Indorama Ventures Public Company Limited and its Subsidiaries

Transcription

1 Indorama Ventures Public Company Limited and its Subsidiaries Interim financial statements for the three-month and six-month periods ended 2017 and Independent auditor s report on review of interim financial information

2 Independent Auditor s Report on Review of Interim Financial Information To the Board of Directors of Indorama Ventures Public Company Limited I have reviewed the accompanying consolidated and separate statements of financial position of Indorama Ventures Public Company Limited and its subsidiaries, and of Indorama Ventures Public Company Limited, respectively, as at 2017; the consolidated and separate statements of income and comprehensive income for the three-month and six-month periods ended 2017; the consolidated and separate statements of changes in equity and cash flows for the six-month period ended 2017; and condensed notes ( interim financial information ). Management is responsible for the preparation and presentation of this interim financial information in accordance with Thai Accounting Standard 34, Interim Financial Reporting. My responsibility is to express a conclusion on this interim financial information based on my review. Scope of Review I conducted my review in accordance with Thai Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Thai Standards on Auditing and consequently does not enable me to obtain assurance that I would become aware of all significant matters that might be identified in an audit. Accordingly, I do not express an audit opinion. Conclusion Based on my review, nothing has come to my attention that causes me to believe that the accompanying interim financial information is not prepared, in all material respects, in accordance with Thai Accounting Standard 34, Interim Financial Reporting.

3 Emphasis of Matter I draw attention to Note 3 to the interim financial information, during the three-month and six-month periods ended 2017, the Group completed the acquisitions of Glanzstoff Group resulting in the recognition of goodwill amounting to Baht million in the consolidated statement of financial position as of The fair value of identifiable net assets and the allocation of purchase price have been provisionally determined and are subject to potential amendment. My conclusion is not modified in respect of this matter. (Sakda Kaothanthong) Certified Public Accountant Registration No KPMG Phoomchai Audit Ltd. Bangkok 9 August

4 Statement of financial position Consolidated financial Separate financial statements statements Assets Note (Unaudited) (Unaudited) Current assets Cash and cash equivalents 5,070,244 4,025, ,195 1,068,060 Current investments 186, , Trade accounts receivable 4, 5 33,351,722,085, Short-term loans to related parties 4 3, ,186 25,411,064 16,125,482 Inventories 41,088,139 40,458, Other current assets 4, 6 9,005,450 8,376, , ,8 Total current assets 89,032,480 84,495,249 26,640,993 17,416,860 Non-current assets Investments in subsidiaries and other equity security ,0,351 57,798,256 Investments in joint ventures 8 6,379,5 5,529,8 - - Other long-term investments 85,281 89,963 70,000 70,000 Long-term loans to related parties 4 82, ,040 29,403,996,585,235 Property, plant and equipment 9 142,627, ,860, Goodwill 10,149,680 9,654, Other intangible assets 18,451,662 17,602, Deferred tax assests 2,6,104 2,233, Other non-current assets 1,662,786 1,787, , ,760 Total non-current assets 181,744, ,885,2 87,974,4 89,070,251 Total assets 270,777, ,380, ,615, ,487,111 The accompanying notes are an integral part of these interim financial statements. 3

5 Statement of financial position Consolidated financial Separate financial statements statements Liabilities and shareholders' equity Note (Unaudited) (Unaudited) Current liabilities Bank overdrafts and short-term borrowings from financial institutions 10 11,203,944 9,205, Trade accounts payable 4, 12 39,561,460 37,6, Current portion of long-term borrowings from financial institutions 10 4,3,613 4,403, ,075 Current portion of debentures ,612 5,499,8 549,612 5,499,8 Current portion of finance lease liabilities 40,786 7, Current income tax payable 1,648,613 1,189,903 3,6 - Other current liabilities 4, 13 9,240,737 8,239, , ,159 Total current liabilities 66,558,765 65,861, ,710 6,335,542 Non-current liabilities Long-term borrowings from financial institutions 10 51,843,022 51,167,944 17,2,355 11,953,140 Debentures 11 38,471,870,789,798 33,796,449 26,860,823 Finance lease liabilities 266,254 12, Deferred tax liabilities 15,561,835 14,796,013 98,665 68,165 Non-current provisions for employee benefit 2,158,476 2,027, Other non-current liabilities 1,120, ,038 12,877,427 Total non-current liabilities 109,421, ,704,036 51,139,346 38,913,555 Total liabilities 175,980, ,565,547 52,033,056 45,249,097 The accompanying notes are an integral part of these interim financial statements. 4

6 Statement of financial position Consolidated financial Separate financial statements statements Liabilities and shareholders' equity Note (Unaudited) (Unaudited) Shareholders' equity Share capital: Authorized share capital 5,666,010 5,666,010 5,666,010 5,666,010 Issued and paid share capital 14 4,814,328 4,814,272 4,814,328 4,814,272 Share premium: Share premium on ordinary shares 14 29,777,096 29,775,147 29,777,096 29,775,147 Gains (loss) on cash flow hedges 109,388 (52,368) 394, ,271 Currency translation differences (478,639) 1,491, Excess of cost over book value of acquired subsidiaries (2,862,257) (3,290,829) - - Differences arising from common control transactions (1,235,562) (1,235,562) - - Retained earnings Appropriated Legal reserve 2,918,204 2,327, , ,601 Unappropriated 44,870,989 40,352,360 12,155,486 10,926,651 Equity attributable to owners of the parent 77,913,547 74,181,3 47,708,169 46,363,942 Subordinated perpetual debentures 14,874,072 14,874,072 14,874,072 14,874,072 Equity attributable to equity holders of the Company 92,787,619 89,055,375 62,582,241 61,238,014 Non-controlling interests 2,008,873 2,759, Total shareholders' equity 94,796,492 91,814,932 62,582,241 61,238,014 Total liabilities and shareholders' equity 270,777, ,380, ,615, ,487, The accompanying notes are an integral part of these interim financial statements. 5

