Semi-Annual Report 2015
For the Six-Month Period Ended 30th September 2015

PROFILE
Since its establishment in 1958, MARUDAI FOOD CO., LTD. has been dedicated tooffering delicious, high-quality meat products. In order to understand the latest
consumer trends and to meet the needs of modern lifestyles, we have continuously
strengthened our research, sales and production operations. Intending to become
Japan’s leading food company, we successfully listed our stock on the First Section ofboth the Tokyo and Osaka Stock Exchanges in 1972.
Starting as a ham and sausage producer, Marudai Food has steadily expanded its
range of products to include heat-processed, vacuum-packed food, cheese and freshmeats. Ham and sausage, however, remain an integral part of our product line andcontinue to account for almost half of our sales.
While pursuing a leading position in the ham and sausage market, Marudai Foodwas eager to explore new avenues by developing precooked and processed foods, which
went on sale in 1973. This long shelf-life food was developed to meet the specific needfor fast meal preparation. Containing absolutely no preservatives and requiring only
several minutes to prepare, Marudai precooked and processed foods have established astrong foothold in the market. Building on this success, we will make even greater
efforts to create new products that satisfy the increasingly discriminating tastes ofconsumers.

CONTENTSTO OUR SHAREHOLDERS .............................................................................. 1
PRODUCTS ......................................................................................................... 2
CONSOLIDATED BALANCE SHEETS............................................................ 3
CONSOLIDATED STATEMENTS OF INCOME ............................................. 5
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME .......... 6
CONSOLIDATED STATEMENTS OF CHANGE IN NET ASSETS .............. 7
CONSOLIDATED STATEMENTS OF CASH FLOWS .................................... 8
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS ........................... 9
DIRECTORS AND STATUTORY AUDITORS............................................... 10
OUTLINE OF THE COMPANY ...................................................................... 11b

MARUDAI FOOD CO., LTD.

TO OUR SHAREHOLDERS

uncertainties including a downside risk to the world economy
are a concern. Additionally, in line with rising consumer
prices, consumers became increasingly budget-minded as well
as selective in their consumption. Thus, a recovery of personal
consumption was not evident.
The Marudai Food Group’s Processed Food Products
business continues to operate in a challenging environment
characterized by intensifying price competition whilecustomers become increasingly budget-m inded. T heenvironment for the Meat Products business continued to beunstable. The prices of pork continued to be weak due torecovery in supply, and while prices of beef remained high in
general, reflecting decreased supply, prices of certain imported
frozen beef fell greatly.
Under such circumstances, the Marudai Food Groupadhered to its basic policies—strengthening the core business,
implementing a diversification strategy, and promoting lowcost operations—with the aim of gaining recognition as anenterprise with a social mission, namely, a comprehensive foodproducts company offering merchandise satisfying the highest
standards of safety and reliability.
First 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

As a result, consolidated net sales for the first six-month
period increased by 4.7% year on year to 115,971 million yen.

first six-month period of the company’s 68th fiscal year.

Operating income increased by 12.8% to 2,138 million yen,and profit attributable to owners of parent increased by 54.5%

During the first six-month period ended 30th September
2015, the Japanese economy remained on a moderate recovery
path, partly attributable to the beneficial effects of the Abeadministration’s various policies while the labour market andto 1,415 million yen.

p e r s o n a l i n c om e s c o nt i nu e d t o i m p r ove. Howeve r,

business in the future.

Once again, we would like to express our gratitude to ourshareholders and to ask for your continued support of our

December 2015.

Tokuo Kudara
President and Representative Director

1

MARUDAI FOOD CO., LTD.

