May 11, 2012

Consolidated Financial Results
for the Fiscal Year Ended March 31, 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 Managing Executive Officer;
General Manager of the General Affairs Division
Tel: +81-72-949-5381
Scheduled date of General Shareholders’ Meeting: June 27, 2012
Scheduled date to file Securities Report:
June 27, 2012
Scheduled date to commence dividend payments: June 28, 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 fiscal year ended March 31, 2012
(from April 1, 2011 to March 31, 2012)(1) Consolidated operating results(Percentages indicate year-on-year changes.)
Net sales
Fiscal year ended
March 31, 2012
March 31, 2011

Operating income

Ordinary income

Net income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

27,76327,923

(0.6)
5.8

2,015
1,486

35.6
5.6

2,002
1,383

44.8
(12.7)

1,375
1,051

30.8
0.4

(Note) Comprehensive income
For the year ended March 31, 2012: ¥986 million (14.3%)
For the year ended March 31, 2011: ¥863 million (-43.5%)

Diluted net
income pershare

Net income
per share
Fiscal year ended
March 31, 2012
March 31, 2011

Yen

99.87
80.19
(Reference) Equity in earnings of affiliates
For the year ended March 31, 2012: ¥118 million
For the year ended March 31, 2011: ¥129 million

Return on
equity (ROE)

Ordinary
income/total
assetsOperatingmargin

Yen

%

%

%

―
―

19.4
17.4

8.9
6.4

7.3
5.3

Equity ratio

Net assets per share(2) Consolidated financial position
Total assets
As ofMarch 31, 2012
March 31, 2011

Net assets

Millions of yen

Millions of yen%

Yen

23,371
21,466

8,108
6,185

34.4
28.5

509.41449.51(Reference) Equity
As of March 31, 2012: ¥8,033 million
As of March 31, 2011: ¥6,125 million

(3) Consolidated cash flows
Net cash provided byoperating activities

Fiscal year ended
March 31, 2012
March 31, 2011

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

568
1,570

(733)
(1,094)

713
(363)

2,078
1,538

2. Cash dividends
Cash dividends per share

Fiscal year ended
March 31, 2011
Fiscal year ended
March 31, 2012
Fiscal year ending
March 31, 2013
(Forecasts)

Total amount ofdividends(annual)Payout ratio(consolidated)

Dividends on net
assets(consolidated)

Yen

Millions of yen

%

%

3.75

7.50

46

4.7

0.6

–

8.00

10.00

151

10.0

2.1

–

6.00

12.00

First
quarter

Secondquarter

Third
quarter

Fiscalyear-end

Yen

Yen

Yen

Yen

–

3.75

–

–

2.00

–

6.00

Annual13.8

Notes: 1. Breakdown of dividends forecast for the March 31, 2012 fiscal year-end: ¥6.00 in ordinary dividend and ¥2.00 incommemorative dividend per share
2. We conducted a stock split on April 1, 2011, at a ratio of two shares of common stock for each one share of common
stock.

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

Six months ending
September 30, 2012
Fiscal year ending
March 31, 2013

Ordinary
incomeNet income
per share

Net income

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

14,000

(2.2)

1,000

(21.0)

1,020(14.0)

660(15.1)

41.85

28,900

4.1

2,070

2.7

2,100

4.9

1,370

(0.4)

86.87

Notes:(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in achange in the scope of consolidation): None
New: None (company name)
Excluded: None (company name)(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: No
d. Restatement of revisions: No(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, 2012
15,770,074 shares
As of March 31, 2011
12,733,874 sharesb. Number of shares of treasury stock at the end of the period
As of March 31, 2012162 shares
As of March 31, 2011
219,006 sharesc. Average number of shares
For the year ended March 31, 2012
For the year ended March 31, 2011

13,496,766 shares
12,515,046 shares

(Note) We conducted a stock split on April 1, 2011, at a ratio of two shares of common stock foreach one share of common stock. However, the figures for the number of shares have been calculatedon the assumption that this stock split was conducted at the beginning of the previous fiscal year.
(Reference) Summary of non-consolidated operating results
1. Non-consolidated financial results for the fiscal year ended March 31, 2012
(from April 1, 2011 to March 31, 2012)(1) Non-consolidated operating results(Percentages indicate year-on-year changes.)
Net sales
Fiscal year ended
March 31, 2012
March 31, 2011

Operating income

Ordinary income

Net income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

20,567
20,532

0.2
6.1

1,371
1,183

15.9
(4.7)

