The Information disclosed on the Internet regarding the Convocation
Notice of the 95th Ordinary General Meeting of Shareholders(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

Documents listed above, which should be attached to the convocation notice of the95th ordinary general meeting of shareholders, are disclosed on MGC’s website(https://www.mgc.co.jp/ir/stockinfo/meeting.html) in accordance with laws andregulations and the provisions of Article 15 of the Articles of Incorporation of MGC.

MITSUBISHI GAS CHEMICAL COMPANY, INC.

This document is an attachment to the Notice of the 95th Ordinary General Meeting of Shareholders. This is an unofficialtranslation of the Japanese language original version, and is provided for reference purposes only, without any warranty as toits accuracy or as to the completeness of the information. In the event of any discrepancy between this translation and theJapanese original, The Japanese language original shall prevail. The Company assumes no responsibility for this translation orfor direct, indirect or any other forms of damages arising from this translation.

(Translation)(Stock Acquisition Rights)(1) Matters on stock acquisition rights, etc. granted at the end of this fiscal year in remuneration forthe performance of corporate officers’ duties among which corporate officers holdNo applicable item.
(2) Matters on stock acquisition rights, etc. granted to employees and others during fiscal 2021 inremuneration for the performance of their duties
No applicable item.
(3) Other important matters on stock acquisition rights, etc.
No applicable item.

1

(Translation)（Consolidated Statement of Changes in Net Assets）(From April 1, 2021 to March 31, 2022)(Millions of yen)

Shareholders’ equity

Balance at beginning of
PeriodShare capital

Capital surplus

41,97034,301

Cumulative effects ofchanges in accounting
policies459,790

Treasury shares

Total
shareholders’equityValuationdifference on
available-for-salesecurities△21,562

514,499

14,419△50
41,970

Restated balance

Retainedearnings

Accumulated other comprehensive income

34,301

459,739

Deferred gains orlosses on hedges

Foreign currencytranslation
adjustments

Remeasurementsof defined
benefit plans

Total ofaccumulated othercomprehensive
income△618△3,542

△494

9,765

Noncontrollinginterests
57,146△50△21,562

514,448

Total net
assets581,411△50

14,419△618△3,542

△494

9,765

57,146581,360

Changes during period
Dividends of surplus△16,642△16,642△16,642

Profit attributable toowners of parent

48,29548,29548,295

△5

△5

△5

42

81

81

Purchase of treasury
shares
Disposal of treasury
shares39

Change in scope of
consolidation

441

441

441

Change in scope ofequity method

620

620

620

△0

△0

Change in ownershipinterest of parent
due to transactions
with non-controllinginterests△0

Net changes of items
other than shareholders’equityTotal changes
periodduringBalance at end of period-△3,043291

13,404

1,108

11,761

4,974

16,736-38

32,71536

32,791△3,043291

13,404

1,108

11,761

4,974

49,527

41,97034,339492,455△21,525547,239

11,376

△326

9,861

614

21,526

62,121

630,887

2

(Translation)(Notes to Consolidated Financial Statements)
Notes Related to Important Basis for the Preparation of Consolidated Financial Statements
Matters Related to the Scope of Consolidation
1. Number of consolidated subsidiaries and names of major consolidated subsidiaries, etc.

Number of consolidated subsidiaries: 71
Names of major consolidated subsidiaries:
Japan Finechem Company, Inc., JSP Corporation, JSP International Group Ltd., Samyoung Pure
Chemicals Co., Ltd, MGC Pure Chemicals America, Inc., Taixing MGC Lingsu Co., Ltd., MGC
Filsheet Co., Ltd., Thai Polyacetal Co., Ltd., Mitsubishi Gas Chemical Engineering-Plastics(Shanghai) Co., Ltd., MGC Electrotechno Co., Ltd., MGC Electrotechno (Thailand) Co., Ltd.,
Mitsubishi Gas Chemical Trading Inc., Mitsubishi Gas Chemical Singapore Pte. Ltd., Mitsubishi
Gas Chemical America, Inc. Japan U-Pica Company, Ltd., MGC Terminal Company, Inc., Toho
Earthtech, Inc., MGC Pure Chemicals Singapore Pte. Ltd., and MGC Pure Chemicals Taiwan, Inc.
MGC Ageless Co., Ltd., Global Polyacetal Co., Ltd. and MGC SPECIALTY CHEMICALSNETHERLANDS B.V. have been included in the scope of consolidation, due to its increased
significance.
Nisshin Unyu Co., Ltd., a non-consolidated subsidiary of MGC, merged with MGC Advance
Chemical Inc., having been a consolidated subsidiary of MGC and MGC Engineering Co., Ltd.,
having been a non-consolidated subsidiary of MGC, and changed its trade name to MGC AdvanceCo., Ltd.. As a result, MGC Advance Chemical Inc. has been excluded from the scope of
consolidation, as it was dissolved due to the absorption-type merger, and MGC Advance Co., Ltd.
has been included in the scope of consolidation, due to its increased significance.
JSP Sheet Foam LLC has been excluded from the scope of consolidation due to liquidation.
J-Chemical Inc. is included in the scope of consolidation due to its acquisition of shares. Yutaka
Chemical Corporation has been included in the scope of consolidation due to an increase in its
shareholding ratio following the acquisition of shares of J-Chemical Inc.
Japan Circuit Industrial Co., Ltd. has been excluded from the scope of consolidation, as it was
liquidated.
2. Names, etc., of major non-consolidated subsidiaries

Names of major non-consolidated subsidiaries:
Hubei Lingyong Electronic Materials Co., Ltd.
Reasons for exclusion from scope of consolidation:
Non-consolidated subsidiaries are excluded from the scope of consolidation due to the fact that the
net assets, sales, net income or loss, retained earnings corresponding to MGC’s interest in said
companies are small and do not have a significant impact overall on the consolidated financial
statements.