PRODUCTS

Processed Food Products
The Ham & Sausage Products operations made vigorous efforts to expand sales of mainstay products such as the “KunseiyaRipened Pork Sausage,” which marked the 20th anniversary of its launch through sales promotions, including the “Kunseiya no
Kodawari Campaign.” We also promoted sales of new products, including the smoked top-grade “Ibushi Tokkyu Bacon” and “Aburi
Bara Yakibuta” Chinese-style barbecued pork, both of which proved to be popular, and “Dragon Ball Super Fish Sausage,” which aresausages with popular anime characters printed on them. For midsummer gift products, we worked to expand sales of the “Ouha”
and “Kousai” series of gift packages, consisting of products that won the Monde Selection Grand Gold Quality Award in the foodproducts category. Nevertheless, sales of the Ham & Sausage Products operations decreased by 1.3% year on year partly because
of intensifying sales competition.
In the Precooked & Processed Foods operations, we made vigorous efforts to expand sales of the “Sundubu” series of Koreanstyle soup mixes through a sales promotion campaign. We also vigorously marketed new products. The line-up of the “Chef no
Takumi” series of high-quality dishes that take casual dining to a new level was enriched with the addition of the “Massaman
Curry” and the “Black Hashed Beef.” We introduced a line of soup dishes to be served hot in the “Soup BIZ” series. Another new
product is the “Shoga Chicken,” Japanese-style fried chicken with ginger flavour and texture. With regard to desserts andbeverages, brisk sales of the “SWEET CAFE” series of desserts and the “TAPIOCA TIME” series of beverages with black tapioca
continued. As a result, sales of the Precooked & Processed Foods operations increased by 13.1% year on year.
Overall, sales in the Processed Food Products segment amounted to 82,155 million yen, up 4.7% year on year. Operating
income increased by 46.8% to 2,043 million yen owing to our efforts to reduce costs through rationalization.
Meat Products
With regard to pork, we strengthened the handling of Japanese branded pork and carried out initiatives to expand the sales ofimported pork. Regarding beef, amid the continuing trend of high prices, sales were robust owing to our sales expansion efforts
for Japanese beef. However, the sharp drop in the prices of certain imported frozen beef products had a substantial and adverse
impact on our profits.
As a result, sales in the Meat Products segment increased by 4.6% year on year to 33,601 million yen and operating income
decreased by 96.6% to 14 million yen.
Other
Sales of the Other business increased by 15.5% year on year to 215 million yen, and operating income decreased by 16.1% to
81 million yen.

2

MARUDAI FOOD CO., LTD.

CONSOLIDATED BALANCE SHEETS
30th September 2015 and 2014
(Unaudited)

Millions of yen

ASSETS
Current assets:
Cash and time deposits ........................................................................
Receivables:
Trade notes and accounts ................................................................
Other ...............................................................................................
Allowance for doubtful accounts ....................................................
Inventories ...........................................................................................
Deferred tax assets ..............................................................................
Advances and other current assets .......................................................
Total current assets ..........................................................................
Investments 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 ...................................................................
Lease assets .........................................................................................
Construction in progress ......................................................................
Less accumulated depreciation ............................................................
Net property,plant and equipment ...................................................
Intangible assets .....................................................................................
Total assets ..........................................................................................
See the accompanying note.

3

Thousands of
U.S. dollars (Note)
2015

2015

2014

¥13,972¥13,029$116,511

25,714356(58)
14,4811,044
856
56,36524,542301(62)
16,246
1,147
664
55,867

214,426
2,969(484)
120,756
8,706
7,138
470,022–
13,134
105
5,671
(263)
18,64718
11,348
77
5,692
(388)
16,747–
109,523876
47,289(2,193)
155,495

17,92747,65356,378
6,063
906
128,927(81,374)
47,553893¥123,458

18,24547,801
55,1086,109
229
127,492(78,330)
49,162
1,128¥122,904

149,491
397,373
470,130
50,5597,555
1,075,108(678,569)
396,5397,447$1,029,503

Millions of yen

LIABILITIES AND NET ASSETS

Thousands of
U.S. dollars (Note)
2015

2015

2014

¥22,722
4,296
1,884
737
2,385
1,055
7,942
41,021¥22,705
6,452
2,825
745
2,335
859
6,897
42,818$189,476
35,824
15,7106,146
19,888
8,798
66,228342,070

4,375
1,979
1,814
1,546
603
10,317

4,149
2,312
1,229
2,864
466
11,02036,483
16,503
15,127
12,892
5,027
86,032

Shareholders’equity:
Common stock
Authorised-200,000,000 shares
Issued-132,527,909 shares in 2015 (132,527,909 shares in 2014) ........
Capital surplus .....................................................................................
Retained earnings ................................................................................
Treasury stock at cost ..........................................................................
Total shareholders’ equity ...............................................................

6,716
22,061
40,104(511)
68,3706,716
21,68638,726(705)
66,42356,004
183,964
334,423(4,261)
570,130

Accumulated other comprehensive income:Unrealised gains on securities .............................................................
Deferred losses (gains) on hedges .......................................................
Foreign currency translation adjustments ............................................
Adjustments for retirement benefits ....................................................
Total accumulated other comprehensive income ............................

5,020
(1)
(151)
(1,538)
3,330

3,651
0
(139)
(2,631)881

41,861(8)(1,259)(12,825)
27,769Non-controlling interests .......................................................................
Total net assets .....................................................................................
Total liabilities and net assets ..............................................................

420
72,120¥123,458

1,762
69,066¥122,904

3,502
601,401$1,029,503

Current liabilities:
Trade notes and accounts payable .......................................................
Short-term borrowings ........................................................................
Long-term debt due within one year ...................................................
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 ......................................................
Long-term lease obligations ................................................................
Deferred tax liabilities .........................................................................
Liabilities for retirement benefits ........................................................
Other long-term liabilities ...................................................................
Total long-term liabilities ................................................................