1,407
1,203

17.0
(9.8)

773
770

0.4
―

Net income
per share
Fiscal year ended
March 31, 2012
March 31, 2011

Diluted net income
per share
Yen

Yen

55.22
57.73

―
―

(2) Non-consolidated financial position
Total assets
As ofMarch 31, 2012
March 31, 2011

Net assets

Equity ratio

Net assets per share

Millions of yen

Millions of yen%

Yen

20,714
19,044

8,409
6,690

40.6
35.1

533.24494.66(Reference) Equity
As of March 31, 2012: ¥8,409 million
As of March 31, 2011: ¥6,690 million

2. Non-consolidated financial forecasts for the fiscal year ending March 31, 2013
(from April 1, 2012 to March 31, 2013)(Percentages indicate year-on-year changes.)
Net sales

Six months ending
September 30, 2012
Fiscal year ending
March 31, 2013

Ordinary income

Net income

Net income
per share

Millions ofyen%Millions ofyen%Millions of
yen

%

Yen

10,6501.2

800(13.6)

460(17.1)

29.17

21,580

4.9

1,630

15.8

950

22.8

60.24

* Disclosure of status of audit proceduresThis report falls outside the scope of audit procedures as laid out in the Financial Instruments andExchange Act. As of the time of the release of this report, the audit procedures of the consolidated andnon-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 financial forecasts, contained in these materials are
based on information currently available to us and on certain assumptions deemed to be reasonable.
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 theAnalysis of Operating Results on page 2 of the Attachment Contents to this report.
We conducted a stock split on April 1, 2011, at a ratio of two shares of common stock for each one
share of common stock.

Attachment Contents
1. Results of Operations(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･･････････････ 8(4) Other Important Matters･･････････････････････････････････････････････････････････10
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) Note Concerning Going Concern Assumption ･････････････････････････････････････････20(6) Changes in Significant Accounting Policies Used in Preparation of Consolidated Financial
Statements ････････････････････････････････････････････････････････････････････20(7) Additional Information ･･･････････････････････････････････････････････････････････20(8) Notes to Consolidated Financial Statements(Segment Information) ････････････････････････････････････････････････････････････21(Per Share Information) ････････････････････････････････････････････････････････････26
4. OtherTransfer of Directors and Corporate Auditors････････････････････････････････････････････27

1

1. Results of Operations(1) Analysis of Operating Results1) Operating results for the fiscal year ended March 31, 2012
In the fiscal year ended March 31, 2012, the Japanese economy weakened substantiallyin the first half as a consequence of the Great East Japan Earthquake. On the other hand,the economy showed signs of picking up gradually in the second half as supply chainswere restored, various government policies began having an impact, and personal
consumption strengthened. The economic outlook, however, remained uncertain due toinstabilities such as an abrupt appreciation of the yen and sluggish stock prices
stemming mainly from the European debt problem, damages from the flooding in
Thailand, restricted supplies of electric power in Japan owing to the nuclear power
station accidents, and a sharp rise in oil prices. Overseas, the world was increasingly
polarized into two camps. In contrast to the leading industrial economies either slowing
or stagnating, the global economy was driven by high and sustained growth among the
emerging markets, led by China and followed by other Asian countries including India,
Vietnam and Indonesia.
In this challenging economic environment, the Nitta Gelatin Group has adopted threebasic management policies: (1) Beyond the customers’ expectations; (2) Globalization& innovation; and (3) Focusing and concentration. Guided by these policies, we haveactively worked to develop new products and cultivate new markets while concentratingon providing products and services that satisfy our customers. In the Japanese market,
the Group saw gelatin and food material sales firm as a result of favorable food market
conditions for mainly delicatessen and dessert items in convenience stores andconfectionery, in addition to the disaster-related demand. In contrast, collagen peptide
sales turned sluggish as a consequence of a slack in the Japanese nutritional foodsupplement market and import restrictions on products from Japan imposed by anumber of Asian countries following the earthquake. In markets overseas, sales
performances of Group subsidiaries rose from strong sales, particularly in North
America, of edible gelatin, gelatin for capsules, and collagen sausage casings. In themeantime, the ongoing appreciation of the yen was a mixed blessing. While this worked
against the translation in yen of the Group’s sales gains overseas on a local currency
basis, it contributed to a sizeable reduction in the Group’s cost of goods sold byimproving the yen-denominated price overseas for raw materials procured to produce
gelatin and food material. As a result, in the fiscal year ended March 31, 2012, net sales
were down 0.6% to ¥27,763 million, while operating income increased 35.6% to ¥2,015
2

