11. Financial Position and Operating Performance

The following management’s discussion and analysis should be read in
conjunction with our consolidated financial statements. Our financial
statements have been prepared in Thai Baht currency in accordance with
Thai Generally Accepted Accounting Principles (“Thai GAAP”). Our
financial statements have been derived from our audited consolidated
financial statements for the years ended December 31, 2010, 2011 & 2012.
Additionally, you should read the information in notes to financial
statements, containing summary of our critical accounting policies. In
some case, in preparing our financial statements, our management may
make judgments, estimates and assumptions on business transactions so as
to prepare financial statements which are comply with generally accepted
accounting standards. The following discussion and analysis included the
forward-looking statements reflecting our current views with respect to
future events and future performance. Thus, a number of factors could
cause actual results or outcomes to differ materially from those
expressed in any forward-looking statement as described in Risk Factors
and any statements appearing elsewhere.

Management’s Discussion & Analysis (MD&A)

Overview

Indorama Ventures PCL (SET: “IVL”) achieved consolidated sales of US$
6,780 million (Baht 211 Billion) for the Year 2012, an increase of 11%
over 2011. The 2012 consolidated reported EBITDA of US$ 453 million
(Baht 14.1 Billion), consolidated net profit after tax and minority of
US$ 148 million (Baht 4.6 Billion), consolidated operating cash flow of
US$ 471 million (Baht 14.6 Billion) and consolidated return on average
net operating capital employed of 7%.

Production volume for year 2012 achieved is 5.3 million tonnes an
increase of 20% over the full year 2011. Core earnings continued to be
in trough territory and had impacts across the value chain of PTA, PET
and Polyester especially in Asia (see margin analysis) due to the:

-   Impact from sentiments on continuing Chinese slowdown, reflected by
    quarter on quarter drop in their economy for many quarters on all
    major economic indicators and exacerbated by;

-   Continuing oversupply of PTA in Asia, which is weakening spreads
    across the value chain in the region and is marginally impacting the
    western markets, in particular the South European markets for PET,
    which seems to have larger appetite for the risk associated with
    imports.

-   Newly integrated Polyester Value Chain companies in China are
    increasing their market share during a period of weak economic
    climate and therefore pushing margins to un-sustainable levels and
    in many cases below the cash cost of independent operators in both
    the PTA and PET segments.

-   

Notwithstanding the Industry situation, IVL strategy is to have
diversity in its revenue stream (see details in sections below) that has
been helping the company to out-perform its peers (please see margin
analysis later). In the last twelve months the company’s operations have
significantly improved its cost position and ongoing strategic
investments in accretive capacity build up in select markets will have a
lasting benefit going forward;

-   Integration into the EO and MEG business in North America which has
    the lowest cost feedstock; the timing of entry coincides with the
    uptrend in EO and MEG margins due to increasing utilization rates
    globally. The Company is in the process of adding AlphaPet 2 PET
    capacity with virtual integration to BP at Decatur, Alabama and
    repositioning legacy assets to meet the growing specialty demand.

-   Increased specialty (non-commodity) revenue to US$ 1.3 billion or
    19% of sales in 2012 versus 10% in 2011. These non-commodity sales
    have lower margins volatility and lesser seasonal impact (see margin
    analysis).

-   Expanded the Rotterdam site with an additional 187kt per year of
    PET, which makes the site the most competitive across Europe and
    will fully leverage the on-site PTA production, resulting in
    logistic savings that will benefit the bottom line.

-   Initiated new expansion projects in PTA and PET in Europe as
    de-bottleneck capex rather than as a new build at much lower capital
    cost and better incremental conversion cost that will further
    improve the Rotterdam site’s integrated PTA and PET footprint and
    cost competitiveness. Similar initiative ongoing at our Polish site
    where a 60kt PET expansion will be ready in early 2014.

-   Completed in 4Q 2012 the de-bottleneck expansion of our GIVL China
    PET site, which is now the largest site in IVL group with over 500kt
    of PET, commensurate with scale required to be profitable in China.

-   IVL completed the acquisition of the formerly named Polypet in
    Indonesia, a rapidly emerging market, to command a 44% capacity
    share in line with our strategic objective to play the leadership
    role in Polyester Value Chain in Thailand and Indonesia and to serve
    the better margin domestic markets as our first priority. The
    Greenfield Polyester expansion in Indonesia is in an advanced stage
    of construction and commercial output is expected in the second half
    2013 that will further enhance IVL’s cost competitiveness in
    commodity segments as well as help us gain leadership position in
    the rapidly expanding textile segment in Indonesia.

-   Entered a new Continent, Africa by starting an 84kt per year PET
    plant in Nigeria to gain first mover advantage in a region which is
    expected to grow at the most rapid rates in this century.

-   The revitalized focus on cost excellence has resulted in synergy
    benefits of $40 million on an annualized basis in 2012 and there are
    ongoing projects for similar size savings in 2013 across the various
    acquisitions made to date.

The trend is that the benefits of PET and Polyester continue to increase
the overall demand, in line with historical rates and therefore the
underlying fundamentals for Polyester value chain remains attractive.
The IVL business model of global diversity, product diversity and
integration creates meaningful hedges against weakness in a particular
region or segment as reflected in our results (see margin analysis). The
operating cash flow remains healthy and has increased Year on Year as
seen below.

[]

IVL compares on par with regional and global peers in chemicals despite
trough earnings in 2012.

[]

Margin analysis

The graph below show industry margins historically (except Specialty
margins which are IVL actual) and IVL portfolio share as a percentage of
its consolidated capacity. The specialty segment has continued to grow
in capacity, revenue and margin per tonne and represents 14% share of
capacity. The Western hemisphere business has grown to 48% of capacity
share with relatively stable and premium margins. IVL continues to
develop accretive business portfolios in all its business segments to
reduce the volatility typically associated with Asian commodity business
as well as focus on operational excellence to give sustainable above
average earnings across the cycle.

[]

[]

[]

Source: Industry data, IVL analysis, “% of IVL” is % to IVL
capacities, * 2% Fibers & Yarns in NA is Commodity which is not included
here

Exposure to premium segments + Geographic diversity in Revenue +
Operating excellence

  ---------------- ----------- ----------------- -------------- -----------
  (US$ MM)         Specialty   West Commodity    Asia Commodity IVL

  Year 2012                                                     

  Revenue          1,306       4,062             2,580          6,780

  Adjusted         101         300               52             453
  EBITDA**                                                      

  % Contribution   22%         66%               12%            

  Value Add (%)*   27%         20%               13%            22%

  Year 2011                                                     

  Revenue          585         3,809             2,801          6,102

  Adjusted         53          295               213            561
  EBITDA**                                                      

  % Contribution   9%          53%               38%            

  Value Add (%)*   20%         18%               18%            22%

  Year 2010                                                     

  Revenue          166         1,826             1,833          3,055

  Adjusted EBITDA  14          167               254            435

  % Contribution   3%          39%               58%            

  Value Add (%)*   21%         21%               26%            30%
  ---------------- ----------- ----------------- -------------- -----------

*Value Add (%) = Delivered Delta/Sales, ** Adjusted EBITDA excludes non
operational expenses during flooding period in Lopburi

The indicators in green, yellow and red visually explain the state of
these IVL segments. The highlights from this table are;

-   IVL businesses created the same Value add percentage in 2012 as in
    2011 despite Asian margins falling off a cliff in 2012. This was
    achieved by the addition of higher Value add businesses that blended
    well with our Polyester chain business and offset the drop in Asian
    commodity Value add. The EBITDA could not be totally protected as
    lower utilization rates, increases in manpower cost, higher energy
    costs in Asia and stronger Asian currencies have resulted in overall
    higher cost which are in the process of being optimized and
    therefore our thrust is on operational excellence measures in 2012
    and 2013 with activities identified and either completed or in
    advanced stages of completion.

-   IVL’s Western hemisphere commodity business has significantly grown
    in the last 2 years even in the face of very weak economic
    conditions. There is a relative growth in absolute EBITDA reflecting
    the resilience in these markets and the brand value of IVL. This
    segment is relatively stable as reflected in the Value add
    percentage over the last 3 years.

-   The Asian commodity segment has materially underperformed and has
    been hit by a ‘perfect storm’. At its peak in 2010 and first half of
    2011, mostly driven by the cotton shortage, this segment represented
    26% Value add. In 2012 the value add has dropped to a low 13%. The
    Asian region is also facing cost pressures and a stronger currency
    that IVL has mitigated through substantial operating excellence
    projects but requires further improvements in 2013 that have been
    identified. China has been substantially debottlenecked to become
    our lowest cost platform and the largest PET site in the world. The
    300kt Polyester plant in Indonesia will have the lowest cost and
    will cater to growing demand in Indonesia as well as replace some
    export markets that were catered from Thailand. The Thai assets are
    being restructured to cater to specialties that better absorb the
    high costs in Thailand. The weak PTA environment in Asia will take
    longer to balance out and IVL is currently focused on maximizing
    internal sales and improving the cost structure to compete
    efficiently with the new crop of plants.

Topline Growth

The charts below provide details of annual production volumes and US
Dollar sales, both regional and segment wise. IVL has continued to grow
its market share in each of its segments year on year. The strong
diversified global platform of scale assets and competitive market reach
allows IVL to focus on delivering premium value to stakeholders and in
turn a sustainable business. Scale has been leveraged in supply chain
management and has resulted in above average sustainable earnings. The
global reach and our portfolio of specialty and sustainable products
have provided the platform for accretive growth Year on Year.

[]

  Note: EMEA includes Europe, Middle East, Africa and rest of the world

[]

Bottomline

The charts below provide details of the EBITDA for the preceding
quarters. IVL has continued to shape its mix of businesses and
geographic diversity to enable the company to achieve high level of
sustainable earnings over the long-term.

Fundamentally the core margins in Asia for commodity PTA, PET and
Polyester were weaker QonQ in 2012 due to significant over build of
capacity in an already fragmented region. Although the demand grew in
line with historical trend but the excess build of new capacity in China
was aggravated due to slow economic activity and has put unprecedented
pressure on margins. New producers chasing reduced pipeline inventory of
customers who were buying on need base only, in anticipation of lower
prices, significantly lowered margins to below cash costs in H2 2012 for
the Industry.

IVL has been alert to this situation since 2011 and has improved its
cost position and its overall inventory management and therefore
releasing cash as well as avoiding any mark to market losses at the
expense of temporary lower utilization rates. The company increased
overall production by 20% in 2012 including timely addition of an EO/EG
business and hygiene portfolio that has led to EBITDA growth QonQ and a
significant 166% growth in 4Q 2012 YonY.

