[Translation]

This document has been translated from the Japanese original for the convenience of non-Japanese shareholders.
In the event of any discrepancy between this document and the Japanese original, the original shall prevail.

Securities code: 2109
June 8, 2020
To our shareholders:
Daisuke Saiga
President and CEO
Mitsui Sugar Co., Ltd.
36-2, Nihonbashi-Hakozakicho,
Chuo-ku, TokyoNOTICE OF THE 96th
ORDINARY GENERAL MEETING OF SHAREHOLDERS
Please take notice that the 96th Ordinary General Meeting of Shareholders of Mitsui Sugar Co.,
Ltd. (the “Company”) will be held as described below.
If you are unable to attend the meeting in person, you may exercise your voting rights by using one of
the following methods. Please review the “Reference Documents for the Ordinary General Meeting of
Shareholders” and exercise your voting rights no later than 5:30 p.m. on Monday, June 22, 2020 as
described hereafter.
In the case that voting rights are exercised in duplicate, via both postal mail and the Internet, thevoting via the Internet shall be deemed valid.
[Voting in Writing]
Please indicate your approval or disapproval in respect of the proposals on the enclosed Voting
Rights Exercise Form and send the form back so that it reaches us by no later than the above
mentioned exercise date.
[Voting via the Internet]
Please review the “Guidance of Exercise Voting Rights via the Internet, etc.” as described hereafter(Japanese only) and exercise your voting rights no later than the above mentioned exercise date.

Meeting Details
1. Date and Time:

Tuesday, June 23, 2020 at 10:00 a.m. (Japan Standard Time)(The reception desk will open at 9:00 a.m.)

2. Venue:

Yamabuki (4F)
Palace Hotel Tokyo
1-1-1 Marunouchi, Chiyoda-ku, Tokyo-1-

[Translation]

3. Purpose:
Items to be reported:
1. Business Report and Consolidated Financial Statements for the 96th Fiscal year
(from April 1, 2019 to March 31, 2020) as well as audit results of Accounting
Auditor and the Audit & Supervisory Board for the Consolidated Financial
Statements
2. Non-Consolidated Financial Statements for the 96th Fiscal Year (from April 1,
2019 to March 31, 2020)
Items to be resolved:
Appropriation of surplus
Proposal 1:
Election of nine (9) Directors
Proposal 2:-2-[Translation]

Reference Documents for
the Ordinary General Meeting of Shareholders

Proposal 1:

Appropriation of surplus

Details pertaining to the appropriation of surplus are as follows:
It is the basic policy of the Company to pay stable and continuous dividends to shareholders.
With regard to the amount of dividends, the Company will set the level of dividends, taking into
account business development for future growth and sufficient internal reserves essential forstrengthening its management base, while considering the operating environment on a case-bycase basis, with the goal of a total return ratio of 50% combining cash dividends and its
dynamic capital policy.
Based on the policy above and business results, etc., the Company plans to add commemorative
dividend of 15 yen for the 60th anniversary of the SPOON brand to the ordinary dividend of 35
yen per share, for an annual dividend of 50 yen per share and a year-end dividend of 25 yen per
share, after making a comprehensive consideration of returning profit to shareholders, securing
sufficient internal reserves for strengthening the financial condition and management foundationof the Company, and investments to drive reproduction and growth.
Year-end dividends:(1) Type of dividend assets
Cash
(2)

Allocation and total amount of the dividend assets
25 yen per share of the Company’s common stock
Total amount of dividends: 642,541,325 yen(3)Effective date of dividend payment
June 24, 2020-3-

[Translation]

Proposal 2:

Election of nine (9) Directors

The terms of office of all eight (8) Directors expire at the conclusion of the Meetings. This
proposal requests the election of nine (9) Directors.
The candidates for Directors are as follows:
No.

