May 9, 2014

Consolidated Financial Results
for the Fiscal Year Ended March 31, 2014
(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:
Norimichi Soga, Representative Director and President
Contact Person:
Tsuneo Sasaki, Director and Senior Managing Executive Officer;
General Manager of the General Administration Division
Tel: +81-72-949-5381
Scheduled date of General Shareholders’ Meeting: June 26, 2014
Scheduled date to file Securities Report:
June 26, 2014
Scheduled date to commence dividend payments:

June 27, 2014

Supplementary explanatory materials prepared:
Explanatory meeting:Yes
Yes (For analysts and institutional investors)(Millions of yen with fractional amounts discarded, unless otherwise noted.)

1. Consolidated financial results for the fiscal year ended March 31, 2014
(from April 1, 2013 to March 31, 2014)(1) Consolidated operating results(Percentages indicate year-on-year changes.)
Net sales
Fiscal year ended
March 31, 2014
March 31, 2013

Operating income

Ordinary income

Net income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

32,814
28,772

14.0
-

955
1,595

(40.1)
-

1,115
1,978

(43.6)
-

665
1,525

(56.4)-(Note) Comprehensive income
For the year ended March 31, 2014: ¥1,227 million (-35.9%)
For the year ended March 31, 2013: ¥1,913 million (-%)

Fiscal year ended
March 31, 2014
March 31, 2013

Net income
per share

Diluted net
income per
share

Return on
equity (ROE)

Ordinary
income/Total
assetsOperatingmargin

Yen

Yen

%

%

%

37.90
5.7
3.9
2.9
17.3
8.2
5.5
96.72
(Reference) Equity in earnings of affiliates
For the year ended March 31, 2014: ¥97 million
For the year ended March 31, 2013: ¥262 million
Note: Consolidated financial results for the year ended March 31, 2013 were adjusted retroactively, applying accounting
policies that were changed in line with revisions of accounting standards. Accordingly, the Company has not disclosed
year-on-year comparisons between results for the year ended March 31, 2012.
Diluted net income per share is not disclosed due to the absence of latent shares with dilution effect.

(2) Consolidated financial position
Total assets
As ofMarch 31, 2014
March 31, 2013

Net assets

Equity ratio

Net assets per share

Millions of yen

Millions of yen%

Yen

31,38925,19013,781
9,724

43.4
38.0

742.20607.31(Reference) Equity
As of March 31, 2014: ¥13,636 millionAs of March 31, 2013: ¥9,577 million
Note: The consolidated financial position as of March 31, 2013 was adjusted retroactively, applying accounting policies thatwere changed in line with revisions of accounting standards.

(3) Consolidated cash flows
Net cash provided by(used in) operating
activities

Net cash used ininvesting activities

Net cash provided by(used in) financing
activities

Cash andcash equivalents
at end of year

Millions of yen

Millions of yen

Millions of yen

Millions of yen

(692)
2,050

(3,105)(1,557)

3,875
(376)

2,406
2,258

Fiscal year ended
March 31, 2014
March 31, 2013

2. Cash dividends
Cash dividends per share

Fiscal year ended
March 31, 2013
Fiscal year ended
March 31, 2014
Fiscal year ending
March 31, 2015
(Forecasts)

AnnualTotal amount ofdividends(annual)Payout ratio(consolidated)

Dividends on net
assets(consolidated)

Yen

Yen

Millions of yen

%

%

-

8.00

14.00

220

14.5

2.5

6.00

-

6.00

12.00

220

31.7

1.8

6.00

-

6.00

12.00

First
quarter

Secondquarter

Third
quarter

Fiscalyear-end

Yen

Yen

Yen

-

6.00

-

18.4

Note: Breakdown of dividends for the March 31, 2013 fiscal year-end: ¥6.00 in ordinary dividend and ¥2.00 incommemorative dividend per share

3. Consolidated financial forecasts for the fiscal year ending March 31, 2015
(from April 1, 2014 to March 31, 2015)(Percentages indicate year-on-year changes.)
OperatingincomeNet sales

Six months ending
September 30, 2014
Fiscal year ending
March 31, 2015

Ordinary
incomeNet income
per share

Net income

Millionsof yen%Millionsof yen%Millionsof yen%Millionsof yen%Yen

18,000

12.3

800

46.8

800

26.9

500

8.5

27.21

36,500

11.2

1,800

88.4

1,900

70.4

1,200

80.3

65.31

Notes:(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in achange in the scope of consolidation): No
New:
None
Excluded: None
(2) 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 “(5) Notes to Consolidated Financial Statements (Changes in
Accounting Policies)” in “3. Consolidated Financial Statements” on page 21 of the Attachment to thisreport.
(3) Number of common shares issued
a. Total number of issued shares at the end of the period (including treasury stock)
As of March 31, 2014
18,373,974 shares
As of March 31, 2013
15,770,074 sharesb. Number of shares of treasury stock at the end of the period
As of March 31, 2014
162 shares
As of March 31, 2013162 sharesc. Average number of shares
For the year ended March 31, 2014
For the year ended March 31, 2013

17,556,927 shares
15,769,912 shares(Reference) Summary of non-consolidated operating results
1. Non-consolidated financial results for the fiscal year ended March 31, 2014
(from April 1, 2013 to March 31, 2014)(1) Non-consolidated operating results(Percentages indicate year-on-year changes.)
Net sales
Fiscal year ended
March 31, 2014
March 31, 2013

Operating income

Net income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

22,15920,261

9.4
(1.5)

684
910

(24.8)(33.6)

1,020
1,294

(21.2)
(8.0)

713
874

(18.4)
13.0

Net income
per share
Fiscal year ended
March 31, 2014
March 31, 2013

Ordinary income

Diluted net income
per share

Yen

Yen

40.63
55.42

-

(2) Non-consolidated financial position
Total assets
As ofMarch 31, 2014
March 31, 2013

Net assets

Equity ratio

Net assets per share

Millions of yen

Millions of yen%

Yen

25,196
21,177

12,868
9,162

51.1
43.3

700.35581.04(Reference) Equity
As of March 31, 2014: ¥12,868 million
As of March 31, 2013: ¥9,162 million* Disclosure of status of audit proceduresThis report falls outside the scope of audit procedures as laid out in the Financial Instruments and Exchange Act.
As of the time of the release of this report, the audit procedures of the consolidated and non-consolidated
financial statements outlined in the Act had not been concluded.
* Proper use of earnings forecasts, and other special matters(Disclaimer to forward-looking statements)
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. Thesestatements do not guarantee that the Company will achieve its earnings forecasts. In addition, actual businessand other results may differ substantially due to various factors. For details on the conditions assumed and thecautionary notes and items in the financial forecasts, please refer to “(1) Analysis of Operating Results, 3)
Earnings forecasts for the fiscal year ending March 31, 2015” under “1. Analysis of Operating Results andFinancial Position” on page 2 of the Attachment to this report.
(How to obtain earnings results presentation materials)
The Company plans to hold an earnings results briefing for institutional investors and analysts on May 16, 2014.
The earnings results presentation materials are scheduled to be promptly posted on the Company’s webpage
following the briefing.

