A nnual
Report2010

Profile

Mitsubishi Paper Mills Limited was established by Mitsubishi’s third president, Hisaya Iwasaki.
Since its founding, the Mitsubishi Paper Mills Group has contributed to the development of publishing, printing and photography media culture through its high value-added printing and communication
paper, and products.
Dedicated to contributing to society by providing customers with products backed by advanced
technological capabilities, we have the following three goals as a Group Philosophy:

1. A corporate group that lives up to the trust of its customers in the world market
2. A corporate group that is always on the leading edge of technology
3. A corporate group that contributes to preserving the global environment and creating a recycling society

Mitsubishi Paper Mills produces and develops not only printing paper, printing plate materials andprinting systems supporting offset and other printing, but also supplies the media for almost all recording formats, such as pressure-sensitive, thermal, magnetic, electrographic, silver halide photography
and inkjet paper. Furthermore, we are adding functional materials such as highly functional filters to ouroperating business domains, and increasing emphasis on research and development in new businessareas.
With production facilities and R&D sites mainly located in Japan and Germany, and sales sites
located in Japan, Germany and the United States, we have positioned ourselves to serve global
markets.

Contents
FINANCIAL HIGHLIGHTS (CONSOLIDATED)................ 1

MESSAGE FROM THE PRESIDENT.............................. 2
BREAKDOWN OF OPERATIONS BY DIVISION............. 4
TOPICS­........................................................................ 6
CORPORATE SOCIAL RESPONSIBILITY (CSR)........... 8
OUR MILLS AND THEIR PRODUCT LINES................... 10
SIX-YEAR SUMMARY (CONSOLIDATED).................... 11
CONSOLIDATED BALANCE SHEETS............................ 12
CONSOLIDATED STATEMENTS OF OPERATIONS........ 14
CONSOLIDATED STATEMENTS OF
CHANGES IN NET ASSETS......................................... 15
CONSOLIDATED STATEMENTS OF CASH FLOWS....... 16
NOTES TO CONSOLIDATEDFINANCIAL STATEMENTS.......................................... 17
REPORT OF INDEPENDENT AUDITORS ONCONSOLIDATED FINANCIAL STATEMENTS............... 29
BOARD OF DIRECTORS,EXECUTIVE OFFICERS ANDCORPORATE AUDITORS............................................ 30
COMPANY DATA.......................................................... 31

Mitsubishi Paper Mills Limited and Consolidated Subsidiaries

Financial Highlights (Consolidated)Thousands of
U.S. dollars (1) and (2)Millions of yen (1)
2010

2009

2010

For the years ended March 31
Net sales
Ordinary income
Net income (loss)
Net income (loss) per share (in yen and dollars)
Cash dividends per share (in yen and dollars)¥ 219,728
2,658(1,597)(4.67)—¥ 253,102
4,499
1,168
3.41
2.50

$ 2,361,654
28,577(17,171)(0.05)—

As at March 31
Total assets
Total net assets
Common stock¥ 282,131
68,70932,756¥ 294,254
70,43632,756$ 3,032,368
738,489
352,066

19,7404,441

17,854
4,577

Number of shareholders
Number of employees

Notes: (1) In this annual report, Japanese yen (in millions) and U.S. dollars (in thousands) are indicated with fractions omitted.
(2) U.S. dollar amounts in this report represent translations of yen amounts at the rate of ¥93.04 = U.S.$1, as of March 31, 2010.

Net Sales(¥ Million)

06
07
08
09
10

Ordinary Income(¥ Million)

06
07
08
09
10

Net Income(Loss)(¥ Million)

Total Net Assets(¥ Million)

06
07
08
09
10

228,495
244,260
258,536
253,102219,728

4,774
5,270
7,120
4,499
2,658

7,225
7,297
3,654
1,168
(1,597)

06
07
08
09
10

76,68080,326
79,63670,436
68,709Others 8.3%

Sales
Composition

Photosensitive Materials
12.2%

Paper & Pulp 79.5%

Note:	Effective from the year ended March 31, 2007, the Company has applied the “Accounting standards for presentation of net assets in the balance
sheet,” and the “Implementation guidance for accounting standards for presentation of net assets in the balance sheet.”	Furthermore, the Company presented its net assets in the balance sheets using the new presentation method as of March 31, 2006 to conform tothe current year’s presentation.

1

Message from the President

Kunio Suzuki, President & C.E.O.

Overview of the Reporting Term
The business environment faced by the Group remains very difficult
following the collapse in demand triggered by the global financial
crisis that began in late 2008 and the steep rise in the value of the
yen against the US dollar. To flourish as a business in this kind ofenvironment, the Group has compiled a set of measures we call
Enhanced Countermeasures plan, implementation of which will
strengthen our cost-competitiveness and sharpen our focus on highvalue-added products.
In the Paper and Pulp Division, we now expect the slump in
paper demand to be protracted. Accordingly, we cut production
substantially at plants in Japan, and suspended operations of No. 12
Paper Machine at the Takasago Mill as part of measures to reduce
costs across the Group by tailoring output more closely to lower
demand levels. Restructuring also included idling of some facilities
in the communication paper business in Europe.
The Photosensitive Materials Division was also badly hit by the
global recession, and sales amounts and volumes both declined.
Amid these circumstances, we scrapped and rebuilt manufacturing
facilities for photographic base paper, and concentrated production
on three multi-function resin coaters, one newly completed.
In addition to the decline in demand, sales were also impacted by
the strong yen, as a large proportion of total Group sales are overseas. As a result of these factors, Group sales on a consolidated basis
fell 13.2% year-on-year to ¥219,728 million (US$2,361 million).

2

Despite an earnings boost from a fall in woodchip and other raw
material and fuel prices and a decrease in fixed costs at our plants,
the impact of the drop in sales volumes was very severe and wasexacerbated by the strong yen and other factors pushing down selling prices. As a result, ordinary income fell 40.9% year-on-year to¥2,658 million (US$28 million). We posted a net loss for the reporting term of ¥1,597 million (US$17 million), due to recognition of an
impairment loss from suspension of operation of certain manufacturing facilities and recognition of losses on disposal of property, plantand equipment under the restructuring described above.
The Company regards the distribution of profits to shareholders,
based on consolidated business performance, as a matter of priority.
It follows a long-term policy of maintaining a stable payout ratio,
while ensuring availability of retained earnings for expansion ofbusiness operations. Our basic dividend payout ratio is 20% of ordinary income on a consolidated basis.
However, as part of measures under our Enhanced
Countermeasures plan, we were forced to post an impairment
loss on production system restructuring, leading to a net loss of¥1,597 million (US$17 million) on a consolidated basis.
Accordingly, we regret to announce that we have decided to suspend
the dividend for the reporting term, in view of the need to prioritize
the strengthening of our financial position.

Mid-term Management Strategy and Issues Facing the Company
The Company is undertaking a range of measures under its Post
Phoenix Plan launched in fiscal 2008. However, to be able to cope
better with an increasingly difficult operating environment, caused
by declining demand amid the global recession and the effect of thehigh yen on imports, we have begun Groupwide implementation of
our Enhanced Countermeasures plan compiled in October. (Pleasesee pages 6-7 for more details of the plan and progress in implementation). Over the longer term, we are committed to a vision titled“Mitsubishi Paper Mills for High Grade and Information Media”
within the Post Phoenix Plan, and have pinpointed three businesses
with promising growth outlooks — printing and communication
paper, digital imaging, and development businesses. We will pursue
balanced growth based on these core businesses so as to remaincommitted to our vision for the Group for the future.
For our Company to continue functioning as an active memberof society, we believe that it is necessary to fulfill our social responsibilities to all of our stakeholders. For that reason, we have createda Corporate Social Responsibility (CSR) organization covering theentire Group, and are actively engaged in measures to fulfill oursocial responsibility in areas such as compliance, disclosure of information, safety and quality, human and labor rights, the environment,
and social contributions. This, we believe, is the path to greater
enterprise value.
In the belief that a compliance-oriented corporate culture forms
the soundest basis for corporate activities, we are likewise working to foster a better understanding of corporate ethics and conduct,and cultivate a fulfilling work environment where employee safety
comes first and individual employees are able to realize their potential. We are also committed to a range of activities in awareness ofthe need to ensure harmonious coexistence with the community.

Forecasts
Factoring in the impact of cost-cutting measures under Enhanced
Countermeasures, we forecast total sales of ¥225,000 million(US$2,500 million), operating income of ¥6,000 million (US$66
million), ordinary income of ¥4,000 million (US$44 million), andnet income of ¥1,500 million (US$16 million) in the current year
ending March 2011.
In the above forecasts, we assume an exchange rate of ¥90/US$1,
and ¥130/€11.

June 2010

Kunio Suzuki
President & C.E.O.

