Notice of the 95th Ordinary General Meeting of Shareholders

This is an unofficial translation of the Japanese language original version, and is provided for reference
purposes only, without any warranty as to its accuracy or as to the completeness of the information.
In the event of any discrepancy between this translation and the Japanese original, The Japanese language
original shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any
other forms of damages arising from this translation.

1

(Translation)

Securities Code 4182

June 8, 2022
Dear Shareholders with Voting Rights

Masashi Fujii
President and Representative Director
Mitsubishi Gas Chemical Company, Inc.
Mitsubishi Building,
5-2 Marunouchi 2-chome, Chiyoda-ku,
Tokyo, Japan

Notice of the 95th Ordinary General Meeting of Shareholders
Please refer to the below for information about the upcoming the 95th Ordinary General Meeting of
Shareholders of Mitsubishi Gas Chemical Company, Inc. (hereinafter "MGC") to be held as described below.
You may exercise your voting rights by 5:30 p.m. of June 27, 2022, as it is possible to exercise your voting
rights by mail or via the Internet.

1. Date and Time:
2. Place:

Tuesday, June 28, 2022 at 10:00 a.m.
MGC Head Office (6th Floor, Mitsubishi Building)
5-2, Marunouchi 2-chome, Chiyoda-ku, Tokyo

3. Agenda for the Meeting:
Matters to be reported: (1) Report on the Business Report, Consolidated Financial Statements, and resultsof audits of the Consolidated Financial Statements by the independent Auditor
and the Audit & Supervisory Board for the 95th Business Term (from April 1,
2021 to March 31, 2022)(2) Report on the Non-Consolidated Financial Statements for the 95th Business
Term (from April 1, 2021 to March 31, 2022)
Matters for Resolution:
Proposal No. 1: Partial Amendment to the Articles of Incorporation
Proposal No. 2: Election of Twelve Directors
Proposal No. 3: Election of One Audit & Supervisory Board Member
4. Disclosure on the internet●Among the documents that should be attached to this convocation notice, in accordance with laws andregulations and the provisions of Article 15 of the Articles of Incorporation of MGC, the following documents
are posted on MGC’s website and are not included in this convocation notice.
(ⅰ) Stock Acquisition Rights(ⅱ) Consolidated Statement of Changes in Net Assets(ⅲ) Notes to Consolidated Financial Statements(ⅳ) Non-Consolidated Statement of Changes in Net Assets(ⅴ) Notes to Non-consolidated Financial Statements●Please be advised that if minor amendments are required to matters contained in the Reference Documents for
General Meeting of Shareholders, Business Report, Non-Consolidated Financial Statements, or theConsolidated Financial Statements, MGC will post revisions on its website.
2

(Translation)

MGC’s website : https://www.mgc.co.jp/ir/stockinfo/meeting.html◇This year you are advised to refrain from visiting the Ordinary General Meeting of Shareholders regardless of

your health condition at the time of the General Meeting to be held with the aims of avoiding the risks of
COVID-19 infection for shareholders. However, if you prefer to attend in person, it is requested that you bringthe enclosed Voting Form to the reception desk.
Information on Exercising Voting Rights●Attending the General Meeting of Shareholders
This year you are advised to refrain from visiting the Ordinary General Meeting of Shareholders regardlessof your health condition at the time of the General Meeting to be held with the aim of avoiding the risks of
COVID-19 infection for shareholders. However, if you prefer to attend in person, it is requested that you submit
the enclosed Voting Form to the reception desk at the venue. (You do not need to put your seal on it).
Date and Time of the General Meeting of Shareholders: June 28th 2022 (Tue) 10:00 a.m. (Japan Time)
Place: MGC Head Office (6th Floor, Mitsubishi Building)
5-2, Marunouchi 2-chome, Chiyoda-ku, Tokyo●Postal Mail
Please indicate your approval or disapproval of agenda items on the Voting Form and return it by mail.
Voting forms must arrive no later than 5:30 p.m. on Monday, June 27th 2022 (Japan Time).
●Internet
Please access the voting website (https://evote.tr.mufg.jp/) from your computer or smartphone, and enter
your approval or disapproval of the proposals. Exercise deadline: Until 5:30 p.m. on Monday, June 27th 2022
(Japan Time).
■Multiple Exercise of Voting Rights
In the event voting rights are exercised multiple times via the mailing of the Voting Form and via Internet,
votes submitted via Internet will be deemed valid.
In the event that voting rights are exercised multiple times via Internet, the last set of votes cast will bedeemed valid.

＜To Institutional Investors＞
The “Electronic Proxy Voting Platform” operated by ICJ, Inc. is available for exercising voting rights for
MGC’s General Meeting of Shareholders.

3(Translation)

Reference Documents for General Meeting of Shareholders
Proposal No. 1: Partial Amendment to the Articles of Incorporation
1. Reasons for amendment
The amended provisions stipulated in the proviso of Article 1 of the supplementary provisions of the “ActPartially Amending the Companies Act” (Act No. 70 of 2019) will be enforced on September 1, 2022, and asystem for electronic provision of materials for general meetings of shareholders will be introduced. In order toprepare for this, the Articles of Incorporation of the Company shall be amended as follows.
(1) The proposed Article 15, Paragraph 1 provides that information contained in the reference materials for thegeneral meeting of shareholders, etc. shall be provided electronically.
(2) The purpose of the proposed Article 15, Paragraph 2 is to establish a provision to limit the scope of mattersto be included in the paper copy to be sent to shareholders who have requested it.
(3) The provisions related to the internet disclosure and deemed provision of the reference materials for thegeneral meeting of shareholders, etc. (Article 15 of the current Articles of Incorporation) will become
unnecessary and will therefore be deleted.
(4) In line with the above establishment and deletion of the provisions, supplementary provisions related to theeffective date, etc. shall be established.

2. Details of amendments
The details of the amendments are as follows.
(Amended parts are underlined.)
Current Articles of Incorporation

Proposed Amendments(Internet Disclosure and Deemed Provision ofReference Materials for the General Meeting of
Shareholders, Etc.)
Article 15 The Company may, when convening ageneral meeting of shareholders, deem that it has
provided information to shareholders pertaining tomatters to be described or indicated in thereference materials for the general meeting ofshareholders, business report, non-consolidated
financial statements, and consolidated financial
statements, by disclosing such information throughthe internet in accordance with the provisions
provided in the Ordinance of the Ministry ofJustice.

(Deleted)(Measures for Electronic Provision, Etc.)
Article 15 The Company shall, when convening ageneral meeting of shareholders, provide
information contained in the reference materials
for the general meeting of shareholders, etc.
electronically.
2. Among the matters to be provided electronically,
the Company may choose not to include all or partof the matters stipulated in the Ordinance of the
Ministry of Justice in the paper copy to be sent toshareholders who have requested it by the record
date for voting rights.

(Newly established)4

(Translation)

Current Articles of Incorporation

Proposed Amendments
Supplementary provisions(Newly established)

1. The deletion of Article 15 (Internet Disclosure andDeemed Provision of Reference Materials for the
General Meeting of Shareholders, Etc.) of the
Articles of Incorporation prior to amendment andthe establishment of Article 15 (Measures forElectronic Provision, Etc.) of the amended Articles
of Incorporation shall come into effect on
September 1, 2022 (the “Effective Date”), whichis the date of enforcement of the amended
provisions stipulated in the proviso of Article 1 ofthe supplementary provisions of the Act Partially
Amending the Companies Act (Act No. 70 of2019).
2. Notwithstanding the provisions of the preceding
paragraph, Article 15 (Internet Disclosure andDeemed Provision of Reference Materials for the
General Meeting of Shareholders, Etc.) of the
Articles of Incorporation prior to amendment shallremain in force with respect to a general meetingof shareholders to be held on a date within six
months from the Effective Date.
3. These supplementary provisions shall be deleted
upon the lapse of six months from the Effective
Date or the lapse of three months from the date of
the general meeting of shareholders set forth in thepreceding paragraph, whichever is later.

5(Translation)

Proposal No. 2: Election of Twelve Directors
The term of office of all twelve current Directors will expire as of the close of this Ordinary General Meetingof Shareholders. Therefore, it is proposed that twelve Directors, including 4 Outside Directors, be elected.
The candidates are as follows:
NumberName
Position
Responsibilities at MGC
1

Toshikiyo Kurai

2

Masashi Fujii

Representative Director

Chairman
Representative Director

President
Representative Director,

Senior Managing
Executive Officer

3

Masato Inari4

Nobuhisa Ariyoshi

5

Kenji Kato

Director, Managing
Executive Officer

6

Naruyuki Nagaoka

Director, Managing
Executive Officer

7

Motoyasu
Kitagawa

Director, Managing
Executive Officer

8

Ryozo Yamaguchi

Managing Executive
Officer

9

Tsugio Sato

Director

Representative Director,

Senior Managing
Executive Officer－

Renomination－

Renomination

Responsible for Production
Technology, in charge ofEnvironment Safety and Quality
Assurance Division, Purchasing &Logistics Division
In charge of internal control & risk
management, responsible forFinance & Accounting, in chargeof Administrative & Personnel
Division, and Information Systems
Division
Responsible for Research &Development, in charge ofIntellectual Infrastructure CenterIn charge of Basic Chemicals
Business Sector
In charge of compliance,
responsible for Corporate Planning,in charge of Internal Audit
Division, CSR&IR Division
In charge of Specialty Chemicals
Business Sector

Renomination

Renomination

Renomination

Renomination

Renomination

New Nomination

Renomination－

Outside Director
IndependentDirector

Renomination
10

Haruko Hirose－

Director

Outside Director
IndependentDirector

Renomination
11

Toru Suzuki－

Director

Outside Director
IndependentDirector

Renomination
12

Yasushi Manabe－

Director

Outside Director
IndependentDirector6(Translation)

No.

Name
(Date of Birth)

Profile, position and responsibility in MGC(Important positions concurrently held at other companies, etc.)
April 1975
June 2003
June 2006

Renomination
Toshikiyo Kurai(January 9, 1952)

June 2008
June 2009
June 2010

October 2011
June 20121
June 2013
April 2019

Joined MGC.
General Manager, Inorganic Chemicals Division,Specialty Chemicals Company
Executive Officer, and General Manager,
Inorganic Chemicals Division, Specialty
Chemicals Company
Executive Officer, and President of Specialty
Chemicals Company
Director, Managing Executive Officer, andPresident of Specialty Chemicals Company
Director, Managing Executive Officer, Presidentof Specialty Chemicals Company, and General
Manager, Engineering Plastics Division
Director, Managing Executive Officer, andPresident of Specialty Chemicals Company
Representative Director, Senior Managing
Executive Officer, Assistant to President, andPresident of Specialty Chemicals Company
President and Representative Director
Chairman and Representative Director(to the present)

Attendance of Board of ■ Reason for nomination as candidate
Mr. Toshikiyo Kurai, following his service in important positions
Directors Meeting
mainly in Specialty Chemicals department and his presiding over(the fiscal year ended
R&D, manufacture and whole business of Inorganic Chemicals
March 31, 2022)
division and Engineering Plastics division, was appointed to be a
12 held, 12 attended

Director in June 2009, and served from June 2013 to March 2019 as
President and Representative Director, and has served from April
2019 as Chairman and Representative Director, and due to hisabundant experience and knowledge of MGC’s business andmanagement control as a whole, he has once again been nominatedas a candidate for Director.

7

Number ofshares of MGC
held

52,932

(Translation)

No.

Name
(Date of Birth)

Profile, position and responsibility in MGC(Important positions concurrently held at other companies, etc.)
April 1981
June 2010
June 2012

June 2014

Renomination
Masashi Fujii(March 10, 1959)

2

April 2015

June 2015

April 2018

October 2018
Attendance of Board of
Directors Meeting(the fiscal year ended
March 31, 2022)
April 201912 held, 12 attended

Joined MGC.
General Manager, Organic Chemicals Division,
Natural Gas Chemicals Company
Executive Officer, and General Manager, Organic
Chemicals Division, Natural Gas Chemicals
Company
Executive Officer, and General Manager,
Methanol Division, Natural Gas Chemicals
Company
Managing Executive Officer, Administrative
Management of LNG Project Team, and Presidentof Natural Gas Chemicals Company
Director, Managing Executive Officer,
Administrative Management of LNG Project
Team, and President of Natural Gas Chemicals
Company
Outside Director, Co-op Chemical Co., Ltd(currently Katakura & Co-op Agri Corporation)
Director, Managing Executive Officer,
Administrative Management of LNG Project
Team, and President of Natural Gas Chemicals
Company
Director, Managing Executive Officer,
Administrative Management of LNG Project
Team, and President of Natural Gas Chemicals
Company
President and Representative Director(to the present)■ Reason for nomination as candidate
Mr. Masashi Fujii, following his service in important positions in
Administrative & Personnel, Natural Gas Chemicals department,
was appointed to be a Director in June 2015 and presided over
Natural Gas Chemicals department, and has served from April 2019as President and Representative Director, and due to his abundant
experience and knowledge of MGC's business and management
control as a whole, he has once again been nominated as a candidate
for Director.

8

Number ofshares of MGC
held

30,800(Translation)

No.

Name
(Date of Birth)

Profile, position and responsibility in MGC(Important positions concurrently held at other companies, etc.)
April 1985
June 2011
June 2014
April 2016
June 2016
April 2017

Renomination

June 2017

Masato Inari(January 23, 1961)

April 2019

June 2019
April 2020
3

April 2021

Attendance of Board of
Directors Meeting(the fiscal year ended
March 31, 2022)
12 held, 12 attendedApril 2022

Joined MGC.
Plant Manager, Niigata Plant, Natural Gas
Chemicals Company
Executive Officer, Plant Manager, Niigata Plant,
Natural Gas Chemicals Company
Executive Officer, President of Aromatic
Chemicals Company
Director, JSP Corporation
Managing Executive Officer, President of
Aromatic Chemicals Company
Director, Managing Executive Officer, Presidentof Aromatic Chemicals Company
Director, Managing Executive Officer, in chargeof Production Technology Division, Environment
Safety and Quality Assurance Division
Outside Director, Katakura & Co-op Agri
Corporation
Director, Managing Executive Officer, in chargeof Internal Audit Division, Environment & Total
Production Sector
Director, Managing Executive Officer,
responsible for Production Technology, in chargeof Environment Safety and Quality Assurance
Division, Purchasing & Logistics Division
Representative Director, Senior Managing
Executive Officer, responsible for Production
Technology, in charge of Environment Safety andQuality Assurance Division, Purchasing &Logistics Division(to the present)■ Reason for nomination as candidate
Mr. Masato Inari, following his engagement mainly in R&D of
Aromatic Chemicals department, served in important positions in
Natural Gas Chemicals and Aromatic Chemicals department,
presided over Aromatic Chemicals department, and was appointed
to be a Director in June 2017. With his abundant experience andknowledge of R&D and business management, etc., he has once
again been nominated as a candidate for Director.

9

Number ofshares of MGC
held

19,303

(Translation)

No.

