11. Connected Transactions

    1.  A summary of the connected transactions between PTL and the
        connected parties during the past three years is as follows –

­­­

+---------+------------+----------------+-----------+----+----+------+
| Party   | Re         | Description of | Pricing   | T  |    |      |
| having  | lationship | transaction    | policy    | ra |    |      |
| c       |            |                |           | ns |    |      |
| onflict |            |                |           | ac |    |      |
| of      |            |                |           | ti |    |      |
| i       |            |                |           | on |    |      |
| nterest |            |                |           | Am |    |      |
|         |            |                |           | ou |    |      |
|         |            |                |           | nt |    |      |
|         |            |                |           | (M |    |      |
|         |            |                |           | il |    |      |
|         |            |                |           | li |    |      |
|         |            |                |           | on |    |      |
|         |            |                |           | TH |    |      |
|         |            |                |           | B) |    |      |
+=========+============+================+===========+====+====+======+
|         |            |                |           | 2  | 2  | 201  |
|         |            |                |           | 01 | 01 | 2-13 |
|         |            |                |           | 0- | 1- |      |
|         |            |                |           | 11 | 12 |      |
+---------+------------+----------------+-----------+----+----+------+
|   P     |   PCL is   | PCL made       | The price | 1  | 6  | 24.1 |
| olyplex |   the      | advance        | of the    | .2 | .9 |      |
|   Corp  |            | payments on    | tr        |    |    |      |
| oration |  Company’s | behalf of the  | ansaction |    |    |      |
|   Ltd.  |   major    | Company for    | between   |    |    |      |
|   (PCL) |   sh       | administrative | PCL and   |    |    |      |
|         | areholder, | expenses,      | the       |    |    |      |
|         |   owning   | which were     | Company   |    |    |      |
|         |   directly | mainly         | was a     |    |    |      |
|         |   and      | travelling     | normal    |    |    |      |
|         |            | expenses of    | price in  |    |    |      |
|         | indirectly | employees,     | general   |    |    |      |
|         |   the 51%  | accommodations | business  |    |    |      |
|         |   of the   | for employees’ | practice  |    |    |      |
|         |            | family,        | and was   |    |    |      |
|         |  Company’s | educational    | the price |    |    |      |
|         |   share    | fees for       | as        |    |    |      |
|         |   capital  | employees’     | actually  |    |    |      |
|         |   and the  | children,      | paid by   |    |    |      |
|         |   two      | insurance      | PCL in    |    |    |      |
|         |   parties  | claims of      | advance   |    |    |      |
|         |   have     | employees,     | for the   |    |    |      |
|         |   common   | insurance      | Company   |    |    |      |
|         |            | premium        | without   |    |    |      |
|         | directors. | payments,      | any extra |    |    |      |
|         |            | project        | charge by |    |    |      |
|         |            | related        | PCL.      |    |    |      |
|         |            | expenses etc.  |           |    |    |      |
|         |            | The Company    |           |    |    |      |
|         |            | has given the  |           |    |    |      |
|         |            | appropriate    |           |    |    |      |
|         |            | accounting     |           |    |    |      |
|         |            | treatment to   |           |    |    |      |
|         |            | these expenses |           |    |    |      |
|         |            | and/or         |           |    |    |      |
|         |            | collected      |           |    |    |      |
|         |            | these amounts  |           |    |    |      |
|         |            | from the       |           |    |    |      |
|         |            | employees and  |           |    |    |      |
|         |            | paid them back |           |    |    |      |
|         |            | to PCL.        |           |    |    |      |
+---------+------------+----------------+-----------+----+----+------+
|   P     |   PCL is   | PTL made       | The price | 0  | 0  | 0.14 |
| olyplex |   the      | payments on    | of the    | .1 | .1 |      |
|   Corp  |            | behalf of PCL, | tr        |    |    |      |
| oration |  Company’s | which were     | ansaction |    |    |      |
|   Ltd.  |   major    | mainly         | between   |    |    |      |
|   (PCL) |   sh       | traveling and  | PCL and   |    |    |      |
|         | areholder, | other expenses | the       |    |    |      |
|         |   owning   | of PCL         | Company,  |    |    |      |
|         |   directly | employees and  | PR and PE |    |    |      |
|         |   and      | their          | was a     |    |    |      |
|         |            | families.      | normal    |    |    |      |
|         | indirectly |                | price in  |    |    |      |
|         |   the 51%  |                | general   |    |    |      |
|         |   of the   |                | business  |    |    |      |
|         |            |                | practice  |    |    |      |
|         |  Company’s |                | and was   |    |    |      |
|         |   share    |                | the price |    |    |      |
|         |   capital  |                | as        |    |    |      |
|         |   and the  |                | actually  |    |    |      |
|         |   two      |                | paid in   |    |    |      |
|         |   parties  |                | advance   |    |    |      |
|         |   have     |                | without   |    |    |      |
|         |   common   |                | any extra |    |    |      |
|         |            |                | charge.   |    |    |      |
|         | directors. |                |           |    |    |      |
+---------+------------+----------------+-----------+----+----+------+
|   P     |   PCL is   | Purchase of    | As per    | 1  | 8  | 5    |
| olyplex |   the      | Raw material – | Transfer  | ,0 | 06 | 33.8 |
|   Corp  |            | Polyester      | Pricing   | 52 | .9 |      |
