Other Items provided electronically for
the Notice of the 96th Ordinary General Meeting of Shareholders

MITSUBISHI GAS CHEMICAL COMPANY, INC.

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 thistranslation 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.

(Stock Acquisition Rights)(1) Matters on stock acquisition rights, etc. granted at the end of this fiscal year in remuneration forthe performance of corporate officers’ duties among which corporate officers holdNo applicable item.
(2) Matters on stock acquisition rights, etc. granted to employees and others during fiscal 2022 inremuneration for the performance of their duties
No applicable item.
(3) Other important matters on stock acquisition rights, etc.
No applicable item.

1

(Translation)（Consolidated Statement of Changes in Net Assets）(From April 1, 2022 to March 31, 2023)(Millions of yen)

Shareholders’ equity

Balance at beginning of
PeriodShare capital

Capital surplus

41,97034,339Retainedearnings

492,455

Accumulated other comprehensive income

Treasury shares

Total
shareholders’equityValuationdifference on
available-for-salesecurities△21,525547,239

11,376

Deferred gains orlosses on hedges

Foreign currencytranslation
adjustments

Remeasurementsof defined
benefit plans

Total ofaccumulated othercomprehensive
income

△326

9,861

614

21,526

Noncontrollinginterests
62,121

Total net
assets630,887

Changes during period
Dividends of surplus△15,464△15,464△15,464

Profit attributable toowners of parent

49,08549,08549,085△7,083△7,083

7,083

23

47

70

70

Cancellation of treasury
shares△4,724

4,724

△0

△0

Transfer from retained
earnings to capitalsurplus

4,647

Purchase of treasury
shares
Disposal of treasury
sharesChange in scope of
consolidation△4,647-△1

Change in ownershipinterest of parent
due to transactions
with non-controllinginterests

7

Net changes of items
other than shareholders’equityTotal changes
periodduringBalance at end of period

△1

△1

7

7

-

△2,426436

13,032

1,191

12,234

1,514

13,748-△46

28,971△2,312

26,612△2,426436

13,032

1,191

12,234

1,514

40,361

41,97034,293

521,426△23,838

573,852

8,950

110

22,894

1,085

33,76063,636671,249

2

(Translation)(Notes to Consolidated Financial Statements)
Notes Related to Important Basis for the Preparation of Consolidated Financial Statements
Matters Related to the Scope of Consolidation
1. Number of consolidated subsidiaries and names of major consolidated subsidiaries, etc.

Number of consolidated subsidiaries: 71
Names of major consolidated subsidiaries:
Japan Finechem Company, Inc., JSP Corporation, JSP International Group Ltd., Samyoung Pure
Chemicals Co., Ltd, MGC Pure Chemicals America, Inc., Taixing MGC Lingsu Co., Ltd., MGC
Filsheet Co., Ltd., Thai Polyacetal Co., Ltd., Mitsubishi Gas Chemical Engineering-Plastics(Shanghai) Co., Ltd., MGC Electrotechno Co., Ltd., MGC Electrotechno (Thailand) Co., Ltd.,
Mitsubishi Gas Chemical Trading Inc., Mitsubishi Gas Chemical Singapore Pte. Ltd., Mitsubishi
Gas Chemical America, Inc. Japan U-Pica Company, Ltd., MGC Terminal Company, Inc., Toho
Earthtech, Inc., MGC Pure Chemicals Singapore Pte. Ltd., MGC Pure Chemicals Taiwan, Inc.,
Korea Polyacetal Co., Ltd., MGC Energy Co., Ltd., MGC Advance Co., Ltd., MGC Woodchem
Corporation, MGC Advanced Polymers, Inc., MGC Specialty Chemicals Netherlands B.V., Eiwa
Chemical Industry. Co., Ltd., Global Polyacetal Co., Ltd., Yonezawa Dia Electronics Co., Inc. andAgeless (Thailand) Co., Ltd.
Korea Polyacetal Co., Ltd. has been included in the scope of consolidation, due to its increased
significance.
J-Chemical Inc. was excluded from the scope of consolidation because it was eliminated in anabsorption-type merger with Yutaka Chemical Corporation as the company surviving absorptiontype merger. In addition, Yutaka Chemical Corporation changed its trade name to MGC Woodchem
Corporation at the time of the merger.
2. Names, etc., of major non-consolidated subsidiaries

Names of major non-consolidated subsidiaries:
Hubei Lingyong Electronic Materials Co., Ltd.
Reasons for exclusion from scope of consolidation:
Non-consolidated subsidiaries are excluded from the scope of consolidation due to the fact that the
net assets, sales, net income or loss, retained earnings corresponding to MGC’s interest in said
companies are small and do not have a significant impact overall on the consolidated financial
statements.

Matters Related to the Equity Method1.

