Annual Report'04 CPF (English) Annual Report CP

The Company at a glance 2
Message from the Chairman 4

Message from the President 5
Business Profile 6
Risk Factors 21
Management Discussion and Snalysis on
Results and Financial Status 25
Management 31
Financial Statements 32
Quick Facts 54
Shareholding Structure 55
From Past to Present 56
Information of Companies in which
the Company has Shareholding 58
Securities Issued by the Company in brief 64
References 69
Contents
2 I Annual Report 2004 I Charoen Pokphand Foods Public Company Limited Contents Annual Report 2004 I Charoen Pokphand Foods Public Company Limited I 3 Contents
The CPF Group strives to maintain its leading position in the agro-industrial and food industry and
successfully compete in the international arena. The Company is determined to fulfill its vision of
becoming the Kitchen of the World, placing significant importance on research and development
to improve production efficiency at every step of operations as well as develop products to meet the
satisfaction of customers and consumers. The Company is dedicated to providing food products which
are high in quality, nutritious, hygienic and safe. In addition, the Company is committed to operating its
business with environmental friendliness and continuously contributing back to society as a whole.

Charoen Pokphand Foods Public Company Limited and its subsidiaries or CPF Group is the
leading ago-industrial and food conglomerate in Thailand. Its market capitalization, as of
December 31, 2004 was THB 21,650 million.
The Companys businesses divide into 2 main business lines: (1) the livestock business and
(2) the aquaculture business. Both these business lines comprise fully integrated operations, from sourcing
raw materials for animal feed production, manufacturing and distributing animal feed, breed the animals,
processing meat, to manufacturing further processed food products, mainly chicken, duck, swine, shrimp
and fish. The products in each of these 2 business lines can be classified into 3 main categories, namely
animal feed, animal breeder, and meat and food products.
In 2004, the Companys total sales amounted to THB 91,790 million with sales from operations in
Thailand contributing to 85 % of total sales. Operations in Thailand include fully integrated agro-industrial
business of CPF and its subsidiaries in Thailand as well as foreign subsidiaries involved in importing and
distributing products in different countries. Domestic sales accounted for 82% while export sales
accounted for 18% of sales from this operation in Thailand.
Sales from overseas operations contributed to 15% of total sales. Operations overseas comprise
a fully integrated chicken operation in the Republic of Turkey, the feed production & distribution business
and aquatic farming in the Peoples Republic of China, and the Thai restaurant business in the Peoples
Republic of China.
Besides operating the core business mentioned above, the Company has also invested in an
information technology service provider business and a training service business to provide in-house
service to companies under the CPF Group. In addition, the Company has direct and indirect investments
in the agro-industrial business and other businesses, both locally and overseas.
Please note that The Company or CPF Group herein this Annual Report refers to Charoen Pokphand Foods Public
Company Limited (CPF) and its subsidiaries (companies that CPF has shareholding exceeding 50% of their paid-up
capital).

The Company at a Glance
Financial Highlights in the Past 3 Years
(THB million)
Consolidated Financial Statement 2002 2003 2004
Sales 75,147 83,109 91,790

Operations in Thailand

Livestock Business - Domestic Sales 39,661 43,325 47,117

Livestock Business - Export Sales 9,688 12,419 9,923

Aquaculture Business - Domestic Sales 14,675 16,564 16,943

Aquaculture Business - Export Sales 6,714 4,158 3,697

Overseas Operations

Livestock Business 4,409 4,893 12,089

Aquaculture Business 0 1,750 2,021

Net Profit 2,609 2,242 1,237
Earnings Per Share (THB) 0.67 0.42 0.23
Total Assets 57,282 64,721 72,218
Total Liabilities 30,529 34,217 40,589
Total Interest-bearing Debt 22,246 26,136 30,955
Shareholders Equity 26,753 30,504 31,628
Paid-up Capital 4,850 5,719 5,728
Par Value Per Share (THB) 1 1 1
Book Value Per Share (THB) 5.9 5.7 5.9

Business Structure
Operations in Thailand
Other Investments Core Business
Overseas Operations
Livestock Business
Main Products:
Chicken, Swine, Duck
Feed
Breeder
Meat - Domestic Sales
Meat - Export
Product Distribution
in Other Countries
Aquaculture Business
Main Products:
Shrimp, Fish
Feed
Breeder
Meat - Domestic Sales
Meat - Export
Product Distribution
in Other Countries
Information Technology
Service for Companies
within the Group
Training Service for
Companies within
the Group
Integrated Chicken
Operation in the Republic
of Turkey
in the People s Republic
of China
Thai Restaurant Business
in the People s Republic
of China

Message from the Chairman
In 2004, the Thai economy experienced healthy economic growth, but the agro-industrial and food
sector, especially the chicken and shrimp businesses were negatively affected by uncontrollable
external factors such as the bird fu outbreak announced by the government in January 2004
and the shrimp anti-dumping case fled by the US against Thailand. Due to the above factors,
business operators in the industry were widely affected and unable to achieve previously
established targets. Charoen Pokphand Foods Public Company Limited, one of the agro-
industrial and food business operators in Thailand, then, could not avoid the impact from these
external obstacles.
The Companys Board of Directors greatly recognizes that business diversifcation from having
a wide variety of products and investing in different countries as well as the ability of management
to adjust business strategies to stay abreast of changes in the business environment have built the
Companys readiness and strength to effciently compete in the world market and possessed
competitive advantage in business. The Company is, then ready to stride forward, continuously creating
business success and yielding proper return to shareholders, as the A rating awarded by TRIS Rating
Co., Ltd. attests to the Companys strength and potential.
The Company frmly believes that every crisis provides opportunities and success for those
that are strong and have the capability to develop strategies and business plans to effectively seize the
opportunities. The Board of Directors has informed the President & CEO to focus on this issue,
particulary the implement of branding strategy, which is the main tool to create consumer awareness,
on the high quality of CPFs products. In addition, importance has been given to improving risk
management and control.
Furthermore, the Board of Directors places utmost importance on good corporate governance
to ensure that the Company maintains integrity and sustainable business growth and return to
shareholders. The Board of Directors has also stipulated a policy to continuously develop the Companys
human resources which is a crucial in achieving the Companys vision. No less important, the Company,
as being part of Thai society, always and continuously dedicates to support social contribution activities
of many institutions.
On behalf of the Board of Directors, the Company wishes to express sincere gratitude to
its shareholders for their trust and support throughout the crisis. In addition, the Company wishes to
take this opportunity to thank its management and employees for their efforts and dedication for the
Company s ongoing success.
Mr. Dhanin Chearavanont
Chairman of the Board of Directors
On behalf of the Board of Directors
Message from the President
2004 was a year in which Charoen Pokphand Foods Public Company Limited faced many
unprecedented external obstacles. Two major obstacles which prevented the Company from
achieving its targets in the domestic livestock business were the bird flu outbreak which caused
fear of chicken consumption among consumers and the ban on Thai raw chicken exports
imposed by importing countries which had a severe impact on the Thai broiler industry. In our
aquaculture business the Company faced the anti-dumping lawsuit in which USA charged
Thailand with dumping shrimp into the US market. This resulted in a slowdown in shrimp
farming and a reduction in Thai shrimp exports in the first half of the year.
The Companys solidified its foundation of a wide variety of businesses, by further diversifying
into value-added products by developing ready-to-eat food products and cooked food products, and
by expansion to countries with high potential for business growth. The determination of management
and employees to initiate new strategies for the changing business environment helped the Companys
total revenues to increase 10% from 2003 level to THB 91.79 billion. However, the steep decline in
prices and volume of chicken products compared to 2003 and the increase in marketing and public
relations expenses which were essential in creating consumer confidence during the crisis caused the
Companys net profit to drop 45% from 2003 level to THB 1.237 billion or THB 0.23 per share.
From the crisis in the past 3-4 years, the Company has adopted a clear-sighted strategy to
create opportunities from the crisis to augment the Companys growth. In this regard, the Company
has invested in businesses and joint-ventures with vast potential for growth both domestically and
overseas or businesses that enhance the Companys strengths. In addition, the Company has adopted
branding strategies to create and strengthen consumer product awareness and understanding
towards CPF products. Products under its trademark are associated with high quality, international
standards of hygiene and safety, and chemical free for consumer.
In the past year, the Company experienced great pride when its subsidiaries received the
2004 Outstanding Place of Business Operation Award in the category of Work Safety, Hygiene and
Working Environment from the Department of Labor Protection and Welfare, the Ministry of Labor and
Social Welfare. The Company places equal importance on the working safety of its employees as
producing high quality products.
By swiftly adapting to changes, implementing strategies which strengthen the organization by
controlling costs and improving efficiency, planning and adjusting to the ever-changing business
conditions, and continuously developing the competencies of its employees, the Company is now
ready to strengthen its brand and expand distribution channels, making CPF food products successful
both in Thailand and around the world. This will ultimately lead the Company to being the world
leader in the agro-industrial and food business and achieving its vision of becoming the Kitchen of the
World. In addition, the Company is prepared to surmount all obstacles and generate the highest
benefits for all shareholders on a long-term basis.

Mr. Adirek Sripratak
President & CEO

Business Profle
Charoen Pokphand Foods Public Company Limited is the fagship of Charoen Pokphand Groups
agro-industrial business in Thailand, operating agro-industrial business related to animal farming
and the manufacture of food product from meat in Thailand and overseas. The Companys
business operations are mainly located in Thailand.
The fully integrated operations in Thailand, that operate by CPF and its subsidiaries, including
raw material sourcing for animal feed production, animal feed production and distribution, animal
breeding and farming, meat processing, and the manufacture of ready to eat cooked meat products.
This operation is divided into two main business lines; (1) livestock business - comprising chicken,
duck and swine (2) aquaculture business - comprising shrimp and fsh. The companys products can be
divided into 3 main categories, namely 1) animal feed, 2) animal breeder, 3) meat and foods product.
As of December 31, 2004, CPF had a total of 38 subsidiaries, comprise of 24 companies that
operate fully integrated agro-industrial business in Thailand, 5 companies that operate agro-industrial
business overseas, 5 companies that are the trading of processed meat and ready to eat foods products
overseas, and 4 companies in other businesses. Details are as follows:
Company Abbreviation Business Operation
Direct and
Indirect
Shareholding
Percentage
Subsidiaries in which operate businesses in Thailand and operate business related to operations in Thailand
Livestock Business
1. Bangkok Farm Co., Ltd. BKF Livestock farming & processing plant 99.99%
2. Bangkok Feedmill Co., Ltd. BFM Livestock feedmill and farming 99.99%
3. Bangkok Livestock Processing Co., Ltd. BLP Broiler Integration 99.99%
4. B.P. Feedmill Co., Ltd. BPF Livestock feedmill and farming 99.99%
5. Charoen Pokphand Industry Co., Ltd. CPIN Livestock feedmill and farming 99.99%
6. C.P. Agro-Industry Co., Ltd. CPAI Livestock farming 99.99%
7. C.P. Food Industry Export Co., Ltd. CPEX Food processing plant 99.99%
8. C.P. Food Products Co., Ltd. CP FOOD Food processing plant 99.99%
9. C.P. Merchandising Co., Ltd. CPM Investment and international trading 99.99%
10. International Pet Foods Co., Ltd. IPF Pet Food Production and Distribution 99.99%
11. Rajburi Feedmill Co., Ltd. RBF Livestock feedmill and farming 99.99%
12. Vee Food Products Co., Ltd. VFP Food processing plant and distribution 99.99%
13. Universal Foods and Marketing Co., Ltd. UF&M Wholesale & retail of food products, 99.99%
and fast food outlets
14. Bangkok Agro-Industrial Products Plc. BAP Livestock feedmill and farming 99.90%
15. Charoen Pokphand Northeastern Plc. CPNE Livestock feedmill and farming 99.61%
16. Bangkok Produce Merchandising Plc. BKP Animal feed raw material distribution 99.44%
and broiler integration
17. CPF Europe S.A. CPF EU Importer and distributor of processed meat 99.99%
and food products in EU
18. CPF Tokyo Co., Ltd. CPF TK Importer and distributor of processed meat 99.99%
and food products in Japan
19. Fusion Foods Limited FF Importer and distributor of processed meat 52.00%
and food products in UK
Company Abbreviation Business Operation
Direct and
Indirect
Shareholding
Percentage
20. Chanthaburi Aquaculture Farm Co., Ltd. CAF Shrimp farming 99.99%
21. Pokphand Aquatech Co., Ltd. PAT Aquatic feed production and distribution 99.99%
22. Seafoods Enterprise Co., Ltd. SFE Shrimp processing plant 99.99%
23. Klang Co., Ltd. KLANG Shrimp processing plant 99.99%
24. Trad Prawn Culture Co., Ltd. TRAD Shrimp farming 99.91%
25 Thai Prawn Culture Center Co., Ltd. TPCC Shrimp farming & shrimp processing plant 99.89%
26. Savee Farming Co., Ltd. SAVEE Shrimp farming 99.84%
27. Shrimp Improvement Systems (Thailand) Co., Ltd. SIST Shrimp hatchery business 51.00%
28. Aqua Beauty, Inc. AQB Importer and distribution of seafood products 99.99%
(incorporated in USA) in USA
29. Aqua-Agri Foods International, Inc. AAFI Importer and distribution of seafood products 99.99%
(incorporated in USA) in USA
Other Business
30. CPF IT Center Co., Ltd. CPF IT Information technology service provider 99.99%
31. CPF Training Center Co., Ltd. CPF TN Training center service provider 99.99%
Subsidiaries in which operate businesses overseas
Livestock Business
32. C.P. Food Product (Shanghai) Co., Ltd. CPF SH Thai food restaurant in the Peoples Republic 100.00%
(incorporated in the Peoples Republic of China) of China
33. Charoen Pokphand (USA), Inc. CP USA Broiler integrations 99.95%
(incorporated in USA) (Operation wound up in March 2004)
34. C.P. Standart Gida Sanayi ve Ticaret A.S. CPS Chicken Integration 84.49%
(incorporated in Turkey)
35. C.P. Aquaculture (Beihai) Co., Ltd. CPB Aquatic feed production & distribution 100.00%
(incorporated in the Peoples Republic of China) and aquaculture farming in the Peoples
Republic of China
36. C.P. Aquaculture (Hainan) Co., Ltd. CPH Aquatic feed production & distribution 100.00%
(incorporated in the Peoples Republic of China) and aquaculture farming in the Peoples
Republic of China
Investment Business
37. CPF Investment Limited CPFI Investment 100.00%
(incorporated in British Virgin Island)
38. BKP Holdings Limited BKPH Investment 99.44%
(incorporated in British Virgin Island)
In addition, as of December 31, 2004, the Company invested in affliates and other companies
as follows:
Company Business Operation
Direct and
Indirect
Shareholding
Percentage
Business Operation
Livestock Business
1. Arbor Acres Thailand Co., Ltd. Chicken breeding and distribution 49.99%
2. Ross Breeders Siam Co., Ltd. Chicken breeding and distribution 49.99%
3. Charoen Pokphand Holdings Investment holding, of which invested 100.00% 49.64%
(Malaysia) Sdn. Bhd. in 9 livestock feed production & livestock farming
(incorporated in Malaysia) companies in Malaysia
4. C.P. Vietnam Livestock Co., Ltd. Livestock feed production & farming in Vietnam 40.00%
(incorporated in Vietnam)
5. Charoen Pokphand (India) Private Ltd. Livestock feed production & farming in India 19.00%
(incorporated in India)
1. C.P. Aquaculture (India) Private Ltd. Livestock feed production & farming in India 31.70%
(incorporated in India)
Other Business
1. Lotus CPF (PRC) Investment Co., Ltd. Investment holding in 5 companies (63%, 81%, 90%, 40.00%
(incorporated in British Virgin Island) 90%, and 90%) which operate the Lotus wholesale
stores in the Peoples Republic of China
2. Nava 84 Co., Ltd. Investment holding, of which invested 99.93% in 25.00%
economic crop plantation company in Thailand
3. Allianz C.P. General Insurance Co., Ltd. Insurance business 24.46%
4. C.P. Seven Eleven Plc. Convenience store business in Thailand, under 21.32%
7-Eleven trademark
5. Kinghill Limited Investment holding, of which invested 100.00% in 20.84%
(incorporated in Cayman Island) company that manages shopping center,
Super Brand Mall, in the Peoples Republic of China
6. ACME ECI Investment Co., Ltd. Investment holding 17.95%
(incorporated in Cayman Island)
7. Trillion Brewery Co., Ltd. Investment holding 17.95%
(incorporated in Cayman Island)
8. CPPC Plc. (formerly known as Plastic products manufacturing & distribution 12.48%
Charoen Pokphand Petrochemical Co., Ltd.)
9. Chia Tai (Jilin) Co., Ltd. Investment holding, of which invested 50.00% in 9.99%
(incorporated in Hong Kong) company that operates feedmill business and farming
in the Peoples Republic of China
10. Siam Makro Plc. Wholesale business under Makro trademark 9.13%
11. Vee Rum Choke Co., Ltd. Real estate business 9.00%
12. CP Land Co., Ltd. Real estate business 6.49%
13. Ayudhya Allianz C.P. Life Plc. Insurance business 3.47%
14. True Corporation Plc. Telecommunication business 3.33%
(formerly known as TelacomAsia Corporation Plc.)
1. Scope of Business
The Companys agro-industrial and food operations are fully integrated, with expansion both
vertically and horizontally. Vertical integration refers operations that cover every step of the agro-in-
dustrial and food industry, from sourcing raw materials for animal feed production, manufacturing and
distributing animal feed, breeding animals, processing meat and manufacturing ready to eat cooked
food products. Horizontal integration refers to the range of animal types, which is divided into 2 main
business lines. The livestock business comprises broiler, layer, duck and swine, while the aquaculture
business consists of shrimp and fsh. The products in each business line can be classifed into 3 main
categories, namely 1) animal feed, 2) animal breeder and 3) meat and food products. The Companys
business structure is as follows:
Product Animal feed Animal breeder Live animals, meat and food products
Raw
Feed Animal
Commercial Manufacture Branding
materials
production breeding
animal Processing of cooked and
sourcing farming food products Distribution
Livestock business Broiler
Layer
Swine
Duck
Aquaculture business Shrimp
Fish
Defnition : Broiler refers to the productions that are related to produce chicken meat and food products from chicken meat for consumption.
Layer refers to the productions that are related to produce chicken table eggs and processed food products from eggs for consumption.
2. Sales Structure
2002 2003 2004
THB million % THB million % THB million %
1. Operations in Thailand 70,738 94 76,466 92 77,680 85
1.1 Livestock Business
(1)
49,349 66 55,744 67 57,040 62
Feed 16,958 23 18,059 22 16,295 18
Breeder 2,250 3 2,013 2 2,026 2
Meat - Domestic Sales 19,466 26 21,760 26 27,011 29
Meat - Export Sales 9,688 13 12,419 15 9,923 11
Others 987 1 1,493 2 1,725 2

1.2 Aquaculture Business
(2)
21,389 28 20,722 25 20,640 23
Feed 12,403 17 12,636 15 12,775 14
Breeder 416 1 1,128 1 1,184 1
Meat - Domestic Sales 916 1 1,906 2 2,474 3
Meat - Export Sales 6,714 9 4,158 5 3,697 4
Others 940 1 894 1 510 1

2. Overseas Operations 4,409 6 6,643 8 14,110 15
2.1 Livestock Business
(3)
4,409 6 4,893 6 12,089 13
2.2 Aquaculture Business
(4)
0 0 1,750 2 2,021 2
Total 75,147 100 83,109 100 91,790 100
Note :
(1)
From the operations of CPF, CPNE, BAP, BKP, CPM, BFM, BPF, RBF, BLP, BKF, CP FOOD, CPEX, CPIN, CPAI, VFP,
UF&M, IPF, CPF EU, FF and CPF TK

(2)
From the operations of CPF, CPNE, BAP, BKP, CPM, BFM, BPF, RBF, CPIN, CPAI, VFP, UF&M, SFE, TRAD, SAVEE,
TPCC, KLANG, PAT, CAF, AQB, CPF EU, and CPF TK

(3)
From the operations of CP USA, CPF SH, CPH and CPS

(4)
From the operations of AQB, CPB, and CPH
3. Business Objectives
The Companys vision is to become the Kitchen of the World, producing high quality,
nutritious, hygienic and safe foods for consumers. The Company is dedicated to developing and adding
value to existing products to meet the needs and ever-changing consumption behavior of consumers as
well as creating new products to increase choices for consumers.
The Company is determined to maintain its leading position in the feed business, the
Companys initial business, and at the same time stride towards being the leader in the meat and protein
foods business in both Thailand and countries where the Company has investments. The Company is
also committed to generating reasonable profts from its operations, adhering to the business policy
of conducting business with environmental friendliness, responsibility to society and good corporate
governance, ultimately leading to a strong business with sustainable growth that is able to compete
internationally.
4. Business Operations
1. Operations in Thailand
1.1 Raw materials sourcing for feed production
The Company has a team of purchasing experts especially to source raw materials for both
livestock and aquatic feed production, providing the Company with a competitive edge. The large
purchase volume creates bargaining power for the Company as well as helps the Company to save on
transportation and related costs. In 2004, raw material cost accounted for approximately 40% of the
Companys cost of good sold.
The Companys procurement policy places great emphasis on obtaining high quality raw
materials that meet the requirements of users. In addition, procurement of raw materials produced in the
country, especially around the area where the feedmill is located, is given frst priority in order to support
the countrys farmers. In the case where local procurement is inadequate for production needs, whether
due to insuffcient supply or substandard quality, then raw materials are imported from abroad, with 31%
of the raw material procurement imported from abroad. Furthermore, the Company places signifcant
importance on traceability, ensuring that the source and production processes of the raw materials meet
international quality standards.
As the raw materials are commodity products, their prices fuctuate according to market
demand and supply. Usually, domestic raw material prices are not much different from the price of
imports.
1.2 Livestock business
Operations of the livestock business are fully integrated. The livestock business covers broiler,
layer, swine and duck. The products can be divided into 3 main categories, namely 1) animal feed,
2) animal breeder and 3) meat and food products, with details as follows:
Animal feed
The Company is the leader and pioneer in the manufacture and distribution of livestock feed.
The Company produces livestock feed in the forms of concentrate, powder and pellets for broilers,
layers, swine and duck. The livestock feed is distributed by more than 600 sales representatives
throughout the country. In addition, a portion of the livestock feed is sold directly to large animal farms in
Thailand. Agricultural products such as corn, soybean meal and broken rice are used in the production
of livestock feed under fully computerized formulation and production processes to ensure consistent
quality as required. The Company has a system to randomly check the quality of raw materials and
products. Quality control at different stages of production helps raise confdence in the quality of the
Companys products.
As the leader in the business, the Companys products are well-known among customers.
Therefore, an important marketing strategy is maintaining high product quality as well as continually
providing excellent customer service. The selling prices of livestock feed fuctuate according to the cost
of raw materials used. In the case where selling prices need to be adjusted, approval must be granted
by the Department of Internal Trade, the Ministry of Commerce.
Animal breeder
The Company is the leader in the research and development of natural animal breeds. The
goal is to obtain quality breeds that are disease-free and suitable to the breeding environment in Thai-
land. The Company produces parent stock broiler chicks, parent stock layer chicks, parent stock swine,
broiler chicks, layer chicks, ducklings and baby hogs for distribution to animal farms and domestic sales
representatives.
As the Companys operations are fully integrated, livestock breeding is part of a continuous
production process. Grandparent stock used in livestock breeding are imported from abroad to breed
parent stock which are then raised on the Companys farms. The Companys breeding farms, located
in numerous provinces across the country, practice good farm management and use the evaporative
cooling system. The evaporative cooling system applies advanced technology to raise livestock and
has proven to be an effective method to prevent and control disease, yielding quality products that are
sought after in the market. The prices of livestock breeds depend on domestic demand and supply as
well as the quality of the breeds.
Meat and food products

Products in this category can be further divided according to 2 types of production process,
namely animal farming for commercial purposes and processing and manufacture of cooked food prod-
ucts. Details are as follows:
1) Animal farming for commercial purposes
Products from animal farming for commercial purposes include live chicken, eggs, live ducks
and live swine which are distributed to sales representatives throughout the country. The products are
also distributed in surrounding local areas, to wholesalers and retailers, or to the Companys processing
plants or other processing plants in Thailand. The selling prices fuctuate according to domestic demand
and supply.
Research and development is applied to continuously improve the farming process, making
it suitable to the conditions in Thailand. The Companys farm management system also has an
effective system to control and prevent diseases. This results in faster growth in animals, higher yields
and minimizing costs.
In addition, the Company has offces across the country, which acts as centers providing
technical information to farmers on how to properly raise animals to obtain fast growth as well as
assistance with marketing and distribution.
The Company has a support program for the farming of swine and broiler. The Company
selects farmers who have their own farm and farming equipment. Selected farmers receive support in
the areas of animal breeds, animal feed, medication and farming knowledge from the Company. The
company then undertakes to purchase all yield which meets the CPF standards. Most of the farmers
participating in this program also use the evaporative cooling system.
2) Processing and manufacture of cooked food products
In meat processing, broilers, ducks and swine from the Companys farms are brought to
processing plants to be cut into meat parts according to customer specifcations. The meat parts are
then packaged, frozen and distributed as chilled and frozen meat products to wholesalers, domestic
retailers and importers in various countries. The selling prices fuctuate according to demand and supply
in the country and the world market. The selling prices are also determined by agreement if the products
have been manufactured according to customer specifcations.
Furthermore, the Company adds more value to processed meat products to create cooked
food products by favoring and cooking through the process of boiling, steaming, frying, baking and
grilling according to customer specifcations. These products are then packaged, frozen and refriger-
ated, ready for distribution to wholesalers and retailers, fast food restaurants and modern trade outlets
such as discount stores and supermarkets. Export products are distributed through importers in various
countries, mainly countries in the European Union, Japan and Asian countries.
The selling prices of cooked food products distributed in Thailand and exported, for example
frozen karaage chicken, frozen steamed chicken breast, meatballs and sausages, are determined by
agreement with customers during the sale process.
1.3 Aquaculture business
Operations of the aquaculture business are fully integrated. The aquaculture business includes
mainly shrimp and some fsh. The products can be classifed into 3 main categories, namely 1) animal
feed, 2) animal breeder and 3) meat and food products, with details as follow:
Animal feed
The Company is the leader and pioneer in the production and distribution of aquatic feed with
the main product being shrimp feed. Aquatic feed is produced in the forms of concentrate, powder and
pellets and distributed through sales representatives that are located in shrimp farming areas throughout
the country. A portion of the feed is distributed directly to large shrimp farms in Thailand. Agricultural
products such as soybean meal, fsh meal and wheat four are used in the production of aquatic feed
under fully computerized formulation and production processes to ensure consistent quality as required.
The Company has a system to randomly check the quality of raw materials and products. Quality control
at different stages of production helps raise confdence in the quality of the Companys products and
ensure that the aquatic feed is suitable for shrimp and fsh farming in Thailand, resulting in good feed
conversion ratio. Farmers using the Companys aquatic feed produce higher yields than the industry
average.
As the leader in the business, the Companys products are well-recognized among customers.
Therefore, an important marketing strategy is maintaining high product quality as well as continually
providing excellent customer service. Customer service is enhanced by providing technical knowledge
to sales representatives as well as directly to the farmers by organizing technical seminars, establishing
centers to provide laboratory services and consultations to farmers, and distributing printed materials
on news related to animal breeding. This will enable the aquatic farming industry to sustainability grow.
The selling prices of aquatic feed fuctuate according to the cost of the raw materials used. In the case
where selling prices need to be adjusted, approval must be granted by the Department of Internal Trade,
the Ministry of Commerce.
Animal breeder
Aquatic breeds come from culture farms and hatcheries, with details as follows:
Shrimp culture farms and hatcheries
Following the Companys policy of supporting sustained growth and development in the shrimp
industry, the Company has developed quality shrimp fry to distribute to farmers, which will increase
their opportunity to successfully farm shrimp. In 2004, the Company entered into a joint venture with an
American company with shrimp breeding expertise to develop shrimp fry that are suitable to the farming
conditions in Thailand.
The Companys culture farms and hatcheries are located in the shrimp farming areas in the
eastern and southern regions of Thailand. The culture farms and hatcheries practice good farm manage-
ment, apply advanced technology to raise shrimp and fsh and has an effective system to prevent and
control disease, yielding quality products that are sought after in the market. The prices of shrimp fry
depend on domestic demand and supply as well as the quality of the breeds.
Fish culture farms and hatcheries
The Company continually expends research and development resources to develop and
enhance products that have strong commercial appeal. CPF developed the Tabtim fsh fry, which was
developed from Tilapia fsh. Special characteristics of Tabtim fsh, including high meat content, good
taste that is free of mud odor and high nutritional value, have made it a particularly successful domestic
product that is relatively easy to farm, provides a reliable source of income to farmers, and is commer-
cially viable.
The Companys fsh culture farms and hatcheries, located in the central and northern regions of
Thailand, have good farm management, incorporate modern technology and have an effective system
to prevent and control disease, yielding quality products that are sought after in the market. The prices
of fsh fry depend on domestic demand and supply as well as the quality of the breeds.
Meat and food products

Products in this category can be further divided according to 2 types of production process,
namely shrimp and fsh farming for commercial purposes and processing and manufacture of cooked
food products. Details are as follows:
1) Farming for commercial purposes
The Company realizes the importance of traceability which has prompted the Company to
expand its shrimp farming business, resulting in fully integrated operations that produce high quality
shrimp for the Companys processing plants as well as other processing plants in Thailand.
In the management of the Companys shrimp farms, research and development and techno-
logy are applied to fnd ways to prevent the outbreak of disease in shrimp and farming methods, which
are friendly to the environment and do not cause residue build-up. The Company promotes Probiotic
Farming which avoids the use of drugs and chemicals.
2) Processing and manufacture of cooked food products
Products derived from processing are one of the important products in the meat and food
products category of the aquaculture business. The main products are processed fresh shrimp and
value-added processed shrimp, most of which are produced for export as chilled and frozen products
and distributed through importers in various countries. The selling prices fuctuate according to demand
and supply in the country and world market. The selling prices are also determined by agreement if the
products have been manufactured according to customer specifcations.
Furthermore, the Company has added value to processed shrimp, producing ready to eat
cooked food products. Research and development in this area focuses on processing fresh shrimp
into semi-cooked and cooked food products by favoring and cooking through the process of boiling,
steaming, frying, baking and grilling according to the specifcations of customers. These products are
then frozen and refrigerated, ready for distribution to wholesalers and retailers and through modern
retail outlets such as hypermarkets and supermarkets. Export products are distributed through import-
ers in various countries, mainly the USA, Japan and countries in the European Union. Besides applying
advanced technology to ensure production meets international standards, the Company also places
great importance on product safety and quality. The selling prices of products under this category are
determined by agreement with customers upon each sale.
1.4 Businesses Related to Domestic Operations
The Company has established sales representative offces and set up distribution arms in many
countries including the USA, Japan, Belgium and the United Kingdom, so as to enable proximity to the
market and customers.

2. Overseas Operations are divided into 2 main businesses,
namely the livestock business and the aquaculture business.
2.1 Livestock business
Through its subsidiaries, CPF has invested in a number of businesses as follows:
1) The integrated chicken and animal feed business in the Republic of Turkey - CPF indirectly
invested through its subsidiary in C.P. Standard Gida Sanayi ve Ticaret A.S. (CPS). The settlement of
acquisition was separated into 2 times. The frst time of 83.27% of CPSs paid-up capital was made in
January 2004. The second time of 1.22% was made in May 2004, resulting in total of 84.49% sharehold-
ing in CPS. (The factor that caused twice settlement was the second lot shares had the share transfer
restrictions imposed by a government entity of the Republic of Turkey, which allowed the transfer after
April 2004.)
CPS was established on April 21, 1988 and is presently one of the leading companies in the
broiler business in the Republic of Turkey. Its operations are spread throughout the country to minimize
transportation costs. CPS manufactures and distributes many types of animal feed, most of which are
chicken and cattle feed. In the chicken business, CPS started with an integrated broiler business and
expanded into the egg business in 2004.
2) Thai restaurant - CPF invested in the Thai restaurant business in the Peoples Republic of
China through C.P. Food Product (Shanghai) Co., Ltd, which is an indirectly 100%-owned subsidiary
of CPF. The objective of this business is to introduce Thai fast foods restaurant that applying the
production which yields Thai foods of standard taste. Presently, there are 2 Thai restaurants under the
Thai Thai trademark in the Peoples Republic of China.
2.2 Aquaculture business
CPF invested in the Peoples Republic of China (PRC) through C.P. Aquaculture (Beihai) Co.,
Ltd. and C.P. Aquaculture (Hainan) Co., Ltd. to manufacture and distribute animal feed and operate an
aquatic culture farm in the PRC.
5. Effects on the Environment
The effects that the Companys operations have on the environment are as follows:
1 Feedmills and meat processing plants
Dust and odor may emanate from animal feed production causing possible disturbance to
people living in surrounding areas. Realizing this, the Company has installed dust flters and deodorizers
to prevent dust and odor emitted from production processes from spreading outside of the production
area.
Water that is used in production processes at the feed mills and meat processing plants may
cause contamination if released into public water sources. Therefore, the Company has constructed
waste water treatment plants to treat used water before release into public water sources.
2 Animal farms
Animal farms may have odor from animal feces. Therefore, the Companys animal farms are
situated in the provinces outside of the vicinity of communities and far from densely populated animal
raising areas. The evaporative cooling system is used on the Companys farms. Rice husks, which are
spread on the foor, not only promote the animals growth, but also help combat odor. In addition, the
rice husks can easily be removed and used as fertilizer to improve soil conditions. In the rare instances of
chicken mortality, the Company has a system to hygienically dispose of chicken carcasses. In addition,
golden teak trees have been planted between the chicken houses and other buildings on the farms to
help conserve natural resources while creating an appealing environment.
Furthermore, every stage of the Companys production process is operated under strict quality
control and continuous improvements are made to meet internationally recognized standards of produc-
tion, namely ISO, HACCP (Hazard Analysis and Critical Control Point) and GMP (Good Manufacturing
Practices).
The Companys factories in Thailand, operating the livestock business and the aquaculture
business, comply with the Ministerial Regulation No. 2 (B.E. 2535) issued under the Factory Acts (B.E.
2535) by the Department of Industrial Works, the Ministry of Industry, which states that factories must
adopt the standards and methods of controlling the discharge of wastes, pollutants or anything that
affects the environment as a result of the engagement in a factory business. In the past 3 years, the
Companys factories have adopted strict measures to prevent any environmental impact from its
operations, in compliance with all relevant environmental laws and regulations. In addition, the Company
has applied ISO 14001 which concerns environmental management at its factories.
6. Energy Conservation
The Company is dedicated through research and development to fnd ways to reduce costs
and promotes energy conservation in the production processes in all its business units. The desired goal
is to reduce energy consumption without adversely affecting business operations.
In animal farms, especially swine farms, the Company has implemented a system to generate
biogas for use at the farms through the fermentation of animal feces to produce methane for electricity
generation, thus providing a substitute to purchasing electricity. In meat processing plants, the Com-
pany has studied Co-Generation projects, producing natural gas as fuel for conversion into electricity
to be used internally. Besides helping to conserve energy, both these projects help eliminate pollutants
and conserve the environment.