Attachment Contents
1. Analysis of Operating Results and Financial Position(1) Analysis of Operating Results･･････････････････････････････････････････････････････ 2(2) Analysis of Financial Position･･････････････････････････････････････････････････････ 5
2. Management Policies(1) Basic Management Policies of the Company･･････････････････････････････････････････ 9(2) Target Management Indicators･････････････････････････････････････････････････････ 9(3) Medium- to Long-term Management Strategies and Issues Facing the Company･････････････ 10
3. Consolidated Financial Statements(1) Consolidated Balance Sheets･････････････････････････････････････････････････････ 12(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income････････････････････････････････････････････････ 14
Consolidated Statements of Comprehensive Income･･･････････････････････････････････ 15(3) Consolidated Statements of Changes in Net Assets････････････････････････････････････ 16(4) Consolidated Statements of Cash Flows･････････････････････････････････････････････ 18(5) Notes to Consolidated Financial Statements･･････････････････････････････････････････ 20(Note Concerning Going Concern Assumption) ････････････････････････････････････ 20(Changes in Accounting Policies)････････････････････････････････････････････････ 20(Changes in Presentation Basis) ･････････････････････････････････････････････････ 21(Additional Information)･･･････････････････････････････････････････････････････ 21(Segment Information)･････････････････････････････････････････････････････････ 22(Per Share Information) ･･･････････････････････････････････････････････････････ 27(Subsequent Events) ･･････････････････････････････････････････････････････････ 27
4. OtherTransfer of Directors and Corporate Auditors････････････････････････････････････････････ 29

11. Analysis of Operating Results and Financial Position
As stated in "(5) Notes to Consolidated Financial Statements (Changes in Accounting
Policies)" in "3. Consolidated Financial Statements," certain overseas affiliatecompanies started applying the revised IAS 19 from the three months ended June 30,
2013. This change in accounting policy was also applied retroactively to restate
financial results from the previous fiscal year in year-on-year comparisons.
(1) Analysis of Operating Results1) Operating results for the fiscal year ended March 31, 2014
In the fiscal year ended March 31, 2014, the global economy continued to recovergradually, despite continuing uncertainty due to issues such as the tapering ofquantitative easing in the United States, concerns of a slowdown among emerging
economies, and the future development of the European debt problem. Meanwhile, theJapanese economy also continued to recover gradually, with the yen depreciating andstock prices rising as a result of government policies and the Bank of Japan’s monetaryeasing. Nevertheless, the situation remains unclear, due to sluggish consumer spending
following the increase in the consumption tax rate, along with concerns over the impactof a downturn in the global economy.
Against this backdrop, Nitta Gelatin faced challenging business conditions
including the increased cost of import procurements in Japan due to the yen’s
depreciation, rising prices for gelatin and other raw materials for the Group, and higher
energy prices in Japan.
The Group worked to provide products and services a step ahead of customers'
expectations, develop new products, cultivate new markets and reduce costs, under theslogan of "Amaze the World!" and a basic strategy to "Win out!! in growing Asianmarket."Meanwhile, the Company issued 2,603,900 shares of common stock by way of
public subscription in July and third-party allocation in August 2013. The resulting
proceeds of ¥3,135 million in total were used to secure funds for capital expenditures
and to improve the Group’s financial position.
As a result, in the fiscal year ended March 31, 2014, net sales were up 14.0% year
on year to ¥32,814 million. Operating income was down 40.1% to ¥955 million, mainly

2due to delays in passing along higher costs in Japan. Ordinary income decreased 43.6%
to ¥1,115 million on account of a decrease in equity in earnings of affiliates due to a
decline in the performance of an Indian affiliate. Net income decreased 56.4% to ¥665
million, mainly reflecting the booking of an extraordinary loss in line with a reductionin the Company’s shareholding in an Indian affiliate due to Indian shareholding
regulations.
2) Segment business performance(Collagen Material Business)
In the gelatin field, sales of mainly edible gelatin and gelatin for capsules increased inJapan. Profit margins declined, however, as a result of increased import procurement
costs due to the yen’s sharp depreciation, and insufficient progress in passing along
higher costs driven by rising raw material prices worldwide. In the North American andAsian markets, sales increased owing to sales volume growth and price revisions backed
by buoyant demand for edible gelatin and gelatin for capsules. Earnings also grewsteadily in the North American and Asian markets.
Collagen peptide sales posted strong growth in Japan and Asia overall, but
profitability declined because of the rise in raw material prices.
Collagen casing sales were lackluster and a loss was incurred due to quality issues
that arose during the first six-months of the fiscal year in connection with collagencasing manufactured and sold by a U.S. subsidiary.
As a result, net sales in the segment were up 20.1% year on year to ¥22,436 million
and segment income (operating income) was down 20.8% to ¥1,420 million.
(Formula Solution Business)
In food materials, performance was sluggish on the whole, with sales increasing only
slightly. Earnings declined despite efforts to curtail advertising expenses.
In adhesives, overall sales increased only slightly due to delays in the adoption of
new sealants by customers, despite strong sales of hot-melt adhesives due to increased
demand pending the consumption tax rise. Earnings declined as selling, general andadministrative expenses increased due to stronger efforts to develop new customers forsealants.
As a result, net sales in the segment were up 2.8% year on year to ¥10,377 million.

