Semi-Annual Report 2021
For the Six-Month Period Ended 30th September 2021

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 of
the Tokyo Stock Exchange 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, dessert and beverage
products and fresh meats. Ham and sausage, however, remain an integral part of our
product line and continue to account for almost a third of our sales.
While pursuing a leading position in the ham and sausage market, Marudai Food waseager 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 CHANGES 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

primarily due to the presumed risk of further economic
downturns as a result of pandemic-related developments inJapan and overseas.
In the industry in which the Marudai Food Group operates,
the business environment continued to be harsh. Demand foreating out was sluggish due to the extension until 30th
September 2021 of the state of emergency declarations andquasi-state of emergency measures issued in many areas ofJapan to combat COVID-19. At the same time, lack of clarity
with regard to the overall economic outlook led to budgetconsciousness among consumers and price competition thatwas even more intense than previously. Regarding the meat
market, domestic beef prices recovered, having fallen due to a
decline in demand during the previous year. Meanwhile,
domestic pork prices remained below the levels in the previous
year, when there was lively demand for eat-at-home meals,
although during the second half of the year they did approachsimilar levels to the previous year. Imported beef prices
exceeded the previous year’s levels, reflecting price increases
in the countries from which beef is imported as a result ofrecovery in demand overseas. Meanwhile, imported pork
prices turned around from the previous year’s repeatedfluctuations to significantly exceed the previous year’s levels,reflecting such factors as the recovery in consumption overseas
and escalating prices for animal feed.

First of all, we would like to express our profound gratitude forthe continued support of our shareholders.
We hereby would like to announce the business results for the
first six-month period of the company’s 74th fiscal year.
The Marudai Food Group applied the Accounting Standard
for Revenue Recognition (Accounting Standards Board ofJapan (ASBJ) Statement No. 29, 31st March 2020) and otherrelated standards from the beginning of the first quarter ended
30th June 2021. The Group also changed its method ofrecording distribution expenses. Comparisons and analysis
against the six-month period ended 30th September 2020 havebeen undertaken using results to which these changes inaccounting policy have been retroactively applied.
During the first six-month period ended 30th September
2021, conditions in the Japanese economy remained severe dueto the impact of COVID-19. With regard to the overall outlook,the economy can be expected to recover thanks to the efficacy
of a range of government policies undertaken in the course ofenforcing measures to prevent infection and encouraging
vaccination. However, the situation remains unpredictable,

1

In these difficult circumstances, the Marudai Food Groupadvanced its corporate activities with the aim of gaining
recognition as an enterprise with a social mission, namely, acomprehensive food products company offering merchandisethat satisfies the highest standards of safety and reliability.
As a result, consolidated net sales for the first six-month
period decreased by 3.0% year on year to ¥109,204 million.
Operating income was ¥101 million (compared to operating
loss of ¥865 million in the same period of the previous year)
and profit attributable to the owners of parent decreased by
60.3% to ¥98 million.
Once again, we would like to express our gratitude to ourshareholders and to ask for your continued support of ourbusiness in the future.
December 2021.

Yuji Sato
President and Representative Director

MARUDAI FOOD CO., LTD.