7 Statement of income (Unaudited) Consolidated financial Separate financial statements statements Three-month period ended Three-month period ended Note Revenues Revenues from sales 4 71,660,810 66,7, Interest income 4 9,553 9, ,1 700,956 Dividend income 4, ,250,057 1,806,012 Net foreign exchange gain ,470 - Gains on bargain purchases - 3,550, Other income 4 229, , , ,215 Total revenues 71,899,587 70,424,657 3,236,858 2,636,183 Expenses Costs of sales of goods 4 61,537,954 55,491, Distribution costs 4 4,018,482 3,939, Administrative expenses 4 1,806,043 2,020,847 26,013 37,195 Management benefit expenses 4 38,576 37,898 5,505 3,0 Impairment loss 9 15, , Net foreign exchange loss 37,201 54,467-18,051 Finance costs 990,762 1,086, , ,179 Total expenses 68,444,647 63,144, , ,455 Share of losses of joint ventures, net 8 (120,089) (44,401) - - Profit before income tax expense 3,334,851 7,235,829 2,661,442 2,111,728 Tax expense 329,410 1,229,251 29,941 8,967 Profit for the period 3,005,441 6,006,578 2,6,501 2,102,761 Profit attributable to: Owners of the parent 2,937,079 5,949,542 2,6,501 2,102,761 Non-controlling interests 68,362 57, Profit for the period 3,005,441 6,006,578 2,6,501 2,102, #REF! #REF! Earnings per share Basic and diluted earnings per share (in Baht) The accompanying notes are an integral part of these interim financial statements. 6

8 Statement of comprehensive income (Unaudited) Consolidated financial Separate financial statements statements Three-month period ended Three-month period ended Profit for the period 3,005,441 6,006,578 2,6,501 2,102,761 Other comprehensive income Components of other comprehensive income that will be reclassified to profit or loss Exchange differences on translating financial statement 932,717 (1,589,544) - - Net gain (loss) on hedge of net investment in foreign operations (180,914) 108,270 (180,914) 108,270 Net loss on cash flow hedges (111,876) (85,988) - - Income tax relating to components of other comprehensive income that will be reclassified to profit or loss 19,956 (5,003) 36,183 (21,654) Total components of other comprehensive income that will be reclassified to profit or loss 659,883 (1,572,265) (144,7) 86,616 Component of other comprehensive income that will not be reclassified to profit or loss Gain on remeasurements of defined benefit plans Total component of other comprehensive income that will not be reclassified to profit or loss Other comprehensive income (expense) for the period, net of tax 659,883 (1,572,263) (144,7) 86,616 Total comprehensive income for the period 3,665,324 4,434,5 2,486,770 2,189,377 Total comprehensive income attributable to: Owners of the parent 3,548,509 4,443,334 2,486,770 2,189,377 Non-controlling interests 116,815 (9,019) - - Total comprehensive income for the period 3,665,324 4,434,5 2,486,770 2,189,377 The accompanying notes are an integral part of these interim financial statements. 7

9 Indorama Ventures Public Company Limited and its Subsidiaries Statement of income (Unaudited) Consolidated financial Separate financial statements statements Six-month period ended Six-month period ended Note Revenues Revenues from sales 4 143,1, ,894, Interest income 4 29,296 63,008 1,366,180 1,459,204 Dividend income 4, ,914,056 2,106,012 Net foreign exchange gain ,118 - Gains on bargain purchases - 6,840, Other income 4 401, , , ,242 Total revenues 143,741,743 1,209,749 4,605,020 3,785,458 Expenses Costs of sales of goods 4 121,439, ,101, Distribution costs 4 7,909,488 7,239, Administrative expenses 4 3,637,233 3,498,647 45,020 50,671 Management benefit expenses 4 61,942 66,903 7,985 5,460 Impairment loss 9 15, , Net foreign exchange loss 25,660 78,7-39,697 Finance costs 1,995,966 2,086,627 1,057, ,898 Total expenses 135,085, ,585,382 1,110,293 1,023,726 Share of profit (losses) of joint ventures, net 8 26,393 (70,290) - - Profit before income tax expense 8,682,368 11,554,077 3,494,727 2,761,732 Tax expense 1,179,669 1,376,605 12,056 26,612 Profit for the period 7,502,699 10,177,472 3,482,671 2,735,120 Profit attributable to: Owners of the parent 7,363,548 10,054,000 3,482,671 2,735,120 Non-controlling interests 139, , Profit for the period 7,502,699 10,177,472 3,482,671 2,735,120 Earnings per share Basic and diluted earnings per share (in Baht) The accompanying notes are an integral part of these interim financial statements. 8

10 Statement of comprehensive income (Unaudited) Consolidated financial Separate financial statements statements Six-month period ended Six-month period ended Profit for the period 7,502,699 10,177,472 3,482,671 2,735,120 Other comprehensive income Components of other comprehensive income that will be reclassified to profit or loss Exchange differences on translating financial statement (2,205,756) (2,526,706) - - Net gain on hedge of net investment in foreign operations 141, , , ,881 Net gain on cash flow hedges 236,827 5, Income tax relating to components of other comprehensive income that will be reclassified to profit or loss (103,103) (76,503) (28,347) (,976) Total components of other comprehensive income that will be reclassified to profit or loss (1,9,298) (2,138,8) 113, ,905 Component of other comprehensive income that will not be reclassified to profit or loss Gain on remeasurements of defined benefit plans Total component of other comprehensive income that will not be reclassified to profit or loss Other comprehensive income (expense) for the period, net of tax (1,9,298) (2,138,224) 113, ,905 Total comprehensive income for the period 5,572,401 8,039,248 3,596,058 2,863,025 Total comprehensive income attributable to: Owners of the parent 5,555,503 8,026,185 3,596,058 2,863,025 Non-controlling interests 16,898 13, Total comprehensive income for the period 5,572,401 8,039,248 3,596,058 2,863, The accompanying notes are an integral part of these interim financial statements. 9

