May 11, 2015

Consolidated Financial Results
for the Fiscal Year Ended March 31, 2015
(Japanese Accounting Standards)
Name of the Listed Company: Nitta Gelatin Inc.
Listing:First Section of Tokyo Stock Exchange
Stock code:
4977
URL:
http://www.nitta-gelatin.co.jp
Representative:
Koichi Ogata, Representative Director and President
Contact Person:
Tsuneo Sasaki, Director and Senior Managing Executive Officer;
General Manager of the General Administration Division
Tel: +81-72-949-5381
Scheduled date of General Shareholders’ Meeting: June 25, 2015
Scheduled date to file Securities Report:
June 25, 2015
Scheduled date to commence dividend payments:

June 26, 2015

Supplementary explanatory materials prepared:
Explanatory meeting:Yes
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, 2015
(from April 1, 2014 to March 31, 2015)(1) Consolidated operating results(Percentages indicate year-on-year changes.)
Net sales
Fiscal year ended
March 31, 2015
March 31, 2014

Operating income

Ordinary income

Net income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

31,91432,814

(2.7)
14.0

392
955

(58.9)(40.1)

967
1,115(13.2)(43.6)

610
665

(8.3)
(56.4)(Note) Comprehensive income
For the year ended March 31, 2015: ¥1,530 million (24.8%)
For the year ended March 31, 2014: ¥1,227 million (-35.9%)

Fiscal year ended
March 31, 2015
March 31, 2014

Net income
per share

Diluted net
income per
share

Return on
equity (ROE)

Ordinary
income/Total
assets

Yen

Yen

%

%

Operatingmargin
%

33.20
4.2
3.0
5.7
3.9
37.90
(Reference) Equity in earnings of affiliates
For the year ended March 31, 2015: ¥112 million
For the year ended March 31, 2014: ¥97 million
Note: Diluted net income per share is not disclosed due to the absence of latent shares with dilution effect.

1.2
2.9

(2) Consolidated financial position
Total assets
As ofMarch 31, 2015
March 31, 2014

Net assets

Equity ratio

Net assets per share

Millions of yen

Millions of yen%

33,932
31,38915,373
13,781

45.0
43.4(Reference) Equity
As of March 31, 2015: ¥15,271 million
As of March 31, 2014: ¥13,636 million

Yen

831.15742.20(3) Consolidated cash flows

Net cash provided by(used in) operating
activities

Net cash used ininvesting activities

Net cash provided by(used in) financing
activities

Cash andcash equivalents
at end of year

Millions of yen

Millions of yen

Millions of yen

Millions of yen

2,074
(692)

(2,505)(3,105)544
3,875

Fiscal year ended
March 31, 2015
March 31, 2014

2,602
2,406

2. Cash dividends
Cash dividends per share

Fiscal year ended
March 31, 2014
Fiscal year ended
March 31, 2015
Fiscal year ending
March 31, 2016
(Forecasts)

AnnualTotal amount ofdividends(annual)Payout ratio(consolidated)

Dividends on net
assets(consolidated)

Yen

Yen

Millions of yen

%

%

-

6.00

12.00

220

31.7

1.8

6.00

-

6.00

12.00

220

31.6

1.5

6.00

-

6.00

12.00

First
quarter

Secondquarter

Third
quarter

Fiscalyear-end

Yen

Yen

Yen

-

6.00

-

110.2

3. Consolidated financial forecasts for the fiscal year ending March 31, 2016
(from April 1, 2015 to March 31, 2016)(Percentages indicate year-on-year changes.)
OperatingincomeNet sales
Six months ending
September 30, 2015
Fiscal year ending
March 31, 2016

Ordinary
incomeNet income
per share

Net income

Millionsof yen%Millionsof yen%Millionsof yen%18,800

16.4

600

122.1

500

38,100

19.4

1,400

256.5

1,100

Millionsof yen

%

Yen

(6.3)

(300) (180.5)(16.33)

13.7

200

10.89

(67.2)

Notes:(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in achange in the scope of consolidation): No
New:
None
Excluded: None
(2) Changes in accounting policies, changes in accounting estimates, and restatement of revisions
a. Changes in accounting policies due to revisions to accounting standards and other guidelines: Yes
b. Changes in accounting policies due to reasons other than a. above: No
c. Changes in accounting estimates: No
d. Restatement of revisions: No(Note) For details, please refer to “(5) Notes to Consolidated Financial Statements (Changes in
Accounting Policies)” in “4. Consolidated Financial Statements” on page 19 of the Attachment to thisreport.
(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, 2015
18,373,974 shares
As of March 31, 2014
18,373,974 sharesb. Number of shares of treasury stock at the end of the period
As of March 31, 2015
162 shares
As of March 31, 2014
162 sharesc. Average number of shares
For the year ended March 31, 2015
For the year ended March 31, 2014

18,373,812 shares
17,556,927 shares

(Reference) Summary of non-consolidated operating results
1. Non-consolidated financial results for the fiscal year ended March 31, 2015
(from April 1, 2014 to March 31, 2015)(1) Non-consolidated operating results(Percentages indicate year-on-year changes.)
Net sales
Fiscal year ended
March 31, 2015
March 31, 2014

Operating income

Net income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

21,872
22,159

(1.3)
9.4

377
684

(44.9)(24.8)

1,213
1,020

19.0
(21.2)

816
713

14.5
(18.4)Net income
per share
Fiscal year ended
March 31, 2015
March 31, 2014

Ordinary income

Diluted net income
per share

Yen

Yen

44.44
40.63
Note: Diluted net income per share is not disclosed due to the absence of latent shares with dilution effect.

