ALPEK, S.A.B. de C.V. Annual Report 2012

FY2012 Annual Report · ALPEK, S.A.B. de C.V.

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Alpek, S.A B. de C.V.
Av. Gómez Morín 1111 Sur
Col. Carrizalejo
San Pedro Garza García
Nuevo León
CP. 66254, Mexico
www.alpek.com

track record • strength • potential

2 0 1 2 A N N U AL R E P o R t

Polyurethane
Thermal
insulation

Polypropylene
Refrigerator
lining

PET
Food tray

Polypropylene
Containers

Fiber
Clothing

PET
Soft drink
bottles

CoNtENts

overview and track Record

Financial and operating Highlights

Letter to shareholders

Differentiated Business Model

Polyester Chain

Plastics and Chemicals

social Responsibility

Board of Directors

Management team

Corporate Governance

Financial section

Glossary

Polypropylene
Caps

Investor Relations
Hernán F. Lozano
Sabino Parra

Av. Gómez Morín 1111-C Sur
San Pedro Garza García, N.L., Mexico 66254

IR@alpek.com

www.alpek.com

Corporate Profile

• Mexico’s largest petrochemical company
and the second-largest in Latin America

• Operating in two business segments:
Polyester, and Plastics and Chemicals

• North America’s leading polyester producer

• Only manufacturer of polypropylene and

caprolactam in Mexico

• Operates the largest expandable

polystyrene (EPS) plant in the Americas

• 20 plants and 4,700 employees in Mexico,

the United States and Argentina

• 91% of Alpek’s products used for food,

beverage and consumer goods packaging

• Listed on the Mexican Stock Exchange since

April 2012

Alpek boasts a track record of growth and
success, capitalizing on opportunities for
consolidation and implementing high value
added projects, since 1975.

Through organic growth, acquisitions and
strategic joint ventures, we have become
Mexico’s largest petrochemical company and
number two in Latin America.

PET
Water bottle

PET
Sauce bottle

US$7,277

million in income
in 2012

6.5 million
tonnes per year in
installed capacity

78%

of sales

Polyester Chain
• PTA

• PET

• Fibers

22%

of sales

Plastics and Chemicals
• Polypropylene

• Expandable Polystyrene (EPS)

• Polyurethane

• Caprolactam

• Fertilizers

• Specialty Chemicals

Installation
of propylene
splitter

Univex acquisition
(Caprolactam)

Cogeneration
project

Acquisitions
in USA
(Polyester)

Consolidation
of EPS in
Altamira

Polypropylene
plant startup

1985

1988

1991

1994

1997

2000

w
e
i

v
r
e
v
O

d
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e
R
k
c
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DMT expansionAcquisition of PTA plant
20 plants
in 3 countries:
Mexico, the United States
and Argentina

1986-2012
sales volume
CAGR: 11%

Clear Path
Recycling

Polypropylene
expansion

Expansion
of EPS in
Altamira

PTA/PET
acquisitions
in USA

PET acquisitions
in Mexico and
Argentina

Initial Public
Offering
(BMV)

2003

2006

2009

2012

Financial and
Operating Highlights

RESUlTS

Net sales

Operating income

EBITDA1

Majority net income

Millions of dollars

Millions of pesos

2012

2011 % VAR.

2012

2011 % VAR.

7,277

7,356

-1% 96,163

90,667

566

728

277

616

771

332

-8%

-6%

7,476

7,589

9,611

9,545

-17%

3,663

3,899

-1%

-6%

Net income per share2

0.14

0.19

-27%

1.83

2.24

-18%

BAlAnCE

Assets

Liabilities

4,742

4,446

7% 61,696

62,153

-1%

2,463

3,101

-21% 32,045

43,354

-26%

Stockholders´ equity

2,279

1,345

69% 29,651

18,799

58%

Majority interest

2,012

1,091

84% 26,180

15,254

72%

Book value per share 3

0.95

0.63

51%

12.36

8.77

41%

nOTE: In this annual report, monetary figures are expressed in nominal Mexican pesos (Ps.) and in nominal dollars (US$)
unless otherwise specified.
The financial information for 2011 and 2012 was prepared in accordance with IFRS, in effect in Mexico as of January 2012.
Conversions from pesos to dollars were made using the weighted average rate of the month in which the revenues or
disbursements were made.
The percentage variations between 2012 and 2011 are expressed in nominal terms.
(1) EBITDA = operating income plus depreciation, amortization and impairment of non-current assets.
(2) Based on the weighted average number of outstanding shares (1,996 million in 2012 and 1,739 million in 2011).
(3) Based on the number of outstanding shares (2,118 million at the end of 2012 and 1,739 million at the end of 2011).

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EBITDAUS$ MillionsAssetsUS$ MillionsMajority net incomeUS$ MillionsLetter to
Shareholders

To our shareholders:

2012 was a very important
year for Alpek, with
the implementation of
fundamental initiatives that
enhance our potential to
continue growing.

Two events of great significance during the
year were our initial public offering in the
Mexican Stock Exchange and the issuance
of our first bond in the international debt
market. These actions strengthened the
Company’s financial position and constitute
a first step in the development of strategic
projects, such as the modernization of
our installed capacity in the United States
and vertical integration into certain raw
materials.

Our performance in 2012 was positive,
considering that the global petrochemical
industry faced important challenges as
a result of recent production capacity
expansions in China and the slowdown in
export markets such as Europe. Our low-
cost operations and focus on consumer

related end-uses in North America
allowed us to mitigate the volatility in
the environment and generate more than
US$728 million in operating cash flow
(EBITDA).

In the Polyester Chain, we finished
integrating the strategic acquisitions made
in 2011 that positioned us as the largest
integrated PTA-PET producer in North
America. We also sold the first Integrex®
license, leveraging the advantages of our
Polyester technology. Polyester volume
grew 6% in 2012 and EBITDA reached
US$531 million, despite an adjustment in
the PTA price formula and pressure on our
export markets.

In the Plastics and Chemicals Segment,
the polypropylene (PP) volume grew more
than 19% in 2012, driven by enhanced
operating efficiency and an increased supply
of propylene from the Pemex refineries and
from imports. We also posted strong results
for most of the businesses in this segment.
Excluding caprolactam, EBITDA for Plastics
and Chemicals grew 9% during 2012.

Caprolactam (CPL) was the product in our
portfolio that faced the greatest challenges
in 2012. Unlike our other products, which
largely compete in North America, Alpek’s
caprolactam is exported to China. The
production capacity that recently came on
line in that country and weak global demand
resulted in an industry margin contraction.

Left
Armando Garza Sada
Chairman of the Board

Right
José de Jesús Valdez Simancas
Chief Executive Officer

Undoubtedly, 2012 saw the greatest
financial transformation in our history. As
a result, Alpek is today a publicly traded
company with “investment grade” ratings
from Fitch, Moody’s and Standard & Poor’s.

During the year, debt amounting to
US$308 million was paid and US$650
million were refinanced to ten years. The
net debt to EBITDA ratio fell from 1.5
times in 2011 to 0.8 times in 2012, while
the average lifetime of our debt increased
from 3.2 at year-end 2011 to 6.9 at the
close of 2012. The strength of our balance
sheet, combined with our access to capital
and debt markets, gives us the financial
flexibility needed to invest in attractive
growth projects.

2012 capital expenditures totaled US$115
million. In addition to investments in
standard maintenance activities, we
began strategic projects that will further
strengthen our low-cost position.

“The strength of our
balance sheet, combined
with our access to capital
and debt markets, gives
us the financial flexibility
needed to invest in
highly attractive growth
projects.”

In May 2012, ground was broken for the
construction of our electricity co-generation
project in Cosoleacaque, Veracruz. With
a total investment of US$130 million, the
plant will come on line in the next twelve
months. It will satisfy on-site steam needs
and produce more than 95 megawatts of
efficient electricity per year for internal
consumption, and the sale of any excess.

“2012 saw the greatest
financial transformation
in the history of our
Company.”

cost position, capitalizing on attractive
growth opportunities with sustainable
competitive advantages. Alpek is
beginning this new phase of its history
from a position of strength, that will
allow it to realize its full potential and
extend its track record of disciplined
growth, generating value for all our
stakeholders.

Sincerely,

Armando Garza Sada
Chairman of the Board of Directors

During the year, we also began a project
for eliminating bottlenecks at the
Columbia plant in the United States. The
project will add 65 thousand tons per
year of PET-producing capacity as early as
the first months of 2013 through a total
investment of US$20 million.

Other strategic projects, such as the
co-generation plant in Altamira, the
integration to MEG (monoethylene
glycol) and the modernization of our
PTA-PET capacity in North America
progressed as planned. We also continue
to seek additional growth opportunities
related to raw material integration and
cost reduction.

Knowing that our people are the basis of
our success, we will continue supporting
the development of all our associates. It
is an honor and a pleasure to work with
Alpek’s committed and talented team on
a daily basis.

Our environmental management
initiatives are also an integral part of our
business strategy. All our plants have
programs to optimize the use of natural
resources by encouraging emissions and
input reduction and material recycling.

On behalf of the Board of Directors,
I would like to thank you, our
shareholders, for your trust during 2012,
Alpek’s first year as a publicly traded
company. We are also sincerely grateful
to our customers, creditors, suppliers,
associates and the community in general
for their great support. The confidence
you have shown motivates us to work
even harder to exceed your expectations.

We reiterate our commitment to
continue enhancing the Company’s low-

José de Jesús Valdez Simancas
Chief Executive Officer

Differentiated
Business Model

Alpek produces and markets
diverse petrochemical products.
Its success in the industry
has been driven by structural
competitive strengths:

leadership position in north
America: Alpek is the region’s
number one producer of PTA,
PET and polyester fibers, with
14 polyester plants and a total
installed capacity of 5.2 million
tons.

Capacity to mitigate volatility:
91% of our production is
directed to stable industries: Food
and Beverages and Consumer
Goods. Our price policy, based
on a cost-plus methodology,
reduces exposure to volatility in
raw-material prices.

leading-edge technology:
We own Integrex®, the world’s
most advanced PTA and
PET production technology,
and also use other widely
recognized technologies, such
as Spheripol®, Spherizone® and
Single Step®.

low-cost production: Our strict
operating and investing discipline,
combined with a high level of
integration, positions us at the
bottom of the cost curve and
enables a greater return on assets.

Financial performance: Over
the past 26 years, Alpek has
posted an annual compound
growth of 11%, while
maintaining a low level of
leverage and consistently paying
dividends.

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An experienced team: Made
up of professionals with wide
experience in the industry, it
has led Alpek’s extensive track
record of outstanding growth
over the past 30 years.

Sales volumeThousands of tonsPolyester
Chain

PTA (purified terephthalic acid), a
petroleum derivative, is the main raw
material for the production of PET resins
and polyester fibers.

PET (polyethylene terephthalate) is
a plastic resin that is widely used in
containers for soft drinks and water, as
well as in packaging for food and other
consumer products.

78%

of sales
• PTA

• PET

• Fibers

The Polyester Chain Business produces
and markets PTA, PET and polyester fibers.
On the basis of installed capacity, we are
the largest PTA producer in North America
and the second largest PET producer in
the world, as well as the leading polyester
fiber producer in North America.

In 2012, the Polyester Chain represented
78% of Alpek’s consolidated sales, with
net sales of US$5,691 million and an
EBITDA of US$531 million.

Our leadership position in North America
is underpinned by the efficient, high-tech
production processes at our 14 plants in the
United States, Mexico and Argentina. These
production facilities have a total installed
capacity of approximately 5.2 million tons
per year and 3,500 employees.

We operate with diverse patents for own
and acquired technologies, including
IntegRex®, the world’s most advanced

REFInERy

PARAxylEnE

PTA

AlPEk

PET

FIBER

1111

In 2012, we signed the first IntegRex® licensing agreement with a renowned company in the polyester industry, reaffirming the outstanding benefits of this technology and underscoring its licensing potential.Polyester fibers are used to produce
rugs, seatbelts and clothing, and have
many other personal and industrial uses.

Our efficient production with cutting-
edge technology has positioned us at the
forefront of the North American market.

technology for PTA and PET production.
IntegRex® reduces the PTA and PET
conversion cost per ton by more than
20% in comparison to other available
technologies and requires a smaller
investment per ton of installed capacity.

In 2012, we signed the first IntegRex®
PTA licensing agreement with a renowned
company in the polyester industry,
reaffirming the outstanding benefits of
this technology and underscoring its
licensing potential.

The main raw material in the Polyester
Chain Business is paraxylene, which is
used to produce PTA. The PTA is then
reacted with another important ethylene-
derived raw material, monoethylene glycol
(MEG), to produce PET.

Our customer base includes PET producers
who purchase our PTA and companies
that make plastic bottles and other
containers from PET for large consumer
products companies. Alpek products are
found in the containers of many world-
famous brands, including Coca-Cola,
Pepsi, Heinz and Kraft Foods.

Mexico, the United States and Canada
are Alpek’s core markets. Additionally,
polyester products are exported to
countries such as Argentina, Brazil,
Colombia, Spain and Lithuania.

In line with the growing trend to include
recycled material in PET and polyester
fiber production, we recycle post-
consumption PET bottles. Alpek’s recycling
facility in North Carolina, that began
operations at the end of 2010, currently
has the capacity to recycle 73 thousand
tons of PET, or more than three billion PET
bottles, annually.

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In line with the growing trend to include recycled material in PET and polyester fiber production, we recycle post-consumption PET bottles.Sales volume Thousands of tonsSalesUS$ MillionsEBITDAUS$ MillionsPlastics and
Chemicals

Polypropylene (PP) is a versatile plastic
used in a wide range of products, including
food packaging, reusable containers, auto
parts, medical supplies and toys.

Expandable polystyrene (EPS) is a rigid,
lightweight, cellular plastic that is used for
packaging, insulation and as a material to
lighten structures.

22%

of sales
• Polypropylene

• Caprolactam

• Expandable Polystyrene (EPS)

• Fertilizers

• Polyurethane

• Specialty Chemicals

The main products of the Plastics
and Chemicals Business include
polypropylene, expandable polystyrene,
polyurethanes and caprolactam, which
are used in a wide range of industries,
including consumer goods, food and
beverages, the automotive industry,
construction, agriculture, oil and gas, and
pharmaceuticals.

In 2012, the sales of Plastics and
Chemicals totaled US$1,586 million,
22% of Alpek’s consolidated net sales,
and US$197 million in EBITDA were
generated.

Plastics and Chemicals operates an installed
capacity of approximately 1.4 million tons
per year, through six plants in Mexico with
1,170 employees. Being Mexico’s only
producer of polypropylene and caprolactam
is among the business’s competitive
advantages. We also operate the largest
EPS plant on the American continent.

leading-edge technologies such as
Lyondell Bassell’s Spheripol®/Spherizone®
for PP and BASF’s Single Step® for EPS.

We have joint ventures with other world-
leading companies for the production
and marketing of polypropylene and
expandable polystyrene, enhanced by

Besides marketing the products of Plastics
and Chemicals in North America, we
export to Asia, Europe, and Central and
South America.

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We have joint ventures with other world-leading companies for the production and marketing of polypropylene and expandable polystyrene, enhanced by leading-edge technologies such as Lyondell Bassell’s Spheripol®/Spherizone® for PP and BASF’s Single Step® for EPS.Sales volume Thousands of tonsSalesUS$ MillionsEBITDAUS$ MillionsSocial
Responsibility

Our plants operate in accordance with
the most important Mexican and
international standards in the industry.

We seek to promote the development of
our employees and communities, and
work in harmony with the environment.

We seek to create economic value, while
at the same time promoting the growth
and wellbeing of our associates and
communities and operating in harmony
with nature.

We know that our people are an invaluable
asset and therefore offer the training they
need to grow both professionally and
personally. In 2012, we provided more than
100 thousand hours of training for our
associates.

We are firmly committed to offering
working conditions that guarantee health
and safety. We operate with strict, safe
working procedures and programs that
reinforce a culture of safety.

During the year, almost 3,200 employees
benefitted from our health and nutrition
campaigns, which included influenza
vaccination programs, informational
sessions on how to prevent diabetes and
obesity, and visual health support.

We also made an annual survey that
covers safety and environmental issues,
as well as the community’s perception of
how we are doing in relation to topics
such as environmental protection and risk
management.

Every Alpek plant has programs to reduce
the consumption of electricity and natural
gas, monitor CO2 emissions, handle
hazardous materials appropriately and
recycle process water. As a result, all our
production facilities operate in accordance
with the most important Mexican and
international standards for the industry.

Some examples of the certifications are:

• Clean Industry (Mexican Environmental
Protection Agency, PROFEPA)

• ISO 9001

• ISO 14001

• Self-regulation of Health and Safety in

the Workplace, Level 4 Certification

(Mexican Ministry of Work and Social

Welfare, STPS)

• Comprehensive Responsibility

Management System (Mexican

National Association of the Chemical

Industry, ANIQ)

Every Alpek plant has programs to reduce the consumption of electricity and natural gas, monitor CO2 emissions, handle hazardous materials appropriately and recycle process water.

Board of
Directors

Armando Garza Sada (3)
Chairman of the Board of ALFA,
S.A.B. de C.V.
Member of the Board of Alpek since April
2012. Member of the Boards of ALFA,
FEMSA, Frisa, Grupo Financiero Banorte,
Lamosa, Liverpool, Proeza, ITESM and
Stanford University.

Álvaro Fernández Garza (3)
President of ALFA, S.A.B. de C.V.
Member of the Board of Alpek since
April 2012. Member of the Boards of
ALFA, Vitro, Cydsa and Universidad de
Monterrey.

Francisco José Calderón Rojas (2)
Chief Financial Officer of Grupo Franca
Industrias, S.A. de C.V.
Member of the Board of Alpek since
April 2012. Member of the Boards
of Franca Industrias, Franca Servicios,
Franca Desarrollos, Capital Inmobiliario
Institucional, ITESM and Universidad de
Monterrey.

Rodrigo Fernández Martínez (3)
Marketing Director of Sigma
Alimentos, S.A. de C.V.
Member of the Board of Alpek since April
2012. Previously Sigma Alimentos, S.A. de
C.V.’s Director of New Businesses.

Andrés E. Garza Herrera (1A)
Chief Executive Officer of Qualtia
Alimentos, S.A. de C.V.
Member of the Board of Alpek since April
2012. Member of the Regional Board of
Banorte and of the General Councils of
Universidad de Monterrey, Ciudad de los
Niños and Patronato Papalote Verde in
Monterrey, Nuevo León.

Pierre Francis Haas García (1)
Senior Advisor of the Global Oil
Practice of McKinsey & Co.
Member of the Board of Alpek since
April 2012. Member of the Oxford
Energy Policy Club, the Paris Petroleum
Club and Coloquio Mexicano de
Energía.

Jaime Serra Puche (1A)
President of SAI Derecho & Economía
Member of the Board of Alpek since April
2012. Member of the Boards of Chiquita
Brands (CQB), Fondo México (MXF),
Tenaris (TS), Vitro (VTO) and Grupo Modelo
(GMODELOC).

Enrique Zambrano Benítez (1A)
Chief Executive Officer of Grupo
Proeza, S.A. de C.V.
Member of the Board of Alpek since
April 2012. Member of the Boards of
Grupo Proeza, Xignux, Frisa Industrias and
ITESM.

Merici Garza Sada (3)
Member of the Board of ALFA since April
2012.

Carlos Jiménez Barrera
Secretary of the Board

Key
1.

Independent board member

Independent proprietary board member

3. Related proprietary board member

A) Audit and Corporate Practices Committee

1818

Management
Team

José de Jesús Valdez

Raúl Millares neyra

Felipe Garza Medina

Jorge P. young Cerecedo

Simancas

Chief Financial Officer

President of the PTA

President of the PET and

Chief Executive Officer

Joined ALFA in 1981. He has

Business Unit

Staple Fibers Business Unit

Joined ALFA in 1976. He has

a Bachelor’s in Engineering

Joined ALFA in 1977. He has a

Joined ALFA in 1991. He has

a Bachelor’s in Engineering

from Universidad

Bachelor’s in Engineering from

a Bachelor’s in Engineering

and an MBA from ITESM,

Iberoamericana and an MBA

Stanford University and an

from ITESM and an MBA

as well as a Master’s in

from Wharton.

MBA from Cornell University.

from Wharton.

Industrial Engineering from

Stanford University.

Jorge González Escobedo

Alejandro llovera

José luís Zepeda Peña

Eduardo Escalante Castillo

President of the Filament

Zambrano

President of the EPS,

President of the Caprolactam

Fibers Business Unit

President of the

Polyurethanes and Specialty

and Ammonium Sulfate

Joined ALFA in 1974. He has

Polypropylene Business

Chemicals Business Unit

Business Unit

a Bachelor’s in Engineering

Unit

Joined ALFA in 1986. He has

Joined ALFA in 1981. He has

and an MBA from ITESM.

Joined ALFA in 1985. He has

a Bachelor’s in Engineering

from UNAM and an MBA

from ITESM and a Master’s

and an MBA from ITESM.

from ITESM.

in Engineering from Stanford

University.

1919

Corporate
Governance

Alpek operates in accordance
with the Mexican Code of Best
Corporate Practices (CMPC)
instituted in the year 2000 by the
Mexican securities commission.
The purpose of the Code is to
establish a frame of reference
for corporate governance and
thereby increase investor
confidence in Mexican companies.

Once a year, all companies that quote on the
Mexican Stock Exchange (BMV) must disclose
the extent to which they adhere to the CMPC
by answering a questionnaire. The responses of
the different companies may be consulted on the
BMV’s website.

A summary of Alpek’s principles of corporate
governance is presented below, reflecting the
answers the company gave to the questionnaire
in June 2012 and updated where necessary:

A) The Board of Directors is made up of nine
members, who have no alternates. Of the nine
directors, four are independent board members,
four are related proprietary board members and one
is an independent proprietary board member. This
annual report provides information on all the board
members, identifying those who are independent
and the Committees on which they sit.

B) To ensure it performs its duties appropriately,
the Board of Directors is advised by the Audit and
Corporate Practices Committee, which is made up
of independent board members. The Committee
Chairman is an independent board member.

C) The Board of Directors meets every three
months. Meetings of the Board may be called
by the Chairman of the Board, the Chairman of
the Audit and Corporate Practices Committee,

the Secretary of the Board or at least 25% of its
members. At least one such meeting every year is
dedicated to defining the company’s medium- and
long-term strategies.

D) Members must inform the Chairman of the
Board of any conflicts of interest that may arise,
and abstain from participating in any related
deliberations.

E) The Audit and Corporate Practices Committee
studies and issues recommendations to the Board
of Directors on matters such as selecting and
determining the fees to be paid to the external
auditor, coordinating with the company’s internal
audit area and studying accounting policies,
among others.

F) The company has internal control systems with
general guidelines that are submitted to the Audit
and Corporate Practices Committee for its opinion.
In addition, the external auditor validates the
effectiveness of the internal control system and
issues reports thereon.

G) The Board of Directors is advised by the planning
and finance department when evaluating matters
relating to the feasibility of investments, strategic
positioning of the company, alignment of investing
and financing policies, and review of investment
projects. This is carried out in coordination with the
planning and finance department of the holding
company, ALFA, S.A.B. de C.V.

H) The Audit and Corporate Practices Committee
is responsible for issuing recommendations to the
Board of Directors on such matters as employment
terms and severance payments for senior executives,
and compensation policies, among others.

I) Alpek has a department specifically dedicated
to maintaining an open line of communication
between the company and its stockholders and
investors. This ensures that investors have the
financial and general information they require to
evaluate the company’s development and progress.

20
20

Consolidated and
Combined Financial
Statements

Management´s Analysis

Report of the Independent Auditors

Consolidated and Combined Balance Sheets

Consolidated and Combined Statements of Income

Consolidated and Combined Statements of Comprehensive Income

Consolidated and Combined Statements of Changes in Equity

Consolidated and Combined Statements of Cash Flows

Notes to the Consolidated and Combined Financial Statements

Management´s
Analysis

2012

The following report should be considered in conjunction with the Letter to the Shareholders,
Audited Financial Statements and Complementary Information. Unless otherwise indicated,
figures in the 2011 and 2012 information are expressed in millions of nominal Mexican pesos.
Additionally, certain figures are expressed in millions of dollars (US$), reflecting the considerable
dollarization of Alpek’s revenues. Percentage variations are presented in nominal terms and the
information is presented on the basis of International Financial Reporting Standards.

ECONOMIC ENVIRONMENT

During the second half of 2011, the economic environment continued to deteriorate because
of debt-related issues in several peripheral European countries. Since the situation remained
unresolved in 2012, the United States and Europe continued facing problems. Despite this
backdrop, the Mexican economy posted healthy growth, significantly above that of Europe and
the United States.

The figures below describe the economic environment that prevailed during 2012:

As of the date of this report, 2012 growth in Mexico’s Gross Domestic Product (GDP) is estimated
at 3.9%, the same as in 2011. The consumer price index rose 3.6%(b) in 2012, a rate below the
3.8%(b) posted in 2011. The Mexican peso appreciated 6.9%(c) in nominal terms during the year,
compared to a 13.1%(c) depreciation in 2011. The average annual overvaluation of the Mexican
peso vis-à-vis the US dollar was 14.2%(d) in real terms in 2012 and 16.1%(d) in 2011.

With regard to interest rates in Mexico, the TIIE was 4.8%(b) in nominal terms in 2012, unchanged
from 2011. In real terms, this rate grew, from an annual accumulated rate of 1.1% in 2011 to
1.3% in 2012.

The average annualized nominal 3-month LIBOR rate in dollars was 0.4%(e) in 2012, similar to the
0.3%(e) of 2011. If the nominal appreciation of the Mexican peso vis-à-vis the US dollar is included
in this figure, the LIBOR rate in constant pesos declined from 9.3%(a) in 2011 to -9.7%(a) in 2012.

Sources:
(a) Consultores Económicos Especializados, S. A. de C. V. (CEE)
(b) Banco de México (Banxico)
(c) Banxico. Tipo de cambio para solventar obligaciones denominadas en moneda extranjera pagaderas en la República
Mexicana (Exchange rate to meet foreign currency denominated obligations payable in Mexico)
(d) CEE. Base 1990. Bilateral with the United States, taking into consideration consumer prices
(e) British Bankers Association

INdusTRy

Global prices of petrochemical products fell in 2012 compared to 2011, partly reflecting the decline in
oil prices during the first half of the year. There were pressures on the polyester industry in Asia during
2012 because of the recent increase in installed capacity in the region and a decline in demand in a
number of markets, such as Europe. Additionally, caprolactam imports into China were under pressure
during the year because of incremental Chinese production capacity compared to the previous year.
However, the North American market showed a sustained growth in demand and more stable margins.

