        items** |   |   | **Exceptional      Items**                   |   |   |   |   |   |   |   |   | **Before      exceptional      items** |   |   | **Exceptional      Items** |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                 |   |   |                                       |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                 |   |        | **£m**                               |        |        | **£m**                                 |        |  | **£m** |  |  | **£m** |  |  | **£m** |  |  | **£m** |  |  | **£m** |  |  | **£m** |  |
|                                                                                                                                                                                                                                                      |        |        |                                            |        |        |                                              |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Turnover                                                                                                                                                                                                                                             |   |   | 1,460                                      |        |        |                                         |        |  | – |  |  | 1,460 |  |  | 1,508 |  |  |   |  |  | – |  |  | 1,508 |   |
| **Trading      profit (loss)**                                                                                                                                                                                                                       |   |   | 106                                        |        |        | –                                       |        |  | – |  |  | 106 |  |  | 126 |  |  | (122 | ) |  | – |  |  | 4 |   |
| *(after      deducting goodwill amortisation)*                                                                                                                                                                                                       |   |   | (*9*                                       | )      |        | –                                       |        |  | – |  |  | (*9* | ) |  | (*10* | ) |  | – |  |  | – |  |  | (*10* | ) |
| Income      from associates                                                                                                                                                                                                                          |   |   | –                                     |        |        | –                                       |        |  | – |  |  | – |  |  | (2 | ) |  | (9 | ) |  | – |  |  | (11 | ) |
| Profit      (loss) on sale of operations                                                                                                                                                                                                             |   |   |                                       |        |        | 39                                           |        |  | 4 |  |  | 43 |  |  |   |  |  | 8 |  |  | 8 |  |  | 16 |   |
| Profits      (losses) on disposal of fixed assets                                                                                                                                                                                                    |   |   |                                       |        |        | (2                                           | )      |  | – |  |  | (2 | ) |  |   |  |  | 6 |  |  | – |  |  | 6 |   |
| Write      off of investments                                                                                                                                                                                                                        |   |   |                                       |        |        | (99                                          | )      |  | – |  |  | (99 | ) |  |   |  |  | (22 | ) |  | – |  |  | (22 | ) |
|                                                                                                                                                                                                                                                 |   |   |                                            |   |   |                                              |        |   |   |   |   |  |   |   |  |  |   |  |  |   |  |   |   |  |   |
| Profit      (loss) on ordinary activities before interest                                                                                                                                                                                            |   |   | 106                                        |        |        | (62                                          | )      |  | 4 |  |  | 48 |  |  | 124 |  |  | (139 | ) |  | 8 |  |  | (7 | ) |
| Net      interest payable – Group                                                                                                                                                                                                               |   |   | (28                                        | )      |        | –                                       |        |  | – |  |  | (28 | ) |  | (33 | ) |  | – |  |  | – |  |  | (33 | ) |
|                                      –      Associates |   |   | 1                                          |        |        | –                                       |        |  | – |  |  | 1 |  |  | (18) |  |  | – |  |  | – |  |  | (18 | ) |
|                                                                                                                                                                                                                                                      |        |        |                                            |        |        |                                              |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| **Profit      (loss) on ordinary activities before taxation**                                                                                                                                                                                        |   |   | 79                                         |   |   | (62                                          | )      |   | 4 |   |   | 21 |   |   | 73 |   |   | (139 | ) |   | 8 |   |   | (58 | ) |
| Taxation                                                                                                                                                                                                                                             |   |   | (25                                        | )      |   | 7                                            |   |   | – |   |   | (18 | ) |   | (24 | ) |   | 38 |   |   | (11 | ) |   | 3 |   |
| Attributable      to minorities                                                                                                                                                                                                                      |   |   | (7                                         | )      |   | (3                                           | )      |   | – |   |   | (10 | ) |   | (6 | ) |   | (3 | ) |   | – |   |   | (9 | ) |
|                                                                                                                                                                                                                                                      |        |        |                                            |        |        |                                              |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Net      profit (loss) for the financial period                                                                                                                                                                                                      |   |   | 47                                         |   |   | (58                                          | )      |   | 4 |   |   | (7 | ) |   | 43 |   |   | (104 | ) |   | (3 | ) |   | (64 | ) |
|                                                                                                                                                                                                                                                      |        |        |                                            |        |        |                                              |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Dividends                                                                                                                                                                                                                                            |   |   |                                       |   |   |                                         |   |   |   |   |   | (52 | ) |   |   |   |   |   |   |   |   |   |   | (71 | ) |
|                                                                                                                                                                                                                                                      |        |        |                                            |        |        |                                              |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Profit      (loss) retained                                                                                                                                                                                                                          |   |   |                                       |   |   |                                         |   |   |   |   |   | (59 | ) |   |   |   |   |   |   |   |   |   |   | (135 | ) |
|                                                                                                                                                                                                                                                      |        |        |                                            |        |        |                                              |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| **Profit      before goodwill amortisation, taxation and exceptionals**                                                                                                                                                                              |   |   | 88                                         |   |   |                                         |   |   | – |   |   | 88 |   |   | 83 |   |   |   |   |   | – |   |   | 83 |   |
|                                                                                                                                                                                                                                                      |        |        |                                            |        |        |                                              |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Profit      (loss) before taxation and exceptionals                                                                                                                                                                                                  |   |   | 79                                         |   |   |                                         |   |   | – |   |   | 79 |   |   | 73 |   |   |   |   |   | – |   |   | 73 |   |
|                                                                                                                                                                                                                                                      |        |        |                                            |        |        |                                              |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Net      profit (loss) before exceptionals                                                                                                                                                                                                           |   |   | 47                                         |   |   |                                         |   |   | – |   |   | 47 |   |   | 43 |   |   |   |   |   | – |   |   | 43 |   |
|                                                                                                                                                                                                                                                      |        |        |                                            |        |        |                                              |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| **Earnings (loss) per £1      Ordinary Share:**                                                                                                                                                                                                |        |   |                                       |        |   |                                         |        |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| - before goodwill amortisation      and exceptionals                                                                                                                                                                                                 |        |   |                                       |        |   |                                         |        |   |   |  |   | 4.6 | p |   |   |  |   |   |  |   |   |  |   | 6.1 | p |
|                                                                                                                                                                                                                                                      |        |   |                                       |        |   |                                         |        |   |   |  |  |  |  |   |   |  |   |   |  |   |   |  |  |  |  |
| - before exceptionals                                                                                                                                                                                                                                |        |   |                                       |        |   |                                         |        |   |   |  |   | 3.9 | p |   |   |  |   |   |  |   |   |  |   | 4.9 | p |
|                                                                                                                                                                                                                                                      |        |   |                                       |        |   |                                         |        |   |   |  |  |  |  |   |   |  |   |   |  |   |   |  |  |  |  |
| - after exceptionals                                                                                                                                                                                                                                 |        |   |                                       |        |   |                                         |        |   |   |  |   | (0.9 | )p |   |   |  |   |   |  |   |   |  |   | (7.4 | )p |
|                                                                                                                                                                                                                                                      |        |   |                                       |        |   |                                         |        |   |   |  |  |  |  |   |   |  |   |   |  |   |   |  |  |  |  |
| Weighted average number of shares                                                                                                                                                                                                                    |        |   |                                       |        |   |                                         |        |   |   |  |   | 1,181 | m |   |   |  |   |   |  |   |   |  |   | 869 | m |
|                                                                                                                                                                                                                                                      |        |   |                                       |        |   |                                         |        |   |   |  |  |  |  |   |   |  |   |   |  |   |   |  |  |  |  |

