August 8, 2016

Consolidated Financial Results
for the Three Months Ended June 30, 2016
(Japanese Accounting Standards)
Name of the Listed Company: Nitta Gelatin Inc.
Listing:First Section of Tokyo Stock Exchange
Stock code:
4977
URL:
http://www.nitta-gelatin.co.jp
Representative:
Koichi Ogata, Representative Director and President
Contact Person:
Toru Tamaoka, Director and Executive Officer;
General Manager of Administration Division
Tel: +81-72-949-5381
Scheduled date to file Quarterly Securities Report: August 9, 2016
Scheduled date to commence dividend payments: Supplementary explanatory materials prepared:No
Explanatory meeting:
No(Millions of yen with fractional amounts discarded, unless otherwise noted.)

1. Consolidated financial results for the three months ended June 30, 2016
(from April 1, 2016 to June 30, 2016)(1) Consolidated operating results(Percentages indicate year-on-year changes.)
Net income
Net sales
Three months ended
June 30, 2016
June 30, 2015

Millions of yen%

Operating income

Ordinary income

attributable to ownersof the parent

Millions of yen

Millions of yen%

Millions of yen

(4.4)
38.6

175
53

%

9,031
(1.6)
486
64.7
9,182
14.5
295
22.8
Note: Comprehensive income
For the three months ended June 30, 2016: ¥(595) million, (-%)
For the three months ended June 30, 2015: ¥663 million, 165.7%

Net income
per share
Three months ended
June 30, 2016
June 30, 2015

290
304

Diluted net income
per share

Yen

Yen

9.57
2.94
Note: Diluted net income per share is not disclosed due to the absence of latent shares with dilution effect.

(2) Consolidated financial position
As ofJune 30, 2016
March 31, 2016

Total assets

Net assets

Millions of yen

Millions of yen

36,10237,597

16,163
16,876

Reference: Equity
As of June 30, 2016:¥14,410 million
As of March 31, 2016: ¥14,972 million

Equity ratio
%

39.9
39.8

%

225.9
(66.0)

2. Cash dividends
Cash dividends per shareFirst quarter

Second quarter

Yen

Fiscal year ended March 31,
2016-

Fiscal year ending March 31,
2017-

Third quarter

Yen

Fiscal year ending March 31,2017 (Forecasts)

Fiscal year-end

Yen

Annual

Yen

Yen

6.00

-

6.00

12.00

6.00

-

6.00

12.00

Note: Changes to most recent dividend forecasts: None

3. Consolidated financial forecasts for the fiscal year ending March 31, 2017(from April 1, 2016 to March 31, 2017)
OperatingincomeNet sales

Six months ending
September 30, 2016
Fiscal year ending
March 31, 2017

(Percentages indicate year-on-year changes.)
Net income
Ordinary
Net income
attributable to owners
incomeper shareof the parent

Millionsof yen%Millionsof yen%Millionsof yen%Millionsof yen%18,700

2.3

650

44.9

600

64.0

300

104.0

16.33

38,200

3.6

1,500

17.8

1,400

42.9

800

67.5

43.54

Yen

Note: Changes to most recent consolidated financial forecasts: None

Notes
(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in achange in the scope of consolidation): None
New:
None
Excluded: None
(2) Adoption of special accounting methods for the preparation of quarterly consolidated financial
statements: No(3) Changes in accounting policies, changes in accounting estimates, and restatement of revisions
a. Changes in accounting policies due to revisions to accounting standards and other guidelines: Yes
b. Changes in accounting policies due to reasons other than a. above: No
c. Changes in accounting estimates: No
d. Restatement of revisions: No
Note: For details, please refer to “(3) Changes in Accounting Policies and Estimates, and Restatement of Revisions” in “2. Matters
Concerning Summary Information (Notes)” on page 4 of the Attachment to this report.

(4) Number of common shares issued
a. Total number of issued shares at the end of the period (including treasury stock)
As of June 30, 2016
18,373,974 shares
As of March 31, 2016
18,373,974 sharesb. Number of shares of treasury stock at the end of the period
As of June 30, 2016
162 shares
As of March 31, 2016
162 sharesc. Average number of shares
For the three months ended June 30, 2016
For the three months ended June 30, 2015

18,373,812 shares
18,373,812 shares* Disclosure of status of quarterly review procedure
This report falls outside the scope of quarterly review procedures as laid out in the Financial Instruments and Exchange Act. As of the timeof the release of this report, the review of the financial statements, etc., outlined in the Act had not yet been concluded.