VOluME - (Thousands of Tons)

2011

2012

VaR. %

Polyester and Polyester Products

3,084

3,263

Plastics and Chemicals

790

823

TOTal VOluME

3,874

4,086

salEs - (Millions of Pesos)

2011

2012

VaR. %

Polyester and Polyester Products

70,050

75,249

Plastics and Chemicals

20,781

21,068

Eliminations

TOTal salEs

(164)

(154)

90,667

96,163

(7)

salEs - (US$ Millions)

Polyester and Polyester Products

Plastics and Chemicals

Eliminations

TOTal salEs

salEs

2011

5,686

1,683

(14)

7,356

2012

VaR. %

5,695

1,594

(12)

7,277

(5)

(14)

(1)

In 2012, Alpek’s net sales totaled $96,163 million (US$7,277 million), 6% more than the $90,667 million
(US$7,356 million) posted in 2011. The sales volume grew 5%, largely reflecting the integration of
acquisitions made in 2011 and an increase in polypropylene volume. The growth in volume was offset
by a generalized reduction in prices, because of a decline in the prices of petrochemical raw materials
and an adjustment in the PTA price formula in North America. Figures in pesos were benefited by the
foreign exchange rate so that, when figures are compared in dollars, there was a 1% decline in sales.

salEs by busINEss sEgMENT

In 2012, net sales of Polyester and Polyester Products totaled $75,249 million (US$5,695
million), 7% above the $70,050 million (US$5,686 million) of 2011. The sales volume grew 6%,
largely reflecting the integration of acquisitions made in 2011 and stable demand for Alpek
products in the North American region. The growth in volume was offset by a generalized
reduction in prices and by non-recurring events related to the climate and to the interruption
of an important customer’s production during 3Q12. Figures in pesos were benefited by the
foreign exchange rate so that, when figures are compared in dollars, there was no significant
variation in sales.

In 2012, net sales of Plastics and Chemicals totaled $21,068 million (US$1,594 million), 1% more
than the $20,781 million (US$1,683 million) of 2011. Volume rose 4%, largely reflecting an
increase in polypropylene volume because of growth in propylene supply, offset by a generalized
decline in prices. Figures in pesos were benefited by the exchange rate, so that, when figures are
compared in dollars, there was a 5% reduction in sales.

OpERaTINg INCOME aNd OpERaTINg Cash FlOw (EbITda)

In 2012, operating income totaled $7,476 million (US$566 million), 1% less than the $7,589
million (US$616 million) of 2011. Figures in pesos were benefited by the foreign exchange rate,
so that, when figures are compared in dollars, there was an 8% reduction in operating income.
The decline largely reflects the contraction in margins of caprolactam and other export products,
the adjustment in the PTA price formula in North America and certain non-recurring events, such
as Hurricane Isaac. However, it is important to note the increase in the incomes of expandable
polystyrene, polyurethane, industrial chemicals and specialty chemicals. In 2012, EBITDA totaled
$9,610 million (US$728 million), 1% more than the $9,545 million (US$771 million) of 2011.
Figures in pesos were benefited by the exchange rate, so that, when figures are compared in
dollars, there was a 6% reduction in EBITDA.

EbITda

(Millions of Pesos)

Polyester and Polyester Products

Plastics and Chemicals

Eliminations and Others

2011

6,732

2,813

7,008

2,606

(4)

TOTal OpERaTINg Cash FlOw

9,545

9,610

(7)

N/A

2012

VaR. %

EbITda

(US$ Millions)

Polyester and Polyester Products

Plastics and Chemicals

Eliminations and Others

TOTal OpERaTINg Cash FlOw

2011

2012

VaR. %

544

227

771

531

197

728

(3)

(13)

N/A

(6)

COMpREhENsIVE FINaNCINg INCOME (ExpENsE) (CFI/E)

In 2012, the comprehensive financing expense totaled $1,331 million, 12% above the $1,190 million
of 2011. This rise largely reflects an increase in financial expense related to the prepayment of Grupo
Petrotemex debt, offset by growth in financial income, a foreign exchange gain and an increase in the
valuation of financial derivative instruments.

CFI/E- (Millions of Pesos)

2011

2012

VaR. %

Financial expense

Financial income

Foreign exchange gain (loss)

Valuation of financial derivative instruments

CFI/E

TaxEs

(1,323)

(1,897)

221

(92)

356

141

(1,190)

(1,331)

254

1,698

In 2012, income taxes totaled $1,723 million, 12% below the $1,948 million of 2011. This reduction
largely reflects the recognition of certain losses that reduced the tax amount.

NET INCOME

The 2012 net income totaled $4,383 million (US$332 million), 1% less than the $4,428 million
(US$362 million) of 2011. This decline largely reflects the reduction in operating income and increased
comprehensive financing expense, offset by the reduction in income taxes. Figures in pesos were
benefited by the exchange rate, so that, when figures are compared in dollars, there was an 8%
reduction in net income.

CapITal ExpENdITuREs

In 2012, capital expenditures amounted to $1,522 million (US$115 million), 159% more than the $588
million (US$46 million) of 2011. This increase largely reflects the construction of the cogeneration plant
at the PTA-PET complex in Cosoleacaque, Veracruz. Capital expenditures during the year also included
the elimination of bottlenecks at the PET plant in Columbia, other smaller projects and the replacement
of certain assets.

NET dEbT1

2012 net debt amounted to $8,011 million (US$616 million), 52% less than the $16,601 million
(US$1,188 million) of 2011. The reduction largely reflects a 22% decline in the balance of gross debt
in 2012, combined with an increase in cash because of the resources obtained from the Initial Public
Offering of Shares in April 2012. As a result, the ratio of Net Debt to EBITDA fell from 1.5 to 0.8 times
during the course of the year.

FINaNCIal INdICaTORs - (TIMEs)

2011

2012

Net debt / EBITDA (US$)

Interest coverage (US$)

Total liabilities / Capital

1.5

8.7

2.3

0.8

6.2

1.1

(1) Net Debt = Current Debt plus Non-Current Debt excluding debt issuance costs, plus accrued Interest Payable less (Cash and
Cash Equivalents plus Restricted Cash and Cash Equivalents).

2012 hIghlIghTs

Initial public Offering of shares
On April 26, 2012, the Company concluded an Initial Public Offering of Shares in Mexico and a
Private Offering of Shares in international markets. A total of 379,298,220 shares (including the
overallotment option) were issued at an offering price of $27.50 per share, resulting in resources
amounting to $10,431 million. Because of its high level of capitalization and trading volume, the
Mexican Stock Exchange included Alpek in its Stock Market Index (IPC) as of September 3, 2012.

Issue of a us$650 million 144a/Reg. s bond
On November 20, 2012, the Company concluded an issue of Senior Notes for a nominal amount
of US$650 million with a single maturity in 2022. The interest on the Senior Notes will be paid
every six months at a rate of 4.5% annually starting on May 20, 2013. The Senior Notes were
placed through a private issue in accordance with Rule 144A, Regulation S of the 1933 Securities
Act of the United States of America. The net resources obtained from the issue of Senior Notes
were mainly used to prepay the debt of certain of the Company’s subsidiaries.

Cogeneration project
In 2012, ground was broken for the construction of an electricity and steam cogeneration project
in which the Company plans to invest approximately US$130 million through its subsidiary Grupo
Petrotemex, S.A. de C.V. The new plant will generate approximately 95 megawatts of electricity,
as well as steam, to cover the requirements of the PTA-PET complex in Cosoleacaque, Veracruz.

Tender Offer
On August 13, 2012, Grupo Petrotemex made a Tender Offer for approximately US$154 million
of the principal amount of the 144A/Reg. S Senior Notes it had issued in 2009. As of December
31, 2012, a balance of approximately US$121 million with a single maturity in 2014 remained. In
addition, Grupo Petrotemex, S.A. de C.V. obtained the approval of the majority of the holders of
its Senior Notes to amend certain related contractual conditions.

dividends
The Ordinary Stockholders’ Assembly of August 30, 2012 approved the payment of Alpek’s first
dividend as a publicly traded company. The total amount of the dividend was $911 million,
equivalent to $0.43 pesos per share.

ALPEk, S. A. B. DE C. V. AND SUBSIDIARIES

Report of
the Independent Auditors

Monterrey, N. L., February 1, 2013

TO ThE sTOCKhOldERs’ MEETINg OF alpEK, s. a. b. dE C. V.

We have audited the accompanying consolidated and combined financial statements of Alpek, S. A. B. de C. V.
and subsidiaries, which comprise the consolidated and combined balance sheets as of December 31, 2012 and
2011, and January 1, 2011, and the consolidated and combined statements of income, comprehensive income,
changes in stockholders’ equity and cash flows for the years ended December 31, 2012 and 2011, and a summary
of significant accounting policies and other explanatory notes.

Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated and combined
financial statements in accordance with International Financial Reporting Standards (IFRS, see Note 3), and for
such internal control as Management determines is necessary to enable the preparation of consolidated and
combined financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated and combined financial statements based on
our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards
require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
about whether the consolidated and combined financial statements are free from material misstatement.

An audit consists of examining, on a test basis, evidence supporting the figures and disclosures in the consolidated
and combined financial statements. The procedures selected depend on the auditor’s judgment, including
the assessment of the risks of material misstatement of the consolidated and combined financial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant
to the entity’s preparation and fair presentation of the consolidated and combined 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 entity’s internal control. An audit also includes evaluating the appropriateness
of the accounting policies used and the reasonableness of accounting estimates made by Management, as well
as evaluating the overall presentation of the consolidated and combined financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.

Opinion
In our opinion, the accompanying consolidated and combined financial statements present fairly, in all material
respects, the consolidated and combined financial position of Alpek, S. A. B. de C. V. and subsidiaries as of
December 31, 2012 and 2011, and January 1, 2011, and their financial performance and their cash flows for the
years ended December 31, 2012 and 2011, in accordance with International Financial Reporting Standards (IFRS).

PricewaterhouseCoopers, S. C.

héCTOR RábagO saldíVaR
Audit Partner

27
27

Consolidated and
Combined Balance Sheets

As of December 31, 2012 and 2011 and January 1, 2011

(In thousands of Mexican pesos)

assets
Current Assets:
Cash and cash equivalents
Restricted cash and cash equivalents
Trade and other receivables, net
Inventories
Derivative financial instruments
Other current assets
Total current assets

Non-current Assets:
Derivative financial instruments
Property, plant and equipment, net
Goodwill and intangible assets, net
Deferred income tax
Other non-current assets
Total non-current assets

Note

December 31,
2012

December 31,
2011

January 1,
2011

6
7
8
11
20
9

20
12
13
19
14

6,654,561
2,992
13,368,995
11,582,045
107,297
243,991
31,959,881

3,584,287
1,925
13,281,161
12,320,163
49,450
231,295
29,468,281

3,231,935
283,647
9,262,717
6,580,709
207,100
186,594
19,752,702

-
26,695,410
2,243,495
504,613
292,774
29,736,292

26,630
28,879,082
2,549,420
939,983
289,561
32,684,676

104,720
22,125,158
188,355
706,139
137,626
23,261,998

Total Assets

61,696,173

Ps 62,152,957

43,014,700

The accompanying notes are an integral part of these consolidated and combined financial statements.

JOsé dE JEsús ValdEz sIMaNCas
Chief Executive Officer

Raúl MIllaREs NEyRa
Chief Financial Officer

Alpek, S. A. B. de C. V. And SuBSidiArieS

liability and Equity
liabilities
Current liabilities:
Current debt
Trade and other payables
Derivative financial instruments
Income tax payable
Other current liabilities
Total current liabilities
Non-current liabilities:
Non-current debt
Derivative financial instruments
Deferred income tax
Employees’ benefits
Total non-current liabilities
Total Liability
Equity
Controlling portion:
Capital stock
Share premium
Retained earnings
Other reserves
Stockholders’ equity controlling portion
Non-controlling portion
Total Equity
Total Liabilities and Equity

Note

December 31,
2012

December 31,
2011

January 1,
2011

17
16
20

17
20
19
18

22
22
22
22

500,641
9,696,234
287,510
101,807
1,462,261
12,048,453

13,939,767
208,218
4,718,445
1,130,128
19,996,558
32,045,011

2,141,974
13,218,369
438,741
301,293
2,578,872
18,679,249

17,544,786
743,063
5,125,673
1,261,062
24,674,584
43,353,833

6,051,880
9,071,074
11,006,758
50,264
26,179,976
3,471,186
29,651,162
61,696,173

4,968,187
-
9,139,157
1,147,204
15,254,548
3,544,576
18,799,124
Ps 62,152,957

1,428,999
7,699,308
88,418
279,849
1,696,129
11,192,703

7,786,884
1,150,668
4,638,388
572,432
14,148,372
25,341,075

2,917,204
-
11,617,447
49,584
14,584,235
3,089,390
17,673,625
43,014,700

Alpek, S. A. B. de C. V. And SuBSidiArieS

Consolidated and
Combined Statements of Income

For the years ended December 31, 2012 and 2011

(In thousands of Mexican pesos)

Net sales
Cost of sales
Gross profit
Selling expenses
Administrative expenses
Other income (expenses), net
Operating profit
Financial income (including foreign exchange gain)
Financial expenses (including foreign exchange loss)
Comprehensive financing expense, net
Share of losses of associates
Profit before income tax
Income tax
Profit for the year

Profit attributable to:
Controlling portion
Non-controlling portion

Basic and diluted earnings per share (in pesos)

Note

23
23
24

25
25

2012
96,163,456
(86,766,710)
9,396,746
(1,072,461)
(1,158,708)
310,836
7,476,413
565,716
(1,896,979)
(1,331,263)
(39,055)
6,106,095
(1,723,293)
4,382,802

3,662,549
720,253
4,382,802

2011
90,666,561
(80,653,169)
10,013,392
(972,751)
(1,126,593)
(325,482)
7,588,566
224,508
(1,414,731)
(1,190,223)
(22,965)
6,375,378
(1,947,625)
4,427,753

3,899,342
528,411
4,427,753

1.83

2.24

Weighted average of outstanding shares (in thousands)

1,996,475

1,738,865

The accompanying notes are an integral part of these consolidated and combined financial statements.

JOsé dE JEsús ValdEz sIMaNCas
Chief Executive Officer

Raúl MIllaREs NEyRa
Chief Financial Officer

Alpek, S. A. B. de C. V. And SuBSidiArieS

Consolidated and Combined
Statements of Comprehensive Income

For the years ended December 31, 2012 and 2011

(In thousands of Mexican pesos)

Profit for the year

Other comprehensive income for the year, net of taxes:

Effect of derivative financial instruments
designated as cash flows hedging
Actuarial losses of labor obligations
Translation effect of foreign entities

Note

20
18
3c

2012
4,382,802

2011
4,427,753

64,971
(62,153)
(1,406,694)

(239,535)
(242,128)
1,716,956

Total items of the comprehensive income for the year, net of tax

(1,403,876)

1,235,293

Total comprehensive income for the year

2,978,926

5,663,046

Attributable to:
Controlling portion
Non-controlling portion
Comprehensive income for the year

2,504,925
474,001
2,978,926

4,754,154
908,892
5,663,046

The accompanying notes are an integral part of these consolidated and combined financial statements.

JOsé dE JEsús ValdEz sIMaNCas
Chief Executive Officer

Raúl MIllaREs NEyRa
Chief Financial Officer

Alpek, S. A. B. de C. V. And SuBSidiArieS

Consolidated and Combined
Statements of Changes in Equity

For the years ended December 31, 2012 and 2011

(In thousands of Mexican pesos)

Balance at January 1, 2011
Profit for the year
Other comprehensive income for the period
Total comprehensive income for the period
Dividends declared

Corporate Reorganization (Note 1):
Initial capital contribution
Increase in capital stock
Decrease in Alpek combined stockholders’ equity
Corporate reorganization net effect
Balance at December 31, 2011

Profit for the year
Other comprehensive income for the period
Total comprehensive income for the period
Other
Dividends declared
Increase in capital stock
Movements in non-controlling portion
Balance at December 31, 2012

Note

Capital
stock
2,917,204

Share
premium
-

Other reserves

Total attributable

to controlling

portion

11,617,447

49,584

14,584,235

3,089,390

17,673,625

1
1
1
1

22
22
22

50
4,968,137
(2,917,204)

4,968,187

1,083,693

9,071,074

6,051,880

9,071,074

11,006,758

50,264

26,179,976

3,471,186

29,651,162

Retained

earnings

3,899,342

(242,808)

3,656,534

(1,225,133)

(12,081,574)

7,171,883

9,139,157

3,662,549

(60,684)

3,601,865

16,167

(1,692,253)

(58,178)

1,097,620

1,147,204

(1,096,940)

3,899,342

854,812

4,754,154

(1,225,133)

4,968,137

(14,998,778)

7,171,883

15,254,548

3,662,549

(1,157,624)

2,504,925

16,167

(1,692,253)

10,154,767

(58,178)

Non-

controlling

portion

528,411

380,481

908,892

(453,706)

3,544,576

720,253

(246,252)

474,001

(605,569)

58,178

Total

equity

4,427,753

1,235,293

5,663,046

(1,678,839)

4,968,137

(14,998,778)

7,171,883

18,799,124

4,382,802

(1,403,876)

2,978,926

16,167

(2,297,822)

10,154,767

The accompanying notes are an integral part of these consolidated and combined financial statements.

JOsé dE JEsús ValdEz sIMaNCas
Chief Executive Officer

Raúl MIllaREs NEyRa
Chief Financial Officer

Alpek, S. A. B. de C. V. And SuBSidiArieS

(In thousands of Mexican pesos)

Balance at January 1, 2011

Profit for the year

Other comprehensive income for the period

Total comprehensive income for the period

Dividends declared

Corporate Reorganization (Note 1):

Initial capital contribution

Increase in capital stock

Decrease in Alpek combined stockholders’ equity

Corporate reorganization net effect

Balance at December 31, 2011

Profit for the year

Other comprehensive income for the period

Total comprehensive income for the period

Other

Dividends declared

Increase in capital stock

Movements in non-controlling portion

Balance at December 31, 2012

4,968,137

(2,917,204)

4,968,187

Note

Capital

stock

premium

2,917,204

Retained
earnings
11,617,447
3,899,342
(242,808)
3,656,534
(1,225,133)

(12,081,574)
7,171,883
9,139,157

3,662,549
(60,684)
3,601,865
16,167
(1,692,253)

Other reserves
49,584

1,097,620
1,097,620

Total attributable
to controlling
portion
14,584,235
3,899,342
854,812
4,754,154
(1,225,133)

1,147,204

(1,096,940)
(1,096,940)

50
4,968,137
(14,998,778)
7,171,883
15,254,548

3,662,549
(1,157,624)
2,504,925
16,167
(1,692,253)
10,154,767
(58,178)
26,179,976

1,083,693

9,071,074

6,051,880

9,071,074

(58,178)
11,006,758

50,264

Non-
controlling
portion
3,089,390
528,411
380,481
908,892
(453,706)

-
-
-
-
3,544,576

720,253
(246,252)
474,001
-
(605,569)
-
58,178
3,471,186

Total
equity
17,673,625
4,427,753
1,235,293
5,663,046
(1,678,839)

50
4,968,137
(14,998,778)
7,171,883
18,799,124

4,382,802
(1,403,876)
2,978,926
16,167
(2,297,822)
10,154,767
-
29,651,162

Alpek, S. A. B. de C. V. And SuBSidiArieS

Consolidated and
Combined Statements of Cash Flows

For the years ended December 31, 2012 and 2011

(In thousands of Mexican pesos)

Cash flows from operating activities

Profit before income tax
Depreciation and amortization
Impairment of property, plant and equipment
Loss (gain) on the sale of property, plant and equipment
Gain on sale on available for sale investments
Share of losses of associates
Finance result, net
Gain on changes in the fair value of cash flow hedges
Employees’ profit sharing
Subtotal
Increase in trade receivables
(Increase) decrease in trade receivables from related parties
Increase in other receivables
Decrease (increase) in inventories
(Decrease) increase in trade payables
Increase (decrease) in trade payables from related parties
Income tax paid
Employees’ profit sharing paid
Net liability for retirement obligation
Net cash generated from operating activities
Cash flows from investing activities
Interest received
Purchase of property, plant and equipment
Business acquisitions, net of cash acquired
(Acquisition) sale of shares on available for sale investments
Derivative financial instruments
Dividends received
Other
Net cash used in investing activities

Cash flows from financing activities
Proceeds from loans and debt
Payments of loans and debt
Interest paid
Dividends paid
Increase in capital stock
Payments of loans to ultimate parent company
Net cash flows (used in) provided from financing activities
Increase in cash and cash equivalents
Foreign exchange on cash and cash equivalents
Cash and cash equivalents at the beginning of the period

Cash and cash equivalents at the end of the period

Note

2012

2011

12, 13

24
14

2
1

6,106,095
2,129,374
4,798
375
-
39,055
1,273,831
(221,202)
26,979
9,359,305
(108,926)
(440,565)
(720,176)
117,939
(1,236,125)
454,186
(1,709,084)
(103,136)
(130,014)
5,483,404

137,152
(1,521,542)
-
(54,055)
(319,363)
-
(47,419)
(1,805,227)

9,888,096
(13,918,319)
(1,452,276)
(2,297,822)
10,154,767
(2,654,568)
(280,122)
3,398,055
(327,781)
3,584,287

6,375,378
1,818,776
137,897
(3,034)
(88,531)
22,965
1,095,797
(3,833)
111,175
9,466,590
(191,368)
162,786
(87,489)
(3,221,330)
1,089,932
(84,427)
(2,278,334)
(39,101)
(155,106)
4,662,153

24,668
(588,060)
(9,038,215)
88,557
(269,564)
632
341,826
(9,440,156)

9,778,060
(2,127,782)
(1,109,312)
(1,678,839)
51
-
4,862,178
84,175
268,177
3,231,935

6,654,561

3,584,287

The accompanying notes are an integral part of these consolidated and combined financial statements.

JOsé dE JEsús ValdEz sIMaNCas
Chief Executive Officer

Raúl MIllaREs NEyRa
Chief Financial Officer

Alpek, S. A. B. de C. V. And SuBSidiArieS

Notes to the Consolidated and
Combined Financial Statements

As of December 31, 2012 and 2011 and January 1, 2011

(In thousands of Mexican pesos, except where otherwise indicated)
1 - General information

Alpek, S. A. B. de C. V. (“Alpek”, or the “Company”) operates through two major business segments: polyester chain products and plastic
and chemical products. The polyester chain business segment, comprising the production of purified terephthalic acid (PTA), polyethylene
terephthalate (PET) and polyester fibers, serves the food and beverage packaging, textile and industrial filament markets. The plastics
and chemicals business segment, comprising the production of polypropylene, expandable polystyrene, polyurethanes, caprolactam,
fertilizers and other chemicals, serves a wide range of markets, including the consumer goods, food and beverage packaging, automotive,
construction, agriculture, oil industry, pharmaceutical markets and other markets.

The address of Alpek’s registered office is in Avenida Gomez Morin Sur No. 1111, Col. Carrizalejo, San Pedro Garza Garcia, Nuevo Leon,
Mexico and operates plants located in Mexico, the United States of America and Argentina.

The following notes to the financial statements when referring to “Pesos” or “Ps”, it means thousands of Mexican Pesos. When referring
to “US$” or “Dollars”, it means thousands of dollars from the United States of America.

The financial statements and other financial information presented herein were prepared on a combined basis until June 15, 2011 and on
a consolidated basis starting on June 16, 2011. Prior to June 15, 2011, Alfa operated in the petrochemical industry through several entities
grouped into a business unit informally known as “Alpek” that did not constitute a legal group or entity. However, on April 18, 2011, the
Company was incorporated as Alpek, S. A. de C. V. with an initial capital contribution of Ps 50 and on June 16, 2011, Alfa, S. A. B. de C. V.
(“Alfa”) transferred to Alpek, through direct or indirect transfers, in the following companies:

Grupo Petrotemex, S. A. de C. V. and its subsidiaries (Petrotemex) (1)
Akra Polyester, S. A. de C. V. and its subsidiary (Akra) (2)
Indelpro S. A. de C. V. and its subsidiary (Indelpro) (3)
Polioles, S. A. de C. V. and its subsidiary (Polioles) (4)
Unimor, S. A. de C. V. and its subsidiaries (Unimor) (5)
Copeq Trading Co. (Copeq)

Percentage of
direct ownership
by Alfa prior to the
Corporate
Reorganization

100%
51%
51%
50% plus 1 share
100%
100%

Percentage of
direct and indirect
ownership by Alpek
post Corporate
Reorganization

100%
100%
51%
50% plus 1 share
100%
100%

(1) Alfa Corporativo, S. A. de C. V. (a wholly owned subsidiary of Alfa) owns 2,015 shares, which represents an approximately 0.0000666% share participation out of a

total of 3,027,257,764 shares.

(2) Petrotemex owned the 49% remaining shares prior to the Corporate Reorganization. Immediately after the Corporate Reorganization, Petrotemex owned 100% and

currently it owns approximately 93.35% of the shares and BP Amoco Chemical Company owns approximately 6.65% of shares.

(3) LyondellBasell Industries Holdings, B. V. (“LyondellBasell”) owns the 49% remaining shares.

(4) BASF de México, S. A. de C. V. owns 50% of the shares, minus one share.

(5) Alfa Subsidiarias, S. A. de C. V. (a wholly owned subsidiary of Alfa) owns 50,000 shares, which represents an approximately 0.0006997% share participation out of a

total of 7,146,015,147 shares.

Alpek, S. A. B. de C. V. And SuBSidiArieS

The transfers of the shares from Alfa to Alpek were completed as follows:

• Alfa increased Alpek’s capital stock in the amount of Ps 4,968,137 through a contribution of its share ownership in Petrotemex
and Indelpro (non-cash transactions). Upon such contribution, Alpek owns 100% and 51%, of the shares of these companies,
respectively.

• Alfa sold its share ownership in Polioles, Unimor and Copeq to Alpek for Ps 2,220,504. As a result, Alpek recognized an account
payable that was settled in 2012, and it owns 50% plus 1 share, 100% and 100% of the shares of these companies, respectively (see
Note 10).

• Alpek assumed a liability of Petrotemex due to Alfa in the amount of Ps 638,254, derived from the sale that Alfa made to Petrotemex
of its ownership interest of 51% in Akra. As a result, Petrotemex owned 100% of Akra’s shares. The account payable assumed by
Alpek was settled in 2012 (see Note 10).

Prior to the completion of the Corporate Reorganization on June 16, 2011, Petrotemex, Akra, Indelpro, Polioles, Unimor and Copeq were
under common direct ownership and control of Alfa throughout the reporting periods. For comparative purposes the financial statements
prior to June 16, 2011, are prepared on a combined basis, combined with the accounts of Petrotemex, Akra, Indelpro, Polioles, Unimor
and Copeq (together the “Combined affiliates”). The Corporate Reorganization was completed on June 16, 2011; as of such date, Alpek
assumed ownership and control of the Combined Affiliates and therefore, as of June 16, 2011, our financial information is prepared on
a consolidated instead of combined basis.

The transfer of the shares from Alfa to Alpek was completed as follows:

Contribution of share ownership in Petrotemex and Indelpro
Sale of share ownership in Polioles, Unimor and Copeq
Sale of share ownership in Akra
Purchase price of the net assets acquired on June 16, 2011

Capital Stock

4,968,137
-
-
4,968,137

Total

4,968,137
2,220,504
638,254
7,826,895

Petrotemex and Indelpro combined stockholders’ equity at June 16, 2011
Unimor, Polioles, Akra and Copeq combined
stockholders’ equity at June 16, 2011
Carrying amounts values of the net assets
acquired at June 16, 2011
Corporate reorganization net effect

Capital Stock

Retained Earnings

Total

1,856,862

10,052,963

11,909,825

1,060,342

2,028,611

3,088,953

Ps
Ps

2,917,204
2,050,933

Ps
Ps

12,081,574
(12,081,574)

Ps
Ps

14,998,778
(7,171,883)

The transfer of the shares was accounted for, as a corporate reorganization of companies under common control, therefore, the net assets
transferred were accounted by Alpek at its carrying amount (after adjustments for first adoption of IFRS) according to Alfa’s consolidated
financial statements (predecessor cost basis). The difference between the historical book values of the net assets acquired and the
value of the contribution or purchase price, whichever is applicable, was considered a transaction between common shareholders and
its effects were accounted in Alpek’s equity; as a result, the book value of the net assets obtained by Alpek are equal to those Alfa had
in its consolidated financial statements where no goodwill nor fair value adjustments were recognized for financial reporting purposes.

