CPE — Audit Report / Information 2019

Nov 6, 2019

CHAROEN POKPHAND ENTERPRISE (TAIWAN) CO., LTD. PARENT COMPANY ONLY FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT ACCOUNTANTS DECEMBER 31, 2019 AND 2018

For the convenience of readers and for information purpose only, the auditors' report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors' report and financial statements shall prevail.

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			December 31, 2019		December 31, 2018
	Assets	Notes	AMOUNT	%	AMOUNT	%
	Current assets
1100	Cash and cash equivalents	6(1)	\$ 86,377	-	\$ 55,303	1
1150	Notes receivable, net	6(2)	301,121	2	331,198	2
1170	Accounts receivable, net	6(2)	1,712,470	10	1,616,029	11
1180	Accounts receivable - related parties	7	26,496	-	34,908	-
1200	Other receivables		7,136	-	20,201	-
130X	Inventories, net	6(3)	1,438,813	9	1,039,107	7
1400	Biological assets - current	6(5)	1,186,865	7	1,121,389	8
1410	Prepayments		263,304	2	539,758	4
1470	Other current assets	8	7,700	-	7,450	-
11XX	Total current assets		5,030,282	30	4,765,343	33
	Non-current assets
1550	Investments accounted for under	6(4)
	equity method		3,059,156	18	2,296,811	16
1600	Property, plant and equipment	6(6) and 8	7,752,623	46	6,988,772	48
1755	Right-of-use assets	6(7)	341,526	2	-	-
1780	Intangible assets	6(8)	592	-	1,564	-
1830	Biological assets - non-current	6(5)	386,143	2	347,199	2
1840	Deferred income tax assets	6(23)	67,664	1	55,861	-
1900	Other non-current assets		89,304	1	103,751	1
15XX	Total non-current assets		11,697,008	70	9,793,958	67
1XXX	Total assets		\$ 16,727,290	100	\$ 14,559,301	100

CHAROEN POKPHAND ENTERPRISE (TAIWAN) CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS (Expressed in thousands of New Taiwan dollars)

(Continued)

			December 31, 2019		December 31, 2018
	Liabilities and Equity	Notes	AMOUNT	%	AMOUNT	%
	Current liabilities
2100	Short-term borrowings	6(9)	\$ 2,070,000	12	\$ 2,563,784	18
2110	Short-term notes and bills payable	6(10)	978,659	6	619,270	4
2150	Notes payable		455,941	3	355,439	2
2160 2170	Notes payable - related parties Accounts payable	7	820 641,396	- 4	1,974 660,006	- 5
2180	Accounts payable - related parties	7	15,378	-	12,625	-
2200	Other payables		656,693	4	547,619	4
2220	Other payables - related parties	7	22,750	-	21,430	-
2230	Current income tax liabilities		161,634	1	196,470	1
2280	Current lease liabilities		19,952	-	-	-
2300	Other current liabilities	6(11)(12) and 8	580,000	4	584,013	4
21XX	Total current liabilities		5,603,223	34	5,562,630	38
	Non-current liabilities
2540	Long-term borrowings	6(11) and 8	2,730,000	16	1,880,000	13
2570	Deferred income tax liabilities	6(23)	21,087	-	18,314	-
2580	Non-current lease liabilities		308,246	2	-	-
2600	Other non-current liabilities	6(12)(13)	142,402	1	166,381	1
25XX	Total non-current liabilities		3,201,735	19	2,064,695	14
2XXX	Total liabilities		8,804,958	53	7,627,325	52
	Equity attributable to owners of
	parent
	Share capital
3110	Share capital - common stock	6(14)	2,679,910	16	2,679,910	19
	Capital surplus
3200	Capital surplus	6(15)	2,137	-	1,652	-
	Retained earnings	6(16)
3310	Legal reserve		733,781	4	638,708	4
3350	Unappropriated retained earnings		2,907,219	17	2,341,559	16
	Other equity interest
3400	Other equity interest		1,599,285	10	1,270,147	9
3XXX	Total equity		7,922,332	47	6,931,976	48
	Significant contingent liabilities and	6(12)(25) and 9
	unrecognised contract commitments
3X2X	Total liabilities and equity		\$ 16,727,290	100	\$ 14,559,301	100

CHAROEN POKPHAND ENTERPRISE (TAIWAN) CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS (Expressed in thousands of New Taiwan dollars)

CHAROEN POKPHAND ENTERPRISE (TAIWAN) CO., LTD. PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

(Expressed in thousands of New Taiwan dollars, except for earnings per share amounts)

			Year ended December 31
				2019			2018
	Items	Notes		AMOUNT	%		AMOUNT	%
4000	Operating revenue	6(17) and 7	\$	20,173,520	100	\$	18,170,438	100
5000	Operating costs	6(3)(13)(22) and 7	(	17,352,813) (	86) (		15,711,283) (	86)
5950	Net operating margin			2,820,707	14		2,459,155	14
	Operating expenses	6(13)(22) and 7
6100	Selling and marketing expenses		(	883,445) (	4) (		805,048) (	4)
6200	General and administrative expenses		(	501,022) (	3) (		491,898) (	3)
6450	Expected credit impairment gain (loss)	12(2)		20	-	(	94)	-
6000	Total operating expenses		(	1,384,447) (	7) (		1,297,040) (	7)
6500	Other income and expense, net	6(5)(18)	(	12,411)	-		7,253	-
6900	Operating profit			1,423,849	7		1,169,368	7
	Non-operating income and expenses
7010 7020	Other income Other gains and losses	6(19) and 7 6(20)	(	7,129 18,919)	- -		4,063 27,129	- -
7050	Finance costs	6(21)	(	74,605) (	1) (		59,884)	-
7070	Share of profit of associates and joint	6(4)
	ventures accounted for using equity
	method, net			403,770	2		86,479	-
7000	Total non-operating income and
	expenses			317,375	1		57,787	-
7900	Profit before income tax			1,741,224	8		1,227,155	7
7950	Income tax expense	6(23)	(	277,298) (	1) (		276,428) (	2)
8200	Profit for the year		\$	1,463,926	7	\$	950,727	5
	Other comprehensive income
	Components of other comprehensive income that will not be reclassified to profit or loss
8311 8330	Other comprehensive income, before tax, actuarial gains on defined benefit plans Share of other comprehensive income of	6(13) 6(4)	\$	2,561	-	\$	7,357	-
8349	associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss Income tax related to components of	6(23)		372,541	2		55,215	1
	other comprehensive income that will not
	be reclassified to profit or loss		(	512)	-	(	5,212)	-
8310	Other comprehensive income that will not be reclassified to profit or
	loss			374,590	2		57,360	1
	Components of other comprehensive income that will be reclassified to profit or loss
8361	Currency translation differences of	6(4)
	foreign operations		(	44,672)	-		49,857	-
8360	Other comprehensive (loss) income that will be reclassified to profit or
	loss		(	44,672)	-		49,857	-
8300	Other comprehensive income for the year		\$	329,918	2	\$	107,217	1
8500	Total comprehensive income for the year		\$	1,793,844	9	\$	1,057,944	6
	Earnings per share (in dollars)	6(24)
9750	Basic earnings per share		\$		5.46	\$		3.55
9850	Diluted earnings per share		\$		5.46	\$		3.54

CHAROEN POKPHAND ENTERPRISE (TAIWAN) CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2019 AND 2018 (Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

				Retained Earnings					Other Equity Interest
	Notes	Share capital - common stock	Capital surplus	Legal reserve		Unappropriated retained earnings		Financial statements translation differences of foreign operations	Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income		Unrealised gain or loss on available for-sale financial assets		Total equity
2018
Balance at January 1, 2018		\$ 2,679,910	\$ 1,145	\$ 495,401	\$	2,335,867	(\$	22,617 )	\$ -	\$	1,187,792	\$	6,677,498
Effect of retrospective application and restatement		-	-	-		-		-	1,187,792	(	1,187,792 )		-
Balance at January 1 after adjustments		2,679,910	1,145	495,401		2,335,867	(	22,617 )	1,187,792		-		6,677,498
Profit for the year		-	-	-		950,727		-	-		-		950,727
Other comprehensive income (loss)		-	-	-		2,245		49,857	55,115		-		107,217
Total comprehensive income		-	-	-		952,972		49,857	55,115		-		1,057,944
Appropriations of 2017 earnings	6(16)
Legal reserve		-	-	143,307	(	143,307 )		-	-		-		-
Cash dividends to shareholders		-	-	-	(	803,973 )		-	-		-	(	803,973 )
Capital surplus - dividends not received by shareholders		-	507	-		-		-	-		-		507
Balance at December 31, 2018		\$ 2,679,910	\$ 1,652	\$ 638,708	\$	2,341,559	\$	27,240	\$ 1,242,907	\$	-	\$	6,931,976
2019
Balance at January 1, 2019		\$ 2,679,910	\$ 1,652	\$ 638,708	\$	2,341,559	\$	27,240	\$ 1,242,907	\$	-	\$	6,931,976
Profit for the year		-	-	-		1,463,926		-	-		-		1,463,926
Other comprehensive income (loss)		-	-	-		780	(	44,672 )	373,810		-		329,918
Total comprehensive income (loss)		-	-	-		1,464,706	(	44,672 )	373,810		-		1,793,844
Appropriations of 2018 earnings	6(16)
Legal reserve		-	-	95,073	(	95,073 )		-	-		-		-
Cash dividends to shareholders		-	-	-	(	803,973 )		-	-		-	(	803,973 )
Capital surplus - dividends not received by shareholders		-	485	-		-		-	-		-		485
Balance at December 31, 2019		\$ 2,679,910	\$ 2,137	\$ 733,781	\$	2,907,219	(\$	17,432 )	\$ 1,616,717	\$	-	\$	7,922,332

CHAROEN POKPHAND ENTERPRISE (TAIWAN) CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

