SEMI-ANNUAL REPORT 2014
For the Six-Month Period Ended 30th September, 2014

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 67th
fiscal year.
During the first six-month period ended 30th September 2014, the Japanese economy remained on amoderate recovery path, partly attributable to the beneficial effects of the Abe administration’s economicpolicies. Personal consumption, however, continued to remain unstable due to the backlash to last-minutedemand associated with the consumption tax increase and the impact of unstable weather during thesummer.
The Marudai Food Group’s Processed Food Products business continued to face challenges as prospects for
personal consumption remained uncertain following the consumption tax increase while prices of raw
materials and fuel increased sharply. The tough environment for the Meat Products business also persisted.
Beef prices in Japan remained high because of tighter supply. The outbreak of porcine epidemic diarrhoea(PED) as well as the unusually hot summer in 2013 resulted in a decrease in the supply of Japanese pork.
Under such circumstances, the Marudai Food Group adhered to its basic policies—strengthening the corebusiness, implementing a diversification strategy, and promoting low-cost operations—with the aim ofgaining recognition as an enterprise with a social mission, namely, a comprehensive food products company
offering merchandise satisfying the highest standards of safety and reliability.
As a result, consolidated net sales for the first six-month period increased by 5.3% year on year to 110,729
million yen. Operating income increased by 66.2% to 1,896 million yen, and net income increased by 56.1%
to 916 million yen.
Processed Food Products
The Ham & Sausage Products operations made vigorous efforts to expand sales of mainstay brands, such as“Kunseiya Ripened Pork Sausage ”, through sales promotions, including “Wanpaku Active Summer PresentCampaign .” We also emphasized the launch of new products, including the “GLANZ ” series of frankfurters.
For midsummer gift products, we worked to increase sales of the “Ouha ” and “Kousai ” series of giftpackages, consisting of products that won the Monde Selection Grand Gold Quality Award in the foodproducts category for the third consecutive year in 2014. As a result, sales of the Ham & Sausage Products
operations increased by 4.4% year on year.

1

In the Precooked & Processed Foods operations, the line-up of the “Sundubu ” series of Korean-style soup
mixes was enriched with the addition of an economy pack containing two packets. To expand sales, welaunched new products, including the “Dashi Uma Meijin ” series of flavourful soup stocks for hot-pot dishes
and “Butter Chicken Curry ” notable for its mild yet rich flavour. With regard to desserts and beverages, westrove to increase sales of mainstay products, such as the “SWEET CAFE ” series and the “TAPIOCA TIME ”
series of beverages with black tapioca. As a result, sales of the Precooked & Processed Foods operations
increased by 8.1% year on year.
As a result, sales in the Processed Food Products segment amounted to 78,431 million yen, up 5.9% year onyear. Although sharp increases in the prices of raw materials and fuel combined with intensified sales
competition made for a tough business environment, operating income increased by 13.0% year on year to
1,391 million yen thanks to price revisions and cost reductions achieved by streamlining.
Meat Products
While prices of imported beef remain high owing to decreased supply, we increased our market presence for
American beef in the premium price range. With regard to pork, in view of decreased supply of Japanesepork, we strengthened procurement to increase the volume we handle and consequently sales of pork grew.
As a result, sales in the Meat Products segment increased by 4.0% year on year to 32,111 million yen.
Operating income amounted to 408 million yen.
Other
Sales of the Other business increased by 10.2% year on year to 187 million yen, and operating income
decreased by 0.4% 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, 2014 and 2013
(Unaudited)

Millions of yen

ASSETS2014

20132014¥11,753$119,041

22,283375(56)
17,577
1,165
632
53,729224,230
2,750(566)148,433
10,4806,066
510,434

18
11,348
77
5,692
(388)
16,74769
12,007
73
7,318
(420)
19,047

164
103,682704
52,006(3,545)
153,011

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

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

166,697436,738
503,499
55,816
2,092
1,164,842(715,669)
449,173
10,306$1,122,924

Current assets:
Cash and time deposits .............................................................. ¥13,029
Receivables:
Trade notes and accounts ......................................................
24,542Other......................................................................................
301
Allowance for doubtful accounts ..........................................
(62)
Inventories .................................................................................
16,246
Deferred tax assets ....................................................................
1,147
Advances and other current assets .............................................
664
Total current assets ...............................................................
55,867
Investments and other assets:
Investment securitiesAffiliates ................................................................................
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.

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 .........................
Liabilities for retirement benefits...............................................
Other long-term liabilities .........................................................
Total long-term liabilities ......................................................