2 - Significant events

2012
a) Debt issuance of Alpek 144A

During November 2012, Alpek, S. A. B. de C. V., (Alpek) completed an issuance of debt (“Senior Notes”) for a nominal amount of US$650
million which mature on 2022. Interest relating to the Senior Notes will be payable every six months at an annual interest rate of 4.5%
starting on May 20, 2013.

b) Public offering of Alpek’s Capital

On April 26, 2012, Alpek, S. A. de C. V. performed an initial public offering (IPO) in Mexico and a private offering of shares in international
markets (together “Global Offering”). The total amount of the Global Offering was Ps 9,082 million (330,259,322 shares at a placement
price of Ps 27.50 per share).

Alpek, S. A. B. de C. V. And SuBSidiArieS

On May 8, 2012, following the global offering, the underwriters, both in Mexico and abroad, exercised the overallotment option granted. The
total amount of the overallotment was Ps 1,349 million (49,038,898 shares at the placement price of Ps 27.50 per share) so that the total
resources Alpek obtained as a result of the Global Offering and the exercise of these options was Ps 10,155 million, net of issuance costs.

Resulting from the exercise of such public offering and overallotment options, the subscribed and paid capital of Alpek, S. A. B. de C. V. is
represented by a total of 2,118,163,635 shares class I, Series A.

c) Incorporation of a new entity

Beginning in 2012 and over the next two years, Alpek plans to invest approximately US$130 million in an electrical and steam energy
cogeneration project through its subsidiary Petrotemex. This cogeneration plant, which will supply its PTA and PET plants located in
Cosoleacaque, Veracruz, Mexico, will generate approximately 95 megawatts of electricity as well as all the steam needed to cover the
requirements of these plants. The cogeneration plant will also supply energy to other Alfa entities outside of Cosoleacaque.

In order to implement this project, on January 31, 2012, Petrotemex and its subsidiary Dak Resinas Americas Mexico, S. A. de C. V. (both
subsidiaries of Alpek) formed a corporation named Cogeneración de Energía Limpia de Cosoleacaque, S. A. de C. V. (“Cogeneradora”).
The project will increase the plant’s efficiency by ensuring a supply of low cost energy with low emissions.

As of December 31, 2012, Cogeneradora is in the pre-operating stage.

2011
a) Acquisition of Eastman (Columbia)

On January 31, 2011, through its subsidiary DAK Americas, L. L. C., Alpek acquired the Purified Terephthalic Acid (“PTA”) and Polyethylene
Terephthalate (“PET”) facilities located in the United States of America owned by Eastman Chemical Company (“Columbia Assets”).
The acquisition of the Columbia Assets complied with the requirements of a business combination. As a result of this transaction the
Company acquired a modern petrochemical complex which is comprised of three plants located in Columbia, South Carolina, with a
combined total annual capacity of 1.26 million tons to produce PTA and PET. This acquisition also included working capital, patents
and intellectual property rights relating to the IntegRexTM technology used in the production of PTA and PET. A total of 415 employees
including administrative personnel, work in these plants. The consolidated and combined financial statements include the assets and
results of operations of Columbia from February 1, 2011. This business acquisition is included in the Polyester segment (see Note 28).

The final allocation of the purchase price was determined during the fourth quarter of 2011 according to the fair value at the acquisition
date, these adjustments were recognized retrospectively from the date of acquisition to December 31, 2011 in accordance with accounting
guidance applicable under IFRS. The total consideration paid by the Company amounted to Ps 7,533,452 (US$621,572) in cash.

The purchase price allocation is as follows:

Current assets (1)
Property, plant and equipment
Intangible assets (3)
Current liabilities (2)
Goodwill

US$ 226,123
271,196
156,300
(36,410)
4,363

US$ 621,572 (4)

(1) Current assets mainly consist of accounts receivable and inventories amounting to US$121,799 and US$104,207, respectively.

(2) Current liabilities mainly consist of amounts payable to suppliers amounting to US$36,287.

(3) The information, classification and percentage of amortization are part of the assets described in Note 13.

(4) The purchase price allocation is presented in US dollars because that is the functional and recording currency of the subsidiary acquired, the exchange rate at the

date of the transaction was Ps 12.12 pesos by dollar. Additionally, in Note 3.c the main exchange rates used in the translation processes are shown.

The goodwill is comprised primarily of the advantageous global market position obtained through the expanded capabilities of the
Company’s asset base. The registered goodwill is not deductible for tax purposes.

The acquisition was funded through a syndicated credit loan with several banks and HSBC Securities (USA) Inc. and Credit Suisse
Securities (USA) L. L. C. as Administrative Agent, for a total of US$600,000. The loan agreement was signed on December 16, 2010 and
fully disbursed on January 31, 2011.

The value of the acquired receivables approximates their fair value due to their short maturities. The receivables are expected to be
recovered in the short term.

Alpek, S. A. B. de C. V. And SuBSidiArieS

No contingent liability to be registered has arisen from this acquisition and there is not any contingent agreement. The Company is not
responsible for environmental liabilities except for those that may have originated from the acquisition date.

Costs related to the acquisition were Ps 77,589 (US$ 6,401) and were recognized in the income statement in the item of other expenses.

Revenue contributed by Columbia Assets included in the consolidated and combined income statement from the date of acquisition to
December 31, 2011 was Ps 12,995 million (US$ 1,046 million).

This transaction corresponds to an acquisition of assets, therefore the Company was unable to get financial information from the
counterparty corresponding to these assets prior to the date of the acquisition to determine the amount of annual revenue and net
income as if the acquisition had taken place on January 1, 2011.

b) Acquisition of Wellman

On August 31, 2011, Alpek acquired through its subsidiary DAK Americas, L. L. C. 100% shares of Wellman, Inc. (“Wellman”). As a
result of this transaction, Alpek acquired a plant located in Bay St. Louis, Mississippi, United States of America with an annual production
capacity of 430,000 tons of PET. The plant employs 165 persons. The consolidated financial statements include the financial information
of Wellman from September 1, 2011, this business acquisition is included in the Polyester segment (see Note 28).

The final allocation of the purchase price was determined during the fourth quarter of 2011 according to the fair value at the acquisition
date; these adjustments were recognized retrospectively from the date of acquisition to December 31, 2011 in accordance with accounting
guidance applicable under IFRS. The total consideration paid by the Company amounted to Ps 1,535,589 (US$ 123,044) in cash.

The purchase price allocation is as follows:

Current assets (1)
Property, plant and equipment
Intangible assets (3)
Other assets
Current liabilities (2)
Provision for labor obligations
Other non-current liabilities
Goodwill

US$

89,731
110,728
7,130
11,796
(44,617)
(27,900)
(38,238)
14,414
123,044 (4)

(1) Current assets consist of cash and cash equivalents of US$1,402, accounts receivable of US$56,414 and inventories of US$31,915.

(2) Current liabilities consist of amount payable to suppliers and other accounts payable amounting to US$39,460 and US$5,157, respectively.

(3) The information, classification and percentage of amortization are part of the assets described in Note 13.

(4) The purchase price allocation is presented in US dollars because that is the functional and recording currency of the subsidiary acquired, the exchange rate at the

date of the transaction was $12.48 pesos by dollar. Additionally, in Note 3.c the main exchange rates used in the translation processes are shown.

The value of the acquired receivables approximates their fair value due to their short maturities. The receivables are expected to be
recovered in the short term.

Costs related to the acquisition were Ps 30,760 (US$ 2,464) and were recognized in the income statement in the item of other expenses.

Revenue contributed by Wellman Mississippi included in the consolidated income statement from the date of acquisition to December 31,
2011 was Ps 1,858 million (US$ 149 million).

At the date of issuance of these financial statements, Alpek was unable to obtain the audited financial information before the date of the
acquisition under the accounting standards used by Alpek in order to determine the amount of annual revenue and net income as if the
acquisition had taken place on January 1, 2011.

Alpek, S. A. B. de C. V. And SuBSidiArieS

3 - Summary of significant accounting policies

These consolidated and combined financial statements and notes have been approved for issuance on February 1, 2013, by the officers
with legal power to sign at the bottom of the basic financial statements and accompanying notes.

Following is a summary of the most significant accounting policies followed by the Company and its subsidiaries, which have been
applied on a consistent basis in the preparation of their financial information for the periods presented, unless otherwise indicated:

a) Basis for preparation

The consolidated and combined financial statements of Alpek S. A. B. de C. V. and subsidiaries have been prepared in accordance with
the International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”). The IFRS
include all the effective International Accounting Standards (“IAS”), and the related interpretations issued by the International Financial
Reporting Interpretations Committee (“IFRIC”), including those issued previously by the Standing Interpretations Committee (“SIC”).

In accordance with the amendments to the regulations for Public Companies and Other Participants of the Mexicans Securities Market,
issued by the National Banking and Securities Commission (“Comisión Nacional Bancaria y de Valores”) (“CNBV”) on January 27, 2009,
the Company is required to prepare its financial statements starting from 2012, using the IFRS accounting policy framework.

For comparison purposes, the consolidated and combined financial statements as of December 31, 2011 and for the year then ended, and
the consolidated and combined balance sheet as of January 1, 2011 have been prepared in accordance with IFRS.

The Company changed its accounting policies from Mexican Financial Reporting Standards (“MFRS”) to comply with IFRS as of January
1, 2012. The transition from MFRS to IFRS has been registered in accordance with IFRS 1, setting January 1, 2011 as the transition date.
Even though Alpek was formed until June 16, 2011, the transition date corresponds to the transition date of the combined entities that
were previously consolidated in Alfa, who has also adopted IFRS starting from January 1, 2012. The reconciliation of the effects of the
transition from MFRS to IFRS is disclosed in Note 30 on the consolidated and combined financial statements.

The consolidated and combined financial statements have been prepared under the historical cost basis, except for the exemptions
applied for the Company disclosed in Note 30 and for the cash flow hedging financial instruments measured at fair value, and the
financial assets at fair value through profit or loss and available for sale financial assets.

The preparation of the consolidated and combined financial statements requires the use of certain critical accounting estimates. It also
requires Management to exercise its judgment in the process of applying the Company’s accounting policies. The areas involving a higher
degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated and combined financial
statements are disclosed in Note 5.

b) Consolidation
i. Subsidiaries

Subsidiaries are all entities over which the Company has the power to govern the financial and operating policies generally accompanying
a shareholding of more than one half of the voting rights. When the interest of the Company in a subsidiary is less than 100%, the
interest related to the external shareholders is reflected as non-controlling portion.

Subsidiaries are fully consolidated from the date on which control is transferred to the Company, and until the date that control ceases.

The Company applies the acquisition method to account for business combinations. The Company defines a business combination as
a transaction in which the Company obtains control of a business, which is defined as the application of inputs and processes that
produce, or have the ability to produce products that have the ability to provide a return in the form of dividends, lower costs or other
economic benefits directly to the investors.

The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and
the equity interests issued by the Company. The consideration transferred includes the fair value of any asset or liability resulting from
a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the acquisition date. The Company recognizes any non-controlling portion in
the acquiree on an acquisition -by-acquisition basis, either at fair value or at the non-controlling portion’s proportionate share of the
recognized amounts of acquiree’s identifiable net assets.

The Company applies predecessor accounting for business combinations of an entity under common control. This consists of
incorporating the carrying amounts of the acquired entity, which includes any goodwill recorded at the consolidated level in respect
of the acquired entity. Any difference between the carrying amounts of the net assets acquired at a subsidiary level and their carrying
amounts at the Company level are recognized in equity.

Alpek, S. A. B. de C. V. And SuBSidiArieSAcquisition-related costs are expensed as incurred.

Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of non-controlling
portion over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net
assets of the subsidiary acquired, the difference is recognized in the consolidated statement of income.

Inter-company transactions and balances, and unrealized gains between group companies are eliminated in the preparation of
the consolidated and combined financial statements. Unrealized losses are eliminated unless the transaction provides evidence of
impairment in the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with
the policies adopted by the Company.

At December 31, 2012, the main subsidiaries that comprise the consolidation of the Company were as follows:

Alpek, S. A. B. de C. V. (Holding)

Grupo Petrotemex, S. A. de C. V.
DAK Americas, L. L. C.
Dak Resinas Americas México, S. A. de C. V.
DAK Americas Exterior, S. L. (Holding)
DAK Americas Argentina, S. A.
Tereftalatos Mexicanos, S. A. de C. V.
Akra Polyester, S. A. de C. V. (2)
Indelpro, S. A. de C. V.
Polioles, S. A. de C. V.
Univex, S. A.

Country (1)

Percentage of

Ownership

USA

Spain
Argentina

100

100
100
100

100

91
93

51
50
100

Functional

currency

Mexican Pesos
US Dollar
US Dollar
US Dollar
Euro
Argentinean peso
US Dollar
US Dollar
US Dollar
US Dollar
Mexican Pesos

(1) Companies incorporated in Mexico, except were otherwise indicated.

(2) At September 1, 2012, Productora de Tereftalatos de Altamira, S. A. de C. V. (“Petal”), merged into Akra Polyester, S. A. de C. V. Prior to the merger, Grupo
Petrotemex (“Petrotemex”) owned 100% of the shares of Akra and 91% of the shares of Petal and BP Amoco Chemical Company (“BP Amoco”) the
remaining 9%. After the merge, Petrotemex owns 93.35% of the shares of Akra and BP Amoco the remaining 6.65%.

ii. Absorption (dilution) of control in subsidiaries

The effect of absorption (dilution) of control in subsidiaries companies, reflecting an increase or decrease in the percentage of control,
is recorded in stockholders’ equity, directly in the retained earnings account, in the period in which the transactions that cause such
effects occur. The effect of absorption (dilution) of control is determined by comparing the book value of the investment in shares
based on the equity before the absorption (dilution) of control against the book value after the relevant event. In the event of a loss
of control the related effect is included in income.

iii. Sale or disposal of subsidiaries

When the Company ceases to have control, any retained interest in the entity is re-measured to its fair value at the date when control is
lost, and the change in its carrying amount is recognized in profit or loss. The fair value is the initial carrying amount for the purposes of
subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously
recognized in other comprehensive income in respect of that entity are accounted for as if the Company had directly disposed of the
related assets or liabilities. This may mean that amounts previously recognized in other comprehensive income are reclassified to profit
or loss.

iv. Associates

Associates are all entities over which the Company has significant influence but not control, generally accompanying a shareholding
of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting
and recognized initially at cost. The Company’s investment in associates includes goodwill identified on acquisition, net of any accrued
impairment loss.

If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts
previously recognized in other comprehensive income is reclassified to profit or loss where appropriate.

The Company’s share of post-acquisition profit or loss is recognized in the income statement, and its share of post acquisition
movements in other comprehensive income is recognized in other comprehensive income. The accrued movements after the acquisition
will be adjusted against the carrying value of the investment. When the Company’s share of losses in an associate equals or exceeds
its interest in the associate, including any other unsecured receivables, the Company does not recognize further losses, unless it has
incurred legal or constructive obligations or made payments on behalf of the associate.

Alpek, S. A. B. de C. V. And SuBSidiArieS

The Company assesses at each reporting date whether there is any objective evidence that the investment in the associate is impaired.
If this is the case, the Company calculates the amount of impairment as the difference between the recoverable amount of the associate
and its carrying value and recognizes it in ‘share of loss/profit of associates’ in the income statement.

Unrealized gains on transactions between the Company and its associates are eliminated in function of the interest in them. Unrealized
losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates
have been changed where necessary to ensure consistency with the policies adopted by the Company. When the Company ceases to
have significant influence over an associate, any difference between the fair value and the retained interest is recognized in the income
statement, including any consideration received for the disposal of part of the interest and the carrying amount of the investment.

c) Foreign currency translation

i. Functional and presentation currency

Items included in the financial statements of each of the Company’s entities are measured using the currency of the primary economic
environment in which the entity operates (“the functional currency”). The consolidated and combined financial statements are
presented in Mexican Pesos, which is the Company’s presentation currency.

ii. Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at closing date exchange rates of monetary assets and liabilities denominated in foreign currencies
are recognized in the income statement, except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gain and losses resulted from changes in the fair value of monetary financial assets and liabilities denominated
in a foreign currency are recognized in the consolidated income statement, except when the item has been designated as cash flow
hedging or net investment hedge.

Translation differences on monetary financial assets and liabilities classified as fair value through profit or loss are recognized in the
consolidated income statement as part of the fair value gain or loss. Translation differences on non-monetary financial assets classified
as available for sale are included in other comprehensive income.

iii. Consolidation of foreign subsidiaries

Inclusion of subsidiaries with a functional currency different from its transaction currency

The financial statements of foreign subsidiaries with a transaction currency different than the functional currency were converted to
the functional currency in accordance with the following procedures:

a. The balances of monetary assets and liabilities expressed in the transaction currency were converted using the exchange rates at

closing period.

b. For non-monetary assets and liabilities and stockholders’ equity which were already converted to the functional currency the
changes during the period were added, the changes were converted using the historical exchange rate. In the case of changes
in the non-monetary items recorded at their fair value, occurred during the period expressed at the transaction currency, were
converted using the actual exchange rates as of the date in which such fair values were determined.

c. Revenues, costs and expenses expressed in the transaction currency were translated using historical exchange rates at the date
the transactions occurred and were recorded in the statement of income, except if the amounts related to nonmonetary items, in
which case the historical exchange rates related to the non-monetary items were used.

d. The differences in changes originated from the conversion of the transaction currency to the functional currency were recorded as

income or expense in the income statement in the period in which they were originated.

Inclusion of subsidiaries with a functional currency different from its presentation currency

The results and financial position of all the company entities (none of which has the currency of a hyper-inflationary economy) that
have a functional currency different from the presentation currency are translated into the presentation currency as follows:

a. Assets and liabilities at December 31, 2012 and 2011 and January 1, 2011 were translated at the closing exchange rates of

Ps 13.01, Ps 13.98 and to Ps 12.36 to U.S. dollars, respectively.

Alpek, S. A. B. de C. V. And SuBSidiArieSb. The equity of each statement of financial position is presented translated at its historical rate.

c. Income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable
approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are
translated at the rate on the dates of the transactions), which amounted Ps 13.21 and Ps 12.42 for the years ended December 31,
2012 and 2011, respectively.

d. All resulting translation adjustments are recognized in other comprehensive income.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign

entity and translated at the closing rate. Translation adjustments arising are recognized in equity.

d) Cash and cash equivalents

Cash and cash equivalents includes cash in hand, deposits held at call with banks and other short-term highly liquid investments with
original maturities of three months or less and bank overdrafts, all of these are subject to a low significant risk in changes in value. Bank
overdrafts are presented as other current liabilities.

e) Restricted cash and cash equivalents

Cash and cash equivalents which restrictions originate to not meet the definition of cash and cash equivalents described above, are
presented in a separate line in the statement of financial position and are excluded from cash and cash equivalents in the statement of
cash flow.

f) Financial instruments
Financial assets
The Company classifies its financial assets in the following categories: at fair value through profit or loss, loans and receivables, held to
maturity investments and available for sale investments. The classification depends on the purpose for which the financial assets were
acquired. Management determines the classification of its financial assets at initial recognition. Regular purchases and sales of financial
assets are recognized on the settlement date.

Financial assets are derecognized when the rights to receive cash flows from the investments have expired or have been transferred and
the Company has transferred substantially all risks and rewards of ownership and the control of the financial asset.

i. Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category
if acquired principally for the purpose of selling in the short term. Derivatives are also categorized as held for trading unless they are
designated as hedges.

Financial assets carried at fair value through profit or loss, are initially recognized at fair value, and transaction costs are expensed in the
income statement. Gains or losses arising from changes in the fair value of the financial assets at fair value through profit or loss category
are presented in the income statement in the period in which they arise.

ii. Loans and trade receivables

Trade receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They
are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as
non-current assets.

Loans and trade receivables are measured initially at fair value, plus directly attributable transaction costs, and subsequently at amortized
cost. When circumstances occur that indicate that the amounts receivable will not be collected by the amounts originally agreed or will
be in a different period, the trade receivables are impaired.

iii. Held to maturity investments

If the Company has demonstrable intention and ability to hold debt securities to maturity, they are classified as held to maturity. Assets
in this category are classified as current assets if expected to be settled within the next 12 months, otherwise are classified as noncurrent.
Initially, are recognized at fair value plus any directly attributable transaction costs, are subsequently are measured at amortized cost
using the effective interest method. Investments held to maturity are recognized or derecognized on the day they are transferred to, or
from the Company.

Alpek, S. A. B. de C. V. And SuBSidiArieSiv. Financial assets available for sale

Available for sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other
categories. They are included in non-current assets unless the investment matures in a period less than 12 months or Management
intends to dispose of it within the following 12 months after the date of the balance sheet.

Available for sale financial assets are recognized initially at its fair value plus any directly attributable transaction costs. Subsequently,
these assets are measured at its fair value (unless it cannot be measured by its price in an active market and the fair value cannot be
measured reliably, in which case they are recognized at cost less impairment).

Changes in the fair value of monetary and non-monetary financial assets classified as available for sale are recognized in other
comprehensive income.

When securities classified as available for sale are sold or impaired, the accumulated fair value adjustments recognized in equity are
included in the income statement.

Financial liabilities
Financial liabilities that are not derivatives are initially recognized at fair value and are subsequently measured at amortized cost using
the effective interest method. Liabilities in this category are classified as current liabilities if are expected to be settled within the next
12 months; otherwise, they are classified as non-current.

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers.
Loans are initially recognized at fair value, net of transaction costs incurred. Loans are subsequently recognized at amortized cost, any
difference between the amounts received (net of transaction costs) and the settlement value is recognized in the income statement over
the term of the loan using the effective interest method.

Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to
offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.

Impairment of financial instruments
a. Assets carried at amortized cost

The Company assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial
assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective
evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that
loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be
reliably estimated.

Aspects to evaluate by the Company to determine whether there is objective evidence of impairment are:

- Significant financial difficulty of the issuer or debtor.

- Default of contract, such as late payments of interest or principal.

- Granting a concession to the issuer or debtor by the Company, as a result of financial difficulties of the issuer or debtor and that would

not being considered in other circumstances.

- There is likelihood that the issuer or debtor is declared in bankruptcy or other type of financial reorganization.

- Disappearance of an active market for the financial asset due to financial difficulties.

- Verifiable information indicates that a measurable decrease exists in the estimated future cash flows related to a group of financial
assets after initial recognition, although the decrease cannot yet be identified with the individual financial assets of the Company,
including:

(i) Adverse changes in the payment status of debtors of the group of assets.

(ii) National or local conditions that correlate with defaults of the issuers or debtors of the asset group.

Alpek, S. A. B. de C. V. And SuBSidiArieSBased in the aspects mentioned above, the Company assesses if objective evidence of impairment exists. For loans and receivables
category, if impairment exists, the amount of the loss is measured as the difference between the asset’s carrying amount and the present
value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original
effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognized in the consolidated income
statement in the line administrative expenses. If a loan or held to maturity investment has a variable interest rate, the discount rate
for measuring any impairment loss is the current effective interest rate determined under the contract. Alternatively, the Company may
measure impairment on the basis of an instrument’s fair value using an observable market price.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring
after the impairment was recognized (such as an improvement in the debtor’s credit rating), the reversal of the previously recognized
impairment loss is recognized in the consolidated income statement.

The calculations for the accounts receivables impairment are described in Note 8.

b. Assets classified as available for sale

In the case of debt financial instruments, the Company also uses the previously listed criteria to identify whether there is objective
evidence of impairment. In the case of equity financial instruments, a significant or prolonged decrease in its fair value below its cost is
also considered objective evidence of impairment.

Subsequently, in the case of financial assets available for sale, an impairment loss determined by the difference between the acquisition
cost and the current fair value of the asset, less any impairment loss previously recognized is reclassified from the accounts of other
comprehensive income and is registered in the income statement. Impairment losses recognized in the consolidated income statement on
equity instruments are not reversed through the consolidated income statement. Impairment losses recognized in the income statement
related to financial debt instruments could be reversed in subsequent years if the fair value of the asset is increased as a result of any
subsequent events.

g) Derivative financial instruments and hedging activities

All derivative financial instruments entered into and identified are classified as fair value hedges or cash flow hedges, are included in the
balance sheet as assets and/or liabilities at fair value and are measured subsequently at its fair value. The fair value is determined based
on the prices in recognized markets; when no quoted market prices are available, it is determined based on valuation techniques accepted
in the financial sector.

The fair value of financial instruments hedging derivatives is classified as a non-current asset or liability if the remaining maturity of the
hedged item is more than 12 months and as a current asset or liability if the remaining maturity of the hedged item is less than 12 months.

The changes in the fair value of derivative financial instruments are recognized in financing income or expense, except for changes in
the fair value of derivative financial instruments associated to cash flow hedging, in such case, the changes are recognized in equity.
These derivative financial instruments for hedging are entered to hedge against an existing risk and they comply with the related hedge
accounting requirements, its designation as a hedge is documented at the inception of the transaction, specifying the related objective,
initial position, risks to be hedged, type of hedge relationship, characteristics, accounting recognition and how their effectiveness will
be assessed. Fair value hedges are stated at fair value and changes in valuation are recorded in income under the same caption as the
hedged item. In the case of cash flow hedges, the effective portion is temporarily included in other comprehensive income in stockholders’
equity and is reclassified to income when the hedged item affects income; the ineffective portion is recognized immediately in income.

The Company suspends accounting for hedge transactions when the derivative instrument has expired, been cancelled or been exercised,
when it has not reached a high degree of effectiveness to offset the changes in the fair value or cash flow of the hedged item, or when
its designation as a hedge is cancelled.

When suspending accounting for hedge transactions, in the case of fair value hedges, the adjustment to the carrying amount of a hedged
item for which the effective interest method is used is amortized to income statement over the period to maturity, in the case of cash flow
hedges, the amounts accumulated in stockholders’ equity forming part of other comprehensive income, remain in stockholders’ equity
until the effect of the forecasted transaction affects income. In the case the forecasted transaction seems unlikely to occur, the gains or
losses accumulated in other comprehensive income are recognized immediately in income. When the hedge of a forecasted transaction
is effective but later does not comply with the effectiveness test, the effects accumulated in other comprehensive income in stockholders’
equity are reclassified to income in proportion as the forecasted asset or liability affects income.

Alpek, S. A. B. de C. V. And SuBSidiArieSThe derivative financial instruments were privately negotiated with various financial institutions whose strong financial condition was
supported by high ratings assigned by securities and credit risk rating agencies. The documentation used to formalize the operations
entered into was that commonly used; in general terms, it follows the “Master Agreement” generated by the “International Swaps &
Derivatives Association” (“ISDA”), and is accompanied by the annexes commonly known as “Schedule”, “Credit Support Annex” and
“Confirmation”.

