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, 2009, 2010 and
2011. 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.

Financial Statements

The consolidated and separate financial statements for the years ended
December 31, 2009 to 2011 audited by Mr. Vichien Thamtrakul, Certified
Public Accountant, with registration No. 3183 and 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 2010 and 2009

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 2010 and 2009, 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 generally accepted accounting principles.

The auditor did not audit the financial statements of two subsidiaries
included in the consolidation for the year ended 31 December 2009 which
had total assets as at 31 December 2009 constituting 26 percent and
total revenues for the year then ended constituting 22 percent, of the
related consolidated totals. The carrying value of these investments in
the separate balance sheet as at 31 December 2009 amounted to Baht
3,752.2 million. I did not audit the financial statements of one
jointly-controlled entity and its subsidiary established in 2010 for the
year ended 31 December 2010. The carrying value of this investment in
the consolidated balance sheet as at 31 December 2010 amounted to Baht
2,012.6 million and share of profit of jointly-controlled entity
recorded in the consolidated statement of income was Baht 1,888.2
million. The financial statements of these subsidiaries, the jointly
controlled entity and its subsidiary were audited by other auditors
whose reports have been furnished to me and my report, insofar as it
relates to the amounts included for these subsidiaries,
jointly-controlled entity and its subsidiary is based solely on the
reports of the other auditors.

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 generally accepted accounting principles.

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 2009 to 2011

Statements of Financial Position (Consolidated Financial Statements)

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

  Unit: Baht million          2009       %        2010       %        2011        %
                                                  Restated                        

                                                                                   

  Assets                                                                           

  Current assets                                                                   

  Cash and cash equivalent    1,396.8    1.88     1,482.6    1.90     12,018.0    8.24

  Current investments         1,162.9    1.57     541.7      0.70     5,688.5     3.90

  Trade account receivable    9,962.8    13.41    11,770.7   15.10    24,508.8    16.81

  Inventories                 9,674.0    13.03    11,384.3   14.61    21,422.3    14.69

  Other current assets        1,369.5    1.84     964.9      1.24     4,132.8     2.83

  Total current assets        23,566.0   31.73    26,144.2   33.54    67,770.4    46.47

  Non-current assets                                                               

  Investment in               -          -        2,012.6    2.58     5,427.5     3.72
  jointly-controlled entity                                                       

  Other long-term investments 32.7       0.04     20.3       0.03     -           -

  Property, plant and         49,505.3   66.67    48,820.2   62.64    66,825.4    45.83
  equipment                                                                       

  Goodwill                    -          -        -          -        395.4       0.27

  Intangible assets           878.9      1.19     760.2      0.98     4,305.5     2.95

  Other non-current assets    277.2      0.37     183.1      0.23     1,101.9     0.76

  Total non-current assets    50,694.1   68.27    51,796.3   66.46    78,055.7    53.53

  Total assets                74,260.1   100.00   77,940.6   100.00   145,826.1   100.00
  --------------------------- ---------- -------- ---------- -------- ----------- --------

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

  Unit: Baht million           2009       %                  2010       %                      2011    %
                                                             Restated                                  

  Liabilities and equity                                                                                

  Current liabilities                                                                                   

  Bank overdrafts and                                                                                   
  short-term loans                                                                                     

  from financial institutions  10,004.4   13.47   5,364.9                   6.88    13,676.9           9.38

  Trade account payable        9,004.0    12.13   10,858.3                  13.93   17,978.1           12.33

                                                                                                       

  Current portion of long-term                                                                          
  loans from                                                                                           

  financial institutions       4,643.4    6.25    5,912.5                   7.59    6,440.1            4.42

                                                                                                       

  Current portion of long-term                                                                          
  loans from                                                                                           

  related parties              24.5       0.03    -                         -       -                  -

  Current portion of finance   24.5       0.03    22.1                      0.03    18.4               0.01
  lease liabilities                                                                                    

  Income tax payable           313.6      0.42    267.6                     0.34    874.0              0.60

  Other current liabilities    1,770.9    2.39    1,612.4                   2.07    4,213.9            2.89

  Total current liabilities    25,785.3   34.72   24,037.8                  30.84   43,201.3           29.63

  Non-current liabilities                                                                               

  Long-term loans from         25,330.4   34.12   20,710.5                  26.57   33,702.0           23.11
  financial institutions                                                                               

  Debentures                   -          -       -                         -       7,468.7            5.12

  Finance lease liabilities    73.4       0.10    58.4                      0.07    40.1               0.03

  Employee benefit obligations -          -       107.1                     0.14    772.7              0.53

  Other non-current            605.2      0.81    785.0                     1.01    1,864.5            1.28
  liabilities                                                                                          

  Total non-current            26,009.0   35.03   21,661.0                  27.79   43,847.9           30.07
  liabilities                                                                                          

  Total liabilities            51,794.3   69.75   45,698.9                  58.63   87,049.2           59.69
  ---------------------------- ---------- ------- ---------- ---------- --- ------- ---------- ------- -------

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

  Unit: Baht million          2009        %        2010        %        2011        %
                                                   Restated                         

  Equity                                                                             

  Share capital                                                                      

  Authorised share capital    5,082.0     6.84     4,815.9     6.18     4,815.9     3.30

  Issued and paid-up share    3,351.5     4.51     4,334.3     5.56     4,814.3     3.30
  capital                                                                           

  Additional paid-in capital                                                         

  Share premium               4,443.2     5.99     13,030.8    16.72    29,774.6    20.42

  Currency translation        (324.3)     (0.44)   (2,068.4)   (2.65)   (2,196.0)   (1.51)
  differences                                                                       

