May 10, 2016

Consolidated Financial Results
for the Fiscal Year Ended March 31, 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:
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 28, 2016
Scheduled date to file Securities Report:
June 28, 2016
Scheduled date to commence dividend payments:
June 29, 2016
Supplementary explanatory materials prepared:
Yes
Explanatory meeting: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, 2016
(from April 1, 2015 to March 31, 2016)(1) Consolidated operating results(Percentages indicate year-on-year changes.)
Net sales

Operating income

Ordinary income

Net income
attributable to ownersof the parent

Millions of yen

Millions of yen

Fiscal year ended
March 31, 2016

Millions of yen

36,885

15.6

1,273

224.2

979

1.2

477

(21.7)March 31, 2015

31,914(2.7)

392(58.9)

967(13.2)

610(8.3)

Ordinary income/ Total assets%

Millions of yen

%

%

%

Note: Comprehensive income
For the year ended March 31, 2016: ¥(136 million) (-%)
For the year ended March 31, 2015: ¥1,530 million (24.8%)

Net income
per share

Diluted net
income per
share

Return on
equity (ROE)

Yen

Yen

%

Fiscal year ended
March 31, 2016
March 31, 2015

Operatingmargin

%

%

3.2
2.7
26.00
33.20
4.2
3.0
Reference : Equity in earnings of affiliates
For the year ended March 31, 2016: ¥29 million
For the year ended March 31, 2015: ¥112 million
Note: Diluted net income per share is not disclosed due to the absence of latent shares with dilution effect.

3.5
1.2

(2) Consolidated financial position
Total assets
As ofMarch 31, 2016
March 31, 2015

Net assets

Millions of yen

Millions of yen

37,59733,932

16,876
15,373

Reference: Equity
As of March 31, 2016:
As of March 31, 2015:¥14,972 million¥15,271 million

Equity ratio

Net assets per share
%

39.8
45.0

Yen

814.90831.15

(3) Consolidated cash flows
Net cash provided byoperating activities

Fiscal year ended
March 31, 2016
March 31, 2015

Net cash provided by(used in) financing
activities

Net cash used ininvesting activities

Cash andcash equivalents
at end of year

Millions of yen

Millions of yen

Millions of yen

Millions of yen

2,385
2,074

(1,860)(2,505)

(473)
544

2,536
2,602

2. Cash dividends
Cash dividends per shareFirst
quarter

Secondquarter

Third
quarter

Fiscalyear-end

AnnualTotal amountof dividends(annual)

Yen

Yen

Yen

Yen

Yen

Millions of yen

-

6.00

-

6.00

12.00

220

36.1

1.5

-

6.00

-

6.00

12.00

220

46.2

1.5

-

6.00

-

6.00

12.00

-

27.6

-

Fiscal year ended
March 31, 2015
Fiscal year ended
March 31, 2016
Fiscal year ending
March 31, 2017
(Forecasts)

Payout ratio(consolidated)

Dividends on
net assets(consolidated)%%

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

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

Net income
attributable toownersof the parent

Ordinary
incomeNet income
per share

Millions ofyen%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

Notes:(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in achange in the scope of consolidation): Yes
New:
1 company, Nitta Gelatin India Ltd.
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 “4. Consolidated Financial Statements” on page 18 of the Attachment
to this report.
(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, 2016
18,373,974 shares
As of March 31, 2015
18,373,974 sharesb. Number of shares of treasury stock at the end of the period
As of March 31, 2016
162 shares
As of March 31, 2015
162 sharesc. Average number of shares
For the year ended March 31, 2016
For the year ended March 31, 2015

18,373,812 shares
18,373,812 shares

(Reference) Summary of non-consolidated operating results
1. Non-consolidated financial results for the fiscal year ended March 31, 2016
(from April 1, 2015 to March 31, 2016)(1) Non-consolidated operating results(Percentages indicate year-on-year changes.)
Net sales
Fiscal year ended
March 31, 2016
March 31, 2015

Operating income%

Millions of yen

22,746
21,8724.0(1.3)

Net income
per share
Fiscal year ended
March 31, 2016
March 31, 2015%

Millions of yen

789
377

109.2
(44.9)

Ordinary income%

Millions of yen

837
1,213

Net income%

Millions of yen

(269)
816

(31.0)
19.0

14.5

Diluted net income
per share

Yen

Yen

(14.68)44.44
Note: Diluted net income per share is not disclosed due to the absence of latent shares with dilution effect.