The fair values of the financial derivative instruments reflected in the Company’s financial statements represent a mathematical estimate
of their fair values. The fair values are determined using models which belong to independent experts and involve the use of assumptions
based on, past and current market conditions, and future expectations at the corresponding closing date.

h) Inventories

Inventories are stated at the lower of cost and net realizable value. Cost is determined using the average cost method. The cost of finished
goods and work in progress comprises design costs, raw materials, direct labor, other direct costs and related production overheads
(based on normal operating capacity). It excludes borrowing costs. Net realizable value is the estimated selling price in the ordinary
course of business, less applicable variable selling expenses. Costs of inventories include the transfer from equity of any gains or losses
on qualifying cash flow hedges purchases of raw materials.

i) Property, plant and equipment

Items of property, plant and equipment are recognized at cost less accumulated depreciation and any accumulated impairment losses in
its value. The cost includes expenses directly attributable to the acquisition of the asset.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable
that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The
carrying amount of the replaced part is derecognized. Repairs and maintenance are charged to the income statement during the financial
period in which they are incurred. Significant improvements are depreciated over the remaining useful life of the related asset.

Depreciation is determined using the straight line method, considering each of the components of the asset separately. The useful life of
the classes of depreciable assets is as follows:

Building and constructions
Machinery and equipments
Rail road equipments
Furniture and laboratory and IT equipment

40 to 50 years
10 to 40 years
15 years
2 to 13 years

The spare parts or replacements to be used for more than one year and attributable to specific machinery are classified as property, plant
and equipment in other fixed assets.

Borrowing costs related to financing of property, plant and equipment whose acquisition or construction requires a substantial period, are
capitalized as part of the acquisition cost of such qualifying assets, until they are ready for the use to which they are intended or for its sale.

Assets classified as property, plant and equipment are subject to impairment tests when events or circumstances occur indicating that the
carrying amount of the assets may not be recoverable. An impairment loss is recognized for the amount by which the carrying amount of
the asset exceeds its recoverable amount. The recoverable amount is the higher of fair value less costs to sell and value in use.

The residual value and useful lives of the assets are reviewed at least at the end of each reporting period and, if expectations differ from
previous estimates, the changes are accounted as a change in accounting estimates.

In case that the carrying value is greater than the estimated recoverable amount, a decrease in the carrying amount of the asset is
recognized immediately to its recoverable amount.

Gains and losses on disposal of assets are determined by comparing the value of the sale with the carrying amount and are recognized
in other expense or income in the income statement.

j) Leases

The classification as finance or operating leases depends on the substance of the transaction rather than the form of the contract.

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases.
Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight
line basis over the period of the lease.

Alpek, S. A. B. de C. V. And SuBSidiArieSLeases where the Company has substantially all the risks and rewards of the property are classified as finance leases. Finance leases are
capitalized at the beginning of the lease at the lower of fair value of the leased property and the present value of the minimum lease
payments. If its determination is practical, for discounting to present value the minimum lease payments, the implicit interest rate in the
lease is used; otherwise, the incremental borrowing rate of the lessee should be used. Any initial direct cost of the lessee will be added to
the original amount recognized as an asset.

Each lease payment is allocated between the liability and finance charges until reach a constant rate in the actual amount. The
corresponding rental obligations are included in long term debt. The interest element of the finance cost is charged to the income
statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each
period. The property, plant and equipment acquired under finance leases are depreciated over the shorter of the useful life of the asset
and the lease term.

k) Intangible assets

Goodwill represents the excess of the consideration transferred over the Company’s interest in net fair value of the net identifiable assets
acquired determined at the acquisition date. Goodwill is presented in the caption of goodwill and intangible assets, and is recognized at
its cost less accumulated impairment losses, which are not reversed. Gains or losses in the disposition of an entity include the carrying
amount of the goodwill related to the entity disposed.

Intangible assets are recognized when complying with the following characteristics: the asset is identifiable, will generate future economic
benefits and the Company has control over such benefits.

Intangible assets are classified as follows:

i) Indefinite useful life.- These intangible assets are not amortized and are subject to impairment tests annually. No circumstances that

might affect their useful lives have been identified.

ii) Finite useful life.- These intangible assets are recognized at cost less the accumulated amortization and the recognized impairment
losses. These assets are amortized using the straight line method based on their estimated useful lives, determined in accordance with
the expected generation of future economic benefits, and are also subject to impairment tests, if triggering events are identified.

The estimated useful lives of the intangible assets with finite useful lives are as follows:

Development costs
Trademarks
Non-compete agreements
Customer relationships
Software and licenses
Intellectual property rights

15.5 years
10 years
10 years
6 to 7 years
3 to 7 years
20 to 25 years

Research costs are recognized in income as incurred. Expenditures on development activities are recognized as intangible assets when
such costs can be measured reliably, the product or process is technically and commercially feasible, the asset will generate potentially
future economic benefits and the Company intends to and has sufficient resources to complete the development and to use or sell the
asset. The amortization is recognized in income based on the straight line method over the estimated useful life of the asset. Development
expenditures that do not qualify for capitalization are recognized in income as incurred.

l) Impairment of non financial assets

Assets that have an indefinite useful life, for example goodwill, are not subject to depreciation or amortization and are tested annually for
impairment. Assets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the
purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-
generating units). Non financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment
at each reporting date.

m) Income taxes

The income tax reflected in the consolidated income statement, represents the tax incurred in the year, and the effects of deferred
income tax determined in each subsidiary using the asset and liability method, applying the rate established by the enacted legislation
or substantially enacted at the balance date where the Company and its subsidiaries operate and generate taxable income to the total

Alpek, S. A. B. de C. V. And SuBSidiArieStemporary differences resulting from comparing the accounting and tax bases of assets and liabilities and that are expected to apply when
the deferred tax asset is realized or deferred tax liability is settled, considering in any case, the tax loss carry forwards to be recoverable.
The effect of a change in income tax rates is recognized in income in the period in determining the exchange rate.

Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject
to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which
the temporary differences can be utilized.

Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except for deferred
income tax liability where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the
temporary difference will not reverse in the foreseeable future.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right and when the taxes are levied by the same
tax authority.

n) Employee Benefits
i. Pension plans

Defined contribution plans:
A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. The Company
has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the
benefits relating to employee service in the current and prior periods. The contributions are recognized as employee benefit expense
when the Company has the obligation of the contribution.

Defined benefit plans:
A defined benefit plans is defined as an amount of pension benefit that an employee will receive on retirement, usually dependent on
one or more factors such as age, years of service and compensation.

The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit
obligation at the end of the reporting period less the fair value of plan assets, together with adjustments for unrecognized past service
costs. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The
present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates
according to the NIC 19 that are denominated in the currency in which the benefits will be paid, and that have terms to maturity
approximating to the terms of the related pension obligation. The discount rate reflects the value of money over time but not the
actuarial or investment risk. Additionally, the discount rate does not reflect the credit risk of the entity, nor does it reflect the risk that
future experience may differ from actuarial assumptions.

Actuarial gains and losses arising from employee benefits are recognized directly in the other comprehensive income.

Past-service costs are recognized immediately in income, unless the changes to the pension plan are conditional on the employees
remaining in service for a specified period of time (the vesting period). In this case, the past service costs are amortized on a straight
line basis over the vesting period.

ii. Other post employment obligations

The Company provides health benefits after concluded the labor relationship to its retired employees. The entitlement to these benefits
is usually conditional on the employee remaining in service up to retirement age and the completion of a minimum service period.
The expected costs of these benefits are accrued over the period of employment using the same accounting methodology as used for
defined benefit pension plans.

iii. Termination benefits

Termination benefits are payable when employment is terminated by the Company before the normal retirement date, or whenever
an employee accepts voluntary redundancy in exchange for these benefits. The Company recognizes termination benefits when it
is demonstrably committed to a termination when the entity has a detailed formal plan to terminate the employment of current
employees without possibility of withdrawal. In the case of an offer made to encourage voluntary redundancy, the termination benefits
are measured based on the number of employees expected to accept the offer. Benefits falling due more than 12 months after the end
of the reporting period are discounted to their present value.

Alpek, S. A. B. de C. V. And SuBSidiArieSiv. Short term benefits

The Company provides employee benefits in the short term, which may include wages, salaries, annual compensation and bonuses
payable within 12 months. The Company recognizes undiscounted provision when it is contractually obliged or where past practice
has created an obligation.

v. Profit sharing and bonus plans

The Company recognizes a liability and an expense for bonuses and employee profit sharing when it has a legal or constructive
obligation to pay these benefits and determines the amount to be recognized based on the profit for the year after certain adjustments.

o) Provisions

Liability provisions represent a present legal obligation or constructive obligation as a result of past events where it is probable an outflow
of resources to comply with the obligation and where the amount has been reliably estimated. Provisions are not recognized for future
operating losses.

p) Shared based payments

The Company has established a payment option plan based on shares of its holding entity in favor of certain directors of the Company.
The conditions for its granting to the eligible executives include, among other things, the achievement of certain financial performance
metrics, such as the level of income achieved, continuous employment, etc. The Board of Directors has designated a Technical Committee
for the plan’s Management, which reviews the estimate of the payment of this compensation by the end of the year. Adjustments to such
estimate are charged or credited to income statement.

The fair value of the amount payable to employees in respect of share based payments which are settled in cash is recognized as an
expense with a corresponding increase in liabilities, over the period of service required. The liability is updated at each reporting date and
the settlement date. Any change in the fair value of the liability is recognized as compensation expense in the income statement.

q) Shares held in treasury

The maximum limit for the acquisition of the Company’s own shares is determined through the stockholders’ resolutions. In the case
of a repurchase of own shares, shares acquired are held in treasury and their acquisition cost is charged to stockholders’ equity at its
acquisition cost, as follows: a portion is charged to capital stock at restated theoretical value and the difference to retained earnings.
These amounts are stated at historical cost.

r) Common Stock

Common stock is classified as equity. Incremental costs directly attributable to the issuance of new common stock or options are shown
in equity as a deduction, net of tax, from the proceeds.

s) Comprehensive income

Comprehensive income is composed of net income plus other capital reserves, net of taxes, which are integrated by the effects of
translation of foreign subsidiaries, the effects of derivative financial instruments for cash flow hedges, the actuarial gains or losses, the
effects of the change in fair value of financial instruments available for sale, the participation in other comprehensive income items of
associates and other items that for specific requirements are reflected in stockholders’ equity and are not contributions, reductions and
distribution of capital.

t) Information by segments

Segment information is presented in a manner consistent with the internal reporting provided to the chief executive, who is the highest
authority in the operational decision making, resource allocation and performance assessment of the operating segments.

u) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable for the sale of goods and services in the normal course
of operations. Revenues are presented net of discounts, returns, and value added taxes, and after eliminate the intercompany sales.

Revenue is recognized when the following conditions have been satisfied:

- The risks and rewards of ownership are transferred

- The amount of revenue can be reliably measured

It is probable that future economic benefits will flow to the entity

- The Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the

goods sold

- The costs incurred or to be incurred in respect of the transaction can be measured reliably.

Alpek, S. A. B. de C. V. And SuBSidiArieSRevenue recognition criteria depend on contractual conditions with its customers. In some cases depending of the agreements with each
customer the risks and rewards of ownership are transferred when the goods are taken from customers on the plant of the Company, in
other cases the risks and rewards of ownership are transferred when the goods are delivered in the plant of the customers.

The Company bases its estimate on historical results, taking into consideration the type of customer, the type of transaction and the
specifics of each arrangement.

v) Earnings per share

Earnings (losses) per share are computed by dividing the net income (loss) by the weighted average of common shares outstanding during
the year. There are no effects arising from potentially dilutive shares.

w) Changes in accounting policy and disclosures

New pronouncements and amendments issued but not yet effective for periods starting January 1, 2012 and have not been adopted by
the company.

IFRS 7, “Financial Instruments: Disclosures”

In October 2010 the IASB amended IFRS 7, “Financial instruments: Disclosures”. The standard amends the required disclosures to
enable users of the financial statements to evaluate risk exposure related to transfers of financial assets and the effect of these risks
on the financial position of the entity. For the Company, this amendment is effective on January 1, 2013.

IAS 1, “Presentation of Financial Statements”

In June 2011 the IASB amended IAS 1, “Presentation of financial statements”. The main change resulting from this modification is
the requirement to group items presented in other comprehensive income, on the basis of whether they are potentially reclassified to
the income statement in later years. The amendments do not consider which items are presented in other comprehensive income. For
the Company, this amendment is effective on January 1, 2013.

IFRS 9, “Financial Instruments”

IFRS 9, “Financial Instruments” was issued in November 2009 and contained requirements for classification and measurement of
financial assets. Requirements for financial liabilities were included as part of IFRS 9 in October 2010. Most of the requirements
for financial liabilities were taken from IAS 39 without making any changes. However, some amendments were made to the fair
value option for financial liabilities to include own credit risk. In December 2011, the IASB made amendments to IFRS 9 to require its
application for annual periods beginning on or after January 1, 2015.

IFRS 10, “Consolidated Financial Statements”

In May 2011 the IASB issued IFRS 10, “Consolidated Financial Statements”. This standard outlines the principles for the presentation
of consolidated financial statements when an entity controls one or more entities. IFRS 10 defines the principle of control and
establishes control as the basis for determining the entities to be consolidated in the financial statements. The standard also includes
the accounting requirements for the preparation of the consolidated financial statements, as well as the requirements for application
of the principle of control. IFRS 10 replaces IAS 27, “Consolidated and separate financial statements” and SIC 12 “Consolidation
Special purpose entities” and for the Company this amendment is effective on January 1, 2013.

IFRS 11, “Joint Arrangements”

In May 2011 the IASB issued IFRS 11 “Joint Arrangements”. IFRS 11 classifies joint arrangements into two types: joint operations and
joint ventures. The entity determines the type of joint arrangement in which it participates considering its rights and obligations. Joint
operations arise where a joint operator has rights to the assets and obligations relating to the arrangement and hence accounts for
its interest in assets, liabilities, revenue and expenses. Joint ventures arise where the joint operator has rights to the net assets of the
arrangement and hence equity accounts for its interest. In a joint venture an investment is recognized and recorded using the equity
method. For the Company, IFRS 11 is effective on January 1, 2013.

IFRS 12, “Disclosure of Interest in Other Entities”

The IASB issued IFRS 12, “Disclosure of Interests in Other Entities” in May 2011. IFRS 12 requires an entity to disclose information
to evaluate the nature and risks associated with its interests in other entities, including joint arrangements, associates and special
purpose entities. For the Company, IFRS 12 is effective on January 1, 2013.

Alpek, S. A. B. de C. V. And SuBSidiArieS-

IFRS 13, “Fair Value Measurement”

In May 2011 the IASB issued IFRS 13, “Fair Value Measurements”. The objective of IFRS 13 is to provide a precise definition of fair
value and be a single source for the measurement and disclosure requirements for fair value when it is required or permitted by other
IFRSs. For the Company, IFRS 13 is effective on January 1, 2013.

IAS 19, “Employee Benefits”

In June 2011 the IASB amended IAS 19, “Employee Benefits”. The amendments eliminate the corridor method and show the
calculation of interest expense on a net basis. For the Company this amendment is effective on January 1, 2013.

IAS 27, “Separate Financial Statements”

In May 2011 the IASB amended IAS 27 under a new title “Separate Financial Statements”. This standard includes guidelines for
separate financial statements that remained in place after the control provisions were included in IFRS 10. For the Company, this
standard is effective on January 1, 2013.

IAS 28, “Investments in Associates and Joint Ventures”

In May 2011 the IASB amended IAS 28 under a new heading “Investments in Associates and Joint Ventures”. The new standard
includes requirements for joint ventures and associates for recognition in accordance with the equity method. For the Company, this
standard is effective on January 1, 2013.

The Company’s Management believes that the adoption of new standards and amendments outlined above, will have no significant
impact on its financial statements.

4 - Financial risk management

4.1 Financial risk factors
The Company’s activities expose it to a variety of financial risks: market risk (including currency risk, price risk, interest rate risk on cash
flows, and interest rate risk on fair values), credit risk and liquidity risk. The overall risk management program of the Company focuses
on the unpredictability of financial markets and seeks to minimize potential adverse effects on the financial performance of the Company.
The Company uses derivative financial instruments to hedge certain risk exposures.

The objective is to protect the financial health of the business considering the volatility associated to exchange rates and interest rates.
Additionally, by the nature of the industries in which it participates, the Company has entered into commodity prices derivative hedge.

The parent company of Alpek has a Risk Management Committee (RMC), constituted by the Committee’s Chairman, the General Director,
the Financial Director of the parent company and a top Risk Management officer of the parent company acting as technical secretary.
The RMC supervises derivative transactions proposed by the parent’s subsidiaries, in which a worst case scenario analysis surpasses
US$1,000. This committee supports both the Chairman and the President of the parent company. All new derivative transactions which
the Company propose to enter into, as well as the renewal or cancellation of derivative arrangements, are required to be approved both
by the Company and the parent company according to the following schedule of authorizations:.

Company’s Chief Executive Officer
Parent’s Risk Management Committee
Finance Committee
Parent’s Board of Directors

Maximum Possible Loss US$ millions

Individual
Transaction

1
30
100
>100

Annual
Cumulative
Transactions

5
100
300
>300

Proposed transactions must satisfy certain criteria, including that hedge should be lower than speculations, should be product of a
fundamental analysis and should be properly documented. Sensitivity analysis and other risk analyses should be performed before the
transaction is entered into.

Alpek, S. A. B. de C. V. And SuBSidiArieS

(a) Market risk

(i) Foreign exchange risk

The Company operates internationally and is exposed to foreign exchange risk, primarily with respect to Mexican Pesos and Euros.
The Company is exposed to foreign exchange risk arising from future commercial transactions in foreign currency assets and liabilities
in foreign currencies.

The respective exchange rates of the Mexican Pesos, the U.S. dollar, are very important factors for Alpek by the effect they have
on their performance. Moreover, in its determination, Alpek has no interference. Moreover, Alpek estimated that its revenues are
denominated in foreign currency, either because they come from products that are exported from Mexico, or because the products that
are manufactured and sold abroad, or because even sold in Mexico, the price of such products are set based on international prices in
foreign currencies such as the U.S. dollar.

For this reason, in the past, in times when the Mexican Peso has appreciated in real terms against other currencies such as the dollar,
Alpek profit margins have been reduced. On the other hand, when the Mexican Peso has lost value, Alpek profit margins have been
increased. However, although this factor correlation has appeared on several occasions in the close past, there is no assurance that it
will happen again if the exchange rate between the Mexican Peso and other currencies fluctuate again.

The Company participates in operations of derivative financial instruments on exchange rates with the purpose of controlling the
total comprehensive cost of their financing and the volatility associated with exchange rates. Additionally, it is important to note the
high “dollarization” of the Company’s revenues, since most of its sales are performed abroad, providing a natural hedging to the
obligations in dollars and as counterparty to their income level is affected in the event exchange rate appreciation. Based on the
exchange rate exposure, generally at December 31, 2012 and 2011, a hypothetical variation of 5% in the exchange rate MXN/USD
and holding all other variables constant, would result in an effect on the income statement by Ps 7,061 and Ps 4,579 respectively.

(ii) Price risk

In carrying out its activities, the Company depends on the supply of raw materials provided by its suppliers, both in Mexico and abroad,
among which are intermediate petrochemicals, mainly.

In recent years, the price of some inputs have observed volatility, especially those from the oil and natural gas.

In order to fix the selling prices of certain of its products, the Company has entered into agreements with certain customers. At the
same time, it has entered into transactions involving derivatives on natural gas that seek to reduce price volatility of the prices of such
input.

Additionally, it has entered into derivative financial instruments transactions to hedge purchases of certain raw materials, since these
inputs have a direct or indirect relationship with the prices of their products.

Regarding natural gas, Pemex is the only supplier in Mexico. The selling price of natural gas at first hand is determined by the price
of that product on the “spot” market of South Texas, USA, which has experienced the same volatility. For its part, the CFE is a
decentralized public company in charge of producing and distributing electricity in Mexico. Electricity rates have been influenced also
by the volatility of natural gas, as it is used to generate it.

The Company entered into various derivative agreements with various counterparties to protect the Company against increases in
prices of natural gas and other raw materials. In the case of natural gas derivatives, hedging strategies for products, were designed to
mitigate the impact of potential increases in prices. The purpose is to protect the price of volatility having positions that provide stable
cash flow expectations, and avoid the uncertainty in prices. The reference market price for natural gas is the Henry Hub is the “New
York Mercantile Exchange” (NYMEX). The average price in dollars per MMBTU for 2012 and 2011 were 2.79 and 4.04 respectively.

At December 31, 2012, the Company had hedging of natural gas prices for a portion of consumption needs expected in Mexico and
the United States. Based on the general input exposure at December 31, 2012 and 2011, and an hypothetical increase (decrease) of
10% in market prices applied to fair value and keeping all other variables constant, such as exchange rates, the increase (decrease)
would result in an immaterial effect for the year ended at December 31, 2011 and 2012 to the income statement.

Alpek, S. A. B. de C. V. And SuBSidiArieS(iii) Interest rate and cash flow risk

The interest rate risk arises from the Company’s long-term loans. Loans issued at variable rates expose the Company to interest rate
risk on cash flows that are partially offset by cash held at variable rates. Loans issued at fixed rates expose the Company to interest
rate risk at fair value.

When the objective of controlling the total comprehensive cost of its financing and the volatility of interest rates, the Company has
hired interest rate swaps to convert certain variable rate loans to fixed rates.

At December 31, 2012 and 2011, if interest rates on variable rate loans were increased or decreased by 10%, in interest expense
would change results in Ps 1,540 and Ps 6,575 respectively.

(b) Credit risk

Credit risk is managed on a group basis, except for the credit risk related to accounts receivable balances. Each subsidiary is responsible
for managing and analyzing credit risk for each of its new customers before setting the terms and conditions of payment. Credit risk is
generated from cash and cash equivalents, derivative financial instruments and deposits with banks and financial institutions, as well as
credit exposure to customers, including receivables and committed transactions. If clients are independent qualified wholesaling, these
scores are used. If there is no independent rating, risk control of the Company evaluates the creditworthiness of the customer, taking into
account their financial position, past experience and other factors.

Individual risk limits are determined based on internal and external ratings in accordance with limits set by the Board. The use of credit
risk is monitored regularly. Sales to retail customers are using cash or credit cards.

During 2012 and 2011, the credit limits were not exceeded and Management does not expect impairment losses recognized in excess
of the corresponding periods.

The impairment provision for doubtful accounts represents estimated losses resulting from the inability of customers to make required
payments. In determining the allowance for doubtful accounts, requires significant estimates. The Company performs ongoing credit
evaluations of its customers and adjusts credit limits based upon payment history and the customer’s current creditworthiness, as
determined by a review of their current credit information. In addition, the Company considers a number of factors to determine the size
and adequate time for recognition and the amount of reserves, including historical collection experience, customer base, current economic
trends and the age of the accounts receivable portfolio.

Historically, the Company has generated and expects to continue to generate positive cash flow from operations. Cash flow from
operations primarily represents inflows from net earnings (adjusted for depreciation and other non-cash items) and outflows from
increases in working capital needed to grow the business. Cash flow used in investing activities, represents investment in property and
capital equipment required for growth, as well as business acquisitions. Cash flow from financing activities is primarily related to changes
in indebtedness borrowed, to grow the business or indebtedness repaid with cash from operations or refinancing transactions as well as
dividends paid.

The Company’s principal capital needs are for working capital, capital expenditures related to maintenance, expansion and acquisitions
and debt service. The Company’s ability to fund capital needs depends on the ongoing ability to generate cash from operations, overall
capacity and terms of financing arrangements and access to the capital markets. The Company believes that future cash from operations
together with access to funds available under such financing arrangements and the capital markets will provide adequate resources to
fund foreseeable operating requirements, capital expenditures, acquisitions and new business development activities.

The table below analyzes the Company’s non-derivative financial liabilities and net settled derivative financial liabilities into relevant
maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. Derivative financial
liabilities are included in the analysis if their contractual maturities are essential for an understanding of the timing of the cash flows. The
amounts disclosed in the table are the contractual undiscounted cash flows.

Alpek, S. A. B. de C. V. And SuBSidiArieSPs

At December 31, 2012
Current portion of long-term debt
Short-term bank loans
Notes payable
Accrued interest payable
Affiliated companies
Suppliers
Other accounts payables
and accrued expenses
Debt (excluding debt issuance costs)
Senior notes (excluding
debt issuance costs)

At December 31, 2011
Current portion of long-term debt
Short-term bank loans
Notes payable
Accrued interest payable
Affiliated companies
Suppliers
Other accounts payables
and accrued expenses
Debt (excluding debt issuance costs)
Senior notes (excluding
debt issuance costs)

At January 1, 2011
Current portion of long-term debt
Short-term bank loans
Notes payable
Accrued interest payable
Affiliated companies
Suppliers
Other accounts payables
and accrued expenses
Debt (excluding debt issuance costs)
Senior notes (excluding
debt issuance costs)

Less than
1 year

Between 1
and 2 years

Between 2
and 5 years

Over
5 years

358,274
140,184
2,183
148,433
464,527
9,231,707

1,313,828
-

-
-
-
-
-
-

-
-

-
-
-
-
-
-

-
4,023,048

-
-
-
-
-
-

-
-

1,563,979

8,432,510

Less than
1 year

Between 1
and 2 years

Between 2
and 5 years

Over
5 years

491,251
1,645,698
5,025
246,259
3,602,314
9,616,055

2,332,613
-

-
-
-
-
-
-

-
2,367,732

-
8,891,851

-
2,236,592

229,650

4,072,986

Less than
1 year

Between 1
and 2 years

Between 2
and 5 years

1,181,853
247,146
-
177,698
387,772
7,311,536

1,518,431
-

-
-
-
-
-
-

-
625,254

-
1,110,903

-
1,977,136

335,407

3,803,061

Over
5 years

-
-
-
-

The Company expects to meet its obligations with the cash flows generated by its operations. Additionally, the Company has access to
credit lines with different financial institutions to meet possible requirements.

4.2 Capital Management

The Company’s objectives when managing capital are the safeguard the Company’s ability to continue as a going concern business,
so that it can continue to provide returns for shareholders and benefits for other stakeholders, and also to maintain an optimal capital
structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital
to shareholders, issue new shares or sell assets to reduce debt.

Alpek, S. A. B. de C. V. And SuBSidiArieS

The Company monitors capital based on the degree of leverage. This percentage is calculated by dividing the total liabilities by total
capital.

The total liabilities / total capital ratio (expressed in times multiple) amounts to 1.08, 2.31 and 1.43 as of December 31, 2012 and 2011
and January 1, 2011, respectively.

4.3 Estimation of Fair Value

Below is an analysis of financial instruments measured at fair value by the valuation method. Three different levels were used as presented
below:

- Level 1: Quoted prices for identical instruments in active markets.

- Level 2: Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in inactive markets, and valuations

through models where all significant inputs are observable in active markets.

- Level 3: Valuations made through techniques in which one or more of its significant data are not observable.

