The Company was listed on the Stock Exchange of Thailand on 21 December 1987.

Transcription

1 Note Contents 1 General information 2 Basis of preparation of the interim financial statements 3 Business combination by acquisition of shares 4 Related party transactions 5 Accounts receivable - trade and others 6 Available-for-sale investments 7 Investments in subsidiaries 8 Investments in associates 9 Investments in jointly-controlled entities 10 Investments in related companies 11 Property, plant and equipment 12 Accounts payable - trade and others 13 Long-term debts 14 Share capital 15 Segment information 16 Basic earnings per share 17 Commitments with non-related parties 18 Guarantees 19 Event after the reporting period 15

2 These notes form an integral part of the interim financial statements. The interim financial statements issued for Thai statutory and regulatory reporting purposes are prepared in the Thai language. These English language financial statements have been prepared from the Thai language statutory financial statements, and were approved for issue by the executive directors on 14 May General information Charoen Pokphand Foods Public Company Limited, the Company, is incorporated in Thailand on 17 January 1978 and has its registered head office at 313 C.P. Tower, Silom Road, Kwaeng Silom, Khet Bangrak, Bangkok 10500, Thailand. The Company was listed on the Stock Exchange of Thailand on 21 December The principal activities of the Company and its subsidiaries (together referred to the Group ) are operating in agro-industrial and integrated food businesses. The Group s business operations are located throughout Thailand and overseas. The businesses are divided into 2 main segments as follows: 1) The livestock business comprises chicken, duck and pigs 2) The aquaculture business consists of shrimp and fish The Group s two main businesses are vertically integrated, sourcing raw materials for animal feed production, manufacturing animal feed, breeding animals, farming animals for commercial purposes, processing meat, producing ready-to-eat food products, and selling their products to both domestic and overseas markets. The Group s main products are divided into 3 main categories as follows: 1) Animal feed 2) Animal farm products such as animal breeder, live animal and meat, etc. 3) Processed foods and ready meals Details of the Company s subsidiaries as at 31 March 2014 and 31 December 2013 were as follows: Country of Ownership interest Name of the entity Type of business incorporation (%) 31 March 31 December Thailand operations and businesses related to operations in Thailand Livestock Business Direct subsidiaries 1) Bangkok Produce Merchandising Animal feed raw materials Thailand Public Company Limited distribution 2) Chester s Food Company Limited Restaurant Thailand ) CPF (Thailand) Public Company Agro-industrial and integrated food Thailand Limited 4) C.P. Merchandising Investment and international trading Thailand

3 Country of Ownership interest Name of the entity Type of business incorporation (%) 31 March 31 December Indirect subsidiaries 1) CPF Trading Wholesale and retail food products Thailand ) CPF Premium Foods (1) Food processing plant Thailand ) CPF Denmark A/S Importer and distributor of processed Denmark ) CPF Europe S.A. Importer and distributor of processed Belgium (4.1 is a subsidiary of CPF Europe S.A. ) 4.1) Tops Foods NV Production and distribution of Belgium ready-to-eat foods 5) CPF Food Trading Importer and distributor of processed The People s ) CPF Tokyo Importer and distributor of processed Japan ) CP Foods (UK) Limited Importer and distributor of processed United (7.1 to 7.60 are subsidiaries of CP Foods (UK) Limited) 7.1) Fusion Abbey Park Importer and distributor of processed United Limited 7.2) Fusion Alfrick Limited Importer and distributor of processed United ) Fusion Bracewell Limited Importer and distributor of processed United ) Fusion Bransford Limited Importer and distributor of processed United ) Fusion Broadway Limited Importer and distributor of processed United ) Fusion Brothwood Limited Importer and distributor of processed United ) Fusion Calis Limited Importer and distributor of processed United ) Fusion Carnoustie Limited Importer and distributor of processed United ) Fusion Charlton Limited Importer and distributor of processed United ) Fusion Crowle Limited Importer and distributor of processed United ) Fusion Dalaman Limited Importer and distributor of processed United ) Fusion Defford Limited Importer and distributor of processed United ) Fusion Dormington Limited Importer and distributor of processed United ) Fusion Driscoll Limited Importer and distributor of processed United ) Fusion Dumbleton Limited Importer and distributor of processed United ) Fusion Eastoe Limited Importer and distributor of processed United

