Corporate Report 2021

Financial Section
Consolidated Financial Summary

1Management’s Discussion and Analysis

3

Consolidated Balance Sheet

13

Consolidated Statement of Income

15

Consolidated Statement of Comprehensive Income

16

Consolidated Statement of Changes in Net Assets

17

Consolidated Statement of Cash Flows

19

Notes to Consolidated Financial Statements

20

Independent Auditor’s Report

46

Corprate Data

49

Consolidated Financial Summary
Mitsubishi Gas Chemical Company, Inc. and Consolidated Subsidiaries
Fiscal year period: April 1 to March 31

FY2010FY2011FY2012FY2013

FY2014FY2015

Operating results (Millions of yen)
Net sales¥451,033

452,217467,979

534,443

529,570

593,502

Operating income

23,363

9,083

11,421

11,48814,99634,018

Ordinary income
Profit (loss) attributableto owners of parent
Equity in earnings ofaffiliates

36,394

26,11627,65130,80442,00045,432

18,95012,327(7,793)

14,921

43,34634,134

17,873

20,532

19,045

20,46627,895

16,683Financial position (Millions of yen)
Current assets¥244,522

254,037

261,397

287,642

372,166

341,237

Total assets

577,045595,250

613,908

657,838

790,784

739,582

Current liabilities

182,527

193,464

195,438

178,897

225,068

214,676

Net assets

288,257

292,111294,895

323,858

422,851

423,135

Interest-bearing debt

182,679

185,185

182,644

204,489

215,614

181,427¥39,773

37,34831,16927,182

76,982

84,671(24,626)(37,274)(30,818)(29,883)(23,531)(31,922)(1,849)(9,876)(14,356)

7,124(25,005)(47,335)

46,76835,701

26,90737,31072,67875,828¥83.8554.56(34.50)66.07

191.94153.851,230.50

1,246.92

1,256.81

1,382.52

1,672.25

1,707.01

5.2

2.0

2.4

2.1

2.8

5.7

6.9

4.4

(2.8)

5.0

12.6

9.0

6.5

4.5

4.6

4.8

5.8

5.9

8.0

5.5

5.8

6.1

7.2

7.3

48.2

47.3

46.2

47.5

47.8

51.0

Capital expenditure
Depreciation andamortization
Research andDevelopment cost

¥35,400

42,42330,982

25,40922,22630,512

28,95027,76323,09623,52823,77026,705

16,38017,44915,332

16,122

16,87318,936

Number of employees

4,979

5,216

5,323

5,445

8,254

8,176

Cash flows (Millions of yen)
Operating activity cash
flow
Investing activity cash
flow
Financing activity cash
flow
Total cash and cash
equivalents at end ofyear
Per share data (Yen)
Earnings per share(EPS)*1
Net assets per share *1
Ratios (%)
Operating income
marginReturn on equity (ROE)
Return on assets (ROA)
Return on invested
capital (ROIC)
Equity ratio
Others (Millions of yen)

*1 With and effective date of October 1, 2016, MGC conducted a reverse stock split for MGC's ordinary shares on a 2:1 basis.
As a result, each amounts per share in the above table are calculated assuming that the reverse stock split had been conductedat the beginning of FY2010.

1 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

FY2016

FY2017FY2018FY2019FY2020Operating results (Millions of yen)
Net sales

FY2020(Thousands of
U.S. dollars)*2¥556,480

635,909648,986

613,344595,718$5,380,887

Operating income

43,76262,741

41,38634,26044,510402,041

Ordinary income
Profit (loss) attributableto owners of parent
Equity in earnings ofaffiliates

62,43080,711

69,19931,11650,240453,798

48,01360,53155,00021,15836,070325,806

21,125

18,27728,408(1,282)

5,162

46,626(Thousands of
U.S. dollars)*2

Financial position (Millions of yen)
Current assets¥326,674

384,249

378,845

358,669

402,141$3,632,382

Total assets

738,188785,687

804,038

771,733

836,364

7,554,548

Current liabilities

188,426

206,835

188,420

163,574

167,947

1,516,999

Net assets

473,370

519,144553,282

548,141

581,4115,251,657

Interest-bearing debt

118,713

106,964

95,751

74,713

98,476

Cash flows (Millions of yen)
Operating activity cash
flow
Investing activity cash
flow
Financing activity cash
flow
Total cash and cash
equivalents at end ofyear

889,495(Thousands of
U.S. dollars)*2¥82,71190,72064,042

74,23455,464$500,985(31,119)(33,614)(42,761)(33,922)(40,370)(364,646)(60,217)(33,038)(31,396)(49,563)

5,154

46,554

67,17790,30480,37970,04391,075

822,645

Per share data (Yen)

U.S. dollars*2

Earnings per share(EPS)*1¥221.83

281.39257.46100.50173.41$1.57

Net assets per share *1

1,967.94

2,187.99

2,354.25

2,368.11

2,520.34

22.77

Operating income margin

7.9

9.9

6.4

5.6

7.5

7.5

Return on equity (ROE)

12.0

13.6

11.3

4.3

7.1

7.1

Return on assets (ROA)
Return on invested
capital (ROIC)
Equity ratio

8.4

10.6

8.7

3.9

6.2

6.2

10.4

13.2

10.9

4.9

7.7

7.7

57.5

59.5

62.6

63.8

62.7

Ratios (%)

62.7(Thousands of
U.S. dollars)*2

Others (Millions of yen)
Capital expenditure
Depreciation andamortization
Research andDevelopment cost

¥35,01030,95939,27942,38940,282$363,852

25,631

27,02727,451

29,59130,686277,175

19,267

18,987

18,607

19,696

19,905

179,794

Number of employees

8,034

8,009

8,276

8,954

8,998

8,998

*2 U.S. dollar amounts are translated from yen, for convenience only, at the approximate rate of ¥110.71= US$1 prevailing on
March 31, 2021.

2 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

Management’s Discussion and Analysis
Results of Operations
1. Management Policies, Operating Environment and Challenges to Be Addressed
Forward-looking statements contained herein are based on MGC Group’s judgment as of March 31, 2021.
Fiscal 2020 was the final year of our previous medium-term management plan, MGC Advance2020. We regrettably failed toachieve the plan’s fiscal-2020 performance targets.
The shortfall was attributable to a combination of external and internal factors. The external ones included reduced demandfor certain products due to the COVID-19 pandemic and declines in prices of general-use products, largely in response to USChina trade tensions and supply surpluses stemming from the rise of emerging market economies. The internal factors included
structural maturation of our existing businesses and delays in launching and developing new businesses.
Among our core and semi-core businesses, those that provide products insensitive to market price volatility grew briskly.
These businesses have maintained their respective competitive advantages while helping to solve societal problems. Theirmarkets also continue to grow.
The economic outlook remains highly opaque with respect to the extent and duration of the pandemic’s impact on economic
activity in Japan and globally. MGC will continue to monitor the pandemic’s impact on its business results.
A new Medium-Term Management Plan, “Grow UP 2023,” launched in fiscal 2021, set two new objectives in accord with the
MGC Way, the new MGC Group philosophy: shift to a profit structure resilient to changes in the business environment andbalance social and economic value. MGC is implementing a three-pronged strategy to achieve each objective.
The New Medium-Term Management Plan: Grow UP 2023
●Objective 1
Shifting to a Profit Structure Resilient to Environmental Changes: Business Portfolio Reforms■Strategies- Further strengthen competitively advantageous (“differentiating”) businesses- Accelerate creation and development of new businesses- Reevaluate and rebuild unprofitable businesses
To move forward with business portfolio reforms under the Plan, the MGC Group has reevaluated its business categories,classifying those businesses with both competitive advantage and growth potential as “differentiating businesses.” The MGC
Group is developing a broad range of differentiating businesses to offer value to society. In chemicals and materials, theseinclude Meta-xylenediamine (MXDA), MX-Nylon, aromatic aldehydes and polyacetal; specialty products include electronics
chemicals, BT-related materials, optical polymers and ultra-high refractive lens monomers. The MGC Group will continue tofocus management resources on these differentiating businesses, further strengthening profitability.
In addition, the Group will work to accelerate the creation and development of new businesses. Through revisions to its
Research Promotion and Supervisory organization, the MGC Group is working to more flexibly draw out the capabilities of its
human resources, while maintaining and expanding its existing businesses as a true R&D company and building an R&D
system for creating innovation. At the same time, the Group will construct a system for responding to the needs of its customers
and markets even more swiftly and precisely, striving to create value that leads to sustainable growth. The Group also plans tocontinue introducing new products by increasing its research personnel and making even more active investments in R&D.
In addition to these strategies, the MGC Group will also work to reevaluate and rebuild unprofitable businesses as it attempts
to shift to a profit structure that is resilient to environmental changes. Specifically, by fiscal 2023, the Group aims to have morethan 40% of overall sales come from differentiating businesses, and for unprofitable businesses or those needing rebuilding torepresent less than 3% of total sales.
●Objective 2
Balance Social and Economic Value: Toward Sustainable Growth■Strategies- Solve social issues through business- Harmonize shared-value creation and environmental protection- Strengthen discipline and foundation supporting business activities
Three strategies will be executed with the goal of balancing social and economic value.
While last fiscal year MGC identified materiality--priority issues for management--in line with formulating a new medium-term
management plan, it has also established new fiscal 2030 targets to allow the company to make steady progress in materiality
management, and has set new key performance indicators (KPIs) for fiscal 2023 aimed at achieving those targets. Specifically,
KPIs have been set for GHG emission reductions aimed at air quality control, and for investments and R&D expenditures aimed
at solving energy and climate change-related problems. MGC will tie this kind of materiality management to sustainable growth.
●Targeted Management Indicators (final fiscal year of Grow UP 2023)
ROIC will be introduced as a new KPI aimed at promoting management with an awareness of capital efficiency. The
MGC Group’s goal in implementing these strategies is to set a new record high for operating income.

3 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

Consolidated Performance
Target Value (Fiscal 2023)
Sales (100 mil. JPY)
7,300
Operating income (100 mil. JPY)
700
Ordinary income (100 mil. JPY)
800
ROE (Return on equity)
9% or higher
ROIC (Return on invested capital)
10% or higher
Note: ROIC = Ordinary income/invested capital(Assumptions) Exchange rate: JPY 105/USD, crude oil price (Dubai): 60 USD/BBL
This Management’s Discussion & Analysis contains forward-looking statements, including ones pertaining to plans and targets,based on information available as of March 31, 2021, and certain assumptions deemed reasonable. They involve uncertainty.
Actual performance may differ significantly from such forward-looking statements as a result of various factors.

2. Business and Other Risks
MGC Group defines “risk” as possibilities or hazards that, if they were to manifest, could inflict economic losses on MGC due tohuman casualties, property damage, reputational damage, opportunity losses or other such detriments. The Group has built arisk management regime designed for both routine and exigent circumstances. Specifically, it has established Basic Rules on
Internal Control & Risk Management, formulated risk management/mitigation policies and established an Internal Control & Risk
Management Committee chaired by the officer in charge of internal control and risk management as a decision-making bodythat reports directly to the president. The committee makes decisions on matters related to risk management policies, initiatives
and plans; matters related to business and operational risk management and guidance, direction and oversight incidental
thereto; and matters related to guidance, direction and oversight related to business continuity planning. Additionally, it
periodically reports to the Board of Directors on the state of risk management.
The main foreseeable risks that could affect the Group’s business results, share price, or financial condition are enumerated
from 1) through 11) below. They are all risks that the Group deems to be a realistic possibility, though specifics such as thedegree and timing of their manifestation and their impacts are impossible to estimate as of the company's annual securities
report's filing date (June 25, 2021) (however, they do not necessarily include every risk to which the Group is exposed).
From a medium-term perspective, MGC Group considers mitigation of risks stemming from climate change to be a key
management issue with business-continuity implications. Climate-change-induced amplification of the magnitude of natural
disasters such as anomalous weather events, typhoons and flooding may disrupt MGC Group manufacturing sites’ operations
and/or adversely affect product distribution or supply chains. The Group may have to globally deal with fuel or raw material cost
inflation, imposition of carbon taxes as a climate-change mitigation measure and/or demands to install additional equipment to
reduce environmental impacts.
Initiatives launched by MGC Group to address climate change include the following. In May 2019, the Group endorsed theTask Force on Climate-Related Financial Disclosure’s recommendations. It has established an internal Climate change Action
Technical committee that discusses and assesses risks and opportunities posed to the Group by climate change. The
committee’s assessments are reviewed and approved by a CSR Council comprised of directors and chaired by MGC’s
president. In addition to mitigating risks due to climate change through analyses based on +2°C and +4°C scenarios, the Groupwill strengthen its resilience to be better able to transform risks into business opportunities.
Issues around disposal and reuse of post-use plastics, most notably marine plastic pollution, are gaining recognition globally.
MGC Group places priority on recycling and circularity. It is developing recycling technologies, easily recyclable materials andcompostable bioplastics. Other such initiatives include collecting and recycling waste materials generated when customers use
its products and actively participating in similar initiatives led by industry organizations.

1) Endogenous Business Risks
Nature of Risks
MGC Group is mainly a manufacturer. With many of its products used as raw materials, intermediate goods or pharmaceutical
inputs in customers’ business activities, its sales are sensitive to economic conditions in the countries and regions where its
customers’ products are sold. In particular, market-priced commodities such as methanol, methanol derivatives, generalpurpose aromatic chemicals and polycarbonate resins are generally prone to declines in unit sales and sales prices during
economic downturns. Such products’ economic sensitivity could adversely affect the Group’s operating results and/or financial
condition.
In specialty and high-value-added product markets, the Group competes on multiple dimensions, including price, quality,
functionality, delivery time and customer service. Intensification of competition due to, for example, the advent of products
offering alternative functionality, could adversely affect the Group’s operating results and/or financial condition. For example,
electronic materials supplied mainly to the electronics industry typically have a short product lifecycle and are constantly
exposed to competition through technological innovation. The Group’s sales consequently could decline as a result of existingproducts’ obsolescence or product development delays. Additionally, some of the Group’s products are sold to only a limited
number of customers. If one customer stops using such a product, the Group’s sales could decrease.
MGC Group externally sources electric power and raw materials like xylene. Its manufacturing operations could be disrupted
if a required input were to become unavailable. Its operating results and/or financial condition could be adversely affected by a
sharp rise in input prices also.

4 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

Main Risk Mitigation Measures
MGC Group endeavors to develop new markets and businesses in addition to conducting basic and applied research to develop
new products and manufacturing processes and improve existing ones. Other risk mitigation measures include close
communication and collaboration, inclusive of R&D, with customers, use of long-term supply contracts with both suppliers andcustomers, and sourcing of raw materials and other inputs from multiple suppliers.

2) Overseas Business Risk
Nature of Risk
MGC Group has subsidiaries and manufacturing and sales operations in Asia, North America, South America, the Middle Eastand elsewhere. Depending on country-specific conditions, such overseas operations and even dividend remittances fromoverseas subsidiaries could be disrupted by political instability or societal or economic turmoil due to a natural disaster, war,
infrastructure failure, a widespread infectious disease outbreak or other unforeseeable circumstances. Other risks that could
adversely affect the Group’s operating results and/or financial condition include problems due to differences in legal systems,
investment restrictions imposed by foreign governments, nationalization or expropriation of assets, and personnel or labor
issues.
Main Risk Mitigation Measures
To respond to overseas risks as effectively and expeditiously as possible, MGC Group endeavors to gather information fromvarious sources, including locally stationed expat personnel, joint venture partners, attorneys and government authorities.

3) Joint Venture Risk
Nature of Risk
MGC Group has numerous manufacturing joint ventures in not only Japan but also foreign countries such as Saudi Arabia,
Venezuela, Thailand, China, South Korea, and Trinidad and Tobago. It sources and sells products such as methanol andengineering plastics through its JVs. The Group’s joint venture partners are not under the control of the Group. There isconsequently no assurance they will make decisions in the best interests of the Group or even the joint ventures themselves. In
the event of a joint venture’s dissolution or other such circumstances, the Group’s operating results and/or financial condition
could be adversely affected.
Main Risk Mitigation Measures
MGC Group seeks to maintain and further improve good communication, share targets and objectives and maintainrelationships with its joint venture partners while mitigating risks through joint venture agreements and other operational
agreements.