Name
(Date of Birth)

Profile, position and responsibility in MGC(Important positions concurrently held at other companies, etc.)
April 1984
June 2012
April 2016

April 2018

June 2018

April 2019

Renomination
Nobuhisa Ariyoshi(November 26,1961)
June 20194

April 2020

April 2021
Attendance of Board of
Directors Meeting(the fiscal year endedApril 2022
March 31, 2022)
12 held, 12 attended

Joined MGC.
General Manager, Administrative & Personnel
CenterExecutive Officer, General Manager, Electronic
Materials Division, Information & Advanced
Materials Company
Managing Executive Officer, in charge of Finance& Accounting Center, Information Systems
Division, and Purchasing & Logistics Center
Director, Managing Executive Officer, in chargeof Finance & Accounting Center, Information
Systems Division, and Purchasing & Logistics
CenterDirector, Managing Executive Officer, Chairmanof Internal Control Promotion Committee, incharge of Compliance, Risk Management,Internal Audit Division, Corporate Planning
Division, Administrative & Personnel Center andCorporate Communications Division, General
Manager Tokyo Techno Park
Director, Managing Executive Officer, in chargeof Compliance, Risk Management, Finance &Accounting Center, Information Systems
Division, Administrative & Personnel Center andCorporate Communications Division, General
Manager Tokyo Techno Park
Director, Managing Executive Officer, in chargeof internal control & risk management, Corporate
Management Sector
Director, Managing Executive Officer, in chargeof internal control & risk management,
responsible for Administrative & Personnel,
Finance & Accounting, in charge of Information
Systems Division
Representative Director, Senior Managing
Executive Officer, in charge of internal control &risk management, responsible for Finance &Accounting, in charge of Administrative &Personnel Division and Information Systems
Division(to the present)■ Reason for nomination as candidate
Mr. Nobuhisa Ariyoshi, following his engagement mainly inInformation & Advanced Materials and Specialty Chemicals
department, served in important positions in Administrative &Personnel and Information & Advanced Materials department, andwas appointed to be a Director in June 2018, and was in charge ofCorporate Management Sector and Compliance. With his abundant
experience and knowledge of MGC’s business and administration ofmanagement, etc., he has once again been nominated as a candidate
for Director.

10

Number ofshares of MGC
held

18,600(Translation)

No.

Name
(Date of Birth)

Profile, position and responsibility in MGC(Important positions concurrently held at other companies, etc.)
April 1987
June 2013
April 2016

Renomination

April 2018

Kenji Kato
(June 2,1962)
April 2019
June 2019
April 2020
5

April 2021

Joined MGC.
General Manager, Tokyo Research Laboratory,Specialty Chemicals Company
Executive Officer, and Plant Manager, Kashima
Plant, Specialty Chemicals Company
Executive Officer, General Manager, Electronic
Materials Division, Information & Advanced
Materials Company
Managing Executive Officer, President ofInformation & Advanced Materials Company
Director, Managing Executive Officer, Presidentof Information & Advanced Materials Company
Director, Managing Executive Officer, in chargeof Research & Development Sector
Director, Managing Executive Officer,
responsible for Research & Development, incharge of Intellectual Infrastructure Center(to the present)

Number ofshares of MGC
held

19,600Attendance of Board of ■ Reason for nomination as candidate
Directors Meeting
Mr. Kenji Kato, following his engagement in R&D of Specialty(the fiscal year ended
Chemicals, served in important positions in Specialty Chemicals andMarch 31, 2022)
Information & Advanced Materials department, was appointed to be
12 held, 12 attendeda Director in June 2019 and presided over Information & Advanced
Materials department. With his abundant experience and knowledgeof R&D and business management, etc., he has once again been
nominated as a candidate for Director.

April 1985
June 2011
Renomination
Naruyuki Nagaoka(November 20,1962)

April 2016
June 2016
April 2017
June 2019

April 2020
6

June 2020
April 2021

Joined MGC.
Manager, Administrative, Natural Gas Chemicals
Company
Manager, Corporate Planning Division
Audit & Supervisory Board Member of JSP
Corporation
Executive Officer, Manager, Corporate Planning
DivisionManaging Executive Officer, in charge ofCorporate Planning and Purchasing & Logistic
CenterManaging Executive Officer, in charge ofCompliance and Corporate planning Sector
Director, Managing Executive Officer, in chargeof Compliance and Corporate planning Sector
Director, Managing Executive Officer, in chargeof Basic Chemicals Business Sector(to the present)
Attendance of Board of■ Reason for nomination as candidate
Directors Meeting
Mr. Naruyuki Nagaoka, following his engagement mainly in Natural(the fiscal year ended
Gas Chemicals department and Administrative & Personnel, served
March 31, 2022)
in important positions in Natural Gas Chemicals department and
12 held, 12 attended
Corporate planning Division, and was appointed to be a Director in
June 2020. With his abundant experience and knowledge of MGC’s
business and administration of management, etc., he has once again
been nominated as a candidate for Director.

11

14,588

(Translation)

No.

Name
(Date of Birth)

Profile, position and responsibility in MGC(Important positions concurrently held at other companies, etc.)
April 1986
June 2014
April 2018

Renomination
Motoyasu Kitagawa

April 2019

(April 2, 1963)
June 2019
April 2021

7

June 2021

Joined MGC.
President, Mitsubishi Gas Chemical America, Inc.
General Manager, Organic Chemicals Division,
Natural Gas Chemicals Company
Executive Officer, General Manager, Organic
Chemicals Division, Natural Gas Chemicals
Company
Executive Officer, Manager, Corporate Planning
DivisionManaging Executive Officer, in charge ofcompliance, responsible for Corporate Planning, incharge of Internal Audit Division, CSR & IR
Division
Director, Managing Executive Officer, in charge ofcompliance, responsible for Corporate Planning, incharge of Internal Audit Division, CSR & IR
Division(to the present)

Attendance of Board of■ Reason for nomination as candidate
Directors Meeting
Mr. Motoyasu Kitagawa, following his engagement mainly in(the fiscal year ended
Administrative & Personnel department and Corporate planning
March 31, 2022)
Division, served in important positions in Natural Gas Chemicals
9 held, 9 attended
department and Corporate planning Division, and was appointed to
be a Director in June 2021. With his abundant experience andknowledge of MGC’s business and administration of management,
etc., he has once again been nominated as a candidate for Director.

12

Number ofshares of MGC
held

10,324

(Translation)

No.

Name
(Date of Birth)

Profile, position and responsibility in MGC(Important positions concurrently held at other companies, etc.)
April 1988
April 2008

June 2011
New Nomination
Ryozo Yamaguchi(August 24, 1965)

June 2014
April 2016
April 2020

April 2021
8
April 2022

Joined MGC.
General Manager, Mitsubishi Gas Chemical
Shanghai Commerce Ltd., and General Manager,
Shanghai Office, Administrative & Personnel
CenterManager, General Affairs Department,
Administrative & Personnel Center
Manager, Personnel Department, Administrative& Personnel Center
Manager, Administrative & Personnel Center
Executive Officer, Manager, Administrative &Personnel Division, Corporate Management
SectorExecutive Officer, in charge of Administrative &Personnel Division, Manager, Administrative &Personnel Division
Managing Executive Officer, in charge ofSpecialty Chemicals Business Sector(to the present)■ Reason for nomination as candidate
Mr. Ryozo Yamaguchi, following his engagement mainly inSpecialty Chemicals department and Administrative & Personnel
department, served in important positions in Administrative &Personnel department. With his abundant experience andknowledge of MGC’s business and administration of management,
etc., he is deemed to be able to sufficiently carry out his roles as
Director in MGC’s decision making and supervision of management
executives and for this reason he has been nominated as a candidate
for Director.

13

Number ofshares of MGC
held

6,515

(Translation)

No.

Name
(Date of Birth)

Profile, position and responsibility in MGC(Important positions concurrently held at other companies, etc.)
April 1975
February 1989

April 1994
Renomination
Outside Director

April 2001
April 2010

Independent Director
Tsugio Sato

April 2013

(February 20,1951)
August 2013
April 2016
9

June 2017

Assistant, Applied Chemistry, Faculty ofEngineering, Tohoku University
Associate Professor, Molecular Chemistry andEngineering, Faculty of Engineering, Tohoku
University
Professor, Institute for Chemical Reaction
Science, Tohoku University
Professor, Institute of Multidisciplinary Research
for Advanced Materials, Tohoku University
Deputy Director, Institute of Multidisciplinary
Research for Advanced Materials, Tohoku
University
Director, Center for Exploration of New Inorganic
Materials, Institute of Multidisciplinary Research
for Advanced Materials, Tohoku University
Director, The Foundation for Japanese Chemical
Research
Professor Emeritus, Tohoku University(to the present)
Outside Director, MGC(to the present)■ Reason for nomination as candidate
Dr. Tsugio Sato has highly advanced expertise in wide fields ofstudy in chemicals such as inorganic materials chemistry, andprovides appropriate supervision and advice to MGC’s
Attendance of Board ofmanagement, so he has once again been nominated as a candidate
Directors Meetingfor Outside Director. After his election, he is expected to contribute(the fiscal year ended
to ensuring the validity and appropriateness of MGC’s decision
March 31, 2022)
making in the future.
12 held, 12 attended
Although he has not been directly involved in corporate
management, other than as Outside Director of MGC, he has servedin important positions at university research institutions, and it isdeemed that he would continue to perform his duties as Outside
Director appropriately.
Additionally, while there are transactional relationships between
MGC and Tohoku University, where he serves as Professor
Emeritus, including payment of consideration for joint research, theamount during FY2021 was insignificant, totaling ¥7 million.

14

Number ofshares of MGC
held0(Translation)

No.

Name
(Date of Birth)

Renomination
Outside Director
Independent Director
Haruko Hirose( September 23,1945)

10

Profile, position and responsibility in MGC(Important positions concurrently held at other companies, etc.)
December 1968 Appointed to the National Personnel Authority ofJapan
January 1992
Director, Bureau of Human Resources
Management of Headquarters(Paris), United
Nations Educational, Scientific and Cultural
Organization (UNESCO)
September 2002 Deputy to the Director General and Managing
Director of Field Operations Division of
Headquarters(Vienna), United Nations Industrial
Development Organization (UNIDO)
November 2006 Japanese Ambassador Extraordinary andPlenipotentiary to Kingdom of Morocco
April 2013
Specially Appointed Professor, Academy for
Global Leadership Tokyo Institute of Technology
May 2014
President, Japan Morocco Association(to the present)
June 2016
Outside Director, S&B Foods Inc.
(to the present)
April 2017
Director, Ochanomizu University
March 2018
Outside Director, Nikkiso Co., Ltd.
(to the present)
June 2020
Outside Director, MGC(to the present)■ Reason for nomination as candidate
Ms. Haruko Hirose has many years of experience overseas andinsight as director at international organizations on a global scale,and provides appropriate supervision and advice to MGC’s
management, so she has once again been nominated as a candidate
Attendance of Board of
for Outside Director. After her election, she is expected to contribute
Directors Meeting
to ensuring the validity and appropriateness of MGC’s decision(the fiscal year ended
making in the future.
March 31, 2022)
Although she has not been directly involved in corporate
12 held, 12 attended
management, other than as Outside Director, since she has served inimportant positions at an international organization, etc., it isdeemed that she would contribute to ensuring the validity andappropriateness of MGC’s decision making in the future.
Additionally, while there are transactional relationships between
MGC and S&B Foods Inc. where she serves as an outside director,
including the sale of products, the amount was less than 1% ofconsolidated net sales for FY2021. While there are transactional
relationships between MGC and Nikkiso Co., Ltd. where she
serves as an outside director, including the purchase of equipment,
the amount was less than 1% of consolidated net sales of said
company for FY2021.

15

Number ofshares of MGC
held0(Translation)

No.

Name
(Date of Birth)

Profile, position and responsibility in MGC(Important positions concurrently held at other companies, etc.)

Number ofshares of MGC
held

April 1979
April 2011

Renomination
Outside Director
Independent Director
Toru Suzuki(July 14,1955)

11

Joined Mitsui & Co., Ltd.
Managing Officer, Performance Chemicals
Business Unit, Mitsui & Co., Ltd.
April 2014
Managing Officer, Mitsui & Co., Ltd. andPresident of Mitsui & Co. Vietnam Ltd.
April 2015
Executive Managing Officers, Mitsui & Co., Ltd.
and President of Mitsui & Co. Vietnam Ltd.
June 2015
Executive Managing Officers, Chief Regional
Representative of Southwest Asia, Mitsui & Co.,
Ltd., and President of Mitsui & Co. India Pvt Ltd.
June 2017
Audit & Supervisory Board Member, Mitsui
Sugar Co., Ltd.
December 2018 Audit & Supervisory Board Member, Nutri Co.,Ltd.
June 2020
Outside Director, MGC(to the present)■ Reason for nomination as candidate
Mr. Toru Suzuki has many years of experience overseas and insight
as a manager at a company operating on a global scale, and provides
appropriate supervision and advice to MGC’s management, so hehas once again been nominated as a candidate for Outside Director.
After his election, he is expected to contribute to ensuring thevalidity and appropriateness of MGC’s decision making in the
future.
Attendance of Board of
Additionally, although he was a business execution manager until
Directors Meeting
June 2017 at Mitsui & Co., Ltd., a business partner of MGC, over(the fiscal year ended
four years have passed since his retirement. While there are
March 31, 2022)
transactional relationships between MGC and said company
12 held, 12 attended
including the sale of products and materials, the amount was lessthan 1.3% of consolidated net sales of MGC for FY2021. Also,
while there are transactional relationships between MGC and said
company including the purchase of materials, the amount was lessthan 1% of consolidated net sales of said company for FY2021.

16

800

(Translation)

No.

Name
(Date of Birth)

Profile, position and responsibility in MGC(Important positions concurrently held at other companies, etc.)
April 1979
April 2012
April 2013
June 2013

Renomination

April 2016

Outside Director
Independent Director

April 2017

Yasushi Manabe(December 15,1956)
April 2021
June 2021
12

Number ofshares of MGC
held

Joined Hitachi, Ltd.
General Manager, Sales Division Infra System
Group Infra System
Executive Officer, General Manager Kansai Area
Operation, Hitachi, Ltd.
Outside Audit & Supervisory Board Member,
ShinMaywa Industries, Ltd.
Executive General Manager, Deputy Director
General Corporate Sales & Marketing Group,
CMO of Industry & Distribution, Water & Urban
Business Unit, Hitachi, Ltd.
Vice President and Executive Officer, Deputy
Director General Corporate Sales & MarketingGroup, CMO of Industry & Distribution
Business, Water & Urban Business, Hitachi, Ltd.
Executive Advisor, Yashima Denki Co., Ltd.
(to the present)
Outside Director, MGC(to the present)■ Reason for nomination as candidate
Mr. Yasushi Manabe has many years of experience and insight as amanager at a company operating on a global scale, and provides
appropriate supervision and advice to MGC’s management, so hehas once again been nominated as a candidate for Outside Director.
After his election, he is expected to contribute to ensuring thevalidity and appropriateness of MGC’s decision making in the
future.
Additionally, although he was a business execution manager until
Attendance of Board of
March 2021 at Hitachi, Ltd., a business partner of MGC. While
Directors Meeting
there are transactional relationships between MGC and said(the fiscal year ended
company including the sale of products, the amount was less thanMarch 31, 2022)
1% of consolidated net sales of MGC for FY2021. Also, while there
9 held, 9 attended
are transactional relationships between MGC and said company
including equipment maintenance, the amount was less than 1% ofconsolidated net sales of said company for FY2021.
Although he is Executive Advisor, Yashima Denki Co., Ltd., abusiness partner of MGC. While there are transactional
relationships between MGC and said company including thepurchase of machines, the amount was less than 1% of consolidated
net sales of said company for FY2021.

