ptl: polyplex (thailand) public company limited | annual

Content

Message from the Chairman 4Board of Directors 6The Board of Director’s Report on its Responsibility to Financial Statements 7

Audit Committee Report 2012-13 8Key Financial Indicators 10Financial Highlights 11

General Information 12Business Overview 15Risk Factors 45Future Projects 57Legal Dispute 61Shareholding Structure & Management 62Good Corporate Governance & Internal Control 76

Financial Position and Operational Performance 86Audited Financial Statements 110Information of Director and Management of the Company 155

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Production facility of Polyplex (Thailand) Plc, at Siam Eastern Industrial Park, RAYONG

The new Thick PET Film line under implementation in Thailand

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Annual Report �0�� - �0�3

Polyplex (Thailand) Public Company Limited

� Polyplex (Thailand) Public Company Limited

THE NEWLY SET UP POLYESTER THIN FILM LINE IN USA

3

3

Production facilities at Polyplex Europa Polyester Film Sanayi Ve Ticaret A.S, TURKEY.

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Valued Shareholders, the year gone by was a challenging year for the Polyester Film industry. As anticipated, the new capacities that were added following the extraordinary margins witnessed by the industry in the year 2010-11, created a situation of oversupply and the margins have contracted to historical lows. This has resulted in a sharp decline in the company’s profitability along with a drop in sale revenues. Sales at Baht 9.23 billion were lower by 9.0% as compared to the previous year reflecting the compression in selling prices despite similar volumes. Profit after tax of Baht 374 million was lower by almost 72% over last year. The Company, however, remains confident about the potential of the polyester film industry in the long run, and is committed to all the capital investments announced over the last couple of years. It gives me immense pleasure to share with you that all the projects in Thailand, USA and Turkey are in the last phase of implementation, and would be commencing commercial operations within 2013. While the Company continues to increase its capacity in its core business of Thin Polyester film, through the new manufacturing facility in USA, it also continues to diversify its product range with the Thick Polyester film line in Thailand, Bottle grade PET resin plant in Turkey, Blown PP line in Thailand and the second line for Extrusion Laminated products in Thailand. All these investments would help the Company to diversify Country/Customer/Product risks and bring more stability in earnings. As a part of its commitment to reduce the impact of plastic waste on the environment, the Company has decided to invest in a recycling plant in Thailand, under its subsidiary, EcoBlue Limited. This company would be recycling the process waste of the film industry, including coated films and would strive for finding sustainable solutions for post consumer film waste. Despite doubling its fixed asset base over the last 2 years to about USD 400 million without any dilution in equity, the Company’s balance sheet remains strong with enough liquidity and conservative leverage. Notwithstanding the tough market conditions expected over the next 12-18 months as well as the cash requirement for the ongoing projects, the Directors have proposed dividend of THB 0.14 per share for the year 2012-13 @ 30% of the Company’s consolidated profits. The Company is committed to its social responsibilities and continues to engage in various activities at all locations to help maintaining the society, in which it operates. On behalf of the Board, I would like to thank all the shareholders, business partners and the employees of the Company for their continued support and hard work without which we would not have been able to be among the fastest growing companies in our industry.

Message from the Chairman

Mr.Manu LeopairoteChairman

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Board of Directors

Mr. Manu Leopairote Chairman - Board

and Audit Committee

Mr. Sanjiv Saraf Vice Chairman

Mr. Rohit Kumar Vashistha

Managing Director

Mr. Praphad Phodhivorakhun

Director

Mr. Pranay Kothari Director

Mr. Manish Gupta Director

Dr. Virabongsa Ramangkura. Ph.D.

Director and Member - Audit Committee

Mr. Shiraz Erach Poonevala

Director and Member - Audit Committee

� Polyplex (Thailand) Public Company Limited

7

The Board of Directorsû Report on its Responsibility to Financial Statements

To the Shareholders of Polyplex (Thailand) Public Company Limited

In recognition of its duties and responsibilities and in compliance with good corporate

governance principles, the Board of Directors has ensured that the financial statements and

financial information appearing in the annual report are accurate, complete and adequate. The

financial statements are in compliance with the generally accepted accounting practices in

Thailand and follow accounting standards and practices that are appropriate to the nature of

business. To ensure reasonable confidence in using these financial statements, the Board has

instituted and maintained internal control systems, subject to periodic review by the Audit

committee and reported to the Board.

The company auditor has applied generally accepted auditing standards in auditing the

companyûs financial statements for 2012-13 and is of the view that these financial statements

present fairly, in all respects, the financial standing, results of the operations and cash flows for

the company, in accordance with generally accepted accounting principles.

Mr. Manu Leopairote Mr. Rohit Kumar Vashistha

Chairman Managing Director

8 Polyplex (Thailand) Public Company Limited

ANNUAL REPORT 2012 - 2013

To the Shareholders of Polyplex (Thailand) Public Co., Ltd. Following the companyûs transformation into a public limited company on August 11, 2004, the shareholdersû meeting held on September 2, 2004 decided to constitute an Audit Committee comprising of three independent directors with knowledge, expertise and experience in finance & accounting, industry and business. The appointees were Mr. Manu Leopairote (Chairman of the Audit Committee), Dr. Virabongsa Ramangkura and Mr. Shiraz Erach Poonevala. The Audit Committee performed duties under the delegation of authority set out by the Board of Directors. Among the Audit Committeeûs responsibilities are to review the quarterly / annual financial results of the company, supervise whether the company was in compliance with the rules and regulations of the Stock Exchange of Thailand (SET) and Securities Exchange Commission (SEC), ensure the transparency of the accounting system, review of internal control systems and promote good corporate governance practices. In the financial year ended March 31, 2013, a total of six Audit Committee meetings were held. The Committeeûs work can be summarized as below: 1. Reviewed and approved the quarterly and yearly financial statements of the company and its

subsidiaries to ensure compliance with the generally accepted accounting standards and disclosure of key information before proposing them for the Boardûs approval as also prior to submission to SEC and SET. After due consideration and discussion, it is the opinion of the Committee that the above mentioned financial statements are presented fairly in accordance with generally accepted accounting principles and sufficiently disclosed.

2. Reviewed and monitored the corporate compliance and internal control systems as also risk mitigation measures. The Committee believes that the companyûs internal control systems are adequate.

3. Reviewed the disclosure of information on transactions between the company and its affiliates or any transactions, which may have been perceived as potentially causing conflicts of interest.

4. Reviewed and approved the Final Dividend payment for the financial year ended on 31st March 2012 and recommended to the Board for their consideration and approval

5. Reviewed and approved the Annual budget for financial year 2012-13 for the Company and its subsidiaries.

6. Considered and recommended to the Board of Directors to appoint Mr. Termphong Opanaphan (CPA No. 4501) and/or Mr. Supachai Phanyawattano (CPA No. 3930) and/or Ms. Chonlaros Suntiasvaraporn (CPA No. 4523) of Ernst & Young, as the auditors of the Company for the FY 2012-13.

7. Reviewed the proposal for Polyplex (Thailand) Plc to invest up to THB 25 million, for 80% ownership in a Film waste Recycling Plant in Thailand and recommended to the Board for their consideration and approval.

Audit Committee Report - 2012-13

9

8. Reviewed the proposal for acquisition of 19.76% of equity shares of Polyplex (Americas) Inc. (çPAé), USA, 9.88% ( 25,000 shares @ USD 12/share or total of USD 300,000) from Polyplex Corporation Ltd (çPCLé) and 9.88% (25,000 shares @ USD 12/share or total of USD 300,000) from the unrelated minority shareholder and the acquisition of Preference shares (32,000 shares @ USD5/Share) from the unrelated minority shareholder and recommended to the Board for their consideration and approval.

9. Reviewed the proposal for 67% acquisition by Polyplex Europa Polyester Film Sanayi Ve Ticaret A.S.(çPEé), Turkey, of the shares of Polyplex Resins Sanayi Ve Ticaret A.S (PR), from Polyplex (Asia) Pte Ltd (PAPL) and recommended to the Board for their consideration and approval.

10. Reviewed the proposal to invest in a PET Bottle Grade Resin line at Polyplex Resins Sanayi Ve Ticaret A.S (PR) and recommended the same to the Board for approval.

11. Reviewed and recommended to the Board of Directors for their approval, an Investment of up to Euro 3 million by Polyplex (Thailand) Plc and/or any of its wholly owned subsidiaries, in setting up a distribution company in EU - Netherlands

12. Reviewed and recommended to the Board of Directors for their approval, a Corporate Guarantee from Polyplex Europa Polyester Film Sanayi ve Ticaret A.S. (PE), for Euro 50.25 million or 67% of the total Working Capital line of Euro 75 million, from various banks, for Projects as well as for general working capital requirement post start up of the project.

13. Reviewed the proposal to invest Equity of Euro 247,941(67% of required Capital infusion) by Polyplex Europa Polyester Film Sanayi ve Ticaret A.S.,(PE) in Polyplex Resins Sanayi ve Ticaret A.S. (PR).

14. Reviewed and recommended to the Board of Directors for their approval, a Corporate Guarantee from Polyplex Europa Polyester Film Sanayi ve Ticaret A.S. (PE), for Euro 27.5 million (which is 67% of the Long term loan of Euro 41 million), to be taken by Polyplex Resins Sanayi ve Ticaret A.S. (PR) for the Project financing.

15. Reviewed and recommended to the Board of Directors for their approval, a Corporate Guarantee from Polyplex (Thailand) Plc, for the working capital line of Baht 15 million, of its subsidiary, EcoBlue Ltd.

Name Position Signature Mr. Manu Leopairote Board Chairman and Audit Committee Chairman Dr. Virabongsa Ramangkura Audit Committee Member Mr. Shiraz Erach Poonevala Audit Committee Member



Key Financial Indicators

EBITDA

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

2006

-0720

07-08

2008

-0920

09-10

2010

-1120

11-12

2012

-13

2006

-0720

07-08

2008

-0920

09-10

2010

-1120

11-12

2012

-13

EBIT

DAin m

illion

bah

t

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

EBIT

DA m

argin

(%)

EBITDA - in million BahtEBITDA margin (%)

Net Profits and EPS

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Financial Year

Net P

rofit

sin m

illion

bah

t

0.00

1.00

2.00

3.00

4.00

5.00

6.00

EPS

-Bah

t/Sha

re

Net Profits EPS

2006

-0720

07-08

2008

-0920

09-10

2010

-1120

11-12

2012

-13

Financial YearTotal Revenues Net Profit margin (%)

2006

-0720

07-08

2008

-0920

09-10

2010

-1120

11-12

2012

-13

Financial YearTotal Assets Return on assets %

Total Revenues

1,000

2,500

4,000

5,500

7,000

8,500

10,000

11,500

Tota

l Rev

enue

sin m

illion

bah

t

0%

5%

10%

15%

20%

25%

30%

35%

40%

Net P

rofit

mar

gin

(%)

Total Assets

1,000

2,500

4,000

5,500

7,000

8,500

10,000

11,500

13,000

Tota

l Ass

ets

in m

illion

bah

t

0%

5%

10%

15%

20%

25%

30%

35%

40%

Retu

rn o

n As

sets

(%)

11

2008-09 2009-10 2010-11 2011-12 2012-13

Progression (Thousand Baht)

Net Sales 6,859,738 7,125,366 11,183,174 10,143,111 9,230,018

Total Revenues 7,062,825 7,299,520 11,320,169 10,263,808 9,495,185

Gross Profit 1,800,785 1,731,011 4,680,656 2,311,548 1,355,850

Net Profit (Loss) 1,041,966 1,039,386 3,882,885 1,357,608 373,971

Total Assets 8,880,550 8,866,744 11,932,901 11,938,970 16,456,565

Total Liabilities 4,284,324 3,854,26 3,570,196 3,478,368 8,267,306

Total Shareholderûs equity 4,596,226 5,012,48 8,362,705 8,460,602 8,189,259

Financial Ratios*

Net Profit Margin (%) 14.75% 14.24% 34.30% 13.23% 3.94%

Return on Equity (%) 23.44% 21.72% 58.26% 16.14% 4.49%

Return on Assets (%) 12.13% 11.71% 37.34% 11.37% 2.63%

Per Share Data (Baht)

No. of shares 800,000,000 800,000,000 800,000,000 800,000,000 800,000,000

Dividend per share (Baht) 0.52 0.52 1.94 0.52 0.14*

Earnings per share 1.30 1.30 4.85 1.70 0.47

Par value 1.00 1.00 1.00 1.00 1.00

Note: Above figures and ratios are on consolidated basis, including the Companyûs subsidiaries in

USA, Turkey, Singapore, China and Thailand

* Dividend of Bt 0.14 per share as proposed to the Annual General Meeting of Shareholders

2013 for their approval.

1. Financial Highlights



2. General Information

2.1 The company Polyplex (Thailand) Public Company Limited

Stock Exchange of Thailand symbol PTL

Registered Head office 75/26, Ocean Tower II, 18th 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), and Silicone Coated Film

Company registration number 0107547000729

Telephone (66) 38 891 352-4

Facsimile (66) 38 891 358

Website http://www.polyplexthailand.com

Registered Capital Baht 960,000,000

Common Shares 960,000,000 shares

Par Value Baht 1.00 per share

Paid-up Capital Baht 800,000,000

Number of Employees 999 including subsidiaries in Turkey, USA and China,

and 577 in Thailand.

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2.2 Subsidiaries in which the company holds more than 10% share - As at 31st March, 2013

Company Name and Business Registered No. of shares % Type of Address Type Capital held by the shareholding Shares (shares) Company Polyplex (Singapore) Pte Ltd. Investment 100,000 100,000 100% Common 61, Club Street, Holding 300,000 39,100 100% Preference Singapore-069436 Company Polyplex Europa Polyester Film* Manufacturer 1,500,000 1,500,000 100% Common Sanayi Ve Ticaret A.S. Avrupa of Polyester Serbest Bolgesi, 132, Ada, 7 Parsel, Film & Velimese Mevkii, Corlu, Turkey Polyester chips Polyplex Trading (Shenzhen) Distribution $400,000** $400,000** 100% Common Co. Ltd* Room.1309, A block, Company Galaxy Century Building, Caitian South Rd., Futian District, Shenzhen Peopleûs Republic of China Polyplex (Americas) Holding Inc. Investment 10,000 5,924 100% Common Corporation Trust Center Holding 1209 Orange Street Wilmington, Company New Castle County, Delaware - 19801 Polyplex USA LLC*** Manufacturing **** $29,458,824 100% Common 3001 Mallard Fox Drive NW Company Decatur, Alabama - 35601 EcoBlue Limited Manufacturing 1,065,000 852,000 80% Common 60/91, Moo 3 Siam Eastern Company Industrial Park, Marbyangporn Sub- district, Pluk Daeng District, Rayong, THAILAND Polyplex Resins Sanayi Ve Ticaret Manufacturing 4,049,686 2,713,290 67% Common Anonim Sirketi# Company Avrupa Serbest Bolgesi, 132, Ada, 21 Parsel, Velimese Mevkii, Corlu, Turkey * 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 Peopleûs Republic of China. *** Indirect Holding via Polyplex Americas Holding 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



2.3 Other references (a) Registrar Name Thailand Securities Depository Co., Ltd. Address 62, The Stock Exchange of Thailand Building 4th, 6th-7th Floor, Rachadapisek Road, Klongtoey, Bangkok 10110 Telephone (662) 229-2800, (662) 654-5599 Facsimile (662) 359-1259

(b) Trustee N/A

(c) Auditing Firm 1) Name Ernst & Young Address 33rd Floor, Lake Rajada Office Complex, 193/136-137 Rajadapisek road Near Queen Sirikit National Convention CentreBangkok 10110, Thailand Telephone (662) 264-0777 Facsimile (662) 661-9190 Auditors* Mr. Termphong Opanaphan (CPA No. 4501) and/or Mr. Supachai Phanyawattano (CPA No. 3930) and/or Ms. Chonlaros Suntiasvaraporn (CPA No. 4523) * Auditors of the company for the FY 2012-13

(d) Legal Advisors Name Allen & Overy (Thailand) Co. Ltd. Address 22nd Floor, Sindhorn Tower III, 130-132 Wireless Road, Lumpini, Pathumwan, Bangkok 10330, Thailand Telephone (662) 263-7600 Facsimile (662) 263-7699 Contact person Mr. Arkrapol Pichedvanichok Ms. Somporn Manodamrongtham

Name Baker & McKenzie Ltd. Address 990 Abdulrahim Place, 5th floor and 22nd -25th Floors, Rama IV Road,Silom, Bangrak Bangkok 10500, Thailand Telephone (662) 636-2000 Facsimile (662) 636-2110 Contact person Mr. Wittaya Luengsukcharoen

Name Linklaters (Thailand) Ltd Address 20th 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

(e) Advisor or manager under management contract N/A

15

3.1 Company profile and key changes and developments Polyplex (Thailand) Plc. (çPTLé or çthe Companyé) 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. The Company is promoted by Polyplex Corporation Limited (PCL) based in India and engaged in the same business as the Company for more than 25 years. As on date, 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-April 2002 PTL was incorporated by PCL, which is a listed company (on the

Bombay Stock Exchange as also National Stock Exchange) in India.

PTL also acquired a plot of land with an area of 20 rai 22 square wah

at Siam Eastern Industrial Park in Rayong Province in order to construct

a factory for manufacture of PET film.

May 20, 2002 PTL was granted a promotion certificate by BOI for PET film (production

line 1) with an approved production capacity of 15,000 tons per year

(now increased to 24,000 MT pa).

July-2002 to The Company started construction of the factory in July-2002 and

April-2003 completed its plant construction and proceeded with machinery test-run

in March, 2003 followed by commercial production from April 2, 2003

when its first sale invoice was recorded.

June 11, 2003 The Company was granted a BOI promotion certificate for production of

ë PET film (production line 2) with an approved production capacity of

15,000 tons per year (now increased to 24,000 tons per year).

ë PET resin with an approved production capacity of 26,250 tons per

year (now increased to 52,500 MT pa)

September 11, The Board of Directors resolved for the purchase of another plot of land

2003 adjacent to the existing land covering 8 rai 28.9 square wah area to

produce PET resin which is the raw material in PET film production.

November 12, Commercial production and distribution began for film production line 2.

2003

3. Business Overview



July 30, 2004 The shareholdersû meeting resolved for transformation of the Company into a public company, write-down of par value from Bt. 10 to Bt. 5 per share and increase of registered capital by Bt. 1,068 million to make up a total of Bt. 1,728 million requiring issue of additional 213.6 million ordinary shares. The allocation of the increase in capital was as under:

ë 133.6 million Shares offered to Polyplex (Asia) Pte. Ltd. (PAPL), a juristic person registered in Singapore, being a 100% subsidiary of PCL, India.

ë Up to 80 million shares at part value of Bt. 5 per share, making a total of up to Bt. 400 million as public offering.

The meeting also resolved for establishment of a holding company named

Polyplex (Singapore) Pte. Ltd.(PSPL), registered in Singapore as a holding company to facilitate investment and business expansion in Turkey.

August 11, 2004 Registration was completed to transform the Company into a public

company. September, 2004 Start up on PET resin batch plant in Thailand. December 8, 2004 IPO of 240,000,000 shares at the price of Baht 6.90 per share. February 22, 2005 PTL was granted a promotion certificate by BOI for Metalliser film with

an approved production capacity of 7,500 tons per year. February 22, 2005 Startup of Continuous Chips Plant inThailand. August, 2005 Start up of Metallizer Line 1 in Thailand. December, 2005 Start up of Thin Pet film line 1 in Turkey implemented by subsidiary

company with a production capacity of 24,000 MT per annum. March, 2006 Metallizer start up in Turkey with a production capacity of 4,800 MT pa. December, 2006 Start up of Pet resin plant in Turkey with a production capacity of

57,600 MT per annum March, 2007 PTL was granted a promotion certificate by BOI for Extrusion Coating

film project with an approved production capacity of 18,000 MT per annum for two production lines.

October, 2007 Board of Directors of PTL approved a Project for related product

diversification in CPP Film manufacture in Thailand. November, 2007 Total Productive Maintenance (TPM) policy adopted and rolled out by

PTL to enhance productivity.

17

January, 2008 PTL was granted a promotion certificate by BOI for Metallised Film Expansion Project with an approved production capacity of 8,700 MT per annum.

April, 2008 Commencement of commercial production of the Extrusion Coating line. May, 2008 Commencement of commercial production of the 2nd Thin PET Film line

and the 2nd Metallised Film line in Turkey and also the 2nd Metallised Film line in Thailand.

February, 2009 PTL was granted a promotion certificate by BOI for Cast Polypropylene

(CPP) film project with an approved production capacity of 15,600 MT for CPP plain and CPP Metallized film.

May, 2009 Board of Directors of PTL approved an Investment in a Silicone Coating

line in Thailand. 9 September, 2009 The Trading company in China - Polyplex Trading (Shenzhen) Co. Ltd

was set up and capital injected through Polyplex (Singapore) Pte Ltd March, 2010 Commencement of commercial production of the Cast Polypropylene line July, 2010 PTL was granted a promotion certificate by BOI for the Silicone Coating

film project with an approved capacity of 725 million sqm. February, 2011 Board of Directors of PTL approved an Investment in a Thick PET film

line in Thailand. May, 2011 Board of Directors of PTL approved the investment in a new Thin PET

film line in USA, under its 100% subsidiary Polyplex USA LLC (PUL). July, 2011 Board of Directors of PTL approved an Investment in a Blown PP film

line in Thailand. November, 2011 Board of Directors of PTL approved an Investment in the Second

Extrusion Coating line in Thailand. March, 2012 The Silicone Coating plant started the commercial operations. August, 2012 Board of Directors approved an Investment in a new subsidiary (EcoBlue

Limited) in Thailand, for implementing the project for recycling plastic waste. October, 2012 Board of Directors of PTL approved the proposal for 67% acquisition by

Polyplex Europa Polyester Film Sanayi Ve Ticaret A.S.(çPEé), Turkey, of the shares of Polyplex Resins Sanayi Ve Ticaret A.S (PR), from Polyplex



(Asia) Pte Ltd (PAPL). A project for investment in a PET Bottle grade resin line is underway at PR.

October, 2012 Board of Directors of PTL approved an Investment in an Offline Coater

at PE, Turkey. January, 2013 Board of Directors approved the acquisition of the balance 19.76% from

the minority shareholders of Polyplex (Americas) Inc.(PA), USA. Subsequently, PA has been merged with the manufacturing subsidiary PUL.

February, 2013 Board of Directors approved an Investment in setting up a Trading and

distribution company in Netherlands.

3.2 Shareholding structure

The current shareholding structure of the Polyplex group is:

Polyplex Trading (Shenzhen) Co., Ltd. (PTSL / Polyplex China) CHINA

POLYPLEX GROUP-STRUCTURE

Polyplex Corporation Limited (PCL / Polyplex India)

INDIA

PARLLC (PAR) USA

Polyplex (Asia) Pte.Ltd (PAPL / Polyplex Asia)

SINGAPORE

Public/ Institutional Shareholder

Polyplex USALLC (PU / Polyplex USA) USA

Private Investor

EcoBlue Ltd THAILAND

Polyplex Americas Holding Inc. (PAH) USA

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

Polyplex Europe B.V. (PEBV) NETHERLANDS

Peninsula Beverages & Foods Company Private Ltd. (PBF)

INDIA

Polyplex Resins Sanayi Ve Ticaret Anonim Sirketi (PR / Polyplex Resins)

TURKEY

Polyplex (Thailand) Public Co., Ltd. (PTL / Polyplex Thailand)

THAILAND

Polyplex (Singapore) Pte. Ltd. (PSPL) SINGAPORE

FMCG

OUTSIDE INTEREST

INVESTMENT COMPANY

MANUFACTURING COMPANY

TRADING & DISTRIBUTION COMPANY

100% 100%

100%

34.50% 16.50% 33%

49%

100%

100%

100% 100%

67%

100%

20%

80%

100%

19

Polyplex Corporation Ltd. (PCL)

PCL, the parent company operating for over 25 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. Itûs paid up capital is INR 325.6 million (about Bt. 175 million).

PCL has the following production capacities as at 31st March 2013:-

Product Annual Capacity UOM

Polyester Film 55,000 MT

Polyester Chips 77,600 MT

Metallized Film 20,400 MT

BOPP Film 35,000 MT

Coated Films 260 Million Sqm

Its direct and indirect shareholding in the Company aggregate to 51% of the latterûs 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, Middle

East, Africa and CIS/Russian markets and US would serve North America and South

America.

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.

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 34.5% as on 31st March 2013. The issued and paid up capital

of PAPL as of March 31, 2013 stands at USD 1.13 million.



Polyplex (Singapore) Pte. Ltd. (PSPL)

PSPL 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 Sirketi (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, 2013 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 Metallized Film line commenced commercial production in May 2008.The issued and

paid up capital of PE, including Additional Contribution from PSPL, as of March 31, 2013

stands at Euro 8.83 million.

Polyplex (Americas) Inc.

PTL acquired 80.24% equity stake in Spectrum Marketing Inc. (renamed as Polyplex

(Americas) Inc) (PA) with effect from January 1, 2006 to enhance its distribution network in

the North American market. PCL, PTLûs 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.

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 decision to invest in the setting up of the Trading Company in China was a

strategic initiative to establish the Companyûs presence in China, which is one of the

largest and the fastest growing market in this industry. The issued and paid up capital of

PTSL as at 31st March 2013 is USD 0.4 million.

21

Polyplex Americas Holding Inc (PAH).

In FY 2011-12, PTL invested in setting up a 100% investment holding company in USA.

PAH has further invested in Polyplex (USA) LLC, a manufacturing facility, under which a

PET Thin Film line project has just been commissioned in April 2013 and a project for

manufacture of PET Resin line is still underway. The issued and paid up capital of PAH

(including the Additional Paid-In Capital) as on 31st March, 2013 is USD 29.62 million.

Polyplex USA LLC (PUL)

Polyplex USA LLC was established in FY 2011-12 as a 100% subsidiary of PAH. The thin

PET film line along with the PET Resins plant project is being set up under this company

in Decatur, Alabama. This project is the first manufacturing base of Polyplex in USA. The

membersû contribution which represents the paid up capital as on 31st March, 13 is USD

29.5 million.

Polyplex Resins Sanayi Ve Ticaret A.S (PR)

Polyplex Resins Sanayi Ve Ticaret A.S (PR) was incorporated in Turkey, in December 2011,

as a 100% subsidiary of PAPL. In October 2012, PE acquired 67% stake in PR from PAPL.

The PET Bottle Grade Resin line, the first line in the Polyplex group, is under implementation

at PR. The Paid up Capital of PR as at 31st March, 2013 is Turkish Lira 20.2 million.

3.3 Revenue structure of the Company PTLûs standalone and consolidated sales value classified by regions is shown below:

STANDALONE 2010-11 2011-12 2012-13

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

Exports

Asia 2288.39 44.74 2,220.06 45.72 1743.81 35.91

North America 955.65 18.68 809.00 16.66 977.46 20.13

Europe 434.98 8.50 418.71 8.62 202.01 4.16

Others 249.91 4.89 141.47 2.91 119.30 2.46

Total exports 3,928.94 76.81 3,589.24 73.91 3042.55 62.66

Domestic Sales 1,013.33 19.81 915.31 18.85 975.67 21.98

Sale of chips/others 1 38.46 0.75 56.09 1.16 187.21 4.22

Total sales revenues 4,980.73 97.38 4,560.65 93.92 4,205.44 94.76

Other revenues 2 134.26 2.62 295.32 6.08 232.72 5.24

Grand total 5,114.99 100.00 4,855.96 100.00 4,438.16 100.00



CONSOLIDATED 2010-11 2011-12 2012-13

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

Exports

Asia 3,032.33 26.79 2,620.25 25.53 2,011.39 21.18

North America 2,802.47 24.76 2,683.84 26.15 2,571.48 27.08

Europe 3,464.45 30.60 2,745.07 26.75 2,623.76 27.63

Others 289.04 2.55 396.93 3.87 182.13 1.92

Total exports 9,588.29 84.70 8,446.09 82.29 7,388.75 77.82

Domestic sales

- PTL (Thailand) 1,013.33 8.95 915.31 8.92 975.67 10.28

- PE (Turkey) 517.84 4.57 698.93 6.81 743.42 7.83

Total Domestic sales 1,531.17 13.53 1,614.24 15.73 1,719.10 18.10

Sale of chips/others 1 63.71 0.56 82.78 0.81 122.17 1.29

Total sales revenues 11,183.16 98.79 10,143.11 98.82 9,230.02 97.21

Other revenues 2 137.00 1.21 120.70 1.18 265.17 2.79

Grand total 11,320.16 100.00 10,263.81 100.00 9,495.19 100.00

Note:

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

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

Consolidated Regionwise Film Sales FY 2012-13

Asia North America Europe Thailand Turkey Others

Asia, 22%

Europe, 29%

Thailand, 11%Turkey, 8% Others, 3%

North America, 28%

23

3.4 Business Goal 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 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 and CPP film, which are other Packaging substrates used by Converters, in addition to PET thin film. The Thick PET film line in Thailand which will start commercial production in 2013, is Polyplexûs first step into the Thick Film segment which would help in diversifying its product and customer portfolio. The second Extrusion coating line and the Blown PP line projects in Thailand would help in diversifying its product portfolio further.

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, Chemically Coated films, and other grades of packaging films like CPP, BOPP etc. The new Thin PET film line which has recently started in USA in Q1 2013-14, will help 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.