3

Breakdown of Operations by Division

Paper and Pulp
Divisions

Net Sales (¥ Million)

06
07
08
09
10

197,088
212,945
227,080
221,930
191,592

Photosensitive Materials
Division
06
07
08
09
10

Net Sales (¥ Million)

33,27333,33434,78934,17029,518

Other
Divisions
06
07
08
09
10

Net Sales (¥ Million)

20,084
21,352
23,08821,575
19,967

Overseas Sales Breakdown
For the year ended March 31, 2010

Millions of yen

Thousands of
U.S. dollars

EuropeAsia
North America
OthersTotal¥ 28,636
7,785
10,234
6,305¥ 52,962$ 307,782
83,681110,005
67,773$ 569,2434

In the Paper and Pulp Divisions, the fall in domestic demand
coupled with an increase in imported paper caused a decline insales volumes of our mainstay commercial printing paper (for flyers, catalogs and pamphlets). Prices were also weak. Although there
were signs of recovery in the second half in inkjet paper and otherproducts, communication paper business sales overall were down,with carbonless paper performing particularly poorly. Under thesecircumstances, we continued production curbs from the previous fiscal year, to better tailor supply to reduced demand.
In specialty materials, we increased sales by launching new products with proprietary technologies, such as filters for air-cleaning
equipment in Asian markets, Thermorewrite® films for ID cards,
and masks for swine flu.
Sales volumes at our European subsidiaries declined in linewith falling demand due to economic recession. Under thesecircumstances, we undertook organizational restructuring to improveearnings capability, involving suspension of operations at certain
manufacturing facilities, major cuts in personnel, and adjustments
to the product lineup. As a result, performance recovered somewhat
from the second half.
Sales volumes and values both increased for pulp sold on themarket, as price trends turned favorable.
As a result, overall sales in the Paper and Pulp Division
decreased 13.7% year-on-year to ¥191,592 million (US$2,059 million) on a consolidated basis.

In the Photosensitive Materials Division, sales of photographic basepaper and photographic paper were down in both volume and value
terms from the previous fiscal year, due to the continued fall inglobal demand. Despite our measures to boost sales of digital products such as Silver Digiplate® and our new environment-friendly
Thermal Digiplate®, printing plate materials also saw sales volumes
and values decline year-on-year, due to the fall in demand in global
printing markets and the impact of the strong yen.

As a result of the above, overall sales in the Photosensitive
Materials Division fell 13.6% year-on-year to ¥29,518 million(US$317 million) on a consolidated basis.

Sales in Other Divisions declined 7.5% year-on-year to ¥19,967 million (US$214 million), due chiefly to lower sales at our engineeringsubsidiary.

5Topics

Enhanced Countermeasures
Steady progress in cost-cutting and restructuring
The great recession in the global economy due to the financial crisis that started in late 2008 has caused demand for paper of all types
to contract to substantially. This and the high yen have created major difficulties for our businesses.
The Seven Enhanced Countermeasures plan compiled in October 2009 provides a road map to the new departure for the Group,
through an overhaul of production systems for greater efficiency and major cost reductions, as well as a shift to a high value added production and development of new products.
Seven Enhanced Countermeasures
Seven Enhanced Countermeasures(Announced October 30, 2009)

FY2010, FY2011
Initiative begun in thesecond half of FY2009

Move from “Scale” to“Cost Competitiveness”
and “Value Added”

1

7

Realize effect ofalliances
Alliance with FUJIFILM
Alliance with OJI Paper inbusiness communication
paper

2

Efficient production
systemThorough cost
minimization

Relocation of business
communication paper production
sites

Maximized low-cost structure
for I&D Company
Cost reductions at Hachinohe
and Takasago mills
Trim logistic costs for printing& communication paper

Shut down No. 12 Paper Machine atTakasago Mill( Transfer production of base paper,
decrease pulp purchases)
Shut down KHP No. 5 RC Machine

3

Drastic reductions ofoverhead cost
Streamline R&D system
Reduce costs at theheadquarters andsubsidiaries

Relocate personnel of I&D
Company

6

4

5

Stabilize and capitalize on
overseas operations

Launch new products

Restructuring of German
operations
Capitalize on and expand
business base in China

Expand sales of Thermal
Digiplate
Expand sales of new ink jet
media on a global scale
Expand development offunctional non-woven fabric

Shift to high value added
products
New paper for digital printing
Expand development ofvarious types of art paper
FSC certified paper anduse of forest thinnings

Seven Enhanced Countermeasures
Enhanced Countermeasures: Mission— Effects of Cost Reductions —Personnel Decrease Plan

Number of employees at term-end(Persons)(Figures for the next two years are targets)

5,000

FY2009(Year ending March 2010)

FY2010120 people Retirements in 2009

4,577

Effects (¥ 100 million)
Production system Rigorous costrebuilding
reductions(Year ending March 2011)

Germany¥500 million front-loaded for enhanced countermeasures

5

11

Overseas
operations

Personnel
streamlining

Other(energy,depreciation, etc.)

6

11

10

Total

43

Japan

4,632

Decrease of over 300 people
4,441

4,370

4,240

180 people Natural attrition(Employees resigning at 4,000
mandatory retirement age,hiring restrictions)

Decrease of 300 people

FY2011(Year ending March 2012)

6

4

12

3

6

25

3,000
0
Mar. 2009
Mar. 2010(Sept. 2009)

Mar. 2011(target)Mar. 2012(target)Progress of Measures by Business(1) Paper Business
Printing
and communication
Paper
inMeasures
Measures
Plans (1)Printing
and Communication
PaperProgress
Progress inandandPlans
From production curtailment to improved capacity utilization
1. Rebuilding of Production Systems
Transfer of business communication base paper production (carbonless and thermal base paper)
Pulp
Production

Hachinohe Mill

(Integrated paper mill from wood chips)

Paper
MachineCoating MachineTransfer ofbase paper
production(Supply to coater at
Takasago )No. 12 Paper
MachineTakasago Mill

(Paper mill that purchases pulp)

Pulp PurchaseCoating Machine

Shut down(September 2010)

Hachinohe Mill: Improve capacity utilization, reduce energy costs
Takasago Mill: Drastic reduction in purchased pulp, reduce fixed costs(2) I&D Business
Imaging and Development Progress in Measures and Plans
n I&D Business (Driven by Imaging & Development Company)
Applicable Items:
Inkjet paper, photographic paper, photo-sensitive printing plate, resin-coated paper, various functional materials (non woven fabric, filters,
rewritable media, etc.), R&D developed products, etc.

Rebuilding of Production Systems (Kitakami Hitec Paper)
Add new No. 8 RC Machine, and concentrate operations on three multi-function resin coaters
No. 5 RC Machine to be shut down (August 2010)

Restructuring, Cost Reductions, Alliances
1. I&D Company personnel reductions (Kyoto, Kitakami, Headquarters, etc.)
Proceeding according to plan
2. Alliance with FUJIFILM on photographic base paper, now underway

Kitakami Hitec Paper(3) German Business
Printing and communication
Paper
Progressin Measures
German Operations
Progressin Measuresand Plans and Plans (1)Fundamental Restructuring at MPB
MPB : Mitsubishi HiTec Paper Bielefeld GmbH

1. No. 1 Paper Machine (30,000 t/yr) shut
down in July 2009; plant is currently
operating with No.3 Paper Machine(120,000 t/yr)
2. All four cast coaters shut down inAugust 2009
3. Personnel cuts affecting 120 people in2009
4. Review product portfolio, improve
Product mix

1. Firmly established profitability through restructuring and recovery of actual demand in Europe

Business Results for European Segment(¥ million)

350
300
250
200
150
100
50
0
(50)

311

Operating Income
FY2008(Total ¥27 million)

FY2009(Total ¥382 million)

71

59

Jan. – Jun.

(32)

2008

Jul. – Dec.

Jan. – Jun.

2009

Jul. – Dec.

2. Improved productivity in high value added products such as inkjet paper for digital printing

7

Corporate Social Responsibility (CSR)

F­ or the term under review, Mitsubishi Paper Mills Group has set five basic CSR goals: (1) distinctive CSR activities, (2) fostering better
understanding of corporate ethics and conduct, (3) reviewing action programs in the fields of human rights and labor relations,(4) implementing measures for prevention of global warming, and (5) supporting community contribution activities.
Based on the above, we have established six priority activity areas: (1) CSR-based management, (2) ensuring distinctive CSR activities,(3) fostering and realizing better understanding of corporate ethics and conduct, (4) customer satisfaction, (5) human rights and labor
relations, and (6) community contributions. Under this paradigm we are committed to generating greater enterprise value by fulfilling
our social responsibility in terms of compliance, disclosure, safety and quality, human rights and labor relations, the environment, andcommunity contributions.

Special Feature: Biodiversity
Biodiversity describes the way living creatures with diverse characteristics are interlinked and need each other to survive.
Biodiversity has benefited us in many ways — helping us protect the global environment, ensuring supplies of food and water,
helping prevent disasters, and fostering cultures.
Papermaking companies have their roots in wood, the gift of the forests. For this reason, the focus of our commitment tofostering biodiversity is forest conservation. In 2010 — designated International Year of Biodiversity by the UN — we are taking
biodiversity measures that cover all of our operations, centered on forest management under the Forest Stewardship Council (FSC)
standards. Here, we would like to say a few things about biodiversity from three perspectives: direct impact from our production
activities, indirect impact from our wood procurement, and our community contribution activities.

Direct impact from our production activities
Here, we are talking about the impact of emissions from our plants of substances that
contribute to environmental load, and the impact of our own plantations on resource
development. We manage the first category of impact by applying ISO14001 standards
to reduce environmental load. With regard to the second category, we cannot ignore theimpact on ecosystems of our afforestation activities, which require use of large tracts ofland over long periods of time. So we obtained FSC certification for our plantations inChile in 2002 when we began logging there, and have since managed these plantations
based on FSC standards. To protect biodiversity, we ensure that we only fell as muchtimber as can be replaced by a natural growth. We have also taken measures to protect
natural forest and endangered species, and carryout flora and fauna surveys. In a rare species
initiative, we help protect the rare Chilean keule(Gomortega) tree by growing seedlings fromseed and then replanting them in natural forest.
We are also raising awareness among employees of rare animal species found in the areas
around our plantations. Since 2007, we havealso obtained FSC certification for Companyowned plantations within Japan — a measure toprotect biodiversity through best-practice forest
Gathering keule (Gomortega) tree seeds
management.
8

Signs raise awareness of rare animal
speciesIndirect impact of our timber procurement
Wood that we procure from our own plantations is certified by the FSC, but
it meets only part of our timber needs. For other procurement, we give priority to FSC-certified wood, but we cannot guarantee such certification for the
rest. In using non-certified wood for FSC-certified paper, we trace its districtof origin based on FSC Controlled Wood standards, and study the impact on
biodiversity. This means researching whether or not such non-certified wood
harvesting has any negative impact on “High Conservation Value Forests”
or is linked with conversion of natural forests to plantations or non-forest
uses. Only then do we procure non-certified wood. When documentation
checks on biodiversity impact do not suffice, we visit suppliers’ forestsand check ourselves that the woodland is being managed in a way thatsafeguards ecosystems.