NET ASSETS

See the accompanying note.

4

MARUDAI FOOD CO., LTD.

CONSOLIDATED STATEMENTS OF INCOME
Six months ended 30th September 2015 and 2014
(Unaudited)

Millions of yen

Thousands of
U.S. dollars (Note)
2015

2015

2014

Net sales ..................................................................................................
Cost of sales ............................................................................................
Gross profit .........................................................................................
Selling, general and administrative expenses ......................................

¥115,971
89,63926,332
24,194¥110,729
85,19425,53523,639$967,070
747,490
219,580
201,751

Operating income ................................................................................

2,138

1,896

17,829

156
(111)
73
(27)
172
263
2,401

146
(123)
(79)
(54)
194
84
1,980

1,301
(926)
609
(225)
1,434
2,193
20,022

Profit ........................................................................................................
Profit attributable to non-controlling interests ....................................

1,032
(66)
966
1,435
(20)

849
17
866
1,114
(198)

8,606
(550)
8,056
11,966(166)

Profit attributable to owners of parent ................................................

¥1,415¥916$11,800

Other income (expenses):
Interest and dividend income ..............................................................
Interest expense ...................................................................................
Gain (loss) on disposal of property, plant and equipment, net ............
Loss on impairment of assets ..............................................................
Other, net .............................................................................................
Income before income taxes ...................................................................
Income taxes:
Current .................................................................................................
Deferred ...............................................................................................

U.S. dollars (Note)

Yen
Profit attributable to owners of parent per share .................................
See the accompanying note.

5¥10.70

¥7.06

$0.09

MARUDAI FOOD CO., LTD.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Six months ended 30th September 2015 and 2014
(Unaudited)

Millions of yen
2015

2014

Thousands of
U.S. dollars (Note)2015

Profit ........................................................................................................
Other comprehensive income:Unrealised gains on securities .............................................................
Deferred losses on hedges ...................................................................
Foreign currency translation adjustments ............................................
Adjustments for retirement benefits ....................................................
Share of other comprehensive income of associates accounted for using equity method ....
Total other comprehensive income .................................................
Comprehensive income ..........................................................................

¥1,435¥1,114$11,966

244
(9)
1
182
1
419
¥1,854

233
(1)
(31)
108
(1)
308
¥1,422

2,035
(75)
8
1,518
8
3,494
$15,460

Comprehensive income attributable to:
Owners of the parent ...........................................................................
Non-controlling interests .....................................................................

¥1,835¥19¥1,222¥200$15,302$158

See the accompanying note.

6

MARUDAI FOOD CO., LTD.

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
Six months ended 30th September 2015 and 2014
(Unaudited)Thousands of
U.S. dollars (Note)
2015

Millions of yen
2015

2014

Common stock:
Balance at beginning and end of period .............................................

¥ 6,716¥ 6,716$ 56,004

Capital surplus:
Balance at beginning of period ...........................................................
Purchase of shares of consolidated subsidiaries .................................
Balance at end of period .....................................................................

¥22,073(12)¥22,061¥21,686–¥21,686$184,064(100)$183,964

Retained earnings:
Balance at beginning of period ...........................................................
Cash dividends paid ...........................................................................
Profit attributable to owners of parent ................................................
Balance at end of period .....................................................................

¥39,616
(927)
1,415
¥40,104¥38,719(909)
916¥38,726$330,353(7,730)11,800$334,423$Treasury stock at cost:
Balance at beginning of period ...........................................................
Purchase of treasury stock ..................................................................
Balance at end of period .....................................................................

¥

(10)
(501)
¥ (511)¥ (705)(0)¥ (705)(83)(4,178)$ (4,261)

Unrealised gains on securities:
Balance at beginning of period ...........................................................
Increase for period ..............................................................................
Balance at end of period .....................................................................

¥ 4,776244¥ 5,020¥ 3,418233¥ 3,651$ 39,827
2,034$ 41,861

¥

¥

$

Deferred losses (gains) on hedges:
Balance at beginning of period ...........................................................
Decrease for period ............................................................................
Balance at end of period .....................................................................

¥

Foreign currency translation adjustments:
Balance at beginning of period ...........................................................
Decrease (increase) for period ...........................................................
Balance at end of period .....................................................................

¥ (153)2¥ (151)¥ (106)(33)¥ (139)$ (1,276)17$ (1,259)

Adjustments for retirement benefits:
Balance at beginning of period ...........................................................
Increase for period ..............................................................................
Balance at end of period .....................................................................