(2) Non-consolidated financial position
Total assets
As ofMarch 31, 2015
March 31, 2014

Net assets

Equity ratio

Net assets per share

Millions of yen

Millions of yen%

Yen

26,66425,196

14,28012,86853.6
51.1

777.21700.35(Reference) Equity
As of March 31, 2015: ¥14,280 million
As of March 31, 2014: ¥12,868 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.

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. Basic Approach to Selection of Accounting Standard･･･････････････････････････････････ 10
4. Consolidated Financial Statements(1) Consolidated Balance Sheets･････････････････････････････････････････････････････ 11(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income････････････････････････････････････････････････ 13
Consolidated Statements of Comprehensive Income･･･････････････････････････････････ 14(3) Consolidated Statements of Changes in Net Assets････････････････････････････････････ 15(4) Consolidated Statements of Cash Flows･････････････････････････････････････････････ 17(5) Notes to Consolidated Financial Statements･･････････････････････････････････････････ 19(Note Concerning Going Concern Assumption) ････････････････････････････････････ 19(Changes in Accounting Policies)････････････････････････････････････････････････ 19(Additional Information)･･･････････････････････････････････････････････････････ 20(Segment Information)･････････････････････････････････････････････････････････ 21(Per Share Information) ･･･････････････････････････････････････････････････････ 26(Subsequent Events) ･･････････････････････････････････････････････････････････ 26
4. OtherTransfer of Directors and Corporate Auditors････････････････････････････････････････････ 28

11. Analysis of Operating Results and Financial Position(1) Analysis of Operating Results1) Operating results for the fiscal year ended March 31, 2015
In the fiscal year ended March 31, 2015, the outlook for the global economy was
uncertain, despite an ongoing recovery in the U.S. business climate. This outlook
reflected the fact that the European economy has yet to start recovering in earnest, alongwith slowing growth in emerging countries such as China and Southeast Asian nations.
Meanwhile, Japan’s economy showed a gradual recovery trend, due partly to an
improvement in corporate and individual incomes supported by economic policies andquantitative and qualitative monetary easing. This was despite a downturn in demandfollowing an increase in the consumption tax in April 2014 and the yen’s sharp
depreciation.
Amid these circumstances, the Nitta Gelatin Group encountered very challenging
business conditions, including increased overseas prices of raw materials, a temporary
decline in demand in overseas markets, rising energy costs in Japan, and continuing
high import procurement costs due to the yen’s depreciation.
As a result, in the fiscal year ended March 2015, net sales decreased 2.7% year on
year to ¥31,914 million. In Japan, the Group revised prices, but this was outweighed byrising raw material and procurement costs reflecting the yen’s depreciation.
Consequently, operating income fell 58.9% to ¥392 million. Ordinary income declinedby 13.2% to ¥967 million, cushioned by foreign exchange gains, and net income
decreased 8.3% to ¥610 million.
2) Segment business performance(Collagen Material Business)
In the gelatin field, sales of edible gelatin and capsule gelatin in Japan increased, butearnings declined as raw materials prices remained high and price revisions were unable
to mitigate the yen’s depreciation. In North America, capsule gelatin sales declined as
negative reports regarding fish oil in the U.S. sparked a temporary contraction in the
supplement market, while earnings decreased, partly due to higher raw material prices
for pig skin.
Consequently, in the gelatin field, sales increased partly due to the impact of the
yen’s depreciation, but earnings decreased.
Collagen peptide sales decreased overall, as the Japanese market was unable to2

dispel a slump in consumer sentiment following the increase in the consumption tax inApril 2014, despite brisk sales in the Asian region.
Collagen casing sales and earnings increased, due to steady sales in the North
American markets.
As a result, net sales for the segment were up 2.3% year on year to ¥22,959 million
and segment profit (operating income) was down 22.4% to ¥1,101 million.
(Formula Solution Business)
Sales of food materials decreased on lackluster trends in food stabilizers due to reduced
demand accompanying the consumption tax hike in April 2014 and unseasonable
summer weather.
In adhesives, there was a large decline in sales of hot-melt adhesives for use inhygiene products due to the shift of production to China, in addition to sluggish sales of
hot-melt adhesives for use in packaging and bookbinding. Meanwhile, sales of sealants(high-performance gaskets) saw sluggish growth because although their delivery for use
in smartphones and smart watches has begun, these products have yet to be adopted bycustomers on a full scale.
As a result, net sales in the segment were down 13.7% year on year to ¥8,955
million. Segment profit (operating income) was down 29.6% to ¥647 million.
3) Earnings forecasts for the fiscal year ending March 31, 2016
(Business Forecasts for the Fiscal Year Ending March 31, 2016)
Nitta Gelatin had formulated a three-year medium-term management plan
beginning in the fiscal year ended March 31, 2014. Under the plan, the Company hadtargeted consolidated net sales of ¥41.0 billion and consolidated operating income of¥4.2 billion for the plan’s final fiscal year, the fiscal year ending March 31, 2016.
However, the yen’s depreciation has persisted and there have been drastic changes in the
Company’s assumptions for the business environment, such as market conditions inNorth America. For these reasons, the Company has decided to discontinue its
medium-term management plan in the plan’s second year.
The Company is positioning the year ending March 31, 2016 as a year for restoring
earnings. Accordingly, the Company’s top priority will be to secure adequate profit
margins on products sold in the Japanese market. To this end, the Company will
implement rigorous cost-cutting measures such as conducting production and sales in3