Name

Current positions in the Company

Attendance atBoard of Directors’
meetings

1

Daisuke Saiga

Reappointment

President & CEO

13/13

2

Junichi Nomura

Reappointment

Director, Executive Vice President, General
Manager of Sugar Production Group

13/13

3

Hideyuki Mikayama Reappointment

Director, Senior Executive Managing Officer &
CFO

13/13

4

Junichi Handa

Outside Director

13/13

5

Yusuke Kawamura

Outside Director

13/13

6

Yuko Tamai

Reappointment
OutsideOutside Director

13/13

7

Taku MorimotoNew
appointment

Advisor–8

Takuya Tsuda

New
appointment

Executive Managing Officer, General Manager of
Sugar Business Group–

9

Takaaki KakudohNew
appointment
Outside––Reappointment
OutsideIndependent
Reappointment
OutsideIndependent-4-

[Translation]

No.

1

Name
(Date of birth)

Career summary, positions and responsibilities in the Company,
and important concurrent positions
April 1977

Joined Mitsui & Co., Ltd.

April 2008

Managing Officer, General Manager of Human
Resources & General Affairs Division, Mitsui & Co.,Ltd.

April 2010

Executive Managing Officer, Chief Compliance Officer,
Mitsui & Co., Ltd.

Daisuke Saiga(March 16, 1955)

June 2010

Representative Director, Executive Managing Officer,
Chief Compliance Officer, Mitsui & Co., Ltd.

Reappointment

April 2012

Representative Director, Senior Executive Managing
Officer, Mitsui & Co., Ltd.

April 2014

Representative Director, Executive Vice President,
Mitsui & Co., Ltd.

April 2016

Director, Mitsui & Co., Ltd.

June 2016

President and CEO of the Company (to present)

Number of theCompany’s
shares held

5,400

In charge of Internal Auditing Division and Quality Management Division(Reasons for nomination as candidate for Director)
The Company expects that he can continue to make use of his experience and proven track record as a corporate
manager of a trading firm as well as his knowledge and oversight capability necessary to faithfully perform duties for
its management.

Junichi Nomura(October 26, 1958)
2

April 1981

Joined the Company

April 2008

General Manager of Chiba Factory, Sugar Production
Group of the Company

April 2010

Executive Officer, General Manager of Kobe Factory,
Sugar Production Group of the Company

April 2013

Executive Officer, General Manager of Kobe Factory,
Sugar Production Group of the Company

April 2014

Executive Managing Officer, General Manager of Sugar
Production Group of the Company

June 2014

Director, Executive Managing Officer, General Manager
of Sugar Production Group of the Company

April 2016

Director, Senior Executive Managing Officer, General
Manager of Sugar Production Group of the Company

April 2020

Director, Executive Vice President, General Manager of
Sugar Production Group of the Company (to present)

Reappointment(Reasons for nomination as candidate for Director)
The Company expects that he can continue to make use of his many years of experience and insight in the
Company’s production department for its management.

-5-

2,260

[Translation]

No.

3

Name
(Date of birth)

Career summary, positions and responsibilities in the Company,
and important concurrent positions
April 1979

Joined Mitsui & Co., Ltd.

April 1999

General Manager of Finance Department, MITSUI &CO. (U.S.A.), INC.

April 2007

General Manager of Financial Planning and
Administrative Division, Mitsui & Co., Ltd.

April 2009

General Manager of Finance Division, Mitsui & Co.,Ltd.

April 2011

Managing Officer, General Manager of Finance
Division, Mitsui & Co., Ltd.

April 2012Managing Officer, General Manager of Nagoya Office,Mitsui & Co., Ltd.

Hideyuki Mikayama(August 21, 1955)

April 2013

Executive Managing Officer, General Manager ofNagoya Office, Mitsui & Co., Ltd.