¥(1,720)
182¥(1,538)¥(2,737)106¥(2,631)$(14,343)
1,518$(12,825)¥¥ 1,585
177¥ 1,762$ 3,352
150$ 3,502

Non-controlling interests:
Balance at beginning of period ...........................................................
Increase for period ..............................................................................
Balance at end of period .....................................................................
See the accompanying note.

7

¥

8
(9)
(1)

402
18
420

¥

1
(1)
0

$

67
(75)
(8)

MARUDAI FOOD CO., LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended 30th September 2015 and 2014
(Unaudited)

Millions of yen

Thousands of
U.S. dollars (Note)
2015

2015

2014

Cash flows from operating activities:
Income before income taxes ................................................................
Depreciation and amortisation ............................................................
Loss on impairment of assets ..............................................................
Decrease in allowance for doubtful accounts ......................................
Increase (decrease) in liabilities for retirement benefits ......................
Interest and dividend income ..............................................................
Interest expense ...................................................................................
Write-down of investment in securities ...............................................
Loss (gain) on disposal of property, plant and equipment, net ............
Increase in receivables .........................................................................
Decrease (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 .......................................

¥ 2,401
2,512
27
(43)
76
(156)
111
–
(73)
(1,750)
2,553
1,650
(105)
423
7,626
160
(111)
(681)
6,994

¥ 1,980
2,585
54
(8)
(7)
(146)
123
4
79
(1,395)(2,587)
3,265
227
231
4,405
149
(122)
(974)
3,458

$ 20,022
20,947
225
(359)
634
(1,301)926–(609)(14,593)
21,28913,759(876)
3,529
63,593
1,334(926)(5,679)58,322

Cash flows from investing activities:
Purchase 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 ...............................................

(15)(1,255)278(49)(1,041)(15)(2,193)70(69)(2,207)(125)(10,465)
2,318
(409)
(8,681)

Cash flows from financing activities:
Net decrease in short-term borrowings ...............................................
Repayment of long-term debt ..............................................................
Repayment of lease obligations ...........................................................
Cash dividends paid .............................................................................
Purchase of treasury shares .................................................................
Other, net .............................................................................................
Net cash used in financing activities ...............................................

(3,011)(1,060)
(390)
(927)
(500)
(16)
(5,904)

(810)
(987)
(388)
(909)
(1)
(23)
(3,118)(25,108)(8,839)(3,252)(7,730)(4,169)(135)(49,233)

Effect of exchange rate changes on cash 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 period .........................................

049
13,923¥13,972(1)(1,868)14,897¥13,029

1
409
116,102$116,511

See the accompanying note.

8

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 andaccounting principles and practices generally accepted in Japan (“Japanese GAAP”).The accounts of overseas
subsidiaries are based on their accounting records maintained in conformity with generally accepted accounting
principles and practices prevailing in the respective countries of domicile. Certain accounting principles and practices
generally accepted in Japan are different from International Accounting Standards and standards in other countries incertain respects as to application and disclosure requirements. Accordingly, the accompanying financial statements areintended 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 2015.
The translation of the Japanese yen amounts into U.S. dollar amounts is included solely for the convenience ofreaders outside Japan, using the prevailing exchange rate at 30th September 2015, which was ¥119.92 to U.S. $1.00.
These translations should not be construed as representations that the Japanese yen amounts have been, could havebeen or could in the future be converted into U.S. dollars at this or any other rate of exchange.

9

DIRECTORS AND STATUTORY AUDITORS(As of 30th September 2015)

President andRepresentative Director:

Tokuo Kudara

Senior Executive andManaging Director:

Keiichi Katoh

Managing Directors:

Yoshio Kuramori
Yasushi Sawada

Directors:

Nobuyoshi Katoh
Shigeyoshi Chiba
Wataru Fukiage
Susumu Shimadzu

Statutory Auditors:

Yoshikazu Sawanaka
Takuji OkudairaMotoaki Nishimura

10

OUTLINE OF THE COMPANY(As of 30th September 2015)

Established:

10th June 1958

Stated Capital:¥6,716 million

Number of Employees: 2,167

Head Office:21-3 Midori-cho, Takatsuki-shi,
Osaka, Japan

Branch Office:4-7-5 Tsukiji, Chuou-ku, Tokyo,
Japan

Sales Offices:

The sales headquarters at theCompany’s head office in Osakacontrols 10 distribution centers and3 regional sales departments which
service 37 local outlets.

Plants:Hokkaido, Iwate,
Niigata, Kanto,
Ibaraki, Yokosuka, Shounan,
Shizuoka,Matsusaka,
Takatsuki, Hyogo,
Okayama,Hiroshima,
Karatsu

Overseas Office:

Chicago, U.S.A

11

Head Office: 21-3 Midori-cho, Takatsuki-shi, Osaka, Japan
Telephone: 81-726-61-2518 Fax: 81-726-61-5006