3

(Translation)

Matters Related to the Equity Method1.

Number and names, etc., of non-consolidated subsidiaries and affiliates not accounted for under theequity method
Number of equity method non-consolidated subsidiary: 0
Number of equity method affiliates:
15
Names of major affiliates:
Japan Saudi Arabia Methanol Co., Inc., Metanol De Oriente, Metor, S.A., Brunei Methanol
Company Sdn. Bhd., Japan Trinidad Methanol Company, Inc., Yuzawa Geothermal Power
Corporation, Mitsubishi Engineering-Plastics Corporation, Korea Engineering Plastics Co., Ltd.,
Thai Polycarbonate Co., Ltd., Tai Hong Circuit Industrial Co., Ltd., Granopt Co., Ltd., Ryoden Kasei
Co., Ltd.
Yuzawa Geothermal Power Corporation has been included in the scope of equity method, due to its
increased significance.

2. Names, etc., of non-consolidated subsidiaries and affiliates not accounted for under equity method

Names of major companies, etc.:(Non-consolidated subsidiaries)
Hubei Lingyong Electronic Materials Co., Ltd.
(Affiliates)
Polyxylenol Singapore Pte. Ltd.
Reasons for not applying the equity method:
The equity method was not applied to these non-consolidated subsidiaries and affiliates since the net
income and loss, retained earnings, and the like corresponding to MGC’s interest in said companies
are small and do not have a significant impact overall on the consolidated financial statements.

Matters Related to Business Year, etc., of Consolidated Subsidiaries
The business years of the consolidated subsidiaries are the same as the consolidated fiscal year with the
exception of MGC Pure Chemicals Singapore Pte. Ltd., MGC Pure Chemicals Taiwan, Inc., and 28 othercompanies. In the case of the foregoing companies, December 31 marks the end of the business year,
and non-consolidated financial statements as of said date are used. However, adjustment required interms of consolidated statements is made with respect to major transactions taking place from January 1
to the end of the consolidated fiscal year.

Matters Related to Accounting Policy
1. Valuation Standard and Method for Securities

Held-to-Maturity securities:
Amortized cost method (straight-line method)
Available-for-sale securities
Securities apart from shares, etc. without market prices:
Market value method (revaluation variances are all
included directly in net assets and costs of sales arecalculated by the moving average method)
Shares, etc. without market prices:Moving average cost method4

(Translation)

2. Valuation Standard and Method for Inventories

Mainly periodic average cost method (The amounts on the balance sheet have been calculated using thecost accounting method of reducing book value based on declining profitability.)
3. Valuation Standard for Derivatives

Mainly market value method
4. Depreciation of Fixed Assets

Property, plant and equipment (except for lease assets): Mainly straight-line method
Intangible fixed assets (except for lease assets):
Straight-line method
The expenses for internal use computer software are amortized by thestraight-line method over the estimated useful life (5 years).
Lease assets:
Finance lease transactions that do not transfer ownership to the lessee
Straight-line method for the duration of the lease period with aremaining balance of zero.
5. Accounting Standards for Reserves

Allowance for doubtful accounts:
Estimated uncollectible amounts are accounted for based on historical loan loss ratios in the case ofgeneral receivables and based on case-by-case examination of collectability in the case of specificreceivables, including doubtful receivables, in preparation against loss from the inability to collecton accounts receivable, loans, and the like.
Provision for bonuses:
Estimated bonus payments for the current consolidated fiscal year are accounted for in preparation
for payment of bonuses to employees.
Provision for business restructuring:A reasonably estimated future loss amount is accounted for in preparation for loss expected to be
incurred in line with the business structure improvement of businesses.
Provision for retirement benefits for directors (and other officers):
MGC and some of its consolidated subsidiaries account for an amount to be paid to Corporate
Officers at the end of the fiscal year pursuant to internal rules in preparation for payment of
retirement and severance benefits to Directors and Executive Officers.
Provision for environment measures:
An estimated amount of disposal and transport costs of polychlorinated biphenyl wastes, based on
the handling cost publicized by Japan Environmental Storage & Safety Corporation, is accounted
for to cover the cost of properly disposing of said chemical waste as required by the Law for
Promotion of Correct Waste Disposal of Polychlorinated Biphenyls.
Provision for loss on business withdrawal
A reasonably estimated amount is accounted for in preparation for loss expected to be incurredfrom business withdrawal.
Provision for loss on business of subsidiaries and associates
An estimated loss amount to be borne by MGC is accounted for in preparation for loss concerning
the business of subsidiaries and associates, in consideration of the financial condition, etc. of thosesubsidiaries and associates.
6.

Accounting standards for revenue and expenses
MGC applies the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31,2020), etc., and recognizes revenue when control of promised goods or services is transferred to acustomer in an amount that reflects the consideration to which the Company expects to be entitled in
exchange for these goods and services.

5(Translation)

7. Hedge Accounting Methods

Hedge accounting methods:
Deferred hedge accounting methods are applied. Also, allocation treatment is applied to exchange
fluctuation risk hedging in cases where requirements are met and “Exceptional accounting” isapplied to interest rate swaps in cases where requirements are met.
Hedging instruments and hedged items:
Forward exchange contracts hedge against accounts receivable and payable denominated in foreign
currencies and forecasted transactions denominated in foreign currency; interest rate swaps hedge
against interest rate transactions involved in borrowings.
Hedging policy:
MGC follows the policy of utilizing hedging instruments in the amount of the actual demand basedon the maximum limit of the derivative transactions and does not enter into derivative transactions
for speculative purposes.
Method of evaluation of effectiveness of hedging:
Comparision is made between market fluctuations of the hedges and or cumulative cash flow
fluctuations, and market fluctuations of the hedging instruments and cumulative cash flow
fluctuations, and effectiveness is evaluated based on the proportion of the amount of fluctuation.
However, effectiveness evaluation is omitted for interest rate swaps applying exceptional accounting.
8. Depreciation Method and Period for Goodwill

Periods for which the effects of investments are generated are estimated for each investment target,
and are depreciated within 20 years using the straight-line method.
9.