The following table presents the assets and liabilities that are measured at fair value at December 31, 2012:

Level 1

Level 2

Level 3

Total

Assets
Financial assets at fair value through profit or loss:
- Trading derivatives
Derivatives used for hedging
Available for sale financial assets
Total assets

Liabilities
Financial assets at fair value through profit or loss:
- Trading derivatives
Derivatives used for hedging
Total liabilities

29,494
29,645
-
59,139

5,659
42,499
-
48,158

-
-
92,208
92,208

35,153
72,144
92,208
199,505

Level 1

Level 2

Level 3

Total

240,923
-
240,923

36,000
218,805
254,805

-
-
-

276,923
218,805
495,728

The following table presents the assets and liabilities that are measured at fair value at December 31, 2011:

Level 1

Level 2

Level 3

Total

Assets
Financial assets at fair value through profit or loss:
- Trading derivatives
Derivatives used for hedging
Available for sale financial assets
Total assets

Liabilities
Financial assets at fair value through profit or loss:
- Trading derivatives
Derivatives used for hedging
Total liabilities

6,997
-
-
6,997

59,777
9,306
-
69,083

-
-
40,249
40,249

66,774
9,306
40,249
116,329

Level 1

Level 2

Level 3

Total

671,447
30,092
701,539

286,924
193,341
480,265

-
-
-

958,371
223,433
Ps 1,181,804

Alpek, S. A. B. de C. V. And SuBSidiArieS

The following table presents the assets and liabilities that are measured at fair value at January 1, 2011:

Level 1

Level 2

Level 3

Total

Assets
Financial assets at fair value through
profit or loss:
- Trading derivatives
Derivatives used for hedging
Available for sale financial assets
Total assets

Liabilities
Financial assets at fair value through
profit or loss:
- Trading derivatives
Derivatives used for hedging
Total liabilities

119,986
-
-
119,986

71,793
120,041
-
191,834

-
-
40,249
40,249

191,779
120,041
40,249
352,069

Level 1

Level 2

Level 3

Total

728,795
-
728,795

508,196
2,095
510,291

-
-
-

Ps 1,236,991
2,095
Ps 1,239,086

Level 1
The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date general. A
market is considered active if quoted prices are clearly and regularly available from an exchange, dealer, broker, industry group, pricing
service or regulatory agency, and those prices represent actual and regularly transactions market at arm. The trading price used for
financial assets held by the Company is the current bid price.

Valuation techniques and data used in the financial statements of the Company to measure fair value include quoted market prices of
ethylene, natural gas, ethane and gasoline listed on the “New York Mercantile Exchange” (NYMEX).

Level 2
The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. These valuation
techniques maximize the use of observable market data when available and relies as little as possible on estimates specific to the
Company. If all significant inputs required to measure the fair value an instrument are observable, the instrument is classified at Level 2.

Level 3
If one or more of the significant inputs not based on observable market data, the instrument is categorized in Level 3.

Specific valuation techniques used to value financial instruments include:

- Rates of market traders or quotes for similar instruments.

- The fair value of interest rate swaps is calculated as the present value of estimated future cash flows based on observable yield curves.

- The fair value of forward exchange contracts is determined using the exchange rates at the balance sheet date, with the resulting value

discounted to present value.

- Other techniques, such as the analysis of discounted cash flows, which is used to determine fair value for the remaining financial

instruments.

5 - Critical accounting estimates and judgments

The Company has identified certain key accounting estimates on which its financial condition and results of operations are dependent.
These key accounting estimates most often involve complex matters or are based on subjective judgments or decisions that require
Management to make estimates and assumptions which affected the amounts reported in these financial statements. The Company’s
estimates are based on historical information, where applicable and other assumptions that they believe are reasonable under the
circumstances.

Actual results may differ from estimates under different assumptions or conditions. In addition, estimates routinely require adjustments
based on changing circumstances and the receipt of new or more accurate information.

Alpek, S. A. B. de C. V. And SuBSidiArieS

The Company’s most critical accounting estimates under IFRS are those that require Management to make estimates and assumptions
that affect the reported amounts related to the accounting for fair value for financial instruments, valuation of non-current assets,
goodwill and other indefinite-lived intangible assets as a result of a business acquisition, deferred taxes and pension benefits.

The estimates and assumptions that have a risk of causing material adjustments to the values in the financial statements are as follows:

a) Non-current assets

The Company estimates the useful lives of long-lived assets in order to determine depreciation and amortization expense to be recorded
during any reporting period. The useful life of an asset is estimated at the time the asset is acquired and is based on historical experience
with similar assets, taking into account anticipated technological or other changes. If technological changes were to occur more rapidly
than anticipated, or in a different form than anticipated, the useful lives assigned to these assets may need to be shortened. This would
result in the recognition of increased depreciation and amortization expense in future periods. Alternatively, these types of technological
changes could result in the recognition of an impairment charge to reflect the write-down in asset’s value. The Company review assets
for impairment annually, or when events or circumstances indicate that the carrying amount may not be recoverable over the remaining
lives of the assets.

In assessing impairments, the Company uses discounted cash flows, which take into account Management’s assumptions and estimates
regarding matters that are inherently uncertain, such as estimating the remaining useful life of an asset and the possible impact that
inflation may have on its ability to generate cash flow, as well as customer growth and the appropriate discount rate.

Although the Company believes that their estimates are reasonable, different assumptions regarding such remaining useful life or future
cash flows could materially affect the valuation of its long-lived assets. The Company also evaluates the useful life used to depreciate
long-lived assets, periodically considering their operating and use conditions. As of December 31, 2012 and 2011, and January 1, 2011
there were no indicators of impairment; therefore the Company did not undertake any study to determine the value in use of such assets.

b) Basis for Consolidation and Combination

The Financial Statements include the assets, liabilities and results of all entities in which the Company has a controlling portion after
the Corporate Reorganization. The significant outstanding balances and transactions between companies have been eliminated in the
combination and consolidation. To determine control, the Company analyze whether or not it has the power to govern the strategic
financial and operating policies of the respective entity, and not only power over the portion of the equity the Company owned. As
a result of this analysis, the Company has exercised critical judgment in determining whether to combine or consolidate the financial
statements of Polioles, as applicable, where the determination of control is not straightforward. Management has reached the conclusion
that there are factors and circumstances described in the by-laws of Polioles and applicable law that allow the Company to carry out
the daily operations of Polioles and therefore to demonstrate control. The Company will continue assessing these circumstances at each
balance sheet date to determine whether or not this critical judgment will continue to be appropriate. If the Company determines that
it no longer controls Polioles, would need to be deconsolidated and accounted for under the equity method. The significant outstanding
balances and transactions between companies have been eliminated in the consolidation and combination.

c) Estimated impairment of other intangible assets with indefinite useful life

The identification and measurement of impairment to intangible assets with indefinite lives involves the estimation of fair values. These
estimates and assumptions could have a significant impact on whether or not an impairment charge is recognized and also the magnitude
of any such charge. The Company performs valuation analyses with the assistance of third parties and consider relevant internal data,
as well as other market information that is publicly available. Estimates of fair value are primarily determined using discounted cash
flows and market comparisons. These approaches use significant estimates and assumptions, including projected future cash flows
(including timing), discount rate reflecting the inherent risk in future cash flows, perpetual growth rate, determination of appropriate
market comparables and the determination of whether a premium or discount should be applied to comparables. Inherent in these
estimates and assumptions is a certain level of risk, which the Company believes has considered in their valuations. Nevertheless, if future
actual results differ from estimates, a possible impairment charge may be recognized in future periods related to the write-down of the
carrying value of other intangibles in addition to the amounts recognized previously.

Alpek, S. A. B. de C. V. And SuBSidiArieSd) Business combinations and acquisitions – purchase price allocations

For business a combination, IFRS requires that a fair value exercise is undertaken allocating the purchase price (cost) to the fair value of
the acquired identifiable assets and liabilities. Any difference between the cost of acquiring the interest and the fair value of the acquired
net assets is recognized as acquired goodwill. The fair value exercise is performed at the date of acquisition.

As a result of the nature of fair value assessments, the purchase price allocation exercise and acquisition-date fair value determinations
require subjective judgments based on a wide range of complex variables at a point in time. Management uses all available information
to make the fair value determinations.

e) Income taxes

As part of the process of preparing these financial statements, the Company is required to estimate income taxes. This process involves
estimating actual current tax exposure together with assessing temporary differences resulting from differing item treatment, such
as impairment on trade receivables, deferred assets, inventories, property, machinery and equipment, accrued expenses and tax loss
carryforwards, for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within
the balance sheet. The Company then assesses the likelihood that their deferred tax assets will be recovered.

f) Fair value of derivatives and other financial instruments

The fair value of financial instruments is determined based upon liquid market prices evidenced by exchange traded prices, broker-dealer
quotations or prices of other transactions with similarly rated counterparties. If available, quoted market prices provide the best indication
of value. If quoted market prices are not available for fixed maturity securities and derivatives, the Company discounts expected cash
flows using market interest rates commensurate with the credit quality and maturity of the investment.

Derivative financial instruments used for hedging are designated either as cash-flow hedges or fair value hedges. The changes in the fair
value of cash flow hedges are reported in other comprehensive income, while the changes in the fair value of fair value hedges (along
with the change in the fair value of the hedged item) are recorded in earnings. Fair value amounts are based on either quoted market
prices or estimated values derived utilizing dealer quotes or internally generated modeling techniques.

As market conditions change, adjustments to the fair value of these derivatives are made to reflect those conditions. In addition, hedging
effectiveness needs to be evaluated on a periodic basis and to the extent the hedge is not deemed effective, hedge accounting ceases
to be applied. Actual settlements of these derivatives will reflect the market conditions at the time and may differ significantly from the
estimated fair market value reflected on the balance sheet.

The degree of Management’s judgment involved in determining the fair value of a financial instrument is dependent upon the availability
of quoted market prices. When observable market prices and parameters do not exist, Management’s judgment is necessary to estimate
fair value, in terms of estimating the future cash flows, based on variable terms of the instruments and the credit risk and in defining the
applicable interest rate to discount those cash flows.

g) Pension Benefits

The present value of the pension obligations depends on a number of factors that are determined on an actuarial basis using a variety of
assumptions. The assumptions used in determining the cost (income) for pensions include the net discount rate. Any changes in these
assumptions will impact the carrying value of the pension obligations.

The Company determines the appropriate discount rate at the end of each year. This interest rate should be used to determine the present
value of cash outflows required to settle expected future pension obligations. In determining the appropriate discount rate, the Company
considers the discount interest rate in accordance with IAS 19 “Employee benefits” that are denominated in the currency in which the
benefits will be paid and that have terms to maturity approximating the terms of the related pension obligation.

6 - Cash and cash equivalents

Cash and cash equivalents are comprised as follows:

Cash at bank and on hand
Short term bank deposits
Cash and cash equivalents (excluding bank overdrafts)

At December 31,
2012

At December 31,
2011

1,851,076
4,803,485
6,654,561

2,967,476
616,811
3,584,287

At January 1,
2011

2,659,240
572,695
3,231,935

Alpek, S. A. B. de C. V. And SuBSidiArieS

7 - Restricted cash and cash equivalents

The Company had restricted cash approximately Ps 2,992, Ps 1,925 and Ps 283,647, at December 31, 2012 and 2011 and January 1,
2011, respectively. The balances were required to be held in escrow by the Company’s workers compensation service administrator. The
restricted cash balance is classified as a current asset on the Company’s balance sheets based on the expiration date of the restriction.

8 - Trade and other receivables, net

Trade and other receivables are comprised as follows:

Trade receivables
Provision for impairment of trade receivables
Trade receivables, net

Accounts receivables from related parties (Note 10)
Recoverable taxes
Interest receivable
Other debtors
Less: non-current portion (1)
Current portion

At December 31,
2012

10,707,247
(241,897)
10,465,350

1,292,387
517,316
27
1,386,689
(292,774)
13,368,995

At December 31,
2011

11,059,356
(248,135)
10,811,221

1,550,920
464,540
2
744,039
(289,561)
13,281,161

At January 1,
2011

7,341,813
(225,255)
7,116,558

1,497,005
150,705
-
647,274
(137,626)
9,262,717

(1) The portion of non-current receivables corresponds to trade receivable, and are presented within other non-current assets. See Note 14.

Trade and other receivables include past due but not impaired balances amounting to Ps 1,981,667, Ps 2,049,094, Ps 1,966,864 at
December 31, 2012 and 2011 and January 1, 2011, respectively.

The aging analysis of balances due from trade and other receivables not impaired is as follows:

At December 31, 2012

Past due

1 to 30
days

30 to 90
days

90 to 180
days

More than
180 days

Trade and other receivables

1,218,072

182,733

180,568

400,294

Trade and other receivables

1,237,140

209,370

115,710

486,874

At December 31, 2011

Past due

1 to 30
days

30 to 90
days

90 to 180
days

More than
180 days

Trade and other receivables

1,146,493

184,219

22,250

613,902

The movements of the provision for impairment of trade receivables are analyzed as follows:

At Januay 1, 2011

Past due

1 to 30
days

30 to 90
days

90 to 180
days

More than
180 days

Opening balance (January 1)
Provisions for impairment of trade receivables
Write-offs of trade receivables
Cancel of provision for impairment not used
Ending balance (December 31)

2012

(248,135)
(99,647)
49,110
56,775
(241,897)

2011

(225,255)
(70,061)
-
47,181
(248,135)

Alpek, S. A. B. de C. V. And SuBSidiArieS

9 - Other current assets

Prepaid expenses
Total other current assets

10 - Transactions with related parties

Related party transactions were carried out at market values.

At December 31,
2012

At December 31,
2011

Ps
Ps

243,991
243,991

Ps
Ps

231,295
231,295

Ps
Ps

At January 1,
2011

186,594
186,594

Loans granted to related parties

Loans received from related parties

December 31, 2012

Accounts
receivable

Amount

Currency

Maturity
date
DD/MM/YYYY

Interest
rate

Accounts
payable

Parent

Ps 196,094

Affiliates

227,164

Ps 310,983
69,499
4,589
52,040
319,941
13,010
13,000
579

USD 27/12/2013
USD
USD 26/06/2013
USD 26/06/2013
USD 16/12/2013
USD 16/12/2013
MXN 21/01/2013
MXN

7.33% Ps

5.15%
5.15%
5.15%
3.59%
7.30%

Maturity
date
Currency DD/MM/YYYY

Interest
rate

Amount

-
-

- Ps
-

40,700 103,586 MXN

Partners with
significant influence
over certain
subsidiaries
Total

85,488
Ps 508,746

-
Ps 783,641

320,241

-
Ps 360,941 Ps 103,586

Loans granted to related parties

December 31, 2011

Accounts
receivable

Amount

Currency

Maturity
date
DD/MM/YYYY

Interest
rate

Accounts
payable

Loans received from related parties

Maturity
date
Currency DD/MM/YYYY

Amount

Parent
Affiliates

Ps 189,776
472,400

Ps 383,909
392,951

USD
USD

28/12/12
30/12/12

7.33% Ps
7.12%

- Ps 2,908,004 (1) MXN
219,630 MXN

52,277

Partners with
significant influence
over certain
subsidiaries
Total

111,884
Ps 774,060

-
Ps 776,860

422,403
-
Ps 474,680 Ps 3,127,634

Interest
rate

4.89%
-

Alpek, S. A. B. de C. V. And SuBSidiArieS

Loans granted to related parties

Loans received from related parties

January 1, 2011

Accounts
receivable

Amount

Currency

Maturity
date
DD/MM/YYYY

Interest
rate

Accounts
payable

Amount

Maturity
date
Currency DD/MM/YYYY

Interest
rate

Parent

Ps 189,776

Affiliates

474,551

Ps 317,422
11,199
182,955
182,955
23,558
13,071
12,472

USD 29/12/2011
USD 28/08/2011
USD 23/02/2011
USD 23/08/2011
USD 23/02/2011
MXN 25/05/2011
USD 25/05/2011

7.28% Ps
7.12%
7.12%
7.12%
7.12%
5.62%
9.29%

- Ps

129,999

Partners with
significant influence
over certain
subsidiaries
Total

89,046
Ps 753,373

-
Ps 743,632

-
257,773
- Ps 387,772

(1)

Includes accounts payable to Alfa amounting to Ps 2,858,758 related to the acquisition of the shares of Polioles, Unimor, Akra and Copeq (see Note 1) and the related
accrued interest.

Sales of good and other income with related parties

year ended december 31, 2012

Finished
goods

-
321,844

1,468,410
Ps 1,790,254

Interest

23,457
25,687

-
49,144

Administrative
services

-
37,714

Leases

-
-

5,312
5,312

year ended december 31, 2011

Finished
goods

Raw
materials

-
285,789

-
23

Interest

32,279
24,529

Administrative
services

Leases

-
24,351

1,531,478
Ps 1,817,627

9,122
9,145

-
56,808

5,196
29,547

Other

-
1,807

Other

-
5,508

896
6,404

-
-

Parent
Affiliates
Partners with significant
influence over certain subsidiaries
Total

Parent
Affiliates
Partners with significant
influence over certain
subsidiaries
Total

Alpek, S. A. B. de C. V. And SuBSidiArieS

Parent
Affiliates
Partners with
significant influence
over certain subsidiaries 1,171,345
Total

Cost of sales and other expenses with related parties

year ended december 31, 2012

Parent
Affiliates
Partners with
significant
influence over
certain subsidiaries
Total

Finished
goods

Raw
materials

Interest

Administrative
services

Technical
assistance

Electricity

Leases

Other

Fees

- Ps
-

- Ps 56,362
-

14,135

Ps 122,121 Ps
125,042

-
-

Ps
-
93,323

- Ps
-

-
808

-
-

-
1,212,510
Ps 1,212,510 Ps 292,268 Ps 56,362

278,133

146,429

59,165
Ps 393,592 Ps 59,165

-
Ps 93,323

2,406
2,406 Ps

-
808

26,985
Ps 26,985

Finished
goods

Raw
materials

Interest

Administrative
services

Technical
assistance

Electricity

Leases

Other

year ended december 31, 2011

- Ps

- Ps 49,246

12,177

Ps 108,295 Ps
117,194

Ps
-
51,831

- Ps

-
1,610

Fees

-
Ps 1,171,345 Ps 307,289 Ps 49,246

295,112

135,648

55,059
Ps 361,137 Ps 55,059

-
Ps 51,831

2,259
-
2,259 Ps 1,610

21,927
Ps 21,927

For the years ended December 31, 2012, salaries and benefits received by senior officers of the Company amounted to Ps 179,858
(Ps 187,612 in 2011), comprising of base salary and law benefits and supplemented by a variable compensation program that is basically
based on the performance of the Company and by the market value of its stocks.

The Company and its subsidiaries declared that neither they have significant transactions with related parties nor conflicts of interest to
disclose.

11 - Inventories

Finished goods
Raw material and other consumables
Materials and spare parts
Work in process

At December 31,
2012

5,969,149
4,452,073
719,237
441,586
11,582,045

At December 31,
2011

6,370,557
4,848,218
658,771
442,617
12,320,163

At January 1,
2011

3,237,748
2,632,347
485,344
225,270
6,580,709

For the years ended December 31, 2012 and 2011, the cost of raw materials consumed and the changes in inventories of work in
progress and finished goods recorded in the cost of sale were Ps 86,766,710 and Ps 80,653,169, respectively.

For the years ended December 31, 2012 and 2011, the Company recognized as an expense Ps 9,260 and Ps 3,913, respectively,
corresponding to inventory that was damaged, slow-moving and obsolete.

Alpek, S. A. B. de C. V. And SuBSidiArieS

12 - Property, plant and equipment, net

At January 1, 2011
Deemed cost
Accumulated depreciation
Carrying value at January 1, 2011

For the year ended December 31, 2011
Translation adjustments
Additions
Additions due to business combinations
Disposals
Depreciation charge recognized in the year
Transfers
Balance at December 31, 2011

At December 31, 2011
Cost
Accumulated depreciation
Carrying value at December 31, 2011

For the year ended December 31, 2012
Translation adjustments
Additions
Additions due to business combinations
Disposals
Depreciation charge recognized in the year
Transfers
Balance at December 31, 2012

At December 31, 2012
Cost
Accumulated depreciation
Carrying value at December 31, 2012

Land

Buildings and
construction

Machinery and
equipment

Transportation
equipment

Construction

in progress

Other fixed

assets

Total

3,017,704
(235,809)
2,781,895

4,123,393
(1,850,804)
2,272,589

Ps 31,879,620
(16,047,193)
15,832,427

162,396
(107,009)
55,387

858,697

642,651

(667,963)

190,734

642,651

456,550

(107,075)

349,475

41,141,011

(19,015,853)

22,125,158

152,075
20,202
180,141
(17,961)
(24,005)
1,016
3,093,363

343,281
58,947
698,182
(10)
(106,040)
14,725
3,281,674

2,298,711
295,617
3,510,309
(6,305)
(1,472,254)
375,480
20,833,985

14,050
3,969
32,906
(819)
(17,645)
4,565
92,413

3,924,535
(831,172)
3,093,363

7,797,879
(4,516,205)
3,281,674

43,136,307
(22,302,322)
20,833,985

251,324
(158,911)
92,413

(96,466)
2,567

(7,406)
(11,344)
5,952
2,986,666

(207,677)
3,495

(1,389,292)
57,781

(213)
(118,710)
60,984
3,019,553

(15,306)
(1,726,550)
878,957
18,639,575

(6,650)
1,932

(175)
(22,852)
32,568
97,236

3,777,881
(791,215)
2,986,666

7,414,917
(4,395,364)
3,019,553

41,281,791
(22,642,216)
Ps 18,639,575

265,114
(167,878)
97,236

947,776

(731,766)

1,330,506

216,010

1,330,506

433,733

(27,869)

405,864

55,451,718

(28,756,308)

26,695,410

Furniture,

lab and

information

technology

equipment

26,138

34,692

25,389

(125)

(53,047)

16,989

240,770

1,058,022

(817,252)

240,770

(16,972)

2,906

(135)

(78,722)

68,163

216,010

107,914

437,374

167,672

(11,532)

(426,350)

917,729

(59,494)

1,502,862

(20)

(1,030,571)

1,330,506

34,409

20,628

20,895

(11,997)

(2,926)

8,664

419,148

529,149

(110,001)

419,148

(24,086)

42,107

(25,314)

(1,789)

(4,202)

405,864

2,976,578

871,429

4,635,494

(48,749)

(1,675,917)

(4,911)

28,879,082

57,614,945

(28,735,863)

28,879,082

(1,800,637)

1,613,650

(48,569)

(1,959,967)

11,851

26,695,410

Depreciation expense of Ps 1,942,073 and Ps 1,649,277, has been charged in cost of sales, Ps 2,306 and Ps 1,864, in selling expenses
and Ps 15,588 and Ps 24,775, in administrative expenses, for the years ended December 31, 2012 and 2011, respectively.

The Company has capitalized financing costs amounting to Ps 2,853 and Ps 2,679 for the year ended December 31, 2012 and 2011,
respectively. Financing costs were capitalized at a weighted average rate of approximately 2.26% of its loans.

Alpek, S. A. B. de C. V. And SuBSidiArieS

12 - Property, plant and equipment, net

At January 1, 2011

Deemed cost

Accumulated depreciation

Carrying value at January 1, 2011

For the year ended December 31, 2011

Translation adjustments

Additions due to business combinations

Depreciation charge recognized in the year

Additions

Disposals

Transfers

Balance at December 31, 2011

At December 31, 2011

Cost

Accumulated depreciation

Carrying value at December 31, 2011

For the year ended December 31, 2012

Translation adjustments

Additions due to business combinations

Depreciation charge recognized in the year

Additions

Disposals

Transfers

Balance at December 31, 2012

At December 31, 2012

Cost

Accumulated depreciation

Carrying value at December 31, 2012

152,075

20,202

180,141

(17,961)

(24,005)

1,016

3,093,363

343,281

58,947

698,182

(10)

(106,040)

14,725

3,281,674

2,298,711

295,617

3,510,309

(6,305)

(1,472,254)

375,480

20,833,985

3,924,535

(831,172)

3,093,363

7,797,879

(4,516,205)

3,281,674

43,136,307

(22,302,322)

20,833,985

251,324

(158,911)

92,413

(96,466)

2,567

(7,406)

(11,344)

5,952

2,986,666

(207,677)

3,495

(1,389,292)

57,781

(213)

(118,710)

60,984

3,019,553

(15,306)

(1,726,550)

878,957

18,639,575

162,396

(107,009)

55,387

14,050

3,969

32,906

(819)

(17,645)

4,565

92,413

(6,650)

1,932

(175)

(22,852)

32,568

97,236

265,114

(167,878)

97,236

Land

Buildings and

construction

Machinery and

equipment

Transportation

equipment

Furniture,
lab and
information
technology
equipment

Construction
in progress

Other fixed
assets

Total

3,017,704

4,123,393

Ps 31,879,620

(235,809)

2,781,895

(1,850,804)

2,272,589

(16,047,193)

15,832,427

858,697
(667,963)
190,734

642,651
-
642,651

456,550
(107,075)
349,475

41,141,011
(19,015,853)
22,125,158

26,138
34,692
25,389
(125)
(53,047)
16,989
240,770

1,058,022
(817,252)
240,770

(16,972)
2,906

(135)
(78,722)
68,163
216,010

107,914
437,374
167,672
(11,532)
-
(426,350)
917,729

917,729
-
917,729

(59,494)
1,502,862

(20)
-
(1,030,571)
1,330,506

34,409
20,628
20,895
(11,997)
(2,926)
8,664
419,148

529,149
(110,001)
419,148

(24,086)
42,107

(25,314)
(1,789)
(4,202)
405,864

2,976,578
871,429
4,635,494
(48,749)
(1,675,917)
(4,911)
28,879,082

57,614,945
(28,735,863)
28,879,082

(1,800,637)
1,613,650

(48,569)
(1,959,967)
11,851
26,695,410

3,777,881

(791,215)

7,414,917

(4,395,364)

41,281,791

(22,642,216)

2,986,666

3,019,553

Ps 18,639,575

947,776
(731,766)
216,010

1,330,506
-
1,330,506

433,733
(27,869)
405,864

55,451,718
(28,756,308)
26,695,410

Alpek, S. A. B. de C. V. And SuBSidiArieS

13 - Goodwill and intangible assets, net

Cost
At January 1, 2011
Amortization at January 1, 2011
At January 1, 2011
Al 1 de enero de 2011
Translation adjustments
Additions
Additions due to business combinations
At December 31, 2011
Translation adjustments
Additions
At December 31, 2012

Accumulated amortization and impairment
At January 1, 2011
Amortization
Transfers
Exchange differences
At December 31, 2011
Amortization
Transfers
Translation adjustments
At December 31, 2012

Net book value
Cost
Accumulated amortization and impairment
At December 31, 2011

Cost
Accumulated amortization and impairment
At December 31, 2012

Development
costs

Trademarks

Non-compete
agreements

274,231
(96,602)
177,629
274,231
37,040
5,092
-
316,363
(22,100)
5,284
299,547

(96,602)
(28,384)
126
(16,212)
(141,072)
(29,031)
4,539
5,024
(160,540)

316,363
(141,072)
175,291

299,548
(160,540)
139,008

381
(259)
122
381
50
-
-
431
(30)

401

(259)
(108)
-
(48)
(415)
(17)
8
22
(402)

431
(415)
16

401
(401)
-

-
-
-
-

-
65,700
65,700
(4,552)

61,148

-
(14,704)
-
(352)
(15,056)
(15,519)

1,275
(29,300)

65,700
(15,056)
50,644

61,147
(29,300)
31,847

Finite life

Customer
relationships

-
-
-
-

-
508,126
508,126
(35,217)
528
473,437

-
(28,629)
-
(657)
(29,286)
(39,176)
(256)
2,584
(66,133)

508,126
(29,285)
478,841

473,438
(66,135)
407,303

Software and

licenses

Intellectual

property rights

Goodwill

Other

Total

Indefinite life

30,822

2,946

(23,164)

7,658

30,822

3,220

34,042

(2,041)

33,415

65,417

(23,164)

(2,699)

(2,937)

(28,798)

(6,528)

(41)

1,121

(34,246)

34,042

(28,798)

5,244

65,417

(34,246)

234,185

1,440,463

1,674,648

(123,682)

7,644

1,558,610

(68,336)

(8,418)

(76,754)

(79,136)

6,524

(149,367)

1,674,648

(76,755)

1,597,893

1,558,610

(149,367)

391

236,784

237,175

(16,434)

220,741

237,175

220,741

2,946

387

983

4,316

(302)

167

4,181

4,316

4,181

308,380

(120,025)

188,355

308,380

275,273

242,859

2,014,289

2,840,801

(204,358)

47,038

2,683,483

(120,025)

(142,860)

128

(28,624)

( 291,381)

(169,407)

4,250

16,550

(439,988)

2,840,801

(291,381)

2,549,420

2,683,483

(439,988)

2,243,495

31,171

1,409,243

220,741

4,181

Amortization for the years ended December 31, 2012 and 2011 amounting to (Ps 162,198) and (Ps 139,218), has been recorded in cost
of sales, (Ps 7,071) and (Ps 193) in selling expenses and (Ps 138) and (Ps 3,449) in administrative expenses, respectively.

