Part 1

1.  Policy and Overview of Business Operation

    1.  Vision, Mission, Objective and Strategy of the Company

  []

Values

[]

Our core values, enunciated in the acronym S.C.O.R.E., inspire our
internal and external interactions.

[]We leverage synergies across hierarchies, functions and locations.

[]We value our people and are committed to their development. We take a
long-term approach to all our relationships.

[]We honor our commitments towards internal and external stake-holders.

[]We stretch ourselves continuously to improve the way we work. We
constantly pursue newer and better ideas, processes, products and
practices.

2.  Background of the Company and key developments

  Polyplex (Thailand) Plc. (“PTL” or “the Company”) was incorporated as
  a private company on March 26, 2002 to manufacture and distribute PET
  film (polyethylene terephthalate film or polyester film). In August
  2004, the Company was transformed into a Public Company, with a
  registered capital of Baht 960 million and the IPO was subsequently
  made in December 2004. Current Registered and Paid up capital of the
  Company is Baht 900 million. The Company is promoted by Polyplex
  Corporation Limited (PCL) based in India and engaged in the same
  business as the Company for more than 29 years. As at 31^(st) March,
  2018, PCL has 51% stake in the Company through both direct and
  indirect shareholding and the balance 49% is with the general public.

  Past key changes and developments in the Company are as follows:

+-----------+----------------------------------------------------------+
| March     | PTL was incorporated by PCL, which is a listed company   |
| 2002      | (on the Bombay Stock Exchange as also National Stock     |
|           | Exchange) in India to set up a greenfield expansion for  |
|           | manufacture of Thin PET film.                            |
+-----------+----------------------------------------------------------+
| April     | Startup of the Thin PET film line 1 in Thailand          |
| 2003      |                                                          |
+-----------+----------------------------------------------------------+
| November  | Startup of the Thin PET film line 2 in Thailand          |
| 2003      |                                                          |
+-----------+----------------------------------------------------------+
| August    | Registration was completed to transform the Company into |
| 2004      | a public company.                                        |
+-----------+----------------------------------------------------------+
| September | Start up on PET resin batch plant in Thailand.           |
| 2004      |                                                          |
+-----------+----------------------------------------------------------+
| December  | IPO of 240,000,000 shares at the price of Baht 6.90 per  |
| 2004      | share.                                                   |
+-----------+----------------------------------------------------------+
| February  | Startup of PET resin continuous plant in Thailand.       |
| 2005      |                                                          |
+-----------+----------------------------------------------------------+
| August    | Startup of Metallizer Line 1 in Thailand.                |
| 2005      |                                                          |
+-----------+----------------------------------------------------------+
| December  | Startup of the first Thin Pet film line in Turkey        |
| 2005      | implemented under a 100% subsidiary company Polyplex     |
|           | Europa Polyester Film San ve Ticaret. A.Ş.               |
+-----------+----------------------------------------------------------+
| January   | Acquisition of 80.24% in a Trading Distribution company  |
| 2006      | in USA and renamed it Polyplex (Americas) Inc.           |
+-----------+----------------------------------------------------------+
| March     | Startup of Metallizer Line 1 in Turkey                   |
| 2006      |                                                          |
+-----------+----------------------------------------------------------+
| December  | Startup of PET resin plant in Turkey                     |
|           |                                                          |
| 2006      |                                                          |
+-----------+----------------------------------------------------------+
| April     | Startup of Extrusion Coating Line 1 in Thailand          |
| 2008      |                                                          |
+-----------+----------------------------------------------------------+
| May 2008  | Startup of Thin PET film line 2 in Turkey Metallizer     |
|           | Line 2 in Thailand as well as Turkey                     |
+-----------+----------------------------------------------------------+
| September | The Trading company in China - Polyplex Trading          |
| 2009      | (Shenzhen) Co. Ltd was set up as a 100% subsidiary and   |
|           | capital injected through Polyplex (Singapore) Pte Ltd    |
+-----------+----------------------------------------------------------+
| March     | Startup of the Cast Polypropylene line (plain CPP) and   |
| 2010      | Metalliser (Line 3) in Thailand                          |
+-----------+----------------------------------------------------------+
| March     | Startup of the Silicone Coating line in Thailand         |
| 2012      |                                                          |
+-----------+----------------------------------------------------------+
| July 2012 | Polyplex USA LLC acquired Metalizing assets from Vacumet |
|           | Plastics division in Austell, Georgia, USA               |
+-----------+----------------------------------------------------------+
| August    | Set up of a Liaison office in Malaysia                   |
| 2012      |                                                          |
+-----------+----------------------------------------------------------+
| January   | Acquired the balance 19.76% from the minority            |
| 2013      | shareholders of Polyplex (Americas) Inc.(PA) USA and     |
|           | merged the Trading company with the manufacturing        |
|           | subsidiary PUL.                                          |
+-----------+----------------------------------------------------------+
| April     | Startup of Thin PET Film line 1 in Decatur, USA under a  |
| 2013      | 100% subsidiary company – Polyplex USA LLC               |
+-----------+----------------------------------------------------------+
| April     | Set up a Trading and distribution company in Netherlands |
| 2013      | – Polyplex Europe B.V, as a 100% subsidiary of the       |
|           | Company.                                                 |
+-----------+----------------------------------------------------------+
| June 2013 | Startup of the Extrusion Coating line 2 in Thailand.     |
+-----------+----------------------------------------------------------+
| September | Set up of a Trading and Distribution Company in Turkey – |
| 2013      | Polyplex Paketleme Çözümleri Sanayi ve Ticaret A.Ş. as a |
|           | 100% subsidiary of Polyplex Europa Polyester Film San ve |
|           | Ticaret. A.Ş.                                            |
+-----------+----------------------------------------------------------+
| October   | Startup of Thick PET Film line & Blown PP film line in   |
| 2013      | Thailand                                                 |
+-----------+----------------------------------------------------------+
| December  | Startup of the recycling plant in Thailand implemented   |
| 2013      | under a new subsidiary - EcoBlue Limited                 |
+-----------+----------------------------------------------------------+
| February  | Startup of the PET resin plant for Thick PET film line   |
| 2014      | in Thailand                                              |
+-----------+----------------------------------------------------------+
| March     | Startup of Offline coater in Polyplex Europa Turkey      |
| 2014      |                                                          |
+-----------+----------------------------------------------------------+
| October   | Set up of a Liaison office in Korea                      |
| 2014      |                                                          |
+-----------+----------------------------------------------------------+
| October   | Startup of PET Resin plant in USA                        |
| 2014      |                                                          |
+-----------+----------------------------------------------------------+
| October   | Startup of Metalliser Line 4 in Thailand                 |
| 2014      |                                                          |
+-----------+----------------------------------------------------------+
| January   | Startup of Metalliser Line 3 in Turkey                   |
| 2015      |                                                          |
+-----------+----------------------------------------------------------+
| January   | Disposal to Indorama Netherlands B.V, of 100% stake held |
| 2015      | in Polyplex Resins Sanayi ve Ticaret A.S (PR) by its     |
|           | wholly owned subsidiary Polyplex Europa Polyester Film   |
|           | San ve Ticaret. A.Ş. (PE), Turkey and its parent company |
|           | Polyplex (Asia) Pte Ltd (PAPL), [67% held by PE and 33%  |
|           | held by PAPL]                                            |
+-----------+----------------------------------------------------------+
| March     | Board approved and recommended to the shareholders for   |
| 2016      | their approval, the increase in Share capital through a  |
|           | Rights offering of 100 million Ordinary shares in the    |
|           | ratio of 1 new share for every 8 existing shares, at an  |
|           | Issue price of Baht 6.40/share.                          |
+-----------+----------------------------------------------------------+
| April     | Rights Offering as above, approved in the Extra Ordinary |
| 2016      | General Meeting of shareholders                          |
+-----------+----------------------------------------------------------+
| May 2016  | Rights Offering fully subscribed including               |
|           | oversubscriptions and Baht 640 million capital           |
|           | successfully raised                                      |
+-----------+----------------------------------------------------------+
| November  | Board approved the new replacement metallizer project at |
| 2016      | Polyplex USA LLC                                         |
+-----------+----------------------------------------------------------+
| May 2017  | Board approved a second Blown film line project at       |
|           | Thailand                                                 |
+-----------+----------------------------------------------------------+
| July 2017 | Board approved a Greenfield Thin PET film line project   |
|           | in Indonesia at a total investment cost of USD 95        |
|           | million (including USD 15 million for working capital)   |
+-----------+----------------------------------------------------------+
| October   | A new subsidiary in Indonesia – PT Polyplex Films        |
| 2017      | Indonesia was set up in October 2017 as a 99.995%        |
|           | subsidiary of Polyplex (Thailand) Plc and Equity of IDR  |
|           | 202.5 billion was injected in November 2017.             |
+-----------+----------------------------------------------------------+

3.  Shareholding structure

  The shareholding structure of the Polyplex group as on 31.3.2018 is:

[]

Polyplex Corporation Ltd. (PCL)

  PCL, the parent company operating for over 29 years since 1988, is one
  of the major producers and distributor of plastic film in India
  selling in both the domestic and overseas markets. It has been listed
  for several years on Bombay Stock Exchange and other Exchanges in
  India. It’s paid up capital is INR 325.6 million (about Bt. 166.8
  million).

  PCL has the following production capacities as at 31^(st) March 2018:-

  Its direct and indirect shareholding in the Company aggregate to 51%
  of the latter’s paid up capital.

  Polyplex has also evolved an equitable policy for distribution of
  markets, for common businesses, between its Indian, Thailand, Turkey
  and US operations based on the several factors like product range,
  delivered cost to customer, supply lead times and preferential duty
  access. Based on the same, PTL would serve South East Asia, Asia
  Pacific, China, Australia & New Zealand. PCL would serve South Asia.
  Turkey will serve Europe, Africa and CIS/Russian markets and USA would
  serve North American market.

  The Polyplex group also has a policy on future investments in
  polyester film / related areas between the Company and its parent
  company. Investments in India/SAARC region would be decided and made
  by PCL and its other subsidiaries (excluding the Company) while
  investments In Thailand / ASEAN region as well as other countries
  would be in all likelihood be made by PTL or the subsidiaries in which
  the Company has a major stake. The above is subject to availability of
  Investible cash / ability to borrow debt by the existing / preferred
  Company as per the policy. In line with this Investment policy, the
  investment in Indonesia is fully owned by PTL.

Polyplex (Asia) Pte. Ltd. (PAPL)

  PAPL was established as a 100% subsidiary of PCL in July, 2004 and is
  now a major shareholder of PTL holding 33.81% as on 31^(st) March
  2018. The issued and paid up capital of PAPL as of March 31, 2018
  stands at USD 1.13 million.

Polyplex (Singapore) Pte. Ltd. (PSPL)

  SPL was established as a 100% subsidiary of PTL in July 2004, as a
  wholly owned investment company. Subsequently, PSPL invested in
  Polyplex Europa Polyester Film Sanayi Ve Ticaret Anonim Şirketi (PE),
  through Share capital injection as well as by extending subordinated
  loans, to set up a manufacturing factory in Turkey so as to serve the
  demand in European and other proximate markets.

  In September 2009, PSPL set up a trading company in China, Polyplex
  Trading (Shenzhen) Co Ltd (PTSL) by investing $ 400,000 as share
  capital.

  The issued and paid up capital of PSPL (including Preference Share
  Capital) as of March 31, 2018 stands at Euro 9.14 million.

Polyplex Europa Polyester Film Sanayi Ve Ticaret Anonim Sirketi (PE)

  PSPL had incorporated a 100% owned subsidiary company, PE in Turkey
  for setting up a Greenfield polyester film plant to cater to the
  European and other proximate markets. The commercial operations
  started in December, 2005 with the start up of the first thin PET film
  line. The first Metallizer plant started production in March, 2006.
  The PET resin plant commenced commercial production from December,
  2006. The second thin PET film line and Metallizer commenced
  commercial production in May 2008. The latest addition to its assets
  has been an Offline Coater which started commercial production in
  March 2014 and a third Metallizer which started commercial production
  in January 2015. The issued and paid up capital of PE, including
  Additional Contribution from PSPL, as of March 31, 2018 stands at Euro
  8.8 million.

