May 10, 2013

Consolidated Financial Results
for the Fiscal Year Ended March 31, 2013
(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, 2013
Scheduled date to file Securities Report:
June 26, 2013
Scheduled date to commence dividend payments: June 27, 2013
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, 2013
(from April 1, 2012 to March 31, 2013)(1) Consolidated operating results(Percentages indicate year-on-year changes.)
Net sales
Fiscal year ended
March 31, 2013
March 31, 2012

Operating income

Ordinary income

Net income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

28,772
27,763

3.6
(0.6)

1,618
2,015

(19.7)
35.6

2,002
2,002

(0.0)
44.8

1,565
1,375

13.8
30.8

(Note) Comprehensive income
For the year ended March 31, 2013: ¥2,003 million (103.1%)
For the year ended March 31, 2012: ¥986 million (14.3%)

Diluted net
income pershare

Net income
per share
Fiscal year ended
March 31, 2013
March 31, 2012

Yen

99.30
99.87
(Reference) Equity in earnings of affiliates
For the year ended March 31, 2013: ¥262 million
For the year ended March 31, 2012: ¥118 million

Return on
equity (ROE)

Ordinary
income/total
assetsOperatingmargin

Yen

%

%

%

―
―

17.5
19.4

8.2
8.9

5.6
7.3

Equity ratio

Net assets per share(2) Consolidated financial position
Total assets
As ofMarch 31, 2013
March 31, 2012

Net assets

Millions of yen

Millions of yen%

Yen

25,44923,371

9,968
8,108

38.6
34.4

622.75509.41(Reference) Equity
As of March 31, 2013: ¥9,820 million
As of March 31, 2012: ¥8,033 million

(3) Consolidated cash flows
Net cash provided byoperating activities

Fiscal year ended
March 31, 2013
March 31, 2012

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

2,050
568

(1,557)
(733)

(376)
713

2,258
2,078

2. Cash dividends
Cash dividends per share

Fiscal year ended
March 31, 2012
Fiscal year ended
March 31, 2013
Fiscal year ending
March 31, 2014
(Forecasts)

Total amount ofdividends(annual)Payout ratio(consolidated)

Dividends on net
assets(consolidated)

Yen

Millions of yen

%

%

8.00

10.00

151

10.0

2.1

–

8.00

14.00

126

14.1

2.5

–

6.00

12.00

First
quarter

Secondquarter

Third
quarter

Fiscalyear-end

Yen

Yen

Yen

Yen

–

2.00

–

–

6.00

–

6.00

Annual13.7

Notes: 1. Breakdown of dividends for the March 31, 2012 fiscal year-end: ¥6.00 in ordinary dividend and ¥2.00 incommemorative dividend per share
2. 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, 2014
(from April 1, 2013 to March 31, 2014)(Percentages indicate year-on-year changes.)
OperatingincomeNet sales

Six months ending
September 30, 2013
Fiscal year ending
March 31, 2014

Ordinary
incomeNet income
per share

Net income

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

16,20015.5

750(16.8)

840(11.4)

580(18.2)

36.78

32,700

13.7

1,700

5.0

1,890

(5.6)

1,380

(11.9)

87.51

Notes:(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in achange in the scope of consolidation): Yes
New: 1 (Beijing Nitta Collagen Casing Co., Ltd.)
Excluded: None
(2) Changes in accounting policies, changes in accounting estimates, and restatement of revisions
a. Changes in accounting standards 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: Yes
d. Restatement of revisions: No(Note) The above conforms to "Case When Change in Accounting Policy is Difficult to Distinguishfrom a Change in Accounting Estimate," Article 14-7 of “Ordinance on Terminology, Forms andPreparation Methods of Consolidated Financial Statements.”
For details, please refer to “(5) Notes to Consolidated Financial Statements (Changes in Accounting
Policies)” in “3. Consolidated Financial Statements” on page 20 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, 2013
15,770,074 shares
As of March 31, 2012
15,770,074 sharesb. Number of shares of treasury stock at the end of the periodAs of March 31, 2013
As of March 31, 2012162 shares
162 sharesc. Average number of shares
For the year ended March 31, 2013
For the year ended March 31, 2012

15,769,912 shares
13,496,766 shares(Reference) Summary of non-consolidated operating results
1. Non-consolidated financial results for the fiscal year ended March 31, 2013
(from April 1, 2012 to March 31, 2013)(1) Non-consolidated operating results(Percentages indicate year-on-year changes.)
Net sales
Fiscal year ended
March 31, 2013
March 31, 2012