(2) Non-consolidated financial position
As ofMarch 31, 2016
March 31, 2015

Total assets

Net assets

Millions of yen

Millions of yen

26,331
26,664

13,654
14,280Equity ratio

Net assets per share
%

51.9
53.6

Yen

743.17777.21

Reference: Equity
As of March 31, 2016: ¥13,654 million
As of March 31, 2015: ¥14,280 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
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” under“1. Analysis of Operating Results and Financial Position” on page 2 of the Attachment to this report.

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 ･････････････････････････････････････････ 7(2) Target Management Indicators ･･･････････････････････････････････････････････････ 7(3) Medium- to Long-term Management Strategies and Issues Facing the Company ････････････ 8
3. Basic Approach to Selection of Accounting Standard ･･･････････････････････････････････ 9
4. Consolidated Financial Statements(1) Consolidated Balance Sheets ････････････････････････････････････････････････････ 10(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income ･･･････････････････････････････････････････････ 12
Consolidated Statements of Comprehensive Income ･･････････････････････････････････ 13(3) Consolidated Statements of Changes in Net Assets ･･･････････････････････････････････ 14(4) Consolidated Statements of Cash Flows ･･･････････････････････････････････････････ 16(5) Notes to Consolidated Financial Statements ････････････････････････････････････････ 18(Note Concerning Going Concern Assumption) ････････････････････････････････････ 18(Changes in Accounting Policies) ･･･････････････････････････････････････････････ 18(Accounting Standard and Guidance Yet to Be Applied) ･････････････････････････････ 19(Additional Information) ･･････････････････････････････････････････････････････ 19(Segment Information) ･･･････････････････････････････････････････････････････ 21(Per Share Information) ･･･････････････････････････････････････････････････････ 26(Subsequent Events) ･････････････････････････････････････････････････････････ 26
5. Other(1) Change of Directors and Audit & Supervisory Board Members ･････････････････････････ 28(2) Other ･･････････････････････････････････････････････････････････････････････ 28

11. Analysis of Operating Results and Financial Position(1) Analysis of Business Results1) Operating results for the fiscal year ended March 31, 2016
In the fiscal year ended March 31, 2016, the global economic situation remained
uncertain, clouded by low oil prices, turmoil in the financial markets, and decelerationof the Chinese economy among other factors. On the other hand, regions including theU.S., Europe and Southeast Asia continued to record moderate growth. Meanwhile, theJapanese economy moved in a gradual trend toward recovery, spurred primarily by anincrease in corporate earnings and inbound tourism demand. However, this trend inJapan could conceivably swing downward if affected by such factors as a rapid
appreciation of the yen and dramatic declines in the stock market since the beginning of
2016, as well as the earthquakes in Kumamoto.
Amid these circumstances, the Nitta Gelatin Group worked as one to bring about arecovery in earnings by adopting a new management structure in April 2015 andfocusing efforts on marketing gelatin and collagen peptide mainly in Japan, North
America and Southeast Asia. In addition, as a base for procuring raw material for gelatinand supplying Halal-certified products, equity-method affiliate Nitta Gelatin India Ltd.
and its two local affiliates in India were consolidated as subsidiaries of Nitta Gelatin in
April 2015.
As a result, in the fiscal year ended March 2016, net sales increased 15.6% year on
year to ¥36,885 million. Operating income increased 224.2% to ¥1,273 million, but
ordinary income rose only 1.2% to ¥979 million, mainly due to foreign exchange losses.
As a consequence of the ¥727 million in extraordinary income and ¥666 million in
extraordinary loss the Company reported in connection with consolidating threecompanies in India as subsidiaries and converting a subsidiary in China into an
equity-method affiliate, among other factors, net income attributable to owners of theparent decreased 21.7% year on year to ¥477 million.
2) Segment business performance(Collagen Material Business)
In the gelatin field, demand for edible gelatin in Japan, for use mainly in confectionary
and delicatessen items, held steady. Demand in gelatin for capsules was also robust,underpinned by strong demand for nutritional food supplements from inbound travelers
and deregulation spurring the launch of food products labeled with nutrient function

