Our company-owned forests at Nishigo-mura, Nishishirakawa-gun, Fukushima Pref.

Annual Report2018Profile

Mitsubishi Paper Mills Limited was established by Mitsubishi’s third president, Hisaya Iwasaki in 1898.
Since its founding, the Mitsubishi Paper Mills Group has contributed to the development of publishing,printing and photographic media culture through its high value-added printing and communication
paper, and products.
Dedicated to contributing to society by providing customers with products backed by advanced
technological capabilities, we have the following three goals as a Group Philosophy:
1. A corporate group that lives up to the trust of its customers in the world market
2. A corporate group that is always on the leading edge of technology
3. A corporate group that contributes to preserving the global environment and creating a recycling society
Mitsubishi Paper Mills produces and develops not only printing paper, printing plate materials andprinting systems supporting offset and other printing, but also supplies the media for almost all recording
formats, such as pressure-sensitive, thermal, magnetic, electrographic, silver halide photographic
and inkjet paper. Furthermore, we are adding functional materials such as functional paper, highly functional
filters to our operating business domains, and increasing emphasis on research and development
in new business areas.
With production facilities and R&D sites mainly located in Japan and Germany, and sales sites
located in Japan, Germany and the United States, we have positioned ourselves to serve global
markets.

Contents
FINANCIAL HIGHLIGHTS (CONSOLIDATED) ............. 1
MESSAGE FROM THE PRESIDENT ............................ 2
BREAKDOWN OF OPERATIONS BY BUSINESS ........ 4
TOPICS ........................................................................ 6
OUR MILLS AND THEIR PRODUCT LINES ................. 8
SIX-YEAR SUMMARY (CONSOLIDATED) ................... 9

CONSOLIDATED STATEMENTS OF
CHANGES IN NET ASSETS ..................................... 14
CONSOLIDATED STATEMENTS OF CASH FLOWS.......... 15
NOTES TO CONSOLIDATEDFINANCIAL STATEMENTS....................................... 16
INDEPENDENT AUDITOR’S REPORT ....................... 32

CONSOLIDATED BALANCE SHEETS........................ 10

BOARD OF DIRECTORS, EXECUTIVE OFFICERS ANDCORPORATE AUDITORS......................................... 33

CONSOLIDATED STATEMENTS OF OPERATIONS .. 12

COMPANY DATA ....................................................... 34

CONSOLIDATED STATEMENTS OFCOMPREHENSIVE INCOME.................................... 13

Mitsubishi Paper Mills Limited and Consolidated Subsidiaries

Financial Highlights (Consolidated)
Millions of yen (1)Thousands of
U.S. dollars (1) and (2)For the years ended March 31
Net sales
Operating income
Net income attributable to owners of parent
Net income per share (in yen and dollars) (3)Cash dividends per share (in yen and dollars)

2018

2017

¥ 201,492
1,790
3,198
93.57
5.00

¥201,955
4,313
1,152
33.72
−

$1,896,579
16,85230,1050.88
0.05

As of March 31
Total assets
Total net assets
Common stock
Net assets per share (in yen and dollars) (3)¥ 237,426
61,07732,756
1,747.54¥235,869
56,63132,756
1,591.00$2,234,808
574,900
308,323
16.45

13,467
3,723

14,406
3,734

Number of shareholders
Number of employees

2018

Notes: (1) In this annual report, Japanese yen (in millions) and U.S. dollars (in thousands) are indicated with fractions omitted.
(2) U.S. dollar amounts in this report represent translations of yen amounts at the rate of ¥106.24 = U.S.$1, as of March 31, 2018.
(3) On October 1, 2016, the share consolidation was executed at a ratio of 1share per 10 shares.
Net income per share, and net assets per share, are calculated based on the assumption that the share consolidation was executed at the beginning of the fiscal year
ended March 31, 2017.

Net Sales

14
15
16
17
18

Operating Income

14
15
16
17
18

(¥ Millions)(¥ Millions)

Net Income(Loss)
Attributable to
Owners of Parent(¥ Millions)

Total Net Assets(¥ Millions)

Sales
Composition

207,470
214,944
216,340
201,955
201,492
473

1,038

3,872
1,790
280
(4,272)

14
15
16
17
18

1,152

2,217
3,198
55,58655,09451,492
56,631
61,077

14
15
16
17
18
Others 0.9%
Warehouse & Transportation
2.6%
Speciality Materials
7.0%

Paper & Pulp 73.7%

Imaging Media
15.8%

1

4,313

Message from the President“stabilizing revenue through alliances” in accordance with theSecond Mid-term Management Plan (from April 2016 to March2019).
Following the Second Mid-term Management Plan, we had
been forming alliances with Oji Group in biomass power generating
business, household and consumer paper business, etc. Bothcompanies agreed that strengthening cooperative relationship in
multiple businesses is essential for ensuring sustainable growth,and then we concluded a capital alliance agreement with Oji
Holdings Corporation in February 2018.
The consolidated net sales for the current term was ¥201,492
million (US$1,896 million) (down 0.2% year on year) due todecreased demand for existing products, etc.
As for profits and losses, negative factors including increase of
raw materials and fuel costs and such could not be compensatedby the limited effect of revisions made to selling prices of paper,and consolidated operating income was ¥1,790 million (US$16
million) (down 58.5% year on year) while consolidated ordinary
income was ¥652 million (US$6 million) (down 75.8% year on year).
As gain on sale of fixed assets and investment securities wasposted, and the posting of deferred tax assets reduced adjustments
to corporate tax, etc. profit attributable to owners of parent was¥3,198 million (US$30 million) (up 177.5% year on year).
As for non-consolidated performance, net sales were ¥118,445
million (US$1,114 million), ordinary income ¥3,543 million (US$33
million), and profit ¥4,050 million (US$38 million).

Our Goals to Address[Second Mid-term Management Plan]
We have formulated the Second Mid-term Management Plan (from
April 2016 to March 2019) based on the key concept of “stabilizing
revenue through alliances” and are making efforts to establish andstrengthen a revenue structure that will be unaffected by theexternal environment to deal with the business environment wherecompetitions are getting fierce.
In the current term, which is the second year of the Second
Mid-term Management Plan, in order to take the alliance with Oji
Group to a more comprehensive and constructive level, we
concluded a capital alliance agreement. We concluded thisagreement, while believing that strengthening our cooperative
relationship in multiple businesses rather than having a one-timecooperation in a certain business is essential for ensuring sustainable growth.
Through this alliance, while placing value on autonomy inmanagement and respecting the relationship with existing clients,
we would like to have Oji Group as a long-term partner and extend
and expedite mutual cooperation to achieve sound and sustainablegrowth, and maximize corporate value over the medium to longterm.

Kunio Suzuki, President & C.E.O.

Overview of the Reporting Term
The current term, although there were uncertainties over theinternational situation with rising of geopolitical risks, uncertainty
regarding the American administration’s policy management, andso on, the global economy showed a general trend of recovery. The
Japanese economy was also on a moderate recovery trend, thanks
to firm corporate earnings and improvement in labor and income
conditions. As for the paper and pulp industry, business conditions
especially for the mainstay paper business have become increasingly challenging, owing to structurally depressed demand due todigitalization of information media, increasing raw material and fuelcosts, etc.
Under such conditions, we have been working on measures toestablish and strengthen a revenue structure that will not beaffected by the external environment under the 4 fundamental
policies (1) Structural reform of printing paper business; (2)Improving profit base; (3) Developing new businesses; and (4)Strengthening business foundation and financial ground that will
support the Group’s earning power based on the key concept of2

Structural Reform of Printing Paper Business・We will achieve stable earning structure not affected by the external
environment through structural reform and strengthening our alliance with Oji
Group.
・We will optimize our distribution and logistics systems.

2

Improving Proﬁt Base・We will strengthen our alliance with Fujifilm Corporation to build an efficient
production system.
・We will improve the profit base business by effectively using the businesssuperiority and positioning of Mitsubishi Paper Mills.

3

Developing New Businesses

・We will launch a biomass power generation business in collaboration with Oji
Group.
・We will strategically develop new businesses.
・We will make careful strategic and selective investment in the focus fields.

4

Strengthening business foundation and ﬁnancial
ground that will support the Group s earning power

Additionally, aiming to strengthen the profit base of HachinoheMill, we are expanding the scope of business alliance with Oji
Group to inaugurate biomass power generating business (to be
started in July 2019) and household and consumer paper business(to be started in April 2019).
<Strengthening business foundation and financial ground that will
support the Group’s earning power>
In order to restructure our business processes and IT base, we aremaking efforts to develop a business foundation that can flexibly
respond to management strategies. We achieved the goals set forinterest-bearing liabilities and D/E ratio in the Second Mid-termManagement Plan ahead of schedule in the current term.
<CSR (Corporate Social Responsibility)>
Prioritizing to build a sustainable future together with thesociety, we believe it necessary to take precise effort to clear
environmental, social and financial perspectives through close
communication with all stakeholders. We acknowledge that the
purpose of CSR activities is to lead to an increase in our corporate
value through gaining the trust and compassion of the public.
Based on such acknowledgement, we strive to carry out CSR
activities to realize sustainable development.
During the current term, we addressed the most important
challenges of “ensuring product quality” and “enhancement ofactivity on safety and health.” Additionally, we expanded ourenvironment-conscious products including FSC forest-certified
products, which contribute to the achievement of the United
Nation’s Sustainable Development Goals (SDGs).
The 3 most important challenges in the following term are“enhancement of activity on safety and health,” “customer-oriented
product development,” and “promoting policies to enhance
employees’ performance.” We will endeavor to conduct CSR
activities that will lead to mid- to long-term development andincreasing our corporate value as well.

Stabilization of proﬁt through Alliances

1

・We will work on the reconstruction of business process and IT infrastructure
to achieve the Group’s business structure reform.
・We will promote reduction of interest bearing debts, which we havemanaged to reduce to the pre-Great East Japan Earthquake level, andfurther strengthen the Group’s financial ground.