Operating income

Ordinary income

Net income

Millions of yen%

Millions ofyen%Millions ofyen%Millions ofyen%

20,261
20,567

(1.5)
0.2

910
1,371

(33.6)
15.9

1,294
1,407

(8.0)
17.0

874
773

13.0
0.4

Net income
per share
Fiscal year ended
March 31, 2013
March 31, 2012

Diluted net income
per share
Yen

Yen

55.42
55.22

―
―

(2) Non-consolidated financial position
Total assets
As ofMarch 31, 2013
March 31, 2012

Net assets

Equity ratio

Net assets per share

Millions of yen

Millions of yen%

Yen

21,177
20,714

9,162
8,409

43.3
40.6

581.04533.24(Reference) Equity
As of March 31, 2013: ¥9,162 million
As of March 31, 2012: ¥8,409 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” under“1. Analysis of Operating Results and Financial 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, 2013.
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･･････････････････････････････････････････ 8(2) Target Management Indicators･････････････････････････････････････････････････････ 8(3) Medium- to Long-term Management Strategies and Issues Facing the Company･･････････････ 9
3. Consolidated Financial Statements(1) Consolidated Balance Sheets ･･････････････････････････････････････････････････････11(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income
Consolidated Statement of Income･･････････････････････････････････････････････････ 13
Consolidated Statement of Comprehensive Income･････････････････････････････････････14(3) Consolidated Statements of Changes in Net Assets･････････････････････････････････････15(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(Accounting Standard and Guidance Yet to be Applied) ････････････････････････････････20(Segment Information)･･･････････････････････････････････････････････････････････21(Per Share Information) ･････････････････････････････････････････････････････････26(Subsequent Events) ･･･････････････････････････････････････････････････････････26
4. OtherTransfer of Directors and Corporate Auditors････････････････････････････････････････････27

11. Analysis of Operating Results and Financial Position(1) Analysis of Operating Results1) Operating results for the fiscal year ended March 31, 2013
In the fiscal year ended March 31, 2013, overseas economies remained on a weak
recovery track on the whole. Although the U.S. economy continued to stage a gradual
recovery, the European debt problem and financial crisis persisted, along with slowing
expansion in the Indian and Chinese economies and flat growth in the Southeast Asian
economies. On the other hand, the Japanese economy showed signs of gradual recovery
related to demand generated by post-quake reconstruction. Deflation continued tospread, however, due to factors such as the global economic slowdown, anemic exports
due to the yen’s protracted appreciation, and concerns about the impact of Japan’s
strained diplomatic relations with other countries on economic activity. In Japan, theimplementation of economic recovery measures by the new government formed at theend of last year and the Bank of Japan's loosening of monetary policy resulted in theoutlook improving in some aspects due mainly to the depreciation of the yen and therise in stock prices.
Against this backdrop, the Nitta Gelatin Group has adopted three basic management
policies: (1) Customer First; (2) Globalization & Innovation; and (3) Selection andConcentration. Guided by these policies, the Group has actively worked to provide
products and services that satisfy customers, and develop new products and cultivate
new markets, with the aim of rising above the challenging business conditions.
Overseas, the Group posted strong sales atop buoyant demand. In Japan, sales
declined, reflecting the deflation-mired economy.
As a result, in the fiscal year ended March 31, 2013, net sales were up 3.6% year on
year to ¥28,772 million. Operating income was down 19.7% to ¥1,618 million due to arise in energy costs in Japan and higher procurement costs of imports due to the yen’s
depreciation. Ordinary income was held to almost the same as the previous fiscal year at¥2,002 million on account of an increase in equity in earnings of affiliates and a foreignexchange gain. Net income increased 13.8% to ¥1,565 million, mainly because of lower
income taxes.

