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 ORIGINAL SHALL PREVAIL.

Matters Concerning Electronic Provision Measure for
the Convocation Notice for the 158th Ordinary Shareholders’ Meeting(From April 1, 2022 to March 31, 2023)
Systems necessary to ensure the properness of operations
Outline of the situations of the operation of the systems necessary to ensure the properness of operations
Basic policy for controlling the management of the Company
Consolidated statements of changes in shareholders’ equity
Notes to consolidated financial statements
Statements of changes in shareholders’ equity
Notes to non-consolidated financial statements

Mitsubishi Paper Mills Limited

The description of each of the items listed above in the document (document describing mattersconcerning the electronic provision measure) to be delivered to shareholders who request delivery of
documents is omitted pursuant to the provisions of laws and regulations and Article 15 of the Articles ofIncorporation of the Company.

Systems necessary to ensure the properness of operations
The following is the Company’s basic policy on the system to ensure the conformity of the performance of
duties of Directors to laws and regulations and the Company’s Articles of Incorporation and the system toensure the appropriateness of the Company’s other operations and the operations of the corporate groupconsisting of the Company and its subsidiaries. (Last revised on: March 31, 2023)- Core approach to corporate governance The Company carries out corporate activities based on the corporate philosophy of the MPM Group,
including “living up to the trust of its customers in the world market,” “staying constantly on the leadingedge of technology,” and “contributing to preserving the global environment and creating a recycling society.”
With this philosophy, the Company implements corporate group management focusing on the sustainablegrowth of the MPM Group and society, raises its management transparency, and works to improve its
corporate governance.
To take specific steps towards achieving these goals, the Company has established Mitsubishi Paper Mills
Limited Basic Policies on Corporate Governance.
- Overview of corporate organization The Company has adopted the company with an Audit & Supervisory Board as its institutional design. The
Company has appointed three independent Outside Directors, who account for more than one-third of thetotal number of Directors, and has built a system that sufficiently plays the roles required of the Board of
Directors. It separates the supervisory function and executive function and has adopted the Executive Officer
system to streamline the Board of Directors, accelerate management decision-making, and define theresponsibility for the performance of duties.
The Company has created a Nomination and Compensation Committee with an independent Outside Director
as the chairperson as an advisory body to the Board of Directors in order to ensure objectivity andtransparency of the designation and remuneration of management.
In addition to monthly meetings, the Board of Directors holds extraordinary meetings of the Board of
Directors as necessary to determine and supervise matters specified by laws and regulations and the Articles
of Incorporation and the performance of important duties.
Audit & Supervisory Board Members including Outside Audit & Supervisory Board Members haveestablished the Audit & Supervisory Board and hold meetings of the Audit & Supervisory Board on a regularbasis and as necessary. Executive Officers and other executives hold management meetings, in principle,
once a week to determine management policies and strategies and basic business strategies in an effort toensure prompt and optimal decision-making, implement thorough group governance, discuss group strategies
and share important information.
In the performance of duties, the Company has adopted a business unit system to strengthen its operational
structure by assigning responsibility and delegating authority to each business unit for revenue.
The Company defines the scope of organizational responsibility according to the rules for the division ofduties and makes decisions appropriately based on its internal rules.
The Company appoints an executive responsible for sustainability to implement corporate groupmanagement focusing on sustainability and establishes a Group-wide Sustainability Promotion Committee
headed by the President. The committee coordinates the entire sustainability promotion activities (legal
compliance, risk management, human resource management, safety and health, the environment, productsafety and quality, human rights and labor, information disclosure and public relation, social contribution,and more) and establishes basic policies for sustainability promotion and yearly plans. The Board of
Directors deliberates on such policies and plans.

-1-

- Basic policy 1. System to ensure that the execution of the duties of Directors and employees conforms with laws,
regulations, and the articles of incorporation
The Company has established the Code of Conduct of the Mitsubishi Paper Mills Group and Mitsubishi
Paper Mills Group Compliance Conduct Standards. The President repeatedly explains the spirit of suchstandards to the executives and employees of the Company and carries out activities to promote a deeper
understanding of corporate ethics, thereby ensuring that legal compliance is a precondition for all corporate
activities.
The Compliance Committee, which operates under the control of the Corporate Governance Management
Dept. as a secretariat, will be placed under the Sustainability Promotion Committee. The Compliance
Committee will carry out training and educational activities to disseminate the Code of Conduct andStandards and ensure legal compliance for penetration throughout the Group.
If executives and employees discover a compliance problem, they will promptly report it to the department
responsible for handling the problem through their office organization or report it through the internal hotline
under the jurisdiction of the Internal Audit Dept. or through a more independent external hotline. The
department to handle such problem will determine measures to prevent recurrence after consultations with
Corporate Governance Management Dept., Human Resources Dept., or Internal Audit Dept.
The Internal Audit Dept. examines and evaluates the systems of management and operation in overallbusiness activities and the status of implementation in view of lawfulness and rationality and ensures thereliability of financial reports and raises management efficiency.
The General Administration Dept. is responsible for preserving the Company’s assets and manages theacquisition, use, and disposal of assets to ensure appropriate procedures taken and approval obtained.
The General Administration Dept. reports the overview of such compliance activities and the state of whistleblowing to the Board of Directors.
2. Systems to store and manage information on the execution of duties by Directors
To manage and maintain information related to the performance of duties of Directors, the Company records
and preserves information related to their performance of duties as documents or electromagnetic informationaccording to Document Management Regulations and Information Management Regulations. Directors andAudit & Supervisory Board Members may inspect these documents, etc. at all times.
3. Regulations concerning the management of risk of loss and other systems
The Company considers it important to appropriately manage various risks arising from corporate activities
for the development of the Company and an increase in its corporate value.
Under the Sustainability Promotion Committee, Risk Management Committee controlled by General
Administration Dept. is established to operate risk management of the entire Group. The Risk Management
Committee recognizes and understands risks affecting corporate management, develops systems in response
to such risks, and reports their status to the Board of Directors. Head office departments and factories
establish rules and prepare manuals to ensure appropriate operations, build advance preventive systems at
normal times, take measures to prevent recurrence when a problem has arisen, and develop a system of
promptly responding to an emergency.
4. System to ensure the efficient execution of duties by Directors
The Company establishes a consolidated basic plan as targets in its Medium-term Management Plan.
Directors in charge determine specific targets and efficient methods for achievement to be implemented byeach department (including delegation of authority to Executive Officers). The Company sets key
performance indicators (KPIs) in each fiscal period and manages the progress. The Board of Directors
regularly evaluates the results and promotes improvement such as the reduction or elimination of factors-2-hindering efficiency, thereby building a system to raise company-wide operation efficiency.
5. System to ensure the proper business operation of the Group consisting of the Company and its
subsidiaries
According to its Subsidiary Management Regulations, the Company supervises and provides guidance to its
subsidiaries to raise the appropriateness of the Group’s subsidiary management based on a policy of placing
importance on independence and respecting the autonomous decision-making of subsidiaries.
A. System to report matters concerning the execution of duties by Directors of subsidiaries to the Company
According to its Subsidiary Management Regulations, the Company builds a system for departments toreceive reports from subsidiaries under their management on a regular basis and as necessary and a system
requiring subsidiaries to obtain the approval of departments controlling them.
Key subsidiaries provide the Company’s executives with regular management reports.
B. Rules and other systems for managing the risk of loss at subsidiaries
The Company has its subsidiaries participate in the Risk Management Committee and coordinates theGroup’s risk management.
C. System to ensure that Directors, etc. of subsidiaries efficiently perform their duties
The Company’s departments in charge of subsidiaries supervise and provide them with guidance according
to the Subsidiary Management Regulations to achieve the basic plan set as a target in its Medium-termManagement Plan. The Company sets KPIs also for its subsidiaries and manages the progress.
D. System to ensure that subsidiaries’ Directors, etc. and employees’ performance of their duties conforms
with laws, regulations and the Articles of Incorporation
The Company has established the Code of Conduct of the Mitsubishi Paper Mills Group and Mitsubishi
Paper Mills Group Compliance Conduct Standards, has its subsidiaries participate in the Compliance
Committee, and improves the legal compliance of the Group, including the subsidiaries.
The Company provides the entire Group, including subsidiaries, with compliance training every year toensure legal compliance of the Group.
It establishes hotlines including subsidiaries as a system of direct reporting to the Company’s Internal Audit
Dept. or an external specialized company. In addition, relevant departments perform audits of subsidiaries
as necessary according to the Subsidiary Management Regulations to ensure the appropriateness of theGroup’s operations.
6. Systems to ensure that audits by Audit & Supervisory Board Members are performed effectively
The Company implements the following and builds a system of supporting the audits performed by Audit &Supervisory Board Members to ensure their effectiveness.
A. Matters concerning the system of ensuring the effectiveness of audits performed by Audit & Supervisory
Board Members
The Company holds regular meetings for Audit & Supervisory Board Members to improve their mutual
understanding with the President and Chief Executive Officer about the Company’s business issues, thedevelopment of the audit environment of the Audit & Supervisory Board Members, etc.
Audit & Supervisory Board Members, Internal Audit Dept., and accounting auditors exchange opinions toestablish effective cooperation.
The Company cooperates with the Audit & Supervisory Board Members in their performance of duties tofacilitate communication with Directors of subsidiaries and the collection and exchange of information anddevelops an environment for cooperation with external experts such as lawyers and certified public-3-accountants if deemed necessary by the Audit & Supervisory Board Members.
B. Matters concerning employees when an Audit & Supervisory Board Member requests that employees
assist with his/her duties
The Company may appoint assistants to the Audit & Supervisory Board Members, who assist the duties of
the Audit & Supervisory Board Members, and have the Internal Audit Dept. or Accounting Dept. as
assistant organizations. Audit & Supervisory Board Members may instruct employees in the Internal Audit
Dept. and Accounting Dept. as necessary.
Internal Audit Dept. performs internal audits requested by Audit & Supervisory Board Members throughconsultations with them and reports the results to the Audit & Supervisory Board Members.
C. Matters concerning the independence of the employees specified in B from Directors, and mattersintended to ensure the effectiveness of instructions given to such employees
The Company ensures that employees assisting the duties of Audit & Supervisory Board Members follow
the orders of the Audit & Supervisory Board Members, and that Directors, supervisors, etc. do notunreasonably limit the orders of the Audit & Supervisory Board Members given to such employees.
D. Systems related to reporting to an Audit & Supervisory Board Member- Systems of reporting to Audit & Supervisory Board Members by Directors and employees
Directors of the Company report the following to Audit & Supervisory Board Members to promote theeffective performance of duties of Audit & Supervisory Board Members: 1. Matters discussed or reported
at management meetings, 2. Matters that may cause significant damage to the Company, 3. Matters
important for the monthly management status, 4. Important matters concerning internal audits and risk
management, 5. Serious violations of laws and regulations or the Articles of Incorporation, 6. The status
and details of reporting through hotlines (a system in which reports to external liaisons are directly sent
to Audit & Supervisory Board Members), and 7. Other matters important for legal compliance.
Important decision-making documents of head office departments are delivered to Audit & Supervisory
Board Members.
- System to report to the Audit & Supervisory Board Members by Directors, etc. and employees of theCompany’s subsidiaries, and people who have received reports from them
According to the Subsidiary Management Regulations, the Company uses a system in which departmentsthat have received important reports from subsidiaries also report to Audit & Supervisory Board Members.
Subsidiaries may directly report to the Audit & Supervisory Board Members of the Company, and the
Audit & Supervisory Board Members may also directly interview subsidiaries.
E. System for ensuring that personnel who make a report under paragraph D. do not receive unfavorable
treatment due to such report
The Company clearly states in Mitsubishi Paper Mills Group Compliance Conduct Standards that the mereact of making a report would not place the reporter at any disadvantage and ensures that no reporter would
be treated unfairly by the Company and its subsidiaries.
F. Policy on treatment of expenses incurred in the performance of the duties of Audit & Supervisory Board
Members
The Company promptly handles expenses incurred in the performance of duties of Audit & Supervisory
Board Members upon receiving a request for payment.