3.5 Promotion certificate PTL has been granted nine BOI promotion certificates, details of which are as below: -

S.No Certificate No. Type of business Date granted

1 1321(2)/2545 PET film 20-May-02 2 1287/(2)/2546 PET film and PET Resin 11-Jun-03 3 1159(2)/2548 Metallized Films 22-Feb-05 4 1261(2)/2550 Thermal Lamination Films 14-Mar-07 5 1044(2)/2551 Metallized Films 10-Jan-08 6 1110(2)/2552 CPP film (Plain and Metallized CPP) 4-Feb-09 7 1719(2)/2553 Silicone Coated Film 14-July-10 8 1705(2)/2555 Thermal Lamination Film (Line 2) 12-May-2012 9 1827(2)/2555 PET Thick Film and PET Resin 21-May-2012

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 PP 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

3.6 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 ùSarafilû), 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 companyûs 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 ùThermal Lamination filmû. This sold under the brand name ùSaralamû. In this product

line, the PET 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. Currently, a project for the implementation of the second Thermal lamination

line is underway in Thailand and is expected to start in H1 2013-14.

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 CPP film & metallised

CPP film under the brand name ùSaraCPPû.

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 Marchû12 under the brand name çSaracoteé.

25

The ongoing investment in a Blown Polypropylene film line in Thailand is another concentric

diversification by the Company in the plastic film business. This film will be mainly used as

a base film for the Silicone Coated film, as well as sold to potential customers.

The project for manufacture of Thick PET film is under implementation in Thailand and is

expected to start commercial production in H1 2013-14. Some of the common applications

of Thick PET film are as under:

In line with its strategy to expand in related areas of the plastic industry, the Company is

investing in a PET Bottle Grade resin line in Turkey. The project is expected to commence

commercial operations in H2 of 2013-14.

As a sustainability initiative, the Company is investing in a project to recycle process waste

as well as post consumer waste. The project is being implemented in Thailand, under the

Companyûs subsidiary - EcoBlue Limited.

3.6.1 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

ë Plain

ë Corona or chemically treated

ë High adhesion films

ë Ultra clear films

ë Co-extruded films

B) Metallized PET films

ë Semi Metallized film (low Optical density)

ë High barrier films

C) Specialty Films

ë Twist films

ë Anti static films

ë Heat Sealable films

ë Isotropic Films, High Friction Films, etc

ë Matte films

ë Thick films



D) Thermal Lamination Film

ë Gloss PET Thermal Film

ë MATTE PET Thermal Film

ë BOPP Thermal Film

ë Metallized Thermal Film

E) Cast Polypropylene film - Product range:

ë Lamination & Conversion grade film

o Transparent film for lamination & surface printing

o High hot tack film for candy packing

ë Metallizable grade film - Transparent heat sealable film for vacuum

metallization

ë Twist grade film

ë Retort grade film

F) Siliconized Films (Under the brand name ùSaracoteû) in PET and PP films

are used in various applications such as:

ë Shingle roofing tapes

ë Release liner in pressure sensitive labels.

ë Release liner in pressure sensitive adhesive tapes.

ë Release liner in medical and hygiene products.

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

ë Milky White

ë Clear/Ultra Clear

ë Transparent

ë Hazy Film

3.6.1.1 Characteristic of Product

A) Characteristic of PET film

PET film characteristic properties are as follows:

ë Optically brilliant, clear appearance

ë Excellent mechanical strength and toughness

ë Good dielectric properties

ë Good flatness and coefficient of friction (COF)

ë Tear-resistant and puncture - resistant characteristics

ë Excellent dimensional stability over a wide range of temperatures

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

ë Excellent barrier against a wide range of gases

27

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 ë Excellent Heat sealing properties/ High heat resistance ë Exceptional Optics ë Good dimensional stability and barrier properties ë Excellent printability ë Metallized CPP - Significantly increases barrier properties

C) Characteristics of Thermal Lamination Films ë High gloss & stiffness provide longevity to laminated media ë Coated adhesive forms inseparable bond with inks/papers ë Surface is conducive to add-on processes like Hot stamping, UV coating ë Improves visual appeal of product

D) Characteristics of Silicone Coated Films ë Silicone Coated film is designed to provide excellent carrier to pressure

sensitive material ë Single/ Double sided coated film ë Superior tensile strength, dimensional stability and caliper control as

compared to other Liners

3.6.1.2 End Use segment Thin PET film can be used in the following 3 key segments

ë 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.

ë Industrial -Comprising of Hot stamping foils, flexible air-conditioning ducts, labels /ID cards, lamination products and many more.

ë 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

ë Electrical - This segment accounts for almost 60% - 65% of Thick PET film market and is driving the growth in demand of Thick PET films. Flat Panel screen, PV panel, insulation etc are the main applications.

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



Thermal Lamination films mainly cater to the following applications: ë Thermal Lamination of documents or printed media ë Reflective Insulation ë Flexible packaging ë Rigid packing using printed corrugated carton board

CPP films can be used in the following key segments: ë 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.

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

Silicone Coated Films mainly cater to the following applications: ë PET Release liners for labels ë PET Shingle tapes for the roofing industry ë 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 and

CPP film) are as follows:

STANDALONE SALES 2010-11 2011-12 2012-13 Segment Bt. Mn Bt. Mn Bt. Mn % Bt. Mn %

Packaging Use 3,986.67 3,529.79 3,529.79 80.66 3,151.83 78.44 Industrial Use 955.61 974.77 974.77 19.34 866.40 21.56 Electrical Use 0.00 0.00 0.00 0.00 0.00 0.00 Total Film Sales 4942.28 4,504.55 4,504.55 100.00 4,018.23 100.00

CONSOLIDATED SALES 2010-11 2011-12 2012-13 Segment Bt. Mn Bt. Mn Bt. Mn % Bt. Mn %

Packaging Use 8,298.90 74.63 7,651.23 76.05 6,144.72 67.47 Industrial Use 2,666.52 23.98 2,319.52 23.06 2,880.42 31.63 Electrical Use 154.04 1.39 89.57 0.89 82.71 0.91 Total Film Sales 11,119.47 100.00 10,060.33 100.00 9,107.85 100.00

Note: 1) Sales of Thermal lamination film and Silicone Coated Film are included in 2

segments i.e. Packaging segment and Industrial segment, depending on the end use application of each type of product sold.

29

3.6.1.3 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.

Consolidated Segmentwise Film Sales FY 2012-13

Packaging Industrial Electrical

Industrial, 23%Electrical, 1%

Packaging, 76%



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 ùlimp filmû. 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 ùcheaperû 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.

3.6.2 Business Strategy Key elements of the strategy are:

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

31

Moving in this direction, the following initiatives have been taken by the Company in the past and are planned for future: ë 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.

ë With the start up of the second Thin PET film line in Turkey in May 2008, the subsidiary has an even stronger cost effective production base to service its expanding customer base in Europe, Middle East, Africa & CIS/Russia.

ë Backward integration into the manufacturing of PET chips has strengthened the cost structure of the Company in Thailand and also of the subsidiary in Turkey.

ë With the Extrusion Coating plant in April 2008 and the additional Metallizers in Thailand and Turkey in May 2008, the Company has been able to significantly increase the share of value added products, in its sales portfolio thereby improving its profitability on the whole.

ë As a part of its strategy of concentric diversification, the Company has set up a CPP film manufacturing line in Thailand in March 2010. This has helped the Company to establish itself as a complete packaging substrate provider.

ë With the start up of the new Silicone Coated film in Thailand in March 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.

ë The Companyûs decision to invest in a new PET Thin film line in USA is another step towards geographically diversifying its manufacturing base. This would help the Company to participate in the growth in the flexible packaging segment in the American region and increase its market share substantially.

ë The PET Thick film line in Thailand would help the company to bring about more stability in earnings, once the line is ramped up to optimum levels, as this segment is generally more stable in comparison to the PET Thin film segment.

ë The second Extrusion coating line in Thailand would help the Company to increase its market share in this industry as well as further diversify its product portfolio.

ë The Blown PP line would help Polyplex to enter into the Silicone coated PP film market.

ë The investment in the PET Bottle Grade Resin line in Turkey is another initiative towards diversification of risk and enhancing of the product range.

ë 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.



ë The parent company in India has set up a dedicated Research and Development center which works closely with key customers, including end users of convertors to develop specialty and innovative products.

3.6.3 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, Netherlands and in 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 ùEnd Usersû segment.

STANDALONE SALES 2010-11 2011-12 2012-13 Customers Bt. million % Bt. million % Bt. million %

End Users 2,986.43 60% 2,480.96 55.08% 2,290.96 57.01% Distributors 1,955.84 40% 2,023.59 44.92% 1,727.27 42.99% Total 4,942.28 100% 4,504.55 100% 4,018.23 100%

CONSOLIDATED SALES 2010-11 2011-12 2012-13 Customers Bt. million % Bt. million % Bt. million %

End Users 7,375.54 66.33 6,792.27 67.52 6,009.80 65.98 Distributors 3,743.93 33.67 3,268.05 32.48 3,098.05 34.02 Total 11,119.47 100.00 10,060.33 100.00 9,107.85 100.00

3.6.4 Markets and competitive environment

3.6.4.1 Global Demand and supply

Thin PET Film The growth in packaging has over the years shifted the production and usage

patterns of PET films. The Companyûs relevant segments of Packaging, Industrial and Electrical constitute 98% of the total demand and the traditional high-end technology segments like magnetic media and imaging segments are reduced to only 2% of the total consumption due to technology transformation. All these years, Polyplex was operating only in the thin PET film segment,

33

which represents three-fourth of the overall global PET film demand. With the start up of the Thick PET film line in Thailand in H1 of 2013-14, the company plans to diversify by venturing into the Thick film segment as well.

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 ùuse less waste in the first placeû 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 7%-9% per annum. 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/ Industry estimates

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 (excluding Japan & Korea), is the largest market for PET films with almost one-third of the PET films produced 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.

Global PET Thin film demand by End Use

Other Industrial

Packaging & Metallised Films

Magnetic Media

Electrical

Imaging

2007-1,680 KMT

2012-2,360 KMT



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.


During the year 2012, the Thin PET film industry witnessed an oversupply scenario

due to excessive capacity addition following the exceptionally high margins

witnessed in the PET film industry in 2010. The current situation of oversupply

is expected to continue for an extended period of another one to two years.

We expect global Thin PET film growth rates to be at about 7% in the next few years, with the demand in the South East Asian region growing at a higher rate of 8-9%. The overall capacity addition in the next 12-18 months is expected to be higher than the growth in demand but the actual timing of the additions will determine the duration of the current oversupply situation. 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.

Global Thin PET film demand by Region

North America

Europe

Asia

South America

Middle East & Africa

2012- 2,360 KMT

2007- 1,680 KMT

35

Thick PET Film The demank of Thick PET film is mainly concentrated in the developed

economies of the world. 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 7.0%.

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 6.0% for the next few years.

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. However, European and US still continue to have more than 20% of world capacity.


Global Thick PET film demand by End use

2012- 798 KMT

2007- 549 KMT

Other Imaging

Medical / X-Ray

Flat Panel Screens

Packaging / Lables

Photovoltaic cells

Other Electrical / Electronics

Other Industrial

Global Thick PET film demand by Region

2012- 798 KMT

2007-549 KMT

North America

Europe

Japan

China

South Korea

Taiwan

Other World



3.6.4.2 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 (e.g.

Dupont-Teijin, Mitsubishi and Toray, Cifu, Polyplex, Flex, Jindal etc). (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. 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

Thailandûs PET film market is of small scale as compared to the global PET

film market. As per our estimates, demand in Thailand is approximately 30,000

tons per year with growth rate for next few years expected to be about 8-

9%.In the past, domestic producers have put emphasis on producing BOPP

film rather than any other types. PTL has principally focused on 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, Thermal

Lamination film, Silicone Coated film etc and related product diversification like

manufacturing CPP film. The Company is in the process of setting up a Thick

PET film line, Blown PP line and second Extrusion Coating line in Thailand,

which are expected to commence operations within H1 of 2013-14. It is

presently having the largest PET Thin film production capacity in the country.

37

The film production capacities of the various plastic film producers in Thailand

as at 31st March 2013 are as follows: Production line Thai Film A.J. Plast. PTL*

(tons per year) Industrials Plc. Plc.

BOPP film 107,000 66,000 - PET Thin film 3,500 31,000 48,000 CPP film 3,500 - **15,600 BOPA film - 18,000 - Metallized film 7,000 10,800 16,200 Blown PP Film 4,645 PET Thick Film 28,800 Total 124,000 125,800 88,800 Thermal Lamination film - - 365 mn Sqm Silicone Coated Film 725 Mn Sqm

Source: Form 56-1 of A.J.Plast Plc and T.F.I Plc * PTL capacities are as approved by BOI, including ongoing projects. For actual

attainable capacities, please refer table below, under section ùProduction Capacityû ** Combined capacity p.a. as approved by BOI for CPP plain and metalized film

Conclusion on PET film industry The PET film industry has been expanding continuously in the past. The main

driving factor for the past five 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. During the years 2000 to-2012, global average capacity utilization of PET film manufacturers was in the range of 80-90% of rated or nameplate capacity, except in certain years where the utilization rate declined to below 80% due to excess capacity built up in the industry. The levels of 85-90% are considered a high utilization rate being close to the full machinery capacity. In practice, some producers can produce lower than the nameplate capacity due to the long use and hence the poor condition of machinery while some can 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.



Note: Data from industry sources/Company Estimates

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 25 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 Top 5 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 Companyûs 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.

Glogal Thin Plain PET Film

Demand Capacity Utlization Capacity

39

As an outcome of the Antidumping investigation by the Government of Brazil against Thailand and Turkey, an Anti Dumping duty of about 28 cents/Kg on imports from Thailand to Brazil and about 6.7 cents/Kg on imports from Turkey to Brazil has been levied. The impact of these duties is not very significant as the Companyûs sales to Brazil are minimal.

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:

ë Global demand for Thin PET films is expected to grow at a CAGR of about

7% over the next few years.

ë Demand growth for the products in the Flexible Packaging segment in the

South East Asian region is expected to be about 8-9%.

ë Mid size and new producers would increasingly look to diversify their product

range from commodity grades to specialty grade films to improve margins.

ë Addition to global capacity during the next 12-18 months is expected to be

higher than the growth in the demand, and hence the current situation of

over supply is expected to remain for another 1-2 years.

ë New entrants from China have been increasingly dominating the market for

PET film in the last 2-3 years, but their production is expected to mainly

fulfill domestic demand which is growing rapidly.

ë The cyclical nature of the industry would continue.

ë The transitioning of the industry to Asia would pose higher competitive

pressure in the years to come.

ë Free Trade Agreements being entered between various countries are

opening up new opportunities, as well as threats.

ë Increasingly, the larger producers are trying to tie up strategic partnerships

or acquisitions 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.

3.6.5 Manufacturing of product

3.6.5.1 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.



3.6.5.2 Production capacity

Capacity of Polyplex group as on 31st March 2013 (including ongoing projects)

is as follows:

Product Type India Thailand* Turkey USA Total Unit

PET Thin Plain Film 55,000 42,000 58,000 31,000 186,000 MT

PET Thick Film 28,800 28,800 MT

PET resin 77,600 80,500 57,600 57,600 273,300 MT

PET Metallized Film 20,400 11,000 11,000 13,500 55,900 MT

Bottle Grade PET Resin 210,000 210,000 MT

BOPP Film 35,000 35,000 MT

CPP Plain Film 10,000 10,000 MT

CPP Metallized Film 4,200 4,200 MT

Blown PP Film 4,645 4,645 MT

Coated Films 260 865 140 1,265 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 ùDomestic competitionû.

The above table includes the capacities for the projects under implementation

at Thailand, Turkey and in USA.

Polyplex Group Capacity

2,500.00

1,500.00

75.00

-

35,000

55,000

28,800

80,50058,000 57,600

11,00031,000

57,600

13,500140

210,000

15,200

865

10,0004,645

42,000

77,600

20,400 100

160

1,000

900

800

700

600

500

400

300

200

100

-

MT Mn Sqm

PET-ThickCPPPET ChipsMetallizerSiliconised/Extrusion Coated

PET-ThinBOPPBlown PPBottle Grade PET ResinChemically Coated

INDIA

Base Film RET Film MET Film Coated Base Film PET Film MET Film Coated Base Film BG PET PET Film MET Film Coated Base Film PET Film MET FilmResin Film Resin Film Resin Resin Film Resin

THAILAND TURKEY USA

41

PET Film Production & Capacity Utilization - Thailand

MT

04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13

43,00042,50041,00040,50039,00038,00037,00036,00035,00034,000

120%

100%

80%

60%

40%

20%

0%

98%

38,199

36,877 36,847

39,989

37,950

40,764

42,420 42,44641,165

95% 94% 95% 90% 97%101% 101%

98%

Production (MT) Capacity Utlization (%)

PET Film Production & Capacity Utilization - Consolidated

MT

04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13

100,00090,00080,50070,00060,50050,00040,00030,00020,00010,000

-

120%

100%

80%

60%

40%

20%

0%

98%

38,199 41,820

60,32066,748 78,032 92,197 95,296 94,457

94,84391% 89% 94% 81%

92% 95% 94% 95%

Production (MT) Capacity Utlization (%)

The capacity utilization rates for the Plain PET film lines PTL Standalone and

Consolidated are as follows:

3.6.5.3 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 one local supplier

each for PTA and MEG for PTL. For the PTA & MEG requirement for the new

PET Thick Film line, it will procure PTA from another local supplier, whereas

MEG will be sourced from existing supplier. The subsidiary in Turkey is



importing PTA from Europe and MEG from Middle East. For the subsidiary in

USA, talks are on with the local suppliers and the contracts will be finalized

before the start up of the PET resin line.

The company enters into Annual contracts as per which 100% of the

companyûs 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 companyûs 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. For the second Thermal lamination line

which is expected to start operations in H1 of 2013-14, the company plans to

continue to source its requirement from existing suppliers, while it will also

continue to explore other options available within this 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 being imported.

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 Companyûs in house production and also imported from

the Parent company in India at Armûs 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). We plan to source our requirement

from local supplies as well as imports from within this region. The company

already has experience of sourcing similar resins (Homopolymer and

Copolymer) for the CPP Film line and would leverage on the relationship with

existing suppliers, to negotiate favorable terms of supply for its new

requirement for the Blown PP film line.

43

The value chain for the Companyûs PET & CPP film business is depicted below:

The value chain for Thermal Lamination film is given below:

RAW MATERIALS

PLASTIC AND INTERMEDLATE PRODUCTS

EVA / LDPE

PET / BOPP

FILMS

E X T R U S I O N

C O A T I N G P R O C E S S

T H E R M A L L A M I N A T I O N

F I L M

P R I N T E R S /

L A M I N A T O R S

E N D C U S T O M E R S

Polyplexûs area of operation

NATURAL RESOURCES

END PRODUCTS

PLASTIC AND INTERMEDLATE PRODUCTS

RAW MATERIALS

BASIC PETROCHEMICALS

Ethylene MEG

Pare Xylene

PTA

Polypropylene

PET RESIN

PP RESIN

C O A T I N G

M E T A L L I Z I N G

I N D U S T R I A L

B U Y E R S &

C O N V E R T E R S

B A S E F I L M S

Polyplexûs area of operation

Natural Gas

Oil



3.6.5.4 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 Companyûs manufacturing process poses no

environmental impacts.

All our product lines in Thailand have the following certifications:

ë ISO 14001:2004 certification on Environment Management system

ë ISO 9001:2008 certification on Quality Management system

ë OHSAS 18001:2007 certification on Occupational Health and Safety

Management system

ë ISO 22000:2005 certification on Food Safety standards

ë TPM Excellence Award (Category A)

All our product lines in Turkey have the following certifications:



ë OHSAS 18001:2007 certification on Occupational Health and Safety

Management system

ë BRC/IoP - certification on Global Standard For Packaging and Packaging

Materials (For Plain and Metallized Film lines)

45

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 Companyûs operating results. The key risk factors are: 4.1 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 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 price will drop, hence narrowing the spread between the film and raw material prices. This cyclical nature will inevitably affect every producerûs revenues and profits. The FY 2012-13 witnessed a situation of significant oversupply, thereby resulting in margins contracting to historically low levels.

To illustrate the cyclical impact of the PET thin 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 profit before tax as a % to sales, of PTL on a consolidated basis,

with prices of PET film and raw materials (Consolidated - Average for PTL-Thailand and PE-Turkey)

4. Risk Factors

CONSOLIDATED PBT AS % OF NET SALES

2003

-04

2004

-05

2005

-06

2006

-07

2007

-08

2008

-09

2009

-10

2010

-11

2011

-12

2012

-13

40% 35% 30% 25% 20% 15% 10% 5% 0%

22.31% 22.10% 17.11%

7.37% 12.90%

15.46%

14.82%

35.06%

13.72%

4.06%



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 as well as Polyplex.

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

ë With high productivity levels and cost control measures, Polyplex believes it is one of

the lower cost producers of polyester film in the world which will help it deliver

better financial results than the other constituents of the industry.

ë Diversify its product portfolio by introducing new products like Extrusion Coated Film

(second Extrusion Coated film line expected to start commercial operations in H1 of

2013-14), Cast Polypropylene Film, the Silicone Coating Line, Thick PET Film

(expected to commence commercial production in H1 of 2013-14) to mitigate the

risk of over dependency on a single product and single industry.

ë Polyplex is also investing a PET Bottle Grade resin project in Turkey, under a newly

formed company, in which PTL indirectly holds a 67% stake, and balance 33% is

held by its parent company in Singapore - Polyplex (Asia) Pte Ltd (PAPL).

ë Accessing customers operating across the globe in the flexible packaging and

industrial segments by presenting alternative sourcing options from its existing

manufacturing locations in India, Turkey and Thailand and from the new

manufacturing location in USA where the PET thin film line has recently commenced

commercial operations in April 2013 and its warehousing & distribution set up in

Europe and China, thereby mitigating the risk of over dependency on few customers.

ë Diversified manufacturing and distribution base helps to mitigate the risk of volatile

markets. For Eg: South East Asian markets are quite volatile 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.

105

90

75

60

45

30

73.68 20

03-04

2004

-05

2005

-06

2006

-07

2007

-08

2008

-09

2009

-10

2010

-11

2011

-12

2012

-13

Selling Price / kg RM/kg

84.67 74.48

68.62 70.52 73.48

60.41

97.21

74.97 69.62

37.07 46.98

39.07 43.75 39.44 37.91 35.17 37.83 46.35 45.46

47

ë Increased focus on new product development through R&D or technology

acquisitions besides creating a strong technical services team is likely to be

additional differentiator between Polyplex and its competition.

ë The project for Offline Coater under implementation at Polyplex Europa (PE), Turkey

will help in further enhancing our product offering to customers and reduce the

exposure to commodity filmsû segments.

4.2 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 Companyûs 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, PTL 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 have been following the trend of the raw material cost

except for years where other factors influenced the prices like 2006-07 (down cycle in PET

film industry due to imbalance in supply demand situation), 2008-09 when the world

economies went through a turmoil and in 2010-11 where due to shortage in supply of PET

films, the selling prices increased at extraordinarily high levels.

During the FY 2012-13, the Polyester film industry witnessed an excessive over supply

situation, brought about by all the additional supplies which came into the market in 2011

and 2012, following the extraordinary high margin levels witnessed in year 2010-11. There

was tremendous pressure on the selling prices, due to which the margins of all PET film

manufacturers were squeezed to historically low levels.

In our estimate, the over supply situation is expected to continue for some more time, and

once demand growth catches up with supplies, the markets should witness a more

balanced scenario and the margins should rebound to normal levels.

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, in Far

East/ US and Europe:

Source: Industry information

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00PET Film - PTA - MEG Price Trend (Far East)

USD/

Kg

4.48 3.51 2.22 1.57 1.48 1.76 1.83 1.94 2.15 2.07 1.98 1.88 2.06 2.54 2.13 3.08 2.61 1.991.15 0.88 0.63 0.44 0.44 0.57 0.49 0.53 0.59 0.75 0.81 0.90 0.88 0.91 0.84 0.97 1.27 1.100.74 0.65 0.65 0.49 0.44 0.58 0.50 0.46 0.67 0.93 0.92 0.91 1.08 1.15 0.69 0.97 1.30 1.18

PET Film (12 Mic. Corona)PTAMEGVA Over PTA & MEG 3.44 2.50 1.43 1.01 0.93 1.05 1.22 1.31 1.39 1.07 0.94 0.75 0.89 1.33 1.14 1.87 1.02 0.60

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

PET Film (12 Mic. Corona) PTA MEG VA Over PTA & MEG

USD/

Kg

PET Film - PTA - MEG Price Trend (US)

PET Film (12 Mic. Corona)PTAMEGVA Over PTA & MEG

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00

5.03 4.11 3.23 2.43 2.13 2.34 2.51 2.73 2.98 3.10 3.02 2.43 2.52 2.98 2.30 3.48 4.22 3.030.87 0.75 0.61 0.53 0.51 0.63 0.64 0.60 0.69 0.83 0.97 1.26 1.11 1.17 0.96 1.06 1.46 1.390.67 0.61 0.65 0.55 0.48 0.61 0.53 0.50 0.74 0.97 0.95 1.09 1.17 1.20 0.74 1.04 1.36 1.244.03 3.23 2.45 1.76 1.50 1.56 1.75 2.02 2.10 2.02 1.82 0.93 1.11 1.51 1.19 2.17 2.44 1.35

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012


Euro

/Kg

PET Film - PTA - MEG Price Trend (Western Europe)

PET Film (12 Mic. Corona)PTAMEGVA Over PTA & MEG

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00

5.20 4.21 3.35 2.54 2.35 2.47 2.25 2.78 3.81 3.53 3.07 2.99 2.91 2.19 1.93 2.59 2.85 2.161.31 1.05 0.77 0.70 0.69 0.79 0.80 0.88 1.11 1.19 1.20 0.90 0.90 0.84 0.75 0.89 0.99 0.990.83 0.68 0.60 0.49 0.45 0.58 0.50 0.50 0.77 0.91 0.84 0.82 0.90 0.91 0.56 0.83 1.07 1.013.88 3.03 2.45 1.74 1.58 1.56 1.36 1.82 2.56 2.15 1.71 1.89 1.79 1.12 1.07 1.51 1.59 0.92

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012


49

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 could impact margins. The spread between the raw material and PET films, especially over the last few years, has moved in a band. PTLûs 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.

4.3 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,

available from a variety of sources in this region. However, the company is meeting its requirement domestically, by procuring each of these raw materials 100% from a single local supplier, thereby enjoying certain distinct advantages of shorter lead time/lower raw material inventory carrying levels etc. The company has entered into long term / yearly contract for the supply of the raw material to ensure its availability. These contracts also have a supply guarantee clause to ensure that the risk of buying 100% from a single source and also a single plant operation is mitigated. And as far as the pricing is concerned, since it is linked to certain standard international benchmark rates there is high degree of transparency.

For the Extrusion Coated film production, apart from PET film which is transferred from the

Companyûs in house production and also imported from the Parent company in India at Armûs length pricing, the 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. For the second Thermal lamination line which is expected to start operations in H1 of 2013-14, the company plans to continue to source its requirement from existing suppliers, while it will also continue to explore other options available within this 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 being imported. For the Silicone Coating line, the main raw material is PET film which is transferred from

the Companyûs in house production and also imported from the Parent company in India at Armûs length pricing. Silicone and other chemicals are being imported from USA and Europe from leading suppliers.

For Thick PET Film line, the major raw material is PET Resin which will be produced

in-house post start up of the new resin line in H1 of 2013-14. The major raw material for PET resin is PTA and MEG, availability of which is not a major concern, as already



explained above. PTA will be sourced 100% locally, but from a different supplier, than the one supplying PTA for existing line. This would help to diversify the risk of over dependency on a single supplier. The MEG will be sourced from the same supplier who is supplying for the existing line. The company has entered into annual contracts and also have a supply assurance clause to ensure that the risk of sourcing 100% of its requirement from a single source is mitigated. And as far as the pricing is concerned, since it is linked to certain standard international benchmark rates there is high degree of transparency.

For Blown PP film line, the main raw material is PP resins (Homopolymer, Co-Polymer and

PP Color master batches). We plan to source our requirement from local supplies as well as imports from within this region. The company already has experience of sourcing similar resins (Homopolymer and Copolymer) for the CPP Film line and would leverage on the relationship with existing suppliers, to negotiate favorable terms of supply for its new requirement for the Blown PP film line.

4.4 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 Silicone Coating line or the Thick Film & PET Resin line under implementation, PTL

was not required to get any EIA approval.

4.5 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 strong capital to accommodate investment in PET film plants and machinery. In this industry, it is quite commonly seen that capacity additions happen in bulk, 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 year, the oversupply is so excessive that the down cycle lasts for a prolonged period of 2-3 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, Polyplexûs low cost of production, established quality,

geographically diversified manufacturing presence, wide range of products and global

51

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 strategically embarked on various expansion projects in Turkey, USA

and Thailand over the last few years, including the 2 main projects - PET Thick film line in Thailand (under implementation) and the PET thin film line investment in USA. (Recently started commercial operations in April 2013). This along with the other expansion projects in the pipeline in Thailand and Turkey will further strengthen its competitiveness (Refer Section 3 -Business Overview for details on Projects commenced during the year and Section 5 -Future projects for new projects in the pipeline). 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 continuously 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.

4.6 Risk from trade barrier measures Trade barrier measures taken 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 undertaking all the 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.



In the year 2008, in the US Anti Dumping petition against producers of PET film from

Thailand, China, Brazil and Middle East, there was a negative injury ruling by the

International Trade Commission (ITC) against Thailand and consequentially, there is no duty

against Thailand imports into the US market.