2

claims. As a result, gelatin sales increased in Japan. In North America, the nutritional
supplement market is still in the process of recovering from the negative press coverageof health food since 2014, in contrast to buoyant demand for edible gelatin. However,
the Company’s overall sales of gelatin increased substantially owing to a ¥3,489 million
contribution to sales from the consolidation of Nitta Gelatin India Ltd. and its two
affiliates as subsidiaries.
Upon re-acknowledgement of its virtuous properties, including for regulating
bodily functions, collagen peptide sales increased due to strong sales for use as healthfoods, as well as further adoption for use in general food products.
Collagen casing sales fell and profits declined substantially following an
intensification of competition and fall in exports from North America due to theappreciation of the U.S. dollar.
As a result, net sales in the segment rose 20.6% year on year to ¥27,686 million,
along with a 66.3% increase in segment profit (operating income) to ¥1,832 million.
(Formula Solution Business)
The Company saw robust sales of food materials, partly as a result of efforts to cultivate
new customers for their use in desserts and confectionery. However, profits were levelyear on year due to an increase in the price of raw materials.
Adhesives sales for use in packaging were robust, and increased year on year for
use in hygiene products as a result of a customer resuming procurement from Nitta
Gelatin. However, they declined for use in bookbinding due to market contraction.
Profit, on the other hand, increased in line with efforts to reduce costs.
As a result, net sales in the segment rose 2.7% year on year to ¥9,199 million,
along with a 25.5% increase in segment profit (operating income) to ¥812 million.
3) Earnings forecasts for the fiscal year ending March 31, 2017
(Business Forecasts for the Fiscal Year Ending March 31, 2017)
Nitta Gelatin will usher in its 100th founding anniversary in 2018, and has formulated a
new three-year medium-term management plan, started in the fiscal year ended March
31, 2016, in time for that milestone. The target is to attain net sales of ¥41,000 million
and operating income of ¥2,000 million in the final fiscal year of the plan, ending
March 31, 2018.
Nitta Gelatin is positioning the fiscal year ending March 31, 2017 as an important3

year for making progress with attaining the plan’s targets. To this end, the Company will
strive to raise the quality of not only its products but also all business activities fromsales and production to quality assurance and research and development. At the sametime, it will rigorously cut costs, mainly by producing and selling products in optimal
locations, and reducing the cost of raw materials.
In Japan, the Company foresees the continuation of a robust business trend in edible
gelatin and pharmaceutical gelatin and expects deregulation of the functional labeling offoods to breathe new life into its markets. Furthermore, despite the challenges faced by
an appreciating dollar and intensifying competition in North America, the Company isprojecting growing demand in Asia for gelatin, collagen peptide, collagen casing andsealants. Eyeing this demand, the Company will work to expand sales globally, centeredon Asia.
With regard to capital investment, the Company will invest in projects that realize
products and services of high added value in Japan. Overseas, the Company will invest
in projects aimed at increasing production capacity and enhancing productivity, as wellas in response to the environment.
Based on the aforementioned assumptions, the Company’s consolidated business
forecasts for the fiscal year ending March 31, 2017 are as follows:(Millions of yen)
Forecasts

Year on year

Net sales

38,200+3.6%

Operating income

1,500+17.8%

Ordinary income

1,400+42.9%Net profit attributable toowners of the Parent

800+67.5%

4

(2) Analysis of Financial Position
The consolidation of Nitta Gelatin India Ltd. and its two local affiliates in India as
subsidiaries was a major factor behind change in the financial position than at March 31,
2015, the end of the previous fiscal year.
1) Assets, liabilities and net assets(Assets)
Total assets amounted to ¥37,597 million at March 31, 2016, ¥3,665 million higher thanat March 31, 2015. This was mainly attributable to increases in notes and accounts
receivable-trade, inventories including merchandise and finished goods, and property,
plant and equipment, which were partially offset by a decrease in investment securities.
(Liabilities)
Total liabilities stood at ¥20,720 million at March 31, 2016, ¥2,162 million higher thanat March 31, 2015. This was mainly due to increases in notes and accounts
payable-trade, short-term loans payable, long-term loans payable (including the current
portion), and deferred tax liabilities.
(Net assets)
Net assets stood at ¥16,876 million at March 31, 2016, ¥1,503 million higher than at
March 31, 2015. This was mainly attributable to an increase in the balance of
non-controlling interests.
As a result, the equity ratio stood at 39.8% at March 31, 2016 compared with45.0% at March 31, 2015.
2) Cash flows
Cash and cash equivalents (“cash”) as of March 31, 2016 was ¥2,536 million, down ¥65
million from March 31, 2015.
Cash flows for each activity and reasons are as follows.
(Net cash provided by operating activities)
Operating activities provided net cash of ¥2,385 million. The main contributing factors
were income before income taxes and minority interests of ¥1,040 million, depreciation
and amortization of ¥1,562 million, increase in notes and accounts payable-trade of5¥724 million, loss on step acquisitions of ¥620 million, and gain on negative goodwillof ¥502 million.
(Net cash used in investing activities)
Investing activities used net cash of ¥1,860 million. The main uses of cash were ¥1,548
million for the purchase of property, plant and equipment, and ¥222 million for thepurchase of stocks of affiliates.
(Net cash provided by financing activities)
Financing activities used net cash of ¥473 million. The main uses of cash were ¥2,502
million for the repayment of long-term loans payable, and a ¥544 million net decreasein short-term loans payable, partially offset by ¥2,821 million in proceeds fromlong-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, 2012 March 31, 2013 March 31, 2014 March 31, 2015 March 31, 2016