			Year ended December 31
	Notes		2019		2018
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax		\$	1,741,224	\$	1,227,155
Adjustments
Adjustments to reconcile profit (loss)
Expected credit impairment (gain) loss	12(2)	(	20 )		94
Depreciation	6(6)(22)		587,631		522,508
Depreciation of right-of-use	6(7)(22)		35,504		-
Amortization	6(22)		4,211		3,762
Interest income Interest expense	6(19) 6(21)	(	255 ) 74,605	(	193 ) 59,884
Provision for loss on inventory market price decline	6(3)		45,200		7,200
Change in fair value less cost to sell of biological assets	6(5)(18)		12,411	(	7,253 )
Share of profit or loss of associates and joint ventures	6(4)
accounted for using equity method		(	403,770 )	(	86,479 )
(Gain) loss on disposal of property, plant and equipment	6(20)	(	4,241 )		2,054
Gain arising from lease modifications	6(7)	(	1 )		-
Changes in operating assets and liabilities
Changes in operating assets Notes receivable			30,077		9,034
Accounts receivable		(	96,421 )	(	119,971 )
Accounts receivable - related parties			8,412	(	16,501 )
Other receivables			13,065	(	12,165 )
Inventories		(	444,906 )	(	97,117 )
Biological assets		(	116,831 )	(	158,623 )
Prepayments			278,542	(	189,151 )
Changes in operating liabilities Notes payable			100,502	(	68,656 )
Notes payable - related parties		(	1,154 )	(	6,625 )
Accounts payable		(	18,610 )		153,471
Accounts payable - related parties			2,753		8,492
Other payables			135,288		46,706
Other payables - related parties			1,320	(	6,780 )
Accrued pension liabilities Cash inflow generated from operations		(	18,008 ) 1,966,528	(	14,319 ) 1,256,527
Cash paid for income tax		(	321,676 )	(	312,150 )
Net cash flows from operating activities			1,644,852		944,377
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of investment accounted for using the equity method		(	66,860 )	(	51,000 )
Acquisition of property, plant and equipment	6(26)	(	1,388,578 )	(	1,429,007 )
Proceeds from disposal of property, plant and equipment			8,172		24,384
Acquisition of intangible assets Increase in other current assets	6(8)	(	- 250 )	( (	660 ) 5,450 )
Decrease (increase) in other non-current assets			11,208	(	22,425 )
Cash receipt of interest			255		193
Cash receipt of dividends			36,154		163,546
Net cash flows used in investing activities		(	1,399,899 )	(	1,320,419 )
CASH FLOWS FROM FINANCING ACTIVITIES
(Decrease) increase in short-term borrowings		(	493,784 )		327,401
Increase in short-term notes and bills payable Proceeds from long-term borrowings			359,389 4,630,000		119,781 2,900,000
Payment of long-term borrowings		(	3,780,000 )	(	2,130,000 )
Cash payment for interest		(	77,117 )	(	59,572 )
Cash dividends paid	6(16)	(	803,973 )	(	803,973 )
Payment of lease liability	6(7)	(	48,879 )		-
Capital surplus - dividends not received by shareholders			485		507
Net cash flows (used in) from financing activities Net increase (decrease) in cash and cash equivalents		(	213,879 ) 31,074	(	354,144 21,898 )
Cash and cash equivalents at beginning of year	6(1)		55,303		77,201
Cash and cash equivalents at end of year	6(1)	\$	86,377	\$	55,303

CHAROEN POKPHAND ENTERPRISE (TAIWAN) CO., LTD. PARENT COMPANY ONLY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2019 AND 2018 (Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. HISTORY AND ORGANISATION

Charoen Pokphand Enterprise (Taiwan) Co., Ltd. (the "Company") was incorporated on August 22, 1977 as a company limited by shares under the Statute for Investment by Overseas Chinese and the provisions of the Company Act of the Republic of China. The main activities of the Company are the manufacture and sale of animal feeds, livestock, chicken and processed meat products. The Company's common stock has been traded on the Taiwan Stock Exchange since July 27, 1987. Charoen Pokphand Foods Public Company Limited ("CPF"), which is incorporated in Thailand, indirectly holds 39% equity interest in the Company.

2. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORISATION

These parent company only financial statements were authorised for issuance by the Board of Directors on March 24, 2020.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards ("IFRS") as endorsed by the Financial Supervisory Commission ("FSC")

New standards, interpretations and amendments endorsed by the FSC effective from 2019 are as follows:

	Effective date by
	International Accounting
New Standards, Interpretations and Amendments	Standards Board
Amendments to IFRS 9, 'Prepayment features with negative	January 1, 2019
compensation'
IFRS 16, 'Leases'	January 1, 2019
Amendments to IAS 19, 'Plan amendment, curtailment or settlement'	January 1, 2019
Amendments to IAS 28, 'Long-term interests in associates and joint	January 1, 2019
ventures'
IFRIC 23, 'Uncertainty over income tax treatments'	January 1, 2019
Annual improvements to IFRSs 2015-2017 cycle	January 1, 2019

Except for the following, the above standards and interpretations have no significant impact to the Company's financial condition and financial performance based on the Company's assessment.

IFRS 16, 'Leases'

• A. IFRS 16, 'Leases', replaces IAS 17, 'Leases' and related interpretations and SICs. The standard requires lessees to recognise a 'right-of-use asset' and a lease liability (except for those leases with terms of 12 months or less and leases of low-value assets). The accounting stays the same for lessors, which is to classify their leases as either finance leases or operating leases and account for those two types of leases differently. IFRS 16 only requires enhanced disclosures to be provided by lessors.
• B. The Company has elected to apply IFRS 16 by not restating the comparative information (referred herein as the 'modified retrospective approach') when applying "IFRSs" effective in 2019 as endorsed by the FSC. Accordingly, the Company increased 'right-of-use asset' by \$354,829 and 'lease liability' by \$340,701, and decreased prepayments by \$14,174, property, plant and equipment by \$7,376 and lease payable by \$7,422 with respect to the lease contracts of lessees on January 1, 2019.
• C. The Company has used the following practical expedients permitted by the standard at the date of initial application of IFRS 16:
• (a) The use of a single discount rate to a portfolio of leases with reasonably similar characteristics.
• (b) The exclusion of initial direct costs for the measurement of 'right-of-use asset'.
• (c) The use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease.
• D. The Company calculated the present value of lease liabilities by using the weighted average incremental borrowing interest rate of 1.44%.
• E. The Company recognised lease liabilities which had previously been classified as 'operating leases' under the principles of IAS 17, 'Leases'. The reconciliation between operating lease commitments under IAS 17 measured at the present value of the remaining lease payments, discounted using the lessee's incremental borrowing rate and lease liabilities recognised as of January 1, 2019 is as follows:

Operating lease commitments disclosed by applying IAS 17 as at
December 31, 2018	\$	378,263
Add: Lease payable recognised under finance lease by applying IAS 17
as at December 31, 2018		7,422
Less: Short-term leases	(	1,218)
Add: Lease contracts previously identified as service agreements		4,029
Total lease contracts amount recognised as lease liabilities by applying
IFRS 16 on January 1, 2019	\$	388,496
Incremental borrowing interest rate at the date of initial application		1.44%
Lease liabilities recognised as at January 1, 2019 by applying IFRS 16	\$	340,701

(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Company

New standards, interpretations and amendments endorsed by the FSC effective from 2020 are as follows:

	Effective date by
	International Accounting
New Standards, Interpretations and Amendments	Standards Board
Amendments to IAS 1 and IAS 8, 'Disclosure Initiative-Definition of	January 1, 2020
Material'
Amendments to IFRS 3, 'Definition of a business'	January 1, 2020
Amendments to IFRS 9, IAS 39 and IFRS 7, 'Interest rate benchmark	January 1, 2020
reform'

The above standards and interpretations have no significant impact to the Company's financial condition and financial performance based on the Company's assessment.

(3) IFRSs issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs endorsed by the FSC are as follows:

	Effective date by
	International Accounting
New Standards, Interpretations and Amendments	Standards Board
Amendments to IFRS 10 and IAS 28, 'Sale or contribution of assets	To be determined
between an investor and its associate or joint venture'	by International
	Accounting Standards
	Board
IFRS 17, 'Insurance contracts'	January 1, 2021
Amendments to IAS 1, 'Classification of liabilities as current or non current'	January 1, 2022

The above standards and interpretations have no significant impact to the Company's financial condition and financial performance based on the Company's assessment.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these parent company only financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

The parent company only financial statements of the Company have been prepared in accordance with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers", International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the "IFRSs").

• (2) Basis of preparation
• A. Except for the following items, the parent company only financial statements have been prepared under the historical cost convention:
  • (a) Defined benefit liabilities recognised based on the net amount of pension fund assets less present value of defined benefit obligation.
  • (b) Biological assets measured at fair value less costs to sell.
• B. The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the parent company only financial statements are disclosed in Note 5.
• (3) Foreign currency translation
• A. The parent company only financial statements are presented in New Taiwan dollars, which is the Company's functional currency.

• B. Foreign currency transactions and balances

  • (a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in profit or loss in the period in which they arise.
  • (b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognised in profit or loss.
  • (c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

• (d) All foreign exchange gains and losses are presented in the statement of comprehensive income within 'other gains and losses'.

• (4) Classification of current and non-current items
• A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:
  • (a) Assets arising from operating activities that are expected to be realised, or are intended to be sold or consumed within the normal operating cycle;
  • (b) Assets held mainly for trading purposes;
  • (c) Assets that are expected to be realised within twelve months from the balance sheet date;
  • (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.
• B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:
  • (a) Liabilities that are expected to be settled within the normal operating cycle;
  • (b) Liabilities arising mainly from trading activities;
  • (c) Liabilities that are to be settled within twelve months from the balance sheet date;
  • (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.
• (5) Cash equivalents

Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

(6) Accounts and notes receivable

• A. Accounts and notes receivable entitle the Company a legal right to receive consideration in exchange for transferred goods or rendered services.
• B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(7) Impairment of financial assets

For financial assets at amortised cost, at each reporting date, the Company recognises the impairment provision for expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognises the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable or contract assets that do not contain a significant financing component, the Company recognises the impairment provision for lifetime ECLs.

(8) Derecognition of financial assets

The Company derecognises a financial asset when the contractual rights to receive the cash flows from the financial asset expire.

(9) Operating leases (lessor)

Lease income from an operating lease (net of any incentives given to the lessee) is recognised in profit or loss on a straight-line basis over the lease term.

(10) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted-average method. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads allocated based on normal operating capacity. It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses.

(11) Investments accounted for using equity method/ subsidiaries

• A. Subsidiaries are all entities (including structured entities) controlled by the Company. The Company controls and entity when the Company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Investments in subsidiaries are accounted for using equity method in these parent company only financial statements.
• B. Unrealised gains on transactions between the Company and its subsidiaries are eliminated. The accounting policies of the subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Company.
• C. The Company's share of its subsidiaries' post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Company's share of losses in a subsidiary equals or exceeds its interest in the subsidiary, the Company continues to recognise losses proportionate to its ownership.

D. Pursuant to the "Regulations Governing the Preparation of Financial Reports by Securities Issuers," profit (loss) of the current period and other comprehensive income in the parent company only financial statements shall equal to the amount attributable to owners of the parent in the financial statements prepared with basis for consolidation. Owners' equity in the parent company only financial statements shall equal to equity attributable to owners of the parent in the financial statements prepared with basis for consolidation.

(12) Biological assets

Biological assets are measured at their fair value less costs to sell. Except for the case where the fair value cannot be measured reliably, they are measured at its cost less accumulated depreciation and impairment losses. Gains or losses on changes in fair value less costs to sell are recognised in profit or loss.

(13) Property, plant and equipment

• A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised.
• B. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
• C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.
• D. The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets' residual values and useful lives differ from previous estimates or the patterns of consumption of the assets' future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, 'Accounting Policies, Changes in Accounting Estimates and Errors', from the date of the change.

The estimated useful lives of property, plant and equipment are as follows:

Land improvements	3~30 years
Buildings and structures	3~60 years
Machinery and equipment	3~20 years
Transportation equipment	6 years
Leasehold improvements	3~20 years
Other equipment	3~20 years

(14) Leasing arrangements (lessee) - right-of-use assets/ lease liabilities

Effective 2019

• A. Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Company. For short-term leases or leases of low-value assets, lease payments are recognised as an expense on a straight-line basis over the lease term.
• B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are fixed payments, less any lease incentives receivable.