As an outcome of the Anti-Dumping Investigation by Brazil in the year 2007, against

Thailand, an Anti Dumping duty of about 28 cents/Kg on imports from Thailand to Brazil

had been imposed. However, the impact of this on the Company is minimal, as the sales

to Brazil are almost negligible.

As an outcome of the Anti-Dumping investigation initiated by the Government of Brazil in

December 2010, against UAE, Mexico and Turkey, in respect of PET film imports into

Brazil, the government of Brazil imposed anti-dumping duty of USD 67.44 / MT on the

Companyûs subsidiary in Turkey (Polyplex Europa), which is however the minimum rate as

compared to the rates announced for other countries as well as other producers in Turkey.

Polyplex Europaûs exports to Brazil are not a very significant portion of their overall sales

volumes and as such, the management does not expect any major impact from the anti-

dumping margin imposed.

4.7 Risks from future projects The major risks associated with any new Projects are as below:

ë 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 new products. In the case of the PET Thick film, although this is a new product, the Company has already started establishing contacts with key customers in the target markets and remains confident of ramping up sales smoothly.

ë Competition Risk: The Company believes that its cost structure would be globally very competitive and will be one of the major advantages to gain an edge over some of the existing producers/new entrants.

ë Project Implementation risk: Implementation of the Project within the Budgeted cost and timeline is another critical aspect for the success of any Project. Based on past experiences, it can be very well said that the experienced Projects team at Polyplex should be able to achieve successful implementation of new projects on time and within Budgeted costs except for un-foreseen circumstances.

ë 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, the Company is quite confident of raising the required financing for any new future Projects at competitive terms and conditions.

53

ë 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. This creates a natural hedge for 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. With the new borrowings made for the recent

expansions in Thailand, the Forex loan portfolio of the Company has gone up to

more than 100 Million USD (including equivalent of the Euro denominated loans),

thereby exposing the Company to high amounts of unrealized Fx loss/gains on

account of the restatement of such loans.

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.

4.8 Risk from dependence on the parent company Polyplex Corporation Ltd. (PCL), through direct and indirect shareholding, currently controls

51% of the paid up shares in the Company.

In the initial 2-3 years of its incorporation, PTLûs core management team consisted of

persons who were previously employed by PCL and they played a vital role in successfully

establishing PTLûs operations ahead of the schedule and at a lower-than-estimated cost,

together with ensuring high productivity levels resulting in the Companyûs 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 Companyûs 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 reliance on the parent company. It is only in the research and

development area and the implementation of new projects, where the parent company

provides know-how and technical assistance to the Company.



PTLûs business operation is independent from PCL in such undertaking as public offering

of equity, borrowing of loans, and other investments in the future, for instance. 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:

ë It is Polyplexûs policy in business operation that there is an equitable distribution of

business between the various manufacturing units aligned to efficient servicing of

customers.

ë The investment in PTL and its subsidiaries is higher as compared to PCLûs assets,

hence the success of PTL being critical for PCL.

4.9 Risk from sponsor group holding about 51% of total shares Currently, PTLûs major shareholder is PCL (As of March 31, 2013 the promoter Mr. Sanjiv

Saraf and related parties control 46.93% in PCL), holding 16.50%, and Polyplex (Asia) Pte.

Ltd. (çPAPLé) which is wholly owned by PCL, holding 34.50%, thus in aggregate holding

51% of PTL paid-up common shares of Bt. 800 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 Companyûs policy

on business administration and operation. 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.

4.10 Foreign exchange risk Most of PTLûs 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 also linked to

the US dollar, although their payments are done in 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 31st ù13 had Euro loans of about 23 million and USD loans of about

70 million. 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

55

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 Companyûs subsidiary in Turkey has a net surplus in USD and Euro

currencies 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 has USD revenues and USD payments, so there is a natural hedge.

The project financing was also made in USD currency so that there is a natural hedge for

loan repayment.

The funding for new Projects of the company are also planned based on the future inflows

from the Project Operations so that a natural hedge can be created to the extent possible.

However, as explained above, the increased Forex loan portfolio of the Company of about

USD 100 Million (including equivalent of the Euro denominated loans), exposes the

Company to high amounts of unrealized Fx loss/gains on account of the restatement of

such loans, thereby resulting in instability in reported net profits of the Company.

4.11 Interest rate risk As of March 31, 2013, the Companyûs outstanding long term loans (consolidated basis)

were Euro 57.5 million and USD 122.1 million, whereas outstanding short term loans were

USD 22.5 million and Baht 385 million. The USD loans amounting to USD 3.6 million (O/S

as on March 31st ù13) have already been swapped to fixed interest rate and the balance

loans have floating LIBOR based interest rates. All the Euro loans have floating EURIBOR

based rates. The floating interest rate may put the Company at a risk of rising financial

cost if the interest rates move up. 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.

4.12 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, America, Middle East, Africa and CIS/Russian markets. The US

manufacturing entity would mainly serve North American and South American markets.

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.

4.13 Credit risks Credit risk of customers is another significant risk for any business. The Company

manages the risk by adopting appropriate credit control policies and procedures. Most of

the sales, which are on credit are secured either through a Letter of credit issued by the

customer or by taking appropriate credit insurance coverage. The Company also takes

extra caution in selection of any new customers and granting of credit.

57

5.1 Future Projects 5.1.1. PET Thick Film Line - Thailand

In February 2011, the Board had approved an investment in a Thick Polyester Film

Line along with Batch Resin Plant. This project is being implemented in Thailand by

partially using the new plot of land purchased in 2010, located close to the existing

factory in Siam Eastern Industrial Park.

Project Details

ë The total Investment in this project is about $ 90 million, including working

capital.

ë The PET Thick Film Line is of 5.9 meters width, with a capacity of about

28,800 TPA.

ë Polyester Batch Process Chips manufacturing facility is with a capacity of

about 28,000 TPA.

ë The product range from this new film line would be PET thick film in the range

of 23-350 micron thickness.

ë Funding of the Project is through Long Term Debt borrowing of $ 60 million

and balance is funded out of internal cash flows/ WC lines of the Company.

ë The expected commercial start up of the project is in H1 of 2013-14.

ë The project is promoted by the BOI.

5.1.2. PET Thin Film line - USA

The PET thin film line project is being implemented in Decatur, Alabama State, USA,

under Polyplex USA LLC (PU). PU is held by Polyplex Americas Holding Inc (PAH)

which is 100% held by Polyplex (Thailand) Plc.

Project Details

ë Total investment is estimated to be about $ 140 million including working

capital.

ë This would include a PET Thin Film Line of 8.7 meters width with a capacity

of about 31,000 TPA, PET Resin line of 57,600 TPA.

ë During the year, the US entity has acquired some metalizing assets with an

aggregate capacity of 13,500 MT.

ë Funding of the Project is through Long Term Debt borrowing of $ 75 million

and balance will be funded out of internal cash flows of Polyplex (Thailand)

Plc and/or its subsidiaries.

5 Future Projects



ë The Film line has started commercial production in Q1 of 2013-14 and the

Resin plant is expected to start up in H2 of 2013-14. Until then, the chips

requirement is being managed through related party supplies as well as

external purchase of Polyester chips.

5.1.3. Blown PP Film line - Thailand

In July 2011, the Blown PP film line project was approved by the Board. This project

is being implemented in Thailand, in the same plot of land in Siam Eastern Industrial

Park where Silicone Coating film line was implemented.

Project Details

ë The total Investment in this project is about $ 10 million, including working

capital.

ë The company has tied up Long term Debt financing of $ 7 million for financing

the project.

ë Annual capacity of the Blown PP line will be 4,645 TPA.

ë Film will be used mainly as captive input for the silicone coating line, with a

view to enable better utilization levels and expand the product mix of the

Silicone Coating line.

ë BOI approval for the Project has been received, by amending the Silicone

Coated Film line approval, to include manufacture of Blown PP Film as base

film as well as to include external sales of Blown PP.

ë The expected commercial start up of the project is in H1 of 2013-14.

5.1.4. Extrusion Coated Film Line II - Thailand

In November 2011, the Extrusion Coated Film line II project was approved by the

Board. This project is implemented in Thailand, in the same plot of land in Siam

Eastern Industrial Park where Extrusion Coated Film Line I was implemented.

Project Details

ë The total Investment in this project is about $ 13 million, including working capital.

ë The company has tied up Long term Debt financing of $ 6.5 million for

financing the project and balance Project cost is funded out of internal

accruals/ WC lines of the Company.

ë Annual capacity is 215 million Sqm, higher than the capacity of the first line

which is 150 million Sqm pa.

ë The expected commercial start up of the project is H1 of2013-14.

ë Main market for this product would be USA and Europe.

ë The BOI promotion certificate has been received.

59

5.1.5. PET Bottle Grade Resin plant- Turkey

A PET Bottle Grade Resin project is being implemented under Polyplex Resins Sanayi Ve

Ticaret Anonim Sirketi (PR), in Turkey. This new company is held 67% by Polyplex Europa

Polyester Film Sanayi Ve Ticaret Anonim Sirketi (PE), a 100% subsidiary of Polyplex (Thailand)

Plc and the balance 33% is held by Polyplex Asia Pte Ltd (PAPL).

Project Details

ë The total Investment in this project is about $ 80 million, including working capital of $ 8

million.

ë The company has tied up Long term Debt financing of Euro 41 million and WC Line of

Euro 6 million. The balance Project cost is funded out of Equity investment from PE and

PAPL and inter-company loans from PAPL.

ë Annual capacity is 210,000 MT per annum.

ë The line is expected to start commercial production in H2 of FY 2013-14.

Project Rationale:

ë Strategic:

o It provides an opportunity to create another stream of profitable growth

o At the same time, it allows for portfolio risk diversification, thereby reducing the

almost complete dependence on the plastic film business. However, the risk of

entering a new business is mitigated significantly as it is somewhat related due to the

fact that Polyplex currently manufactures film grade PET resin at all locations for its

captive needs. Thus the technology and production side risk is quite low.

ë Attractive Industry / Product:

o High growth industry with regional growth rates higher than corresponding GDP

growth rates mainly driven by growth in the usage of fast growing consumer products

like Mineral water bottles, Carbonated Soft drinks etc.

o PET bottles offer unmatched value along with low cost as compared to glass bottles

and PVC polystyrene.

o Given the high proportion of raw material cost in the final product price, there is a

strong correlation between the two and hence this product is less prone to cyclical

swings as the raw material cost is usually a pass through to the customers.

o Capacities are spread regionally and regionally short markets are being catered by

imports. Capacities are spread over multiple locations in Europe and a significant

portion of this capacity is constituted by low capacity older plants (150-300 TPD),

thereby negating any benefits of economies of scale vis-à-vis new and larger stand

alone capacities like the proposed 600 TPD plant of Polyplex.



ë Competitive Positioning of Polyplex / Project in Turkey:

o Our business model is based on strategic location which provides access

to large domestic (Turkey) and near shore markets (West & East Europe).

o Large target deficit markets like Bulgaria, Ukraine and Romania can be

most efficiently served out of Turkey.

ë Significant Fiscal/Duty Advantages:

o Exemption from Corporate Income Tax -till Turkey joins the EU.

o Customs Union with EU gives Turkey an edge over Asian manufacturers

due to nil customs duty on exports from Turkey to the EU as compared

with a normal duty rate of 6.5% or preferential duty rate under GSP of 3%

applicable to other Imports.

o In addition, the local industry is protected by way of trade measures like

AD/CVD measures applicable on exporters from specific countries.

Currently such measures are applicable against India and other Asian/

Middle East producers on imports in EU.

5.1.6. Recycling of plastic waste- Thailand

As another sustainability initiative, the Company is working on a project to recycle

film waste. The project, is being implemented in Thailand, under a 80% held

subsidiary of Polyplex Thailand, named EcoBlue Limited. The project cost is USD 2.1

million, including USD 0.3 million for working capital. The project will be financed by

Long term loan borrowing to the extent of USD 1.26 million and balance is funded

out of equity from shareholders.

Project Rationale:

ë Availability of captive waste helps in the ability to segregate various kinds of

waste at source, ability to handle the material better, minimizing the

contamination and reduce the dependence on external sources for materials.

ë Co-location with PTLûs units would result in savings in capital costs and at an

operational level savings in freight, packing & inventories.

This project is expected to commence commercial operations in H2 of 2013-14.

5.1.7. Off Line Coater - Turkey

In October 2012, the Board approved an investment in an Offline Coater at Polyplex

Europa Polyester Film Sanayi Ve Ticaret Anonim Sirketi (PE), Turkey.

Project Details:

ë The total Investment in this project is about Euro 5 million.

ë The funding of the project is being done out of internal cash accruals of PE.

61

ë Annual capacity is 2,300 MT pa.

ë The line is expected to start commercial production in H1 of 2013-14.

Project Rationale:

ë Provides an opportunity for profitable deployment of cash surpluses at PE.

ë Enhance our existing product offering and value proposition for the customer

at low capital cost.

ë Help enhance PEûs leadership position in its natural markets, as PE shall be

able to provide their customers a platform to jointly develop products and

innovate along with PE.

ë The project can leverage the research and development capabilities and

coating skill sets available within the Polyplex group.

ë There are no domestic producers in Turkey for PVDC coated and Peelable /

peelable-sealable films which gives PE an edge over competition in domestic

market.

ë Turkey has an edge over other Indian / Asian manufacturers on customs duty

on exports to EU / Turkey, as also lower logistics costs from Turkey to Europe

as against Asia to Europe.

5.2 Other Capital Expenditure As an ongoing effort to improve productivity, reduce losses, develop products and enhance

quality control, PTL and its subsidiaries in Turkey/USA undertake several small/medium

capital expenditures on the basis of cost benefit analysis. The total outlay over the next

12-15 months for such projects is estimated at about Bt. 400-500 million which includes

normal insurance spares and miscellaneous equipments for upkeep of the machinery.

6. Legal Dispute

-None-



7.1 Shareholding Structure 7.1.1 Securities

PTLûs current registered capital is Bt. 960 million of which, Bt. 800 million is paid up,

divided into 800 million ordinary shares each of Bt. 1 par value.

7.1.2 The shareholding structure of PTL as on 31st March 2013 is as follows:

Name Ordinary shares %

Polyplex Corp. Ltd. (PCL) 131,999,940 16.50

Polyplex (Asia) Pte. Ltd. (PAPL) 275,999,915 34.50

General public 392,000,000 49.00

Existing small shareholders* 145 0.00

Total 800,000,000 100.00

* Beneficial interest held by PCL and PAPL

PCLûs shareholding structure as of March 31, 2013 is shown as below:

Name %

Promoter/Sponsor Group 46.93

Institutional investors 10.69

Indian public (Non Institutional Investors) 31.84

Other shareholders 10.54

Grand total 100.00

PAPL is 100% held by PCL and together PAPL and PCL hold 51% of PTL.

7.1.3 Dividend payment policy

As per the dividend policy stated in the prospectus, dividend is paid out at rate of

about 40% of the annual net profit, taking into account economic conditions, growth

plans, future deployment opportunities, the Companyûs financial position and liquidity

and subject to the approval by the shareholders.

The Board of PTL has recommended a dividend of Baht 0.14 per share for FY 2012-

13, which will be paid on 22nd, August 2013, post approval by the Shareholders in

the Annual General meeting to be held on 26th, July 2013.

7. Shareholding Structure

63

The following graph shows the comparison of dividend payment for the last 9 years,

since the companyûs public listing in December 2004.

Net profits (Consolidated) Total Dividend Dividend- Bt/Share

Historic Net profits and Dividend Payout

Million Baht

Divid

end

- Bt

per

sha

re

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13



7.2 MANAGEMENT STRUCTURE

PTL has a board of directors and an audit committee. There is a provision to appoint other

need-based committees as may be appointed by the shareholders or the board of

directors from time to time. The board members and executive officers are qualified

persons with complete qualifications as per Section 68 of the Public Limited Companies

Act B.E. 2535 and as per the Notification of the Securities and Exchange Commission

(SEC) No. KorJor. 12/2543 Re: Application for Permission and Permission to Sell Newly

Issued Shares dated March 22, 2000.

Manager - SARALAM

Plant

SE Asia

SE Asia

Head-Production & Engineering- Sarafili / CPP

Corporate Finance

Head Sales & Marketing -

Sarafil Thick Films

Head Sales & Marketing

Audit Committee Company

Secretary Board of Directors

Managing Director

Head Operations

Chief Financial Officer

Others

Others

Quality Assurance & Technical Services

Investor Relations

Europe

Europe

Legal & Tax

America

America

TPM

Domestic market

Domestic market

Information Technology

Head-Saracote Plant

Costing and Accounts

HR & Industrial Relations

Business Head - SARALAM

Purchase & Stores

65

Details of the board of directors and other committees are as follows:

7.2.1 Board of Directors As of March 31, 2013, PTLûs Board of Directors is composed of eight members as

follows: 1. Mr. Manu Leopairote Board chairman and Audit Committee Chairman 2. Dr. Virabongsa Ramangkura Director (and Audit Committee member) 3. Mr. Shiraz Erach Poonevala Director (and Audit Committee member) 4. Mr. Sanjiv Saraf Vice Chairman 5. Mr. Praphad Phodhivorakhun Director 6. Mr. Pranay Kothari Director 7. Mr. Manish Gupta Director 8. Mr. Rohit Kumar Vashistha Managing Director

Mrs.Supritha Pai Kasturi is the secretary to the Board of Directors

Authorized signatories Any one of the four authorized signatories, namely Mr. Sanjiv Saraf, Mr. Pranay

Kothari, Mr. Manish Gupta, and Mr. Rohit Kumar Vashistha are empowered to sign with the Companyûs seal affixed.

Power and duties of the board of directors (the Board) The Board of Directors has the powers, duties and responsibilities to faithfully and

prudently conduct the operations of the Company in accordance with the Companyûs objectives and Articles of Association, applicable laws and resolutions of the shareholdersû meetings, for the benefit of the Company. A summary of the substantial duties and responsibilities of members of the Board of Directors is set out below: 1. to hold the annual general meeting of shareholders within 4 months from the

close of the accounting period;

2. to call the meeting of the Board of Directors at least once every calendar quarter;

3. to arrange for the preparation and submission of the audited balance sheet and profit and loss statement at the end of each accounting period to the shareholdersû meeting for its consideration and approval;

4. to authorize any one or several directors to perform any action on behalf of

the Board of Directors under the supervision of the Board of Directors, or granting the power-of-attorney to such designated director(s) to perform any action within the specified time as the Board of Directors may think fit; provided, however, that the Board of Directors has the sole discretion to revoke or modify such designated director or power-of-attorney as the Board of Directors may think fit.



For this purpose, the Board of Directors may authorize the Executive Committee, if any, to conduct any activities within the specified scope of work, duties and responsibilities of the Executive Committee. No authorization will entitle the Executive Committee to consider and approve the transaction which may cause a conflict of interest between the Executive Committee or any related person or interested person as the one party and the Company or its subsidiary companies as the other party. However, an exception is granted where the transaction conforms to the approved policies and rules of the Board of Directors;

5. to determine the goals, prospects, policies, business plans and budgets of the

Company, and to ensure that the management work performed by the Executive Committee, if any complies with the set policies. However, the Board of Directors needs to obtain the resolution of the shareholdersû meeting before entering into these legal transactions, for instance, increase or reduction of capital, issue of bonds, sale or transfer of all or any substantial parts of the Companyûs businesses to any third party, purchase or acceptance of transfer of other businesses, amendment to the Memorandum of Association, and so on.

The Board of Directors is also responsible for ensuring the Companyûs

compliance with the securities and exchange law and rules of the SET, for instance, rules concerning the entry into connected transactions and concerning purchase or sale of substantial assets, including any law governing the Companyûs business;

6. to review the management structure and appoint the Executive Committee,

General Manager and any subcommittees, as it deems appropriate;

7. to ensure that the Companyûs performance follows the business plans and budgets at all times;

8. to refrain from conducting any similar or competitive business, participating as

partner in an ordinary partnership or partner with unlimited liability in a limited partnership or director in a private company or in any other firm, company or corporation operating the business similar to or in competition with the Company, regardless of whether for his/her own benefit or for othersû benefit. However, an exception is granted where the director provides notice to the shareholdersû meeting in advance of his/her effective appointment as director of the Company; and

9. to notify the Company without delay of the event of likelihood that the director

may have direct or indirect interests as a result of (i) the Companyûs entry into any agreement; and (ii) his/her increased or decreased holding of shares or bonds in the Company or its subsidiary companies.

67

7.2.2 Audit Committee

The Companyûs Audit Committee comprises of: 1. Mr. Manu Leopairote Audit Committee Chairman 2. Dr. Virabongsa Ramangkura Audit Committee member 3. Mr. Shiraz Erach Poonevala Audit Committee member

Mrs.Supritha Pai Kasturi is the secretary to the Audit Committee.

Power and duties of the Audit Committee 1. to review the sufficiency, credibility and objectivity of the financial reporting of

the Company by coordinating with the external auditors and management responsible for preparing the quarterly and yearly financial reports. The Audit Committee may suggest issues or matters to be included for review or audited by the external auditors during its audit of the Company;

2. to review the adequacy and effectiveness of internal control systems and

internal audit functions by coordinating with the external auditors and internal auditors (if any);

3. to review compliance with the Securities and Exchange Acts, Regulations of

the SET, and any other relevant laws;

4. to consider and advise on the appointment of the external auditor including the audit fee, taking into account the creditability of the external auditor, the adequacy of its resources, the firmûs audit engagements, and the experience of its supervisory and professional staff; as well as to have a meeting with the external auditor, once a year without the presence of the Executive directors or any other member of the management team.

5. to review the connected transactions and ensure proper compliance with all

the SET regulations and also to ensure adequate disclosures or conflict-of-interest disclosures;

6. to take care of any other matters assigned to it by the Board of Directors,

such as reviewing the Companyûs financial and risk management policies, reviewing compliance with the Code of Corporate Conduct of the management, and reviewing with the companyûs management, all important reports which must be disclosed to the public according to the law (e.g. Management Discussion and Analysis (MD&A), etc.);

7. to report the activities of the Audit Committee in the companyûs annual report,

which must be signed by the chairman of the Audit Committee, and to express in such annual report the Audit Committeeûs opinion on (i) the



accuracy and completeness of the procedures for the preparation of the report and information disclosure, (ii) the sufficiency of the internal control system of the Company, (iii) opinion on the suitability of the external auditor and appointment for another term, (iv) the number of Audit committee meetings held in the previous year and the attendance of each member in such meetings, (v) opinion on the connected transactions and any transactions that may lead to conflict of interest (vi) the compliance by the Company with rules and regulations of SET, SEC and other applicable laws, and report on any information that the shareholders and investors should be aware of under the scope of power of the duty that has been assigned by the Board of Director;

8. to report the performance of the Audit Committee to the Board of Directors at

least once every calendar quarter; and

9. to express its opinion on the performance, appointment, removal and determination of remuneration of the internal auditor.

7.2.3 Management PTLûs senior management during 2012-13 consisted of seven persons as below:

1. Mr. Rohit Kumar Vashistha Managing Director 2. Mr. Vinod Sureka Chief Financial Officer 3. Mr. Manav Singh** Business Head - SARALAM division 4. Mr. Suresh Sundaraman* Head - Operations 5. Mr. Ashish Ghosh Head - Sales & Marketing 6. Mr. Manoj Sinha* Head - Sales & Marketing -Thick PET film 7. Mr. Ramesh Gupta* Business Head - SARALAM division * Joined in the mid of year

** Has been transferred to Polyplex USA LLC as Head of Sales & Marketing.

Power and duties of Managing Director

1. to monitor and supervise the day-to-day business operations and management

of the Company.

2. to undertake or perform duties in line with the policy, plan and budget

approved by the board of directors and/or the Executive Committee (if any) of

the Company.

3. to perform as the authorized person of the Company in administering the

business in line with the objective, regulations, policy, rules, stipulations, orders

and resolutions of the meeting of the Board and/or resolutions of the meeting

of shareholders.

69

4. to appoint and manage the performance of the working committees to ensure benefit and efficiency as well as transparency in management, and be authorized to appoint and/or assign any person to specifically perform on his behalf. Such delegation of power and authority shall come under the purview of such certain authorization letter and/or comply with the regulations, stipulations or orders issued by the board of directors and/or the Company.

5. to determine mission, objectives, framework and policy of the Company including

orders and supervision in overall for optimum benefit in administration.

6. to follow up and assess the Companyûs operational results on a regular basis to cope with both internal and external risks.

7. to consider and approve expenditure spending in the normal course of

business operations, such as transacting with banks regarding deposit accounts or procurement of raw materials for production.

8. to consider the recruitment and employment of personnel as well as transfer,

rotation across functional lines/departments/divisions, or termination of employment of personnel, and determine rate of wages, remuneration, bonus and welfare package relating to personnel.

9. to issue orders, regulations, announcements and memorandum to ensure the

operations come out in line with the policy and for the benefit of the Company as well as to maintain discipline in the organization.

10. to perform any other duties as occasionally assigned by the Board of Directors.

Power to approve any transactions (i) which may cause a conflict of interest with the

Company or its subsidiary; or (ii) in which the interests of the Managing Director or other interested person may be in conflict with the Company or its subsidiary, under the applicable rules and regulations of the SET, do not fall within the scope of the powers and authorities of the Managing Director to act at his/her own discretion or to designate any person to act on his/her behalf. Typically, these transactions need the consideration and approval of the Board of Directors and/or the shareholdersû meeting in accordance with the Articles of Association of the Company and subject to applicable laws.

7.2.4 Role of Company Secretary The Company has appointed Mrs. Supritha Pai Kasturi as the Company Secretary.

She is a qualified Chartered Accountant from the Institute of Chartered Accountants of India and has the requisite knowledge and experience to perform this function. She also performs the role of the Secretary to the Board of Directors and to the Audit Committee.



Responsibilities of Company Secretary: ë Arrange the Board of Directorsû Meetings, Audit Committee Meetings and the

Shareholdersû Meeting in accordance with the relevant laws and regulations. ë Prepare the Agenda/ supporting documents for the above meetings and

ensure that the same is circulated to the concerned members, at least a week in advance of the meeting date, to allow sufficient time to review the documents.

ë Prepare the Minutes of all the above Meetings and monitor subsequent compliance with the resolutions of those Meetings.

ë Ensure that disclosures of information to regulatory agencies (SET/SEC and other relevant regulatory agencies) are made in accordance with the applicable laws and regulations.

ë Execute any additional duties assigned by the Board of Directors from time to time

7.2.5 Selection of members of the board of directors, independent directors and the

audit committee The Company has no Nomination Committee to select and nominate any persons to

be appointed as directors of the Company. In this regard, the Board will undertake the selection process, taking into account the experience, expertise and competency of the prospective persons and the qualifications required as per the criteria prescribed in the Public Limited Companies Act B.E. 2535 and as announced by the SEC and relevant agencies, as also the provisions of Articles of Association of the company. Nomination will be made at the shareholdersû meeting and election made under the procedures prescribed in the Companyûs regulations as below:

I) Selection of members of the Board of Directors

a) The Company is required to have a board of directors consisting of at least

5 persons. The board of directors must elect one of their members to be

the Chairman and may elect another member to be a Vice-Chairman and

any other positions as they see fit. At least one-half of the directors must

reside in Thailand.

A director need not be a shareholder of the company.

b) A meeting of shareholders must elect the directors in accordance with the

following procedures and rules:-

a. Each shareholder has one vote for each share held;

b. Each shareholder may exercise the votes in electing one or more

persons to be the directors but the votes are indivisible; and

71

c. The person who obtains the highest votes will be elected as a director in respective order according to the required number of directors, but if two or more persons obtain equal votes, the Chairman must exercise a casting vote.

c) At every general meeting of shareholders, one-third (1/3) of the directors,

or if it is not a multiple of three, then number nearest to one-third (1/3) must retire from office.

d) There must be a drawing by lots to determine the directors retiring on the

first and second years following the registration of the company. In each subsequent year, the directors who occupy the position for the longest period must retire.

A retiring director is eligible for re-election.

II) Selection of members of the Audit Committee/Independent Director Audit Committee is composed of at least three independent directors with an

office term of 2 years. The Company has a policy to select and nominate Audit Committee / Independent director in compliance with the SEC Notification no. KorJor. 12/2543 regarding application for and approval of offering of newly issued shares, with each of whom to have the following qualifications: a) Hold shares not exceeding 5% of the total shares with voting rights of the

Company, an affiliated company, a subsidiary company, an associated company or a juristic person that may have conflict of interest,

b) Not be an employee or a staff member or an advisor who receives a

regular salary or a person with controlling power of the Company, an affiliated company, a subsidiary company, an associated company or a juristic person that may have conflict of interest,

c) Not be a person having blood relation or legal relation in the manner of

being any family member or spouse thereof of the executives, the major shareholders, the persons with controlling power or any persons to be nominated to the managerial positions or the persons with controlling power of the Company or a subsidiary company.

d) Have no business relation with the Company, an affiliated company, a

subsidiary company, an associated company or any juristic person that may have conflict of interest in the manner that may hinder the use of individualûs independent judgment, and have no other nature that will hinder the individualûs provision of independent opinions relating to the Companyûs operations.



In addition, at least one independent director appointed as an Audit Committee

member must have sufficient knowledge and experience in finance and accounting

areas so that he/she can review the reliability of the financial statements. Other

qualifications must also be taken into account, comprising business experience,

expertise in the field related to the business and ethical qualifications, to ensure

maximum benefits to the Company.