4 Country of Ownership interest Name of the entity Type of business incorporation (%) 31 March 31 December ) Fusion Elmbridge Limited Importer and distributor of processed United ) Fusion Everton Limited Importer and distributor of processed United ) Fusion Exning Limited Importer and distributor of processed United ) Fusion Fethiye Limited Importer and distributor of processed United ) Fusion Gatley Limited Importer and distributor of processed United ) Fusion Gocek Limited Importer and distributor of processed United ) Fusion Gray Limited Importer and distributor of processed United ) Fusion Harper Limited Importer and distributor of processed United ) Fusion Hartford Limited Importer and distributor of processed United ) Fusion Hawstead Limited Importer and distributor of processed United ) Fusion Head Street Limited Importer and distributor of processed United ) Fusion Heath Limited Importer and distributor of processed United ) Fusion Irvine Limited Importer and distributor of processed United ) Fusion Kaitaia Limited Importer and distributor of processed United ) Fusion Kroma Limited Importer and distributor of processed United ) Fusion Krone Limited Importer and distributor of processed United ) Fusion Lineker Limited Importer and distributor of processed United ) Fusion Littleworth Limited Importer and distributor of processed United ) Fusion Madeley Limited Importer and distributor of processed United ) Fusion Mcmahon Limited Importer and distributor of processed United ) Fusion Mountfield Limited Importer and distributor of processed United ) Fusion Moyes Limited Importer and distributor of processed United ) Fusion Newlands Limited Importer and distributor of processed United ) Fusion Niamh Limited Importer and distributor of processed United ) Fusion Pershore Limited Importer and distributor of processed United

5 Country of Ownership interest Name of the entity Type of business incorporation (%) 31 March 31 December ) Fusion Priest Lane Limited Importer and distributor of processed United ) Fusion Ratcliffe Limited Importer and distributor of processed United ) Fusion Reid Limited Importer and distributor of processed United ) Fusion Richardson Limited Importer and distributor of processed United ) Fusion Samui Limited Importer and distributor of processed United ) Fusion Sharp Limited Importer and distributor of processed United ) Fusion Sheedy Limited Importer and distributor of processed United ) Fusion Soham Limited Importer and distributor of processed United ) Fusion Southall Limited Importer and distributor of processed United ) Fusion Stevens Limited Importer and distributor of processed United ) Fusion Thetford Limited Importer and distributor of processed United ) Fusion Turgay Limited Importer and distributor of processed United ) Fusion Uzumlu Limited Importer and distributor of processed United ) Fusion Van Den Hauwe Importer and distributor of processed United Limited 7.56) Fusion Wadborough Importer and distributor of processed United Limited 7.57) Fusion Wellington Limited Importer and distributor of processed United ) Fusion Whistler Limited Importer and distributor of processed United ) Fusion Wright Limited Importer and distributor of processed United ) Fusion Yamac Limited Importer and distributor of processed United Aquaculture business Direct subsidiaries 1) Seafoods Enterprise (1) Shrimp processing plant Thailand Indirect subsidiaries 1) C.P. Food Products, Inc. Importer and distributor of seafood United States products of America 19

6 Country of Ownership interest Name of the entity Type of business incorporation (%) 31 March 31 December Other businesses Direct subsidiaries 1) CPF Training Center Training center service provider Thailand ) CPF IT Center Information technology service Thailand provider 3) IP (Thailand) (4) Investment Thailand Overseas operations Direct subsidiaries 1) Charoen Pokphand Foods Kenya Animal feedmill and livestock Kenya farming 2) CPF Investment Limited Investment British Virgin (2.1 to 2.6 are subsidiaries of Islands CPF Investment Limited) 2.1) Bright Excel Investments Investment British Virgin Limited Islands 2.2) Charoen Pokphand (Taiwan) Investment Bermuda Investment Limited 2.3) Coinaton Investments Investment British Virgin Limited Islands (2.3.1 is a subsidiary of Coinaton Investments Limited) 2.3.1) Chun Ta Investment Investment Taiwan ) CPVN Limited Investment British Virgin Islands 2.5) Forward Pass Limited Investment British Virgin (2.5.1 is a subsidiary of Islands Forward Pass Limited) 2.5.1) Ta Chung Investment Investment Taiwan ) New Splendid Holdings Investment British Virgin Limited Islands 3) C.P. Aquaculture (Beihai) Aquatic feed production and The People s distribution and aquaculture farming 4) C.P. Aquaculture (Dongfang) Shrimp hatchery business The People s ) C.P. Aquaculture (Hainan) Aquaculture farming The People s ) C.P. Foods Holdings Limited Investment British Virgin Islands 7) C.P. Foods International Limited Investment British Virgin Islands 20

7 Country of Ownership interest Name of the entity Type of business incorporation (%) 31 March 31 December Direct and indirect subsidiaries 1) Charoen Pokphand Foods Animal feed production and Philippines Philippines Corporation distribution and shrimp hatchery (1.1 is a subsidiary of business Charoen Pokphand Foods Philippines Corporation) 1.1) A.P.P. Enterprise, Inc. (2) Property lease-out Philippines ) Charoen Pokphand Foods Animal feedmill and livestock Russia (Overseas) LLC. farming (2.1 is a subsidiary of Charoen Pokphand Foods (Overseas) LLC.) 2.1) CPF Agro LLC. Livestock farming Russia ) C.P. Standart Gida Sanayi ve Agro-industrial and integrated food Turkey Ticaret A.S. 4) C.P. Pokphand Investment Bermuda (4.1 to 4.86 are subsidiaries of C.P. Pokphand ) 4.1) C.P. Aquaculture Production and sale of animal feed The People s (Yangjiang) 4.2) C.P. Enterprises Limited Investment Hong Kong ) C.P. Food (Xiangyang) Food processing plant The People s ) C.P. Standard Resources Investment Hong Kong Limited 4.5) C.P. Vietnam Corporation Animal feed production and Vietnam distribution and farming and food processing plant 4.6) C.T. Progressive (H.K.) Investment Bermuda Limited 4.7) Changsha Chia Tai Production and sale of animal feed The People s ) Charoen Pokphand () Investment British Virgin Investment Limited Islands 4.9) Chengdu Chia Tai Production and sale of animal feed The People s ) Chia Tai () Investment and trading The People s Investment 4.11) Chia Tai Food Enterprise Food processing plant, production and The People s (Qingdao) distribution of processed meat and ready meal 4.12) Chia Tai Food Enterprise Food processing plant, production and The People s (Qinhuangdao) distribution of processed meat and ready meal 4.13) Chia Tai Huazhong Investment Hong Kong Biochemistry Limited 21