Reappointment

June 2014

Outside Director, Resona Bank, Limited. (to present)

June 2014

Director, Executive Managing Officer & CFO General
Manager of Finance & Accounting Division of theCompany

April 2015

Director, Executive Managing Officer & CFO of theCompany

April 2017

Director, Senior Executive Managing Officer & CFO of
the Company (to present)

Number of theCompany’s
shares held

3,300

In charge of compliance, Legal and Internal Control Division, General
Affairs and Personnel Division, and Finance & Accounting Division(Important concurrent positions)
Outside Director, Resona Bank, Limited.
(Reasons for nomination as candidate for Director)
Since he has broad experience and knowledge gained through finance-related operations at a trading firm, theCompany expects that he can continue to make use of the experience and knowledge for its management.

Junichi Handa(February 13, 1957)

4

Reappointment
OutsideIndependent

April 1979

Joined Toa Nenryo Kogyo Co., Ltd.

February 2002

Representative Director, Booz Allen Hamilton

April 2005

President & CEO, Management Wisdom Partners, Japan

April 2013

Senior Vice President, Human Resources Department,
Takeda Pharmaceutical Co., Ltd.

June 2013

Corporate Officer, Senior Vice President, Human
Resources Department, Takeda Pharmaceutical Co., Ltd

October 2014

Global Human Resources, Takeda Pharmaceutical, Co.,Ltd.

June 2015

Outside Director of the Company (to present)

July 2015

President & CEO, Management Wisdom Partners, Japan(to present)

April 2016

Project Professor, Graduate School of Economics, The
University of Tokyo (to present)(Important concurrent positions)
Project Professor, Graduate School of Economics, The University of Tokyo
President & CEO, Management Wisdom Partners, Japan(Reasons for nomination as candidate for Outside Director)
Since he has a profound knowledge of corporate strategy, particularly in the field of formulating human resources
strategy with a proven track record, the Company expects that he can appropriately perform his duties as Outside
Director from an objective perspective.

-6-0[Translation]

No.

Name
(Date of birth)

Yusuke Kawamura(December 5, 1953)
5

Reappointment
OutsideIndependent

Career summary, positions and responsibilities in the Company,
and important concurrent positions
April 1977

Joined Daiwa Securities Co. Ltd.

January 1997

General Manager of Syndicate Department, CapitalMarket Division, Daiwa Securities Co. Ltd.

June 2007

Public Board Member, Self-regulation Board, Japan
Securities Dealers Association

April 2010

Director, Japan Securities Research Institute

January 2011

Commissioner, Fiscal System Council, Ministry of
Finance (to present)

April 2012

Deputy Chairman of the Institute, Daiwa Institute of
Research, Ltd.

February 2013

Commissioner, Business Accounting Council, Financial
Services Agency (to present)

May 2013

Commissioner, Ministerial Meeting on Promotion of
Utilization of Public-Private Funds (to present)

Number of theCompany’s
shares held

November 2013 Outside Director, Cool Japan Fund (to present)
May 2016

Visiting professor, Nankai University (to present)

January 2017

Visiting research fellow, Guangdong Academy of Social
Sciences (to present)

June 2017

Outside Director of the Company (to present)

June 2018

Trustee, Japan Securities Research Institute (to present)

April 2019

Special Chairman of the Institute, Daiwa Institute of
Research, Ltd.

0

Adviser, Japan Securities Dealers Association (topresent)
Visiting professor, KYOTO SAGA UNIVERSITY OF
ARTS. (to present)
April 2020

Representative Director, Glocal Policy Institute (topresent)(Important concurrent positions)
Adviser, Japan Securities Dealers Association(Reasons for nomination as candidate for Outside Director)
Since he has abundant experience and insight in the field from which he originates, the Company expects that he canappropriately perform his duties as Outside Director from an objective perspective.
April 1994

Registered as an Attorney at Law
Joined Nagashima & Ohno

September 2000 Joined Covington & Burling LLP (Washington, D.C.)
January 2001

Registered as an Attorney at Law in New York State

April 2001

Rejoined Nagashima Ohno & Tsunematsu

January 2003
Yuko Tamai(November 28, 1965) June 2015
6

Reappointment
OutsidePartner, Nagashima Ohno & Tsunematsu (to present)
Outside Audit & Supervisory Board Member, Japan
Bank for International Cooperation (to present)

June 2017

Outside Director of the Company (to present)

April 2019

Commissioner, Certified Public Accountants andAuditing Oversight Board (to present)(Important concurrent positions)
Partner, Nagashima Ohno & Tsunematsu
Outside Audit & Supervisory Board Member, Japan Bank for International
Cooperation(Reasons for nomination as candidate for Outside Director)
Since she has a high degree of specialized knowledge and abundant experience as an attorney, the Company expects
that she can appropriately perform her duties as Outside Director from an objective perspective.