million, ordinary income increased 44.8% to ¥2,002 million and net income increased
30.8% to ¥1,375 million.
2) Segment business performance(Collagen Material Business)
Demand for gelatin in Japan was strong throughout the fiscal year under review. The
Group experienced strong sales of edible gelatin for both commercial use and home use,
particularly for use in heat-and-serve delicatessen items and chilled desserts inconvenience stores, yogurt and other dairy products, and gummy candy and otherconfectionery applications. By contrast, sales of gelatin capsules remained flat, withcomparatively strong demand for their use in the nutritional food supplement sector
offsetting a slack for their use in the pharmaceutical sector. Meanwhile, photographic
gelatin sales held unchanged from the year before. In overseas markets, demand wasstrong for gelatin capsules in both North America and Asia, with the result our gelatin
exports from Japan were roughly on target. Sales performances of overseas subsidiaries
strengthened, particularly in North America, as a consequence of gelatin prices thatwere revised to the Group’s advantage in the second half.
The March 11 disaster affected collagen peptide demand in Japan and resulted inlackluster sales for the Nitta Gelatin Group as the nutritional food supplement market
softened. Import restrictions on Japanese products that a number of Asian countries
imposed in reaction to the nuclear power station accidents hurt exports to Asia and werealso an obstacle to collagen peptide sales expanding.
Collagen casing sales firmed, on the other hand, buoyed by favorable conditions in
the North American meat packing market and strong demand from Europe.
As a result, net sales in the Collagen Materials were down 2.5% to ¥17,433 million
and segment profit was up 27.2% to ¥2,255 million.
(Formula Solution Business)
Food material sales rose and were undergirded by strong conditions in the Japanesefood market. The Formula Solution Business saw sales of stabilizers for ham, sausage
and other meat products increase, in addition to gelling agents for use in chilled desserts
and ready-made jellies sold in convenience stores.
In adhesives, sales increased for hot melt adhesives for packaging beverages, instantnoodles and confectionary among other applications in the food sector. On the other
hand, sales of hot melt adhesives for bookbinding applications continued to decrease3

due to weak conditions in the publishing sector. Monetary sales of adhesives held steady,however, due to the product pricing revisions the Group imposed in the second half toreflect a sharp increase in the raw material cost of petroleum products and naturalresins.
As a result, net sales in Formula Solution were up 2.9% year on year to ¥10,329
million and segment profit was up 15.8% to ¥1,082 million.
3) Earnings forecasts for the fiscal year ending March 31, 2013
We expect uncertain and challenging conditions to persist in the Japanese economy
amid downsides that include a prolonged appreciation of the yen and spread of deflation,
as well as an increasingly harsh job environment. On the other hand, we also expect
economic development among China, India and the other Asian emerging countries toprovide a powerful driver for the global economy. Market environments are changing
throughout the world on a daily basis as an aging population with a falling birth rate
alters diets and consumption patterns in Japan, even as income improvements notably in
Asia drive consumer markets overseas to expand. Staying on top of the markets as theychange will be an imperative if Nitta Gelatin and its businesses are to develop andachieve sustainable growth in this diversifying environment.
(Collagen Material Business)
To that end, the Collagen Material Business will seek further efficiencies through the
reduction of energy and resources it consumes. Product costs will be reduced to stayinternationally competitive while answering a call from society to downsize the CO2
footprint and respond to supply restrictions in electric power. On the sales front, theCollagen Material Business will provide products that respond to the needs ofcustomers by taking full advantage of its materials development and application
capabilities. The production of collagen peptide in China will undergo full-scale
development for the output to be sold through the local subsidiary, and to center our
expansion of the collagen peptide business on the markets in China and Asia. Anothercollagen peptide plant will be built in North America for production to begin in the year
ending March 2014. Furthermore, the Collagen Material Business will conduct further
research on the functional properties of collagen peptide to actively propose market
applications based on academic evidence of the health benefits. Meanwhile, thecollagen casing business will innovate and revamp the manufacturing process for plantand equipment upgrades at our production facilities in North America, with a view toraising our competitive power in manufacturing. In addition, the Nitta Gelatin Group4

