FORMTable 6-K of Contents

~~UNITED~~FORM ~~STATES~~6-K

~~SECURITIES~~UNITED ~~AND EXCHANGE COMMISSION~~STATES

~~Washington,~~SECURITIES DCAND ~~20549~~EXCHANGE COMMISSION

~~REPORT~~Washington, OFDC ~~FOREIGN PRIVATE ISSUER~~20549

~~PURSUANT~~REPORT ~~TO RULE 13(a)-16 OR 15(d)-16~~ OF ~~THE~~FOREIGN ~~SECURITIES~~PRIVATE ~~EXCHANGE ACT OF 1934~~ISSUER

~~INEOS~~PURSUANT ~~GROUP~~TO ~~HOLDINGS~~RULE ~~Plc~~13(a)-16 OR 15(d)-16 OF THE SECURITIES EXCHANGE ACT OF 1934

~~(Exact~~May ~~name~~30, ~~of registrant issuer as specified in its charter)~~2003

INEOS GROUP HOLDINGS ~~LIMITED~~Plc

(Exact name of registrant ~~guarantor~~issuer as specified in its charter)

~~England~~INEOS ~~and~~HOLDINGS ~~Wales~~LIMITED ~~(Jurisdiction of incorporation or organisation)~~

~~Registration~~(Exact ~~No:~~name ~~333~~of ~~87974~~registrant guarantor as specified in its charter)

~~Hawkslease,~~England ~~Chapel~~and ~~Lane, Lyndhurst, Hampshire SO43 7FG, United Kingdom~~Wales (~~Address~~Jurisdiction of ~~principal~~incorporation ~~executive~~or ~~offices~~organisation)

~~Indicate~~Registration byNo: ~~check mark whether the registrant files or will file annual reports under cover Form 20~~333-~~F or Form 40-F.~~87974

~~Form 20-F~~Hawkslease, ~~[X] Form 40-F~~Chapel ~~[ ]~~Lane, Lyndhurst, Hampshire SO43 7FG, United Kingdom (Address of principal executive offices)

Indicate by check mark whether the registrant byfiles ~~furnishing~~or ~~the~~will ~~information contained~~file inannual ~~this~~reports ~~Form is also thereby furnishing the information to the~~under ~~Commission~~cover ~~pursuant to Rule~~Form ~~12g3~~20-~~2(b)~~F ~~under~~or ~~the~~Form 40-F. ~~Securities Exchange Act of 1934~~

~~Yes~~Form 20-F [ X] No Form 40-F [X ]

~~FORWARD~~Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-~~LOOKING~~2(b) ~~STATEMENTS~~under the Securities Exchange Act of 1934

~~The~~Yes ~~Company~~[ ] No ~~includes “forward-looking statements”, within the meaning of the US~~[X] ~~securities laws, based on our current expectations and projections about future~~ ~~events, including:~~

•TABLE ~~Our~~OF high degree of leverage and significant debt service obligations as well as future cash flow and earnings; • Our sales growth across our principal businesses and our strategy for controlling costs, growing margins, increasing manufacturing capacity and production levels and making capital expenditures; • Raw material costs or supply arrangements; • Our technological and manufacturing assets and our ability to utilise them to further increase sales and the profitability of our businesses; • Our ability to retain existing customers and obtain new customers; • Our ability to develop new products and technologies successfully; • The cyclical and highly competitive nature of our businesses; • Risks related to environmental costs, liabilities or claims; and • Currency fluctuations.CONTENTS

~~All~~INEOS ~~statements~~GROUP ~~other~~HOLDINGS ~~than~~CONSOLIDATED ~~statements~~PROFIT ofAND ~~historical~~LOSS ~~facts~~ACCOUNTS ~~included~~(UNAUDITED) inINEOS ~~this report~~GROUP ~~including,~~HOLDINGS ~~without~~CONSOLIDATED ~~limitation,~~BALANCE ~~statements~~SHEETS ~~regarding~~INEOS ~~our~~GROUP ~~future~~HOLDINGS ~~financial position,~~CONSOLIDATED ~~risks~~CASH ~~and~~FLOW ~~uncertainties~~STATEMENTS ~~related~~(UNAUDITED) toINEOS ~~our~~GROUP ~~business~~HOLDINGS ~~and~~RECONCILIATION ~~the~~OF ~~notes, strategy,~~MOVEMENTS ~~capital~~IN ~~expenditures,~~EQUITY ~~projected~~SHAREHOLDERS ~~costs~~FUNDS ~~and~~INEOS ~~our~~GROUP ~~plans~~HOLDINGS ~~and~~NOTES ~~objectives for~~TO ~~future~~THE ~~operations,~~FINANCIAL ~~may~~STATEMENTS be deemed to be forward-looking statements. These forward-looking statements are subject to a number of risks and uncertainties. Words such as “believe”, “expect”, “anticipate”, “may”, “intend”, “will”, “should”, “estimate” and similar expressions or the negatives of these expressions are intended to identify forward-looking statements. In addition, from time to time we or our representatives, acting in respect of information provided by us, have made or may make forward-looking statements orally or in writing and these forward-looking statements may be included in but are not limited to press releases (~~including on our website~~UNAUDITED), ~~filings with the US Securities and Exchange Commission, reports to our security holders and other communications. Although we believe that the expectations reflected in such forward~~FORWARD-~~looking~~LOOKING ~~statements~~STATEMENTS ~~are~~OPERATING ~~reasonable,~~AND weFINANCIAL ~~can~~REVIEW ~~give~~AND noPROSPECTS ~~assurance~~SIGNATURES that such expectations will prove to be correct. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. SIGNATURES

OPERATINGTable ANDof FINANCIAL REVIEW AND PROSPECTS Contents

~~Overview~~INEOS GROUP HOLDINGS CONSOLIDATED PROFIT AND LOSS ACCOUNTS (UNAUDITED)

We are a global chemical manufacturer of speciality and intermediate chemicals. Our company is comprised of Ineos Oxide, Ineos Phenol, Ineos Fluor and Ineos Silicas.


	Three-Month Period
	Ended March 31,

	2002			2003

	(€ in millions)
Turnover		498.6			649.5
Cost of sales		(404.8	)		(551.5	)

Gross profit		93.8			98.0
Distribution costs		(38.1	)		(38.6	)
Administrative expenses		(13.2	)		(11.7	)
Exceptional administrative expenses		(2.2	)		—

Operating profit		40.3			47.7
Share of operating profit of associate		—			0.1
Net interest payable		(15.7	)		(15.2	)

Profit on ordinary activities before taxation		24.6			32.6
Taxation on profit on ordinary activities		(7.1	)		(2.8	)

Profit on ordinary activities after taxation		17.5			29.8
Equity dividends		—			—

Profit for the financial period		17.5			29.8

~~Our~~The ~~products~~accompanying ~~include~~notes ~~a wide range of ethylene-based, fluorine-based and inorganic speciality chemicals, as well as intermediate chemicals, such as phenol, acetone and ethylene glycol (EG). We believe our businesses~~ are ~~distinguished~~ byan ~~the~~integral ~~broad~~part ~~experience~~ of ~~our~~these ~~shareholders~~consolidated ~~and our management~~financial ~~teams, leading market positions, high quality and low-cost production facilities and operating diversity~~statements.

IneosTable Group Holdings — Results of Operations Contents

~~The~~INEOS ~~results~~GROUP ~~of operations of Ineos Group Holdings for the three-month and~~HOLDINGS ~~nine-month~~CONSOLIDATED ~~periods~~BALANCE ~~ended September 30, 2001 include the results of Ineos Oxide,~~SHEETS ~~Ineos Fluor and Ineos Silicas as well as Ineos Phenol which we acquired from~~ ~~Degussa AG on May 23, 2001. The results of Ineos Group Holdings for the~~ ~~three-month and nine-month periods ended September 30, 2002 are comprised of~~ ~~Ineos Oxide, Ineos Fluor and Ineos Silicas and Ineos Phenol.~~

Discussions of the results of operations of each of Ineos Oxide, Ineos Phenol, Ineos Fluor and Ineos Silicas for the three-month and nine-month periods ended September 30, 2001 and 2002 are presented herein.


	December 31, 2002			March 31, 2003

	(Audited)			(Unaudited)

	(€ in millions)
Fixed assets
Investments		1.4			1.3
Tangible fixed assets		987.8			942.7
Intangible fixed assets		14.0			13.5
Negative goodwill		(282.3	)		(264.8	)

		720.9			692.7
Current assets
Cash at bank and in hand		108.9			85.4
Stocks		162.4			146.4
Debtors : amounts falling due within one year		326.3			410.3
Debtors : amounts falling due after one year		64.0			61.9

		661.6			704.0
Creditors : amounts falling due within one year		(439.9	)		(448.5	)

Net current assets		221.7			255.5
Total assets less current liabilities		942.6			948.2
Creditors : amounts falling due after one year		(786.1	)		(776.9	)
Provisions for liabilities and charges		(70.1	)		(68.9	)

Net assets		86.4			102.4

Capital and reserves
Share capital		17.7			17.7
Share premium		51.1			51.1
Profit and loss account		17.6			33.6

Equity shareholders’ funds		86.4			102.4

The ~~following~~accompanying ~~table~~notes ~~sets~~are ~~forth,~~an ~~for~~integral ~~the~~part ~~periods~~of ~~indicated,~~these ~~our~~consolidated ~~turnover and~~financial ~~expenses and such amounts as a percentage of turnover~~statements.

	Three-Months Period Ended												Nine-Months Period Ended
	September 30,												September 30,
	2001						2002						2001						2002
	€m			%			€m			%			€m			%			€m			%
Turnover		489.4			100.0			585.7			100.0			1,066.9			100.0			1,686.3			100.0
Cost of Sales		(409.8	)		(83.7	)		(479.1	)		(81.8	)		(842.3	)		(78.9	)		(1,362.5	)		(80.8	)
Gross Profit		79.6			16.3			106.6			18.2			224.6			21.1			323.8			19.2
Distribution costs		(35.6	)		(7.3	)		(40.5	)		(6.9	)		(79.8	)		(7.5	)		(119.5	)		(7.1	)
Administrative expenses		(13.7	)		(2.8	)		(18.9	)		(3.2	)		(54.4	)		(5.1	)		(60.5	)		(3.6	)
Exceptional administrative expenses		(4.6	)		(0.9	)		(1.2	)		(0.2	)		(4.9	)		(0.4	)		(17.3	)		(1.0	)
Operating profit		25.7			5.3			46.0			7.9			85.5			8.1			126.5			7.5
Net interest payable		(19.0	)		(3.9	)		(15.0	)		(2.6	)		(60.1	)		(5.6	)		(55.2	)		(3.3	)
Exceptional finance costs		(7.9	)		(1.6	)		—			—			(28.6	)		(2.7	)		—			—
Profit/(loss) on ordinary activities before taxation		(1.2	)		(0.2	)		31.0			5.3			(3.2	)		(0.2	)		71.3			4.2
Taxation		(3.6	)		(0.7	)		(4.5	)		(0.8	)		(11.0	)		(1.0	)		(19.4	)		(1.1	)
Profit/(loss) on ordinary activities after taxation		(4.8	)		(0.9	)		26.5			4.5			(14.2	)		(1.2	)		51.9			3.1

~~Three-Month~~INEOS ~~Period~~GROUP ~~Ended~~HOLDINGS CONSOLIDATED ~~September 30,~~CASH ~~2002,~~FLOW ~~Compared~~STATEMENTS ~~to Three-Month Period~~(UNAUDITED) ~~Ended September 30, 2001~~

Turnover


	Three-Month Period
	Ended March 31,

	2002			2003

	(€ in millions)
Operating profit		40.3			47.7
Depreciation of tangible assets		24.1			25.6
Amortisation of goodwill/(write back of negative goodwill)		(2.1	)		(7.4	)
Decrease/(increase) in stocks		0.1			12.3
Decrease/(increase) in debtors		(42.4	)		(89.2	)
(Decrease)/increase in creditors and provisions		9.3			35.8

Net cash flow from operating activities		29.3			24.8
Returns on investments and servicing of finance
Interest received		0.5			0.5
Interest and other financing charges paid		(22.2	)		(30.8	)

		(21.7	)		(30.3	)
Taxation paid		(0.6	)		(3.0	)
Capital expenditure and financial investments
Payments to acquire tangible fixed assets		(6.6	)		(13.1	)
Acquisitions of businesses		(4.6	)		—
Equity dividends paid		—			—

Net cash outflow before financing		(4.2	)		(21.6	)
Financing
Loan to associate undertaking		—			0.1
Capital repayment on finance leases		(0.3	)		(0.8	)

		(0.3	)		(0.7	)

Increase/(decrease) in cash		(4.5	)		(22.3	)

~~Turnover~~The ~~increased~~accompanying bynotes ~~€96.3 million,~~are ~~approximately~~an ~~19.6%~~integral topart ~~€585.7 million~~of ~~in 2002~~these asconsolidated ~~compared to €489~~financial statements.~~4 million in 2001. This increase primarily reflects~~ ~~an increase in volumes sold for speciality~~

OPERATINGTable ANDof FINANCIAL REVIEW AND PROSPECTS Contents

~~chemicals~~INEOS ~~and~~GROUP ~~intermediate chemicals in the Ineos Oxide and Ineos Phenol~~HOLDINGS ~~business~~RECONCILIATION ~~segments.~~OF ~~The~~MOVEMENTS ~~increased~~IN ~~volumes~~EQUITY inSHAREHOLDERS ~~Ineos Oxide reflect the full~~FUNDS ~~impact of the expansion of the EO/EG plant and the new alkoxylates unit in~~ ~~Antwerp. Ineos Phenol has also experienced price increases in line with the~~ ~~increases in market prices for its products.~~

Cost of sales


	Equity
	Shareholders Funds

	(€ in millions)
At January 1, 2003		86.4
Retained profit for the current period		29.8
Currency translation differences		(13.8	)

At March 31, 2003		102.4

~~Cost~~The ofaccompanying ~~sales~~notes ~~increased~~are byan ~~€69.3 million,~~integral ~~approximately~~part ~~16.9% to €479.1 million in 2002 as compared to €409.8 million in 2001. This increase primarily reflects increased sales volumes in the speciality and intermediate business segments~~ of ~~Ineos~~these ~~Oxide~~consolidated ~~and Ineos Phenol. Ineos Phenol has also experienced~~financial ~~increased raw material prices in line with the increase in market prices for benzene and propylene~~statements.

GrossTable profit of Contents

~~Gross~~INEOS ~~profit~~GROUP ~~increased by €27.0 million approximately 33.9% to €106.6 million~~HOLDINGS inNOTES ~~2002~~TO asTHE ~~compared~~FINANCIAL toSTATEMENTS ~~€79.6 million in 2001. This increase primarily reflects~~(UNAUDITED) ~~the increased volumes sold in the Ineos Oxide and Ineos Phenol business~~ ~~segments, together with improved margins in Ineos Phenol.~~

~~Distribution~~1. ~~costs~~BASIS OF PREPARATION

~~Distribution~~Ineos ~~costs~~Group ~~increased~~Holdings byplc ~~€4.9~~(Ineos Group Holdings or the “Company”), was incorporated on May ~~million~~14, ~~approximately~~2001 ~~13.8%~~as a holding company to ~~€40.5~~house the ownership ~~million~~interests in ~~2002~~certain aschemical ~~compared~~businesses toacquired ~~€35~~and controlled by a common owner.~~6 million~~ inThese ~~2001~~businesses are comprised of Ineos Oxide (formerly Ineos plc), Ineos Fluor, Ineos Silicas and Ineos Phenol. ~~This~~With ~~increase~~effect ~~reflects~~from January 1, 2001, the ~~increase~~financial instatements ~~volumes~~present ~~sold~~the results of ~~intermediate~~operations and ~~speciality~~financial position ~~chemicals~~of Ineos Oxide, ~~together~~Ineos Fluor and Ineos Silicas. Ineos Fluor and Ineos ~~with~~Silicas ~~higher~~were ~~export~~acquired ~~volumes~~on January 9, 2001. Our results of USoperations ~~products~~reflect the bypurchase of Ineos Fluor and Ineos Silicas from an effective acquisition date of January 1, 2001. The financial statements include the results of Ineos Phenol ~~Oxide~~from ~~business~~May 23, ~~segment~~2001, the date on which it was acquired from Degussa AG.

