November 9, 2012

Consolidated Financial Results
for the Six Months Ended September 30, 2012
(Japanese Accounting Standards)
Name of the Listed Company: Nitta Gelatin Inc.
Listing:
Second 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 Affairs Division
Tel: +81-72-949-5381
Scheduled date to file Quarterly Securities Report: November 11, 2012
Scheduled date to commence dividend payments: December 7, 2012
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 six months ended September 30, 2012
(from April 1, 2012 to September 30, 2012)(1) Consolidated operating results(Percentages indicate year-on-year changes.)
Net sales
Six months ended
September 30, 2012
September 30, 2011

Operating income

Ordinary income

Net income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

14,02914,311

(2.0)
―

901
1,265

(28.8)
―

947
1,186

(20.1)
―

709
777

(8.8)
―

(Note) Comprehensive income
For the six months ended September 30, 2012: ¥424 million (30.7%)
For the six months ended September 30, 2011: ¥324 million (-%)

Diluted net
income pershare

Net income
per share
Six months ended
September 30, 2012
September 30, 2011

Yen

Yen

44.96
59.90

―
―

(2) Consolidated financial position
Total assets
As of
September 30, 2012
March 31, 2012
(Reference) Equity
As of September 30, 2012:
As of March 31, 2012:

Net assets

Equity ratio

Millions of yen

Millions of yen%

23,591
23,371

8,398
8,108

35.3
34.4

¥8,328 million¥8,033 million

2. Cash dividends
Cash dividends per share

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

First
quarter

Secondquarter

Third
quarter

Fiscalyear-end

Yen

Yen

Yen

Yen

Yen

–

2.00

–

8.00

10.00

–

6.00
–

6.00

12.00

Annual(Note) Changes to most recent consolidated financial forecasts: None

3. Consolidated financial forecasts for the fiscal year ending March 31, 2013
(from April 1, 2012 to March 31, 2013)
OperatingincomeNet sales

Fiscal year ending
March 31, 2013

(Percentages indicate year-on-year changes.)
Ordinary
Net income
Net income
incomeper share

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

28,900

4.1

2,070

2.7

2,100

4.9

1,370

(0.4)

86.87

(Note) Changes to most recent consolidated financial forecasts: None

Notes
(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in achange in the scope of consolidation): Yes
New: 1 (Beijing Nitta Collagen Casing Co., Ltd.)
Excluded: None
(2) Adoption of special accounting methods for the preparation of quarterly consolidated financial
statements: No(3) Changes in accounting policies, changes in accounting estimates, and restatement of revisions
a. Changes in accounting 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: For details, please refer to “(2) Changes in Accounting Policies and Estimates, and Restatementof Revisions” in “2. Matters Concerning Summary Information (Notes)” on page 5 of the
Attachment Contents to this report.
(4) Number of common shares issued
a. Total number of issued shares at the end of the period (including treasury stock)
As of September 30, 2012
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 September 30, 2012162 shares
As of March 31, 2012162 sharesc. Average number of shares
For the six months ended September 30, 2012
For the six months ended September 30, 201115,769,912 shares
12,514,819 shares* Disclosure of status of quarterly review procedure
This report falls outside the scope of quarterly review procedures as laid out in the Financial Instruments
and Exchange Act. As of the time of the release of this report, the review of the financial statements, etc.,
outlined in the Act had not yet been concluded.
* Proper use of earnings forecasts, and other special matters
The forward-looking statements, including earnings forecasts, contained in these materials are based on
information currently available to the Company and on certain assumptions deemed to be reasonable.
These statements do not guarantee that the Company will achieve its earnings forecasts. In addition,
actual business and other results may differ substantially due to various factors. For details on theconditions assumed and the cautionary notes and items in the financial forecasts, please refer to“Qualitative Information Concerning Consolidated Business Forecasts” on page 5 of the Attachment
Contents to this report.