7. Research and Development
Continuous research and development stand behind the Companys success as the leader in
the agro-industrial and food industry for over 20 years. The Companys research teams comprise high
caliber professionals who are highly regarded in Thailands agriculture industry. They cooperate with
other outside parties, including research institutes both in Thailand and overseas, specialists, customers
and various public agencies, with the mutual objective of sustaining the industry, while having business
adhering to environmental friendliness.
Aside from developments for the sustainability of the overall industry, the Company emphasizes
product development to satisfy consumer requirements. Manufacturing food products to meet the dif-
fering regulations and standards of each customer throughout the world, together with the Companys
ability to develop products and improve its animal breeding process to meet international standards,
have resulted in customers being confdent that the Companys products are of high quality, nutritious
and safe for consumption. These are important factors for maintaining competitiveness in todays world
of free trade.
R&D in animal breeds
The Companys continuous research to improve animal breeds has proven to be a strength in
operating an integrated agriculture business and plays and important part in putting the Company on
the world stage. The Companys emphasis is on improving and selecting breeds through natural means
to obtain animal breeds that are suitable to the farming environment and in line with consumer needs.
Research in this area also leads to effciencies in breeding and good feed conversion rates, which en-
hance proftability.
R&D in animal feed production
The Company has a team of researchers who study and develop animal feed production. They
strive to produce quality animal feed with a good feed conversion rate and ultimately reduce production
costs. Presently, the Company has brought in advanced technology, such as computerized control of
the integrated production process, as well as an inventory system for raw materials and a production
method that helps to reduce loss and damage.
R&D in animal farming
The Company has adopted advanced technology and modern farm management systems for
implementation at every step of the farming process, including computerized production controls. Some
examples of the Companys achievements in animal farming include the following:
Livestock farms using the Evaporative Cooling System - This system provides a
hygienic environment for raising animals and keeps the farms cool. The system is enhanced with the use
of rice husks on the foor to reduce odor, an automated feeding system, and the use of a control system
to help reduce pollutants which could arise from farming.
Probiotic Shrimp Farming - Probiotic farming yields chemical-free shrimp which are safe
for consumption by employing natural products, namely the super biotic bacteria instead of chemicals to
combat bad bacteria, which are the cause of various diseases in shrimp. The super biotic bacteria also
prevent harmful viruses from causing disease in shrimp. Probiotic farming incorporates effcient pond
management, which helps to produce healthy shrimp with high survival rate and good immunity against
disease. Production costs are lowered, while yields are higher than through the use of chemicals.
Pork free of beta-agronist and antibiotics - The Company raises pigs without the use of
beta-agronist and antibiotics, so that consumers are able to enjoy top quality pork
R&D in food production
The Company places great importance on research and development to add value to the
Companys meat products as well as create new recipes with meat products to please consumer tastes
around the world. The research team has worked closely with customers to develop a wide variety of
ready-to-eat food products in line with customers requirements. In 2004, the Company established a
food product research and development center with a model factory employing many cooking experts.
Through development and experimentation, the company has successfully developed a wide array of
food products to serve the ever-changing preferences of consumers throughout the world.

8. Production Standards
The Company attaches utmost importance to product quality that meets global standards, is
tasty and hygienic and most important is safe for consumption. The Company has a system to randomly
check the quality of raw materials and products at every stage of the production process. Control sys-
tems at every stage of production will help inform management of productivity in each stage and enable
the Company to trace back to the raw materials used in production. Internationally recognized produc-
tion standards awarded to the Company is another factor that guarantees the quality of the Companys
products and management systems.
The Company is committed to continuous improvements in its production process to meet
internationally recognized standards of production. The Companys production process has been
certifed with the Good Manufacturing Practices (GMP) which is an award for quality approach to
manufacturing, Hazard Analysis and Critical Control Point (HACCP) which is a system that focuses on
preventing food contamination, EST/TH, ISO 9002 which involves operating and production manage-
ment systems that should be traceable with documentation, the British Retail Consortium Standard
which is a standard for the food industry covering process control and personnel management, OHSAS
18000 which is an international occupational health and safety management system specifcation, ISO
14001 which concerns environmental management and ISO 18001 which involves the safety and welfare
of employees.
In addition, the Company is the frst company outside the EU to achieve the Animal Welfare
Standard in chicken production for export which is the most stringent of all current industry standards.
Operators are required to consider the chickens happiness for the duration of the farming process.
The chickens have to be free from hunger and thirst (by ready access to fresh water and food), free from
discomfort (by providing an appropriate, spacious environment), free from pain, injury and disease (by
prevention and rapid diagnosis and careful handling), free to express normal behavior (by providing suf-
fcient space, proper facilities and company of the animals own kind) and free from fear and distress (by
ensuring conditions and care, which avoid mental suffering, such as before entering slaughterhouses).
Aside from focusing on achieving internationally recognized standards of production, the
Company places great importance on the safe working conditions of its employees. Emphasis is given
to accident prevention and reduction in the work place, pollution prevention and control at the plants
as well as maintenance of a safe and hygienic working environment that does not cause any damage
or harm to the surrounding communities. In 2004, 16 companies under the CPF group received the
Outstanding Place of Business Operation Award in the category of Work Safety, Hygiene and Working
Environment from the Department of Labour Protection and Welfare, the Ministry of Labour and Social
Welfare. This award is given to business operators who are dedicated to and continuously practice
safety management at the work place.
9. Tax Privileges
The Company operates businesses which are promoted by the Board of Investment (BOI). The
signifcant benefts are outlined as follows:
Company / Business Major Privileges Commencing Year
- Expiry Year
Charoen Pokphand Foods Plc.
Shrimp Feedmill, Baan Phru * 50% Income Tax Exemption 2003-2008
Broiler Farm 2, Saraburi * Income Tax Exemption 2001-2008
Shrimp Hatchery, J.R.2 * Income Tax Exemption 2002-2010
Shrimp Hatchery, Tha Bon * Income Tax Exemption 2002-2010
Aquaculture Feedmill, Mahachai 2 * Income Tax Exemption 2004-2012
Grandparent Stock Chicken Breeder Farm, Prajinburi * Income Tax Exemption 2003-2011
Shrimp Feedmill, Ranod * Income Tax Exemption 2002-2008

* 50% Income Tax Exemption 2008-2013
Broiler Farm 3, Saraburi * Income Tax Exemption 2003-2011
Integrated Chicken Business, Nakhon Ratchasima * Income Tax Exemption 2003-2011
Shrimp Hatchery, J.R.4 * Income Tax Exemption 2004-2012
Shrimp Hatchery, Pratew * Income Tax Exemption 2004-2012

Charoen Pokphand Northeastern Plc.

Chicken Breeder Farm, Petchaboon * Income Tax Exemption 1998-2006

Chicken Breeder Farm, Prajinburi * Income Tax Exemption 2003-2011

Bangkok Agro-Industrial Plc.
Duck Farm, Prajinburi * Income Tax Exemption 2002-2010
Swine Farm, Karnchanaburi * Income Tax Exemption 2004-2012
Duck Breeder Farm, Saraburi * Income Tax Exemption 2003-2011
Duck Farm, Prajinburi * Income Tax Exemption 2003-2011

Bangkok Produce Merchandising Plc.
Animal Feedmill, Tha Rua * Income Tax Exemption 2001-2009
Food Product Plant 2, Saraburi * Income Tax Exemption 2002-2010
Further Processing Plant, Saraburi * Income Tax Exemption 2004-2012

Bangkok Livestock Processing Co., Ltd.
Broiler Farm, Prajinburi * Income Tax Exemption 2002-2010
Broiler Farm, Prajinburi * Income Tax Exemption 2003-2011
Broiler Farm, Chachoengsao * Income Tax Exemption 2003-2011

Pokphand Aquatech Co., Ltd.
Aquatic Feedmill, Baan Buang * Income Tax Exemption 2002-2010

Thai Prawn Culture Center Co., Ltd.
Aquaculture Processing Plant, Ranod * Income Tax Exemption 1996-2004

International Pet Foods Co., Ltd.
Pet Food Plant, Saraburi * Income Tax Exemption 2004-2012

10. Industry Outlook
10.1 Thailands Broiler Industry
(Source - Thai Broiler Processing Exporters Association / For further information, please refer to
www.thaichickenandduck.com)
Production In 2004, Thailands ranking in terms of broiler production fell to No. 8 from No. 7 in
2003, while the USA ranked No. 1 as the worlds broiler producer.
Market structure In 2005, 68% of Thailands production was for domestic consumption while
32% was for export. There are 25 slaughterhouses with qualifed export standards and 66 processing
plants with qualifed export standards.
Exports In 2004, Thailand was the worlds No. 5 chicken exporter, exporting 210,000 tons of
chicken worth THB 23.7 billion. Thailands major export markets include Japan, which accounts for 52%
of exports, the EU 41% and other countries 7%.
Major competitors Brazil, the USA and the Peoples Republic of China
Major obstacles
1) Due to continuous news coverage of the bird fu outbreak, consumers feared consuming
chicken resulting in a decline in domestic consumption and demand, which impacted
domestic prices and volumes negatively.
2) Countries that previously imported frozen fresh chicken from Thailand imposed bans on
Thai chicken imports after the bird fu outbreak in Thailand.
3) Prices of raw materials for animal feed production increased, resulting in higher chicken
production costs in Thailand.
Export target in 2005; 300,000 tons or approximately THB 34 billion.
Thailands Broiler Industry 2004-2005
Item 2004 2005
(Estimated)
Live chicken (million chicken) 700 720
Chicken meat production (thousand tons) 928 950
Exports (thousand tons) 219 300
Consumption (thousand tons) 509 650
Consumption per capita (kilograms) 8.0 10.1
Thailands Chicken Exports 2003-2004
Product 2003 2004 Change
Tons THB million Tons THB million Tons THB million
Raw chicken 388,913 27,224 26,137 1,725 -93 -93
Cooked chicken 157,074 19,477 193,814 23,258 +23 +19
Total 545,987 46,701 219,951 24,983 -60 -47
10.2 Thailands Swine Industry 2004-2005
(Source - the Swine Producers and Processors for Exporting Association / For further information, please refer to
www.thaichickenandduck.com)
Production In 2004, Thailand produced 754,730 tons of pork, while the Republic of China was
the No. 1 world producer, followed by the EU.
20 I Annual Report 2004 I Charoen Pokphand Foods Public Company Limited Contents
Market structure Domestic consumption accounts for 97% of production, imports 1% and
exports 2%. There are 5 slaughterhouses with qualifed export standards and 24 processing plants with
qualifed export standards.
Exports In 2004, Thailand exported 10,981 tons of pork, or approximately THB 1.67 billion.
Thailands major export markets include Hong Kong, which accounts for 52% of exports, Japan 47%
and other countries 1%.
Export products Raw pork accounts for 52% of Thailands pork exports, while processed pork
accounts for the remaining 48%.
Major competitors The Peoples Republic of China, the USA and Australia
Export target in 2005 Exports are expected to rise 14% from 2004 to 12,500 tons or approxi-
mately THB 1.896 billion.
Thailands Swine Industry 2004-2005
Item 2004 2005
(Estimated)
Live swine (million swine) 9.9 12.0
Pork production (thousand tons) 754.7 908.4
Exports (thousand tons) 10.9 12.5
Consumption (thousand tons) 743.7 895.9
Consumption per capita (kilograms) 11.57 13.91
10.3 Thailands Shrimp Industry
During the beginning of 2004, Thailand was awaiting the results of the anti-dumping duty on
shrimp exports to be imposed by USA, a major importer of Thai shrimp. As farmers and exporters were
uncertain about the impact of the anti-dumping lawsuit, there was a slowdown in shrimp farming.
From the preliminary determinations on the anti-dumping case that were released by USA in
mid-2004, Thailands shrimp exports to USA would be subject to an anti-dumping duty of approximately
6%. The announcement, which clarifed the situation in the shrimp industry, resulted in substantial
increase in shrimp farming and Thailands shrimp exports in the 2nd half 2004.
Thai shrimp exports in 2005 are expected to be higher than that of 2004 due to clarity on
anti-dumping duty to be imposed on US exports. However, if the EU reinstates GSP privileges for
Thailand and USA postpones imposing anti-dumping duty on Thai shrimp exports, the Thai shrimp
industry expects exports will increase by more than 30% from 2004.

Thailands Shrimp Exports 2003-2004
Country 2003 2004 Change
Tons THB million Tons THB million Tons THB million
Asia 70,840 22,910 74,477 22,598 5.13 -1.36
China 2,794 693 2,844 640 1.79 -7.65
Japan 45,845 16,692 46,264 16,261 0.91 -2.58
Others 22,201 5,525 25,369 5,697 14.27 3.11

USA 132,394 40,577 131,691 35,794 -0.53 -11.79
EU 4,874 1,278 8,001 2,130 64.16 66.67
Australia 7,866 1,970 8,604 2,075 5.33
Others 18,303 5,112 18,068 4,692 -1.28 -8.22
Total 234,277 71,847 240,841 67,289 2.80 -6.34
Source : Customs Department, the Ministry of Commerce
Annual Report 2004 I Charoen Pokphand Foods Public Company Limited I 21 Contents
Risk Factors
Investors in CPFs shares and persons with vested interests in the Company should carefully
consider the risk factors that may affect the Company. These risk factors may affect the
operations and/or the financial status of the Company leading to different consequences than
those occurring under normal circumstances and/or may affect the Companys ability to achieve
its objectives and goals.
Besides the risk factors mentioned in this report, there may be other risk factors unknown to
the Company at this time or risk factors that the Company deems as having no material impact on the
Companys operations. Major risk factors directly related and known to the Company that may affect
the Company include the following:

1. Disease outbreaks in farms
In animal farming, there is the possibility of disease outbreaks caused from both external
factors which are uncontrollable and internal factors. To minimize the risk, operators should follow the
best practices of farm management and have measures to monitor for ensuring the procedures are
strictly followed. Eventhough the operators shall reduce direct impacts, they may face unexpected
indirect impacts which in the first place affect the industry and then cause domino effects to the ability
of enterprises to generate revenue and profit at the end.
For example, the bird flu outbreak in Thailand in 2004, especially the first outbreak in January
2004, resulted in importing countries banning the import of chilled and frozen fresh chicken meat from
every producer in Thailand. The domestic consumption of chicken, eggs and other related chicken
products also declined, since consumers were not confident whether those products were safety for
consumed. This incident also affected the Companys sales of poultry products in 2004, dropping 12%
from 2003.
Risk management The Company has established rules and regulations for its employees to
strictly follow and provide training on disease outbreak prevention. The Company has set up a system
to prevent disease outbreaks, a system for good hygiene, an internal control system monitoring quality
at every step of animal farming as well as strict conditions imposed on visitors to the Companys
operations. In addition, the Company has invested in research and development of animal farming
under the closed system and increased use of technology in animal farming to reduce animal exposure
to carriers of various diseases. Furthermore, the Company has employed veterinarians to study various
diseases with the objective of laying down foundations to prevent disease outbreaks in the Companys
farms.
With regard to the bird flu outbreak in Thailand in 2004, the Company managed risks to
lessen the impact on the Companys operations by enforcing stricter disease prevention standards at
the Companys farms and educating contract farmers on disease prevention. In addition, the company
expanded capacity for the production of cooked chicken products to cater to both local and
international markets, decreasing reliance on raw chicken sales and exports. Consequent to outbreak,
consumers placed greater importance on carefully choosing safe and hygienic products for
consumption. Through public relations via different media and marketing strategies, the Company
communicated and emphasized to consumers product quality and safety under the CPF trademark.

2. Volatility of raw material prices
The Company is engaged in integrated agribusiness with the main production cost being raw
materials used in animal feed production, such as corn, fish meal and soybean meal, accounting for
approximately 40 percent of the Companys cost of sales. The prices of these raw materials fluctuate
each year depending on the demand and supply for each type of raw material in the world market.
Therefore, if the prices of raw materials increase and the Company is unable to increase the prices of
animal feed or meat products to compensate for the rise in production costs, the increase in raw
material prices may cause the Companys profits to decline.
Risk management The Company gives much consideration to this risk and has a team of
raw material sourcing experts to closely follow price trends. In addition, the Company has large silos
with efficient management systems to stock up on raw materials for sufficient use when raw material
prices are forecast to rise in the future. This has enabled the Company to manage costs with minimum
fluctuations. However, this does not guarantee that the cost of raw materials of the Company at one
point of time shall below the market price at that time as it is not possible to accurately forecast when
entering into raw material purchase contracts. Therefore, the Company has studied, researched and
developed methods to use raw materials efficiently and reduce raw material loss during production,
providing another important means to effective cost management.

3. Volatility of meat prices
Sales from the Companys meat products, which comprise live animals, fresh meat, and
chilled and frozen fresh meat which are both sold locally and exported overseas, account for 29% of
total sales in 2004. Meat prices fluctuate according to demand and supply in the market. Therefore, if
meat prices decline due to oversupply in the market and/or decrease of consumer confidence, this
may cause the Companys profits to decline.
Risk management The Company has adopted a strategy to manage the risk from the
volatility of meat prices by diversifying into different product categories such as chicken, eggs, swine,
shrimp, fish and duck. Product diversification will lower the impact from the price decline of a
particular product. For instance, the bird flu outbreak in Thailand in 2004 brought about lower
consumer confidence in chicken consumption. Consequently, consumers switched to consuming
pork, causing the price of pork to rise substantially. Increased profits from the swine business helped
to partially offset the Companys losses from the chicken business.
In addition, the Company has adjusted its production and marketing plans to produce and
distribute products which are less susceptible to price volatility and/or products whose prices can be
adjusted to reflect production costs, such as value-added meat products (eggs boiled in herbs, grilled
chicken, sauced duck, grilled duck) and cooked meat products for export (frozen boiled chicken,
frozen roasted chicken, frozen karake chicken, frozen boiled shrimp, frozen breaded shrimp). The
Company has also developed ready meals such as chilled rice with spicy-fried meat with basil and
chilled spicy shrimp soup which tend to be less price sensitive.

4. Reduced consumer and customer confidence
Consumer and customer confidence in a particular product may decline due to disease
outbreak in the farming of a particular animal, the discovery of chemical residue or contamination in a
product that is harmful to consumers, substandard quality products or untimely delivery of products.
This may cause the Companys sales of the particular product to fall.
Risk management The Company has built brand awareness and recognition with marketing
strategies and public relations through various channels to create consumer and customer confidence
in the quality of the Companys products as well as awareness of the attention paid to production
processes which have strict quality control at every stage of production.

5. Trade barriers in the world market
The Company exports meat products to many countries worldwide. While tariff barriers are
playing a lesser role under the global policy of free trade, still, new forms of barriers have been devised
to undermine the opportunity for the import and export of meat products. This may cause the
Companys meat export sales to decline or indirectly affect other areas of the Companys revenue. For
example, during the second half of 2002, countries in the European Union enforced strict testing of
residue in meat imports. Many chicken exporters that failed to pass the test sent their products back
to sell in Thailand. As a result, domestic prices of chicken meat dropped dramatically due to excess
supply at that time. From this incident, the Company was directly affected by the stringent testing
measures, experiencing delays in export process for each shipment. Furthermore, the Company was
indirectly affected by the fall in domestic prices of chicken meat, which caused profits from domestic
sales of chicken meat to decline.
Risk management Although it is not possible to predict when this type of risk will occur, the
Company has always placed great emphasis on research and development on all aspects of
production to achieve world-class production standards and develop high quality food products to
satisfy consumers, gaining customer acceptance worldwide. Moreover, the Company continues to
place great importance on studying the developments in international trade rules and regulations. With
updated information on this matter, the Company can develop its business strategy in line with the
new rules and regulations.
In addition, the Company continues to expanded its export customer base to diversify risk
and has established sales representative offices in numerous countries throughout the world to be
closer to country-specific news and information. The Company has also increased investments in
various countries to minimize the impact of trade barriers on its operations.

6. Foreign exchange risk
The Company imports raw materials for production which account for 11% of cost of goods
sold. Therefore, if the Baht depreciates against the currency used to purchase the raw material, this
may cause the Companys animal feed production costs and animal farming cost to rise. In addition,
the Company earns revenue from exports which accounts for approximately 15% of total sales in
2004. Therefore, if the Baht appreciates against the currency used in the sale, this may cause revenue
to decline when converted into Thai Baht. If both these cases occur, this may cause the Companys
profits to decline.
Risk management The Company has a policy to enter into forward exchange contracts to
protect against currency fluctuations. In addition, this allows the Company to know costs and selling
prices in definite Baht terms. For some product types that the power for determining prices belongs to
a seller, an accuracy of costing shall result in an effiiency of pricing, guaranteeing that the company
can manage foreign exchange at better rates than the market rate since it is not possible to accurately
forecast foreign exchange rates when entering into the contract.

7. Risk from investment in other countries
The Company has investments and joint-ventures in agro-industrial businesses in many
foreign countries that have potential for business expansion, namely the Republic of Turkey, Malaysia,
India, the Peoples Republic of China, the United Kingdom and Vietnam. Each country has risks which
may arise from changes in political, regulatory or economic conditions. Any changes, if significant, may
affect the business operations in these countries as well as the revenue and profit earned from these
overseas businesses.
Risk management The Company recognizes this risk and has established a policy and
system to closely monitor and control the performance of overseas operations. Furthermore, the
Company posts experienced managers, including controllers, to oversee these foreign operations and
present the performance of their operations in Thailand at least once every quarter in Thailand.

8. Risk from dependency on specialists
The Companys business relies on knowledgeable employees and specialists who have
accumulated knowledge and real working experience. Therefore, if the Company loses these
experienced personnel, this may affect the Companys operating performance.
Risk management The Company has adopted measures to reduce the risk of losing
valuable personnel by establishing a company to provide continuous business training and knowledge
to management and employees; a successor program; and a program to attract long-term
employment with the Company, such as providing opportunities for advancement to management
positions as the company is continually expanding.

9. Risk from management of information technology
The company has implemented information technology system in many areas of its
operations, such as the production control system, accounting system and human resource
management system. In addition, the Company has adopted information technology system in
everyday operations to improve work efficiency as well as reduce time and costs in communication
and sending documents. Therefore, if there is any significant failure in the system, such as the spread
of a computer virus in the system causing loss of data, this may affect the Companys operations and
its ability to achieve its objectives.
Risk management The Company has a subsidiary which especially provides information
technology services. The subsidiary studies, develops and oversees the Companys IT system,
ensuring efficiency and suitability to the Companys business operations. Employees are continuously
trained to effectively use the IT system. In addition, there is a sufficient and effective back-up system.
The Company has also restricted access to send and retrieve certain information which may harm or
damage the system.
Management Discussion
and Analysis on Results and Financial Status
1. Summary of Consolidated Financial Statements and Key
Financial Ratios
a) CPFs Consolidated Balance Sheet as of 31 December
Unit: THB million
2002 2003 2004
Current assets 25,085 29,607 30,035
Non-current assets 32,197 35,114 42,183
Total assets 57,282 64,721 72,218
Current liabilities 16,625 25,375 24,039
Non-current liabilities 13,904 8,842 16,550
Total liabilities 30,529 34,217 40,589
Shareholders equity 26,753 30,504 31,629
b) CPFs Consolidated Income Statement for the years ended 31 December
Unit: THB million
2002 2003 2004
Net sales 75,147 83,109 91,790
Equity in net proft of associated 526 511 721
Other income 1,027 1,646 1,029
Total income 76,700 85,266 93,540
Cost of sales 65,577 73,534 81,388
Selling and administration expenses`6,332 7,719 9,161
Equity in net loss of associated 22 244 3
Loss from impairment of assets - 938 -
Others 64 35 376
Total expenses 71,995 82,470 90,928
Proft before interest and income tax 4,705 2,796 2,612
Interest expenses 1,223 1,004 910
Income tax 909 (464) 436
Gain on net monetary position - - (15)
Net proft after income tax 2,573 2,256 1,281
Add (proft) loss minority interests 36 (14) (45)
Net proft from normal operations 2,609 2,242 1,236
Extraordinary items
Loss arising from Tsunami - net of income tax - - (52)
Insurance recovery - net of income tax - - 53
Net proft 2,609 2,242 1,236
c) Key Financial Ratios
2002 2003 2004
Liquidity Ratios
Current ratio (times) 1.51 1.17 1.25
Quick ratio (times) 0.61 0.37 0.45
Cash fow liquidity ratio (times) 0.26 (0.01) 0.18
Accounts receivable turnover (times) 9.36 10.15 10.61
Collection period (days) 38 35 34
Inventory turnover (times) 14.56 18.76 17.96
Inventory turnover (days) 25 19 20
Accounts payable turnover (times) 20.14 17.70 17.82
Payables period (days) 18 20 20
Cash Cycle (days) 45 34 34
Proftability Ratios
Gross proft margin (%) 12.73 11.52 11.33
Operating proft margin (%) 4.27 2.19 1.32
Net proft margin (%) 3.40 2.63 1.32
Return on equity (%) 10.59 7.83 3.98
Operating Effciency Ratios
Return on fxed assets (%) 21.25 19.78 14.54
Asset turnover (times) 1.40 1.40 1.37
Leverage Ratios
Debt to equity (times) 1.14 1.12 1.28
Interest coverage 4.71 0.41 6.25
Dividend payout (%) 57.98 58.66 50.95
2. Explanation and Analysis of Financial Position
and Operating Results
The following analysis of fnancial position and operating results is the analysis of fnancial
information from CPFs consolidated fnancial statements for the year 2004 which include the fnancial
statements of Charoen Pokphand Foods Public Company Limited and its 38 subsidiaries, 26 of which
are registered in Thailand and 12 of which are registered abroad. In 2004, 3 new subsidiaries were
included as follows:
1. C.P. Standart Gida Sanayi ve Ticaret A.S. (CPS) is a company which has been
operating an integrated chicken business in the Republic of Turkey since 1988. The
Companys subsidiary acquired the common shares of CPS from former shareholders in
2004 and now has 84.49% shareholding in CPS.
2. CPF Tokyo Co., Ltd. (CPF TK) is a new company established in Japan to import and
distribute processed meat products and ready-to-eat food products.
3. Shrimp Improvement Systems (Thailand) Co., Ltd. (SIST) is a new company established
in Thailand to breed shrimp fry.
2.1 Operating Results
1) General Overview of Operating Results
The Companys total revenues in 2004 amounted to THB 91.790 billion, increasing 10.4% from
2003. The increase resulted from the 112% sales growth from overseas operations, mainly from the
sales of CPS which became the Companys subsidiary on January 29, 2004. Sales from operations in
Thailand grew only 1.6% due to the following major factors:
1. The bird fu outbreak, offcially announced by the Thai government during the end
of January 2004, and the outbreak in July 2004 had a signifcant impact on the Thai
broiler industry and chicken exports as the demand for chicken consumption dropped
dramatically. Due to the bird fu outbreak, domestic consumers switched to consuming
pork, causing the prices and volume of pork to increase notably in 2004. This helped to
partially offset the sales decline of chicken and eggs.
2. Due to the uncertainty arising from the US anti-dumping lawsuit against 6 major shrimp
exporting countries, namely Thailand, the Peoples Republic of China, India, Vietnam,
Brazil and Ecuador, during the frst half of 2004, shrimp farming in Thailand and
Thai shrimp exports slowed down during that period. Consequently, demand for the
Companys shrimp products declined. However, in July 2004, the USA announced the
preliminary dumping margin on shrimp imported from each country in the lawsuit. The
preliminary dumping margin assigned to Thailand was the lowest rate among the countries
targeted in the case. This rate was applied on Thai shrimp exports to the USA until the
fnal dumping margin was announced in January 2005. The fnal dumping margin assigned
to Thailand was lower than those of other countries in the lawsuit except Ecuador. The
preliminary determination cleared the situation and boosted shrimp farming in Thailand
and Thai shrimp exports in the later half of the year. As a result of the improved situation,
the Companys sales from shrimp breeder and shrimp exports increased in the second half
of 2004 compared to the frst half. However, total shrimp export sales in 2004 were lower
than that of the previous year.
The cost of sales in 2004 totaled THB 81.388 billion, jumping 10.7% from the year before. This
percentage increase was approximately the same as the percentage increase in sales. Gross proft
margin in 2004 fell slightly to 11.3% from 11.5% in 2003, partly due to higher average prices of raw
materials used in animal feed production, which caused the cost of animal farming in 2004 to be higher
than that of 2003.
Selling and administration expenses in 2004 rose 18.7% to THB 9.201 billion, mainly from the
expenses of CPS which were consolidated into the Companys fnancial statements in 2004. In addition,
the Company incurred higher marketing and public relations expenses in 2004 to increase consumers
awareness of the quality and safety of products under the Companys trademark.
From the increase in both sales and cost of sales mentioned above as well as the loss from
foreign exchange in 2004, earnings before interest and taxes in 2004 amounted to THB 2.611 billion,
falling 6.6% from 2003. Net proft in 2004 was THB 1.237 billion, also down from the previous year by
44.9%, as a consequence of the factors mentioned above and recognition of the deferred tax asset
arising from temporary differences in the investment in CP USA in 2003.
During 2004, CPF made 2 interim dividend payments totaling THB 0.11 per share, equivalent
to THB 630 million or 50.9% of net proft in 2004. The dividend payout was in line with the Companys
dividend policy which stipulates that total dividends paid each year shall approximately be 50% of net
income after income taxes and legal reserve. In addition, the dividend payout was in compliance with
the terms and conditions of CPFs 4 issues of amortized debentures which state that the Company is
not permitted to pay cash dividends to shareholders in the amount exceeding 60% of net proft of each
fscal year for the duration of the term of the debentures.
2) Operating Results of Each Business
Sales structure of CPF and its subsidiaries for the years ended December 31, 2002, 2003
and 2004
2002 2003 2004 Change from
THB million % of Sales THB million % of Sales THB million % of Sales previous year
1. Operations in Thailand 70,738 94% 76,466 92% 77,680 85% 2%
1.1 Livestock Business 49,349 66% 55,744 67% 57,040 62% 2%
Feed 16,958 23% 18,059 22% 16,295 18% -10%
Breeder 2,250 3% 2,013 2% 2,026 2% 1%
Meat & Foods - Domestic Sales 19,466 26% 21,760 26% 27,071 29% 24%
Meat & Foods - Export Sales 9,688 13% 12,419 15% 9,923 11% -20%

Others 987 1% 1,493 2% 1,725 2% 16%

1.2 Aquaculture Business 21,389 28% 20,722 25% 20,640 23% 0%
Feed 12,403 17% 12,636 15% 12,775 14% 1%
Breeder 416 1% 1,128 2% 1,184 1% 5%
Meat & Foods - Domestic Sales 916 1% 1,906 2% 2,474 3% 30%
Meat & Foods - Export Sales 6,714 9% 4,158 5% 3,697 4% -11%
Others 940 1% 894 1% 510 1% -43%

2. Overseas Operations 6% 6,643 8% 14,110 15% 112%
Net Sales 75,147 100% 83,109 100% 91,790 100% 10%
Details of operating results according to business location and business line are as follows:
A) Operations in Thailand
Livestock Business
Sales from the livestock business in Thailand in 2004 were THB 57.040 billion, rising 2% from
the prior year. Sales from the livestock business accounted for the majority of the Companys sales, or
approximately 62% of net sales. The proportion of domestic sales to export sales was 83:17. Export
sales fell 20% from the prior year as a result of the bird fu outbreak in Thailand which was mentioned
previously. This had a great impact on the chicken industry and broiler exports as importing countries
banned raw chicken exports from Thailand. Apart from causing a sudden halt of broiler exports in the
whole industry, domestic broiler prices were also affected. Consequently, the Companys sales of broiler
fell signifcantly in 2004.
In 2004, gross proft margin of the livestock business in Thailand was 8.8% of net sales of the
livestock business in Thailand, lower than the previous years gross proft margin of 9.6%, as a result of
higher average prices of raw materials in 2004 compared to 2003.
Sales from the aquaculture business in Thailand in 2004 totaled THB 20.640 billion, down
slightly from THB 20.722 billion in 2003. Sales from aquatic feed which accounted for the majority of
sales from the aquaculture business in Thailand increased 1% from 2003. Sales from aquatic feed were
affected by the lawsuit fled by the USA charging 6 countries for dumping shrimp into the US market.
Shrimp farming for export to the USA which is a major market slowed down in the frst half of 2004 as
farmers awaited the results of the case. After the USA announced the preliminary determination and
Thailand was at an advantage compared to competing countries, shrimp farming in the country returned
to normal. Hence, sales of shrimp feed increased in the second half of 2004. Domestic sales from meat
and foods surged 30% in contrast to 2003 as a result of the Companys effective strategy of increasing
distribution channels and focusing on domestic sales expansion.
Gross proft margin of the aquaculture business decreased from18.6% in 2003 to 17.7% in
2004 due to higher cost of aquatic feed production in line with higher raw material prices and the decline
in average selling prices of aquatic animals sold in the country.
B) Overseas Operations
Sales from overseas operations in 2004 amounted to THB 14.110 billion, soaring 112% from
the year earlier, attributable to the 84.49 investment in CPS which operates an integrated chicken
business in the Republic of Turkey. CPSs sales since it became the Companys subsidiary in January
29, 2004 to December 31, 2004 totaled THB 9.867 billion, or approximately 11% of the Companys net
sales in 2004. Since CPSs operations are not located in bird fu outbreak areas and its sales are mostly
in the Republic of Turkey, the bird fu outbreak had no effect on CPSs operations.
The integrated chicken business in the USA under Charoen Pokphand (USA), Inc. (CP USA),
a subsidiary in which CPF has 99.95% shareholding, ceased operations in March 2004 after CP USA
sold its assets. Impairment loss on the assets sold was recorded in 2003.
Gross proft margin of overseas operations rose from 5.3% in 2003 to 12.1% in 2004. This
difference can be attributable to comparing businesses in different geographic locations. In 2003, most
of the overseas business activity was in the USA. However, in 2004, most of the overseas business
activity was in the Republic of Turkey.

2.2 Financial Position
1) Assets
As of December 31, 2004, the Companys total assets amounted to THB 72.218 billion,
comprising of THB 30.035 billion in current assets, THB 31.078 billion in property, plant and equipment
and THB 11.105 billion in long-term investments and others.
Assets in 2004 increased 12% from the year earlier from both operations in Thailand and
overseas operations. With regards to operations in Thailand, assets increased 9%, mainly due to an
increase in fxed assets from business expansion, particularly investment in an integrated chicken
business in Nakorn Ratchasima Province, a shrimp fry breeding business and a shrimp processing
business. With regards to overseas operations, assets increased 5% from the consolidation of CPS
assets in 2004 and decreased 2% from the sale of CP USA assets.
As of December 31, 2004, the Company had inventories of THB 18.307 billion, decreasing
slightly from the year before. Inventories consisted of THB 4.679 billion in fnished products, THB
1.542 billion in parent stock (net of breeder depreciation), THB 5.138 billion in work-in-progress, THB
5.463 billion in raw materials, THB 1.006 billion in goods in transition, THB 507 million in chemicals and
supplies and THB 28 million in allowance for diminution in value of inventories.
2) Liquidity
In 2004, the Company had net cash from operating activities and fnancing activities of THB
4.342 billion and THB 3.602 billion, respectively and net cash used in investing activities of THB 7.482
billion. As of December 31, 2004, cash and cash equivalents was THB 1.708 billion compared to
THB 1.675 billion on December 31, 2003. The Company is obligated to make payments on loans and
debentures during 2005-2007 in the amounts of THB 4.595 billion, THB 5.671 billion and THB 4.560
billion, respectively.
The current ratio as of December 31, 2004 was 1.25 times, improving from 1.17 times in 2003.
This was mainly due to the decrease in interest-bearing debt, both short-term loans and the current
portion of long-term liabilities. The reduction in short-term loans was a result of using funds obtained
from the issue of debentures in November 2005 for repayment. As of December 31, 2004, the
Companys outstanding debentures totaled THB 10.970 billion. THB 4.970 billion worth of debentures
have an interest rate of 4.00% per year. Another debenture issue worth THB 6.000 billion was issued
on November 17, 2004, divided into 2 allotments. The frst debenture allotment worth THB 2.500 billion
has a maturity of 3 years and fxed interest rate of 4.25% per year. The second debenture allotment
worth THB 3.500 billion has a maturity of 5 years and a fxed interest rate of 5.50% per year. The interest
coverage ratio was 6.25 times in 2004, increasing from 0.41 times in 2003.
3) Source of Funds
The debt to equity ratio as of December 31, 2004 was 1.28 times. Total liabilities of THB
40.589 billion comprised of THB 24.039 billion in current liabilities and THB 16.55 billion in long-term
liabilities, or in the proportion of 59:41, in comparison to 74:26 in 2003. The decrease in the proportion
of short-term to long-term liabilities in 2004 mainly resulted from the issue of debentures with maturities
of 3 and 5 years in 2004.
As of December 31, 2004, shareholders equity was THB 31.628 billion. Major changes in
shareholders equity during 2004 include:
a) An increase in retained earnings resulting from 2004 net proft of THB 1.237 billion and
a decrease from dividend payments of THB 810 million.
b) An increase in the difference from reclassifcation of items in the fnancial statements equal
to THB 229 million.
c) An increase in surplus on revaluation of available-for-sale investment (net of deferred tax
liabilities) equal to THB 102 million from the rise in market value of TRUE and MAKRO.
4) Investments in 2005
In 2005, CPF and its subsidiaries plan to invest THB 2.562 billion in accordance with the plans
approved by the Companys Board of Directors. THB 1.037 billion will be invested in the livestock
business, while THB 1.525 billion will be invested in the aquaculture business. Investment plans may
change according to changes in the business environment.
Management
1. Management Structure
as of December 31, 2004

2. Board of Directors
As of December 31, 2004, CPFs Board of Directors consists 15 members as follows:

First name Last name Position Board of Directors Meeting
Attendance out of a total of
14 meetings in 2004
1. Pol. Gen. Pow Sarasin Honorary Chairman & Independent Director
(1)
13
2. Mr. Dhanin Chearavanont Chairman
(3)
8
3. Mr. Prasert Poongkumarn Vice Chairman
(3)
9
4. Mr. Min Tieanworn Vice Chairman
(3)
11
5. Mr. Chingchai Lohawatanakul Vice Chairman
(2) (3)
13
6. Mr. Arsa Sarasin Independent Director
(1)
10
7. Professor Dr. Athasit Vejjajiva Independent Director
(1)
13
8. Mr. Thanong Termpangpun Independent Director
(1)
14
9. Mr. Phongthep Chiaravanont Director
(2) (3)
9
10. Dr. Veeravat Kanchanadul Director
(3)
13
11. Mr. Adirek Sripatak Director
(2) (3)
14
12. Mr. Thong Chotirat Director
(2) (3)
2
13. Mr. Pong Visedpaitoon Director
(2) (3)
11
14. Mr. Sunthorn Arunanondchai Director (3) 13
15. Mrs. Arunee Watcharananan Director
(2) (3)
13

Note : 1. The Directors No. 1 and 6-8 are Independent Directors
2. The Directors No. 5, 9, 11, 12, 13 and 15 are Executive Directors
3. The Directors No. 2-5 and 9-15 are authorized directors whereby any two of the authorized directors shall sign on behalf
of the Company with the Companys seal affixed.