8 Country of Ownership interest Name of the entity Type of business incorporation (%) 31 March 31 December ) Chia Tai Pucheng Investment Hong Kong Biochemistry Limited 4.15) Chia Tai Yongji Production and sale of animal feed The People s Enterprise 4.16) Chia Tai Yueyang Production and sale of animal feed The People s ) Chongqing Chia Tai Production and sale of animal feed The People s (2) 4.18) Chongqing Shuangqiao Production and sale of animal feed The People s Chia Tai 4.19) Chuzhou Chia Tai Production and sale of animal feed The People s ) CP Investment Investment Cayman Limited Islands 4.21) CP Food Investment Investment Hong Kong Limited 4.22) Dali Chia Tai Production and sale of animal feed The People s ) ECI Machinery Investment British Virgin Islands 4.24) Ek Chor Investment Bermuda Motorcycle 4.25) Ek Chor Investment Investment Hong Kong Company Limited 4.26) Fuzhou Da Fu Production and sale of animal feed The People s ) Gansu Chia Tai Agriculture Providing financial guarantee services The People s Financing Guarantee 4.28) Ganzhou Chia Tai Production and sale of animal feed The People s Industrial 4.29) Golden Industrial Investment Hong Kong Investment Limited 4.30) Guang An Chia Tai Production and sale of animal feed The People s (2) 4.31) Guangdong Tai Tong Investment The People s Investment (3) 4.32) Guanghan Chia Tai Production and sale of animal feed The People s Feed Tech 22

9 Country of Ownership interest Name of the entity Type of business incorporation (%) 31 March 31 December ) Guangxi Chia Tai Providing financial guarantee services The People s Financing Guarantee 4.34) Guilin Chia Tai Production and sale of animal feed The People s ) Guiyang Chia Tai Production and sale of animal feed The People s ) Hangzhou Advance Production and sale of animal feed The People s Feed Tech 4.37) Hannick Limited Property investment Hong Kong ) Hefei Chia Tai Production and sale of animal feed The People s ) Henan Chia Tai Agro- Providing financial guarantee The People s Industrial Financing services Guarantee 4.40) Huai Hua Chia Tai Production and sale of animal feed The People s ) Huludao Chia Tai Production and sale of animal feed The People s Husbandry 4.42) Inner Mongolia Chia Tai Production and sale of animal feed The People s ) Jiangsu Chia Tai Providing financial guarantee The People s Agriculture Financing services Guarantee 4.44) Jiangsu Huai Yin Chia Tai Production and sale of animal feed The People s ) Jinan Chia Tai (2) Production and sale of animal feed The People s ) Jiu Jiang Chia Tai Production and sale of animal feed The People s Feedstuff (2) 4.47) Kunming Chia Tai Production and sale of animal feed The People s ) Lanzhou Chia Tai Production and sale of animal feed The People s ) Liuzhou Advance Feed Production and sale of animal feed The People s Tech 23

10 Country of Ownership interest Name of the entity Type of business incorporation (%) 31 March 31 December ) Mianyang Chia Tai Production and sale of animal feed The People s ) Modern State Investments Investment British Virgin Limited Islands 4.52) Nanchang Chiatai Production and sale of animal feed The People s Livestock 4.53) Nanning Chia Tai Animal Production and sale of animal feed The People s Husbandry 4.54) Nantong Chia Tai Production and sale of animal feed The People s (2) 4.55) Nantong Chia Tai Production and sale of animal feed The People s Technology Feed (2) 4.56) Nanyang Chia Tai Production and sale of animal feed The People s ) Neijiang Chia Tai Production and sale of animal feed The People s ) Ningbo Chia Tai Production and sale of animal feed The People s Agriculture 4.59) Pingdingshan Chia Tai Production and sale of animal feed The People s ) Pucheng Chia Tai Production and sale of The People s Biochemistry chlortetracycline Limited 4.61) Qingdao Chia Tai Production and sale of animal feed The People s Agricultural Development 4.62) Shaanxi Chia Tai Production and sale of animal feed The People s ) Shanghai EK Chor Sale of machine and spare part The People s Industrial Trading (3) 4.64) Shanxi Chia Tai Production and sale of animal feed The People s (2) 4.65) Shenyang Advance Feed Production and sale of animal feed The People s Tech 4.66) Shenyang Chia Tai Production and sale of animal feed The People s Livestock 24