400(Notes) 1. No conflict of interest exists between MGC and any of these candidates.
2. Ms. Haruko Hirose is scheduled to resign from her position of Outside Director in S&B Foods Inc. on
June, 29, 2022.
3. Ms. Haruko Hirose is listed as above in her preferred name. Her name in the family register is Haruko
Makinouchi.
4. Of the candidates, Dr. Tsugio Sato, Ms. Haruko Hirose, Mr. Toru Suzuki and Mr. Yasushi Manabe arenominated as Outside Directors.
5. Dr. Tsugio Sato will have been in office as Outside Director for five years as of the close of thisOrdinary General Meeting of Shareholders. Ms. Haruko Hirose and Mr. Toru Suzuki will have been
in office as Outside Director for two years as of the close of this Ordinary General Meeting of
Shareholders. Mr. Yasushi Manabe will have been in office as Outside Director for one year as of theclose of this Ordinary General Meeting of Shareholders.
6. MGC has executed Limitation of Liability Agreements with Dr. Tsugio Sato, Ms. Haruko Hirose, Mr.
17

(Translation)
Toru Suzuki and Mr. Yasushi Manabe, currently MGC’s Outside Directors, limiting their liabilities
pursuant to Article 423 Paragraph 1 of the Companies Act to the maximum amount stipulated by theCompanies Act. Aforementioned Limitation of Liability Agreements will be extended in the event
their re-elections are approved.
7. MGC has registered Dr. Tsugio Sato, Ms. Haruko Hirose, Mr. Toru Suzuki and Mr. Yasushi Manabe
as independent director at Tokyo Stock Exchange, Inc. and will continue to register them as such in
the event their re-elections are approved.
8. MGC has entered into a directors and officers liability insurance agreement with an insurance company
pursuant to Article 430-3, Paragraph 1 of the Companies Act. The content of the insurance agreement
is as stated on “3. Information Concerning Corporate Officers” in the Business Report. The respective
candidates for Director are to be included as insured parties under the insurance agreement in the event
their elections are approved. Furthermore, MGC plans to leave the content of the insurance policy
unchanged upon its next renewal.

18

(Translation)

Proposal No. 3: Election of One Audit & Supervisory Board Member
Audit & Supervisory Board Member Mr. Takashi Kimura will resign from his position as of the close of thisOrdinary General Meeting of Shareholders. Therefore, it is proposed that one Audit & Supervisory Board
Member be elected. Mr. Go Watanabe is intended to succeed to the position of Mr. Takashi Kimura, and the termof his office also dates from the date of his succession to his predecessor according to the Articles of Incorporationof MGC.
The Audit & Supervisory Board has already given consent to this proposal.
The candidate is as follows:
Name(Date of Birth)

Profile and position in MGC(Important positions concurrently held at other companies, etc.)

Number ofshares of
MGC held

April 1982
June 2009

New Nomination
Outside Audit &Supervisory
Board Member
Independent Audit& Supervisory
Board Member

Go Watanabe(September 19, 1958)

Joined The Mitsubishi Bank, Ltd.
Executive Officer of The Bank of Tokyo-Mitsubishi UFJ,
Ltd.(BTMU), Deputy President, General Manager of
Shanghai Branch of The Bank of Tokyo-Mitsubishi UFJ(China), Ltd.
July 2011
Executive Officer, General Manager, Global Corporate
Banking Division of BTMUMay 2012
Managing Executive Officer, Group Head, Nagoya
Corporate Banking Group of BTMU
June 2013
Managing Executive Officer, Chief Executive Officer for
Asia and Oceania of BTMU
July 2016
First Senior Vice President of Nidec Corporation
September 2020 Chairman and Representative Director, MST Insurance
Service Co., Ltd.
(to the present)
June 2021
Outside Director, Mitsubishi HC Capital Inc.
(to the present)■ Reason for nomination as candidate
Mr. Go Watanabe has abundant experience and insight as a manager at afinancial institution and a manufacturing industry etc., both in Japan andoverseas. Since it is deemed that he would possess sufficient insight andknowledge essential for Audit & Supervisory Board Member to be
responsible for ensuring the lawfulness and appropriateness of the executionof Directors' duties, therefore, he has been nominated as a candidate for Audit& Supervisory Board Member.
Additionally, although he was a business executive manager until June 2016
at The Bank of Tokyo-Mitsubishi UFJ (currently MUFG Bank, Ltd.), abusiness partner of MGC, over five years have passed since his retirement.
While there are transactional relationships between MGC and said company
including the borrowing of funds, the amount of borrowings from said
company was less than 3.3% of consolidated total assets as of March 31,
2022. Furthermore, although said company holds shares in MGC, thepercentage is 1.2% of issued and outstanding shares. Furthermore, while there
are transactional relationships between MGC and Mitsubishi HC Capital Inc.
where he serves as an outside director, including the equipment leasing, theamount was less than 1% of consolidated net sales for FY2021.

0(Note) 1. No conflict of interests exists between MGC and the candidate.
2. Mr. Go Watanabe is scheduled to resign from his position of Chairman and Representative Director in
MST Insurance Service Co., Ltd. on June, 27, 2022.
3. Mr. Go Watanabe is nominated as Outside Audit & Supervisory Board Member.
4. In the event the election of Mr. Go Watanabe is approved, MGC is scheduled to conclude an identical
Limitation of Liability Agreement with him, limiting his liabilities pursuant to Article 423 Paragraph
1 of the Companies Act to the maximum amount stipulated by the Companies Act.
19

(Translation)

5. In the event the election of Mr. Go Watanabe is approved, MGC will also register him as anindependent auditor at Tokyo Stock Exchange, Inc..
6. MGC has entered into a directors and officers liability insurance agreement with an insurance company
pursuant to Article 430-3, Paragraph 1 of the Companies Act. The content of the insurance agreement
is as stated on “3. Information Concerning Corporate Officers” in the Business Report. The candidate
for Audit & Supervisory Board Member is to be included as insured parties under the insurance
agreement in the event his election is approved. Furthermore, MGC plans to leave the content of theinsurance policy unchanged upon its next renewal.

20

(Translation)(Reference) MGC Standards on Independence for Outside Corporate Officers
A candidate is deemed to qualify as an independent officer as long as none of the following matters apply.
1. If any of the following applies to the candidate.
1) Has been a business execution manager (*1) of the MGC Group (*2).
2) Is a major shareholder of MGC (*3) or is or has been a business execution manager for a major shareholder
company within the previous five years.
3) Is or has been a business execution manager within the previous five years of an important business partner (*4).
4) Has been dispatched from a company or organization that has established a relationship with the MGC Groupthrough the reciprocal appointment of outside officers.
5) Works for or has worked for an accounting firm within the previous five years that has conducted a statutory
audit of MGC.
6) Provides or has provided consulting services other than statutory auditing to the MGC Group within the previous
three years, for which he or she has received high compensation (*5).
2. If any of the following applies to a close relation (*6) of the candidate.
1) Is or has been an important business execution manager (*7) of the MGC Group within the previous five years.
2) Is a major shareholder of MGC or a business execution manager for a major shareholder company.
3) Is or has been a business execution manager within the previous five years of an important business partner.
4) Works for or has worked for an accounting firm within the previous five years that has conducted a statutory
audit of MGC.
5) Provides or has provided consulting services other than statutory auditing to the MGC Group within the previous
three years, for which he or she has received high compensation.
3. The candidate has another important vested interest in the MGC Group and has been reasonably deemed to be unable
to fulfill his or her duties as an independent officer.
(*1)

Business execution manager: Either a Director overseeing business execution, an Executive Officer, other officer
involved in business execution, or an employee.

(*2)

MGC Group: MGC or one of its subsidiaries.

(*3)

Major shareholder of MGC: A shareholder currently holding, either directly or indirectly, 10% or more of total
shares issued and outstanding.

(*4)

Important business partner: A business partner that has made transactions, including buying and selling, amounting
to 2% or more of consolidated net sales over the previous three consecutive years. Consolidated net sales pertains
to the MGC Group in the event the MGC Group is the seller, or to the partner in the event the MGC Group is thebuyer.

(*5) High compensation: In the case of an individual, an annual amount of 10 million yen or more, or in the case of amember of company or organization, compensation exceeding 2% of its consolidated net sales or total revenue.
(*6) Close relation: Either a spouse, first- or second-degree relative, or financial dependent.
(*7) Important business execution manager: Either a Director overseeing business execution, an Executive Officer, orother officer involved in business execution.

21

BUSINESS REPORT(From April 1, 2021 to March 31, 2022)
1. Review of Results(1) Overview of results
During the fiscal year ended March 31, 2022 (April 1, 2021 – March 31, 2022), outlook for theworld economy remained unstable despite glimmers of economic recovery from pandemic-induced
stagnation. With the ongoing impact of logistics disruptions and semiconductor shortages alreadyhindering economic activities, the eruption of the Russia-Ukraine conflict has caused raw material andfuel prices to surge sharply, while the depreciation of the yen has become more drastic.
Against this backdrop, the MGC Group nevertheless benefitted from constantly robust demand forsemiconductor-related products reflecting market growth as well as recovery in demand forautomotive-related and other products that had been heavily affected by the novel coronavirus
pandemic, along with improvement in market prices for general-purpose products, such as methanol,
amid rises in raw material and fuel prices.
In addition, the MGC Group launched a medium-term management plan in April 2021. In line withthis plan, the Group aims to shift to a profit structure resilient to changes in the business environment.
To this end, the Group is striving to:･“Further strengthen competitively advantageous (“differentiating”) businesses,”･“Accelerate creation and development of new businesses,” and･“Reevaluate and rebuild unprofitable businesses.”
These efforts will help push ahead with business portfolio reforms.
The MGC Group’s net sales increased due mainly to upturns in market prices for methanol andother offerings as well as recovery in overall sales volume.
Furthermore, operating income rose, despite increases in raw material and fuel prices, lower sales
volumes of optical polymers and other negative factors affecting profit. This was thanks primarily tothe higher sales volumes of semiconductor-related products, recovery in demand for products that had
been affected by fallout from the novel coronavirus pandemic, and rising market prices for generalpurpose products.
Ordinary income increased due primarily to higher operating income as well as growth in equity inearnings of affiliates related to engineering plastics and overseas methanol producing companies.
Net income attributable to owners of the parent grew, mainly on higher ordinary income, despite anincrease in extraordinary losses reflecting such factors as the recording of an impairment loss inconnection with business restructuring and other measures.
In fiscal 2021, the MGC Group achieved ¥705.6 billion in consolidated net sales, an increase of¥109.9 billion (18.5%) from the previous year, consolidated operating income of ¥55.3 billion, an
increase of ¥10.8 billion (24.4%), equity in earnings of affiliates of ¥14.8 billion, an increase of ¥9.7
billion (188.3%), consolidated ordinary income of ¥74.1 billion, an increase of ¥23.9 billion (47.6%)
and net income attributable to owners of the parent of ¥48.2 billion, an increase of ¥12.2 billion(33.9%).
(2) Results by business segment
Please note, the MGC Group revised the definition of its reportable segments in the first quarter ofthe fiscal year ended March 31, 2022. To provide comparative year-on-year segment results, the Group

22

(Translation)
has restated the operating results of the previous fiscal year to reflect the revised segmentation.
Basic Chemicals
Main businesses

Methanol, Methanol/Ammonia Based Chemicals, High-performance
products, Xylene separators and derivatives, Foamed Plastics,
Development and Sales of Resources, Life Science Related Products

The methanol business saw increases in both net sales and earnings due mainly to a significant
upturn in market prices compared with the previous fiscal year.
Methanol and ammonia-based chemicals posted increases in net sales and earnings reflecting suchfactors as a rise in neopentyl glycol market prices and a decrease in repair costs, despite higher raw
material prices.
High-performance products*1 posted increases in net sales and earnings thanks primarily to recovery
in demand for meta-xylenediamine (MXDA), which had been affected by fallout from the novel
coronavirus pandemic in the same period of the previous fiscal year, along with firm sales of aromatic
aldehydes.
Xylene separators and derivatives*2 saw increase in net sales and earnings due mainly to upturns inpurified isophthalic acid (PIA) market prices.
Foamed plastics posted a decrease in earnings compared with the previous fiscal year, due mainly
to higher raw material and fuel prices, despite the higher sales volume of flat panel display shields andautomotive materials.
*1

MXDA, MX nylon, aromatic aldehydes and other offerings that had been previously classified
as specialty aromatic chemicals*2 Meta-xylene, PIA and other offerings that had been previously classified as general-purpose
aromatic chemicals
In fiscal 2021, Basic Chemicals Business achieved consolidated net sales of ¥419.9 billion, an
increase of ¥91.8 billion (28.0%) from the previous year, operating income of ¥25.7 billion, an increaseof ¥12.9 billion (101.0%) and ordinary income of ¥30.0 billion, an increase of ¥15.8 billion (111.3%).
Specialty Chemicals
Main Businesses

Inorganic Chemicals, Engineering Plastics, Optical Materials,
Electronics Materials, Oxygen Absorbers (AGELESSTM)

Inorganic chemicals posted increases in net sales and earnings thanks primarily to growth in thesales volume of chemicals for use in semiconductor manufacturing.
Engineering plastics saw increases in net sales and earnings, despite deterioration in the profitabilityof polycarbonates on the back of such negative factors as higher raw material and fuel prices, due
mainly to robust sales of polyacetal in addition to recovery in sales volumes in automotive-related andother fields.
Optical materials posted decreases in net sales and earnings, despite recovery in optical polymer
demand, which bottomed out in the first quarter. The decreases were due mainly to lower sales volumereflecting inventory adjustment carried out by customers during the first half.
Electronic materials saw increases in net sales and earnings. This was thanks mainly to robust
showings of BT materials for IC plastic packaging, the core product category for electronic materials,
reflecting constantly robust demand for products used in memory devices and 5G smartphones, alongwith higher sales volumes, especially in the first half, for general-purpose materials for a broad range
of applications including PC-related devices and home appliances.
Oxygen absorbers such as AGELESSTM posted an increase in earnings, thanks mainly to recovery23

(Translation)in domestic demand for products used for foodstuffs, achieving an improvement from the stagnation
brought about by the novel coronavirus pandemic in the previous fiscal year.
In fiscal 2021, Specialty Chemicals Business achieved consolidated net sales of ¥285.4 billion, an
increase of ¥17.9 billion (6.7%) from the previous year and operating income of ¥33.6 billion, adecrease of ¥1.1 billion (3.4%) and ordinary income of ¥45.4 billion, an increase of ¥7.8 billion(21.0%).
Other
Main Businesses

Real estate business, etc.

Other business remained unchanged, with net sales of ¥0.2 billion, business loss operating income
was ¥0.0 billion, and ordinary income was ¥0.0 billion.

Sales by Business Segment

Segment

FY2020

FY2021(April 2020 - March 2021)(April 2021 - March 2022)

Sales
AmountSales
Amount(millions of yen)

Percentage
Total (%)

(millions of yen)

Percentage
Total (%)

Year-on-Year
Increase/
Decrease (%)

Basic Chemicals

328,07855.1

419,959

59.5

28.0

Specialty Chemicals

267,45744.9

285,419

40.4

6.7

340

0.0

277

0.0

△18.6

△158

△0.0

△0

△0.0

-

595,718100.0

705,656

100.0

18.5

Other
Adjustment
Total

Note: 1. Since FY2021 MGC has reviewed its business segmentation method and changed the energy related
business that was included in the “Other” to the “Basic Chemicals.” The comparisons above were madeupon having reclassified figures for FY2020 using the updated business segment categories.
2. Since the beginning of FY2021 MGC applies the “Accounting Standard for Revenue Recognition” (ASBJ
Statement No. 29, March 31, 2020), and the like.