14

----

**APPENDIX I (Continued)**

**IMPERIAL CHEMICAL INDUSTRIES PLC**

**GROUP PROFIT AND LOSS ACCOUNT**

**FULL YEAR**

The unaudited trading results of the Group for 2002 and the comparative restated figures for 2001, are set out below:

|                                                                    |   | **Year        2002**                |        |        | **Year        2001 (as restated)** |        |
|-------------------------------------------------------------------------|--------|-------------------------------------|--------|--------|------------------------------------|--------|
|                                                                         |        |                                     |        |        |                                    |        |
|                                                                    |   | **Continuing        operations**    |   |   | **Discontinued      Operations**   |   |   | **Total** |   |   | **Continuing        operations** |   |   | **Discontinued      Operations** |   |   | **Total** |   |
|                                                                    |        |                                     |   |   |                               |   |   |   |   |  |  |   |   |   |   |   |   |   |
|                                                                    |   | **Before        exceptional items** |   |   | **Exceptional        Items**       |   |   | **** |   |   |   |   |   | **Before        exceptional items** |   |   | **Exceptional        Items** |   |   |   |   |   |   |   |
|                                                                    |   | **£m**                        |        |        | **£m**                       |        |  | **£m** |  |  | **£m** |  |  | **£m** |  |  | **£m** |  |  | **£m** |  |  | **£m** |  |
|                                                                    |        |                                     |   |        |                                    |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |
| Turnover                                                                |   | 6,125                               |   |   |                               |   |   | – |   |   | 6,125 |   |   | 6,425 |   |   |   |   |   | – |   |   | 6,425 |   |
| **Trading      profit (loss)**                                          |   | 496                                 |   |   | –                             |   |   | – |   |   | 496 |   |   | 536 |   |   | (143 | ) |   | – |   |   | 393 |   |
| *(after deducting      goodwill amortisation)*                          |   | *(37*                               | *)*    |   | *–*                           |   |   | *–* |   |   | *(37* | *)* |   | *(37* | *)* |   | *–* |   |   | *–* |   |   | *(37* | *)* |
| Income from      associates                                             |   | 18                                  |   |   | –                             |   |   | – |   |   | 18 |   |   | 57 |   |   | (9 | ) |   | – |   |   | 48 |   |
| Profit (loss)      on sale of operations                                |   |                                |   |   | 40                                 |   |   | 10 |   |   | 50 |   |   |   |   |   | (11 | ) |   | 18 |   |   | 7 |   |
| Profits (losses)      on disposal of fixed assets                       |   |                                |   |   | 3                                  |   |   | – |   |   | 3 |   |   |   |   |   | 8 |   |   | – |   |   | 8 |   |
| Write off of      investments                                           |   |                                |   |   | (99                                | )      |   | – |   |   | (99 | ) |   |   |   |   | (22 | ) |   | – |   |   | (22 | ) |
| Profit (loss)      on ordinary activities before interest               |   | 514                                 |   |   | (56                                | )      |   | 10 |   |   | 468 |   |   | 593 |   |   | (177 | ) |   | 18 |   |   | 434 |   |
| Net interest payable – Group                                       |   | (123)                               |   |   | –                             |   |   | – |   |   | (123 | ) |   | (162  | ) |   | – |   |   | – |   |   | (162 | ) |
| Net interest      payable – Associates                             |   | (28)                                |   |   | –                             |   |   | – |   |   | (28 | ) |   | (67 | ) |   | – |   |   | – |   |   | (67 | ) |
|                                                                         |        |                                     |        |        |                                    |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| **Profit (loss) on ordinary      activities before taxation**           |   | 363                                 |   |   | (56                                | )      |   | 10 |   |   | 317 |   |   | 364 |   |   | (177 | ) |   | 18 |   |   | 205 |   |
| Taxation                                                                |   | (115                                | )      |   | 1                                  |   |   | 3 |   |   | (111 | ) |   | (116 | ) |   | 48 |   |   | (29 | ) |   | (97 | ) |
| Attributable to minorities                                              |   | (21                                 | )      |   | (6                                 | )      |   | – |   |   | (27 | ) |   | (26 | ) |   | (2 | ) |   | – |   |   | (28 | ) |
|                                                                         |        |                                     |        |        |                                    |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Net profit (loss) for the financial      year                           |   | 227                                 |   |   | (61                                | )      |   | 13 |   |   | 179 |   |   | 222 |   |   | (131 | ) |   | (11 | ) |   | 80 |   |
|                                                                         |        |                                     |        |        |                                    |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Dividends                                                               |   |                                |   |   |                               |   |   |   |   |   | (88 | ) |   |   |   |   |   |   |   |   |   |   | (116 | ) |
|                                                                         |        |                                     |        |        |                                    |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Profit (loss) retained                                                  |   |                                |   |   |                               |   |   |   |   |   | 91 |   |   |   |   |   |   |   |   |   |   |   | (36 | ) |
