SEMI-ANNUAL REPORT 2013
For the Six-Month Period Ended 30th September, 2013

TO OUR SHAREHOLDERSFirst of all, we would like to express our profound gratitude for the continued support of our shareholders.
We hereby would like to announce the business results for the first six-month period of the company’s 66th
fiscal year.
During the first six-month period ended 30th September, 2013, the Japanese economy was on a moderate
recovery trend. On the back of the effects of monetary easing and various other government policies, there
were signs of a recovery in corporate earnings centring on certain export-related companies. In addition,reflecting improvement in consumer confidence, the labour market and personal incomes picked up
somewhat. However, the impact on personal consumption was still limited and the environment remained
challenging.
The environment in which the Marudai Food Group’s Processed Food Products business operates continued
to face severe challenges, including intensifying sales competition amid sharp increases in raw materials
prices in line with the exchange rate fluctuations and for other reasons. The environment for the Meat
Products business remained tough. Although prices of Japanese beef and imported beef remained firm,purchase prices of Japanese pork and chicken increased because of the decrease in supplies partly due to theunusually hot summer in 2013.
Under such circumstances, we strove to offer food products that satisfy the highest standards of safety andreliability by adhering to the Marudai Food Group’s policies of putting the customer first, thoroughcompliance and uncompromising commitment to safety and quality. In parallel, we implemented adiversification strategy and initiatives to reinforce Group management and strengthen product developmentcapabilities.
As a result, consolidated net sales for the first six-month period increased by 2.0% compared with the same
period of the previous year to 105,129 million yen. Operating income decreased by 38.4% to 1,141 million
yen, and net income decreased by 36.1% to 587 million yen.
Processed Food Products
The Ham & Sausage Products operations conducted vigorous sales promotion campaigns to expand sales,
including a campaign to support the Japanese team for the Sochi 2014 Winter Olympic Games, for mainstay
brands such as “Kunseiya Jyukusei Arabiki Vienna Sausage”, winner of the Monde Selection Grand Gold
Quality Award in the food products category for the fifth time in 2013. We also introduced new products forsales expansion, including “Aikatsu! Fish Sausage”, a product featuring a popular anime character. In termsof midsummer gift products, our proactive sales efforts focused on our mainstay series, namely “Ouha” and“Kosai”. As a result, sales of the Ham & Sausage Products operations increased by 0.1% compared with thesame period of the previous year.

1

In the Precooked & Processed Foods operations, sales of the “Sundubu” series of Korean-style soup mixes
whose line-up was enriched with the addition of “Gomatonyu (sesame & soymilk) Sundubu” were robust, as
were sales of the popular “Doria (rice au gratin) Sauce” series. We also made vigorous efforts in theintroduction of new products, including the “Toriniku no Kabayaki (broiled chicken)” for which Japanesechicken is cooked using our patented method and the “Atsuage DELI” series of sauces for innovative dishes
using deep-fried tofu. We also strove to expand sales of the “SWEET CAFE” series of our mainstay dessert
dishes. However, sales of the Precooked & Processed Foods operations decreased by 3.5% compared withthe same period of the previous year mainly due to lacklustre sales of products for convenience stores.
As a result, sales in the Processed Food Products segment amounted to 74,071 million yen, down 1.4%
compared with the same period of the previous year. Operating income decreased by 31.7% to 1,231 million
yen, owing to sharp increases in raw materials prices and declines in sales prices as a result of intensifiedcompetition.
Meat Products
Despite severe price competition reflecting the continued preoccupation with low prices among consumers,
we vigorously worked to expand sales of U.S. beef and Japanese beef. Sales of pork were also robust as aresult of our efforts to increase sales of imported pork.
As a result, sales in the Meat Products segment increased by 11.3% compared with the same period of theprevious year to 30,889 million yen. However, the segment recorded an operating loss of 187 million yen
because of increased purchase prices and intensified price competition.
Other
Sales in the Other business decreased by 14.2% compared with the same period of the previous year to 169
million yen, and operating income decreased by 0.5% to 97 million yen.
Once again, we would like to express our gratitude to our shareholders and to ask for your continued supportof our business in the future.