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

34.4

38.0

43.4

45.0

39.8

34.4

80.6

61.3

44.1

35.9

12.4

3.4

(11.8)

4.5

4.4

3.4

13.8

(5.2)

13.6

7.6

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
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.

6

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 andutmost 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.
(2) Target Management Indicators
From the viewpoint of improving both business growth and profitability, management
indicators important to the Nitta Gelatin Group are consolidated net sales andconsolidated operating income. The Group aims to maximize earnings on stablebusiness growth by providing products and services that exceed customers’ expectations,and by continually reducing cost and improving productivity to remain competitive as amanufacturer.
(3) Medium- to Long-term Management Strategies and Issues Facing theCompany
In Japan, industries capturing demand from inbound travelers and fields requiring
functional labeling of foods are spawning business opportunities. Overseas, the U.S.
remains on the course of a gradual economic recovery, while high economic growth and7population increase is expected for the emerging countries of Asia. The Company
understands the importance of executing business strategies in line with these trends in
the Japanese and overseas markets.
Recognizing this, Nitta Gelatin has formulated a new slogan, "New Vision, New
Direction" Guided by its basic strategy of "Pursue Quality," the Company will enhancequality in all aspects of its business operations, including sales, production, quality
assurance, and research and development. Moreover, the Company will implement threestrategic priorities: (1) Develop high value-added products, (2) Ensure optimal
production and optimal sales, and (3) Strengthen global business foundations.
The outlook for the business environment is expected to remain uncertain, affectedby low oil prices and turmoil in the financial markets. However, by achieving thesepriorities, Nitta Gelatin will increase earnings and enhance its corporate value, with theaim of continuously contributing to society.
(Collagen Material Business)
In the gelatin field, Nitta Gelatin plans to strengthen competitiveness by achieving
global cost competitiveness through increased production efficiency and a strengthened
supply chain of raw materials. In addition, the Company will sell the products of its
Group companies in growing markets and optimal regions.
In collagen peptide, Nitta Gelatin will open up highly profitable new markets bylaunching products with enhanced functional properties, while expanding businessglobally in Asian and North America.
In collagen casings, the Group intends to enhance its sales and earnings byincreasing productivity at its manufacturing facilities in North America and upgrading
its production and sales framework in China.
In the life science field, based on research and development activities focused onmaterials for use in research and medicine, Nitta Gelatin will popularize the applicationof these materials in the field of regenerative medicine as it works to nurture futurebusiness.
(Formula Solution Business)
In the food material business, Nitta Gelatin will expand business by leveraging its
application technologies to provide customers with food solutions of new value.
In the adhesives field, Nitta Gelatin will continue to increase production, as it
anticipates demand for their use in hygiene products to rise.

8In high-performance gaskets, the Company will expand sales by cultivating new
applications and developing new products.
3. Basic Approach to Selection of Accounting Standard
The Nitta Gelatin Group plans to prepare its consolidated financial statements based onJapanese accounting standards in the near future. This is in consideration of the need toensure that the consolidated financial statements can be readily compared between
different periods and different companies.
Looking ahead, considering its management policies and various conditions inJapan and abroad, Nitta Gelatin plans to examine the adoption of International Financial
Reporting Standards (IFRS). In doing so, the Company will take into account trends
such as the adoption of IFRS by its peer companies.

