Note: This document has been translated from the Japanese original FOR REFERENCE PURPOSES ONLY.
In the event of any discrepancy between this translated document and the Japanese original, THE ORIGINALSHALL PREVAIL.

(Securities Code: 3864)
June 10, 2022
To Our Shareholders with Voting Rights
Shigeharu Sanada
Representative Director
Mitsubishi Paper Mills Ltd.
2-10-14 Ryogoku, Sumida-ku, Tokyo, Japan

Notice of the 157th Ordinary General Meeting of Shareholders
We would like to express our appreciation for your continued support and patronage.
You are cordially invited to attend the 157th Ordinary General Meeting of Shareholders of Mitsubishi Paper Mills
Ltd. (hereinafter “MPM”). The meeting will be held for the purposes as described below.
You may exercise your voting rights in advance in writing or via the Internet in lieu of voting in person at themeeting. After reviewing the following reference documents for the general meeting of shareholders, please exercise
your voting rights following the instructions below no later than 5:30 p.m. on Monday, June 27, 2022.
1. Date and Time:
2. Place:

Tuesday, June 28, 2022 at 10 a.m.
MPM Conference Room (11th Floor, Ryogoku City Core)
2-10-14 Ryogoku, Sumida-ku, Tokyo

3. Agenda of the Meeting:
Matters to be reported: 1.

2.

The Business Report, the Consolidated Financial Statements and the results of auditsof the Consolidated Financial Statements by the Independent Auditor and the Audit
and Supervisory Board for the 157th Business Term (from April 1, 2021 to March 31,
2022)
Non-Consolidated Financial Statements for the 157th Business Term (from April 1,
2021 to March 31, 2022)

Proposals to be resolved:
Proposal No. 1: Partial Amendment to the Articles of Incorporation
Proposal No. 2: Election of Eight (8) Directors
Proposal No. 3: Election of One (1) Substitute Audit & Supervisory Board Member
Proposal No. 4: Partial Amendments to the Response Policies on Large-Scale Purchases of MPM’s Shares(Takeover Defense Measures) and Continuance Thereof● When attending the meeting, please submit the enclosed voting rights exercise form at the reception desk to register yourattendance.
● Please be advised that in the event the Reference Documents for the General Meeting of Shareholders, the Business Report, theNon-Consolidated Financial Statements, or the Consolidated Financial Statements require modifications, MPM will post suchmodifications on its website (https://www.mpm.co.jp/ir).

1

Guidance on Exercising Voting Rights
1. If you attend the General Meeting of Shareholders
Please present the enclosed voting card at the reception desk upon your arrival.
Date and Time: Tuesday, June 28, 2022 at 10 a.m. Japan time (The reception desk is scheduled to open at 9a.m.)
2. If you exercise voting rights in writing (by mail)Please state whether you are for or against the agenda items on the enclosed Voting Rights Exercise Form anddrop it into a post box.
Voting deadline: Please exercise your voting rights by 5:30 p.m. on Monday, June 27, 2022.
3. Exercising voting rights on the Internet
Please follow the instructions below and enter your approval or disapproval for the proposals.
Voting deadline: Entries completed by 5:30 p.m., Monday, June 27, 2022
How to read a QR code
You can log into the voting website without entering
the login ID and temporary password written on the
Voting Rights Exercise Form.

How to enter your login ID and temporary password
Voting website
https://evote.tr.mufg.jp/

1. Please scan the QR code on the voting card.

1. Please access the voting website for PCs.

2. Please enter the login ID and temporary password
written on the Voting Rights Exercise Form and click
submit.
Enter the login ID
and temporary password
Click “Login”* QR Code is the registered trademark of DENSOWAVE INCORPORATED.

22. Please follow the instructions on the screen toregister whether you approve or disapprove of each
proposal.

3. Register a new password.
Register a new password

Click “Submit”

You can log in using the QR code only once.
If you wish to exercise your voting rights again or
exercise your voting rights without using the QR
code, please see “How to enter your login ID andtemporary password” on the right.

4. Please follow the instructions on the screen to register
whether you approve or disapprove of each proposal.

* Screen images are for illustrative purposes.
● For inquiries about operation procedure for exercising voting rights via the Internet using PCs and smartphones,
please contact the inquiry desk below.
Stock Transfer Agency Department, Mitsubishi UFJ Trust and Banking Corporation (Helpdesk)
0120-173-027(Toll free, Operating hours: 9:00-21:00)● Institutional investors are permitted to use the platform for the electronic exercise of voting rights for institutional
investors operated by ICJ, Inc.

3

Reference Documents for the General Meeting of Shareholders
Proposal No. 1:
Partial Amendment to the Articles of Incorporation
1. Reasons for the amendment
The amended provisions stipulated in the proviso of Article 1 of the Supplementary Provisions of
the Act Partially Amending the Companies Act (Act No.70 of 2019) are due to come into effect on
September 1, 2022. Accordingly, the Company proposes amending its Articles of Incorporation toprepare for adoption of a system for the electronic provision of materials for the General Meeting of
Shareholders. Details are as follows.
(1) Article 15, Paragraph 1 in the proposed amendments stipulates to the effect that the Company
shall take the measure for electronic provision of materials with respect to information that
constitutes the content of reference materials for the General Meeting of Shareholders.
(2) Article 15-2 in the proposed amendments establishes provisions to limit the scope of matters to
be stated in the document that will be issued to shareholders who requested the issuance of the
document.
(3) Since the provisions on Disclosure on the Internet and De Facto Provision of Shareholders’
General Meeting Reference Documents, etc. (Article 15 of the current Articles of Incorporation)
will no longer be necessary, the Company proposes deleting these provisions.
(4) With the establishment and deletion of provisions described above, supplementary provisions on
effective date, etc. shall be established.
2. Details of amendments
Details of the amendments are as follows.
(Underlined part indicates amendments)
Current Articles of Incorporation
Proposed Amendments
Article 15 (Internet-based Disclosure of(Delete)Reference Data for General Meeting of
Shareholders)
In convening a General Meeting of
Shareholders, the Company may deem tohave supplied information about mattersto be stated or indicated in referencedocuments for the general meeting,business reports, financial statements andconsolidated financial statements toshareholders,bydisclosing
theinformation via an Internet-used methodinaccordancewithapplicableordinances.
(New)

Article 15 (Electronic Provision Measure, etc.)
Upon convening a General Meeting of
Shareholders, the Company shall take theelectronic provision measure withrespect to information that constitutes thecontent of reference materials for the
meeting of shareholders, etc.
2. The Company may omit all or part of
information specified in the Ordinance ofthe Ministry of Justice and provided in an4

electronic form from documents
delivered to shareholders who haverequested, before the record date ofvoting rights, paper-form documents.
(Supplementary Provisions)
1. The deletion of Article 15 on the current
Articles of Incorporation (Disclosure on theInternet and De Facto Provision of
Shareholders’ General Meeting Reference
Documents, etc.) and the new establishmentof Article 15 in the proposed amendment(Electronic Provision Measure, etc.) shalltake effect on the date of enforcement(hereinafter, the “Enforcement Date”) of theamended provisions stipulated in the proviso
of Article 1 of the Supplementary Provisionsof the Act Partially Amending the Companies
Act (Act No.70 of 2019).
2. Notwithstanding the provisions of thepreceding paragraph, Article 15 of the current
Articles of Incorporation shall remain valid
for any General Meeting of Shareholders thedate of which is a date within six (6) monthsof the Enforcement Date.
3. These Supplementary provisions shall bedeleted on the date on which six (6) months
have elapsed from the Enforcement Date or
the date on which three (3) months haveelapsed from the date of the General Meetingof Shareholders under the preceding
paragraph, whichever is later.

(New)

5

Proposal No. 2: Election of Eight (8) Directors
The terms of the offices of all eight (8) Directors will expire as of the close of this Ordinary General
Meeting of Shareholders. Consequently, we will propose that eight (8) Directors including three (3)Outside Directors be elected.
Regarding the selection of the candidates, in accordance with the Director Qualification listed in
MPM Basic Policies on Corporate Governance, the Board of Directors has decided after seeking andreceiving advice from the Nomination and Remuneration Committee chaired by an Independent
Outside Director.
The candidates are as follows:
No.

Name

Current position in MPM

1Ryuichi Kisaka

NEW APPOINTMENT

President and Executive Officer

2

Shigeharu Sanada

REAPPOINTMENT

Director and Senior Executive Vice President
Nomination and Remuneration Committee Member

3

Nobuhiro Sato

REAPPOINTMENT

Director and Managing Executive Officer

4

Shigeji Matsuzawa

NEW APPOINTMENTManaging Executive Officer

5

Kunio Suzuki

REAPPOINTMENT

Director and Advisor

6

Somitsu Takehara

REAPPOINTMENT
Outside Independent

Outside Director
Nomination and Remuneration Committee Member

7

Yoshihiro Kataoka

REAPPOINTMENT
Outside Independent

Outside Director
Nomination and Remuneration Committee Member

8

Kazunori Shinohara

NEW APPOINTMENT
Outside Independent

6

No. (Date of birth, etc.)

Name

1

Ryuichi Kisaka

Number of shares of MPM held: 20,000 shares

Profile and position in MPM
April 1982
October 2012
June 2013
June 2015(May 21, 1956)
age 66
NEW APPOINTMENTCANDIDATE

April 2017

April 2019
April 2020
June 2021
February 2022
April 2022

Joined Kanzaki Paper Manufacturing Co., Ltd. (current Oji
Holdings Corporation (hereinafter “Oji”))
President, Oji Imaging Media Co., Ltd. and Director, Oji
Functional Materials Progressing Center Inc.
Corporate Officer, Oji, President, Oji Imaging Media Co.,
Ltd. and Director, Oji Functional Materials Progressing
Center Inc.
Director of the Board and Executive Officer, Oji, Senior
Managing Executive Officer, Oji Functional Materials
Progressing Center Inc. and President, Oji Imaging MediaCo., Ltd.
Director of the Board and Executive Officer, Oji, Deputy
General Manager, Corporate Governance Division andSenior Managing Executive Officer, Oji Management OfficeInc.
Director of the Board and Executive Officer, Oji and
President, Oji Paper Co. Ltd.
Director of the Board and Executive Officer, Oji, General
Manager, Corporate Governance Division and President, Oji
Management Office Inc.
Advisor, Oji Holdings Corporation
Advisor, MPM
President, Executive Officer, MPM (to present)

Reasons for nominating as a candidate for Director
Mr. Ryuichi Kisaka has a wealth of experience in corporate management in thepaper and pulp industry as an Executive Officer of Oji and President of Oji Paper
Co., Ltd. He is expected to demonstrate his superior management talent to enhance
corporate value by directing the implementation of MPM’s new mid-term
management plan from the next fiscal year and maximizing the effects of capitaland business alliances with the Oji Group. He has thus been nominated as a
candidate forDirector.

7

No. (Date of birth, etc.)

2

Name

Shigeharu Sanada

Number of shares of MPM held: 1,500 shares
Attendance of Board of Directors meetings
100% (14/14)

Profile and position in MPM
April 1990
May 2016
June 2016(July 1, 1967)
age 54
REAPPOINTMENTCANDIDATE

April 2020
June 2020
February 2022
April 2022

Joined The Mitsubishi Bank Ltd. (current MUFG Bank Ltd.
(hereinafter “MB”))
General Manager, General Affairs Department, Mitsubishi
UFJ Financial Group Inc.(hereinafter “MUFG”)
General Manager, General Affairs Department, MB
Executive Officer, General Manager, General Affairs
Department, MUFG
Executive Officer, General Manager, General Affairs
Department, MB
Executive Officer, Headquarters counselor, MB
Director and Managing Executive Officer
Director and Managing Executive Officer (Representaive
Director)
Director and Senior Executive Vice President(Representaive Director) (to present)
In charge of Corporate Planning Dept., Functional
Materials Division, Research and Development Division,
General Affairs & Personnel Dept., Legal Dept., Finance& Accounting Dept., Energy Business Dept., Technology& Environmental Dept., Shirakawa Office, Kitakami
Division and German Operations
Responsible for Raw Materials & Purchasing Dept. andInternal Audit Dept.
Director responsible for Sustainability Promotion

Reasons for nominating as a candidate for Director
Mr. Shigeharu Sanada has extensive experience in the execution of business at megabanks including his experience overseas and has in-depth knowledge of corporate
management and a broad human network. He is expected to demonstrate his
management talent to enhance the corporate value of MPM over the medium andlong term by assisting the President, Executive Officer and strongly promoting the
mid-term management plan and structural reforms. He has thus been nominated asa candidate for Director.

8No. (Date of birth, etc.)

Name

3

Nobuhiro Sato

Number of shares of MPM held: 4,500 shares
Attendance of Board of Directors meetings
100% (14/14)

Profile and position in MPM
April 1980
June 2013
June 2015
January 2016
January 2018
June 2018(September 7, 1957)
age 64

June 2019
June 2020

REAPPOINTMENTCANDIDATE

April 2022

Joined MPM
Executive Officer, General Manager, BusinessCommunication Paper Sales Dept. Paper Division
Executive Officer, Deputy General Manager, Paper
Division
Senior Executive Officer, Deputy General Manager, Paper
Division
Senior Executive Officer, General Manager, Paper Division
Director and Senior Executive Officer, General Manager,
Paper Division
Director and Managing Executive Officer, General
Manager, Paper Division
Director and President of Mitsubishi Oji Paper Sales Co.,
Ltd. (to present)
Director and Managing Executive Officer, General
Manager, Pulp and Paper Material Division (to present)(In charge of Pulp and Paper Material Division General
Manager, Pulp and Paper Material Division)

Reasons for nominating as a candidate for Director
Mr. Nobuhiro Sato has been long involved in the sales section of the Paper Division,and has a wealth of market experience and knowledge. As General Manager of thePulp and Paper Material Division, he is overseeing the rationalization of distribution
and structural reform of our paper business. In consideration of the future businessdevelopment of MPM, he is expected to leverage his judgment and execution toward
growth and improvement of corporate value over the mid- to long-term. He has thus
been nominated as a candidate for Director.
No. (Date of birth, etc.)

Name

4

Shigeji Matsuzawa

Number of shares of MPM held: 2,000 shares

Profile and position in MPM
April 1985
June 2006
June 2010
April 2013
June 2013
December 2016

(February 14, 1961)
age 61

April 2018
August 2021

NEW APPOINTMENTCANDIDATE

April 2022

Joined Kanzaki Paper Manufacturing Co., Ltd. (current
Oji)Group Manager, Information Paper Technology Dept., Oji
Paper Co., Ltd.
General Manager, Research & Technology Dept. of
Kanzaki Plant, Oji Paper Co., Ltd.
Deputy Kanzaki Plant Manager, Oji Imaging Media Co.,
Ltd.
Seconded to Chief Officer, Kanzan Spezialpapiere GmbH
Deputy Kanzaki Plant Manager, Oji Imaging Media Co.,
Ltd.
Seconded to Chief Officer, Oji Functional Materials
Progressing Center Inc.
Chief Officer, Group Corporate Planning Dept., Oji
Management Office Inc.
Senior Executive Officer, MPM (to present)
In charge of Functional Materials Division, Research andDevelopment Division and German Operations
Assistant officer in charge of Kitakami Division
General Manager, Functional Materials Division

Reasons for nominating as a candidate for Director
Mr. Shigeji Matsuzawa has been long engaged in research and development in the
Oji Group and has a wealth of experience in business operations related to the pulp
and paper and functional materials businesses, including those overseas. He is
expected to demonstrate his management talent to strongly promote the new midterm management plan in cooperation with the Oji Group. He has thus been
nominated as a candidate for Director.

9No. (Date of birth, etc.)

Name

5

Kunio Suzuki

Number of shares of MPM held: 43,500 shares
Attendance of Board of Directors meetings
100% (14/14)

Profile and position in MPM
April 1974
June 2005
June 2006
June 2007
June 2009
June 2019
April 2021

Joined MPM
Executive Officer, Head, Hachinohe Mill
Senior Executive Officer, Head, Hachinohe Mill
Director, Managing Executive Officer
President and Chief Executive Officer
Chairman of the Board of Directors (Representative
Director)
Director and Advisor (to present)

Reasons for nominating as a candidate for Director(October 12, 1950)
age 71
REAPPOINTMENTCANDIDATE

Mr. Kunio Suzuki strongly led MPM’s recovery from the damage caused by theGreat East Japan Earthquake, reconstruction of the business portfolio and theprogress of alliances with Oji Holdings Corporation over the ten years since hebecame President & CEO in 2009, and has been promoting structural reforms. In
order to use his experience and knowledge to properly oversee the management, hehas thus been nominated as a candidate for Director.

No. (Date of birth, etc.)

6

Name

Somitsu Takehara

Number of shares of MPM held: 0 shares
Attendance of Board of Directors meetings
100% (13/14)

Profile and position in MPM
January 1977
December 1981
July 2000
April 2005
June 2005
February 2007
June 2014(April 1, 1952)
age 70
REAPPOINTMENTCANDIDATEOUTSIDE DIRECTORCANDIDATEINDEPENDENTDIRECTOR CANDIDATE

April 2015
June 2015
June 2016
November 2017
October 2018
June 2020

Joined Peat Marwick Mitchell & Company
Joined Coopers & Lybrand
General Manager, Transaction Service Division,
ChuoAoyama
Representative Director, ZECOO Partners Inc.
Outside Director, CDG Co., Ltd.
Outside Director, S-Pool, Inc.
Outside Audit & Supervisory Board Member, EDION
Corporation (to present)
Concurrently Appointed Lecturer, Graduate School ofProfessional Accountancy, Meiji University
Outside Director, GENKI SUSHI Co., Ltd. (to present)
Outside Director, MPM (to present)
Director & Chairman, ZECOO Partners Inc. (to present)
Outside Director, Shinmei Holdings Co., Ltd.
Outside Audit & Supervisory Board Member, TOKYOBROADCASTING SYSTEM HOLDINGS, INC. (current
TBS HOLDINGS, INC.) (to present)

Important positions concurrently held at other companies, etc.
Representative Director, ZECOO Partners Inc.
Outside Audit & Supervisory Board Member, EDION Corporation (scheduled toleave office on June 29, 2022）
Outside Director, GENKI SUSHI Co., Ltd.
Outside Audit & Supervisory Board Member, TBS HOLDINGS, INC.