Number and names, etc., of non-consolidated subsidiaries and affiliates not accounted for under theequity method
Number of equity method non-consolidated subsidiary: 0
Number of equity method affiliates:
16
Names of major affiliates:
Japan Saudi Arabia Methanol Co., Inc., Metanol De Oriente, Metor, S.A., Brunei Methanol
Company Sdn. Bhd., Japan Trinidad Methanol Company, Inc., Yuzawa Geothermal Power
Corporation, Mitsubishi Engineering-Plastics Corporation, Korea Engineering Plastics Co., Ltd.,
Thai Polycarbonate Co., Ltd., Tai Hong Circuit Industrial Co., Ltd., Granopt Co., Ltd., Ryoden Kasei
Co., Ltd.

3

(Translation)

GHEPI S.r.l. has been included in the scope of equity method, due to acquisition of investments incapital.
2. Names, etc., of non-consolidated subsidiaries and affiliates not accounted for under equity method

Names of major companies, etc.:(Non-consolidated subsidiaries)
Hubei Lingyong Electronic Materials Co., Ltd.
(Affiliates)
Polyxylenol Singapore Pte. Ltd.
Reasons for not applying the equity method:
The equity method was not applied to these non-consolidated subsidiaries and affiliates since the net
income and loss, retained earnings, and the like corresponding to MGC’s interest in said companies
are small and do not have a significant impact overall on the consolidated financial statements.

Matters Related to Business Year, etc., of Consolidated Subsidiaries
The business years of the consolidated subsidiaries are the same as the consolidated fiscal year with the
exception of MGC Pure Chemicals Singapore Pte. Ltd., MGC Pure Chemicals Taiwan, Inc., and 28 othercompanies. In the case of the foregoing companies, December 31 marks the end of the business year,
and non-consolidated financial statements as of said date are used. However, adjustment required interms of consolidated statements is made with respect to major transactions taking place from January 1
to the end of the consolidated fiscal year.

Matters Related to Accounting Policy
1. Valuation Standard and Method for Securities
Held-to-Maturity securities:
Amortized cost method (straight-line method)
Available-for-sale securities
Securities apart from shares, etc. without market prices:
Market value method (revaluation variances are all
included directly in net assets and costs of sales arecalculated by the moving average method)
Shares, etc. without market prices:Moving average cost method
2. Valuation Standard and Method for Inventories
Mainly periodic average cost method (The amounts on the balance sheet have been calculated using thecost accounting method of reducing book value based on declining profitability.)
3. Valuation Standard for Derivatives
Mainly market value method
4. Depreciation of Fixed Assets
Property, plant and equipment (except for lease assets): Mainly straight-line method
Intangible fixed assets (except for lease assets):
Straight-line method
The expenses for internal use computer software are amortized by thestraight-line method over the estimated useful life (5 years).
Lease assets:
Finance lease transactions that do not transfer ownership to the lessee
Straight-line method for the duration of the lease period with aremaining balance of zero.

4

(Translation)

5. Accounting Standards for Reserves
Allowance for doubtful accounts:
Estimated uncollectible amounts are accounted for based on historical loan loss ratios in the case ofgeneral receivables and based on case-by-case examination of collectability in the case of specificreceivables, including doubtful receivables, in preparation against loss from the inability to collecton accounts receivable, loans, and the like.
Provision for bonuses:
Estimated bonus payments for the current consolidated fiscal year are accounted for in preparation
for payment of bonuses to employees.
Provision for business restructuring:A reasonably estimated future loss amount is accounted for in preparation for loss expected to be
incurred in line with the business structure improvement of businesses.
Provision for retirement benefits for directors (and other officers):
MGC and some of its consolidated subsidiaries account for an amount to be paid to Corporate
Officers at the end of the fiscal year pursuant to internal rules in preparation for payment of
retirement and severance benefits to Directors and Executive Officers.
Provision for loss on business of subsidiaries and associates
An estimated loss amount to be borne by MGC is accounted for in preparation for loss concerning
the business of subsidiaries and associates, in consideration of the financial condition, etc. of thosesubsidiaries and associates.
6. Accounting standards for revenue and expenses
The MGC Group mainly engages in the manufacture and sale of products in the Basic Chemicals andSpecialty Chemicals Businesses, and revenue from sales of these products is recognized when they aredelivered to the customer, as the Group determines that the customer acquires control over the products
at the time of delivery of the products to the customer and the performance obligations are deemed to besatisfied. For transactions in which the Group’s role in the sale of merchandise, etc. to the customer isthat of an agent, revenue from sales of such merchandise, etc. is recognized at the net amount of theamount received from the customer less the amount to be paid to the suppliers of such merchandise, etc.
7. Hedge Accounting Methods
Hedge accounting methods:
Deferred hedge accounting methods are applied. Also, allocation treatment is applied to exchange
fluctuation risk hedging in cases where requirements are met and “Exceptional accounting” isapplied to interest rate swaps in cases where requirements are met.
Hedging instruments and hedged items:
Forward exchange contracts hedge against accounts receivable and payable denominated in foreign
currencies and forecasted transactions denominated in foreign currency; interest rate swaps hedge
against interest rate transactions involved in borrowings.
Hedging policy:
MGC follows the policy of utilizing hedging instruments in the amount of the actual demand basedon the maximum limit of the derivative transactions and does not enter into derivative transactions
for speculative purposes.
Method of evaluation of effectiveness of hedging:
Comparison is made between market fluctuations of the hedges and or cumulative cash flow
fluctuations, and market fluctuations of the hedging instruments and cumulative cash flow
fluctuations, and effectiveness is evaluated based on the proportion of the amount of fluctuation.
However, effectiveness evaluation is omitted for interest rate swaps applying exceptional accounting.