<Structural reform of printing paper business>
As part of the alliance with Oji Group, we aim to expand sales ofcommunication paper, increase export of printing paper, combinethat with strengthening of direct sales of pulp, to maintain operation
rate of Hachinohe Mill and stabilize sales volume at the same time;and improve efficiency of the supply chain from production to sales(optimization of distribution and logistics systems), with the aim ofestablishing a stable revenue structure.
As for business in Germany, we started considering thereorganization of German subsidiaries with Oji Group.
<Improving profit base>As for the imaging business, while we strive to strengthen theoperation base through the alliance with Fujifilm for photographic
base paper, we are further enhancing our existing products, which
are already maturing, by actively expanding the business in foreign
markets.
In the speciality materials business, we strive to expand sales
in Asia with focus on China, the U.S. and Europe and by utilizing ourown technologies, and are making steady progress in filter
business, non-woven fabric business including water treatment
membrane support substrate, rewritable thermal recording material
business, and businesses of decorative laminate base paper andtape base paper.
<Developing new businesses>
We are taking steps to expand business in growth sectors such asfunctional films and digital image transfer inkjet paper for textile printing
based on our imaging technology, battery separators with superior
quality, etc. as well as taking steps to establish next new business.
Regarding functional films in particular, we started constructionof new manufacturing facilities and are preparing for its start up in
January 2019.

Forecast

The consolidated financial performance for the following term is
forecasted to have net sales of ¥205,000 million (US$1,863 million),
operating income of ¥1,500 million (US$13 million), ordinary incomeof ¥500 million (US$4 million), and profit attributable to owners ofparent of ¥500 million (US$4 million).
The above forecast presumes 110 yen will equal 1 US dollar
and 130 yen will be worth 1 euro.
The business forecast is based on our judgment and available
information at the time of creation and contains risks and uncertain
elements. It is possible that actual results and figures may differ
from the estimates according to various factors.
June 2018

Kunio Suzuki,
President & C.E.O.

3

Breakdown of Operations by Business

Paper and Pulp
Business

Net sales (¥ Millions)
164,31916
17

150,42818

152,220

As for domestic sales, thanks to the effect of the alliance, etc.

As for European subsidiaries, both sales and sales volume

sales of communication paper have been continuously perform-

increased as demand for the mainstay products, thermal paper

ing well. On the other hand, due to further decline in demand forin particular, was steady.

printing paper, sales volume decreased. Regarding exports,

As for commercial pulp, we seized the steep price jump, andthere has been an increase in sales volume of printing paper,

endeavored to expand sales domestically and internationally. As

however it wasn’t enough to cover the domestic decline. As aa result, both sales and sales volume increased.

result, sales volume decreased, sales amount decreased also as

Consequently, the total net sales of the Paper and Pulp Businessthe price revision done during the term yielded limited effect.

Imaging Businesswere ¥152,220 million (US$1,432 million), up 1.2% year on year.

Net sales (¥ Millions)
41,76516

38,90817
18

36,907

As for domestic sales, the demand for photosensitive materials

for the existing products was severe, which resulted in aand platemaking materials declined, therefore sales decreased.

decrease of sales.

In the overseas market, thanks to the alliance effect, orders

Consequently, the total net sales of the Imaging Businessfor photosensitive materials were stable, and inkjet paper

were ¥36,907 million (US$347 million), down 5.1% year on year.

expanded in emerging countries, however the decline in demand4Speciality Materials
Business

Net sales (¥ Millions)16

16,92817

16,95818

17,026

As for speciality materials, sales of non-woven fabric for waterlaminate base paper and tape base paper increased, sales oftreatment membrane support substrate and electrical discharge

inorganic fiber paper decreased, resulting in a decrease in sales.

machine processing filters as well as battery separators

Consequently, the total net sales of the Speciality Materials

increased.

Business were ¥17,026 million (US$160 million), up 0.4% year

As for functional paper, although sales of decorativeon year.

Net sales (¥ Millions)

Warehouse andTransportation Business

16

8,249

17

8,249

18

8,575
The total net sales of Warehouse and Transportation

Up until now Warehouse and Transportation business had been
included in “Others,” but from this term we will treat it as a

Business were ¥8,575 million (US$80 million), up 4.0% year on

separate reportable segment.

year.

Net sales (¥ Millions)16

Others

7,576

17

7,993

18

8,262

As the sales at engineering-related subsidiaries increased, thetotal net sales of this segment were ¥8,262 million (US$77
million), up 3.4% year on year.

5Topics
Contribution to SDGs through “FSC ® Forest-Certified Products”
United Nation’s Sustainable Development Goals (SDGs) which were entered into force in 2016 state 17 goals and
169 targets to be achieved by 2030, and the Japanese government has put implementation guidelines and started
implementing steps to achieve the goals. In Mitsubishi Paper Mills, in order to actualize sustainable papermaking,we produce paper that complies with FSC standards, and we have introduced how FSC forest-certified products
contribute to SDGs at various exhibitions, etc.

FSC® C021528

Introduction of Diamic Print Support CenterIn the print support center “b-side” managed by Osaka branch of Diamic Co., Ltd., they display garment printer thatcan print on clothes, silkscreen printer that can print on several types of materials, embroidering apparatus, andprinter for flasks in a show room exhibition.
Also, they manufacture T-shirts, tote bags, towels, flasks, etc. with original prints, while accepting even an orderfor only one product. Using this service, clients who are considering new commercial products determine its
business feasibility.

6

Business Development of Water Treatment Membrane
Support Substrate (product of Takasago Mill)The quantity of non-woven fabric for water treatment membrane support substrate which is produced by utilizing
our non-woven fabric manufacturing technology has increased considerably, for reverse osmosis (RO) membrane
support substrate to be utilized in seawater desalination and pure water manufacturing.
Today, support substrate for MBR flat membranes used in the membrane bioreactor (MBR) which is attracting
attention in fields related to wastewater treatment; and support substrate with enhanced chemical resistance byolefin fiber that can be used in cleaning of food products production line, etc. are widening the range of products
and producing excellent results.
Wastewater

Treated water

Separation membrane unit

Image: Membrane bioreactor (MBR)

7Seperation membrane element

Our Mills and Their Product Lines

SHIRAKAWA SITE

Address:

3, Maeyamanishi, Nishigo-mura,Nishi-Shirakawa-gun,
Fukushima 961-8054
Telephone: +81-248-22-8111
Products: Transformer board

KITAKAMI HITEC PAPER CORP.

HACHINOHE MILL

Address:

35, Sasanagane, Aisari-cho,
Kitakami-shi, Iwate 024-0051
Telephone: +81-197-67-3211
Products: Bleached kraft pulp,
Hygienic paper, Photographic
basepaper, etc.

Address:

Kawaragi-Aomoriyachi,
Hachinohe-shi,
Aomori 039-1197
Telephone: +81-178-29-2111
Products: Bleached kraft pulp,
Coated printing paper,
Uncoated printing paper,White card board, etc.

KJ SPECIALTY PAPER CO., LTD.
FUJI MILL
Address:

TAKASAGO MILL
Address:

105, Sakae-machi, Takasago-cho,Takasago-shi, Hyogo 676-8677
Telephone: +81-794-42-3101
Products: Carbonless paper, Thermal paper,
Inkjet paper, Specialty paper, Non
Woven Fablics, etc.

KYOTO MILL
Address:

6-6, Kaiden 1-chome,
Nagaokakyo-shi, Kyoto 617-8666
Telephone: +81-75-951-1181
Products: Color photographic paper, Graphic arts
materials, Inkjet photo paper, etc.

Overseas

7-1, Shinbashicho, Fuji-shi,
Shizuoka 417-0004
Telephone: +81-545-52-4075
Products: Base paper for decorative
laminates, Impregnateddecorative sheet,
Base paper for wall paper,
Stencil paper

Mitsubishi HiTec Paper Europe GmbH Flensburg Mill
Address: Husumer Strasse 12 D-24941
Flensburg, Germany
Telephone: +49-461-8695-204
Products: Thermal paper, etc.
(Flensburg, Germany)

Mitsubishi HiTec Paper Europe GmbH Bielefeld Mill
Address: Niedernholz 23, D-33699 Bielefeld,
Germany
Telephone: +49-521-2091-401
Products: Carbonless paper, Thermal paper,
Inkjet paper(Bielefeld, Germany)

MP Juarez LLC
Address: Ave. Valle del Cedro #1551 Paraq. Ind Intermex
C.P. 32690 Cd. Juarez. Chih., Mexico
Telephone: +1-915-534-8230 (U.S. Head Office)Products: Inkjet paper(Juarez, Mexico)Zhuhai MPM Filter, Ltd.
Address: #17 Yijing Lane, Pingsha Town, Jinwan District,Zhuhai, Guangdong, China
Telephone: +86-756-8895033
Products: Various filters(Zhuhai, China)8Six-Year Summary (Consolidated)Thousands of
U.S. dollars

Millions of yen
2018

For the years ended March 31¥ 201,492
Net sales
1,790
Operating income
3,198
Net income (loss) attributable to owners of parent
93.57
Net income (loss) per share (in yen and dollars)
As of March 31
Total assets
Total net assets¥ 237,426
61,077

2015

2014

2013

2018

¥216,340
3,872
2,217
64.85

¥214,944
1,038(4,272)(124.96)¥207,470
473
280
8.21

¥200,850
3,332
1,710
50.01

$1,896,579
16,85230,1050.88¥241,155
51,492¥253,482
55,094¥258,599
55,586¥265,234
55,370$2,234,808
574,900

2017

2016

¥201,955
4,313
1,152
33.72
¥235,869
56,631

Notes: On October 1, 2016, the share consolidation was executed at a ratio of 1share per 10 shares.
Net income (loss) per share is calculated based on the assumption that the share consolidation was executed at the beginning of the fiscal year ended March 31, 2013.

