SEMI-ANNUAL REPORT 2012
For the Six-Month Period Ended 30th September, 2012

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 six-month period ended 30th September, 2012.
During the first six-month period ended 30th September, 2012, the Japanese economy was on a track ofrecovery, supported by demand associated with recovery and reconstruction in the aftermath of the Great
East Japan Earthquake. However, the outlook for the Japanese economy remains uncertain in view of thepersistently strong yen and the downside risk of the world economy due to the recessions in the European
markets and the stagnation in the emerging markets.
The environment in which the Marudai Food Group’s Processed Food Products business operates remained
tough due to deflation, frugality among consumers in view of concerns about employment prospects, andgrowing price competition. The Meat Products business also faced challenges as prices of pork and chicken
followed a downward trend, whereas there were indications of a modest recovery in prices of Japanese beef.
Under such circumstances, we strove to offer food products that satisfies 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 development
capabilities.
As a result of the above factors, consolidated net sales for the first six-month period increased by 2.5%
compared with the same period of the previous year to 103,080 million yen and operating income decreasedby 44.1% to 1,853 million yen. Net income fell by 66.4% to 918 million yen because of the recording ofexpenses for the voluntary recall of products and write-down of investments in securities.
Processed Food Products
The Ham & Sausage Products operations conducted vigorous sales promotion campaigns, including thelaunch of an autumn campaign for the mainstay brand “Kunseiya Jyukusei Vienna Sausage”, which won the
Monde Selection Grand Gold Quality Award in the food products category for the fourth time. New products
introduced included “Jokyu Arabiki Grill Master” and “Kamen Rider Wizard Fish Sausage”. In terms of
midsummer gift products, our proactive sales efforts focused on our mainstay series, namely “Ouha” and“Kosai”. However, intensified competition resulted in a 2.1% decline in sales of the Ham & Sausage Products
operations compared with the same period of the previous year.
In the Precooked & Processed Foods operations, sales of retort-pouch curry products decreased greatly fromthe figure for the same period of the previous year. However, the vigorous efforts in the introduction of new
products, including the “Kashmir Chicken Curry” for easy preparation of a dish with an authentic flavour,“SBL88 Karada ni Zeitaku Yogurt” for which barley-derived lactobacillus is used, and the “Sundubu” series

1

of Korean-style soups, led to a 4.8% increase in sales of the Precooked & Processed Foods operations
compared with the same period of the previous year.
As a result, sales of the Processed Food Products segment amounted to 75,121 million yen, up 0.7%
compared with the same period of the previous year. Operating income decreased 42.3% to 1,802 million
yen, owing to decreased sales of the mainstay Ham & Sausage operations.
Meat Products
With regard to Beef, price competition intensified, reflecting the consumer preoccupation with low prices.
Despite the challenging environment, beef sales increased as a result of our efforts in expanding sales of U.S.
beef. Meanwhile, the pork market remained unfavorable because of increased supply of pork. As a result,sales of the Meat Products segment increased 7.7% compared with the same period of the previous year to
27,762 million yen. However, the segment recorded an operating loss of 47 million yen because ofdiminishing profitability in light of the fall in the unit prices of meat.
Other
Sales of the Other business decreased 1.6% compared with the same period of the previous year to 197
million yen, but operating income increased 11.9% to 98 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, 2012 and 2011
(Unaudited)

Millions of yen

ASSETS

2012

2011

2012

¥13,821$146,680

21,221357(52)
15,0522,263
647
53,309341,085
10,674(812)
187,727
20,6398,948
714,941

107
8,270
257
7,681
(430)
15,885

131
8,194
67
7,455
(378)
15,4691,379
106,613
3,313
99,021(5,543)
204,783

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

18,71645,315
48,628521
8,237
121,417(72,054)
49,363
701¥118,842

244,295
608,921676,511
8,844
93,9801,632,551(970,478)
662,073
22,625$1,604,422

Current assets:
Cash and time deposits .............................................................. ¥11,378
Receivables:
Trade notes and accounts ......................................................
26,458Other......................................................................................
828
Allowance for doubtful accounts ..........................................
(63)
Inventories .................................................................................
14,562
Deferred tax assets ....................................................................
1,601
Advances and other current assets .............................................
694
Total current assets ...............................................................
55,458Investments 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 accompanying the note.

Thousands of U.S.
dollars (Note)3

Thousands of U.S.
dollars (Note)

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 accompanying the note.

2012

2011

2012

¥10,910
3,196
21,710
911
2,466
346
7,144
46,683¥6,402
6,858
19,575
1,196
2,403
510
6,264
43,208$140,647
41,202279,876
11,744
31,791
4,460
92,098601,818

4,348
1,303
2,886
855
551
9,943

3,275
1,493
3,487
622
493
9,370

56,053
16,79837,205
11,022
7,103
128,181

Thousands of U.S.
dollars (Note)

Millions of yen

2012

2011

2012

Shareholders’ equity:
Common stock ...........................................................................
Capital surplus ...........................................................................
Retained earnings ......................................................................
Less treasury stock at cost .........................................................
Total shareholders’ equity ....................................................