|                                                                         |        |                                     |        |        |                                    |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| **Profit before goodwill amortisation,      taxation and exceptionals** |   | 400                                 |   |   |                               |   |   | – |   |   | 400 |   |   | 401 |   |   |   |   |   | – |   |   | 401 |   |
|                                                                         |        |                                     |        |        |                                    |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Profit (loss) before taxation      and exceptionals                     |   | 363                                 |   |   |                               |   |   | – |   |   | 363 |   |   | 364 |   |   |   |   |   | – |   |   | 364 |   |
|                                                                         |        |                                     |        |        |                                    |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Net profit (loss) before exceptionals                                   |   | 227                                 |   |   |                               |   |   | – |   |   | 227 |   |   | 222 |   |   |   |   |   | – |   |   | 222 |   |
|                                                                         |        |                                     |        |        |                                    |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| **Earnings (loss) per £1 Ordinary Share:**                        |   |                                |        |   |                               |        |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |
| - before goodwill amortisation and exceptionals                         |   |                                |        |   |                               |        |   |   |  |   | 23.7 | p |   |   |  |   |   |  |   |   |  |   | 29.8 | p |
|                                                                         |   |                                |        |   |                               |        |   |   |  |  |  |  |   |   |  |   |   |  |   |   |  |  |  |  |
| - before exceptionals                                                   |   |                                |        |   |                               |        |   |   |  |   | 20.4 | p |   |   |  |   |   |  |   |   |  |   | 25.5 | p |
|                                                                         |   |                                |        |   |                               |        |   |   |  |  |  |  |   |   |  |   |   |  |   |   |  |  |  |  |
| - after exceptionals                                                    |   |                                |        |   |                               |        |   |   |  |   | 16.1 | p |   |   |  |   |   |  |   |   |  |   | 9.2 | p |
|                                                                         |   |                                |        |   |                               |        |   |   |  |  |  |  |   |   |  |   |   |  |   |   |  |  |  |  |
| Weighted average number of shares                                       |   |                                |        |   |                               |        |   |   |  |   | 1,114 | m |   |   |  |   |   |  |   |   |  |   | 869 | m |
|                                                                         |   |                                |        |   |                               |        |   |   |  |  |  |  |   |   |  |   |   |  |   |   |  |  |  |  |

15

----

**APPENDIX II**

**IMPERIAL CHEMICAL INDUSTRIES PLC**

**SEGMENT INFORMATION**

**TRADING PROFIT BEFORE EXCEPTIONAL ITEMS**

| **BEFORE GOODWILL      AMORTISATION** |   |
|---------------------------------------|--------|
|                                  |   |   | **Fourth Quarter** |   |   | **Year** |   |
|                                       |        |  |  |  |  |  |  |
|                                  |   |   | **2002****£m** |   |   | **2001****£m** |   |   | **2002****£m** |   |   | **2001****£m** |   |
|                                       |        |  |  |  |  |  |  |  |  |  |  |  |  |
| National Starch                       |   |   | 58 |   |   | 57 |   |   | 224 |   |   | 218 |   |
| Quest                                 |   |   | 13 |   |   | 23 |   |   | 82 |   |   | 107 |   |
| Performance Specialties               |   |   | 6 |   |   | 16 |   |   | 49 |   |   | 68 |   |
| Paints                                |   |   | 41 |   |   | 38 |   |   | 188 |   |   | 176 |   |
|                                       |        |  |  |  |  |  |  |  |  |  |  |  |  |
| **International Businesses**          |   |   | 118 |   |   | 134 |   |   | 543 |   |   | 569 |   |
| Regional and Industrial               |   |   | (3 | ) |   | 2 |   |   | (10 | ) |   | 4 |   |
|                                       |        |  |  |  |  |  |  |  |  |  |  |  |  |
| **Total Group Trading Profit**        |   |   | 115 |   |   | 136 |   |   | 533 |   |   | 573 |   |
|                                       |        |  |  |  |  |  |  |  |  |  |  |  |  |
|                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **AFTER GOODWILL      AMORTISATION**  |   |   |   |   |
|                                  |   |   | **Fourth Quarter** |   |   | **Year** |   |
|                                       |        |  |  |  |  |  |  |
|                                  |   |   | **2002****£m** |   |   | **2001****£m** |   |   | **2002****£m** |   |   | **2001****£m** |   |
|                                       |        |  |  |  |  |  |  |  |  |  |  |  |  |
| National Starch                       |   |   | 54 |   |   | 53 |   |   | 206 |   |   | 200 |   |
| Quest                                 |   |   | 13 |   |   | 22 |   |   | 81 |   |   | 106 |   |
| Performance Specialties               |   |   | 6 |   |   | 16 |   |   | 48 |   |   | 67 |   |
| Paints                                |   |   | 36 |   |   | 33 |   |   | 171 |   |   | 159 |   |
|                                  |   |  |  |   |  |  |   |  |  |   |  |  |   |
| **International Businesses**          |   |   | 109 |   |   | 124 |   |   | 506 |   |   | 532 |   |
| Regional and Industrial               |   |   | (3 | ) |   | 2 |   |   | (10 | ) |   | 4 |   |
|                                  |   |  |  |   |  |  |   |  |  |   |  |  |   |
| **Total Group Trading Profit**        |   |   | 106 |   |   | 126 |   |   | 496 |   |   | 536 |   |
|                                       |        |  |  |  |  |  |  |  |  |  |  |  |  |
|                                  |   |   |   |   |