The Company subsequently measures the lease liability at amortised cost using the interest method and recognises interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognised as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

• C. At the commencement date, the right-of-use asset is stated at cost comprising the following:
• (a) The amount of the initial measurement of lease liability; and
• (b) Any lease payments made at or before the commencement date.

The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset's useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognised as an adjustment to the right-of-use asset.

(15) Leased assets / operating leases (lessee)

Prior to 2019

• A. Based on the terms of a lease contract, a lease is classified as a finance lease if the Company assumes substantially all the risks and rewards incidental to ownership of the leased asset.
• (a) A finance lease is recognised as an asset and a liability at the lease's commencement at the lower of the fair value of the leased asset or the present value of the minimum lease payments.

• (b) The minimum lease payments are apportioned between the finance charges and the reduction of the outstanding liability. The finance charges are allocated to each period over the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

• (c) Property, plant and equipment held under finance leases are depreciated over their estimated useful lives. If there is no reasonable certainty that the Compaany will obtain ownership at the end of the lease, the asset shall be depreciated over the shorter of the lease term and its useful life.

• B. Payments made under an operating lease (net of any incentives received from the lessor) are recognised in profit or loss on a straight-line basis over the lease term.

(16) Intangible assets

Computer software is stated at cost and amortised on a straight-line basis over its estimated useful life of 3 years.

(17) Impairment of non-financial assets

The Company assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell or value in use. When the circumstances or reasons for recognising impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognised.

(18) Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is measured over the period of the borrowings using the effective interest method.

(19) Notes and accounts payable

• A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes and accounts payable are those resulting from operating and non-operating activities.
• B. The short-term notes and accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(20) Derecognition of financial liabilities

A financial liability is derecognised when the obligation specified in the contract is either discharged or cancelled or expires.

(21) Employee benefits

A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognised as expense in that period when the employees render service.

• B. Pensions
• (a) Defined contribution plans

For defined contribution plans, the contributions are recognised as pension expense when they are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent of a cash refund or a reduction in the future payments.

• (b) Defined benefit plans
• i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Company in current period or prior period. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of government bonds (at the balance sheet date) of a currency and term consistent with the currency and term of the employment benefit obligations.
• ii. Remeasurements arising on defined benefit plans are recognised in other comprehensive income in the period in which they arise and are recorded as retained earnings.
• iii. Past service costs are recognised immediately in profit or loss.
• C. Employees' compensation and directors' and supervisors' remuneration

Employees' compensation and directors' and supervisors' remuneration are recognised as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates.

• (22) Income tax

• A. The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity.

• B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

• C. Deferred tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. However, the deferred tax is accounted of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.
• D. Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognised deferred tax assets are reassessed.

(23) Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.

(24) Dividends

Dividends are recorded in the Company's financial statements in the period in which they are resolved by the Company's shareholders. Cash dividends are recorded as liabilities; stock dividends are recorded as stock dividends to be distributed and are reclassified to ordinary shares on the effective date of new shares issuance.

(25) Revenue recognition

A. Sales of goods

(a) The Company manufactures and sells animal feeds, cooked food, agricultural livestock products and related consumable food products. Sales are recognised when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer's acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customers, and either the customers have accepted the products in accordance with the sales contract, or the Company has objective evidence that all criteria for acceptance have been satisfied.

• (b) Revenue from sales of goods is recognised based on the price specified in the contract, net of the estimated volume discounts, sales discounts and allowances. Accumulated experience is used to estimate and provide for the volume discounts, sales discounts and allowances using the expected value method, and revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur. The estimation is subject to an assessment at each reporting date. A refund liability is recognised for expected sales discounts and allowances payable to customers in relation to sales made until the end of the reporting period. No element of financing is deemed present as the sales are made with a credit term of 3 to 120 days, which is consistent with market practice.
• (c) A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.
• B. Financing components

The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

The preparation of these parent company only financial statements requires management to make critical judgements in applying the Company's accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year; and the related information is addressed below:

(1) Critical judgements in applying the Company's accounting policies

None.

(2) Critical accounting estimates and assumptions

A. Evaluation of inventories

As inventories are stated at the lower of cost and net realisable value, the Company must determine the net realisable value of inventories on balance sheet date using judgements and estimates. The Company evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realisable value. Such an evaluation of inventories is principally based on the demand for the products within the specified period in the future. Therefore, there might be material changes to the evaluation.

As of December 31, 2019, the carrying amount of inventories was \$1,438,813.

B. Measurement of fair value of biological assets

Except when fair value cannot be reliably measured, biological assets should be measured at fair value less costs to sell on initial recognition and at the end of each reporting period. The Company has to identify whether the active market prices are available for each category of biological assets, to determine the relevance between the nature of biological assets and the chosen market, and to decide which major items should be accounted for as costs to sell. The Company then estimates the fair value less costs to sell based on the information mentioned above. Any fluctuations in market price and costs to sell could materially affect the carrying amount of biological assets.

As of December 31, 2019, the carrying amount of biological assets was \$1,573,008.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash

	December 31, 2019	December 31, 2018
Cash on hand and revolving funds	\$ 7,276	\$ 9,138
Checking accounts	964	335
Demand deposits	78,137	45,830
Total	\$ 86,377	\$ 55,303

• A. The Company transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.
• B. On December 31, 2019, the Company has restricted cash and cash equivalents pledged as collateral totalling \$7,700, classified as other financial assets and shown as 'other current assets'. Please refer to Note 8 for details.
• (2) Notes and accounts receivable

		December 31, 2019	December 31, 2018
Notes receivable	\$	301,121	\$	331,198
Accounts receivable	\$	1,714,126	\$	1,618,358
Less: Allowance for uncollectible accounts	(	1,656) (		2,329)
	\$	1,712,470	\$	1,616,029

A. The aging analysis of accounts receivable is as follows:

December 31, 2019			December 31, 2018
\$	1,659,117	\$	1,551,365
	52,630		64,304
	2,070		2,165
	309		524
\$	1,714,126	\$	1,618,358

The above ageing analysis was based on past due date.

• B. As of December 31, 2019 and 2018, accounts receivable and notes receivable were all from contracts with customers. As of January 1, 2018, the balance of accounts receivable and notes receivable from contracts with customers amounted to \$1,836,384.
• C. As of December 31, 2019 and 2018, all the Company's notes receivable were not past due.
• D. The credit quality of accounts receivable was in the following category based on the Company's Credit Quality Control Policy:

	December 31, 2019	December 31, 2018
With guarantee	\$	125,721	\$	135,342
Without guarantee		1,588,405		1,483,016
	\$	1,714,126	\$	1,618,358

The Company holds commercial papers, real estate and deposits collateral as security for accounts receivable.

• E. As at December 31, 2019 and 2018, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Company's notes receivable were \$301,121 and \$331,198, respectively, while the amount that best represents the Company's accounts receivable were \$1,712,470 and \$1,616,029, respectively.
• F. Information relating to credit risk is provided in Note 12(2).

(3) Inventories

		December 31, 2019
		Allowance for
	Cost	valuation loss	Book value
Raw materials	\$ 885,619	\$ -	\$ 885,619
Packing supplies	22,517	-	22,517
Work in progress	26,663	-	26,663
Finished goods	564,014	( 60,000)	504,014
	\$ 1,498,813	(\$ 60,000)	\$ 1,438,813

			December 31, 2018
	Cost		valuation loss		Book value
Raw materials	\$ 559,822	\$	-	\$	559,822
Packing supplies	16,213		-		16,213
Work in progress	25,800		-		25,800
Finished goods	452,072	(	14,800)		437,272
	\$ 1,053,907	(\$	14,800)	\$	1,039,107

The cost of inventories recognised as expense for the year:

		2019	2018
Cost of goods sold	\$	17,307,794	\$ 15,707,367
Loss on decline in market value		45,200	7,200
Others	(	181) (	3,284)
	\$	17,352,813	\$ 15,711,283

Others pertain mainly to gain and loss on physical inventory count and income from disposal of leftover and scraps.

(4) Investments accounted for under equity method

A. Details of investments accounted for using equity method-subsidiaries are provided as follows:

	December 31, 2019	December 31, 2018
Plenty Type Limited	\$ 2,368,685	\$ 2,005,590
Charoen Pokphand (Taiwan) Co., Ltd.	38,794	34,096
Arbor Acres (Taiwan) Co., Ltd.	384,779	64,560
Rui Mu Foods Co., Ltd.	125,701	92,150
Rui Fu Foods Co., Ltd.	141,197	100,415
	\$ 3,059,156	\$ 2,296,811

B. Share of profit (loss) of subsidiaries accounted for under the equity method:

		2019	2018
Plenty Type Limited	\$	33,957	\$ 46,184
Charoen Pokphand (Taiwan) Co., Ltd.		10,832	4,552
Arbor Acres (Taiwan) Co., Ltd.		351,508	19,997
Rui Mu Foods Co., Ltd.		17,691	11,223
Rui Fu Foods Co., Ltd.	(	10,218)	4,523
	\$	403,770	\$ 86,479

C. Share of other comprehensive income (loss) of subsidiaries accounted for using equity method:

Components of other comprehensive income that will not be reclassified to profit or loss

	2019	2018
\$	373,810	\$ 55,115
(	1,980)	26
	711	74
\$	372,541	\$ 55,215

Items may be subsequently reclassified to profit or loss

		2019	2018
Plenty Type Limited	(\$	44,672)	\$ 49,857

D. Details of the subsidiaries are provided in Note 4(3) in the Company's consolidated financial statements for the year ended December 31, 2019.

(5) Biological assets

A. Biological assets

		December 31, 2019		December 31, 2018
Biological assets - current:
Consumable biological assets	\$	1,034,392	\$	960,264
Consumable biological assets - changes in fair
value less costs to sell		24,124		36,535
Bearer biological assets		244,716		179,950
Bearer biological assets - accumulated
depreciation	(	116,367)	(	55,360)
	\$	1,186,865	\$	1,121,389
Biological assets - non-current:
Bearer biological assets	\$	470,609	\$	418,759
Bearer biological assets - accumulated
depreciation	(	84,466)	(	71,560)
	\$	386,143	\$	347,199

Consumable biological assets are those that are to be harvested as agricultural products or sold as biological assets. Bearer biological assets are those other than consumable biological assets.

B. Movements of biological assets were as follows:

		2019	2018
At January 1	\$	\$ 1,468,588	1,302,712
Purchases		979,758	1,148,972
Costs and expenses input		6,411,905	5,574,926
Sales	(	2,906,153) (	2,694,012)
Change in fair value less cost to sell	(	12,411)	7,253
Transfer to inventories	(	4,363,702) (	3,859,997)
Others	(	4,977) (	11,266)
At December 31	\$	\$ 1,573,008	1,468,588

C. Biological assets are comprised of broiler chicken, breeder chicken, fattening swine, and breeder swine, etc. Biological assets, other than fattening swine which are measured at fair value less costs to sell at each reporting date, are measured at cost less accumulated depreciation and impairment losses. The fair value of fattening swine is measured using quoted market prices as references.