Checking suppliers’ forest management

Community contribution activities
We are committed to biodiversity protection activities through FSC-certified
forest in Japan.
<Support system for FSC certified forests>
In this system, FSC-certified wood product user companies shoulder partof the management expenses for managers (local authorities) of an FSCcertified forest, with the money being used to create a more ecologicallysustainable and economically valuable forest. Wood that is then harvested
in the course of forest cultivation and maintenance is used for FSC-certified
products. Through this system, we support FSC-certified forests, startingwith “MUAM no Mori,” a forest in Iwaizumi-cho in Iwate Prefecture supported by Mitsubishi UFJ Asset Management Co., Ltd. “MUAM no Mori”
features a wide range of tree species suited to local conditions, including
fruit-bearing trees and trees that yield high-quality wood. We have launcheda similar initiative in Higashishirakawa-mura, Gifu Prefecture.

Underbush cutting at “MUAM no Mori”

9Our Mills and Their Product Lines

Shirakawa SITE

Kitakami HITEC PAPER CORP.

Hachinohe Mill

Address:

Address:

Address:

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

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

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

Takasago Mill­­Kyoto Mill

Address:

Address:

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

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

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

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

MP Juarez LLC
Address:
Ave. Valle del Cedro #1551 Paraq. Ind Intermex
		
C.P. 32690 Cd. Juarez. Chih., Mexico
Telephone: +1-915-534-8230 (U.S. Head Office)Products: Inkjet paper

Zhuhai MPM Filter, Ltd
Address:#17 Yijing Lane, Pingsha Town, Jinwan District,		Zhuhai, Guangdong, China Guang­dong Province, China
Telephone: +86-756-8895033
Products: Various filters(Juarez, Mexico)(Zhuhai, China)

10Financial Statements

Six-Year Summary (Consolidated)Thousands of
U.S. dollars

Millions of yen
2010

2009

2008

2007

2006

2005

2010

For the years ended March 31
Net sales
Operating income
Ordinary income
Net income (loss)
Net income (loss) per share (in yen and dollars)¥ 219,728 ¥ 253,102
7,110
4,253
4,499
2,658
1,168
(1,597)
3.41(4.67)¥ 258,536
9,302
7,120
3,654
10.99

¥ 244,260
7,256
5,270
7,297
22.44

¥ 228,495
6,484
4,774
7,225
22.16

¥ 234,662
4,326
1,689
(24,658)(75.75)$ 2,361,654
45,71928,577(17,171)(0.05)

As at March 31
Total assets
Total net assets¥ 282,131
68,709¥ 303,052
79,636¥ 320,603
80,326¥ 314,869
76,680¥ 319,469
60,479$ 3,032,368
738,489¥ 294,254
70,436

Note:	Effective from the year ended March 31, 2007, the Company has applied the “Accounting standards for presentation of net assets in the balance sheet,” andthe “Implementation guidance for accounting standards for presentation of net assets in the balance sheet.”	Furthermore, the Company presented its net assets in the balance sheets using the new presentation method as of March 31, 2005 and 2006 to conform tothe current year’s presentation.

11

Mitsubishi Paper Mills Limited and Consolidated Subsidiaries

Consolidated Balance Sheets
As at March 31, 2010 and 2009

Millions of yen

Thousands of
U.S. dollars (Note 2)

2010

2009

2010

¥    7,269¥    3,698$     78,133

48,022
2,488

48,203
2,632

516,151
26,74150,510(756)

50,836(567)

542,892(8,129)Inventories
Deferred income taxes (Note 14)
Other49,75450,996
1,611
909

50,26959,116
1,845
1,695

534,763548,10917,315
9,772

Total current assets

110,540

116,624

1,188,093

Property, plant and equipment (Note 4):Land
Buildings and structures
Machinery and equipment
Construction in progress
Leased assets
Other

22,77596,442
343,461
430
2,684
9,883

22,73492,943
337,005
4,720
2,333
9,964

244,789
1,036,567
3,691,543
4,630
28,857106,233

Less: Accumulated depreciation
Accumulated impairment losses

475,678(344,532)(1,712)469,700(333,307)(221)

5,112,621(3,703,056)(18,407)

129,433

136,172

1,391,156

29,152
1,624
725
(276)
2,731
8,200

27,833
1,492
701
(318)
3,649
8,099

313,329
17,4597,797(2,971)
29,36088,141

42,15841,457453,117¥ 282,131¥ 294,254$ 3,032,368

ASSETS
Current assets:
Cash and bank deposits (Note 3(11))
Receivables:
Trade notes and accounts (Note 10)
Other
Less: Allowance for doubtful accounts

Net property, plant and equipment

Investments and other assets:
Investments in securities (Notes 4, 10 and 11)
Investments in unconsolidated subsidiaries and affiliated companies
Long-term loans
Less: Allowance for doubtful accounts
Deferred income taxes (Note 14)
Other
Total investments and other assets
Total assets
The accompanying notes are an integral part of these financial statements.

12

Financial Statements

Thousands of
U.S. dollars (Note 2)

Millions of yen
2010

2009

2010

¥ 79,902
9,000
13,913570¥ 90,196
2,000
16,05760$   858,796
96,732
149,544
6,126

23,239
4,053
9,803
501
3,247

28,633
3,541
11,945
1,058
5,290

249,783
43,570105,373
5,390
34,901

144,232

158,782

1,550,218

55,679
2,573
6,526
113
1,038
3,258

51,549
3,606
6,286
93
505
2,994

598,444
27,66270,151
1,216
11,16335,021

69,19065,035

743,659

32,756
19,7178,919(133)

32,756
19,717
11,459(129)352,066
211,922
95,869(1,432)

61,25963,803

658,425

2,951
937

1,578
821

31,727
10,071

3,888

2,399

41,799

3,560

4,234

38,26568,70970,436738,489¥ 282,131¥ 294,254$ 3,032,368

LIABILITIES AND NET ASSETS
Current liabilities:
Short-term bank loans (Note 10)
Commercial paper
Current portion of long-term debt (Note 10)
Lease obligations
Payables:Trade notes and accounts (Note 10)
Other
Accrued expenses
Income taxes payable
Other
Total current liabilities
Long-term liabilities:
Long-term debt (Note 10)
Lease obligations
Accrued retirement benefits to employees (Note 13)
Accrued retirement benefits to directors and statutory auditors
Deferred income taxes (Note 14)
Other
Total long-term liabilities
Contingent liabilities (Note 5)
NET ASSETS
Shareholders’ equity:
Common stock:
Authorized: 900,000,000 shares at March 31, 2010 and 2009
Issued: 342,584,332 shares at March 31, 2010 and 2009
Capital surplus
Retained earnings
Less: Treasury stock, at cost
Total shareholders’ equity
Valuation and translation adjustments:
Net unrealized gains on available-for-sale securities
Translation adjustments
Total valuation and translation adjustments
Minority interests in consolidated subsidiaries
Total net assets
Total liabilities and net assets
The accompanying notes are an integral part of these financial statements.

13Mitsubishi Paper Mills Limited and Consolidated Subsidiaries

Consolidated Statements of Operations
For the years ended March 31, 2010 and 2009

Thousands of
U.S. dollars (Note 2)

Millions of yen

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Other income (expenses):
Interest and dividend income
Interest expense(Losses) Gains on disposal of property, plant and equipment
Gains (Losses) on sales of investments in securities
Write-downs of investments in securities
Losses on business restructuring (Note 6)
Impairment loss on property, plant and equipment (Note 8)
Special severance payments
Loss on liquidation of a subsidiary (Note 7)
Other, net
Total
Income (Loss) before income taxes and minority interests
Income taxes:
Current
Deferred (Note 10)
Minority interests in losses of consolidated subsidiaries
Net income (loss)

2010

2009

2010

¥ 219,728
177,810¥ 253,102
205,745$ 2,361,654
1,911,123

41,91747,357450,531

37,66340,246404,812

4,253

7,110

45,719641(2,742)
(625)
865
(49)
(646)
(1,491)
(189)
(390)
184

894
(3,552)
3,754
(1)
(994)
(1,625)
(5)
(268)
—
(193)

6,895
(29,479)(6,725)9,303(534)(6,952)(16,031)(2,038)(4,191)
1,979(4,444)(1,991)(47,774)

(191)

5,119

(2,055)

605
517

1,556
2,124

6,512
5,559

1,123
283

3,680
270

12,072
3,043

1,168

$    (17,171)¥ (1,597)¥
Yen

Amounts per share:
Net income (loss) — basic (Note 3(10))
Cash dividends applicable to the year
The accompanying notes are an integral part of these financial statements.