Other significant matters for preparing the consolidated financial statements
Recognition of retirement benefit liability
To prepare for the payment of retirement and severance benefits to employees, the amount of accrued
pension liabilities minus pension assets is recorded as retirement benefit liability, based on theestimated amount at the end of the current fiscal year.
MGC has a retirement and severance trust.
In the calculation of estimated retirement and severance benefits, the method for attributing estimatedretirement and severance benefits to the period up to the end of the current fiscal year is based on thebenefit formula standard.
Unrecognized prior service cost is amortized by the straight-line method over a portion (10 years) of
the estimated average remaining service years of employees at the time the cost was incurred.
Unrecognized actuarial gain or loss is amortized mainly by the declining balance method over a
portion (10 years) of the estimated average of remaining service years of employees from the following
fiscal year.
Unrecognized actuarial gain or loss and unrecognized prior service cost are recorded asremeasurements of defined benefit plans in accumulated other comprehensive income under net assets,
after adjustment for tax effects.

Notes on changes in accounting policy
1.

Application of the Accounting Standard for Revenue Recognition, etc.
MGC has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March
31, 2020; hereinafter “Revenue Recognition Standard”) and other standards from the beginning of thecurrent fiscal year. MGC recognizes revenue when control of promised goods or services is transferred
to a customer in an amount that reflects the consideration to which MGC expects to be entitled in
exchange for those goods and services.

6(Translation)

Accordingly, for paid supply transactions where MGC is under a repurchase obligation, whereas MGC
previously recognized revenue from the sale of goods supplied, it now no longer recognizes revenue
from these sales, or the extinguishment of the goods supplied.
Moreover, for transactions where the role of the MGC Group in the sale of products, etc. to customers
is that of an agent, whereas MGC previously recognized the full value of the consideration receivablefrom the customer as revenue, it now only recognizes the net amount after deducting the amount payable
to the supplier of the products, etc. as revenue.
MGC applies the Revenue Recognition Standard, etc. in accordance with the transitional treatment
provided for in the proviso to Paragraph 84 of the Revenue Recognition Standard. The cumulative
impact of retrospectively applying the new accounting policies to prior periods is added to or subtracted
from retained earnings at the beginning of the fiscal year, in order to apply the new accounting policy
from the beginning balance.
As a result, for the current fiscal year, net sales, cost of sales, selling, general and administrative
expenses, and operating income were 34,823 million yen, 34,712 million yen, 79 million yen, and 31
million yen, respectively, lower than without the application of the new accounting policy. Ordinary
income and profit before income taxes were each 3 million yen lower than without the application of
the new accounting policy. In addition, the balance of retained earnings at the start of the fiscal year was
50 million yen lower than without the application of the new accounting policy.
Pursuant to the application of the Revenue Recognition Standard, etc., “notes and accounts receivable trade,” which was presented under “current assets” in the consolidated balance sheet for the previous
fiscal year, has been included in “notes and accounts receivable - trade, and contract assets” from thecurrent fiscal year.
2.

Application of the Accounting Standard for Fair Value Measurement, etc.
MGC has applied the “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30,
July 4, 2019; hereinafter “Fair Value Measurement Standard”) and other standards from the beginningof the current fiscal year, and will prospectively apply the new accounting policies stipulated by the Fair
Value Measurement Standard, etc. in accordance with the transitional treatment provided in Paragraph
19 of the Fair Value Measurement Standard and Paragraph 44-2 of the “Accounting Standard for
Financial Instruments” (ASBJ Statement No. 10, July 4, 2019). Accordingly, for available-for-salesecurities that are shares with market prices, whereas MGC previously applied the fair value method
based on the average market prices, etc. in the month preceding the fiscal closing date, from the current
fiscal year, it applies the fair value method based on market prices, etc. on the fiscal closing date. The
impact of this change on the consolidated financial statements for the current fiscal year is immaterial.

Notes on accounting estimates
1.

Impairment of non-current assets
Amounts recognized in the consolidated financial statements for the current fiscal year:
Property, plant and equipment:¥276,384 million
Intangible assets:¥11,290 million
Impairment loss:¥7,059 million
Non-current assets held by the MGC Group are to be accounted for on the basis of the “AccountingStandard for Impairment of Fixed Assets”
Accordingly, certain assumptions have been made regarding years of remaining economic useful life,
future cash flows, discount rates and other such variables in calculating recoverable amounts used inmeasuring impairment.
Whereas these assumptions are based on best estimates of management, they may be subject to changes
with respect to future uncertainties in terms of economic conditions. Accordingly, any necessary revision7

(Translation)in that regard may could materially affect amounts recognized in the consolidated financial statementsof subsequent fiscal years.

Notes on Consolidated Balance Sheet
1. Collateralized Assets and Secured Debts
Collateralized assets are as follows:(millions of yen)

Notes and accounts receivable - trade, and contract assets
Land
Buildings and structures
Machinery, equipment and vehicles
Investments in securities (Note)
Total

127
3,338
1,354
773
24,30829,903

Note: ¥17,920 million in shares of Brunei Methanol Company Sdn, Bhd., ¥2,380 million in shares of Appi Geothermal Energy
Corporation, ¥2,163 million in shares of Yuzawa Geothermal Power Corporation, as well as ¥1,737 million in bonds and ¥108
million in shares of Fukushima Gas Power Co., Ltd. are collateralized for their respective loans.

Secured debts are as follows:(millions of yen)

Current portion of long-term borrowings
Long-term debt
Total

295
746
1,041

2.

Cumulative depreciation of property, plant and equipment:¥645,396 million
Cumulative depreciation includes cumulative impairment loss on fixed assets.