Reasons for nominating as a candidate for Outside Director andexpected roles, etc.
Mr. Somitsu Takehara has expertise in finance and accounting as a certified public
accountant. He is a corporate manager of ZECOO Partners Inc., and has a wealth ofexperience of management consulting business and great insight into corporate
management. He is expected to contribute to corporate governance reinforcementby making the most of his experience and providing advice over the overallmanagement, MPM also has large expectations for his supervisory function for thedetermination of important business operations and execution from an independent
viewpoint as an Outside Director. He has thus been nominated as a candidate for
Director. If he is elected, he will be involved in the selection of candidates for the
MPM’s Board of Directors and decisions on executive compensation and othermatters from an independent standpoint as a member of the Nomination andRemuneration Committee.
10No. (Date of birth, etc.)

7

Name

Yoshihiro Kataoka

Number of shares of MPM held: 0 shares
Attendance of Board of Directors meetings
100% (14/14)

Profile and position in MPM
April 1980
April 1983
September 1984
June 1990
April 2007
June 2010
June 2011
March 2013

(July 30, 1954)
age 67
REAPPOINTMENTCANDIDATE

April 2014
June 2019
June 2021

Registered as an attorney-at-law
Hosoda and Kataoka Law Office
Chief, Yoshihiro Kataoka Law OfficePartner Chief, Kataoka & Kobayashi Lpc. (to present)
Visiting Professor, Chuo Law School (to present)
Supervisor, Comforia Residential REIT, Inc.
Outside Audit & Supervisory Board Member, The Higo Bank,Ltd.
Outside Audit & Supervisory Board Member, Silis Holdings
Co., Ltd. (current Silis Co.)
Outside Audit & Supervisory Board Member, Casa Inc.
Outside Director, MPM (to present)
Outside Director, Higo Bank, Ltd. (Audit & Supervisory
Committee Member) (to present)

Important positions concurrently held at other companies, etc.

OUTSIDE DIRECTORCANDIDATE

Partner Chief, Kataoka & Kobayashi Lpc
Outside Director, Higo Bank, Ltd. (Audit & Supervisory Committee Member）
Visiting professor at Chuo University Law School

INDEPENDENTDIRECTOR CANDIDATE

Reasons for nominating as a candidate for Outside Director andexpected roles, etc.
Mr. Yoshihiro Kataoka has legal expertise as a lawyer and many years of experiencein corporate legal affairs, and has sufficient insight to oversee corporate
management. Corporate governance is expected to be strengthened throughrecommendations to the overall management of MPM. As an outside director, he isexpected to play a role in determining important matters and supervising businessexecution from an independent position. He has thus been nominated as a candidate
for Director. He has thus been nominated as a candidate for Director. If he is elected,
he will be involved in the selection of candidates for the MPM’s Board of Directors
and decisions on executive compensation and other matters from an independent
standpoint as a member of the Nomination and Remuneration Committee.

11No. (Date of birth, etc.)

8

Name

Kazunori Shinohara

Number of shares of MPM held: 0 shares

Profile and position in MPM
April 1979
April 2010
April 2012
April 2014
April 2015

(September 25, 1954)
age 67

June 2015
April 2016

NEW APPOINTMENTCANDIDATEOUTSIDE DIRECTORCANDIDATEINDEPENDENTDIRECTOR CANDIDATE

April 2017
April 2018
April 2019
June 2019

Joined NH Foods Ltd. (hereinafter “NH Foods”)
Executive Officer, General Manager of Corporate Planning
Department, Corporate Planning Division, NH Foods
Executive Officer, General Manager of Administrative
Division, Fresh Meats Business Division, NH Foods
Executive Officer, General Manager of Administrative
Division, Fresh Meats Business Division, General Manager
of Business Planning Office, NH Foods
Executive Officer, General Manager of Affiliated Companies
Division, NH Foods
Director, Executive Officer, General Manager of AffiliatedCompanies Division, NH Foods
Director, Managing Executive Officer, General Manager ofAffiliated Companies Division, NH Foods
Representative Director, Vice President, Executive Officer incharge of Group Business Structural Reforms, NH Foods
Representative Director, Vice President, Executive Officer incharge of Group Structural Reforms, NH Foods
Director, NH Foods
Left office

Important positions concurrently held at other companies, etc.
Not applicable.

Reasons for nominating as a candidate for Outside Director andexpected roles, etc.
Mr. Kazunori Shinohara served as the Representative Director and Vice President ofa leading food processing company after engaging in sales, corporate planningincluding overseas businesses and management of business divisions and has aproven track record in comprehensive corporate management including thestructural reform of businesses. He is expected to strengthen corporate governanceby utilizing these management experiences in the manufacturing industry to makeproposals, etc. in all aspects of MPM’s management. MPM also has large
expectations for his supervisory capabilities in the determination of importantbusiness operations and the execution of business from an independent viewpoint as
an Outside Director. He has thus been nominated as a candidate for Outside Director.
Notes: 1. Each candidate does not have any special interest in the Company.
2. Directors and Officers Liability Insurance (D&O Insurance) Agreement
MPM has entered into a D&O Insurance Agreement with an insurance company, naming the MPM’s
Directors as the insured. The D&O insurance policy is designed to cover damages that may arise due to theinsured assuming responsibility for the performance of their duties or receiving claims related to the pursuitof such responsibility. The candidate is scheduled to be insured under this D&O Insurance policy if he isappointed as a substitute Director and assumes office as a Director.
3. Mr. Somitsu Takehara, Mr. Yoshihiro Kataoka and Mr. Kazunori Shinohara are candidates for Outside
Director.
(1) Limitation of Liability Agreement
Mr. Somitsu Takehara and Mr. Yoshihiro Kataoka have entered into a Limitation of Liability Agreementwith MPM which will be effective during their service pursuant to Article 427 Paragraph 1 of the Companies
Act. And if Mr. Kazunori Shinohara become outside directors, he plans to enter into a Limitation of Liability
Agreement with MPM which will be effective during their service pursuant to Article 427 Paragraph 1 of theCompanies Act. Based on this agreement, liability for compensation for damages under Article 423 Paragraph1 shall be limited to 10 million yen or the minimum amount stipulated by law, whichever is greater.
(2) Independent Director
MPM plans to notify the Tokyo Stock Exchange that these three people have become Independent Directors.
(Reasons for notification as Independent Director)
These three people meet the Independence Criteria for MPM’s Independent Directors. In consideration ofthis and the expertise that they have, MPM will appoint them as an Independent Director with no possibilityof conflicts of interest with the general shareholders of MPM.
(3) Term as Outside Director
Mr. Somitsu Takehara and Mr. Yoshihiro Kataoka will have served as Outside Director for six (6) years
and three (3) years, respectively, at the close of this Ordinary General Meeting of Shareholders.
12(Reference 1) For your reference, the relevant provisions of “MPM Corporate Governance Basic Policy” pertaining
to Directors are listed below:(Director Qualification and Nomination Procedures)
Article 18.
The post of MPM’s director shall be filled by a person who has integrity, insights, abilities and a wealthof experience, etc. as well as an elevated sense of ethics.
2. When determining a director candidate, MPM shall pay attention to the diversity of those who compose
the Board of Directors, weighing the balance between personnel who can play to their strengths in
corporate management in a business area in which the group currently operates, or may operate in the
future, personnel who are fit for business administration, personnel who can adequately fulfill
supervising functions and others.
3. With respect to outside director candidates, MPM shall nominate personnel who can provide
suggestions and advice aimed at frank and active, and constructive deliberations regarding corporate
management based on their experience, knowledge, expertise, etc., and, from his/her independent
standpoint, supervise corporate management and monitor any conflict of interest between the
management team, etc. and MPM and have opinions of stakeholders reflected appropriately.
4. The independence of an outside director shall be judged based on the Independence Criteria in the
Appendix.
5. A decision on any director candidate nomination shall be made by the Board of Director In light of thepreceding four paragraphs after seeking and receiving advice from the Nomination and Remuneration
Committee.
6. All directors shall be appointed to a one-year term of office and shall be subject to an election at an
ordinary general meeting of shareholders.
(Establishment of a Voluntary Nomination and Remuneration Committee)
Article 23.
MPM establishes a Nomination and Remuneration Committee as an advisory body for the Board of
Directors.
2. Members of the Nomination and Remuneration Committee shall be elected from among representative
directors and independent outside directors and be chaired by an independent outside director.
3. The Nomination and Remuneration Committee shall, in response to inquiry from the Board of Directors,
examine the appropriateness of the contents of proposals to be presented to the Board of Directors, andgive advice, with respect to each of the following items:i) Director and Audit & Supervisory Board Member candidate nomination and CEO, executive
director, operating officer and executive officer elections and dismissals; andii) Policy on remuneration of directors and executive officers and details of the remuneration for eachindividual.
4. Any inquiry on the contents of proposals to be presented to the Board of Directors set forth in thepreceding paragraph shall as a general rule be made by the President and Representative Director. If theBoard of Directors provides otherwise, however, such a procedure shall be followed.

(Reference 2) The balance of knowledge, experience and ability of each candidate is as follows.
Candidate
Corporate
Attribute
namesmanagement
Ryuichi
KisakaShigeharu
SanadaNobuhiro
Sato
ShigejiMatsuzawa
Kunio
Suzuki
Somitsu
Takehara
Yoshihiro
Kataoka
Kazunori
Shinohara

Finance Manufacturing,
Personnel Purchasing
Sales andGlobal Legal andandtechnology andand laborandESGmarketingmindset complianceaccounting
R&D
management procurement

Internal●●

Internal●●

Internal

●

●

●
●

●

●

●

●

●

●

External●

External
External●●

Internal
Internal

●

●
●

●

13

●

●

Proposal No. 3: Election of One (1) Substitute Audit & Supervisory Board Member
In case of the number of incumbent Audit & Supervisory Board Members becomes less than that
required by laws and ordinances, we propose that one (1) substitute Audit & Supervisory Board
Member be elected.
This proposal requests the election of a substitute for the two (2) current Outside Audit &Supervisory Board Members, Mr. Hiroaki Tonooka and Mr. Satoshi Takizawa.
The consent of the Audit & Supervisory Board has been obtained for this proposal.
The candidate is as follows:
Date of birth, etc.

Name

Akito Takahashi

Number of shares of MPM held: 0 shares

ProfileApril 2000

(March 30, 1975)
age 47

April 2005
March 2007
September 2009
March 2012
December 2012
March 2015
December 2015
February 2018

Registered as an attorney
Joined Anderson Mori Law Firm (current Anderson Mori &Tomotsune)
Registered as an attorney, admitted in New York State, theU.S.A
Joined Koichi Nishimura Law Firm
Opened Takahashi Katayama Law Firm (to present)
Outside Audit & Supervisory Board Member, Nippon
Carbon Co., Ltd.
Outside Corporate Auditor, ACK Group Co., Ltd. (current
Oriental Consultants Holdings Company Limited)
Outside Director, Nippon Carbon Co., Ltd.
Outside Director, Oriental Consultants Holdings Company
Limited (to present)
Outside Director (Audit & Supervisory Board Member),
OSG Corporation (to present)

Important positions concurrently held at other companies, etc.
Outside Director (Audit & Supervisory Board Member), OSG Corporation
Outside Director, Oriental Consultants Holdings Company Limited

Reasons for nominating as a candidate for substitute Audit &Supervisory Board Member
Mr. Akito Takahashi has legal expertise as a lawyer, a deep knowledge of corporate
legal affairs, and sufficient insight to oversee corporate management. As MPM
believes that he will be able to appropriately and effectively audit management froman independent position even if he were to become an Outside Audit & Supervisory
Board Member, he has been nominated as a candidate for Outside Audit &Supervisory Board Member.
Notes: 1. No conflict of interests exists between MPM and Mr. Akito Takahashi.
2. Directors and Officers Liability Insurance (D&O Insurance) Agreement
MPM has entered into a D&O Insurance Agreement with an insurance company, naming the MPM’s Audit& Supervisory Board Members as the insured. The D&O insurance policy is designed to cover damages
that may arise due to the insured assuming responsibility for the performance of their duties or receiving
claims related to the pursuit of such responsibility. The candidate for substitute Audit & Supervisory Board
Member is scheduled to be insured under this D&O Insurance policy if Mr. Akito Takahashi is appointed
as an Audit & Supervisory Board Member.
3. Mr. Akito Takahashi is a candidate for substitute for the Outside Audit & Supervisory Board Members.
(1) Limitation of Liability Agreement
If Mr. Akito Takahashi assumes office as Outside Audit & Supervisory Board Member, MPM willconclude a Limitation of Liability Agreement with him, limiting his liability pursuant to Article 427
Paragraph 1 of the Companies Act. Based on this agreement, liability for compensation for damages
under Article 423 Paragraph 1 shall be limited to 10 million yen or the minimum amount stipulated bylaw, whichever is greater.
(2) Independent Director
If Mr. Akito Takahashi becomes an Outside Audit & Supervisory Board Member, MPM plans to notify
the Tokyo Stock Exchange of his being an Independent Director.
(Reasons for notification as Independent Director)
He meets the Independence Criteria for MPM’s Independent Directors. In consideration of this and theexpertise that he has, MPM will appoint him as an Independent Director with no possibility of conflictof interests with the general shareholders of MPM.

14

Proposal No. 4: Partial Amendments to the Response Policies on Large-Scale Purchases of MPM’s
Shares (Takeover Defense Measures) and Continuance Thereof
We request that our shareholders approve the response policies on large-scale purchases of MPM’s
shares (takeover defense measures) (hereinafter, the plan after the amendments shall be referred to as
the “Plan”), which include the contents stated below, that was decided by MPM’s Board of Directors,
as of May 30, 2022, to continue after making necessary amendments (hereinafter the “Amendments”)
to the previous response policies on large-scale purchases of MPM’s shares (takeover defense
measures) (hereinafter the “Current Plan”) subject to the approval of the shareholders at the Annual
General Meeting of Shareholders.
The Plan will be introduced, in light of the basic policy regarding the concept of persons who control
the decisions on MPM’s financial and business policies (meaning the basic policy defined in the main
paragraph of Article 118, item 3 of the Ordinance for Enforcement of the Companies Act; hereinafter
the “Basic Policy”), in order to prevent the decision on MPM’s financial and business policies frombeing decided by inappropriate persons, as well as to maintain and improve MPM’s corporate value
and the shareholders’ common interests. The Plan shall become effective if the approval of theshareholders is obtained.
The Basic Policy and the Plan are as described below, and the necessity of the Basic Policy andmajor amendments to the Current Plan are as follows.
Necessity of the Basic
If a large-scale purchaser emerges, the Basic Policy is necessary to
Policysecure time and provide information for shareholders to make anappropriate decision on whether or not the large-scale purchaser
will contribute to MPM’s corporate value and the common interestsof its shareholders.
Major amendments to the
It is specified that when countermeasures are implemented, aCurrent Plan
general meeting of shareholders may be held in order to confirm theshareholders’ intention.
1. The Basic Policy(1) Contents of the Basic Policy
MPM considers that the concept of MPM’s shareholders should be decided through free trade in themarket. Therefore, MPM also considers that whether or not to accept a proposal of a purchase which
would accompany a transfer of control of MPM should be finally decided by the intention of theshareholders.
However, MPM believes that the Large-Scale Purchase (defined in 3(2)(a) below; hereinafter thesame shall apply) of MPM’s shares may be assumed to include those which may not be appropriate
from the perspective of maximizing MPM’s corporate value and the shareholders’ common interests.
Accordingly, on one hand, we consider that it is our duty to maximize our corporate value andshareholders’ common interests by returning the profits generated by MPM to our shareholders, andthat it is the principle to be supported by persons who become MPM’s shareholders through free tradein the market. However, on the other hand, it is our Basic Policy that, if there is a risk that MPM’s
corporate value or our shareholders’ common interests as described above could be damaged due tothe acquisition of MPM’s shares with voting rights accounting for 20% or more of the total voting
rights of MPM (hereinafter, the “Controlling Shares”) by a person who aims to acquire the Controlling
Shares and a person from the person’s group (hereinafter, the “Acquirer”), then to the extent permitted
by laws and regulations as well as the Articles of Incorporation, we will take appropriate measures in15