4) Product Quality Risk
Nature of Risk
As noted above, MGC Group manufactures many products that are used as raw materials, intermediate goods or
pharmaceuticals in customers’ business activities and that conform to specifications agreed upon with the customer. However, if
it sells a qualitatively defective product, it may have to compensate customers that used the defective product, end-productusers and/or other parties for not only direct damages but also opportunity losses. Its societal reputation also may be impaired.
In such an event, the Group’s operating results and financial condition could be adversely affected.
Main Risk Mitigation Measures
Even though most MGC Group manufacturing sites operate in conformance with globally recognized quality control standards,
the Group has liability insurance coverage that includes product liability insurance as a precaution against risk. Other means bywhich the Group mitigates risk include explicitly limiting the scope of its liability as necessary in agreements with customers.

5) Natural Disaster and Accident Risks
Nature of Risks
MGC Group has numerous manufacturing sites in Japan and elsewhere. Their production activities could be disrupted byearthquakes, storms, flooding or other natural disasters, war, terrorism, civil unrest, labor actions, communication infrastructure
failures, widespread outbreaks of infectious diseases such as COVID-19, equipment malfunctions, human error or other
unforeseeable circumstances. Given that MGC Group handles hazardous chemical substances on a daily basis, it cannot
completely eliminate the possibility of explosions, fires, toxic gas leaks or other accidents that damage production facilities,
harm employees, inflict losses on neighboring property owners or customers, pollute the environment or otherwise inflictdamages. Additionally, many MGC Group manufacturing sites have multiple production facilities that share utilities such as
electricity, water and steam. Interruption of utility service to a manufacturing site consequently could shut down the site’s entire
production operations. In such an event, the Group’s operating results and/or financial condition could be adversely affected.
Main Risk Mitigation Measures
While pursuing continuous improvement based on an environmental safety management system, MGC Group diligently strives
to upgrade its safety and disaster preparedness regime through better risk assessment and thorough safety training. In addition
to of course endeavoring to properly maintain and stably operate its manufacturing facilities, the Group also formulates business
continuity plans and builds redundancy into its network of production sites, including overseas. Additionally, the Group mitigatesrisk with broad insurance coverage that includes fire, business interruption, oil pollution and liability insurance.

5 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

In response to the COVID-19 pandemic, MGC Group swiftly set up a Crisis Response Headquarters and has been
expeditiously implementing anti-pandemic measures. Even now, it continues to refine its plants and other workplaces’ antipandemic measures customized to specific operations on a workplace-by-workplace basis to ensure the safety of its
stakeholders, particularly its employees and their families and its customers. Specific measures include proactively using online
videoconferencing throughout the Group to reduce opportunities for contagion, allowing head office staff and other employees towork from home and repeatedly adjusting on-site staffing in response to changing infection rates.

6) Information Security Risk
Nature of Risk
MGC Group possesses confidential and personal information required for its business activities and uses various information
systems in its operations amid ongoing digitalization of its businesses. In the event of a leak of such information, an information
system failure, a cyberattack, fraud committed by a malicious third-party or other such event, the Group’s business activities
and/or operating results could be adversely affected.
Main Risk Mitigation Measures
MGC Group has established an information security regime and internal regulations based on various guidelines and educates
its employees to increase their information-security literacy. It also conducts ongoing initiatives to ensure the adequacy of andupgrade its information security.

7) Investment Risk
Nature of Risk
MGC Group invests in capital assets and R&D to grow its businesses and increase its competitiveness. In doing so, it focuses
its efforts on strengthening existing businesses and developing new businesses aligned with prospective market needs. The
Group also invests and intends to continue investing in business expansion in Japan and overseas through such means asestablishing or co-founding new companies, including joint ventures, and acquiring existing companies.
If the Group fails to earn adequate returns on such investments or incurs impairment losses on non-current assets, securities
valuation losses or equity-method investment losses, its operating results and/or financial condition could be adversely affected.
Main Risk Mitigation Measures
MGC Group has established and carries out internal investment screening procedures and performs additional due diligence as
warranted by the nature of the prospective investment. Additionally, involved organizational units endeavor to devise
appropriate risk mitigation measures.

8) Currency Risk
Nature of Risk
Export, import, and other transactions denominated in foreign currencies could adversely affect the Group’s operating results
and/or financial condition, including by reducing sales revenues or exacerbating losses, as a result of exchange rate
movements.
Additionally, financial statement accounts denominated in overseas MGC Group subsidiaries’ local currencies are translated
into yen to prepare MGC’s consolidated financial statements. Such currency translation could adversely affect the Group’s
operating results and/or financial condition depending on then-prevailing exchange rates.
Main Risk Mitigation Measures
MGC Group partially hedges currency risk associated with foreign-currency receivables and payables, mainly using currency
forward contracts, in accord with internal regulations.

9) Financing and Interest Rate Risks
Nature of Risks
MGC Group partially meets its financing needs by borrowing from financial institutions. In the event of a precipitous change inthe financial environment, the Group’s operating results and/or financial condition could be adversely affected, including byinability to access funding or increased interest expense due to a rise in interest rates.
Main Risk Mitigation Measures
MGC Group strives to maintain adequate financial soundness as measured by indicators such as debt/equity ratio andshareholders’ equity ratio. It also endeavors to optimize its mix of fixed- and variable-rate debt and maintain healthy, favorable
relationships with financial institutions and other sources of capital.

10) Compliance Risk
Nature of Risk
MGC Group handles toxic and otherwise hazardous chemical substances, including high-pressure gases, as an inherent aspectof its operations. As such, it is globally subject to various legal and regulatory restrictions at every stage from manufacturing tostorage, distribution and sales. If the Group were to fail to comply with said legal restrictions or any other law or regulation orsocietal norm, its operating results and/or financial condition could be adversely affected by resultant criminal, civil oradministrative liability, remediation costs, social sanctions or reputational damage.

6 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

Main Risk Mitigation Measures
In addition to establishing specialized organizational units to oversee environmental and other regulatory compliance, the Grouphas built a compliance regime, including an internal whistleblowing system, and endeavors to fully comply with laws andregulations. It also implements various measures to foster a general compliance consciousness among its personnel.

11) Litigation Risk
Nature of Risk
In the event of an unfavorable outcome to litigation or other legal proceedings brought against MGC Group in connection with its
domestic or overseas operations, the Group’s operating results and/or financial condition could be adversely affected. For
example, the Group seeks to protect its intellectual property through such means as applying for and obtaining patents in Japanand overseas. It also endeavors to avoid infringing on other parties’ rights. However, if litigation pertaining to intellectual
property rights was to be decided against MGC, the Group’s operating results and/or growth could be adversely affected.
Main Risk Mitigation Measures
MGC Group endeavors to not only comply with all laws and regulations applicable to its operations but also avoid disputes
through such means as researching other parties’ rights and drafting proper agreements that explicitly delineate rights andobligations with the assistance of attorneys and other expert advisors..

3. Management’s Analysis of Financial Position, Business Results and Cash Flows
1) Summary of Operating Performance
The fiscal-2020 financial position, business results and cash flows (collectively referred to below as “operating performance”) of
MGC Group (MGC and its consolidated subsidiaries and equity-method affiliates) are summarized below.
(1) Consolidated Business Results
During the fiscal year ended March 2021 (April 1, 2020 – March 31, 2021), the world economy remained harsh due to the global
fallout from the novel coronavirus pandemic. Although signs of recovery emerged thanks to national stimulus packages,
progress in vaccination and other positive factors, the pandemic has yet to be contained, causing the outlook for the future toremain unclear.
Against this backdrop, the MGC Group nevertheless saw consistently strong demand for its semiconductor-related products
and optical polymers. On the other hand, demand for such offerings as automotive-related products fell in the first half due tothe novel coronavirus pandemic, while, at the same time, market prices remained sluggish for general-purpose products.
However, the second half brought overall recovery in demand, along with upturns in methanol market prices.
In these circumstances, the MGC Group strove to execute basic policies under “MGC Advance2020,” a medium-term
management plan. More specifically, the Group endeavored to improve its corporate value by promoting such strategies as“Strengthening the earning power of existing businesses with a focus on core businesses,” “Creating and developing new
businesses,” and “Implementing investment strategies to form an optimal business portfolio.”
The MGC Group’s net sales decreased year on year due primarily to a drop in the sales volume of general-purpose aromatic
chemicals and foamed plastics.
However, group operating income rose year on year, despite increases in repair and other fixed costs, thanks primarily to
growth in the sales volume of semiconductor-related products and optical polymers, along with lower raw material and fuelprices.
Ordinary income increased due to the higher operating income as well as improvement in equity in earnings of affiliates
related to overseas methanol producing companies that reflected the absence of one-off costs (¥7.8 billion) recorded in theprevious fiscal year in connection with a joint venture in Saudi Arabia.
Profit attributable to owners of parent grew, despite such factors as growth in impairment losses and a decrease in gain on
sales of investment securities, due mainly to the increase in ordinary income.

Net sales
Operating income
Ordinary income
Profit attributable to owners of parent

FY2019
613.3
34.2
31.1
21.1

FY2020
595.7
44.5
50.2
36.0

(Billions of yen)
Change(17.6)
10.2
19.1
14.9

Operating results by segment are as described below.
In addition, the MGC Group revised the definition of its reportable segments in the first quarter of the fiscal year ended
March 31, 2021. To provide comparative year-on-year segment results, the Group has restated the operating results of theprevious fiscal year to reflect the revised segmentation.
[Basic Chemicals]
The methanol business saw an improvement in earnings thanks mainly to an upturn in market prices in the second half.
Methanol and ammonia-based chemicals posted a decrease in earnings compared with the previous fiscal year due mainly
to a decline in market prices of MMA-based products and an increase in repair costs.

7 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

Specialty aromatic chemical products posted earnings on par with the previous fiscal year, due mainly to remarkablesecond-half recovery in the sales volume of meta-xylenediamine, which had previously been affected by first-half plunge indemand, in addition to solid sales of aromatic aldehydes.
General-purpose aromatic chemical products suffered decreases in net sales and earnings compared with the previous
fiscal year. This was, despite lower raw material and fuel prices, mainly attributable to sluggish sales volumes of meta-xylene
and purified isophthalic acid, as well as lower sales prices of these offerings.
Foamed plastics were buoyed by second-half recovery in demand in the automotive industry, which had been hit by demandstagnation in the first half, and growing product needs associated with food packaging and civil engineering. Reflecting theseand other factors, earnings from these offerings were virtually unchanged from the previous fiscal year.

Net sales
Operating income
Ordinary income

FY2019
357.3
11.2
4.7

FY2020
315.0
9.6
11.0

(Billions of yen)
Change(42.2)(1.6)
6.2[Specialty Chemicals]
Inorganic chemicals posted an increase in earnings compared with the previous fiscal year thanks primarily to growth in thesales volume of chemicals for use in semiconductor manufacturing.
Earnings from engineering plastics were on par with the previous fiscal year thanks mainly to second-half recovery indemand for polycarbonates and polyacetal for automotive and other applications, despite lower first-half demand in these fields.
Optical materials were somewhat affected by signs of stagnation in sales volume in the fourth quarter due to such factors as
shortages of semiconductors and inventory adjustments carried out by customers. However, these offerings posted increases in
net sales and earnings due to the growing use of multiple camera lenses in smartphones and growth in optical polymer sales
volume thanks to measures executed in October 2019 to enhance production capacity.
Electronic materials saw increases in net sales and earnings. This was mainly attributable to growing demand for products
used in data centers and other ICT-related fields as well as the higher sales volume of BT materials for semiconductor
packaging, the core product category for electronic materials, reflecting the introduction of a new product for use in antenna-inpackage substrates to be installed in 5G-compatible smartphones.
Oxygen absorbers such as AGELESSTM posted an increase in earnings compared with the previous fiscal year, despite adecline in demand for offerings used in souvenirs and other tourism-related products, thanks mainly to a solid volume ofexports.

Net sales
Operating income
Ordinary income

FY2019
255.1
25.5
28.1

FY2020
267.4
34.8
37.5

(Billions of yen)
Change
12.3
9.2
9.3

[Other]In Other, the Group posted an increase in earnings from energy-related businesses due to surges in electricity rates in the fourth
quarter.

FY2019Net sales
Operating income
Ordinary income

FY2020
0.8
0.0
0.0

13.2
3.2
3.2

(Billions of yen)
Change
12.3
3.1
3.2

(2) Financial Position
Consolidated assets at March 31, 2021, totaled ¥836.3 billion, a ¥64.6 billion increase from the previous fiscal year-end.
Current assets totaled ¥402.1 billion, a ¥43.4 billion increase attributable largely to increases in cash and deposits and tradenotes and accounts receivable.
Non-current assets totaled ¥434.2 billion, a ¥21.1 billion increase attributable mainly to growth in investment securities.
Liabilities totaled ¥254.9 billion, a ¥31.3 billion increase. Current liabilities increased ¥4.3 billion, mainly as a result of growthin short-term borrowing. Non-current liabilities increased ¥26.9 billion, mostly because of an increase in bonds payable.
Net assets totaled ¥581.4 billion, a ¥33.2 billion increase largely due to growth in retained earnings.
The Group consequently ended the fiscal year with an equity ratio 62.7%(3) Cash Flows
Cash and cash equivalents at March 31, 2021, totaled ¥91.0 billion, a ¥21.0 billion increase from the previous fiscal year-end.
(Cash Flows from Operating Activities)
Operating activities provided net cash of ¥55.4 billion, ¥18.7 billion less than in the previous fiscal year. The decrease waslargely due to growth in trade notes and accounts receivable.

8 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

(Cash Flows from Investing Activities)
Investing activities used net cash of ¥40.3 billion, ¥6.4 billion more than in the previous fiscal year. The increase was largely
attributable to an increase in loan advances.
(Cash Flows from Financing Activities)
Financing activities provided net cash of ¥5.1 billion, a ¥54.7 billion increase from the previous fiscal year. The increase resulted
largely from an increase in proceeds from issuance of bonds.

2) Discussion and Analysis of Operating Performance from Management’s Perspective
The following discussion and analysis of MGC Group’s operating performance from management’s perspective contains
forward-looking statements based on management’s judgment as of March 31, 2021.
(1) Assessment, Discussion and Analysis of Operating Performance
Business results in fiscal 2020, the third year of the MGC Advance2020 medium-term management plan, are recapped below.
They ended up falling short of the plan’s fiscal-2020 targets.
(Billions of yen)
Consolidated KPINet sales
Operating income
Ordinary income
ROE (Return on equity)*Revised May 13, 2019

Fiscal 2020
actual
595.7
44.5
50.2
7.1%

Fiscal 2020
target*
750
65
80
≥ 12%

Difference(154.3)(20.5)(29.8)-4.9ppt

The shortfalls relative to the plan’s targets were largely attributable to a shortfall in unit sales and major changes in the external
environment relative to our assumptions at the time the plan was initially formulated. These changes included depressed market
prices of general-use chemicals such as methanol, purified isophthalic acid and polycarbonates.
While the Group’s business results may continue to be affected by changes in economic conditions and/or market prices,
including such changes due to the pandemic, the Group will proceed to execute its new Grow UP 2023 medium-term
management plan’s strategies in pursuit of the plan’s fiscal-2023 targets. Specific initiatives are discussed below by segment.
Medium/long-term challenges to be addressed include the new medium-term management plan’s two objectives and theirrespective three-pronged strategies discussed above in “1) Management Policies, Operating Environment and Challenges to Be
Addressed” under “Results of Operations.” Additionally, we plan to invest a cumulative ¥240 billion and spend a cumulative ¥73
billion on R&D during the plan’s three-year term. In addition to proactively making strategic investments in differentiating
businesses, we will maximally leverage intra- and extra-Group technologies and human resources through our newly
reorganized R&D program to progress as a unified group toward our top priorities: shifting to a profit structure resilient againstchanges in the environment and balancing social and economic value.
Following is management’s assessment, discussion and analysis of operating performance by segment.
[Basic Chemicals]
The basic chemicals segment’s business results were as follows.
(Billions of yen)
Consolidated KPIFiscal 2020
actual
322.8
9.6
11.0

Net sales*2
Operating income
Ordinary income*1 Revised May 13, 2019
*2 Including intersegment sales and transfers.