14¥ (4.67)—

U.S. dollars (Note 2)¥ 3.412.50$ (0.05)—

Financial Statements
Mitsubishi Paper Mills Limited and Consolidated Subsidiaries

Consolidated Statements of Changes in Net Assets
For the years ended March 31, 2010 and 2009

Millions of yen

Shareholders’ equity

Valuation and translation adjustments

Commonstock

CapitalsurplusRetainedearnings

Net
Total
Minority
unrealized
valuationinterests in
Treasurygains onandTotalstock, shareholders’ available-for-sale Translation translation consolidated Total net
assetsat costsecurities
equityadjustments adjustments subsidiaries

Balance at March 31, 2008
342,584,332 ¥ 32,756
Effects of changes in accounting proceduresat overseas subsidiaries
Changes during the year:
Net income
Cash dividends
Acquisition of treasury stock
Disposal of treasury stock
Changes in items other than shareholders’ equity
Total changes during the year——
Balance at March 31, 2009
342,584,332 ¥ 32,756
Changes during the year:
Net loss
Cash dividends
Acquisition of treasury stock
Disposal of treasury stock
Decrease due to change in scope of
consolidation
Decrease due to change in equity
Changes in items other than shareholders’ equity
Total changes during the year——
Balance at March 31, 2010
342,584,332 ¥ 32,756¥ 19,723¥ 14,035¥ (84)

Number ofshares inissue¥ 66,431¥ 7,145¥ 339¥ 7,485¥ 5,720¥ 79,636(2,032)(2,032)(2,032)

1,168(1,712)
(74)
29

1,168
(1,712)
(74)
23

(45)
¥ (129)(595)¥ 63,803

1,168(1,712)(74)
23(6,572)(7,168)¥ 70,436(4)0(1,597)
(855)
(4)
0

(1,597)
(855)
(4)
0

(15)
(71)

(15)
(71)
815
(1,727)¥ 68,709

(6)
(6)
(544)
¥ 19,717 ¥ 11,459(1,597)
(855)
(0)
(15)
(71)
(0)
(2,539)¥ 19,717 ¥ 8,919(3)¥ (133)(2,543)¥ 61,259(5,567)(5,567)¥ 1,578

1,373
1,373
¥ 2,951

481
481
¥ 821

115
115
¥ 937

(5,086)(5,086)¥ 2,399

1,489
1,489
¥ 3,888(1,486)(1,486)¥ 4,234

(673)
(673)
¥ 3,560

Thousands of U.S. dollars
Shareholders’ equity

Commonstock

CapitalsurplusRetainedearnings

Valuation and translation adjustments

Net
Total
Minority
unrealized
valuationinterests ingains onandTreasuryTotalstock, shareholders’ available-for-sale Translation translation consolidated Total net
assetssecurities
at costequityadjustments adjustments subsidiaries

Balance at March 31, 2009
$ 352,066 $ 211,925 $ 123,162 $ (1,393)
Changes during the year:
Net loss(17,171)
Cash dividends(9,193)Acquisition of treasury stock(48)
Disposal of treasury stock(2)
9
Decrease due to change in scope of
consolidation(165)
Decrease due to change in equity(763)
Changes in items other than shareholders’ equity
Total changes during the year—(2) (27,293)(39)
Balance at March 31, 2010
$ 352,066 $ 211,922 $ 95,869 $ (1,432)$ 685,761$ 16,960$ 8,826$ 25,787$ 45,508$ 757,056(17,171)(9,193)(48)
6(17,171)(9,193)
(48)
6

(165)
(763)

(165)
(763)
(7,243)
8,768(7,243)(18,566)$ 38,265 $ 738,489(27,335)$ 658,425

14,767
14,767$ 31,727

1,244
1,244
$ 10,071

16,012
16,012$ 41,799

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

15

Mitsubishi Paper Mills Limited and Consolidated Subsidiaries

Consolidated Statements of Cash Flows
For the years ended March 31, 2010 and 2009

Thousands of
U.S. dollars (Note 2)

Millions of yen
2010

I

Cash flows from operating activities:
Income (Loss) before income taxes and minority interests
Depreciation and amortization
Impairment loss on fixed assets (Note 8)
Accrued retirement benefit costs
Accrued retirement benefit to directors and statutory auditors
Interest and dividend income
Interest expense
Losses (Gains) on disposal of property, plant and equipment
Gains (Losses) on sales of investments in securities
Write-downs of investments in securities
Write-downs of other investments
Losses on business restructuring (Note 6)
Loss on liquidation of a subsidiary (Note 7)
Decrease in trade accounts receivable
Decrease (Increase) in inventories
Decrease in trade accounts payable
Other, net
Sub-totalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities

II

2010

2009

¥    (191)
12,897
1,491(1,344)
20
(641)
2,742
69
(865)
49
15
646
390
213
8,198
(5,524)
540

¥

5,119
12,862—(1,284)
(34)
(894)
3,552
(4,128)
1
994
3
1,625
—
6,663
(12,636)(3,430)609$(2,055)
138,624
16,031(14,453)216(6,895)29,479746(9,303)
534
163
6,952
4,191
2,289
88,114(59,372)
5,813

18,708640(2,876)(1,459)9,021
895(3,668)(2,090)201,078
6,881(30,912)(15,683)

15,013

4,157

161,363(10,238)
330
(144)
2,530

(17,966)
6,322
(181)
59

(110,041)
3,555(1,557)
27,203

(579)

(453)

(6,228)

(337)
29
115

(731)
612
78

(3,627)320
1,237(8,293)(12,261)(89,138)(9,883)7,000
18,207(6,834)(10,100)
(707)
(4)
(855)
(84)
0

5,032
(4,000)19,650(10,668)——(74)(1,712)(100)(49)(106,228)
75,236
195,692(73,459)(108,555)(7,600)(48)(9,193)(913)
6(3,262)

8,077(35,063)

63
3,521
3,464

1,166
1,139
2,324

687
37,84837,233

3,464$ 75,082

Cash flows from investing activities:
Purchases of property, plant, equipment and intangible assets
Proceeds from sales of property, plant, equipment and intangible assets
Purchases of investment in securities
Proceeds from sales of investment in securities
Purchases of shares in unconsolidated subsidiaries andaffiliated companies
Loans madeProceeds from collection of loans
Other, net
Net cash used in investing activities

III Cash flows from financing activities:
Increase or decrease in short-term bank loans
Increase or decrease in issuance of commercial paper
Proceeds from long-term debt
Repayment of long-term debt
Redemption of bonds
Repayment of lease debt
Purchases of treasury stock
Payment of cash dividends by the Company
Payments of cash dividends by subsidiaries to minority shareholders
Other, net
Net cash provided by (used in) financing activities

IV Effect of foreign currency translation on cash and cash equivalents
V Net increase or decrease in cash and cash equivalents
VI Cash and cash equivalents at beginning of the year
VII Cash and cash equivalents at end of the year (Note 3(11))
The accompanying notes are an integral part of these financial statements.

16¥ 6,985¥

Financial Statements
Mitsubishi Paper Mills Limited and Consolidated Subsidiaries

Notes to Consolidated Financial Statements

1. Basis of Presenting the Consolidated Financial Statements

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

The Company maintains its accounting records in yen. The dollar amounts included in the accompanying consolidated financial
statements and notes thereto represent the arithmetical results of translating yen to dollars on the basis of ¥93.04 = U.S.$1, theexchange rate prevailing as of March 31, 2010. The inclusion of such U.S. dollar amounts is solely for convenience and is notintended to imply that yen amounts have been or could be readily converted, realized or settled in U.S. dollars at that rate or any
other rate.
3. Summary of Significant Accounting Policies(1) Scope of consolidation
The Company had 37 subsidiaries as of March 31, 2010 (37 as of March 31, 2009). The accompanying consolidated financial
statements include the accounts of the Company and 25 (27 for 2009) of its subsidiaries for the year ended March 31, 2010
(together, hereinafter referred to as the “Companies”).
MPB HiTec Paper UK Limited, London (UK) and Oy MPB HiTec Paper Ab, Espoo (Finland) have been excluded from thescope of consolidation as they are now insignificant following liquidation procedures.
The accounts of the remaining 12 (10 for 2009) unconsolidated subsidiaries for the year ended March 31, 2010 have been
excluded from consolidation since the aggregate amounts of these subsidiaries in terms of combined assets, net sales, retained
earnings and net income were immaterial in relation to those of the consolidated financial statements of the Companies.
Mitsubishi Paper Holding (Europe) GmbH and other five (7 for 2009) subsidiaries are consolidated using the financial statements as of the respective fiscal year end which falls on December 31 and necessary adjustments are made to their adjustments
are made to their financial statements to reflect any significant transactions from January 1 to March 31.

(2) Consolidation and elimination
For the purposes of preparing the accompanying consolidated financial statements, all significant intercompany transactions,account balances and unrealized profits among the Companies have been eliminated.
Elimination of investments in shares of consolidated subsidiaries, together with the underlying equity in net assets of such
subsidiaries, has been made to include equity in net income of subsidiaries subsequent to the respective dates of acquisitionin the consolidated statements of income. Any difference between the cost of an investment in a subsidiary and the amount ofunderlying equity in net assets of the subsidiary, unless specifically identified and reclassified to the applicable accounts fromwhich the value originates, is treated as an asset or a liability, as the case may be, and amortized over a period of five years on astraight-line basis.
Assets and liabilities of subsidiaries are remeasured based on the full fair value method, whereby the full portion of theassets and liabilities of the subsidiaries is marked to fair value as of the date of acquisition of control.

(3) Investments in unconsolidated subsidiaries and affiliates
The Company had 13 affiliates as of March 31, 2010 (15 for 2009). 2 affiliated companies were accounted for by the equity
method.
However, the remaining 12 (10 for 2009) subsidiaries and 11 (13 for 2009) affiliates did not have a material effect on net
income and retained earnings in the accompanying consolidated financial statements and, therefore, these investments have been
carried at cost.