11 Statement of changes in equity (Unaudited) Consolidated financial statements Retained earnings Other components of shareholders' equity Excess of cost Difference Equity Equity Issued and Currency Gain (loss) over book value arising from attributable to Subordinated attributable to Non- Total paid translation on cash flow of acquired common control owners of perpetual equity holders of controlling shareholders' Note share capital Share premium Legal reserve Unappropriated difference hedges subsidiaries transactions the parent debentures the Company interests equity Six-month period ended 2016 Balance at 1 January ,814,272 29,775,147 1,989,919 28,1,295 4,658,692 (61,763) (3,290,829) (1,235,562) 64,951,171 14,874,072 79,825,243 3,127,719 82,952,962 Transaction with owners, recorded directly in equity Distribution to owners of the parent Dividends (1,155,425) (1,155,425) - (1,155,425) (80,798) (1,236,223) Total distribution to owners of the parent (1,155,425) (1,155,425) - (1,155,425) (80,798) (1,236,223) Total transaction with owners, recorded directly in equity (1,155,425) (1,155,425) - (1,155,425) (80,798) (1,236,223) Comprehensive income for the period Profit ,054, ,054,000-10,054, ,472 10,177,472 Other comprehensive income (2,287,236) 259, (2,027,815) - (2,027,815) (110,409) (2,138,224) Total comprehensive income for the period ,054,084 (2,287,236) 259, ,026,185-8,026,185 13,063 8,039,248 Coupon payment on subordinated perpetual debentures (523,562) (523,562) - (523,562) - (523,562) Transfer legal reserve ,232 (193,232) Balance at ,814,272 29,775,147 2,183,151 36,483,160 2,371, ,574 (3,290,829) (1,235,562) 71,298,369 14,874,072 86,172,441 3,059,984 89,232,425 The accompanying notes are an integral part of these interim financial statements. 10

12 Statement of changes in equity (Unaudited) Consolidated financial statements Retained earnings Other components of shareholders' equity Excess of cost Difference Equity Equity Issued and Currency Gain (loss) over book value arising from attributable to Subordinated attributable to Non- Total paid translation on cash flow of acquired common control owners of perpetual equity holders of controlling shareholders' Note share capital Share premium Legal reserve Unappropriated difference hedges subsidiaries transactions the parent debentures the Company interests equity Six-month period ended 2017 Balance at 1 January ,814,272 29,775,147 2,327,121 40,352,360 1,491,162 (52,368) (3,290,829) (1,235,562) 74,181,3 14,874,072 89,055,375 2,759,557 91,814,932 Transactions with owners, recorded directly in equity Contribution by and distribution to owners of the parent Issue of ordinary shares due to warrant exercised , ,005-2,005-2,005 Dividends (1,733,151) (1,733,151) - (1,733,151) (63,005) (1,796,156) Total contribution by and distribution to owners of the parent 56 1,949 - (1,733,151) (1,7,146) - (1,7,146) (63,005) (1,794,151) Changes in ownership interests in subsidiaries Acquisition of non-controlling interests without a change in control , , ,572 (704,577) (276,005) Total changes in ownership interests in subsidiaries , , ,572 (704,577) (276,005) Total transactions with owners, recorded directly in equity 56 1,949 - (1,733,151) ,572 - (1,2,574) - (1,2,574) (767,582) (2,070,156) Comprehensive income for the period Profit ,363, ,363,548-7,363, ,151 7,502,699 Other comprehensive income (1,969,801) 161, (1,808,045) - (1,808,045) (122,253) (1,9,298) Total comprehensive income for the period ,363,548 (1,969,801) 161, ,555,503-5,555,503 16,898 5,572,401 Coupon payment on subordinated perpetual debentures (520,685) (520,685) - (520,685) - (520,685) Transfer legal reserve ,083 (591,083) Balance at ,814,328 29,777,096 2,918,204 44,870,989 (478,639) 109,388 (2,862,257) (1,235,562) 77,913,547 14,874,072 92,787,619 2,008,873 94,796,492 The accompanying notes are an integral part of these interim financial statements. 11

13 Statement of changes in equity (Unaudited) Separate financial statements Other component of shareholders' Retained earnings equity Equity Issued and Gain on attributable to Subordinated Total paid Share cash flow owners of perpetual shareholders' Note share capital premium Legal reserve Unappropriated hedges the parent debentures equity Six-month period ended 2016 Balance at 1 January ,814,272 29,775, ,601 9,492,8 40,028 44,688,366 14,874,072 59,562,438 Transaction with owners, recorded directly in equity Distribution to owners of the Company Dividends (1,155,425) - (1,155,425) - (1,155,425) Total distribution to owners of the Company (1,155,425) - (1,155,425) - (1,155,425) Total transaction with owners, recorded directly in equity (1,155,425) - (1,155,425) - (1,155,425) Comprehensive income for the period Profit ,735,120-2,735,120-2,735,120 Other comprehensive income , , ,905 Total comprehensive income for the period ,735, ,905 2,863,025-2,863,025 Coupon payment on subordinated perpetual debentures (523,562) - (523,562) - (523,562) Balance at ,814,272 29,775, ,601 10,548, ,933 45,872,404 14,874,072 60,746,476 The accompanying notes are an integral part of these interim financial statements. 12