The market prices or fair values at the present condition of breeders are unavailable due to short production cycle; the market prices or fair values at present condition of broiler chickens are difficult to obtain. The valuation based on a discounted cash flow method is considered unreliable given the uncertainty with respect to external factors such as climate, weather, diseases etc. Therefore, breeders and broiler chicken are measured using the cost approach. Cost of biological assets includes all costs incurred during the growth cycle such as cost of new-born animals, feed costs, and other farm costs.

Bearer biological assets are depreciated using the straight-line method through the productive period of each biological asset. The productive period of breeder swine is approximately 24 ~ 36 months; the productive period of breeder chickens is approximately 30 weeks. For the years ended December 31, 2019 and 2018, depreciation expense on biological assets amounted to \$234,992 and \$185,843, respectively.

D. Estimates of physical quantities of biological assets were as follows:

	December 31, 2019	December 31, 2018
Estimates of physical quantities (Units: heads)	5,072,582	4,918,068

E. Financial risk management policies

The Company is exposed to commodity risks arising from changes in market prices of the chickens and swine. The Company does not anticipate that the prices of the agricultural products will decline significantly in the foreseeable future and there is no available derivative or other contracts. The Company reviews the risk of a decline in the price of the agriculture products regularly, and considers to take the financial risk.

(6) Property, plant and equipment

														Construction
													in	progress and
		Land		Buildings and		Machinery		Transportation		Leasehold		Other		equipment to be
	Land	improvements		structures	and	equipment		equipment		improvements		equipment		inspected	Total
At January 1, 2019
Cost	\$ 1,839,181	\$ 94,578	\$	3,025,679	\$	3,371,948	\$	237,965	\$	963,769	\$	756,082	\$	449,319	\$ 10,738,521
Accumulated depreciation
and impairment		- ( 32,543)	(	1,054,180)	(	1,800,496)	(	142,858)	(	442,666)	(	284,382)		- (	3,757,125)
	\$ 1,839,181	\$ 62,035	\$	1,971,499	\$	1,571,452	\$	95,107	\$	521,103	\$	471,700	\$	449,319	\$ 6,981,396
2019
Opening net book amount	\$ 1,839,181	\$ 62,035	\$	1,971,499	\$	1,571,452	\$	95,107	\$	521,103	\$	471,700	\$	449,319	\$ 6,981,396
as at January 1
Additions	14,137	34,855		111,788		117,668		41,956		10,943		89,369		942,073	1,362,789
Disposals Reclassifications	-	-		-		- (		3,931)		-		-		- (	3,931)
	123,318	19,742 - ( 10,549)	(	190,930 162,257)	(	150,850 222,312)	(	5,709 33,060)	(	15,226 89,968)	(	76,793 69,485)	(	582,568) - (	- 587,631)
Depreciation Closing net book amount
as at December 31	\$ 1,976,636	\$ 106,083	\$	2,111,960	\$	1,617,658	\$	105,781	\$	457,304	\$	568,377	\$	808,824	\$ 7,752,623
At December 31, 2019
Cost Accumulated	\$ 1,976,636	\$ 149,175	\$	3,257,734	\$	3,578,256	\$	261,488	\$	985,924	\$	905,225	\$	808,824	\$ 11,923,262
depreciation and		- ( 43,092)	(	1,145,774)	(	1,960,598)	(	155,707)	(	528,620)	(	336,848)		- (	4,170,639)
impairment	\$ 1,976,636	\$ 106,083	\$	2,111,960	\$	1,617,658	\$	105,781	\$	457,304	\$	568,377	\$	808,824	\$ 7,752,623

															Construction
														in	progress and
		Land			Buildings and		Machinery		Transportation		Leasehold		Other		equipment to be
	Land	improvements			structures	and	equipment		equipment		improvements		equipment		inspected	Total
At January 1, 2018
Cost	\$ 1,531,190	\$	67,955	\$	2,317,434	\$	3,125,768	\$	212,409	\$	945,310	\$	628,388	\$	692,365	\$ 9,520,819
Accumulated depreciation
and impairment	- (		28,430)	(	971,145)	(	1,698,316)	(	122,041)	(	355,747)	(	235,545)		- (	3,411,224)
	\$ 1,531,190	\$	39,525	\$	1,346,289	\$	1,427,452	\$	90,368	\$	589,563	\$	392,843	\$	692,365	\$ 6,109,595
2018
Opening net book amount as at January 1	\$ 1,531,190	\$	39,525	\$	1,346,289	\$	1,427,452	\$	90,368	\$	589,563	\$	392,843	\$	692,365	\$ 6,109,595
Additions	12,817		19,718		129,287		107,216		28,295		15,082		96,303		1,019,405	1,428,123
Disposals	-		- (		7,370)	(	14,028)	(	2,283)	(	119)	(	2,638)		- (	26,438)
Reclassifications	295,174		8,627		637,520		245,791		13,952		8,693		52,694	(	1,262,451)	-
Depreciation	- (		5,835)	(	134,227)	(	194,979)	(	35,225)	(	92,116)	(	60,126)		- (	522,508)
Closing net book amount
as at December 31	\$ 1,839,181	\$	62,035	\$	1,971,499	\$	1,571,452	\$	95,107	\$	521,103	\$	479,076	\$	449,319	\$ 6,988,772
At December 31, 2018
Cost	\$ 1,839,181	\$	94,578	\$	3,025,679	\$	3,371,948	\$	237,965	\$	963,769	\$	767,653	\$	449,319	\$ 10,750,092
Accumulated depreciation
and impairment	- (		32,543)	(	1,054,180)	(	1,800,496)	(	142,858)	(	442,666)	(	288,577)		- (	3,761,320)
	\$ 1,839,181	\$	62,035	\$	1,971,499	\$	1,571,452	\$	95,107	\$	521,103	\$	479,076	\$	449,319	\$ 6,988,772

A. Amount of borrowing costs capitalised as part of property, plant and equipment and the range of the interest rates for such capitalisation are as follows:

	2019	2018
Amount capitalised	\$ 2,698	\$ 3,654
Interest rate range	1.12%~1.13%	1.10%~1.12%

• B. Information about the property, plant and equipment that were pledged to others as collateral is provided in Note 8.
• C. As of December 31, 2019 and 2018, the Company held 110 parcels and 114 parcels of agricultural land, respectively. The carrying amounts of land registered under the title of others amounted to \$624,803 and \$648,489, respectively. These parcels of land are registered under the title of individuals, however, the Company has agreements with those individuals to pledge these agricultural land to the Company.

(7) Leasing arrangements - lessee

Effective 2019

• A. The Company leases various assets including land, buildings, business vehicles, and other equipment. Rental contracts are typically made for periods of 1 to 22 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.
• B. The carrying amount of right-of-use assets and the depreciation charge are as follows:

	At December 31, 2019	2019
	Carrying amount	Depreciation charge
Land	\$ 322,018	\$ 25,839
Buildings	8,702	3,996
Transportation equipment (Cargo Truck)	65	258
Other equipment	10,741	5,411
	\$ 341,526	\$ 35,504

• C. For the year ended December 31, 2019, the additions to right-of-use assets was \$22,352.
• D. The Company has no significant profit or loss in relation to lease contracts for the year ended December 31, 2019.
• E. For the year ended December 31, 2019, the Company's total cash outflow for leases was \$48,879.

(8) Intangible assets

Software

		2019		2018
At January 1
Cost	\$	10,474	\$	9,814
Accumulated amortisation and impairment	(	8,910)	(	7,767)
	\$	1,564	\$	2,047
At January 1	\$	1,564	\$	2,047
Additions		-		660
Amortisation	(	972) (		1,143)
At December 31	\$	592	\$	1,564
At December 31
Cost	\$	10,474	\$	10,474
Accumulated amortisation and impairment	(	9,882) (		8,910)
	\$	592	\$	1,564

(9) Short-term borrowings

	Interest rate range	Collateral
\$ 2,070,000	1.04%~1.21%	None
	Interest rate range	Collateral
\$ 2,422,350	1.04%~1.20%	None
141,434	3.28%~4.12%	None
\$ 2,563,784
	December 31, 2019 December 31, 2018

(10) Short-term notes and bills payable

		December 31, 2019	December 31, 2018
Commercial paper payable	\$	980,000	\$ 620,000
Less: Unamortised discounts	(	1,341) (	730)
	\$	978,659	\$ 619,270
Interest rate range		0.34%~0.93%	0.64%~0.94%

The short-term notes and bills payable were guaranteed by certain financial institutions.

(11) Long-term borrowings

	Borrowing period	Interest rate
Type of borrowings	and repayment term	range		December 31, 2019
Secured loans	2019.11.15~2021.11.15	1.42%	\$	375,000
Unsecured credit loans	2017.9.6~2022.10.27	1.03%~1.50%		2,935,000
				3,310,000
	Less: Current portion (shown as 'Other current liabilities')		(	580,000)
			\$	2,730,000
	Borrowing period	Interest rate
Type of borrowings	and repayment term	range		December 31, 2018
Secured loans	2016.8.2~2022.12.15	1.42%~1.50%	\$	800,000
Unsecured credit loans	2017.8.1~2022.10.27	1.03%~1.42%		1,660,000
				2,460,000
	Less: Current portion (shown as 'Other current liabilities')		(	580,000)
			\$	1,880,000

Information on collaterals pledged for long-term borrowings is provided in Note 8.