9

Mitsubishi Paper Mills Limited and Consolidated Subsidiaries

Consolidated Balance Sheets
As of March 31, 2018 and 2017
Thousands of
U.S. dollars (Note 2)

Millions of yen
2018

2017

2018

¥ 9,744¥10,840$91,719

46,3301,731

46,291
2,100

436,096
16,296

48,062(224)

48,391(216)

452,392(2,112)Inventories
Deferred tax assets (Note 15)
Other47,83743,9891,103
2,744

48,17541,4061,027
2,346

450,279
414,055
10,382
25,836

Total current assets

105,419

103,797992,275

Land
Buildings and structures
Machinery, equipment and vehicles
Construction in progress
Leased assets
Other

22,147
96,267366,704
2,310
2,847
9,794

22,06896,648360,409
676
2,643
9,583

208,464
906,130
3,451,657
21,74826,801
92,190Less: Accumulated depreciation
Accumulated impairment loss

500,070(399,589)(749)

492,029(387,374)(590)

4,706,993(3,761,193)(7,051)

99,732104,064

938,748

20,354
1,317
1,448
5,263
(68)
252
3,705

21,673
1,328
599
2,005
(99)
184
2,315

191,594
12,397
13,63349,547(645)
2,377
34,88032,27428,007

303,784¥ 237,426¥235,869$2,234,808

ASSETS

Current assets:

Cash and deposits (Note 3 (12))
Receivables:
Trade notes and accounts (Note 11)
Other
Less: Allowance for doubtful accounts

Non-current assets:
Property, plant and equipment (Note 4):

Net property, plant and equipment

Investments and other assets:
Investment securities (Notes 4, 11 and 12)
Investments in unconsolidated subsidiaries and affiliated companies
Long-term loans receivable
Net defined benefit asset (Note 14)
Less: Allowance for doubtful accounts
Deferred tax assets (Note 15)
Other
Total investments and other assets
Total assets
The accompanying notes are an integral part of these financial statements.

10Thousands of
U.S. dollars (Note 2)

Millions of yen
2018

2017

2018

¥ 51,195
19,6333,000
375¥50,828
17,435−346$481,883
184,800
28,237
3,533

26,870
3,238
7,358
397
5,140

24,573
2,648
7,135
399
4,007

252,925
30,47869,262
3,742
48,381

117,208

107,376

1,103,245

45,656
691
56
143
9,328
1,198
888
1,175

57,570
907
66
143
8,949
2,442
888
893

429,745
6,507
530
1,355
87,80911,285
8,361
11,06859,13971,862556,663¥ 176,348¥179,238$1,659,908¥ 32,756
6,132
12,965(148)¥ 32,756
7,438
8,599
(147)

$308,323
57,726122,040(1,399)51,706

48,647

486,690

5,204
1,511
1,309

5,506
1,245
(1,015)48,98814,225
12,329

8,025

5,736

75,544

1,345

2,247

12,665

Total net assets¥ 61,077¥56,631$574,900

Total liabilities and net assets¥ 237,426¥235,869$2,234,808

LIABILITIES AND NET ASSETS
Current liabilities:

Short-term loans payable (Note 11)
Current portion of long-term debt (Note 11)
Commercial Paper
Lease obligations (Note 11)
Payables:Trade notes and accounts (Note 11)
Other
Accrued expenses
Income taxes payable
Other
Total current liabilities

Non-current liabilities:
Long-term debt (Note 11)
Lease obligations (Note 11)
Provision for directors' retirement benefits
Reserve for loss on dissolution of employee's fundNet defined benefit liability (Note 14)
Deferred tax liabilities (Note 15)
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Contingent liabilities (Note 5)
NET ASSETS
Shareholders’ equity:
Capital stock
Authorized: 90,000,000 shares at March 31, 2018
Issued: 34,258,433 shares at March 31, 2018
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income:
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests

The accompanying notes are an integral part of these financial statements.

11Mitsubishi Paper Mills Limited and Consolidated Subsidiaries

Consolidated Statements of Operations
For the years ended March 31, 2018 and 2017
Thousands of
U.S. dollars (Note 2)

Millions of yen
2018

2017

2018

¥ 201,492
169,221¥201,955
166,817$1,896,579
1,592,825

32,27035,137

303,754

30,48030,824

286,901

1,790

4,313

16,852560(1,767)
175
59
846
1,144
(375)
−
(295)
(209)
(179)

485
(2,075)
149
(287)
207
(513)
(348)
(276)
−
(287)
217

5,273
(16,640)
1,649
558
7,969
10,776(3,535)−(2,776)(1,970)(1,686)(40)(2,727)

(380)

1,749

1,585

16,471

Income taxes:
Current
Deferred (Note 15)383(1,914)

341
(85)

3,614
(18,017)

Net income

3,280

1,329

30,87581¥ 3,198

176¥1,152

769$30,105

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Other income (expenses):
Interest and dividend income
Interest expenses
Royalty income
Foreign exchange gains (losses)
Gain on sales of investment securities
Gain (loss) on disposal of non-current assets (Note 6)
Special retirement expenses
Business restructuring cost (Note 7)
Environmental expenses (Note 8)
Impairment loss (Note 9)
Other, net
Total
Income before income taxes and non-controlling interests

Net income attributable to non-controlling interests
Net income attributable to owners of parent
The accompanying notes are an integral part of these financial statements.

12Mitsubishi Paper Mills Limited and Consolidated Subsidiaries

Consolidated Statements of Comprehensive Income
For the years ended March 31, 2018 and 2017
Thousands of
U.S. dollars (Note 2)

Millions of yen
2018

2017

2018

¥ 3,280¥1,329$30,875

(450)
301
2,386

2,813
(313)
1,821

(4,236)
2,837
22,465

(24)

(53)

(232)

Total other comprehensive income
Comprehensive income

2,213
5,493

4,268
5,597

20,83351,708Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

5,487
¥6

5,161
¥435

51,651$56

Net income
Other comprehensive income:
Valuation difference on available-for-sale securities
Foreign currency translation adjustments
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities
accounted for using equity method

YenAmounts per share:
Net income — basic (Note 3 (11))
Cash dividends applicable to the year

U.S. dollars (Note 2)

2018

2017

2018

¥ 93.57
5.00¥33.72
−

$0.88
0.05

The accompanying notes are an integral part of these financial statements.
On October 1, 2016, the share consolidation was executed at a ratio of 1share per 10 shares. Net income per share is calculated based on the assumption that the share consolidation was
executed at the beginning of the fiscal year ended March 31, 2017.

13

Mitsubishi Paper Mills Limited and Consolidated Subsidiaries

Consolidated Statements of Changes in Net Assets
For the years ended March 31, 2018 and 2017

Millions of yen

Shareholders’ equity

Capitalstock

CapitalsurplusRetainedearnings

Total
Treasury shareholders’equityshares342,584,332 ¥32,756¥7,456¥7,447¥(145) ¥47,514¥3,014

Number ofshares in
issue

Balance at April 1, 2016
Changes during the year:
Deficit disposition
Net income attributable to owners of parent
Acquisition of treasury stock
Disposal of treasury stock(17)

Changes in items other than shareholders’ equity
Total changes during the year

Balance at March 31, 2018

(1)

1,132

2,492
2,492

(332)
(332)

1,849
1,849

4,009
4,009

¥5,506¥1,245 ¥ (1,015)¥5,73634,258,433 ¥32,756¥7,438¥8,599¥ (147) ¥48,647(1,167)

1,167
3,198

−
3,198
(1)
−

(1)

(138)
−
34,258,433 ¥ 32,756(1,305)¥1,727¥2,250 ¥51,492
−
1,152
(2)
0
−
(17)

(17)

1,152

Changes in items other than shareholders’ equity
Total changes during the year¥(2,864)

(2)
0

(17)

Change in treasury shares of parent arisingfrom transactions with non-controlling shareholders¥1,577

Total
accumulated
otherRemeasurements
comprehensive Non-controlling Total netof definedincomeassetsinterests
benefit plans(0)−

Changes during the year:
Deficit disposition
Net income attributable to owners of parent
Acquisition of treasury stock
Disposal of treasury stock

Foreigncurrencytranslation
adjustment

−
1,152
(2)
0

1,152

Change in treasury shares of parent arisingfrom transactions with non-controlling shareholders

Balance at March 31, 2017

Total accumulated other comprehensive income

Valuationdifference
on availablefor-salesecurities

(3)
(3)

¥2,247 ¥56,631
−
3,198
(1)
−

(138)

¥ 6,132 ¥ 12,965

(138)

3,058

(302)
(302)

265
265

2,325
2,325

2,289
2,289

¥ (148) ¥ 51,706¥ 5,204¥ 1,511¥ 1,309¥ 8,025

4,365

(1)

4,006
5,138

(901)
(901)

1,387
4,446

¥ 1,345 ¥ 61,077

Thousands of U.S. dollars
Shareholders’ equity

Capitalstock

CapitalsurplusRetainedearnings

TreasurysharesTotalshareholders’equity34,258,433 $308,323$70,014$80,947$(1,388) $457,897$51,833(10,987)

10,98730,105−30,105(11)−−
30,105(11)−(1,300)(1,300)

Number ofshares in
issue

Balance at April 1, 2017
Changes during the year:
Deficit disposition
Net income attributable to owners of parent
Acquisition of treasury stock
Disposal of treasury stock
Change in treasury shares of parent arisingfrom transactions with non-controlling shareholders
Changes in items other than shareholders’ equity
Total changes during the year
Balance at March 31, 2018

Total accumulated other comprehensive income

Valuationdifference
on available-for-salesecurities(11)(1,300)−34,258,433 $308,323(12,288)

41,092$57,726 $122,040

The accompanying notes are an integral part of these financial statements.