14 Statement of changes in equity (Unaudited) Separate financial statements Other component of shareholders' Retained earnings equity Equity Issued and Gain on attributable to Subordinated Total paid Share cash flow owners of perpetual shareholders' Note share capital premium Legal reserve Unappropriated hedges the parent debentures equity Six-month period ended 2017 Balance at 1 January ,814,272 29,775, ,601 10,926, ,271 46,363,942 14,874,072 61,238,014 Transactions with owners, recorded directly in equity Contribution by and distribution to owners of the Company Issue of ordinary shares due to warrant exercised , ,005-2,005 Dividends (1,733,151) - (1,733,151) (1,733,151) Total contribution by and distribution to owners of the Company 56 1,949 - (1,733,151) - (1,7,146) - (1,7,146) Total transactions with owners, recorded directly in equity 56 1,949 - (1,733,151) - (1,7,146) - (1,7,146) Comprehensive income for the period Profit ,482,671-3,482,671-3,482,671 Other comprehensive income , , ,387 Total comprehensive income for the period ,482, ,387 3,596,058-3,596,058 Coupon payment on subordinated perpetual debentures (520,685) - (520,685) - (520,685) Balance at ,814,328 29,777, ,601 12,155, ,658 47,708,169 14,874,072 62,582,241 4,814,328 29,777, ,601 12,155, ,658 47,708,169 14,874,072 62,582,241 The accompanying notes are an integral part of these interim financial statements. 13

15 Statement of cash flows (Unaudited) Consolidated financial Separate financial statements statements Six-month period ended Six-month period ended Note Cash flows from operating activities Profit for the period 7,502,699 10,177,472 3,482,671 2,735,120 Adjustments to reconcile profit to cash receipts (payments) Depreciation 4,919,638 4,524, Amortisation of intangible assets and other assets 765, , Interest income (29,296) (63,008) (1,366,180) (1,459,204) Dividend income (2,914,056) (2,106,012) Gain on bargain purchases - (6,840,322) - - Share of (profit) losses of joint ventures, net of tax 8 (26,393) 70, Finance costs 1,995,966 2,086,627 1,057, ,898 Unrealised foreign exchange (gain) loss 1,097,701 (21,591) 56,932 27,974 Provision for bad and doubtful debts expense, net 5 9,014 13, Reversal of inventories devaluation (5,618) (107,101) - - Provision for impairment on property, plant and equipment 9 15, , Provision for impairment on intangible assets - 106, Employee benefits expense 132, , Reversal of decommissioning liabilities 9 - (221,232) - - Losses on disposal of property, plant and equipment, net 42 12, Tax expense 1,179,669 1,376,605 12,056 26,612 17,557,243 12,349, , ,388 Changes in operating assets and liabilities Trade accounts receivable (1,113,502) (3,493,368) - - Inventories 545, , Other current assets (1,550,748) (841,441) 122, ,226 Other non-current assets 781, , Trade accounts payable 1,076, , Other current liabilities (471,598) 607,463 (29,6) (36,987) Other non-current liabilities 90,427 (5,120) - - Non-current provisions for employee benefit (139,670) (100,212) - - Net cash generated from operating 16,775,368 9,242, , ,627 Taxes paid (810,693) (568,089) - - Net cash from operating activities 15,964,675 8,674, , ,627 The accompanying notes are an integral part of these interim financial statements. 14

16 Statement of cash flows (Unaudited) Consolidated financial Separate financial statements statements Six-month period ended Six-month period ended Note Cash flows from investing activities Interest received 45,747 73,005 1,337,454 1,042,612 Dividend received ,914,056 2,106,012 Acquisition of property, plant and equipment (9,894,239) (6,0,146) - - Proceeds from sale of property, plant and equipment 5,723 13, Proceeds from sale (purchase) of other investments, net (71,861) 379, Acquisition of intangible assets (36,085) (28,546) - - Proceeds from sale of intangible assets Net cash outflow on acquisition of businesses 3 (ii) (6,017,389) (22,374,828) - - Net cash outflow on additional investment in subsidiary and joint ventures 7, 8 (553,486) - (512,095) (7,581,870) Advance payment on additional investment in subsidiaries and a joint venture (225,647) (248,535) - (117,464) Net cash from (used in) investing activities (16,747,132) (28,216,008) 3,739,415 (4,550,710) Cash flows from financing activities Interest paid (2,234,990) (2,121,275) (1,051,008) (921,411) Deferred financing cost paid (22,637) (94,169) (3,424) (21,147) Dividends paid to owners of the Company 17 (1,732,569) (1,155,164) (1,732,569) (1,155,164) Dividends paid to non-controlling interests (63,005) (80,798) - - Proceeds from short and long-term borrowings 15,133,002 26,247,440 9,6,099 1,210,000 Repayment of short and long-term borrowings (10,886,669) (2,026,406) (4,228,587) (124,051) Proceeds from debenture, net of debenture issuance costs of Baht 19,099, ,480,900-7,480,900 - Repayment of debenture (5,500,000) - (5,500,000) - Payment by a lessee for reduction of the outstanding liability relating to a finance lease (7,897) (4,438) - - Proceeds from issue of ordinary shares due to warrants exercised 14 2,005-2,005 - Coupon payment on subordinated perpetual debentures (520,685) (523,562) (520,685) (523,562) Loans to subsidiaries - - (8,548,844) 5,901,733 Loans to a joint venture 1,633 (174,708) - - Net cash from (used in) financing activities 1,778,088 20,066,920 (4,472,113) 4,366,398 Net increase (decrease) in cash and cash equivalents, before effect of exchange rates 995,6 525,162 (0,865) 50,5 Effect of exchange rate changes on cash and cash equivalents 48,965 23, Net increase (decrease) in cash and cash equivalents 1,044, ,371 (0,865) 50,5 Cash and cash equivalents at beginning of period 4,025,648 3,232,476 1,068,060 7,424 Cash and cash equivalents at ending of period 5,070,244 3,780, ,195 57,739 The accompanying notes are an integral part of these interim financial statements. 15