(12) Finance lease liabilities

• A. The Company signed finance lease contracts to lease other equipment from Taiwan Warehouse Solution Corp., [Tay Warehouse Equipment Co., Ltd., Yiyi Warehouse Equipment Co., Ltd.,](javascript:openwindow() Power Handling Co., Ltd., Taiwan Shih Ban Industrial Co., Ltd., and Tedson Machine Co., Ltd.. The lease terms cover the majority of the total estimated economic lives of the leased assets.
• B. Future minimum lease payments and their present values as at December 31, 2018 are as follows:

			December 31, 2018
	Total finance lease liabilities		Future finance charges	Present value of finance lease liabilities
Current (shown as 'Other current
liabilities') Not later than one year	\$ 4,080	(\$	67)	\$ 4,013
Non-current (shown as 'Other non-current liabilities')
Later than one year but not later than five years	3,431	(	22)	3,409
	\$ 7,511	(\$	89)	\$ 7,422

(13) Pensions

A. Defined benefit plans

• (a) The Company has defined benefit pension plans in accordance with the Labor Standards Act, covering all regular employees' service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Labor Standards Act. Under the defined benefit plans, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to specific percentage of the employees' monthly salaries and wages to the retirement fund deposited with the Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company will make contributions to cover the deficit by next March.
• (b) The amounts recognised in the balance sheet are as follows:

		December 31, 2019	December 31, 2018
Present value of defined benefit obligations	(\$	436,190) (\$		442,929)
Fair value of plan assets		293,788		279,957
Net defined benefit liability	(	142,402) (		162,972)
Ending accrued pension fund		-		-
Net liabilities in the balance sheet	(\$	142,402) (\$		162,972)

(c) Movements in net defined benefit liabilities are as follows:

		Present value
		of defined		Fair value of		Net defined
	benefit obligations			plan assets		benefit liability
2019
Balance at January 1	(\$	442,929)	\$	279,957	(\$	162,972)
Current service cost	(	3,335)		-	(	3,335)
Interest (expense) income	(	3,256)		2,097	(	1,159)
	(	449,520)		282,054	(	167,466)
Remeasurements:
Return on plan assets
(excluding amounts		-		10,773		10,773
included in interest income
or expense)
Change in demographic	(	147)		-	(	147)
assumptions
Change in financial	(	3,538)		-	(	3,538)
assumptions
Experience adjustments	(	4,527)		-	(	4,527)
	(	8,212)		10,773		2,561
Pension fund contribution		-		22,503		22,503
Paid pension		21,542	(	21,542)		-
Balance at December 31	(\$	436,190)	\$	293,788	(\$	142,402)

		Present value
		of defined		Fair value of		Net defined
		benefit obligations		plan assets		benefit liability
2018
Balance at January 1	(\$	464,249)	\$	277,815	(\$	186,434)
Current service cost	(	4,412)		-	(	4,412)
Interest (expense) income	(	4,567)		2,790	(	1,777)
	(	473,228)		280,605	(	192,623)
Remeasurements:
Return on plan assets		-		8,604		8,604
(excluding amounts included
in interest income or
expense)
Change in demographic	(	4)		-	(	4)
assumptions
Change in financial	(	9,324)		-	(	9,324)
assumptions
Experience adjustments		8,081		-		8,081
	(	1,247)		8,604		7,357
Pension fund contribution		-		22,294		22,294
Paid pension		31,546	(	31,546)		-
Balance at December 31	(\$	442,929)	\$	279,957	(\$	162,972)

(d) The Bank of Taiwan was commissioned to manage the Fund of the Company's defined benefit pension plan in accordance with the Fund's annual investment and utilisation plan and the "Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labour Retirement Fund" (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-thecounter, or private placement equity securities, investment in domestic or foreign real estate securitization products, etc.). With regard to the utilisation of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorized by the Regulator. The Company has no right to participate in managing and operating that fund and hence the Company is unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2019 and 2018 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government.

(e) The principal actuarial assumptions used were as follows:

	2019	2018
Discount rate	0.65%	0.75%
Future salary increases	2.00%	2.00%

Future mortality rate was estimated based on the 5th Taiwan Standard Ordinary Experience Mortality Table.

Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

		Discount rate		Future salary increases
	Increase 1%		Decrease 1%	Increase 1%		Decrease 1%
2019
Effect on present value of
defined benefit obligation 2018	(\$	33,433)	\$	38,081	\$	37,155	(\$	33,325)
Effect on present value of defined benefit obligation	(\$	35,532)	\$	40,587	\$	39,640	(\$	35,449)

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.

• (f) Expected contributions to the defined benefit pension plans of the Company for the year ending December 31, 2020 amount to \$16,951.
• (h) As of December 31, 2019, the weighted average duration of the retirement plan is 8 years.
• B. Defined contribution plans

Effective July 1, 2005, the Company has established defined contribution pension plans (the "New Plan") under the Labor Pension Act (the "Act"), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contributes monthly an amount based on 6% of the employees' monthly salaries and wages to the employees' individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment. The pension costs for the aforementioned defined contribution pension plans of the Company for the years ended December 31, 2019 and 2018 were \$39,740 and \$37,062, respectively.

(14) Share capital - common stocks

As of December 31, 2019, the Company's authorised capital was \$3,579,000, consisting of 357,900 thousand shares of common stock, and the paid-in capital was \$2,679,910, consisting of 267,991 thousand shares of common stock with a par value of \$10 (in dollars) per share. All proceeds from shares issuance have been collected. For the years ended December 31, 2019 and 2018, there are no changes in the number of the Company's ordinary shares outstanding.

(15) Capital surplus

Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalised mentioned above should not exceed 10% of the paidin capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

(16) Retained earnings

• A. Under the Company's Articles of Incorporation, the current year's earnings, if any, shall first be used to pay all taxes and offset prior years' operating losses and then 10% of the remaining amount shall be set aside as legal reserve. A special reserve is set aside or reversed in accordance with related laws or Competent Authority. The remainder, if any, along with the accumulated unappropriated earnings in prior years, shall be distributed as shareholders' bonus as resolved by the shareholders. Cash dividends to shareholders shall account for at least 10% of the total dividends to shareholders. If cash dividend is lower than \$0.1 (in dollars) per share, dividends are distributed using share dividends.
• B. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company's paid-in capital.
• C. In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.
• D. The appropriations of earnings for 2018 and 2017 have been resolved at the shareholders' meetings on June 26, 2019 and June 13, 2018, respectively, as follows:

		2018			2017
			Dividends			Dividends
			per share			per share
	Amount		(in dollars)	Amount		(in dollars)
Legal reserve	\$ 95,073			\$ 143,307
Cash dividends	803,973	\$	3	803,973	\$	3

The effective dates for the above distribution of cash dividends are July 21, 2019 and July 18, 2018, respectively.

E. For the information relating to employees' compensation and directors' and supervisors' remuneration, please refer to Note 6(22).

(17) Operating revenue

	2019	2018
Revenue from contracts with customers	\$ 20,173,520	\$ 18,170,438

Disaggregation of revenue from contracts with customers

The Company derives revenue from the transfer of goods at a point in time.

(18) Other income and expenses, net

Other income and expenses, net are gains (losses) on change in fair value less costs to sell of biological assets.

		2019		2018
Other income and expenses, net	\$	12,411	\$	7,253
(19) Other income
		2019		2018
Rental income	\$	6,874	\$	3,870
Interest income		255		193
	\$	7,129	\$	4,063
(20) Other gains and losses
		2019		2018
Net foreign exchange gains	\$	9,573	\$	1,750
Gains (losses) on disposal of property, plant and
equipment		4,241	(	2,054)
Miscellaneous (disbursement) income	(	32,733)		27,433
	(\$	18,919)	\$	27,129

(21) Finance costs

	2019	2018
Interest expense	\$ 74,605	\$ 59,884

(22) Expenses by nature

		2019			2018
	Operating	Operating						Operating		Operating
	cost	expenses		Total		cost		expenses		Total
Employee benefit expense
Wages and salaries	\$ 973,504	\$ 490,583		\$ 1,464,087	\$	825,625	\$	455,671		\$ 1,281,296
Labor and health insurance	93,066	33,310		126,376		82,070		31,520		113,590
Pension costs	27,282	16,952		44,234		26,188		17,063		43,251
Directors' remuneration	-	37,230		37,230		-		36,164		36,164
Other personnel expenses	52,399	8,435		60,834		44,211		9,376		53,587
(Note)
Depreciation on fixed assets	550,651	36,980		587,631		484,844		37,664		522,508
Depreciation on right-of-	30,960	4,544		35,504		-		-		-
use assets
Amortisation	3,152	1,059		4,211		2,570		1,192		3,762

Note: Other personnel expenses include meal allowance, training expenses and employee benefits.

• A. As of December 31, 2019 and 2018, the Company had 2,122 and 1,895 employees, respectively, and had 5 directors for both years.
• B. For the years ended December 31, 2019 and 2018, the average employee benefits were \$801 and \$789, and the average salary expenses were \$692 and \$678, respectively. The change in adjustment on average salary expenses was 2.01%.
• C. According to the Articles of Incorporation of the Company, an amount equal to at least 1% of the Company's distributable profit of the current year should be appropriated as employees' compensation expense. If the Company has an accumulated deficit, earnings should be reserved to cover the accumulated losses in advance.
• D. For the years ended December 31, 2019 and 2018, employees' compensation was accrued at \$17,365 and \$12,152, respectively. The aforementioned amounts were recognised in wages and salaries expense.

For the year ended December 31, 2019, the employees' compensation was estimated and accrued based on 1% (as prescribed by the Company's Articles of Incorporation) of distributable profit of current year as of the end of reporting period.

For 2018, the difference of \$258 between employees' compensation of \$12,410 resolved by the Board of Directors and the amount of \$12,152 recognised in the 2018 financial statements, mainly resulting from a variance in estimation, was adjusted in profit or loss for 2019.

E. Information about employees' compensation and directors' and supervisors' remuneration of the Company as resolved by Board of Directors will be posted in the "Market Observation Post System" at the website of the Taiwan Stock Exchange.

(23) Income tax

• A. Income tax expense
• (a) Components of income tax expense:

		2019	2018
Current tax:
Current tax on profits for the year	\$	\$ 284,144	250,389
Tax on undistributed surplus earnings		2,696	46,494
Prior year income tax (over)
underestimation		-	-
Total current tax		286,840	296,883
Deferred tax:
Origination and reversal of temporary
differences	(	9,542) (	12,779)
Impact of change in tax rate		( -	7,676)
Total deferred tax	(	9,542) (	20,455)
Income tax expense	\$	\$ 277,298	276,428

(b) The income tax relating to components of other comprehensive income is as follows:

	2019	2018
Remeasurement of defined benefit
obligations	\$ 512	\$ 5,212

B. Reconciliation between income tax expense and accounting profit

		2019		2018
Tax calculated based on profit before tax and	\$	348,245	\$	245,431
statutory tax rate
Expenses disallowed by tax regulation		320		238
Tax exempt income by tax regulation	(	73,963) (		8,059)
Tax on undistributed surplus earnings		2,696		46,494
Effect from changes in tax regulation		-	(	7,676)
Income tax expense	\$	277,298	\$	276,428

C. (a) Amounts of deferred tax assets or liabilities as a result of temporary differences, tax losses and investment tax credits are as follows:

		December 31, 2019		December 31, 2018
Temporary differences:
Accrued sales discounts	\$	17,030	\$	16,463
Provision for loss on spare parts		3,131		2,642
Pension expense in excess of the limit for tax purpose		28,480		32,594
Unrealised inventory valuation loss and changes in fair value of biological assets		7,175	(	4,347)
Unrealised foreign investment income	(	17,015) (		10,224)
Unrealised exchange loss	(	149) (		75)
Others		7,925		494
	\$	46,577	\$	37,547
		December 31, 2019		December 31, 2018
Deferred tax assets	\$	67,664	\$	55,861
Deferred tax liabilities	(	21,087) (		18,314)
	\$	46,577	\$	37,547

(b) Amounts recognised in profit or loss and in other comprehensive income as a result of temporary differences are as follows:

		2019	2018
Recognised in profit or loss	\$	9,542	\$ 20,455
Recognised in other comprehensive income	(\$	512) (\$	5,212)

• D. The Company's income tax returns through 2017 have been assessed and approved by the Tax Authority.
• E. Under the amendments to the Income Tax Act which was promulgated by the President of the Republic of China on February 7, 2018, the Company's applicable income tax rate was raised from 17% to 20% effective from January 1, 2018. The Company has assessed the impact of the change in income tax rate.

