November 8, 2016

Consolidated Financial Results
for the Six Months Ended September 30, 2016
(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:
Toru Tamaoka, Director and Executive Officer;
General Manager of Administration Division
Tel: +81-72-949-5381
Scheduled date to file Quarterly Securities Report: November 11, 2016
Scheduled date to commence dividend payments: December 6, 2016
Supplementary explanatory materials prepared:
Yes
Explanatory meeting:Yes (For analysts and institutional investors)(Millions of yen with fractional amounts discarded, unless otherwise noted.)

1. Consolidated financial results for the six months ended September 30, 2016
(from April 1, 2016 to September 30, 2016)(1) Consolidated operating results(Percentages indicate year-on-year changes.)
Net income
Net sales

Operating income

Ordinary income

Six months ended
Millions of yen%
Millions of yen%
Millions of yen
September 30, 2016
17,752
(2.9)
924
106.0
688
September 30, 2015
18,285
13.2
448
66.0
365
Note: Comprehensive income
For the six months ended September 30, 2016: ¥(420) million, (-%)
For the six months ended September 30, 2015: ¥165 million, (81.1%)
Net income
per share%

88.2(31.4)

attributable to ownersof the parent
Millions of yen

405
147

Diluted net income
per share

Six months ended
Yen
Yen
September 30, 201622.05
September 30, 2015
8.00
Note: Diluted net income per share is not disclosed due to the absence of latent shares with dilution effect.

(2) Consolidated financial position
Total assets

Net assets

As ofMillions of yen
Millions of yen
September 30, 2016
36,653
16,318March 31, 2016
37,597
16,876
Reference: Equity
As of September 30, 2016: ¥14,546 million
As of March 31, 2016:¥14,972 million

Equity ratio
%

39.7
39.8

%

175.5
(60.5)

2. Cash dividends
Cash dividends per shareFirst quarter
Fiscal year ended
March 31, 2016
Fiscal year ending
March 31, 2017
Fiscal year ending
March 31, 2017
(Forecasts)

Second quarter

Third quarter

Fiscal year-end

Annual

Yen

Yen

Yen

Yen

Yen

-

6.00

-

6.00

12.00

-

6.00
-

6.00

12.00

Note: Changes to most recent dividend forecasts: None

3. Consolidated financial forecasts for the fiscal year ending March 31, 201 7(from April 1, 2016 to March 31, 2017)(Percentages indicate year-on-year changes.)

Millions of yen

Fiscal year ending
March 31, 2017

35,000Net income

OperatingincomeNet sales%(5.1)

Millions of yen

1,700

Ordinary income%

33.5

Millions of yen

1,400

attributable to ownersof the parent

Net income
per share%

Millions of yen

%

Yen

42.9

800

67.5

43.54

Note: Changes to most recent consolidated financial forecasts: Yes
For revisions to consolidated financial forecasts, please refer to the press release issued today (November 8,2016) titled “Notice Concerning the Recording of Non-Operating Expenses, Difference Between Consolidated
Business Forecasts and Actual Results for the Six Months Ended September 30, 2016, and Revision ofConsolidated Business Forecasts for the Fiscal Year Ending March 31, 2017.”

Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in achange in the scope of consolidation): None
New:
None
Excluded: None
(2) Adoption of special accounting methods for the preparation of quarterly consolidated financial
statements: No(3) Changes in accounting policies, changes in accounting estimates, and restatement of revisions
a. Changes in accounting 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 “(3) Changes in Accounting Policies and Estimates, and Restatement of Revisions” in “2.
Matters Concerning Summary Information (Notes)” on page 4 of the Attachment to this report.

(4) Number of common shares issued
a. Total number of issued shares at the end of the period (including treasury stock)
As of September 30, 2016
18,373,974 shares
As of March 31, 2016
18,373,974 sharesb. Number of shares of treasury stock at the end of the period
As of September 30, 2016
162 shares
As of March 31, 2016
162 sharesc. Average number of shares
For the six months ended September 30, 2016
For the six months ended September 30, 2015

18,373,812 shares
18,373,812 shares* Disclosure of status of quarterly review procedure
This report falls outside the scope of quarterly review procedures as laid out in the Financial Instruments andExchange Act. As of the time of the release of this report, the review of the financial statements, etc., outlined in the
Act had not yet been concluded.