~~Administrative~~The ~~expenses~~accompanying consolidated financial statements have been prepared on a historical cost basis in accordance with generally accepted accounting principles in the United Kingdom (''UK GAAP’’).

~~Administrative~~The ~~expenses~~consolidated ~~increased~~financial bystatements ~~€5.2 million~~include ~~approximately~~all ~~37.8%~~subsidiaries ~~to €18.9 million in 2002 as compared to €13.7 million in 2001. This increase is primarily due to the net impact~~ of ~~lower costs incurred as a result of a number of cost saving projects across~~ the Company. Intra-group transactions and ~~the~~balances ~~reclassification~~have ofbeen ~~other operating~~eliminated ~~income~~on ~~in Ineos Phenol from administrative expenses in 2001 to costs of sales in 2002~~consolidation.

~~Exceptional~~The ~~administrative~~financial ~~expenses~~and operating results for any period less than a year are not necessarily indicative of the results that may be expected for a full year.

~~Exceptional~~The ~~administrative~~accompanying ~~expenses~~consolidated ~~were~~financial ~~€1.2 million~~statements inof ~~2002~~the ~~compared~~Company ~~to €4.6~~are ~~million~~unaudited, inwith ~~2001.~~the ~~These~~exception ~~expenses~~of ~~primarily~~the ~~reflect~~balance ~~severance~~sheet ~~costs~~as ~~incurred~~at ~~in connection~~December 31, ~~with our ongoing business reorganisation in Ineos Phenol. The~~2002 ~~expenses~~which ~~incurred~~has inbeen ~~2001~~extracted ~~related~~from toaudited ~~the~~financial ~~restructuring of Ineos Fluor, Ineos Silicas and Ineos Phenol~~statements.

~~Operating~~In ~~profit~~the opinion of the management of the Company, these statements include all adjustments necessary for a fair presentation of the results of all interim periods reported herein. All adjustments are of a normal recurring nature unless otherwise disclosed. Management believes that the disclosures made are adequate for a fair presentation of results of operations, financial position and cash flows.

~~Operating profit increased by €20~~2.~~3 million~~ ~~approximately~~PRINCIPAL ~~78.9%~~ACCOUNTING ~~to €46.0~~POLICIES ~~million in 2002 compared to €25.7 million in 2001. This increase primarily~~ ~~reflects the increased volumes sold and improved margins in Ineos Phenol,~~ ~~together with a reduction in the restructuring charges incurred.~~

~~Net~~The ~~interest~~financial ~~payable~~information has been prepared using accounting policies in accordance with UK GAAP. The financial information has been prepared under the historical cost convention and in accordance with the accounting policies set out in the Company’s Form 20-F for the year ended December 31, 2002. Certain prior year amounts have been reclassified to conform with the current year’s presentation.

~~Net interest payable decreased by €4~~3.~~0 million~~ ~~approximately~~SEGMENTAL ~~21.1% to €15.0~~INFORMATION ~~million in 2002 as compared to €19.0 million in 2001. This decrease primarily~~ ~~reflects the reduction in the variable interest rates on the senior credit~~ ~~facility together with lower debt levels in 2002 as a result of scheduled and voluntary debt repayments.~~

~~Exceptional~~Class ~~finance~~of ~~costs~~business

~~Exceptional~~The ~~finance~~Company’s ~~costs~~business ~~incurred~~comprises inthe ~~2001~~production ~~were~~and ~~€7.9 million~~distribution ~~as compared to no~~of ~~such~~intermediate ~~charges~~and inspeciality ~~2002.~~chemicals ~~These~~and ~~costs~~is ~~primarily~~made ~~related~~up toof ~~the~~four ~~refinancing~~business ~~of the~~segments: ~~group~~Ineos ~~which~~Oxide, ~~took~~Ineos ~~place~~Fluor, onIneos ~~May 23,~~Silicas ~~2001~~and Ineos Phenol.

OPERATINGTable ANDof FINANCIAL REVIEW AND PROSPECTS Contents

~~Profit/(loss)~~INEOS onGROUP ~~ordinary~~HOLDINGS NOTES ~~activities~~TO ~~before~~THE ~~taxation~~FINANCIAL STATEMENTS (UNAUDITED) (Continued)

~~Profit/(loss) on ordinary activities increased by €32.2 million, approximately 2,683.~~3~~% to €31~~.~~0 million~~ inSEGMENTAL ~~2002~~INFORMATION ~~as compared to a loss of €1.2 million in~~(Continued) ~~2001. This increase primarily reflects increased volumes sold and improved~~ ~~margins in Ineos Phenol, together with a reduction in the restructuring charges~~ ~~incurred.~~

~~Taxation~~The turnover and operating profit attributable to each different class of business as measured under UK GAAP is as follows:

Taxation increased by €0.9 million approximately 25.0% to €4.5 million in 2002 as compared to €3.6 million in 2001. The increase reflects the improved profitability of the group.


	Three-Month Period
	Ended March 31,

	2002		2003

	(€ in millions)
Turnover
Ineos Oxide		115.5		121.4
Ineos Fluor		73.6		71.0
Ineos Silicas		59.0		53.9
Ineos Phenol		250.5		403.2

		498.6		649.5

EBITDA
Ineos Oxide		19.9		16.8
Ineos Fluor		12.9		15.5
Ineos Silicas		9.7		8.9
Ineos Phenol		22.0		24.8

		64.5		66.0

~~Profit/(loss)~~Reconciliation onof ~~ordinary~~earnings ~~activities~~before ~~after~~operating exceptional items, interest, taxation, depreciation and amortisation (‘EBITDA’) to operating profit:

Profit/(loss) on ordinary activities after taxation increased by €31.3 million, approximately 652.1% to €26.5 million in 2002 as compared to a loss of €4.8 million in 2001. This increase primarily reflects increased volumes sold and improved margins in Ineos Phenol, together with a reduction in the restructuring charges incurred.


	Three-Month Period
	Ended March 31,

	2002			2003

	(€ in millions)
EBITDA		64.5			66.0
Depreciation and amortisation		(22.0	)		(18.2	)
Exceptional restructuring costs		(2.2	)		—

Operating profit (including share of operating profit of associate)		40.3			47.8

~~Nine-Month~~4. ~~Period~~INCOME ~~Ended September 30, 2002, Compared to Nine-Month Period Ended~~TAXES ~~September 30, 2001~~

~~Turnover~~The income tax charge for the three-month periods ended March 31, 2002 and 2003 is calculated based on the expected effective tax rate for the year.

TurnoverTable increased by €619.4 million, approximately 58.1% to €1,686.3 million in 2002 as compared to €1,066.9 million in 2001. This increase primarily reflects the acquisition of Ineos Phenol. Contents

~~Cost~~INEOS ofGROUP ~~sales~~HOLDINGS NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED) (Continued)

~~Cost of sales increased by €520.2 million, approximately 61.7% to €1,362.~~5 ~~million in 2002 as compared to €842~~.~~3 million~~ ~~in 2001. This increase primarily~~INVENTORY ~~reflects the acquisition of Ineos Phenol.~~

Gross profit


	December 31, 2002			March 31, 2003

		(€ in millions)
Raw materials and consumables			54.5		50.6
Work in progress			12.7		14.2
Finished products			95.2		81.6

			162.4		146.4

~~Gross profit increased by €99.2 million approximately 44.2% to €323.8 million in 2002 as compared to €224.~~6 ~~million in 2001~~. ~~This increase primarily~~BORROWINGS ~~reflects the acquisition of Ineos Phenol.~~

~~Distribution~~Long-term ~~costs~~obligations as of December 31, 2002 and March 31, 2003 are as follows:

Distribution costs increased by €39.7 million approximately 49.7% to €119.5 million in 2002 as compared to €79.8 million in 2001. This increase primarily reflects the acquisition of Ineos Phenol.


	December 31, 2002				March 31, 2003

		(€ in millions)
Senior Credit Agreement			623.2			614.6
101/2% Senior Notes			260.0			260.0
Unamortised debt issue costs			(21.4	)		(20.5	)

			861.8			854.1
Less: amounts falling due within one year			(77.9	)		(79.4	)

			783.9			774.7
Finance leases			2.2			2.2

			786.1			776.9

~~Administrative~~Senior ~~expenses~~Notes

~~Administrative~~On ~~expenses~~July 19, ~~increased~~2001, bythe Company issued €~~6.1~~260 million ~~approximately~~in ~~11.~~101/2% Senior Notes due 2010 pursuant to ~~€60~~a private offering.~~5 million~~ inOn June 21, 2002 asthe ~~compared~~Company toissued €~~54.4~~ 260 million in101/2% ~~2001.~~Senior ~~This~~Notes ~~increase~~due ~~is primarily~~2010 ~~due~~pursuant to ~~the~~an ~~net~~exchange ~~impact~~offer whereby holders of ~~lower~~the ~~costs~~original ~~incurred~~notes asreceived anew ~~result~~notes ofwhich ahave ~~number~~been registered ofunder ~~cost~~the ~~saving~~US ~~projects~~Securities ~~across~~Act ~~the~~of ~~group~~1933 ~~offset~~as byamended, ~~increased~~but ~~administrative~~are otherwise identical to ~~expenses~~the asoriginal anotes. ~~result~~The ofSenior ~~the~~Notes ~~acquisition~~are oflisted ~~Ineos~~on ~~Phenol~~the Luxembourg Stock Exchange.

~~Exceptional~~The ~~administrative~~Senior ~~expenses~~Notes bear interest at 101/2% per annum, payable semi-annually in arrears on February 1 and August 1 of each year. Unless previously redeemed as noted below, the Senior Notes will be redeemed by the Company at their principal amount on August 1, 2010.

ExceptionalTable administrativeof expenses were €17.3 million in 2002 compared to €4.9 million in 2001. These expenses primarily reflect severance costs incurred in connection with our ongoing business reorganisations in Ineos Silicas and Ineos Phenol in 2002 and Ineos Fluor, Ineos Silicas and Ineos Phenol in 2001. Contents

~~OPERATING~~INEOS ~~AND~~GROUP ~~FINANCIAL~~HOLDINGS NOTES ~~REVIEW~~TO ~~AND~~THE ~~PROSPECTS~~FINANCIAL STATEMENTS (Continued)

~~Operating~~6. ~~profit~~BORROWINGS (Continued)

~~Operating~~The ~~profit~~Senior ~~increased~~Notes bywill ~~€41.0 million~~be ~~approximately~~subject ~~47.9%~~ to ~~€126.5 million~~redemption inat ~~2002~~any ~~compared~~time prior to ~~€85.5~~August ~~million~~1, 2004, at the option of the Company, in ~~2001.~~whole ~~This~~but ~~increase~~not ~~primarily~~in part, at a redemption ~~reflects~~price ~~the~~equal ~~acquisition~~to 100% of ~~Ineos~~the ~~Phenol~~principal amount thereof, plus the applicable redemption premium and accrued and unpaid interest to the redemption date.

~~Net~~The ~~interest~~Senior ~~payable~~Notes will be subject to redemption at any time on or after August 1, 2004, at the option of the Company, in whole or in part, at the following redemption prices (expressed as percentages of the principal amount), if redeemed during the 12-month period beginning August 1 of the years indicated below:

Net interest payable decreased by €4.9 million approximately 8.1% to €55.2 million in 2002 as compared to €60.1 million in 2001. This decrease primarily reflects the new finance structure put in place to fund the acquisition of Ineos Phenol on May 23, 2001.


	Redemption
Year	Price

2004		110.500	%
2005		107.788	%
2006		105.250	%
2007		102.625	%
2008 and thereafter		100.000	%

~~Exceptional~~In ~~finance~~each ~~costs~~case, the redemption premium will be in addition to accrued and unpaid interest, if any, to the redemption date (subject to the rights of holders of record on relevant record dates to receive interest due on an interest payment date).

~~Exceptional~~In ~~finance~~addition, ~~costs~~at ~~incurred~~any intime ~~2001~~on ~~were~~or ~~€28.6~~prior to August ~~million~~1, as2004, ~~compared~~the toCompany noor the ~~such~~direct ~~charges~~or indirect parent of the Company, at its option, may use the net cash proceeds of one or more public equity offerings to redeem Senior Notes in ~~2002~~an amount up to an aggregate of 35% of the sum of the initial aggregate principal amount of Senior Notes originally issued under the Indenture at a redemption price equal to 110.50% ~~These~~of ~~costs~~the ~~primarily~~aggregate ~~related~~principal amount thereof, plus accrued and unpaid interest thereon, if any, to the ~~refinancing~~redemption date; provided that Senior Notes in an amount equal to at least 65% of the sum of the initial ~~group~~aggregate ~~which~~principal ~~took~~amount ~~place~~of onNotes ~~May 23,~~originally ~~2001~~issued under the Indenture remain outstanding immediately after the occurrence of such redemption.

~~Profit/(loss)~~The Senior Notes are unsecured. The Senior Notes are guaranteed by Ineos Holdings on ~~ordinary~~a ~~activities~~senior ~~before~~subordinated ~~taxation~~basis. Such a guarantee only becomes due 179 days after an event of default on the Senior Notes has occurred or earlier under certain circumstances.

~~Profit/(loss)~~The onSenior ~~ordinary~~Notes ~~activities~~are ~~increased~~stated bynet ~~€74.5 million,~~of ~~approximately 2,328.1%~~debt toissue costs of €715.31 million in (2002: ~~as compared to a loss of~~ €35.~~2 million in~~3 ~~2001~~million). ~~This~~These ~~increase~~costs ~~primarily~~are ~~reflects~~allocated to the ~~net~~profit ~~impact~~and ofloss ~~the~~account ~~acquisition~~over ofthe ~~Ineos~~term ~~Phenol,~~of the ~~exceptional~~Senior ~~restructuring~~Notes ~~charges incurred~~ in ~~2002~~accordance ~~and~~with ~~the exceptional~~FRS ~~finance costs incurred in 2001~~4.

~~Taxation~~The Indenture contains a number of operating and financial covenants including limitations on indebtedness, restricted payments, transactions with affiliates, liens, sale of assets and dividend payments.