has signed an agreement for establishing a joint venture to also launch the local
manufacturing and sales of collagen sausage casings in China.
(Formula Solution Business)
The food material business will make active use of application laboratories located in
Osaka, Tokyo, North America, China and India to develop products and applications inclose contact with customers and expand sales in partnership with local affiliates andsales agent networks. Meanwhile, the division aims to improve profitability of theadhesive business by redirecting sales of core hot melt adhesive products for
specialization in food and beverage packaging. At the same time, the Group will
promote business expansion in high-performance gaskets, used mainly as a sealant inelectronic equipment and devices.
Based on the business plans described above, the Group projects consolidated net salesof ¥28,900 million (up 4.1% year on year), operating income of ¥2,070 million (up2.7%), ordinary income of ¥2,100 million (up 4.9%) and net income of ¥1,370 million(down 0.4%) for the fiscal year ending March 31, 2013.
(2) Analysis of Financial Position
1) Assets, liabilities and net assets
Total assets amounted to ¥23,371 million at March 31, 2012, ¥1,905 million higher thanat March 31, 2011.
(Current assets)
Current assets rose ¥2,067 million from March 31, 2011 to ¥14,935 million. This was
mainly attributable to a ¥540 million increase in cash and deposits, a ¥827 million
increase in notes and accounts receivable-trade and a ¥600 million increase ininventories.
(Noncurrent assets)
Noncurrent assets decreased ¥162 million from March 31, 2011 to ¥8,436 million atMarch 31, 2012. This was mainly due to a ¥150 million decline in property, plant andequipment.
(Current liabilities)
Current liabilities stood at ¥9,176 million at March 31, 2012, ¥411 million higher than5

at March 31, 2011. This was mainly attributable to a ¥182 million increase in the current
portion of long-term loans payable and an increase of ¥203 million in income taxes
payable.
(Noncurrent liabilities)
Noncurrent liabilities decreased ¥428 million to ¥6,087 million. This was mainly due toa ¥330 million decrease in bonds payable and a ¥124 million decrease in long-termloans payable.
(Net assets)
Net assets increased ¥1,923 million to ¥8,108 million. This was mainly attributable to a
public offering of new shares that resulted in a ¥702 million increase in capital stock
and a ¥720 million increase in capital surplus, and a ¥799 million increase in retained
earnings.
2) Cash flows
Cash and cash equivalents as of March 31, 2012 were ¥2,078 million, up 35.1% fromMarch 31, 2011.
Cash flows for each activity and reasons are as follows.
(Net cash provided by operating activities)
Operating activities provided net cash of ¥568 million, down 63.8% year on year. The
main contributors to cash were ¥1,964 million in income before income taxes andminority interests and ¥841 million in depreciation and amortization. The main
components of cash used were ¥842 million for an increase in notes and accounts
receivable-trade, ¥631 million for an increase in inventories and ¥382 million forincome taxes paid.
(Net cash used in investing activities)
Investing activities used net cash of ¥733 million, compared to ¥1,094 million used in
the previous fiscal year. The main use of cash was ¥673 million for the purchase ofproperty, plant and equipment.
(Net cash provided by financing activities)
Financing activities provided net cash of ¥713 million, compared to ¥363 million used6

in the previous fiscal year. The main contributors to cash were ¥1,404 million inproceeds from the issuance of common stock and ¥101 million in proceeds from thedisposal of treasury stock. The main use of cash was ¥528 million for purchase of own
shares.
(Reference)
Trends in cash flow indicators are as shown below:
Fiscal year ended Fiscal year ended Fiscal year ended
March 31, 2010 March 31, 2011 March 31, 2012
Equity ratio (%)
Market value equity ratio(%)
Interest-bearing debt tocash flow ratio (Years)
Interest coverage ratio(Times)