| oration |  Company’s | Chips and      | policy of | .2 |    |      |
|   Ltd.  |   major    | Polyester Film | PCL       |    |    |      |
|   (PCL) |   sh       | by all the     | (Study    |    |    |      |
|         | areholder, | subsidiaries   | done by   |    |    |      |
|         |   owning   | of PTL         | Ersnt &   |    |    |      |
|         |   directly | including PTL  | Young and |    |    |      |
|         |   and      |                | TNMM      |    |    |      |
|         |            |                | [Tran     |    |    |      |
|         | indirectly |                | sactional |    |    |      |
|         |   the 51%  |                | Net       |    |    |      |
|         |   of the   |                | Margin]   |    |    |      |
|         |            |                | Method    |    |    |      |
|         |  Company’s |                | re        |    |    |      |
|         |   share    |                | commended |    |    |      |
|         |   capital  |                | for       |    |    |      |
|         |   and the  |                | Transfer  |    |    |      |
|         |   two      |                | pricing   |    |    |      |
|         |   parties  |                |           |    |    |      |
|         |   have     |                |           |    |    |      |
|         |   common   |                |           |    |    |      |
|         |            |                |           |    |    |      |
|         | directors. |                |           |    |    |      |
+---------+------------+----------------+-----------+----+----+------+
|   P     |   PCL is   | Sale of Raw    | For Sale  | -  | -  | 36.6 |
| olyplex |   the      | material –     | of Chips  |    |    |      |
|   Corp  |            | Polyester      | to PCL,   |    |    |      |
| oration |  Company’s | Chips to PCL – | as per    |    |    |      |
|   Ltd.  |   major    | from PTL       | Transfer  |    |    |      |
|   (PCL) |   sh       |                | Pricing   |    |    |      |
|         | areholder, |                | policy of |    |    |      |
|         |   owning   |                | PCL       |    |    |      |
|         |   directly |                | (Study    |    |    |      |
|         |   and      |                | done by   |    |    |      |
|         |            |                | Ersnt &   |    |    |      |
|         | indirectly |                | Young and |    |    |      |
|         |   the 51%  |                | TNMM      |    |    |      |
|         |   of the   |                | [Tran     |    |    |      |
|         |            |                | sactional |    |    |      |
|         |  Company’s |                | Net       |    |    |      |
|         |   share    |                | Margin]   |    |    |      |
|         |   capital  |                | Method    |    |    |      |
|         |   and the  |                | re        |    |    |      |
|         |   two      |                | commended |    |    |      |
|         |   parties  |                | for       |    |    |      |
|         |   have     |                | Transfer  |    |    |      |
|         |   common   |                | pricing.  |    |    |      |
|         |            |                |           |    |    |      |
|         | directors. |                |           |    |    |      |
+---------+------------+----------------+-----------+----+----+------+
|   P     |   PAPL is  | Payment of     | Loans     |    |    | 3.9  |
| olyplex |   the      | interest by    | carried a |    |    |      |
|         |            | Polyplex       | fixed     |    |    |      |
|  (Asia) |  Company’s | Resins Sanayi  | interest  |    |    |      |
|   Pte   |   major    | Ve Ticaret     | rate of   |    |    |      |
|   Ltd   |   sh       | A.S, on the    | 4.5% pa   |    |    |      |
|         | areholder, | loans borrowed | until     |    |    |      |
|  (PAPL) |   owning   | from PAPL      | September |    |    |      |
|         |   directly |                | 2012, but |    |    |      |
|         |   34.5% of |                | have been |    |    |      |
|         |   the      |                | made      |    |    |      |
|         |            |                | interest  |    |    |      |
|         |  Company’s |                | free      |    |    |      |
|         |   share    |                | w.e.f     |    |    |      |
|         |   capital  |                | 1^(st)    |    |    |      |
|         |   and the  |                | October   |    |    |      |
|         |   two      |                | 2012.     |    |    |      |
|         |   parties  |                |           |    |    |      |
|         |   have a   |                |           |    |    |      |
|         |   common   |                |           |    |    |      |
|         |            |                |           |    |    |      |
|         |  director. |                |           |    |    |      |
+---------+------------+----------------+-----------+----+----+------+
|   P     |   PAPL is  | Acquisition by | At cost   | -  | -  | 244  |
| olyplex |   the      | Polyplex       | to PAPL   |    |    |      |
|         |            | Europa         |           |    |    |      |
|  (Asia) |  Company’s | Polyester Film |           |    |    |      |
|   Pte   |   major    | Sanayi Ve      |           |    |    |      |
|   Ltd   |   sh       | Ticaret A.S,   |           |    |    |      |
|         | areholder, | from PAPL, a   |           |    |    |      |
|  (PAPL) |   owning   | 67% stake in   |           |    |    |      |
|         |   directly | Polyplex       |           |    |    |      |
|         |   34.5% of | Resins Sanayi  |           |    |    |      |
|         |   the      | Ve Ticaret A.S |           |    |    |      |
|         |            |                |           |    |    |      |
|         |  Company’s |                |           |    |    |      |
|         |   share    |                |           |    |    |      |
|         |   capital  |                |           |    |    |      |
|         |   and the  |                |           |    |    |      |
|         |   two      |                |           |    |    |      |
|         |   parties  |                |           |    |    |      |
|         |   have a   |                |           |    |    |      |
|         |   common   |                |           |    |    |      |
|         |            |                |           |    |    |      |
|         |  director. |                |           |    |    |      |
+---------+------------+----------------+-----------+----+----+------+