Regionally, North America remained the top performer while Europe was
slightly weak in light of the continued economic slowdown that has
engulfed most of South Europe. Operational excellence measures at
Spartanburg, a Brownfield PET capacity addition at Rotterdam,
acquisition of a global hygiene business as well as the addition of the
Oxide and Glycol business in North America, have potentially offset the
weak Polyester chain margins in Asia.

[]

[][]

Outlook / Targets for management / Guidance for 2013

IVL’s core end products are PET and Polyester fibers and specialty
products therein. We have an established supply chain and a strong
financial profile. We have global leadership in this segment.

Our end products are the most competitive alternative in their space
with strong growth due to the high performance and ample R&D potential
to innovate PET and Polyester to enhance end use. PET has the lowest
effective cost in the packaging sector, where as Polyester is the most
affordable fiber with limited competition from cotton due to its
scarcity. Therefore growth in the Polyester chain continues at high
historical rates shows resilience. The structural tightness in MEG and
Paraxylene will limit over supply of PET and Polyester. Current Asian
margins are below cash cost and are not sustainable. The industry will
squeeze marginal producers in the Polyester value chain in all regions
leading to gradual recovery of margins through 2013 and beyond.

We believe that there is going to be a substantial rationalization of
older, non-strategic assets across Asia, Europe and North America. The
buildup (inclusive of IVL projects) of new, state of the art,
competitive capacity in all regions that is underway will force these
rationalizations in PET, Polyester and Film segments. IVL has already
invested in upgrading its assets in all regions and has reviewed and
renewed its strategy going forward of “smart growth” and “smart
operations”.

IVL business model of global diversity, product diversity and
integration creates meaningful hedges and as such delivers sustainable
returns. Management is focused on the consolidation of businesses
acquired to bring about significant gains from synergies and as well
from new products by leveraging on our industry leading innovation
platform. We remain very optimistic about the Polyester Value Chain and
IVL leadership within this chain. We are well-positioned to improve our
cost structure and take significant advantage when the global recovery
takes place. Meanwhile, we are confident that our portfolio will
continue to deliver the lowest cost quartile results.

Management has reviewed the operations of 2012 and has established
targets for 2013. The key drivers for 2013 are;

-   Enhancing operating rates to 90% gradually and average of 87% in
    2013 from 83% in 2012.

-   Completing ongoing growth projects on schedule and on budget.

-   Delivering additional savings from operating excellence projects to
    the tune of US$ 35 million.

-   Address the loss making JV and seek a aggressive improvement plan

-   Successfully migrate EO/EG turnaround in March/April and optimize
    the operations to benefit from Industry upside.

-   Fully leverage on IVL leading platform in Recycling and Innovation
    to grow specialties at legacy assets in line with ‘fit for purpose’
    drive and migrate knowledge base and customer intimacy to emerging
    market assets of IVL.

-   Complete new JV negotiations for Paraxylene integration in Middle
    East and Integrated PTA/PET/Fiber project in India for commercial
    startup in 2016.

-   Continue to monitor and improve working capital management and grow
    operating cash flow.

+----------------------+-----------------------+-----------------------+
| Guidance 2013        | 1.  2013              | 2.  % change to 2012  |
+----------------------+-----------------------+-----------------------+
| Production (mm       | 3.  6.0               | 4.  +15%              |
| tonnes)              |                       |                       |
+----------------------+-----------------------+-----------------------+
| Revenue (US$ bn)     | 5.  8.1               | 6.  +19%              |
+----------------------+-----------------------+-----------------------+
| Ebitda (US$ mm)      | 7.  575               | 8.  +27%              |
+----------------------+-----------------------+-----------------------+
| Capex (US$ mm)       | 9.  300               | 10. (78%)             |
+----------------------+-----------------------+-----------------------+

Financial Statements

The consolidated and separate financial statements for the year ended
December 31, 2010 was audited by Mr. Vichien Thamtrakul, Certified
Public Accountant, with registration No. 3183 and for the years ended
December 31, 2011 and 2012 were audited by Mr. Winid Silamongkol,
Certified Public Accountant, with registration No. 3378 of KPMG
Phoomchai Audit Ltd.

Summary of audit report of Certified Public Accountant of the Company

Financial Statement For the years ended 31 December 2012 and 2011

The auditor gives an opinion that the consolidated and separate
financial statements referred to above present fairly, in all material
respects, the financial positions as at 31 December 2012 and 2011,the
financial performance and cash flows for the years then ended of
Indorama Ventures Public Company Limited and tis subsidiaries, and of
Indorama Ventures Public Company Limited, respectively, in accordance
with Thai Financial Reporting Standards.

Without qualifying my opinion, the auditor draws attention to the
following matters:

As disclosed in Note 4 to the financial statements, the Group completed
the acquisition of PT Indorama Polypet Indonesia resulting in the
recording of a gain on bargain purchase in the consolidated statement of
income for the year ended 31 December 2012 of Baht 121.2 millon. The
fair values of the business acquired and the allocation of purchase
price have been provisionally determined and are subject to potential
amendment.

Financial Statement For the years ended 31 December 2011 and 2010

The auditor gives an opinion that the consolidated and separate
financial statements referred to above present fairly, in all material
respects, the financial positions as at 31 December 2011 and 2010 , and
the results of operations and cash flows for the years then ended of
Indorama Ventures Public Company Limited and its subsidiaries, and of
Indorama Ventures Public Company Limited, respectively, in accordance
with Financial Reporting Standard.

The auditor did not audit the financial statements of one
jointly-controlled entity and its subsidiary established in 2010 for the
year ended 31 December 2011. The carrying value of this investment in
the consolidated statement of financial position as at 31 December 2011
amounted to Baht 2,062.0 million and share of loss of jointly-controlled
entity recorded in the consolidated statement of income was Baht 5.6
million. The financial statements of this jointly-controlled entity and
its subsidiary were audited by other auditors whose report has been
furnished to me and my report, insofar as it relates to the amounts
included for this jointly-controlled entity and its subsidiary, is based
solely on the report of the other auditor. The consolidated and separate
financial statements of Indorama Ventures Public Company Limited and its
subsidiaries, and of Indorama Ventures Public Company Limited,
respectively, for the year ended 31 December 2010 were audited by
another auditor whose report dated 21 February 2011 expressed an
unqualified opinion on those statements. In addition, that report of
another auditor made reference to the report of the other auditor who
audited the financial statements of one jointly-controlled entity and
its subsidiary. As explained in Notes 2 and 3 to the accompanying
financial statements, with effect from 1 January 2011 the Company has
adopted certain new and revised financial reporting standards. The
consolidated and separate financial statements for the year ended 31
December 2010 have been restated accordingly. The auditor has audited
the adjustments that were applied to the restatement of those financial
statements and in my opinion those adjustments are appropriate and have
been properly applied.

Without qualifying the opinion, the auditor draws attention to the
following matters:

As disclosed in Note 5 to the financial statements, the Company
completed an acquisition of Wellman International Limited and its
subsidiaries and MJR Recycling B.V. on 30 November 2011, resulting in
the recording of gain on a bargain purchase which was recorded in the
consolidated statement of income for the year ended 31 December 2011 in
the amount of Baht 133.4 million. The fair value of businesses acquired
has been provisionally determined and is subject to potential amendment
as disclosed in Note 5.

As disclosed in Notes 5 and 13 to the financial statements, Trevira
Holdings GmbH, a jointly-controlled entity, acquired 100% ownership of
Trevira GmbH in July 2011. The Company applied the equity method of
accounting for its investment in Trevira Holdings GmbH in the
consolidated financial statements for the year ended 31 December 2011
and recorded its 75% interest in the profit of Trevira Holdings GmbH,
amounting to Baht 1,329.2 million, as a share of profit of
jointly-controlled entity in the consolidated statement of income for
the year ended 31 December 2011. This share of profit includes 75% of a
provisional gain on a bargain purchase of Baht 2,134.5 million,
amounting to Baht 1,600.9 million. The final determination of the share
of profit of Trevira Holdings GmbH depends on the finalization of the
independent appraisal of the fair value of Trevira GmbH and the
completion of the purchase price allocation.

As disclosed in Note 13 to the financial statements, the Company applied
the equity method of accounting for its investment in PT Indorama
Petrochemicals, a jointly-controlled entity, in the consolidated
financial statements for the year ended 31 December 2011 and recorded
its 42% interest in the loss of PT Indorama Petrochemicals, amounting to
Baht 9.1 million, as a share of loss of jointly-controlled entity in the
consolidated statement of income for the year ended 31 December 2011.
This share of loss includes 42% of an excess in the Group’s share in the
provisional fair value of identifiable net assets over cost of Baht 37.5
million, amounting to Baht 15.7 million. The final determination of the
share of loss of PT Indorama Petrochemicals depends on the finalization
of the independent appraisal of the fair value of identifiable net
assets as disclosed in Note 13.

The following table sets forth summary of the consolidated financial
statements of Indorama Ventures Public Company Limited from 2010 to 2012

Statements of Financial Position (Consolidated Financial Statements)

  --------------------------- ---------- -------- ----------- ------- ----------- -------
  Assets                      Year Ended                                          
                              December                                            
                              31,                                                 

  Unit: Baht million          2010       %        2011        %       2012        %
                                                  Restated                        

                                                                                  

  Assets                                                                          

  Current assets                                                                  

  Cash and cash equivalent    1,482.6    1.9      12,018.0    8.2     4,375.3     2.6

  Current investments         541.7      0.7      5,688.5     3.9     227.6       0.1

  Trade account receivable    11,770.7   15.1     24,508.8    16.8    25,606.7    15.0

  Short-term loans to related 0.0        0.0      0.0         0.0     0.2         0.0
  parties                                                                         

  Inventories                 11,384.3   14.6     21,422.3    14.7    24,683.3    14.5

  Other current assets        964.9      1.2      4,132.8     2.8     5,067.6     3.0

  Total current assets        26,144.2   33.5     67,770.4    46.5    59,960.7    35.2

  Non-current assets                                                               

  Investment in               2,012.6    2.6      5,416.4     3.7     5,238.5     3.1
  jointly-controlled entity                                                       

  Other long-term investments 20.3       0.0      -           -       105.0       0.1

  Long-term loan to related   -          -        -           -       60.8        0.0
  parties                                                                         

  Property, plant and         48,820.2   62.6     66,722.7    45.8    86,434.9    50.7
  equipment                                                                       

  Goodwill                    -          -        395.4       0.3     6,796.8     4.0

  Intangible assets           760.2      1.0      4,408.2     3.0     10,383.2    6.1

  Other non-current assets    183.1      0.2      1,101.9     0.8     1,495.4     0.9

  Total non-current assets    51,796.3   66.5     78,044.6    53.5    110,514.6   64.8

  Total assets                77,940.6   100.00   145,815.0   100.0   170,475.3   100.0
  --------------------------- ---------- -------- ----------- ------- ----------- -------