16

----

**APPENDIX III**

**IMPERIAL CHEMICAL INDUSTRIES  PLC**

**RECONCILIATION TABLE – “COMPARABLE”  TO “AS REPORTED”**

**SALES  AND TRADING PROFIT**†**FOR THE INTERNATIONAL BUSINESSES**

|                         |   |   | **Sales**                    |   |   | **Trading      profit**† |   |
|------------------------------|--------|--------|------------------------------|--------|--------|-------------------------------|--------|
|                         |   |        |                              |   |        |                               |        |
|                         |   |   | **Fourth      Quarter****%** |   |   | **Year****%**                 |   |   | **Fourth      Quarter****%** |   |   | **Year****%** |   |
|                         |        |        |                              |        |        |                               |        |  |  |  |  |  |  |
| **National      Starch**     |   |   |                         |   |   |                          |   |   |   |   |   |   |   |
| Comparable      change %     |   |   | 6                            |   |   | 2                             |   |   | 6 |   |   | 5 |   |
| Exchange rate      effect    |   |   | (6                           | )      |   | (3                            | )      |   | (4 | ) |   | (2 | ) |
| Divestment      effect       |   |   | –                       |   |   | –                        |   |   | – |   |   | – |   |
| Acquisition      effect      |   |   | –                       |   |   | –                        |   |   | – |   |   | – |   |
|                         |        |        |                              |        |        |                               |        |  |  |  |  |  |  |
| As reported      change %    |   |   | 0                            |   |   | (1                            | )      |   | 2 |   |   | 3 |   |
|                         |        |        |                              |        |        |                               |        |  |  |  |  |  |  |
| **Quest**                    |   |   |                         |   |   |                          |   |   |   |   |   |   |   |
| Comparable change %          |   |   | 5                            |   |   | 1                             |   |   | (43 | ) |   | (23 | ) |
| Exchange rate effect         |   |   | (4                           | )      |   | (3                            | )      |   | – |   |   | – |   |
| Divestment effect            |   |   | –                       |   |   | –                        |   |   | – |   |   | – |   |
| Acquisition effect           |   |   | –                       |   |   | –                        |   |   | – |   |   | – |   |
|                         |        |        |                              |        |        |                               |        |  |  |  |  |  |  |
| As reported change %         |   |   | 1                            |   |   | (2                            | )      |   | (43 | ) |   | (23 | ) |
|                         |        |        |                              |        |        |                               |        |  |  |  |  |  |  |
| **Performance Specialties**  |   |   |                         |   |   |                          |   |   |   |   |   |   |   |
| Comparable change %          |   |   | 8                            |   |   | 2                             |   |   | (34 | ) |   | (24 | ) |
| Exchange rate effect         |   |   | (3                           | )      |   | (1                            | )      |   | – |   |   | (2 | ) |
| Divestment effect            |   |   | (19                          | )      |   | (4                            | )      |   | (29 | ) |   | (2 | ) |
| Acquisition effect           |   |   | –                       |   |   | –                        |   |   | – |   |   | – |   |
|                         |        |        |                              |        |        |                               |        |  |  |  |  |  |  |
| As reported change %         |   |   | (14                          | )      |   | (3                            | )      |   | (63 | ) |   | (28 | ) |
|                         |        |        |                              |        |        |                               |        |  |  |  |  |  |  |
| **Paints**                   |   |   |                         |   |   |                          |   |   |   |   |   |   |   |
| Comparable change %          |   |   | 1                            |   |   | 1                             |   |   | 12 |   |   | 9 |   |
| Exchange rate effect         |   |   | (6                           | )      |   | (3                            | )      |   | (4 | ) |   | (2 | ) |
| Divestment effect            |   |   | –                       |   |   | –                        |   |   | – |   |   | – |   |
| Acquisition effect           |   |   | –                       |   |   | –                        |   |   | – |   |   | – |   |
|                         |        |        |                              |        |        |                               |        |  |  |  |  |  |  |
| As reported change %         |   |   | (5                           | )      |   | (2                            | )      |   | 8 |   |   | 7 |   |
|                         |        |        |                              |        |        |                               |        |  |  |  |  |  |  |
| **International Businesses** |   |   |                         |   |   |                          |   |   |   |   |   |   |   |
| Comparable change %          |   |   | 4                            |   |   | 1                             |   |   | (3 | ) |   | (1 | ) |
| Exchange rate effect         |   |   | (5                           | )      |   | (2                            | )      |   | (3 | ) |   | (2 | ) |
| Divestment effect            |   |   | (3                           | )      |   | (1                            | )      |   | (6 | ) |   | (2 | ) |
| Acquisition effect           |   |   | –                       |   |   | –                        |   |   | – |   |   | – |   |
|                         |        |        |                              |        |        |                               |        |  |  |  |  |  |  |
| As reported change %         |   |   | (4                           | )      |   | (2                            | )      |   | (12 | ) |   | (5 | ) |
|                         |        |        |                              |        |        |                               |        |  |  |  |  |  |  |