3

Segment income (operating income) was down 20.1% to ¥920 million.
3) Earnings forecasts for the fiscal year ending March 31, 2015
(Progress on the medium-term management plan during the fiscal year ended March 31,
2014)
The cost of sales for gelatin sold in the Japanese market increased drastically comparedwith initial assumptions, due to surging gelatin raw material prices worldwide, higher
energy prices in Japan, and the yen’s depreciation, which was much sharper than
expected. The Company worked vigorously to revise the price of gelatin sold in theJapanese market, and to cut costs, but was unable to fully make up for the higher cost of
sales. Efforts were also made to expand sales of sealants, but deliveries of new sealantproducts were pushed back to the fiscal year ending March 31, 2015.
Furthermore, the Company incurred losses on quality issues that arose during thefirst six months of the fiscal year ended March 31, 2014 in connection with collagencasing manufactured and sold by a U.S. subsidiary. Moreover, during the same period,
an Indian affiliate saw a large decline in the capacity utilization rate due to the need torespond to environmental issues, resulting in a decline in business performance.
Meanwhile, the Company executed main capital investment projects largely onschedule. The Company plans to complete construction of the following projects onschedule in the year ending March 2015: gelatin production facilities, a new adhesives
building and related production facilities at the Osaka Plant, and collagen casing
production facilities in the U.S. However, the completion of a U.S. collagen peptide
plant has been pushed back to May 2014.
As a result of the foregoing, the Company’s progress on achieving the goals of themedium-term management plan in the fiscal year ended March 31, 2014 was as follows:(millions of yen)
Medium-term
management plan target

Forecasts

Difference

Net sales

32,70032,814＋114

Operating income

1,700

955

(745)

Ordinary income

1,890

1,115

(775)

Net income

1,380

665

(715)

4

(Business Forecasts for the Fiscal Year Ending March 31, 2015)
The Company is positioning the fiscal year ending March 31, 2015 as a year forstrengthening its earnings base to achieve the numerical targets of the medium-term
management plan in the year ending March 31, 2016. Accordingly, the Company’s toppriority will be to secure adequate profit margins on products sold in the Japanesemarket. To this end, the Company will make every effort to revise prices. Anothermeasure will be to rigorously reduce costs, including reforming the procurement
structure.
Furthermore, Asia is seeing growing demand for gelatin, collagen peptide, collagencasing and sealants. Eyeing this demand, the Company will work to expand sales
globally, centered on Asia.
With regard to capital investment, the Company will actively invest in projects thatrealize high-value added products and services in Japan. Overseas, the Company will
actively invest in projects aimed at increasing production and enhancing productivity inorder to boost its supply capacity.
Meanwhile, the Company had planned to convert an Indian affiliate into a
consolidated subsidiary in the fiscal year ending March 31, 2015. However, theCompany has postponed these plans to the fiscal year ending March 31, 2016.
Based on the aforementioned assumptions, the Company’s consolidated business
forecasts for the fiscal year ending March 31, 2015, and differences from the targets ofthe medium-term management plan, are as follows:(millions of yen)
Medium-term
management plan target

Forecasts

Difference

Net sales

38,60036,500(2,100)Operating income

2,700

1,800

(900)

Ordinary income

2,600

1,900

(700)

Net income

1,500

1,200

(300)

(2) Analysis of Financial Position
1) Assets, liabilities and net assets
Total assets amounted to ¥31,389 million at March 31, 2014, ¥6,199 million higher thanat March 31, 2013.

5

(Current assets)
Current assets rose ¥3,365 million from March 31, 2013 to ¥18,685 million. This was
mainly attributable to a ¥147 million increase in cash and deposits, a ¥2,324 million
increase in notes and accounts receivable-trade, and a ¥810 million increase ininventories.
(Noncurrent assets)
Noncurrent assets increased ¥2,833 million from March 31, 2013 to ¥12,704 million atMarch 31, 2014. This was mainly due to a ¥2,516 million increase in property, plant andequipment in line with capital investments and a ¥307 million increase in investment
securities.
(Current liabilities)
Current liabilities stood at ¥10,080 million at March 31, 2014, ¥443 million higher thanat March 31, 2013. This was mainly attributable to a ¥518 million increase in notes andaccounts payable-trade, and a ¥161 million increase in accounts payable-other, despite a¥135 million decrease in the current portion of long-term loans payable, and a decreaseof ¥200 million in the current portion of bonds.
(Noncurrent liabilities)
Noncurrent liabilities increased ¥1,699 million to ¥7,528 million. This was mainly due
to a ¥1,273 million increase in long-term loans payable and a ¥175 million increase inlease obligations.
(Net assets)
Net assets were ¥13,781 million as of March 31, 2014, ¥4,056 million higher than as ofMarch 31, 2013. This was mainly attributable to a ¥429 million increase in retained
earnings, and increases of ¥1,567 million each in capital stock and capital surplus
resulting from the issuance of common stock by way of public subscription andthird-party allocation. As a result, the equity ratio stood at 43.4% as of March 31, 2014,
compared to 38.0% as of March 31, 2013.
2) Cash flows
Cash and cash equivalents as of March 31, 2014 were ¥2,406 million, up ¥147 million

6from March 31, 2013.
Cash flows for each activity and reasons are as follows.
(Net cash used in operating activities)
Operating activities used net cash of ¥692 million. This was mainly due to a ¥2,147
million increase in notes and accounts receivable-trade and a ¥624 million increase ininventories. These factors were partly offset by ¥1,070 million in income before income
taxes and minority interests and ¥914 million in depreciation and amortization.
The increase in notes and accounts receivable-trade reflects a temporary curtailmentof the liquidation of receivables due to fund procurement by way of public subscription
and third-party offering.
(Net cash used in investing activities)
Investing activities used net cash of ¥3,105 million. The main uses of cash were ¥2,949
million for the purchase of property, plant and equipment.
(Net cash provided by financing activities)
Financing activities provided net cash of ¥3,875 million. The main sources of cash were
proceeds from long-term loans payable of ¥3,222 million and proceeds from issuance ofcommon stock of ¥3,135 million. These cash inflows were partly offset by a ¥2,165
million repayment of long-term loans payable.
(Reference)
Trends in cash flow indicators are as shown below:
Fiscal year ended

Fiscal year ended

Fiscal year ended

Fiscal year ended

Fiscal year ended

March 31, 2010 March 31, 2011 March 31, 2012 March 31, 2013 March 31, 2014

Equity ratio (%)

27.2

28.5

34.4

38.0

43.4

Market value equity ratio(%)
Interest-bearing debt tocash flow ratio (Years)
Interest coverage ratio(Times)

–

–

34.3

80.6

61.3

9.7

4.7

12.4

3.4

(11.8)

3.8

8.6

3.4

13.8

(5.2)

Equity ratio: equity / total assets
Market value equity ratio: market capitalization / total assets
Interest-bearing debt to cash flow ratio: interest-bearing debt / cash flow
Interest coverage ratio: cash flow / paid interest

7Notes: 1. All indicators are calculated using consolidated financial figures.
2. Market capitalization is calculated based on the number of issued shares,
excluding treasury stock, as of the end of the fiscal year.
3. The figure used for cash flow is “net cash provided by operating activities” on the
consolidated statements of cash flows.
4. Interest-bearing debt includes all liabilities recorded on the consolidated balance
sheets on which interest was paid. Furthermore, regarding the paid interest, we
use “interest expenses paid” recorded on the consolidated statements of cash
flows.