  --------------------------- ----------- ------- ------ ----------- ---------- ------- ------ ----------- ----------- -------
  Liabilities and Equity      Year Ended                                                                               
                              December                                                                                 
                              31,                                                                                      

  Unit: Baht million          2010                %                  2011               %                  2012        %
                                                                     Restated                                          

  Liabilities                                                                                                           

  Current liabilities                                                                                                   

  Bank overdrafts and         5,364.9             6.9                13,676.9           9.4                13,373.0    7.8
  short-term loans from                                                                                                
  financial institutions                                                                                               

  Trade account payable       10,858.3            13.9               17,978.1           12.3               22,315.6    13.1

  Current portion of          5,912.5             7.6                6,440.1            4.4                5,609.7     3.3
  long-term loans from                                                                                                 
  financial institutions                                                                                               

  Current portion of finance  22.1                0.0                18.4               0.0                41.1        0.0
  lease liabilities                                                                                                    

  Income tax payable          267.6               0.3                874.0              0.6                1,027.4     0.6

  Other current liabilities   1,612.4             2.1                4,213.9            2.9                4,919.3     2.9

  Total current liabilities   24,037.8            30.8               43,201.3           29.6               47,286.1    27.7

  Non-current liabilities                                                                                               

  Long-term loans from        20,710.5            26.6               33,702.0           23.1               39,987.7    23.5
  financial institutions                                                                                               

  Debentures                  0.0                 0.0                7,468.7            5.1                21,623.8    12.7

  Finance lease liabilities   58.4                0.1                40.1               0.0                3.3         0.0

  Employee benefit            107.1               0.1                772.7              0.5                881.1       0.5
  obligations                                                                                                          

  Other non-current           785.0               1.0                1,864.5            1.3                808.2       0.5
  liabilities                                                                                                          

  Total non-current           21,661.0            27.8               43,847.9           30.1               63,304.2    37.1
  liabilities                                                                                                          

  Total liabilities           45,698.9            58.6               87,049.2           59.7               110,590.3   64.9

                                                                                                                       

  Liabilities and Equity      Year Ended                                                                               
                              December                                                                                 
                              31,                                                                                      

  Unit: Baht million          2010        %              2011                   %              2012                    %
                                                         Restated                                                      

  Equity                                                                                                               

  Share capital                                                                                                        

  Authorised share capital    4,815.9     6.2            4,815.9                3.3            4,815.9                 2.8

  Issued and paid-up share    4,334.3     5.6            4,814.3                3.3            4,814.3                 2.8
  capital                                                                                                              

  Additional paid-in capital                                                                                           

  Share premium               13,030.8    16.7           29,774.6               20.4           29,774.6                17.5

  Currency translation        (2,068.4)   (2.7)          (2,196.0)              (1.5)          (2,599.6)               (1.5)
  differences                                                                                                          

  Revaluation surplus         2,255.0     2.9            1,761.4                1.2            1,487.8                 0.9

  Excess of cost over book    (3,307.0)   (4.2)          (3,295.0)              (2.3)          (3,295.0)               (1.9)
  value of acquired                                                                                                    
  subsidiaries                                                                                                         

  Difference arising from     (1,580.7)   (2.0)          (1,235.6)              (0.8)          (1,235.6)               (0.7)
  common control transactions                                                                                          

  Defined benefit plan                                   (101.4)                (0.1)          (167.2)                 (0.1)
  actuarial losses, net                                                                                                

  Fair value changes on cash  (109.0)     (0.1)          (105.9)                (0.1)          (45.5)                  (0.0)
  flow hedges                                                                                                          

  Retained earnings                                                                                                    

  Appropriated                                                                                                         

  Legal reserve               604.2       0.8            1,326.2                0.9            1,739.5                 1.0

  Unappropriated              18,749.5    24.1           27,883.9               19.1           29,079.4                17.1

  Total equity attributable                                                                                            
  to equity                                                                                                            

  holders of the Company      31,908.6    40.9           58,626.6               40.2           59,552.7                34.9

  Non-controlling interests   333.1       0.4            139.1                  0.1            332.2                   0.2

  Total equity                32,241.7    41.4           58,765.8               40.3           59,885.0                35.1

  Total liabilities and       77,940.6    100.0          145,815.0              100.0          170,475.3               100.0
  equity                                                                                                               
  --------------------------- ----------- ------- ------ ----------- ---------- ------- ------ ----------- ----------- -------

Statements of Income (Consolidated Financial Statements)

  ------------------------ ---------- ------- ----------- ------- ----------- -------
                           Year Ended                                         
                           December                                           
                           31,                                                

  Unit: Baht million       2010       %       2011        %       2012        %
                                              Restated                        

                                                                               

  Income                                                                       

  Revenue from sale of     96,858.2   100.0   186,095.9   100.0   210,784.7   100.0
  goods                                                                       

  Interest income          7.1        0.0     487.4       0.3     277.3       0.1

  Net foreign exchange     1,178.4    1.2     306.4       0.2     428.2       0.2
  gain                                                                        

  Gain on a bargain        562.8      0.6     6,752.6     3.6     847.5       0.4
  purchase                                                                    

  Impact of flooding, net  -          -       -           -       1,873.0     0.9

  Other income             157.0      0.2     812.0       0.4     976.7       0.5

  Total revenue            98,763.5   102.0   194,454.2   104.5   215,187.4   102.1

                                                                              

  Expenses                                                                    

  Cost of sale of goods    82,066.4   84.7    165,754.2   89.1    193,479.7   91.8

  Selling and              5,710.5    5.9     9,750.2     5.2     11,837.9    5.6
  administrative expenses                                                     

  Management benefit       110.8      0.1     78.3        0.0     110.7       0.1
  expenses                                                                    

  Impairment losses due to -          -       1,644.7     0.9     -           -
  flood                                                                       

  Total expenses           87,887.8   90.7    177,227.4   95.2    205,428.3   97.5

  Share of profit (loss)   1,888.2    1.9     1,303.4     0.7     (911.3)     (0.4)
  of jointly-controlled                                                       
  entity, net                                                                 

  Profit before finance                                                       
  costs and                                                                   

  income tax expenses      12,763.9   13.2    18,530.2    10.0    8,847.9     4.2

  Finance costs            1,303.1    1.3     2,370.1     1.3     3,448.6     1.6

  Income tax expenses      487.8      0.5     742.2       0.4     579.7       0.3

  Profit for the year      10,973.0   11.3    15,417.9    8.3     4,819.6     2.3

  Profit attributable to:                                                     

  Owners of the Company    10,413.4   10.7    15,556.9    8.4     4,611.2     2.2

  Non-controlling          559.6      0.6     (138.9)     (0.1)   208.4       0.1
  interests                                                                   

  Profit for the year      10,973.0   11.3    15,417.9    8.3     4,819.6     2.3

  Earnings per share –     2.46               3.29                0.96        
  basic                                                                       
  ------------------------ ---------- ------- ----------- ------- ----------- -------

Cash Flow Statement (Consolidated Financial Statements)