5

(Translation)

8. Depreciation Method and Period for Goodwill
Periods for which the effects of investments are generated are estimated for each investment target, andare depreciated within 20 years using the straight-line method.
9. Other significant matters for preparing the consolidated financial statements
Recognition of retirement benefit liability
To prepare for the payment of retirement and severance benefits to employees, the amount of accrued
pension liabilities minus pension assets is recorded as retirement benefit liability, based on theestimated amount at the end of the current fiscal year.
MGC has a retirement and severance trust.
In the calculation of estimated retirement and severance benefits, the method for attributing estimatedretirement and severance benefits to the period up to the end of the current fiscal year is based on thebenefit formula standard.
Unrecognized prior service cost is amortized by the straight-line method over a portion (10 years) of
the estimated average remaining service years of employees at the time the cost was incurred.
Unrecognized actuarial gain or loss is amortized mainly by the declining balance method over a
portion (10 years) of the estimated average of remaining service years of employees from thefollowing fiscal year.
Unrecognized actuarial gain or loss and unrecognized prior service cost are recorded asremeasurements of defined benefit plans in accumulated other comprehensive income under net assets,
after adjustment for tax effects.

6

(Translation)

Notes on changes in accounting policy
1. Application of the Implementation Guidance on Accounting Standard for Fair Value Measurement
MGC has applied the “Implementation Guidance on Accounting Standard for Fair Value Measurement”(ASBJ Guidance No. 31, June 17, 2021; hereinafter referred to as “Fair Value Measurement Guidance”)
from the beginning of the current fiscal year, and will prospectively apply the new accounting policies
stipulated by the Fair Value Measurement Guidance in accordance with the transitional treatment
provided in Paragraph 27-2 of the Fair Value Measurement Guidance. This change has no impact on the
consolidated financial statements for the current fiscal year.
2. Application of Accounting Standards Update (ASU) 2016-02, Leases
Overseas consolidated subsidiaries that apply the USGAAP have applied the Accounting Standards
Update (ASU) 2016-02, Leases from the beginning of the current fiscal year, and, in principle, all leases
as lessee are now recorded as assets and liabilities on the consolidated balance sheets. In applying suchaccounting standards update, the cumulative effect of applying such accounting standards update, whichis permitted as a transitional measure, is recognized at the start date of application. This change has only
minor impact on the consolidated financial statements for the current fiscal year.

Notes on accounting estimates
1. Impairment of non-current assets
Amounts recognized in the consolidated financial statements for the current fiscal year:
Property, plant and equipment:¥313,767 million
Intangible assets:¥11,980 million
Impairment loss:¥1,128 million
Non-current assets held by the MGC Group are to be accounted for on the basis of the “AccountingStandard for Impairment of Fixed Assets”
Accordingly, certain assumptions have been made regarding years of remaining economic useful life,
future cash flows, discount rates and other such variables in calculating recoverable amounts used inmeasuring impairment.
Whereas these assumptions are based on best estimates of management, they may be subject to changes
with respect to future uncertainties in terms of economic conditions. Accordingly, any necessary revisionin that regard may could materially affect amounts recognized in the consolidated financial statementsof subsequent fiscal years.

Notes on Consolidated Balance Sheet
1. Collateralized Assets and Secured Debts
Collateralized assets are as follows:(Millions of yen)Land
Buildings and structures
Machinery, equipment and vehicles
Investments in securities (Note)
Total

3,338
1,280
682
6,847
12,149Note: ¥2,625 million in shares of Yuzawa Geothermal Power Corporation, ¥2,555 million in shares of Appi Geothermal Energy
Corporation, as well as ¥1,563 million in bonds and ¥108 million in shares of Fukushima Gas Power Co., Ltd. are collateralized
for their respective loans.