PRODUCTS

Processed Food Products
The Ham & Sausage Products operations strove to expand sales with a focus on mainstay products such as “Kunseiya-Ripened
Pork Sausage,” which won the three major awards in international competitions, including the Monde Selection 2021 Gold
Award. In addition, we also worked to expand sales by introducing new products such as “Gute Wurst Prime Pork Sausage,”which is distinguished by its robust umami flavour and juiciness. Despite these measures, there was a rebound following theprevious year’s increased demand for eat-at-home meals, sales competition with competitors intensified, and sales of midyear
gifts were sluggish. As a result, sales in the Ham & Sausage Products operations decreased by 7.2% year on year.
In our Precooked & Processed Foods operations, sales of retort curry products such as the “Bistro Club Beef Curry” series
were below the previous year’s level, mainly as a result of a rebound following the previous year’s increased demand for suchproducts for stockpiling at home. However, soup and sauce products for use in cooking, such as the “Bistro Club Doria Sauce”
series, performed well, and we introduced new products including the “Chicken Around the World” series, which enables
consumers to enjoy chicken-based cuisine from around the world at home with minimum effort. Meanwhile, sales of beverages
containing black tapioca decreased significantly, but sales of cooked rice products to convenience stores showed some recovery,
and the sales of Toraku Foods Co., Ltd., which joined the Marudai Food Group on 1st July 2020, contributed to revenues. As aresult, sales in the Precooked & Processed Foods operations increased by 0.7% year on year.
As a result, sales in the Processed Food Products segment amounted to ¥74,337 million, a decrease of 3.0% year on year.
Segment loss of ¥240 million was recorded (compared to segment loss of ¥1,199 million in the same period of the previous fiscal
year) owing mainly to reduced sales, although sales did not decline as far as in the previous fiscal year, thanks to lower raw
material prices and efforts to cut costs through rationalization.
Meat Products
With regard to beef, sales were above the previous year’s level, mainly resulting from efforts to increase sales to mass retailers,and higher unit prices, amid weak sales of commercial food products to the restaurant industry. Regarding pork, sales fell below
the previous year’s level due mainly to adjustment of our product range in order to secure profit and a rebound following theprevious year’s increased demand for eat-at-home meals.
As a result, sales in the Meat Products segment decreased by 2.9% year on year to ¥34,783 million. Segment income increasedby 3.6% year on year to ¥308 million, due mainly to efforts to improve profitability by adjusting our product range in a situation
where dramatic increases in the purchase prices for domestic beef and imported meat made it difficult to pass on the priceincreases.
Other
Sales in the Other business decreased by 1.2% year on year to ¥84 million and Segment income decreased by 10.4% to ¥33
million.

2

MARUDAI FOOD CO., LTD.

CONSOLIDATED BALANCE SHEETS
30th September 2021 and 2020
(Unaudited)

Millions of yen
2021
2020

ASSETS
Current assets:
Cash and time deposits ........................................................................
Receivables:
Trade notes and accounts ................................................................
Other ...............................................................................................
Allowance for doubtful accounts ....................................................
Inventories ...........................................................................................
Advances and other current assets .......................................................
Total current assets ..........................................................................
Investments and other assets:
Investment securities
Affiliates .........................................................................................
Other ...............................................................................................
Retirement benefit asset ......................................................................
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

¥

8,605

¥

7,894

Thousands of
U.S. dollars (Note)
2021$

76,86523,4701,123(11)17,359920
51,466

24,3901,086(15)
19,023789
53,167

209,647
10,031(98)
155,060
8,218
459,723189
12,831
1,834
357
2,544
(110)
17,645148
11,613
315
402
3,725
(116)
16,087

1,688
114,614
16,382
3,189
22,725(983)
157,615

18,72362,174
77,684
9,058
631
168,270(107,327)
60,9432,568¥ 132,622

18,841
61,61175,4848,861
222
165,019(103,654)
61,3652,929¥ 133,548

167,244555,373
693,91780,911
5,637
1,503,082(958,705)
544,377
22,939$ 1,184,654

Millions of yen
2021
2020

LIABILITIES AND NET ASSETS

Thousands of
U.S. dollars (Note)
2021

Current liabilities:
Payables:Trade notes and accounts payable ...................................................
Other ...............................................................................................
Short-term borrowings ........................................................................
Long-term debt due within one year ...................................................
Short-term lease obligations ................................................................
Accrued income taxes .........................................................................
Allowance for bonuses ........................................................................
Other current liabilities ........................................................................
Total current liabilities ....................................................................

¥ 22,653
7,198
8,712
2,411
990
131
958
1,706
44,759¥ 22,665
6,279
11,006
2,394
886
233
1,019
1,649
46,131Long-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 ................................................................