~~Taxation~~Senior ~~increased~~Credit ~~by €8.4 million approximately 76.4% to €19.4 million in 2002~~Agreement ~~as compared to €11.0 million in 2001. The increase reflects the improved~~ ~~profitability of the group.~~

~~Profit/~~The Company has outstanding borrowings under a credit agreement (~~loss~~the “Senior Credit Agreement”) which consists of Term Loans (“Term Loan A,” “Term Loan B” and “Term Loan C”) and a revolving credit facility (the “Revolving Credit Facility”). The Term Loans outstanding at March 31, 2003 were €614.6 million, of which €79.4 million is due within one year. The total amounts outstanding on Term ~~ordinary~~Loan ~~activities~~A ~~after~~were ~~taxation~~€309.1 million (2002: €312.4 million), Term Loan B were €172.4 million (2002: €172.4 million) and Term Loan C were €133.1 million (2002: €138.4 million).

Profit/(loss)Table on ordinary activities after taxation increased by €66.1 million, approximately 465.5% to €51.9 million in 2002 as compared to a loss of €14.2 million in 2001. This increase primarily reflects the net impact of the acquisition of Ineos Phenol, the exceptional restructuring charges incurred in 2002 and the exceptional finance costs incurred in 2001. Contents

~~OPERATING~~INEOS ~~AND~~GROUP ~~FINANCIAL~~HOLDINGS NOTES ~~REVIEW~~TO ~~AND~~THE ~~PROSPECTS~~FINANCIAL STATEMENTS (Continued)

~~Ineos~~6. ~~Oxide~~BORROWINGS (Continued)

~~The~~Term ~~following~~Loan ~~table~~A ~~sets~~is ~~forth~~repayable in 12 semi-annual instalments beginning on December 31, ~~for~~2001 ranging from 1.14% to 9.73% of the ~~three-month~~principal ~~and~~amount ~~nine-month~~of ~~periods~~the loan up ~~ended~~until ~~September~~the final repayment in June 2007. Term Loan B is repayable in 14 semi-annual instalments beginning on December 3031, 2001 ~~and~~ranging ~~2002,~~from ~~turnover~~0.56% ~~and~~to 46.64% ~~expenses~~of the principal amount of ~~Ineos~~the ~~Oxide~~loan ~~and~~up until the final repayment in June ~~such~~2008. ~~amounts~~Term asLoan ~~percentages~~C is repayable in 16 semi-annual instalments beginning on December 31, 2001 ranging from 0.56% to 46.08% of ~~turnover~~the principal amount of the loan up until the final repayment in June 2009.

	Three-Month Period Ended												Nine-Month Period Ended
	September 30,												September 30,
	2001						2002						2001						2002
	€m			%			€m			%			€m			%			€m			%
Turnover		115.7			100.0			134.8			100.0			328.6			100.0			377.7			100.0
Cost of Sales		(86.8	)		(75.0	)		(99.6	)		(73.9	)		(260.1	)		(79.2	)		(281.9	)		(74.6	)
Gross Profit		28.9			25.0			35.2			26.1			68.5			20.8			95.8			25.4
Distribution costs		(7.8	)		(6.7	)		(13.1	)		(9.7	)		(17.9	)		(5.5	)		(36.5	)		(9.7	)
Administrative expenses		(3.8	)		(3.3	)		(3.4	)		(2.5	)		(6.8	)		(2.0	)		(9.7	)		(2.6	)
Operating profit		17.3			15.0			18.7			13.9			43.8			13.3			49.6			13.1
EBITDA		20.8			18.0			21.5			15.9			52.6			16.0			57.8			15.3

The Term Loans bear interest at a rate equal to a margin plus either EURIBOR or LIBOR. The applicable per annum margins for the Term Loan A, Term Loan B and Term Loan C are 2.25%, 2.75% and 3.25% respectively. The margins on Term Loans A and B are subject to a reduction based on certain financial tests. The Company pays a commitment fee of 0.75% per annum on the undrawn amounts of the revolving credit facility.

~~Three-Month~~Ineos ~~Period~~Holdings ~~Ended~~Limited ~~September 30,~~and ~~2002,~~substantially ~~Compared~~all toof ~~Three-Month~~its ~~Period~~material subsidiaries are ~~Ended~~guarantors ~~September 30,~~of ~~2001~~the Senior Credit Agreement. Their obligations are secured by fixed and floating charges over all of the assets of Ineos Holdings Limited and substantially all of the assets of those material subsidiaries.

~~Turnover~~The Senior Credit Agreement contains numerous operating and financial covenants including requirements to maintain minimum coverage of interest expense, minimum coverage of total debt service and a maximum leverage ratio. In addition, the Senior Credit Agreement includes covenants relating to, among other things, limitations on indebtedness, ability to give guarantees, creation of security interests, making acquisitions and investments, disposing of assets and paying dividends.

~~Turnover~~The ~~increased~~Term byLoans €are ~~19.1 million,~~stated ~~approximately~~net ~~16.5%,~~of toUnamortised €debt ~~134.8 million for~~issue ~~the~~costs ~~three-month~~of ~~period ended September~~€15.4 ~~30,~~ million (2002,: ~~as compared to~~ € ~~115~~16.7 1 million ~~for the same period in 2001~~). ~~This~~These ~~increase~~costs ~~reflects~~are anallocated ~~increase~~to ~~in volumes sold for speciality chemicals and intermediate chemicals off set by slightly lower selling prices. Across~~ the ~~business~~profit ~~higher volumes~~ and ~~increased~~ ~~third~~loss ~~party services revenues have been offset by decreasing selling~~account ~~prices.~~in ~~The~~accordance ~~increased~~with ~~volumes~~FRS ~~reflects the full impact of the expansion of the EO/EG plant and the new alkoxylates unit and also includes the recently acquired Acetate Esters business (acquired on March 1, 2002~~4.)

The average North Western Europe price for EO as per ICIS LOR decreased to € 925 per tonne for the three-month period ended September 30, 2002, as compared to € 951 per tonne for the same period in 20017. ~~Whereas the average North~~CONTINGENCIES ~~Western Europe prices for monoethylene glycol (MEG) as per ICIS LOR decreased~~ ~~to € 550 per tonne for the three-month period ended September 30, 2002 as~~ ~~compared to € 565 per tonne for the same period in 2001.~~

~~Cost~~The company is subject to various proceedings instituted by governmental authorities arising under the provisions of ~~sales~~applicable laws or regulations relating to the discharge of materials into the environment or otherwise relating to the protection of the environment. In management’s opinion, none of the proceedings is material to the financial condition or results of operation of the company.

~~Cost of sales increased by € 12.~~8 ~~million, approximately 14~~.~~7%,~~ toRECENT €ACCOUNTING ~~99.6~~DEVELOPMENTS ~~million for the three-month period ended September 30, 2002, as compared to €~~ ~~86.8 million for the same period in 2001. This increase primarily reflects~~ increased sales volumes in the speciality and intermediate businesses, together with the effect of the recently acquired Acetate Esters business. This increase was partly offset by decreased ethylene prices.

~~The~~In ~~average~~June ~~North~~2001, ~~Western~~the ~~Europe~~FASB ~~Contract~~issued ~~Price~~SFAS ~~for~~143, ~~ethylene~~“Accounting ~~referenced~~for byAsset ~~ICIS~~Retirement ~~LOR~~Obligations.” ~~decreased~~The tostandard €provides ~~540~~the ~~per~~accounting ~~tonne~~requirements for retirement obligations associated with tangible long-lived assets. The standard requires that the ~~three~~obligation associated with the retirement of tangible long-~~month~~lived assets ~~period~~be ~~ended~~capitalized 30into ~~September~~the asset cost at the time of initial recognition. ~~2002~~The ~~compared~~liability is then discounted to €its ~~608~~fair ~~per~~value ~~tonne~~at ~~for~~the time recognition using the ~~same~~guidance ~~period~~provided by that standard. The Company is required to comply with SFAS 143 in ~~2001~~its financial statements for the year ending December 31, 2003. The Company is currently assessing the impact of SFAS 143 on its financial position and results of operations and does not believe the financial statements will be materially impacted by its adoption.

OPERATINGTable ANDof FINANCIAL REVIEW AND PROSPECTS Contents

~~Gross~~INEOS ~~profit~~GROUP HOLDINGS NOTES TO THE FINANCIAL STATEMENTS (Continued)

~~Gross profit increased by € 6.3 million, approximately 21.~~8~~%, to € 35~~.~~2 million for~~ ~~the~~RECENT ~~three-month~~ACCOUNTING ~~period~~DEVELOPMENTS ~~ended September 30, 2002, as compared to € 28.9~~(Continued) ~~million for the same period in 2001. This increase reflects the increased~~ ~~volumes sold of intermediates and specialities and includes the additional~~ ~~volume and margin on Acetate Esters.~~

~~Distribution~~In ~~costs~~April 2002, the FASB issued SFAS No. 145, “Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections.” This statement eliminates the automatic classification of gain or loss on extinguishment of debt as an extraordinary item of income and requires that such gain or loss be evaluated for extraordinary classification under the criteria of Accounting Principles Board No. 30 “Reporting Results of Operations.” This statement also requires sales-leaseback accounting for certain lease modifications that have economic effects that are similar to sales-leaseback transactions, and makes various other technical corrections to existing pronouncements. This statement will be effective for the Company for the year ending December 31, 2003. The provisions of this statement relating to sale-leaseback accounting became effective for the Company in the current fiscal year, the adoption of which had no impact on our results of operations or financial position. The provisions of this statement relating to the classification of gains or losses arising on debt extinguishment will become applicable for the Company for the year ending December 31, 2003 and the Company does not believe the financial statements will be materially affected by its adoption.

~~Distribution~~In ~~costs~~July ~~increased~~2002, bythe €FASB 5issued SFAS No.3 ~~million,~~146 ~~approximately~~“Accounting ~~67.9%,~~for toCosts €Associated with 13Exit or Disposal Activities” (“SFAS 146”).~~1 million~~ SFAS 146 is effective for ~~the~~exit or ~~three-month~~disposal ~~period~~activities ~~ended~~initiated ~~September~~after December 3031, 2002,. asThis ~~compared~~standard will require Companies to €recognise costs associated with exit or disposal ~~7.8 million~~activities ~~for~~when they are incurred rather than at the ~~same~~date ~~period~~of ina ~~2001~~commitment to an exit or disposal plan. ~~This~~The ~~increase~~standard ~~reflects~~replaces the ~~increase~~existing guidance provided by inEITF ~~volumes~~Issue ~~sold~~No. 94-3, of“Liability ~~intermediate~~Recognition for Certain Employee Termination Benefits and ~~speciality~~Other ~~chemicals,~~Costs ~~higher~~to ~~export~~Exit ~~volumes~~an Activity (including Certain Costs Incurred ofin USa ~~products~~Restructuring).” ~~and~~The ~~the~~Company ~~impact~~does ofnot ~~the~~have ~~recently~~any ~~acquired~~immediate ~~Acetate~~plans ~~Esters~~to initiate ~~business~~any activities in 2003 that would be included within the scope of this standard.

~~Administrative~~On ~~expenses~~November 25, 2002, the FASB issued FASB Interpretation No. 45 (“FIN 45” or the “Interpretation”), Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others (an interpretation of FASB Statements No. 5, 57 , and 107 and rescission of FASB Interpretation No. 34). FIN 45 clarifies the requirements of FASB Statement No. 5 (FAS 5), Accounting for Contingencies, relating to a guarantor’s accounting for, and disclosure of, the issuance of certain types of guarantees. The Interpretation’s provisions for initial recognition and measurement are to be applied on a prospective basis to guarantees issued or modified after December 31, 2002, irrespective of the guarantor’s fiscal year-end. The guarantor’s previous accounting for guarantees that were issued before the date of FIN 45’s initial application may not be revised or restated to reflect the effect of the recognition and measurement provisions of the Interpretation. The Company is currently assessing the impact that the recognition and measurement requirements will have on future reporting.

~~Administrative~~On ~~expenses~~January 17, ~~decreased~~2003, bythe €FASB 0issued FASB Interpretation No.4 ~~million~~46 (“FIN 46” or the “Interpretation”), ~~approximately~~Consolidation ~~10.5%~~of Variable Interest Entities, an interpretation of ARB 51. The primary objectives of FIN 46 are to €provide 3guidance on the identification of entities for which control is achieved through means other than through voting rights (“variable interest entities” or “VIEs”) and how to determine when and which business enterprise should consolidate the VIE (the “primary beneficiary”).4 This consolidation model applies to an entity which either (1) ~~million~~the ~~for~~equity investors (if any) do not have a controlling financial interest or (2) the ~~three-month~~equity ~~period~~investment ~~ended~~at ~~September~~risk is insufficient to finance that entity’s activities without receiving additional subordinated financial support from other parties. In addition, FIN 46 requires that both the primary beneficiary and all other enterprises with a significant variable interest in a VIE make additional disclosures. The effective date relating to implementation and disclosure requirements included in the Interpretation are for VIEs created before February 301, ~~2002~~2003, aseffective no ~~compared~~later tothan the beginning of the first interim or annual reporting period €beginning ~~3.8~~after June ~~million~~15, 2003 and for VIEs created after January 31, 2003, effective immediately. The Company is currently assessing the ~~same~~impact ~~period~~of inFIN ~~2001~~46 on its financial position and results of operations and does not believe the financials statements will be materially impacted by its adoption.

OperatingTable profitof and EBITDA Contents

~~Operating~~INEOS ~~profit~~GROUP ~~increased by € 1.4 million, approximately 8.1%, to € 18.7~~HOLDINGS ~~million~~NOTES ~~for~~TO ~~the~~THE ~~three-month~~FINANCIAL ~~period~~STATEMENTS ~~ended September 30, 2002, as compared to €~~(Continued) ~~17.3 million for the same period in 2001. EBITDA increased by € 0.7 million,~~ ~~approximately 3.3%, to € 21.5 million for the three-month period ended~~ ~~September 30, 2002, as compared to € 20.8 million for the same period in 2001.~~

~~Nine-Month~~8. ~~Period~~RECENT ~~Ended~~ACCOUNTING ~~September 30,~~DEVELOPMENTS ~~2002, Compared to Nine-Month Period Ended~~(Continued) ~~September 30, 2001~~

~~Turnover~~In April 2003, the FASB issued SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities.” This Statement amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts (collectively referred to as derivatives) and for hedging activities under FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities. This Statement is effective prospectively for contracts entered into or modified after June 30, 2003 and prospectively for hedging relationships designated after June 30, 2003. The Company is currently analysing the impact of this Statement but does not believe that it will have a material impact on its results of operations or financial position.

~~Turnover~~In ~~increased~~May by2003, €the 49FASB issued SFAS No.1 ~~million~~150, ~~approximately~~“Accounting ~~14.9%,~~For toCertain €Financial Instruments ~~377~~with Characteristics of both Liabilities and Equity.~~7 million~~” The ~~for~~Statement improves the ~~nine-month~~accounting ~~period~~for ~~ended~~certain ~~September 30~~financial instruments that, ~~2002~~under previous guidance, issuers could account for as ~~compared~~equity toand €requires ~~328.6~~that these ~~million~~instruments ~~for~~be ~~the~~classified ~~same~~as ~~period~~liabilities in ~~2001.~~statements of financial position. This ~~increase~~Statement ~~reflects~~is aneffective ~~increase~~prospectively infor financial instruments entered ~~volumes~~into ~~sold~~or ~~for~~modified ~~speciality~~after ~~chemicals~~May 31, 2003 and ~~intermediate~~otherwise ~~chemicals~~is ~~offset~~effective byat the beginning ~~lower~~of ~~selling~~the ~~prices.~~first ~~Across~~interim ~~the~~period ~~business~~beginning ~~higher~~after ~~volumes~~June 15, ~~and~~2003. ~~increased~~This ~~third~~statement ~~party~~shall ~~services~~be ~~revenues~~implemented ~~have~~by ~~been~~reporting ~~offset~~the bycumulative ~~decreasing~~effect ~~selling~~of ~~prices.~~a ~~The~~change in an ~~increased~~accounting ~~volumes~~principle ~~reflects~~for ~~the~~financial ~~full~~instruments ~~impact~~created ofbefore the ~~expansion~~issuance date of the ~~EO/EG~~Statement ~~plant~~ and ~~the~~still ~~new~~existing ~~alkoxylates~~at ~~unit~~the inbeginning ~~Antwerp~~of ~~and~~ the ~~recently~~interim ~~acquired~~period ~~Acetate~~of ~~Esters~~adoption. ~~business~~The ~~(acquired~~Company onis ~~March 1,~~currently ~~2002)~~analysing the impact of this Statement.