22) Segment business performance(Collagen Material Business)
In the gelatin field, sales of gelatin for capsules performed strongly in Japan. The Group
posted sharply lower photographic gelatin sales because demand for film fell due to therapid digitalization of movies. Meanwhile, sales of edible gelatin in Japan declined,
mainly reflecting the end of a temporary boost in sales from post-quake demand in theprevious fiscal year. In overseas markets, on the other hand, sales increased due tobuoyant demand for edible gelatin and gelatin for capsules. Another contributing factor
was the positive impact of the revision of gelatin prices to the Group’s advantage.
Collagen peptide sales declined year on year, mainly reflecting intensifiedcompetition with other materials in the health foods market in Japan, and due tostagnating sales overseas in the Asian market.
Collagen casing sales increased, buoyed by robust demand for collagen casings for
snack sausages in the U.S. and strong exports to China.
As a result, net sales in the segment were up 7.1% year on year to ¥18,674 million
and segment profit (operating income) was down 19.4% to ¥1,817 million.
(Formula Solution Business)
In food materials, overall sales were sluggish due to lackluster sales of ingredients fordelicatessen items. This was despite steady growth in sales of stabilizers for ham,sausage and other meat products, in addition to gelling agents for use in chilled desserts
sold in convenience stores.
In adhesives, overall sales declined mainly due to the sale of certain productbusinesses and lower sales of hot-melt adhesives for bookbinding applications owing to
weak conditions in the publishing sector. This was partly offset by firm sales of hot-meltadhesives for building materials supported by recovery demand from the Great East
Japan Earthquake, and high-performance gaskets developed by the Company.
As a result, net sales in the segment were down 2.2% year on year to ¥10,097 million.
Segment profit (operating income) was up 6.3% to ¥1,151 million, as prices of raw
materials for adhesives stopped increasing.

33) Earnings forecasts for the fiscal year ending March 31, 2014
We expect a recovery in the Japanese economy due to the implementation of economic
stimulus measures by the government and the Bank of Japan's loosening of monetary
policy, which should result in a correction of the strong yen, a rise in stock prices, andan improvement in consumer sentiment. However, we expect the outlook for the global
economy, despite its maintaining a gradual recovery track overall, to remain uncertain
due to the instability of downside risks such as the fiscal problems in Europe and theU.S.
Japan continues to see changes in diets and consumption spurred by market
maturation and the population aging. The diversification in consumer needs amid thesechanges will present opportunities for creating new applications and markets for theCompany’s products. In the Asian market, meanwhile, rising incomes in various regions
are expected to lead to increasingly Westernized and diverse diets, thereby expanding
the processed food market. As a result, we expect a further increase in demand forgelatin, peptide, and casings.
In this manner, the markets that the Nitta Gelatin Group faces are constantly changing
on a daily basis. Staying on top of the markets as they change will be an imperative if
Nitta Gelatin and its businesses are to develop and achieve sustainable growth in thisdiversifying environment.
(Collagen Material Business)
The Collagen Material Business will continue to face a harsh environment that includes
the rising costs of raw materials, the rising costs of energy in Japan, and the rising costsof imports due to the low yen. Product costs will be reduced to stay internationallycompetitive while answering a call from society to further save energy and downsize theCO2 footprint, and while developing raw material sources and production technology.
On the sales front, in addition to developing differentiated products, the Collagen
Material Business will grow sales by creating new markets and providing products andservices that respond to the needs of customers by taking full advantage of its
application capabilities.
In the peptide business, peptide sales in China will undergo full-scale implementationand the business will be steadily expanded centering on Asia. Another collagen peptide
plant will be built in North America for production to begin in March 2014. Moreover,
the Collagen Material Business will conduct further research on the functional4properties of collagen peptide to develop new products and open up new markets
underpinned by academic evidence of the health benefits to functional peptide.
Meanwhile, the casing business will innovate and revamp the manufacturing process
for plant and equipment upgrades at our production facilities in North America, with aview to achieving competitive production costs and upgraded supply capabilities. In
addition, we will build a framework for the manufacture and sale of casings to achieve
the full-fledged development of the casings business in China.
(Formula Solution Business)
The food material business will make active use of application laboratories located inJapan, North America, India and China to develop products and applications in close
contact with customers and expand sales in partnership with local affiliates and sales
agent networks. In addition, the Company will start selling gelling agents in Southeast
Asia centered on Vietnam.
In the adhesive business, we will expand sales of sealants (high-performance gaskets)
in Japan and the rest of Asia. At the same time, the division aims to improve theprofitability of the adhesive business by raising productivity, developing new products
and expanding sales of core hot-melt adhesive products.
Based on the business plans described above, the Group projects consolidated net salesof ¥32,700 million (up 13.7% year on year), operating income of ¥1,700 million (up5.0%), ordinary income of ¥1,890 million (down 5.6%) and net income of ¥1,380
million (down 11.9%) for the fiscal year ending March 31, 2014.
(2) Analysis of Financial Position
1) Assets, liabilities and net assets
Total assets amounted to ¥25,449 million at March 31, 2013, ¥2,077 million higher
than at March 31, 2012.
(Current assets)
Current assets rose ¥383 million from March 31, 2012 to ¥15,319 million. This was
mainly attributable to a ¥180 million increase in cash and deposits and a ¥860 million
increase in inventories, despite a ¥609 million decrease in notes and accounts
receivable-trade.