order to maintain and improve MPM’s corporate value and the shareholders’ common interests,
assuming that the Acquirer is inappropriate as a person who controls the decision on MPM’s financial
and business policies.
(2) Reasons for maintaining the Basic Policy
The MPM Group has been doing business based on its management resources, including its humanresources, with experience and expert knowledge which the Group has developed and evolved together
with its customers for many years, the trust that the Group has built, and the close relationship with its
clients and various other stakeholders, with “Live up to the trust of its customers in the world market,”“Be always on the leading edge of technology” and “Contribute to preserving the global environmentand creating a recycling society” as the corporate philosophy. Each of these management resources
has know-how and brand image that have been cultivated for many years, and has generated additional
values by functioning together.
Meanwhile, these days, with the development of new legal systems, and changes in capital market
environment, economic structure, and corporate culture as a backdrop, there has been a trend of forcing
acquisition of large quantities of shares unilaterally, without obtaining any consent of the managementof a target company. In certain instances, the possibility of the occurrence of situations, such as
maintenance and enhancement of MPM’s corporate value based on the management resources set forth
above being hindered, cannot be ruled out.
Given that situation, it is necessary for MPM to always consider that an Acquirer may appear.
Originally, MPM does not have negative opinions about all types of acquisition of Controlling
Shares.
On the back of the circumstances as described above, MPM decided to maintain the Basic Policy
as described in (1) above.
2. MPM’s initiatives to contribute to the realization of the Basic Policy(1) Initiatives to improve its corporate value
Currently, MPM has launched a new "Medium-term Management Plan(FY2023/3-FY2025/3)," andis transforming the company toward the creation of a Creation of New MPM Group under the Basic
Principle of (i) Strengthen our earing capacity by “selection and concentration” strategies and“expansion of new business,” (ii) “Contribution to green society, and (iii) “Organizational change toimprove sustainability”. This "Medium-term Management Plan(FY2023/3-FY2025/3)" incorporates
measures to transform the business portfolio and become carbon neutrality from a medium- to longterm perspective, and was formulated based on the ideal future image of the MPM Group. Based on
this plan, MPM is working to enhance our corporate value.
(2) Initiatives for sustainability
Also aiming to contribute to the realization of a sustainable society in the aforementioned new midterm management plan, the Group is working on sustainability promotion activities by establishing
the Sustainability Promotion Committee and assigning a director in charge, in order to growsustainably by creating social values and contribute to a sustainable society through its business.
(3) Strengthening and enhancement of corporate governance
MPM is making efforts to strengthen its corporate governance by establishing the Basic Policies on
Corporate Governance and setting up the Nomination and Remuneration Committee, introducing
performance-based stock compensation, reviewing the structure of the Board of Directors andenhancing the effectiveness assessment of the Board of Directors based on the Basic Policies.
163. Contents of the Plan (measures to prevent the decisions on MPM’s financial and business policies
from being controlled by persons deemed inappropriate under the Basic Policy)(1) Purposes of continuing with the takeover defense measures under the Plan
As mentioned in the above 1., MPM considers it necessary to take certain measures against theAcquirer, in some cases. However, MPM, as a listed company, believes that, in principle, a decisionon whether or not to sell shares to the Acquirer, and the final decision on whether it is appropriate toentrust the management of MPM to the Acquirer, shall be left to each shareholder.
Nevertheless, for shareholders to make a proper decision, it is necessary that they have an accurate
understanding of MPM’s corporate value and the sources generating such value, upon careful reviewof the characteristics of business inherent to MPM as outlined above, as well as the history,
management resources, and current management policy of the Group as a prior condition. It is easy tomake assumptions about cases where information provided by the Acquirer alone would not be
sufficient to figure out what kind of potential effects the acquisition of Controlling Shares by the
Acquirer would be exerted on MPM’s corporate value and the sources generating such value. MPM
believes that information supplied by MPM’s Board of Directors, who have adequate understandingof the characteristics of business inherent to MPM, as well as its evaluation and opinions on an
acquisition of Controlling Shares by such Acquirer, or a new proposal by MPM’s Board of Directors
upon receipt of the evaluation and opinions in some cases, shall be reviewed by shareholders in orderfor them to make a proper decision.
Accordingly, MPM considers that securing sufficient time for shareholders to analyze and examine
this multilateral information is critically important.
From these perspectives, MPM requests persons who intend to conduct a Large-Scale Purchase or
who are currently conducting a Large-Scale Purchase (hereinafter, the “Large-Scale Purchaser”) to
provide the necessary information regarding such Large-Scale Purchase in advance, and to secure time
for consideration and negotiation. In doing so, it enables shareholders to make an appropriate decisionon whether or not to accept such Large-Scale Purchase. It also enables MPM’s Board of Directors to,upon receiving a recommendation from the Independent Committee (defined in (2)(e) below;
hereinafter the same shall apply), present to shareholders its opinions on whether or not to accept suchproposal, or an alternative proposal, or enables the Board of Directors to negotiate with the LargeScale Purchaser for the benefit of the shareholders. Thereby, MPM concluded that it is necessary to
make the amendments to the plan in 2019 into the Plan, and to continue with the takeover defense
measures under the Plan as one of the measures to prevent decisions on MPM’s financial and business
policies from being controlled by persons deemed inappropriate under the Basic Policy.
The persons deemed inappropriate under the Basic Policy mentioned above mean, specifically,certain Large-Scale Purchasers determined by MPM’s Board of Directors according to prescribed
procedures (Large-Scale Purchasers who violate the Plan, and a Large-Scale Purchaser who is an
Abusive Purchaser (defined in (2)(f)A(ii) below)), joint holders thereof, persons in special
relationships, and persons deemed by MPM’s Board of Directors, upon receipt of advice from the
Independent Committee, as being substantially controlled by such given persons and acting jointly orin concert with such given persons, or the like (hereinafter, the “Person(s) Who Falls Under
Exceptional Reasons”.)
Needless to say, regarding the continuation of the takeover defense measures under the Plan, it isdesirable to confirm the shareholders’ will. Therefore, MPM will confirm the shareholders’ will
regarding the continuation of the takeover defense measures under the Plan by submitting this agenda
to the Annual General Meeting of Shareholders.
For the reasons mentioned above, MPM’s Board of Directors decided to submit an agenda to seek
17

approval of the continuation of the takeover defense measures under the Plan, to the Annual General
Meeting of Shareholders.
At present, MPM is not aware of any indications of a specific Large-Scale Purchase.
The status of MPM’s major shareholders as of March 31, 2022 is as written on page 44 of theBusiness Report. Oji Holdings Corporation, MPM’s largest shareholder, holds a 32.9% stake in MPM.
As Oji Holdings Corporation has established a friendly relationship with MPM as a stable shareholderof MPM, based on a capital and business alliance, the Plan is not applicable to Oji Holdings
Corporation at this time. On the other hand, the distribution of our shareholders is widespread,especially that of individual shareholders, and we are promoting the reduction of cross-shareholdings.
Under these circumstances, we believe that a Large-Scale Purchase, against MPM’s corporate value
and against the common interests of shareholders, may be conducted.
(2) Contents of the Plan
Detailed contents of the Plan are as follows.
(a) Definition of the Large-Scale Purchase against which countermeasures shall be implemented
When an act that falls under or is likely to fall under any of the following cases (i) through (iii)(excluding acts that are approved in advance by the Board of Directors of MPM) (hereinafter,
collectively referred to as “Large-Scale Purchase”) has been carried out or is about to be carried out,
the countermeasures under the Plan may be implemented.
(i) Any purchase or other type of acquisition of share certificates, etc. (Note 1) issued by MPM
where the holding ratio (Note 2) of share certificates, etc. of a specific shareholder of MPM
accounts for 20% or more(ii) Any purchase or other type of acquisition of share certificates, etc. (Note 3) issued by MPM
where the combined total of a holding ratio (Note 4) of share certificates, etc. by a specificshareholder (Note 5) of MPM and that by persons in a special relationship with a specificshareholder of MPM accounts for 20% or more (Note 6)(iii) Consent or other type of act, irrespective of whether an act as stated in (i) or (ii) above has been
implemented or not, between a specific shareholder of MPM and other shareholder(s) (including
cases where the number of the other shareholders is plural; hereinafter the same shall apply tothis (iii)) of MPM, which makes the said other shareholder(s) fall under the category of a joint
holder of shares held by the said specific shareholder (Note 7), or any act (Note 8) which
establishes a relationship between the said specific shareholder and the said other shareholder(s)in which either party effectively controls the other, or all parties act jointly or cooperatively (Note9) (provided, however, it shall apply only when the total ratio of share certificates, etc. issued by
MPM held by the said specific shareholder and the said other shareholder(s) accounts for 20% or
more)(Note 1) Refers to share certificates, etc. as defined in Article 27-23, Paragraph 1 of the Financial
Instruments and Exchange Act. Hereinafter, the same shall apply, unless otherwiseprescribed.
(Note 2) Refers to the share certificates, etc. holding ratio as defined in Article 27-23, Paragraph 4 of
the Financial Instruments and Exchange Act. For the total number of shares issued by MPM
that is used in the calculation of such holding ratio of share certificates, etc., MPM may referto the most recent information made public by MPM.
(Note 3) Refers to share certificates, etc. as defined in Article 27-2, Paragraph 1 of the Financial
Instruments and Exchange Act. Hereinafter, the same shall apply in (ii).
(Note 4) Refers to the holding ratio of share certificates, etc. as defined in Article 27-2, Paragraph 8
18

of the Financial Instruments and Exchange Act. Hereinafter, the same shall apply. For the
total number of voting rights of MPM that is used in the calculation of such holding ratio ofshare certificates, etc., MPM may refer to the most recent information made public by MPM.
(Note 5) Refers to persons in a special relationship as defined in Article 27-2, Paragraph 7 of the
Financial Instruments and Exchange Act.
(Note 6) Includes purchase and other types of acceptance of transfers for value, and cases classified
as similar to acceptance of transfer for value as provided for in Article 6, Paragraph 3 of theOrder for Enforcement of the Financial Instruments and Exchange Act.
(Note 7) Refers to joint holders defined in Article 27-23, Paragraph 5 of the Financial Instruments
and Exchange Act. Hereinafter, the same shall apply.
(Note 8) Criteria to determine whether or not “a relationship between the said specific shareholder
and the said other shareholder(s) that one party substantially controls the other party or bothparties act jointly or in a coordinated manner” has been established is based on the creationof any relationship in terms of new investment, business partnership, transaction orcontractual agreement, concurrent positions served by Officers, funding, credit granting,substantive stake with regard to MPM’s share certificates, etc., through derivatives andlending shares and others, as well as direct or indirect impacts on MPM caused by the said
specific shareholder and the said other shareholder(s), and others.
(Note 9) Whether or not an act prescribed in (iii) above has been conducted shall be reasonably
determined by MPM’s Board of Directors by following recommendations of the
Independent Committee. MPM’s Board of Directors may request that its shareholders
provide necessary information to the extent deemed necessary for determining whether or
not the act falls under the criteria described in (iii) above.
(b) Submission of Statement of Intent
Prior to the commencement or implementation of a Large-Scale Purchase, MPM will have theLarge-Scale Purchaser submit to MPM’s Board of Directors a written form with the signature, or nameand seal of the representative of the Large-Scale Purchaser, to the effect that the Large-Scale Purchaser
will pledge to comply with the procedures prescribed in the Plan (hereinafter, the “Large-Scale
Purchase Rules”) and a certificate of eligibility of the representative who signed or sealed (hereinafter,
collectively referred to as “Statement of Intent”) in a format separately prescribed by MPM andaddressed to the Representative Director of MPM. When the Representative Director of MPM receives
such Statement of Intent, he or she should promptly submit it to MPM’s Board of Directors and theIndependent Committee.
In addition to the pledge to comply with the Large-Scale Purchase Rules, a Statement of Intent must
contain the name of the Large-Scale Purchaser, the address or location of its headquarters or office,etc., the governing law of incorporation, the name of the representative, the contact person in Japan,
the number of MPM’s share certificates, etc. currently held by the Large-Scale Purchaser, the status of
the Large-Scale Purchaser’s trading of MPM’s shares during 60 days prior to the submission of theStatement of Intent, and a summary of the Large-Scale Purchase plan. Only the Japanese language
shall be used in a Statement of Intent.
When a Statement of Intent is submitted by a Large-Scale Purchaser, MPM will disclose suchmatters deemed appropriate by MPM’s Board of Directors or the Independent Committee inaccordance with the applicable laws and regulations (hereinafter, collectively meaning the Companies
Act and the Financial Instruments and Exchange Act, and the rules, cabinet orders, cabinet officeordinances, ministerial ordinances, and the like regarding those acts, and the rules of the financial
19

instruments exchange on which MPM’s shares, etc. are listed; hereinafter the same shall apply) in atimely and appropriate manner.
(c) Requesting Large-Scale Purchaser to provide information
MPM will have a Large-Scale Purchaser provide information concerning the matters stated below
from (i) to (ix) (hereinafter, collectively, the “Large-Scale Purchase Information”) to MPM’s Board of
Directors within five business days (not counting the first day) of the day on which MPM’s Board of
Directors receives a Statement of Intent. When MPM’s Board of Directors receives Large-Scale
Purchase Information, it shall promptly submit it to the Independent Committee.
When MPM’s Board of Directors judges that because information initially provided by a LargeScale Purchaser is not sufficient, it is difficult for shareholders to appropriately determine whether or
not to accept the Large-Scale Purchase, and for MPM’s Board of Directors and the Independent
Committee to form its opinions of approval or disapproval of such Large-Scale Purchase (hereinafter,“forming opinions”) or for the Board of Directors to develop Alternative Proposals (hereinafter,“developing alternative proposals”) and to present them to shareholders in an appropriate manner,
MPM’s Board of Directors, after establishing a reasonable deadline for additional information
submission, may request that the Large-Scale Purchaser at any time submit additional informationnecessary in order to enable shareholders to make a proper decision and to enable the Board of
Directors of MPM and the Independent Committee to form opinions and develop alternative proposals
upon disclosing to shareholders the established specific period and reasons for requiring suchreasonable specific period. However, in that case, MPM’s Board of Directors shall respect the
Independent Committee’s opinions as much as possible.
In addition, when MPM’s Board of Directors determines that the provision of Large-Scale Purchase
Information is completed, MPM shall disclose such completion in accordance with the applicable laws
and regulations in a timely and appropriate manner. Furthermore, pursuant to the decision made by
MPM’s Board of Directors, MPM shall disclose information deemed necessary for shareholders tomake an appropriate determination on whether or not to accept such Large-Scale Purchase among
Large-Scale Purchase Information, when appropriate after the reception thereof, in accordance withthe applicable laws and regulations in a timely and appropriate manner.
Only the Japanese language shall be used when providing Large-Scale Purchase Information, orotherwise giving a notice to or contacting MPM pursuant to the Large-Scale Purchase Rules.
(i)
The outline (including specific name, capital structure, financial position, and the presence orabsence of breaches of laws and regulations over the past ten years (outlines thereof, if present)
as well as officers’ names and the like) of the Large-Scale Purchaser and its group companies,
etc. (in the case where the Large-Scale Purchaser is a fund, they include major partners,
investors, and other members; hereinafter, the same shall apply).
(ii) Status of the internal control system of the Large-Scale Purchaser and its group companies, etc.
(including the group internal control system)(iii) Objectives, method, and details of the Large-Scale Purchase (including type and price ofconsideration for the Large-Scale Purchase, timing of the Large-Scale Purchase, structure of
the related transactions, legality of the method used for the Large-Scale Purchase, feasibility of
the Large-Scale Purchase and related transactions)(iv) Basis for calculating the consideration for the Large-Scale Purchase (including facts andassumptions which form the premise of the calculation, calculation method, numericalinformation used in the calculation, and the amount of synergies anticipated to be generated
through a series of transactions related to the Large-Scale Purchase and bases for calculation
20

thereof)
Financial support for the Large-Scale Purchase (including the specific names of funds providers(including substantive providers), financing methods, and the specific contents of related
specific transactions)(vi) Management policies, business plans, capital policies, and dividend policies, etc., which areintended for MPM and the Group, and policies for dealing with and treating employees,
business partners, clients of MPM and the Group, and local public bodies and other stakeholdersof MPM after the Large-Scale Purchase(vii) Restricted matters under the domestic or overseas laws and regulations, etc. that are possible toapply to the Large-Scale Purchase, and the possibility of the acquisition of approvals, licenses,
or permissions, etc. under anti-trust laws or other laws and regulations, etc. to be acquired fromdomestic or overseas governments or third parties(viii) Possibility of maintaining the licenses or permissions under domestic or overseas various laws
and regulations, etc. necessary in order to conduct the business of the Group after thecompletion of the Large-Scale Purchase, and the possibility of the compliance with restrictions,
including domestic and overseas various laws and regulations, etc.
(ix) Other information, which was reasonably deemed necessary by MPM’s Board of Directors or
the Independent Committee(v)(d) Setting of the Board of Directors’ Evaluation Period, etc.
The Board of Directors of MPM will set the period, defined in (i) or (ii) below (in either case, theperiod shall start from the date on which MPM disclosed that the Board of Directors of MPM hasdetermined that the provision of the Large-Scale Purchase Information has completed; not counting
the first day), as the period for evaluation, examination, forming opinions, developing alternative
proposals, and conducting negotiations with a Large-Scale Purchaser by the Board of Directors of
MPM (hereinafter, the “Board of Directors Evaluation Period”), depending on the content of theLarge-Scale Purchase disclosed by the Large-Scale Purchaser.
Unless otherwise provided in this Plan, the Large-Scale Purchase shall be commenced only after
the elapse of the Board of Directors’ Evaluation Period. Note that the Board of Directors’ Evaluation
Period has been set by taking into account factors such as the difficulties in evaluating or examining
MPM’s business activities and the level of difficulty in forming opinions and developing alternative
proposals.
(i) In the case of purchase of all MPM’s shares by tender offer in which the consideration will be
paid entirely in cash (Japanese yen): maximum 60 days(ii) In any other cases of the Large-Scale Purchase except for the case stated in (i): maximum 90 days
During the Board of Directors’ Evaluation Period, the Board of Directors of MPM shall evaluate
and examine, form opinions, and develop alternative proposals on, and negotiate with the Large-Scale
Purchaser regarding the contemplated Large-Scale Purchase, from the viewpoint of protecting andenhancing the corporate value of MPM and the common interests of its shareholders, based on the
Large-Scale Purchase Information provided by the Large-Scale Purchaser. In performing suchprocedures, the Board of Directors of MPM shall seek advice, as needed, from third-party external
specialists (financial advisors, lawyers, certified public accountants, and certified public tax accounts,etc.) who are independent from MPM’s Board of Directors. All the expenses incurred for suchprocedures shall be borne by MPM to the extent reasonable.
In cases where it is inevitable that the Board of Directors cannot reach a resolution determining
21

