Notice of the 94th Ordinary General Meeting of Shareholders

This is an unofficial translation of the Japanese language original version, and is provided for reference purposes
only, without any warranty as to its accuracy or as to the completeness of the information.
In the event of any discrepancy between this translation and the Japanese original, The Japanese language original
shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any other formsof damages arising from this translation.

1

(Translation)

Securities Code 4182

June 4, 2021
Dear Shareholders with Voting Rights

Masashi Fujii
President and Representative Director
Mitsubishi Gas Chemical Company, Inc.
Mitsubishi Building,
5-2 Marunouchi 2-chome, Chiyoda-ku,
Tokyo, Japan

Notice of the 94thOrdinary General Meeting of Shareholders
Please refer to the below for information about the upcoming the 94th Ordinary General Meeting of
Shareholders of Mitsubishi Gas Chemical Company, Inc. (hereinafter "MGC") to be held as described below.
You may exercise your voting rights by 5:30 p.m. of June 24, 2021, as it is possible to exercise your voting
rights by mail or via the Internet.

1. Date and Time:
2. Place:

Friday, June 25, 2021 at 10:00 a.m.
MGC Head Office (6th Floor, Mitsubishi Building)
5-2, Marunouchi 2-chome, Chiyoda-ku, Tokyo

3. Agenda for the Meeting:
Matters to be reported: (1) Report on the Business Report, Consolidated Financial Statements, and resultsof audits of the Consolidated Financial Statements by the independent Auditor
and the Audit & Supervisory Board for the 94th Business Term (from April 1,2020 to March 31, 2021)(2) Report on the Non-Consolidated Financial Statements for the 94th Business
Term (from April 1, 2020 to March 31, 2021)
Matters for Resolution:
Proposal No. 1: Election of Twelve Directors
Proposal No. 2: Election of One Audit & Supervisory Board Member
Proposal No. 3: Election of One Substitute Audit & Supervisory Board Member
4. Disclosure on the internet●Among the documents that should be attached to this convocation notice, in accordance with laws andregulations and the provisions of Article 15 of the Articles of Incorporation of MGC, the following
documents are posted on MGC’s website and are not included in this convocation notice.
(ⅰ) Stock Acquisition Rights(ⅱ) Consolidated Statement of Changes in Net Assets(ⅲ) Notes to Consolidated Financial Statements(ⅳ) Non-Consolidated Statement of Changes in Net Assets(ⅴ) Notes to Non-consolidated Financial Statements●Please be advised that if minor amendments are required to matters contained in the Reference Documents2

(Translation)

for General Meeting of Shareholders, Business Report, Non-Consolidated Financial Statements, or theConsolidated Financial Statements, MGC will post revisions on its website.
MGC’s website : https://www.mgc.co.jp/ir/stockinfo/meeting.html◇This year you are advised to refrain from visiting the Ordinary General Meeting of Shareholders regardless of

your health condition at the time of the General Meeting to be held with the aims of preventing the spread of
COVID-19 and avoiding infection risks to shareholders. However, if you prefer to attend in person, it isrequested that you bring the enclosed Voting Form to the reception desk.
Information on Exercising Voting Rights●Attending the General Meeting of Shareholders
This year you are advised to refrain from visiting the Ordinary General Meeting of Shareholders regardlessof your health condition at the time of the General Meeting to be held with the aim of preventing the spreadof COVID-19. However, if you prefer to attend in person, it is requested that you submit the enclosed Voting
Form to the reception desk at the venue. (You do not need to put your seal on it).
Date and Time of the General Meeting of Shareholders : June 25th 2021(Fri) 10:00a.m. (Japan Time)
Place : MGC Head Office (6th Floor, Mitsubishi Building)
5-2, Marunouchi 2-chome, Chiyoda-ku, Tokyo●Postal Mail
Please indicate your approval or disapproval of agenda items on the Voting Form and return it by mail.
Voting forms must arrive no later than 5:30 p.m. on Thursday, June 24th 2021(Japan Time).
●Internet
Please access the voting website (https://evote.tr.mufg.jp/) and enter your approval or disapproval of the
proposals. Exercise deadline: Until 5:30 p.m. on Thursday, June 24th 2021(Japan Time).
■Multiple Exercise of Voting Rights
In the event voting rights are exercised multiple times via the mailing of the Voting Form and via Internet,
votes submitted via Internet will be deemed valid.
In the event that voting rights are exercised multiple times via Internet, the last set of votes cast will bedeemed valid.

＜To Institutional Investors＞
The “Electronic Proxy Voting Platform” operated by ICJ, Inc. is available for exercising voting rights for
MGC’s General Meeting of Shareholders.

3(Translation)

Reference Documents for General Meeting of Shareholders
Proposal No. 1: Election of Twelve Directors
The term of office of all twelve current Directors will expire as of the close of this Ordinary General Meetingof Shareholders. Therefore, it is proposed that twelve Directors, including 4 Outside Directors, be elected.
The candidates are as follows:
Responsibilities at Mitsubishi Gas
NumberName
Position
Chemical
1

Toshikiyo Kurai

2

Masashi Fujii

Representative Director

Chairman
Representative Director

President

3

Masato Inari

Director, Managing
Executive Officer

4

Nobuhisa Ariyoshi

Director, Managing
Executive Officer

5

Kenji Kato

Director, Managing
Executive Officer

6

Yasushi Kosaka

7Naruyuki Nagaoka

8

Motoyasu
Kitagawa－

Renomination－

Renomination

Responsible for Production
Technology, In charge ofEnvironment Safety and Quality
Assurance Division, Purchasing &Logistics Division
In charge of internal control & risk
management, Responsible for
Administrative & Personnel,
Finance & Accounting, In chargeof Information Systems Division
Responsible for Research &Development, In charge ofIntellectual Infrastructure CenterIn charge of Specialty Chemicals
Business Sector
In charge of Basic Chemicals
Business Sector
In charge of compliance,
Responsible for Corporate
Planning Division,
In charge of Internal Audit
Division, CSR&IR Division

Director, Managing
Executive Officer
Director, Managing
Executive Officer

Managing Executive
Officer

Renomination

Renomination

Renomination

Renomination
Renomination

New Nomination

Renomination
9

Tsugio Sato－

Director

Outside Director
IndependentDirector

Renomination
10

Haruko Hirose－

Director

Outside Director
IndependentDirector

Renomination
11

Toru Suzuki－

Director

Outside Director
IndependentDirector

12

Yasushi Manabe－－

New Nomination
Outside Director
IndependentDirector4(Translation)

No.

Name
(Date of Birth)

Profile, position and responsibility in MGC(Important positions concurrently held at other companies, etc.)
April 1975
June 2003
June 2006

June 2008
Renomination
Toshikiyo Kurai(January 9, 1952)

June 2009
June 2010

October 2011
June 20121
June 2013
April 2019

Joined MGC.
General Manager, Inorganic Chemicals Division,Specialty Chemicals Company
Executive Officer, and General Manager,
Inorganic Chemicals Division, Specialty
Chemicals Company
Executive Officer, and President of Specialty
Chemicals Company
Director, Managing Executive Officer, andPresident of Specialty Chemicals Company
Director, Managing Executive Officer, Presidentof Specialty Chemicals Company, and General
Manager, Engineering Plastics Division
Director, Managing Executive Officer, andPresident of Specialty Chemicals Company
Representative Director, Senior Managing
Executive Officer, Assistant to President, andPresident of Specialty Chemicals Company
President and Representative Director
Chairman and Representative Director(to the present)

Attendance of Board of■ Reason for nomination as candidate
Directors Meeting
Mr. Toshikiyo Kurai, following his service in important positions(the fiscal year ended
mainly in Specialty Chemicals department and his presiding overMarch 31, 2021)
R&D, manufacture and whole business of Inorganic Chemicals
12 held, 12 attended
division and Engineering Plastics division, was appointed to be a
Director in June 2009, and served from June 2013 to March 2019as President and Representative Director, and has served from
April 2019 as Chairman and Representative Director, and due tohis abundant experience and knowledge of MGC's business andmanagement control as a whole, he has once again been nominatedas a candidate for Director.

5

Number ofshares of MGC
held

49,432

(Translation)

No.

Name
(Date of Birth)

Profile, position and responsibility in MGC(Important positions concurrently held at other companies, etc.)
April 1981
June 2010
June 2012

June 2014

Renomination
Masashi Fujii(March 10, 1959)

2

April 2015

June 2015

April 2018

October 2018
Attendance of Board of
Directors Meeting(the fiscal year ended
March 31, 2021)
April 201912 held, 12 attended

Joined MGC.
General Manager, Organic Chemicals Division,
Natural Gas Chemicals Company
Executive Officer, and General Manager, Organic
Chemicals Division, Natural Gas Chemicals
Company
Executive Officer, and General Manager,
Methanol Division, Natural Gas Chemicals
Company
Managing Executive Officer, Administrative
Management of LNG Project Team, and Presidentof Natural Gas Chemicals Company
Director, Managing Executive Officer,
Administrative Management of LNG Project
Team, and President of Natural Gas Chemicals
Company
Outside Director, Co-op Chemical Co., Ltd(currently Katakura & Co-op Agri Corporation)
Director, Managing Executive Officer,
Administrative Management of LNG Project
Team, and President of Natural Gas Chemicals
Company
Director, Managing Executive Officer,
Administrative Management of LNG Project
Team, and President of Natural Gas Chemicals
Company
President and Representative Director(to the present)■ Reason for nomination as candidate
Mr. Masashi Fujii, following his service in important positions in
Administrative & Personnel, Natural Gas Chemicals department,
was appointed to be a Director in June 2015 and presided over
Natural Gas Chemicals department, and has served from April
2019 as President and Representative Director, and due to hisabundant experience and knowledge of MGC's business andmanagement control as a whole, he has once again been nominatedas a candidate for Director.

6

Number ofshares of MGC
held

25,400(Translation)

No.

Name
(Date of Birth)

Profile, position and responsibility in MGC(Important positions concurrently held at other companies, etc.)
April 1985
June 2011
June 2014
April 2016

Renomination

June 2016
April 2017

Masato Inari(January 23, 1961)

June 2017
April 2019

June2019
3

April2020

April2021

Joined MGC.
Plant Manager, Niigata Plant, Natural Gas
Chemicals Company
Executive Officer, Plant Manager, Niigata Plant,
Natural Gas Chemicals Company
Executive Officer, President of Aromatic
Chemicals Company
Director, JSP Corporation
Managing Executive Officer, President of
Aromatic Chemicals Company
Director, Managing Executive Officer, Presidentof Aromatic Chemicals Company
Director, Managing Executive Officer, in chargeof Production Technology Division, Environment
Safety and Quality Assurance Division
Outside Director, Katakura & Co-op Agri
Corporation
Director, Managing Executive Officer, in chargeof Internal Audit Division, Environment & Total
Production Sector
Director, Managing Executive Officer,
Responsible for Production Technology, in chargeof Environment Safety and Quality Assurance
Division, Purchasing & Logistics Division(to the present)

Attendance of Board of
Directors Meeting(the fiscal year ended
March 31, 2021)
12 held, 12 attended ■ Reason for nomination as candidate

Mr. Masato Inari, following his engagement mainly in R&D of
Aromatic Chemicals department, served in important positions in
Natural Gas Chemicals and Aromatic Chemicals department,
presided over Aromatic Chemicals department, and was appointed
to be a Director in June 2017. With his abundant experience andknowledge of R&D and business management, etc., he has once
again been nominated as a candidate for Director.

7

Number ofshares of MGC
held

16,103

(Translation)

No.

Name
(Date of Birth)

Profile, position and responsibility in MGC(Important positions concurrently held at other companies, etc.)
April 1984
June 2012
April 2016

April 2018

June 2018

April 2019
Renomination
Nobuhisa Ariyoshi(November 26,1961)

June 20194

April 2020
Attendance of Board of
Directors Meeting
April 2021
(the fiscal year ended
March 31, 2021)
12 held, 12 attended

Joined MGC.
General Manager, Administrative & Personnel
CenterExecutive Officer, General Manager, Electronic
Materials Division, Information & Advanced
Materials Company
Managing Executive Officer, in charge of Finance& Accounting Center, Information Systems
Division, and Purchasing & Logistics Center
Director, Managing Executive Officer, in chargeof Finance & Accounting Center, Information
Systems Division, and Purchasing & Logistics
CenterDirector, Managing Executive Officer, Chairmanof Internal Control Promotion Committee, incharge of Compliance, Risk Management,Internal Audit Division, Corporate Planning
Division, Administrative & Personnel Center andCorporate Communications Division, General
Manager Tokyo Techno Park
Director, Managing Executive Officer, in chargeof Compliance, Risk Management, Finance &Accounting Center, Information Systems
Division, Administrative & Personnel Center andCorporate Communications Division, General
Manager Tokyo Techno Park
Director, Managing Executive Officer, in chargeof internal control & risk management, Corporate
Management Sector
Director, Managing Executive Officer, in chargeof internal control & risk management,
responsible for Administrative & Personnel
Division, Finance & Accounting Division, incharge of Information Systems Division(to the present)■ Reason for nomination as candidate
Mr. Nobuhisa Ariyoshi, following his engagement mainly inInformation & Advanced Materials and Specialty Chemicals
department, served in important positions in Administrative &Personnel and Information & Advanced Materials department, andwas appointed to be a Director in June 2018, and was in charge ofCorporate Management Sector and Compliance. With his abundant
experience and knowledge of MGC’s business and administrationof management, etc., he has once again been nominated as a
candidate for Director.

8

Number ofshares of MGC
held

15,200(Translation)

No.