Attachment Contents
1. Qualitative Information Concerning Quarterly Financial Statements･･･････････････････････ 2(1) Qualitative Information Concerning Consolidated Business Results････････････････････････ 2(2) Qualitative Information Concerning Consolidated Financial Position･･･････････････････････ 3(3) Qualitative Information Concerning Consolidated Business Forecasts･･･････････････････････ 5

2. Matters Concerning Summary Information (Notes)･･････････････････････････････････････ 5(1) Significant Changes in Subsidiaries During the Quarterly Period Under Review･･･････････････ 5(2) Changes in Accounting Policies and Estimates, and Restatement of Revisions････････････････ 5

3. Quarterly Consolidated Financial Statements･･･････････････････････････････････････････ 6(1) Consolidated Balance Sheets ･･････････････････････････････････････････････････････ 6(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ････ 8(3) Consolidated Statements of Cash Flows ･････････････････････････････････････････････ 10(4) Note Concerning Going Concern Assumption ･････････････････････････････････････････ 12(5) Note Concerning Significant Changes in Shareholders’ Equity･････････････････････････････ 12(6) Segment Information･････････････････････････････････････････････････････････････ 12(7) Subsequent Events･･･････････････････････････････････････････････････････････････ 14

1

1. Qualitative Information Concerning Quarterly Financial Statements(1) Qualitative Information Concerning Consolidated Business Results
In the first half of the year ending March 31, 2013, overseas economies remained on aweak recovery track on the whole. Although the U.S. economy continued to stage agradual recovery, the European debt problem and financial crisis persisted, along withslowing expansion in the Indian and Chinese economy and flat growth in the Southeast
Asian economies. On the other hand, the Japanese economy returned to a recovery path,mainly supported by firm internal demand related to post-quake reconstruction andother sources of demand. The economic outlook, however, remained uncertain due tofactors 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 China and South Korea on economic activity.
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 intensified competition with products from other companies.
As a result, in the first half of the fiscal year ending March 31, 2013, net sales were
down 2.0% year on year to ¥14,029 million, and operating income was down 28.8% to¥901 million. Ordinary income was held to a decrease of 20.1% to ¥947 million on
account of an increase in equity in earnings of affiliates. Net income was held to adecrease of 8.8% to ¥709 million, mainly because of lower income taxes.
Segment business performance was as follows:(a) Collagen Material BusinessIn the gelatin field, the Group posted lower sales of edible gelatin in Japan, reflecting
the end of a temporary boost in sales from post-quake demand in the first half of theprevious fiscal year. However, sales of gelatin for capsules performed strongly in Japan.
Meanwhile, photographic gelatin sales declined. In overseas markets, sales increased
due to buoyant 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 falling unit prices as aresult of intensified competition with products of other companies and with othermaterials in Japan, and due to delays in the Group’s development of Asian markets.
2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 down 1.5% year on year to ¥8,855 million
and segment profit (operating income) was down 29.1% to ¥929 million.
(b) Formula Solution BusinessIn food materials, overall sales declined due to lackluster sales of ingredients fordelicatessen items, reflecting intensified competition with products from othercompanies. This was despite steady growth in sales of stabilizers for ham, sausage andother meat products, in addition to stabilizers for use in chilled desserts sold in
convenience stores, underpinned by strong conditions in the Japanese food market.
In adhesives, overall sales declined mainly due to lower sales of hot melt adhesives
for bookbinding applications owing to weak conditions in the publishing sector, as wellas the sale of certain product businesses. This was partly offset by firm sales of hot melt
adhesives for building materials supported by recovery demand from the Great East
Japan Earthquake, and newly developed high-performance gaskets.
As a result, net sales in the segment were down 2.8% year on year to ¥5,173 million.
Segment profit (operating income) was up 8.4% to ¥648 million, as prices of raw
materials for adhesives stopped increasing.
(2) Qualitative Information Concerning Consolidated Financial Position(a) Assets, liabilities and net assets
Total assets amounted to ¥23,591 million at September 30, 2012, ¥219 million higher
than at March 31, 2012.
(Current assets)
Current assets increased ¥301 million from March 31, 2012 to ¥15,237 million. Thiswas mainly due to a ¥330 million increase in inventories.
(Noncurrent assets)
Noncurrent assets decreased ¥81 million from March 31, 2012 to ¥8,354 million at
September 30, 2012. This was mainly due to a ¥171 million decrease in investment
securities tracking lower stock prices, which was partly offset by a ¥62 million increasein property, plant and equipment and a ¥24 million increase in intangible assets in linewith capital expenditures.