Fiscal 2020
target*1
450
30
37Difference(127.2)(20.4)(26.0)The segment failed to achieve its targets in the previous medium-term management plan as a result of multiple factors,
including depressed methanol prices due to a global demand contraction, delays and commissioning a new methanol plant in
Trinidad and Tobago, a pandemic-induced contraction in foamed plastic demand and reductions in purified isophthalic acid unit
sales and sales prices.
Going forward, the segment will develop new technologies to produce methanol as a circular carbon product, reduce costs
by increasing logistic/production efficiency, stabilize overseas methanol production subsidiaries’ operations, plan investments in
new production capacity and implement sales expansion strategies for specialty aromatic chemicals such as metaxylenediamine and aromatic aldehydes, and implement differentiation and growth strategies at JSP Corporation.

9 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

[Specialty Chemicals]
The specialty chemicals segment’s business results were as follows.
(Billions of yen)
Fiscal 2020
Consolidated KPI
actualNet sales*
267.8
Operating income
34.8
Ordinary income
37.5*Including intersegment sales and transfers.

Fiscal 2020
target300
36
44

Difference(32.2)(1.2)(6.5)

Sales of optical polymers and BT semiconductor packaging materials were stronger than forecasted, but inorganic chemicalsales fell short of forecast, polycarbonate prices slumped and demand for engineering plastics and oxygen absorbers weredepressed by the pandemic. The segment consequently failed to achieve its medium-term management plan targets.
Going forward, the segment aims to better meet growing demand through such means as expanding sales of high-valueadded polycarbonates, stepping up its presence in the polyacetal market, strengthening its global network of existing and newsuper-pure hydrogen peroxide production sites, expanding optical polymer production capacity and building a new raw-material
monomer plant. It will also endeavor to increase the overseas share of its oxygen absorber sales, enlarge oxygen absorbers’
scope of application and expand BT materials sales by capturing new demand for BT as an electronic material and expanding
overseas manufacturing subsidiaries’ production capacity.
(2) Factors that May Materially Affect Operating Performance
Factors that may materially affect MGC Group’s operating performance are discussed in “2) Business Risks” under “Results ofOperations.”
Visibility with respect to the extent and duration of the pandemic’s impact on economic activity in Japan and globally remains
highly opaque, partly because of renewed spread of the virus driven by new variants. That said, the global economy is expected
to recover and grow by virtue of the vaccine rollout and governments’ economic stimulus policies.
Depending on how the pandemic evolves going forward, it could depress demand across a broad range of sectors, including
the automotive, housing, infrastructure, electric machinery and electronics sectors, to the detriment of demand for MGC Group
products used as raw materials in such sectors. In the basic chemicals segment, the pandemic’s impact on products such as
foamed plastic, specialty aromatic chemicals and methanol is a concern. Products subject to similar concerns in the specialty
chemicals segment include engineering plastics and oxygen absorbers.
(3) Capital Resources and Liquidity
MGC Group’s main uses of working capital are manufacturing expenses and operating expenses such as selling, general andadministrative expenses.
Its uses of capital for investment purposes include capital expenditures, which it primarily funds with cash on hand,borrowings from financial institutions and bond issuance.
Fiscal 2020 cash flows are analyzed in “(3) Cash Flows” under “1) Summary of Operating Performance.”
MGC ended fiscal 2020 with ¥98.4 billion of interest-bearing debt and ¥91.0 billion of cash and cash equivalents.
(4) Objective Metrics for Assessing Management Policies/Strategies’ Execution Status and Management Targets’
Attainment
Objective metrics MGC Group uses to assess its management policies/strategies execution status and its management targets’
attainment are disclosed above in “1) Management Policies, Operating Environment and Challenges to Be Addressed” under“2Results of Operations.” To facilitate swift management decision-making on matters such as investments in and exits frombusinesses, said metrics include a measure of capital efficiency in addition to net sales and profits.
(5) Significant Accounting Estimates and Their Underlying Assumptions
Significant accounting estimates used to prepare consolidated financial statements and their underlying assumptions aredisclosed in “(s) Significant Accounting Estimates” under “1. Summary of Significant Accounting Policies” under “Notes toConsolidated Financial Statements.”

4. Research and Development
In fiscal 2020, the final year of the MGC Advance2020 medium-term management plan aimed at bringing Vision 2021 to fruition,
MGC Group vigorously carried out R&D activities to strengthen existing businesses’ earnings power with a focus on corebusinesses and create and develop new businesses under the banner of “creating value to share with society.”
The Group substantially reorganized its R&D operations in fiscal 2020, placing the four company divisions’ research
departments and research laboratories and all research departments previously within Corporate R&D’s Advanced Business
Development Division under the centralized control of the R&D Promotion Division. Under this new organizational structure, theGroup has made progress in strengthening existing businesses’ earnings power and developing new businesses by further
accelerating R&D from a Group-wide perspective.

10 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

The Advanced Business Development Division continued to develop businesses in new domains through R&D
collaborations with external partners, including startups, investees and public research institutions. It also moved forward withcommercialization of internally developed products, including medical packaging materials and solid electrolytes, whiledeveloping products in new domains, including allergy diagnostics, through open innovation. The factory-grown produce
business in Shirakawa, Fukushima Prefecture, provides reliably safe vegetables to the public.
MGC Group inclusive of its subsidiaries employs a total of 942 personnel, roughly10% of its total workforce, in research anddevelopment. Its research expenses totaled ¥19,905 million in fiscal 2020.
Fiscal 2020 research themes, research results and research and development costs by segment were as follows:(Millions of yen)
Fiscal 2020
9,166
10,739Segment
Basic Chemicals Segment
Specialty Chemicals Segment

5. Capital Expenditures
Summary of Capital Expenditures
Fiscal-2020 capital expenditures of MGC Group (MGC and its consolidated subsidiaries) were as follows.
(Millions of yen)
Fiscal 2020
19,482
18,619637
1,543
40,282

Segment
Basic chemicals segment
Specialty chemicals segment
Other
Eliminations and corporate
Total

6. Dividend(Yen)InterimFiscal 2020

35

Fiscal year-end
35

11 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

Annual70

12 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

Consolidated Balance Sheet
Mitsubishi Gas Chemical Company, Inc. and Consolidated Subsidiaries
March 31, 2021
Thousands of
U.S. dollars(note 2)Millions of yen

2021

2020

2021

AssetsCurrent assets:
Cash and deposits (note 3)
Notes and accounts receivable - trade (note 18)
Securities (note 4)Inventories
Other
Less allowance for doubtful receivables
Total current assets¥

Non-current assets:
Property, plant and equipment (note 6):
Buildings and structures
Machinery, equipment and vehicles
Land
Leased assets
Construction in progress
Other

101,785
159,018269
121,275
20,209416
402,141¥

78,227141,279
3,514
114,797
21,975
1,124
358,669$

919,384
1,436,347
2,430
1,095,430
182,540
3,758
3,632,382

234,992
501,700
40,774
3,429
24,76653,054
858,718
608,786
249,931220,252
484,798
41,1092,611
23,11351,266823,151
583,313239,838

2,122,591
4,531,659
368,296
30,973
223,702479,216
7,756,463
5,498,925
2,257,529

Intangible assets, net:
Goodwill
Leased assets
Software
Other
Total intangible assets

4,914
5
2,456
3,123
10,499

5,293
0
2,251
3,052
10,59744,38645
22,18428,20994,833

Investments and other assets:
Investment securities (notes 4, 5 and 6)
Long-term loans receivable
Deferred tax assets (note 9)
Net defined benefit asset (note 8)
Other investments and other assets (note 5)Less allowance for doubtful receivables
Total investments and other assets
Total non-current assets
Total assets

158,718
5,012
3,145
1,396
6,064
545
173,792434,223
836,364

149,158
3,153
3,482
974
6,500
640
162,628
413,063771,733

1,433,637
45,271
28,408
12,61054,774
4,923
1,569,795
3,922,166
7,554,548

Less accumulated depreciation
Total property, plant and equipment

13 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

¥

¥

$

Thousands of
U.S. dollars(note 2)Millions of yen

2021

2020

2021

Liabilities and Net Assets
Current liabilities:
Notes and accounts payable - trade
Short-term borrowing and current installments oflong-term borrowing (note 6)
Lease obligations
Accrued expenses
Income taxes payable (note 9)
Provision for bonuses
Other (note 7)
Total current liabilities¥

Non-current liabilities:
Long-term borrowing (note 6)
Lease obligations
Retirement benefit liability (note 8)
Provision for directors’ retirement benefits (note 8)
Deferred tax liabilities (note 9)
Asset retirement obligations (note 7)
Other
Total non-current liabilities
Total liabilities
Stockholders’ equity:
Common stock (note 10):
Authorized 492,428,000 shares; issued 225,739,199
shares in 2021 and 2020
Additional paid-in capital (note 10)
Retained earnings (note 11)
Treasury stock, at cost; 17,726,057 and 17,758,765
shares in 2021 and 2020
Total stockholders’ equity
Accumulated other comprehensive income:
Valuation difference on available-for-sale securities(not 4)
Deferred (losses) gains on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans (note 8)
Total accumulated other comprehensive
incomeNon-controlling interests
Total net assets
Total liabilities and net assets¥
See accompanying notes to consolidated financial statements.

14 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

75,308¥70,776$680,228

40,08743,980362,090543
20,2255,809
5,770
20,201
167,947429
18,0085,539
5,616
19,225
163,574

4,905
182,684
52,47052,118
182,468
1,516,999

56,202
1,643
7,150
217
11,8285,113
4,850
87,006
254,953

29,043
1,260
9,333
433
9,200
3,560
7,183
60,016
223,591

507,651
14,84164,583
1,960
106,838
46,18443,808785,891
2,302,890

41,97041,970379,099

34,301
459,790

34,234
439,701

309,827
4,153,103(21,562)(21,600)(194,761)

514,499494,306

4,647,268

14,4197,789

130,241(618)(3,542)(494)

4(6,701)(2,877)(5,582)(31,993)(4,462)

9,765(1,785)88,20357,146
581,411
836,364

55,619548,141
771,733

516,177
5,251,657
7,554,548¥$

Consolidated Statement of Income
Mitsubishi Gas Chemical Company, Inc. and Consolidated Subsidiaries
For the year ended March 31, 2021
Thousands of
U.S. dollars(note 2)Millions of yen

2021
Net sales (note 18)

¥

2020

595,718¥

613,3442021$

5,380,887

Cost of sales (note 13)454,760

481,950

4,107,669

Gross profit

140,958

131,394

1,273,218

96,448

97,133871,177

44,51034,260402,041

362
2,391
1,424
(800)

565
2,226
1,551
(968)

3,270
21,597
12,862(7,226)

5,162(1,282)

46,6261,800(1,396)
(107)

2,676
(1,628)(939)

16,259(12,610)(966)—(1,098)—(1,368)(1,512)(12,357)—(5,652)—257(1,461)(1,695)
(984)
(287)
(242)
1,388
4,441

859
(1,803)
(381)
—
—
—
7,470
82

2,321
(13,197)(15,310)(8,888)(2,592)(2,186)
12,537
40,114

48,95134,343442,155

10,180
(611)
9,568

8,373
1,482
9,855

91,952(5,519)86,424

Selling, general and administrative expenses(notes 12 and 13)
Operating profit
Other income (expenses):
Interest income
Dividend income
Rental income
Interest expenses
Share of profit (loss) of entities accounted for using
equity method
Gain on sale of investments in securities (note 4)
Rent expenses
Loss on valuation of investments in securities
Provision for loss on liquidation of subsidiaries andassociates
Personnel expenses for seconded employees
Loss on tax purpose reduction entry of non-current
assetsGain on sale of non-current assets
Loss on sale/disposal of non-current assets
Impairment loss (note 14)
Loss from money transfer scam at subsidiary
Loss on withdrawal from business
Loss on liquidation of subsidiaries
Other, net
Total other income (expenses)
Profit before income taxes
Income taxes (note 9):
Current
Deferred
Total income taxes
Profit¥39,383¥24,487$355,731

Profit attributable to non-controlling interests
Profit attributable to owners of parent

¥

3,312
36,070¥3,329
21,158$29,916
325,806

See accompanying notes to consolidated financial statements.

15 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

Consolidated Statement of Comprehensive Income
Mitsubishi Gas Chemical Company, Inc. and Consolidated Subsidiaries
For the year ended March 31, 2021
Thousands of
U.S. dollars(note 2)Millions of yen

2021¥

Comprehensive income¥

53,101¥

13,988$479,641

Comprehensive income attributable to:
Owners of the parent
Non-controlling interests¥

49,213
3,887¥

11,884
2,104$

444,522
35,11016 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021¥

24,487

2021

ProfitOther comprehensive income arising during the year
(note 15):
Valuation difference on available-for-sale securities
Deferred (losses) gains on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Shares of other comprehensive income of entities
accounted for by the equity method
Total other comprehensive income arisingduring the year

See accompanying notes to consolidated financial statements.

39,383

2020$

355,731

6,737
(24)
3,036
2,829

(5,172)
3(3,431)(3,386)60,853(217)
27,42325,553

1,137

1,488

10,27013,718(10,498)

123,909

Consolidated Statement of Changes in Net Assets
Mitsubishi Gas Chemical Company, Inc. and Consolidated Subsidiaries
For the year ended March 31, 2021
Millions of yen
Stockholders’ equity
Additional paidRetainedin capitalearnings
Treasury stock(note 10)
(note 11)

Common stock(note 10)

Balance as of April 1, 2019¥
Changes arising during year:
Cash dividends
Profit attributable to owners of parent
Purchase of treasury stock
Disposition of treasury stock
Retirement of treasury stock
Transfer to additional paid-in capitalfrom retained earnings
Change in scope of consolidation
Change in treasury stock of parent
arising from transactions with noncontrolling interests
Reversal of revaluation reserve for land
Net changes other than stockholders’equityTotal changes during the year
Balance as of March 31, 2020¥
Changes arising during year:
Cash dividends
Profit attributable to owners of parent
Purchase of treasury stock
Disposition of treasury stock
Change in scope of consolidation
Change in scope of equity method
Change in treasury stock of parent
arising from transactions with noncontrolling interests
Net changes other than stockholders’equityTotal changes during the year
Balance as of March 31, 2021¥

41,970 ¥439,080 ¥(19,930) ¥495,418(8,733)40
7,023(14,861)
21,158(8,733)51—(14,861)
21,15811(7,023)
6,959(6,959)

—

1,246

1,246

(10)

(10)
37

—
41,970 ¥(63)
34,234 ¥37621
439,701 ¥(1,669)(21,600) ¥(1,111)
494,306(4)
42(14,559)
36,070(4)57(3)(1,418)(14,559)
36,07014(3)(1,418)51—
41,970 ¥Valuationdifference on
available-forsale securities(note 4)

Balance as of April 1, 2019¥
Changes arising during year:
Cash dividends
Profit attributable to owners of parent
Purchase of treasury stock
Disposition of treasury stock
Retirement of treasury stock
Transfer to additional paid-in capitalfrom retained earnings
Change in scope of consolidation
Change in treasury stock of parent
arising from transactions with noncontrolling interests
Reversal of revaluation reserve for land
Net changes other than stockholders’equityTotal changes during the year
Balance as of March 31, 2020¥
Changes arising during year:
Cash dividends
Profit attributable to owners of parent
Purchase of treasury stock
Disposition of treasury stock
Change in scope of consolidation
Change in scope of equity method
Change in treasury stock of parent
arising from transactions with noncontrolling interests
Net changes other than stockholders’equityTotal changes during the year
Balance as of March 31, 2021¥

34,298 ¥Total

13,023 ¥51

66
34,301 ¥20,088459,790 ¥37(21,562) ¥Millions of yen
Accumulated other comprehensive income
RemeasureDeferred
ForeignSurplus onments of(losses)currency
revaluation
defined benefit
gains ontranslationof landplans
hedgesadjustments(note 8)

1 ¥

222 ¥

(6,327) ¥623 ¥20,192
514,499

Total

7,542 ¥

Noncontrollinginterests

Total net
assets50,321 ¥ 553,282(14,861)
21,158(8,733)
51
—
—
1,246
(10)
37

(5,233)

3

(222)

(374)

(5,233)7,789 ¥

3
4 ¥

(222)
— ¥

(374)
(6,701) ¥(3,500)(9,327)(3,500)(9,327)(2,877) ¥ (1,785) ¥5,298(4,029)5,298(5,141)
55,619 ¥ 548,141(14,559)
36,070(4)57(3)(1,418)
51

6,630

(622)

6,630
14,419 ¥(622)(618) ¥

17 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

—
— ¥

3,159

2,382

3,159
(3,542) ¥2,382
11,550(494) ¥ 9,765 ¥

11,5501,526

13,077

1,526
33,26957,146 ¥ 581,411

Thousands of U.S. dollars (note 2)
Stockholders’ equity
Additional paidRetained
Treasury stockin capitalearnings

Common stock

Balance as of March 31, 2020
Changes arising during year:
Cash dividends
Profit attributable to owners ofparentPurchase of treasury stock
Disposition of treasury stock
Change of scope of consolidation
Change in scope of equity method
Change in treasury stock of parent
arising from transactions with noncontrolling interests
Net changes other thanstockholders’ equity
Total changes during the year
Balance as of March 31, 2021$

379,099 $3,971,647 $(195,104) $(131,506)

325,806
(36)
379

126
(27)
(12,808)
461$—
379,099 $$596
309,827 $

36 $

(36)
515
(27)
(12,808)461

181,447
4,153,103 $

334(194,761) $Thousands of U.S. dollars (note 2)
Accumulated other comprehensive income
DeferredForeign
RemeasureSurplus on(losses)currency
ments ofrevaluation ofgains ontranslation
defined benefit
landhedgesadjustments
plans

70,355 $Total

4,464,872(131,506)

325,806

Valuationdifference on
available-forsale securities

Balance as of March 31, 2020
Changes arising during year:
Cash dividends
Profit attributable to owners ofparentPurchase of treasury stock
Disposition of treasury stock
Change of scope of consolidation
Change in scope of equity method
Change in treasury stock of parent
arising from transactions with noncontrolling interests
Net changes other thanstockholders’ equity
Total changes during the year
Balance as of March 31, 2021

309,222 $— $(60,528) $182,386
4,647,268

Total

Noncontrollinginterests

Total net
assets(25,987) $ (16,123) $ 502,385 $ 4,951,143(131,506)
325,806
(36)
515
(27)
(12,808)461$

59,886(5,618)59,886130,241 $(5,618)(5,582) $See accompanying notes to consolidated financial statements.