(24) Earnings per share

		2019
	Amount after tax	Weighted average number of ordinary shares outstanding (shares in thousands)	Earnings per share (in dollars)
Basic earnings per share
Profit attributable to ordinary shareholders of the parent	\$ 1,463,926	267,991	\$ 5.46
Diluted earnings per share Profit attributable to ordinary shareholders of	\$ 1,463,926	267,991
the parent Assumed conversion of all dilutive potential ordinary
shares - employees' compensation	-	332
	\$ 1,463,926	268,323	\$ 5.46
		2018
	Amount after tax	Weighted average number of ordinary shares outstanding (shares in thousands)	Earnings per share (in dollars)
Basic earnings per share
Profit attributable to
ordinary shareholders of the parent	\$ 950,727	267,991	\$ 3.55
Diluted earnings per share
Profit attributable to ordinary shareholders of	\$ 950,727	267,991
the parent Assumed conversion of all dilutive potential ordinary
shares - employees' compensation	-	228
	\$ 950,727	268,219	\$ 3.54

(25) Operating leases

Prior to 2019

The Company leases certain main operating locations and farms from years 2009 to 2041. The Company recognised rental expense of \$32,131 in profit or loss for the year ended December 31, 2018.

The future aggregate minimum lease payments under non-cancellable operating leases are as follows:

	December 31, 2018
Not later than one year	\$ 31,415
Later than one year but not later than five years	112,443
Over five years	234,405
	\$ 378,263
Issued post-dated checks	\$ 13,521

(26) Supplemental cash flow information

Investing activities with partial cash payment are as follows:

		2019		2018
Acquisition of property, plant and equipment	\$	1,362,789	\$	1,428,123
Add: Opening balance of payable on equipment		60,371		66,979
Add Opening balance of financial lease liabilities		-		1,698
Less: Ending balance of payable on equipment	(	34,582) (		60,371)
Less Ending balance of financial lease liabilities		-	(	7,422)
Cash paid during the year	\$	1,388,578	\$	1,429,007

7. RELATED PARTY TRANSACTIONS

(1) Parent and ultimate controlling party

CPF (incorporated in Thailand) indirectly held 39% of the Company's equity shares. The remaining shares were held by the general public.

(2) Names of related parties and relationship

Names of related parties	Relationship with the Company
Charoen Pokphand Foods Public Company Limited (CPF)	Ultimate parent company
Charoen Pokphand (Taiwan) Co., Ltd.	Subsidiaries
Arbor Acres (Taiwan) Co., Ltd.	"
Rui Mu Foods Co., Ltd.	"
Rui Fu Foods Co., Ltd.	"
Charoen Pokphand Group Co., Ltd. (CPG)	Other related parties
C.P. Merchandising Company Limited	"
Ta Chung Investment Co., Ltd.	"
Chung Ta Investment Co., Ltd.	"
Perfect Companion (Taiwan) Co., Ltd.	"

(3) Significant related party transactions and balances

A. Operating revenue

2019		2018
\$	288,329	\$	206,342

Goods are sold based on the price lists in force and terms that would be available to third parties.

B. Purchases

	2019		2018
Purchases of goods:
Ultimate parent company	\$	32,716	\$	39,301
Subsidiary		89,087		88,064
Other related parties		16,942		10,216
	\$	138,745	\$	137,581

Goods are purchased from related parties on normal commercial terms and conditions.

C. Receivables from related parties

	December 31, 2019	December 31, 2018
Accounts receivable:
Subsidiary	\$ 26,496	\$ 34,908

The receivables from related parties arise mainly from sale transactions. The receivables are unsecured in nature and bear no interest. There are no provisions held against receivables from related parties.

D. Payables to related parties

	December 31, 2019		December 31, 2018
Notes and accounts payable:
Ultimate parent company	\$	-	\$	3,040
Subsidiary		12,980		11,559
Other related parties		3,218		-
	\$	16,198	\$	14,599

The payables to related parties arise mainly from purchase transactions. The payables bear no interest.

E. Rental income (shown as 'Other income')

2019	2018
\$ 1,771	\$ 1,771
86	86
\$ 1,857	\$ 1,857

The rental receivables are collected annually or based on the contracts.

• F. Technical service agreement
• (a) The Company signed a technical service agreement with CPG since 1996. CPG helps the Company to manufacture feeds, raise animals and to process meat products, and the Company pays compensation of THB12 million (net value) for the services annually. The commitment would not be terminated except when any of the two parties would agree to end the agreement. For the years ended December 31, 2019 and 2018, the Company recognised technical service expenses amounting to \$14,563 and \$12,869, respectively. As of December 31, 2019 and 2018, the outstanding balance was approximately \$627 and \$156, respectively.
• (b) The Company signed a technical service agreement with CPG at the end of 2015. CPG helps the Company to raise animals and provides consulting services of related technical skills, and the Company pays compensation of \$700 for the services monthly. The contract is effective for 5 years. For the years ended December 31, 2019 and 2018, the Company recognised technical service expense amounting to \$8,400 for both years. As of December 31, 2019 and 2018, the outstanding balance were both \$2,100.
• G. Trademark licensing agreement

The Company signed a trademark license agreement with CPG at the end of 2015. The contract authorises the Company to use 'CP' as trademark in the designated area (Republic of China). Royalties are paid monthly based on 1.5% of the net amount of sales. The contract is effective for 5 years. For the years ended December 31, 2019 and 2018, the Company recognised royalties amounting to \$77,909 and \$89,293, respectively. As of December 31, 2019 and 2018, the outstanding balance were \$20,023 and \$19,174, respectively.

(4) Key management compensation

2019	2018
\$ 165,892	\$ 160,860
1,556	1,517
\$ 167,448	\$ 162,377

8. PLEDGED ASSETS

The Company's assets pledged as collateral are as follows:

	Book value
	December 31,	December 31,
Pledged assets	2019	2018	Purpose
Time deposits - shown as 'Other current assets'	\$ 7,700	\$ 7,450	Guarantee deposit
Land	51,785	51,785	Long-term borrowings
Buildings and structures	186,735	192,760	Long-term borrowings
	\$ 246,220	\$ 251,995

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT COMMITMENTS

Other than those stated in Notes 6(12), (25) and 7, the significant commitments and contingent liabilities of the Company were as follows:

• (1) As of December 31, 2019 and 2018, the Company had opened unused letters of credit for purchases of raw materials and machinery of \$516,177 and \$510,882, respectively.
• (2) As of December 31, 2019 and 2018, the Company had several outstanding construction contracts and equipment purchase agreements. The balance outstanding was \$637,771 and \$123,207, respectively, and will be paid on the basis of percentage of completion.
• (3) The Company signed a contract for food sludge disposal with Fu Mao Organic Fertilizer Co., Ltd. The Company received a disposition for deferred prosecution in December 2019 as the disposal company violated the Waste Disposal Act by dumping sludge. The removal shall be completed before December 31, 2020 based on the waste disposal plan approved by the Environmental Protection Bureau Changhua County. The Company has committed to complete the disposal within the period and has accrued disposal expense and other related expense of \$41,750 (shown as Other Payables).

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD

None.

12. OTHERS

(1) Capital risk management

The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital.

(2) Financial risk of financial instruments

A. Financial instruments by category

	December 31, 2019	December 31, 2018
Financial assets
Financial assets at amortised cost / Loans and receivables
Cash and cash equivalents	\$ 86,377	\$ 55,303
Notes receivable	301,121	331,198
Accounts receivable (including related
parties)	1,738,966	1,650,937
Other accounts receivable	7,136	20,201
Refundable deposits	41,944	46,302
Other financial assets	7,700	7,450
	\$ 2,183,244	\$ 2,111,391
	December 31, 2019	December 31, 2018
Financial liabilities
Short-term borrowings	\$ 2,070,000	\$ 2,563,784
Short-term notes and bills payable	978,659	619,270
Notes payable (including related
parties)	456,761	357,413
Accounts payable (including related
parties)	656,774	672,631
Other accounts payable (including
related parties)	679,443	569,049
Long-term borrowings (including
current portion)	3,310,000	2,460,000
Other financial liabilities	-	7,422
	\$ 8,151,637	\$ 7,249,569
Lease liability	\$ 328,198	\$ -

B. Financial risk management policies

• (a) The Company's activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The Company's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company's financial position and financial performance.
• (b) Risk management is carried out by a central treasury department (Company treasury) under policies approved by the Board of Directors. Company treasury identifies, evaluates and

hedges financial risks in close cooperation with the Company's operating units.

• C. Financial risks and degrees of financial risks
• (a) Market risk

Foreign exchange risk

• i. The Company operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the USD and HKD. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations.
• ii. Management has set up a policy to require the company to manage their foreign exchange risk against their functional currency.
• iii.The Company has certain investments in foreign operations, whose net assets are exposed to foreign currency translation risk.
• iv. The Company's businesses involve some non-functional currency operations (the Company's functional currency: NTD. The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

			December 31, 2019
		Foreign currency
		amount		Book value
		(in thousands)	Exchange rate	(NTD)
(Foreign currency :
functional currency)
Financial assets
Monetary item
USD:NTD	USD	129	29.93	\$ 3,870
Non-monetary item
HKD:NTD	HKD	616,868	3.84	2,368,685
Financial liabilities
Monetary items
USD:NTD	USD	1,957	30.03	\$ 58,769
EUR:NTD	EUR	46	33.79	1,555

			December 31, 2018
		Foreign currency
		amount		Book value
		(in thousands)	Exchange rate	(NTD)
(Foreign currency :
functional currency)
Financial assets
Non-monetary item
HKD:NTD	HKD	513,664	3.904	\$ 2,005,590
Financial liabilities
Monetary item
USD:NTD	USD	6,189	30.77	\$ 190,390

v. Total exchange (loss) gain, including realised and unrealised arising from significant foreign exchange variation on the monetary items held by the Company for the years ended December 31, 2019 and 2018 amounted to \$9,573 and \$1,750, respectively.

vi. Analysis of foreign currency market risk arising from significant foreign exchange variation:

			2019
			Sensitivity analysis
	Degree of variation		Effect on profit or loss	Effect on other comprehensive income
(Foreign currency :
functional currency)
Financial assets
Monetary item
USD:NTD	1%	\$	39	\$ -
Non-monetary item
HKD:NTD	1%		-	23,687
Financial liabilities
Monetary items
USD:NTD	1%	(\$	588)	\$ -
EUR:NTD	1%	(	16)	-

			2018
			Sensitivity analysis
	Degree of variation		Effect on profit or loss	Effect on other comprehensive income
(Foreign currency :
functional currency)
Financial assets
Non-monetary item
HKD:NTD	1%	\$	-	\$ 20,056
Financial liabilities
Monetary item
USD:NTD	1%	(\$	1,904)	\$ -

Price risk

The Company's management strategy of price risk arising from biological assets is provided in Note 6(5)

Interest rate risk

• i. The Company's interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Company to cash flow interest rate risk which is partially offset by cash and cash equivalents held at variable rates. Borrowings issued at fixed rates expose the Company to fair value interest rate risk. During the years ended December 31, 2019 and 2018, the Company's borrowings at variable rate were denominated in NTD.
• ii. The Company analyses its interest rate exposure on a dynamic basis. Various scenarios are simulated taking into consideration refinancing, renewal of existing positions, alternative financing and hedging. Based on these scenarios, the Company calculates the impact on profit and loss of a defined interest rate shift. For each simulation, the same interest rate shift is used for all currencies. The scenarios run only for liabilities that represent the major interest-bearing positions.
• iii. For the years ended December 31, 2019 and 2018, if interest rates on NTD-denominated borrowings at that date had been 1% higher/lower with all other variables held constant, post-tax profit for the years ended December 31, 2019 and 2018, would have been \$26,480 and \$19,680 lower/higher, respectively, mainly as a result of higher/lower interest expense on floating rate borrowings.
• (b) Credit risk

• i. Credit risk refers to the risk of financial loss to the Company arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is the contract cash flows when counterparties could not repay in full the accounts receivable based on the agreed terms.