3

(Current liabilities)
Current liabilities stood at ¥9,174 million at September 30, 2012, ¥2 million lower thanat March 31, 2012. This was attributable to a ¥180 million decrease in income taxes
payable and a ¥62 million decrease in provision for bonuses, which were partly offset
by a ¥218 million increase in notes and accounts payable-trade.
(Noncurrent liabilities)
Noncurrent liabilities decreased ¥67 million to ¥6,019 million. This was mainly due to a¥200 million decrease in bonds payable and a ¥149 million decrease in provision for
retirement benefits, which were partly offset by a ¥297 million increase in long-termloans payable.
(Net assets)
Net assets increased ¥289 million to ¥8,398 million. The main contributing factor was a¥582 million increase in retained earnings, which was partly offset by a ¥251 million
decline in foreign currency translation adjustments in line with the yen’s appreciationfrom the previous fiscal year-end.
As a result, the equity ratio stood at 35.3% as of September 30, 2012, compared to34.4% at March 31, 2012.
2) Cash flows
Cash and cash equivalents as of September 30, 2012 were ¥2,013 million.
Cash flows for each activity and reasons are as follows.
(Cash flows from operating activities)
Operating activities provided net cash of ¥372 million. The main contributors to cash
were ¥939 million in income before income taxes and minority interests and ¥385
million in depreciation and amortization. The main components of cash used were ¥412
million for an increase in inventories and ¥401 million for income taxes paid.
(Cash flows from investing activities)
Investing activities used net cash of ¥467 million. The main use of cash was ¥436
million for the purchase of property, plant and equipment.

4

(Cash flows from financing activities)
Financing activities provided net cash of ¥52 million. The main contributor to cash was¥1,519 million in proceeds from long-term loans payable. The main components of cashused were ¥1,002 million for repayment of long-term loans payable and ¥330 million
for redemption of bonds.
(3) Qualitative Information Concerning Consolidated Business Forecasts
The Group has not revised its consolidated business forecasts for the fiscal year ending
March 31, 2013, which were announced in “Consolidated Financial Results for the
Fiscal Year Ended March 31, 2012 (Japanese Accounting Standards)” on May 11, 2012.
Actual business and other results may differ substantially from projections due tovarious factors.
2. Matters Concerning Summary Information (Notes)(1) Significant Changes in Subsidiaries During the Quarterly Period Under Review
Beijing Nitta Collagen Casing Co., Ltd., a joint venture company, was established in
September 2012 with Beijing Qiushi Agriculture Development Co., Ltd., a sheep casing
processing company in Beijing, for the purpose of expanding sales of collagen casing in
China. Beijing Nitta Collagen Casing was included in the scope of consolidation fromthe second quarter of the fiscal year ending March 31, 2013.
(2) Changes in Accounting Policies and Estimates, and Restatement of Revisions(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 tangible fixed assets acquiredon or after April 1, 2012 to the method of depreciation stipulated by the amended
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 first half of the year
ending March 31, 2013.

5

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

Fiscal 2012
(As of March 31, 2012)

2Q Fiscal 2013
(As of September 30, 2012)

2,098,305
6,449,185
4,011,191
651,952
1,308,008
431,247(14,013)
14,935,878

2,033,882
6,371,463
4,306,406
701,938
1,293,383
548,893(18,735)
15,237,232

2,519,511
1,160,053
1,707,611
5,387,176

2,582,366
1,068,439
1,798,861
5,449,667

18,491
18,49142,722
42,722

2,055,225
976,926(1,814)3,030,338
8,436,005
23,371,884

1,883,836
979,908(1,731)2,862,013
8,354,403
23,591,636

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

6

(Thousands of yen)

Fiscal 2012
(As of March 31, 2012)

2Q Fiscal 2013
(As of September 30, 2012)

3,476,611
925,340
1,878,380
330,000
387,141
235,319
1,943,430
9,176,223

3,695,103
879,8022,075,353
200,000
206,665
173,067
1,944,039
9,174,031

200,000
3,261,365
2,158,327
33,772434,018
6,087,483
15,263,707－
3,558,807
2,008,743
34,597
417,453
6,019,601
15,193,632

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

1,577,121
1,398,633
7,472,829(68)
10,448,516

416,438

324,270

6,173(1,350,928)

2,611(1,602,677)(903,985)(844,633)(1,832,302)(2,120,427)