-4-Outline of the situations of the operation of the systems necessary to ensure the properness ofoperations
On March 1, 2023, the Company revised the Code of Conduct of the Mitsubishi Paper Mills Group.
Recognizing that the importance of sustainability is growing, the Company has reviewed the Code of
Conduct, the action guidelines for the Group’s executives and employees, by reaffirming its priority on safety
and its emphasis on compliance.
The overview of the operation status of the system to ensure the appropriateness of operations implemented
in the fiscal year ended March 31, 2023 is as follows.
(Systems for the execution of duties)
During the fiscal year ended March 31, 2023, eight Directors (including three independent Outside Directors)
who make up the Board of Directors, three Audit & Supervisory Board Members (including two Outside
Audit & Supervisory Board Members) who make up the Audit & Supervisory Board, and 16 Executive
Officers (including four Executive Officers concurrently holding the position of Directors) performed theirduties. A total of 12 ordinary meetings of the Board of Directors, three extraordinary meetings of the Boardof Directors, and 13 meetings of the Audit & Supervisory Board were held to make important decisions on
the Company’s management and supervise and audit the performance of duties.
With regard to matters to be discussed at Board meetings, the Company has enhanced the prior briefings for
Outside Directors and Outside Audit & Supervisory Board Members to facilitate their understanding of thedeliberations and invigorate discussions, and has revised the Regulations and Bylaws of the Board of
Directors to clarify the standards for agenda items.
In addition, to evaluate the effectiveness of the Board of Directors, the Company surveys and interviews all
Directors and Audit & Supervisory Board Members and discusses the results at meetings of the Board of
Directors to share the understanding of the current condition and how to deal with issues among them inorder to raise the effectiveness of the Board of Directors.
(Compliance structure)
During the fiscal year ended March 31, 2023, the Compliance Committee met twice, primarily to develop a
training plan and confirm their implementation, confirm trends related to business and human rights andconsider initiatives to address human rights issues, inspect the status of legal procedures, and confirm thestatus of reports made through the hotline.
Training based on the cascade method (theme: content related to the revised Whistleblower Protection Act
and the whistleblower system) was conducted for all employees (including part-time and temporary
employees) of the Group companies in Japan, with line managers deploying the training to their workplaces.
A new compliance promotion leader system has been established, and appointed promotion leaders aredeveloping initiatives to share information and raise compliance awareness at each workplace. In addition,
the intranet is used to provide information on a regular basis.
(Risk management structure)
During the fiscal year ended March 31, 2023, the Risk Management Committee met twice to oversee andpromote activities related to the Group’s risk management, including identifying, analyzing and evaluating
risks that exist in the Group in response to changes in the business environment, formulating risk response
measures, examining the business continuity plan (BCP), and conducting training on emergency responses.
In addition, viewing responses to climate change as an important business issue, the Group examined anddisclosed climate change-related risks in a company-wide, cross-functional TCFD response project teamunder the Risk Management Committee.
(Management of subsidiaries)
The Company’s relevant department provides subsidiaries with guidance and supervises them to rationalize-5-and improve the Group’s subsidiary management according to its Subsidiary Management Regulations. In
the fiscal year ended March 31, 2023, the Company revised the Subsidiary Management Regulations tostrengthen the Group’s integrated management promotion system, and the relevant departments in charge
conducted audits of subsidiaries to confirm that the Regulations are operated appropriately.
(Audit & Supervisory Board Members’ audits)
Based on the audit policy and audit plan established at the beginning of the fiscal year, the Company’s Audit& Supervisory Board Members fulfilled their responsibility to establish a good corporate governance system
by attending meetings of the Board of Directors, management meetings, and other important meetings,
reviewing documents, conducting on-site audits at factories, subsidiaries, and other offices, holding regularmeetings with the President and Outside Directors, and interviewing department managers and representative
directors of subsidiaries. They exchanged opinions and share information with accounting auditors, Internal
Audit Dept., Accounting Dept., and auditors of subsidiaries to enhance coordination with them in an effort
to raise the effectiveness and efficiency of auditing.