17 For the three-month and six-month periods ended 2017 (Unaudited) Note Contents 1 General information 2 Basis of preparation of the interim financial statements 3 Acquisitions of businesses 4 Related parties 5 Trade accounts receivable 6 Other current assets 7 Investments in subsidiaries and other equity security 8 Investments in joint ventures 9 Property, plant and equipment 10 Bank overdrafts, short-term and long-term borrowings from financial institutions 11 Debentures 12 Trade accounts payable 13 Other current liabilities 14 Share capital and warrants 15 Segments information 16 Earnings per share 17 Dividends 18 Financial instruments 19 Commitments with non-related parties 20 Events after the reporting period 16

18 For the three-month and six-month periods ended 2017 (Unaudited) These notes form an integral part of the interim financial statements. The interim financial statements issued for Thai regulatory reporting purposes are prepared in the Thai language. These English language financial statements have been prepared from the Thai language statutory financial statements, and were approved and authorised for issue by the Audit Committee on 9 August General information Indorama Ventures Public Company Limited, the Company, is incorporated in Thailand and has its registered office at 75/102, Ocean Tower II, 37 th Floor, Sukhumvit 19, Asoke Road, Klongtoeynua, Wattana, Bangkok, Thailand. The Company was listed on the Stock Exchange of Thailand in February The immediate and ultimate parent companies during the financial year were Indorama Resources Limited, incorporated in Thailand, and Canopus International Limited, incorporated in Mauritius, respectively. The principal activities of the Company and its subsidiaries ( Group ) are the manufacture and distribution of polyethylene terephthalate ( PET ), purified terephthalic acid ( PTA ), paraxylene ( PX ), isophthalic acid ( IPA ), ethylene oxide and ethylene glycol ( EO&EG ), polyester fibers, and wool products. Details of the Company s subsidiaries and joint ventures as at 2017 and 2016 are given in notes 4, 7 and 8. 2 Basis of preparation of the interim financial statements (a) Statement of compliance The interim financial statements are prepared on a condensed basis in accordance with Thai Accounting Standard (TAS) No. 34 (revised 2016) Interim Financial Reporting; guidelines promulgated by the Federation of Accounting Professions (FAP); and applicable rules and regulations of the Thai Securities and Exchange Commission. The interim financial statements are prepared to provide an update on the financial statements for the year ended They do not include all of the financial information required for full annual financial statements but focus on new activities, events and circumstances to avoid repetition of information previously reported. Accordingly, these interim financial statements should be read in conjunction with the financial statements of the Company and its subsidiaries for the year ended The accounting policies and methods of computation applied in these interim financial statements are consistent with those applied in the financial statements for the year ended 2016 except that the Group/Company has adopted all the new and revised TFRS that are effective for annual periods beginning on or after 1 January The adoption of these new and revised TFRS did not have any material effect on the accounting policies, methods of computation, financial performance or position of the Group or the Company. 17

19 For the three-month and six-month periods ended 2017 (Unaudited) (b) Functional and presentation currency The interim financial statements are presented in Thai Baht, which is the Company s functional currency. All financial information presented in Thai Baht has been rounded to the nearest million/thousand unless otherwise stated. (c) Use of judgements and estimates The preparation of interim financial statements in conformity with TFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. In preparing these interim financial statements, the significant judgements made by management in applying the Group s/company s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the financial statements for the year ended Measurement of fair values The Group/Company has an established control framework with respect to the measurement of fair values. This includes a valuation team that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly to the senior management. The valuation team regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the valuation team assesses the evidence obtained from the third parties to support the conclusion that these valuations meet the requirements of TFRS, including the level in the fair value hierarchy in which the valuations should be classified. Significant valuation issues are reported to the Group/Company Audit Committee. When measuring the fair value of an asset or a liability, the Group/Company uses market observable data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows: Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). If the inputs used to measure the fair value of an asset or liability might be categorised in different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. The Group/Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred. Further information about the assumptions made in measuring fair values is included in note 18 - Financial instruments. 18

20 For the three-month and six-month periods ended 2017 (Unaudited) 3 Acquisitions of businesses (i) Dhunseri Petglobal Limited, India On 12 September 2016, IVL, through its subsidiary, Indorama Ventures Global Services Limited, completed the acquisition of 50% equity interest in Dhunseri Petglobal Limited which has PET manufacturing facility in India from previous shareholders, Dhunseri Petrochem Limited, as per the joint venture agreement dated 29 February 2016 for a cash consideration of INR 4,191.9 million (Baht 2,198.9 million). The transaction is accounted for as investment in joint venture. Subsequent to completion of the acquisition, Dhunseri Petglobal Limited was renamed to IVL Dhunseri Petrochem Industries Private Limited. Management believes that the joint venture partnership is expected to gain synergy benefits as the sole producer of PET resin in North and East India. Identifiable assets acquired and liabilities assumed Carrying Fair value Recognised amounts adjustments values Cash and cash equivalents 792, ,084 Inventories 1,518,147-1,518,147 Accounts receivable 1,706,492-1,706,492 Property, plant and equipment 4,701, ,967 5,259,767 Intangible assets , ,279 Accounts payable (792,574) - (792,574) Short-term loan (4,936,070) - (4,936,070) Long-term loan (2,457,372) - (2,457,372) Deferred tax (28,588) (401,867) (4,455) Other assets/(liabilities), net 1,336,7-1,336,7 Net identifiable assets acquired and liabilities assumed 1,841, ,598 2,600,605 Interest acquired (%) 50 Fair value of identifiable assets acquired and liabilities assumed 1,0,3 Goodwill 898,553 Total consideration - paid 2,198,856 The determination of fair value of assets acquired and liabilities assumed and purchase price allocation were completed during the six-months period ended