  Polyplex Trading (Shenzhen) Co. Ltd (PTSL)

  In the financial year 2009-10, PTL invested in the setting up of a
  wholly owned Trading Company in Shenzhen, China, through its 100% held
  Investment Company in Singapore, PSPL. The issued and paid up capital
  of PTSL as at 31^(st) March 2018 is USD 0.4 million.

  Polyplex America Holdings Inc (PAH).

  In FY 2011-12, PTL invested in setting up a 100% Investment and
  Trading & Distribution Company in USA. PAH has further invested in
  Polyplex (USA) LLC, a manufacturing facility. The issued and paid up
  capital of PAH (including the Additional Paid-In Capital) as on
  31^(st) March’2018 is USD 46.62 million.

  Polyplex USA LLC (PUL)

  Polyplex USA LLC, Decatur, Alabama, was established in FY 2011-12 as a
  100% subsidiary of PAH. This is the first manufacturing base of
  Polyplex in USA. The thin PET film line has started commercial
  production in April, 2013 and the PET Resins plant project commenced
  commercial production in October 2014. The members’ contribution which
  represents the paid up capital as on 31^(st) March’18 is USD 46.2
  million.

  Polyplex Europe B.V

  Polyplex Europe B.V was established in April 2013 as a 100% subsidiary
  of Polyplex (Thailand) Plc. The registered capital is 3 million Euro
  of which Euro 0.2 million has been called and paid up till 31^(st)
  March’18. This company is mainly engaged in the warehousing and
  distribution of different products of the Company in the European
  market.

  Polyplex Paketleme Cozumleri Sanayi ve Ticaret A.S

  In FY 2013-14, Polyplex Europa Polyester Film Sanayi ve Ticaret Anonim
  Şirketi (PE) had established a company in Turkey, named Polyplex
  Paketleme Çözümleri Sanayi ve Ticaret A.Ş. holding 100% of its share
  capital. This company is mainly engaged in trading of PET Film, PET
  chips and other products of the Company. The Registered Share capital
  of this company is TRY 100,000 as of March 31, 2018, which has been
  fully called and paid up.

PT. Polyplex Films Indonesia

  In October, 2017, PT. Polyplex Films Indonesia (PT PFI) was
  established with an Authorized and Registered Share Capital of IDR 540
  billion. PT PFI is owned 99.99% by PTL and 1 share is held by Mr. Amit
  Prakash, to comply with a regulatory requirement in Indonesia, of
  having a minimum of 2 shareholders. As at 31^(st) March, 2018, the
  Called up and Paid up Share capital of PT PFI is IDR 202.5 billion and
  IDR 135 billion has been further injected until May 2018.

2.  Nature of business

    1.  Revenue structure of the Company

  PTL’s standalone and consolidated sales value classified by regions is
  shown below:

Note:

1) Sale of chips/others includes both domestic and export sales.

2) Includes Exchange gain (if any), miscellaneous sales, Export
Incentive, interest received, etc.

  []

2.  Business Goals

  The vision of Polyplex is to continuously grow, create value and
  establish global leadership in the plastic film business through
  building trusted partnerships with Investors, Customers, Business
  Associates and Employees. Keeping this vision in mind, Polyplex has
  been moving towards establishing itself as a Preferred packaging
  substrate provider as against just a PET thin film supplier, by
  undertaking expansions for manufacturing BOPP film, CPP film and Blown
  PP/ PE films, which are other Packaging substrates used by Converters,
  in addition to PET thin film. The Thick PET film line in Thailand
  which started commercial production in October, 2013, is Polyplex’s
  first step into the Thick Film segment which has helped in
  diversifying its product and customer portfolio. The Company supplies
  the films to all major PV back sheet manufacturers and has initiated
  trials in the optical segment. As a result, the Company has been able
  to ramp up the production of this line in current year and plans to
  further increase the customer base, by getting our products qualified
  in newer customer accounts and/or applications in the coming year.

  The business goal is to increase market share in various regional
  markets - through geographically diversified manufacturing presence,
  increased market penetration in key markets and build a diversified
  portfolio of products like Metallized films, Clear films, Thermal
  Lamination films, Silicone Coated film, Blown films, Chemically Coated
  films, and other grades of packaging films like CPP, BOPP etc. The
  Thin PET film line in USA which started in April, 2013, was a
  strategic investment in this direction, to enable the company to
  increase its market share in American continent by moving closer to
  the customers and becoming a preferred on-shore supplier as against an
  off-shore or near-shore supplier in the past. Similarly, the
  Greenfield Thin PET film line project under implementation in
  Indonesia is another strategic investment to move closer to the
  customer and become a preferred on-shore supplier as against an
  off-shore or near-shore supplier in the past.

3.  Promotion certificates

  PTL has been granted ten BOI promotion certificates, details of which
  are as below: ­

  By virtue of the provisions of the Board of Investment Promotion Act
  B.E. 2520, the Company has been granted certain standard promotional
  privileges on the manufacturing and distributing the polyester
  film/resin/Thermal Lamination film/CPP film/ Silicone Coated/Blown
  film as per the following sections: 25, 26, 27, 28, 31, 34, 35(1),
  35(2), 35(3), 36(1), 36(2) and 37 respectively. The Company must
  comply with certain conditions and restrictions provided for in the
  promotion certificate. Details of the privileges of each of the above
  sections are available at www.boi.go.th

4.  Business Operations by each product line

  Manufacture and Distribution of Polyester thin film (Polyethylene
  Terephthalate Film, also called PET film, sold under the Brand name
  ‘Sarafil’), is the core business of the Company, including its
  subsidiaries. It focuses mainly on 3 key segments - Packaging,
  Industrial and Electrical. The customers use the company’s products as
  raw material to produce their end-products which are then sold to
  their consumers. Some examples of products made from PET thin film are
  Coffee/Tea bag, snack bag, softener bag, detergent bag, wire/cable
  wrap and hot stamping foil.

  []

  In April 2008, the company started manufacturing a downstream value
  added product called ‘Thermal Lamination film’. This sold under the
  brand name ‘Saralam’. In this product line, the PET film, Nylon film
  or BOPP film is used as the base film, and then extrusion coated with
  adhesive resins like LDPE or EVA, based on the requirement of the end
  use application to be catered to. After the start up of the second
  line in June’13, the Company has increased its capacity of this
  product with an aim to increase the value added product sales in its
  mix. Some of the applications of Saralam are as under:

  [][] []

  In line with its objective of becoming a complete packaging solution
  provider, rather than just a thin PET film supplier, the company has
  in March 2010 started the manufacture of Cast polypropylene film. The
  company manufactures and sells plain & metallized CPP film under the
  brand name ‘ SaraCPP’.

  In an effort to continue its objective of diversifying the product as
  well as the customer base, Polyplex set up a Silicone Coating film
  line is Thailand which commenced commercial operations in March’12
  under the brand name “Saracote”. Some of its applications are as
  under:

  [] [] []

  The Blown film line in Thailand is another concentric diversification
  by the Company in the plastic film business. This film is mainly used
  as a base film for the Silicone Coated film, as well as sold in the
  merchant market. As the first Blown film line is almost fully ramped
  up and the Company sees more growth potential in this product segment,
  it has decided to go for a second line and Board has in May, 2017,
  approved the investment in a new Blown film line in Thailand which has
  been commissioned in June’ 2018 and trial runs underway.

  The Thick PET film line in Thailand is another related diversification
  by the Company which will help the company to cater more to the
  industrial and electrical segments as compared to the packaging
  segment for Thin PET film. Some of the common applications of Thick
  PET film are as under:

  [] []

  [] []

  As a sustainability initiative, the Company had invested in a project
  to recycle and provide sustainable solution for film based process
  waste. The project had started commercial operations in December, 2013
  in Thailand, under the Company’s subsidiary - EcoBlue Limited.

1.  Product Description

  The range of products offered by the company is as under:

  A.)Transparent thin PET films which can divided into 5 sub-categories

-   Plain & Corona treated

-   Chemically coated

-   High adhesion films

-   Ultra clear films

-   Co-extruded films

  B.) Metallized PET films

-   Normal Metallized

-   Semi Metallized film (low Optical density)

-   High barrier films

C.) Specialty Films

-   Twist films

-   Anti static films

-   Heat Sealable films

-   Isotropic Films, High Friction Films, etc

-   Matte films

-   Offline Coated Transparent Barrier films

-   Alox Coated Transparent Barrier Films

-   Off-line coated Sealable-Pealable films

D.  Thermal Lamination Film

    -   Gloss PET Thermal Film

    -   MATTE PET Thermal Film

    -   BOPP Thermal Film

    -   Metallized Thermal Film

    -   Nylon Thermal Film

E.  Cast Polypropylene film - Product range:

-   Lamination & Conversion grade film

    -   Transparent film for lamination & surface printing

    -   High hot tack film for candy packing

-   Metallizable grade film - Transparent heat sealable film for vacuum
    metallization

-   Twist grade film

-   Retort grade film

F.  Siliconized Films (Under the brand name ‘Saracote’) in PET and PP
    films are used in various applications such as:

-   Shingle roofing tapes

-   Release liner in pressure sensitive labels.

-   Release liner in pressure sensitive adhesive tapes.

-   Release liner in medical and hygiene products.

G.) Thick PET Film – main sub categories are as under:

-   Milky White

-   Clear/Ultra Clear

-   Transparent

-   Hazy Film

    1.  Product Characteristics

  a) Characteristic of PET film

PET film characteristic properties are as follows:

-   Optically brilliant, clear appearance

-   Excellent mechanical strength and toughness

-   Good dielectric properties

-   Good flatness and coefficient of friction (COF)

-   Tear-resistant and puncture - resistant characteristics

-   Excellent dimensional stability over a wide range of temperatures

-   Very good resistance to most common solvents, moisture, oil, and
    grease

-   Excellent barrier against a wide range of gases

  PET film can also be modified with varying degrees of shrinkage,
  opacity & colors and different surface textures for it to be used over
  a wide range of applications.

  A wide range of chemical treatments (in addition to corona) can be
  applied to PET film during its manufacture to help it adhere to
  various coatings.

  b) Characteristics of CPP Film

-   Excellent Heat sealing properties/ High heat resistance

-   Exceptional Optics

-   Good dimensional stability and barrier properties

-   Excellent printability

-   Metallized CPP - Significantly increases barrier properties

  c) Characteristics of Thermal Lamination Films

-   High gloss & stiffness provide longevity to laminated media

-   Coated adhesive forms inseparable bond with inks/papers

-   Surface is conducive to add-on processes like Hot stamping, UV
    coating

-   Improves visual appeal of product

  d) Characteristics of Silicone Coated Films

-   Silicone Coated film is designed to provide excellent carrier to
    pressure sensitive material

-   Single/ Double sided coated film

-   Superior tensile strength, dimensional stability and caliper control
    as compared to other Liners

  e) Characteristics of Blown PP/PE Film

-   Excellent off line coating ability

-   Exceptional Gauge control  

-   Ability to match color shades in Films  

-   Economical Oxygen Barrier Films

    1.  End Use segment

  Thin PET film can be used in the following 3 key segments

+-----------------------------------------------------------------------+
| -   Packaging - Clear and Metallized thin PET film can be used as     |
|     part of the outer layer and middle layer of the flexible          |
|     packaging such as coffee bag, snack bag, softener bag, and        |
|     detergent bag.                                                    |
+-----------------------------------------------------------------------+
| -   Industrial -Comprising of Hot stamping foils, flexible            |
|     air-conditioning ducts, labels /ID cards, lamination products and |
|     many more.                                                        |
+-----------------------------------------------------------------------+
| -   Electrical - Wire and cable wrap, membrane switches, flexible     |
|     printed circuits, capacitors and motor insulation.                |
+-----------------------------------------------------------------------+

  Thick PET film is mainly used in the Industrial and Electrical
  segments

-   Electrical – This segment accounts for almost 60% - 65% of Thick PET
    film market and is driving the growth in demand of Thick PET films.
    This segment can be further sub-classified under the following:

-   Display: Flat panel display, Advance display, Holographic, STN
    Reflectors, Anti-reflection, Touch Panels (ITO), & Optical
    Applications.