(4) Financial instruments(i) Derivatives
All derivatives are stated at fair value, with changes in fair value included in net income or loss for the year in which they arise,
except for those that are designated as “hedging instruments.”(ii) Securities
Securities other than equity securities issued by subsidiaries and affiliates are classified into three categories: trading, held-to-maturity17

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

(5) Inventories
Until March 31, 2008, finished products, merchandise and work in process are primarily stated at cost, cost being determinedby the average method and other inventories are stated at cost, cost being determined by the moving average method. Effective
April 1, 2008, finished products, merchandise and work in process are primarily stated at lower of cost or market, cost being
determined by the average method and other inventories are stated at lower of cost or market, cost being determined by the moving average method.

(6) Property, plant and equipment
Mainly depreciation excluding for leased assets is computed by the straight-line method for property, plant and equipment. But
in part, depreciation of machinery held by the head office of the Company and certain consolidated subsidiaries is computed by
the declining-balance method. Estimated useful lives of assets used in computing depreciation are as follows:
Buildings and structures...................... 31 to 47 years
Machinery and equipment............................ 12 years
Leased assets under finance lease agreements of the Company and its domestic consolidated subsidiaries, which do not stipulate the transfer ownership of the leased assets to the lessee, are depreciated principally over the lease term by the straight-line
method with no residual value except for the following transactions. Lease transactions which have been entered into before April
1, 2008 and do not stipulate the transfer of ownership of the leased assets to the lessee have been accounted for as operating leases.
Additional information

The Company and its domestic consolidated subsidiaries have reviewed the useful lives of their property, plant and equipment, pursuant to the revision of the Corporation Tax Law of Japan. As a result, useful lives of certain machinery and equipment have been changed effective April 1, 2008. The effect of this change was to decrease both operating income and income
before income taxes and minority interests by ¥306 million for the year ended March 31, 2009, compared with the corresponding amounts that would have been recorded under the previous method. The effect of this change on segment information is
explained in Note 15.

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

(8) Accrued retirement benefits to employees
The Company and the domestic consolidated subsidiaries provide accrued retirement benefits to employees based on the estimated actuarial present value of the projected benefit obligation and the estimated fair value of plan assets.
Overseas consolidated subsidiaries provide accrued retirement benefits to employees based on the method prescribed bytheir respective countries’ regulations.
Unrecognized net actuarial gains or losses are amortized from the year following the year in which such gains or losses arerecognized on a straight-line basis over a term that does not exceed the average remaining service period of the employees whoare expected to receive benefits under the plans (10 to 15 years). Unrecognized prior service cost is amortized on a straight-line
basis over a term that does not exceed the average remaining service period of the employees who are expected to receive benefits under the plans (10 to 15 years).

18

Financial Statements(9) Translation of foreign currency financial statements (accounts of overseas subsidiaries and affiliates)
The financial statements of overseas consolidated subsidiaries are translated into Japanese yen at the exchange rates prevailingat the respective balance sheet dates of those subsidiaries for assets and liabilities, and at the historical exchange rate for capital
accounts and retained earnings. All income and expense accounts are translated at the average rates of exchange during the fiscal
year of those subsidiaries. The resulting translation adjustments are included in net assets.

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

(11) Cash and cash equivalents
Cash and cash equivalents in the consolidated statements of cash flows are composed of cash on hand, bank deposits that areable to be withdrawn on demand and short-term investments with original maturities of three months or less that are exposed toa minor risk of fluctuation in value.
A reconciliation of cash and cash equivalents in the accompanying consolidated statements of cash flows and cash and bankdeposits in the accompanying consolidated balance sheets at March 31, 2010 and 2009 is shown below:
Millions of yen

Cash and bank deposits
Time deposits with maturities of over 3 months
Cash and cash equivalents

2010

2009

¥ 7,269(283)¥ 6,985¥ 3,698(233)¥ 3,464

Thousands of
U.S. dollars
2010$ 78,133(3,050)$ 75,082(12) Dividends
The corporation Law of Japan (the “Law”) provides that an amount equal to 10% of the amount to be distributed as distributionsof capital surplus (other than the capital reserve) and retained earnings (other than the legal reserve) be transferred to the capitalreserve and the legal reserve, respectively, until the sum of the capital reserve and the legal reserve equals 25% of the common
stock amount. Such distributions can be made at any time by resolution of the shareholders, or by the Board of Directors if certain conditions are met, however neither the capital reserve nor the legal reserve is available for distributions.

(13) Accounting changes(i) Effective for the fiscal year ended March 31, 2010, the “Partial Amendments to Accounting Standard for Retirement Benefits(Part 3)” (Accounting Standards Board of Japan (ASBJ) Statement No. 19 issued on July 31, 2008) has been applied. This change
made no difference on retirement benefit obligations. Therefore, there was no material effect on the financial statements for theyear ended March 31, 2010.
(ii) Effective for the fiscal year ended March 31, 2009, the Company and its domestic consolidated subsidiaries have applied a
new accounting standard for inventories, the “Accounting Standards for Measurement of Inventories” (ASBJ Statement No. 9
issued on July 5, 2006).
The effect of this change was to decrease gross profit by ¥669 million, operating income by ¥598 million, and income before
income taxes and minority interest by ¥295 million for the year ended March 31, 2009, compared with the corresponding amounts
that would have been recorded under the previous method. The effect of this change on segment information is explained in
Note 15.
(iii) Until March 31, 2008, finance leases of the Company and its domestic consolidated subsidiaries were accounted for as operatingleases (whether such leases are classified as operating or finance leases) except that lease agreements which stipulate the transfer ofownership of the leased assets to the lessee are accounted for as finance leases. Effective for the fiscal year ended March 31, 2009,
the Company and its domestic consolidated subsidiaries adopted a revised accounting standard for leases and related implementation guidance, the “Accounting Standard for Lease Transactions” (ASBJ Statement No. 13, revised on March 30, 2007) and the“Guidance on Accounting Standard for Lease Transactions” (ASBJ Guidance No. 16, revised on March 30, 2007). In accordancewith the revised standard, lease transactions which have been entered into on and after April 1, 2008 and do not stipulate the transferof ownership of the leased assets to the lessee have been accounted for as operating leases.
The effect of this change was immaterial to the consolidated financial statements for the year ended March 31, 2009.
(iv) Effective April 1, 2008, the “Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for
Consolidated Financial Statements (PITF No. 18)” has been adopted.
As a result of this change, as of April 1, 2008, retained earnings decreased by ¥2,032 million compared with the corresponding
amount that would have been recorded under the previous method. The effect of this change was immaterial to the income for theyear ended March 31, 2009. The effect of this change on segment information is explained in Note 15.

19

4. Assets Pledged as Collateral
Assets pledged as collateral primarily for short-term loans, long-term debt and debentures at March 31, 2010 and 2009 were as
follows:
Millions of yen

Buildings and structures
Machinery and equipment
Land
Other
Investments in securities

Thousands of
U.S. dollars

2010

2009

2010

¥ 20,888
26,993
9,542
55
3,526
¥ 61,006¥ 22,141
32,947
9,542
503
2,895
¥ 68,030$ 224,515
290,124
102,560
600
37,899$ 655,700

5. Contingent Liabilities

As at March 31, 2010 the Companies were contingently liable for guarantees of loans, primarily of their employees and unconsolidated subsidiaries and affiliates, in the aggregate amount of ¥3,429 million ($36,858 thousand), and also liable for a recourse obligation of credit securitization in the aggregate amount of ¥4,032 million ($43,338 thousand).
6. Loss on Business Restructuring

Loss on business restructuring mainly comprises restructuring costs at European subsidiaries of ¥646 million ($6,952 thousand), and¥1,625 million in 2009.
7. Loss on Liquidation of a Subsidiary

A loss of ¥390 million ($4,191 thousand) is estimated from liquidation of Adelaide Blue Gum Pty Ltd. for the year ended March 31,
2010.
8. Impairment Loss on Fixed Assets

The Company has recognized impairment loss of ¥1,491 million ($16,031 thousand), for the following groups of assets as of March
31, 2010.
LocationTakasago, Hyogo Prefecture
Kitakami, Iwate Prefecture
Katsushika-ku, Tokyo
Total

Use

Property for business use
Property for business use
Idle assets

Category

Machinary and equipment
Machinary and equipment
Building and structures, etc.