3.

Reduction entry directly deducted from the acquisition price of property, plant and equipment:¥12,686 million

4.

Guarantees:(Balance of debt guarantee)¥35,809 million(Major guaranteed parties)
CARIBBEAN GAS CHEMICAL LTD.

¥27,612 million

HUBEI LINGYONG ELECTRONIC MATERIALS CO., LTD.

¥2,314 million

KOREA POLYACETAL CO., LTD.

¥2,026 million

Employee¥34 million

Notes on Consolidated Statement on Changes in Net Assets
1.

Matters Related to Issued and Outstanding Shares
Common Stock:
225,739,199 Shares

8

(Translation)

2.

Matters Related to Dividends(1) Dividends Paid
Resolution
Board of Directors’ Meeting;May 26, 2021
Board of Directors’ Meeting;
November 5, 2021

Class of
Stock

Total Amount of
Dividends

Dividendper Share

Common¥7,280 million¥35.00Common¥9,362 million¥45.00Record Date
March 31,2021
September 30,
2021

Effective
Date
June 7,2021
December 6,
2021(2) Dividends for Which Record Date Falls in the Current Consolidated Fiscal Year but Effective
Date Falls in the Following Consolidated Fiscal Year
Resolution

Class of
Stock

Total Amount of
Dividends

Resource

Dividendper Share

Board of Directors’Meeting; May 26, 2022

Common¥7,281million

Retained
Earnings¥35.00RecordDate
March 31,2022

Effective
Date
June 9,2022

Notes on Financial Instruments
1.

Matters Relating to the Conditions of Financial Instruments(1) Policy on Financial Instruments
The MGC Group primarily takes the plans for future cash flow into account when procuring
necessary funds (mainly through bank loans and bond issues). Temporary surplus of funds ismanaged through secure financial assets and short-term working capital is financed through bankloans. The MGC Group uses derivatives for the purpose of mitigating the risks described below anddoes not engage in transactions for speculative purposes.
(2) Contents and Risk of Financial Instruments
Trade notes and accounts receivable are trade receivables, which are subject to the credit risks of thecustomers. Trade notes and accounts payable are trade liabilities due within one year. Although a
portion of the Group’s trade receivables and trade liabilities, being denominated in foreign currencies,
are subject to risks associated with changes in the foreign currency exchange rates, the net positionis basically hedged through the use of forward exchange contracts.
Short-term investments and investments in securities mainly comprise held-to-maturity bonds andstocks of companies with which the Group has business relations, and are subject to risks associatedwith fluctuations of their market prices.
Borrowings, bonds and lease liabilities associated with finance leases are used primarily for
procuring the necessary funds for capital expenditures and working capital. Although a portion ofthese funds, having floating interest rates, is subject to risks associated with fluctuating interest rates,
such risks are hedged through the use of derivative transactions (interest rate swap agreements).
Derivative transactions include forward exchange contracts used for the purpose of hedging against
risks of exchange rate fluctuations of foreign-currency denominated receivables and liabilities, andinterest rate and currency swap contracts used for the purpose of hedging against risks associatedwith the payment of interest and changes in the currency exchange rates of loans.
For methods of hedge accounting, hedging targets and hedging policies, please refer to “Methods ofHedge Accounting” under “Matters Related to Accounting Policy,” stated above.
(3) System of Risk Management for Financial Instruments
1) Management of Credit Risks (risks associated with breach of contract by the customer)
MGC and its consolidated subsidiaries, in accordance with the Rules on the Management of Trade
Receivables, manage their operating receivables by having the Sales Administration Department
at each Division regularly monitor the status of their major customers and keep track of thepayment dates and outstanding balances of each customer, while also enabling early recognition
and mitigation of cases where there is concern for collection due to deteriorating financial

9(Translation)

conditions and other factors. Held-to-maturity bonds, pursuant to the Rules on Investment ofSurplus Funds, are managed as bonds that may be converted into cash at any time.
The maximum risk amount as of the end of current fiscal year has been represented as theConsolidated Balance Sheet Amount of financial assets subject to credit risk.
2) Management of Market Risks (risks associated with changes in exchange and interest rates)
MGC and its consolidated subsidiaries, in accordance with the Financial Rules and the Rules for
the Management of Derivatives, engage in transactions entailing market risks only after thedivision in charge of finances has obtained the approval of the officer in charge or other authorized
decision-making parties.
Risks associated with trade receivables/trade obligations denominated in foreign currencies andsurplus funds that have been monitored on a monthly basis and according to each currency arebasically hedged through the use of forward exchange contracts. Additionally, interest rate andcurrency swap contracts are used to hedge against the risks associated with the payment of interest
and changes in the currency exchange rates of loans.
In terms of securities and investment securities, their fair values and the financial status of theissuers (customers) are monitored on a regular basis; while the holding status of securities
classified in categories other than held-to-maturity bonds are continuously reviewed.
3) Management of Liquidity Risk (risk of not being able to execute payment on payment date)
MGC and its consolidated subsidiaries manage liquidity risks by having the divisions in charge offinances prepare and update cash flow plans, as necessary, and maintain a certain level of liquidity
at hand.
(4) Supplementary Explanation of Matters Relating to the Fair Value of Financial Instruments and Others
Fair values of financial instruments include the values based on market prices, and the values
obtained by reasonable estimates when the financial instruments do not have market prices. Since
certain variable factors are incorporated into such calculations, they may differ when adopting
different assumptions.
2.