7

(Translation)

Secured debts are as follows:(Millions of yen)

Current portion of long-term borrowings
Long-term debt
Total

370
735
1,106

2. Cumulative depreciation of property, plant and equipment:¥676,384 million
Cumulative depreciation includes cumulative impairment loss on fixed assets.
3. Reduction entry directly deducted from the acquisition price of property, plant and equipment:¥12,509 million
4. Guarantees:(Balance of debt guarantee)¥8,355 million(Major guaranteed parties)
Hubei Lingyong Electronic Materials Co., Ltd.

¥2,437 million

Abashiri Biomass 2nd Power Plant LLC.

¥1,905 million

Abashiri Biomass 3rd Power Plant LLC.

¥1,809 million

Employee¥26 million

Notes on Consolidated Statement on Changes in Net Assets
1. Matters Related to Issued and Outstanding Shares
Common Stock:222,239,199 Shares

2. Matters Related to Dividends(1) Dividends Paid
Resolution
Board of Directors’ Meeting;May 26, 2022
Board of Directors’ Meeting;
November 8, 2022

Class of
Stock

Total Amount of
Dividends

Dividendper Share

Common¥7,281 million¥35.00Common¥8,183 million¥40.00Record Date
March 31,2022
September 30,
2022

Effective
Date
June 9,2022
December 6,
2022(2) Dividends for Which Record Date Falls in the Current Consolidated Fiscal Year but Effective
Date Falls in the Following Consolidated Fiscal Year
Resolution

Class of
Stock

Total Amount of
Dividends

Resource

Dividendper Share

Board of Directors’Meeting; May 26, 2023

Common¥8,183million

Retained
Earnings¥40.008

RecordDate
March 31,2023

Effective
Date
June 8,2023

(Translation)

Notes on Financial Instruments
1. Matters Relating to the Conditions of Financial Instruments(1) Policy on Financial Instruments
The MGC Group primarily takes the plans for future cash flow into account when procuring
necessary funds (mainly through bank loans and bond issues). Temporary surplus of funds ismanaged through secure financial assets and short-term working capital is financed through bankloans. The MGC Group uses derivatives for the purpose of mitigating the risks described below anddoes not engage in transactions for speculative purposes.
(2) Contents and Risk of Financial Instruments
Trade notes and accounts receivable are trade receivables, which are subject to the credit risks of thecustomers. Trade notes and accounts payable are trade liabilities due within one year. Although a
portion of the Group’s trade receivables and trade liabilities, being denominated in foreign currencies,
are subject to risks associated with changes in the foreign currency exchange rates, the net positionis basically hedged through the use of forward exchange contracts.
Short-term investments and investments in securities mainly comprise stocks of companies withwhich the Group has business relations, and are subject to risks associated with fluctuations of theirmarket prices.
Borrowings, bonds and lease liabilities associated with finance leases are used primarily for
procuring the necessary funds for capital expenditures and working capital. Although a portion ofthese funds, having floating interest rates, is subject to risks associated with fluctuating interest rates,
such risks are hedged through the use of derivative transactions (interest rate swap agreements).
Derivative transactions include forward exchange contracts used for the purpose of hedging against
risks of exchange rate fluctuations of foreign-currency denominated trade receivables and liabilities
and forecasted transactions denominated in foreign currency, and interest rate and currency swap
contracts used for the purpose of hedging against risks associated with the payment of interest andchanges in the currency exchange of loans.
For methods of hedge accounting, hedging targets and hedging policies, please refer to “Methods ofHedge Accounting” under “Matters Related to Accounting Policy,” stated above.
(3) System of Risk Management for Financial Instruments
1) Management of Credit Risks (risks associated with breach of contract by the customer)
MGC and its consolidated subsidiaries, in accordance with the Rules on the Management of Trade
Receivables, manage their operating receivables by having the Sales Administration Department
at each Division regularly monitor the status of their major customers and keep track of thepayment dates and outstanding balances of each customer, while also enabling early recognition
and mitigation of cases where there is concern for collection due to deteriorating financial
conditions and other factors. Held-to-maturity bonds, pursuant to the Rules on Investment ofSurplus Funds, are managed as bonds that may be converted into cash at any time.
The maximum risk amount as of the end of current fiscal year has been represented as theConsolidated Balance Sheet Amount of financial assets subject to credit risk.
2) Management of Market Risks (risks associated with changes in exchange and interest rates)
MGC and its consolidated subsidiaries, in accordance with the Financial Rules and the Rules for
the Management of Derivatives, engage in transactions entailing market risks only after thedivision in charge of finances has obtained the approval of the officer in charge or other authorized
decision-making parties.
Risks associated with trade receivables/trade obligations denominated in foreign currencies,
forecasted transactions denominated in foreign currency and surplus funds that have beenmonitored on a monthly basis and according to each currency are basically hedged through the useof forward exchange contracts. Additionally, interest rate and currency swap contracts are used to9(Translation)