Name
(Date of Birth)

Profile, position and responsibility in MGC(Important positions concurrently held at other companies, etc.)
April 1987
June 2013
April 2016

Renomination

April 2018

Kenji Kato
(June 2,1962)
April 2019
June 2019
April 2020
5

April 2021

Joined MGC.
General Manager, Tokyo Research Laboratory,Specialty Chemicals Company
Executive Officer, and Plant Manager, Kashima
Plant, Specialty Chemicals Company
Executive Officer, General Manager, Electronic
Materials Division, Information & Advanced
Materials Company
Managing Executive Officer, President ofInformation & Advanced Materials Company
Director, Managing Executive Officer, Presidentof Information & Advanced Materials Company
Director, Managing Executive Officer, in chargeof Research & Development Sector
Director, Managing Executive Officer,
Responsible for Research & Development, incharge of Intellectual Infrastructure Center(to the present)

Number ofshares of MGC
held

16,400Attendance of Board of ■ Reason for nomination as candidate
Directors Meeting
Mr. Kenji Kato, following his engagement in R&D of Specialty(the fiscal year ended
Chemicals, served in important positions in Specialty Chemicals
March 31, 2021)
and Information & Advanced Materials department, was appointed
12 held, 12 attended
to be a Director in June 2019 and presided over Information &Advanced Materials department. With his abundant experience andknowledge of R&D and business management, etc., he has once
again been nominated as a candidate for Director.

April 1985
June 2012
Renomination
Yasushi Kosaka(February 13,1961)

June 2014

April 2016
June 2016
April 2020
6

June 2020

Attendance of Board of
Directors Meeting(the fiscal year ended
March 31, 2021)
9 held, 9 attended

Joined MGC.
General Manager, Inorganic Chemicals Division,Specialty Chemicals Company
Executive Officer, General Manager, Inorganic
Chemicals Division, Specialty Chemicals
Company
Managing Executive Officer, Mitsubishi
Engineering-Plastics Corporation
President and CEO, Mitsubishi
Engineering-Plastics Corporation
Managing Executive Officer, in charge ofSpecialty Chemicals Business Sector
Director, Managing Executive Officer, in chargeof Specialty Chemicals Business Sector(to the present)■ Reason for nomination as candidate
Mr. Yasushi Kosaka, following his engagement mainly inSpecialty Chemicals department, served in important positions inSpecialty Chemicals department, was appointed to be a Director in
June 2020 and presided over Specialty Chemicals Businessdepartment. With his abundant experience and knowledge of
MGC’s business and administration of management, etc., he has
once again been nominated as a candidate for Director.

9

6,430

(Translation)

No.

Name
(Date of Birth)

Profile, position and responsibility in MGC(Important positions concurrently held at other companies, etc.)
April 1985
June 2011

Renomination
Naruyuki Nagaoka(November 20,1962)

April 2016
June 2016
April 2017
June 2019

April 2020
7

June 2020
April 2021

Joined MGC.
Manager, Administrative, Natural Gas Chemicals
Company
Manager, Corporate Planning Division
Audit & Supervisory Board Member of JSP
Corporation
Executive Officer, Manager,Corporate Planning
DivisionManaging Executive Officer, in charge ofCorporate Planning and Purchasing & Logistic
CenterManaging Executive Officer, in charge ofCompliance and Corporate planning Sector
Director, Managing Executive Officer, in chargeof Compliance and Corporate planning Sector
Director, Managing Executive Officer, in chargeof Basic Chemicals Business Sector

Number ofshares of MGC
held

11,988(to the present)
Attendance of Board of■ Reason for nomination as candidate
Directors Meeting
Mr. Naruyuki Nagaoka, following his engagement mainly in(the fiscal year ended
Natural Gas Chemicals department and Administrative &March 31, 2021)
Personnel, served in important positions in Natural Gas Chemicals
9 held, 9 attended
department and Corporate planning Division, and was appointed to
be a Director in June 2020. With his abundant experience andknowledge of MGC’s business and administration of management,
etc., he has once again been nominated as a candidate for Director.

April 1986
June 2014
April 2018
New Nomination
Motoyasu Kitagawa

April 2019

(April 2, 1963)
June 2019
April 2021
8

Joined MGC.
President, Mitsubishi Gas Chemical America, Inc.
General Manager, Organic Chemicals Division,
Natural Gas Chemicals Company
Executive Officer, General Manager, Organic
Chemicals Division, Natural Gas Chemicals
Company
Executive Officer, Manager, Corporate Planning
DivisionManaging Executive Officer, in charge ofcompliance, responsible for Corporate Planning
Division, in charge of Internal Audit Division,
CSR & IR Division(to the present)■ Reason for nomination as candidate
Mr. Motoyasu Kitagawa, following his engagement mainly in
Administrative & Personnel department and Corporate planning
Division, served in important positions in Natural Gas Chemicals
department and Corporate planning Division. With his abundant
experience and knowledge of MGC’s business and administrationof management, etc., he is deemed to be able to sufficiently carryout his roles as Director in MGC’s decision making andsupervision of management executives and for this reason he has
been nominated as a candidate for Director.

10

6,424

(Translation)

No.

Name
(Date of Birth)

Profile, position and responsibility in MGC(Important positions concurrently held at other companies, etc.)
April 1975
February 1989

April 1994
Renomination
Outside Director

April 2001
April 2010

Independent Director
Tsugio Sato

April 2013

(February 20,1951)
August 2013
April 2016
9

June 2017

Assistant, Applied Chemistry, Faculty ofEngineering, Tohoku University
Associate Professor, Molecular Chemistry andEngineering, Faculty of Engineering, Tohoku
University
Professor, Institute for Chemical Reaction
Science, Tohoku University
Professor, Institute of Multidisciplinary Research
for Advanced Materials, Tohoku University
Deputy Director, Institute of Multidisciplinary
Research for Advanced Materials, Tohoku
University
Director, Center for Exploration of New Inorganic
Materials, Institute of Multidisciplinary Research
for Advanced Materials, Tohoku University
Director, The Foundation for Japanese Chemical
Research
Professor Emeritus, Tohoku University(to the present)
Outside Director, MGC(to the present)■ Reason for nomination as candidate
Dr. Tsugio Sato has highly advanced expertise in wide fields ofstudy in chemicals such as inorganic materials chemistry, andprovides appropriate supervision and advice to MGC’s
Attendance of Board ofmanagement, so he has once again been nominated as a candidate
Directors Meetingfor Outside Director. After his election, he is expected to(the fiscal year ended
contribute to ensuring the validity and appropriateness of MGC’s
March 31, 2021)
decision making in the future.
12 held, 12 attended
Although he has not been directly involved in corporate
management, other than as Outside Director of MGC, he hasserved in important positions at university research institutions,and it is deemed that he would continue to perform his duties as
Outside Director appropriately.
Additionally, while there are transactional relationships between
MGC and Tohoku University, where he serves as Professor
Emeritus, including payment of consideration for joint research,
the amount during FY2020 was insignificant, totaling ¥6 million.

11

Number ofshares of MGC
held0(Translation)

No.

Name
(Date of Birth)

Renomination
Outside Director
Independent Director
Haruko Hirose( September 23,1945)

10

Profile, position and responsibility in MGC(Important positions concurrently held at other companies, etc.)
December 1968 Appointed to the National Personnel Authority ofJapan
January 1992
Director, Bureau of Human Resources
Management of Headquarters(Paris), United
Nations Educational, Scientific and Cultural
Organization (UNESCO)
September 2002 Deputy to the Director General and Managing
Director of Field Operations Division of
Headquarters(Vienna), United Nations Industrial
Development Organization (UNIDO)
November 2006 Japanese Ambassador Extraordinary andPlenipotentiary to Kingdom of Morocco
April 2013
Specially Appointed Professor, Academy for
Global Leadership Tokyo Institute of Technology
May 2014
President, Japan Morocco Association(to the present)
June 2016
Outside Director, S&B Foods Inc.
(to the present)
April 2017
Director, Ochanomizu University
March 2018
Outside Director, Nikkiso Co., Ltd.
(to the present)
June 2020
Outside Director, MGC(to the present)■ Reason for nomination as candidate
Ms. Haruko Hirose has many years of experience overseas andinsight as director at international organizations on a global scale,and provides appropriate supervision and advice to MGC’s
management, so she has once again been nominated as a candidate
Attendance of Board of
for Outside Director. After her election, she is expected to
Directors Meeting
contribute to ensuring the validity and appropriateness of MGC’s(the fiscal year ended
decision making in the future.
March 31, 2021)
Although she has not been directly involved in corporate
9 held, 9 attended
management, other than as Outside Director, since she has servedin important positions at an international organization, etc., it isdeemed that she would contribute to ensuring the validity andappropriateness of MGC’s decision making in the future.
Additionally, while there are transactional relationships between
MGC and S&B Foods Inc. where she serves as an outside director,
including the sale of products, the amount was less than 1% ofconsolidated net sales for FY2020. While there are transactional
relationships between MGC and Nikkiso Co., Ltd. where she
serves as an outside director, including the purchase of equipment,
the amount was less than 1% of consolidated net sales of said
company for FY2020.

12

Number ofshares of MGC
held0(Translation)

No.

Name
(Date of Birth)

Profile, position and responsibility in MGC(Important positions concurrently held at other companies, etc.)

Number ofshares of MGC
held

April 1979
April 2011

Renomination
Outside Director
Independent Director
Toru Suzuki(July 14,1955)

11

Joined Mitsui & Co., Ltd.
Managing Officer, Performance Chemicals
Business Unit, Mitsui & Co., Ltd.
April 2014
Managing Officer, Mitsui & Co., Ltd. andPresident of Mitsui & Co. Vietnam Ltd.
April 2015
Executive Managing Officers, Mitsui & Co., Ltd.
and President of Mitsui & Co. Vietnam Ltd.
June 2015
Executive Managing Officers, Chief Regional
Representative of Southwest Asia, Mitsui & Co.,
Ltd., and President of Mitsui & Co. India Pvt
Ltd.,
June 2017
Audit & Supervisory Board Member, Mitsui
Sugar Co.,Ltd.
December 2018 Audit & Supervisory Board Member, Nutri Co.,Ltd.
June 2020
Outside Director, MGC(to the present)■ Reason for nomination as candidate
Mr. Toru Suzuki has many years of experience overseas andinsight as a manager at a company operating on a global scale, andprovides appropriate supervision and advice to MGC’s
management, so he has once again been nominated as a candidate
for Outside Director. After his election, he is expected tocontribute to ensuring the validity and appropriateness of MGC’s
Attendance of Board ofdecision making in the future.
Directors Meeting
Additionally, although he was a business execution manager until
June 2017 at Mitsui & Co., Ltd., a business partner of MGC, over(the fiscal year ended
three years have passed since his retirement. While there are
March 31, 2021)
transactional relationships between MGC and said company
9 held, 9 attended
including the sale of products and materials, the amount was lessthan 1.1% of consolidated net sales of MGC for FY2020. Also,
while there are transactional relationships between MGC and said
company including the purchase of materials, the amount was lessthan 1% of consolidated net sales of said company for FY2020.

13

300

(Translation)

No.

Name
(Date of Birth)

Profile, position and responsibility in MGC(Important positions concurrently held at other companies, etc.)
April 1979
April 2012
April 2013
June 2013
April 2016

New Nomination
Outside Director

April 2017

Independent Director
Yasushi Manabe(December 15,1956)

12

April 2021

Number ofshares of MGC
held

Joined Hitachi, Ltd.
General Manager, Sales Division Infra System
Group Infra System
Executive Officer, General Manager Kansai Area
Operation, Hitachi, Ltd.
Outside Audit & Supervisory Board Member,
ShinMaywa Industries, Ltd.
Executive General Manager, Deputy Director
General Corporate Sales & Marketing Group,
CMO of Industry & Distribution, Water & Urban
Business Unit, Hitachi, Ltd.
Vice President and Executive Officer, Deputy
Director General Corporate Sales & MarketingGroup, CMO of Industry & Distribution
Business, Water & Urban Business, Hitachi, Ltd.
Executive Advisor, Yashima Denki Co., Ltd.
(to the present)■ Reason for nomination as candidate
Mr. Yasushi Manabe has many years of experience and insight as amanager at a company operating on a global scale, and it isdeemed that he would provide appropriate supervision and advice
to MGC’s management, so he has been nominated as a candidate
for Outside Director. After his election, he is expected tocontribute to ensuring the validity and appropriateness of MGC’s
decision making in the future.
Additionally, although he was a business execution manager until
March 2021 at Hitachi, Ltd., a business partner of MGC. While
there are transactional relationships between MGC and said
company including the sale of products, the amount was less than
1% of consolidated net sales of MGC for FY2020. Also, while
there are transactional relationships between MGC and said
company including equipment maintenance, the amount was lessthan 1% of consolidated net sales of said company for FY2020.
Although he is Executive Advisor, Yashima Denki Co., Ltd., abusiness partner of MGC. While there are transactional
relationships between MGC and said company including thepuchase of machines, the amount was less than 1% of consolidated
net sales of said company for FY2020.

100(Notes) 1. No conflict of interest exists between MGC and any of these candidates.
2. Ms.Haruko Hirose is listed as above in her preferred name. Her name in the family register is Haruko
Makinouchi.
3. Of the candidates, Dr.Tsugio Sato, Ms.Haruko Hirose, Mr.Toru Suzuki and Mr.Yasushi Manabe arenominated as Outside Directors.
4. Dr. Tsugio Sato will have been in office as Outside Director for four years as of the close of thisOrdinary General Meeting of Shareholders. Ms.Haruko Hirose and Mr.Toru Suzuki will have been in
office as Outside Director for one year as of the close of this Ordinary General Meeting of
Shareholders.
5. MGC has executed Limitation of Liability Agreements with Dr.Tsugio Sato, Ms.Haruko Hirose andMr.Toru Suzuki, currently MGC’s Outside Directors, limiting their liabilities pursuant to Article 423
Paragraph 1 of the Companies Act to the maximum amount stipulated by the Companies Act.
Aforementioned Limitation of Liability Agreements will be extended in the event their re-elections
are approved. Furthermore, in the event the election of Mr.Yasushi Manabe is approved, MGC is
14

(Translation)scheduled to conclude an identical Limitation of Liability Agreement with him.
6. MGC has registered Dr.Tsugio Sato, Ms.Haruko Hirose and Mr.Toru Suzuki as independent director
at Tokyo Stock Exchange, Inc. and will continue to register them as such in the event theirre-elections are approved. Furthermore, in the event the election of Mr.Yasushi Manabe is approved,
MGC will also register him as an independent director.
7. MGC has entered into a directors and officers liability insurance agreement with an insurancecompany pursuant to Article 430-3, Paragraph 1 of the Companies Act. The content of the insurance
agreement is as stated on 3. Information Concerning Corporate Officers in the Business Report. The
respective candidates for Director are to be included as insured parties under the insurance
agreement in the event their elections are approved. Furthermore, MGC plans to leave the content of
the insurance policy unchanged upon its next renewal.