  Revaluation surplus         864.5       1.17     2,255.0     2.89     1,761.4     1.21

                                                                                    

  Excess of cost over book    173.7       0.23     (3,307.0)   (4.24)   (2,949.8)   (2.02)
  value of acquired                                                                 
  subsidiaries                                                                      

                                                                                    

  Difference arising from     (1,580.7)   (2.13)   (1,580.7)   (2.03)   (1,580.7)   (1.08)
  common control transactions                                                       

                                                                                    

  Defined benefit plan        -           -        -           -        (101.4)     (0.07)
  actuarial losses, net                                                             

                                                                                    

  Fair value changes on cash  (132.8)     (0.18)   (109.0)     (0.14)   (105.9)     (0.07)
  flow hedges                                                                       

                                                                                    

  Retained earnings                                                                  

  Appropriated                                                                       

  Legal reserve               290.6       0.39     604.2       0.78     1,326.2     0.91

  Unappropriated              10,093.2    13.59    18,749.5    24.06    27,895.1    19.13

  Total equity attributable                                                          
  to equity                                                                         

  holders of the Company      17,179.0    23.13    31,908.6    40.94    58,637.7    40.21

  Non-controlling interests   5,286.8     7.12     333.1       0.43     139.1       0.10

  Total equity                22,465.8    30.25    32,241.7    41.37    58,776.9    40.31

  Total liabilities and       74,260.1    100.00   77,940.6    100.00   145,826.1   100.00
  equity                                                                            
  --------------------------- ----------- -------- ----------- -------- ----------- --------

Statements of Income (Consolidated Financial Statements)

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

  Unit: Baht million         2009       %        2010       %        2011        %
                                                 Restated                        

                                                                                  

  Income                                                                          

  Revenue from sale of goods 79,994.2   100.00   96,858.2   100.00   186,095.9   100.00

  Interest income            18.4       0.02     7.1        0.01     487.4       0.26

  Net foreign exchange gain  567.7      0.71     1,178.4    1.22     306.4       0.16

  Gain on a bargain purchase -          -        562.8      0.58     6,752.6     3.63

  Other income               305.3      0.38     157.0      0.16     812.0       0.44

  Total revenue              80,885.6   101.11   98,763.5   101.97   194,454.2   104.49

                                                                                  

  Expenses                                                                        

  Cost of sale of goods      67,665.9   84.59    82,066.4   84.73    165,754.2   89.07

  Selling and administrative 4,921.6    6.16     5,710.5    5.90     9,701.5     5.21
  expenses                                                                       

  Management benefit         123.9      0.15     110.8      0.11     127.0       0.07
  expenses                                                                       

  Impairment losses due to   -          -        -          -        1,644.7     0.88
  flood                                                                          

  Total expenses             72,711.4   90.90    87,887.8   90.74    177,227.4   95.23

                                                                                  

  Share of profit (loss) of  -          -        1,888.2    1.95     1,314.5     0.71
  jointly-controlled entity,                                                     
  net                                                                            

  Profit before finance                                                           
  costs and                                                                      

  income tax expenses        8,174.2    10.22    12,763.9   13.18    18,541.3    9.96

  Finance costs              1,601.5    2.00     1,303.1    1.35     2,370.1     1.27

  Income tax expenses        554.0      0.70     487.9      0.50     742.2       0.40

  Profit for the year        6,018.7    7.52     10,973.0   11.33    15,429.0    8.29

  Profit attributable to:                                                        

  Owners of the Company      4,824.1    6.03     10,413.4   10.75    15,568.0    8.37 

  Non-controlling interests  1,194.6    1.49     559.6      0.58     (138.9)     (0.07) 

  Profit for the year        6,018.7    7.52     10,973.0   11.33    15,429.0    8.29 

                                                                                  

  Earnings per share – basic 1.44                2.46                3.29         
  -------------------------- ---------- -------- ---------- -------- ----------- ---------

Cash Flow Statement (Consolidated Financial Statements)

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

  Unit: Baht million                           2009        2010         2011
                                                           Restated     

                                                                         

  Cash flows from operation activities                                   

  Profit for the year                          6,018.7     10,973.0     15,429.0

  Adjustment for                                                         

  Gain on bargain purchases                    -           (562.8)      (6,752.6)

  Provision (reversal) for bad and doubtful    (28.5)      (0.3)        (32.2)
  debts expense, net                                                    

  Interest income                              (18.4)      (7.1)        (487.4)

  Depreciation and amortisation                3,081.9     3,471.5      4,776.5

  Finance costs                                1,601.5     1,303.1      2,370.1

  Unrealized foreign exchange (gain) loss      (470.1)     (800.9)      (213.2)

  Provision (reversal) for inventory           (87.8)      (6.7)        53.3
  obsolescence, net                                                     

  Loss (gain) on disposal of property, plant   (1.0)       (8.4)        (7.1)
  and equipment, net                                                    

  Income tax expenses                          554.0       487.8        742.2

  Employee benefits expense                     -          53.0         128.2

  Impairment for inventory and machinery and    -          -            1,674.7
  equipment due to flood                                                

  Share of (profit) loss of jointly-controlled -           (1,888.2)    (1,314.5)
  entities,net                                                          

                                               10,650.3    13,014.0     16,367.2

  Change in operating assets and liabilities                             

  Trade accounts receivable                    (1,080.1)   (2,786.6)    (1,487.1)

  Inventories                                  (2,202.9)   (2,414.8)    (5,116.8)

  Short-term loans to related parties          (236.7)     -            -

  Other current assets                         319.8       1.3          4,074.4

  Other non-current assets                     86.1        19.2         (1,049.1)