The appointment of Audit Committee members is subject to the same criteria and

procedures as those in the appointment of directors of the Board. The vacating

Audit Committee member upon completion of his/her office term of 2 years may be

re-appointed by the Board of Directors for another term. In the event that there is a

vacancy on the grounds other than the completion of office term, the Board shall

select and appoint the person who possesses the required qualifications to fill the

vacancy to complete the number of the Audit Committee members as prescribed by

the Board. The newly appointed Committee member shall be in the office only for

the remaining period of the office term of the vacating member.

7.2.6 Remuneration for management a. Monetary remuneration Directors Before the transformation into a public company, PTL had five directors. These

directors did not receive any meeting allowance from the Company. Since transformation into a Public Company in 2004, the Company has 8 Directors on the board. Until FY 2007-08, the Directors had renounced their right to receive any remuneration. However, from FY 2008-09, the independent directors are receiving remuneration as approved by the shareholders in the Annual General Meeting of the Company.

For the FY 2012-13, The actual remuneration paid to the Independent

Directors for FY 2012-13 is Baht 4,200,000 as against the amount approved in the Shareholder meeting of Baht 4,200,0000. Details of the same are given under:

S.No Name of Director Amount Approved (Baht) Actual Paid (Baht)

1 Mr. Manu Leopairote Baht 125,000 per month Baht 1,500,000 2 Dr. Virabongsa Ramangkura Baht 75,000 per month Baht 900,000 3 Mr. Praphad Phodhivorakhun Baht 75,000 per month Baht 900,000 4 Mr. Shiraz Erach Poonevala Baht 75,000 per month Baht 900,000

Note: The total payment made in FY 2012-13 is Baht 5,250,000 which includes the

remuneration of Baht 1,050,000 for Janû12-Marû12 period, paid in May 2012.

73

In addition to the above remuneration, meeting sitting fees of Baht 10,000 per

meeting attended has been paid to the Audit Committee members, which is

as per the amount proposed and approved in the Shareholder meeting in July

2012.

For the FY 2013-14, it is proposed to fix a remuneration of Baht 75,000 per

month, same as in the previous year, to all the independent directors as

mentioned below:

1. Mr. Manu Leopairote

2. Dr. Virabongsa Ramangkura

3. Mr. Praphad Phodhivorakhun

4. Mr. Shiraz Erach Poonevala

Mr.Manu Leopairote, in his capacity as the Chairman of the Board of Directors

and the Chairman of the Audit Committee would be entitled to an additional

remuneration of Baht 25,000 per month, for each role.

For the Audit Committee, each member would be entitled to a sitting fee of

Baht 10,000 per meeting attended.

The above remuneration package, to the Independent directors and Audit

committee members, would be proposed to the Shareholder meeting to be

held in July 2013 for their consideration and approval.

The remuneration details of the senior management, including 1 executive

director of PTL is as below :

Remuneration (In ù000 Baht) 2008/09 2009/10 2010/11 2011/12 2012/13

(Apr-Mar) (Apr-Mar) (Apr-Mar) (Apr-Mar) (Apr-Mar)

Number of executives 6 6 4 5 7*

Salaries (In ù000û Baht) 9,389 9,753 7,611 10,054 11,113

Bonus and Others 8,199 10,325 10,292 19,257 14,576

(In ù000û Baht)

Total 17,588 20,078 17,904 29,311 25,689

* Including some persons for part of the year only



b. Other remuneration

Directors None

Executives None

7.2.7 Personnel As of March 31, 2013, PTL had a total workforce of 577 persons, 536 of whom are

personnel at the plant in Rayong Province and 41 at the head office in Bangkok. The Company also has 52 expatriates, 13 of whom are at the head office in Bangkok and the remaining 39 in Rayong.

Department Number of employees As of As of As of As of As of Mar 31, Mar 31, Mar 31, Mar 31, Mar 31, 2009 2010 2011 2012 2013

1. Executives 6 7 4 5 7 2. Production 137 162 161 171 180 3. Commercial, IT,Personnel & Admn. 47 35 37 42 46 4. Sales and Marketing 18 21 25 24 26 5. Chips plant 23 21 22 21 34 6. Metallizer 37 37 37 35 35 7. Extrusion Coating 38 53 46 55 70 8. Cast Polypropylene Project 2 51 56 52 53 9 Silicone Coating Project 23 55 54 10. PET Thick Film Project 6 70 11. Blown PP Film Project 1 2 Total 308 387 411 467 577

Employee (non-executive) remuneration

(Bt. thousand) Remuneration 2008/09 2009/10 2010/11 2011/12 2012/13 (Apr-Mar) (Apr-Mar) (Apr-Mar) (Apr-Mar) (Apr-Mar)

No. of employees 302 380 407 462 570 Salaries & Wages 71,072 78,272 101,857 111,450 151,656 Overtime pay 6,655 7,350 11,206 13,527 18,120 Bonus 16,233 15,408 27,941 26,182 30,851 Provident fund* 1,841 2,102 2,489 2,928 4,338 Others 42,303 47,183 55,705 62,883 79,809 Total 138.104 150,316 199,198 216,770 284,774

* The Company started contributing to the provident fund since September 2004. The contribution of

the employee and employer was 4% until FY 2010-11. Since 2011-12, the company revised the PF contribution rates and depending on the length of service, companyûs contribution is now in the range of 4-7%.

75

There has been no labor dispute for the past years.

HRD Policy

The company realizes the importance of its staff as they are valuable assets and

play a major role in the success and growth of the company. Therefore it has a

policy to develop the efficiency, knowledge and skills of its staff at all levels by

having well organized training programs on a periodic basis. Training programs are

designed to improve various aspects of work life like technical competence, team

building, and enhancement of leadership skills, time management skills etc thereby

improving the quality of the working life of the employees. Feedback of employees

participating in such trainings is taken in order to help improvement of quality of

seminars and trainings to be conducted in future.



8.1 Corporate governance

8.1.1 Policy on Corporate governance

Polyplex realizes the significance of good corporate governance and makes every

effort to implement the Corporate Governance principles laid down by the Stock

Exchange of Thailand. The company has firm belief in transparency, accountability

and ethical conduct in carrying out its operations. Accordingly, the Company has

formulated a policy which emphasizes regular disclosures to the public and the

shareholders. In addition, the Company adopts strict internal controls and audits in

recognition of their importance. It also has several risk management policies, keeping

in mind a good relationship and business ethic towards business partners,

shareholders and all concerned parties.

8.1.2 Rights of shareholders

The Company recognizes the importance of equal rights of all shareholders and

considers all the shareholders as owners of the Company irrespective of the

percentage of shares owned.

The Company has a policy to report to shareholders regularly on progress of

operations, either directly or through the Stock Exchange of Thailand or through

information on its website after listing. Shareholders will be given fourteen days

advance notice of all shareholder meetings, including the meeting agenda and

related information. The shareholders would be encouraged to participate in the

general meetings and their views and comments would be noted and followed up. In

accordance with the good governance practice relating to equitable treatment of

shareholders, the company also invites the shareholders to propose additional

agenda for the Annual general meeting of the shareholders and gives sufficient time

(about 30 days) to propose the Agenda.

The shareholders also have the following rights which are exercised in the Annual

Shareholding meetings:

ë Re-appointment of Directors retiring by rotation and approval of the Director

remuneration

ë Approval of Auditor appointment and remuneration

ë Approval of dividend payment

8. Good Corporate governance & Internal Control

77

8.1.3 Rights of stakeholders

PTL has always provided equal importance to the requirements of all its

stakeholders as under:

ë Personnel: PTL considers all its personnel to be valuable assets, critical to the

success and growth of the organization. The Company is committed to

providing a quality oriented work environment, with special emphasis on

safety, along with fair and equitable remuneration. Apart from basic salary,

Performance linked Bonus, Provident Fund contribution and Social Security

Contribution, the Company also provides certain other benefits to its

employees such as Overtime pay, Housing Allowance, Transport Allowance,

Telephone allowance, Medical Insurance, Life Insurance coverage etc.

ë Business partners: It has always been the policy of PTL to develop long

standing and growing relationships with all its business partners based on

mutual benefit and guided by good business ethics. The company values the

long standing relationship with its business partners, whether it is the banks

that support the trade finance and project financing requirements of the

Company, or the strong Distributors/Agent network across various parts of the

globe, which help in market development and ensure smooth continuity of the

business operations for the company.

ë Competitors: PTL will always abide by the framework of fair competition and

would work towards market development and growth to the mutual benefit of

the industry.

ë Creditors: To abide by the loan covenants and provide all information about

the progress of the Company to its creditors as may be required for smooth

business dealings.

ë Customers: PTL is committed to creating customer satisfaction by ensuring

consistency in the quality of its products and offering value proposition to its

global customer base.

ë Shareholders: PTL strives to conduct its business in a transparent and

efficient manner with a view to constantly strive to enhance shareholder value.

New project investments will be evaluated prudently to ensure good returns

and increase value to the shareholders.



ë Community/Society: PTL realizes and cares for the safety of society,

environment and quality of life of people. It places priority on activities relating

to the community and the society and also by compliance of applicable laws

and regulations relating to the same. During FY 2012-13, the company

organized Blood donation camps and encouraged employees to donate blood,

organized Seedling plantations to promote nature conservation and gave

donations to Orphanage.

8.1.4 Shareholdersû meetings

The Company has a policy to enable shareholders to attend meetings without undue

effort. It endeavors to organize the shareholdersû meeting with equitable treatment

for all participants and in strict accordance with legal procedures, from meeting

invitations, proxy form for those who are unable to attend the meeting, and

distribution of meeting documents to inform all concerned of the meeting agendas.

The meeting venue and time will be convenient while the meeting session will allow

adequate time for shareholders to ask questions on business operations or voice

their opinion.

8.1.5 Leadership and vision

The Board of Directors is the forum for review of plans, vision, strategies and key

policies. Elaborate budgets have been formulated for all functional areas in the

Company and a system of Key Result Areas (KRAs) has also been implemented for

each department and individual as also at the corporate level to align interests and

priorities across the organization. The Board of Directors would play a leading role in

regular review of the actual operations vis-à-vis budgets as well as other key perf

ormance indicators.

79

8.1.6 Conflict of interest

The policy is based on the principle that any decision to be made by personnel at

all levels in business operations must be in the best interest of the Company. It is

the duty of all personnel to avoid any transactions and/or dealings which could

result in financial losses to the Company and result in personal monetary benefit.

The Audit Committee is entrusted to watch over and review the internal controls and

audit function to ensure their efficiency and also ensure adequate disclosures to be

made as per the SEC/SET guidelines.

8.1.7 Business ethics

PTL has a code of conduct for all personnel who emphasize observance of ethical

practices, honesty and accountability. Responsibility towards all stakeholders and

external agencies is encouraged in order to foster a good corporate culture and

social responsibility.

8.1.8 Check and balance by non-executive directors

The Company has altogether eight directors as detailed below: Status Executive Non-Executive Audit Directors Directors Committee

Shareholdersû representative Directors 1 3 - Independent Directors - 1 3

8.1.9 Integration or delegation of title and authority

The Chairman of the Board of Directors is an independent director and is also the

Chairman of the Audit Committee. Independent directors constitute 50% of the

Board of Directors and thus composition of the Board would ensure fair and

effective management monitoring. The Managing Director is the CEO in charge of

day-to-day operations and has specified powers with certain key decisions requiring

approval by the Board of Directors.

8.1.10 Remuneration for directors and executives

The remuneration of the Board of Directors and the Audit Committee is proposed to

the Shareholder meeting for their consideration and approval. The Managing

Directorûs remuneration is fixed by the Board of Directors in discharge of duties as

the CEO of the Company. The remuneration of the management is open for review

by the shareholders who may set the appropriate policies and guidelines on this

matter.



8.1.11 Board meetings The meetings of the Board of Directors are usually convened at least once every

quarter to review the operations / quarterly financial results and other matters. There were six Board meetings conducted during the FY 2012-2013.Attendance of directors is as follows:

Name Position Attendance

Mr. Manu Leopairote Board Chairman & Audit Committee 6/6 Chairman Dr. Virabongsa Ramangkura Director & Audit Committee member 5/6 Mr. Shiraz Erach Poonevala Director & Audit Committee member 6/6 Mr. Sanjiv Saraf Vice Chairman of the Board 1/6 Mr.Rohit Kumar Vashistha Managing Director 6/6 Mr. Praphad Phodhivorakhun Director 5/6 Mr. Pranay Kothari Director 3/6 Mr. Manish Gupta Director 3/3*

* Attendance for meetings held after 31st October, 2012, after being appointed as a

Director in the place of Mr. Ranjit Singh who retired.

8.1.12 Supporting committees or sub-committees

The Board of Directors has recommended and shareholders have approved an Audit

Committee consisting of three independent directors. The Audit Committee members

have the requisite qualifications under the relevant SET rules & guidelines. The

powers and allocation of work have been clearly defined by the shareholders and

include review of internal control systems, review of financial reports, connected

transaction or transaction involving conflict of interest. The term of the Audit

committee is 2 years and may be renewed by the Board of Directors every 2 years.

8.1.13 Internal control and audit system

The Board of Directors exercises control through setting of annual budgets and

operational objectives, periodical review of which is done from time to time.

Meanwhile, the Audit Committee oversees the internal controls and audit in the

Company and suggests measures for improvement.

8.1.14 Board of Directorsû report

The Board of Directors is responsible for the Companyûs financial statements. As a

part of the annual report, the directors have commented on the financial results of

the Company.

81

8.1.15 Relationship with investors

The Company places significance on the timely disclosure of accurate information to its

shareholders and investors. It participates in the SET Opportunity day to disseminate

information about the Company and its operations to investors and analysts. The

company also organizes factory visit for the shareholders, analysts and potential

investors, through the SET. In the FY 2012-13, the factory visit had to be postponed

due to the several ongoing expansions at the factory site. The company plans to

organize the visit in the Julyû13-Septû13 quarter. As regards investor relations, the

Company has a well-developed IR section in the company website. Investor queries

can be sent to the IR website ([email protected]) and will be

responded to by the management of PTL. The Investors/ Analysts can also register

their e-mail IDûs and receive an IR alert message, when any information is updated

on the Companyûs website. Further information regarding the Company may be

obtained by contacting at tel. +66 26652706 - 8.

Measures to prevent use of internal information for executivesû personal benefit

The Company has a policy on supervision of usage of internal company information

by its directors and management for their own benefit. The directors and

management who come to possess internal company information are not permitted

to buy or sell the securities of the Company for a specified period prior to its

announcement of operating results.

8.2 Internal Controls At the 3/2013 board of directorsû meeting of PTL held on May 27, 2013 with all three audit

committee members also attending, the board assessed PTLûs internal control by means of

making inquiries with its management. Based on the assessment of PTLûs internal control

system in five aspects, namely organization and environment, risk management, control of

the executivesû operation, information technology system & information communication and

follow-up system, the board viewed that PTL has adequate internal control with regard to

the making of transaction with its major shareholders, directors, executives, or persons

connected with the above mentioned persons.

The board considered that the Companyûs adequate and appropriate internal control and

follow-up of the operations would be able to safeguard its assets against any illegitimate

use by the executives.



8.3 Connected Transactions 8.3.1 A summary of the connected transactions between PTL and the connected

parties during the past three years is as follows - Party having Transaction Amount conflict Description of (Million THB) of interest Relationship transaction Pricing policy 2010-11 2011-12 2012-13

Polyplex PCL is the PCL made advance The price of the 1.2 6.9 24.1 Corporation Companyûs major payments on behalf of the transaction Ltd. (PCL) shareholder, Company for administrative between PCL and owning directly and expenses, which were the Company was indirectly the 51% mainly travelling expenses a normal price in of the Companyûs of employees, general business share capital and accommodations for practice and was the two parties employeesû family, the price as have common educational fees for actually paid by directors. employeesû children, PCL in advance insurance claims of for the Company employees, insurance without any extra premium payments, project charge by PCL. related expenses etc. The Company has given the appropriate accounting treatment to these expenses and/or collected these amounts from the employees and paid them back to PCL.

Polyplex PCL is the PTL made payments on The price of the 0.1 0.1 0.14 Corporation Companyûs major behalf of PCL, which were transaction Ltd. (PCL) shareholder, mainly traveling and other between PCL and owning directly and expenses of PCL the Company, PR indirectly the 51% employees and their and PE was a of the Companyûs families. normal price in share capital and general business the two parties practice and was have common the price as directors. actually paid in advance without any extra charge.

Polyplex PCL is the Purchase of Raw material As per Transfer 1,052.2 806.9 533.8 Corporation Companyûs major - Polyester Chips and Pricing policy of Ltd. (PCL) shareholder, Polyester Film by all the PCL (Study done owning directly and subsidiaries of PTL by Ersnt & Young indirectly the 51% including PTL and TNMM of the Companyûs [Transactional Net share capital and Margin] Method the two parties recommended for have common Transfer pricing directors.

83

Party having Transaction Amount conflict Description of (Million THB) of interest Relationship transaction Pricing policy 2010-11 2011-12 2012-13

Polyplex PCL is the Sale of Raw material - For Sale of Chips - - 36.6 Corporation Companyûs major Polyester Chips to PCL - to PCL, as per Ltd. (PCL) shareholder, from PTL Transfer Pricing owning directly and policy of PCL indirectly the 51% (Study done by of the Companyûs Ersnt & Young share capital and and TNMM the two parties [Transactional Net have common Margin] Method directors. recommended for Transfer pricing.

Polyplex PAPL is the Payment of interest by Loans carried a 3.9 (Asia) Pte Companyûs major Polyplex Resins Sanayi Ve fixed interest rate Ltd (PAPL) shareholder, Ticaret A.S, on the loans of 4.5% pa until owning directly borrowed from PAPL September 2012, 34.5% of the but have been Companyûs share made interest free capital and the two w.e.f 1st October parties have a 2012. common director.

Polyplex PAPL is the Acquisition by Polyplex At cost to PAPL - - 244 (Asia) Pte Companyûs major Europa Polyester Film Ltd (PAPL) shareholder, Sanayi Ve Ticaret A.S, owning directly from PAPL, a 67% stake 34.5% of the in Polyplex Resins Sanayi Companyûs share Ve Ticaret A.S capital and the two parties have a common director.

8.3.2 Necessity and reasonableness of the connected transaction

The connected transaction involved the advance payments made by PCL on behalf

of the Company and its subsidiaries for administrative expenses. The payments were

made for such expenses as transportation, accommodations for employeesû family,

educational fees for employeesû children, insurance claims of employees, project

related expenses etc. The Company and its subsidiaries have given the appropriate

accounting treatment to these expenses and/or collected these amounts from the

employees and paid them back to PCL. The reimbursement of advances/expenses

was to PCL was at the actual prices incurred without any extra charge by PCL.

The connected transaction also involved the advance payments made by the

Company and its subsidiaries on behalf of PCL for administrative expenses, which

were later re-imbursed by PCL.



During the year, the connected transaction also involved some purchases of Raw

materials i.e Polyester Chips and Polyester Film from PCL. All purchases were made

at Armûs Length Pricingas recommended in the Transfer Pricing study carried out by

external agencies at various locations.

Apart from the above, the connected transactions during the year also involved the

acquisition by Polyplex Europa Polyester Film Sanayi Ve Ticaret A.S.(çPEé), of 67% of

shares of Polyplex Resins Sanayi Ve Ticaret A.S (çPRé), Turkey, from Polyplex (Asia)

Pte Ltd (çPAPLé). PAPL is holding 34.5% stake in the Company and this transaction

is hence, considered to be a connected party transaction as per SEC guidelines. All

disclosures and compliances in relation to the SEC and SET guidelines for

connected party transaction have been complied with. The interested Directors

abstained from voting on this Agenda relating to the connected transaction. The

Audit Committee and the Board of Directors are of the opinion that the entry into

this transaction is reasonable and at a fair value and would enable shareholders of

PTL to benefit from this new business opportunity and also diversify the risks and

cyclicality associated with Polyester Film industry.

8.3.3 Measures or procedures for approval of the connected transaction

The audit committee of PTL has examined the connected transaction described in

the table above and viewed that it is in accordance with the normal business

practice. For the transaction of share acquisition described above, which is not a

normal business transaction, prior approval of the Board of Directors was taken

before execution of the transaction. For all normal business transactions in the future

such as purchase and sale of material, reimbursement of expenses, the Company

can undertake the transactions and inform the audit committee and the Board of

Directors on a quarterly basis.

For any other future connected transactions, which are not normal business

transactions, the Company will assign the concerned units to gather the relevant

information and provide it to the audit committee to be used as a basis for its

consideration on those transactions as to whether they are consistent with the

normal business practice and the market price. The Company would ensure that it

follows the applicable regulations of the SEC and SET in this regard. The audit

committee has to consider and inform the board of directors for the approval. The

directors who have a conflict of interest may not partake in the giving of comments

on those connected transactions.

85

8.3.4 Policy for potential connected transactions

For any connected transactions that may take place in the future, the Company has

a policy to set appropriate conditions on the said transactions based on the reasons

and necessity of the Company. The connected transactions performed over the past

period were advance payments, made for such expenses as transportation,

accommodations for employeesû family, educational fees for employeesû children,

insurance claims of employees etc and also some raw material procurements as

explained above. There were no extra charges by the parent company regarding

such cost and expenses as brand name and R & D, and so on. In performing any

future connected transactions, PTL board of directors will comply with the law

governing securities and exchange and the regulations, notifications and orders of

the Stock Exchange of Thailand, as well as the regulations regarding disclosure of

information about connected transactions and acquisition or disposal of core assets

of companies or subsidiary companies according to the accounting standards

defined by the Institute of Certified Accountants and Auditors of Thailand.

Where the connected transaction involves any person who may have a conflict of

interest, the Company will arrange for the audit committee to give opinion on the

necessity and appropriateness of that transaction. In case the audit committee has

no expertise in any such transaction, the Company will have an independent expert

or its external auditor provide opinion on that transaction to be used as a basis of

decision-making by the board of directors or the shareholders, as the case may be.

The Company will disclose such connected transactions in the notes to the financial

statements duly audited by its external auditor.



9.1 Financial statements Auditor

Year Name of auditor CPA no. Auditing firm

2012/13 (April 1, 2012- Mr. Termphong 4501 Ernst & Young Office Limited

Mar 31, 2013) Opanaphan

2011/12 Mr.Narong Puntawong 3315 Ernst & Young Office Limited

(April 1, 2011-Mar 31, 2012)


(April 1, 2010-Mar 31, 2011)


(April 1, 2009-Mar 31, 2010)


(Apr 1,2008-Mar 31, 2009)

Auditorûs report

For all the past years, including the year ended on March 31st 2013, the Auditors have

given an unqualified opinion that the financial statements were fairly presented and

prepared in accordance with generally accepted accounting principles.

The financial statements of last 3 years, for both Consolidated and Standalone, latest being

the year ended on 31st March 2013, have been given for the purpose of comparison and

for the appreciation of the change in revenues and profitability over the years.

9. Financial Position and Operational Performance

87

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,042

0.58

29,64

1 0.4

7 75

,923

0.94

1,231

,009

10.32

1,6

81,81

0 14

.09

1,468

,337

8.92

Curre

nt in

vest

men

ts

164,9

47

2.26

0 -

78,00

0 0.9

6 16

4,947

1.3

8 0

- 94

,001

0.57

Acco

unts

rece

ivabl

e 1,1

81,33

9 16

.17

805,8

76

12.86

76

0,558

9.3

8 1,8

96,15

9 15

.89

1,396

,692

11.70

1,3

84,38

2 8.4

1 Am

ount

s du

e fro

m re

lated

par

ty

- -

- -

- -

221,8

16

1.86

- -

- -

Inve

ntor

ies

470,7

77

6.45

564,6

04

9.01

672,0

36

8.28

1,732

,304

14.52

1,6

23,79

2 13

.60

1,741

,438

10.58

Ot

her c

urre

nt a

sset

s 13

2,752

1.8

2 81

,238

1.30

120,1

78

1.48

212,3

33

1.78

414,6

24

3.47

193,4

24

1.18

Tota

l Cur

rent

Ass

ets

1,99

1,85

7 27

.27

1,48

1,35

9 23

.64

1,70

6,69

5 21

.04

5,45

8,56

8 45

.74

5,11

6,91

8 42

.86

4,88

1,58

2 29

.66

Non-

Curre

nt A

sset

s Re

stric

ted

bank

dep

osits

11

,864

0.07

Inve

stm

ent i

n su

bsid

iary

1,936

,415

26.51

1,3

13,49

2 20

.96

1,355

,547

16.71

0

- 0

- 0

- La

nd, p

rem

ises

and

equip

men

t-net

3,1

15,04

2 42

.65

3,118

,711

49.77

4,9

97,59

5 61

.61

5,979

,206

50.11

6,3

60,04

9 53

.27

11,44

7,677

69

.56

Inta

ngib

le as

sets

-net

-

- -

- -

- 5,2

28

0.04

5,882

0.0

5 10

,175

0.06

Adva

nce

paym

ent f

or p

urch

ases

of a

sset

s 0

- 34

4,485

5.5

0 37

,504

0.46

0 -

447,4

72

3.75

90,62

0 0.5

5 Ot

her n

on c

urre

nt a

sset

s 26

0,825

3.5

7 8,6

04

0.14

14,64

7 0.1

8 48

9,899

4.1

1 8,6

50

0.07

14,64

7 0.0

9 To

tal N

on-c

urre

nt A

sset

s 5,31

2,28

2 72

.73

4,78

5,29

2 76

.36

6,40

5,29

2 78

.96

6,47

4,33

3 54

.26

6,82

2,05

3 57

.14

11,574

,983

70

.34

Tota

l Ass

ets

7,30

4,13

9 10

0.00

6,26

6,65

0 10

0.00

8,11

1,98

7 10

0.00

11

,932

,901

10

0.00

11,93

8,97

0 10

0.00

16

,456

,565

10

0.00


ANNUAL REPORT 2012 - 2013 Po

lyple

x (T

haila

nd) P

ublic

Com

pany

Lim

ited

Bala

nce

Shee

t Un

it: Bt

. 000

ûs

Un

cons

olid

ated

Co

nsol

idat

ed

20

09/2

010

2011

/201

2 20

12/2

013

2010

/201

1 20

11/2

012

2012

/201

3

April

-Mar

ch

April

-Mar

ch

April

-Mar

ch

April

-Mar

ch

April

-Mar

ch

April

-Mar

ch

Am

ount

%

Am

ount

%

Am

ount

%

Am

ount

%

Am

ount

%

Am

ount

%

Li

abilit

ies

& Sh

areh

olde

rsû E

quity

Cu

rrent

Liab

ilities

Ac

coun

ts p

ayab

le 82

1,531

11

.25

602,3

27

9.61

665,0

78

8.20

1,290

,564

10.82

1,3

38,06

6 11

.21

1,178

,378

7.16

Long

-term

loan

s-du

e wi

thin

one

year

25

6,001

3.5

0 27

1,996

4.3

4 37

1,427

4.5

8 38

7,200

3.2

4 36

3,760

3.0

5 45

5,194

2.7

7 Sh

ort-t

erm

loan

s fro

m fi

nanc

ial in

stitu

tions

-

- 80

,000

1.28

385,0

00

4.75

194,4

84

1.63

326,7

45

2.74

1,044

,440

6.35

Inco

me

tax

paya

ble

- -

- -

- -

- -

20,89

1 0.1

7 71

0.0

0 Ot

her c

urre

nt li

abilit

ies

106,4

58

1.46

79,21

5 1.2

6 10

7,546

1.3

3 18

9,958

1.5

9 16

8,621

1.4

1 27

0,272

1.6

4 To

tal c

urre

nt li

abilit

ies

1,18

3,99

0 16

.21

1,03

3,53

8 16

.49

1,52

9,05

1 18

.85

2,06

2,20

6 17

.28

2,21

8,08

3 18

.58

2,94

8,35

4 17

.92

Non-

curre

nt L

iabilit

ies

Long

-term

loan

s fro

m re

lated

par

ty

430,7

32

2.62

Long

-term

loan

s-ne

t of a

mou

nt d

ue

wi

thin

one

year

1,1

20,20

0 15

.34

1,156

,340

18.45

2,5

62,41

8 31

.59

1,504

,733

12.61

1,2

50,51

7 10

.47

4,871

,709

29.60

Ot

her n

on-c

urre

nt li

abilit

ies

- -

6,052

0.1

0 7,4

41

0.09

7,627

0.0

3 9,7

68

0.08

16,51

1 0.1

0 To

tal L

iabi

lities

2,30

4,19

1 31

.55

2,19

5,93

0 35

.04

4,09

8,91

1 50

.53

3,57

4,56

6 29

.13

3,47

8,36

8 29

.13

8,26

7,30

6 50

.24

Shar

ehol

derûs

Equ

ity

Issue

d &

Paid

-up

Shar

e Ca

pita

l Or

dina

ry s

hare

s 80

0,000

10

.95

800,0

00

12.77

80

0,000

9.8

6 80

0,000

6.7

0 80

0,000

6.7

0 80

0,000

4.8

6 Pr

emium

on

ordi

nary

sha

res

1,370

,460

18.76

1,3

70,46

0 21

.87

1,370

,460

16.89

1,3

70,46

0 11

.48

1,370

,460

11.48

1,3

70,46

0 8.3

3 Ot

her c

ompo

nent

s of

sha

reho

lder

sû eq

uity

- -

- -

- -

(316

,111)

(2

.65)

(348

,087)

(2

.92)

(817

,780)

(4

.97)

Lega

l Res

erve

96

,000

1.31

96,00

0 1.5

3 96

,000

1.18

96,00

0 0.8

0 96

,000

0.80

96,00

0 0.5

8 Re

taine

d ea

rning

s (d

efici

ts)