15

(Translation)(Reference) MGC Standards on Independence for Outside Corporate Officers
A candidate is deemed to qualify as an independent officer as long as none of the following matters apply.
1. If any of the following applies to the candidate.
1) Has been a business execution manager (*1) of the MGC Group (*2).
2) Is a major shareholder of MGC (*3) or is or has been a business execution manager for a major shareholder
company within the previous five years.
3) Is or has been a business execution manager within the previous five years of an important business partner(*4).
4) Has been dispatched from a company or organization that has established a relationship with the MGC Groupthrough the reciprocal appointment of outside officers.
5) Works for or has worked for an accounting firm within the previous five years that has conducted a statutory
audit of MGC.
6) Provides or has provided consulting services other than statutory auditing to the MGC Group within theprevious three years, for which he or she has received high compensation (*5).
2. If any of the following applies to a close relation (*6) of the candidate.
1) Is or has been an important business execution manager (*7) of the MGC Group within the previous five years.
2) Is a major shareholder of MGC or a business execution manager for a major shareholder company.
3) Is or has been a business execution manager within the previous five years of an important business partner.
4) Works for or has worked for an accounting firm within the previous five years that has conducted a statutory
audit of MGC.
5) Provides or has provided consulting services other than statutory auditing to the MGC Group within theprevious three years, for which he or she has received high compensation.
3. The candidate has another important vested interest in the MGC Group and has been reasonably deemed to be unable
to fulfill his or her duties as an independent officer.
(*1)

Business execution manager: Either a Director overseeing business execution, an Executive Officer, other officer
involved in business execution, or an employee.

(*2)

MGC Group: MGC or one of its subsidiaries.

(*3)

Major shareholder of MGC: A shareholder currently holding, either directly or indirectly, 10% or more of total
shares issued and outstanding.

(*4)

Important business partner: A business partner that has made transactions, including buying and selling,amounting to 2% or more of consolidated net sales over the previous three consecutive years. Consolidated net
sales pertains to the MGC Group in the event the MGC Group is the seller, or to the partner in the event the
MGC Group is the buyer.

(*5) High compensation: In the case of an individual, an annual amount of 10 million yen or more, or in the case of amember of company or organization, compensation exceeding 2% of its consolidated net sales or total revenue.
(*6) Close relation: Either a spouse, first- or second-degree relative, or financial dependent.
(*7) Important business execution manager: Either a Director overseeing business execution, an Executive Officer, orother officer involved in business execution.
16

(Translation)

Proposal No. 2: Election of One Audit & Supervisory Board Member
Audit & Supervisory Board Member Mr. Katsuhiko Sugita will resign from his position as of the close of thisOrdinary General Meeting of Shareholders. Therefore, it is proposed that one Audit & Supervisory Board
Member be elected. Mr. Kenji Inamasa is intended to succeed to the position of Mr. Katsuhiko Sugita, and theterm of his office also dates from the date of his succession to his predecessor according to the Articles ofIncorporation of MGC.
The Audit & Supervisory Board has already given consent to this proposal.
The candidates are as follows:
Name(Date of Birth)

Profile and position in MGC(Important positions concurrently held at other companies, etc.)

April 1984
June 2009
June 2010
June 2014
New Nomination
Kenji Inamasa(June 2, 1956)

April 2015

April 2016

April 2019
June 2019
April 2021

Joined MGC.
General Manager, Planning & Development Division,
Aromatic Chemicals Company
Executive Officer, and Plant Manager, Mizushima Plant,
Aromatic Chemicals Company
Director, Managing Executive Officer, and Administrative
Management of Production Technology Division andEnvironment & Safety Division
Director, Managing Executive Officer, Chairperson of The
Committee on Future R&D, and Administrative
Management of Research & Development Division,
Production Technology Division and Environment &Safety Division
Representative Director, Senior Managing Executive
Officer, Administrative Management of Production
Technology Division, Environment & Safety Division andBusiness Strategy Division
Director
Representative Director, MGC Pharma Co.,Ltd.
Specially Appointed Executive(to the present)

Number ofshares of
MGC held

14,500■ Reason for nomination as candidate
Mr. Kenji Inamasa was appointed to be a Director in June 2014, served inimportant positions in R&D, Production Technology and Environment &Safety, giving him abundant experience regarding MGC's business as wellas corporate management. It is deemed that, derived from thoseexperiences, he would possess sufficient insight and knowledge essential for
Audit & Supervisory Board Member to be responsible for ensuring thelawfulness and appropriateness of the execution of Directors' duties,
therefore, he has been nominated as a candidate for Audit & Supervisory
Board Member.

(Note) 1. No conflict of interests exists between MGC and the candidate.
2. MGC has entered into a directors and officers liability insurance agreement with an insurancecompany pursuant to Article 430-3, Paragraph 1 of the Companies Act. The content of theinsurance agreement is as stated on 3. Information Concerning Corporate Officers in the Business
Report. The candidate for Audit & Supervisory Board Member is to be included as insured parties
under the insurance agreement in the event his election is approved. Furthermore, MGC plans toleave the content of the insurance policy unchanged upon its next renewal.
17

(Translation)

Proposal No. 3: Election of One Substitute Audit & Supervisory Board Member
The effective period for the resolution at the 92nd Ordinary General Meeting of Shareholders concerning theelection of Mr. Hiroaki Kanzaki as Substitute Outside Audit & Supervisory Board Member will expire at the
beginning of this Ordinary General Meeting of Shareholders, as stipulated in the Articles of Incorporation of
MGC.
Therefore, it is proposed that one Substitute Outside Audit & Supervisory Board Member be continuously
elected to prepare for the event in which the number of Outside Audit & Supervisory Board Members may fallshort of such number as is required by laws and regulations.
Additionally, prior to assuming the post, the validity of election may be revoked upon approval of the Audit& Supervisory Board and resolution of the Board of Directors.
The Audit & Supervisory Board has already given consent to this proposal.
The candidate is as follows:
Name(Date of Birth)

Profile and position in MGC(Important positions concurrently held at other companies, etc.)
April 1991
April 1992

April 1997
April 2004
April 2010
Renomination
Outside Audit &Supervisory Board Member
Independent Audit &Supervisory Board Member

May 2010

June 2010
July 2010
April 2012
April 2013

Hiroaki Kanzaki(November 2, 1962)

April 2018

Admitted to the bar, Daiichi Tokyo Bar
Association, Joined Sugimoto Law OfficeCommittee Member of the Committee on
Human Rights Protection, Daiichi Tokyo Bar
Association(to the present)
Joined Ichibancho Sogo Law OfficeDirector, Orifa Servicer Corporation
Member of the Central Election Management
Council of Japan
Attorney at law, Representative Partner ,Ichibancho Sogo Law Officies L.P.C(to the present)
Member of the Society for Contract Law,
Ministry of Defense(to the present)
Director, Orifa Servicer CorporationVice-President of Daiichi Tokyo Bar
Association
Member of Attorneys Recommendation
Committee, Daiichi Tokyo Bar Association
Member of the Finance Committee, Japan
Federation of Bar Associations
Chairperson, Central Election Management
Council of Japan.
Member of the Finance Committee, Daiichi
Tokyo Bar Association(to the present)
Auditor, Japan Federation of Bar Associations

Number ofshares of
MGC held

0 Shares■ Reason for nomination as candidate
Mr. Hiroaki Kanzaki has highly advanced expertise as an
attorney at law, as well as experience of direct involvement incorporate management and sufficient insight into corporate
management derived thereof. It is deemed that, derived fromthose experiences, he would possess sufficient insight andknowledge essential for Audit & Supervisory Board Member tobe responsible for ensuring the lawfulness and appropriatenessof the execution of Directors’ duties, therefore, he has been
nominated as a candidate for Substitute Outside Audit &Supervisory Board Member.

(Notes) 1. No conflict of interests exists between MGC and the candidate.
2. In the event the election of Mr. Hiroaki Kanzaki is approved, MGC is scheduled to conclude an18

(Translation)

identical Limitation of Liability Agreement with him, limiting his liabilities pursuant to Article
423 Paragraph 1 of the Companies Act to the maximum amount stipulated by the Companies Act.
3. In the event the election of Mr. Hiroaki Kanzaki is approved, MGC will also register him as anindependent auditor at Tokyo Stock Exchange, Inc..
4. MGC has entered into a directors and officers liability insurance agreement with an insurancecompany pursuant to Article 430-3, Paragraph 1 of the Companies Act. The content of theinsurance agreement is as stated on 3. Information Concerning Corporate Officers in the Business
Report. The candidate for Substitute Audit & Supervisory Board Member is to be included as
insured parties under the insurance agreement in the event he is appointed as Outside Audit &Supervisory Board Member. Furthermore, MGC plans to leave the content of the insurance policy
unchanged upon its next renewal.

19

BUSINESS REPORT(From April 1, 2020 to March 31, 2021)
1. Review of Results(1) Overview of 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 ofrecovery 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 to remain 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 to the novel coronavirus pandemic, while, atthe 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 ofexisting 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 ofgeneral-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 opticalpolymers, along with lower raw material and fuel prices.
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 absenceof one-off costs (¥7.8 billion) recorded in the previous fiscal year in connection with a joint venture
in Saudi Arabia.
Net income attributable to owners of the parent grew, despite such factors as growth inimpairment losses and a decrease in gain on sales of investment securities, due mainly to theincrease in ordinary income.
In fiscal 2020, the MGC Group achieved ¥595.7 billion in consolidated net sales, a decrease of¥17.6 billion (2.9%) from the previous year. Consolidated operating income was ¥44.5 billion, an
increase of ¥10.2 billion (29.9%). As a result of recording equity in earnings of affiliates of ¥5.1
billion, an increase of ¥6.4 billion, consolidated ordinary income was ¥50.2 billion, an increase of¥19.1 billion (61.5%). The Group achieved a profit attributable to owners of parent of ¥36.0 billion,
an increase of ¥14.9 billion (70.5%).

(2) Results by business segment
MGC has changed its business segmentation to three segments “Basic Chemicals,” “Specialty
Chemicals” and “Other” from the previous five segments, “Natural Gas Chemicals,” “Aromatic
Chemicals,” “Specialty Chemicals,” “Information & Advanced Materials,” and “Other.” Thecomparisons on each segment were made upon having reclassified figures for fiscal 2019 using the
updated business segment categories.
20

(Translation)

Basic Chemicals
Main businesses

Methanol, Methanol/Ammonia Based Chemicals, Specialty Aromatic
Chemicals, Commodity Aromatic Chemicals, Foamed Plastics,
Development and Sales of Resources, Life Science Related Products

The methanol business saw an improvement in earnings thanks mainly to an upturn in market
prices in the second half.
Methanol/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 inrepair costs.
Specialty aromatic chemicals posted earnings on par with the previous fiscal year, due mainly toremarkable second-half recovery in the sales volume of meta-xylenediamine, which had previously
been affected by first-half plunge in demand, in addition to solid sales of aromatic aldehydes.
Commodity aromatic chemicals suffered decreases in net sales and earnings compared with theprevious fiscal year. This was, despite lower raw material and fuel prices, mainly attributable tosluggish sales volumes of meta-xylene and purified isophthalic acid, as well as lower sales prices ofthese offerings.
Foamed plastics were buoyed by second-half recovery in demand in the automotive industry,
which had been hit by demand stagnation in the first half, and growing product needs associatedwith food packaging and civil engineering. Reflecting these and other factors, earnings from theseofferings were virtually unchanged from the previous fiscal year.
In fiscal 2020, Basic Chemicals Business achieved consolidated net sales of ¥315.0 billion, adecrease of ¥42.2 billion (11.8%) from the previous year and an operating income of ¥9.6 billion, adecrease of ¥1.6 billion (14.7%). The segment achieved ordinary income of ¥11.0 billion, an
increase of ¥6.2 billion (131.3%).
Specialty Chemicals
Main Businesses

Inorganic Chemicals, Engineering Plastics, Optical Materials,
Electronics Materials, Oxygen Absorbers(AgelessTM)

Inorganic chemicals posted an increase in earnings compared with the previous fiscal year thanks
primarily to growth in the sales volume of chemicals for use in semiconductor manufacturing.
Earnings from engineering plastics were on par with the previous fiscal year thanks mainly tosecond-half recovery in demand for polycarbonates and polyacetal for automotive and otherapplications, 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 tomeasures 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 electronicmaterials, reflecting the introduction of a new product for use in antenna-in-package substrates to beinstalled in 5G-compatible smartphones.
Oxygen absorbers such as AGELESSTM posted an increase in earnings compared with theprevious fiscal year, despite a decline in demand for tourism-related souvenirs, thanks mainly to a21

(Translation)solid volume of exports.
In fiscal 2020, Specialty Chemicals Business achieved consolidated net sales of ¥267.4 billion, an
increase of ¥12.3 billion (4.8%), an operating income of ¥34.8 billion, an increase of ¥9.2 billion(36.2%), and an ordinary income of ¥37.5 billion, an increase of ¥9.3billion (33.3%).
Other
In Other, the Group posted an increase in earnings from energy-related businesses due to surges inelectricity rates in the fourth quarter.
Other business achieved consolidated net sales of ¥13.2 billion, an increase of ¥12.3 billion.
Operating income was ¥3.2 billion, an increase of ¥3.1 billion, and ordinary income was ¥3.2 billion,
an increase of ¥3.2 billion.