-6-Basic policy for controlling the management of the Company(i) Details of the Basic Policy
The Group carries out corporate activities based on the corporate philosophy of the MPM Group, including“living up to the trust of its customers in the world market,” “staying constantly on the leading edge oftechnology,” and “contributing to preserving the global environment and creating a recycling society.” The
Company’s duty is to maximize its corporate value or the common interests of shareholders through thesustainable growth of the Group and society based on this philosophy, and its principle is to be supported bypeople who have become its shareholders through free market trading. However, the Company’s Basic Policy
on a threat that such corporate value and/or the common interests of shareholders may be impaired by anindividual and/or his/her group (“Hostile Bidders”) aiming to acquire shares of the Company having 20% ormore of voting rights (“Controlling Shares”) is to take measures necessary to protect and increase theCompany’s corporate value and the common interests of shareholders within the limit allowed by laws andregulations and the Articles of Incorporation by regarding such Hostile Bidders as unqualified to have control
over decisions about the financial and business policies of the Company.
(ii) Special initiatives to contribute to the realization of the Basic Policy
The Company is executing a new “Medium-Term Management Plan (FY2023/3-FY2025/3)” thatincorporates measures to transform its business portfolio and contribute to carbon neutrality from a mediumto long-term perspective and is based on the future vision of the Group. It is working toward transforming
itself with the creation of a new Mitsubishi Paper Mills Group, while enhancing its corporate value andmaximizing the common interests of shareholders. Also, the Group is working on sustainability promotion
activities by establishing the Sustainability Promotion Committee and assigning a director in charge, in orderto grow sustainably by creating social values and contribute to a sustainable society through its business.
Moreover, in accordance with the Basic Policies on Corporate Governance formulated in October 2015 (final
revision in June 2022), the Company is also working to enhance the corporate governance.
(iii) Activities to prevent decisions on the Company’s financial affairs and business policies from being
controlled by an inappropriate party in light of the Basic Policy
At the Board of Directors’ meeting held on May 30, 2022, the Company passed a resolution to continue its
policy on responses to large-scale purchases of the Company’s shares (the “Former Plan”), which had been
approved by shareholders at the 154th Ordinary Shareholders’ Meeting held on June 26, 2019, as one of theactivities to prevent decisions on the Company’s financial affairs and business policies from being controlled
by an inappropriate party in light of the Basic Policy after a necessary revision (the “Plan”), which wasapproved by shareholders at the 157th Ordinary Shareholders’ Meeting held on June 28, 2022. Additionally,
the Company appointed three Independent Committee members, Mr. Yoshihiro Kataoka, Mr. Kazunori
Shinohara, and Mr. Somitsu Takehara, due to the continuation of the above plan.
The overview of the Plan is provided below. For more details, please read the press release, “Notice of Partial
Amendments to the Response Policies on Large-Scale Purchases of MPM’s Shares (Takeover Defense
Measures) and Continuance Thereof” dated May 30, 2022, on the Company’s website.
(URL for reference: https://www.mpm.co.jp/company/news/pdf/2022/20220530-3.pdf)
A. Objectives of the Plan
The purpose of the Plan is to require the Large-Scale Purchaser to provide necessary information in advanceand to have a period of consideration and examination, thereby enabling shareholders to make anappropriate decision on whether to accept such a large-scale purchase, enabling MPM’s Board of Directors
to present its opinions on whether to accept such proposal to shareholders or an alternative proposal in
response to a recommendation from the Independent Committee, or enabling the Board of Directors tonegotiate with the Large-Scale Purchaser for the benefit of shareholders, thereby preventing decisions on
the Company’s financial affairs and business policies from being controlled by an inappropriate party in-7-light of the Basic Policy and ensuring and raising the Company’s corporate value or/and the common
interests of shareholders.
B. Procedures for taking the countermeasures based on the Plan(a) Large-scale purchases subject to the measures
The measures based on the Plan may be taken when an act corresponding to or that may correspond tothe overview or any of the following 1 through 3 has been or will be conducted.
1. Purchase of shares of the Company that makes the percentage (the percentage of shares, etc. definedin paragraph 4, Article 27-23 of the Financial Instruments and Exchange Act; the same applies
hereinafter) of shares held by a specific shareholder of the Company 20% or higher
2. Purchase of shares of the Company that makes the sum total of the percentage (the percentage ofshares, etc. defined in paragraph 8, Article 27-2 of the Financial Instruments and Exchange Act; thesame applies hereinafter) of shares held by a specific shareholder of the Company and the percentageof shares held by a specially related party of the specific shareholder of the Company 20% or higher
3. An act conducted by a specific shareholder of the Company and another shareholder of the Company,
which results in an agreement or other acts making them joint holders of the Company’s shares or an
act of establishing a controlling or cooperative relationship between the two shareholders (limited toa case in which the sum total of the percentages of shares held by the two shareholders becomes 20%
or higher)(b) Request to Large-Scale Purchaser for information
The Large-Scale Purchaser must submit and provide a letter of intent and information about a large-scalepurchase in advance of the start or implementation of an act of large-scale purchase.
(c) Establishment of assessment period for the Board of Directors
The Board of Directors establishes a period of up to 60 days for a purchase of all shares of the Company
through a takeover bid accepting only cash (yen currency) as the consideration and up to 90 days forlarge-scale purchase in other forms, as the assessment period for the Board of Directors to evaluate,
examine, raise opinions, develop an alternative plan, and negotiate with the Large-Scale Purchaser inview of ensuring and increasing the Company’s corporate value and/or the common interests ofshareholders.
(d) Recommendation of Independent Committee and resolution of the Board of Directors
The Independent Committee recommends that the Board of Directors to take measures against a largescale purchase within, in principle, five business days following the demand of the Board of Directors to
the Large-Scale Purchaser for correction if the Large-Scale Purchaser has committed a serious violationof the rules for large-scale purchase.
If, however, the Large-Scale Purchaser has complied with the rules for large-scale purchase, theIndependent Committee recommends the Board of Directors, in principle, not to take measures against
the large-scale purchase. However, the Independent Committee recommends that the Board of Directors
take measures if the Large-Scale Purchaser is deemed to have certain characteristics, such as a so-calledgreenmailer.
The Board of Directors decides whether to take measures and resolves other issues while respecting therecommendation of the Independent Committee to the maximum extent possible.
(e) Resolution of a general meeting of shareholders to confirm the shareholders’ intention
If the Board of Directors 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 theBoard of Directors deems it reasonable to implement the countermeasure in the case where the LargeScale Purchaser complies with the Large-Scale Purchase Rules, the Board of Directors will convene ageneral meeting of shareholders to confirm the shareholders’ intention as soon as possible.
If the proposal to implement the countermeasure has been passed at the general meeting of shareholders
to confirm the shareholders’ intention, the Board of Directors will make a resolution on the-8-implementation of the countermeasure against the Large-Scale Purchaser. However, if the proposal to
implement the countermeasure is rejected, the countermeasure will not be implemented against the Largescale Purchase.
(f) Specific contents of the countermeasure
The measures against large-scale purchases taken by the Company based on the Plan will, in principle,
be the allotment of share acquisition rights without contribution.
C. Feature of the Plan(a) Establishment of the Basic Policy
The Plan was adopted after the Basic Policy for the conditions of a party that controls the Company’s
financial affairs and business policy was established.
(b) Establishment of Independent Committee
The Company establishes the Independent Committee to ensure the necessity and appropriateness of thePlan. When calling for countermeasures, the Board of Directors must ensure the fairness of the decisionand respects the recommendation of the Independent Committee to the maximum extent possible in order
to eliminate any arbitrary decision by the Board of Directors.
(c) Approval for the Plan at Shareholders’ Meeting
The continuation of the anti-takeover measures under the Plan was approved by the Company’s
shareholders at the 157th Ordinary Shareholders’ Meeting held on June 28, 2022.
(d) Timely disclosure
The Board of Directors makes the timely and appropriate disclosure of the required information pursuant
to the applicable laws and regulations and the rules of the financial instrument exchange.
(e) Effective term of the Plan
The term of the Plan shall expire at the conclusion of the Ordinary Shareholders’ Meeting pertaining to
the last business year ending within three (3) years after the conclusion of the 157th Ordinary
Shareholders’ Meeting held on June 28, 2022.
D. Influence on our shareholders(a) Impact of the revision of the Former Plan on shareholders
The revision of the Former Plan to the Plan has no direct and specific effect on the legal rights andeconomic interests of shareholders.
(b) Impact of issuing share acquisition rights on shareholders
While the per share value of MPM’s shares held by the shareholders would be diluted when shareacquisition rights are issued without contribution as a countermeasure, the value of all shares of MPM
held by the shareholders would not be diluted. Therefore, no direct, specific impact on the legal rights
and economic interests of the shareholders is expected to occur. However, the legal rights and economic
interests of those who correspond to the exceptions specified in the Plan may be affected as a consequenceof the countermeasures implemented.
(iv) Decision of the Board of Directors on the above activities and reason for the decision
The special activities contributing to the realization of the Basic Policy specified in the above section (ii) are
specific measures for raising the corporate value of MPM and/or the common interests of shareholders, which
are considered to be precisely in line with the Basic Policy of MPM.
As stated in the paragraph A in the above section (iii), the Board of Directors of MPM believes that the Plan
was adopted for the purpose of ensuring and raising the corporate value and/or the common interests ofshareholders and is in line with the Basic Policy. The Board of Directors of MPM does not believe that thePlan will impair the corporate value of MPM or the common interests of shareholders and will not act tomaintain the positions of the executives of MPM, in particular due to the following: 1) the Plan will beabolished immediately if a proposal to abolish the Plan is approved at a Shareholders’ Meeting, and the-9-intentions of shareholders are prioritized in the sense that the continuation of the Plan is contingent onshareholder approval, and in certain cases, the confirmation of the will of shareholders at the general meetingof shareholders to confirm the shareholders’ intention is required regarding the appropriateness of
implementing countermeasures, 2) the Plan requires the establishment of an Independent Committee
maintaining a high level of independence, whose recommendation is required when taking countermeasuresin all cases, and 3) the standards used to make decisions on whether to take, not to take, or to cancel acountermeasure has been established.

- 10 -

Consolidated statements of changes in shareholders’ equity
From April 1, 2022 to March 31, 2023
(Million yen)
Shareholders’ equity
Capital stock
Balance at beginning of period

Capital surplus

Retained earnings

Treasury shares

Total shareholders’equity6,488

13,962(228)

56,78436,561

Changes during period
Loss attributable to owners ofparent

(571)

(571)

Purchase of treasury shares

(214)

(214)

Disposal of treasury shares

11

11

Change in scope of consolidation

35

(32)

2

Net changes in items other thanshareholders’ equity
－

35

(604)

(202)

(771)

36,561

6,524

13,357(430)

56,012

Total changes during period
Balance at end of period

Accumulated other comprehensive income
Total
Valuation
Foreign currency Remeasurements
accumulateddifference ontranslationof defined benefit
otheravailable-for-saleadjustment
planscomprehensive
securities
incomeBalance at beginning of period

4,688

952

7,182

12,824Non-controllinginterests

Total net assets

569,613

Changes during period
Loss attributable to owners ofparent(571)

Purchase of treasury shares(214)

Disposal of treasury shares

11

Change in scope of consolidation

2

Net changes in items other thanshareholders’ equity

843

158

2,189

3,191

8

3,199

Total changes during period

843

158

2,189

3,191

8

2,428

5,532

1,111

9,372

16,015

13

72,041

Balance at end of period(Note) The stated amounts are rounded down to the nearest million yen.