* Proper use of earnings forecasts, and other special matters
The forward-looking statements, including earnings forecasts, contained in these materials are based on information currently
available to the Company and on certain assumptions deemed to be reasonable. These statements do not guarantee that theCompany will achieve its earnings forecasts. In addition, actual business and other results may differ substantially due to various
factors. For details on the conditions assumed and the cautionary notes and items in the financi al forecasts, please refer to “(3)Description of Consolidated Business Forecasts and Other Forward-looking Information” in “1. Qualitative Information
Concerning Quarterly Financial Statements” on page 4 of the Attachment to this report.

Attachment Contents
1. Qualitative Information Concerning Quarterly Financial Statements ･････････････････････････････ 2(1) Description of Business Results ･･･････････････････････････････････････････････････････････ 2(2) Description of Financial Position ･･････････････････････････････････････････････････････････ 3(3) Description of Consolidated Business Forecasts and Other Forward-looking Information ･･････････････ 4

2. Matters Concerning Summary Information (Notes) ････････････････････････････････････････････ 4(1) Significant Changes in Subsidiaries During the Quarterly Period Under Review ･････････････････････ 4(2) Application of Special Accounting Methods in the Preparation of Quarterly Consolidated
Financial Statements ････････････････････････････････････････････････････････････････････ 4(3) Changes in Accounting Policies and Estimates, and Restatement of Revisions ･･･････････････････････ 4(4) Additional Information ･･････････････････････････････････････････････････････････････････ 5

3. Quarterly Consolidated Financial Statements ･････････････････････････････････････････････････ 6(1) Consolidated Balance Sheets ･････････････････････････････････････････････････････････････ 6(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ･･･････････ 8
Consolidated Statements of Income
Six months ended September 30 ･･･････････････････････････････････････････････････････････ 8
Consolidated Statements of Comprehensive Income
Six months ended September 30 ･･･････････････････････････････････････････････････････････ 9(3) Consolidated Statements of Cash Flows ････････････････････････････････････････････････････ 10(4) Notes to Quarterly Consolidated Financial Statements ･････････････････････････････････････････ 12(Note Concerning Going Concern Assumption) ･･････････････････････････････････････････････ 12(Note Concerning Significant Changes in Shareholders’ Equity) ･････････････････････････････････ 12(Segment Information) ･････････････････････････････････････････････････････････････････ 12(Business Combinations) ･･･････････････････････････････････････････････････････････････ 14

1

1. Qualitative Information Concerning Quarterly Financial Statements(1) Description of Business Results
In the first six months of the fiscal year ending March 31, 2017, the global economy attained onlya moderate pace of recovery overall, mainly reflecting the decision of the U.K. to exit theEuropean Union and a clear economic deceleration in China and other emerging Asian countries,
despite signs of a sustained, gradual economic recovery in the U.S.
In the Japanese economy, the employment environment showed signs of improvement,
underpinned by the Japanese government’s economic policies and the Bank of Japan’s monetaryeasing policy. However, Japan’s progress on economic recovery has reached a standstill, mainly
owing to a decline in earnings in the manufacturing sector due to the yen’s appreciation andstagnant consumer spending.
Amid these circumstances, the Nitta Gelatin Group has been making a concerted effort toachieve the targets of the medium-term management plan finishing in the fiscal year ending
March 31, 2018.
As a result, in the first six months of the fiscal year ending March 31, 2017, net sales declined
2.9% year on year to ¥17,752 million and operating income increased 106.0% to ¥924 million.
Ordinary income rose 88.2% to ¥688 million, mainly due to foreign exchange losses. Net income
attributable to owners of the parent increased 175.5% year on year to ¥405 million.
Segment business performance was as follows:(a) Collagen Material BusinessIn the gelatin field, sales and profits both increased in Japan atop steady demand. In North
America, delays in the recovery of the health food market, compounded by the impact of foreignexchange movements, caused overall sales to falter.
In the collagen peptide field, demand from inbound tourism has been settling down and under
this environment overall collagen peptide sales declined, despite sales growth in Asian markets.
Collagen casing sales were almost level year on year, underpinned by a recovery in market
conditions for livestock products in North America.
As a result, net sales in this segment declined 6.6% to ¥12,832 million, while segment profit(operating income) increased 43.0% to ¥1,066 million.
(b) Formula Solution BusinessIn food materials, sales rose steadily owing to growth in the dessert market driven by
convenience stores, with profits increasing as well.
Adhesives sales were level year on year for packaging, reflecting inclement summer weather.