+-------------------------------------------+--------+--------+-------+
|                                           | Year   |        |       |
|                                           | Ended  |        |       |
|                                           | De     |        |       |
|                                           | cember |        |       |
|                                           | 31,    |        |       |
+-------------------------------------------+--------+--------+-------+
| Unit: Baht million                        | 2010   | 2011   | 2012  |
|                                           |        | Re     |       |
|                                           |        | stated |       |
+-------------------------------------------+--------+--------+-------+
|                                           |        |        |       |
+-------------------------------------------+--------+--------+-------+
| Cash flows from operation activities      |        |        |       |
+-------------------------------------------+--------+--------+-------+
| Profit for the year                       | 10     | 15     | 4,    |
|                                           | ,973.0 | ,417.9 | 819.6 |
+-------------------------------------------+--------+--------+-------+
| Adjustment for                            |        |        |       |
+-------------------------------------------+--------+--------+-------+
| Gain on bargain purchases                 | (      | (6,    | (8    |
|                                           | 562.8) | 752.6) | 47.5) |
+-------------------------------------------+--------+--------+-------+
| Provision (reversal) for bad and doubtful | (0.3)  | (32.2) | 11.1  |
| debts expense, net                        |        |        |       |
+-------------------------------------------+--------+--------+-------+
| Interest income                           | (7.1)  | (      | (2    |
|                                           |        | 487.4) | 77.3) |
+-------------------------------------------+--------+--------+-------+
| Depreciation and amortisation             | 3      | 4      | 6,    |
|                                           | ,471.5 | ,776.5 | 663.8 |
+-------------------------------------------+--------+--------+-------+
| Finance costs                             | 1      | 2      | 3,    |
|                                           | ,303.1 | ,370.1 | 448.6 |
+-------------------------------------------+--------+--------+-------+
| Unrealized foreign exchange (gain) loss   | (      | (      | 200.3 |
|                                           | 800.9) | 213.3) |       |
+-------------------------------------------+--------+--------+-------+
| Provision (reversal) for inventory        | (6.7)  | 53.3   | 5.6   |
| obsolescence, net                         |        |        |       |
+-------------------------------------------+--------+--------+-------+
| Loss (gain) on disposal of property,      | (8.4)  | (7.1)  | (4.5) |
| plant and equipment, net                  |        |        |       |
+-------------------------------------------+--------+--------+-------+
| Write-off of property, plant and          |        |        | 14.4  |
| equipment                                 |        |        |       |
+-------------------------------------------+--------+--------+-------+
| Income tax expenses                       | 487.8  | 742.2  | 579.7 |
+-------------------------------------------+--------+--------+-------+
| Employee benefits expense                 | 53.0   | 128.2  | 164.6 |
+-------------------------------------------+--------+--------+-------+
| Impairment for inventory and machinery    |        | 1      | 0.2   |
| and equipment due to flood                |        | ,674.7 |       |
+-------------------------------------------+--------+--------+-------+
| Gain on sale of flood damaged inventory   |        |        |       |
| and property,                             |        |        |       |
+-------------------------------------------+--------+--------+-------+
| plant and equipment as a result of scrap  |        |        | (1    |
| sales                                     |        |        | 13.8) |
+-------------------------------------------+--------+--------+-------+
| Gain on disposal of investment in other   |        |        | (2.5) |
| equity securities                         |        |        |       |
+-------------------------------------------+--------+--------+-------+
| Share of (profit) loss of                 | (1,    | (1,    | 911.3 |
| jointly-controlled entities,net           | 888.2) | 303.4) |       |
+-------------------------------------------+--------+--------+-------+
|                                           | 13     | 16     | 15,   |
|                                           | ,014.0 | ,367.1 | 573.5 |
+-------------------------------------------+--------+--------+-------+
| Change in operating assets and            |        |        |       |
| liabilities                               |        |        |       |
+-------------------------------------------+--------+--------+-------+
| Trade accounts receivable                 | (2,    | (1,    | 1,    |
|                                           | 786.6) | 487.1) | 031.9 |
+-------------------------------------------+--------+--------+-------+
| Inventories                               | (2,    | (5,    | (1,3  |
|                                           | 414.8) | 116.8) | 62.6) |
+-------------------------------------------+--------+--------+-------+
| Other current assets                      | 1.3    | 4      | (2    |
|                                           |        | ,074.4 | 56.7) |
+-------------------------------------------+--------+--------+-------+
| Other non-current assets                  | 19.2   | (      | 22.3  |
|                                           |        | 343.2) |       |
+-------------------------------------------+--------+--------+-------+
| Trade accounts payable                    | 2      | (      | 1,    |
|                                           | ,786.1 | 297.0) | 865.6 |
+-------------------------------------------+--------+--------+-------+
| Other current liabilities                 | 215.8  | (4,    | (5    |
|                                           |        | 476.3) | 79.4) |
+-------------------------------------------+--------+--------+-------+
| Other non-current liabilities             | 16.9   | 869.5  | (1    |
|                                           |        |        | 10.3) |
+-------------------------------------------+--------+--------+-------+
| Employee benefits paid                    |        | (3.2)  | (1    |
|                                           |        |        | 04.5) |
+-------------------------------------------+--------+--------+-------+
| Income taxes paid                         | (      | (      | (6    |
|                                           | 468.9) | 192.4) | 26.0) |
+-------------------------------------------+--------+--------+-------+
| Net cash provided by (used in) operating  | 10     | 9      | 15,   |
| activities                                | ,383.1 | ,395.0 | 454.0 |
+-------------------------------------------+--------+--------+-------+
|                                           |        |        |       |
+-------------------------------------------+--------+--------+-------+
| Cash flows from investing activities      | 5.9    | 416.2  | 314.1 |
|                                           |        |        |       |
| Interest received                         |        |        |       |
+-------------------------------------------+--------+--------+-------+
| (Purchase) sale of other investments, net | 618.5  | (5,    | 5,    |
|                                           |        | 119.7) | 355.7 |
+-------------------------------------------+--------+--------+-------+
| Sale of investment in other equity        |        |        | 2.5   |
| securities                                |        |        |       |
+-------------------------------------------+--------+--------+-------+
| Purchase of property, plant and equipment | (2,    | (6,    | (10,8 |
|                                           | 418.4) | 877.2) | 65.9) |
+-------------------------------------------+--------+--------+-------+
| Proceeds from sales of property, plant    | 12.4   | 48.9   | 27.5  |
| and equipment                             |        |        |       |
+-------------------------------------------+--------+--------+-------+
| Proceeds from sale of flood damaged       |        |        |       |
| inventory and property,                   |        |        |       |
+-------------------------------------------+--------+--------+-------+
| plant and equipment as a result of scrap  |        |        | 113.8 |
| sales                                     |        |        |       |
+-------------------------------------------+--------+--------+-------+
| Purchase of intangible assets             | (6.4)  | (5.8)  | (7.0) |
+-------------------------------------------+--------+--------+-------+
| Net cash outflow on acquisition of        | (1,    | (23,   | (30,8 |
| business                                  | 048.9) | 095.6) | 90.0) |
+-------------------------------------------+--------+--------+-------+
| Net cash outflow on additional investment | (3,    | (2,    | (4    |
| in subsidiaries and jointly-controlled    | 075.1) | 220.1) | 13.8) |
| entities                                  |        |        |       |
+-------------------------------------------+--------+--------+-------+
| Net cash inflow on disposal of investment |        | 9.0    |       |
| in a subsidiary                           |        |        |       |
+-------------------------------------------+--------+--------+-------+
| Net cash provided by (used in) investing  | (5,    | (36,   | (36,3 |
| activities                                | 912.0) | 844.3) | 62.8) |
+-------------------------------------------+--------+--------+-------+
|                                           |        |        |       |
+-------------------------------------------+--------+--------+-------+
|                                           |        |        |       |
+-------------------------------------------+--------+--------+-------+
|                                           |        |        |       |
+-------------------------------------------+--------+--------+-------+
|                                           | Year   |        |       |
|                                           | Ended  |        |       |
|                                           | De     |        |       |
|                                           | cember |        |       |
|                                           | 31,    |        |       |
+-------------------------------------------+--------+--------+-------+
| Unit: Baht million                        | 2010   | 2011   | 2012  |
|                                           |        | Re     |       |
|                                           |        | stated |       |
+-------------------------------------------+--------+--------+-------+
|                                           |        |        |       |
+-------------------------------------------+--------+--------+-------+
| Cash flow from financing activities       |        |        |       |
+-------------------------------------------+--------+--------+-------+
| Interest paid                             | (1,    | (2,    | (3,1  |
|                                           | 338.7) | 152.5) | 51.4) |
+-------------------------------------------+--------+--------+-------+
| Deferred financing cost paid              | -      | (      | (1    |
|                                           |        | 131.3) | 83.0) |
+-------------------------------------------+--------+--------+-------+
| Dividends paid                            | (1,    | (5,    | (3,2  |
|                                           | 488.8) | 629.9) | 90.6) |
+-------------------------------------------+--------+--------+-------+
| Proceeds from short and long-term         | 4      | 34     | 22,   |
| borrowings                                | ,887.5 | ,602.3 | 345.7 |
+-------------------------------------------+--------+--------+-------+
| Repayment of short and long-term          | (10,   | (13,   | (16,5 |
| borrowings                                | 058.2) | 400.2) | 14.5) |
+-------------------------------------------+--------+--------+-------+
| Repayment of finance leases               | (26.1) | (22.1) | (     |
|                                           |        |        | 20.1) |
+-------------------------------------------+--------+--------+-------+
| Proceeds from issue of shares             | 3      | 17     | -     |
|                                           | ,824.5 | ,223.8 |       |
+-------------------------------------------+--------+--------+-------+
| Proceeds from issue of debenture          | -      | 7      | 14,   |
|                                           |        | ,467.7 | 148.0 |
+-------------------------------------------+--------+--------+-------+
| Loans to a jointly-controlled entity      |        |        | (     |
|                                           |        |        | 60.1) |
+-------------------------------------------+--------+--------+-------+
| Net cash provided by (used in) financing  | (4,    | 37     | 13,   |
| activities                                | 199.8) | ,957.9 | 273.9 |
+-------------------------------------------+--------+--------+-------+
|                                           |        |        |       |
+-------------------------------------------+--------+--------+-------+
| Net increases (decreases) in cash and     | 271.3  | 10     | (7,6  |
| cash equivalents                          |        | ,508.5 | 35.0) |
+-------------------------------------------+--------+--------+-------+
| Cash and cash equivalent at beginning of  | 1      | 1      | 12,   |
| year                                      | ,396.8 | ,482.6 | 018.0 |
+-------------------------------------------+--------+--------+-------+
| Effect of exchange rate changes on        |        |        |       |
| balances held                             |        |        |       |
+-------------------------------------------+--------+--------+-------+
| in foreign currencies                     | (      | 26.9   | (7.7) |
|                                           | 185.5) |        |       |
+-------------------------------------------+--------+--------+-------+
| Cash and cash equivalents at end of year  | 1      | 12     | 4,    |
|                                           | ,482.6 | ,018.0 | 375.3 |
+-------------------------------------------+--------+--------+-------+

Key Financial Ratio

+-----------------------------+-------+----------+----------+----------+
|                             |       | Year     |          |          |
|                             |       | Ended    |          |          |
|                             |       | December |          |          |
|                             |       | 31,      |          |          |
+=============================+=======+==========+==========+==========+
|                             |       | 2010     | 2011     | 2012     |
|                             |       |          | Restated |          |
+-----------------------------+-------+----------+----------+----------+
| Liquidity Ratio             |       |          |          |          |
+-----------------------------+-------+----------+----------+----------+
| Current Ratio               | Times | 1.1      | 1.6      | 1.3      |
+-----------------------------+-------+----------+----------+----------+
| Quick Ratio                 | Times | 0.6      | 1.0      | 0.6      |
+-----------------------------+-------+----------+----------+----------+
| Account Receivable Turnover | Times | 8.9      | 10.2     | 8.4      |
+-----------------------------+-------+----------+----------+----------+
| Day Sales Outstanding       | Days  | 40.5     | 35.3     | 43.1     |
+-----------------------------+-------+----------+----------+----------+
| Inventory Turnover          | Times | 7.8      | 9.9      | 8.2      |
+-----------------------------+-------+----------+----------+----------+
| Inventory Days              | Days  | 46.3     | 36.5     | 43.8     |
+-----------------------------+-------+----------+----------+----------+
| Account Payable Turnover    | Times | 8.3      | 11.5     | 9.6      |
+-----------------------------+-------+----------+----------+----------+
| Account Payable Days        | Days  | 43.6     | 31.3     | 37.5     |
+-----------------------------+-------+----------+----------+----------+
| Cash Cycle                  | Days  | 43.2     | 40.5     | 49.5     |
+-----------------------------+-------+----------+----------+----------+
| Profitability Ratio         |       |          |          |          |
+-----------------------------+-------+----------+----------+----------+
| Gross Margin                | %     | 15.3     | 10.9     | 8.2      |
+-----------------------------+-------+----------+----------+----------+
| Operating Margin            | %     | 9.4      | 5.7      | 2.6      |
+-----------------------------+-------+----------+----------+----------+
| Net Profit Margin           | %     | 11.1     | 7.9      | 2.2      |
+-----------------------------+-------+----------+----------+----------+
| Return on Equity            | %     | 42.4     | 34.4     | 7.8      |
+-----------------------------+-------+----------+----------+----------+
| *Adjusted Return on Equity  | %     | 42.4     | 34.4     | 8.9      |
+-----------------------------+-------+----------+----------+----------+
| Efficiency Ratio            |       |          |          |          |
+-----------------------------+-------+----------+----------+----------+
| Return on Assets            | %     | 14.4     | 13.8     | 3.0      |
+-----------------------------+-------+----------+----------+----------+
| Return on Fixed Assets      | %     | 29.4     | 35.0     | 15.0     |
+-----------------------------+-------+----------+----------+----------+
| Total Assets Turnover       | Times | 1.3      | 1.7      | 1.4      |
+-----------------------------+-------+----------+----------+----------+
| Financial Policy Ratio      |       |          |          |          |
+-----------------------------+-------+----------+----------+----------+
| Total Liabilities to Equity | Times | 1.4      | 1.5      | 1.8      |
| ratio                       |       |          |          |          |
+-----------------------------+-------+----------+----------+----------+
| Interest-bearing Debt to    | Times | 1.0      | 1.0      | 1.3      |
| Equity                      |       |          |          |          |
+-----------------------------+-------+----------+----------+----------+
| Net Interest-bearing Debt   | Times | 0.9      | 0.7      | 1.3      |
| to Equity                   |       |          |          |          |
+-----------------------------+-------+----------+----------+----------+
|   Interest Coverage Ratio   | Times | 8.0      | 4.0      | 4.5      |
|   (on Net Cash provided by  |       |          |          |          |
|   operating activities)     |       |          |          |          |
+-----------------------------+-------+----------+----------+----------+
| Interest Coverage Ratio (on | Times | 10.6     | 9.0      | 4.4      |
| EBITDA)                     |       |          |          |          |
+-----------------------------+-------+----------+----------+----------+