- 11 -

Notes to consolidated financial statements(Significant matters that form the basis for preparing consolidated financial statements)
1. Scope of consolidation(1) Number of consolidated subsidiaries: 24
Names of major consolidated subsidiaries

Mitsubishi Oji Paper Sales Co., Ltd.
Kitakami HiTec Paper Corporation
Diamic Co., Ltd.
KJ SPECIALTY PAPER Co., Ltd.
Mitsubishi Paper Holding (Europe) GmbH

Mitsubishi HiTec Paper Europe GmbHIn the fiscal year under review, Katsumata Co., Ltd. has been included in the scope of consolidation because of its increased
importance.
(2) Names of major non-consolidated subsidiaries:
Names of major non-consolidated subsidiaries
MP Juarez, LLC.
Reason for exclusion from the scope of consolidation The non-consolidated subsidiaries (5 companies) have been
excluded from the scope of consolidation as they are all small insize and the amounts of total assets, net sales, profit or loss
(amount corresponding to equity interest) and retained earnings(amount corresponding to equity interest) do not materially impact
the consolidated financial statements.
2. Matters related to the application of the equity method(1) Number of affiliates accounted for using equity method: 3Names of major equity method companies

MPM Oji Eco Energy Co., Ltd.
Hyogo Clay Co., Ltd.
Forestal Tierra Chilena Ltda.

(2) Names, etc. of non-consolidated subsidiaries and affiliates to which the equity method does not apply
Name of major company
Reason for not applying the equity method

MP Juarez, LLC.
The profit/loss (corresponding to the equity owned by theCompany), retained earnings (corresponding to the equity ownedby the Company), and other factors of the companies (10companies) excluded from the application of the equity method
have a negligible impact on the consolidated financial statements
and lack overall significance.

(3) Matters deemed particularly important to be stated concerning the procedures for the application of equity method
The financial statements used for equity method companies having different accounting periods are based on the business yearsof the respective companies.
3. Fiscal years of consolidated subsidiaries
The period-end date of the following six consolidated subsidiaries is December 31.
Mitsubishi Paper Holding (Europe) GmbH
Mitsubishi HiTec Paper Europe GmbH
Mitsubishi Imaging (MPM), Inc.
MPE Real Estate GmbH & Co. KG
Zhuhai MPM Filter Limited
MPM Hong Kong Limited
The consolidated financial statements incorporate financial statements as of December 31 with adjustments necessary forconsolidation for significant transactions arising during the period up to the date of consolidated settlement.

- 12 -

4. Notes regarding accounting policies(1) Valuation standards and methods for important assets(i) Securities
Available-for-sale securities
Securities other than shares, etc. without market valueMarket value method (Valuation differences are reported as a component of shareholders’ equity and the cost of
securities sold is calculated using the moving average method.)
Shares, etc. without market value
Stated at cost determined by the moving-average method(ii) Derivative transaction
Stated at market value(iii) Inventories
Stated primarily at cost using the periodic average method and the moving-average method(The value in the balance sheet is calculated by the method of book value devaluation based on lowering of profitability)(2) Depreciation method for important depreciable assets(i) Property, plant and equipment (excluding leased assets)
Buildings
Straight-line method
Property, plant and equipment excluding buildings
Straight-line method. The declining-balance method is used for the MPM head office and other offices and certain of its
subsidiaries.
The straight-line method is applied for structures acquired from April 1, 2016.
(ii) Intangible assets (excluding leased assets)
The straight-line method is applied. Software (used in the Company) is amortized over the estimated useful life of thesoftware (five years) in the Company.
(iii) Leased assets
Leased assets relating to finance leases wherein ownership of the leased asset does not transfer to the lessee
The straight-line method on the assumption that the lease term is the useful life and residual value is zero.
(3) Accounting standards for significant allowances and provisions(i) Allowance for doubtful accounts
To prepare for possible losses on uncollectible receivables held as of the end of fiscal year, the Company and its domestic
subsidiaries provide allowances equal to the estimated amount of uncollectible receivables for general receivables based on
historical rates and for specific receivables, including doubtful receivables, based on consideration of their individualcollectability.
Allowances for doubtful accounts at overseas subsidiaries are posted in accordance with applicable regulations of theirrespective countries.
(ii) Provision for loss on sale of businesses
To prepare for a loss on the transfer of business, the estimated amount of loss is recorded.
(iii) Provision for share awards
To prepare for the issuance of the Company’s shares pursuant to regulations for the stock-based compensation of Directors
and Executive Officers, the portion of the estimated amount to be paid in the consolidated fiscal year under review is posted.
(4) Accounting standards for significant revenues and expenses
The Group recognizes revenues through the following five steps:
Step 1: Identify the contract with the customer.

- 13 -

Step 2: Identify the performance obligations in the contract.
Step 3: Determine the transaction price.
Step 4: Allocate the transaction price to the separate performance obligations in the contract.
Step 5: Recognize revenue when or as the entity satisfies the performance obligations.
The principal businesses of the MPM Group include the manufacturing and sale of products in its functional materials businessand sustainable fiber materials business. In domestic sales, revenue is recognized when the control of products is transferred tocustomers normally upon the acceptance inspection of products performed by customers or upon the arrival of products at
customers, which is considered the fulfillment of performance obligations. However, revenue is recognized upon shipment of
products if the period between shipping and transfer of control of products to customers is the normal period. In export sales,
the Group recognizes revenue when the risk burden is transferred to customers according to trade conditions specified by the
Incoterms and other rules.
Transaction prices are calculated by subtracting sales incentives from the amount of promised consideration in contracts withcustomers.
Considerations for transactions are received within one year from the fulfillment of performance obligations and importantfinancial factors are not included.
With respect to chargeable subcontracting corresponding to repurchase agreements, supplied goods remaining at subcontractors
as financial transactions are recognized as inventories, and the amount equivalent to the ending inventory of supplied goods
remaining at subcontractors is recognized as liabilities related to chargeable subcontracting. A transaction in which theCompany’s role in the sale of a product to a customer is that of an agent is recognized as a net amount determined by subtracting
the amount paid to a third party from the total amount of the consideration for the transaction.
(5) Other important matters for the preparation of consolidated financial statements(i) Standard for posting retirement benefit liability
To provide for employees’ retirement benefits, the amount remaining after the deduction of pension plan assets (including
retirement benefit trusts) from retirement benefit obligations based on estimated amounts as of the end of the consolidated
fiscal year is posted as a net defined benefit liability.
If the amount of pension plan assets exceeds the amount of retirement benefit obligations, the excess amount is accounted
for as a net defined benefit asset.
Prior service costs are expensed based on the straight-line method for a certain number of years (seven to 13 years) within
the average remaining years of service of employees when costs accrue from their service. Actuarial differences are expensed
from the fiscal year following the year in which the expenses accrue, which are based on the straight-line method for a certain
number of years (seven to 13 years) within the average remaining years of service of employees when actuarial differences
accrue.
Unrecognized actuarial differences and unrecognized prior service cost are posted in the remeasurement of defined benefits
plans under accumulated other comprehensive income in the section of net assets after tax effect adjustment.
(ii) Standards for translating significant foreign currency-denominated assets or liabilities into Japanese yen
Foreign currency monetary assets and liabilities are translated into yen at the year-end spot exchange rate, and translation
adjustments are accounted for as profit or loss.
Assets and liability of consolidated overseas subsidiaries are translated into Japanese yen at the exchange rates prevailing on
the closing date of the consolidated overseas subsidiaries, their revenues and expenses are translated into Japanese yen at the
average exchange rate for the period, and the resulting gains or losses are included in foreign currency translation adjustment
and non-controlling interests in the section of net assets.
(iii) Significant hedge accounting
In cases where the interest rate swaps meet the conditions for hedge accounting, special treatment is adopted. Designatedhedge accounting is applied to certain monetary receivables and payables denominated in foreign currencies hedged byforward exchange.
(iv) Application of the group tax sharing system
The Company applies the group tax sharing system.

- 14 -

(Changes of accounting policy)(Application of Accounting Standard for Fair Value Measurement, etc.)
The Company started applying the Implementation Guidance on Accounting Standard for Fair Value Measurement (ASBJ Guidance
No. 31, June 17, 2021) from the beginning of the fiscal year under review. Accordingly, the Company will apply the new accounting
policies prescribed in the Implementation Guidance on Accounting Standard for Fair Value Measurement into the future inaccordance with the transitional treatment provided for in Section 27-2 of the Implementation Guidance on Accounting Standard for
Fair Value Measurement. The application has no impact on the consolidated financial statements.