• ii. The Company manages its credit risk taking into consideration the entire company's concern. According to the Company's credit policy, each local entity in the Company is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilisation of credit limits is regularly monitored.

• iii.The Company adopts the following assumption under IFRS 9 to assess whether there has been a significant increase in credit risk on that instrument since initial recognition:

If the contract payments were past due over 17 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition. As a result, the Company should strengthen controls and follow-up procedures are implemented.

• iv. The Company pays attention on specific customers whose payments were past due to confirm the debts and recognises the allowance for bad debts when there is a concern about default based on the assessment of customers' credit risk.
• v. The Company classifies customers' accounts receivable in accordance with customer types. The Company applies the simplified approach using loss rate methodology to estimate expected credit loss impairment under the provision matrix basis.
• vi. The Company wrote-off the financial assets, which cannot be reasonably expected to be recovered, after initiating recourse procedures. However, the Company will continue executing the recourse procedures to secure their rights. On December 31, 2019 and 2018, the Company's written-off financial assets that are still under recourse procedures amounted to \$1,283 and \$2,173, respectively.
• vii. (i) The expected loss rate for well-reputed customers is 0.03%. On December 31, 2019 and 2018, the total book value of accounts receivable and loss allowance amounted to \$696,694 and \$0, and \$717,022 and \$0, respectively.
• (ii)The Company used the forecastability of the global economy to adjust historical and timely information to assess the default possibility of accounts receivable in accordance with customers' credit. On December 31, 2019 and 2018, the expected loss rate is as follows:

Group A		Group B	Total
December 31, 2019
Expected loss rate		0%~100%	0.003%~10%
Total book value	\$	23,065	\$ 1,020,863	\$ 1,043,928
Loss allowance		1,656	-	1,656
		Group A	Group B	Total
December 31, 2018
Expected loss rate		0%~100%	0.003%~10%
Total book value	\$	28,974	\$ 907,270	\$ 936,244
Loss allowance		2,329	-	2,329

Note: Customers are categorised into Company A and B based on their credit rating. The expected loss rate is assessed on an individual basis under each group.

viii.Movements in relation to the Company applying the simplified approach to provide loss allowance for notes and accounts receivable are as follows:

		2019	2018
		Notes and accounts receivable (including related parties)	Notes and accounts receivable (including related parties)
At January 1 IAS 39 _	\$	2,329	\$ 2,694
Adjustments under new standards		-	-
At January 1 IFRS 9 _		2,329	2,694
(Reversl of) Provision for impairment	(	20)	94
Write-offs	(	653) (	459)
At December 31	\$	1,656	\$ 2,329

The impairment loss arising from customers' contracts for the years ended December 31, 2019 and 2018 amounted to (\$20) and \$94, respectively.

• (c) Liquidity risk
• i. Cash flow forecasting is performed in the operating entities of the Company and aggregated by Company treasury. Company treasury monitors rolling forecasts of the Company's liquidity requirements to ensure it has sufficient cash to meet operational needs. Such forecasting takes into consideration the Company's financial ratio targets, covenant compliance and applicable external regulatory or legal requirements.
• ii. The table below analyses the Company's non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

Non-derivative financial liabilities

		Between 1 and
December 31, 2019	Less than 1 year	5 years	Over 5 years
Short-term borrowings	\$ 2,070,000	\$ -	\$ -
Short-term notes and bills payable	980,000	-	-
Notes payable
(including related parties)	456,761	-	-
Accounts payable
(including related parties)	656,774	-	-
Other payables
(including related parties)	679,443	-	-
Lease liabilities	22,418	121,815	214,777
Long-term borrowings
(including current portion)	620,131	2,757,687	-

		Between 1 and
December 31, 2018	Less than 1 year	5 years	Over 5 years
Short-term borrowings	\$ 2,563,784	\$ -	\$ -
Short-term notes and bills payable	620,000	-	-
Notes payable	357,413	-	-
Accounts payable
(including related parties)	672,631	-	-
Other payables
(including related parties)	569,049	-	-
Long-term borrowings
(including current portion)	608,215	1,911,015	-
Other financial liabilities	4,080	3,431	-

iii. The Company does not expect the timing of occurrence of the cash flows estimated through the maturity date analysis will be significantly earlier, nor expect the actual cash flow amount will be significantly different.

(3) Fair value information

• A. Details of the fair value of the Company's financial assets and financial liabilities not measured at fair value are provided in Note 12(2) A.
• B. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:
• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Company's investment in listed stocks is included in Level 1.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Company's investment in biological assets is included in Level 2.

Level 3: Unobservable inputs for the asset or liability.

C. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities is as follows:

December 31, 2019	Level 1		Level 2	Level 3		Total
Assets Recurring fair value
measurements Biological assets	\$	\$ -	755,525	\$	-	\$ 755,525
December 31, 2018 Assets Recurring fair value	Level 1		Level 2	Level 3		Total
measurements Biological assets	\$	\$ -	725,806	\$	-	\$ 725,806

• D. The methods and assumptions of the Company used to measure fair value are as follows:
• (a) The instruments the Company used quoted market prices as their fair values (that is, Level 1) are listed stocks, whose quoted market prices are based on the closing prices and which are classified as available-for-sale financial assets.
• (b) The Company takes into account adjustments for credit risks to measure the fair value of financial and non-financial instruments to reflect credit risk of the counterparty and the Company's credit quality.
• (c) Details of methods for measuring Level 2 Biological assets are provided in Note 6(5).
• E. For the years ended December 31, 2019 and 2018, there was no transfer between Level 1 and Level 2.
• F. For the years ended December 31, 2019 and 2018, there was no transfer into or out from Level 3.

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

A. Loans to others: None.

B. Provision of endorsements and guarantees to others during the year ended December 31, 2019: None.

C. Holding of marketable securities at December 31, 2019 (not including subsidiaries, associates and joint ventures):

		Marketable securities	Relationship with	General ledger			As of December 31, 2019
Securities held by	Types	Name	the securities issuer	account	Number of shares	Book value	Ownership	Fair value (Note 1)	Footnote
Plenty Type Limited (Cayman Islands)		Common share CHAROEN POKPHAND (USA), INC.	None	Financial assets at fair value through profit or loss	4,501,000 \$	-	0.02% \$	-
Plenty Type Limited (Cayman Islands)	Common share	CHAROEN POKPHAND FOODS PUBLIC COMPANY LIMITED	(Note 2)	Financial assets at fair value through other comprehensive income	76,800,000	2,119,249	0.89%	2,119,249

Note 1: The numbers filled in for market value are as follows:

(1) Where there is a quoted market price, the fair value is based on the closing price at the balance sheet date, the fair value of open-end funds is based on the net asset value at the balance sheet date.

(2) Where there is no quoted market price, this column is filled in with the book value per share for stocks or left blank for other instruments.

Note 2: Investee company accounted for as financial assets at fair value through other comprehensive income by Plenty Type Limited (Cayman Islands), which is ultimate parent company of the Company

D. Acquisition or sale of the same security with the accumulated cost exceeding NT\$300,000 or 20% of the Company's paid-in capital during the year ended December 31, 2019: None.

E. Acquisition of real estate reaching NT\$300,000 or 20% of paid-in capital or more during the year ended December 31, 2019: None.

F. Disposal of real estate reaching NT\$300,000 or 20% of paid-in capital or more during the year ended December 31, 2019

											Basis or
		Transaction				Status of			Relationship		reference used
Real estate		date or date	Date of		Disposal	collection of	Gain (loss)		with	Reason for	in setting	Other
disposed by	Real estate	of the event	acquisition	Book value	amount	proceeds	on disposal	Counterparty	the seller	disposal	the price	commitments
Arbor Acres (Taiwan)	Land	2019/5/13	1973/1/1	\$ 977	\$ 794,120	\$ 794,120	\$	783,044 Li Chong-Hua	Third parties	Operational	Investment	-
Co., Ltd.								and Jiuh Huei		needs	property
								Steel			appraisal report
								Corporation.

Note 1: The appraisal result should be presented in the 'Basis or reference used in setting the price' column if the disposal real estate should be appraised pursuant to the regulations.

Note 2: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT\$10 per share, the 20 % of paid-in capital shall be replaced by 10% of equity attributable to owners of the parent in the calculation.

Note 3: Date of the event referred to herein is the date of contract signing, date of payment, date of execution of a trading order, date of title transfer, date of board resolution, or other date that can confirm the counterparty and the monetary amount of the transaction, whichever is earlier.

G. Purchases or sales of goods from or to related parties reaching NT\$100,000 or 20% of paid-in capital or more during the year ended December 31, 2019:

				Transaction				Differences in transaction terms compared to third party transactions		Notes/accounts receivable (payable)
Purchaser/seller	Counterparty	Relationship with the counterparty	Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unit price	Credit term	Balance	Percentage of total notes/accounts receivable (payable)	Footnote
Lianyungang Chia Tai Agro-industry Development Co., Ltd.	Chia Tai Aquaculture (Nantong) Co., Ltd.	Other related parties	Sales	(\$212,064) (CNY 47,187 thousand)	0.94%	60 days	Same as third party transactions	Same as third party transactions	\$1,544 (CNY 359 thousand)	0.07%
Lianyungang Chia Tai Agro-industry Development Co., Ltd.	Chia Tai Animal Husbandry Investment (Beijing) Co., Ltd.	Other related parties	Purchases	\$350,334 (CNY 78,210 thousand)	2.08%	30 days	Same as third party transactions	Same as third party transactions	(\$175,765) (CNY 40,914 thousand)	12.87%

H. Receivables from related parties reaching NT\$100,000 or 20% of paid-in capital or more as at December 31, 2019: None.