†**Before goodwill amortisation and exceptional items**

17

----

      **APPENDIX  IV**

**IMPERIAL CHEMICAL INDUSTRIES  PLC**

**SUMMARY GROUP BALANCE SHEET**

|                                                               |   | **At****31 December****2002** |   |   | **At****31 December****2001****(as restated)** |   |
|--------------------------------------------------------------------|--------|-------------------------------|--------|--------|------------------------------------------------|--------|
|                                                                    |        |                               |        |        |                                                |        |
| **ASSETS EMPLOYED**                                                |   | **£m**                  |   |   | **£m**                                   |   |
|                                                               |        |                               |   |        |                                                |   |
| Intangible fixed assets                                            |   | 574                           |   |   | 613                                            |   |
| Tangible fixed assets                                              |   | 1,961                         |   |   | 2,186                                          |   |
| Investments                                                        |   | 69                            |   |   | 374                                            |   |
| Current assets                                                     |   |                          |   |   |                                           |   |
|      Cash      and short-term investments |   | 552                           |   |   | 460                                            |   |
|      Other      current assets            |   | 2,346                         |   |   | 2,666                                          |   |
|                                                                    |        |                               |        |        |                                                |        |
|                                                               |   | 2,898                         |   |   | 3,126                                          |   |
|                                                               |        |                               |   |        |                                                |   |
| Total assets                                                       |   | 5,502                         |   |   | 6,299                                          |   |
| Creditors due within one year                                      |   | (2,418                        | )      |   | (3,601                                         | )      |
|                                                                    |        |                               |        |        |                                                |        |
| Total assets less current liabilities                              |   | 3,084                         |   |   | 2,698                                          |   |
|                                                                    |        |                               |        |        |                                                |        |
| **FINANCED BY**                                                    |   |                          |   |   |                                           |   |
|                                                               |   |                          |   |   |                                           |   |
| Creditors due after more than      one year:                       |   |                          |   |   |                                           |   |
| Loans                                                              |   | 1,363                         |   |   | 1,705                                          |   |
| Other creditors                                                    |   | 32                            |   |   | 49                                             |   |
|                                                               |        |                               |   |        |                                                |   |
|                                                               |   | 1,395                         |   |   | 1,754                                          |   |
|                                                               |   |                          |   |   |                                           |   |
| Provisions for liabilities and      charges                        |   | 1,121                         |   |   | 1,257                                          |   |
| Minority interests – equity                                  |   | 69                            |   |   | 51                                             |   |
|                                                               |   |                          |   |   |                                           |   |
| Shareholder's funds – equity:                                 |   |                          |   |   |                                           |   |
| Share capital                                                      |   | 1,191                         |   |   | 728                                            |   |
| Reserves                                                           |   | (692                          | )      |   | (1,092                                         | )      |
|                                                               |        |                               |   |        |                                                |   |
|                                                               |   | 499                           |   |   | (364                                           | )      |
|                                                               |        |                               |   |        |                                                |   |
|                                                               |   | 3,084                         |   |   | 2,698                                          |   |
|                                                                    |        |                               |        |        |                                                |        |

18

----

**APPENDIX V**

**IMPERIAL CHEMICAL INDUSTRIES  PLC**

**STATEMENT OF GROUP TOTAL RECOGNISED  GAINS AND LOSSES**

|                                                                                           |   |   | **Year**             |   |
|------------------------------------------------------------------------------------------------|--------|--------|----------------------|--------|
|                                                                                                |        |        |                      |        |
|                                                                                           |   |   | **2002****£m** |   |   | **2001****(as restated)****£m** |   |
|                                                                                           |   |        |                      |   |  |  |   |
| Net profit (loss)                                                                              |   |   |                 |   |   |   |   |
|      Parent      and subsidiary undertakings                          |   |   | 192                  |   |   | 72 |   |
|      Associates                                                       |   |   | (13                  | )      |   | 8 |   |
|                                                                                           |   |        |                      |   |  |  |   |
|                                                                                           |   |   | 179                  |   |   | 80 |   |
| Currency translation      differences on foreign currency netinvestment      and related loans |   |   | (91                  | )      |   | (59 | ) |
| Taxation and translation differences      on foreign currency loans                            |   |   | 34                   |   |   | (12 | ) |
|                                                                                                |        |        |                      |        |  |  |  |
| Total gains and losses for the      year                                                       |   |   | 122                  |   |   | 9 |   |
|                                                                                                |        |        |                      |        |  |  |  |
| Prior year adjustment                                                                          |   |   | (81                  | )      |   |   |   |
|                                                                                                |        |        |                      |        |  |  |  |
| Total gains and losses recognised      since last annual report                                |   |   | 41                   |   |   |   |   |
|                                                                                                |        |        |                      |        |  |  |  |