(Notes to accounting estimates)
Items whose amounts are reserved in the consolidated financial reports for this consolidated fiscal year due to the accounting estimate
and that may have a major impact on the consolidated financial reports for the following consolidated fiscal year are as follows:
1. Whether recognition of Impairment loss on non-current assets is necessary(1) Amounts recorded in the consolidated financial statements for the consolidated fiscal year under review
Regarding 41,610 million yen of property, plant and equipment of Hachinohe site, centering on MPM’s Hachinohe Mill inthe sustainable fiber materials business segment, the Company has determined that there are signs of impairment reflecting
sustained operating losses, given that the improved profitability of the Hachinohe site due to product price revisions andproductivity improvements was unable to offset higher costs caused by soaring raw material and fuel prices.
As a result of assessing the recognition of an impairment loss, the total amount of undiscounted future cash flows exceeded
the book value of non-current assets in the asset group, and consequently an impairment loss was not recognized.
(2) Information about important accounting estimates related to items identified
The Group categorizes business assets primarily in units of paper mills being production bases.
The recognition of impairment losses is assessed by comparing the book value of an asset group and the total amount of
undiscounted future cash flow of that asset group. If the assessment finds that the total amount of undiscounted future cash
flow falls below the book value and an impairment loss must be recognized, the book value is reduced to the recoverable
amount (net selling price or value in use, whichever is higher) and the amount of decrease in the book value is recognized
as an impairment loss.
Estimates of undiscounted future cash flows from the asset group are based on plans for the next fiscal year and futurebusiness plans. The Company assumed that sales volumes of major products would diminish over the long term due tostructural changes in the demand environment, in addition to lifestyle changes caused by COVID-19. It is assumed that thecurrent high level of raw material and fuel prices will continue.
While the estimates are based on information available at the time of preparing the consolidated financial statements, theassumption used for the estimate is highly uncertain and an impairment loss on non-current assets may be incurred if revision
becomes necessary owing to factors such as changes in economic condition.
2. Recoverability of deferred tax assets(1) Amounts recorded in the consolidated financial statements for the consolidated fiscal year under review
Deferred tax assets (net)1,193 million yen

The amount before offsetting deferred tax liabilities was 3,366 million yen, which is obtained by deducting 7,924 million
yen, the amount of valuation allowance, from 11,290 million yen, the total amount of deferred tax assets pertaining todeductible temporary differences and tax losses carried forward.
(2) Information about important accounting estimates related to items identified
The Group posts deferred tax assets based on the appropriateness of company category, adequacy of future taxable income,scheduling of future reversals of temporary differences, etc. presented in the Implementation Guidance on Recoverability
of. Deferred Tax Assets (ASBJ Guidance No. 26).
Estimates of future taxable income are based on plans for the next fiscal year and future business plans.
The sales volumes of major products in the sustainable fiber materials business segment were assumed to gradually decreaseover the long term due to structural changes in the demand environment, in addition to lifestyle changes due to COVID-19.
It is assumed that the current high level of raw material and fuel prices will continue.
While such estimates are based on information available at the time of preparing the consolidated financial documents, theassumptions used for the estimation are highly uncertain and any failure to ensure stable taxable income in the future owing- 15 -

to factors such as changes in economic conditions may have a significant impact on the amount of deferred tax assets in thefollowing fiscal year.

(Notes on changes made to accounting estimates)
For some consolidated subsidiaries, the Company changed the number of years in the expense period of actuarial differences in
the accounting treatment of retirement benefits from 8 years - 15 years to 7 years - 13 years beginning in the fiscal year underreview due to the reduction of the average remaining years of service of employees.
As a result of this change, operating income, ordinary income and profit before income taxes each increased 31 million yen in thefiscal year under review.

(Additional information)(Performance-linked stock compensation plan)
The Company has adopted a performance-linked stock compensation plan (“the Plan|”) applicable to Directors and Executive
Officers (excluding Outside Directors, non-executive directors, and non-residents of Japan; collectively. “Directors, etc.”) as atransparent and objective executive compensation plan linked to the Company’s business performance and share value, for the
purpose of facilitating medium- to long-term improvement in corporate performance, encouraging contribution to an increase incorporate value, and promoting profit and loss sharing with shareholders,
The accounting for the Plan is in line with the Practical Solution on Transactions of Delivering the Company’s Own Stock to
employees through trusts (ASBJ PITF No. 30, March 26, 2015).
(1) Transaction overview
The Company has adopted a framework called Board Incentive Plan trust (“BIP Trust”) as a trust for the Plan. Like Performance
Shares and Restricted Stock in Europe and North America, a BIP Trust is a system whereby shares in the Company and cash
equivalent to the conversion amount of the Company’s shares will be delivered or provided to Directors, etc. in accordance with
their rank, degree of achievement of financial targets, and other factors.
(2) Treasury shares remaining in the trust
The Company’s shares remaining in the trust are recorded at the book value (excluding all incidental expenses) in the section of
net assets as treasury shares in the trust. The book value and number of these treasury shares were 277 million yen and 911,871
shares, respectively, as of March 31, 2023.
(Business divestiture)
At the meeting of the Board of Directors held on January 30, 2023, the Company decided to sell its business (hereinafter the“Business”) in the Flensburg Mill of Mitsubishi HiTec Paper Europe GmbH (hereinafter “MPE”), the Germany consolidated
subsidiary, and entered into an equity transfer agreement on February 3.
(1) Outline of the business divestiture(i) Name of successor enterprise
Timber QCP GmbH(ii) Details of divested business
Manufacture and sale of thermal paper, inkjet paper and barrier coated paper at the Flensburg Mill of MPE(iii) Main reason for conducting business divestiture
On August 5, 2022, the Company decided to withdraw from the Business and has since been considering how to withdraw. As
a result, the Company determined that the best option would be to sell the Business to Timber QCP GmbH, and decided toproceed with the sale of the Business.
(iv) Date of business divestitureFirst half of FY2023 (schedule)(v) Description of transaction, including legal form
MPE will transfer the Business to a new company to be prepared by MPE (hereinafter the “New Company”) by means of anabsorption-type split, and then transfer all the equity in the New Company to Timber QCP GmbH, a wholly owned subsidiaryof QCP Equity GmbH, a subsidiary of Quantum Capital Partners GmbH.

- 16 -

(2) Name of the reportable segment that includes the business to be divested
Sustainable Fiber Materials Business(3) Others
Associated with the decision to sell the Business, 3,192 million yen is recorded in extraordinary losses as a loss on sale ofbusinesses.

(Notes to the consolidated balance sheet)
1. Collateral assets(i) Assets pledged as collateral and collateralized loans are as follows:Collateral assets
Machinery, equipment and vehicles

642 million yen

Collateralized loans
Long-term borrowings (including current portion)

642 million yen(ii) Factory foundation revolving mortgage applies to the following assets, which, however, are not secured liabilities and are
therefore not, in effect, pledged as collateral.
Buildings and structures

10,186 million yen

Machinery, equipment and vehicles

9,543 million yen

Land9,127 million yen

Others41 million yen

Total

28,899 million yen

2. Accumulated depreciation on property, plant and equipment totaled

3. Reduction entry of non-current assets

410,479 million yen

3,915 million yen

4. Liabilities on guarantee
Amount of debt guarantee for borrowings, etc. from financial institutions such as companies other than consolidated companies
Employees (property accumulation residence fund loans, etc.)
Other: 1 account

220 million yen
5 million yen

Total

226 million yen

5. Retroactive obligations for securitization of receivables

360 million yen- 17 -

(Notes to consolidated statements of income)1. Loss on sale of businesses
For the loss on sale of businesses, related losses associated with the decision to sell the business at the Flensburg Mill of theGermany subsidiary are posted. The breakdown is 1,761 million yen in the provision for loss on sale of businesses and 1,430
million yen in impairment losses.
2. Impairment losses
The Group posted an impairment loss in the asset groups below.
Location

Use

Type

Impairment losses

Flensburg, Federal
Republic of Germany

Assets scheduled
Land, buildings, structures, machinery and equipment, etc.
for business transfer

Hachinohe, Aomori

Idle assets

Machinery and equipment, etc.

46 million yen

Nagaokakyo, Kyoto

Idle assets

Machinery and equipment, etc.

6 million yen

1,430 million yen

With regard to assets scheduled for business transfer, the book value was reduced to the recoverable amount associated with thedecision to sell the business of the Flensburg Mill of the German subsidiary, and the reduced amount was recorded as a loss onsale of businesses in extraordinary losses. The recoverable amount is measured by net sales value and evaluated based on thebusiness transfer agreement, etc.
The book value of idle assets was reduced to a recoverable amount and the reduced amount was recognized as an impairment
loss under extraordinary losses. The recoverable amount is measured by net sales value, and the book values has been reduced
to the memorandum value.

(Notes to the consolidated statements of changes in equity)
1. Class and number of issued sharesClass of shares

At the beginning of the
fiscal year ended March
31, 2023

Common shares

Increase‒

44,741,433

At the end of the fiscal
year ended March 31,
2023

Decrease‒

44,741,433

2. Dividends(1) Cash dividends paid
Not applicable.
(2) Dividends with a record date in the current fiscal year but an effective date in the following fiscal year.
Resolution

Class ofshares

Source ofTotal amount of
Dividend per
dividends dividends (million yen) share (yen)Board of Directors’
meeting on May 30, 2023

CommonsharesRetainedearnings

223

Record date

Effective date

5.00 March 31, 2023 June 12, 2023

(Note) The total amount of dividends includes dividends of 4 million yen for 911,871 shares of the Company held by the executive
compensation BIP trust.