27.2

28.5

34.4

–

–

34.3

9.7

4.7

12.4

3.8

8.6

3.4

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.
(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.
(3) Medium- to Long-term Management Strategies and Issues Facing theCompany
Just as the Japanese market continues to mature and change structurally as a result of
8the population aging as the birth rate falls, new markets in China, India and Southeast
Asia continue to expand as a result of greater economic development. We recognize that
the Group’s prime mission in business management is to remain on top of markets asthey change and diversify, hone our competitive strengths, and stay ahead globally inpromptly providing customers with the products and services they need.
(Collagen Material Business)
1) Gelatin BusinessThis business will raise Nitta Gelatin’s capacity to supply gelatin by promoting
productivity reforms and improvements among each of the Group’s factories. To secure
the stable procurement of raw materials for producing gelatin, the business will also
strengthen and enhance the raw materials supply chain by both diversifying the source
countries and cultivating new suppliers. The gelatin business, moreover, will endeavor
to develop and market high-performance gelatins that meet customer needs.
2) Peptide BusinessThis business will promote research on the functional properties of collagen peptides todevelop and market high-performance peptides of a superior market quality. Meanwhile,
new collagen peptide markets primarily in the field of cosmetics, and of benefit to bones
and joints, have sprung up and expanded in the China and Asia region. In response tothese changes, our production of collagen peptide in China will undergo full-scale
development in order for us to expand sales in the Chinese and Asian markets throughthe local subsidiary. We will also establish a manufacturing base for collagen peptide in
North America, aimed at bolstering both the supply capacity and cost competitivenessof our collagen peptide products.
3) Casing Business
Manufacturing facilities in North America will be revamped and upgraded to improve
both the productivity and quality of the collagen casings we process, and to strengthen
our cost competitiveness. We will also establish a framework for the manufacture andsale of collagen casings within the fast-growing market in China.
4) Life Science Business
Gelatin and collagen have been in the spotlight as biomaterials amid rapid advances inpractical research in the frontier medical field. The Group is working to spread andexpand the use of ultra-pure gelatin and collagen with high levels of safety among9

medical research institutes and medical device manufacturers, with an eye tocommercializing them as a business going forward.
(Formula Solution Business)
1) Food Material Business
The food material business will mainly make use of our application laboratories toactively develop new products and market recipes for the food sector going forward,
with an aim to expand sales. The business also plans to establish new sales bases inAsia.
2) Adhesives Business
The adhesive business will revamp and upgrade its manufacturing facilities tostrengthen product competitiveness in the core hot-melt adhesives category, and focus
on key markets to expand sales and improve profitability. The business also plans topromote the commercialization of high performance gaskets used mainly as a sealant inelectronic equipment and devices.
(4) Other Important Matters
1) Stock split
At the Board of Directors’ meeting held on February 15, 2011, the Company resolved to
conduct a stock split on April 1, 2011, which was a two-for-one split of common stocks
held by shareholders recorded on the final list of shareholders as of the record date ofMarch 31, 2011.
2) Type A preferred Stock-purchase and retirement
At the Board of Directors’ meeting held on April 27, 2011, the Company resolved topurchase and retire all outstanding 1,000,000 shares of Type A preferred stock of theCompany on May 23, 2011.

10

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

Fiscal 2011
(As of March 31, 2011)

Fiscal 2012
(As of March 31, 2012)

1,558,156
5,621,843
3,500,848
611,779
1,258,039
161,979
167,292(11,556)
12,868,383

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

6,552,993(3,908,269)
2,644,724
7,492,131(6,208,895)
1,283,236
762,414477,487(110,375)
367,111
312,122
1,228,610(1,060,398)
168,2115,537,820

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

20,291
20,291

18,491
18,491

2,082,348
21,837441,215494,791(28)
3,040,164
8,598,276
21,466,660

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

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 2011
(As of March 31, 2011)

Fiscal 2012
(As of March 31, 2012)

3,537,025
1,047,045
1,695,715
260,000
90,4531,251,268
183,972
209,092
490,628
8,765,200

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

530,000
3,386,081
303,286
5,597
2,162,238
32,122
97,0636,516,389
15,281,590

200,000
3,261,365
348,047
16,345
2,158,327
33,772
69,625
6,087,483
15,263,707

875,000
677,7426,090,515(82,522)7,560,736

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

408,627

416,438

2,058(1,180,055)

6,173(1,350,928)(665,803)(903,985)(1,435,173)(1,832,302)

59,507
6,185,070
21,466,660

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

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 2011
(From April 1, 2010
to March 31, 2011)27,923,134
21,597,654

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

Gross profit on sales

6,325,479

6,838,187

Selling, general and administrative expenses

4,838,629

4,822,430

Operating income

1,486,850

2,015,756

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

1,064
13,626
27,834
129,886－
66,345684
17,26628,221
118,501
3,629
59,643

Total non-operating income

238,757

227,945

180,565

167,695
45,588Net sales
Cost of sales

Non-operating expenses
Interest expenses
Public offering expenses
Foreign exchange losses
Other－
89,804
71,824

Total non-operating expenses
Ordinary income
Extraordinary income
Reversal of allowance for doubtful accounts
Gain on abolishment of retirement benefit plan
Gain on transfer of business

342,194

241,134

1,383,413

2,002,567

8,709
140,794－－
15,797－
149,504

Total extraordinary income
Extraordinary losses
Loss on retirement of noncurrent assets
Loss on valuation of golf club memberships
Loss on adjustment for changes of accounting
standard for asset retirement obligations
Impairment loss
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