(3) Capital Expenditures
Capital expenditures for the current fiscal year were made largely in relation to reinforcing the
production capabilities for existing products and maintaining/renovating equipment and facilities.
Major expenditures incurred are as follows:
1) Major facilities completed during the current fiscal year
No applicable items.
2) Construction initiated or continuing through the current fiscal year
MGC Pure Chemicals Taiwan, Inc.
・Production facility for industrial hydrogen peroxide (Specialty Chemicals)
Taixing MGC Lingsu Co., Ltd.
・Production facility for hydrogen peroxide, performance chemicals(Specialty Chemicals)24

(Translation)
Niigata Plant
・Production facility for material monomer of optical resin polymer (Specialty Chemicals)
MGC SPECIALTY CHEMICALS NETHERLANDS B.V.
・Manufacture and sale of meta-xylenediamine (Basic Chemicals)(4) Funding
The funds for equipment and facilities as well as for working capital for the current fiscal year were
provided by MGC’s own resources, borrowings from financial institutions and issuance of short-term
corporate bonds.
(5) Operations Results and Financial Position
1) MGC Group (consolidated basis)
FY2018Classification
April 2018 –FY2019(Millions of yen)
FY2020
FY2021March 2019

April 2019 –March 2020

April 2020 –March 2021

April 2021 –March 2022

Sales

648,986

613,344595,718

705,656

Ordinary income

69,19931,11650,24074,152

Profit attributable to owners ofparent(Mitsubishi Gas Chemical)
Net income per Share (yen)55,00021,15836,07048,295257.46100.50173.41

232.15

Total assets

804,038

771,733

836,364

928,651

Net assets

553,282

548,141

581,411

630,887

Note: Since the beginning of FY2021, MGC applies the “Accounting Standard for Revenue Recognition” (ASBJ
Statement No. 29, March 31, 2020), etc. and the major management indicators for the fiscal year are theindicators after the application of the relevant accounting standards.

2) MGC (Non-consolidated basis)
FY2018FY2019(Millions of yen)
FY2020
FY2021

April 2018 –March 2019

April 2019 –March 2020

April 2020 –March 2021

April 2021 –March 2022

Sales

375,129

351,348

344,898

427,927

Ordinary income

41,32930,06626,443

46,116

Net income

34,69029,332

23,96635,812

Net income per Share (yen)162.39139.33115.22

172.15

Total assets

457,427

425,713469,634

529,631

Net assets

291,198

290,955

306,478

323,002

Classification

Note: Since the beginning of FY2021, MGC applies the “Accounting Standard for Revenue Recognition” (ASBJ
Statement No. 29, March 31, 2020), etc. and the major management indicators for the fiscal year are theindicators after the application of the relevant accounting standards.

(6) Key Challenges for the Mitsubishi Gas Chemical Group1) State of progress in important measures as of the end of FY2021
Launched in fiscal 2021, Medium-Term Management Plan, “Grow UP 2023”, establishes two
objectives under the MGC Way, the new MGC Group philosophy. The objectives involve “Shiftto a profit structure resilient to environmental changes” and “Balance social and economic value.”
MGC will pursue strategies to achieve these objectives comprised of three items for each.

25

(Translation)◆Medium-Term Management Plan “Grow UP 2023”● Objective 1

Shift to a Profit Structure Resilient to Environmental Changes: Business Portfolio Reform■ Strategies– Further strengthen competitively advantageous (“differentiating”) businesses– Accelerate creation and development of new businesses– Reevaluate and rebuild unprofitable businesses

To move forward with business portfolio reforms under the Plan, the MGC Group hasreevaluated its business categories, classifying those businesses with both competitive advantage
and growth potential as “differentiating businesses”. The MGC Group is developing a broad
range of differentiating businesses in chemicals and materials, these include meta-xylenediamine(MXDA), MX-Nylon, aromatic aldehydes and polyacetal (POM) and further specialty products
include electronics chemicals, BT-related material, optical resin polymers and ultra-highrefractive lens monomers. The MGC Group will continue to focus management resources onthese differentiating businesses, further strengthening profitability.
During fiscal 2021, the Group established MGC SPECIALTY CHEMICALSNETHERLANDS B.V., a wholly owned MXDA manufacturing subsidiary of MGC, in
Rotterdam, Kingdom of the Netherlands. It also decided that Global Polyacetal Co., Ltd., awholly owned subsidiary of MGC, would succeed the Group’s POM business, etc., with the aimof further strengthening the integrated management of these businesses. Moreover, the Group
determined to acquire an additional 25% equity stake in Mitsubishi Engineering-Plastics
Corporation (MEP), an equity-method affiliate of MGC, effective April 3, 2023, with the aim ofboosting its competitiveness in polycarbonate (PC)-related businesses, designated as foundation
businesses.
It is also engaged in initiatives to “accelerate creation and development of new businesses.”During fiscal 2021, it actively invested in R&D, increased the number of research personnel, andestablished a NEXX Technologies Advanced Materials Business Unit at Mitsubishi Gas
Chemical America, Inc., a subsidiary of MGC, with the aim of opening up the United Statescomposite materials market with prepreg products.
The Group’s initiatives to reevaluate and rebuild unprofitable businesses include its decisions
to cease production of formalin at the Yokkaichi Plant from around August 2022, and cease
production of formalin, paraformaldehyde, and hexamine at the Niigata Plant from around May
2023. After ceasing production of trimethylolpropane at the Mizushima Plant, the Group isproceeding to reevaluate and rebuild the formalin and polyol product group. Meanwhile, it aims
to gain a competitive advantage by building an integrated production system extending fromformalin raw materials to wood adhesives through the acquisition of the shares of J-CHEMICAL,
Inc. and its conversion to a wholly owned subsidiary (J-CHEMICAL, Inc. and Yutaka Chemicals
Corporation were merged and renamed MGC Woodchem Corporation in April 2022), totransform the formalin business into a stable earnings base.
By implementing these strategies, the MGC Group attempts to shift to a profit structure that isresilient to environmental changes. Specifically, by fiscal 2023, the Group aims to have morethan 40% of overall sales come from differentiating businesses, and for unprofitable businessesor those needing rebuilding to represent less than 3% of total sales.
● Objective 2

Balance Social and Economic Value: Toward Sustainable Growth■ Strategies– Solve social issues through business– Harmonize shared-value creation with environmental protection– Strengthen discipline and foundation supporting business activities

26

(Translation)

Three strategies will be executed with the goal of balancing social and economic value.
In April 2020, MGC identified materiality--priority issues for management--in line withformulating a medium-term management plan, it has also established new fiscal 2030 targets toallow the company to make steady progress in materiality management, and has set new key
performance indicators (KPIs) for fiscal 2023 aimed at achieving those targets. Specifically, KPIs
have been set for GHG emission reductions aimed at air quality control, and for investments andR&D expenditures aimed at solving energy and climate change-related problems. MGC will tie
this kind of materiality management to sustainable growth.
2) Future initiatives
The business environment remains unpredictable, with the recent rise in geopolitical risks
associated with the situation in Ukraine in addition to restrictions on economic activity due to theprolonged COVID-19 pandemic and the impact of semiconductor shortages on production
activities. The MGC Group will nevertheless strive as one to achieve the financial targets set forth
under the Plan.
Specifically, the Group will aim to achieve Objective 1, “Shift to a Profit Structure Resilient
to Environmental Changes,” by continuing to engage in active investment focused on its
differentiated products, primarily MXDA, electronics chemicals, and BT-related materials, andproceeding with the priority allocation of management resources. In addition, it will also pursue
measures to bring about a further shift to high value-added products and greater efficiency forother core products such as PC-related products and methanol. The Group will continue with thestructural reform and reevaluation of businesses with profitability issues, primarily formalin andpolyol-related businesses, aiming to exit from unprofitable businesses and those requiring
rebuilding. Meanwhile, the Group will also proceed with the active injection of R&D resources
aimed at creating and developing new, next-generation businesses.
Under the Group’s proclaimed mission, “creating value to share with society,” it will aim toachieve Objective 2, “Balance Social and Economic Value,” through materiality management, torealize sustainable growth. Its initiatives to achieve carbon-neutral status, in particular, aredesignated as strategic priorities for MGC’s management. The Group will utilize its unique,innovative technologies to develop products and technologies to contribute to carbon-neutral,
while also engaging in the reduction of GHG emissions.
◆ Reference: Disclosure based on the TCFD (Task Force on Climate-related Financial
Disclosures) Recommendations, and response to the marine plastics issue, etc.
MGC endorsed the TCFD Recommendations in May 2019. In addition to assessing the risks
and opportunities for the MGC Group arising from climate change and strengthening the Group’s
resilience through scenario analysis, MGC is engaged in promoting sound dialogue with its
stakeholders. In fiscal 2021, MGC implemented scenario analysis for the polycarbonates and
MXDA businesses, confirming that tackling issues such as recycling would mitigate financial
impact under the decarbonization scenario.
Key CSR issues such as climate change risk are considered by an advisory body with the
involvement of the heads of head office administrative departments, before being deliberated on
and decided by the CSR Council, which is chaired by the President and mainly composed of all
Directors including Outside Directors as well as being attended by Audit & Supervisory Board
Members.
In March 2022, the MGC Group announced its goal of achieving carbon neutrality by 2050, in
an effort to contribute to keeping global warming within 2℃.
In implementing this initiative, the Group will leverage the development of its existing
businesses, where it has strength, and its R&D capabilities. It will also promote collaboration
with other MGC Group businesses and external entity to target specific reductions throughmeasures such as the use of electric power generated using LNG, which has low GHG emissions,
during the transitional phase, the introduction of renewable energy, and the installation of carbon-

27

(Translation)
free energy systems and CCUS*, striving to achieve its goal of reducing emissions by 36% by2030 and attaining carbon-neutral status by 2050.
The processing and reuse of waste plastics is another issue that has gained worldwide
recognition, most prominently in the case of marine plastics. In terms of recycling and materials
circulation, the MGC Group not only develops recycling technologies, materials technologies foreasy recycling, and readily-degradable bioplastics, but is also engaged in autonomous initiatives
to collect and recycle the waste materials produced when customers use MGC Group products.
The Group will be also responding to the issue of waste plastics by actively participating insimilar initiatives by industry bodies.
* CCUS (Carbon dioxide Capture, Utilization and Storage) refers to technologies used to captureand store CO2 emissions and to utilize the stored CO2 as a raw material for chemicals and otherproducts.
Plans and descriptions concerning the future such as target values provided in “Key Challenges
for the Mitsubishi Gas Chemical Group” are based on information available to the Group as ofthe date of preparation of this document and certain assumptions which the Group deems
reasonable, and therefore include uncertainties. Actual results may differ significantly from theseprojections due to various factors.
(7) Major Places of Business of Mitsubishi Gas Chemical (As of March 31, 2022)
1) MGC
Head Office:Research Institutes:

Plants:Name
Location
5-2, Marunouchi 2-chome, Chiyoda-ku, Tokyo, JapanTokyo Research Laboratory
Tokyo Prefecture
Niigata Research Laboratory
Niigata Prefecture
Hiratsuka Research Laboratory
Kanagawa Prefecture
Niigata Plant
Niigata Prefecture
Mizushima Plant
Okayama Prefecture
Yokkaichi Plant
Mie Prefecture
Yamakita Plant
Kanagawa Prefecture
Kashima Plant
Ibaraki Prefecture
QOL Innovation Center Shirakawa Fukushima Prefecture28

(Translation)2) Subsidiaries
Company Name
Eiwa Chemical Industry Co., Ltd.
Toho Earthtech, Inc.
Japan Finechem Co., Inc.
Japan U-pica Co. Ltd.
Mitsubishi Gas Chemical Trading, Inc.
Yutaka Chemical Corporation
Yonezawa Dia Electronics Co., Inc.
J-Chemical, Inc.
JSP Corporation
MGC Advance Co., Ltd.
MGC Energy Company Limited
MGC Electrotechno Co., Ltd.
MGC Terminal Co., Inc.
MGC Filsheet Co., Ltd.
MGC Advanced Polymers Inc.
MGC Pure Chemicals America, Inc.
Mitsubishi Gas Chemical America, Inc.
MGC Specialty Chemicals Netherlands B.V.
MGC Pure Chemicals Singapore Pte. Ltd.
Mitsubishi Gas Chemical Singapore Pte. Ltd.
Ageless (Thailand) Co., Ltd.
MGC Electrotechno (Thailand) Co., Ltd.
Thai Polyacetal Co., Ltd.
Mitsubishi Gas Chemical EngineeringPlastics (Shanghai) Co., Ltd.
MGC Pure Chemicals Taiwan, Inc.
Samyoung Pure Chemicals Co., Ltd.

Head Office
Kyoto
Niigata
Tokyo
Tokyo
Tokyo
Tokyo
Yamagata
Tokyo
Tokyo
Niigata
Tokyo
Tokyo
Tokyo
Saitama
U.S.A.
U.S.A.
U.S.A.
Netherlands
Singapore
Singapore
ThailandThailandThailandBusiness and Production Site
Aichi Prefecture, etc.
Tokyo Prefecture, etc.
Kagawa Prefecture, etc.
Yamaguchi Prefecture, etc.
Osaka Prefecture, etc.
Kanagawa Prefecture, etc.
--Shizuoka Prefecture, etc.
Tochigi Prefecture, etc.
Niigata Prefecture, etc.
--Fukushima Prefecture
Hiroshima Prefecture, etc.
Osaka Prefecture, etc.
--U.S.A.
------------Thailand

China

---

Taiwan
Korea--Korea(8) Number of Employees (As of March 31, 2022)
1) MGC Group (Consolidated)
Segment
Basic Chemicals
Specialty Chemicals
Other
Corporate (Shared)
Total

Numberof Employees
5,559
3,872
22
435

Change fromEnd of FY2020
543
339
△113
121

9,888

890

Notes:1. Only employees working within the Group are included in the headcount (excludes individuals on
assignment from the Group to companies outside of the Group and includes individuals on assignment
from outside of the Group to companies within the Group).
2. The employees in the Corporate (Shared) segment are individuals who belong to administrative
departments that cannot be classified into specific business segments.
3. As a result of the acquisition of MGC Ageless Co., Ltd. as a consolidated subsidiary in April 2021, thatcompany’s employees added to the number of employees in Specialty Chemicals.
4. As a result of the merger of the consolidated subsidiary MGC Advance Chemical Inc. and the nonconsolidated subsidiaries Nisshin Unyu Co., Ltd. and MGC Engineering Co., Ltd. in April 2021, theemployees of the previously non-consolidated subsidiaries added to the number of employees in Basic
Chemicals.

29

(Translation)2) MGC (Non-Consolidated)
NumberChange fromof Employees
End of FY2020
2,461

Average Age
40 years old and9 monthIncrease by 34

Average Duration in
Employment
17 years and8 month

Note: Only employees working within MGC are included in the headcount (excludes individuals on assignment from
MGC to other companies and includes individuals on assignment from other companies to MGC).

(9) Major Subsidiaries and Affiliates (As of March 31, 2022)
Company

Issued Share Capital(millions of yen)

Ratio of
VotingRights (%)

Principal Business
Manufacture and sale of blowing agents,
blowing agent activators, and resin
processing products
Production and sale of natural gas andiodine, and Seismic reinforcement works
Manufacture and sale of organic synthetic
chemicals, including polymeric initiatorsand raw materials for agrichemicals, andelectronics parts
Manufacture and sale of unsaturated
polyester resins, coating resins, andmethacrylic acid esters

Eiwa Chemical Industry
Co., Ltd.