2

In addition, adhesives for hygiene products saw an increase in sales.
Profits increased as a result of cost reduction efforts.
As a result, net sales in the segment were up 8.4% year on year to ¥4,920 million and segment
profit (operating income) increased 27.7% year on year to ¥526 million.

(2) Description of Financial Position(a) Assets, liabilities and net assets(Assets)
Total assets amounted to ¥36,653 million at September 30, 2016, ¥944 million lower than at
March 31, 2016. This was mainly attributable to decreases in cash and deposits, and property,
plant and equipment.
(Liabilities)
Total liabilities stood at ¥20,334 million at September 30, 2016, ¥386 million lower than at
March 31, 2016. This was mainly attributable to decreases in notes and accounts payable-trade,and net defined benefit liability.
(Net assets)
Net assets amounted to ¥16,318 million at September 30, 2016, ¥558 million lower than at March
31, 2016. This was mainly attributable to a decrease in foreign currency translation adjustments.
As a result, the equity ratio stood at 39.7% at September 30, 2016, compared to 39.8% at March
31, 2016.
(b) Cash flows
Cash and cash equivalents ("cash") as of September 30, 2016 was ¥1,823 million, down ¥713
million from March 31, 2016.
Cash flows for each activity and reasons are as follows.
(Net cash provided by operating activities)
Operating activities provided net cash of ¥430 million, compared to ¥659 million provided in thesame period of the previous fiscal year. The main components were income before provision ofincome taxes of ¥681 million, depreciation and amortization of ¥709 million, increase ininventories of ¥533 million, increase in notes and accounts receivable-trade of ¥105 million, andincome taxes paid of ¥129 million.

3

(Net cash used in investing activities)
Investing activities used net cash of ¥1,668 million, compared to ¥879 million used in the same
period of the previous fiscal year. The main uses of cash were ¥897 million for the transfer ofbusiness and ¥820 million for the purchase of property, plant and equipment.
(Net cash provided by financing activities)
Financing activities provided net cash of ¥372 million, compared to ¥17 million used in the same
period of the previous fiscal year. The main source of cash was ¥1,500 million in proceeds fromlong-term loans payable, which was partly offset by ¥1,142 million used for the repayment oflong-term loans payable.

(3) Description of Consolidated Business Forecasts and Other Forward- looking
Information
The consolidated earnings forecast for the fiscal year ending March 31, 2017 has been revised
from the consolidated earnings forecast announced on May 10, 2016 in the “Consolidated
Financial Results for the Fiscal Year Ended March 31, 2016 (Japanese Accounting Standards).”
For details, please refer to the press release issued today (November 8, 2016) titled “NoticeConcerning the Recording of Non-Operating Expenses, Difference Between Consolidated
Business Forecasts and Actual Results for the Six Months Ended September 30, 2016, andRevision of Consolidated Business Forecasts for the Fiscal Year Ending March 31, 2017.”
Actual business and other results may differ substantially from projections due to various
factors.

2. Matters Concerning Summary Information (Notes)(1) Significant Changes in Subsidiaries During the Quarterly Period Under Review
None(2) Application of Special Accounting Methods in the Preparation of Quarterly
Consolidated Financial Statements
None(3) Changes in Accounting Policies and Estimates, and Restatement of Revisions(Changes in Accounting Policies)(Application of Practical Solution on a Change in Depreciation Method due to Tax Reform 2016)
Following the revision of the Corporation Tax Act, the Company applied “Practical Solution on a
Change in Depreciation Method due to Tax Reform 2016” (ASBJ Practical Issues Task Force4

Report No. 32, June 17, 2016) from the first quarter of the fiscal year ending March 31, 2017.
Accordingly, the depreciation method for buildings acquired on or after April 1, 2016 will bechanged from the declining-balance method to the straight-line method.
The effect of this change on the Company’s consolidated profit and loss for the six months
ended September 30, 2016 was minor.