whether or not to implement the countermeasures within the Board of Directors Evaluation Period due
to reasons, including failure of the Independent Committee to make recommendations as stated in (f)below within the Board of Directors Evaluation Period, then the Board of Directors of MPM may
extend the period up to 30 days (not counting the first day) to the extent necessary, based on the
Independent Committee’s recommendations (the same shall apply to re-extensions; however, theperiod may be re-extended only up to twice). If the Board of Directors of MPM decides to extend theBoard of Directors’ Evaluation Period, MPM will disclose the resolved specific period and the reason
for the necessity of such specific period, in accordance with the applicable laws and regulations, in atimely and appropriate manner.
(e) Establishment of the Independent Committee
MPM has established the Independent Committee comprising three or more independent outside
directors and independent outside corporate auditors (including substitutes for them) and outside
experts who are independent from the executive management team of MPM (hereinafter, the“Independent Committee”), with the aim to prevent arbitrary decisions by the Board of Directors of
MPM on the implementation, etc. of the Current Plan. MPM will maintain the Independent Committee
in the Plan.
The Independent Committee may obtain advice and the like, as necessary, from outside experts(financial advisors, lawyers, certified public accountants, and certified public tax accountants, etc.)
who are independent from the Board of Directors of MPM and the Independent Committee. All the
expenses incurred for obtaining the advice shall be borne by MPM, to the extent reasonable.
The name and brief history of each member of the Independent Committee as of the beginning of
the continued takeover defense measures are as described in Appendix 1.
Resolutions of the Independent Committee shall be passed by affirmative votes of a majority of all
the members, where all the current members of the Independent Committee are present. However, if
any members of the Independent Committee are unable to be present, or if there are any otherunavoidable reasons, resolutions of the Independent Committee shall be passed by affirmative votes
of a majority of all the members, where a majority of the members are present.
(f) Procedures for recommendations of the Independent Committee and resolutions by the Board of
Directors of MPM and a General Meeting of Shareholders to Confirm the Shareholders’ Intention
a. Recommendations of the Independent Committee
The Independent Committee shall make recommendations to the Board of Directors of MPM
regarding the Large-Scale Purchase, in accordance with (i) through (iii) below, within the Board of
Directors’ Evaluation Period (including any extended period, if any).
(i) When the Large-Scale Purchase Rules are not complied with
If the Large-Scale Purchaser violates the Large-Scale Purchase Rules in any material respect,and such violation is not corrected within five business days (not counting the first day) after the
Board of Directors of MPM gives such Large-Scale Purchaser a written request to correct such
violation, then the Independent Committee, in principle, will recommend that the Board of
Directors of MPM implement a countermeasure against the Large-Scale Purchase, except where itis clearly necessary to refrain from implementing the countermeasure in order to protect andenhance the corporate value of MPM and the common interests of its shareholders, or when any
other particular circumstances exist. If such recommendation is made, MPM shall disclose theIndependent Committee’s opinion, reasons therefor, and such other information as deemed
appropriate, in accordance with the applicable laws and regulations, in a timely and appropriate
22manner.
Even after the Independent Committee has recommended that the Board of Directors of MPM
implement a countermeasure, if the Large-Scale Purchase is withdrawn, or if otherwise the facts
and other circumstances that formed the basis for such recommendation are altered, then the
Independent Committee may recommend that the Board of Directors of MPM discontinue
implementing the countermeasures, or make other recommendations.
(ii) When the Large-Scale Acquisition Rules are complied with
When the Large-Scale Purchaser complies with the Large-Scale Purchase Rules, theIndependent Committee shall, in principle, recommend that the Board of Directors of MPM refrainfrom implementing the countermeasure against the Large-Scale Purchase.
However, even if the Large-Scale Purchase Rules are complied with, the Independent Committee
will recommend that the Board of Directors of MPM implement the countermeasure against such
Large-Scale Purchase if such Large-Scale Purchaser is recognized to be a person having any of thecircumstances set out in (a) to (k) below (hereinafter, collectively referred to as the “Abusive
Purchaser”) and if it deems it appropriate to implement the countermeasures against such LargeScale Purchase:(a) When the Large-Scale Purchaser does not have an intention of actually participating in the
management of MPM, but attempts a takeover of MPM’s share certificates, etc., for the
purpose of increasing the price of the shares and making parties related to MPM buy back theshares at an inflated stock price (a so-called “green mailer”), or when the main purpose of
acquiring MPM’s share certificates, etc. is to acquire a short-term margin(b) When the main purpose of participating in the management of MPM is to temporarily control
the management of MPM, and cause it to transfer to the Large-Scale Purchaser or its groupcompanies, etc., MPM’s intellectual property, know-how, trade secrets, or major business
partners and clients, etc., which are essential to MPM’s business operations(c) When the Large-Scale Purchaser is acquiring MPM’s share certificates, etc. with the intent of
inappropriately utilizing MPM’s assets as collateral or funds for repayment of the obligationsof such Large-Scale Purchaser or its group companies, etc., after taking control over the
management of MPM(d) When the main purpose of participating in the management of MPM is to temporarily control
the management of MPM, and cause it to sell or otherwise dispose of its real estate properties,
securities, and other high-priced assets which are irrelevant to MPM’s business for the time
being, and then cause it to distribute high dividends temporarily from the profits of suchdisposals, or to sell the shares at a high price, taking advantage of the opportunity from thesudden rise in share price created by the temporarily high dividends(e) When the Large-Scale Purchaser shows no particular interest in or gets involved in the
management of MPM, and when, after it acquires MPM’s shares, by using a series of tricks,
the Large-Scale Purchaser tries to acquire profits from sales of MPM’s shares to MPM itself
or third parties, exclusively in a short or middle term, and when the Large-Scale Purchaser
seeks its own profits earnestly, finally intending to dispose of MPM’s assets(f) When the conditions proposed by the Large-Scale Purchaser for the acquisition of MPM’s
share certificates, etc. (such conditions include, but are not limited to, the type and amount ofand the calculation basis for the consideration of the purchase, the content, timing, method, thepresence or absence of illegality, and feasibility) are determined to be insufficient or inadequate,
on reasonable grounds, in view of MPM’s corporate value(g) When the method of takeover proposed by the Large-Scale Purchaser is such an oppressive23

method that the shareholders’ opportunity or freedom for decision may be restricted due to thestructure of such method, as exemplified by a two-stage purchase (purchase of sharecertificates, etc. in a manner wherein the terms of the second-stage purchase are set moredisadvantageously or are unclear, or otherwise concerns of the future liquidity of MPM’s sharecertificates, etc. are raised by suggesting delisting, etc. in the event all of MPM’s sharecertificates, etc. are not purchased during the first-stage of purchase and the shareholders are
thereby effectively coerced into accepting the purchase) and partial tender offer (a tender offer
to purchase some, but not all, of the share certificates, etc. of MPM)(h) When the Large-Scale Purchaser’s acquisition of control of MPM is expected to causesignificant damage to the corporate value of MPM, as a result of destruction or impairment of
the relationships with not only shareholders but also clients and employees, and otherstakeholders of MPM, which are the source of the corporate value, or there are reasonablegrounds to determine that the protection and enhancement of MPM’s corporate value may beseriously hindered; or when MPM’s corporate value in the event of its control being acquiredby the Large-Scale Purchaser, is determined to be clearly lesser than MPM’s corporate value
in the event of its control not being acquired by the Large-Scale Purchaser, if comparing its
medium to long-term corporate value of both assumed cases(i) The fact of the Large-Scale Purchaser’s acquisition of control of MPM itself would causesignificant damage to the corporate value of MPM, in such cases where MPM would lose animportant business partner(j) When there are reasonable grounds to determine that the Large-Scale Purchaser isinappropriate as the controlling shareholder of MPM, from the viewpoint of public order andmorals, in such cases as where any of the management team members, major shareholders, orinvestors of the Large-Scale Purchaser has an association with antisocial forces, or terrorismrelated organizations(k) Other cases which are equivalent to cases stated in (a) through (j) above, and which are
determined that the corporate value of MPM or the common interests of its shareholders would
be significantly damaged
Note that the disclosure procedures relating to such recommendation, or the procedures relating to
the subsequent further recommendation, shall be in accordance with (i) above.
(iii) Other recommendations, etc. by the Independent Committee
In addition to the above, the Independent Committee may recommend matters necessary from theviewpoint of maximizing MPM’s corporate value or the shareholders’ common interests, as necessary,to the Board of Directors of MPM, or may recommend discontinuation or suspension of
implementation of countermeasures, where permitted by certain laws and regulations, etc.
b. Resolution by the Board of Directors of MPM
The Board of Directors of MPM shall make a resolution as to whether or not to implement or
discontinue the countermeasure, or other necessary resolutions, during the Board of Directors
Evaluation Period from the viewpoint of protecting and enhancing the corporate value of MPM andthe common interests of its shareholders based on the Independent Committee’s recommendations,while giving maximum respect to these recommendations.
If such resolutions are passed, MPM will disclose the opinion of the Board of Directors of MPM,
the reasons therefor, and such other information as deemed appropriate in accordance with the24applicable laws and regulations in a timely and appropriate manner.
c. Resolution by a General Meeting of Shareholders to Confirm the Shareholders’ Intention
If the Board of Directors of MPM has determined that it should go through procedures to confirm
the shareholders’ intention when it determines whether or not to implement the countermeasure under
the Plan and if the Board of Directors of MPM deems it reasonable to implement the countermeasurein the case where the Large-Scale Purchaser complies with the Large-Scale Purchase Rules, the Boardof Directors of MPM shall convene a general meeting of shareholders to confirm the shareholders’intention as soon as possible. Procedures for convening the general meeting of shareholders to confirm
the shareholders’ intention and the method for the shareholders to exercise their voting rights shall bein compliance with the procedures for convening and voting at the annual general meeting ofshareholders or the extraordinary general meeting of shareholders in accordance with laws andregulations and the Articles of Incorporation of MPM.
In these cases, the Large-Scale Purchase shall be conducted after the proposal to implement
countermeasures has been rejected at the general meeting of shareholders to confirm the shareholders’intention and the said general meeting of shareholders to confirm the shareholders’ intention has closed.
If the proposal to implement countermeasures has been passed at the general meeting of shareholders
to confirm the shareholders’ intention, the Board of Directors of MPM shall make a resolution on theimplementation of countermeasures against the Large-Scale Purchaser. If the proposal to implement
countermeasures has been rejected at the general meeting of shareholders to confirm the shareholders’intention, countermeasures against the Large-Scale Purchaser shall not be implemented.
The disclosure procedures for such resolution at the general meeting of shareholders to confirm theshareholders’ intention shall be in accordance with those in b above.
(g) Specific contents of the countermeasure
The countermeasure to be implemented by MPM against the Large-Scale Purchase under the Plan
is assumed to be the countermeasure by way of allotment of share options without contribution
provided in Article 277 and thereinafter of the Companies Act (hereinafter, the stock options to be
allotted shall be referred to as the “Share Options”), in principle. However, if it is determined that theimplementation of other countermeasures permitted under the Companies Act, other laws andregulations, and the Articles of Incorporation of MPM is appropriate, such other countermeasures may
be taken.
The outline of the allotment of Share Options without contribution as a countermeasure against theLarge-Scale Purchase is as set out in Appendix 2, and when the Share Options are actually allotted
without contribution, MPM may set the exercise period, conditions for exercise, terms of acquisition,etc. at its discretion in view of its effectiveness as a countermeasure against the Large-Scale Purchaseand reasonableness as a countermeasure, including (i) a condition for exercise that prohibits the
Persons Who Fall Under Exceptional Reasons from exercising their Share Options, and (ii) terms ofacquisition that, when MPM acquires part of the Share Options, allow MPM to only acquire the Share
Options held by shareholders other than the Persons Who Fall Under Exceptional Reasons, as well as
terms of acquisition that allow MPM to acquire the Share Options held by shareholders other than the
Persons Who Fall Under Exceptional Reasons with common shares of MPM as consideration whileallowing MPM to acquire the Share Options held by the Persons Who Fall Under Exceptional Reasons
with other Share Options to which certain conditions for exercise or terms of acquisition are attached
as consideration.

25

4. Continuation of takeover defense measures under the Plan, and duration, continuance, andabolishment of, and amendment to the Plan, etc.
The duration of the Plan shall expire at the closing of the Annual General Meeting of Shareholders
regarding the last business year which ends within three years after this Annual General Meeting of
Shareholders. However, even if prior to the expiration of such duration, (i) if a general meeting ofshareholders of MPM adopts a resolution to abolish the Plan, or (ii) if the Board of Directors of MPM
adopts a resolution to abolish the Plan, then the Plan shall be abolished at the time. Therefore, the Plan
may be abolished at any time according to the shareholders’ will.
From this year, MPM’s Board of Directors will consider whether to continue, abolish, or amend thePlan, if necessary, at the first meetings of the Board of Directors to be held after the conclusion of
MPM’s Annual General Meeting of Shareholders. If necessary, the Board of Directors will makenecessary resolutions.
Further, from the viewpoint of protecting and enhancing the corporate value of MPM and thecommon interests of its shareholders, MPM’s Board of Directors may also review or amend the Plan,
if necessary, to the extent not running counter to the entire purpose of the Plan, as well as to the extent
reasonably deemed necessary as a result of amendments to laws and regulations, etc., or their
guidelines (including changes of laws and regulations, etc., and the establishment of new laws andregulations, etc., which succeed to the former laws and regulations, etc.), or changes of theinterpretation or operation thereof, or changes of taxation systems, judicial precedents, or the like,after obtaining the approval of the Independent Committee, on an occasion other than the first meetingof the Board of Directors to be held after the conclusion of MPM’s Annual General Meeting of
Shareholders.
In the event that a resolution is adopted for the abolishment, amendment, etc. of the Plan, MPM will
disclose such matters as the Board of Directors of MPM or the Independent Committee finds
appropriate in accordance with the applicable laws and regulations in a timely and appropriate manner.
5. Impact on shareholders and investors(1) Impact on shareholders and investors when the Current Plan is revised into the Plan as a result of
the Amendments
At the time when the Current Plan is revised into the Plan as a result of the Amendments, theallotment of Share Options without contribution itself will not be implemented. Therefore, the Plan or
the Amendments will not have any direct, specific impact on the legal rights and economic interestsof the shareholders and investors when they take effect.
(2) Impact on shareholders and investors at the time of allotment of the Share Options without
contribution
When the Board of Directors of MPM allots the Share Options without contribution as acountermeasure against the Large-Scale Purchase, the per share value of MPM’s shares held by theshareholders would be diluted, but the value of all shares of MPM held by the shareholders will not
be diluted. Therefore, the Board of Directors of MPM does not expect that the allotment of the Share
Options will have any direct, specific impact on the legal rights and economic interests of theshareholders and investors.
However, with respect to the Persons Who Fall Under Exceptional Reasons, if the countermeasureis implemented, it may in the end have some impact on their legal rights or economic interests.
In addition, if the resolution of the allotment of the Share Options without contribution is adopted
to serve as a countermeasure and the allotment of the Share Options without contribution are26

determined subsequently, the investors who have sold or purchased MPM’s shares on the assumptionthat the per share value of MPM’s shares would be diluted may suffer an unexpected loss due to stock
price movement or the like.
Details of the procedures for the allotment of Share Options without contribution will be disclosed
in a timely and appropriate manner in accordance with applicable laws and regulations when theseprocedures are actually required. Therefore, please check their contents.
6. Rationality of the Plan
(1) Enhancement of requirements by the Guidelines Regarding Takeover Defense for the Purposesof Protection and Enhancement of Corporate Value and the Common Interests of Shareholders
This Plan fulfills the three principles ((i) the principle of protection and enhancement of corporate
value and the common interests of shareholders, (ii) the principle of prior disclosure and shareholder
intent, and (iii) the principle of ensuring necessity and appropriateness) required by the “Guidelines
Regarding Takeover Defense for the Purposes of Protection and Enhancement of Corporate Value andthe Common Interests of Shareholders” published by the Ministry of Economy, Trade and Industry
and the Ministry of Justice on May 27, 2005.
(2) Takeover defense is neither a dead-hand takeover defense nor a slow-hand takeover defense
The Plan is neither a dead-hand takeover defense (takeover defense the implementation of whichcannot be prevented even if a majority of the members of the Board of Directors are replaced) nor aslow-hand takeover defense (takeover defense that requires time to prevent implementation due to theinability to replace the members of the Board of Directors at once) because the Plan can be abolishedat any time by a resolution of the general meeting of shareholders of MPM or its Board of Directors
composed of Directors elected at a general meeting of shareholders, as described in 4 above.