Impairment loss
Thousands ofMillions of yen
U.S. dollars¥ 1,002275
213¥ 1,491$ 10,773
2,958
2,298
$ 16,031

The Company assesses the impairment of each measurement unit of assets. Assessment is made on an individual basis for idle assets
and on a measurement unit basis for assets for business use. The measurement unit, in principle, consists of a mill and peripheral
facilities, which make up production units of the Company.
Due to the decline in real estate value and poor performance of assets, asset efficiency has worsened substantially. Therefore, theCompany reduced the book value of assets in question to the recoverable amounts.
The recoverable amounts are determined using the net selling prices. The net selling prices are determined on the basis of theappraisal value by a real estate appraiser.
9. Leases

Finance leases, except those leases for which the ownership of the leased assets is considered to be transferred to the lessee, of
which transaction date is on or before March 31, 2008 were as follows:20

Financial Statements(1) Equivalent of purchase price, accumulated depreciation and net book value of leased assets
Millions of yen
2010

Purchase price equivalent
Accumulated depreciation equivalent
Net book value equivalent

Machineryandequipment

Other

¥ 215
144
¥ 70

¥ 318
231
¥ 87

Thousands of U.S. dollars
2010

2009

Total

Machineryandequipment

Other

¥ 534
376
¥ 157

¥ 424
288
¥ 135

¥ 477
298
¥ 178

Total

Machineryandequipment

Other

Total

¥ 901
586
¥ 314

$ 2,3131,552$   761$ 3,4252,490$   935$ 5,739
4,043$ 1,696(2) Lease commitments
Millions of yen

Due within one year
Due after one year
Total

Thousands of
U.S. dollars

2010

2009

2010

¥ 79
78
¥ 157

¥ 155
158
¥ 314

$   849847$ 1,696(3) Lease expenses and depreciation equivalents
Millions of yen

Lease expenses
Depreciation equivalents

Thousands of
U.S. dollars

2010

2009

2010

¥ 153
153

¥ 269
269

$ 1,652
1,652

Non-cancelable operating lease commitments were as follows:
Millions of yen

Due within one year
Due after one year
Total

Thousands of
U.S. dollars

2010

2009

2010

¥4
0
¥4

¥ 6
4
¥ 11

$ 43
5
$ 49

10. Financial Instruments
Additional information

Effective the year ended March 31, 2010, “Accounting Standard for Financial Instruments” (ASBJ, Statement No. 10 issued on
March 10, 2008) and “Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ, Guidance No. 19 issued on
March 10, 2008) have been applied.

(1) Summary of Financial Instruments(i) Policy regarding financial instruments
To carry out its capital expenditure plans to develop its paper, pulp, photosensitive material products and other manufacturing activities, the Group raises the funds it needs principally through bank loans and issuance of corporate bonds. Temporary
surpluses are managed as short-term deposits, and temporary working capital is procured through bank loans and issuance ofcommercial paper. The Company has a policy of not entering into any speculative derivative transactions and only enters into
derivative transactions to avoid exposure to interest-rate risk on loans.
(ii) Details of financial instruments and related risk and management of risk
Trade notes and accounts receivable are exposed to the credit risk of customers. In accordance with the internal policy for credit
risk management regulations, the Group manages both the due dates and balance of such transactions by customer, and has systems to accurately assess the credit status of its major customers at any time.
Receivables in foreign currencies originating overseas businesses are exposed to foreign exchange-rate risk. These are managed at all times with the aim of maintaining them within the balance of accounts payable denominated in the same foreign
currencies.
Investment securities are exposed to risks of changes in market prices. However, market prices of the shares held for21

operational purposes are periodically reviewed.
Trade notes and accounts payable are obligations due within one year. Some of these obligations are denominated in foreign
currencies in connection with imports of raw materials, and are exposed to exchange-rate fluctuation risk. The Company hedges
against risk regarding net receivables and payables denominated in foreign currencies using forward exchange contracts.
Short-term borrowings are raised mainly in connection with business activities, while long-term debt, corporate bonds andlease obligations related to finance lease transactions are the main means for procurement of funds needed for capital expenditures. In most cases, the repayment date is within five years from the balance sheet date.
For some long-term debt with floating interest rates exposed to interest-rate fluctuation risk, the Company uses derivativetransactions (interest-rate swaps) for hedging purposes.
For derivative transactions, the Company uses forward exchange contracts to hedge against exchange-rate risk affecting
trade notes and accounts receivable and payable denominated in foreign currencies, and interest rate swap transactions to hedge
interest rate fluctuation risks on loans. We do not assess the effectiveness of our hedging strategies, since all derivative transactions meet the conditions for special accounting treatment for interest rate swaps.
For carrying out and managing derivative transactions, the Company adheres closely to internal policies delimiting theauthority for engaging in such transactions. To reduce credit risk in using derivatives, the Company works only with the financial institutions with good credit-ratings.
The Company is exposed to liquidity risk in its payables and borrowings. Risk-management methods including compilationof a monthly cash flow plan are used to mitigate the risks by each Group company.
(iii)Additional notes on the fair value of financial instruments, etc.
Calculations of the fair value of financial instruments are based on their quoted market prices, as well as their reasonably estimated fair value when the quoted market prices are not available. Since various assumptions and factors are reflected in estimating the fair value, different assumptions and factors could result in different fair value. In addition, the contract values ofderivatives in Note 12. Derivatives are not necessarily indicative of the actual market risk involved in derivative transactions.

(2) Fair Value of Financial Instruments
Book value, fair values and differences between them as of March 31, 2010 are as follows. The following table does not include
financial instruments for which the fair value is extremely difficult to determine (Please refer to note below).
Millions of yen
2010

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

Book value

Fair value

Difference¥ 48,022¥ 48,022¥ —23,66571,68823,23979,902
68,742
171,885¥       —23,66571,68823,23979,902
69,446
172,589¥       —

—
—
—
—
704
704
¥ —

Thousands of U.S. dollars
2010

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

Book value

Fair value

Difference$   516,151$   516,151$     —

254,360
770,511249,783
858,796
738,852
1,847,432$         —254,360
770,511249,783
858,796
746,419
1,854,999$         —

—
—
—
—
7,566
7,566
$     —(i) Trade notes and accounts receivable
Because these are settled in a short period of time, fair value approximates book value. Accordingly, fair value is recognized asbook value.
22

Financial Statements(ii) Investment in Securities
Fair value of investment in securities is based on quoted share prices at stock exchanges, and bond prices are based on indicative
published prices in the papermaking sector.
(iii) Trade notes and accounts payable
Because these are settled in a short period of time, fair value approximates book value. Accordingly, fair value is recognized asbook value.
(iv) Short-term borrowings
Because these are settled in a short period of time, fair value approximates book value. Accordingly, fair value is recognized asbook value. Current portion of long-term debt (¥13,813 million ($148,469 thousand)) is included in long-term debt.
(v) Long-term debt
The fair value of long-term debt is calculated by discounting the total principal and interest using the assumed interest rate given
equivalent new borrowings.
For long-term debt with floating interest rates, loans are subject to special settlement for interest swaps. The fair value iscalculated by discounting the total principal and interest (including interest-rate swap) using the interest rate reasonably estimated given equivalent new borrowings. The amount also includes the total current portion of long-term debt of ¥13,813 million($148,469 thousand).
(vi) Derivatives
Please see Note 12.
Unlisted equity securities (in the amount of ¥7,110 million ($76,428 thousand) on the consolidated balance sheet) are notincluded in available-for-sale securities, due to the difficulty of measuring their fair value as the stock has no quoted share priceand future cash flow cannot be predicted.
Planned repayment of debentures, long-term debt, lease obligations and other interest-bearing liabilities after the balance sheet
date (consolidated basis).
Millions of yen
2010

Debentures
Long-term debt
Lease obligations
Other interest-bearing liabilities
Total

Due within
1 year

1-2 years

2-3 years

3-4 years

4-5 years

Over 5years¥    100
13,813570
9,000¥ 23,483¥    100
12,444557—¥ 13,101¥    650
19,565538—¥ 20,754¥      —14,230520—¥ 14,751¥     —
8,440
489—
¥ 8,929

¥ —
248
467
—
¥ 716

Thousands of U.S. dollars
2010

Debentures
Long-term debt
Lease obligations
Other interest-bearing liabilities
Total

Due within
1 year

1-2 years

2-3 years

3-4 years

4-5 years

Over 5years$    1,074
148,469
6,126
96,732$ 252,403$    1,074
133,755
5,990—$ 140,820$    6,986
210,291
5,791—$ 223,069$       —152,951
5,595—$ 158,547$      —90,716
5,255—$ 95,972$     —
2,667
5,030
—
$ 7,698

11. Investments in Securities

The acquisition cost, carrying amount, gross unrealized holding gains and gross unrealized holding losses for securities with fairvalue by security type at March 31, 2010 and 2009 are summarized as follows:
Available-for-sale securities:
Millions of yen
2010

Equity securities
Goverment bonds and local goverment bonds
Other

Acquisition

Carrying amountGross unrealized
holding gains

Gross unrealized
holding losses¥ 18,2419—¥ 18,251¥ 23,655
9—¥ 23,665¥ 7,0660—¥ 7,066¥ 1,652——¥ 1,652

23

Thousands of U.S. dollars
2010

Equity securities
Goverment bonds and local goverment bonds
Other

Acquisition

Carrying amountGross unrealized
holding gains

Gross unrealized
holding losses$ 196,064
103—$ 196,167$ 254,254
106—$ 254,360$ 75,951
2—$ 75,953$ 17,761——$ 17,761

Millions of yen
2009

Equity securities
Goverment bonds and local goverment bonds
Other

Acquisition

Carrying amountGross unrealized
holding gains

Gross unrealized
holding losses¥ 19,8579—¥ 19,866¥ 22,3809—¥ 22,389¥ 5,0600—¥ 5,060¥ 2,537——¥ 2,537

12. Derivatives(1) Transactions not subject to hedge accounting
No applicable transactions(2) Transactions subject to hedge accounting(i) Currency-related
No applicable transactions(ii) Interest-rate related
Hedge accounting
Type of derivative
methodtransaction, etc.
Special settlement ofinterest rate swap

Main targets of hedging Contract value

Interest rate swap trans- Long-term debt
actions, fixed payments,
variable receivables

Contract value of instruments due within morethan a year

¥29,542 million¥22,654 million$317,524 thousand$243,492 thousand

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

Employees of the Company and the domestic consolidated subsidiaries excluding directors and statutory auditors, with more than one
year of service are generally entitled to lump-sum retirement benefits determined by reference to the current basic rate of pay, length ofservice and conditions under which termination occurs. In addition, the Company and certain consolidated subsidiaries have funded otherdefined benefit plans.
The following table sets forth a reconciliation of the projected benefit obligation, plan assets, funded status of the retirement benefit
plans and net liability recognized in the accompanying consolidated balance sheets at March 31, 2010 and 2009.
In addition, in October 2006, the Company transferred a portion of its defined benefit pension plans to a defined contribution
pension plan.
Millions of yen