optimal regions and reducing raw materials costs.
Meanwhile, in Japan, deregulation related to BSE and functional labeling of foods
is expected to breathe new life into the Company’s markets. Furthermore, Asia is seeing
growing demand for gelatin, collagen peptide, collagen casing and sealants. Eyeing thisdemand, the Company will work to expand sales globally, centered on Asia.
With regard to capital investment, the Company will actively invest in projects thatrealize high-value added products and services in Japan. Overseas, the Company will
actively invest in projects aimed at enhancing productivity.
In conjunction with the conversion of equity-method affiliate Nitta Gelatin India
Ltd. (NGIL) into a consolidated subsidiary on April 1, 2015 (effective acquisition date),
the Company plans to record a charge of ¥620 million on the difference between the
carrying amount and the fair value of NGIL at the time of consolidation as an
extraordinary loss.
Based on the aforementioned assumptions, the Company’s consolidated business
forecasts for the fiscal year ending March 31, 2016 are as follows:(millions of yen)
Forecasts

Year on year

Net sales

38,100+19.4%

Operating income

1,400+256.5%

Ordinary income

1,100+13.7%Net profit attributable toowners of the Parent

200(67.2%)

4

(2) Analysis of Financial Position
1) Assets, liabilities and net assets(Assets)
Total assets amounted to ¥33,932 million at March 31, 2015, ¥2,542 million higher thanat March 31, 2014. This was mainly attributable to a ¥579 million increase ininventories including merchandise and finished goods, a ¥2,044 million increase inproperty, plant and equipment in line with the renewal of an adhesives office and alaboratory, and the construction of a collagen peptide plant at Nitta Gelatin USA, Inc.,and a ¥908 million increase in investment securities due to the higher fair value of
securities. These increases were partly offset by a ¥1,438 million decrease in notes andaccounts receivable-trade owing to the securitization of receivables.
(Liabilities)
Total liabilities stood at ¥18,558 million at March 31, 2015, ¥949 million higher than at
March 31, 2014. This was mainly due to a ¥583 million increase in short-term loans
payable, a ¥646 million increase in long-term loans payable (current portion included),
and a ¥185 million increase in deferred tax liabilities. These increases were partly offset
by a ¥486 million decrease in notes and accounts payable-trade.
(Net assets)
Net assets stood at ¥15,373 million at March 31, 2015, ¥1,592 million higher than at
March 31, 2014. This was mainly attributable to a ¥688 million increase in retained
earnings, a ¥498 million increase in valuation difference on other available-for-salesecurities, and an increase of ¥788 million in foreign currency translation adjustments.
These increases were partly offset by a decrease of ¥379 million in remeasurements ofdefined benefit plans.
As a result, the equity ratio stood at 45.0% at March 31, 2015 compared with
43.4% at March 31, 2014.
2) Cash flows
Cash and cash equivalents (“cash”) as of March 31, 2015 was ¥2,602 million, up ¥196
million from March 31, 2014.
Cash flows for each activity and reasons are as follows.

5

(Net cash used in operating activities)
Operating activities provided net cash of ¥2,074 million. The main contributing factors
were income before income taxes and minority interests of ¥933 million, depreciation
and amortization of ¥1,115 million and decrease in notes and accounts receivable-tradeof ¥1,740 million. The main component of cash used was decrease in notes andaccounts payable-trade of ¥802 million.
(Net cash used in investing activities)
Investing activities used net cash of ¥2,505 million. The main use of cash was ¥2,449
million for the purchase of property, plant and equipment.
(Net cash provided by financing activities)
Financing activities provided net cash of ¥544 million. The main contributors to cash
were proceeds from long-term loans payable of ¥2,495 million and net increase in
short-term loans payable of ¥454 million. The main use of cash was ¥2,147 million in
repayment of long-term loans payable.
(Reference)
Trends in cash flow indicators are as shown below:
Fiscal year ended

Fiscal year ended

Fiscal year ended

Fiscal year ended

Fiscal year ended

March 31, 2011 March 31, 2012 March 31, 2013 March 31, 2014 March 31, 2015

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

28.5

34.4

38.0

43.4

45.0

–

34.3

80.6

61.3

44.1

4.7

12.4

3.4

(11.8)

4.5

8.6

3.4

13.8

(5.2)

13.6

Equity ratio: equity / total assets
Market value equity ratio: market capitalization / total assets
Interest-bearing debt to cash flow ratio: interest-bearing debt / cash flow
Interest coverage ratio: cash flow / paid interest

6Notes: 1. All indicators are calculated using consolidated financial figures.
2. Market capitalization is calculated based on the number of issued shares,
excluding treasury stock, as of the end of the fiscal year.
3. The figure used for cash flow is “net cash provided by operating activities” on the
consolidated statements of cash flows.
4. Interest-bearing debt includes all liabilities recorded on the consolidated balance
sheets on which interest was paid. Furthermore, regarding the paid interest, we
use “interest expenses paid” recorded on the consolidated statements of cash
flows.