  Trade accounts payable                       1,886.5     2,786.1      (297.0)

  Other current liabilities                    (139.3)     215.8        (4,476.3)

  Other non-current liabilities                (33.9)      16.9         869.5

  Employee benefits paid                        -           -           (3.2)

  Income taxes paid                            (263.6)     (468.9)      (192.4)

  Net cash provided by (used in) operating     8,986.2     10,383.1     8,689.2
  activities                                                            

                                                                         

  Cash flows from investing activities                                   

  Interest received                            31.5        5.9          416.2

  (Purchase) sale of other investments, net    (967.5)     618.5        (5,119.7)

  Other long-term investments                  67.4        -            -

  Purchase of property, plant and equipment    (3,784.5)   (2,418.4)    (6,171.3)

  Proceeds from sales of property, plant and   2.7         12.4         48.9
  equipment                                                             

  Purchase of intangible assets                (2.8)       (6.4)        (5.9)

  Net cash outflow on acquisition of business  -           (1,048.9)    (23,095.6)

  Net cash outflow on additional investment in (165.1)     (3,075.1)    (2,220.1)
  subsidiaries and jointly-controlled entities                          

  Net cash inflow on disposal of investment in -           -            9.0
  a subsidiary                                                          

  Net cash provided by (used in) investing     (4,818.3)   (5,912.0)    (36,138.5)
  activities                                                            

                                                                        

                                                                        

                                                                         

                                               Year Ended               
                                               December                 
                                               31,                      

  Unit: Baht million                           2009        2010         2011
                                                           Restated     

                                                                        

  Cash flow from financing activities                                    

  Interest paid                                (1,915.6)   (1,338.7)    (2,152.5)

  Deferred financing cost paid                  -           -           (131.3)

  Dividends paid                               (181.9)     (1,488.8)    (5,629.9)

  Proceeds from short and long-term borrowings 3,870.6     4,887.5      34,602.3

  Repayment of short and long-term borrowings  (5,618.7)   (10,058.2)   (13,400.2)

  Repayment of finance leases                  (72.3)      (26.1)       (22.1)

  Proceeds from issue of shares                -           3,824.5      17,223.8

  Proceeds from issue of debenture              -           -           7,467.7

  Net cash provided by (used in) financing     (3,917.9)   (4,199.8)    37,957.9
  activities                                                            

                                                                         

  Net increases (decreases) in cash and cash   250.0       271.3        10,508.5
  equivalents                                                           

  Cash and cash equivalent at beginning of     1,179.2     1,396.8      1,482.6
  year                                                                  

  Effect of exchange rate changes on balances                            
  held                                                                  

  in foreign currencies                        (32.4)      (185.5)      26.9

  Cash and cash equivalents at end of year     1,396.8     1,482.6      12,018.0
  -------------------------------------------- ----------- ------------ ------------

Key Financial Ratio

  ------------------------------------------------------------------------
                                         Year Ended            
                                         December              
                                         31,                   
  ----------------------------- -------- ---------- ---------- -----------
                                         2009       2010       2011
                                                    Restated   

  Liquidity Ratio                                              

  Current Ratio                 Times    0.91       1.09       1.57

  Quick Ratio                   Times    0.49       0.57       0.98

  Account Receivable Turnover   Times    8.6        8.9        10.2

  Day Sales Outstanding         Days     41.8       40.5       35.3

  Inventory Turnover            Times    7.8        7.8        9.9

  Inventory Days                Days     46.2       46.3       36.5

  Account Payable Turnover      Times    8.5        8.3        11.5

  Account Payable Days          Days     42.2       43.6       31.3

  Cash Cycle                    Days     45.7       43.2       40.5

  Profitability Ratio                                          

  Gross Margin                  %        15.41      15.27      10.93

  Operating Margin              %        9.26       9.38       5.72

  Net Profit Margin             %        7.52       11.11      7.93

  Return on Equity              %        32.19      42.43      34.39

  Efficiency Ratio                                             

  Return on Assets              %        8.36       14.42      13.79

  Return on Fixed Assets        %        18.36      29.38      34.94

  Total Assets Turnover         Times    1.12       1.30       1.74

  Financial Policy Ratio                                       

  Total Liabilities to Equity   Times    2.31       1.42       1.48
  ratio                                                        

  Interest-bearing Debt to      Times    1.78       0.99       1.04
  Equity                                                       

  Net Interest-bearing Debt to  Times    1.67       0.93       0.74
  Equity                                                       

  Interest Coverage Ratio       Times    6.64       7.97       3.67

                                                               
  ------------------------------------------------------------------------

Management’s Discussion and Analysis (MD&A)

Revenue from sale of goods

+-------------------------------+------------+-----------+-----------+
|                               |            |           |           |
+-------------------------------+------------+-----------+-----------+
| Baht in Millions              | FY 2011    | FY 2010   | Change    |
|                               |            |           | (%)       |
|                               |            | (         |           |
|                               |            | Restated) |           |
+-------------------------------+------------+-----------+-----------+
|                               |            |           |           |
+-------------------------------+------------+-----------+-----------+
| Revenue from sale of goods    | 186,095.9  | 96,858.2  | 92.1%     |
+-------------------------------+------------+-----------+-----------+
| Add: Eliminations             | 31,455.1   | 24,239.8  |           |
+-------------------------------+------------+-----------+-----------+
| Adjusted revenue from sale of | 217,551.0  | 121,098.0 | 79.6%     |
| goods                         |            |           |           |
+-------------------------------+------------+-----------+-----------+
| PET                           | 129,671.0  | 55,869.8  | 132.1%    |
+-------------------------------+------------+-----------+-----------+
| Polyester & Wool              | 25,184.4   | 17,237.0  | 46.1%     |
+-------------------------------+------------+-----------+-----------+
| PTA                           | 62,695.6   | 47,991.2  | 30.6%     |
+-------------------------------+------------+-----------+-----------+

Sales revenue for the year ended 2011 was Baht 186,095.9 million,
increased by Baht 89,237.7 million or 92.1% from 2010. Sales revenue
increased in all business segments mainly from both the volume growth
from acquisitions and the product price increase driven by an increasing
demand in Polyester products.