11 Country of Ownership interest Name of the entity Type of business incorporation (%) 31 March 31 December ) Shijiazhuang Chia Tai Production and sale of animal feed The People s ) Shuangliu Chia Tai Production and sale of animal feed The People s ) Tai Zhou Chia Tai Feed Production and sale of animal feed The People s ) Tianjin Chia Tai Production and sale of animal feed The People s Agro-Industrial 4.71) Tianjin Chia Tai Feed Production and sale of animal feed The People s Tech 4.72) Urumqi Chia Tai Animal Production and sale of animal feed The People s Husbandry 4.73) Weinan Chia Tai Production and sale of animal feed The People s ) Wuhan Chia Tai Production and sale of animal feed The People s ) Wuhan Chia Tai Production and sale of animal feed The People s Aquaculture 4.76) Wuxuan Chia Tai Animal Production and sale of animal feed The People s Husbandry 4.77) Xiamen Chia Tai Production and sale of animal feed The People s Agriculture (2) 4.78) Xiangyang Chia Tai Production and sale of animal feed The People s ) Xuzhou Chia Tai Feed Production and sale of animal feed The People s (2) 4.80) Yi Chang Chia Tai Production and sale of animal feed The People s ) Yinchuan Chia Tai Production and sale of animal feed The People s ) Yongan Chia Tai Production and sale of animal feed The People s ) Zhoukou Chia Tai Production and sale of animal feed The People s

12 Country of Ownership interest Name of the entity Type of business incorporation (%) 31 March 31 December ) Zhumadian Chia Tai Production and sale of animal feed The People s (2) 4.85) Zhumadian Huazhong Production and sale of The People s Chia Tai chlortetracycline 4.86) Zhumadian Huazheng Real estate property The People s Property 5) CPF Tanzania Limited Animal feedmill and livestock Tanzania farming Indirect subsidiaries 1) C.P. Laos Animal feedmill and livestock Laos farming 2) Charoen Pokphand Foods Investment in aquaculture Malaysia (Malaysia) Sdn. Bhd. integration business and (2.1 to 2.3 are subsidiaries swine businesses of Charoen Pokphand Foods (Malaysia) Sdn. Bhd.) 2.1) Asia Aquaculture (M) Shrimp farming and processing plant Malaysia Sdn. Bhd. 2.2) Makin Jernih Sdn. Bhd. Investment Malaysia (2.2.1 to are subsidiaries of Makin Jernih Sdn. Bhd.) 2.2.1) AA Meat Shop Livestock processing retailer Malaysia Sdn. Bhd ) Chau Yang Livestock farming Malaysia Farming Sdn. Bhd ) Tip Top Meat Livestock processing plant Malaysia Sdn. Bhd. 2.3) Star Feedmills (M) Aquatic feed production and Malaysia Sdn. Bhd. distribution 3) Charoen Pokphand (India) Animal feedmill and livestock India Private Limited farming 4) Charoen Pokphand (USA), Inc. (3) Broiler chicken integration United States of America 5) Charoen Pokphand Enterprise Chicken integration and livestock Taiwan (Taiwan) (2) farming (5.1 to 5.5 are subsidiaries of Charoen Pokphand Enterprise (Taiwan) ) 5.1) Arbor Acres (Taiwan) Livestock farming Taiwan (2) 5.2) Charoen Pokphand Importer and distributor of feedstuff Taiwan (Taiwan) (2) additives and animal vaccines 5.3) Chia Tai Lianyungang Investment Hong Kong (2) 26

13 Country of Ownership interest Name of the entity Type of business incorporation (%) 31 March 31 December ) Lianyungang Chia Tai Production and sale of animal feed The People s Agro-industry Development (2) 5.5) Plenty Type Limited (2) Investment Cayman Islands 6) Russia Baltic Park Invest ASA Investment Norway (6.1 to 6.8 are subsidiaries of Russia Baltic Park Invest ASA) 6.1) Farm Construction Limited Swine farm construction Russia Liability Company 6.2) Finagro ASP Financial service Denmark ) Kornevo Limited Liability Retail food processing products Russia Company 6.4) M.I.R. Closed Joint Stock Real estate property Russia Company 6.5) NNPP Limited Liability Livestock farming Russia Company 6.6) Penza Agri Invest Limited Livestock farming Russia Liability Company 6.7) Penza Land Invest Limited Real estate property Russia Liability Company 6.8) Pravdinsk Pig Production Livestock farming Russia Closed Joint Stock Company (1) (2) (3) (4) In the process of liquidation The Company has the power to govern those companies. Operations wound up Disposed the entity in the first quarter of Basis of preparation of the interim financial statements 2.1 Statement of compliance The interim financial statements are prepared on a condensed basis in accordance with Thai Accounting Standard ( TAS ) No. 34 (revised 2012) Interim Financial Reporting; including related guidelines promulgated by the Federation of Accounting Professions ( FAP ); applicable rules and regulations of the Thai Securities and Exchange Commission. 27