hedge against the risks associated with the payment of interest and changes in the currency
exchange of loans.
In terms of securities and investment securities, their fair values and the financial status of theissuers (customers) are monitored on a regular basis; while the holding status of securities
classified in categories other than held-to-maturity bonds are continuously reviewed.
3) Management of Liquidity Risk (risk of not being able to execute payment on payment date)
MGC and its consolidated subsidiaries manage liquidity risks by having the divisions in charge offinances prepare and update cash flow plans, as necessary, and maintain a certain level of liquidity
at hand.
(4) Supplementary Explanation of Matters Relating to the Fair Value of Financial Instruments and Others
Since certain variable factors are incorporated into the calculation of the fair values of financial
instruments, they may differ when adopting different assumptions.
2. Matters Relating to the Fair value of Financial Instruments and Others
The following are the consolidated balance sheet amounts, fair values and differences between them asof March 31, 2023. Shares, etc. without market prices are not included in the table below (see (Note 1)).
Notes on cash are omitted, as are notes on deposits, notes receivable - trade, accounts receivable - tradeand contract assets, notes and accounts payable - trade, short-term borrowings, and accrued expenses, asthese are settled in a short period of time and the balance sheet amount approximates fair value.
Investments in partnerships, etc., which are carried on the consolidated balance sheets at the net value ofthe equity interest are not subject to the Fair value disclosure, and for which MGC applies the provisionsof Paragraph 24-16 of “Implementation Guidance on Accounting Standard for Fair Value Measurement”(Fair Value Measurement Guidance) (see (Note 2)).
(Millions of yen)

(1) Securities and investment securities(2) Bonds payable(3) Long-term borrowings(4) Derivative transactions
1) Derivative transactions not qualifying
for hedge accounting2) Derivative transactions qualifying forhedge accounting

Consolidated
Balance Sheet
Amount28,35420,00074,680Fair Value

Difference

28,354
19,64973,214－(350)(1,465)

(295)

(295)

－

25

25

－

(*) Net receivables and liabilities generated through derivative transactions are presented as net amounts and in cases
where the total amount represents a net liability, such amounts have been put in parentheses.
Notes: 1. Shares, etc. without market prices
Unlisted stocks

Consolidated Balance Sheet Amount¥171,572 million

2．Investments in partnerships, etc., carried at the net value of the equity interest
Consolidated Balance Sheet Amount
Investments in partnerships, etc.
¥268 million

3. Breakdown of Financial Instruments by Level of Fair Value
The fair value of financial instruments is classified into the following three levels based on theobservability and significance of the inputs used to calculate fair value.
Level 1 fair values: Fair values calculated using (unadjusted) market prices in active markets for
identical assets or liabilities

10(Translation)

Level 2 fair values: Fair values calculated using directly or indirectly observable inputs other than thosein Level 1
Level 3 fair values: Fair values calculated using significant unobservable inputs
When multiple inputs that may have a material impact on the calculation of fair value are used, thecalculated fair value is classified at the lowest level of the inputs used.
(1) Financial assets and financial liabilities carried on the consolidated balance sheets at fair value(Millions of yen)
Fair ValueClass

Level 1

Level 2

Level 3

Total

Securities and investment securities
Available-for-sale securities
Shares

26,697--

26,697

Bonds

-

1,563

-

1,563

Other

93

-

-

93

-

(420)

-

(420)

-

125

-

125

-

25

-

25

Derivative transactions
Derivative transactions not qualifying forhedge accounting
Currency-relatedInterest-related
Derivative transactions qualifying for hedge
accounting
Currency-related(*) Net receivables and liabilities generated through derivative transactions are presented as net amounts and in cases
where the total amount represents a net liability, such amounts have been put in parentheses.

11(Translation)(2) Financial assets and financial liabilities not carried on the consolidated balance sheets at fair value(Millions of yen)
Fair ValueClass

Level 1

Bonds

Level 2

Level 3

Total

19,649--19,649-73,214-73,214Long-term borrowings

Note: Explanation of the valuation techniques and inputs used to calculate fair value
Securities and investment securities
Shares are valued using prices on securities exchanges. Because shares are traded in active markets,their fair value is classified as Level 1. However, because the markets for bonds are not regarded as
active markets due to the low frequency of transactions, their fair value is classified as Level 2.
Derivative transactions
Fair value is calculated based on the prices provided by MGC’s partner financial institutions, etc., andis classified as Level 2.
Bonds
The fair value of bonds issued by MGC is calculated based on market prices, etc., and is classified as
Level 1.
Long-term borrowings
Fair value is calculated as the present value of the sum of principal and interest amounts, discounted
using the estimated rates for new borrowings, and is classified as Level 2.