Board of Directors
Executive Board
Internal Audit Offce
Audit Committee Corporate Secretary
Offce
Livestock Information Technology
& Application
General
Administration
Chief Financial Offcer Aquaculture
President & CEO
Chief Operating Offcer
Livestock Feed
Regional Integrated
Integrated Food
Processing
Accounting
Finance
Livestock Feed
Aquatic Food
Processing
Aquatic Research
& Development
Composition of the Board of Directors
The Companys Board of Directors must consist of at least 5 directors and at least half of the
directors must have residence within Thailand.
As of December 31, 2004, the Companys Board of Directors comprised 4 Independent
Directors, 6 Executive Directors and 5 Non-executive Directors. The Board of Directors appoints the
Honorary Chairman, the Chairman and the Vice Chairman who may hold an Executive Director position
or a Non-Executive Director position. In case of lack of independence of the Chairman or a transaction
in which the Chairman has a conflict of interest, the Honorary Chairman or an Independent Director
shall preside as Chairman of the meeting in considering the matter.
Every member of the Companys Board of Directors has residence in Thailand, possesses
business and industry-related experience, understands the business obstacles, performs work
effectively, can create competitive advantage in the industry and can provide beneficial views on
important risks. Furthermore, every member of the Board of Directors is a qualified person and does
not have the qualifications which are prohibited under the Public Limited Company Act and the
Notification of the Securities and Exchange Commission.
The Independent Directors possess the qualifications in accordance with the Notification of
the Securities and Exchange Commission No. Kor Jor. 12/2543; Re: Application for permission and
granting of permission to offer for sale new shares issued. Briefly stated, the Independent Director
does not hold more than 5% of the voting shares of the Company, its subsidiaries, or others of the
Companys connected persons, do not have any involvement with the Company in terms of
management and/or provide professional services, do not have any business involvement with the
Company, do not have any personal, business or other relationship with the Company or its
management, do not represent any specific shareholder group, and do not have any financial or
personal involvement with the Company, thus allowing independent judgment and ensuring that the
interests of all shareholders are equally protected.

Appointment and selection
Each director, including the independent director, has a 3-year term post, excluding the case
of being the replaced director for the available position caused by other factors rather than by rotation.
At every annual general meeting, one-third of the directors shall retire from office. If the number of
directors is not a multiple of three, then the number nearest to one-third shall retire from office. The
directors serving the longest shall retire. The departing directors may be re-elected if approved by the
shareholders. In case of appointment of a new director, the Board of Directors must select a person
with the qualifications, knowledge and expertise appropriate for the position.
In case of a vacancy in the Director position, for reasons other than the completion of the
term and the remaining term is at least two months, the Board of Directors shall appoint a director with
the required qualifications and without any characteristics prohibited by law to serve as Director in the
next Board of Directors Meeting. The resolution must be passed by at least three-fourths of the
remaining number of directors. The newly appointed director shall assume the position for the
remaining term of the previous director.
In assuming the position of Director, each director will receive important company
information, the code of conduct of the Board of Directors that clearly prescribes the roles and
responsibilities of directors, advice concerning the legal obligations, rules and regulations and
conditions of being a Director of a listed company in the Stock Exchange of Thailand as well as an
orientation of the Companys business.
Shareholders have the right to appoint the Board of Directors under the following criteria:
1. Each shareholder shall have a number of vote equal to one share per one vote.
2. Each shareholder must exercise all the votes he has in order to appoint an individual or
several persons to be the director(s) but a shareholder shall not split his votes among any
person or group of persons.
3. The persons receiving the highest number of votes in descending order shall be
appointed as directors depending on the requirement of directors set at such time. In the
event that a number of persons receive an equal number of votes for the last directorship
rendering the number of directors more than which is required at such time, the chairman
of the meeting shall have a casting vote.
4. At shareholders meeting any director may be dismissed before retirement by rotation by
the resolution of not less than three-fourths of the number of shareholders who attend
the meeting and have the right to vote and collectively hold not less than half of the
number of shares of the shareholders who attend the meeting and have the right to vote.

Roles and responsibilities of the Board of Directors
The Board of Directors are appointed by the Companys shareholders who have considered
the personal qualifications, knowledge, competency and ability of the person to devote his/her time to
perform duties for the Company to ensure that the director has the experience and knowledge to
operate the business to maximize the benefits of all the stakeholders.
The Board of Directors have been entrusted by the shareholders to honestly and fairly
manage the Companys business as indicated in the Memorandum of Association and in compliance
with the Articles of Association of the Company, the resolutions of the shareholders meetings and
related regulations. The Board of Directors, under their authority, may assign one or several directors
or any other person to perform any act on its behalf with clear indication of roles and responsibilities to
the assignee.
The Board of Directors regulates the policy and sets direction of the Company as well as
oversee the duty performed by the management to ensure that it is still in line with the policy. The
Board of Directors delegates authority and responsibility of day-to-day management to the President
and top management respectively as well as appoints various committees to assist with specific
operations. The duties of the Chairman of the Board and the President do not overlap. In assigning
duties and responsibilities to manage the Companys operations to top management, the President is
responsible to the Board of Directors.
In addition, the Board of Directors appoints the Corporate Secretary Office to provide counsel
and assist the Board of Directors in the areas of legal and corporate compliance. The Corporate
Secretary Office also coordinates with and takes care of the Companys shareholders to ensure that
they receive appropriate treatment.
The Board of Directors roles and responsibilities in managing the Companys business
include:
1. Determining the Companys overall business policy, financial policy, funding policy and
risk management policy
2. Approving the Companys budget and investment plans and overseeing the development
of the plans
3. Overseeing the Companys business according to set goals and determining ways to
overcome obstacles
4. Arranging for the Companys general and financial information to be reported to
shareholders and stakeholders in an accurate and timely manner according to the law
5. Acknowledging the audit report on material issues and determining ways to remedy in
case there is any deficiency
6. Reviewing the adequacy and appropriateness of the Companys internal control systems
and risk management
7. Arranging for the Companys Succession Plan

3. Audit Committee
CPFs Audit Committee was appointed by the Board of Directors to assist the Board of
Directors with overseeing the efficiency and effectiveness of financial reporting, internal control and
risk management, internal audit and compliance to related rules and regulations and business ethics.
The Audit Committee was appointed by the Board of Directors on December 18, 2002 for a
term of 3 years. The Audit Committee comprises 4 independent directors who have no management
duties as follows:
1. Pol. Gen. Pow Sarasin Chairman of the Audit Committee
2. Mr. Arsa Sarasin Member
3. Professor Dr. Athasit Vejjajiva Member
4. Mr. Thanong Termpangpun Member
Mr. Voravit Janthanakul carries out duties as Secretary of the Audit Committee.
The Board of Directors appoints the Chairman and Secretary of the Audit Committee. The
Secretary of the Audit Committee has no voting right. At least one committee member must have
knowledge, understanding and experience in accounting and finance and be consistently
knowledgeable of events affecting the changes in financial reporting progress. The Audit Committee
can seek advice from an independent specialist.
The term of service of committee members is 3 years to ensure continuity of the performance
of the work of the Audit Committee. A departing committee member may be re-appointed for another
term. In case of resignation of a committee member, a new committee member must be immediately
appointed after the vacancy. In case that any committee member wishes to resign before the
expiration of his term of service, he should give a written notice 1 month in advance. A new committee
member who replaces a resigning committee member assumes the remaining term of service of the
departing committee member.
In each Audit Committee meeting, the Audit Committee is empowered to invite the President,
Chief Operating Officer, Chief Financial Officer, management, Auditor and Head of the Internal Audit
Office to attend the meeting for clarification purposes. In necessary cases, the Audit Committee may
also meet with the Internal Audit Office and the Companys Auditor without management on an ad hoc
basis.

Roles and responsibilities of the Audit Committee
The Audit Committees roles and responsibilities for the Board of Directors are as follows:
1. Reviewing the effectiveness of the internal control and auditing
2. Reviewing compliance to related rules and regulations
3. Reviewing the Companys information disclosure related to connected transactions and/
or possible conflicts of interest
4. Reviewing financial statements and financial reports
5. Considering the selection and appointment of the auditor and the annual audit fee
6. Carrying out other duties assigned by the Board of Directors

4. Executive Board
The Board of Directors appoints the Executive Board by considering persons with
qualifications, knowledge, competency and experience related to the Companys business to assist
with efficient and effective management of operations according to the Companys policies and
objectives laid down by the Board of Directors.
As of December 31, 2004, CPFs Executive Board consists of the following members:
1. Mr. Chingchai Lohawatanakul Chairman of the Executive Board
2. Mr. Adirek Sripratak President and Chief Executive Officer (CEO)
3. Mr. Pong Visedpaitoon Chief Operating Officer (COO)
4. Mr. Phongthep Chiaravanont Executive Director
5. Mr. Thong Chotirat Executive Director
6. Mrs. Arunee Watcharananan Executive Director
7. Mr. Voravit Janthanakul Executive Director
8. Mr. Teerasak Urunanont Executive Director
9. Mr. Vitit Phutanasap Executive Director
10. Ms. Patchara Chartbunchachai Executive Director
11. Mr. Paisan Chirakitcharern Chief Financial Officer (CFO) and Secretary

The Board of Directors appoints the Chairman of the Executive Board and the Secretary of
the Executive Board. In the case that the Chairman of the Executive Board is unable to attend the
Executive Board meeting, he will assign the President or the Chief Operating Officer to act as
Chairman of the meeting. In each meeting, the Executive Board may invite other persons such as
management representatives and/or external advisors to attend the meeting if deemed necessary.
The primary responsibilities of the Executive Board include the following:
1. Determine the goals and strategies of each business as well as set up policies on human
resources performance appraisals and remuneration
2. Scrutinize budgets and investment decisions of each business before submitting to the
Board of Directors for approval and subsequently adjust the approved budgets to be
suitable for the changing situation if there is any
3. Follow-up on the operating performance and the progress of investment projects in each
business as well as performance report, problems and obstacles encountered and
possible solutions to the Board of Directors
4. Follow and monitor developments in management and risk management system of each
business
5. Follow and monitor human resource development, management promotion and rotation
in each business according to the Companys plans
6. Evaluate alternative sources of funding necessary for various investment projects to be
approved by the Board of Directors
7. Follow and monitor uses of funds, fund management and financial status of each
business

5. Management
As of December 31, 2004, CPF management comprises the following:
1. Mr. Adirek Sripratak President and Chief Executive Officer
2. Mr. Pong Visedpaitoon Chief Operating Officer
3. Mr. Teerasak Urunanont Executive Vice President, Integrated Food Processing Unit
4. Mr. Veerachai Ratanabanchuen Executive Vice President, Livestock Feed Unit
5. Mr. Anek Boonnoon Executive Vice President, Regional Integration Unit
6. Mr. Vitit Pootanasap Executive Vice President, Aquatic Feed Unit
7. DVM. Sujint Thammasart Executive Vice President, Aquatic Research
& Development Unit
8. Mr. Voravit Janthanakul Executive Vice President, General Administration Unit
9. Mr. Praderm Chotsuparaj Executive Vice President, Information Technology
& Application Unit
10. Mr. Paisan Chirakitcharern Chief Financial Officer

Roles and responsibilities of the President
The President, who has the highest management position in the Company, is appointed by
the Board of Directors to manage the operations of the Company in order to achieve the Companys
objectives and goals set by the Board of Directors, be responsible for the governance of the Company
to create maximum benefits for all stakeholders with appropriateness and fairness, and oversee the
disclosure of the Companys general and financial information according to best practices. In addition,
the President has authority in carrying out duties according to the Companys policies and scope of
authority, except authority in the following matters which must be approved by the Board of Directors:
1. Accepting credit line or borrowing money from financial institutions
2. Lending money or providing financial assistance to other parties except for short-term
loans to subsidiaries in which the Company directly or indirectly holds shares in excess
of 90 percent
3. Investing in or divesting from other companies
4. Approving new investment projects except for projects that have been approved in the
shareholders meeting or Board of Directors meeting
5. Entering into connected transactions according to the rules and regulations of the Stock
Exchange of Thailand
6. Entering into the acquisition or disposition of substantial assets that must be processed
according to the rules and regulations of the Stock Exchange of Thailand
7. Matters in which the President or connected persons to the President may have a conflict
of interest with CPF or its subsidiaries
8. Other matters that as prescribed by the laws must be approved by the Board of Directors
or the shareholders meeting

6. Selection of Directors and Management
CPF is in the process of selecting qualified persons to assume positions in the Nominating
and Remuneration Committee to assist in the selection and appointment of persons with knowledge,
competency and experience to assume the positions of Director, President and top management of
the Company, propose remuneration policies as well as determine the Companys succession policy.
The Board of Directors is responsible for the selection of directors by considering various
major qualifications such as knowledge, competency and related business experience. In addition, the
candidate must have required qualifications and must not have characteristics which are prohibited
under the Public Limited Company Act and the Notification of the Securities and Exchange
Commission. In case of a Directorship vacancy, the Board of Directors will search, select and propose
a nominee to be approved by the shareholders. In the case of a vacancy in a top management
position, the Board of Directors has assigned the Executive Board to be responsible for the search and
selection of a replacement.

7. Remuneration of Directors and Management
CPF is in the process of selecting qualified persons to assume positions in the Nominating
and Remuneration Committee. As of present, the Board of Directors determines and reviews the
compensation policy framework, guidelines and appropriate remuneration for the Companys
directors. The Executive Board has been assigned to consider and determine remuneration for the
President and top management in accordance with their responsibilities and performance results in
relation to the Companys operating performance and the performance of each director and executive
as well as in comparison to the industry average. Any change in the remuneration of the Board of
Directors must be approved by the shareholders.

Remuneration for the Board of Directors
Cash remuneration In 2004, the total remuneration for 15 members of the Board of Directors
was THB 26.6 million in accordance with the approval of the shareholders at the Annual General
Meeting of Shareholders No. 1/2543 held on March 29, 2000, with details as follows:
Firstname Lastname Remuneration in 2004 (THB)
1. Pol. Gen. Pow Sarasin 3,500,000
2. Mr. Dhanin Chearavanont 2,800,000
3. Mr. Prasert Poongkumarn 2,100,000
4. Mr. Min Tieanworn 2,100,000
5. Mr. Chingchai Lohawatanakul 2,100,000
6. Mr. Arsa Sarasin 1,400,000
7. Professor Dr. Athasit Vejjajiva 1,400,000
8. Mr. Thanong Termpangpun 1,400,000
9. Mr. Phongthep Chiaravanont 1,400,000
10. Dr. Veeravat Kanchanadul 1,400,000
11. Mr. Adirek Sripatak 1,400,000
12. Mr. Thong Chotirat 1,400,000
13. Mr. Pong Visedpaitoon 1,400,000
14. Mr. Sunthorn Arunanondchai 1,400,000
15. Mrs. Arunee Watcharananan 1,400,000

Other remuneration None

Remuneration for the Audit Committee
Cash remuneration In 2004, the total remuneration for 4 members of the Audit Committee
was THB 7.7 million, with details as follows:
Position Remuneration in 2004 (THB)
Chairman of the Audit Committee 3,500,000
Member 1,400,000


Remuneration for the Executive Board and Management
Cash remuneration In 2004, the total remuneration, including monthly salary and bonus, for
14 members of the Executive Board and the management of CPF amounted to THB 187 million.


8. Brief profile of Directors and Management

Pol.Gen. Pow Sarasin - 76 years of age
Honorary Chairman, Independent Director and
Chairman of the Audit Committee
Education
Bachelor of Criminology from University of California, USA
Bachelor of Science in Chemistry from Johns Hopkins

University, USA
Honorary Doctorate in Public Administration from

Ramkamhaeng University
Commercial Defense College, Thailand
Enrollment in Directors Accreditation Program No. 5/2003,

the Thai Institute of Directors
% shareholding in the Company as of December 31, 2004
880,000 shares, equivalent to 0.015%

Family relations with other executives
Elder brother of Mr. Arsa Sarasin

Attendance at Board of Directors Meetings during 2004
13 times out of 14 meetings

Work Experience for the past 5 years
Vice Chairman, Kasikornbank Plc.
Director, Quality House Plc.
Director, Siam Food Products Plc.

Mr. Dhanin Chearavanont - 66 years of age
Chairman of the Board of Directors
Education
National Defense College
Commercial School, Hong Kong

Cousin of Mr. Phongthep Chiaravanont


Positions in the Companys subsidiaries
Director, BKP Holdings Limited

Chairman, Charoen Pokphand Group Co., Ltd.
Chairman, True Corporation Plc.
Chairman, C.P. Seven Eleven Plc.
Honorary Chairman, Siam Makro Plc.

Mr. Prasert Poongkumarn - 69 years of age
Vice Chairman
Education
Honorary Doctorate in Social Development from Prince of

Songkla University
Honorary Doctorate in Agriculture from Jejiang University,

Chengchou province, the Peoples Republic of China
1,690,633 shares, equivalent to 0.030%


Director, C.P. Merchandising Co., Ltd.
Director, C.P. Food Product (Shanghai) Co., Ltd.

Vice Chairman, Charoen Pokphand Group Co., Ltd.
Director, Vinythai Plc.
Director, CPPC Plc.
Director, C.P. Intertrade Co., Ltd.

Mr. Min Tieanworn - 69 years of age
Vice Chairman
Education
Honorary Doctorate in Sociology and Anthropology from

Ramkamhaeng University
Honorary Professor in Economics from Jiangjing Agricultural

College, Chengchou province, the Peoples Republic of China

Director, CPF Investment Limited

Director, Charoen Pokphand Group Co., Ltd.

Mr. Chingchai Lohawatanakul - 66 years of age
Vice Chairman and Chairman of the Executive Board
Education
Master of Science from Arizona State University, USA
Enrollment in Directors Certifcation Program No. 5/2001,

254, 690 shares, equivalent to 0.004%


Director, Aqua-Agri Foods International, Inc.


Mr. Arsa Sarasin - 69 years of age
Independent Director and a member of the Audit Committee
Education
Bachelor degree in Business Administration from Boston

University, USA
Enrollment in Directors Accreditation Program No. 5/2003,


Younger brother of Pol. Gen. Pow Sarasin


Principal Private Secretary to His Majesty the King of

Thailand
Chairman, Siam Makro Plc.
Chairman, Padaeng Industrial Plc.
Director, Siam Cement Plc.
Director, Thai Pure Drinks Co, Ltd.

Professor Dr. Athasit Vejjajiva - 69 years of age
Education
FRCP from the Physicians College of London, UK
Honorary Doctorate in Internal Medical from Mahidol

University
Honorary Doctorate in Clinical Science from Mahidol

University

Chairman of the Royal Institute of Thailand

Mr. Thanong Termpangpun - 69 years of age
Education
Master of Business Administration from the American

University, USA
Bachelor Degree in Accounting and in Commerce,

Thammasart University


Advisor, Worachak International Co., Ltd.

Mr. Phongthep Chiaravanont - 54 years of age
Director and Executive Director
Education
Master Degree in Avian Sciences from University of California

at Davis, USA

Cousin of Mr. Dhanin Chearavanont


Chief Executive Offcer, Charoen Pokphand (USA), Inc.
Director, Aqua-Agri Foods International, Inc.


Dr. Veeravat Kanchanadul - 67 years of age
Director
Education
Doctorate in Business Administration from University of

Illinois, USA



Honorary President, Association of Listed Companies
Senior Director, National Institute of Development

Administration, Thailand
Director, Program for Joint Doctorate in Business

Administration

Mr. Adirek Sripratak - 59 years of age
President and Chief Executive Officer
Education
Honorary Doctorate in Science from Maejo University


Elder brother of Mrs. Arunee Watcharananan


Director, Bangkok Agricultural Products Plc.
Director, Charoen Pokphand Northeastern Plc.
Director, Bangkok Produce Merchandising Plc.
Director, Bangkok Feedmill Co., Ltd.
Director, Bangkok Livestock Processing Co., Ltd.
Director, CPF IT Center Co., Ltd.
Director, CPF Training Center Co., Ltd.
Director, CPF Europe S.A.

Honorary Chairman of the Thai Broiler Export Association

Mr. Thong Chotirat- 53 years of age
Education
Professional Diploma from Rajamangala Institute of

Technology, Bangkok Commerce Campus
Honorary Bachelor in Science, Economics and Agricultural

Administration from Rajamangala Institute of Technology,
Bangpra


Mr. Pong Visedpaitoon - 60 years of age
Director, Executive Director and Chief Operating Officer
Education
Honorary Doctorate in Fisheries from Maejo University


Director, Seafoods Enterprise Co., Ltd.
Director, Pokphand Aquatech Co., Ltd.

Mr. Sunthorn Arunanondchai - 63 years of age
Director
Education
Master of Business Administration from University of

Arkansas, USA


President of C.P. Land Co., Ltd
Chairman, Ek-Chai Distribution System Co., Ltd.

Mrs. Arunee Watcharananan - 57 years of age
Education
Bachelor degree in Economics from Thammasat University


Younger sister of Mr. Adirek Sripratak


Vice Chairman - Finance, C.P. Group

Director, Thai Prawn Culture Center Co., Ltd.
Director, Klang Co., Ltd.

Mr. Voravit Janthanakul - 58 years of age
Executive Director and Executive Vice-President,
General Administrative
Education
Master of Business Administration from Thammasart

University
Director, Charoen Pokphand Industry Co., Ltd.
Director, B.P. Feedmill Co., Ltd.
Director, Rajburi Feedmill Co., Ltd.
Director, C.P. Agro-Industry Co., Ltd.
Director, Bangkok Farm Co., Ltd.
Director, C.P. Food Products, Co., Ltd.
Director, C.P. Food Industry Export Co., Ltd.
Director, Vee Food Products Co., Ltd.
Director, Universal Foods and Marketing Co., Ltd.
Director, International Pet Foods Co., Ltd.
Director, Trad Prawn Culture Center Co., Ltd.
Director, Savee Farming Co., Ltd.
Director CPF Training Center Co., Ltd.
Director, Chanthaburi Aquaculture Farm Co., Ltd.

Mr. Teerasak Urunanont - 56 years of age
Food Integrated Business Unit
Education
Professional Diploma from Thonburi Commercial College


Director, Bangkok Farm Co., Ltd.
Director, C.P. Food Products, Co., Ltd.
Director, C.P. Food Industry Export Co., Ltd.

Executive Director of the Thai Feedmill Association

Mr. Veerachai Ratanabanchuen - 56 years of age
Livestock Feed Unit
Education
Bachelor degree in Accounting from Thammasart University

230 shares, equivalent to 0.000%

Director, Vee Food Products Co., Ltd.

President, Thai Feedmill Association

Mr. Anek Boonnoon - 52 years of age
Executive Vice-President, Regional Integration Unit
Education
Bachelor degree in agriculture, major in Veterinary Sciences,

Kasetsart University

Director, C.P. Agro-industry Co., Ltd.

DVM. Sujint Thammasart - 52 years of age
Executive Director, Executive Vice-President,
Aquatic Research & Development Unit
Education
Bachelor degree in Veterinary Medicine, Kasetsart University


Director, Shrimp Improvement Systems (Thailand) Co., Ltd.

Mr. Vitit Pootanasap - 51 years of age
Executive Director and Executive Vice President-
Aquatic Feed Unit
Education
Bachelor degree in Business Administration, Ramkamhaeng

University


Mr. Praderm Chotsuparaj - 56 years of age
Executive Vice President-Information Technology
and Application
Education
Master in Statistics, Chulalongkorn University


Mr. Paisan Chirakitcharern - 46 years of age
Executive Director and Chief Financial Officer
Education
Master of Business Administration from National Institute of

Development Administration
Director, CPF Europe S.A.
Director, Fusion Foods Limited

Miss Patchara Chartbunchachai - 47 years of age
Executive Director
Education
Bachelor Degree in Accounting from Thammasart University


Director, Thai Prawn Culture Center Co., Ltd.
Director, Klang Co., Ltd.
Director, Chanthaburi Aquaculture Farm Co., Ltd.

9. Personnel
As of December 31, 2004, CPF had a total of 11,033 employees and labors, classified according
to business units as follows:

Business Unit Persons
1. Livestock Business 5,703
2. Aquaculture Business 4,732
3. Supporting Offices 598
Total 11,033

CPF remunerated to its employees in 2004 at a total of THB 2,047 million including salary,
wage, bonus, welfare, training and employees insurance fees.

Human resource development policy
The Company has a policy to develop employees professionalism, enabling them to
effectively perform their jobs, prepare them for the Companys business growth and enabling them to
adapt to new ever-changing technology. The Company is committed to being a learning organization
to support continuous business growth, providing on-the-job training, overseas business study trips
and external training both locally and abroad. In addition, CPF Training Center Co., Ltd. was
established to provide training and seminars to develop employees knowledge and understanding of
various updated topics that will be useful to their work as well as provide training for management.
Aside from developing employees knowledge and competency, the Company has a policy to
encourage employees be good social citizens. In addition to fostering concern and care among
co-workers, the Company has arranged various activities for employees to contribute back to society,
such as blood donations to the Thai Red Cross Society, the Employee Donation Project to build
houses for tsunami victims, Employee Bird-folding Project to provide encouragement to the people in
the 3 southern provinces, merit-making on special occasions of different religions, and clothing and
goods donations to needy provinces.

Employee treatment
The Company provides equal opportunities to employees at every level. Fair treatment to
employees is applied in management to foster enthusiasm for productive work. All employees are
required to follow the Companys rules and regulations, especially those related to conflicts of interest
and information disclosure.

10. Supervision of Use of Inside Information
The Company has regulations concerning the trading of the Companys shares which sets
forth procedures and time restrictions for buying and selling of the Companys shares for directors and
management to follow. The enforced regulations create transparency, prevent the use of inside
information that has not yet been disclosed to the public for personal gain by directors and
management, and to prevent accusations of inappropriate trading of shares by inside personnel. The
regulations stipulate the preparation of a Shareholding Report of the Companys Shares held by
directors, management and related persons, clearly state the time that directors, management and
related persons should not engage in trading of the Companys shares. The Companys directors and
managements who are obliged to report shareholding of the Companys shares to the office of
Securities and Exchange Commission have signed documents to acknowledge their duties and
responsibilities and the penalties on this matter prescribed by the law.

11. Corporate Governance
The Company is well aware of the importance of good corporate governance and has
unanimous view that good corporate governance will enhance competitiveness and operating
efficiency, thus adding value to the Company and increasing stakeholders wealth in the long run.
Good corporate governance is implemented in line with best international practices which cover
honesty, transparency, independence, duties and responsibilities, fairness and social responsibility to
create confidence that the Company operates it business responsibly and treats all stakeholders
equitably.

11.1 Corporate Governance Policy
The Company has a framework for good corporate governance to guide the Board of
Directors to conduct business according to related rules and regulations and business ethics. This
framework also covers the code of best practices for directors; composition, roles and responsibilities,
and independence of the Board of Directors; rights and equal treatment of shareholders and
stakeholders; relations with stakeholders; information disclosure and transparency; supervision of use
of internal information; and internal control and risk management.
The Company is in the process of developing a formal corporate governance policy, which,
posted approved by the Board of Directors, will then be disseminated to directors, management and
employees at all levels as guidelines for conduct, leading to good corporate governance. Furthermore,
the Company is in the process of developing a Code of Conduct for employees to provide guidance in
conducting business in various areas, stressing honesty, fairness and righteousness, adherence to
rules and regulations, transparency and responsibility to society, communities, environment and
stakeholders.

11.2 Rights of Shareholders
The shareholders of CPF play a vital role in good corporate governance of the Company by
appointing a Board of Directors to monitor the Companys business operations to maximize the
benefits of shareholders. Therefore, the shareholders must have regular access to accurate and timely
information that is necessary for effective assessment, decision-making and voting on matters
presented by the Board of Directors for approval at the shareholders meeting.
The Company adheres to the information disclosure requirements of the Stock Exchange of
Thailand which stipulate that listed companies must disclose information that influences share price to
the market. The Investor Relations Office has been established to disseminate information to
shareholders, analysts and investors through various communication channels and activities for
shareholders. Financial reports which reveal the Companys financial status and operating
performance are relayed to investors through the Stock Exchange of Thailand and the Companys
website (www.cpfoods.net). Members of the management also meet with investors and securities
analysts to discuss operating results. Other investor-related activities include monthly newsletters,
shareholder visits to operating facilities, and reports to the SET and SEC including annual reports,
year-end financial statements, interim financial statements and related announcements. This ensures
that all interested groups, be it major shareholders, minor shareholders, individuals, juristic persons,
individuals or institutional investors, and other stakeholders shall receive important information that is
timely and adequate to correctly understand the Company.
The Board of Directors arranges for the annual general meeting of shareholders to be held
within 4 months after the end of the financial year. Shareholders are informed of the meeting agenda
through the Stock Exchange of Thailands communication channels at least 1 month in advance.
Notice of the General Meeting of Shareholders, a complete agenda and all relevant information are
sent to shareholders at least 7 days before the scheduled date of meeting to provide shareholders
sufficient time for effective consideration and decision-making on how to vote on the matters
proposed by the Board of Directors for approval at the meeting.
Moreover, the Company facilitates shareholders who are unable to attend the meeting in
person by giving them the option to appoint an Independent Director, a Corporate Secretary Officer or
other person to act as a proxy.

11.3 Rights of Various Groups of Stakeholders
The Company has a policy to protect the rights and benefits of all stakeholder groups, aside
from shareholders, include investors, employees, business partners, external auditors, presses,
securities analysts, related government organizations and communities where the Company operates
its business. The Board of Directors thoroughly considers the legal rights of each group and ensures
that their rights are carefully protected and enforced. In addition, the Company has a policy to promote
cooperation with stakeholders to foster strong ties and maintain business stability.
In operating its business, the Companys policy is to treat customers with responsibility,
honesty, fairness and transparency, understanding that the customers require products and services
of good quality and appropriate prices. In conduct with suppliers, the Company considers them
business partners, and business decisions are based on product quality, price, timeliness in product
delivery and trust. Moreover, to maintain equality and fairness in conducting business, the Company
does not reveal confidential information of business partners to other parties.

11.4 Shareholders Meeting
At the shareholders meeting, the Company has a policy and guideline in organizing
shareholders meetings to ensure fair treatment of all shareholders at the meeting, convenience in
attending the meeting and opportunities for shareholders to raise questions and express their opinions
on the subject of discussion on the agenda.
In organizing shareholders meetings, the Company ensures that the meeting procedures
comply with the laws, from closing of the shareholders registrar, notifying the date of the shareholders
meeting, sending documents and the agenda, preparing complete documents for the meeting to
support the shareholders decision-making, to preparing minutes of the meeting that are fully noted,
including all significant questions and opinions. At the 2004 Annual General Meeting of Shareholders,
the Companys Chairman, Vice Chairman, Chairman of the Audit Committee, Audit Committee
Members, President, Chairman of the Executive Board, Chief Operating Officer and Chief Financial
Officer were all present.

11.5 Leadership and Vision
The Board of Directors is responsible for the Companys business plans and operating
performance by monitoring that the Company achieves its business goals through set short-term and
long-term strategies. The Companys Board of Directors and Executive Board are composed of highly
qualified persons with knowledge and related expertise to support the Companys operations, achieve
determined goals and maximize shareholders benefits.
With extensive experience in the agro-industrial and food industry, the Companys Chairman
has a vision to develop sustained growth for Thailands agro-industrial and food industry as well as
continuously improve the organization to be able to compete on an international level.
The Board of Directors is responsible for ensuring that the Company formulates a long-term
business strategy which reflects business trends, vision, short-term business plans and measurable
goals. The Board of Directors approves policies and important business plans which are presented by
the management, ensures clear communication so that the plans are effectively carried out, and
regularly reviews policies, operating performance and internal control.
In the past year, the Board of Directors has performed their duties to the best of their abilities
for the growth and stability of the Company. The Board of Directors has monitored transactions which
may cause conflict of interest with caution and good faith to maximize the benefits of the Company,
shareholders and stakeholders. The Board of Directors considers various matters at the monthly Board
of Directors Meeting, and in the case where a resolution must be made concerning a transaction with
potential conflict of interest, the Director with vested interest shall not attend the meeting and vote on
the matter.
The Board of Directors has set a policy to invest only in the Companys core business or
businesses related to the core business. Representatives are appointed to assume executive
directorship positions in the subsidiaries to monitor the subsidiaries management, ensuring that it is in
line with the Companys policy. At the monthly meetings held with its subsidiaries, the Company
reviews the operating performance of its various subsidiaries as well as collectively develops business
plans and goals for the following month.
In 2004, the Company faced many obstacles in the industry. The Executive Board including
the President, Chief Operating Officer, Chief Financial Officer and top management dedicated their
time and effort to develop strategies and execute plans in order for the Company to turn the crisis into
an opportunity, ensuring that the Company maintains its competitive edge in the industry and
successfully weathered the crisis.

11.6 Conflicts of Interest
To prevent conflicts of interest, the Board of Directors has taken into consideration the
structure and composition of the Board of Directors and various sub-committees in accordance with
principles of good corporate governance as well as encouraged employees at all levels to conduct
business with honesty and high ethical standards.
The Company has guidelines for employees to perform their duties with honesty and fairness
in adherence to various laws. Employees should not allow personal gain to surpass their obligation to
the Company, including using inside information for personal gain.
In the case of transactions with potential conflict of interest, the Company and its subsidiaries
apply the same procedures as entering into transactions with outside parties, disclosing information
about the related transaction to ensure transparency. In approval of the related transaction, the person
with vested interest in the transaction has no voting right.