*Annualised Net Profit for Old World in 2012

Revenue from sale of goods

+------------------------------+-------------+------------+-----------+
|                              |             |            |           |
+------------------------------+-------------+------------+-----------+
| Baht in Millions             | FY 2012     | FY 2011    | Change    |
|                              |             |            | (%)       |
|                              |             | (Restated) |           |
+------------------------------+-------------+------------+-----------+
|                              |             |            |           |
+------------------------------+-------------+------------+-----------+
| Revenue from sale of goods   | 210,784.7   | 186,095.9  | 13.3%     |
+------------------------------+-------------+------------+-----------+
| Add: Eliminations            | 33,622.4    | 31,455.1   |           |
+------------------------------+-------------+------------+-----------+
| Adjusted revenue from sale   | 244,407.1   | 217,551.0  | 12.3%     |
| of goods                     |             |            |           |
+------------------------------+-------------+------------+-----------+
| PET                          | 133,478.2   | 129,671.0  | 2.9%      |
+------------------------------+-------------+------------+-----------+
| Fibers & Yarns               | 42,235.8    | 25,184.4   | 67.7%     |
+------------------------------+-------------+------------+-----------+
| Feedstock                    | 68,693.1    | 62,695.6   | 9.6%      |
+------------------------------+-------------+------------+-----------+

Sales revenue for the year ended 2012 was Baht 210,784.7 million,
increased by Baht 24,688.8 million or 13.3% from 2011. Sales revenue
increased in all business segments mainly from the volume growth from
acquisitions. Besides, 2012 is the first full year of operations of
acquired business in year 2011.

PET Revenue

PET revenue for the year ended 2012 was Baht 133,478.2 million,
increased by Baht 3,807.2 million or 2.9% from 2011, driven by volume
growth from strong global demand and new acquisitions and greenfields.
The volume growth of 10% from last year mainly resulted from startup of
IVL Nigeria Greenfield in July 2012, Polypet in August 2012.

Fibers & Yarns Revenue

Polyester and wool revenue for the year ended 2012 was Baht 42,235.8
million, increased by Baht 17,051.4 million or 67.7% from 2011, driven
by volume growth. The volume growth of 88% from last year generally
resulted from full year operation of Wellman that had been acquired
since November 2011 and acquisition of FiberVisions completed in 1Q
2012. The Wool segment in Lopburi has started up partially in 3Q 2012
from flooding since 4Q 2011, also contributed to the growth in volume.
Higher production volume and revenue was also led by product mix shift
towards higher value-addition fibers and yarns.

Feedstock Revenue

Feedstock revenue for the year ended 2012 was Baht 68,693.1 million,
increased by Baht 5,997.5 million or 9.6% from 2011, driven by volume
growth. The volume growth of 18% from last year mainly resulted from the
acquisition of the Oxide & Glycols business in North America, which has
started delivering earnings to IVL in 2Q 2012. The Feedstock integration
with the inclusion of the Oxide & Glycols business along with PTA allows
IVL to continue to operate at high utilization rates as captive demand
from PET & Fiber & Yarns segments remain strong.

Cost of Sale of goods

+-------------------------------+-------------+-------------+---------+
|                               |             |             |         |
+-------------------------------+-------------+-------------+---------+
| Baht in Millions              | FY 2012     | FY 2011     | Change  |
|                               |             |             | (%)     |
|                               |             | (Restated)  |         |
+-------------------------------+-------------+-------------+---------+
|                               |             |             |         |
+-------------------------------+-------------+-------------+---------+
| Cost of sale of goods         | 187,490.3   | 161,272.4   | 16.3%   |
+-------------------------------+-------------+-------------+---------+
| As a percentage of total      | 88.9%       | 86.7%       |         |
| revenues from the sale of     |             |             |         |
| goods                         |             |             |         |
+-------------------------------+-------------+-------------+---------+
| Add: Eliminations             | 33,622.4    | 31,455.1    |         |
+-------------------------------+-------------+-------------+---------+
| Adjusted cost of sales of     | 221,112.7   | 192,727.5   | 14.7%   |
| goods                         |             |             |         |
+-------------------------------+-------------+-------------+---------+
| PET                           | 121,611.7   | 115,597.7   | 5.2%    |
+-------------------------------+-------------+-------------+---------+
| As a percentage of total PET  | 91.1%       | 89.1%       |         |
| revenue                       |             |             |         |
+-------------------------------+-------------+-------------+---------+
| Fibers & Yarns                | 38,006.8    | 21,989.4    | 72.8%   |
+-------------------------------+-------------+-------------+---------+
| As a percentage of total      | 90.0%       | 87.3%       |         |
| Fibers & Yarns revenue        |             |             |         |
+-------------------------------+-------------+-------------+---------+
| Feedstock                     | 61,494.2    | 55,140.4    | 11.5%   |
+-------------------------------+-------------+-------------+---------+
|   As a percentage of total    | 89.5%       | 87.9%       |         |
|   Feedstock revenue           |             |             |         |
+-------------------------------+-------------+-------------+---------+

Cost of sales for the year ended 2012 is Baht 187,490.3 million,
increased by Baht 26,217.9 million or 16.3% from 2011 which is in line
with increase in sales revenue.

PET Cost of Sale of Goods

For the year ended 2012, PET cost of sale of goods was Baht 121,611.7
million, increased by Baht 6,014.0 million or 5.2% from 2011, driven by
volume growth. The volume growth mainly resulted from startup of IVL
Nigeria Greenfield and Polypet, Indonesia.

Fibers & Yarns Cost of Sale of Goods

For the year ended 2012, Fibers & Yarns cost of sale of goods were Baht
38,006.8 million, increased by Baht 16,017.4 million or 72.8% from 2011,
driven by the volume growth and value added mix of products as explained
in Revenue section above.

Feedstock Cost of Sale of Goods

For the year ended 2012, Feedstock cost of sales of goods was Baht
61,494.2 million, increased by Baht 6,353.8 million or 11.5% from 2011,
driven by the volume growth i.e acquisition of Oxide & Glycols assets in
USA.

Gross Profit

+--------------------------------+------------+------------+----------+
|                                |            |            |          |
+--------------------------------+------------+------------+----------+
| Baht in Millions               | FY 2012    | FY 2011    | Change   |
|                                |            |            | (%)      |
|                                |            | (Restated) |          |
+--------------------------------+------------+------------+----------+
|                                |            |            |          |
+--------------------------------+------------+------------+----------+
| Gross Profit                   | 23,294.4   | 24,823.5   | (6.2%)   |
+--------------------------------+------------+------------+----------+
| As a percentage of total       | 11.1%      | 13.3%      |          |
| revenues from the sale of      |            |            |          |
| goods                          |            |            |          |
+--------------------------------+------------+------------+----------+
| Add: Eliminations              | -          | -          |          |
+--------------------------------+------------+------------+----------+
| Adjusted gross profit          | 23,294.4   | 24,823.5   | (6.2%)   |
+--------------------------------+------------+------------+----------+
| PET                            | 11,866.5   | 14,073.3   | (15.7%)  |
+--------------------------------+------------+------------+----------+
| As a percentage of total PET   | 8.9%       | 10.9%      |          |
| revenue                        |            |            |          |
+--------------------------------+------------+------------+----------+
| Fibers & Yarns                 | 4,229.0    | 3,195.0    | 32.4%    |
+--------------------------------+------------+------------+----------+
| As a percentage of total       | 10.0%      | 12.7%      |          |
| Fibers & Yarns revenue         |            |            |          |
+--------------------------------+------------+------------+----------+
| Feedstock                      | 7,198.9    | 7,555.2    | (4.7%)   |
+--------------------------------+------------+------------+----------+
| As a percentage of total       | 10.5%      | 12.1%      |          |
| Feedstock revenue              |            |            |          |
+--------------------------------+------------+------------+----------+

Gross Profit for the year ended 2012 was Baht 23,294.4 million,
decreased by Baht 1,529.1 million or (6.2%) from 2011. The gross profit
margin of 11.1% in 2012 decreased slightly from the prior year mainly
due to margins of our products, which caused gross profit in proportion
to sales lower comparing year on year. Please refer to Margin analysis
graph in “Overview Section”.

PET Gross Profit

For the year ended 2012, PET gross profit was Baht 11,866.5 million,
decreased by Baht 2,206.8 million from 2011. PET gross profit margin in
2012 was 8.9%, decreased from prior year because of decrease in PET
margins during the year. Please refer to Margin analysis graph in
“Overview Section”.

Fibers & Yarns Gross Profit

For the year ended 2012, Fibers & Yarns gross profit was Baht 4,229.0
million, increased by Baht 1,034.0 million from 2011, due to volume
increase. Gross profit margin in 2012 was 10.0%, decreased from the
prior year due to decrease in margins. Please refer to Margin analysis
graph in “Overview Section”.

Feedstock Gross Profit

For the year ended 2012, PTA gross profit was Baht 7,198.9 million,
decreased by Baht 356.3 million from 2011. Feedstock gross profit margin
in 2012 was 10.5%, decreased from prior year mainly due to sharp drop in
margins across the globe, from continuing oversupply of PTA in Asia and
extreme volatilities in this segment. However high MEG margins in USA
helped to compensate some loss of margins in PTA in Asia. Please refer
to Margin analysis graph in “Overview Section”.