Research and development expenses incurred and recorded in the income statement for the years ended December 31, 2012 and 2011
were Ps 40,744 and Ps 37,294, respectively.

Management evaluates its operations in two business segments: polyester chain business and plastics and chemicals business.
Management also assesses goodwill at the operating segment level and has allocated the entire amount to the polyester segment (see
Note 28).

Alpek, S. A. B. de C. V. And SuBSidiArieS

13 - Goodwill and intangible assets, net

Development

costs

Trademarks

Non-compete

agreements

Software and
licenses

Intellectual
property rights

Goodwill

Other

Total

Indefinite life

139,008

31,847

30,822
(23,164)
7,658
30,822
3,220
-
-
34,042
(2,041)
33,415
65,417

(23,164)
(2,699)
2
(2,937)
(28,798)
(6,528)
(41)
1,121
(34,246)

34,042
(28,798)
5,244

65,417
(34,246)
31,171

-
-
-
-
234,185
-
1,440,463
1,674,648
(123,682)
7,644
1,558,610

-
(68,336)
-
(8,418)
(76,754)
(79,136)
-
6,524
(149,367)

1,674,648
(76,755)
1,597,893

1,558,610
(149,367)
1,409,243

-
-
-
-
391
236,784
-
237,175
(16,434)
-
220,741

-
-
-
-
-
-
-
-
-

2,946
-
2,946
2,946
387
983
-
4,316
(302)
167
4,181

-
-
-
-
-
-
-
-
-

237,175
-
237,175

220,741
-
220,741

4,316
-
4,316

4,181
-
4,181

308,380
(120,025)
188,355
308,380
275,273
242,859
2,014,289
2,840,801
(204,358)
47,038
2,683,483

(120,025)
(142,860)
128
(28,624)
( 291,381)
(169,407)
4,250
16,550
(439,988)

2,840,801
(291,381)
2,549,420

2,683,483
(439,988)
2,243,495

Cost

At January 1, 2011

Amortization at January 1, 2011

Additions due to business combinations

At January 1, 2011

Al 1 de enero de 2011

Translation adjustments

Additions

At December 31, 2011

Translation adjustments

Additions

At December 31, 2012

At January 1, 2011

Amortization

Transfers

Exchange differences

At December 31, 2011

Amortization

Transfers

Translation adjustments

At December 31, 2012

Net book value

Cost

Accumulated amortization and impairment

At December 31, 2011

Cost

Accumulated amortization and impairment

At December 31, 2012

65,700

(4,552)

61,148

508,126

(35,217)

528

473,437

(14,704)

(28,629)

Finite life

Customer

relationships

(657)

(29,286)

(39,176)

(256)

2,584

(66,133)

508,126

(29,285)

478,841

473,438

(66,135)

407,303

(352)

(15,056)

(15,519)

1,275

(29,300)

65,700

(15,056)

50,644

61,147

(29,300)

381

(259)

122

381

431

(30)

401

(259)

(108)

(48)

(415)

(17)

(402)

431

(415)

401

(401)

274,231

(96,602)

177,629

274,231

37,040

5,092

316,363

(22,100)

5,284

299,547

(96,602)

(28,384)

126

(16,212)

(141,072)

(29,031)

4,539

5,024

(160,540)

316,363

(141,072)

175,291

299,548

(160,540)

Alpek, S. A. B. de C. V. And SuBSidiArieS

14 - Other non-current assets

Other receivables, net
Available for sale financial assets (1)
Investment is associate (2)
Other non-current assets
Total other non-current assets

(1) Available for sale financial assets include the following:

At December
31, 2012

190,523
92,208
1,528
8,515
292,774

At December
31, 2011

195,045
40,249
42,914
11,353
289,561

At December
31, 2012

At December
31, 2011

At January
1, 2011

24,737
40,249
61,441
11,199
137,626

At January
1, 2011

Unquoted shares:
- Share investments in third parties

92,208

40,249

The movement of available for sale financial assets is the following:

Opening balance at January 1
Translation effect
Additions
Impairment
Balance as of December 31

Available for sale financial assets are denominated in the following currencies:

USD
MXN
Total

At December
31, 2012

52,040
40,168
92,208

None of the available for sale financial assets are past due or impaired.

(2) The movement of investments in associates is the following:

Balance at January 1
Share of losses
Translation effect
Other
Balance at December 31

2012

40,249
(2,015)
54,055
(81)
92,208

At December
31, 2011

-
40,249
40,249

2012

42,914
(39,055)
(2,331)
-
1,528

2011

40,249
-
-
-
40,249

At January
1, 2011

-
40,249
40,249

2011

61,441
(22,965)
5,182
(744)
42,914

The participation of the Company in the results of its main associates, as well as their assets and liabilities, are presented as follows:

Country of
Incorporation

Assets

Liabilities

Revenues

Gain
(Loss)

Interest %
held

At December 31, 2012
Terminal Petroquímica
de Altamira, S. A. de C. V.
Clear Path Recycling, L. L. C.

At December 31, 2011
Terminal Petroquímica
de Altamira, S. A. de C. V.
Clear Path Recycling, L. L. C.

México
USA

Ps
52,857
Ps 575,543

Ps
24,982
Ps 491,780

Ps
27,511
Ps 479,598

Ps
Ps

5,948
(161,232)

21.07%
25.00%

México
USA

Ps
50,185
Ps 598,297

Ps
27,329
Ps 337,452

Ps
27,674
Ps 516,417

Ps
Ps

9,603
(99,952)

21.07%
25.00%

Alpek, S. A. B. de C. V. And SuBSidiArieS

15 - Financial Instruments

a. Financial instruments by category

Financial assets:
Cash and cash equivalents
Restricted cash and cash equivalents
Trade and other receivables
excluding prepayments
Financial assets at fair value through profit or loss
Derivatives used for hedging
Financial assets available for sale

Financial liabilities:
Debt
Trade and other payables
Derivatives used for hedging
Financial liabilities at fair value through profit or loss

Accounts
receivable and
liabilities at
amortized cost

At December 31, 2012

Investments
available for
sale

Derivative
financial
instruments

Total

6,654,561
2,992

-
-

Ps 6,654,561
2,992

13,368,995
-
-
-
20,026,548

14,440,408
9,696,234
-
-
24,136,642

Accounts
receivable and
liabilities at
amortized cost

-
-
-
92,208
92,208

-
-
-
-
-

-
35,153
72,144
-
107,297

13,368,995
35,153
72,144
92,208
Ps 20,226,053

-
-
218,805
276,923
495,728

Ps 14,440,408
9,696,234
218,805
276,923
Ps 24,632,370

At December 31, 2011

Investments
available for
sale

Derivative
financial
instruments

Total

3,584,287
1,925

13,281,161
-

-
16,867,373

19,686,760
13,218,369
-
-
32,905,129

-
-

40,249
40,249

-
-
-
-
-

-
-

Ps 3,584,287
1,925

-
66,774
9,306
-
76,080

13,281,161
66,774
9,306
40,249
Ps 16,983,702

-
-
223,433
958,371
1,181,804

Ps 19,686,760
13,218,369
223,433
958,371
Ps 34,086,933

Alpek, S. A. B. de C. V. And SuBSidiArieS

Financial assets:
Cash and cash equivalents
Restricted cash and cash equivalents
Trade and other receivables excluding
prepayments
Financial assets at fair value through profit or loss
Derivatives used for hedging
Financial assets available for sale

Financial liabilities:
Debt
Trade and other payables
Derivatives used for hedging
Financial liabilities at fair value through profit or loss

Accounts

receivable and
liabilities at
amortized cost

At January 1, 2011

Investments
available for
sale

Derivative
financial
instruments

Total

3,231,935
283,647

9,262,717
-

-
12,778,299

9,215,883
7,699,308
-
-
16,915,191

-
-

40,249
40,249

-
-
-
-
-

-
-

Ps 3,231,935
283,647

-
191,779
120,041
-
311,820

9,262,717
191,779
120,041
40,249
Ps 13,130,368

-
-
2,095
1,236,991
1,239,086

Ps 9,215,883
7,699,308
2,095
1,236,991
Ps 18,154,277

b. Credit quality of financial assets
The credit quality of financial assets that are neither past due nor impaired can be assessed either by reference to external credit ratings
(if available) or to historical information about counterparty default rates:

Trade and other receivables, excluding prepayments
Counterparties with external credit rating
“A”
Other categories

Counterparties without external credit rating
Type of clients X
Type of clients Y
Type of clients Z

Total receivables not impaired
Cash and cash equivalents, with and without restriction,
except cash in hand
“A”
Other categories

Derivative financial instruments
“A”
Other categories

At December 31,
2012

At December 31,
2011

At January 1,
2011

43,796
827,617
871,413

10,819,011
1,147,847
13,382
11,980,240
12,851,653

842,263
5,814,631
6,656,894

35,847
71,451
107,298

620
980,243
980,863

11,425,031
1,146,032
43,264
12,614,327
13,595,190

679,381
2,900,172
3,579,553

44,978
31,102
76,080

1,117
435,477
436,594

7,974,325
1,072,194
66,320
9,112,839
9,549,433

783,467
2,711,236
3,494,703

106,802
205,018
311,820

Group X - new customers / related parties (less than 6 months).

Group Y - clients / current related parties (more than 6 months) without default in the past.

Group Z - clients / current related parties (more than 6 months) with defaults in the past. All defaults were fully recovered.

Alpek, S. A. B. de C. V. And SuBSidiArieS

c. Fair value of financial assets and liabilities
The amount of cash and cash equivalents, restricted cash and cash equivalents, trade and other receivables, trade and other payables,
current debt and other current liabilities approximate their fair value due to their short maturity date. The carrying value of these accounts
represents the expected cash flow.

The carrying value and estimated fair value of other financial assets and liabilities are presented below:

At December 31,
2012

Book
Value

Fair
value

At December 31,
2011

Book
value

Fair
value

At January 1,
2011

Book
value

Fair
value

Financial assets
Non-current trade receivables
Financial liabilities
Non-current debt

Ps 190,523

184,521

195,045

194,921

24,737

Ps 24,721

14,019,537

14,809,233

17,798,811

18,193,828

7,851,761

8,486,588

The estimated fair values are based on discounted cash flows. These fair values consider the non-current portion of financial assets and
liabilities since the current portion approximates its fair value.

16 – Trade and other payables

Trade payables
Balances due to related parties (Note 10)

17 – Debt

Current:
Bank loans (1)
Current portion of non-current debt
Notes payable (1)
Current debt

Non-current:
Senior Notes (2)
Secured bank loans (2)
Unsecured bank loans (2)
Debt issuance costs
Total
Less: current portion of non-current debt
Non-current debt

At December 31,
2012

At December 31,
2011

9,231,707
464,527
9,696,234

9,616,055
3,602,314
13,218,369

At January 1,
2011

7,311,536
387,772
7,699,308

At December 31,
2012

At December 31,
2011

At January 1,
2011

358,274
140,184
2,183
500,641

9,996,489
-
4,163,232
(79,770)
14,079,951
(140,184)
13,939,767

1,645,698
491,251
5,025
2,141,974

4,682,058
495,984
13,112,020
(254,025)
18,036,037
(491,251)
17,544,786

247,146
1,181,853
-
1,428,999

4,473,875
-
4,559,739
(64,877)
8,968,737
(1,181,853)
7,786,884

(1) The fair value of bank loans and notes payable approximated their current carrying amounts, as the impact of discounting is not significant.

(2) The carrying amounts, terms and conditions of non-current debt are as follows:

Alpek, S. A. B. de C. V. And SuBSidiArieS

Balance at
December 31,
Currency

Balance
December 31,
2012

Balance at
January 1,
2011

Maturity
date
2011

Interest
DD/MM/YY

rate

Private placement Senior Notes bearing interest at an
annual rate of 8.31%, maturing in October 2012,
in one annual installment. Guaranteed by its subsidiaries
Temex, Ptal, Dak Resinas, Dak Argentina and DAK Americas.

Private Placement Senior Notes issued by
DAK Americas bearing interest at an annual rate of 6.85%,
maturing on June 2014, in three annual installments.
Guaranteed by Petrotemex and its subsidiaries Temex, Ptal,
Dak Resinas and Dak Argentina.

Senior Notes 144-A/Reg. S bearing interest at an annual
rate of 9.50%, maturing on August 2014. Guaranteed
by Temex, Akra, DAK Americas and Dak Resinas.

USD

- Ps 149,772 Ps 264,795

30-Oct-12

8.31%

USD

688,950

812,038

24-Jun-14

6.85%

USD

1,563,979

3,843,336

3,397,042

19-Aug-14

9.50%

Senior Notes 144A/Reg. S bearing an interest at an annual
rate of 4.50%, maturing on November, 2022. Guaranteed
by Petrotemex, Temex, Akra, DAK Americas and Dak Resinas.
Total Senior Notes

USD

8,432,510

-
Ps 9,996,489 Ps 4,682,058 Ps 4,473,875

20-Nov-22

4.50%

Committed credit line bearing interest
at an annual rate of Libor+3.5%, maturing on November
2013 and guaranteed by Wellman Holdings and Fiber Ind.
Total secured bank loans

USD

Ps
Ps

- Ps 495,984 Ps
- Ps 495,984 Ps

-
-

02-Nov-13

4.03%

Syndicated loan with annual interest at Libor+2.25%,
maturing on December 2016. Guaranteed by
Temex, Akra, Dak Resinas, DAK Americas and Dak Mississippi. USD

Syndicated loan bearing interest at an annual rate of
TIIE + 0.20% maturing in December 2012, in four
semiannual installments. Guaranteed by its subsidiaries
Temex, Ptal, Dak Resinas, Dak Argentina and DAK Americas. MXN

Syndicated loan bearing interest at an annual rate of Libor
+ 0.40%, maturing on December 2012, in four semiannual
installments. Guaranteed by Temex, Ptal, Dak Resinas,
Dak Argentina and DAK Americas.

USD

- Ps 8,387,220 Ps

08-Dec-16

2.79%

117,912

11-Dec-12

5.10%

383,323

11-Dec-12

0.86%

Bank loan with annual interest at Libor + 3.07%,
maturing on August 2017. Guaranteed by its subsidiaries
Temex, Akra, Dak Resinas and DAK Americas.

Committed credit line bearing annual interest rate of
Libor + 2.0%, maturing on September 2015.
Guaranteed by Petrotemex, Temex, Akra y Dak Resinas.

Committed credit line bearing annual interest rate of
Libor +1.60%, maturing on July 2016. Guaranteed by
Temex, Akra and Dak Resinas.

Committed credit line bearing annual
interest rate of Libor + 0.50%, maturing on
September 2012.

Syndicated loan with annual interest rate of
Libor + 0.60% to be paid on April 2011.

USD

2,081,616

2,236,592

1,977,136

23-Aug-17

3.79%

USD

65,050

USD

419,361

24-Sep-15

2.31%

22-Jul-16

2.05%

54,804

30-Sep-12

1.14%

222,428

25-Apr-11

1.05%

Alpek, S. A. B. de C. V. And SuBSidiArieS

Bank loan with annual interest rate of
Libor + 3.0% to be paid on January 2012.

Bank loan with annual interest rate of
Libor + 0.50% to be paid on August 2012.

Bank loan with annual interest rate of
Libor + 2.70% to be paid on April 2016.

Bank loan with annual interest rate of
Libor + 1.80% to be paid on April 2016.

Bank loan with annual interest rate of
Libor + 1.60% to be paid on August 2016.

Bank loan with annual interest rate of
Libor + 0.50% to be paid on August 2012.

Bank loan with annual interest rate of
Libor + 2.15% to be paid on August 2012.
Guaranteed by its subsidiaries Univex and Nyltek.

Bank loan with annual interest rate of
Libor + 2.50% to be paid on February 2017.
Guaranteed by its subsidiaries Univex and Nyltek.
Total unsecured bank loans
TOTAL

December 31,
Currency

December 31,
2012

January 1,
2011

date
2011

Interest
DD/MM/YY

rate

USD

308,927

30-Jan-12

3.30%

111,829

197,714

17-Aug-12

1.00%

308,927

21-Apr-16

2.99%

780,606

838,722

650,505

698,935

01-Apr-16

2.16%

16-Aug-16

1.98%

494,284

21-Aug-12

1.06%

USD

390,303

419,361

494,284

20-Sep-15

2.46%

USD

195,152

-
Ps 4,163,232 Ps 13,112,020 Ps 4,559,739
Ps 14,159,721 Ps 18,290,062 Ps 9,033,614

28-Feb-17

2.81%

At December 31, 2012, the annual maturities of non-current debt are as follows:

Bank loans
Senior notes
Less: debt issuance costs

2014

449,499
1,563,979
-
2,013,478

2015

508,044
-
-
508,044

2016

959,495
-
-
959,495

2017
onwards

Total

2,106,010
8,432,510
-
Ps 10,538,520

Ps 4,023,048
9,996,489
(79,770)
Ps 13,939,767

At December 31, 2011, the annual maturities of non-current debt are as follows:

2013

2014

2015

2016
onwards

Total

Bank loans
Senior notes
Minus debt issuance costs

2,367,732
229,650
-
2,597,382

1,478,946
4,072,986
-
5,551,932

At January 1, 2011, the annual maturities of non-current debt are as follows:

Bank loans
Senior notes
Minus debt issuance costs

2012

1,070,110
335,407
-
1,405,517

2013

205,698
203,009
-
408,707

3,568,762
-
-
3,568,762

6,080,735
-
-
6,080,735

Ps 13,496,175
4,302,636
(254,025)
Ps 17,544,786

2014

2015
onwards

Total

213,303
3,600,051
-
3,813,354

2,224,183
-
-
2,224,183

Ps 3,713,294
4,138,467
(64,877)
Ps 7,786,884

Alpek, S. A. B. de C. V. And SuBSidiArieS

Covenants:
The majority of existing banking debt agreements contains restrictions of the Company, principally for compliance with certain financial
ratios, among they mainly include:

a) Interest coverage ratio: which is defined as the ratio of consolidated EBITDA to consolidated net interest charges for the period of the

four consecutive fiscal quarters ending on such date, which may not be less than 3.0 times.

b) Leverage ratio: this is defined as the ratio of dividing the consolidated net debt by the consolidated EBITDA for the last twelve months.

This ratio may not be greater than 3.5 times.

Additionally, there are other restrictions on incurring additional debt or taking loans that require mortgage assets, dividend payments and
submission of financial information, which is not fulfilled or remedied within a specific period to the satisfaction of creditors, may require
immediate early maturity. During 2012 and 2011, financial ratios were calculated according to formulas set out in loan agreements.
At December 31, 2012, and the date of issuance of these financial statements, the Company and its subsidiaries complied with such
covenants and restrictions.

Relevant debt transactions:

(a) On August 13, 2012, Grupo Petrotemex acquired US$154.2 million (“Tender Offer”) of the principal amount of the “Senior Notes”
144A/Reg. S issued in 2009, remaining a balance at December 31, 2012 of US$120.8 million maturing on 2014. Additionally, after
the Tender Offer, Grupo Petrotemex obtained the consent of the majority of the holders of the Senior Notes to amend certain terms
of the contract that governs them, and as a result, the Senior Notes that were not included into the tender offer remain effective but
without the effect of the financial covenants.

(b) On November 20, 2012, the Company completed an issuance of debt (“Senior Notes”) for a nominal amount of US$650 million
maturing on November 20, 2022. Interests on the Senior Notes will be payable semiannually at 4.50% from May 20, 2013. The
“Senior Notes” were issued through a private placement under the Rule 144A of the “Securities Act” of 1933 of the United States of
America and are unconditionally guaranteed, unsubordinated, by joint obligation of certain subsidiaries of the Company.

In addition, the issuance of the “Senior Notes” resulted in emission costs and expenses in the amount of US$6 million. The costs and
expenses of the issuance, including the discount on the placement of the Senior Notes, are presented net of debt and are amortized
along with the loan based on the effective interest rate method.

The net proceeds of the issuance of the Senior Notes, were used primarily to make debt prepayments of certain subsidiaries of the

Company.

18 – Employee Benefits

The valuation of retirement plan employee benefits, formal (covering approximately 65% of workers in 2012 and 66% of workers in
2011) and informal, covers all employees and is based primarily on years of service completed by them, their current age and estimated
salary at retirement date.

Certain subsidiaries of the Company have defined contribution plans. In accordance with the structure of these plans, the reduction in
labor liabilities is reflected progressively.

The principal subsidiaries of the Company have established irrevocable trust funds for payment of pensions and seniority premiums and
health-care expenses. The contributions in 2012 amounted to Ps 114,579 (Ps 114,115 in 2011).

Alpek, S. A. B. de C. V. And SuBSidiArieS
Following is a summary of the principal consolidated financial data relative to these obligations:

At December 31,
2012

At December 31,
2011

At January 1,
2011

Obligation in the balance sheet:
Pension benefits
Post-employment medical benefits
Liability in balance sheet

Charge in the income statement:
Pension benefits
Post-employment medical benefits

Actuarial losses recognized in the statement
of other comprehensive income for the period
Cumulative actuarial losses recognized
in other comprehensive income

927,679
202,450
1,130,129

1,001,711
259,351
1,261,062

2012

15,717
(10,619)
5,098

(88,387)

(481,970)

The total recognized expenditure for the years ended December 31, were distributed as follows:

Cost of sales
Selling expenses
Administrative expenses
Total

2012

(15,072)
(1,646)
(1,743)
(18,461)

349,426
223,006
572,432

2011

27,640
(12,273)
15,367

(393,583)

2011

7,398
(1,888)
(3,417)
2,093

Pension Benefits
The Company operates defined benefits pension plan based on employee pensionable remuneration and length of service. Most plans
are externally funded. Plan assets are held in trusts, foundations or similar entities, governed by local regulations and practice in each
country, as is the nature of the relationship between the Company and the trustees (or equivalent) and their composition.

The amounts recognized in the balance sheet are determined as follows:

Present value of defined benefit obligations
Fair value of plan assets
Defined benefit liability, net
Unrecognized past service costs
Liability in the balance sheet

At December 31,
2012

3,150,577
(2,195,740)
954,837
(27,158)
927,679

The movement in the defined benefit obligation over the year is as follows:

At January 1
Current service costs
Interest cost
Actuarial losses
Translation adjustments
Benefits paid
Liabilities acquired in a business combination
Curtailments
At December 31

At December 31,
2011

3,130,999
(2,098,529)
1,032,470
(30,759)
1,001,711

2012

3,131,000
15,565
134,263
239,477
(192,768)
(176,960)
-
-
3,150,577

At January 1,
2011

1,761,152
(1,375,579)
385,573
(36,147)
349,426

2011

1,761,153
16,462
111,454
214,516
291,587
(91,872)
853,686
(25,987)
3,130,999

Alpek, S. A. B. de C. V. And SuBSidiArieS

The movement in the fair value of the plan assets over the year is as follows:

At January 1
Expected return on plan assets
Actuarial gain (losses)
Translation adjustments
Contributions
Benefits paid
Plan assets acquired in a business combination
At December 31

2012

(2,098,529)
(167,479)
(107,842)
122,239
(114,579)
170,450
-
(2,195,740)

The amounts recognized in the income statement for the years ended December 31, 2012 and 2011 are as follows:

Current service cost
Interest cost
Expected return on plan assets
Effect of curtailments and/or settlements
Past service cost
Total, included in staff costs

The principal actuarial assumptions were as follows:

Discount rate

Inflation rate
Growth rate of wages

Expected return on plan assets

Future salary increases

2012

(15,565)
(134,263)
167,479
-
(1,934)
15,717

At December 31,
2011

MX 8.25%
US 4.48%
3.82%
5.25%

MX 10.25%
US 8.25%
5.25%

At December 31,
2012

MX 5.50%
US 3.80%
3.57%
5.25%

MX 9.75%
US 8.25%
5.25%

2011

(1,375,579)
(134,957)
171,716
(219,895)
(114,115)
83,214
(508,913)
(2,098,529)

2011

(16,462)
(111,454)
134,957
22,730
(2,131)
27,640

At January 1,
2011

MX 7.50%
US 5.81%
4.40%
5.25%

MX 10.50%
US 8.50%
5.25%

Post employment medical benefits
The Company operates a number of post-employment medical benefits schemes mainly in DAK Americas. The method of accounting,
assumptions and the frequency of valuations are similar to those used for defined benefit pension schemes. Most of these plans are
unfunded.

In addition to the assumptions set out above, the main actuarial assumption is a long-term increase in health costs annually 9.00% and
9.50% in 2012 and 2011, respectively.