3,565
4,496
1,360
1,323
671
11,415

4,685
4,620
651
1,286
689
11,931

31,84540,161
12,148
11,818
5,993
101,965

Shareholders’ equity:
Common stock
Authorised — 40,000,000 shares in 2021 (40,000,000 shares in 2020)
Issued — 26,505,581 shares in 2021 (26,505,581 shares in 2020) ......
Capital surplus .....................................................................................
Retained earnings ................................................................................
Treasury stock, at cost .........................................................................
Total shareholders’ equity ...............................................................

6,716
22,08644,607(3,066)70,343

6,716
22,08645,107(2,697)
71,21259,991
197,285
398,454(27,387)
628,343

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

5,615
33
34
(201)
5,481

4,750
(7)
35
(1,075)
3,703

50,156295
304(1,796)
48,959Noncontrolling interests ........................................................................
Total net assets .....................................................................................
Total liabilities and net assets ..............................................................

624
76,448¥ 132,622

571
75,486¥ 133,548

5,574
682,876$ 1,184,654$

202,349
64,297
77,82021,536
8,843
1,170
8,557
15,241
399,813NET ASSETS

See the accompanying note.

4

MARUDAI FOOD CO., LTD.

CONSOLIDATED STATEMENTS OF INCOME
Six months ended 30th September 2021 and 2020
(Unaudited)Thousands of
U.S. dollars (Note)
2021

Millions of yen
2021
2020
Net sales ..................................................................................................
Cost of sales ............................................................................................

¥ 109,204
92,599¥ 112,536
95,881$ 975,471
827,146

Gross profit ..........................................................................................
Selling, general and administrative expenses ......................................

16,605
16,504

16,655
17,520148,325
147,423

Operating income (loss) ......................................................................

101

(865)

902

Other income (expenses):
Interest and dividend income ..............................................................
Real estate rent ....................................................................................
Interest expense ...................................................................................
Loss on disposal of property, plant and equipment, net ......................
Gain on bargain purchase ....................................................................
Loss on impairment of assets ..............................................................
Other, net .............................................................................................

169
86
(112)
(92)
–
(9)
88

163
81
(118)
(71)
998
(42)
150

1,510
768
(1,000)
(822)
–
(80)
785

130

1,161

1,161

Income before income taxes ...................................................................

231

296

2,063

Income taxes:
Current .................................................................................................
Deferred ...............................................................................................

135
(17)

214
(195)

1,206
(152)

118

19

1,054

113
(15)

277
(29)

1,009
(134)

Profit ........................................................................................................
Profit attributable to noncontrolling interests .....................................
Profit attributable to owners of parent .................................................

¥

98

¥

248

See the accompanying note.

5

¥

3.88

875

U.S. dollars (Note)

Yen
Profit attributable to owners of parent per share ................................

$

¥

9.75

$

0.03

MARUDAI FOOD CO., LTD.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Six months ended 30th September 2021 and 2020
(Unaudited)Thousands of
U.S. dollars (Note)
2021

Millions of yen
2021
2020
Profit ........................................................................................................
Other comprehensive income:Unrealised gains on securities .............................................................
Deferred losses on hedges ...................................................................
Adjustments for retirement benefits ....................................................
Share of other comprehensive income of associates accounted for using equity method ....
Total other comprehensive income .................................................
Comprehensive income ..........................................................................
Comprehensive income attributable to:
Owners of the parent ...........................................................................
Noncontrolling interests ......................................................................
See the accompanying note.

6

¥ 113

¥

277

$ 1,009

(332)
(2)
51
–
(283)
¥ (170)

917
(4)
106
(5)
1,014
¥ 1,291(2,966)(18)456–(2,528)$ (1,519)¥ (185)¥ 15¥ 1,262¥ 29$ (1,653)$ 134

MARUDAI FOOD CO., LTD.

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
Six months ended 30th September 2021 and 2020
(Unaudited)Thousands of
U.S. dollars (Note)
2021

Millions of yen
2021
2020
Common stock:
Balance at beginning and end of period .............................................

¥ 6,716¥ 6,716$ 59,991

Capital surplus:
Balance at beginning and end of period .............................................