27

(Appendix 1)
Names and Brief Histories of the Independent Committee Members<Name> Yoshihiro Kataoka<Brief History> Born on July 30, 1954
April 1980:
Registered as an attorney-at-law
June 1990:
Partner of Kataoka & Kobayashi (up to date)June 2007:
Member of the Independent Committee of MPM (up to date)June 2019:
Outside Director of MPM (up to date)<Name> Kazunori Shinohara<Brief History> Born on September 25, 1954
April 1979:
Joined NH Foods Ltd.
June 2015:
Director, Executive Officer, General Manager of Affiliated Companies
Division, NH Foods
April 2016:
Director, Managing Executive Officer, General Manager of AffiliatedCompanies Division, NH Foods
April 2017:
Representative Director and Vice President Executive Vice President,
NH Foods
Responsible for the Group business structural reforms
April 2018:
Representative Director and Vice President Executive Vice President,
NH Foods
Responsible for the Group structural reforms
June 2022:
Outside Director of MPM (scheduled to assume office on June 28)<Name> Somitsu Takehara<Brief History> Born on April 1, 1952
May 1982:
Registered as a certified public accountant
April 2005:
President of ZECOO Partners INC.
July 2006:
Temporary Accounting Auditor of MPM
June 2007:
Member of the Independent Committee of MPM (up to date)June 2016:
Outside Director of MPM (up to date)November 2017: Chairman of the Board of ZECOO Partners INC. (up to date)28

(Appendix 2)
Outline of the Case for Implementing Allotment of Share Options Without Contribution
1. Shareholders entitled to allotment
One share option shall be allotted without contribution for one share held by shareholders(excluding, however, the common shares of MPM held by MPM) stated or registered on the lastregister of shareholders as of the record date separately designated by the Board of Directors.
2. Class and number of shares to be delivered upon exercise of share options
The class of the shares to be delivered upon exercise of the share options shall be common shares.
One common share of MPM shall be delivered upon exercise of one unit of the share options.
3. Effective date of the allotment of share options without contribution
To be separately designated by the Board of Directors.
4. The amount of property to be contributed upon exercise of each share option
Contributions upon exercise of the share options are to be made in cash, and the amount of property
to be contributed upon exercise of each share option shall be the amount separately determined by the
Board of Directors within the extent from the lower limit of one yen up to the upper limit of one-halfof the market price of one common share of MPM.
5. Restriction on the transfer of share options
Acquisition of share options by transfer shall be subject to the approval of the Board of Directors.
6. Conditions for exercise of share options
Conditions for exercise of the share options shall be separately designated by the Board of Directors.
(Further, conditions for exercise in consideration of the effectiveness as a countermeasure against
Large-Scale Purchases may be added, such as the conditions for exercise which prohibit the Persons
Who Fall Under Exceptional Reasons from exercising their share options).
7. Acquisition of share options by MPM(1) At a meeting of the Board of Directors, MPM may establish terms of acquisition which allow MPM
to acquire, following the resolution of the Board of Directors, all of the share options, or only theshare options held by share option holders other than the Persons Who Fall Under Exceptional
Reasons, subject to certain events arising, such as the violation of the Large-Scale Purchase Rules
by the Large-Scale Purchaser, or upon the arrival of a certain date designated by the Board of
Directors. At a meeting of the Board of Directors, MPM may also establish the terms of acquisition
allowing MPM to acquire the share options held by the Persons Who Fall Under Exceptional
Reasons with other share options to which certain conditions for exercise or terms of acquisition
are attached as consideration.
(2) When MPM adds the aforementioned terms of acquisition, MPM shall formulate the terms ofacquisition with a view to establishing effective and adequate countermeasures against the LargeScale Purchase.

298. Events that cause acquisition of share options without contribution (events that cause abolishmentof countermeasures)
MPM may acquire all of the share options without contribution, if either of the following eventsoccurs:(a) If the approval is obtained by an ordinary resolution at the General Meeting of Shareholders of
MPM regarding a proposal of a Large-Scale Purchase by a Large-Scale Purchaser;(b) If the Independent Committee unanimously recommends the abolishment of a countermeasure; or(c) If other events separately designated by the Board of Directors occur.
9. Cooperation regarding the disposal of share options
If the Persons Who Fall Under Exceptional Reasons, who received an allotment of share options,
are no longer considered, on reasonable grounds, to be a threat to the corporate value of MPM or thecommon interests of its shareholders, MPM shall, subject to consultation with the Independent
Committee, cooperate to a reasonable extent with such Persons Who Fall Under Exceptional Reasonsin the disposal of the share options, or share options granted as consideration for acquiring such shareoptions, by such means as supporting the transfer thereof to a third party at a fair price as of thepurchase date (as calculated excluding the effect of an inflated market price as a result of being a targetof speculation). However, MPM shall have no obligation regarding such types of cooperation.
10. Exercise period of share options, etc.
Exercise period of, and other necessary matters regarding, the share options shall be separately
determined by the Board of Directors in consideration of the effectiveness as a countermeasure against
Large-Scale Purchases.

30

Reference: Conceptual Diagram of the Plan’s Flows

Emergence of a Large-Scale Purchaser

Non-compliance with theLarge-Scale Purchase Rules

Compliance with the Large-Scale Purchase Rules

Submission of the Statement of Intent and the provision of theLarge-Scale Purchase Information by the Large-Scale Purchaser

Evaluation period of the effectiveness of the Board of Directors
60days/90days
Examination by the Boardof Directors- Evaluation andexamination of thepurchase proposal- Forming opinions- Developing alternative
proposals- Negotiation

Recommendation not to
implement thecountermeasures, in principle
However, if the Large-Scale
Purchaser falls under an
Abusive Purchaser (3.(2)(f) A(ii) (a) through (k)),
recommendation to implement
the countermeasures

Independent Committee

Consultation

Independent Committee
Recommendation to implement
the countermeasures, in principle

Board of Directors
Not falling under reasonsfor implementation

Board of Directors

Falling under reasonsfor implementation

Determining that procedures forconfirming the shareholders’intention should be taken

General meeting of shareholders to
confirm the shareholders’ intention

Countermeasures not to be implemented /to be cancelledCountermeasures to be implemented

31

Business Report
From April 1, 2021 to March 31, 2022

1. Current Status of the Corporate Group(1) Business Developments and Results
During the fiscal year ended March 31, 2022, economic activities showed a certain degree ofrecovery as progress has been made in balancing quarantine and economics against the spread of
COVID-19. On the other hand, logistics disruptions caused by shortages of marine shipping
containers and various materials and delivery delays remained unresolved, and energy andmaterial prices soared due to heightened geopolitical risks in Russia and Ukraine.
In the environment surrounding the Mitsubishi Paper Mills Group, demand recovered mainly
because restrictions on outings and events were eased. However, a sharp increase in prices of fuelssuch as crude oil, coal and natural gas, in addition to rising product delivery costs, had a significant
impact.
Under these circumstances, the Group worked to improve productivity by expanding andreducing production systems in line with demand trends in each business and, in term of sales,
strived to revise product prices and expand sales of new products.
Regarding the New Mid-Term Management Plan (April 2019 - March 2022), which hasentered its final year, the Group vigorously worked on the following three fundamental policies
and proceeding with the basic principles of “fortification and diversification of the businessfoundation on its new stage.”(i) Establish a sound business foundation through alliance with Oji
Group (ii) Reconstruct and strengthen our existing businesses (iii) Diversify our businessfoundation by forming new pillars of earnings.
In the alliance with the Oji Group, the Company has transformed its business portfolio andstrengthened its management base through capital and business alliances, including the transfer
of pressboard business at its Shirakawa Site to Oji F-Tex Co., Ltd. in October 2021.
Consolidated net sales for the fiscal year under review increased to 181,920 million yen (up12.1% year on year).
On the profit front, despite the impact of soaring prices of raw materials and fuels, a
consolidated operating loss was 248 million yen (compared with an operating loss of 1,770 million
yen in the previous fiscal year), and consolidated ordinary income was 1,964 million yen(compared with an ordinary loss of 636 million yen in the previous fiscal year) due to the recovery
of production and sales volumes as well as the reduction of costs including fixed costs. Profit
attributable to owners of parent was 1,096 million yen (compared with a loss attributable to ownersof parent of 2,532 million yen in the previous fiscal year).
On the non-consolidated basis, MPM recorded net sales of 95,823 million yen, operating
income of 159 million yen, ordinary income of 4,589 million yen and profit of 1,793 million yen.

―32―

(2) Summary of Operations by Business Category● Paper and Pulp Business Net sales 135,986 million yen Operating loss 3,421 million yen
In the domestic market, both sales volume and value increased mainly in printing paper,compared with the previous year when demand had declined significantly affected by COVID-19
pandemic. Both sales volume and value also increased in exports. In terms of production, theCompany continued production systems in line with demand trends.
In commercial pulp, both sales volume and value increased due to soaring market prices caused
by worldwide delays in physical distribution and damage from heavy rains in North America,
among others.
Both sales volume and value increased in European subsidiaries.
On the other hand, soaring prices of raw materials and fuels had a significant impact on costs inJapan and Europe.
As a result of the above, net sales in the Paper and Pulp Business amounted to 135,986 million
yen, rising 8.5% year on year. The operating loss increased 2,122 million yen from 1,299 million
yen in the previous fiscal year, to 3,421 million yen.
While the future of the COVID-19 pandemic remains uncertain, the degree of recovery in paper
demand has been clearly different depending on the type and application. In this environment, theCompany has revised product prices of printing paper, communication paper and white paperboard
in the second half, but prices of raw materials and fuels currently remain higher than expected
mainly due to the impact of the situation in Ukraine.
Under such circumstances, the Company will aim to transform its product portfolio and earlystabilize revenue by strongly promoting the expansion of product lineup of paper materials
including pulp, kraft paper, functional paperboard and barricote® paper that will contribute toplastic removal, in addition to the optimization of production systems in in line with demand trends,
continued efforts to optimize inventory levels and deeper alliances with the Oji Group as selfsupporting efforts.
● Imaging Media Business Net sales 32,296 million yen Operating income 837 million yen
In regions where the infection situation has calmed down due to progress in vaccination against
COVID-19 and other factors, restrictions on travel and event activities have been eased, anddemand for photographic sensitive materials and inkjet paper, mainly for image output applications,recovered in both domestic and overseas markets. In growth areas, both sales and income increased
due to progress in the development of new business-use inkjet paper and electronics-related
products.
As a result of the above, net sales in the Imaging Media Business amounted to 32,296 million
yen, rising 28.2% year on year. Operating income increased 2,965 million yen from an operating
loss of 2,128 million yen in the previous fiscal year, to 837 million yen.
The Company will work to increase its earning power in Japan and overseas by promoting newsales expansion in growth areas while responding flexibly to market trends in countries around theworld, in addition to strengthening the foundation for existing businesses through continuous
review of production systems.
● Speciality Material Business Net sales 18,134 million yen Operating income 2,121 million yen
Water treatment membrane supporting bodies and battery separators performed solidly due toincreasing demand. Demand for decorative laminate base paper and tape base paper also continued
to be robust and exceeded a year-ago level. In this segment, both sales and income increased dueto the effect of cost reduction through higher production, in addition to the effect of higher sales.
―33―

As a result of the above, net sales in the Speciality Materials Business amounted to 18,134
million yen, rising 19.7% year on year. Operating income was 2,121 million yen, an increase of
615 million yen year on year.
The Company will continue to focus on sales expansion of battery separators, non-woven fabrics,
tape base paper and newly launched melt-blown non-woven fabrics, in addition to the acquisitionof new users of water treatment membrane supporting bodies and their development to membranebio-reactor (MBR) applications.
● Warehouse and Transportation Business Net sales 7,822 million yen Operating income 231 million yen
Net sales in the Warehouse and Transportation Materials Business amounted to 7,822 million
yen, rising 3.6% year on year. Operating income was 231 million yen, an increase of 82 million
yen year on year.
● Other Businesses Net sales 7,020 million yen Operating income 75 million yen
Net sales were 7,020 million yen, up 24.7% year on year. Operating income was 75 million yen,
an increase of 28 million yen year on year.

―34―

<Sales Amount by Business Category>FY2020 (156th term)
Business Category

Paper and Pulp
Imaging MediaSpeciality Materials
Warehouse andTransportation
Other
Total
Elimination or corporate
Total

Upper column:
Net sales
Lower column:
Operatingincome (loss)
Million yen

FY2021 (157th term)

YoY Changes

Percentage

Upper column:
Net sales
Lower column:
Operatingincome (loss)

Percentage%

Million yen%

AmountMillion yen

Ratio

%

125,340

70.1

135,986

67.6

10,646

8.5(1,299)‒(3,421)‒(2,122)‒

25,182

14.1

32,296

16.0

7,114

28.2

(2,128)

‒

837

‒

2,965

‒

15,144

8.5

18,134

9.0

2,990

19.7

1,506

‒

2,121

‒

615

40.8

7,550

4.2

7,822

3.9

272

3.6

149

‒

231

‒

82

55.3

5,630

3.1

7,020

3.5

1,390

24.7

47

‒

75

‒

28

60.7

178,848100.0

201,260

100.0

22,412

12.5(1,724)

‒

(154)

‒

1,570

‒

(16,523)‒(19,339)‒(2,816)

‒

(45)

‒

(93)

‒

(48)

‒

162,325‒

181,920‒

19,59512.1(1,770)

‒

(248)

‒

1,522

‒

―35―

(3) Trends in Assets and Operating Results(1) Status of Assets and Operating Results of the Corporate GroupClassification

FY2018(154th term)

FY2019(155th term)

FY2020(156th term)

FY2021(157th term)

Net sales(Million yen)

203,997

194,575

162,325

181,920

Operating income (loss)(Million yen)

(40)

1,976

(1,770)(248)

Ordinary income (loss)(Million yen)

(914)

2,696

(636)

1,964

Profit (loss) attributable to(Million yen)owners of parent

351

801

(2,532)

1,096

(Yen)

10.04

17.96

(56.72)

24.62

Net assets(Million yen)

67,00460,52762,902

69,613

Total assets(Million yen)

232,758

212,217

209,438

215,879

Profit (loss) per share(2) Status of Assets and Operating Results of the Company
Classification

FY2018(154th term)

FY2019(155th term)

FY2020(156th term)

FY2021(157th term)
95,823

Net sales(Million yen)

115,064

106,452

86,619Operating income (loss)(Million yen)

(1,150)422(3,095)

159

Ordinary income (loss)

Million yen

(347)

898

(735)

4,589

Profit (loss)(Million yen)

1,289

(971)

(5,818)

1,793

(Yen)

36.86

(21.74)(130.26)

40.26

Net assets(Million yen)

53,88551,24546,86149,064

Total assets(Million yen)

185,400

175,837

166,702

163,109

Profit (loss) per share―36―

(4) Issues to be Addressed
Based on the corporate philosophy “Live up to the trust of its customers in the world market,” “Be
always on the leading edge of technology” and “Contribute to preserving the global environment andcreating a recycling society,” the MPM Group is pursuing corporate activities to achieve its sustainablegrowth and enhance its corporate value over the medium to long term.
The Group is working on its new Mid-term Management Plan (FY2023/3-FY2025/3), which theGroup began to execute in April 2022.
[Mid-term Management Plan (FY2023/3-FY2025/3)]
While the lifestyle changes brought about by COVID-19 have accelerated the decline in demandfor paper due to advances in digitalization, the Group will undertake structural reforms at
unprecedented speed to strengthen its revenue base in order to respond to these changes in the market.
To attain this goal, the Group has launched the Medium-term Management Plan (FY2023/3FY2025/3) in the fiscal year under review with a slogan of “Creation of a New Mitsubishi Paper Mills
Group.”
Major initiatives in the Medium-term Management Plan are as follows.
(i) Strengthen our earing capacity by “selection and concentration” strategies and “expansion of
new business”
We will ensure the steady increase of sales and profit by intensive investment to our growing“Functional materials business” such as functional non-woven fabric, electronics-related materials
including battery separator and electronics industry materials, industrial speciality paper and makeit our main business segment. We explore the potential of pulp and paper materials, and open up
wide ranging applications, and will change our existing business focusing on “Paper materials
business” to stable profit earning fundamental business by selection and concentration.
Through the above initiatives, we will review our business portfolio to realize stronger
profitability.
(ii) Contribution to Green Society
We will engage in activities that contribute to a green society, for example, expanding sales of
eco conscious products that the realization of a safe, comfortable and sustainable society, and efforts
to Achieve Carbon Neutrality by 2050.
(iii) Organizational Change to Promote Sustainability
We will work on organizational change to Strengthening corporate governance, promoting
sustainability, diversity and inclusion, observance of compliance, work style reform.

―37―

We will take the measures above, with the aim of achieving the following targets in FY2025/3.
<Management Targets>
Consolidated indicators
Net Sales
Operating income
Ordinary income
Interest-bearing debt
D/E ratios

Targets (FY2025/3)
195.0 billion yen
7.5 billion yen
8.5 billion yen
76.0 billion yen
1.0<Precondition> FY2025/3
Exchange rate: 125 yen /US$, 135 yen /€Crude oil price (Dubai): 85US$/BBL
Coal price (Australia): 200US$/MT

Through the activities above, the MPM Group will work to enhance its corporate value, with theaim of becoming a company that contributes to a sustainable society and grows sustainably by creatingsocial value.

―38―

(5) Status of Capital Investment
We have been engaging in capital investment, with a focus on the construction of new facilities
for new businesses and environmental measures, mainly for energy saving. We made capital
investment of 5,791 million yen in the fiscal year under review, and major facilities andequipment that were completed or ongoing as of the end of the fiscal year under review are as
follows.
A. Major facilities that were completed during the fiscal year under review- The Company
Construction of new production facilities of melt blown nonwoven fabrics and masks
Production facilities of alcohol preparations
Facilities for unbleached kraft

B. Major ongoing facilities as of the end of the fiscal year under review- The Company
Capacity expansion of waste boilers
Energy-saving measures
Expansion of production facilities of wet nonwoven fabrics (battery separators)
Company-wide IT infrastructure restructuring- Kitakami HiTec Paper Corporation
Energy-saving measures(6) Status of Financing
Funds for facilities and working capital during the fiscal year under review were financed bycash on hand, borrowings from financial institutions, and the issuance of commercial paper,
among other means.

―39―(7) Status of Principal Parent Companies and Subsidiaries (As of March 31, 2022)(i) Status of parent company
Not applicable.
(ii) Status of the important subsidiary companies
Percentage ofvoting rights of
the Company

Company name

Capital stock

Main business

Mitsubishi Oji Paper Sales Co., Ltd.

Million yen
600

99.9

Kitakami HiTec Paper Corporation

450

100.0

Mitsubishi Paper Engineering Co., Ltd.

150

100.0

RYOSHI Co., Ltd.

100

100.0

Diamic Co., Ltd.