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

69,914
8,398,003
23,591,636

Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of long-term loans payable
Current portion of bonds
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Noncurrent liabilities
Bonds payable
Long-term loans payable
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(loss)
Valuation difference on otheravailable-for-sale securities
Deferred gains on hedges
Foreign currency translation adjustments
Pension liability adjustment of foreignsubsidiaries
Total accumulated other comprehensive
income (loss)
Minority interests
Total net assets
Total liabilities and net assets

7

(2) Consolidated Statements of Income and Consolidated Statements ofComprehensive Income
Consolidated Statements of Income(Thousands of yen)

2Q Fiscal 2012
(From April 1, 2011
to September 30, 2011)
14,311,358
10,620,872

2Q Fiscal 2013
(From April 1, 2012
to September 30, 2012)
14,029,866
10,696,475

Gross profit on sales

3,690,486

3,333,391

Selling, general and administrative expenses

2,424,872

2,431,993

Operating income

1,265,613

901,397

Non-operating income
Interest income
Dividend income
Equity in earnings of affiliates
Other

364
9,798
47,272
37,340768
10,573
124,290
46,288

Total non-operating income

94,776

181,92087,844
71,617
14,60775,751
44,831
14,895174,069

135,478

1,186,320

947,839

190

10,897190

10,897

2,109
4,279
4,500

9,028
9,871

Net sales
Cost of sales

Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of noncurrent assets
Total extraordinary income
Extraordinary losses
Loss on retirement of noncurrent assets
Loss on valuation of investment securities
Loss on valuation of golf club memberships
Total extraordinary losses
Income before income taxes and minority
interests
Income taxes
Income before minority interests
Minority interests in income
Net income

8

10,889－18,9001,175,622

939,836

391,539784,082
6,475
777,606

227,829712,006
2,928
709,078

Consolidated Statements of Comprehensive Income(Thousands of yen)

2Q Fiscal 2012
(From April 1, 2011
to September 30, 2011)
784,082

2Q Fiscal 2013
(From April 1, 2012
to September 30, 2012)
712,006(16,045)(92,153)(24,117)(12,646)

Foreign currency translation adjustments(344,615)(192,932)

Pension liability adjustment of foreignsubsidiaries
Share of other comprehensive loss of
associates accounted for using equity method
Total other comprehensive loss
Total comprehensive income
Comprehensive income attributable to:
Owners of the parent
Minority interests

75,08659,352(149,931)(49,466)(459,623)
324,459(287,847)
424,159

317,983
6,475

420,953
3,205

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

9(3) Consolidated Statements of Cash Flows(Thousands of yen)

2Q Fiscal 2012
(From April 1, 2011
to September 30, 2011)

2Q Fiscal 2013
(From April 1, 2012
to September 30, 2012)

1,175,622

939,836

407,286

385,728

3,519

4,900

Decrease in provision for bonuses(25,977)(60,101)

Decrease in provision for retirement benefits
Increase in provision for directors' retirement
benefits
Interest and dividends income(43,196)(85,526)825

825(10,162)(11,341)

Interest expenses

87,84475,751

Foreign exchange losses

52,21922,010Equity in earnings of affiliates(47,272)(124,290)

Gain on sales of noncurrent assets(190)(10,897)

Loss on retirement of noncurrent assets

2,109

9,028

Loss on valuation of investment securities

4,279

9,871

Loss on valuation of golf club memberships
Increase in notes and accounts
receivable-trade
Increase in inventories

4,500

－

(963,046)(8,417)(413,840)(412,134)

232,455

286,381

Cash flows from operating activities
Income before income taxes and minority
interests
Depreciation and amortization
Increase in allowance for doubtful accounts

Increase in notes and accounts payable-trade
Increase (decrease) in accrued consumption
taxes
Other, net

8,998(48,611)(87,927)(268,013)

Subtotal

388,045704,999

Interest and dividends income received

37,839144,347

Interest expenses paid

(84,146)(75,041)

Income taxes paid

(189,045)(401,770)

Net cash provided by operating activities

152,692

372,53410

(Thousands of yen)

2Q Fiscal 2012
(From April 1, 2011
to September 30, 2011)

2Q Fiscal 2013
(From April 1, 2012
to September 30, 2012)

Payments into time deposits(20,000)(20,000)