-   Electrical : Electrical Insulation, Cable Wrap, Transformers, Slot
    Liners, Wedges, and Phase Insulation for Motors and Generators.

-   Electronics :Photo tool, Photo resist, Flexible Printed Circuits
    (FPC), Membrane Touch Switch (MTS) and Medical Sensors

-   Solar : PV Back sheet (Protective film), Insulation film, Protective
    film for Top Surface.

-   Industrial – Window Film, Laminating Film, Credit & Prepaid Cards,
    Medical Film etc are the key applications.

  Thermal Lamination films mainly cater to the following applications:

-   Thermal Lamination of documents or printed media

-   Reflective Insulation

-   Flexible packaging

-   Rigid packing using printed corrugated carton board

  CPP films can be used in the following key segments:

-   Packaging - CPP film is used as the inner most layer in food
    packaging, due to its excellent heat sealing properties. It may also
    be used in Textile packaging, packaging of health care products/
    consumer products etc

-   Industrial – Hot fill bags & liners, Industrial adhesive tapes,
    Interior automotive trim panels etc

  Silicone Coated Films mainly cater to the following applications:

-   PET Release liners for labels

-   PET Shingle tapes for the roofing industry

-   PP release liners for labels/stickers.

  The segmental break-up of revenue (PTL Standalone and Consolidated)
  from Film sales (Plain & Metallized PET films, Thermal Lamination/
  Silicone Coated Films/ CPP film and Blown PP film) are as follows:

  ­

  --------------------- ---------- -------- ---------- -------- ---------- --------
  STANDALONE SALES      2015-16             2016-17             2017-18    

  Segment               Bt. Mn     %        Bt. Mn     %        Bt. Mn     %

  Packaging Use         2,965.67   56.83    2,730.54   54.26    2,638.33   50.71

  Industrial Use        2,217.31   42.49    2,276.22   45.24    2,511.32   48.27

  Electrical Use        35.27      0.68     25.14      0.50     53.48      1.03

  Total Film Sales      5,218.25   100.00   5,031.90   100.00   5,203.14   100.00
  --------------------- ---------- -------- ---------- -------- ---------- --------

­

  --------------------- ----------- -------- ----------- -------- ----------- --------
  CONSOLIDATED SALES    2015-16              2016-17              2017-18     

  Segment               Bt. Mn      %        Bt. Mn      %        Bt. Mn      %

  Packaging Use         7,006.84    58.84    6,248.97    55.49    7,045.69    57.43

  Industrial Use        4,773.38    40.08    4,950.40    43.96    5,149.26    41.97

  Electrical Use        128.14      1.08     62.52       0.56     73.02       0.60

  Total Film Sales      11,908.36   100.00   11,261.89   100.00   12,267.97   100.00
  --------------------- ----------- -------- ----------- -------- ----------- --------

  Note:

i.  Sales of all types of films have been segregated above, depending on
    end use application of each type of product sold.

[]

1.  Products with similar properties

  In certain applications like graphics and magnetic recordings,
  substituting PET film would result in compromising performance
  characteristics of the product (e.g., strength, flatness, clarity,
  tear resistance, thermal stability and chemical resistance). However,
  in other applications, for which certain PET film performance
  characteristics may not be needed, PET film competes with a wide
  variety of substitute materials. These applications tend to fall in
  the low end of the product range, where other plastic films (e.g.,
  polyvinyl chloride, polypropylene, and polyethylene films) and paper
  may be considered as lower-priced substitutes. Applications for which
  a variety of substitute products may exist are primarily packaging and
  general-purpose industrial applications.

  BOPP Films (Biaxially Oriented Polypropylene) is one such close
  substitute product type, which is comparable in terms of its broad
  physical and mechanical properties to Polyester films. However, there
  are pros and cons of using PET film or BOPP films and depending upon
  the application requirements, a choice of the substrate would be made.
  As a result of this, both PET films and BOPP films have largely
  demarcated pockets where one is preferred over the other.

A Comparison of BOPP Films and BOPET (Polyester) Films

  Polyester film is considered as the premium plastic film in the
  flexible packaging industry. This is also reflected by the difference
  in the volume of the two products.

+-------------------------------------------+------------+-------------+
| Features                                  | BOPP       | BOPET       |
+-------------------------------------------+------------+-------------+
| Water vapour barrier                      | Excellent  | Fair        |
+-------------------------------------------+------------+-------------+
| Gas barrier properties                    | Poor       | Excellent   |
+-------------------------------------------+------------+-------------+
| Break down voltage                        | Poor       | Excellent   |
+-------------------------------------------+------------+-------------+
| Machineability                            | Fair       | Excellent   |
+-------------------------------------------+------------+-------------+
| Printability                              | Fair       | Excellent   |
+-------------------------------------------+------------+-------------+
| Suitability for metallising               | Poor       | Excellent   |
+-------------------------------------------+------------+-------------+
| Density (gm/cc)                           | Low (0.91) | High (1.39) |
+-------------------------------------------+------------+-------------+
| Strength                                  | Fair       | Excellent   |
+-------------------------------------------+------------+-------------+
| Temperature Sensitivity                   | Poor       | Excellent   |
+-------------------------------------------+------------+-------------+

  Polyester film when stretched in both directions gives excellent
  dimensional stability, gas barrier properties, break-down voltage etc.
  BOPP, despite stretching remains a ‘limp film’. Polyester film has
  better handling capabilities for fluctuations in temperatures etc. and
  is therefore also preferred in the less sophisticated markets. In
  tropical countries PET is also preferred due to its moisture and
  oxygen barrier properties. In addition products where aroma retention
  is important require the use of PET; e.g. coffee, tea.

  On the other hand, the low density of BOPP (0.91 Vs. 1.39 for PET)
  makes it a ‘cheaper’ alternative in packaging. However, the advantage
  of density is to some extent offset by the need to typically have a
  thicker film when using BOPP as compared to PET for the same
  application. Further, since PET is not ordinarily heat sealable, BOPP
  is preferred in heat sealable applications.

  All over the world BOPP and PET have established their respective
  segments in the packaging market and overlap is insignificant. Even in
  times of decline in BOPP selling prices few years back, there was no
  visible impact on the growth in PET films consumption. This
  establishes the limited substitutability between the two products.

1.  Business Strategy

  Key elements of the strategy are:

  - Attain cost leadership by way of capacity expansion and vertical
  integration.

  - Continued focus on improvement in cost efficiency through Kaizens
  including debottlenecking and energy saving/ efficient investments

  - Capture high growth markets and build good customer relationship.

  - To build strong global delivery capabilities with a judicious mix of
  on-shore, near-shore and off-shore strategy.

  - Further broad base the product portfolio by investing in upgrading
  technical and R&D capabilities.

  - Concentric and related diversification to bring stability in
  earnings.

  - Consolidate market position in key geographic locations.

  - Systems are created and strengthened to enhance cross-learning and
  sharing best practices/benchmarking across various units and
  businesses of the Group to enhance efficiency and synergy.

  Moving in this direction, the following initiatives have been taken by
  the Company:

-   The setting up of 2 successive Thin PET film lines in Thailand was
    the first step towards achieving cost leadership position along with
    diversification of customer base.

-   The 2 Thin PET film lines in Turkey has helped improve its cost
    structure to service its expanding customer base in Europe, Middle
    East, Africa & CIS/Russia.

-   The Company’s investment in the new PET Thin film line in USA is
    another step towards geographically diversifying its manufacturing
    base. This has helped the Company to participate in the growth in
    the flexible packaging segment in the American region and increase
    its market share.

-   Backward integration into the manufacturing of PET chips has further
    strengthened the cost structure of the Company in Thailand, Turkey
    and in USA. In addition, this has helped maintain the quality of
    input resin and hence of final product.

-   Increase in its Metallizing capacities across all its manufacturing
    locations has helped the Company to improve its value added product
    portfolio. The Company is investing in a replacement metallizer at
    the subsidiary in USA which will enable PUL to create
    differentiation through improved product / customer mix and generate
    better margins.

-   The 2 Extrusion Coating lines in Thailand has helped the Company to
    further increase the share of value added products, in its sales
    portfolio.

-   With the start-up of the new Silicone Coated film in Thailand in
    2012, the Company has been able to increase its presence in new
    product segments and thereby reduce the impact of the cyclical
    nature of the Thin Polyester Film industry.

-   The PET Thick film line in Thailand should help the company to bring
    about more stability in earnings, as this segment is generally more
    stable in comparison to the PET Thin film segment.

-   The Blown film line helped Polyplex to enter into the Silicone
    coated PP film market and based on the success and positive
    experience of the first line, the Company invested in the second
    Blown PP film line to expand the capacity and increase its market
    share. This new line has been commissioned in June 2018 and trial
    runs underway.

-   The setting up of a recycle plant in Thailand for providing
    sustainable solution for film based process waste is the first step
    by the Company towards the Green Initiative.

-   Various types of customer engagement initiatives by the Company have
    helped it to not only retain key customers, but also increase its
    customer base across the globe.

-   The wide network of distributors and agents has helped the Company
    to gain access to all key markets of the world.

-   The Liaison offices in Malaysia and Korea help the Company to
    understand these critical markets in a better way. The Company is in
    the process of setting up a Representative office in Japan.

    1.  Distribution Channel

  The Company distributes its products to both domestic and overseas
  markets, with main focus put on the latter.

  The product distribution is being made directly to the end users using
  its own marketing arms in USA, Turkey, Netherlands and China as well
  as commission agents across the globe. The indirect channel is mainly
  through distributors in designated areas. The sales through
  distributors and commission agents help support and even boost the
  sale volumes as these distributors and agents are in close proximity
  of the target markets, hence allowing for closer service provision to
  the customers with rapid delivery, and also better market penetration
  to access small customers.

  Value of total film sales to end users and distributors are as
  follows. Sales made through commission agents are included in ‘End
  Users’ segment.­­

  ------------------- ---------- -------- ---------- -------- ---------- --------
  STANDALONE SALES    2015-16             2016-17             2017-18    

  Customers           Bt.        %        Bt.        %        Bt.        %
                      million             million             million    

  End Users           2,251.62   43.15%   2,180.82   43.34%   2,299.07   44.19%

  Distributors        2,966.63   56.85%   2,851.08   56.66%   2,904.07   55.81%

  Total               5,218.25   100.00   5,031.90   100.00   5,203.14   100.00
  ------------------- ---------- -------- ---------- -------- ---------- --------

  -------------------- ----------- -------- ----------- -------- ----------- --------
  CONSOLIDATED SALES   2015-16              2016-17              2017-18     

  Customers            Bt. million %        Bt. million %        Bt. Million %

  End Users            7,552.18    63.42    7,507.54    66.66    8,287.78    67.56

  Distributors         4,356.19    36.58    3,754.35    33.34    3,980.19    32.44

  Total                11,908.36   100.00   11,261.89   100.00   12,267.97   100.00
  -------------------- ----------- -------- ----------- -------- ----------- --------

2.  Markets and competitive environment

    1.  Global Demand and supply

  Thin PET Film

  The growth in packaging has over the years shifted the production and
  usage patterns of Thin PET films. The Company’s relevant segments of
  Packaging, Industrial and Electrical constitute almost 100% of the
  total demand as the traditional high-end technology segments like
  magnetic media and imaging segments have become redundant due to
  technology transformation.