- 18 -

(Notes to financial instruments)
1. Matters related to the status of financial instruments(1) Policies on the use of financial instruments
The Group finances funds (primarily bank borrowings) necessary in light of its capital expenditure plans to operate, in principle,
the functional materials business and the sustainable fiber materials business. The Group uses temporary surplus funds for shortterm deposits, etc. and finances short-term working capital through bank borrowings and the issuance of commercial papers.
Derivative trading is used to avoid the risk of interest-rate fluctuations of borrowings. The Group has a policy of not engage in
speculative transactions.
(2) Description of financial instruments and associated risks, and risk management structure
Notes and accounts receivable - trade, which are operating receivables, are exposed to customers’ credit risk. The Group has
established a system of managing the due dates and the balance of receivables for each customer according to its credit
management regulations and learn the credit status of main customers at all times. Foreign currency-denominated operatingreceivables from the Group’s global businesses are exposed to the risk of exchange fluctuations. Much of this risk is reduced by
the balance of foreign currency-denominated accounts payable.
Stocks that are investment securities are exposed to the risk of fluctuations in market prices. They largely consist of shares incompanies with which the Group has business relationships, whose market value is periodically checked.
Notes and accounts payable - trade and electronically recorded obligations - operating, which are operating payables, mature inless than one year.
Among the borrowings, short-term borrowings are collected primarily for business transactions and long-term borrowings, bonds
payable, and lease obligations in financial lease transactions are used to collect funds, in principle, for capital expenditure, andredemption dates for most of them are within five years after the settlement date. The interest rates of part of the long-termborrowings are floating rates, which are exposed to the risk of interest-rate fluctuations. The Group hedge the risk using derivative
trading (Interest rate swaps).
The purpose of interest rate swap transactions is to hedge the risk of fluctuations in interest rates on borrowings. The method ofassessing the effectiveness of hedging is omitted through the assessment of the fulfillment of requirements for interest swaps
subject to specified hedge accounting treatment. The Group follows its internal rules specifying trading authority in the operationand management of derivative trading. The Group trades derivatives only with high-rated financial institutions to reduce thecredit risk of its counterparts.
Operating liabilities and borrowings are exposed to liquidity risks, which the Group manages primarily by each company bypreparing monthly financing plans.
(3) Supplemental explanation about the fair values of financial instruments
The Group factors in variables in the calculation of the fair values of financial instruments. The fair values vary depending on
assumptions.
2. Matters related to the market prices of financial instruments, etc.
The balance sheet amount and fair value of each category of financial instruments, and the difference between them as of March
31, 2023 are shown in the table below. Stocks and others without a quoted market price are not included in the table below (seeNote 2 below).
Notes to cash are omitted, and notes to deposits, notes receivable, accounts receivable, notes and accounts payable - trade,electronically recorded obligations - operating, short-term borrowings, and commercial paper are omitted due to the proximity
between their market value and book value resulting from the short-term settlement of such instruments.

- 19 -

(Million yen)
Consolidatedbalance sheet
amountMarket value(1) Investment securities
Available-for-sale securities

Difference

15,746

15,746‒

Total assets

15,746

15,746‒(2) Long-term borrowings(including the current portion of long-term borrowings) (Note 1)

44,18943,986(202)

Total liabilities(3) Derivative transactions

44,189‒43,986‒(202)‒(Note 1) The current portion of long-term borrowings (11,586 million yen on the consolidated balance sheet) is included.
(Note 2) Unlisted shares without market price (5,858 million yen on the consolidated balance sheet) are not included in (1) availablefor-sale securities under investment securities due to the absence of market prices.
3. Breakdown of financial instruments by level of market value
The market values of financial instruments are classified into the following three levels according to the observability andimportance of inputs used in the calculation of market values.
Level 1 market value:market value calculated using market prices, on an active market, of assets or liabilities whose market value
is calculated of the observable inputs related to the calculation of market value

Level 2 market value:market value calculated using inputs other than the inputs used for Level 1 of the observable inputs related
to the calculation of market value

Level 3 market value:market value calculated using inputs that are not observable related to the calculation of market value

If more than one input that has a significant effect on the calculation of market value is used, the market value is classified to thelevel of inputs whose priority is lowest in the calculation of market value.
(1) Financial assets and financial liabilities whose market prices are used as the value posted on the consolidated balance sheet
Classification

Market value (million yen)
Level 1

Investment securities
Available-for-sale securities
StocksTotal assets

Level 2

Level 3

Total

15,746‒‒

15,746

15,746‒‒

15,746

‒

‒

‒

‒

‒

‒

‒

‒

Derivative transaction
Related to interest rates
Derivative transaction(2) Financial assets and financial liabilities whose market prices are not used as the value posted on the consolidated balance sheet
Classification

Market value (million yen)
Level 1Long-term borrowings(including the current portion of long-term borrowings)
Total liabilities

Level 2

Level 3

Total‒

43,986‒43,986‒43,986‒43,986(Note) Explanations about assessment techniques used in the calculation of market value and inputs related to the calculation ofmarket value
Investment securities
Listed shares are assessed using market prices. Listed shares are traded on an active market and their market prices are categorized
into level 1.
Derivative transaction
Interest swaps subject to specified hedge accounting treatment are treated as part of hedged long-term borrowings, and theirmarket prices are included in the market prices of such long-term borrowings. (See “long-term borrowings” below)- 20 -

Long-term borrowings
The market prices of floating rate long-term borrowings reflect market interest rates over a short period of time and the Group’s
credit standing does not change significantly after execution. The market prices are, therefore, considered to approximate bookvalue, which is therefore used for floating rate long-term borrowings.
The market prices of fixed rate long-term borrowings are calculated using discounted present value based on an interest rate
determined by adding the remaining period of the liabilities and credit risk to the total amount of the principal and interest.
Long-term borrowings to which interest swaps subject to specified hedge accounting treatment (see the above “derivativetransaction”) apply are calculated using the total amount of the principal and interest treated together with the interest rate swaps.
These are classified to Level 2 market value.

(Notes to rental properties)
Notes to market prices, etc. of rental properties are omitted due to the low significance of such market prices.

(Notes to revenue recognition)
1. A breakdown of revenue generated from contracts with customers(Million yen)
Reportable Segments
Functional
Materials
BusinessJapan
EuropeAsia
North America
Others
Revenue from contracts with customers

Others(Note)

Total

Total

21,342
4,613
9,228
14,589955

108,724
35,878
8,230
‒
3,581

130,067
40,491
17,45914,589
4,536

2,225
‒
‒
‒
‒

132,292
40,491
17,45914,5894,536

50,729156,415

207,1442,225

209,370

‒

171

171

‒

171

50,729156,587

207,316

2,225

209,542

Other revenue
Sales to external customers

Sustainable
Fiber Materials
Business(Note) The category, others, is a business segment not included in reportable segments, which mainly includes the engineering business.
2. Basic information for understanding revenue from contracts with customers
The information that becomes the basis of the understanding of revenue are provided in (4) Accounting standards for significant
revenues and expenses, under 4. Notes regarding accounting policies in (Significant matters that form the basis for preparing
consolidated financial statements).
3. The information that becomes the basis of the understanding of revenue for the consolidated fiscal year under review and the next
consolidated year
(1) Balance, etc. of contract liabilities
The balance of contract liabilities of the company and its subsidiaries are omitted due to its negligible amount and the absenceof significant changes. Revenue recognized in the fiscal year under review from performance obligations satisfied (or partly
satisfied) in previous periods is not significant.
(2) Transaction prices allocated to outstanding performance obligations
The description of transaction prices allocated to remaining performance obligations is omitted by applying a practical
expedient due to the absence of important contracts with an initially estimated term exceeding one year held by the Company
or its subsidiaries. Further, consideration from contracts with customers does not contain a significant amount not included in
the transaction price.

(Notes on per share information)(1) Net assets per share

1,646.59 yen(2) Loss per share

12.97 yen- 21 -

(Notes to significant subsequent events)(Absorption-type mergers of wholly owned subsidiaries and mergers between consolidated subsidiaries)
On April 1, 2023, the Company conducted a group reorganization (hereinafter the “Reorganization”).
In addition, Kitakami HiTec Paper Corporation, which will disappear due to the Reorganization, falls under the specified subsidiary.
1. Purpose of the Reorganization
In the fiscal year under review, the Group has launched the Medium-Term Management Plan (FY2023/3-FY2025/3) and is working
to strengthen the management base and create a new Mitsubishi Paper Mills Group. As one of the initiatives in this effort, the Groupwill reduce fixed costs through organizational rationalization and strengthen corporate governance by merging its group subsidiaries.
2. Overview of the Reorganization
With April 1, 2023 as the business combination date, the Reorganization described below has been implemented.
The names of the companies have not changed after the business combination.
(i) Combination of the Company and Kitakami site subsidiaries
With MPM as the company surviving the absorption-type merger and Kitakami HiTec Paper Corporation and Hokuryo Industry
Corporation as the companies that disappear in the absorption-type merger, an absorption-type merger was implemented.
<Names of combined companies and description of their businesses>
Names of combined companies
Surviving
Mitsubishi Paper Mills Limited
company
Absorbed Kitakami HiTec Paper Corporationcompany
Hokuryo Industry Corporation

Description of business
Manufacturing, processing and sale of paper, pulp and photosensitive
materials
Manufacturing, processing and sale of pulp, resin-coated paper and sanitary
products
Contracted manufacture and finishing of paper, miscellaneous work(ii) Combination of sales subsidiaries
With Mitsubishi Oji Paper Sales Co., Ltd. as the company surviving the absorption-type merger and Diamic Co., Ltd. as thecompany that disappears in the absorption-type merger, an absorption-type merger was implemented.
<Names of combined companies and description of their businesses>
Names of combined companies

Description of business

Surviving
Mitsubishi Oji Paper Sales Co., Ltd. Sale of paper, chemicals, etc.
company
Absorbed
Diamic Co., Ltd.
company

Sale of printing-plate materials, etc.