Tokuo Kudara
President
2

MARUDAI FOOD CO., LTD.
CONSOLIDATED BALANCE SHEETS
30th September, 2013 and 2012
(Unaudited)

Millions of yen

ASSETS2013

20122013¥11,378$120,309

26,458828(63)
14,562
1,601
694
55,458228,099
3,839(573)
179,926
11,926
6,469
549,995

69
12,007
73
7,318
(420)
19,047

107
8,270
257
7,681
(430)
15,885706
122,909747
74,911(4,299)194,974

18,77847,44354,499254
6,254
127,228(76,903)
50,325
1,446¥124,547

18,95047,23452,477686
7,290
126,637(75,280)
51,357
1,755¥124,455

192,220
485,649
557,877
2,600
64,0191,302,365(787,215)
515,150
14,802$1,274,921

Current assets:
Cash and time deposits .............................................................. ¥11,753
Receivables:
Trade notes and accounts ......................................................
22,283
Other......................................................................................
375
Allowance for doubtful accounts ..........................................
(56)
Inventories .................................................................................
17,577
Deferred tax assets ....................................................................
1,165
Advances and other current assets .............................................
632
Total current assets ...............................................................
53,729Investments and other assets:
Investment securities
Affiliates ................................................................................
Other .....................................................................................
Deferred tax assets ....................................................................
Other ..........................................................................................
Allowance for doubtful accounts ..............................................
Total investments and other assets .......................................
Property, plant and equipment, at cost:
Land ...........................................................................................
Buildings and structures ............................................................
Machinery and equipment .........................................................
Construction in progress ............................................................
Lease assets ...............................................................................
Less accumulated depreciation ..................................................
Net property, plant and equipment ........................................
Intangible assets ...........................................................................
Total assets ................................................................................
See the accompanying note.

Thousands of U.S.
dollars (Note)

3

Millions of yen

LIABILITIES AND NET ASSETS
Current liabilities:
Short-term borrowings ..............................................................
Long-term debt due within one year .........................................
Trade notes and accounts payable .............................................
Short-term lease obligations ......................................................
Accrued expenses ......................................................................
Accrued income taxes ...............................................................
Other current liabilities ..............................................................
Total current liabilities ..........................................................
Long-term liabilities:
Long-term debt due after one year ............................................
Deferred tax liabilities ...............................................................
Long-term lease obligations ......................................................
Employees’ severance and retirement benefits .........................
Other long-term liabilities .........................................................
Total long-term liabilities ......................................................

4

See the accompanying note.

Thousands of U.S.
dollars (Note)

2013

2012

2013

¥8,202
1,691
22,078
751
2,355
562
6,654
42,293¥10,910
3,196
21,710
911
2,466
346
7,144
46,683$83,959
17,310226,001
7,688
24,107
5,753
68,113432,931

5,742
2,047
2,464
892
505
¥11,650

4,348
1,303
2,886855551¥9,943

58,778
20,95425,2239,131
5,169$119,255

Thousands of U.S.
dollars (Note)

Millions of yen

2013

2012

2013

¥6,716
21,68636,920(698)
64,624$68,748
221,988384,676(7,155)668,257

3,806
(9)
(105)
3,692

1,674
(7)
(91)
1,576

38,960(92)(1,075)37,793

Minority interests .........................................................................
1,630
Total net assets ..........................................................................
70,604
Total liabilities and net assets .................................................... ¥124,547

1,629
67,829¥124,455

16,685
722,735$1,274,921

NET ASSETS

Shareholders’ equity:
Common stock
Authorised-200,000,000 shares
Issued-132,527,909 shares in 2013 (132,527,909 shares in 2012) ...... ¥6,716
Capital surplus ...........................................................................
21,686
Retained earnings ......................................................................
37,579Less treasury stock at cost .........................................................
(699)
Total shareholders’ equity ....................................................
65,282
Accumulated other comprehensive income:Unrealised gains on securities ...................................................
Deferred losses on hedges .........................................................
Foreign currency translation adjustments .................................
Total accumulated other comprehensive income ..................

5

MARUDAI FOOD CO., LTD.
CONSOLIDATED STATEMENTS OF INCOME
Six months ended 30th September, 2013 and 2012
(Unaudited)Thousands of U.S.
dollars (Note)

Millions of yen2013

2012

2013

¥103,080
77,59325,487
23,634
1,853$1,076,149
826,553249,596
237,916
11,680

Income before income taxes and minority interests ..................

158
(138)
(47)
19(133)
156
15
1,156

139
(173)
(68)
(18)
(107)
(682)
(909)
944

1,617
(1,413)(481)
194(1,361)
1,597
153
11,833

Income taxes:
Current .......................................................................................
Deferred .....................................................................................
Income before minority interests .................................................
Minority interests .........................................................................