Matters Relating to the Fair value of Financial Instruments and Others
The following are the consolidated balance sheet amounts, fair values and differences between them asof March 31, 2022. Shares, etc. without market prices are not included in the table below (see (Note 1)).
Notes on cash are omitted, as are notes on deposits, notes receivable – trade, accounts receivable - tradeand contract assets, notes and accounts payable - trade, short-term borrowings, and accrued expenses, asthese are settled in a short period of time and the balance sheet amount approximates fair value. Notes
are also omitted for investments in partnerships, etc., which are carried on the consolidated balance sheetsat the net value of the equity interest, and for which MGC applies the provisions of Paragraph 27 of
Implementation Guidance on Accounting Standard for Fair Value Measurement (see (Note 2)).
(millions of yen)

(1) Securities and investment securities(2) Bonds payable(3) Long-term borrowings(4) Derivative transactions
1) Derivative transactions not qualifying
for hedge accounting2) Derivative transactions qualifying forhedge accounting

Consolidated
Balance Sheet
Amount33,63620,00046,621

Fair Value

Difference

33,636
19,866
47,465

－
(133)
843

(456)

(456)

－

(48)

(48)

－

(*) Net receivables and liabilities generated through derivative transactions are presented as net amounts and in cases
where the total amount represents a net liability, such amounts have been put in parentheses.

10(Translation)

Notes: 1. Shares, etc. without market prices
Consolidated Balance Sheet Amount¥137,531 million

Unlisted stocks

2．Investments in partnerships, etc., carried at the net value of the equity interest
Consolidated Balance Sheet Amount
Investments in partnerships, etc.
¥284 million

3.

Breakdown of Financial Instruments by Level of Fair Value
The fair value of financial instruments is classified into the following three levels based on theobservability and significance of the inputs used to calculate fair value.
Level 1 fair values: Fair values calculated using (unadjusted) market prices in active markets for
identical assets or liabilities
Level 2 fair values: Fair values calculated using directly or indirectly observable inputs other than thosein Level 1
Level 3 fair values: Fair values calculated using significant unobservable inputs
When multiple inputs that may have a material impact on the calculation of fair value are used, thecalculated fair value is classified at the lowest level of the inputs used.
(1) Financial assets and financial liabilities carried on the consolidated balance sheets at fair value(millions of yen)
Fair ValueClass
Level 1
Level 2
Level 3
Total
Securities and investment securities
Available-for-sale securities
Shares

31,795

Bonds

31,795
1,737

Other

104

Derivative transactions
Derivative transactions not qualifying forhedge accounting
Currency-relatedInterest-related
Derivative transactions qualifying for hedge
accounting
Currency-related

11

1,737
104

(498)

(498)

42

42

(48)

(48)

(Translation)(2) Financial assets and financial liabilities not carried on the consolidated balance sheets at fair value(millions of yen)
Fair ValueClass

Level 1

Bonds

Level 2

Level 3

Total

19,866Long-term borrowings

19,866
47,46547,465

Note: Explanation of the valuation techniques and inputs used to calculate fair value
Securities and investment securities
Shares are valued using prices on securities exchanges. Because shares are traded in active markets,their fair value is classified as Level 1. However, because the markets for bonds are not regarded as
active markets due to the low frequency of transactions, their fair value is classified as Level 2.
Derivative transactions
Fair value is calculated based on the prices provided by MGC’s partner financial institutions, etc., andis classified as Level 2.
Bonds
The fair value of bonds issued by MGC is calculated based on market prices, etc., and is classified as
Level 1.
Long-term borrowings
Fair value is calculated as the present value of the sum of principal and interest amounts, discounted
using the estimated rates for new borrowings, and is classified as Level 2.

Notes on Rental Property
Matters Concerning the Status and Fair Value of Rental Property
1.

Outline of Rental Property
MGC and a portion of its subsidiaries own land and buildings for rent in Tokyo and in other areas.

2.

The Consolidated Balance Sheet Amount of Rental Property, Major Changes Thereof during the Fiscal
Year, the Fair Value Thereof as of the Fiscal Year-end and the Method for Calculation of Fair Value
Consolidated Balance Sheet Amount
Balance as of April 1,
Changes during fiscal
Balance as of March 31,
2021
year
2022
¥10,200 million¥6,314million¥△3,886 million

Fair value as of March
31, 2022¥9,448 million

Notes: 1. The consolidated balance sheet amount is the amount of acquisition cost less cumulative depreciation andcumulative impairment loss.
2. Major changes
Decrease due to Change in scope of consolidation: ¥△3,755 million
3. Method for calculation of fair value
The amount is based primarily on indices including roadside land prices.

3.

Profit or Loss Relating to Rental Property
Profit or loss from rent on rental property:¥230 million

Notes on Per Share Information
Net Assets per ShareNet Income per Share¥2,733.86¥232.1512

(Translation)

Notes on Revenue Recognition
1.

Disaggregation of revenue from contracts with customers
Revenue disaggregated by major goods and services is as follows:(millions of yen)
Specialty
Basic Chemicals
Chemicals
Business Sector
Business Sector

Other(Note)

Adjustment

Total

Natural Gas Chemicals
Segment

219,791－－－

219,791

Aromatic Chemicals
Segment

200,167－－－

200,167

Specialty Chemicals
Segment－

213,908－－

213,908

Information &Advanced Materials
Segment－

71,511－－

71,511Other Business
Segments

－

－

76

△0

76

419,959

285,41976△0705,456

－

－

200

－

200

419,959

285,419277△0705,656

Revenue from contracts
with customers
Other revenue
Net sales to externalcustomers

Note: “Other” includes businesses such as real estate that do not belong to a reportable segment.
2.