Sales by Business Segment

Segment

FY2019FY2020(April 2019 - March 2020)(April 2020 - March 2021)

Sales
AmountSales
Amount(millions of yen)

Percentage
Total (%)

(millions of yen)

Percentage
Total (%)

Year-on-Year
Increase/
Decrease (%)

Basic Chemicals

357,33358.2

315,034

52.9

△11.8

Specialty Chemicals

255,11241.6

267,457

44.9

4.8

Other

898

0.1

13,2262.2

1372.7

Total

613,344100.0

595,700

100.0

△2.9

Note: Since FY2020 MGC has changed its business segmentation to three segments “Basic Chemicals,” “Specialty
Chemicals” and “Other” from the previous five segments, “Natural Gas Chemicals,” “Aromatic Chemicals,”“Specialty Chemicals,” “Information & Advanced Materials,” and “Other.” The comparisons above weremade upon having reclassified figures for fiscal 2019 using the updated business segment categories.

(3) Capital Expenditures
Capital expenditures for the current fiscal year were made largely in relation to reinforcing the
production capabilities for existing products and maintaining/renovating equipment and facilities.
Major expenditures incurred are as follows:
1) Major facilities completed during the current fiscal year
No applicable items.
2) Construction initiated or continuing through the current fiscal year
MGC Pure Chemicals Taiwan, Inc.
・Production facility for industrial hydrogen peroxide（Specialty Chemicals）
Taixing Lingsu Specialty Materials Co., Ltd.
・Production facility for hydrogen peroxide, performance chemicals（Specialty Chemicals）(4) Funding
The funds for equipment and facilities as well as for working capital for the current fiscal year were
provided by MGC’s own resources, borrowings from financial institutions and issuance of corporate
bonds.
22

(Translation)
MGC issued 20 billion yen in unsecured corporate bonds on September 3, 2020.
Of this amount, 10 billion yen is used to redeem existing bonds, and remaining amount is used aspart of capital investment to improve corporate value.
(5) Operations Results and Financial Position
1) MGC Group (consolidated basis)
FY2017
Classification
April 2017 –FY2018FY2019(Millions of yen)
FY2020March 2018

April 2018 –March 2019

April 2019 –March 2020

April 2020 –March 2021

Sales

635,909648,986

613,344595,718

Ordinary income

80,711

69,19931,11650,240

Profit attributable to owners ofparent(MitsubishiGasChemical)
Net income per Share (yen)60,53155,00021,15836,070281.39257.46100.50173.41

Total assets

785,687

804,038

771,733

836,364

Net assets

519,144553,282

548,141

581,411

Note 1: From the beginning of FY2018, MGC has applied the “Partial Amendments to Accounting Standard forTax Effect Accounting” (Accounting Standards Board of Japan (“ASBJ”) Statement No. 28; February 16,2018), etc., and figures for FY2017 in the table above have been retroactively restated after application ofsaid accounting standard, etc.

2) MGC (Non-consolidated basis)
FY2017FY2018(Millions of yen)
FY2019FY2020April 2017 –March 2018

April 2018 –March 2019

April 2019 –March 2020

April 2020 –March 2021

Sales

364,433

375,129

351,348

344,898

Ordinary income

54,14941,32930,06626,443

Net income

41,386

34,69029,332

23,966

Net income per Share (yen)192.39162.39139.33115.22

Total assets

455,869

457,427

425,713469,634

Net assets

275,255

291,198

290,955

306,478Classification

Note 1: From the beginning of FY2018, MGC has applied the “Partial Amendments to Accounting Standard forTax Effect Accounting” (Accounting Standards Board of Japan (“ASBJ”) Statement No. 28; February 16,2018), etc., and figures for FY2017 in the table above have been retroactively restated after application ofsaid accounting standard, etc.

23

(Translation)(6) Key Challenges for the Mitsubishi Gas Chemical GroupIn fiscal 2020, The MGC Group fell short of the management indicators set as targets for the
final year of MGC Advance2020, the previous Medium-Term Management Plan.
This was the result of external factors such as oversupply due to the rise of emerging
countries and a downturn in commodity product markets associated with US/China trade
friction, as well as a decline in demand for some products due to the impact of the COVID-19.
Internal factors, including the maturation of existing business structures and delays in creating
and developing new businesses, also played a role.
Meanwhile in core and semi-core businesses, there was steady growth in products unaffectedby market conditions, which have maintained their competitive advantage and led to solvingsocial issues, while markets have also continued to grow.
Launched in fiscal 2021, newly formulated Medium-Term Management Plan, “Grow UP
2023”, establishes two new objectives under the MGC Way, the new MGC Group philosophy.
The objectives involve “Shift to a profit structure resilient to environmental changes” and“Balance social and economic value.” MGC will pursue strategies to achieve these objectives
comprised of three items for each.

◆New Medium-Term Management Plan

“Grow UP 2023”● Objective 1

Shift to a Profit Structure Resilient to Environmental Changes : Business Portfolio Reform■ 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 hasreevaluated 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 which lead to “creating
values to share with society”. In chemicals and materials, these include
Meta-xylenediamine(MXDA), MX-Nylon, aromatic aldehydes and polyacetal; specialty
products include electronics chemicals, BT-related material, optical resin polymers andultra-high refractive lens monomers. The MGC Group will continue to focus 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 a 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 to continue 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 toenvironmental changes. Specifically, by fiscal 2023, the Group aims to have more than 40% of
overall sales come from differentiating businesses, and for unprofitable businesses or thoseneeding rebuilding to represent less than 3% of total sales.

24

(Translation)● Objective 2

Balance Social and Economic Value: Toward Sustainable Growth■ Strategies– Solve social issues through business– Harmonize shared-value creation with 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 linewith 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, andfor 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)

Return on invested capital (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 thesestrategies is to set a new record high for operating income.
(JPY in billions)
Consolidated Performance

Target Value(Fiscal 2023)
730
70
80
9％ or higher

Sales
Operating Income
Ordinary Income
ROE (Return On Equity)
ROIC(Return on
10％ or higher
Invested Capital) *＜Assumptions＞ Exchange rate：105JPY／US$,
Crude oil (Dubai)： 60US$/BBL*ROIC = Ordinary Income÷invested capital
The basic policy is to continue to provide stable dividends while flexibly purchasing treasury
stock, while setting a new total payout ratio of 40% as a target for medium-term shareholder returns.

* Plans and descriptions concerning the future such as target values provided in “Key Challenges for
the Mitsubishi Gas Chemical Group” are based on information available to the Group as of the dateof preparation of this document and certain assumptions which the Group deems reasonable, andtherefore include uncertainties. Actual results may differ significantly from these projections due tovarious factors.

25

(Translation)(7) Major Places of Business of Mitsubishi Gas Chemical (As of March 31, 2021)
1) MGC
Head Office:Research Institutes:

Plants:Name
Location
5-2, Marunouchi 2-chome, Chiyoda-ku, Tokyo, JapanTokyo Research Laboratory
Tokyo Prefecture
Niigata Research Laboratory
Niigata Prefecture
Hiratsuka Research Laboratory
Kanagawa Prefecture
Niigata Plant
Niigata Prefecture
Mizushima Plant
Okayama Prefecture
Yokkaichi Plant
Mie Prefecture
Yamakita Plant
Kanagawa Prefecture
Kashima Plant
Ibaraki Prefecture
QOL Innovation Center Shirakawa
Fukushima Prefecture2) Subsidiaries
Company Name
Eiwa Chemical Industry Co., Ltd.
Toho Earthtech,Inc.
Japan Finechem Co., Inc.
Japan U-pica.Co.Ltd.
Mitsubishi Gas Chemical Trading, Inc.
Yonezawa Dia Electronics Co., Inc.
JSP Corporation
MGC Energy Company Limited
MGC Electrotechno Co., Ltd.
MGC Terminal Co., Inc.
MGC Filsheet Co., Ltd.
MGC Advanced Polymers Inc.
MGC Pure Chemicals America, Inc.
Mitsubishi Gas Chemical America, Inc.
MGC Pure Chemicals Singapore Pte. Ltd.
Mitsubishi Gas Chemical Singapore Pte. Ltd.
Ageless（Thailand）Co., Ltd.
Thai Polyacetal Co., Ltd.
Mitsubishi Gas Chemical EngineeringPlastics (Shanghai) Co., Ltd.
MGC Pure Chemicals Taiwan, Inc.
Samyoung Pure Chemicals Co., Ltd.

26

Head Office
Kyoto
Niigata
Tokyo
Tokyo
Tokyo
Yamagata
Tokyo
Tokyo
Tokyo
Tokyo
Saitama
U.S.A.
U.S.A.
U.S.A.
Singapore
Singapore
ThailandThailandBusiness and Production Site
Aichi Prefecture, etc.
Tokyo Prefecture, etc.
Kagawa Prefecture, etc.
Yamaguchi Prefecture, etc.
Osaka Prefecture, etc.
--Tochigi Prefecture, etc.
--Fukushima Prefecture
Hiroshima Prefecture, etc.
Osaka Prefecture,etc.
--U.S.A.
--------Thailand

China

---

Taiwan
Korea--Korea(Translation)(8) Number of Employees (As of March 31, 2021)
1) MGC Group (Consolidated)
Segment
Basic Chemicals
Specialty Chemicals
Other
Corporate (Shared)

Numberof Employees
5,016
3,533
135
314

Change fromEnd of FY2019
34
23
△2
△11

8,998

44

Total

Notes: 1. Only employees working within the Group are included in the headcount (excludes individuals on
assignment from the Group to companies outside of the Group and includes individuals on assignment
from outside of the Group to companies within the Group).
2. The employees in the Corporate (Shared) segment are individuals who belong to administrative
departments that cannot be classified into specific business segments.
3. Since FY2020 MGC has changed its business segmentation to three segments “Basic Chemicals,”“Specialty Chemicals” and “Other” from the previous five segments, “Natural Gas Chemicals,”“Aromatic Chemicals,” “Specialty Chemicals,” “Information & Advanced Materials,” and “Other.” Thecomparisons above were made upon having reclassified figures for fiscal 2019 using the updated
business segment categories.

2) MGC (Non-Consolidated)
NumberChange fromof Employees
End of FY2019
2,427

Average Age
40 years old and9 month36

Average Duration in
Employment
17 years and8 month

Note: Only employees working within MGC are included in the headcount (excludes individuals on assignment
from MGC to other companies and includes individuals on assignment from other companies to MGC).

(9)

Major Subsidiaries and Affiliates (As of March 31, 2021)
Company

Issued Share Capital(millions of yen)

Eiwa Chemical Industry
Co., Ltd.

420

Toho Earthtech, Inc.

240

Japan Finechem Co., Inc.

274

Japan U-Pica Co., Ltd.

1,100

Mitsubishi Gas Chemical
Trading, Inc.
Yonezawa Dia
Electronics Co., Inc.
JSP Corporation
MGC Energy Co., Ltd.
MGC Electrotechno Co.,Ltd.

Ratio of
VotingRights (%)

Principal Business

Manufacture and sale of blowing agents,
blowing agent activators, and resin
processing products
Production and sale of natural gas and50.1
iodine, and Seismic reinforcement works
Manufacture and sale of organic synthetic
100.0 chemicals, including polymeric initiators(9.8) and raw materials for agrichemicals, andelectronics parts
Manufacture and sale of unsaturated
70.0 polyester resins, coating resins, andmethacrylic acid esters

90.9

210

100.0

Sale of chemicals and other products
Manufacturing of Mass lamination board
and LE sheet, entry sheet for PWB drilling
Manufacture and sale of foamed polystyrene
and foamed polyolefin

5

100.0
(100.0)
54.0
(0.2)
100.0

500

100.0

90
10,12827

Procurement and sales of electricity
Manufacture and sale of printed circuitboard materials

(Translation)

Company

Issued Share Capital(millions of yen)

MGC Terminal Co., Inc.

100

MGC Filsheet Co., Ltd.

50

MGC Advanced
Polymers Inc.
MGC Pure Chemicals
America, Inc.
Mitsubishi Gas Chemical
America, Inc.
MGC Pure Chemicals
Singapore Pte. Ltd.
Mitsubishi Gas Chemical
Singapore Pte. Ltd.
Ageless（Thailand）Co.,Ltd.

Ratio of
VotingRights (%)

100.0(14.2)
100.0(45.4)
100.0(50.0)
100.0(20.0)(thousands of USD)

6,000
(thousands of USD)

5,000

Principal Business
Storage services for methanol
Manufacture and sale of polycarbonate
sheets/films
Manufacture and sale of MX-Nylon
Manufacture and sale of super purehydrogen peroxide and other products(thousands of USD)

100.0

1,084
(thousands of USD)

Sale of chemicals and other products

100.0 Manufacture and sale of super pure(10.0) hydrogen peroxide and other products

7,106(thousands of USD)

1,161

100.0

Sale of chemicals and other products

100.0

Manufacture and sale of Oxygen Absorbers

70.0

Manufacture and sale of polyacetal resins

91.0

Manufacture and sale of polycarbonate
resins(millions of THB)

250
(millions of THB)

Thai Polyacetal Co., Ltd.
Mitsubishi Gas Chemical
Engineering-Plastics(Shanghai) Co., Ltd.
MGC Pure Chemicals
Taiwan, Inc.
Samyoung Pure
Chemicals Co., Ltd.

840
(millions of RMB)

1,504
(millions of NTD)

100.0

80
(millions of KRW)

51.0

3,500

Manufacture and sale of super purehydrogen peroxide and other products
Manufacture and sale of super purehydrogen peroxide and other products
Manufacture and sale of magneto-optics
crystalGranopt Co., Ltd.

150

49.0

Kokuka Sangyo Co.,Ltd

100

50.0

Shipping of chemical products

2,310

47.4

Import and sale of methanol, and investment
in and finance for foreign companies

3,000

50.0

Sale and manufacture of engineering plastics

300

45.0

Manufacture and sale of electric/electronic
related materials and their applied products

50.0

Manufacture and sale of methanol

Japan Saudi Arabia
Methanol Co., Inc.
Mitsubishi
Engineering-Plastics
Corporation
Ryoden Kasei Co.,Ltd
Brunei Methanol
Company Sdn.Bhd.

(thousands of USD)Tai Hong Circuit
Industrial Co., Ltd.

(millions of NTD)

Korea Engineering
Plastics Co., Ltd.