(iii) Combination of Hachinohe site subsidiaries
With MPM Operation Co., Ltd. as the company surviving the absorption-type merger and Hachinohe Paper Processing Co., Ltd.
and Hachiryo Co., Ltd. as the companies that disappear in the absorption-type merger, an absorption-type merger was
implemented.
<Names of combined companies and description of their businesses>
Names of combined companies

Description of business

Surviving
MPM Operation Co., Ltd.
company

Entrustment with operation and management of production activities ofHachinohe Mill

Hachinohe Paper Processing Co.,
Absorbed Ltd.
company
Hachiryo Co., Ltd.

Paper trimming, grading and packaging, storage and shipment of paper
products
Premise transport, miscellaneous work and processing of packing paper

3. Overview of accounting treatment to be taken
The Company plans to account for the Reorganization as the common control transaction under the Accounting Standard forBusiness Combinations (ASBJ Statement No. 21, January 16, 2019) and the Implementation Guidance on Accounting Standard forBusiness Combinations and Accounting Standard for Business Divestitures (ASBJ Guidance No. 10, January 16, 2019).

- 22 -

Statements of changes in shareholders’ equity
From April 1, 2022 to March 31, 2023
(Million yen)
Shareholders’ equity
Capital surplus
Capital stock

Balance at beginning of period

Legal capital surplus

36,561

8,094

Retained earnings

Total capital surplus

8,094

Other retained
earnings
Retained earnings
brought forward

Total retained
earnings

1,719

1,719

708

708

‒

‒

Changes during period
ProfitPurchase of treasury shares
Disposal of treasury shares
Net changes in items other thanshareholders’ equity
‒

‒

‒

708

708

36,561

8,094

8,094

2,427

2,427

Treasury shares

Total shareholders’equityValuation difference
on available-for-salesecurities

Total valuation andtranslation
adjustments

Total net assets(184)

46,191

2,873

2,873

49,064708

708

Purchase of treasury shares

(214)

(214)

(214)

Disposal of treasury shares

11

11

11

Total changes during period
Balance at end of period

Shareholders’ equity

Balance at beginning of period

Valuation and translation adjustments

Changes during period
ProfitNet changes in items other thanshareholders’ equity

219

219

219

Total changes during period

(202)

505

219

219

725

Balance at end of period(386)

46,697

3,092

3,092

49,789(Note) The stated amounts are rounded down to the nearest million yen.

- 23 -

Notes to non-consolidated financial statements(Notes on significant accounting policies)
1. Asset valuation standards and valuation method(1) Valuation standards and valuation methods for securities(i) Shares in subsidiary and affiliated companies
Stated at cost determined by the moving-average method(ii) Other securities
Securities other than shares, etc. without market valueMarket value method (Valuation differences are reported as a component of shareholders’ equity and the cost of
securities sold is calculated using the moving average method.)
Shares, etc. without market value
Stated at cost determined by the moving-average method(2) Valuation standards and valuation methods for derivatives: Market value method(3) Valuation standards and valuation methods for inventory assets
Merchandise and finished goods: Cost method through periodic average method
Work in process: Cost method through periodic average method
Raw materials and supplies: Cost method determined by the moving average method(The value in the balance sheet is calculated by the method of book value devaluation based on lowering of profitability)
2. Depreciation method for non-current assets(1) Property, plant and equipment (excluding leased assets)
Buildings
Straight-line method
Property, plant and equipment excluding buildings
Straight-line method. The declining-balance method is used for the head office and other properties. The straight-line
method is applied for structures acquired from April 1, 2016.
(2) Intangible assets
The straight-line method is applied. Software (used in the Company) is amortized over the estimated useful life of thesoftware (five years) in the Company.
(3) Leased assets
Leased assets relating to finance leases wherein ownership of the leased asset does not transfer to the lessee
Calculated by assuming the lease term is the useful life and depreciating the remaining amount to zero using the straightline method.
3. Standards on recognition of provisions(1) Allowance for doubtful accounts
To prepare for possible losses on uncollectible receivables held as of the end of fiscal year, the Company provides allowances
equal to the estimated amount of uncollectible general receivables based on historical rates and for specific receivables,
including doubtful receivables, based on an examination of their individual collectability.
(2) Provision for retirement benefits
To prepare retirement benefits for employees, this provision is posted based on the estimated size of retirement benefit
obligations and pension assets (retirement benefit trusts) as of the end of the fiscal year under review.
Prior service costs are expensed based on the straight-line method for a certain number of years (10 years) within the averageremaining years of service of employees when costs accrue from their service. Actuarial differences are expensed from thebusiness year following the year in which the expenses accrue, which are based on the straight-line method for a certain- 24 -

number of years (10 years) within the average remaining years of service of employees when actuarial differences accrue.
Any amount of pension assets to be recognized at the end of the fiscal year under review in excess of the amount derived
from subtracting unrecognized actuarial gain or loss, etc. from retirement benefit obligations is posted as prepaid pension
costs in investments and other assets.
(3) Provision for share awards
To prepare for the issuance of shares of the Company’s stock pursuant to regulations for the stock-based compensation of
Directors and Executive Officers, the portion of the estimated amount to be paid in the business year under review is posted.
4. Accounting standards for significant revenues and expenses
The Company recognizes revenues through the following five steps:
Step 1: Identify the contract with the customer.
Step 2: Identify the performance obligations in the contract.
Step 3: Determine the transaction price.
Step 4: Allocate the transaction price to the separate performance obligations in the contract.
Step 5: Recognize revenue when or as the entity satisfies the performance obligations.
The principal businesses of MPM include the manufacturing and sale of products in its functional materials business andsustainable fiber materials business. In domestic sales, revenue is recognized when the control of products is transferred tocustomers normally upon the acceptance inspection of products performed by customers or upon the arrival of products at
customers, which is considered the fulfillment of performance obligations. However, revenue is recognized upon shipment of
products if the period between shipping and transfer of control of products to customers is the normal period. In export sales, theGroup recognizes revenue when the risk burden is transferred to customers according to trade conditions specified by the
Incoterms and other rules.
Transaction prices are calculated by subtracting sales incentives from the amount of promised consideration in contracts withcustomers.
Considerations for transactions are received within one year from the fulfillment of performance obligations and importantfinancial factors are not included.
With respect to chargeable subcontracting corresponding to repurchase agreements, supplied goods remaining at subcontractors
as financial transactions are recognized as inventories, and the amount equivalent to the ending inventory of supplied goods
remaining at subcontractors is recognized as liabilities related to chargeable subcontracting.
5. Hedge accounting method
In cases where the interest rate swaps meet the conditions for hedge accounting, special treatment is adopted.
6. Accounting treatment of retirement benefits
In the financial statements, the treatment of unrecognized actuarial gain or loss and unrecognized past service cost in the balance
sheet is different from in the consolidated financial statements. In the non-consolidated balance sheet, the amount after subtracting
pension assets from the amount after adding and/or subtracting unrecognized actuarial gain or loss and unrecognized past service
cost to or from retirement benefit obligations is posted as provision for retirement benefits.
7. Application of the group tax sharing system
The Company applies the group tax sharing system.

- 25 -

(Changes of accounting policy)(Application of Accounting Standard for Fair Value Measurement, etc.)
The Company started applying the Implementation Guidance on Accounting Standard for Fair Value Measurement (ASBJ Guidance
No. 31, June 17, 2021) from the beginning of the fiscal year under review. Accordingly, the Company will apply the new accounting
policies prescribed in the Implementation Guidance on Accounting Standard for Fair Value Measurement into the future inaccordance with the transitional treatment provided for in Section 27-2 of the Implementation Guidance on Accounting Standard for
Fair Value Measurement. The application has no impact on the financial statements.

(Notes to changes in presentation method)(Statement of income)“Extra retirement payments,” which was included in “Other” under “Extraordinary losses” in the previous fiscal year, is separately
presented in the fiscal year under review, since it has become significant in terms of amount.

(Notes to accounting estimates)
Items whose amounts are reserved in the financial reports for this fiscal year due to the accounting estimate and that may have a major
impact on the financial reports for the following fiscal year are as follows:
1. Whether recognition of Impairment loss on non-current assets is necessary(1) Amounts recorded in the financial statements for the fiscal year under review
Property, plant and equipment (Hachinohe Mill) 37,286 million yen(2) Information on accounting estimates
Notes are omitted due to the inclusion of the same information in “1. Whether recognition of impairment loss on non-current assets
is necessary” in the table of Notes to Consolidated Financial Statements (Notes to accounting estimates).
2. Recoverability of deferred tax assets(1) Amounts recorded in the financial statements for the fiscal year under review
Deferred tax assets (net)3,749 million yen

The amount before offsetting deferred tax liabilities was 4,563 million yen, which is obtained by deducting 9,443 million yen,
the amount of valuation allowance, from 14,007 million yen, the total amount of deferred tax assets pertaining to deductible
temporary differences and tax losses carried forward.
(2) Information on accounting estimates
Notes are omitted due to the inclusion of the same information in “2. Recoverability of deferred tax assets” in the table of Notes toConsolidated Financial Statements (Notes to accounting estimates).