6,716
21,68636,920(698)
64,624

6,716
21,68635,972(697)
63,67786,580279,567
475,957(8,998)833,106

Accumulated other comprehensive income:Unrealised gains on securities ...................................................
Deferred losses on hedges .........................................................
Foreign currency translation adjustments .................................
Total accumulated other comprehensive income ..................

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

1,151
(36)
(84)
1,031

21,580(90)(1,173)
20,317

Minority interests .........................................................................
1,629
Total net assets ..........................................................................
67,829Total liabilities and net assets .................................................... ¥124,455

1,556
66,264¥118,842

21,000874,423$1,604,422

NET ASSETS

5MARUDAI FOOD CO., LTD.
CONSOLIDATED STATEMENTS OF INCOME
Six months ended 30th September, 2012 and 2011
(Unaudited)Thousands of U.S.
dollars (Note)

Millions of yen

2012

2011

2012

¥100,597
74,495
26,102
22,7873,315$1,328,864
1,000,297
328,567
304,679
23,888

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

139
(173)
1
(68)
(535)
(18)
(107)
(148)
(909)
944

122
(211)
0
(114)
(1)
(22)
(75)
196
(105)
3,210

1,792
(2,230)13(877)(6,897)(232)(1,379)(1,908)(11,718)
12,170

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

298
(391)
1,037
(119)

424
(198)
2,984
(250)

3,842
(5,041)
13,369(1,535)Net sales ........................................................................................ ¥103,080
Cost of sales ..................................................................................
77,593Gross profit ................................................................................
25,487
Selling, general and administrative expenses ............................
23,634
Operating income ......................................................................
1,853
Other income (expenses):
Interest and dividend income ....................................................
Interest expense .........................................................................
Gain on sale of securities, net ....................................................
Loss on disposal of property, plant and equipment, net ............
Write-down of investment in securities ....................................
Loss on foreign exchange ..........................................................
Loss on impairment of assets ....................................................
Other, net ...................................................................................

Net income .................................................................................... ¥918¥ 2,734
Yen

6

$

11,834

U.S. Dollars (Note)

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

¥7.07¥21.05$0.09

Net income, diluted per share .....................................................

—

—

—

Dividends per share .....................................................................

¥9.00¥8.00$0.12

See accompanying the note.

MARUDAI FOOD CO., LTD.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Six months ended 30th September, 2012 and 2011
(Unaudited)Thousands of U.S.
dollars (Note)

Millions of yen

Income before minority interests
Other comprehensive income:Unrealised 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 ................................................................
Comprehensive income attributable to:
Owners of the parent .................................................................
Minority interests ......................................................................

See accompanying the note.

2012

2011

2012

¥1,036¥2,984$13,355

(327)
(25)
23

(355)
(36)
8

(4,216)
(322)
297

1
(328)
¥ 708

0
(383)
¥2,601

13(4,228)$ 9,127¥590¥118¥2,351¥ 250$7,606$1,521

7

MARUDAI FOOD CO., LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
Six months ended 30th September, 2012 and 2011
(Unaudited)

Millions of yen
Number ofshares ofCommoncommon stock
stock

Balance at beginning of fiscal 2013 ........ 132,527,909 ¥6,716
Net income .........................................
——Cash dividends paid - ¥9 per share .....
——
Decrease in unrealised gains
on securities .....................................
——
Foreign currency translation
adjustments ......................................
——
Decrease in deferred gains on hedges .....
——
Purchase of treasury stock ..................
——
Balance at end of period ......................... 132,527,909 ¥6,716

Foreigncurrencytranslation
adjustments

Minority
interests¥18¥(115)¥1,529

—

—

—

—

—

—

—

—

(327)

—

—

—

—

—

—

—

24

100

—

—

—

(25)

—

—

Unrealised

Deferred¥(698)¥2,001——(1,169)

—

—

—

—
—

CapitalsurplusRetainedearnings

Treasury
gains
gains
stock
on securities on hedges¥21,686¥37,171

—

918

—

—

—

(0)

—

—

—

—

¥21,686¥36,920¥(698)¥1,674¥(7)¥(91)¥1,629Foreigncurrencytranslation
adjustments

Minority
interests

Millions of yen
Number ofshares ofCommoncommon stock
stock

Balance at beginning of fiscal 2012 ........ 132,527,909 ¥6,716
Net income .........................................
——Cash dividends paid - ¥8 per share .....
——
Decrease in unrealised gains
on securities .....................................
——
Foreign currency translation
adjustments ......................................
——
Decrease in deferred gains on hedges .....
——
Purchase of treasury stock ..................
——
Balance at end of period ......................... 132,527,909 ¥6,716

8

See accompanying the note.