2,733

,489

37.42

1,8

04,26

1 28

.79

1,746

,617

21.53

6,3

81,60

7 53

.52

6,401

,772

53.62

6,6

39,74

3 40

.35

Tota

l Sha

reho

lder

sû E

quity

4,99

9,94

9 68

.45

4,07

0,72

1 64

.96

4,01

3,07

7 49

.47

8,33

1,95

6 69

.69

8,32

0,14

5 69

.69

8,08

8,42

3 49

.15

Mino

rity

Inte

rest

-

- -

- -

- 26

,380

0.22

140,4

57

1.18

100,8

36

0.61

Tota

l Liabi

lities

and

Shar

ehol

ders

û Equ

ity

7,30

4,13

9 10

0.00

6,26

6,65

0 10

0.00

8,11

1,98

7 10

0.00

11

,932

,901

10

0.00

11,93

8,97

0 10

0.00

16

,456

,565

10

0.00

89

Polyp

lex

(Tha

iland

) Pub

lic C

ompa

ny L

imite

d St

atem

ent o

f Inc

ome

and

Reta

ined

Ear

ning

s Un

it: Bt

. 000

ûs

Un

cons

olid

ated

Co

nsol

idat

ed

20

10/2

011

2011

/201

2 20

12/2

013

2010

/201

1 20

11/2

012

2012

/201

3

April

-Mar

ch

April

-Mar

ch

April

-Mar

ch

April

-Mar

ch

April

-Mar

ch

April

-Mar

ch

Am

ount

%

Am

ount

%

Am

ount

%

Am

ount

%

Am

ount

%

Am

ount

%

Re

venu

es

Net s

ales

4,980

,737

97.38

4,5

60,64

7 93

.92

4,205

,440

94.76

11

,183,1

74

98.79

10

,143,1

11

98.82

9,2

30,01

8 97

.21

Othe

r rev

enue

s 58

,745

1.15

295,3

16

6.08

58,88

6 1.3

3 10

6,586

0.9

4 12

0,697

1.1

8 87

,768

0.92

Gain

on fo

reign

exc

hang

e 75

,517

1.48

- -

173,8

36

3.92

30,41

0 0.2

7 -

- 17

7,399

1.8

7 To

tal R

even

ues

5,11

5,00

0 10

0.00

4,85

5,96

2 10

0.00

4,43

8,16

2 10

0.00

11

,320

,169

10

0.00

10,26

3,80

8 10

0.00

9,49

5,18

5 10

0.00

Co

sts

and

Expe

nses

Co

st o

f sale

s 3,1

04,61

6 60

.70

3,831

,385

78.90

3,9

41,03

0 88

.80

6,502

,517

57.44

7,8

31,56

3 76

.30

7,874

,168

82.93

Se

lling

and

adm

inist

rativ

e ex

pens

es

332,0

51

6.49

333,6

06

6.87

372,8

04

8.40

803,9

93

7.10

858,0

32

8.36

1,159

,101

12.21

Lo

ss o

f for

eign

exch

ange

-

- 22

1,776

4.5

7 -

- -

- 12

5,979

1.2

3 -

- To

tal E

xpen

ses

3,43

6,66

7 67

.19

4,38

6,76

7 90

.34

4,31

3,83

4 97

.20

7,30

6,51

0 64

.54

8,81

5,57

3 85

.89

9,03

3,27

0 95

.14

Prof

it (lo

ss) b

efor

e in

tere

st e

xpen

ses

1,67

8,33

3 32

.81

469,19

5 9.66

12

4,32

9 2.80

4,01

3,65

9 35

.46

1,44

8,23

4 14

.11

461,91

6 4.86

In

tere

st e

xpen

ses

(35,5

65)

(0.70

) (3

4,054

) (0

.70)

(45,9

73)

(1.04

) (9

2,728

) (0

.82)

(56,2

10)

(0.55

) (8

6,806

) (0

.91)

Inco

me

Tax

- -

- -

- -

(27,8

82)

(0.25

) (3

4,187

) (0

.33)

(11,6

58)

(0.12

) Ne

t pro

fit (l

oss)

afte

r in

com

e ta

x 1,64

2,76

7 32

.12

435,14

2 8.96

78

,356

1.77

3,89

3,04

9 34

.39

1,35

7,83

8 13

.23

363,45

2 3.83

Ne

t los

s of

mino

rity

inter

est

- -

- -

- -

(10,1

64)

(0.09

) (2

30)

(0.00

) 10

,520

0.11

Net p

rofit

(los

s)

1,64

2,76

7 32

.12

435,14

2 8.96

78

,356

1.77

3,88

2,88

5 34

.30

1,35

7,60

8 13

.23

373,97

1 3.94

Ea

rning

s (lo

sses

) per

sha

re (B

t.)

2.05

- 0.5

4 -

0.10

- 4.8

5 -

1.70

- 0.4

7 -



Polyplex (Thailand) Public Company Limited Cash Flow Statement

Unit: Bt. 000ûs Unconsolidated Consolidated 2010/2011 2011-2012 2012-2013 2010/2011 2011-2012 2012-2013 April-March April-March April-March April-March April-March April-March Cash flow from operating activities Profit before tax 1,642,767 435,142 78,356 3,920,931 1,392,024 375,109 Adjustments to reconcile profit of net cash provided by operating activities Depreciation and amortization 190,413 196,282 234,512 357,538 369,432 411,977 Doubtful debts (doubtful debts recovery) (233) (25) - 783 279 3,720 Allowance for diminution in value of inventories (reversal) (17,289) 2,720 13,192 (17,289) 2,720 13,192 Dividend income (9,858) (217,596) (9,484) - - - Interest Expense 33,934 33,003 44,981 76,002 45,147 55,832 Unrealized losses (gains) on foreign exchange (99,795) 20,508 (142,670) (97,579) 19,969 (150,338) Exchange loss on the redemption of investment in subsidiary 37,407 253,268 - - 253,268 - Provision for long-term employee benefits - 1,682 1,673 - 7,270 12,905 Gains on sales of current investments (472) (3,538) (539) (472) (3,538) (539) Loss (gain) from disposal of F/A (402) - 13,811 (610) (2) 26,070 Profit (Loss) from operation before changes in operating assets and liabilities 1,776,472 721,445 233,834 4,239,304 2,086,570 747,928 Accounts receivable (528,037) 371,036 30,498 (723,653) 496,000 444 Balance due from a related company - - - (161,170) - - Inventories (41,599) (96,548) (120,625) (598,525) 105,741 (130,693) Other current assets (89,258) 51,514 (27,331) (105,941) 22,992 219,309 Other non-current assets 3,994 1,222 (6,043) 3,997 1,221 (5,996) Accounts payable 156,367 (78,613) 46,860 281,323 (56,597) 68,428 Other current liabilities 26,492 (27,381) 24,879 38,614 5,730 108,648 Payment of long-term employee benefits - - (283) (1,199) (4,988) (5,524) Income tax paid - - - (14,624) (42,530) (30,601) Cash flow from (used in) operating activities 1,304,431 942,676 181,788 2,958,128 2,614,138 971,944

91

Polyplex (Thailand) Public Company Limited Cash Flow Statement

Unit: Bt. 000ûs Unconsolidated Consolidated 2010/2011 2011-2012 2012-2013 2010/2011 2011-2012 2012-2013 April-March April-March April-March April-March April-March April-March Cash flow from Investing activities Decrease (Increase) in restricted bank deposits - - - - - (11,864) Decrease (increase) in current investments (164,475) 168,485 (77,461) (164,475) 168,485 (93,462) Decrease (increase) in investments in subsidiaries 139,665 369,655 (42,055) - - (266,837) Dividend from subsidiary 9,858 217,596 9,484 - - - Increase in advance payment for purchases of assets (182,321) (93,486) 306,981 (411,349) 32,556 356,851 Increase (decrease) in accounts payable for purchases of fixed assets - (145,631) 18,539 161,359 (145,631) 19,780 Purchases of property, plant and equipment (676,237) (192,207) (2,110,207) (760,722) (914,563) (5,898,755) Proceeds from sales of property, plant and equipment 411 - 623 1,718 70,089 15,209 Increase in intangible assets - - - (731) (1,433) (5,275) Net cash used in investing activities (711,739) 324,412 (1,894,096) (1,174,201) (790,497) (5,884,353) Cash flow from financing activities Interest Paid (34,285) (40,538) (58,875) (74,766) (54,135) (134,916) Increase (Decrease) in short term loans from financial institutions (50,000) 80,000 305,000 142,218 132,261 717,695 Increase in long-term loans from related party - - - - - 430,732 Increase/(decrease) in long-term loans 36,838 41,049 1,648,465 (778,852) (275,697) 3,987,139 Dividend paid to minority shareholders - - - (278) - - Cash receivable capital increase - - - - 349,546 - Dividend payment (612,000) (1,360,000) (136,000) (612,000) (1,360,000) (136,000) Dividend paid to non-controlling interests of subsidiary - - - - (2,187) (543) Cash received from non-controlling interests of subsidiaries - - - - - 9,033 Cash provided from financing activities (659,447) (1,279,489) 1,758,590 (1,323,679) (1,210,213) 4,873,141 Currency Translation changes - - - 59,342 (162,626) (174,205) Increase in cash and cash equivalents (66,755) (12,401) 46,282 519,590 450,801 (213,473) Cash and cash equivalents at the beginning of period (April 1) 108,797 42,042 29,641 711,418 1,231,009 1,681,810 Cash and Cash equivalents at the end of period (March 31) 42,042 29,641 75,923 1,231,009 1,681,810 1,468,337



Polyplex (Thailand) Public Company Limited Financial Statement

Unit: Bt. 000ûs Unconsolidated Consolidated 2010/2011 2011-2012 2012-2013 2010/2011 2011-2012 2012-2013 April-March April-March April-March April-March April-March April-March Liquidity Ratios Current ratio (time) 1.68 1.43 1.12 2.65 2.31 1.66 Quick ratio (time) 1.17 0.81 0.60 1.60 1.39 1.00 Cash flow current ratio (time) 1.29 0.85 0.14 1.66 1.22 0.38 Receivable current ratio (time) 5.46 4.59 5.37 7.30 6.16 6.64 Avg. debt collection period (day) 65.99 78.43 67.05 49.31 58.44 54.24 Inventory turnover period (time) 88.87 97.18 78.84 15.68 14.37 14.84 Avg. selling period (day) 4.05 3.70 4.57 22.96 25.05 24.27 Payable current ratio (time) 5.73 6.27 6.22 6.86 7.18 6.93 Loan repayment period (day) 62.78 57.40 57.89 52.50 50.16 51.95 Cash cycle (day) 7.25 24.73 13.73 19.77 33.32 26.56 Profitability Ratios Gross profit margin (%) 37.67% 15.99% 6.29% 41.85% 22.79% 14.69% Operating profit margin (%) 31.42% 8.68% -2.58% 35.10% 14.33% 2.13% Other profit margin (%) 1.15% 6.08% 1.33% 0.94% 1.18% 0.92% Cash to profit margin (%) 74.53% 123.80% 91.23% 69.25% 141.20% 98.12% Net profit margin (%) 32.12% 8.96% 1.77% 34.30% 13.23% 3.94% Return on equity (%) 36.63% 9.59% 1.94% 58.06% 16.14% 4.49% Efficiency Ratios Return on assets (%) 24.63% 6.41% 1.09% 37.34% 11.37% 2.63% Return on fixed assets (%) 63.83% 20.26% 7.71% 73.13% 27.99% 8.83% Asset turnover (time) 0.77 0.72 0.62 1.09 0.86 0.67 Financial Policy Ratios Debt to equity ratio (time) 0.46 0.54 1.02 0.43 0.42 1.02 Interest coverage ratio (time) 52.54 19.54 7.81 47.03 32.33 10.19 Commitment coverage ratio (cash basis) (time) 1.50 2.10 0.08 2.44 2.01 0.16 Pay out ratio (%) 40% 31% 31% 40% 31% 31%

93

9.2 Explanation and analysis of operational performance and financial status

9.2.1 Operational performance

PTL, a subsidiary of PCL, was incorporated on March 26, 2002 to engage in the

production and distribution of PET film (Polyethylene Terephthalate Film or Polyester

Film) mainly for export markets focusing on packaging, industrial and electrical

segments. The Company commenced operations from its first production line on

April 2, 2003 and the second production line on November 12 of the same year.

Since then, the Company has expanded its operations significantly, both within and

outside Thailand. In Thailand, the Company has invested in Extrusion Coating lines,

Cast Polyproplene line, Silicone Coating line, Thick PET film line and Metallizers.

Apart from this the Company has also set up manufacturing subsidiaries in Turkey

(2005) and in USA (2012) and trading companies in Europe and China.

All our operational product lines in Thailand have the following certifications:



ë OHSAS 18001:2007 certification on Occupational Health and Safety Management

system

ë ISO 22000:2005 certification on Food Safety standards

ë TPM Excellence Award (Category A)

All our product lines in Turkey have the following certifications:



ë OHSAS 18001:2007 certification on Occupational Health and Safety Management

system

ë BRC/IoP - certification on Global Standard For Packaging and Packaging

Materials (For Plain and Metallized Film lines)

Polyplex group aims to become one of the world market leaders in plastic film

industry by continuously expanding its market share through regular expansions in

capacity and diversification in its product portfolio. The new Thin PET film line in US

has added another 31,000 MT per annum in the Companyûs combined capacity. By

venturing into the manufacture of related products such as BOPP film (In India) and

CPP films (In Thailand), which are other Packaging substrates, used by Converters,

in addition to PET thin film, Polyplex aims to become a preferred packaging

substrate provider as against just a PET thin film supplier. Apart from this, in order

to further diversify its product range, the group has regularly been expanding into



value added products such as Silicone coated film (In India - 2007, Thailand - 2012),

Extrusion coated films (In Thailand - 2008) and Metallized films. Companyûs decision

to invest in Thick PET film line along with a Blown PP line and the second line of

Extrusion coating would help the Company to diversify further and establish itself as

a leading plastic film supplier. All these projects in Thailand are expected to

commence operations in H1 of 2013-14. The recycling project in Thailand is being

set up to find sustainable solution for process as well as post consumer plastic

waste. The Company is also investing in a bottle grade PET resin plant in Turkey

which would be Companyûs first project in this industry. The project is expected to

commence commercial operations in H2 of 2013-14

Polyplex group has set out clear business strategies:

1) Focus on product development and technical services to penetrate high

growth and high margin markets,

2) Optimal Cost of Production

3) Boosting delivery efficiency through focus on distributed manufacturing and

logistics

4) Diversifying the product portfolio to minimize the risk of cyclical impact of the

PET film industry, to increase stability of Earnings

5) Customer satisfaction through supply of consistent quality products

6) Judicious mix of On-shore, Off-shore and Near-shore strategy.

During the year 2012, the Thin PET film industry witnessed an oversupply scenario

due to excessive capacity addition following the exceptionally high margins

witnessed in the PET film industry in 2010. This resulted in a significant drop in

selling prices, thereby squeezing the margins to historically low levels. Apart from

this, on account of to the implementation of multiple projects at Thailand, USA and

Turkey, the associated administrative costs went up significantly, resulting in a sharp

drop in the profitability for the current year.

The highlights of the yearûs performance are as follows:

TOTAL REVENUES

Consolidated:

Sales Revenue:

The consolidated sales revenue has decreased to Baht 9,230 million, (Baht 913

million or 9% decline over previous year). Decrease in revenues is mainly on account

of a significant drop in selling prices of Polyester films due to the excessive

oversupply situation as explained above. Additional sales volumes from the new

95

Silicone Coating line (which commenced commercial production in March 2012)

have helped to partly offset the impact of lower selling prices of PET films

Table illustrating consolidated sales revenue from Exports and Domestic sales is as

below: 2009-10 2010-11 2011-12 2012-13 Market Bt. million % Bt. million % Bt. million % Bt. Million %

Exports 5,965.27 83.72 9,611.07 85.94 8,495.31 83.75 7,438.18 80.59

Domestic sales 1,160.09 16.28 1,572.10 14.06 1,647.80 16.25 1,791.84 19.41

Total 7,125.36 100.00 11,183.17 100.00 10,143.11 100.00 9,230.02 100.00

Note: Sales made by the distribution company in the US/China has been considered as Exports.

The value additions [VA = Selling price - Raw Material Cost] during the year for PTL

and PE are shown below. During the current year, value additions have significantly

dropped due to the market scenario of oversupply, as explained above.

VA trend-Plain & Met. PET Film (PTL-Thailand)

VA trend-Plain & Met. PET Film (PTL-Turkey)

0.50

0.75

1.00

1.25

1.50

1.75

2.00

2.25

2.50

$/Kg

Plain Film $ /Kg 0.97 0.71 1.78 0.99 0.69

Met.Film $ /Kg 1.64 1.30 2.30 1.50 1.26

FY 2008-09 FY 2009-10 FY 2010-11 FY 2011-12 FY 2012-13

0.40

0.65

0.90

1.15

1.40

1.65

1.90

2.15

Euro/ Kg

Plain Film Euro /Kg 0.80 0.58 1.52 0.82 0.67

Met.Film Euro /Kg 1.28 1.09 1.98 1.31 1.12

FY 2008-09 FY 2009-10 FY 2010-11 FY 2011-12 FY 2012-13



Other Income:

The other income has decreased from Baht 120.69 million to Baht 87.77 million, a

drop of Baht 32.93 million, mainly due to higher other income last year at Thailand

on account of some creditor balances written off and also due to lower export

incentive income in current year due to lower selling prices.

The company earned an exchange gain of Baht 177.4 million in this year as

compared to an exchange loss of Baht 125.98 million in the previous year. The net

exchange gains are mainly at Thailand on account of Forex Loan restatements, due

to strengthening of the Baht against the USD as well as Euro.

The net impact of all the above factors have contributed to an overall decrease in

total revenue by Baht 768.62 million or 7.5% to Baht 9,495.19 million, over the

previous year.

Standalone:

Sales Revenue:

The Companyûs total sales revenue is mainly driven by Exports, with 75-80% of its

total sales revenue coming from exports.

Table illustrating the Companyûs sales revenue from export and domestic sales is below: 2009-10 2010-11 2011-12 2012-13 Market Bt. million % Bt. million % Bt. million % Bt. Million %

Exports 2,496.48 78.64 3,950.99 79.33 3,640.71 79.83 3,165.86 75.28

Domestic sales 678.17 21.36 1,029.75 20.67 919.94 20.17 1,039.58 24.72

Total 3,174.65 100.00 4,980.74 100.00 4,560.65 100.00 4,205.44 100.00

In the financial year 2012-13, the Company achieved total sales revenues of Baht

4,205.44 million, a decrease of Baht 355.21 million or 7.8%, mainly on account of a

sharp drop in selling prices, as compared with the previous year, due to the

oversupply situation in the market, as explained above. The current year also

included sales of Silicone Coated Film which commenced commercial production in

March 2012, which have helped to partly offset the impact of lower sales realization

on overall sales revenue.

Other Income:

The Company has recorded an Exchange gain of Baht 173.84 million as against an

Exchange loss of Baht 221.78 million in the previous year. The gain is mainly on

account of the restatement of USD and Euro term loans, as explained earlier.

97

The other income has decreased to Baht 49.40 million from Baht 77.72 million, as

last year included an extra ordinary item of income from write off of an old creditor

balance and also due to lower export incentive income in current year due to lower

selling prices.

The dividend income has decreased to Baht 9.5 million from Baht 217.6 million, as

there is no dividend income from the Singapore subsidiary this year and also, the

dividend from the US subsidiary was lower due to lower profits in FY 2011-12 as

compared to FY 2010-11.

The net impact of all the above factors have contributed to an overall decrease in

total revenue by Baht 417.8 million or 8.6% to Baht 4,438.16 million, as compared to

the previous year.

TOTAL EXPENSES

Consolidated

The key elements of the Companyûs cost structure are raw materials, packing,

electricity & fuel, depreciation, staff cost and selling & administrative expenses.

Cost of sales (COS) amounted to Baht 7,874 million as compared to Baht 7,832

million of previous year, representing 87.17% of the total expenses lower than

88.84% of the previous year. Cost of sales includes mainly the raw material costs,

packing costs, utilities, depreciation on building and machinery, staff costs etc. A

broad break up of COS is given below:

Description 2012-13 2011-12 2010-11

Raw materials and consumables used

(incl.change in inventory) 76.0% 79.2% 78.2%

Depreciation (in COS) 5.1% 4.6% 5.1%

Salaries, wages and other employee benefits

(in COS) 6.9% 5.5% 5.7%

Utilities (Power/Natural Gas/ Chilled water etc) 7.6% 6.2% 7.2%

Others 4.4% 4.5% 3.8%

100.0% 100.0% 100.0%

The increase in the COS in absolute terms is Baht 42.6 million (or 0.54%), which is

mainly on account of lower prices of most of the raw material, partly offset by higher

volumes from the Silicone Coated film line.



The selling expenses have been higher by about Baht 49.59 million or 8.54% due to higher sales volumes, including additional volumes of the silicone coated film. The freight rates have also been higher this year. The administrative expenses have been higher by Baht 251.48 million or 90.74% due to overall increase in scale of operations on account of new businesses and also higher administrative expenses at the subsidiaries, particularly the subsidiaries in the USA and Turkey, where new projectsû implementation is underway. Apart from the increase in administrative expenses due to the project implementations (mainly salaries of service staff), the subsidiary in USA had higher administrative expenses due to the operating costs of the metalizing assets acquired in the mid of the year. The major increase is in salary expense due to increase in the number of employees to manage the new operations. There is also an increase in legal and professional charges on a consolidated basis, due to additional legal opinions taken this year (For merger of Polyplex (Americas) Inc, acquisition of Polyplex Resins etc).

The finance costs, on consolidated basis, during the year were Baht 86.81 million, an

increase of Baht 30.60 million or 54.43% over the previous year. The key reason for the increase in finance charges is the higher short term borrowing at Thailand and the subsidiaries at USA and also the interest on the Silicone Coated film loan, which was under project implementation phase in previous year. This is partly offset by the term loan repayments made during the year. There was a significant increase in finance charges at the Turkey subsidiary, due to the charges associated with the execution of the term loan agreement for the PET bottle grade project financing.

Standalone Cost of sales (COS) amounted to Baht 3,941 million representing 91.4% of the total

expenses, higher than Baht 3,831 million, or 87.4% of the previous year. The higher cost of sales is due to additional volumes of silicone coated film this year, partly offset by lower volumes in other businesses as well as lower raw material costs.

A broad breakup of the COS is given below:

Description 2012-13 2011-12 2010-11

Raw materials and consumables (incl.change in all inventory) 77.3% 79.4% 78.3% Depreciation (in COS) 5.7% 4.9% 5.8% Salaries, wages and other employee benefits (in COS) 7.8% 6.4% 6.8% Utilities (Power/Natural Gas/ Chilled water etc) 8.2% 7.5% 7.9% Others 1.0% 1.8% 1.2% 100.0% 100.0% 100.0%

99

The selling expenses have been higher due to higher sales volumes of silicone coated film and also higher freight charges, as silicone coated film is exported mainly to Europe and US which have higher freight rates. The administrative expenses have been higher by 6.31% due to overall increase in scale of operations.

The finance charges have increased from Baht 36 million to Baht 46 million, due to

higher working capital borrowing and also the interest on the Silicone Coated film loan, which was under project implementation phase in previous year. This is partly offset by the term loan repayments made during the year.

Profit margins - Gross Profit, Operating Profit and Net profit ratios Gross profit margin on a consolidated basis has been 14.69% as compared to

22.8% of previous year. On a standalone basis, The Company had a gross profit margin of 6.29% as compared to 16% in the previous year, mainly due to drop in the sales realization coupled with increase in costs.

On a consolidated basis, the operating profit margin in the current year has

decreased from 14.3% to 2.13%. And on a standalone basis, it has decreased from 8.7% to a loss of 2.58%, mainly due reasons of lower average sales realization and higher operating costs during the year, as explained above.

Net profit margin on a consolidated basis has been 3.9%, as compared to 13.2% of

the previous year and on a standalone basis it has been 1.8% as compared to 9% of previous year.

9.2.2 Financial status

TOTAL ASSETS

As at 31st March 2013, The Companyûs consolidated total assets were Baht 16,456

million, higher by 37.84% as compared to Baht 11,939 million in the previous year.

On a Standalone basis, the total assets as at 31st March 2013 were Baht 8,112 million, higher by about 29.45% compared to Baht 6,267 million of previous year.

The main components of Total Assets are Current assets, Fixed assets, Investments

and other non-current assets. A brief summary of the movement in the various components of total assets is given below:

Accounts receivable The Companyûs consolidated Net Accounts Receivables as of March 31, 2013 stood

at Baht 1,384 million which is lower compared to Baht 1,397 million as of March 31, 2012 or a marginal decrease of 0.88%.



The Companyûs Standalone Net Accounts Receivables as of 31st March, 2013 were

Baht 761 million, as against Baht 806 million in the previous year, or a decrease of

5.6%. The decrease in receivables is mainly due to the significant decrease in selling

prices, partly offset by the additional sales volumes of the Silicone Coated film line

in Thailand. The average debt collection period has also reduced compared to

previous year for Standalone as well as Consolidated.

Inventories

On a consolidated basis, the total inventories have increased to 1,741 million from

Baht 1,624 million, an increase of Baht 118 million or 7.3%. On a standalone basis,

there is an increase from Baht 565 million to Baht 672 million or 19.03%. The

increase in inventory levels is mainly due to higher stock of finished goods and work

in process inventory, higher stock of stores and spares at Thailand and higher raw

material inventory at the US subsidiary to plan for the start up of the new PET film

line in Q1 of 2013-14.

Net Fixed Assets

Consolidated Net Fixed Assets (including capital work in progress -CWIP, Goodwill

and Other Intangible Assets) have increased by Baht 5,092 million from Baht 6,366

million to Baht 11,458 million, due to the net impact of the following:

ë Increase due to net additions to fixed assets/Intangible assets - Baht 5,947

million, mainly on account of the Capital work in progress relating to projects

under implementation in Thailand, Turkey and USA, apart from other normal

CAPEX.

Decrease on account of Translation adjustment - Baht 443 million (net of translation

impact on accumulated depreciation), mainly due to translation of subsidiaries Net

Fixed Assets, denominated in Euro, USD and RMB, into THB for the purpose of

consolidation.

ë Decrease on account of depreciation charged during the year - Baht 412 million

The Company (standalone) Net Fixed Assets have increased by Baht 1,879 million,

from Baht 3,119 million to Baht 4,998 million, due to the net impact of the following:

ë Increase due to net addition to fixed assets - Baht 2,114 million mainly on

account of capital work in progress relating to the PET Thick Film project,

Blown PP and Extrusion Coated Film projects and Normal CAPEX in existing

plants

ë Decrease on account of depreciation charged during the year - Baht 235 million

101

Investment in subsidiaries During the year, the Companyûs subsidiary Polyplex Europa Polyester Film Sanayi Ve

Ticaret A.S. (PE) invested Euro 5.9 million in acquiring 67% stake in Polyplex Resins Sanayi Ve Ticaret A.S (PR) from Polyplex (Asia) Pte Ltd. Thereafter in February 2013, PE made an additional investment of Euro 0.2 million in PR.

During the year, the Company invested Baht 19.3 million in its 80% held subsidiary

EcoBlue Limited in Thailand, under which a project for recycling of film waste is being implemented.

In January 2013, the Company invested USD 0.7 million in acquiring the balance

stake of 19.76% in Polyplex (Americas) Inc (PA) from the minority shareholders. Thereafter PA was merged with Polyplex USA LLC (PUL), another 100% owned subsidiary of PTL.

Return on assets On a consolidated basis, the return on assets has been 2.63% as compared to

11.37% in the previous year. On a Standalone basis, the Companyûs return on assets has been 1.09% as compared to 6.41% in the previous year. Decrease is mainly due to decline in profitability during the current year and also the significant increase in asset base due to the investment in projects.

9.2.3 Liquidity

Cash flow For the year 2012-13, the Company and its subsidiaries generated net cash from

operating activities amounting to Baht 972 million.

The deployment of this cash was as under: ë Baht 11.9 million had to be kept aside as restricted bank deposit, for servicing

the loan repayment, as part of the Loan covenants of the US subsidiaryûs term loan for the PET film line project.

ë Baht 93.5 million was invested in current investments ë Baht 266.8 million was cash paid for subsidiariesû acquisition (Baht 244 million

acquisition by Polyplex Europa Polyester Film Sanayi Ve Ticaret A.S.(çPEé), Turkey, of the shares of Polyplex Resins Sanayi Ve Ticaret A.S (PR), from Polyplex (Asia) Pte Ltd (PAPL) and Baht 22.8 million paid by the Company for acquiring the balance stake of 19.76% from the minority shareholders of Polyplex Americas Inc (PA).

ë Net additions to fixed assets, including advances paid for project machinery & equipments - Baht 5,512 million. This includes the amount expended on various ongoing projects in Thailand, USA and Turkey.



Apart from cash generated from operating activities as explained above, the

company and its subsidiaries had net cash inflow of Baht 4,873 million due to

following:

ë Drawdown of Short term loan for WC financing - Baht 717.7 million

ë Drawdown of Long term loans from banks, for new projects (net of the

scheduled repayments of older loans) - Baht 3,987.1 million

ë Drawdown of Long term loan from related party - Baht 430.7 million

ë Cash Received from minority shareholders in subsidiaries - Baht 9 million

ë Cash paid for interest on term loans and short term loans - Baht 135 million

ë Dividend payment - Baht 136 million

ë Dividend payment to minority interest of subsidiaries - Baht 0.5 million

The deficit thereof, along with the reduction on account of translation adjustment of

Baht 174 million, and opening balance of Baht 1,681.8 million resulted in a net

closing balance of Baht 1,468.3 million.