(Additional information)
Notes are omitted due to the inclusion of the same information in “Additional information” in the table of Notes to Consolidated
Financial Statements.

- 26 -

(Notes to balance sheet)
1. Collateral assets
Factory foundation revolving mortgage applies to the following assets, which, however, are not secured liabilities and, thus, not,in effect, pledged as collateral.
Buildings

7,717 million yen

Structures

1,386 million yen

Machinery and equipment

9,171 million yen

Vehicles15 million yen

Tools, furniture and fixtures

41 million yen

Land8,855 million yen

Total

27,188 million yen

2. Accumulated depreciation on property, plant and equipment totaled
3. Reduction entry of non-current assets

279,264 million yen
2,176 million yen

4. Liabilities on guarantee(i) Guarantee for borrowings from financial institutions through assetbuilding savings system of the Company’s employees

220 million yen(ii) Guarantee for borrowings, etc. from financial institutions
Mitsubishi HiTec Paper Europe GmbH8,571 million yen

Hachinohe Paper Processing Co., Ltd.

642 million yen

Two other companies

45 million yen

Total

9,259 million yen

5. Monetary claims and liabilities to affiliated companies
Short-term monetary claims

44,676 million yen

Long-term monetary claims

2,701 million yen

Short-term monetary obligations

6,984 million yen- 27 -

(Notes to statement of income)1. Transactions with subsidiaries and associates
Net sales

65,521 million yen

Cost of sales and selling, general and administrative expenses

26,735 million yen

Volume of trade arising from other than business transactions

12,260 million yen

2. Impairment losses
An impairment loss was posted for the following asset group.
Location

Use

Type

Impairment losses

Hachinohe, Aomori

Idle assets

Machinery and equipment, etc.

46 million yen

Nagaokakyo, Kyoto

Idle assets

Machinery and equipment, etc.

6 million yen

The book value of idle assets was reduced to a recoverable amount and the reduced amount was recognized as an impairment
loss under extraordinary losses. The recoverable amount is measured by net sales value, and the book values has been reduced
to the memorandum value.

(Notes on statements of changes in shareholders’ equity)
Type and number of treasury shares at the end of the business year under review
Class of shares

At the beginning of the
fiscal year ended March
31, 2023

Common shares

Increase

277,007

At the end of the fiscal
year ended March 31,
2023

Decrease
741,766

32,729986,044(Notes) 1. The number of shares of the Company’s common stock held as treasury shares includes shares of the Company’s stock
held by the executive compensation BIP trust (911,871 shares at the end of business year under review).
2. Overview of reason of change
The breakdown of the increase is as follows:
Increase due to demand for purchases of shares of less than one unit
Increase in the purchase of treasury shares by the executive compensation BIP trust

766 shares
741,000 shares

The breakdown of the decrease is as follows:
Decrease due to the issuance of treasury shares by the executive compensation BIP trust- 28 -

32,729 shares

(Notes to tax effect accounting)
1. Breakdown of key factors contributing to deferred tax assets and deferred tax liabilities
Deferred tax assets
Accrued expenses

140 million yen

Provision for retirement benefits

3,060 million yen

Accumulated impairment of non-current assets

328 million yen

Loss on valuation of investments in capital of subsidiaries and associates

5,278 million yen

Loss on valuation of shares of subsidiaries and associates

1,708 million yen

Tax losses carried forward

1,005 million yen

Others

2,485 million yen

Subtotal of deferred tax assets

14,007 million yen

Valuation allowance related to tax losses carried forward
Valuation allowance related to deductible temporary differences-285 million yen-9,157 million yen

Valuation allowance subtotal-9,443 million yen

Total deferred tax assets

4,563 million yen

Deferred tax liabilities
Gain on contribution of securities to retirement benefit trust-11 million yen

Valuation difference on available-for-sale securities-681 million yen

Others-120 million yen

Total deferred tax liabilities-814 million yen

Net deferred tax assets

3,749 million yen- 29 -

(Notes to related party transactions)
1. Subsidiaries and associates
Type

Percentage ofRelationship with related party Content of the transaction
voting rights

Company name%
Mitsubishi Oji
Direct: 99.9
Paper Sales Co.,
Indirect: Ltd.

Subsidiary

Supply of raw materials
Purchase of products of(Note 1)
Direct: 100.0 Kitakami HiTec. Supply of
Indirect: raw materials. Executives may
Collection of funds (Note 1)
hold concurrent positions.
Loans of funds (Note 1)
Group finance transaction(Notes 1 and 2)

Funding and technological
Mitsubishi HiTec
assistance for business
Paper Europe
Direct: operation in Europe.
GmbH
Indirect: 100
Executives may hold(Note 3)
concurrent positions.

Associates

Item

Million yen
Sale of paper, pulp,
Sales agency for paper. Lease pharmaceuticals, etc.
a part of real estate.
(Note 1)
Executives may holdGroup finance transaction
concurrent positions.
(Notes 1 and 2)
Purchase of merchandise,etc. (Note 1)

Kitakami HiTec
Paper
Corporation

Transaction
value

56,434

Short-term
Accounts

Accounts
receivable other

976

7,511

3,179 Short-term
3,144 loans receivable
Short-term

345 loans receivable

5,056

Loans, etc. provided by theCompany. Executives may
hold concurrent positions.

Collection of funds (Note 1)

4,363
1,090

Loans of funds(Notes 1 and 4)

MPM Oji Eco
Direct: 45.0
Energy Co., Ltd. Indirect: -19,63011,773 payable - trade

4,743

Purchase of products ofCollection of funds (Note 1)
Kitakami HiTec. Supply of
raw materials. Executives may
Loans of funds (Note 1)
hold concurrent positions.

Million yen
Accounts
receivable trade

90 loans receivableCollection of funds(Notes 1 and 4)

MPM OJI Home
Direct: 70.0
Products Co.,
Indirect: Ltd.

Balance at
end of period

Short-termloans receivable

3,144
2,011

5,056

Short-term

466 loans receivable242

Long-termloans receivable

1,936

‒

Long-term

450 loans receivable

765(Note 1) Prices and other terms of business are determined in negotiations using market prices as a reference.
(Note 2) The transaction amount for group finances indicated is an increase or decrease between the end of the previous fiscal year andthe end of the business year under review.
(Note 3) Mitsubishi HiTec Paper Europe GmbH is a subsidiary of Mitsubishi Paper Holding (Europe) GmbH.
(Note 4) Allowance for doubtful accounts of 3,239 million is posted for loans receivable to Mitsubishi HiTec Paper Europe GmbH.
In addition, provision of an allowance for doubtful accounts of 1,667 million yen is posted in the fiscal year under review.
(Note 5) Guarantee obligations are listed in the notes to the balance sheet in the notes to specific items, and are operated under generalterms of business.
2. Sister companies
Type

Company name

Percentage ofvoting rights

Subsidiaries
of other OCM Fiber
Direct: 14.0
associates Trading Co., Ltd. Indirect: -(Note)

Relationship with related party

Content of thetransaction

Sale of imported chips to theCompany

Purchase of imported
chips (Note 1)%

Transaction
value

Item

Million yen
Accounts
19,673
payable - trade

Prices and other terms of business are determined in negotiations using market prices as a reference.

- 30 -

Balance at
end of period
Million yen
2,636

(Notes to revenue recognition)
Basic information for understanding revenue from contracts with customers
Basic information for understanding revenue is provided in section, 4. Accounting standards for significant revenues and expenses in
the Notes on significant accounting policies.

(Notes on per share information)(1) Net assets per share

1,137.91 yen(2) Profit per share

16.06 yen

(Notes to significant subsequent events)(Absorption-type merger of wholly owned subsidiary)
On April 1, 2023, an absorption-type merger was implemented with MPM as the company surviving the absorption-type merger
and Kitakami HiTec Paper Corporation and Hokuryo Industry Corporation as the companies that disappear in the absorption-typemerger.
In addition, Kitakami HiTec Paper Corporation, which will disappear due to the Reorganization, falls under the specified subsidiary.
1. Purpose of the Reorganization
In the fiscal year under review, the Group has launched the Medium-Term Management Plan (FY2023/3-FY2025/3) and is working
to strengthen the management base and create a new Mitsubishi Paper Mills Group. As one of the initiatives in this effort, the Groupwill reduce fixed costs through organizational rationalization and strengthen corporate governance by merging its group subsidiaries.
2. Overview of the Reorganization<Business combination date>
April 1, 2023
<Names of combined companies and description of their businesses>
Names of combined companies
Surviving
Mitsubishi Paper Mills Limited
company
Absorbed Kitakami HiTec Paper Corporationcompany
Hokuryo Industry Corporation

Description of business
Manufacturing, processing and sale of paper, pulp and photosensitive materials
Manufacturing, processing and sale of pulp, resin-coated paper and sanitary
products
Contracted manufacture and finishing of paper, miscellaneous work

The name of the company has not changed after the business combination.
3. Overview of accounting treatment to be taken
The Company plans to account for the Reorganization as the common control transaction under the Accounting Standard forBusiness Combinations (ASBJ Statement No. 21, January 16, 2019) and the Implementation Guidance on Accounting Standard forBusiness Combinations and Accounting Standard for Business Divestitures (ASBJ Guidance No. 10, January 16, 2019).

- 31 -