5(Noncurrent assets)
Noncurrent assets increased ¥1,693 million from March 31, 2012 to ¥10,129 million atMarch 31, 2013. This was mainly due to a ¥900 million increase in property, plant andequipment in line with capital investments and a ¥713 million increase in investment
securities primarily caused by increased market value accompanying rising share prices.
(Current liabilities)
Current liabilities stood at ¥9,637 million at March 31, 2013, ¥460 million higher thanat March 31, 2012. This was mainly attributable to a ¥260 million increase in notes andaccounts payable-trade, a ¥220 million increase in short-term loans payable and a ¥190
million increase in the current portion of long-term loans payable, despite a decrease of¥305 million in income taxes payable.
(Noncurrent liabilities)
Noncurrent liabilities decreased ¥242 million to ¥5,844 million. This was mainly due toa ¥200 million decrease in bonds payable and a ¥119 million decrease in long-termloans payable.
(Net assets)
Net assets increased ¥1,859 million to ¥9,968 million. This was mainly attributable to a
¥1,345 million increase in retained earnings and a ¥688 million increase in foreign
currency translation adjustments due to the yen’s depreciation.
2) Cash flows
Cash and cash equivalents as of March 31, 2013 were ¥2,258 million, up 8.7% fromMarch 31, 2012.
Cash flows for each activity and reasons are as follows.
(Net cash provided by operating activities)
Operating activities provided net cash of ¥2,050 million, up 260.8% year on year. The
main contributors to cash were ¥1,938 million in income before income taxes andminority interests, ¥825 million in depreciation and amortization and an ¥897 million
decrease in notes and accounts receivable-trade. The main components of cash usedwere ¥650 million for an increase in inventories and ¥686 million for income taxes paid.

6

(Net cash used in investing activities)
Investing activities used net cash of ¥1,557 million, compared to ¥733 million used in
the previous fiscal year. The main uses of cash were ¥1,193 million for the purchase ofproperty, plant and equipment and ¥302 million for purchase of stocks of affiliates.
(Net cash provided by financing activities)
Financing activities used net cash of ¥376 million, compared to ¥713 million provided
in the previous fiscal year. The main use of cash was ¥220 million for cash dividends
paid.
(Reference)
Trends in cash flow indicators are as shown below:
Fiscal year ended Fiscal year ended Fiscal year ended Fiscal year ended
March 31, 2010 March 31, 2011 March 31, 2012 March 31, 2013
Equity ratio (%)
Market value equity ratio(%)
Interest-bearing debt tocash flow ratio (Years)
Interest coverage ratio(Times)

27.2

28.5

34.4

38.6

–

–

34.3

79.7

9.7

4.7

12.4

3.4

3.8

8.6

3.4

13.8

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 consolidatedbalance sheets on which interest was paid. Furthermore, regarding the paidinterest, we use “interest expenses paid” recorded on the consolidated
statements of cash flows.

7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 andimproving productivity to remain competitive as a manufacturer.
8(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 founding in
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 ending March 2014 to the year ending March 2016.
The slogan for Nitta Gelatin’s 100th Year Vision is to “Amaze the World!” Under thisslogan, 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 of customer
expectations, develop new products and cultivate new markets in order to expand
earnings. This should help raise the Company’s corporate value and ensure it cancontinue 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 be achievedby 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 by commercializing ourresearch on the functional properties of collagen peptides. We will expand our businessglobally by expanding production and sales in China, starting production in the U.S.,
and increasing sales in the Japanese and North American markets.
In the casing business, we intend to increase business scale by expanding production
and sales through increasing efficiency at our manufacturing facilities in North America,and by upgrading our production and sales framework in China.
9In the life science business, Nitta Gelatin will commercialize high-quality, safe
medical-use materials matched to the needs of users, and popularize their application in
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. We will build a production and sales framework in Vietnam tocommence production and sales in Southeast Asia.
In the adhesive business, we will globally develop the business of sealants(high-performance gaskets), a product we have developed, to grow a high-profit
business. At the same time, Nitta Gelatin will strengthen the cost competitiveness andexpand sales of hot-melt adhesive. 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 today’spress release entitled “Nitta Gelatin Announces Medium-term Management Plan.”103. Consolidated Financial Statements(1) Consolidated Balance Sheets(Thousands of yen)