* Proper use of earnings forecasts, and other special matters
The forward-looking statements, including earnings forecasts, contained in these materials are based on information currently available to
the Company and on certain assumptions deemed to be reasonable. These statements do not guarantee that the Company will achieve its
earnings forecasts. In addition, actual business and other results may differ substantially due to various factors. For details on theconditions assumed and the cautionary notes and items in the financial forecasts, please refer to “(3) Description of Consolidated Business
Forecasts and Other Forward-looking Information” in “1. Qualitative Information Concerning Quarterly Financial Statements” on page 3of the Attachment to this report.

Attachment Contents
1. Qualitative Information Concerning Quarterly Financial Statements･･････････････････････ 2(1) Description of Business Results････････････････････････････････････････････････････ 2(2) Description of Financial Position･･･････････････････････････････････････････････････ 3(3) Description of Consolidated Business Forecasts and Other Forward-looking Information･･･････ 3

2. Matters Concerning Summary Information (Notes)･････････････････････････････････････ 3(1) Significant Changes in Subsidiaries During the Quarterly Period Under Review･･････････････ 3(2) Application of Special Accounting Methods in the Preparation of Quarterly Consolidated
Financial Statements･････････････････････････････････････････････････････････････ 3(3) Changes in Accounting Policies and Estimates, and Restatement of Revisions････････････････ 4(4) Additional Information････････････････････････････････････････････････････････････ 4
3. Quarterly Consolidated Financial Statements･･････････････････････････････････････････ 5(1) Consolidated Balance Sheets ･･････････････････････････････････････････････････････ 5(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ･･･ 7
Consolidated Statements of Income
First quarter consolidated cumulative accounting period･････････････････････････････････ 7
Consolidated Statements of Comprehensive Income
First quarter consolidated cumulative accounting period･････････････････････････････････ 8(3) Notes to Quarterly Consolidated Financial Statements･･･････････････････････････････････ 9(Note Concerning Going Concern Assumption) ･･･････････････････････････････････････ 9(Note Concerning Significant Changes in Shareholders’ Equity)･･･････････････････････････ 9(Segment Information)･･･････････････････････････････････････････････････････････ 9

11. Qualitative Information Concerning Quarterly Financial Statements(1) Description of Business Results
In the first quarter of the fiscal year ending March 31, 2017, the outlook for global
economic situation was uncertain, clouded by the continued deceleration of the Chinese
economy and the decision of the U.K. to exit the European Union, among other factors.
Meanwhile, the U.S. economy continued to grow solidly.
In the Japanese economy corporate earnings and the employment environment
remained firm, although consumer spending and capital investment appeared to soften
and concerns remained over the future due to sharp fluctuations in foreign exchange
rates and the stock market and other factors.
Amid these circumstances, the Nitta Gelatin Group started the second year of its
medium-term management plan finishing in the fiscal year ending March 31, 2018, withthe entire Company working together to achieve the plan targets.
As a result, in the first quarter of the fiscal year ending March 31, 2017, net sales
declined 1.6% year on year to ¥9,031 million and operating income increased 64.7% to¥486 million; however, ordinary income decreased 4.4% to ¥290 million, mainly due toforeign exchange losses. Net income attributable to owners of the parent increased
225.9% year on year to ¥175 million.
Segment business performance was as follows:(a) Collagen Material BusinessIn the gelatin field, sales and profits both increased in Japan atop steady demand foredible gelatin and for use in capsules. In North America, demand for edible gelatin was
solid, however, the recovery of market conditions for gelatin for use in capsules was
slow, causing sales to falter.
Collagen peptide sales for use in health food declined, partly reflecting subdued
demand from inbound tourism.
Collagen casing sales were almost level year on year.
As a result, net sales in the segment declined 5.7% year on year to ¥6,481 million,
while segment profit (operating income) increased 34.4% to ¥519 million.
(b) Formula Solution BusinessIn food materials, sales and profits increased atop strong demand for ready-madedelicatessen items along with confectionary and desserts.
Adhesives sales were level year on year for both packaging and bookbinding. Sales

2were also boosted by the restart of procurement by a customer in the hygiene products
market. Profits increased as a result of cost reduction efforts.
As a result, net sales in the segment were up 10.5% year on year to ¥2,549 million
and segment profit (operating income) also increased 10.5% year on year to ¥290
million.