8

2. Management Policies(1) Basic Management Policies of the Company
At its heart, our management policy is to contribute to the creation of a prosperous
society for all humankind. The Group’s approach to achieve this is to make full use ofcollagen materials that have been utilized over the years and to add high market value tothem for return to society as food and industrial materials. Our policy also calls for
management from a global perspective, as a Company contributing to the conservationof the Earth’s environment.
Corporate Philosophy
Based on a spirit of empathy and sincerity, we, the members of the Nitta Gelatin
Family, are dedicated to the development of our business and contributions to theglobal community.
We will lead prosperous and fulfilling lives through our competence and utmost
efforts.
Corporate Vision
The Nitta Gelatin Group, as a world leading gelatin manufacturer, uses its proprietary
technology to quickly and efficiently provide superior products and services to global
customers.
The Group produces healthy, functional and valuable products in multinational
facilities that are safe, reliable and environmentally friendly.
Basic Management Policies(1) Customer First(2) Globalization & Innovation(3) Selection and Concentration(2) Target Management Indicators
From the viewpoint of improving both business growth and profitability, management
indicators important to the Nitta Gelatin Group are the consolidated growth rate of net
sales, consolidated operating margin, and consolidated ordinary margin. The Groupaims to maximize earnings on stable business growth by providing products andservices that exceed customers’ expectations, and by continually reducing cost and9improving productivity to remain competitive as a manufacturer.
(3) Medium- to Long-term Management Strategies and Issues Facing theCompany
At the same time as the Japanese market continues to mature and change structurally,
new markets in China, India and Southeast Asia continue to expand as a result ofgreater economic development. We recognize that the Group’s prime mission inbusiness management is to remain on top of markets as they change and develop ourbusiness.
Out of this recognition, and given the upcoming 100th anniversary of its foundingin 2018, Nitta Gelatin decided to formulate a new long-term management vision, 100thYear Vision, and a medium-term management plan based on it covering the 3-year
period from the year ended March 2014 to the year ending March 2016.
The slogan for Nitta Gelatin’s 100th Year Vision is to “Amaze the World!” Under
this slogan, the Company’s basic strategy is to “Win out!! in growing Asian market.”
The Company aims to develop products and services that are one step ahead ofcustomer expectations, develop new products and cultivate new markets in order toexpand earnings. This should help raise the Company’s corporate value and ensure it
can continue contributing to society for many years to come.
This medium-term management plan sets ¥41 billion in net sales and ¥4.2 billion in
operating income as consolidated targets for the year ending March 2016.
To achieve these targets, the Company’s highest priorities are to make progress on
passing along higher costs to secure adequate profit margins and to reduce costs, as theCompany responds to the higher cost of sales driven primarily by the yen’s depreciation,higher raw materials prices, and rising energy costs in Japan. At the same time, theCompany will strive to expand business through the following business strategies.
(Collagen Material Business)
In the gelatin business, Nitta Gelatin plans to strengthen competitiveness by achieving
global cost competitiveness through energy savings, increased production efficiency anda strengthened supply chain of raw materials. To expand production and sales, theCompany intends to ramp up production and secure new supply bases in North America
and India. Moreover, Nitta Gelatin will develop new applications, develop new products
and open up new markets. In the peptide business, we will open up new markets bycommercializing our research on the functional properties of collagen peptides. We will10

expand our business globally by expanding production and sales in China, along withincreasing sales in the Japanese market and creating new markets in North America
following the start of production in the U.S. In the casing business, we intend toincrease business scale by expanding production and sales through increasing
productivity at our manufacturing facilities in North America, and by upgrading our
production and sales framework in China. In the life science business, Nitta Gelatin willcommercialize high-quality, safe medical-use materials and popularize their applicationin the field of regenerative medicine, as it works to build future business.
(Formula Solution Business)
In the food material business, we will expand sales by strengthening the functions of ourapplication laboratories in Japan and various regions, and also expand sales to provide
food solutions globally. Furthermore, we will open up new markets in Vietnam. In theadhesives business, we will globally develop the business of sealants (high-performancegaskets), a product we have developed, as we nurture sealants into a viable business. At
the same time, Nitta Gelatin will strengthen the cost competitiveness of hot-meltadhesives. By so doing, we will transform the adhesives business into a high-profit
business.
* Details of our 100th Year Vision and medium-term management plan” are given in the press
release entitled “Nitta Gelatin Announces Medium-term Management Plan” issued on May 10,
2013.

11

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

Fiscal 2013
(As of March 31, 2013)

Fiscal 2014
(As of March 31, 2014)

2,278,659
5,839,913
4,404,789
918,045
1,508,837
134,495
251,267(16,176)
15,319,831

2,426,006
8,164,776
4,732,050
1,089,542
1,820,812
158,974
306,558(13,339)
18,685,381

7,204,905(4,412,697)
2,792,208
8,554,619(7,210,943)
1,343,676
761,832
786,743(348,502)
438,240
777,786
1,279,099(1,105,331)
173,767
6,287,512

7,564,325(4,749,184)
2,815,141
9,841,487(7,702,186)
2,139,301
768,167
1,136,742(476,051)
660,6902,260,999
1,316,976(1,156,989)
159,9878,804,286

48,696
48,69650,79550,7952,768,381
13,026524,310230,368(1,809)3,534,277
9,870,486
25,190,318

3,075,772
8,997
399,428
367,102(2,111)
3,849,189
12,704,270
31,389,652

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Deferred tax assets
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
Land
Lease assets
Accumulated depreciation
Lease assets, net
Construction in process
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets

12(Thousands of yen)

Fiscal 2013
(As of March 31, 2013)