4

See the accompanying note.

Thousands of U.S.
dollars (Note)

2014

2013

2014

¥6,452
2,825
22,705
745
2,335
859
6,897
42,818¥8,202
1,691
22,078
751
2,355
562
6,654
42,293$58,949
25,811
207,446
6,807
21,3347,848
63,016391,211

4,149
1,229
2,312
–
2,864
466
¥11,020

5,742
2,047
2,464
892
–
505
¥11,650

37,908
11,22921,124–
26,1674,257$100,685

Thousands of U.S.
dollars (Note)

Millions of yen

2014

2013

2014

¥6,716
21,68637,579(699)
65,282$61,361
198,136
353,824(6,441)
606,880

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

3,806
(9)
(105)
–
3,692

33,3580(1,270)(24,039)
8,049

Minority interests .........................................................................
1,762
Total net assets ..........................................................................
69,066
Total liabilities and net assets .................................................... ¥122,904

1,630
70,604¥124,547

16,099631,028$1,122,924

NET ASSETS

Shareholders’ equity:
Common stock
Authorised-200,000,000 shares
Issued-132,527,909 shares in 2014 (132,527,909 shares in 2013) ...... ¥6,716
Capital surplus ...........................................................................
21,686
Retained earnings ......................................................................
38,726
Less treasury stock at cost .........................................................
(705)
Total shareholders’ equity ....................................................
66,423
Accumulated other comprehensive income:Unrealised gains on securities ...................................................
Deferred losses on hedges .........................................................
Foreign currency translation adjustments .................................
Adjustments for retirement benefits ..........................................
Total accumulated other comprehensive income ..................

5

MARUDAI FOOD CO., LTD.
CONSOLIDATED STATEMENTS OF INCOME
Six months ended 30th September, 2014 and 2013
(Unaudited)Thousands of U.S.
dollars (Note)

Millions of yen2014

2013

2014

¥105,129
80,74624,38323,242
1,141$1,011,686
778,383
233,303
215,980
17,323

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

146
(123)
(79)
27(54)
167
84
1,980

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

1,334
(1,124)
(722)
247
(493)
1,525
767
18,090

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

84917
1,114(198)

551
(71)
676
(89)

7,757
155
10,178(1,809)Net income .................................................................................... ¥916¥587

Net sales ........................................................................................ ¥110,729
Cost of sales ..................................................................................
85,194Gross profit ................................................................................
25,535
Selling, general and administrative expenses ............................
23,639Operating income ......................................................................
1,896
Other income (expenses):
Interest and dividend income ....................................................
Interest expense .........................................................................
Loss on disposal of property, plant and equipment, net ............
Foreign exchange gain ..............................................................
Loss on impairment of assets ....................................................
Other, net ...................................................................................

Yen

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

6See the accompanying note.

¥7.06

$

8,369

U.S. Dollars (Note)

¥4.52

$0.07

MARUDAI FOOD CO., LTD.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMESix months ended 30th September, 2014 and 2013
(Unaudited)Thousands of U.S.
dollars (Note)

Millions of yen

Income before minority interests .................................................
Other comprehensive income:Unrealised gains on securities ...................................................
Deferred losses on hedges .........................................................
Foreign currency translation adjustments ..................................
Adjustments for retirement benefits ..........................................
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 the accompanying note.

2014

2013

2014

¥1,114¥676$10,178

233
(1)
(31)
108

866
(10)
9–

2,129(9)
(283)
986

(1)
308
¥1,42211876¥1,552(9)
2,814$12,992¥1,222¥200¥1,462¥90$11,165$1,827

7

MARUDAI FOOD CO., LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
Six months ended 30th September, 2014 and 2013
(Unaudited)

Millions of yen

8

Thousands of U.S.
dollars (Note)2014
Common stock:
Balance at beginning and end of period ���������������������������������� ¥6,716

2013

2014

¥6,716$ 61,361

Capital surplus:
Balance at beginning and end of period ���������������������������������� ¥21,686¥21,686$198,136

Retained earnings:
Balance at beginning of period ������������������������������������������������ ¥38,719
Cash dividends paid ����������������������������������������������������������������(909)916
Net income ������������������������������������������������������������������������������
Balance at end of period ���������������������������������������������������������� ¥38,726¥38,032(1,040)587¥37,579$353,760(8,305)8,369$353,824Treasury stock, at cost:
Balance at beginning of period ������������������������������������������������ ¥ (705)(0)
Purchase of treasury stock �������������������������������������������������������
Balance at end of period ���������������������������������������������������������� ¥(705)¥ (698)(1)¥(699)$ (6,441)(0)$(6,441)