PET Revenue

PET revenue for the year ended 2011 was Baht 129,671.0 million,
increased by Baht 73,801.2 million or 132.1% from 2010, driven by both
the volume growth and the product price increase. The sales volume
growth of 73% from last year was resulted from starting operation of
both production lines of Alphapet, USA in June 2010 and acquisitions
completed in 1Q 2011 in China, Indonesia, Mexico, Poland, and USA.
Despite 2 months shutdown of AlphaPet due to the power outage as a
result of tornados in Alabama in 2Q 2011, the plant has restarted at end
of 2Q 2011 and operated at high utilization in 3Q 2011. Moreover, there
was impact by phase of de-stocking of inventories on falling product
prices in 4Q 2011 and shut down plant in Lopburi, Thailand for the full
4Q 2011 due to floods.

Polyester & Wool Revenue

Polyester and wool revenue for the year ended 2011 was Baht 25,184.4
million, increased by Baht 7,947.4 million or 46.1% from 2010, driven by
both the volume growth from acquisitions completed in 1Q 2011 in
Indonesia and USA and the product price increase. Sales volume grew by
45% from last year. Higher production volume and improvement in margins
were led by product mix shift towards higher value-addition fibers and
yarns. This was despite the production loss from breakdown in one line
of the process plant of Indorama Polyester Industries (IPI) Rayong
facility in 2Q 2011, a shutdown of wool plant in Lopburi, Thailand for
the full 4Q 2011 due to floods, and a 3 week preventive shutdown of
Nakornpathom facility from flooding.

PTA revenue

PTA revenue for the year ended 2011 was Baht 62,695.6 million, increased
by Baht 14,704.4 million or 30.6% from 2010, driven by product price
increase especially in the first half of 2011 which price of Asian PTA
was so high because of extreme volatility crude and shortage of cotton
driving substitution demand for Polyester-PTA and demand-supply
disruptions caused by earthquake in Japan. While, the second half saw
lower margins in Asian PTA impacted by new supply for PTA and phase of
de-stocking of inventories on falling product prices. Nevertheless, the
captive consumption of 49% of production volume in PTA business allows
IVL to maintain high utilization rate.

Cost of Sale of goods

+-------------------------------+------------+-----------+-----------+
|                               |            |           |           |
+-------------------------------+------------+-----------+-----------+
| Baht in Millions              | FY 2011    | FY 2010   | Change    |
|                               |            |           | (%)       |
|                               |            | (         |           |
|                               |            | Restated) |           |
+-------------------------------+------------+-----------+-----------+
|                               |            |           |           |
+-------------------------------+------------+-----------+-----------+
| Cost of sale of goods         | 161,272.4  | 78,872.9  | 104.5%    |
+-------------------------------+------------+-----------+-----------+
| As a percentage of total      | 86.7%      | 81.4%     |           |
| revenues from the sale of     |            |           |           |
| goods                         |            |           |           |
+-------------------------------+------------+-----------+-----------+
| Add: Eliminations             | 31,455.1   | 24,205.7  |           |
+-------------------------------+------------+-----------+-----------+
| Adjusted cost of sales of     | 192,727.5  | 103,078.6 | 87.0%     |
| goods                         |            |           |           |
+-------------------------------+------------+-----------+-----------+
| PET                           | 115,597.7  | 48,421.6  | 138.7%    |
+-------------------------------+------------+-----------+-----------+
| As a percentage of total PET  | 89.1%      | 86.7%     |           |
| revenue                       |            |           |           |
+-------------------------------+------------+-----------+-----------+
| Polyester & Wool              | 21,989.4   | 15,108.0  | 45.5%     |
+-------------------------------+------------+-----------+-----------+
| As a percentage of total      | 87.3%      | 87.6%     |           |
| Polyester & Wool revenue      |            |           |           |
+-------------------------------+------------+-----------+-----------+
| PTA                           | 55,140.4   | 39,549.0  | 39.4%     |
+-------------------------------+------------+-----------+-----------+
|   As a percentage of total    | 87.9%      | 82.4%     |           |
|   PTA revenue                 |            |           |           |
+-------------------------------+------------+-----------+-----------+

Cost of sales for the year ended 2011 is Baht 161,272.4 million,
increased by Baht 82,399.5 million or 104.5% from 2010 which is in line
with increase in sales revenue.

PET Cost of Sale of Goods

For the year ended 2011, PET cost of sale of goods was Baht 115,597.7
million, increased by Baht 67,176.1 million or 138.7% from 2010, driven
by both the volume growth and the product price increase. The volume
growth resulted from starting operation for both lines of Alphapet, USA
and acquisitions completed in 1Q 2011 in China, Indonesia, Mexico,
Poland, and USA.

Polyester & Wool Cost of Sale of Goods

For the year ended 2011, Polyester & Wool cost of sale of goods were
Baht 21,989.4 million, increased by Baht 6,881.4 million or 45.5% from
2010, driven by both the raw material price increase and the volume
growth.

PTA Cost of Sale of Goods

For the year ended 2011, PTA cost of sales of goods was Baht 55,140.4
million, increased by Baht 15,591.4 or 39.4% from 2010, driven by the
raw material price increase.