Proceeds from withdrawal of time deposits

20,00020,000Purchase of property, plant and equipment
Proceeds from sales of property, plant andequipment
Purchase of intangible assets
Purchase of investment securities
Purchase of insurance funds
Proceeds from cancellation of insurance funds
Payments of loans receivableCollection of loans receivable
Other, net(313,644)(436,582)

190

13,315(3,735)(2,697)(8,401)
16,442
(300)
2,697
(999)

(29,309)(35,341)(4,566)
29,610(200)
2,396(7,203)

Net cash used in investing activities(310,449)(467,881)(95,664)
1,999,300(975,911)(230,000)
92,418(48,717)(528,010)(23,465)(7,880)
182,069(431)
1,519,115(1,002,303)(330,000)
63,570(63,374)－(126,159)(8,173)52,243(48,620)(21,319)(24,308)
1,538,156
1,513,847(64,422)2,078,305
2,013,882

Cash flows from investing activities

Cash flows from financing activities
Net decrease in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Redemption of bonds
Proceeds from sale and leaseback transactions
Repayments of lease obligations
Purchase of treasury stock
Cash dividends paid
Cash dividends paid to minority shareholders
Net cash provided by financing activities
Effect of exchange rate change on cash and cash
equivalents
Net decrease in cash and cash equivalents
Cash and cash equivalents, beginning of period
Cash and cash equivalents, end of period11(4) Note Concerning Going Concern Assumption
None(5) Note Concerning Significant Changes in Shareholders’ Equity
None(6) Segment Information(Segment information)
I. First half of the fiscal year ended March 31, 2012 (From April 1, 2011 to
September 30, 2011)
1. Information on net sales, income and loss by reporting segment
Reporting segment

Net sales
Sales to third parties
Inter-segment sales
and transfers
Total
Segment income(Thousands of yen)Amounts intheAdjustments*1 consolidated
financialstatements*2

Collagenmaterial
business

Formulasolutionbusiness

Total

8,989,303

5,322,054

14,311,358－

14,311,358

628,130－

628,130(628,130)－

9,617,433
1,310,622

5,322,054
598,219

14,939,488
1,908,842(628,130)(643,228)

14,311,358
1,265,613(Notes) 1. Adjustment for segment income of -¥643,228 thousand comprises
elimination of intersegment transactions of ¥3,470 thousand andunallocated expenses of ¥646,698 thousand.
2. Segment income is adjusted against the operating income recorded in the
consolidated income statement.
2. Information on impairment loss on noncurrent assets and goodwill byreporting segments
No items to report12II. First half of the fiscal year ending March 31, 2013 (From April 1, 2012 to
September 30, 2012)
1. Information on net sales, income and loss by reporting segment
Reporting segment

Net sales
Sales to third parties
Inter-segment sales
and transfers
Total
Segment income(Thousands of yen)Amounts intheAdjustments*1 consolidated
financialstatements*2

Collagenmaterial
business

Formulasolutionbusiness

Total

8,855,882

5,173,984

14,029,866－

14,029,866

610,207－610,207(610,207)－

9,466,089
929,818

5,173,984
648,559

14,640,073
1,578,378(610,207)(676,980)

14,029,866
901,397(Notes) 1. Adjustment for segment income of -¥676,980 thousand comprises
elimination of intersegment transactions of ¥1,408 thousand andunallocated expenses of ¥678,389 thousand.
2. Segment income is adjusted against the operating income recorded in the
consolidated income statement.
2. Information on impairment loss on noncurrent assets and goodwill byreporting segments
No items to report13(7) Subsequent Events
Establishment of a new joint venture company (consolidated subsidiary)
At a Board of Directors meeting held on October 17, 2012, Nitta Gelatin Inc. passed a
resolution on establishing a joint venture company in Vietnam.
1. Purpose of establishment
Nitta Gelatin will establish a joint venture company in Vietnam for the purpose of
expanding sales of the Company’s products in the country and the rest of the Southeast
Asian region, where future economic growth is expected.
2. Outline of the joint venture company(1) Name: Nitta Gelatin Vietnam JV Co., Ltd. (planned)(2) Establishment: December 2012 (planned)(3) Paid-in capital: Equivalent of US$625,000 (approx. ¥50 million)(4) Shareholding ratio: Nitta Gelatin Inc. 75%
Shanghai International Trading Co., Ltd. 25%(5) Business activities: Production and sale of gelling agents

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