-7-0[Translation]

No.

Name
(Date of birth)

Taku Morimoto(July 31, 1957)
7

New
appointment

Career summary, positions and responsibilities in the Company,
and important concurrent positions
April 1981

Joined Mitsui & Co., Ltd.

April 2005

Senior Vice President, Divisional Operating Officer,
Plastics & Inorganic Chemicals Division, MITSUI &CO. (U.S.A.), INC.

April 2008

General Manager, Performance Plastics Division,
Performance Chemicals Business Unit, Mitsui & Co.,Ltd.

March 2010

General Manager, Planning & Administrative Division,
Performance Chemicals Business Unit, Mitsui & Co.,
Ltd.

Number of theCompany’s
shares held

November 2011 Deputy Chief Operating Officer, Performance Chemicals
Business Unit, Mitsui & Co., Ltd.
April 2013

Managing Officer, General Manager, Planning &Administrative Division (Chemicals), Mitsui & Co., Ltd.

April 2014

Managing Officer, Chief Operating Officer, Performance
Chemicals Business Unit, Mitsui & Co., Ltd.

April 2016

Executive Managing Officer, Chief Operating Officer,
Performance Materials Business Unit, Mitsui & Co., Ltd

April 2017

Senior Executive Managing Officer, Chief Operating
Officer, Asia Pacific Business Unit, Mitsui & Co., Ltd.
Chief Executive Officer, Mitsui & Co. (Asia Pacific) Pte.
Ltd.

April 2019

Executive Vice President, Chief Operating Officer, Asia
Pacific Business Unit, Mitsui & Co., Ltd.

May 2020

Advisor of the Company (to present)(Reasons for nomination as candidate for Advisor)
The Company expects that he can make use of his experience and proven track record as a corporate manager of a
trading firm as well as his knowledge and oversight capability necessary to faithfully perform duties for its
management.

-8-0[Translation]

No.

Name
(Date of birth)

Takuya Tsuda(March 8, 1965)
8

New
appointment

Career summary, positions and responsibilities in the Company,
and important concurrent positions
April 1987

Joined the Company

April 2010

General Manager of Business Operation, Management
Planning Group of the Company

April 2013

General Manager of Management Planning and General
Manager of Sugar Business Promotion Division, Sugar
Business Administrative Group of the Company

June 2013

General Manager of Sugar Business Promotion Division,
Sugar Business Administrative Group of the Company

April 2014

Executive Officer, General Manager of Sugar Business
Promotion Division, Sugar Business Administrative
Group of the Company

September 2015 Executive Officer, General Manager of Sugar Business
Administrative Group and General Manager of Sugar
Business Promotion Division of the Company
December 2015

Outside Audit & Supervisory Board Member, Hokkaido
Sugar Co., Ltd. (to present)

April 2017

Executive Officer, General Manager of Business
Creation Head Group and General Manager of Business
Development Group of the Company

July 2018

Executive Officer, General Manager of Sugar BusinessGroup of the Company

April 2020

Executive Managing Officer, General Manager of Sugar
Business Group of the Company (to present)(Important concurrent positions)
Outside Audit & Supervisory Board Member, Hokkaido Sugar Co., Ltd.
(Reasons for nomination as candidate for Director)
The Company expects that he can continue to make use of his many years of experience and insightin the Company’s sugar business group for its management.

-9-

Number of theCompany’s
shares held

1,248

[Translation]

No.