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 and8improving productivity to remain competitive as a manufacturer.
(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.
Recognizing this, Nitta Gelatin has formulated a new slogan, “Advancing to the
Next Stage with a Fresh Perspective.” Guided by its basic strategy of “Pursue Quality,”
the Company will enhance quality in all aspects of its business operations, including
products, sales, production and quality assurance. Moreover, the Company will
implement three strategic priorities: (1) Develop high value-added products, (2) Ensure
optimal production, optimal sales and (3) Strengthen global business foundations. By
achieving these priorities, Nitta Gelatin will create new value, increase earnings andenhance its corporate value, with the aim of continuously contributing to society into
the future.
The Company currently faces a challenging business environment consideringfactors such as the higher cost of sales driven by the yen’s depreciation, higher raw
materials prices, and rising energy costs in Japan. Guided by the business strategies set
out below, the Company will strive to achieve its top priority of restoring earnings.
(Collagen Material Business)
In the gelatin field, Nitta Gelatin plans to strengthen competitiveness by achieving
global cost competitiveness through energy savings, increased production efficiency anda strengthened supply chain of raw materials. In addition, the Company will sell the
products of its Group companies in growing markets and optimal regions.
In collagen peptide, Nitta Gelatin will open up highly profitable new markets bylaunching products featuring enhanced functional properties. Following the start ofproduction in the U.S., we will expand our business globally in the Japanese and North
American markets.
In collagen casings, we intend to enhance our sales and earnings by increasing
productivity at our manufacturing facilities in North America and by upgrading our
production and sales framework in China.
In the life science field, based on research and development activities focused on9materials for use in research and medicine, Nitta Gelatin will popularize the applicationof these materials in the field of regenerative medicine, as it works to nurture futurebusiness.
(Formula Solution Business)
In the food material business, Nitta Gelatin will increase earnings by providing foodsolutions globally. This will be done by developing products for the global market bystrengthening the functions of its application laboratories in Japan and various regions.
In the adhesives field, Nitta Gelatin will pursue research and development andproduction of sealants (high-performance gaskets) at a newly completed developmentbuilding, as we nurture sealants into a viable business. At the same time, the Company
will strengthen the cost competitiveness of hot-melt adhesives.
3. Basic Approach to Selection of Accounting Standard
The Nitta Gelatin Group plans to prepare its consolidated financial statements based onJapanese accounting standards in the near future. This is in consideration of the need toensure that the consolidated financial statements can be readily compared between
different periods and different companies.
Looking ahead, considering its management policies and various conditions inJapan and abroad, Nitta Gelatin plans to examine the adoption of International Financial
Reporting Standards (IFRS). In doing so, the Company will take into account trends
such as the adoption of IFRS by its peer companies.

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

Fiscal 2014
(As of March 31, 2014)

Fiscal 2015
(As of March 31, 2015)

2,426,006
8,164,776
4,732,050
1,089,542
1,820,812
158,974
306,558(13,339)
18,685,381

2,622,593
6,726,750
4,821,889
1,243,868
2,156,217
139,994
330,299(2,649)18,038,964

7,564,325(4,749,184)
2,815,141
9,841,487(7,702,186)
2,139,301
768,167
1,136,742(476,051)
660,6902,260,999
1,316,976(1,156,989)
159,9878,804,286

9,700,653(5,285,734)
4,414,919
13,028,262(8,637,616)
4,390,646
781,069
1,195,418(544,389)
651,028
435,353
1,339,817(1,164,351)
175,465
10,848,484

50,79550,79569,712
69,712

3,075,772
8,997
399,428
253,111
113,990(2,111)
3,849,189
12,704,270
31,389,652

3,984,770
5,252
185,805
689,111
109,979(8)4,974,908
15,893,105
33,932,069

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Deferred tax assets
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
Land
Lease assets
Accumulated depreciation
Lease assets, net
Construction in process
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Deferred tax assets
Net defined benefit asset
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets

11

(Thousands of yen)

Fiscal 2014
(As of March 31, 2014)

Fiscal 2015
(As of March 31, 2015)

4,255,505
1,121,491
1,932,912
215,598
1,747,879
147,730
177,916
481,346
10,080,381

3,768,598
1,705,226
2,127,768
232,206
1,435,350
206,077
173,672
626,093
10,274,994