18 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021—
— $28,534

21,516104,327

13,784

118,119

28,534(31,993) $21,516104,327
13,784
300,506(4,462) $ 88,203 $ 516,177 $ 5,251,657

Consolidated Statement of Cash Flows
Mitsubishi Gas Chemical Company, Inc. and Consolidated Subsidiaries
For the year ended March 31, 2021
Thousands of
U.S. dollars(note 2)Millions of yen

2021
Cash flows from operating activities:
Profit before income taxes¥
Adjustments to reconcile profit before income taxes to net cash
provided by operating activities:
Depreciation and amortization
Loss on sale/disposal of property, plant and equipment
Impairment loss
Loss on tax purpose reduction entry of non-current assets
Share of profit (loss) of entities accounted for using equity method(Decrease) increase in allowance for doubtful receivables
Increase (decrease) in net defined benefit liability
Decrease in provision for directors’ retirement benefits
Decrease in provision for loss on guarantees
Interest and dividend income
Interest expenses
Gain on sale of short-term investments and investments insecurities
Loss on devaluation of short-term investments and investments insecurities(Increase) decrease in trade notes and accounts receivable(Increase) decrease in inventories
Increase (decrease) in trade notes and accounts payable
Other, net
Sub totalInterest and dividend received
Dividend received from entities accounted for using equity method
Interest paid
Loss from money transfer scam at subsidiary
Income taxes paid
Other, net
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Capital expenditures
Proceeds from sale of property, plant and equipment
Proceeds from sale of investment securities
Purchase of investments in securities and subsidiaries
Loan advances
Proceeds from collection of loans receivable
Proceeds from purchase of shares of subsidiaries resulting in change
in scope of consolidation
Other, net
Net cash provided by (used in) investing activities

2020

48,951¥34,3432021$

442,155

30,686
1,165
1,695
—
(5,162)
(773)
609
(184)
—
(2,754)800

29,591
778
381
5,652
1,282
187
(48)
(245)
(2,358)(2,791)
968

277,175
10,523
15,310—(46,626)(6,982)
5,501(1,662)—(24,876)
7,226(1,766)(2,682)(15,952)

347

762

3,134

(16,283)(5,527)
2,687(1,271)53,221
2,725
3,577
(791)
(984)
(9,259)6,975
55,464

19,048
5,694(13,799)(8,347)
68,416
2,755
10,693(1,030)—(7,173)572
74,234(147,078)(49,923)
24,271(11,480)
480,724
24,61432,310(7,145)(8,888)(83,633)
63,002500,985(38,234)805
4,951(4,619)(4,375)429(43,453)
1,144
4,702
(1,544)(731)
398(345,353)
7,271
44,720(41,722)(39,518)
3,875

—

5,810

—

672
(40,370)(248)(33,922)6,070(364,646)

967
17,508(5,886)20,000(10,000)(4)
0(14,559)(1,906)(14,927)
8,697(15,768)——(8,733)—(14,861)(1,890)

8,735
158,143(53,166)
180,652(90,326)(36)
0(131,506)(17,216)(396)(1,208)(3,577)

(568)
5,154

(870)
(49,563)(5,131)
46,554

Effect of exchange rate changes on cash and cash equivalents

698(1,342)

6,305

Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents resulting from inclusion ofsubsidiaries in consolidation
Cash and cash equivalents at end of year (note 3)

20,94770,043(10,594)
80,379189,206
632,671

Cash flows from financing activities:
Increase (decrease) in short-term borrowing
Proceeds from long-term borrowing
Payments on long-term borrowing
Proceeds from issuance of bonds
Redemption of bonds
Purchase of treasury stock
Proceeds from sale of treasury stock
Dividends paid to stockholders
Dividends paid to non-controlling interests
Payments from changes in ownership interests in subsidiaries that do
not result in change in scope of consolidation
Other, net
Net cash provided by (used in) financing activities

See accompanying notes to consolidated financial statements.

19 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

84¥

91,075258¥

70,043

759$

822,645

Notes to Consolidated Financial Statements
1. Summary of Significant Accounting Policies(a) Basis of Presenting Consolidated Financial Statements
Mitsubishi Gas Chemical Company, Inc. (the Company) and its domestic subsidiaries maintain their books of account andprepare their financial statements in conformity with financial accounting standards of Japan, and its foreign subsidiaries inconformity with those of the countries of their domicile.
“Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial
Statements” (Accounting Standards Board of Japan (ASBJ) Practical Issues Task Force (PITF) No. 18, May 17, 2006) and“Practical Solution on Unification of Accounting Policies Applied to Associates Accounted for by the Equity Method” (ASBJ PITF
No. 24, March 10, 2008) require that for the preparation of consolidated financial statements, the accounting policies andprocedures applied to a parent company and its subsidiaries for similar transactions and events under similar circumstances
should be unified, in principle, and financial statements prepared by foreign subsidiaries in accordance with International
Financial Reporting Standards (IFRS) or the generally accepted accounting principles in the United States (U.S. GAAP)
tentatively may be used for the consolidation process, however, the items listed in the PITF should be adjusted in the
consolidation process so that profit (loss) is accounted for in accordance with Japan GAAP unless they are not material. The
Company made necessary modification to the consolidated financial statements according to the PITF.
The accompanying consolidated financial statements have been prepared in accordance with the provisions set forth in theJapanese Financial Instruments and Exchange Act and its related accounting regulations, and in conformity with accounting
principles and practices generally accepted in Japan, which may differ in certain respects from accounting principles andpractices generally accepted in countries and jurisdictions other than Japan.
In preparing the accompanying consolidated financial statements, certain reclassifications have been made in the financial
statements issued domestically in Japan in order to present them in a form which is more familiar to readers outside Japan. In
addition, the notes to the consolidated financial statements include information which is not required under accounting principles
generally accepted in Japan but is presented herein as additional information.
(b) Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and 68 subsidiaries (72 in 2020).
The Company and its consolidated subsidiaries are collectively referred to as “MGC.”
All significant intercompany accounts and transactions have been eliminated in consolidation.
Fudow Techno Corporation was excluded from the scope of consolidation due to merger with Fudow Company Ltd. as thesurviving company, during the year ended March 31, 2021.
MGC MONTNEY HOLDINGS LTD. was excluded from the scope of consolidation due to liquidation during the year ended
March 31, 2021.
MGC Energy Company Ltd. was included in the scope of consolidation due to its significance during the year ended March
31, 2021.
Tokyo Shokai, Ltd., Ryoko Chemical Co., Ltd., Ryoyo Trading Co., Ltd. were excluded from the scope of consolidation due
to merger with MGC Trading, Inc. as the surviving company, during the year ended March 31, 2021. Upon the merger, thecompany name of MGC Trading, Inc. was changed to Mitsubishi Gas Chemical Trading, Inc.
Investments in 14 affiliates (1 unconsolidated subsidiary and 13 affiliates in 2020) are accounted for by the equity method.
The Accounting Standards for Consolidation require the control or influence concept for the consolidation scope ofsubsidiaries and affiliates. Under the control or influence concept, a company in which the parent company or its consolidated
subsidiaries, directly or indirectly, are able to exercise control over operations is fully consolidated, and a company over which
the parent company and/or its consolidated subsidiaries have the ability to exercise significant influence is accounted for by theequity method.
The difference between the cost and the underlying net assets at the date of investments in subsidiaries or affiliates isallocated to identifiable assets and liabilities based on fair market value at the date of investments.
The unallocated portion of the difference, which is recognized as goodwill, is being amortized using the straight-line method
over an expected benefit period by each investment within 20 years.
The fiscal year-ends of 33 consolidated subsidiaries (33 in 2020) are December 31. For consolidation purposes, theCompany uses their financial statements as of December 31 with necessary consolidation adjustments made to reflect any
significant transactions which occurred between January 1 and March 31.
(c) Cash and Cash Equivalents
For the purpose of the statement of cash flows, MGC considers all highly liquid investments with insignificant risk of changes invalue, which have maturities of generally three months or less when purchased, to be cash equivalents.
(d) Securities and Investments in Securities
Under the Accounting Standards for Financial Instruments, securities are classified into four categories – “trading securities,”“held-to-maturity securities,” “investments in entities” and “other securities.” Securities classified as “trading securities” arestated at fair value and unrealized gains or losses are recorded in the consolidated statement of income. Securities classified as“held-to-maturity securities” are stated at amortized cost. Securities classified as “other securities” with fair value are stated atfair value and unrealized gains or losses, net of related taxes, are excluded from earnings and reported as accumulated othercomprehensive income in the consolidated balance sheet. Debt classified as “other securities” for which fair value is notavailable are stated at the amortized cost. Equity securities classified as “other securities” for which fair value is not available
are stated at the moving-average cost. Realized gains and losses on the other securities are computed using the moving-

20 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

average cost. Securities held by the Company are classified as held-to-maturity securities, investments in entities and othersecurities.
(e) Inventories
Inventories held for sale in the ordinary course of business are measured at the lower of cost or net selling value, which isdefined as the selling price less additional estimated manufacturing costs and estimated direct selling expenses, determinedprincipally by the average method.
(f) Property, Plant and Equipment
Property, plant and equipment are carried substantially at cost. Depreciation of the property, plant and equipment is provided
principally by the straight-line method based on the estimated useful lives.
The estimated useful lives are as follows:
Buildings and structures
7-50 years
Machinery, equipment and vehicles
8-15 years(g) Intangible Assets
Intangible assets are carried at cost less accumulated amortization. The expenses for internal use computer software aredeferred and amortized by the straight-line method over the estimated useful lives (5 years). Intangible assets other thansoftware are deferred and amortized by the straight-line method at rates based on the estimated useful lives of the respective
assets.
(h) Impairment of Long-lived Assets
The standard for the impairment of long-lived assets requires that fixed assets be reviewed for impairment whenever events orchanges in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. An impairment
loss would be recognized if the carrying amount of an asset or asset group exceeds the sum of the undiscounted future cash
flows expected to result from the continued use and eventual disposition of the asset or asset group. The impairment loss would
be measured as the amount by which the carrying amount of the asset exceeds its recoverable amount, which is the higher ofthe discounted cash flows from the continued use and eventual disposition of the asset or the net selling price at disposition.
Recognized impairment losses, except for those to be deducted directly from acquisition costs of corresponding fixed
assets, are included in accumulated depreciation on the consolidated balance sheet.
(i) Allowance for Doubtful Receivables
An allowance for doubtful receivables is provided at an amount of uncollectible receivables based on historical loss ratios andan amount that takes into consideration the possibility of specific liabilities.
(j) Retirement Benefits
In calculating retirement benefit obligation, the benefit formula basis is used for the method of attributing expected retirement
benefits to the periods up to the end of the current fiscal year.
Past service costs are amortized by the straight-line method over a certain period within the average remaining years ofservice of the eligible employees (10 years) when such past service costs occur.
Actuarial gains and losses are amortized by the declining-balance method over a certain period within the averageremaining years of service of the eligible employees (10 years) from the year following the year in which the gains or losses
occur.
The Company and certain subsidiaries have unfunded defined benefit pension plans for directors, corporate auditors andexecutive officers. The provision for the plans has been made in the accompanying consolidated financial statements for thevested benefits to which directors, corporate auditors and executive officers are entitled if they were to retire or severimmediately at the balance sheet dates (See note 8).
(k) Leases
All finance lease transactions are capitalized. Leased assets related to finance lease transactions without title transfer are
depreciated on a straight-line method, with the lease periods as their useful lives and no residual value.

(l) Foreign Currency Translation
Under the Accounting Standards for Foreign Currency Transactions, foreign currency transactions are translated into yen on thebasis of the rates in effect at the transaction dates, receivables and payables denominated in foreign currencies are translated
into yen at the rate of exchange as of the balance sheet dates, and gains or losses resulting from the translation of foreign
currencies are credited or charged to income. Assets and liabilities of overseas subsidiaries are translated into yen at the rate ofexchange as of the balance sheet date, and revenues and expenses of them are translated into yen using the average rate in
the year, and a comprehensive adjustment resulting from translation is presented as “Foreign currency translation adjustments”
and “Non-controlling interests” in a component of net assets.
(m) Income Taxes
Income taxes in Japan applicable to the Company and its domestic consolidated subsidiaries consist of corporate tax, inhabitant
tax and business tax.

21 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

The Accounting Standards for Income Taxes require that deferred income taxes be accounted for under the asset andliability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences of events that havebeen included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected tobe recovered or settled, and the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in
the period that includes the enactment date.
(n) Accrual for Environmental Measures
An accrual for environmental measures is provided at an estimated amount of disposal and transport costs of polychlorinatedbiphenyl waste based on the handling cost publicized by Japan Environmental Storage & Safety Corporation. The Act of Special
Measures for Proper Handling of Polychlorinated Biphenyl Waste requires proper handling of polychlorinated biphenyl waste.
(o) Asset Retirement Obligations
The Company recognized an asset retirement obligation which is statutory or similar obligation with regard to the removal of
assets as a liability. An asset retirement obligation is recognized as a liability at the time that the asset is incurred by its
acquisition, construction, development or ordinary use. When an asset retirement obligation is recognized as a liability, theasset retirement cost corresponding to it is included in the cost of the relevant asset by the same amount.
(p) Accrued Business Structure Improvement Expenses
The Company provides a reasonably estimated amount of structural reform costs for unprofitable business.
(q) Provision for Loss on Liquidation of Subsidiaries and Affiliates
The Company provides a reasonably estimated amount for loss to be incurred in association with liquidation of subsidiaries andaffiliates.
(r) Reclassifications
Certain reclassifications have been made to the prior years’ consolidated financial statements to conform to the presentation
used for the year ended March 31, 2021.
(s) Significant Accounting Estimates
Impairment of fixed assets(1) Amount recorded on the consolidated financial statements for the year ended March 31, 2021

Property, plant and equipment
Intangible assets
Impairment loss

Millions of yen

Thousands of
U.S. dollars

2021

2021

¥

249,931
10,4992,060$ 2,257,529
94,83318,607(2) Information on the nature of significant accounting estimates for identified items
The fixed assets held by the Company and its consolidated subsidiaries are accounted for in accordance with the accounting
standards for impairment of fixed assets. In calculating the recoverable amount used to measure the impairment loss, certain
assumptions are made regarding the economic remaining useful life, future cash flows, discount rate, etc.
Although these assumptions are determined based on management’s best estimates, they may be affected by the results ofchanges in uncertain economic conditions in the future. If a revision is needed, the amount to be recognized in the consolidated
financial statements for the following fiscal year may be affected.
(3) Test for impairment at MITSUBISHI GAS CHEMICAL ENGINEERING-PLASTICS(SHANGHAI)CO., LTD.
MITSUBISHI GAS CHEMICAL ENGINEERING-PLASTICS(SHANGHAI)CO., LTD. is engaged in manufacturing and sales ofpolycarbonates and has adopted IFRS. Although the subsidiary's operating results have deteriorated and there are indicationsof impairment, the subsidiary's fixed assets are recorded at book value because the recoverable amount exceeds the bookvalue. The balance of property, plant and equipment and intangible assets related to MITSUBISHI GAS CHEMICALENGINEERING-PLASTICS(SHANGHAI)CO., LTD. at the March 31, 2021 was ¥5,745 million ($51,892 thousand) and ¥1,451
million ($13,106 thousand), respectively.
The recoverable amount is calculated based on discounted future cash flows. In calculating the cash flows, assumptions
regarding sales volume, sales prices, marginal profit ratio, discount rates, and other items have been made based on trends
from prior years, market data for polycarbonates and its raw material, bisphenol A, and the cost of capital of other companies inthe same industry.