Name
(Date of birth)

Takaaki Kakudoh(January 11, 1964)
9New
appointment
OutsideCareer summary, positions and responsibilities in the Company,
and important concurrent positions
April 1988

Joined Mitsui & Co., Ltd.

May 2005

General Manager of 7&i New Business Development
Department, Food & Retail Business Unit, Mitsui & Co.,Ltd.

March 2010

General Manager of Strategic Planning Department,
Food & Retail Business Unit, Mitsui & Co., Ltd.

August 2012

General Manager of Multigrain Business Promotion
Division, Food Resources Business Unit, Mitsui & Co.,Ltd.

January 2014

Deputy General Manager of Grain Project Division II,
Food Resources Business Unit, Mitsui & Co., Ltd.

January 2015

CEO of Multigrain Group

July 2017

CEO of Multigrain S.A.

April 2018

General Manager of Overseas Department, Corporate
Planning & Strategy Division, Mitsui & Co., Ltd.

April 2019

General Manager of Global Affairs & Solutions
Department, Corporate Planning & Strategy Division,
Mitsui & Co., Ltd.

April 2020

Operating Officer of Food Business Unit, Mitsui & Co.,
Ltd. (to present)

Number of theCompany’s
shares held

(Important concurrent positions)Operating Officer of Food Business Unit, Mitsui & Co., Ltd.
(Reasons for nomination as candidate for Outside Director)
Since he has abundant experience and insight in the field from which he originates, the Company expects that he canappropriately perform his duties as Outside Director from an objective perspective.
Notes:
1. There are no vested interests between each of the candidates and the Company.
2. Mr. Junichi Handa, Mr. Yusuke Kawamura, Ms. Yuko Tamai and Mr. Takaaki Kakudoh are candidates
for Outside Directors.
3. The Company designated Mr. Junichi Handa and Mr. Yusuke Kawamura as independent officers andregistered them with the Tokyo Stock Exchange pursuant to the provisions of the Exchange. If thereelection of each of them is approved at this Meeting, the Company plans for their appointment as
independent officers to continue.
4. Ms. Yuko Tamai is independent according to the Tokyo Stock Exchange’s independence criteria andfulfills the qualifications of an independent officer. However, in accordance with the policy of the law
office where she is a partner, the Company has no plans to register her as an independent officer with
the Tokyo Stock Exchange.
5. Although Mr. Yusuke Kawamura and Ms. Yuko Tamai have not been involved in corporate
management except for being an Outside Director in the past, the Company has judged that they can
perform their duties as Outside Directors appropriately as described in “Reasons for nomination as
candidate for Outside Director.”
6. Mr. Takaaki Kakudoh has been serving as a business executive at Mitsui & Co., Ltd., which had
specific relations with the Company during the past 5 years. He received salary and othercompensation for the last 2 years from the company as well, and is expected to continue to receive
salary and other compensation from the company.
7. Mr. Junichi Handa is currently the Company’s Outside Director. His terms of office will be 5 years at
the conclusion of this Meeting.
8. Mr. Yusuke Kawamura and Ms. Yuko Tamai are currently the Company’s Outside Director. Theirterms of office will be 3 years at the conclusion of this Meeting.
9. In accordance with Paragraph 1, Article 427 of the Companies Act, the Company has agreementswith Mr. Junichi Handa, Mr. Yusuke Kawamura and Ms. Yuko Tamai to limit their liability fordamages stipulated in Paragraph 1, Article 423 of the Companies Act to the minimum amount set
forth in Paragraph 1, Article 425 of the Companies Act. If the reelection of each of them is approvedat this Meeting, the Company will keep the said agreements with each of them while if the election of
Mr. Takaaki Kakudoh is approved, the Company will have the same agreement with him.