14 The interim financial statements are prepared to provide an update on the financial statements for the year ended 31 December They do not include all of the financial information required for full annual financial statements but focus on new activities, events and circumstances to avoid repetition of information previously reported. Accordingly, these interim financial statements should be read in conjunction with the financial statements for the year ended 31 December The accounting policies and methods of computation applied in these interim financial statements are consistent with those applied in the financial statements for the year ended 31 December 2013 except that the Group has adopted the new and revised TFRS that are effective for annual periods beginning on or after 1 January The adoption of these new and revised TFRS did not have any material effect on the accounting policies, methods of computation, financial performance or position of the Group. 2.2 Functional and presentation currency The interim financial statements are prepared and presented in Thai Baht which is the Company s functional currency. All financial information presented in Thai Baht has been rounded in the notes to the interim financial statements to the nearest million Baht unless otherwise stated. 2.3 Use of judgements and estimates The preparation of interim financial statements in conformity with TFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. In preparing these interim financial statements, the judgements made by management in applying the Group s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the financial statements for the year ended 31 December Business combination by acquisition of shares 3.1 Share acquisition of Tops Foods NV ( Tops Foods ) On 8 January 2014 the Company s Board of Directors passed a resolution to approve CPF Europe S.A. ( CPF EU ), a 99.99% indirectly owned subsidiary, to acquire ordinary shares of Tops Foods which is incorporated in Belgium, whose main business is the production and distribution of chilled and ambient ready-to-eat foods. The total amount of the transaction is EUR 9.3 million or Baht 416 million. The Group obtained the control in Tops Foods from the transfer of 5,503 ordinary shares (equal to 80.01% of Tops Foods total issued and paid-up shares) on 20 January 2014 ( Acquisition date ). 28

15 The Group has applied Thai Financial Reporting Standards ( TFRS ) No. 3 (revised 2012) Business Combinations to recognise the business combination transactions. The following summarises the major classes of consideration transferred, and the recognised amounts of assets acquired and liabilities assumed at the acquisition date: Consideration (Unit: million Baht) Fair value Cash 416 Identifiable assets acquired and liabilities assumed (Unit: million Baht) Fair value Cash and cash equivalents 8 Trade receivables 58 Inventories 57 Other current assets 8 Property, plant and equipment 618 Other non-current assets 17 Borrowings (233) Trade and other payables (53) Other current liabilities (20) Deferred tax liabilities (121) Net assets 339 Non-controlling interests of the acquire (based on their proportionate interest in the recognised amount of the identifiable assets and liabilities of the acquiree) (68) Group s ownership interest 271 Goodwill 145 Consideration transferred 416 Proceed from acquisition of subsidiaries (8) Net consideration paid for acquisition of subsidiaries 408 The factors contributing to the goodwill are the high potential from the production base expansion of ready-to-eat food into European continent and the synergy benefits from the modern technology with high standard which increases the operating efficiency of the Group. Goodwill from the business combination will not qualify for any tax deduction. 29

16 The consolidated statement of income for the three-month period ended 31 March 2014 include operation results of Tops Foods for the period from 20 January 2014 to 31 March Significant details are as follows: For the period from 20 January 2014 to 31 March 2014 Revenue from sale of goods 142 Loss for the period attributable to equity holders of the Company Share acquisition of Hefei Chia Tai ( HCT ) On 24 February 2014 the Company s Board of Directors passed a resolution to approve Chia Tai () Investment Company Limited ( CTCI), a 75.01% indirectly owned subsidiary (percentage of shareholding as at 24 February 2014) to acquire the entire investment in HCT which is incorporated in, from Chia Tai () Agro-Industrial Company Limited, a related company. The main business of HCT is production and sale of animal feed in. The total amount of transaction is Renminbi 220 million or Baht 1,173 million. CTCI obtained the control in HCT from the transfer of % of HCTs total issued and paid-up capital which equaled to 74.62% interest by the Group as at 13 March 2014 ( Acquisition date ). The Group has applied Thai Financial Reporting Standards ( TFRS ) No. 3 (revised 2012) Business Combinations to recognise the business combination transactions. The following summarises the major classes of consideration transferred, and the recognised amounts of assets acquired and liabilities assumed at the acquisition date: Consideration Fair value Cash 1,173 Identifiable assets acquired and liabilities assumed Fair value Cash and cash equivalents 12 Trade receivables 21 Inventories 142 Other current assets 106 Plant and equipment 156 Other non-current assets 89 Trade and other payables (79) Other current liabilities (234) Deferred tax liabilities (32) Net assets 181 Goodwill 992 Consideration for acquisition of subsidiaries - payable as at 31 March ,173 30