Gross Profit

+---------------------------------+-----------+-----------+-----------+
|                                 |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| Baht in Millions                | FY 2011   | FY 2010   | Change    |
|                                 |           |           | (%)       |
|                                 |           | (         |           |
|                                 |           | Restated) |           |
+---------------------------------+-----------+-----------+-----------+
|                                 |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| Gross Profit*                   | 24,823.5  | 17,985.3  | 38.0%     |
+---------------------------------+-----------+-----------+-----------+
| As a percentage of total        | 13.3%     | 18.6%     |           |
| revenues from the sale of goods |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| Add: Eliminations               | -         | 34.1      |           |
+---------------------------------+-----------+-----------+-----------+
| Adjusted gross profit           | 24,823.5  | 18,019.4  | 37.8%     |
+---------------------------------+-----------+-----------+-----------+
| PET                             | 14,073.3  | 7,448.2   | 88.9%     |
+---------------------------------+-----------+-----------+-----------+
| As a percentage of total PET    | 10.9%     | 13.3%     |           |
| revenue                         |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| Polyester & Wool                | 3,195.0   | 2,129.0   | 50.1%     |
+---------------------------------+-----------+-----------+-----------+
| As a percentage of total        | 12.7%     | 12.4%     |           |
| polyester & wool revenue        |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| PTA                             | 7,555.2   | 8,442.2   | (10.5%)   |
+---------------------------------+-----------+-----------+-----------+
| As a percentage of total PTA    | 12.1%     | 17.6%     |           |
| revenue                         |           |           |           |
+---------------------------------+-----------+-----------+-----------+

* Gross profit of each segment is on a standalone basis. No PTA profit
allocation to PET and Polyester segment on proportion of intra-group
sales.

Gross Profit for the year ended 2011 was Baht 24,823.5 million,
increased by Baht 6,838.2 million or 38.0% from 2010. Our gross profit
margin in 2011 was 13.3%, decreasing from the prior year primarily due
to higher selling price in all products which caused gross profit in
proportion to sales lower comparing year on year. Reducing gross profit
margin was also resulted from lower PTA gross profit margin and recently
completed acquisitions and started operations in the 2011 which led to
higher production cost in the initial state.

PET Gross Profit

For the year ended 2011, PET gross profit was Baht 14,073.3 million,
increased by Baht 6,625.1 million from 2010. PET gross profit margin in
2011 was 10.9%, a slight decrease from prior year as new acquired plants
in 1Q 2011 are under de-bottlenecking projects taken-up. This led to
higher production cost in the initial state. Sharp increase in PET
selling price during the year also caused gross profit in proportion to
sales lower comparing with last year.

Polyester & Wool Gross Profit

For the year ended 2011, Polyester & Wool gross profit was Baht 3,195.0
million, increased by Baht 1,066.0 million from 2010. Gross profit
margin in 2011 was 12.7% which slightly increased from the prior year.

PTA Gross Profit

For the year ended 2011, PTA gross profit was Baht 7,555.2 million,
decreased by Baht 887 million from 2010. PTA gross profit margin in 2011
was 12.1%, a decrease from prior year mainly due to volatility in Asian
PTA margin led by extreme volatility crude and demand-supply
disruptions. The second half of the year was impacted by de-stocking of
inventories on falling product prices. The sharp increase in PTA selling
price in the first half of the year caused gross profit in proportion to
sales lower comparing with last year.

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

+---------------------------------+-----------+-----------+-----------+
|                                 |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| Baht in Millions                | FY 2011   | FY 2010   | Change    |
|                                 |           |           | (%)       |
|                                 |           | (         |           |
|                                 |           | Restated) |           |
+---------------------------------+-----------+-----------+-----------+
| EBITDA⁽¹⁾                       | 17,021.5  | 13,777.4  | 23.5%     |
+---------------------------------+-----------+-----------+-----------+
| As a percentage of total        | 9.1%      | 14.2%     |           |
| revenues from the sale of goods |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| Add: Eliminations and others⁽²⁾ | 223.2     | 27.4      |           |
+---------------------------------+-----------+-----------+-----------+
| Adjusted EBITDA                 | 17,244.7  | 13,804.8  | 24.9%     |
+---------------------------------+-----------+-----------+-----------+
| PET                             | 10,902.9  | 7,510.5   | 45.2%     |
+---------------------------------+-----------+-----------+-----------+
| As a percentage of total PET    | 8.4%      | 13.4%     |           |
| revenue                         |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| Polyester & Wool                | 3,248.7   | 2,218.4   | 46.4%     |
+---------------------------------+-----------+-----------+-----------+
| As a percentage of total        | 12.9%     | 12.9%     |           |
| polyester and wool revenue      |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| PTA ⁽³⁾                         | 3,093.1   | 4,075.9   | (24.1%)   |
+---------------------------------+-----------+-----------+-----------+
| As a percentage of total PTA    | 9.8%      | 16.2%     |           |
| revenue ⁽⁴⁾                     |           |           |           |
+---------------------------------+-----------+-----------+-----------+

(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) PTA EBITDA is after attributable to PET and Polyester segment
    calculated on proportion of intra-group sales.

(4) PTA EBITDA margin is calculated from PTA sales to third parties (net
    from intra-group sales)

EBITDA for the year ended 2011 was Baht 17,021.5 million, increased by
Baht 3,244.1 million or 23.5% from 2010. EBITDA margin was 9.1% in 2011,
a decreased from prior year due to completed acquisitions during the
year which had higher production cost in the initial state of operation.
EBITDA of 2011 included extraordinary items of Baht 613.4 million
towards transaction expenses incurred on acquisitions completed during
the year. IVL achieved a Reported EBITDA per ton of US$ 128 in 2011, a
decrease from US$ 136 in 2010. After excluding inventory gain/loss, a
movement in prices of raw materials and products from end of last
reported period to the end of current reported period, from reported
EBITDA, IVL achieved a Core EBITDA per ton of US$ 127 in year 2011 which
slightly increased from US$ 125 in year 2010.