420

90.9

Toho Earthtech, Inc.

240

50.1

Japan Finechem Co., Inc.

274

100.0

Japan U-Pica Co., Ltd.

1,100

70.0

210

100.0

Sale of chemicals and other products

100.0(50.0)
100.0(100.0)
100.0
54.0
(0.2)

Manufacture of wood adhesives andformalins

Mitsubishi Gas Chemical
Trading, Inc.
Yutaka Chemical
Corporation
Yonezawa Dia
Electronics Co., Inc.
J-Chemical Inc.
JSP Corporation

80
90
90

100

MGC Energy Co., Ltd.
MGC Electrotechno Co.,
Ltd.

5
500

MGC Terminal Co., Inc.

100

MGC Filsheet Co., Ltd.

50

MGC Advanced
Polymers Inc.
MGC Pure Chemicals
America, Inc.
Mitsubishi Gas Chemical
America, Inc.
MGC Specialty
Chemicals Netherlands
B.V.
MGC Pure Chemicals
Singapore Pte. Ltd.

Sale of wood adhesives and formalins

Manufacture and sale of foamed polystyrene
and foamed polyolefin
Transportation storage, Manufacturing and87.1
sale of Life Science Products, Engineering(5.0)
maintenance100.0 Procurement and sales of electricity

10,128MGC Advance Co., Ltd.

Manufacturing of Mass lamination board
and LE sheet, entry sheet for PWB drilling

100.0
100.0
(14.2)
100.0(45.4)
100.0(50.0)
100.0(20.0)(thousands of USD)

6,000
(thousands of USD)

5,000

Manufacture and sale of printed circuitboard materials
Storage services for methanol
Manufacture and sale of polycarbonate
sheets/films
Manufacture and sale of MX-Nylon
Manufacture and sale of super purehydrogen peroxide and other products(thousands of USD)

100.0

1,084
(millions of Euro)

100.0

20
(thousands of USD)

Sale of chemicals and other products
Manufacture and sale of meta-

xylenediamine

100.0 Manufacture and sale of super pure(10.0) hydrogen peroxide and other products

7,106

30

(Translation)

Issued Share CapitalCompany(millions of yen)

Mitsubishi Gas Chemical
Singapore Pte. Ltd.
Ageless (Thailand) Co.,Ltd.
MGC Electrotechno(Thailand) Co., Ltd.

Ratio of
VotingRights (%)

Principal Business(thousands of USD)

1,161

100.0

Sale of chemicals and other products

100.0

Manufacture and sale of Oxygen Absorbers(millions of THB)

250
(millions of THB)

100.0
Manufacture of Copper Clad Laminates(100.0)710(millions of THB)

Thai Polyacetal Co., Ltd.
Mitsubishi Gas Chemical
Engineering-Plastics(Shanghai) Co., Ltd.
MGC Pure Chemicals
Taiwan, Inc.
Samyoung Pure
Chemicals Co., Ltd.

840

70.0

Manufacture and sale of polyacetal resins

91.0

Manufacture and sale of polycarbonate
resins(millions of RMB)

1,504
(millions of NTD)

100.0

80
(millions of KRW)

51.0

3,500

Manufacture and sale of super purehydrogen peroxide and other products
Manufacture and sale of super purehydrogen peroxide and other products
Manufacture and sale of magneto-optics
crystalGranopt Co., Ltd.

150

49.0

CG Ester Corporation

450

50.0

Manufacture and sale of plasticizers

Kokuka Sangyo Co., Ltd

100

50.0

Shipping of chemical products

2,310

47.4

Import and sale of methanol, and investment
in and finance for foreign companies

3,000

50.0

Sale and manufacture of engineering plastics

300

45.0

Manufacture and sale of electric/electronic
related materials and their applied products

50.0

Manufacture and sale of methanol

Japan Saudi Arabia
Methanol Co., Inc.
Mitsubishi EngineeringPlastics Corporation
Ryoden Kasei Co., Ltd
Brunei Methanol
Company Sdn. Bhd.

(thousands of USD)Tai Hong Circuit
Industrial Co., Ltd.

(millions of NTD)

Korea Engineering
Plastics Co., Ltd.

(millions of KRW)

189,400

Manufacture and sale of printed circuitboards (single-sided boards, double-sided
boards, and double layer boards)
50.0 Manufacture and sale of engineering(10.0) plastics, mainly polyacetal resins

50.0

1,104
12,600Note: The figures in parentheses represent the percentage of voting rights indirectly held by MGC's subsidiaries,
included in totals.

(10) Major Lenders (As of March 31, 2022)(Millions of yen)

LenderBalance of Borrowings

MUFG Bank, Ltd.

30,040Development Bank of Japan Inc.

11,545

Mizuho Bank, Ltd.

9,229

The Norinchukin Bank

6,422

Nippon Life Insurance Company

5,765

The Bank of Yokohama, Ltd.

5,271

31

(Translation)
2. Information Concerning Stock (As of March 31, 2022)(1) Authorized Shares

492,428,000 (No change from end of FY2020)(2) Issued and Outstanding Shares

225,739,199 (No change from end of FY2020)(3) Number of Shareholders

32,175 (Increase by 10,590 from end of FY2020)(4) Principal Shareholders (ten largest shareholders)
Investment to MGC
Number of
Shares Held

Name of shareholder(thousands Shares)

Percentage to
Total Shares
Outstanding (%)

The Master Trust Bank of Japan, Ltd. (Trust account)

35,163

16.9

Custody Bank of Japan, Ltd. (Trust account)

17,472

8.4

Meiji Yasuda Life Insurance Company

8,797

4.2

Nippon Life Insurance Company

7,326

3.5

The Norinchukin Bank

5,026

2.4

AGC Inc.

3,929

1.8

Custody Bank of Japan, Ltd. (Trust account 4)

3,574

1.7

The Bank of Yokohama, Ltd.

3,085

1.4

JPMorgan Securities Japan Co., Ltd.

3,076

1.4

MUFG Bank, Ltd.

2,700

1.3

Notes: 1. MGC holds 17,693 thousands shares of treasury shares, which is not included in the above list of principal
shareholders.
2. Percentage to Total Shares Outstanding is calculated excluding treasury shares.

(5) Shares Delivered as Consideration for The Execution of Duties to Directors
Number of
Number of Recipients
SharesDirectors (Excluding Outside Directors)

18,00032

8(Translation)
3. Information Concerning Corporate Officers(1) Directors and Audit & Supervisory Board Members (As of March 31, 2022)
Position
Representative
Director
Chairman
Representative
Director
President
Director
Managing Executive
Officer
Director
Managing Executive
Officer
Director
Managing Executive
Officer
Director
Managing Executive
Officer
Director
Managing Executive
Officer
Director
Managing Executive
Officer
Director

Responsibilities at MGC and Important current positionsat other companies, etc.

Name

Toshikiyo Kurai

Masashi Fujii

Masato Inari

Nobuhisa Ariyoshi

Responsible for Production Technology, in charge ofEnvironment Safety and Quality Assurance Division,
Purchasing & Logistics Division
In charge of internal control & risk management, responsible
for Administrative & Personnel, Finance & Accounting, incharge of Information Systems Division

Kenji Kato

Responsible for Research & Development, in charge ofIntellectual Infrastructure Center

Yasushi Kosaka

In charge of Specialty Chemicals Business Sector

Naruyuki Nagaoka

In charge of Basic Chemicals Business Sector

Motoyasu Kitagawa

In charge of compliance, responsible for Corporate Planning, incharge of Internal Audit Division, CSR & IR Division

Tsugio Sato

Director

Haruko Hirose

Director
Director
Audit & Supervisory
Board Member(Fulltime)
Audit & Supervisory
Board Member(Fulltime)
Audit & Supervisory
Board Member(Fulltime)
Audit & Supervisory
Board Member

Toru Suzuki
Yasushi Manabe

President, Japan Morocco Association
Outside Director, S&B Foods Inc.
Outside Director, Nikkiso Co., Ltd.
Executive Advisor, Yashima Denki Co., Ltd.

Takashi Kimura

Masamichi
Mizukami

Kenji Inamasa
YasuomiMatsuyama

President in Nissay Culture Foundation
President in Tokyo Opera City Cultural Foundation

Notes: 1. MGC has adopted the executive officer system.
2. Of the Directors, Mr. Motoyasu Kitagawa and Mr. Yasushi Manabe newly assumed their office as of33

(Translation)
June 25, 2021.
3. Of the Directors, Dr. Tsugio Sato, Ms. Haruko Hirose, Mr. Toru Suzuki and Mr. Yasushi Manabe are
Outside Directors as stipulated in Article 2, Item 15 of the Companies Act.
4. Of the Audit & Supervisory Board Members, Messrs. Takashi Kimura and Yasuomi Matsuyama are
Outside Audit & Supervisory Board Members as stipulated in Article 2, Item 16 of the Companies Act.
5. Ms. Haruko Hirose is listed as above in her preferred name. Her name in the family register is Haruko
Makinouchi.
6. Audit & Supervisory Board Member, Mr. Takashi Kimura, has been involved with financial institutions
for a number of years, and has experience in corporate management as a manager, and possesses a
considerable degree of knowledge regarding finance and accounting.
7. Audit & Supervisory Board Member, Mr. Yasuomi Matsuyama, has been involved with financial
institutions for a number of years, and has experience in corporate management through his role incharge of the Accounting Division, and possesses a considerable degree of knowledge regarding financeand accounting.
8. MGC has registered Directors, Dr. Tsugio Sato, Ms. Haruko Hirose, Mr. Toru Suzuki and Yasushi
Manabe and Audit & Supervisory Board Members, Messrs. Takashi Kimura and Yasuomi Matsuyama,
as independent directors/auditors at Tokyo Stock Exchange, Inc.
9. There is no material business relation between MGC and the other companies, etc. in which Directors,
Ms. Haruko Hirose, Mr. Yasushi Manabe and Audit & Supervisory Board Member, Mr. Yasuomi
Matsuyama, serve concurrently.
10. Corporate Officers who have retired during the current fiscal year are as follows:
Director
Mr. Kazuhiko Okubo
Director
Mr. Kazuo Tanigawa(Retired upon expiry of the term of office on June 25 2021)
Audit & Supervisory Board Member (Fulltime)
Mr. Katsuhiko Sugita(Retired upon resignation on June 25 2021)
11. Effective from April 1, 2022 Responsibility at MGC and important current positions at other companies,
etc. changed as follows.
Responsibility at MGC and Important current positions at
PositionNameother companies, etc.
Representative
Responsible for Production Technology, in charge of
Director
Masato Inari
Environment Safety and Quality Assurance Division,
Senior Managing
Purchasing & Logistics Division
Executive Officer
Representative
In charge of internal control & risk management,
Director
responsible for Finance & Accounting, in charge of
Nobuhisa Ariyoshi
Senior Managing
Administrative & Personnel Division and Information
Executive Officer
Systems Division
Director－

Yasushi Kosaka(2) General Intent of Limitation of Liability Agreement
MGC has entered into a Limitation of Liability Agreement with each Outside Corporate Officers
to limit their liabilities with respect to Article 423 Paragraph 1 of the Companies Act up to theamount stipulated by the law, based on Article 427 Paragraph 1 of said Act.
(3) General Intent of Directors & Officers Liability Insurance
MGC has entered into a directors and officers liability insurance policy with an insurancecompany pursuant to Article 430-3 Paragraph 1 of the Companies Act, with the insured parties
thereto consisting of MGC’s Directors, Audit & Supervisory Board Members, Executive Officers,
important employees, outside dispatched officers and retired officers.
The insurance policy provides coverage for legal damages, litigation expenses and other suchcosts that may be incurred by an insured party if he or she becomes subject to a legal claim fordamages filed by a shareholder, third-party or otherwise. However, the insurance policy does notprovide coverage for damages caused by an insured party as a result of he or she having engaged
in criminal acts or other such behavior.
34

(Translation)
MGC shall assume payment of the insurance policy premiums in full.
(4) Directors’ and Audit &Supervisory Board members’ Compensation

Classification

Amount of

Total Amount of Compensation by Type

Compensation(millions of yen)

Number of
eligible people(millions of yen)

Basic

Performance-based

Restricted Stock

Directors

505

322

144

38

14

Audit & Supervisory
Board Member

87

87

－

－

5

Total

593

410

144

38

19

Outside Directors/Audit &Supervisory Board Members(Figures on the right are parts ofthe total amounts above.)

(75)

(75)

－

－

(7)

Note: 1. The amount of restricted stock compensation to Directors is that of the provision for restricted stockcompensation (for nine Directors excluding Outside Directors) for the fiscal year under review.
2. Monetary compensation paid to Directors is to amount to within ¥600 million per annum, including
reserved retirement benefits for each term of office (of which, the amount shall be within ¥50 million for
Outside Directors who shall not be eligible for of the reserved retirement benefits), per resolution of the
91st Ordinary General Meeting of Shareholders held on June 26, 2018. The number of Directors uponconclusion of said General Meeting of Shareholders is 12 Directors (of whom, two are Outside Directors).
Meanwhile, in a framework separate from the monetary compensation, compensation that involves
granting restricted stock shall amount to within ¥100 million per annum (Outside Directors shall not be
eligible for payment thereof), per resolution of the 91st Ordinary General Meeting of Shareholders heldon June 26, 2018. The number of Directors (excluding Outside Directors) upon conclusion of said
General Meeting of Shareholders is 10 Directors.
3. Having taken into account Compensation and Nominating Committee discussions involving Mr. Masashi
Fujii, President and Representative Director, on compensation allocations, the Board of Directors deems
the President most suitable for evaluating the respective Directors while enlisting a broad-based view ofthe MGC overall. The Board of Directors has accordingly decided to entrust Mr. Masashi Fujii withdecisions on allocations of annual compensation for the respective Directors.
4. Indicators pertaining to performance-based compensation enlist a combination of ordinary income and
ROIC with the aim of providing incentive with respect to corporate performance. Accordingly, ordinary
income of ¥50,240 million and ROIC of 7.7% served actual results with respect to such indicators.
5. Monetary compensation paid to Audit & Supervisory Board Members is to amount to within ¥10 million
per month, per resolution of the 80th Ordinary General Meeting of Shareholders held on June 28, 2007.
The number of Audit & Supervisory Board Members upon conclusion of said General Meeting of
Shareholders was 5 Audit & Supervisory Board Members.
6. Audit & Supervisory Board Members’ compensation consists only of a basic compensation and isdecided among the Audit & Supervisory Board Members within the amount stipulated by the General
Meeting of Shareholders.