20,98013－
27,851

15,797－49,355
4,475

1,667

－

15,38738,034
1,494,882
432,618
3,762
436,380
1,058,501
6,829
1,051,672－
53,8301,964,535
568,599
12,611
581,210
1,383,325
7,455
1,375,869

Consolidated Statement of Comprehensive Income(Thousands of yen)

Fiscal 2011
(From April 1, 2010
to March 31, 2011)
1,058,501

Fiscal 2012
(From April 1, 2011
to March 31, 2012)
1,383,325(57,399)

8,060(16,556)

8,136

Foreign currency translation adjustments(458,313)(50,878)

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

442,341(238,181)(105,406)(123,884)(195,334)
863,167(396,747)
986,577

856,337
6,829

978,740
7,837

Income before minority interests
Other comprehensive income
Valuation difference on other available-for-salesecurities
Deferred gains (losses) 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
Effect of changes in accounting policies applied
to overseas equity method affiliates
Reclassification of the amount to adjustment for
pension liability of overseas subsidiaries
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

15

Fiscal 2011
(From April 1, 2010
to March 31, 2011)

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

875,000

875,000－－
875,000

702,121702,121
1,577,121

677,742

677,742－－－
677,742

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

4,593,431

6,090,515(22,868)－

1,108,145－(123,395)
1,051,672(516,469)
411,8076,090,515(48,494)
1,375,869(527,980)
799,394
6,889,910(82,454)(82,522)(516,537)－
516,469(67)(82,522)(528,043)
82,517
527,980
82,453(68)

(Thousands of yen)

Total shareholders’ equity
Balance at the beginning of fiscal year
Effect of changes in accounting policies applied
to overseas equity method affiliates
Reclassification of the amount to adjustment for
pension liability of overseas subsidiaries
Changes during fiscal year
Issuance of new shares
Dividends from surplus
Net income
Purchase of treasury stock
Disposal of treasury stock
Retirement of treasury stock
Total changes during fiscal year
Balance at the end of fiscal year
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 at overseas
subsidiaries
Balance at the beginning of fiscal year
Reclassification of the amount to adjustment for
pension liability of overseas subsidiaries
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 2011
(From April 1, 2010
to March 31, 2011)

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

6,063,719

7,560,736(22,868)－

1,108,145－－(123,395)
1,051,672(516,537)－－
411,739
7,560,736

1,404,242(48,494)
1,375,869(528,043)
101,287－2,304,861
9,865,597

465,231408,627(56,604)

7,810(56,604)
408,627

7,810
416,438

16,491

2,058(14,432)

4,114(14,432)
2,058

4,114
6,173

(613,416)(1,180,055)(566,639)(170,873)(566,639)(1,180,055)(170,873)(1,350,928)－(665,803)(1,108,145)－

442,341(238,181)

442,341(665,803)(238,181)(903,985)

(Thousands of yen)

Total other accumulated comprehensive income
Balance at the beginning of fiscal year
Reclassification of the amount to adjustment for
pension liability of overseas subsidiaries
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
Total net assets
Balance at the beginning of fiscal year
Effect of changes in accounting policies applied
to overseas subsidiaries
Reclassification of the amount to adjustment for
pension liability of overseas subsidiaries
Changes during fiscal year
Issuance of new shares
Dividends from surplus
Net income
Purchase of treasury stock
Disposal of treasury stock
Retirement of treasury stock
Net changes of items other than shareholders’equityTotal changes during fiscal year
Balance at the end of fiscal year

17

Fiscal 2011
(From April 1, 2010
to March 31, 2011)

Fiscal 2012
(From April 1, 2011
to March 31, 2012)(131,693)(1,435,173)(1,108,145)－(195,334)(397,129)(195,334)(1,435,173)(397,129)(1,832,302)

58,55859,507949

15,374949
59,507

15,37474,881

5,990,584

6,185,070(22,868)

－

－

－

－
(123,395)
1,051,672(516,537)－－

1,404,242(48,494)
1,375,869(528,043)
101,287－(194,385)(381,754)

217,354
6,185,070

1,923,106
8,108,176

(4) Consolidated Statements of Cash Flows
Fiscal 2011
(From April 1, 2010
to March 31, 2011)
Cash flows from operating activities
Income before income taxes and minority interests
Depreciation and amortization
Impairment loss
Loss on adjustment for changes of accounting
standard for asset retirement obligations
Decrease in provision for retirement benefits
Increase in provision for directors' retirement benefits
Increase in provision for bonuses
Increase (decrease) in allowance for doubtful
accounts
Interest and dividends income
Interest expenses
Foreign exchange losses
Equity in earnings of affiliates
Loss on retirement of noncurrent assets
Loss on valuation of golf club memberships
Increase in notes and accounts receivable-trade(Increase) decrease in inventories(Decrease) increase 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