Projected benefit obligations
Fair value of plan assets
Funded status of the plans
Unrecognized net actuarial
Unrecognized prior service cost (reduction of the obligation)
Net retirement benefits
Prepaid pension costAccrued retirement benefits
24

Thousands of
U.S. dollars

2010

2009

2010

¥ (27,600)
29,3491,749(2,990)(1,269)(2,510)4,016¥ (6,526)¥ (26,221)
20,661(5,609)4,242(1,420)(2,787)3,499¥ (6,286)$ 296,653
315,454
18,800(32,137)(13,645)(26,983)
43,168$ (70,151)

Financial Statements

The net periodic retirement benefit cost for the years ended March 31, 2010 and 2009 included the following components:
Thousands of
U.S. dollars

Millions of yen

Service cost
Interest cost
Expected return on plan assets
Amortization of net actuarial loss (gain)
Amortization of prior service cost (reduction of the obligation)

2010

2009

¥ 1,610
543
(315)
283
(169)
¥ 1,952¥ 1,773
549
(382)
(659)
(155)
¥ 1,1242010$ 17,313
5,837(3,390)3,045(1,820)$ 20,985

Assumptions used in calculation of the above information were as follows:
Discount rate
Expected rate of return on plan assets
Method of attributing the projected benefits to periods of service
Amortization of unrecognized prior service cost
Amortization of unrecognized net actuarial gain or loss

2010

2009

1.5~1.9%
4.0%
mainly on a points basis
10~15 years
10~15 years

2.5%
4.0%
mainly on a points basis
13~15 years
13~15 years

14. Deferred Income Taxes

The statutory tax rate used for calculating deferred tax assets and liabilities for the years ended March 31, 2010 and 2009 was primarily
40.7%.
At March 31, 2010 and 2009, significant components of deferred tax assets and liabilities were as follows:
Millions of yen

Thousands of
U.S. dollars

2010

2009

2010

Deferred tax assets:
Accrued enterprise taxes
Accrued expenses
Accrued retirement benefits to employees
Allowance for doubtful accounts
Loss on revaluation of fixed assets
Unrealized gains on property, plant and equipment
Tax loss carryforwards
Other
Gross deferred tax assets
Valuation allowance
Total deferred tax assets¥     99
1,304
3,690
233
1,036
199
8,125
8,696
23,386(17,456)5,929¥    237
1,376
4,123
239
522
237
12,226
8,703
27,666(21,298)6,368$    1,069
14,01839,662
2,508
11,143
2,149
87,334
93,467251,354(187,619)
63,735

Deferred tax liabilities:
Reserve based on Special Taxation Measures Law
Consolidation adjustment to book value of subsidiaries’ assets
Unrealized gains on available-for-sale securities
Other
Total deferred tax liabilities
Net deferred tax assets

(34)
(239)
(2,200)(163)(2,637)¥ 3,293(37)(243)(1,023)(75)(1,379)¥ 4,988(367)(2,571)(23,645)(1,758)(28,342)$ 35,392

Due to the posting of a loss before income taxes for the year ended March 31, 2010, description regarding reconciliation of the statutory tax rate to the effective income tax rate was omitted.

25

For the year ended March 31, 2009, a reconciliation of the statutory tax rate to the effective tax rates was as follows:2009

Statutory tax rate
Permanently non-deductible expenses
Permanently non-taxable income
Per capita inhabitants’ taxes
Valuation allowance
Current operating losses of subsidiaries
Unrealized gains/losses
Other
Effective tax rates

40.7%
3.2
(1.9)
1.1
(18.9)
28.6
9.2
9.9
71.9%

15. Segment Information(1) Industry segment information
The Companies operate primarily in the production and sale of paper, pulp, photosensitive materials and other.
		 Paper and pulp:
			 Coated paper, premium-quality paper, writing and printing paper, bleached kraft pulp
		 Photosensitive materials:
			 Photographic paper, printing and platemaking materials, related equipment and pharmaceuticals
		 Other:			Operation of swimming clubs, real estate, storage and transport, as well as machinery design, installment andmaintenanceIndustry segment information for the years ended March 31, 2010 and March 31, 2009 as follows:
Millions of yen
Paper
and pulp

Photosensitive
materials

Other

Total

¥ 186,078
5,514
191,592
187,836¥    3,756¥ 26,679
2,838
29,51829,651¥    (133)¥ 6,970
12,996
19,967
19,465¥    501¥ 219,728
21,349241,077
236,953¥    4,124¥     — ¥ 219,728(21,349)—(21,349) 219,728(21,478) 215,474¥    129 ¥    4,253

2 Total assets, depreciation and amortization and capital expenditures:
Total assets¥ 237,018
Depreciation and amortization
11,435
Impairment loss on fixed assets
1,002
Capital expenditures
5,036¥ 31,105
1,270
275
2,286

¥ 13,165
235
213
276

¥ 281,289
12,941
1,491
7,598¥    841 ¥ 282,131(43)
12,897
—
1,491
(55)
7,542

Year ended March 31, 2010

1 Net sales and operating income:Sales to unaffiliated customers
Intersegment sales and transfers
Net sales
Operating expenses
Operating income (loss)

Eliminations/
Headquarters

Consolidated

Thousands of U.S. dollars
Year ended March 31, 2010

1 Net sales and operating income:Sales to unaffiliated customers
Intersegment sales and transfers
Net sales
Operating expenses
Operating income (loss)

Paper
and pulp

Photosensitive
materials

Total

Eliminations/
Headquarters

Consolidated$ 1,999,982 $ 286,752$ 74,920 $ 2,361,654 $       — $ 2,361,654
59,26830,510139,687
229,467 (229,467)—
2,059,251 317,262
214,608 2,591,121 (229,467) 2,361,654
2,018,877 318,697
209,214 2,546,789 (230,853) 2,315,935$     40,373 $   (1,435) $    5,393 $     44,332 $    1,386 $     45,719

2 Total assets, depreciation and amortization and capital expenditures:
Total assets$ 2,547,494 $ 334,328
Depreciation and amortization
122,910
13,650
Impairment loss on fixed assets
10,773
2,958
Capital expenditures
54,12924,57026

Other$ 141,498 $ 3,023,322 $    9,045 $ 3,032,368
2,531
139,092(468)
138,624
2,298
16,031—
16,031
2,966
81,666(595)
81,070Financial Statements

Millions of yen
Paper
and pulp

Photosensitive
materials

Other

Total

¥ 215,443
6,487
221,930
215,388¥ 6,542¥ 30,835
3,334
34,17034,310¥ (139)¥ 6,823
14,752
21,57521,036¥539¥ 253,102
24,574
277,677
270,735¥ 6,941— ¥ 253,102(24,574)—(24,574) 253,102(24,743) 245,991¥
169 ¥ 7,110

2 Total assets, depreciation and amortization and capital expenditures:
Total assets¥ 249,063
Depreciation and amortization
11,605
Capital expenditures
9,358¥ 34,220
1,068
3,265

¥ 13,698
223
3,935¥ 296,981
12,897
16,560¥ (2,726) ¥ 294,254(34)
12,862(95)
16,464

Year ended March 31, 2009

1 Net sales and operating income:Sales to unaffiliated customers
Intersegment sales and transfers
Net sales
Operating expenses
Operating income (loss)

Eliminations/
Headquarters

Consolidated¥

Accounting changes
Application of a new standard for inventories

Due to the application of a new accounting standard for inventories with effect for the year ended March 31, 2009 as stated in (12)(ii) under 3. Summary of Significant Accounting Policies, operating income for the Company’s paper and pulp business declined by¥278 million, while the photosensitive materials business recorded an increase in operating loss of ¥320 million.
Application of a new accounting standard for the Practical Solution on Unification of Accounting policies applied to Foreign Subsidiaries for
Consolidated Financial Statements

For the year ended March 31, 2009, as stated in (12)(iv) under 3. Summary of Significant Accounting Policies, assets of the paper
and pulp business increased by ¥3,774 million compared with amounts calculated using the previous method.
Additional information

Effective from the year ended March 31, 2009, the Company and its domestic consolidated subsidiaries have reviewed the useful
lives of their property, plant and equipment, pursuant to the revision of the Corporation Tax Law of Japan. As a result, comparedwith amounts calculated using the previous method, operating income declined by ¥278 million for the paper and pulp business andby ¥1 million for the “other business” segment, while the operating loss posted by the photosensitive materials business increased by¥26 million.

(2) Information by geographic segment
Segment information by geographical area for the years ended March 31, 2010 and March 31, 2009 as follows:
Millions of yen
Japan

EuropeU.S.A.

Total

Eliminations/
Headquarters

Consolidated

1 Net sales and operating income:Sales to unaffiliated customers
Intersegment sales and transfers
Net sales
Operating expenses
Operating income¥ 177,688
6,352
184,041
180,614¥    3,427¥ 35,621
325
35,94735,564¥    382¥ 6,417
492
6,910
6,838
¥     71

¥ 219,728
7,171
226,899
223,017¥    3,881¥     —
(7,171)(7,171)(7,543)¥    371¥ 219,728—
219,728
215,474¥    4,253

2 Total assets¥ 241,359¥ 23,532¥ 2,672¥ 267,564¥ 14,566¥ 282,131

Eliminations/
Headquarters

Consolidated

Year ended March 31, 2010

Thousands of U.S. dollars
Year ended March 31, 2010

Japan

EuropeU.S.A.