21 For the three-month and six-month periods ended 2017 (Unaudited) (ii) Glanzstoff Group On May 2017, IVL, through its indirect subsidiary, Indorama Netherlands B.V., completed the acquisition of 100% equity interest in Glanzstoff Group (which consist of Glanzstoff Industries (Qingdao) Company Limited, Glanzstoff Holding (Hong Kong) Limited, Glanzstoff Industries S.R.L., Società Industriale Cremonese SICREM s.p.a., Cord A.G., Textilcord Steinfort S.A., Glanzstoff Management GmbH and Glanzstoff - Bohemia s.r.o.) which is Europe s largest converter for tire cord fabrics, a global leader in single-end-cords (SEC) from Glanzstoff Industries GmbH, as per definitive share purchase agreement dated 12 April 2017 for a preliminary cash consideration of EUR million (Baht 6,114.0 million). The transaction is accounted for as a business combination. During the period from acquisition date to 2017, the business contributed revenue of EUR 15.8 million (Baht million) and net loss of EUR 0.1 million (Baht 2.2 million) to the Group s results. If the acquisition had occurred on 1 January 2017, management estimates that consolidated revenue and consolidated profit for the six-month period ended 2017 would have increased by Baht 2,979.3 million and Baht 85.4 million, respectively. In determining these amounts, management has assumed that the fair value adjustments, determined provisionally, that arose on the date of acquisition would have been the same if the acquisition had occurred on 1 January Management believes that the acquisition will offer a unique opportunity for IVL to supplement its high value-added portfolio. It will further enhance the Company s client-value proposition and provide for collaborative opportunities with the global auto industry including for autonomous and electric vehicles. Identifiable assets acquired and liabilities assumed Carrying Fair value Recognised amounts adjustments values Cash and cash equivalents 96,635-96,635 Inventories 1,184,716-1,184,716 Accounts receivable 1,446,021-1,446,021 Property, plant and equipment 1,707,1 1,616,851 3,324,162 Intangible assets 25,246 1,953,762 1,979,008 Short-term loan from financial institutions (6,219) - (6,219) Accounts payable (1,106,229) - (1,106,229) Deferred tax (4,868) (928,359) (933,227) Other assets/(liabilities), net (511,075) - (511,075) Net identifiable assets acquired and liabilities assumed 2,521,538 2,642,254 5,163,792 Goodwill 950,232 Total consideration 6,114,024 Cash acquired (96,635) Net consideration - paid 6,017,389 An independent appraiser has been appointed to determine the fair value of the business but the report of the appraiser is not yet completed as at the date of approval of these interim financial statements. Accordingly, the fair value of assets acquired and liabilities assumed have been provisionally determined at the acquisition date. During the three-month and six-month periods ended 2017, the Group incurred acquisitionrelated costs of Baht 12.4 million. This amount has been included in administrative expenses in the consolidated statement of income for the three-month and six-month periods ended 2017, respectively. 20

22 For the three-month and six-month periods ended 2017 (Unaudited) In accordance with TFRS3, management is required to make a preliminary assessment of the fair values of businesses acquired as at the acquisition date. During the measurement period, which must not exceed one year from the acquisition date, the acquirer shall retrospectively adjust the provisional amounts recognised at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date. Finalisation of the fair value for acquisition of Glanzstoff Group is dependent on determination of the ultimate purchase price and completion of the purchase price allocation exercise. 4 Related parties For the purposes of these interim financial statements, parties are considered to be related to the Group/Company if the Group/Company has the ability, directly or indirectly, to control or joint control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group/Company and the party are subject to common control or common significant influence. Related parties may be individuals or other entities. Relationships with key management and other related parties were as follows: Name of entities Country of Nature of relationships incorporation/ nationality Indorama Resources Limited Thailand Immediate parent company, 63.69% shareholder, some common directors Indorama Ventures Global Thailand Subsidiary, 99.99% shareholding, some Services Limited common directors Indorama Polymers Thailand Subsidiary, 72.60% shareholding and 27.% Public Company Limited interest held indirectly, some common directors Indorama Holdings Limited Thailand Subsidiary, 99.81% shareholding, some common directors Indorama Polyester Thailand Subsidiary, 64.94% shareholding and 34.55% Industries Public interest held indirectly, some common Company Limited directors Indorama Petrochem Limited Thailand Subsidiary, 99.99% shareholding, some common directors TPT Petrochemicals Public Thailand Subsidiary, 99.97% shareholding, some Company Limited common directors IVL Belgium N.V. Belgium Subsidiary, 99.99% shareholding, some common directors Indo Polymers Mauritius Mauritius Subsidiary, % shareholding, Limited Petform (Thailand) Limited Thailand Indirect subsidiary, 59.94% effective interest, some common directors Asia Pet (Thailand) Limited Thailand Indirect subsidiary, 99.90% effective interest, some common directors Indorama Ventures Polymers Thailand Indirect subsidiary, 99.98% effective interest (Rayong) Public Company Limited (Entire business transfer to Indorama Petrochem Limited in April 2017 and liquidated in April 2017) Guangdong IVL PET Polymer China Indirect subsidiary, 99.91% effective interest, Company Limited 21