22 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

(t) Accounting Pronouncements Not Yet Adopted- “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, revised on March 31, 2020)- “Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No. 30, revised on March 26,
2021)- “Implementation Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No. 19, revised on
March 31, 2020)
The International Accounting Standards Board (IASB) and US Financial Accounting Standards Board (FASB) jointly developed
comprehensive revenue recognition standards and issued “Revenue from Contracts with Customers” in May 2014 (IASB’s IFRS
15 and FASB’s Topic 606). Considering that IFRS 15 shall apply to fiscal years beginning on or after January 1, 2018, andTopic 606 shall apply to fiscal years beginning after December 15, 2017, the ASBJ developed a comprehensive accounting
standard on revenue recognition and thus issued the accounting standard together with the implementation guidance.
The ASBJ established the accounting standard on revenue recognition by following the basic policies in developing it. The
basic policies were: firstly, incorporating the core principle of IFRS 15 as the starting point from the perspective of facilitatingcomparability among financial statements, which is one of the benefits of ensuring consistency with IFRS 15; secondly, adding
alternative treatments, but to the extent not impairing comparability, where consideration should be given to the practice having
been used in Japan.
These ASBJ statement and implementation guidance will be applied from the fiscal year beginning on April 1, 2021.
The impact of the application of the Accounting Standard for Revenue Recognition and other guidance on the consolidated
financial statements is currently under evaluation.
- “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, issued on July 4, 2019)- “Accounting Standard for Measurement of Inventories” (ASBJ Statement No. 9, revised on July 4, 2019)- “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, revised on July 4, 2019)- “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31, issued on July 4,
2019)- “Implementation Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No. 19, revised on
March 31, 2020)
The IASB and the FASB have provided detailed guidance of almost the same contents for fair value measurement (IFRS 13
Fair Value Measurement by IFRS, and ASU 2018-13 Fair Value Measurement (Topic 820) by U.S.GAAP). Based on such asituation, the ASBJ issued “Accounting Standard for Fair Value Measurement,” etc., as a result of initiatives mainly concerning
promoting the consistency between Japanese and international accounting standards regarding guidance for fair value
measurement and required disclosures.
The basic objective of the ASBJ in developing the accounting standard for fair value measurement was to enhancecomparability between financial statements of domestic and foreign entities, through a unified measuring method. Accordingly,
the accounting standard fundamentally incorporates the basic policies of IFRS 13.Also, where there are items that should beconsidered to reflect the business practices in Japan, exceptional treatments have been established for certain items to theextent that comparability is not lost significantly.
These ASBJ statements and implementation guidance will be applied from the fiscal year beginning on April 1, 2021.
The impact of the application of the Accounting Standards for Fair Value Measurement and other standards and guidanceon the consolidated financial statements is currently under consideration.
(u) Change in Presentation
Application of “Accounting Standard for Disclosure of Accounting Estimates”
The Company has applied the “Accounting Standard for Disclosure of Accounting Estimates” (ASBJ Statement No.31,
issued on March 31, 2020) from the year ended March 31, 2021 and disclosed notes regarding significant accounting estimatesin the consolidated financial statements.
On the other hand, the Company does not disclose nature of the estimate for the year ended March 31, 2020 in accordancewith transitional treatment prescribed in the proviso of Paragraph 11 of the accounting standard.
(v) Additional Information
Assumptions regarding impact of novel coronavirus (COVID-19) in making accounting estimate
Although there are concerns about a decrease in demand, etc. due to the impact of the COVID-19 pandemic, the Company
believes that the impact on the accounting estimates for impairment of fixed assets, etc. will be immaterial.

2. Financial Statement Translation
The translations of the yen amounts into U.S. dollars are included solely for the convenience of the readers, using the prevailingexchange rate as of March 31, 2021, which was ¥110.71 to U.S. $1. This translation should not be construed as arepresentation that the amounts shown could be converted into U.S. dollars at such rate.

23 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

3. Cash and Cash Equivalents(a) Reconciliation between “Cash” in the consolidated balance sheet and “Cash and cash equivalents” in the consolidated
statement of cash flows as of March 31, 2021 and 2020 is as follows
Thousands of
U.S. dollars

Millions of yen

2021
Cash and deposits
Time deposits with maturities of over three months
Securities
Cash and cash equivalents

¥

¥

2020

101,785(10,980)
269
91,075¥¥2021

78,227(11,698)
3,514
70,043$$919,384(99,178)2,430
822,645(b) Details of the assets and liabilities of subsidiaries that have been included in the scope of consolidation due to acquisition ofshares
As of March 31, 2020
TOHO EARTHTECH,INC. has been included in the scope of consolidation due to acquisition of its shares. Assets, liabilities andstock acquisition cost at the time of acquisition are not disclosed due to confidentiality with the seller. The acquisition cost wasdetermined by taking into consideration the results of stock value evaluation by a third-party organization to secure fairness andvalidity.
Japan U-PiCA Company, Ltd. has been included in the scope of consolidation due to acquisition of its shares. The components
of assets and liabilities at the time of acquisition, the acquisitions cost and net expenditure for this acquisition are as follows:
Millions of yen

Current assets
Non-current assets
Current liabilities
Non-current liabilities
Loss on revaluation of acquisitionNon-controlling interests
Negative Goodwill
Stock acquisition cost
Investment value accounted for by the equity method prior to obtaining control
Loss on step acquisitions
Cash and cash equivalents of the new consolidated subsidiary
Expenditure for acquisition

¥

¥

¥

2020
9,227
3,485
(2,559)(1,059)(190)(2,991)(492)
5,419(3,947)
197(4,922)(3,251)

4. Securities and Investments in Securities
There were no held-to-maturity securities with fair value as of March 31, 2021. Balance sheet amount, fair value and grossunrealized gain and loss of held-to-maturity securities with fair value as of March 31, 2020 are summarized as follows:

Balancesheet
amountMarch 31, 2020
Government bond securities
Certificates of deposit

¥
¥

0 ¥
3,000
3,000 ¥

Millions of yen
Gross
Gross
unrealized
unrealized
gain
loss

Fair value

— ¥
—
— ¥

0 ¥
—
0 ¥

0
3,000
3,000

Balance sheet amount, acquisition cost, and gross unrealized gain and loss of other securities with fair value as of March 31,
2021 and 2020 are summarized as follows:

Balancesheet
amountMarch 31, 2021
Equity securities
Other securities¥¥

March 31, 2020
Equity securities
Other securities¥¥

Millions of yen
Gross
Gross
unrealized
unrealized
gain
loss

Acquisition
cost

38,702 ¥87
38,790 ¥21,364 ¥—21,364 ¥(383) ¥
(12)(396) ¥

17,721100
17,82132,365 ¥578
32,943 ¥14,367 ¥—
14,367 ¥(2,283) ¥(31)(2,315) ¥20,281
610
20,891

24 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

Balance
sheet
amountMarch 31, 2021
Equity securities
Other securities$$

349,580 $786
350,375 $Thousands of U.S. dollars
Gross
Gross
unrealized
unrealized
gain
loss

192,973 $—
192,973 $Acquisition
cost(3,459) $(108)(3,577) $160,067903
160,970

Securities classified as other securities for which fair value is not available are unlisted equity securities amounting to ¥5,839
million ($52,741 thousand) and ¥3,822 million as of March 31, 2021 and 2020, respectively.
For the years ended March 31, 2021 and 2020, proceeds from the sale of other securities are ¥4,648 million ($41,984
thousand) and ¥4,702 million, respectively. Gross realized gains are ¥1,807 million ($16,322 thousand) and ¥2,681 million forthe years ended March 31, 2021 and 2020, respectively.
The Company recognized impairment losses on securities of ¥228 million ($2,059 thousand) and ¥762 million for the years
ended March 31, 2021 and 2020, respectively.
The Company recognizes impairment losses on securities with market value when the market value declines by more than
50 percent. When the market value declines by more than 30 percent but less than 50 percent, the Company recognizes
necessary impairment losses as a result of considering the possibility of recovery. The Company recognizes impairment losses
on securities without market value when the value declines significantly due to an issuer’s financial condition.

5. Investments in Affiliates
The aggregate carrying amounts of investments in affiliates as of March 31, 2021 and 2020 are ¥113,660 million ($1,026,646
thousand) and ¥112,946 million, respectively.

6. Short-term and Long-term Borrowings
Short-term borrowing is represented by bank loans which are due within one year. The weighted average interest rate of shortterm borrowing is 0.9% and 1.3% as of March 31, 2021 and 2020, respectively.
Long-term borrowing as of March 31, 2021 and 2020 is summarized as follows:
Thousands of
U.S. dollars

Millions of yen

2021
Loans, principally from banks, maturing in installments through 2035
with weighted average interest of 0.18% as of March 31, 2021,
partially secured by mortgage of property, plant and equipment andsecurities
Loans, principally from banks, maturing in installments through 2035
with weighted average interest of 0.87% as of March 31, 2020,
partially secured by mortgage of property, plant and equipment andsecurities
Lease obligations maturing in installments through 2056 as of March
31, 2021
Lease obligations maturing in installments through 2056 as of March
31, 2020
Unsecured bonds, due 2030 with interest of 0.340%
Unsecured bonds, due 2025 with interest of 0.170%
Unsecured bonds, due 2021 with interest of 0.572%
Less current installments:
Loans
Lease obligations
Unsecured bonds

¥

2020

55,185

¥

2021

—

$

498,464—

38,042

—

2,186

—

19,745

—

1,689

—

10,00010,000—77,371——
10,00049,731

90,32690,326—
698,862

10,413
5,853
94,057
543
429
4,905
—
10,000—¥66,415¥33,449$599,901
Note: The weighted average interest rates on lease obligations as of March 31, 2021 and 2020 are omitted because leaseobligations were recorded in the consolidated balance sheet based on the total lease payment which includes assumed
interests portion.

25 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

The aggregate annual maturities of loans after March 31, 2022, are as follows:
Millions of
Yen

Year ending March 31,
2023
2024
2025
2026

¥

6,313
14,871
3,756
2,661

Thousands of
U.S. dollars$

57,023
134,324
33,92624,036

Property, plant and equipment and securities with a book value as of March 31, 2021 of ¥26,950 million ($243,429
thousand) were mortgaged to secure certain debts.
As is customary in Japan, both short-term and long-term bank loans are under general agreements which provide that
security and guarantees for present and future indebtedness will be given upon request of the bank, and that the bank shallhave the right, as the obligations become due or in the event of default, to offset cash deposits against obligations due thebanks.

7. Asset Retirement Obligations(a) Asset retirement obligations recognized on the consolidated balance sheet
The Company is obliged to restore its natural gas mining facilities except for mentioned below (c) according to law and landlease contracts. The asset retirement obligations are based on estimated future cash flows for the restorations. The obligations
are calculated by using the estimated mine lives of 18 to 76 years and discounted rate of 0.828% to 2.385%.
Asbestos are used in part of fixed assets held by the Company and certain consolidated subsidiaries. The Company isobliged to conduct a special treatment when asbestos are removed. The asset retirement obligations are based on estimatedfuture cash flows for the treatment. The obligations are calculated by using the estimated useful lives of the fixed assets mainlyof 8 years and discounted rate mainly of 1.035%.
The following table provides a total asset retirement obligation for the years ended March 31, 2021 and 2020:
Thousands of
U.S. dollars

Millions of yen

2021

2020

Balance at beginning of year
¥
3,560
¥
2,437
Liabilities incurred due to the acquisition
05
Increase due to change of estimate
1,406—
Accretion expenses
41
42
Liabilities settled
(0)
(125)
Other
104
1,201
Balance at end of year
¥
5,113
¥
3,560
Note: The increase in other for the year ended March 31, 2020 is due to change in scope of consolidation.

2021
$

$

32,1560
12,700370(0)939
46,184(b) Change of estimate of amount for asset retirement obligations
The Company changed its estimate for restoration costs that had been recorded as restoration obligations based on laws andregulations for some of the natural gas mining facilities owned by the Company in the year ended March 31, 2021 as new
information about costs for well abandonment and other items was obtained.
The increase of ¥1,406 million ($12,700 thousand) due to this change in estimate has been added to the balance of asset
retirement obligations before the change.
As a result of change in the estimate, profit before income taxes for the year ended March 31, 2021 decreased by ¥1,258
million ($11,363 thousand), because some fixed assets of natural gas mining facilities were accounted for as impairment losses
due to recording property, plant and equipment according to change in the estimate.
(c) Asset retirement obligations not recognized on the consolidated balance sheet
The Company is obliged to restore its natural gas mining facilities according to law and land lease contracts, and the Company
plans to use part of the facilities as storage facilities after mining continuingly. The Company and certain consolidated
subsidiaries are obliged to restore their piers and pipelines according to law and lease contracts, and the piers and pipelines
can be used for a substantial long-term with appropriate repair. Asset retirement obligations relating to these assets are notrecognized because it is extremely difficult to estimate the time of fulfilling the obligations reasonably.

8. Retirement Benefits
MGC has defined retirement benefit plans such as lump-sum retirement benefit plans and defined benefit corporate pension
plans, besides defined contribution pension plans.
In addition, the Company has also set up retirement benefit trusts.
Certain consolidated subsidiaries apply the simplified method in computing net defined benefit liability and retirement
benefit expenses for their defined benefit corporate pension plans and lump-sum retirement benefit plans.

