June 19, 2023
Company name
Representative

Nitta Gelatin Inc.
Koichi Ogata,
Representative Director and President(Stock code: 4977; Prime Market of Tokyo Stock Exchange)
Norifumi Nagaoka,
Contact
Director and Executive Officer
General Manager of General Management Division
Phone Number+81-72-949-5381

Progress Report (Changes) of the Plan for Compliance with the Prime Market’s Continued
Listing Criteria as Well as Decision to Apply for the Standard Market and Status of Compliance
Nitta Gelatin Inc. (hereinafter “Nitta Gelatin”) submitted its Plan for Compliance with the Prime Market’s Continued
Listing Criteria on December 16, 2021 and since then it has made efforts to comply with these criteria.
Following the rules instituted by Tokyo Stock Exchange, Inc. (“TSE”) on April 1, 2023, Nitta Gelatin has been
given the opportunity to elect for its listing to be on the Standard Market. Therefore, a resolution was passed at themeeting of the Board of Directors held today to apply for the Standard Market, and Nitta Gelatin subsequently
submitted its application.
The reason for selecting the Standard Market and the status of compliance with the Standard Market’s Continued
Listing Criteria are presented below.

1. Nitta Gelatin’s Compliance with the Prime Market’s Continued Listing Criteria and Duration of Plan
Nitta Gelatin’s compliance with the Prime Market’s Continued Listing Criteria as of March 31, 2023, including
progress, is presented below. As of this same date, Nitta Gelatin had not fulfilled the requirement for tradable sharemarket capitalization.

June 30, 2021
(As of transition
Nitta Gelatin’srecord date)*1
Compliance andMarch 31, 2023
Trend
(As of most recent
record date)*2
Prime Market’s Continued ListingCriteria
Status of compliance

Number ofshareholders

Number oftradable sharesTradable share market
capitalization

Tradableshare ratio

Daily average
trading value

9,893

97,419 units¥6,310 million

53.0%¥9 million

12,826

95,172 units¥7,930 million

51.7%

¥109
million*3800

20,000 units¥10,000 million

35%¥20 million

Compliance

ComplianceNon-compliance

Compliance

Compliance

March 31,2025
*1: The status of Nitta Gelatin’s compliance as of June 30, 2021 was calculated based on the distribution of its share certificatesavailable from the TSE as of the transition record date.
*2: The number of shareholders, number of tradable shares, tradable share market capitalization, and tradable share ratio werecalculated based on the distribution of Nitta Gelatin’s share certificates available from the TSE as of the record date of March 31,2023.
*3: Daily average trading value was calculated based on Nitta Gelatin’s Continued Listing Criteria (trading value) available from theTSE as of the record date of December 31, 2022.
Period of plan－－-1-

March 31, 2025－

2. Status of Initiatives to Comply with the Prime Market’s Continued Listing Criteria and Assessment
Nitta Gelatin did not fulfill the criteria for tradable share market capitalization and daily average trading value, whichwere part of the Prime Market’s Continued Listing Criteria as of June 30, 2021, and as noted in its Plan forCompliance with the Prime Market’s Continued Listing Criteria dated December 16, 2021, Nitta Gelatin has made thefollowing efforts with the plan set to end on March 31, 2025.
(1) Status of Initiatives
1) Raise Market Capitalization by Increasing Corporate Valuei. Steadily Execute Medium-Term Management Plan
In the fiscal year ended March 31, 2023, the second year of its medium-term management plan, Nitta Gelatin
worked to upwardly revise product prices given robust demand in each of the Food Solutions, Health Support andSpecialties segments. As a result, Nitta Gelatin achieved the targets for net sales and operating income set for thefinal fiscal year of the medium-term management plan ahead of schedule. However, with regard to the key
markets identified in the medium-term management plan, steady progress is being made in some, while in others
progress has fallen behind schedule. As for the collagen peptide market overseas, demand is increasing worldwideand Nitta Gelatin is now working to tap into new markets in Southeast Asia, where is expected to see future
growth. In terms of the biomedical market, Nitta Gelatin is expanding its presence globally by increasing thecompetitiveness of medical-use collagen and gelatin through fully utilizing Mirai-can, which was completed inDecember 2022. Meanwhile, Nitta Gelatin is investing management resources in the professional-use market, newneeds in food markets, and the direct sales business, but it expects that it will take time to achieve targets in thesethree key markets, requiring a review of strategies.
In addition, Nitta Gelatin’s most recent financial results deteriorated from the third quarter of the fiscal year
ended March 31, 2023, due mainly to the lower plant utilization rate of consolidated subsidiary, Nitta Gelatin USA
Inc. Moreover, Nitta Gelatin’s operating cash flows deteriorated because it held larger than normal inventories inresponse to worldwide logistics bottlenecks caused by the COVID-19 pandemic. Nitta Gelatin has already began
implementing countermeasures to address each of these issues, and while progress toward improvement is being
made, Nitta Gelatin will continue working to further strengthen its business management foundation going
forward.
ii. Further Promote Sustainability Activities
Nitta Gelatin established the Sustainability Committee in March 2022, and it is now working to address the six
material issues of “environment,” “solutions to social issues,” “co-existence with and contribution to localcommunities,” “better workplaces and human resources development,” “human rights and labor practices,” and“responsible procurement.” In December 2022, Nitta Gelatin disclosed information following therecommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
iii. Increase Shareholder Returns
Nitta Gelatin’s basic approach on shareholder returns is to provide a dividend on equity ratio of 1.5% or higher. In
the fiscal year ended March 31, 2023, Nitta Gelatin paid cash dividends per share of ¥16, after increasing theyear-end dividend per share by ¥2 from ¥7 following upward revisions made to the full-year forecasts of financialresults. For the fiscal year ending March 31, 2024, Nitta Gelatin plans to offer cash dividends per share of ¥16.
2) Promote More Active Share Trading as well as Boost Recognition and Liquidity
i. Increase Recognition through Stronger PR and IR
As a manufacturer of materials, Nitta Gelatin has established a certain reputation among corporate customers infoods and capsules, but it has low recognition among general consumers, with the image that “Collagen equals
Nitta Gelatin” yet to penetrate. Therefore, in February 2023, Nitta Gelatin launched the Frail FREE Project as anew PR measure for proposing ways of living to stay healthy both physically and mentally for longer with thehope of sharing the benefits of collagen and Nitta Gelatin with general consumers and increasing the number of-2-fans of the company. Also, in the direct sales business, which sells collagen health foods to general consumers
using direct marketing, Nitta Gelatin has undertaken aggressive advertising via mass media. In regard to IR, inaddition to financial results presentations held twice annually, Nitta Gelatin held briefing sessions for individual
investors in September 2022 and January 2023 with the purpose of fostering deeper understanding of the Group.
ii. Increase Liquidity by Reviewing Cross-Shareholdings
With the purpose of increasing tradable share market capitalization, Nitta Gelatin has divested its
cross-shareholdings of certain operating companies after requesting these companies and financial institutions
holding the company’s shares as cross-shareholdings to review their holdings. However, the tradable share ratio asof March 31, 2023 was slightly lower than the ratio on the transition record date of June 30, 2021.
(2) Evaluation of Initiatives
In the fiscal year ended March 31, 2023, progress was made according to the initial plan, as consolidated net sales
and consolidated operating income reached record highs and financial results were favorable. Nevertheless, withregard to the Prime Market’s Continued Listing Criteria, while Nitta Gelatin was able to fulfill the criteria for daily
average trading volume on the most recent record date, it was unable to do so for tradable share market capitalization.