14

Total
Foreignaccumulated
currency Remeasurements
otherof defined comprehensive Non-controlling Total net
translation
adjustment benefit plansinterests
assetsincome$11,723

28,792(2,845)(2,845)

2,502
2,502

$(1,399) $486,690$48,988$14,225(11)$(9,559) $53,997 $21,154 $533,049

21,88921,88921,546
21,546(8,488)(8,488)13,05741,850$12,329 $75,544 $12,665 $574,900

Mitsubishi Paper Mills Limited and Consolidated Subsidiaries

Consolidated Statements of Cash Flows
For the years ended March 31, 2018 and 2017

Thousands of
U.S. dollars (Note 2)

Millions of yen

I Cash flows from operating activities:
Income before income taxes and non-controlling interests
Depreciation
Impairment loss (Note 9)
Decrease (increase) in net defined benefit asset (Note 14)
Increase (decrease) in net defined benefit liability (Note 14)
Increase (decrease) in provision for directors' retirement benefits
Interest and dividend income
Interest expense
Loss (gain) on sales of short-term and long-term investment securities
Loss (gain) on disposal of non-current assets (Note 6)
Business restructuring cost (Note 7)
Decrease (increase) in trade notes and accounts receivable
Decrease (increase) in inventories
Increase (decrease) in trade notes and accounts payable
Other, net
Sub-total

2018

2017

2018

¥ 1,749
10,474
209
(149)
312
(9)
(560)
1,767
(846)
(1,144)−(29)(1,935)
2,041
2,710

¥1,585
10,454
287
2
(120)
17
(485)
2,075
(207)
513
276
2,182
3,432
1,547
592

$16,471
98,5901,970(1,408)2,943(93)(5,273)
16,640(7,969)(10,776)−(280)(18,221)
19,22025,513(144)
489(2,155)(506)(1,237)
5,327(16,677)(4,163)

14,58922,155

137,325

12,80919,839120,573(7,822)
1,872
(25)
1,136
(0)
(902)
23
(276)

(6,120)
50
(142)
269
(355)
(570)
53
(256)

(73,628)
17,623(240)
10,694(0)(8,492)222(2,606)(5,994)(7,070)(56,428)

1
3,000
7,740
(17,441)
(362)
48
(1)
−
(237)

(2,112)−
17,899(28,090)
(348)
−
(2)
0
(188)

11
28,23772,853(164,166)(3,413)451(11)−(2,233)

(854)

(269)

(8,041)

Net cash provided by (used in) financing activities(8,107)(13,112)(76,312)IV Effect of exchange rate change on cash and cash equivalents
V Net increase (decrease) in cash and cash equivalents
VI Cash and cash equivalents at beginning of period

196(1,096)
10,840(196)(540)
11,381

1,845(10,321)102,041¥ 9,744¥10,840$91,719

Payments for business restructuring cost (Note 7)
Interest and dividend income received
Interest expenses paid
Income taxes paid

Net cash provided by (used in) operating activities
II Cash flows from investing activities:
Purchase of property, plant and equipment and intangible assets
Proceeds from sales of property, plant and equipment and intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of shares of subsidiaries and associates
Payments of loans receivableCollection of loans receivable
Other, net
Net cash provided by (used in) investing activities
III Cash flows from financing activities:
Net increase (decrease) in short-term loans payable
Net increase (decrease) in commercial paper
Proceeds from long-term debt
Repayments of long-term debt
Repayments of lease obligations
Proceeds from share issuance to non-controlling shareholders
Purchase of treasury shares
Proceeds from sales of treasury shares
Dividends paid to non-controlling shareholders
Payments from changes in ownership interests in subsidiaries
that do not result in change in scope of consolidation

VII Cash and cash equivalents at end of period (Note 3 (12))
The accompanying notes are an integral part of these financial statements.

15

(131)
566
(1,771)(442)

Mitsubishi Paper Mills Limited and Consolidated Subsidiaries

Notes to Consolidated Financial Statements
1. Basis of Presenting the Consolidated Financial Statements
The accompanying consolidated financial statements of Mitsubishi Paper Mills Limited (the “Company”) and its subsidiaries areprepared on the basis of accounting principles generally accepted in Japan, which are different in certain respects as to applicationand disclosure requirements of International Financial Reporting Standards, and are compiled from the consolidated financial
statements prepared by the Company as required by the Financial Instruments and Exchange Law of Japan.
Certain items presented in the consolidated financial statements submitted to the Director of Kanto Finance Bureau (a regional
branch organization of the Ministry of Finance in Japan) have been reclassified for the convenience of readers outside Japan.

2. United States Dollar Amounts
The Company maintains its accounting records in yen. The dollar amounts included in the accompanying consolidated financial
statements and notes thereto represent the arithmetical results of translating yen to dollars on the basis of ¥106.24 = U.S.$1, theexchange rate prevailing as of March 31, 2018. The inclusion of such U.S. dollar amounts is solely for convenience and is notintended to imply that yen amounts have been or could be readily converted, realized or settled in U.S. dollars at that rate or any
other rate.

3. Summary of Significant Accounting Policies(1) Scope of consolidation

The Company had 33 subsidiaries as of March 31, 2018 (34 as of March 31, 2017). The accompanying consolidated financial
statements include the accounts of the Company and 26 (26 for 2017) of its subsidiaries for the year ended March 31, 2018
(together, hereinafter referred to as the “Companies”). Furthermore, MPM Oji Home Products Co., Ltd., which was newly
established in this consolidated fiscal year, is included within the scope of the consolidation. In addition, Mitsubishi Paper Holding(Europe) GmbH conducted an absorption-type merger with Mitsubishi Paper GmbH, which was a consolidated company until theprevious consolidated fiscal year.
The accounts of the remaining 7 (8 for 2017) unconsolidated subsidiaries for the year ended March 31, 2018 have been
excluded from consolidation since the aggregate amounts of these subsidiaries in terms of combined assets, net sales, retained
earnings and net income were immaterial in relation to those of the consolidated financial statements of the Companies.
The fiscal year end of Mitsubishi Paper Holding (Europe) GmbH and other 5 (6 for 2017) consolidated subsidiaries is December 31. For the purpose of preparing the consolidated financial statements, we used their financial statements as of their respective
fiscal year end. We made adjustments for the purpose of consolidation as necessary for the material transactions that occurred
between such fiscal year-end dates and the consolidated account closing date.

(2) Consolidation and elimination

For the purposes of preparing the accompanying consolidated financial statements, all significant intercompany transactions,account balances and unrealized profits among the Companies have been eliminated.
Elimination of investments in shares of consolidated subsidiaries, together with the underlying equity in net assets of such
subsidiaries, has been made to include equity in net income of subsidiaries subsequent to the respective dates of acquisition in the
consolidated statements of income. Any difference between the cost of an investment in a subsidiary and the amount of underlying
equity in net assets of the subsidiary, unless specifically identified and reclassified to the applicable accounts from which the value
originates, is treated as goodwill or negative goodwill. Goodwill and negative goodwill (only incurred before March 31, 2010) areamortized over five years on a straight line basis.
Assets and liabilities of subsidiaries are remeasured based on their fair value at the date of acquisition of control of thesubsidiaries.

(3) Investments in unconsolidated subsidiaries and affiliates

The Company had 10 affiliates as of March 31, 2018 (10 for 2017). 3 affiliated companies were accounted for by the equity method.
However, the remaining 7 (8 for 2017) subsidiaries and 7 (7 for 2017) affiliates did not have a material effect on net income andretained earnings in the accompanying consolidated financial statements and, therefore, these investments have been carried atcost.

(4) Financial instruments(i) Derivatives

All derivatives are stated at fair value, with changes in fair value included in net income or loss for the year in which they arise,
except for those that are designated as “hedging instruments.”

16

(ii) Securities
Securities other than equity securities issued by subsidiaries and affiliates are classified into three categories: trading,held-to-maturity or other securities. Marketable securities classified as other securities are carried at fair value with changes in
unrealized holding gain or loss, net of the applicable income taxes, included directly in net assets. Non-marketable securities
classified as other securities are carried at cost. Cost of securities sold is determined by the moving average method.
(iii) Hedge Accounting
Unrealized gains or losses arising from changes in fair value of derivative financial instruments designated as “hedging
instruments” are carried as an asset or a liability until the losses or gains on the hedged items or transactions are recognized.
In accordance with the exceptional measure under the Japanese Accounting Standard for Foreign Currency Translations, theCompanies do not record certain forward exchange contracts at market value but translate the underlying foreign currency
denominated assets or liabilities using the contractual rate under these contracts as long as such contracts meet the criteria for
applying hedge accounting under the Japanese Accounting Standard for Financial Instruments.
Furthermore, in accordance with the special measure under the Accounting Standard for Financial Instruments, the Companies do not record certain interest rate swap arrangements at market value but charge or credit net cash flows arising from theswap arrangements to interest arising from the hedged borrowings, as long as these arrangements meet the specific criteria under
the standard.
(5) Inventories

Finished products, merchandise and work in process are primarily stated at lower of cost or market, cost being determined by theweighted average method and other inventories are stated at lower of cost or market, cost being determined by the moving
average method.

(6) Property, plant and equipment

Depreciation of buildings (excluding for leased assets) is computed by the straight-line method. Depreciation of other property,
plant and equipment (excluding for leased assets) is mainly computed by the straight-line method, but in part, thedeclining-balance method is used at the head office of the Company and certain consolidated subsidiaries. However, depreciationof structures acquired after April 1, 2016 is computed by the straight-line method.
Estimated useful lives of assets used in computing depreciation are as follows:
Buildings and structures...................... 31 to 47 years
Machinery and equipment............................ 12 years
Leased assets under finance lease agreements of the Company and its domestic consolidated subsidiaries, which do not
stipulate the transfer ownership of the leased assets to the lessee, are depreciated principally over the lease term by thestraight-line method with no residual value except for the following transactions.

(7) Allowance for doubtful accounts

The Company and the domestic consolidated subsidiaries provide the allowance for doubtful accounts based on the bad debt loss
ratio derived from their own loss history plus the amount of uncollectible receivables estimated on an individual basis.
Overseas consolidated subsidiaries provide the allowance for doubtful accounts based on methods prescribed by theirrespective countries’ regulations.