94. Consolidated Financial Statements(1) Consolidated Balance Sheets(Millions of yen)

Fiscal 2015
(As of March 31, 2015)
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
Net defined benefit asset
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets

10

Fiscal 2016
(As of March 31, 2016)

2,622
6,726
4,821
1,243
2,156
139
330
(2)
18,038

2,688
7,375
5,262
1,429
2,275
182
447
(2)
19,6579,700(5,285)
4,414
13,028(8,637)
4,390
781
1,195
(544)
651
435
1,339
(1,164)
175
10,848

10,267(5,855)
4,412
15,937(10,936)
5,000
2,542
1,188
(548)
640
957
1,362
(1,191)
171
13,724

69
69

357
357

3,984
5
185
689
109
(0)
4,974
15,89333,932

2,919
136
189
421
191
(0)
3,858
17,94037,597

(Millions of yen)

Fiscal 2015
(As of March 31, 2015)
Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of long-term loans payable
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
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(loss)
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 loss
Non-controlling interests
Total net assets
Total liabilities and net assets

11

Fiscal 2016
(As of March 31, 2016)

3,768
1,705
2,127
232
1,435
206
173
626
10,274

4,252
2,186
2,215
230
1,261
145
213
569
11,076

4,867
475
189
2,661
38
50
8,283
18,558

5,380
469
769
2,938
－
85
9,644
20,720

3,144
2,966
9,312
(0)
15,423

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

1,121

1,024

33
601
(1,908)(152)102
15,37333,932(38)
466(2,160)(707)
1,904
16,876
37,597

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

Fiscal 2015
(From April 1, 2014
to March 31, 2015)
31,91425,944
5,970
5,577
392

Net sales
Cost of sales
Gross profit on sales
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Rent income
Equity in earnings of affiliates
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Commissions paid
Other
Total non-operating expenses
Ordinary income
Extraordinary gains
Gain on sales of noncurrent asset
Gain on negative goodwill
Gain on change in equity
Total extraordinary gains
Extraordinary losses
Loss on retirement of noncurrent assets
Loss on stepped acquisitions
Total extraordinary losses
Income before income taxes and minority interests
Income taxes
Income taxes-deferred
Total income taxes
Net income
Net income (loss) attributable to non-controllinginterests
Net income attributable to owners of the parent

12

Fiscal 2016
(From April 1, 2015
to March 31, 2016)
36,88529,196
7,689
6,416
1,273

0
23
36
112
578
53
805

27
29
44
29
－
69
202

151
－
66
11
230
967

315
151
13
14
495
979

－
－
－
－

67
502
157
727

34
－
34
933
376
(23)
353
580

45
620
666
1,040
425
3
428
612

(29)

134

610

477

Consolidated Statements of Comprehensive Income(Millions of yen)

Fiscal 2015
(From April 1, 2014
to March 31, 2015)
580

Net income
Other comprehensive income (loss)
Valuation difference on other available-for-salesecurities
Deferred gains (losses) on hedges

Fiscal 2016
(From April 1, 2015
to March 31, 2016)
612

498

(96)

18

(68)

Foreign currency translation adjustments

638

(731)

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

(370)

(255)

165

402

950

(748)

1,530

(136)

1,555

(100)

(24)

(35)

Total comprehensive income
Comprehensive income attributable to:
Owners of the parent
Non-controlling interests13(3) Consolidated Statements of Changes in Net Assets
Fiscal 2015 (From April 1, 2014 to March 31, 2015)(Millions 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

3,144

Retained earnings

2,966

Treasury stock

8,623

Total shareholders’equity(0)

14,734

299
3,144

2,966

299

8,922

(0)

15,033

Changes during fiscal year
Dividends from surplus
Net income attributable toowners of the parent
Net changes of items other thanshareholders’ equity

(220)

(220)

610

610

－

Total changes during fiscal year

－

－

389

－

389

Balance at the end of fiscal year

3,144

2,966

9,312

(0)

15,423

Other accumulated comprehensive income
Valuationdifference on
available-for-s
ale 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

622

Deferred gains
or losses onhedges(5)

Foreigncurrencytranslation
adjustment(187)

Total otherRemeasureaccumulated
ments of definedcomprehensive
benefit plansincome(1,528)(1,097)

Noncontrollinginterests

144

－
622

(5)

(187)

(1,528)(1,097)

Total net
assets13,781299

144

14,080Changes during fiscal year
(220)

Dividends from surplus
Net income attributable to owners of
the parent
Net changes of items other thanshareholders’ equity

610
498

38

788

(379)

945

(41)

904

Total changes during fiscal year

498

38

788

(379)

945

(41)

1,293

Balance at the end of fiscal year

1,121

33

601

(1,908)

(152)

102

15,37314

Fiscal 2016 (From April 1, 2015 to March 31, 2016)(Millions of yen)
Shareholders’ equity