- 10 -

0[Translation](Attached materials)

Business Report(From April 1, 2019 to March 31, 2020)
Overview of the corporate group
1. Business progress and results(1) Operating environment
In fiscal 2019, ended March 31, 2020, the Japanese economy continued to recover at a moderate pace, supported
by improving employment and income conditions in the first half of the fiscal year. However, in the second halfof the fiscal year, natural disasters and the hike to consumption tax weighed on consumer spending and there wasa big concern about a negative impact on the economy from the widening COVID-19 outbreak.
Against that backdrop, the Mitsui Sugar Group focused on strengthening the earnings capabilities of existing
businesses while remaining fully committed to its primary responsibility to society – the stable supply of safe andreliable sugar products and other food ingredients. In addition, the Company worked to reinforce its business basein both Japan and overseas. Specifically, in December 2019, the Company established a new joint venture called
HANY SUGAR to manufacture and sell small home-use sugar packets and various types of processed sugar in
China as part of ongoing efforts to tap into growth in overseas markets using sites in Asia.
At a meeting of the Board of Directors on March 25, 2020, the Company approved a number of moves aimed atfurther strengthening the Group’s sugar business in Japan: (1) start discussions with Dai-Nippon Meiji Sugar Co.,
Ltd. regarding a business integration with an effective date of April 1, 2021, and (2) open discussions with DaiNippon Meiji Sugar and Nippon Beet Sugar Manufacturing Co., Ltd. about a capital and business alliance with aneffective date to be determined separately. For more details about the board resolutions, please refer to the press
release published on March 25, 2020: “Notice Regarding Commencement of Talks for Business Integration
between Mitsui Sugar Co., Ltd. and Dai-Nippon Meiji Sugar Co., Ltd. and Capital and Business Alliance between
Mitsui Sugar Co., Ltd., Dai-Nippon Meiji Sugar Co., Ltd. and Nippon Beet Sugar Manufacturing Co., Ltd.”(2) Summary of the Mitsui Sugar Group(Sugar Business)
In the overseas crude sugar market, which affects raw material prices in the Sugar Business, the sugar price started
the fiscal year at the 12 cents per pound level, before falling to around 10 cents at one point amid growing
expectations that supply-demand conditions would ease worldwide. Amid a string of forecasts pointing to a dropin output in key producing countries in the coming fiscal year, the price subsequently rebounded, reaching the 13
cents per pound level at the end of December 2019. However, after reaching the high-15 cent level in February
2020, the sugar price fell back sharply to end the fiscal year at 10 cents per pound amid a downturn inmacroeconomic conditions due to a slowdown in the global economy caused by the COVID-19 outbreak, which
combined to create a range of factors that indirectly impacted the supply-demand environment for sugar.
Meanwhile, in Japan, retail prices for refined white sugar trended at around 187-188 yen per kg during the fiscal
year.
In sales activities, sales volume overall declined compared with the previous fiscal year, reflecting weak shipments
to users in the beverage sector amid an unseasonably cold rainy season and wet summer, and delays to production
at a factory in the fourth quarter of the fiscal year. Amid a downward trend in sales of home-use 1kg sugar packs,
the Company expanded its range of resealable small sugar packets designed for better storage and worked toestablish the packaging as the market standard by targeting volume retailers in the Tokyo Metropolitan area.
On the cost front, the Group faced higher fixed costs, reflecting rising logistics costs due to worker shortages andan increase in depreciation and amortization related to investment in new equipment and facilities to ensure stable
operations. However, efforts to procure crude sugar at appropriate prices led to an improvement in raw material
costs, supporting an increase in operating income compared with the previous fiscal year.
Overseas, the Group established a new joint venture in China called HANY SUGAR, which is preparing to start
operations in autumn 2020, drawing on the Group’s domestic expertise in small home-use sugar packets and theprocessing of various types of sugar.
In consolidated subsidiaries, production volume declined at Showa Sugar Co., Ltd. amid poor weather, and profits
declined at Hokkaido Sugar Co., Ltd. due to a drop in sales prices and sales volume. However, SIS’88 Pte Ltd,
which became a consolidated subsidiary at the end of the third quarter in the previous fiscal year, performed well