Notes on Rental Property
Matters Concerning the Status and Fair Value of Rental Property
1. Outline of Rental Property
MGC and a portion of its subsidiaries own land and buildings for rent in Tokyo and in other areas.
2. The Consolidated Balance Sheet Amount of Rental Property, Major Changes Thereof during the Fiscal
Year, the Fair Value Thereof as of the Fiscal Year-end and the Method for Calculation of Fair Value
Balance as ofApril 1, 2022
¥6,314 million

Consolidated Balance Sheet Amount
Changes during
Balance as of
fiscal year
March 31, 2023
¥202 million¥6,516 million

Fair value as ofMarch 31, 2023
¥8,883 million

Notes: 1. The consolidated balance sheet amount is the amount of acquisition cost less cumulative depreciation andcumulative impairment loss.
2. Major changes
New lease in MGC:¥469 million
3. Method for calculation of fair value
The amount is based primarily on indices including roadside land prices.

3. Profit or Loss Relating to Rental Property
Profit or loss from rent on rental property:
Profit or loss on sales of rental property:¥137 million¥△124 million

12

(Translation)

Notes on Per Share Information
Net Assets per ShareNet Income per Share¥2,970.07¥239.08

Notes on Revenue Recognition
1. Disaggregation of revenue from contracts with customers
Revenue disaggregated by geographical segment is as follows:(Millions of yen)
Basic Chemicals
Business Sector

Specialty Chemicals
Business Sector

Other(Note)

Adjustment

Total

Japan

236,568

86,085

65－322,720

Asia (China)

36,20960,950－－97,160Asia (Other)

87,836112,329－－

200,166

U.S.A.

41,28727,568－－68,856

Other Regions

70,26521,9692－

92,237

Revenue from contracts
with customers

472,167

308,904

68－

781,141

－

－

69

－

69

472,167

308,904

138－

781,211

Other revenue
Net sales to externalcustomers

Note: “Other” includes businesses such as real estate that do not belong to a reportable segment.

2. Information Fundamental for an Understanding of Revenue Arising from Contracts with Customers
The MGC Group recognizes revenue in an amount that reflects the consideration to which the MGC
Group expects to be entitled in exchange for transferring goods or services to customers, based on thefollowing five-step procedure for revenue recognition.
Step 1: Identify the contract with a customer
Step 2: Identify performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when (or as) performance obligations are satisfied
The main business of the MGC Group is the manufacture and sale of various products in the Basic
Chemicals Business and Specialty Chemicals Business. Revenue from the sale of these products is
recognized at the time of delivery, because MGC considers that, at the time of delivery, the customer
gains control over the product, and MGC has therefore satisfied its performance obligations.
Revenue is estimated as the net consideration promised under the contract with the customer, after
deducting discounts, rebates, returns, etc. Moreover, for transactions where the role of the MGC Group13

(Translation)in the sale of products, etc. to customers is that of an agent, MGC only recognizes the net amount after
deducting the amount payable to the supplier of the products, etc. as revenue.
The consideration under product sales contracts is generally collected within one year after control
over the product is transferred to the customer, and therefore does not include a significant element offinance.
3. Information to Enable an Understanding of the Amount of Revenue for the Current Consolidated Fiscal
Year and the Next Consolidated Fiscal Year Onward(1) Balance of Contract Assets and Contract Liabilities
The balance of contract assets and contract liabilities for the MGC Group is omitted because
the amounts are insignificant and there has been no material change in the amounts. The amountof revenue recognized in the current fiscal year from performance obligations satisfied (orpartially satisfied) in previous periods is also immaterial.
(2) Transaction Price Allocated to Remaining Performance Obligations
MGC has applied practical expediency and omitted presentation of the transaction priceallocated to remaining performance obligations for the MGC Group because there are nomaterial contracts for which the initially expected contract term exceeds one year, with the
exception of royalties based on net sales or usage volumes. Moreover, there are no material
amounts of consideration arising from contracts with customers that are not included in thetransaction price.

Other Notes
Amounts less than ¥1 million are rounded off.

- End of Notes to Consolidated Financial Statements -14

(Translation)(Non-Consolidated Statement of Changes in Net Assets)(April 1, 2022 to March 31, 2023)(Millions of yen)

Valuation andtranslation
adjustments

Shareholders’ equity
Capital surplus
Share capital

Balance at beginning of
period41,970Retained earnings

Legal capitalsurplus

Other capitalsurplus

Total capitalsurplus

Legal retained
earnings

Reserve formine
prospecting

35,66853

35,722

6,999

2,365

Reserve for tax
purpose reduction
entry of non-current
assets2,920

Generalreserve

76,500

Valuationdifference on
available-forsale securities

10,179Total net
assetsRetainedearnings
brought forward

Total retained
earnings

Treasury shares

Total
Shareholders’equity167,871

256,656△21,525

312,823△15,464△15,464△15,464△15,464

37,37137,37137,37137,371

157

-

－

－

Other retained earnings

323,002

Changes during period
Dividends of surplus
Net income
Reversal of reserve for tax
purpose reduction entry of
non-current assets△157