100

100.0

Sale of paper, chemicals, etc.
Manufacturing, processing and sale of pulp,
resin-coated paper and sanitary products
Design/installation of various machine andequipment construction
Operation of sporting facilities, insurance
agencies, and real estate business
Sale of printing-plate materials, etc.

%

NAMITSU Co., Ltd.

90

100.0

Cargo transportation and warehousing

MPM OJI Home Products Co., Ltd.

80

70.0

Manufacture and sale of household paper

Shin-Hokuryo Forest Products Co., Ltd.

70

100.0

Manufacture and sale of wood chips, etc.

Toho Tokushu Pulp Co., Ltd.

60

100.0

Hachinohe Paper Processing Co., Ltd.

50

100.0

KJ SPECIALTY PAPER Co., Ltd.

50

100.0

Takasago Paper Processing Co., Ltd.

30

100.0

Hachiryo Co., Ltd

20

100.0

Ryoukou Co., Ltd.

20

100.0

MPM Operation Co., Ltd.

20

100.0

Kyoryo Chemical Co., Ltd.

12

100.0

Hokuryo Industry Corporation

10

100.0

Manufacture and sale of special pulp
Paper trimming, grading and packaging,storage and shipment of paper products
Manufacturing, processing and sale ofchemical paper
Paper trimming, grading and packaging
Premise transport, miscellaneous work andprocessing of packing paper
Construction industry, machine repair
Entrustment with operation andmanagement of production activities ofHachinohe Mill
Finishing of sensitive coated paper,
manufacture and sale of printing plate
treatment chemicals
Contracted manufacture and finishing of
paper, miscellaneous work

Mitsubishi Paper Holding (Europe) GmbH

Thousand EUR
1,000
Thousand EUR
11,759100.0Management of European affiliates

100.0

Manufacture and sale of paper

1,000

100.0

Sale of paper and photographic/printing
plate materials

MPM Hong Kong Limited

Thousand HKD
700
Thousand CNY

100.0

Sale of speciality materials

Zhuhai MPM Filter Ltd.

20,103100.0

Manufacturing, processing and sale ofspeciality materials

Mitsubishi HiTec Paper Europe GmbH

USD
Mitsubishi Imaging (MPM), Inc.

Notes 1. Percentage of voting rights of MPM in Toho Tokushu Pulp Co., Ltd. and Mitsubishi HiTec Paper EuropeGmbH includes those of MPM’s subsidiaries.
2. Hakuryo Paper Technology Co., Ltd. completed its liquidation on February 28, 2022, following thetransfer of production in the pressboard business.

―40―

(iii) Status of equity-method affiliated companies
Company name

Capital stock

Percentage ofvoting rights of
the Company

Million yen%

Hyogo Clay Co., Ltd.

25

36.2

MPM Oji Eco Energy Co., Ltd.

400

45.0

Main business
Manufacturing of tankal and pigments for
inkjet paper
Power generation business, power sales
business, and any other business incidental
or related thereto

Thousand USD
Forestal Tierra Chilena Ltda.

5,380

50.0

Transfer of land and plantation assets inJanuary 2018 and scheduled to be liquidated
in the future.

(iv) Other
MPM is an equity-method affiliated company of Oji Holdings Corporation, which owns 33%
of voting rights of MPM.
(8) Principal Business (as of March 31, 2022)
The MPM Group’s principal business is the manufacturing, processing, and sale of paper, pulp,
and photosensitive materials, and the major products and services by business category are as
follows.
Paper and Pulp
Business

Uncoated printing paper, fine coated printing paper, coated printing paper, special printing paper,
information paper and sanitary paper
Packaging paper, electrically insulated pressboard, high-grade white paperboard, specialty white
paperboard and other specialty paper
Bleached kraft pulp and specialty pulp

Imaging MediaBusiness

Inkjet paper, photographic printing paper, base paper for photographic printing paper, printing platemaking materials, printing equipment,
CTP software and various kinds of treatment chemicals

Speciality
Materials Business

Chemical paper, nonwoven fabrics, filters, rewrite media, battery separators and various kinds ofspeciality materials

Warehouse andTransportation
Business

Warehouse and transportation-related Business

Other Businesses

Engineering services, sports facility management, insurance agency business and real estate business―41―

(9) Main Offices and Mills (as of March 31, 2022)(i) The Company
Head Office
Mills and Offices

2-10-14 Ryogoku, Sumida-ku, Tokyo
Takasago Mill (Hyogo), Kyoto Mill (Kyoto), Hachinohe Mill (Aomori), Kitakami Division (Iwate)
Shirakawa Office (Fukushima)

Sales Offices

Osaka Sales Branch (Osaka)

Laboratories

Takasago R&D Laboratory (Hyogo), Kyoto R&D Laboratory (Kyoto)(ii) Subsidiaries, etc.,

Paper and Pulp
Business

Mitsubishi Oji Paper Sales Co., Ltd. (Tokyo), Toho Tokushu Pulp Co., Ltd. (Tokyo)
MPM Operation Co., Ltd. (Aomori), Hachinohe Paper Processing Co., Ltd. (Aomori)Shin-Hokuryo Forest Products Co., Ltd. (Aomori), Hachiryo Co., Ltd. (Aomori)
MPM OJI Home Products Co., Ltd. (Aomori), Takasago Paper Processing Co., Ltd. (Hyogo)
Mitsubishi Paper Holding (Europe) GmbH (Germany)
Mitsubishi HiTec Paper Europe GmbH (Germany)

Imaging MediaBusiness

Diamic Co., Ltd. (Tokyo)
Kitakami HiTec Paper Corporation (Iwate), Hokuryo Co., Ltd. (Iwate), Kyoryo Chemical Co., Ltd.
(Kyoto)Mitsubishi Imaging (MPM), Inc. (U.S.A)

Speciality
Materials Business

KJ SPECIALTY PAPER Co., Ltd. (Shizuoka), MPM Hong Kong Limited (China)
Zhuhai MPM Filter Ltd. (China)

Warehouse andTransportation
Business

NAMITSU Co., Ltd. (Osaka)

Other Businesses

Mitsubishi Paper Engineering Co., Ltd. (Aomori), RYOSHI Co., Ltd. (Tokyo)
Ryoukou Co., Ltd. (Hyogo)―42―

(10) Status of Employees (As of March 31, 2022)(i) Status of Employees in the Corporate Group
Business Category

Change from the end of
the previous period-124

Number of employees

Paper and Pulp

1,904

Imaging Media

504

-31

Specialty Materials

439

-34

Warehouse and Transportation

149

+13

Other
Group-wide(not belonging to any specific segment)
Total

276

-6

112

-13

3,384

-195

(Note) The number of employees in the Company-wide (not belonging to any specific segment) category includes
employees who belong to the administration division that cannot be classified into any specific businesssegment.

(ii) Status of Employees in the Company
Change from the end of
the previous period-34

Number of employees
577

Average age
47.5

Average years ofcontinuous service
25.9(Note) Other than the above, 668 employees are seconded to subsidiaries, etc.

(11) Major Lenders (As of March 31, 2022)
LenderBorrowing amountThe Norinchukin Bank

13,082 million yen

MUFG Bank, Ltd.

11,936 million yen

Syndicated loans

11,900 million yen

The Nanto Bank, Ltd.

5,068 million yen

Joyo Bank, Ltd.

4,915 million yen

The Hachijuni Bank, Ltd.

4,737 million yen(Note) Syndicated loans are those provided by 23 financial institutions.

―43―

2. Matters related to the Company’s shares (As of March 31, 2022)(1) Total number of authorized shares
90,000,000 shares(2) Total number of shares issued

44,741,433 shares(3) Number of shareholders

15,992 people (down 233 people atthe end of the previous fiscal year)(4) Major shareholders
Name of shareholder

Number of shares held

Shareholding ratio

Oji Holdings Corporation

14,693,000 shares

32.9%

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

3,623,500 shares

8.1%

Isao Nasu

2,128,500 shares

4.8%

Mitsubishi Paper Mills Shareholder Association

930,150 shares

2.1%

Custody Bank of Japan, Ltd. (Trust account)924,400 shares

2.1%

FUJIFILM Holdings Corporation

850,000 shares

1.9%

The Norinchukin Bank

650,000 shares

1.5%

Mitsubishi Paper Mills Employee Shareholder Association

478,656 shares

1.1%

DFA INTL SMALL CAP VALUE PORTFOLIO

471,769 shares

1.1%

Mitsubishi Gas Chemical Company, Inc.

465,000 shares

1.0%(Note)

1. The ratio of share contribution is calculated with treasury stock (73,407 shares) deducted. Treasury stock
does not include shares of MPM owned by the Board Incentive Plan.
2. The number of shares owned by Mitsubishi Gas Chemical Company, Inc. includes 360 thousand sharescontributed by this company as trust assets for a retirement benefit trust. (The name on the shareholders’register is “The Master Trust Bank of Japan, Ltd. (a trust account for a retirement benefit trust and an
account for Mitsubishi Gas Chemical Company, Inc.)(5) Shareholder composition
Category
Financial institutions
Other corporations
Individuals and others
Foreign corporations andothersFinancial instruments
business operators
Total

Number ofshareholders
31 persons
198 persons
15,607 persons

Number of shares held

Shareholding ratio

8,185,155 shares
19,025,037 shares
13,273,195 shares

18.3%
42.5%
29.7%

114 persons

3,076,488 shares

6.9%

42 persons

1,181,558 shares

2.6%

15,992 persons‒

100.0%

44

3. Matters related to company officers(1) Names and the status of important concurrent positions of Directors and Audit & Supervisory
Board Members (as of March 31, 2022)
Director, Chairman
Yoshiaki Takeda(Representative Director)
President (Representative
Yukihiro Tachifuji
Director)
Representative Director Shigeharu Sanada
Director
Nobuhiro Sato
Director
Shimpei Yamada
Director
Kunio Suzuki
Director

Somitsu Takehara

Director

Yoshihiro Kataoka

Full-time Audit &Supervisory Board
MemberAudit & Supervisory
Board Member

Director, Chairman, ZECOO Partners Inc.
Outside Director, Genki Sushi Co., Ltd.
Outside Audit & Supervisory Board Member, EDION Corporation
Outside Audit & Supervisory Board Member, TBS Holdings, Inc.
Partner, Director, Kataoka & Kobayashi LPC
Outside Director (Audit and Supervisory Committee Member), The
Higo Bank, Ltd.
Visiting professor at Chuo Law School

Koichi Nakayama
Hiroaki Tonooka

Audit & Supervisory
Board Member

Takeshi Kobayashi

Audit & Supervisory
Board Member

Satoshi Takizawa(Director, Trustee, The Kitasato Institute)
Director, Chairman, DBJ Capital Co., Ltd.
Outside Audit & Supervisory Board Member, Takagi Seiko
Corporation
Outside Audit & Supervisory Board Member, Keisei Electric
Railway Co., Ltd.
(Representative Director, President, Mitsubishi UFJ Trust BusinessCo., Ltd.)(2) Names and Responsibilities of Executive Officers (As of March 31, 2022)*

President, Executive
Officer

Yukihiro Tachifuji*

Managing Executive
Officer

Nobuhiro Sato*Managing Executive
Officer

Shimpei Yamada*

Managing Executive
Officer

Shigeharu Sanada

Executive Officer

Teiji Ota

Executive Officer

Yuji Takagami

Executive Officer

Hiroaki Kobayashi

Executive Officer

Takao Fujiura

Executive Officer

Hironori Oikawa

Executive Officer

Hiroshi Mohara(In charge of Corporate Planning Dept., Research and Development
Division, Energy Business Dept. and Technology & Environmental
Dept.)
Responsible for Paper Division
General Manager, Paper Division
Director, President, Mitsubishi Oji Paper Sales Co., Ltd.
In charge of Functional Materials Division and Kitakami Division
Assistant officer responsible for German operations
General Manager, Functional Materials Div.
In charge of General Affairs & Personnel Dept., Legal Dept., Raw
Materials & Purchasing Dept., Internal Audit Dept. and Shirakawa
OfficeDirector in charge of CSR
Director, President, Kitakami HiTec Paper Corporation
General Manager, Kitakami Div., Deputy General Manager,
Functional Materials Div.
(Deputy General Manager, Functional Materials Div.)In charge of Energy Business Dept. and Technology &Environmental Dept.
General Manager, Technology & Environmental Dept.
(Deputy General Manager, Paper Div., General Manager, Sales
Administration Dept.)(In charge of Corporate Planning Dept., Finance & Accounting
Dept. and German operations)(Head, Takasago Mill, Deputy General Manager, Paper Div.,
Deputy General Manager, Functional Materials Div.）

45

Executive Officer

Kunihiro Nakagawa

Executive Officer

Ikuo Fujita

In charge of Research and Development Division
General Manager, Research and Development Div.
(Deputy General Manager, Functional Materials Div., Chairman,
Zhuhai MPM Filter Limited)* Executive Officers with an asterisk concurrently serve as a Director.
(Note) 1. Directors Somitsu Takehara and Yoshihiro Kataoka are Outside Directors.
2. Audit & Supervisory Board Members Hiroaki Tonooka, Takeshi Kobayashi and Satoshi Takizawa are
Outside Audit & Supervisory Board Members.
3. Audit & Supervisory Board Member Hiroaki Tonooka has many years of experience in financial
institutions including his serving as a Director and an Executive Officer at Meiji Yasuda Life Insurance
Company and has expertise in accounting and finance.
4. Audit & Supervisory Board Member Takeshi Kobayashi has expertise in accounting and finance as heserved as a Managing Executive Officer and an Audit & Supervisory Board Member at Development
Bank of Japan Inc. and was responsible for the accounting and finance departments at Japan Nuclear Fuel
Limited as Managing Executive Officer.
5. Audit & Supervisory Board Member Satoshi Takizawa has many years of experience in financial
institutions including his serving as a Director and a Senior Managing Executive Officer at Mitsubishi
UFJ Trust and Banking Corporation and has expertise in accounting and finance.
6. MPM has notified the Tokyo Stock Exchange of the appointment of Directors Somitsu Takehara andYoshihiro Kataoka and Audit & Supervisory Board Members Hiroaki Tonooka, Takeshi Kobayashi and
Satoshi Takizawa as Independent Directors with no possibility of conflicts of interest with generalshareholders.
7. There are no Directors and Audit & Supervisory Board Members who assumed or left office from the day
following the 156th Annual General Meeting of Shareholders held during the fiscal year under review(June 25, 2021) to the end of the fiscal year.
8. Positions and responsibilities of Directors and Executive Officers have been changed as follows effective
April 1, 2022.
President,
Ryuichi Kisaka
Executive Officer
In charge of Corporate Planning Dept., Functional Materials
Division, Research and Development Division, General Affairs
Representative& Personnel Dept., Legal Dept., Finance & Accounting Dept.,
Director
Energy Business Dept., Technology & Environmental Dept.,
Shigeharu Sanada
Senior Executive
Shirakawa Office, Kitakami Division and German operations
Vice President
Responsible for Raw Materials & Purchasing Dept. and Internal
Audit Dept.
Director responsible for Sustainability Promotion
Responsible for Energy Business Dept., Technology &Environmental Dept. and Kitakami Division
Senior Managing
Kazuhiro Nakauchi
Assistant officer responsible for Pulp and Paper Materials Div.
Executive Officer
Director, Chairman, MPM OPERATION Co., Ltd.
Director, Chairman, Kitakami HiTec Paper Corporation
Responsible for Functional Materials Division, Research andManaging
Development Division and German operations
Shigeji Matsuzawa
Executive Officer
Assistant officer responsible for Kitakami Division
General Manager, Functional Materials Div.
Director, President, Kitakami HiTec Paper Corporation
General Manager, Kitakami Div., Deputy General Manager,
Executive Officer
Teiji Ota
Pulp and Paper Materials Div., Deputy General Manager,
Functional Materials Div.
Responsible for Engineering Business
Executive Officer Hiroaki Kobayashi
Assistant officer responsible for Energy Business Dept.
General Manager, Technology & Environmental Dept.
(Responsible for General Affairs & Personnel Dept., Legal Dept.,
Executive Officer
Hironori Oikawa
Shirakawa Office and property management)
Executive Officer Kunihiro Nakagawa (General Manager, Research and Development Div.)46

Executive Officer

Ryuki Fuchiwaki

Executive Officer Fujitaka Mizushima
Director
Director andAdvisorDirector

Deputy General Manager, Pulp and Paper Materials Div.
Managing Executive Officer, Mitsubishi Oji Paper Sales Co.,Ltd.
Responsible for Corporate Planning Dept. and Finance &Accounting Dept.
Assistant officer responsible for German operations