  Better packaging not only improves the shelf life of the products but
  is also essential for improving product appeal in a highly competitive
  consumer goods industry. Flexible packaging also plays a key role in
  source reduction on the principle of ‘use less waste in the first
  place’ which has ensured higher-than-GDP growth in the flexible
  packaging industry across the globe. PET film, being a higher-end
  substrate within packaging, has grown more rapidly than other
  substrates, growing at an average of about 5-8% per annum, globally.
  Demand in packaging is quite resilient as it relates to consumption of
  food products and consumer staples which are to a large extent
  non-discretionary in nature. This characteristic of the packaging
  segment has resulted in steady growth in demand, despite the adverse
  factors of economic slowdown witnessed in the recent past.

  []

  Source: Company estimates from Industry /Market study reports

  An increase in the purchasing power, coupled with the changing life
  style of people in the developing countries has brought with it a
  substantial increase in the per capita consumption of packaging
  material. As a result of this, Asia is the largest market for Thin PET
  films with more than two-third of the films produced globally being
  consumed in this region. At the same time, per capita consumption of
  packaging material in developing countries is still very low as
  compared to the mature markets. The key drivers of demand growth in
  these regions are the increase in the share of organized sector,
  increasing consumerism, changing demographics and the resulting need
  for better and more convenient packaging.

  A similar trend is also evident on the supply-side with most of the
  new capacities being added in low-cost developing countries. Most of
  the new capacity is also focused on the packaging segment, with an
  emphasis on high productivity and low operating costs. This has
  adversely impacted the traditionally large producers of PET film
  operating with high cost structures, who have now been forced to
  concentrate in the emerging niche technologies in PET films like films
  for LCDs, solar panels, touch screens and specific high-end
  applications within packaging. While trade defense measures like
  anti-dumping and countervailing duties are on the rise in an
  increasingly competitive market environment, they are unable to
  address the inherent problems of unproductive assets operating in the
  developed countries producing regular films.

  []

  Source: Company estimates from Industry /Market study reports

  Since the last few years the Thin PET film industry is witnessing a
  significant oversupply scenario due to excessive capacity addition
  following the exceptionally high margins witnessed in the PET film
  industry in 2010. The surge in capacity additions witnessed since 2011
  has slowed down which has helped in gradually correcting the demand
  supply imbalance in the industry over the past few quarters. Companies
  with consistent quality products, diversified product portfolio,
  access to international customers and a better supply chain model
  stand a better chance of participating in the market growth and
  improving/maintaining their margins above the industry averages.

  Thick PET Film

  Electrical and Industrial are the key segments in Thick film industry.
  In the last few years the demand of Thick PET film has been growing at
  a CAGR of about 5%-7%.

  New innovations and usage new applications in the Electrical segments
  (like Flat Screen panel, PV solar cells etc) have been driving the
  growth in the past and would help this industry to continue to grow at
  a healthy CAGR of about 4-6% for the next few years.

  []

  Source: Company estimates from Industry /Market study reports

  Similar to Thin Film industry, the additions in the capacity of Thick
  PET film has been done mainly by countries within Asia like China,
  South Korea and Japan.

  []

2.  Industry Situation

  Global competition

  The global Thin PET film manufacturers can be classified into 3 main
  categories by size of their production capacity:

(i) World majors with production capacity of over 100,000 tons per year

(ii) Mid-size players with production capacity between 50,000 – 100,000
     tons per year and

(iii) Small / local producers with production capacity of less than
      50,000 tons per year

  Demand for PET film for magnetic media application has been high in
  the past, prompting major producers to focus mainly on this segment.
  Competition in the magnetic media segment is thus confined only to
  these major ones based on their long and well established expertise
  and experience.

  For other PET films including thin film, competition is seen among all
  groups of producers thanks to the consistently rising demand,
  especially for thin film which is used in packaging, industrial and
  electrical segments where healthy growth of demand has been recorded
  in the past and a similar trend is expected in the future as well.
  Thus small, mid-sized and major producers (including Polyplex group)
  have expanded their capacity to cope with the increasing demand in
  these segments. This has led to the expectation of higher market share
  by producers in various countries which have surplus production
  capacity.

  Domestic competition

  Thailand’s PET film market is of small scale as compared to the global
  PET film market. As per our estimates, demand of PET film (thin &
  thick) in Thailand is approximately 50,000 tons per year with growth
  rate for next few years expected to be about 6-8% p.a. In the past,
  domestic producers have put emphasis on producing BOPP film rather
  than any other types. PTL has principally focused on Thin PET film
  since its inception in Thailand and started with one PET film line,
  within nine months set up a second line as well. Over the years, PTL
  has had several other expansions in film capacity i.e. value added
  films like Metallized film (4 lines), Thermal Lamination film,
  Silicone Coated film etc and related product diversification like
  manufacturing CPP film and Blown PP & PE films (second Blown film line
  commissioned in June’18). It is presently having the largest PET film
  production capacity in the country.

  The film production capacities of the various plastic film producers
  in Thailand as at 31^(st) March 2018 are as follows:

  ----------------- --------------- ------------ --------------- ----------
  Production line   Thai Film       A.J. Plast.  SRF industries  PTL*
  (tons per year)   Industrials     Plc.         Limited         
                    Plc.                                         

  BOPP film         73,000          132,000                      -

  PET Thin film     -               62,000       28,500          48,000

  PET Thick Film                                                 28,800

  CPP film          3,500           16,000                       **15,600

  BOPA film         -               18,000                       -

  Metallized film   4,800           28,300       12,000          23,800

  Blown Film#                                                    10,005

                                                                 

  Total             81,300          256,300      40,500          126,205

  Thermal           -               -                            365 mn Sqm
  Lamination film                                                

  Silicone Coated                                                725 Mn Sqm
  Film                                                           
  ----------------- --------------- ------------ --------------- ----------

  Source: Form 56-1/Industry sources

  * PTL capacities are as approved by BOI (for projects promoted by
  BOI). For actual attainable capacities, please refer table below,
  under section ‘Production Capacity’

  ** Combined capacity p.a. as approved by BOI for CPP plain and
  metalized film

  # including capacity of the new Blown film line which has been
  commissioned in June’18

Conclusion on PET film industry

The PET film industry has been expanding continuously in the past. The
main driving factor for the past few years has been the growth of the
packaging, industrial and electrical segments. Meanwhile, PET film
producers have boosted their capacity utilization and/or their
production capacity aggressively to respond to the increasing growth of
demand.

From 2008 – 2011, the Capacity utilization of Thin PET film was in the
range of 80-85%, subsequent to which a lot of players have added
significant capacities, resulting in an excessive oversupply scenario in
the last 4-5 years. This has brought down the utilization levels to less
than 80% in the past few years.

From 2008 – 2011, the Capacity utilization of Thick PET film was in the
range of 80-95% with the highest capacity utilization seen in 2010 &
2011 (93-95%), subsequent to which a lot of players have added
significant capacities, resulting in an excessive oversupply scenario in
the last 4-5 years. This has brought down the utilization levels to less
than 80% in the past few years.

The levels of 80-90% are considered a high utilization rate being close
to the full machinery capacity. In practice, some producers produce
lower than the nameplate capacity due to the long use and hence the poor
condition of machinery while some produce with capacity utilization even
higher than 100% of the nameplate capacity using new and modern
machinery and based on their long-time expertise and experience.

The trend of global capacity utilization for Thin and Thick PET film for
last 10 years is as under:

[]

Source: Company estimates from Industry /Market study reports

[]

Source: Company estimates from Industry/Market study reports

Despite the rising demand for PET film, it is not easy for new entrants
to compete with the existing players. It is because it is an industry
that needs high levels of know-how, skills and expertise to ensure the
exact product size, standard and specifications required by the
customers. Project management skills are also needed to enhance
efficiency and cost effectiveness that will lead to competitiveness
against other producers. Capacity expansion may be unavoidable to attain
larger size and hence economy of scale.

Polyplex group has accumulated over 30 years’ experience in the PET film
industry. It has been strengthened with consistent expansion in
production capacity. Its management is highly competent. Delivery of
products is efficient by having geographically distributed production
bases and a widely spread sales and distribution network that allow for
easy access to the customers.

The emphasis on the countries with high demand growth potential,
production and cost effectiveness and concentrating on business segments
such as packaging, industrial and electrical segments which have
recorded healthy growth all along has contributed to the Polyplex group
becoming one of the leading producers of thin PET film (excluding
capacity for magnetic media).

In view of tariff barriers imposed by importing countries such as
anti-dumping and anti-subsidy duties, the Company’s parent company based
in India has experienced such threat from both the EU and the USA
several times. It has thus been keen on the issue, having information on
the criteria and inspection process adopted by those countries and
knowing how to deal with the problem. It is an outcome of the
understanding of the process, that USA has levied zero duties till date
under the anti-dumping measure against the company.

As an outcome of the Anti-Dumping investigation initiated by the
Government of Brazil against UAE, Mexico and Turkey, in respect of PET
film imports into Brazil, the government of Brazil, w.e.f March, 2012
had imposed anti-dumping duty of USD 67.44 / MT on the Company’s
subsidiary in Turkey (Polyplex Europa). The Government had initiated a
sunset review of such duties in March 2017 for which Polyplex Europa
offered full cooperation and submitted the required information to the
investigating authorities. The investigating authorities concluded their
review in February 2018 and kept the duty rates unchanged @ USD 67.44 /
MT. It should also be noted that it was the minimum rate as compared to
the rates announced for other countries as well as other producers in
Turkey. Polyplex Europa’s exports to Brazil are not a very significant
portion of their overall sales volume and as such, there is no major
impact from the anti-dumping margin imposed.

As an outcome of the Antidumping investigation by the Government of
Indonesia against Thailand, an Anti-Dumping duty of about 2.2% on
imports from PTL into Indonesia has been levied since December 2015.

As an outcome of the Anti-Dumping investigation initiated by the
Government of Korea in 2017, a final Anti Dumping duty of 3.92% on
imports from PTL into Korea has been levied since November 2017 and this
will be applicable for a period of 3 years from date of applicability.

The company is undertaking all the safeguards to insulate against the
risk arising out of anti-dumping duties and other protective barriers
imposed by the importing countries.

Outlook for the PET film industry:

-   Global demand for Thin PET films is expected to grow at a CAGR of
    about 6-7% pa over the next few years and for Thick PET films it is
    expected to grow at about 4-6% pa.

-   Demand growth for the products in the Flexible Packaging segment in
    the South East Asian region is expected to be about 7-10%.

-   Mid size and new producers would increasingly look to expand their
    market reach and market share through exports and direct sales. They
    would also work towards diversifying their product range though this
    will be a slow process given the nature of applications and tedious
    approval process.

-   The surge in capacity additions witnessed since 2011 after the
    exceptionally high margins of 2010 has slowed down and a gradual
    correction was seen in the demand supply imbalance in the past 2-3
    years, which is expected to further improve over the next few
    quarters.

-   The cyclical nature of the industry would continue though muted as
    compared to 2010. Amplitude of the cycles has been reducing over
    several cycles..

-   The transitioning of the industry to Asia would pose higher
    competitive pressure in the years to come.

-   Increasingly, the larger producers are trying to tie up strategic
    partnerships with customers and suppliers in order to ensure growth,
    presence in diversified markets or products or even as a measure to
    acquire technology for newer and sophisticated product range.