4,415,868
495,768
4,501
2,524,417
37,07250,6007,528,227
17,608,608

4,867,635
475,185
189,804
2,661,404
38,72250,6008,283,370
18,558,364

3,144,929
2,966,442
8,623,463(68)
14,734,766

3,144,929
2,966,442
9,312,118(68)
15,423,421

622,837

1,121,524(5,110)(187,061)(1,528,458)

33,194
601,251(1,908,078)(1,097,792)(152,107)

144,069
13,781,043
31,389,652

102,390
15,373,704
33,932,069

Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of long-term loans payable
Lease obligations
Accounts payable-other
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Noncurrent liabilities
Long-term loans payable
Lease obligations
Deferred tax liabilities
Net defined benefit liability
Provision for directors' retirement benefits
Other
Total noncurrent liabilities
Total liabilities
Net Assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on otheravailable-for-sale securities
Deferred gains on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive
incomeMinority interests
Total net assets
Total liabilities and net assets

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

Fiscal 2014
(From April 1, 2013
to March 31, 2014)
32,814,056
26,329,988

Fiscal 2015
(From April 1, 2014
to March 31, 2015)
31,914,983
25,944,411

Gross profit on sales

6,484,068

5,970,572

Selling, general and administrative expenses

Net sales
Cost of sales

5,528,497

5,577,915

Operating income

955,571392,656

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

4,790
19,64935,144
97,018
166,41245,299812
23,89436,264112,473
578,836
53,098

Total non-operating income

368,315805,379

133,865
23,38537,627
13,761

151,575

208,640

230,341

1,115,245

967,694

89,079－89,079－29,985104,278
134,263
1,070,062
350,892
67,504
418,397
651,665(13,824)
665,490

34,470－34,470933,223
376,869(23,810)353,059
580,163(29,904)
610,067

Non-operating expenses
Interest expenses
Public offering expenses
Commissions paid
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Guarantees received
Total extraordinary income
Extraordinary losses
Loss on retirement of noncurrent assets
Loss on change in equity
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 (loss)
Net income

13－
66,953
11,812

Consolidated Statements of Comprehensive Income(Thousands of yen)

Fiscal 2014
(From April 1, 2013
to March 31, 2014)
651,665

Fiscal 2015
(From April 1, 2014
to March 31, 2015)
580,163

123,050

498,465(30,416)

18,721

Foreign currency translation adjustments

388,414638,673

Pension liability adjustment of foreignsubsidiaries(11,620)－－(370,549)

105,920

165,468

575,348
1,227,013

950,770
1,530,934

1,224,443
2,569

1,555,752(24,818)

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

Remeasurements of defined benefit plans
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 interests14(3) Consolidated Statements of Changes in Net Assets
Fiscal 2014(From April 1, 2013 to March 31, 2014)(Thousands of yen)
Shareholders’ equity
Capital stock
Balance at the beginning of fiscal
year
Cumulative effect of changes inaccounting policies
Balance at the beginning of year
after reflecting changes inaccounting policies

Capital surplus

Retained earnings

1,398,633

8,194,375

1,577,121

Total shareholders’equityTreasury stock(68)

11,170,062－

1,577,121

1,398,633

1,567,808

1,567,808

8,194,375(68)

11,170,062

Changes during fiscal year
Issuance of new shares

3,135,616

Dividends from surplus(236,402)(236,402)

Net income

665,490

665,490

Net changes of items other thanshareholders’ equity
Total changes during fiscal year
Balance at the end of fiscal year－
1,567,808
3,144,929

1,567,808

429,087－3,564,704

2,966,442

8,623,463(68)

14,734,766

Other accumulated comprehensive income
Valuationdifferenceonavailable-for-sale
securities

Balance at the beginning of fiscal year
Cumulative effect of changes inaccounting policies
Balance at the beginning of year afterreflecting changes in accounting
policies

499,868

Deferred
gains orlosses onhedges27,858Foreigncurrencytranslation
adjustment

Remeasurements ofdefinedbenefit plans

Pensionliability
adjustmentof foreignsubsidiaries

Total otheraccumulatedcomprehensi
ve income(667,634)－(1,452,870)(1,592,778)

Minority
interests

Total net
assets147,379

9,724,663－

499,868

27,858(667,634)－(1,452,870)(1,592,778)

147,379

9,724,663

Changes during fiscal year
Issuance of new shares－

3,135,616

Dividends from surplus－(236,402)

Net income－

665,490

Net changes of items other thanshareholders’ equity

122,968(32,968)

480,573(1,528,458)

1,452,870

494,985(3,310)491,675

Total changes during fiscal year

122,968(32,968)

480,573(1,528,458)

1,452,870

494,985(3,310)4,056,379

Balance at the end of fiscal year

622,837(5,110)(187,061)(1,528,458)－(1,097,792)

144,069

13,781,043

15

Fiscal 2015(From April 1, 2014to March 31, 2015)(Thousands of yen)
Shareholders’ equity
Capital stock
Balance at the beginning of fiscal
year
Cumulative effect of changes inaccounting policies
Balance at the beginning of year
after reflecting changes inaccounting policies