(4) Additional Information(Changes in Presentation Basis)(Quarterly Consolidated Statements of Income)“Rent income” was reported as a separate item under non-operating income in the six months
ended September 30, 2015; however, since the materiality of this item has diminished, it has
been included in “Other” under non-operating income from the six months ended September 30,
2016.
To reflect this change in presentation basis, the financial statements for the six months ended
September 30, 2015 have been restated.
As a result, ¥21 million for “Rent income” has been included in “Other” under non-operating
expenses in the statement of income for the six months ended September 30, 2015.
(Application of Revised Implementation Guidance on Recovery of Deferred Tax Assets)
The Company has applied “Revised Implementation Guidance on Recovery of Deferred Tax
Assets” (ASBJ Guidance No. 26, March 28, 2016) from the first quarter of the fiscal year ending
March 31, 2017.

5

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

Fiscal 2016
(As of March 31, 2016)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets

6

2Q Fiscal 2017
(As of September 30, 2016)

2,688
7,375
5,262
1,429
2,275
629
(2)
19,657

1,917
7,239
5,736
1,143
2,586
749
(4)
19,367

4,412
5,000
4,311
13,724

4,098
4,381
4,506
12,986

357
357

378
343
722

2,919
939
(0)
3,858
17,94037,597

2,638
938
(0)
3,577
17,28636,653

(Millions of yen)

Fiscal 2016
(As of March 31, 2016)
Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of long-term loans payable
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Noncurrent liabilities
Long-term loans payable
Net defined benefit liability
Other
Total noncurrent liabilities
Total liabilities
Net Assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income (loss)
Valuation difference on other available-for-salesecurities
Deferred gains (losses) on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive loss
Non-controlling interests
Total net assets
Total liabilities and net assets

7

2Q Fiscal 2017
(As of September 30, 2016)

4,252
2,186
2,215
145
213
2,062
11,076

4,054
2,180
2,369
212
172
1,965
10,954

5,380
2,938
1,325
9,644
20,720

5,367
2,764
1,247
9,380
20,334

3,144
2,966
9,569
(0)
15,680

3,144
2,966
9,862
(0)
15,974

1,024

900

(38)
466
(2,160)(707)
1,904
16,876
37,597(37)(420)(1,870)(1,427)
1,772
16,31836,653

(2) Consolidated Statements of Income and Consolidated Statements ofComprehensive Income
Consolidated Statements of Income(Six months ended September 30)(Millions of yen)

Net sales
Cost of sales
Gross profit on sales
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Equity in earnings of affiliates
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Equity in losses of affiliates
Other
Total non-operating expenses
Ordinary income
Extraordinary gains
Gain on sales of noncurrent assets
Gain on negative goodwill
Gain on change in equity
Total extraordinary gains
Extraordinary losses
Loss on retirement of noncurrent assets
Loss on stepped acquisitions
Total extraordinary losses
Income before provision for income taxes
Income taxes
Net income
Net income (loss) attributable to non-controllinginterests
Net income attributable to owners of the parent

Six Months Ended
September 30, 2015
(From April 1, 2015 to
September 30, 2015)
18,285
14,660
3,624
3,175
448
8
15
19
-

45
90
154

8
17
68
48
143

7
10
172
365

113
246
19
379
688

1
502
157
661

-

19
620
640
387
249
137

7
7
681
240
441

(9)

36

147

405

-

8

Six Months Ended
September 30, 2016
(From April 1, 2016 to
September 30, 2016)
17,752
13,634
4,118
3,194
924

Consolidated Statements of Comprehensive Income(Six months ended September 30)(Millions of yen)

Six Months Ended
September 30, 2015
(From April 1, 2015 to
September 30, 2015)
Net income

Six Months Ended
September 30, 2016
(From April 1, 2016 to
September 30, 2016)

137

441

Valuation difference on otheravailable-for-sale securities

(101)

(123)

Deferred gains (losses) on hedges

(79)

16

Foreign currency translation adjustments

(293)

(903)

Pension liability adjustment

27

290

Share of other comprehensive loss of
associates accounted for using equity method