During the year 2012-13, the Company, on a standalone basis, had generated net

cash from operating activities of Baht 181.8 million [dividend from the US subsidiary

of Baht 9.5 million], and Baht 1,953.5 million net inflow on account of loan movement

(long term and short term bank borrowings).

The deployment of this cash is as under:

ë Investment in subsidiaries - Baht 42.1 million (Bt 20 million in EcoBlue Limited

in Thailand and Baht 22 million in acquiring the minority stake in Polyplex

Americas Inc(PA),

ë Baht 77.5 million was invested in current investments.

ë Net additions to fixed assets, including advances paid for project machinery &

equipments - Baht 1,784.1 million.

ë Cash paid for interest on term loans and short term loans - Baht 58.9 million

ë Dividend payment - Baht 136 million.

The surplus thereof together with the opening balance of Baht 29.6 million resulted

in a net closing balance of Baht 75.9 million.

Liquidity ratio

In 2012-13, consolidated current ratio was 1.66 and quick ratio was 1.00. The

Companyûs (standalone) current ratio and quick ratio were 1.12 and 0.60

respectively. Consolidated average debt collection period during 2012-13 was 54

days along with Account payables period of 52 days and average selling period of

103

24 days, resulting in a cash cycle of 27 days as against a cash cycle of 33 days of

previous year. The average debt collection period of the Company (standalone)

during 2012-13 was 67 days along with Accounts payable period of 58 days and

average selling period of 4 days resulting in cash cycle of 14 days as against a cash

cycle of 25 days in previous year.

9.2.4 Sources of funds

Sources of funds consist of long term and short term loans from financial institutions

and shareholdersû equity.

TOTAL LIABILITIES

Current Liabilities

As at 31st March, 2013, consolidated current liabilities stood at Baht 2,948 million, an

increase of Baht 730 million from Baht 2,218 million in the previous year, mainly due

to the following movements:

ë Increase in short term borrowings at the Company and its subsidiary in USA -

Baht 717.7 million.

ë Increase in Trade and other payables by Baht 84.4 million due to increase in

scale of operations.

ë Increase in other liabilities by Baht 101.6 million.

ë Increase in current portion of long term loans by Baht 91.4 million due to

overall increase in loans becoming due for repayment, after expiry of initial

grace period.

ë Decrease in Payable for subsidiary acquisition - Baht 244 million (PR

acquisition by PE from PAPL, as explained above under 9.2.3 on ùLiquidityû,

under deployment of cash generated.

ë Decrease in Income tax payable by Baht 20.8 million, mainly due to lower tax

in the subsidiary in the USA due to lower taxable profits this year.

As at 31st March, 2013, The Companyûs Standalone current liabilities stood at Baht

1,529 million, an increase of Baht 495 million from Baht 1,034 million in the previous

year, mainly due to the following:

ë Increase in Short term borrowings by Baht 305 million

ë Increase in Trade and other payables Baht 62.7 Million

ë Increase in other current liabilities Baht 28.3 Million

ë Increase in current portion of loans Baht 99.4 Million



Term Debts

On a consolidated basis, the term debt (net of current portion) has increased by

Baht 4,052 million, including Baht 430.7 million of term loans from related party. The

increase in consolidated debt is mainly on account of new loans drawn by the

Company and its subsidiaries in USA and Turkey for the ongoing expansions. This is

partially offset by repayments made during the year and net exchange gain on loan

restatements in Thailand.

The Companyûs term debt (net of current portion) has increased by Baht 1,406

million due to additional borrowings at Thailand for financing the ongoing projects.

This is partly offset by loan repayments during the year and also due to the

exchange gain on the Euro/USD loan restatements, due to the strengthening of the

THB against these currencies.

Leveraging & interest coverage ratio

The net debt equity ratio (debt only - short term and long term, including current

portion, after netting off cash & cash equivalents and current investments) of 0.47 on

a consolidated basis and 0.69 for the Company standalone, although higher than

previous year, are still quite comfortable. Debt equity ratio (for total debt, including

current + non-current liabilities), is 1.02 on a consolidated basis as well as for the

Company standalone.

The consolidated interest coverage ratio was 5.32 times as against 25.76 in previous

year. The Companyûs standalone interest coverage ratio was 2.7 times as against

13.8 times in previous year. Decrease in the interest coverage ratio is mainly due to

decrease in EBITDA during the current year and increase in interest expense due to

higher average borrowings.

Commitments

As at 31 March 2013, company had the following commitments and contingent

liabilities:

(a) As at 31 March 2013, the Company had commitments totaling Baht 197.0

million under various service agreements (2012: Baht 221.0 million). These

agreements expire between April 2013 and September 2016.

(b) The Companyûs foreign exchange contracts outstanding at 31 March 2013 are

summarized below.

105

Foreign Bought Sold Contractual exchange rate

currency amount amount Bought Sold

(Million) (Million) (Baht per 1 foreign

currency unit)

US dollar 2.08 19.39 Baht 29.4650 - 30.2650 Baht 29.5920 - 30.9750

per USD 1 per USD 1

Swiss franc 0.30 - Baht 32.8089 per CHF 1

Euro 0.57 1.09 Baht 37.9000 - 39.5700 Baht 38.0200 - 40.8268

per EUR 1 per EUR 1

Japanese yen - 60.06 - Baht 0.3121 - 0.3254

per JPY 1

The Companyûs subsidiary in Turkey had the following forward exchange

contracts outstanding at 31st March, 2013:

Bought amount Contractual exchange rate

YTL 3.5 million YTL 1.8005 - 1.8231 per USD 1

YTL 0.5 million YTL 2.3860 per EUR 1

(c) As at 31 March 2013, The Company and its subsidiaries had capital

commitments of approximately Baht 736.4 million relating to the construction

of building and acquisition of machinery and equipment for the upcoming

projects. For the Company Standalone, the capital commitments amounted to

Baht 263.9 million.

(d) As at 31 March 2013, the Company is committed for rentals (under Operating

Lease agreements) as follows:

Million Baht

Payable within:

1 years 8.1

2 to 5 years 6.1

(e) As at 31 March 2013, the Company has provided guarantee of USD 75 million

for the long-term loans obtained by its subsidiary (Polyplex USA LLC). As at

31 March 2013, the outstanding balance of this subsidiaryûs loan was USD

52.1 million.

(f) As at 31 March 2013, the Company has provided guarantee of EUR 2.3 million

(2012: EUR 4.5 million) for the long-term loans obtained by its subsidiary

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

(g) Polyplex Europa Polyester Film Sanayi Ve Ticaret Anonim Sirketi has provided

guarantee for the long-term loans obtained by Polyplex Resins Sanayi Ve



Ticaret Anonim Sirketi to the extent of EUR 27.5 million. As at 31 March 2013,

the outstanding balance of this loan was EUR 20.7 million, of which EUR 13.9

million was guaranteed by Polyplex Europa Polyester Film Sanayi Ve Ticaret

Anonim Sirketi.

(h) The Company has provided guarantee of Baht 15.0 million for credit facilities

obtained by its subsidiary (EcoBlue Limited). As at 31 March 2013, the

subsidiary has yet to utilise these credit facilities.

(i) As at 31 March 2013, there were outstanding bank guarantees of approximately

Baht 0.7 million and EUR 15.7 million (2012: Baht 63.8 million and EUR 25.9

million) issued by the banks on behalf of the Company and its subsidiaries in

respect of certain performance bonds as required in the normal course of

businesses

Shareholdersû equity The Companyûs shareholdersû equity on a consolidated basis reduced from Baht

8,320 million to Baht 8,088 million, which is after accounting for Translation adjustment loss of Baht 473 million, dividend payment of Baht 136 million by the Company for FY 2011-12, partly offset by Net profits during the year of Baht 374 million and surplus on acquisition of minority stake in Polyplex (Americas) Inc ( Baht 3.3 million). On a standalone basis, the decrease in shareholder equity is Baht 57.6 mainly due to dividend payout of Baht 136 during the year, partly offset by profits during the year of Baht 78 million.

Return on equity

On a consolidated basis, the Return on equity has been 4.49% as compared to

16.14%, in the previous year due to decrease in profitability. The ROE of the

Company Standalone was 1.94% as compared to 9.59% in previous year mainly due

to decrease in profitability for the year.

The Company has a policy to pay dividend at 40% of consolidated net profits, taking into account economic conditions, growth plans, future deployment opportunities, the Companyûs financial position and liquidity and subject to the approval by the shareholders. For the year 2012-13, the Companyûs board has proposed a dividend of Baht 0.14 per share payable in August 2013, subject to the approval of shareholders in the Annual General meeting in July 2013. The lower than 40% dividend payout ratio for current year is keeping in mind the lower profitability achieved in this year and the necessity to conserve cash for deployment in ongoing expansion projects, including increased working capital requirement due to various new projects starting in 2013.

107

9.3 Main factors which may affect the future operational performance and financial

position

In comparison with the previous year, the FY 2012-13 was a very challenging year

for the Polyester Film industry with excessive oversupply resulting in a sharp decline

in selling prices and thereby squeezing the margins to historically low levels.

The key challenges for the company in the coming year would be the following:

- Raw material price volatility and any significant upward movement in prices,

which the company might not be able pass on to the end customers in the

current weak market scenario.

- Successful implementation and ramp up of the Thick PET film line, Blown PP

and Thermal Lamination Line 2 in Thailand and the PET Bottle plant in Turkey.

- Successful Ramp up of the Thin PET film line in USA.

- Given the recent volatility of THB against USD and Euro, the Impact of FX

fluctuations on profits of the company will be one of the major concerns. The

company is exposed to 2 types of risks, one on the operational profits as well

as the restatement of the assets/ liabilities of the company on a standalone

basis and secondly, on the conversion of the subsidiariesû P&L accounts,

which are denominated in USD, Euro and RMB, into THB currency for the

purpose of consolidation. With the new USD and Euro Loans drawn for the

ongoing expansions, the Forex loan portfolio of the Company has increased to

almost USD 100 million (including USD equivalent of Euro loans), thereby

exposing the company to significant FX fluctuation risks on the Forex loan

restatements.

In the long run, the Company still remains confident of retaining its competitive edge

due to various reasons:

1. Benefit from its various projects, the past projects and the ones under

implementation as under:

a. PTL and PE have both derived significant benefits from the captive PET

resin production to serve its raw material demand on costs, quality and

security of availability. The main advantages of a captive resin plant are

lower cost of production because of efficiencies in raw material sourcing as

also a lower conversion cost besides ensuring timely availability of raw

material for the film plants. Easy availability of PTA and MEG would reduce

the supply risk although cost of the same still remains a matter of concern

for any PET film manufacturer as it has a direct impact on the margins of

every manufacturer. Captive production of resin would also allow the



company to develop new specialty film products. In line with the above

strategy, the manufacturing unit in USA will also have its own resin plant.

b. Metallizer plants in Thailand and Turkey have helped improve the product

mix by increasing the share of specialty film in the overall sales portfolio. In

Thailand PET as well CPP films are being Metallized whereas in Turkey and

in US, the Metallizers are used to metalize PET films.

c. The Extrusion coating plant in Thailand, which commenced operations in

Aprilû08, has further helped the company to reduce their exposure to

commodity grades of film and increase the proportion of value added films

and other specialty grades of film. The second Extrusion Coating line under

implementation in Thailand will provide an opportunity to the company to

meet the growing demand in Europe and USA.

d. The CPP line which started in Thailand in March 2010 has helped the

company broad base its product offerings to the converters and move

towards becoming a complete packaging solution provider for its

customers, rather than just a PET film supplier.

e. The Silicone Coating project which commenced commercial production in

March 2012 and the Blown PP line under implementation in Thailand, will

further diversify the product portfolio of the company and add a highly

value added product in its portfolio.

f. The Thick PET film line, under implementation in Thailand will also help

further diversify the product portfolio and mitigate the risk associated with

the cyclical nature of the Thin PET film industry, as Thick PET film is a

relatively more stable industry.

g. The Company has successfully implemented the project for Thin PET film

line in the USA in Q1 2013-14. With its extensive market reach in the North

American region, the Company remains confident that this decision, backed

by its near shoring strategy will enable it to service its customers in a more

efficient manner.

h. The Bottle grade plant in Turkey which is currently in the implementation

phase will be the Companyûs first project in the PET bottle industry.

2. Polyplex has been deriving benefits from the larger size and distributed

manufacturing operations across 4 existing locations whereby it has qualified

as a preferred global supplier with many multinational and large customers

with global operations.

109

3. Polyplex has been able to establish itself as a reliable supplier of consistent

quality products.

4. Polyplex had also invested significantly in distribution, through the acquisition

of a company in USA (Polyplex (Americas) Inc. (PA), [which has now been

merged with Polyplex USA LLC (PUL), the manufacturing entity in USA], the

investment in Polyplex (Trading) Shenzhen Co Ltd, China, setting up of the

trading company in Netherlands in April 2013 and by establishing warehouses

across Europe for better distribution.

9.4 Remuneration for auditor/s

1. Audit fee

The Company paid audit fee as below:

- A total of Baht - paid to the auditor/s for the past fiscal year; and

- A total of Baht 2,175,000.00 paid to the accounting firm the auditor/s work

for, or the person or business related to the auditor/s and the accounting firm

for the past fiscal year.

2. Non-audit fee

The Company made payment for other services, i.e. examination of compliance with

conditions of promotion certificates, and legal and tax advisory services, including

BOI and tax audit services, as follows:

- A total of Baht - paid to the auditor/s for the past fiscal year and

Baht - payable in the future for the service not yet fully done for the

past fiscal year; and

- A total of Baht 238,500 paid to the accounting firm the auditor/s work for,

or the person or business related to the auditor/s and the accounting firm for

the past fiscal year, and Baht 560,000 payable in the future for the service

not yet fully done for the past fiscal year.

Polyplex (Thailand) Public Company Limited 110


To the Shareholders of Polyplex (Thailand) Public Company Limited

I have audited the accompanying consolidated financial statements of Polyplex (Thailand) Public

Company Limited and its subsidiaries, which comprise the consolidated statement of financial

position as at 31 March 2013, and the related consolidated statements of income, comprehensive

income, changes in shareholdersû equity and cash flows for the year then ended, and a summary

of significant accounting policies and other explanatory information, and have also audited the

separate financial statements of Polyplex (Thailand) Public Company Limited for the same period.

Managementûs responsibility for the financial statements

Management is responsible for the preparation and fair presentation of these financial statements

in accordance with Thai Financial Reporting Standards, and for such internal control as

management determines is necessary to enable the preparation of financial statements that are

free from material misstatement, whether due to fraud or error.

Auditorûs responsibility

My responsibility is to express an opinion on these financial statements based on my audit. I

conducted my audit in accordance with Thai Standards on Auditing. Those standards require that

I comply with ethical requirements and plan and perform the audit to obtain reasonable

assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the financial statements. The procedures selected depend on the auditorûs

judgment, including the assessment of the risks of material misstatement of the financial

statements, whether due to fraud or error. In making those risk assessments, the auditor

considers internal control relevant to the entityûs preparation and fair presentation of the financial

statements in order to design audit procedures that are appropriate in the circumstances, but not

for the purpose of expressing an opinion on the effectiveness of the entityûs internal control. An

audit also includes evaluating the appropriateness of accounting policies used and the

reasonableness of accounting estimates made by management, as well as evaluating the overall

presentation of the financial statements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis

for my audit opinion.

Independent Auditorûs Report

111

Opinion

In my opinion, the financial statements referred to above present fairly, in all material respects,

the financial position of Polyplex (Thailand) Public Company Limited and its subsidiaries and of

Polyplex (Thailand) Public Company Limited as at 31 March 2013, their financial performance and

cash flows for the year then ended in accordance with Thai Financial Reporting Standards.

Emphasis of matter

I draw attention to Note 2.2 to the financial statements, during the current year a subsidiary

invested in another subsidiary. The investment was considered to be a business combination

under common control, and so the Company has to restate the consolidated financial statements

of prior periods. The Company has therefore presented consolidated statements of financial

position as at 31 March 2012 and 1 April 2011 for comparative purposes. My opinion is not

qualified in respect of this matter.

Other matter

The consolidated financial statements of Polyplex (Thailand) Public Company Limited and its

subsidiaries, and the separate financial statements of Polyplex (Thailand) Public Company Limited

for the year ended 31 March 2012 were audited in accordance with Thai Standards on Auditing

by another auditor of our firm who expressed an unqualified opinion on those statements, under

his report dated 18 May 2012.

Termphong Opanaphan

Certified Public Accountant (Thailand) No. 4501

Ernst & Young Office Limited

Bangkok: 20 May 2013



Polyplex (Thailand) Public Company Limited and its subsidiaries

As at 31 March 2013

Statements of financial position

The accompanying notes are an integral part of the financial statements.

(Unit: Baht) Consolidated Separate financial statements financial statements Note 31 March 31 March 1 April 31 March 31 March 2013 2012 2011 2013 2012 (Restated)

Assets

Current assets

Cash and cash equivalents 7 1,468,336,634 1,681,809,653 1,231,008,609 75,923,455 29,641,023

Current investments 94,001,000 - 164,946,931 78,000,000 -

Trade receivables 8 1,384,382,467 1,396,691,807 1,896,159,409 760,557,602 805,875,522

Inventories 9 1,741,438,402 1,623,791,836 1,732,304,430 672,036,481 564,604,348

Advance payment for purchase of goods 6 48,280,243 305,064,743 327,520,752 6,063,441 6,962,067

Input tax refundable 63,352,128 34,110,004 24,098,204 63,346,522 34,110,004

Other current assets 81,791,180 75,449,714 82,530,148 50,767,931 40,165,682

Total current assets 4,881,582,054 5,116,917,757 5,458,568,483 1,706,695,432 1,481,358,646

Non-current assets

Restricted bank deposits 10 11,864,119 - - - -

Investments in subsidiaries 11 - - - 1,355,546,732 1,313,491,892

Property, plant and equipment 12 11,447,677,121 6,360,048,887 5,979,205,759 4,997,594,675 3,118,710,965

Goodwill 7,038,679 3,874,351 3,874,351 - -

Other intangible assets 13 3,136,482 2,007,443 1,353,643 - -

Advance payment for purchases of assets 90,620,407 447,471,579 480,027,593 37,503,914 344,484,861

Other non-current assets 14,646,635 8,650,268 9,871,557 14,646,635 8,604,003

Total non-current assets 11,574,983,443 6,822,052,528 6,474,332,903 6,405,291,956 4,785,291,721

Total assets 16,456,565,497 11,938,970,285 11,932,901,386 8,111,987,388 6,266,650,367

113


As at 31 March 2013

Statements of financial position (continued)



Liabilities and shareholdersû equity

Current liabilities

Short-term loans from financial institutions 14 1,044,440,125 326,744,800 194,483,944 385,000,000 80,000,000

Trade and other payables 15 1,178,378,311 1,094,006,167 1,290,563,859 665,078,137 602,326,785

Accounts payable from

subsidiaryûs acquisition 2.2 - 244,060,137 - - -

Current portion of long-term loans from

financial institutions 17 455,193,839 363,759,992 387,200,147 371,427,309 271,996,222

Income tax payable 70,650 20,891,111 25,767,349 - -

Other current liabilities 270,271,567 168,621,255 164,190,477 107,545,810 79,215,427

Total current liabilities 2,948,354,492 2,218,083,462 2,062,205,776 1,529,051,256 1,033,538,434

Non-current liabilities

Long-term loans from related party 6 430,732,393 - - - -

Long-term loans from financial institutions,

net of current portion 17 4,871,708,643 1,250,516,899 1,504,733,243 2,562,418,211 1,156,339,503

Provision for long-term employee benefits 16 16,510,578 9,767,671 7,627,140 7,441,312 6,051,667

Total non-current liabilities 5,318,951,614 1,260,284,570 1,512,360,383 2,569,859,523 1,162,391,170

Total liabilities 8,267,306,106 3,478,368,032 3,574,566,159 4,098,910,779 2,195,929,604




As at 31 March 2013

Statements of financial position (continued)


Shareholdersû equity

Share capital

Registered

960,000,000 ordinary shares of Baht 1 each 960,000,000 960,000,000 960,000,000 960,000,000 960,000,000

Issued and fully paid

800,000,000 ordinary shares of Baht 1 each 800,000,000 800,000,000 800,000,000 800,000,000 800,000,000

Share premium 1,370,460,000 1,370,460,000 1,370,460,000 1,370,460,000 1,370,460,000

Retained earnings

Appropriated - statutory reserve 18 96,000,000 96,000,000 96,000,000 96,000,000 96,000,000

Unappropriated 6,639,743,223 6,401,772,010 6,381,606,683 1,746,616,609 1,804,260,763

Other components of shareholdersû equity (817,780,293) (348,086,777) (316,111,008) - -

Equity attributable to owners of the Company 8,088,422,930 8,320,145,233 8,331,955,675 4,013,076,609 4,070,720,763

Non-controlling interests of the subsidiaries 100,836,461 140,457,020 26,379,552 - -

Total shareholdersû equity 8,189,259,391 8,460,602,253 8,358,335,227 4,013,076,609 4,070,720,763

Total liabilities and shareholdersû equity 16,456,565,497 11,938,970,285 11,932,901,386 8,111,987,388 6,266,650,367


115


For the year ended 31 March 2013

Income statements

(Unit: Baht) Consolidated Separate financial statements financial statements Note 2013 2012 2013 2012 (Restated)

Revenues

Sales 21 9,230,018,464 10,143,110,995 4,205,439,768 4,560,646,524

Exchange gains 177,398,836 - 173,836,044 -

Dividend income 11 - - 9,483,705 217,596,131

Other income 87,768,151 120,696,524 49,402,782 77,719,578

Total revenues 9,495,185,451 10,263,807,519 4,438,162,299 4,855,962,233

Expenses

Cost of sales 7,874,168,461 7,831,562,679 3,941,029,982 3,831,384,958

Selling expenses 630,475,704 580,889,370 297,878,785 263,126,493

Administrative expenses 528,625,632 277,142,763 74,924,889 70,479,707

Exchange losses - 125,978,536 - 221,775,751

Total expenses 9,033,269,797 8,815,573,348 4,313,833,656 4,386,766,909

Profit before finance cost

and income tax expenses 461,915,654 1,448,234,171 124,328,643 469,195,324

Finance cost (86,806,412) (56,209,821) (45,972,797) (34,053,722)

Profit before income tax expenses 375,109,242 1,392,024,350 78,355,846 435,141,602

Income tax expenses 20 (11,657,723) (34,186,625) - -

Profit for the year 363,451,519 1,357,837,725 78,355,846 435,141,602

Profit attributable to:

Equity holders of the Company 373,971,213 1,357,607,818 78,355,846 435,141,602

Non-controlling interests of the subsidiaries (10,519,694) 229,907

363,451,519 1,357,837,725

Basic earnings per share 22

Profit attributable to equity holders of the Company 0.47 1.70 0.10 0.54






Statements of comprehensive income


(Unit: Baht) Consolidated Separate financial statements financial statements 2013 2012 2013 2012 (Restated)

Profit for the year 363,451,519 1,357,837,725 78,355,846 435,141,602

Other comprehensive income:

Exchange differences on translation of

financial statements in foreign currency (484,507,192) (27,406) - -

Other comprehensive income for the year (484,507,192) (27,406) - -

Total comprehensive income for the year (121,055,673) 1,357,810,319 78,355,846 435,141,602

Total comprehensive income attributable to:

Equity holders of the Company (99,033,704) 1,356,895,765 78,355,846 435,141,602

Non-controlling interests of the subsidiaries (22,021,969) 914,554

(121,055,673) 1,357,810,319

117

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91





Statements of changes in shareholdersû equity (continued)

(Unit: Baht) Separate financial statements Retained earnings Issued and Appropriated - fully paid Share statutory share capital premium reserve Unappropriated Total

Balance as at 1 April 2011 800,000,000 1,370,460,000 96,000,000 2,729,119,161 4,995,579,161

Total comprehensive income for the year - - - 435,141,602 435,141,602

Dividend paid (Note 23) - - - (1,360,000,000) (1,360,000,000)

Balance as at 31 March 2012 800,000,000 1,370,460,000 96,000,000 1,804,260,763 4,070,720,763


Total comprehensive income for the year - - - 78,355,846 78,355,846

Dividend paid (Note 23) - - - (136,000,000) (136,000,000)



119

(Unit: Baht) Consolidated Separate financial statements financial statements 2013 2012 2013 2012 (Restated) Cash flows from operating activities Profit before tax 375,109,242 1,392,024,350 78,355,846 435,141,602 Adjustments to reconcile profit before tax to net cash provided by (paid from) operating activities: Depreciation and amortisation 411,977,123 369,431,898 234,512,345 196,282,069 Doubtful debts (doubtful debts recovery) 3,719,807 279,485 - (24,912) Decrease of inventory to net realisable value 13,192,437 2,719,948 13,192,438 2,719,948 Gains on sales of current investments (538,611) (3,538,306) (538,611) (3,538,306) Losses (gains) on sales of property, plant and equipment 26,070,300 (2,000) 13,811,241 - Provision for long-term employee benefits 12,904,832 7,270,420 1,673,050 1,682,185 Unrealised losses (gains) on exchange rate (150,338,484) 19,968,774 (142,669,550) 20,508,036 Exchange loss on the redemption of investment in subsidiary - 253,267,774 - 253,267,774 Dividend income - - (9,483,705) (217,596,131) Interest expenses 55,831,760 45,147,468 44,980,673 33,002,697 Profit from operating activities before changes in operating assets and liabilities 747,928,406 2,086,569,811 233,833,727 721,444,962 Operating assets (increase) decrease Trade receivables 444,110 495,999,770 30,498,118 371,036,374 Inventories (130,693,211) 105,740,733 (120,624,571) (96,547,579) Other current assets 219,308,852 22,992,017 (27,331,465) 51,514,424 Other non-current assets (5,996,367) 1,221,289 (6,042,632) 1,222,109 Operating liabilities increase (decrease) Trade and other payables 68,428,271 (56,597,215) 46,859,648 (78,613,381) Other current liabilities 108,647,576 5,729,781 24,879,002 (27,380,864) Payment of long-term employee benefits (5,523,533) (4,988,344) (283,405) - Cash from operating activities 1,002,544,104 2,656,667,842 181,788,422 942,676,045 Cash paid for corporate income tax (30,600,596) (42,529,867) - - Net cash from operating activities 971,943,508 2,614,137,975 181,788,422 942,676,045



Cash flow statements




(Unit: Baht) Consolidated Separate financial statements financial statements 2013 2012 2013 2012 (Restated) Cash flows from investing activities Increase in restricted bank deposits (11,864,119) - - - Decrease (increase) in current investments (93,462,389) 168,485,237 (77,461,389) 168,485,237 Cash paid for investments in subsidiaries (266,837,337) - (42,054,840) (675,954,680) Cash received from the redemption of investments in subsidiary - - - 1,045,609,865 Dividend received from subsidiaries - - 9,483,705 217,596,131 Decrease (increase) in advance payment for purchases of assets 356,851,172 32,556,014 306,980,947 (93,486,006) Increase (decrease) in other payables for purchases of fixed assets 19,780,187 (145,630,991) 18,538,945 (145,630,991) Proceeds from sales of property, plant and equipment 15,209,296 70,088,959 623,364 - Purchases of property, plant and equipment (5,898,754,709) (914,563,223) (2,110,206,906) (192,207,407) Increase in goodwill (3,164,328) - - - Increase in other intangible assets (2,111,021) (1,433,493) - - Net cash from (used in) investing activities (5,884,353,248) (790,497,497) (1,894,096,174) 324,412,149 Cash flows from financing activities Increase in short-term loans from financial institutions 717,695,325 132,260,856 305,000,000 80,000,000 Increase in long-term loans from related party 430,732,393 - - - Increase (decrease) in long-term loans from financial institutions 3,987,139,137 (275,697,230) 1,648,464,960 41,049,022 Cash paid for interest expenses (134,915,535) (54,135,336) (58,874,776) (40,538,000) Proceeds from increase in share capital - 349,545,812 - - Dividend payment (136,000,000) (1,360,000,000) (136,000,000) (1,360,000,000) Dividend paid to non-controlling interests of subsidiary (542,636) (2,187,204) - - Cash received from non-controlling interests of subsidiaries 9,032,647 - - - Net cash from (used in) financing activities 4,873,141,331 (1,210,213,102) 1,758,590,184 (1,279,488,978) Decrease in translation adjustments (174,204,610) (162,626,332) - - Net increase (decrease) in cash and cash equivalents (213,473,019) 450,801,044 46,282,432 (12,400,784) Cash and cash equivalents at beginning of year 1,681,809,653 1,231,008,609 29,641,023 42,041,807 Cash and cash equivalents at end of year 1,468,336,634 1,681,809,653 75,923,455 29,641,023



Cash flow statements (continued)


121

1. General information Polyplex (Thailand) Public Company Limited (çThe Companyé) is a public company

incorporated and domiciled in Thailand. Its parent company is Polyplex Corporation Limited, which was incorporated in India. The Company is principally engaged in the manufacture and distribution of polyester films, metallized films, extrusion coated films, cast polypropylene films, silicone coated films and PET resins. The registered addresses of the Companyûs head office and factories are as follows:

Head office: 75/26 Ocean Tower II, 18th Floor, Soi Sukhumvit 19, Sukhumvit Road, Kwaeng

North Klongtoey, Khet Wattana, Bangkok.