Earnings Before Interest Expenses, Income Taxes, Depreciation &
Amortization (EBITDA)

+---------------------------------+------------+------------+---------+
|                                 |            |            |         |
+---------------------------------+------------+------------+---------+
| Baht in Millions                | FY 2012    | FY 2011    | Change  |
|                                 |            |            | (%)     |
|                                 |            | (Restated) |         |
+---------------------------------+------------+------------+---------+
| EBITDA⁽¹⁾                       | 14,096.6   | 17,120.6   | (17.7%) |
+---------------------------------+------------+------------+---------+
| As a percentage of total        | 6.7%       | 9.2%       |         |
| revenues from the sale of goods |            |            |         |
+---------------------------------+------------+------------+---------+
| Add: Eliminations and others⁽²⁾ | 132.4      | (223.6)    |         |
+---------------------------------+------------+------------+---------+
| Adjusted EBITDA                 | 13,964.2   | 17,344.2   | (19.5%) |
+---------------------------------+------------+------------+---------+
| PET                             | 6,130.5    | 8,685.6    | (29.4%) |
+---------------------------------+------------+------------+---------+
| As a percentage of total PET    | 4.6%       | 6.7%       |         |
| revenue                         |            |            |         |
+---------------------------------+------------+------------+---------+
| Fibers & Yarns                  | 2,184.3    | 2,544.3    | (14.1%) |
+---------------------------------+------------+------------+---------+
| As a percentage of total Fibers | 5.2%       | 10.1%      |         |
| & Yarns revenue                 |            |            |         |
+---------------------------------+------------+------------+---------+
| Feedstock⁽³⁾                    | 5,649.4    | 6,114.3    | (7.6%)  |
+---------------------------------+------------+------------+---------+
| As a percentage of total        | 8.2%       | 9.8%       |         |
| Feedstock revenue               |            |            |         |
+---------------------------------+------------+------------+---------+

(1) EBITDA is calculated from sales revenue adding by net foreign
    exchange gain(loss) and other income, deducting by cost of sales,
    selling & administrative expenses (excludes depreciation &
    amortization), management benefits expenses, and adjusting by
    extraordinary items.

(2) Eliminations and others include the amounts attributable to
    intra-group transactions and EBITDA of holding companies.

(3) There is no allocation of PTA earnings to PET and Polyester segment
    (based on the proportion of sales)

EBITDA for the year ended 2012 was Baht 14,096.6 million, decreased by
Baht 3,024 million or (17.7%) from 2011. EBITDA margin was 6.7% in 2012,
decreased from prior year mainly due to weakness in margins, driven by
weak sentiments on continuing global slowdown and over capaity. Please
refer “Overview” section for more analysis of business profitability &
macro factors. IVL achieved EBITDA per ton of US$ 86 in 2012, which
decreased from US$ 129 in 2011 due to above reasons.

PET EBITDA

PET EBITDA for the year ended 2012 was Baht 6,130.5 million, a decrease
by Baht 2,555.1 million from 2011 and EBITDA margin decreased to 4.6% in
2012 primarily due to overcapacity & margin weakness. Year 2011 was
particularly very high margin year, driven by cotton shortage across the
polyester value chain.

Fibers & Yarns EBITDA

Fibers & Yarns EBITDA for the year ended 2012 was Baht 2,184.3 million,
a decrease by Baht 360.0 million from 2011 driven by depressed
sentiments in China and Europe. Fibers & Yarns EBITDA margin in 2012 was
5.2%, decreased from 10.1% in 2011 due to sharp drop margins. Year 2011
was particularly very high margin year, driven by cotton shortage across
the polyester value chain.

Feedstock EBITDA

Feedstock EBITDA for the year ended 2012 was Baht 5,649.4 million, which
decreased by Baht 464.9 million from 2011. This was mainly driven by
continuing overcapacity of PTA in Asia that is weakening spreads across
the value chain in the region and is marginally impacting the western
markets. However, the acquisition of the Oxide & Glycols business in
North America has started delivering strong margin to IVL since 2Q 2012
and have compensated some loss of EBITDA in this segment. Year 2011 was
particularly very high margin year, driven by cotton shortage across the
polyester value chain.

Other Revenues

+---------------------------------+-----------+-----------+----------+
|                                 |           |           |          |
+---------------------------------+-----------+-----------+----------+
| Baht in Millions                | FY 2012   | FY 2011   | Change   |
|                                 |           |           | (%)      |
|                                 |           | (         |          |
|                                 |           | Restated) |          |
+---------------------------------+-----------+-----------+----------+
|                                 |           |           |          |
+---------------------------------+-----------+-----------+----------+
| Interest Income                 | 277.3     | 487.4     | (43.1%)  |
+---------------------------------+-----------+-----------+----------+
| Net foreign exchange gain       | 428.2     | 306.4     | 39.8%    |
| (loss)                          |           |           |          |
+---------------------------------+-----------+-----------+----------+
| Gain on a bargain purchase      | 847.5     | 6,752.6   | (87.5%)  |
+---------------------------------+-----------+-----------+----------+
| Impact of flooding, net         | 1,873.0   | -         | n.a      |
+---------------------------------+-----------+-----------+----------+
| Other income                    | 976.7     | 812.0     | 20.3%    |
+---------------------------------+-----------+-----------+----------+
| Total                           | 4,402.7   | 8,358.4   | (47.3%)  |
+---------------------------------+-----------+-----------+----------+

Interest Income

Interest Income for the year ended 2012 was Baht 277.3 million,
decreased by Baht 210.1 million or (43.1%) from 2011. This was mainly
due to lower cash & cash equivalents in 2012 comapred to 2011. The cash
held in 2011 was primarily used in various acquisitions compelted in
2012.

Net foreign exchange gain (loss)

Net foreign exchange gain (loss) for the year ended 2012 was Baht 428.2
million, an increase from 2011 by Baht 121.8 million or 39.8%. This was
primarily because of our efficient & timely hedging habits of our
exports, imports and other monetary assets & liabilities. Also driven by
weakening average THB against USD in 2012 over 2011 i.e. 31.09 in 2012
against 30.50 in 2011.

Gains on bargain purchases

During the year 2012, IVL has acquired several businesses where the
excess of the Group’s interest in the net identified assets and
liabilities of the companies acquired over cost (recognized values are
higher than the consideration transferred) is considered as gains on
bargain purchases, and is recognized in the consolidated statement of
income in accordance with generally accepted accounting principles for
business combinations. In 2012 and 2011, IVL had gains on bargain
purchases of Baht 847.5 million and Baht 6,752.6 million, respectively.
Details are as follows:

+-----------------------+-------+--------+--------+----------+-------+
|                       | Net   |        |        | Total    | Gain  |
|                       | ident |        |        | Consi    | on    |
|                       | ified |        |        | deration | ba    |
|                       | a     |        |        |          | rgain |
|                       | ssets |        |        |          | pur   |
|                       | acq   |        |        |          | chase |
|                       | uired |        |        |          |       |
|                       |       |        |        |          |       |
|                       | and   |        |        |          |       |
|                       | l     |        |        |          |       |
|                       | iabil |        |        |          |       |
|                       | ities |        |        |          |       |
|                       | as    |        |        |          |       |
|                       | sumed |        |        |          |       |
+-----------------------+-------+--------+--------+----------+-------+
| Baht in Millions      | Car   | Fair   | Reco   |          |       |
|                       | rying | value  | gnized |          |       |
|                       | am    | adjus  | values |          |       |
|                       | ounts | tments |        |          |       |
+-----------------------+-------+--------+--------+----------+-------+
| Companies acquired    |       |        |        |          |       |
| during the years      |       |        |        |          |       |
| ended December 31,    |       |        |        |          |       |
| 2012                  |       |        |        |          |       |
+-----------------------+-------+--------+--------+----------+-------+
| FiberVisions Holdings | 4,    | 2      | 6      | 6,144.6  | 726.3 |
| LLC, USA              | 727.4 | ,143.5 | ,870.9 |          |       |
+-----------------------+-------+--------+--------+----------+-------+
| Beverage Plastics     | (     | 70.2   | 9.4    | 4.8*     | -     |
| (Holdings) Limited,   | 60.8) |        |        |          |       |
| United Kingdom        |       |        |        |          |       |
+-----------------------+-------+--------+--------+----------+-------+
| Old World, USA        | 5,    | 13     | 18     | 24,977.2 | -     |
|                       | 331.6 | ,207.0 | ,538.6 |          |       |
+-----------------------+-------+--------+--------+----------+-------+
| PT Indorama Polypet   | 2,    | (1,    | 767.0  | 645.9    | 121.2 |
| Indonesia, Indonesia  | 017.0 | 250.0) |        |          |       |
+-----------------------+-------+--------+--------+----------+-------+
|                       |       |        |        |          | 847.5 |
+-----------------------+-------+--------+--------+----------+-------+
| December 31, 2011     |       |        |        |          |       |
+-----------------------+-------+--------+--------+----------+-------+
| Grupo Arteva          | 10,   | (      | 9      | 7,701.1  | 1,    |
| S.de.R.L.de C.V.      | 192.3 | 665.0) | ,527.3 |          | 826.2 |
| ,Mexico               |       |        |        |          |       |
+-----------------------+-------+--------+--------+----------+-------+
| Indorama Polymers     | 1,    | 1      | 2      | 1,396.0  | 1,    |
| Poland S.p.z.o.o.     | 589.0 | ,337.4 | ,926.4 |          | 530.4 |
| ,Poland               |       |        |        |          |       |
+-----------------------+-------+--------+--------+----------+-------+
| Guangdong IVL PET     | 1,    | 406.8  | 1      | 1,511.6  | 406.8 |
| Polymer Company       | 511.6 |        | ,918.4 |          |       |
| Limited, China        |       |        |        |          |       |
+-----------------------+-------+--------+--------+----------+-------+
| Auriga Polymers Inc., | 5,    | 2      | 8      | 5,741.5  | 2,    |
| USA                   | 950.2 | ,647.1 | ,597.3 |          | 855.8 |
+-----------------------+-------+--------+--------+----------+-------+
| Wellman International | 2,    | -      | 2      | 2,177.6  | 133.4 |
| Limlited,             | 311.0 |        | ,311.0 |          |       |
| The Republic of       |       |        |        |          |       |
| Ireland               |       |        |        |          |       |
+-----------------------+-------+--------+--------+----------+-------+
|                       |       |        |        |          | 6,    |
|                       |       |        |        |          | 752.6 |
+-----------------------+-------+--------+--------+----------+-------+

*51% interest acquired

Gain on a bargain purchase is considered by management as extraordinary
items which do not arise from normal operation of the business, but
included in the net profit of the company. Additional information on
each acquisition is provided in the Note 4 – Acquisitions of businesses
in the Audited Financial Statements. Net identifiable assets acquired
including intangible assets i.e. customer contracts, technology licenses
and knowhow, trade name and trademarks, were recognized in the financial
statement at fair value, and subject to depreciation, amortization or
impairment (If any) in accordance with generally accepted accounting
principles disclosed in Note 3 – The significant accounting policies in
the Audited Financial Statements.

The intangible assets acquired through business combinations during the
year 2012 were Baht 6,571 million. Amortization is recognized in profit
or loss over the following estimated useful lives: supplier contract–
indefinite; technology licenses and knowhow– 30 years; software
licenses– 3-15 years; customer contracts and relationships– 7.25-35
years; trade name and trademarks– indefinite. Major intangible assets of
the company are technology licenses and knowhow, and customer contracts
and relationships. Additional information on intangible assets is
provided in the Note 15 – Intangible assets and Note 3 – The significant
accounting policies in the Audited Financial Statements.

Impact of flooding, net

Impact of flooding of Baht 1,873 million mainly come from insurance
claim from flooding that already record as impairment loss in 2011.
Please refer Note 38 of our financial statements for further details on
this item.