474

(141)

Total other comprehensive income (loss)

27

(862)

165

(420)

Owners of the parent

286

(314)

Non-controlling interests

(121)

(106)

Other comprehensive income (loss)

Total comprehensive income
Comprehensive income attributable to:9(3) Consolidated Statements of Cash Flows(Millions of yen)

Six Months Ended
September 30, 2015
(From April 1, 2015 to
September30, 2015)
Cash flows from operating activities
Income before provision of income taxes
Depreciation and amortization
Amortization of goodwill
Increase in allowance for doubtful accounts
Decrease in provision for bonuses
Increase in provision for directors’ retirement
benefits
Increase in net defined benefit liability
Interest and dividend income
Interest expenses
Foreign exchange losses
Equity in (earnings) losses of affiliates
Gain on sales of property, plant and equipment
Loss on retirement of noncurrent assets
Gain on change in equity
Gain on negative goodwill
Loss on stepped acquisitions
Increase in notes and accounts receivable-trade
Increase in inventories
Increase in notes and accounts payable-trade
Decrease in accrued consumption taxes
Other, net
SubtotalInterest and dividend income received
Interest paid
Income taxes paid
Net cash provided by operating activities

387
789
9
(22)

681
709
3
2
(37)

0

-

56
(24)
154
2
7
(1)
19
(157)
(502)
620
(184)
(275)
352
(38)
(180)
1,014
58
(154)
(258)
659

2
(26)
113
13
(68)
7
(105)
(533)
123
(22)
(232)
630
43
(113)
(129)
430

-

10

Six Months Ended
September 30, 2016
(From April 1, 2016 to
September 30, 2016)

(Millions of yen)

Six Months Ended
September 30, 2015
(From April 1, 2015 to
September 30, 2015)
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 insurance funds
Payment for the transfer of business
Proceeds from surrender 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 payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Proceeds from sale-and-leaseback transactions
Repayments of lease obligations
Repayments to non-controlling interests
Cash dividends paid
Cash dividends paid to non-controlling interests
Net cash (used) provided by financing activities
Effect of exchange rate change on cash and cash
equivalents
Net decrease in cash and cash equivalents
Cash and cash equivalents, beginning of period
Increase in cash and cash equivalents from newly
consolidated subsidiaries
Decrease in cash and cash equivalents from exclusionof subsidiary from consolidation
Cash and cash equivalents, end of period

(20)
20
(866)

(20)
65
(820)

2

-

(8)
(3)
(2)

(0)
0
(0)
(879)

(13)
(3)
(0)
(897)
20
(0)
2
(0)
(1,668)

(302)
1,766
(1,290)
82
(132)
(21)
(110)
(10)
(17)

216
1,500
(1,142)
60
(125)
(110)
(25)
372

(36)

152

(274)
2,602

(713)
2,536

24

-

(38)

-

2,313

1,823

-

11

Six Months Ended
September 30, 2016
(From April 1, 2016 to
September 30, 2016)

(4) Notes to Quarterly Consolidated Financial Statements(Note Concerning Going Concern Assumption)
None(Note Concerning Significant Changes in Shareholders’ Equity)
None(Segment Information)
I. Six months ended September 30, 2015 (From April 1, 2015 to September 30, 2015)
1. Information on net sales, income and loss by reporting segment(Millions of yen)

Reporting segment

Amounts in the
consolidated
financialstatements*2

Collagenmaterial
business

Formulasolutionbusiness

Total

Adjustments

Sales to third parties

13,744

4,540

18,285-18,285Inter-segment sales andtransfers

851

-

851

(851)

-

14,595

4,540

19,136(851)

18,285

745

412

1,158

(709)

448

*1

Net sales

Total
Segment income(Notes)1. Adjustment for segment income of ¥(709) million comprises elimination ofintersegment transactions of ¥(4) million and unallocated expenses of ¥(705)million.
2. Segment income is adjusted against the operating income recorded in the consolidated
income statement.