    1.  Manufacturing of product

        1.  Production

PTL is having 3 plots of land at Siam Eastern Industrial Park, Rayong
Province, with a total area of about 100 Rai on which all the production
facilities are built up.

a) Production capacity

Capacity of Polyplex group as on 31^(st) March 2018# is as follows:

[]

  ----------------- -------- ------------ -------- -------- ----------- --------- -------
  Product Type      India    Thailand*#   Turkey   USA#     Indonesia   Total     Unit

  PET Thin Plain    55,000   42,000       58,000   31,000   44,000      230,000   MT
  Film                                                                            

  PET Thick Film             28,800                                     28,800    MT

  PET Resin         77,600   80,500       57,600   57,600   73,000      346,300   MT

  Metallized Film*  28,500   21,700       17,700   9,500    6,000       83,400    MT

  BOPP Film         35,000                                              35,000    MT

  CPP Plain Film             10,000                                     10,000    MT

  Blown PP Film*             8,845                                      8,845     MT

  Holography Films  2,640                                               2,640     MT

  Coated Films      270      865          146                           1,281     Mn Sqm
  ----------------- -------- ------------ -------- -------- ----------- --------- -------

­

* Capacities for Thailand above are attainable capacities and capacities
approved by BOI based on theoretical output are higher. For BOI approved
capacities in Thailand, please refer table above under section ‘Domestic
competition’.

# including capacity of the new Blown PP line in Thailand (which has
been commissioned in June 2018 and trial runs underway) and the new
replacement metallizer at USA under implementation

The capacity utilization rates for the Plain PET film lines (Thin
+Thick) PTL Standalone and Consolidated are as follows:

[]

[]

-   Capacity and Production of PET thin film in USA and PET thick film
    in Thailand included in above graphs, since start of commericial
    production in April and October, 2013 respectively

    1.  Major raw materials

  PET resin

  PET Resin (polyethylene terephthalate resin) is the major raw material
  in the production process for PET films. It has been the strategy of
  Polyplex to produce its own Resins at all the manufacturing locations.
  Accordingly every location has its own Resin plant with sufficient
  capacity to meet its requirement.

  Purified Terephthalic Acid (PTA) and Mono Ethylene Glycol (MEG):

  The major raw materials for PET resin production are purified
  terephthalic acid (PTA) and mono ethylene glycol (MEG). To ensure
  uninterrupted procurement of raw materials the Company has currently
  tied up with local suppliers for PTA and MEG for PTL. The subsidiary
  in Turkey is sourcing its PTA from Asia and MEG from Middle East. The
  subsidiary in USA, is procuring its requirements from local suppliers.

  The company enters into Annual contracts as per which 100% of the
  company’s requirements would be supplied as per the specified price
  formula throughout the contractual period(s).

  Major Raw materials for the Extrusion Coated Film production:

  Apart from PET film, which comes mostly from the company’s in house
  production, the major raw materials for the Extrusion Coated film
  production are BOPP base film and Coating chemicals such as LDPE and
  EVA. All these are sourced from various manufacturers / traders from
  within Thailand as well as imports from within the region.

  Major Raw materials for the Cast Polypropylene Film production:

  The major raw materials for the Cast Polypropylene film production are
  Homo Polymer and Co-Polymer. Homopolymer is being procured locally
  while Co-Polymer is sourced locally as well as imports from within the
  region.

  Major Raw materials for the Silicone Coated Film production:

  For the Silicone Coating line, the main raw material is PET film which
  is transferred from the Company’s in house production and also
  imported from the Parent company in India at Arm’s length pricing.
  Silicone and other chemicals are being imported from USA and Europe
  from leading suppliers.

  Major Raw materials for the Blown PP Film production:

  For Blown PP film line, the main raw material is PP resins
  (Homopolymer, Co-Polymer and PP Color master batches). These are
  sourced from local suppliers as well as imports from within this
  region.

  The value chain for the Company’s PET, CPP & Blown PP film business is
  depicted below:

  []

+---------------------------------------+---+--------+---+--------------+
|                                       |   |        |   |              |
+---------------------------------------+---+--------+---+--------------+
|   The value chain for Thermal         |   |        |   |              |
|   Lamination film is given below:     |   |        |   |              |
+---------------------------------------+---+--------+---+--------------+
| []                                    |   |        |   |              |
+---------------------------------------+---+--------+---+--------------+

2.  Impact on the environment

  There is a negligible impact on environment caused from the polyester
  film production process since PET in both film and resins are
  generally recyclable. For its Polyester resin line, it has the
  required EIA approval and submits regular reports required as per EIA
  approval to the concerned authorities.

  Since its commencement of production in March 2003, PTL has not faced
  any significant problems relating to the environment. Inspection by
  the Industrial Factory Department has been undertaken on a regular
  basis, the result of which has come out that the Company’s
  manufacturing process poses no environmental impacts.

All our product lines in Thailand have the following certifications:

-   ISO 14001:2004 certification on Environment Management system

-   ISO 9001:2008 certification on Quality Management system

-   OHSAS 18001:2007 certification on Occupational Health and Safety
    Management system

-   ISO 22000:2005 certification on Food Safety standards

-   TPM Excellence Award (Category A)

-   Kosher Certificate

All our product lines in Turkey have the following certifications:

-   ISO 14001:2004 certification on Environment Management system

-   ISO 9001:2008 certification on Quality Management system

-   OHSAS 18001:2007 certification on Occupational Health and Safety
    Management system

-   BRC/IoP – certification on Global Standard for Packaging and
    Packaging Materials (For Plain and Metallized Film lines)

-   ISO 50001:2011 certification on Energy Management system

3.  Risk Factors

  Before making a decision to invest in the shares of the Company,
  investors should prudently consider the information about risk factors
  described in this section and all information contained herein. Apart
  from the said risk factors, there are still other unpredictable risks
  that may adversely impact the Company’s operating results.

The key risk factors are:

1.  Industry Cycle

  The industry cycle of PET film hinges on the spread between the PET
  film price and the prices of PTA and MEG which are the major raw
  materials. Whenever the demand supply balance favors the suppliers,
  the PET film and raw material price spread usually widens, thereby
  encouraging the manufacturers to increase production by expanding
  their capacities. On the contrary, if PET film supply is larger than
  market demand, the film prices will drop, hence narrowing the spread
  between PET film and the raw material prices. This cyclical nature
  will inevitably affect every producer’s revenues and profits. Post the
  2010-11 up-cycle, a lot of capacities were added in the PET film
  industry. This created an imbalance in the demand supply scenario and
  put pressure on the selling prices, thereby contracting the margins.
  However, the oversupply situation has improved in last year, with the
  slowdown in capacity additions and with demand growth catching up with
  existing oversupply.

  To illustrate the cyclical impact of the PET film industry, the
  movement of profit before tax/sales of PTL (Consolidated), is shown in
  comparison with that of the prices of PET film and raw materials, as
  below:

  Comparison of normalized profit before tax* as a % to sales, of PTL on
  a consolidated basis, with prices of plain PET film (thin & thick),raw
  materials and value addition (Consolidated - Average for PTL-Thailand,
  PE-Turkey and PUL - USA)

  []

  * the forex gain loss of each year and the exceptional loss from sale
  of Polyplex Resins in FY 2014-15 and the Asset impairment loss in FY
  2015-16 have been adjusted to compute the normalized profit before
  tax.

[]

Source: Company information

  The cyclical behavior can be seen in the above historic data, which
  has direct impact on the operating results of PET film producers like
  Polyplex.

  To mitigate such risk, the Company has sought to undertake the
  following:

-   With high productivity levels, cost control measures and a
    diversified product range including various value added products,
    Polyplex believes it has a competitive edge over other producers of
    polyester film in the world which will help it deliver better
    financial results as compared to its peers in the industry.

-   A broad based product offering, comprising of different substrates
    of plastic films, including value-added films cushion the Company
    from demand-supply volatilities and mitigate the risk of over
    dependency on a single product and single industry.

-   Over the years, the Company has been focusing on increasing its
    share of value-added film sales. Value-added films comprise those
    product types which are a specialty either from the
    production/process perspective or from the margin perspective or
    both.

-   Regular investments in metallizing/ downstream capacity helps
    Polyplex to offer new types of products to its customers and further
    improve the mix of specialty film in its sales.

-   Accessing customers operating across the globe in the flexible
    packaging and industrial segments by presenting alternative sourcing
    options from its existing manufacturing locations in Thailand,
    Turkey and USA and its warehousing & distribution set up in Europe,
    Turkey and China, thereby mitigating the risk of over dependency on
    few customers.

-   Diversified manufacturing and distribution base helps to mitigate
    the risk of volatile markets. For Eg: South East Asian markets are
    price-sensitive in nature, whereas developed markets of US, Europe,
    Japan etc are less volatile. Polyplex tries to mitigate such risks
    by having a diversified sales portfolio.

-   Increased focus on new product development through R&D or technology
    acquisitions besides having a strong technical services team is an
    additional differentiator between Polyplex and its competition.

    1.  Risks relating to uncertainty in prices of the product and raw
        material

  The basic raw material for production of PET film is PET resin, which
  is in turn produced from Purified Terephthalate Acid (PTA) and Mono
  Ethylene Glycol (MEG).

  Since the cost of resin is the single largest component of the total
  production cost of Polyester film, the fluctuation in the resin price
  may hurt the Company’s operating margins depending upon the ability of
  the Company to pass the increase in costs to its customers. As selling
  prices are usually negotiated on a monthly / quarterly basis, in a
  balanced demand supply situation, the Company is usually able to
  adjust the selling prices following any changes in the PET resin cost
  and other operating costs.

  The above graph of historic Selling price and Raw material price
  movement demonstrates the correlation between the raw material cost
  and the selling prices. In most of the years the movement in the
  selling prices has been following the trend of the raw material cost
  except for few years where other factors such as major down cycle or
  up cycle in the industry caused by demand-supply imbalance influenced
  the prices.

  The oversupply witnessed in the Polyester film industry witnessed in
  the past has seen improvement in 2017-18 with the demand growth
  continuing to catch up with the oversupply and no further major
  capacity addition. The increase in the crude prices in the recent past
  has impacted our raw material prices and the margins were squeezed for
  certain periods in between due to the time lag in adjusting the
  selling prices. Stability of crude oil at any particular level will
  help in improving business sentiment and enable all players along the
  entire supply chain, in overcoming uncertainty caused by crude oil
  volatility.

  Analysis of historical data shows high correlation between PTA/MEG –
  polyester film prices. The spread between two intermediates would vary
  depending upon the demand-supply situation of the commodity. Also
  sudden and sharp movements in raw material prices may affect the
  correlation for some time.

  The chart below shows the past trend in the pricing of PET film and
  PTA and MEG and the Value addition rate per Kg, in Far East, US and
  Europe respectively:

  []

  []

  []

Source: Industry information

  The above industry data demonstrates that variations in the raw
  material prices by and large tend to get passed on to the
  end-customers. The demand-supply balance of PET films which could vary
  across regions impact margins accordingly. The spread between the raw
  material and PET films, especially over the last few years, has moved
  in a band. PTL’s contracts with some customers provide for a
  quarterly/periodic review in pricing which enables it to adjust for
  any raw material cost movement.

  The Company monitors world and local input price trends carefully and
  determines its procurement plans accordingly. Also, unpredictable
  price movements of raw materials affect all industry participants and
  thus does not put Polyplex in a materially advantageous or
  disadvantageous position vis-à-vis its competitors. The prices of
  downstream products like silicone-coated and extrusion coated films
  are less susceptible to changes in raw material prices and thus helps
  to counter the cyclicality in the standard films.

2.  Risk associated with reliance on only a few raw material suppliers

  The 2 major raw materials for the company, PTA and MEG are well traded
  commodities, and are available from a variety of manufacturers across
  the world.

  In Thailand, the company is meeting its requirement domestically, by
  procuring each of these raw materials 100% from local suppliers,
  thereby enjoying certain distinct advantages of shorter lead
  time/lower raw material inventory carrying levels etc. The company has
  entered into long term / yearly contracts for the supply of the raw
  material to ensure its availability. These contracts also usually have
  a supply guarantee clause to ensure that the supplies remain
  uninterrupted for a reasonable period of time in case of any
  unforeseen circumstances.

  In Turkey, the company procures bulk of PTA & MEG from 2-3 global
  suppliers through long term / yearly contracts and also explores spot
  opportunities for some part of the business as and when the market
  conditions are favorable to leverage on the surplus situation on these
  raw materials from time to time. These contracts guarantee the supply
  of the material except for force majeure situations.