(5) Policies and Methods for Deciding Compensation and Other Benefits of Directors
MGC has determined policies on making decisions regarding compensation and other benefits
for individual Directors, per resolution at its meeting of the Board of Directors held on February
17, 2021.
Having taken into account discussions regarding compensation and other benefits forindividual Directors pertaining to the current fiscal year, subsequent to consultation with theCompensation and Nominating Committee consisting of the Chairman, the President, and all
Outside Directors, the Board of Directors deems that such compensation and other benefits forindividual Directors conforms with the methods for deciding details of compensation and otherbenefits and also conforms with such policies on details regarding compensation and otherbenefits that have been determined.
35

(Translation)
The policy on making decisions pertaining to compensation and other benefits for individual
Directors is as follows.
Compensation for the MGC’s Directors, excluding Outside Directors, consists of annualcompensation and restricted stock compensation.
The annual compensation consists of fixed basic compensation decided in accordance witheach Director’s position and duties, in conjunction with performance-based compensation basedon various indicators of corporate performance. As for method payment, the eligible Directors
receive annual compensation paid on a monthly basis, divided into monthly installments, a certain
percentage of which is set aside each month as part of a reserved retirement benefit, which is paid
to Directors upon their retirement. MGC may take action to reduce such amounts depending on
a Director’s performance and other grounds. The performance-based compensation is determinedbased on factors that include quantitative financial results and the extent to which targets havebeen achieved, using ordinary income and other such indicators, with the aim of furnishing
incentive with respect to corporate performance. Moreover, performance-based compensationaccounts for roughly 30% of annual compensation, which mainly consists of basic compensation.
This is a suitable compensation mix given distinctive characteristics of MGC’s businessparticularly in terms of its many years of monetizing respective businesses as a result of having
engaged in various initiatives such as R&D, manufacturing process development, and market
development.
The restricted stock compensation involves granting a certain volume of shares to Directors inalignment with their positions and duties, in a manner whereby compensation furnished for thesake of granting treasury shares is paid to the Directors each fiscal year on a lump-sum basis.
Such shares are subject to transfer restrictions so that recipients are required maintain holdings
for a certain period of time. This helps encourage a sense of shared value with shareholders andfurthermore provides incentive for recipients to help achieve sustainable growth with respect to
MGC’s corporate value.
In addition to these forms of compensation, MGC may pay an amount considered appropriate
as a bonus upon resolution of a General Meeting of Shareholders.
Compensation paid to Outside Directors who maintain positions of independence frombusiness execution is limited to fixed amounts of basic compensation.
Total amounts of annual compensation for Directors shall be determined by the Board of
Directors, subsequent to consultation with the Compensation and Nominating Committee andafter having reviewed comprehensive factors such as corporate performance, world standards,
and employee salary trends. With respect to compensation allocations on an individual basis, theBoard of Directors has taken into account Compensation and Nominating Committee discussions
involving the President on compensation allocations, and accordingly deems the President mostsuitable for evaluating the respective Directors while enlisting a broad-based view of the MGC
overall in that regard.
The policy above shall be determined by the Board of Directors, subsequent to consultation
with the Compensation and Nominating Committee consisting of the Chairman, the President,
and Outside Directors.
(6) Information Concerning Outside Corporate Officers
1) Relations between MGC and Other Companies in which Officers Concurrently Hold Important
Positions.
The relations between MGC and other companies in which the outside corporate officers
concurrently hold important positions are as described in (1).

36

(Translation)2) Major Activities of Outside Corporate Officers
Attendance at
OutsideBoard of Directors
Director
Meeting

Tsugio Sato

Haruko Hirose

Toru Suzuki

YasushiManabeMajor Activities

12 of 12 meetings

Drawing on his highly advanced expertise in a wide fieldof study in chemicals such as inorganic materials
chemistry and on his extensive experience holding
prominent positions in various organizations, including
universities and academic societies, Dr. Tsugio Satoadequately demonstrated management supervisionfunctions by making comments as necessary at Board of
Directors meetings and other important meetings
subsequent to assuming office as Director from anexternal perspective to ensure appropriate and proper
decision-making of MGC.

12 of 12 meetings

Drawing on her experience overseas and insight asdirector at international organizations on a global scale,
Ms. Haruko Hirose adequately demonstrated management
supervision functions by making comments as necessary
at Board of Directors meetings and other important
meetings subsequent to assuming office as Director froman external perspective to ensure appropriate and proper
decision-making of MGC.

12 of 12 meetings

Drawing on his many years of experience and insight as amanager at a company operating on a global scale, Mr.
Toru Suzuki adequately demonstrated management
supervision functions by making comments as necessary
at Board of Directors meetings and other important
meetings subsequent to assuming office as Director froman external perspective to ensure appropriate and proper
decision-making of MGC.

9 of 9 meetings

Drawing on his many years of experience and insight as amanager at a company operating on a global scale, Mr.
Yasushi Manabe adequately demonstrated management
supervision functions by making comments as necessary
at Board of Directors meetings and other important
meetings subsequent to assuming office as Director froman external perspective to ensure appropriate and proper
decision-making of MGC.

37

(Translation)

Outside Audit& Supervisory
Board Member

Takashi
KimuraAttendanceat Board of
Directors
Meeting

Attendance at
Audit andSupervisory
Board Meeting

Major Activities

14 of 14
meetings

Drawing on his experience with financial
institutions and as a business manager, Mr. Takashi
Kimura asked questions and offered advice atBoard of Directors meetings and other important
meetings to ensure the appropriate execution ofbusiness.
Further, in compliance with audit policies
stipulated by the Audit & Supervisory Board, Mr.
Takashi Kimura audited each division and officeand carried out inspection of subsidiaries, etc.,
while adequately demonstrating audit functions as
a Full-time Audit & Supervisory Board Member.

14 of 14
meetings

Drawing on his experience with financial
institutions and as a business manager, Mr.
Yasuomi Matsuyama made comments from anexternal perspective to ensure appropriate decision
making by the Board of Directors.
Further, in compliance with audit policies
stipulated by the Audit & Supervisory Board, Mr.
Yasuomi Matsuyama discussed and exchanged
views on important matters related to auditing,adequately demonstrating audit functions.

12 of 12
meetings

YasuomiMatsuyama

12 of 12
meetings

4. Information Concerning Independent Auditor(1) Name of Independent Auditor
Crowe Toyo & Co.
(2) Independent Auditors’ Fees in FY2021
1) Fee for the audit performed as stipulated in Article 2 Paragraph 1 of theCertified Public Accountants Law
2) Aggregate amount of cash and other monetary payments made by MGC
and MGC’s subsidiaries¥70 million¥99 million

Notes: 1.

The fee for audit pursuant to the Companies Act and that for audit pursuant to the Financial
Instruments and Exchange Act are not differentiated in the Audit Agreement between MGC andIndependent Auditor. As such, the amount in 1) includes the amount of the fee and other payments
for the audit due pursuant to the Financial Instruments and Exchange Act.

2.

Of MGC’s main subsidiaries, the financial statements of Toho Earthtech, Inc., JSP Corporation andforeign subsidiaries are audited (as stipulated in the Companies Act or Financial Instruments andExchange Act, including equivalent foreign laws and ordinances) by certified public accountants or
accounting firms (including those with equivalent foreign certifications) other than MGC’s
Independent Auditor.

3.

MGC and MGC’s subsidiary entrusts agreed-upon procedural operations as duties other than duties
prescribed in Article 2, Paragraph 1 of the Certified Public Accountants Act, and pay consideration
to Independent Auditors.

38

(Translation)
4.

The Audit & Supervisory Board agreed to the amount listed above in 1) after confirming the content
of the Independent Auditor’s audit plan, quality management systems, the state of execution of audit,
estimates of audit compensation, etc.

(3) Policy for Dismissal and Non-reappointment of independent Auditors
In the case that any of the items in Article 340, Paragraph 1 of the Companies Act apply to an
Independent Auditor, that Independent Auditor’s dismissal will be considered, and in the case that
their dismissal is judged to be appropriate, the Audit & Supervisory Board will dismiss the
Independent Auditor upon the consent of all Audit & Supervisory Board Members.
Also, in the case that the Audit & Supervisory Board recognizes that it has become difficult for
the Independent Auditor to appropriately execute duties, or if otherwise judged necessary, the Audit& Supervisory Board will submit an agenda item regarding the dismissal or nonrenewal of the
Independent Auditor to the General Meeting of Shareholders.
5. Resolution on Establishing Systems to Ensure Appropriate Business Operations
In following with the regulations of Article 362, Paragraph 4, Item 6 of the Companies Act, Paragraph
5 of the same Article, and Article 100, Paragraphs 1 and 3 of the Ordinance for Enforcement of theCompanies Act, MGC resolved in the Board of Directors meeting with respect to systems to ensure
appropriate business operations (Internal Control System). Additionally, the status of the maintenanceand operation of internal controls is being reported to the Board of Directors on a yearly basis, and in
addition to verifying and resolving upon the appropriateness of this resolution, the Board of Directors
also deliberates and resolves upon a basic policy and plans regarding the following year's maintenanceand operation of internal controls. The content of internal control resolutions and operational statusduring fiscal 2021 are as follows.

(1) Content of Resolution on Systems to Ensure Appropriate Business Operations① Systems for Ensuring Duties of Directors and Employees Are Executed in Compliance with
Laws, Regulations, and Articles of Incorporation
1) MGC shall view compliance as broadly encompassing conformity with laws, regulations, Articles
of Incorporation, and internal rules, as well as the conduct of fair, transparent, and free businessbased on an awareness of corporate responsibility to society, and shall establish MGC Corporate
Behavior Guidelines, Compliance Rules, and MGC Group Code of Conduct.
2) Officer in charge of Compliance shall be appointed and a Compliance Committee chaired by said
Officer shall be established as an organization directly under the President. Compliance Committee
shall investigate compliance violations, and also discuss, formulate and make recommendation forcorrective and preventive measures.
3) In order to ensure that MGC and its Group companies construct, maintain and operate internal
controls appropriately MGC shall establish Basic Rules on Internal Control & Risk Management.
Internal Control & Risk Management Committee shall be chaired by the officer in charge ofInternal Control & Risk Management and shall be established as an organization directly under
the President. In order to ensure its effectiveness Internal Control & Risk Management Committee
shall cooperate with Compliance Committee and Internal Audit Division.
4) In order to detect compliance violations at MGC and respective companies of MGC group and takecorrective measures promptly, Compliance Consultation Desk shall be established as a means ofreceiving internal reports from officers, employees, their families, contractors, business partners,

39

(Translation)and the like.
5) In order to eliminate anti-social forces, in addition to clarifying MGC group’s firm stance against
such forces in MGC Corporate Behavior Guidelines and MGC Group Code of Conduct, MGC shallpromote its policies in each relevant department.
6) An Internal Audit Division shall be established to conduct internal audits pursuant to the Internal
Audit Rules in addition to auditing by Audit & Supervisory Board Members and by Independent
Auditors.
7) MGC shall issue MGC Compliance Handbook and distribute to officers and employees to ensure
MGC group’s understanding of the compliance, as well as cultivate awareness of compliancethrough education and training.
② Systems for Ensuring Efficient Execution of Duties by Directors
1) MGC shall separate the decision-making, supervision, and business execution functions of the
management and implement the Executive Officer system for expeditious decision-making andbusiness execution. At the same time, in the operating divisions to achieve efficient business
management accountability for performance shall be clarified.
2) In order to make decisions on matters that have material effect on MGC based on multifaceted
considerations, a Management Council shall be established to deliberate on management policies andan Operations Council shall be established to deliberate on specific execution plans.
3) Organization Regulations, Segregation of Duties Rules, and Rules Defining Extent of Authority shallbe established to clarify the duties and authorities of Directors to ensure efficient and appropriate
execution of duties.
4) Performance shall be monitored based on numerical targets clarified through the Group’s mediumterm management plan, annual budget, and the like.
③ System for Archiving and Managing Information on Execution of Duties by Directors
Information pertaining to the execution of duties by Directors shall be archived and managed inaccordance with the Document Control Procedures and other internal rules.
④ Rules and Other Systems for Managing Risk of Loss
1) MGC shall establish Internal Control & Risk Management Rules in order to understand andappropriately manage business risks as MGC group.
2) Internal Control & Risk Management Committee shall identify the status of risk management andprovide supervision and instructions on prioritizing risks and devising reduction measures.
3) Being a chemical manufacturer, MGC shall engage in responsible care (RC) activities as avoluntary undertaking to ensure environmental protection and safety through the life cycle ofchemicals from production to disposal.
⑤ System for Ensuring Appropriate Execution of Business by MGC Group
While valuing the autonomous management of all Group companies and clarifying the managerial
accountability of its Board of Directors, MGC has established the following systems that include
the maintenance of various regulations to ensure the appropriate execution of business within the40

(Translation)

MGC Group.
Also regarding the appropriate execution of business within the MGC Group, companies within
the Group are controlled through methods including the assignment of officers and the exercise of
voting rights as required of the nature of the business, degree of importance, etc..
・ In addition to establishing departments responsible for items relating to Group management aswell as divisions that supervise individual Group companies, regulations such as Rules on
Subsidiaries and Affiliates are maintained and a reporting system is created in order to receive
regular and emergency reports from each of the Group companies.
・ Regarding Internal Audit Rules, Group companies are also subject to internal audits. Also,
regarding Basic Rules on Internal Control & Risk Management, risk management conductedby Group companies are also subject to these rules, and instruction and education is carried out
so that Group companies will maintain and improve appropriate risk management systems.
・ MGC establishes MGC Corporate Behavior Guidelines and MGC Group Code of Conduct asbasic policies for the entire Group and seeks from each Group company the maintenance ofcompliance structures that meet them. Also, MGC's Compliance Consultation Desk is alsoavailable to the officers and employees of each Group companies (including retirees), as wellas their families, contractors, business partners, etc..
・ Through medium-term management plan, annual budget, etc. of Group companies, MGC
clarifies each company's performance goals and conducts performance management based onthese goals. Regarding important business activities performed by Group companies, MGC's
supervisory division ensures appropriate decision-making through management discussions,etc..
⑥ Systems for Ensuring Effective Auditing of Audit & Supervisory Board Members
1) Matters Related to Employees Assisting with Audit & Supervisory Board Members’ Duties
Employees shall be assigned to assist Audit & Supervisory Board Members with their duties
pursuant to consultations with Audit & Supervisory Board Members.
2) Matters Related to Independence from Directors of Employees Assisting with Audit & Supervisory
Board Members’ Duties
Employees assigned to assist with the duties of Audit & Supervisory Board Members shall engage
full time in said assignment and shall not be subject to orders and instructions from Directors.
The prior consent of the Audit & Supervisory Board is required for their transfer, appraisal, anddisciplinary punishment.
3) Matters related to the ensuring of the effectiveness of orders given to employees who assist Audit& Supervisory Board Members in their duties
It is made clear that employees who assist Audit & Supervisory Board Members in their duties areto obey instructions given to them by Audit & Supervisory Board Members, and employees who
possess the aptitude for such duties are nominated.
4) Matters Related to Reports from Directors and Employees to Audit & Supervisory Board Membersi) In the event Directors or employees find violations of laws and regulations or facts and the likethat may cause significant damage to MGC, they must report said violations, facts, and the liketo the Audit & Supervisory Board Members in accordance with laws, regulations, Compliance
Rules, and other internal rules.