Factory 1: Siam Eastern Industrial Park, 60/24 Moo 3, Tambol Mabyangporn, Amphur Pluakdaeng, Rayong.

Factory 2: Siam Eastern Industrial Park, 60/91 Moo 3, Tambol Mabyangporn, Amphur

Pluakdaeng, Rayong. Factory 3: Siam Eastern Industrial Park, 60/109 Moo 3, Tambol Mabyangporn, Amphur

Pluakdaeng, Rayong.

2. Basis of preparation

2.1 The financial statements have been prepared in accordance with accounting standards enunciated under the Accounting Professions Act B.E. 2547 and their presentation has been made in compliance with the stipulations of the Notification of the Department of Business Development dated 28 September 2011, issued under the Accounting Act B.E. 2543.

The financial statements in Thai language are the official statutory financial

statements of the Company. The financial statements in English language have been translated from the Thai language financial statements.

The financial statements have been prepared on a historical cost basis except where

otherwise disclosed in the accounting policies.

2.2 Basis of consolidation a) The consolidated financial statements include the financial statements of the

Company (çthe Companyé) and the following subsidiary companies (çthe subsidiariesé):



Notes to consolidated financial statements



Companyûs name Nature of business Country of Percentage of incorporation shareholding 2013 2012 Percent Percent

EcoBlue Ltd. Manufacture and distribution Thailand 80.00 - of recycle products Polyplex (Singapore) Pte. Ltd. Investment holding company Singapore 100.00 100.00 Polyplex America Holdings Inc. Investment holding company United States 100.00 100.00 of America Polyplex (Americas) Inc. Distribution of plastic film United States - 80.24 of America Polyplex Europa Polyester Film Sanayi Manufacture and distribution Turkey 100.00 100.00 Ve Ticaret Anonim Sirketi (100% owned of polyester film and chips by Polyplex (Singapore) Pte. Ltd.) Polyplex Trading (Shenzhen) Co., Ltd. Distribution of plastic film The Peopleûs 100.00 100.00 (100% owned by Polyplex (Singapore) Republic of China Pte. Ltd.) Polyplex USA LLC (100% owned by Manufacture and distribution United States 100.00 100.00 Polyplex America Holdings Inc.) of polyester film of America Polyplex Resins Sanayi Ve Ticaret Anonim Manufacture and distribution Turkey 67.00 67.00 Sirketi (67% owned by Polyplex Europa of polyester resins Polyester Film Sanayi Ve Ticaret Anonim Sirketi)

b) Subsidiaries are fully consolidated, being the date on which the Company obtains

control, and continue to be consolidated until the date when such control ceases. c) The financial statements of the subsidiaries are prepared using the same significant

accounting policies as the Company. d) The assets and liabilities in the financial statements of overseas subsidiary

companies are translated to Baht using the exchange rate prevailing on the end of reporting period, and revenues and expenses translated using monthly average exchange rates. The resulting differences are shown under the caption of çExchange differences on translation of financial statements in foreign currencyé in the consolidated statements of changes in shareholdersû equity.

e) Material balances and transactions between the Company and its subsidiary companies have been eliminated from the consolidated financial statements.

f) Non-controlling interests represent the portion of profit or loss and net assets of the subsidiaries that are not held by the Company and are presented separately in the consolidated profit or loss and within equity in the consolidated statement of financial position.

g) On 5 November 2012, the Companyûs subsidiary, Polyplex Europa Polyester Film Sanayi Ve Ticaret Anonim Sirketi (çPolyplex Europaé), acquired 67% of the ordinary shares of a subsidiary of the major shareholder, Polyplex Resins Sanayi Ve Ticaret Anonim Sirketi (çPolyplex Resinsé), which was established on 2 December 2011. This acquisition was considered to be a business combination under common control, and the difference between the cost of this business combination under common control and the net book value of the equity of Polyplex Resins, amounting to EUR 0.76 million or equivalent to

123

Baht 31 million, was therefore recorded as çSurplus on business combination under common controlé and separately presented in the consolidated statements of changes in shareholdersû equity. Because this acquisition was a business combination under common control, the Company has treated Polyplex Resins acquired in November 2012, as if it had been a subsidiary of Polyplex Europa since it was established (2 December 2011). Therefore, the consolidated statements of income and comprehensive income for the year ended 31 March 2013 included the operating results of Polyplex Resins as from 1 April 2012, ignoring the actual date of the business combination under common control (the date the shares of the subsidiary were acquired). The operating results of Polyplex Resins for the period as from 1 April 2012 to 5 November 2012, which were included in the consolidated statements of income and comprehensive income for the current year, were loss amounting to approximately Baht 27 million (loss attributable to equity holders of the Company was Baht 18 million).

The net book values of assets and liabilities as at the acquisition date and the cash

payment made to purchase the investment in subsidiary are summarised below.

Thousand Euro

Cash payment for purchase of investment in subsidiary 5,927 Net book values of assets and liabilities as at the acquisition date Cash and cash equivalents 3,049 Other current assets 137 Property, plant and equipment 23,402 Intangible assets 3 Other non-current assets 1,843 Short-term loans from bank (7,762) Trade and other payables (1,102) Other current liabilities (307) Loans from related party (11,553) Other non-current liabilities (2) Total net assets 7,708 Less: Non-controlling interests of subsidiary (2,544) Net assets of equity holders of the Company 5,164 Surplus on business combination under common control 763

The Company restated the consolidated financial statements for the year

ended 31 March 2012, which is presented herein for comparative purposes, as if Polyplex Resins had been a subsidiary of Polyplex Europa since it was established. In addition, the Company recorded the accounts payable as a result of the acquisition of Polyplex Resins, amounting to EUR 5.9 million or equivalent to Baht 244 million, in the consolidated statement of financial



position as at 31 March 2012, in order to reflect the surplus resulting from the business combination. This amount represents payment made by Polyplex Europa in November 2012 for the purpose of investment in Polyplex Resins.

The amounts of adjustments affecting the consolidated statement of financial

position as at 31 March 2012 and the consolidated statement of income for the year then ended are summarised below.

Thousand Baht

Statement of financial position Increase in cash and cash equivalents 149,637 Increase in other current assets 2,880 Increase in property, plant and equipment 91,477 Increase in advance payment for purchases of assets 102,156 Increase in trade and other payables 1,074 Increase in accounts payable from subsidiaryûs acquisition 244,060 Increase in other current liabilities 4 Increase in unappropriated retained earnings 18,487 Decrease in other components of shareholdersû equity 31,349 Increase in non-controlling interests of the subsidiaries 113,874 Statement of income Increase in administrative expenses 2,325 Increase in exchange losses 3,680 Increase in finance cost 70 Decrease in profit for the year 6,075 Decrease in profit attributable to equity holders of the Company 4,070 Decrease in profit attributable to non-controlling interests of the subsidiaries 2,005 Decrease in basic earnings per share (Baht) 0.005

The consolidated statement of financial position as at 1 April 2011, which is

presented herein for comparative purposes, was not restated, because Polyplex Resins had yet to be established on that period.

In addition, in February 2013 Polyplex Europa made an additional investment

in Polyplex Resins amounted to EUR 0.2 million, or equivalent to Baht 10.2 million.

h) In January 2013, the Company acquired additional ordinary shares and preference

shares of Polyplex (Americas) Inc., as described in Note 11 to the financial statements. As a result, the Companyûs shareholding in Polyplex (Americas) Inc.

125

has increased from 80.24 percent to 100 percent. Subsequently, Polyplex (Americas) Inc. was merged with Polyplex USA LLC, and Polyplex (Americas) Inc. ceased to exist.

2.3 The separate financial statements, which present investments in subsidiaries under

the cost method, have been prepared solely for the benefit of the public. 3. New accounting standards not yet effective The Federation of Accounting Professions issued the following new/revised accounting

standards that are effective for fiscal years beginning on or after 1 January 2013. Accounting standards: TAS 12 Income Taxes TAS 20 (revised 2009) Accounting for Government Grants and Disclosure of Government Assistance TAS 21 (revised 2009) The Effects of Changes in Foreign Exchange Rates Financial Reporting Standard: TFRS 8 Operating Segments Accounting Standard Interpretations: TSIC 10 Government Assistance - No Specific Relation to Operating Activities TSIC 21 Income Taxes - Recovery of Revalued Non-Depreciable Assets TSIC 25 Income Taxes - Changes in the Tax Status of an Entity or its Shareholders

Accounting Treatment Guidance for Transfers of Financial Assets

The Companyûs management believes that these accounting standards will not have any

significant impact on the financial statements for the year when they are initially applied,

except for the following accounting standard:

TAS 12 Income Taxes

This accounting standard requires an entity to identify temporary differences between the

carrying amount of an asset or liability in the statement of financial position and its tax

base and recognise the tax effects as deferred tax assets or liabilities subjecting to certain

recognition criteria. The management of the Company expects the adoption of this

accounting standard to have the effect of increasing the Company and its subsidiariesû

brought-forward retained earnings of the fiscal year 2014 by approximately Baht 54 million

(the Company only: approximately Bath 54 million).

In addition, the Federation of Accounting Professions issued the following new/revised

accounting standards that are effective for fiscal years beginning on or after 1 January

2014 and 2016.



Effective date

Financial Reporting Standard:

TFRS 4 Insurance Contracts 1 January 2016

Accounting Standard Interpretation:

TSIC 29 Service Concession Arrangements: Disclosures 1 January 2014

Financial Reporting Standard Interpretations:

TFRIC 1 Changes in Existing Decommissioning, Restoration 1 January 2014

and Similar Liabilities

TFRIC 4 Determining whether an Arrangement contains a Lease 1 January 2014

TFRIC 5 Rights to Interests arising from Decommissioning, 1 January 2014

Restoration and Environmental Rehabilitation Funds

TFRIC 7 Applying the Restatement Approach under 1 January 2014

TAS 29 Financial Reporting in Hyperinflationary Economies

TFRIC 10 Interim Financial Reporting and Impairment 1 January 2014

TFRIC 12 Service Concession Arrangements 1 January 2014

TFRIC 13 Customer Loyalty Programmes 1 January 2014

The management of the Company has assessed the effect of the above financial reporting

standard, accounting standard interpretation and financial reporting standard interpretations

and believes that they are not relevant to the business of the Company or do not have any

significant impact on the financial statements.

4. Significant accounting policies

4.1 Revenue recognition Sales of goods Sales of goods are recognised when the significant risks and rewards of ownership

of the goods have passed to the buyer. Sales are the invoiced value, excluding value added tax, of goods supplied after deducting discounts and allowances.

Interest income Interest income is recognised on an accrual basis based on the effective interest rate.

Dividends Dividends are recognised when the right to receive the dividends is established.

4.2 Cash and cash equivalents Cash and cash equivalents consist of cash in hand and at banks, and all highly

liquid investments with an original maturity of three months or less and not subject to withdrawal restrictions.

127

4.3 Trade receivables Trade receivables are stated at the net realisable value. Allowance for doubtful

accounts is provided for the estimated losses that may be incurred in collection of receivables. The allowance is generally based on collection experiences and analysis of debt aging.

4.4 Inventories Finished goods and work in process are valued at the lower of cost (average

method) and net realisable value. Cost includes all production costs and attributable factory overheads.

Raw materials, spare parts and factory supplies are valued at the lower of cost

(average method) and net realisable value and are charged to production costs whenever consumed.

4.5 Investments Investments in subsidiaries are accounted for in the separate financial statements

using the cost method.

The weighted average method is used for computation of the cost of investments.

In the event the Company reclassifies investments from one type to another, such investments will be readjusted to their fair value as at the reclassification date. The differences between the carrying amount of the investments and their fair value on the date of reclassification are recorded in profit or loss or recorded as other components of shareholdersû equity, depending on the type of investment that is reclassified.

4.6 Property, plant and equipment/Depreciation Land is stated at cost. Buildings and equipment are stated at cost less accumulated

depreciation and allowance for loss on impairment of assets (if any).

Depreciation of buildings and building improvements, machinery and equipment is calculated by reference to their costs on the straight-line basis. Depreciation of other equipment is calculated on the sum of the year digits basis. The estimated useful lives of plant and equipment are as follows:

Buildings and building improvements - 20 and 50 years Machinery and equipment - 4 - 20 years Furniture, fixtures and office equipment - 3 - 10 years Motor vehicles - 5 - 7 years

Depreciation is included in determining income.

No depreciation is provided on land, machinery in transit, and assets under

installation and construction.



4.7 Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of an

asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the period they are incurred. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

4.8 Intangible assets Intangible assets acquired through business combination are initially recognised at their

fair value on the date of business acquisition while intangible assets acquired in other cases are recognised at cost. Following the initial recognition, the intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses.

Intangible assets with finite lives are amortised on a systematic basis over the

economic useful life and tested for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method of such intangible assets are reviewed at least at each financial year end. The amortisation expense is charged to profit or loss.

A summary of the intangible assets with finite useful lives is as follows: Useful lives Computer software 3 - 5 years

4.9 Goodwill Goodwill is initially recorded at cost, which equals to the excess of cost of business

combination over the fair value of the net assets acquired. If the fair value of the net assets acquired exceeds the cost of business combination, the excess is immediately recognised as gain in profit or loss.

Goodwill is carried at cost less any accumulated impairment losses. Goodwill is

tested for impairment annually and when circumstances indicate that the carrying value may be impaired.

4.10 Related party transactions Related parties comprise enterprises and individuals that control, or are controlled

by, the Company and its subsidiaries, whether directly or indirectly, or which are under common control with the Company and its subsidiaries.

They also include associated companies and individuals which directly or indirectly

own a voting interest in the Company and its subsidiaries that gives them significant influence over the Company and its subsidiaries, key management personnel, directors and officers with authority in the planning and direction of the operations of the Company and its subsidiaries.

129

4.11 Long-term leases Leases of property, plant or equipment which do not transfer substantially all the

risks and rewards of ownership are classified as operating leases. Operating lease payments are recognised as an expense in profit or loss on a straight line basis over the lease term.

4.12 Foreign currencies Transactions in foreign currencies are translated into Baht at the exchange rate ruling

at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into Baht at the exchange rate ruling at the end of reporting period.

Gains and losses on exchange are included in determining income.

4.13 Impairment of assets At the end of each reporting period, the Company and its subsidiaries perform

impairment reviews in respect of the property, plant and equipment and other intangible assets whenever events or changes in circumstances indicate that an asset may be impaired. The Company and its subsidiaries also carry out annual impairment reviews in respect of goodwill. An impairment loss is recognised when the recoverable amount of an asset, which is the higher of the assetûs fair value less costs to sell and its value in use, is less than the carrying amount.

An impairment loss is recognised in profit or loss.

4.14 Employee benefits Short-term employee benefits Salaries, wages, bonuses and contributions to the social security fund are recognised

as expenses when incurred.

Post-employment benefits and other long-term employee benefits Defined contribution plans The Company and its employees have jointly established a provident fund. The fund

is monthly contributed by employees and by the Company. The fundûs assets are held in a separate trust fund and the Companyûs contributions are recognised as expenses when incurred.

Defined benefit plans and other long-term employee benefits The Company has obligations in respect of the severance payments it must make to

employees upon retirement under labor law and other employee benefit plans. The Company treats these severance payment obligations as a defined benefit plan. In addition, the Company provides other long-term employee benefit plan, namely long service awards.



The obligation under the defined benefit plan and other long-term employee benefit plans is determined by a professionally qualified independent actuary based on actuarial techniques, using the projected unit credit method.

For the first-time adoption of TAS 19 Employee Benefits in 2011, the Company

elected to recognise the transitional liability, which exceeds the liability that would have been recognised at the same date under the previous accounting policy, through an adjustment to the beginning balance of retained earnings in 2011.

4.15 Provisions Provisions are recognised when the Company and its subsidiaries have a present

obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

4.16 Income tax Income tax is provided in the accounts at the amount expected to be paid to the

taxation authorities, based on taxable profits determined in accordance with tax legislation.

5. Significant accounting judgements and estimates The preparation of financial statements in conformity with financial reporting standards at

times requires management to make subjective judgements and estimates regarding matters that are inherently uncertain. These judgements and estimates affect reported amounts and disclosures; and actual results could differ from these estimates. Significant judgements and estimates are as follows:

Allowance for doubtful accounts In determining an allowance for doubtful accounts, the management needs to make

judgement and estimates based upon, among other things, past collection history, aging profile of outstanding debts and the prevailing economic condition.

Property plant and equipment/Depreciation In determining depreciation of plant and equipment, the management is required to make

estimates of the useful lives and residual values of the plant and equipment and to review estimate useful lives and residual values when there are any changes.

In addition, the management is required to review property, plant and equipment for

impairment on a periodical basis and record impairment losses when it is determined that their recoverable amount is lower than the carrying amount. This requires judgements regarding forecast of future revenues and expenses relating to the assets subject to the review.

131

Post-employment benefits under defined benefit plans and other long-term employee

benefits

The obligation under the defined benefit plan and other long-term employee benefit plans

is determined based on actuarial techniques. Such determination is made based on various

assumptions, including discount rate, future salary increase rate, mortality rate and staff

turnover rate.

6. Related party transactions During the years, the Company and its subsidiaries had significant business transactions

with related parties. Such transactions, which are summarised below, arose in the ordinary

course of business and were concluded on commercial terms and bases agreed upon

between the Company and those related parties. (Unit: Million Baht)

Consolidated Separate

financial statements financial statements Pricing policy

2013 2012 2013 2012

Transactions with subsidiaries

(eliminated from the consolidated financial statements)

Sales of goods - - 981.4 724.4 With reference to market prices

Dividend income - - 9.5 217.6 As declared

Purchases of raw materials - - 2.1 - With reference to market prices

Transactions with related companies

Sales of goods 36.6 - 36.6 - With reference to market prices

Purchases of raw materials 533.8 806.9 99.4 58.5 With reference to market prices

Other expenses 24.1 6.9 7.0 4.0 With reference to market prices

Interest expenses 3.9 - - - 4.5 percent per annum

Purchases of investments in subsidiaries from related parties

During the current year, Polyplex Europa Polyester Film Sanayi Ve Ticaret Anonim Sirketi, a

subsidiary, acquired investments in Polyplex Resins Sanayi Ve Ticaret Anonim Sirketi from

Polyplex (Asia) Pte. Ltd., the Companyûs major shareholder, as described in Note 2.2 to the

financial statements. In addition, as described in Note 11 to the financial statements the

Company acquired additional ordinary shares and preference shares of Polyplex (Americas)

Inc. amounting to Baht 23 million, of which Baht 9 million was acquired from Polyplex

Corporation Limited.



As at 31 March 2013 and 2012, the balances of the accounts between the Company and

those related parties are as follows: (Unit: Thousand Baht)

Consolidated Separate financial statements financial statements 2013 2012 2013 2012 Trade receivables - related parties (Note 8) Subsidiaries - - 248,470 220,341 Advance payment for purchases of goods - related party Parent company 31,584 218,211 - - Trade payables - related party (Note 15) Parent company 5,645 13,504 5,645 13,504

Short-term loans to related party and long-term loans from related party As at 31 March 2013 and 2012, the balance of loans between the Company and the

related parties, and the movement of these loans are as follows: (Unit: Thousand Baht)

Separate financial statements Balance as at Increase Decrease Balance as at Short-term loans 31 March during the during the 31 March to related party Related by 2012 year year 2013 Polyplex USA LLC Subsidiary - 334,119 (334,119) -

(Unit: Thousand Baht)

Consolidated financial statements Balance as at Increase Decrease Balance as at Long-term loans 31 March during the during the 31 March from related party Related by 2012 year year 2013 Polyplex (Asia) Pte. Ltd. Major shareholder - 430,732 - 430,732

As at 31 March 2013, long-term loans from related party represent interest-free loans of a

subsidiary. The loans are repayable within 1 year and 3 months. If on the maturity date, the

subsidiary is unable to repay the loans in full, the loans shall be extended for additional

period of 1 years and 3 months.

133

Directors and managementûs remuneration

During the years ended 31 March 2013 and 2012, the Company and its subsidiaries had

employee benefit expenses payable to their directors and management as below.


Consolidated Separate financial statements financial statements 2013 2012 2013 2012

Short-term employee benefits 93.6 64.1 31.1 33.3

Post-employment benefits 0.3 0.3 - -

Total 93.9 64.4 31.1 33.3

Guarantee obligations with related parties

The Company has outstanding guarantee obligations with its related parties, as described

in Note 26.4 to the financial statements.

7. Cash and cash equivalents


Consolidated Separate financial statements financial statements 2013 2012 2013 2012 (Restated)

Cash 2,387 2,154 740 716

Bank deposits 1,465,950 1,679,656 75,183 28,925

Total 1,468,337 1,681,810 75,923 29,641

As at 31 March 2013, bank deposits in saving accounts and fixed deposits carried

interests between 0.05 and 7.15 percent per annum (2012: between 0.05 and 10.10 percent

per annum).



8. Trade receivables The balances of trade receivables as at 31 March 2013 and 2012, aged on the basis of

due dates, are summarised below. (Unit: Thousand Baht)


Trade receivables - unrelated parties

Not yet due 1,223,317 1,334,328 464,042 565,916

Past due

Up to 3 months 135,132 54,482 47,899 13,683

3 - 6 months 21,365 8,704 75 5,935

Over 6 months 11,482 2,755 1,234 1,162

Total 1,391,296 1,400,269 513,250 586,696

Less: Allowance for doubtful debts (6,914) (3,577) (1,162) (1,162)

Net 1,384,382 1,396,692 512,088 585,534

Trade receivables - related parties

Not yet due - - 244,661 220,341

Past due

3 - 6 months - - 3,809 -

Total - - 248,470 220,341

Total trade receivables - net 1,384,382 1,396,692 760,558 805,875

9. Inventories

(Unit: Thousand Baht) Consolidated financial statements Reduce cost to

Cost net realisable value Inventories - net

2013 2012 2013 2012 2013 2012

Finished goods 544,403 528,827 (7,578) (4,125) 536,825 524,702

Work in process 253,504 197,822 (11,720) (2,128) 241,784 195,694

Raw materials 546,170 512,851 - - 546,170 512,851

Spare parts and factory supplies 235,748 179,796 - - 235,748 179,796

Goods in transit 180,911 210,749 - - 180,911 210,749

Total 1,760,736 1,630,045 (19,298) (6,253) 1,741,438 1,623,792

135

(Unit: Thousand Baht) Separate financial statements Reduce cost to

Cost net realisable value Inventories - net

2013 2012 2013 2012 2013 2012

Finished goods 71,489 34,480 (4,794) (1,195) 66,695 33,285 Work in process 156,162 107,807 (11,721) (2,128) 144,441 105,679 Raw materials 312,075 314,284 - - 312,075 314,284 Spare parts and factory supplies 144,160 94,000 - - 144,160 94,000 Goods in transit 4,665 17,356 - - 4,665 17,356 Total 688,551 567,927 (16,515) (3,323) 672,036 564,604

10. Restricted bank deposits These represent fixed deposits amounting to USD 404,802 million, pledged with the bank

as per terms and conditions of the long-term loan facility of Polyplex USA LLC.

11. Investments in subsidiaries These represent investments in ordinary shares and preference shares in the following

subsidiary companies: (Unit: Thousand Baht)

Separate financial statements Dividend received Shareholding for the years Companyûs name Paid-up capital percentage Cost ended 31 March 2013 2012 2013 2012 2013 2012 2013 2012 Percent Percent

Ordinary shares Polyplex (Singapore) Pte. Ltd. EUR EUR 0.8 million 0.8 million 100.00 100.00 41,440 41,440 - 191,316 Polyplex (Americas) Inc. USD - 1.3 million - 80.24 - 41,661 1,920 4,673 Polyplex America Holdings Inc. USD USD 29.6 million 22.0 million 100.00 100.00 880,249 675,954 - - EcoBlue Limited Baht 20.1 million - 80.00 - 19,277 - - - 940,966 759,055 1,920 195,989 Preference shares Polyplex (Singapore) Pte. Ltd. EUR EUR 8.4 million 8.4 million 100.00 100.00 414,581 414,581 - 3,192 Polyplex (Americas) Inc. USD - 4.2 million - 96.15 - 139,856 7,564 18,415 414,581 554,437 7,564 21,607 Total investments in subsidiaries 1,355,547 1,313,492 9,484 217,596



During the current year, the Company invested Baht 19 million in ordinary shares of

EcoBlue Limited, in accordance with a resolution of the meeting of the Board of Directors

of the Company held on 8 August 2012. The Company has an 80% interest in this

company.

In accordance with a resolution of a meeting of the Board of Directors of the Company

held on 7 January 2013, in January 2013 the Company made an additional investment in

Polyplex (Americas) Inc., comprising 19.76% of all ordinary shares and 32,000 preference

shares (equivalent to 3.85% of all preference shares), with a total acquisition cost of USD

0.76 million, or equivalent to Baht 23 million. After the acquisition, the Companyûs interest

in the ordinary shares and preference shares of Polyplex (Americas) Inc. increased to

100%. The difference between the cost of the additional investment and the carrying

amount of the non-controlling interests acquired, amounting to Baht 3.3 million, has been

presented in other components of shareholdersû equity in the consolidated statement of

changes in shareholdersû equity.

After the above additional investment in Polyplex (Americas) Inc., Polyplex (Americas) Inc.

was merged with Polyplex USA LLC, whereby Polyplex America Holdings Inc. issued 1,524

ordinary shares with a par value of USD 0.01 each to the Company at USD 7.6 million to

replace the ordinary shares and preference shares of Polyplex (Americas) Inc., which were

cancelled.

As at 31 March 2013 and 2012, the Company had investments in 39,100 preference shares

of Polyplex (Singapore) Pte. Ltd. These preference shares are non-cumulative and non-

participative preference shares. The Company is entitled to receive dividend at a rate not

to exceed 7% per annum, in the year in which dividend is declared.

137

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: Tho

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31 M

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Net b

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ce in

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Depr

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(Bah

t 186

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anuf

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196,2

82

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(Bah

t 223

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234,5

12

141

As at 31 March 2013, certain equipment items of the Company and its subsidiaries have

been fully depreciated but are still in use. The gross carrying amount (before deducting

accumulated depreciation) of those assets amounted to approximately Baht 38.9 million

(2012: Baht 42.6 million) (The Company only: Baht 25.4 million, 2012: Baht 20.3 million).

The Company and its subsidiaries have pledged their assets amounting to approximately

Baht 2,465.8 million (2012: Baht 2,128.7 million) as collateral against credit facilities

received from financial institutions (The Company only: Baht 2,379.9 million, 2012: Baht

1,944.6 million).

In July 2012, Polyplex USA LLC acquired a group of assets used in its metallized film

business from a company, with the acquisition cost of approximately USD 6.3 million. The

acquired group of assets are summarised below.

Million USD

Trade receivables 2.8

Inventories 1.7

Machinery and equipment 1.8

The acquired machinery and equipment of USD 1.8 million, or equivalent to Baht 54.8

million, was already included in the movements of the property, plant and equipment

account during the year.

13. Intangible assets Details of intangible assets (computer software) are as follows:

(Unit: Thousand Baht) Consolidated financial statement

Cost

1 April 2011 5,084

Purchases 1,433

Translation adjustment (232)

31 March 2012 6,285

Purchases 2,111

Disposals (276)


31 March 2013 7,474



(Unit: Thousand Baht) Consolidated financial statement

Accumulated amortisation

1 April 2011 3,730

Amortisation expenses for the year 710


31 March 2012 4,278

Amortisation expenses for the year 734

Disposals (276)


31 March 2013 4,338

Net book value

31 March 2012 2,007

31 March 2013 3,136

Amortisation expenses for the year

2012 710

2013 734

14. Short-term loans from financial institutions

(Unit: Thousand Baht) Interest rate Consolidated Separate

(percent per annum) financial statements financial statements

2013 2012 2013 2012 2013 2012

Short-term loans LIBOR + 1.5%

from banks and

LIBOR + 2.0% LIBOR + 1.5% 659,440 246,745 - -

Promissory notes

(packing credits) 3.45% - 3.55% 3.45% 385,000 80,000 385,000 80,000

Total 1,044,440 326,745 385,000 80,000

Short-term loans from banks as at 31 March 2013 represent the US dollar loans of USD

22.5 million (2012: USD 8.0 million) obtained by subsidiaries. These loans were guaranteed

by the Company.