Fiscal 2012
(As of March 31, 2012)

Fiscal 2013
(As of March 31, 2013)

2,098,305
6,449,185
4,011,191
651,952
1,308,008
168,969
262,277(14,013)
14,935,878

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

6,593,579(4,074,067)
2,519,511
7,638,996(6,478,942)
1,160,053
741,409654,920(214,507)
440,412
365,756
1,219,880(1,059,848)
160,0315,387,176

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

18,491
18,491

48,696
48,696

2,055,225
17,318477,298
482,309(1,814)3,030,338
8,436,005
23,371,884

2,768,381
13,026
488,505
525,567(1,809)3,793,671
10,129,880
25,449,711

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

11

(Thousands of yen)

Fiscal 2012
(As of March 31, 2012)

Fiscal 2013
(As of March 31, 2013)

3,476,611
925,340
1,878,380
330,000
127,548
1,388,921
387,141
235,319
426,959
9,176,223

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

200,000
3,261,365
348,047
16,345
2,158,327
33,772
69,625
6,087,483
15,263,707－
3,142,014
319,983
20,1602,276,420
35,42250,6005,844,601
15,481,680

1,577,121
1,398,633
6,889,910(68)
9,865,597

1,577,121
1,398,633
8,235,011(68)
11,210,697

416,438

499,868

6,173(1,350,928)

27,858(662,919)(903,985)(1,254,853)(1,832,302)(1,390,046)

74,881
8,108,176
23,371,884

147,379
9,968,031
25,449,711

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
Bonds payable
Long-term loans payable
Lease obligations
Deferred tax liabilities
Provision for retirement benefits
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
Pension liability adjustment of foreignsubsidiaries
Total accumulated other comprehensive
incomeMinority interests
Total net assets
Total liabilities and net assets

12(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income
Consolidated Statements of Income(Thousands of yen)

Fiscal 2012
(From April 1, 2011
to March 31, 2012)
27,763,016
20,924,829

Fiscal 2013
(From April 1, 2012
to March 31, 2013)
28,772,135
22,080,816

Gross profit on sales

6,838,187

6,691,318

Selling, general and administrative expenses

4,822,430

5,072,326

Operating income

2,015,756

1,618,992

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

684
17,26628,221
118,501
3,629
59,643786
19,13729,960262,677
179,871
67,181

Total non-operating income

227,945559,616

167,695
45,58827,851

147,302

241,134

176,584

2,002,567

2,002,024－
15,797

11,624

Net sales
Cost of sales

Non-operating expenses
Interest expenses
Public offering expenses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of noncurrent assets
Gain on transfer of businessTotal extraordinary income

15,797Extraordinary losses
Loss on retirement of noncurrent assets
Loss on valuation of investment securities
Loss on valuation of golf club memberships
Loss on sales of golf club memberships
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
Net income

49,355－
4,475－
53,8301,964,535
568,599
12,611
581,210
1,383,325
7,455
1,375,869

13－
29,281－
11,62458,855
12,111－
4,060
75,027
1,938,622
402,377(16,416)
385,960
1,552,661(13,217)
1,565,879

Consolidated Statement of Comprehensive Income(Thousands of yen)

Fiscal 2012
(From April 1, 2011
to March 31, 2012)
1,383,325

Fiscal 2013
(From April 1, 2012
to March 31, 2013)
1,552,661

8,060

83,388

8,136

17,235

Foreign currency translation adjustments(50,878)

605,145

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(238,181)(350,868)(123,884)

95,824(396,747)
986,577

450,726
2,003,388

978,740
7,837

2,008,135(4,747)

Income before minority interests
Other comprehensive income
Valuation difference on other available-for-salesecurities
Deferred gains on hedges

14(3) Consolidated Statements of Changes in Net Assets(Thousands of yen)