**RECONCILIATION OF MOVEMENTS IN  SHAREHOLDERS' FUNDS**

|                                                                                 |   |   | **Year**             |   |
|--------------------------------------------------------------------------------------|--------|--------|----------------------|--------|
|                                                                                      |        |        |                      |        |
|                                                                                 |   |   | **2002****£m** |   |   | **2001****(as restated)****£m** |   |
|                                                                                 |   |        |                      |   |  |  |   |
| Net profit (loss) for the financial      year                                        |   |   | 179                  |   |   | 80 |   |
| Dividends                                                                            |   |   | (88                  | )      |   | (116 | ) |
|                                                                                 |   |        |                      |   |  |  |   |
| Retained profit (loss) for year                                                      |   |   | 91                   |   |   | (36 | ) |
|                                                                                 |   |   |                 |   |   |   |   |
| Issues of ICI Ordinary Shares                                                        |   |   | 807                  |   |   | – |   |
| Goodwill movement                                                                    |   |   | 22                   |   |   | (8 | ) |
| Other recognised gains (losses)      relating to the year                            |   |   | (57                  | )      |   | (71 | ) |
|                                                                                      |        |        |                      |        |  |  |  |
| Net increase/(reductions) to      shareholders' funds                                |   |   | 863                  |   |   | (115 | ) |
|                                                                                      |        |        |                      |        |  |  |  |
| Shareholders' funds at beginning      of year – equity (as previously reported) |   |   | (283                 | )      |   | (216 | ) |
| Prior year adjustment                                                                |   |   | (81                  | )      |   | (33 | ) |
|                                                                                      |        |        |                      |        |  |  |  |
| Shareholders' funds at beginning      of year – equity (as restated)            |   |   | (364                 | )      |   | (249 | ) |
|                                                                                 |   |        |                      |   |  |  |   |
| Shareholders' funds at end of      year – equity                                |   |   | 499                  |   |   | (364 | ) |
|                                                                                      |        |        |                      |        |  |  |  |

19

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**APPENDIX VI**

**IMPERIAL CHEMICAL INDUSTRIES  PLC**

**SUMMARY GROUP CASH FLOW**

|                                                                                                                                      |   | **Year 2002****£m** |   |   | **Year 2001      £m** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|--------|--------|-----------------------------|--------|
|                                                                                                                                      |        |                           |   |        |                             |   |
| **Net cash flow from operating      activities1**                                                                                         |   | **623**                   |   |   | **637**                     |   |
| Dividends received from associated      undertakings                                                                                      |   | –                    |   |   | –                      |   |
| Returns on investments and servicing      of finance                                                                                      |   | (185                      | )      |   | (207                        | )      |
| Taxation                                                                                                                                  |   | (35                       | )      |   | (58                         | )      |
|                                                                                                                                      |        |                           |   |        |                             |   |
|                                                                                                                                      |   | 403                       |   |   | 372                         |   |
| Capital expenditure and financial      investment                                                                                         |   |                      |   |   |                        |   |
|      Purchase      of tangible fixed assets                                                                      |   | (219                      | )      |   | (235                        | )      |
|      Sale      of tangible fixed assets                                                                          |   | 35                        |   |   | 29                          |   |
|                                                                                                                                      |        |                           |   |        |                             |   |
|                                                                                                                                      |   | (184                      | )      |   | (206                        | )      |
|                                                                                                                                           |        |                           |        |        |                             |        |
|                                                                                                                                      |   | 219                       |   |   | 166                         |   |
|                                                                                                                                           |        |                           |        |        |                             |        |
| Acquisitions                                                                                                                              |   | (54                       | )      |   | (109                        | )      |
| Disposals2                                                                                                                                |   | 290                       |   |   | 17                          |   |
| Equity dividends paid                                                                                                                     |   | (106                      | )      |   | (185                        | )      |
|                                                                                                                                      |   |                           |   |        |                             |   |
| Cash outflow before use of liquid      resources and financing                                                                            |   | 349                       |   |   | (111                        | )      |
| Management of liquid resources                                                                                                            |   | (13                       | )      |   | 253                         |   |
| Financing - Issue of shares                                                                                                               |   | 807                       |   |   | –                      |   |
|                    -      Decrease in debt |   | (1,151                    | )      |   | (77                         | )      |
|                                                                                                                                      |        |                           |   |        |                             |   |
| **(Decrease)/Increase in cash**                                                                                                           |   | **(8**                    | **)**  |   | **65**                      |   |
|                                                                                                                                           |        |                           |        |        |                             |        |

**Notes**:

| 1. | Reconciliation of “net      cash flow from operating activities” per the UK GAAP FRS1 format above      to the subtotal “operating cash flow after capital expenditure”      in the supplementary cash flow presentation on page 4: |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                     |   |   | **Year****2002****£m** |   |   | **Year****2001****£m** |   |
|--------------------------------------------------------------------------|--------|--------|------------------------------|--------|--------|------------------------------|--------|
|                                                                     |   |        |                              |   |        |                              |   |   |
| **Net cash flow from operating      activities – per above**        |   |   | **623**                      |   |   | **637**                      |   |   |
|                                                                          |        |        |                              |        |        |                              |   |   |
|                                                                     |   |   |                         |   |   |                         |   |   |
| Capital expenditure                                                      |   |   | (219                         | )      |   | (235                         | )      |   |
| Exclude top-up      payment to ICI UK Pension Fund                       |   |   | 30                           |   |   | 30                           |   |   |
|                                                                     |   |        |                              |   |        |                              |   |   |
| **Operating cash flow after      capital expenditure – per page 4** |   |   | **434**                      |   |   | **432**                      |   |   |
|                                                                          |        |        |                              |        |        |                              |        |   |

| 2. | During the year the Group received      gross cash consideration of £423m, (2001: £315m). Of this amount,      £133m (2001: £298m) was paid against ongoing disposal costs      and provisions. |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