11.7 Business Ethics
The Company is in the process of developing a Code of Conduct as a guideline for
management and employees at all levels to perform their duties according to the Companys business
plans with honesty, responsibility, discipline and fairness to the Company, all stakeholder groups and
the general public. Employees are required to adhere to the Code of Conduct as well as the Company
s rules and regulations.
The Companys directors have performed their duties with care and honesty. The directors
must monitor the operations of the Company with sufficient knowledge and understanding of the
business. In performing their duties in good faith, the directors must protect the Companys interests
and comply with the Companys rules and regulations and related laws.
Directors and management have followed high ethical standards and have used careful
discretion in conducting business with concern for consumers safety and health, environmental
conservation for the benefit of society as a whole and development of new products and services with
high quality standards through the use of advanced technology which will ultimately benefit business
partners and consumers. Management and employees also realize the importance of creating an
organization with vision and strategy to ensure that the organization swiftly adapts to changes and
maintains sustainable growth, yielding the highest benefits to customers, shareholders, employees and
various stakeholders.
Furthermore, the Company realizes that the country and society have provided business
opportunities for the Company, therefore the Company holds it a duty to support activities that are
beneficial to society, including professional training, education, arts and religion, public welfare and the
environment. The Companys highest respects are to the monarchy. The Companys social
contributions comprise mainly of education projects and religious projects. Various activities in 2004
include the following:
Supporting Childrens Day activities organized by various organizations such as the

National Committee on Combating Trafficking in Women and Children and the
Sommanas Temple Youth Center by donating the Companys products
Donating funds to students in various universities to support the Reviving Mangrove

Forests Project to develop and conserve Thailands environment
Supporting the Information Technology for Water Resources and Agricultural

Development international conference and veterinarian and animal farming technical
conferences
Giving cash to support 23 Bangkok athletes who participated in the 2004 Olympics
Donating the Companys products to students of various institutions for their meals at
summer volunteer camps
Supporting Thai heritage activities at the Loy Kratong Festival in Sukhothai province
Donating funds and the Companys products to the Amateur Athletic Association of
Thailand
Distributing the Companys ready-to-eat cooked food products to the tsunami victims
and volunteers in the southern part of Thailand

11.8 Balance Provided by Non-executive Directors
The Board of Directors role in monitoring the Companys operations includes establishing a
management structure that is trustworthy and transparent. The structure of the Board of Directors
clearly states roles and responsibilities and prevents any single person or group of persons from
having unlimited authority. To provide balance of power, the Board of Directors which comprise 15
persons includes 4 Independent Directors, 5 Non-executive Directors and 6 Executive Directors. All
Independent Directors have the qualifications stipulated by the Stock Exchange of Thailand.
Independent Directors must be able to express independent opinion at the Board of Directors Meeting
to prevent conflict of interest.

11.9 Aggregation or Segregation of Power
In order to segregation of governance and responsibilities, the Board of Directors has clearly
defined its roles and responsibilities as well as the roles and responsibilities of the Audit Committee,
Executive Board and top management. Aside from stipulating that the position of Chairman of the
Board of Directors shall not be assumed by an Executive Director, the Company has appointed the
President and Executive Board, who both are not the Chairman of the company, to manage the
organization under the power assigned from the Board of Directors.

11.10 Remuneration of Directors and Management
The level and composition of directors and managements remuneration is reasonable and
sufficient to attract and retain qualified directors and management. Their remuneration is comparable
to similar positions in the same industry with consideration to experience, expertise, work dedication
and contribution to the Company. In case of there shall be any change of Directors remuneration, it
has to be approved in the shareholders meeting.

11.11 Board of Directors Meetings
The Company schedules Board of Directors Meetings in advance. In 2004, 12 Board of
Directors Meetings were scheduled. In every Board of Directors Meeting, the Chairman advocates
consideration of presented matters with transparency and allots sufficient time for management to
propose issues and the Board of Directors to thoroughly consider and provide opinions on those
issues.
The Companys regulations stipulates that a Board of Directors Meeting be held at least once
every 3 months, except where there is a special agenda, additional meetings may be held as
appropriate. Advance notice of the meeting is sent to the Board of Directors at least 7 days prior to the
meeting date. Written minutes of the meeting, with all relevant matters and opinions, are prepared and
properly kept at the head office of the Company.

11.12 Committees / Sub-committees
To achieve efficient management of the Companys operations in line with the Companys
policy and the highest objective of monitoring operations, the Company has instituted committees to
assist with the monitoring of various matters and help alleviate the obligations of the Board of Directors
in reviewing or considering the details of various important matters to the Company. The committees
may propose opinions and suggestions to the Board of Directors for approval, or may have decision-
making authority on behalf of the Board of Directors only on the boundaries set by the Board of
Directors. Committees that have been established by the Company include the Audit Committee,
Executive Board, Accounting Policy Sub-Committee and Corporate Governance Sub-Committee. In
addition, the Company is in the process of setting up the Nominating and Remuneration Committee.

11.13 Internal Audit and Internal Control System
The Board of Directors has assigned the duty of conducting business to the Executive Board
and top management under the proper and sufficient internal control environment established by the
Company. A part of the internal audits plan covers the assessment of the sufficient and efficient of the
internal control system that has to be systematically and regularly performed. The Head of the Internal
Audit office has to report to the Audit Committee the audit results every 6 months. The Board of
Directors shall annually assess the sufficient and appropriate of the overall internal control.

11.14 Report from the Board of Directors on the Preparation of
Financial Statements
The Board of Directors has prepared and disclosed financial statements in conformity with
accepted accounting principles and rules and regulations set forth by the Securities and Exchange
Commission, to which the Company has consistently applied in presenting operating and financial
information to shareholders and investors. The Board of Directors has established an effective system
of internal control and internal audit to ensure that financial recording is complete and accurate. In
addition, the system of internal control and internal audit will reduce business risk by preventing loss
and damage to the Companys assets caused by fraud as well as ensuring the correctness and
reliability of the financial reports.

11.15 Investor Relations
CPF established the Investor Relations Office in 1995 to foster relations between the
Company and investors, securities analysts and related government organizations. Its objective is to
ensure that stakeholders have good understanding of the Company and receive information and news
that is accurate, complete, timely and in compliance with related rules and regulations.
Activities of the Investor Relations Office include meetings with securities analysts and
investors in person or communication via phone, mail, fax and email; analyst and shareholder visits to
operating facilities; information disclosure through various communication channels including the
Companys website; participation in various activities with the objective of disclosing information to
investors that are arranged by various securities companies and the Stock Exchange of Thailand both
locally and abroad; and meetings with securities analysts, media and investors to discuss operating
results. The Companys top management including the President and Chief Operating Officer give
importance to the activities and participate if they dont have prior important obligations.
In 2004, besides preparing information to be distributed to concerned parties and acting as
an information center for shareholders, investors and securities analysts, the Investor Relations Office
organized the following activities:
Organized plant visits for shareholders and investors to increase their understanding of
the Companys integrated chicken business. Explanations were provided by the
President and/or top management.
Organized analyst meetings which included visits to operating facilities to discuss

operating results and industry trends. The President and top management provided
information and answered questions.
Coordinated with the Public Relations Department which is responsible for

communicating with the media to organize meetings with both local and international
media to discuss the Companys operating results and answer questions. Top
managements were present to answer questions. In addition, plant visits were organized
for the media to increase their understanding of the Companys operations.
Participated in the Stock Exchange of Thailands Provincial Tour to provide company

information to investors in the provinces.
Participated in activities arranged overseas by securities companies to provide company

information to international investors.

12. Investment and Management Policy
After amalgamating the agro-industrial businesses under the Charoen Pokphand Group with
the Company in 1999, CPF managed its business according to business lines and stipulated a policy
to invest only in its core business or businesses related to the core business. Representatives are
appointed to assume executive directorship positions in the subsidiaries to monitor the subsidiaries
management, ensuring that it is in line with the Companys policy. At the monthly meetings held with
its subsidiaries, the Company reviews the operating performance of its various subsidiaries as well as
collectively develops business plans and goals for the following month.

13. Report of the Audit Committee
The Audit Committee had been appointed by the Board of Directors of CPF on December 18,
2002. There comprise 4 independent directors, with Pol Gen. Pow Sarasin as Chairman of the Audit
Committee. The other 3 members are Mr. Arsa Sarasin, Prof. Dr. Athasit Vejjajiva and Mr. Thanong
Termpangpun. Their 3-year term commenced on December 24, 2002.
During the year 2004, significant activities that the Audit Committee had done under the
power and responsibilities assigned by the Board of Directors as follows:
1. Review quarterly and year-end financial statements, which include assessing compliance
to the accounting principles used, the accounting policies adopted, as well as the
information disclosed in the financial statements.
2. Review transactions and disclosure of information during the year on connected
transactions, as well as those transactions which may cause conflicts of interest.
3. Review the report on internal audit results, by which the internal auditors reported during
the year as well as review the sufficiency and suitability of the internal control system.
4. Meet with the external auditor to discuss their independence, issues or concerns found
from their audit, including the opinions on the Companys internal control.
5. Review the Companys compliance with the law and other related regulations.
6. Consider the proposal of appointing the auditors and their remuneration for the year
2005. The Audit Committee has proposed to the Board of Directors to appoint
Mrs.Sudchit Boonprakob, Ms.Kalyarat Chaivaropongsa, and Ms.Nittaya Chetdhotiros of
KPMG Phoomchai Audit Limited to be the Auditors of the Company for the year 2005,
with remuneration of THB 2,630,000.
The meetings of Audit Committee have been constituted 11 times to perform their duties
mentioned above. Their reports have already been submitted to the Board of Directors for
considerations.

For and on behalf of the Audit Committee

Pol.Gen. Pow Sarasin
Chairman of the Audit Committee
March 1, 2005

14. Transactions with Related Companies
During the year 2004 the Company entered into transactions with related persons, as
disclosed in Note 5 of the notes to financial statements as of December 31, 2004. These transactions
follow normal trading practices, in accordance with general market price. In the case there is no
market price, the transactions follow contracts which have been agreed upon. The audit committee is
of the opinion that these related transactions are reasonable. Related transactions during the year
2004 between the Company and parties which may have conflicts of interest can be summarized as
follows:
Accounts Receivable
As of December 31, 2004, the Company had accounts receivable arising from transactions
with associated and related companies worth THB 1,275 million, or 14% of total accounts receivable.
Accounts Payable
As of December 31, 2004, the Company had accounts payable arising from transaction with
associated and related companies worth THB 546 million, or 11% of total accounts payable.
Sales
During 2004, the Company sold products to associated and related companies based on the
price list. The value of these transactions ending December 31, 2004 was THB 3,987 million, or 4% of
total sales.
Purchase of Raw Materials
During 2004, the Company purchased raw material from associated and related companies
based on the price list. The value of these transactions ending December 31, 2004 was THB 12,268
million, or 15% of total cost of sales.
Other Income
In 2004, the Company received other income from dividend, sales of fixed assets, training and
seminar fees, as well as from leasing land and property to associated and related companies, in the
amount of THB 72 million, or 0.08% of total revenues.
Rental and Service Charges
The Company rented assets from associated and related companies according to the rates
set by the owner. The value of these transactions ending December 31, 2004 was THB 509 million, or
6% of total selling and administrative expenses.
Technical Service Fee
In 2004, the Company paid Charoen Pokphand Group Co., Ltd. for technical service
concerning animal feed ingredients worth THB 179 million, or 0.2% of total cost of sales.
Insurance Premium
The Company paid insurance premiums to Allianz C.P. Insurance Company Limited and
Allianz C.P. Life Insurance Company Limited, which are CPFs associated company and related
company consecutively, worth THB 174 million. The sum was 2% of the Companys total selling and
administrative expenses. The insurance premium rates were standards set by the insurers.
Other Expenses
In 2004, the Company had other expenses, which was the software application service fee, to
related companies of THB 14 million.
Other
In January 2004, a subsidiary purchased the common shares of C.P. Standart Gida Sanayi ve
Ticaret A.S. from Charoen Pokphand Development (Turkey) Limited (CPD), a related company,
comprising 16,898,568,000 shares with a total value of USD 22 million (84.49% of shareholding). The
subsidiary has already paid CPD for the share purchase in 2004.
In September 2004, the Board of Directors of Bangkok Livestock Processing Company
Limited (BLP) and CPF resolved to approve BLP entering into an agreement with Star Marketing
Company Limited (STAR) (a subsidiary of Charoen Pokphand Group Company Limited). Under the
agreement, BLP shall pay STAR approximately THB 40 million for the purchase of machines,
equipment, vehicles and others and the annual fee at 2% of total sales deriving from this business in
exchange for the right to use all current trademarks of STAR and product research and development
services for the period of 3 years. The acquisition is completed in January 2005.

15. Measures to Govern Related Transactions
For transactions that occur on the normal course of business, the Company applies the same
approval procedure for both related parties and outsider. In the case of other related transactions, the
Audit Committee is assigned to review whether they are conducted on arms length basis. In this
regard, the Audit Committee may seek an opinion from an independent appraiser prior to making
recommendation to the Board for consideration and approval.

16. The Auditors Remunerations
Mrs.Sudchit Boonprakob - C.P.A. (Thailand) Registration No. 2991, Ms.Kalyarat Chaivaropongsa
- C.P.A. (Thailand) Registration No. 3460, and Ms.Nittaya Chetdhotiros - C.P.A. (Thailand) Registration
No. 4439 of KPMG Phoomchai Audit Limited was CPFs Auditors for the year 2004. The service fees
charged to CPF and subsidiaries in 2004 were as follows:

CPF Subsidiaries
16.1 The audit fees on companys accounts THB 2,430,000 THB 14,727,359
16.2 Others audit fee on special projects THB 560,000 THB 450,000

Note : The above fee excluded out-of-pocket expenses to be reimbursed by the Company.

17. Litigation
The Company is involved only with routine litigation arising from normal business practices.
The Company is not party of legal cases, which the Company is a defendant in lawsuits amounting to
more than 5% of shareholders equity as of December 31, 2004, which affect business operations of
the Company but the amount of the loss cannot reasonably be determined, and that not arising from
normal business practices of the Company.

cpfe1.doc 0

CHAROEN POKPHAND FOODS PUBLIC COMPANY LIMITED
AND SUBSIDIARIES

Financial Statements
For the years ended December 31, 2004 and 2003
and
Report of Certified Public Accountant
cpfe1.doc 1

REPORT OF CERTIFIED PUBLIC ACCOUNTANT

To The Shareholders of Charoen Pokphand Foods Public Company Limited

I have audited the accompanying consolidated balance sheets of Charoen Pokphand Foods Public
Company Limited and its subsidiaries as at December 31, 2004 and 2003, and the related consolidated
statements of income, changes in shareholders equity and, cash flows for the years then ended. I have
also audited the balance sheets of Charoen Pokphand Foods Public Company Limited as at December 31,
2004 and 2003, and the related statements of income, changes in shareholders equity and cash flows for
the years then ended. The management of Charoen Pokphand Foods Public Company Limited is
responsible for the correctness and completeness of information presented in these financial statements.
My responsibility is to express an opinion on these financial statements based on my audits. As described
in Note 2 to the financial statements, I have not audited the financial statements of foreign subsidiaries
included in the preparation of consolidated financial statements. The financial statements of the foreign
subsidiaries and associated companies used as the basis for consolidating those subsidiaries and
recording the investment in those associated companies by the equity method as at December 31, 2004
and 2003 and for the years then ended reflect the total of the subsidiaries assets and the investment in
associated companies by the equity method of Baht 8,981 million and Baht 5,769 million, respectively;
the subsidiaries total revenues of Baht 14,057 million and Baht 6,145 million, respectively; and the
equity share in the associated companies profit/(loss) of Baht 332 million and Baht (76) million,
respectively. The Companys financial statements reflect the investment in subsidiaries and associated
companies as at December 31, 2004 and 2003 recorded by the equity method of Baht 5,707 million and
Baht 3,306 million, respectively and the equity in net profit/(loss) of the subsidiaries and associated
companies for the years then ended of Baht 337 million and Baht (148) million, respectively. The
financial statements of foreign subsidiaries and associated companies have been audited by other auditors
whose reports have been provided to me, and my report, insofar as it relates to these amounts included in
the consolidated financial statements and the Companys financial statements, is based solely on these
reports of the other auditors.

I conducted my audits in accordance with generally accepted auditing standards. Those standards require
that I plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. I believe that my audits and the reports of the other auditors as described in the
first paragraph provide a reasonable basis for my opinion.
cpfe1.doc 2

In my opinion, based on my audits and the reports of other auditors as described in the first paragraph,
the financial statements referred to above present fairly, in all material respects, the financial positions of
Charoen Pokphand Foods Public Company Limited and subsidiaries and of Charoen Pokphand Foods
Public Company Limited as at December 31, 2004 and 2003, and the results of their operations and their
cash flows for the years then ended in conformity with generally accepted accounting principles.

(Sudchit Boonprakob)
Certified Public Accountant
Registration No. 2991

KPMG Phoomchai Audit Ltd.
Bangkok
February 28, 2005
AND SUBSIDIARIES
BALANCE SHEETS
DECEMBER 31, 2004 AND 2003
ASSETS
Notes 2004 2003 2004 2003
CURRENT ASSETS
Cash and cash equivalents 1,544,073 1,318,296 179,778 224,870
Short-term investments 317,338 207,525 - 388
Accounts receivable-trade and others:
Subsidiaries 5 - - 1,089,420 643,125
Associated and related companies 5 1,275,225 1,472,864 330,153 268,070
Non-related companies 7,983,810 6,568,939 1,623,023 1,368,068
Less allowance Ior doubtIul accounts 6 (252,424) (220,798) (14,810) (20,673)
Short-term loans and accrued
interest income Irom subsidiaries 5, 7 - - 33,869 76,460
Current portion oI long-term loans
to subsidiaries 2, 5, 7 - - 1,511,167 1,725,000
Inventories - net 5, 8 18,307,310 18,324,484 3,695,027 3,473,187
Other current assets:
Value added tax receivables 126,842 288,338 30,190 -
Assets held Ior sale 2, 11 - 1,235,228 - -
Advance payment Ior goods 55,206 584 - -
Prepaid expenses 277,317 222,141 227,001 74,785
Others 400,568 189,614 54,446 41,422
Total Current Assets 30,035,265 29,607,215 8,759,264 7,874,702
In Thousand Baht
Consolidated The Company Only
The accompanying notes are an integral part oI these Iinancial statements.
3
AND SUBSIDIARIES
BALANCE SHEETS
ASSETS (Continued)
Notes 2004 2003 2004 2003
NON-CURRENT ASSETS
Investments at equity:
Subsidiaries 9 - - 25,631,380 23,414,308
Associated companies 9 5,983,465 5,256,415 717,577 589,245
Other investments:
Related companies - at cost - net 9 2,431,384 2,282,339 868,402 769,808
Land held Ior Iuture project
Held at revalued amount 10 1,410,617 1,410,617 87,736 87,736
Held at cost 40,074 40,074 - -
Long-term loans to subsidiaries - net
oI current portion 5, 7 - - 3,273,251 4,313,677
Property, Plant and Equipment 10, 11, 16 31,078,206 24,684,136 12,685,264 7,792,396
Intangible Assets 5, 12 (569,041) (61,278) 8,321 6,979
OTHER NON-CURRENT ASSETS
DeIerred tax assets 22 1,603,458 1,311,025 1,080,209 1,067,942
Prepaid income tax 80,751 50,768 10,365 -
Cash restricted in use 42,403 21,553 - -
Others 81,408 117,956 41,672 30,781
Total Non-Current Assets 42,182,725 35,113,605 44,404,177 38,072,872
TOTAL ASSETS 72,217,990 64,720,820 53,163,441 45,947,574
In Thousand Baht
4
AND SUBSIDIARIES
BALANCE SHEETS
Notes 2004 2003 2004 2003
CURRENT LIABILITIES
Bank overdraIts and short-term loans
Irom Iinancial institutions 13 12,417,040 14,126,484 2,233,341 2,036,251
Accounts payable - trade and others:
Subsidiaries 5 - - 198,325 672,655
Associated and related companies 5 545,580 880,692 160,153 241,824
Non-related companies 4,403,785 3,302,550 1,152,077 801,538
Current portion oI long-term debts:
Long-term loans 14 797,239 304,198 390,000 40,000
Debentures 15 3,780,000 5,180,000 3,780,000 5,180,000
Liabilities under Iinance lease 16 18,206 23,207 327 299
Other current liabilities:
Dividend payable 19 56,747 55,275 55,088 55,013
Income tax payable 375,623 227,900 - 34,396
Accrued interest expense 137,529 179,994 102,256 159,442
Others 1,507,403 1,095,121 119,483 185,771
Total Current Liabilities 24,039,152 25,375,421 8,191,050 9,407,189
NON-CURRENT LIABILITIES
Long-term loans - net oI current portion 14 6,740,368 1,340,672 5,987,600 410,000
Debentures - net oI current portion 15 7,190,000 4,970,000 7,190,000 4,970,000
Liabilities under Iinance leases 16 11,742 191,842 3,465 536
DeIerred tax liabilities 22 2,482,477 2,338,919 345,464 276,633
Excess oI net loss over investment
in subsidiary 9 - - 238,297 422,190
Others 125,833 - - -
Total Non - Current Liabilities 16,550,420 8,841,433 13,764,826 6,079,359
Total Liabilities 40,589,572 34,216,854 21,955,876 15,486,548
In Thousand Baht
LIABILITIES AND SHAREHOLDERS` EQUITY
5
AND SUBSIDIARIES
BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS` EQUITY (Continued)
Notes 2004 2003 2004 2003
SHAREHOLDERS` EQUITY
Share capital - common shares
Baht 1 par
Authorized share capital
8,206,664,000 shares in 2004 and 2003
Issued and Iully paid - up share
capital 5,727,562,476 shares in 2004
and 5,718,532,611 shares in 2003 17, 18 5,727,562 5,718,533 5,727,562 5,718,533
Cash receipt Irom share subscriptions 18 1,160 36,056 1,160 36,056
Paid-in capital:
Premium on share capital 18 11,012,752 10,985,674 11,012,752 10,985,674
Revaluation increment in land 5, 10 1,277,483 1,290,834 1,277,483 1,290,834
Revaluation Irom equity in
associated company 9 153,880 153,880 153,880 153,880
Revaluation increase Irom
changes in available-Ior-sale
investment valuation - Company`s
portion 5 668,709 567,183 668,709 567,183
Change in translation oI Iinancial
statements 5 415,517 186,524 415,517 186,524
Retained earnings:
Appropriated Ior legal reserve 20 820,666 820,666 820,666 820,666
Unappropriated 11,850,536 11,422,376 11,850,536 11,422,376
Total 31,928,265 31,181,726 31,928,265 31,181,726
Less share capital held in treasury
328,820,600 shares in 2004 and
in 2003 - at cost (720,700) (720,700) (720,700) (720,700)
Shareholders' equity oI the Company-net 31,207,565 30,461,026 31,207,565 30,461,026
Minority interest 420,853 42,940 - -
Total Shareholders` Equity 31,628,418 30,503,966 31,207,565 30,461,026
TOTAL LIABILITIES AND
SHAREHOLDERS` EQUITY 72,217,990 64,720,820 53,163,441 45,947,574
In Thousand Baht
6
AND SUBSIDIARIES
STATEMENTS OF INCOME
Notes 2004 2003 2004 2003
REVENUES
Net sales 5 91,790,199 83,108,742 24,953,245 22,790,310
Service income 7,941 - - -
Equity in net proIit:
Subsidiaries and associated companies 5 - - 2,530,468 2,285,558
Associated companies 5 720,645 510,658 - -
Other income:
Gain on exchange rate - net oI
premium cost - 258,769 8,958 -
Gain on disposal oI investments 52,516 307,093 67 1,369
Interest income 5 22,063 12,771 225,632 425,731
Dividend income 5 51,581 108,525 - -
Others 5 894,588 959,505 135,669 192,757
Total Revenues 93,539,533 85,266,063 27,854,039 25,695,725
EXPENSES
Cost oI sales 5 81,388,358 73,533,610 22,915,747 20,002,007
Selling and administrative expenses 5 9,161,469 7,719,432 2,237,179 1,802,856
Equity in net loss:
Subsidiaries and associated companies 5 - - 822,264 1,425,897
Associated companies 5 3,256 243,933 - -
Loss on impairment oI assets 2 - 937,902 - -
Loss on exchange rate and
premium cost 336,123 - - 169,715
Directors` remuneration 39,192 34,734 26,600 26,600
Total Expenses 90,928,398 82,469,611 26,001,790 23,427,075
FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
In Thousand Baht
7
AND SUBSIDIARIES
Notes 2004 2003 2004 2003
PROFIT BEFORE INTEREST
EXPENSES AND INCOME TAX 2,611,135 2,796,452 1,852,249 2,268,650
Interest Expenses 909,989 1,004,105 563,697 704,563
Gain on Net Monetary Position (15,058) - - -
Income Tax 22 435,863 (463,754) 52,931 (678,352)
Profit after Income Tax 1,280,341 2,256,101 1,235,621 2,242,439
Less Net Profit of Minority Interest (44,720) (13,662) - -
Net Profit from normal operation 1,235,621 2,242,439 1,235,621 2,242,439
Extraordinary items 23
Loss arising Irom Tsunami - net oI tax (51,602) - (51,602) -
Insurance recovery - net oI tax 52,500 - 52,500 -
Profit after Extraordinary Items 1,236,519 2,242,439 1,236,519 2,242,439
NET PROFIT 1,236,519 2,242,439 1,236,519 2,242,439
Earning per share:
ProIit Irom normal operation 0.23 0.42 0.23 0.42
Extraordinary items - - - -
Basic Earnings per Share (Baht) 21 0.23 0.42 0.23 0.42
Diluted Earnings per Share (Baht) 21 0.23 0.40 0.23 0.40
STATEMENTS OF INCOME (Continued)
In Thousand Baht
8
AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS
2004 2003 2004 2003
ACTIVITIES:
Net proIit 1,236,519 2,242,439 1,236,519 2,242,439
Reconciliations oI net proIit to net cash
provided by (used in) operating activities:
Depreciation and amortization - net 2,602,340 2,457,083 896,445 680,406
Allowance (reversal oI Allowance) Ior
doubtIul accounts 2,716 102,308 (5,863) 16,545
Allowance (reversal oI allowance) Ior loss
on decline in value oI inventories (57,559) (3,049) 57,213 (12,504)
Equity in net proIit - net:
Subsidiaries and associated companies - - (1,708,204) (859,661)
Associated companies (717,390) (266,725) - -
Loss on change in equity oI subsidiary - 15,858 - -
Loss on impairment in Iixed assets - 937,902 - -
Net gain on disposal oI Iixed assets
and long-term investments (63,665) (337,548) (5,897) (8,078)
Unrealized loss on exchange rate 5,841 4,100 15,635 170,398
Unrealized loss on interest rate swap 25,968 - 25,968 -
Decrease (increase) in deIerred income taxes - net (193,205) (1,054,878) 31,510 (865,373)
Net proIit Irom extraordinary items (898) - (898) -
Other provisions 32,410 - - -
Realized change in translation oI
Iinancial statements 104,367 - - -
Minority interest in net proIit oI subsidiaries 44,720 13,662 - -
Net proIit provided by operating activities beIore
changes in operational assets and liabilities 3,022,164 4,111,152 542,428 1,364,172
Decrease (increase) in operational assets:
Accounts receivable- trade and others (454,511) 373,728 (693,333) 1,265,488
Inventories 1,292,591 (4,282,178) (292,831) (793,099)
Accrued interest income Irom subsidiaries - - 42,591 18,264
Other current assets 84,479 109,855 (195,430) (49,763)
Other non-current assets (23,308) (66,363) (21,256) 2,564
Increase (decrease) in operational liabilities:
Accounts payable trade and others 116,606 (46,161) (231,484) 311,628
Income tax payable 145,830 (145,595) (35,018) 34,396
Other current liabilities 157,948 (184,502) (107,459) (40,168)
Net Cash Provided by (Used in) Operating
Activities 4,341,799 (130,064) (991,792) 2,113,482
CASH FLOWS FROM OPERATING
In Thousand Baht
13
AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS (Continued)
2004 2003 2004 2003
CASH FLOWS FROM INVESTING
ACTIVITIES:
Decrease in short-term loans to subsidiaries - - - 406,500
Decrease in long-term loans to subsidiaries - - 1,238,705 1,283,499
Proceeds Irom sales oI Iixed assets
and long-term investments 132,280 623,465 33,134 94,051
Proceeds Irom sales oI intangible assets - - 2,300 -
Proceeds Irom assets held Ior sale 1,058,705 - - -
Purchase oI property, plant and equipment (8,015,135) (5,782,331) (5,863,718) (2,936,079)
Purchase oI intangible assets (56,059) (140,186) (4,810) (731)
Purchase oI long-term investments (261,959) (251,406) (1,210,540) (1,362,097)
Dividend income received Irom
subsidiaries and associated companies 165,998 108,998 665,490 478,216
Cash paid Ior acquisition oI new subsidiary
net oI cash oI the subsidiary (505,492) (44,033) - -
Net Cash Used in Investing Activities (7,481,662) (5,485,493) (5,139,439) (2,036,641)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash receipt Irom new share capital issuance
and share subscription 3,184 2,517,320 1,224 2,517,320
Expenses relating to the issue
oI new share capital (12) (257) (12) (257)
Dividends payments oI the Company and
subsidiaries - net oI dividends paid to subsidiaries
(Ior shares held in treasury) and parent company (810,800) (1,186,986) (859,133) (1,257,543)
Increase (decrease) in short-term loans Irom
Iinancial institutions (2,108,224) 8,246,407 287,050 1,559,823
Increase in long-term loans Irom
Iinancial institutions 6,107,600 349,501 5,967,600 350,000
Proceeds Irom debenture 6,000,000 - 6,000,000 -
Settlement oI long-term loans (383,131) (239,337) (40,000) (40,000)
Settlement oI debenture (5,180,000) (3,850,000) (5,180,000) (3,850,000)
Decrease in liabilities under Iinance lease (27,101) (672,043) (990) (164)
Net Cash Provided by (Used in) Financing
Activities 3,601,516 5,164,605 6,175,739 (720,821)
In Thousand Baht
14
AND SUBSIDIARIES
2004 2003 2004 2003
Effect from exchange rate changes
in cash and cash equivalents 47,820 (25,888) - -
NET INCREASE (DECREASE)
IN CASH AND CASH EQUIVALENTS 509,473 (476,840) 44,508 (643,980)
CASH AND CASH EQUIVALENTS,
AT BEGINNING OF YEAR 1,198,350 1,675,190 96,386 740,366
CASH AND CASH EQUIVALENTS,
AT END OF YEAR 1,707,823 1,198,350 140,894 96,386
Supplemental Disclosures of
Cash Flows Information:
1. Cash and Cash Equivalents at end oI year
These consisted oI:
Cash on hand and cash deposits 1,544,073 1,318,296 179,778 224,870
Short-term investments 317,338 207,525 - 388
Bank overdraIts (153,588) (327,471) (38,884) (128,872)
Net 1,707,823 1,198,350 140,894 96,386
2. Cash Paid During the Year:
Interest expense 1,083,864 1,134,563 753,019 837,887
Income tax 509,506 761,405 66,182 145,870
In Thousand Baht
15
AND SUBSIDIARIES
3. Non-cash Transaction:
4. Cash paid Ior purchase subsidiary companies:
Cash on hand and at banks 363,465
Accounts receivable - trade and other net 525,675
Inventories 999,777
Property, plant, and equipment 1,245,354
227,467
Loans Irom Iinancial institutions (494,482)
Accounts payable - trade and others (468,390)
Other current liabilities and other liabilities (194,468)
Long-term loans (153,036)
Other non-current liabilities (109,401)
(299,694)
1,642,267
Less : Excess oI equity in net assets oI subsidiary over the investment (773,310)
Purchase price 868,957
Less : Cash and cash equivalents (363,465)
505,492
The Company and certain subsidiaries entered into Iinance lease agreements Ior purchasing Iixed assets totalling
approximately Baht 13 million in 2004 and Baht 61 million in 2003.
4.1 On January 29, 2004, and May 4, 2004, the Company`s subsidiary (CPFI) paid to Charoen Pokphand Development
(Turkey) Limited (CPD) Ior the acquisition price oI the common shares oI C.P. Standart Gida Sanayi ve Ticaret A.S.
(CPS). As a result, the company became a new subsidiary.
In Thousand Baht
Net Cash paid Ior Acquisition oI Subsidiary
Other current assets and other non-current assets
Net assets oI subsidiary - portion oI minority interest
As described in Noted 2, a Ioreign subsidiary (CP USA) sold substantial Iixed assets whereby the proceeds paid to
CP USA were oIIset with the assumption oI the liabilities amounting to Baht 169 million.
The Iollowing summarizes the details oI net assets oI the new subsidiary as oI the acquisition date:
Net assets oI subsidiary - portion oI the parent company
16
AND SUBSIDIARIES
The Iollowing summarizes the details oI net assets oI the new subsidiary as oI the acquisition date:
Cash on hand and in banks 11,727
10,523
Inventories 10,407
Long-term investments 21,615
Property, plant and equipment 38,679
4,141
Accounts payable - trade and others (10,151)
Other current liabilities (6,963)
(17,018)
Investment beIore acquisition date (7,200)
Purchase Price 55,760
Less : Cash oI subsidiary (11,727)
44,033 Net Cash paid Ior Acquisition oI Subsidiary
Accounts receivable - trade and others - net
Other current assets and other non-current assets
Less : Excess oI equity in net assets oI subsidiary over cost
4.2 In October 2003, the Company has acquired additionally the common shares oI Chanthaburi Aquaculture Farm
Company Limited (CAF) Irom other shareholders. As a result, the company has become a new subsidiary.
In Thousand Baht
17
AND SUBSIDIARIES
Revaluation
Increase (Decrease)
Revaluation Changes in Changes on
Share Capital Cash Receipt Premium Revaluation from Equity Available-for- Translation of Share Capital
issued and from Share on Share Increment in Associated sale Investment Financial Held in Retained Minority
paid-up Subscriptions Warrants Capital in Land Company Valuation Statements Treasury Earnings Interest Total
Balance as at January 1, 2004 5,718,533 36,056 - 10,985,674 1,290,834 153,880 567,183 186,524 (720,700) 12,243,042 42,940 30,503,966
Additional paid-in capital (Note 9) - - - - (13,351) - 101,526 - - 1,451 (25) 89,601
Change on translation of
financial statements - - - - - - - 228,993 - - 12,535 241,528
Net profit - - - - - - - - - 1,236,519 44,720 1,281,239
Cash dividend - net of dividend paid
to subsidiaries (for shares
held in treasury) (Note 19) - - - - - - - - - (809,810) (990) (810,800)
Issue of common shares 9,029 (36,056) - 27,078 - - - - - - - 51
Cash receipt from share
subscription (Note 18) - 1,160 - - - - - - - - - 1,160
Warrants (Note 18) - - - - - - - - - - - -
Minority interest in subsidiaries - - - - - - - - - - 322,041 322,041
Minority interest in subsidiary acquired
by Company - - - - - - - - - - (368) (368)
Balance as at December 31, 2004 5,727,562 1,160 - 11,012,752 1,277,483 153,880 668,709 415,517 (720,700) 12,671,202 420,853 31,628,418
In Thousand Baht
STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY CONSOLIDATED
The accompanying notes are an integral part of these financial statements.
9
AND SUBSIDIARIES
Revaluation
Increase (Decrease)
Revaluation from Changes in Changes on
Share Capital Cash Receipt Premium Revaluation from Equity Available-for- Translation of Share Capital
issued and from Share on Share Increment in Associated sale Investment Financial Held in Retained Minority
paid-up Subscriptions Warrants Capital in Land Company Valuation Statements Treasury Earnings Interest Total
Balance as at January 1, 2003 4,849,591 24,381 610,000 8,739,228 1,291,210 - (55,885) 814,547 (720,700) 11,185,269 14,542 26,752,183
Additional paid-in capital (Note 9) - - - - (376) 153,880 623,068 - - 536 240 777,348
Change on translation of
financial statements - - - - - - - (628,023) - - (2,801) (630,824)
Net profit - - - - - - - - - 2,242,439 13,662 2,256,101
Adjustment from change in equity
of subsidiary - - - - - - - - - - 19,452 19,452
Cash dividend - net of dividend paid
to subsidiaries (for shares
held in treasury) (Note 19) - - - - - - - - - (1,185,202) (1,784) (1,186,986)
Issue of common shares 868,942 (24,381) - 1,636,446 - - - - - - - 2,481,007
Cash receipt from share
subscription (Note 18) - 36,056 - - - - - - - - - 36,056
Warrants (Note 18) - - (610,000) 610,000 - - - - - - - -
Minority interest in subsidiary acquired
by Company - - - - - - - - - - (371) (371)
Balance as at December 31, 2003 5,718,533 36,056 - 10,985,674 1,290,834 153,880 567,183 186,524 (720,700) 12,243,042 42,940 30,503,966
In Thousand Baht
STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY CONSOLIDATED (Continued)
The accompanying notes are an integral part of these financial statements.
10
AND SUBSIDIARIES
Revaluation
Increase
(Decrease) Irom
Share Capital Cash Receipt Premium Revaluation Irom Equity Available-Ior- Translation oI Share Capital
issued and Irom Share on Share Increment in Associated sale Investment Financial Held in Retained
paid-up Subscriptions Warrants Capital in Land Company Valuation Statements Treasury Earnings Total
Balance as at 1anuary 1, 2004 5,718,533 36,056 - 10,985,674 1,290,834 153,880 567,183 186,524 (720,700) 12,243,042 30,461,026
Additional paid-in capital (Note 9) - - - - (13,351) - 101,526 - - 1,451 89,626
Changes on translation oI
Iinancial statements - - - - - - - 228,993 - - 228,993
Net proIit - - - - - - - - - 1,236,519 1,236,519
Cash dividend - net oI dividend paid
to subsidiaries (Ior shares
held in treasury) (Note 19) - - - - - - - - - (809,810) (809,810)
Issue oI common shares 9,029 (36,056) - 27,078 - - - - - - 51
Cash receipt Irom share
subscription (Note 18) - 1,160 - - - - - - - - 1,160
Warrants (Note 18) - - - - - - - - - - -
Balance as at December 31, 2004 5,727,562 1,160 - 11,012,752 1,277,483 153,880 668,709 415,517 (720,700) 12,671,202 31,207,565
STATEMENTS OF CHANGES IN SHAREHOLDERS` EQUITY - THE COMPANY ONLY
In Thousand Baht
11
AND SUBSIDIARIES
Revaluation
Increase
(Decrease) Irom
Share Capital Cash Receipt Premium Revaluation Irom Equity Available-Ior- Translation oI Share Capital
issued and Irom Share on Share Increment in Associated sale Investment Financial Held in Retained
paid-up Subscriptions Warrants Capital in Land Company Valuation Statements Treasury Earnings Total
Balance as at 1anuary 1, 2003 4,849,591 24,381 610,000 8,739,228 1,291,210 - (55,885) 814,547 (720,700) 11,185,269 26,737,641
Additional paid-in capital (Note 9) - - - - (376) 153,880 623,068 - - 536 777,108
Changes on translation oI
Iinancial statements - - - - - - - (628,023) - - (628,023)
Net proIit - - - - - - - - - 2,242,439 2,242,439
Cash dividend - net oI dividend paid
to subsidiaries (Ior shares
held in treasury) (Note 19) - - - - - - - - - (1,185,202) (1,185,202)
Issue oI common shares 868,942 (24,381) - 1,636,446 - - - - - - 2,481,007
Cash receipt Irom share
subscription (Note 18) - 36,056 - - - - - - - - 36,056
Warrants (Note 18) - - (610,000) 610,000 - - - - - - -
Balance as at December 31, 2003 5,718,533 36,056 - 10,985,674 1,290,834 153,880 567,183 186,524 (720,700) 12,243,042 30,461,026
STATEMENTS OF CHANGES IN SHAREHOLDERS` EQUITY - THE COMPANY ONLY (Continued)
In Thousand Baht
12
18
AND SUBSIDIARIES
Notes to Financial Statements
December 31, 2004 and 2003

1. GENERAL

Charoen Pokphand Foods Public Company Limited, the (Company), is registered in Thailand and
listed on the Stock Exchange of Thailand. The registered office of the Company is at 313 C.P.Tower
Silom Road Bangrak Bangkok 10500.