- 11 -

[Translation]on the whole throughout the fiscal year, contributing to profits.
As a result, net sales of the Sugar Business amounted to 92,145 million yen (up 9.5% year on year) and operating
income was 3,240 million yen (up 37.9% year on year).
Sugar market status during period
Domestic market price (listed in Nippon Keizai Shimbun, per kilogram of a large bag of superfine sugar, Tokyo)
Fiscal year ended March 31, 2020: 187-188 yen
Overseas crude sugar price (NY sugar current delivery, per pound)
Opening priceHighest price

Lowest price

Closing price12.53 cents

15.90 cents

10.42 cents

10.42 cents(Food Science Business)
In the Food Science Business, sales of palatinose and palachinit were slightly weak, but operating income
increased compared with the previous fiscal year due to an improvement in the profit margin for palatinose.
Growing use of sugar cane extract for sanitation applications also contributed to higher sales and profits year on
year. In July 2019, the Group’s slow calorie sugar, which contains palatinose, received approval as a Food with
Functional Claim for its ability to limit increases in blood sugar levels after meals. To coincide with the labelling
approval, the Food Science Business ran a high-profile marketing campaign to raise consumer awareness about
the product’s functionality.
In consolidated subsidiaries, sales and profits from TAISHO TECHNOS CO., LTD. increased due to higher sales
and an improvement in the cost ratio following the start of operations at a new plant. Nutri Co., Ltd. also reported
higher sales and profits, due mainly to sales growth at a liquid food business acquired during the fiscal year underreview.
As a result, net sales in the Food Science Business amounted to 19,766 million yen (up 2.9% year on year), while
operating income was 679 million yen (up 44.3% year on year).
(Real Estate Business)
The Real Estate Business booked a full-year contribution from the leasing of a logistics center in Okayama City,
which was leased out in November 2018. However, net sales of 1,942 million yen (down 0.7% year on year) andoperating income of 928 million yen (up 0.7% year on year) were both flat compared with the previous fiscal year.
As a result of the above, net sales in fiscal 2019 increased 8.1% year on year to 113,854 million yen and operating
income rose 29.5% to 4,848 million yen.
In non-operating income and expenses, the Group booked royalty income of 1,340 million yen based on adevelopment and marketing rights agreement for fingolimod (FTY720). However, due to an ongoing arbitration
process between Novartis Pharma AG and Mitsubishi Tanabe Pharma Corporation, which is the joint holder of the
fingolimod patent with the Company, the Group continues to exclude the recognition of profits related to the
portion of royalty income subject to the arbitration process by Novartis Pharma AG, which is challenging theenforceability of certain provisions under the agreement.
In addition, the Group recorded share of loss of entities accounted for using equity method, mainly reflecting adecline in sales prices and sales volume at affiliates in Thailand amid weakness in the overseas crude sugar market.
As a result, ordinary income declined 51.7% year on year to 4,982 million yen and profit attributable to owners ofparent fell 64.7% to 2,422 million yen, which also reflected an extraordinary loss of 234 million yen as
environmental expenses related to the accidental leak of heavy fuel oil at Hokkaido Sugar Co., Ltd.
Given the current characteristics of the Group’s financial position, which has seen a large increase in depreciation
costs for goodwill and other items related to the acquisition of businesses and assets to drive future growth, theCompany is focusing on EBITDA (*1) in conjunction with other profit measures to provide a clearer picture of
the Group’s cash generation capabilities. In the fiscal year under review, EBITDA was 11,132 million yen,showing that the Group’s business activities remain in a healthy state.
*1 Simplified calculations for consolidated depreciation and amortization and other items added to consolidated
operating income.