¥ 22,086¥ 22,086$ 197,285

Retained earnings:
Balance at beginning of period ...........................................................
Cumulative financial impact of the change in accounting policy ......
Balance at the beginning of the year reflecting the change in accounting policy .....
Cash dividends paid ...........................................................................
Profit attributable to owners of parent ................................................
Balance at end of period .....................................................................

¥ 45,271–
45,271(762)
98¥ 44,607¥ 45,677
72
45,749(890)
248¥ 45,107$ 404,386–
404,386(6,807)875$ 398,454

Treasury stock, at cost:
Balance at beginning of period ...........................................................
Purchase of treasury stock ..................................................................
Balance at end of period .....................................................................

¥ (2,697)(369)¥ (3,066)¥ (2,658)(39)¥ (2,697)$ (24,091)(3,296)$ (27,387)

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

¥ 5,944(329)¥ 5,615¥ 3,833917¥ 4,750$ 53,095(2,939)$ 50,156¥¥$

Deferred gains (losses) 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 for period ............................................................................
Balance at end of period .....................................................................
Adjustments for retirement benefits:
Balance at beginning of period ...........................................................
Increase for period ..............................................................................
Balance at end of period .....................................................................
Noncontrolling interests:
Balance at beginning of period ...........................................................
Increase for period ..............................................................................
Balance at end of period .....................................................................
See the accompanying note.

7

¥

¥
¥

¥
¥

¥
¥

35
(2)
33

34
–
34

¥

¥
¥

(3)
(4)
(7)

41
(6)
35

$

$
$

(252)
51
(201)

¥ (1,182)107¥ (1,075)

$

613
11
624

¥

$

¥

546
25
571

$

$

313
(18)
295

304
–
304

(2,251)455(1,796)

5,476
98
5,574

MARUDAI FOOD CO., LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended 30th September 2021 and 2020
(Unaudited)

Millions of yen
2021
2020
Cash flows from operating activities:
Income before income taxes ................................................................
Depreciation and amortisation ............................................................
Loss on impairment of assets ..............................................................
Decrease in allowance for doubtful accounts ......................................
Decrease in liabilities for retirement benefits .....................................
Gain on bargain purchase ....................................................................
Interest and dividend income ..............................................................
Interest expense ...................................................................................
Loss on valuation of investment securities ..........................................
Loss on disposal of property, plant and equipment, net ......................
Decrease in receivables .......................................................................
Increase in inventories .........................................................................
Increase (decrease) in trade notes and accounts payable ....................
Decrease in consumption tax payable .................................................
Other, net .............................................................................................
Subtotal ...........................................................................................
Interest and dividends received ...........................................................
Interest paid .........................................................................................
Income taxes paid ................................................................................
Income taxes refund ............................................................................
Payments for special retirement expenses ...........................................
Net cash provided by operating activities .......................................

$ 2,063
34,12280(36)(1,536)–(1,510)
1,000
214
822
3,269
(13,265)
21,420(107)(2,097)44,4391,563(991)(1,608)

(204)
4,717

296
3,749
42
(1)
(126)
(998)
(163)
118
–
71
1,658
(864)
(1,145)
(288)
113
2,462
172
(118)
(330)
–
(91)
2,095

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 .........................
Purchase of shares of subsidiaries resulting in change in scope of consolidation ....
Other, net .............................................................................................
Net cash used in investing activities ...............................................

(18)(2,914)580–(123)(2,475)(17)(3,030)142(1,195)363(3,737)(161)(26,029)
5,181–(1,099)(22,108)

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 .............................................................................
Purchase of treasury shares .................................................................
Other, net .............................................................................................
Net cash provided by (used in) financing activities ........................

822–(1,331)
(470)
(762)
(369)
(3)
(2,113)

2,926
2,440
(2,683)
(458)
(889)
(40)
(4)
1,292

7,343
–
(11,889)(4,198)(6,807)(3,296)(28)(18,875)

Net increase (decrease) in cash and cash equivalents .........................
Cash and cash equivalents at beginning of period ..............................
Cash and cash equivalents at end of period .........................................

129
8,476
¥ 8,605

(350)
8,244
¥ 7,894

1,152
75,713$ 76,865

See the accompanying note.