Capital surplus

3,144,929

2,966,442

Retained earnings

Total shareholders’equityTreasury stock

8,623,463(68)

14,734,766

299,073
3,144,929

2,966,442

299,073

8,922,536(68)

15,033,839

Changes during fiscal year－

Issuance of new shares
Dividends from surplus(220,485)(220,485)

Net income

610,067

610,067

Net changes of items other thanshareholders’ equity－

Total changes during fiscal year－－

389,581－389,581

Balance at the end of fiscal year

3,144,929

2,966,442

9,312,118(68)

15,423,421

Other accumulated comprehensive income
Valuationdifferenceonavailable-for-sale
securities

Balance at the beginning of fiscal year
Cumulative effect of changes inaccounting policies
Balance at the beginning of year afterreflecting changes in accounting
policies

622,837

Deferred
gains orlosses onhedges(5,110)Foreigncurrencytranslation
adjustment

Remeasurements ofdefinedbenefit plans(187,061) (1,528,458)

Pensionliability
adjustmentof foreignsubsidiaries

Total otheraccumulatedcomprehensi
ve income－ (1,097,792)

Minority
interests

144,069－
622,837(5,110)(187,061) (1,528,458)－ (1,097,792)

Total net
assets13,781,043
299,073

144,069

14,080,116

Changes during fiscal year
Issuance of new shares－－

Dividends from surplus－(220,485)

Net income－

610,067

Net changes of items other thanshareholders’ equity

498,687

38,304

788,312(379,620)－

945,685(41,678)

904,006

Total changes during fiscal year

498,687

38,304

788,312(379,620)－

945,685(41,678)

1,293,588

Balance at the end of fiscal year

1,121,524

33,194

601,251 (1,908,078)－(152,107)

102,390

15,373,704

16

(4) Consolidated Statements of Cash Flows

Cash flows from operating activities
Income before income taxes and minority interests
Depreciation and amortization
Increase in provision for directors' retirement benefits(Decrease) increase in provision for bonuses
Increase (decrease) in allowance for doubtful
accounts
Increase (decrease) in net defined benefit liability
Interest and dividends income
Interest expenses
Foreign exchange (gains) losses
Equity in earnings of affiliates
Loss on retirement of noncurrent assets
Loss (gain) on change in equity
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 (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase 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
Other, net
Net cash used in investing activities

17

Fiscal 2014
(From April 1, 2013
to March 31, 2014)(Thousands of yen)
Fiscal 2015
(From April 1, 2014
to March 31, 2015)

1,070,062
914,0141,650(46,885)

933,223
1,115,662
1,650(8,357)(2,979)(13,065)(27,814)(24,440)
133,865(35,170)(97,018)
29,985104,278

9,823(24,706)
151,575(267,108)(112,473)
34,470－(2,147,017)

1,740,171(624,983)(308,160)

324,513(802,657)(52,417)88,867(391,490)
134,220(134,451)(301,162)

117,203(125,328)
2,441,923
106,308(152,683)(321,402)(692,883)

2,074,146(20,000)
20,000(2,949,907)(12,271)(6,576)(142,136)
15,599(4,993)(5,018)(3,105,304)(20,000)
20,000(2,449,848)(30,170)(6,622)－－(2,928)(15,902)(2,505,472)

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 sale-and-leaseback transactions
Repayments of lease obligations
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

18

Fiscal 2014
(From April 1, 2013
to March 31, 2014)(Thousands of yen)
Fiscal 2015
(From April 1, 2014
to March 31, 2015)(91,377)454,976

3,222,449(2,165,372)(200,000)
3,135,616
432,475(216,341)(236,402)(5,880)3,875,166

2,495,045(2,147,466)－－
214,288(235,255)(220,485)(16,860)
544,242

70,36883,671

147,346

196,5872,258,659

2,406,006

2,406,006

2,602,593

(5) Notes to Consolidated Financial Statements(Note Concerning Going Concern Assumption)
None.
(Changes in Accounting Policies)(Application of Accounting Standard for Retirement Benefits, etc.)
With regard to Accounting Standard for Retirement Benefits (Accounting Standards
Board of Japan (ASBJ) Statement No. 26, May 17, 2012; the “Retirement Benefit
Accounting Standard”) and Guidance on Accounting Standard for Retirement Benefits(ASBJ Guidance No. 25, May 17, 2012; the “Retirement Benefit Accounting
Guidance”), the Company has adopted the stipulations of the body text of Article 35 of
the Retirement Benefit Accounting Standard and the body text of Article 67 of the
Retirement Benefit Accounting Guidance from April 1, 2014. As a result, the Company
revised its calculation method of retirement benefit obligations and service costs, andchanged its method for attributing estimated retirement benefits to accounting periods
from the straight line method to the benefit formula method. At the same time, themethod for determining the discount rate was changed to apply a single
weighted-average discount rate reflecting the estimated period of benefit payments andamounts to be paid in each period. Formerly, this discount rate was based on a close
approximation of the number of years the Company’s employees had on average until
retirement.
In accordance with the transitional treatment stipulated by Article 37 of the
Retirement Benefit Accounting Standard, as of April 1, 2014, the amounts that
correspond to the effect of the change in the calculation method of retirement benefit
obligations and service costs were added to, or deducted from, the starting balance ofretained earnings for the fiscal year ended March 31, 2015.
As a result, the Company marked down the starting balance of net defined benefit
liability by ¥238,882 thousand, marked up net defined benefit asset by ¥225,805
thousand, and marked up retained earnings by ¥299,073 thousand for the fiscal year
ended March 31, 2015. This change will have only a negligible impact on operating
income, ordinary income and income before income taxes and minority interests for the
fiscal year ended March 31, 2015.