2. Information on reporting segment assets
Segment assets of the Collagen Material Business had increased by ¥4,048 million at
September 30, 2015 as a result of the conversion of Nitta Gelatin India Ltd., Bamni Proteins
Ltd. and Reva Proteins Ltd. into subsidiaries within the scope of Nitta Gelatin Inc.’s
consolidation in the first quarter ended June 30, 2015.
3. Information on impairment loss on noncurrent assets and goodwill by reporting segments(Material gain on negative goodwill)
The Collagen Material Business segment recorded a ¥502 million gain on negative goodwill
in the six months ended September 30, 2015 as a result of the conversion of Nitta Gelatin
India Ltd., Bamni Proteins Ltd. and Reva Proteins Ltd. into subsidiaries within the scope of
Nitta Gelatin Inc.’s consolidation.

12

II. Six months ended September 30, 2016 (From April 1, 2016 to September 30, 2016)
1. Information on net sales, income and loss by reporting segment(Millions of yen)

Reporting segment

Amounts in the
consolidated
financialstatements*2

Collagenmaterial
business

Formulasolutionbusiness

Total

Sales to third parties

12,832

4,920

17,752-

17,752

Inter-segment sales andtransfers

893

4

898

(898)

-

Total

13,725

4,925

18,651(898)

17,752

Segment income

1,066

526

1,592

(668)

924

Adjustments*1

Net sales(Notes)1. Adjustment for segment income of ¥(668) million comprises elimination ofintersegment transactions of ¥2 million and unallocated expenses of ¥(671) million.
2. Segment income is adjusted against the operating income recorded in the consolidated
income statement.

2. Information on impairment loss on noncurrent assets and goodwill by reporting segments(Significant changes in the amount of goodwill)In the Collagen Material Business segment, Vyse Gelatin, LLC was newly established, and the
new company took over a portion of the business of Vyse Gelatin Company, resulting in therecording of goodwill.
The increase in goodwill due to these events was ¥379 million in the six months ended
September 30, 2016. The amount of goodwill is a provisional estimate, as the allocation of theacquisition cost has not yet been completed.

(Business combinations)
Business combinations due to acquisitions (Business taken over by a consolidated subsidiary)
Nitta Gelatin NA Inc., a consolidated subsidiary of Nitta Gelatin Inc., established Vyse Gelatin,
LLC (renamed from Project Vector, LLC) with a 100% ownership interest in the company, anddecided at a Board of Directors meeting held on August 8, 2016 to take over a portion of businessfrom Vyse Gelatin Company (hereinafter, “the former Vyse Gelatin”). Moreover, on August 26,
2016, the new company and the former Vyse Gelatin entered into a business transfer agreement,with the new company taking over the business on the same day.

13

1. Outline of business combination(1) Name of the counterparty company involved in the business acquisition and description of
the acquired business
Name of the counterparty company involved in the transfer of business
Former Vyse Gelatin
Business description
Processing and sale of gelatin and collagen peptide(2) Main reason for undertaking the business combination
The purpose of the business combination is to expand sales of gelatin and collagen peptide andboost market share for these products in North America by incorporating the customers andproduct lineups held by the former Vyse Gelatin in North America.
(3) Business combination dateAugust 26, 2016(4) Legal format of business combination
Business transfer(5) Main rationale for determining the acquiring company
Because Vyse Gelatin, LLC, a consolidated subsidiary of Nitta Gelatin Inc., took over thebusiness with cash as consideration.
(6) Name of company after business combination
Vyse Gelatin, LLC
2. The period of the acquired company’s business results that were included in the quarterly
consolidated statements of income for the period under review
From August 26, 2016 to September 30, 2016
3. Acquisition cost of the acquired business and breakdown by type of consideration
Consideration for acquisition
Cash and deposits US$8.41 million (¥846 million)
Acquisition cost
US$8.41 million (¥846 million)14

4. Description and amounts of major acquisition-related costs
Advisory fees, etc. US$190,000 (¥20 million)
5. Amount of goodwill generated, reason for generating goodwill, and amortization method andperiod(1) Amount of goodwill generated
US$3.77 million (¥379 million)
Given that the allocation of the acquisition cost has not yet been completed, the amount of
goodwill is a provisional estimate based on sound information currently available tomanagement.
(2) Reason for generating goodwill
The goodwill primarily represents the surplus earnings power expected in the future based on
business expansion going forward.
(3) Amortization method and period
Straight-line amortization over 10 years

15