Shareholders’ equity
Capital stock
Balance at the beginning of fiscal year
Changes during fiscal year
Issuance of new shares
Total changes during fiscal year
Balance at fiscal year-end
Capital surplus
Balance at the beginning of fiscal year
Changes during fiscal year
Issuance of new shares
Disposal of treasury stock
Total changes during fiscal year
Balance at fiscal year-end
Retained earnings
Balance at the beginning of fiscal year
Changes during fiscal year
Dividends from surplus
Net income
Retirement of treasury stock
Total changes during fiscal year
Balance at the end of fiscal year
Treasury stock
Balance at the beginning of fiscal year
Changes during fiscal year
Purchase of treasury stock
Disposal of treasury stock
Retirement of treasury stock
Total changes during fiscal year
Balance at the end of fiscal year
Total shareholders’ equity
Balance at the beginning of fiscal year
Changes during fiscal year
Issuance of new shares
Dividends from surplus
Net income
Purchase of treasury stock
Disposal of treasury stock
Total changes during fiscal year
Balance at the end of fiscal year

15

Fiscal 2012
(From April 1, 2011
to March 31, 2012)

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

875,000

1,577,121

702,121702,121
1,577,121－－
1,577,121

677,742

1,398,633

702,121
18,769720,891
1,398,633－－－
1,398,633

6,090,515

6,889,910(48,494)
1,375,869(527,980)
799,394
6,889,910(220,778)
1,565,879－
1,345,100
8,235,011(82,522)(68)(528,043)
82,517
527,980
82,453
(68)

－
－
－
－
(68)

7,560,736

9,865,597

1,404,242(48,494)
1,375,869(528,043)
101,2872,304,861
9,865,597－(220,778)
1,565,879－－
1,345,100
11,210,697

(Thousands of yen)

Other accumulated comprehensive income
Valuation difference on available-for-salesecurities
Balance at the beginning of fiscal year
Changes during fiscal year
Net changes of items other than shareholders’equityTotal changes during fiscal year
Balance at the end of fiscal year
Deferred gains or losses on hedges
Balance at the beginning of fiscal year
Changes during fiscal year
Net changes of items other than shareholders’equityTotal changes during fiscal year
Balance at the end of fiscal year
Foreign currency translation adjustment
Balance at the beginning of fiscal year
Changes during fiscal year
Net changes of items other than shareholders’equityTotal changes during fiscal year
Balance at the end of fiscal year
Pension liability adjustment of foreignsubsidiaries
Balance at the beginning of fiscal year
Changes during fiscal year
Net changes of items other than shareholders’equityTotal changes during fiscal year
Balance at the end of fiscal year
Total other accumulated comprehensive income
Balance at the beginning of fiscal year
Changes during fiscal year
Net changes of items other than shareholders’equityTotal changes during the period
Balance at the end of fiscal year
Minority interests
Balance at the beginning of fiscal year
Changes during fiscal year
Net changes of items other than shareholders’equityTotal changes during fiscal year
Balance at the end of fiscal year

16

Fiscal 2012
(From April 1, 2011
to March 31, 2012)

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

408,627

416,438

7,810

83,4307,810
416,438

83,430499,868

2,058

6,173

4,114

21,685

4,114
6,173

21,68527,858(1,180,055)(1,350,928)(170,873)

688,009(170,873)(1,350,928)

688,009(662,919)(665,803)(903,985)(238,181)(350,868)(238,181)(903,985)(350,868)(1,254,853)(1,435,173)(1,832,302)(397,129)

442,256(397,129)(1,832,302)

442,256(1,390,046)

59,50774,881

15,37472,497

15,37474,881

72,497
147,379

(Thousands of yen)

Total net assets
Balance at the beginning of fiscal year
Changes during fiscal year
Issuance of new shares
Dividends from surplus
Net income
Purchase of treasury stock
Disposal of treasury stock
Net changes of items other than shareholders’equityTotal changes during fiscal year
Balance at the end of fiscal year

17

Fiscal 2012
(From April 1, 2011
to March 31, 2012)

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

6,185,070

8,108,176

1,404,242(48,494)
1,375,869(528,043)
101,287－(220,778)
1,565,879－－(381,754)