18(Thousands of yen)
Fiscal 2012
(From April 1, 2011
to March 31, 2012)

1,494,882
898,491
15,387

1,964,535
841,772
－

1,667

－

(200,280)
1,650
9,791

(165,505)
1,650
25,667(18,853)

4,227(14,691)
180,565
46,481(129,886)
20,980－(509,626)
357,343(17,950)
167,695
12,482(118,501)
49,3554,475(842,653)(631,626)

98,964(50,750)

25,990(187,355)
2,091,502
152,624(183,219)(490,497)
1,570,410

22,544(194,431)
1,072,986
45,530(167,496)(382,809)
568,211

Fiscal 2011
(From April 1, 2010
to March 31, 2011)(Thousands of yen)
Fiscal 2012
(From April 1, 2011
to March 31, 2012)

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 andequipment
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
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 provided by (used in) 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 year19

(20,000)
20,000(946,082)(20,000)
20,000(673,123)

138

7,656

(1,818)(4,615)(149,200)
20,248(11,549)
(350)
5,815
(7,199)(1,094,612)(7,490)(4,718)(28,750)
16,442(10,011)
(300)
5,265
(38,464)(733,495)

102,984(94,968)

1,950,000(1,874,959)(60,000)－

2,047,850(1,987,614)(260,000)
1,404,242－

15,417

233,749(69,477)－(516,537)(123,395)(5,880)(363,516)

183,947(111,803)
101,287(528,043)(48,494)(7,880)713,939(41,803)(8,506)70,476

540,149

1,467,679

1,538,156

1,538,156

2,078,305

(5) Note Concerning Going Concern Assumption
None.
(6) Changes in Significant Accounting Policies Used in Preparation ofConsolidated Financial Statements(Adoption of Accounting Standard for Earnings Per Share, etc.)
Effective the first quarter of the fiscal year ending March 2012, the Company has
adopted the Accounting Standard for Earnings Per Share (ASBJ Statement No. 2, June30, 2010), Guidance on Accounting Standard for Earnings Per Share (ASBJ Guidance
No. 4, June 30, 2010) and Practical Solution on Accounting for Earnings Per Share(ASBJ PITF No. 9, June 30, 2010).
The Company conducted a stock split in the fiscal year under review. Note, however,that the figures for net assets per share and net income per share have been calculated on
the assumption that this stock split was conducted at the beginning of the previous fiscal
year.
The impact of this stock split on the per share information has been recorded in therelevant section.
(7) Additional Information(Adoption of Accounting Standard for Accounting Changes and Error Corrections, etc.)
In regard to any accounting changes and error corrections made on or after the
beginning the fiscal year ended March 2012, the Company has adopted the AccountingStandard for Accounting Changes and Error Corrections (ASBJ Statement No. 24,
December 4, 2009) and the Guidance on Accounting Standard for Accounting Changes
and Error Corrections (ASBJ Guidance No. 24, December 4, 2009).

20

(8) Notes to 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 sausage 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, 2011 (From April 1, 2010 to March 31, 2011)(Thousands of yen)
Adjustments*1

Amounts intheconsolidated
financialstatements*2

27,923,134－

27,923,134－

1,180,901(1,180,901)－

19,063,625
1,773,956
15,399,496

10,040,410
934,919
4,350,669

29,104,036
2,708,875
19,750,166(1,180,901)(1,222,025)
1,716,494

27,923,134
1,486,850
21,466,660

Other items
Depreciation andamortization
Impairment loss

778,551

87,808866,360

32,130898,491－

15,387

15,387－

15,387

Increase in property,
plant and equipment
and intangible assets

935,923

100,543

1,036,467

12,873

1,049,340

Reporting segment

Net sales
Sales to third parties
Inter-segment sales
and transfers
Total
Segment income
Segment assets

Collagenmaterial
business

Formulasolutionbusiness

Total

17,882,723

10,040,410

1,180,901*Notes: 1. Adjustments are as follows:(1) Adjustment for segment income of -¥1,222,025 thousand comprises
elimination of intersegment transactions of ¥7,376 thousand and unallocatedexpenses of ¥1,229,401 thousand. Unallocated expenses are mainly general andadministrative expenses.
(2) Adjustment for segment assets of ¥1,716,494 thousand comprises eliminationof intersegment transactions of -¥432,375 thousand and unallocated assets of¥2,148,870 thousand. Major components of the unallocated assets are theproperty, 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 periodicallyin consolidation by the Company’s highest decision making authority.