Total

1 Net sales and operating income:Sales to unaffiliated customers
Intersegment sales and transfers
Net sales
Operating expenses
Operating income$ 1,909,812
68,281
1,978,093
1,941,258$     36,834$ 382,865
3,501
386,366
382,250$    4,116$ 68,977 $ 2,361,654
5,294
77,07674,271
2,438,731
73,4992,397,008$    772 $     41,723$       — $ 2,361,654(77,076)—(77,076) 2,361,654(81,072) 2,315,935$    3,995 $     45,719

2 Total assets$ 2,594,151$ 252,929$ 28,723 $ 2,875,803$ 156,564 $ 3,032,368

27

Millions of yen
Year ended March 31, 2009

Eliminations/
Headquarters

Japan

EuropeU.S.A.

Total

1 Net sales and operating income:Sales to unaffiliated customers
Intersegment sales and transfers
Net sales
Operating expenses
Operating income

Consolidated¥ 198,624
5,070
203,695
197,100¥    6,594¥ 46,411
1,122
47,53347,506¥27¥ 8,066
9
8,075
7,990
¥     85

¥ 253,1026,201
259,304
252,597¥ 6,707¥—(6,201)(6,201)(6,605)¥403¥ 253,102—
253,102245,991¥    7,110

2 Total assets¥ 251,082¥ 26,085¥ 2,876¥ 280,044¥ 14,210¥ 294,254

Accounting changes
Application of a new standard for inventories

Due to the application of a new accounting standard for inventories at the Company and its domestic subsidiaries with effect for theyear ended March 31, 2009 as stated in (12) (ii) under 3. Summary of Significant Accounting Policies, operating income on business
operations in Japan decreased ¥598 million, compared with amounts calculated using the previous method.
Application of a new accounting standard for the Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries
for Consolidated Financial Statements

For the year ended March 31, 2009, as stated in (12) (iv) under 3. Summary of Significant Accounting Policies, assets in Europe
increased by ¥3,774 million compared with amounts calculated using the previous method.
Additional information

Effective from the year ended March 31, 2009, the Company and its domestic consolidated subsidiaries have reviewed the useful
lives of their property, plant and equipment, pursuant to the revision of the Corporation Tax Law of Japan. As a result, comparedwith amounts calculated using the previous method, operating income in Japan declined by ¥306 million.

(3) Overseas sales
Export sales and sales by overseas consolidated subsidiaries for the years ended March 31, 2010 and 2009 were as follows:
Millions of yen
2009
2010

Overseas sales:
EuropeAsia
North America
Other
Total

28

¥ 28,636
7,785
10,234
6,305¥ 52,962¥ 39,095
8,030
13,246
7,470¥ 67,843

Thousands of
U.S. dollars
2010$ 307,782
83,681110,005
67,773$ 569,243

Percentage of such sales
against consolidated net sales
2009
2010

13.0%
3.5%
4.7%
2.9%
24.1%

15.4%
3.2%
5.2%
3.0%
26.8%

Financial Statements
Mitsubishi Paper Mills Limited and Consolidated Subsidiaries

Report of Independent Auditors on Consolidated Financial Statements

29

Mitsubishi Paper Mills Limited

Board of Directors, Executive Officers and Corporate Auditors

Managing Executive Officers

Kunio Suzuki

Kazuo Nakase

Junichi Tachibana

Masami Mizuno

President and Chief Executive
Officer

Director and Senior
Managing Executive Officer

Director and Senior
Managing Executive Officer

Director and Senior
Managing Executive Officer

Takefumi Suzuki

Takao Senga

Kanji Itakura

Mitsuo Ushijima

Hiroshi Nozawa

Director and Managing
Executive Officer

Director and Managing
Executive Officer

Director and Managing
Executive Officer

Managing Executive
OfficerManaging Executive
OfficerPresident and Chief
Executive Officer

Kunio Suzuki

President, Imaging & Development
Company

Director and Senior
Managing Executive Officers

Kazuo Nakase

General Manager, Paper Div.; In chargeof Paper Div. and German Operations

Junichi Tachibana

Supervisor, General Affairs &Personnel Dept. and Information
Systems Dept.; In charge of Finance &Accounting Dept.

Masami Mizuno

Supervisor, Purchasing Dept. &Forestry Dept.; In charge of Internal
Audit Dept.

Director and Managing
Executive Officers

Takefumi Suzuki

Vice President, Imaging & Development
Company (In charge of Digital Imaging
Sales Dept. and Newspaper Systems
Sales Group)

Takao Senga

Head, Corporate Research Center;In charge of Corporate Research Center,
Technology & Environmental Dept.
and Intellectual Property Dept.; Vice
President, Imaging &Development Company (In charge of
New Business Development Unit and
Ink Jet Strategy Dept.)

Kanji Itakura

General Manager, President’s Office andCorporate Planning Dept.; In charge of
President’s Office (Corporate Planning
Dept. and Affiliates Managing Dept.);
Director responsible for Corporate Social
Responsibility

Director and Executive
AdvisorTakeshi Sato
Director

Tomohisa Shinagawa
30Managing Executive Officers

Mitsuo Ushijima

General Manager, Commercial Printing
Paper Sales Dept., Paper Div.

Hiroshi Nozawa

In charge of General Affairs & Personnel
Dept. and Information Systems Dept.;
General Manager, Information Systems
Dept.

Senior Executive Officers

Kazuhisa Taguchi

Vice President, Imaging & Development
Company (In charge of Planning,
Marketing and the Kyoto R&D Center)

Kiyoshi Maeda

General Manager, Purchasing Dept. andForestry Dept.

Fukumi Kanehama

Executive Officers

Motoshige YamadaHead, Kyoto Mill, Imaging andDevelopment Company

Shinichi Suzuki

Head, Takasago Mill

Yoshihiko Hibino

Deputy Head, Hachinohe Mill

Kiyoharu Yamada

General Manager, BusinessCommunication & Specialty Paper Sales
Dept., Paper Div.

Corporate Auditors

Norio Fujii
Shigeru Uemura
Yasuharu Takamatsu
Koji Kaihotsu

Head, Hachinohe Mill and General
Manager, Equipment Planning Office

Naoya Tashiro

Vice President, Imaging andDevelopment Company (In chargeof Kitakami Div.); General Manager,
Kitakami Div.; President & CEO,Kitakami Hitec Paper Corp.

(as of June 29, 2010)

Mitsubishi Paper Mills Limited

Company Data

Established:
April 1, 1898
Head Office:4-2, Marunouchi 3-chome, Chiyoda-ku, Tokyo 100-0005, Japan
Telephone:+81-3-3213-3751 (Information)+81-3-3213-3641 (President’s Office)+81-3-3213-3729 (Commercial Printing Paper Sales Dept.
Paper Division)+81-3-3213-3733 (Business Communication & Specialty Paper
Sales Dept. Paper Division)+81-3-3213-3728 (Sales Administration Dept. Paper Division)+81-3-3213-3734 (Ink Jet Strategy Dept. & Photo International
Group Imaging & Development Company)+81-3-3213-3743 (Graphic Systems International GroupImaging & Development Company)+81-3-3213-3731 (Sales Development Dept. New Business
Development Unit Imaging &Development Company)+81-3-3213-3745 (Purchasing Dept.)+81-3-3213-3646 (Forestry Dept.)

Facsimile:+81-3-3214-2338 (Information)+81-3-3213-3818 (President’s Office)+81-3-3213-2339 (Commercial Printing Paper Sales Dept.
Paper Division)+81-3-3215-8157 (Business Communication & Specialty Paper
Sales Dept. Paper Division)+81-3-3215-2339 (Sales Administration Dept. Paper Division)+81-3-3213-6715 (Ink Jet Strategy Dept. & Photo International
Group Imaging & Development Company)+81-3-3214-5936 (Graphic Systems International GroupImaging & Development Company)+81-3-3214-5506 (Sales Development Dept. New Business
Development Unit Imaging &Development Company)+81-3-3213-3804 (Purchasing Dept.)+81-3-3213-3804 (Forestry Dept.)

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

Mitsubishi Paper Sales Co., Ltd.
Ostrich Dia Co., Ltd.
Toho Tokushu Pulp Co., Ltd.
Hachinohe Paper Processing Co., Ltd.
Hachinohe Forest Products Co., Ltd.
Hachiryo Co., Ltd.
Hokuryo Forest Products Co., Ltd.
Hokuryo Co., Ltd.
Hakuryo Co., Ltd.
Takasago Paper Processing Co., Ltd.
Kitakami Hitec Paper Corp.
Diamic Co., Ltd.
Pictorico Co., Ltd.
Asahi Diazo-Sensitive Paper Co., Ltd.
Kyoryo Chemical Co., Ltd.
Naniwa Express Co., Ltd.
Mitsubishi Paper Engineering Co., Ltd.
Ryoshi Co., Ltd.
MPM Shared-service Co., Ltd.
Overseas

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

Sales Branch:
Osaka

Disclaimer Regarding Forward-Looking Statements
This material contains forward-looking statements relating to thebusinesses and prospects of the Company. These statements are basedon our expectations at MAY 2010. and are subject to the risks anduncertainties that may affect our businesses, which could cause actual
results to differ materially from those anticipated.
We will not be liable for any damage or loss incurred by you arisingout of or in connection with this material.

31

SHIN NISSEKI BLDG.
4-2, MARUNOUCHI 3-CHOMECHIYODA-KU, TOKYO 100-0005, JAPANURL http://www.mpm.co.jp/

Printed in Japan