19

(Additional Information)
Restatement of amounts of deferred tax assets and deferred tax liabilities due to changes
in the corporate income tax rate, etc.
Following the promulgation of the “Act for Partial Revision of the Income Tax
Act” (Act No. 9, 2015) on March 31, 2015, the corporate income tax rate, etc. will be
reduced from fiscal years beginning on or after April 1, 2015, among other revisions. Inline with this change, the statutory income tax rate used to calculate deferred tax assets
and deferred tax liabilities for temporary differences expected to reverse in the fiscal
year beginning on April 1, 2015 has been reduced from the previous 35.6% to 33.1%,
and for temporary differences expected to reverse in the fiscal years beginning on April
1, 2016, has been reduced to 32.3%.
As a result of these changes in the tax rate, the amount of deferred tax liabilities(less the amount of deferred tax assets) was reduced by ¥7,513 thousand, while income
taxes-deferred increased by ¥51,535 thousand, valuation difference on otheravailable-for-sale securities increased by ¥54,486 million, deferred gains (losses) onhedges increased by ¥516 thousand, and remeasurements of defined benefit plansincreased by ¥4,045 thousand.

20

(Segment Information)a. Segment information
1 Overview of reporting segments
The Company’s reporting segments are the compositional units of the Company forwhich separate financial information is available. They are periodically examined by the
Board of Directors for the purpose of deciding on allocation of management resourcesand evaluating business results.
The Company formulates a comprehensive worldwide strategy for the products andservices it handles and conducts business activities based on operations that are divided
along product and service lines.
As a result, the Company is composed of product and service segments based on
business activity, with two reporting segments: “Collagen Material” and “Formula
Solution.”
In Collagen Material Business, the Company manufactures gelatin, collagen
peptide, collagen casings and other products.
In Formula Solution Business, the Company manufactures various food materials,
adhesives and other products.
2 Calculation methods for net sales, income and loss, assets and other items byreporting segment
The accounting methods used for the reported business segments are the same as theaccounting methods the Company applies for consolidated financial reporting purposes.
Segment income for reporting segments represents operating income.
Intersegment sales and transactions are based on prevailing market prices.
3 Information on net sales, income and loss, assets and other items by reporting
segment

21

Fiscal year ended March 31, 2014(From April 1, 2013to March 31, 2014)
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(Thousands of yen)Amounts intheAdjustments*1 consolidated
financialstatements*2

Collagenmaterial
business

Formulasolutionbusiness

Total

22,436,889

10,377,166

32,814,056－

32,814,056

1,487,018－

1,487,018(1,487,018)－

23,923,908
1,420,131

10,377,166
920,247

34,301,074
2,340,378(1,487,018)(1,384,807)

32,814,056
955,571

23,327,011

5,791,521

29,118,533

2,271,118

31,389,652

808,491

70,273878,765

35,249914,0142,845,204

229,847

3,075,051

27,364

3,102,415*Notes: 1. Adjustments are as follows:(1) Adjustment for segment income of (¥1,384,807) thousand comprises elimination ofintersegment transactions of ¥3,131 thousand and unallocated expenses of(¥1,387,939) thousand. Unallocated expenses are mainly general and administrative
expenses.
(2) Adjustment for segment assets of ¥2,271,118 thousand comprises elimination ofintersegment transactions of (¥567,877) thousand and unallocated assets of¥2,838,996 thousand. Major components of the unallocated assets are cash anddeposits, property, plant and equipment, and investment securities.
2. Segment income is adjusted against the operating income recorded in the
consolidated income statement.
3. Segment liabilities have not been reported, as they are serviced periodically inconsolidation by the Company’s highest decision making authority.

22

Fiscal year ended March 31, 2015 (From April 1, 2014 to March 31, 2015)
Reporting segment

Net sales
Sales to third parties
Inter-segment sales
and transfers
Total
Segment income
Segment assets
Other items
Depreciation andamortization
Increase in property,
plant and equipment
and intangible assets(Thousands of yen)Amounts intheAdjustments*1 consolidated
financialstatements*2

Collagenmaterial
business

Formulasolutionbusiness

Total

22,959,664

8,955,319

31,914,983－

31,914,983

1,430,932－

1,430,932(1,430,932)－

24,390,597
1,101,489
25,698,780

8,955,319
647,523
5,310,870

33,345,916
1,749,012
31,009,650(1,430,932)(1,356,356)
2,922,418

31,914,983
392,656
33,932,069

981,423

98,226

1,079,649

36,012

1,115,662

1,759,982

562,366

2,322,349

59,171

2,381,521*Notes: 1. Adjustments are as follows:(1) Adjustment for segment income of (¥1,356,356) thousand comprises elimination ofintersegment transactions of ¥2,370 thousand and unallocated expenses of(¥1,358,726) thousand. Unallocated expenses are mainly general and administrative
expenses.
(2) Adjustment for segment assets of ¥2,922,418 thousand comprises elimination ofintersegment transactions of (¥524,815) thousand and unallocated assets of¥3,447,234 thousand. Major components of the unallocated assets are cash anddeposits, property, plant and equipment, and investment securities.
2. Segment income is adjusted against the operating income recorded in the
consolidated income statement.
3. Segment liabilities have not been reported, as they are serviced periodically inconsolidation by the Company’s highest decision making authority.