Fiscal 2014
(As of March 31, 2014)

3,736,664
1,145,432
2,068,482
200,000
154,276
1,586,416
81,273
220,847443,685
9,637,079

4,255,505
1,121,491
1,932,912－
215,598
1,747,879
147,730
177,916
481,346
10,080,381

3,142,014
319,983
3,760
2,276,795－
35,42250,6005,828,575
15,465,655

4,415,868
495,768
4,501－
2,524,417
37,07250,6007,528,227
17,608,608

1,577,121
1,398,633
8,194,375(68)
11,170,062

3,144,929
2,966,442
8,623,463(68)
14,734,766

499,868

622,837

27,858(667,634)－(5,110)(187,061)(1,528,458)(1,452,870)－(1,592,778)(1,097,792)

147,379
9,724,663
25,190,318

144,069
13,781,043
31,389,652

Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of long-term loans payable
Current portion of bonds
Lease obligations
Accounts payable-other
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Noncurrent liabilities
Long-term loans payable
Lease obligations
Deferred tax liabilities
Provision for retirement benefits
Net defined benefit liability
Provision for directors' retirement benefits
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 on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Pension liability adjustment of foreignsubsidiaries
Total accumulated other comprehensive
incomeMinority interests
Total net assets
Total liabilities and net assets

13

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive
IncomeConsolidated Statements of Income(Thousands of yen)

Fiscal 2013
(From April 1, 2012
to March 31, 2013)
28,772,135
22,100,462

Fiscal 2014
(From April 1, 2013
to March 31, 2014)
32,814,056
26,329,988

Gross profit on sales

6,671,672

6,484,068

Selling, general and administrative expenses

5,075,794

5,528,497

Operating income

1,595,878

955,571

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

786
19,13729,960262,677
179,871
67,181

4,790
19,64935,144
97,018
166,41245,299Total non-operating income

559,616

368,315

147,302－15,305
13,976

133,865
23,38537,627
13,761

176,584

208,640

1,978,910

1,115,245

11,624－89,079Net sales
Cost of sales

Non-operating expenses
Interest expenses
Public offering expenses
Commissions paid
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of noncurrent assets
Guarantees received－
11,624

Total extraordinary income
Extraordinary losses
Loss on retirement of noncurrent assets
Loss on valuation of investment securities
Loss on sales of golf club memberships
Loss on change in equity
Total extraordinary losses
Income before income taxes and minority interests
Income taxes
Income taxes-deferred
Total income taxes
Income before minority interests
Minority interests in income (loss)
Net income

58,855
12,111
4,060－
75,027
1,915,508
402,377
1,104
403,4811,512,026(13,217)
1,525,243

14

89,07929,985－－104,278
134,263
1,070,062
350,892
67,504
418,397
651,665(13,824)
665,490

Consolidated Statements of Comprehensive Income(Thousands of yen)

Income before minority interests
Other comprehensive income
Valuation difference on other available-for-salesecurities
Deferred gains (losses) on hedges
Foreign currency translation adjustments
Pension liability adjustment of foreignsubsidiaries
Share of other comprehensive income ofassociates accounted for using equity method
Total other comprehensive income
Total comprehensive income
Comprehensive income attributable to:
Owners of the parent
Minority interests

15

Fiscal 2013
(From April 1, 2012
to March 31, 2013)
1,512,026

Fiscal 2014
(From April 1, 2013
to March 31, 2014)
651,665

83,388123,050

17,235(30,416)

600,430

388,414(395,117)(11,620)

95,824

105,920

401,761
1,913,787

575,348
1,227,013

1,918,535(4,747)1,224,443
2,569

(3) Consolidated Statements of Changes in Net Assets
Fiscal 2013 (From April 1, 2012 to March 31, 2013)(Thousands of yen)
Shareholders’ equity
Capital stock
Balance at the beginning of fiscal
year
Cumulative effect of changes inaccounting policies
Balance at the beginning of year
after reflecting changes inaccounting policies

Capital surplus

Retained earnings

1,398,633

6,889,910

1,577,121

Total shareholders’equityTreasury stock(68)

9,865,597－

1,577,121

1,398,633

6,889,910(68)

9,865,597

Changes during fiscal year－

Issuance of new shares
Dividends from surplus(220,778)(220,778)

Net income

1,525,243

1,525,243

Net changes of items other thanshareholders’ equity－

Total changes during fiscal year－－

1,304,464－

1,304,464

Balance at the end of fiscal year

1,577,121

1,398,633

8,194,375(68)

11,170,062

Other accumulated comprehensive income
Valuationdifferenceonavailable-for-sale
securities

Balance at the beginning of fiscal year
Cumulative effect of changes inaccounting policies
Balance at the beginning of year afterreflecting changes in accounting
policies

416,438

416,438

Deferred
gains orlosses onhedges

6,173

6,173

Foreigncurrencytranslation
adjustment

Remeasurements ofdefinedbenefit plans

Pensionliability
adjustmentof foreignsubsidiaries

Total otheraccumulatedcomprehensi
ve income(1,350,928)－(903,985)(1,832,302)(153,767)(153,767)(1,057,753)(1,986,070)(1,350,928)－

Minority
interests

Total net
assets

74,881

8,108,176(153,767)

74,881

7,954,408

Changes during fiscal year
Issuance of new shares－－

Dividends from surplus－(220,778)

Net income－

1,525,243

Net changes of items other thanshareholders’ equity

83,43021,685683,294－(395,117)

393,291

72,497465,789

Total changes during fiscal year

83,43021,685683,294－(395,117)

393,291

72,4971,770,254

Balance at the end of fiscal year

499,868

27,858(667,634)－(1,452,870)(1,592,778)

147,379

9,724,663

16

Fiscal 2014 (From April 1, 2013 to March 31, 2014)(Thousands of yen)
Shareholders’ equity
Capital stock
Balance at the beginning of fiscal
year
Cumulative effect of changes inaccounting policies
Balance at the beginning of year
after reflecting changes inaccounting policies

Capital surplus

1,577,121

1,398,633

Retained earnings

Total shareholders’equityTreasury stock

8,194,375(68)

11,170,062－

1,577,121

1,398,633

1,567,808

1,567,808

8,194,375(68)

11,170,062

Changes during fiscal year
Issuance of new shares
Dividends from surplus

3,135,616(236,402)(236,402)