17 As at 31 March 2014 the Group is currently assessing the final fair value of the net assets acquired. In accordance with TFRS No. 3 (revised 2012), if new information obtained within one year from the acquisition date about facts and circumstances that existed at the acquisition date identifies adjustments to the above provisional fair values, or any additional assets or liabilities that existed at the acquisition date, then the acquisition accounting will be revised. The factors contributing to the goodwill are the high potential from the feed business base expansion in and further reinforce the Group s leading position in the feed industry in. Goodwill from the business combination will not qualify for any tax deduction. The consolidated statement of income for the three-month period ended 31 March 2014 include operation results of HCT for the period from 13 March 2014 to 31 March Significant details are as follows: For the period from 13 March 2014 to 31 March 2014 Revenue from sale of goods 162 Profit for the period attributable to equity holders of the Company 3 If the acquisitions of Tops Foods and HCT had occurred on 1 January 2014, management estimates that revenue from sale of goods and profit in the consolidated financial statements for the period ended 31 March 2014 would have been as follows: For the period ended 31 March 2014 Revenue from sale of goods 98,426 Profit for the period attributable to equity holders of the Company 2,056 31

18 4 Related party transactions Related parties are those parties considered to be related to the Group. Related parties have the ability, directly or indirectly, to control the Group or exercise significant influence over the Group in making financial and operating decisions or where the Group and parties are subject to common control or common significant influence. The significant influence entity of the Company is Charoen Pokphand Group Company Limited which directly and indirectly owned 39.13% of the Company s voting rights as of the latest closing date of shareholder register book on 28 March The pricing policies for particular types of transactions with related parties are explained further below: Transactions Sale of goods Purchase of raw material and goods Purchase and sale of property, plant and equipment Purchase and sale of investments Interest income/interest expense Dividend income Rental and service fees Technical service fees Insurance premium Trademark license fee Other income/other expenses Pricing policies The price list of the Group The price list of the suppliers Fair value Fair value Source of fund cost plus fund management expenses Upon declaration Standard rates as specified by the lessors or service providers Rate per quantity of feed production/rate per sale value of animal feed/rate per total revenue Standard rates as specified by the insurers Rate per sales value under trademark Standard service rates as specified by the service providers 4.1 Significant transactions with related parties for the three-month periods ended 31 March 2014 and 2013 Consolidated Separate financial statements financial statements (a) Revenues Significant influence entity Gain on sale of investments Subsidiaries Sale of goods ,253 Dividend income - - 2,851 2,655 Interest income Associates, jointly-controlled entities and related companies Sale of goods 7,283 6, Rental, service and other income Interest income Software application income Training and seminar income

19 Consolidated Separate financial statements financial statements (b) Expenses and others Significant influence entity Purchase of raw materials and goods 1,772 1, Technical service fees Trademark license fees Subsidiaries Purchase of raw materials and goods Software application fees Rental and service fees Training and seminar fees Interest expenses Associates, jointly-controlled entities and related companies Purchase of raw materials and goods 11,696 5, Construction costs of buildings, structures and others Rental and service fees Insurance premium Purchase of equipment and others Trademark license fees Software application fees Interest and other expenses Investment and divestment transactions The Group invested in related companies as disclosed in note 3 to the financial statements. Disposal of investment in IP (Thailand) ( IP ) On 28 January 2014 the Company s Board of Directors passed a resolution to approve the Company to dispose the entire investment in IP totaling 9,999,997 ordinary shares (equal to 99.99% of total issued and paid-up shares of IP) to Charoen Pokphand Group for total consideration of Baht 51 million. Gains on sales of investments in the consolidated and separate financial statements amounting Baht 64 million and Baht 26 million respectively. 33

20 4.3 Balances with related parties as at 31 March 2014 and 31 December 2013 were as follows: Accounts receivable - trade and others Consolidated Separate financial statements financial statements 31 March 31 December 31 March 31 December Significant influence entity Subsidiaries - - 1,694 1,814 Associates and jointlycontrolled entities 2,284 2, Related companies 3,535 3, Total 5,820 6,131 1,820 1, Short-term loans Consolidated financial statements Outstanding balance 31 March 31 December Average balance Jointly-controlled entities Total Separate financial statements Outstanding balance 31 March 31 December Average balance Subsidiaries 15,586 17,970 15,323 Total 15,586 17,970 15,323 The Company computes the average movement from the outstanding balances of short-term loans at the end of each month excluding accrued interest income Accrued dividend income Consolidated Separate financial statements financial statements 31 March 31 December 31 March 31 December Subsidiaries - - 2,851 1,125 Total - - 2,851 1,125 34

21 4.3.4 Accrued interest income Consolidated Separate financial statements financial statements 31 March 31 December 31 March 31 December Subsidiaries Total Long-term loans Separate financial statements Outstanding balance 31 March 31 December Average Balance Subsidiaries 18,427 18,853 18,671 Less current portion (1,091) (1,443) Net 17,336 17,410 The Company computes the average movement from the outstanding balances of long-term loans at the end of each month excluding accrued interest income Accounts payable - trade and others Consolidated Separate financial statements financial statements 31 March 31 December 31 March 31 December Significant influence entity Subsidiaries Associates and jointlycontrolled entities Related companies 1,501 1, Total 2,182 2,