Yoshiaki Takeda
Yukihiro Tachifuji
Shimpei Yamada(3) Outline of liability insurance for officers, etc.
MPM signs a directors and officers liability insurance policy as specified in paragraph 1, Article
430-3 of the Companies Act to cover damages such as compensation and legal expenses if a damage
compensation claim is filed against the insured during the insurance period due to an act committed
by the insured in their capacity as the insured under this insurance. However, the above policy does
not cover damages arising from the insured’s illegal obtaining of benefits or advantages, criminal
acts, dishonest acts, fraudulent acts or acts committed with knowledge that they violate laws,
regulations, or regulatory statutes.
The insured of the insurance policy is the Directors, Audit & Supervisory Board Members andmanagerial employees of MPM, and MPM pays all of the premiums for all of the insured.
(4) The amounts of compensation for Directors and Audit & Supervisory Board Members concerning
the fiscal year under review(i) Matters related to resolutions of the Shareholders’ Meeting about remuneration for the
Directors and Audit & Supervisory Board Members
The amount of monetary compensation for Directors was resolved at the 156th Ordinary
Shareholders’ Meeting held on June 25, 2021 to be within 280 million yen per year (not includingsalaries Directors receive for their concurrently serving as employees of the Company). The
number of Directors when the annual Shareholders’ Meeting ended was eight (including two
Outside Directors).
Additionally, separately from monetary compensation, it was resolved at the same Shareholders’Meeting that MPM will contribute up to 150 million yen per fiscal year to a trust as a performancelinked stock compensation plan for Directors and Executive Officers (excluding Outside Directors,
part-time Directors and non-residents of Japan), and that the maximum number of shares of MPM
to be delivered, etc. through the trust will be a total of 1.8 million points (equivalent to 1.8 million
shares) for three fiscal years. As of the conclusion of the Ordinary Shareholders’ Meeting, six
Directors (excluding Outside Directors, part-time Directors and non-residents of Japan) areparticipating in the performance-linked stock compensation plan.
The amount of monetary compensation for Audit & Supervisory Board Members was resolved
at the 121st Ordinary Shareholders’ Meeting held on June 27, 1986 to be within 7 million yen permonth. The number of Audit & Supervisory Board Members when the annual Shareholders’Meeting ended was three.
(ii) Policies on decisions related to details of compensation for individual Directors, etc.
MPM has established the Nomination and Remuneration Committee as an advisory body to theBoard of Directors for the determination of Directors’ remuneration, to ensure the objectivity andtransparency of the process. The Nomination and Remuneration Committee, in consultation with47

the Board of Directors, reviews the appropriateness of the policies regarding compensation for
Directors and Executive Officers and the details of individual compensation and reports to theBoard of Directors. The members of the Nomination and Remuneration Committee are appointed
from among the Representative Directors and independent Outside Directors, and the chairpersonof the Committee is determined by mutual vote of the appointed independent Outside Directors,
with the Committee chaired by the chairperson. In addition, the Board of Directors has determinedthat the amount of individual remuneration, etc. of Directors for the fiscal year under review has
been paid in accordance with the policy for determining remuneration, as the amount of individual
remuneration, etc. of the Directors has been deliberated by the Nomination and Compensation
Committee in accordance with the regulations adopted and established by the Board of Directors
and the policy for the fiscal year 2021. Policies on decisions related to details of compensation for
individual Directors, etc. are as follows.
MPM’s Basic Policies on Corporate Governance stipulate that the remuneration of Directors andExecutive Officers shall be appropriate, fair, and balanced to motivate them to achieve thesustainable growth of MPM and the increase of its corporate value over the medium and long term,
and the Board of Directors shall make a resolution on this matter after consulting the Nomination
and Remuneration Committee, which is an advisory body to the Board of Directors and chaired byan Outside Director.
Compensation for Directors (excluding Outside Directors and part-time Directors) consists of a
fixed remuneration (cash) and stock-based compensation. Stock-based compensation consists offixed portion of not linked to business performance and a portion of linked to business performance.
Stock-based compensation that is not linked to business performance is the granting of a certain
number of stock delivery points in accordance with the Director’s position. Stock-based
compensation that is linked to business performance is the granting of stock delivery points linked
to the consolidated operating income for each fiscal year during the subject period in accordancewith the Director’s position. Since indicators for performance-linked remuneration are highly
connected to company performance, the consolidated operating income, etc., announced in the
consolidated performance forecast are used as indicators to ensure the executive compensation
system is highly transparent and objective. Regarding stock-based compensation, the total numberof shares to be delivered (one share of the Company’s stock per stock delivery point) will be
determined after the Director retires. Outside Directors and part-time Directors are not paid Stockbased compensation from the perspective of their independence for Outside Directors, and for thepart-time Directors, due to the fact that they do not excuse business operations. Outside Directors
and part-time Directors are paid only a fixed remuneration (cash).

48

(iii) The total amount of remuneration and other payments for Directors and Audit & Supervisory
Board Members
Fixedremuneration
Classification

Director
Audit & Supervisory
Board Member

Number ofrecipients

Total amount of
remuneration,
etc.

Persons

Million yen

Monetary
remuneration
Million yen

Stock-based compensation
Non-monetarycompensation(fixed)Non-monetarycompensation(linked tobusiness
performance)

Million yen

Million yen

10

171

157

14

‒

5

35

35

‒

‒

Total

15

207

192

14

(Outside Officers)

(6)

(30)

(30)

(‒)

‒

Notes 1. The table above includes the remuneration paid to two Directors and one Audit & Supervisory Board
Member who retired at the conclusion of the 156th Ordinary General Meeting of Shareholders held on June25, 2021 during their terms of office.
2. MPM had decided not to pay Stock-based compensation that is linked to business performance for the fiscal
year under review.
3. Each total amount of non-monetary compensation in the table above is the amount of the expenses recorded
for the stock delivery points granted in fiscal year 2021 under the performance-linked stock compensationand other compensation plans (BIP Trust) based on the resolution of the Ordinary General Meeting of
Shareholders on June 25, 2021.
4. An overview of the performance-linked stock compensation and other compensation plans (BIP Trust) is
as follows.
People eligible for the plans

Maximum amount of funds
provided by MPM
Method of share acquisition
Maximum number of shares of
MPM to be delivered to Directors

Details of performanceachievement
Timing of delivery, etc. of
MPM’s shares, etc., to eligible
persons, etc.
Exercise of voting rights

Directors, Executive Officers(excluding Outside Directors, part-time Directors and non-residents
of Japan)
150 million yen per fiscal year
The maximum amount at the time of extension is a total of 450
million yen over three fiscal years.
Acquisition from the stock market
The maximum number of points to be delivered to Directors andothers for the three fiscal years during the trust period is 1.8 million
points (equivalent to 1.8 million shares).
The average number of points to be delivered per fiscal year is 600
thousand points (equivalent to 600 thousand shares).
Amount of consolidated operating income for each fiscal year, etc.
After retirement

Voting rights shall not be exercised during the trust period.

(4) Matters related to Outside Officers (as of March 31, 2022)
a. Important concurrent positions and relationship between MPM and the entities where theyhold concurrent positions
Director Somitsu Takehara is the Director and Chairman of ZECOO Partners INC.,
Outside Director of Genki Sushi Co., Ltd., Outside Audit & Supervisory Board Memberof EDION Corporation (scheduled to assume office on June 29, 2022) and Outside Audit49

& Supervisory Board Member of TBS Holdings, Inc. MPM has no special relationships
with the above companies where he holds concurrent positions.
Director Yoshihiro Kataoka is a Partner and Director of Kataoka & Kobayashi and an
Outside Director (Audit & Supervisory Board Member) of The Higo Bank, Ltd. MPM has
no special relationships with the above companies where he holds concurrent positions.
Audit & Supervisory Board Member Hiroaki Tonooka is a Director and Trustee of The
Kitasato Institute. MPM has no special relationships with the above companies where heholds concurrent positions. (He is scheduled to become a trustee of Japan College of Social
Work on May 27, 2022)
Audit & Supervisory Board Member Takeshi Kobayashi is the Director and Chairman of
DBJ Capital Co., Ltd., Outside Audit & Supervisory Board Member of Takagi Seiko
Corporation (scheduled to assume office on June 24, 2022) and Outside Audit &Supervisory Board Member of Keisei Electric Railway Co., Ltd. MPM has no special
relationships with the above companies where he holds concurrent positions.
Audit & Supervisory Board Member Satoshi Takizawa is the Representative Director andPresident of Mitsubishi UFJ Trust and Banking Corporation. MPM has no special
relationships with the above companies where he holds concurrent positions.
b. Main activities for the fiscal year under review- Attendance at the Board of Directors meetings and the Audit & Supervisory Board
meetings
Board of Directors

Audit & Supervisory Board

Director

Somitsu Takehara

13 meetings /14 meetings(92.9%)‒

Director

Yoshihiro Kataoka

14 meetings /14 meetings(100%)‒

Audit & Supervisory
Board Member

Hiroaki Tonooka

14 meetings /14 meetings(100%)

12 meetings /12 meetings(100%)

Audit & Supervisory
Board Member

Takeshi Kobayashi

14 meetings /14 meetings(100%)

12 meetings /12 meetings(100%)

Audit & Supervisory
Board Member

Satoshi Takizawa

10 meetings /10 meetings(100%)

8 meetings /8 meetings(100%)- Statements made at Board of Directors meetings and Audit & Supervisory Board meetings
Director Somitsu Takehara provides advice and recommendations to ensure the adequacy
and appropriateness of the decision-making of the Board of Directors, mainly by offering
opinions based on his knowledge as a certified public accountant and his extensive
experience in corporate management through his management consulting business andother activities. Additionally, as the chairperson of the Nomination and Remuneration
Committee, he attended all three Nomination and Remuneration Committee meetings held
during the fiscal year under review and contributed to the strengthening of the corporate
governance of MPM by taking the lead in decisions on important matters such as theselection of candidates for Directors and officer remuneration and in supervising theexecution of operations from an independent, objective and neutral standpoint.
Director Yoshihiro Kataoka provides advice and recommendations to ensure the adequacy
and appropriateness of the decision-making of the Board of Directors, mainly by
expressing opinions from the perspective of a lawyer with expertise in corporate legal
50

affairs. Additionally, as a member of the Nomination and Remuneration Committee, heattended all three Nomination and Remuneration Committee meetings held during the
fiscal year under review and contributed to the strengthening of the corporate governanceof MPM by taking the lead in deciding important matters such as the selection ofcandidates for Directors and officer remuneration and in supervising the execution ofoperations from an independent, objective, and neutral standpoint.
Audit & Supervisory Board Member Hiroaki Tonooka has been engaged in the
management of a life insurance company, and based on his experience and expertise inaccounting and finance in general, he provides advice and recommendations to ensure theadequacy and appropriateness of the Board of Directors’ decision-making in all aspects ofmanagement, including expressing opinions from an objective and neutral standpoint,
thereby appropriately auditing MPM’s business execution.
Audit & Supervisory Board Member Takeshi Kobayashi has been engaged inmanagement and auditing of policy financial institutions, etc., and based on his experienceand expertise in investments and loans and general financial matters, he provides advice
and recommendations to ensure the adequacy and appropriateness of the Board of
Directors’ decision-making in overall management, and appropriately audits the MPM’s
business execution, by offering opinions from an objective and neutral standpoint.
Audit & Supervisory Board Member Satoshi Takizawa has been engaged in the
management of a trust bank, etc., and based on his experience and expertise in accounting
and finance in general, he provides advice and recommendations to ensure the adequacy
and appropriateness of the Board of Directors’ decision-making in overall management
and appropriately audits MPM’s execution of business by providing opinions from an
objective and neutral standpoint.
c.

Outline of agreement for limitation of liability
The Company has concluded contracts for the limitation of liability, by which the liability
for damages stipulated in Article 423, paragraph (1) of the Companies Act of Japan islimited by the provision of Article 427, paragraph (1) of the said Act, with its Outside
Directors and Outside Audit & Supervisory Board Members.
The maximum amount of liability for compensation of damages under the agreement is
the higher of 10 million yen or the amount stipulated by law.

4. Status of Accounting Auditors(1) Accounting firm (As of March 31, 2022)
Ernst & Young ShinNihon LLC.
(2) The amount of fees, etc. paid to Accounting Auditors for the fiscal year under review
a. Fees, etc. paid to Accounting Auditors for the fiscal year under review
55 million yen

b. Total amount of money and other financial benefits that the Company and its subsidiaries
should pay to Accounting Auditors
73 million yen
Notes 1. Since the amount of fees and other considerations paid to Accounting Auditors under theCompanies Act and the amount of remuneration for auditing services under the Financial

51

Instruments and Exchange Act are not distinguished in the agreement between MPM and the
Accounting Auditors, the amount in A above is the sum of these amounts.
2. Among MPM’s important subsidiaries, Mitsubishi Paper Holding (Europe) GmbH, Mitsubishi
HiTec Paper Europe GmbH, Mitsubishi Imaging (MPM), Inc., MPM Hong Kong Limited andZhuhai MPM Filter Limited are subject to audits (limited to those under the provisions of theCompanies Act and the Financial Instruments and Exchange Act (including equivalent foreignlaws and regulations)) of their financial statements by certified public accountants or auditing
firms (including those who have qualifications equivalent to these qualifications in foreigncountries) other than MPM’s Accounting Auditors.
3. Based on the Practical Guidelines for Cooperation with Accounting Auditors published by themembers of the Japan Audit & Supervisory Board, the Audit & Supervisory Board obtained andreceived explanations from the Accounting Auditors and related departments within MPM
regarding the comparison of audit plans and results for the previous fiscal year, audit time andcompensation and other necessary materials, and further examined the adequacy of audit plans
and estimated compensation for the fiscal year under review by reviewing the audit fees of othercompanies. As a result, MPM determined that the remuneration, etc. of the Accounting Auditors
was appropriate and gave its consent as stipulated in Article 399, Paragraph 1 of the Companies
Act.

(3) Policy on decision to dismiss or not to reappoint Accounting Auditors
The Audit & Supervisory Board will dismiss the Accounting Auditors with the unanimous
consent of the Audit & Supervisory Board Members if any of the items of Article 340, Paragraph 1of the Companies Act apply regarding the Accounting Auditors.
In cases other than the foregoing where it is deemed difficult for the Accounting Auditors to
perform appropriate audits due to the occurrence of events which undermine their suitability or
independence, the Audit & Supervisory Board will determine the details of a proposal for thedismissal or non-reappointment of the Accounting Auditors, and the Board of Directors will submit
the proposal to the General Meeting of Shareholders based on this decision.

5. Policy regarding decisions on dividends of surplus, etc.
The Company’s basic policy regarding dividends of surplus and the like is to regard the
distribution of profits to shareholders as a key management issue and maintain stable dividends while
comprehensively considering business performance in each business year and internal reserves
necessary to prepare for future management initiatives.
As a result of a comprehensive review of recent performance trends, the Company regrets to
inform its shareholders that it has decided not to pay a dividend for the current fiscal year.
Under Article 459 of the Companies Act, the Articles of Incorporation stipulate that dividends ofsurplus, etc. shall be paid by resolution of the Board of Directors.

52

Consolidated Balance Sheets
FY2021(Mar 31,2022）（Million yen）

AssetsCurrent assets

Liabilities
95,282Current liabilities
Notes and accounts payable- tradeElectronically recorded
obligations

102,720

Cash and deposits

9,047

Notes receivable - trade

7,724

Accounts receivable - trade33,879

Short-term loans payable

56,433Merchandise and finished goods

23,446

Commercial paper

6,000Work in process

6,487

Lease obligations

380

Raw materials and supplies

10,857

Accrued expenses

6,728

Other

3,969

Income taxes payable

475

Allowance for doubtful accounts(130)

Contract liabilities

500

Other
Non-current assets

120,596

24,617
3,541

4,043

Non-current liabilities

43,545

Property, plant and equipment

84,590Long-term loans payable

Buildings and structures, net
Machinery,equipment
and vehicles, net

21,335

Lease obligations

586

37,694

Deferred tax liabilities

694

Land

21,276

24

Leased assets, net

1,156

Construction in progress

1,638

Provision for share awards
Provision for
directors' retirement benefits
Net defined benefit liability

9,277

Other, net

1,489

Asset retirement obligations

885

Other
Intangible assets
Other

1,864

29,96069

2,048
Total liabilities

146,265

Net assets

1,864
Shareholders’ equity

56,784

Investments and other assets

34,141

Capital stock

36,561

Investment securities

19,868

Capital surplus

6,488

Long-term loans receivable

1,215

Retained earnings

13,962

Net defined benefit asset

10,662

Deferred tax assets

1,384

Other

1,081

Allowance for
doubtful accounts(70)

Treasury shares
Accumulated othercomprehensive income
Valuation difference on
available-for-sale securities
Foreign currency translation
adjustment
Remeasurements of defined
benefit plans
Non-controlling interests

Total assets

215,879

―53―

(228)
12,824
4,688
952
7,182
5

Total net assets

69,613

Total liabilities and net assets

215,879

Consolidated Statements of Income
FY2021(Apr’21 – Mar’22)(Million yen)
Net sales

181,920

Cost of sales

156,151

Gross profit

25,768Selling, general andadministrative expenses

26,017

Operating loss

(248)

Non-operating income
Interest income

30

Dividend income

531

Share of profit of entities
accounted for using equity
method1,066

Foreign exchange gains

1,038

Other

436

3,104

Non-operating expenses
Interest expenses

581

Loss for ship lease

116

Other

192

Ordinary income

891
1,964

Extraordinary income
Gain on disposal of non-current
assetsGain on sales of investment
securities

53
1,394

Gain on sale of businesses

840

Reversal of allowance for
doubtful accounts for
subsidiaries and affiliates

285

Other

430

3,004

Extraordinary losses
Loss on disposal of non-current assets

402

Impairment loss

1,317

Loss on valuation of investment
securities

779

Extra retirement payments

433

Loss on valuation of shares ofsubsidiaries and associates

395

Other

85

Profit before income taxes

3,414
1,554

Income taxes - current

881

Income taxes - deferred(425)

Profit1,098

Profit attributable tonon-controlling interests

2

Profit attributable to owners of parent

1,096

―54―

Balance Sheets
FY2021(Mar 31,2022）（Million yen）

AssetsCurrent assets
Cash and deposits

Liabilities
78,62884,097

Accounts receivable - trade26,107

Accounts payable - trade
Electronically recorded obligations operating
Short-term loans payable

Merchandise and finished goods

13,892

Commercial paper

6,000Work in process

3,379

Lease obligations

33

Raw materials and supplies

6,254

Accounts payable - other

1,599
4,272

Notes receivable - trade

7,687

Current liabilities

217

13,4292,812
54,872

Advance payments to suppliers

285

Accrued expenses

Prepaid expenses

389

Income taxes payable

256

Short-term loans receivable

18,047

Contract liabilities

309

Accounts receivable - other

2,933

105

Other

1,004

Allowance for doubtful accounts(1,572)