(8) Accounting method for retirement benefits(i) Method of attributing the projected benefits to periods of service
As for the calculation of retirement benefit obligation, the benefit formula basis is used for including estimated retirement benefits ina period till the end of this consolidated fiscal year. Some consolidated subsidiaries adopt the simplified method for calculating theliabilities and costs for retirement benefits, while defining the term-end privately necessary payment for retirement benefits asretirement benefit obligation for the lump-sum severance pay plan, and defining the actuarial obligation in the latest pension financecalculation as retirement benefit obligation for the corporate pension plan.
(ii) Amortization of unrecognized prior service cost
Unrecognized prior service cost is amortized on a straight-line basis over a term that does not exceed the average remaining
service period of the employees who are expected to receive benefits under the plans (9 to 15 years).
(iii) Amortization of unrecognized net actuarial gain or loss
Unrecognized net actuarial gains or losses are amortized from the year following the year in which such gains or losses arerecognized on a straight-line basis over a term that does not exceed the average remaining service period of the employees whoare expected to receive benefits under the plans (9 to 15 years).

(9) Reserve for loss on dissolution of employee pension fund

The Company and certain domestic consolidated subsidiaries reserve for loss on dissolution of employee pension fund.

17

(10) Translation of foreign currency financial statements (accounts of overseas subsidiaries and affiliates)

The financial statements of overseas consolidated subsidiaries are translated into Japanese yen at the exchange rates prevailing at
the respective balance sheet dates of those subsidiaries for assets and liabilities, and at the historical exchange rate for capital
accounts and retained earnings. All income and expense accounts are translated at the average rates of exchange during the fiscal
year of those subsidiaries. The resulting translation adjustments are included in net assets.

(11) Net income or loss per share

Net income or loss per share is based on the weighted average-number of common shares outstanding less the number of treasury
stock during each year, appropriately adjusted for subsequent free distributions of common shares.

(12) Cash and cash equivalents

Cash and cash equivalents in the consolidated statements of cash flows are composed of cash on hand, bank deposits that are able
to be withdrawn on demand and short-term investments with original maturities of three months or less that are exposed to a minor
risk of fluctuation in value.
A reconciliation of cash and cash equivalents in the accompanying consolidated statements of cash flows and cash and bankdeposits in the accompanying consolidated balance sheets at March 31, 2018 and 2017 is shown below:
Thousands of
U.S. dollars

Millions of yen

Cash and bank deposits
Cash and cash equivalents

2018

2017

2018

¥ 9,744¥ 9,744¥10,840¥10,840$91,719$91,719(13) Dividends
The Companies Act of Japan (the “Law”) provides that an amount equal to 10% of the amount to be distributed as distributions ofcapital surplus (other than the capital reserve) and retained earnings (other than the legal reserve) be transferred to the capitalreserve and the legal reserve, respectively, until the sum of the capital reserve and the legal reserve equals 25% of the common
stock amount. Such distributions can be made at any time by resolution of the shareholders, or by the Board of Directors if certain
conditions are met, however neither the capital reserve nor the legal reserve is available for distributions.
(14) Changes in accounting estimates
With regard to the number of years for posting actuarial difference and past service costs, the average remaining years of serviceof an employee has shortened, therefore from this consolidated fiscal year, the number of years for certain consolidated
subsidiaries has been changed from 10 to 9. This change resulted in a ¥47 million ($446 thousand) decrease in operating income
and income before income taxes and non-controlling interests for this consolidated fiscal year.
(15) Reclassification
Certain reclassification have been made to the prior year’s consolidated financial statements to conform to the presentation for theyear ended March 31, 2018.

18

4. Assets Pledged as Collateral
Assets pledged as collateral primarily for short-term loans, long-term debt and debentures at March 31, 2018 and 2017 were as
follows:

Thousands of
U.S. dollars

Millions of yen

Buildings and structures
Machinery and equipment
Land
Investment securities
Other

2018

2017

2018

¥ 14,993
23,24910,4974,676
54¥16,061
27,784
10,4974,820
74$141,128
218,839
98,80544,018512¥ 53,471¥59,237$503,304

5. Contingent Liabilities
As of March 31, 2018 the Companies were contingently liable for guarantees of loans, primarily of their employees and unconsolidated subsidiaries and affiliates, in the aggregate amount of ¥488 million ($4,597 thousand), and also liable for a recourse
obligation of credit securitization in the aggregate amount of ¥634 million ($5,971 thousand).

6. Disposal of Property, Plant and Equipment(1) Gains on disposal of property, plant and equipment

Main items under gains on disposal of property, plant and equipment were as follows:

Thousands of
U.S. dollars

Millions of yen
2018¥ 1,049
482
13

Land
Buildings and structures
Machinery and equipment

2017

2018

¥4
–
13

$9,8784,543
125(2) Losses on disposal of property, plant and equipment

Main items under gains on disposal of property, plant and equipment were as follows:

Thousands of
U.S. dollars

Millions of yen

Scrapping and removal expenses
Machinery and equipment
Land
Buildings and structures

2018

2017

2018

¥ 214
81
74
19

¥342
105
7
55

$2,023770
696
178

7. Business Restructuring Cost
Previous consolidated fiscal year (April 1, 2016 – March 31, 2017)
Survey and examination cost, and restructuring cost of a consolidated subsidiary

8. Environmental Expenses
Consolidated fiscal year under review (April 1, 2017 – March 31, 2018)
Expenses associated with the disposal of PCB (polychlorinated biphenyl) waste

199. Impairment Loss
Consolidated fiscal year under review (April 1, 2017 – March 31, 2018)

Application
Idle assets
Idle assets
Rental property
Idle assets

Millions of yen

Location

Category

Ibaraki
Aomori
Osaka
Fukushima, etc.

Buildings, etc
Buildings
Land
Machinery and equipment, etc.

Thousands of
U.S. dollars

Impairment loss
¥ 132
40
26
8

$1,249383
253
82

Our group’s main business assets are the factories that are used as production bases. Idle assets are grouped per individual unit.
The book values of assets to be disposed of and idle assets are reduced to recoverable values. Such loss is reported as an
impairment loss under extraordinary losses. Furthermore, the recoverable value is measured with the net sale value. Land isevaluated based on the values by real estate appraisers, and other assets are reduced their book value to the residual value.

Previous consolidated fiscal year (April 1, 2016 – March 31, 2017)

Application
Idle assets
Idle assets
Idle assets

Location
Aomori
Fukushima
Fukushima

Millions of yen

Category

Impairment lossLandLand, etc.
Machinery and equipment

¥212
52
21

Our group’s main business assets are the factories that are used as production bases. Idle assets are grouped per individual unit.
The book values of assets to be disposed of and idle assets are reduced to recoverable values. Such loss is reported as an
impairment loss under extraordinary losses. Furthermore, the recoverable value is measured with the net sale value. Land isevaluated based on the values by real estate appraisers, and other assets are reduced their book value to the residual value.

10. Other Comprehensive Income
The following table shows reclassification adjustment for each component of other comprehensive income for the year ended
Thousands ofMarch 31, 2018:
Millions of yen
U.S. dollars

Net unrealized gain (loss) on available-for-sale securities
Amount arising during the year
Reclassification adjustments for gain and losses included in net income
Amount before tax effectTax effectTotal
Foreign currency translation adjustment
Amount arising during the year
Remeasurements of defined benefit plans
Amount arising during the year
Reclassification adjustments for gains and losses included in net income
Amount before tax effectTax effect
Total
Share of other comprehensive income of affiliates accounted for by the equity method
Amount arising during the year
Total other comprehensive income

20

2018

2017

2018

¥ (199)(779)¥4,279(233)$(1,879)(7,337)(979)
529¥ (450)

4,045(1,232)¥2,813(9,217)
4,980$(4,236)¥ 301¥(313)$2,837¥ 3,828(369)¥2,634(812)$36,039(3,475)

3,459(1,072)¥ 2,386

1,821–¥1,821

32,563(10,098)$22,465

(24)

(53)

(232)

¥ 2,213¥4,268$20,833

11. Financial Instruments(1) Summary of financial instruments(i) Policy regarding financial instruments
To carry out its capital expenditure plans to develop its paper, pulp, photosensitive material products and other manufacturing
activities, the Group raises the funds it needs principally through bank loans and issuance of corporate bonds. Temporary
surpluses are managed as short-term deposits, and temporary working capital is procured through bank loans and issuance ofcommercial paper. The Company has a policy of not entering into any speculative derivative transactions and only enters into
derivative transactions to avoid exposure to interest-rate risk on loans.
(ii) Details of financial instruments and related risk and management of risk
Trade notes and accounts receivable are exposed to the credit risk of customers. In accordance with the internal policy for credit
risk management regulations, the Group manages both the due dates and balance of such transactions by customer, and has
systems to accurately assess the credit status of its major customers at any time.
Receivables in foreign currencies originating overseas businesses are exposed to foreign exchange-rate risk. The majority ofthese risks are diminished through the use of a balance of accounts payable denominated in foreign currencies.
Investment securities are exposed to risks of changes in market prices. However, market prices of the shares held for
operational purposes are periodically reviewed.
Trade notes and accounts payable are obligations due within one year.
Short-term borrowings are raised mainly in connection with business activities, while long-term debt, corporate bonds andlease obligations related to finance lease transactions are the main means for procurement of funds needed for capital expenditures. In most cases, the repayment date is within five years from the balance sheet date. For some long-term debt with floatinginterest rates exposed to interest-rate fluctuation risk, the Company uses derivative transactions (interest-rate swaps) for hedging
purposes.
For derivative transactions, the Company uses forward exchange contracts to hedge against exchange-rate risk affecting
trade notes and accounts receivable and payable denominated in foreign currencies, and interest rate swap transactions to hedge
interest rate fluctuation risks on loans. We do not assess the effectiveness of our hedging strategies, since all derivative transactions meet the conditions for special accounting treatment for interest rate swaps. For carrying out and managing derivativetransactions, the Company adheres closely to internal policies delimiting the authority for engaging in such transactions. To reduce
credit risk in using derivatives, the Company works only with the financial institutions with good credit-ratings.
The Company is exposed to liquidity risk in its payables and borrowings. Risk-management methods including compilation ofa monthly cash flow plan are used to mitigate the risks by each Group company.
(iii) Additional notes on the fair value of financial instruments, etc.
Calculations of the fair value of financial instruments are based on their quoted market prices, as well as their reasonably estimatedfair value when the quoted market prices are not available. Since various assumptions and factors are reflected in estimating thefair value, different assumptions and factors could result in different fair value. In addition, the contract values of derivatives in Note
13. Derivatives are not necessarily indicative of the actual market risk involved in derivative transactions.