Information Fundamental for an Understanding of Revenue Arising from Contracts with Customers
The MGC Group recognizes revenue in an amount that reflects the consideration to which the MGC
Group expects to be entitled in exchange for transferring goods or services to customers, based on thefollowing five-step procedure for revenue recognition.
Step 1: Identify the contract with a customer
Step 2: Identify performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when (or as) performance obligations are satisfied
The main business of the MGC Group is the manufacture and sale of various products in the Basic
Chemicals Business and Specialty Chemicals Business. Revenue from the sale of these products is
recognized at the time of delivery, because MGC considers that, at the time of delivery, the customer
gains control over the product, and MGC has therefore satisfied its performance obligations.
Revenue is estimated as the net consideration promised under the contract with the customer, after
deducting discounts, rebates, returns, etc. Moreover, for transactions where the role of the MGC
Group in the sale of products, etc. to customers is that of an agent, MGC only recognizes the net
amount after deducting the amount payable to the supplier of the products, etc. as revenue.
The consideration under product sales contracts is generally collected within one year after control
over the product is transferred to the customer, and therefore does not include a significant element offinance.

13

(Translation)

3.

Information to Enable an Understanding of the Amount of Revenue for the Current Consolidated Fiscal
Year and the Next Consolidated Fiscal Year Onward(1) Balance of Contract Assets and Contract Liabilities
The balance of contract assets and contract liabilities for the MGC Group is omitted because
the amounts are insignificant and there has been no material change in the amounts. The
amount of revenue recognized in the current fiscal year from performance obligations satisfied(or partially satisfied) in previous periods is also immaterial.
(2) Transaction Price Allocated to Remaining Performance Obligations
MGC has applied practical expediency and omitted presentation of the transaction priceallocated to remaining performance obligations for the MGC Group because there are nomaterial contracts for which the initially expected contract term exceeds one year, with the
exception of royalties based on net sales or usage volumes. Moreover, there are no material
amounts of consideration arising from contracts with customers that are not included in thetransaction price.

Notes on Significant Subsequent Events
Repurchase and Cancellation of Own Shares
At a meeting of the Board of Directors held on May 12, 2022, MGC resolved to repurchase its own
shares, pursuant to Article 459, Section 1 of the Companies Act and to cancel a part of its own sharespursuant to the provisions of Article 178 of the Companies Act.
(1) Reasons for Repurchase and Cancellation of Own Shares
MGC will repurchase and cancel its own shares in order to enhance shareholder returns, improve
capital efficiency and conduct capital management flexibly.
(2) Outline of Repurchase1) Type of shares to be repurchased:
2) Number of shares to be repurchased:
3) Aggregate amount of repurchase price:4) Repurchase period:5) Repurchase method:

Ordinary shares of MGC
Maximum of 3,500,000 shares
Up to JPY 8,000,000,000
From May 13, 2022 to July 29, 2022
Market purchases(3) Outline of Cancellation
1) Type of shares to be cancelled:
2) Number of shares to be cancelled:
3) Number of shares after the cancellation:4) Scheduled cancellation dateOrdinary shares of MGC
3,500,000 shares
222,239,199 shares
July 29, 2022

Other Notes
Amounts less than ¥1 million are rounded off.

- End of Notes to Consolidated Financial Statements -14

(Translation)(Non-Consolidated Statement of Changes in Net Assets)(April 1, 2021 to March 31, 2022)(Millions of yen)

Valuation andtranslation
adjustments

Shareholders’ equity
Capital surplus
Share capital

Balance at beginning of
period41,970Retained earnings

Legal capitalsurplus

Other capitalsurplus

Total capitalsurplus

Legal retained
earnings

Reserve formine
prospecting

35,66814

35,683

6,999

2,038

Reserve for tax
purpose reduction
entry of non-current
assets2,823

Generalreserve

76,500

Cumulative effects ofchanges in accounting
policies
Restated balance

41,97035,66814

35,683

6,999

2,038

2,823

76,500

Valuationdifference on
available-forsale securities

12,506

Total net
assetsRetainedearnings
brought forward

Total retained
earnings

Treasury shares

Total
Shareholders’equity149,519

237,881△21,562

293,972

△395

△395

149,123

237,485△16,642△16,642△16,642△16,642

35,81235,81235,81235,812Other retained earnings△395△21,562

293,577

306,478△395

12,506

306,083

Changes during period
Dividends of surplus
Net income
Provision of reserve for tax
purpose reduction entry of
non-current assets

253

△253

-

－

－

Reversal of reserve for tax
purpose reduction entry of
non-current assets

△156

156

-

－

－

△326

-

－

－

△5

△5

△5

42

81

81

Provision of reserve
for mine prospecting

326

Purchase of treasury
shares
Disposal of treasury
shares39

39

Net changes of items
other than shareholders'equity△2,326△2,326

Total changes during theperiod

-

-

39

39

-

326

96

-

18,747

19,17036

19,246△2,326

16,919Balance at end of period

41,97035,66853

35,722

6,999

2,365

2,920

76,500167,871

256,656△21,525

312,823

10,179323,002

15

(Translation)(Notes to Non-consolidated Financial Statements)
Notes Related to Important Accounting Principles
1.

Valuation Standard and Method for Securities
Interest in Subsidiaries and Affiliates:
Moving average cost method
Other Securities
Securities apart from shares, etc. without market prices:
Market value method (revaluation variances are all
included directly in net assets, and costs of sales arecalculated by the moving average method)
Shares, etc. without market prices:Moving average cost method

2.

Valuation Standard and Method for Inventories:
Total average cost method (The amounts on the balance sheet have been calculated using the costaccounting method of reducing book value based on declining profitability.)

3.

Valuation Standard for Derivatives: Market value method

4.

Depreciation of Fixed Assets
Tangible Fixed Assets (except for lease assets):
Straight-line method
Intangible Fixed Assets (except for lease assets):
Straight-line method
The expenses for internal use computer software are amortized by thestraight-line method over the estimated useful life (5 years).
Lease assets:
Finance lease transactions that do not transfer ownership to the lessee
Straight-line method for the duration of the lease period with aremaining balance of zero.

5.