Other Income

Other income for the year ended 2012 was Baht 976.7 million, increased
from 2011 by Baht 164.7 million or 20.3% mainly due to income from
insurance, due to new acquisitions, incentives, and other miscellaneous
incomes during the year 2012. Please refer Note 24 of our financial
statements for further details on this item.

Share of profit (loss) of jointly-controlled entities, net

IVL had share of equity gain (loss) from joint venture of Baht (911.3)
million and Baht 1,303.4 million for the year ended 2012 and 2011
respectively. Share of equity loss from joint venture for the year ended
2012 were resulted from the following jointly controlled entities: UAB
Ottana Polimeri Europe, Trevira Holding GmbH, PT Indorama Petrochemicals
and Indorama Ventures Performance Fiber Holdings LLC. Please refer Note
12 of our financial statements for further details on this item. 2011
share of equity gain of 1303.4 also includes a gain on bargin purchase
of Baht 1588.9 millions. There is net loss contribution from operations
in year 2012 and 2011 due to higher cost and low margins in these joint
ventures. Management has initiated various steps to turnaround these
projects.

Expenses

+--------------------------------+-----------+-----------+-----------+
|                                |           |           |           |
+--------------------------------+-----------+-----------+-----------+
| Baht in Millions               | FY 2012   | FY 2011   | Change    |
|                                |           |           | (%)       |
|                                |           | (         |           |
|                                |           | Restated) |           |
+--------------------------------+-----------+-----------+-----------+
|                                |           |           |           |
+--------------------------------+-----------+-----------+-----------+
| Selling expenses               | 8,528.8   | 6,305.5   | 35.3%     |
+--------------------------------+-----------+-----------+-----------+
| Administrative expenses        | 3,309.1   | 3,444.7   | (3.9%)    |
+--------------------------------+-----------+-----------+-----------+
| Management benefit expenses    | 110.7     | 78.3      | 41.4%     |
+--------------------------------+-----------+-----------+-----------+
| Impairment losses due to flood | -         | 1,644.7   | n.a       |
+--------------------------------+-----------+-----------+-----------+
| Total                          | 11,948.6  | 11,473.2  | 4.1%      |
+--------------------------------+-----------+-----------+-----------+

Total expenses for the year ended 2012 was Baht 11,948.6 million,
increasing from year 2011 by Baht 475.4 million or 4.1% as a result of
higher selling expenses and management benefit expenses in line with the
growth in the volumes. Several acquisitions in the beginning of 2012 not
only led to higher selling administrative expenses, but also incurred
acquisition related expenses. The provision has been set up for
impairment losses due to severe flood in Thailand in 4Q 2011 of Baht
1,644.7 million which recovered as insurance claim in 2012 and included
in Income section in 2012.

Management benefit expenses increase in primarily due to increase in
Contribution to Defined Contribution plans and Social Security expense
which are statutory expense. Please refer Note 28 of our financial
statements for further details on this item.

Finance Costs

Finance costs for the year ended 2012 was Baht 3,448.6 million, an
increase by Baht 1,078.5 million from 2011 in line with increasing in
both short-term and long-term loans to support business growth led by
acquisitions and greenfields.

Income Tax Expense

Income tax expense for the year ended 2012 was Baht 579.7 million, a
decrease by Baht 162.5 million from 2011 in line with decreade in
earnings in 2012.

Net Profit

+--------------------------------+------------+------------+----------+
| Bath in Millions               | FY 2012    | FY 2011    | Change   |
|                                |            | (Restated) | (%)      |
+--------------------------------+------------+------------+----------+
| Net profit                     | 4,819.6    | 15,417.9   | (68.7%)  |
+--------------------------------+------------+------------+----------+
| As a percentage of toal        | 2.3        | 8.3        |          |
| revenues from the sale of      |            |            |          |
| goods                          |            |            |          |
+--------------------------------+------------+------------+----------+
| Profit attributable to:        |            |            |          |
+--------------------------------+------------+------------+----------+
| Owners of the Company          | 4,611.2    | 15,556.9   | (70.4%)  |
|                                |            |            |          |
| Non-controlling interests      | 208.4      | (138.9)    | (250%)   |
+--------------------------------+------------+------------+----------+

Net Profit for the year ended 2012 was Baht 4,819.6 million, decreasing
by Baht 10,598.3 million or (68.7%) from 2011 due to lower margins in
2012 over 2011, lower gain on bargin purchases in 2012 and higher losses
from Joint Ventures in 2012. The net profit for the period included
extraordinary items i.e. gains on bargain purchases, insurance incomes
and related transaction expenses incurred on acquisitions completed.
These non-recurring items are not from the normal operation of the
business.

Financial Position

Total Assets

As of December 31, 2012 and 2011, IVL had total assets of Baht 170,475.3
million and Baht 145,815.0 million, respectively. The 16.9% increase was
mainly due to business expansion and several acquisitions. Major assets
are as follows:

Trade Accounts Receivable

As of December 31, 2012 and 2011, IVL had trade accounts receivable of
Baht 25,606.7 million, and Baht 24,508.8 million respectively,
representing 15.0% and 16.8% of total assets. This improvement has come
due to better monitoring and management of debts. Allowance for doubtful
accounts is in a very low narrow range due to this close follow up and
collections in time. Aging analysis for trade accounts receivable was as
follows:

  ----------------------------------- ---------------- -- -----------------
                                      Consolidated        
                                      Financial           
                                      Statement           

                                      31 December 2012    31 December 2011

                                      (Baht in            
                                      Millions)           

  Related parties                                         

  Within credit terms                 1,616.3             1,456.5

  Overdue:                                                

  Less than 3 months                  78.9                0.5

  Less allowance for doubtful         -                   -
  accounts                                                

  Net                                 1,695.1             1,457.1

                                                          

  Other parties                                           

  Within credit terms                 20,306.8            18,925.8

  Overdue:                                                

  Less than 3 months                  3,402.8             4,135.8

  3-6 months                          164.9               18.1

  6-12 months                         36.0                9.8

  Over 12 months                      190.0               144.1

                                      24,100.4            23,233.7

  Less allowance for doubtful         (188.8)             (181.9)
  accounts                                                

  Net                                 23,911.6            23,051.7

  Total                               25,606.7            24,508.8
  ----------------------------------- ---------------- -- -----------------

Inventories

As of December 31, 2012 and 2011, IVL had inventories of Baht 24,683.3
million and Baht 21,422.3 million respectively, representing 14.5% and
14.7% of total assets. This increase in line with the expansion and
business growth in year 2012.

Property, plant and equipment

As of December 31, 2012 and 2011, IVL had property, plant equipment of
and Baht 86,434.9 million and Baht 66,722.7 million, respectively,
representing 50.7% and 45.8% of total assets. The significant increase
in property, plant and equipment resulted from our business expansions
through investments and acquisitions in overseas. Please refer Note 13
of our financial statements for further details on this item.

Total Liabilities

As of December 31, 2012 and 2011, IVL had total liabilities of Baht
110,590.3 million and Baht 87,049.2 million, respectively. The increase
in total liabilities resulted from increase in loans from financial
institutions, issuance of debentures, and higher trade accounts payable
which are all in line with the growth of the volumes from acquisitions
and greenfield projects.

Trade accounts payable

As of December 31, 2012 and 2011, IVL had trade accounts payable of Baht
22,315.6 million and Baht 17,978.1 million respectively. The payment
days for the year ended 2012 and 2011 were 37.5 days and 31.3 days
respectively. This is in line with the growth of the volumes from
acquisitions and greenfield projects.

Interest-bearing liabilities

As of December 31, 2012 and 2011, IVL had interest-bearing liabilities
of Baht 80,638.6 million and Baht 61,346.2 million respectively,
representing 47.3% and 42.1% of total liabilities and shareholder's
equity. The details of Interest-bearing liabilities are as follows:

+---+--------------------------------+---+---+--------+---+---+-------+--------+
|   |                                |   | C |        |   |   |       |        |
|   |                                |   | o |        |   |   |       |        |
|   |                                |   | n |        |   |   |       |        |
|   |                                |   | s |        |   |   |       |        |
|   |                                |   | o |        |   |   |       |        |
|   |                                |   | l |        |   |   |       |        |
|   |                                |   | i |        |   |   |       |        |
|   |                                |   | d |        |   |   |       |        |
|   |                                |   | a |        |   |   |       |        |
|   |                                |   | t |        |   |   |       |        |
|   |                                |   | e |        |   |   |       |        |
|   |                                |   | d |        |   |   |       |        |
|   |                                |   | F |        |   |   |       |        |
|   |                                |   | i |        |   |   |       |        |
|   |                                |   | n |        |   |   |       |        |
|   |                                |   | a |        |   |   |       |        |
|   |                                |   | n |        |   |   |       |        |
|   |                                |   | c |        |   |   |       |        |
|   |                                |   | i |        |   |   |       |        |
|   |                                |   | a |        |   |   |       |        |
|   |                                |   | l |        |   |   |       |        |
|   |                                |   | S |        |   |   |       |        |
|   |                                |   | t |        |   |   |       |        |
|   |                                |   | a |        |   |   |       |        |
|   |                                |   | t |        |   |   |       |        |
|   |                                |   | e |        |   |   |       |        |
|   |                                |   | m |        |   |   |       |        |
|   |                                |   | e |        |   |   |       |        |
|   |                                |   | n |        |   |   |       |        |
|   |                                |   | t |        |   |   |       |        |
+---+--------------------------------+---+---+--------+---+---+-------+--------+
|   |                                |   | 3 |        |   |   | 31    |        |
|   |                                |   | 1 |        |   |   | Dec   |        |
|   |                                |   | D |        |   |   | ember |        |
|   |                                |   | e |        |   |   | 2011  |        |
|   |                                |   | c |        |   |   |       |        |
|   |                                |   | e |        |   |   |       |        |
|   |                                |   | m |        |   |   |       |        |
|   |                                |   | b |        |   |   |       |        |
|   |                                |   | e |        |   |   |       |        |
|   |                                |   | r |        |   |   |       |        |
|   |                                |   | 2 |        |   |   |       |        |
|   |                                |   | 0 |        |   |   |       |        |
|   |                                |   | 1 |        |   |   |       |        |
|   |                                |   | 2 |        |   |   |       |        |
+---+--------------------------------+---+---+--------+---+---+-------+--------+
|   |                                |   | ( |        |   |   |       |        |
|   |                                |   | B |        |   |   |       |        |
|   |                                |   | a |        |   |   |       |        |
|   |                                |   | h |        |   |   |       |        |
|   |                                |   | t |        |   |   |       |        |
|   |                                |   | i |        |   |   |       |        |
|   |                                |   | n |        |   |   |       |        |
|   |                                |   | M |        |   |   |       |        |
|   |                                |   | i |        |   |   |       |        |
|   |                                |   | l |        |   |   |       |        |
|   |                                |   | l |        |   |   |       |        |
|   |                                |   | i |        |   |   |       |        |
|   |                                |   | o |        |   |   |       |        |
|   |                                |   | n |        |   |   |       |        |
|   |                                |   | s |        |   |   |       |        |
|   |                                |   | ) |        |   |   |       |        |
+---+--------------------------------+---+---+--------+---+---+-------+--------+
|   | Current                        |   |   |        |   |   |       |        |
+---+--------------------------------+---+---+--------+---+---+-------+--------+
|   | Bank overdrafts and Short-term |   |   |        |   |   |       |        |
|   | loans                          |   |   |        |   |   |       |        |
+---+--------------------------------+---+---+--------+---+---+-------+--------+
|   |   from financial institutions  |   |   | 13     |   |   |       | 13     |
|   |                                |   |   | ,373.0 |   |   |       | ,676.9 |
+---+--------------------------------+---+---+--------+---+---+-------+--------+
|   | Net current portion of         |   |   | 5      |   |   |       | 6      |
|   | long-term loans                |   |   | ,609.7 |   |   |       | ,440.1 |
+---+--------------------------------+---+---+--------+---+---+-------+--------+
|   | Current portion of finance     |   |   | 41.1   |   |   |       | 18.4   |
|   | lease liabilities              |   |   |        |   |   |       |        |
+---+--------------------------------+---+---+--------+---+---+-------+--------+
|   |                                |   |   | 19     |   |   |       | 20     |
|   |                                |   |   | ,023.8 |   |   |       | ,135.4 |
+---+--------------------------------+---+---+--------+---+---+-------+--------+
|   | Non-current                    |   |   |        |   |   |       |        |
+---+--------------------------------+---+---+--------+---+---+-------+--------+
|   | Long-term loans from financial |   |   | 39     |   |   |       | 33     |
|   | institutions                   |   |   | ,987.7 |   |   |       | ,702.0 |
+---+--------------------------------+---+---+--------+---+---+-------+--------+
|   | Finance lease liabilities      |   |   | 3.3    |   |   |       | 40.1   |
+---+--------------------------------+---+---+--------+---+---+-------+--------+
|   | Debentures                     |   |   | 21     |   |   |       | 7      |
|   |                                |   |   | ,623.8 |   |   |       | ,468.7 |
+---+--------------------------------+---+---+--------+---+---+-------+--------+
|   |                                |   |   | 61     |   |   |       | 41     |
|   |                                |   |   | ,614.8 |   |   |       | ,210.8 |
+---+--------------------------------+---+---+--------+---+---+-------+--------+
|   | Total                          |   |   | 80     |   |   |       | 61     |
|   |                                |   |   | ,638.6 |   |   |       | ,346.2 |
+---+--------------------------------+---+---+--------+---+---+-------+--------+