(2) Description of Financial Position(Assets)
Total assets amounted to ¥36,102 million at June 30, 2016, ¥1,494 million lower than at
March 31, 2016. This was mainly attributable to decreases in cash and deposits,
property, plant and equipment, and investment securities.
(Liabilities)
Total liabilities stood at ¥19,939 million at June 30, 2016, ¥781 million lower than at
March 31, 2016. This was mainly attributable to a decrease in long-term loans payable.
(Net assets)
Net assets amounted to ¥16,163 million at June 30, 2016, ¥713 million lower than at
March 31, 2016. This was mainly attributable to decreases in valuation difference onother available-for-sale securities and foreign currency translation adjustments.
As a result, the equity ratio stood at 39.9% at June 30, 2016, compared to 39.8% at
March 31, 2016.

(3) Description of Consolidated Business Forecasts and Other Forwardlooking Information
The consolidated earnings forecast for the fiscal year ending March 31, 2017 isunchanged from the consolidated earnings forecast announced on May 10, 2016 in the“Consolidated Financial Results for the Fiscal Year Ended March 31, 2016.”
Actual business and other results may differ substantially from projections due tovarious factors.

2. Matters Concerning Summary Information (Notes)(1) Significant Changes in Subsidiaries During the Quarterly Period Under
ReviewNone
3

(2) Application of Special Accounting Methods in the Preparation of
Quarterly Consolidated Financial Statements
None(3) Changes in Accounting Policies and Estimates, and Restatement ofRevisions(Changes in Accounting Policies)(Application of Practical Solution on a Change in Depreciation Method due to Tax
Reform 2016)
Following the revision of the Corporation Tax Act, the Company applied “Practical
Solution on a Change in Depreciation Method due to Tax Reform 2016 (ASBJ Practical
Issues Task Force Report No. 32, June 17, 2016) from the first quarter of the fiscal year
ending March 31, 2017. Accordingly, the depreciation method for buildings acquired on
or after April 1, 2016 will be changed from the declining-balance method to thestraight-line method.
The effect of this change on the Company’s consolidated profit and loss for the firstquarter of the fiscal year ending March 31, 2017 is minor.

(4) Additional Information(Application of Revised Implementation Guidance on Recovery of Deferred Tax
Assets)The Company has applied “Revised Implementation Guidance on Recovery of Deferred
Tax Assets” (ASBJ Guidance No. 26, March 28, 2016) from the first quarter of the
fiscal year ending March 31, 2017.

4

3. Quarterly Consolidated Financial Statements(1) Consolidated Balance Sheets(Millions of yen)

Fiscal 2016
(As of March 31, 2016)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
Other, net
Total property, plant and equipment
Intangible assets
Other
Total intangible assets
Investments and other assets
Investment securities
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets

5

1Q Fiscal 2017
(As of June 30, 2016)

2,688
7,375
5,262
1,429
2,275
629
(2)
19,657

2,138
7,469
5,427
1,200
2,311
655
(3)
19,200

4,412
5,000
4,311
13,724

4,108
4,423
4,475
13,007

357
357

342
342

2,919
939
(0)
3,858
17,94037,597

2,645
906
(0)
3,552
16,902
36,102

(Millions of yen)

Fiscal 2016
(As of March 31, 2016)
Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of long-term loans payable
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Noncurrent liabilities
Long-term loans payable
Net defined benefit liability
Other
Total noncurrent liabilities
Total liabilities
Net Assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on otheravailable-for-sale securities
Deferred gains (losses) on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive
incomeNon-controlling interests
Total net assets
Total liabilities and net assets

6

1Q Fiscal 2017
(As of June 30, 2016)

4,252
2,186
2,215
145
213
2,062
11,076

4,109
2,514
2,082
153
333
1,973
11,167

5,380
2,938
1,325
9,644
20,720

4,717
2,808
1,246
8,772
19,939

3,144
2,966
9,569
(0)
15,680

3,144
2,966
9,634
(0)
15,745

1,024

862

(38)
466
(2,160)(60)(188)(1,948)(707)(1,334)

1,904
16,876
37,597

1,752
16,16336,102

(2) Consolidated Statements of Income and Consolidated Statements ofComprehensive Income
Consolidated Statements of Income(First quarter consolidated cumulative accounting period)(Millions of yen)