Accounting Standards for Reserves
Allowance for doubtful accounts:
Estimated uncollectible amounts are accounted for based on historical loan loss ratios in the case ofgeneral receivables and based on case-by-case examination of collectability in the case of specificreceivables, including doubtful receivables, in preparation against loss from the inability to collecton accounts receivable, loans, and the like.
Provision for bonuses:
Estimated bonus payments for the current fiscal year are accounted for in preparation for paymentof bonuses to employees.
Provision for business restructuring:A reasonably estimated future loss amount is accounted for in preparation for loss expected to be
incurred in line with the business structure improvement.
Provision for loss on business withdrawal:
A reasonably estimated amount is accounted for in preparation for loss expected to be incurred frombusiness withdrawal.
Provision for loss on business of subsidiaries and associates:
An estimated loss amount to be borne by MGC is accounted for in preparation for loss concerning
the business of subsidiaries and associates, in consideration of the financial condition, etc. of thosesubsidiaries and associates.

16

(Translation)

Provision for retirement benefits:
An amount based on estimated accrued pension liabilities and pension assets as of the end of thecurrent fiscal year is accounted for in preparation for payment of retirement and severance benefits
to employees.
MGC has a retirement and severance trust.
In the calculation of accrued pension liabilities, the method for attributing estimated retirement andseverance benefits to the period up to the end of the current fiscal year is based on the benefit formula
standard.
Prior service cost is amortized by the straight-line method over a portion (10 years) of the estimatedaverage remaining service years of employees at the time the cost was incurred.
Unrecognized actuarial gain or loss is amortized by the declining balance method over a portion (10years) of the estimated average of remaining service years of employees from the following fiscal
year.
Provision for environmental measures:
An estimated amount of disposal and transport costs of polychlorinated biphenyl wastes, based on
the handling cost publicized by Japan Environmental Storage & Safety Corporation, is accounted
for to cover the cost of properly disposing of said chemical waste as required by the Law for
Promotion of Correct Waste Disposal of Polychlorinated Biphenyls.
6.

Accounting standards for revenue and expenses
MGC applies the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31,2020), etc., and recognizes revenue when control of promised goods or services is transferred to acustomer in an amount that reflects the consideration to which the Company expects to be entitled in
exchange for these goods and services.

7.

Other significant matters that form the basis for preparing the non-consolidated financial statements
Hedge accounting methods“Exceptional accounting” is applied to interest rate swaps in cases where requirements are met.
Accounting method for retirement benefits
The accounting method for unrecognized actuarial gain or loss and unrecognized prior service costfor retirement and severance benefits is different from that of consolidated financial statement.

Notes on changes in accounting policies
1. Application of the Accounting Standard for Revenue Recognition, etc.
MGC has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March
31, 2020; hereinafter “Revenue Recognition Standard”) and other standards from the beginning of thecurrent fiscal year. MGC recognizes revenue when control of promised goods or services is transferred
to a customer in an amount that reflects the consideration to which MGC expects to be entitled in exchange
for those goods and services.
Accordingly, for paid supply transactions where MGC is under a repurchase obligation, whereas MGC
previously recognized revenue from the sale of goods supplied, it now no longer recognizes revenue fromthese sales.
MGC applies the Revenue Recognition Standard, etc. in accordance with the transitional treatment
provided for in the proviso to Paragraph 84 of the Revenue Recognition Standard. The cumulative impactof retrospectively applying the new accounting policies to prior periods is added to or subtracted fromretained earnings at the beginning of the fiscal year, in order to apply the new accounting policy from the
beginning balance.
As a result, for the current fiscal year, net sales and cost of sales were 11,195 million yen and 10,824
million yen, respectively, lower than without the application of the new accounting policy. Operating
income, ordinary income, and income before income taxes were each 371 million yen lower than without

17

(Translation)

the application of the new accounting policy. In addition, the balance of retained earnings at the start of
the fiscal year was 395 million yen lower than without the application of the new accounting policy.
Pursuant to the application of the Revenue Recognition Standard, etc., “notes receivable - trade” and“accounts receivable - trade,” which were presented under “current assets” in the non-consolidatedbalance sheet for the previous fiscal year, have been included in “notes and accounts receivable - trade,and contract assets” from the current fiscal year.
2. Application of the Accounting Standard for Fair Value Measurement, etc.
MGC has applied the “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July4, 2019; hereinafter “Fair Value Measurement Standard”) and other standards from the beginning of thecurrent fiscal year, and will prospectively apply the new accounting policies stipulated by the Fair Value
Measurement Standard, etc. in accordance with the transitional treatment provided in Paragraph 19 of the
Fair Value Measurement Standard and Paragraph 44-2 of the “Accounting Standard for Financial
Instruments” (ASBJ Statement No. 10, July 4, 2019). Accordingly, for available-for-sale securities thatare shares with market prices, whereas MGC previously applied the fair value method based on the
average market prices, etc. in the month preceding the fiscal closing date, from the current fiscal year, itapplies the fair value method based on market prices, etc. on the fiscal closing date. The impact of thischange on the financial statements for the current fiscal year is immaterial.

Notes on accounting estimates
1. Impairment of non-current assets
Amounts recognized in the financial statements for the current fiscal year:(millions of yen)

Property, plant and equipment:
111,007
Intangible assets:
1,603
Impairment loss:
2,991
Other information regarding the content of accounting estimates is omitted because it is the same as thatstated in the notes to consolidated financial statements.

Notes on Non-consolidated Balance Sheet
1. Collateralized Assets
Collateralized assets are as follows:(millions of yen)

Investments in securities (Note 1)
Stocks of subsidiaries and affiliates (Note 2)

1,845
14,540Notes: 1. ¥1,737 million in bonds and ¥108 million in shares of Fukushima Gas Power Co., Ltd. are collateralized for its
bonds and loans.
2. ¥10,467 million in shares of Brunei Methanol Company Sdn, Bhd., ¥2,380 million in shares of Appi
Geothermal Energy Corporation and ¥1,693 million in shares of Yuzawa Geothermal Power Corporation for
their respective loans.