(millions of KRW)

189,400

Manufacture and sale of printed circuitboards (single-sided boards, double-sided
boards, and double layer boards)
50.0 Manufacture and sale of engineering(10.0) plastics, mainly polyacetal resins

50.0

1,104
12,600Note: The figures in parentheses represent the percentage of voting rights indirectly held by MGC's subsidiaries,
included in totals.

28

(Translation)(10) Major Lenders (As of March 31, 2021)(Millions of yen)

LenderBalance of Borrowings

MUFG Bank, Ltd.

25,254The Norinchukin Bank

7,188

Nippon Life Insurance Company

5,835

Mizuho Bank, Ltd.

5,557

Development Bank of Japan Inc.

5,545

Sumitomo Mitsui Banking Corporation

4,834

The Bank of Yokohama, Ltd.

4,750

29

(Translation)

2. Information Concerning Stock (As of March 31, 2021)(1) Authorized Shares

492,428,000 (No change from end of FY2019)(2) Issued and Outstanding Shares 225,739,199 (No change from end of FY2019)(3) Number of Shareholders

21,585 (Decrease by 3,192 from end of FY2019)(4) Principal Shareholders (ten largest shareholders)
Investment to MGC
Number of
Shares Held(thousands Shares)

Percentage to
Total Shares
Outstanding (%)

The 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

Name of shareholder

Notes: 1. MGC holds 17,726 thousands shares of treasury shares, which is not included in the above list ofprincipal shareholders.
2. Percentage to Total Shares Outstanding is calculated excluding treasury shares.

(5) Shares Delivered as Consideration for The Execution of Duties to Directors and Audit &Supervisory Board Members
Number of
Number of Recipients
SharesDirectors (Excluding Outside Directors)

18,00030

8(Translation)

3. Information Concerning Corporate Officers(1) Directors and Audit & Supervisory Board Members (As of March 31, 2021)
Position
Representative
Director
Chairman
Representative
Director
President
Director
Managing Executive
Officer
Director
Managing Executive
Officer
Director
Managing Executive
Officer
Director
Managing Executive
Officer
Director
Managing Executive
Officer
Director
Managing Executive
Officer
Director
Director

Toshikiyo Kurai

Masashi Fujii

Masato Inari

In charge of Internal Audit Division, Environment & Total
Production Sector

Nobuhisa Ariyoshi

In charge of internal control & risk management, Corporate
Management Sector

Tomohiko Okubo

Administrative Management of LNG Project Team,In charge of Basic Chemicals Business Sector

Kenji Kato

In charge of Research & Development Sector

Yasushi Kosaka

In charge of Specialty Chemicals Business Sector

Naruyuki Nagaoka

In charge of compliance, Corporate Planning Sector

Kazuo Tanigawa
Tsugio Sato

Director

Haruko Hirose

Director

Toru Suzuki

Audit & Supervisory
Board Member(Fulltime)
Audit & Supervisory
Board Member(Fulltime)
Audit & Supervisory
Board Member(Fulltime)

Responsibilities at MGC and Important current positionsat other companies, etc.

Name

President, Japan Morocco Association
Outside Director, S&B Foods Inc.
Outside Director, Nikkiso Co., Ltd.
Audit & Supervisory Board Member, Mitsui Sugar Co.,Ltd.
Audit & Supervisory Board Member, Nutri Co., Ltd.

Takashi Kimura

Katsuhiko Sugita

Masamichi
Mizukami31

(Translation)

Position

Audit & Supervisory
Board Member

Responsibilities at MGC and Important current positionsat other companies, etc.

Name

YasuomiMatsuyama

External Audit & Supervisory Board Member of Keisei Electric
Railway Co., Ltd.
President in Nissay Culture Foundation
President in Tokyo Opera City Cultural Foundation

Notes: 1. MGC has adopted the executive officer system.
2. Of the Directors, Mr. Yasushi Kosaka, Mr. Naruyuki Nagaoka, Ms.Haruko Hirose and Mr. Toru Suzuki
newly assumed their office as of June 25, 2020.
3. Of the Directors, Mr. Kazuo Tanigawa, Dr.Tsugio Sato, Ms.Haruko Hirose and Mr. Toru Suzuki are
Outside Directors as stipulated in Article 2, Item 15 of the Companies Act.
4. Of the Audit & Supervisory Board Members, Messrs. Takashi Kimura and Yasuomi Matsuyama are
Outside Audit & Supervisory Board Members as stipulated in Article 2, Item 16 of the Companies Act.
5. Ms.Haruko Hirose is listed as above in her preferred name. Her name in the family register is Haruko
Makinouchi.
6. Audit & Supervisory Board Member, Mr. Takashi Kimura, has been involved with financial institutions
for a number of years, and has experience in corporate management as a manager, and possesses a
considerable degree of knowledge regarding finance and accounting.
7. Audit & Supervisory Board Member, Mr. Katsuhiko Sugita, has been involved in the Finance
Department of MGC for a number of years, and has experience in management through his role incharge of the Finance & Accounting Division, and possesses a considerable degree of knowledge
regarding finance and accounting.
8. Audit & Supervisory Board Member, Mr. Yasuomi Matsuyama, has been involved with financial
institutions for a number of years, and has experience in corporate management through his role incharge of the Accounting Division, and possesses a considerable degree of knowledge regarding financeand accounting.
9. MGC has registered Directors, Mr. Kazuo Tanigawa, Dr.Tsugio Sato, Ms.Haruko Hirose and Mr. Toru
Suzuki and Audit & Supervisory Board Members, Messrs. Takashi Kimura and Yasuomi Matsuyama, as
independent directors/auditors at Tokyo Stock Exchange, Inc.
10. There is no material business relation between MGC and the other companies, etc. in which Directors,
Ms.Haruko Hirose, Mr. Toru Suzuki and Audit & Supervisory Board Member, Mr. Yasuomi Matsuyama,
serve concurrently.
11. Corporate Officers who have retired during the current fiscal year are as follows:
Director
Mr. Masamichi Mizukami
Director
Mr. Masahiro Johno
Director
Mr. Hiroyuki Otsuka(Retired upon expiry of the term of office on June 25 2020)
Audit & Supervisory Board Member (Fulltime)
Mr. kunio Kawa
(Retired upon resignation on June 25 2020)
12. Effective from April 1, 2021 Responsibility at MGC and important current positions at other companies,
etc. changed as follows.
Responsibility at MGC and Important current positions at
PositionNameother companies, etc.
Director
Responsible for Production Technology, In charge ofManaging
Masato Inari
Environment Safety and Quality Assurance Division,
Executive Officer
Purchasing & Logistics Division
In charge of internal control & risk management,
Director
Responsible for Administrative & Personnel Division,
Managing
Nobuhisa Ariyoshi
Finance & Accounting Division, In charge of Information
Executive Officer
Systems Division
Director

Tomohiko Okubo－

Director
Managing
Executive Officer

Kenji Kato

Responsible for Research & Development Division, In
charge of Intellectual Infrastructure Center

32

(Translation)
Responsibility at MGC and Important current positions atother companies, etc.

Position

Name

Director
Managing
Executive Officer

Naruyuki Nagaoka

In charge of Basic Chemicals Business Sector

Director

Toru Suzuki－(2) General Intent of Limitation of Liability Agreement
MGC has entered into a Limitation of Liability Agreement with each Outside Corporate Officers
to limit their liabilities with respect to Article 423 Paragraph 1 of the Companies Act up to theamount stipulated by the law, based on Article 427 Paragraph 1 of said Act.
(3) General Intent of Directors & Officers Liability Insurance
MGC has entered into a directors and officers liability insurance policy with an insurancecompany pursuant to Article 430-3 Paragraph 1 of the Companies Act, with the insured parties
thereto consisting of MGC’s Directors, Audit & Supervisory Board Members, Executive Officers,
important employees, outside dispatched officers and retired officers.
The insurance policy provides coverage for legal damages, litigation expenses and other suchcosts that may be incurred by an insured party if he or she becomes subject to a legal claim fordamages filed by a shareholder, third-party or otherwise. However, the insurance policy does notprovide coverage for damages caused by an insured party as a result of he or she having engaged
in criminal acts or other such behavior.
MGC shall assume payment of the insurance policy premiums in full.

33

(Translation)(4) Directors’ and Audit &Supervisory Board members’ Remuneration

Classification

Amount of

Total Amount of Remuneration by Type

Remuneration(millions of yen)

Number of
eligible people(millions of yen)

Basic

Performance-based

Restricted Stock

Directors

479

330

120

29

15

Audit & Supervisory
Board Member

87

87

－

－

5

Total

567

418

120

29

20

(70)

(70)

－

－

(6)

Outside Directors/Audit &Supervisory Board Members(Figures on the right are parts ofthe total amounts above.)

Note: 1. The amount of restricted stock remuneration to Directors is that of the provision for restricted stock
remuneration (for eleven Directors excluding Outside Directors) for the fiscal year under review.
2. Monetary remuneration paid to Directors is to amount to within ¥600 million per annum, including
reserved retirement benefits for each term of office (of which, the amount shall be within ¥50 million
for Outside Directors who shall not be eligible for of the reserved retirement benefits), per resolution of
the 91st Ordinary General Meeting of Shareholders held on June 26, 2018. The number of Directors
upon conclusion of said General Meeting of Shareholders is 12 Directors (of whom, two are Outside
Directors).
Meanwhile, in a framework separate from the monetary remuneration, remuneration that involves
granting restricted stock shall amount to within ¥100 million per annum (Outside Directors shall not be
eligible for payment thereof), per resolution of the 91st Ordinary General Meeting of Shareholders heldon June 26, 2018. The number of Directors (excluding Outside Directors) upon conclusion of said
General Meeting of Shareholders is 10 Directors.
3. Having taken into account Remuneration and Nominating Committee discussions involving Mr.
Masashi Fujii, President and Representative Director, on remuneration allocations, the Board of
Directors deems the President most suitable for evaluating the respective Directors while enlisting abroad-based view of the MGC overall. The Board of Directors has accordingly decided to entrust Mr.
Masashi Fujii with decisions on allocations of annual remuneration for the respective Directors.
4. Indicators pertaining to performance-based remuneration enlist a combination of ordinary income and
ROIC with the aim of providing incentive with respect to corporate performance. Accordingly,
ordinary income of ¥31,116 million and ROIC of 4.9% served actual results with respect to such
indicators.
5. Monetary remuneration paid to Audit & Supervisory Board Members is to amount to within ¥10
million per month, per resolution of the 80th Ordinary General Meeting of Shareholders held on June
28, 2007. The number of Audit & Supervisory Board Members upon conclusion of said General
Meeting of Shareholders was 5 Audit & Supervisory Board Members.
6. Audit & Supervisory Board Members’ remuneration consists only of a basic remuneration and isdecided among the Audit & Supervisory Board Members within the amount stipulated by the General
Meeting of Shareholders.

(5) Policies and Methods for Deciding Remuneration and Other Benefits of Directors
MGC has determined policies on making decisions regarding remuneration and other benefits
for individual Directors, per resolution at its meeting of the Board of Directors held on February
17, 2021.
Having taken into account discussions regarding remuneration and other benefits forindividual Directors pertaining to the current fiscal year, subsequent to consultation with theRemuneration and Nominating Committee consisting of the Chairman, the President, and all
Outside Directors, the Board of Directors deems that such remuneration and other benefits for34

(Translation)individual Directors conforms with the methods for deciding details of remuneration and otherbenefits and also conforms with such policies on details regarding remuneration and otherbenefits that have been determined.
The policy on making decisions pertaining to remuneration and other benefits for individual
Directors is as follows.
Remuneration for the MGC’s Directors, excluding Outside Directors, consists of annual
remuneration and restricted stock remuneration.
The annual remuneration consists of fixed basic remuneration decided in accordance witheach Director’s position and duties, in conjunction with performance-based remuneration basedon various indicators of corporate performance. As for method payment, the eligible Directors
receive annual remuneration paid on a monthly basis, divided into monthly installments, acertain percentage of which is set aside each month as part of a reserved retirement benefit,
which is paid to Directors upon their retirement. MGC may take action to reduce such amounts
depending on a Director’s performance and other grounds. The performance-based
remuneration is determined based on factors that include quantitative financial results and theextent to which targets have been achieved, using ordinary income and other such indicators,
with the aim of furnishing incentive with respect to corporate performance. Moreover,
performance-based remuneration accounts for roughly 30% of annual remuneration, whichmainly consists of basic remuneration. This is a suitable remuneration mix given distinctive
characteristics of MGC’s business particularly in terms of its many years of monetizing
respective businesses as a result of having engaged in various initiatives such as R&D,
manufacturing process development, and market development.
The restricted stock remuneration involves granting a certain volume of shares to Directors inalignment with their positions and duties, in a manner whereby remuneration furnished for thesake of granting treasury shares is paid to the Directors each fiscal year on a lump-sum basis.
Such shares are subject to transfer restrictions so that recipients are required maintain holdings
for a certain period of time. This helps encourage a sense of shared value with shareholders andfurthermore provides incentive for recipients to help achieve sustainable growth with respect to
MGC’s corporate value.
In addition to these forms of remuneration, MGC may pay an amount considered appropriate
as a bonus upon resolution of a General Meeting of Shareholders.
Remuneration paid to Outside Directors who maintain positions of independence frombusiness execution is limited to fixed amounts of basic remuneration.
Total amounts of annual remuneration for Directors shall be determined by the Board of
Directors, subsequent to consultation with the Remuneration and Nominating Committee andafter having reviewed comprehensive factors such as corporate performance, world standards,
and employee salary trends. With respect to remuneration allocations on an individual basis, theBoard of Directors has taken into account Remuneration and Nominating Committee
discussions involving the President on remuneration allocations, and accordingly deems the
President most suitable for evaluating the respective Directors while enlisting a broad-based
view of the MGC overall in that regard.
The policy above shall be determined by the Board of Directors, subsequent to consultation
with the Remuneration and Nominating Committee consisting of the Chairman, the President,
and Outside Directors.