The amounts recognized in the balance sheet were determined as follows:

Present value of defined benefit obligations
Fair value of plan assets
Defined benefit liability, net
Past service costs not recognized
Liability in balance sheet

At December 31,
2012

At December 31,
2011

202,450
-
202,450
-
202,450

259,351
-
259,351
-
259,351

At January 1,
2011

218,467
-
218,467
4,539
223,006

Alpek, S. A. B. de C. V. And SuBSidiArieS

Movement in defined benefit obligation is as follows:

At January
Current service costs
Interest cost
Contributions
Actuarial (gain) losses
Translation adjustments
Benefits paid
At December 31

2012

259,351
2,542
7,152
9,657
(43,248)
(17,991)
(15,013)
(202,450)

The amounts recognized in the income statement for the years ended December 31, were as follows:

Current service cost
Interest cost
Expected return on plan assets
Total, included in staff costs

2012

(2,542)
(9,657)
1,580
(10,619)

At December 31, 2012 the effect of a 1% movement in the assumed medical cost trend rate is as follows:

Effect on the aggregate of the current service cost and interest cost
Effect on the defined benefit obligation

Increase

4,385
18,019

At December 31, 2011 the effect of a 1% movement in the assumed medical cost trend rate is as follows:

Effect on the aggregate of the current service cost and interest cost
Effect on the defined benefit obligation

Post employment benefits
Plan assets are comprised as follows:

Equity instruments
Cash and cash equivalents

19 – Deferred Income Tax

Increase

35,758
110,306

At December 31,
2012

At December 31,
2011

1,036,816
1,158,924

1,389,042
709,487

2011

218,467
2,044
10,229
-
7,351
29,209
(7,949)
259,351

2011

(2,044)
(10,229)
-
(12,273)

Decrease

(4,895)
(21,737)

Decrease

(42,775)
(130,938)

At January 1,
2011

751,074
624,505

The analysis of deferred tax assets and deferred tax liabilities is as follows:

Deferred tax asset:
- To be recovered after more than 12 months
- To be recovered within 12 months

Deferred tax liabilities
- To be recovered after more than 12 months
- To be recovered within 12 months

Deferred tax, net

At December 31,
2012

At December 31,
2011

At January 1,
2011

700,264
418,243
1,118,507

(3,787,918)
(1,544,421)
(5,332,339)
(4,213,832)

1,081,711
257,862
1,339,573

(4,843,538)
(681,725)
(5,525,263)
(4,185,690)

633,186
186,233
819,419

(4,297,626)
(454,042)
(4,751,668)
(3,932,249)

Alpek, S. A. B. de C. V. And SuBSidiArieS

The gross movement on the deferred income tax account is as follows:

At January 1
Translation Effect
Acquisition of subsidiary
Income state charge:
Tax charged (credit) relating to components of other comprehensive income
At December 31

2012

(4,185,690)
236,309
-
(268,017)
3,566
(4,213,832)

2011

(3,932,249)
(507,188)
37,370
(39,785)
256,162
(4,185,690)

Temporary differences requiring recognition of deferred income tax for the year ended December 31, 2012 is as follows:

Assets:
Inventories
Trade accounts receivable
Property, plant and equipment
Valuation of derivative instruments
Tax loss carryforwards
Total

Liabilities:
Accrued expenses
Other temporary differences, net
Total
Deferred income tax liability

2012

2011

Ps
Ps

(18,659)
(89,453)
(3,787,918)
122,266
635,022
(3,138,742)

(914,092)
(160,998)
(1,075,090)
(4,213,832)

Ps
Ps

38,744
69,478
(4,843,538)
315,745
562,509
(3,857,062)

(328,628)
-
(328,628)
(4,185,690)

Deferred income tax assets are recognized for tax loss carryforwards to the extent that the realizations of the related tax benefit through
future taxable profits is probable. The Company did not recognize deferred income tax assets of Ps 372,170 for December 31, 2011,
in respect of losses amounting to Ps 1,329,179 that can be carried forward against future taxable income. On September 2012, Akra
Polyester recognized a deferred income tax asset of Ps 351,166 in respect of losses amounting to Ps 1,254,165 because of the merge
with PTAL.

At December 31, 2012, the subsidiaries have cumulative tax loss carry forwards for a total of Ps 2,267,933 which expire as shown below:

Year
loss incurred

2003
2004
2005
2006
2007
2008
2009
2010
2011

Tax loss
carryforwards

273,323
55,886
268,295
74,562
15,868
350,466
5,685
133,545
1,090,303
2,267,933

Year of
expiration

2013
2014
2015
2016
2017
2018
2019
2020
2021

20 - Derivative Financial Instruments

The effectiveness of derivative financial instruments classified as hedge instruments is assessed on a periodic basis. At December 31,
2012 and 2011 and January 1, 2011 the subsidiaries’ management had assessed the effectiveness of its hedges and have considered
that they were highly effective.

The notional amounts related to derivative financial instruments reflect the reference volume contracted, but do not reflect the amounts
at risk in regard to future cash flows. The amounts at risk are generally limited to the unrealized gain or loss on market valuation of
these instruments, which may vary according to changes in market value of the underlying asset, its volatility and the credit quality of
counterparties.

Alpek, S. A. B. de C. V. And SuBSidiArieS

The principal obligations to which the subsidiaries are subject depend on the contracting mechanics and terms of each derivative
financial instrument existing at December 31, 2012 and 2011 and January 1, 2011.

Derivatives held for trading are classified as current assets or liabilities. The total fair value of a hedging derivative is classified as non-
current asset or liability if the remaining maturity of the hedged item is more than 12 months and as a current asset or liability if the
maturity of the hedged item is less than 12 months.

a) Exchange rate derivatives
The positions of exchange rate derivatives held for trading purposes were as follows (millions of Mexican Pesos):

At December 31, 2012

Type of derivative,
value or contract

Notional
amount

Underlying
asset

Unit

Reference

Fair
value

2013

Maturity
2014

2015+

Collateral/
guarantee

US$/MXN

(325) Pesos / Dollar

13.01

6 Ps

- Ps

At December 31, 2011

Type of derivative,

value or contract

US$/MXN (CCS)(1)
US$/MXN
Euro / US$
Euro /MXN

Notional

amount

Underlying
asset

Unit

Reference

(76) Pesos / Dollar
(349) Pesos / Dollar
(288) Dollars / Euro
(82) Pesos / Euro

13.98
13.98
1.30
18.14

Fair

value

(16) Ps
(7)
14
(4)
(13) Ps

2012

(16)
(7)
14
(4)
(13)

Maturity

2013

Collateral/

2014+

guarantee

-
-
-
-
-

- Ps
-
-
-
- Ps

-
-
-
-
_-

Type of derivative,

value or contract

Notional

amount

Underlying
asset

Unit

Reference

Fair

value

2011

Maturity
2012

Collateral/

2013+

guarantee

US$/MXN (CCS)(1)

(134) Pesos / Dollar

12.36

(16) Ps

(6)

(10) Ps

- Ps

At January 1, 2011

(1) Cross currency swaps

b) Interest rate swaps
The positions of derivative financial instruments of interest rate swaps were as follows (millions of Mexican pesos):

Type of derivative,
value or contract

Hedging purposes:
Over Libor (1)
Trading purposes:
Over Libor

Type of derivative,

value or contract

Hedging purposes:
Over Libor (1)
Trading purposes:
Over Libor

Notional
amount

Underlying
asset

Unit

Reference

Fair
value

2013

Maturity
2014

2015+

Collateral/
guarantee

At December 31, 2012

Ps 2,862 % per year

0.39

(200) Ps

(42)

(56) Ps

(102) Ps

1,008 % per year

0.39

(36)
(236) Ps

(36)
(78)

(56) Ps

-
(102) Ps

-
-

At December 31, 2011

Notional

amount

Underlying
asset

Unit

Reference

Fair

value

2012

Maturity

2013

Collateral/

2014+

guarantee

Ps 3,075 % per year

0.73

(176) Ps

(41)

(50) Ps

(85) Ps

2,761 % per year

0.73

(210)
(386) Ps

(192)
(233)

(23)
(73) Ps

5
(80) Ps

-
-

Alpek, S. A. B. de C. V. And SuBSidiArieS

Notional

amount

Underlying
asset

Unit

Reference

Fair

value

2011

Maturity
2012

Collateral/

2013+

guarantee

At January 1, 2011

Ps 1,977 % per year

0.80

49 Ps

(2)

(30) Ps

81 Ps

5,565 % per year

0.80

(421)
(372) Ps

(242)
(244)

(159)
(189) Ps

(20)

61 Ps

-
-

Type of derivative,

value or contract

Hedging purposes:
Over Libor (1)
Trading purposes:
Over Libor

(1) Cash flows hedge

c) Energy
The positions of derivative financial instruments for natural gas, gasoline and ethylene were as follows (millions of Mexican Pesos):

Type of derivative,
value or contract

Notional
amount

Underlying
asset

Unit

Reference

Fair
value

2013

Maturity
2014

2015+

Collateral/
guarantee

At December 31, 2012

Hedging purposes:
Ethylene (1)

Natural gas (1)

Ethane (1)

Trading purposes:
Ethylene

Natural gas

Gasoline

476

606

Cent
Dollar/lb
Dollar
/ MBTU
55 Cent Dollar
/Gallon

1,138

Cent
Dollar/lb
Dollar
/ MBTU
Dollar
/ Gallon

55.1

40 Ps

(2) Ps

- Ps

3.60

23.9

55.1

3.60

2.70

(16)

(226)

14
(158) Ps

At December 31, 2011

(16)

(226)

20
(150)

(6)
(8) Ps

-
- Ps

-
-

Underlying
asset

Unit

Reference

Fair

value

2012

Maturity

2013

Collateral/

2014+

guarantee

Cent
Dollar/lb
Dollar
/ MBTU

Cent
Dollar/lb
Dollar
/ MBTU
Dollar
/ Gallon

51.7

(8) Ps

(8)

3.25

(30)

51.7

3.25

2.60

(4)

(536)

(129)
(707) Ps

(4)

(279)

(113)
(434)

(257)

- Ps

(16)
(273) Ps

-
- Ps

-
-

Type of derivative,

value or contract

Hedging purposes:
Ethylene (1)

Natural gas (1)

Trading purposes:
Ethylene

Natural gas

Gasoline

Notional

amount

601

706

1,348

Alpek, S. A. B. de C. V. And SuBSidiArieS

Notional

amount

Underlying
asset

Unit

Reference

Fair

value

2011

Maturity
2012

Collateral/

2013+

guarantee

At January 1, 2011

473

Cent
Dollar / lb

257

928

Dollar
/ MBTU
Dollar
/ Gallon

45.5

69 Ps

- Ps

4.09

2.36

(728)

120
(539) Ps

113
178

(397)

(331)

7
(386) Ps

-
(331) Ps

283

-
283

Type of derivative,

Value or contract

Hedging purposes:
Ethylene (1)

Trading purposes:
Natural gas

Gasoline

(1) Cash flows hedge

At December 31, 2012 and 2011 and January 1, 2011 the net fair value position liability of the aforementioned derivative financial
instruments amounted to (Ps 388,431), (Ps 1,105,724) and (Ps 927,266), respectively, it is included in the consolidated statement of
financial position as follows:

Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net position

At December 31,
2012

107,297
-
(287,510)
(208,218)
(388,431)

Fair value at:

At December 31,
2011

49,450
26,630
(438,741)
(743,063)
(1,105,724)

At January 1,
2011

207,100
104,720
(88,418)
(1,150,668)
(927,266)

At January 1, 2011, the collateral required in derivative financial instruments described above were Ps 283,406, and were represented by
cash, which is included under the caption “Restricted cash” in current assets. At December 31, 2012 and 2011 there are no collaterals
required in derivative financial instruments.

21 – Other current liabilities

Taxes
Accrued expenses
Accrued interest payable
Short-term employee benefits
Employees’ profit sharing
Deferred revenue
Advances from customers
Other
Total other current liabilities

At December 31,
2012

At December 31,
2011

401,406
522,942
148,433
295,497
32,710
-
6,943
54,330
1,462,261

689,666
1,124,324
246,259
207,442
108,867
80,980
3,734
117,600
2,578,872

At January 1,
2011

485,888
807,790
177,698
95,071
36,794
-
928
91,960
1,696,129

Alpek, S. A. B. de C. V. And SuBSidiArieS

22 - Stockholders’ equity

At December 31, 2012, the common stock is variable, with a fixed minimum of Ps 50 retired, represented by 5,000 Series “A” shares,
with par value of 10 Mexican Pesos, fully subscribed and paid. The variable capital withdrawal rights will be represented, if any, with
registered shares without par value, Series “B”.

Net income for the year is subject to the decisions taken at the general stockholders’ meeting, to the Company’s by-laws and to the
General Law of Mercantile Corporations. In accordance with the General Law of Mercantile Corporations, the legal reserve must be
increased annually by 5% of annual net profits until it reaches 20% of the fully paid capital stock amount.

The movements of the other reserve items for 2012 and 2011 are as follows:

At January 1, 2011
Fair value losses
Tax on fair value losses
Gains on foreign currency translation
At December 31, 2011
Fair value gains
Tax on fair value gains
Losses on foreign currency translation
At December 31, 2012

Effect of
foreign
currency
translation

-
-
-
1,716,956
1,716,956
-
-
(1,406,694)
(1,406,694)

Effect of derivative
financial designated
instruments as
cash flow hedges

49,584
(344,241)
104,706
-
(239,535)
87,638
(22,667)
-
64,971

Total

49,584
(344,241)
104,706
1,716,956
1,477,421
87,638
(22,667)
(1,406,694)
(1,341,723)

In Alpek’s General Ordinary Meeting held on January 10, 2012, the stockholders agreed to declare dividends in cash for a total amount
of Ps 139,973.

In Alpek’s General Ordinary Meeting held on February 20, 2012, the stockholders agreed to declare dividends in cash for a total amount
of Ps 641,470.

In Alpek’s General Ordinary Meeting held on August 30, 2012, the stockholders agreed to declare dividends in cash for a total amount
of Ps 910,810.

In Alpek’s General Ordinary Meeting held on September 26, 2011, the stockholders agreed to declare dividends in cash for a total
amount of Ps 263,667.

In Alpek’s General Ordinary Meeting held on December 6, 2011, the stockholders agreed to declare dividends in cash for a total amount
of Ps 131,319.

For the years ended December 31, 2012 and 2011, the contributed capital of the subsidiaries had the following changes:

a) Petrotemex:
The capital stock at January 1, 2011 was composed for ordinary nominative shares with par value of 1 Mexican Peso each totally
subscribed and paid in as follows: 255,301,000 of shares type: Series “A” representing the fixed portion of Ps 255,301 of the capital
stock and 2,133,702,581 of shares type: Series “B” representing the variable portion of Ps 2,133,702 of the capital stock.

b) Indelpro:
At January 1, 2011, the capital stock is variable with a fixed minimum of Ps 200 and unlimited maximum represented by 368,765,200
common shares, nominative, without par value expression fully subscribed and paid, and divided into Series “A” shares (51%) restricted
to Mexican investors and Series “B” shares (49%) without ownership restrictions.

c) Polioles:
At January 1, 2011, the capital stock is variable is represented by 34,800,000 common shares nominative, without par value expression
fully subscribed and paid, and divided into Series “B-1” composed of 17,400,001 and Series “B-2” shares composed of 17,399,999
without ownership restrictions.

Alpek, S. A. B. de C. V. And SuBSidiArieS

d) Unimor:
The capital stock fully subscribed and paid of Ps 714,602 is composed of common shares with a par value of ten cents of Mexican
Pesos and is divided into 500,000 shares Series “A” representing the fixed part and Series “B” shares composed of 7,145,515,147 that
represents the variable portion.

In General Ordinary Meetings held on June 15, 2009 the stockholders of Unimor agreed to increase the capital stock by Ps 102,282,
through a contribution in cash, therefore, at January 1, 2011, the capital stock is variable with a fixed minimum of Ps 50 and unlimited
maximum.

e) Copeq:
At January 1, 2011, the capital stock issued and authorized was 1,000 shares at US$1 par value per share.

At December 31, 2012 and 2011, the stockholders equity has the following changes:

a) Petrotemex:
In Petrotemex’s General Ordinary Meeting held on February 20, 2012, the stockholders declared and paid dividends in cash for a total
amount of Ps 24,596 to the non-controlling portion.

In Petrotemex’s General Ordinary Meeting held on September 5, 2012, the stockholders declared and paid dividends in cash for a total
amount of Ps 25,290 to the non-controlling portion.

In Petrotemex’s General Ordinary Meeting held on April 13, 2011, the stockholders declared and paid dividends in cash for a total
amount of Ps 571,381.

b) Indelpro:
In Indelpro’s General Ordinary Meeting held on January 6, 2012, the stockholders declared and paid dividends in cash for a total amount
of Ps 134,483 to the non-controlling portion.

In Indelpro’s General Ordinary Meeting held on August 3, 2012, the stockholders declared and paid dividends in cash for a total amount
of Ps 128,094 to the non-controlling portion.

In Indelpro’s General Ordinary Meeting held on August 8, 2011, the stockholders declared and paid dividends in cash for a total amount
of Ps 120,532 to the non-controlling portion.

In Indelpro’s General Ordinary Meeting held on April 04, 2011, the stockholders declared and paid dividends in cash for a total amount
of Ps 237,066.

In Indelpro’s General Ordinary Meeting held on January 7, 2011, the stockholders declared and paid dividends in cash for a total amount
of Ps 122,369.

c) Polioles:
In Polioles´ General Ordinary Meeting held on February 20, 2012, the stockholders declared and paid dividends in cash for a total amount
of Ps 128,294 to the non-controlling portion.

In Polioles´ General Ordinary Meeting held on August 30, 2012, the stockholders declared and paid dividends in cash for a total amount
of Ps 164,809 to the non-controlling portion.

In Polioles’ General Ordinary Meeting held on April 26, 2011, the stockholders declared and paid dividends in cash for a total amount
of Ps 232,504.

d) Unimor:
In Unimor’s General Ordinary Meeting held on February 20, 2012, the stockholders declared and paid dividends in cash for a total
amount of Ps 1 to the non-controlling portion.

In Unimor’s General Ordinary Meeting held on July 31, 2012, the stockholders declared and paid dividends in cash for a total amount
of Ps 1 to the non-controlling portion.

In Unimor’s General Ordinary Meeting held on September 23, 2011, the stockholders declared and paid dividends in cash for a total
amount of Ps 1 to the non-controlling portion. In Unimor’s General Ordinary Meeting held on November 23, 2011, the stockholders
declared and paid dividends in cash for a total amount of Ps 1 to the non-controlling portion.

Alpek, S. A. B. de C. V. And SuBSidiArieSIn accordance with the General Law of Mercantile Corporations, the income for the period is subject to the legal provision, requiring that
at least 5% of the income for each period to be set aside to increase the legal reserve until it reaches an amount equivalent to 20% of
the capital stock paid. The legal reserve is presented within retained earnings. As the legal reserve reached 20% of the capital stock, no
additional increases were required in December 31, 2012 and 2011 and January 1, 2011.

Dividends paid are not subject to income tax if they are paid from the after-tax earnings account (CUFIN for its Spanish acronym).
Dividends paid in excess of this account are subject to a tax equivalent to 42.86% if paid in 2013. The tax is payable by the Company
and may be credited against the income tax payable by the Company in the present year or in the following two immediate years or, if
applicable, against the flat tax of the year. Dividends paid from retained earnings previously taxed are not subject to any tax withholding
or payment.

In the case of capital stock reductions and in accordance with the Mexican Income Tax Law, any excess of stockholders’ equity over
capital contributions, receives the same tax treatment as dividends.

23 – Expenses by nature

Cost of sales and expenses classified by nature are as follows:

Raw material and other
Employee benefits expenses (Note 26)
Human resources expense
Maintenance
Depreciation and amortization
Advertising expenses
Freight expenses
Energy and combustible consumption (gas, electricity, etc.)
Traveling expenses
Operating lease expenses
Technical assistance, professional fees and administrative services
Other
Total

24 – Other income (expenses), net

Other income (expenses) for the years ended December 31, are comprised as follows:

Gain on sale of waste
Reorganization expenses (*)
Expenses related to potential acquisition projects
Gain on sale of property, plant and equipment
Impairment of property, plant and equipment
Valuation of derivative financial instruments
Indemnity insurance recovery
Taxes and surcharges
Gain on sale of investments available for sale (**)
Other income, net
Total

December 31,

2012

(73,584,231)
(2,860,519)
(21,034)
(921,734)
(2,129,374)
(2,145)
(3,400,967)
(2,861,575)
(106,059)
(263,785)
(920,204)
(1,926,252)
Ps ( 88,997,879)

2012

1,136
-
-
375
(4,798)
152,275
6,009
9,204
-
146,635
310,836

2011

(69,203,340)
(2,461,808)
(50,031)
(974,954)
(1,818,776)
(3,417)
(2,518,165)
(2,777,807)
(87,756)
(206,678)
(970,714)
(1,679,067)
(82,752,513)

2011

7,424
(313,900)
(161,873)
3,034
(137,897)
-
8,888
6,030
88,531
174,281
(325,482)

(*) The expenses refer to an organizational restructure occurred during 2011 in which part of the personnel were dismissed.

(**) This income mainly corresponds to the gain from the sale of shares of Enka de Colombia, S. A. carried out during 2011.

Alpek, S. A. B. de C. V. And SuBSidiArieS

25 – Finance income (expenses)

Finance income (expenses) for the years ended on December 31, are as follows:

Finance income:
Interest income in short-term bank deposits
Interest income in loans to related parties
Other
Foreign exchange gain
Gains for changes in the fair value of financial assets at
fair value through profit or loss
Total finance income

Finance expenses:
Interest expense in bank borrowings
Interest expense with related parties
Interest expense in non banking borrowings
Finance cost on employee benefits
Other
Exchange rate losses
Total finance expenses
Finance expenses, net

26 – Employee benefits expenses

Employee benefits expenses for the years ended on December 31, are as follows:

Salaries, wages and benefits
Social security contributions
Employee benefits (Note 18)
Other contributions
Total

27 – Income tax

Income tax for the years ended on December 31, are as follows:

Total current income tax
Adjustment to the provision of income tax from prior years
Total deferred tax
Income tax expense

2012

133,569
49,151
172,845
141,224

68,927
565,716

2012

(751,306)
( 56,362)
(619,700)
(140,868)
(328,743)
-
(1,896,979)
(1,331,263)

2012

(2,091,768)
(187,301)
(18,461)
(562,989)
(2,860,519)

2012

(1,458,257)
2,982
(268,018)
(1,723,293)

2011

21,883
56,808
141,984
-

3,833
224,508

2011

(539,905)
(49,246)
(347,852)
(122,722)
(263,418)
(91,588)
(1,414,731)
(1,190,223)

2011

(1,852,883)
(168,328)
2,093
(442,690)
(2,461,808)

2011

(1,908,211)
371
(39,785)
(1,947,625)

Alpek, S. A. B. de C. V. And SuBSidiArieS

The reconciliation between statutory and effective income tax rate for the years ended on December 31 is as follows:

Income before income tax
Statutory tax rate
Income tax at statutory rate
Add (deduct) effect of income tax on:
Annual inflationary adjustment
Non-deductible expenses
Non-taxable income
Tax losses for which no deferred income tax asset was recognized
Translation effect from the functional currency to the reporting currency
Effect of different tax rates in countries other than Mexico
Adjustment to the income tax liability from prior years
Effect for reactivation of tax losses
Share of losses of associates
Total income tax
Effective income tax rate

2012

6,106,095
30%
(1,831,829)

(71,823)
(32,673)
30,392
65,446
(171,247)
(85,088)
8,880
376,366
(11,717)
(1,723,293)
28%

2011

6,375,378
30%
(1,912,614)

(139,365)
(35,266)
-
27,420
214,838
(96,120)
371
-
(6,889)
(1,947,625)
31%

On December 9, 2012, the Income Law in Mexico was published for the year 2013, in which the income tax rate in Mexico (ISR)
applicable for 2013 will be 30%, 29% for 2014 and from 2015 will be 28%.

At the end of 2012, the Senate of the United States of America approved and passed by the House of Representatives changes in the US
Tax Act of that country, and were signed by the President at the beginning of January, 2013, these changes are considered as substantially
enacted. As of December 31, 2012, this does not cause any impact in the current or deferred income tax determined by the Company.

The charge (credit) of the tax related to the components of other comprehensive income for the years ended December 31, are:

2012

Tax
charge
(in favor)

Before
Taxes

After
tax

Before
taxes

2011

Tax
charge
(in favor)

After
tax

Ps (1,406,694)
(88,386)

-
26,233

(Ps 1,406,694)
(62,153)

Ps 1,716,956
(393,583)

-
151,455

Ps 1,716,956
(242,128)

87,638
Ps (1,407,442)

(22,667)
3,566
3,566

Ps
Ps

64,971
(1,403,876)

(344,241)
979,132

104,706
Ps 256,161
Ps 256,161

(239,535)
Ps 1,235,293

Foreign currency translation
effect
Actuarial losses
Effect of derivative
financial Instruments designated as
Cash flow hedging
Other comprehensive income
Deferred tax

28 - Financial information by segments

Segment information is presented in a manner consistent with the internal reporting provided to the chief operating officer, which has
been identified as the Company’s Chief Executive Officer, who is the highest authority in the operational decision making, resource
allocation and performance assessment of the operating segments.

An operating segment is defined as a component of an entity about which separate financial information is regularly being evaluated.

Alpek controls and evaluates its continuing operations through two business segments based on products: Polyester Chain Business and
Plastics & Chemicals Business. These segments are managed independently because their products mix and the markets they attend are
different. Their activities are carried out through various subsidiaries.

Transactions between operating segments are carried out at market value and the accounting policies which prepares segment information
are consistent with those described in Note 3.

The Company evaluates the performance of each of the operating segments based on income before financial income, taxes, depreciation,
amortization and impairment of non-current assets (EBITDA), this indicator represents a good measure to evaluate operating performance
and ability to meet obligations principal and interest in respect of the indebtedness, and the ability to fund capital expenditures and

Alpek, S. A. B. de C. V. And SuBSidiArieS

working capital requirements. Nevertheless, EBITDA is not a measure of financial performance under IFRS and should not be considered
as an alternative to net income as a measure of operating performance or cash flows as a measure of liquidity.

The Company has defined adjusted EBITDA as consolidated and combined profit (loss) before tax after adding back or subtracting, as the case
may be: (1) depreciation, amortization and impairment of non-current assets; (2) the financial result, net (which includes interest expense,
interest income, foreign exchange gains (losses), net and gain (loss) of derivative financial instruments and (3) share of loss of associates.

Below is the consolidated financial information of the operating segments to report (million of Mexican Pesos):

For the year ended December 31, 2012:

Income statement:
Sales by segment
Inter-segment sales
Sales to external clients

Operating income
Depreciation, amortization and impairment of fixed assets
Adjusted EBITDA
Capital expenditures (Capex)

For the year ended December 31, 2011:

Income statement
Sales by segment
Inter-segment sales
Sales to external clients

Operating income
Depreciation, amortization and impairment of fixed assets
Adjusted EBITDA
Capital expenditures (Capex)

Polyester

75,249
(49)
75,200

5,319
1,689
7,008
1,400

Polyester

70,050
(52)
69,998

5,195
1,537
6,732
471

Ps
Ps

Plastics
and
Chemicals

21,068
(105)
20,963

2,161
445
2,606
122

Plastics
and
Chemicals

20,781
(112)
20,669

2,394
419
2,813
117

The reconciliation between “Adjusted EBITDA” and profit before tax for the years ended December 31 is as follows:

Adjusted EBITDA
Depreciation, amortization and impairment of fixed assets
Operating profit
Financial result
Share of loss of associates
Profit before tax

2012

9,610
(2,134)
7,476
(1,331)
(39)
6,106

Segment
total

96,317
(154)
96,163

7,480
2,134
9,614
1,522

Segment
total

90,831
(164)
90,667

7,589
1,956
9,545
588

2011

9,545
(1,956)
7,589
(1,191)
(23)
6,375

Ps
Ps

The following table shows the net sales breakdown by country of origin for the years ended December 31, (in millions of Mexican Pesos):

Mexico
United States
Argentina
Net sales

2012

53,456
38,609
4,098
96,163

2011

53,142
33,362
4,162
90,667

The Company’s main customer generated revenues of Ps 10,121 and Ps 13,833 for the years ended December 31, 2012 and 2011,
respectively, these revenues were generated in the reporting segment Polyester which represents 11% and 15% of consolidated revenues
to external customers.

Alpek, S. A. B. de C. V. And SuBSidiArieS

The following tables show the intangible assets and property, plant and equipment by country of origin: (in millions of Mexican Pesos):

Mexico
United States
Argentina
Total intangible assets

Mexico
United States
Argentina
Total Property, plant and equipment

At December
31, 2012

At December
31, 2011

At January
1, 2011

1,552
690
1
2,243

At December
31, 2012

18,439
7,985
271
26,695

1,778
768
3
2,549

At December
31, 2011

19,397
9,161
321
28,879

180
3
5
188

At January
1, 2011

17,867
3,944
314
22,125

29 - Commitments and contingencies

At December 31, 2012 and 2011 and January 1, 2011, the subsidiaries had entered into various agreements with suppliers and customers
for purchases of raw material used for production and the sale of finished goods, respectively. These agreements, with a term between
one and five years, generally contain price adjustment clauses.