551
(71)
676
(89)

298
(391)
1,037
(119)

5,640
(727)
6,920
(911)

Net sales ........................................................................................ ¥105,129
Cost of sales ..................................................................................
80,746Gross profit ................................................................................
24,383
Selling, general and administrative expenses ............................
23,242
Operating income ......................................................................
1,141
Other income (expenses):
Interest and dividend income ....................................................
Interest expense .........................................................................
Loss on disposal of property, plant and equipment, net ............
Foreign exchange gain (loss) .....................................................
Loss on impairment of assets ....................................................
Other, net ...................................................................................

Net income .................................................................................... ¥587

¥918

Yen

Net income per share ...................................................................

6See the accompanying note.

¥4.52

$

6,009

U.S. Dollars (Note)

¥7.07

$0.05

MARUDAI FOOD CO., LTD.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Six months ended 30th September, 2013 and 2012
(Unaudited)Thousands of U.S.
dollars (Note)

Millions of yen201320122013¥676¥1,036$6,920

Income before minority interests .................................................
Other comprehensive income:Unrealised gains (losses) on securities ......................................
Deferred losses on hedges .........................................................
Foreign currency translation adjustments ..................................
Share of other comprehensive income ofassociates accounted for using equity method ......................
Total other comprehensive income .......................................
Comprehensive income ................................................................

866
(10)
9(327)
(25)
23

8,865
(102)
92

11876
¥1,552

1(328)
¥ 708

112
8,967
$15,887

Comprehensive income attributable to:
Owners of the parent .................................................................
Minority interests ......................................................................

¥1,462
¥90

¥590
¥118

$14,966$921

See the accompanying note.

7MARUDAI FOOD CO., LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
Six months ended 30th September, 2013 and 2012
(Unaudited)

Millions of yen

8

Thousands of U.S.
dollars (Note)2013
Common stock:
Balance at beginning and end of period ���������������������������������� ¥ 6,716

2012

2013

¥ 6,716$ 68,748

Capital surplus:
Balance at beginning and end of period ���������������������������������� ¥21,686¥21,686$221,988

Retained earnings:
Balance at beginning of period ������������������������������������������������ ¥38,032
Cash dividends paid ����������������������������������������������������������������(1,040)
587
Net income ������������������������������������������������������������������������������
Balance at end of period ���������������������������������������������������������� ¥37,579¥37,171(1,169)918¥36,920$389,313(10,646)
6,009$384,676

Treasury stock, at cost:
Balance at beginning of period ������������������������������������������������ ¥ (698)(1)
Purchase of treasury stock �������������������������������������������������������
Balance at end of period ���������������������������������������������������������� ¥ (699)¥ (698)(0)¥ (698)$ (7,145)(10)$ (7,155)

Unrealized gains on securities:
Balance at beginning of period ������������������������������������������������ ¥ 2,940
866
Increase (decrease) for period �������������������������������������������������
Balance at end of period ���������������������������������������������������������� ¥ 3,806¥ 2,001(327)¥ 1,674$ 30,095
8,865$ 38,960

Deferred losses on hedges:
Balance at beginning of period ������������������������������������������������ ¥0(9)Decrease for period �����������������������������������������������������������������(9)Balance at end of period ���������������������������������������������������������� ¥¥18(25)(7)¥$0(92)(92)$See the accompanying note.

Millions of yen

Thousands of U.S.
dollars (Note)2013
Foreign currency translation adjustments:
Balance at beginning of period ................................................. ¥ (124)19
Increase for period �������������������������������������������������������������������
Balance at end of period ���������������������������������������������������������� ¥ (105)

2012

2013

¥ (115)24¥ (91)$ (1,269)194$ (1,075)

Minority interests:
Balance at beginning of period ������������������������������������������������ ¥ 1,560
70
Increase for period �������������������������������������������������������������������
Balance at end of period ���������������������������������������������������������� ¥ 1,630¥ 1,529100¥ 1,629$ 15,969
716$ 16,685

9MARUDAI FOOD CO., LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended 30th September, 2013 and 2012
(Unaudited)Thousands of U.S.
dollars (Note)

Millions of yen

Cash flows from operating activities:
Income before income taxes and minority interests ..................
Depreciation and amortisation ..................................................
Loss on impairment of assets ....................................................
Increase in allowance for doubtful accounts .............................
Increase in severance and retirement benefits ...........................
Interest and dividend income ....................................................
Interest expense .........................................................................
Gain on sale of securities, net ....................................................
Write-down of investment in securities .....................................
Loss on disposal of property, plant and equipment, net ............
Decrease (increase) in receivables .............................................
Increase in inventories ...............................................................
Increase in trade notes and accounts payable ............................
Increase (decrease) in consumption tax payable .......................
Other, net ...................................................................................
Subtotal..................................................................................
Interest and dividends received .................................................
Interest paid ...............................................................................
Income taxes paid ......................................................................
Net cash provided by operating activities .............................
Cash flows from investing activities:
Purchase of short-term investments
and investment securities.......................................................
Proceeds from sale of short-term investments
and investment securities ......................................................
Purchase of property, plant and equipment ...............................
Proceeds from sale of property, plant and equipment ...............
Other, net ...................................................................................
Net cash used in investing activities .....................................