PET EBITDA

PET EBITDA for the year ended 2011 was Baht 10,902.9 million, an
increase by Baht 3,392.4 million from 2010 primarily due to volume
growth from acquisition in 1Q 2011. EBITDA margin slightly decreased to
8.4% in 2011 as new acquired PET business are under de-bottlenecking
projects taken-up which led to higher production cost in the initial
state. In addition, PTA EBITDA allocated on intra-group sales to PET
decreased from both lower intra-group PTA consumption on higher PET
production, and lower PTA margin.

Polyester & Wool EBITDA

Polyester & Wool EBITDA for the year ended 2011 was Baht 3,248.7
million, an increase by Baht 1,030.3 million from 2010 driven by higher
production volume and improvement in margins from product mix shift
towards higher value-addition fibers and yarns. Polyester & Wool EBITDA
margin in 2011 was 12.9%, same as 2010.

PTA EBITDA

PTA EBITDA for the year ended 2011 was Baht 3,093.1 million, a decrease
by Baht 982.8 million from 2010 which was mainly driven by lower Asian
PTA spread. PTA EBITDA is after attributable to PET and Polyester
segment calculated on proportion of intra-group sales. In 2011 the PTA
captive consumption increased to 49.4% from 47.5% in 2010.

Other Revenues

+-------------------------------+------------+-----------+-----------+
|                               |            |           |           |
+-------------------------------+------------+-----------+-----------+
| Baht in Millions              | FY 2011    | FY 2010   | Change    |
|                               |            |           | (%)       |
|                               |            | (         |           |
|                               |            | Restated) |           |
+-------------------------------+------------+-----------+-----------+
|                               |            |           |           |
+-------------------------------+------------+-----------+-----------+
| Interest Income               | 487.4      | 7.1       | 6,764.8%  |
+-------------------------------+------------+-----------+-----------+
| Net foreign exchange gain     | 306.4      | 1,178.4   | (74.0%)   |
| (loss)                        |            |           |           |
+-------------------------------+------------+-----------+-----------+
| Gain on a bargain purchase    | 6,752.6    | 562.8     | 1,099.8%  |
+-------------------------------+------------+-----------+-----------+
| Other income                  | 812.0      | 157.0     | 417.2%    |
+-------------------------------+------------+-----------+-----------+
| Total                         | 8,358.4    | 1,905.3   | 338.7%    |
+-------------------------------+------------+-----------+-----------+

Interest Income

Interest Income for the year ended 2011 was Baht 487.4 million, an
increase by Baht 480.3 million or 6,764.8% from 2010 mainly from
interest income on short-term deposits at financial institutions arising
from proceeds from right issue of transferable subscription right (TSR)
in February 2011 and the issuance of Thai Baht debentures in October
2011.

Net foreign exchange gain (loss)

Net foreign exchange gain (loss) for the year ended 2011 was Baht 306.4
million, a decrease from 2010 by Baht 872.0 million or 74.0%. The
continuous depreciation of foreign currencies especially U.S. dollar
against Thai Baht currency led to lower unrealized exchange gain
calculated from translation of monetary assets and liabilities
denominated in foreign currencies to Thai Baht at the end of the period,
comparing with 2010.

Gains on bargain purchases

During the year 2011, 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 2011 and 2010, IVL had gains on bargain
purchases of Baht 6,752.6 million and Baht 562.8 million, respectively.
Details are as follows:

+----------------------+-------+---------+--------+----------+--------+
|                      | Net   |         |        | Total    | Gain   |
|                      | ident |         |        | Consi    | on a   |
|                      | ified |         |        | deration | b      |
|                      | a     |         |        |          | argain |
|                      | ssets |         |        |          | pu     |
|                      | acq   |         |        |          | rchase |
|                      | uired |         |        |          |        |
|                      |       |         |        |          |        |
|                      | and   |         |        |          |        |
|                      | l     |         |        |          |        |
|                      | iabil |         |        |          |        |
|                      | ities |         |        |          |        |
|                      | as    |         |        |          |        |
|                      | sumed |         |        |          |        |
+----------------------+-------+---------+--------+----------+--------+
| Baht in Millions     | Car   | Fair    | Reco   |          |        |
|                      | rying | value   | gnized |          |        |
|                      | am    | adju    | values |          |        |
|                      | ounts | stments |        |          |        |
+----------------------+-------+---------+--------+----------+--------+
| Companies acquired   |       |         |        |          |        |
| during the years     |       |         |        |          |        |
| ended                |       |         |        |          |        |
|                      |       |         |        |          |        |
| December 31, 2011    |       |         |        |          |        |
+----------------------+-------+---------+--------+----------+--------+
| Grupo Arteva         | 10,   | (665.0) | 9      | 7,701.1  | 1      |
| S.de.R.L.de C.V.     | 192.3 |         | ,527.3 |          | ,826.2 |
| ,Mexico              |       |         |        |          |        |
+----------------------+-------+---------+--------+----------+--------+
| Indorama Polymers    | 1,    | 1,337.4 | 2      | 1,396.0  | 1      |
| Poland S.p.z.o.o.    | 589.0 |         | ,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      | 5,    | 2,647.1 | 8      | 5,741.5  | 2      |
| Inc., USA            | 950.2 |         | ,597.3 |          | ,855.8 |
+----------------------+-------+---------+--------+----------+--------+
| Wellman              | 2,    | -       | 2      | 2,177.6  | 133.4  |
| International        | 311.0 |         | ,311.0 |          |        |
| Limlited,            |       |         |        |          |        |
| The Republic of      |       |         |        |          |        |
| Ireland              |       |         |        |          |        |
+----------------------+-------+---------+--------+----------+--------+
|                      |       |         |        |          | 6      |
|                      |       |         |        |          | ,752.6 |
+----------------------+-------+---------+--------+----------+--------+
| December 31, 2010    |       |         |        |          |        |
+----------------------+-------+---------+--------+----------+--------+
| Europort Utility     | 1,    | 562.8   | 1      | 1,048.9  | 562.8  |
| Partners VOF,        | 048.9 |         | ,611.7 |          |        |
| Netherlands          |       |         |        |          |        |
+----------------------+-------+---------+--------+----------+--------+
|                      |       |         |        |          | 562.8  |
+----------------------+-------+---------+--------+----------+--------+