Unrealized gains on securities:
Balance at beginning of period ������������������������������������������������ ¥ 3,418
233
Increase for period �������������������������������������������������������������������
Balance at end of period ���������������������������������������������������������� ¥3,651¥ 2,940
866¥3,806$ 31,229
2,129$33,358

Deferred losses on hedges:
Balance at beginning of period ������������������������������������������������ ¥1(1)Decrease for period �����������������������������������������������������������������
Balance at end of period ���������������������������������������������������������� ¥0¥0(9)¥(9)$9(9)$0

See the accompanying note.

Thousands of U.S.
dollars (Note)

Millions of yen

2014
Foreign currency translation adjustments:
Balance at beginning of period ................................................. ¥(106)(33)
Decrease (increase) for period ������������������������������������������������
Balance at end of period ���������������������������������������������������������� ¥(139)

2013

2014

¥(124)19¥(105)

$

(968)
(302)
$(1,270)

Adjustments for retirement benefits:
Balance at beginning of period ������������������������������������������������ ¥(2,737)
106
Increase for period �������������������������������������������������������������������
Balance at end of period ���������������������������������������������������������� ¥(2,631)–––$(25,007)
968$(24,039)

Minority interests:
Balance at beginning of period ������������������������������������������������ ¥1,585
177
Increase for period �������������������������������������������������������������������
Balance at end of period ���������������������������������������������������������� ¥1,762¥1,56070¥1,630$ 14,481
1,618$16,099

9MARUDAI FOOD CO., LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended 30th September, 2014 and 2013
(Unaudited)

Millions of yen

Cash flows from operating activities:
Income before income taxes and minority interests ..................
Depreciation and amortisation ..................................................
Loss on impairment of assets ....................................................
Decrease (increase) in allowance for doubtful accounts ...........
Increase in severance and retirement benefits ...........................
Decrease in liabilities for 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 ..............
Increase (decrease) in receivables .............................................
Increase in inventories ...............................................................
Increase in trade notes and accounts payable ............................
Increase in consumption tax payable ........................................
Other, net ...................................................................................
Subtotal..................................................................................
Interest and dividends received .................................................
Interest paid ...............................................................................
Income taxes paid ......................................................................
Net cash provided by operating activities .............................

10See the accompanying note.

Thousands of U.S.
dollars (Note)

2014

2013

2014

¥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¥1,156
2,712
133
7
172
–
(158)
138
(11)
–
47
2,696
(3,147)
2,173
15
(42)
5,891
154
(139)
(229)
¥ 5,677$18,090
23,618
493
(73)
–
(64)
(1,334)
1,124
–
37
722
(12,746)(23,636)
29,831
2,074
2,111
40,247
1,361(1,115)(8,899)$ 31,594

Millions of yen

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 .....................................
Cash flows from financing activities:
Net decrease (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)

2014

2013

2014

¥(15)¥(15)$(137)–(2,193)70(69)(2,207)27(2,302)
200
128(1,962)–(20,037)640(630)(20,164)

(810)
–
(987)
(388)
(909)
(24)
(3,118)310
48(1,634)(453)(1,038)(20)(2,787)(7,401)–(9,018)(3,545)(8,305)(219)(28,488)(1)(1,868)14,897¥13,029(2)
926
10,827¥11,753(9)(17,067)
136,108$119,041

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 2014.
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, 2014, which was¥109.45 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, 2014)

President andTokuo Kudara
Representative Director:
Senior Executive andManaging Director:

Keiichi Katoh

Managing Directors:

Yoshio Kuramori
Yasushi SawadaDirectors:

Nobuyoshi Katoh
Shigeyoshi Chiba
Wataru Fukiage
Jiro TsugeStatutory Auditors:

Yoshikazu Sawanaka
Yasumi Shukuri
Motoaki Nishimura

OUTLINE OF THE COMPANY (As of 30th September, 2014)
Established:
Stated Capital:
Number of Employees:
Head Office:Branch Office:Sales Offices:
Plants:Overseas Office:10th June, 1958
¥6,716 million
2,165
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 3 regional sales departments which service
48 local outlets.
Hokkaido, Iwate, Niigata, Kanto,
Ibaraki, Yokosuka, Shounan, Shizuoka,
Matsusaka, Takatsuki, Hyogo, Okayama,
Hiroshima, Karatsu
Chicago, U.S.A.

13