35

(Translation)(6) Information Concerning Outside Corporate Officers
1) Relations between MGC and Other Companies in which Officers Concurrently Hold Important
Positions
The relations between MGC and other companies in which the outside corporate officers
concurrently hold important positions are as described in (1).

2) Major Activities of Outside Corporate Officers
Attendance at
OutsideBoard of Directors
Director
Meeting

Kazuo
Tanigawa

Tsugio Sato

Haruko Hirose

Toru Suzuki

Major Activities

12 of 12 meetings

Drawing on his many years of experience and insight as amanager at a company operating on a global scale, Mr.
Tanigawa adequately demonstrated management
supervision functions by making comments as necessary
at Board of Directors meetings and other important
meetings from an external perspective to ensure
appropriate and proper decision-making of MGC.

12 of 12 meetings

Drawing on his highly advanced expertise in a wide fieldof study in chemicals such as inorganic materials
chemistry and on his extensive experience holding
prominent positions in various organizations, including
universities and academic societies, Dr. Sato adequately
demonstrated management supervision functions bymaking comments as necessary at Board of Directors
meetings and other important meetings subsequent toassuming office as Director from an external perspective
to ensure appropriate and proper decision-making of
MGC.

9 of 9 meetings

Drawing on her experience overseas and insight asdirector at international organizations on a global scale,
Ms. Haruko Hirose adequately demonstrated management
supervision functions by making comments as necessary
at Board of Directors meetings and other important
meetings subsequent to assuming office as Director froman external perspective to ensure appropriate and proper
decision-making of MGC.

9 of 9 meetings

Drawing on his many years of experience and insight as amanager at a company operating on a global scale, Mr.
Toru Suzuki adequately demonstrated management
supervision functions by making comments as necessary
at Board of Directors meetings and other important
meetings subsequent to assuming office as Director froman external perspective to ensure appropriate and proper
decision-making of MGC.

36

(Translation)

Outside Audit& Supervisory
Board Member

Takashi
KimuraYasuomiMatsuyama

Attendanceat Board of
Directors
Meeting

12 of 12
meetings

12 of 12
meetings

Attendance at
Audit andSupervisory
Board Meeting

Major Activities

14 of 14
meetings

Drawing on his experience with financial
institutions and as a business manager, Mr. Kimura
asked questions and offered advice at Board of
Directors meetings and other important meetings
to ensure the appropriate execution of business.
Further, in compliance with audit policies
stipulated by the Audit & Supervisory Board, Mr.
Kimura audited each division and office andcarried out inspection of subsidiaries, etc., while
adequately demonstrating audit functions as a
Full-time Audit & Supervisory Board Member

13 of 14
meetings

Drawing on his experience with financial
institutions and as a business manager, Mr.
Matsuyama made comments from an external
perspective to ensure appropriate decision making
by the Board of Directors.
Further, in compliance with audit policies
stipulated by the Audit & Supervisory Board, Mr.
Matsuyama discussed and exchanged views on
important matters related to auditing, adequately
demonstrating audit functions.

37

(Translation)

4. Information Concerning Independent Auditor(1) Name of Independent Auditor
Crowe Toyo & Co.
(2) Independent Auditors’ Fees in FY2020
1) Fee for the audit performed as stipulated in Article 2 Paragraph 1 of
the Certified Public Accountants Law
2) Aggregate amount of cash and other monetary payments made by
MGC and MGC’s subsidiaries¥70 million¥100 million

Notes: 1.

The fee for audit pursuant to the Companies Act and that for audit pursuant to the Financial
Instruments and Exchange Act are not differentiated in the Audit Agreement between MGC andIndependent Auditor. As such, the amount in 1) includes the amount of the fee and other payments
for the audit due pursuant to the Financial Instruments and Exchange Act.

2.

Of MGC’s main subsidiaries, the financial statements of JSP Corporation and foreign subsidiaries
are audited (as stipulated in the Companies Act or Financial Instruments and Exchange Act,
including equivalent foreign laws and ordinances) by certified public accountants or accounting
firms (including those with equivalent foreign certifications) other than MGC’s Independent
Auditor.

3.

MGC and MGC’s subsidiary entrusts agreed-upon procedural operations as duties other than duties
prescribed in Article 2, Paragraph 1 of the Certified Public Accountants Act, and pay consideration
to Independent Auditors.

4.

The Audit & Supervisory Board agreed to the amount listed above in 1) after confirming thecontent of the Independent Auditor's audit plan, quality management systems, the state of executionof audit, estimates of audit remuneration, etc.

(3) Policy for Dismissal and Non-reappointment of independent Auditors
In the case that any of the items in Article 340, Paragraph 1 of the Companies Act apply to an
Independent Auditor, that Independent Auditor's dismissal will be considered, and in the case that
their dismissal is judged to be appropriate, the Audit & Supervisory Board will dismiss the
Independent Auditor upon the consent of all Audit & Supervisory Board Members.
Also, in the case that the Audit & Supervisory Board recognizes that it has become difficult for
the Independent Auditor to appropriately execute duties, or if otherwise judged necessary, theAudit & Supervisory Board will submit an agenda item regarding the dismissal or nonrenewal of
the Independent Auditor to the General Meeting of Shareholders.

38(Translation)
5. Resolution on Establishing Systems to Ensure Appropriate Business Operations
In following with the regulations of Article 362, Paragraph 4, Item 6 of the Companies Act,
Paragraph 5 of the same Article, and Article 100, Paragraphs 1 and 3 of the Ordinance for
Enforcement of the Companies Act, MGC resolved in the Board of Directors meeting with respect tosystems to ensure appropriate business operations (Internal Control System). Additionally, the statusof the maintenance and operation of internal controls is being reported to the Board of Directors on a
yearly basis, and in addition to verifying and resolving upon the appropriateness of this resolution,
the Board of Directors also deliberates and resolves upon a basic policy and plans regarding thefollowing year's maintenance and operation of internal controls. The content of internal control
resolutions and operational status during FY2020 are as follows.

(1) Content of Resolution on Systems to Ensure Appropriate Business Operations① Systems for Ensuring Duties of Directors and Employees Are Executed in Compliance with
Laws, Regulations, and Articles of Incorporation
1) MGC shall view compliance as broadly encompassing conformity with laws, regulations, Articles
of Incorporation, and internal rules, as well as the conduct of fair, transparent, and free businessbased on an awareness of corporate responsibility to society, and shall establish MGC Corporate
Behavior Guidelines, Compliance Rules, and MGC Group Code of Conduct.
2) Officer in charge of Compliance shall be appointed and a Compliance Committee chaired by said
Officer shall be established as an organization directly under the President. Compliance
Committee shall investigate compliance violations, and also discuss, formulate and makerecommendation for corrective and preventive measures.
3）In order to ensure that MGC and its Group companies construct, maintain and operate internal
controls appropriately MGC shall establish Basic Rules on Internal Control & Risk Management.
Internal Control & Risk Management Committee shall be chaired by the officer in charge ofInternal Control & Risk Management and shall be established as an organization directly under
the President. In order to ensure its effectiveness Internal Control & Risk Management
Committee shall cooperate with Compliance Committee and Internal Audit Division.
4) In order to detect internal compliance violations and take corrective measures promptly,
Compliance Consultation Desk shall be established as a means of receiving internal reports fromofficers, employees, their families, contractors, business partners, and the like.
5) In order to eliminate anti-social forces, in addition to clarifying its firm stance against such forces
in MGC Corporate Behavior Guidelines and MGC Group Code of Conduct, MGC shall promote
its policies in each relevant department.
6) An Internal Audit Division shall be established to conduct internal audits pursuant to the Internal
Audit Rules in addition to auditing by Audit & Supervisory Board Members and by Independent
Auditors.
7) MGC shall issue MGC Compliance Handbook and distribute to officers and employees to ensure
their understanding of the compliance system, as well as cultivate awareness of compliancethrough education and training.

39

(Translation)② Systems for Ensuring Efficient Execution of Duties by Directors
1) MGC shall separate the decision-making, supervision, and business execution functions of the
management and implement the Executive Officer system for expeditious decision-making andbusiness execution. At the same time, in the operating divisions to achieve efficient business
management accountability for performance shall be clarified.
2) In order to make decisions on matters that have material effect on MGC based on multifaceted
considerations, a Management Council shall be established to deliberate on management policies
and an Operations Council shall be established to deliberate on specific execution plans.
3) Organization Regulations, Segregation of Duties Rules, and Rules Defining Extent of Authority
shall be established to clarify the duties and authorities of Directors to ensure efficient andappropriate execution of duties.
4) Performance shall be monitored based on numerical targets clarified through the Group’s
medium-term management plan, annual budget, and the like.
③ System for Archiving and Managing Information on Execution of Duties by Directors
Information pertaining to the execution of duties by Directors shall be archived and managed inaccordance with the Document Control Procedures and other internal rules.

④ Rules and Other Systems for Managing Risk of Loss
1) MGC shall establish Internal Control & Risk Management Rules in order to understand andappropriately manage business risks.
2) Internal Control & Risk Management Committee shall identify the status of risk management andprovide supervision and instructions on prioritizing risks and devising reduction measures.
3) Being a chemical manufacturer, MGC shall engage in responsible care (RC) activities as avoluntary undertaking to ensure environmental protection and safety through the life cycle ofchemicals from production to disposal.
⑤ System for Ensuring Appropriate Execution of Business by MGC Group
While valuing the autonomous management of all Group companies and clarifying themanagerial accountability of its Board of Directors, MGC has established the following systems
that include the maintenance of various regulations to ensure the appropriate execution ofbusiness within the MGC Group.
Also regarding the appropriate execution of business within the MGC Group, companies within
the Group are controlled through methods including the assignment of officers and the exercise
of voting rights as required of the nature of the business, degree of importance, etc.
・ In addition to establishing departments responsible for items relating to Group management
as well as divisions that supervise individual Group companies, regulations such as Rules on
Subsidiaries and Affiliates are maintained and a reporting system is created in order toreceive regular and emergency reports from each of the Group companies.
・ Regarding Internal Audit Rules, Group companies are also subject to internal audits. Also,
40

(Translation)

regarding Basic Rules on Internal Control & Risk Management, risk management conductedby Group companies are also subject to these rules, and instruction and education is carriedout so that Group companies will maintain and improve appropriate risk management
systems.
・ MGC establishes MGC Corporate Behavior Guidelines and MGC Group Code of Conduct asbasic policies for the entire Group and seeks from each Group company the maintenance ofcompliance structures that meet them. Also, MGC's Compliance Consultation Desk is alsoavailable to the officers and employees of each Group companies, as well as their families,
contractors, business partners, etc.
・ Through medium-term management plan, annual budget, etc. of Group companies, MGC
clarifies each company's performance goals and conducts performance management based onthese goals. Regarding important business activities performed by Group companies, MGC's
supervisory division ensures appropriate decision-making through management discussions,etc.
⑥ Systems for Ensuring Effective Auditing of Audit & Supervisory Board Members
1) Matters Related to Employees Assisting with Audit & Supervisory Board Members’ Duties
Employees shall be assigned to assist Audit & Supervisory Board Members with their duties
pursuant to consultations with Audit & Supervisory Board Members.
2) Matters Related to Independence from Directors of Employees Assisting with Audit &Supervisory Board Members’ Duties
Employees assigned to assist with the duties of Audit & Supervisory Board Members shallengage full time in said assignment and shall not be subject to orders and instructions from
Directors. The prior consent of the Audit & Supervisory Board is required for their transfer,appraisal, and disciplinary punishment.
3) Matters related to the ensuring of the effectiveness of orders given to employees who assist Audit& Supervisory Board Members in their duties
It is made clear that employees who assist Audit & Supervisory Board Members in their duties
are to obey instructions given to them by Audit & Supervisory Board Members, and employees
who possess the aptitude for such duties are nominated.
4) Matters Related to Reports from Directors and Employees to Audit & Supervisory Board
Membersi) In the event Directors or employees find violations of laws and regulations or facts and thelike that may cause significant damage to MGC, they must report said violations, facts, andthe like to the Audit & Supervisory Board Members in accordance with laws, regulations,
Compliance Rules, and other internal rules.
ii) Directors and employees must report regularly, and promptly in the case of important matters,on the execution status of business operations including internal control of MGC andsupervised Group companies, risk management and implementation of compliance to the
Audit & Supervisory Board Members, as well as promptly conduct investigations and provide
reports in the event Audit & Supervisory Board Members request investigations and reports
concerning these status.
iii) Directors, Audit & Supervisory Board Members, and employees of Group companies will,based on laws and regulations, quickly conduct surveys and deliver reports in the case that areport is demanded from Audit & Supervisory Board Members.

41

(Translation)iv) Compliance Committee must promptly report to Audit & Supervisory Board Members thecontent of consultations and reports involving MGC or Group companies received throughCompliance Consultation Desk.
5) Matters related to the treatment of individuals who make reports, etc. to Audit & Supervisory
Board Members
Individuals responsible for aforementioned reports and surveys as well as those who work
together with them, etc. shall not be subject to work reassignment, discrimination, or otherunfavorable treatment as a result of that action, and knowledge of this prohibition will be madewell-known.
6) Matters related costs, etc., resulting from the execution of Audit & Supervisory Board Members'
dutiesi) In order to defray costs that occur as the result of the execution of Audit & Supervisory Board
Members' duties, an appropriate budget shall be established each fiscal year based on
projected activities.
ii) If a request for prepayment or settling of accounts regarding costs necessary for the executionof Audit & Supervisory Board Members' duties is received, MGC shall promptly comply.
iii) Even in cases where costs incurred as the result of the execution of Audit & Supervisory
Board Members' duties exceed the amount budgeted for each fiscal year, Audit & Supervisory
Board Members and the related Directors shall meet and as a rule make considerations to
respond to the necessity of those costs.
7) Other Systems for Ensuring Effective Auditing of Audit & Supervisory Board Membersi) Representative Directors shall arrange for regular exchange of views with Audit &Supervisory Board Members. Further, the Internal Audit Division and the Independent
Auditor shall communicate and deliberate with Audit & Supervisory Board Members toensure the effectiveness of Audit & Supervisory Board Members’ operations.
ii) Audit & Supervisory Board Members may attend Board of Directors Meetings and otherimportant meetings in order to understand the decision making status regarding importantmatters and the execution status of business operations, in addition to reviewing important
documents and requesting explanations of Directors and employees on the execution ofbusiness operations.
iii) In the case that the Audit & Supervisory Board requests the use of independent external
specialists, MGC shall bear those costs, excepting cases where their use is deemed notnecessary to the execution of Audit & Supervisory Board Members' duties.