665,490

665,490

Net income
Net changes of items other thanshareholders’ equity－

Total changes during fiscal year

1,567,808

1,567,808

429,087－3,564,704

Balance at the end of fiscal year

3,144,929

2,966,442

8,623,463(68)

14,734,766

Other accumulated comprehensive income
Valuationdifferenceonavailable-for-sale
securities

Balance at the beginning of fiscal year
Cumulative effect of changes inaccounting policies
Balance at the beginning of year afterreflecting changes in accounting
policies

499,868

Deferred
gains orlosses onhedges27,858Foreigncurrencytranslation
adjustment(667,634)

Remeasurements ofdefinedbenefit plans

Pensionliability
adjustmentof foreignsubsidiaries

Total otheraccumulatedcomprehensi
ve income－ (1,452,870) (1,592,778)

Minority
interests

147,379

Total net
assets9,724,663－

499,868

27,858(667,634)－ (1,452,870) (1,592,778)

147,379

9,724,663

Changes during fiscal year
Issuance of new shares－

3,135,616

Dividends from surplus－(236,402)

Net income－

665,490

Net changes of items other thanshareholders’ equity

122,968(32,968)

480,573 (1,528,458)

1,452,870

494,985(3,310)491,675

Total changes during fiscal year

122,968(32,968)

480,573 (1,528,458)

1,452,870

494,985(3,310)4,056,379

Balance at the end of fiscal year

622,837(5,110)(187,061) (1,528,458)－ (1,097,792)

144,069

13,781,043

17

(4) Consolidated Statements of Cash Flows
Fiscal 2013
(From April 1, 2012
to March 31, 2013)
Cash flows from operating activities
Income before income taxes and minority interests
Depreciation and amortization
Decrease in provision for retirement benefits
Increase in provision for directors' retirement benefits(Decrease) increase in provision for bonuses
Increase (decrease) in allowance for doubtful
accounts
Increase (decrease) in net defined benefit liability
Interest and dividends income
Interest expenses
Foreign exchange (gains) losses
Equity in earnings of affiliates
Gain on sales of property, plant and equipment
Loss on retirement of noncurrent assets
Loss on valuation of investment securities
Loss (gain) on change in equity
Loss on sales of golf club memberships
Decrease (increase) in notes and accounts
receivable-trade
Increase in inventories
Increase (decrease) in notes and accounts
payable-trade(Decrease) increase in accrued consumption taxes
Other, net
SubtotalInterest and dividends income received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Purchase of stocks of affiliates
Proceeds from cancellation of insurance funds
Purchase of insurance funds
Other, net
Net cash used in investing activities

18(Thousands of yen)
Fiscal 2014
(From April 1, 2013
to March 31, 2014)

1,915,508
825,227(81,106)
1,650(21,740)

1,070,062
914,014

1,369(2,979)－(19,924)
147,302(71,623)(262,677)(11,624)
58,855
12,111－
4,060(27,814)(24,440)
133,865(35,170)(97,018)－
29,985－104,278－

897,844(2,147,017)(650,199)(624,983)

40,608324,513(66,858)
13,3892,732,173
153,026(148,862)(686,124)(52,417)88,867(391,490)
134,220(134,451)(301,162)

2,050,213(692,883)(20,000)
20,000(1,193,457)
14,324(40,388)(38,279)(302,278)
29,610(4,992)(21,830)(1,557,292)(20,000)
20,000(2,949,907)－(12,271)(6,576)(142,136)
15,599(4,993)(5,018)(3,105,304)－
1,650(46,885)

Cash flows from financing activities
Net increase (decrease) in short-term loans
payableProceeds from long-term loans payable
Repayment of long-term loans payable
Redemption of bonds
Proceeds from issuance of common stock
Proceeds from stock issuance to minority
shareholders
Proceeds from sale-and-leaseback transactions
Repayments of lease obligations
Cash dividends paid
Cash dividends paid to minority shareholders
Net cash (used in) provided by financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of the fiscal
year
Cash and cash equivalents at end of the fiscal year

19

Fiscal 2013
(From April 1, 2012
to March 31, 2013)(Thousands of yen)
Fiscal 2014
(From April 1, 2013
to March 31, 2014)

84,107(91,377)

2,124,830(2,103,447)(330,000)－

3,222,449(2,165,372)(200,000)
3,135,616

85,418－132,632(140,920)(220,778)(8,173)(376,330)

432,475(216,341)(236,402)(5,880)3,875,166

63,76370,368180,354

147,346

2,078,305

2,258,659

2,258,659

2,406,006

(5) Notes to Consolidated Financial Statements(Note Concerning Going Concern Assumption)
None.
(Changes in Accounting Policies)(1) Application of International Accounting Standards (IAS) 19 Employee Benefits
Certain overseas affiliate companies started applying IAS 19 Employee Benefits (June16, 2011) from the three months ended June 30, 2013. This change in accounting policy
was also applied retroactively to restate results for the fiscal year ended March 31, 2013
in the Consolidated Financial Statements.
As a result, net income for the year ended March 31, 2013 decreased ¥40,635
thousand after restatement. Moreover, net assets as of April 1, 2012 were restated¥153,767 thousand lower to mainly reflect the accumulative impact of this accounting
policy change.
(2) Application of Accounting Standard for Retirement Benefits, etc.
The Company has applied the Accounting Standard for Retirement Benefits(Accounting Standards Board of Japan (ASBJ) Statement No. 26, May 17, 2012; the“Retirement Benefit Accounting Standard”) and Guidance on Accounting Standard for
Retirement Benefits (ASBJ Guidance No. 25, May 17, 2012; the “Retirement Benefit
Accounting Guidance”) from the fiscal year ended March 31, 2014 (excluding, however,the stipulations of the body text of Article 35 of the Retirement Benefit AccountingStandard and the body text of Article 67 of the Retirement Benefit Accounting
Guidance). Under this accounting standard, the Company has adopted the method ofrecording unrecognized actuarial gains and losses and unrecognized prior service costs
after tax as a net defined benefit liability. The Company has also recorded the amountsof retirement benefit obligations minus pension assets as a net defined benefit liability.
In accordance with the transitional treatment stipulated by Article 37 of the
Retirement Benefit Accounting Standard, as of March 31, 2014, the amounts of the
impacts resulting from the application of Retirement Benefit Accounting Standard, etc.,
were added to, or deducted from, remeasurements of defined benefit plans inaccumulated other comprehensive income.
As a result, the Company recorded a net defined benefit liability of ¥2,524,417