22

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 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 periodicallyin consolidation by the Company’s highest decision making authority.

23

b. Related information
Fiscal year ended March 31, 2011 (from April 1, 2010 to March 31, 2011)
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

19,686,358

1,201,559

North America
6,569,723

Other

Total

465,492

27,923,134

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

North America
2,688,099

Total

2,849,720

5,537,820

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, 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

20,037,158

1,082,423

North America
6,255,663

Other387,771

Total
27,763,016

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

24

(2) Property, plant and equipment(Thousands of yen)Japan
2,675,931

Asia

North America
31

2,711,213

Total
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.

c. Information on impairment loss on noncurrent assets by reporting segments
Fiscal year ended March 31, 2011 (from April 1, 2010 to March 31, 2011)
This information is omitted because it is the same as is recorded for segment
information.
Fiscal year ended March 31, 2012 (from April 1, 2011 to March 31, 2012)
No items to reportd. Information on amortization of goodwill and unamortized amounts by reporting
segments
Fiscal year ended March 31, 2011 (from April 1, 2010 to March 31, 2011)
No items to report
Fiscal year ended March 31, 2012 (from April 1, 2011 to March 31, 2012)
No items to report
e. Information on gain on negative goodwill by reporting segment
Fiscal year ended March 31, 2011 (from April 1, 2010 to March 31, 2011)
No items to report
Fiscal year ended March 31, 2012 (from April 1, 2011 to March 31, 2012)
No items to report25

(Per Share Information)

Net assets per share
Net income per share

Fiscal 2011
(From April 1, 2010
to March 31, 2011)¥449.51
80.19

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

Notes: 1. We conducted a stock split on April 1, 2011, at a ratio of two shares ofcommon stock for each one share of common stock. Note, however, thatthe figures for net assets per share and net income per share have been
calculated on the assumption that this stock split was conducted at the
beginning of the previous fiscal year.
Diluted net income per share is not disclosed due to the absence oflatent shares with dilution effect.
(Changes in accounting policies)
Effective from the fiscal year ended March 2012, the Company has
adopted the Accounting Standard for Earnings Per Share (ASBJ Statement
No. 2, June 30, 2010), Guidance on Accounting Standard for Earnings Per
Share (ASBJ Guidance No. 4, June 30, 2010) and Practical Solution on
Accounting for Earnings Per Share (ASBJ PITF No. 9, June 30, 2010).
Based on the adoption of these accounting standards, the figures for net
assets per share and net income per share were calculated on theassumption that the stock split conducted in the fiscal year under review
had taken place at the beginning of the previous fiscal year.
In absence of these accounting standards, the figures for net asset per shareand net income per share for the year ended March 31, 2011 would havebeen as follows.
Net assets per share¥899.02
Net income per share¥160.39
2. Basis for calculating per share is shown below.
Fiscal 2011
(From April 1, 2010
to March 31, 2011)
Net income (Thousands of yen)

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

1,051,672

1,375,869

48,05327,980Net income related to common shares(Thousands of yen)

1,003,619

1,347,889

Average number of common shares during theperiod (shares)

12,515,046

13,496,766

Amounts not attributable to common shareholders(Thousands of yen)26

4. Other
Transfer of Directors and Corporate Auditors (Effective June 27, 2012)
1. Transfer of Representative Directors
No items to report
2. Transfer of other Directors
1) New board director candidates
Director

Koichi Ogata

Currently Executive Officer, General
Manager of R&D Dept.

Director

Tatsuro Otsuka

Currently General Manager of Corporate
Planning Div.

2) Board directors scheduled to resign
Director

Tadao Kawamura

Director

Masahiro Morimura

3) New statutory auditor candidates
Outside Statutory Shigeoki Tougou

Currently Supervisory Operating

AuditorOfficer, Nippon RAD Inc.

4) Statutory adutitor scheduled to resign
Outside Statutory Nobumasa Fujimitsu
AuditorThe appointment of members of the Board of Directors and Statutory Auditors will bedecided formally following the approval of the Ordinary General Shareholders’ Meeting
to be held on June 27, 2012.
This transfer of directors and corporate auditors was announced on March 21, 2012.

27