Some of the subsidiaries use hazardous materials to manufacture polyester staple fiber, polyethylene terephthalate (“PET”) resin and
terephthalic acid and generates and disposes of wastes, such as finishes and glycol. These and other activities of the subsidiaries are
subject to various federal, state and local laws and regulations governing the generation, handling, storage, treatment and disposal of
hazardous substances and wastes. Under such laws, an owner or lessee of real estate may be liable for, among other things, (i) the costs
of removal or remediation of certain hazardous or toxic substances located on, in, or emanating from, such property, as well as the related
cost of investigation and property damage and substantial penalties for violations of such law, and (ii) environmental contamination of
facilities where its waste is or has been disposed of. Such laws often impose such liability without regard to whether the owner or lessee
knew of, or was responsible for, the presence of such hazardous or toxic substances.

Although the subsidiaries believe that there are no existing material liabilities relating to noncompliance with environmental laws and
regulations, there can be no assurance that there are no undiscovered potential liabilities relating to noncompliance with environmental
laws and regulations, that historic or current operations have not resulted in undiscovered conditions that will require investigation and/
or remediation under environmental laws, or that future uses or conditions will not result in the imposition of environmental liability
upon the subsidiaries or expose it to third-party actions, such as tort suits. Furthermore, there can be no assurance that changes in
environmental regulations in the future will not require the subsidiaries to make significant capital expenditures to change methods of
disposal of hazardous materials or otherwise alter aspects of its operations.

DAK Americas, L. L. C. provided a corporate guarantee to Clear Path Recycling, L. L. C. in favor of Shaw Industries Group, Inc. At December
31, 2012 and 2011 this guarantee amounts to US$5,928 and US$3,400, respectively.

In September, 2007, the subsidiary Indelpro renewed the agreement it had entered into with “PEMEX Refinación” covering the supply of
polypropylene at chemical and refining ending in 2018. Purchases for the year ended on December 31, 2012 and 2011 and January 1,
2011 under this agreement amounted to Ps 4,532,035, Ps 4,352,839 and Ps 3,989,666, respectively and there are purchase commitments
of approximately Ps 5,015,005 for the year 2013.

In connection with the construction of its second production line of polypropylene, in 2008 the subsidiary Indelpro entered into an
agreement with Basell Poliolefine Italia S. r. l., (subsidiary of the other partner in Indelpro S. A. de C. V.) related to engineering licenses,
use of patents and technical information for the production of polypropylene by which Indelpro paid a down payment of US$9.5 million
to use such licenses, patents and technical information to build the production line. This contract provides additional annual payments
of royalties from 2013, which are determined on the basis of 1.22% of net sales value. As of December 31, 2012 there is no obligation
for paying these royalties, the obligation will be generated when the sales of 2013 occur. The duration of royalty payments will be until
Indelpro should have completed a cumulative US$11 million as compensation. Indelpro has the option to pay this obligation in advance.

On February 1, 2005, the subsidiary Polioles and BASF Corporation (the other partner of the Combined Affiliate) signed a license contract
related to the use of patents and technical information for the production of polystyrene pearl in the Altamira plant, based in Tamaulipas.
Under the mentioned contract, Polioles pays BASF Corporation the difference between an annual minimum of US$ 9 million and the

Alpek, S. A. B. de C. V. And SuBSidiArieS

gain before financing and taxes plus depreciation and amortization generated by the line of polystyrene pearl. The term of the present
contract will be until Polioles had covered in an accrual basis US$ 15 million as consideration. For the year ended at December 31, 2012
and 2011 the threshold was not reached and therefore there is no payment obligation generated.

The Company leases equipment under non-cancelable operating leases, primarily related to transportation equipment for PTA and PET
businesses, which normally include renewal options. These options are generally renewed under the same conditions of the existing
leases.

Future payments under these operating leases with non-cancelable terms longer than one year are summarized below:

2013
2014
2015
2016
2017
Subsequent years

US$

12,414
9,209
6,867
6,204
4,200
12,099

30 - First time adoption of International Financial Reporting Standards

Until 2011, the Company issued its consolidated and combined financial statements in accordance with Mexican Financial Reporting
Standards (MFRS). Since 2012, Alpek issued its consolidated and combined financial statements in accordance with IFRS issued by the
International Accounting Standards Board (IASB).

According to IFRS 1 “First-time Adoption of IFRS” the Company considered January 1, 2011 as its transition date and January 1, 2012
as its date of adoption. The amounts included in the consolidated and combined financial statements for 2011 have been reconciled to
be presented under the same standards and criteria in 2012.

For the transition, the Company identified and quantified the differences between MFRS and IFRS for purposes of its opening balance
sheet at January 1, 2011 and its conversion to IFRS on its financial information systems.

In preparing its opening balance sheet, based on the IFRS 1, the Company has adjusted amounts reported previously in financial
statements prepared under MFRS. An explanation of how the transition from MFRS to IFRS has affected the Company’s financial position,
its financial performance and cash flows shown in the following tables and notes:

1. Decisions on Adoption

1.1. IFRS optional exemptions

1.1.1. Exemption of fair value as assigned cost

IFRS 1 provides the option to measure the property, plant and equipment at fair value as well as certain intangible assets
at the date of transition to IFRS and to use that fair value as its assigned cost at that date or to use an updated carrying
amount determined under the previous GAAP (Generally Accepted Accounting Principles), if such updated carrying amount
is comparable to: a) fair value or b) cost or depreciated cost in accordance with IFRS, adjusted to recognize changes in an
inflation rate.

The Company chose, at its transition date, to reevaluate their land and property, plant and equipment at fair value. For smaller
equipment, the Company chose to use their values recognized under MFRS as assigned cost under IFRS. The net effect on
valuation is recognized against the opening balance of retained earnings under IFRS at the transition date. Thereafter, the
Company uses the cost method for property, plant and equipment in accordance with IFRS.

1.1.2. Exemption for business combinations

IFRS 1 allows applying IFRS 3, “Business Combinations” (“IFRS 3”), prospectively as of the transition date or a specific date
before the transition date. An entity that chooses to restore their purchases from a specific date before the transition date
must include all acquisitions occurring in that period. This option allows avoiding retrospective application that would reset
all business combinations that occurred before the transition date. The Company chose to prospectively apply IFRS 3 to
business combinations occurring on or after the transition date. The business combinations before the transition date were
not modified.

Alpek, S. A. B. de C. V. And SuBSidiArieS

1.1.3. Exemption to remove a cumulative foreign currency translation

IFRS 1 allows canceling cumulative gains and losses in the foreign currency translation at the transition date. This exemption
allows not calculating the cumulative translation effect in accordance with IAS 21, “The effects of changes in foreign
exchange rates” (“IAS 21”), as of the date on which the subsidiary or investment accounted through the equity method
was established or acquired. The Company chose to zero all cumulative gains and losses from translation against retained
earnings under IFRS at the transition date.

1.1.4. Exemption for labor obligations

The IFRS 1 allows not applying IAS 19, “Employee Benefits” (“IAS 19”) retrospectively, for the recognition of actuarial gains
and losses. In line with this exemption, the Company chose to recognize all cumulative actuarial gains and losses that existed
at the transition date against retained earnings under IFRS.

1.1.5. Exemption to capitalize borrowing costs

IFRS 1 allows entities to apply the transitional guidelines included in the revised IAS 23, “Capitalization of borrowing costs”
(“IAS 23”), which interpret that the effective date of the rule is January 1, 2009 or the transition date to IFRS, whichever
comes later.

For any cost by unfunded loan at the transition date, the Company chose to apply this exemption and begin to capitalize
borrowing costs from the transition date prospectively.

1.2. Mandatory exceptions of IFRS

1.2.1. Exception of hedging accounting

Hedging accounting can only be applied prospectively from the transition date to transactions that meet the criteria of IAS 39
“Financial Instruments: Recognition and Measurement “, at that time. Hedging accounting can only be applied prospectively
from the transition date and is not allowed to create retrospectively documentation supporting a hedging relationship.
All hedging transactions contracted by the Company met the criteria for hedging accounting as of January 1, 2011 and,
accordingly, are reflected as hedging in the statements of financial position of the Company under IFRS.

1.2.2. Exception for accounting estimates

Estimates under IFRS at the transition date are consistent with those made under MFRS around the same time .

Additionally, the Company prospectively applied the following mandatory exceptions from January 1, 2011: derecognition (disposal) of
financial assets and financial liabilities and non-controlling portion, without significant impact.

2. Reconciliations from MFRS to IFRS

IFRS 1 require a reconciliation of equity, comprehensive income statement and cash flows for the prior periods. The first time adoption of
the Company had no impact in the total operating, investing and financing operation. The following tables represent the reconciliations
of MFRS to IFRS for the respective periods in equity and statement of comprehensive income consolidated and combined.

A) Reconciliation of consolidated and combined Balance Sheet.
B) Reconciliation of consolidated and combined Statements of Income.
C) Reconciliation of consolidated and combined Statement of Comprehensive Income.
D) Description of the effects from the transition to IFRS.
E) Explanation of significant effects of transition to IFRS in the consolidated statement of cash flows for the year ended on December

31, 2012.

Alpek, S. A. B. de C. V. And SuBSidiArieSA) Reconciliation of consolidated and combined Balance Sheets:

Note

December 31, 2011
Adj.

MFRS

IFRS

MFRS

January 1,2011
Adj.

IFRS

Assets
Current assets:
Cash and cash equivalents
Restricted cash and cash
equivalents
Trade and other receivables, net
Inventories
Derivative financial instruments
Other current assets
Total current assets

Ps 3,584,287 Ps

- Ps 3,584,287 Ps 3,231,935 Ps

- Ps 3,231,935

g)
b)

1,925
13,347,056
12,324,968
49,450
231,295
29,538,981

1,925
(65,895) 13,281,161
(4,805) 12,320,163
49,450
231,295
(70,700) 29,468,281

-
-

283,647
9,328,612
6,895,565
207,100
120,284
20,067,143

-
(65,895)
(314,856)
-
66,310
(314,441)

283,647
9,262,717
6,580,709
207,100
186,594
19,752,702

Non-current:
Derivative financial instruments
Property, plant and
equipment, net
b)
Goodwill and intangible assets, net a) c) g)
e)
Deferred income tax assets
g)
Other non-current assets
Total non-current assets
Total Assets

26,630

104,720

23,173,072
2,762,591
1,181,504
278,206
27,422,003

22,125,158
188,355
706,139
137,626
23,261,998
Ps 56,960,984 Ps 5,191,973 Ps 62,152,957 Ps 38,178,754 Ps 4,835,946 Ps 43,014,700

5,706,010 28,879,082
2,549,420
(213,171)
939,983
(241,521)
289,561
11,355
5,262,673 32,684,676

16,547,186
355,349
966,730
137,626
18,111,611

5,577,972
(166,994)
(260,591)
-
5,150,387

Note

December 31, 2011
Adj.

MFRS

IFRS

MFRS

Adj.

IFRS

January 1,2011

Liabilities and equity
Liabilities:
Current liabilities:
Current debt
Trade and other payables
Derivative financial instruments
Income tax payable
Other current liabilities
Total current liabilities

Non-current liabilities:
Non-current debt
Derivative financial instruments
Deferred income tax liabilities
Employee benefits
Total non-current liabilities
Total Liabilities

e)
d)

Equity:
Controlling portion:
Common stock
Retained earnings
Other reserves
Stockholders’ equity controlling portion
Non- controlling portion
Total Equity
Total Liabilities and Equity

a)
a) b) d) e) h)
j)

Ps 2,141,974 Ps
13,215,063
438,741
301,293
2,558,450
18,655,521

- Ps 2,141,974 Ps 1,428,999 Ps

3,306 13,218,369
-
438,741
-
301,293
2,578,872
20,422
23,728 18,679,249

7,696,002
88,418
279,849
1,717,916
11,211,184

- Ps 1,428,999
7,699,308
88,418
279,849
1,696,129
11,192,703

3,306
-
-
(21,787)
(18,481)

17,798,811
743,063
4,000,064
345,983
22,887,921
41,543,442

-
1,125,609
915,079

(254,025) 17,544,786
743,063
5,125,673
1,261,062
1,786,663 24,674,584
1,810,391 43,353,833

7,851,761
1,150,668
3,507,086
36,469
12,545,984
23,757,168

(64,877)
-
1,131,302
535,963
1,602,388
1,583,907

7,786,884
1,150,668
4,638,388
572,432
14,148,372
25,341,075

-
2,874,563
(29,683)

4,968,187
6,264,594
1,176,887
12,409,668
3,007,874
15,417,542

2,917,204
11,617,447
49,584
14,584,235
3,089,390
17,673,625
Ps 56,960,984 Ps 5,191,973 Ps 62,152,957 Ps 38,178,754 Ps 4,835,946 Ps 43,014,700

4,968,187
9,139,157
1,147,204
2,844,880 15,254,548
3,544,576
3,381,582 18,799,124

4,467,467
7,057,426
250,185
11,775,078
2,646,508
14,421,586

(1,550,263)
4,560,021
(200,601)
2,809,157
442,882
3,252,039

536,702

Alpek, S. A. B. de C. V. And SuBSidiArieS

B) Reconciliation of consolidated and combined Statements of Income:

For the year ended December 31, 2011

Net sales
Cost of sales
Gross profit
Selling expenses
Administrative expenses
Other expenses, net
Operating Profit
Financial income
Financial expenses
Foreign exchange loss
Comprehensive financing expense, net
Share of losses of associates
Profit before income tax
Income tax
Profit of the year

Attributable to:
Controlling portion
Non- controlling portion

Note

b) h)

d)
d)
g)

d) i)
i)
b)

MFRS

90,666,561
(80,529,352)
10,137,209
(961,285)
(1,131,129)
(553,119)
7,491,676
86,611
(1,185,998)
(106,524)
(1,205,911)
(22,965)
6,262,800
(1,972,651)
4,290,149

3,791,728
498,421

Ps
Ps

Adj.

-
(123,817)
(123,817)
(11,466)
4,536
227,637
96,890
137,897
(137,145)
14,936
15,688
-
112,578
25,026
137,604

107,614
29,990

Ps
Ps

IFRS

90,666,561
(80,653,169)
10,013,392
(972,751)
(1,126,593)
(325,482)
7,588,566
224,508
(1,323,143)
(91,588)
(1,190,223)
(22,965)
6,375,378
(1,947,625)
4,427,753

3,899,342
528,411

Ps
Ps

C) Reconciliation of consolidated and combined Statements of Comprehensive Income:

Profit for period
Other comprehensive income, net of taxes
Effect of derivative financial instruments
designated as cash flows hedging
Actuarial losses of labor obligations
Translation effect of foreign entities
Total items of the comprehensive income for the year
Total comprehensive income for the year

Attributable to:
Controlling portion
Non-controlling portion
Total comprehensive income for the year

D) Description of the effects from the transition to IFRS

For the year ended December 31, 2011

Note

MFRS

Adj.

IFRS

4,290,149

137,604

4,427,753

d)
j)

(264,596)
-
1,507,950
1,243,354
5,533,503

4,718,430
815,073
5,533,503

25,061
(242,128)
209,006
(8,061)
129,543

35,724
93,819
129,543

(239,535)
(242,128)
1,716,956
1,235,293
5,663,046

4,754,154
908,892
5,663,046

a) Recognition of effects of inflation
In accordance with IAS 29, “Financial reporting in hyper-inflationary economies”, the effects of inflation in the financial information must
be recognized for hyper-inflationary economies, when the accumulated inflation rate for the last three years is approaching, or exceeds
100%, whereas under MFRS, such threshold is met at 26% during the same period. Since the Company and its main subsidiaries are
located in non-hyper-inflation economies such as United States of America and Mexico, the effects of inflation recognized under MFRS
until 2007 were cancelled for the non-hyper-inflationary periods, except for “Property, plant and equipment (due to the deemed cost
exception of IFRS 1) and for “Goodwill” (due to the business combinations exception).

b) Property, plant and equipment, net
The transition to IFRS adjustment made to property, plant and equipment has been the most important to the Company. At the transition
date, the Company chose to revalue the most important items of property, plant and equipment (land, building and machinery) at fair
value by an independent appraiser, and use the revalued amount as deemed cost at the transition date according to the options identified
under IFRS 1, “First-time Adoption of IFRS”; for the rest of the assets that are part of the property, plant and equipment, the Company
considered the values recorded in books as deemed cost at the transition date.

Alpek, S. A. B. de C. V. And SuBSidiArieS

The previous carrying amounts and fair values of the assets revalued at the transition date are as follows:

Land
Buildings
Machinery
Total

Carrying value

777,832
1,804,510
13,964,845
16,547,187

Adjustment

2,004,063
468,079
3,105,829
5,577,971

Fair Value

2,781,895
2,272,589
17,070,674
22,125,158

At January 1, 2011, some components of machinery and equipment were classified as inventories under MFRS. These components met
the definition of property, plant and equipment in accordance with IAS 16 under IFRS, so that in its opening balance sheet, the Company
reclassified them inventory under MFRS to property, plant and equipment under IFRS of Ps 314,856 to his historical cost.

c) Intangible assets, net
At the transition date, the cumulative update of intangible assets (including goodwill) that was generated after December 31, 1997 for
companies in Mexico was eliminated. The debt issuance costs that meet the capitalization criteria must be submitted as part of net debt
balance. The amortization and recognition of debt issuance costs will be based on the effective interest method. At the transition date,
the Company reclassified the debt issuance costs recorded as intangible assets to non-current debt in the calculation of amortized cost.

d) Employee benefits
The MFRS D-3 “Employee’s Benefits” all termination benefits, including those that are paid in the event of involuntary termination,
are considered in the actuarial calculation to estimate the liability for labor obligations. For IAS 19 “Employees’ Benefits”, an entity
recognizes termination benefits as a liability as long as the entity is required to:

(a) terminate the contract of an employee before the retirement date; or

(b) establish termination benefits as a result of offers made to encourage voluntary waiver. Therefore, the Company canceled the provision

recorded at the transition date.

Under MFRS, the Company had a liability of transition, which is amortized over a maximum period of 5 years. Under IFRS, these liabilities
had been recognized since the creation of plans and consequently there would be no transition liability and their respective amortization.

In accordance with IFRS 1, the Company recognized actuarial gains and losses accumulated in retained earnings at the transition date.

Additionally, in accordance with IAS 19 “Employee Benefits”, the employees’ statutory profit sharing (ESPS) is considered as a benefit
given to employees who paid based on the service provided by the employee. No deferred ESPS is recognized based on the asset and
liability method given that this method only applies to taxes on profits, so Alpek, as of the transition date, eliminated the deferred ESPS
balance from the financial statements.

e) Deferred taxes
Derived from the exemptions applied as well as the differences described here, the accounting value of certain assets and liabilities were
modified, so deferred taxes were recalculated using the guidelines of IAS 12 “Income Taxes”.

f) Other income (expense), net
Under IFRS, “other expenses/income” should be presented as part of operating income previously presented under MFRS after operating
income, because they are considered unusual or infrequent items. Alpek reclassified the other expenses/income to be part of operating
income

g) IFRS reclassifications
Arising from the adoption of IFRS, the Company made certain reclassification to adjust the figures to the new presentation rules.

h) Sale and leaseback
Under MFRS, the gain from the sale of this type of lease is amortized over the life of the operating lease. Arising from the adoption of
IFRS, the gain from the sale is immediately recognized in income.

i) Effective interest rate
In accordance with IFRS, financial liabilities are initially recognized at fair value and subsequently measured at amortized cost, using the
effective interest rate method, which is based on the discount rate that equates to the cash flows estimated to pay over the expected life
of the debt. The Company recognizes the value of its debt at amortized cost.

Alpek, S. A. B. de C. V. And SuBSidiArieS

ALPEk, S. A. B. DE C. V. AND SUBSIDIARIES

j) Cumulative translation adjustment
According to IFRS 1 “First-time Adoption of International Financial Reporting Standards”, Alpek adopted the exemption applying the
cumulative translation effect to retained earnings on the transition date and restart the calculation.

E) Description of significant effects from the transition to IFRS in the consolidated cash flow statement for the year ended December 31,

2011.

The Company uses the indirect method to present the cash flow statement, both under Mexican FRS and IFRS, which do not differ
significantly in their presentation.

31 – Share-based payments

The Company has a compensation scheme referenced to the value of the shares of its parent company for senior executives of Alpek
and its subsidiaries. According to the terms of the plan, eligible executives will receive a cash payment conditional on the achievement
of certain quantitative and qualitative metrics based on the following financial measures:

• Improvement in the share price

• Improvement in the net profit

• Permanence of the executives in the Company

The program consists of determining a number of shares to which the executives shall have rights, the bonus will be paid in cash over
the next five years, i.e. 20% each year, at the average price of the share at the end of each year. The average price of the share in 2012,
2011 and 2010 in pesos was Ps 28.23, Ps 15.77 and Ps 11.67, respectively.

32 – Subsequent Events

At the Annual General Meeting held on Indelpro on January 6, 2013, the stockholders declared and paid dividends in cash for a total
amount of Ps 134,483 to the non-controlling portion.

JOsé dE JEsús ValdEz sIMaNCas
Chief Executive Officer

Raúl MIllaREs NEyRa
Chief Financial Officer

Glossary

Purified Terephthalic Acid (PTA)
Aromatic dicarboxylic acid, the main raw material in
polyester production. PTA is produced by the oxidation of
paraxylene. It is used to manufacture PET, which is then used
to make bottles for water, soft drinks and other beverages,
containers and other packaging, and polyester fiber for
rugs, clothing, furniture and industrial applications, as well
as other consumer products.

by credit-risk rating agencies such as Fitch Ratings, Standard
& Poor’s and Moody’s.

Integrex®
Alpek-owned technology for producing PTA and PET from
paraxylene (PX) and monoethylene glycol (MEG), offering
significant cost savings and fewer intermediate steps in the
production process.

Self-regulation of Health and Safety in the
Workplace, Level 4 Certification
Program implemented by the Mexican Ministry of Work and
Social Welfare to verify that companies have implemented
administrative systems that promote safe, hygienic work
centers.

Polyester Chain
Alpek business that comprises all the companies involved
in polyester production, from the raw material (PTA) to the
production of PET and fibers.

Caprolactam (CPL)
CPL is made by reacting cyclohexane, ammonia and sulfur
and is the raw material for the production of Nylon 6 polymer.
Nylon 6 is a synthetic resin that, because of its strength,
flexibility and softness, has a range of end uses, including for
sportswear, underclothes and engineering plastics.

Clean Industry Certification
Certification granted by the Mexican Environmental
Protection Agency (PROFEPA) to companies that comply
with environmental legislation.

ISO 9001 Certification
Certification issued by rating agencies to those companies
that operate with proven procedures for assuring the quality
of their products, in accordance with the standard defined
by the International Organization for Standardization (ISO).

ISO 14001 Certification
Internationally accepted standard for establishing an
efficient Environmental Management System (EMS). The
standard is designed to support companies’ profitability and
at the same time minimize environmental impact.

CO2 Emissions
Unit to measure the carbon dioxide produced by the burning
of solid, liquid and gaseous fuels, including natural gas.

Investment Grade
Rating given to a company as a result of an evaluation made

Megawatt
Unit of power, equal to 1 million watts.

Watt
Unit of power in the International System of Units (SI).

Monoethylene Glycol (MEG)
Raw material with diverse industrial uses, especially for
producing polyester (PET and fiber), antifreeze, refrigerants
and solvents.

Paraxylene (PX)
Hydrocarbon in the xylene family used to produce PTA. It is
also a component of gasoline.

Expandable Polystyrene (EPS)
Light, rigid, cellular plastic, product of the polymerization of
styrene monomer. EPS is a versatile material because of its
properties as an impact reducer and thermal insulator, and
customized molding capacity. These properties, combined
with the ease with which it can be processed, make EPS
a popular packaging for impact-sensitive items and for
protecting perishables. It is also widely used in construction
systems, to lighten floor and roof structures, and as an
insulator.

Polyethylene Terephthalate (PET)
Material widely used in the manufacture of bottles and
other containers for liquids, food and personal hygiene,
household and healthcare products. PET flakes and films
are used to produce caps, trays and recipients. Because of
its transparency, strength, durability and high protection
barriers, PET presents no known health risks, is light and
recyclable, and has a wide range of applications in reusable,
temperature-sensitive packaging. PET has replaced glass
and aluminum, as well as other plastics such as PVC and
polyethylene, for making containers.

Polypropylene (PP)
Thermoplastic polymer, produced from the polymerization
of propylene monomer. Its properties include a low specific
gravity, great rigidity, resistance to relatively high

temperatures and good resistance to chemicals and fatigue.
PP has diverse applications, including for packaging, textiles,
recyclable plastic parts and different kinds of containers,
auto-parts and polymer (plastic) banknotes.

Spherizone®
LyondellBasell’s most recent technology, which offers great
flexibility in polypropylene production and is used to make
a wide range of products.

Polyurethanes (PURs)
Rigid, flexible or elastic, durable materials that are produced
by the reaction of a polyol with an isocyanate. They are very
versatile, offering the elasticity of rubber, combined with
the hardness and durability of a metal. PURs may be hard
like fiberglass, spongy like upholstery foam, protective like
varnish, elastic like tire rubber or sticky like glue.

Single Step®
One-step technology for the production of EPS, where the
EPS pearls are impregnated with a pre-expanded agent
during the polymerization process.

Comprehensive Responsibility Administrative
System (Mexican National Association of the
Chemical Industry, ANIQ)
Certification given to companies that comply with the six
comprehensive responsibility requirements established by
the ANIQ, covering Process safety, Health and safety in the
workplace, Product safety, Transportation and distribution,
Prevention and control of environmental pollution and
Community protection.

Spheripol®
LyondellBasell-owned technology which is the world’s most
common way of producing polypropylene.

Styrene Monomer
Unsaturated hydrocarbon used to make a variety of plastics,
synthetic rubber, protective coatings and resins. It is the
main raw material in EPS production and also used as a
solvent and chemical intermediate.

Propylene
Unsaturated, 3-carbon hydrocarbon, co-product of the
cracking process at petrochemical complexes and a by-
product at oil refineries. It is used in the petrochemical industry
to produce PP, propylene oxide, cumene, isopropanol, acrylic
acid and acrylnitrile. It is also converted into a gasoline
component by alkylation with butanes or pentanes.

Cyclohexane
Compound produced by the hydrogenation of benzene and
used in caprolactam production.

Ethylene Oxide
Compound produced from ethylene and used as an
intermediate in the production of MEG and other chemicals.

Propylene Oxide
Compound produced from propylene and used to
manufacture commercial and industrial products, including
polyols, glycols and glycoethers.

Polyurethane
Thermal
insulation

Polypropylene
Refrigerator
lining

PET
Food tray

Polypropylene
Containers

Fiber
Clothing

PET
Soft drink
bottles

CoNtENts

overview and track Record

Financial and operating Highlights

Letter to shareholders

Differentiated Business Model

Polyester Chain

Plastics and Chemicals

social Responsibility

Board of Directors

Management team

Corporate Governance

Financial section

Glossary

Polypropylene
Caps

Investor Relations
Hernán F. Lozano
Sabino Parra

Av. Gómez Morín 1111-C Sur
San Pedro Garza García, N.L., Mexico 66254

IR@alpek.com

www.alpek.com

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Alpek, S.A B. de C.V.
Av. Gómez Morín 1111 Sur
Col. Carrizalejo
San Pedro Garza García
Nuevo León
CP. 66254, Mexico
www.alpek.com

track record • strength • potential

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