20thousand as of March 31, 2014, and accumulated other comprehensive income was
reduced by ¥75,663 thousand, as of the same date.
Following the application of the Retirement Benefit Accounting Standard, etc., theCompany has included pension liability adjustment of foreign subsidiaries inre-measurements of defined benefit plans on the consolidated balance sheets and theconsolidated statements of changes in net assets from March 31, 2014. Previously, theCompany had shown pension liability adjustment of foreign subsidiaries as a separate
account on the consolidated balance sheets and the consolidated statements of changes
in net assets.
(Changes in Presentation Basis)(Consolidated Statements of Income)From the fiscal year ended March 31, 2014, the Company has shown commissions paid
separately because it now represents more than 10% of non-operating expenses.
Previously, commissions paid were included in other under non-operating expenses. The
consolidated financial statements for the fiscal year ended March 31, 2013 have been
restated to reflect this change in presentation basis.
As a result, the Company has restated the ¥29,281 thousand shown as other under
non-operating expenses on the consolidated statement of income for the fiscal year
ended March 31, 2013, as commissions paid of ¥15,305 thousand and other of ¥13,976
thousand.
(Additional Information)
Restatement of amounts of deferred tax assets and deferred tax liabilities due to changes
in the corporate income tax rate, etc.
Following the promulgation of the “Act for Partial Revision of the Income Tax Act”
(Act No.10, 2014) on March 31, 2014, the special corporate tax for reconstruction will
no longer be levied from fiscal years beginning on or after April 1, 2014. In line withthis change, the statutory income tax rate used to calculate deferred tax assets anddeferred tax liabilities in the fiscal year ended March 31, 2014 for temporary differences
expected to reverse in the fiscal year beginning on April 1, 2014, has been reduced
mainly to 35.6% from 38.0% in the fiscal year ended March 31, 2014.
As a result, the amount of deferred tax assets (less the amount of deferred tax
liabilities) was reduced by ¥7,626 thousand, while income taxes-deferred recorded in21the fiscal year ended March 31, 2014 increased by ¥7,626 thousand.
(Segment Information)a. Segment information
1 Overview of reporting segments
The Company’s reporting segments are the compositional units of the Company forwhich separate financial information is available. They are periodically examined by the
Board of Directors for the purpose of deciding on allocation of management resourcesand evaluating business results.
The Company formulates a comprehensive worldwide strategy for the products andservices it handles and conducts business activities based on operations that are divided
along product and service lines.
As a result, the Company is composed of product and service segments based on
business activity, with two reporting segments: “Collagen Material” and “Formula
Solution.”
In Collagen Material Business, the Company manufactures gelatin, collagen
peptide, collagen casings and other products.
In Formula Solution Business, the Company manufactures various food materials,
adhesives and other products.
2 Calculation methods for net sales, income and loss, assets and other items byreporting segment
The accounting methods used for the reported business segments are the same as theaccounting methods the Company applies for consolidated financial reporting purposes.
Segment income for reporting segments represents operating income.
Intersegment sales and transactions are based on prevailing market prices.
3 Matters concerning changes in reporting segments
Certain overseas affiliate companies started applying IAS 19 Employee Benefits (June16, 2011) from the three months ended June 30, 2013. This change in accounting policy
was also applied retroactively to restate results for the fiscal year ended March 31, 2013
in the Consolidated Financial Statements.
As a result, segment income for the Collagen Material Business for the fiscal year
ended March 31, 2013 decreased by ¥23,114 thousand after restatement.

22

4 Information on net sales, income and loss, assets and other items by reporting
segment
Fiscal year ended March 31, 2013 (From April 1, 2012 to March 31, 2013)
Reporting segment

Net sales
Sales to third parties
Inter-segment sales
and transfers
Total
Segment income
Segment assets
Other items
Depreciation andamortization
Increase in property,
plant and equipment
and intangible assets(Thousands of yen)Amounts intheAdjustments*1 consolidated
financialstatements*2

Collagenmaterial
business

Formulasolutionbusiness

Total

18,674,637

10,097,497

28,772,135－

28,772,135

1,304,577－

1,304,577(1,304,577)－

19,979,215
1,794,094

10,097,497
1,151,633

30,076,712
2,945,727(1,304,577)(1,349,849)

28,772,135
1,595,878

18,370,545

4,528,873

22,899,418

2,290,899

25,190,318

721,20372,444

793,648

31,579825,227

1,229,202

73,2381,302,440

124,070

1,426,511*Notes: 1. Adjustments are as follows:(1) Adjustment for segment income of -¥1,349,849 thousand comprises elimination ofintersegment transactions of ¥2,952 thousand and unallocated expenses of-¥1,352,802 thousand. Unallocated expenses are mainly general and administrative
expenses.
(2) Adjustment for segment assets of ¥2,290,899 thousand comprises elimination ofintersegment transactions of -¥458,447 thousand and unallocated assets of¥2,749,346 thousand. Major components of the unallocated assets are cash anddeposits, property, plant and equipment, and investment securities.
2. Segment income is adjusted against the operating income recorded in the
consolidated income statement.
3. Segment liabilities have not been reported, as they are serviced periodically inconsolidation by the Company’s highest decision making authority.

23

Fiscal year ended March 31, 2014 (From April 1, 2013 to March 31, 2014)
Reporting segment

Net sales
Sales to third parties
Inter-segment sales
and transfers
Total
Segment income
Segment assets
Other items
Depreciation andamortization
Increase in property,
plant and equipment
and intangible assets(Thousands of yen)Amounts intheAdjustments*1 consolidated
financialstatements*2

Collagenmaterial
business

Formulasolutionbusiness

Total

22,436,889

10,377,166

32,814,056－

32,814,056

1,487,018－

1,487,018(1,487,018)－

23,923,908
1,420,131
23,327,011

10,377,166
920,247
5,791,521

34,301,074
2,340,378
29,118,533(1,487,018)(1,384,807)
2,271,118

32,814,056
955,571
31,389,652

808,491

70,273878,765

35,249914,0142,845,204

229,847

3,075,051

27,364

3,102,415*Notes: 1. Adjustments are as follows:(1) Adjustment for segment income of -¥1,384,807 thousand comprises elimination ofintersegment transactions of ¥3,131 thousand and unallocated expenses of-¥1,387,939 thousand. Unallocated expenses are mainly general and administrative
expenses.
(2) Adjustment for segment assets of ¥2,271,118 thousand comprises elimination ofintersegment transactions of -¥567,877 thousand and unallocated assets of¥2,838,996 thousand. Major components of the unallocated assets are cash anddeposits, property, plant and equipment, and investment securities.
2. Segment income is adjusted against the operating income recorded in the
consolidated income statement.
3. Segment liabilities have not been reported, as they are serviced periodically inconsolidation by the Company’s highest decision making authority.