26 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

Defined benefit plans(a) Reconciliation between retirement benefit obligations at beginning of year and end of year (excluding plans
applying the simplified method):Thousands of
U.S. dollars

Millions of yen

Retirement benefit obligation at beginning of year
Service costs
Interest costs
Actuarial gains and losses arising during year
Retirement benefits paid
Other
Retirement benefit obligation at end of year

¥

¥

2021
41,794
2,175
375
111
(2,129)227
42,555

2020
41,332
2,105
367
(43)
(1,953)(13)¥
41,794¥2021
377,509
19,646
3,387
1,003(19,230)
2,050$
384,383$(b) Reconciliation between plan assets at beginning of year and end of year (excluding plans applying the simplified
method):Thousands of
U.S. dollars

Millions of yen

Plan assets at beginning of year
Expected return on plan assets
Actuarial gains and losses arising during year
Contribution from employer
Retirement benefits paid
Other
Plan assets at end of year

¥

¥

2021
36,248
498
2,798
1,412
(1,478)68
39,5482020
38,909571(3,277)
1,615(1,550)(19)¥
36,248¥2021
327,414
4,498
25,27312,754(13,350)614$
357,222$(c) Reconciliation between net defined benefit liabilities of plans applying the simplified method at beginning of year
and end of year:
Thousands of
U.S. dollars

Millions of yen

Net defined benefit liability at beginning of year
Retirement benefit expenses
Retirement benefits paid
Contribution to plans
Increase due to change in scope of consolidation
Decrease due to transition to defined contribution pension plans
Other
Net defined benefit liability at end of year

2021
2,813
164
(189)
36
—
(92)
14
¥
2,746
¥

2020
1,651
294
(67)
(43)
984
—
(4)
¥
2,813
¥

2021
25,4091,481(1,707)
325
—
(831)
126
$
24,804$(d) Reconciliation between retirement benefit obligations and plan assets at end of year and net defined benefit asset
and defined benefit liability on the consolidated balance sheet:
Thousands of
U.S. dollars

Millions of yen

Funded retirement benefit obligation
Plan assets
Unfunded retirement benefit obligation
Net balance of liability and asset recorded on the consolidatedbalance sheet
Net defined benefit asset
Net defined benefit liability
Net balance of liability and asset recorded on the consolidatedbalance sheet

27 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

2021
42,695(41,396)
¥
1,299
4,454
¥

2020
42,140(38,058)
¥
4,081
4,276
¥

2021
385,647(373,914)$
11,73340,231
$

¥

5,753

¥

8,358

$

51,965¥(1,396)
7,150

¥

(974)
9,333

$

(12,610)64,583

¥

5,753

¥

8,358

$

51,965(e) Retirement benefit expenses and components thereof:
Thousands of
U.S. dollars

Millions of yen

2021
2,175
375
(498)
415
0
164
(2)
¥
2,630

Service costs
Interest costs
Expected return on plan assets
Amortization of actuarial gains and losses
Amortization of past service costs
Retirement benefit expenses applying the simplified method
Other
Retirement benefit expenses under defined benefit plans
(f)

¥

2020
2,105
367
(571)
(230)
(19)
294
(7)
¥
1,938
¥

2021
19,646
3,387(4,498)
3,749
0
1,481
(18)
$
23,756$Components of items recorded in remeasurements of defined benefit plans in other comprehensive income, before
tax, are as follows:
Thousands of
U.S. dollars

Millions of yen

2021
Past service costs
Actuarial gains and losses
Total

¥
¥

2020

0
3,064
3,065

¥
¥

(19)
(3,608)(3,627)

2021
$
$

0
27,676
27,685(g) Components of items recorded in remeasurements of defined benefit plans in accumulated other comprehensive
income, before tax, are as follows:
Thousands of
U.S. dollars

Millions of yen

2021
Unrecognized past service costs
Unrecognized actuarial gains and losses
Total

¥
¥

2020

(37)
(1,088)(1,126)

¥
¥

(37)
1,973
1,935

2021
$
$

(334)
(9,827)(10,171)(h) Plan assets(i) Components of plan assets
Percentages to total plan assets by major category are as follows:
2021
32%
37
11
20
100%

Debt securities
Equity securities
Cash and deposits
Other
Total

2020
36%
26
14
24
100%

(ii) Determination of expected long-term rate of return on plan assets
The expected long-term rate of return on plan assets is determined considering current and expected allocation of plan assets
and current and expected long-term rate of return derived from various components of plan assets.
(i) Actuarial assumptions

Discount rate
Expected long-term rate of return on plan assets

2021
Mainly 0.8%
Mainly 2.0%

2020
Mainly 0.8%
Mainly 2.0%

Defined contribution plans
The required contribution of MGC to the defined contribution plans amounted to ¥548 million ($4,950 thousand) and ¥521
million as of March 31, 2021 and 2020, respectively.

28 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

Directors, corporate auditors and executive officers are not covered by the plans described above. For such persons, theCompany and certain subsidiaries had unfunded defined benefit pension plans. Under the plans, directors, corporate auditorsand executive officers are entitled to lump-sum payments based on the current rate of pay and length of service when theyleave the companies. MGC provides for the amount of the vested benefits to which directors, corporate auditors and executive
officers are entitled if they were to retire or sever immediately at the balance sheet dates. As of March 31, 2021 and 2020, theliabilities for retirement and severance benefits related to the plans were ¥217 million ($1,960 thousand) and ¥433 million,
respectively.

9. Income Taxes
The Company and its domestic subsidiaries are subject to Japanese corporate, inhabitant and business taxes based on income
which, in the aggregate, result in a statutory tax rate of approximately 30.6% in 2021 and 2020.
A reconciliation of the statutory tax rate and the effective tax rate as a percentage of profit before income taxes for theyears ended March 31, 2021 and 2020 is as follows:

Statutory tax rate
Share of profit of entities accounted for using equity method
Share of loss of entities accounted for using equity method
Dividend income eliminated in consolidation
Valuation allowance
Income not credited for tax purposes
Foreign taxes
Other
Effective tax rate

2021

2020

30.6%
(3.2)
—
4.6
(6.7)
(4.8)
1.1
(2.1)
19.5%

30.6%
—
1.1
12.9
(0.2)
(12.7)
1.3
(4.3)
28.7%

Significant components of deferred tax assets and liabilities as of March 31, 2021 and 2020 are as follows:
Thousands of
U.S. dollars

Millions of yen

2021
Deferred tax assets:
Tax loss carryforward
Net defined benefit liability
Devaluation loss on investments in securities
Accrued bonuses
Intercompany profits
Depreciation
Impairment loss
Asset retirement obligations
Other

¥

Valuation allowance for tax loss carryforward
Valuation allowance for the total amount of deductible temporary
differences
Valuation allowance

Deferred tax liabilities:
Net unrealized gain on other securities
Gain by contributing the assets to the trust
Tax purpose reserves etc. regulated by Japanese tax law
Asset retirement cost
Retained earnings of overseas consolidated subsidiaries andothersOther
Net deferred tax assets (liabilities)
Notes

¥

2020

6,193
6,947
1,227
1,717
2,335
408
1,657
1,605
3,498
25,592(4,658)

¥

2021

6,604
6,880
3,293
1,650
2,287
426
1,727
1,124
3,669
27,662(6,103)$55,93962,75011,083
15,50921,091
3,685
14,967
14,49731,596
231,162(42,074)(11,433)(13,265)(103,270)(16,091)
9,501(19,368)
8,293(145,344)
85,819(6,328)(1,255)(4,050)(1,255)(57,158)(11,336)(2,009)(1,949)(18,147)

(192)

(51)

(1,734)(4,195)(3,876)(37,892)(4,203)(18,184)(8,682)(2,828)(14,011)(5,717)(37,964)(164,249)(78,421)¥$

1: The change in valuation allowance is mainly due to a decrease of valuation allowance for devaluation loss on
investment in securities.
2: The expiration of tax loss carryforward and the resulting net deferred tax assets as of March 31, 2021 and 2020
was as follows:

29 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

March 31, 2021
Due
withinone yearTax losscarryforward*
Valuation allowance
Deferred tax assets¥

Due after
one yearthrough
two years

Due after
two years
throughthree years

Due after
five
years

Total

651 ¥

411 ¥

87 ¥

1,708 ¥

2,249 ¥

6,193

(259)
825

(335)
315

(411)
—

(72)
14

(1,707)1(1,871)378(4,658)1,535

Due
withinone year¥

Due after
four years
throughfive years

1,085 ¥March 31, 2020

Tax losscarryforward*
Valuation allowance
Deferred tax assets

Millions of yen
Due after
three years
throughfour years

Due after
one yearthrough
two years

Due after
two years
throughthree years

Millions of yen
Due after
three years
throughfour years

Due after
four years
throughfive years

Due after
five
years

Total

1,073 ¥

537 ¥

796 ¥

510 ¥

1,305 ¥

2,381 ¥

6,604

(809)
264

(537)
—

(789)
6

(510)
—

(1,305)—(2,151)
229(6,103)500

Duewithin one
year

Due after
one yearthrough
two years

Due after
four years
throughfive years

Due after
five
years

March 31, 2021

Thousands of U.S. dollars
Due after
Due after
two years
three years
throughthroughthree years
four years

Tax loss$
9,800 $
5,880 $
3,712 $
carryforward*
Valuation allowance(2,339)(3,026)(3,712)
Deferred tax assets
7,452
2,845
—
* Tax loss carryforward was calculated by multiplying the statutory tax rate.

Total

786 $

15,428 $20,314 $55,939(650)
126(15,419)9(16,900)
3,414(42,074)
13,865

10. Common Stock
Under the Companies Act, the entire amount of the issue price of shares is required to be designated as stated common stock
account although a company in Japan may, by resolution of its Board of Directors, account for an amount not exceeding 50% of
the issue price of new shares as additional paid-in capital.

11. Retained Earnings and Dividends
The Companies Act provides that an amount equal to 10% of distributions from retained earnings paid by the Company and its
Japanese subsidiaries be appropriated as a legal reserve. No further appropriations are required when the total amount of theadditional paid-in capital and the legal reserve equals 25% of their respective stated capital. The Companies Act also provides
that additional paid-in capital and legal reserve are available for appropriations by the resolution of the stockholders. Balancesof the legal reserve are included in retained earnings in the accompanying consolidated balance sheet.
Cash dividends charged to retained earnings for the years ended March 31, 2021 and 2020 represent dividends paid out
during those years. The amount available for dividends is based on the amount recorded in the Company’s non-consolidated
books of account in accordance with the Companies Act.
(a) Dividends paid during the year ended March 31, 2020
The following was approved by the Board of Directors held on May 24, 2019.
(i)
(ii)
(iii)
(iv)

Total dividends
Cash dividends per common share
Record date
Effective date

¥7,477 million¥35
March 31, 2019
June 6, 2019

The following was approved by the Board of Directors held on November 5, 2019.
(i)
(ii)
(iii)
(iv)

Total dividends
Cash dividends per common share
Record date
Effective date30 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

¥7,384 million¥35
September 30, 2019
December 5, 2019

(b) Dividends paid during the year ended March 31, 2021
The following was approved by the Board of Directors held on May 26, 2020.
(i)
(ii)
(iii)
(iv)

Total dividends
Cash dividends per common share
Record date
Effective date

¥7,279 million ($65,748 thousand)¥35 ($0.32)
March 31, 2020
June 8, 2020

The following was approved by the Board of Directors held on November 2, 2020.
(i)
(ii)
(iii)
(iv)

Total dividends
Cash dividends per common share
Record date
Effective date

¥7,280 million ($65,757 thousand)¥35 ($0.32)
September 30, 2020
December 4, 2020(c) Dividends to be paid after the balance sheet date but the record date for the payment belongs to the year ended
March 31, 2021
The following was approved by the Board of Directors held on May 26, 2021.
(i)
(ii)
(iii)
(iv)
(v)

Total dividends
Dividend source
Cash dividends per common share
Record date
Effective date

¥7,280 million ($65,757 thousand)
Retained earnings¥35 ($0.32)
March 31, 2021
June 7, 2021

12. Selling, General and Administrative Expenses
Significant components of selling, general and administrative expenses are as follows:
Thousands of
U.S. dollars

Millions of yen

2021
Freight
Stevedoring and warehouse fee
Salaries
Employees’ bonuses
Pension cost
WelfareTransportation
Depreciation

¥

2020

21,435
3,738
18,961
5,747
1,431
4,846
670
5,681

¥

22,3893,817
18,361
5,543
924
4,001
2,685
5,951

2021
$

193,61433,764
171,267
51,91012,926
43,772
6,052
51,314

13. Research and Development Costs
Research and development costs charged to following items for the years ended March 31, 2021 and 2020 are as follows;
Thousands of
U.S. dollars

Millions of yen

2021
Research and development costs which were included in selling,
general and administrative expenses
Research and development costs which were included in generaland administrative expenses and manufacturing costs

31 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021¥

18,595
19,905

2020¥

18,41019,6962021$

167,961
179,79414. Impairment Loss
MGC reviewed its long-lived assets for impairment and, as a result, recognized an impairment loss for the years ended March
31, 2021 and March 31, 2020 as follows:

Location

Usage

Classification

2021
Tainai-shi
Niigata Pref.
Japan
Kurashiki-shi
Okayama Pref.
Japan
Yokkaichi-shi
Mie Pref.
Japan
State of Michigan,
U.S.A

Thousands of
U.S. dollars

Millions of yen

2020

2021

Manufacturing facilities
for natural gas andcrude oil

Machinery andequipment, etc.

¥1,258¥—$11,363

Manufacturing facilities
for organic chemical

Machinery andequipment, etc.

373

—

3,369

Manufacturing facilities
for optical material

Machinery andequipment, etc.

144

—

1,301

Manufacturing facilities

Machinery andequipment, etc.

219

381

1,978

Impairment loss for Yokkaichi-shi, Mie pref. was presented as loss on withdrawal from business in the consolidated statement ofincome. Also, impairment loss for State of Michigan, U.S.A was presented as loss on liquidation of subsidiaries in the
consolidated statement of income.
The long-lived assets that are used for business are grouped according to the classification which is used for monitoring the
profit and loss continuously under the management accounting system, and the idle assets are grouped individually by each
item.
The carrying amount of manufacturing facilities owned by the Company and a consolidated subsidiary of the Company
were written down to a recoverable amount because the carrying amount fell below the recoverable amount.
The recoverable amounts were measured using the net selling value or value in use per each asset group, and evaluatedbased on reasonable estimation by cost approach or based on memorandum value due to negative future cash flow.
Impairment loss on the asset groups consisted of the following:Thousands of
U.S. dollars

Millions of yen

Building and structures
Machinery, equipment and vehicles
Construction in progress
Intangible assets
Other
Total

32 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

2021
¥234
1,740
—
—
18
¥1,994

2020
¥—
182
86
111
2
381

2021
$2,114
15,717——163$18,011

15. Other Comprehensive Income
The reclassification adjustment and the related income tax effects allocated to each component of other comprehensive income
for the years ended March 31, 2021 and 2020 are as follows:
Thousands of
U.S. dollars

Millions of yen

2021
Valuation difference on available-for-sale securities:
Arising during the year
Reclassification adjustment
Before tax amountTax (expense) benefit
Net-of-tax amount

¥

2020

10,747(1,799)8,948(2,210)
6,737

Deferred (losses) gains on hedges:
Arising during the year
Reclassification adjustment
Before tax amountTax benefit (expense)
Net-of-tax amount

¥

2021

(4,700)(2,069)(6,770)1,597(5,172)$

97,073(16,250)
80,824(19,962)
60,853

(34)
―
(34)
10
(24)

6
(1)
4
(1)
3

(307)
―
(307)
90
(217)

Foreign currency translation adjustments:
Arising during the year
Net-of-tax amount

3,036
3,036

(3,431)(3,431)

27,42327,423Remeasurements of defined benefit plans:Arising during the year
Reclassification adjustment
Before tax amountTax (expense) benefit
Net-of-tax amount

2,691
373
3,065
(235)
2,829

(3,232)(395)(3,627)241(3,386)24,307
3,369
27,685(2,123)25,553

Share of other comprehensive income of entities accounted forby the equity method:
Arising during the year
Reclassification adjustment
Net-of-tax amount

1,137
―
1,137

(1,621)
3,109
1,488

10,270―10,270Total other comprehensive income¥

13,718¥(10,498)$

123,909

16. Per Share Information(a) Earnings per share
Earnings per share, and reconciliation of the numbers and the amounts used in the earnings per share computations for theyears ended March 31, 2021 and 2020 are as follows:
Yen

U.S. dollars

2021
Earnings per share

¥

2020

173.41¥2021

100.50

Profit attributable to owners of parent

¥

¥

¥

36,0702021

21,158—

Profit not applicable to common stockholders
Profit attributable to common stockholders of parent

2020

36,07033 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021$—¥

21,158

Number of shares

Weighted average number of shares outstanding on which earnings
per share is calculated

1.57

Thousands of
U.S. dollars

Millions of yen

2021

$

2021

2020

208,004,306

210,529,901

325,806—$

325,806

The diluted earnings per share for the years ended March 31, 2021 and 2020 are not presented because there are no
dilutive potential shares as of March 31, 2021 and 2020.
(b) Net assets per share
Net assets per share as of March 31, 2021 and 2020 are as follows:
Yen

U.S. dollars

2021
Net assets per share

¥

2020

2,520.34¥

2,368.11

2021
$

22.77

17. Leases
Operating lease
Future minimum lease payments required under non-cancellable operating leases as of March 31, 2021 and 2020 are as
follows:
Thousands of
U.S. dollars

Millions of yen

2021
Within one year
Over one year

¥
¥

2020

871
3,449
4,320

¥
¥

889
2,188
3,077

2021
$
$

7,867
31,15339,021

18. Balances and Transactions with Related Party
The Company has a 50% equity ownership in Mitsubishi Engineering-Plastics Corporation as of March 31, 2021 and 2020.
Balances with the company as of March 31, 2021 and 2020 and related transactions for the years then ended aresummarized as follows:
Thousands of
U.S. dollars

Millions of yen

2021
Balances:
Trade accounts receivable
Transactions:
Sales

¥

2020

10,736¥29,226

8,820

2021
$

31,81596,974
263,987

The Company has a 50% equity ownership in BRUNEI METHANOL COMPANY SDN. BHD. as of March 31, 2021 and2020.
As of March 31, 2021 and 2020, the Company has guaranteed ¥2,588 million ($23,376 thousand) and ¥4,016 million of thecompany’s loans to financial institutions, respectively.
The affiliated company of the Company has a 35% equity ownership in CARIBBEAN GAS CHEMICAL LTD. as of March
31, 2021 and 2020.
As of March 31, 2021 and 2020, the Company has guaranteed ¥27,309 million ($246,671 thousand) and ¥29,075 million of
the company’s loans to financial institutions.
The condensed financial information of all of 14 affiliates (15 in 2020) accounted for by the equity method, including thesignificant affiliate, Japan Saudi Arabia Methanol Company, Inc., are as follows:
Thousands of
U.S. dollars

Millions of yen

2021
Total current assets
Total non-current assets¥

187,161
391,8542020¥

152,348
320,0922021$

1,690,552
3,539,463

Total current liabilities
Total non-current liabilities

140,296
190,721

118,445
133,268

1,267,239
1,722,708

Total net assets

247,996

220,698

2,240,051

Sales
Profit before income taxes
Profit270,563
21,793
11,806287,249
16,6674,168

2,443,889
196,848
106,639

34 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

19. Commitments and Contingencies
The Company guarantees certain obligations of its associated companies and employees, etc. As of March 31, 2021 and 2020,
guarantees for affiliates and employees, etc. loans amounted to ¥29,719 million ($268,440 thousand) and ¥31,446 million,
respectively.