(2) Summary of Operational Status of Systems to Ensure Appropriate Business Operations① Systems for Ensuring Duties of Directors and Employees Are Executed in Compliance with
Laws, Regulations, and Articles of Incorporation
1) MGC seeks to conduct CSR activities and achieve thorough compliance, by emphasizing
publication of the MGC Corporate Behavior Guidelines Directives for Corporate Actions etc. bydelivering it through the President’s message.
2) MGC revised the MGC Corporate Behavior Guidelines in February 2020 and the MGC Group
Code of Conduct in March 2020 and the MGC Compliance Handbook on April 1, 2020 based onchanges etc. in social demand since the last revision.
3) Internal Control & Risk Management Committee met three times during the fiscal year underreview, and deliberated the readiness and operational status of internal controls. Furthermore,42

(Translation)

after being approved by the Board of Directors, information concerning basic policies and plans
relating to internal controls deliberated by the Committee is spread to MGC officers, employees,
and all Group Companies.
4）Compliance Committee met two times during the fiscal year under review, deliberated specificitems. The Compliance Consultation Desk, in addition to the internal desk, has had an external
desk established as well, in order to lower the hurdle in making reports.
5) Internal audits are performed based on audit plan, and measures are undertaken to maintain theproper performance of duties. Items designated by internal audits are responded to within
timeframes established by the audited division.
6）To eliminate anti-social forces, in addition to the creation of a response manual and spreading
information internally, when entering into contracts with outside parties, MGC seeks a pledge
that the party is not an anti-social force, and contracts can be nullified, etc. if it is later
determined that the party is an anti-social force.
② Systems for Ensuring Efficient Execution of Duties by Directors.
1) MGC is working to reinforce the management execution system and strengthen its governancethrough clearly defining the functions and responsibilities of management, by placing an
Executive Officer system that makes prompt decision-making possible, and allows the Board of
Directors to concentrate on making decisions on the most important business matters and conduct
supervision over business execution.
Regarding matters that have material effect on MGC, decisions are made via considerations
through multifaceted deliberations at a Management Council that deliberates on management
policies and at an Operations Council that deliberates on specific execution plans, and the adviceof attorneys and other professionals is received as needed.
2) Based on the medium-term management plan and annual budget, performance is regularly
monitored.
3) Duties and authorities of Directors, officers and employees are reviewed on a yearly basis towork toward ensuring efficient and appropriate execution of duties.
③ System for Archiving and Managing Information on Execution of Duties by Directors
Information pertaining to the execution of duties by Directors is archived and managed inaccordance with the Document Control Procedures and other internal rules through the creation ofmanagement registers and their archival for an established length of time.
④ Rules and Other Systems for Managing Risk of Loss
1) Standards, Operational Rules, etc. have been established under Basic Rules on Internal Control &Risk Management as systems to manage risk during ordinary periods and emergencies.
Additionally, as mentioned previously, Internal Control & Risk Management Committee met
three times during the fiscal year under review, providing supervision and instructions on thestatus of risk management.
In addition, to prepare for the continuing COVID-19, the Crisis Countermeasures Headquarters
was established continuingly based on Internal Control & Risk Management regulations, and weare taking measures to prevent infection, such as executing work from home at head office,various infection prevention measures at plants etc.
2) In addition to voluntary responsible care (RC) activities, in accordance with policies establishedat environmental safety meetings attended by all Directors, MGC strives to protect theenvironment and maintain safety, and continuously repeats the PDCA cycle for the protection of
the environment and maintenance of safety, including confirming the progress of activities withinternal audits.

43

(Translation)⑤ System for Ensuring Appropriate Execution of Business by MGC Group
1) Based on regulations such as Rules on Subsidiaries and Affiliates, Group companies aremanaged through supervisory divisions, and regular reports on management status, etc. arereceived from Group companies. Additionally, a reporting system has been created for times of
emergency. While a medium-term management plan and annual budget that include Group
companies are formulated and performance management is being conducted, MGC aims toensure appropriate decision-making through the assignment of officers, etc.
2) To ensure the appropriate execution of business within MGC Group companies and enhance risk
management, the Internal Audit Division systematically conducts internal audits at major Group
companies, and through a supervisory division Internal Control & Risk Management Committee
strives to maintain and enhance each Group company’s risk management system. Additionally,
MGC states that the Compliance Consultation Desk is available for use by all individuals
involved in the Company Group's business activities.
⑥ Systems for Ensuring Effective Auditing of Audit & Supervisory Board Members
1) Aside from attending meetings of the Board of Directors, Executive Officers, and other important
committees, Audit & Supervisory Board Members exchange opinions with Representative
Directors and the Board of Directors, receives reports on business execution from eachdepartment, and periodically conducts onsite audits of key subsidiaries. Furthermore, Audit &Supervisory Board Members strive to enhance the effectiveness of audits, including by working
together and exchanging opinions with Independent Auditor and Internal Audit Division.
2) Through various committees related to Internal Control & Risk Management and Compliance,
reports are provided to Audit & Supervisory Board Members, on the status of control, etc. Also,
consultations and reports discussed with Compliance Consultation Desk are quickly reported, andit has come to be well understood that unfavorable treatment of individuals who make reports is
prohibited.
3) Staff dedicated to audit functions based on instructions from Audit & Supervisory Board
Members are placed, and all costs required for business activity audits are defrayed.

6. Policy on Appropriation of Retained Earnings, etc.
The MGC Group places the improvement of corporate value as a challenge on the management of
the greatest importance. Based on the view that the improvement of corporate value will lead to thebenefits of all stakeholders including shareholders, the MGC Group takes into consideration
investment and lending plans, financial health, and future business trends in order to realize futurebusiness growth, and works to achieve a balanced allotment of retained earnings and returns toshareholders. Retained earnings are allotted to be used as investment and lending funds for businessexpansion and growth and to strengthen the corporate structure. Regarding dividends, the decision tocontinue steady dividends is made taking into account trends in business results, while working to
improve capital efficiency and enhance returns to shareholders through implementing flexible
purchase of treasury shares in consideration of the levels of retained earnings and shareholder return,while MGC will set a new total payout ratio of 40% as a target for medium-term shareholder returns.
The year-end dividend payout for FY2020 was ¥35. Since the interim dividend payout was ¥35, theannual dividend for FY2020 is ¥70 per share, same amount as FY2019, which resulted in 40.4% of
dividend payout ratio on a consolidated basis.
Regarding dividends for the next fiscal year, the interim dividend is planned to be ¥35 per share,
while the year-end dividend is planned to be ¥35 per share.

44

(Translation)
Consolidated Balance Sheet(As of March 31, 2021)
Account item
(Assets)
Total current assets
Cash and deposits
Notes and accounts receivable-trade
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total non-current assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net

Land
Lease assets, net
Construction in progress
Other

Amount402,141
101,785
159,018
269
63,887
13,24244,14520,209△416
434,223
249,931
92,274
81,113
40,774
2,272
24,766
8,729

Account item
(Liabilities)
Total current liabilities
Notes and accounts payable-trade
Short-term borrowings
Accrued expenses
Lease obligations
Income taxes payable
Provision for bonuses
Provision for bonuses for directors (and otherofficers)

Provision for environmental measures

Provision for business restructuring

Asset retirement obligations
Other
Total non-current liabilities
Bonds payable
Long-term borrowings
Lease obligations
Deferred tax liabilities(Millions of yen)Amount167,947
75,30840,087
20,225
543
5,809
5,770
35
145
421
0
19,59987,00620,00036,202
1,643
11,828

10,499Provision for retirement benefits
directors (and other officers)

for

217

Goodwill
Lease assets

4,914
5

Provision for environment measures

Provision for business restructuring

3760

Software

2,456

Provision forwithdrawalbusiness

142

Other provision
Retirement benefit liability
Asset retirement obligations
Other
Total liabilities(Net assets)
Total shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total accumulated othercomprehensive income
Valuation difference on
available-for-sale securities
Deferred gains or losses on hedges

393
7,150
5,113
3,550
254,953

Total Intangible assets

Other
Total investments and other assets
Investments securities
Long-term loans receivable
Deferred tax assets
Retirement benefit asset
Other
Allowance for doubtful accounts

3,123
173,792
158,718
5,012
3,145
1,396
6,064
△545

loss

on

Foreign currency translation adjustments
Remeasurements of defined benefit plans

Total assets

836,364

Non-controlling interests
Total net assets
Total liabilities and net assets

45

514,499
41,97034,301
459,790△21,562
9,765
14,419△618△3,542△494
57,146
581,411
836,364

(Translation)

Consolidated Statement of Income(From April 1, 2020 to March 31, 2021)
Account item

(Millions of yen)Amount595,718454,760

Net sales
Cost of sales

140,958
96,448Gross profit
Selling, general and administrative expenses
Operating income

44,510Non-operating income
Interest and dividend income
Other

2,754
9,468

12,222

800
5,692

6,492

Non-operating expenses
Interest expenses
Other
Ordinary income

50,240Extraordinary income
Gain on sales of investment securities
Insurance claim income
Compensation income
Subsidy income

1,800
257
152
128

2,338

1,695
984
307
287
242
107

3,626

Extraordinary loss
Impairment loss
Loss on remittance fraud of subsidiary
Loss compensation
Loss on withdrawal from business
Loss on liquidation of subsidiaries
Loss on valuation of investment securities
Profit before income taxes

48,951

Income taxes-current

10,180

Income taxes-deferred

△611

9,568

Net income

39,383

Profit attributable to non-controlling interests

3,312

Profit attributable to owners of parent

36,07046

(Translation)
Non-consolidated Balance Sheet(As of March 31, 2021)
Account item
(Assets)
Total current assets
Cash and deposits
Notes receivable-trade
Accounts receivable-trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Prepaid expenses
Short-term loans receivable
Accounts receivable-other
Other
Allowance for doubtful accounts
Total noncurrent assets

Amount232,20239,666
145
105,374
30,9029,140
26,041
1,714
14,7383,401
3,665△2,588

Buildings, net
Structures, net
Machinery and equipment, net
Vehicles, net
Tools and appliances, net
Land
Lease assets, net
Construction in progress
Total intangible assets
Goodwill
Patent right
Software
Other
Total investments and other assets
Investments securities

237,431104,036
23,425
12,531
34,57578
4,728
18,329200
10,164
1,336
13
50
1,246
25
132,059
38,263

Stocks and investments in capital ofsubsidiaries and affiliates

78,212Long-term loans receivable
Long-term prepaid expenses
Other
Allowance for doubtful accounts

13,328
743
1,599
△88

Total property, plant and equipment

Account item
(Liabilities)
Total current liabilities(Millions of yen)AmountElectronically recorded obligations-operating

Accounts payable-trade
Short-term borrowings
Lease obligations
Accrued payable-other
Income taxes payable
Accrued expenses
Deposits received
Provision for bonuses
Provision for environmental measures
Provision for business restructuring

Other
Total non-current liabilities
Bonds payable
Long-term borrowings
Lease obligations
Provision for retirement benefits
Provision for environment measures
Provision for business restructuring
Provision for loss on withdrawal from business

Asset retirement obligations
Deferred tax liabilities
Other
Total liabilities(Net assets)
Total shareholders’ equity
Share capital
Total capital surpluses
Capital surplus
Other retained earnings
Total earned surpluses
Legal retained earnings
Other retained earnings
Reserve for mine prospecting
Reserve for tax purpose reduction entry
of non-current assets

General reserve
Retained earnings brought forward
Treasury shares
Total valuation and translation adjustments

Total assets

469,634

Valuation difference on
available-for-sale securities
Total net assets
Total liabilities and net assets

47

113,590266
46,27833,22986
9,900
494
16,916
347
2,969
145
421
2,532
49,56520,00013,764
115
3,469
3
760
142
3,563
5,954
1,790
163,155
293,972
41,97035,68335,66814
237,881
6,999
230,8822,038
2,823
76,500149,519△21,562
12,506
12,506306,478
469,634

(Translation)

Non-consolidated Statement of Income(From April 1, 2020 to March 31, 2021)(Millions of yen)AmountAccount item
Net sales