20

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**APPENDIX VII**

**IMPERIAL CHEMICAL INDUSTRIES  PLC**

|  **RECONCILIATION      BETWEEN UK AND US GAAP** |
|------------------------------------------------------|

The results of the ICI Group are prepared in accordance with UK GAAP. UK GAAP differs in certain respects from US GAAP.  Net income calculated in accordance with US GAAP is set out below.  Note 43 to the 2001 financial statements describes the significant differences between UK GAAP and US GAAP affecting the ICI Group’s net income and shareholders’ equity.  Under US GAAP, net income for 2002 was £9m (2001: profit of £13m) compared with a net income of £179m (2001: £80m) under UK GAAP.  These differences primarily result from the differing accounting treatment of purchase accounting adjustments, disposal accounting, pensions, deferred tax, derivative instruments and hedging activities and restructuring costs. Under SFAS 144, the disposal of Synetix has been classified within discontinued operations. SFAS 142, Goodwill and Intangible Assets has been implemented from 1 January 2002, SFAS 142 eliminates the previous requirement to amortise goodwill and indefinite lived intangible assets, addresses the amortisation of intangible assets with a defined life and the annual impairment testing and recognition for goodwill and intangible assets. The Group has completed the standard’s transitional impairment test and recognised an impairment charge of £122m on capitalised goodwill relating to the Paints business in Latin America.  

The following is a summary of the material adjustments to net income which would have been required if US GAAP had been applied not UK GAAP:

|                                                                                                                   |   |   | **Year**             |   |
|------------------------------------------------------------------------------------------------------------------------|--------|--------|----------------------|--------|
|                                                                                                                   |   |   | **2002****£m** |   |   |   | **2001****(as restated)****£m** |   |
|                                                                                                                   |   |        |                      |   |   |  |  |   |
| Net income after exceptionals      – UK GAAP                                                                      |   |   |                 |   |   |   |   |   |
|      Continuing      operations                                                               |   |   | 166                  |   |   |   | 91 |   |
|      Discontinued      operations                                                             |   |   | 13                   |   |   |   | (11 | ) |
|                                                                                                                        |        |        |                      |        |  |  |  |  |
|                                                                                                                   |   |   | 179                  |   |   |   | 80 |   |
|                                                                                                                        |        |        |                      |        |  |  |  |  |
| Adjustments to conform with US      GAAP                                                                               |   |   |                 |   |   |   |   |   |
|      Pension      expense                                                                     |   |   | (14                  | )      |   |   | (37 | ) |
|      Capitalisation      of interest less amortisation and disposals                          |   |   | (5                   | )      |   |   | (2 | ) |
|      Purchase      accounting adjustments                                                     |   |   |                 |   |   |   |   |   |
|           Impairment      / Amortisation of goodwill and intangibles |   |   | (117                 | )      |   |   | (127 | ) |
|           Disposals      and other adjustments                       |   |   | (31                  | )      |   |   | 10 |   |
|      Reversal      of write down of investment                                                |   |   | –               |   |   |   | 22 |   |
|      Derivative      instruments and hedging activities                                       |   |   | (41                  | )      |   |   | 49 |   |
|      Restructuring      costs                                                                 |   |   | (6                   | )      |   |   | 5 |   |
|      Share      compensation expense                                                          |   |   | (3                   | )      |   |   | 1 |   |
|      Others                                                                                   |   |   | (2                   | )      |   |   | 2 |   |
|      Tax      effect of US GAAP adjustments                                                   |   |   | 49                   |   |   |   | 10 |   |
|                                                                                                                   |   |        |                      |   |   |  |  |   |
|                                                                                                                   |   |   | (170                 | )      |   |   | (67 | ) |
|                                                                                                                        |        |        |                      |        |  |  |  |  |
| Net income after exceptionals      – US GAAP                                                                      |   |   |                 |   |   |   |   |   |
|      Continuing      operations                                                               |   |   | (107                 | )      |   |   | (4 | ) |
|      Discontinued      operations                                                             |   |   | 116                  |   |   |   | 17 |   |
|                                                                                                                        |        |        |                      |        |  |  |  |  |
|                                                                                                                   |   |   | 9                    |   |   |   | 13 |   |
|                                                                                                                        |        |        |                      |        |  |  |  |  |