Balance at the beginning of fiscal
year

Capital stock

Capital surplus

Retained earnings

3,144

2,966

9,312

Treasury stock

Total shareholders’equity(0)15,423

Changes during the fiscal year
Dividends from surplus
Net income attributable toowners of the parent
Gain (loss) in non-controllinginterests due to increase inconsolidated subsidiaries
Net changes of items other thanshareholders’ equity

(220)

(220)

477

477
－
－

Total changes during fiscal year

－

－

257

－

257

Balance at the end of fiscal year

3,144

2,966

9,569

(0)

15,680

Other accumulated comprehensive income
Valuationdifference on
available-for-salesecurities

Balance at the beginning of fiscal
year

1,121

Deferred gains
or losses onhedges33

Foreigncurrencytranslation
adjustment

601

Remeasurements ofdefined benefit
plans

Total otheraccumulatedcomprehensive
income(1,908)(152)

Noncontrollinginterests

102

Total net
assets15,373

Changes during the fiscal year
(220)

Dividends from surplus
Net income attributable to ownersof the parent
Gain (loss) in non-controllinginterests due to increase inconsolidated subsidiaries
Net changes of items other thanshareholders’ equity

477
1,848

1,848

(96)

(71)

(135)

(252)

(555)

(46)

(602)

Total changes during fiscal year

(96)

(71)

(135)

(252)

(555)

1,801

1,503

Balance at the end of fiscal year

1,024

(38)

466

(2,160)

(707)

1,904

16,87615

(4) Consolidated Statements of Cash Flows
Fiscal 2015
(From April 1, 2014
to March 31, 2015)
Cash flows from operating activities
Income before income taxes and minority interests
Depreciation and amortization
Increase (decrease) in provision for directors'
retirement benefits
Increase (decrease) in provision for bonuses
Decrease in allowance for doubtful accounts
Increase in net defined benefit liability
Interest and dividends income
Interest expenses
Foreign exchange losses (gains)
Equity in earnings of affiliates
Gain on sales of property, plant and equipment
Loss on retirement of noncurrent assets
Loss on change in equity
Gain on negative goodwill
Loss on stepped acquisitions
Decrease (increase) in notes and accounts
receivable-trade
Increase in inventories

Increase (decrease) in notes and accounts
payable-trade
Increase in accrued consumption taxes
Other, net
SubtotalInterest and dividends income received
Interest paid
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Proceeds from the sale of property, plant andequipment
Purchase of property, plant and equipment
Purchase of intangible assets
Proceeds from the sale of investment securities
Purchase of investment securities
Purchase of stocks of affiliates
Purchase of insurance funds
Other, net
Net cash used in investing activities

933

1,040

1,115

1,562

1

(38)

(8)
(13)
9
(24)
151
(267)
(112)
34
-

42
(0)
21
(57)
315
188
(29)
(67)
45
(157)
(502)
620

1,740

(479)

(308)

(109)

(802)

724

117
(125)
2,441
106
(152)
(321)
2,074

36
(103)
3,051
125
(315)
(476)
2,385

(20)
20

(148)
27

-

73

(2,449)(30)(1,548)
(17)
2
(6)
(222)
(2)
(17)
(1,860)

-

-

(6)
-

(2)
(15)
(2,505)

16(Millions of yen)
Fiscal 2016
(From April 1, 2015
to March 31, 2016)

Fiscal 2015
(From April 1, 2014
to March 31, 2015)
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Proceeds from sale-and-leaseback transactions
Repayments of lease obligations
Payments from non-controlling interests
Repayments to non-controlling interests
Cash dividends paid
Cash dividends paid to non-controlling interests
Net cash (used in) provided by financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of the fiscal year
Increase in cash and cash equivalents from newly
consolidated subsidiaries
Decrease in cash and cash equivalents fromexclusion of subsidiary from consolidation
Cash and cash equivalents at end of the fiscal year

17

454
2,495
(2,147)
214(235)(Millions of yen)
Fiscal 2016
(From April 1, 2015
to March 31, 2016)

(220)
(16)
544

(544)
2,821
(2,502)
228
(254)
29
(21)
(220)
(10)
(473)

83

(103)

196
2,406

(51)
2,602

-

24

-

(38)