1Q Fiscal 2016
(From April 1, 2015
to June 30, 2015)
9,182
7,337

1Q Fiscal 2017
(From April 1, 2016
to June 30, 2016)
9,031
6,979

Gross profit on sales

1,845

2,052

Selling, general and administrative expenses

1,549

1,565

295

486

4
14
75
20

4
14
39
40

114

99

86
13
6

62
228
3

105

294

304

290

Gain on negative goodwill

502-

Total extraordinary gains

502-

Loss on retirement of noncurrent assets
Loss on stepped acquisitions

1
620

1
-

Total extraordinary losses

622

1

Income before provision for income taxes

184

289

Income taxes

153

120

Net income

31

168

Net loss attributable to non-controlling interests

(22)

(7)

Net income attributable to owners of the parent

53

175

Net sales
Cost of sales

Operating income
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Equity in earnings of affiliates
Other

-

Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Equity in losses of affiliates
Other

-

Total non-operating expenses
Ordinary income
Extraordinary gains

Extraordinary losses

7Consolidated Statements of Comprehensive Income(First quarter consolidated cumulative accounting period)(Millions of yen)

Net income

1Q Fiscal 2016
(From April 1, 2015
to June 30, 2015)31

Other comprehensive income (loss)
Valuation difference on otheravailable-for-sale securities
Deferred losses on hedges

1Q Fiscal 2017
(From April 1, 2016
to June 30, 2016)
168

39

(162)

(3)

(23)

Foreign currency translation adjustments

165

(743)

Pension liability adjustment
Share of other comprehensive loss of
associates accounted for using equity method
Total other comprehensive income (loss)

(13)

212

444

(46)

632

(763)

663

(595)

Owners of the parent

680

(450)

Non-controlling interests

(17)

(144)

Total comprehensive income
Comprehensive income attributable to:8(3) Notes to Quarterly Consolidated Financial Statements(Note Concerning Going Concern Assumption)
None(Note Concerning Significant Changes in Shareholders’ Equity)
None(Segment Information)
I. First three months of the fiscal year ended March 31, 2016 (From April 1, 2015 toJune 30, 2015)
1. Information on net sales, income and loss by reporting segment(Millions of yen)
Reporting segment
Collagenmaterial
businessAmounts in the
consolidated
financialstatements*2

Formulasolutionbusiness

Total

6,874

2,308

9,182

-

9,182

413

-

413

(413)

-

7,288

2,308

9,596

(413)

9,182

386

262

648

(353)

295

Adjustments*1

Net sales
Sales to third parties
Inter-segment sales andtransfers
Total
Segment income(Notes) 1. Adjustment for segment income of ¥(353) million comprises elimination ofintersegment transactions of ¥(7) million and unallocated expenses of ¥(346)
million.
2. Segment income is adjusted against the operating income recorded in the
consolidated income statement.

2. Information on reporting segment assets
Segment assets of the Collagen Material Business had increased by ¥4,207 million
at June 30, 2016 as a result of Nitta Gelatin Inc. consolidating Nitta Gelatin India
Ltd., Bamni Proteins Ltd. and Reva Proteins Ltd. as subsidiaries.
3. Information on impairment loss on noncurrent assets and goodwill by reporting
segments(Material gain on negative goodwill)
The Collagen Material Business segment recorded a ¥502 million gain on negative
goodwill in the three months ended June 30, 2016 as a result of the conversion of
Nitta Gelatin India Ltd., Bamni Proteins Ltd. and Reva Proteins Ltd.

9

II. First three months of the fiscal year ending March 31, 2017 (From April 1, 2016 toJune 30, 2016)
1. Information on net sales, income and loss by reporting segment(Millions of yen)
Reporting segment
Collagenmaterial
business
Net sales
Sales to third parties
Inter-segment sales andtransfers
Total
Segment income

Amounts in the
consolidated
financialstatements*2

Formulasolutionbusiness

Total

6,481

2,549

9,031

-

9,031

455

4

460

(460)

-

6,937
519

2,554
290

9,491
809

(460)
(322)

9,031
486

Adjustments*1(Notes) 1. Adjustment for segment income of ¥(322) million comprises elimination ofintersegment transactions of ¥(4) million and unallocated expenses of ¥(318)million.
2. Segment income is adjusted against the operating income recorded in the
consolidated income statement.

2. Information on impairment loss on noncurrent assets and goodwill by reporting
segments
None10