TheTable average of the North Western European contract price for EO as per ICIS LOR decreased to € 894 per tonne for the nine-month period ended September 30, 2002, as compared to € 980 per tonne for the same period in 2001. Whereas the average of the North Western European contract prices for monoethylene glycol (MEG) as per ICIS LOR decreased to € 505 per tonne for the nine-month period ended September 30, 2002 as compared to € 593 per tonne for the same period in 2001. Contents

~~Cost~~FORWARD-LOOKING ~~of sales~~STATEMENTS

~~Cost~~The ofCompany ~~sales~~includes ~~increased~~“forward-looking ~~by € 21.8 million~~statements,” ~~approximately~~within ~~8.4%, to € 281.9 million for~~ the ~~nine-month~~meaning ~~period~~of ~~ended September 30, 2002, as compared to € 260.1 million for~~ the ~~same period in 2001. This primarily reflects increased~~US ~~sales~~securities ~~volumes~~laws, inbased ~~the~~on ~~speciality~~our ~~and~~current ~~intermediate~~expectations ~~business~~ and ~~the~~projections ~~additional cost~~about ~~of sales related to the newly acquired business. This increase was offset~~future byevents, ~~the decreased ethylene prices.~~including:

~~The~~• ~~average~~Our high degree of ~~the~~leverage ~~North~~and ~~Western~~significant ~~European~~debt ~~contract~~service ~~price~~obligations ~~for~~as ~~ethylene~~well as ~~per ICIS~~future ~~LOR~~cash ~~decreased~~flow toand €earnings; ~~518~~• ~~per~~Our ~~tonne~~sales ~~for~~growth ~~the~~across ~~nine-month~~our ~~period~~principal ~~ended~~businesses ~~September 30~~and our strategy for controlling costs, ~~2002~~growing margins, asincreasing ~~compared~~manufacturing capacity and production levels and making capital expenditures; • Raw material costs or supply arrangements; • Our technological and manufacturing assets and our ability to €utilise ~~638~~them ~~per~~to ~~tonne~~further ~~for~~increase sales and the ~~same~~profitability ~~period~~of inour ~~2001~~businesses; • Our ability to retain existing customers and obtain new customers; • Our ability to develop new products and technologies successfully; • The cyclical and highly competitive nature of our businesses; • Risks related to environmental costs, liabilities or claims; and • Currency fluctuations.

~~OPERATING~~All ~~AND~~statements ~~FINANCIAL~~other ~~REVIEW~~than ~~AND~~statements ~~PROSPECTS~~of historical facts included in this report including, without limitation, statements regarding our future financial position, risks and uncertainties related to our business and the notes, strategy, capital expenditures, projected costs and our plans and objectives for future operations, may be deemed to be forward-looking statements. These forward-looking statements are subject to a number of risks and uncertainties. Words such as “believe,” “expect,” “anticipate,” “may,” “intend,” “will,” “should,” “estimate” and similar expressions or the negatives of these expressions are intended to identify forward-looking statements. In addition, from time to time we or our representatives, acting in respect of information provided by us, have made or may make forward-looking statements orally or in writing and these forward-looking statements may be included in but are not limited to press releases (including on our website), filings with the US Securities and Exchange Commission, reports to our security holders and other communications. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

GrossTable profit of Contents

~~Gross~~OPERATING ~~profit~~AND ~~increased~~FINANCIAL byREVIEW €AND ~~27.3 million, approximately 39.8%, to € 95.8~~PROSPECTS ~~million for the nine-month period ended September 30, 2002, as compared to €~~ ~~68.5 million for the same period in 2001. The increase reflects the increased~~ ~~volumes sold of intermediate and speciality chemicals and includes the additional volumes sold of Acetate Esters since March 1, 2002.~~

~~Distribution costs~~Overview

~~Distribution~~We ~~costs~~are ~~increased~~a byglobal €chemical ~~18.6 million,~~manufacturer ~~approximately~~of ~~103.9%,~~speciality toand €intermediate 36chemicals.5 ~~million~~Our ~~for~~company ~~the~~is ~~nine-month~~comprised ~~period~~of ~~ended~~Ineos ~~September 30~~Oxide, ~~2002,~~Ineos ~~as compared to € 17.9 million for the same period in 2001. This increase reflects the increase in volumes sold of intermediate and speciality chemicals~~Phenol, ~~higher~~Ineos ~~export~~Fluor ~~volumes of US products~~ and ~~the impact of the recently acquired Acetate Esters business~~Ineos Silicas.

~~Administrative~~Our ~~expenses~~products include a wide range of ethylene-based, fluorine-based and inorganic speciality chemicals, as well as intermediate chemicals, such as phenol, acetone and ethylene glycol (EG). We believe our businesses are distinguished by the broad experience of our shareholders and our management teams, leading market positions, high quality and low-cost production facilities and operating diversity.

~~Administrative~~Ineos ~~expenses~~Group ~~increased~~Holdings by— €Results 2.9 million, approximately 42.6%, to € 9.7 million for the nine-month period ended September 30, 2002 as compared to € 6.8 million for the same period in 2001. Excluding the ‘other income’ item of € ~~1.3 million related to a third party contract settlement, administrative~~Operations ~~expenses increased by € 1.6 million for the nine-month period ended September~~ ~~30, 2002 as compared to the same period in 2001. This reflects the impact of~~ ~~the acquisition of the EOA and gas treating amines business per mid February 2001.~~

~~Operating~~The ~~profit~~results of operations of Ineos Group Holdings for the three-month period ended March 31, 2002 include the results of Ineos Oxide, Ineos Fluor, Ineos Silicas and ~~EBITDA~~Ineos Phenol as well as the results of the acetate esters business acquired by Ineos Oxide from BP Belgium on March 1, 2002 for the period March 1, 2002 to March 31, 2002. The results of Ineos Group Holdings for the three-month period ended March 31, 2003 are comprised of Ineos Oxide, Ineos Fluor, Ineos Silicas and Ineos Phenol.

~~Operating~~Discussions ~~profit~~of ~~increased~~the ~~by €~~results ~~5.8 million, approximately~~of ~~13.2%,~~operations ~~to € 49.6 million~~of ~~for~~each ~~the~~of ~~nine-month~~Ineos ~~period ended September 30~~Oxide, ~~2002,~~Ineos asPhenol, ~~compared~~Ineos toFluor ~~€ 43.8 million~~and ~~for~~Ineos ~~the~~Silicas ~~same period in 2001. EBITDA increased by € 5.2 million, approximately 9.9%, to € 57.8 million~~ for the ~~nine~~three-month ~~period~~periods ended ~~September 30~~March 31, 2002, and as2003 ~~compared~~are topresented ~~€ 52~~herein.~~6 million for the same period in 2001.~~

~~OPERATING~~The ~~AND~~following ~~FINANCIAL~~table ~~REVIEW~~sets ~~AND~~forth, ~~PROSPECTS~~for the periods indicated, our turnover and expenses and such amounts as a percentage of turnover.

Ineos Phenol


				Three-Month Period Ended
				March 31,

	2002						2003

	€m			%			€m			%

Turnover		498.6			100.0			649.5			100.0
Cost of sales		(404.8	)		(81.2	)		(551.5	)		(84.9	)

Gross profit		93.8			18.8			98.0			15.1
Distribution costs		(38.1	)		(7.6	)		(38.6	)		(6.0	)
Administrative expenses		(13.2	)		(2.6	)		(11.7	)		(1.8	)
Exceptional administrative expenses		(2.2	)		(0.4	)		—			—

Operating profit		40.3			8.2			47.7			7.3
Share of operating profit of associate		—			—			0.1			—
Net interest payable		(15.7	)		(3.1	)		(15.2	)		(2.3	)

Profit on ordinary activities before taxation		24.6			5.1			32.6			5.0
Taxation		(7.1	)		(1.4	)		(2.8	)		(0.4	)

Profit on ordinary activities after taxation		17.5			3.7			29.8			4.6

~~The following table sets forth, for the three~~Three-~~month~~Month ~~and~~Period ~~nine-month~~Ended ~~periods ended September~~March 3031, ~~2001 and 2002~~2003, ~~turnover~~Compared ~~and expenses of Ineos Phenol and such amounts as percentages of turnover. The following discussion with respect~~ to ~~Ineos~~Three-Month ~~Phenol~~Period ~~for the period prior to May~~Ended March 2331, ~~2001, relates to the business~~2002 ~~when it was under the ownership of Degussa AG.~~

	Three-Month Period Ended												Nine-Month Period Ended
	September 30,												September 30,
	2001						2002						2001						2002
	€m			%			€m			%			€m			%			€m			%
Turnover		245.4			100.0			322.1			100.0			862.4			100.0			894.4			100.0
Cost of Sales		(232.6	)		(94.8	)		(290.7	)		(90.3	)		(816.6	)		(94.7	)		(795.7	)		(89.0	)
Gross Profit		12.8			5.2			31.4			9.7			45.8			5.3			98.7			11.0
Distribution costs		(15.6	)		(6.3	)		(15.4	)		(4.7	)		(43.5	)		(5.0	)		(47.3	)		(5.3	)
Administrative expenses		3.3			1.3			(2.6	)		(0.9	)		0.5			—			(8.0	)		(0.9	)
Exceptional administrative expenses		(1.0	)		(0.4	)		(1.2	)		(0.3	)		(1.0	)		(0.1	)		(3.0	)		(0.3	)
Operating profit		(0.5	)		(0.2	)		12.2			3.8			1.8			0.2			40.4			4.5
EBITDA		11.0			4.7			21.5			6.6			40.7			4.7			67.7			7.5

Turnover

~~Three-Month~~Turnover ~~Period~~increased ~~Ended~~by ~~September~~€150.9 30million, ~~2002,~~approximately ~~Compared~~30.3% to ~~Three-Month~~€649.5 million ~~Period~~in ~~Ended~~2003 ~~September~~as compared to €498.6 ~~30,~~million ~~2001~~in 2002. This increase reflects an increase of volumes sold for intermediate chemicals in the Ineos Phenol business segment. Ineos Phenol has also experienced significant price increases in line with the increases in market prices for its products.

Turnover Table of Contents

~~Turnover~~OPERATING ~~increased~~AND byFINANCIAL ~~€76.7 million, approximately 31.3%, to €322.1 million for~~REVIEW ~~the~~AND ~~three-month period ended September 30, 2002, as compared to €245.4 million~~PROSPECTS ~~for the same period in 2001. This increase reflects increased sales volumes~~ ~~together with increased sales prices for phenol and acetone in Europe and in~~ ~~the US.~~

~~Western~~Cost ~~European~~of ~~phenol and acetone prices (per CMAI) increased to €590 per~~sales ~~metric tonne and €596~~ ~~per metric tonne, respectively for the three month period~~ ended September 30, 2002, as compared to €573 per metric tonne and €528 per metric tonne, respectively, for the same period in 2001. US phenol and acetone prices (per CMAI) increased to $793 per metric tonne and $397 per metric tonne, respectively, for the three month period ended September 30, 2002, as compared to $650 per metric tonne and $320 per metric tonne, respectively, for the same period in 2001.

Cost of sales increased by €146.7 million, approximately 36.2% to €551.5 million in 2003 as compared to €404.8 million in 2002. This increase reflects increased sales volumes in the intermediate business segment of Ineos Phenol. Ineos Phenol has also experienced significantly increased raw material prices in line with the increase in market prices for benzene and propylene.

~~Cost~~Gross ~~of sales increased by €58.1 million, approximately 25.0%, to €290.7~~profit ~~million for the three-month period ended September 30, 2002, as compared to~~ ~~€232.6 million for the same period in 2001. This increase mainly reflects~~ ~~increased raw material costs due to increased raw material prices and higher raw material consumption following higher plant utilisation of all sites.~~

~~Western~~Gross ~~European~~profit ~~benzene~~increased ~~and~~by ~~propylene~~€4.2 million ~~contract~~approximately ~~prices~~4.5% ~~(per CMAI) increased~~ to~~€403~~ ~~per metric tonne and~~ €~~495~~98.0 million ~~per metric tonne, respectively, for the~~in ~~three-month~~2003 ~~period ended September 30, 2002,~~ as compared to €~~293~~93.8 million ~~per metric tonne and €440 per metric tonne, respectively, for the same period~~ in ~~2001~~2002. ~~US benzene~~This ~~and~~increase ~~propylene~~primarily ~~contract~~reflects ~~prices (per CMAI)~~ the increased tovolumes ~~$413~~sold ~~per~~in ~~metric tonne and $437 per metric tonne, respectively, for~~ the ~~three-month~~Ineos ~~period~~Phenol ~~ended September 30,~~business ~~2002, as~~segment.

~~OPERATING~~Distribution ~~AND FINANCIAL REVIEW AND PROSPECTS~~costs

Distribution costs increased by €0.5 million approximately 1.3% to €38.6 million in 2003 as compared to ~~$263~~€38.1 million ~~per~~in ~~metric~~2002. ~~tonne~~This ~~and~~increase ~~$358~~reflects the ~~per~~increase ~~metric~~in ~~tonne,~~volumes ~~respectively~~sold of intermediate and speciality chemicals, ~~for~~together with increased levels of speciality products sold by the ~~same~~Ineos ~~period~~Oxide inbusiness segment ~~2001~~which tend to incur higher distribution charges.

~~Gross~~Administrative ~~profit~~expenses

~~Gross~~Administrative ~~profit~~expenses ~~increased~~decreased by €181.65 million, approximately ~~146~~11.74%, to €3111.~~4 million~~7 million in ~~the~~2003 ~~three-month period ended September 30, 2002,~~ as compared to €1213.8 2 million ~~for the same period~~ in ~~2001~~2002. This ~~increase~~decrease ~~reflects~~is primarily due to the ~~increase~~impact ~~in sales~~of ~~volume~~lower ascosts ~~well~~incurred as ~~increased~~a ~~sales~~result ~~prices~~of ~~more~~a ~~than~~number ~~offsetting increased~~of ~~raw~~fixed ~~material~~cost ~~costs~~saving projects across the group.

~~Distribution~~Exceptional ~~costs~~administrative expenses

~~Distribution~~Exceptional ~~costs~~administrative ~~decreased~~expenses bywere €~~0.2~~ nil million, ~~approximately~~in ~~1.3%,~~2003 compared to €152.42 million ~~for~~in ~~the three-month period ended September 30,~~ 2002~~, as compared to €15~~.~~6 million~~ ~~for~~These ~~the~~expenses ~~same~~primarily ~~period~~reflect inseverance ~~2001.~~costs ~~This~~incurred ~~decrease reflects high~~in ~~distribution~~2002 ~~costs~~ in ~~the~~connection ~~three-month~~with ~~period~~our ~~ended~~ongoing ~~September~~business ~~2001,~~reorganisations ~~where exports to South America resulted~~ in ~~higher~~Ineos ~~distribution~~Phenol and ~~costs~~Ineos Silicas.