22 4.3.7 Short-term borrowings Consolidated financial statements Outstanding balance 31 March 31 December Average balance Jointly-controlled entities Related company Total Separate financial statements Outstanding balance 31 March 31 December Average balance Subsidiary Total The Company computes the average movement from the outstanding balances of short-term borrowings at the end of each month excluding accrued interest expense Long-term borrowings Consolidated financial statements Outstanding balance 31 March 31 December Average balance Related company Less current portion (12) (23) Total - - The Company computes the average movement from the outstanding balances of long-term borrowings at the end of each month excluding accrued interest expense. 36

23 4.4 Balances of loans/borrowings and interest rates Balances of loans/borrowings and interest rates as at 31 March 2014 and 31 December 2013 were as follows: Consolidated financial statements Average Balance with Balance with interest rate fixed interest rate floating interest rate (%) March December March December March December Short-term loans to jointlycontrolled entities Short-term borrowings from jointlycontrolled entity and related company Long-term borrowings from related company Separate financial statements Average Balance with Balance with interest rate fixed interest rate floating interest rate (%) March December March December March December Short-term loans to subsidiaries 397 6,516 15,189 11, Long-term loans to subsidiaries 18,236 18, Short-term borrowings from subsidiary

24 4.5 Key management personnel compensations Key management personnel compensations consist of: Consolidated Separate financial statements financial statements For the three-month period ended 31 March Short-term employee benefits Post-employment under defined benefit plans Total As at 31 March Employee benefit obligations Total Commitments As at 31 March 2014 and 31 December 2013 the Group had commitments with related parties as follows: Capital commitments Consolidated Separate financial statements financial statements 31 March 31 December 31 March 31 December Contracted but not provided for Mainly represents construction contracts of buildings and structures, purchase of machinery and others Commitments under operating lease agreements Consolidated Separate financial statements financial statements 31 March 31 December 31 March 31 December Within one year Over one year but within five years 1,410 1, Over five years Total 2,406 2,

25 The Company and certain subsidiaries had lease agreements with related parties covering office premises (including related facilities service agreements), land, farms and vehicles for periods of 1 to 9 years, expiring during 2014 to Significant agreements As at 31 March 2014 the Group had the following significant agreements with related parties: Technical service agreements The Company and certain subsidiaries had technical service agreements with a significant influence entity, Charoen Pokphand Group Company Limited ( CPG ). Under the terms of the agreements, CPG agrees to research and develop the raw material ingredients for the production of animal feeds for the Company and subsidiaries. In this regard, the Company and subsidiaries are committed to pay the technical service fee, which is calculated from the feed production quantity dependent upon the types of feed as stipulated in the agreements, to CPG. The minimum service fee ranges from Baht 0.1 million to Baht 1.3 million per month. These agreements shall be in effect starting from 1 January 2014 to 31 December In addition, certain foreign subsidiaries had agreements to obtain the technical service assistance from CPG. The foreign subsidiaries are committed to pay service fees to CPG in accordance with the terms and conditions stipulated in the agreements Trademark agreements A subsidiary (CPF Trading Company Limited) had trademark agreements with a significant influence entity, Charoen Pokphand Group Company Limited ( CPG ), for the right to use trademark. In this regard, the subsidiary is committed to pay the trademark license fees to CPG at the rates of 0.2% and 0.4% of the sale value of each product as stipulated in the agreements. These agreements shall be in effect starting from 1 July 2011 to 30 June The Company and certain subsidiaries had trademark agreements with CPG, for the right to use trademark. In this regard, the Company and subsidiaries are committed to pay the trademark license fees to CPG at the rates of 0.2% and 0.4% of the sale value of each product as stipulated in the agreements. These agreements shall be in effect starting from 1 January 2014 to 31 December A subsidiary had a trademark agreement with a related company, Star Marketing ( STAR ), for the right to use STAR trademark. In this regard, the subsidiary is committed to pay the trademark license fee to STAR, which is calculated from the sale value under the trademark at the rates as stipulated in the agreement. This agreement shall be in effect starting from 1 January 2014 to 31 December

26 4.7.3 Application system service agreement A subsidiary had an application system service agreement with a related company, Freewill Solutions ( Freewill ). Under the terms of the agreement, Freewill agrees to provide the subsidiary the application system service. In this regard, the subsidiary is committed to pay the application system service fee to Freewill at the agreed rate stipulated in the agreement. This agreement shall be in effect starting from 1 January 2014 to 31 December Service agreements for import and export transactions The Company and certain subsidiaries had service agreements with a related company, C.P. Intertrade ( CPI ). Under the terms of the agreements, CPI agrees to provide documentation services and others relating to import and export transactions of the Company and subsidiaries. In this regard, the Company and subsidiaries are committed to pay the service fees to CPI at the agreed rate stipulated in the agreements. These agreements shall be in effect since 1 July 2013 to 30 June Software application agreements A subsidiary, CPF IT Center, had information technology service and software application agreements with local and foreign related companies. The term and condition of service fees are stipulated in the agreements. The agreements shall be terminated upon either party agrees to terminate the agreements or either party is in breach of the agreements. 5 Accounts receivable - trade and others Consolidated Separate financial statements financial statements Note 31 March 31 December 31 March 31 December Related parties 4 5,820 6,131 1,820 1,931 Other parties 18,215 18,736 2,827 2,878 Total 24,035 24,867 4,647 4,809 Less allowance for doubtful accounts (587) (627) (88) (89) Net 23,448 24,240 4,559 4,720 Bad and doubtful debts expense (reversal of allowance for doubtful accounts) for the three-month period ended 31 March (15) 16 (1) (1) 40