24

b. Related information
Fiscal year ended March 31, 2013 (from April 1, 2012 to March 31, 2013)
1 Information by products and services
This information is omitted because it is the same as is recorded for segment
information.
2 Information by countries and regions(1) Net sales(Thousands of yen)
Japan

Asia

North America

19,098,061

1,239,300

7,727,453

Other

Total

707,319

28,772,135

Note: Sales are classified into countries or regions based on customers’ locations.

(2) Property, plant and equipment(Thousands of yen)
Japan

Asia

2,955,248

North America
91,312

Total

3,240,951

6,287,512

3 Information by main customer
The Company has omitted disclosure because no sales to any external customer exceed
10% of the total net sales on the consolidated statements of income.
Fiscal year ended March 31, 2014 (from April 1, 2013 to March 31, 2014)
1 Information by products and services
This information is omitted because it is the same as is recorded for segment
information.
2 Information by countries and regions(1) Net sales(Thousands of yen)
Japan

Asia

North America

19,684,052

2,022,724

10,408,071

Other699,208

Total
32,814,056

Note: Sales are classified into countries or regions based on customers’ locations.

(2) Property, plant and equipment(Thousands of yen)Japan2,990,115

Asia

North America

255,186

5,558,983

25

Total
8,804,286

3 Information by main customer
The Company has omitted disclosure because no sales to any external customer exceed
10% of the total net sales on the consolidated statements of income.

c. Information on impairment loss on noncurrent assets by reporting segments
No items to reportd. Information on amortization of goodwill and unamortized amounts byreporting segments
No items to report
e. Information on gain on negative goodwill by reporting segment
No items to report26

(Per Share Information)
Fiscal 2013
(From April 1, 2012
to March 31, 2013)

Fiscal 2014
(From April 1, 2013
to March 31, 2014)

Net assets per share¥607.31¥742.20

Net income per share

96.72

37.90

Notes: 1. Diluted net income per share is not disclosed due to the absence of latent shareswith dilution effect.
2. Basis for calculating per share data is shown below.
Fiscal 2013
(From April 1, 2012
to March 31, 2013)

Fiscal 2014
(From April 1, 2013
to March 31, 2014)

1,525,243

665,490－－

1,525,243

665,490

15,769,912

17,556,927

Net income (Thousands of yen)Amounts not attributable to common shareholders(Thousands of yen)
Net income related to common shares(Thousands of yen)
Average number of common shares during the period(shares)

Note: Certain overseas affiliate companies started applying IAS 19 Employee Benefits (June16, 2011) from the three months ended June 30, 2013. This change in accounting
policy was also applied retroactively to restate results for the fiscal year ended March
31, 2013 in the Consolidated Financial Statements.

(Subsequent Events)(Introduction of Stock Compensation-type Stock Options)
Nitta Gelatin has announced that at a Board of Directors’ meeting held on April 25,
2014, the Company passed a resolution to submit a proposal regarding the introductionof stock compensation-type stock options for the Company’s directors (excluding
outside directors) at the Ordinary General Meeting of Shareholders scheduled for June
26, 2014.
Details are as follows:
Stock-compensation type stock options based on Article 361 of the Companies Act
Date of resolution

June 26, 2014

Eligible recipients

The Company’s directors (excluding outside directors)(Note 1)

Class and number of shares underlying
the stock acquisition rights

200,000 shares of the Company’s common stock27

Total number of stock acquisitionrightsThe maximum number of stock acquisition rights to be
allotted on any day within one year of the day of theOrdinary General Meeting of Shareholders for eachfiscal year shall be 2,000 (100 shares of common stock
per stock acquisition right)

Amount to be paid in upon exercise ofstock acquisition rights

One (1) yen per share

Exercise period of stock acquisitionrightsThe Company’s Board of Directors shall determine theexercise period within a period not to exceed 40 years
from the day after the allotment date for the stockacquisition rights.

Limits on acquisition of stockacquisition rights via assignment

Approval of the Board of Directors of the Company
shall be required for the acquisition of stockacquisition rights via assignment.

Conditions for exercising stockacquisition rights

Conditions, including those enabling the recipients ofstock acquisition rights allotments who have lost theirposition as a Director of the Company to exercise theirstock acquisition rights from the day after the day theylose their position, shall be determined by theCompany’s Board of Directors.

Notes: 1. After the Ordinary General Meeting of Shareholders is adjourned, the Company
plans to pass a Board of Directors resolution to allot stock compensation-type stock
options based on the same details as the above to its executive officers.
2. For details, please see the press release titled “Notice Regarding Introduction of
Stock Compensation-type Stock Options” issued on April 25, 2014.

28

4. Other
Change of Directors and Audit & Supervisory Board Members
1. Change of Representative Directors
No items to report.
2. Change of Other Directors and Audit & Supervisory Board Members
New candidates for director
Director

Toru Tamaoka

Currently Executive Officer,
General Manager of Adhesives Div.

Director

Raymond Merz

Currently Executive Officer,
General Manager of Gelatin Div.

Director

Hisayuki Suekawa

Currently Senior Adviser,
Shiseido Company, Limited

Note: Mr. Hisayuki Suekawa is a candidate for outside director.

Directors scheduled to retire
Director

Takeo Yamaki

Director

Tatsuro Otsuka

New candidate for audit & supervisory board member
Outside Audit &Supervisory Board Member

Tamon Tsuda

Currently a certified public
accountant

Note: Mr. Tamon Tsuda is a candidate for outside audit & supervisory board member.

Audit & supervisory board member scheduled to retire
Outside Audit &Yoshihiro Sakatani
Supervisory Board Member
3. Scheduled Date of Appointment
June 26, 2014
The appointment of the directors and the audit & supervisory board member will be
submitted for the approval of the 75th Ordinary General Shareholders’ Meeting to be held on
June 26, 2014. This change of directors and audit & supervisory board members wasannounced on April 25, 2014.

29