- 12 -

[Translation]

Net sales by business segment
Business segment
Sugar Business
Food Science Business
Real Estate BusinessTotal

Net sales
Million yen
92,145
19,766
1,942
113,854- 13 -

Component ratio
%
80.9
17.4
1.7
100.0

[Translation]

2. Issues to work on<The Mitsui Sugar Group’s Mission>
The Mitsui Sugar Group will contribute to healthy and diverse lifestyles for people everywhere through food bysupplying safe and reliable food ingredients that harness the natural bounties of sugar cane and sugar beet.
<Current Business Environment>
The Sugar Business generates over 80% of the Group’s sales and owns domestic sugar producing companies in
Hokkaido, Kagoshima and Okinawa. As such, the Group’s business structure is exposed to changes in theoperating environment in the Sugar Business and agricultural and trade policies. In addition, domestic sugar
demand is projected to decline due to factors such as Japan’s aging society and falling population and competition
from pre-sweetened products and high-fructose corn syrup. To address those challenges, the Group plans tostrengthen the domestic Sugar Business and rapidly build a balanced earnings structure by implementing initiatives
in the Food Science Business, Real Estate Business and overseas operations.
In fiscal 2020, ending March 31, 2021, the growing COVID-19 outbreak is likely to have a prolonged impact on
the global economy, not only Japan. Given that outlook, the Mitsui Sugar Group will continue to conduct its
business activities in order to meet its primary responsibility to society – the stable supply of safe and reliablesugar products and other food ingredients.
Over the last few years, royalty income based on a development and marketing rights agreement for fingolimod(FTY720) has contributed significantly to earnings. However, due to an ongoing arbitration process about theagreement between Novartis Pharma AG and Mitsubishi Tanabe Pharma Corporation, which is the joint holder ofthe fingolimod patent with Mitsui Sugar, the Group continues to exclude the recognition of profits related to the
portion of royalty income that is subject to the arbitration process.
<Measures to Address Issues>
Against that backdrop, Mitsui Sugar will work closely with Group companies to strengthen existing businesses
and expand businesses in growth fields, based on the recognition of the following specific issues and measures toaddress them.
In the domestic Sugar Business, we will (1) continue to invest to ensure stable supplies, while also investing in
automation and labor-saving measures to address structural changes in Japanese society, such as the declining
population, (2) pursue optimization across all areas of our supply chain, from production and sales through tologistics, in response to broader issues that affect Japan as a whole, such as labor shortages in manufacturing andlogistics businesses, and (3) launch competitive products using the SPOON brand and roll out marketing activities
tailored to changes in market needs from the perspective of customers.
In the overseas Sugar Business, we will (1) reinforce the competitiveness of SIS’88 Pte Ltd in Singapore, (2) build
a sugar product supply chain in the China food products business serving both the BtoB market and the BtoC
market, and (3) enhance cooperation with affiliates in Thailand to implement strategic initiatives.
In the Food Science Business, we aim to increase earnings capabilities by stepping up cooperation between Group
companies and by using M&A and other external resources, targeting fields that extend healthy life expectancy,
improve performance during exercise and combine health and flavor.
In the Real Estate Business, we aim to continue generating stable cash flow using assets in the real estate portfolio,
and further improve asset efficiency and strengthen earnings capabilities by developing real estate in Minami Wardin Okayama City and Nagata Ward in Kobe City.
In research and development, we aim to create new businesses that maximize the sustained benefits of sugar cane
as an environmentally friendly crop. Specifically, we plan to manufacture and develop applications for polyphenol
and other valuable substances extracted from bagasse, a solid residue left after the extraction of sugar cane juice,
and develop technology to improve cultivation techniques to make sugar cane farming more stable and highly
profitable.
In addition, Mitsui Sugar disclosed on March 25, 2020 that it plans to start discussions with Dai-Nippon Meiji
Sugar Co., Ltd. regarding a possible business integration, and with Nippon Beet Sugar Manufacturing Co., Ltd.
regarding a possible capital and business alliance. Amid the increasingly challenging operating environment, thethree parties will discuss ways of combining their extensive management expertise in production technology,
quality and cost control, logistics and raw material procurement, accumulated over many years in the domestic
sugar sector, in order to create a more stable supply framework in Japan and strengthen international
competitiveness to support future growth.

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