41

(Translation)ii) Directors and employees must report regularly, and promptly in the case of important matters,on the execution status of business operations including internal control of MGC and supervisedGroup companies, risk management and implementation of compliance to the Audit &Supervisory Board Members, as well as promptly conduct investigations and provide reports inthe event Audit & Supervisory Board Members request investigations and reports concerningthese status.
iii) Directors, Audit & Supervisory Board Members, and employees of Group companies will,based on laws and regulations, quickly conduct surveys and deliver reports in the case that areport is demanded from Audit & Supervisory Board Members.
iv) Compliance Committee must promptly report to Audit & Supervisory Board Members thecontent of consultations and reports involving MGC or Group companies received throughCompliance Consultation Desk.
5) Matters related to the treatment of individuals who make reports, etc. to Audit & Supervisory Board
Members
Individuals responsible for aforementioned reports and surveys as well as those who work together
with them, etc. shall not be subject to work reassignment, discrimination, or other unfavorable
treatment as a result of that action, and knowledge of this prohibition will be made well-known.
6) Matters related costs, etc., resulting from the execution of Audit & Supervisory Board Members'
dutiesi) In order to defray costs that occur as the result of the execution of Audit & Supervisory Board
Members' duties, an appropriate budget shall be established each fiscal year based on projected
activities.
ii) If a request for prepayment or settling of accounts regarding costs necessary for the executionof Audit & Supervisory Board Members' duties is received, MGC shall promptly comply.
iii) Even in cases where costs incurred as the result of the execution of Audit & Supervisory Board
Members' duties exceed the amount budgeted for each fiscal year, Audit & Supervisory Board
Members and the related Directors shall meet and as a rule make considerations to respond to
the necessity of those costs.
7) Other Systems for Ensuring Effective Auditing of Audit & Supervisory Board Membersi) Representative Directors shall arrange for regular exchange of views with Audit & Supervisory
Board Members. Further, the Internal Audit Division and the Independent Auditor shallcommunicate and deliberate with Audit & Supervisory Board Members to ensure theeffectiveness of Audit & Supervisory Board Members’ operations.
ii) Audit & Supervisory Board Members may attend Board of Directors Meetings and otherimportant meetings in order to understand the decision making status regarding importantmatters and the execution status of business operations, in addition to reviewing important
documents and requesting explanations of Directors and employees on the execution of business
operations.
iii) In the case that the Audit & Supervisory Board requests the use of independent external
specialists, MGC shall bear those costs, excepting cases where their use is deemed not necessary
to the execution of Audit & Supervisory Board Members' duties.

(2) Summary of Operational Status of Systems to Ensure Appropriate Business Operations① Systems for Ensuring Duties of Directors and Employees Are Executed in Compliance with
Laws, Regulations, and Articles of Incorporation

42

(Translation)

1) MGC seeks to conduct CSR activities and achieve thorough compliance, by emphasizing
publication of the MGC Corporate Behavior Guidelines Directives for Corporate Actions etc. bydelivering it through the President’s message.
2) Internal Control & Risk Management Committee met three times during the fiscal year underreview, and deliberated the readiness and operational status of internal controls. Furthermore, after
being approved by the Board of Directors, information concerning basic policies and plans relating
to internal controls deliberated by the Committee is spread to MGC officers, employees, and allGroup Companies.
3) Compliance Committee met three times during the fiscal year under review, deliberated specificitems. The Compliance Consultation Desk, in addition to the internal desk, has had an external
desk established as well, in order to lower the hurdle in making reports.
4) Internal audits are performed based on audit plan, and measures are undertaken to maintain theproper performance of duties. Items designated by internal audits are responded to within
timeframes established by the audited division.
5) To eliminate anti-social forces, in addition to the creation of a response manual and spreading
information internally, when entering into contracts with outside parties, MGC seeks a pledge thatthe party is not an anti-social force, and contracts can be nullified, etc. if it is later determined thatthe party is an anti-social force.
② Systems for Ensuring Efficient Execution of Duties by Directors.
1) MGC is working to reinforce the management execution system and strengthen its governancethrough clearly defining the functions and responsibilities of management, by placing an Executive
Officer system that makes prompt decision-making possible, and allows the Board of Directors toconcentrate on making decisions on the most important business matters and conduct supervision
over business execution.
Regarding matters that have material effect on MGC, decisions are made via considerations
through multifaceted deliberations at a Management Council that deliberates on management
policies and at an Operations Council that deliberates on specific execution plans, and the adviceof attorneys and other professionals is received as needed.
2) Based on the medium-term management plan and annual budget, performance is regularly
monitored.
3) Duties and authorities of Directors, officers and employees are reviewed on a yearly basis to work
toward ensuring efficient and appropriate execution of duties.
③ System for Archiving and Managing Information on Execution of Duties by Directors
Information pertaining to the execution of duties by Directors is archived and managed inaccordance with the Document Control Procedures and other internal rules through the creation ofmanagement registers and their archival for an established length of time.
④ Rules and Other Systems for Managing Risk of Loss
1) Standards, Operational Rules, etc. have been established under Basic Rules on Internal Control &Risk Management as systems to manage risk during ordinary periods and emergencies.
Additionally, as mentioned previously, Internal Control & Risk Management Committee met threetimes during the fiscal year under review, providing supervision and instructions on the status ofrisk management.
In addition, to prepare for the continuing COVID-19, the Crisis Countermeasures Headquarters
was established continuingly based on Internal Control & Risk Management regulations, and weare taking measures to prevent infection, such as executing work from home at head office, various
infection prevention measures at plants etc..
2) In addition to voluntary responsible care (RC) activities, in accordance with policies established at
43

(Translation)

environmental safety meetings attended by all Directors, MGC strives to protect the environment
and maintain safety, and continuously repeats the PDCA cycle for the protection of the environment
and maintenance of safety, including confirming the progress of activities with internal audits.
⑤ System for Ensuring Appropriate Execution of Business by MGC Group
1) Based on regulations such as Rules on Subsidiaries and Affiliates, Group companies are managed
through supervisory divisions, and regular reports on management status, etc. are received fromGroup companies. Additionally, a reporting system has been created for times of emergency. Whilea medium-term management plan and annual budget that include Group companies are formulated
and performance management is being conducted, MGC aims to ensure appropriate decisionmaking through the assignment of officers, etc..
2) To ensure the appropriate execution of business within MGC Group companies and enhance risk
management, the Internal Audit Division systematically conducts internal audits at major Group
companies, and through a supervisory division Internal Control & Risk Management Committee
strives to maintain and enhance each Group company’s risk management system. Additionally,
MGC states that the Compliance Consultation Desk is available for use by all individuals involvedin the Company Group's business activities.
⑥ Systems for Ensuring Effective Auditing of Audit & Supervisory Board Members
1) Aside from attending meetings of the Board of Directors, Executive Officers, and other important
committees, Audit & Supervisory Board Members exchange opinions with Representative
Directors and the Board of Directors, receives reports on business execution from each department,
and periodically conducts onsite audits of key subsidiaries. Furthermore, Audit & Supervisory
Board Members strive to enhance the effectiveness of audits, including by working together andexchanging opinions with Independent Auditor and Internal Audit Division.
2) Through various committees related to Internal Control & Risk Management and Compliance,
reports are provided to Audit & Supervisory Board Members, on the status of control, etc. Also,
consultations and reports discussed with Compliance Consultation Desk are quickly reported, andit has come to be well understood that unfavorable treatment of individuals who make reports is
prohibited.
3) Staff dedicated to audit functions based on instructions from Audit & Supervisory Board Members
are placed, and all costs required for business activity audits are defrayed.

6. Policy on Appropriation of Retained Earnings, etc.
The MGC Group places the improvement of corporate value as a challenge on the management of
the greatest importance. Based on the view that the improvement of corporate value will lead to thebenefits of all stakeholders including shareholders, the MGC Group takes into consideration
investment and lending plans, financial health, and future business trends in order to realize futurebusiness growth, and works to achieve a balanced allotment of retained earnings and returns toshareholders. Retained earnings are allotted to be used as investment and lending funds for businessexpansion and growth and to strengthen the corporate structure. Regarding dividends, the decision tocontinue steady dividends is made taking into account trends in business results, while working to
improve capital efficiency and enhance returns to shareholders through implementing flexible
purchase of treasury shares in consideration of the levels of retained earnings and shareholder return,while MGC will set a new total payout ratio of 40% as a target for medium-term shareholder returns.
The year-end dividend payout for fiscal 2021 was ¥35. Since the interim dividend payout was ¥45(including commemorative dividend ¥10), the annual dividend for fiscal 2021 is ¥80 per share, which
resulted in 34.5% of dividend payout ratio on a consolidated basis.
44

(Translation)

Regarding dividends for the next fiscal year, the interim dividend is planned to be ¥40 per share,
while the year-end dividend is planned to be ¥40 per share.

45

(Translation)
Consolidated Balance Sheet(As of March 31, 2022)
Account item
(Assets)
Total current assets
Cash and deposits
Notes and accounts receivabletrade, and contract assets
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies

Amount452,210102,049

Account item
(Liabilities)
Total current liabilities
Notes and accounts payable-trade(Millions of yen)Amount198,969
92,387

176,556

Short-term borrowings

38,925

6
78,542
19,72957,398

Accrued expenses
Lease obligations
Income taxes payable
Provision for bonuses

19,187565
11,997
6,144

19,381

Provision for bonuses for directors (and otherofficers)

47

Allowance for doubtful accounts
Total non-current assets△1,453
476,440

Provision for environmental measures

Provision for business restructuring

3
190

Property, plant and equipment

276,384

Provision for loss on withdrawal frombusiness

103

Buildings and structures, net

99,584

Asset retirement obligations

118

Machinery, equipment and vehicles,net

80,400

Other

Other

Land
Lease assets, net
Construction in progress
Other
Total Intangible assets

42,8892,138
42,385
8,986
11,29029,298

Total non-current liabilities
Bonds payable
Long-term borrowings
Lease obligations
Deferred tax liabilities

98,79420,00046,621
1,537
11,458Goodwill

4,811

Provision for retirement benefits
directors (and other officers)

for

285

Lease assets
Software4
2,992

Provision for environment measures

Provision for business restructuring

23
2,305

Other

3,482

Provision for loss on business of
subsidiaries and associates

188

Total investments and other assets
Investments securities
Long-term loans receivable
Deferred tax assets
Retirement benefit asset
Other
Allowance for doubtful accounts

188,765
171,446
5,159
3,493
1,226
8,047
△607

Other provision
Retirement benefit liability
Asset retirement obligations
Other
Total liabilities(Net assets)
Total shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total accumulated othercomprehensive income
Valuation difference on availablefor-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans

Total assets

928,651

Non-controlling interests
Total net assets
Total liabilities and net assets

46

481
6,252
5,216
4,422
297,763547,239
41,97034,339492,455△21,525
21,526
11,376
△326
9,861
614
62,121
630,887928,651

(Translation)

Consolidated Statement of Income(From April 1, 2021 to March 31, 2022)
Account item

(Millions of yen)AmountNet sales

705,656

Cost of sales

543,070

Gross profit

162,586

Selling, general and administrative expenses

107,225

Operating income

55,360Non-operating income
Interest and dividend income

3,564

Share of profit of entities accounted for using equity method

14,883

Other

5,987

24,435Non-operating expenses
Interest expenses

858

Other

4,785

Ordinary income

5,644
74,152Extraordinary income
Gain on sales of investment securities

3,011

Insurance claim income

2,616

Gain on step acquisitions

796

6,424

Extraordinary loss
Impairment loss

7,059

Provision for business restructuring

1,733

Provision of allowance for doubtful accounts

960

Loss on valuation of investment securities

286

Loss on disposal of non-current assets

252

Loss compensation

228

Provision for loss on business of subsidiaries and associates

188

Fire loss

128

Loss on change in retirement benefit plan at subsidiary109

Profit before income taxes

10,947
69,628

Income taxes-current

16,542

Income taxes-deferred555

17,098Net income

52,530

Profit attributable to non-controlling interests

4,235

Profit attributable to owners of parent

48,29547

(Translation)
Non-consolidated Balance Sheet(As of March 31, 2022)
Account item
(Assets)
Total current assets
Cash and deposits
Notes and accounts receivabletrade, and contract assets
Merchandise and finished goods
Work in process
Raw materials and supplies
Prepaid expenses
Short-term loans receivable
Accounts receivable-other
Other
Allowance for doubtful accounts
Total noncurrent assets
Total property, plant and equipment

Buildings, net
Structures, net
Machinery and equipment, net
Vehicles, net
Tools and appliances, net
Land
Lease assets, net
Construction in progress
Total intangible assets

Patent right
Software
Other
Total investments and other assets

Investments securities
Stocks and investments in capitalof subsidiaries and affiliates
Long-term loans receivable
Long-term prepaid expenses
Other
Allowance for doubtful accounts

Total assets

Amount273,937
46,167

Account item
(Liabilities)
Total current liabilities(Millions of yen)AmountElectronically recorded obligations-operating

145,187
177

113,143

Accounts payable-trade57,18937,537
14,801
34,1901,563
16,966
6,937
4,289△1,661
255,694
111,007
24,01912,64532,45560
4,939
18,995200
17,690
1,603

Short-term borrowings
Commercial papers
Lease obligations
Accrued payable-other
Income taxes payable
Accrued expenses
Deposits received
Provision for bonuses
Provision for environmental measures

41,22810,000
102
6,390
7,317
15,218
330
3,047
3
190
103
44
3,843
61,441
20,00024,581
107
3,516
2,305

44
1,534
25
143,082
31,985

Provision for business restructuring
Provision for loss on withdrawal from business

Asset retirement obligations
Other
Total non-current liabilities
Bonds payable
Long-term borrowings
Lease obligations
Provision for retirement benefits
Provision for business restructuring
Provision for loss on business of subsidiaries
and associates

Asset retirement obligations
Deferred tax liabilities
Other
Total liabilities

94,443(Net assets)

14,239
900
1,596
△ 83

Total shareholders’ equity
Share capital
Total capital surpluses
Capital surplus
Other retained earnings
Total earned surpluses
Legal retained earnings
Other retained earnings
Reserve for mine prospecting
Reserve for tax purpose reduction
entry of non-current assets
General reserve
Retained earnings brought forward
Treasury shares
Total valuation and translation adjustments
Valuation difference on available-for-salesecurities
Total net assets
Total liabilities and net assets

529,631

48

188
3,622
5,194
1,925
206,629

312,823
41,97035,72235,66853
256,656
6,999
249,657
2,365
2,920
76,500167,871△21,525
10,17910,179323,002529,631(Translation)

Non-consolidated Statement of Income(From April 1, 2021 to March 31, 2022)(Millions of yen)AmountAccount item
Net sales