20. Financial Instruments
Conditions of financial instruments(a) Management policy
MGC raises necessary funds through bank borrowings and issue of bonds in accordance with a funds management plan.
Surplus funds are invested in highly safe financial instruments. MGC raises funds through bank borrowings for short-term
operating fund. MGC uses derivatives to avoid risks mentioned below and does not enter into derivatives for speculative
purposes.
(b) Financial instruments and risks
Trade notes and accounts receivable are exposed to customer’s credit risk. Maturities of trade notes and accounts payable aremostly within one year. Part of trade receivables and payables is denominated in foreign currency and is exposed to fluctuation
risk of foreign exchange rates. MGC uses foreign exchange contracts to hedge the net position.
Securities and investments in securities are mainly held-to-maturity bonds and equity securities held for business relations
and are exposed to market fluctuation risk.
Borrowings, bonds and lease obligations for finance leases are mainly for financing of funds for capital expenditure andoperating. Part of the liabilities is with variable interest rate and thus is exposed to interest rate fluctuation risk. MGC uses
interest rate swaps to hedge the risk.
MGC uses foreign exchange contracts to hedge future fluctuation of foreign exchange rates of operating receivables andpayables and forecasted transactions denominated in foreign currencies, interest rate swaps and currency swaps to hedge
future fluctuation of interest rates and foreign exchange rates of borrowings.
Hedge accounting is applied for certain derivative transactions. MGC applies the deferral hedge accounting method forhedge accounting. MGC has entered into forward exchange contracts for receivables and payables and forecasted transactions
denominated in foreign currencies, and interest rate swap agreements to manage interest rate exposures on certain borrowings.
Hedges for fluctuation risk of foreign exchange rates that meet certain criteria are accounted for using the allocation method. If
interest rate swap agreements are used as hedges and meet certain hedging criteria, the difference in amounts to be paid or
received on the interest rate swap agreements is recognized over the life of the agreements as an adjustment to interest
expense. MGC employs derivative transactions within actual demand and does not hold or issue derivative financial instruments
for speculative purposes. The hedge effectiveness is assessed based on the fluctuation ratio of hedged items and hedging
instruments by comparing the cumulative market fluctuations or cash flow fluctuations of hedged items and those of related
hedging instruments. The Company omits to assess hedge effectiveness of interest rate swaps which qualify for hedge
accounting and meet certain criteria.
(c) Financial instruments risk management(i) Credit risk
To mitigate and quickly capture the collectability issues, sales administration divisions regularly monitor major customers’ credit
status, and perform due date controls and balance controls for each customer in accordance with trade receivables and credit
control rules. Held-to-maturity securities are debt securities readily convertible into cash which are invested in accordance withinvestment of surplus funds rules.
Maximum risk as of March 31, 2021 and 2020 is represented by the carrying amount of financial assets exposed to credit
risk.
(ii) Market risk
The finance departments have executed the transactions with market risk with the director’s approval in accordance with thefinance rules and the derivatives control rules.
To mitigate the foreign currency fluctuation risk recognized by currency and month, MGC enters into a forward exchange
contract for hedging the cash flow fluctuation risk associated with operating receivables and payables and forecasted
transactions denominated in foreign currencies and surplus funds. To mitigate the foreign currency and interest rate fluctuation
risk, MGC enters into an interest rate swap and a currency swap for hedging the cash flow fluctuation risk associated withborrowings.
MGC regularly monitors a price and an issuer’s financial condition, and continuously considers whether MGC holds the
securities or the investments in securities except for held-to-maturity bond.
(iii) Liquidity risk
To mitigate the liquidity risk, a finance department prepares and updates a funds management plan as necessary, andmaintains an appropriate level of liquidity.

35 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

(d) Supplemental explanation regarding fair value of financial instruments
Fair value of financial instruments is measured based on the quoted market price, if available, or reasonably assessed value if aquoted market price is not available. Fair value of financial instruments for which a quoted market price is not available iscalculated based on certain assumptions, and the fair value might differ if different assumptions are used. In addition, thecontract amount of the derivative transactions described below in Fair value of financial instruments does not represent themarket risk of the derivative transactions.
Fair value of financial instruments
Balance sheet amount, fair value, and differences as of March 31, 2021 and 2020 are as follows.
Financial instruments, of which it is extremely difficult to measure the fair value, are not included in the table below. (Pleasesee “<2> Financial instruments of which the fair value is extremely difficult to measure.”)Millions of yen
Balancesheet
amountMarch 31, 2021
Assets:(1) Cash and deposits(2) Notes and accounts
receivable - trade(3) Securities and investments insecurities
Total assets
Liabilities:(1) Notes and accounts payable- trade(2) Short-term borrowings(3) Accrued expenses(4) Bonds(5) Long-term borrowings
Total liabilities
Derivative transactions (*):
Hedge accounting not applied
Hedge accounting applied
Total derivative transactions¥

101,785

Thousands of U.S. dollars

Fair value¥

101,785

Balancesheet
amountDifferences

¥

—

$

919,384

Fair value$

919,384

159,018—

1,436,347

1,436,347—

39,56839,568—357,402357,402—300,372¥

300,372¥—$ 2,713,142$ 2,713,142

$

—

¥

75,308¥75,308

¥

—

$

$

$

—

¥

40,087
20,22520,00036,202
191,824¥

40,087
20,225
19,97636,177
191,775¥—
362,090—
182,684(24)
180,652(24)
326,998(48) $ 1,732,671

$

—
—
(217)
(217)
(434)

(2,890) $(244)(3,143) $

—
—
—

¥
¥

(320) ¥
(27)(348) ¥

(320) ¥
(27)(348) ¥———

Balancesheet
amount¥78,227

Fair value$$

680,228

680,228

362,090
182,684
180,435
326,773$ 1,732,228(2,890) $(244)(3,143) $¥78,227

Differences¥—

141,279

141,279—

35,97235,972—¥

255,480¥

255,480¥—¥

70,776¥

70,776¥—(2) Short-term borrowings

33,98033,980—(3) Accrued expenses

18,00818,008—(4) Current portion of bonds
payable10,00010,041

41(5) Long-term borrowings

29,04329,847803

Total liabilities
Derivative transactions (*):
Hedge accounting not applied
Hedge accounting applied
Total derivative transactions—¥

March 31, 2020

Liabilities:(1) Notes and accounts payable- trade$159,018

Millions of yen

Assets:(1) Cash and deposits(2) Notes and accounts
receivable - trade(3) Securities and investments insecurities
Total assets

Differences¥¥¥

161,809¥

162,654(364) ¥
6(358) ¥¥

845(364) ¥
4(359) ¥—
(1)
(1)

* Derivative receivables and payables are on net basis. Items that are net payables are shown in parenthesis

36 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

<1> Fair value measurement of financial instruments
Assets:• Cash and deposits and Notes and accounts receivable - trade
The carrying amount approximates fair value because of the short maturity of these instruments.
• Securities and investments in securities
The fair value of equity securities is calculated by quoted market price and the fair value of bond securities is estimatedbased on quotes from counterparties. Please see note 4 Securities and Investments in Securities for information by category.
Liabilities:• Notes and accounts payable - trade, Short-term borrowings, and Accrued expenses
The carrying amount approximates fair value because of the short maturity of these instruments.
• Bonds
The fair value of bonds issued by the Company is calculated by market price.
• Long-term borrowings
Fair value of long-term borrowings is based on the present value of future cash flows discounted using the current borrowing
rate for similar borrowings of a comparable maturity.
Derivative Transactions:
Please see note 21 Derivative Financial Instruments.
<2> Financial instruments of which the fair value is extremely difficult to measure
Thousands of
U.S. dollars

Millions of yen

Unlisted equity securities

2021

2020

2021

¥ 119,419¥ 116,699$ 1,078,665* It is extremely difficult to measure the fair value, and thus above are not included in “Assets (3) securities andinvestments in securities.”<3> Projected future redemption of monetary claim and securities with maturities as of March 31, 2021

Due within one
year(1) Cash and deposits(2) Notes and accounts receivable trade(3) Securities and investments insecurities:
Held-to-maturity securities:
Government bonds
Certificates of deposit
Other securities with maturity(bonds)
Total

¥

¥

Millions of yen
Due after one
Due after five
year through five
years through ten
years
years

Due after ten
years

101,785 ¥

— ¥

— ¥

—

159,018

—

—

—

—
—

—
—

—
—

—
—

—

—

—

1,747

— ¥

— ¥

1,747

260,803 ¥Thousands of U.S. dollars
Due within one
year(1) Cash and deposits(2) Notes and accounts receivable trade(3) Securities and investments insecurities:
Held-to-maturity securities:
Government bonds
Certificates of deposit
Other securities with maturity(bonds)
Total

$

$

Due after one
year through fiveyears

Due after five
years through ten
years

Due after ten
years

— $

— $

—

1,436,347

—

—

—

—
—

—
—

—
—

—
—

—

—

—

15,780— $— $15,780919,384 $

2,355,731 $

37 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

<4> The annual maturities of the bonds and long-term borrowings as of March 31, 2021

Due within
one year

Bonds
Long-term borrowings¥— ¥10,413

Due within
one year

Bonds
Long-term borrowings$— $94,057

Millions of yen
Due after
Due after
two years
three years
throughthrough four
three years
years

Due after
one yearthrough two
years

— ¥
6,313

— ¥
14,871

Due after
four years
through five
years

— ¥
3,756

Thousands of U.S. dollars
Due after
Due after
two years
three years
throughthrough four
three years
years

Due after
one yearthrough two
years

— $
57,023— $134,324

Due after
five years

10,000 ¥2,661

10,0008,598

Due after
four years
through five
years

— $
33,926

Due after
five years

90,326 $24,03690,326
77,662

21. Derivative Financial Instruments
The contract or notional amounts and fair value of derivative financial instruments held as of March 31, 2021 and 2020 are
summarized as follows:
Derivative financial instruments to which hedge accounting is not applied are summarized as follows:(a) Forward exchange contracts and currency swap agreements
Millions of yen
Contract ornotional amounts

March 31, 2021
Forward exchange contracts:
To sell foreign currency:
U.S. dollar
Euro
Thai Baht
New Taiwan dollar
Chinese Yuan
To buy foreign currency:
U.S. dollar
New Taiwan dollar
Chinese Yuan
Currency swap agreements:
Receive/U.S. dollar, Pay/Japanese Yen
Receive/U.S. dollar, Pay/Thai Baht
Receive/Japanese Yen, Pay/Chinese Yuan¥¥

38 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

8,962
2,821
114
512
2,340

Valuation
gain (loss)

Fair value

¥

(7) ¥
(3)
(0)
1
(1)

(7)
(3)
(0)
1
(1)

591
1
73

(18)
(0)
(0)

(18)
(0)
(0)

518
517
1,684
18,136

34
(20)
(164)
(178) ¥

34
(20)
(164)
(178)

¥

Millions of yen
Contract ornotional amounts

March 31, 2020
Forward exchange contracts:
To sell foreign currency:
U.S. dollar
Euro
Thai Baht
New Taiwan dollar
Chinese Yuan
Korean Won
To buy foreign currency:
U.S. dollar
Canadian dollar
New Taiwan dollar
Currency swap agreements:
Receive/U.S. dollar, Pay/Japanese Yen
Receive/U.S. dollar, Pay/Thai Baht¥¥

Valuation
gain (loss)

Fair value

11,642
2,329
59
370
882
614

¥

(17) ¥
(27)
(0)
(10)
(0)
5

(17)
(27)
(0)
(10)
(0)
5

298
1,396
2

(11)
(68)
(0)

(11)
(68)
(0)

545
547
18,689(0)(20)(150) ¥

(0)
(20)
(150)

¥

Thousands of U.S. dollars
Contract ornotional amounts

March 31, 2021
Forward exchange contracts:
To sell foreign currency:
U.S. dollar
Euro
Thai Baht
New Taiwan dollar
Chinese Yuan
To buy foreign currency:
U.S. dollar
New Taiwan dollar
Chinese Yuan
Currency swap agreements:
Receive/U.S. dollar, Pay/Japanese Yen
Receive/U.S. dollar, Pay/Thai Baht
Receive/Japanese Yen, Pay/Chinese Yuan$$

Valuation
gain (loss)

Fair value

80,95025,481
1,030
4,625
21,136$(63) $
(27)
(0)
9
(9)

(63)
(27)
(0)
9
(9)

5,338
9
659

(163)
(0)
(0)

(163)
(0)
(0)

4,679
4,670
15,211
163,815307(181)(1,481)(1,608) $

307
(181)
(1,481)(1,608)$* The fair value of forward exchange contracts and currency swap agreements is estimated based on quotes fromcounterparties.
(b) Interest rate swap agreements
Millions of yen
Contract ornotional amounts

Valuation
gain (loss)

Fair value

March 31, 2021
Interest rate swap agreements:
Receive/floating and pay/fixed

¥

4,014

¥

(142) ¥

(142)

March 31, 2020
Interest rate swap agreements:
Receive/floating and pay/fixed

¥

4,430

¥

(214) ¥

(214)

Thousands of U.S. dollars
Contract ornotional amounts

March 31, 2021
Interest rate swap agreements:
Receive/floating and pay/fixed$

36,257

Fair value$(1,283) $* The fair value of interest rate swap agreements is estimated based on quotes from counterparties.

39 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

Valuation
gain (loss)(1,283)

Derivative financial instruments to which hedge accounting is applied are summarized as follows:(a) Forward exchange contracts

Hedged items

Millions of yen
Contract orFair value
notional amounts

March 31, 2021
Forward exchange contracts:
To sell foreign currency:

Accounts
receivable

U.S. dollar
To buy foreign currency:
U.S. dollar
To sell foreign currency:
U.S. dollar
To buy foreign currency:
U.S. dollar

¥

1,766

¥

(83)

Accounts
payableForecasted
transactions
Forecasted
transactions¥

Hedged items

218

7

875

(28)

16
2,877

¥

0
(104)

Millions of yen
Contract orFair value
notional amounts

March 31, 2020
Forward exchange contracts:
To sell foreign currency:

Accounts
receivable

U.S. dollar
Chinese Yuan
To buy foreign currency:
U.S. dollar
To sell foreign currency:
U.S. dollar
To buy foreign currency:
U.S. dollar

¥

1,290
65

¥

1
(0)

Accounts
payableForecasted
transactions
Forecasted
transactions¥

Hedged items

566

3

234

2

537
2,695

¥

4
11

Thousands of U.S. dollars
Contract orFair value
notional amounts

March 31, 2021
Forward exchange contracts:
To sell foreign currency:

Accounts
receivable

U.S. dollar
To buy foreign currency:
U.S. dollar
To sell foreign currency:
U.S. dollar
To buy foreign currency:
U.S. dollar$

15,952$

Forecasted
transactions
Forecasted
transactions
$

1,969

63

7,904

(253)

145
25,987$*The fair value of forward exchange contracts is estimated based on quotes from counterparties.