~~Administrative~~Operating ~~expenses~~profit

~~Administrative~~Operating ~~expenses~~profit increased by €57.94 million, approximately ~~178~~18.84%, to €247.67 million in ~~for~~2003 ~~the three-month period ended September 30, 2002, as~~ compared to ~~a credit of~~ €340.3 million ~~for the same period~~ in ~~2001~~2002. This increase primarily reflects the ~~amortization~~increased ofvolumes ~~goodwill~~sold asin ~~well~~Ineos asPhenol, ~~the~~together ~~reclassification~~with ofa ~~other~~reduction ~~operating income~~ in the ~~three month period ending September 30, 2002, which was in~~ ~~included~~restructuring incharges ~~administrative~~incurred ~~expenses~~ in ~~2001,~~2003 ~~whereas~~compared into 2002 ~~it has been included in cost of sales~~.

~~Exceptional~~Net ~~administrative~~interest ~~expenses~~payable

~~Exceptional~~Net ~~administrative~~interest ~~expenses~~payable ~~increased~~decreased by €0.25 million, approximately 20 3.02%, to €115.2 million ~~for~~in ~~the~~2003 ~~three-month~~as ~~period~~compared ~~ended~~to ~~September~~€15.7 ~~30,~~million in 2002,. asThis decrease primarily ~~compared~~reflects tothe ~~€1.0 million~~reduction ~~for~~in the ~~same~~variable ~~period~~interest inrates ~~2001.~~on ~~These~~the ~~expenses~~senior ~~primarily~~credit ~~reflect~~facility ~~severance~~together ~~costs~~with ~~incurred~~lower indebt ~~connection~~levels ~~with~~in ~~our~~2003 ~~business~~compared ~~reorganisation following~~to ~~the~~2002 ~~acquisition~~as a result of ~~Ineos~~scheduled ~~Phenol~~and ~~from~~voluntary ~~Degussa~~debt repayments.

~~Operating~~Profit ~~profit~~on ~~and~~ordinary ~~EBITDA~~activities before taxation

~~Operating~~Profit ~~profit~~on ordinary activities increased by €128.70 million, approximately ~~2,540~~32.05%, to €1232.2 6 million ~~for~~in ~~the~~2003 ~~three-month period ended September 30, 2002,~~ as compared to ~~a loss of~~ €024.56 million ~~for the same period~~ in ~~2001~~2002. This increase ~~primarily~~ primarily reflects ~~higher~~increased ~~sales~~ volumes ~~and~~sold ~~higher~~in ~~sales~~Ineos ~~prices~~Phenol, ~~for~~together ~~phenol~~with ~~and acetone,~~a ~~only~~reduction ~~partially~~in ~~offset~~the byexceptional ~~increased~~restructuring ~~raw~~charges ~~material~~incurred ~~costs~~in ~~and~~2003 ~~increased administrative~~compared ~~expenses~~to 2002.

~~EBITDA increased by €10.5 million, approximately 95.4%, to €21.5 million for~~Taxation ~~the three-month period ended September 30, 2002, as compared with €11.0 million~~ ~~for the same period in 2001.~~

~~Nine-Month~~Taxation ~~Period~~decreased ~~Ended~~by ~~September~~€4.3 ~~30,~~million ~~2002,~~approximately ~~Compared~~60.6% to ~~Nine-Month~~€2.8 million ~~Period~~in ~~Ended~~2003 ~~September~~as compared to €7.1 ~~30,~~million ~~2001~~in 2002. The effective tax rate in 2003 reflects the anticipated rate for the year.

Turnover Table of Contents

~~Turnover~~OPERATING ~~increased~~AND byFINANCIAL ~~€32.0 million,~~REVIEW ~~approximately~~AND ~~3.7%, to €894.4 million for~~PROSPECTS ~~the nine-month period ended September 30, 2002, as compared to €862.4 million~~ ~~for the same period in 2001. This increase reflects increased total sales~~ ~~volume, only partially offset by decreased sales prices.~~

~~Western~~Profit ~~European~~on ~~phenol~~ordinary ~~prices~~activities ~~(per CMAI) decreased to €513 per metric tonne~~after ~~for the nine month period ended September 30, 2002, as compared to €743 per~~taxation ~~metric tonne for the same period in 2001. Western European acetone prices (per~~ ~~CMAI) remained at €525 per metric tonne for the nine month period ended~~ ~~September 30, 2002, as compared to the same period in 2001. US phenol and acetone prices (per CMAI) decreased to $688 per metric tonne and $336 per metric tonne, respectively, for the~~

~~OPERATING~~Profit ~~AND~~on ~~FINANCIAL~~ordinary ~~REVIEW~~activities ~~AND~~after ~~PROSPECTS~~taxation increased by €12.3 million, approximately 70.3% to €29.8 million in 2003 as compared to €17.5 million in 2002. This increase primarily reflects increased volumes sold in Ineos Phenol, together with a reduction in the exceptional restructuring charges incurred in 2003 compared to 2002.

nineTable monthof period ended September 30, 2002, as compared to $707 per metric tonne and $ 369 per metric tonne, respectively, for the same period in 2001. Contents

~~Cost~~OPERATING ofAND ~~sales~~FINANCIAL REVIEW AND PROSPECTS

~~Cost~~Ineos ~~of sales decreased by €20.9 million, approximately 2.6%, to €795.7 million~~Oxide ~~for the nine-month period ended September 30, 2002, as compared to €816.6~~ ~~million for the same period in 2001. This decrease primarily reflects decreased~~ ~~depreciation due to the amortization of negative goodwill, together with slightly lower raw material prices.~~

~~Western~~The ~~European~~following ~~benzene~~table ~~and~~sets ~~propylene contract prices (per CMAI) decreased to €347 per metric tonne and €432 per metric tonne~~forth, ~~respectively~~ for the ~~nine~~ three-month period ended ~~September~~March 3031, 2002~~, as compared to €354 per tonne and~~ ~~€480~~and ~~per tonne~~2003, ~~respectively,~~turnover ~~for the same period in 2001. US benzene~~ and ~~propylene~~ ~~contract~~expenses ~~prices~~of ~~(per~~Ineos ~~CMAI)~~Oxide ~~increased to $348 per tonne~~ and ~~$393~~such ~~per tonne,~~amounts ~~respectively, for the nine-month period ended September 30, 2002,~~ as ~~compared~~ ~~to $324 per tonne and $390 per tonne, respectively, for the same~~percentages ~~period~~of ~~in 2001~~turnover.

Gross profit


				Three-Month Period
				Ended March 31,

	2002						2003

	€m			%			€m			%

Turnover		115.5			100.0			121.4			100.0
Cost of sales		(84.7	)		(73.3	)		(94.1	)		(77.5	)

Gross profit		30.8			26.7			27.3			22.5
Distribution costs		(11.2	)		(9.7	)		(12.0	)		(9.9	)
Administrative expenses		(3.2	)		(2.8	)		(1.6	)		(1.3	)

Operating profit		16.4			14.2			13.7			11.3

EBITDA		19.9			17.2			16.8			13.8

~~Gross~~Three-Month ~~profit~~Period ~~increased~~Ended ~~by €52.9~~March ~~million~~31, ~~approximately 115.5%~~2003, Compared to ~~€98.7 million in the nine~~Three-~~month~~Month ~~period~~Period ~~ended September~~Ended March 3031, 2002~~, as compared to €45.8 million~~ ~~for the same period in 2001. This increase reflects the increase of sales~~ ~~volume, only partially offset by lower sales prices and decreased depreciation~~ ~~due to amortization of negative goodwill.~~

~~Distribution costs~~Turnover

~~Distribution~~Turnover ~~costs~~ increased by €35.89 million, approximately 85.71%, to €47121.3 4 million for the ~~nine~~three-month period ended ~~September~~March 3031, ~~2002~~2003, as compared to €43115.5 million for the same period in ~~2001~~2002. ~~This~~The ~~increase~~average ~~primarily~~of ~~reflects~~ the ~~increase~~ ofNorth ~~exports~~Western ~~from~~European ~~the~~price USfor EO as per ICIS LOR increased to ~~the~~€942 ~~Asian~~per ~~market~~tonne infor the ~~nine~~three-month period ~~ended~~ ~~September~~ended March 3031, 2003 compared to €879 per tonne for the same period in 2002, ~~compared~~whereas the European Contract Price for monoethylene glycol (MEG) increased to €605 per tonne for the ~~nine~~three-month period ended ~~September 30~~March 31, ~~2001~~2003 compared to €450 per tonne for the same period in 2002.

~~Administrative~~Cost ~~expenses~~of sales

~~Administrative~~Cost ~~expenses,~~of ~~including~~sales ~~research and development activities and other operating income,~~ increased by €89.54 million, approximately ~~1,700~~11.01%, to €894.01 million for the ~~nine~~three-month period ended ~~September~~March 3031, ~~2002,~~2003 as compared to a ~~credit of~~ €084.57 million for the same period in ~~2001~~2002. This increase primarily reflects ~~the~~ ~~fact that administrative expenses were a credit in~~ the ~~nine month period~~increased ~~ended~~ethylene ~~September 30,~~price ~~2001~~partly ~~due~~offset toby andecreased ~~adjustment~~sales ofvolumes ~~depreciation~~in ~~following~~ the ~~finalisation~~ ofspeciality ~~purchase~~and intermediate ~~price allocations~~businesses.

~~Exceptional~~The ~~administrative~~European ~~expenses~~Contract Price for ethylene referenced by ICIS increased to €575 per tonne for the three-month period ended March 31, 2003 compared to €473 per tonne for the same period in 2002.

~~Exceptional~~Gross ~~administrative expenses increased by €2.0 million, approximately~~profit ~~200.0%, to €3.0 million for the nine-month period ended September 30, 2002, as~~ ~~compared to €1.0 million for the same period in 2001. These expenses primarily~~ ~~reflect severance costs incurred in connection with our business reorganisation following the acquisition of Ineos Phenol from Degussa.~~

~~Operating~~Gross profit decreased by €3.5 million approximately 11.4%, to €27.3 million for the three-month period ended March 31, 2003 as compared to €30.8 million for the same period in 2002. This was largely due to the need to buy significantly more product than planned on a time-swap basis (to be returned later in the year) in order to honour contractual commitments jeopardised by low production rates associated with the three week Force Majeure in February/March at Antwerp and ~~EBITDA~~the three week planned shutdown in March for the expansion of the EO unit to 420,000 tonnes per annum and a recatylisation. Lower margins in the US businesses also contributed to the lower than planned gross profit due to a lag between product pricing and raw material costs in that market; the increase in US ethylene costs was bolstered by a severe gas cost spike in March.

OperatingTable profit increased by €38.6 million, approximately 2,144.4%, to €40.4 million for the nine-month period ended September 30, 2002, as compared to €1.8 million for the same period in 2001. This increase reflects increased total sales volume and lower depreciation due to the amortization of negative goodwill and is only partially offset by decreased sales prices and increased distribution costs. Contents

~~EBITDA~~OPERATING ~~increased~~AND byFINANCIAL ~~€27.0 million,~~REVIEW ~~approximately~~AND ~~66.3%, to €67.7 million for~~PROSPECTS ~~the nine-month period ended September 30, 2002, as compared with €40.7 million~~ ~~for the same period in 2001.~~

~~OPERATING~~Distribution ~~AND FINANCIAL REVIEW AND PROSPECTS~~costs

~~Ineos~~Distribution ~~Fluor~~costs increased by €0.8 million, approximately 7.1%, to €12.0 million for the three-month period ended March 31, 2003, compared to €11.2 million for the same period in 2002. This slight increase reflects the change in mixture of products sold: the distribution of specialisation products has increased and the distribution of intermediates has decreased, so that on average smaller quantities of higher value products are sold, thereby incurring higher distribution costs.

~~The~~Administrative ~~following table sets forth, for the three-month and nine-month periods ended September 30, 2001 and 2002, turnover and~~ expenses ~~of Ineos Fluor and~~ ~~such amounts as percentages of turnover.~~

	Three-Months Period Ended												Nine-Months Period Ended
	Sept. 30,												Sept. 30,
	2001						2002						2001						2002
	€m			%			€m			%			€m			%			€m			%
Turnover		74.3			100.0			72.7			100.0			239.3			100.0			235.9			100.0
Cost of sales		(55.6	)		(74.8	)		(55.3	)		(76.1	)		(168.5	)		(70.4	)		(175.1	)		(74.2	)
Gross profit		18.7			25.2			17.4			23.9			70.8			29.6			60.8			25.8
Distribution costs		(6.6	)		(8.9	)		(5.8	)		(8.0	)		(19.8	)		(8.3	)		(17.2	)		(7.3	)
Administrative expenses		(3.2	)		(4.3	)		(3.5	)		(4.8	)		(17.2	)		(7.2	)		(11.5	)		(4.9	)
Exceptional administrative expenses		(1.7	)		(2.3	)		—			—			(1.7	)		(0.7	)		(0.2	)		(0.1	)
Operating profit		7.2			9.7			8.1			11.1			32.1			13.4			31.9			13.5
EBITDA		13.8			18.6			12.9			17.7			48.6			20.3			47.7			20.2

Administrative expenses decreased by €1.6 million, approximately 50%, to €1.6 million for the three-month period ended March 31, 2003, as compared to €3.2 million for the same period in 2002. This decrease reflects the impact of other income recorded in the first quarter of 2003 for an amount of €1.4 million for insurance proceeds for business interruption of the ENB unit, together with strict cost control during the period.

~~Three-Month~~Operating ~~Period~~profit ~~Ended~~and ~~September 30, 2002 Compared to Three-Month Period~~EBITDA ~~Ended September, 2001~~

~~Turnover~~Operating profit decreased by €2.7 million, approximately 16.5%, to €13.7 million for the three-month period ended March 31, 2003, as compared to €16.4 million for the same period in 2002. EBITDA decreased by €3.1 million, approximately 15.6%, to €16.8 million for the three-month period ended March 31, 2003, as compared to €19.9 for the same period in 2002.

TurnoverTable decreasedof by €1.6 million, approximately 2.2% to €72.7 million for the three-month period ended September 30, 2002 as compared to €74.3 million for the same period in 2001. The decrease reflects lower sales volumes for HCFC 22 and lower HFC 134a prices partly offset by increased sales volumes for HFC 134a. Contents

~~Cost~~OPERATING ofAND ~~sales~~FINANCIAL REVIEW AND PROSPECTS

~~Cost~~Ineos ~~of sales decreased by €0.3 million, approximately 0.5% to €55.3 million~~Phenol ~~for the three-month period ended September 30, 2002 as compared to €55.6~~ ~~million for the same period in 2001.~~

~~Gross~~The ~~profit~~following table sets forth, for the three-month period ended March 31, 2002 and 2003, turnover and expenses of Ineos Phenol and such amounts as percentages of turnover.

Gross profit decreased by €1.3 million, approximately 7.0% to €17.4 million for the three-month period ended September 30, 2002 as compared to €18.7 million for the same period in 2001. Average product gross margins decreased primarily due to lower HFC 134a prices and additional depreciation arising from the finalisation of the purchase price allocations.