  In USA, the company is sourcing its PTA and MEG 100% from local
  suppliers, thereby enjoying advantages of shorter lead time/lower raw
  material inventory carrying levels etc. The company has entered into
  long term / yearly contracts for the supply of the raw material to
  ensure its availability.

  And as far as the pricing is concerned, since it is formula based
  linked to certain standard international benchmark indices there is
  high degree of transparency.

  For the new Greenfield expansion in Indonesia, the company will have
  options to source the major raw materials locally and/or also consider
  imports from suppliers within this region. Based on the costs and
  benefits and also keeping in mind the consistency and quality of
  supplies, the company would take suitable procurement decisions before
  the start-up of the new line in H2 of 2019.

  For the Extrusion Coated film production, apart from PET film which is
  transferred from the Company’s in house production and also imported
  from third parties or other group companies at arm’s length pricing,
  the other major raw materials are BOPP base film and Coating chemicals
  such as LDPE and EVA. All these are sourced from various manufacturers
  / traders from within Thailand as well as imports from within the
  region.

  The major raw materials for the Cast Polypropylene film production are
  Homo Polymer and Co-Polymer. Homopolymer is being procured locally
  while Co-Polymer is sourced locally as well as imports within the
  region.

  For the Silicone Coating line, the main raw material is PET film and
  Blown PP film which is mostly transferred from the Company’s in house
  production. At times, the PET film is also imported from third parties
  and/ or group companies at arm’s length pricing. Silicone and other
  chemicals are being imported from USA and Europe from leading
  suppliers.

  For Blown PP film line, the main raw material is PP resins
  (Homopolymer, Co-Polymer and PP Color master batches). We are sourcing
  our requirement from local supplies as well as imports from within
  this region.

3.  Risk from environmental regulatory measures

All the production lines of PTL, except for the Polyester resin line, do
not require any environmental impact assessment (EIA). For its Polyester
Resin line, the Company has the required clearance from the regulatory
authorities and utmost care is taken to ensure compliance to the same.

For the new project in Indonesia, the Company has compiled all the
information in relation to the environmental regulatory compliances and
any licenses and/or approvals required for our industry. It foresees no
major risk in arranging the required approvals, prior to the start-up of
the production line,

4.  Risk from competition from existing manufacturers and entry of new
    players

  With consistently rising demand and healthy growth potential, the PET
  film industry attracts new capacity investments from existing large
  manufacturers who are well-established companies with long experience
  in this industry, as well as medium to small producers and new
  entrants with capability to accommodate investment in PET film plants
  and machinery. In this industry, it is quite common for capacity
  additions to happen in a bunch, following a period of attractive
  margins and profits and this disrupts the demand-supply balance for a
  temporary period of time, until demand growth catches up with new
  supplies. In certain cases, as witnessed in the last few years, the
  oversupply is so excessive that the down cycle lasts for a prolonged
  period of 4-6 years. Despite the cyclical nature of this industry, it
  continues to remain an attractive industry with strong fundamentals
  and a steady demand growth.

  Compared to other players, Polyplex’s lower cost of production,
  established quality and technical services, geographically diversified
  manufacturing presence, wide range of products and applications and
  global market reach are some of key factors which make Polyplex one of
  the leading players in this industry. It remains confident of being
  able to compete against both world leading producers as well as
  newcomers.

  The Company has been continuously evaluating other growth options in
  PET film / value added products / related areas like CPP / BOPP/
  Silicone Coated Films at all existing locations in Turkey/Thailand/US,
  while also carefully evaluating growth options in other new
  locations/new product lines. The company has also been evaluating
  possibilities for any acquisitions to further expand its manufacturing
  base and also to improve its cost structure, product offering and
  market reach / penetration. The upcoming Greenfield PET film project
  in Indonesia is another strategic decision to establish a
  manufacturing presence in one of the fastest growing economies and one
  of the largest PET film markets in this region.

5.  Risk from trade barrier measures

  Trade barrier measures imposed by various countries are broadly of two
  major types:

a)  Anti-dumping (AD): An anti-dumping duty can be imposed on imports if
    the ex-factory prices of such imported products are proved to be
    lower than the local selling prices of the similar products in the
    countries of the exporters. For the past few years, the countries
    adopting this measure are the European Union member countries and
    the US against such countries as India, China, Brazil and South
    Korea.

b)  Anti-subsidy: A countervailing duty (CVD) can be imposed if the
    government or any government agency provides any benefits or
    privileges specifically to any company or exporter of such country.

  Such tax measures will cause import duty on the goods produced and
  exported from the targeted countries imposed at such a high rate that
  such goods will carry higher prices and hence have difficulty to
  compete with the products of the rivals. For manufacturers having a
  regional manufacturing base in such locations, such trade defense
  measures can be an opportunity if anti dumping duties are levied
  against imports from the Asian low cost producers.

  The company is taking all safeguards to insulate against the risk
  arising out of anti-dumping duties and other protective barriers
  imposed by the importing countries. A geographically well-diversified
  sales portfolio like ours will help mitigate the adverse fall-out of
  such an action, if any. And by having a local manufacturing presence
  in USA and Europe, it can take advantage of such trade barriers levied
  by these countries against imports from Asian countries.

  As an outcome of the Anti-Dumping investigation initiated by the
  Government of Brazil against UAE, Mexico and Turkey, in respect of PET
  film imports into Brazil, the government of Brazil, w.e.f March, 2012
  had imposed anti-dumping duty of USD 67.44 / MT on the Company’s
  subsidiary in Turkey (Polyplex Europa). The Government had initiated a
  sunset review of such duties in March 2017 for which Polyplex Europa
  offered full cooperation and submitted the required information to the
  investigating authorities. The investigating authorities concluded
  their review in February 2018 and kept the duty rates unchanged @ USD
  67.44 / MT. It should also be noted that it was the minimum rate as
  compared to the rates announced for other countries as well as other
  producers in Turkey. Polyplex Europa’s exports to Brazil are not a
  very significant portion of their overall sales volume and as such,
  there is no major impact from the anti-dumping margin imposed.

  As an outcome of the Antidumping investigation by the Government of
  Indonesia against Thailand, a final Anti Dumping duty of about 2.2% on
  imports from PTL into Indonesia has been levied since December 2015.

  As an outcome of the Anti-Dumping investigation initiated by the
  Government of Korea in 2017, a final Anti Dumping duty of 3.92% on
  imports from PTL into Korea has been levied since November 2017 and
  this will be applicable for a period of 3 years from date of
  applicability.

1.  Risks from future projects

The major risks associated with any new Projects are as below:

-   Market Risk: Since Polyplex has a global reach and an extensive
    marketing and distribution network, the Company does not foresee any
    major risk in developing the markets for its products. With respect
    to the market risk for the Indonesia project, the Company has been
    serving the Indonesian market from Thailand unit for past several
    years and has been able to increase its market penetration over the
    years. As such, the Company sees no major risk in marketing of the
    products from the new line in Indonesia.

-   Competition Risk: The Company believes that its cost structure would
    be globally very competitive and it has the widest product range
    which is one of the major advantages to gain an edge over some of
    the existing producers/new entrants.

-   Project Implementation risk: Due to the experienced Projects team at
    Polyplex, the Company remains confident of successful implementation
    of new projects on time and within Budgeted costs except for
    un-foreseen circumstances. The Company has already deployed key
    members of the Projects team at Indonesia, to oversee the smooth
    implementation of the project.

-   Funding Risk: Long term Debt to the extent of 65-75% of the Project
    cost is generally borrowed by the Company and the balance is funded
    out of internal accruals. Based on the good relationship with
    existing banks and the low gearing ratio, the Company is quite
    confident of raising the required financing for any new future
    Projects at competitive terms and conditions. For the Indonesia
    project, the Company is in the process of contracting term loan of
    up to USD 55 million (or Euro equivalent) and the balance will be
    funded out of Equity investment and/ or inter- co loans from the
    Turkey subsidiaries. Until May, 2018, PTL has already injected IDR
    337.5 billion ( approx. $ 25 million) of Equity into the new
    Indonesia entity.

-   Currency Risk: For any new project, the currency of borrowing is
    decided, based on the projected operational cash flows of the
    project. The currency which has the maximum surplus in the
    operational cash flows is chosen to be the currency for the loan. If
    there are multiple currencies of surplus in operations, the Company
    may also consider borrowing in more than 1 currency (USD and/or
    Euro), depending on the currency exposure in the Project cost. This
    helps to create a natural hedge for the Project expense as well as
    the loan repayments, as and when the repayments start. The company
    also has internal FX guidelines to cover net exposure of Project
    costs, in various currencies by booking appropriate forward
    contracts, so that the risk on the initially estimated overall
    Project cost, on account of currency fluctuations is minimized.

  Apart from all the Project specific risks and their mitigation plans
  as discussed above, the Company would also like to mention here that
  the overall Project risk of any new Project is covered by taking
  appropriate Insurance policies to cover various risks such as Erection
  and Construction all risks, Marine risks, Loss of Profit coverage due
  to delay in Project Start-up etc.

1.  Risk from dependence on the parent company

  As at 31^(st) March, 2018, Polyplex Corporation Ltd. (PCL), through
  direct and indirect shareholding, controls 51% of the paid up shares
  in the Company.

  In the initial 2-3 years of its incorporation, PTL’s core management
  team consisted of persons who were previously employed by PCL and they
  played a vital role in successfully establishing PTL’s operations
  ahead of the schedule and at a lower-than-estimated cost, together
  with ensuring high productivity levels resulting in the Company’s
  ability to produce quality products at a competitive cost. However,
  after about 4-5 years of running, once operations were fully
  stabilized, the company successfully implemented a program for
  reducing the dependence on expatriates by increasing the proportion of
  local Thai staff in operating/managerial positions and has been
  managing the production and operations efficiently thereafter.

  The Company’s present management team is composed of experienced key
  personnel in production, marketing, distribution and
  accounting/finance. It has thus been able to run the business on its
  own without too much reliance on the parent company.

  PTL’s business operations are independent from PCL with respect to
  public offering of equity, borrowing of loans, and other investments
  in the future. The parent company need not request any approval from
  any government bodies except for reporting of significant events to
  two stock exchanges where it is listed, namely Mumbai Stock Exchange
  and National Stock Exchange.

  The Company is confident that there will be no conflict of business
  interest between PCL and PTL on account of the following:

-   It is Polyplex’s policy in business operation that there is an
    equitable distribution of business between the various manufacturing
    units aligned to efficient servicing of customers.

-   The investment in PTL and its subsidiaries is significant as
    compared to PCL’s own assets and hence considered to be the flagship
    company of the Polyplex group. As such, the success of PTL is very
    critical for PCL.

    1.  Risk from sponsor group holding about 51% of total shares

  PTL’s major shareholder is PCL (As of March 31, 2018 the promoter Mr.
  Sanjiv Saraf and related parties control 50.03% in PCL), holding
  17.19%, and Polyplex (Asia) Pte. Ltd. (“PAPL”) which is wholly owned
  by PCL, holding 33.81%, thus in aggregate holding 51% of PTL paid-up
  common shares of Bt. 900 million. Thus, in matters that require a
  three-fourths majority vote of shareholders, the minority shareholders
  can successfully oppose corporate actions undertaken or supported by
  the majority shareholders. However, the parent company will continue
  to play a vital role in determining the Company’s policy and strategic
  direction setting. However, PTL has set up a three-member Audit
  Committee to provide for an audit of the operations and the
  management.

  Besides, PCL is listed on the Stock Exchanges in India and abides by
  the Corporate Governance regulations prevailing for listed companies
  in India.