40 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

(750)

Accounts
payable0(939)

(b) Interest rate swap agreements
There were no interest rate swap agreements as of March 31, 2021.

Hedged items

Millions of yen
Contract or notional
Fair value
amounts

March 31, 2020
Interest rate swap agreements:
Long-term
borrowings

Receive/floating and pay/fixed

¥

360

¥

(1)

* The fair value of interest rate swap agreements is estimated based on quotes from counterparties.

22. Investment and Rental Property
The Company and certain consolidated subsidiaries own land and buildings for rent in Tokyo and other areas (hereafter “rental
property”).
The amounts recognized in the consolidated balance sheet and fair values related to the rental property for the years ended
March 31, 2021 and 2020 are as follows:
Thousands of
U.S. dollars

Millions of yen

2021
Consolidated balance sheet amount:
Balance at beginning of the year
Increase/(decrease)
Balance at end of the year
Fair value
Notes:

¥

2020
¥

¥

10,793(592)
10,200¥13,6652021$¥

15,150(4,357)
10,793$

97,489(5,347)
92,133¥

14,117$

123,431

1. Consolidated balance sheet amount is its cost minus accumulated depreciation and accumulated impairment loss.
2. Decrease for the year ended March 31, 2021 was mainly due to depreciation expense of ¥676 million ($6,106
thousand) the Company recorded. Decrease for the year ended March 31, 2020 was mainly due to loss of ¥4,381
million on reduction of property, plant and equipment located in QOL Innovation Center Shirakawa.
3. Fair value is based on roadside value, etc.

Rent income from the rental property is ¥232 million ($2,096 thousand) and ¥438 million for the years ended March 31,
2021 and 2020, respectively.

23. Business Combination
Transactions under common control
1. Summary of transaction(1) Name and business of the company subject to business combination
Name: Tokyo Shokai, Ltd., Ryoko Chemical Co., Ltd., Ryoyo Trading Co., Ltd.
Business: Sales of synthetic resins, electronic materials, organic chemicals, aromatic chemicals, inorganic chemicals andoxygen absorbers(2) Date of combination
October 1, 2020
(3) Legal form of combination
Legal form is absorption-type merger which treats MGC Trading, Inc. as the surviving company and Tokyo Shokai, Ltd.,
Ryoko Chemical Co., Ltd., Ryoyo Trading Co., Ltd. as companies absorbed in the merger. Upon the merger, the company
name of MGC Trading, Inc. was changed to Mitsubishi Gas Chemical Trading, Inc.
(4) Post-combination name of the acquired company
Mitsubishi Gas Chemical Trading, Inc.
(5) Other matters related to the business combination
The objective is to further unify the business activities of MGC, accelerate overseas expansion and new businessdevelopment efforts on a group-wide basis, and realize a market-oriented sales structure with a stronger focus on growthareas such as “Medicine & Food,” “Information & Communication,” and “Mobility.”

41 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

2. Outline of accounting treatment
This business combination was accounted for as a transaction under common control in accordance with the “AccountingStandard for Business Combinations” and “Implementation Guidance on Accounting Standard for Business Combinations andAccounting Standard for Business Divestitures.”

24. Segment Information
The Company introduced company-based organization for clarifying management’s responsibility in operation and for managing
efficiently. Each company develops a business strategy for their products and services and conducts business.
The reported segments of the Company are the business units for which the Company is able to obtain respective financial
information separately in order for the Board of Directors to conduct periodic investigation to determine distribution ofmanagement resources and evaluate their business results.
Under the Group vision of “creating values to share with society,” MGC is promoting a growth strategy based on the fivemeasures in its medium-term management plan “MGC Advance 2020.” In particular, an organizational revision was made in theyear ended March 31, 2021 in order to promote measures such as “Creating and developing new businesses,” “Implementing
investment strategies to form an optimal business portfolio” and “Promoting unified MGC Group management” more swiftly andstrongly than before.
The reported segments were changed from four segments of “Natural gas chemicals,” “Aromatic chemicals,” “Specialty
chemicals” and “Information and advanced materials” to two segments of “Basic Chemicals Business Sector” and “Specialty
Chemicals Business Sector” according to this revision.
“Basic Chemicals Business Sector” mainly produces and sells methanol, chemical products for methanol and ammonia, life
science products, general aromatic products, specialty aromatic products and foaming plastics.
“Specialty Chemicals Business Sector” mainly produces and sells inorganic chemicals, plastic lens monomer, engineering
plastics, electronic materials and oxygen absorbers.
The segment information for the year ended March 31, 2020 is disclosed based on the reported segment classification after
the organizational revision.
Segment sales, profit, assets, liabilities and others are calculated by accounting methods similar to those employed toprepare the accompanying consolidated financial statements. Segment profit are calculated based on “Keijo-rieki” disclosed in
the consolidated statement of income under accounting principles generally accepted in Japan (See note 25). Intersegment
revenue and transfer are based on arm’s-length transactions.
The reported segment information for the Company and its consolidated subsidiaries for the years ended March 31, 2021 and2020 is summarized as follows:
Millions of yen

2021
Basic
Chemicals
Business
SectorSales:
Sales to third parties
Inter-segment sales
Segment profit
Segment assets
Others:Depreciation andamortization
Amortization of goodwill
Interest income
Interest expenses
Share of profit (loss) ofentities accounted for using
equity method
Investments in entities
accounted for by the equity
methodCapital expenditures¥

Specialty
Chemicals
Business
Sector

¥

¥
¥
¥

― ¥
(10,101)(10,101) ¥(1,610) ¥12,161 ¥595,718―595,718
50,240836,364¥

16,371 ¥13,090 ¥189 ¥1,034 ¥

30,686

368
226
551

―
190
581

3
6
2

―
(61)
(335)

371
362
800

1,972

3,180

―

9

5,162

73,53530,831―(149)

104,217

19,482

18,619637

1,543

40,282¥¥¥

13,226
1,965
15,192
3,297
40,940Consolidated¥¥¥

42 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021¥

Adjustments

315,034
7,767
322,801
11,001
427,468¥¥¥

267,457368
267,825
37,552355,794

Other¥

Millions of yen

2020
Basic
Chemicals
Business
SectorSales:
Sales to third parties
Inter-segment sales
Segment profit
Segment assets
Others:Depreciation andamortization
Amortization of goodwill
Interest income
Interest expenses
Share of profit (loss) ofentities accounted for using
equity method
Investments in entities
accounted for by the equity
methodCapital expenditures¥

Specialty
Chemicals
Business
Sector

¥

Other

¥

898
123
1,021
8
34,569Consolidated

¥
¥
¥

— ¥
(7,456)(7,456) ¥(1,827) ¥30,053 ¥613,344—613,344
31,116
771,733¥¥¥

357,333
6,503
363,8364,756
396,905¥

15,941 ¥

12,578 ¥19 ¥1,052 ¥

29,591

379
278
822

—
263
635

1
9
5

—
14
(494)

380
565
968

(4,924)

3,701

(60)

—

(1,282)

65,12230,540—(149)

95,51322,316

17,312

1

2,759

42,389¥¥¥255,112830
255,943
28,178310,204

Adjustments

¥
¥
¥

¥

Thousands of U.S. dollars

2021
Basic
Chemicals
Business
SectorSales:
Sales to third parties
Inter-segment sales$$

2,845,579 $
70,1562,915,735 $Specialty
Chemicals
Business
SectorOther

2,415,834 $
3,324
2,419,158 $Adjustments

119,465 $
17,749137,223 $— $(91,238)(91,238) $Consolidated

5,380,887—
5,380,887

Segment profit$

99,368 $339,192 $

29,781 $(14,542) $453,798

Segment assets$

3,861,151 $

3,213,748 $

369,795 $

109,846 $7,554,548

147,873 $
3,324
2,041
4,977

118,237 $
—
1,716
5,248

1,707 $
2754
18

9,340 $—
(551)
(3,026)277,175
3,351
3,270
7,226

17,812

28,724—81

46,626664,213

278,484—(1,346)

941,351

175,973

168,178

5,754

13,937363,852

Others:Depreciation and amortization$
Amortization of goodwill
Interest income
Interest expenses
Share of profit (loss) of entities
accounted for using equity
methodInvestments in entities accounted
for by the equity method
Capital expenditures
Notes:

1. Other includes listed affiliates, real estate business and electric power business which are not included in reported
segments.
2. Adjustments in the above tables are made for the followings:(1) Adjustments in segment profit
Thousands of
U.S. dollars

Millions of yen

2021
Elimination of intersegment transactions
Unallocated company-wide expenses

2021

59
¥
(165)
$
533
(1,670)(1,661)(15,084)¥(1,610)¥(1,827)$(14,542)* Company-wide expenses are administrative expenses, financial income and expenses and other income
and expenses which are not allocated to reported segments.

43 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

¥

2020

(2) Adjustments in segment assets
Thousands of
U.S. dollars

Millions of yen

2021
Elimination of intersegment balances
Unallocated company-wide assets

2020

2021

¥

(50,598)¥(37,931)$(457,032)
62,75967,985566,877¥
12,161¥30,053$
109,846* Company-wide assets include cash, investments in securities and deferred taxes assets which are notallocated to reported segments.
(3) “Adjustments in depreciation and amortization” of ¥1,034 million ($9,340 thousand) and ¥1,052 million are
depreciation and amortization of company-wide assets which are not allocated to reported segments for theyears ended March 31, 2021 and 2020, respectively.
(4) “Adjustments in interest income” of ¥(61) million ($(551) thousand) and ¥14 million are mainly interest income
which are not allocated to reported segments and elimination of intersegment transactions for the years ended
March 31, 2021 and 2020, respectively.
(5) “Adjustments in interest expenses” of ¥(335) million ($(3,026) thousand) and ¥(494) million are mainly
elimination of intersegment transactions for the years ended March 31, 2021 and 2020, respectively.
(6) “Adjustments in investments in entities accounted for by the equity method” of ¥(149) million ($(1,346)
thousand) and ¥(149) million are mainly investments which are not allocated to reported segments for theyears ended March 31, 2021 and 2020, respectively.
(7) “Adjustments in capital expenditures” of ¥1,543 million ($13,937 thousand) and ¥2,759 million are related tocompany-wide assets which are not allocated to reported segments for the years ended March 31, 2021 and2020, respectively.
3. Segment profit is adjusted with “Keijo-rieki” disclosed in the consolidated statement of income under accounting
principles generally accepted in Japan (See note 25).
Related information
1. Information by products and services
Disclosures are omitted because the classification of products and services are same as the classification of the reported
segments.
2. Geographical information(1) Sales
Thousands of
U.S. dollars

Millions of yen

2021
Japan
Asia:
China
Other
U.S.A.
Other
Total
Note: Geographical sales are classified by customer’s location.

2020

¥

242,901¥

103,487
157,226
49,35342,748595,7182021¥

276,706$ 2,194,029¥

89,653
162,630
37,19647,157613,344934,757
1,420,161
445,786
386,126$ 5,380,887(2) Property, plant and equipment
Thousands of
U.S. dollars

Millions of yen

2021
Japan
Asia
U.S.A.
Other
Total

¥

¥

178,945
40,22625,585
5,174
249,9312020¥¥

172,804
35,07926,675
5,278
239,8382021$ 1,616,340
363,346
231,099
46,735$ 2,257,529

3. Information by major customers
Disclosures are omitted because no particular customer whose sales are over 10% of sales in the consolidated statement ofincome exists.

44 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

Information of impairment loss on fixed assets by reported segments
Millions of yen

2021
Basic Chemicals
Business Sector

Impairment loss¥

Specialty Chemicals
Business Sector

1,851 ¥

Other

Adjustments

— ¥

208 ¥

Consolidated

— ¥

2,060

Millions of yen

2020
Basic Chemicals
Business Sector

Impairment loss¥

Specialty Chemicals
Business Sector

Other

Adjustments

— ¥

381 ¥

— ¥

Consolidated

— ¥

381

Thousands of U.S. dollars

2021
Basic Chemicals
Business Sector

Impairment loss$

Specialty Chemicals
Business Sector

16,719 $Other

Adjustments— $1,879 $

Consolidated— $18,607

Information of balance of goodwill by reported segments
Millions of yen

2021
Basic Chemicals
Business Sector

Goodwill¥

Specialty Chemicals
Business Sector

Adjustments

Other

— ¥

4,900 ¥

Consolidated

— ¥

13 ¥

4,914

Millions of yen

2020
Basic Chemicals
Business Sector

Goodwill¥

Specialty Chemicals
Business Sector— ¥5,275 ¥

Adjustments

Other

Consolidated

— ¥

17 ¥

5,293

Thousands of U.S. dollars

2021
Basic Chemicals
Business Sector

Goodwill$

Specialty Chemicals
Business Sector

44,260 $Adjustments

Other

— $

Consolidated

— $

117 $

44,386

Information of negative goodwill by reported segments
No negative goodwill was recognized for the year ended March 31, 2021. Negative goodwill of ¥492 million was recognized in
the other segment because Japan U-PiCA Company, Ltd. became a subsidiary during the year ended March 31, 2020.

25. The Statement of Income Disclosure under Accounting Principles Generally Accepted in Japan
Under accounting principles generally accepted in Japan, an ordinary income, “Keijo-rieki” should be disclosed in the statementof income. The ordinary income is an income figure with certain adjustments made to profit before income taxes.
Followings are the summary information of the statement of income under accounting principles generally accepted inJapan.
Thousands of
U.S. dollars

Millions of yen

2021
Net sales
Gross profit
Operating profit
Ordinary income
Profit before income taxes
Profit45 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021¥

595,718
140,958
44,51050,24048,951
39,383

2020¥

613,344
131,394
34,26031,11634,34324,4872021$

5,380,887
1,273,218
402,041
453,798
442,155
355,731Independent Auditor’s Report46 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

47 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

48 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021

Corporate Data (As of March 31, 2021)
Corporate Information
Company NameMITSUBISHI GAS CHEMICAL COMPANY, INC.

Address

Mitsubishi Building
5-2 Marunouchi 2-chome, Chiyoda-ku,
Tokyo 100-8324, Japan

Originally founded

January 15, 1918

Incorporated

April 21, 1951

Capital41.97 billion yen

Fiscal Year

Accounts closed in March

Number of employees

2,427 (non-consolidated)
8,998 (consolidated)

Shareholder Information
ListingFirst Section of the Tokyo Stock Exchange

Ticker symbol

4182

Total number of authorized shares

492,428,000

Number of outstanding shares

225,739,199

Stock transaction unit

100

Number of shareholders

21,585Composition of shareholders
Financial institutions

43.8%

Securities companies
Other companies in Japan
Foreign investors
Individuals and others

3.4%
8.9%
28.8%
15.1%

Major shareholders (top 10)
Investment in MGC
Name of shareholder

Number ofshares held
(thousands)

Percentage
of total
outstanding
sharesThe Master Trust Bank of Japan, Ltd. (Trust Account)

19,514

9.3

Custody Bank of Japan, Ltd. (Trust Account)

11,551

5.5

Meiji Yasuda Life Insurance Company

8,797

4.2

Nippon Life Insurance Company

8,795

4.2

The Norinchukin Bank

5,026

2.4

AGC Inc.

4,332

2.0

The Bank of Yokohama,Ltd.

3,085

1.4

Custody Bank of Japan, Ltd. (Trust Account 5)

3,008

1.4

JPMorgan Securities Japan Co., Ltd.

2,898

1.3

Custody Bank of Japan, Ltd. (Trust Account 4)

2,812

1.3

Notes 1: MGC holds 17,726 thousand shares of treasury stock, which is not included in
the above list of major shareholders.
2: Percentage of total outstanding shares does not include treasury stock.

49 | MITSUBISHI GAS CHEMICAL COMPANY, INC. Corporate Report 2021