The principal activities of the Company and subsidiaries are operating an agro-industrial and food
business. The Companys business operations are located throughout Thailand and certain overseas
locations. The business is divided into 2 main business segments. The livestock business comprises
chicken, duck and pigs, while the aquaculture business consists of shrimp and fish. The two businesses
are each 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, to domestic distribution and exporting of the products. The Companys products can
be divided into 4 main categories, namely 1) animal feed, 2) animal breeder, 3) meat and foods sold in
the domestic market and 4) meat and foods sold in overseas markets.

2. BASIS FOR PREPARATION OF FINANCIAL STATEMENTS
AND CONSOLIDATED FINANCIAL STATEMENTS

The financial statements are presented in Thai Baht, in the Thai language, and in conformity with
generally accepted accounting standards in Thailand. Accordingly, the financial statements are intended
solely to present the financial position, results of operations and cash flows in accordance with
accounting principles and practices generally accepted in Thailand.

The financial statements are prepared under the historical cost convention except as disclosed in the
accounting policies.

The financial statements in English have been prepared by translating from the Thai language financial
statements, which are issued for domestic reporting purposes, for the convenience of the readers.

The consolidated financial statements include the accounts of the Company and the following
subsidiaries, of which more than 50% of capital shares are owned directly and indirectly by the
Company:

19
AND SUBSIDIARIES
Notes to Financial Statements (Continued)

Percentage of Direct and
Indirect Holdings as Compared
to Registered Share Capital
Type of Business 2004 2003
Livestock Business

1. Bangkok Livestock Processing Company
Limited (BLP) Broiler Integration 99.99 99.99
2. Bangkok Produce Merchandising Public Animal Feed Raw Material
Company Limited (BKP) Distribution and Broiler Integration 99.44 99.44
3. Bangkok Agro-Industrial Products
Public Company Limited (BAP)
Animal Feedmill and Livestock Farming 99.90

99.89
4. Bangkok Feedmill Company Limited (BFM)
Animal Feedmill and Livestock Farming
99.99 99.99
5. Charoen Pokphand Northeastern Public
Company Limited (CPNE)
99.61 99.61
6. Charoen Pokphand Industry Company Limited
(CPIN)
99.99 99.99
7. C.P. Agro Industry Company Limited (CPAI) Livestock Farming 99.99 99.99
8. C.P. Food Products Company Limited (CP FOOD)
Food Processing Plant 99.99 99.99
9. C.P. Merchandising Company Limited (CPM) Investment and International Trading 99.99 99.99
10. C.P. Food Industry Export Company Limited
(CPEX) Food Processing Plant 99.99 99.98
11. B.P. Feedmill Company Limited (BPF)
99.99 99.99
12. Bangkok Farm Company Limited (BKF)
Livestock Farming and Processing Plant
99.99 99.99
13. Universal Food and Marketing Company Limited Wholesale and Retail Food Products
(UF&M) and Fast Food Outlets 99.99 99.99
14. Rajburi Feedmill Company Limited (RBF)
99.99 99.99
15. Vee Food Products Company Limited (VFP) Food Processing Plant and Distribution
99.99 99.99
16. International Pet Food Company Limited (IPF) Pet Food Production and Distribution
99.99 99.99
17. C.P. Food Product (Shanghai) Co., Ltd. (CPF SH)
Thai Food Restaurant 100.00 100.00
18. C.P. Standart Gida Sanayi ve Ticaret A.S.(CPS)
Chicken Integration 84.49 -
19. Charoen Pokphand (USA), Inc. (CP USA)
Broiler Integration
(Operations wound up in March 2004)
99.95 98.89
20. CPF Europe S.A. (CPF EU) Importer and Distributor of Processed

Meat and Food Product 99.99 99.99
21. CPF Tokyo Co., Ltd. (CPF TK ) Importer and Distributor of Processed

Meat and Food Product 99.99 -
22. Fusion Foods Limited (FF) Importer and Distributor of Processed

Meat and Food Product 52.00 52.00

23 Thai Prawn Culture Center Company Limited
Shrimp Farming and Shrimp
(TPCC) Processing Plant 99.89 99.89
24. Klang Company Limited (KLANG) Shrimp Processing Plant
99.99
99.98
25. Chanthaburi Aquaculture Farm

Company Limited (CAF)
Shrimp Farming 99.99 99.99
26. Seafoods Enterprise Company Limited (SFE) Shrimp Processing Plant 99.99 99.99
27. Trad Prawn Culture Company Limited (TRAD) Shrimp Farming 99.91 99.91
20
AND SUBSIDIARIES

Percentage of Direct and
Indirect Holdings as Compared
to Registered Share Capital
Type of Business 2004 2003
28. Shrimp Improvement System (Thailand)

Company Limited (SIST) Shrimp Hatchery Business

51.00
-
29. Pokphand Aquatech Company Limited (PAT)
Aquatic Feed Production and

Distribution 99.99 99.99
30. Savee Farming Company Limited (SAVEE) Shrimp Farming 99.84 99.84
31. Aqua Agri Foods International, Inc. (AAFI) Importer and Distributor of Food

Product 99.99 99.99
32. Aqua Beauty, Inc. (AQB)
Importer and Distributor of Seafood

Products 99.99 99.99
33. C.P. Aquaculture (Beihai) Co., Ltd. (CPB)

Distribution and Aquaculture Farming 100.00 100.00
34. C.P. Aquaculture (Hainan) Co., Ltd. (CPH)

Distribution and Aquaculture Farming 100.00 100.00
Other Business

35. CPF Training Center Company Limited
(CPF TN)
Training Center Service Provider 99.99 99.99
36. CPF IT Center Company Limited (CPF IT)
Information Technology

Service Provider 99.99 99.99
37. BKP Holdings Limited (BKPH) Investment 99.44 99.44
38. CPF Investment Limited (CPFI) Investment 100.00 100.00

During the year, 2003, the Company and subsidiaries invested in share capital of subsidiaries as follows:

Equivalent to Million Baht
Share Capital /
Increase Share Investment/
Capital/Increase during the
Paid-up year as called
Name of Subsidiaries Invested in Countries Share Capital up/acquired

Newly incorporated
Aqua-Agri Foods International, Inc. (AAFI) United States of America 130 63
Universal Food and Marketing Company Limited
(UF&M) Thailand 80 40
International Pet Food Company Limited (IPF) Thailand 10 2
C.P. Aquaculture (Hainan) Co., Ltd. (CPH) Peoples Republic of China 125 125

Increase in share capital/
Increase paid-up share capital
C.P. Aquaculture (Beihai) Co., Ltd. (CPB) Peoples Republic of China 105 105
C.P. Food Product (Shanghai) Co., Ltd. (CPF SH) Peoples Republic of China 21 21
CPF IT Center Company Limited (CPF IT) Thailand 150 90
CPF Training Center Company Limited (CPF TN) Thailand 10 5
Chareon Pokphand (USA), Inc. (CP USA) United States of America 879 724

Newly acquired common shares
Chanthaburi Aquaculture Farm Company Limited
(CAF) Thailand 40 56
21
AND SUBSIDIARIES

During the year, 2004, the Company and subsidiaries invested in share capital of subsidiaries as follows:

Equivalent to Million Baht
Share Capital /
Increase Share Investment/
Capital/Increase during the
Paid-up year as called
Name of Subsidiaries Invested in Countries Share Capital up/acquired

Newly incorporated
CPF Tokyo Co., Ltd. (CPF TK) Japan 37 37
Shrimp Improvement System (Thailand)
Company Limited (SIST) Thailand 8 2

Increase in share capital
C.P. Food Product (Shanghai) Co., Ltd. (CPF SH) Peoples Republic of China 40 40
CPF Investment Limited (CPFI) British Virgin Islands 397 397
Vee Food Products Company Limited (VFP) Thailand 250 250
International Pet Food Company Limited (IPF) Thailand 57 57
Klang Company Limited (KLANG) Thailand 150 150
Seafoods Enterprise Company Limited (SFE) Thailand 100 100

Newly acquired common shares
C.P. Standart Gida Sanayi ve Ticaret A.S. (CPS) Turkey 1,091 869

During the fourth quarter of 2003, CP USA planned to sell the majority of its fixed assets and, therefore,
reduced the carrying value of the fixed assets to their net realizable value of Baht 1,235 million and
presented the assets as Assets held for sale under Other current assets in the balance sheet as at
December 31, 2003.

On March 12, 2004, CP USA sold the above fixed assets and a substantial portion of inventories to
Equity Group Eufaula Division, LLC., a company incorporated in United States of America which is a
non-related party, for approximately USD 41 million (equivalent to Baht 1,621 million). With this
CP USA received cash of approximately USD 37 million (equivalent to Baht 1,451 million) from the
purchaser who then assumed liabilities under finance leases equivalent to USD 4 million (equivalent to
Baht 169 million). The proceeds of the sale were used to reduce the outstanding debts payable to another
subsidiary (CPFI). In addition, CP USA and CPFI plan to repay their long-term loans to the Company
amounting to approximately USD 23.5 million (equivalent to Baht 957 million). The Company,
therefore, classified the portion of long-term loans to be repaid by CP USA and CPFI as Current portion
of long-term loans to subsidiaries under Current assets in the Companys balance sheet. During the
current year, the Company received repayment of USD 18.5 million (equivalent to Baht 758 million)
from the subsidiaries and the remaining current portion as at December 31, 2004 amounted to USD 5
million (equivalent to Baht 195 million).
22
AND SUBSIDIARIES

A summary of CP USAs financial statements as of December 31, 2004 and 2003 and for the year ended
December 31, 2004 and 2003 is as follows:

In Million Baht
2004 2003

Total assets 298 2,144
Total liabilities 595 2,502
Shareholders equity ( 297) ( 358)
Sales 1,582 4,537
Other incomes 46 146
Cost of sales 1,307 4,338
Selling and administrative expenses 209 402
Loss on impairment in fixed assets - 938
Interest expenses 58 163
Net profit (loss) 54 (1,158)

On November 12, 2003, the Board of Directors of a subsidiary (CPFI) resolved to purchase the common
shares of C.P. Standart Gida Sanayi ve Ticaret A.S. (CPS) from Charoen Pokphand Development
(Turkey) Limited (CPD), comprising 16,898,568,000 shares with a total value of USD 22 million
(84.49% of shareholding). The subsidiary paid CPD for an initial share purchase of 16,654,221,669
shares with a total value of USD 21,681,900 (equivalent to Baht 856 million) on January 29, 2004
(acquisition date) and the remaining 244,346,331 shares (1.22%) with a total value of USD 318,100
(equivalent to Baht 13 million) in May 2004. Consequently, CPFI has an 84.49% shareholding in CPS.

The Company recognized investments in CPS of a subsidiary in the Companys financial statements by
the equity method and the financial statements of CPS are used in preparation of consolidated financial
statements for the year ended December 31, 2004 using the purchase method since acquisition date. As
the consequence of acquiring the new subsidiary, the balances of the consolidated balance sheet and
statement of income for the year ended December 31, 2004 have significantly increased from those of the
comparative consolidated statement of income for the year ended December 31, 2003, as follows:

In Million Baht

Sales 9,867
Other income 53
Cost of sales 8,693
Selling and administrative expenses 1,088
Interest expenses 35
Gain on net monetary position 15
Income tax credit 10
Net profit of minority interest in subsidiary (16)
Net profit 87
Amortization of negative goodwill 65

23
AND SUBSIDIARIES

During 2004, the Board of Directors of the Company and subsidiaries resolved to invest in the following
newly incorporated companies:

1) Calibre Nature (M) Sdn. Bhd. was established during December 2004 in Malaysia to engage in
aquaculture business. The share capital of the new company will be MYR 5 million, equivalent to Baht
55 million, which will be wholly held by the Company. As at the balance sheet date the share capital has
not been called up.

2) CP-Yonekyu Company Limited to be established in Thailand to engage in processing meat
business utilizing Yonekyus technology production, research and development process. The share
capital of the new company will be Baht 200 million, of which 80.5% will be held by the Company and
19.5% will be held by Yonekyu Corporation, a company listed on the Stock Exchange of Tokyo. The
registration of incorporation is completed in January 2005.

3) Charoen Pokphand Foods (UK) Limited to be established in United Kingdom to engage in cold
storage business for producing ready-to-eat chilled products. The share capital of the new company will
be Pounds Sterling 1 million, equivalent to Baht 75 million, of which 100% will be wholly held by a
foreign subsidiary (CPF EU). The registration is expected to be completed in March, 2005.

Significant transactions between the Company and its subsidiaries have been eliminated in the
consolidated interim financial statements.

The Companys financial statements represent only the accounts of Charoen Pokphand Foods Public
Company Limited. The Company has recorded investments in subsidiaries and associated companies by
the equity method. The Company and the subsidiaries also recorded investments in associated
companies in the consolidated financial statements by the equity method.

The financial statements of subsidiaries and associated companies, which are included and used as the
basis in preparation of the consolidated financial statements and recording the investments by the equity
method in the consolidated financial statements and the Companys financial statements, have been
audited by the Companys auditor except as follows:

1) The consolidated financial statements for the year 2004 include the financial statements of eight
foreign subsidiaries and the investment in four foreign associated companies which have been audited by
other auditors. The total of the subsidiaries assets and the investment in associated companies recorded
by the equity method amounted to Baht 8,981 million as of December 31, 2004 and the subsidiaries total
revenues for the year ended December 31, 2004 amounted to Baht 14,057 million and the equity in net
profit for the year then ended of the associated companies amounted to Baht 332 million.

The consolidated financial statements for the year 2003 presented herein for comparative purpose include
the financial statement of six foreign subsidiaries and the investment in four foreign associated
companies which have been audited by other auditors. The total of these subsidiaries assets and the
investment in these associated companies recorded by the equity methods amounted to Baht 5,769
million as of December 31, 2003 and the subsidiaries total revenues and the equity in net profit/(loss) for
the year then ended of the associated companies amounted to Baht 6,145 million and Baht (76) million.

2) The Companys financial statements recorded the investment in the above subsidiaries and the
associated companies by the equity method amounting to Baht 5,707 million and Baht 3,306 million as of
December 31, 2004 and 2003, respectively. The equity in net profit/(loss) of the subsidiaries and
associated companies for the years then ended amounted to Baht 337 million and Baht (148) million,
respectively.
24
AND SUBSIDIARIES

3. THE COMPANY AND SUBSIDIARIESS RESULTS OF OPERATIONS

Before and subsequent to the 2003 financial year, the poultry industry has been effected by the outbreak
of Avian Influenza (Bird flu). However, during 2004 the Bird flu situation has been mitigated and is
now nearly back to normal with the relevant authorities closely monitoring for recurrence of the
outbreak. The financial statements reflect the managements current assessment of the impact of this
situations on the Companys financial statements and the consolidated financial statements for the years
ended December 31, 2004 and 2003. Actual results could differ from managements current assessments
and such differences could be material.

4. SIGNIFICANT ACCOUNTING POLICIES

4.1 Basis of consolidation

The consolidated financial statements of the Company comprise the Company and its subsidiaries and the
Company and subsidiaries interest in associated companies.

Subsidiaries

Subsidiaries are those entities controlled by the Company. Control exists when the Company has the
power, directly or indirectly through other subsidiaries, to govern the financial and operating policies of
an entity so as to obtain benefits from its activities. The financial statements of subsidiaries are included
in the consolidated financial statements from the date that control commences until the date that control
ceases.

Associates

Associates are those entities in which the Company has, directly or indirectly through subsidiaries,
significant influence, but not control, over the financial and operating policies. The consolidated
financial statements include the share of the total recognized gains and losses of associates on an equity
accounted basis, from the date that significant influence commences until the date that significant
influence ceases. When the Companys and subsidiaries share of losses is either equivalent to or
exceeds their interest in an associate, the recognition of losses is accounted for only equivalent to the
carrying amount of the investment. Further recognition of losses is discontinued except to the extent that
the Company and/or subsidiaries have incurred legal or constructive obligations or made payments on
behalf of an associate.

4.2 Use of estimates

In order to prepare financial statements in conformity with generally accepted accounting standards in
Thailand, management requires to make estimates and set assumptions on the reported amounts of assets,
liabilities and the disclosure of contingent liabilities. These estimates may impact revenues, expenses,
assets and liabilities. Actual outcomes may, therefore, differ from the estimates used.

25
AND SUBSIDIARIES

The estimates and underlying assumptions used in the preparation of these financial statements are
reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which
the estimate is revised if the revision affects only that period, or in the period of the revision and future
periods if the revision affects both current and future periods.

4.3 Foreign currencies

Foreign currency transactions

Transactions in foreign currencies are translated at the exchange rates ruling at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are reported
using the exchange rates ruling at that balance sheet date. Foreign exchange differences arising on
translation are recognized in the statement of income.

Non-monetary assets and liabilities denominated in foreign currencies that are stated at historical cost are
reported using the exchange rates ruling at the date of the transaction.

Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are
reported using the exchange rates ruling at the date that fair value was determined.

Foreign entities

The assets and liabilities of foreign entities, except for foreign entities in hyperinflationary economies,
are translated to Thai Baht at the exchange rates ruling at the balance sheet date. The revenues and
expenses of these foreign entities are translated to Thai Baht at rates approximating the exchange rates
ruling at the dates of transactions.

For foreign entities in hyperinflationary economies, prior to translating the financial statements of these
foreign entities the financial statements, including comparatives, are restated based on relevant price
indices at the balance sheet date to account for changes in the general purchasing power of the local
currency. Then their restated financial statements are translated to Thai Baht at the exchange rates ruling
at the balance sheet date.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are stated at exchange
rates ruling on transaction dates.

Foreign exchange differences arising on translation of foreign entities are recognized in a separate
component of equity until disposal of the investments.

Where monetary items, in substance, form part of the Companys net investment in a foreign entity, and
settlement of which is neither planned nor likely to occur in the foreseeable future, foreign exchange
differences arising on such monetary items and related hedges are recognized directly in a separate
component of equity until disposal of the investment.
26
AND SUBSIDIARIES

4.4 Cash and Cash Equivalents

Cash and cash equivalents includes cash on hand and cash balances, call deposits and highly liquid short-
term investments including bank overdrafts which are repayable on demand and form part of cash
management .

Cash restricted in use is shown as other non-current assets.

4.5 Trade and Other Receivable

Trade and other receivable (including balances with related parties) are stated at their invoice value
including debit and credit note amount less allowance for doubtful accounts.

The allowance for doubtful accounts is assessed primarily on analysis of payment histories and future
expectations of customer payments. Bad debts are written off after performing procedures prescribed in
the Revenue Codes.

4.6 Inventories

Finished goods, pigs, poultry and ducks for sale and raw materials are valued principally at the lower of
average cost and net realizable value.

Work in process is valued principally at the lower of cost and net realizable value.

Breeding pigs, poultry, duck and others and milking cows are valued at cost less amortization.

Chemicals, medicals and factory supplies are valued principally at the lower of average cost and net
realizable value.

4.7 Investments

Investments in associated companies presented separately in the consolidated balance sheet, and
investments in subsidiaries and associated companies presented separately in the Companys balance
sheet, are valued by the equity method.

Investments in marketable securities of non-subsidiaries and/or non-associated companies, held as
available-for-sale securities, are valued at fair value. Unrealized holding gain or loss, net of deferred tax, is
recorded as part of Shareholders Equity in the balance sheet and is reversed with relevant accounts
upon disposal and the gain or loss is recognized in the statement of income.

Investments in non-marketable securities of related companies and other companies that are non-
subsidiaries and/or non-associated companies, held as General investments are valued at cost less any
impairment loss.

Cost of investments sold during the years is calculated by the weighted-average method.
27
AND SUBSIDIARIES

4.8 Property, Plant and Equipment

Owned assets

Land used in operations and land held for future projects which were acquired before 1999 are stated at
revalued amount. The revaluation increment in land is shown net of deferred tax under Shareholders
Equity in the balance sheet. The losses on land devaluation are recorded as expenses in the statement of
income. Land acquired since the year 1999 is stated at cost.

However, land of certain subsidiaries acquired before the year 1999 is stated at cost totalling Baht 185
million. The subsidiaries did not revalue this land because the subsidiaries considered that the difference
between revaluation and cost is not significant to the overall financial statements.

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.

Assets held for sale are presented separately in the balance sheet at net realizable value.

Leased assets

Leases in terms of which the Company and subsidiaries substantially assume all or almost of the risk and
rewards of ownership from the lessor are classified as finance leases. Property, plant and equipment
acquired by way of finance leases is capitalized at the lower of its fair value at the inception of the lease
and the present value of the minimum lease payments , less accumulated depreciation and impairment
losses. Lease payments are apportioned between reduction of the lease liability and the finance charges,
which are allocated to periods during lease term so as to produce a constant periodic rate of interest on
the remaining balance of the liability for each period. Finance charges are charged directly to the
statement of income.

Revalued assets

Any increase in the value of assets, on revaluation, is credited net of deferred tax to the revaluation
reserve unless it offsets a previous decrease in value recognized in the statement of income. A decrease
in value is recognized in the statement of income to the extent it exceeds an increase in value previously
recognized, if any, in the revaluation reserve in respect of the same assets. Upon disposal any related
revaluation surplus is transferred directly from the revaluation reserve to retained earnings.

Depreciation

The Company and subsidiaries depreciate their property, plant and equipment by the straight-line method
over the estimated useful lives of the assets as follows:

Years
Utilities system 5 - 40
Buildings and construction 20 - 50
Building improvements and leasehold improvements 1 - 20
Water and electricity system 5 - 10
Machinery and equipment 4 - 15
Furniture, fixtures and office equipment 3 - 15
Vehicles 2 - 10

No depreciation is provided on freehold land. An asset under construction is depreciated when the asset is
ready for its intended use.
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AND SUBSIDIARIES

4.9 Impairment of Assets

The carrying amounts of the Companys and subsidiaries assets, other than inventories and deferred tax
assets subject specific guidance, are reviewed at each balance sheet date to determine whether there is
any indication of impairment. If any such indication exists, the assets recoverable amount is estimated.
Whenever the carrying amount of an asset exceeds its recoverable amount, its carrying amount is reduced
to the recoverable amount. Such reduction is recognized as an impairment loss in the statement of
income.

When a decline in the fair value of an available-for-sale financial asset has been recognized directly in
equity and there is objective evidence that the asset is impaired, the cumulative loss that had been
recognized directly in equity is removed from equity and the impairment loss on that asset is recognized
in the statement of income. The amount of the impairment loss is the difference between the acquisition
cost and recoverable amount of that financial asset.

Calculation of recoverable amount

The recoverable amount is the higher of the assets net selling price and value in use. In assessing value
in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the asset. For
an asset that does not generate cash inflows independently from other assets, the recoverable amount is
determined for the cash-generating unit to which the asset belongs.

Reversals of impairment

An impairment loss is reversed if there has been a change in the estimates used to determine the
recoverable amount to reflect an increase in the estimated service potential of an asset. An impairment
loss is reversed only to the extent that the assets carrying amount does not exceed the carrying amount
that would have been determined had no impairment loss been recognized for the asset in prior years. All
reversals of impairment losses are recognized in the statement of income.

4.10 Intangible Assets

Goodwill and Negative Goodwill

The excess of cost over equity in net assets of subsidiaries on the business acquisition date is recognized
as Goodwill which is stated at cost less accumulated amortization. Goodwill is amortized as expense
by the straight-line method over a period of twenty (20) years. The excess of equity in net assets of
subsidiaries over cost is recognized as Negative Goodwill which is stated at cost less accumulated
amortization. Negative Goodwill is amortized as income over the weighted-average of the remaining
useful lives of building and equipment of each subsidiary.

Goodwill and negative goodwill, net of accumulated amortization, are presented as Negative Goodwill -
net as a reduction from assets in the consolidated balance sheet. Amortization of goodwill as expense
and of negative goodwill as income are recorded as part of Other income in the statement of income.

Development Cost of Software Application

Development cost of software application is capitalized and treated as an intangible asset if the cost is not
an integral part of the related tangible asset. The cost is recognized when it is identifiable and can be
measurable reliably and it is probable that the future economic benefits that are attributable to the asset
will flow to the Company for more than one year. The cost is amortized on a straight-line basis over the
estimated useful life of ten (10) years.
29
AND SUBSIDIARIES

Expenditure that enhances or extends the performance of a development application beyond its original
specifications is recognized as an intangible asset and is amortized using straight-line basis over its
estimated useful life.

Software License

Software license is recorded as intangible assets and amortized by using the straight-line method over the
estimated useful life of ten (10) years.

Research and Development Cost

The cost of research and development is recorded in the statement of income as incurred. Intangible
assets are recognized in the balance sheet if it is probable that the future economic benefits that are
attributable to the asset will flow to the Company or subsidiaries over more than one year.

4.11 Trade and Other Payables

Trade and other payables (including balances with related parties) are stated at cost.

4.12 Interest-Bearing Borrowings

Interest-bearing borrowings are recognized at face value. The difference between proceeds and
redemption value is deferred and recognized in the statement of income over the period of the borrowing.
Attributable transaction charges are recognized as expenses in the period incurred.

4.13 Provisions

A provision is recognized in the balance sheet when the Company and subsidiaries have a present legal or
constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits
will be required to settle the obligation and a reliable estimate can be made of the amount of the
obligation. Where the effect of the time value of money is material, provisions are determined by using
the present value of the expenditure expected to be required to settle the obligation.

4.14 Revenue

Revenue, excluding value added taxes or other additional taxes charged to the selling price, is arrived
after deduction of trade discounts.

Sale of goods and services rendered

Revenue from the sale of goods is recognized in the statement of income when the significant risks and
rewards of ownership have been transferred to the buyer with the condition that the amount of revenue
and costs can be measured reliably and the economic benefits associated with the transaction will
probably flow to the Company and subsidiaries. Revenue from services rendered is recognized when the
amount of revenue reference to the stage of completion of the transaction at the balance sheet date can be
measured reliably. When the outcome of the transaction involving the rendering of services cannot be
estimated reliably, revenue is recognized only to the extent of the expenses recognized that are
recoverable.

Rental income

Rental income is recognized in the statement of income on a straight-line basis over the term of the lease.
30
AND SUBSIDIARIES

4.15 Expenses

Operating leases

Payments made under operating leases are recognized in the statement of income on a straight line basis
over the term of the lease.

Finance lease payments

Minimum lease payments are apportioned between the reduction of the outstanding liability and the
finance charge. The finance charge is allocated and charged to the statement of income for each period
during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the
liability.

Other income and expenses

Interest income is recognized in the statement of income on the accrual basis.

Dividend income is recognized in the statement of income when the shareholders right to receive
payment is established.

Interest expenses and similar costs are charged to the statement of income on the accrual basis.

4.16 Income Taxes

Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognized
in the statement of income except to the extent that it relates to items recognized directly in equity.

Current tax

Current tax is the expected tax payable on the taxable income for the year in accordance to the Revenue
Codes, using tax rates enacted or substantially enacted at the balance sheet date, and any adjustment to
tax payable in respect of previous years.

Deferred tax

Deferred tax account comprises deferred tax liabilities and deferred tax assets. Deferred tax liabilities are
the amounts of income taxes payable in the future periods in respect of taxable temporary differences,
which are differences between the carrying amounts of assets and liabilities in the balance sheet and their
tax bases. To this extent, a goodwill amortization which is not deductible for tax purpose, the initial
recognition of an asset or liability which is not arising from business acquisition and affects neither
accounting nor taxable profit, and interests in investment in subsidiaries to the extent that they will
probably not reverse in the foreseeable future are not accounted for temporary differences.

Deferred tax assets are the amounts of income taxes recoverable in the future periods in respect of
deductible temporary differences, which are differences between the carrying amounts of assets and
liabilities in the balance sheet and their tax bases. The deferred tax assets are recognized only to the
extent the future taxable profit will probably be available against the deductible temporary differences
can be utilized.

Deferred taxes are measured at the tax rates that are expected to apply to the period when the asset is
realized or the liability is settled, based on tax rates that have been enacted or substantively enacted by
the balance sheet date.
31
AND SUBSIDIARIES

4.17 Financial Instruments, Derivatives and Hedging

Financial assets and financial liabilities carried on the balance sheet include cash and cash equivalents,
investment in equity securities, trade receivable and payable, other accounts receivable and payable,
short-term loan, short-term borrowing and debentures. The accounting policies on recognition and
measurement of these items are disclosed in the respective accounting policies. The Company and
subsidiaries are exposed to market risks from changes in foreign exchange rates, interest rates and credit.
The Company and subsidiaries use derivative financial instruments to mitigate those risks, but have no
policy to speculate in or engage in the trading of any derivatives.

Hedge of future foreign currency transactions

The Company and subsidiaries have a policy to mitigate the foreign exchange risk by entering into
forward exchange contracts covering foreign currency monetary transactions. In this regard, all monetary
transactions are translated into Thai Baht at the rates prevailing at balance sheet date, adjusted by net
receivables/payables arising from the related forward exchange contracts and the remaining deferred
forward premium/discount. The related forward premium/discount is recorded as income/expense over the
forward contract term. The amortized forward premium/discount and gains /losses on the forward
exchange contracts covering foreign currency monetary transactions are offset against the related
exchange losses or gains on the foreign currency monetary transactions being hedged.

For the hedges of anticipated future transactions, the Company and subsidiaries recognize gains and
losses on forward exchange contracts and the related forward premium/discount as expenses or income in
the statements of income only when such transactions are completed.

Hedge of interest rates

Interest differentials under swap arrangements are accrued in proportion to the interval of time and
relevant underlying notional principal and recorded in the statement of income as adjustments to the
interest expense relating to the hedged loans.

4.18 Segment reporting

Segment information is presented in respect of both business and geographical segments. The primary
format, business segments, is based on the management and internal reporting structure.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that
can be allocated on a reasonable basis. Unallocated items comprise mainly income-earning assets and
revenue, interest-bearing loan and expenses, share of profits or losses of associated companies accounted
for by the equity method and corporate assets, expenses and income tax.

Segment capital expenditure represents the segment operating assets, while other assets comprise cash
and bank deposits, short-term investments, accounts receivable, inventories, long-term investments and
others.

32
AND SUBSIDIARIES

Business segments

The Company and subsidiaries, operations are divided into two business segments:

1. Aquaculture Business - involves aquaculture feed production, farming and food processing, of
which the products are for sale both domestically and overseas

2. Livestock Business - involves livestock feed production, farming, and food processing, of which
the products are for sale both domestically and overseas.

Geographical segments

Operating units of the Company and subsidiaries are mainly located in Thailand. Portions of products
produced from these units are exported directly or indirectly through foreign subsidiaries to external
customers mainly located in Europe, Asia and America. Certain operating units of subsidiaries are
located in foreign countries e.g. Peoples Republic of China and Turkey.

In presenting information on the basis of geographical segments, segment revenue is based on the
geographical location of customers. Segment assets are based on the geographical location of the assets.

4.19 Earnings per Share

Basic earnings per share is determined based on the net profit for the year divided by the weighted-
average number of shares outstanding during the year, net of shares held in treasury. The shares held in
treasury are common shares of the Company which are held by subsidiaries and almost of them were
acquired before the Company had control over these subsidiaries. Subsequent acquisitions were only
from the exercise of rights, which the subsidiaries received being shareholders.

Diluted earnings per share is determined based on the net profit for the year divided by the above basic
number of shares plus the additional weighted-average number of common shares which would be issued
during the year to the holders of common share equivalents. Common share equivalents are warrants
which offer the right to purchase the common shares of the Company at a price lower than the fair value
for each presented year. In this computation, the Company assumes that the exercise of the potentially
dilutive common shares had occurred at the later of the beginning of the year or the date the warrant was
issued.

5. TRANSACTIONS WITH RELATED COMPANIES

The Company has Charoen Pokphand Group Company Limited as a controlling shareholder and has
subsidiaries and associated companies as disclosed in Note 9. A portion of sales, other income,
purchases, selling and administrative expenses and interest expense arose from transactions with
subsidiaries, associated and certain related companies. These companies are related through major
common shareholdings and/or directorships with controlling or significant influence in making financial
and operating decisions. The price and benefit of the significant transactions with such companies are
based on general market prices or based on the price indicated in the agreements as summarized below;
33
AND SUBSIDIARIES

Type of Transaction Pricing Policy

Sales of goods The price list of the Company
Purchases of goods The price list of the suppliers
Fixed assets Fair value
Investment Fair value
Interest Income Source of fund cost plus administrative expenses
Rent and service fee Standard rates as specified by the lessors
Technical service fee Rate per quantity of feed production
Insurance premium Standard rates as specified by the insurers

Account balances of assets and liabilities as at December 31, 2004 and 2003, arising from trade, long-
term investments and other transactions with the subsidiaries, associated and related companies are
shown separately in the balance sheets. The components of loans and long-term investments are detailed
separately in Notes 7 and 9.