(2) Fair value of financial instruments

Book value, fair values and differences between them as of March 31, 2018 are as follows. The following table does not include
financial instruments for which the fair value is extremely difficult to determine (please refer to note below).

21

Millions of yen
2018

Trade notes and accounts receivable
Investment securities
Available-for-sale securities
Total of assets

Trade notes and accounts payable
Short-term loans payable (excluding current portion of long-term debt)
Long-term debt (including current portion of long-term debt)
Total of liabilities
Derivative transactions

Book value

Fair value

Difference¥ 46,330¥ 46,330¥−

19,69066,02019,69066,020−−26,81851,19565,289143,302¥−

26,81851,195
66,149144,163

¥−

−
−
860
860

¥−

Thousands of U.S. dollars
2018

Trade notes and accounts receivable
Investment securities
Available-for-sale securities
Total of assets
Trade notes and accounts payable
Short-term loans payable (excluding current portion of long-term debt)
Long-term debt (including current portion of long-term debt)
Total of liabilities
Derivative transactions

Book value

Fair value$436,096$436,096$−

185,335
621,432
252,428
481,883
614,546
1,348,857

185,335
621,432
252,428
481,883
622,644
1,356,956

−
−
−
−
8,098
8,098

$−

$−

Difference$−

Millions of yen
2017

Trade notes and accounts receivable
Investment securities
Available-for-sale securities
Total of assets
Trade notes and accounts payable
Short-term loans payable (excluding current portion of long-term debt)
Long-term debt (including current portion of long-term debt)
Total of liabilities
Derivative transactions

Book value

Fair value

Difference¥46,291¥46,291¥−

21,002
67,29324,55650,82875,006150,391¥−

21,002
67,29324,55650,82875,375
150,760
¥−

−
−
−
−
369
369
¥−

(i) Trade notes and accounts receivable
Because these are settled in a short period of time, fair value approximates book value. Accordingly, fair value is recognized asbook value.
(ii) Investment securities
Fair value of investment securities is based on quoted share prices at stock exchanges, and bond prices are based on indicative
published prices in the papermaking sector.
(iii) Trade notes and accounts payable
Because these are settled in a short period of time, fair value approximates book value. Accordingly, fair value is recognized asbook value.
(iv) Short-term loans payable
Because these are settled in a short period of time, fair value approximates book value. Accordingly, fair value is recognized asbook value.

22

(v) Long-term debt
The fair value of long-term debt is calculated by discounting the total principal and interest using the assumed interest rate given
equivalent new borrowings.
For long-term debt with floating interest rates, loans are subject to special settlement for interest swaps. The fair value is calculatedby discounting the total principal and interest (including interest-rate swap) using the interest rate reasonably estimated given
equivalent new borrowings. The amount also includes the total current portion of long-term debt of ¥19,633 million ($184,800
thousand).
(vi) Derivatives
Please see Note 13.
Unlisted equity securities (in the amount of ¥1,981 million ($18,655 thousand) on the consolidated balance sheet) are not included
in available-for-sale securities, due to the difficulty of measuring their fair value as the stock has no quoted share price and future
cash flow cannot be predicted.

Thousands of
U.S. dollars

Millions of yen

Unlisted equity securities

2018

2017

2018

¥ 1,981¥1,999$18,655

Planned repayment of debentures, long-term debt, lease obligations and other interest-bearing liabilities after the balance sheet
date (consolidated basis)
Millions of yen
2018

Short-term loans payable
Long-term debt
Lease obligations
Total

Due within
1 year

1-2 years

2-3 years

3-4 years

4-5 years

Over 5 years¥ 51,195
19,633375¥−
15,575354¥−
13,60092¥−
10,155
73

¥−
5,238
59

¥−
1,086
111

¥ 71,203¥ 15,930¥ 13,692¥ 10,228¥ 5,298¥ 1,198

Thousands of U.S. dollars
2018

Short-term loans payable
Long-term debt
Lease obligations
Total

Due within
1 year

1-2 years

2-3 years

3-4 years

4-5 years

Over 5 years$481,883
184,800
3,533$−
146,606
3,340$−
128,013868$−
95,587689$−
49,311
558$−
10,2271,050$670,217$149,946$128,881$96,276$49,869$11,278

Millions of yen
2017

Short-term loans payable
Long-term debt
Lease obligations

Total

Due within
1 year

1-2 years

2-3 years

3-4 years

4-5 years

Over 5 years¥50,828
17,435346¥−
19,654332¥−
15,145309¥−
12,700
68

¥−
9,255
49

¥−
815
147

¥68,611

23¥19,986¥15,455¥12,768¥9,304¥963

12. Investment Securities
The acquisition cost, carrying amount, gross unrealized holding gains and gross unrealized holding losses for securities with fairvalue by security type at March 31, 2018 and 2017 are summarized as follows:
Available-for-sale securities:
Millions of yen
2018

Acquisition

Carrying amountGross unrealized
holding gains

Gross unrealized
holding losses¥ 12,020¥ 19,690¥ 8,053¥ 384¥ 12,020

Equity securities¥ 19,690¥ 8,053¥ 384

Thousands of U.S. dollars
2018

Acquisition

Carrying amountGross unrealized
holding gains

Gross unrealized
holding losses$113,147$185,335$75,809$3,620$113,147

Equity securities$185,335$75,809$3,620Millions of yen
2017

Equity securities

Acquisition

Carrying amountGross unrealized
holding gains¥12,354¥21,002¥8,866¥12,354¥21,002¥8,866Gross unrealized
holding losses

¥218

¥218

13. Derivatives(1) Transactions not subject to hedge accounting
No applicable transactions(2) Transactions subject to hedge accounting(i) Currency-related

No applicable transactions(ii) Interest-rate related
Hedge accounting

Type of derivative

methodtransaction, etc.

Main targets of hedging

Contract value

Contract value of instruments due within morethan a year

Special settlement ofInterest rate swap trans-interest rate swap

actions, fixed payments,

Long-term debt

variable receivables¥21,410 million¥12,210 million$201,524 thousand$114,928 thousand

Transactions subject to special settlement for interest rate swaps are settled as a combined sum with the long-term debt being
hedged so the fair value is included in the fair value of the long-term debt.

24

14. Retirement and Pension Plans(1) Outline of retirement benefit plan
The Company and consolidated subsidiaries adopt reserve-type and non-reserve-type defined benefit and defined contributionplans for the retirement benefits of our employees.
In the defined benefit pension plan (reserve-type), employees will receive lump-sum payments or pensions, which arecalculated based on their salaries and employment periods.
In the lump-sum retirement benefit plan (non-reserve-type), employees will receive lump-sum retirement benefits, which arecalculated based on their salaries and employment periods. The Company and some consolidated subsidiaries establish
retirement benefit trusts for the lump-sum retirement benefit plan to make it reserve-type.
In addition, additional retirement benefits may be paid, at the time of the retirement, etc. of our employees.
In the defined benefit pension and lump-sum retirement benefit plans adopted by some consolidated companies, thesimplified method is used for calculating the liabilities and costs for retirement benefits.
As for defined contribution plans, the Company and some consolidated subsidiaries establish the defined contribution
pension plan, while the other consolidated subsidiaries subscribe to Smaller Enterprise Retirement Allowance Mutual Aid System.
(2) Defined benefit plans(i) The schedule of the defined benefit obligation at 2018 and 2017, were as follows:

Thousands of
U.S. dollars

Millions of yen

Balance at the beginning of the year
Current service cost
Interest cost
Actuarial gain and loss
Retirement benefit paid
Other
Balance at the end of the year

2018

2017

2018

¥ 22,467
1,083
113
(264)
(1,076)557¥22,164
1,101
131
595
(1,163)(362)¥ 22,882$211,482
10,202
1,069(2,491)(10,128)
5,250¥22,467(ii) The schedule of the pension assets at 2018 and 2017 were as follows:

Thousands of
U.S. dollars

Millions of yen

Balance at the beginning of the year
Expected return on pension assets
Actuarial gain and loss
Contributions by the employer
Retirement benefit paid
Balance at the end of the year

2018

2017

2018

¥ 16,174
14
3,703
53
(429)

¥13,586
13
3,142
56
(623)

$152,240131
34,863505(4,040)¥ 19,516¥16,174(iii) The schedule of the net defined benefit liability for simplified method at 2018 and 2017 were as follows:
Millions of yen

Balance at the beginning of the year
Periodic benefit cost
Retirement benefit paid
Contribution to systems
Balance at the end of the year

$183,701

Thousands of
U.S. dollars

2018

2017

2018

¥ 649
92
(26)
(16)

¥579
122
(34)
(17)

$6,115
872
(250)
(159)

¥ 698

25

$215,386¥649$6,577

(iv) The reconciliation of the defined benefit obligations and pension assets to the liabilities and assets on retirement benefits
recognized in the consolidated balance sheet as of 2018 and 2017 were as follows:

Thousands of
U.S. dollars

Millions of yen

Funded defined benefit obligations
Pension assets

2018

2017

2018

¥ 15,145(19,872)¥15,123(16,520)$142,556(187,054)

4,065

6,943

38,262(4,727)
8,792

Unfunded defined benefit obligations

Net amount of liabilities and assets recognizedin consolidated balance sheet
Retirement benefit liabilities
Retirement benefit asset

Net amount of liabilities and assets recognizedin consolidated balance sheet(1,397)8,340(44,498)
82,761

9,328(5,263)8,949(2,005)87,809(49,547)¥ 4,065¥6,943$38,262(v) The profits and losses related to retirement benefits for fiscal period ended March 31, 2018 and 2017 were as follows:
Thousands of
U.S. dollars

Millions of yen
2018

2017

2018

Current service cost
Interest cost
Expected return on pension assets
Actuarial gain and loss recognized in the year
Prior service cost recognized in the year
Periodic benefit cost in simplified method¥ 1,083
113
(14)
(334)
(34)
92

¥1,101
131
(13)
(716)
(95)
122

Periodic benefit costs of retirement benefit plan

$10,202
1,069(131)(3,149)
(326)
872

¥ 906

¥529

$8,537

In addition to the above, the premium severance payment has been reported as extraordinary losses of ¥375 million ($3,535 thousand), and ¥348 million
for the consolidated fiscal year ended March 31, 2018 and 2017, respectively. In addition, in preperation for the loss of the planned dissolution of theemployees’ pension fund that some of our consolidated subsidiaries are members of, the Company has recorded extraordinary losses of ¥22 million forthe consolidated fiscal year ended March 31, 2017.