427,927

Cost of Sales

347,171

Gross profit

80,756

Selling, general and administrative expenses

48,391

Operating profit

32,364Non-operating income
Interest and dividend income

13,879

Other

4,587

18,467

Non-operating expenses
Interest expenses

181

Other

4,534

Ordinary income

4,715
46,116Extraordinary income
Gain on sale of investment securities

3,011

Insurance claim income

2,616

5,627

Extraordinary loss
Impairment losses

2,991

Provision for business restructuring

1,733

Provision of allowance for doubtful accounts

960

Loss on valuation of investment securities

286

Loss on disposal of non-current assets

272

Provision for loss on business of subsidiaries and associates

188

Income before income taxes

6,432
45,312

Income taxes-current

9,041

Income taxes-deferred458

Net income

9,499
35,81249

Independent Auditors’ Audit Report on Consolidated Financial Statements
INDEPENDENT AUDITORS’ REPORTMay 18, 2022
To: The Board of Directors
Mitsubishi Gas Chemical Company, Inc.
Crowe Toyo & Co.
Tokyo Office
Wataru Kobayashi, CPA
Designated Partner,
Engagement Partner
Hiroaki Izawa, CPA
Designated Partner,
Engagement Partner
Takayuki Kawakubo, CPA
Designated Partner,
Engagement Partner
OpinionWe have audited the consolidated financial statements of namely, the consolidated balance sheet, the consolidated
statement of income, the consolidated statement of changes in net assets and the notes to consolidated financial
statements of Mitsubishi Gas Chemical Co., Inc. (the Company) from April 1, 2021 to March 31, 2022, in accordancewith paragraph 4, Article 444 of the Companies Act.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, thefinancial position of the Company and consolidated subsidiaries and the results of its operations for the period covered
thereby in conformity with accounting principles generally accepted in Japan.
Basis for the Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibility
under the auditing standards is stated in “Auditor’s Responsibility for the Audit of the Consolidated Financial
Statements.” We are independent of the Company and its consolidated subsidiaries in accordance with the provisions
related to professional ethics in Japan, and are fulfilling other ethical responsibilities as an auditor. We believe that theaudit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Other Information
Other information refers to the business report and supplementary schedules. Management is responsible for the
preparation and disclosure of other information. Audit & Supervisory Board Members and the Audit & Supervisory
Board are responsible for overseeing the execution of duties by Directors in the establishment and operation of theGroup’s reporting process for other information.
Other information is not included in the scope of our opinion on the consolidated financial statements, and we
express no opinion on it.
Our responsibility with respect to the audit of the consolidated financial statements is to read through otherinformation and, in this process, to consider whether any material differences exist between other information and theconsolidated financial statements or knowledge we have gained through the auditing process; also, to remain alert for
any other indications of material error in other information.
We are required to report any matter that we consider constitutes a material error in other information, based on
the work we have undertaken.
We have nothing to report regarding other information.
Responsibilities of Management, Audit & Supervisory Board Members and the Audit & Supervisory Board for theConsolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements inaccordance with accounting principles generally accepted in Japan, and for designing and operating such internal control
as management determines is necessary to enable the preparation and fair presentation of the consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing whether it isappropriate to prepare the consolidated financial statements in accordance with the premise of a going concern, and fordisclosing matters relating to going concern when it is required to do so in accordance with accounting principles
generally accepted in Japan.
Audit & Supervisory Board Members and the Audit & Supervisory Board are responsible for monitoring theexecution of Directors’ duties related to designing and operating the financial reporting process.
Auditor’s Responsibility for the Audit of the Consolidated Financial Statements
Our responsibility is to obtain reasonable assurance about whether the consolidated financial statements as awhole are free from material misstatement, whether due to fraud or error, and to express an opinion on the consolidated
financial statements from an independent standpoint in an audit report, based on our audit. Misstatements can occur asa result of fraud or error, and are deemed material if they can be reasonably expected to, either individually or

50

(Translation)collectively, influence the decisions of users taken on the basis of the consolidated financial statements.
We make professional judgment in the audit process in accordance with auditing standards generally accepted inJapan, and perform the following while maintaining professional skepticism.
・ Identify and assess the risks of material misstatement, whether due to fraud or error. Design and implement
audit procedures to address the risks of material misstatement. The audit procedures shall be selected and applied asdetermined by the auditor. In addition, sufficient and appropriate audit evidence shall be obtained to provide a basis forthe audit opinion.
・ In making those risk assessments, the auditor considers internal control relevant to the entity’s audit in orderto design audit procedures that are appropriate in the circumstances, although the purpose of the audit of the consolidated
financial statements is not to express an opinion on the effectiveness of the entity’s internal control.
・ Assess the appropriateness of accounting policies adopted by management and the method of theirapplication, as well as the reasonableness of accounting estimates made by management and the adequacy of related
notes.
・ Determine whether it is appropriate for management to prepare the consolidated financial statements on thepremise of a going concern and, based on the audit evidence obtained, determine whether there is a significant
uncertainty in regard to events or conditions that may cast significant doubt on the entity’s ability to continue as a going
concern. If there is a significant uncertainty concerning the premise of a going concern, the auditor is required to callattention to the notes to the consolidated financial statements in the audit report, or if the notes to the consolidated
financial statements pertaining to the significant uncertainty are inappropriate, issue a modified opinion on the
consolidated financial statements. While the conclusions of the auditor are based on the audit evidence obtained up to
the date of the audit report, depending on future events or conditions, an entity may be unable to continue as a going
concern.
・ Besides assessing whether the presentation of and notes to the consolidated financial statements are inaccordance with accounting principles generally accepted in Japan, assess the presentation, structure, and content of theconsolidated financial statements including related notes, and whether the consolidated financial statements fairly
present the transactions and accounting events on which they are based.
・ Obtain sufficient and appropriate audit evidence regarding the financial information of the Company andits consolidated subsidiaries in order to express an opinion on the consolidated financial statements. The auditor is
responsible for instructing, supervising, and implementing the audit of the consolidated financial statements, and issolely responsible for the audit opinion.
The auditor reports to Audit & Supervisory Board Members and the Audit & Supervisory Board regarding thescope and timing of implementation of the planned audit, material audit findings including material weaknesses ininternal control identified in the course of the audit, and other matters required under the auditing standards.
The auditor reports to Audit & Supervisory Board Members and the Audit & Supervisory Board regarding theobservance of provisions related to professional ethics in Japan as well as matters that are reasonably considered to havean impact on the auditor’s independence and any safeguards that are in place to reduce or eliminate obstacles.
Conflicts of Interest
We have no interest in the Company which should be disclosed in compliance with the Certified Public
Accountants Act.

51

(Translation)
Independent Auditors’ Audit Report
INDEPENDENT AUDITORS’ REPORTMay 18, 2022
To: The Board of Directors
Mitsubishi Gas Chemical Company, Inc.
Crowe Toyo & Co.
Tokyo Office
Wataru Kobayashi, CPA
Designated Partner,
Engagement Partner
Hiroaki Izawa, CPA
Designated Partner,
Engagement Partner
Takayuki Kawakubo, CPA
Designated Partner,
Engagement Partner
OpinionWe have audited the financial statements of namely, the balance sheet, the statement of income, the statement ofchanges in net assets, the notes to financial statements and the supporting schedules (the financial statements and theaccompanying supplementary schedules) of Mitsubishi Gas Chemical Co., Inc. (the Company) for the 95th business year
from April 1, 2021 to March 31, 2022, in accordance with item 1, paragraph 2, Article 436 of the Companies Act.
In our opinion, the financial statements and the accompanying supplementary schedules referred to above present
fairly, in all material respects, the financial position of the and the results of its operations for the year then ended inconformity with accounting principles generally accepted in Japan.
Basis for the Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibility under
the auditing standards is stated in “Auditor’s Responsibility for the Audit of the Financial Statements.” We are independentof the Company in accordance with the provisions related to professional ethics in Japan, and are fulfilling other ethicalresponsibilities as an auditor. We believe that we have obtained sufficient and appropriate audit evidence to provide a basis
for our audit opinion.
Other Information
Other information refers to the business report and supplementary schedules. Management is responsible for the
preparation and disclosure of other information. Audit & Supervisory Board Members and the Audit & Supervisory Board
are responsible for overseeing the execution of duties by Directors in the establishment and operation of the Group’sreporting process for other information.
Other information is not included in the scope of our opinion on the financial statements and the accompanying
supplementary schedules, and we express no opinion on it.
Our responsibility with respect to the audit of the financial statements and the accompanying supplementary schedules
is to read through other information and, in this process, to consider whether any material differences exist between otherinformation and the financial statements and the accompanying supplementary schedules, or knowledge we have gained
through the auditing process; also, to remain alert for any other indications of material error in other information.
We are required to report any matter that we consider constitutes a material error in other information, based on thework we have undertaken.
We have nothing to report regarding other information.
Responsibilities of Management, Audit & Supervisory Board Members and the Audit & Supervisory Board for the Financial
Statements and the Accompanying Supplementary Schedules
Management is responsible for the preparation and fair presentation of the financial statements and the accompanying
supplementary schedules in accordance with accounting principles generally accepted in Japan, and for designing andoperating such internal control as management determines is necessary to enable the preparation and fair presentation of thefinancial statements and the accompanying supplementary schedules that are free from material misstatement, whether due
to fraud or error.
In preparing the financial statements and the accompanying supplementary schedules, management is responsible forassessing whether it is appropriate to prepare the financial statements and the accompanying supplementary schedules inaccordance with the premise of a going concern, and for disclosing matters relating to going concern when it is required to
do so in accordance with accounting principles generally accepted in Japan.
Audit & Supervisory Board Members and the Audit & Supervisory Board are responsible for monitoring the executionof Directors’ duties related to designing and operating the financial reporting process.
Auditor’s Responsibility for the Audit of the Financial Statements and the Accompanying Supplementary Schedules
Our responsibility is to obtain reasonable assurance about whether the financial statements and the accompanying
supplementary schedules as a whole are free from material misstatement, whether due to fraud or error, and to express an
opinion on the financial statements and the accompanying supplementary schedules from an independent standpoint in anaudit report, based on our audit. Misstatements can occur as a result of fraud or error, and are deemed material if they canbe reasonably expected to, either individually or collectively, influence the decisions of users taken on the basis of the52(Translation)
financial statements and the accompanying supplementary schedules.
We make professional judgment in the audit process in accordance with auditing standards generally accepted inJapan, and perform the following while maintaining professional skepticism.
・ Identify and assess the risks of material misstatement, whether due to fraud or error. Design and implement audit
procedures to address the risks of material misstatement. The audit procedures shall be selected and applied as determinedby the auditor. In addition, sufficient and appropriate audit evidence shall be obtained to provide a basis for the audit opinion.
・ In making those risk assessments, the auditor considers internal control relevant to the entity’s audit in order todesign audit procedures that are appropriate in the circumstances, although the purpose of the audit of the financial
statements and the accompanying supplementary schedules is not to express an opinion on the effectiveness of the entity’s
internal control.
・ Assess the appropriateness of accounting policies adopted by management and the method of their application,
as well as the reasonableness of accounting estimates made by management and the adequacy of related notes.
・ Determine whether it is appropriate for management to prepare the financial statements and the accompanying
supplementary schedules on the premise of a going concern and, based on the audit evidence obtained, determine whether
there is a significant uncertainty in regard to events or conditions that may cast significant doubt on the entity’s ability tocontinue as a going concern. If there is a significant uncertainty concerning the premise of a going concern, the auditor isrequired to call attention to the notes to the financial statements and the accompanying supplementary schedules in the audit
report, or if the notes to the financial statements and the accompanying supplementary schedules pertaining to the significant
uncertainty are inappropriate, issue a modified opinion on the financial statements and the accompanying supplementaryschedules. While the conclusions of the auditor are based on the audit evidence obtained up to the date of the audit report,
depending on future events or conditions, an entity may be unable to continue as a going concern.
・ Besides assessing whether the presentation of and notes to the financial statements and the accompanying
supplementary schedules are in accordance with accounting principles generally accepted in Japan, assess the presentation,
structure, and content of the financial statements and the accompanying supplementary schedules including related notes,
and whether the financial statements and the accompanying supplementary schedules fairly present the transactions andaccounting events on which they are based.
The auditor reports to Audit & Supervisory Board Members and the Audit & Supervisory Board regarding the scope
and timing of implementation of the planned audit, material audit findings including material weaknesses in internal control
identified in the course of the audit, and other matters required under the auditing standards.
The auditor reports to Audit & Supervisory Board Members and the Audit & Supervisory Board regarding theobservance of provisions related to professional ethics in Japan as well as matters that are reasonably considered to have an
impact on the auditor’s independence and any safeguards that are in place to reduce or eliminate obstacles.
Conflicts of Interest
We have no interest in the Company which should be disclosed in compliance with the Certified Public Accountants Act

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(Translation)
Audit & Supervisory Board's Audit Report
AUDIT REPORT
We, the Audit & Supervisory Board, deliberated and prepared this audit report as follows on theexecution of duties by MGC Directors during the 95th business term from April 1, 2021 to March 31,
2022, based on the audit report prepared by each Audit & Supervisory Board Member:
1. Method and Description of Audit by Audit & Supervisory Board Members and Audit by Audit &Supervisory Board(1) We determined the audit policy, audit duty assignments and the like, received reports from each
Audit & Supervisory Board Member on individual audit status and results, received reports fromthe Directors and Independent Auditor on the status of the execution of their duties, and requested
explanation as necessary.
(2) Each Audit & Supervisory Board Member conducted the audit by following method as well as we
made efforts to collect information and enhance the auditing environment by communicating with
the Directors, each department, Internal Audit Division, other employees, and others in accordancewith the Audit & Supervisory Board Members’ Audit Standards, audit policy, audit duties, and thelike as determined by the Audit & Supervisory Board. Implementation of the initial audit plan
involved making use of an online meeting platform for certain aspects of the audit to avoid
transmission of COVID-19.
i) We attended the Board of Directors’ Meetings and other important meetings, received reports
from Directors, employees and others on the status of execution of their duties, requested
explanation as necessary, examined important decision-rendering documents and otherdocuments, and investigated the state of activities and assets at the head office and principal
business offices. With respect to subsidiaries, we communicated and exchanged information
with the division controlling each subsidiary in MGC, the directors and Audit & Supervisory
Board Members of subsidiaries, requested business reports therefrom as necessary, andinvestigate the state of activities and assets.
ii) With respect to the contents of resolutions of the Board of Directors regarding the developmentof systems necessary to ensure that the execution of duties by directors complies with laws andregulations and the articles of incorporation, and other systems prescribed by Article 100,
paragraph 1 and 3 of Ordinance for Enforcement of the Companies Act as systems necessary
to ensure the properness of operations of group of enterprises consisting of stock company andits subsidiaries, and the systems developed based on such resolutions (internal control systems),
as stated in the business report, we periodically received reports from the Directors, employees
and others, requested explanations as necessary and made opinions, regarding the readiness andoperational status of such systems.
iii) We monitored and verified that the Independent Auditor maintained its independence andperformed its auditing duties adequately, as well as received reports from the Independent
Auditor on the performance status of its duties and requested explanations as necessary. We
received a notice from the Independent Auditors to the effect that structures for ensuring that
duties are appropriately performed (matters stipulated in the items under Article 131 of theRegulations on Corporate Accounting) were being improved pursuant to Quality Management
Standards for Auditing (October 28, 2005; Business Accounting Council) and requested
explanations as necessary.
The business report and its supplementary schedules for this business term, the non-consolidated
financial statements (non-consolidated balance sheet, non-consolidated statement of income, nonconsolidated statement on changes in net assets and notes to non-consolidated financial statements), their
supplementary schedules, and consolidated financial statements (consolidated balance sheet, consolidated
statement of income, consolidated statement on changes in net assets and notes to the consolidated
financial statements) for this business term were examined based on the foregoing method.
2. Results of Audit(1) Audit Result of Business Report, etc.
i) The business report and its supporting schedules are recognized as correctly presenting the stateof MGC in accordance with the laws, regulations and the Articles of Incorporation.
ii) No dishonest acts or material violations of laws, regulations or the Articles of Incorporation
were recognized in connection with the performance by Directors of their duties.
iii) We acknowledge that the Board of Directors’ resolutions with respect to the internal control
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(Translation)systems are appropriate. We also acknowledge that in terms of the readiness and operation ofsaid systems, continuous improvements are being made and therefore, did not find any matterto be mentioned regarding such internal control systems.
(2) Audit Result of Non-Consolidated Financial Statements and Their Supplementary Schedule
We are of the opinion that the method and results of the audit performed by the Independent
Auditor, Crowe Toyo & Co., are appropriate.
(3) Audit Result of Consolidated Financial Statements
We are of the opinion that the method and results of the audit performed by the Independent
Auditor, Crowe Toyo & Co., are appropriate.
May 25, 2022
Mitsubishi Gas Chemical Company, Inc. Audit & Supervisory Board
Audit & Supervisory Board Member (full-time)(Outside Audit & Supervisory Board Member)
Takashi Kimura
Audit & Supervisory Board Member (full-time)
Masamichi Mizukami
Audit & Supervisory Board Member (full-time)
Kenji Inamasa
Outside Audit & Supervisory Board Member
Yasuomi Natsuyama- END -

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