2.  Necessity and reasonableness of the connected transactions

The connected transaction involved the advance payments made by PCL on
behalf of the Company and its subsidiaries for administrative expenses.
The payments were made for such expenses as transportation,
accommodations for employees’ family, educational fees for employees’
children, insurance claims of employees, project related expenses etc.
The Company and its subsidiaries have given the appropriate accounting
treatment to these expenses and/or collected these amounts from the
employees and paid them back to PCL. The reimbursement of
advances/expenses was to PCL was at the actual prices incurred without
any extra charge by PCL.

The connected transaction also involved the advance payments made by the
Company and its subsidiaries on behalf of PCL for administrative
expenses, which were later re-imbursed by PCL.

During the year, the connected transaction also involved some purchases
of Raw materials i.e Polyester Chips and Polyester Film from PCL. All
purchases were made at Arm’s Length Pricingas recommended in the
Transfer Pricing study carried out by external agencies at various
locations.

Apart from the above, the connected transactions during the year also
involved the acquisition by Polyplex Europa Polyester Film Sanayi Ve
Ticaret A.S.(“PE”), of 67% of shares of Polyplex Resins Sanayi Ve
Ticaret A.S (“PR”), Turkey, from Polyplex (Asia) Pte Ltd (“PAPL”). PAPL
is holding 34.5% stake in the Company and this transaction is hence,
considered to be a connected party transaction as per SEC guidelines.
All disclosures and compliances in relation to the SEC and SET
guidelines for connected party transaction have been complied with. The
interested Directors abstained from voting on this Agenda relating to
the connected transaction. The Audit Committee and the Board of
Directors are of the opinion that the entry into this transaction is
reasonable and at a fair value and would enable shareholders of PTL to
benefit from this new business opportunity and also diversify the risks
and cyclicality associated with Polyester Film industry.

11.3 Measures or procedures for approval of the connected transaction

The audit committee of PTL has examined the connected transaction
described in the table above and viewed that it is in accordance with
the normal business practice. For the transaction of share acquisition
described above, which is not a normal business transaction, prior
approval of the Board of Directors was taken before execution of the
transaction. For all normal business transactions in the future such as
purchase and sale of material, reimbursement of expenses, the Company
can undertake the transactions and inform the audit committee and the
Board of Directors on a quarterly basis.

For any other future connected transactions, which are not normal
business transactions, the Company will assign the concerned units to
gather the relevant information and provide it to the audit committee to
be used as a basis for its consideration on those transactions as to
whether they are consistent with the normal business practice and the
market price. The Company would ensure that it follows the applicable
regulations of the SEC and SET in this regard. The audit committee has
to consider and inform the board of directors for the approval. The
directors who have a conflict of interest may not partake in the giving
of comments on those connected transactions.

11.4 Policy for potential connected transactions

For any connected transactions that may take place in the future, the
Company has a policy to set appropriate conditions on the said
transactions based on the reasons and necessity of the Company. The
connected transactions performed over the past period were advance
payments, made for such expenses as transportation, accommodations for
employees’ family, educational fees for employees’ children, insurance
claims of employees etc and also some raw material procurements as
explained above. There were no extra charges by the parent company
regarding such cost and expenses as brand name and R & D, and so on. In
performing any future connected transactions, PTL board of directors
will comply with the law governing securities and exchange and the
regulations, notifications and orders of the Stock Exchange of Thailand,
as well as the regulations regarding disclosure of information about
connected transactions and acquisition or disposal of core assets of
companies or subsidiary companies according to the accounting standards
defined by the Institute of Certified Accountants and Auditors of
Thailand.

Where the connected transaction involves any person who may have a
conflict of interest, the Company will arrange for the audit committee
to give opinion on the necessity and appropriateness of that
transaction. In case the audit committee has no expertise in any such
transaction, the Company will have an independent expert or its external
auditor provide opinion on that transaction to be used as a basis of
decision-making by the board of directors or the shareholders, as the
case may be. The Company will disclose such connected transactions in
the notes to the financial statements duly audited by its external
auditor.