Provision of reserve formine prospecting

340

△340

-

－

－

Reversal of reserve formine prospecting

△465

465

-

－

－

△7,083△7,083△7,083Purchase of treasury
shares
Disposal of treasury
sharesCancellation of treasury

sharesTransfer from retained
earnings to capitalsurplus

23

23

47

70

70

△4,724△4,724

4,724

-

-

4,647

4,647

Decrease by corporate
division△4,647△4,647--△3,857△3,857△3,857△3,857

Net changes of items
other than shareholders’equity△2,116△2,116

Total changes during theperiod

-

-

△53

△53

-

△125

△157

-

13,685

13,420△2,312

11,036△2,116

8,919

Balance at end of period

41,97035,668-35,668

6,999

2,240

2,762

76,500181,556

270,058△23,838

323,859

8,063

331,92215

(Translation)(Notes to Non-consolidated Financial Statements)
Notes Related to Important Accounting Principles
1. Valuation Standard and Method for Securities
Interest in Subsidiaries and Affiliates:
Moving average cost method
Other Securities
Securities apart from shares, etc. without market prices:
Market value method (revaluation variances are all
included directly in net assets, and costs of sales arecalculated by the moving average method)
Shares, etc. without market prices:Moving average cost method
2. Valuation Standard and Method for Inventories:
Total average cost method (The amounts on the balance sheet have been calculated using the costaccounting method of reducing book value based on declining profitability.)
3. Valuation Standard for Derivatives: Market value method
4. Depreciation of Fixed Assets
Tangible Fixed Assets (except for lease assets):
Straight-line method
Intangible Fixed Assets (except for lease assets):
Straight-line method
The expenses for internal use computer software are amortized by thestraight-line method over the estimated useful life (5 years).
Lease assets:
Finance lease transactions that do not transfer ownership to the lessee
Straight-line method for the duration of the lease period with aremaining balance of zero.
5. Accounting Standards for Reserves
Allowance for doubtful accounts:
Estimated uncollectible amounts are accounted for based on historical loan loss ratios in the case ofgeneral receivables and based on case-by-case examination of collectability in the case of specificreceivables, including doubtful receivables, in preparation against loss from the inability to collecton accounts receivable, loans, and the like.
Provision for bonuses:
Estimated bonus payments for the current fiscal year are accounted for in preparation for paymentof bonuses to employees.
Provision for business restructuring:A reasonably estimated future loss amount is accounted for in preparation for loss expected to be
incurred in line with the business structure improvement.
Provision for loss on business of subsidiaries and associates:
An estimated loss amount to be borne by MGC is accounted for in preparation for loss concerning
the business of subsidiaries and associates, in consideration of the financial condition, etc. of thosesubsidiaries and associates.

16

(Translation)

Provision for retirement benefits:
An amount based on estimated accrued pension liabilities and pension assets as of the end of thecurrent fiscal year is accounted for in preparation for payment of retirement and severance benefits
to employees.
MGC has a retirement and severance trust.
In the calculation of accrued pension liabilities, the method for attributing estimated retirement andseverance benefits to the period up to the end of the current fiscal year is based on the benefit formula
standard.
Prior service cost is amortized by the straight-line method over a portion (10 years) of the estimatedaverage remaining service years of employees at the time the cost was incurred.
Unrecognized actuarial gain or loss is amortized by the declining balance method over a portion (10years) of the estimated average of remaining service years of employees from the following fiscal
year.
6. Accounting standards for revenue and expenses
MGC mainly engages in the manufacture and sale of products in the Basic Chemicals and Specialty
Chemicals Businesses, and revenue from sales of these products is recognized when they are delivered
to the customer, as MGC determines that the customer acquires control over the products at the time ofdelivery of the products to the customer and the performance obligations are deemed to be satisfied.
7. Other significant matters that form the basis for preparing the non-consolidated financial statements
Hedge accounting methods“Exceptional accounting” is applied to interest rate swaps in cases where requirements are met.
Accounting method for retirement benefits
The accounting method for unrecognized actuarial gain or loss and unrecognized prior service costfor retirement and severance benefits is different from that of consolidated financial statement.

Notes on changes in accounting policies
1. Application of the Implementation Guidance on Accounting Standard for Fair Value Measurement
MGC has applied the “Implementation Guidance on Accounting Standard for Fair Value Measurement”(ASBJ Guidance No. 31, June 17, 2021; hereinafter referred to as “Fair Value Measurement Guidance”)
from the beginning of the current fiscal year, and will prospectively apply the new accounting policies
stipulated by the Fair Value Measurement Guidance in accordance with the transitional treatment
provided in Paragraph 27-2 of the Fair Value Measurement Guidance. This change has no impact on the
non-consolidated financial statements for the current fiscal year.