				Three-Month Period Ended
				March 31,

	2002						2003

	€m			%			€m			%

Turnover		250.5			100.0			403.2			100.0
Cost of Sales		(224.2	)		(89.5	)		(370.3	)		(91.8	)

Gross profit		26.3			10.5			32.9			8.2
Distribution costs		(15.4	)		(6.1	)		(15.8	)		(3.9	)
Administrative expenses		3.0			1.2			2.2			0.5
Exceptional administrative expenses		(0.8	)		(0.3	)		—			—

Operating profit		13.1			5.3			19.3			4.8

EBITDA		22.0			8.8			24.8			6.2

~~Distribution~~Three-Month ~~costs~~Period Ended March 31, 2003, Compared to Three-Month Period Ended March 31, 2002

~~Distribution costs decreased by €0.6 million, approximately 9.0% to €5.8~~Turnover ~~million for the three-month period ended September 30, 2002 as compared to €6.6~~ ~~million for the same period in 2001. This decrease reflects a reduction in~~ ~~volumes sold of HCFC 22.~~

~~Administrative~~Turnover ~~expenses~~increased by €152.7 million, approximately 61.0%, to €403.2 million for the three-month period ended March 31, 2003, as compared to €250.5 million for the same period in 2002. This increase reflects increased sales volume and increased sales prices for phenol and acetone in Europe and in the US.

~~Administrative~~Western ~~expenses,~~European ~~including~~phenol ~~research~~ and ~~development~~acetone ~~activities~~prices ~~and~~(per CMAI) increased to €762 per ~~other~~metric ~~operating~~tonne ~~income~~and €663 per metric tonne, ~~increased~~respectively byfor ~~€0.3~~the three month period ended March ~~million~~31, ~~approximately~~2003, ~~9.4%~~as compared to €3430 per metric tonne and €440 per metric tonne, respectively, for the same period in 2002.5 ~~million~~US phenol and acetone prices (per CMAI) increased to $827 per metric tonne and $485 per metric tonne, respectively, for the three-month period ended ~~September~~March 3031, 2003, ~~2002~~ as compared to ~~€3.2~~$588 per metric tonne and $305 per metric tonne, ~~million~~respectively, for the same period in ~~2001~~2002. ~~Administrative expenses~~

~~OPERATING~~Cost ~~AND~~of ~~FINANCIAL REVIEW AND PROSPECTS~~sales

~~include~~Cost ~~a €3.5 million credit for amortisation~~ of ~~goodwill~~sales ~~for~~increased ~~the~~by ~~three-month period ended September~~€146.1 30million, ~~2002~~approximately as65.2%, ~~compared~~ to €0370.6 3 million for the ~~same period in 2001. Included in administrative expenses for the~~ three-month period ended ~~September~~March 3031, ~~2001~~2003, isas acompared ~~€2.6 million credit due~~ to ~~fixed cost movements in stock, the comparative~~ €0224.3 2 million ~~charge~~ for the same period in 2002 ~~has been included in variable production costs~~. ~~Additionally~~This aincrease ~~€1.0 million accrual~~reflects ~~for~~increased ~~employee bonuses is included in administrative expense for the~~raw ~~three-month~~material ~~period~~costs ~~ended~~and ~~September~~increased ~~2002~~trade asactivities ~~compared to €nil~~ in the ~~same~~benzene ~~period in 2001~~market.

~~Operating~~Western ~~profit~~European benzene and ~~EBITDA~~propylene contract prices (per CMAI) increased to €455 per metric tonne and €520 per metric tonne, respectively, for the three-month period ended March 31, 2003, as compared to €238 per metric tonne and €365 per metric tonne, respectively, for the same period in 2002. US benzene and propylene contract prices (per CMAI) increased to $535 per metric tonne and $533 per metric tonne, respectively, for the three-month period ended March 31, 2003, as compared to $257 per metric tonne and $325 per metric tonne, respectively, for the same period in 2002.

OperatingTable profitof increased by €0.9 million, approximately 12.5% to €8.1 million for the three-month period ended September 30, 2002 as compared to €7.2 million for the same period in 2001. EBITDA decreased by €0.9 million, approximately 6.5% to €12.9 million for the three-month period ended September 30, 2002 as compared to €13.8 million for the same period in 2001. Contents

~~Nine-Month~~OPERATING ~~Period~~AND ~~Ended~~FINANCIAL ~~September 30, 2002, Compared to Nine-Month Period Ended~~REVIEW ~~September 30,~~AND ~~2001~~PROSPECTS

~~Turnover~~Gross profit

~~Turnover~~Gross ~~decreased~~profit increased by €36.46 million, approximately 125.41%, to €~~235~~32.9 million ~~for~~ in the ~~nine~~three-month period ended ~~September~~March 3031, ~~2002~~2003, as compared to €~~239~~26.3 million for the same period in ~~2001~~2002. ~~The~~This ~~decrease~~increase reflects ~~lower~~the ~~HCFC22~~increase ~~sales~~in ~~volumes~~sales ~~and~~volume aas ~~reduction~~well inas ~~the~~increased ~~selling~~sales ~~price of 134a~~prices, ~~offset~~more bythan offsetting increased ~~sales volumes~~raw ~~for~~material ~~HFC 134a~~costs.

~~Cost~~Distribution ~~of sales~~costs

~~Cost~~Distribution ofcosts ~~sales~~ increased by €60.64 million, approximately 32.96%, to €~~175~~15.~~1 million~~8 million for the ~~nine~~three-month period ended ~~September~~March 3031, ~~2002~~2003, as compared to €~~168~~15.54 million for the same period in ~~2001~~2002. This increase ~~reflects~~is ~~increased~~mainly ~~sales~~due to increased sales volumes ~~for~~from ~~HFCs,~~Europe ~~partially~~to ~~offset~~the byUS. ~~lower~~Higher ~~HCFC22~~sales ~~volumes~~to ~~and~~the ~~€9.1 million~~US in the first ~~additional~~quarter ~~depreciation~~2003, ~~arising~~compared ~~from~~to the ~~finalisation~~same ofperiod ~~the~~in ~~purchase~~2002, ~~price~~were made in order to fulfil ~~allocations~~customer ~~which~~commitments ~~resulted~~after inthe aMobile ~~depreciation~~plant ~~charge~~was ofpartly €destroyed 24by a fire in September 2002.~~9 million~~ ~~for~~Although the ~~nine~~ ~~month~~plant ~~period~~started ~~ended~~production ~~September 30,~~at ~~2002~~the asend ~~compared~~of toDecember 2002, ~~€15.8 million~~distribution costs for remaining shipments were also incurred in the ~~same~~first ~~period~~quarter inof ~~2001~~2003.

~~Gross~~Administrative ~~profit~~expenses

~~Gross~~Administrative ~~profit~~expenses, ~~decreased~~including the amortisation of negative goodwill, increased by €~~10.~~0.8 million, approximately 1426.17%, to a credit of €602.82 million ~~for~~ for the ~~nine~~three-month period ended ~~September~~March 3031, ~~2002~~2003, as compared to a credit of €703.80 million for the same period in ~~2001~~2002. This ~~decrease~~increase ~~primarily~~mainly reflects ~~lower~~a decrease ~~selling~~of ~~prices~~the ~~for~~amortisation ~~HFC~~of ~~134a~~negative ~~offset~~goodwill byto ~~higher~~€5.2 million ~~HFC~~for ~~134a sales volumes and~~ the three-month ~~additional~~period ~~depreciation~~ended ~~arising~~March 31, ~~from~~2003, ~~the~~as ~~finalisation~~compared ofto ~~the purchase price allocations~~€5.8 million ~~Raw~~for ~~material~~the ~~prices~~same ~~remained~~period ~~largely unchanged~~in 2002.

~~Distribution~~Exceptional ~~costs~~administrative expenses

~~Distribution~~Exceptional ~~costs~~administrative expenses decreased by €20.68 million, ~~approximately 13.1%,~~ to €~~17.2 million~~nil million for the ~~nine~~three-month period ended ~~September~~March 3031, ~~2002~~2003, as compared to €190.8 million for the same period in ~~2001~~2002. ~~This~~These ~~decrease~~expenses ~~reflects~~primarily areflect ~~reduction~~severance costs in ~~volumes~~2002 ~~sold~~incurred ofin ~~HCFC~~connection 22with ~~and~~our ~~savings~~business ~~from~~reorganisation ~~improved~~following ~~shipping utilisation~~the ~~rates~~acquisition of Ineos Phenol from Degussa.

~~Administrative~~Operating ~~expenses~~profit and EBITDA

~~Administrative~~Operating ~~expenses,~~profit ~~including~~increased ~~research and development activities and other operating income, reduced~~ by €56.72 million, approximately 3347.13%, to €1119.53 million for the ~~nine~~three-month period ended ~~September~~March 3031, ~~2002~~2003, as compared to €1713.2 1 million for the same period in ~~2001~~2002. ~~Administrative~~This ~~expenses~~increase ~~include~~primarily areflects €higher ~~9.9 million~~sales ~~credit~~volumes ~~for~~and ~~amortisation~~higher ofsales ~~goodwill~~prices, ~~for~~only ~~the~~partially ~~nine-month~~offset ~~period~~by ~~ended~~increased raw ~~September 30~~material costs, ~~2002~~increased asdistribution ~~compared~~costs toand ~~€ 1.9 million for~~ the ~~same~~decreased ~~period~~amortisation inof negative ~~2001~~goodwill.

~~OPERATING~~EBITDA ~~AND~~increased ~~FINANCIAL~~by ~~REVIEW~~€2.8 million, ~~AND~~approximately ~~PROSPECTS~~12.7%, to €24.8 million for the three-month period ended March 31, 2003, as compared to €22.0 million for the same period in 2002.

ExceptionalTable administrativeof expenses Contents

~~Exceptional~~OPERATING ~~administrative~~AND ~~expenses~~FINANCIAL ~~reduced~~REVIEW byAND ~~€1.5 million, approximately~~PROSPECTS ~~88.2% to €0.2 million compared to €1.7 million in 2001. These costs primarily~~ ~~reflect severance payments and other redundancy-related costs incurred in~~ ~~connection with business restructuring.~~

~~Operating~~Ineos ~~profit and EBITDA~~Fluor

~~Operating~~The ~~profit~~following ~~decreased~~table bysets ~~€0.2 million~~forth, ~~approximately 0.6%, to €31.9 million~~ for the ~~nine~~three-month period ended ~~September~~March 3031, 2002 ~~as compared to €32.1~~ ~~million~~and ~~for the same period in 2001. EBITDA reduced by €0.9 million~~2003, ~~approximately~~ ~~1.8%,~~turnover toand ~~€47.7 million~~expenses ~~for~~of ~~the~~Ineos ~~nine~~Fluor ~~month~~and ~~period~~such ~~ended~~amounts ~~September 30, 2002~~ as ~~compared~~percentages of ~~to €48~~turnover.~~6 million for the same period in 2001.~~

OPERATING AND FINANCIAL REVIEW AND PROSPECTS


			Three-Month Period Ended
				March 31,

	2002						2003

	€m			%			€m			%

Turnover		73.6			100.0			71.0			100.0
Cost of sales		(57.7	)		(78.4	)		(53.4	)		(75.2	)

Gross profit		15.9			21.6			17.6			24.8
Distribution costs		(5.6	)		(7.6	)		(5.1	)		(7.2	)
Administrative expenses		(2.7	)		(3.6	)		(2.7	)		(3.8	)
Exceptional administrative expenses		(0.2	)		(0.3	)		—			—

Operating profit		7.4			10.1			9.8			13.8

EBITDA		12.9			17.5			15.5			21.8

~~Ineos~~Three-Month ~~Silicas~~Period Ended March 31, 2003 Compared to Three-Month Period Ended March 31, 2002

~~The following tables sets forth, for the three-month and nine-month periods~~Turnover ~~ended September 30, 2001 and 2002, turnover and expenses of Ineos Silicas and~~ ~~such amounts as percentages of turnover.~~

	Three-Months Period Ended												Nine-Months Period Ended
	September 30,												September 30,
	2001						2002						2001						2002
	€m			%			€m			%			€m			%			€m			%
Turnover		54.0			100.0			56.1			100.0			168.9			100.0			178.3			100.0
Cost of sales		(34.8	)		(64.4	)		(33.5	)		(59.7	)		(99.8	)		(59.1	)		(109.8	)		(61.6	)
Gross profit		19.2			35.6			22.6			40.3			69.1			40.9			68.5			38.4
Distribution costs		(4.7	)		(9.0	)		(6.2	)		(11.1	)		(23.5	)		(13.9	)		(18.5	)		(10.3	)
Administrative expenses		(10.9	)		(19.9	)		(9.4	)		(16.7	)		(35.2	)		(20.8	)		(31.3	)		(17.6	)
Exceptional administrative expenses		(1.9	)		(3.5	)		—			—			(2.2	)		(1.3	)		(14.1	)		(7.9	)
Operating profit		1.7			3.2			7.0			12.5			8.2			4.9			4.6			2.6
EBITDA		7.0			13.0			10.1			18.0			20.6			12.2			31.4			17.6

Turnover decreased by €2.6 million, approximately 3.5%, to €71.0 million for the three-month period ended March 31, 2003, as compared to €73.6 million for the same period in 2002. The decrease reflects increased sales volumes of HFC 134a offset by a stronger Euro when compared to the US dollar and Japanese yen.

~~Three-Month~~Cost ~~Period~~of ~~ended September 30, 2002, Compared to Three-Month Period~~sales ~~Ended September 30, 2001~~

~~Turnover~~Cost of sales decreased by €4.3 million, approximately 7.5%, to €53.4 million for the three-month period ended March 31, 2003, as compared to €57.7 million for the same period in 2002. The reduction is due primarily to the increased benefits from the UK Government’s emissions programme, as well as increased benefits from exchange created by a stronger Euro when compared to the US dollar and Japanese yen.

~~Turnover~~Gross ~~increased by €2.1 million, approximately 3.9%, to €56.1 million in~~profit ~~2002, as compared to €54.0 million in 2001. Zeolite sales in Europe were ahead~~ ~~of last year as a result of our major detergent customer reformulation switch~~ from phosphates to zeolites. Lower selling prices for silicates led to a small decline in sales despite similar volumes. Selling prices in the three month period to 30 September 2002 are lower than the corresponding period in 2001, mainly as a result of lower input prices, some of which are passed on to customers.

~~Cost~~Gross ofprofit ~~sales~~increased by €1.7 million, approximately 10.7%, to €17.6 million for the three-month period ended March 31, 2003, as compared to €15.9 million for the same period in 2002. Average product gross margins decreased primarily due to lower selling prices offset by monies receivable under the UK Government’s CO2 emissions reduction programme.

~~Cost~~Distribution ~~of sales decreased by €1.3 million, approximately 3.7%, to €33.5 million~~costs ~~in 2002, as compared to €34.8 million in 2001. The decrease was due to lower~~ ~~raw material prices and the favourable impact of the restructuring exercise.~~

~~Gross~~Distribution ~~profit~~costs decreased by €0.5 million, approximately 8.9%, to €5.1 million for the three-month period ended March 31, 2003, as compared to €5.6 million for the same period in 2002. This decrease mainly reflects the exchange effect of the Euro.