I. Trading in derivative instruments undertaken during the year ended December 31, 2019: None

J. Significant inter-company transactions during the year ended December 31, 2019:

The inter-company transactions below 1% of consolidated assets or revenue are not disclosed.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China)

				Initial investment amount		Shares held as of December 31, 2019
Investor	Investee	Location	Main business activities	Balance as of December 31, 2019	Balance as of December 31, 2018	Number of shares	Ownership (%)	Book value	Net profit of the investee	Investment income recognised by the Company	Footnote
The Company	Plenty Type Limited (Cayman Islands)	Cayman Islands	Management of producing and non-producing business investments	\$ 720,448	\$ 720,448	96,370,079		100.00 \$ 2,368,685	\$ 33,957	\$ 33,957	Subsidiary (Note 1)
The Company	Charoen Pokphand (Taiwan) Co., Ltd.		Taiwan Management of importing and exporting businesses	20,086	20,086	2,443,716	90.00	38,794	12,036	10,832	Subsidiary
The Company	Arbor Acres (Taiwan) Co., Ltd.		Taiwan Husbandry management of chickens to produce breeder chicken and daily chicken	60,131	60,131	1,600,000	50.00	384,779	703,017	351,508	Subsidiary
The Company	Rui Mu Foods Co., Ltd.		Taiwan Husbandry management of layers and related business	93,860	78,000	10,400,000	52.00	125,701	34,021	17,691	Subsidiary
The Company	Rui Fu Foods Co., Ltd.		Taiwan Husbandry management of layers and related business	153,000	102,000	15,300,000	51.00	141,197	( 20,035) (	10,218)	Subsidiary (Note 1)
Plenty Type Limited (Cayman Islands)	Chia Tai Lianyungang Co., Ltd.	Hong Kong	Management of producing and non-producing business investments	HKD 19,910	HKD 19,910	999,999	99.99	192,643	( 3,180)	-	Indirectly owned subsidiary (Note 2)
Rui Fu Foods Co., Ltd.	Sheng Da Foods Co., Ltd.		Taiwan Husbandry management of layers and related business	60,000	-	6,000,000	100.00	59,845	( 155)	-	Indirectly owned subsidiary (Note 2)

Note 1: Including recognition of current profit of its investees.

Note 2: Current period income has been recognised by subsidiaries and indirectly owned subsidiaries.

(3) Information on investments in Mainland China

A. Basic information:

				Accumulated amount of remittance from Taiwan to		Amount remitted from /remitted back to Taiwan during the period		Accumulated amount of remittance from Taiwan to Mainland			Ownership held by the	Investment income	Book value of	Accumulated amount of investment income remitted back to Taiwan
			Investment	Mainland	Remitted to	Remitted		China as of	Net income		Company	recognised by	investment as	as of
	Main business	Paid-in	method	China as of	Mainland	back		December 31,	of the		(direct or	the company	of December	December 31,
Investee in Mainland China	activities	Capital	(Note 1)	January 1, 2019	China	to Taiwan		2019	investee		indirect)	(Note 2)	31, 2019	2019	Footnote
Lianyungang Chia Tai Agro-industry Development Co., Ltd.	Feeds producing, poultry raising, processing and sales.	\$ 142,846	2	\$ 127,981 \$	-	\$	- \$	127,981 \$		776	70.00	\$ 543	\$ 149,054	\$ -	Note 4
			Accumulated amount of						Ceiling on investments in
			remittance from			Investment amount approved by the					Mainland China imposed by the
			Taiwan to Mainland China as of			Investment Commission of the Ministry					Investment Commission of the
Company name			December 31, 2019 (Note 4)			of Economic Affairs (MOEA)(Note 5)				MOEA

The Company \$ 127,981 \$ 404,564 \$ 4,753,399

Note 1: Investment methods are classified into the following three categories.

(1) Directly invest in a company in Mainland China.

(2) Through investing in an existing company (Chia Tai Lianyungang Co., Ltd.) in the third area, which then invested in the investee in Mainland China.

(3) Others.

Note 2: Based on the financial statements audited by independent accountants in the R.O.C.

Note 3: The table is expressed in New Taiwan dollars.

• Note 4: The paid-in capital was USD\$5,400 thousand, which was translated into New Taiwan Dollars based on the historical exchange rates and the accumulated amount of remittance from Taiwan to Mainland China as of January 1 and December 31, 2019 were both US\$4,276 thousand. The amounts in the table are translated into New Taiwan Dollars at the spot exchange rates prevailing at December 31, 2019.
• Note 5: The amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA) is USD\$13,517 thousand. The amount in the table is translated into New Taiwan Dollars at the spot exchange rates prevailing at December 31, 2019.

B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland China area: None.

14. OPERATING SEGMENT INFORMATION

None

CHAROEN POKPHAND ENTERPRISE (TAIWAN) CO., LTD. DETAILS OF ACCOUNTS RECEIVABLE DECEMBER 31, 2019 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Table 1

Customer name		Amount	Note
Non-related parties:
A Customer	\$	147,923
B Customer		90,743
			The balance of each customer has not exceeded 5% of the accounts
Others		1,475,460	receivable
Less: Allowance for bad debts	(	1,656)
	\$	1,712,470
Related parties:
Charoen Pokphand (Taiwan) Co., Ltd.	\$	110
Rui Fu Foods Co., Ltd.		13,806
Rui Mu Foods Co., Ltd.		8,408
Arbor Acres (Taiwan) Co., Ltd.		4,172
	\$	26,496

CHAROEN POKPHAND ENTERPRISE (TAIWAN) CO., LTD. DETAILS OF INVENTORIES DECEMBER 31, 2019 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Table 2

Items		Cost	Net realisable value	Note
Materials and supplies	\$	908,136	\$ 1,020,800
Work in progress		26,663	34,436
Finished goods		564,014	556,015
		1,498,813	1,611,251
Less: Allowance for inventory valuation losses	(	60,000)	-
	\$	1,438,813	\$ 1,611,251

CHAROEN POKPHAND ENTERPRISE (TAIWAN) CO., LTD. MOVEMENT SUMMARY OF INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD YEAR ENDED DECEMBER 31, 2019 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Table 3

		Opening balance		Additions			Exchange	Gain on valuation of financial assets			Ending balance			Market price or value per share
Name	Number of shares (per thousand share)	Amount .	Number of shares (per thousand share) .	Amount	Cash dividends .	Investment income .	differences on translation of foreign financial statements	at fair value through other comprehensive income	Gains on remeasurements of defined benefit plan	Number of shares (per thousand share)	Ownership (%)	Amount	Price (in NTD)	Total price	Pledged to others as collateral
Plenty Type Limited	96,370,079	\$ 2,005,590		- \$ -	\$ -	\$	33,957 (\$ 44,672)	\$ 373,810 \$	-	96,370,079	100%	\$ 2,368,685 \$	-	\$ 2,368,685	None
Charoen
Pokphand (Taiwan) Co.,
Ltd.	2,443,716	34,096	-		- ( 4,154)	10,832	-		- ( 1,980)	2,443,716	90%	38,794	-	38,794	None
Arbor Acres (Taiwan) Co.,
Ltd.	1,600,000	64,560	-		- ( 32,000)	351,508	-	-	711	1,600,000	50%	384,779	-	384,779	None
Rui Mu
Foods Co.,
Ltd.	7,800,000	92,150	2,600,000	15,860	-	17,691	-	-	-	10,400,000	52%	125,701	-	125,701	None
Rui Fu Foods
Co., Ltd.	10,200,000	100,415	5,100,000	51,000	-	( 10,218)	-		- -	15,300,000	51%	141,197	-	141,197	None
		\$ 2,296,811		\$ 66,860 (\$	36,154)		\$ 403,770 (\$ 44,672)	\$ 373,810 (\$	1,269)			\$ 3,059,156		\$ 3,059,156

CHAROEN POKPHAND ENTERPRISE (TAIWAN) CO., LTD. DETAILS OF ACCOUNTS PAYABLE DECEMBER 31, 2019 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Table 4

Customer name	Amount	Note
Non-related parties
A Supplier	\$ 91,076
		The balance of each expense account has not exceeded 5% of the accounts
Others	550,320	payable
	\$ 641,396
Related parties
Charoen Pokphand Foods Public Company Limited (CPF)	\$ 3,219
Charoen Pokphand (Taiwan) Co., Ltd.	4,632
Arbor Acres (Taiwan) Co., Ltd.	7,409
Rui Mu Foods Co., Ltd.	118
	\$ 15,378

CHAROEN POKPHAND ENTERPRISE (TAIWAN) CO., LTD. DETAILS OF OPERATING REVENUE YEAR ENDED DECEMBER 31, 2019 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Table 5

Quantity (Metric tons )	Amount
686,700	\$ 8,106,294
129,192	8,847,954
23,082	3,219,272
	\$ 20,173,520

CHAROEN POKPHAND ENTERPRISE (TAIWAN) CO., LTD. DETAILS OF OPERATING COST YEAR ENDED DECEMBER 31, 2019 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Table 6

Item		Amount
Cost of goods sold			Note
Raw materials
Raw materials at the beginning	\$	559,822
Material purchased during the year		13,964,937
Raw materials sold	(	1,421,296)
Scraps sold	(	5,396)
Materials reclassified as expenses	(	19,288)
Gain on physical raw materials		2,568
Raw materials at the end	(	885,619)
		12,195,728
Indirect materials
Raw materials at the beginning		16,213
Materials purchased during the year		271,976
Raw materials sold	(	137)
Materials reclassified as expenses	(	5,062)
Gain on physical raw materials		245
Raw materials at the end	(	22,517)
		260,718
Direct labor		790,649
Manufacturing overhead		2,023,040
Manufacturing Cost		15,270,135
Add: Work in progress at the beginning		1,457,853
Less: Work in progress reclassified as expenses and others	(	255)
Less: Loss on physical inventory of work in progress	(	239)
Less: Work in progress at the end	(	1,575,547)
Finished goods cost		15,151,947
Add: Finished goods at the beginning		452,072
Add: Finished goods purchases for the year		897,379
Less: Finished goods reclassified as expenses	(	48,457)
Less: Scrapped finished goods sold	(	132)
Less: Loss on physical inventory of finished goods	(	1,491)
Less: Finished goods at the end	(	564,014)
		15,887,304
Less: Revenue from sales of by-product	(	943)
Add: Materials sold		1,421,433
Less: Loss on physical inventory	(	1,083)
Add: Loss on reversal of decline in market value		45,200
Add: Loss on scrapping inventory		902
Operating costs	\$	17,352,813
Note: Biological assets were included in work in progress

CHAROEN POKPHAND ENTERPRISE (TAIWAN) CO., LTD. DETAILS OF OPERATING EXPENSES YEAR ENDED DECEMBER 31, 2019 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Table 7

	General and
Items	Selling expenses		administrative expenses		Total		Notes
Wages and salaries	\$	243,460	\$	301,306	\$	544,766
Freight		369,013		22		369,035
Advertisement expense Cost of service and technical		9,320		1,368		10,688
service		511		109,594		110,105
Traveling expense		38,899		13,115		52,014
Storage fee		71,368		-		71,368
Non-deductible input VAT for dual-status business entities		32,231		4,278		36,509
Insurance expense		20,472		22,736		43,208
Depreciation		31,633		9,891		41,524
Fee expense		14,637		260		14,897
Miscellaneous disbursements and repairs and maintenance expense		11,705		7,066		18,771
Utilities expense and fuel fee		11,237		1,103		12,340
Entertainment expense		7,987		4,002		11,989
Postage expenses		4,296		3,640		7,936
Other expenses		16,676		22,641		39,317
	\$	883,445	\$	501,022	\$	1,384,467