The balances of receivable and payable to subsidiaries, associated and related companies as at
December 31, 2004 and 2003 are as follows:

In Million Baht
2004 2003 2004 2003
Accounts Receivable
Subsidiaries
- Bangkok Produce Merchandising Public
Company Limited (BKP) - - 335 160
- Bangkok Livestock Processing Company
Limited (BLP) - - 166 21
- Seafoods Enterprise Company Limited (SFE) - - 131 56
- Thai Prawn Culture Center Company Limited
(TPCC) - - 87 11
- Vee Food Products Company Limited (VFP) - - 82 -
- B.P. Feedmill Company Limited (BPF) - - 61 73
- Bangkok Agro-Industrial Products Public
Company Limited (BAP) - - 55 37
- Klang Company Limited (KLANG) - - 44 5
- Charoen Pokphand Northeastern Public
Company Limited (CPNE) - - 36 87
- Bangkok Feedmill Company Limited (BFM) - - 36 54
- C.P. Agro - Industry Company Limited (CPAI) - - 27 37
- Pokphand Aquatech Company Limited (PAT) - - 12 53
- Rajburi Feedmill Company Limited (RBF) - - 11 36
- Others - - 6 13
Total - - 1,089 643
34
AND SUBSIDIARIES
In Million Baht
2004 2003 2004 2003
Associated and related companies
- S.W.T. Company Limited 268 244 95 89
- C.P. Intertrade (Korea) Co., Ltd. 179 180 - -
- Sea Farm Company Limited 118 80 30 53
- Ek-Chai Distribution System Company Limited 93 61 1 -
- Bangkok Aquaculture Farm Company Limited 85 141 62 92
- Allianz C.P. General Insurance Company
Limited 80 1 70 -
- Charoen Pokphand Intertrade Singapore
(Pte) Ltd. 77 120 - -
- C.P. Interfood (Thailand) Company Limited 67 184 17 1
- Star Marketing Company Limited 59 16 - -
- Chesters Food Company Limited 37 63 - -
- Siam Makro Public Company Limited 36 16 - -
- Nakhon Aquaculture Farm Company Limited 31 20 31 13
- C.P. Cambodia Co., Ltd. 18 35 - -
- Charoen Pokphand Intertrade South Africa
(Pty) Ltd. 14 164 - -
- Others 113 148 24 20
Total 1,275 1,473 330 268

Accounts Payable
Subsidiaries
Company Limited (BKP) - - 63 424
- Pokphand Aquatech Cmpany Limited (PAT) - - 36 26
- Bangkok Livestock Processing
Company Limted (BLP) - - 5 52
- Others - - 32 56
Total - - 198 673

- Charoen Pokphand Group Company Limited 84 314 36 109
- C.P. Interfood (Thailand) Company Limited 62 28 - -
- C.P. Poly - Industrial Company Limited 52 51 17 14
- K.S.P. Equipments Company Limited 41 15 16 3
- PT Centralpertiwi Bahari 35 39 - -
- C.P. Intertrade Company Limited 34 26 4 4
- Sea Farm Company Limited 31 17 - 2
- True Fleet Management Company Limited
(Formerly W 7 Rental Services
Company Limited) 31 18 17 8
- Kasetphand Industry Company Limited 30 61 16 14
- Arbor Acres Thailand Company Limited 9 25 4 16
- C.P. Vietnam Livestock Co., Ltd. 6 118 - -
- Bangkok Vet Drug Company Limited - 33 - 6
- Others 99 78 31 34
Total 546 881 160 242
35
AND SUBSIDIARIES

Sales and purchases, other income and expenses arose from transactions with subsidiaries, associated and
related companies for the years ended December 31, 2004 and 2003 are summarized as follows:

In Million Baht
2004 2003 2004 2003
Sales
Subsidiaries
Company Limited (BKP) - - 3,604 4,321
- Pokphand Aquatech Company Limited (PAT) - - 959 1,469
- B.P. Feedmill Company Limited (BPF) - - 951 938
- Charoen Pokphand Northeastern
Public Company Limited (CPNE) - - 646 511
- Bangkok Livestock Processing Company
Limted (BLP) - - 607 137
- C.P. Agro-Industry Company Limited (CPAI) - - 542 415
- Seafoods Enterprise Company Limited (SFE) - - 536 2,283
- Bangkok Agro-Industrial Products Public
Company Limited (BAP) - - 408 343
- Thai Prawn Culture Center Company Limited
(TPCC) - - 371 3,480
- Klang Company Limited (KLANG) - - 239 790
- Others - - 803 588

- Ek-Chai Distribution System
Company Limited 561 418 5 1
- C.P. Interfood (Thailand) Company Limited 488 577 23 -
- C.P. Intertrade Company Limited 371 83 2 8
- Star Marketing Company Limited 329 162 - -
- Charoen Pokphand Intertrade Singapore
(Pte) Ltd. 293 472 - -
- Charoen Pokphand Intertrade South Africa
(Pty) Ltd. 248 414 - -
- C.P. Intertrade (Korea) Co., Ltd. 205 318 - -
- Siam Makro Public Company Limited 164 143 - -
- Charoen Pokphand Group Company Limited 127 143 - -
- Chesters Food Company Limited 102 121 - -
- CP-Meiji Company Limited 60 56 49 49
- Others 555 602 171 105
Total 3,987 4,017 10,119 15,649
36
AND SUBSIDIARIES

In Million Baht
2004 2003 2004 2003
Purchases of raw materials
Subsidiaries
Company Limited (BKP) - - 4,253 3,419
- Pokphand Aquatech Company Limited (PAT) - - 957 623
- Others - - 492 377

Associated and related Companies
- C.P. Trading Co., Ltd 5,142 3,057 299 196
- Charoen Pokphand Group Company Limited 4,269 5,419 1,746 2,474
- C.P. Poly-Industrial Company Limited 470 - 163 -
- C.P. Interfood (Thailand) Company Limited 458 347 - -
- PT Centralpertiwi Bahari 398 232 - -
- C.P. Retailing and Marketing Company Limited 224 93 - -
- C.P. Vietnam Livestock Co., Ltd 119 163 - -
- C.P. Intertrade Company Limited 114 65 10 -
- Nakhon Aquaculture Farm Company Limited 93 79 6 -
- Arbor Acres Thailand Company Limited 65 152 13 58
- Bangkok Fisheries Company Limited 56 87 22 29
- C.P. Packaging Industry Company Limited 54 - 1 -
- Others 353 354 35 17
Total 12,268 10,581 9,381 8,332

Other income
Dividend income 52 80 665 478
Gain on disposal of fixed assets 3 5 2 2
Training and seminar service income 4 3 - -
Interest income on loans (See Note 7) - - 224 419
Rental income 13 10 5 4
Total Other Income 72 98 896 903
37
AND SUBSIDIARIES

In Million Baht
2004 2003 2004 2003
Expenses
Technical services fees
- Charoen Pokphand Group Company Limited 179 195 64 60
Insurance expenses
- Allianz C.P. General Insurance Company
Limited and Ayudhya Allianz C.P. Life Public
Company Limited 174 155 56 40
Software application service fee 14 4 45 27
Rental and service charges 509 506 207 254
Total Expenses 876 860 372 381

Equity in net profit of investment in
subsidiaries and associated companies 721 511 2,530 2,286

Equity in net loss of investment in
subsidiaries and associated companies 3 244 822 1,426

Others

During January 2003, a foreign subsidiary (CP USA) announced that it would be shutting down the
operations of its processing plant. Following to this decision, CP USA sold the majority of equipment of
the discontinued operation to another subsidiary (CP FOOD) for a sale price of USD 4 million and there
was not material gain or loss to CP USA.

During 2000, three subsidiaries sold their investments in marketable securities of a related company to
the Company at the closing price of the Stock Exchange of Thailand on the day before the date of Share
Purchase and Sale Agreement, totalling Baht 1,199 million. The three subsidiaries have a recorded gain on
sale of investments totalling Baht 902 million which was eliminated in the consolidated financial
statements and the Companys financial statements. On the same date, the Company assigned the
acquired marketable securities to another subsidiary as a payment in lieu of cash for the newly issued
shares of such foreign subsidiary at the same value of the acquisition price of those marketable securities.
The foreign subsidiary, sold a part of such investments to unrelated buyers with a cumulative gain on sale
to December 31, 2004 and 2003 of approximately Baht 487 million and 449 million, respectively, which
are presented in the consolidated statements of income for the years ended 2004 and 2003 amounting to
Baht 37 million and Baht 27 million, respectively.

In August 2003, a subsidiary (CPF IT) entered into an agreement with Infotech Vision Co., Ltd. (IFT),
which is a related company, relating to the services and the implementation of a human resource
management application. The fee for using this software application is divided into 2 parts. The first
part is a one time charge for the first implementation of the application amounting to approximately Baht
39 million. The second part is an annual charge at the rate of Baht 2,400 per employee totalling
approximately Baht 19 million per annum. The term of the agreement is for three (3) years, which is
automatically renewed if the subsidiary does not cancel the agreement. As at December 31, 2003, the
subsidiary has paid the entire software application fee and presented this as part of Intangible Assets.

In the same month, another subsidiary (CPH) entered into an agreement to lease a feedmill factory
including various machinery and equipment of Hainan Chia Tai Animal Husbandry Co., Ltd., which is a
related company, at the annual lease of RMB 5.06 million (equivalent to Baht 24.2 million). The term of
the agreement is for five (5) years and the lessee has an option to renew the lease at the end of the lease
period.
38
AND SUBSIDIARIES

In October 2003, the Company acquired the common shares of Chanthaburi Aquaculture Farm Company
Limited (CAF) from its 2 preceding shareholders (also related companies) C.P. Intertrade Company
Limited and Sea Farm Company Limited for 3,069,994 shares at Baht 17 each totaling Baht 52.2 million.

In November 2003, the Company acquired the investment in shares of CP USA from BKP, a subsidiary,
for 134.5 million shares at Baht 0.114 each totalling Baht 15.3 million. The intercompany gain/loss on
sales of investment has been eliminated from the consolidation preparation.

As described in Note 2 to financial statements in January 2004 a subsidiary (CPFI) purchased the
common shares of C.P. Standart Gida Sanayi ve Ticaret A.S. (CPS) from Charoen Pokphand
Development (Turkey) Limited (CPD), a related company, comprising 16,898,568,000 shares with a total
value of USD 22 million (84.49% of shareholding). The subsidiary has already paid CPD for the share
purchase in 2004.

On September 23, 2004, the Board of Directors of Bangkok Livestock Processing Company Limited
(BLP) and the Company resolved to approve BLP entering into an agreement with Star Marketing
Company Limited (STAR) (a subsidiary of Chareon Pokphand Group Company Limited). Under the
agreement, BLP shall pay STAR approximately Baht 40 million for the purchase of machines,
equipment, vehicles and others and the annual fee at 2% of total sales deriving from this business in
exchange for the right to use all current trademarks of STAR and product research and development
services for the period of 3 years. The acquisition is completed in January 2005.

On November, 2004, the Board of Directors of the Company resolved the Company to invest directly in
shares of two subsidiaries (KLANG and TPCC), comprising 7.35 million shares at Baht 14 each
amounting to Baht 102.9 million and 557,993 shares at Baht 220 each amounting to Baht 122.8 million,
respectively from BLP and BKP which are subsidiaries. The gains on sale of investment between the
Company and its subsidiaries have been eliminated in the consolidated financial statements.

Expenses in the consolidated and the Company financial statements derived from the following
agreements:

Technical Service Agreement

The Company and certain subsidiaries hired a related company, Charoen Pokphand Group Company
Limited (CPG), to research and develop the raw material ingredients for animal feed manufacturing.
The agreements stipulated a service fee which was calculated from the production quantity of the
Company and subsidiaries, dependent upon the type of feed. The minimum fee ranges from Baht 100,000
to 1,200,000 per month. The term of the agreements are for a period of three (3) years.

Rental and Service Agreements

The Company and certain subsidiaries have long-term lease agreements covering office premises,
facilities and service with related companies, C.P. Land Company Limited and C.P. Plaza Company
Limited and also covering vehicles with certain related companies for a period of 3 years expiring in 2005
to 2007. The annual rental and service charges approximate Baht 469 million. The rental and service
charge rates are not different from the rates charged to non-related companies with a similar rental and
service profile. Under the terms of the lease agreements, the Company and subsidiaries have an option to
renew the lease term of office premises by giving the lessors a prior written notice at least four months
before the expiration of lease agreements. In addition, the Company has three lease agreements covering
the farms with two subsidiaries for a period of 1-3 years. Under the term of the lease agreements, the
Company has an option to renew the lease term automatically without giving notice in advance. The
annual rental charge amounted to approximately Baht 21 million.
39
AND SUBSIDIARIES

Hire-of-work Agreements

The Company and certain subsidiaries have several hire-of-work agreements to construct/install
buildings, structures and others with certain related companies with a total contract price of
approximately Baht 304 million. During 2004, the Company and subsidiaries have paid Baht 256 million
in accordance with the agreements.

6. TRADE ACCOUNTS RECEIVABLE

As at December 31, 2004 and 2003, the problem accounts receivable classified by aging are shown below:

In Million Baht
2004 2003 2004 2003
Periods over credit-term:
Over 3 months - 6 months 21 34 1 9
Over 6 months - 12 months 19 31 2 8
Over 12 months 199 145 14 4
Total 239 210 17 21

Allowance for doubtful accounts 252 221 15 21

The management of the Company and subsidiaries believe that the allowance for doubtful accounts is
adequate to cover possible losses which may arise from non-collectable receivables.

7. LOANS TO SUBSIDIARIES

In Million Baht
The Company Only
2004 2003
Accrued Interest Income
Bangkok Livestock Processing Company Limited (BLP) 4 4
Bangkok Produce Merchandising Public Company Limited (BKP) - 12
Bangkok Agro-Industrial Products Public Company Limited (BAP) 9 9
Bangkok Feedmill Company Limited (BFM) 5 13
Klang Company Limited (KLANG) - 6
Charoen Pokphand Northeastern Public Company Limited (CPNE) 1 6
Seafoods Enterprise Company Limited (SFE) 2 3
Rajburi Feedmill Company Limited (RBF) - 5
CPF Investment Limited (CPFI) 7 10
Charoen Pokphand (USA), Inc. (CP USA) 6 8
Total accrued interest income 34 76
40
AND SUBSIDIARIES

In Million Baht
The Company Only
Average
Outstanding
2004 2003 Balance

Long-Term Loans to Subsidiaries
Bangkok Agro - Industrial Products Public Company Limited (BAP) 1,218 623 813
Bangkok Livestock Processing Company Limited (BLP) 800 450 458
Bangkok Feedmill Company Limited (BFM) 710 850 652
Seafoods Enterprise Company Limited (SFE) 400 500 425
Charoen Pokphand Northeastern Public Company Limited (CPNE) 300 380 228
C.P. Food Products Company Limited (CP FOOD) 100 - 8
Vee Food Products Compan Limited (VFP) 100 - 8
Bangkok Produce Merchandising Public Company Limited (BKP) - 650 158
Klang Company Limited (KLANG) - 375 96
Rajburi Feedmill Company Limited (RBF) - 310 148
Charoen Pokphand Industry Company Limited (CPIN) - - 25
C.P. Aquaculture (Beihai) Co., Ltd. (CPB) 78 79 80
Charoen Pokphand (USA), Inc. (CP USA) 533 1,073 762
CPF Investment Limited (CPFI) 545 749 713

Total long-term loans to subsidiaries 4,784 6,039 4,574
Less current portion (1,511) (1,725)
Long-term loans to subsidiaries - net 3,273 4,314

The Company computes the average movement from the outstanding balance excluding accrued interest
income at the end of each month.

The long-term loans to foreign subsidiaries (CP USA and CPFI) bear interest at the lower of the MOR
rate of a local bank or the maximum legal interest rate.

During the year 2001, the Company received the cash from issuing the new debentures amounting to
Baht 7 billion as mentioned in Note 15. The Company, therefore, restructured the finances of the
Company and subsidiaries by granting long-term loans to certain subsidiaries in the same period totalling
Baht 6.1 billion. The long-term loans are repayable in installments. The first installment at the rate of
15% of the loan principal will be within the thirtieth month from the loan drawdown date and
subsequently in 5 semi-annual installments at the rate of 17% of the loan principal. The loans bear
interest at the rates mentioned in the agreements. However, certain subsidiaries made early partial
repayments of the loans totalling Baht 1,100 million in 2003 and Baht 619 million in 2004.

In 2002, the Company granted long-term loans to 3 subsidiaries (SFE, BKP and BLP) totalling Baht
1,200 million. These long-term loans are repayable in 5 equal installments of loan principal payable
semi-annually. The first installment will be payable by October 2005 with subsequent installments
payable semi-annually. The loans bear interest at an average of minimum - maximum interest rate of 6-
month fixed deposit of Thai Banks plus 1% p.a. However, certain subsidiaries made partial repayment of
the loan before their due date totalling Baht 150 million in 2003, and Baht 500 million in 2004.
41
AND SUBSIDIARIES

In addition, in 2002, the Company granted long-term loans to a foreign subsidiary (CPB) of USD 2
million. The long-term loan is repayable in semi-annual installments of USD 200,000 each. The first
installment will be in May 2005 with subsequent installments payable semi-annual. The loan bears
interest at an average of minimum-maximum interest rate of 6-month fixed deposit of Thai Banks plus
3% p.a..

In 2003, the Company granted long-term loans to 2 subsidiaries (BAP and BLP) totalling Baht 400
million. Each loan is repayable in semi-annual installments of 25% of the loan principal. The first
installments were payable in September 2004. Interest is payable semi-annual from March 2004 and the
interest rates are at 6.25% p.a. for the first repayment and at the interest rate of 6-month fixed deposit for
natural person of a certain bank plus 3.5% p.a. for the subsequent repayments.

During the first quarter of 2004, the Company granted long-term loans to 2 subsidiaries (BAP and CPIN)
totalling Baht 500 million. The long-term loans are repayable in semi-annual installments of 20% of the
loan principal. The first installments will be payable in March 2006. Interest is payable in semi-annual
installments from September 2004 and the interest rate is at 4.25% p.a. During the second quarter of
2004, a subsidiary company (CPIN) made a prepayment in full totalling Baht 100 million and during the
fourth quarter of 2004, another subsidiary (BAP) made a prepayment in partially long term loan before
due payment totalling Baht 15 million.

During the fourth quarter of 2004, the Company received the cash from issuing new debentures
amounting to Baht 6 billion as mentioned in Note 15. The Company allocated Baht 1,950 million by
granting long-term loans to six subsidiaries. These long-term loans are repayable in semi-annual
installments of 25% of the loan principal. The first installment will be payable in December 2005.
Interest is payable in semi-annual installments from June 2005. The interest fixed rate is at 4.5% p.a.
throughout the term of the agreements.

8. INVENTORIES

In Million Baht
2004 2003 2004 2003
Finished goods 4,679 4,385 408 180
Work in process 5,138 4,555 1,233 955
Breeding pigs, poultry, duck and others
and milking cows net 1,542 1,503 269 316
Raw materials 5,463 6,694 1,730 1,854
Chemicals and supplies 507 463 119 110
Inventories in transit 1,006 811 2 67
Total 18,335 18,411 3,761 3,482
Less allowance for decline in value of
inventories ( 28) ( 87) ( 66) ( 9)
Inventories - Net 18,307 18,324 3,695 3,473

42
AND SUBSIDIARIES

9. LONG-TERM INVESTMENTS

9.1 Investment in Associated Companies

Percentage of Holdings In Million Baht

(both direct and Consolidated

indirect holdings) Cost method Equity method
2004 2003 2004 2003 2004 2003

1. C.P. Seven Eleven Public Company Limited 21.32
20.43
666
450
1,818
1,427
2. Nava 84 Company Limited 25.00 25.00 301 301 293 293
3. Ross Breeders Siam Company Limited
49.99 49.99 35 35
32
35
4. Allianz C.P. General Insurance
Company Limited
24.46 24.46 74 74
91
75
5. Arbor Acres Thailand Company Limited
49.99 49.99 2 2
60
46
6. C.P. Aquaculture (India) Private Limited
31.70 31.70 175 175
388
284
7. C.P. Vietnam Livestock Co., Ltd. 40.00 40.00 291 291
698
597
8. Charoen Pokphand Holdings (Malaysia)
SDN. BHD. 49.64 49.64 176 176
769
732
9. Kinghill Limited 20.84 20.84
767
775
767
775
10. LOTUS - CPF (PRC) Investment Co., Ltd.
(formerly SHV-CPF (PRC) Investment
Co., Ltd.) 40.00 40.00 1,009 1,009
1,311
1,236
Less allowance for loss on impairment in value
( 244) ( 244) ( 244) ( 244)
Investments in Associated Companies - Net 3,252
3,044
5,983
5,256

9.2 Investment in Subsidiaries and Associated Companies


(both direct and The Company Only

2004 2003 2004 2003 2004 2003
Investments in Subsidiaries

1. Bangkok Livestock Processing
Company Limited (BLP) 99.99 99.99 1,664 1,664
1,717
2,167
2. Bangkok Produce Merchandising
Public Company Limited (BKP) 99.44 99.44 1,230 1,230
1,893
1,792
3. Bangkok Agro-Industrial Products Public
Company Limited (BAP)
99.90
99.89
1,781
1,781
3,019
2,959
4. Thai Prawn Culture Center Company
Limited (TPCC) 99.89 99.89
137
14
201
35
5. Bangkok Feedmill Company Limited
(BFM) 99.99 99.99 1,174 1,174
3,140
2,662
6. Klang Company Limited (KLANG) 99.99 99.98
298
45
351
62
7. Chanthaburi Aquaculture Farm
Company Limited (CAF) 99.99 99.99 63 63
65
55
8. Charoen Pokphand Northeastern Public
Company Limited (CPNE) 99.61 99.61 1,282 1,282
2,230
2,039
9. Charoen Pokphand Industry Company
Limited (CPIN) 99.99 99.99 709 709
1,264
1,291
10. C.P. Agro-Industry Company Limited (CPAI) 99.99 99.99 180 180
425
386
11. C.P. Food Products Company Limited
(CP FOOD)
99.99 99.99 - - - -
12. C.P. Merchandising Company Limited (CPM) 99.99 99.99 1,850 1,850
3,626
3,571
43
AND SUBSIDIARIES


(both direct and The Company Only

2004 2003 2004 2003 2004 2003
13. C.P. Food Industry Export Company
Limited (CPEX)
99.99 99.98 - - - -
14. CPF Training Center Company Limited (CPF TN)
99.99 99.99 15 15
20
16
15. CPF IT Center Company Limited (CPF IT)
99.99 99.99 190 190
211
190
16. Seafoods Enterprise Company Limited (SFE)
99.99 99.99 425 325
406
303
17. Trad Prawn Culture Company Limited (TRAD)
99.91 99.91 18 18 22 20
18. B.P. Feedmill Company Limited (BPF)
99.99 99.99 290 290
1,101
1,099
19. Shrimp Improvement Systems (Thailand)

Company Limited (SIST) 51.00
-
2
-
2
-
20. Bangkok Farm Company Limited (BKF)
99.99 99.99 469 469
410
744
21. Pokphand Aquatech Company Limited (PAT)
99.99 99.99 400 400
1,880
1,384
22. Universal Food and Marketing
Company Limited (UF&M) 99.99 99.99 40 40 41 39
23. Rajburi Feedmill Company Limited (RBF)
99.99 99.99 120 120
261
226
24. Vee Food Products Company Limited (VFP)
99.99 99.99 330 80
211
-
25. Savee Farming Company Limited (SAVEE)
99.84 99.84 24 24
44
41
26. International Pet Food Company Limited (IPF)
99.99 99.99 60 2
57
2
27. Aqua-Agri Foods International, Inc. (AAFI)
99.99 99.99 - - - -
28. Aqua Beauty, Inc. (AQB)
99.99 99.99 - - - -
29. BKP Holdings Limited (BKPH)
99.44 99.44 - - - -
30. C.P. Aquaculture (Beihai) Co., Ltd. (CPB)
100.00 100.00 236 236
123
158
31. C.P. Aquaculture (Hainan) Co., Ltd. (CPH) 100.00 100.00 126 126
126
126
32. C.P. Food Products (Shanghai) Co., Ltd.
(CPF SH)
100.00 100.00 - - - -
33. C.P.Standart Gida Sanayi ve Ticaret
A.S. (CPS) 84.49 - - - - -
99.95 98.89 - - - -
35. CPF Europe S.A. (CPF EU)
99.99 99.99 - - - -
36. CPF Investment Limited (CPFI) 100.00 100.00 1,724 1,327
2,785
2,047
37. CPF Tokyo Co., Ltd. (CPF TK)
99.99 - - - - -
38. Fusion Foods Limited (FF)
52.00 52.00 - - - -
Total Investments in Subsidiaries

14,837
13,654
25,631
23,414

Investments in Associated Companies

1. Allianz C.P. General Insurance
Company Limited
24.46 24.46 54 54
67
55
2. C.P. Aquaculture (India) Private Limited
31.70 31.70 176 176
388
284
3. Charoen Pokphand Holdings (Malaysia)

SDN. BHD.
49.64 49.64 60 60 263 250
4. Kinghill Limited
20.84 20.84 244 244 244 244
( 244) ( 244) ( 244) ( 244)
Investments in Associated Companies - Net
290 290 718 589

Investments in Subsidiaries and

Associated Companies - Net

15,127 13,944 26,349 24,003

Excess of net loss over investment in
subsidiaries

1. Vee Food Products Company Limited (VFP)
99.99 99.99 - - - 66
99.95 98.89 2,686 2,686
238
356
Total
2,686 2,686 238 422

44
AND SUBSIDIARIES

9.3 Investments in Related Companies and Others

Percentage of Holdings

(both direct and In Million Baht

indirect holdings) Consolidated The Company Only
2004 2003 2004 2003 2004 2003

Marketable securities Equity Securities-
Available- for- sale - at fair value
1. True Corporation Public Company
Limited ( formerly Telecom Asia
Corporation Public Company Limited ) 3.33 3.70 1,287 1,287 881 881
2. Siam Makro Public Company Limited
9.13 9.54
236 257
- -
Total
1,523 1,544
881 881
Less unrealized holding loss
638 506
( 130) ( 200)
Total
2,161
2,050
751
681
Non-marketable securities
- General investments - at cost
3. CPPC Public Company Limited
(formerly Charoen Pokphand
Petrochemical Company Limited) 12.48 12.48 110 110 55 55
4. C.G. Petrochemical Company Limited - 8.55 - 40 - 40
5. C.P. Land Company Limited
6.49 6.49 143 143 - -
6. Vee Rum Choke Company Limited
9.00 9.00 9 9 - -
7. Ayudhya Allianz C.P. Life Public

Company Limited 3.47 3.47
115
77
88
60
8. ACME ECI Investment Company Limited
17.95 17.95 21 21 - -
9. Charoen Pokphand (India) Private Limited 19.00 19.00 36 36 - -
10. Chia Tai (Jilin) Company Limited 9.99 9.99 5 5 - -
11. Trillion Brewery Company Limited 17.95 17.95 237 237 - -
Total
676
678
143
155
( 406) ( 446) ( 26) ( 66)
Net
270
232
117
89
Investment in Related Companies - Net 2,431
2,282
868
770

Investment in Other Companies
7 7 7 7
( 7) ( 7) ( 7) ( 7)
Investment in Other Companies net
- - - -

As at December 31, 2004 and 2003, the investments referred to above include the foreign currency
investments in foreign countries at cost or at equity (in case of investments in subsidiaries and associated
companies) as follows:

Consolidated
Amount of Investment (In Million)
Amount in Foreign Currency Equivalent to Baht
Invested Foreign Countries Foreign Currency 2004 2003 2004 2003

British Virgin Islands USD 34 31 1,311 1,236
Cayman Islands USD 45 45 1,026 1,033
India INR 476 371 424 320
Malaysia MYR 75 70 768 732
Vietnam DONG 279,193 239,054 698 597
Hong Kong USD - - 5 5
Total 4,232 3,923
45
AND SUBSIDIARIES

The Company Only
Amount of Investment (In Million)
Amount in Foreign Currency Equivalent to Baht
Invested Foreign Countries Foreign Currency 2004 2003 2004 2003

China RMB 53 59 248 285
America USD ( 6) ( 9) ( 238) ( 356)
British Virgin Islands USD 71 52 2,785 2,047
Cayman Islands USD 22 22 244 244
India INR 434 329 388 284
Malaysia MYR 26 24 263 250
Total 3,690 2,754

The investment in common shares of C.P. Seven Eleven Public Company Limited, which is the listed
company on the Stock Exchange of Thailand, is presented in the financial statements by the equity
method. As at December 31, 2004, the fair value of the investment was Baht 5,305 million.

As at December 31, 2004 and 2003, the Company and subsidiaries had a provision for losses on
impairment of investments in shares of associated, related and other companies totalling approximately
Baht 657 million and Baht 697 million, respectively. The management believes that the allowance for
loss on impairment of investments as referred to above adequately provides for possible losses on all
investments.

During the second quarter of 2003, the Company purchased the 3,125,000 shares in C.P. Aquaculture
(India) Private Limited (CP Aqua (India)) from a preceding shareholder with the value totalling INR
145.5 million (equivalent to Baht 138 million). The Companys percentage shareholding, following to the
additional investment, increased from 19.20% to 31.70%. As a consequence, CP Aqua (India) became
an associated company from the second quarter of 2003.

In October 2003, a subsidiary (BKP) sold its investment in common shares of C.P. Seven Eleven Public
Company Limited (CP 7-11), an associated company, totalling 10 million shares at Baht 42 each at the
same time as making initial public offering of new common shares in CP 7-11. As a result, there was a
gain on sale of the investment of approximately Baht 278.2 million (based on the equity method), which
was recorded as income in the consolidated statement of income for the year. Subsequent to the sale of
common shares of CP 7-11 by the subsidiary and the issuance of new shares by CP 7-11, the indirect
percentage of shareholding in CP7-11 was decreased from 24.97% to 20.43%. Because the stocks initial
offering price was higher than the net book value, the Companys equity in the associated company
increased by approximately Baht 154 million. The Company recorded the increase in equity as Paid-in
capital from the associated companys equity under shareholders equity. As a consequence of CP7-11
having listed all of its common shares in Stock Exchange of Thailand, the subsidiaries, as shareholders of
CP 7-11, have to comply with the announcement of Stock Exchange Commission of Thailand in
prohibiting shareholders to sell any listed securities belonging to them prior to initial offering of those
securities during a silent period. As at December 31, 2004 and 2003, there were 38 million shares and 76
million shares, respectively, within the silent period.
46
AND SUBSIDIARIES

In December 2003, the Company and a subsidiary (BKP) sold their investments in the share capital of
Allianz C.P. Life Assurance Company Limited (AZCPL), their associated company, totalling 11.75
million shares (23.5% of issued and paid-up share capital) to Ayudhya Allianz C.P. Life Public Company
Limited (AACP) for a total consideration of Baht 78 million. The Company and the subsidiary had
gains on sale (based on the equity method) of Baht 1.8 million. In addition, the Company and the
subsidiary also acquired an investment in the common shares of AACP totalling 5,953,095 shares and
1,819,002 million shares, respectively at Baht 10 each with a total value of Baht 59.5 million and 18.2
million, respectively (2.66% and 0.81% of the issued and paid-up share capital). The acquisition and
disposal transactions were in accordance with the integration plan of the life assurance business between
CP Group, Allianz Group and Bank of Ayudhya Group.

In December 2003, a subsidiary (CPIN) invested in a new joint venture company with Aviagen, Inc.
namely Ross Breeders Siam Company Limited with the authorized share capital of Baht 70 million
divided into 700,000 shares at Baht 100 par value. In this regard, CPIN subscribed for common shares in
Ross Breeders Siam Company Limited for 349,996 shares at Baht 100 each with the total value of Baht
35 million (49.99% shareholding). The newly established company became a new associated company
since the date of incorporation, December 26, 2003.

In the second quarter of 2004, the Company sold its investment in common shares of C.G. Petrochemical
Company Limited, a related company totalling 6.6 million shares at Baht 0.02 each to an unrelated buyer.
As a result, there was a gain on sale of the investment of approximately Baht 66,698 net of selling
expense, which was recorded as income in the consolidated statement of income for the year. The
Company had previously made full allowance for impairment losses in respect of this investment and the
related deferred tax asset had been recorded. This deferred tax asset was reversed to the statement of
income upon disposal of the investment.

In the fourth quarter of 2004, two subsidiaries (CPM and CPFI) purchased 4.3 million shares of CP 7-11
totalling approximately Baht 224.5 million of which 0.4 million shares were sold in the same quarter by
CPM. There was a gain on sale of investment by equity method totalling Baht 15.3 million. All of these
transactions were made through the main board of the Stock Exchange of Thailand. As a result, the
Companys percentage of shareholding, subsequent to the transactions increased from 20.43% to 21.32%.

10. LAND REVALUATION

During the year 1998, the Company and the subsidiaries recorded their land used in operations and land
held for future projects at the revalued amount and which was based on the fair market value as shown in
the reports of American Appraisal (Thailand) Limited, an independent valuer and partially based on the
information guidelines provided by the Land Department. Newly acquired land since 1999 is stated at
cost.

The revaluation increment in land of the Company and of the subsidiaries is not available for dividend
distributions.
47
AND SUBSIDIARIES

11. PROPERTY, PLANT AND EQUIPMENT
In Million Baht
Consolidated
Addition from
Balance as at the acquisition Balance as at
January 1, of the new Movements during the year December 31,
Note 2004 Subsidiary (Note2) Additions Disposals Transfers 31, 2004
Land used in operation
At Appraisal 6,801
-

-
( 3)
-
6,798
At Cost 1,050 1 1,012
-

-
2,063
Total 7,851 1 1,012 ( 3)
-
8,861

Building and Equipment
At Cost
Buildings, building
improvements and
leasehold improvements 11,170 769 158 ( 80) 1,982 13,999
Machinery and equipment 13,453 1,560 1,087 ( 262) 2,482 18,320
Water and electricity
System 2,597
-
47 ( 32) 239 2,851
Furniture, fixtures and
office equipment 1,201 76 166 ( 105) 28 1,366
Vehicles 16 919 148 78 ( 44) 23 1,124
Utilities system 16 1,578 8 35 ( 11) 233 1,843
Construction in progress
and machinery under
installation 2,527 79 5,706
-
( 4,987) 3,325
Total 33,445 2,640 7,277 ( 534) - 42,828

Accumulated
Depreciation
Buildings, building
improvements and
leasehold improvements 4,556 294 759 ( 31)
-
5,578
Machinery and equipment 7,589 995 1,557 ( 227)
-
9,914
Water and electricity
system 1,852
-
227 ( 28)
-
2,051
office equipment 806 56 184 ( 103)
-
943
Vehicles 626 125 113 ( 41)
-
823
Utilities system 1,183 - 124 ( 5)
-
1,302
Total 16,612 1,470 2,964 ( 435)
-
20,611
Buildings and
Equipment - Net 16,833 1,170 4,313 ( 99)
-
22,217

Property, Plant and
Equipment -Net 24,684 1,171 5,325 ( 102)
-
31,078
48
AND SUBSIDIARIES

In Million Baht
The Company Only
Balance as at Balance as at
January 1, Movements during the year December 31,
2004 Additions Disposals Transfers 2004
Land used in operation
At Appraisal 1,263
-
( 3)
-
1,260
At Cost 508 1,003
-

-
1,511
Total 1,771 1,003 ( 3)
-
2,771

Building and Equipment
At Cost
Buildings, building
improvements and leasehold
improvements 3,575 16 ( 50) 1,383 4,924
Machinery and equipment 4,218 654 ( 112) 1,579 6,339
Water and electricity system 846 21 ( 15) 157 1,009
Furniture, fixtures and office
equipment 348 65 ( 65) 13 361
Vehicles 297 22 ( 7) 11 323
Utilities system 700 24 ( 8) 141 857
Construction in progress
and machinery under installation 1,494 4,062
-
( 3,284) 2,272
Total 11,478 4,864 ( 257)
-
16,085

Accumulated Depreciation
Buildings, building
improvements and leasehold
improvements 1,288 223 ( 12)
-
1,499
Machinery and equipment 2,593 464 ( 92)
-
2,965
Water and electricity system 635 72 ( 11)
-
696

office equipment 239 44 ( 53)
-
230
Vehicles 179 38 ( 7)
-
210
Utilities system 523 54 ( 6)
-
571
Total 5,457 895 ( 181)
-
6,171
Building and Equipment - Net 6,021 3,969 ( 76)
-
9,914

Property, Plant and Equipment

- Net 7,792 4,972 ( 79)
-
12,685

In 2001, a subsidiary (BKP) entered into a Co-Generation Power Plant Agreement with a local company
to design and construct the co-generation power plant as well as controlling and examining the operation
to comply with the planned schedule. The contract value is Baht 166 million. Consequently, the
subsidiary has been provided with financial support by Global Environment Facility and a local bank (see
Note 14) and interest support by Electricity Generating Authority of Thailand. The project was
completed in 2003.
49
AND SUBSIDIARIES

As at December 31, 2004 and 2003, the Company and subsidiaries have certain fixed assets under
finance leases as mentioned in Note 16 with the net book value of Baht 28 million and Baht 38 million
(excluding assets classified as assets held for sale), respectively.