344,898

Cost of Sales

282,185

Gross profit

62,712

Selling, general and administrative expenses

43,610Operating profit

19,101Non-operating income
Interest and dividend income

9,114

Other

3,336

12,450Non-operating expenses
Interest expenses

202

Other

4,906

Ordinary income

5,109
26,443Extraordinary income
Gain on sales of investment securities

1,800

Gain on sale of shares of subsidiaries and associates

274

Compensation income

152

2,227

Extraordinary loss
Impairment losses

1,695

Loss compensation

307

Loss on withdrawal from business

287

Income before income taxes

2,291
26,379

Income taxes-current

2,530

Income taxes-deferred△117

Net income

2,412
23,96648

Independent Auditors’ Audit Report on Consolidated Financial Statements
INDEPENDENT AUDITORS’ REPORTMay 18, 2021
To: The Board of Directors
Mitsubishi Gas Chemical Company, Inc.
Crowe Toyo & Co.
Tokyo Office
Wataru Kobayashi, CPA
Designated Partner,
Engagement Partner
Hiroaki Izawa, CPA
Designated Partner,
Engagement Partner
Takayuki Kawakubo, CPA
Designated Partner,
Engagement Partner
OpinionWe have audited the consolidated financial statements of namely, the consolidated balance sheet, theconsolidated statement of income, the consolidated statement of changes in net assets and the notes to consolidated
financial statements of Mitsubishi Gas Chemical Co., Inc. (the Company) from April 1, 2020 to March 31, 2021, in
accordance with paragraph 4, Article 444 of the Companies Act.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, thefinancial position of the Company and consolidated subsidiaries and the results of its operations for the period
covered thereby in conformity with accounting principles generally accepted in Japan.
Basis for the Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibility
under the auditing standards is stated in “Auditor’s Responsibility for the Audit of the Consolidated Financial
Statements.” We are independent of the Company and its consolidated subsidiaries in accordance with the provisions
related to professional ethics in Japan, and are fulfilling other ethical responsibilities as an auditor. We believe that theaudit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management, Audit & Supervisory Board Members and the Audit & Supervisory Board for theConsolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements inaccordance with accounting principles generally accepted in Japan, and for designing and operating such internal
control as management determines is necessary to enable the preparation and fair presentation of the consolidated
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing whether it isappropriate to prepare the consolidated financial statements in accordance with the premise of a going concern, andfor disclosing matters relating to going concern when it is required to do so in accordance with accounting principles
generally accepted in Japan.
Audit & Supervisory Board Members and the Audit & Supervisory Board are responsible for monitoring theexecution of Directors’ duties related to designing and operating the financial reporting process.
Auditor’s Responsibility for the Audit of the Consolidated Financial Statements
Our responsibility is to obtain reasonable assurance about whether the consolidated financial statements as awhole are free from material misstatement, whether due to fraud or error, and to express an opinion on the
consolidated financial statements from an independent standpoint in an audit report, based on our audit.
Misstatements can occur as a result of fraud or error, and are deemed material if they can be reasonably expected to,either individually or collectively, influence the decisions of users taken on the basis of the consolidated financial
statements.
We make professional judgment in the audit process in accordance with auditing standards generally acceptedin Japan, and perform the following while maintaining professional skepticism.
・ Identify and assess the risks of material misstatement, whether due to fraud or error. Design andimplement audit procedures to address the risks of material misstatement. The audit procedures shall be selected andapplied as determined by the auditor. In addition, sufficient and appropriate audit evidence shall be obtained toprovide a basis for the audit opinion.
・ In making those risk assessments, the auditor considers internal control relevant to the entity’s audit inorder to design audit procedures that are appropriate in the circumstances, although the purpose of the audit of theconsolidated financial statements is not to express an opinion on the effectiveness of the entity’s internal control.
・ Assess the appropriateness of accounting policies adopted by management and the method of theirapplication, as well as the reasonableness of accounting estimates made by management and the adequacy of related
notes.
・ Determine whether it is appropriate for management to prepare the consolidated financial statements on

49

(Translation)
the premise of a going concern and, based on the audit evidence obtained, determine whether there is a significant
uncertainty in regard to events or conditions that may cast significant doubt on the entity’s ability to continue as agoing concern. If there is a significant uncertainty concerning the premise of a going concern, the auditor is required
to call attention to the notes to the consolidated financial statements in the audit report, or if the notes to theconsolidated financial statements pertaining to the significant uncertainty are inappropriate, issue a modified opinion
on the consolidated financial statements. While the conclusions of the auditor are based on the audit evidence
obtained up to the date of the audit report, depending on future events or conditions, an entity may be unable tocontinue as a going concern.
・ Besides assessing whether the presentation of and notes to the consolidated financial statements are inaccordance with accounting principles generally accepted in Japan, assess the presentation, structure, and content of
the consolidated financial statements including related notes, and whether the consolidated financial statements fairly
present the transactions and accounting events on which they are based.
・ Obtain sufficient and appropriate audit evidence regarding the financial information of the Company andits consolidated subsidiaries in order to express an opinion on the consolidated financial statements. The auditor is
responsible for instructing, supervising, and implementing the audit of the consolidated financial statements, and issolely responsible for the audit opinion.
The auditor reports to Audit & Supervisory Board Members and the Audit & Supervisory Board regarding thescope and timing of implementation of the planned audit, material audit findings including material weaknesses ininternal control identified in the course of the audit, and other matters required under the auditing standards.
The auditor reports to Audit & Supervisory Board Members and the Audit & Supervisory Board regarding theobservance of provisions related to professional ethics in Japan as well as matters that are reasonably considered tohave an impact on the auditor’s independence and any safeguards that are in place to reduce or eliminate obstacles.
Conflicts of Interest
We have no interest in the Company which should be disclosed in compliance with the Certified Public
Accountants Act.

50

(Translation)
Independent Auditors’ Audit Report
INDEPENDENT AUDITORS’ REPORTMay 18, 2021
To: The Board of Directors
Mitsubishi Gas Chemical Company, Inc.
Crowe Toyo & Co.
Tokyo Office
Wataru Kobayashi, CPA
Designated Partner,
Engagement Partner
Hiroaki Izawa, CPA
Designated Partner,
Engagement Partner
Takayuki Kawakubo, CPA
Designated Partner,
Engagement Partner
OpinionWe have audited the financial statements of namely, the balance sheet, the statement of income, the statement ofchanges in net assets, the notes to financial statements and the supporting schedules of Mitsubishi Gas Chemical Co., Inc.
(the Company) for the 94th business year from April 1, 2020 to March 31, 2021, in accordance with item 1, paragraph 2,
Article 436 of the Companies Act.
In our opinion, the financial statements and the accompanying supplementary schedules referred to above present
fairly, in all material respects, the financial position of the and the results of its operations for the year then ended inconformity with accounting principles generally accepted in Japan.
Basis for the Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibility under
the auditing standards is stated in “Auditor’s Responsibility for the Audit of the Financial Statements.” We are independentof the Company in accordance with the provisions related to professional ethics in Japan, and are fulfilling other ethicalresponsibilities as an auditor. We believe that we have obtained sufficient and appropriate audit evidence to provide abasis for our audit opinion.
Responsibilities of Management, Audit & Supervisory Board Members and the Audit & Supervisory Board for the
Financial Statements and the Accompanying Supplementary Schedules
Management is responsible for the preparation and fair presentation of the financial statements and theaccompanying supplementary schedules in accordance with accounting principles generally accepted in Japan, and fordesigning and operating such internal control as management determines is necessary to enable the preparation and fairpresentation of the financial statements and the accompanying supplementary schedules that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements and the accompanying supplementary schedules, management is responsible
for assessing whether it is appropriate to prepare the financial statements and the accompanying supplementary schedulesin accordance with the premise of a going concern, and for disclosing matters relating to going concern when it is required
to do so in accordance with accounting principles generally accepted in Japan.
Audit & Supervisory Board Members and the Audit & Supervisory Board are responsible for monitoring theexecution of Directors’ duties related to designing and operating the financial reporting process.
Auditor’s Responsibility for the Audit of the Financial Statements and the Accompanying Supplementary Schedules
Our responsibility is to obtain reasonable assurance about whether the financial statements and the accompanying
supplementary schedules as a whole are free from material misstatement, whether due to fraud or error, and to express an
opinion on the financial statements and the accompanying supplementary schedules from an independent standpoint in anaudit report, based on our audit. Misstatements can occur as a result of fraud or error, and are deemed material if they canbe reasonably expected to, either individually or collectively, influence the decisions of users taken on the basis of thefinancial statements and the accompanying supplementary schedules.
We make professional judgment in the audit process in accordance with auditing standards generally accepted inJapan, and perform the following while maintaining professional skepticism.
・ Identify and assess the risks of material misstatement, whether due to fraud or error. Design and implement
audit procedures to address the risks of material misstatement. The audit procedures shall be selected and applied asdetermined by the auditor. In addition, sufficient and appropriate audit evidence shall be obtained to provide a basis for theaudit opinion.
・ In making those risk assessments, the auditor considers internal control relevant to the entity’s audit in order todesign audit procedures that are appropriate in the circumstances, although the purpose of the audit of the financial
statements and the accompanying supplementary schedules is not to express an opinion on the effectiveness of the entity’s
internal control.
・ Assess the appropriateness of accounting policies adopted by management and the method of their application,
as well as the reasonableness of accounting estimates made by management and the adequacy of related notes.

51

(Translation)
・ Determine whether it is appropriate for management to prepare the financial statements and the accompanying
supplementary schedules on the premise of a going concern and, based on the audit evidence obtained, determine whether
there is a significant uncertainty in regard to events or conditions that may cast significant doubt on the entity’s ability tocontinue as a going concern. If there is a significant uncertainty concerning the premise of a going concern, the auditor isrequired to call attention to the notes to the financial statements and the accompanying supplementary schedules in theaudit report, or if the notes to the financial statements and the accompanying supplementary schedules pertaining to thesignificant uncertainty are inappropriate, issue a modified opinion on the financial statements and the accompanying
supplementary schedules. While the conclusions of the auditor are based on the audit evidence obtained up to the date of
the audit report, depending on future events or conditions, an entity may be unable to continue as a going concern.
・ Besides assessing whether the presentation of and notes to the financial statements and the accompanying
supplementary schedules are in accordance with accounting principles generally accepted in Japan, assess thepresentation, structure, and content of the financial statements and the accompanying supplementary schedules including
related notes, and whether the financial statements and the accompanying supplementary schedules fairly present thetransactions and accounting events on which they are based.
The auditor reports to Audit & Supervisory Board Members and the Audit & Supervisory Board regarding the scope
and timing of implementation of the planned audit, material audit findings including material weaknesses in internal
control identified in the course of the audit, and other matters required under the auditing standards.
The auditor reports to Audit & Supervisory Board Members and the Audit & Supervisory Board regarding theobservance of provisions related to professional ethics in Japan as well as matters that are reasonably considered to havean impact on the auditor’s independence and any safeguards that are in place to reduce or eliminate obstacles.
Conflicts of Interest
We have no interest in the Company which should be disclosed in compliance with the Certified Public Accountants Act

52

(Translation)

Audit & Supervisory Board's Audit Report
AUDIT REPORT
We, the Audit & Supervisory Board, deliberated and prepared this audit report as follows on theexecution of duties by MGC Directors during the 94th business term from April 1, 2020 to March 31,
2021, based on the audit report prepared by each Audit & Supervisory Board Member:
1. Method and Description of Audit by Audit & Supervisory Board Members and Audit by Audit &Supervisory Board(1) We determined the audit policy, audit duty assignments and the like, received reports from each
Audit & Supervisory Board Member on individual audit status and results, received reports fromthe Directors and Independent Auditor on the status of the execution of their duties, andrequested explanation as necessary.
(2) Each Audit & Supervisory Board Member conducted the audit by following method as well as
we made efforts to collect information and enhance the auditing environment by communicatingwith the Directors, each department, Internal Audit Division, other employees, and others inaccordance with the Audit & Supervisory Board Members’ Audit Standards, audit policy, audit
duties, and the like as determined by the Audit & Supervisory Board. Implementation of theinitial audit plan involved making use of an online meeting platform for certain aspects of theaudit to avoid transmission of COVID-19.
i) We attended the Board of Directors’ Meetings and other important meetings, received reports
from Directors, employees and others on the status of execution of their duties, requested
explanation as necessary, examined important decision-rendering documents and otherdocuments, and investigated the state of activities and assets at the head office and principal
business offices. With respect to subsidiaries, we communicated and exchanged information
with the division controlling each subsidiary in MGC, the directors and Audit & Supervisory
Board Members of subsidiaries, requested business reports therefrom as necessary, andinvestigate the state of activities and assets.
ii) With respect to the contents of resolutions of the Board of Directors regarding thedevelopment of systems necessary to ensure that the execution of duties by directors complies
with laws and regulations and the articles of incorporation, and other systems prescribed by
Article 100, paragraph 1 and 3 of Ordinance for Enforcement of the Companies Act assystems necessary to ensure the properness of operations of group of enterprises consisting ofstock company and its subsidiaries, and the systems developed based on such resolutions(internal control systems), as stated in the business report, we periodically received reports
from the Directors, employees and others, requested explanations as necessary and madeopinions, regarding the readiness and operational status of such systems.
iii) We monitored and verified that the Independent Auditor maintained its independence andperformed its auditing duties adequately, as well as received reports from the Independent
Auditor on the performance status of its duties and requested explanations as necessary. We
received a notice from the Independent Auditors to the effect that structures for ensuring that
duties are appropriately performed (matters stipulated in the items under Article 131 of theRegulations on Corporate Accounting) were being improved pursuant to Quality Management
Standards for Auditing (October 28, 2005; Business Accounting Council) and requested
explanations as necessary.
The business report and its supplementary schedules for this business term, the non-consolidated
financial statements (non-consolidated balance sheet, non-consolidated statement of income,non-consolidated statement on changes in net assets and notes to non-consolidated financial statements),
their supplementary schedules, and consolidated financial statements (consolidated balance sheet,consolidated statement of income, consolidated statement on changes in net assets and notes to theconsolidated financial statements) for this business term were examined based on the foregoing method.
2. Results of Audit(1) Audit Result of Business Report, etc.
i) The business report and its supporting schedules are recognized as correctly presenting thestate of MGC in accordance with the laws, regulations and the Articles of Incorporation.
ii) No dishonest acts or material violations of laws, regulations or the Articles of Incorporation

53

(Translation)
were recognized in connection with the performance by Directors of their duties.
iii) We acknowledge that the Board of Directors’ resolutions with respect to the internal control
systems are appropriate. We also acknowledge that in terms of the readiness and operation ofsaid systems, continuous improvements are being made and therefore, did not find any matterto be mentioned regarding such internal control systems.
(2) Audit Result of Non-Consolidated Financial Statements and Their Supplementary Schedule
We are of the opinion that the method and results of the audit performed by the Independent
Auditor, Crowe Toyo & Co., are appropriate.
(3) Audit Result of Consolidated Financial Statements
We are of the opinion that the method and results of the audit performed by the Independent
Auditor, Crowe Toyo & Co., are appropriate.
May 25, 2021
Mitsubishi Gas Chemical Company, Inc. Audit & Supervisory Board
Audit & Supervisory Board Member(full-time)(Outside Audit & Supervisory Board Member)
Takashi Kimura
Audit & Supervisory Board Member(full-time)
Katsuhiko Sugita
Audit & Supervisory Board Member(full-time)
Masamichi Mizukami
Outside Audit & Supervisory Board Member
Yasuomi Matsuyama- END -

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