Deposits received
Electronically recorded obligations non-operating
Other

Non-current assets
Property, plant and equipment

84,481

Non-current liabilities374
32
29,94756,780Long-term loans payable

Buildings, net

11,947

Lease obligations

68

Structures, net

2,805Provision for retirement benefits

3

Machinery and equipment, net

24,613

Provision for share awards

24

39

Asset retirement obligations

574

403

Other

Vehicles, net
Tools, furniture and fixtures, net
Land
Mountain Forests And
Afforestation, Net
Leased assets, net

14,849Construction in progress

1,589

Intangible assets

28,020

1,256

439
91
1,705

Trademark right4

Software63

Software in progress

743

Total liabilities

114,044

Net assets

893

Shareholders’ equity

46,191

Investments and other assets

25,994

Capital stock

36,561

Investment securities
Shares of subsidiaries andassociates
Investments in capital ofsubsidiaries and associates
Long-term loans receivable

8,200

Capital surplus

8,094

Other

Long-term prepaid expenses

10,715
311
3,393
73

Prepaid pension costs

40

Deferred tax assets

2,895

Other
Allowance for
doubtful accounts
Total assets

388

Legal capital surplus

8,094

Retained earnings

1,719

Other retained earnings
Retained earnings brought
forwardTreasury shares

1,719

Valuation and translation adjustments
Valuation difference on
available-for-sale securities

2,873

Total net assets

49,064

Total liabilities and net assets

163,109(24)
163,109

―55―

1,719
(184)

2,873

Statements of Income
FY2021(Apr’21 – Mar’22)(Million yen)
Net sales

95,823

Cost of sales

82,699Gross profit

13,124

Selling, general andadministrative expenses

12,965

Operating income

159

Non-operating income
Interest and dividend income

3,807

Miscellaneous income

1,397

5,204

Non-operating expenses
Interest expenses

506

Loss for ship lease

116

Miscellaneous losses

151

Ordinary income

774
4,589

Extraordinary income
Gain on disposal of non-current
assetsGain on sales of investment
securities

1
1,042

Gain on sale of businesses

840

Reversal of allowance for
doubtful accounts for
subsidiaries and affiliates

285

Other

39

2,209

Extraordinary losses
Loss on disposal of non-current assets

341

Impairment loss

1,289

Loss on valuation of investment
securities
Provision of allowance for
doubtful accounts for
subsidiaries and associates
Loss on valuation of investments incapital of subsidiaries and associates
Loss on valuation of shares ofsubsidiaries and associates

776
1,572
719
395

Other

196

Profit before income taxes

5,291
1,507

Income taxes - current

142

Income taxes - deferred(428)

Profit

1,793

―56―

Audit reports
Accounting Auditor’s Report on Consolidated Financial Statements
Independent Auditors’ Report
May 24, 2022
Mitsubishi Paper Mills Limited
To the Board of Directors
Ernst & Young ShinNihon LLC.
Tokyo Office
Designated Limited Liability Partner
Partner responsible for audit services
Certified Public Accountant Akira Sato
Designated Limited Liability Partner
Partner responsible for audit services
Certified Public Accountant Masanori Abe
Audit opinion
We have audited the consolidated financial statements, comprising the consolidated balance sheet, the consolidated
statement of income, the consolidated statement of changes in equity and the related notes of Mitsubishi Paper Mills
Limited. for the year, from April 1, 2021 to March 31, 2022, pursuant to the provisions of Article 444, Paragraph 4 of
the Companies Act.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, thefinancial position and results of operations of the Corporate Group that consists of Mitsubishi Paper Mills Limited andits consolidated subsidiaries applicable to the consolidated fiscal year ended March 31, 2022, in conformity withaccounting principles generally accepted in Japan.
Basis for auditor’s opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities
under the auditing standards are described in the “Auditor’s responsibilities for the audit of the consolidated financial
statements” section. We are independent of the Company and its consolidated subsidiaries in accordance with theprofessional ethical regulations that are applicable in Japan, and we have fulfilled our other ethical responsibilities as
an auditor. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Other Information
The other information comprises the business report and its accompanying supplementary schedules. Management
is responsible for the preparation and disclosure of the other information. In addition, the Audit & Supervisory Boardand its members are responsible for overseeing the Company’s reporting process of the other information.
Our opinion on the consolidated financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with the consolidated
financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information,
we are required to report that fact.
We have no matters to report with respect to the other information.
Responsibilities of management, the Audit & Supervisory Board Member relating to consolidated financial
statements
Management’s responsibility is to create consolidated financial statements in accordance with corporate accounting
standards generally accepted in Japan and to present them properly. The responsibility includes establishing andoperating an internal control system that management considers necessary for creating consolidated financial
statements that do not include any significant misstatements stemming from injustice or errors and presenting themproperly.
In preparing the consolidated financial statements, management is responsible for assessing whether the preparationof the consolidated financial statements based on the going concern assumption is appropriate and for disclosing, asapplicable, matters relating to the going concern based on the corporate accounting standards generally accepted in―57―

Japan.
The responsibilities of the Audit & Supervisory Board Member lie in monitoring the directors’ performance of theirduties in the development and operation of the financial reporting process.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our responsibilities are to obtain reasonable assurance that the consolidated financial statements as a whole are freefrom material misstatements, whether due to fraud or error, and to express an opinion on the consolidated financial
statement as independent auditors in an auditor’s report. Misstatements can arise from fraud or error and are consideredmaterial if, individually or in aggregate, they could reasonably be expected to influence the decisions of users on thebasis of the consolidated financial statements.
As part of our audit in accordance with auditing standards generally accepted in Japan, we exercise professional
judgment and maintain professional skepticism throughout the audit as below:- Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud
or error, and design and perform audit procedures responsive to those risks. These audit procedures are selected
and performed, depending on the auditor’s judgment. In addition, we obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion.
- The purpose of the audit of the consolidated financial statements is not to express an opinion on the effectivenessof internal control. However, to design audit procedures that are appropriate in the circumstances, we examineinternal control relating to the audit when we assess risks.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
- Reach a conclusion on the appropriateness of the preparation of the consolidated financial statements bymanagement on the assumption of going concern and, based on the audit evidence obtained, whether material
uncertainties exist related to events or conditions that may cast significant doubt on the going concern assumption.
If a material uncertainty related to the going concern assumption is identified, we are required to draw attention to
it in our auditor’s report to the related notes in the consolidated financial statements or, if such notes on a material
uncertainty in the consolidated financial statements are inadequate, to express a modified opinion on the
consolidated financial statements. The auditor’s conclusions are based on audit evidence obtained on or before theauditor’s report date, but the risk remains that the company is unable to survive as a going concern due to mattersor circumstances in the future.
- Evaluate whether the presentation of the consolidated financial statements and notes are in accordance with thecorporate accounting standards generally accepted in Japan and whether the presentation, structure and content of
the consolidated financial statement, including related notes, and the consolidated financial statements represent
the underlying transactions and accounting events appropriately.
- Obtain sufficient and appropriate audit evidence regarding the financial information of the Company and its
consolidated subsidiaries to express an opinion on the consolidated financial statements. We are responsible for the
direction, supervision and performance of the audit of the consolidated financial statements. We remain solely
responsible for our audit opinion.
We report the planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit, and other matters required by the auditing standards
to the Audit & Supervisory Board Member.
We also report a statement that we have complied with the professional ethical regulations that are applicable inJapan regarding independence, matters that may reasonably be thought to bear on our independence, and the content
of safeguards, where applicable, to eliminate or reduce threats to the Audit & Supervisory Board Member.
Conflicts of interest
There is no conflict of interest between the Company and its consolidated subsidiaries and us or its engagement
partners which should be disclosed under the provisions of the Certified Public Accountants Act.
End

―58―

Accounting Auditor’s Report
Independent Auditors’ Report
May 24, 2022
Mitsubishi Paper Mills Limited
To the Board of Directors
Ernst & Young ShinNihon LLC.
Tokyo Office
Designated Limited Liability Partner
Partner responsible for audit services
Certified Public Accountant Akira Sato
Designated Limited Liability Partner
Partner responsible for audit services
Certified Public Accountant Masanori Abe
Audit opinion
We have audited, pursuant to Article 436, Paragraph 2, Item 1 of the Companies Act of Japan, the non-consolidated
financial statements, namely the non-consolidated balance sheets, non-consolidated statements of income, nonconsolidated statement of changes in net assets, notes to the non-consolidated financial statements and the related
supplementary schedules, of Mitsubishi Paper Mills Limited. (the “Company”) for the 157th fiscal year from April 1,
2021 through March 31, 2022.
In our opinion, the financial statements etc. referred to above present fairly, in all material respects, the financial
position and results of operations of Mitsubishi Paper Mills Limited. applicable to the 157th fiscal year ended March
31, 2022, in conformity with accounting principles generally accepted in Japan.
Basis for auditor’s opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities
under the auditing standards are described in the “Auditor’s responsibilities for the audit of the financial statementsetc.” section. We are independent of the Company in accordance with the ethical requirements that are relevant to our
audit of the financial statements in Japan, and we have fulfilled our other ethical responsibilities in accordance withthese requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Other Information
The other information comprises the business report and its accompanying supplementary schedules. Management
is responsible for the preparation and disclosure of the other information. In addition, the Audit & Supervisory Boardand its members are responsible for overseeing the Company’s reporting process of the other information.
Our opinion on the financial statements does not cover the other information and we do not express any form ofassurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information,
we are required to report that fact.
We have no matters to report with respect to the other information.
Responsibilities of management, the Audit & Supervisory Board Member relating to financial statements etc.
and related data
Management’s responsibility is to create financial statements etc. in accordance with corporate accounting standards
generally accepted in Japan and to present them properly. The responsibility includes establishing and operating aninternal control system that management considers necessary for creating financial statements etc. that do not include
any significant misstatements stemming from injustice or errors and presenting them properly.
In preparing the financial statements etc., management is responsible for assessing whether the preparation of thefinancial statements etc. based on the going concern assumption is appropriate and for disclosing, as applicable, mattersrelating to the going concern based on the corporate accounting standards generally accepted in Japan.
The responsibilities of the Audit & Supervisory Board Member lie in monitoring the directors’ performance of theirduties in the development and operation of the financial reporting process.
Auditor’s responsibilities for the audit of the financial statements etc.
Our responsibilities are to obtain reasonable assurance that the financial statements etc. as a whole are free frommaterial misstatements, whether due to fraud or error, and to express an opinion on the financial statements etc. as―59―

independent auditors in an auditor’s report. Misstatements can arise from fraud or error and are considered material if,
individually or in aggregate, they could reasonably be expected to influence the decisions of users on the basis of thefinancial statements etc.
As part of our audit in accordance with auditing standards generally accepted in Japan, we exercise professional
judgment and maintain professional skepticism throughout the audit as below:- Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud
or error, and design and perform audit procedures responsive to those risks. These audit procedures are selected andperformed, depending on the auditor’s judgment. In addition, we obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion.
- The purpose of the audit of the financial statements etc. is not to express an opinion on the effectiveness of internal
control. However, to design audit procedures that are appropriate in the circumstances, we examine internal control
relating to the audit when we assess risks.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
- Reach a conclusion on the appropriateness of the preparation of the financial statements etc. by management on theassumption of going concern and, based on the audit evidence obtained, whether material uncertainties exist related
to events or conditions that may cast significant doubt on the going concern assumption. If a material uncertainty
related to the going concern assumption is identified, we are required to draw attention to it in our auditor ’s reportto the related notes in the financial statements etc. or, if such notes on a material uncertainty in the financial
statements etc. are inadequate, to express a modified opinion on the financial statements etc. The auditor’s
conclusions are based on audit evidence obtained on or before the auditor’s report date, but the risk remains that thecompany is unable to survive as a going concern due to matters or circumstances in the future.
- Evaluate whether the presentation of the financial statements etc. and notes are in accordance with the corporate
accounting standards generally accepted in Japan and whether the presentation, structure and content of the financial
statement etc., including related notes, and the financial statements etc. represent the underlying transactions andaccounting events appropriately.
We report the planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit, and other matters required by the auditing standards
to the Audit & Supervisory Board Member.
We also report a statement that we have complied with the professional ethical regulations that are applicable inJapan regarding independence, matters that may reasonably be thought to bear on our independence, and the content
of safeguards, where applicable, to eliminate or reduce threats to the Audit & Supervisory Board Member.
Conflicts of interest
Neither we nor our engagement partners have any interest in the Company that should be disclosed pursuant to theprovisions of the Certified Public Accountants Act of Japan.

End

―60―

The Audit & Supervisory Board Member’ Report
Audit Report
Regarding the performance of duties by Directors for the 157th fiscal year from April 1, 2021 to March 31, 2022,
the Audit & Supervisory Board Member hereby submits its audit report, which has been prepared through discussions
based on the audit reports prepared by the respective Audit & Supervisory Board Member as follows:
1. Outline of Audit Methodology of the Audit & Supervisory Board Member(1) the Audit & Supervisory Board Member determined, among other things, the auditing policy and the assignmentof auditing duties, received reports regarding the status of execution of audit and its results from each Audit &Supervisory Board Member; received reports from Directors, other relevant employees and independent auditors
concerning the performance of their duties; and when necessary, requested them to provide explanations.
(2) In accordance with the auditors’ auditing standards specified by the Audit & Supervisory Board Member and incompliance with the auditing policies and the assignment of auditing duties, each Audit & Supervisory Board
Member ensured effective communication with Directors, employees in the internal audit division and otherrelevant employees, and made efforts to collect the necessary information and improve the auditing environment.
Each Audit & Supervisory Board Member carried out the audit in the following manner:(i)

Attended the meetings of the Board of Directors and other important meetings; received reports from
Directors, employees and other relevant persons regarding the performance of their duties; requested themto provide explanations where necessary; examined important decision documents and associatedinformation; and studied the operations and financial conditions at the head office as well as other principal
offices and plants. The Audit & Supervisory Board Member also shared information and communicatedwith the Directors and auditors, etc. of subsidiaries and received business reports from subsidiaries asnecessary.

(ii) The Audit & Supervisory Board Member expressed their opinion after regularly receiving reports, andrequesting explanations as needed, from Directors, employees and other relevant persons about the contentsof resolutions of the Board of Directors regarding the implementation of systems required to be
implemented to ensure the proper operations of corporations under Article 100, Paragraph 1 and Paragraph
3 of the Enforcement Regulations of the Companies Act including a system to ensure that the performanceof duties by Directors is in compliance with the laws and regulations, and the Articles of Incorporation,
which are stated in the business report, and the formulation and operation of the system (internal control
system) are implemented according to the resolutions. As for internal control over financing reporting, theyreceived reports mainly from Directors and Ernst & Young ShinNihon LLC. on the evaluation and audit
status of such internal control, and ask for explanations as required.
(iii) We have reviewed the basic policy regarding how the persons who control decisions on MPM’s financial
and business policies should be and each of the initiatives described in the “Basic Policy on Control over
the Company” in the business report, based on the deliberations at the meetings of the Board of Directors
and other meetings.
(iv) They monitored and verified whether the Accounting Auditor maintains an independent position andconducts appropriate audits, received a report from the Accounting Auditor on the performance status of its
duties and asked for explanations as necessary. Also, the Audit & Supervisory Board Member received
notification from the Accounting Auditor to the effect that “systems to ensure that duties are executed
appropriately” (the matters listed in each item of Article 131 of the Regulation on Corporate Accounting)had been established in accordance with “Quality Control Standards for Auditing” (Business Accounting
Council, October 28, 2005) and where necessary requested explanations.
Based on the aforementioned methods, the Audit & Supervisory Board Member―61―

examined for the said fiscal yearthe business report and business schedules, the non-consolidated financial statements (non-consolidated balance sheet,non-consolidated income statement, non-consolidated statement of changes in shareholders’ equity and notes to nonconsolidated financial statements) and supplementary schedules and consolidated financial statements (consolidatedbalance sheet, consolidated income statement, consolidated statement of changes in shareholders’ equity and notes toconsolidated financial statements) and supplementary schedules.
2. Results of audit(1) Results of audit of business report, etc.
(i)

In our opinion, the business report and supplementary schedules fairly represent the Company’s condition inaccordance with the related laws and regulations, and the Articles of Incorporation.
(ii) With regard to the performance of duties by Directors, we have found no evidence of wrongful action ormaterial violation of related laws and regulations, nor of the Articles of Incorporation.
(iii) In our opinion, resolutions of the meetings of the Board of Directors regarding the internal control system
are fair and reasonable. Further, we have found no matters requiring comment regarding the contents of thebusiness report and the performance of duties by Directors in relation to the internal control system, includinginternal control over financial reporting.
(iv) We have found no matters requiring comment regarding the “Basic Policy on Control over the Company” inthe business report. We acknowledge that none of the efforts based on the Basic Policy are detrimental to thecommon interests of our shareholders and are not intended to maintain the status of our corporate officers.
(2) Results of audit of financial statements and their annexed detailed statements
In our opinion, the methods and results employed and rendered by the independent auditors, Ernst & Young
ShinNihon LLC. are fair and reasonable.
(3) Audit results concerning consolidated financial statements
In our opinion, the methods and results employed and rendered by the independent auditors, Ernst & Young
ShinNihon LLC. are fair and reasonable.
May 26, 2022
Mitsubishi Paper Mills Limited Audit & Supervisory Board Member
Full-time Audit & Supervisory Board Member Koichi Nakayama Seal
Audit & Supervisory Board Member Hiroaki Tonooka Seal
Audit & Supervisory Board Member Takeshi Kobayashi Seal
Audit & Supervisory Board Member Satoshi Takizawa Seal
(Note) Audit & Supervisory Board Members Hiroaki Tonooka, Takeshi Kobayashi and Satoshi Takizawa are Outside Audit &Supervisory Board Members provided for in Article 2, Item 16 and Article 335, Paragraph 3 of the Companies Act.

―62―