10

See the accompanying note.

2013

2012

2013

¥1,156
2,712
133
7172
(158)
138
(11)
—
47
2,696
(3,147)
2,173
15
(42)
5,891
154
(139)
(229)
5,677

¥944
2,826
107
6
85
(139)
173
(1)
535
68
(1,219)
(508)
1,893
(103)
(602)
4,065
169
(172)
(278)
3,784

$11,833
27,761
1,361
72
1,761
(1,617)
1,413
(113)
—
481
27,597(32,214)
22,244154(430)
60,303
1,576(1,423)(2,344)
58,112

(15)

(23)

(154)

27(2,302)
200
128¥(1,962)

20(3,385)149(65)¥(3,304)

276(23,564)
2,047
1,311
$(20,084)

Millions of yen

Cash flows from financing activities:
Net increase in short-term borrowings ......................................
Proceeds from long-term debt ...................................................
Repayment of long-term debt ....................................................
Repayment of lease obligations .................................................
Cash dividends paid ...................................................................
Other, net ...................................................................................
Net cash used in financing activities .....................................
Effect of exchange rate changes oncash and cash equivalents .......................................................
Net increase (decrease) in cash and cash equivalents ...............
Cash and cash equivalents at beginning of year ........................
Cash and cash equivalents at end of year ..................................

Thousands of U.S.
dollars (Note)

2013

2012

2013

¥310
48
(1,634)(453)(1,038)(20)(2,787)¥2,460
225(2,547)(533)(1,169)(21)(1,585)$3,173491(16,726)(4,637)(10,625)(205)(28,529)(2)926
10,827¥11,753

0(1,105)
12,296¥11,191

(20)
9,479
110,830$120,309

11

MARUDAI FOOD CO., LTD.
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited)

Basis of financial statements
Marudai Food Co., Ltd. (the “Company”) and its consolidated domestic subsidiaries
maintain their official accounting records in Japanese yen and in accordance with the provisions
set forth in the Japanese Company Law and accounting principles and practices generallyaccepted in Japan (“Japanese GAAP”). The accounts of overseas subsidiaries are based on theiraccounting records maintained in conformity with generally accepted accounting principles andpractices prevailing in the respective countries of domicile. Certain accounting principles andpractices generally accepted in Japan are different from International Accounting Standards andstandards in other countries in certain respects as to application and disclosure requirements.
Accordingly, the accompanying financial statements are intended for use by those who are
informed about Japanese accounting principles and practices. These financial statements should
be read along with the Annual Report to Shareholders for the year ended 31st March, 2013.
The translation of the Japanese yen amounts into U.S. dollars are included solely for theconvenience of readers, using the prevailing exchange rate at 30th September, 2013, which was¥97.69 to U.S.$1.00. The convenience translations should not be construed as representations
that the Japanese yen amounts have been, could have been, or could in the future be, converted
into U.S. dollars at this or any other rate of exchange.

12

DIRECTORS AND STATUTORY AUDITORS (As of 30th September, 2013)

President andTokuo Kudara
Representative Director:
Senior Executive andManaging Directors:

Keiichi Katoh
Toshiharu Inoue

Managing Director:

Yasushi SawadaDirectors:

Yoshio Kuramori
Hiroshi Kubota
Nobuyoshi Katoh
Jiro Tsuge

Statutory Auditors:

Yoshikazu Sawanaka
Yasumi Shukuri
Motoaki Nishimura

OUTLINE OF THE COMPANY (As of 30th September, 2013)
Established:
Stated Capital:
Number of Employees:
Head Office:Branch Office:Sales Offices:
Plants:Overseas Office:10th June, 1958
¥6,716 million
2,238
21-3 Midori-cho, Takatsuki-shi, Osaka, Japan
4-7-5 Tsukiji, Chuou-ku, Tokyo, JapanThe sales headquarters at the Company’s head office in Osaka controls
10 distribution centers and 6 regional sales departments which service
50 local outlets.
Hokkaido, Iwate, Niigata, Kanto,
Ibaraki, Yokosuka, Shounan, Shizuoka,
Matsusaka, Takatsuki, Hyogo, Okayama,Hiroshima, Karatsu
Chicago, U.S.A.

13