(vi) The breakdown of items in other comprehensive income for fiscal period ended March 31, 2018 and 2017 were as follows:
Thousands of
U.S. dollars

Millions of yen
2018

2017

2018

Actuarial gain and loss
Prior service cost

¥ 3,494(34)¥1,917(95)$32,889
(326)

Total

¥ 3,459¥1,821$32,563(vii) The breakdown of items in accumulated other comprehensive income for fiscal period ended March 31, 2018 and 2017 were as
follows:

Thousands of
U.S. dollars

Millions of yen
2018

2017

2018

Unrecognized actuarial gain and loss
Unrecognized prior service cost

¥ 2,034
63¥(1,459)
97$19,151595

Total¥ 2,097¥(1,361)$19,747

26

(viii) The breakdown of pension assets by major category as of March 31, 2018 and 2017 were as follows:
2018

Equities
Bonds
General account of life insurance
Other

2017

38%
37%
23%
2%

38%
37%
22%
3%

100%

100%

(ix) The items of actuarial assumptions as of fiscal period ended March 31, 2018 and 2017 were as follows:

Discount rate
Expected long-term return on plan assets

2018

2017

0.0〜2.0%
0.0〜2.0%

0.0〜1.8%
0.0〜2.0%(3) Defined contribution plan
The necessary contribution to the defined contribution plan of our company and consolidated subsidiaries is ¥359 million($3,381 thousand) and ¥360 million for the consolidated fiscal year ended March 31, 2018 and 2017, respectively.
(4) Multi-employer pension plan
As for the multi-employer pension plan (comprehensive employees' pension system) used by some consolidated subsidiaries,
its importance is not significant, and so its notes are omitted.

27

15. Deferred Income Taxes(1) At March 31, 2018 and 2017, significant components of deferred tax assets and liabilities were as follows:
Millions of yen

Deferred tax assets:
Accrued enterprise taxes
Accrued expenses
Net defined benefit liability
Allowance for doubtful accounts
Accumulated impairment loss of fixed assets
Unrealized gains on property, plant and equipment
Net operating loss carry forward
Other
Gross deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Gain on securities contributed to retirement benefit trust
Return of securities contributed to retirement benefit trust
Reserve based on Special Taxation Measures Law
Unrealized gains on available-for-sale securities
Other

Total deferred tax liabilities

Net deferred tax assets (liabilities)

Thousands of
U.S. dollars

2018

2017

2018

¥ 77
587
2,378
75
357
175
6,231
7,713

¥95
595
3,347
83
338
170
6,386
8,106

$727
5,529
22,389
707
3,362
1,654
58,652
72,603

17,596(13,585)

19,122(15,969)

165,628(127,872)

4,011

3,153

37,756(1,121)(316)(16)(2,110)(289)(1,121)(316)(18)(2,639)(288)(10,552)(2,980)(157)(19,866)(2,724)(4,383)(36,281)(3,854)¥ 156¥(1,230)$1,475(2) For the year ended March 31, 2018 and 2017, a reconciliation of the statutory tax rate to the effective tax rates was as follows:
2018

30.9%
3.1
(3.2)
3.1
(119.4)
(1.5)
(0.3)

Statutory tax rate
Permanently non-deductible expenses
Permanently non-taxable income
Per capita inhabitants’ taxes
Valuation allowance
Unrealized gains (losses)
Other

Effective tax rates(87.4)%

2017

30.9%
3.9
(2.8)
3.4
(22.2)
(1.5)
4.5
16.2%

(3) Amendments to amounts of deferred tax assets and liabilities as a result of change in normal effective statutory tax rate
On December 22, 2017, the Tax Cuts Jobs Act (the “Act” ) was signed into law in the United States. The Act reduces thecorporate tax rate to 21 percent from 35 percent. As a result, deferred tax assets (net) have decreased by ¥9 million ($88
thousand), and deferred income taxes have increased by ¥9 million ($88 thousand).

28

16. Segment Information(1) Reportable segment information

The Company’s reportable segments are components for which discrete financial information is available and which are regularly
reviewed by the Board of Directors to determine resource allocation and evaluate business results.
The Company’s businesses are divided into segments, which handle specific products and carry out comprehensive strategy
planning in Japanese and overseas markets.
The Company consists of four reportable segments, identified by product portfolio, which are classified as the “Paper and Pulp
Segment,” the “Imaging Media Segment,” the “Speciality Materials Segment,” and the “Warehouse and Transportation Segment.”
The “Paper and Pulp Segment” develops writing and printing paper, premium-quality paper and pulp. The “Imaging Media
Segment” handles product portfolios, including photo-sensitive printing plates, inkjet paper, photographic materials. The “Speciality
Materials Segment” handles speciality and other product portfolios. The “Warehouse and Transportation Segment” handles
warehousing and carrying service.
From this consolidated fiscal year, as the quantitative importance of “Warehouse and Transportation Segment,” which was
included in “Other,” increased, the Company adopted the method to list “Warehouse and Transportation Segment” as a reportablesegment. In addition, segment information of the previous consolidated fiscal year is based on the new reportable segments.
Consolidated fiscal year under review (April 1, 2017 – March 31, 2018)
Millions of yen
Reportable segments

Year ended March 31, 2018

Net sales
Sales to third parties
Inter-segment sales andtransfers
Total sales

Segment income

Segment assets
Depreciation and amortization
Investment in equity-method
affiliates
Increase in tangible andintangible fixed assets

Paper
and Pulp

Imaging
Media

Speciality
Materials

Warehouse
andTransportation

Total¥ 5,208¥ 199,563

3,367

15,166¥ 148,508 ¥ 31,756 ¥ 14,090
3,712

152,220
¥ 98

5,151

36,907
¥ 449

2,936

17,026
¥ 952

8,575

214,730¥ 4,607122¥ 234,921
10,434¥ 258¥ 174,439 ¥ 38,784 ¥ 17,090
7,613
2,089
608

¥ 1,759

Other

Total

Adjustments

Consolidated¥−¥ 201,492

21,500 (21,500)−¥ 1,928 ¥ 201,492
6,333

8,262

222,992 (21,500)

201,492¥ 8,207 ¥ 243,129 ¥ (5,703)
138
10,572(98)¥ 237,426
10,474¥ 135¥ 1,895¥ (104)¥ 1,790

1,554

−

−

−

1,554

323

1,878

−

1,878

5,292

1,625

478

140

7,536

19

7,556

(117)

7,438

Adjustments

Consolidated$−$1,896,579

Thousands of U.S. dollars
Reportable segments
Year ended March 31, 2018

Net sales
Sales to third parties
Inter-segment sales andtransfers
Total sales

Segment income

Paper
and Pulp

Imaging
Media

Speciality
Materials

Warehouse
andTransportation$1,397,856 $298,913 $132,629
34,941

1,432,798$926

48,488347,401$4,23531,695$8,962$2,435

Segment assets$1,641,939 $365,062 $160,862
71,666
19,667
5,723
Depreciation and amortization
Investment in equity-method
affiliates
14,635−−
Increase in tangible andintangible fixed assets
49,81615,303
4,500

29

Other

Total

$49,026 $1,878,426 $18,153 $1,896,579

27,635160,264

Total

80,721

142,760

2,021,186

59,61577,768$16,559$1,279−14,635

1,322

70,942

202,375 (202,375)−

2,098,954 (202,375) 1,896,579$17,839$(987)$16,852

3,048

17,684−

17,684

183

71,126(1,110)70,015$43,373 $2,211,237 $77,257 $2,288,494 $(53,685) $2,234,808
98,212
1,302
99,515(924)
98,5901,154

(i) The engineering business and others are included in “Other.” They are not included in the reportable segments.
(ii) Adjustments are:• Adjustments and eliminations for segment income include ¥(75) million ($(712) thousand) of elimination of inter-segment income
and loss and ¥(29) million ($(274) thousand) of corporate expenses, which are general and administrative expenses and are notallocable to the reportable segments.
• Adjustments and eliminations for segment assets include ¥12,710 million ($119,642 thousand) of corporate assets and ¥(18,414)
million ($(173,328) thousand) of elimination of inter-segment assets.
• Adjustments and eliminations for amortization of ¥(98) million ($(924) thousand) is elimination of inter-segment.
• Adjustments and eliminations for increase in tangible and intangible fixed assets include ¥(117) million ($(1,110) thousand) ofelimination of inter-segment increase in tangible and intangible fixed assets.
(iii) Segment income is adjusted with consolidated operating income.