2,602

2,536

-

(5) Notes to Consolidated Financial Statements(Note Concerning Going Concern Assumption)
None.
(Changes in Accounting Policies)(Adoption of Accounting Standard and Guidance for Business Combinations)Starting in the fiscal year ended March 31, 2016, the Company has adopted the
Accounting Standard for Business Combinations (ASBJ Statement No. 21, September
13, 2013, hereinafter the "Business Combination Accounting Standard"), AccountingStandard for Consolidated Financial Statements (ASBJ Statement No. 22, September 13,
2013, hereinafter the "Consolidated Accounting Standard") and Accounting Standard forBusiness Divestitures (ASBJ Statement No. 7, September 13, 2013, hereinafter the"Business Divestiture Accounting Standard"). As a result, gain or loss arising from achange in the Company's equity in subsidiaries in cases where control is retained wasrevised to a method recognizing them as an adjustment to capital surplus, along withrecognizing the acquisition costs in connection with business combinations as expenses
in the consolidated fiscal year in which they arise. At the same time, for businesscombinations that take place in or after the fiscal year ended March 31, 2016, thedisclosure method was revised so as to restate the distribution of acquisition cost upon
provisional accounting recognition in the statements of the fiscal year in which the
combination took place. In addition, the presentation of quarterly net income, etc. waschanged, and the presentation of minority interest was changed to the presentation of
non-controlling interests. To reflect the relevant changes, consolidated financial
statements for the fiscal year ended March 31, 2015 have been restated.
With regard to the adoption of the Business Combination Accounting Standard andother accounting standards, the Company has adopted the Business Combination
Accounting Standard from April 1, 2015, the beginning of the fiscal year ended March
31, 2016 onward in accordance with the transitional treatment set forth in Article 58-2
(4) of the Business Combination Accounting Standard, Article 44-5 (4) of theConsolidated Accounting Standard, and Article 57-4 (4) of the Business Divestiture
Accounting Standard.
There was no impact from the application of these standards on the consolidated
financial statements.

18

(Accounting Standard and Guidance Yet to Be Applied)
Revised Implementation Guidance on Recovery of Deferred Tax Assets (ASBJ
Guidance No. 26, March 28, 2016)(1) Overview
The Revised Implementation Guidance on Recovery of Deferred Tax Assets (ASBJ
Guidance No. 26, March 28, 2016, hereinafter, the “Revised Guidance on Recovery ofDeferred Tax Assets”) was set forth by the Accounting Standards Board of Japan(“ASBJ”) upon transfer of the Implementation Guidance on Tax Effect Accounting and
the Audit Implementation Guidance on Tax Effect Accounting (sections on accounting
treatment) from the Japanese Institute of Certified Public Accountants (“JICPA”) to the
ASBJ. The Revised Guidance on Recovery of Deferred Tax Assets provides guidanceon the recoverability of deferred tax assets when implementing the ASBJ’s AccountingStandard on Tax Effect Accounting, in conformity with the guidance on recoverability
as set forth in JICPA Audit Committee Report No. 66, “The Auditing Treatment on
Determining the Recoverability of Deferred Tax Assets,” which provides a frameworkfor dividing companies into five categories and the accounting treatment when
determining the amount of deferred tax assets by each category. In order to conform tothis framework, the ASBJ’s guideline was revised to provide the criteria forcategorizing the companies and update part of the accounting treatment for determining
the amount of tax deferred assets as necessary.
(2) Scheduled adoption date
The Revised Guidance on Recovery of Deferred Tax Assets will be adopted effective
April 1, 2016, from the start of the fiscal year ending March 31, 2017.
(3) Impact of applying the accounting standard and guidance
The effect of the Revised Guidance on Recovery of Deferred Tax Assets on the
consolidated financial statements is currently being evaluated.
(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. 15, 2016) and “Act for Partial Revision of the Local Tax Act” (Act No.
13, 2016) on March 29, 2016, the corporate income tax rate, etc. will be reduced fromfiscal years beginning on or after April 1, 2016, among other revisions. In line with thischange, the statutory income tax rate used to calculate deferred tax assets and deferred19

tax liabilities for temporary differences expected to reverse in the fiscal year beginningon April 1, 2016, as well as the fiscal year beginning on April 1, 2017, have been
reduced from the previous 32.26% to 30.86%, and for temporary differences expected
to reverse in the fiscal year beginning on April 1, 2018, has been reduced to 30.62%.
As a result of these changes in the tax rate, the amount of deferred tax assets (lessthe amount of deferred tax liabilities) was reduced by ¥6 million. Income taxes-deferredincreased by ¥25 million, and valuation difference on other available-for-sale securities
increased by ¥24 million, while remeasurements of defined benefit plans decreased by¥4 million, and deferred gains (losses) on hedges decreased by ¥1 million.

20

(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.