GrossTable profit increased by €3.4 million, approximately 17.7% to €22.6 million as compared to €19.2 million in 2001 as a result of higher sales and the favourable impact of raw material price movements and other cost savings. Contents

~~Distribution~~OPERATING ~~costs~~AND FINANCIAL REVIEW AND PROSPECTS

~~Distribution~~Administrative ~~costs increased by €1.5 million, approximately 31.9%, to €6.2~~expenses ~~million in 2002, as compared to €4.7 million in 2001 as a result of the higher~~ ~~volume of sales.~~

Administrative expenses, including research and development activities and other operating income, remained unchanged at €2.7 million for the three-month period ended March 31, 2003, as compared to the same period in 2002.

~~Administrative~~Exceptional administrative expenses ~~decreased by €1.5 million, approximately 13.8%, to €9.4~~ ~~million in 2002, as compared to €10.9 million in 2001.~~

~~OPERATING~~Exceptional ~~AND~~administrative ~~FINANCIAL~~expenses ~~REVIEW~~were ~~AND~~€nil ~~PROSPECTS~~million for the three-month period ended March 31, 2003 as compared to €0.2 million for the same period in 2002. These costs in 2002 primarily reflect severance payments incurred in connection with our business restructuring.

~~Exceptional~~Operating ~~administrative~~profit ~~expenses~~and EBITDA

~~Exceptional~~Operating ~~administrative~~profit ~~expenses~~increased inby ~~the~~€2.4 million, ~~third~~approximately ~~quarter~~32.4%, ofto ~~2002 were~~ € ~~nil~~9.8 million for the three-month period ended March 31, 2003, as compared to € 17.9 4 million for the same period in ~~2001~~2002.

~~Operating~~EBITDA ~~profit~~increased ~~and~~by ~~EBITDA~~€2.6 million, approximately 20.2%, to €15.5 million for the three-month period ended March 31, 2003, as compared to €12.9 million for the same period in 2002.

OperatingTable profitof increased by €5.3 million, approximately 311.6% to €7.0 million in 2002, as compared to €1.7 million in 2001. Excluding exceptional administrative expenses, operating profit increased by €3.4 million, approximately 94.4%, to €7.0 million in 2002, as compared to €3.6 million in 2001. EBITDA increased by €3.1 million, approximately 44.3%, to €10.1 million in 2002, as compared to €7.0 million in 2001. Contents

~~Nine-Month~~OPERATING ~~Period~~AND ~~Ended~~FINANCIAL ~~September 30,~~REVIEW ~~2002,~~AND ~~Compared to Nine-Month Period Ended~~PROSPECTS ~~September 30, 2001~~

~~Turnover~~Ineos Silicas

~~Turnover~~The ~~increased~~following bytables ~~€9.4 million,~~sets ~~approximately 5.6%~~forth, tofor ~~€178.3 million~~the ~~in 2002,~~three-month asperiod ~~compared~~ended ~~to €168.9~~March ~~million in 2001. Higher sales of zeolites in~~31, ~~Europe~~2002 and ~~silicas~~2003, inturnover ~~all~~and ~~regions~~expenses ~~have~~of ~~more~~Ineos ~~than~~Silicas ~~offset~~and ~~lower~~such ~~silicate~~amounts ~~sales in~~as ~~Europe~~percentages ~~and~~of ~~lower zeolite sales in North America~~turnover.

Cost of sales


		Three-Month Period Ended
				March 31,

	2002						2003

	€m			%			€m			%

Turnover		59.0			100.0			53.9			100.0
Cost of sales		(38.2	)		(64.7	)		(33.7	)		(62.5	)

Gross profit		20.8			35.3			20.2			37.5
Distribution costs		(5.9	)		(10.0	)		(5.7	)		(10.6	)
Administrative expenses		(10.3	)		(17.5	)		(9.6	)		(17.8	)
Exceptional administrative expenses		(1.2	)		(2.0	)		—			—

Operating profit		3.4			5.8			4.9			9.1

EBITDA		9.7			16.4			8.9			16.5

~~Cost~~Three-Month ofPeriod ~~sales~~ended ~~increased by €10.0~~March ~~million~~31, ~~approximately 10.0%~~2003, toCompared ~~€109.8 million in 2002, as compared~~ to ~~€99.8 million~~Three-Month inPeriod ~~2001. The increase was due to~~Ended ~~the~~March 31, ~~higher level of sales and higher depreciation charges in~~ 2002.

~~Gross profit~~Turnover

~~Gross~~Turnover ~~profit~~ decreased by €05.~~6 million~~1m, approximately 08.96%, to €6853.~~5 million~~9m infor the three-month ~~2002~~period ended March 31, 2003, as compared to €6959.~~1 million~~0m infor ~~2001.~~the ~~This~~same isperiod ain ~~result~~2002. Sales of ~~the~~zeolites ~~product mix~~into Europe increased in ~~silicas~~2003, ~~over~~although ~~the~~this ~~first~~increase ~~six~~was offset ~~months~~by oflower ~~2002,~~silicate ~~which~~sales. ~~was~~Underlying ~~influenced~~sales byof ~~high~~silicas increased slightly ~~volumes~~in of2003. ~~lower~~Exchange ~~gross~~rate ~~margin~~movements ~~personal~~in ~~care~~2003 ~~exports~~compared ~~and~~to a2002 ~~higher~~had ~~depreciation~~a negative ~~charge,~~impact ~~offset~~on byturnover. ~~declining~~Excluding ~~raw~~the ~~material~~effect ~~prices~~of exchange translation, ~~mainly~~turnover increased ~~caustic~~by ~~soda~~1.3%.

~~Distribution~~Cost ~~costs~~of sales

~~Distribution~~Cost ~~costs~~of sales decreased by €54.~~0 million~~5m, approximately 2111.38%, to €1833.57m for the ~~million~~three-month inperiod ~~2002~~ended March 31, 2003, as compared to €2338.~~5 million~~2m infor ~~2001.~~the ~~Zeolite~~same period ~~volumes~~ in ~~North~~ ~~America,~~2002. ~~where~~Most of the ~~distribution~~decrease ~~cost~~was ~~per~~due ~~ton is relatively high, have been lower in 2002 as compared~~ to the ~~first~~impact ~~nine months~~ of ~~2001. Additionally~~exchange rates, although ~~warehousing~~there ~~costs~~were ~~have~~underlying ~~been~~savings ~~reduced~~of ~~over~~approximately ~~the period~~2.0%.

~~Administrative~~Gross ~~expenses~~profit

~~Administrative~~Gross ~~expenses~~profit decreased by €30.~~9 million~~6m, approximately 102.59%, to €3120.~~3 million~~2m infor ~~2002~~the three-month period ended March 31, 2003, as compared to €3520.~~2 million~~8m infor ~~2001.~~the ~~The decrease is a~~same ~~result~~period ofin ~~the restructuring program~~2002, ~~which~~as ~~was~~a ~~launched~~result ~~in the second half~~ of ~~2001~~ ~~and~~lower ~~tight control of expenditure~~turnover.

~~Exceptional~~Distribution ~~administrative expenses~~costs

~~Exceptional~~Distribution ~~administrative~~costs ~~expenses~~decreased inby ~~2002~~€0.2m, ~~were~~approximately 3.4%, to €145.17m for the three-month period ended March ~~million~~31, 2003, as compared to € 25.~~2 million~~9m for the same period in ~~2001~~2002. ~~The~~Underlying distribution costs ~~reflect~~actually ~~anticipated~~increased ~~severance~~slightly, reflecting ~~and~~the ~~other redundancy~~underlying ~~related~~increase ~~costs~~in ~~incurred~~volumes toand ~~complete~~turnover, although the ~~global~~impact of ~~restructuring~~exchange ~~program~~rate translation lessened the impact.

OperatingTable profitof and EBITDA Contents

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

~~Operating~~Administrative ~~profit decreased by €3.6 million, approximately 43.9% to €4.6 million in 2002, as compared to €8.2 million in 2001. Excluding exceptional administrative~~ expenses~~, operating profit increased by €8.3 million,~~ ~~approximately 79.8%, to €18.7 million in 2002, as compared to €10.4 million in~~ ~~2001. EBITDA increased by €10.8 million, approximately 52.4%, to €31.4 million~~ ~~in 2002, as compared to €20.6 million in 2001.~~

~~Financial~~Administrative ~~condition~~expenses ~~and~~decreased ~~liquidity~~by €0.7m, approximately 6.8%, to €9.6m for the three-month period ended March 31, 2003, as compared to €10.3m for the same period in 2002, mainly as a result of exchange rate translation.

~~Net~~Exceptional ~~cash flow from operating activities was an inflow of €118.8 million for the~~administrative ~~period from January 1, 2002 to September 30, 2002.~~expenses

OnExceptional ~~March 1,~~administrative ~~2002~~expenses ~~Ineos~~in ~~Oxide~~2003 ~~completed~~were ~~the~~€nil, ~~acquisition~~compared ofto ~~the~~€1.2m ~~Acetate Esters~~in ~~business~~2002. ~~from~~These ~~BP.~~costs ~~The~~in ~~acquisition~~2002 ~~was~~primarily ~~financed~~reflect ~~out~~severance ofpayments ~~operating~~in ~~cash~~connection with ~~flows~~our business restructuring.

~~The~~Operating ~~Company~~profit ~~held net cash balances of €77.2 million as at September 30, 2002,~~ and ~~had no drawings under the €100 million revolving credit facility. The~~EBITDA ~~Company has repaid a total of €58.7 million of the Senior Credit Agreement in~~ ~~the period ended September 30, 2002. Net debt as at September 30, 2002 was~~ ~~€850.3 million (December 31, 2001: €889.3 million).~~

~~Capital~~Operating ~~expenditure~~profit ~~during~~increased ~~the~~by ~~nine~~€1.5m, ~~months~~approximately 44.1%, to €4.9m for the three-month period ended ~~September~~March 3031, ~~2002~~2003, ~~was~~as compared to €263.94m for the same ~~million~~period ~~analysed~~in 2002. Excluding exceptional administrative expenses, operating profit increased by €0.3m, approximately 6.5%, to €4.9m in 2003, as ~~follows:~~compared to €4.6m in 2002.

	(€ in millions)
Ineos Oxide		9.3
Ineos Phenol		4.3
Ineos Fluor		7.0
Ineos Silicas		6.3
		26.9

EBITDA decreased by €0.8 million, approximately 8.2% to €8.9 million in 2003 as compared to €9.7 million in 2002.

~~Management~~Financial ~~believes~~condition ~~that cash generated from operations, together with borrowings under the revolving credit facility will be sufficient for the operating needs of the business~~ and ~~to meet debt service requirements as they~~liquidity ~~become due in the foreseeable future. The future operating performance and~~ ~~ability to service or refinance debt, will however be subject to future~~ ~~economic conditions and to financial, business and other factors, many of which are beyond management’s control.~~

~~INEOS~~Net ~~GROUP~~cash ~~HOLDINGS~~flow from operating activities was an inflow of €24.8 million for the ~~CONSOLIDATED~~period ~~PROFIT~~from ~~AND~~January 1, ~~LOSS~~2003 ~~ACCOUNTS~~to ~~(UNAUDITED)~~March 31, 2003, compared to an inflow of €29.3 million for the three months ended March 31, 2002. This decrease was due to improved profitability offset by an increase in working capital as the Mobile phenol plant went back into full production.

	Three-Month Period Ended						Nine-Month Period Ended
	September 30,						September 30,
	2001			2002			2001			2002
	(€ in millions)						(€ in millions)
Turnover		489.4			585.7			1,066.9			1,686.3
Cost of sales		(409.8	)		(479.1	)		(842.3	)		(1,362.5	)
Gross profit		79.6			106.6			224.6			323.8
Distribution costs		(35.6	)		(40.5	)		(79.8	)		(119.5	)
Administrative expenses		(13.7	)		(18.9	)		(54.4	)		(60.5	)
Exceptional administrative expenses		(4.6	)		(1.2	)		(4.9	)		(17.3	)
Operating profit		25.7			46.0			85.5			126.5
Net interest payable		(19.0	)		(15.0	)		(60.1	)		(55.2	)
Exceptional finance costs		(7.9	)		—			(28.6	)		—
Profit/(loss) on ordinary activities before taxation		(1.2	)		31.0			(3.2	)		71.3
Taxation on profit/(loss) on ordinary activities		(3.6	)		(4.5	)		(11.0	)		(19.4	)
Profit/(loss) on ordinary activities after taxation		(4.8	)		26.5			(14.2	)		51.9
Equity dividends		—			—			(2.1	)		—
Profit/(loss) for the financial period		(4.8	)		26.5			(16.3	)		51.9
Depreciation and amortization included above		22.3			18.8			48.2			60.8

Interest payments of €30.8 million were made in the three months ended March 31, 2003 (€22.2 million in the three months ended March 31, 2002). This consisted of €16.4 million of senior debt interest and €13.7 million of senior notes interest plus other sundry interest payments.

The ~~accompanying~~Company ~~notes~~held ~~are~~net ancash ~~integral~~balances ~~part~~ of ~~these~~€85.2 million ~~consolidated~~as ~~financial~~at ~~statements~~March 31, 2003, and had no drawings under the €75 million revolving credit facility. Net debt as at March 31, 2003 was €772.4 million (December 31, 2002: €757.3 million).

~~INEOS~~Capital ~~GROUP~~expenditure ~~HOLDINGS~~incurred during the three months ended March 31, 2003 was ~~CONSOLIDATED~~€6.5 million ~~BALANCE~~analysed ~~SHEETS~~as follows:

	December 31, 2001			September 30, 2002
	(€ in millions)
	(Audited)			(Unaudited)
Ineos Oxide		2.1
	(€ in millions)
Ineos Phenol		1.6
Fixed assets
Ineos Fluor		1.0
Investments		1.6			1.8
Ineos Silicas		1.8
Tangible fixed assets		1,135.6			1,022.0
		6.5
Intangible fixed assets		15.1			14.7
Negative goodwill		(340.7	)		(290.3	)
		811.6			748.2
Current assets
Cash at bank and in hand		121.2			77.4
Stocks		152.3			159.9
Debtors : amounts falling due within one year		308.8			424.7
Debtors : amounts falling due after one year		47.0			29.4
		629.3			691.4
Creditors : amounts falling due within one year		(409.5	)		(425.2	)
Net current assets		219.8			266.2
Total assets less current liabilities		1,031.4			1,014.4
Creditors : amounts falling after one year		(892.4	)		(835.8	)
Provisions for liabilities and charges		(53.2	)		(65.3	)
Net assets		85.8			113.3
Capital and reserves
Share capital		17.7			17.7
Share premium		51.1			51.1
Profit and loss account		17.0			44.5
Equity shareholders’ funds		85.8			113.3

~~The~~Management ~~accompanying~~believes ~~notes~~that ~~are~~cash angenerated ~~integral~~from ~~part~~operations, together with borrowings under the revolving credit facility will be sufficient for the operating needs of ~~these~~the ~~consolidated~~business and to meet debt service requirements as they become due in the foreseeable future. The future operating performance and ability to service or refinance debt, will however be subject to future economic conditions and to financial, ~~statements~~business and other factors, many of which are beyond management’s control.