2. Cumulative depreciation of property, plant and equipment:¥328,886 million
Cumulative depreciation includes cumulative impairment loss on fixed assets.
3. Reduction entry directly deducted from the acquisition price of property, plant and equipment:¥9,424 million

18

(Translation)

4. Guarantees
Loans, etc. of affiliates and others guaranteed:(Outstanding loan guarantees)¥51,407 million(Major guaranteed parties)
Caribbean Gas Chemical Ltd.
Mitsubishi Gas Chemical Engineering-Plastics (Shanghai) Co., Ltd.
Taixing MGC Suhua Specialty Materials Co., Ltd.
Korea Polyacetal Co., Ltd.
Abashiri Biomass 2nd Power Plant LLC.
Hubei Lingyong Electronic Materials Co., Ltd.
Yuzawa Geothermal Power Corporation
5. Receivables from and Payables to Affiliates
Short-term receivables
Long-term receivables
Short-term payables¥27,612 million¥10,702 million¥5,569 million¥2,026 million¥1,382 million¥1,157 million¥1,042 million¥100,745 million¥12,214 million¥69,025 million

Notes on Non-consolidated Statement of Income
Volume of Transaction with Affiliates
Volume of Business Transactions
Sales
Purchase
Volume of Non-Business Transactions¥269,335 million¥147,145 million¥15,837 million

Note on Non-consolidated Statement on Changes in Net Assets
Number of issued and Outstanding Shares
Common Stock
225,739,199 SharesClass and number of treasury shares as of the end the current fiscal year:
Common Stock
17,693,673 Shares

Note on Deferred Tax Accounting
Major Components of Deferred Tax Assets and Liabilities
Major components of deferred tax assets
Matters related to retirement and severance benefits
Provision for bonuses¥5,844 million¥933 million

Deferred tax assets are presented net of valuation allowance of ¥17,362 million.
Major components of deferred tax liabilities
Reserve for tax purpose reduction entry of non-current assets ¥△1,288 million
Gain on contribution of securities to retirement benefit trust ¥△1,255 million

19

(Translation)

Notes on Transactions with Affiliated Companies
Subsidiaries and Affiliates, etc.
(millions of yen)
Attribute

Subsidiary

Subsidiary

Subsidiary

Subsidiary

Name of Company

Mitsubishi Gas Chemical
Engineering-Plastics(Shanghai) Co., Ltd.
Taixing MGC Suhua
Specialty Materials Co.,Ltd.
Mitsubishi Gas Chemical
Trading Inc.
Mitsubishi Gas Chemical
Singapore Pte. Ltd.

% Voting
Rights Owned

91.05%
directownership
100% directownership
100% directownership
100% directownership

Relationshipwith AffiliatedCompany

Guarantee
of debts,
etc.
Guarantee
of debts,
etc.
Sale ofMGC
product, etc.
Sale ofMGC
product, etc.

ClassYear-End
Balance

10,702

--

--

5,569

--

--

108,978

Accounts
receivable

33,81342,999Accounts
receivable

5,407

Description ofTransaction

Transaction
VolumeGuarantee
of debts
Guarantee
of debts
Sales ofvariousproducts(Note 1)

Sales ofvariousproducts(Note 1)

Subsidiary

MGC Electrotechno Co.,
Ltd.

100% directownership

Purchase ofprocessed
products, etc.

Purchase ofprocessed
products(Note 2)

40,218

Accounts
payable7,605

Subsidiary

MGC Pure Chemicals
Taiwan, Inc.

100% directownership

Loan offunds, etc.

Loan of funds(Note 3)

1,672

Long-term
loans
receivable

10,29626.25%
Guarantee
Guarantee
indirectof debts,
of debts
27,612--ownership
etc.
(Note 4)
Notes: 1. Sales of various products are determined in the same way as general trading conditions, referring to market prices.
2. Purchase of processed products are determined in the same way as general trading conditions, referring to market
prices and costs.
3. The interest rate on loans is determined reasonably in consideration of market interest rates. The transaction
amount includes the net increase or decrease for the current fiscal year.
4. MGC is guaranteeing the loans of Caribbean Gas Chemical Ltd. without compensation.
SubsidiaryofAffiliate

Caribbean Gas
Chemical Ltd.

Notes Related to Per Share Information
Net Asset per ShareNet Income per Share¥1,552.56¥172.15

Notes on Revenue Recognition
Information fundamental for an understanding of revenue from contracts with customers has been
omitted, as it is the same as stated in the notes to consolidated financial statements.

Notes on Significant Subsequent Events
Repurchase and Cancellation of Own Shares
At a meeting of the Board of Directors held on May 12, 2022, MGC resolved to repurchase its own
shares, pursuant to Article 459, Section 1 of the Companies Act and to cancel a part of its own sharespursuant to the provisions of Article 178 of the Companies Act.
(1) Reasons for Repurchase and Cancellation of Own Shares
MGC will repurchase and cancel its own shares in order to enhance shareholder returns, improve
capital efficiency and conduct capital management flexibly.
(2) Outline of Repurchase1) Type of shares to be repurchased:
2) Number of shares to be repurchased:

Ordinary shares of MGC
Maximum of 3,500,000 shares

20

(Translation)3) Aggregate amount of repurchase price:4) Repurchase period:5) Repurchase method:(3) Outline of Cancellation
1) Type of shares to be cancelled:
2) Number of shares to be cancelled:
3) Number of shares after the cancellation:4) Scheduled cancellation date

Up to JPY 8,000,000,000
From May 13, 2022 to July 29, 2022
Market purchases

Ordinary shares of MGC
3,500,000 shares
222,239,199 shares
July 29, 2022

Other Notes
Amounts less than ¥1 million are rounded off.

- END of Notes to Non-consolidated Financial Statements -- END of this document-21