21

3 Information on net sales, income and loss, assets and other items by reporting
segment
Fiscal year ended March 31, 2015 (From April 1, 2014 to March 31, 2015)
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(Millions of yen)Amounts intheAdjustments*1 consolidated
financialstatements*2

Collagenmaterial
business

Formulasolutionbusiness

22,9598,955

31,914－

31,914

1,430

－

1,430

(1,430)－24,3901,101
25,698

8,955
647
5,310

33,345
1,749
31,009(1,430)(1,356)
2,922

31,914392
33,932

981

98

1,079

36

1,115

1,759

562

2,322

59

2,381

Total

(Notes) 1. Adjustments are as follows:(1) Adjustment for segment income of (¥1,356) million comprises elimination ofintersegment transactions of ¥2 million and unallocated expenses of (¥1,358)
million. Unallocated expenses are mainly general and administrative expenses.
(2) Adjustment for segment assets of ¥2,922 million comprises elimination ofintersegment transactions of (¥524) million and unallocated assets of ¥3,447
million. Major components of the unallocated assets are cash and deposits,
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.

22

Fiscal year ended March 31, 2016 (From April 1, 2015 to March 31, 2016)
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(Millions of yen)Amounts intheAdjustments*1 consolidated
financialstatements*2

Collagenmaterial
business

Formulasolutionbusiness

27,686

9,199

36,885－36,885

1,911

8

1,920

(1,920)－29,598
1,832
29,907

9,207
812
5,474

38,8052,645
35,381(1,920)(1,371)
2,216

36,885
1,273
37,597

1,420

100

1,520

42

1,562

1,362

37

1,399

62

1,462

Total

(Notes) 1. Adjustments are as follows:(1) Adjustment for segment income of (¥1,371) million comprises elimination ofintersegment transactions of ¥0 million and unallocated expenses of (¥1,372)
million. Unallocated expenses are mainly general and administrative expenses.
(2) Adjustment for segment assets of ¥2,216 million comprises elimination ofintersegment transactions of (¥718) million and unallocated assets of ¥2,934
million. Major components of the unallocated assets are cash and deposits,
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

b. Related information
Fiscal year ended March 31, 2015 (from April 1, 2014 to March 31, 2015)
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(Millions of yen)
Japan

India

Asia

U.S.

Canada

Other

Total

18,435

150

1,866

8,084

2,550

827

31,914

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

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

India

Asia

－

3,514

U.S.

181

Canada

6,328

Total

824

10,8483 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, 2016 (from April 1, 2015 to March 31, 2016)
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(Millions of yen)
Japan

India

Asia

U.S.

Canada

Other

Total

19,307

3,290

2,225

9,109

2,044

906

36,885

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

(2) Property, plant and equipment(Millions of yen)
Japan
3,324

India
3,718

Asia

U.S.

34

5,892

24

Canada754

Total
13,724

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(Material gain on negative goodwill)
The Collagen Material Business segment recorded a ¥502 million gain on
negative goodwill in the fiscal year ended March 31, 2016, as a result of theconversion of Nitta Gelatin India Ltd., Bamni Proteins Ltd., and Reva Proteins
Ltd. as subsidiaries within the scope of Nitta Gelatin Inc.'s consolidation.

25

(Per Share Information)
Fiscal 2015
(From April 1, 2014
to March 31, 2015)

Fiscal 2016
(From April 1, 2015
to March 31, 2016)

Net assets per share¥831.15¥814.90

Net income per share

33.20

26.00

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 2015
(From April 1, 2014
to March 31, 2015)

Fiscal 2016
(From April 1, 2015
to March 31, 2016)

Profit per share
Net income attributable to owners of the parent(Millions of yen)Amounts not attributable to common shareholders(Millions of yen)
Net income attributable to owners of the parent
related to common stock (Millions of yen)
Average number of common shares during theperiod (shares)(Subsequent Events)
No items to report

26

610

477

-

-

610

477

18,373,812

18,373,812

5. Other(1) 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
Candidate for newly appointed director
Director and Executive Officer: Yoshihisa Sugimoto(Current position: Executive Officer, General Manager of Sales & Marketing Dept.)
Director scheduled to resign
Director and Executive Officer: Tsuneo Sasaki
Candidate for newly appointed Audit & Supervisory Board member
Standing Audit & Supervisory Board Member: Hiroshi Takase(Current position: Executive Officer in charge of Casing Business in China)
Audit & Supervisory Board member scheduled to resignStanding Audit & Supervisory Board Member: Yasuyuki Nakai

3. Effective dateJune 28, 2016

(2) Other
No items to report.

27