12. INTANGIBLE ASSETS

The movements of intangible assets during the years 2004 and 2003 are summarized below:

In Million Baht
Consolidated
At Cost
Goodwill 1,454 - - - 1,454
Negative goodwill ( 2,096) ( 773) 76 - ( 2,793)
Development cost of
software applications 139 - ( 1) ( 37) 101
Others 110 56 - 35 201
Total ( 393) ( 717) 75 ( 2) ( 1,037)

Accumulated Amortization
Goodwill ( 702) ( 92) - - ( 794)
Negative goodwill 1,051 329 ( 76) - 1,304
Development cost of
software applications ( 9) ( 10) - - ( 19)
Others ( 8) ( 15) - - ( 23)
Total 332 212 ( 76) - 468
Intangible Assets Net ( 61) ( 505) ( 1) ( 2) ( 569)

In Million Baht
The Company Only

Other Intangible Asset 9 4 ( 2) - 11
Less Accumulated Amortization ( 2) ( 1) - - ( 3)
Intangible Assets - Net 7 3 ( 2) - 8
50
AND SUBSIDIARIES

13. BANK OVERDRAFTS AND LOANS FROM FINANCIAL INSTITUTIONS

In Million Baht
2004 2003 2004 2003

Bank overdrafts 154 327 39 129
Promissory notes 930 2,161 810 800
Short-term loans 703 - - -
Packing credits 4,435 4,990 - -
Liabilities under trust receipts 6,191 6,648 1,384 1,107
Total 12,413 14,126 2,233 2,036
Add net receivables arising from forward
exchange contracts 4 - - -

Net (at forward contract rate
for foreign currency liabilities) 12,417 14,126 2,233 2,036

Less deferred forward premium - - - -
Net 12,417 14,126 2,233 2,036

The above loans include loans denominated in foreign currencies as follows:

Amount (In Million)
2004 2003 2004 2003

U.S. Dollar 2 - - -
Turkish Lira 12 - - -
Pound Sterling 5 - - -

During the years 2004 and 2003, the Company and the subsidiaries hedged substantial loans which are
in foreign currencies by entering into forward exchange contracts with banks to purchase a certain
amount of the foreign currencies at the agreed rates.

The Company and subsidiaries have the following overdraft lines with several banks which bear interest
at the rates as follows:

In Million Baht
2004 2003
Overdraft lines
The Company 297 292
The subsidiaries 1,738 1,732
Interest rate per annum (%) 3.58 - 6.50 5.75 - 9.75

The short-term loans of local subsidiaries bear interest rates ranging from 1.60% to 3.50% per annum in
2004 and from 2.50% to 3.56% per annum in 2003.

The short-term loans of foreign subsidiaries bear interest rates ranging from 5.75% to 6.75% per annum
except a certain subsidiary (CPS) bears interest at rates 4.25% and 24% per annum.
51
AND SUBSIDIARIES

Packing credits bear interest at the rates ranging from 1.65% to 2.64% per annum in 2004 and from
1.55% to 2.00% per annum in 2003.

Under the terms of agreements covering the Company and subsidiaries liabilities under trust receipts,
certain machinery, equipment and inventories have been released to the Company and subsidiaries in
trust for the banks. The Company and subsidiaries are accountable to the banks for the trusteed
machinery, equipment and inventories or their sales proceeds.

14. LONG-TERM LOANS

In Million Baht
2004 2003 2004 2003

Loans in foreign currency - at exchange rate at
balance sheet dates 3,195 8 3,107 -
Loans in Baht 4,431 1,637 3,360 450
Total 7,626 1,645 6,467 450
Less Net receivable arising from currency
swap agreement ( 89) - ( 89) -
Current portion ( 797) ( 304) ( 390) ( 40)
Long-Term Loans - Net 6,740 1,341 5,988 410

During the year 2000, the Company and subsidiaries (CP FOOD) obtained long-term loans in Thai Baht
from a local bank totalling Baht 410 million. The loans are repayable in quarterly installments of Baht
10 million for the Company and Baht 13 million for subsidiaries starting September 2001 to June 2006
and October 2001 to July 2005, respectively.

During 2001, a subsidiary (BKP) obtained long-term credit lines from two banks totalling Baht 742
million as follows:

- The credit line of Baht 532 million has been fully drawndown. The loan of Baht 425 million is
repayable in quarterly installments from September 2002 to June 2009. The remaining loan of Baht 107
million is repayable in quarterly installments from September 2004 to June 2007.

- The credit line of Baht 210 million for constructing the co-generating power plant has been
partially drawn down at Baht 188 million. The loan is repayable in monthly installments of Baht 3
million from March 2003 to September 2008.

In addition, another subsidiary (BLP) obtained and has fully drawndown long-term loans from two banks
totalling Baht 580 million. The loans are repayable in quarterly installments of Baht 10 million and Baht
17.5 million from December 2001 and May 2003, respectively.

The foreign currency loans of a foreign subsidiary (CP USA) amounting to USD 0.2 million equivalent
to Baht 8 million are repayable in monthly installments up to April 2004.

During the year 2003 and 2004, the Company issued bills of exchange to a local bank amounting to Baht
350 million and Baht 2,950 million, respectively. The bills of exchange have discount rates ranging
between 3.45% - 4.65% p.a. and are repayable from December 2005 to December 2007. The Company
recorded the discount as prepaid interest expenses and amortizes this as an interest expense using the
straight-line method over the term of the bill of exchange.
52
AND SUBSIDIARIES

In March 2004, the Company obtained a long-term loan in Japanese Yen from a branch of a foreign bank
totalling JPY 8,200 million, equivalent to approximately Baht 3,018 million, bearing interest at the
6-month LIBOR rate plus 0.65% p.a.. Interest is payable semi-annually installments in March and
September and the loan is repayable in two equal installments. The first installment is due to be repaid
March 2006 and the second installment will be in March 2007. The Company must comply with specific
loan covenants e.g. maintaining total debt to equity ratio below 2:1. To mitigate the exchange and
interest rate risk, the Company entered into a currency swap agreement with the foreign bank to swap the
currency of the loan principal from Japanese Yen to Thai Baht equivalent to Baht 3,018 million and from
a floating interest rate to fixed rate equivalent to 3.86% p.a. (based on Thai Baht principal) covering the
term of the loan agreement.

A subsidiary (CPS) has long-term loans of approximately USD 2.3 million (equivalent Baht 89 million).
The loans are repayable from January 7, 2005 to April 15, 2005.

In May 2004, a subsidiary (BAP) obtained a long-term loan in Thai Baht from a local bank totalling
Baht 140 million. The loan is repayable in semi-annual installments of Baht 14 million from March 2005
to September 2009.

All long-term loans bear interest at the rates indicated in the loan agreements. Under the terms of the
loan agreements, the Company and subsidiaries must comply with certain conditions and restrictions
stated in the agreements.

15. DEBENTURES

In Million Baht
2004 2003 2004 2003

Debentures - in Thai Baht 10,970 10,150 10,970 10,150
Less current portion ( 3,780) ( 5,180) ( 3,780) ( 5,180)
Net 7,190 4,970 7,190 4,970

On March 9, 2000, the Company issued unsubordinated, unsecured and amortized debentures
(Debenture#1/2000) in registered name form of Baht 7 billion. The term of the debentures is five (5)
years. The first repayment of debentures was in March 2003 and subsequently in semi-annual installments
at 20% of the face value. The debentures bear interest at 7.5% p.a. during the first three years and at the rate
of a local banks six-month fixed deposit plus 3% p.a. during the final two years. In this connection, the
Company must comply with specific covenants e.g. maintaining total debt to equity ratio in the semi-
annual and annual financial statements.

On March 23, 2001, the Company issued additional unsubordinated, unsecured and amortized debentures
(Debenture#1/2001) in registered name form of Baht 7 billion. The term of the debentures is five (5)
years. The first repayment of debentures will be in September 2003 at the rate of 15% of the face value
and subsequently in semi-annual installments at the rate of 17% of the face value. The debentures bear
interest at 5.5% p.a. during the first two years, 5.75% p.a. in the third year and at the rate of a local
banks six-month fixed deposit plus 3% p.a. during the final two years. The Company must comply with
the specific covenants e.g. maintaining total debt to equity ratio in the annual financial statements
through the term of the debentures. These debentures have a credit rating of A updated by TRIS
Rating Limited on May 28, 2004. The debentures were registered with the Thai Bond Dealing Centre on
August 31, 2001.

53
AND SUBSIDIARIES

During the first quarter and the third quarter of 2004, the Company repaid the installments of debenture #
1/2000 at 20% of the face value each, amounting to Baht 2,800 million, and repaid the installment of
debenture # 1/2001 at 17% of the face value, amounting to Baht 2,380 million.

During the year 2002, the Company entered into an interest rate swap agreement with a branch of a
foreign bank for the interest payment of part of Debenture#1/2001. The interest rates will be swapped
from the rate of 5.5% p.a. for the period from March 2002 to September 2002 to 4.5% p.a.; and from the
interest rate of 5.5% p.a. for the period from September 2002 to March 2003 and the interest rate of
5.75% p.a. for the period from March 2003 to March 2004 to 6-Month THBFIX (reported by REUTERS)
plus 2.08% p.a. The underlying notional principal for calculating the amount to be received or paid
among the parties for the period from March 23, 2002 to September 22, 2003 is Baht 3,500 million and
for the period from September 23, 2003 to March 22, 2004 is Baht 2,975 million.

As at November 17, 2004, the Company issued unsubordinated and unsecured debentures
(Debenture#1/2004) in registered name form of Baht 6,000 million divided into;

- Baht 2,500 million with the term of three (3) years, fully repayable on November 17, 2007 and
bearing interest at 4.25% p.a.
- Baht 3,500 million with the term of five (5) years, fully repayable on November 17, 2009 and
bearing interest at 5.50% p.a.

The Company must comply with the specific covenants e.g. maintaining total debt to equity ratio in the
semi-annual and annual financial statements through the terms of debentures.

These debentures have a credit rating of A by TRIS Rating Limited and were registered with the Thai
Bond Dealing Centre and the Stock Exchange of Thailand on December 16, 2004 and February 7, 2005,
respectively.

As at December 31, 2004, the carrying values of all debentures noted above are not significantly different
from the fair values estimated from the current market interest rates of debentures which have similar
conditions and due dates.

16. LIABILITIES UNDER FINANCE LEASES

The consolidated financial statements as at December 31, 2003 included the liability of CP USA under
two utility purchase contracts with The Baker Hill Water Authority amounting to USD 4 million
(equivalent to Baht 149 million converted at the closing rate as at December 31, 2003) which bore
interest at 5% p.a. repayable in monthly installments at several rates with the longest lease agreement
ending in 2039. During the first quarter of 2004, as described in Note 2, CP USA sold the property, plant
and equipment which included assets under finance lease to a third party whereby the purchaser agreed to
assume of the liability under the finance leases. The assumption of the liability under the finance leases
was offset with the proceeds payable to CP USA.

During 2004 and 2003, the Company and certain subsidiaries entered into finance lease agreements
covering equipment and vehicles totalling Baht 13 million and Baht 61 million, respectively. The
liabilities bear interest at rates ranging from 2.25% to 8.66% p.a. and are repayable in installmens from
2003 to 2007.
54
AND SUBSIDIARIES

17. ALLOTMENT OF COMMON SHARES

(Unit: Thousand)
2004 2003
Common
Shares

Baht
Common
Shares

Baht

Authorised
At January 1 and December 31
Common shares of Baht 1 each 8,206,664 8,206,664 8,206,664 8,206,664

Issued and fully paid
At January 1

Issued of shares
Issued on exercise of warrents(Note 18)
CPF-W - - 852,477 852,477
CPF-W2 9,029 9,029 16,465 16,465

At December 31

Total common share reserved
for warrants unexercised 2,479,102 2,479,102 2,488,131 2,488,131

18. WARRANTS

Warrants consist of:

Number of warrants
(In Million Units) Exercise Exercise
December 31, December 31, Ratio Price
2004 2003 per unit (Baht per share) Expiration

CPF-W - - 27.95007 2.862 January 7, 2003
CPF-W2 383.87 385.68 5.00000 4.000 July 21, 2005
383.87 385.68

The above exercise ratios and exercise prices of the CPF-W warrants were adjusted under the terms of
the warrants as a result of the change in par value of common shares and the result of issuance and offer
of the new warrants as mentioned in (b).

(a) In relation to the business restructuring since 1998, the Company issued and sold 47.5 million stock
warrants in registered name form to Charoen Pokphand Group Company Limited (CPF-W) at Baht 20
each in 1999. 17 million units of CPF-W warrants were exercised for common shares in October 2002
and 30.5 million units were exercised in January 2003 amounting to Baht 2,440 million. The Company
issued 852,477,135 new common shares for this exercise and transferred the remaining balance of
CPF-W warrants amounting to Baht 610 million from Warrants to Premium on share capital after the
exercise of warrants during the first quarter of 2003.
55
AND SUBSIDIARIES

(b) The Company issued and sold warrants to existing shareholders # 2 (CPF-W2) on July 22, 2002
totalling 388,970,582 units, whereby the holder of one unit of stock warrant is entitled to purchase five
new common shares at the exercise price of Baht 4 per share. The exercise date is every first business day
of each quarter starting from January 2, 2003, except that the last exercise date is the expiry date is the
warrants, which will be July 21, 2005. The warrant holders had exercised CPF-W2 warrants for common
shares as follows:

Exercised Issued Cash Receipt Date of Registration
Warrants Common Shares from Exercise of Paid-up
Exercise Date (Units) (Shares) (Million Baht) Share Capital

January 2, 2003 1,219,035 6,095,175 24 January 20, 2003
April 1, 2003 1,815 9,075 - April 10, 2003
July 1, 2003 1,179,952 5,899,760 24 July 10, 2003
October 1, 2003 892,209 4,461,045 18 October 14, 2003
Total in 2003 3,293,011 16,465,055 66

January 5, 2004 1,802,799 9,013,995 36 January 19, 2004
July 1, 2004 502 2,510 - July 15, 2004
October 1, 2004 2,672 13,360 - October 14, 2004
Total in 2004 1,805,973 9,029,865 36

19. DIVIDENDS

The Company has a policy to pay dividends to the shareholders four times a year. Each dividend
payment will be appropriated from the operating results of each quarter. The sum of dividend payments
from the operating results of each year will be approximately 50% of net profit after tax and
appropriations to legal reserve. The dividend payments might change subject to the Companys
operations, financial position, future projects and the overall economic conditions.

During the years 2004 and 2003, The Board of Directors approved dividend payments as summarized
below:

Approval date Rate Number of Amount Appropriated
to pay dividend (Baht) Shares (Million Baht) Operating results From

March 3, 2003 0.03 5,708,162,731 171 The fourth quarter of 2002 (a)
August 8, 2003 0.05 5,714,071,566 286 Unappropriated retained (a)
earnings
November 6, 2003 0.14 5,718,532,611 801 The third quarter of 2003 (a)
Total 1,258

February 24, 2004 0.04 5,727,546,606 230 The fourth quarter of 2003 (a)
August 10, 2004 0.07 5,727,549,116 401 The first six months of 2004
and unappropriated retained
earnings (b)
November 9, 2004 0.04 5,727,562,476 229 The third quarter of 2004 (c)
Total 860

56
AND SUBSIDIARIES

(a) Appropriated from net profit which was not exempted from corporate income tax under the
Investment Promotion Act B.E. 2520

(b) The portion of revenue which was not applicable for corporate income tax

(c) Dividend income from subsidiaries, which was paid from the subsidiaries taxable profit from
operations which are subject to 30% corporate income taxes.

The payments of interim dividends for the year 2003 and the annual dividend payment of the years 2002
and 2003 have been reported to, and approved, at shareholders meetings. The interim dividend
payments during the year 2004 will be reported to the shareholders in the annual shareholders meeting
of 2005.

20. LEGAL RESERVE

The legal reserve created by the Company under the provisions of the Public Limited Companies Act
B.E. 2535. This law requires the Company to appropriate at least 5% of its annual net profit after
deduction of the deficit brought forward (if any) as a legal reserve until the reserve reaches 10% of
authorized share capital. The legal reserve is not available for dividend distribution. As at December
31, 2004 and 2003, the legal reserve was provided in full as required by the law.

21. EARNINGS PER SHARE

Basic earnings per share and diluted earnings per share for the years ended December 31, 2004 and 2003
are calculated as follows:

Net Profit Number of Shares Earnings Per Share
(In Thousand Baht) (Share) (In Baht)
2004 2003 2004 2003 2004 2003
Basic earnings per share
Profit from normal
operation 1,235,621 2,242,439 5,398,730,601 5,383,414,079 0.23 0.42
Extraordinary items
net 898 - - - - -
Net profit 1,236,519 2,242,439 5,398,730,601 5,383,414,079 0.23 0.42

The effect of diluted
equivalent shares
- CPF - W2 - - - 229,741,870 - (0.02)
Diluted earnings per share 1,236,519 2,242,439 5,398,730,601 5,613,155,949 0.23 0.40

57
AND SUBSIDIARIES

22. INCOME TAX

Income tax expenses for the years ended December 31, 2004 and 2003 consisted of:

In Million Baht
2004 2003 2004 2003
Income tax expenses on the
taxable income for the year 625 591 21 187
Deferred tax expense from the
temporary differences net ( 189) (1,055) 32 ( 865)
Tax Expenses (Income) net 436 ( 464) 53 ( 678)

In accordance with Royal Decree No. 387 B.E. 2544 dated September 5, 2001, listed companies in the
Stock Exchange of Thailand have been granted a d reduction in the corporate income tax rate from 30%
to 25% for taxable profit not exceeding Baht 300 million for the five (5) consecutive accounting periods
which begin on or after enactment. Therefore, the Company calculated income tax on the its taxable
profit for the portion not exceeding Baht 300 million at the 25% income tax rate during 2004 and 2003.

Changes in deferred income tax assets and liabilities during the year 2004 are summarized below:

In Million Baht
Consolidated
Credited/
Balance as at (Charged) Credited/ Balance as at
January 1, to income (Charged) December 31,
2004 statement to equity 2004
Deferred tax assets
Allowance for loss on impairment of
Investments 237 ( 12) - 225
Difference of exchange rates from
forward exchange contracts ( 2) 16 - 14
Equity loss in subsidiary 920 - - 920
Others 156 284 4 444
Total 1,311 288 4 1,603
58
AND SUBSIDIARIES

In Million Baht
Consolidated
Addition from (Credited)/
Balance as at the acquisition Charged Credited/ Balance as at
January 1, of the new to income (Charged) December 31,
2004 subsidiary statement to equity 2004
Deferred tax liabilities
Portion of the new subsidiary - 24 ( 5) - 19
Revaluation increment in land and equity
in associated companies of the subsidiary
portions recorded as part of negative
goodwill on subsidiary acquisition date 1,217 - - ( 5) 1,212
Revaluation increase from changes in
available - for - sale investment valuation ( 85) - - 35 ( 50)
Revaluation increment in land 548 - - - 548
Effects from translation of financial statements
of foreign associated companies - Nets 127 - - ( 12) 115
Equity in associated companies 429 - 120 - 549
Others 103 - ( 14) - 89
Total 2,339 24 101 18 2,482

In Million Baht
The Company Only
Credited/
Balance as at (Charged) Credited/ Balance as at
January 1, to income (Charged) December 31,
Deferred tax assets
Allowance for loss on impairment of
Investments 149 ( 12) - 137
Difference of exchange rates from
forward exchange contracts ( 2) 2 - -
Equity loss in subsidiary 920 - - 920
Others 1 22 - 23
Total 1,068 12 - 1,080
59
AND SUBSIDIARIES

In Million Baht
The Company Only
(Credited)/
Balance as at Charged (Credited)/ Balance as at
January 1, to income Charged December 31,
Deferred tax liabilities
Revaluation increase from changes in
available - for - sale investment valuation ( 60) - 21 ( 39)
Revaluation increment in land 248 - ( 1) 247
Change in translation of financial
Statements ( 3) - 1 ( 2)
Equity in associated companies 92 47 - 139
Total 277 47 21 345

The reconciliation between the income tax expense (income) and the multiple of accounting income and
tax rate for the year 2004 is summarized as follows;

In Million Baht

Consolidated
12.5% (Reduction
of tax rate as Other
Applicable tax rates
0% 10% Note 24) 15% 30% Tax rate Total

Accounting profit before income
tax net 857 53 - 60 493 257 1,720

Tax at the applicable tax rates - 5 - 9 148 52 214
Tax effect of income and expenses
that are not taxable income or not
deductible in determining taxable
profit net - - - - 221 4 225

Net - 5 - 9 369 56 439

In Million Baht

The Company Only
12.5% (Reduction
of tax rate as
Applicable tax rates
0% Note 24) 25% 30% Total

Accounting profit before income tax net 37 - - 1,255 1,292

Tax at the applicable tax rates - - - 377 377
Tax effect of income and expenses
that are not taxable income or not
deductible in determining taxable
profit net
- Equity in profit of associated - - - ( 291) ( 291)
- Other - - - ( 30) ( 30)
Net - - - 56 56

60
AND SUBSIDIARIES

As of December 31, 2004 and 2003, the temporary difference arising from loss carryforward of Baht
6,306 million and Baht 5,527 million, respectively, for which no deferred tax asset is recognized in the
balance sheets due to the uncertainty of its recoverability.

As of December 31, 2003, the Company recognized the deferred tax assets arising from temporary
differences in the investment in the foreign subsidiary (CP USA) totalling Baht 920 million because the
Company determined that the temporary difference will reverse in the foreseeable future and taxable
profit will be available against which the temporary difference can be utilized.

23. EXTRAORDINARY ITEMS

On December 26, 2004, there was a Tsunami which devastated the Southern Coasts of Thailand. As a
result, the property of a branch of the Company located at Phang-nga Province has been affected. All
inventories and almost all of the building and equipment were damaged. The assets had net book value
of approximately Baht 66 million. The Company wrote off the net book value of the damaged assets and
recorded the loss as and extraordinary item in the statement of income net of tax income of Baht 14
million.

However, the Company has an insurance coverage for the event of Act of God on partial assets.
The Company has preliminarily estimated the compensation from the insurance company for the damage
at approximately Baht 70 million with related tax expense of Baht 18 million.

24. PROMOTIONAL PRIVILEGES

By virtue of the provisions of the Industrial Investment Promotion Act B.E. 2520, the Company and
certain subsidiaries have been granted privileges by the Board of Investment relating to certain feedmill
operations, shrimp farms, shrimp hatchery, chicken farms, chicken egg hatching operations, duck farms,
duck hatchery, frozen chicken meat, frozen aquaculture and frozen cooked and semi-cooked food
products which include, among other things, the following:

1. Exemption from payment of import duty on machinery as approved by the Board.

2. Exemption from payment of income tax for certain operations for a period of 5 years or 8 years
from the dates on which the income is first derived from such operations.

3. A fifty percent reduction in the normal income tax rate on the net profit derived from certain
operations for a period of 5 years commencing from the expiry dates in 2 above.

4. A deduction of an amount equal to five (5) percent of the increase in income of certain promoted
operations over previous year for ten (10) years.

As promoted companies, the Company and subsidiaries must comply with certain conditions and
restrictions provided for in the promotional certificates.
61
AND SUBSIDIARIES

25. SEGMENT FINANCIAL INFORMATION

The segment financial information of the Company and its subsidiaries for the years 2004 and 2003 was as
follows:

In Million Baht
Consolidated
Aquaculture Livestock
Business Business Total
2004 2003 2004 2003 2004 2003
Net sales 22,661 22,472 69,129 60,637 91,790 83,109

Operating profit before
loss on impairment
in fixed assets 2,133 2,393 534 955 2,667 3,348
Loss on impairment
in fixed assets - - - ( 938) - ( 938)
Operating profit 2,133 2,393 534 17 2,667 2,410
Central expenses net ( 436) ( 140)
Interest expense ( 910) ( 1,004)
Gain (loss) on foreign
exchange rate net ( 336) 259
Gain on monetory
transactions - net 15 -
Equity in net profit
of associated companies 717 267
Tax income (expense) ( 436) 464
Extraordinary items 1 -
Add minority interest profit ( 45) ( 14)
Net profit 1,237 2,242
Fixed assets - net
at December 31 6,195 4,164 24,892 20,498 31,087 24,662
Central fixed assets - net 252 254
Other assets 40,879 39,805
Total Assets 72,218 64,721
62
AND SUBSIDIARIES

The segment financial information of the Company and its subsidiaries based on geographical segments
for the years 2004 and 2003 was as follows:

In Million Baht
Consolidated
Revenue from external
customers Fixed assets
2004 2003 2004 2003

Thailand 63,427 59,269 29,620 24,614
Europe 17,572 7,630 1,404 20
Asia 6,540 8,552 270 231
America 3,581 7,208 45 51
Others 670 450 - -
Total 91,790 83,109 31,339 24,916

26. DISCLOSURES OF FINANCIAL INSTRUMENTS

Foreign Exchange Risks

The Company and the subsidiaries use forward exchange contracts to mitigate exposure to foreign
currency risk. Forward exchange contracts are accounted for as foreign currency transactions. Gains
and losses on derivative financial instruments used for hedging of foreign currency transactions are
recognized as income or expense on the same basis as the corresponding hedge position. Foreign
exchange contracts are translated at exchange rate prevailing at the balance sheet date which approximate
their fair value. The impact of hedging anticipated future transactions is deferred until the time of
recognition of the related assets or liabilities.

At December 31, 2004 and 2003, the Company and the subsidiaries have the outstanding forward
exchange contracts and deferred gains or losses as follows:

In Million
Currency 2004 2003 2004 2003

Forwards used to hedge USD 56 61 - -
monetary assets YEN 23 32 - -
GBP 12 18 - -
SGD 2 3 - -
EUR 4 - - -
KRW 3,929 - - -

Forwards used to hedge USD 5 5 - 2
monetary liabilities YEN 8,200 4 8,200 -

Forwards used to hedge anticipated USD 11 7 4 3
future purchases of goods YEN 47 - - -
CHF - 1 - -
DKK - 2 - 2
63
AND SUBSIDIARIES

In Million
Currency 2004 2003 2004 2003

Forwards used to hedge anticipated USD 57 102 - 1
future sales orders YEN 58 42 - -
EUR 1 3 - -
GBP 16 26 - -
SGD 1 2 - -
KRW 576 - - -
ZAR 2 - - -

Deferred exchange gain (loss) arising
from anticipated future transactions Baht 96 ( 14) ( 4) ( 7)

The above forward exchange contracts used to hedge the long term loan is due in 2007, the remaining
contracts are due within one year. Except for the loans that the Company made to the foreign
subsidiaries, the Company and the subsidiaries do not have any material unhedged foreign currency
assets and liabilities.

Interest Rate Risks

The operations and cash flows of the Company and subsidiaries are substantially dependent on changes
in market interest rates. The Company and subsidiaries are exposed to interest rate risk because they
have cash deposits, temporary investments, loans to subsidiaries, loans from financial institutions and
debentures. These financial assets and liabilities are principally pegged to floating market rates except
for a long-term loan and a portion of debentures which the interest rates are fixed. However, the
Company has entered into an interest rate swap agreement to hedge the interest rates for a long-term loan
and a portion of debentures as discussed in Note 14 and 15.

Cash inflows and outflows in relative to the interest rate swap are limited to the difference between fixed
contract rates and floating rate interest amounts calculated by reference to the agreed notional principal
amounts and terms of the agreements.

At December 31, 2004 and 2003, the Company and the subsidiaries have financial assets and liabilities
that are exposed to value and cash flows risks arising from changes in interest rates as follows:

Consolidated
In Million Baht %
Fixed interest rate Float interest rate Average interest rate
2004 2003 2004 2003 2004 2003

Deposits at financial institutions 317 208 1,544 1,318 0.53 0.35

Bank overdrafts - - 154 327 5.38 5.81
Short - term borrowings 12,263 13,799 - - 2.43 1.98
Long - term borrowings 6,407 350 1,131 1,295 4.08 4.99
Liabilities under finance leases 30 215 - - 5.48 5.15
Debentures 6,000 5,950 4,970 4,200 4.54 5.34
Total 24,700 20,314 6,255 5,822
64
AND SUBSIDIARIES

The Company Only
In Million Baht %
Fixed interest rate Float interest rate Average interest rate
2004 2003 2004 2003 2004 2003

Deposits at financial institutions - - 180 225 0.25 0.25
Long - term loans to subsidiaries 2,335 3,088 2,449 2,951 4.60 5.54
Total 2,335 3,088 2,629 3,176

Bank overdrafts - - 39 129 6.00 6.07
Short - term borrowings 2,194 1,907 - - 2.50 2.04
Long - term borrowings 6,318 350 60 100 3.92 3.94
Liabilities under finance leases 4 - - - 3.07 -
Debentures 6,000 5,950 4,970 4,200 4.54 5.34
Total 14,516 8,207 5,069 4,429

As at December 31, 2004, the above financial assets and liabilities are specified by year of expected
maturities as follows:

In Million Baht
Consolidated
Not exceeding Over 5
On demand 1 Year 1 5 years years

Deposits at financial institutions 1,544 317 - -

Bank overdrafts 154 - - -
Short - term borrowings - 12,263 - -
Long - term borrowings - 797 6,741 -
Liabilities under finance leases - 18 12 -
Debentures - 3,780 7,190 -
Total 154 16,858 13,943 -

In Million Baht
The Company Only
On demand 1 year 1 5 years years

Deposits in financial institutions 180 - - -
Long - term loans to subsidiaries - 1,511 3,273 -
Total 180 1,511 3,273 -

Bank Overdrafts 39 - - -
Long - term borrowings - 390 5,988 -
Liabilities under finance leases - 1 3 -
Debentures - 3,780 7,190 -
Total 39 6,365 13,181 -

65
AND SUBSIDIARIES

As at December 31, 2003, the above financial assets and liabilities are specified by year of expected
maturities as follows:

In Million Baht
Consolidated

Deposits at financial institutions 1,318 208 - -

Bank overdrafts 327 - - -
Long - term borrowings - 304 1,326 15
Liabilities under finance leases - 39 54 122
Debentures - 5,180 4,970 -
Total 327 19,322 6,350 137

In Million Baht
The Company Only

Deposits in financial institutions 225 - - -
Long - term loans to subsidiaries - 1,725 4,298 16
Total 225 1,725 4,298 16

Bank Overdrafts 129 - - -
Long - term borrowings - 40 410 -
Debentures - 5,180 4,970 -
Total 129 7,127 5,380 -

Credit Risks

Credit risks arise when the counterparties fail to meet their obligations as agreed with the Company and
the subsidiaries.

The Company and the subsidiaries do not have any material credit risks because the Company and the
subsidiaries constantly evaluate the debtors status and most of the debtors are geographically dispersed.
The maximum credit risk exposure in the event other parties fail to perform their obligations is the
account value of debtors and loans to subsidiaries less the allowance for doubtful accounts as expressed
in the balance sheet.

In addition, the counterparties to financial instruments of the Company and subsidiaries include various
financial institutions. The Company and subsidiaries do not expect any of these counterparties to fail to
meet their obligations, given their high credit ratings. The maximum credit risk exposure in the event
the financial institutions fail to perform their obligation under financial instruments is the amount of net
receivable (payables) arising from forward exchange contracts as at December 31, 2004 and 2003
totalling Baht 178 million and Baht 30 million, respectively.

66
AND SUBSIDIARIES

Fair Value of Financial Instruments

Cash and cash equivalents, trade receivables and payables and other receivables and payables.

The carrying value of the above accounts approximate the fair value due to the cash status or the
relatively short - term maturities of these financial instruments.

Investments in securities

Fair values of marketable securities are estimated based on their quoted market prices. However, it is
not practicable to estimate the fair values of general investments without incurring excessive costs due
to the absence of quoted market price of similar investments.

Loans to Subsidiaries

The carrying amounts in the financial statements approximate their fair values because they are short-
term maturity loans. The carrying amounts of the long-term loans to subsidiaries approximate their fair
value estimated from the current market interest rates available for borrowings with the same maturity
profile.

Borrowings and debentures

The carrying amounts in the financial statements of accounts with fixed interest rates approximate their
fair values estimated from the current market interest rates available for borrowings or debentures with
the same maturity profile. The carrying amounts in the financial statements of other accounts with
variable interest rates approximate their fair values.

Forward exchange contracts and interest swap contract

The fair value of forward exchange contracts and interest swap contract approximates the expected
amounts that can be traded in the current exchange rate market.

27. COMPANYS OPERATIONS

In Million Baht
The Company Only
Promoted Businesses
Promoted being Granted the
Businesses being Reduction of
Granted Exemption of Corporate Income
Corporate Income Tax Rate/ Non-
Tax Promoted Businesses
(Note 24) (Note 24) Total
2004 2003 2004 2003 2004 2003

Net sales local 2,511 3,829 22,442 18,961 24,953 22,790
Other income - - 2,069 2,906 2,069 2,906
Total revenues 2,511 3,829 24,511 21,867 27,022 25,696
Less costs and expenses ( 2,469) ( 3,375) (23,316) (20,079) (25,785) (23,454)
Net profit 42 454 1,195 1,788 1,237 2,242
67
AND SUBSIDIARIES

Direct costs and expenses are charged to the businesses concerned as incurred while indirect costs and
expenses are allocated to individual businesses based on revenues of each business.

As at December 31, 2004 and 2003, the Company computed income tax payable on taxable income of non-
promoted businesses and on 50% of taxable income of promoted businesses being granted the reduction of
the corporate income tax. The taxable income was computed based on net accounting income for each
business adjusted by the equity in net profit of subsidiaries and associated companies, certain items of
non-taxable income, certain non-deductible expenses for income tax computation.

28. COMMITMENTS AND CONTINGENT LIABILITIES

As at December 31, 2004 the Company and subsidiaries had commitments and contingent liabilities as
follows:

a. The Company and subsidiaries had unused letters of credit amounted to approximately Baht 16
million and Baht 179 million, respectively.

b. The Company and subsidiaries were contingently liable for letters of guarantee issued by local
banks to Government organizations amounting to approximately Baht 246 million and Baht 1,089
million, respectively

c. Cooperative Technical Agreements with Maejo University whereby the university allowed the
Company to use its land and construction thereon in developing black tiger prawn ponds and as the
research and training center for a period of ten years commencing from January 1, 1994. Under the terms of
this agreement, the Company is committed to transfer the ownership of the Project property to the
university at the expiration of the agreement and to pay total annual compensation of not less than Baht
0.5 million to the university. The net book value of the above assets as at December 31, 2004 and 2003,
amounted to approximately Baht 6 million. However, the Company has entered into the agreement with
the university to extend the agreement to December 31, 2006 and to increase the annual compensation to
approximately Baht 1.5 million.

d. Long-term lease agreements covering office premises, facilities, land, farms and vehicles with
certain related and other companies for a period of 2-16 years expiring in 2005 to 2019. The annual total
rental and facilities charges for the Company and subsidiaries amounted to approximately Baht 250
million and Baht 579 million, respectively.

e. The Company and certain subsidiaries have commitments to pay for construction costs, machinery
and other service expenses as indicated in the agreements totalling Baht 367 million and Baht 268
million, respectively.

68
AND SUBSIDIARIES

29. ADDITIONAL INFORMATION

The followings are expenses for the years ended December 31, 2004 and 2003:

In Million Baht
2004 2003 2004 2003

Depreciation expense 2,818 2,551 895 679
Amortization of expenses (income) - net ( 215) ( 94) 1 1
Employee expenses 8,876 8,096 2,047 1,660

As of December 31, 2004 and 2003, the Companys numbers of employees are 11,033 and 7,138
respectively.

30. EVENTS AFTER THE BALANCE SHEET DATE

On October 29, 2004, the shareholders, at extraordinary meeting #1/2004 resolved for the Company to
accept a business transfer from three wholly-owned subsidiaries of the Company; namely Seafoods
Enterprise Company Limited, Thai Prawn Culture Center Company Limited and Klang Company
Limited. The purpose of the transfer was to restructure the aquaculture business comprising of feed mill,
farming and processing operations and allow them to be operated in the same company. The transaction
value is approximately Baht 1,052 million. The transfer of such business has been completed in February
2005.