IVL net operating debt to equity remain at 1.2 times in, which is higher
than 0.6 times at the end of year 2011, primarily because of the capex
and investments of US$ 1,387 million in year 2012. IVL net operating
debt increased from US$ 1,166 million at end of December 31, 2011 to US$
2,321 million at the end of December 31, 2012.

The table below provides movement of total debt and net operating debt
in US$ millions:

  ---------------------------------------- --------------- ---------------
  Details                                  2012            2011

  Bank overdraft and short-term loans      437             432

  % of Total Debt                          17%             22%

  Long term debt (Current-portion)         184             204

  % of Total Debt                          7%              11%

  Long term debt (Non current-portion)     1,306           1,065

  % of Total Debt                          50%             55%

  Debentures (Non current-portion)         706             236

  % of Total Debt                          27%             12%

  Total Debt                               2,633           1,936

  Cash & Cash under management             150             559

  Cash and cash equivalents                143             379

  Current investments                      7               180

  Unutilized credit line                   713             836

  Liquidity                                863             1,395

  Net Debt                                 2,482           1,377

  Non Operating Debt (Project Debt)        161             211

  Net Operating Debt                       2,321           1,166

  Financial Ratios                                         

  Net operating debt to equity (times)     1.2             0.6

  Net debt to equity (times)               1.3             0.7
  ---------------------------------------- --------------- ---------------

The table below provides repayment schedule of long-term debt and
debentures in US$ million;

  ---------------------------------------- --------------- ---------------
  Year                                     % of repayment  Total Repayment

  2013                                     8%              184

  2014                                     11%             246

  2015                                     15%             334

  2016                                     20%             440

  2017                                     16%             344

  2018 or later                            29%             648

  Total                                    100%            2,196
  ---------------------------------------- --------------- ---------------

Issuance and offering of Thai Baht Debentures

The extraordinary general meeting of shareholders held on 22 September
2011 approved the issue of debentures up to an amount not exceeding Baht
25,000 million (in Baht or equivalent foreign currency) for a maturity
not exceeding 15 years. On 19 October 2011, the Company raised Baht
7,500 million in cash through the issue of unsubordinated and unsecured
Baht debentures to the public. The debentures issued are for Baht 2,900
million with a maturity of 5 years, Baht 1,400 million with a maturity
of 7 years, and Baht 3,200 million with a maturity of 10 years. The
details of issue are;

5 Year Tranche Baht 2,900 million Coupon 4.70%

7 Year Tranche Baht 1,400 million Coupon 5.04%

10 year tranche Baht 3,200 million Coupon 5.35%

On 9 April 2012, IVL successfully completed the second issuance of
debenture. The Company raised in cash Baht 9,400 million through the
debenture for Baht 4,000 million with a maturity of 5 years, Baht 1,500
million with a maturity of 7 years, and Baht 3,900 million with a
maturity of 10 years. The details of issue are;

5 Year Tranche Baht 1,500 million Coupon 4.45% in Year 1-2 and 5.20% in
Year 4-5

5 Year Tranche Baht 2,500 million Coupon 4.73%

7 Year Tranche Baht 1,500 million Coupon 5.09%

10 year tranche Baht 1,250 million Coupon 5.10% in Year 1-3, 5.60% in
Year 4-7,

6.0% in Year 8-10 10 year tranche Baht 2,650 million Coupon 5.52%

On 14 December 2012, IVL successfully completed the third issuance of
debenture. The Company raised in cash Baht 4,780 million through the
debenture for Bath 780 million with a maturity of 6 years, Baht 880
million with a maturity of 8 years, and Baht 1,645 million with a
maturity of 10 years, Baht 1,475 million with a maturity of 12 years The
details of issue are;

6 Year Tranche Baht 780 million Coupon 4.52%

8 Year Tranche Baht 880 million Coupon 4.78%

10 Year Tranche Baht 1,645 million Coupon 5.11%

12 year tranche Baht 1,475 million Coupon 5.28%

The issue has achieved its objectives of accessing the Thai bond market,
increasing the average maturity of debt, locking-in fixed interest rates
for the long term, refinancing existing high cost debt and adding
liquidity for planned capex and investments. The company’s rating on the
issue has a rating of A+ by the Thai Rating Information Service (TRIS)
in Thailand and reaffirmed again in 4Q12.

The terms and condition of the Debenture issuance, mention that Net Debt
to Equity Ratio should not exceed 2:1 and as on 31st Dec’2012 our Net
Debt to Equity Ratio is 1.3 times.

Shareholder's equity

As of December 31, 2012 and 2011, IVL had shareholder's equity of Baht
59,885.0 million and Baht 58,765.8 million, respectively. The increase
in shareholder's equity was mainly due to retained earnings increased
from continued profitability of the company net of dividends paid.
Please refer “Statement of Changes of Equity” of our Financial
Statements for more details on this item.

Cash Flow

IVL generated Baht 15,454.0 million of cash flow from operating
activities in 2012 comparing with Baht 9,395.0 million generated in
2011. This reflects IVL’s strong cash flow generation despite weaker
margins in 2012. This has come from improved management and close
monitoring of cash flows.

Cash flows used in investing activities of Baht 36,362.8 million in 2012
were primarily towards acquisition of Old World Industry, US$ 182
million towards acquisition of FiberVisions, and the balance was spent
mainly towards Rotterdam PET expansion, China PET expansion, the
conversion of DMT to PTA in Auriga US, and other ongoing brownfield and
greenfield expansions. The capex and investments have been funded by the
mix of long term loans, cash proceeds from debentures issue and cash
flow from operations.

Cash flows provided by financing activities of Baht 13,273.9 million in
2012 were principally a result of cash proceeds from issuance Thai Baht
debentures, and short and long term loans-net of repayment. These
funding are used to support business expansions as mentioned above.

Key Financial ratios

Current Ratio

Our current ratio is calculated by dividing total current assets by
total current liabilities. The current ratio has decreased slightly from
1.6 times to 1.3 times at the end of 2012. This is primarily due to
higher cash & cash under management in year 2011, which was subsequently
used in 2012 on various acquisitions.

Return on Equity Ratio (ROE)

Our ROE ratio is calculated by dividing our profit attributable to owner
of the company for the period by average total equity attributable to
equity holders of the Company. IVL achieved a return on equity of 8.9%
and 34.4% in 2012 and 2011, respectively. The ROE decreased dramatically
due to significant drop in margins across various segments of our
business, specially in Asia. Please refer Margin Analaysis in Overview
Section of this MD&A.

Return on Asset Ratio (ROA)

Our ROA ratio is calculated by dividing profit for the period by the
average total assets. For the year ended 2012 and 2011, our ROA ratio
was 3.0% and 13.8%, respectively. The ROA decreased substantially due to
significant drop in margins across various segments of our business,
specially in Asia. Please refer Margin Analaysis in Overview Section of
this MD&A.

Debt to Equity Ratio (D/E)

Our D/E ratio is calculated by dividing total liabilities by total
shareholder’s equity. As of December 31, 2012 and 2011, our D/E ratio
was 1.8 times and 1.5 times respectively. Our Net Interest Bearing Debt
to Equity Ratio is calculated by dividing our interest-bearing
liabilities-net of cash and cash equivalent by total shareholder’s
equity. As of December 31, 2012 and 2011, our net interest bearing debt
to equity was 1.3 times and 0.7 times, respectively. The net interest
bearing debt to equity increased sharply due to the issurance of Thai
Baht debentures in April and December 2012 and additional long-term
loans from financial institutions, which was used in various
acquisitions and ongoing Greenfield/brownfield expansions.

Auditor Fee

Audit Fee

IVL paid audit fee to IVL and subsidiaries’ auditors for consolidated
and separate financial statements of approximately Baht 100 million and
Baht 75 million in 2012 and 2011, respectively.

Non-Audit Fee

IVL paid total non-audit fees of approximately Baht 11 million and Baht
40 million in 2012 and 2011 respectively. This amount related to tax
advice, due diligence in relation to the acquisition and other advisory
services.