23 For the three-month and six-month periods ended 2017 (Unaudited) Name of entities Country of Nature of relationships incorporation/ nationality FiberVisions (China) Textile China Indirect subsidiary, % effective interest Products Limited Performance Fibers (Kaiping) China Indirect subsidiary, % effective interest, Company Limited Performance Fibers (Kaiping) China Indirect subsidiary, % effective interest, No.2 Company Limited Performance Fibers (Kaiping) China Indirect subsidiary, % effective interest, No.3 Company Limited Performance Fibers (Kaiping) China Indirect subsidiary, % effective interest Trading Company Limited Glanzstoff Industries China Indirect subsidiary, % effective interest (Qingdao) Company Limited Glanzstoff Holding Hong Kong Indirect subsidiary, % effective interest (Hong Kong) Limited Performance Fibers Hong Kong Indirect subsidiary, 99.99% effective interest, (Hong Kong) Limited PT. Indorama Ventures Indonesia Indirect subsidiary, % effective interest, Indonesia some common directors PT. Indorama Polyester Indonesia Indirect subsidiary, 99.98% effective interest, Industries Indonesia some common directors PT. Indorama Polychem Indonesia Indirect subsidiary, % effective interest, Indonesia PT. Indorama Polypet Indonesia Indonesia Indirect subsidiary, % effective interest, KP Equity Partners Inc. Malaysia Indirect subsidiary, % effective interest, some common directors Indorama Ventures Packaging Myanmar Indirect subsidiary, 99.91% effective interest (Myanmar) Limited Indorama Ventures Packaging Philippines Indirect subsidiary, 99.99% effective interest (Philippines) Corporation IVL Singapore PTE Limited Singapore Indirect subsidiary, 99.91% effective interest, Indorama Ventures Packaging India Indirect subsidiary, 99.98% effective interest (India) Private Limited FiberVisions (China) A/S Denmark Indirect subsidiary, % effective interest FiberVisions A/S Denmark Indirect subsidiary, % effective interest Wellman France Recyclage SAS France Indirect subsidiary, % effective interest FiberVisions Vermogensver- Germany Indirect subsidiary, % effective interest waltungsgesellschaft mbh Trevira Holdings GmbH Germany Indirect subsidiary, % effective interest, Trevira GmbH Germany Indirect subsidiary, % effective interest PHP Fibers GmbH Germany Indirect subsidiary, 80.00% effective interest, Wellman International Limited Ireland Indirect subsidiary, % effective interest, Glanzstoff Industries S.R.L. Italy Indirect subsidiary, % effective interest Società Industriale Cremonese Italy Indirect subsidiary, % effective interest SICREM s.p.a. 22

24 For the three-month and six-month periods ended 2017 (Unaudited) Name of entities Country of Nature of relationships incorporation/ nationality Cord A.G. Luxembourg Indirect subsidiary, % effective interest, Textilcord Steinfort S.A. Luxembourg Indirect subsidiary, % effective interest Glanzstoff Management GmbH Austria Indirect subsidiary, % effective interest Glanzstoff - Bohemia s.r.o. Czech Republic Indirect subsidiary, % effective interest UAB Orion Global PET Lithuania Indirect subsidiary, 99.91% effective interest, UAB Indorama Polymers Lithuania Indirect subsidiary, 99.91% effective interest, Europe UAB Indorama Holdings Lithuania Indirect subsidiary, 99.81% effective interest, Europe Indorama Netherlands The Netherlands Indirect subsidiary, % effective interest Cooperatief U.A. Indorama Netherlands B.V. The Netherlands Indirect subsidiary, % effective interest Indorama Ventures Europe B.V. The Netherlands Indirect subsidiary, % effective interest, Indorama Polymers The Netherlands Indirect subsidiary, 99.91% effective interest, Rotterdam B.V. Indorama Ventures Recycling The Netherlands Indirect subsidiary, % effective interest Netherlands B.V. MJR Recycling B.V. The Netherlands Indirect subsidiary, % effective interest Indorama Holdings The Netherlands Indirect subsidiary, 99.81% effective interest, Rotterdam B.V. Indorama Ventures Dutch The Netherlands Indirect subsidiary, 51.00% effective interest Investments B.V. Indorama Ventures Poland Poland Indirect subsidiary, % effective interest, Sp. z o.o. Indorama Ventures Química Spain Indirect subsidiary, % effective interest, S.L.U. Indorama Trading AG Switzerland Indirect subsidiary, 99.81% effective interest Indorama Ventures Adana Turkey Indirect subsidiary, % effective interest, PET Sanayi Anonim Sirketi some common directors Indorama Ventures Corlu Turkey Indirect subsidiary, % effective interest, PET Sanayi Anonim Sirketi some common directors Beverage Plastics (Holdings) United Kingdom Indirect subsidiary, 51.00% effective interest Limited Beverage Plastics Limited United Kingdom Indirect subsidiary, 51.00% effective interest Beacon Trading (UK) Limited United Kingdom Indirect subsidiary, 99.81% effective interest Indorama Trading (UK) Limited United Kingdom Indirect subsidiary, 99.81% effective interest Indorama Polymers United Kingdom Indirect subsidiary, 99.91% effective interest, Workington Limited Indorama Ventures Holdings LP USA Indirect subsidiary, % effective interest Indorama Ventures USA USA Indirect subsidiary, % effective interest Holdings LP Indorama Ventures OGL USA Indirect subsidiary, % effective interest Holdings LP Indorama Ventures Logistics USA Indirect subsidiary, % effective interest, LLC Indorama Ventures (Oxide & USA Indirect subsidiary, % effective interest, Glycols) LLC 23