27 The outstanding balances of the problem accounts receivable - trade and others as at 31 March 2014 and 31 December 2013 classified by aging were as follows: Consolidated Separate financial statements financial statements 31 March 31 December 31 March 31 December Periods over credit terms: Over 3 months to 6 months Over 6 months to 12 months Over 12 months Total Available-for-sale investments Movements during the three-month periods ended 31 March 2014 and 2013 were as follows: Consolidated financial statements At 1 January 1,909 2,455 Currency translation differences - (3) Changes in fair value (152) 909 At 31 March 1,757 3,361 At 31 December 1,909 Details of available-for-sale investments Available-for-sale investments as at 31 March 2014 and 31 December 2013 were as follows: Ownership interest (both direct and indirect) Consolidated Separate (%) financial statements financial statements March December March December March December Marketable securities - at fair value True Corporation Public Company Limited - at cost ,510 1, Changes in fair value Total 1,757 1,

28 7 Investments in subsidiaries Movements during the three-month periods ended 31 March 2014 and 2013 were as follows: Consolidated Separate financial statements financial statements At 1 January ,565 85,421 Acquisitions/additional investments ,000 Disposals - - (25) - At 31 March ,541 87,421 At 31 December - 87,565 42

29 Details of investments in subsidiaries and dividend income Investments in subsidiaries as at 31 March 2014 and 31 December 2013, and dividend income for the three-month periods ended 31 March 2014 and 2013 were as follows: Separate financial statements Ownership interest Accumulated Dividend income (%) Paid-up capital Cost method impairment At cost - net for three months ended March December March December March December March December March December March March Marketable security C.P. Pokphand ,925 7,883 24,290 24, ,290 24, Total 24,290 24, ,290 24, Non-marketable securities Bangkok Produce Merchandising Public Company Limited ,230 1, ,230 1, CPF (Thailand) Public Company Limited ,008 7,008 11,882 11, ,882 11,882 1,051 - CPF Training Center CPF IT Center C.P. Merchandising ,000 9,000 9,000 9, ,000 9,000 1,800 2,655 43

30 Details of investments in subsidiaries and dividend income (Continued) Separate financial statements Ownership interest Accumulated Dividend income (%) Paid-up capital Cost method impairment At cost - net for three months ended March December March December March December March December March December March March Chester Food IP (Thailand) C.P. Aquaculture (Beihai) C.P. Aquaculture (Dongfang) C.P. Aquaculture (Hainan) C.P. Standart Gida Sanayi ve Ticaret A.S ,206 4, Charoen Pokphand Foods Kenya Charoen Pokphand Foods (Overseas) LLC ,663 1,394 1,394 (938) (938) Charoen Pokphand Foods Philippines Corporation ,890 2,890 1,055 1, ,055 1, CPF Investment Limited ,929 36,929 36,929 36, ,929 36,

31 Details of investments in subsidiaries and dividend income (Continued) Separate financial statements Ownership interest Accumulated Dividend income (%) Paid-up capital Cost method impairment At cost - net for three months ended March December March December March December March December March December March March CPF Tanzania Limited C.P. Foods Holdings Limited C.P. Foods International Limited Total 64,189 64,213 (938) (938) 63,251 63,275 2,851 2,655 Grand Total 88,479 88,503 (938) (938) 87,541 87,565 2,851 2,655 45

32 8 Investments in associates Movements of investments in associates during the three-month periods ended 31 March 2014 and 2013 were as follows: Consolidated Separate financial statements financial statements At 1 January 40,833 30, Share of profit of associates 1,104 1, Acquisitions/additional investments 2,499 9, Disposals (187) (976) - - Currency translation differences (59) (222) - - At 31 March 44,190 40, At 31 December 40,

33 Details of investments in associates and dividend income Investments in associates as at 31 March 2014 and 31 December 2013, and dividend income for the three-month periods ended 31 March 2014 and 2013 were as follows: Consolidated financial statements Ownership interest (both direct and indirect) Accumulated Dividend income (%) Paid-up capital Cost method Equity method impairment At equity - net for three months ended March December March December March December March December March December March December March March Marketable security CP ALL Public Company Limited ,983 8,983 32,762 30,531 38,968 35, ,968 35, Total 32,762 30,531 38,968 35, ,968 35, Non-marketable securities Nava ,203 1, Ross Breeders Siam Arbor Acres Thailand BHJ Kalino Food AB ( BHJ ) * C.P. Aquaculture (India) Private Limited C.P. Cambodia ,446 1,