Previous consolidated fiscal year (April 1, 2016 – March 31, 2017)
Millions of yen
Reportable segments
Year ended March 31, 2017

Net sales
Sales to third parties
Inter-segment sales andtransfers
Total sales

Segment income

Segment assets
Depreciation and amortization
Investment in equity-method
affiliates
Increase in tangible andintangible fixed assets

Paper
and Pulp

Imaging
Media

Speciality
Materials

Warehouse
andTransportation

Total¥146,649¥34,222¥14,092¥4,759¥199,724

2,866

3,489

¥970

¥198

3,779

4,685

150,428

38,908

16,958¥174,267
7,548¥37,947
2,151

1,523
3,678

¥2,022

14,820

Other

Total

¥2,231 ¥201,955
5,761

Adjustments

Consolidated¥−¥201,955

20,582 (20,582)

214,544

7,993¥15,487
608¥4,519105¥232,222
10,413¥6,755 ¥238,977 ¥(3,107) ¥235,869
136
10,550(95)
10,454

−

−

−

1,523

1,820

470

107

6,078

¥948

¥4,139¥154

222,537 (20,582)

−

8,249

201,955¥4,293¥19¥4,313

351

1,874

−

1,874

15

6,094

(98)

5,995

(i) The engineering business and others are included in “Other.” They are not included in the reportable segments.
(ii) Adjustments are:• Adjustments and eliminations for segment income include ¥48 million of elimination of inter-segment income and loss and ¥(28)
million of corporate expenses, which are general and administrative expenses and are not allocable to the reportable segments.
• Adjustments and eliminations for segment assets include ¥14,952 million of corporate assets and ¥(18,059) million of eliminationof inter-segment assets.
• Adjustments and eliminations for amortization of ¥(95) million is elimination of inter-segment.
• Adjustments and eliminations for increase in tangible and intangible fixed assets include ¥(98) million of elimination ofinter-segment increase in tangible and intangible fixed assets.
(iii) Segment income is adjusted with consolidated operating income.

30

(2) Geographical information(i) Net sales to third parties by countries or areas grouped according to geographical classification for the years ended March 31,2018 and 2017 are as follows:

Thousands of
U.S. dollars

Millions of yen
2018

Japan
EuropeAsia
North America
Other

Consolidated

2018

2017

¥ 137,787
32,80913,30813,923
3,663¥141,513
30,63013,35011,663
4,797$1,296,950
308,822
125,265
131,058
34,481¥ 201,492¥201,955$1,896,579

Net sales information above are based on customer location.
(ii) Property, plant and equipment by countries or geographical areas at March 31, 2018 and 2017 are as follows:
Thousands of
U.S. dollars

Millions of yen
2018¥ 89,704
9,545
370
113

Japan
EuropeAsia
North America

Consolidated

2018

2017

$844,352
89,846
3,484
1,064¥94,329
9,235
369
130

¥ 99,732$938,748¥104,064(3) Impairment loss on fixed assets by reportable segments

Consolidated fiscal year under review (April 1, 2017 – March 31, 2018)
Millions of yen

Reportable segments
Year ended March 31, 2018

Impairment loss

Paper
and Pulp

Imaging
Media

Speciality
Materials

Warehouse
andTransportation

Total

Other

¥ 47

¥1

¥−

¥ 26

¥ 76

¥−

Reportable segments
Year ended March 31, 2018

Impairment loss

Total

CorporateandAdjustments

Consolidated

¥ 76

¥ 132

¥ 209

Consolidated

Thousands of U.S. dollars

Paper
and Pulp

Imaging
Media

Speciality
Materials

Warehouse
andTransportation

Total

Other

Total

CorporateandAdjustments

$450

$16

$−

$253

$720

$−

$720

$1,249$1,970

CorporateandAdjustments

Consolidated

Previous consolidated fiscal year (April 1, 2016 – March 31, 2017)
Reportable segments
Year ended March 31, 2017

Impairment loss

Millions of yen

Paper
and Pulp

Imaging
Media

Speciality
Materials

Warehouse
andTransportation

Total

Other

Total

¥287

¥−

¥−

¥−

¥287

¥−

¥287

31

¥−

¥287

Mitsubishi Paper Mills Limited and Consolidated Subsidiaries

Independent Auditor’s Report32Mitsubishi Paper Mills Limited

Board of Directors, Executive Officers and Corporate Auditors
Managing Executive Officers

Kunio Suzuki

Kazuhisa Taguchi

President and Chief Executive
Officer

Kanji Morioka

Junji Harada

Director andSenior Executive Vice President

Director andSenior Managing Executive Officer

Director andSenior Managing Executive Officer

Masaki Shuto

Makoto Fujita

Yukihiro Tachifuji

Naoki Okawa

Director andManaging Executive Officer

Managing Executive Officer

Managing Executive Officer

Director andManaging Executive Officer

President and Chief Executive
Officer

Director and Managing
Executive Officers

President

In charge of Finance & Accounting
Dept.

Kunio Suzuki

Director and Senior Executive Vice
President

Kazuhisa Taguchi

Supervisor, Imaging Div., Energy
Business Dept. and Technology &Environmental Dept.
; In charge of Kitakami Div.; General
Manager, Kitakami Div.

Director and Senior Managing
Executive Officers

Kanji Morioka

Supervisor, President’s Office ; In
charge of Raw Materials &Purchasing Dept. and Internal Audit
Dept.; Director responsible for
Corporate Social Responsibility

Junji Harada

Outside Directors

Tomohisa Shinagawa

Masaki Shuto

Soumitsu Takehara
Senior Executive Officers

Naoki Okawa

Yutaka Oka

In charge of General Affairs &Personnel Dept., Legal Dept. andShirakawa Office

In charge of Imaging Div. ; General
Manager, Imaging Div.

Akira Inoue

Managing Executive Officers

Director and Managing Executive
Officer, Mitsubishi Paper Sales Co.,Ltd.

Makoto Fujita

In charge of Energy Business Dept.,
Speciality Materials R&D Laboratory, Product Development Dept.,Intellectual Property Dept. andTechnology & Environmental Dept.;
General Manager, ProductDevelopment Dept.

Yukihiro Tachifuji

Koji Hayashi

President, Mitsubishi Paper Holding(Europe) GmbH

Shimpei YamadaHead, Takasago Mill ; Deputy
General Manager, Paper Div.,
Imaging Div. and Speciality Materials
Div.

Supervisor, Speciality Materials R&D
Laboratory, Product Development
Dept. and Intellectual Property Dept. ;In charge of Speciality Materials Div. ; Director and Senior Executive Officer
Nobuhiro Sato
General Manager, Speciality
In charge of Paper Div. and German
Materials Div.
Operations ; General Manager, PaperDiv.

In charge of President’s Office ;General Manager, President’s
OfficeExecutive Officers

Keiichi Sato

President & CEO, MPM Operation
Co., Ltd.; Head, Hachinohe Mill;
Deputy General Manager, Paper
Div.; President & CEO, MPM Oji
Home Products Co., Ltd.

Takeshi Sunakawa

President & CEO, KJ SPECIALTY PAPER Co., Ltd.

Masaya Sawada

Deputy General Manager,
Speciality Materials Div.

Teiji Ota

Head, Kyoto Mill; Deputy General
Manager, Imaging Div.

Corporate Auditor

Kenji Oka

Outside Corporate Auditors

Hiroaki Tonooka
Takayuki Nakazato
Takeshi Kobayashi(as of June 27, 2018)33

Mitsubishi Paper Mills Limited

Company Data

Established:
April 1, 1898
Head Office:2-10-14, Ryogoku, Sumida-ku, Tokyo 130-0026, Japan
Telephone:+81-3-5600-1488 (Information)+81-3-5600-1481 (President’s Office)+81-3-5600-1459 (Commercial Printing & Business Communication
Paper Sales Dept. Paper Division)+81-3-5600-1464 (Sales Administration Dept. Paper Division)+81-3-5600-1536 (International Sales Dept. Paper Division)+81-3-5600-1479 (Imaging Media Dept. Imaging Division)+81-3-5600-1475 (Graphic & Development Dept. Imaging Division)+81-3-5600-1471 (Speciality Materials Division)+81-3-5600-1453 (Raw Materials & Purchasing Dept.)
Facsimile:+81-3-5600-1489 (Information)+81-3-5600-1489 (President’s Office)+81-3-5600-1467 (Commercial Printing & Business Communication
Paper Sales Dept. Paper Division)+81-3-5600-1469 (Sales Administration Dept. Paper Division)+81-3-5600-1539 (International Sales Dept. Paper Division)+81-3-5600-1418 (Imaging Media Dept. Imaging Division)+81-3-5600-1413 (Graphic & Development Dept. Imaging Division)+81-3-5600-1419 (Speciality Materials Division)+81-3-5600-1451 (Raw Materials & Purchasing Dept.)
Sales Branch:
Osaka

Corporate Research Center:
Speciality Materials R&D Laboratory
Kyoto R&D Laboratory
Process Development Laboratory
Mills:
Takasago
Kyoto
Hachinohe
Major Affiliates:
Domestic

Mitsubishi Paper Sales Co., Ltd.
Toho Tokushu Pulp Co., Ltd.
MPM OJI Home Products Co., Ltd.
Hachinohe Paper Processing Co., Ltd.
Shin-Hokuryo Forest Products Co., Ltd.
Hachiryo Co., Ltd.
Hokuryo Co., Ltd.
Hakuryo Paper Technology Co., Ltd.
Takasago Paper Processing Co., Ltd.
Kitakami HiTec Paper Corp.
Diamic Co., Ltd.
Pictorico Co., Ltd.
Kyoryo Chemical Co., Ltd.
NAMITSU Co., Ltd.
Mitsubishi Paper Engineering Co., Ltd.
Ryoshi Co., Ltd.
MPM Shared-service Co., Ltd.
MPM CAE Center Co., Ltd.
KJ Specialty Paper Co., Ltd.
Ryoko Co., Ltd.
MPM Operation Co., Ltd.
Overseas

Mitsubishi Paper Holding (Europe) GmbH (Germany)
Mitsubishi HiTec Paper Europe GmbH (Germany)
Mitsubishi Imaging (MPM), Inc. (U.S.A.)
MP Juarez LLC (Mexico)
Zuhai MPM Filter, Ltd. (China)
MPM Hong Kong Limited

Disclaimer Regarding Forward-Looking Statements
This material contains forward-looking statements relating to thebusinesses and prospects of the Company. These statements are basedon our expectations at MAY 2018. and are subject to the risks anduncertainties that may affect our businesses, which could cause actual
results to differ materially from those anticipated.
We will not be liable for any damage or loss incurred by you arisingout of or in connection with this material.

34

2-10-4 Ryogoku, Sumida-ku,
Tokyo 130-0026, JAPANURL http://www.mpm.co.jp/