2.  Foreign exchange risk

  Most of PTL’s products, i.e. about 75-85%, are for exports, which are
  mostly denominated in US dollars and Euro. As against this, raw
  material (PTA & MEG) prices are linked to the US dollar, although
  their payments are done in Thai Baht and there are Long term loan
  related interest payments/loan repayments in USD and Euro. On a
  standalone basis, the company as at March 31^(st) ’18 had Euro loans
  of about 69.2 million and USD loans of about 13.2 million, including
  Euro 63.4 million borrowed from its subsidiary in Turkey for
  prepayment of installments of some of the banks’ term loans and
  working capital loans. There are some expenses which are in Thai Baht,
  i.e. locally procured raw materials, packing materials, salaries,
  utilities and other administrative expenses which have to be settled
  by income from domestic sales and from the surplus income from
  USD/Euro exports. Thus, broadly speaking, PTL has a net surplus US
  dollar and Euro position on the trade front, which can be hedged
  somewhat against repayment of its long-term loans. To the extent
  possible, the company has been trying to create a natural hedge to
  mitigate the risk from currency fluctuations. On an ongoing basis, the
  company also takes forward covers, to cover the net surplus exposure
  in USD and Euro.

  Similarly, the Company’s subsidiary in Turkey has a net surplus Euro
  currency whereas they have certain payments in the local currency,
  which is hedged from time to time by taking appropriate forward
  covers.

  The subsidiary in USA mainly has USD revenues and USD payments, so
  there is a natural hedge. The project financing was also made in USD
  currency. Apart from bank loans taken for project financing and
  working capital financing, the US subsidiary has also taken some
  inter-co loans from Polyplex Europa (PE) for supporting its financing
  requirements. These loans are Euro denominated and the O/S amount of
  the loan at 31^(st) March, 2018 was Euro 42.5 million.

3.  Interest rate risk

  As of March 31, 2018, the Company’s outstanding long term bank loans
  on a consolidated basis were Euro 5.8 million and USD 37.6 million
  whereas outstanding short term loans were USD 17.5 million and Baht
  1,130 million. The USD loans have floating LIBOR based interest rates
  and the Euro loans have floating EURIBOR based rates. Apart from the
  above, the Company in Thailand and the US subsidiary have
  inter-company loans totaling to Euro 105.9 million, pricing of which
  is linked to Floating EURIBOR rates, which gets eliminated in
  consolidation. The floating interest rate may put the Company at a
  risk of rising financial cost if the interest rates move up. There are
  various reasons for interest rate changes like economic growth,
  inflation expectations and unemployment, among others. All these
  factors are external and uncontrollable. However, the company has been
  constantly monitoring the interest rates and will take interest rate
  swaps for converting the liability into fixed rates, if considered
  beneficial.

4.  Risk from overlap of products and markets

  The product portfolio of PCL, PTL, PE and PUL is quite similar. In
  order to mitigate the risk from overlapping of products and markets,
  Polyplex has also evolved an equitable policy for distribution of
  markets, between its Indian, Thailand, Turkey and USA operations based
  on the several factors like product range, delivered cost to customer,
  supply lead times and preferential duty access. Based on the same, PTL
  would mainly serve South East Asia, Asia Pacific, China, and Australia
  & New Zealand. PCL would serve South Asia. Turkey will serve, Europe,
  Africa and CIS/Russian markets. The new line in Indonesia would mainly
  cater to the domestic market, but may also consider exporting some
  volumes to to Korea, Japan, Europe and USA, depending on the Pricing,
  material availability, delivered cost to customer, preferential duty
  access etc. The US manufacturing entity would mainly serve North
  American market. Certain markets which are basically spot markets such
  as Middle East, South America etc may be serviced by either of the
  supply locations depending on the availability of the product and
  other factors such as capacity availability etc.

  The Polyplex group also has a policy on future investments in
  polyester film / related areas between the Company and its parent
  company. Investments in India/SAARC region would be decided and made
  by PCL and its other subsidiaries (excluding the Company) while
  investments In Thailand / ASEAN region as well as other countries
  would be in all likelihood be made by PTL or the subsidiaries in which
  the Company has a major stake. The above is subject to availability of
  Investible cash / ability to borrow debt by the existing / preferred
  Company as per the policy. In line with this Investment policy, the
  investment in Indonesia is fully owned by PTL.

5.  Credit risks

  Credit risk of customers is another significant risk for any business.
  Credit risk refers to the risk of non-payment by debtors. This risk
  increases in case of unsecured or open payment terms. The Company
  manages the risk by adopting appropriate credit control policies and
  procedures. The Company has a well-defined and robust internal credit
  management system to monitor unsecured sales. The Company also has a
  global credit insurance cover to secure non-payment risks of
  customers. As such, most of the sales, which are on credit are secured
  either through a Letter of credit issued by the customer or secured
  under credit insurance coverage. The Company also takes extra caution
  in selection of any new customers and granting of credit.

4.  Operating Assets

    1.  Core assets of the Company as of March 31, 2018

+-------------------------+-----+----------+---------------------------+
| Item                    | Ow  | Net book | Encumbrance               |
|                         | ner | value*   |                           |
|                         |     |          |                           |
|                         | s   | (Bt.     |                           |
|                         | hip | thousand |                           |
|                         |     | )        |                           |
+-------------------------+-----+----------+---------------------------+
| Land and improvement of | PTL | 46,162   | Land under title deeds    |
| land under title deeds  |     |          | No. 5626, 5627, and 5628  |
| no. 5626 (11 rai 18.6   | PTL | 57,019   | accommodating building    |
| sq.wah) 5627 (9 rai 3.4 |     |          | and machinery /equipment  |
| sq.wah) and 5628(8 rai  | PTL | 93,446   | of the Plain PET Film and |
| 28.9 sq.wah) totaling   |     |          | Metallized film lines     |
| 28 rai 50.9 sq.wah,     |     |          | along with Polyester      |
| located at No. 60/24,   |     |          | Chips plant were          |
| Moo 3, Siam Eastern     |     |          | mortgaged with Thanachart |
| Industrial Park,        |     |          | Bank Plc, TMB Bank Plc,   |
| Pluakdaeng District,    |     |          | Bangkok Bank Plc and Bank |
| Rayong Province         |     |          | of Ayudhya Plc as         |
| 21140,Land under title  |     |          | security against          |
| deed no. 1346 (8 rai 1  |     |          | sanctioned long term loan |
| nang 77 sq.wah) located |     |          | facility of Euro 14       |
| in Pluakdaeng District, |     |          | million and USD 27        |
| Rayong Province 21140   |     |          | million and on a second   |
|                         |     |          | charge basis to secure    |
| Land under title deed   |     |          | the short term working    |
| no 5670(11 rai 79       |     |          | capital limits of Thai    |
| sq.wah) 5671 (11 rai 3  |     |          | Baht 85 million each to   |
| nang 55 sq.wah) 5672    |     |          | TMB Bank Plc and          |
| (12 rai 2 nang 20       |     |          | Thanachart Bank Plc.      |
| sq.wah) totaling 35 rai |     |          | Although the term loans   |
| 2 nang 54.80 sq.wah     |     |          | are fully repaid, the     |
| located at No 60/91,    |     |          | working capital lines of  |
| Moo 3, Siam Eastern     |     |          | 2 banks are secured on a  |
| Industrial Park,        |     |          | second charge basis. The  |
| Pluakdaeng District,    |     |          | Company is in the process |
| Rayong Province 21140   |     |          | of discussing the release |
|                         |     |          | of mortgage with the 2    |
| Land under Title deed   |     |          | working capital lenders.  |
| No.5617 ( 5 rai 3 Nang  |     |          | The title deed 1346 is    |
| 48.4 Sq.Wah) No. 5618   |     |          | vacant until now and is   |
| (5 Rai 3 Nang           |     |          | also free of any charge.  |
| 71.7Sq.Wah) No. 5621 (5 |     |          |                           |
| Rai 3 Nang 42.4Sq.Wah)  |     |          | Land under title deeds    |
| No. 5622 (5 Rai 3 Nang  |     |          | No. 5670, 5671 & 5672     |
| 60.3 Sq.Wah) No.5623 (5 |     |          | have been mortgaged with  |
| Rai 3 Nang 78.2Sq.Wah)  |     |          | Bangkok Bank Plc and Bank |
| and No. 5624 (6 Rai     |     |          | of Ayudhya Plc as         |
| 65.5 Sq.Wah) Totaling   |     |          | security against USD 16.5 |
| 35 Rai 2 Nang 65.5      |     |          | million sanctioned for    |
| Sq.Wah located 60/109,  |     |          | the Silicone Coating Line |
| Moo 3,at Siam Eastern   |     |          | and This land also        |
| Industrial Park ,       |     |          | accommodates the          |
| Pluakdaeng District,    |     |          | Extrusion Coating line.   |
| Rayong Province 21140   |     |          | However, the buildings of |
|                         |     |          | the Extrusion Coating     |
|                         |     |          | line are free of any      |
|                         |     |          | charge. The recycling     |
|                         |     |          | project implemented in    |
|                         |     |          | 2013 under the Company’s  |
|                         |     |          | subsidiary EcoBlue        |
|                         |     |          | Limited is located on a   |
|                         |     |          | portion of title deed     |
|                         |     |          | 5671 & 5672, leased by    |
|                         |     |          | the Company to EcoBlue    |
|                         |     |          | Limited.                  |
|                         |     |          |                           |
|                         |     |          | Land under title deeds    |
|                         |     |          | No. 5617, 5618, 5621,     |
|                         |     |          | 5622, 5623 & 5624 have    |
|                         |     |          | been mortgaged with       |
|                         |     |          | Bangkok Bank Plc and TMB  |
|                         |     |          | Bank Plc as security      |
|                         |     |          | against USD 60 million    |
|                         |     |          | sanctioned for the Thick  |
|                         |     |          | PET Film Line.            |
+-------------------------+-----+----------+---------------------------+
| Building and            | PTL | 858,874  | Book value amounting to   |
| improvement             |     |          | Baht 789 million is       |
|                         |     |          | pledged with banks        |
+-------------------------+-----+----------+---------------------------+
| Machinery and equipment | PTL | 3        | Book value amounting to   |
|                         |     | ,050,962 | Baht 2,650 million is     |
|                         |     |          | pledged with banks        |
+-------------------------+-----+----------+---------------------------+
| Office equipment and    | PTL | 43,452   | None                      |
| furniture               |     |          |                           |
+-------------------------+-----+----------+---------------------------+
| Vehicles                | PTL | 526      | None                      |
+-------------------------+-----+----------+---------------------------+
| Assets under            | PTL | 18,409   | None                      |
| co                      |     |          |                           |
| nstruction/installation |     |          |                           |
+-------------------------+-----+----------+---------------------------+
| Total                   |     | 4        |                           |
|                         |     | ,168,850 |                           |
+-------------------------+-----+----------+---------------------------+

*Including inventory of Capital stores & spares reclassified to fixed
assets

2.  Investment in subsidiary company

  PTL’s wholly owned subsidiary Polyplex (Singapore) Pte. Ltd. (PSPL),
  an investment holding company, holds 100 % stake in Polyplex Europa
  Polyester Film Sanayi Ve Ticaret Anonim Şirketi (PE), a company
  incorporated in Turkey which is manufacturing and distributing PET
  films. PTL monitors and supervises the operations of PSPL by having
  couple of representatives who sit on the latter’s board of directors.
  PE has further invested 100% in a trading company in Turkey – Polyplex
  Paketleme Çözümleri Sanayi ve Ticaret A.Ş (PP) for the distribution of
  the company’s products in the Turkey region.

  PSPL also holds 100% stake in Polyplex (Trading) Shenzhen Co. Ltd,
  which is a trading company set up in China in the year 2009 and which
  started commercial operations in 2010.

  In January 2006, PTL had acquired 80.24% stake in Polyplex (Americas)
  Inc., to enhance its distribution network in the North American
  market. PCL, PTL’s parent company also had a 9.88% stake while the
  balance 9.88% was held by a foreign US-based shareholder. In January
  2013, PTL acquired the minority stake from the shareholders to make PA
  its 100% subsidiary. Post this acquisition, PA was merged with
  Polyplex USA LLC w.e.f 31st January, 2013.