21

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**APPENDIX VIII**

**IMPERIAL CHEMICAL INDUSTRIES  PLC**

**NOTES**

| **1.** | **Basis of Presentation** |
|--------|---------------------------|

|   | The Group’s financial statements are prepared under the historical cost convention and in accordance with the Companies Act 1985 and applicable accounting standards.  The Group’s accounting policies conform to UK Generally Accepted Accounting Principles (“UK GAAP”).  The main policies are set out in the accounts section of the annual report. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The financial data presented in this document is for the fourth quarter 2002, being the three months ended 31 December 2002, and the 2002 full year being the 12 months ended 31 December 2002.  These periods are compared to the corresponding periods in the previous year being the fourth quarter 2001 (three months ended 31 December 2001) and 2001 full year (12 months ended 31 December 2001) respectively. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | References to **“**Comparable**”** performance exclude the effect of currency translation differences and the impact of acquisitions and divestments on the results reported by the International Businesses.  Performance is measured on a consistent basis over two or more financial periods.  Comparable results for both 2002 and 2001 are translated at constant exchange rates, which equate to the annual average exchange rates for 2001, and exclude the results of divested businesses and the impact of acquired businesses from the relevant periods. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **2.** | **Basis of segmentation** |
|--------|---------------------------|

|   | Segmental data in this statement is analysed as follows: |
|--------|----------------------------------------------------------|

|   | Continuing Operations comprising the International Businesses (being National Starch, Quest, Performance Specialties and Paints) and Regional & Industrial.  The Regional and Industrial segment comprises the Group’s Regional businesses (of which the largest operation is the pure terephthalic acid business in Pakistan) and some ongoing residual activity in the UK relating to legacy management. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Following the disposal of the      Synetix business in 2002, Performance Specialties will only comprise of      the Uniqema business in 2003. The sales and trading profits for Uniqema      in 2002 are disclosed in the table below: |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                   |

|   | **Uniqema**         |   |   | **Sales**    |   |   | **Trading profit      before goodwill amortisation and exceptional items** |   |   | **Trading profit      before exceptional items** |   |
|--------|---------------------|--------|--------|--------------|--------|--------|----------------------------------------------------------------------------|--------|--------|--------------------------------------------------|--------|
|        |                     |        |        |              |   |        |                                                                            |   |        |                                                  |        |
|   |                |   |   | **£m** |   |   | **£m**                                                               |   |   | **£m**                                     |   |
|   |                |        |        |              |        |        |                                                                            |        |        |                                                  |        |
|   | First Quarter 2002  |   |   | 162          |   |   | 9                                                                          |   |   | 9                                                |   |
|   | Second Quarter 2002 |   |   | 177          |   |   | 9                                                                          |   |   | 8                                                |   |
|   | Third Quarter 2002  |   |   | 169          |   |   | 6                                                                          |   |   | 6                                                |   |
|   | Fourth Quarter 2002 |   |   | 161          |   |   | 4                                                                          |   |   | 4                                                |   |
|   |                |        |        |              |        |        |                                                                            |        |        |                                                  |        |
|   | **Year 2002**       |   |   | 669          |   |   | 28                                                                         |   |   | 27                                               |   |
|   |                |        |        |              |        |        |                                                                            |        |        |                                                  |        |

22

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**APPENDIX VIII (continued)**

**IMPERIAL CHEMICAL INDUSTRIES  PLC**

**NOTES (CONTINUED)**

| **3.** | **Forward looking statements** |
|--------|--------------------------------|

|   | Certain statements in this press      release may be forward-looking statements as that term is defined in the      United States Private Securities Litigation Reform Act of 1995. Such forward-looking      statements involve risks and uncertainties that could cause actual results      to differ materially from those expressed or implied by such statements.      These factors include, among other things, the impact of competitive products      and pricing, changes in the price of raw materials, the occurrence of major      operational problems, the loss of major customers, limitations imposed by      our indebtedness and leverage, a credit downgrade by the ratings agencies,      contingent liabilities arising in connection with recently disposed businesses,      risks associated with our international operations, risks of litigation      and other factors described in our filings with the SEC. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **4.** | **Relationship to Statutory Accounts and Audit Status** |
|--------|---------------------------------------------------------|

|   | The financial information included      in this document does not constitute the Group’s statutory accounts      for the years ended 31 December 2002 or 2001. The financial information      for 2001 is derived from the statutory accounts for 2001, which have been      delivered to the registrar of companies. The auditors have reported on the      2001 accounts; their report was unqualified and did not contain a statement      under section 237(2) or (3) of the Companies Act 1985. The statutory accounts      for 2002 will be finalised on the basis of the financial information presented      by the directors in this preliminary announcement and will be delivered      to the registrar of companies following the company’s annual general      meeting. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|

| **5.** | **Earnings before Interest, Tax, Depreciation and Amortisation (“EBITDA”)** |
|--------|-----------------------------------------------------------------------------------------|

|   | EBITDA is defined as trading profit before interest, tax, depreciation and goodwill amortisation.  The depreciation charged by the businesses in 2002 was as follows: National Starch £70m (2001: £71m); Quest £18m (2001: £19m); Performance Specialties £29m (2001: £30m); Paints £52m (2001: £54m) and Regional and Industrial £27m (2001: £35m). Total depreciation for the Group was £196m (2001: £209m). The 2001 comparatives exclude exceptional asset write downs. Management believe EBITDA and related measures of cash flow serve as important financial indicators, however EBITDA should not be considered in isolation, or as an alternative to operating or net income or cash flows from operating activities, in each case, determined in accordance with UK or US GAAP as appropriate. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **6.** | **Trading margin** |
|--------|--------------------|

|   | Trading margin is calculated as trading profit (before goodwill amortisation, exceptional items, interest and share of profits of associates) expressed as a percentage of sales. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **7.** | **Interest Cover** |
|--------|--------------------|

|   | Calculations of interest cover are based on the sum of Group trading profit (before goodwill amortisation and exceptional items) and net associate company income (associates’ trading profit less share of interest payable by associates) divided by Group interest payable (excluding share of interest payable by associates). |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **8.** | **Effective tax rate** |
|--------|------------------------|

|   | Effective tax rate is calculated as taxation (excluding tax on exceptional items) divided by profit before tax before goodwill amortisation and exceptionals. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

23

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