25 For the three-month and six-month periods ended 2017 (Unaudited) Name of entities Country of Nature of relationships incorporation/ nationality Performance Fibers Holdings USA Indirect subsidiary, % effective interest Finance, Inc. Performance Fibers Asia USA Indirect subsidiary, % effective interest Holdings, LLC Performance Fibers Asia, LLC USA Indirect subsidiary, % effective interest Indorama Ventures AlphaPet USA Indirect subsidiary, % effective interest, Holdings, Inc. Indorama Polymers (USA) LLC USA Indirect subsidiary, % effective interest AlphaPet, Inc. USA Indirect subsidiary, % effective interest, Indorama Ventures USA Indirect subsidiary, % effective interest Polyholding LLC Indorama Ventures USA LLC USA Indirect subsidiary, % effective interest Auriga Polymers Inc. USA Indirect subsidiary, % effective interest, StarPet Inc. USA Indirect subsidiary, % effective interest, Indorama Ventures Xylenes USA Indirect subsidiary, % effective interest, & PTA LLC some common key management personnel Indorama Ventures Performance USA Indirect subsidiary, % effective interest, Fibers Holdings USA LLC some common key management personnel FiberVisions Corporation USA Indirect subsidiary, % effective interest, FiberVisions Manufacturing USA Indirect subsidiary, % effective interest Company FiberVisions Products, Inc. USA Indirect subsidiary, % effective interest FiberVisions L.P. USA Indirect subsidiary, % effective interest Trevira North America, LLC USA Indirect subsidiary, % effective interest PHP Fibers Inc. USA Indirect subsidiary, 80.00% effective interest, Safe Tweave Inc. USA Indirect subsidiary, 80.00% effective interest Indorama Ventures Olefins USA Indirect subsidiary, % effective interest Holding LLC Indorama Ventures Investments USA Indirect subsidiary, 51.00% effective interest USA LLC Indorama Ventures Olefins LLC USA Indirect subsidiary, 75.99% effective interest, some common key management personnel Indorama Ventures Exporter Inc. USA Indirect subsidiary, % effective interest, Indorama Ventures Northern Canada Indirect subsidiary, % effective interest, Investments Inc. Indorama Ventures Gestion Inc. Canada Indirect subsidiary, % effective interest, Indorama Ventures PTA Canada Indirect subsidiary, % effective interest, Montréal LP some common key management personnel Canada Inc. Canada Indirect subsidiary, % effective interest IVL Holding, Mexico Indirect subsidiary, % effective interest, S. de R.L. de C.V. some common key management personnel Grupo Indorama Ventures, Mexico Indirect subsidiary, % effective interest, S. de R.L. de C.V. some common key management personnel 24

26 For the three-month and six-month periods ended 2017 (Unaudited) Name of entities Country of Nature of relationships incorporation/ nationality Indorama Ventures Polymers Mexico Indirect subsidiary, % effective interest, Mexico, S. de R.L. de C.V. some common key management personnel Indorama Ventures Polycom, Mexico Indirect subsidiary, % effective interest, S. de R.L. de C.V. some common key management personnel Indorama Ventures Servicios Mexico Indirect subsidiary, % effective interest, Corporativos, some common key management personnel S. de R.L. de C.V. Indorama Ventures Mexico Mexico Indirect subsidiary, 100% effective interest Assets, S. de R.L. de C.V. Indorama PET (Nigeria) Nigeria Indirect subsidiary, 89.92% effective interest, Limited Indorama Ventures Packaging Nigeria Indirect subsidiary, % effective interest (Nigeria) Limited Indorama Ventures Packaging Republic of Indirect subsidiary, % effective interest (Ghana) Limited Ghana ES FiberVisions (Thailand) Thailand Indirect joint venture, 50.00% Company Limited effective interest ES FiberVisions (Suzhou) China Indirect joint venture, 50.00% Co., Ltd. effective interest ES FiberVisions China Limited China Indirect joint venture, 50.00% effective interest ES FiberVisions Shanghai China Indirect joint venture, 50.00% Co., Ltd. effective interest ShenMa-PHP (Pingdingshan) China Indirect joint venture, 39.20% Air Bag Yarn Manufacturing effective interest Co., Ltd. PHP-ShenMa Air Bag Yarn China Indirect joint venture, 40.80% Marketing (Shanghai) Co., Ltd. effective interest ES FiberVisions Hong Kong Hong Kong Indirect joint venture, 50.00% Limited effective interest ES FiberVisions Company Japan Indirect joint venture, 50.00% Limited effective interest PT. Indorama Petrochemicals Indonesia Indirect joint venture, 47.25% effective interest Micro Polypet Private Limited India Indirect joint venture, 50.00% effective interest, some common directors Sanchit Polymers Private Limited India Indirect joint venture, 50.00% effective interest Eternity Infrabuild Private India Indirect joint venture, 50.00% Limited effective interest IVL Dhunseri Petrochem India Indirect joint venture, 50.00% Industries Private Limited effective interest, some common directors (changed name in May 2017) ES FiberVisions Holdings ApS Denmark Indirect joint venture, 50.00% effective interest ES FiberVisions ApS Denmark Indirect joint venture, 50.00% effective interest TTI GmbH Germany Indirect joint venture, 40.00% effective interest 25