  In 2011, PTL invested in a 100% owned subsidiary Polyplex America
  Holdings Inc. (PAH), an Investment holding company, which further
  invested in Polyplex USA LLC (PUL) which is 100% owned subsidiary of
  PAH, the company under which a PET Thin Film line and PET Resin
  project have been commissioned.

  In 2013, PTL invested 100% in a trading company in Netherlands –
  Polyplex Europe B.V, which will be engaged in the warehousing and
  distribution of different products of the Company in the European
  market.

  As a sustainability initiative, the Company has invested in a project
  to recycle and provide sustainable solution for film based process
  waste. The project was implemented in Thailand in December 2013, under
  the Company’s subsidiary - EcoBlue Limited, in which the Company is
  holding 66.5% stake.

  The Polyplex group also has a policy on future investments in
  polyester film / related areas between the Company and its parent
  company. Investments in India/SAARC region would be decided and made
  by PCL and its other subsidiaries (excluding the Company) while
  investments In Thailand / ASEAN region as well as other countries
  would be in all likelihood be made by PTL or the subsidiaries in which
  the Company has a major stake. The above is subject to availability of
  Investible cash / ability to borrow debt by the existing / preferred
  Company as per the policy.

5.  Legal Dispute

NONE

6.  General Information

The company Polyplex (Thailand) Public Company Limited

  Stock Exchange of Thailand symbol PTL

  Registered Head office 75/26, Ocean Tower II, 18^(th) Floor, Sukhumvit
  Soi 19, Kwaeng North Klongtoey, Khet Wattana,

  Bangkok - 10110

Telephone (662) 665-2706-8

Facsimile (662) 665 2705

  Factory -1 Siam Eastern Industrial Park, 60/24, Moo 3, Tambol
  Marbyangporn, Amphur Pluak Daeng, Rayong- 21140

  Factory -2 Siam Eastern Industrial Park, 60/91 Moo 3, Tambol
  Marbyangporn, Amphur Pluakdaeng , Rayong 21140

  Factory -3 Siam Eastern Industrial Park, 60/109,Moo 3, Tambol
  Marbyangporn, Amphur Pluakdaeng , Rayong 21140

  Type of Business Manufacturer of Polyester Thin Film (Plain and
  Metallized), Polyester Chips, Polyester Thick Film (Plain), Extrusion
  Coated film, Cast Polypropylene Film (Plain and Metallized), Silicone
  Coated Film and Blown PP Film

Company registration number 0107547000729

Telephone (66) 38 627 074 - 99

Facsimile (66) 38 627 070

  Website http://www.polyplexthailand.com

Registered Capital Baht 900,000,000

Common Shares 900,000,000 shares

Par Value Baht 1.00 per share

Paid-up Capital Baht 900,000,000

  Number of Employees 1,081 including subsidiaries in Turkey, USA and
  China, and 651 in Thailand..

Subsidiaries in which the company holds more than 10% share – As at
31^(st) March, 2018

+----------------------+----------+-------+---------+--------+-------+
| Company Name and     | Business | Regis | Issued  | %      | Type  |
|                      |          | tered | & Paid  |        | of    |
|                      |          |       | Up -    |        | S     |
|                      |          |       | No. of  |        | hares |
|                      |          |       | shares  |        |       |
+----------------------+----------+-------+---------+--------+-------+
| Address              | Type     | Ca    | held by | shareh |       |
|                      |          | pital | the     | olding |       |
+----------------------+----------+-------+---------+--------+-------+
|                      |          | (sh   | Company |        |       |
|                      |          | ares) |         |        |       |
+----------------------+----------+-------+---------+--------+-------+
|                      |          |       |         |        |       |
+----------------------+----------+-------+---------+--------+-------+
|                      |          |       |         |        |       |
+----------------------+----------+-------+---------+--------+-------+
| Polyplex (Singapore) | In       | 10    | 100,000 | 100%   | C     |
| Pte Ltd.             | vestment | 0,000 |         |        | ommon |
|                      | Holding  |       |         |        |       |
+----------------------+----------+-------+---------+--------+-------+
| 61, Club Street,     | Company  | 30    | 39,100  | 100%   | Prefe |
|                      |          | 0,000 |         |        | rence |
+----------------------+----------+-------+---------+--------+-------+
| Singapore-069436     |          |       |         |        |       |
+----------------------+----------+-------+---------+--------+-------+
|                      |          |       |         |        |       |
+----------------------+----------+-------+---------+--------+-------+
|                      |          |       |         |        |       |
+----------------------+----------+-------+---------+--------+-------+
| Polyplex Europa      | Manuf    | 1,50  | 1,      | 100%   | C     |
| Polyester Film*      | acturing | 0,000 | 500,000 |        | ommon |
|                      | Company  |       |         |        |       |
+----------------------+----------+-------+---------+--------+-------+
| Sanayi Ve Ticaret    |          |       |         |        |       |
| A.S.                 |          |       |         |        |       |
+----------------------+----------+-------+---------+--------+-------+
| Karamehmet Mah.      |          |       |         |        |       |
| Avrupa Serbest       |          |       |         |        |       |
| Bolgesi, ,           |          |       |         |        |       |
+----------------------+----------+-------+---------+--------+-------+
| 3 Sokak No. 4 Ergene |          |       |         |        |       |
| , Tekirdag, TURKEY   |          |       |         |        |       |
+----------------------+----------+-------+---------+--------+-------+
|                      |          |       |         |        |       |
+----------------------+----------+-------+---------+--------+-------+
| Polyplex Trading     | Trading  | $400, | $40     | 100%   | C     |
| (Shenzhen) Co. Ltd*  | &Dist    | 000** | 0,000** |        | ommon |
|                      | ribution |       |         |        |       |
| Room.1309,A block,   | Company  |       |         |        |       |
| Galaxy Century       |          |       |         |        |       |
| Building, Caitian    |          |       |         |        |       |
| South Rd., Futian    |          |       |         |        |       |
| District ,Shenzhen   |          |       |         |        |       |
|                      |          |       |         |        |       |
| People’s Republic of |          |       |         |        |       |
| China                |          |       |         |        |       |
+----------------------+----------+-------+---------+--------+-------+
| Polyplex (Americas)  | In       | 1     | 9,324   | 100%   | C     |
| Holding Inc.         | vestment | 0,000 |         |        | ommon |
|                      | and      |       |         |        |       |
| 251 Little Falls     | Trading  |       |         |        |       |
| Drive, Wilmington,   | &        |       |         |        |       |
| DE 19808             | Dist     |       |         |        |       |
|                      | ribution |       |         |        |       |
|                      | Company  |       |         |        |       |
+----------------------+----------+-------+---------+--------+-------+
| Polyplex USA LLC***  |          | ****  | $46,    | 100%   | C     |
|                      |          |       | 616,500 |        | ommon |
+----------------------+----------+-------+---------+--------+-------+
| 641 South Lawrence   | Manuf    |       |         |        |       |
| Street, Montgomery,  | acturing |       |         |        |       |
| AL 36004             | Company  |       |         |        |       |
+----------------------+----------+-------+---------+--------+-------+
| EcoBlue Limited      | Manuf    | 1,06  | 708,225 | 66.5%  | C     |
|                      | acturing | 5,000 |         |        | ommon |
| 60/91, Moo 3 Siam    | Company  |       |         |        |       |
| Eastern Industrial   |          |       |         |        |       |
| Park, Marbyangporn   |          |       |         |        |       |
| Sub-district, Pluak  |          |       |         |        |       |
| Daeng District,      |          |       |         |        |       |
| Rayong,              |          |       |         |        |       |
|                      |          |       |         |        |       |
| THAILAND             |          |       |         |        |       |
+----------------------+----------+-------+---------+--------+-------+
| Polyplex Paketleme   | Trading  | 2     | 20,000  | 100%   | C     |
| Çözümleri Sanayi ve  | &Dist    | 0,000 |         |        | ommon |
| Ticaret A.Ş#         | ribution |       |         |        |       |
|                      | Company  |       |         |        |       |
| Muhittin             |          |       |         |        |       |
| Mahallesi,Çetin Emeç |          |       |         |        |       |
| Bulvarı,Acun         |          |       |         |        |       |
| Sokak,Cemil Bayram   |          |       |         |        |       |
| Apt.,No:7/1          |          |       |         |        |       |
| Ç                    |          |       |         |        |       |
| orlu/Tekirdağ_Turkey |          |       |         |        |       |
+----------------------+----------+-------+---------+--------+-------+
| Polyplex Europe B.V. | Trading  | 3     | 2,000   | 100%   | C     |
|                      | &Dist    | 0,000 |         |        | ommon |
| Zuidplein 126WTC,    | ribution |       |         |        |       |
| Toren H,             | Company  |       |         |        |       |
|                      |          |       |         |        |       |
| 1077 XV Amsterdam    |          |       |         |        |       |
| NETHERLANDS          |          |       |         |        |       |
+----------------------+----------+-------+---------+--------+-------+
| PT. Polyplex Films   | Manuf    | 5     | 20,249  | 9      | C     |
| Indonesia            | acturing | 4,000 |         | 9.995% | ommon |
|                      | Company  |       |         |        |       |
| Jl. Modern Industri  |          |       |         |        |       |
| XVIII Blok AN No. 7, |          |       |         |        |       |
| Nambo Udik, Cikande, |          |       |         |        |       |
| Serang Regency,      |          |       |         |        |       |
| Banten, Indonesia    |          |       |         |        |       |
| -42186)              |          |       |         |        |       |
+----------------------+----------+-------+---------+--------+-------+

* Indirect holding via PSPL

**$ 400,000 refers to the registered & paid up Share capital of Polyplex
Trading (Shenzhen) Co. Ltd. There is no concept of number of shares or
par value per share in People’s Republic of China.

*** Indirect Holding via Polyplex America Holdings Inc.

****There are no shares of Polyplex USA LLC. Capital contribution from
PAH is termed as Members Unit and it is 100% by PAH.

# Indirect holding via Polyplex Europa Polyester Film Sanayi Ve Ticaret
Anonim Sirketi

Other references

(a) Registrar

Name Thailand Securities Depository Co., Ltd.

Address 93 Ratchadaphisek Road, Dindaeng,

  Bangkok 10400, Thailand

Telephone (662) 009-9000

Facsimile (662) 009-9991

(b) Trustee

N/A

(c) Auditing Firm

1)  Name EY Office Limited

Address 33^(rd) Floor, Lake Rajada Office Complex,

  193/136-137 Rajadapisek road

  Near Queen Sirikit National Convention Centre

  Bangkok 10110, Thailand

Telephone (662) 264-0777

Facsimile (662) 661-9190

  Auditors* Mr. Chayapol Suppasedtanon (CPA No. 3972) and/or Ms. Pimjai
  Manitkajohnkit (CPA No. 4521) and/or Ms. Sumana Punpongsanon (CPA No.
  5872) and /or Ms. Rosaporn Decharkom (CPA No. 5659) and/or Ms.
  Rungnapa Lertsuwankul (CPA No. 3516) and/or Mr. Sophon Permsirivallop
  (CPA No. 3182)

* Auditors of the company for the FY 2017-18

(d) Legal Advisors

Name Linklaters (Thailand) Ltd

Address 20^(th) Floor, Capital Tower,

  All Seasons Place, 87/1 Wireless Road

  Bangkok 10330, Thailand

Telephone (662) 305 8000

Facsimile (662) 305 8010

Contact person Mr. Pichitpon Eammongkolchai

Name Baker & McKenzie Ltd.

Address 990 Abdulrahim Place, 5^(th) floor and 22^(nd) -25^(th) Floors,

  Rama IV Road,Silom, Bangrak

  Bangkok 10500, Thailand

Telephone (662) 636-2000

Facsimile (662) 636-2110

Contact person Mr. Youththachai Vitheekol

(e) Advisor or manager under management contract

N/A