Notes on accounting estimates
1. Impairment of non-current assets
Amounts recognized in the financial statements for the current fiscal year:(Millions of yen)

Property, plant and equipment:
120,040
Intangible assets:
1,828
Impairment loss:
312
Other information regarding the content of accounting estimates is omitted because it is the same as thatstated in the notes to consolidated financial statements.

17

(Translation)

Notes on Non-consolidated Balance Sheet
1. Collateralized Assets
Collateralized assets are as follows:(Millions of yen)

Investments in securities (Note 1)
Stocks of subsidiaries and affiliates (Note 2)

1,671
4,243

Notes: 1. ¥1,563 million in bonds and ¥108 million in shares of Fukushima Gas Power Co., Ltd. are collateralized for its
bonds and loans.
2. ¥2,550 million in shares of Appi Geothermal Energy Corporation and ¥1,693 million in shares of Yuzawa
Geothermal Power Corporation for their respective loans.

2. Cumulative depreciation of property, plant and equipment:¥337,500 million
Cumulative depreciation includes cumulative impairment loss on fixed assets.
3. Reduction entry directly deducted from the acquisition price of property, plant and equipment:¥9,277 million
4. Guarantees
Loans, etc. of affiliates and others guaranteed:(Outstanding loan guarantees)¥18,955 million(Major guaranteed parties)
Taixing MGC Suhua Specialty Materials Co., Ltd.
Mitsubishi Gas Chemical Engineering-Plastics (Shanghai) Co., Ltd.
Abashiri Biomass 2nd Power Plant LLC.
Abashiri Biomass 3rd Power Plant LLC.
Hubei Lingyong Electronic Materials Co., Ltd.
Employee
5. Receivables from and Payables to Affiliates
Short-term receivables
Long-term receivables
Short-term payables¥120,929 million¥7,304 million¥65,448 million

Notes on Non-consolidated Statement of Income
Volume of Transaction with Affiliates
Volume of Business Transactions
Sales
Purchase
Volume of Non-Business Transactions¥270,567 million¥135,907 million¥24,246 million

Note on Non-consolidated Statement on Changes in Net Assets
Number of issued and Outstanding Shares
Common Stock
222,239,199 SharesClass and number of treasury shares as of the end the current fiscal year:
Common Stock
17,660,740 Shares

18¥5,945 million¥5,371 million¥1,905 million¥1,809 million¥1,218 million¥10 million

(Translation)

Note on Deferred Tax Accounting
Major Components of Deferred Tax Assets and Liabilities
Major components of deferred tax assets
Matters related to retirement and severance benefits
Provision for bonuses¥5,757 million¥935 million

Deferred tax assets are presented net of valuation allowance of ¥17,170 million.
Major components of deferred tax liabilities
Gain on contribution of securities to retirement benefit trust ¥△1,255 million
Reserve for tax purpose reduction entry of non-current assets ¥△1,219 million

Notes on Transactions with Affiliated Companies
Subsidiaries and Affiliates, etc.
(Millions of yen)
Attribute

Name of Company% Voting
Rights Owned

Relationshipwith AffiliatedCompany

Subsidiary

Taixing MGC Suhua
Specialty Materials Co.,
Ltd.

100% directownership

Guarantee
of debts,
etc.

Subsidiary

Mitsubishi Gas Chemical
Trading Inc.

100% directownership

Sale ofMGC
product, etc.

Description ofTransaction

Transaction
VolumeGuarantee
of debts
Sales ofvariousproducts

ClassYear-End
Balance

5,945

--

--

107,149

Accounts
receivable

28,533(Note 1)

Short-term
loans
13,140receivable
Short-term
MGC Pure Chemicals
80% direct
Loan of
Loan of funds
Subsidiary
7,350
loans
12,004(Note 2)
America, Inc.
ownership
funds, etc.
receivable
Short-term
Global Polyacetal Co.,
100% direct
Loan of
Loan of funds
Subsidiary
8,100
loans
10,187(Note 2)Ltd.
ownership
funds, etc.
receivable
Notes: 1. Sales of various products are determined in the same way as general trading conditions, referring to market prices.
2. The interest rate on loans is determined reasonably in consideration of market interest rates. The transaction
amount includes the net increase or decrease for the current fiscal year.
Subsidiary

MGC Pure Chemicals
Taiwan, Inc.

100% directownership

Loan offunds, etc.

Loan of funds(Note 2)

2,766

Notes Related to Per Share Information
Net Asset per ShareNet Income per Share¥1,622.47¥182.03

Notes on Revenue Recognition
Information fundamental for an understanding of revenue from contracts with customers has been
omitted, as it is the same as stated in the notes to consolidated financial statements.

Other Notes
Amounts less than ¥1 million are rounded off.
- END of Notes to Non-consolidated Financial Statements -- END of this document-19