INEOSTable GROUPof HOLDINGS CONSOLIDATED CASH FLOW STATEMENTS (UNAUDITED) Contents

	Nine-Month Period Ended
	September 30,
	2001			2002
	(€ in millions)
Operating profit		85.5			126.5
Depreciation of tangible assets		58.0			67.4
Amortization of goodwill/(write back of negative goodwill)		(9.9	)		(6.6	)
Increase in stocks		(14.7	)		(4.2	)
Decrease/(increase) in debtors		36.6			(68.7	)
(Decrease)/increase in creditors and provisions		(9.5	)		4.4
Net cash flow from operating activities		146.0			118.8
Returns on investments and servicing of finance
Interest received		1.4			1.6
Interest and other financing charges paid		(63.6	)		(58.9	)
Issue cost of debt finance raised		(45.3	)		—
		(107.5	)		(57.3	)
Taxation paid		(5.5	)		(9.1	)
Capital expenditure and financial investments
Payments to acquire tangible fixed assets		(32.1	)		(26.9	)
Acquisitions of businesses		(786.6	)		(4.6	)
Equity dividends paid		(2.1	)		—
Net cash outflow before financing		(787.8	)		20.9
Financing
Bank loans		1,497.7			—
Repayment of previous borrowings		(618.8	)		(0.8	)
Repayment of bank loans		—			(58.7	)
Repayment of Senior Secured Notes		—			(1.6	)
Capital repayment on finance leases		—			(1.9	)
		878.9			(63.0	)
Increase/(decrease) in cash		91.1			(42.1	)

SIGNATURES

~~The~~Pursuant ~~accompanying~~to ~~notes~~the ~~are~~requirements anof ~~integral~~the ~~part~~Securities Exchange Act of ~~these~~1934, ~~consolidated~~the registrant ~~financial~~has ~~statements~~duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on May 30, 2003.

INEOS GROUP HOLDINGS ~~RECONCILIATION~~ OFPLC ~~MOVEMENTS~~Registrant INIssuer ~~EQUITY~~/s/ ~~SHAREHOLDERS~~John ~~FUNDS~~ Reece John Reece Director

	Equity
	Shareholders Funds
	(€ in millions)
At January 1, 2002		85.8
Retained profit for the current period		51.9
Currency translation differences		(24.4	)
At September 30, 2002		113.3

~~The accompanying notes are an integral part of these consolidated financial statements.~~SIGNATURES

~~INEOS~~Pursuant ~~GROUP~~to ~~HOLDINGS~~the requirements of the Securities Exchange Act of 1934, the ~~NOTES~~registrant TOhas ~~THE~~duly ~~FINANCIAL~~caused ~~STATEMENTS~~this ~~(UNAUDITED)~~report to be signed on its behalf by the undersigned, thereunto duly authorized on May 30, 2003.

1.INEOS ~~BASIS~~HOLDINGS OFPLC ~~PREPARATION~~ Registrant Issuer /s/ John Reece John Reece Director

Ineos Group Holdings plc (Ineos Group Holdings or the “Company”), was incorporated on May 14, 2001 as a holding company to house the ownership interests in certain chemical businesses acquired and controlled by a common owner. These businesses are comprised of Ineos Oxide (formerly Ineos plc), Ineos Fluor, Ineos Silicas and Ineos Phenol. With effect from January 1, 2001, the financial statements present the results of operations and financial position of Ineos Oxide, Ineos Fluor and Ineos Silicas. Ineos Fluor and Ineos Silicas were acquired on January 9, 2001. Our results of operations reflect the purchase of Ineos Fluor and Ineos Silicas from an effective acquisition date of January 1, 2001. The financial statements include the results of Ineos Phenol from May 23, 2001, the date on which it was acquired from Degussa AG.

The accompanying consolidated financial statements have been prepared on a historical cost basis in accordance with generally accepted accounting principles in the United Kingdom (“UK GAAP”).

The consolidated financial statements include all subsidiaries of the Company. Intra-group transactions and balances have been eliminated on consolidation.

The financial and operating results for any period less than a year are not necessarily indicative of the results that may be expected for a full year.

The accompanying consolidated financial statements of the Company are unaudited, with the exception of the balance sheet as at December 31, 2001 which has been extracted from audited financial statements.

In the opinion of the management of the Company, these statements include all adjustments necessary for a fair presentation of the results of all interim periods reported herein. All adjustments are of a normal recurring nature unless otherwise disclosed. Management believes that the disclosures made are adequate for a fair presentation of results of operations, financial position and cash flows.

2. PRINCIPAL ACCOUNTING POLICIES

The financial information has been prepared using accounting policies in accordance with UK GAAP. The financial information has been prepared under the historical cost convention.

3. SEGMENTAL INFORMATION

Class of business The Company’s business comprises the production and distribution of intermediate and speciality chemicals. During 2001, the Company acquired Ineos Fluor, Ineos Silicas and Ineos Phenol business segments. The Company’s management reporting procedures have been reorganised to reflect these acquisitions.

INEOS GROUP HOLDINGS NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED) (Continued)

3. SEGMENTAL INFORMATION (Continued)

The turnover and operating profit attributable to each different class of business as measured under UK GAAP is as follows:

	Three-Month period ended				Nine-Month period ended
	September 30,				September 30,
	2001		2002		2001		2002
	(€ in millions)				(€ in millions)
Turnover
Ineos Oxide		115.7		134.8		328.6		377.7
Ineos Fluor		74.3		72.7		239.3		235.9
Ineos Silicas		54.0		56.1		168.9		178.3
Ineos Phenol		245.4		322.1		330.1		894.4
		489.4		585.7		1,066.9		1,686.3
EBITDA
Ineos Oxide		20.8		21.5		52.6		57.8
Ineos Fluor		13.8		12.9		48.6		47.7
Ineos Silicas		7.0		10.1		20.6		31.4
Ineos Phenol		11.0		21.5		16.8		67.7
		52.6		66.0		138.6		204.6

Reconciliation of earnings before operating exceptional items, interest, taxation, depreciation and amortization (‘EBITDA’) to operating profit:

	Three-Month period ended						Nine-Month period ended
	September 30,						September 30,
	2001			2002			2001			2002
	(€ in millions)						(€ in millions)
EBITDA		52.6			66.0			138.6			204.6
Depreciation and amortization		(22.3	)		(18.8	)		(48.2	)		(60.8	)
Exceptional restructuring costs		(4.6	)		(1.2	)		(4.9	)		(17.3	)
Operating profit		25.7			46.0			85.5			126.5

4. INCOME TAXES

The income tax charge for the three-month and nine-month periods ended September 30, 2001 and 2002, is calculated based on the expected effective tax rate for the year.

INEOS GROUP HOLDINGS NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED) (Continued)

5. INVENTORY

	December 31,		September 30,
	2001		2002
	(€ in millions)
Raw materials and consumables		50.8		56.6
Work in progress		11.7		13.3
Finished products		89.8		90.0
		152.3		159.9

6. BORROWINGS

Long-term obligations as of December 31, 2001 and September 30, 2002 are as follows:

	December 31,			September 30,
	2001			2002
	(€ in millions)
Senior Credit Agreement		740.7			661.6
10 1/2% Senior Notes		260.0			260.0
Senior Secured Notes		1.6			—
Unamortized debt issue costs		(27.5	)		(25.1	)
		974.8			896.5
Less: amounts falling due within one year		(86.9	)		(64.7	)
		887.9			831.8
Finance leases		4.5			4.0
		892.4			835.8

Senior Secured Notes

On May 5, 1998, the Company issued DM190 million in 8.625% Senior Secured Notes due 2005 pursuant to a private offering. On December 14, 1998, the Company issued DM186,870,000 new 8.625% Senior Secured Notes due 2005 pursuant to an exchange offer whereby holders of DM186,870,000 of the original notes received new notes which have been registered under the Securities Act of 1933 as amended, but are otherwise identical to the original notes. On April 11, 2001 the Company announced a Tender Offer to redeem the Senior Secured Notes. The consent of the Note holders was subsequently obtained and 98.3% of the Senior Secured Notes were redeemed on May 23, 2001. The outstanding Senior Secured Notes of €1.6 million at December 31, 2001 were redeemed on April 30, 2002. The funds to repay these amounts were paid into an escrow account and were included in other debtors at December 31, 2001.

Senior Notes

On July 19, 2001, the Company issued €260 million in 10 1/2% Senior Notes due 2010 pursuant to a private offering.

The Senior Notes bear interest at 10 1/2% per annum, payable semi annually in arrears on February 1 and August 1 of each year. Unless previously redeemed as noted below, the Senior Notes will be redeemed by the Company at their principal amount on August 1, 2010.

INEOS GROUP HOLDINGS NOTES TO THE FINANCIAL STATEMENTS (Continued)

6. BORROWINGS (Continued)

The Senior Notes will be subject to redemption at any time prior to August 1, 2004, at the option of the Company, in whole but not in part, at a redemption price equal to 100% of the principal amount thereof, plus the applicable redemption premium and accrued and unpaid interest to the redemption date.

The Senior Notes will be subject to redemption at any time on or after August 1, 2004, at the option of the Company, in whole or in part, at the following redemption prices (expressed as percentages of the principal amount), if redeemed during the 12-month period beginning August 1 of the years indicated below:

	Redemption
Year	Price
2004		110.500	%
2005		107.788	%
2006		105.250	%
2007		102.625	%
2008 and thereafter		100.000	%

In each case, the redemption premium will be in addition to accrued and unpaid interest, if any, to the redemption date (subject to the rights of holders of record on relevant record dates to receive interest due on an interest payment date).

In addition, at any time on or prior to August 1, 2004, the Company or the direct or indirect parent of the Company, at its option, may use the net cash proceeds of one or more public equity offerings to redeem Senior Notes in an amount up to an aggregate of 35% of the sum of the initial aggregate principal amount of Senior Notes originally issued under the Indenture at a redemption price equal to 110.50% of the aggregate principal amount thereof, plus accrued and unpaid interest thereon, if any, to the redemption date; provided that Senior Notes in an amount equal to at least 65% of the sum of the initial aggregate principal amount of Notes originally issued under the Indenture remains outstanding immediately after the occurrence of such redemption.

The Senior Notes are unsecured. The Senior Notes are guaranteed by Ineos Holdings on a senior subordinated basis. Such a guarantee only becomes due 179 days after an event of default on the Senior Notes has occurred or earlier under certain circumstances.

The Senior Notes are stated net of debt issue costs of €6.0 million (2001: €6.4 million). These costs are allocated to the profit and loss account over the term of the Senior Notes in accordance with FRS 4.

The Indenture contains a number of operating and financial covenants including limitations on indebtedness, restricted payments, transactions with affiliates, liens, sale of assets and dividend payments.

Senior Credit Agreement

The Company has outstanding borrowings under a credit agreement (the “Senior Credit Agreement”) which consists of Term Loans (“Term Loan A”, “Term Loan B” and “Term Loan C”) and a revolving credit facility (the “Revolving Credit Facility”). The Term Loans outstanding at September 30, 2002 were €661.6 million, of which €64.7 million is due within one year. The total amounts outstanding on Term Loan A were €340.5 million, Term Loan B were €173.3 million and Term Loan C were €147.8 million.

INEOS GROUP HOLDINGS NOTES TO THE FINANCIAL STATEMENTS (Continued)

6. BORROWINGS (Continued)

Term Loan A is repayable in 12 semi-annual instalments beginning on December 31, 2001 ranging from 1.14% to 9.73% of the principal amount of the loan up until the final repayment in June 2007. Term Loan B is repayable in 14 semi-annual instalments beginning on December 31, 2001 ranging from 0.56% to 46.64% of the principal amount of the loan up until the final repayment in June 2008. Term Loan C is repayable in 16 semi-annual instalments beginning on December 31, 2001 ranging from 0.56% to 46.08% of the principal amount of the loan up until the final repayment in June 2009.

Ineos Holdings Limited and substantially all of its material subsidiaries are guarantors of the Senior Credit Agreement. Their obligations are secured by fixed and floating charges over all of the assets of Ineos Holdings Limited and substantially all of the assets of those material subsidiaries.

The Senior Credit Agreement contains numerous operating and financial covenants including requirements to maintain minimum coverage of interest expense, minimum coverage of total debt service and a maximum leverage ratio. In addition, the Senior Credit Agreement includes covenants relating to, among other things, limitations on indebtedness, ability to give guarantees, creation of security interests, making acquisitions and investments, disposing of assets and paying dividends.

The Term Loans are stated net of unamortized debt issue costs of €19.1 million (2001: €21.1 million). These costs are allocated to the profit and loss account in accordance with FRS 4.

7. CONTINGENCIES

The company is subject to various proceedings instituted by governmental authorities arising under the provisions of applicable laws or regulations relating to the discharge of materials into the environment or otherwise relating to the protection of the environment. In management’s opinion, none of the proceedings is material to the financial condition or results of operation of the company.

8. RECENT ACCOUNTING DEVELOPMENTS

In June 2001, the FASB issued SFAS 143, “Accounting for Asset Retirement Obligations”. The standard provides the accounting requirements for retirement obligations associated with tangible long-lived assets. The standard requires that the obligation associated with the retirement of tangible long-lived assets be capitalized into the asset cost at the time of initial recognition. The liability is then discounted to its fair value at the time of recognition using the guidance provided by that standard. The Company is required to comply with SFAS 143 in its financial statements for the year ending December 31, 2003. The Company is currently assessing the impact of SFAS 143 on its financial position and results of operations.

INEOS GROUP HOLDINGS NOTES TO THE FINANCIAL STATEMENTS (Continued)

8. RECENT ACCOUNTING DEVELOPMENTS (Continued)

In August 2001, the FASB issued SFAS 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”. The standard supersedes SFAS 121 and parts of Accounting Principles Board Opinion No. 30 regarding accounting for the impairment or disposal of long-lived assets. The standard changes existing guidance regarding the calculation of impairment losses, and also provides new guidance regarding the presentation of assets to be disposed of. The Company is required to comply with SFAS 144 in its financial statements for the year ending December 31, 2002. The Company is currently assessing the impact of SFAS 144 on its financial position and results of operations.

In April 2002, the FASB issued SFAS No. 145, “Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections”. This statement eliminates the automatic classification of gain or loss on extinguishment of debt as an extraordinary item of income and requires that such gain or loss be evaluated for extraordinary classification under the criteria of Accounting Principles Board No. 30 “Reporting Results of Operations”. This statement also requires sales-leaseback accounting for certain lease modifications that have economic effects that are similar to sales-leaseback transactions, and makes various other technical corrections to existing pronouncements. This statement will be effective for the Company for the year ending December 31, 2003. The adoption of this statement will not have a material effect on the Company’s results of operations or financial position.

In July 2002, the FASB issued SFAS No. 146, “Accounting For Costs Associated with Exit or Disposal Activities” (“SFAS 146”). SFAS 146 is effective for exit or disposal activities initiated after December 31, 2002. This standard will require Companies to recognize costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to an exit or disposal plan. The standard replaces the existing guidance provided by EITF Issue No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring).” The Company has not yet adopted SFAS No. 146 nor determined the effect of the adoption of SFAS No. 146 on the Company’s results of operations or financial position.

9. OTHER INFORMATION

On September 9, 2002, there was an explosion and fire at the Ineos Phenol plant in Mobile, USA. The total damage is estimated at approximately $10 million. Insurance coverage with certain deductibles is in place for property damage as well as business interruption. It is planned to have the plant back in operation by the end of the year.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on November 6, 2002.

INEOS GROUP HOLDINGS PLC Registrant Issuer /s/ Nadine Verbinnen Nadine Verbinnen Finance and Accounting Director

SIGNATURE

INEOS HOLDINGS LIMITED Registrant Guarantor /s/ Nadine Verbinnen Nadine Verbinnen Finance and Accounting Director

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