8

¥

231
3,820
9
(4)
(172)
–
(169)
112
24
92
366
(1,485)
2,398
(12)
(235)
4,975
175
(111)
(180)
62

¥

Thousands of
U.S. dollars (Note)
2021

554

(1,822)
42,135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
affiliated companies 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 inother 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 andpractices. These financial statements should be read along with the Annual Report to Shareholders for the year ended
31st March 2021.
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 2021, which was ¥111.95 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.
Accounting changes(Application of the Accounting Standard for Revenue Recognition and other related standards)
The Group applied the Accounting Standard for Revenue Recognition (Accounting Standards Board of Japan (ASBJ)
Statement No. 29, 31st March 2020) and other related standards from the beginning of the first quarter ended 30th
June 2021, instituting a policy of recognising revenue matching the amount expected to be received in exchange forpromised goods or services when control of the goods or services has transferred to the customer. As a result, theGroup has changed to a method of deducting a portion of distribution expenses and promotion expenses, etc., whichwere previously recorded as selling, general and administrative expenses, from net sales. This change in accounting
policy was in principle applied retroactively; the financial statements for the six-month period ended 30th September
2020 are the consolidated financial statements following retroactive application of the standard.
(Change in the method of recording distribution expenses)
From the beginning of the first quarter ended 30th June 2021, the Group instituted a policy of changing a portion of
distribution expenses which were previously recorded as selling, general and administrative expenses to manufacturingcosts. The Group made this change in order to undertake profit and loss management (including departments,
products, and customers) more suited to actual circumstances, given that distribution expenses are increasingly
important. This included using the integration of the IT systems of the Company and its key consolidated subsidiaries
through the renewal of mission-critical systems as an opportunity to revise the method of allocating distribution
expenses. This change in accounting policy was applied retroactively; the financial statements for the six-month
period ended 30th September 2020 are the consolidated financial statements following retroactive application of thestandard.

9

DIRECTORS AND STATUTORY AUDITORS(As of 30th September 2021)

President andRepresentative Director:

Yuji Sato

Director and Chairman:

Tokuo Kudara

Managing Director:

Shigeki Fukushima

Directors:

Nobuyoshi Katoh
Kouji Mishima
Toshio Tanaka

Outside Directors:

Masahiro Fuchizaki
Keiko Kaneko

Statutory Auditor:

Toru Miyachi

Outside Statutory Auditors:

Takashi Matsuzawa
Motoaki Nishimura

10

OUTLINE OF THE COMPANY(As of 30th September 2021)

Established:

Major Subsidiaries:

10th June 1958

Hokkaido Marudai Food Co., Ltd.
Stated Capital:

Tohoku Marudai Food Co., Ltd.

¥6,716 million

Shin-etsu Marudai Food Co., Ltd.
Chubu Marudai Food Co., Ltd.

Number of Employees: 2,108

Chu-Shikoku Marudai Food Co., Ltd.
Head Office:21-3 Midori-cho, Takatsuki-shi,

Kyushu Marudai Food Co., Ltd.

Osaka, Japan

Toda Foods Co., Ltd.
Azumino Food Co., Ltd.

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

Marushin Foods Co., Ltd.

Tokyo, Japan

Toraku Foods Co., Ltd.
Pioneer Foods Co., Ltd.

Sales Offices:

The sales headquarters at the

Umeya Co., Ltd.

Company’s head office in Osaka

Yahata Food Co., Ltd.

controls 10 distribution centers andHornmeier Co., Ltd.

6 regional sales departments which

Marudaifood Co., Ltd.

service 23 local outlets.

Marudai Meat Co., Ltd.
Meat Supply Co., Ltd.

Plants:Hokkaido, Iwate,

Marbest Trading Co., Ltd.

Niigata, Kanto,

Marudai Service Co., Ltd.

Ibaraki, Yokosuka, Shonan,

8 Other subsidiaries

Shizuoka, Matsusaka,
Associated Company:

Takatsuki, Okayama,

Betagro MF Deli Co., Ltd.

Hiroshima, Karatsu

11

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