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 5 – 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 4 – The significant accounting policies in
the Audited Financial Statements.

The intangible assets acquired through business combinations during the
year 2011 were Baht 3,862 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 16 – Intangible assets and Note 4 – The significant
accounting policies in the Audited Financial Statements.

Other Income

Other income for the year ended 2011 was Baht 812.0 million, an increase
from 2010 by Baht 655.0 million or 417.2% mainly due to insurance claims
from comprehensive insurance policy of Baht 505.2 million received
during the year 2011. Alphapet plant received insurance claims for the 2
months shutdown due to the power outage as a result of tornados in
Alabama in 2Q 2011, while Indorama Polyester Industries Rayong received
insurance claims for the temporary shutdown due to the break-down of a
production line at facility in 2Q 2011. The balance was from tolling
income and others.

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

For the year ended 2011 and 2010, IVL had share of equity income from
joint venture of Baht 1,314.5 million and Baht 1,888.2 million
respectively. Share of equity income from joint venture for the year
ended 2011 were resulted from the following jointly controlled entities:
UAB Ottana Polimeri Europe, Trevira Holding GmbH and PT Indorama
Petrochemicals. The recorded share of equity income in 2011 included
gains on bargain purchases on acquisitions in Trevira Holding GmbH and
PT Indorama Petrochamicals of Baht 1,616.6 million.

Expenses

+-------------------------------+------------+-----------+-----------+
|                               |            |           |           |
+-------------------------------+------------+-----------+-----------+
| Baht in Millions              | FY 2011    | FY 2010   | Change    |
|                               |            |           | (%)       |
|                               |            | (         |           |
|                               |            | Restated) |           |
+-------------------------------+------------+-----------+-----------+
|                               |            |           |           |
+-------------------------------+------------+-----------+-----------+
| Selling expenses              | 6,305.5    | 4,649.6   | 35.6%     |
+-------------------------------+------------+-----------+-----------+
| Administrative expenses       | 3,395.4    | 1,061.0   | 220.0%    |
+-------------------------------+------------+-----------+-----------+
| Management benefit expenses   | 127.0      | 110.8     | 14.6%     |
+-------------------------------+------------+-----------+-----------+
| Impairment losses due to      | 1,644.7    | -         | n/a       |
| flood                         |            |           |           |
+-------------------------------+------------+-----------+-----------+
| Total                         | 11,472.6   | 5,821.4   | 97.1%     |
+-------------------------------+------------+-----------+-----------+

Total expenses for the year ended 2011 was Baht 11,472.6 million,
increasing from year 2010 by Baht 5,651.2 million or 97.1% as a result
of higher selling and administrative expenses from business growth.
Several acquisitions in the beginning of 2011 not only led to higher
selling administrative expenses, but also incurred acquisition related
expenses. In addition, the provision has been set up for impairment
losses due to severe flood in Thailand in 4Q 2011 of Baht 1,644.7
million. The impacted assets are fully covered by comprehensive
insurance policy through which the group expect to receive the claim in
2012.

Finance Costs

Finance costs for the year ended 2011 was Baht 2,370.1 million, an
increase by Baht 1,067.1 million from 2010 in line with increasing in
both short-term and long-term loans to support business growth.

Income Tax Expense

Income tax expense for the year ended 2011 was Baht 742.3 million, an
increase by Baht 254.4 million from 2010 due to higher taxable income
particularly in subsidiaries in USA and Europe.

Net Profit

+--------------------------------+------------+-----------+-----------+
|                                |            |           |           |
+--------------------------------+------------+-----------+-----------+
| Baht in Millions               | FY 2011    | FY 2010   | Change    |
|                                |            |           | (%)       |
|                                |            | (         |           |
|                                |            | Restated) |           |
+--------------------------------+------------+-----------+-----------+
|                                |            |           |           |
+--------------------------------+------------+-----------+-----------+
| Net profit                     | 15,429.0   | 10,973.0  | 40.6%     |
+--------------------------------+------------+-----------+-----------+
| As a percentage of total       | 8.3        | 11.3      |           |
| revenues from the sale of      |            |           |           |
| goods                          |            |           |           |
+--------------------------------+------------+-----------+-----------+
| Profit attributable to:        | 15,568.0   | 10,413.4  | 49.5%     |
|                                |            |           |           |
| Owners of the Company          |            |           |           |
+--------------------------------+------------+-----------+-----------+
| Non-controlling interests      | (138.9)    | 559.6     | (124.8%)  |
+--------------------------------+------------+-----------+-----------+

Net Profit for the year ended 2011 was Baht 15,429.0 million, increasing
by Bath 4,456.0 million or 40.6% from 2010 from the business growth. The
net profit for the period included extraordinary items i.e. gains on
bargain purchases and related transaction expenses incurred on
acquisitions completed and impairment loss due to floods. These
non-recurring items are not from the normal operation of the business.