514,754

1,923,106
8,108,176

1,859,854
9,968,031

(4) Consolidated Statements of Cash Flows
Fiscal 2012
(From April 1, 2011
to March 31, 2012)
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 in allowance for doubtful accounts
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 on valuation of golf club memberships
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 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
Payments of loans receivableCollection of loans receivable
Other, net
Net cash used in investing activities

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

1,964,535
841,772(165,505)
1,650
25,667
4,227(17,950)
167,695
12,482(118,501)－
49,355－
4,475－

1,938,622
825,227(104,221)
1,650(21,740)
1,369(19,924)
147,302(71,623)(262,677)(11,624)
58,855
12,111－
4,060(842,653)

897,844(631,626)(650,199)(50,750)

40,60822,544(194,431)
1,072,986
45,530(167,496)(382,809)
568,211(66,858)
13,3892,732,173
153,026(148,862)(686,124)
2,050,213(20,000)
20,000(673,123)
7,656(7,490)(4,718)(28,750)
16,442(10,011)
(300)
5,265
(38,464)(733,495)(20,000)
20,000(1,193,457)
14,324(40,388)(38,279)(302,278)
29,610(4,992)(200)
4,718(26,349)(1,557,292)

Fiscal 2012
(From April 1, 2011
to March 31, 2012)
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 transaction
Repayments of lease obligations
Proceeds from disposal of treasury stock
Purchase of treasury stock
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

(Thousands of yen)
Fiscal 2013
(From April 1, 2012
to March 31, 2013)(94,968)

84,1072,047,850(1,987,614)(260,000)
1,404,242

2,124,830(2,103,447)(330,000)－

15,41785,418

183,947(111,803)
101,287(528,043)(48,494)(7,880)713,939

132,632(140,920)－－(220,778)(8,173)(376,330)(8,506)

63,763

540,149

180,354

1,538,156

2,078,305

2,078,305

2,258,659

(5) Notes to Consolidated Financial Statements(Note Concerning Going Concern Assumption)
None.
(Changes in Accounting Policies)(Changes in Depreciation Method)
Following the amendment of the Corporation Tax Act, effective from the first quarter ofthe year ending March 31, 2013, the Company and its domestic consolidated
subsidiaries have changed the method of depreciation for property, plant and equipment
acquired on or after April 1, 2012 to the method of depreciation stipulated by theamended Corporation Tax Act.
This change will have only a negligible impact on operating income, ordinary income
and income before income taxes and minority interests for the year ended March 31,
2013.
(Accounting Standard and Guidance Yet to be Applied)
Accounting Standard for Retirement Benefits (Accounting Standards Board of Japan(ASBJ) Statement No. 26, May 17, 2012) and Guidance on Accounting Standard for
Retirement Benefits (ASBJ Guidance No. 25, May 17, 2012)
1. Outline(1) Treatment in the balance sheet
Actuarial gains and losses and past service costs that have yet to be recognized in profit
or loss will in the future be recognized after adjustment for tax effect under net assets
and other comprehensive income, with the amount recorded as a liability or asset
indicating the status of reserve provision.
(2) Treatment in the consolidated statements of income and the consolidated statementsof comprehensive income
The un-expensed portion of actuarial gains and losses and past service costs arising inany given accounting period will in the future be recognized under other comprehensive
income. Moreover, the expensed portion of actuarial gains and losses and past service
costs recognized under other comprehensive income will in the future be adjusted as a20

reclassification under other comprehensive income.
2. Effective date
The end of the fiscal year starting on or after April 1, 2013.
3. Impact of application of the accounting standard and guidance
The Company is currently evaluating the impact of application of the accounting
standard and guidance on financial statements when preparing the consolidated financial
statements.
(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
resources and evaluating business results.
The Company formulates a comprehensive worldwide strategy for the products
and services 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 foodmaterials, 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
the accounting 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, 2012 (From April 1, 2011 to March 31, 2012)(Thousands of yen)
Adjustments*1

Amounts intheconsolidated
financialstatements*2

27,763,016－

27,763,016－

1,352,486(1,352,486)－

18,786,364
2,255,858
16,389,172

10,329,137
1,082,911
4,867,446

29,115,502
3,338,769
21,256,619(1,352,486)(1,323,013)
2,115,265

27,763,016
2,015,756
23,371,884

722,774

78,609801,384

40,388

841,772

670,351

55,977726,329

43,464

769,793

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

Collagenmaterial
business

Formulasolutionbusiness

Total

17,433,878

10,329,137

1,352,486*Notes: 1. Adjustments are as follows:(1) Adjustment for segment income of -¥1,323,013 thousand comprises
elimination of intersegment transactions of ¥3,035 thousand and unallocatedexpenses of -¥1,326,049 thousand. Unallocated expenses are mainly generaland administrative expenses.
(2) Adjustment for segment assets of ¥2,115,265 thousand comprises
elimination of intersegment transactions of -¥498,990 thousand andunallocated assets of ¥2,614,255 thousand. Major components of theunallocated assets are cash and deposits, property, plant and equipment, andinvestment 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 periodicallyin consolidation by the Company’s highest decision making authority.