23

b. Related information
Fiscal year ended March 31, 2014 (from April 1, 2013 to March 31, 2014)
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

U.S.

Canada

Other

Total

19,684,052

2,022,724

8,240,210

2,006,580

860,488

32,814,056

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

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

Asia

U.S.

CanadaTotal

2,990,115

255,186

4,664,232

894,751

8,804,286

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, 2015 (from April 1, 2014 to March 31, 2015)
1 Information by products and services
This information is omitted because it is the same as is recorded for segment
information.
2 Information by countries and regions(1) Net sales(Thousands of yen)
Japan

Asia

U.S.

Canada

Other

Total

18,435,853

2,017,423

8,084,049

2,550,627

827,029

31,914,983

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

24

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

Asia

U.S.

3,514,552

181,223

6,328,596

Canada824,111

Total
10,848,484

3 Information by main customer
The Company has omitted disclosure because no sales to any external customer exceed
10% of the total net sales on the consolidated statements of income.
c. Information on impairment loss on noncurrent assets by reporting segments
No items to reportd. Information on amortization of goodwill and unamortized amounts byreporting segments
No items to report
e. Information on gain on negative goodwill by reporting segment
No items to report25

(Per Share Information)
Fiscal 2014
(From April 1, 2013
to March 31, 2014)

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

Net assets per share¥742.20¥831.15

Net income per share

37.90

33.20

Notes: 1. Diluted net income per share is not disclosed due to the absence of latent shareswith dilution effect.
2. Basis for calculating per share data is shown below.
Fiscal 2014
(From April 1, 2013
to March 31, 2014)

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

665,490

610,067－－

665,490

610,067

17,556,927

18,373,812

Net income (Thousands of yen)Amounts not attributable to common shareholders(Thousands of yen)
Net income related to common shares(Thousands of yen)
Average number of common shares during the period(shares)(Subsequent Events)
At a meeting of the Board of Directors held on April 24, 2015, Nitta Gelatin Inc.
decided to acquire the convertible preferred shares of equity-method affiliate Nitta
Gelatin India Ltd. (NGIL). Following this decision, Nitta Gelatin has determined that its
involvement in NGIL’s management has increased overall. Therefore, Nitta Gelatin has
resolved to convert NGIL into a consolidated subsidiary. The details are outlined asfollows.
1. Outline of business combination(1) Name of acquired company and its business activities
Name of acquired company: Nitta Gelatin India Ltd.
Business activities: Production and sale of ossein from bovine bones, bovine gelatin andcollagen peptide(2) Main reasons for implementing business combination
This business combination was implemented to establish a framework for responding to market
conditions with greater flexibility and to further strengthen the Company’s global businessplatform.
(3) Business combination date
April 1, 2015 (effective acquisition date)(4) Statutory basis for business combination

26

Control of decision-making bodies(5) Name of company after business combination
No change(6) Acquired voting interest
Voting interest held before the business combination 43.0%
Additional voting interest acquired on the business combination date -%Voting interest after acquisition 43.0%(7) Main rationale for deciding on acquisition target
Judging by a comprehensive range of factors, such as the reliance of NGIL’s business on Nitta
Gelatin and the level of personnel support, Nitta Gelatin’s influence over NGIL had increased,
and as a result, Nitta Gelatin was recognized to have control over NGIL’s decision-making
bodies.
2. Acquisition cost of acquired company and components
Consideration for acquisition ¥1,055 million
3. Difference between the acquisition cost for the acquired company and the total amount of theacquisition costs for each transaction leading to the acquisition
Nitta Gelatin expects to record a loss of ¥620 million in connection with the phased acquisitionof NGIL.
4. Amount of goodwill, reason for goodwill, amortization method and amortization period
Nitta Gelatin is now closely examining the details.
5. Amount of assets and liabilities transferred on the business combination date and the main
components
Nitta Gelatin is now closely examining the details.

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4. Other
Change of Directors and Audit & Supervisory Board Members
1. Change of Representative Directors
A change in the representative director effective April 1, 2015 has already been
disclosed on February 6, 2015.
2. Change of Other Directors and Audit & Supervisory Board Members
New candidate for substitute Audit & Supervisory Board member
Outside substitute Audit & Supervisory Board member
Tomoaki Nishihara (currently Dean of Administration and Standing Member of the Board ofTrustees, Matsuyama University)(2) Other
No items to report.

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