Financial Position

Total Assets

As of December 31, 2010 and 2011, IVL had total assets of Baht 77,940.6
million and Baht 145,826.1 million, respectively. The 87.1% increase was
mainly due to business expansion and several acquisitions. Major assets
are as follows:

Trade Accounts Receivable

As of December 31, 2010 and 2011, IVL had trade accounts receivable of
Baht 11,770.7 million and Baht 24,508.8 million, respectively,
representing 15.10% and 16.81% of total assets. The collection periods
for the years ended 2011 have improved from 40.5 days to 35.3 days. The
significant increase in trade accounts receivable is in line with the
expansion of business. Aging analyses for trade accounts receivable were
as follows:

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

                                        31 December        31 December 2010
                                        2011               

                                        (Baht in           
                                        Millions)          

  Related parties                                          

  Within credit terms                   1,456.5            1,329.7

  Overdue:                                                 

  Less than 3 months                    0.5                90.9

                                                           

  Less allowance for doubtful accounts  -                  -

  Net                                   1,457.1            1,420.6

                                                           

  Other parties                                            

  Within credit terms                   18,925.8           8,890.5

  Overdue:                                                 

  Less than 3 months                    4,135.8            1,421.1

  3-6 months                            18.1               20.1

  6-12 months                           9.8                4.5

  Over 12 months                        144.1              39.3

                                        23,233.7           10,375.5

  Less allowance for doubtful accounts  (181.9)            (25.4)

  Net                                   25,051.7           10,350.1

                                                           

  Total                                 24,508.8           11,770.7
  ------------------------------------- --------------- -- ----------------

Inventories

As of December 31, 2010 and 2011, IVL had inventories of Baht 11,384.3
million and Baht 21,422.3 million respectively, representing 14.61% and
14.69% of total assets. The number of days sale for the year ended 2010
and 2011 were 46.3 days and 36.5 days respectively.

Property, plant and equipment

As of December 31, 2010 and 2011, IVL had property, plant and equipment
of Baht 48,820.2 million and Baht 66,825.4 million, respectively,
representing 62.64% and 45.83% of total assets. The significant increase
in property, plant and equipment resulted from our business expansions
through investments and acquisitions in overseas.

Total Liabilities

As of December 31, 2010 and 2011, IVL had total liabilities of Baht
45,698.9 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 company.

Trade accounts payable

As of December 31, 2010 and 2011, IVL had trade accounts payable of Baht
10,858.3 million and Baht 17,978.1 million respectively. The payment
days for the year ended 2010 and 2011 were 43.6 days and 31.3 days
respectively.

Interest-bearing liabilities

As of December 31, 2010 and 2011, IVL had interest-bearing liabilities
of Baht 32,068.5 million and Baht 61,346.1 million respectively,
representing 41.1% and 42.1% of total liabilities and shareholder's
equity. The details of Interest-bearing liabilities are as follows:

[TABLE]

Shareholder's equity

As of December 31, 2010 and 2011, IVL had shareholder's equity of Baht
32,241.7 million and Baht 58,776.9 million, respectively. The increase
in shareholder's equity was mainly due to the subscription of
Transferable Subscription Right, recorded in paid-up share capital and
share premium. Besides, retained earnings increased from continued
profitability of the company.

Cash Flow

IVL generated Baht 8,689.2 million of cash flow from operating
activities in 2011 comparing with Baht 10,383.1 million generated in
2010. The higher prices of all products and higher volumes from
acquisitions led to increase in cash outflow for working capital.

Cash flows used in investing activities of Baht 36,138.5 million in 2011
were primarily for the acquisitions of PET plant in China, the Invista
PET and Polyester plants in USA & Mexico, the SK Chemicals PET and
Polyester plants in Indonesia and Poland, Trevira Polyester plants in
Europe, Wellman Polyester plants in the Republic of Ireland, and
investment in joint ventures including Trevira Holding GmbH and PT
Indorama Petrochemials

Cash flows provided by financing activities of Baht 37,957.9 million in
2011 were principally a result of cash proceeds from the rights issue of
shares, 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 improved from 1.09
times to 1.57 times at the end of 2011.

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 42.43%
and 34.39% in 2010 and 2011, respectively. The ROE decreased due to
increase in shareholder's equity in 2011 which resulted from the
subscription of Transferable Subscription Right.

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 2010 and 2011, our ROA ratio
was 14.42% and 13.79%, respectively. The ROA decreased due to increase
in profit of the Company at a rate less than the increase in assets, as
several acquisitions were acquired and included in the group’s
operations during the year 2011.

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, 2010 and 2011, our D/E ratio
was 1.42 times and 1.48 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, 2010 and 2011, our net interest bearing debt
to equity was 0.93 times and 0.74 times, respectively. The lower net
interest bearing debt to equity has been achieved despite completing
major capex and investment of acquisitions during the year.

Auditor Fee

Audit Fee

IVL paid audit fee to IVL and subsidiaries’ auditor for public
consolidated and separate financial statement of Baht 34.1 million and
Baht 52.9 million in 2010 and 2011, respectively.

Non-Audit Fee

IVL paid other service fee to audit group companies for auditing BOI,
auditing the financial statement of new acquisition during year, and
auditing and preparing the financial statement complied with
International Financial Reporting Standards (IFRS) of total Baht 5.4
million and Baht 23.2 million in 2010 and 2011, respectively.