Unrealised

Deferred¥(697)¥1,506

¥ 1

¥(92)

¥1,314

2,734

—

—

—

—

—

(1,039)

—

—

—

—

—

—

—

(355)

—

—

—

—

—

—

—

—

8

242

—

—

—

—

(37)

—

—

CapitalsurplusRetainedearnings

Treasury
gains
gains
stock
on securities on hedges¥21,686¥34,277

—
—
—

—

—

(0)

—

—

—

—

¥21,686¥35,972¥(697)¥1,151

¥(36)

¥(84)

¥1,556

Thousands of U.S. dollars (Note)
Unrealised

Deferred

Balance at beginning of fiscal 2013 ................................ $86,580 $279,567 $479,193 $(8,998) $25,796
Net income .................................................................
——
11,834——
Cash dividends paid - ¥9 per share .............................
—— (15,070)——
Decrease in unrealised gains on securities .................
————(4,215)
Foreign currency translation adjustments ...................
—
—
—
—
—
Decrease in deferred gains on hedges ........................
—
—
—
—
—
Purchase of treasury stock ..........................................
—
—
—
(0)
—
Balance at end of period ................................................. $86,580 $279,567 $475,957 $(8,998) $21,581$232

Commonstock

CapitalsurplusRetainedearnings

Treasury
gains
gains
stock
on securities on hedges

Foreigncurrencytranslation
adjustments

Minority
interests$(1,483) $19,711

—

—

—

—

—

—

—

—

—

—

310

1,289

(322)

—

—

—

—

—

$(90) $(1,173) $21,000

9MARUDAI FOOD CO., LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended 30th September, 2012 and 2011
(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 ..................................................
Increase in allowance for doubtful accounts .............................
Increase (decrease) 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 ............
Loss on impairment of assets ....................................................
Increase in receivables ...............................................................
Increase in inventories ...............................................................
Increase in trade notes and accounts payable ............................
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 property, plant and equipment ...............................
Proceeds from sale of property, plant and equipment ...............
Purchase of short-term investments
and investment securities ......................................................
Proceeds from sale of short-term investments
and investment securities ......................................................
Purchase of stocks of affiliates...................................................
Purchase of investments in subsidiaries resulting
in change in scope of consolidation.......................................
Proceeds from purchase of investments in subsidiaries
resulting in change in scope of consolidation........................
Other, net ...................................................................................
Net cash used in investing activities .....................................
10

See accompanying the note.

2012

2011

2012

¥

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

¥3,210
2,888
14
(424)
(122)
211
0
1
114
75
(1,305)
(455)
1,397
(62)
455
5,997
149
(210)
(715)
5,221

$ 12,170
36,43277
1,096(1,792)
2,230
(13)
6,897
877
1,379
(15,715)(6,549)24,404(1,328)(7,761)
52,4042,179(2,217)(3,584)
48,782(3,385)149(2,132)
124(43,638)
1,921

(23)

(15)

(297)

20
0

0
(131)

258
0

15

16

193

0
(80)
(3,304)5(65)(2,198)0(1,031)(42,594)

Millions of yen

Cash flows from financing activities:
Net increase in short-term borrowings ......................................
Proceeds from long-term debt ...................................................
Repayment of long-term debt ....................................................
Cash dividends paid ...................................................................
Repayment of lease obligations .................................................
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)

2012

2011

2012

2,460
225
(2,547)(1,169)(533)(21)(1,585)1,864
500(3,471)(1,039)(670)(5)(2,821)

31,713
2,901(32,835)(15,070)(6,871)(271)(20,433)(0)(1,105)
12,296¥11,191

0
202
13,582¥13,784(0)(14,245)
158,515$144,270

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 maintaintheir official accounting records in Japanese yen and in accordance with the provisions set
forth in the Japanese Company Law and accounting principles and practices generally
accepted in Japan ("Japanese GAAP"). The accounts of overseas subsidiaries are based on theiraccounting 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 AccountingStandards and standards 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 2012.
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, 2012, whichwas ¥77.57 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, 2012)

President andTokuo Kudara
Representative Director:

Directors:

Hiroshi Kubota
Jiro Tsuge

Senior Executive andManaging Director:

Keiichi KatoToshiharu Inoue

Statutory Auditors:

Managing Directors:

Yasushi Sawada
Masahiro Oshima

Yoshikazu Sawanaka
Yasumi Shukuri
Hiroshi Kitabayashi

OUTLINE OF THE COMPANY (As of 30th September, 2012)
Established:
Stated Capital:
Number of Employees:
Head Office:Branch Office:Sales Offices:
Plants:Overseas Office:10th June, 1958
¥6,716,252,022
2,374
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
13 distribution centers and 6 regional sales departments which service
52 local outlets.
Hokkaido, Iwate, Niigata, Kanto,
Ibaraki, Yokosuka, Shounan, Shizuoka,
Matsusaka, Takatsuki, Hyogo, Okayama,
Hiroshima, Karatsu
Chicago, U.S.A.

13