143

15. Trade and other payables (Unit: Thousand Baht)

Consolidated Separate financial statements financial statements 2013 2012 2013 2012 (Restated)

Trade payables - related party 5,645 13,504 5,645 13,504

Trade payables - unrelated parties 1,035,298 1,018,140 540,480 527,535

Other payables 59,920 1,074 41,438 -

Other payables for purchases of fixed assets 77,515 61,288 77,515 61,288

Total trade and other payables 1,178,378 1,094,006 665,078 602,327

16. Provision for long-term employee benefits Provision for long-term employee benefits, which is compensations on employeesû

retirement, was as follows: (Unit: Thousand Baht)


Defined benefit obligation at

beginning of year 9,768 7,627 6,052 4,370

Current service cost 12,393 6,769 1,429 1,501

Interest cost 512 501 244 181

Benefits paid during the year (5,524) (4,988) (284) -

Translation adjustment (638) (141) - -

Provisions for long-term employee

benefits at end of year 16,511 9,768 7,441 6,052

Long-term employee benefit expenses included in the profit or loss was as follows: (Unit: Thousand Baht)


Current service cost 12,393 6,769 1,429 1,501

Interest cost 512 501 244 181

Total expense recognised in profit or loss 12,905 7,270 1,673 1,682



Principal actuarial assumptions at the valuation date were as follows: (Unit: Thousand Baht)

Consolidated Separate financial statements financial statements 2013 2012 2013 2012 (% per annum) (% per annum) (% per annum) (% per annum)

Discount rate 4.2 and 10.0 4.2 and 10.0 4.2 4.2 Future salary increase rate (depending on age of employee) 3.0 - 8.0 3.0 - 8.0 3.0 - 8.0 3.0 - 8.0

17. Long-term loans from financial institutions

(Unit: Thousand Baht) Repayment Consolidated Separate Loans schedule financial statements financial statements 2013 2012 2013 2012 Floating rate loans Repayable as from (Euribor + 0.6% to 3.8%) April 2006 to August 2019 1,738,993 349,312 872,905 163,371 Floating rate loans Repayable as from (Libor + 1.50% to 2.95%) October 2009 to July 2020 3,481,310 1,115,105 1,954,340 1,115,105 Fixed rate loans Repayable as from (3.83% to 5.54%) April 2006 to July 2016 106,600 149,860 106,600 149,860

Total 5,326,903 1,614,277 2,933,845 1,428,336

Less: Current portion (455,194) (363,760) (371,427) (271,996)

Long-term loans - net of current portion 4,871,709 1,250,517 2,562,418 1,156,340

The Companyûs loan facilities are secured by the mortgage of land, premises and

machinery of the Company. The subsidiaryûs loan facilities are secured by the mortgage of its land and premises and the pledge of its machinery and bank deposits, and are guaranteed by the Company as described in Note 26.4 to the financial statements.

The loan agreements contain covenants that, among other things, require the Company

and its subsidiaries to maintain a certain debt to equity ratio and debt service coverage ratio, and require a subsidiary to maintain a particular current ratio.

As at 31 March 2013, the Company had two interest rate swap agreements with a bank,

under which the Company agreed to swap a floating interest rate of LIBOR for a fixed interest rate of 2.61 percent per annum on outstanding principal of USD 1.6 million and to swap a floating interest rate of LIBOR for a fixed interest rate of 3.54 percent per annum on outstanding principal of USD 2.04 million. The swap agreements will mature on 31 July 2016.

145

18. Statutory reserve Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is

required to set aside to a statutory reserve at least 5 percent of its net profit after

deducting accumulated deficit brought forward (if any), until the reserve reaches 10 percent

of the registered capital. The statutory reserve is not available for dividend distribution. At

present, the statutory reserve has fully been set aside.

19. Expenses by nature Significant expenses by nature are as follows:



Salaries, wages and other employee

benefits 805,098 553,559 310,463 249,981

Depreciation and amortisation 411,977 369,432 234,512 196,282

Loss on diminutions in value of inventories 13,192 2,720 13,192 2,720

Raw materials and consumables used 5,704,793 5,688,152 3,070,983 3,040,290

Changes in inventories of finished goods

and work in process (71,258) 92,955 (85,364) 2,836

20. Income tax No corporate income tax was payable for the years since the Company has been granted

promotional privileges under the Investment Promotion Act B.E. 2520 by the Board of

Investment and has tax loss brought forward in excess of profit from non-promoted

operations for the years.

Polyplex Europa Polyester Film Sanayi Ve Ticaret Anonim Sirketi, a subsidiary and being a

manufacturing company which operates in a Free Trade Zone, is eligible to benefit from

corporate tax exemptions, until the end of the financial year of full membership of Turkey

to the European Union. However, this exemption is limited to the earnings related to the

sale of manufactured goods.

21. Promotional privileges The Company has received promotional privileges from the Board of Investment for the

manufacture of polyester films, metallized films, extrusion coated films, cast polypropylene

films, silicone coated films and PET resins. As a promoted company, the Company must

comply with certain conditions and restrictions provided for in the promotional certificates.



The Companyûs sales for the years ended 31 March 2013 and 2012 divided according to promoted and non-promoted operations are set out below.


Separate financial statements Promoted operations Non-promoted operations Total

2013 2012 2013 2012 2013 2012

Sales Domestic sales 977,049 917,290 50,323 3,329 1,027,372 920,619 Export sales 3,165,864 3,619,290 12,204 20,737 3,178,068 3,640,027 Total sales 4,142,913 4,536,580 62,527 24,066 4,205,440 4,560,646

22. Basic earnings per share Basic earnings per share is calculated by dividing profit for the year attributable to equity

holders of the Company (excluding other comprehensive income) by the weighted average number of ordinary shares in issue during the year.

The computation of basic earnings per share has details below.

(Unit: Thousand Baht) Consolidated Separate financial statements financial statements 2013 2012 2013 2012 (Restated)

Profit for the year (Thousand Baht) 373,971 1,357,608 78,356 435,142 Weighted average number of ordinary shares (Thousand shares) 800,000 800,000 800,000 800,000 Earnings per share (Baht per share) 0.47 1.70 0.10 0.54

23. Dividends

(Unit: Baht) Dividends Approved by Total dividends Dividend per share

Final dividends for 2011 Annual General Meeting of the shareholders on 28 July 2011 1,080,000,000 1.350 Interim dividends for 2012 Board of Directorsû meeting on 26 July 2011 280,000,000 0.350 Total dividends for fiscal year 2012 1,360,000,000 1.700 Final dividends for 2012 Annual General Meeting of the shareholders on 27 July 2012 136,000,000 0.170 Total dividends for fiscal year 2013 136,000,000 0.170

147

24. Segment information The Company and its subsidiariesû operations involve principally a single industry segment,

the manufacture and distribution of polyester films, metallized films, extrusion coated films,

cast polypropylene films and PET resins, and are carried on in two geographic areas in

Thailand and overseas countries, as operated by subsidiaries. The financial information of

the Company and its subsidiaries by geographical segment, for the years ended 31 March

2013 and 2012 are as follows: (Unit: Million Baht)

Elimination of

inter-segment

Thailand Overseas countries revenues Consolidation 2013 2012 2013 2012 2013 2012 2013 2012 (Restated) (Restated)

Sales to external customers 3,224.0 3,836.2 6,006.0 6,306.9 - - 9,230.0 10,143.1 Inter-segment sales 981.4 724.4 804.7 972.5 (1,786.1) (1,696.9) - - Total sales 4,205.4 4,560.6 6,810.7 7,279.4 (1,786.1) (1,696.9) 9,230.0 10,143.1 Segment operating profit 124.3 469.2 365.4 1,176.3 (27.8) (197.3) 461.9 1,448.2 Unallocated income and expenses: Finance cost (86.8) (56.2) Income tax expenses (11.6) (34.2) Non-controlling interests of the subsidiaries 10.5 (0.2) Profit for the year attributable to equity holders of the Company 374.0 1,357.6 As at 31 March 2013 and 2012 Property, plant and equipment 4,997.6 3,118.7 6,461.4 3,241.3 (11.3) - 11,447.7 6,360.0 Intangible assets - - 3.1 2.0 - - 3.1 2.0 Unallocated assets 5,005.8 5,577.0 Total assets 16,456.6 11,939.0

Transfer prices between segments are as set out in Note 6 to the financial statements.

25. Provident fund The Company and its employees have jointly established a provident fund in accordance

with the Provident Fund Act B.E. 2530. Both employees and the Company contributed to

the fund monthly at the rates of 4 - 7 percent (2012: 4 - 7 percent) of basic salary. The

fund, which is managed by a licensed fund manager, will be paid to employees in

accordance with the fund rules. During the year ended 31 March 2013, the Company

contributed Baht 4,706,804 (2012: Baht 3,663,926) to the fund.



26. Commitments and contingent liabilities 26.1 Capital commitments As at 31 March 2013, the Company and its subsidiaries had capital commitments of

approximately Baht 736.4 million (2012: Baht 2,081.8 million), relating to the construction of building and acquisition of machinery and equipment (The Company only: Baht 263.9 million, 2012: Baht 1,178.1 million).

26.2 Operating lease commitments

The Company has entered into several lease agreements in respect of the lease of

office building space and equipment.

Future minimum rentals payable under these leases are as follows: (Unit: Million Baht) As at 31 March 2013 2012

Payable: In up to 1 year 8.1 4.8 In over 1 and up to 5 years 6.1 4.8

26.3 Service agreements As at 31 March 2013, the Company had commitments totaling Baht 197.0 million

under various service agreements (2012: Baht 221.0 million). These agreements expire between April 2013 and September 2016.

26.4 Guarantees

a) As at 31 March 2013, the Company has provided short-term guarantee worth USD 30.0 million (2012: USD 20.0 million) for working capital facilities obtained by a subsidiary, Polyplex USA LLC.

b) As at 31 March 2013, the Company has provided guarantee of USD 75 million for the long-term loans obtained by its subsidiary (Polyplex USA LLC). As at 31 March 2013, the outstanding balance of this subsidiaryûs loan was USD 52.1 million.

c) As at 31 March 2013, the Company has provided guarantee of EUR 2.3 million (2012: EUR 4.5 million) for the long-term loans obtained by its subsidiary (Polyplex Europa Polyester Film Sanayi Ve Ticaret Anonim Sirketi).

d) Polyplex Europa Polyester Film Sanayi Ve Ticaret Anonim Sirketi has provided guarantee for the long-term loans obtained by Polyplex Resins Sanayi Ve Ticaret Anonim Sirketi to the extent of EUR 27.5 million. As at 31 March 2013, the outstanding balance of this loan was EUR 20.7 million, of which EUR 13.9 million was guaranteed by Polyplex Europa Polyester Film Sanayi Ve Ticaret Anonim Sirketi.

149

e) The Company has provided guarantee of Baht 15.0 million for credit facilities obtained by its subsidiary (EcoBlue Limited). As at 31 March 2013, the subsidiary has yet to utilise these credit facilities.

f) As at 31 March 2013, there were outstanding bank guarantees of approximately Baht 0.7 million and EUR 15.7 million (2012: Baht 63.8 million and EUR 25.9 million) issued by the banks on behalf of the Company and its subsidiaries in respect of certain performance bonds as required in the normal course of businesses (The Company only: Baht 0.7 million, 2012: Baht 63.8 million).

27. Financial instruments

27.1 Financial risk management The Company and its subsidiariesû financial instruments, as defined under Thai

Accounting Standard No. 107 çFinancial Instruments: Disclosure and Presentationsé, principally comprise cash and cash equivalents, trade and other receivables, investments, trade and other payables, and short-term and long-term loans. The financial risks associated with these financial instruments and how they are managed is described below.

Credit risk The Company and its subsidiaries are exposed to credit risk primarily with respect to

trade receivables and other receivables. The Company and its subsidiaries manage the risk by adopting appropriate credit control policies and procedures and considering credit insurance contracts from time to time, and therefore do not expect to incur material financial losses. In addition, the Company and its subsidiaries do not have high concentration of credit risk since they have a large customer base. The maximum exposure to credit risk is limited to the carrying amounts of receivables and other receivables as stated in the statements of financial position.

Interest rate risk The Company and its subsidiariesû exposure to interest rate risk relates primarily to

its cash at banks, bank overdrafts, and short-term and long-term borrowings. Most of the Company and its subsidiariesû financial assets and liabilities bear floating interest rates or fixed interest rates which are close to the market rate. In addition, the Company considers interest rate swap agreements from time to time so as to reduce exposure to the interest rate risk.

Significant financial assets and liabilities classified by type of interest rates are

summarised in the table below, with those financial assets and liabilities that carry fixed interest rates further classified based on the maturity date, or the repricing date if this occurs before the maturity date.



Co

nsol

idat

ed fi

nanc

ial s

tate

men

ts

As

at 3

1 M

arch

201

3 As

at 3

1 M

arch

201

2

Fi

xed

inter

est r

ates

Flo

ating

No

n-

Fixe

d int

eres

t rat

es

Float

ing

Non-

W

ithin

1-5

Over

5

inter

est

inter

est

With

in 1-

5 Ov

er 5

int

eres

t int

eres

t

1

year

ye

ars

year

s ra

te

bear

ing

Tota

l In

tere

st ra

te

1 ye

ar

year

s ye

ars

rate

be

aring

To

tal

Inte

rest

rate

(M

illion

Bah

t)

(%

p.a.

)

(M

illion

Bah

t)

(%

p.a.

) Fin

ancia

l Ass

ets

Cash

and

cas

h eq

uivale

nts

- -

- 1,2

33.3

235.0

1,4

68.3

See

Note

7

- -

- 1,3

40.5

341.3

1,6

81.8

See

Note

7

Curre

nt in

vestm

ents

- -

- -

94.0

94.0

- -

- -

- -

- -

Trade

rece

ivable

s -

- -

- 1,3

84.4

1,384

.4 -

- -

- -

1,396

.7 1,3

96.7

-

- -

- 1,2

33.3

1,713

.4 2,9

46.7

-

- -

1,340

.5 1,7

38.0

3,078

.5

Finan

cial l

iabilit

ies

Shor

t-ter

m lo

ans

from

fina

ncial

insti

tutio

ns

385.0

-

- 65

9.4

- 1,0

44.4

See

Note

14

80.0

- -

246.7

-

326.7

Se

e No

te 1

4

Trade

and

oth

er p

ayab

les

- -

- -

1,178

.4 1,1

78.4

- -

- -

- 1,0

94.0

1,094

.0 -

Acco

unts

paya

ble fr

om s

ubsid

iaryûs

acq

uisitio

n -

- -

- -

- -

- -

- -

244.1

24

4.1

-

Long

-term

loan

s fro

m re

lated

par

ty -

- -

- 43

0.7

430.7

Se

e No

te 6

-

- -

- -

- -

Long

-term

loan

s fro

m fi

nanc

ial in

stitu

tions

35

.9 70

.7 -

5,220

.3 -

5,326

.9 Se

e No

te 1

7 37

.7 11

2.2

- 1,4

64.4

- 1,6

14.3

See

Note

17

420.9

70

.7 -

5,879

.7 1,6

09.1

7,980

.4

117.7

11

2.2

- 1,7

11.1

1,338

.1 3,2

79.1

151

Se

para

te fi

nanc

ial s

tate

men

ts

As

at 3

1 M

arch

201

3 As

at 3

1 M

arch

201

2

Fi

xed

inter

est r

ates

Flo

ating

No

n-

Fixe

d int

eres

t rat

es

Float

ing

Non-

W

ithin

1-5

Over

5

inter

est

inter

est

With

in 1-

5 Ov

er 5

int

eres

t int

eres

t

1

year

ye

ars

year

s ra

te

bear

ing

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l In

tere

st ra

te

1 ye

ar

year

s ye

ars

rate

be

aring

To

tal

Inte

rest

rate

(M

illion

Bah

t)

(%

p.a.

)

(M

illion

Bah

t)

(%

p.a.

) Fin

ancia

l Ass

ets

Cash

and

cas

h eq

uivale

nts

- -

- 74

.2 1.7

75

.9 Se

e No

te 7

-

- -

27.5

2.1

29.6

See

Note

7

Curre

nt in

vestm

ents

- -

- -

78.0

78.0

- -

- -

- -

- -

Trade

rece

ivable

s -

- -

- 76

0.6

760.6

-

- -

- -

805.9

80

5.9

-

- -

- 74

.2 84

0.3

914.5

- -

- 27

.5 80

8.0

835.5

Finan

cial l

iabilit

ies

Shor

t-ter

m lo

ans

from

fina

ncial

insti

tutio

ns

385.0

-

- -

- 38

5.0

See

Note

14

80.0

- -

- -

80.0

See

Note

14

Trade

and

oth

er p

ayab

les

- -

- -

665.1

66

5.1

- -

- -

- 60

2.3

602.3

-

Long

-term

loan

s fro

m fi

nanc

ial in

stitu

tions

35

.9 70

.7 -

2,827

.2 -

2,933

.8 Se

e No

te 1

7 37

.7 11

2.2

- 1,2

78.4

- 1,4

28.3

See

Note

17

420.9

70

.7 -

2,827

.2 66

5.1

3,983

.9

117.7

11

2.2

- 1,2

78.4

602.3

2,1

10.6



As at 31 March 2013, the Company had interest rate swap agreements with a bank to

swap floating interest rate to fixed interest rate, as described in Note 17 to the financial

statements.

Foreign currency risk

The Company and its subsidiariesû exposure to foreign currency risk arise mainly from

trading transactions and borrowings that are denominated in foreign currencies. The

Company and its subsidiaries seek to reduce this risk by entering into forward exchange

contracts when it considers appropriate. Generally, the forward contracts mature within one

year.

The Companyûs balances of financial assets and liabilities denominated in foreign

currencies are summarised below.

Financial assets Financial liabilities Average exchange rate Foreign currency as at 31 March as at 31 March as at 31 March

2013 2012 2013 2012 2013 2012

(Million) (Million) (Million) (Million) (Baht per 1 foreign

currency unit)

US dollar 15.33 13.78 71.29 41.88 29.3085 30.8431

Euro 1.17 3.01 23.53 4.28 37.5712 41.1741

Japanese yen 42.09 35.93 0.20 2.42 0.3115 0.3755

Swiss franc - - - 2.70 30.8765 34.1646

The Companyûs foreign exchange contracts outstanding are summarised below. As at 31 March 2013

Bought Sold Contractual exchange rate

Foreign currency amount amount Bought Sold

(Million) (Million) (Baht per 1 foreign currency unit)


per USD 1 per USD 1

Swiss franc 0.30 - Baht 32.8089 per CHF 1 -

Euro 0.57 1.09 Baht 37.9000 - 39.5700 Baht 38.0200 - 40.8268

per EUR 1 per EUR 1


per JPY 1

153

As at 31 March 2012

Bought Sold Contractual exchange rate

Foreign currency amount amount Bought Sold

(Million) (Million) (Baht per 1 foreign currency unit)


per USD 1 per USD 1

Swiss franc 1.35 - Baht 31.6988 - 40.9692 -

per CHF 1

Euro 0.68 2.53 Baht 41.1600 - 41.6000 Baht 40.5600 - 41.7100

per EUR 1 per EUR 1


per JPY 1

A subsidiary had forward foreign exchange contracts as follows:

As at 31 March 2013



YTL 0.5 million YTL 2.3860 per EUR 1

As at 31 March 2012



EUR 1.00 million USD 1.3084 - 1.3085 per EUR 1

27.2 Fair values of financial instruments

Since the majority of the Company and its subsidiariesû financial instruments are

short-term in nature or bear floating interest rates, their fair value is not expected to

be materially different from the amounts presented in the statements of financial

position.

A fair value is the amount for which an asset can be exchanged or a liability settled

between knowledgeable, willing parties in an armûs length transaction. The fair value

is determined by reference to the market price of the financial instrument or by

using an appropriate valuation technique, depending on the nature of the instrument.



28. Capital management The primary objective of the Companyûs capital management is to ensure that it has

appropriate capital structure in order to support its business and maximise shareholder

value. As at 31 March 2013, the Groupûs debt-to-equity ratio was 1.01:1 (2012: 0.41:1) and

the Companyûs debt-to-equity ratio was 1.02:1 (2012: 0.54:1).

29. Approval of financial statements These financial statements were authorised for issue by the Companyûs authorised

directors on 20 May 2013.

155

1 M

r.Man

u Le

opair

ote

Boar

d Ch

airm

an &

70

ë

Bach

elorûs

deg

ree

Econ

omics

-

- 20

04-P

rese

nt

Boar

d Ch

airm

an &

Cha

irman

Po

lyplex

(Tha

iland

) Plc.

Audit

Com

mitt

ee

(Hon

s.), T

ham

mas

at U

niver

sity

of

the

Audit

Com

mitt

ee

Chair

man

ë M

aste

rûs d

egre

e M

.Sc.

(Eco

n.),

2003

-Pre

sent

Co

unse

lor o

f Sta

te

The

Coun

cil o

f Sta

te (T

rade

and

Un

iversi

ty of

Ken

tuck

y, US

A

Ind

ustry

)

ë Ph

.D in

Bus

iness

Adm

inistr

ation

20

05-2

010

Chair

man

Ne

ighbo

ring

Coun

tries

Eco

nom

ic

(H

onor

ary),

Tha

mm

asat

Univ

ersit

y

De

velop

men

t Age

ncy

ë Ce

rtific

ate,

Indus

trial

Deve

lopm

ent,

2010

-Pre

sent

Ch

airm

an

ARIP

Pub

lic C

ompa

ny L

imite

d

Na

goya

, Jap

an

2004

-Pre

sent

Ch

airm

an

Khon

Kae

n Su

gar I

ndus

try P

ublic

ë Th

e Na

tiona

l Defe

nse

Colle

ge,

Com

pany

Lim

ited

Cl

ass

34

2006

-Pre

sent

Ch

airma

n of

Audit

Com

mitte

e Si

am S

teel

Inter

natio

nal P

ublic

ë Ce

rtific

ate,

Thai

Instit

ute

of

Com

pany

Lim

ited

Di

rect

ors

(IOD)

20

04-P

rese

nt

Indep

ende

nt D

irect

or/

Thai

Beve

rage

Pub

lic C

o. Lt

d

ë Th

e Ro

le of

Cha

irman

Pro

gram

Audit

Com

mitt

ee M

embe

r (S

ingap

ore

Stoc

k m

arke

t)

(R

CM),

Clas

s 3/

2001

20

11-P

rese

nt

Chair

man

T.M

.C In

dustr

ial P

ublic

Co.L

td

ë Di

rect

ors

Certi

ficat

ion P

rogr

am

(D

CP),

Clas

s 30

/200

3

Info

rmat

ion

of D

irect

or a

nd M

anag

emen

t of t

he C

ompa

ny

Na

me-

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ame

Posit

ion

Age

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latio

n am

ong

% o

f W

orkin

g Ex

perie

nces

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prec

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rs

(Y

ears

) Ed

ucat

ion/

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ily w

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ion

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pany

/ Ty

pe o

f Bus

iness

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pany



2 M

r.San

jiv S

araf

Dire

ctor

& V

ice

55

ë Ba

chelo

rûs d

egre

e -

- M

ay 2

011-

Pres

ent

Gene

ral M

anag

er &

CEO

Po

lyplex

(Asia

) Pte

. Ltd

.

Chair

man

Ag

ricult

ural

Engin

eerin

g,

20

04-P

rese

nt

Dire

ctor

& C

hairm

an

Polyp

lex E

urop

a Po

lyeste

r Film

Ind

ian In

stitu

te o

f Tec

hnolo

gy,

Sana

yi Ve

Tica

ret A

nonim

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eti,

Kh

arag

pur

Turk

ey

2002

-July

201

0 M

anag

ing D

irect

or

Polyp

lex (T

haila

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lc.

July

2010

-Pre

sent

Vice

- Ch

airm

an

Polyp

lex (T

haila

nd) P

lc.

May

200

2-Pr

esen

t Ch

airm

an

Polyp

lex C

orpo

ratio

n Lt

d.

2011

-Pre

sent

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rect

or

Polyp

lex A

mer

ica H

olding

Inc.

3 M

r.Pra

nay

Koth

ari

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ctor

54

ë

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w Ch

arte

red

Acco

unta

nt

- -

2004

-Dec

201

1 Di

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or

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ingap

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Pte

. Ltd

.

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of C

harte

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20

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ctor

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Eur

opa

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ilm

A

ccou

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ts of

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nayi

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icare

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nim S

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i,

ë Qu

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mpa

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he In

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f Com

pany

20

02-P

rese

nt

Dire

ctor

Po

lyplex

(Tha

iland

) Plc.

S

ecre

tarie

s of

India

19

96-P

rese

nt

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utive

Dire

ctor

Po

lyplex

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pora

tion

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2011

-Pre

sent

Di

rect

or

Polyp

lex R

esins

San

ayi V

e Tic

aret

Anon

im S

irket

i 4

Mr.

Man

ish G

upta

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rect

or

44

ë M

aste

rûs d

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BA,

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ch 2

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ia of

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anag

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sent

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ngalo

re

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mbe

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rect

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Polyp

lex (T

haila

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lc.

-Pre

sent

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me-

Surn

ame

Posit

ion

Age

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latio

n am

ong

% o

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ears

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pany

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pe o

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iness

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pany

157

5 Dr

.Vira

bong

sa R

aman

gkur

a Di

rect

or &

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it 70

ë

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elorûs

deg

ree

-

- 20

04-P

rese

nt

Dire

ctor

& A

udit

Com

mitt

ee

Polyp

lex (T

haila

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lc.

Com

mitt

ee m

embe

r

Fir

st Cl

ass

Hono

rs, B

.A.

m

embe

r

in

Politi

cal S

cienc

e,

Nov

2011

-Pre

sent

Cha

irman

St

rate

gic F

orm

ulatio

n Co

mm

ittee

for

Ch

ulalon

gkor

n Un

iversi

ty

Re

cons

truct

ion a

nd F

utur

e

ë M

aste

rûs D

egre

e Ec

onom

ics,

Deve

lopm

ent (

SCRF

)

Un

iversi

ty of

Pen

nsylv

ania,

U.S

.A.

1994

-Pre

sent

Ch

airm

an

Bang

kok

Expr

essw

ay P

ublic

Co.,

Ltd

.

ë Ph

.D.(E

cono

nmics

),

19

95-P

rese

nt

Chair

man

of t

he

Doub

le A

(199

1) P

ublic

Co.,

Ltd

.

Un

iversi

ty of

Pen

nsylv

ania,

U.S

.A.

Ex

ecut

ive B

oard

ë Do

ctor

of L

aw (H

onor

ary),

20

04-P

rese

nt

Chair

man

Th

ai-La

o As

socia

tion

for F

riend

ship

W

ebste

r Univ

ersit

y, US

A

20

05-P

rese

nt

Chair

man

Fin

ansa

Co.,

Ltd

.

ë De

cora

tion

2006

-Pre

sent

Ch

airm

an

Sout

h Ea

st As

ia En

ergy

Co.,

Ltd

.

- K

night

Gra

nd C

ordo

n (S

pecia

l

20

05-P

rese

nt

Chair

man

Ba

ng-M

od H

ospit

al Co

., Ltd

.

C

lass)

of th

e m

ost E

xalte

d

2000

-Pre

sent

Ch

airm

an

Nam

Ngum

2 P

ower

Comp

any

Limite

d

O

rder

of t

he W

hite

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ant

Pres

ent

Dire

ctor

Th

ailan

d De

velop

men

t Res

earc

h

- K

night

Gra

nd C

ordo

n (S

pecia

l

Ins

titut

e Fo

unda

tion

C

lass)

of th

e m

ost N

oble

Orde

r

20

08-P

rese

nt

Chair

man

of t

he A

dviso

ry

King

Pow

er In

tern

ation

al Co

., Ltd

.

o

f the

Cro

wn o

f Tha

iland

Boar

d

2004

-Pre

sent

Ad

visor

y Ch

airm

an

Aree

ya P

rope

rty P

ublic

Co.,

Ltd

.

Na

me-

Surn

ame

Posit

ion

Age

Re

latio

n am

ong

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prec

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rs

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riod

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ion

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pany

/ Ty

pe o

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iness

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pany



6 Mr

.Prap

had

Phod

hivor

akhu

n Di

rect

or

67

ë HN

D in

Busin

ess

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inistr

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-

- 20

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rese

nt

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ctor

Po

lyplex

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iland

) Plc.

fro

m S

heffie

ld Co

llege

of

Octo

ber 1

999

Chair

man

of B

oard

of

Kang

Yon

g Ele

ctric

Pcl.

Te

chno

logy,

Shef

field,

Eng

land.

-Pre

sent

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rect

ors

ë M

aste

r Deg

ree

Nove

mbe

r 199

5 Ch

airm

an o

f Boa

rd o

f M

itsub

ishi E

lectri

c Ka

ng Y

ong

Bu

sines

s Ad

mini

strat

ion (M

BA),

-P

rese

nt

Dire

ctor

s W

atta

na C

o., L

td.

Pu

blic

Adm

inistr

ation

(MPA

)

M

ay 2

005-

Pres

ent

Chair

man

of B

oard

of

Siam

City

Lea

sing

and

Fact

oring

Pcl.

Ra

mkh

amha

eng

Unive

rsity

Di

rect

ors

ë Ho

nour

ary

Doct

orat

e De

gree

in

July

1996

-Pre

sent

Cha

irman

of B

oard

of

Yoko

ham

a Ru

bber

s (T

haila

nd)

Bu

sines

s Ad

mini

strat

ion

dir

ecto

rs Co

., Ltd

.

Ra

jabha

t Univ

ersit

y of

Lam

pang

Ju

ly 19

94-P

rese

nt D

irect

or

Kulth

orn

Kirb

y Pu

blic

Com

pany

Limite

d 7

Mr.S

hiraz

Era

ch P

oone

vala

Dire

ctor

& A

udit

49

ë

Bach

elor o

f Com

mer

ce

- -

2004

-Pre

sent

Di

rect

or &

Aud

it Co

mitt

ee

Polyp

lex (T

haila

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cl.

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mitt

ee M

embe

r

Sy

denh

am C

olleg

e of

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mer

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m

embe

r

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ia

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arch

200

8 Di

rect

or -

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tmen

t G.

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roup

of C

ompa

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aste

r of C

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-P

rese

nt

Sy

denh

am C

olleg

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ia

ë As

socia

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am

June

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CP) C

lass

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Content

Message from the Chairman 4Board of Directors 6The Board of Director’s Report on its Responsibility to Financial Statements 7

Audit Committee Report 2012-13 8Key Financial Indicators 10Financial Highlights 11

General Information 12Business Overview 15Risk Factors 45Future Projects 57Legal Dispute 61Shareholding Structure & Management 62Good Corporate Governance & Internal Control 76

Financial Position and Operational Performance 86Audited Financial Statements 110Information of Director and Management of the Company 155

ptl: polyplex (thailand) public company limited | annual

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