22

Fiscal year ended March 31, 2013 (From April 1, 2012 to March 31, 2013)(Thousands of yen)
Adjustments*1

Amounts intheconsolidated
financialstatements*2

28,772,135－

28,772,135－

1,304,577(1,304,577)－

19,979,215
1,817,209
18,629,938

10,097,497
1,151,633
4,528,873

30,076,712
2,968,842
23,158,812(1,304,577)(1,349,849)
2,290,899

28,772,135
1,618,992
25,449,711

721,20372,444

793,648

31,579825,227

1,229,202

73,2381,302,440

124,070

1,426,511

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

Collagenmaterial
business

Formulasolutionbusiness

Total

18,674,637

10,097,497

1,304,577*Notes: 1. Adjustments are as follows:(1) Adjustment for segment income of -¥1,349,849 thousand comprises
elimination of intersegment transactions of ¥2,952 thousand and unallocatedexpenses of -¥1,352,802 thousand. Unallocated expenses are mainly generaland administrative expenses.
(2) Adjustment for segment assets of ¥2,290,899 thousand comprises
elimination of intersegment transactions of -¥458,447 thousand andunallocated assets of ¥2,749,346 thousand. Major components of theunallocated assets are cash and deposits, property, plant and equipment, andinvestment 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 periodicallyin consolidation by the Company’s highest decision making authority.

23

b. Related information
Fiscal year ended March 31, 2012 (from April 1, 2011 to March 31, 2012)
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

20,037,158

1,082,423

Other

6,255,663

387,771

Total
27,763,016

Note: Sales are classified into countries or regions based on customer’s locations.
(2) Property, plant and equipment(Thousands of yen)
Japan

Asia

2,675,931

North America
31

Total

2,711,213

5,387,176

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, 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

19,098,061

1,239,300

North America
7,727,453

Other707,319

Total
28,772,135

Note: Sales are classified into countries or regions based on customer’s locations.
24

(2) Property, plant and equipment(Thousands of yen)Japan2,955,248

Asia

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.

c. Information on impairment loss on noncurrent assets by reporting segments
No items to reportd. Information on amortization of goodwill and unamortized amounts by reporting
segments
No items to report
e. Information on gain on negative goodwill by reporting segment
No items to report25

(Per Share Information)

Net assets per share
Net income per share

Fiscal 2012
(From April 1, 2011
to March 31, 2012)¥509.41
99.87

Fiscal 2013
(From April 1, 2012
to March 31, 2013)¥622.75
99.30

Notes: 1. Diluted net income per share is not disclosed due to the absence of latentshares with dilution effect.
2. Basis for calculating per share is shown below.
Fiscal 2012
(From April 1, 2011
to March 31, 2012)
Net income (Thousands of yen)

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

1,375,869

1,565,879

27,980－Net income related to common shares(Thousands of yen)

1,347,889

1,565,879

Average number of common shares during theperiod (shares)

13,496,766

15,769,912

Amounts not attributable to common shareholders(Thousands of yen)(Subsequent Events)
No items to report26

4. Other
Transfer of Directors and Corporate Auditors
1. Transfer of Representative Directors
No items to report
2. Transfer of Statutory Auditors
New statutory auditor candidate
Standing Statutory Auditor

Yasuyuki Nakai

Currently Executive Officer,
General Manager ofPlanning and Management
Dept., Gelatin Div.

Statutory auditor scheduled to resignStanding Statutory Auditor

Shinzo Tatematsu

3. Scheduled Date of Appointment
June 26, 2013
The appointment of statutory auditor will be submitted for approval of the 74th
Ordinary General Shareholders’ Meeting to be held on June 26, 2013.
This transfer of statutory auditors was announced on April 26, 2013.

27