On January 12, 2005, the Board of Directors of the Company resolved for CPIN to subscribe for the right
issued share capital of Charoen Pokphand (India) Private Limited (CP India) up to 32.4 million shares,
the portion for which other shareholders of CP India (Charoen Pokphand Group Company Limited and
other three related companies), may not subscribe, with a value of Baht 311 million. If the other four
shareholders of CP India waive their subscription rights and CPIN takes over the subscription, CPINs
shareholding will increase from 19% to 71.2% and CP India will become an indirect subsidiary of the
Company. As at the approval date of the financial statements by the Board of Director, the share
subscription of the other shareholders has not yet been effected.

31. RECLASSIFICATION OF ACCOUNT

Certain accounts in the 2003 financial statements were reclassified to conform with the 2004 financial
statement presentation.

Quick Facts
(As of December 31, 2004)
Head Offce C.P. Tower, 313 Silom Road, Bangrak, Bangkok 10500, Thailand
Telephone Number Main: (662) 625-8000
Corporate Secretary Offce: (662) 625-8353-4
Investor Relations Offce: (662) 638-2935-6
Facsimile Number (662) 638-2942
Web Address http://www.cpfoods.net
Business Category Agro-industrial and foods
Legal Status A public limited company registered in Thailand
Registration Number Listed company No. 271
Registered Capital THB 8,206.7 million (all in ordinary shares)
Paid-up Capital THB 5,727.6 million (all in ordinary shares)
Par Value THB 1.00 per share
Trading Symbol on the SET CPF for ordinary shares
CPF-W2 for warrants
CPF07NA for debentures No. 1/2004 series 1
CPF09NA for debentures No. 1/2004 series 2
Dividend Policy
CPF has a policy to pay dividends to shareholders 4 times a year from operating results of
each quarter. The interim dividend shall be paid from results of the 1st, 2nd, and 3rd quarter. The annual
dividend shall be paid from results of the 4th quarter. Total dividend paid each year shall approximately
be 50% of net income after income taxes and legal reserve. The annual and interim dividend payments
might be subject to change, depending on the Companys operations, fnancial position, future projects
and overall economic conditions.
CPF, in addition, has duty to comply with the terms and conditions of CPFs amortized deben-
tures No. 1/2000 due in 2005, CPFs amortized debentures No. 1/2001 due in 2006, CPFs debentures
No. 1/2004 series 1 due in 2007, as well as series 2 due in 2009, which prohibit CPF to pay cash divi-
dends to shareholders in the amount exceeding 60% of net proft in each fscal year for the duration of
the term of those debentures. In addition, if CPF is not able to service interest or any amount becomes
due to the debenture-holders, it will not be permitted to pay cash dividends to shareholders.
For the subsidiaries that are public limited company, each company has policy to pay dividend
about 50% of its net proft after taxes and legal reserve. For other subsidiaries, the dividend payment will
depend upon its future investment plan, its fnancial structure, and its liquidity.
Number of shareholders
Type Number of persons Number of shares held
1. Thai person 16,412 1,522,423,274
2. Foreign person 154 25,451,018
3. Thai juristic person 145 3,464,094,644
4. Foreign juristic person 102 715,593,540
Total 16,813 5,727,562,476
Top ten major shareholders
Names Number of shares held % Holding
1. Charoen Pokphand Group Co., Ltd.
(1)
and Related Persons by section 258 2,817,041,915 49.2
2. UNS Agro-chemical Co., Ltd. 279,950,259 4.9
3. Thai NVDR Co., Ltd. 124,297,398 2.2
4. Boston Safe Deposit and Trust Company 118,772,346 2.1
5. The Bank of New York (Nominees) Limited 96,707,249 1.7
6. Ms. Valaiporn Jirapoommin 77,000,000 1.3
7. Nomura Singapore Limited-Customer Segregated Account H 64,000,000 1.1
8. Mr.Montri Jiaravanont 51,144,300 0.9
9. Ms. Naree Jirapoommin 51,000,000 0.9
10. Clearstream nominees Ltd. 45,794,036 0.8
(1) Shareholders of Charoen Pokphand Group Co., Ltd. comprise of 46 persons and 3 juristic persons. Detail of shareholders is as
reported at Business Development Department, Ministry of Commerce
Foreign Holding Limit
CPF shares may be transferred without restriction, unless such transfer of shares would cause
the aliens to hold shares in CPF in excess of 40 percent of the total number of CPFs issued ordinary
shares.
The aliens may acquire ordinary shares of CPF in excess of the restricted ratio prescribed
in preceding paragraph by means of subscription of newly issued ordinary shares (including dividend
shares or ordinary shares issued to the holders of ordinary shares who have acquired the shares
under conditions in this paragraph) issued and offered for sale by CPF; provided that the holding of new
ordinary shares in such case, when added to the ordinary shares held by aliens according to previous
paragraph, shall not cause the total number of ordinary shares held by aliens to exceed 49 percent of
the total number of ordinary shares then issued by CPF. This 49 percent restriction on shareholding
by the aliens shall apply to the case of transfer of ordinary shares from the aliens who have acquired
new ordinary shares by means of subscription of capital increase shares issued and offered for sale by
CPF under conditions in this paragraph (including dividend shares or new ordinary shares issued to the
holders of ordinary shares who have acquired such ordinary shares under conditions in this paragraph)
to aliens in every stage of transfer until such ordinary shares are transferred to the non-aliens.
As of November 25, 2004, the foreign holding in CPFs shares was approximately 12.94% of
CPF paid-up shares.
Shareholding Structure
(As of the latest closing date of CPFs register book on November 25, 2004)
1978
Founded under the name Charoen Pokphand Feedmill Co., Ltd. to produce and distribute animal feed
in southern Thailand
1987
Expanded into livestock farming with the objective of moving towards further integration

Listed on the Stock Exchange of Thailand (SET) under the name of CPF
1988
Entered the aquaculture business (shrimp feed manufacturing and distribution, shrimp farming and
shrimp processing for export)
1994
Became a public company limited and change its name to Charoen Pokphand Feedmill Public Com-
pany Limited
1998
Share acquisition in the Charoen Pokphand Groups agro-industrial public limited companies in Thailand
to be under its management
1999
Share acquisition in 9 agro-industrial and food companies of Charoen Pokphand Group. Under this
new structure, resulted from the acquisition in 1998 and this time, CPF Group has business opera-
tions throughout Thailand. Its business can be classifed into 2 main businesses, namely livestock and
aquaculture. Both businesses are fully integrated operations, from feed raw materials procurement, feed
manufacture and distribution, animal breeding, meat processing, and manufacturing of food products
from meat.

Renamed Charoen Pokphand Foods Public Company Limited to refect the Companys business
structure and strategy to become a world-class food producer
2000
Changed dividend payout policy (please see detail under Dividend Policy page 54)

Increased shareholding in Charoen Pokphand (USA) Inc., making it the Companys subsidiary
2001
Split its par value of ordinary shares from THB 10 to THB 1 per share

Set up a new subsidiary, Aqua Beauty, Inc., to be as a distribution arm for seafood products in the
US market
2002
Set up 6 new subsidiaries, which CPF directly and indirectly has 99.99% shareholding in these
companies, as follows:
1) C.P. Aquaculture (Beihai) Co., Ltd., to manufacture and distribute aquatic feed and to operate aquatic
farms in the Peoples Republic of China
2) C.P. Food Product (Shanghai) Co., Ltd., to operate Thai restaurants in the Peoples Republic of
China
3) CPF Europe S.A., to import and distribute the Companys products in the European Union
4) CPF IT Center Co., Ltd., to provide information technology services mainly to companies within the
CPF Group
5) CPF Training Center Co., Ltd., to provide training services mainly for management and employees
within the CPF Group
6) Fusion Foods Limited, a joint venture investment with a group of British businessmen, to distribute
the Companys products in the United Kingdom. CPF indirectly has 52.00% shareholdings in this
company.
2003
Set up 4 new subsidiaries, which CPF directly and indirectly has 99.99% shareholding in these
companies, as follows:
1) Aqua - Agri Foods International, Inc., to be a distribution channel for food products in the US market
2) Universal Foods and Marketing Co. Ltd., to distribute ready-to-eat food products both wholesale and
retail, and to operate convenience stores and fast food kiosks in Thailand
3) International Pet Foods Co. Ltd., to be a wholesaler and retailer of pet food products in Thailand
4) C.P. Aquaculture (Hainan) Co., Ltd., to produce and distribute animal feed in the Peoples Republic
of China
From Past to Present

Increased shareholding from 18.00% to 99.99 % in Chanthaburi Aquaculture Farm Co., Ltd., which
operates shrimp farming business in Thailand, making it the Companys subsidiary

Increased shareholding from 19.20% to 31.70% in C.P. Aquaculture (India) Private Limited, which is
involved in shrimp feed production and distribution and the operation of shrimp hatchery in India,
making it the Companys affliate

Entered into a joint venture with Aviagen, Inc., to establish Ross Breeders Siam Co., Ltd., to produce and
distribute parent-stock chicks (broiler line) in Thailand, making it the Companys affliate. CPF indirectly
has 49.99% shareholding in this company.
2004
84.49% share acquisition, by its subsidiaries, in C.P. Standart Gida Sanayi ve Ticaret A.S. (CPS), a
company involved in an integrated chicken business in the Republic of Turkey.

Set up 2 new subsidiaries as follows:

1) CPF Tokyo Company Limited, to import and distribute processed meat and ready meal products in
Japan. CPF indirectly has 99.99% shareholdings in this company.
2) Joint venture with Shrimp Improvement Systems, L.L.C. to set up Shrimp Improvement (Thailand)
Company Limited to operate shrimp breeding business in Thailand. CPF has 51.00% shareholdings in
this company.

At the Extraordinary Shareholders Meeting No. 1/2004, the shareholders resolved to transfer the aquatic
animal processing business of 3 subsidiaries, namely; Seafoods Enterprise Company Limited, Thai
Prawn Culture Company Limited, and Klang Company Limited to be under CPF. The transfer business
includes aquatic feed manufacturing, aquatic farming, and processing. The transfer is expected to be
completed within the 1st quarter of 2005.

CPFs Board of Directors resolved to set up 3 new subsidiaries, which are expected to be completed
within the 1st quarter of 2005, as follows:
1) Calibre Nature (M) Sdn Bhd, to operate aquaculture business in Malaysia, including aguatic feed
manufacturing and distribution, aquatic farming, and processing. CPF has 99.99% shareholdings in
this company.
2) CP-Yonekyu Company Limited, a joint-venture with Yonekyu Corporation, to produce food products
from meat. CPF has 80.50% shareholdings in this company.
3) Charoen Pokphand Foods (UK) Limited, to operate chilled ready meal products for the UK market.
CPF indirectly has 100.00% shareholdings in this company.
Note : The history of the Company under this section is mainly the business development and
the investment of the Company in brief.
Important Dates in the Fiscal Year 2004
Date Detail
April 21 Annual General Shareholders Meeting
April 28 Annual dividend payment of THB 0.04 per share for the 4th quarter results of 2003
September 9 Interim dividend payment of THB 0.07 per share from retained earnings and the frst 6 months
results of 2004
October 29 Extraordinary Shareholders Meeting No. 1/2004
December 9 Interim dividend payment of THB 0.04 per share for the 3rd quarter results of 2004
Subsidiaries (Sorted by Business Type and Shareholding Percentage)
As of December 31, 2004, there are 38 subsidiaries in which CPF directly or indirectly holds more than
50% of their paid-up capital.
Livestock Business in Thailand (Sorted by Shareholding Percentage)
9 Bangkok Farm Company Limited
Type of Business Livestock farming & processing plant
Head Offce Bangkok, Thailand
Telephone Number 0-2641-1234
Facsimile Number 0-2641-1979
Registered Capital THB 166,650,000 (all in ordinary shares)
Par Value THB 100 per share
Shareholding 99.99%
Information of Companies in which the Company has Shareholding
2 Bangkok Feedmill Company Limited
Type of Business Livestock feedmill and farming
Shareholding 99.99%
1 Bangkok Livestock Processing Company Limited
Type of Business Broiler Integration
Shareholding 99.99%
8 B.P. Feedmill Company Limited
Head Offce Saraburi, Thailand
Shareholding 99.99%
3 Charoen Pokphand Industry Company Limited
Shareholding 99.99%
4 C.P. Agro-Industry Company Limited
Type of Business Livestock farming
Head Offce Suratthani, Thailand
Shareholding 99.99%
7 C.P. Food Industry Export Company Limited
Type of Business Food processing plant
Shareholding 99.99%
5 C.P. Food Products Company Limited
Type of Business Food processing plant
Shareholding 99.99%
6 C.P. Merchandising Company Limited
Type of Business Investment and international trading
Registered Capital THB 1,850,000,000 (all in ordinary
shares)
Shareholding 99.99%
10 Universal Foods and Marketing Company Limited
Type of Business Wholesale and retail of food products,
and fast food outlets
Shareholding 99.99%
13 International Pet Foods Company Limited
Type of Business Pet Food Production and Distribution
Shareholding 99.99%
11 Rajburi Feedmill Company Limited
Head Offce Rajburi, Thailand
Telephone Number 0-3236-8181-9
Shareholding 99.99%
12 Vee Food Products Company Limited
Type of Business Food processing plant and distribution
Shareholding 99.99%
14 Bangkok Agro-Industrial Products Public Company
Limited
Shareholding 99.90%
15 Charoen Pokphand Northeastern Public Company
Limited
Shareholding 99.61%
16 Bangkok Produce Merchandising Public Company
Limited
Type of Business Livestock feed raw material distribution
and broiler integration
Shareholding 99.44%
Aquaculture Business in Thailand (Sorted by Shareholding Percentage)
17 Chanthaburi Aquaculture Farm Company Limited
Type of Business Shrimp farming
Shareholding 99.99%
19 Pokphand Aquatech Company Limited
Type of Business Aquatic feed production and distribution
Head Offce Chonburi, Thailand
Shareholding 99.99%
18 Seafoods Enterprise Company Limited
Type of Business Shrimp processing plant
Shareholding 99.99%
20 Klang Company Limited
Type of Business Shrimp processing plant
Shareholding 99.99%
21 Trad Prawn Culture Company Limited
Shareholding 99.91%
22 Thai Prawn Culture Center Company Limited
Type of Business Shrimp farming & shrimp processing
plant
Head Offce Songkhla, Thailand
Shareholding 99.89%
23 Savee Farming Company Limited
Shareholding 99.84%
24 Shrimp Improvement Systems (Thailand)
Company Limited
Type of Business Shrimp hatchery business
Registered Capital THB 8,000,000 (comprise of 792,000
ordinary shares and 8,000 preferred
shares)
Shareholding 51.00%
Businesses Related to Operations in Thailand (Sorted by Shareholding Percentage)
25 Aqua Beauty, Inc.
Type of Business Importer and distributor of seafood
products in USA
Head Offce USA
Registered Capital USD 5,000,000 (all in ordinary shares)
Par Value USD 1.00 per share
Shareholding 99.99%
26 Aqua-Agri Foods International, Inc.
Type of Business Importer and distributor of seafood
products in USA
Head Offce USA
Facsimile Number 1-410-418-8938
Registered Capital USD 3,000 (all in ordinary shares)
Shareholding 99.99%
27 CPF Europe S.A.
Type of Business Importer and distributor of processed
meat and food products in EU
Head Offce Belgium
Registered Capital EUR 1,000,000 (all in ordinary shares)
Par Value EUR 1.00 per share
Shareholding 99.99%
28 CPF Tokyo Company Limited
meat and food products in Japan
Head Offce Japan
Registered Capital JPY 100,000,000 (all in ordinary shares)
Par Value JPY 1,000 per share
Shareholding 99.99%
29 Fusion Foods Limited
meat and food products in UK
Head Offce England
Registered Capital GBP 300,000 (all in ordinary shares)
Par Value GBP 1.00 per share
Shareholding 52.00%
30 CPF Training Center Company Limited
Type of Business Training center service provider
Shareholding 99.99%
31 CPF IT Center Company Limited
Type of Business Information technology service provider
Shareholding 99.99%
Other Businesses in Thailand (Sorted by Shareholding Percentage)
Overseas Business (Sorted by Shareholding Percentage)
33 C.P. Aquaculture (Beihai) Co., Ltd.
Type of Business Aquatic feed production & distribution
and aquaculture farming in the Peoples
Republic of China
Head Offce Kwangsi, Peoples Republic of China
Shareholding 100.00%
34 C.P. Aquaculture (Hainan) Co., Ltd.
Type of Business Aquatic feed production & distribution
and aquaculture farming in the Peoples
Republic of China
Head Offce Hainan, Peoples Republic of China
32 C.P. Food Product (Shanghai) Co., Ltd.
Type of Business Thai food restaurant in the Peoples
Republic of China
Head Offce Shanghai, Peoples Republic of China
35 CPF Investment Limited
Type of Business Investment
Head Offce British Virgin Island
36 Charoen Pokphand (USA), Inc.
Type of Business Broiler integrations (Operation wound up
in March 2004)
Head Offce USA
Shareholding 99.95%
37 BKP Holdings Limited
Type of Business Investment
Head Offce British Virgin Island
Shareholding 99.44%
38 C.P. Standart Gida Sanayi ve Ticaret A.S.
Type of Business Chicken Integration
Head Offce Turkey
Registered Capital YTL 20,000,000 (all in ordinary shares)
Par Value YTL 0.001 per share
Shareholding 84.49%
1 Ross Breeders Siam Company Limited
Type of Business Chicken breeding and distribution
Shareholding 49.99%
9 Kinghill Limited
Type of Business Investment holding, of which invested
100.00% in company that
manages shopping center, Super Brand
Mall, in the Peoples Republic of China
Head Offce Cayman Island
Shareholding 20.84%
Affliates (Sorted by Shareholding Percentage)
As of December 31, 2004, there are 10 companies in which CPF directly or indirectly holds more than
20.00% to 50.00% of their paid-up capital.
2 Arbor Acres Thailand Company Limited
Type of Business Chicken breeding and distribution
Shareholding 49.99%
3 Charoen Pokphand Holdings (Malaysia) Sdn. Bhd.
100.00% in 9 livestock feed
production & livestock farming compa-
nies in Malaysia
Head Offce Malaysia
Registered Capital RM 36,550,000 (all in ordinary shares)
Par Value RM 1.00 per share
Shareholding 49.64%
4 C.P. Vietnam Livestock Company Limited
Type of Business Livestock feed production & farming in
Vietnam
Head Offce Vietnam
Shareholding 40.00%
6 C.P. Aquaculture (India) Private Limited
India
Head Offce India
Registered Capital Rs 250,000,000 (all in ordinary shares)
Par Value Rs 10.00 per share
Shareholding 31.70%
5 Lotus-CPF (PRC) Investment Company Limited
Type of Business Investment holding in 5 companies
(63%, 81%, 90%, 90%, and 90%) which
operate the Lotus wholesale stores in
the Peoples Republic of China
Head Offce British Virgin Islands
Shareholding 40.00%
7 Nava 84 Company Limited
99.93% in economic crop
plantation company in Thailand
shares)
Shareholding 25.00%
8 Allianz C.P. General Insurance Company Limited
Type of Business Insurance business
Shareholding 24.46%
10 C.P. Seven Eleven Public Company Limited
Type of Business Convenience store business in Thailand,
under 7-Eleven trademark
shares)
Shareholding 21.32%
Companies in which CPF holds more than 10.00% but less than 20% (sorted by shareholding percentage)
As of December 31, 2004, there are 4 companies in which CPF directly and indirectly holds more than
10 % but less than 20% of their paid-up capital.
1 Charoen Pokphand (India) Private Limited
India
Head Offce India
Registered Capital Rs 330,000,000 (all in ordinary shares)
Par Value Rs 10.00 per share
Shareholding 19.00%
2 ACME ECI Investment Company Limited
Type of Business Investment holding
Shareholding 17.95%
3 Trillion Brewery Co., Ltd.
Type of Business Investment holding
Shareholding 17.95%
4 CPPC Public Company Limited
Type of Business Plastic products manufacturing & distri-
bution
Shareholding 12.48%
Companies in which CPF hold less than 10.00% (Sorted by shareholding percentage)
As of December 31, 2004, there are 6 companies in which CPF directly and indirectly holds less than
10 % of their paid-up capital.
1 Chia Tai (Jilin) Company Limited
50.00% in company that
operates feedmill business and farming
in the Peoples Republic of China
Head Offce Peoples Republic of China
Shareholding 9.99%
2 Siam Makro Public Company Limited
Type of Business Wholesale business under Makro
trademark
Shareholding 9.13%
3 Vee Rum Choke Company Limited
Type of Business Real estate business
Shareholding 9.00%
4 CP Land Company Limited
Type of Business Real estate business
Shareholding 6.49%
5 Ayudhya Allianz C.P. Life Public Company Limited
Type of Business Life insurance business
Shareholding 3.47%
6 True Corporation Public Company Limited
Type of Business Telecommunication business
Shareholding 3.33%
Securities Issued by the Company in brief
Ordinary Shares
(as of December 31, 2004)
Registered capital : THB 8,206,664,000 comprising of 8,206,664,000 ordinary shares
with a par value of THB 1
Paid-up capital : THB 5,727,562,476 comprising of 5,727,562,476 ordinary shares
with a par value of THB 1
Change in Paid-Up Capital
Capital
Paid-Up Capital Details
Increase
(THB million) (THB million) (No. of Shares)
January 1978 - 5 500,000 Initial registered capital
March 1987 25 30 3,000,000 Offering to existing shareholders
May 1987 70 100 10,000,000 Offering to existing shareholders
June 1987 100 200 20,000,000 Offering to existing shareholders
August 1987 100 300 30,000,000 Offering to existing shareholders
July 1988 300 600 60,000,000 Offering to existing shareholders
June 1989 600 1,200 120,000,000 Offering to existing shareholders
November 1998 385 1,585 158,529,451 Offering to existing shareholders of Bangkok Agro-Industrial
Products Plc. (BAP), Bangkok Produce Merchandising Plc. (BKP),
Charoen Pokphand Northeastern Plc. (CPNE) in exchange for
shares of the 3 companies following the acquisition plan
May 1999 159 1,744 174,380,941 Stock dividend for 1998 results
December 1999 174 1,918 191,818,767 Interim stock dividend for 1999 results
July 2000 1,902 3,820 382,028,584 Offering to existing shareholders
July 2001 0.09855 3,820 382,038,439 Exercise of warrant#1 (CPF-W1), 3 times from October 2000 to
July 2001
September 2001 - 3,820 3,820,384,390 Par value change from THB 10 to THB 1
January 2002 0.15 3,820 3,820,536,390 Exercise of warrant#1 (CPF-W1)
April 2002 73 3,893 3,893,613,330 Exercise of warrant#1 (CPF-W1)
July 2002 481 4,374 4,374,439,231 Exercise of warrant#1 (CPF-W1)
October 2002 475 4,849 4,849,590,421 Exercise of warrant (CPF-W)
January 2003 859 5,708 5,708,162,731 Last exercise of warrant (CPF-W), and frst exercise of Warrant#2
(CPF-W2)
April 2003 0.009 5,708 5,708,171,806 Exercise of warrant#2 (CPF-W2)
July 2003 6 5,714 5,714,071,566 Exercise of warrant#2 (CPF-W2)
October 2003 4 5,718 5,718,532,611 Exercise of warrant#2 (CPF-W2)
January 2004 9 5,727 5,727,546,606 Exercise of warrant#2 (CPF-W2)
July 2004 0.002 5,727 5,727,549,116 Exercise of warrant#2 (CPF-W2)
October 2004 0.013 5,727 5,727,562,476 Exercise of warrant#2 (CPF-W2)
January 2005 0.058 5,728 5,727,852,576 Exercise of warrant#2 (CPF-W2)
Securities Issued by the Company in brief
Depositary Receipts of Ordinary Shares
US Exchange : Over the Counter (OTC), United States Exchange
DR Underlying Share Ratio : 1DR : 4 ordinary shares
DR Outstanding (December 31, 2004) : 565,120 units
Registrar : The Bank of New York
Non-Voting Depositary Receipts (NVDRs)
As of December 31, 2004, CPF ordinary shares held by Thai NVDR Co., Ltd. (Thai NVDR) was
133,405,998 shares, equivalent to 2.33 percent of total issued and paid-up capital. Investors holding
NVDRs of CPF issued by Thai NVDR will receive all fnancial benefts similar to investing in CPF ordinary
shares, except for voting rights in shareholders meetings. Therefore. voting rights of other shareholders
will increase comparing to total number of voting shares, excluding shares held by Thai NVDR. Investors
can fnd number of CPF shares held by Thai NVDR at www.set.or.th/nvdr.
Warrants to subscribe ordinary shares offered to existing shareholders (CPF-W2)
(as of December 31, 2004)
Warrant Type : Warrants issued to existing shareholders
Issue Date : July 22, 2002
Maturity : 3 years, commencing from the issue date
Selling Price : THB 0 per unit (THB zero)
Amount Outstanding : 383,871,598 units
Secondary Market : The Stock Exchange of Thailand
Registrar : Thailand Securities Depository Company Limited
Exercise Price : THB 4.00 per share
Exercise Ratio : 1 warrant: 5 ordinary shares
Exercise Date : First exercise date is 2 January 2003 and following exercise dates
are on the frst business day of April, July, October and January
until maturity. Last exercise date is July 21, 2005. In case that the
last exercise date or the closing date of register book is a holiday
of commercial banks, the exercise date or the closing date of
register book will be postponed to the next business day.
Notice to Exercise : Warrant holders must state their intention to exercise warrants
in accordance with the procedures 15 days before the exercise
date during 8.30 - 15.30 hours. The register book will be closed
21 days prior to the last exercise date in accordance with the
procedures specifed in the prospectus and/or CPF disclosures
to the SET prior to each period of notice to exercise.
Expiry Date : July 21, 2005
Debentures
As of December 31, 2004, CPF had the following outstanding debentures:
1 Amortization Debentures of Charoen Pokphand Foods Public Co., Ltd.
# 1/2000 due 2005
Type of Debenture : Unsubordinated, unsecured amortized debentures with name
registered
Total Value : THB 7,000,000,000
Offering Amount : 7,000,000 units
Face Value : THB 1,000 per unit
Offering Price : THB 1,000 per unit
Issue Date : March 9, 2000
Maturity Date : March 9, 2005
Interest Rate : Year 1-3 = 7.50% p.a.
Year 4-5 = 6-month fxed deposit rate announced by Bangkok
Bank Plc. (2 business days prior to the interest calculation period)
plus 3.00% p.a.
Interest Payment Date : Twice a year on March 9 and September 9, with the frst payment
on September 9, 2000
Amortization Schedule : Debenture repayment at the end of Year 3 as follows:
20% of Face Value on March 9, 2003
20% of Face Value on September 9, 2003
Amount Outstanding : THB 1,400,000,000
Credit Rating : None
Registrar : Bangkok Bank Plc.
2 Amortization Debentures of Charoen Pokphand Foods Public Co., Ltd.
# 1/2001 due 2006
Type of Debenture : Unsubordinated, unsecured amortized debentures with name
registered
Issue Date : March 23, 2001
Maturity Date : March 23, 2006
Interest Rate : Year 1-2 = 5.50% p.a.
Year 3 = 5.75% p.a.
Year 4-5 = 6-months fxed deposit rate announced by Bangkok
Bank Plc. (2 business days prior to the interest calculation period)
plus 3.00% p.a.
Interest Payment Date : Twice a year on March 23 and September 23, with the frst pay-
ment on September 23, 2001
Amortization Schedule : Debenture repayment as follows:
Credit Rating : A by TRIS Rating Company Limited
Registrar : Bangkok Bank Plc.
Secondary Market : Thai Bond Dealing Centre
3 Unsecured Debentures of Charoen Pokphand Foods Public Co., Ltd.
# 1/2004 Series 1 Due 2007
Type of Debenture : Unsubordinated, unsecured debentures with name registered and
having debenture holders representative
Issue Date : November 17, 2004
Maturity Date : November 17, 2007
Interest Rate : Fixed rate at 4.25% p.a.
Interest Payment Date : Twice a year on May 17 and November 17, with the frst payment
on May 17, 2005
Principal Repayment : Repay in full amount at the maturity date
Trustee & Registrar : Kasikornbank Plc.
Secondary Market : Thai Bond Dealing Centre and Stock Exchange of Thailand (Bond
Electronic Exchange)
4 Unsecured Debentures of Charoen Pokphand Foods Public Co., Ltd.
# 1/2004 Series 2 Due 2009
Type of Debenture : Unsubordinated, unsecured debentures with name registered and
having debenture holders representative
Issue Date : November 17, 2004
Maturity Date : November 17, 2009
Interest Rate : Fixed rate at 5.50% p.a.
Interest Payment Date : Twice a year on May 17 and November 17, with the frst payment
on May 17, 2005
Principal repayment : Repay in full amount at the maturity date
Trustee & Registrar : Kasikornbank Plc.
Secondary Market : Thai Bond Dealing Centre and Stock Exchange of Thailand (Bond
Electronic Exchange)
Remarks : For information on terms and conditions of debentures no. (3) and (4), please visit www.sec.or.th.
Share Registrar and Warrant Registrar
Thailand Securities Depository Co., Ltd.
The Stock Exchange of Thailand Building, 4
th
, 6
th
, and 7
th
Floors
62 Rachadapisek Road, Klongtoey, Bangkok 10110, Thailand.
Telephone number (662) 359-2800
Facsimile number (662) 359-1259
Bond Registrar of Amortization Debentures of Charoen Pokphand Foods Plc.
#1/2000 due 2005
and Amortization Debentures of Charoen Pokphand Foods Plc. #1/2001 due 2006
Securities Services Department, Bangkok Bank Plc.
333 Silom Road, Bangrak, Bangkok 10500, Thailand.
Telephone number (662) 230-1477-8
Facsimile number (662) 626-4545-6
Bond Registrar of Debentures of Charoen Pokphand Foods Plc.
#1/2004 Series 1 due 2007 and Unsecured Debentures of Charoen Pokphand
Foods Plc. #1/2004 Series 2 due 2009
Securities Services Department, Kasikornbank Plc.
1 Soi Kasikornthai, Ratburana Road Ratburana, Bangkok 10140, Thailand.
Telephone number (662) 470-1982
American Depositary Receipts Registrar
The Bank of New York, Depositary Receipts Division
101 Barclay Street, 22
nd
Floor, New York 10286, USA.
Website: www.bankofny.com/adr
Contact List:
New York - Vinu Kurian Telephone number 212-815-8365
Hong Kong - Eugenia Lee Telephone number (852) 2840-9821
Auditors
Mrs. Sudchit Boonprakob C.P.A. (Thailand) Registration No. 2991
Ms. Kalyarat Chaivaropongsa C.P.A. (Thailand) Registration No. 3460 and
Ms. Nittaya Chetchotiros C.P.A. (Thailand) Registration No. 4439
KPMG Poomchai Audit Ltd.
Empire Tower, 21
st
Floor 195 South Sathorn Road, Sathorn, Bangkok 10120, Thailand
Telephone number (662) 677-2000, 658-5000
References
Annual Report Checklist
Annual report checklist in accordance with Form 56-2 of the Securities
and Exchange Commission
Item Page number
1. General information
1.1 of the company 54
1.2 of companies in which the company has shareholding 58
1.3 of reference persons 69
2. Financial summary 3
3. Business
3.1 Business structure 3
3.2 Business profle 2, 6
3.3 Sales structure 9
3.4 Business objective 4, 5, 10
3.5 Operations of each product line 10
3.6 Environmental and energy saving 14-15
3.7 Research and development 15
3.8 Production standard and taxes benefts 17, 18
3.9 View on industries 19
4. Risk considerations 21
5. Shareholding structure and management
5.1 Shareholders 55
5.2 Management
5.2.1 Management structure 31
5.2.2 Board of Directors 31, 37
5.2.3 Audit Committee 34, 38
5.2.4 Executive Board 35, 38
5.2.5 Executives 36, 38
5.2.6 Personnel 43
5.2.7 Corporate governance 44
6. Connected transactions 51
7. Management discussion and analysis on results and fnancial status 26
8. Auditors fee 53

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The Company at a glance 2

Message from the Chairman 4

Livestock Business - Domestic Sales 39,661 43,325 47,117

Livestock Business - Export Sales 9,688 12,419 9,923

Aquaculture Business - Domestic Sales 14,675 16,564 16,943

Aquaculture Business - Export Sales 6,714 4,158 3,697

Livestock Business 4,409 4,893 12,089

Aquaculture Business 0 1,750 2,021

Aquaculture business Shrimp

Feed 16,958 23 18,059 22 16,295 18

Breeder 2,250 3 2,013 2 2,026 2

Meat - Domestic Sales 19,466 26 21,760 26 27,011 29

Meat - Export Sales 9,688 13 12,419 15 9,923 11

Others 987 1 1,493 2 1,725 2

Feed 12,403 17 12,636 15 12,775 14

Breeder 416 1 1,128 1 1,184 1

Meat - Domestic Sales 916 1 1,906 2 2,474 3

Meat - Export Sales 6,714 9 4,158 5 3,697 4

Others 940 1 894 1 510 1

Meat and food products

Meat and food products

Shrimp Feedmill, Baan Phru * 50% Income Tax Exemption 2003-2008

Broiler Farm 2, Saraburi * Income Tax Exemption 2001-2008

Shrimp Hatchery, J.R.2 * Income Tax Exemption 2002-2010

Shrimp Hatchery, Tha Bon * Income Tax Exemption 2002-2010

Aquaculture Feedmill, Mahachai 2 * Income Tax Exemption 2004-2012

Shrimp Feedmill, Ranod * Income Tax Exemption 2002-2008

Broiler Farm 3, Saraburi * Income Tax Exemption 2003-2011

Integrated Chicken Business, Nakhon Ratchasima * Income Tax Exemption 2003-2011

Shrimp Hatchery, J.R.4 * Income Tax Exemption 2004-2012

Shrimp Hatchery, Pratew * Income Tax Exemption 2004-2012

Chicken Breeder Farm, Petchaboon * Income Tax Exemption 1998-2006

Chicken Breeder Farm, Prajinburi * Income Tax Exemption 2003-2011

Duck Farm, Prajinburi * Income Tax Exemption 2002-2010

Swine Farm, Karnchanaburi * Income Tax Exemption 2004-2012

Duck Breeder Farm, Saraburi * Income Tax Exemption 2003-2011

Duck Farm, Prajinburi * Income Tax Exemption 2003-2011

Animal Feedmill, Tha Rua * Income Tax Exemption 2001-2009

Food Product Plant 2, Saraburi * Income Tax Exemption 2002-2010

Further Processing Plant, Saraburi * Income Tax Exemption 2004-2012

Broiler Farm, Prajinburi * Income Tax Exemption 2002-2010

Broiler Farm, Prajinburi * Income Tax Exemption 2003-2011

Broiler Farm, Chachoengsao * Income Tax Exemption 2003-2011

Aquatic Feedmill, Baan Buang * Income Tax Exemption 2002-2010

Aquaculture Processing Plant, Ranod * Income Tax Exemption 1996-2004

Pet Food Plant, Saraburi * Income Tax Exemption 2004-2012

China 2,794 693 2,844 640 1.79 -7.65

Japan 45,845 16,692 46,264 16,261 0.91 -2.58

Others 22,201 5,525 25,369 5,697 14.27 3.11

Feed 16,958 23% 18,059 22% 16,295 18% -10%

Breeder 2,250 3% 2,013 2% 2,026 2% 1%

Others 987 1% 1,493 2% 1,725 2% 16%

Feed 12,403 17% 12,636 15% 12,775 14% 1%

Breeder 416 1% 1,128 2% 1,184 1% 5%

Meat & Foods - Domestic Sales 916 1% 1,906 2% 2,474 3% 30%

Meat & Foods - Export Sales 6,714 9% 4,158 5% 3,697 4% -11%

Others 940 1% 894 1% 510 1% -43%

Bachelor of Criminology from University of California, USA

Bachelor of Science in Chemistry from Johns Hopkins

Honorary Doctorate in Public Administration from

Commercial Defense College, Thailand

Enrollment in Directors Accreditation Program No. 5/2003,

880,000 shares, equivalent to 0.015%