3. Reasons for Selection of the Standard Market
Nitta Gelatin made efforts to fulfill the Prime Market’s Continued Listing Criteria, but it was unable to fulfill thecriteria for tradable share market capitalization as of the record date. Going forward, if it continued its listing on thePrime Market, Nitta Gelatin may breach the Prime Market’s Continued Listing Criteria after the end of thetransitional measures, raising the risk of it being delisted. Although there are no changes to Nitta Gelatin’s policy toshift away from general-purpose gelatin products to high-value-added collagen peptides and to be reborn as a highly
profitable company as stated in our Long-term Business Plan released on June 8, 2022, Nitta Gelatin believes that its
current priorities over the short term should be to maintain and stabilize production including at its overseas plants
and improve cash flows by reducing inventories to more appropriate levels. Over the medium to long term, Nitta
Gelatin intends to concentrate management resources on the following: transformation of revenue structure impacted
by raw materials prices, investment in new facilities for expanding sales of collagen peptide, and review of growthstrategies for key markets and business portfolio of other existing businesses. Nitta Gelatin has judged that it ispossible to achieve sustainable growth and improve profitability through such measures, and for this reason it passed
a resolution to select and apply for the Standard Market in order to focus on these achievements.
4. Status of Compliance with the Standard Market’s Continued Listing Criteria
Nitta Gelatin’s compliance with the Standard Market’s Continued Listing Criteria as of March 31, 2023 is presented
below.
Number ofshareholders

Number of
tradablesharesTradable sharemarketcapitalization

Tradableshare ratio

Monthly
average trading
volumeNet assets

March 31, 2023
¥7,930¥13,700
12,826
95,172 units
51.7%
45,670 units*2(As of most recent
millionmillion1record date)*
Standard Market’s Continued¥1,000400
2,000 units
25%
10 units
Positive
Listing Criteria
million*1: The number of shareholders, number of tradable shares, tradable share market capitalization, and tradable share ratio werecalculated based on the distribution of Nitta Gelatin’s share certificates available from the TSE as of the record date of March 31,
2023.
*2: The monthly average calculated by Nitta Gelatin dividing the trading volume from July 2022 to December 2022 by 6.
Status ofcompliance

Since Nitta Gelatin complies with all the Standard Market’s Continued Listing Criteria at the time of its
application for listing on this market, there is no longer a need to disclose the Plan for Compliance with the Standard
Market’s Continued Listing Criteria if Nitta Gelatin complies with all of the criteria as of the record date for each-3-item of such criteria.
Even after the transition to the Standard Market, Nitta Gelatin will aim to list on the Prime Market in the future
and concentrate on quickly achieving the priority issues mentioned in 3. above. In addition, Nitta Gelatin will strive
to further increase the level of governance and bolster IR activities to strengthen its foundation for the sustainableenhancement of corporate value and promote initiatives to comply with the Prime Market’s Continued ListingCriteria.

-4-